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HomeMy WebLinkAbout FULL PACKET_2014-07-15MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA JULY 1, 2014 CLOSED SESSION MEETING CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTA ANA, CA 5:10 P.M. ATTENDANCE COUNCILMEMBERS Present: MIGUEL A. PULIDO, Mayor (5:40 P.M.) SAL TINAJERO, Mayor Pro Tern ANGELICA AMEZCUA P. DAVID BENAVIDES (5:12 P.M.) MICHELE MARTINEZ ROMAN A. REYNA VINCENT F. SARMIENTO COUNCILMEMBERS Absent: None STAFF Present: DAVID CAVAZOS, City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council PUBLIC COMMENTS Robin Cook, would like to know what, if any, liability medical marijuana establishments have on the City; suggest hold harmless provision be included in permit process from such businesses. COUNCIL RECESSED to Room 147 for Closed Session discussion at 5:13 p.m. CLOSED SESSION ITEMS - The Brown Act permits legislative bodies to discuss certain matters without members of the public present. The City Council finds, based on advice from the City Attorney, that discussion in open session of the following matters will prejudice the position of the City in existing and anticipated litigation: CITY COUNCIL MINUTES 1 JULY 1, 2014 1 0A -1 1. CONFERENCE WITH LABOR NEGOTIATOR pursuant to Government Code Section 54957.6(a): Agency Negotiators: Personnel Services Executive Director, Ed Raya Employee Organizations: Santa Ana Police Management Association (PMA) • Part -time Civil Service Employees (PTNS) • Confidential Association of Santa Ana (CASA) • Santa Ana Management Association (SAMA) CLOSED SESSION REPORT — See Item 19A. for any reportable actions. ADJOURNED THE CLOSED SESSION MEETING AT 5:51 P.M. AND CONVENED TO THE REGULAR OPEN MEETING CITY COUNCIL MINUTES 2 JULY 1, 2014 1 0A -2 REGULAR OPEN MEETING CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTA ANA, CA 5:55 P.M. ATTENDANCE COUNCILMEMBERS Present: MIGUEL A. PULIDO, Mayor SAL TINAJERO, Mayor Pro Tern ANGELICA AMEZCUA P. DAVID BENAVIDES MICHELE MARTINEZ ROMAN A. REYNA VINCENT F. SARMIENTO PLEDGE OF ALLEGIANCE INVOCATION PRESENTATIONS COUNCILMEMBERS Absent: None STAFF Present: DAVID CAVAZOS, City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council MAYOR PULIDO JACK ABEELEN, POLICE CHAPLAIN 1. PROCLAMATION presented by MAYOR PULIDO to Michael Ray for his exemplary citizen participation and service to the Santa Ana community. 2. PROCLAMATION presented by MAYOR PULIDO to Susan Andersen for her 100th birthday. 3. CERTIFICATE OF RECOGNITION presented by MAYOR PRO TEM TINAJERO and COUNCILMEMBER SARMIENTO to Erik Santacruz for his outstanding academic achievements. 4. PROCLAMATION presented by COUNCILMEMBER BENAVIDES to Bishop Abel Aguilar for his 23 years of service to the Christian Tabernacle Church in Santa Ana. CITY COUNCIL MINUTES 3 JULY 1, 2014 1 0A -3 5. CERTIFICATE OF RECOGNITION presented by COUNCILMEMBER BENAVIDES to Pastor Jason Aguilar for becoming the new pastor of Christian Tabernacle Church in Santa Ana. 6. CERTIFICATES OF RECOGNITION presented by COUNCILMEMBER MARTINEZ to Vincent Tinajero for being selected as an All American player by the United States Specialty Sports Association (USSSA) and to Coach Baum, Coach Cueva, and Coach Ramirez for dedicating their time to Santa Ana youth through baseball. 7. CERTIFICATE OF RECOGNITION presented by COUNCILMEMBER MARTINEZ to Kathy Brown for her 17 years of dedication and service to the Santa Ana Boys and Girls Club. AGENDA ITEM TAKEN OUT OF ORDER RESOLUTION 55D. SUBMISSION TO THE VOTERS AT THE NOVEMBER 4, 2014 MUNICIPAL ELECTION: CITY OF SANTA ANA INITIATIVE ON MEDICAL MARIJUANA- Planning and Building Agency Continued from the June 17, 2014 City Council Meeting by a vote 7 -0. The following speakers addressed the City Coucil on the matter: • State Senator Lou Correa, spoke a couple of different issues; noted that United States lost game at 2014 Federation International of Football Association (FIFA) World Cup; provided community an update at the State level - Water Bond considered by the Senate; also, advised what is going on at the State level and listen to concerns of residents as it applies to medical marijuana; sponsored legislation at the request of City of Anaheim; proposed to have 600 feet of home or residence, but governor did not sign Bill; concerned with people driving after medicated; California Police Chiefs Association has zero tolerance; Association requested support to sponsor Bill; opposed Medical Marijuana Bill (SB420) 20 years ago, only one measure has passed to begin to address the regulation; SB1262 is in Assembly, sponsored by OC Deputy Sherriff, Santa Ana Police Officers Association among other groups, industry is not regulated and confusing for law enforcement (guidelines vague), not legal for recreational use; agricultural product that needs regulation, medical subject to labeling requirements; create new bureau of medical marijuana regulations within consumer affairs department; dispensaries away from children, neighborhoods, opposed to initiative CITY COUNCIL MINUTES 4 JULY 1, 2014 1 0A -4 that is paid by special interest groups - not good policy; City proposal should include Police Chief to enforce rules and regulations; revenue must fund public safety monitoring. • John Grace, representative of OC NORML, suggested that regulations proposed by the City are de -facto bans; opposed to City's ability to increase tax up to 10 %. • Sean Donahoe, opined that good set of policies regulating dispensaries may help reduce crime; City needs defendable and reasonable regulations; edibles permitted. • Kandice Hawes, founder of OC NORML, opined that Argument and Rebuttal Against Voter Initiative inaccurate and concerned with issues included in statement. • Robin Cook, not totally against initiative; need to regulate. • Dan Peters, supports regulation of medical marijuana. • Guy Lopez, concerned with City's proposed initiative. • Elizabeth Lopez, supports City's alternative to allow in commercial area; and 500 feet is acceptable. • Douglas Lanphere, noted that City's proposed ordinance on Medical Marijuana better than first version presented; concerned with Argument and Rebuttal submitted against the Voter Initiative. • Evangeline Gawronski, suggested one dispensary in each quadrant in the City to allow for easy access to medication; person purchasing from unauthorized business to be find and tax should at least equal to enforcement cost; no grey area just black and white ordinance for voters to consider. • Mika Denny, member of the West Floral Park Neighborhood Association, represent 600 homes; concerned with increase loitering, traffic and upsetting to her neighborhood, 600 feet is not enough; place far away from homes and children. • Edwin Gomez, supports medical marijuana initiative; thank city council members for considering the matter. • Steve Rocco, spoke of concern with security at City Hall, and concerns with organized crime. • Alex Vega, concerned with smoking marijuana and additions by some homeless. • Thomas Gordon, noted that 5 year old resident was killed by a driver that was smoking marijuana; contrary of City Council action to approve a grant fund from the State to enforce drugs; concerned with increased crime; noted that City of Denver has far exceeded the cost of public safety enforcement after approving Medical Marijuana. • Steve McGuigan, thanked Senator Correa for proposing legislation; dispensaries are businesses; City Council to listen to residents Council discussion ensued. Mayor Pro Tern Tinajero, thanked all speakers; opposed to closure of medical marijuana; enforcement would be costly; concerned with mobile CITY COUNCIL MINUTES 5 JULY 1, 2014 1 0A -5 dispensaries; voter initiative proposed variance is too close to schools; noted that some dispensaries are following state regulations, but not all; supports staff recommendation. Staff presentation by Interim Planning and Building Executive Director, Karen Haluza. Background • February 2013 - Santa Ana Medical Cannabis Restriction and Limitation Initiative Obtained enough valid signatures to qualify the initiative for the November 2014 General Election ballot • March 2013 - City Council directed staff to explore placing a competing initiative on the November 2014 ballot. • June 3, 2014 — City Council considered options to address the qualified initiative and directed staff to draft a competing ballot initiative that would allow a limited number of regulated collectives /cooperatives. • June 17, 2014 — City Council considered the draft ballot initiative. Following discussion the City Council directed staff to make several changes to the draft ballot initiative and continued the item to July 1, 2014. • June 18 — June 30, 2014 — Staff received additional feedback from members of the City Council and the advocate community. Policy Changes • Remove the cap • The cap of no more than 12 collectives /cooperatives has been removed. ■ Reduce hours of operation • Hours are now 10 am to 8 pm Monday- Saturday and 11 am to 7 pm on Sunday. • Reduce the separation requirement • The separation requirement between collectives /cooperatives is now 500 ft. • Give Council flexibility to make changes • Council reserves authority to make future amendments without voter approval. • Address potential conflicts with competing measures • If approved by the voters, the Council initiative would render competing measures null and void. Technical Changes ■ Remove /amend items that may be subject to legal challenge • Clarifies that requests for video recordings must be by consent, through a warrant or court order. • Clarifies that agents, employees and volunteers can be cited for violations. CITY COUNCIL MINUTES 6 JULY 1, 2014 1 0A -6 Clarifies that proposed gross receipts tax will not be adjusted by both a percentage and inflation. Provides that violations of the proposed ordinance are subject to Penal Code penalties. Modifies requirements regarding the maintenance of records. Additional Alternatives • Allow collectives /cooperatives in Arterial Commercial (C -5) or Professional (P) zones if no Industrially -zoned land is available. No more than two per ward in these zones. o Alternative Section 18 -615 • Replace the Conditional Use Permit with a Regulatory Safety Permit issued administratively, subject to annual review and renewal. o Alternative Section 18 -617 • Include a "Sunset Provision" to repeal the ordinance unless readopted by the City Council. • Alternative Section 6 • Remove language regarding medical marijuana testing and testing logs. • Remove Sections 18 -617.5 (b) and (c) • Use a Request for Proposals (RFP) process to select collectives/cooperatives. Enforcement Staffing Scenario 1 — Focus is on enforcement primarily from a land use perspective with police assistance. Estimated cost is $1 million. Code Enforcement Officer (3) Assistant City Attorney (2) Police Officer (1) Building Inspector (0.5) Office Assistant (1) Scenario 2 — Focus is on enforcement primarily from a land use perspective with police assistance, but with increased capacity. Estimated cost is $1.5 million. Code Enforcement Officer (4) Assistant City Attorney (2) Police Officer (2) Building Inspector (1.5) Office Assistant (1) Enforcement Staffing Scenario 3 — Would create a vice unit within the Police Department, in addition to land use enforcemnt. Estimated cost is $2 million. Code Enforcement Officer (4) Assistant City Attorney (2) Police Officer — Vice Unit (4) Building Inspector (1.5) Office Assistant (1) CITY COUNCIL MINUTES 1 0A -7 JULY 1, 2014 Staff presentatation concluded and Council discussion continued. Councilmember Benavides asked about the approval process. Staff noted that alternative included Regulatory Safety Permit in lieu of Conditional Use Permit. Mayor Pulido asked how many additional dispensaries could be added if allowed in other areas of the City. Councilmember Martinez, noted that final approval with Police Chief, but process starts at the Planning Department. Councilmember Sarmiento supports discretionary permit because it is not a vested right, like conditional use permits. Interim Planning and Building Executive Director Haluza noted that permit would be renewed annually. Carvalho noted that background checks were included in alternative. Councilmember Amezcua, suggested 800 feet as a compromise between each business. Councilmember Reyna, concerned that Voter Intiative qualified a year ago; supports lottery process, removal of CUP, keeping to M1 and M2, and proximinity to next dispensary gap may cause red light district; address need for medical marijuana. Councilmember Sarmiento, Clty has grappled with regulation since City approved moratorium, no robust discusson at the federal or state level; thanked staff for including suggestion by residents and council; supports city reservation to amend in the future; alternatives is replacement of CUP and removal of testing regulations; include lottery process together with police background check; limit to M1 and M2 zones. Councilmember Martinez need to consider health impacts, not smoke on site or outside of premise, permission from owners required in permit procecess; concerned with police enforcement and public safety; city has sent letters to busineses back in 2012 for dispensaries; City Council requested options; would only support matter if we have an Action and Enforcement Plan prior to approval. Councilmember Amezcua, focus on enforcement plan, have receive complaints from residents near schools. City Attorney Carvalho noted that staff has identified 5 -6 dispensaries that are in close proximity to school; will provide update. Currently have 41 CITY COUNCIL MINUTES 8 JULY 1, 2014 1 0A -8 open litigation cases. City has moratorium but we don't have control over court process including appeals. Councilmember Martinez asked about police authority. Councilmember Benavides, agree wth need for enforcement plan; opined that negative element brought by establishments; present for consideration is to provide voters with option to have a ban; City not banning medical marijuan, but only allow in clinics and medial facilities. separation of daycare and community centers be included in proposed language; churches and commnity centers are alerady included in proximity Mayor Pulido suggested churches distance from Collective /Cooperative in the future, if possible. and parks be included in 600 feet . Request that City Council consider FRIENDLY AMENDMENT by Reyna to change distance between Collective /Cooperative to 800 feet. Mayor Pro Tern Tinajero concerned that due diligence not performed on new proposed distance. Regulations can be amended in the future, if measure approved. SUBSTITUTE MOTION by Benavides, seconded by Reyna to place City's initiative as proposed and include another measure to ban establishments for voter's to consider all of their options. Motion failed 2 -5 (Martinez, Sarmiento, Tinajero, Pulido, and Amezcua dissented). MOTION: Approve staff recommendation with following revisions to proposed ordinance: remove cap on number of allowed businesses, reduce hours of operation, reduce separation between Collectives to 500 feet, reserve right to amend ordinance in the future by the City Council, replacement of Conditional Use Permit with a Safety Regulatory Permit, approve a lottery selection process, remove testing requirement and allow only M1 and M2 zones: 1. Adopt resolutions. a. RESOLUTION NO. 2014 -037 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR AND GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 4, 2014 FOR SUBMISSION TO THE VOTERS OF A BALLOT MEASURE RELATING TO THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND CITY COUNCIL MINUTES 9 JULY 1, 2014 1 0A -9 COOPERATIVES AND REQUESTING THE BOARD OF SUPERVISORS OF ORANGE COUNTY TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION WITH THE STATE'S GENERAL ELECTION b. RESOLUTION NO. 2014 -038 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR THE PLACEMENT OF A MEASURE TO BE PLACED ON THE BALLOT OF THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 4, 2014 FOR SUBMISSION TO THE VOTERS OF A PROPOSED ORDINANCE TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES; AND DIRECTING THE CITY ATTORNEY TO DRAFT AN IMPARTIAL ANALYSIS c. RESOLUTION NO. 2014 -039 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED ORDINANCE TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES TO BE PLACED ON THE BALLOT OF THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 4, 2014 2. Approve guidelines for preparation of arguments for or against the proposed Ordinance, fix the date for the submission of Direct Arguments and Rebuttal Arguments, and post the notice for the argument process in accordance with the provisions of the California State Elections Code. 3. Authorize the City Attorney to prepare an Impartial Analysis to be submitted for consideration by the voters. 4. Direct staff to process all other documents required to proceed with the proposed City Measure. 5. Approve proposed ordinance for voter consideration. ORDINANCE NO. NS -2864 - AN ORDINANCE OF THE PEOPLE OF THE CITY OF SANTA ANA AMENDING CHAPTER 18 OF THE MUNICIPAL CODE TO DELETE AND REPLACE ARTICLE XIII, TO DELETE SECTION 41 -121, DELETE SUBSECTION (B) OF SECTION 41 -144, AND AMEND ARTICLE XII OF CHAPTER 21 BY ADDING SECTIONS 21 -126, 21 -127, 21 -128, 21 -129 AND 21 -130 TO REGULATE THE ESTABLISHMENT, OPERATION AND TAXATION OF MEDICAL MARIJUANA COLLECTIVES AND COOPERATIVES CITY COUNCIL MINUTES 10 JULY 1, 2014 1 0A -10 MOTION: Tinajero SECOND: Sarmiento VOTE: AYES: Amezcua, Pulido, Sarmiento, Tinajero (4) NOES: Benavides, Martinez, Reyna (3) ABSTAIN: None (0) ABSENT: None (0) CLOSED SESSION REPORT - There were no reportable actions. PUBLIC COMMENT • Steve McGuigan, supports Agenda Item 23A and is available to answer any questions. • Carolyn Torres, Chicanos Unidos, spoke in opposition to gang injunction and expressed that she has spoken about this matter before and has been treated as if her concern was unnecessary. • Uriel Ramirez, Chicanos Unidos, spoke about gang injunction on Townsend Avenue feels his rights have been violated. • Vanessa Cerda, Chicanos Unidos, spoke in opposition to gang injunction; protect their families, not break them. • Ariel Meza, Christian Tabenackle, spoke about gang injunction, said there are alternatives, and community should work together to find new ways to meet the needs of the young population. Wants a different solution. • Jaden Rocha, against gang injunction says it is racist and wrong because it separates families. • Genevieve Huizar, spoke in opposition to gang injunction, wants freedom. Alexis Navateodoro, opposes to gang injunction because people are losing their homes, it is unfair. • Robert Sanchez, Chicanos Unidos, opposed to police injunctions; comprehensive job programs and not criminalize youth. • Erica Navarro, Chicanos Unidos, spoke about misrepresentation at community meetings; need job placement and trauma care and summer programs; • Gilbert Belmontes, Chicanos Unidos, spoke on police abuse; increased police presence • Gaby Hernandez, Chicanos Unidos, expressed that gang injunction is not the solution; request all options be exhausted; • Alfonso Alvarez, commented on current gang injunction on Townsend Avenue; protect personal and constitutional rights; that community does not need gang injunction. CITY COUNCIL MINUTES 11 JULY 1, 2014 1 0A -11 • Sara Guerrero, member of South Coast Repertoire, play opening in 3 months in open space in Civic Center area; use dance, music and toy theater; open call to community. • Madeleine Spencer, commented on Santa Ana Unified School District ( SAUSD) outreach efforts; SAUSD approved $4 million over 8 years to be used for Restorative Justice Programs; State approved SB1272; request all conserve water. • Richard Moser, spoke on Agenda Item 55C, thanked City Council for continuing matter in the past; proposed additional revisions to staff recommendation. • Tracy Simons, safety for cars, pedestrians, sidewalk continuation, lights synchronized, wall at least 10 ft., medians, underground utilities, improved intersections; continuity of south Bristol; support full take on Bristol Street Widening Project. • Tony Michalski, spoke on Agenda Item 55C; support full take and complete streets. • Parka Roshanzamir, spoke on Public Hearing 7513; concerned with citation and not include in property tax bill and water bills; staff to meet with applicant CONSENT CALENDAR ITEMS MOTION: Approve Consent Calendar Items 10A through 31A as recommended by staff, with the following modifications: • Continue consideration of Agenda Item 22C for 30 days at the request for staff; • Continue consideration of Agenda Item 25D at the request for staff; • Councilmember Amezcua abstained on Agenda Item 10A; • Councilmember Martinez pulled Agenda Item 25G for separate action; • Councilmember Benavidez pulled Agenda Item 22C for separate action; and • Mayor Pro Tern Tinajero abstained on Agenda Item 22B Tinajero for potential conflict of interest due to a campaign contribution. MOTION: Sarmiento SECOND: Amezcua VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Sarmiento, Tinajero (6) NOES: None (0) ABSTAIN: None (0) ABSENT: Reyna(1) CITY COUNCIL MINUTES 12 JULY 1, 2014 1 0A -12 ADMINISTRATIVE MATTERS MINUTES 10A. MINUTES FROM THE SPECIAL MEETING OF JUNE 12, 2014 - Clerk of the Council Office MOTION: Approve Minutes. * Councilmember Amezcua abstained on Agenda Item 10A. 10B. MINUTES FROM THE SPECIAL MEETING OF JUNE 17, 2014 - 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. 11A. SECOND READING ORDINANCE - AMENDING SANTA ANA MUNICIPAL CODE CHAPTER 14 TO EXTEND OPERATING HOURS FOR SAFE AND SANE FIREWORKS STANDS ON THE FOURTH OF JULY - City Manager's Office Placed on first reading at the June 17, 2014 City Council meeting and approved by a vote of 6 -0 (Tinjero absent) Published in the Orange County Reporter on June 20, 2014. MOTION: Place ordinance on second reading and adopt. ORDINANCE NO. NS -2866 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING SECTION 14 -55 OF ARTICLE II OF CHAPTER 14 OF THE SANTA ANA MUNICIPAL CODE REGARDING A CHANGE IN OPERATING HOURS OF SAFE AND SANE FIREWORKS STANDS ON THE FOURTH OF JULY FINAL TRACT MAP NOTIFICATIONS Pursuant to Section 34 -183 of the Santa Ana Municipal Code, the City Engineer has received this Final Map and is in the process of reviewing the map for final approval. CITY COUNCIL MINUTES 13 JULY 1, 2014 1 0A -13 The City Engineer shall approve or disapprove this map within 10 days of the City Council Meeting. 17A. CERTIFICATION AND APPROVAL BY CITY ENGINEER — FINAL TRACT MAP NO. 17498 (806 EAST SANTA ANA BOULEVARD) TRACT MAP NO. 17498 - Public Works Agency MOTION: Receive and file. 17B. CERTIFICATION AND APPROVAL BY CITY ENGINEER — FINAL TRACT MAP NO. 17499 (609 NORTH GARFIELD STREET) TRACT MAP NO. 17499 - Public Works Agency MOTION: Receive and file. 17C. CERTIFICATION AND APPROVAL BY CITY ENGINEER — FINAL TRACT MAP NO. 17406 (620 EAST FIFTH STREET) - Public Works Agency MOTION: Receive and file. MISCELLANEOUS ADMINISTRATION 19A. CONFIRMATION OF CLOSED SESSION ACTION(S) — None 19B. EXCUSED ABSENCES — None BUDGETARY MATTERS APPROPRIATION ADJUSTMENTS 20A. AGREEMENT AND APPROPRIATION ADJUSTMENT WITH THE STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION FOR THE ELDERLY AND DISABLED SPECIALIZED TRANSIT GRANT - Finance & Management Services 1. Authorize the City Manager and Clerk of the Council to execute an agreement subject to non - substantive changes approved by the City Manager and City Attorney. AGMT NO. 2014 -157 - With the State of California Department of Transportation (Caltrans) in the amount of $182,000, for a term to expire on March 31, 2019. CITY COUNCIL MINUTES 14 JULY 1, 2014 1 OA -14 2. Approve appropriation adjustments. (Requires five affirmative signatures) APPROPRIATION ADJUSTMENT NO. 2015 -011- Recognizing FTA 5310 Elderly & Disabled Specialized Transit Grant revenue in the amount of $161,125 in the Recreation Grant Fund revenue account and appropriating the same amount to the expenditure account. APPROPRIATION ADJUSTMENT NO. 2012 -012 - Recognizing MSRC grant revenue in the amount of $384,000 in the Air Quality Improvement Fund revenue account and appropriating the same amount to expenditure account. 20B. APPROPRIATION ADJUSTMENT ACCEPTING THE 2014 JUSTICE ASSISTANCE GRANT FOR THE ANTI -DRUG ABUSE ENFORCEMENT TEAM - Police Department MOTION: Approve an appropriation adjustment. (Requires five affirmative votes) APPROPRIATION ADJUSTMENT NO. 2015 -014 - Recognizing the 2014 State Justice Assistance Grant (JAG) — Anti Drug Abuse (ADA) Enforcement Team Program grant in the amount of $119,750 and appropriate same into the 2014 State Justice Assistance Grant ADA account. 20C. APPROPRIATION ADJUSTMENT ACCEPTING ADDITIONAL FY2011 HOMELAND SECURITY GRANT PROGRAM FUNDS - Police Department MOTION: Approve an appropriation adjustment. (Requires five affirmative votes) APPROPRIATION ADJUSTMENT NO. 2015 - 013 - Recognizing additional FY 2011 Urban Areas Security Initiative funds in the amount of $681,000 in the FY 2011 Urban Areas Security Initiative Program Grant revenue account and appropriate same in the grant expenditure accounts SPECIFICATIONS — PURCHASE OF EQUIPMENT AND SERVICES 22A. SPEC NO. 14 -040 — HYDRO - EXCAVATION UNIT - Finance & Management Services CITY COUNCIL MINUTES 15 JULY 1, 2014 1 0A -15 22B. MOTION: Award a contract to Atlantic Machinery, Inc. in an amount of $478,650 subject to non - substantive changes approved by the City Manager and City Attorney. SPEC 14 -028 — VEHICLE TIRES - Finance & Management Services MOTION: Award contracts for vehicle tires for a one -year period in annual aggregate amount not to exceed $140,000, with provisions for two one -year renewals exercisable by the City Manager, subject to non - substantive changes approved by the City Manager and City Attorney, with the following vendors: Vendor Location Parkhouse Tire Inc. Santa Ana Daniels Tire Service Santa Fe Springs *Mayor Pro Tem Tinajero abstained on Agenda Item 22A due to a campaign contribution. MOTION: Continue consideration of matter for 30 days, at the request of staff. MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: PROJECTS /CHANGE ORDERS SECOND: Martinez Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) None (0) None (0) None (0) 23A. CONSTRUCTION CONTRACT FOR THE SANTA ANA ZOO OCELOT EXHIBIT (PROJECT NO. 132636) - Parks, Recreation & Community Services Agency and Public Works Agency MOTION: CITY COUNCIL MINUTES 16 JULY 1, 2014 1 0A -16 1. Award contract to Lehman Construction, Inc., the lowest responsible bidder, in accordance with the Base Bid lump sum prices including Add Alternates I, II, III and IV, totaling $397,419.00 for the construction of the Santa Ana Zoo Ocelot Exhibit; 2. Approve Cost Analysis of $516,630; 3. AGMT NO. 2014 -158 - Approve amendment to the agreement between the City of Santa Ana and Friends of Santa Ana Zoo to accept an additional $176,902 donation for the Santa Ana Zoo Ocelot Exhibit project for a total project contribution of $526,902; 4. Approve an appropriate adjustment. (Requires five affrirmateive votes) APPROPRIATION ADJUSTMENT NO. 2015 -010 — Recognizing a Friends of Santa Ana Zoo donation of $176,902 in the PRCSA fees and Donations revenue account and appropriating the same amount into the PRCSA fees and Donations expenditure account. AGREEMENTS 25A. AGMT NO. 2014 -159 - HISTORIC PROPERTY PRESERVATION AGREEMENT NO. 2014 -01 FOR THE PROPERTY LOCATED AT 2214 NORTH GREENLEAF STREET - Planning and Building Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Sherrie Gibson for property located at 2214 North Greenleaf Street (Jacobs House), subject to non - substantive changes approved by the City Manager and City Attorney. 25B. AGMT NO. 2014 -160 - HISTORIC PROPERTY PRESERVATION AGREEMENT NO. 2014 -02 FOR THE PROPERTY LOCATED AT 2335 NORTH OAKMONT AVENUE - Planning and Building Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Giles Benjamin Boden Candy and Kristin Meredith Candy, for the property located at 2335 North Oakmont Avenue (Anderson House), subject to non - substantive changes approved by the City Manager and City Attorney. 25C. AGMT NO. 2014 -161 - CABLING SERVICES - Finance & Management Services CITY COUNCIL MINUTES 17 JULY 1, 2014 1 0A -17 MOTION: Authorize the City Manager and Clerk of the Council to execute an amendment agreement with PCC Network Solutions, a Pacific Coast Cabling, Inc. Company, subject to non - substantive changes approved by the City Manager and City Attorney, with provisions for three one -year renewal options exercisable by the City Manager and City Attorney, in an increased amount not to exceed $100,000 per term for a total aggregate amount not to exceed $600,000. 25D. SEXUAL ASSAULT EVIDENCE COLLECTION - Police Department MOTION: Continue consideration of matter to the July 15, 2014 City Council meeting, at the request of staff. 25E. TELEPHONE SYSTEM MAINTENANCE - Finance & Management Services MOTION: 1. AGMT NO. 2014 -162 - Authorize the City Manager and the Clerk of the Council to execute an amendment to the agreement with NEC Corporation of America, Inc. to exercise an option for the first one -year extension to the existing agreement for an amount not to exceed $190,000 per year to provide maintenance services and related equipment for the City's telecommunications systems. 2. Authorize the City Manager and the Clerk of the Council to execute a future second amendment and third amendment, if and when those amendments are submitted, to extend the agreement with NEC Corporation of America, Inc. for a one -year period for an amount not to exceed $190,000 per year to provide maintenance services and related equipment for the City's telecommunications system. 25F. VOICEMAIL SYSTEM MAINTENANCE - Finance & Management Services MOTION: 1. AGMT NO. 2014 -163 - Authorize the City Manager and the Clerk of the Council to execute the an amendment to the agreement with Legacy Voicemail, Inc. to exercise an option for the first one -year extension to the existing agreement for an amount not to exceed $10,000 per year to provide maintenance services and related equipment for the City's voicemail system. CITY COUNCIL MINUTES 18 JULY 1, 2014 1 0A -18 2. Authorize the City Manager and the Clerk of the Council to execute a future second amendment and third amendment, if and when those amendments are submitted, to extend the agreement with Legacy Voicemail, Inc. for a one -year period for an amount not to exceed $10,000 per year to provide maintenance services and related equipment for the City's voicemail system. MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Orange County Contractors Services dba Orange County Mailboxes and Construction for an amount not to exceed $38,650, subject to non - substantive changes by the City Manager and City Attorney. MOTION: Martinez VOTE: AYES: NOES: ABSTAIN: ABSENT: MISCELLANEOUS - BUDGET SECOND: Sarmiento Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) None (0) None (0) None (0) 29A. INSURANCE RENEWALS - Personnel Services Agency MOTION: 1. Approve the City's continued membership in the Big Independent Cities Excess Pool from July 1, 2014 to July 1, 2015 at an estimated premium cost not to exceed $1,510,000. CITY COUNCIL MINUTES 19 JULY 1, 2014 1 0A -19 2. Approve the City's continued participation in the Public Entity Property Insurance Program from July 1, 2014 to July 1, 2015 at an estimated premium cost not to exceed $400,000. 3. Approve the City's continued participation in the California State Association of Counties — Excess Insurance Authority's Crime Bond Program from July 1, 2014 to July 1, 2015 at an estimated premium cost not to exceed $12,000. LAND USE MATTERS CONDITIONAL USE PERMIT/VARIANCES 31 A. CONDITIONAL USE PERMIT NO. 2014 -10 TO A TYPE 47 ALCOHOLIC BEVERAGE CONTROL (ABC) LICENSE AT THE MARKS AT SOUTH COAST METRO, LLC. LOCATED AT 100 EAST MACARTHUR BOULEVARD - FILED BY CYNTHIA EPPELDAUER, APPLICANT - Planning and Building Agency The Planning Commission approved recommended action on June 9, 2014, by a vote of 7 -0. MOTION: Receive and file the staff report approving Conditional Use Permit No. 2014 -10 as conditioned. * *END OF CONSENT CALENDAR ** BUSINESS CALENDAR ITEMS RESOLUTIONS 55A. RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FY 2014 -15 - Finance & Management Services MOTION: Adopt a resolution. RESOLUTION NO. 2014 -040 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FISCAL YEAR 2014 -2015 MOTION: Tinajero SECOND: Sarmiento CITY COUNCIL MINUTES 20 JULY 1, 2014 1 OA -20 VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) 55B. RESOLUTION AND AUTHORIZATION TO SUBMIT PROJECT W BUS STOP AMENITIES IMPROVEMENT GRANT FUNDING APPLICATIONS - Public Works Agency MOTION: Adopt a resolution. RESOLUTION NO. 2014 -041 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE DIRECTOR OF PUBLIC WORKS OR DESIGNEE TO SUBMIT GRANT APPLICATIONS FOR AMENITY IMPROVEMENTS AT 29 BUS STOP LOCATIONS TO THE ORANGE COUNTY TRANSPORTATION AUTHORITY FOR FUNDING UNDER PROJECT W ON BEHALF OF THE CITY OF SANTA ANA AND, IF AWARDED, AUTHORIZING THE ACCEPTANCE OF SUCH GRANT ON BEHALF OF THE CITY AND AMENDING THE BUDGET ACCORDINGLY FOR FISCAL YEAR 2014 -2015 MOTION: Benavides SECOND: Amezcua VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) 55C. BRISTOL STREET IMPROVEMENTS, RIGHT -OF -WAY ACQUISITIONS, AND ADOPTION OF AN ADDENDUM TO THE FINAL ENVIRONMENTAL IMPACT STUDY / ENVIRONMENTAL IMPACT REPORT (EIS /EIR) - Public Works Agency Continued from the February 4, 2014 City Council Meeting by a vote of 7- 0; Continued from the March 4, 2014 City Council Meeting by a vote of 6- 0 ( Sarmiento abstained); Continued from the April 1, 2014 City Council CITY COUNCIL MINUTES 21 JULY 1, 2014 1 OA -21 55D. Meeting by a vote of 6 -0 (Sarmiento abstained and not present); Continued from the May 6, 2014 City Council Meeting by a vote of 7 -0; Continued from the June 3, 2014 City Council Meeting by a vote of 5 -0 (Martinez and Sarmiento absent). Councilmember Benavides proposed undergrounding utilities. Interim Executive Director Public Works Agency Galvez noted that future allocation will be maximzed as available MOTION: 1. Authorize staff to proceed with the Bristol Street design which results in meeting Orange County Transportation Authority and City goals; 2. Authorize staff to proceed with full -take property acquisitions on Bristol Street between Washington Avenue and 17th Street based on the approved Bristol Street Final Environmental Impact Statement/Environmental Impact Report, EIS No. 89 -01; 3. Adopt a resolution. RESOLUTION NO. 2014 -042 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ADDENDUM TO THE FINAL ENVIRONMENTAL IMPACT STATEMENT / ENVIRONMENTAL IMPACT REPORT NO. 89 -01 FOR THE BRISTOL STREET IMPROVEMENTS AND WIDENING PROJECT MOTION: Tinajero VOTE: AYES: NOES: ABSTAINED AND NOT PRESENT: SECOND: Reyna Amezcua, Benavides, Reyna, Tinajero (6) None (0) Sarmiento (1) Pulido, Martinez, ABSENT: None (0) * Councilmember Sarmiento abstained on matter due to campaign contribution. AGENDA ITEM TAKEN OUT OF ORDER CITY COUNCIL MINUTES 22 JULY 1, 2014 1 OA -22 PUBLIC HEARINGS 75A. PUBLIC HEARING — RECOVERY OF UNCOLLECTED COSTS FOR ABATEMENT OF DANGEROUS AND ABANDONED BUILDINGS FISCAL YEAR 2013 -14 - Planning and Building Agency Legal notice published in the Orange County Reporter on June 20, 2014 and notices mailed June 19, 2014. Mayor Pulido opened the Public Hearing. Grant Adler spoke on the matter. There were no other speakers and the Hearing closed. MOTION: Adopt a resolution. RESOLUTION NO. 2014 -043 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA OVERRULING OBJECTIONS TO AND CONFIRMING THE COSTS OF SECURING AND DEMOLITION OF VARIOUS STRUCTURES DECLARED TO BE PUBLIC NUISANCES; MAKING, CONFIRMING AND LEVYING ASSESSMENTS FOR SUCH COSTS; AND ORDERING SUCH COSTS TO BE RECORDED WITH THE ORANGE COUNTY RECORDER MOTION: Martinez SECOND: Tinajero VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) 75B. PUBLIC HEARING — RECOVERY OF UNCOLLECTED ADMINISTRATIVE CITATION FINES FISCAL YEAR 2013 -2014 - Planning and Building Agency Legal notice published in the Orange County Reporter on June 20, 2014 and notices mailed June 19, 2014. Mayor Pulido opened the Public Hearing. Parka Roshanzamir spoke during public comments on the matter. There were no other speakers and the Mayor closed the Hearing. MOTION: Adopt a resolution. CITY COUNCIL MINUTES 23 JULY 1, 2014 1 OA -23 75C. RESOLUTION NO. 2014 -044 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA OVERRULING OBJECTIONS TO AND CONFIRMING UNCOLLECTED ADMINISTRATIVE CITATION FINES: MAKING, CONFIRMING AND LEVYING ASSESSMENTS FOR SUCH FINES; AND ORDERING A COPY THEREOF TO BE FILED WITH THE ORANGE COUNTY AUDITOR, ASSESSOR AND TAX COLLECTOR MOTION: Tinajero SECOND: Sarmiento VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) PUBLIC HEARING — WEED ABATEMENT PUBLIC NUISANCE REPORT FISCAL YEAR 2013 -2014 - Public Works Agency Legal notice published in the Orange County Reporter on June 20, 2014 and notices mailed June 19, 2014. Mayor Pulido opened the Public Hearing. There were no speakers and the Hearing closed. MOTION: Adopt a resolution RESOLUTION NO. 2014 -045 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CONFIRMING THE COSTS OF WEED, RUBBISH AND GARBAGE ABATEMENT; MAKING, CONFIRMING AND LEVYING ASSESSMENTS FOR SUCH COSTS; AND ORDERING A COPY THEREOF TO BE FILED WITH THE COUNTY AUDITOR, ASSESSOR AND TAX COLLECTOR MOTION: Amezcua SECOND: Tinajero VOTE: AYES: Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) CITY COUNCIL MINUTES 24 JULY 1, 2014 1 OA -24 ABSENT: None (0) 75D -1 PUBLIC HEARING — REAFFIRM AND REVISE THE FISCAL YEAR 2014- 15 CITY BUDGET - Finance & Management Services Legal Notice published in the Orange County Register on June 6, 2014 and June 13, 2014. Continued from the June 17, 2014 City Council Meeting by a vote 6 -0 (Tinajero absent). Mayor Pulido opened the Public Hearing. Tom Gordon questioned need for additional executive in the City Manager's office; requested clarification of role and duties of position being proposed. There were no other speakers and the Hearing closed. City Manager clarified that new position is an under -fill position to the Deputy City Manager position. Council discussion ensued. Councilmember Martinez concerned that Capital Improvement process did not comply with the Sunshine Ordinance; budget review with the public did not include component; no process in place to select projects; moving forward need to have comprehensive planning process (like San Diego Plan); request study session to discuss reserves and provide policy direction on capital facilities financing projects. Concerned with addition of new position; need succession plan; need to have Deputy City Manager position filled — no correlation of two positions. Also, request Community Preservation Manager maintain Mid - Manager designation (amend resolution). City Manager Cavazos noted that City projected $11 million in reserves and includes savings for under - filling position. Councilmember Benavides, concur with comments by Martinez. Community Preservation Manager to remain the same; requested succession plan and filling of Deputy City Manager position. City Manager Cavazos indicated that goal is committed to doing recruitment for Deputy City Manager in 6 months. Councilmember Reyna, asked if street closure fees had different categories. Staff noted that fees based on resident, profit and non - profit status. CITY COUNCIL MINUTES 25 JULY 1, 2014 1 OA -25 MOTION: Amend recommendation to maintain the Mid - Manager designation for Community Preservation Manager, and: 1. Approve budget ordinance and authorize publication of title. ORDINANCE NO. NS -2867 - 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, 2014 2. Adopt a Seven -Year Capital Improvement Program (CIP) from fiscal year 2014 -15 through fiscal Year 2020 -21 per Orange County Transportation Authority (OCTA) Measure M2 eligibility requirement. 2. FISCAL YEAR 2014 -15 UNIFORM SCHEDULE OF MISCELLANEOUS FEES - Finance & Management Services MOTION: Adopt a resolution. RESOLUTION NO. 2014 -046 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING A UNIFORM SCHEDULE OF MISCELLANEOUS FEES FOR FISCAL YEAR 2014- 2015 AND REPEALING IN PART RESOLUTION NO. 2013 -031 3. PROPOSED AMENDMENTS TO EXECUTIVE MANAGEMENT CLASSIFICATIONS TO ADD, DELETE AND MODIFY SELECTED JOB TITLES — Personnel Services Agency MOTION: 1. Place ordinance on first reading and authorize publication of title. ORDINANCE NO. NS -2869 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING SECTIONS 2- 300 AND 2 -300.5 OF THE SANTA ANA MUNICIPAL CODE ESTABLISHING THE TITLE OF SPECIAL ASSISTANT TO THE CITY MANAGER AND MAKING OTHER TECHNICAL MODIFICATIONS TO THE TITLES OF OFFICERS AND DEPARTMENT HEADS OFTHE CITY *Council vote was 6 -1 (Martinez dissented). Councilmember Martinez noted for the record that she opposed to creation of Special Assistant to the City Manager position. CITY COUNCIL MINUTES 26 JULY 1, 2014 1 OA -26 2. Adopt amended resolution to change AM designation to MM for Community Preservation Manager. RESOLUTION NO. 2014 -047 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA TO AMEND RESOLUTION NOS. 82 -110, 91 -066 AND 96 -095 TO EFFECT CERTAIN CHANGES TO THE CITY'S BASIC CLASSIFICATION AND COMPENSATION PLANS AND TO AMEND THE CITY'S BUDGET FOR FISCAL YEAR 2014 -2015 MOTION: Tinajero SECOND: Sarmiento VOTE: AYES: Amezcua, Benavides, Pulido, Martinez *, Reyna, Sarmiento, Tinajero (7) NOES: None (0) ABSTAIN: None (0) ABSENT: None (0) *Councilmember Martinez noted for the record that she opposed to creation of Special Assistant to the City Manager position. JOINT SESSION OF THE CITY COUNCIL AND THE HOUSING AUTHORITY 80A. FUNDING ALLOCATIONS FOR THE HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS PROGRAM FISCAL YEAR 2014 -15 — Community Development Agency At its special meeting on June 4, 2014, by a vote of 6 -0 the Community Redevelopment and Housing Commission recommended that the City Council and Housing Authority approve the recommended actions. Continued from the June 17, 2014 City Council Meeting by a vote 6 -0 ( Tinajero absent) MOTION: 1. Authorize the City Manager and the Clerk of the Council to execute a Memorandum of Understanding, subject to non - substantive changes approved by the City Manager and City Attorney. AGMT NO. 2014 -165 - Between the City of Anaheim and the City of Santa Ana in an amount of not to exceed $1,531,466 for a one -year CITY COUNCIL MINUTES 27 JULY 1, 2014 1 OA -27 term to administer the Housing Opportunities for Persons with AIDS Program 2. Authorize the City Manager and the Clerk of the Council to execute a cooperative agreement, subject to non - substantive changes approved by the City Manager and City Attorney. AGMT NO. 2014 -166 - With the County of Orange Health Care Agency in an amount of $890,372 for a one -year term to provide supportive housing services to HIV /AIDS - affected individuals in the County of Orange MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Benavides Amezcua, Benavides, Pulido, Martinez, Reyna, Sarmiento, Tinajero (7) None (0) None (0) None (0) 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. 85A. RECAP OF CITY OF SANTA ANA'S CONTRACT WITH ORANGE COUNTY FIRE AUTHORITY (OCFA) FOR FIRE SERVICES — Councilmember Reyna Councilmember Reyna requested summary of contract obligations with the Orange County Fire Authority. City Manager Cavazos noted that City in 20 year contract; any adjustments would require notice to OCFA in 2018. City has sold all apparatus and estimated pension costs in the tens of millions of dollars. CITY COUNCIL RECESSED TO THE HOUSING AUTHORITY MEETING AT 10:58 P.M. AND RECONVENED AT 10:59 P.M. WITH SAME MEMBERS PRESENT. COMMENTS CITY COUNCIL MINUTES 28 JULY 1, 2014 1 OA -28 90A. CITY MANAGER'S COMMENTS • Introduced new Downtown Development Manager, Leigh Harvey; and • Noted that 45 -day public review period on the Street Car project underway. 90B. CITY COUNCILMEMBER COMMENTS Councilmember Martinez: • Noted that City has held three outreach meetings on Street Car Project; look forward to City Council consideration; • Request Strategic Plan strategies be included in the Agenda; aligned with goals; need to coordinate and implement for the next City Council Meeting • Asked that Police staff provide badge number and name when requested by members of the public; important to build communication and relations; • City to address gang injunction and urge all to respect; and • Committed to providing resources needed throughout the community. Councilmember Sarmiento: • Thanked all for addressing City Council at tonight's meeting and colleagues for making tough decisions; • Commented on City's past financial struggles and ability to hire employees lost through attrition; • Proposed fee reduction for Mills Act processing fees; matter discussed at the Development Council Committee; • Wished all a Happy 4th of July and • Reported that he attended NALEO Conference in San Diego. Councilmember Amezcua: • Congratulated City Manager for recovering OCFA escrow funds; • Thanked staff for drafting City initiative on medical marijuana - competing measures for voters to decide • Invited all to attend 4th of July celebration at Centennial Park. Councilmember Reyna: • Urged all to conserve water; • Attended NALEO conference, great workshops; meet other elected officials throughout the country; • Wished all a happy and safe 4th of July and invited all to attend the City's Fireworks event; • Request that allocation of Community Development Block Grant fund to available to the community; direct staff to agendize for City Council or Council Committee discussion; and CITY COUNCIL MINUTES 29 JULY 1, 2014 1 OA -29 • Shop in Santa Ana! Councilmember Benavides: • Attended the NALEO conference; great workshops on economic development; • Invited all to attend the City's Farmer's Market on Thursdays in Downtown on 3'd and Bush; and Summer Jazz Nights in Artist Village; • Encouraged all to attend the 4th of July event hosted by the City at Centennial Park; • Spoke on Gang Injunction encouraged Police Chief to meet with community members and address misconception and general concepts; include on Public Safety Council Committee agenda. • Need for Enforcement Plan to be discussed on Medical Marijuana establishments; and • Request all shop in Santa Ana. Mayor Pulido: • Attended U.S. Conference of Mayors in Dallas; and • Adjourned in Memory of Zoraida Reyes. ADJOURNED - 11:22 P.M. The next meeting of the City Council is scheduled for Tuesday, July 15, 2014 at 5:00 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. Adjourn in Memory of Zoraida Reyes Maria D. Huizar, Clerk of the Council FUTURE AGENDA ITEMS • Santa Ana Street Car Project Locally Preferred Alignment • Harbor Blvd. Mixed -Use Plan • Solar Permit Fee Waiver • Proactive Rental Enforcement Program Renewal CITY COUNCIL MINUTES 30 JULY 1, 2014 1 OA -30 • MIMI CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: ORDINANCE SECOND READING: AMENDMENTS TO EXECUTIVE MANAGEMENT CLASSIFCIATIONS TO ADD, DELETE AND MODIFY SELECTED JOB TITLES CITY MANAGER RECOMMENDED ACTION Place ordinance on second reading and adopt. DISCUSSION 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 On July 2, 2014, the City Council introduced first reading and authorized publication of title for the following Ordinance by a vote of 6 -1 (Martinez dissented): ORDINANCE NS -2869 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING SECTIONS 2 -300 AND 2 -300.5 OF THE SANTA ANA MUNICIPAL CODE ESTABLISHING THE TITLE OF SPECIAL ASSISTANT TO THE CITY MANAGER AND MAKING OTHER TECHNICAL MODIFICATIONS TO THE TITLES OF OFFICERS AND DEPARTMENT HEADS OF THE CITY 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. Maria D. Huizar, Clerk of the Council ATTACHMENT; Ordinance No. NS -2869 11 A -1 11 A -2 ORDINANCE NO. NS -2869 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING SECTIONS 2 -300 AND 2 -300.5 OF THE SANTA ANA MUNICIPAL CODE ESTABLISHING THE TITLE OF SPECIAL ASSISTANT TO THE CITY MANAGER AND MAKING OTHER TECHNICAL MODIFICATIONS TO THE TITLES OF OFFICERS AND DEPARTMENT HEADS OF THE CITY. 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 Council is desirous of adding the title of Special Assistant to the City Manager; and, Section 2. Section 2 -300 is amended by deleting reference to the Library Director and Fire Chief, so that it shall read as follows: Sec. 2 -300. City officers and department heads. The following are officers of the City of Santa Ana: (1) Members of the city council; (2) City manager; (3) City attorney; (4) Clerk of the council; (5) Assistant city manager; (6) Deputy city manager for development services; (7) Special assistant to the city manager; (8) Police chief; (9) Executive director of finance and management services; (10) Executive director of public works; (11) Executive director of parks, recreation and community services; (12) Executive director of personnel services; (13) Executive director of community development; (14) Executive director of planning and building safety. If 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 this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this subsection, sentence, clause, phrase or portion thereof one or more sections, subsections, sentences, clauses, invalid or unconstitutional. 11 A -3 ordinance and each section, irrespective of the fact that any phrases, or portions be declared Ordinance No. NS -2647 Page 1 of 2 ADOPTED this day of APPROVED AS TO FORM: m Sonia R. Carvalho City Attorney AYES: Councilmembers: NOES: Councilmembers: ABESENT: Councilmembers: ABATAIN: Councilmembers: , 2014. Miguel A. Pulido Mayor Amezcua, Benavides, Pulido, Reyna, Sarmiento, Tinaiero (6) Martinez (1) CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. NS -2647 to, be the original ordinance adopted by the City Council of the City of Santa Ana on 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 11 A -4 Ordinance No. NS -2647 Page 2 of 2 CITY COUNCIL COMMITTEE ON DEVELOPMENT AND TRANSPORTATION Meeting Minutes March 6, 2014 CALL TO ORDER The meeting was called to order at 5:05 p.m. in Room 1600 of the City Hall Ross Annex. ATTENDANCE The following Committee Members were present: Vincent Sarmiento, Michele Martinez, David Benavides Staff present were: David Cavazos, City Manager; Karen Haluza, Interim Executive Director /Planning & Building Agency; William Galvez, Interim Exec. Director /Public Works Agency; Jason Gabriel, Principal Civil Engineer and Rosa Barela, PBA Executive Secretary. Consultants present were: Hal Suetsugu and Juliet Arroyo, Evan Brooks Associates PUBLIC COMMENTS Peter Katz noted support for the street car project adding it will bring up property values along the routes adding if done right with the right type of cars people will use them. AGENDA ITEMS 1. APPROVAL OF MINUTES: A. December 5, 2013 Special Meeting B. December 12, 2013 Special Meeting C. January 9, 2014 Regular Meeting Motion by Committee member Benavides and seconded by Vice Chair Martinez to approve the minutes and approved unanimously by a vote of 3:0. 2. STREETCAR PROJECT SCHEDULE UPDATE Mr. Galvez provided an update on the street car and on the environmental impact report (EIR), introduced representatives from Orange County Transit Authority (OCTA) Jennifer Beringer and Kelly Hart who will provide an update and discuss upcoming meetings with the Transit Committee and the OCTA Board; and noted the meeting between the David Cavazos and OCTA Chief Executive Officer Darrell Johnson. Hal Suetsugu provided a project update handout and introduced Juliet Arroyo who provided an update on the EIR noting they have been working with OCTA the past two to three months to address all concerns between the City of Santa Ana, OCTA, Federal Transit Administration (FTA) and State Historic Preservation Office (SHPO) 13A -1 and are close to getting a final sign off from the FTA and hope to release document in April, and will have a project update meeting with the Stakeholder Working Group. Mr. Suetsugu noted the City of Garden Grove approved a Partnership and Support Resolution to partner with the City of Santa Ana in moving forward with the Streetcar Project. Chairman Sarmiento suggested the City should also have a resolution of support. Mr. Cavazos noted he will follow -up. Mr. Cavazos noted he spoke with Garden Grove City Manager Matt Fertal and both will attend the Transit Committee meeting on March 13 and the OCTA Board meeting on March 24. Mr. Suetsugu noted once the FTA authorizes public release of the environmental document, they will mobilize and begin the 45 -day public review and comment period, evaluate and respond to comments and hope to bring to the Council a month or two after the close of the comment period. Mr. Galvez noted there will be a Stakeholders Working Group meeting to keep the public apprised of the project and the environmental process, and will update the website. Mr. Suetsugu noted they will provide a list at the next meeting of the elected officials and OCTA Board members that will indicate if they support, are undecided or do not support the project. Chairman Sarmiento inquired when the EIR document was submitted to the FTA and when they expect the review to be complete. Kelly Hart, OCTA Fixed Guideway Project Manager, clarified the process adding she is the primary contact with the FTA and handles the coordination with FTA on behalf of Santa Ana, Garden Grove and Anaheim, noted they are waiting to hear back from the State Historic Preservation Office and will then submit the final document to FTA for the final review. Chairman Sarmiento thanked OCTA for their attendance and noted the committee, City Council and staff are very supportive and receptive and available to help wherever they can. Jennifer Beringer, OCTA Director of Rail & Facilities, noted the Committee is important and key to vet through some of the tougher issues before they go to the OCTA Board or City Council, noted Mr. Cavazos and staff are slated to provide an overview of the project to the OCTA Transit Committee on March 13 and the OCTA Board on March 2, and noted OCTA staff will then work on the next round of policy decisions that the OCTA Board will need to make. Mr. Cavazos noted the importance of the policy and a buy -in from the city long term and suggested the city make a commitment to share in operational costs which will demonstrate to the Board that the city is in and would recommend a 10% participation, and noted he and Darrel Johnson are in agreement to jointly recommend getting the design done which is critical. Development & Transp. Council Committee Minutes 13A-2 March 6, 2014 Ms. Hart noted the importance of putting out a very clear and concise environmental document that is easy for the public to read and understand and ensure the outreach plan is very thorough and are reaching out to all the key stakeholders which will bode well for the project and for the FTA as well. Vice Chair Martinez noted the messaging perspective as we move forward to the OCTA Board will be very sensitive and needs to be very strategic. Mr. Cavazos noted Santa Ana is the fourth highest density city in the country without any kind of rail mass transit, noted possibility of creating Friends of Transit funded by groups who have vested interest which has been successful in the past. Chairman Sarmiento noted the benefit vehicles adding it will improve the quality M2 to have a fixed guideway system. COMMITTEE MEMBER COMMENTS - None o the county by reducing the number of of life and the requirement of the Measure Karen Haluza announced the next meeting will be held on May 8, 2014. ADJOURNMENT — 6:04 P.M. i —,GAA V-- Karen Haluza Interim Executive Director Planning & Building Agency RB rblCouncll camm \COval & Transp CM03,06d4 Cowl & Transp cc Mlnules Development & Transp. Council Committee Minutes 13A-3 March 6, 2014 13A -4 CITY COUNCIL COMMITTEE ON DEVELOPMENT AND TRANSPORTATION Special Meeting Minutes April 28, 2014 CALL TO ORDER The meeting was called to order at 5:10 p.m. in Room 1600 of the City Hall Ross Annex. ATTENDANCE The following Committee Members were Present: Vincent Sarmiento, Michele Martinez, David Benavides Staff Present: David Cavazos, City Manager; William Galvez, Interim Executive Director /Public Works Agency; Ryan Hodge, Assistant City Attorney; Karen Haluza, Interim Executive Director /Planning and Building Agency; Jason Gabriel, Principal Civil Engineer; and Lorrie Ortiz, PWA Executive Secretary. Consultants Present: George Pla, President -CEO Cordoba Corporation; Cathy Higley, Vice President of Transportation, Cordoba Corporation Orange County Transportation Authority Representatives Present: Jim Beil, P.E. Executive Director /Capital Programs, OCTA; Kelly Hart, Project Manager, OCTA PUBLIC COMMENTS Craig Durfey spoke in favor of expanding the Orange County Bicycle Club Committee; and the need to include more non - profit organizations to increase awareness and publicize events such as the upcoming Ciclavia event in October 2014. Suggested ordinances for more bicyclist visibility and securing more noticeable vests for activities. He hopes that the efforts of his organization have helped educate the public about pedestrian /bicycle safety. Carl Benninger, resident, spoke in support of the streetcar project, and the need to move ahead on this key project. He noted the project's importance to the development of the City, stating that other cities such as Portland have successful streetcar projects. Mark Lopez, resident, expressed concern about the streetcar alignment on 4t" Street because the street is already crowded and has existing parking issues, so designing a train and vehicles on that street is impractical. He inquired about the proposed alignments and was provided with the project website for more detailed information concerning the project. 13A -5 Paul Guzman, resident, noted that he is in favor of the streetcar project. He advised that he used to ride the Red Car to Los Angeles in the 1940s, but is now concerned about construction costs; traffic congestion; realignment of streets; whether the business community is in favor of the project. He emphasized that all stakeholders must be in agreement, must look at the total picture, including demographics, in order to have answers for those that may question the project. George Pla of Cordoba Corporation said that this is a historical occasion for the city, is very excited about the project, and appreciates staff support through the years, as this was a great team effort. AGENDA ITEMS 1. STREETCAR PROJECT — OUTREACH SCHEDULE FOR PUBLIC HEARINGS; SCHEDULE FOR ADOPTION OF THE LOCALLY PREFERRED ALTERNATIVE; AND SCHEDULE FOR CERTIFICATION OF ENVIRONMENTAL DOCUMENT City Manager David Cavazos expressed his appreciation to the Council Committee and meeting attendees. He provided a copy of the final draft of the EIR and AA to the Committee members. He advised that in order to provide legal sufficiency and a recommendation approval memo, the staff and legal counsel are completing a final review of the documents. He noted that of the 15 cities in the country with the highest population densities, only Santa Ana and Anaheim do not have a streetcar or light rail system. A brief background of the project was provided by Mr. Cavazos. The project started in 2006 with the OCTA Go Local program in a partnership of local cities to expand the reach of Metrolink, and the streetcar would be the first project linking Metrolink. The feasibility study was completed in 2007. The alternatives analysis was comprehensive and encountered some issues related to bridges and the downtown area. Santa Ana contributed $2.1 million to the project. Mr. Cavazos explained that the role of Santa Ana in the MOU is to provide an accurate environmental report, and ensure the project is ready to be transferred to OCTA. A locally preferred alternative will be selected by the City Council. Santa Ana has been working closely with OCTA and public participation is being sought. There will be strict adherence to the MOU. The schedule for the environmental review was presented, and it is hoped that the operations commitment, role of OCTA and outreach plan will be fully approved by the City Council so that communications on behalf of the City are clear. The City's financial commitment was noted, as were the next steps to be taken in the process. Once Santa Ana fulfills its role, OCTA is responsible for financial planning, design, construction and operation of the project. Because this is a critical time for the project, the central point of contact will be the City Manager. Prior to release of the final document, a memo from key City project staff and consultants will be signed; OCTA will review the document; and will forward to the state and then FTA will review. FTA will respond to OCTA, and the 45 -day review period of Development & Transp. Council Committee Minutes I JA—V April 28, 2014 the draft EIR will begin. Three public meetings for public comment will be held during the public comment period at three locations in the City to ensure good outreach. The OCTA funding and implementation plan was presented; and it was noted that special meetings will be held at OCTA on May 5 and May 12 to review the plan, which the City will monitor. The City's commitment includes matching operating costs which may vary, but the maximum is $500,000 or $600,000 per year. Jim Beil, OCTA, is requesting direction from the OCTA Board to develop a comprehensive implementation plan which will be formulated into a larger project management plan for FTA approval; and a financial plan which the OCTA Board directed them to prepare for a sustainable and viable management plan. In the next quarter, staff will prepare a financial plan and projections for the streetcar project; the environmental report will also be also integrated into that process; is a good example of partnership with the City; expressed enthusiasm for the project which is a good example of Measure M2 and the formulation of Measure M2 /Project S, which came about from the former Centerline Project. He clarified that this item will be going before the Executive Committee of the OCTA on May 5, 2014. COMMITTEE MEMBER COMMENTS Chairman Sarmiento Chairman Sarmiento expressed appreciation to the project team members and the consultants. Recalled that one of the first decisions of the current council members, upon taking office in 2006 -07, was to select the consultant for the project, Cordoba Corporation; and noted the consistency of the contractor throughout the changes within the city administration. Stated that the decisions of the City and OCTA concerning this project will impact the future and relevancy of the City, like the BART system in the San Francisco /Bay area, due to the system being intra- county; and which will empower and improve the economic conditions of the community, which should interest the Federal Transit Authority. Expressed concern with the project timing which is November 2014, when new directors may be taking office; and the new directors will need to be brought up to speed to expedite decision making; and the City should try to get to the significant decision making when the current OCTA directors are still in office in order to be as efficient as possible and expedite the project. Emphasized the need for the outreach to the public, which is vital and critical to the success of the project. Agrees that the City Manager is now the point person speaking on behalf of the City Council. Requested that further comments or questions be directed to the City Manager. Vice Chair Martinez Vice Chair Martinez inquired how this streetcar project aligns with the adoption of the circulation element because the two projects tie in together; and the main reason for updating the circulation element is for the streetcar project. Expressed concern that members of the public do not appear informed about the alignment or connectivity of the streetcar at this late stage of the project. She expressed that it is imperative that the public obtain all information necessary and that they obtain answers to questions they many have about the streetcar project through outreach efforts to ensure that the public embraces the project. Karen Haluza responded that the circulation element should be released in the next few months. Development & Transp. Council Committee Minutes I SA— f April 28, 2014 Vice Chair Martinez thanked the City Manager for the comprehensive presentation; noted the participation of Cordoba Corporation and staff through the years during transition periods. Agrees that this is a very historic time for the City. Emphasized that the need for transparency by the City regarding this project is in the interest of the public that will be served, which includes more than residents; and which is a regional project affecting so many, particularly the millennial generation that most utilize and want public transportation. Appreciates the current communication efforts of the project team members to the City Council; and emphasized that the Circulation Element must be aligned with the streetcar project for the benefit of current and future generations of the community. Noted that she is looking forward to participating in the progression of the project, including the groundbreaking. The Vice Chair additionally advised that she led a tour through key bicycling areas of Long Beach, and recommended a bicycling tour of the City of Long Beach and their bicycle facilities; would like to plan a meeting at a Long Beach facility before the Circulation Element is finalized and before the project progresses further. Long Beach is a best practice city that has true bicycling and safe routes to school; and suggested that Santa Ana's goal should be becoming the Safest Bike Friendly City in America and Orange County. Committee Member Benavides Member Benavides agreed with other comments that this is a historic time for the City, and the City is prime and ready for this milestone which will impact economic development and livability among other benefits. Emphasized that the streetcar is part of a broader regional effort which makes sense to start in the City. Noted that the City has undergone much transition, and recognized the prior similar project experience of the City Manager; and the historical background of the local Cordoba Corporation regarding this project. Expressed appreciation to OCTA for their vital presence at this meeting and continuing cooperation, and requested project updates from OCTA. FUTURE AGENDA ITEMS • Harbor Specific Plan • Sundays on Main Street • 3rd and Broadway RFP /RFQ • Elks Property • South Main ADJOURNMENT — 6:05 P.M. Edwin "William" Galvez, . Interim Executive Director Public Works Agency Development & Transp. Council Committee Minutes April 28, 2014 CITY OF SANTA ANA CITY COUNCIL COMMITTEE ON PUBLIC SAFETY AND NEIGHBORHOOD IMPROVEMENT MINUTES January 28, 2014 CALL TO ORDER: Santa Ana Police Department 60 Civic Center Drive, Police Community Room Santa Ana, California 5:40 PM ATTENDANCE: Council Committee members: David Benavides Michele Martinez STAFF PRESENT: David Cavazos, CMO Carlos Rojas, PD Scott Brown, OCFA Laura Rossini, CAO Paul Satras, OCFA Ruben lbarra, PD Ken Gominsky, PD Karen Haluza, Planning & Building Alvaro Nunez, Code Enforcement PUBLIC SIGN -INS: Glen Stroud PUBLIC COMMENTS Glen Stroud, Santa Ana resident, concerned about the issue of jaywalking in Santa Ana. He talks about his personal experience of being involved in a traffic collision in January, 2014, with two other vehicles at Fairview and McFadden. In reviewing the police report, it was possibly caused by a jaywalker. Two vehicles were totaled. Mr. Stroud wants to know what the Police Department is doing to address this issue. AGENDAITEMS 1. Approval of Minutes of 11 -26 -13 Meeting 13B -1 Motion: Approve the Minutes of 11 -26 -13 meeting. MOTION: Martinez SECOND: Benavides VOTE: AYES: Benavides, Martinez NOES: None (0) ABSENT: Reyna (1) Motion carries. 2. Santiago Creek Hazard Reduction (Reduce Hazardous Fuels Along The Santiago Creek Area) Captain Paul Satras, OCFA, gives an update on the hazard reduction clean -up between the I -5 freeway and Jack Fisher Park. In order to reduce any fire hazard, the OCFA is clearing out the brush in this area to protect the residences along the creek. OCFA received final approval from Fish & Game to go ahead with the program. The OCFA is involved in risk reduction programs, and a community committee has been formed comprised of OCFA, the Police Department, Public Works Agency, Code Enforcement and Neighborhood Associations to be involved. There have been 3 -4 brushfires in the drainage along the Santiago Creek due to the dry temperatures, winds, and overgrowth of vegetation and grass. It will take one week's worth of work to clear it out and then maintenance once a year. 3. Smoke Detector Project (Fire Safety to Prevent Home Fires) Captain Paul Satras, OCFA, explains how members of the OCFA have partnered with neighborhood associations and the Red Cross for door -to -door outreach programs to install 150- 200 smoke alarms, free of charge, in residences that do not have a functioning smoke alarm to prevent fires. Eventually the OCFA hopes to encompass 350 -400 residences. 4. Pedestrian Safety (Statistical Information Regarding Traffic Collisions /Fatalities During 2013) Commander Ibarra, SAPD, has a Power Point presentation entitled Pedestrian Safety Update. The statistics cover total traffic collisions from 2008 -2013, pedestrian collisions from 2008- 2013, and a breakdown of the total number of fatalities: pedestrian fatalities, pedestrians at fault, and bicycle fatalities from 2008 -2013. Education has become a key element and is offered through programs such as Officer Reggie and pamphlets distributed in both English and Spanish. The Police Department puts on a traffic safety fair, conducts a media campaign, and is looking to do a train - the - trainer program at the high schools. The Police Department has submitted an OTS Grant to refurbish a van for traffic safety involving DUI, distracted driving, and pedestrian 13B -2 safety. The Police Department is presently looking into putting up one - minute clips on social media or a loop to play in the PD lobby and over at City Hall. 5. Receivership (Discussion of the Use of Receivership as a Tool For Extreme Code Enforcement Cases) Alvaro Nunez, Community Preservation Coordinator, distributes a handout regarding Receiverships. A receivership is a legal process whereby the City goes to court to take away the property of a 3`d party. Properties who are candidates for Receiverships are those with a history of non - compliance by the owners and pose an immediate threat to the public or occupants of the structure, hoarder properties, fire damaged properties, vacant and /or abandoned properties, Police Department /Fire referrals, and slumlord/absentee landlord -owned properties. The City is working closely with the City Attorney's Office and Receiverships will only be used as a last resort. 6. Hot Spot Update (Statistical Crime Summary and Progress of Bishop Manor and Evergreen Areas) Commander lbarm, SAPD, has a Power Point presentation entitled Bishop Manor and Cedar /Evergreen Update. An update for both areas is given regarding calls for service and Part I crimes comparing years 2009 through 2013. Commander Ibarra also discusses a two -fold strategy: enforcement and partnerships. There were two major enforcement operations done in the past two years, one at Bishop Manor and Smokin Aces at Cedar /Evergreen. The Police Department has partnered with Kidworks at Bishop Manor and Lives Worth Saving for Cedar /Evergreen. SAPD also works collaboratively with other City Departments regarding trash pick -up and graffiti removal. COMMITTEE MEMBER COMMENTS Committee Chairman Benavides inquired as to whether the Police Department has a partnership with SAUSD on the pedestrian safety issue. Chairman Benavides asked about the model that will be used for the Townsend /Raitt area and requested that an invitation be extended to members of the partnerships we are working with, Kidswork and Lives Worth Saving, to attend the next Public Safety and Neighborhood Association Meeting. Chairman Benavides commended Chief Rojas on restructuring the Police Department. Chairman Benavides agreed with Committee Member Martinez that the issue of the vending trucks needs to be revisited. Committee Member Martinez brought up that there is currently a State Grant regarding the Pedestrian Safety issue for safe routes to schools. For the next meeting, she would like to talk about the shopping cart issue. Committee Member Martinez also inquired as to the current status 13B -3 of, options available, and the steps needed to deal with the federal injunction against vending trucks. ADJOURNMENT — 7:11 P.M. ti CARLOSROJ Acting Chief of Police 13B -4 CITY OF SANTA ANA CITY COUNCIL COMMITTEE ON PUBLIC SAFETY AND NEIGHBORHOOD IMPROVEMENT MINUTES March 31, 2014 CALL TO ORDER: Santa Ana Police Department 60 Civic Center Drive, Police Community Room Santa Ana, California 5:30 PM ATTENDANCE: Council Committee members: David Benavides Michele Martinez Roman Reyna STAFF PRESENT: David Cavazos, CMO Carlos Rojas, PD Anthony Espinosa, OCFA Laura Rossini, CAO Ruben lbarra, PD Karen Haluza, Planning & Building Eileen F. Greene, Recording Secretary PUBLIC SIGN -INS: Apolonio Cortes Paul Guzman Ismael Becemil Samuel Romero Sarai Arpero Joanne Luevano PUBLIC COMMENTS Apolonia Cortez, here on behalf of SACRED as a follow -up to the Strategic Plan that has been approved by the City. Thanks the City Council for all the effort they have made. Paul Guzman, resident of Santa Ana, is concerned about unemployment. Mr. Guzman feels there is discrimination against the youth in Santa Ana; he says 40% are unemployed, highest 13B -5 rating in the County, next to Anaheim. Correlation between unemployment and the youth - civil services, school disturbances, all the way down the line, one affects the other. Ismael Becemil — resident living at 450 E. 4 1 Street, Spectrum Condos for the past 20 years. He belongs to the safety group, the Wellness Corridor. He is concerned about problems at Lacy /3`a Street /French Street after midnight, especially Thurs- Sundays. Young people on the streets intoxicated with drugs and alcohol. SAPD needs to control this situation. He asks that the City control sales of alcohol. Samuel Romero — security guards need to report problems to the police inunediately. Mr. Romero says he brought this problem to the City Council a year and a half ago, but the problem continues. Mr. Romero would like all security guards looked at, not just those working inside the bars and restaurants, in order to keep things under control. Sarai Arpero — she is part of SABHC and LHA working four years on safety issues and has had different meetings with the City on how to improve relationship with police. She asked community members what things they felt were important, and police conduct stood out. After looking at solutions, Ms. Arpero says believes in the Restorative Justice program. Joanne Luevano, high school senior talks about immigration. She believes the Police Department is working with ICE — taking funding away from libraries and things that can help youth. She tells how her father was deported and how hard that has been for her. She wants her message to get through that Santa Ana does not need the ICE contract to make money. AGENDAITEMS 1. Approval of Minutes of 1 -28 -14 Meeting Motion: Approve the Minutes of 1 -28 -14 meeting. MOTION: Martinez SECOND: Benavides VOTE: AYES: Benavides, Martinez ABSTAIN: Reyna NOES: None (0) Motion carries. 2. OCFA Standards of Coverage (Presentation explaining mechanisms to improve fire service response strategies) 13B -6 Acting Division Chief Anthony Espinosa, OCFA, has a power point presentation and begins with the CERT (Community Emergency Response Team) Program and how it teaches members of the community to take care of themselves. Chief Espinosa talks about standards of coverage and explains OCFA response times once a 911 call has been placed whether it is for a fire, medical aid or other emergency. He explains that OCFA is committed to meeting the basic national standard of response time. Chief Espinosa explains that the OCFA has ten stations spread out in Santa Ana which encompasses 21 square miles. He addresses the question about removing any of these stations. He explains that OCFA is a regional response team; however, they will not be removing any fire stations that are in Santa Ana at this time. 3. Restorative Justice (Introduce and Define Restorative Justice and how it will affect the youth of Santa Ana) Rafael Solorzano, Santa Ana Boys and Men of Color working group member, has a power point presentation regarding the subject of Restorative Justice. He explains that there is a State -wide initiative being moved by the California Endowment which is also part of the alignment of Boys and Men of Color. Recently the President announced this idea of restorative justice at a national level. It is at the forefront of what government leaders want to do for young people of color in reference to better outcomes, including graduation in the school system and less contact with the criminal justice system. Mr. Solorzano begins his power point presentation by introducing current local, state and national work of the Santa Ana Boys and Men of Color. Mr. Solorzano goes on to introduce Restorative Justice by defining it and giving a brief background. He explains what methods are used with Restorative Community Conferencing (RCC) and how it would work in the city of Santa Ana. Mr. Solorzano concludes the discussion by making a recommendation to create a task force that researches and develops a restorative justice pilot program that would work for the city of Santa Ana. 4. Medical Marijuana Dispensaries (Discussion of Ballot Initiatives and Options) Karen Haluza, Acting Executive Director, Planning & Building, has a Power Point presentation entitled Medical Marijuana Dispensaries Discussion. The presentation provides background information on the medical marijuana dispensary issue as it relates to a ballot initiative that qualifies to go on the ballot this November. Topics covered in the presentation are a brief history of Medical Marijuana Legislation, current City regulation and enforcement efforts, pending State legislation (SB 1262), local initiative process, summary of qualified ballot initiative, and the next steps planned to deal with the influx of these dispensaries. At this time, the City's position is that medical marijuana dispensaries operating as a storefront use is prohibited; it is allowed through health care facilities. Ms. Haluza concludes the presentation by giving calendar dates coming up in order to having a competing initiative on the ballot if that is something the City Council elects to do. The elections will be held on November 4, 2014. 13B -7 5. Homelessness (Overview of Public Safety Efforts Related to the Homeless Population) Ruben Ibarra, Commander, SAPD, gives a brief overview of the Police Department's efforts dealing with the homeless issue. There are presently 1,400 homeless people in Santa Ana; 400- 600 of those are living in the Civic Center area. A major concern in the Civic Center is public safety. City and Courthouse employees do not want to go outside to sit and enjoy their lunch because of the stench, and they are wary of being assaulted. This problem is not just in the Civic Center, it is throughout the city. As a result of AB 109, more prisoners have been released into homelessness. The Police Department is looking at taking a two -prong approach: enforcement and compassion. In 2012, there were 2398 calls for service; in 2013, 1808. The H.E.A.R.T. Program identifies those people who want to be helped, and to date 83 people have been rescued. There are over 500 clients in the H.E.A.R.T. program; 254 are active. Commander Ibarra concludes his overview by stating the importance of partnering together with other agencies to address this issue. COMMITTEE MEMBER COMMENTS Chairman Benavides says we need to identify and assess what programs are already out there as it applies to the item on Restorative Justice. He also mentions it would be helpful for the Committee to see some case studies that have been done with the cities of Oakland and Long Beach and the outcome reached. Regarding partnering with the National Council on Crime and Delinquency, questioned if they are already providing the same efforts as the concept of restorative justice. Chairman Benavides would like to review a sample contract of what this type of partnership would be and to see what costs or administrative fees are involved. Committee Member Martinez speaks about the Medical Marijuana item. She is concerned about the marketing of these dispensaries showing Santa Ana as the city to come to for marijuana. Committee Member Martinez would like the City to have a counter measure in order to protect our business community. She mentions that the cities of Oakland and Los Angeles have designated medical districts, and says she would be supportive of such in order to be able to monitor and control the dispensaries from a law enforcement and code enforcement perspective. Committee Member Martinez requests more research and an analysis of the medical districts so the City has more options and choices regarding this matter. Chairman Benavides says the City has three options regarding the Medical Marijuana initiative that will be on the ballot in November: 1) have a competing measure to allow for X- number of dispensaries; 2) stay silent and let the ballot go forward; and 3) have a competing measure to reinforce the City's position that we do not allow medical marijuana dispensaries other than through health care agencies. 13B -8 Committee Member Martinez states that we need to work with our housing authority as a long term solution to the homelessness issue. Affordable housing is key. She mentions the City possibly using Receivership as an option with absentee or shim landlords who do not attend to their properties as possible sites that the City may take over. Committee Member Reyna speaks about other service providers who can also help with the homeless issue, whether it is through grants or their case managers working directly with the homeless offering the different resources that they have available. Chairman Benavides agrees with Committee Member Martinez to use Receivership as a possible tool to address the homelessness issue. FUTURE AGENDA ITEMS ➢ Community Oriented Policing ➢ Vendor Trucks ➢ Memorials ➢ Myrtle /Townsend, the area around KidWorks ADJOURNMENT — 7:50 P.M. ( / WI/ CARLOSROJAS Acting Chief of Police 13B -9 13B -10 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: APPROPRIATION ADJUSTMENT ACCEPTING SUPPLEMENTAL LAW ENFORCEMENT SERVICES FUNDS /CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: F.1111111140:11% ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2n' Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Approve an appropriation adjustment to recognize $455,029 in the Supplemental Law Enforcement Services Fund revenue account and appropriate same to the grant expenditure account for special enforcement and gang detail overtime. DISCUSSION The State of California provides grant funding to state law enforcement agencies through the Supplemental Law Enforcement Services Fund ( SLESF). This program requires that funding be allocated to counties and cities in accordance with specific requirements for front line law enforcement services. Front line law enforcement typically includes community oriented policing projects and special law enforcement activities that require use of additional police officers in specially targeted saturation areas. Funding allocations for SLESF are based on annual estimated population figures for respective counties and cities. Based on Santa Ana's population figures, the State estimates that the Police Department will receive $526,379 in FY 2013 -14 SLESF funding. To date, the Police Department has received $347,095 of the FY 2013 -14 allocation. In addition, the City has received $107,934 in prior year SLESF funding, for a total of $455,029. The Police Department is anticipating the final FY 2013- 14 payments of approximately $179,284 later this calendar year. The Police Department proposes to utilize this funding for special enforcement and gang detail overtime. 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, enforcing and reducing criminal activity and traffic collisions). 20A -1 Appropriation Adjustment — SLESF Funds July 15, 2014 Page 2 FISCAL IMPACT The appropriation adjustment will recognize $455,029 in the Supplemental Law Enforcement Services Fund revenue account (no. 12814002 52026), and appropriate same to expenditure account (no. 12814407 - 61040). APPROVED AS TO FUNDS AND ACCOUNTS: Carlos Rojas Francisco Gutierrez Chief of Police Executive Director, Finance & Mgt. Svcs. 20A -2 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: CONTRACT AWARD TO RED HAWK FIRE & SECURITY FOR EDWARDS EST -3 FIRE ALARM PANEL UPGRADE (SPEC. NO. 14 -027) CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on I"Reading ❑ Ordinance on 2ndReading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Award a contract to Red Hawk Fire & Security for the purchase of an Edwards EST -3 fire alarm system upgrade and post warranty support contract, in an amount not to exceed $118,100, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION The Santa Ana Police Department's current fire alarm system is the original fire detection system that was installed when the building was constructed in 1997. The existing Edwards IRC -3 fire alarm system's front end components are obsolete and are no longer supported by the manufacturer. In order to bring the system current and ensure continued compliance with the Fire Authority, an upgrade to the system is necessary. The fire alarm panels will be upgraded to the manufactures latest version Edwards EST -3 fire panels. The components being replaced are the front end panels and command center system equipment with no change required to the current smoke devices, tampers and monitor devices. Phase I of the two phased upgrade will complete the Police Administration Building. Phase II will include an upgrade to the Jail. Additionally, included in this request is a three year post- warranty maintenance contract that will provide on- call support with semi - annual testing of the fire alarm system. The notice inviting bids was advertised on May 5, 2014 on the City's online bid management and publication system. A summary of the bid invitations and bids received is as follows: 4 Vendors were notified 3 Vendors downloaded the bid packet 0 Received from Santa Ana vendors 2 Bids received 22A -1 Contract Award to Red Hawk Fire & Security for Fire Alarm Panel Upgrade July 15, 2014 Page 2 The bids were received and opened on May 22, 2014 and evaluated (Exhibit 1). The bid received from Red Hawk Fire & Security is responsive to the specifications and meets the City's requirements. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #6 Community Facilities & Infrastructure, Objective #2 (address deferred maintenance on City buildings and equipment). FISCAL IMPACT Funds are available in the Police Criminal Activities- D.O.J Building Improvement account (no. 02614450- 66200). APPROVED AS TO FUNDS AND ACCOUNTS: Carlos Rojas Francisco Gutierrez Chief of Police Executive Director Police Department Finance and Management Services QAx �`e•j�, EG Attachment Exhibit 1 —Bid Abstract 22A -2 Contract Award to Red Hawk Fire & Security for Fire Alarm Panel Upgrade July 15, 2014 Page 3 ABSTRACT OF BIDS CONTRACT AWARD FOR FIRE ALARM SYSTEM CONTROL PANEL UPGRADE (14 -027) VENDOR Red Hawk Fire & Security LOCATION Orange, CA TERM NET 30 DAYS Convergint Technologies Orange, CA NET 30 DAYS OFFER $118,019. $172,019. Exhibit 1 22A -3 22A -4 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: AGREEMENT FOR PLAN CHECK SERVICES WITH SCOTT FAZEKAS & ASSOCIATES, INC., CSG CONSULTANTS, INC., CENTURY STRUCTURAL ENGINEERING CO., INC., MELAD AND ASSOCIATES AND J LEE ENGINEERING INC. /,'� 1-7 ITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and the Clerk of the Council to execute the attached agreements with Scott Fazekas & Associates, Inc., CSG Consultants, Inc., Century Structural Engineering Co., Inc., Melad and Associates and J Lee Engineering Inc. for plan check services in an aggregate amount not to exceed $500,000 for a period of three years, subject to non- substantive changes approved by the City Manager and City Attorney. DISCUSSION For many years the Building Division met or exceeded a turnaround time of three weeks or less for over 90 percent of plan check submissions. This level of service compared favorably with surrounding municipalities and represented the generally accepted performance goal for plan review in the County. The Building Division had attained this level of service with seven in -house plan check staff, a contract plan checker at the public counter, streamlined internal processes, and outsourcing plan checking services during especially high volume months. Beginning in 2009, budget constraints resulted in the reduction of over 50 percent of in -house plan check staff, as well as the cancelation of both the contract plan checker and outsourced plan check services. While these reductions negatively impacted plan check turnaround times, the impact was lessened by a concurrent reduction in plan check submittals due to the economic downturn. Building activity has continued to rebound from the economic recession and has shown steady increases since late 2010. In response to the rise in plan check submittals, the Building Division reinstituted outsourcing plan checks in December 2010 to improve plan check turnaround times, as well as provide greater flexibility for applicants wishing to take advantage of accelerated plan check. 25A -1 Plan Check Service Agreements July 15, 2014 Page 2 In the accelerated plan check process, the applicant submits the plans to the City along with a request for accelerated plan check. The applicant then pays the regular plan check fee, as well as an accelerated fee, which is based on the City's estimated number of hours required to check the plans. The plans are then sent to the consultant with a guaranteed turnaround time of 15- working days. This process benefits the applicant by providing an option to expedite plan check for large, complicated and /or urgent projects. Sustained growth from the building industry combined with current turnaround times for regular (non - accelerated) plan check exceeding seven weeks has resulted in an increasing number of projects requesting accelerated plan check. This increase has resulted in the current contracts with Scott Fazekas and Associates, Inc. and Century Structural Engineering Inc. being nearly expended and must be renewed in order to continue to provide accelerated plan check services. The Building Safety Division released a Request for Proposals on May 14, 2014 and received proposals from five firms. Based on a review of the qualifications, experience of personnel, demonstrated ability to meet the specified turnaround times, and price, staff is recommending that the City enter into agreements with all five structural plan check consultants. Two of the firms, Scott Fazekas & Associates and Century Structural Engineering Co. Inc. have contracted with the City for expedited plan check services in the past and were able to continually meet the City's requirements for availability of qualified engineering staff, turnaround time, locale, and fees. CSG Consultants, Inc., Melad and Associates and J Lee Engineering Inc., are also well -known in the structural engineering field and have experience working with municipalities for on -call plan check services. All of the recommended firms offer both full and structural -only plan check services at a competitive rate of 40 percent of the plan check fee calculated by the City and will process any required plan revisions and deferred submittals on a tiered rate system ranging from $85 to $100 per hour depending on the complexity level of the revision and plan check personnel assigned to the review. Accelerated plan check fees are paid entirely by the applicant. The increased number of available firms to whom the city may send accelerated plan checks will provide greater flexibility for the Building Safety Division to both ensure that plans are reviewed within the specified time frames, as well as route projects to firms that may specialize in a specific building type or construction method. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal No. 3 Economic Development, Objective No. 3 (promote a solutions -based customer focus in all efforts to facilitate development and investment in the community). 25A -2 Plan Check Service Agreements July 15, 2014 Page 3 FISCAL IMPACT This agreement will not impact any City funds. Accelerated plan check fees paid to the City by the applicant for each project contracted out for plan check will fully fund the consultants' cost to perform the plan review. These amounts will be deposited by the applicant into the Accelerated Plan Check account (account no. 09801001- 24045) prior to the consultant commencing any work. G AArt � Karen Haluza Interim Executive Director Planning and Building Agency MF:rb MF /RFCA — Expedited Plan Check Services 2014 APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance and Management Services Exhibit: 1. Agreement with Scott Fazekas & Associates 2. Agreement with CSG Consultants, Inc. 3. Agreement with Century Structural Engineering Co., Inc. 4: Agreement with Melad and Associates 5. Agreement with J Lee Engineering Inc. 25A -3 25A -4 CONSULTANT AGREEMENT THIS AGREEMENT made and entered into this _ day of 2014 by and between SCOTT FAZEKAS & ASSOCIATES, INC., a California corporation (hereinafter "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 (hereinafter "City"). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of municipal plan check services.. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW 'THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall provide structural plan check services on request of the Executive Director of the Planning and Building Agency, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and in a form compatible with City's computer system, as agreed between the Executive Director and Consultant. In regard to copyrightable material produced as a deliverable under this Agreement, including but not limited to books, reports, plans, photographs, drawings and computer programs, Consultant agrees and shall ensure that all of Consultant's affected officers, employees, agents, contractors, and volunteer workers agree that (a) other such material may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty - free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. EXHIBIT 1 25A -5 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the cumulative rates and charges identified in Exhibit A. This consultant is one of five consultants that the City has retained for on call municipal plan check services. The total sum authorized to be expended by the City for all on call municipal plan check services between all five consultants shall not exceed $500,000 during the term of this Agreement. However, this Agreement does not guarantee that any set amount of the authorized $500,000 will be expended on any particular consultant. b. Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above and tenninate three (3) years from said commencement date or upon the depletion of the maximum contract amount as stated in Section 2 above, unless terminated earlier in accordance with provisions, below. The tern of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. S. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the 25A -6 performance of the work tinder this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. a. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, subject to $1,000,000.00 aggregate. b. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in fill force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Consultant agrees to slid shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the direct or indirect negligent operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section I of this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Consultant agrees 25A -7 that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Executive Director of Planning and Building Agency and Building Safety Division City of Santa Ana 20 Civic Center Plaza (M -19) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -5897 25A -8 City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -6515 To Consultant; Scott Fazekas & Associates, Inc, 9 Corporate Park, Suite 200 Irvine, California 92606 telefacsimile (949) 475 -2560 A party may change its address by giving notice in writing to the other party. 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. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In, the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate either Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 12. TERMINATION 25A -9 This Agreement maybe terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 13. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection; training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the tern of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 16. MISCELLANEOUS PROVISIONS a. 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 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. 25A -10 b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO CITY OF SANTA ANA DAVID CAVAZOS City Manager SCOTT FAZEKAS & ASSOCIATES, INC. SCOTT FAZEKAS President Tax ID# 7 25A -11 SCOPE OF SERVICES General Description Building Safety Division of the City of Santa Ana foresees submittal of several large projects in the near future. Therefore, the City is seeking the services of professional consultants to support the efforts of City staff in the area of plan checking. Scope of Services Consultant shall perform the following services for each assigned building plan review. 1. Detail review the mechanical, plumbing, electrical and building (architectural /structural) plans. Review supporting documents for industrial, commercial, residential and public buildings and detennine compliance with applicable building standards as related to existing and proposed buildings. 2. Review the plans for compliance with California state - mandated regulations for energy conservation, disabled access and City Adopted Ordinances. 3. Review the plans for compliance with Federal Flood PIain regulations for projects in the special flood hazard area designated on the flood insurance rate map (FIRM) as zone A01 or AE. 4. Recheck and approval of final plans and supporting documents to be provided without additional charge for recheck. 5. Submittal of approved plans and all supporting documents to the City of Santa Ana. 6. Provide all necessary liaison with applicants via fax, phone, e -mail or in person to expedite the review process and consult on complex code issues with City of Santa Ana Building Official. 7. Plan review report to be customized for each project and be delivered via fax, mail or e- mail to City and the applicant. S. Structural portion of the plans to be reviewed by California Licensed Civil or Structural Engineer. 9. Plan reviewer to be consistent, accurate, available and responsive to the City and the applicant via phone, fax, e -mail and meetings. Also, the plan reviewer shall be available to the Building Official and his staff to help answer Code questions arising from review. Plan reviewer shall provide assistance in evaluation of alternate materials, design and methods of construction proposed by applicant. 25A -12 10. Plan reviewer shall be available, at no expense to the City of Santa Ana, to meet at the City office with owners, architects, engineers and contractors to discuss the Plan Check issues. 11. Plan reviewer to verify that the job description, square footages, occupancy classifications and type of construction, on the permit application agrees with the plans and specifications. Plan reviewer will also verify the building valuation based upon valuation costs used by the City of Santa Ana. 12. Initial Plan review to be complete within fifteen (15) working days and recheck within five (5) working days. 13. Deferred submittals, trusses, stairs, curtain walls, mechanical, plumbing and electrical plan reviews will be checked on an hourly rate of $85.00/hour when performed by a Certified Plans Examiner and a rate of $100.00(hour when performed by a Plan Check Engineer. 14. Consultant fee for review services to be 40% of the City of Santa Ana Plan Check Fee. 25A -13 25A -14 CONSULTANT AGREEMENT THIS AGREEMENT made and entered into this _ day of 2014 by and between CSO CONSULTANTS, INC., a California corporation (hereinafter "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 (hereinafter "City "). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of municipal plan check services. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall provide structural plan check services on request of the Executive Director of the Planning and Building Agency, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and in a form compatible with City's computer system, as agreed between the Executive Director and Consultant. In regard to copyrightable material produced as a deliverable under this Agreement, including but not limited to books, reports, plans, photographs, drawings and computer programs, Consultant agrees and shall ensure that all of Consultant's affected officers, employees, agents, contractors, and volunteer workers agree that (a) other such material may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty - free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. EXHIBIT 2 25A -15 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the cumulative rates and charges identified in Exhibit A. This consultant is one of five consultants that the City has retained for on call municipal plan check services. The total sum authorized to be expended by the City for all on call municipal plan check services between all five consultants shall not exceed $500,000 during the term of this Agreement. However, this Agreement does not guarantee that any set amount of the authorized $500,000 will be expended on any particular consultant. b. Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above and terminate three (3) years from said commencement date or upon the depletion of the maximum contract amount as stated in Section 2 above, unless terminated earlier in accordance with provisions, below. The tern of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. ±_l►` UUTMT t" Prior to undertaking perfonnance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the perfonnance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. 25A -16 a. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, subject to $1,000,000.00 aggregate. b. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain, all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the direct or indirect negligent operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered by reason of the events referred to in this Section or by reason of the terns of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terns of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. CONFIDENTIALITY I£ Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of 25A -17 like importance, but in no event less than reasonable care. "Confidential hformarion" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Executive Director of Planning and Building Agency Building Safety Division City of Santa Ana 20 Civic Center Plaza (M -19) P.O. Box 1988 Santa Ana, California 92702 telefacshnile (714) 647 -5897 and City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -6515 25A -18 To Consultant: CSG Consultants, Inc. Cyrus Kianpour, President 1700 S. Amphlett Blvd., 3`s floor San Mateo, California 94402 A party may change its address by giving notice in writing to the other party. 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. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate either Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in thus Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 12. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services perfoned by Consultant prior to receipt of such notice of tenmination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product 25A -19 shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 13. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JIIRISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 16. MISCELLANEOUS PROVISIONS a. 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 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. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 25A -20 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attprti� . tl Sy: Ryan CITY OF SANTA ANA DAVID CAVAZOS City Manager CSG CONSULTANTS, INC. CYRUS KIANPOUR, P.E., P.L.S. President Tax ID# 7 25A -21 .H.IC . SCOPE OF SERVICES General Description Building Safety Division of the City of Santa. Ana foresees submittal of several large projects in the near future. Therefore, the City is seeking the services of professional consultants to support the efforts of City staff in the area of plan checking. Scope of Services Consultant shall perform the following services for each assigned building plan review. Detail review of the mechanical, plumbing, electrical and building (architectural /structural) plans. Review supporting documents for industrial, commercial, residential and public buildings and determine compliance with applicable building standards as related to existing and proposed buildings. Review the plans for compliance with California state - mandated regulations for energy conservation, disabled access and City Adopted Ordinances. Review the plans for compliance with Federal Flood Plain regulations for projects in the special flood hazard area designated on the flood insurance rate map (FIRM) as zone A01 or AE. 4. Recheck and approval of final plans and supporting documents to be provided without additional charge for recheck. S. Submittal of approved plans and all supporting documents to the City of Santa Ana. 6. Provide all necessary liaison with applicants via fax, phone, e -mail or in person to expedite the review process and consult on complex code issues with City of Santa Ana Building Official. Plan review report to be customized for each project and be delivered via fax, mail or e- mail to City and the applicant. Structural portion of the plans to be reviewed by California Licensed Civil or Structural Engineer. 9. Plan reviewer to be consistent, accurate, available and responsive to the City and the applicant via phone, fax, e -mail and meetings. Also, the plan reviewer shall be available to the Building Official and his staff to help answer Code questions arising from review. Plan reviewer shall provide assistance in evaluation of alternate materials, design and methods of construction proposed by applicant. 25A -22 10. Plan reviewer shall be available, at no expense to the City of Santa Ana, to meet at the City office with owners, architects, engineers and contractors to discuss the Plan Check issues. 11. Plan reviewer to verify that the job description, square footages, occupancy classifications and type of construction, on the permit application agrees with the plans and specifications. Plan reviewer will also verify the building valuation based upon valuation costs used by the City of Santa Ana. 12. Initial Plan review to be complete within fifteen (15) working days and recheck within five (5) working days. 13. Deferred submittals, trusses, stairs, curtain walls, mechanical, plumbing and electrical plan reviews will be checked on an hourly rate of $85.00/hour when performed by a Certified Plans Examiner and a rate of $100.00/hour when performed by a Plan Check Engineer. 14. Consultant fee for review services to be 40% of the City of Santa Ana Plan Check Fee. 25A -23 25A -24 CONSULTANT AGREEMENT THIS AGREEMENT made and entered into this _ day of 2014 by and between CENTURY STRUCTURAL ENGINEERING CO., INC., a California corporation (hereinafter "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 (hereinafter "City "). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of municipal plan check services. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall provide structural plan check services on request of the Executive Director of the Planning and Building Agency, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and in a form compatible with City's computer system, as agreed between the Executive Director and Consultant. In regard to copyrightable material produced as a deliverable under this Agreement, including but not limited to books, reports, plans, photographs, drawings and computer programs, Consultant agrees and shall ensure that all of Consultant's affected officers, employees, agents, contractors, and volunteer workers agree that (a) other such material may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty - fi-ee, nonexclusive, irrevocable license throughout the world for goverrunental purposes to disclose, publish, translate, reproduce, and use such materials. EXHIBIT 3 25A -25 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the cumulative rates and charges identified in Exhibit A. This consultant is one of five consultants that the City has retained for on call municipal plan check services. The total surn authorized to be expended by the City for all on call municipal plan check services between all five consultants shall not exceed $500,000 during the term of this Agreement. However, this Agreement does not guarantee that any set amount of the authorized $500,000 will be expended on any particular consultant. b. Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. t� 131 19-011 This Agreement shall commence on the date first written above and terminate three (3) years from said commencement date or upon the depletion of the maximum contract amount as stated in Section 2 above, unless terminated earlier in accordance with provisions, below. The term of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional mariner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be prodded in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the 25A -26 performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. a. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, subject to $1,000,000.00 aggregate. b. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and clahms for property damage, which may arise from the direct or indirect negligent operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terns of, or effects arising from this Agreement, City may make all reasonable decisions with respect to its representation in any legal proceeding. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Consultant agrees 25A -27 that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential hifonmation" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement: The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Executive Director of Planning and Building Agency Building Safety Division City of Santa Ana 20 Civic Center Plaza (M -19) and P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -5897 25A -28 City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.Q. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -6515 To Consultant: Century Structural Engineering Co., Inc. Ed Chung, Principal 24719 Narbonne Avenue Lomita, California 90717 telefacsimile (310) 539 -7678 A party may change its address by giving notice in writing to the other party. 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. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terns of this Agreement and any attachments hereto, the terms of this Agreement shall prevail, This Agreement may not modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate either Consultant or the City. Each party to this Agreement aclmowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered mill and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 12. TERMINATION 25A -29 This Agreement maybe terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 13. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 16. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terns of this Agreement, and shall indemnify City fiilly, 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. 25A -30 b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARLA D. HUIZAR Cleric of the Council APPROVER AS TO FORM: SONIA R. CARVALHO City Att rc!Tr y, n By: u Ryan CITY OF SANTA ANA DAVID CAVAZOS City Manager CENTURYSTRUCTURAL ENGINEERING CO., INC. ED CHUNG Principal Tax ID# 7 25A -31 EXHIBIT A SCOPE OF SERVICES General Description Building Safety Division of the City of Santa Ana foresees submittal of several large projects in the near future. Therefore, the City is seeking the services of professional consultants to support the efforts of City staff in the area of plan checking. Scope of Services Consultant shall perform the following services for each assigned building plan review. 1. Detail review the mechanical, plumbing, electrical and building (architectural /structural) plans. Review supporting documents for industrial, commercial, residential and public buildings and determine compliance with applicable building standards as related to existing and proposed buildings. 2. Review the plans for compliance with California state - mandated regulations for energy conservation, disabled access and City Adopted Ordinances, 3. Review the plans for compliance with Federal Flood Plain regulations for projects in the special flood hazard area designated on the flood insurance rate map (FIRM) as zone A01 or AE. 4. Recheck and approval of final plans and supporting documents to be provided without additional charge for recheck. 5. Submittal of approved plans and all supporting documents to the City of Santa Ana. 6. Provide all necessary liaison with applicants via fax, phone, e -mail or in person to expedite the review process and consult on complex code issues with City of Santa Ana Building Official. 7. Plan review report to be customized for each project and be delivered via fax, mail or e- mail to City and the applicant. 8. Structural portion of the plans to be reviewed by California Licensed Civil or Structural Engineer. 9. Plan reviewer to be consistent, accurate, available and responsive to the City and the applicant via phone, fax, e -mail and meetings. Also, the plan reviewer shall be available to the Building Official and his staff to help answer Code questions arising from review. Plan reviewer shall provide assistance in evaluation of alternate materials, design and methods of construction proposed by applicant. 25A -32 10. Plan reviewer shall be available, at no expense to the City of Santa Ana, to meet at the City office with owners, architects, engineers and contractors to discuss the Plan Check issues. 11. Plan reviewer to verify that the job description, square footages, occupancy classifications and type of constriction, on the permit application agrees with the plans and specifications. Plan reviewer will also verify the building valuation based upon valuation costs used by the City of Santa Ana. 12, Initial Plan review to be complete within fifteen (15) working days and recheck within five (5) working days. D. Deferred submittals, trusses, stairs, curtain walls, mechanical, plumbing mid electrical plan reviews will be checked on an hourly rate of $85.00/hour when performed by a Certified Plans Examiner and a rate of $100.00/hour when performed by a Plan Check Engineer. 14. Consultant fee for review services to be 40% of the City of Santa Ana Plan Check Fee. 25A -33 25A -34 CONSULTANT AGREEMENT THIS AGREEMENT made and entered into this — day of 2014 by and between MELAD & ASSOCIATES, a California corporation (hereinafter "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 (hereinafter "City "). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of municipal plan check services. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: I . SCOPE OF SERVICES Consultant shall provide structural plan check services on request of the Executive Director of the Planning and Building Agency, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and in a form compatible with City's computer system, as agreed between the Executive Director and Consultant, h1 regard to copyrightable material produced as a deliverable under this Agreement, including but not limited to books, reports, plans, photographs, drawings and computer programs, Consultant agrees and shall ensure that all of Consultant's affected officers, employees, agents, contractors, and volunteer workers agree that (a) other such material may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty - free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. EXHIBIT 4 25A -35 COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the cumulative rates and charges identified in Exhibit A. This consultant is one of five consultants that the City has retained for on call municipal plan check services. The total sum authorized to be expended by the City for all on call municipal plan check services between all five consultants shall not exceed $500,000 during the term of this Agreement. However, this Agreement does not guarantee that any set amount of the authorized $500,000 will be expended on any particular consultant. b, Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above and terminate three (3) years from said commencement date or upon the depletion of the maximum contract amount as stated in Section 2 above, unless terminated earlier in accordance with provisions, below. The term of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer- employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. 25A -36 b. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, subject to $1,000,000.00 aggregate. c, The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in fall force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right; at the City's election, to forthwith terminate this Agreement. Such tenmination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the direct or indirect negligent operations of the Consultant or its contractors, subcontractors, agents, employees; or other persons acting on their behalf which relates to the services described in section I of this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of 25A -37 like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Executive Director of Planning and Building Agency Building Safety Division City of Santa Ana 20 Civic Center Plaza (M -19) P.O. Box 1988 and Santa Ana, California 92702 telefacsimile (714) 647 -5897 City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -6515 25A -38 To Consultant: Melad & Associates Jose Melad, President 8907 Warner Avenue, Suite 161 Huntington Beach, California 92647 telefacsimile (714) 848 -7027 A party may change its address by giving notice in writing to the other party. 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. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the teens of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terns or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shalt not bind or obligate either Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 12. TERMINATION This Agreement may be tenninated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: 25A -39 a. Asa condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 13. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 16. MISCELLANEOUS PROVISIONS a. 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 City frilly, 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. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 25A -40 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. 7CARVALHO City Ap(ir}iey, 1 ay:? t( Ryan O\ Assistant CITY OF SANTA ANA DAVID CAVAZOS City Manager MELAD & ASSOCIATES JOSE MELAD, P.E. President Tax ID# 7 25A -41 EXHIBIT A. SCOPE OF SERVICES General Description Building Safety Division of the City of Santa Ana foresees submittal of several large projects in the near future. Therefore, the City is seeking the services of professional consultants to support the efforts of City staff in the area of plan checking. Scope of Services Consultant shall perform the following services for each assigned building plan review. Detail review of the mechanical, plumbing, electrical and building (architectural /structural) plans. Review supporting documents for industrial, commercial, residential and public buildings and determine compliance with applicable building standards as related to existing and proposed buildings. 2. Review the plans for compliance with California state - mandated regulations for energy conservation, disabled access and City Adopted Ordinances. 3. Review the plans for compliance with Federal Flood Plain regulations for projects in the special flood hazard area designated on the flood insurance rate map (FIRM) as zone A01 or AE. 4. Recheck and approval of final plans and supporting documents to be provided without additional charge for recheck. 5. Submittal of approved plans and all supporting documents to the City of Santa Ana. Provide all necessary liaison with applicants via fax, phone, e -mail or in person to expedite the review process and consult on complex code issues with City of Santa Ana Building Official. Plan review report to be customized for each project and be delivered via fax, mail or e- mail to City and the applicant. 8. Structural portion of the plans to be reviewed by Califorrua Licensed Civil or Structural Engineer. Plan reviewer to be consistent, accurate, available and responsive to the City and the applicant via phone, fax, e -mail and meetings. Also, the plan reviewer shall be available to the Building Official and his staff to help answer Code questions arising from review. Plan reviewer shall provide assistance in evaluation of alternate materials, design acid methods of construction proposed by applicant. 25A -42 10. Plan reviewer shall be available, at no expense to the City of Santa Ana, to meet at the City office with owners, architects, engineers and contractors to discuss the Plan Check issues. 11. Plan reviewer to verify that the job description, square footages, occupancy classifications and type of construction, on the permit application agrees with the plans and specifications. Plan reviewer will also verify the building valuation based upon valuation costs used by the City of Santa Ana. 12. Initial Plan review to be complete within fifteen (15) working days and recheck within five (5) working days. 13. Deferred submittals, trusses, stairs, curtain walls, mechanical, plumbing and electrical plan reviews will be checked on an hourly rate of $85.00/hour when performed by a Certified Plans Examiner and a rate of $100.00lhour when performed by a Plan Check Engineer. 14. Consultant fee for review services to be 40% of the City of Santa Ana Plan Check Fee. 25A -43 25A -44 CONSULTANT AGREEMENT THIS AGREEMENT made and entered into this _ day of 2014 by and between 7 LEE ENGINEERING INC., a California corporation (hereinafter "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 (hereinafter "City "). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of municipal plan check services. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall provide structural plan check services on request of the Executive Director of the Planning and Building Agency, as set forth in Exhibit A, attached hereto and incorporated herein by this reference. Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and in a form compatible with City's computer system, as agreed between the Executive Director and Consultant. In regard to copyrightable material produced as a deliverable under this Agreement, including but not limited to books, reports, plans, photographs, drawings and computer programs, Consultant agrees and shall ensure that all of Consultant's affected officers, employees, agents, contractors, and volunteer workers agree that (a) other such material may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, a royalty - free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. EXHIBIT 5 25A -45 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the cumulative rates and charges identified in Exhibit A. This consultant is one of five consultants that the City has retained for on call municipal plan check services. The total sum authorized to be expended by the City for all on call municipal plan check services between all five consultants shall not exceed $500,000 during the term of this Agreement. However, this Agreement does not guarantee that any set amount of the authorized $500,000 will be expended on any particular consultant. b. Payment by City shall be made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above and terminate three (3) years from said commencement date or upon the depletion of the maximum contract amount as stated in Section 2 above, unless terminated earlier in accordance with provisions, below. The tern of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 4. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self- insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. 25A -46 a. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, subject to $1,000,000.00 aggregate. b. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to Rimish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the direct or indirect negligent operations of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section I of this Agreement. This inderunity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered by reason of the events referred to in this Section or by reason of the terns of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of 25A -47 like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 8. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Executive Director of Planning and Building Agency Building Safety Division City of Santa Ana 20 Civic Center Plaza (M -19) P.O. Box 1988 and Santa Ana, California 92702 telefacsimile (714) 647 -5897 City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647 -6515 25A -48 To Consultant: J Lee Engineering Inc. Jae Lee, President 430 S. Garfield Avenue, Suite 301 Alhambra, California 91801 telefacsimile (626) 284 -8907 A party may change its address by giving notice in writing to the other party. 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. If sent by telefacsimile, communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terns of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate either Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 12. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: 25A -49 a. Asa condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product Shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard ofperformance specified in the Recitals of this Agreement. 13. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 14. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 15. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United. States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 16. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herembelow has the power, authority and right to bind their respective parties to each of the terns of this Agreement, and shall indemnify City £filly, 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. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement, 25A -50 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attof} ey r it By: Ryan CITY OF SANTA ANA DAVID CAVAZOS City Manager CSG CONSULTANTS, INC. JAE LEE, PE, CPE, CASP President Tax lD# 7 25A -51 EXHIBIT A SCOPE OF SERVICES General Description Building Safety Division of the City of Santa Ana foresees submittal of several large projects in the near future. Therefore, the City is seeking the services of professional consultants to support the efforts of City staff in the area of plan checking. Scope of Services Consultant shall perform the following services for each assigned building plan review. 1, Detail review of the mechanical, plumbing, electrical and building (arehitecturallstructural) plans. Review supporting documents for industrial, commercial, residential and public buildings and determine compliance with applicable building standards as related to existing and proposed buildings. 2. Review the plans for compliance with California state - mandated regulations for energy conservation, disabled access and City Adopted Ordinances. 3. Review the plans for compliance with Federal Flood Plain regulations for projects in the special flood hazard area designated on the flood insurance rate map (FIRM) as zone AO or AE: 4. Recheck and approval of final plans and supporting documents to be provided without additional charge for recheck. 5. Submittal of approved plans and all supporting documents to the City of Santa Ana. 6. Provide all necessary liaison with applicants via fax, phone, e-mail or in person to expedite the review process and consult on complex code issues with City of Santa Ana Building Official. 7. Plan review report to be customized for each project and be delivered via fax, mail or e- mail to City and the applicant. 8. Structural portion of the plans to be reviewed by California Licensed Civil or Structural Engineer. 9. Plan reviewer to be consistent, accurate, available and responsive to the City and the applicant via phone, fax, e -mail and meetings. Also, the plan reviewer shall be available to the Building Official and his staff to help answer Code questions arising from review. Plan reviewer shall provide assistance in evaluation of alternate materials, design and methods of construction proposed by applicant. 25A -52 10. Plan reviewer shall be available, at no expense to the City of Santa Ana, to meet at the City office with owners, architects, engineers and contractors to discuss the Plan Check issues. 11. Plan reviewer to verify that the job description, square footages, occupancy classifications and type of constriction, on the permit application agrees with the plans and specifications. Plan reviewer will also verify the building valuation based upon valuation costs used by the City of Santa Ana. 12. Initial Plan review to be complete within fifteen (15) working days and recheck within five (5) working days. 13. Deferred submittals, trusses, stairs, curtain walls, mechanical, plumbing and electrical plan reviews will be checked on an hourly rate of $85.00/hour when performed by a Certified Plans Examiner and a rate of $100.00/hour when performed by a Plan Check Engineer. 14. Consultant fee for review services to be 40% of the City of Santa Ana Plan Check Pee. 25A -53 25A -54 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: mn� AMEND AN AGREEMENT FOR CONTRACTED ENVIRONMENTAL SERVICES WITH PLACE WORKS (FORMERLY THE PLANNING CENTER) / CITY MANAG R RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: •:• _.. ❑ As Recommended ❑ As Amended ❑ Ordinance on I" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute the attached amendment to the agreement with Place Works (formerly The Planning Center) to prepare an Environmental Impact Report (EIR) and related technical studies for the Harbor Corridor Specific Plan for a period no longer than six months for an additional amount of $9,950 not to exceed a total contracted amount of $162,134, subject to non - substantive changes approved by the City Manager and City Attorney. DISCUSSION In 2010 the City, with the assistance of a successful grant award from the Southern California Association of Governments (SCAG) and consultation from Place Works, kicked off the Harbor Corridor Specific Plan study. The scope included analysis of the existing zoning, land use and transit. The scope also included extensive outreach to the community through a series of workshops, fairs and neighborhood meetings. Due to the potential for significant environmental impacts, an environmental impact report (EIR) was required for this project pursuant to the California Environmental Quality Act. A Request for Proposal was circulated to qualified environmental firms in 2010 as a part of the Harbor Corridor Specific Plan project. In 2010, City Council approved an agreement with Place Works for $152,1$4 for contracted environmental review for the Harbor Corridor Specific Plan. Recently, during the Draft EIR review period, comments were received from the Orange County Sanitation District requesting further analysis of the sewer trunk lines. In addition, it was necessary to include a Water Supply Assessment in compliance with SB 610 (Senate Bill 610) requiring water assessment in conjunction with the Draft EIR. The proposed amendment to the existing agreement will include the preparation and analysis of the sewer trunk lines to address the comments of the Orange County Sanitation District and the Water Supply Assessment. As a result, staff is requesting that an amendment to the agreement be executed with Place Works in an amount not to exceed $9,950. This agreement will remain in effect until completion of the EIR. 25B -1 Amend an Agreement with Place Works July 15, 2014 Page 2 Environmental Impact The awarding of a contract for preparation of an environmental impact report and zoning amendment is statutorily exempt from CEQA. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal No. 3 Economic Development, Objective No. 2 (create new opportunities for business /job growth and encourage private development through new General Plan and Zoning Ordinance policies), and Goal No. 5 Community Health, Livability, Engagement and Sustainability, Objective No. 3 (to facilitate diverse housing opportunities and support efforts to preserve and improve the livability of neighborhoods). FISCAL IMPACT Funds in the amount of $9,950 are available in the Planning and Building Agency account for other contractual services (account no. 01116510- 62300). Karen Haluza Interim Executive Director Planning and Building Agency SK:rb sMrepoftkAmend PlaceWorks Harbor ContracL07A5.14 Exhibit: 1. Agreement APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency 25B -2 FIRST AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT THIS FIRST AMENDMENT TO AGREEMENT, made and entered into this _ day of , 2014, by and between PLACE WORKS, formerly known as THE PLANNING CENTER, a California corporation ("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. City and Consultant entered into Agreement #A- 2010 -234, dated December 6, 2010, for a consultant having special skill and knowledge in the field of professional environmental reports and services, including the preparation of environmental documents for tyre Harbor Boulevard Mixed Use Transit Corridor Plan project ( "said Agreement "). B. In accordance with the terms and conditions of said Agreement, the Parties desire to add additional funds to said Agreement and extend the term of said Agreement through the expenditure of the newly allocated Raids. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terns and conditions of said Agreement, except as herein modified, the parties agree as follows: 1. Section 1, SCOPE OF SERVICES, shall be amended to include those services necessary to complete the environmental documents for the Harbor Boulevard Mixed Use Transit Corridor Plan project, as set forth in Consultant's Service Authorization dated June 17, 2014, attached hereto as Exhibit A and incorporated herein by this reference. Section 3, COMPENSATION, the relevant portion of said section shall be amended to increase the compensation by $9,950.00, such that the total sum to be expended render this Agreement shall not exceed $162,134.00 during the extended term of this Agreement. 3. Except as hereinabove modified, all terms and conditions of said Agreement shall remain in full force and effect. EXHIBIT 1 25B -3 IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney r\ By: ' Ryan FOR APPROVAL: KAREN HALUZA Interim Executive Director - PBA CITY OF SANTA ANA DAVID CAVAZOS City Manager THE PLANNING CENTER WILLIAM HALLIGAN Principal 25B -4 EXHIBIT A SCOPE OF SERVICES (Attached) 25B -5 PROJECT NO. SNT•11,OE DATE June 17, 2014 PROJECT NAME Harbor Boulevard Specific Plan TYPE OF AUTHORIZATION: ❑ Fixed Price Project ❑ Time and Materials Project ® Contract Extension ❑ Meetings Extra to Contract Relmbursables; ❑ No Charge ❑ Extra to Contract ® 10% Markup on Subconsultants RETAINER: $ 0.00 ❑ Yes* ® No *All retainers are either applied to the final Invoice or refunded at the close of the project. BUDGET AMOUNT: AGREEMENT BETWEEN: ® Not to Exceed ❑ Estimated CLIENT City of Santa Ana CONSULTANT PlaceWorks STREET ADDRESS 20 Civic Center Plaza STREET ADDRESS 3 MacArthur Place, Suite 1100 CITYSTATE AND ZIP Santa Ana, CA 92701 CITY STATE AND ZIP Santa Ana, CA 92707 CONTACT Sergio Koltz CONTACT Nicole Morse Hereinafter referred to as "Client," Hereinafter referred to as "Consultant." This document authorizes the Consultant to execute the following services for the Client as Indicated below; SCOPE AND DURATION OF SERVICES: Task 1. Additional Scope and Cost for IBI/Sewer Analysis: Duringthe EIR response to comments period OCSD requested additional modeling data on its,sewertrunk line. IBI will provide sanitary flows atthe points of connection to the main sewer trunk llne, located in Newhope Street. The points of connection will only be along the length of the project, Westminster Ave thru Edinger Ave. The sanitary flows will be based on full build out of the project and will not address any possible ground water infiltration. OCSO will Inputthese flows in their model and provide the resuitsfor IBI's review and discussion. This assumes there will be a maximum of two Iterations of the model required. Once an acceptable model Is obtained, IN will modify the Sewer Studyto outline the results. Cost = $6,750 Task 2, Water Supply Assessment: During the preparation of the DEIR, PlaceWorks prepared the Water Supply Assessment (WSA) in accordance with SB 610, which is required for circulation of the DEIR. Preparation of the WSA was beyond the scope of the original contract. Cost = $3,200 3 MacArthur Place, Suite 1100 1 Santa Ana, California 92707 1 714.96&9220 ! PlaceWorks.com r REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: AGREEMENTS FOR POLICE DEPARTMENT JANITORIAL MAINTENANCE SERVICES CITY MANAGE RECOMMENDED ACTION REVISED CLERK OF COUNCIL USE ONLY; APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on I" Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and the Clerk of the Council to execute a two -year agreement, ending September 30, 2016, with Santa Fe Building Maintenance Services, in an amount not to exceed $795,592, subject to non- substantive changes approved by the City Manager and City Attorney. DISCUSSION On March 28, 2013, the Police Department issued an RFP for Police /Jail janitorial maintenance services. Four proposals were received and the proposals were rated as follows: Firm Location Rating ABM Onsite Services Irvine 87.25 Santa Fe Build. Maint. Chino Hills 82.25 Able Building Maint. Santa Ana 81.75 OmniClean Orange 64.50 On May 20, 2013, the Police Department entered into a three year agreement, with two one -year options, with ABM Onsite Services. Since December, ABM has been expressing that they are losing money on the Police Department contract, and staff has been working with them to control costs within the confines of the agreement. On April 23, 2014, staff received a 90 day notice of intent to terminate. In their 90 day notice, ABM indicates that they are willing to continue if the Police Department will pay an additional $3,137 per month or $37,644 per year for the second year of service, which commences June 1, 2014. ABM is also requesting an increase of $4,209 per month, or $50,505 for the third year of the agreement, which commences June 1, 2015. The projected cost of the ABM agreement over the next two years is $403,380 for Year 1 and $423,549 for Year 2. 25D -1 Agreements for Janitorial Maintenance Services July 15, 2014 Page 2 Staff has met with Santa Fe Building Maintenance and they have agreed to honor the pricing submitted in their April 2013 proposal. The first year of the agreement Includes a base agreement amount of $357,832. The second year of the agreement includes a base agreement amount of $365,433. A ten percent contingency ($72,327) will be added to the two -year agreement for a total not to exceed agreement amount of $795,592. The Santa Fe agreement will save the City $103,664 over the two year period. The proposed agreement start date of October 1, 2014 will provide the additional time necessary for Santa Fe Building Maintenance to identify the staff and equipment needed for the October 1, 2014 contract start date, This will also allow the Police Department adequate time to complete the background investigations needed for the 12 -15 contract employees that will be working at the Police Department. 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 A (continuously evaluate and assess fiscal aspect of service delivery to ensure that the Police Department provides programs and services efficiently and effectively). FISCAL IMPACT Funds for this agreement are available in the Police Department Building & Facility Contract Services account (no. 01114403 62300). q_ It. 17 �- Carlos Rojas, Chief of Police Santa Ana Police Department APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez, Executive Director - Finance & Mgmt. Services Agency 25D -2 REVISED JANITORIAL SERVICES AGREEMENT THIS AGREEMENT, made and entered into this 30"' day of September, 2014 by and between Santa Fe Building Maintenance (hereinafter "Contractor "), 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 (hereinafter "City "). RECITALS A. The City desires to retain a Contractor having special skill and knowledge in the field of providing janitorial services to the Santa Ana Police Administration, Detention Facilities, and surrounding grounds. B. Contractor represents that Contractor is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting finn in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Contractor shall provide janitorial services for the Santa Ana Police Administration and Detention Facilities and surrounding grounds, as set forth in City's Janitorial Maintenance Request for Proposals #13 -015, dated April 15, 2013, on file with at the Santa Ana Police Administration, of which section 4.0 and 5.0 are attached hereto as Exhibit A and Contractor's Proposal, dated April 12, 2013, attached hereto as Exhibit B and all exhibits are incorporated by reference. 2. COMPENSATION a. (1) City agrees to pay, and Contractor agrees to accept as total payment for its services, the rates and charges identified in Exhibit B. The total sum to be expended under this Agreement, shall not exceed $795,592.00 over the term of this Agreement. (2) Invoices shall be submitted by Contractor for payment on a monthly basis. b. Invoices: Upon delivery and receipt of invoice, the City shall pay thirty (3 0) days after date of invoice and upon the approval of services by the Police Administrative Manager or designee. Monthly invoices, submitted in duplicate, shall be mailed to: 25D -3 Robert Carroll Police Administrative Manager Santa Ana Police Department 60 Civic Center Plaza P.O. Box 1981 Santa Ana, CA 92702 3. TERM This term of this Agreement shall be for a two year (2) year period, commencing on the first date written above and terminating on September 30, 2016, unless terminated earlier in accordance with Section 12 or 13, below. C INDEPENDENT CONTRACTOR. Contractor shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer- employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Contractor shall pay all salaries and wages, omployer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. S. INSURANCE Prior to undertaking performance of work under this Agreement, Contractor shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Commercial General Liability Insurance. Contractor shall maintain commercial general liability insurance naming the City, its officers, employees, agents, volunteers and representatives as additional insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising cut of Contractor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. 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 $1,000,000 per occurrence. Contractor shall supply City with a rally executed additional insured endorsement in substantially the form attached hereto as Exhibit C upon execution of this Agreement and shall be approved in form by the City Attorney. b, Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Contractor, if Contractor has any employees, is required to be insured against liability for worker's compensation or to undertako self- insurance, Prior to commencing 25D -4 the performance of the work under this Agreement, Contractor agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accldent. c. The following requirements apply to the insurance to be provided by Contractor pursuant to this section: (i) Contractor shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement, (ii) Certificates of insurance shall be famished to the City upon execution of this Agreement and shall be approved in form by the City Attorney, (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (3 0) days prior written notice to the City. d. If Contractor fails or refuses to produce or maintain the insurance required by this section or fails or refuses to famish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not effect Contractor's right to be paid for its time and materials expended prior to notification of termination, Contractor waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 6. INDEMNIFICATION Contractor agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, Contractors, special counsel, and representatives from liability: (i) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including hcalth, and claims for property damage, which may arise from the direct or indirect operations of the Contractor or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section I of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Contractor further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, J udicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement, City may make all reasonable decisions with respect to its representation in any legal proceeding. 25D -5 7. CONFIDENTIALITY If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Contractor agrees that it shall not use or disclose such information except in the performance of this Agreement, and fiuther agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublio information. Confidential information includes not only written infomnation, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no -fault of the Contractor disclosed in a publicly available source; (c) is in rightful possession of the Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of taw; or (e) is independently developed by the Contractor without reference to information disclosed by the City, 8. CONFLICT OF INTEREST CLAUSE Contractor covenants that it presently has no interests and shall not acquire any interests, direct or indirect, which would conflict in any manner with performance of services specified Guider this Agreement. No persons having such interest shall be employed by or associated with Contractor. 9. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communi cation in the manner provided in this Section, to the following persons; To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 Fax number (714) 647 -6956 25D -6 With courtesy copies to, M Chief of Police Santa Ana Police, Department City of Santa Ana 60 Civic Center Plaza (M -97) P.O. Box 1988 Santa Ana, California 92702 Fax number (714) 245 -8007 City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) p,0. Box 1988 Santa Ana, California 92702 Fax number (714) 647 -6515 To Contractor: Santa Fe Building Maintenance 15644 Palomino Drive Chino Hills, California 91709 Fax number (909) 606 -6469 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. if sent by mail, any communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States snail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by tolefaesitnile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For prurposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 10. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of"this Agreement and any attachments hereto including the Request for Proposal referenced herein, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor, The parties agree that any terms or conditions of any purchase order or other instrument that are inoonsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor nor the City. Each party to this Agreement aclarowledges that no representations, induocments, promises or agreements, orally 25D -7 or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 11. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. 12, TERMINATION FOR CAUSE a. If Contractor at any time refuses or neglects to prosecute its services in a timely fashion or in accordance with the Scope of Services and provisions of the RFP incorporated by reference herein, or is adjudicated a bankrupt, or commits any act of insolvency, or makes an assigmnont for the benefit of creditors without the City's consent, or fails to make prompt ! payment to persons furnishing labor, equipment, materials or services, or fails in any respect to properly and diligently prosecute its services, or otherwise fails to perform fully any and all of the agreements herein contained, Contractor shall be in default. b. If Contractor fails to cure the default within seven (7) days after written notice thereof, the City may, at its sole option, talce possession of any documents and data or other materials (in paper and electronic form) prepared or used by Contractor in connection with the Agreement and (1) provide any such work, labor, materials or services as may be necessary to overcome the default and deduct the cost thereof from any money then due or thereafter to become due to Contractor under this Agreement; or (2) terminate Contractor's right to proceed with this Agreement. C. in the event the City elects to terminate, the City shall have the right to immediate possession of all documents and data and work in progress prepared by Contractor, whether located at the Project, at Contractor's place of business, or at the offices of a sub - Contractor, and may employ any other person or persons to finish the Services and provide the materials therefor. In case of such default termination, Contractor shall not be entitled to receive any further payment under this Agreement until the Agreement is completely finished. At that time, if the expenses incurred by the City in obtaining the services necessary to complete the scope of services under the Agreement exceed such unpaid balance, then Contractor shall promptly pay to the City the, amount by which such expense exceeds the unpaid balance. The expense referred to in the previous sentence shall include expenses incurred by the City in causing the Services called for under this Agreement to be provided by others, for attorneys' fees, and for any costs or damages sustained by the City by reason of Contractor's default or defective work, 25D -8 13. TERMINATION FOR CONVENIENCE a. In addition to the foregoing right to terminate for default set forth in section 12, the City reserves the absolute right to terminate this Agreement without cause, upon 30 days written notice to Contractor, In the event of termination without cause, Contractor shall be entitled to payment in an amount which shall be calculated as follows: (1) payment for Services then satisfactorily completed and accepted by the City, phis (2) payment for Additional Work satisfactorily completed and accepted by the City, plus (3) reimbursable expenses actually incurred by Contractor, as approved by the City. The amount of any payment made to Contractor prior to the date of termination of this Agreement shall be deduced from the amounts described in (1), (2), and (3) above, Contractor shall not be entitled to any claim or lien against the City or the Project for any additional compensation or damages in the event of such termination and payment. b. If this Agreement is terminated by the City for default and it is later determined that the default termination was wrongful, such termination automatically shall be converted to and treated as a termination for convenience under this Section and Contractor shall be entitled to receive only the amounts payable hereunder in the event of a termination for convenience, C. As a condition of such payment, the Police Chief may require Consultant to deliver to the City all work product completed as of such elate, and in such case such worlc product shall be tine property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate, d. Payment need not be made for work which fails to moot the standard of performance specified, in the Recitals of this Agreement, 14. DISCRIMINATION Contractor shall not discriminate because of race, color, creod, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Contractor affrrxns that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 15. ,ILTRISDICTJON - VENUE This Agreement and all questions relating to its validity, interpretation, performance, and enforcement shall be governed and construed in accordance with the laws of the State of California. This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California, Both parties further agree tliat Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 25D -9 16, COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS Contractor shall carry out all services pursuant to this Agreement in substantial conformity with all applicable laws, ordinances, statutes, codes, rules, regulations, orders, and decrees of the United States, the State of California, the County of Orange, the City, and of any other political subdivision, agency, or instrumentality exercising jurisdiction over the City, including all applicable federal, state, and local occupation, safety and health laws, rules, regulations and standards, applicable state and labor standards, prevailing wage requirements, the City zoning and development standards, City permits and approvals, building, plumbing, mechanical and electrical codes, as they may apply, and all other provisions of the City and its Municipal Code (as they may apply), and all applicable disabled and handicapped access requirements, including, without the limitation, the Americans With Disability Act, 42 U.S.C. § 12101 et seq,, Government Code § 4450 et seq., and the Unruh Civil Rights Act, Civil Code § 51 etseq, Contractor shall comply with Labor Code Sections 1060 -1064, the "Displaced Janitor Opportunity Act." Among other things, this Act states that "a successor ]janitorial services] contractor or successor subcontractor shall retain, for a 60 -day transition employment period, employees who have been employed by the terminated contractor or its subcontractors, if any, for the preceding four months or longer at the site or sites covered by the successor service contract unless the successor contractor or successor subcontractor has reasonable and substantiated cause not to hire a particular employee based on that employee's performance or conduct while working under the terminated contract." Contractor is advised to review the Act in its entirety. 17, MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature bereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify 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, iu fact, held by the signatory or is withdrawn. 25D -10 b, All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement, IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written, ATTEST: MARIA HUIZAR Clerk of the Council APPROVED AS TO FORM: SON'IA R. CARVALI -I0 City Attorney By: Laura A. Rossini Senior Assistant City Attorney RECOMMENDED FOR APPROVAL: CARLOSROJAS Chief of Police CITY OF SANTA ANA DAVID CAVAZOS City Manager CONTRACTOR SANTA FE BUILDING MAINTENANCE By: Irinco Nunez General Manager 25D -11 EXHIBIT" A to 25D -12 UP 13.015 4,0 MOM QF,NEIi L oo"ITIONS 4,1 h111t pf Content; 'l'ho pkaposar's on�slte Supervisor er (aslgnaa to be the prfingry palm of contact wittt the Santa Ana Poiica Admhds'Xcu100 Manager or daaigiloo, X wlq the$ when the ptopasows supervl &nr is not an -gtta' the point of contact shall be the Ptaposar's Agreement Adminlstrator, Via on -site 8uparvlgor and Agreomtant Adminls4'atae shall be capable of communicating the Englisla lengnaga (read and undoratnad), to faoilitato it clan ttndarala itrtg Wwoan the Mica Adntnlstxattan Manager, or deslgnoo. Tba Agreement Administratot, or do dgnoo, shali bo nva>lahla via cell phone doting the Propnsat's normal baslnoga hoots, The Proposer shall pvovtda sit emcrgancy tolepbone number that w1tX bo amswarad 24 hours a day, $65 days a year. The Santa Ana Police A.dwinlstrotlon Manager or dogignaa ShQ have authvrlty to cilroct the Propoaw's perPottnanca in matters routing to pollay, IhfOrmatlon and ptocaduraX rautuitamonts, t ha Pollee Adt ziniat adan NSanagar slaall also mnnitar the Agreement and the porfatmaanee of Cho Propogar, The Prapcsar'a Agx'aamant Adrnlnlstmidon $ogti to tosponalble Car man4gaman0 and coordination of the agreement and staall act as the adminlatrative polnC of contact with the City, 4,2 Cvaaintanagpq hegnremanrs, Tiro otoging of oil faellity areas, ftamishings, fixtures &net Nuipment ooverod by this Rptp abed be performed In a sate, ooutplote, and eahodaled manner Cot Whlah each item and saeaee was dosignad, Th i work &hall Include provantivo and eorraodvo malmanaace, oloaning, Inspection, and notlficatlan, All services shall bo porfornurd in m wanner that is minimally cUSrttptive to normal factIlty oparaYdvns, The Police Adrainistration Manager ghali approve any shutdown of areas or syatmms for, nidatonaftoo in advance, The City rasarvas Cho, sight• to look services from other resources if the proposer does not respond In the time t'imm dosorthad in tho PX ? to meet any maintananco work needed. The cost of snob attornpto sorvMoos sisal( be doduotod from dra City's payment w the proposer, 4,9 W ork Priorieiag; Ta portotntng the work, the proposor shalt oomidor in priority ardor, the rollowing items. 1 • oeeupant sakoty, wltiola is the safety of staff, visitors, inmates, and other parsons at the qua, 2, Nlalxuatranaa to be patformerl In a high quailty mamnr to pravlde a clean and and banithy woritplaco all the time, Rroposar's funnishad• oquiptnent shall he in good warking condition at all times. Propoaox's firrnlshed aloaning chemicals, suppllos, carts, and equipment shall be on-band ar all limas to moot the naafis of the cleaning start and must be a'ppxovod by the Pvltaa Adtninigkeation Manager, and must be quality ocmtnorutal branda, 2501-13 AFP t 3 -W 44 Mali$h �c ty Ciedu{tenxents; 'The Fropasac shall kuttilsh ldantirlable un"ornae and ldontlffoatien cards &ar their emplayeaa, Employees are required to wear and C.i), cards, ht plain view, whanover Wetting on.sito, The proposer, upon the Palace AdminlstrpGton Manager, $iaall remove From the promises who, in hhp opinion aF rho Pol ca baprrrtmani, hays exhibited Inxproper ' arc eat perParmirtg rtes work assigmad, Braptoytos shall be roqutmd to have a oaard check and ba approved by the Pnlioe Department's Porsonnsl Division p c per, This also includes say "on Dell staff" used by the proposer, 415 aped, a 616outtv ag irqu s dntsI rho Following eeeurity cequlremsnts shall be in effect at nil times, Fallure to abide by any of U$ose Items by any omplayco may result In removal %rpm the Facility and or criminal cinargoa, t, r ackaround iuvoattaa�i All Proposer"s personnat Who wort h or visitlinspact (unosoortod) the faoillty shall suaaesslully oomplote a background iavestigadon oondnatad by t%o Santa Me Police Department before boginnias work, At toast forty, rlye (45) days prior to au employee beglnning work, the Proposer $Pratl submit the rollowing Information to the police Department Porsc nnel Division, First Name, middle nnms, last name Date or birth Cturwnt residonoo addm8s Photocopy of valid gavorament issued pbota idontificadon Photocopy of valid Sooutl,Recurity Card Proof of UA citizenship OT legal work status Tho Proposer she insuco the employee oandtdato meets with the designated Pollee Department Porsoonol Divlalou baolcg'ound Investigator in a timely manner so the background proaoss can begin, The Proposer shall ho notified when the background has been Completed, thug oloodng the oraployoo to begin work am ^elto, The Ptoposor shall be notified or any amptoyoc$ that are rofnsed for omptoytnent within the facility, a, ao''t fly,- During their first waelc of worklag on�sko, the Petite Acltnitriattation Manager shall give each omployoo a copy of the Same Ann Police ir'guflity $oourity Rulos (Attaollwant 1), which the omploysa will road and sign, This form shall be maintained by the Property AdmIaiWftV% Manager, All tools, sgetitment, parts and other, itotruv used by the Proposer at the dal.l FaaWty shall, at all furies, remain In the dir'act pv$sassicn and aonttel of the FLoposer's employees, Failure to adhere to these requlratncnts, such as toavictg a tool In an inmate accessible gran, shall be eansideted a breach of security, This slrati cosult In subsequent action by tho Potico Department, up to and lnoludtng the removal of the luvdved peoposer's employee ream too facility and /or arlrulnal obarges, 5, rte ljy_A mss. The PoAoo Depaiunent Front desk sVaCf shalt issae keys gold access card to each on .site ozrtptoyoe at the start of egth assigned work shift, No Issued keys or 25D -14 i I UP IM1S assess cards shall be removed from the promises during the work clay, Bosh ompIoyom shat( roNru their issued Icoys and access card Immediately at the oad of Clsslr assigned wor(c altlft to the Police 17opRgmsnt Proat dosk staff, The Proposer's employees shall adoquaCely secure the keys on their person while on, We Items that became lost, missing, or stolen shall be Lmmedlateiy reported by the Proposer'$ employees or Suporvlsor to tbe, Police Adndalstratioll Manager, The Proposer shail reimburse tbo Pollee Department for direct and incitsoot 00$10 associated with re- keying any buildings or portions of buildings when the police Department determines that a bromb oC seourily is a result of lost, misplaood, or stolen ltdys lssecad to the Pcopossr's omployeas, 4. palljptovae PgWtia. From public parldug is almost non-existent saxrounding the police facility, 'tbore is a stadlum parking structure across from the police faculty, whioh ahazgos an hourly, dally, oz monthly Pea for partdng, Proposer strap ba reapoasiblo fog providing parklug for tholr osnployoos and paying any necessary deed, There Is no on,slto pollcc padking available. 5. Now lmployem Anlform� will be provided by the Proposer, 113011 lag shirts and must projoot a profassioaal appearance. 5,0 SCOM OFSERVIC95r ZQL1IPMENT & SUPk'g.PES 5.1 pmant g ,s lshed by Pcogosty The Proposer shall provide all olaaning appliances, tools, (Le' VaanUM8, mops, carts, floor polishers, laddors, signs, eta.) and all oloantng ehesnleuls, urinal screens anal Cakes, rags, sponges, vacuum bags, treah can liners, soap dispensed cleaners, sanitary napkins, and talaodlanoous supplies. Ali supplies will be ozderod and dollverod br a timely Meonor. Trash ow linara shall ba blank ar ulear In color, To Imura propoe s trongth to avoid testes and spills, liners shall be a tninlrnun cvf 1,n mA thick for 94 gallon or less geoaptaclas and A minimum of 1,25 call Wok for,llners 40 gallons or more, Carpet warranty spoculoations, marble and granito wacrwrty spooifiMdons, and ncoupant ho%M mandate uro following vacuum, floor sornbber, ortd carpet osteaator equipment Speaifloadone (no ofthutioas), All MPA diltec roplaeensonts, vamam bags, aocr bushes and pad holders, sorubblng and polishing bonaeta, end associated items, altaehmonts and solvents/oleanors, shall bo durnlsbod by the Proposer- 1. ap Jr l ygeuu q; Vacuum Cleaner Pacer 1.12 TJB with HBPA VICration or sim lar 2, ApVroyed canister vacuum; Mighty Cauiator Valle or alnallar 3. Ap rroovad wiide area vacuums; SUsk Advance Carpotrlavor 28 or similar to 25D -15 PIFP 13d0t3 a, A total of eight (8) new upright YAODUme, three (9) new osxdster vacuums and three (3) new wide arse vacauoa shall be supplied by the Prnpmev for tha on -04a ekaRi' 0 ass pn a Full time beak, the day the i;titial oonhact begins, Four (4) new upright vacuums, one (1) now canister vacuum, and one (1) now wWo area vacuum shall also be supplied by the ?0t 080 ak the start of each subaaquont contract renewal year, Carpet Bxrraotor; one (1) se f contained hot water extractor shall be, sapphed and used for any oarpot olsanlq, which has a miuhrnlyd of 100 psi Water pramns though the in)omlon nuzzles, a taal'typa soft brdsrlod agltatiaa brush and a water IIA of l3(? Inches, Malys and model shall be submitted bofuro the fnittal oosttmot bogina, by the Pxopasar for approval by the Pollee AdminWradoa Manager, but must meet Iho above speaifloaCions, 5, A elomatio Walls Behind Floor $ambber; Ono (L) selfMacnturted autornatlo walk behind Moor sarnbbar shall be supplied by the Proposer for the on.slta staff to use on a full time basis, (to day the initial contract bsglns, a, ' MaUsic Advance Comertaruatte 2d• or similar 5.2 ]tarns Pairilmod by Ctty: The ordy Items furnished by the City shall be the supply of paper towels, folios paper, anti tollat saes onvera. Items shall be boated oil the loading clack. 5.3 0 7Cr n hgleq 5,3,1 bniiy Clodfryg acid lilsin@aoti g q 7r1nk1 r F ounfp nc an sal s: lieutove all obvlons loll, streaks, bmtdges, ato„ from the hardware, lnatu&l; the spouts acid drain, Altar cloaaltag and dlslafeotiag, the entire dtlnking fountain, andlor sink (sin:¢ tofors to all sinks In coffee rooms or lounges too shall be ON of str04% stales, spots, smudges, scale, and other removable soil, CH is not to be used to polish metal fixtures, If nasdod, lhna away or a similar produot shell be used to 44naka water bafld�up, III Ds ilV QlannIng and DlGln�acdna of Wash 13 lns 'x'otlota tl'�Inuls Ord 5hoyrere: Applya germioldal dotorgom aolWlon to all surfaces of wash basin, tollsts, toilet seat WASH, pipos, urinuls, showers and adJaaconr surfacos, Dry all metal surfaces of faucets, handles, valves, etc, 8hoaver- -wall, floor and asap- sotsmvmold- and- ttatld ©w- shall- ba- rentoucd dal y and drain screens alarmed oPhair and Ent, Oil la not to be shod to polish inelul. fixtures• 5.3.3 0 Rat lm d•, Remove molaturn, wot or dry soil, and any dobda from osrpe W entrance macs, Bnsuro mats ate properly posltimod on the floor, 25D -16 PIR 13.00 5, 3,4, L atty Cleanlna aA tst o ca! : Clean all floor drains and remove corrosion and tarelsh, 5,3,5 pailsnfns of CarusES Remavo visible and kdddon soil cad debris from the carpet su asao and from w1tF fn the datpat piNo, Chairs, trash raoeptaclw, power cards, boxes, aqd other such lGame eha11 bo tilt ®d or maned w1 cn naoosgary, ,4peoiad attonti= shall bm paid to corners cad slang walla, under and between famituro, to lasts oatpet Is fhorauglily cleaned !n ali cross, ".Cis a4rpat shall ba No of all visible Soil and liter, For Weiss roduarlan, which l,i aesontial to d a 9l l eatorgoncy polloo dlapausdt aparadon, the bu It -in vaaututa syatam supplf ad by the pallao Dap4rtmAnt will be used when vac mining dla Pollee Cammunloadans alo4, $,U Dally Deana lN9OPI a 0110114albstdd FinnrS 6r. Wamkly M",hlne 9rruh6ine of S CnnO and other such Rains shaU be moved as asaossacy cad roturtiad to tlaoir apprnpriato looatlon, All aeoessiblo areas of the Not shall be damp mopped, Caro shall be taken tc proved splash and rnap rumica from being visible on furniture legs, doors, eta., "Caution —VJot•FYopr" signs shall be pladad so as to provide suftiom safety measures, After a Floor has been damp mopped, it shell laavo no peddles water and be ?me of soil, stains, dobrds, streaks, and swim! marim All wet floor signs shall be rauaoved and pun away after the floor surfaas 1s dry, 5,3,7 Dally daA ralinp of Tp #lake &lg Remova scum, m[nocal deposits, rust stains, old, 5,3,8 17a11i! I isint'eatlnlr of Pnrnhurn. Pixtirrm. Nvatla. &. Parrlrtnnm within a"airnnms u rnroarn m7a r sue; pu,-np wipe and disltaftt 411 aou�woW hard surfaeeS of tlualture, flxturas, walls, partiticns, doors, and lookmrs, Spcagal calm shall be taken to insure Chase sarP4aari arc not sofatohed, damMod, or stain, 5.3.9 1?011y Vryrutuming q a ab 4a n l[ a WjIi : Romovs all duet, lint halt, Uttev, and dry soli Prom all fabric 6urraops of ehalrs, 00nohea, Work station pardtlone, and other furniture With a Fabric coveting, 53, l()P i,Ny Rltatin vF Leek r Paay; gust locker taps lit dressing areas, storgo ruonas, looker rooms sad malntecsnnae areas, 5,3,11S3ally 7uslinu of ltulldtns Su&MI Romovo all dust, lint, litter, dry soil, etc„ from the strrtaoo oP ledges, window mill, tockor tops, and Rice oxtdaguiahors, This &hall also be done for ooMputor tops, wall and door fVmm and CIS, light switchos, pictures, partitions, rails, and other typo& oV fixture, and stuldooe Wblob arm not aauaidorod to be furniture anrfaaea. This also applies to speolalty for upeolalty equlph ong sUeh as Lost equipment, oompaterS, typowrlters, Cai0alatnra, eta,, Wlatatt are located anywhere between the floor aiuisao, up to nlm (9) foot In height, Dusting shall be a000mplished by the removal of Soil frOtrl the area, net by moving it Pram one sur£aae to another, This includes thm 01e4ning of the atrium wood ledges, Dusting shall be completed using store dusting Wiped, 12 25D -17 up 13.0!5 53,12 tv Emptying of all Trash and ugh Rocegtaolae, All waste ballots, olgaratto ash receptacles and other trash eontalhars shall be omptisd and rotarnad to their it"A location. Boxer, cans, papers, and other containers mark'od "T'RASN" (or sre abviously trash) shall ba removed, All waste from suoh reoeptaolss shall be removed from the area and omptlari Into a designated trash drsmpstor ar recoptaolo in suoh a manner as to provent the adjaeont area from b000vdaa Uttoxed by suoh trash , All recycle bottloa and piastlas will be ploked ups S'3,132gy QWrAj Clean : Removo eny found Utter and cloau uaslghtly sail from bulldtr;$, ClxCurea, walls, door Frames, and surfaces, ROMOve auy splllad llqulds or sonde, Romovd carpet staina, pick up abandoned lunoh=oa trays or utensils and deliver them to the lunchroom g 3, Iq y �g p of nv may ; All Furalturo moved by the Praposar's omPloytes duting tho porfarmanoe of sorvlaas shall be returuod W its aPprOPdata locatlou, All items such as trash taeeptaolea or desk ahalrs shall be moved so aloaning can take place undomoath tttom and than they sheli be rowmed to their sppxoprinCo!neat an, g,3,1glJ�o.P Dlsneusara; Qhock and refill each tatIot Paper dlepenaor, soap dispenser, paper towo[ dspansar, toilet seat acvar dispenser, and Farrdxrina by ieno product dlsPansar, Tba suppUes shell be placed in the dispensers in noaordanco with the dreatiOna nF the supply and dispenser uuuruEaaturprs, Soap dspensers and adjacent surfaces shall be wiped Co rom.ovs splliaga. Care shall bo taiten net tO dttra a$o, dent or head the dis,ponser. S,3,16f y oval or 5.1 Chair Upholsto Nc PanwG nr a abrio t i y,, Clean all stains as quickly as they are found, so as nal to MuOw them to set Into 66 febrio, ]f the srukt is a coffee spill, use product similar to YnterFaea coffee Braakar (supplled by praposar) and trllow tt anuCacturar'a rewocraandod gooedurm, Do %exp; na t ar�lot Simply spray affected area. 9.3.17f7uily Raolaaement of Traskl,6ourcle T�ing&@� All soiled or torn trash receptacle liners shall be placed with a now trash reeeptaelo Itaor The finer shall to raplaeed in such a rnarurar as to praasnt a uout unleoem appdavuloe, 5,3,19a 1 Sect CluanI.na er Iiuii tna Surfacay,, rn re snt T xtur s,; Remove atnudgos, ng3rPrints, Mutts, streaks, tspo, ot0, Prom the surfaaa of ledger, windowu, pa Citioo glees, window sills, Pho axtingu!sltors, counter tabs, waifs, doors, doer framer and sllla, pictures, parthtons, rolls, and other typo or 4lxturos and surfaces rids htclndes nil ltetns Cram Pia firer atrrl'ace to I, l Faot in ho!ght, Cue ahnU ba falcon eat to pernxanently r uk, sovawh % dkQlor the Wtlrfaao9. 5,3,19 1 Clsaed ssh R^ecntaclasf Remove norrparmanaut gwlu and soli ft'ern rho lataripr and exterior of trash r=yWolu. 13 25D -18 i 5,9 93,21 !t,'vP 13019 W rrmfm�e,.y�.r ; "UMOYe coowaea rrom overtldad MUM and lights Amed to the bakldins matryWay uxoss, No looludos cleaning the actertor oP glass acrd meta] door's, dagt ltu'nsholds and hardware, ,Swoep the two M f x h loot patios and wipe down their handrslls and ralllags. Sweep or hose clown the paves area outside the Lomrrranity Room autranae and wipe dawq the bmdWs Waldo the FD lobby, 1s11lobby and Community CZnom, Cxet OV0 any littdr, aigarotGa 6uk , or bird droppings in these areas too, r•- �•�W�• �+oaaG sum ataoa or a sueroaucung betiding entry door glass and ontry doors far a uniform appoUPIae free of all sanudgss, kingerprints, 34boa, akraalca, fiat, oto. Remove any papm• and tape, Clean all mirrors in resttoom, Iackor rooms, and StrIM center in the same manner as above, Spot olaan offlaa and work, station glass as needed an a dally basis, Cleans glass entrance doors to Police Nallity and ,sail twice daily, 33'22 & 4Z 1 Clean inside and ootaido of all n4oroweva ovaas, romoviGag srurabs and apolle, . tsmil rocagtaales and smoking urns In patio, baloony areas, and parking areas, Cloaca raaeptaoiea as needed oaoh thus. This Inciudos reoaptanlas that may be placed. octsldn any entry doors, suoh ae.04teld, k1a0 Aggt of the p0400 dapartmmc, JAU and poilco norom ullty warn, employee north onteanee Vaal, 9,3,34 Daily Broakdowa of Cardbon d Banos; Cardboard oartons ace to ba anokoo clown Piet and pus Into the proper trash oontaider, including any boxes on the loading dock, 3,3,25 bails 9nnt Clcanina nF l etiinvat ,Remove any collet paper, eobwabs, dust buildup and other dobrds Prom the oeiling, eeA ng vents and ceiling light fixture holders, 5,3,2b) of J „fln4PA s: Remove oil dirt, Ant, arer, cob webs, dry soil, eta, fmrr walls axed aeilinas, 9,3,2'777g11y claujn& of Wood Rorainir ; Care shall be Callan not to soratch or nsark wood spitPaoes, while Inmriq that they havo bean thot'ouShly clamed. 3.3,29fiallv r osnina oP Bitnea� Conher ?wxgro so Sauiomortt Wipe down ail motal to polfslt oft ahoy Marks and Mat stales. Cisan upholstery and wipe off nhcoad and side rails of the trOedmills, as well as the oonsoloa on ail troadmals and athcrrnachittos to remove sweat and stains, Clean taps of any rubber orals and unbar ceeix troadmOl by axkra vaouurning 40 the dual and Week motor powder, 5,3,2J ally 5aPoty end Fracautlonary Maaa yep; Soonre work area and oqulpment to prevent pasaage by the general pubilo and City staff, and denote it as such, wbr's area and V 25D -19 RPP 0.015 ec)uip=om shall stay undor that oosadikon aortal Work Is eompiato, egadpatant is vacated, and passage is saes by the geaoml public and Polloo Dopartmont emplayeas The proper gaanAty and type of safety signs, such as "caution wet floor shall be placed by the propoder'a etnpioysos every temp conditions exist that warrant such sigma, dlgns are to be piokad ap and stored It the propor Janitor zoom oaoo the oend Qn ao longer exists to warrant such algae, 13130 le 2 (pee refrigerator - on ritoadays, one refrigerator, - on Fridays), Cloan Interior and exterior of roPslgerator snrfacos. Diaposo Of all food and temporary aortfahsers, Do not dispose of permanent aoutattaars, suph " those made of cuss or metal,' 'Empty oontente of permanent oontalnets, wash there god hove the permanent contalaars in the desiguatod ]unohroom area. 5.331 Sprav ouCFL a of H@ Glean and restore a Dolton gloss sad protoodve finish to rasillsnC file or todazzo ftooza that ors knished with a floor finish, All Chairs, trash receptacles, eta, shell be tilted or moved wbos naauasary to spray buff undornoadt, Tbe ontin fiaor shah have s uniform, gIossy appouraaco, free of scuff roat,•1rs, beet merits, and other stains, and shall be toznovod from bmabcarde, funattaro, trash roaeptaclas, eta, 8,3,32 Wcaldv DueCina of H tnl s and br ar ; Clean all Wads, shades, and draperies Care shall be take not to spread dual into the *, 5.3,33 Clean all FIVAC vpata sad area lmmodtmoly surrounding theta, Dust all atrium at tho glass /wood roiling areas sad at the atrium stalrs, Bust lunohtown drywall Care shall be taken not to spread dusrinto the air. 5,1 4 Weekly ktgh Ruginu; Remove dust, cobwebs, oily fllm, eta, from all fixtures and sarfaoca above l'i Feat from the top of tho floor, 'rifle inoiudm lights, grills, light fixttues, pipes, aprlol4er system, oabies, ledges, wawa, atrivan wood end ledges, oellings, Yeats, oto. Caine sball be taksa not to spread dust Into the air, Dust: free products shag be used such as tatero'fiber dusting rags. 5,3,35 c bing lt na +t ar 1 Deep elenrdng to be parforasxed in a mannov to remove boavy stains, mildew and mineral deposits from tho surflace, After scrubbing, the satdsaas shad be rinsad thorouably to remove all remaialag aleuuing solution. Attar olostilttg, tbs floor gad grout shaft buva a unlfoetn appearaneo Ace ikons filet, miaorals, deposits, corrosion atatnv, etc. Areas not.aoWsslble with the buffer sb.all be mangally scrubbed with an abrasive pact. Apply aeaior to tilu areas, after maohlna scrubbing 0 rapt in shower areas, i,3,3ApalartaslyRo -y n Via f Ti o lxioore; If theta two black marks, marlca from chair antics, ur Imbedded sell In the finish, they shall be removad before ro- waxing, A uniform cast of approved ficoe fialah shall be applied. After the Web has dxied, ae apposraacs eh,all be uni.Porut witty fro visihle sttoas ma*s, swirls, oto, Remove all otripping or 15 25D -20 RY+P 13.015 detogont solution from the baseboards, door, or athar uorAcor surfaces gad It adf agent opacee, 5'3'370uartorly C&MM Clegnln$: Caepst oloaning Is usually done on a guarteety bash, coordinated through tbo Foiloo AdmintstrAdon Manager to detormino exaot clogging lacatdons, Cara sbau be ratan to hagttra the, caqet is thoroughly cleaned and dry ,prior to opening the van ap to toot trakilo, 5,3,3dt,2ijody of yjhLe 8toraao Laolcors, Wipe down the outside lookers n4 any dust, dirt, or donne, Care shall be taken not to spray any 65441118 8011W09 or water directly Into the lookers thmogh the open slota, 513,39 io and Refinish "Pilo Ftcom fag needodl; All 40R,flxed ftlanishing3 311011 as tables, chairs, desk's, trash receptacles, storage oontainets shall bo removed prior to stripping uotma exempted by the City, Remove all removable Marks, 11001 marks, s0u1Ftngrk0, tugs stains, gum and other typos of stains gad soil, Ntentel aotabbing devices shall be used In areas Inacoessible to the dear machine. 514031�Axagg) Window Cleaning; Cotarplatoty romave dust, cobwebs, srnpdgas, tap041 oil dim and other other types of Sall fhom all intoelor windows attd partltloas, komovo drip end splash marks from all adjacent surfaces. Glass in open 3pa00 and 02LOO partitions, entry glass doors and entry aroa glass pan-01.8 we WoludOd In this M100t (Inoluding poiioc facility & Jail .facility). Tho two ('g) atalutn skytigbu Ln the coiling of OW pollcc taetlity, pomrnaalty Room and'Lunahroom sky4ghts, and the extortor of oho facility wlndo+rrs arc no( tnctudod in dais project. 53,41 The entire pollee lattahroom, inaluding cagbi0r, testtooms, eating areas, vending machines, hallway, glass and painted doors, and mr.- Ismawrs are all looiudod in this contract„ Arena should be cleaned so groasa, dirt, food, partiolos, trash and other Lttcr aro thorougdly olennod and removed from surfaces. Thts area needs to ongalu stealthy and oicau enviroarnent on a dally'basis, toad, wash down area Into ftgr dvaln, Pick up 5,3.41 is r s; As neadad closet /mop the four eelrlent stalrwaAs located at each ooroor of the Pig Otullity, 5,4 olfia areas to be. Ma WALd 9,4,1 it (on a dally basis) Fit %Flom- ;Wdloal Mom- *1112, 1HI14and 11-1113 Central Con trot 'Room and 1 employee regtrocatn Kltohon ROattoom 1B find IC Booking (emp'loyoe area only) 1,6 25D -21 POP 13.015 Hooking area restrooma 10 and 1R Attorney vlslrgtlon Watch Cotnrnander's ofl5ao axtorior Ja115 allyporl Second P+loor• All a'fJall lobby and 2 pgbllo rostrooms Bxwrior entranoo sroa Room #2144 Jail Administrator Room #2143 All Manager Room #2149 Jail Manager loll B' iofts/rall nail room and 1 atnployve h4wny rost, onm All of Reaorda and Ad4nistcatlou areas lacluding 2 rostrooms, hallways and COMO car area, oonfemnoo room Visitor hail way Sallyorr hall and reloaso v®atibule (exterior and lntatior) Third Floor, Medical Or'ftcos -Room 03Hi08, 3Hi09 Cltlzea visitarloo u%, inoladlag vlsttor olantor Staff Restroom 3A Room #39110 .Fourth Floor. Medical & Dental ©ffloes� Room #4B,108, 49109 Cll'izen vlsltatlon areas Stuff toquoom 4A I I 5,4 2 '&Ol „ litq. day use a ng i F1rstNot- CPQM, #11131(.9Offioa Roum #1159 Building m4atonnnco Ofrwa on Loading Do& Roll-Call Room Room #1214 Property & Facllatteo 1?lvi8lon Conaixaapder' lvien'a end Wornan'a looker rooms, rest roams West moo's and women's rastroom Second Floor, Pia Tabby Room #2136 Parrot Bureau Corruraaoder Room #2112 Eros lnformaltlorl 00toor Room #212217iatt'iot Commandee Room #2124 District Canvnaador Room {#2125 Plstriot Cornmandor Room #2128 Dlatrlot Commander ltoom1301'rafaseianal,Standards Commander Room 1#217'! T20fic Divialon Commander Room 112172 Records Manager Roorn #2161 Statlou Supervisor Room #2163 Watch Coiumandor Sgt c7Cfl0e Area 17 25D -22 I RR 41.015 WW mot's and WQMOn'9 ros{roorn Lobby men's and womm's wo ooim Ltinola Boom Report Room IRgilway boiwoeu report room andRaoord's afflasr counter Reoords Evidonoe offloo wo ad viow0.a� room Third Pickor, Room in 164 District fuvestlgaUions Dtvislon CoraroOder Room ##3213>nvesdgadana Bnt°oau Commander Room 01 367 CAP DdYWO Commander Spools,! Invastdgatdons Area West mea'a & wetnen'9 restwalm FoarthPloor. Room #4171 Chlof of hlfoe Area; ChlePs Offdco, 8c rastroom, eonferonoe roam and adminletratdve, clotdoal and copier arses, and lntelllgenoo Sergoatt's W10e Room #4164 Room #4166 P,00m#4167 Room #4165 Room #14160 Room #*4162 Room #4196 Room #4151 .Room #4157 CarnputorSmrvices momsor Roots iP4146 Plseat office area: file room, P'laoal Officer and employees Room #4131 Computor offdco Room NMI CrimeA414ysls Room #f4159 Fonotmol interview room Room #4116 Vackant Room #4119 Couuuundoadon Qtvdsdon Coinmanfler, 2 rostrrooms, brealt moat, 911 area Room #4224 Training Ddvlslon Commencer Room #4227 Video trainiq area, fouv (4) roovna Room #4212 Ddvintf slnaulator room Room #4244 Aron: sovon (7) PraCessionnl 9Wldnrde offices, oonfarenco more), fife roam arad rocoption area 5,4,3 Pcyllco b7acdAty• high uaa areas First Mork- Ali of Mett's and Women's looker rooms, raatraems, showers, and sloop potters, Brune R. Carlson Fltnoss Canter god aorobios room NOWAY Room 01119 9011 -Call Room Moa's and Womon's wost side resWoom Is 25D -23 RFP 19.015 Rxterlar garlring lot and bath levels of parking atruotara 2 A,triume 90000d Floor' Roam #2114 Patrol acnCeranca rood nspaat lntarvlewr rooms and mavprint rooms Roamtlb143 ooplar room, Room, #2161 9tRam 5nporvlsor & juvomlg holdhag rooms Room 04162 Watoh Cortrmandoe's adlrtinlsPxatdva umbo Room #2163 Watoh Commortdor M41 nolwsoath patrol narpatod hallways All of PoNoo Rovords and Ftroat Polio* w0a Lobby and two 044,00ms GPFlou report Loom Ha4way to lanolar m Lunchroom and two roetroom Community R00111, 4pryor, and two matrooms Tblyd Floor- Moo's and Women's westside restrooms Fourth Root, All aF Communloadons Alvlaipa, including olilm bmalc xaam, two mtrQQM6, hallways, and TRU area, 344 Poldag E solllty. ggnaral a can All areas htgUtghtad on Plomplans, attached to thin RPP 5,5 atdtu $`tatl'ip4 t�egalmmants- The Proposer s'ball lnsuro the specified work hours shall be met at aU Omn A datallad stafflAg plan shall be, submitted as paxt of the psoposat. Ploase lnolucto plan 1'or Monday - Friday 94 also woOmnds and holidays, 9,6 C, %ref Wort ScP g t o (SOJect to OhR119e) 54 1 Jd F,,,g.d li ; AR Td l argue shall ho cleaned betwocn 6;00 AM v;d 10!30 PM, seven (7) days a wcek inohtding Holidays, 4.6,2 iueoClan 4 ; Shall be cleaned botwsga 6:00 AIM and 2;30 pm, ave (3) days a week (Monday[ dday), axoluding Holidays, 349 , boll bo oloanod batween 2,00 PM and I0;30 PM, atven (7) days a wrcok, tnelading Ho4daye 544 e Fu li' 'y- xeneta a ea9 h(�e nP�s r ; shall ba aloallod Flea (5) daye a wank (MloadaY.Friday) axclading Fioltdays, between 2;OO.Fm.. and 16;30 Plvi. 5.63 Cl ly CYalidayd; Shu11 bo Ulo dated daslgnatod by tho C',tty to bo City holldaya 19 25D -24 EXHIBIT B 10 25D -25 Swats. 9'o= a� c�.nirifiarrv�rrce C' omLeum ............ ......... .11,. i....... ,...,a.......... 1 Company A„ ubVmaw11 .., +r, a n n. + n,.e w.... ...... rn ...e2 Cnz parry at a ( twnae ............................. ................ 3.4 Proposed Staffing and Work Plan ....... ................... ...n., ... .I,..,,1...,., .... Sxts a Staff tloursrealcdavvn ........ ..........r......,...,,.,..,... 16 Teohn {ques for Qual# Control. ............................... 17.19 QualIV Control Plan for tie City of SwtA Ana police Depart ent, ,.,., 11 .11 ............................ 1940 Project GamumwaioaCfon ...... ..,.....,,.,. r ............... 21 1�N,aferenc s., .n ............................. ............. ......n,,,,..,.,..,.,.....,,.,, 22 -26 4 ®ur w. w INIae 9trIlmary Form (biduded on Soparute Envelope av reqrre ml on 0oflon 8,0 "T dca propasat' mf xP? ff .13.00) .................. . .. 27 »28 Statement afCompaay ]3wk p- mgid .... ............... . ...... ............... ,........29 Certifluticmo Non- biscriarrinatkou ............ .....n....,,,.,,,.,,,..,,,,..,. ,,..,.......36 tformvre ..... , ............................. 1. ...1....1 ;~ umeldDO cruto,atation,. ....... .,,I,,. 11,1...1 ...1..111 „1111 25D -27 s" Eva. foods, Purchasing Depa tnent M-16 City of Santa Ana to Civic Cesatar 1?la7a Satata Ana, CA 92702 PI'Md 3'mw arch Dear Eva,, Santa Fe BUILDING MAINTENANCM Aglit 12, 2013 Santa re for danitorlal Service for tha subjaot saraices and sctppliee indioated, with till kwwledge and cuadarstwa ding of the terms and conditions of the sorvioea to be perkbtrned� We doknowledge trio rec olpt' 6f all addenda as vw1l as havitg flan ability aaad 6=10, commitmoiat to 0aifa11 the reeluiremets specified [a the RFP #'13.6'15 Jaatitoriai M'aiutonance SeMoes Eat'i'hc City of Santa Aria P')doe Departmeart. In addition, wa cerdly that oux response is not made 1xr the intorest or oa behalf of any parson act rnrriaed thereiri; wo have not direotly itaducvd or scat cAM any peraoax to submit u' false of misleading proposal or to refrain £rom.,proposing. Located at 15644 Palomino Dr, C'hitno Villa, CA 9'1"70911 Santa lie Building lti46tonance is an I xdependantYy oawrxed and oporated company that, is certified as a.omall busIROO with tlaa State of Csaliforn[a, twlanta Fe BuIlAug Maanterra,noe. a.s bean pa ovial ng:laaitarial swr i I�. 1 r.', Santa, Fe Building Maintenanoo is a small, lndepeudontly wcmon owned buslaess,.whicb.provides prAssional oloaxdag services to vaiauspriva,tely owned, companies and goverrtrztgrst facilities. Slime its establishrttout its 1975 Santa. Fe Buildixta Maintenance has bean a choice provider of quality scmieos for govoitam rtt and private companies throughout Southern California for almost half a century, With its strong obnneodon to Southom Catifornia, Santa Fe currently services The Saxt Bamardino County Superior Courthouse for whleh has been providing services since 20Q1. aid other" pronaLneat oli®ats such as City of Vernon „,llangho Cttoamonpa 54peri'or Cnrutl ouso, Orange County Admini'strstivo Headquarters, City of lea QWnIA, amotag ethers, (F(oaaer�far to rte "ROPranee "saan'orr IfChta paekagefo.juve blArmadon) Santa Fe Building Mahtteuaatoe currently employs snore than Fro dodlesatccl; professional anpervisors and, maintenance •poracmel, who are capable of meeting the oilent,'s every demand and quality standards. Vnd%r• the cturent management,, lnnpvation and errtrepreftooriail leadcrshlp have allowed the company to grow Into a th 4viitg, gaallty sera rrtertar oa acrvico provider,. Lino of g'asrta Fe "s arr'ongt w is its In depth managemetat and aciministrativa support for its field botsowrel, '1 "his support has cre4lod a trainod loyal work£orco with the skills to,pro tdo quality, sorvlca that Is aooglAtont And dependable,. Sera Fe currently sets ices and prowidoo professional ogstodial sarvioes to Mn to than I million sgaare feet of govetOmerat faollitaes and of private ccrrruneco 1.a1; pffico space daily. $Wlta pal prides iws. self in that It has oqvor boon debad'ced foram a opattaot amd.that no contract has eveg been eaaacole¢i. due to tjre'lack of quality of its spxvsues, Tire company rrraaaxxgurk eat staM, with over �0 phis years of oornhined experience In the jm. itoriaal; I Alamo., SUN l+e BURding MFAktOU9UO0 Address.. 16644 Palomino Dr. Chino Mug, CA 91709 CrzOapMAyear, ' 1978 S`.'OrWe Areas, Son Bornudino County orange county ® Riversj& C=ounty " Log Actplos County " velitiaxwu County - "�"tA41GAU�' �/„0.R'ddPAlffi(MN CdRe12t S'oarav�sr Gmrnnioat Fa cultles c nsmordal Buildin " I"r^lyste 1•~osd NO "I " 'Indlraddal.L wflities 25D -30 aR r Special'Senke,, " Clestaing Service M Floor Maiatedaueo Sorviads wiadow Cleanimg Sorvicos " Carpo Clesmigg Services + Blind Cleaningfaervices ■ C'a'rpet $teams Cloanimg Services Pleasure VaV'aswaag Service 24 hour Emorgeamcy Janitorial Services Located ou 156 444 Patonlino• Dr, Chino Hills; CA. 9"1709, Santa F'e ,Tataildina aVCaiztteatanww leas been condactWg Its bnsinoss, of prov+idiza3 prartwss%c as at Sanatoarial sornioes for over 35 vows by sole propriowsl* '1148 is the nhp' office to which costianct servi.00, sales � azvs koting, and adininistrativu offorts arc; cond,100, as wolf as the oa, otr+ement and €tdnusaistration office coutraotual perk rmancos as indioatod mid gpvort cd U7 applicable f0deral, state & 1pcai laws pndreo-atiow, With avast flee docades of expericnoe, we baawe devoloped aclearttndc''rstaaadu2g aL Ekto speci3acrcquarenaetttsa;, daaevtiveaofgr .mIltvakmitozCaiscrviees, urtaSeiuilding NlaimPu mcwa is a Mull =0100 Mdlo aaa,almtenatrce cotrapany. We specilgizo taigatonal services, indluding; carpet & floor oloariita% inor annr r ra ;„ UP1101AM7 clentaiaµ among other oleanitrg services, Santa lae'Buildirag Lv[ai atcuzance standards arcs kept Wei with our urtique,persorial training or",oh employea and, qur dedi'aaCiou to service otit client needs Santa Fe's mission is to add value to the prgarri aCions we serve. TWs corrunitrnent is exemplified by wo idensive onployee- tsalning curric9u`lum that ecC pbaasiaes ToH, Quality Ma nagemont ("1"(�n, Our totining ptogaama ensurc that all employees dwvelnp a, proactive atdtatde' role and WA ovItasis f®tused on ouatomet satisteotlon. in addition, Santa l±r is dedzaa.tod in devol.oping and iatllizing the most rap to data cleaning ptocedi res along wl€h the ftowost egdpmone, as wel'lss autonating malty manwral' pa'ooedwes In order to imptavo oath, of kts' ocnvloytae's produwavity in cleatlhlg C ustoaraer satisfa0tiM is the yatdstiek Sauna For ritiliaes Cn measuring its suooess �t 25D -31 I Santa BUILDING � MAINTENANCE Santa Fe S'ulldingMaintenanoe pcgpases to providejWtozlsl servioes to the City of Santa Arta Polioe Department ihcilltfes, has, sxpl'ainod and required In acoordaace'to'the spocitloatlons listed in tiao RFP #10 -015 , Sootion 5,0 1, scope of Services, Equipment & supplzu," Santa.Fo's approach to moot the required services will bo by using tlae Systomado 7,0am Approach. The Systematic Team. Approach will ortsuxe that all work is porformod aeeording to the ontcaot requirements by utilizing a system of el;eaning personnel, strporvisim repottts and logs fnsu ng that t1xe tatcilitp is cleaned grad maintained up to or above Salta F'e's and the Poliwe Department service standarde. The systrstraatl0 team alaprnanh xs besed on realist a goals and' ear respnnsieeness d tuaderstaxtdkp oFthe spnaiticactcrss, Santa Fo h use tlaia approach ktas it's been very sncoesstal w ttEt ether prKaJeets 0f a'iar Vntagrtitwde,'T'be Systn naftn Teton Rpppxaach Cnu9fsts of elaantrr pexsocuael asslgneel to a taste or av, ar a Itx the Facillty. Eaah tes ra xaeaaperisxespon;s t. farthecorupleti' onofwnrfcn4itsa 'wigrodtastesor Are a. QIven the City. oi`Sanfa Ana, Folios Department roquliemera'ts, 5a uta Fm 13ul1Qlx g IvI'afntenattec W405.es, the fallowing staging: (1) Otte 011•aitosepervisvr (5) FSve ;pull,- bane.00 aeral Gloaoltlg Porsounel (4 Pow Paminrse cendral t„d'emiug'Porsorarel (3') Thfoo lowpacy Qtt"Oan SIXf Qn �Aq, (L 'ta � v�d,,„0 —fl I)lcs caght tno'lado.,bnt am notlimiCed tn; lnsurirtg wworlc is done Iry time Making sire onlployees. are ianowiing safety proced,arae ar Qraall;tynontrarl Employee pmfbrmance Employee treining E'tuplcyee Army & Tw& assigrnrent e Daily & Woslrly site ltspoetfnns a. Relpig errrl.vdth Gleaning Dhgtos Pmaam,rR e'>rS mg r Duties might ine hide but arse not limited W w Gloating 3advooms 0 cleaning,f0;ffoes 25D -32 �y I $ Cleaning Cubialgs. i DurapingGash w Rnptying waste baskets, a Dusti'ng'fiarnituro a Window Cleaning s vao wining of all owpet o Sweeping & Mopping n RVloniskr aorawmablo paper products Mocor & CarU2Q2ai-e "Chair duties, will inalado but ue not iia*-odtw, e Floor Waxing Y Floor Stripping•, Floor Shmn'Pooirng dF lreterios and Fxtrrtor window cleoolang 0 14,1411 surface al'eanitg w Light Axtures anti AC vents Oeartirrg 4 F'l'oor mid Cwpat,awintexra�nce Asa- " a 9 C ears ',d itEu�rc but es rs ig4rC Welrcde but are not Lix had tp: N. Cover abse it sjnployoes To whim high level rat quality,servico, and in ordoz'to meet tho Santa, Ana police Dgavtmorxtrngtifrarrtouts, Sinta Fo will be using the $ogpa of WmIcprovided on the RPP# 13-0 15, wbioh is as f nllo vs; ll.1iY kxldn +uaYUtaalyas rsurd' l� F er ova all dbvious sail, gtrfealcs, smadem, olc. 'Amm tho lrardWere, including fire spouts and drain. After aleaWng and dtsidocting, the en'tir°e dxinklag. lbantain Ar dlor° sink (sink refers to all sinks in coffee rooms or louangee too sbal.l be free cif sireaks, stains, ,sprats, snar.xdgea, sealo, aut'l odd ramovable soil. Oil is not to be 45ed to pnliah Metal fastness, if needed, Berne. away or a atenhlar product dial l be rased, to eltanluate water tnaild•up 25D -33 t 1 a, 4G q r t Apply a garnkidal detergent solution to all surfaom of 'Wash baaf% toilets, toilet spat bingos, pipos, salmis, showers and adjacent i surfaces,. Dry all metal pap kaeea of faucets, handles, valves, ow,. Shower wall, door and. soap scum, raid 'acrd mildew shah be reinovod daily and drett screens cleated of hair and lint, Oil is ,twt to be used to polish metal fixtures, Remove rnoistmo, vet or dry soil, and any debris ftom oarpotod aratrarrce mats. Enauro mats are properly paaid000d ou the floor, fk0—I* d!n—U, Clean all floor Drains and remove oorxosfon and tararislr. KUM ,pLQ : Rernave visible and hidden soil and debris from the carpet 1 I surface and ftotn within tiro carpots pile, Chaim. Usk teoeptacies, power cords, boxes, and other° such items shall be tilted, or moved whop necessary. Special attention snail be Paid to ccrMOM and slang walla, under and botwean futKaitvxe, to fnsura wvot is j thoroughly oloaned, in all areas. The oarpot shalt bo .free of all visible Sell and liter. Far Alpo roduotidn, which is essential to tbo 911 emergozVy polioe dispatch, operatlan, the built -in vatctzrnxr s'ystom supplied Ir z the Police Department %ill be wood when vaetnrrniag the Police Conimnalcationa area„ lord other sq6 iterus sli al he uaaaed as necessary err et rs9Yarnest ka their appre prlato location. All acoossiblo preps of the '€ 00 shall be dgi'np capped. C. oball ba -takou to PlIftat sglasir and mop marks'hm being visible on frixdttaro logs, da.Qts, eta.: "Caution and %ot 14ode " signs shall bg6ced ac as to provide surdejont 6afety mcaotrko, Aft ' a floo',rhas beau damp mglrpod, it shall hated rrn Puddles Water and 6e . froa of aati, stars, debraa, passe n ar'ad S'Whi rrrratics. Alt wet door signs shall be removed and part away aRer the floor - mface ia. dry, �d °a��lg�a ak'�'abdd ®ks a{,•�r„duq,g,:4l�emo ve scyui�, nfinnoral cTepgaits, tu5t sia[ruv, oCn, '�°�.l'�,60�,,; T,'law.p wipe and dis1�'eot ail WOn -weed hard surfaooa of fitrtaittrte� fixtures, walla, psr6atiorza, daora, and' lockers. ,xpcnlai Dare shall. he taltan to inortre tlreae surk'aaes pro not scratehoet, daanagcd, or sta%a. R4 t taqW,gg W ;i�glp Bhp c.padrawityrrc pwcad'seom : Remove all diver, lint hair, Bittcat, and dry soil Oom all fabrio strtf"aees of ohalm, couches, work si;ation partitions, and other firrult re vAtb a thbri'a covoring, tusdiutt gpl'GromD <or i ntrs Dust 10ekcs tags in dressing areas, storage rootas, locker rafdM Mid mhlftotranco areas, 25D -34 � r uastinz of iNcliare mince :Remove all dust, ,lira, litter, dry soil,. oto, from the surfpo of lodges, window sill, locket tape, and fire extingulshom This shall also be dote' for• computer tops, wall and dear &aches and sills, lightswltchos, pictures, partitions, rails, and athor types of fasturea and surfaces wkdoh are not considered to to furniture siu°faces. This also applies to specialty for specialty equipment such as test equipment, computers, tMMriters, calculators, etc, whlch are located anywhere between the floors. Surd'aoo, up to aim (9) &ot in heig rt, Dtustltg shall be accompRsbed by the romoval of sail from the area not by waving it froze ow sutfaoo to woWor. This includes the oleatring of the atrium wood lodges. Dusting shall be completed using ani'uro dusting wipes. EMEMny P li tr n d apt a I �' All baskets, oigaroUo ash.xeeeptaales and other trash containers shall be omptied, and returnod to thoir initial location, HoxoN carts, papers, and other containers marked "TRASH" (or axe obvipualy trash) shall be removed., All waste fllorp such receptaaiea shall be removed trout the. area and emptied into a designated trash dumpster & receptacle It such a mannor as to preveat the adjacent area ftoru becoming l'atterod by such trash, All reoyrl'e'batdos said plastics will be puked op� goulli, Rarraave any+found. litter and: gloat aursightl'y soil from building, Fixtures, avuila, door iambs, sod sa , aeo& ttomovo any.spilled'li'qudda or, solid&, Remove carpet stains, pick up a:treadomod hruchroom tray* or utoosa°la and deliver tl%m to the lunchroom. ea� dkfi rdua'rniSa "U fi=itwo moved �y Santa Pe employees dvrlag:the portbtrnad ae. of "services slaall be rehuated to iks apr ropriate locrr&to>a,,. All items such as WWI teoeptxoles or dock ohnire shag bo tnowed so Cleawti- cans takb placo undoruoath theam, and tlxon they shall be Manned to their appr'Opriato.laca4tian, e ai ` te a Check anal raflll each, toilet paper d'ispenaor, soap dispenser,, paper towel di�speatsor> toilet seat cover dispenser, and ferniniao hygieno product dlspetssen The supplies shall be placed in the digponkers In agcardanoo'withThe t brwtlons of dw supply and. dispenser msaufacttcors, Soap dispeusers and adjacemt surtaom shall be wiped'tarbauovo sp#llage, Cairn shall be taken not to'dnmago, dont or bend the dispenser, e u i g Caa�,. iai abl to bk �s aaj s xs as quickly ors eay are faand, so as. not to allow tYwna to set late the fabric. If the stain is a cafPoe spill,'taso prodret similar to lntordaca Coleco Streaker (supplied by 5aata FO) and follow Yraastxufwtutoe's reootanaetadod prwa du v& Do not exIvarot or blot, simply spray affected area, 25D -35 c�. Ito LqS& �' - , e ,tide= All soiled or tarn G.,mb reooptacie liners shall bo plaood vft 4 tow trash W o;ptaolo Diner. Tire• liner shall be replaosd in such a manaaor as to presetat a treat Uniform appearance. of ®at d Rmove viudgaa, fingorprirrts,.tnarks, Streaks, taps, oto, from the swd'aoe of ledges, windows, partition glaas„ window ail Is, lire extinguiahors., counter tops, walls, doors, door lharaos and sills, piotw'es, partitians, tails, surd other types. of Et:twrex and smiacas T Ws Includes all items from the hour at lhco to l l foot in heigiat. Care shall be takotr not to po anontly rnaalt, scratch or discolor the starPacoa, of e: Td emovd nooperm nont stains and soil from do interior old exterior of trash receptacles, ,C CS2 M �,0 M ; AF..�'p, r47ve P00 WO03 MM MAIM, ,ST1At{ ees 9,n.Gl. Rght,$ WL -Od to the hWl&g entryway areas. TVs s iaraludos oiotnaing the exterior, Cf Mass and metal doors, door throsholds. and hardware. Sweep tiro (2) tWo fourth.ilooT'patios andmipe down their h4n*aUN and callings. Swoop or hoax downy he pacer arm outside the Comanuuiip Room antrana c and wipe down the haadrodl's outside the Pollee, Deparenaont lobby, fail tabby and Conxma uxity Wwm. Rernovo anylitter, olgarette Nola, Or bird dr©ppings itt theca areas too, w Orur "MR -on� rn ; u0az krdta Was Of all surr:oVading building e avy door glass and etttrY doeats t`pr a; un00rata app00aaue *qb d ali 4mudV9, fingozptlnts, stains, stroalss, l:lri14 eto, Romolro any paper and tape, Ctema 4 mjl tors iru.restraorn4 looker mom aald 1masa ozator in tho sanam mums as above, Spat ol'aa:n 0, moo attrd work Avadoh glass as naeded on a dally'bmis. Clean glass a limee dom to Pollee Facility slid 40 twloo'd017, lcawtlaee m i ar Qw g; Clean Inotdo and.outaida ot "All kMuvowavq ar +ens, ternavingurtrrnbs and spills. ` uu� ar :.Nta Uurpty Uasn rocvpwxca.os snot ear 0MIg usu5 itr 'patio, bale©rry at�easy asid pardcl:ng azers. Clean receptacles as needed caohtxme, This includes reooptaoles that may be placed o otsido elry entry doors, such as oults Me, the ilroa'at of"the pc l'ioo dQ.pattmen% jail and yahoo oammindt'y room, ompioyop nnrth errlrartoo areas, tit oak�� of C � it es: Cardboard cartons, are to ire brol'cen dom flat and put ihio tho proper ta:aser eow4ner, inoluding any boxes oh-. -io loading dock, 25D -36 Rmnow any toilet paper, cobwebs, dust laulldup and other debris froth the. calling, ceiling vents and o4ing light fixiarealaaldars. sdmg off mibs seed C aiNarRas:'fdacnava all dirt, Rd, lift, cab wpbs, dry sail, etc, from wells Md ceithaga. in o: Cate shall be takon not to soratoh or mMt. yrood sntfaws, while itlsraring that they have been thoroughly cleaned. C104192 Of Fiirae s . eMa reise ttraiaamaomtc Wipe down all meal to palish off shoe marks and sweat stains. Clean uphQlstery and u4pe off shroud shad side rails of the treadmills, as well as the consoles ore all treaduxills and other machines to tomove sweat sand stains. Clears tops of an rubber teats and under each treadraill by extra - vacuuming up the dust and blank nxotor powder. wigg n " .o.�.o.'�r The 4nth�p prilunchrry ver¢dica�anachirres„ hal'l'wayass acrd' n tri is aomtroat„ �4 "sae sh¢aJl cleaned ex� aac thtsrougltly cieaaerl kaemttved lthy arrduiean enviearamettt. an a dally "basis, Swrfety auaaf Soolito work area.aud equl�maim to prevent passage by the general pa:bUo and City Staff; aaad denote it as sucks War% area osrd agaivtnent shall stag+ wadat ow.conditton aastii 5arprk is coaspleto, e�- 14ptnen't is vwaztod„ aaad passaga'6 Wo by the getawal lniblfo and Pohoe„ D parnnarat. omployces.. The proper r(wtttptitF sr d type Ofeafety sagtrs, 046 as "Cantloxr Wet HOW! shall bo.placod avdry time conditions exist that!aworrant s%b CPO, glgru2 acs to be piokod up and moored In tter goporjaairor rams antae the ditlorznolonger exist b meant'%aok sig". E IX "Au2 by . k'2kL wprtaeahpmm li"Xut x c (fine rpMgera'torw on Mondays, One refrigerator ear F.rldays,Cteamtrrterlarartd extariol ot'raFrcgeratar snfircas. Crispose of all food artd tomporary wnWhicrs,, Do not dispose of'permaarent contunerq such as thaae made ofgiass Or metal, Empty contents o£parn =' 0rr1; oontalueza, Trask theta and jeavo the pertnanent containers its. the destpatod hutalroout aroa, MX,V ;Paal'ttm o„ it Ra—"; Clean and ewtorar a onifom glass and pr oteotdve fmtsb to resilient die or toix a;o flaars that ato f1rtdshad with a Aow Irish. All obairs,4asir. rocepCaelas, etc. shall' be tilted ar shaved Where t000ww y to spray buff underneath. The 10 25D -37 tl�l r. entire Flavr shall leave arurlfortn, glossy.appearancc, flue ofscai?l. marks, heel marks, and other stains, and shall be verao"d fratr basobaards, furniture, trash receptaulris, eW. stlra cep lln nr � gq d; Clean sit blinds, shades, end dx0perlesr Cake mkrall be taken tact to spread dust into the air, dAOW. adl At v AU vents and area ltrtnredtately surronadiAg, thaw. fltkst all atrium at the glarss/wood railing areas and at the adiwa stairs, Dust lunchrooms drMll Cars shall be taken not to sproad deist into the air. AWN: Ru hove dust,, cobwots, oily Mit, etc, from all rrxtares and surfaces above 11 feot Ixatn, kite top of the floor', This includes lights, &Als, light flxtrtrea, pips, sprlir 1dw system, e4btas, ledges, wa Vs,. atriittu wood and l'edgos, ocllitrgs, vends, etc. Fare shall be taken not to spread dust into tba air, Dust fame grodttots skull be used such as micro ftbef dusting raga. department jQN I'k ,X floor dxalh,, Ptwd up at11q. Lei 4 TM 7 §ka'm4' ULU!z —a d. eta me F109,rs! Dezp cleauut It to be erfomied in a ntarnrer la ,move ha<avy sumi, rtul'ldew and ani,ueral dvpasits :Erpm, the q�wfi oo, A.ft'ot scAlbbi ag, tlac sork'ace4 shall,boxinsed thoroughly or, romove at rom4wiUg eleaniug solution, Aster cleaniag, the ilamr lord grout aball boom a tasifbrm app earattee Brea i"rom fl3 xa, nuaexaLro, dekaosits,.coarns9oa sa5r}s,. e'rc, cgs not,aoccaaibla with, tho. sot ubber slutll W rnaruua*' scrubbed with an abrasive pad, Apply smalei, to 'dia areas, aAerruaohine scrubbing eacaept za shover auras M MPKIM 1 Va a ttuy� '' arrw If Ibere, are black rkcs, r[amlts kkmn chair glides, or imbedded soil le.. the firdsh, they shall beremmved before re- waxi'n ©, A unvo.m coat of appraved.floor finish shall bo applied, After the frnislr lras dried, the appearance ,shall be uniform WWI no visible stress marks, swirls, etc. Reraove all stripping ar detergent solutlans From the basmboard's, door, or other nou400r aurfaoas and in, adlaoogt apaocs. r m qua ,: Catpet eleatring is usually done a quarterly Buis, moordlnated dnortgh the (oboe Adruinl8tration Managarto dotarmind exact Glowing location's, f°m'c shall be 11. 25D -38 1 u 4'A1�I ri _ taken to butwo the carper is thoroughly cloanod and, dry priortn opening the area, tip to foot traffic. Velai Wipe down the aNtside lookers of any dust, dirt,. or debris. Nm shack be. taken not to spray any oloardag solution or water directly into tho lockers theougla the open slots, A,ppdy fuaniture polish to all natural wood ,patleling and furniture, == r s t.UAee AI@ cloawa/map the Coon• cement etar".rwolle looatod at each corner of to Police Dopati•— = Faculty klrr amd l�ellmlalr Mlle F9aaor 9av p'emo7 All noa4Lx d ivrnishlnpl so:oh as tables, chairs-, dosks, taash moeptacles„ stotrage oontainees shall 'bo xnmared prior to'ift*ping � tuatass oxemptod by oo car, ROVIO .all rcmovtble'=A -s, heel marks,, s�pi�h'�raWks, rust s'tai'ns, tuna and, othot typos of stains and aoi`l. Mutual. sensfaNag dens "acs shall be oared in aceaa inamosaibleter. the floor rnagha,zw MMUAUS U�; M, "A SS hIVI "lY {Qa dimly basis) cleaned betweoa 6:00am. and 10.30 pxn seven days e. week, hxrlxtdinlg holidays ''t'1,M099- Med3oal Ofki(es- till 12)INi14,.11illd Central. Control ItoQm and 1 lsmpaopee .rostranciz lKiichenRestroom 111 and LQ Doo,king (gmplloyec area only) Looking arearostroordae ID aaxd PE Attorney Vlaltattlob Watah,.Comm.aAder's Cf5ve e hffi i pgll • All of Sail Lobby and 2 public restrooms &tL`AOT.. anvanoe-area Room k2144 Jail Administrator Room 42145 Tail gsaxager 12 25D -39 ROM #2149 .Xall ,Manager Jail, Bne mg /roll Ball room and Y employm balltvay restroom Ali pl'R.eoordo and Administration areas hwludlrtg 2 resuvorns, baliways and oofTce oar area, cpnforenae room Visitor Hallway Sall"Mt hall and release vestibule (oxtetiox and intoxiar) I r or- Medical O iuu r, RMm k811109, 39109 Cfazen visitation area, 1polpdingvisitor elevator StaffR.ostroom 3A R.oarn.41141.10 g Medical. do Dental Offices — Room #4910 &, 4Hl 09 Citizen visitation arose Staff rostroom 4A So ,sail{ .y »- day use areas - cleaned lietweert 6:00arn and 2:30 pm Rve days a vteek Moaiday -Aiday exeluduig holidays Rpo,xt 141159 $uil #inS Ma9ntenande Ofiico on Loading L7erek R0,11-CW-1 Room Room #121.9 lrropmv. & Fad Net. Uivisioal Cgzt,ruurctex Mots'& and Wagon "s soaker rooms, main OIns West moan's. Lund waxa'on ,s restmonals PD LA by Room #2126 lratra! liriraau Cornaakrxrdw Rowe #21.1:9 Preis Wortnatioo O flour Room #2122 District Commatidex Room 421.24 District Comxmndox Oscan #21251yisttaet Commoundor Room #'2'129 Diatelot Corsamander Roam #2130 Professional 5taxAdaurl5 Corrunander ROOM #2175 Tvafkia Division Corxunandex Room #2172 Recryrda Managor ROOM 42101 Station Supervisoi, R.f O", 4216:3 WatQb, Conaraandor Sgt, Office Area West men's and womell,S xesuooms ak by men's and wvornon "'s resin >ums l3 25D -40 " � I Lmoh Roox,4 ,Report Raom S4aiiway b"ea Roott room and R.000rd's officer Co.anter Roocrds Evldeneo oflioo ar ®a atd vierviag morn j 1� r'9, ° Room #316017istriot Division Cotrlrnaadet Room #3213 7xivosAgatiozx3 Duroau Commander Roorta #3167 CAP Divisiop Co=ander Special Investigations Area West mews and v+ommx's resPrnows a I h th9p Room. #4171 Chief ot`I'alim Area: Waf s QfMo, 4 rostroorr6 amxG retiaa roorc. acrd adndnistrativa, Oerlcal and copier areas, and Tnleili ence SergoxIt''s Office Room # 4164. Roorn # 4166 Room # 41.6.'7 Room ,# 4168 Room# 416u Room # 4162 Poom 9 41M Doom. # 415,1 Rawl W 41,57 Cunslrtxtat Servi;aee lki'aaagor itaoax #414 &,Vscai Office axearpyleroo, fiscalO-fficeel° ud employees kocxn # 4131 Cornptrier Analysis Nm u # 4155 Critrae Analysis Rooms # 4199 Persaun.el [atcnfow room RNku # 4116 Vacant ROM # 4119 f n tr reoakion I�iva.saon Caznxnandor; 2 xestrooms, blveii.vousn, 511 area Room 0 4224 Training Division, Cumrriander ROOM # 4227 Vl.ded TraWng Area: fow (4) raoms� R Oova 0 4212 Driving simtt$aGor raozrx RUazrr 114,2x14 Aron; seven (7) Protossional' Standards offices, cora4erelaua room, file roorn gird roceptiou area• Poli e1E —high Use Areas ,cleaned botwom 2;0017tn and 10:30 pm sevon days a Wedc including .hnli.days 14 25D -41 lr .+ u'— All oFM.erx s apr Womea's laoaoer rooms, restrooms, showers, and sleep oentors. Moo R., Carlssin Fitneas Center and A arobics Room Hallway Room #.1119 R911 -Call Boom Men's. and Women's west side,restroorns Exterior pares Pot and bode levels of parking strueUm 2 Atriums r, Cloor- Room #2114 Patrol Conference Room 9'rrspeal interview taouas andmeglpritat rooms Room. #210 copier room Room #2161 Station Supervisor & 7uv='lc holding rooms Room 42,162 Watch Catnmandcr's Adrzrinl',atrative Moo Room - 43W'Watch Cornmrander Main rroAWsoutli patrol ostrpoted hallways All of P"olsoe Records arad Front counter area Lobby and t*o restrcami Officer repol'G room Hallway,* to "luu hroour. E+uno'btoom and two, restrooms Community Roam, fa Byer, and two restrooma ;�'�1 �' mod- Ivfeq''a and'Wanaen's uvestside: sestrouriaa YI—aL� a or- All of Cadranatixz aataana ilvisiart, lacl diog olfio'e,:btoak roam, two reatrooms,hallways,au 1RU'aroa. 1*sulls tuoWty— general arca., atomoQbntvreora2, O.Qpm and 1t?:JOpmeve,,lays&*eelc i19 andayml rtday exabudirrg ho]Idays 15 25D -42 r q q1 yU p� n a zi CAD M. it AM kol a 6 6 I AAA 25D -43 C b «CY ,. w anta Fe BUILDING Al NTrE N Ca E If you ask most jaatitorial set'vtca provides, what would be tbe.most imporce at part of their quality Control pr091!aua7 you would probably haar statements about how graRtiheic supervision Is, Hero, is Santa Fa Building Mai'ntenmxee, we understand that it tapes more thaa just great Supervisors to paz°form good quality servioe, Quality is a priority to all Santa Fe Staff That is why we. havo created a seven step quality oouttol program to insurs that we maintain a high level of sawllc'o and erflcianoy" The seven :step quality oontrol program that Santa Fe utilities is as follows; I) I�Xieir'rg 2� �'rainixtg 3j Supcxvisi'or: 4) Evaluation and performance inceantivos 9) Ste,ff'and Manal„ament Ccnaruu 4Eastiarr 6) proper tools(Bquiprment & Supplies) 7) Sraflbt7 I ules and heguTatlo h ,~ ftreatess The pa'apass bogiins with the personaaet dcapattnxeut at.tlro hirihsg ptocas5: ki'Arizag the dght' motivated" person, Who ha's the aaecossary abilities Santa PC Huildtaag Maintenance Is looking for on an employee, is the first part, lqaldng sera that we have tha best quali#ied erxtployae is the seocatd part, When we lnt0,VVIew appiivatAts, we look for Madvatiott, altitude and oxporioaac * The pars rrumal wo hire'ror tiro J-ob has to have at least three good refarenees ptatam -hay from previous omployer,s, They have to be motivated',indiAdu0s who have the right att1w.de mid the w llingness to learn rtew skills. For soaxta dient;s� baekOrouud inve4gations. might also 1! e part of the Airing pr000as. Fi adiaag the right personnel who will do well at providing jantiorial service is the iirs.t part of Santa ire "s seven step Quality control program. Tlae second stage mtgrts with traitt.i.ng, i*rcvidIRF, dha Proper + awi49 14 O$Ook Al &^t improving perfa naance standards mid good gvallty cQatrol. It's not enough to just show a new employwa trakbi g videos anti readt ag rna'W dal, 'T"krst N wiry Santa Fa utilizes a very oomprehehsive teaming pxngtam to trail new employees audio keep nit ernployoos up to date on SAM cl'euning methods. W16 rho }help of same of our vendors we keep up with 'the 17 25D -44 latest training on machinery and oleaz lag techniques. Santa ve also utilizes resour'oes outside of the oornpany sajoh as irai nibs schools and cleanitia sgulioara. As most coYnpanios might sa:y, sopervisian is tk e innst ianpcutaynt part of a good gt:wality control program. Santa ke °a supervisoas are oftlle most vxper'ience oil theJanrtorlal .fiield: 'With unary years of experience and expertise iapxoviding Jaxdtorial services they know what good quality service looks life and what a customer expeots. That is why we supervise frequently depending on size afjab and on the amotuxt of staff boiug'ewployod at a Job site, thr supervisions are done not to Intimidate or harass: ot,rr ottaployees but to motivate and instill trust on their aaporvvisors. As quality of owioo rises supervisions height bdoonae less frequent depending on oontraol an onstorraer.requirements. Oood supervision is essential in oor line of work, but is only part of 'a process to create quality setvioe, Evaluation and incentiwea are important to keep a tow oxnplagee burn over within a compmy. Eeedhaok through naga,rlar supervision allows Santa lie to see a cleans picture of what is gotag On with its work §truce, it allows us to see if work perfb manw and quality of service are bci ng aaaet by Santa l; o's oleanlaag, standards. it also helps was determine where our faults are, and the areas we raced to improve nn, 11, ,j era'✓• giving to those who go beyond t1aa, company's oxpeotatlon. Opportunity for advocelneat; Within the cortapany aaad bontses/p)ft oards are some of the inoondves offer by Swim Pe Fftrildu s Maintenance, Good conuntrtaacation flaw between employees and management axe ossential for a stvoss treo and happy worts' fares. .A stress rho, and happy worle.forGe leads to good, gt<al'1'ty service, pespeot and being suppordye allowvs matragemotrl to build trust vwith our empioygcs, The trarst 1NA we build with: our emptoyeaa aJl.aws its to .hays beftor eommuaaication hetweoxa, Our employees arld motag' awon,t, We onoourage wurlters to spook freely off riew ideas and' naw ways in wWoh we oaaa ttrtl ?rove our fervi.sxe, and to . communicate any prof rams, wbi'k or service related. Like writli any groal; loam or coxuparty, coax nusaicati n Is essenti'ai for suodeats. `fraiaaing shad supervision are huportant but ri'`employaea do not have tho proper toots„ materials and maaktixtuxp they vould.aot work an . clean k gisaafly, w"atata Pe wealet all of Its staff to take pride atx their work, providing there with the propur`togks amd trafndng, akkarwvs employees to ptrrform at a digiaex lovol. Arty temp mount dauaaged or not suitable, ibr work is gt0oldy repaired or replaced. Damaged ur Improperly cared for tools are safety hanrds and are obstaoles for employee perEormanca, 8quipmont working at their Peak porfonnaaoo to what Banta Fe striders for, Tbo last part of Santa re Tl ilCling iiYaintenaatna Qual.il,y Control programs is safety, loot leaving a single accident with in the Past 10 years says a lot about our safety program.. We rxaak , sure that call sa'fetY pr'000dures are understood aaXd followed by all of out staff: PrCSp06Y labeling; Of clea niog produce.), putting 'q%C',aM forms at awls Job location, and [[ 25D -45 Santa F, BUILDING MAINTENANCE attending st fety so aalrnaes, axo just some of to ways .Santa Fo insures enaployoo and ouatomor safety, );laying g safe work place is what Santa Fo has obtained at [oast for the Past 10 years. 111s is something that we are very proud off. We want our work sites to be a pleasant and safe envlroumotat for custoinvo and employees alll(e. This soven stop quality 000trol program is What Santa Fe Ulding Mai'ntonanoe utilizes to instill arid, maintalu duality control within its work forgo. Hopefully this will give the City of Santa Ana. Police Departraeat a olow understanding of Santa Fe's quality control program Implernentation of tho Quality Control Progranx for the City of$arata Ana Polloo Departmont.. Now that you have 4 better understanding of Santa Fo Building Mehstsaanaeo Quality Control Program, grad implementation plan, has been designed for the facilities of the poliec department, Santa Fo will use a tears of gvallty oontrol trained poesoauol, in order to Inspect the faollitiesi The Plan will oonsist of the following, 1. Weelsy l�sspectiarrs (by t?n -Site, Sitpetvisarj 3, iMaothly lnspaeitions (by Quality Control Personnel) 3. Saaata r'��a Ptaldct� l7epattrr�eat k°aoili;kl� lWlanESgeznent £oedback 4, "Reports 5, laacontivos 6`o, E.nfon'oauaent Santa Fa Will assign M, On -site Supervisor to p+tsform supml i0A and to bandle oil aspmts -of the cieauhag srrvfzoW, all employees Oartitorslprianclpal ouste.dians) will report' to Oils load person, Whit a dodioateet &,count Supervisor arid. an Qn -site Supervisor serving'fras a central 4ontacit pofnt to all. i5'eld employees, Santa, Pe will lro adpable, of making a "quick response, deeislon without aoaxerzltfgg Our malta office and,naost aaaaexgpney situations vmatd bo handled hi, a. timely manaanor. Weekly site inspeatlons will be Conducted by the On;•site SuperviNo5 assign to lire faolltde,u. Tito wonky ixaspoctions Will assure that employees cornplote thelr daily & weekly assign tasks of a safe, aid timely manner at the end nl°oach wook. Cln vito. S"upom —aw Aq.11 also monitot that all taste are eoutpleted as merttiouod In section 5,3 through section 53.34 "SpecilloMaiatenanoa Taslm", Any major doAcioncles that are found on Cite weekly & daaly laspeotiorts shall be corrected the next working day, If asaiwoco is needed to owtwt any doMenoy, support will be available from the Area Supervisor, our Oflioe and other Suponlsars and Staff available iutae grea. 1Wdom naaoutbly site 11aspootionxY'W ll be aonduetod Lay a teary eomposa of one or tuoro asspaxvlaors WIV aNill meet with the Santa Ana PoUoo kiepatltwout assigns xapxcsentative Their alto, visits will be as required by the City of "Santa And Police Dep wOnent oe during 19 25D -46 qoi the working how's of cleaning personnol. T hoar sits vtslts during the working hours of, 016, cleaning; personnel, would be in order to supervisa employoc parfotmattce and to Insure that all personnel follow siVety procedures while parfinm* their duties Their prosance at the wsrrlrsite shall not be to iwirnidake bxrrplayeas but to servo as support to tiro work force, Using theft experietacc nrr the cleaning business, the supervisor's rvoutd offer their expertise Pertaining to certgatasks, services, tools, etc, makhrg the workforce more safe and offlcient whilo monitoring the quality of services, $auto. Fe Building .Maintenance will utilize a data callseted Froat alto inspections and Police department feedback its ordwta naeasurp aarwica pexfnrmance, Such inapeetion data will allow us to ideatiLied flaws its the services being provided, whether'thare's a Problem with our work plan or whothor the personnel are tot performing up to 64nta l' o gtaudards. Our Qualrty Control Tears will also mod with the police department assign reptesentativo duriag their mooCkdy ittspectiorra. The QC Wain will walls the facility with the aaslgrr topresenCativc acrd will t071aw any concerns the City of Santa Ana Potice Department may have as well as to receive servxoe, feedback Repu1s will be used to analyze the pe4rAraaaare of sorviocs boingti provided and the pertbxnanee of employees,, ThMQ reports will allow Santa F +o to collect imporlant data su4h as• quality af'woxie, supply if vettoryY' employee pert"ormanea, etc, The.lt'oports would. nilow Santa Fe to Improve the services being provided, employee perform' gogQ std sx.Gpply purclxasing. The followvlag'Ve lust some of the itforruatlnnihat Santa Ve collects In order to Improve, and rate perfvrmatroe; Quality lm pgetiona R.eporta m laveokoryPAports m Gnay7toyeel�ettrximxaurceR .epovs; m t; notrrnrorompl'airtts/Kecltixnsis F n °thorax ara,'Imcesrtives and dis*iivary aetiarsa will be used.lm order to of ocorage service pei�atManco and srtfety perfo raiwee, pineenif,pa,,r natgpte sA t,,cln S "� ctards, clrcuTe bazar, company akkdvtx^corndnt; asC.zfCznapTacrlorrrmig,11taN lucle,SMIea2s4anr, rouarrring Y11p,,, term I atinrr), The aelcnawl'edgorxxent thra the use. f.Gacoritfves erF, a °`jab'well dope" oT'°safotyperforrnarme" will encourage. work force to perform at their. best acrd will leeap theta motivateui, Ent"nrceauemt of ail cr,des, sFAty procedures and wvork requiromenis tlra die use of dlseiplinary aotioras will insure th4t all personnel annduct -themselves in a. professlateal way, (N`t` All ampioyees will have a chanco to ehallongeTdispute any disciplhrary action, gi.w,n to them). 2p 25D -47 Santa Fe OIL. IN MAINTENANCE Santa FO Buildhig lbimiaaea mmoo will support Its staff provlalleng services for the p4go Department, via the r lllowlaag groaltlo of earoaoaraniootian CIIy of Banta AmFalioo IDeparhuent Asrt m pepre,mtative Cleaning Staff" Unable to pro we nctaxes at Oav tune dvw to 9FMr. fsla eti Ja zirrri'dctl Act Following the above guide oPeatram udlera eon f4'ow o�h4LI, "canto Fe Bidjding Maixdtcnaneo will provide acll -phone num bbrs of pdtq)odt suporaisa(a) mid condxaot aclrniztistra'Cnrfe):, to the Cil of SMIA A114 Police t)opartm=t.awlgned eepresemitivo, Tile enmpany gold eornar mloatlon will be oonduatod as follows,' L Santa. Fe.'xpsoject sttporvieox and/or offico peraonrdei will contact O silo lead janitors uia 0011•plaoue xu: iH pewsom 2,. C>s7�siteioatd�'anitarswiA pass on ordt�rs tezest oit7ald persontael, (Note! For emergoney p.Waeposes all employees roust pravide at howe -phone or Cell -plan nudtdl ea wiaero tlsanaaolves or tt family xasember earn be reached ww le nn or out of world site.) 21 2501-48 rraaWa.oaW N en i cnn,wtnayswca Santa lee wild ng Sardta Fo guildidag ; Maintonmo® MaIntonmoa 1vlanagomont ContractAdintniStrator: S0.ppgTt Irine ©'LVtdida d. p sits & 5 ply r TMniulnW� � , .pi'0 %Ct'ct ev Axo'uY t • Qt7fl�ili' Ctltt9MbW $uperY+ sop • IJpePbliea&1 MEd2�aen0a4' • Hamm .H',esouraaa Gldlaerf,Taratnillo aea,er(aanAkida�epasYSS �� i . �an ,�uuFACnrad�nc:e3iwpewt�:�ar i I Cleaning Staff" Unable to pro we nctaxes at Oav tune dvw to 9FMr. fsla eti Ja zirrri'dctl Act Following the above guide oPeatram udlera eon f4'ow o�h4LI, "canto Fe Bidjding Maixdtcnaneo will provide acll -phone num bbrs of pdtq)odt suporaisa(a) mid condxaot aclrniztistra'Cnrfe):, to the Cil of SMIA A114 Police t)opartm=t.awlgned eepresemitivo, Tile enmpany gold eornar mloatlon will be oonduatod as follows,' L Santa. Fe.'xpsoject sttporvieox and/or offico peraonrdei will contact O silo lead janitors uia 0011•plaoue xu: iH pewsom 2,. C>s7�siteioatd�'anitarswiA pass on ordt�rs tezest oit7ald persontael, (Note! For emergoney p.Waeposes all employees roust pravide at howe -phone or Cell -plan nudtdl ea wiaero tlsanaaolves or tt family xasember earn be reached ww le nn or out of world site.) 21 2501-48 Santa Fe Building iviaintanance as had a .tot of experimoe working with ca Y, oontntp, sail goverrnaeut faoillties, Santa Fe is aware ofwbat The City of SWR Aria Police Dspaxttaent upeons froze a aw ice provider and Our goad Is to most and e toeod thaaa expeotatious, Beim is a list of aimilar projects than Santa Fe ourretatly provides janitorial service to; City q, f' Vernon aeuk -, City of'Vorno t 4305 SartaFe Ave, Verz w, CA 90058 1IM.AO Con,aor.Persaa ivix, Soott'Rigg (3 ) 583- "I I BxL 279 F- mxr.l. "Agg*gLntxa w -,us Santa Fe BlIding Maintartanee earrently,provkha daily janitorial servioa s to nxultlple cf , of Vernon tvscilities that conaiaosr appxoxiauately 63,453 sq(une Peat, F'aoiii,65 inotude: City Nike Uepartaient a City 1-1011 ® City P"utxlioWorks • City Ywd • City d ght and Power 0 keu'plUFaeility The gervieea that Santa dre provides tttclnde: M Restmom Clowning s Wines, C4ali11 a1es and Cpxrterenoo loom. Gleaming Carpet Maintonanoe (Carpet ShMpoo, ,Stum Cleati, Fxtxtuwttoa} 0 Tilo & End FIoor'ifyfaintenanca ( Stripping & waxizag, Polish & BAdrzxag) M Window Cleanag Pressure wasmag a ZratetiarCieanhrg e A,1olig other Dti-W k;llwgermy Clouning amwioeg, 25D -49 xa Santa I { BUILDING MAINTENANCE emccaZ; a i �.. r . &; r,; S" Borraarddao C'otrrsty Supordor rourtbouso 303 Thkd 5t. San Bearrardirro,, CAS 92415 commet Posoe Ms, Tawsrra iwwllison (909) 3 M2251 Crurall: Wlbm„xtlr.aqv 84ni a 10 Bui* g, lv'i&280010e ec EW prowidoa Uly. My Ponca° load JWtorW swvim to the County of Sall Dor=dimb S'itporiar C'orrrthowe faei2ltios that (,Qm Q$o am',xvlmatoly 'i Q&ja©® sq'rraxo foot. Pne,Wties taoluae; Colo Rooms � D „tilaerotlow,, Room o, Court holding CgIIs o Judge ollices I'Ablio Amu 'Record Storage: Rcror<ta. Tho aevions that Santa Fe provides ta9elalde: m Day.Porlersovloo e R0fT00i7t 41 Shower Clonitag (Ptivsto rued publics) q :Kitchen Clean:tag Carpet: Malmnaaco ('Carpe Sltaraapoo, S.te<arar CIO, Extr ctiona a Tile & Hard Floor Maurtanoraec (Stxj'pping & Wa;crng, d?nliaNr & ldufkietg) w w hido w Clooning n Psossuro ^'aslrang tlxterior rleanisag 24 25D -51 4 -5trd'1 Orango Covaty Pu bldo Library Admialssralive geadqurtors 1,301 East St. An*e'wMaw Santa Ana, CA k705 LUMULt C`anl ace?Pvfi� Mr. James Eros (714) w.30$2 E- mall., J..qm. p L2@'V s4W3 Sasrta FO Sudlditag, Matniolavo cwrt'andl pwvidw MY DAy- Porter and X=it©nal Services to the count of` OrAngelattbligUbraryAd mialstWveHoailqumlus2aculi<ties that ooMpdao approxhrately 90,000 6pare ftt. Facilities iaoluds. ,Sta;- Mruk Rooms mp Capioreoae 12oarna a Library � t ckv 914"OfI"iaea % War'ehowe, 0 Emplaygel&eslraoms, 111e services &hat santa, Fe prgvides lnctudo; l ay.- lxorty servioe � aes'tro6m Clowng w Kftallen Cleasring w atpct M6bt6tuarzco CCaalaot Shampoo, Steam Clean, Extractlaxta Tile & Ham Ploor 1? 4aurtenalxce f Strfpping & Waxing, p6lislx & Buffing) a Window Moving 6 Presatue Waslslag Exterzm• Clcauing 25 25D -52 t I • i i I City of La Quinte Santa BUILMNG 411 't""IENANC IIA City of i,a Quinta 78.495 Callo'i'mpico La OWnta, CA 922,53 " i GmitoocPormn Steve lowleu (760) 77'7M.90 lw -mail, gh � "- jii Qu, Swa Fr, Ull,dirrg 1vLa,uttexr oo stut°.otztlY prtrvisioa daily hnitorial sei"t*ioes to the City of La Quium valious,fhvill.tass 109,000 square 3'aer„ Facilft1ts include. 4 CitymLISA.xcn City kolino and shovift Cltyp Iis P City Ubeees re p'rr eige cp �}pe atiar s Cer fart " City hall m t ity' llublie wotka 0 City Sports Complex `.Pita seMaos that Santa Fe pr6,Vldrs irzciwde: s Restroom Cleaning (Private and Publie). a Ctffioes, Cubicles acrd Confereaaua ltaarzt Cleaning + Kitchen Cleaning F Cariret Maincana rce. (Carpet Sltarapao, Steam. Clean,'Extrautiun). Tito & Hard lrlcor Ni'abiteamce ( Strippiu$ & W'aacirrg, Palish & 13u, ng) s Window C1 ®s ing B Exterior Cleaning a super olegaing of Sport Cmplex a fat ang adior an -call acrd emergency services i"br party rentals if 25D -53 PRICE PROPOSAL Prc�po,sers *N.M.1 proVide njt)tjCjjjy '4111d fkcal year pricing, u'lifig tim attachW cosi Sumniar Front for atict s -rit All nri600 oca; 25D-54 Am CaUforrjia)j F opoml ffoa{ s" yaastltfletation fox Pm °ovldtog janitorial Maintoatanae w'jeawices For tFre .Santa.Ana Ulm Delsaa'ta cut Name of Pabposing, Company; YYIMwcq Primary Con racr (naraea;M2U° Phone Ncatnher (A02) dQ6 -�7S® laax Number. QQ&49.¢„�i:� Vendor's Loogtion: (wig � 1lnEMO17r CtZtnea kXP s C ,�(X9 Saeondaty: no g 1~ccatron to tiaudl'e &17ts As, +t °ee;neiaG'; IS6��.,�r���`�2'a:.�1�..,Chino �a,.. ���Q� 1:11voift Pmca,s,shig LacatLorr; L �P>Ck rro T r, Cd trY l 'iCsr C 7pp Name sxP �re:e�ea7k f�iatl,nasCsar @oc: I'j�taz .� „. t"�s�swaaiMcarag, Phone Ncu ykb6f: ..(B,9jM M4jL6 Rx'Murstbu, Bmdf KIC11:0s8; d 2 £�dtt1 1 Bnc °o n sw7urhvy cleq u0n. Q? or"puA atj :en and b ]enhs p Oeyow• Am,,; ate 1'r�riet:?L P"flu,%ffor a z sis6ia Bet as bard F t , Nwlalaea oaf yaara pour > srn'P1ae fioen do the jmtor$al rnairttonaGace Ead4rshry: a M09 WP—e nlj E rib mare scnruta 25D -55 RFF 13,415 29 i I RFT 11 10 15 CERTIPICATION OPNONDISCRIMINATION BY CONTRACTORS As ,suppi.]ers of goads or services to the Qty Of' SAIIWMAaa, ilia Firm tilted bol'mv certffies ttlut it trees not disulainate.in its emlyduyment with regard to raco, calve:, religion, sox or natlangl origilh, that it Is.in oompligooe with all l'erlortat,, state tarsi boa] directives and smso+ativo ordera regnrdfq natlndiacrt xiinudon In employment; mid tact it Agrus to d'emtontrata positively acrd nggressIvgty the piincfpie, of equal opportani y 1n. employnnattt, VVE AGREE: SPEOIFMCALLY; f. To take afflrmalive steps to hire Minority employees within the company, 2. To ostalsl'ish or observes employment poilolee whlofa affirmatively ptomota opporturrltles for minority persons at all job fevela, d. T'a oornrriunfcata thi'e poiloy to all parsons conoernod, InoludIng all company employees, outside reorulting sevlaes,. especially those servicing m1nurity aommunitIoo, and to the rn norlty oommurtttl.es at large. FIRM SatBuilding Maixitenan.c TITLE OF P RSON I NING ILIAeo Nwo _ e i rgE_. I NATURE °r te DATE r %,.W�; Q - .. w. P10ass frickide any additional Irtformation available, tsgarding equal Opportunity ompirayrnoot programo now in off eot within your company, 10 25D -56 i rzpl� 13 -ois Thls shut merit be completed In full and returned with ith vendor's proposni. List and ciaseribe fully Dire ]'.nfit throe conrmts pwformad by your company, which damoll ate your ability to provide sorvioes l;n accordimoa with the In ite.rel.a, A.ttachl adcational pages if necosaary. File Wiry resorves tile, right to contact oath of the tefereneea 11awd for i Witiona.l infarmation. repvr ing yoa)- firm's quwlit1.catlu:ns,. � � I Customer Name: o C4 Of V9009 Contaothidividual; a Santa `_'"" f ;I A.dcltesn, mVeman, C� 9U0S� plyoaa hdtrrnber: 323 5$3.8 &11 EXL Contract Amount „610A,926,2_a _ e tt; �l1120'11 �� Descriptlan of soevices provided; j ��� r'e praa, �ti�, �sa��ls�a�lacls��9i, �, idi ,clsa�adlg��c:A�1i.d�tnu�e�,t � C:ustorutc,r Naive: __C1ty of La Quh#a Caw;tuct Irdtv[dnnl mg, Stwo Florvlelt Addrexs: 1 tai 9 a 2._ Phr>ne:tVwrnhrtr^ (760) 777M90 C47.aerttet �ctiwomtiti._$1i9,9pQ,,pO 6/30012 . �.�. .�...M. "feat^ , �. r... �.. �W ...�..._........�....�.......�. Lescr ptic t of sarvaoes povidmfi. '3ar to Fe pa`avldes dally j ;afdtarW servieas to va 1puo city fah lidos inctud'ar , tin c Vallee dapaxt trvrat .. ,.. �.. �s crfClsP.tbta« _. Re,; tWKS , 3 Son Bernardino Crrun Custcnrter i iarr Suporinr Courthoase Con,taet lndi:vidgaln Svcs. "T'awaaa.Ellisoa µ �ticrasss__.,ganAer ardrnc,CA52d15 J PboaeNumbert _. (909 3$'7,7.251 nMr mm C'ontrac,tAiuount: fear: 6/t/2007 of, and servdces provided: 25D -57 31 MAYOR Miguel A, Nil da MAY 9j*n ^r„ Immm CITY M-ANA14.9 Kmin VROU01% PROTEM CITY AT'I'ORNO'Y Sal Tin1(ern COUNCILMNM0485 _ ,g $urA9 R, CarvalNG C46R9 of, THE COWNCI6 Angrtllm Amomw ' Marla Hulaur P. Dmid 69mvidwi, MlaEmis Mar lhn r a9mam P,tn Wlnarone P, $armlanm Cliff" OF rSAi�"� "A AN NINANCE & MAN,AGMINNTMAYPIGH AGENCY 96 .MCC6NT6RNLAZA M.14 P.O, BOX 1900- SANTA ANA, C'NrORMA 51702 FHONf, 11141 6470442 - PAX; (714y 047.9301 P'URCHAS1NOCtIVTSION V-16 (7,14) 647.6534 .April 0, x013 At'SpD�ilsI�VGT�d� �dai,1 JAaV1TORTA. L 1k AINTE'ii SEER l VES SPONME TO QUFSa5TIONS A5V D/ CLARWICATIONS I, Wlfat is tho. aurcraat iruaaxariatt Maintatxatace Cautrac:t waath7 a, Rabpomw, Rat "uaced 333;K araually, 2, 'What d'ars d u cufxe ft cacxtraetAd Yenc%at pay tzf F?arlczng i'ees For dTau e rpFoy a to park Haar the PWIde iaepartmertc7 a- 13asiaaalae, Eathated,$470.00lnncmtlrty, ;l. P7oase clrgx111�! Rvi6at areaa aP rlle liil] �a�il�ty tore to be nfa£ntowsatxce /aleartecl by prapwaeci vencl'orl a, Response: SeOdOn 5.4.1. J4jjZ4WjMoV tho RF9 oud neri this and to amurate, 4. WhW is the last day tfie C'i'ty wi12 aoai'pt clnestlaLfs pOt't"Ig o 0t13 077 a, Responstt. Sr00 PM on Wednesday, April 10, 26J10 via cutall to t".Oau r'reuult„�.�tanf� 5, PCILICE', DUPAi2°l ,MNT.` wOOR PLANS ARE ATTACKED FOR YOUR iCEIM, LRENCT. All oth a' tatzhs axed conditions rerxtala tl3e same. sincerely; Eva Good9 Bayer — City of Santa A.aa 714 „ 64"7.6534 2501-58 I 1 I i i I I{ i. i T"feICE SUAW4A RY FORM Complete both pageo of this form and smbun4t lit propooal Total price for jaliftorld malntenalace services $ 2 8,511,02 Voor 1 of contract (Fiscal year 11.14) Total price for jonftorlal I alatenance services $ Year 2 of contra c.t (Fiscal yur 1x4,15•) Total partes for janitodal analntoance services $ 30, 45277 _ Year 3 of contract (iscat year 35-16) Breakdown u>fovilladon: Bu a 3.1.4 ^ s^ K -jw-1 44A Mond . stdfing price $;,2;„554&4 000 a.OP $ 1�G 558'.0 iVi' ©llti7li 3klrJ[T1y prECC' � ,.,,.b8 %�) $�J,2L4 orher.MorltWp11agce Ac��i?4 eq P! G A ULU aLc a t- 5 1 c copeiclOaning $ D 0 $ •�1. $ 0.10 (.'rice per sr,pRaare foot) P110:19ea'y clortning . 2 4,Eac? $ _ 2 +d.(10 :G. ?_,,420 ('Price 1Je' IlQu1') Swim ateanlilff G '({ "1' OD por yl` u V) kaypact'kerServices $ ]'•5,01 15w4.5 ,$15.91.4, *ALiy addiftivai price breakdown Womiation is WeIC©ma but shalI lae subniitted on a sep >arata (7a�t kltfaGlT0l1, t'a• G1ai:; 316Cri (Taaty IC1I'.I1Y. �1'he Ciky gives pCt�PeYCITCe CU.'I'tY'Ya p7l'ICing, I•>I'vY17t75a1;6 51aWfying a 1raxit'rintn esas14600 f OrC611kkO5 ('Wring the p0liQd Of djI.S.. pSlie'1P1g @60T4^eITLCI'b ,*al,l be glvell D1'E OleW (Wel' tl M Offer. ng ltlTquified pri..ce w0slidon, D O lx'A , 25D -59 i i i ' I I I i i PII lra�t ,,Vo RF.P 13.015 PRICE SUMMARY FORM Page 2 aazatitatmod 1,1ROPOS R STATB4ENT, I have rand, urmdemood and aurae to the terms and condiliow can all pages of tho Rpp, UPan request I altall transfer and deliver goods or sarvisas to the City in acaardanco with sadd terms aW wnditions, Maintenance (909) 606 -2756 (909) 606.6469 15644 Palomino Dr, China Hi11s Caii bmia 91709 Business,Addaass C1ty /St4Ca ZiFCode "Title ol: Atatho'rlZod Proposer printed Name 25D -60 �06M2i56 Plt�na l��rx,l�ek 28 i I i I i i I I REQUEST FOR ; COUNCIL ACTION''' CITY COUNCIL MEETING DATE: - JULY 15, 2014 TITLE: AGREEMENT WITH HOUSTON & HARRIS PCS, INC., FOR CLOSED CIRCUIT TELEVISION INSPECTION OF SANITARY SEWER SERVICES CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: :••:• _� ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading El Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute an agreement with Houston & Harris PCS Inc., subject to nonsubstantive changes approved by the City Manager and City Attorney, to provide closed circuit television inspection of sanitary sewer services, for a one -year period expiring June 30, 2015, with provisions for two one -year renewal options exercisable by the City Manager and City Attorney, in an amount not to exceed $400,000 for each term. DISCUSSION The City of Santa Ana sanitary sewer collection system comprises approximately 390 miles of sewer mains, two sewer lift stations, 48,500 sewer laterals, and 8,000 sewer manholes that are used to convey all sewer effluent from the city into the Orange County Sanitation District system. In accordance with the City's Sewer System Management Plan and the State's waste discharge requirements, the City must inspect assets and maintain the sanitary sewer system in good repair. Closed circuit television (CCTV) technology is utilized to assess the condition of sewer mains and sewer manholes and identify infrastructure system deficiencies. In the past, the City has utilized consulting firms to provide CCTV inspection of sanitary sewer services. The proposed contract for sewer CCTV inspection will provide for inspection of approximately 71 miles of pipeline (18 percent of the sewer system). On July 15, 2013, at the conclusion of a Request for Proposals (RFP) process, City Council awarded a contract for CCTV inspection services to Houston & Harris PCS, Inc. (Exhibit 2). The original agreement provided for three one -year extensions but expired before any extensions were executed. By executing this new service agreement, the parties are effectively extending the original contract as contemplated by the RFP. 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 C (invest resources and technology to extend the service life of existing infrastructure to protect the 25E -1 Agreement Amendment with Houston Harris PCS, Inc. July 15, 2014 Page 2 City's investment and support a high quality of life standard) and Strategy F (perform periodic measurements to monitor and update each asset's condition and ensure adequate funding for repair, and /or replacement costs in future budgets). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Funds are available in the Sanitary Sewer Service Fund account (No. 05617640- 62300) Interim Executive Director Public Works Agency EWG /ns /af APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez A Executive Director Finance & Management Services Agency Exhibit: 1. Agreement 2. City Council Agenda Item —July 15, 2013, Item #2513 25E -2 SERVICE AGREEMENT THIS AGREEMENT made and entered into this 15`x' day of July, 2014 by and between Houston- Harris PCS, Inc., a California corporation (hereinafter "Contractor"), 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 (hereinafter "City "). RECITALS A. The City desires to retain a contractor having special skill and knowledge in the field of cleaning, inspecting and video - taping sanitary sewer mains. B. A Request for Proposal [ "RFP "] was originally done for this project in 2013 and Contractor was awarded the Bid on July 2013. C. The original contract contemplated three one year extensions but expired before any extensions were executed. By executing this new service agreement the parties are effectively extending the original contract as contemplated by the RFP. D. Contractor represents that it is able and willing to provide such services to the City. E. In undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THE REFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter sot forth, the parties agree as follows: I. SCOPE OF SERVICES Contractor shall perform those services as set forth in City's Request for Proposal # 13 -020 for Closed Circuit Television (CCTV) Inspection of Sanitary Sewers, attached hereto as Exhibit A, and Contractor's Proposal dated May 30, 2013, attached as Exhibit A -1. All Exhibits shall be incorporated to this Agreement by this reference. 2. DELIVERY OF WORK PRODUCT OWNERSHIP Contractor warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. Contractor's contribution to the Project, including works to be produced by Contractor hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. Contractor shall deliver to City any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with City's information systems, as agreed between the Project Manager and Contractor. 3. COMPENSATION a. City agrees to pay and contractor agrees to accept as total payment for its services, the rates and charges set forth in Contractor's fee schedule, attached hereto as Exhibit B and incorporated by reference. Exhibit,l 25E -3 The amount to be expended for services shall not exceed Four Hundred Thousand Dollars ($400,000.00) annually during the term of this agreement. b. Invoices 1. The contractor shall submit a monthly invoice by the fifteenth of the month to the City for the services rendered in the prior month. 2. All invoices for work performed under this contract shall be submitted in a format approved by the City. Invoices shall include the following information at a minimum L Contractor's invoice number ii. Beginning and ending dates for services iii. City project number and/or name (if applicable) iv. Work site address /location (if applicable) v. Unit cost, subtotals and total for invoice c. Payment by City shall be made within sixty (60) days following receipt of proper invoice, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance of a professional parking control enforcement services. d. Price Adjustments The parties may annually agree to an adjustment of charges (not to exceed 2 %) commencing at the end of the first year of the agreement, utilizing the month of December statistics and supporting documentation. The index which will be used for determining adjustments to services charges shall be the most recent December Consumer Price Index (CPI) for All Urban Consumers for Los Angeles-Anaheim- Riverside CMSA, published by the United States Department of Labor Bureau of Labor Statistics or any relevant successor for the Orange County area. e. Extra Work No new work of any kind shall be considered an extra unless a separate estimate is given for said work and the estimate is approved by the City in writing before the work is commenced. The contractor will be required to provide detailed information of such extra work. Documentation of contract compliance may be required on some occasions. Work performed prior to obtaining written approval of the City shall not be included within the Scope of Work and may not be paid. 4. TERNI This Agreement shall commence on the date first written above and terminate on June 30, 2015, unless terminated earlier in accordance with Section 14, below. This Agreement may be renewed for up to two additional one -year periods upon the written agreement of the parties. The term of this Agreement may be extended upon a writing executed by the City Manager and the City Attorney. 5. CITY OBLIGATIONS City shall provide Contractor with all records in the possession of City which will be of assistance to Contractor in the performance of this Agreement. 25E -4 6. INDEPENDENT CONTRACTOR Contractor shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Contractor shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 7. INSURANCE Prior to undertaking performance of work under this Agreement, Contractor shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Commercial General Liability Insurance. Contractor shall maintain commercial general liability insurance which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Contractor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. 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 $1,000,000 per occurrence, $2,000,000 in the aggregate. Such insurance shall be endorsed to (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 (o) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. u.. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Contractor, if Contractor has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the performance of the work under this Agreement, Contractor agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. The following requirements apply to the insurance to be provided by Contractor pursuant to this section: (i) Contractor shalt maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. 25E -5 (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. e. If Contractor fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not effect Contractor's right to be paid for its time and materials expended prior to notification of termination. Contractor waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. S. INDEMNIFICATION To the fullest extent permitted by law, Contractor shall indernrufy, defend and hold harmless City, its officers, agents and employees (collectively, the "indemnified parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every kind and nature whatsoever (individually, a claim; collectively, "claims "), which may arise from or in any manner relate (directly or indirectly) to any work performed or services provided under this contract (including, without limitation, defects in workmanship and /or materials) or Contractor's presence or activities conducted performing the work (including the negligent and/or willful acts, errors and /or omissions of Contractor, its principals, officers, agents, employees, vendors, suppliers, contractors, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable for any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Contractor to indemnify the indemnified parties from any claim arising from the sole negligence or willful misconduct of the indemnified parties. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the contractor. 9. CONFIDENTIALITY If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Contractor agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Contractor disclosed in a publicly available source; (c) is in rightful possession of the Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Contractor without reference to information disclosed by the City. 10. CONFLICT OF INTEREST CLAUSE Contractor covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 25E -6 ll. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to: Public Works Agency City of Santa Ana 220 S. Daisy Avenue, Bldg A (M -85) Santa Ana, California 92703 telefacsirr le (714) 647 -3345 Attn: Water Resources Manager and City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) F.O. Box 1988 Santa Ana, California 92702 To Contractor: Houston- Harris PCS, Inc. 21831 Barton Road Grand Terrace, California 92313 Attn: Pam Houston A party may change its address by giving notice in writing to the other party. Thereafter, any notice shall be addressed and transmitted to the new address. If sent by mail, any notice, tender, demand, delivery, or other commumication 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. If sent by facsimile, any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 12. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions 25E -7 of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor nor the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 13. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 14. TERMINATION The City reserves the right to terminate the contract as follows a. In the event Contractor fails or refuses to timely perform any of the provisions of this agreement in the manner required, or if Contractor violates any provision of this agreement, Contractor shall be deemed in default. City shall provide written notice of such default to Contractor's project manager. Contractor shall cure said default within a period of two (2) working days. If such cure is not completed in a timely manner, City may assess liquidated damages or terminate the agreement forthwith by giving written notice to Contractor's project manager. City may, in addition to the other remedies provided in this agreement or authorized by law, terminate this agreement by giving written notice of termination. Contractor shall be responsible for all costs incurred by City, including replacement costs of equipment and labor required to provide service during Contractor's default. In the event of such termination for cause, City shall pay Contractor that portion of compensation specified in the agreement that is earned and unpaid prior to the effective date of termination. Contractor shall not be entitled to any compensation for lost profits it terminated for cause. b. This agreement maybe terminated without cause by City upon thirty (30) days written notice delivered to the Contractor either personally or by mail. Upon term nation, City shall pay to Contractor that portion of compensation specified in the agreement that is earned and unpaid prior to the effective date of termination. c. In addition to, or in lieu of, remedies provided in this agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor's compensation for contract services if, in the judgment of the City, the level of service falls below appropriate standards and/or Contractor fails to satisfactorily perform contract services. City shall have the right to retain funds withheld until the City determines that contract services are performed as well and as frequently as required by this agreement. 15. CONTRACTOR OPTION FOR TERMINATION The Contractor may request termination of the contract when conditions during the contract make it impossible to perform or when prevented from proceeding with the contract by act of God, by law or official action of a public authority or in the event on nonpayment by the City. Such request will require one - hundred eighty (180) days written notice prior to contract termination date requested. hl the event of nonpayment of undisputed sums by the City, Contractor shall give the City thirty (30) working days to cure the alleged breach. 25E -8 16. EMPLOYMENT OPPORTUNITIES FOR SANTA ANA RESIDENTS Contractor shall solicit and advertise employment opportunities to Santa Ana residents, The City shall inform the Contractor of areas to publicize recruitment opportunities, such as work centers and community centers. Such effort and procedure will be provided to the City for review. 17. DISCRIMINATION Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Contractor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 18. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of in connection with or by reason of this Agreement. 19. PROFESSIONAL LICENSES Contractor shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Contractor shall notify the City immediately and in writing of her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 20. MISCELLANEOUS PROVISIONS a. 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 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. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. 25E -9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written, ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R. CARVALHO City Attorne Hy: Jos do Chic ssistantCityAttorn RECOMMENDED FOR APPROVAL: EDWIN "WILLIAM" GALVEZ Interim Executive Director Public Works Agency CITY OF SANTA ANA DAVID CAVAZOS City Manager CONTRACTOR HOUSTON - HARRIS P.C.S., INC. PAMELA D. HOUSTON President 8 25E -10 EXHIBIT A A. SEWER CLEANING: All sewers shall be cleaned within 24 hours prior to CCTV inspection except as directed otherwise by the Engineer. Cleaning shall include removal of grease, roots, debris and other obstructions to facilitate the CCTV inspection. All costs associated with the cleaning of sewers and sewer manholes shall be borne by the contractor. These home expenses include and are not limited to water usage, and fees related to obtaining and securing a hydrant water meter from the City. Contractor shall return water hydrant meter to the City on an annual basis. The contractor firm shall use the appropriate nozzle or cutter head, (i.e. high velocity, water jet, root cutter, etc.), to accomplish the cleaning as required for that particular reach of sewer. Cleaning methods shall be employed to sufficiently clean the pipe so the camera can pass and can fully ascertain and document the structural and operational condition of the pipe. Any costs associated with CCTV inspection work that is necessitated by the contractor's failure to sufficiently clean the main shall be borne entirely by the contractor. The contractor shall use a tablet PC with infraMAPV software, supplied by the City, to record the location of the cleaning operation and the conditions encountered for each section of sewer main that is cleaned. The contractor shall be trained by the City in the use of infraMAP®. At the end of each day that work was performed, the contractor shall synchronize the tablet PC with the City's databases at the City Corporate Yard facilities. The tablet PC shall be delivered along with the digital video, logs and other materials when a designated areaof work has been completed. The City reserves the right to use both the comprehensiveness and completeness of the cleaning reports along with the cleanliness of the pipe as evidenced by the supplied video to ascertain whether the pipe was cleaned sufficiently. Any costs required to re -clean either an unreported or an insufficiently cleaned main shall be bome entirely by the Contractor. B, TELEVISION INSPECTION: 1. The contractor shall visually inspect, digitally encode video in WMV format (or another format if mutually agreed upon) and provide digital togs, in PDF format, of all inspected City of Santa Ana, PWA RFP — Closed Circuit Television (CCTV) Inspection of Sanitary Sewer Mains sewers. The log and video formats shall be approved by the City prior to commencement of work. Only portable hard drives and flash drives are accepted as specified on item #4. 2. The contractor shall use equipment specially designed and constructed for sewer inspection and video recording. The camera must have light sources of suitable illumination output to provide a clear picture of the entire periphery of pipe. The camera must be able to be rotated to a position that will assure that the total periphery of the sewer is in focus at all times, regardless of the diameter of the pipe being inspected. The camera, transport system, and other components of the video system shall be capable of producing a picture adequate for the purposes of the inspection as stated herein. The adequacy of the proposed equipment, resulting video and the assessment logs shall be demonstrated to the City, if so requested, prior to award of contract. The cost of such demonstration shall be borne by the Contractor. 3. A cable footage counter, accurate to within one (1) foot in 1000 feet, shall be used and shall be indicated on the monitor and recorded on the video. The date of inspection, continuous forward and reverse readout of camera distance from referenced access hole, the upstream and downstream manhole with an arrow indicating flow direction (or the database number, run number and direction of flow), the size of the pipe, the name of the street, the time of day and the project or location name as supplied by the 25E -11 City shall be displayed continuously on the monitor and recorded on the video. The color of the overlay information shall be adjusted so that it remains legible throughout the run. The footage relative to the center of the manhole at the start of each run shall be set to accurately reflect a center of manhole starting position of 0.00 feet regardless of where along the pipe and at what footage the run begins. 4. Digitally encoded video shall be compressed with the WMV format with settings specified by the City Digital video shalt be, supplied to the City on stand - alone, hard disk drive systems with plug -and -play capable USB connections. Digital video files, Microsoft Access Database files, PDF report files and disk directory naming conventions on Contractor - supplied hard disk systems shall be approved by the City prior to the commencement of work. All disks and related components will become property of the City and shall be included in the unit pricing for producing digital sewer video. 5. Every sewer main assessment shall begin with a view of the open manhole and shall proceed uninterrupted in the downstream direction with the insertion of the camera into the manhole with the subsequent sewer main assessment. Recording of video against the flow or passing through interim manholes will only be allowed with prior approval of the City or when it can be shown that conditions made it unfeasible to lift an interim manhole cover or to record with the flow. 6. CCTV inspection, monitoring and recording shall only be performed by technicians that are NASSCO certified with a minimum of two years prior experience. The contractor shall furnish qualification details and sample video for each technician so that their involvement in the project can be approved by the City prior to the commencement of work. The use of a video technician not approved by the City will be considered sufficient cause for the rejection of any related work and any costs associated with re- inspecting shall be at the Contractor's expense. 7. During inspection, the operating technician shall, along with an audio record of conditions, log a computerized assessment of the recorded sewer. This assessment shall include the location of all laterals, indicated infiltration, cracks, deflected joints, collapsed sections, ex- filtration, misalignment, roots, deposits, and other conditions or data pertinent to the physical condition of the sewer. 8. The computerized format shall be provided as a separate Microsoft Access database file for each quantity of digital video specified by the City. The contractor shall provide copies of the logs to the City in PDF format. The Microsoft Access database shall include the following: a) An inspection table listing each run number, the name of the operator, the inspection date, weather conditions, City supplied (the next sequential) database number, address or intersection of the starting manhole, direction of the inspection with respect to the flow, sewer number as supplied by the City, material (VCP, PVC, etc.), diameter of the sewer, length of the sewer, starting manhole ID number and the ending manhole ID number. b) An assessment table listing the run number, starting and ending footage of every observation, applicable assessment code, assessment code translation, additional remarks, starting and ending clock positions of observations where applicable. c) Tabular formats (table names, column names and data types, etc.) shall conform to specifications approved by the City. 9. The contractor shall submit the aforementioned video, and electronic reports summarizing all defects and conditions specified above to the City within 15 calendar days of completion of task. In addition, the contractor shall retain copies of both the digital video and logs, for a term no less than that specified for the agreement and shall make additional copies available to the City if the copies originally delivered to the City are found to be either defective or incomplete. Upon acceptance of the agreement, the contractor acknowledges that given the quantity of video to be provided and the time it will take for the City to review the video after delivery that the City's request for replacement data or video may not be timely. 10 25E -12 lb. Databases shall be numbered in sequential order with any deliverable video recording reflecting the same unique number differentiating each video. The starting database number will be specified by the City at the beginning of the contract. Barring any notifications by the City to the Contractor of changes to the sequence number, the contractor will be required to keep track of the next sequential number and use it on the electronic database files. The City will notify the Contractor of any changes to the sequence number prior to requesting additional work. 11. Prior to the commencement of work, the City shall provide the contractor a tablet PC equipped with infraMAP® software. Through the use of the infraMAP® software the contractor will have access to the complete sewer system maps and data including but not limited to: manhole ID numbers, sewer main ID numbers, street names and sewer main attributes. The City, through the infraMAP® software, will designate the locations that are to be inspected. Use of the infraMAPO software by the contractor is required. The City shall train the contractor in the use of infraMAP(D as it relates to the documentation of sewer cleaning and inspection activities. 12. If the contractor encounters conditions in the field that do not correspond to those indicated on the maps, the contractor shalt promptly inform the City of the discrepancy. If manholes or terminating cleanouts are encountered that are not shown on the maps, the contractor shall use the next available manhole number as shown on the maps for the video assessment and indicate the location where the manhole was found. The City will incorporate those changes into the maps. The contractor wilt be required to synchronize the tablet PC daily to ensure that both the City and the contractor have the most up to date information. When the contract is completed the contractor will be required to return the tablet PC to the City. The use of non - standard or incorrectly numbered manholes by the contractor in either the database or on the video overlay as shown on the digital video is cause for rejection of both the digital video and the database in which it is referenced and any costs associated with re- videoing of the main, modifications to the video overlay or rectification of the database that are necessitated by the Contractor's failure to use designated naming conventions will be borne entirely by the contractor. 13. Any digital media delivered to the City shall be labeled with the following information: a) Street name or location of sewer main and or sewer manhole if not in a City street, and limits of inspection for the sewer reach included; (e.g., McFadden Avenue sewer between Grand and Standard) or the task name given by the City. b) Date of inspection. c) Database number 14. All digital reports shall be in (pdf) format and contain as a minimum the following information: a) Date and time of inspection b) Name of contractor c) Names of operating technician/inspector d) Pipe size, material, and total length e) Number and street or intersection location and the City designated number for the starting manhole. f) Number and street or intersection location and the City manhole number for the ending manhole. g) Direction of inspection (upstream or downstream). h) The database number. it 25E -13 i) NASSCO rating scores including as a minimum: Quick Structural Rating (QSR), Quick Maintenance Rating (QMR), Structural Pipe Rating (SPR), Maintenance Pipe Rating (MPR) and Overall Pipe Rating (OPR). j) Observations, comments, recommendations, laterals referenced to footage counter and video clock (tape counter). 15. All digital reports for sewer manholes shall contain as a minimum the contained information on the Level I of the MACP by NASSCO guidelines and all items listed on item 14 listed above as applied to sewer manholes. 16. At all points within the sewer showing defects, laterals and sewer appurtenances, the Contractor shall stop the camera, rotate (up to 360 degrees) and/or tilt the camera lens to ensure adequate video coverage. All defects shall be rated /scored and logged in accordance with NASSCO guidelines. 17. Each database shall have runs numbered in sequential order starting with one (1). The operator shall proceed to the next run number whenever the camera is withdrawn regardless of the reason, encounters the next manhole, next cleanout or when a run is terminated. Digital video files (one for each run) shall conform to the indexing system with each file being designated by concatenating the database number with the run number (i.e,: 1179 -01. WMV would designate the first run on database number 1179). If such naming by the contractor is found to be technically unfeasible, the contractor shall deliver the files, along with any tabular information that would be necessary for the City to automate the file naming process. Any file naming convention that does not conform to the aforementioned requirements is subject to prior approval of the City. 18. Prior to the commencement of work, the contractor shall demonstrate to the City the procedures that shall be used for the inputting of City manhole numbers, run numbers, street names, or any other data that is encoded in the video database and how the quality and uniformity of that data will be guaranteed. 19. The camera shall be stopped and/or backed up to view and analyze conditions that appear unusual or uncommon to a sewer main in good condition. There shall be no loss of video quality at any time. 20. As the video is produced, the technician shall provide an audio narration of the inspection to include identification of the sewer main location, by street intersection location or street address as well as by City manhole number, inspection direction (upstream/downstream) and complete descriptions of the line conditions as they are encountered. The audio portion of the video recording shall be free from electrical interference, feedback, hum, and background noise. 21. If the camera cannot pass the entire sewer reach from its point of insertion, the reach shall be inspected from both directions. The inspection logs for the reach shall include an identification of the nature and location of the blockage. The contractor shall notify the City immediately of any such obstruction so that it may be repaired or mitigated by the City and/or the contractor so that work may proceed. 22. Video runs showing condensation or submersion of the lens, poor or out -of -focus images, poor audio, or otherwise poor image quality shall be cause for rejection and may necessitate re- inspecting at the contractor's expense if the City determines the video run is not of acceptable quality. 23. In special cases, when directed by the City, the contractor shall be responsible for plugging manhole outlets during CCTV inspection. The sewer lines will be in service at the time of inspection. 24. Television inspection of sewer mains with high volumes of flow (pipe running 113 full or more) will be done at night between the hours of 10 p.m. and 5 a.m. unless otherwise 12 25E -14 directed by the City. No adjustment in cost shall be allowed for night work. Notwithstanding, the Contractor shall always use whatever mechanical means are available, including modification or changing of the camera wheels or treads, to insure that the image is recorded in an upright, un- rotated position. The City reserves the tight to reject any video where changes in the orientation of the camera could have been corrected by such modifications or by performing the work during periods of low flow. 25. Traffic control for sanitary sewer inspection shall be the responsibility of the contractor and shall conform to the work Area Traffic Control Handbook. (WATCH). Flashing arrow boards shall be used on arterial streets. 26. Within two (2) working days after being notified to inspect a particular section of sewer main, the contractor shall begin CCTV inspection, and shall diligently pursue that work to completion. The Contractor shall perform all sewer manhole assessment inspections services per NASSCO standards by the Manhole Assessment Certification Program (MACP) Level I. Level I (MACP) shall include all information included on Level I (MACP) detailed therein in addition to the, using valid MACP defect codes. 27. The contractor shall be an independent contractor capable of providing experienced, knowledgeable and professional staff. The contractor shall be responsive and maintain excellent working relationships with city residents, businesses, government officials and City staff. The contractor shall provide adequate staffing levels at all times and adhere to established schedules. All vehicles and or towed equipment shall carry "City of Santa Ana Authorized Contractor" magnet sign affixed and visible. The contractor shall comply with all federal, state and local laws, rules, regulations, ordinances, and statutes, including but not limited to these contract documents. 13 25E -15 EXHIBIT A -1 CONTRACTOR'S PROPOSAL MAY 30, 2013 14 25E -16 son n AS A Larry Houston (909) 422 -8990 IhOListon@hOLlstonandharris.com This proposal shall remain valid for a period of not less than 90 calendar days from date of rlay submittal a hAay 30 2013 Pamela 0. Houston, President Date City of S VVa Ana Sid di 3.010 Closed Circuit Tol wiv 10A (CC N)Inopo 0on 0 5anl Wry S o,o,s RE: Closed Circuit Television (CCTV) Inspection of Sanitary Sewers may,. :x.. .. __ .. .... ... Letter of Offer 21831 Barton Road 218716a rtun Road C rand To rtacc, CA 92317 City of Santa Ana °} Cesar E. Barrera MS, PE (909) 422-8990 Te((909)422 -0841 Fax CA d894157 Public Works Agency State Contractor's License t; 884167 3rd Floor, Ross Annex 20 Civic Center Plaza Santa Ana, CA 92702 Larry Houston (909) 422 -8990 IhOListon@hOLlstonandharris.com This proposal shall remain valid for a period of not less than 90 calendar days from date of rlay submittal a hAay 30 2013 Pamela 0. Houston, President Date City of S VVa Ana Sid di 3.010 Closed Circuit Tol wiv 10A (CC N)Inopo 0on 0 5anl Wry S o,o,s RE: Closed Circuit Television (CCTV) Inspection of Sanitary Sewers may,. :x.. .. __ .. .... ... Bidder: Houston & Harris PCS, Inc. 21831 Barton Road 218716a rtun Road C rand To rtacc, CA 92317 °} Grand Terrace, CA 92313 (909) 422-8990 Te((909)422 -0841 Fax CA d894157 www.houstonandharris,com State Contractor's License t; 884167 Assigned Primary & Proposal Evaluation Contact: Larry Houston (909) 422 -8990 IhOListon@hOLlstonandharris.com This proposal shall remain valid for a period of not less than 90 calendar days from date of rlay submittal a hAay 30 2013 Pamela 0. Houston, President Date City of S VVa Ana Sid di 3.010 Closed Circuit Tol wiv 10A (CC N)Inopo 0on 0 5anl Wry S o,o,s 25E -18 - may,. :x.. .. __ .. .... ... . .... R^ aC 218716a rtun Road C rand To rtacc, CA 92317 Shc'd P73i. ". 909 -022 A990P 909422 OO4IF CA d894157 25E -18 Firin and Personnel Experience Houston & Hards PCS, Inc. was established in June _88„..4Ciginally as a partnership, incorporating In 2002, for the purpose of providing quality video pipe inspection and hydro - washing of sewer, storm drain and water lines to private contractors, engineering firms, municipalities and other government agencies ell With the overwhelming growth for the need of our services we have taken the initiative to become knowledgeable and up -to -date on the latest technology available, as well as maintaining our staff and our fleet size. Due to the rapid changes in the video Industry we pit have developed an Information Technology Department to accommodate the numerous deliverable options available. This depaartme `is °also capable of developing customized data collection programs specific to clients' need. The IT Department has certified professionals with the ability to communicate with clients on all levels of computer p knowledge. We use only high - resolution 3 -lux color cameras to do all our video inspections. All cameras have the ability to pan and tilt wlth a 380 - degree view of the pipe. We also have a zoorn option, which will highlight small defects. This zoom option will also allow us to view down the pipe If we need to see beyond debris that has impeded the progress of the immediate line. We have added the LSD Nova Star cameras which provide higher levels of picture quality and Improved reliability with low heat output. Each video unit is equipped with both >W a Nova Star camera and a conventional Omni II or III mainline camera. All of our operators are familiar with industry standards for inspection of all types of new and existing underground conduit as well as being NASSCO certified. Sanitary sewers, storm drains and water lines are all within our area of expertise. Defect codes and observations are based on the needs of our industry to reflect the most comprehensive and detailed Oity of Santa Ana Bid 413 -020 yy Olosed Grcult ieluVj5(- I,i6CTV) lnspaotlonof 5anirary SOwors p-� ❑� 21831 Galion Road �,,yy y 4,yd it Grand Terace, CA 92313 r��''i�al��r 909�1229440P 909A22OOA7F — :^'e+ ^1 CA 408,1157 Wss° 25E -19 Firm and Personnel Experience report, meeting the requirements of WDR, NPDES and municipal regulations. These reports can be modified to fit the specific needs of every client. In addition to marking defects, operators have been trained to read onsite plans to identify material type, pipe size, as well as, the type of structure they are entering with the camera equipment. With 25 years' experience In the field of CCTV inspection, we have modified our equipment to ensure the most efficient level of production, in conjunction with the highest quality standards. Both wheel and tractor crawlers are utilized to maximize the efficiency of pipe ranging in size from 6 -24 inches in diameter. Storm drain tractors are available to handle large diameter lines from 24 -120 Inches. The storm drain tractor also offers advantages of rM maneuverability to handle pipe containing debris or sharp radii that conventional equipment cannot handle. For high flow, large diameter lines that need a maintenance inspection, custom float boats are available, eliminating the need for a costly bypass, We are always exploring ways to offer our clients more efficient CCTV Inspections, Quality and production have always been our goals and maintaining the newest technology requires a specialized technician who understands the complexities of setup, operation and design of new generation cameras. As such, we have added this technician to perform repairs eliminating costly downtime. In addition we are able to modify internal settings orfailed parts keeping cameras functioning longer and with improved capabilities. Picture settings, modified lighting for large diameter pipelines, improved distance with higher output settings are just a few of the modifications performed in-house. More work and better quality equates to cost savings and accurate assessments. Houston & Harris PCS, Inc. uses Vactor 2100 Series combination cleaning vehicles for all our debris removal projects. Vector units have both 9 and 12 yard debris tanks along with ra Positive Displacement blowers. All combination vehicles have the capabilities of BO GPM M 2500 PSI. Units can be equipped with specialized nozzles, chain flails, root saws, and flex City Of sans And Old M-029 e' .y' Cloeed Clrcult TaNyis !on (CCTV) I119pedlon of 5anitapt5¢vm15 - 21831 Gallon Road Gmntl i¢rrace CA 92717 4�^ii ' 909-1 „2 -8990P 999- 122 08 4 1F CA 1198116? 25E -20 -F I L , A� Firm and Personnel Experience hose for remote access or hydro-excavation attachments to handle any situation, which the client might require, For projects with environmental issues, portable storage bins can be utilized to remove all debris from the location and be disposed of in approved dumping facilities. Utilizing the latest CIPP technology, we can now provide point repairs. Houston & Harris PCS, Inc. offers products to eliminate I & I problem lines as well as eradicate root intrusion. Problem laterals can be repaired with the new lateral sleeve covering both the mainline and lateral connection point. Our updated Triad 2310 line locator with 116KHZ and 512KHZ sondes, allows us to find both metallic and non-metallic lines. This state of the art device displays both location and depth, making problem buried manholes easy to locate and raise to comply with the new WUR requirements. Houston & Harris PGS, Inc, can also supply cities with a complete WDR program from start to finish; beginning with a detailed, fully digital CCTV assessment, to assembling a team which offers GIS mapping, industry software to merge field data, as well as SSO reporting Protocol, If a completely out- sourced program is desired, we can put you in touch with an experienced engineering firm for a total SSMP. Houston & Harris remains committed to the continued high quality service provided for the public works industry. clef a Santo Ana Rid #11020 Closed Circuit Television 2 CC TV) Insfan Ctian of Sanilarf Sewers 21081 Barton Road 00 l2rl Grand Terrace, CA 92717 #] qA✓l� 9422 -8990 P 909 422 -0841 F .µ4i +" CA #084107 25E -21 as O O 25E-22 NV ai UU K5IJ O 0 u ro 25E-23 Firm and Personnel Experience - Key Personnel Larry Flotiston, Operations/Project Manager, 1902 to present • Contractor ALicensed • .ASSGO, Certified - --,.- • Oversees Field Operations Certified in Confined Space Entry • Site Reconnaissance • CPR/FlrstAld • Liaison on municipal contracts Temporary Traffic Control Certified • Certified Hazwoper Vactor & Video Operator Sergio Mora, QC 11TManager, 2002 to present • ITT Graduate - Electronics and Computer Science • nSSCO.CartNed A+ Certified • Ongoing Contract Data Base I Deliverable Conversions Administration Elizabeth Butler, 2002 to present Ongoing training of company operators on using Wincan v.8, Windows XP, ongoing training of operators on defect codes. • Office Manager, Estimating & Contract Administration Shivon Constantine, 2002 to present Prevailing Wage Payroll Administration CI•j o15,tnta Ann Bid #1 3-020 Closefl Clruu It Txlovivon (CCN) luspealion Of 6wulary sown," y. ,pr JR 4i o. y 21 Y31 Barton Roud Crand Tettacq CA 92917 p`� °�'<" YflY+I'2 ?d990P 809.12id0�tlr &A 688,1107 25E -24 Firm and Personnel Experience - Key Personnel Frank Tellez, Senior CCTV & Vactor Operator, 2001 to present • Vactor Operator . Certified Hazwoper • Video Operator • CPR /First Aid is Field Supervisor • _NASSCO Certified • Certired in Confined Space Entry • Temporary Traffic Control Certified AngelOrnelas, CCTV Operator, 2002 to present is Video Operator • Vactor Operator Trainee • Certified in Confined Space entry • CPR /First Aid Nq$SC.oLertifipcl_ - • Temporary Traffic Control Certified Brad Houston, CCTV Operator, 2007 to present • Video Operator • Certified In Confined Space Entry • CPR/First Aid • CIPP Installer • NASSCO Certified • Temporary Traffic Control Certified Rosendo Rivera, Vactor Operator, 2002 to present • Vactor Operator • CPR /First Aid • Certified in Confined Space Entry . Temporary Traffic Control Certified Alex Leandro, Vactor Operator, 2004 to present • Vactor Operator • Certified in Confined Space Entry City Of bonlo Ana Bid A11-020 Ci.'M Ctrcult T,J,, ion 1CC Vj inspsction or Sanitary S.w¢ra • CPR/First Aid Temporary Traffic Control Certified q 21831 Barton Road (l y, � U Tom Grind Nita,., CA 0U13 .ii3'! s} 909422.8990 F 9054224841 F CA399410 25E -25 Firm and Personnel Experience - Key Personnel Juan Maehain, Vactor Operator, 2005 to present Vector Operator CPR /First Aid Certified in Confined Space Entry Temporary Traffic Control Certified Juan Chavez, Vactor Operator, 2006 to present v"1 • Vector Operator • CPR/FirstAid I • Certified in Confined Space Entry • Temporary Traffic Control Certified PIN- Jerry Zamorano, 2010 to present • Laborer CCTV Trainees • NASSCO Certified �h Jeremiah Avila, 2010 to present • Laborer * . CCTV Trainees . NASSCO Certified Jack Wickman, 2005 to present . RSTTrained . FCC Licensed Broadcast Engineer . Research & Development 7 airy of sama Am Wit 013.020 tllated Cirenil Telavisi•n (CCN) Ihapettipn of Sanllnry 5n1ro11 J • Certified in Confined Space Entry • Temporary Traffic Control Certified • CPR /First Aid • Certified in Confined Space Entry • Temporary Traffic Control Certified • CPR /First Aid • Camera /Video Equipment Repair Technician 21571 Burton Road �•� z py°„�r a„iJg G,, nd ratite, CA 9200 3i 909422.0990 R 909422 -0041 F GA M4I61 ir1 25E -26 lznplementation Plan Cleaning Operation Houston & Harris PCS Inc. uses Vector 2100 series combination cleaning units. Eighty gallon per minute water pumps and high output positive displacement blowers remove all levels of debris. Each truck is equipped with a variety of cleaning nozzles as well as chain ,911!�% flails and warthog rotating nozzles to remove roots, and heavy deposits. Crews have been K trained to use the proper nozzle for any situation they may encounter, be it normal sewer grit, roots, grease or mineral deposits. We also have root saws and milling tools to remove large roots, protruding taps, etc, when encountered. The cleaning operation follows the same methodology as the CCTV portion. Beginning at the top of each area and continuing downstream until completion of all the line segments. Hydro washing crews work closely with the CCTV. gpe,r „ „atoXS, to ,ensurer.the- cleaning _... operation is accomplishing our goals of providing the proper environment for the camera to clearly document all defects, laterals and manholes in the inspection area. All vehicles and operators are linked via phones /radios for rapid communication as well as trained to work closely while simultaneously performing their specific tasks. A cleaning log is generated to better aid with ongoing operation and maintenance services. Utilizing the combination units is advantageous for working quickly through a system to remove debris as it builds up and not just push it down the line or rely on traps which can often let debris pass through. By removing debris from the system directly into the debris (try tank, potential spills from contaminated water or solids are eliminated. In order to provide maximum efficiency, Houston and Harris coordinates cleaning and video services. Maps are reviewed regularly by both the cleaning and video operators. Coordination of tasks such as, manhole locations, safety and traffic needs, as well as, debris and flow are regularly communicated across both services by the operators. 25E -27 CRY a1 Santa Ana Sid *11 020 Clasa4 Ciraalt 7oiovisw (CCTV) Inspxlloo of Sanitary Sawars p� x� ,qy��p4��yy USTON 21831 Barton Road Grand Tara.. CA 92917 909 -122 -8990 P 705 - 42z -09n1 r R) CA 9984187 25E -27 a PI After reviewing them a ps to determine the start location, the opeiatorwilI fill the Vector tank 1 with water utilizing the water meter obtained and secured by Houston & Harris as prescribed" in the specifications for hydro - flushing purposes. This procedure will occur throughout the day. The operator then assesses manhole locations ensuring the safest position of the vehicle prior to setting up to begin the washing process. Included in this set -up procedure 3 are assurances of traffic cones around work area and equipment as well as the use of gas detector meter readings indicating safe removal of manhole lids. Traffic control will be provided per Work Area Traffic Control Handbook when necessary. p Once the location is deemed safe, the manhole lid is removed. The appropriate cleaning 1 nozzle for the task is chosen and attached to the Vector hose. The operator starts on the downstream manhole and runs [tie nozzle to the upstream manhole to hydra -flush the line k as the hose is pulled back. When heavy debris is encountered, a vacuum process is also applied to the line. Houston and Harris operators have utilized the vacuum process, along with the hydro - flushing to provide the most effective combination of resources for success in heavy debris. After the hydro-flushing y g process is complete, the operator replaces the manhole cover back an the manhole and safely moves to the next location. Documentation is validated by the operator recording- all the required information on the tablet PC withtnfraMAP software' supplied by the City. Houston and Harris personnel possess experience and have demonstrated proficiency in the infraMAP software. This experience and expertise will provide the maximum capacity for smooth systems and coordination with the city's infrastructure. 61hf of 9an(a An., 0id 413 020 Cloyed Cimvll Te(evl9lan (CCTV) Inspamlan of "nitir, seW '. . ...... ...... - -- 219918ulon Road Orend l'nrmeq CA 92713 p y+, ggg+�n xx.+ 904 t2E ll99PP 905.4n,0141P CA U991167 a 25E -28 f�- 1� y r Implementation Plan This process is repeated for each line segment. Vacuumed material remains in the debris tank until properly disposed, per Orange County Sanitation District requirements. Although conditions of the sanitary sewer systems may vary, and impact daily production, the typical production ranges for pre - Inspection cleaning are 3,500LF to 5,500LF per 8 hour work day. Video Inspection Operations The video inspection begins at the upstream portion of the designated start location working downstream systematically providing a complete and accurate assessment of each line segment. This assures accurate, completed sections prior to moving to the next location thus eliminating the possibility of skipped or missed runs. Whenever necassana reverse set up is attempted prior to passing to the next section. The field supervisor will survey the inspection area during daytime hours, the day prior to reassure all manholes are marked and accessible. Houston and Harris personnel possess experience and have demonstrated proficiency in the 1nfmfv1AP s9,9Ware. This experience and expertise will provide the maximum capacity for smooth systems and coordination with the city's infrastructure, All operators are NASSCO /PACP /MRCP certified and receive additional training and refresher exams in the operation and consistent recording practices required at Houston & Harris. Each line is approached with the same methodology and accuracy, Picture quality and digital video are standards that must pass through a thorough Inspection in our CC Department. Every line segment is examined for quality, accuracy and completeness prior to the client receiving the finished product. City or Santa Ana Sid 913.020 01o$ad CImUl1 To Iavision (CC TV) In op ad of Son Rat, SaWOn q.d OJ1Y 21831 saurian Road Grand Tornce, CA 92713 909- 92b8990P 909 422 O9 -01 F CAA MOST 25E -29 Implementation Flag In order to provide maximum efficiency, Houston and Harris coordinates cleaning and video services. Maps are reviewed regularly by both the cleaning and video operators. WA Coordination of tasks such as, manhole locations, safety and traffic needs, as well as, debris and flow are regularly communicated across both services by the operators. The following procedures will be followed on a daily basis: After reviewing the maps to determine the start location, the operator assesses manhole "i locations to ensure the safest positioning of the vehicle, and sets -up to begin the video process. Traffic control will be provided per Work Area Traffic Control Handbook when necessary. Included In set -up procedures are assurances of traffic cones around work area and equipment and use of gas detector meter readings indicating safe removal of manhole lids. Once the location is deemed safe, the manhole lid is removed. The operator enters necessary line identification information including, manhole number; line ID number, and pipe material & size Into data base. The camera is then placed on the " ground next to the open manhole. Using the camera view, the operator records the visual inspection of the rungs, the cone and shaft, in- coming and out -going lines to assess condition The operator lowers the camera into the channel to record and view the invert of the pipe. Once the invert view is recorded, the video equipment is set -up for inspection of the line. The operator's voice is recorded reading the video overlay. The operator controls the camera » in the line to video all views and is responsible for proper camera height and lighting, pipe defects such as, breaks, cracks, off -set joints, roots, grease, infiltration and ex- filtration are noted in audio and through data entry. Defects are archived as Jpeg files. Other observations such as service connections, break -in connections and protruding taps are ' also noted. Clly of Santa Ana aid 411.029 Closed ClIcult TeieVi910n l m) inspection er sanitary sewer% - -- �7ggyqp�.p2189 I Barton Road Grand Terrace, CA 92117 909-122-3990N 9094220B ti CA 199!197 L+� 25E -30 t4 9 I Video van units are equipped with backup cameras as well as replacement parts along with trained, qualified individuals who are able to make minor field repairs, eliminating costly downtime. Production levels vary between 2,800LF and 4,OOQOLF,Qf pipp.nper 8 -hour day. These numbers are based on normal field conditions. Excessive debris and or numerous remote setups encountered in the field may cause these numbers to decrease. Manhole Inspection Effective manhole inspection and rehabilitation is necessary to remove excessive manhole infiltration and inflow, improve manhole structural integrity, address public safety related issues, and implement general system maintenance needs. Houston and Harris will provide expertise and services for implementing successful manhole inspection. Various inspection techniques and procedures for analysis, design, and construction exist. Houston and Harris personnel utilize the NASSCO Manhole Assessment Certification Program (MACP), and are MACP Level 1 certified, Through inspections, system n'anaCM; cotlditlons will be Identified, system maps will be updated, and pipeline maintenance needs will be evaluated. Reports, utilizing valid MACP defect codes will be provided to city personnel as requested. Houston and Harris personnel are capable, experienced and professional. Adequate staffing levels will be maintained to ensure timelines and established schedules are met. Quality Control /Data Conversion All recordings are stored on a removable, digital hard drive which consists of videos, Jpegs and a Microsoft Access database for the inspected work and are delivered to the Houston & Harris Quality Control Department daily, City of Santa Ana Bid Al2.020 Cl.'ad C1'mt Talbvinion(CM) Inpnl.don of SanNiq samrs o=il i-On 21871 Barton Road trend Torma, CA 92111 009 -122 8990P 909.422J1941F CA 43R 25E -31 Implementation Plan i r Every line inspected is checked for quality, accuracy and confirms all contract requirements are met. i Data inserted in the database is checked for accuracy, compared to the City's Map and to j AeA an Excel Spreadsheet, supplied by the City, which includes all line segments for the entire sewer system. During this process we check the awash logs ensuring they match the sewer lines inspected that particular day. Once all data is verified to be correct the QC process begins. Our QC tech views each video in its entirety first checking for proper lighting and centering of the camera. The video must have a clear picture, free of any kind of distortion or interferences and the audio must be clear and concise. Every line must also begin with a view of the open manhole proceeding uninterrupted in the downstream direction with the insertion of the camera into the manhole. All sewer lines are inspected using NASSCO's standard coding system. During the QC ° process all lines are checked for the proper logging of each defect. All defects must be accurately coded using the proper NASSCO code, o -clock position(s) and footage. The inspection shall include location of all laterals, cracks, roots, deposits, infiltration, ex- filtratlon and other conditions pertaining to the sewer line. If during the QC process the line is deemed to be unsatisfactory, the line is rejected and re- Inspected. Aft-or the lines have passed the QC process they are saved on multiple hard drives ensuring nothing is lost if the working hard drive should fail. Once this step is complete all lute segments are logged on an Excel Spreadsheet. This spreadsheet shows progress of our current task and includes important information, we feel the City should be aware of; including RVP information, Red Flags, etc. Any lines having city of Santa Aria aid 917-020 Clasod CUCUIt Yalemsion �CG'Nj L+apnclian of 6wWry Sawors t-z .— - sy 21831 Barton Roaa H✓,/h� Grand Terrace, CA 92717 ARRIS .. - gog.12289Sa P 9o9422 mU t F 25E -32 ;° major defects or need immediate attention from the City will be forwarded to the proper 04 personnel as a Red _.._ p The deliverables process consists of four steps. The first step requires breaking down the current task into folders with unique database numbers provided by the City. Each folder will contain videos, Jpegs, and MS Database & PDF reports. The second step involves checking the database for blank gaps or unnecessary information. This ensures a smooth transition ti when merging the data into the City's system. The third step consists of printing the hard copy report along with a PACP summary report for each line segment. This PACP summary report will show all lines in need of immediate attention. Every line segment will be categorized with a rating from 0.5. The line segments needing immediate attention will have a rating of 5 and will be placed at the top of the report for quick viewing. During this process a the PDF reports are generated using Adobe Acrobat. The final step entails converting the original Mpegl videos into the City's standard WMV video, The video size will be reduced to about 50% of the original size while still providing a high quality video. After the completion of this step all data will be put on a standard JSB 3.0 hard drive and delivered to the City for review. During the delivery process Houston & Harris will work with the City of Santa Ana and /or infraMAP to ensure a smooth transition between the Microsoft Access Database and the City's Sewer Management Program. ` �3 Cite cl Sanla Aoa Old 9I3-92o Closed Cireult Telnvbien {CC Nllnvpectlon of Sanllary Savers 21831 Barton Road 1yq� grul'y Grand Terrace, CA 9280 37,3,.`" 90"2M9911 P 909422 -0841 p CAM884187 25E -33 ZVI Project Timeline All applicable line segments will be cleaned and videoed, per the enclosed work plan. The anticipated linear feet (LF) of line segment completed for both cleaning and video per 8- hour day is approximately 3,0001-F— 3,200LF. The proposal estimates approximately 300,000 LF of line segment for the entire project. p4� PROJECT TIMELINE Hydro wash based on U00.7,200LF per day - r- ''�,.a r 10:' Video Inspection based an 3,000�3,200LF per day �V Manhole Irsaac60n based on 38 per day ..- i "VJ Y rd...�. `y 0 20 40 80 80 100 1.20 � pro;: c! linglm'y �__ =5 ° ^; on A.hat1! :rerkday5 pty of Sente Antl But *11A ^_0 Closed Circuit TetdYISton [CCTV) ln3peC110n of onnitary Sevrers 21331 Barton Road Grand Tabnne, CA 92117 9094229990 P 9094 ?2,08It F CA x98-1 157 25E -34 EXIFUBITB CONTRACTOR'S FEE SCHEDULE l5 25E-35 City of Santa Ana, PWA RFP— Closed Circuit Television (CCTV) Inspection of Sanitary Sewer Mains Certification - I certify that I have read, understand and agree to the terms and conditions of this Request for Proposals. I have examined the Scope of Services (Exhibit A) and am familiar with the scope of work locations. I am familiar with all the existing conditions and limitation that may impact work requests. I understand and agree that I am responsible for reporting any errors, omissions or discrepancies to the City for clarification prior to the submission of my proposal. Proposal Item Price - Pricing shall be based on an (hourly cost, time and materials basis see narrative) for services described in Exhibit A, Fee must be inclusive of all costs, including but not limited to, direct and indirect costs for labor, overhead, incidental supplies, travel, mileage, and fuel. Any special materials will be purchased by the contractor only after discussed and authorized by the City projects manager or designee in writing. Closed Circuit Television CCTV Inspection of Sanitary Sewer Mains FEE SCHEDULE TO: CITY COUNCIL OF THE CITY OF SANTA ANA FROM: Houston & Harris PC$, Inc. REQUIREMENT The undersigned declaros that he /she has carefully examined the request for proposal, that he /she has examined the Proposed Scope of Services, and hereby proposes to furnish all material and do all the work required to complete the said work in accordance with said Proposed Scope of Services, for the unit price(s) set forth in the following schedule: Item {I Bid Item Unit Quantity Unit Price Amount 1. Sewer Main Hydro Washing LF 300,000 $ 0.305 91,500.00 (Cleaning) 2. Sewer Main CCTV Inspection LF 300,000 $ 0,395 $ 116,500.00 3. Sewer Main Data Processing LF 300,000 $ 0.11 $_33000.00 4. Sewer Manhole CCTV Inspection EA 1,000 $ 52.50 $ 52,500.00 5. Sewer Manhole Data Processing EA 1,000 $ 2.80 $ 2,600.00 6. Hydro -wash (Cleaning) Truck — (Per HR 1,000 $ 244.00 $ 244,000.00 section VI, J. hydro wash unit rate multiplied by 800 $ $ 30 25E -36 City of Santa Ana, PWA RFP — Closed Circuit Television (CCTV) Inspection of Sanitary Sewer Mains Item # Bid Item Unit Quantit Unit Price Amount 7. CCTV (Video) Inspection Truck — HR 1,000 $ 158.00 $ 158,000.00 (Per section VI, J. CCTV Inspection truck rate multiplied by 400 TOTAL $ 700,300A0 Houston & Harris PCS, [no 909422 -8990 Fax: 90OA22 -0641 LEGAL NAME OF COMPANY PHONE AND FAX NUMBERS 21831 Barton Road, Grand Terrace, CA 92313 — BUSINESS ADDRESS Pamela Houston President PRINTED NAME OF AUTHORIZED AGENT TITLE May 30, 2013 phouston@houstonandharris.com SIGNATURE OF AUTHORIZED AGENT DATE E -MAIL ADDRESS 460496452 864167 FEDERAL ID NUMBER (IF APPLICABLE} CONTRACTOR LICENSE NUMBER (IF APPLICABLE) THIS FORM MUST BE COMPLETED AND INCLUDED WITH THE PROPOSAL. PROPOSALS THAT DON OT CONTAIN THIS FORM WILL BE CONSIDERED NONRESPONSIVE, 31 25E -37 25E -38 REQUEST FOR COUNCIL ACTION w� CITY COUNCIL MEETING DATE: JULY 15, 2013 TITLE: AGREEMENT WITH HOUSTON & HARRIS PCS, INC., FOR CLOSED CIRCUIT TELEVISION INSPECTI OF SANITARY SEWER SERVICES , RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: ❑ As Recommended ❑ As Amended ❑ Ordinance on I" Reading ❑ Ordinance on 2 I Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute an agreement with Houston & Harris PCS, Inc., subject to non - substantive changes approved by the City Manager and City Attorney, to provide closed circuit television inspection of sanitary sewer services, in an amount not to exceed $400,000. DISCUSSION Santa Ana's sanitary sewer collection system is comprised of approximately 390 miles of sewer mains, two sewer lift stations, 48,500 sewer laterals, and 8,000 sewer manholes that are used to convey all sewer effluent from the city into the Orange County Sanitation District system. In accordance with the City's Sewer System Management Plan and the State's waste discharge requirements, the City must inspect, assess, and maintain the sanitary sewer system in good repair. Closed circuit television (CCTV) technology is used to assess the condition of sewer mains and sewer manholes, and to identify infrastructure system deficiencies. In the past, the City has used consulting firms to provide CCTV inspection of sanitary sewer facilities. The proposed contract for sewer CCTV inspection will provide for inspection of approximately 71 miles of pipeline (18 percent of the system). The project budget is set at $400,000. A Request for Proposals for CCTV inspection of sanitary sewer services was advertised and sent to six firms. Five proposals were received and evaluated by a five - member selection committee. Three firms scored above the minimum acceptable score of 70. The sealed fee envelopes were opened and analyzed for all firms with a score above 70. Listed below are the responding firms and their respective scores. Agreement with Houston & Harris PCS, Inc. July 15, 2013 Page 2 Company Name Location Total Score ( %) Proposal Fee Houston & Harris PCS, Inc. Grand Terrace 95 $298,30100 Innerline Engineering Corona 90 $298,000.00 National Plant Services, Inc. Long Beach 84 $318,500.00 Tunnelworks Services, Inc. Whittier 64 Not Open Nor -Cal Pipeline Services Long Beach 49 Not Open Houston & Harris PCS, Inc., was selected as the top -rated firm. Their proposal was complete and includes all the work required to clean and inspect sewer mains and sewer manholes. Their work includes traffic control, diversion of sewage flow where needed, root cutting where required, disposal of sewage - cleaning waste, and data processing to provide and meet the City's requirements. The bid pricing was based on cost per linear feet of sewer (300,000), and per manhole (1,000) inspection. Based on the bids received, staff anticipates an additional 80,000 linear feet of sewer and 600 manhole inspections will be completed within the $400,000 budgeted for this project. Staff recommends that Houston & Harris PCS, Inc., be retained for this project. This firm is well qualified and reputable, and possesses vast experience on similar types of projects. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT Funds are available in the Sanitary Sewer Service Fund (Account No. 05617640- 62300). APPROVED AS TO FUNDS AND ACCOUNTS: r r-- Raul Godinez II, P Francisco Gutierrez }� Executive Director Executive Director Public Works Agency Finance & Management Services Agency RG /NS Exhibit: 1. Contract Agreement 25E -40 INSURANCE NUT ON TILE A- 2013.110 ORKMAY (1`J.' PROCEED CLERK OF COUNCIL DATE: u 15 2ar3 SFaRVICE AGREEMENT THIS AGREEMENT made and entered into this 15'h day of July, 2013 by and between Houston - Harris PCS, Inc., a California corporation (hereinafter "Contractor "), 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 (hereinafter "City "). RECITALS e A., The City desires to retain a contractor having special skill and knowledge in the field of cleaning, /1 inspecting and video- taping sanitary sewer mains. r� B. Contractor represents that it is able and willing to provide such services to the City. C. Iii undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the patties agree as follows: SCOPE OF SERVICES Contractor shall perform those services as set forth in City's Request for Proposal if 1.3 -020 for Closed Circuit Television (CCTV) Inspection of Sanitary Sewers, attached hereto as Exhibit A,, and Contractor's Proposal dated May 30, 2013, attached as Exhibit A -1, All Exhibits shall be incorporated to this Agreement by this reference. 2. DELIVERY OF WORK PRODIJCT - OWNERSHIP Contractor warrants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. Contractor's contribution to the Project, including works to be produced by Contractor hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or patty. Contractor shall deliver to City any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with City's information systems, as agreed between the, Project Manager and Contractor. 3. COMPENSATION' a, City agrees to pay and contractor agrees to accept as total payment for its services, the rates and charges set forth in Contractor's fee schedule, attached hereto as Exhibit B and incorporated by reference. The amount to be expended for services shall not exceed Pour Hundred Thousand Dollars ($400,000.00) annually during the term of this agreement. b, Invoices 1, The contractor shall submit a numthly invoice by the fifteenth of the month to the City for the services rendered in the prior month. 25E -41 2, All invoices for work performed under this contract shall be submitted it, a format approved by the City, Invoices shall include the following information at a minimum i. Contractor's invoice number ii, Beginning and ending dates for services iii. City project number and /or name (if applicable) iv. Work site address /locatlou (if applicable) v. Unit cost, subtotals and total for invoice c. Payment by City shall be made within sixty (60) days following receipt of proper invoice, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance of a professional parking control enforcement services, d. Price Adjustments The parties may annually agree to an adjustment of charges (not to exceed 2 %) commencing at the end of the first year of the agreement, utilizing the month of December statistics and supporting documentation. The index which will be used for determining adjustments to services charges shall be the most recent December Consumer Price Index (CPI) for All Urban Consumers for Los Angeles-Anaheim- Riverside CMSA, published by the United States Department of Labor Bureau of Labor Statistics or any relevant successor for the Orange County area. e. Extra Work No now work of any kind shall be considered an extra unless a separate estimate is given for said work and the estimate is approved by the City in writing before the work is commenced. The contractor will be required to provide detailed information of such extra work, Documentation of contract compliance may be required on some occasions. Work performed prior to obtaining written approval of the City shall not be included within the Scope of Work and may not be paid. 4. TERM This Agreement shall commence on the date first written above and terminate on June 30, 2014, unless terminated earlier in accordance with Section 14, below. This Agreement may be renewed for up to three additional one -year periods upon the written agreement of the parties. The tern of this Agreement may be extended upon a writing executed by the Executive Director of Public Works and the City Attorney, 5. CITY OBLIGATIONS City shall provide Contractor with all records in the possession of City which will be of assistance to Contractor in the performance of this Agreement, 6. INDEPENDENT CONTRACTOR Contractor shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer - employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional mannor in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services, Contractor shall pay all salaries and wages, employer's social security taxes, unemployment Insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 25E -42 7. INSURANCE Prior to undertaking performance of work under this Agreement, Contractor shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Cornrnamial General Liability Insurance, Contractor shall maintain commercial general liability insurance which shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Contractor's operations in the performance of this Agreement, including, without limitation, acts involving vehicles. 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 $1,000,000 per occurrence, $2,000,000 in the aggregate, Such insurance shall be endorsed to (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 $1,000,000 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, Contractor, if Contractor has any employees, is required to be insured against liability for worker's compensation or to undertake self - insurance. Prior to commencing the performance of the work under this Agreement, Contractor agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. The follownng requirements apply to the insurance to be provided by Contractor pursuant to this section: (i) Contractor shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii) Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City, e. If Contractor fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not effect Contractor's right to be paid for its time and materials expended prior to notification of termination, Contractor waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. R. INDEMNIMCATION To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City, its officers, agents and employees (collectively, the "indemnified parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs 25E -43 and expenses (including, without limitation, attorney's fees, disbursements and court costs) of every ]rind and nature whatsoever (individually, a claim; collectively, "claims "), which may arise from or in any manner relate (directly or indirectly) to any work performed or services provided under this contract (including, without limitation, defects in workmanship and /or materials) or Contractor's presence or activities conducted performing the work (including the negligent and /or willful acts, errors and/or omissions of Contractor, its principals, officers, agents, employees, vendors, suppliers, contractors, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable for any or all of them). Notwithstanding the foregoing, nothing herein shall be construed to require Contractor to indemnify the indemnified parties from any claim arising from the sole negligence or willful misconduct of the indemnified parties. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the contractor. 9. CONFIDENTIALITY If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and /or proprietary, Contractor agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care, "Confidential Information" shall include all nonpublic information, Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and /or agent of the other party is covered by this Agreement. The foregoing obligations of non -use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Contractor disclosed in a publicly available source; (e) is in rightful possession of the Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Contractor without reference to information disclosed by the City. 10. CONFLICT OF INTEREST CLAUSE Contractor covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any mariner with performance of services specified under this Agreement. 1.1. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement 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, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons; To City; Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988' Santa Ana, CA 92702 -1988 telefacsimile (714) 647 -6956 With courtesy copies to; Public Works Agency 25E -44 aid City of Santa Ana 220 S. Daisy Avenue, Bldg A (M -85) Santa Ana, California 92703 telefacsimile (714) 647 -3345 Attn: Water Resources Manager City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, California 92702 To Contractor: Houston- Harris PCS, Inc. 21831 Barton Road Grand Terrace, California 92313 Attn: Pam Houston A party may change its address by giving notice in writing to the other party. Thereafter, any notice shall be addressed and transmitted to the new address, If sent by mail, any notice, tender, demand, delivery, or other 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. If sent by facsimile, any notice, tender, demand, delivery, or other communication shall be effective or deemed to have been given twenty -four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above, For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 12. EXCLUSMTY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement: shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor nor the City, Each party to this Agreement aclmowledges that no reprowntations, inducements, promises or agreements, orally or otherwise, have been made by any panty, or anyone acting on behalf of any party, which are not embodied herein, 13, ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City, 25E -45 14, TERMINATION The City reserves the right to terminate the contract as follows; a. In the event Contractor fails or refuses to timely perform any of the provisions of this agreement in the manner required, or if Contractor violates any provision of this agreement, Contractor shall be deemed in default. City shall provide written notice of such default to Contractor's project manager. Contractor shall care said default within a period of two (2) working days. If such cure is not completed in a timely manner, City may assess liquidated damages or terminate the agreement forthwith by giving written notice to Contractor's project manager. City may, in addition to the other remedies provided in this agreement or authorized by law, terminate this agreement by giving written notice of termination, Contractor shall be responsible for all costs incurred by City, including replacement costs of equipment and labor required to provide service during Contractor's default. In the event of such termination for cause, City shall pay Contractor that portion of compensation specified in the agreement that is earned and unpaid prior to the effective date of termination. Contractor shall not be entitled to any compensation for lost profits it terminated for cause. b. This agreement may be terminated without cause by City upon thirty (30) days written notice delivered to the Contractor either personally or by mail. Upon termination, City shall pay to Contractor that portion of compensation specified in the agreement that is earned and unpaid prior to the effective date of termination. c. In addition to, or in lieu of, remedies provided in this agreement or pursuant to law, City shall have the right to withhold all or a portion of Contractor's compensation for contract services if, in the judgment of the City, the level of service falls below appropriate standards and /or Contractor fails to satisfactorily perform contract services. City shall have the right to retain funds withheld until the City determines that contract services are performed as well and as frequently as required by this agreement. 15. CONTRACTOR OPTION FOR TERMINATION The Contractor may request termination of the contract when conditions during the contract make it impossible to perform or when prevented from proceeding with the contract by act of God, by law or official action of a public authority or in the event on nonpayment by the City. Such request will require one - hundred eighty (180) days written notice prior to contract termination date requested. In the event of nonpayment of undisputed sums by the City, Contractor shall give the City thirty (30) working days to cure the alleged breach. 16. EMPLOYMENT OPPORTUNITIIJS FOR SANTA ANA, RESIDENTS Contractor shall solicit and advertise employment opportunities to Santa Ana residents. The City shall inform the Contractor of areas to publicize recruitment opportunities, such as work centers and community centers. Such effort and procedure will be provided to the City for review. 17. DISCRIMINATION Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Contractor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations, 25E -46 18, JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that. Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement, 19. PROFESSIONAL LICENSES Contractor shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies, Contractor shall notify the City immediately and in writing of her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 20. MISCELLANEOUS PROVISIONS a. 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 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. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. N N 25E -47 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D, HUIZAR Clerk of the Council APPROVED AS TO FORM: SONIA R, CARVALHO City Attorney al BY; ca Lamea Sheedy Assistant City Attorney RECOMMENDED FO PROVAL: _ter .e EDWIN "WILLIA �TVEZ Interim Executive Director Public Works Agency CITY OF SANTA ANA w Manager CONTRACTOR HOUSTON - HARRIS P,C,S., INC. /Ciyy &. Z PAMELA D. HOUSTON President 25E -48 RECOMMENDED ACTION Authorize the City Manager and Clerk of the Council to execute a purchase agreement with Martin P. Cazarez and Sylvia Y. Cazarez, husband and wife, as joint tenants of the property located at 1315 North Bristol Street (APN 405- 272 -13), in the amount of $390,000 for the full purchase price for said real property and goodwill (if any), subject to nonsubstantive changes approved by the City Manager and City Attorney. DISCUSSION This action will allow the City to complete the right -of -way acquisition phase in preparation for the final design and subsequent project construction. Bristol Street is a major north -south transportation facility which is designated as a major arterial highway in the City's Circulation Element of the General Plan. The widening of the 3.9 -mile Bristol Street segment from Warner Avenue to Memory Lane has been a long -term priority project that is being constructed in several phases. Improvements include the widening of the street from two to three lanes in each direction, raised landscape medians, and bike lanes. The Public Works Agency is acquiring property for development of Phase IIIB, bounded by Washington Avenue and Seventeenth Street, and expects to complete the acquisition process by December 2014. Construction is anticipated to begin in early 2015. To accommodate the widening for Phase IIIB, acquisition of the entire property located at 1315 North Bristol Street is required (Exhibit 1). An offer based on the appraised value prepared by a licensed appraiser in the State of California was made and accepted by the property owner. The compensation amount is $390,000 (Exhibit 2). 25F -1 REQUEST FOR . COUNCIL ACTION -, CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: JULY 15, 2014 TITLE: APPROVED PURCHASE AGREEMENT WITH MARTIN ❑ As Recommended P. CAZAREZ AND SYLVIA Y. CAZAREZ ❑ As Amended El Ordinance on Reading FOR BRISTOL STREET WIDENING I Ordinance on 2 ' Reading El Ordinance (PROJECT NO. 116740 NONGENERAL ❑ Implementing Resolution FUND) ❑ Set Public Hearing For CONTINUED TO FILE NUMBER CITY MANAGER RECOMMENDED ACTION Authorize the City Manager and Clerk of the Council to execute a purchase agreement with Martin P. Cazarez and Sylvia Y. Cazarez, husband and wife, as joint tenants of the property located at 1315 North Bristol Street (APN 405- 272 -13), in the amount of $390,000 for the full purchase price for said real property and goodwill (if any), subject to nonsubstantive changes approved by the City Manager and City Attorney. DISCUSSION This action will allow the City to complete the right -of -way acquisition phase in preparation for the final design and subsequent project construction. Bristol Street is a major north -south transportation facility which is designated as a major arterial highway in the City's Circulation Element of the General Plan. The widening of the 3.9 -mile Bristol Street segment from Warner Avenue to Memory Lane has been a long -term priority project that is being constructed in several phases. Improvements include the widening of the street from two to three lanes in each direction, raised landscape medians, and bike lanes. The Public Works Agency is acquiring property for development of Phase IIIB, bounded by Washington Avenue and Seventeenth Street, and expects to complete the acquisition process by December 2014. Construction is anticipated to begin in early 2015. To accommodate the widening for Phase IIIB, acquisition of the entire property located at 1315 North Bristol Street is required (Exhibit 1). An offer based on the appraised value prepared by a licensed appraiser in the State of California was made and accepted by the property owner. The compensation amount is $390,000 (Exhibit 2). 25F -1 Purchase Agreement for Bristol Street Widening Project July 15, 2014 Page 2 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 G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans). Approval of this item also 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). ENVIRONMENTAL IMPACT In 1990, City Council approved these proposed improvements as the Bristol Street Final Environmental Impact Statement /Environmental Impact Report (FEIS /EIR No. 89 -01). Due to the several minor design modifications at Phase IIIB between Washington Avenue and Seventeenth Street that were identified since adoption of the 1990 FEIS /EIR, an Addendum to the FEIS /EIR was prepared and adopted by City Council on July 1, 2014, according to the requirements of the California Environmental Quality Act. FISCAL IMPACT Funds are appropriated in the Select Street Construction Fund account (No. 05917661- 66220) and Measure M2 Street Construction Fund account (No. 03217662- 66220). APPROVED AS TO FUNDS AND ACCOUNTS: E—D ( Edwin "William" Galve , P.E. Francisco Gutierrez Q Interim Executive Director Executive Director �W Public Works Agency Finance & Management Services Agency EWG /kn Exhibits: 1. Location Map 2. Agreement 25F -2 A8� (NTS) 0 F_ 11.1 J m WASHINGTON AVENUE f i , I I I I - SUBJECT PROPERTY - ACQUIRED PROPERTIES EXHIBIT 1 SANTA ANA TrrLE: PURCHASE AGREEMENT WITH MARTIN P. P W Q p a p X CAZAREZ AND SYLVIA Y. CAZAREZ FOR I Jw 1% � BRISTOL STREET WIDENING (PROJECT NO. 116740 NON GENERAL FUND) 25F -3 1405- 252-19 N - I 1 405- 252 -18 405-252-17 405 - 272 -19 I 405 - 272-18 405- 272 -17 f� 405- 272 -16 -- --- --- '-- ---- -- -' - --' 405-272 -15 fI 405- 272-14 1 4e5 a72 tai >. . .............. 5 7 - 1 WASHINGTON AVENUE f i , I I I I - SUBJECT PROPERTY - ACQUIRED PROPERTIES EXHIBIT 1 SANTA ANA TrrLE: PURCHASE AGREEMENT WITH MARTIN P. P W Q p a p X CAZAREZ AND SYLVIA Y. CAZAREZ FOR I Jw 1% � BRISTOL STREET WIDENING (PROJECT NO. 116740 NON GENERAL FUND) 25F -3 25F -4 PURCHASE AND SALE AGREEMENT FOR ACQUISITION OF REAL PROPERTY AND BILATERAL ESCROW INSTRUCTIONS THIS AGREEMENT (hereinafter "PSA "), entered into on June , 2014, between the CITY OF SANTA ANA, a charter city and municipal corporation duly organized under the Constitution and laws of the State of California (hereinafter "City" or 'Buyer"), and Martin P. Cazarez and Sylvlz Y. Cazarez, Husband and Wlfe as Joint Tenants (hereinafter "Seller "), regardless of number or gender; THEREFORE, for and in consideration of their mutual promises, covenants and agreements, and subject to the terms, conditions and provisions of this PSA, Seiler agrees to sell to City, and City agrees to purchase from Seller, that certain real property (hereinafter "Said Real Property ") legally described as follows: SEE EXHIBIT "A" — Legal Description ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF (Commonly known as 1315 N. Bristol Street, Santa Ana, CA) (APN: 405 -272 -13) Said purchase and sale of Said Real Property shall be in accordance with and subject to all of the following terms, conditions, promises, covenants, agreements and provisions, to wit: 1, Conveyance by Seller. Seller agrees to convey said real property to City, by Grant Deed, at the office of First American Title Insurance Company, 2 First American Way, Santa Ana, California, within thirty (30) days from and after the date on which the City has approved this Agreement. 2. Title to be C nve ed. Seller agrees that, except as may hereinafter be otherwise expressly provided, said real property shall be conveyed by Seller to City, as aforesaid, free and clear of any and all conditions, restrictions, reservations, exceptions, easements, assessments, profits, limitations, encumbrances (whether monetary or non - monetary, general or specific, including any and all leasehold interests), liens, clouds or defects in title except those exceptions shown in Paragraph '15 below. Seller hereby warrants that the title to said real property to be conveyed by Seller to City shall be free and clear as provided above. Seller further agrees that acceptance by City of any deed to said real property, with or without knowledge of any condition,, restriction, reservation, exception, easement, assessment, profit, limitation, encumbrance (whether monetary or non- monetary, general or specific, and including any and all leasehold interests), lien, cloud or defect in title, shall not constitute a waiver by City of its right to the full and clear title hereinabove agreed to be conveyed by Seller to City, nor of any right which might accrue to City because of the failure of Seller to convey title as hereinabove provided. 3. Titla Inauranog. Seller agrees to deliver to City, concurrently with the conveyance of said real property to City, within the time and at the place hereinabove specified for said conveyance of said real property, a policy of title insurance to be issued by the above mentioned title company, with the City therein named as the insured, in the amount of Three Hundred Ninety Thousand AND NO /100 Dollars ($890,000.00) insuring the title of the City to said real property is free and clear of any and all conditions, restrictions, reservations, exceptions, easements, assessments, profits, limitations, encumbrances (whether monetary or non - monetary, general or specific, and including any and all leasehold Interests), liens, clouds or defects in title, excepting such specific ones as city may hereinafter expressly agree to take subject to. Acceptance by City of any such policy of insurance, whether such insurance complies with the requirements of this paragraph or not, shall not constitute a waiver by City of its right to such insurance as is herein required of Seller, nor a waiver by the City of any rights of action for damages or any other rights which may accrue to City by reason of the failure of Seller to convey title or to provide title insurance as required in this Agreement. Exhibit 2 25F -5 4. Escrow. City agrees to open an escrow at the office of First American Title Insurance Company, 2 First American Way, Santa Ana, California, (the Escrow Agent) within five (5) days from and after the date on which the City has approved this Agreement, This Agreement constitutes the joint escrow instructions of the City and the Seller and a duplicate original of this Agreement shall be delivered to the Escrow Agent upon the opening of the escrow. Escrow to close within 90 days of the City's execution of this Agreement. The Escrow Agent hereby is empowered to act under this Agreement, and upon indicating its acceptance of this Section 4 and of the General Provisions described In Exhibit "B" attached hereto and incorporated herein by this reference, in writing, delivered to the City and to the Seller within five (5) days after delivery of this Agreement, shall carry out its duties as Escrow Agent hereunder, City agrees to bear and Escrow Agent is hereby authorized to charge to the City the cost of any transfer taxes, recording fees, cost of title insurance, reconveyance fees, document preparation fees, escrow fees and any other closing costs incidental to the conveying of said real property to City. Penalties for prepayment of bona fide obligations secured by any existing deed of trust or mortgage shall be waived pursuant to Civil Code Procedures Section 1265.240. The liability to the Escrow Agent under this Agreement is limited to performance of the obligations Imposed upon it under Section 4, Section 6, Section 8 and Exhibit "B" of the General Provisions of this Agreement. 5. Property Taxes. Such real property taxes, If any, on said real property for the fiscal year within which said real property is conveyed to City as are unpaid at the time of said conveyance shall be cleared and paid in accordance with the provisions of Section 4986 of the Revenue and Taxation Code of the State of California. Seller shall be eligible for a refund under Section 5096.7 of the Revenue and Taxation Code of the State of California for that portion of properly taxes on said real property for said fiscal year which have been paid prior to the date the deed conveying said real property to City is recorded which is allocable to that portion of the fiscal year which begins on the date the deed conveying said real property to City is recorded . and made uncollectible if unpaid by reason of Section 4986 of the Revenue and Taxation Code of the State of California, All unpaid taxes on said real property for any and all years prior to the fiscal year within which said conveyance is made shall be paid by Seller before conveyance of said real property to City. 6. Payment of Purchase Price. City agrees to pay to Seller, and Seller agrees to accept from City, as and for the full purchase price for said real property, fixtures & equipment (improvements pertaining to the realty), goodwill (if any), and severance damages, the total sum of Three Hundred Ninety Thousand AND NO /100 Dollars ($390,000.00). City agrees to deposit said purchase price in escrow with the Escrow Agent within THIRTY (30) days from and after the date on which the City has approved this Agreement, and the Escrow Agent is hereby authorized to pay the same to Seller upon and after: (a) Conveyance of said real property by Seller to City as hereinabove provided; (b) Acceptance by City of a Grant Deed conveying said real property to City; (c) Delivery to City of the policy of title insurance as hereinabove provided; (d) Recordation of the Deed conveying said real property to City. 7. Possession. Seller agrees to deliver to City, on the date the Deed conveying said real property to City is recorded, quiet and peaceful possession of said real property, which shall be made free by Seiler of all personal property. 8. Rental and Occupancy By Seller, Seller agrees to execute a complete, current and correct statement of rentals (Seller Estoppel) on a form furnished to Seller by City and deliver same to City within fifteen (15) days hereof with copies of any written leases or rental agreements attached. All rents will be 25F -6 prorated as of the close of escrow on the basis of a 30 -day monthi360 -day year consistent with that statement, subject to approval of City. Seller hereby agrees not to rent any units on the premises which are vacant as of the date that this agreement is executed by seller, or which may be vacated by present occupants prior to close of escrow. In return, the City agrees to reimburse seller lost rentals incurred by keeping units vacant through the close of escrow. Seller agrees that any and all Tenant Security Deposits pertaining to the subject property collected by or in the possession of Seller prior to the close of escrow shall be transferred to and become the property of City during escrow. Seller hereby warrants that the rental statement referred to shall include the terms of all rental agreements, tenancies, and leases (written, unwritten, recorded, or unrecorded) and Seller agrees to hold City harmless from all liability from any such leases or agreements. Seller also warrants that there are no oral or written leases on all or any portion of the subject property exceeding a period of one month. 9. W fi Sell vers. The waiver by City of any breach of any covenant or agreement herein contained on the part of the er shall not be deemed or held to be a waiver of any subsequent or other breach of said covenant or agreement nor a waiver of any breach of any other covenants or agreements contained herein. 10. His, Assigns, Successors-in- interest. This PSA, and all the terms, covenants and conditions hereof, shall apply to and bind the heirs, executors, administrators, successors and assigns of the respective Parties hereto. 11. :!,,.Time is of the Essence. In all matters and things hereunder to be done and in all payments hereurrde,.r to be made, time is and shall be of the essence. 12, - Ju4 Comnensatign. Seller acknowledges and agrees that said purchase price is just compensation at'fair market "value for said real property and includes payment for fixtures & equipment (improvements pertaining to the realty), goodwill (if any), and severance damages. 13. Notices. The mailing address of the City of Santa Ana Is 20 Civic Center Plaza, M -36, P.O. Box 1588, In the City of Santa Ana 92701, County of Orange, State of California. The mailing address of the Seiler is: Martin and Sylviz Cazarez 1$62 Mardick Road Santa Ana, CA 92705 14. (Exceptions. City agrees to accept title to said real property subject to the following: NONE. 15. Entire Aareament. It is mutually agreed that the Parties hereto have herein set forth the whole of their Agreement. Performance of this PSA by City shall lay at rest, each, every, and all issue(s) that were raised or could have been raised in connection with the acquisition of Said Real Property by City. 16. Hazardous Waste. Neither Seller nor, to the best of Seller's knowledge, any previous owner, tenant, occupant, or user of the Property used, generated, released, discharged, stored, or disposed of any, hazardous waste, toxic substances, or related materials ( "Hazardous Materials ") on, under, in, or about the Property, or transported any Hazardous Materials to or from the Property. Seller shall not cause or permit the presence, use, generation, release, discharge, storage, or disposal of any Hazardous Materials on, under, in, or about, or the transportation of any Hazardous Materials to or from, the Property. The term "Hazardous Material" shall mean any substance, material, or waste which is or becomes regulated by any local governmental authority, the State of California, or the United States Government, including, but not limited to, any material or substance which is (i) defined as a "hazardous waste ", "extremely hazardous waste ", or "restricted hazardous waste" under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as "hazardous substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6,8 (Carpenter - Presley- Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous material', "hazardous substance ", or "hazardous waste" under Section 25501 of the California Health and 25F -7 Safety Code, Division 20, Chapter 6.96 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the California Health and Safety Cade, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) polychlorinated biphenyis, (viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix) designated as a "hazardous substances" pursuant to Section 311 of the Clean Water Act, (33 U.S.C. 51317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. 56901 et seq. (42 U.S.C. 56903) or (xi) defined as a "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, as amended by Liability Act, 42, U.S.C. S9601 gtseg. (42 U.S.C. 59601), 17. Compliance With Environmental LaM. To the best of Seller's knowledge the Property complies with all applicable laws and governmental regulations including, without limitation, all applicable federal, state, and local laws pertaining to air and water quality, hazardous waste, waste disposal, and other environmental matters, including, but not limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation Recovery and Comprehensive Environmental Response Compensation and Liability Acts, and the California Environment Quality Act, and the rules, regulations, and ordinances of the city within which the subject property is located, the California Department of Health Services, the Regional Water Quality Control Board, the State Water Resources Control Board, the Environmental Protection Agency, and all applicable federal, state, and local agencies and bureaus. 18. laddemnity. Seiler agrees to indemnify, defend and hold the City harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon (I) the presence, release, use, generation, discharge, storage, or disposal of any Hazardous Material on, under, In or about, or the transportation of any such materials to or from, the Property, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, Judgment, or license relating to the use, generation, release, discharge, storage, disposal, or transportation of Hazardous Materials on, under, in, or about, to or from, the Property. This Indemnity shall include, without limitation, any damage, liability, fine, penalty, punitive damage, cost, or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease, or death, tangible or intangible property damage, compensation for lost wages, business Income, profits or other economic loss, damage to the natural resource or the environment, nuisance, pollution, contamination, leak, spill, release, or other adverse effect on the environment). This indemnity extends only to liability created prior to or up to the date this escrow shall close. Seller shall not be responsible for acts or omissions to act post close of this escrow. 19. Contingency. It is understood and agreed between the parties hereto that the completion of this transaction, and the escrow created hereby, is contingent upon the specific acceptance and approval of the City herein. The execution of these documents and the delivery of same to Escrow Agent constitute said acceptance and approval. 20. Modification and Amenriment. This PSA may not be modified or amended except in writing signed by the Seller and City. 21, Partial Invalidity. Any provision of this PSA that is unenforceable or invalid or the conclusion of which would adversely affect the validity, legality, or enforcement of this PSA shall have no effect, but all the remaining provisions of this PSA shall remain in full force. 22, Captions. Captions and headings in this PSA, including the title of this PSA, are for convenience only and are not to be considered in construing this PSA. 23.. Governing Law. This PSA shall be governed by and construed in accordance with the laws of the State of California. 25F -8 24. No Reliance By One Party On The Other. Each party has received independent legal advice from Its attorneys with respect to the advisability of executing this PSA and the meaning of the provisions hereof. The provisions of this PSA shall be construed as to their fair meaning, and not for or against any party based upon any attribution to such party as the source of the language in question. 25. No Third Party Beneficiary. This PSA Is intended to benefit only the Parties hereto and no other person or entity has or shall acquire any rights hereunder. 26. Duty To Cooperate FMrthor. Each party hereby agrees that it shall, upon request of the other, execute and deliver such further documents (in form and substance reasonably acceptable to the party to be charged) and do such other ects and things as are reasonably necessary and appropriate to effectuate the terms and conditions of this PSA, without cost. 27. Applicability of.Aareement To Assignees. This PSA shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties to this PSA. 29. Authority to E.N_Qcutg Aoreemen . 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 PSA, and shall indemnify 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 foot, held by the signatory or is withdrawn. 29. Incorporation of Exhibits. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth In the body of this PSA. 25F -9 IN WITNESS WHEREOF, the Parties hereto have executed this PSA on the date and year first written above, SELLER: Martin P. Cazarez and Sylviz Y. Cazarez, Husband and Wife as Joint Tenants --�JAALZe X CA, Date: �`� 2014 Martin P. ;azarez e Date: >( /�G' 2014 City /Buyer City of Santa Ana Date: 2014 David Cavazos City Manager Attest: Date: 2014 Maria D. Huizar City Clerk Approved as to Assistant City Attorney Date: DL� Al 2014 25F -10 EXHIBIT "A" LEGAL DESRIPTION Real Property in the City of Santa Ana, County of Orange, State of Cailfornla, described as follows: LOT 17 OF TRACT NO. 963, NOBLE PARK NO. 2, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 26, PAGE 30, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. 09=111110410=1 25F -11 EXHIBIT "B" GENERAL. ESCROW PROVISIONS All disbursements shall be made by Escrows check. All funds received in this escrow shall be deposited in one or more of your general escrow accounts with any bank doing business in the State of California and may be transferred to any other general escrow account or accounts. The expression "close of escrow" means the date on which instruments referred to herein are filed for record. All adjustments are to be made on the basis of a 30 -day month, Recordation of any instruments delivered through this escrow, if necessary or proper in the issuance of a policy of title insurance called for, is hereby authorized. There shall be no proration of any existing insurance policies in this escrow. You are to furnish a copy of these Instructions, amendments thereto, closing statements and /or any other documents deposited in this escrow to the lender or lenders, the real estate broker or brokers and /or the attorney or attorneys involved in this transaction upon request of such lenders, brokers or attorneys. Should you before or after close of escrow receive or become aware of any conflicting demands or claims with respect to this escrow or the rights of any of the parties hereto, or any money or property deposited herein affected hereby, you shall have the right to discontinue any or all further sots on your part until such conflict is resolved to your satisfaction, and you shall have the further, right to commence or defend any action or proceedings for the determination of such conflict. The parties hereto jointly and severally agree to pay all costs, damages, judgments and expenses, including reasonable attorney's fees, suffered or incurred by you In connection with, or arising out of this escrow, including, but without limiting the generality of the foregoing, a suit in interpleader brought by you. In the event you file a suit in interpleader, you shall ipso facto be fully released and discharged from all obligations imposed upon you in this escrow. If for any reason funds are retained or remain in escrow, you are to deduct therefrom a reasonable monthly charge as custodian thereof of not less than $10.00 per month. Time is declared to be the essence of these instructions, If you are unable to comply within the time specified herein and such additional time as is required to make an examination of the official records, you will return all documents, money or property to the party entitled thereto upon satisfactory written demand and authorization. Any amendment of and/or supplement to any instructions must be in writing. The seller agrees to sell and the buyer agrees to buy the property herein described upon the terms hereof. These escrow instructions, and amendments hereto, may be executed in one or more counterparts, each of which independently shall have the same effect as if it were the original, and all of which taken together shall constitute one and the same instruction. 25F -12 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE, CONDITIONAL USE PERMIT NO. 2014 -13 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE AT THE MARISCOS LOS CORALES RESTAURANT AT 2629 WESTMINSTER AVENUE - MARISCOS LOS CORALE PPLICANT CITY MANA R RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: rillJ:i�1�L� ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For_ CONTINUED TO FILE NUMBER Receive and file the staff report approving Conditional Use Permit No. 2014 -13 as conditioned. PLANNING COMMISSION ACTION On June 23, 2014, the Planning Commission adopted a resolution approving Conditional Use Permit (CUP) No. 2014 -13 as conditioned by a vote of 7:0 which approved an upgrade from a Type 41 to a Type 47 Alcoholic Beverage Control license for the on- premise sale and consumption of beer, wine and distilled spirits at Mariscos Los Corales Restaurant at 2629 Westminster Avenue located in the Community Commercial (Cl) zoning district. The Planning Commission made no changes to the recommended conditions of approval outlined in the attached staff report (Exhibit A). DISCUSSION Mariscos Los Corales Restaurant currently operates within a single- tenant building that is located at the northeast corner of Westminster Avenue and Sydney Street. The site is 0.31 acres in size, is square shaped and contains a 1,216 square foot building that was constructed in 1959 under the County's Jurisdiction. The approval of the CUP would allow for the sale and service of beer, wine and distilled spirits in conjunction with food sales. Full sized site plans are available for public viewing in the Clerk of the Council Office. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 3 Economic Development, Objective No. 2 (create new opportunities for businessfjob growth and encourage private development through new General Plan and Zoning Ordinance policies). 31A-1 Conditional Use Permit No. 2014 -13 July 15, 2014 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. t FuQLVYyG- Karen Haluza Interim Executive Director Planning & Building Agency AN:rb AmW 1p plaa mm21CUP14 -13. LosG=1es.= Exhibit: A. Planning Commission Staff Report 31A-2 REQUEST FOR Planning Commission Action F01UN JUNE 23, 2014 TITLE: MEETING DATE: PUBLIC HEARING — FILED BY MARISCOS LOS CORALES FOR CONDITIONAL USE PERMIT NO, 2014 -13 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE AT THE MARISCOS LOS CORALES RESTAURANT AT 2629 WESTMINSTER AVENUE Prepared by Ann Hsin -An Ni Interim Executive Director PLANNING COMMISSION SECRETARY APPROVED • As Recommended • As Amended • Set Public Hearing For DENIED • Applicant's Request • Staff Recommendation CONTINUED T© f Actin ,Plate g Manager RECOMMENDED ACTION Adopt a resolution approving Conditional Use Permit No. 2014 -13 as conditioned. Request of Applicant Mariscos Los Corales Restaurant is requesting approval of a conditional use permit for an upgrade from a Type 41 to a Type 47 Alcoholic Beverage Control (ABC) license for the on- premise sale and consumption of beer, wine and distilled spirits at Mariscos Los Corales Restaurant at 2629 Westminster Avenue. Pursuant to Section 41 -196 of the Santa Ana Municipal Code (SAMC), establishments that sell alcoholic beverages require a conditional use permit. Project Location and Site Description Mariscos Los Corales Restaurant currently operates within a single - tenant building that is located at the northeast corner of Westminster Avenue and Sydney Street. The site is 0.31 acres in size, is square shaped and contains a 1,216 square foot building that was constructed in 1959 under the County's Jurisdiction. A total of 15 parking spaces are provided in a surface parking lot. The site is surrounded by retail uses to the east, west and south, and residential uses to the north (Exhibits 1, 2 and 3). Project Description Mariscos Los Corales restaurant is requesting approval to upgrade to a Type 47 Alcoholic Beverage Control (ABC) license and allow the on- premise sale of beer, wine and distilled spirits as part of the eating establishment. The restaurant is a full service, sit -down eating establishment that is 1,216 square feet in size and holds approximately 48 seats. The on- premise sale of alcoholic beverages to customers is intended to provide a service ancillary to the primary restaurant use. The hours of operation for the restaurant are from 9:00 a.m. to 12:00 a.m., seven days per week. EXHIBIT A 31A-3 Conditional Use Permit No. 2014 -13 June 23, 2014 Page 2 The storage for alcoholic beverages will be inside of an existing refrigerator that is located in the kitchen. The overall storage of alcohol consists of approximately 48 square feet, which is four percent of the floor area and is less than five percent of the gross floor area of the restaurant. This falls below the Planning Division Standards for establishments serving alcoholic beverages (Exhibits 4 and 5). Project Background Mariscos Los Corales Seafood restaurant is a locally -owned and operated restaurant that specializes in Mexican seafood cuisine. This business has been operating at the present location since March, 2006. The building has been used by various commercial and eating establishment uses since it was constructed in 1959. The State Department of Alcoholic Beverage Control conducts an annual drawing for a limited number of new Type 47 (on -sale general) liquor licenses. Having been selected as part of this drawing, the applicant is now seeking to upgrade the license to allow the sale of distilled spirits in addition to beer and wine. If approved, the action will also entail the voiding of the existing CUP. A conditional use permit (CUP No. 2012 -25) was approved in 2012 to allow a Type 41 on -sale beer and wine license for Mariscos Los Corales restaurant. The applicant is requesting an upgrade of the existing Type 41 license to a Type 47 license. As a result, a new CUP is required for the restaurant. General Plan and Zoning Consistency The General Plan land use designation for the site is General Commercial (GC). General Commercial land -use districts are key components in the economic development of the City. They provide highly visible and accessible commercial development along the City's arterial transportation corridors and provide important neighborhood facilities and services, such as this restaurant. The project site is consistent with this General Plan land use designation. The parcel is located within the Community Commercial (C -1) zoning district. The C -1 zoning district allows for retail and service uses such as restaurants, making the proposed use consistent with the zoning designation. Project Analysis Conditional use permit requests are governed by Section 41 -638 of the SAMC. Conditional use permit requests may be granted when it can be shown that the following can be established: • That the proposed use will provide a service or facility which will contribute to the general well being of the neighborhood or community. • That the proposed use will not, under the circumstances of the particular case, be detrimental to the health, safety, or general welfare of persons residing or working in the vicinity. 31A-4 Conditional Use Permit No. 2014 -13 June 23, 2014 Page 3 That the proposed use will not adversely affect the present economic stability or future economic development of properties surrounding the area. + That the proposed use will comply with the regulations and conditions specified in Chapter 41 for such use. That the proposed use will not adversely affect the General Plan of the city or any specific plan applicable to the area of the proposed use. If these findings can be made, then it is appropriate to grant the conditional use permit. Conversely, the inability to make these findings would result in a denial. Using this information staff has prepared the following analysis, which, in turn forms the basis for the recommendation contained in this report. In analyzing the conditional use permit request, staff believes that the following findings of fact warrant approval of the conditional use permit. • The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine and distilled spirits with their food throughout the establishment. This will thereby benefit the community by providing a restaurant with an additional and complementary food- related amenity. Conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. • The proposed license for the on -sale consumption of beer, wine and distilled spirits at this location will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use, in addition, the use will occur within the premises and is incidental to the restaurant use. The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other restaurants in the area that also offer beer, wine and distilled spirits for sale to their guests. As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling beer, wine and distilled spirits pursuant to Chapter 41 of the Santa Ana Municipal Code. The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize less than five percent of the gross floor area for the storage of alcoholic beverages, which is below the maximum threshold established by the Municipal Code. 31A-5 Conditional Use Permit No. 2014 -13 June 23, 2014 Page 4 • The proposed use will not adversely affect the General Plan, Policy 2.2 of the Land Use Element encourages land uses that accommodate the City's needs for goods and services. A restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana and strengthens the economic vitality of the Community Commercial (C1) zoning district along Westminster Avenue, Moreover, Policy 5.5 of the Land Use Element encourages development that is compatible with and supporting of surrounding land uses. The proposed alcoholic beverage service will be located entirely within an enclosed building and its operations will be compatible with the surrounding mix of uses. Mariscos Los Corales has been in operation at the subject location since March 2006, with the commercial building on the project site occupied by retail and restaurants since the 1960s. The site is in compliance with all standards of SAMC Section 41- 196(8) for the on -site sale and consumption of alcoholic beverages (Exhibit 6). In addition to these 25 operational standards, an additional condition of approval is proposed to mitigate potential impacts on the adjacent uses and ensure the site does not become an attractive nuisance to the community. Police Department Analysis The Police Department reviews conditional use permit applications for the sale of alcoholic beverages because there is a strong correlation between the availability of alcohol and crime. Studies have shown that alcohol is a contributing factor in crimes, such as drunk driving, fatal traffic collisions, homicide, assaults, rape, domestic violence, drunk in public and other nuisance type of offenses. Without stringent controls to address the location of alcohol outlets, there is a strong likelihood that an overconcentration will create blight and adversely impact the community. The approval of a license in an area deemed overconcentrated and high in crime may affect the quality of life and police resources in the area, and aggravate existing conditions. The Police Department considered two factors when reviewing this type of application: crime rate and sensitive land uses. It has been determined that 2629 Westminster Avenue is located in Reporting District No. 84, an area that is 36 percent below the number of reported crimes than the average number reported for all crime reporting districts and is considered average in police - related incidents based on standards established under the Business and Professions Code Section 23958.4. There are single family residential units immediately adjacent to the proposed use, which may be impacted by noise and /or late night activity. Based on the average crime rate and adjacent residences, the Police Department recommends approval of the CUP, provided that the proposed conditions of approval are imposed to ensure that this location operates as a bona fide eating establishment and does not aggravate existing conditions or negatively impact adjacent residents. 31A-6 Conditional Use Permit No. 2014 -13 June 23, 2014 Page 5 Public Notification The project site is not located within any Neighborhood Association but is near the Riverview and Edna Park Neighborhood Associations. Staff contacted the presidents of the associations, who identified no concerns with the project. Additionally, the project site was posted with a notice advertising this public hearing, a notice was published in the Orange County Reporter and mailed notices were sent to all property owners and tenants within 500 feet of the project site. At the time of this printing, no correspondence, either written or electronic, had been received from any members of the public. CEQA Compliance In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301, The Class 1 exemption allows the operating, permitting and licensing of existing private structures with negligible or no expansion of the existing use. The proposed application is to approve an alcoholic beverage control license and allow the sale of beer, wine and distilled spirits within an existing commercial building. Categorical Exemption Environmental Review No. 2014 -33 will be filed for this project. Conclusion Based on the analysis provided within this report, staff recommends that the Planning Commission approve Conditional Use Permit No. 2014 -13 as conditioned. '7 171 r, Ann Ni Associate Planner AN :jm An11Wp511p1ancomm2 =P14 -13. LosCoralas,pc Attachments: Exhibit 1 — Vicinity Map Exhibit 2 — Land Use Map Exhibit 3 — Site Photo Exhibit 4— Site Plan Exhibit 5 — Floor Plan Exhibit 6 — SAMC Sec. 41- 196(g): Operational Standards for On -Sale Establishments 31A-7 GARDEN OWL 8L �R 13 RI Al RI RI Rl xi —j Ri RI R Al " RI 1 RI = RI PRD RI . P Ri �PVIPINITPFNTH cii cl c2i 2 IC2Z&O PROJECT 9 1 "" - I' R2 Rl 7 41 Ai GINGKAORCUI CR aXIMEMALFESOMAL m SNGIEFAMILYIFMOINTIAL .13 MRINGMI oc GOVERVINTGE14TER FQ TVID FAMILY RSDI GSM COMMFOALSOUTHMAN Ml JUiTINDUMAL m MULTRJEDENFITYMULTIRLE cl (Y)MMUNITYCOMMEMAL M2 HFAWWOUSRAL FAMILYFEJDEIICE CI-MU ODMM. 00MMffuAt)MUa3JM DISTICT MID MIMPYOP&AITINS Rl S FFANARAIWMENIS m MEFALOOMMERCIAL 0 om"m FE FE3024T)ALMTE C3 CINTFALMNES p "FORMONAL ED spmrCOIExacw1m C3A CI SJSNESSARSTMLLACE KID R-ANNI5)0DMMU"TY0M05MNT 91 SWROPLAN C4 FLANNEDSHOPRNGCWTER pfu RANNEDRFGMlALDW' QFMETIT m AFTERALWMMOUAL --.k CUP 2014-13 MARISCOS LOS CORALES TYPE 47 ABC 4 2629 WEST WESTMINSTER AVENUE 500 FEEL 1" - 1000 FEET — P L A N N I N G A N 0 8 U I L D I N 0 A 0 E N 0 Y EXHIBIT 1 VICINITY MAP 31A-8 CUP 2014 -13 MARISCOS LOS CORALES TYPE 47 ABC 2629 WESTWESTMINSTER AVENUE P L A N N I N G A N D B U I L D I N G A G E N C Y LAND USE MAP EXHIBIT 2 31A-9 z } J } H J 41 w 40 �V } rz ¢z -w M U L I- A M I L W R E I D E N E Q z 7w z Z c Q z x — ^� N N z ✓ V W z cC IN COMMERCIAL UJ p PRa�JEGT COMM . } S�TER V) AgamSg WESTMINSTER AVENUE C O M M. M. F. R, C O M M, C 0 M M MU LTI - FFlMILY RESIDENCE S,F.R CUP 2014 -13 MARISCOS LOS CORALES TYPE 47 ABC 2629 WESTWESTMINSTER AVENUE P L A N N I N G A N D B U I L D I N G A G E N C Y LAND USE MAP EXHIBIT 2 31A-9 I O M _TNII aglKlJ LINIS A3NUAS 31A-1 1 9 a IN R Rl _TNII aglKlJ LINIS A3NUAS 31A-1 1 9 a < E I E El L: -j I 'k, O Lx CI L EXHIBIT 5- 31A-12 - - - - - - - - -- - - -ttTIM, 3 E I E El L: -j I 'k, O Lx CI L EXHIBIT 5- 31A-12 Sec. 41.196. Establishments selling alcoholic beverages. Operational standards for on -sale establishments. The following operational standards shall be included in the conditions of approval for the conditional use permit required pursuant to Section 41 -196 The premises shall at all times be maintained as a bona -fide eating establishment as defined in Section 23038 of the California Business and Professions code and shall provide a menu containing an assortment of foods normally offered. The premises must have suitable kitchen facilities and supply an assortment of foods commonly ordered at various hours of the day. Full and complete meals must be served whenever the privileges of the on -sale license are being exercised. 2. There shall be no fixed bar or lounge area upon the premises maintained for the sole purpose of sales, service or consumption of alcoholic beverages directly to patrons. A fixed bar or lounge may be permitted if patrons may order food being offered to the general patrons of the eating establishment. 3. The sales, service, and consumption of alcoholic beverages shall be permitted only between the hours of 8:00 a.m. and 12:00 a.m. unless otherwise amended by the granting of a conditional use permit for after -hours operations pursuant to Santa Ana Municipal Code Chapter 41. 4. It shall be the applicant's responsibility to ensure that no alcoholic beverages are consumed on any property adjacent to the licensed premises under the control of the applicant, with the exception of any enclosed patio areas. 5. The applicant or an employee of the licensee must be present to monitor all areas of the establishment, including outdoor patios, during all times that alcoholic beverages are being served or consumed. 6. All employees serving alcoholic beverages must complete Responsible Beverage Service Training, or an equivalent approved by the State Department of Alcoholic Beverage Control; prior to being able to serve alcoholic beverages to patrons. Evidence of the completion of such training must be maintained on the premises and available for inspection upon request by the City. During those times when patrons are restricted to 21 years of age or older, the applicant shall at all times utilize an age verification means or device for all purchases of alcoholic beverages. Such verification of age is not intended to discriminate against patrons based on race, ethnicity or legal status, but only to comply with state law restricting the sale of alcohol to those 21 and older,. 8. Queuing lines shall be managed in an orderly manner and all disruptive and /or intoxicated patrons shall be denied entry. The business owner, or his designee, shall be responsible for monitoring the queuing lines at all times. EXHIBIT 6 1 of 4 31A -13 9. The outdoor queuing line shall not block public walkways or obstruct the entry or exit doors of adjacent businesses. Stanchions or barriers must be used to maintain order at all times the queue exceeds 25 patrons. All stanchions or barriers located on public property must be approved by the Public Works Agency, 10. Employees and contract security personnel shall not consume any alcoholic beverages during their work shift, except for product sampling for purposes of employee education about new products. Under no circumstances may contract security personnel consume alcoholic beverages during their work shift. 11. There shall be no exterior advertising of any kind or type, including window signs or other signs visible from outside, that promote or indicate the availability of alcoholic beverages on the premises. Interior displays of alcoholic beverages or signs, which are clearly visible to the exterior, shall constitute a violation of this condition. Permissible window displays must be kept to a minimum for maximum visibility and shall not exceed 25 percent of window coverage. Floor displays shall not exceed three feet in height, 12. There shall be no promotions encouraging intoxication or drinking contests or advertisements indicating "buy one drink, get one free', "two for the price of one ", or "all you can drink for..." or similar language. 13. Any pool tables, amusement machines or video games maintained on the premises at any time must be reviewed and approved in a security plan submitted to the Chief of Police. 14. Live Entertainment, including but not limited to, amplified music, karaoke, performers and dancing, shall be subject to the issuance of an entertainment permit pursuant to Santa Ana Municipal Code ( "SAMC ") Chapter 11 — Entertainment, and shall comply with all of the standards contained therein. Notwithstanding this requirement, music /noise shall not be audible beyond 20 feet from the exterior of the premises in any direction. 15. Neither the applicant, nor any person or entity operating the premises with the permission of the applicant, shall violate the City's adult entertainment ordinance contained in SAMC Section '12 -1 and 12 -2. 16. The premises shall not be operated as an adult entertainment business as such term is defined in SAMC Section 41- 1701.6. 17. The applicant(s) shall be responsible for maintaining free of litter the area adjacent to the premises under the control of the licensee. 18. There shall be no public telephones located on the exterior of the premises. All interior pay phones must be designed to allow outgoing calls only. 2of4 31A -14 19. Any graffiti painted or marked upon the premises or on any adjacent area under the control of the licensee(s) shall be removed or painted within 24 hours of being applied. 20. Existing bona fide eating establishment and required parking must conform to the provisions of Chapter 8, Article II, Division 3 of the Santa Ana Municipal Code (Building Security Ordinance). These code conditions will require that the existing project lighting, door /window locking devices and addressing be upgraded to current code standards. Lighting standards cannot be located in required landscape planters. Prior to issuance of Letter of Approval to the Alcohol Beverage Control Board, this condition must be complied with. 21. A timed - access cash controller or drop safe must be installed. 22. Install a silent armed robbery alarm. 23. The owner or manager of the licensed premises shall maintain on the premises a written security policy and procedures manual that has been approved by the Police Department, addressing at a minimum the following items: a. Procedures for handling obviously intoxicated persons. b. The method for establishing a reasonable ratio of employees to patrons, based upon activity level, in order to ensure adequate staffing levels to monitor beverage sales and patron behavior. C. Procedures for handling patrons involved in fighting, arguing or loitering about the building, and /or in the immediate adjacent area that is owned, leased, rented or used under agreement by the Licensee(s). d. Procedures for verifying the age of patrons for purposes of alcohol sales. e. Procedures for ensuring that servers monitor patrons to ensure that their drinking limit /potential intoxication is not exceeded. This procedure should Include a description of the procedure the server would use to warn, or refuse to serve, the patron. Procedures for calling the police regarding observed or reported criminal activity. g. Procedures for management of queuing lines. h. The location and description of any video games proposed to be on the premises. 3of4 31A-15 24. The operator shall be responsible for submitting a detailed outdoor fencing and dining plan where outdoor dining is proposed as part of the business operation. If the proposed dining area or fencing is in the public right of way, the applicant must obtain all required permits and approvals from the Public Works Agency, 25. Combined alcohol storage and display areas shall not exceed five percent (5 %) of the gross floor area of the licensed establishment. 4 of 4 31A -16 ROH — 06/23/14 RESOLUTION NO. 2014 -20 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING CONDITIONAL USE PERMIT NO. 2014 -13 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE FOR THE PROPERTY LOCATED AT 2629 WESTMINSTER AVENUE 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 applicant is requesting approval of Conditional Use Permit No. 2014- 13 for an upgrade from a Type 41 to a Type 47 (on -sale general) Alcoholic Beverage Control (ABC) license to allow the sales of beer, wine and distilled spirits for the property located at 2629 Westminster Avenue. B. Conditional Use Permit No. 2014 -13 came before the Planning Commission of the City of Santa Ana for a duly noticed public hearing on June 23, 2014. C. Santa Ana Municipal Code Section 41 -196 requires a conditional use permit for the sale of alcoholic beverages for on -site consumption. D. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to approve a conditional use permit upon making certain findings: 1. Will the proposed use provide a service or facility which will contribute to the general well being of the neighborhood or community? The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine and distilled spirits with their food. This will thereby benefit the community by providing a restaurant with an additional and complementary food - related amenity. Conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. Resolution No. 2014 -20 Page 1 of 5 31A -17 2. Will the proposed use under the circumstances of the particular case be detrimental to the health, safety or general welfare of persons residing or working in the vicinity? The proposed license for the on -sale consumption of beer, wine and distilled spirits at the restaurant will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use. In addition, the use will occur within the premises and is incidental to the restaurant use. 3. Will the proposed use adversely affect the present economic stability or future economic development of properties surrounding the area? The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other restaurants in the area that also offer beer, wine and distilled spirits for sale to their patrons. 4. Will the proposed use comply with the regulations and conditions specified in Chapter 41 for such use? As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling beer, wine and distilled spirits pursuant to Chapter 41 of the Santa Ana Municipal Code. The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize less than five percent of the gross floor area for the storage of alcoholic beverages, which is below the maximum threshold established by the Municipal Code. 5. Will the proposed use adversely affect the General Plan or any specific plan of the City? The proposed use will not adversely affect the General Plan. Policy 2.2 of the Land Use Element encourages land uses that accommodate the City's needs for goods and services. A restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana and strengthens the economic vitality of the Community Commercial (Cl) zoning district along Westminster Avenue. Moreover, Policy 5.5 of the Land Use Element encourages development that Resolution No. 2014 -20 Page 2 of 5 31A -18 is compatible with and supporting of surrounding land uses. The proposed alcoholic beverage service will be located entirely within an enclosed building and its operations will be compatible with the surrounding mix of uses. E. In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301. The Class 1 exemption allows the operating, permitting and licensing of existing private structures with negligible or no expansion of the existing use. The proposed application is to approve an alcoholic beverage control license and allow the sale of beer, wine and distilled spirits within an existing commercial building. Categorical Exemption Environmental Review No. 2014 -33 will be filed for this project. Section 2. The Planning Commission of the City of Santa Ana hereby approves Conditional Use Permit No. 2014 -13 as conditioned in Exhibit "A" attached hereto and incorporated herein. This decision is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: the Request for Planning Commission Action dated June 23, 2014, and exhibits attached thereto; and the public testimony, all of which are incorporated herein by this reference. ADOPTED this 23rd day of June, 2014. AYES: Commissioners: Alderete, Bacerra, Yrarrazaval (7) NOES: Commissioners: None (0) ABSENT: Commissioners: None (0) ABSTENTIONS: Commissioners: None (0) APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Ryan O. Hodge Assistant City Attorney Bauer, Gartner, Mill, Nalle, Eric Alderete Chairman 31A -19 Resolution No. 2014 -20 Page 3 of 5 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, ROSA BARELA, Acting Commission Secretary of the Planning Commission, do hereby attest to and certify the attached Resolution No. 2014 -20 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on June 23, 2014. Date: Acting Commission Secretary of the Planning Commission City of Santa Ana 31A-20 Resolution No. 2014 -20 Page 4 of 5 Conditions for Conditional Use Permit No. 2014 -13 Conditional Use Permit No. 2014 -13 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below prior to exercising the rights conferred by this conditional use permit. The applicant must remain in compliance with all conditions listed below throughout the life of the conditional use permit. Failure to comply with each and every condition may result in the revocation of the conditional use permit. A. Planning Division 1. Alcoholic beverages in containers of less than 16 oz. cannot be sold by single containers for off -site consumption, but must be sold in pre - packaged multi -unit quantities. Exhibit A Resolution No. 2014 -20 Page 5 of 5 31A-21 31A-22 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: CONDITIONAL USE PERMIT NO. 2014 -15 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOL BEVERAGE CONTROL LICENSE AT LAS GUERITAS RESTAURANT LOCATED AT 230 WEST WARNER AVENUE, SUITE 107 - RAMON BAGUIO, APPLICANT C Y MANAGE 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 Receive and file the staff report approving Conditional Use Permit No. 2014 -15 as conditioned. PLANNING COMMISSION ACTION On June 23, 2014, the Planning Commission adopted a resolution approving Conditional Use Permit (CUP) No. 2014 -15 as conditioned by a vote of 7:0 which approved an upgrade from a Type 41 to a Type 47 Alcoholic Beverage Control license for the on- premise sale and consumption of beer, wine and distilled spirits at Las Gueritas Restaurant at 230 West Warner Avenue, Suite 107 located in the Community Commercial (Cl) zoning district. The Planning Commission made no changes to the recommended conditions of approval outlined in the attached staff report (Exhibit A). DISCUSSION Las Gueritas currently operates within a 2,350 square foot tenant space on Warner Avenue between Broadway and Birch Street. The site is approximately 1.39 acres in size and contains a 21,482 square feet commercial building with 127 on -site parking spaces. The approval of this CUP allows for the sale and service of beer, wine, and distilled spirits in conjunction with food sales. Full sized site plans are available for public viewing in the Clerk of the Council Office. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 3 Economic Development, Objective No. 2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies). 31 B -1 Conditional Use Permit No. 2014 -15 July 15, 2014 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. Karen Haluza Interim Executive Director Planning & Building Agency HS:rb hs. LasCuentas?C UP2014 -15.= Exhibit: A. Planning Commission Staff Report 31 B -2 R �I ■ Commission I Action PLANNING COMMISSION MEETING DATE: JUNE 23, 2014 TITLE: PUBLIC HEARING — FILED BY RAMON BAGUIO FOR CONDITIONAL USE PERMIT NO. 2014-15 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOL BEVERAGE CONTROL LICENSE AT LAS GUERITAS RESTAURANT LOCATED AT 230 WEST WARNER AVENUE, SUITE 107 Prepared by Haliy Soboleske Interim Executive DirectVr PLANNING COMMISSION SECRETARY APPROVED • As Recommended • As Amended • Set Public Hearing For DENIED • Applicant's Request • Staff Recommendation CONTINUED TO _ f .__...__...__._- -... -- Acting annin anager RECOMMENDED ACTION Adopt a resolution approving Conditional Use Permit No. 2014 -15 as conditioned. DISCUSSION Request of Applicant Ramon Baguio, proprietor for Las Gueritas Restaurant, is requesting approval of a conditional use permit (CUP) to allow an upgrade of a Type 41 Alcoholic Beverage Control (ABC) license to a Type 47 ABC license for the on- premise sale and consumption of beer, wine, and distilled spirits at an existing restaurant. Establishments that sell alcoholic beverages require a conditional use permit pursuant to Section 41 -196 of the Santa Ana Municipal Code (SAMC). Prolect Location and Site Description Las Gueritas Restaurant is located within an existing integrated development center at the southwest corner of Broadway and Warner Avenue. The site is approximately 1.39 acres in size, is developed with a single 21,482 square feet commercial strip building and has 127 on -site parking spaces. Las Gueritas occupies a 2,350 square foot sit -down restaurant suite. Surrounding land uses include industrial to the east, south and west, and Manuel Esqueda Elementary School to the north (Exhibits 1, 2 and 3). Prolect Description Las Gueritas is requesting approval of an upgrade from an existing Type 41 Alcoholic Beverage Control (ABC) license to a Type 47 ABC license to allow the on- premise sale of beer, wine, and distilled spirits at an existing restaurant. Specifically, the applicant is seeking this license in order to serve alcohol to its patrons eating within its dining room only. The restaurant is a full service, sit- EXHIBIT A 31 B -3 Conditional Use Permit No. 2014 -15 June 23, 2014 Page 2 down eating establishment that accommodates approximately 75 patrons within its dining room. The on- premise sale of alcoholic beverages to customers is intended to provide a service ancillary to the primary restaurant use. The proposed hours of operation for the restaurant are Monday through Thursday 10 :00 a.m. to 11:00 p.m., Fridays and Saturdays 9:30 a.m. to 2:00 a.m., and 9:30 a.m. to 11:30 p.m. on Sundays. Restaurant operations are permitted until 2:00 a.m., with an after -hours conditional use permit not required since the property is more than 150 feet from property used for residential purposes. The storage area for alcoholic beverage will be located within a cooler area behind the counter in front of the kitchen area. The overall storage of alcoholic beverage consists of approximately 93 square feet which is approximately four percent of the floor area and is less than five percent of the gross floor area of the restaurant (Exhibits 4 and 5). Project Background Las Gueritas is an independently owned restaurant specializing in Mexican cuisine. This business has been operating at this location since October 2012, with the site operating as a restaurant use with a Type 41 ABC license since 2001. In 2001, Los Amigos restaurant received approval of Conditional Use Permit No. 2001 -11 for a Type 41 (on- premise beer and wine) ABC license. As the applicant is applying for a new license consisting of full liquor sales (Type 47), a new CUP is required. General Plan and Zoning Consistency The General Plan land use designation for the site is General Commercial (GC). General Commercial districts provide highly visible and accessible commercial development along the City's arterial transportation corridors and provide important neighborhood facilities and services, such as this restaurant. The project site is consistent with this General Plan land use designation. The zoning for the site is Community Commercial (C1). The C1 zoning district allows for retail and service uses such as restaurants, making the proposed use consistent with the zoning code. Praiect Analysis Conditional use permit requests are governed by Section 41 -638 of the SAMC. Conditional use permit requests may be granted when it can be shown that the following can be established: • That the proposed use will provide a service or facility which will contribute to the general well being of the neighborhood or community. • That the proposed use will not, under the circumstances of the particular case, be detrimental to the health, safety, or general welfare of persons residing or working in the vicinity. 31 B -4 Conditional Use Permit No. 2014 -15 June 23, 2014 Page 3 That the proposed use will not adversely affect the present economic stability or future economic development of properties surrounding the area. • That the proposed use will comply with the regulations and conditions specified in Chapter 41 for such use. • That the proposed use will not adversely affect the General Plan of the city or any specific plan applicable to the area of the proposed use. If these findings can be made, then it is appropriate to grant the conditional use permit. Conversely, the inability to make these findings would result in a denial. Using this information staff has prepared the following analysis, which, in turn forms the basis for the recommendation contained in this report. In analyzing the conditional use permit request, staff believes that the following findings of fact warrant approval of the conditional use permit; Las Gueritas Restaurant is requesting approval of an upgrade from a Type 41 Alcoholic Beverage Control (ABC) license to a Type 47 ABC license to allow the on- premise consumption of beer, wine, and distilled spirits. The applicant intends to sell alcoholic beverages as an ancillary service to the primary restaurant use. The State Department of Alcoholic Beverage Control conducts an annual drawing for a limited number of new Type 47 (on -sale general) liquor licenses. Having been selected as part of this drawing, the applicant is now seeking to upgrade the license to allow the sale of distilled spirits in addition to beer and wine. If approved, the action will also entail the voiding of the Type 41 ABC CUP. Staff has reviewed the applicant's request and has determined that the proposed establishment is in compliance with the standards for establishments selling alcoholic beverages. The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine, and distilled spirits with their food. This will thereby benefit the community by providing a restaurant with an additional and complementary food - related amenity. Conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. • The proposed license upgrade for the on -sale consumption of alcohol at this location will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use. In addition, the use will occur within the premises and is incidental to an established bona fide eating establishment use. • The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other restaurants in the area that also offer full alcoholic beverages for sale to their guests and other visitors. 31 B -5 Conditional Use Permit No. 2014 -15 June 23, 2014 Page 4 As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling alcohol pursuant to Chapter 41 of the Santa Ana Municipal Code (Exhibit 6). The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize less than five percent of the gross floor area for the storage of alcoholic beverages, which is below the maximum threshold established by the Municipal Code. The proposed use will not adversely affect the General Plan, Policy 1.8 of the Land Use Element encourages a balance of land uses to address basic community needs through encouraging commercial services. Policy 2.2 of the Land Use Element encourages land uses that accommodate the City's needs for goods and services. A restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana. Las Gueritas is proposing to occupy a suite with previous restaurant uses since 2001. The site will be in compliance with all standards of SAMC Section 41- 196(g) for the on -site sale and consumption of alcoholic beverages (Exhibit 6). In addition to these 25 operational standards, an additional condition of approval is proposed to mitigate potential impacts on the adjacent uses and ensure the use does not become an attractive nuisance to the community. Police Department Analysis The Police Department reviews conditional use permit applications for the sale of alcoholic beverages because there is a strong correlation between the availability of alcohol and crime. Studies have shown that alcohol is a contributing factor in crimes such as drunk driving, fatal traffic collisions, homicide, assaults, rape, domestic violence, drunk in public and other nuisance type of offenses. Without stringent controls to address the location of alcohol outlets, there is a strong likelihood that an overconcentration will create blight and adversely impact the community. The approval of a license in an area deemed overconcentrated and high in crime may affect the quality of life and police resources in the area, and aggravate existing conditions. The Police Department considered two factors when reviewing this type of application, crime rate and sensitive land uses. The Police Department has determined that this establishment is located in an area that is below average in police- related incidents. This site is located within Reporting District No. 169. Reporting District No. 169 ranks 640' out of 102 reporting districts in the number of police related calls for service, This Reporting District is 42 percent below the 20 percent threshold established by the State for high crime. Standards of approval are included as required by the SAMC that are adequate to address any concerns for the ABC License. A sensitive use has been identified in the immediate area. Manuel Esqueda Elementary School is located across the street to the north that might be impacted by this action. As a result, the Police Department has evaluated the applicant's request and believes that the proposed ABC license will not adversely affect the surrounding community as this is a food establishment that restricts alcohol consumption to the interior of the building. Conditions of approval are included as required by the SAMC that are adequate to address any concerns for the ABC License. RIUM Conditional Use Permit No. 2014 -15 June 23, 2014 Page 5 The Police Department recommends approval of the CUP provided that the standards are imposed to ensure that this location operates as a bona fide eating establishment and does not aggravate existing conditions or negatively impact the residents. Public Notification The project site is not located within the boundaries of a Neighborhood Association, but is within the South Main Business District. The project site itself was posted with a notice advertising this public hearing, a notice was published in the Orange County Reporter and mailed notices were sent to all property owners within 500 feet of the project site. At the time of this printing, no correspondence, either written or electronic, had been received from any members of the public. CEQA Compliance In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301. The Class 1 exemption allows the licensing of existing private structures and facilities when there is no expansion of the existing use. Categorical Exemption Environmental Review No. 2014 -37 will be filed for this project. Conclusion Based on the analysis provided within this report, staff recommends that the Planning Commission approve Conditional Use Permit No. 2014 -15 as conditioned. Hally Sob, leske Associate Planner HS:jm hslasGuerltas /CUP2014 -i & pp Attachments: Exhibit 1 — Vicinity Map Exhibit 2 — Location Map Exhibit 3 — Site Photo Exhibit 4 — Floor Plan Exhibit 5 — Site Plan Exhibit 6 — Operational Standards for On -Sale Establishments 31 B -7 EDI GER VE. C1 q cx 1 R1 Ri , RI R7 R7 pt R1 Al n1 Rx w 7RI snt M R1 R1 R1 R1 RSM R1 RI R1 1 n2 Ry ;! C2 M sM "�R1 Rt R7 R @ Ri R1 R1 RI � ni i Rl R7 R1 R2 Rx c' sM RZ ,RI Ri Ri ftt Rt E R1 RI Rl Ri RR1 R7 .i RI Ri Ri° C v Rl ni n2 � fl2 s sM nan 3 R2 g fll � Rl Rl " ftl � R1 I . R2 Nix R1 R1 NI R1 RI 2 p I R2'RI R1 RI R1 R1 R7 HERRR7 R1 R1 R1 R1 c "�e`u I c R1 R2 M R1 =. z RZ RI R1 R7 R1 R1 R1 R1 R1 D e �.. _ m „?a. �C2 • C2 CS M7 L��s or ftx C75i11< Ca R2 — 0 M1 Mi M1 RO1E CC2� nxnA i�I R2 T 121 MI MI I. R2 nx R2 R2: °�1 a C2 nx R2 Mt M1 Mt C2 M1 ? M1 Mi r ,.. „. Al GGNSVLAGROJO 4 OR CGMMEMALMSODMAL RI SNGEERAMILYfN;3 MAL .R FARRNGMW1FCA1ON GC CUG8NMENTCSNIFR R2 1NUFM1ILYI DGNCE GSA COMMEFUALSOLMIMAIN M1 LIGRCINOUS AL Rt MULlIft1E0EN8TYMULTRE Ot OOMMUNITYXMMH AL M2 HEAWINDUSRRAL TAMILYRBMCE CYMD COMM. OWMEMAUMUEUM DISMCT MO MIUTAINOR TIONS RA B.IRUf6NNAMRM18Mi G2 GWN ALCOMMEFOAL U OPEN SAGE FE RE8DWALLS%M- C3 CBJRULMNESS G PAOFES30NAL ED 9'Ff1FIGOMB.GPMWT 01A C8MLWSNWARRSf1ALIA(O VLIJ ft NNE00DMMUNIlYDEV8.OWM S'• S�9FlCRAN G RANNEDWOPNNG08tl RdJ RANNEDFESD@ ALOR1130FMRF C5 ARI ALWMMERAAL CUP 2014 -15 LAS GUERITAS RESTAURANT 230 WEST WARNER AVENUE, SUITE 107 - - =500 FEET 77000 i000 FEET P L A N N I N G A N D 9 U I L D I N G A G E N C Y EXHIBIT 7 VICINITY MAP 31 B -8 S..R. I S.J.R. L I G H T NDUSTRIAL S..R. I COMM. R5T PLACE COMMERCIAL F w w a SCHOOL WARNER ECOMMERCII H J +Sl Ems; D Z H x l7 J Y Q t] 4 0 cc m Y PRQ�E J +Sl Ems; a � v N � F- x J CENTRAL AVENUE UM M Fill -pill Im CUP 2014 -15 3 LAS GUERITAS RESTAURANT 230WESTWARNER AVENUE, SUITE 107'v P L A N N I N G A N D B U I L D I N G A G E N C Y LAND USE MAP EXHIBIT 2 31 B -9 CUP 2014 -15 LAS GUERITAS TYPE 47 ABC 230 WEST WARNER AVENUE, UNIT 107 SITE PHOTO EXHIBIT 3 31 B -10 DINING AREA FLOOR PLAN SCALE: l " =1' OJ AREA -=/y DINIMNGA ^REA j a DINING AREA 4 RE5TROOM J ,,� I RESTRCOM 31 B -11 TOTALALCOHOL STORAGE AREA: 93 SQUARE FEET ALCOHOL STORAGE RESTAURANT RATIO: V% A1.0 LAS GUERITAS RESTAURANT 230 W Warner Ave. Suite 107 Santa Ana, CA. 92707 APN parcel # 410 - 371 -01 APPLICANT, Rode Fajardo (049)298.8000 PROPERTY OWNER: Dalay Andrade (714)386 -9600 ZONING: Ci Community Commercial IStale Enterprise Zane TOTAL LOT SIZE: 1.3 Awes - 67,6iS S.F. PARKING SPACE: 1271nc1udn0 2 ADA r »� II IIIIIIIIIIIIII EXHIBIT 5 31 B -12 GENERAL NOTES: THESE PLANS AND DRAWINGS FOR A CONDITIONAL USE PERMIT TO ALLOW FOR THE SALE OF ALCOHOLIC BEVERAGES. NO NEW CONSTRUCTION AND NO PROPOSED ADDITIONAL SQUARE FOOTAGE, I A1.0 Sec. 41.196. Establishments selling alcoholic beverages. Operational standards for on -sale establishments. The following operational standards shall be included in the conditions of approval for the conditional use permit required pursuant to Section 41 -196 1. The premises shall at all times be maintained as a bona -fide eating establishment as defined in Section 23038 of the California Business and Professions code and shall provide a menu containing an assortment of foods normally offered. The premises must have suitable kitchen facilities and supply an assortment of foods commonly ordered at various hours of the day. Full and complete meals must be served whenever the privileges of the on -sale license are being exercised. 2. There shall be no fixed bar or lounge area upon the premises maintained for the sole purpose of sales, service or consumption of alcoholic beverages directly to patrons. A fixed bar or lounge may be permitted if patrons may order food being offered to the general patrons of the eating establishment. 3. The sales, service, and consumption of alcoholic beverages shall be permitted only between the hours of 8:00 a.m. and 12 :00 a.m. unless otherwise amended by the granting of a conditional use permit for after -hours operations pursuant to Santa Ana Municipal Code Chapter 41. 4. It shall be the applicant's responsibility to ensure that no alcoholic beverages are consumed on any property adjacent to the licensed premises under the control of the applicant, with the exception of any enclosed patio areas. 5. The applicant or an employee of the licensee must be present to monitor all areas of the establishment, including outdoor patios, during all times that alcoholic beverages are being served or consumed. 6. All employees serving alcoholic beverages must complete Responsible Beverage Service Training, or an equivalent approved by the State Department of Alcoholic Beverage Control, prior to being able to serve alcoholic beverages to patrons. Evidence of the completion of such training must be maintained on the premises and available for inspection upon request by the City. 7. During those times when patrons are restricted to 21 years of age or older, the applicant shall at all times utilize an age verification means or device for all purchases of alcoholic beverages. Such verification of age is not intended to discriminate against patrons based on race; ethnicity or legal status, but only to comply with state law restricting the sale of alcohol to those 21 and older. 8. Queuing lines shall be managed in an orderly manner and all disruptive and /or intoxicated patrons shall be denied entry. The business owner, or his designee, shall be responsible for monitoring the queuing lines at all times. EXHIBIT 6 1 of 4 31 B -13 9. The outdoor queuing line shall not block public walkways or obstruct the entry or exit doors of adjacent businesses. Stanchions or barriers must be used to maintain order at all times the queue exceeds 25 patrons. All stanchions or barriers located on public property must be approved by the Public Works Agency. 10. Employees and contract security personnel shall not consume any alcoholic beverages during their work shift, except for product sampling for purposes of employee education about new products. Under no circumstances may contract security personnel consume alcoholic beverages during their work shift. 11. There shall be no exterior advertising of any kind or type, including window signs or other signs visible from outside, that promote or indicate the availability of alcoholic beverages on the premises. Interior displays of alcoholic beverages or signs, which are clearly visible to the exterior, shall constitute a violation of this condition. Permissible window displays must be kept to a minimum for maximum visibility and shall not exceed 25 percent of window coverage. Floor displays shall not exceed three feet in height. 12. There shall be no promotions encouraging intoxication or drinking contests or advertisements indicating "buy one drink, get one free "two for the price of one ", or "all you can drink for,.," or similar language. 13. Any pool tables, amusement machines or video games maintained on the premises at any time must be reviewed and approved in a security plan submitted to the Chief of Police. 14. Live Entertainment, including but not limited to, amplified music, karaoke, performers and dancing, shall be subject to the issuance of an entertainment permit pursuant to Santa Ana Municipal Code ( "SAMC ") Chapter 11 — Entertainment, and shall comply with all of the standards contained therein. Notwithstanding this requirement, music /noise shall not be audible beyond 20 feet from the exterior of the premises in any direction. 15. Neither the applicant, nor any person or entity operating the premises with the permission of the applicant, shall violate the City's adult entertainment ordinance contained in SAMC Section 12 -1 and 12 -2. 16. The premises shall not be operated as an adult entertainment business as such term is defined in SAMC Section 41- 1701.6. 17. The applicant(s) shall be responsible for maintaining free of litter the area adjacent to the premises under the control of the licensee. 18. There shall be no public telephones located on the exterior of the premises. All interior pay phones must be designed to allow outgoing calls only. 2of4 31B-14 19. Any graffiti painted or marked upon the premises or on any adjacent area under the control of the licensee(s) shall be removed or painted within 24 hours of being applied. 20. Existing bona fide eating establishment and required parking must conform to the provisions of Chapter 8, Article Il, Division 3 of the Santa Ana Municipal Code (Building Security Ordinance). These code conditions will require that the existing project lighting, door /window locking devices and addressing be upgraded to current code standards. Lighting standards cannot be located in required landscape planters. Prior to issuance of Letter of Approval to the Alcohol Beverage Control Board, this condition must be complied with. 21. A timed - access cash controller or drop safe must be installed. 22. Install a silent armed robbery alarm. 23. The owner or manager of the licensed premises shall maintain on the premises a written security policy and procedures manual that has been approved by the Police Department, addressing at a minimum the following items: a. Procedures for handling obviously intoxicated persons. b. The method for establishing a reasonable ratio of employees to patrons, based upon activity level, in order to ensure adequate staffing levels to monitor beverage sales and patron behavior. C. Procedures for handling patrons involved in fighting, arguing or loitering about the building, and /or in the Immediate adjacent area that is owned, leased, rented or used under agreement by the Licensee(s). d. Procedures for verifying the age of patrons for purposes of alcohol sales e. Procedures for ensuring that servers monitor patrons to ensure that their drinking limit/potential intoxication is not exceeded. This procedure should include a description of the procedure the server would use to warn, or refuse to serve, the patron. Procedures for calling the police regarding observed or reported criminal activity. g. Procedures for management of queuing lines. h. The location and description of any video games proposed to be on the premises. 3of4 31 B -15 24. The operator shall be responsible for submitting a detailed outdoor fencing and dining plan where outdoor dining is proposed as part of the business operation, If the proposed dining area or fencing is in the public right of way, the applicant must obtain all required permits and approvals from the Public Works Agency. 25. Combined alcohol storage and display areas shall not exceed five percent (5 %) of the gross floor area of the licensed establishment. 4of4 31 B -16 ROH — 06/23/14 RESOLUTION NO. 2014 -21 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING CONDITIONAL USE PERMIT NO. 2014 -15 TO ALLOW AN UPGRADE FROM A TYPE 41 TO A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE FOR THE PROPERTY LOCATED AT 230 WEST WARNER AVENUE, SUITE 107 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 applicant is requesting approval of Conditional Use Permit No. 2014- 15 for an upgrade from a Type 41 to a Type 47 (on -sale general) Alcoholic Beverage Control (ABC) license to allow the sales of beer, wine and distilled spirits for the property located at 230 West Warner Avenue, Suite 107. B. Conditional Use Permit No. 2014 -15 came before the Planning Commission of the City of Santa Ana for a duly noticed public hearing on June 23, 2014. C. Santa Ana Municipal Code Section 41 -196 requires a conditional use permit for the sale of alcoholic beverages for on -site consumption. D. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to approve a conditional use permit upon making certain findings: 1. Will the proposed use provide a service or facility which will contribute to the general well being of the neighborhood or community? The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine and distilled spirits with their food. This will thereby benefit the community by providing a restaurant with an additional and complementary food - related amenity. Conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. Resolution No. 2014 -21 Page 1 of 5 31 B -17 2. Will the proposed use under the circumstances of the particular case be detrimental to the health, safety or general welfare of persons residing or working in the vicinity? The proposed license for the on -sale consumption of beer, wine and distilled spirits at the location will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use. Additionally, the use will occur within the premises and is incidental to the restaurant use. 3. Will the proposed use adversely affect the present economic stability or future economic development of properties surrounding the area? The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other restaurants in the area that also offer alcoholic beverages for sale to their guests and other visitors. 4. Will the proposed use comply with the regulations and conditions specified in Chapter 41 for such use? As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling beer, wine and distilled spirits pursuant to Chapter 41 of the Santa Ana Municipal Code and the guidelines established by the Planning Commission for restaurants selling alcohol with their meal. The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize less than five percent of the gross floor area for the storage of alcoholic beverages, which is below the maximum threshold established by the Planning Commission. 5. Will the proposed use adversely affect the General Plan or any specific plan of the City? The proposed use will not adversely affect the General Plan. Policy 1.8 of the Land Use Element encourages a balance of land uses to address basic community needs through encouraging commercial services. Policy 2.2 of the Land Resolution No. 2014 -21 Page 2 of 5 31 B -18 Use Element encourages land uses that accommodate the City's needs for goods and services. A restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana. E. In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301. The Class 1 exemption allows the licensing of existing private structures and facilities when there is no expansion of the existing use. Categorical Exemption Environmental Review No. 2014 -37 will be filed for this project. Section 2. The Planning Commission of the City of Santa Ana hereby approves Conditional Use Permit No. 2014 -15 as conditioned in Exhibit "A" attached hereto and incorporated herein. This decision is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: the Request for Planning Commission Action dated June 23, 2014, and exhibits attached thereto; and the public testimony, all of which are incorporated herein by this reference. ADOPTED this 23rd day of June, 2014. AYES: Commissioners: Alderete, Bacerra, Bauer, Gartner, Mill, Nalle, NOES: Commissioners: ABSENT: Commissioners: ABSTENTIONS: Commissioners: APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Ryan O. Hodge Assistant City Attorney Yrarrazaval (7) None (0) None (0) None (0) Eric Alderete Chairman 31 B -19 Resolution No. 2014 -21 Page 3 of 5 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, ROSA BARELA, Acting Commission Secretary of the Planning Commission, do hereby attest to and certify the attached Resolution No. 2014 -21 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on June 23, 2014. Date: Acting Commission Secretary Planning Commission City of Santa Ana 31 B -20 Resolution No, 2014 -21 Page 4 of 5 Conditions for Conditional Use Permit No. 2014 -15 Conditional Use Permit No. 2014 -15 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below prior to exercising the rights conferred by this conditional use permit. The applicant must remain in compliance with all conditions listed below throughout the life of the conditional use permit. Failure to comply with each and every condition may result in the revocation of the conditional use permit. A. Planning Division Alcoholic beverages in containers of less than 16 oz. cannot be sold by single containers for off -site consumption, but must be sold in pre - packaged multi -unit quantities. Exhibit A Resolution No. 2014 -21 Page 5 of 5 31 B -21 31 B -22 REQUEST FOR _ COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: CONDITIONAL USE PERMIT NO. 2014-20 TO ALLOW A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE FOR BUFFALO WILD WINGS RESTAURANT AT 3811 SOUTH BRISTOL STREET - MIKE AYAZ, APPLICANT S:L; Z Z_4/�_�X CITY MANA R RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2'0 Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Receive and file the staff report approving Conditional Use Permit No. 2014 -20 as conditioned. PLANNING COMMISSION ACTION On June 23, 2014, the Planning Commission adopted a resolution approving Conditional Use Permit No. 2014 -20 as conditioned by a vote of 7:0 to allow a Type 47 Alcoholic Beverage Control license for the on- premise sale and consumption of beer, wine and distilled spirits at the Buffalo Wild Wings restaurant at 3811 South Bristol Street located in the Commercial Residential (CR) zoning district. The Planning Commission added a condition of approval to clarify that an after -hours conditional use permit is not needed due to the distance of the restaurant from residential uses and to permit Buffalo Wild Wings to operate from 7:00 a.m. to 2:00 a.m. as outlined in the attached staff report (Exhibit A). Buffalo Wild Wings is applying for a Type 47 Alcoholic Beverage Control (ABC) license to allow the on- premise sale of beer, wine and distilled spirits as part of the proposed eating establishment's operations. The restaurant is a full- service, sit -down restaurant that is proposed to have seating for approximately 240 patrons within its dining room and outdoor patio areas. The on- premise sale of alcoholic beverages to customers is intended to provide a service ancillary to the primary restaurant use and will facilitate Buffalo Wild Wing's occupation of a previously vacant building that was previously used by restaurants. Full sized site plans are available for public viewing in the Clerk of the Council Office. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 3 Economic Development, Objective No. 2 (create new opportunities for business /job growth and encourage private development through new General Plan and Zoning Ordinance policies). 31 C -1 Conditional Use Permit No. 2014 -20 July 15, 2014 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. i� Karen Haluza Interim Executive Director Planning & Building Agency VF:rb of /reports/CUP1cuP14 -20 Buffalo Wild Wings.cc Exhibit: A. Planning Commission Staff Report 31 C -2 REQUEST FOR Planning Commission Action PLANNING COMMISSION MEETING DATE: JUNE 23, 2014 TITLE: PUBLIC HEARING — FILED BY MIKE AYAZ FOR CONDITIONAL USE PERMIT NO. 2014-20 TO ALLOW A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE FOR BUFFALO WILD WINGS RESTAURANT AT 3811 SOUTH BRISTOL STREET Prepared by Vince Fregoso Interim Executive Dire for w PLANNING COMMISSION SECRETARY APPROVED L7 As Recommended • As Amended • Set Public Hearing For DENIED • Applicant's Request • Staff Recommendation CONTINUED TO Actin lanrr g Manager Adopt a resolution approving Conditional Use Permit No. 2014 -20 as conditioned. Request of Applicant Mike Ayaz, representing Buffalo Wild Wings restaurant, is requesting approval of a conditional use permit for a Type 47 Alcoholic Beverage Control (ABC) license for the on- premise sale and consumption of beer, wine and distilled spirits at 3811 South Bristol Street. Establishments that sell alcoholic beverages require a conditional use permit (CUP) pursuant to Section 41 -196 of the Santa Ana Municipal Code (SAMC). Proiect Location and Site Description Buffalo Wild Wings is proposing to open a new restaurant within Bristol Center, an existing multi - tenant commercial center located at 3701 -3925 South Bristol Street, between MacArthur Boulevard and Sunflower Avenue. The center is 14.4 -acres in size and contains approximately 174,000 square feet of building area that was constructed in 1972. The Bristol Center site contains five separate buildings with over 25 retail tenant spaces that are occupied by a variety of retail, medical office and restaurant uses. Buffalo Wild Wings restaurant is intending to occupy a freestanding 6,087 square foot building that fronts Bristol Street. The building also contains an "L- shaped" outdoor patio that is located on the north and west sides of the building. A total of 643 parking spaces are provided for the mixture of uses in the center. The site is surrounded by commercial uses to the north, south and west, and a combination of commercial and multi- family residential uses to the east (Exhibits 1, 2 and 3), EXHIBIT A 31 C -3 Conditional Use Permit No. 2014 -20 June 23, 2014 Page 2 Project Description Buffalo Wild Wings is requesting approval of a Type 47 Alcoholic Beverage Control (ABC) license to allow the on- premise sale of beer, wine and distilled spirits as part of the proposed eating establishment's operations. The restaurant is a full- service, sit -down restaurant that is proposed to have seating for approximately 183 patrons within its dining room and bar areas. Additionally, another 56 patrons are proposed to be seated within the outdoor patio areas on the north and west sides of the building. The patio area is enclosed with a 36 -inch high wall that is in compliance with all applicable City and State Department of Alcoholic Beverage Control's standards. The on- premise sale of alcoholic beverages to customers is intended to provide a service ancillary to the primary restaurant use. The hours of operation for the restaurant are proposed to be from 7:00 a.m. to 2:00 a.m., seven days per week. Restaurant operations are permitted until 2 :00 a.m., with an after -hours conditional use permit not required since the property is more than 150 feet from property used for residential purposes. The storage area for alcoholic beverages will be located on a display and within two coolers behind the service counter for the restaurant. The alcohol display and the two coolers total 134 square feet in size, which is 2.2 percent of the floor area of the restaurant. This percentage of alcohol storage area is below the Santa Ana Municipal Code's maximum for eating establishments serving alcoholic beverages of five percent of the gross floor area of the restaurant (Exhibits 4 and 5). Proiect Background The Buffalo Wild Wings franchise was founded in the Midwest in 1982. Their restaurants typically include an extensive multi -media system of big screen televisions and projection screens, a full bar and open layout that attract both sports fans as well as families. Buffalo Wild Wings has close to 1,000 restaurants that are located in 45 states and Canada, with this the first location in Santa Ana. The restaurant is proposing to occupy a vacant building that was previously occupied by restaurants including Ccco's, Pat and Oscar's and O's American Kitchen. In 2004, Pat and Oscar's received approval of Conditional Use Permit No. 2004 -08 for a Type 41 (on- premise beer and wine) ABC license, which was surrendered when the restaurant ceased operations. As the applicant is applying for a new license consisting of full liquor sales (Type 47), a new CUP is required. General Plan and Zoning Consistency The General Plan land use designation for the site is District Center (DC). District Center land -use districts are high intensity locations of the City that provide highly visible and accessible residential, office and commercial development along the City's arterial transportation corridors and provide important neighborhood facilities and services, such as this restaurant. The project site is consistent with this General Plan land use designation. 31 C -4 Conditional Use Permit No. 2014 -20 June 23, 2014 Page 3 The parcel is located within the Commercial Residential (CR) zoning district. The CR zoning district allows a combination of multi - family residential uses as well as retail and service uses such as restaurants with ABC licenses, making the proposed use consistent with the CR zoning designation. Protect Analysis Conditional use permit requests are governed by Section 41 -638 of the SAMC. Conditional use permit requests may be granted when it can be shown that the following can be established: • That the proposed use will provide a service or facility which will contribute to the general well- being of the neighborhood or community. • That the proposed use will not, under the circumstances of the particular case, be detrimental to the health, safety, or general welfare of persons residing or working in the vicinity. • That the proposed use will not adversely affect the present economic stability or future economic development of properties surrounding the area. • That the proposed use will comply with the regulations and conditions specified in Chapter 41 for such use. • That the proposed use will not adversely affect the General Plan of the city or any specific plan applicable to the area of the proposed use. If these findings can be made, then it is appropriate to grant the conditional use permit. Conversely, the inability to make these findings would result in a denial. Using this information staff has prepared the following analysis, which, in turn forms the basis for the recommendation contained in this report. In analyzing the conditional use permit request, staff believes that the following findings of fact warrant approval of the conditional use permit. The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine and distilled spirits with their food throughout the establishment. This will thereby benefit the community by providing a restaurant with an additional and complementary food - related amenity. Additionally, conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. The proposed license for the on -sale consumption of beer, wine and distilled spirits at this location will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use. In addition, alcohol sales will primarily occur inside the premises and on the outdoor patio, which is not oriented toward any residential use. Additionally, the proposed ABC license is incidental to the primary restaurant use. 31 C -5 Conditional Use Permit No. 2014 -20 June 23, 2014 Page 4 The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other nearby restaurants that also offer alcoholic beverages for sale to their guests and other visitors. Moreover, the offering of alcoholic beverages allows the restaurant to become economically viable and contribute to the overall success of the neighborhood- serving shopping center in which it is located, helping to decrease the number of vacant buildings that may affect the economic viability of the site. As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling beer, wine and distilled spirits pursuant to Chapter 41 of the Santa Ana Municipal Code. The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize only 2.2 percent of the gross floor area for the display and storage of alcoholic beverages, which is below the maximum threshold established by the SAMC. The proposed use will not adversely affect the City's General Plan. Policy 2.2 of the Land Use Element encourages land uses that accommodate the City's needs for goods and services. A full- service restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana, as well as visitors to the surrounding area. f=urther, restaurant and ancillary uses such as on- premise alcohol sales are permitted within the District Center (DC) land use designation. The proposed project is not located in a specific plan area in the City. Further, Policy 2.9 of the Land Use Element supports developments that create a business environment that is safe and attractive. The physical improvement to the building will create an enhancement to the existing center and promote commercial activity in the area, Policy 5.5 of the Land Use Element encourages development that is compatible with and supporting of surrounding land uses. The Buffalo Wild Wings restaurant will be located in a commercial area and is compatible with the surrounding commercial businesses and nearby residential uses. Buffalo Wild Wings is proposing to occupy a vacant commercial building that has been occupied by restaurant uses since 1972. The site will be in compliance with all standards of SAMC Section 41- 196(g) for the on -site sale and consumption of alcoholic beverages (Exhibit 6). In addition to these 25 operational standards, an additional condition of approval is proposed to mitigate potential impacts on the adjacent uses and ensure the use does not become an attractive nuisance to the community. Police Department Analysis The Police Department reviews conditional use permit applications for the sale of alcoholic beverages because there is a strong correlation between the availability of alcohol and crime. Studies have shown that alcohol is a contributing factor in crimes such as drunk driving, fatal traffic collisions, homicide, assaults, rape, domestic violence, drunk in public and other nuisance type of offenses. 31 C -6 Conditional Use Permit No. 2014 -20 June 23, 2014 Page 5 The Police Department considered two factors when reviewing this type of application: crime rate and sensitive land uses. It has been determined that 3811 South Bristol Street is located in Reporting District No. 151. This reporting district ranks 36th out of 102 reporting districts in the number of police related calls for service established under Business and Professions Code Section 23958.4. This reporting district is 15 percent below the 20 percent threshold established by the State for high crime. No sensitive uses were found in the immediate area that might be impacted by this action. As a result, the Police Department has evaluated the applicant's request and believes that the proposed ABC license will not adversely affect the surrounding community, Conditions of approval are included as required by the SAM that are adequate to address any concerns for the ABC License, Public Notification The project site is not located within the boundaries of any Neighborhood Association but is located adjacent to the South Coast Neighborhood Association. The chairperson of the adjacent neighborhood association was contacted by staff to discuss the proposed project. The association president did not raise any issues during the telephone discussion. The project site was posted with a notice advertising this public hearing, a notice was published in the Orange County Reporter and mailed notices were sent to all property owners and tenants within 500 feet of the project site and to the South Coast neighborhood association chairperson. At the time of printing of this report, no areas of concern were raised, nor had any correspondence, either written or electronic, been received from any members of the public CEQA Compliance In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301, The Class 1 exemption allows the operating, permitting and licensing of existing private structures with negligible or no expansion of the existing use. The proposed application is to approve an alcoholic beverage control license and allow the sale of beer, wine and distilled spirits within an existing commercial building. Categorical Exemption Environmental Review No. 2014 -54 will be filed for this project. Conclusion Based on the analysis provided within this report, staff recommends that the Planning Commission approve Conditional Use Permit No. 2014 -20 as conditioned. Vince Fregoso, AI P Acting Planning Manager VF:jm of 1rapods /CUP1cup14 -20 Buffalo Wild Winps.pc 31 C -7 Conditional Use Permit No. 2014 -20 June 23, 2014 Page 6 Attachments: Exhibit 1 — Vicinity Map Exhibit 2 — Location Map Exhibit 3 — Site Photo Exhibit 4 — Site Plan Exhibit 5 — Floor Plan Exhibit 6 — Operational Standards for On -Sale Establishments 31 C -8 I KI RI 0 RI Pi PAD RI o R1 MIN ml R1 Ell Ell 0 111A� RI T Ri it. 2 C4 :SD-4][ RI FL2,PRD R4 RI RI --------- 0 FT- PRO RI-PRID Q R Jill SD-71Jill � R4 (--7 R4 �PROJECT Rl- R4 —77=t-777: SITE FIT Rl RI Rl CR R4 SD-48 CR Al 36NDRALAGRICULMRALf CR COMMERCIALRE51DEPMAL RI MINOT FAWLY RESIDENTIAL .B PARKING MODIFICATION cc GDVOINMENTCENTER R3 TWO FAMILY RI CISM COMMERCIAL SOUTH MAIN MI DRffrII`M9RIAL R3 MULI OLE DENSITY MULTIPLE cl COMMUNITY COMMERCIAL N12 HITAWINDV9R1AL FAMILYRENDENCE Cl-MO COMM. COMMFROAUMOSEUM DESTRIC r AID MILITARYOPERATIONS PI SUBUTRIANAPARMENTS C2 GSNERALCOMMERCIAL a CEENSPACE IF RESIDENTIALES17AIE 13 CENTRAL BUSINESS P PROFESSIONAL SO SPECIFICOEVELOPNIENr (5-A CENTRAL BUSINE55-ARTsi PCD PWDFD COMMUNITY DINELOPMEN F SP SPECIFICOLAN C11 PUNNED SHOPPING CENTER RED PIUNNED RESIDENTIAL DEVELOPMENT CS ARTERIAL COMMERCIAL. 'i CUP 2014 -20 n(a �;q BUFFALO WILD WINGS RESTAURANT 3811 SOUTH BRISTOL STREET 500 FEET - -- I' = 1000 FEET I. A N A I IN G A N 0 8 u I L D I N G A 7 E -,NC Y EXHIBIT i 31 C-9 w 0 PROJECT 517E 0 � 6 V V � u g Q g 0 U W W i O J STEVENS AVE. amn nne cw wins SUNFLOWER AVENUE 5 IA 0 P P I N G C O M M E R C I A L o 01 C 0 M M E R C A L C E N T E R U �� o d~ Z w V w 0 PROJECT 517E 0 � 6 V V � u g Q g 0 U CUP 2014 -20 -1 BUFFALO WILD WINGS RESTAURANT 3811 SOUTH BRISTOL STREET S)' P L A N N I N G A N 0 B U I L 0 1 N G A G E N C Y EXHIBIT 2 31 C -10 i '. ,. SE)NIMaim oivzizins q 21 t O zi j 15ICE "6 0 < RAHN b H r. j "I EXHIBIT 4 31 C -12 � U) (n c C) c o a V) NOVOAGNIN w z m NVId 3115 3Wd093A34 3 99 ;A i Ov, o0a " SONIM C11im mviins MI al Jr j S g. I. 71 Av. ID iff 7-T-TrITT 7 J" .00 7, 777 jj co M: -3c) 0 011 8 c-1 D 04 (D lio r a I ou ocjq 1-0r] cloc- A( v o o n c @ 08 8 C.) EXHIBIT 5 31 C -13 Sec. 41 -196. Establishments selling alcoholic beverages. Operational standards for on -sale establishments. The following operational standards shall be included in the conditions of approval for the conditional use permit required pursuant to Section 41 -196 The premises shall at all times be maintained as a bona -fide eating establishment as defined in Section 23038 of the California Business and Professions code and shall provide a menu containing an assortment of foods normally offered. The premises must have suitable kitchen facilities and supply an assortment of foods commonly ordered at various hours of the day. Full and complete meals must be served whenever the privileges of the on -sale license are being exercised. 2. There shall be no fixed bar or lounge area upon the premises maintained for the sole purpose of sales, service or consumption of alcoholic beverages directly to patrons. A fixed bar or lounge may be permitted if patrons may order food being offered to the general patrons of the eating establishment. 3. The sales, service, and consumption of alcoholic beverages shall be permitted only between the hours of 8 :00 a.m, and 12:00 a.m. unless otherwise amended by the granting of a conditional use permit for after -hours operations pursuant to Santa Ana Municipal Code Chapter 41, 4. It shall be the applicant's responsibility to ensure that no alcoholic beverages are consumed on any property adjacent to the licensed premises under the control of the applicant, with the exception of any enclosed patio areas. 5. The applicant or an employee of the licensee must be present to monitor all areas of the establishment, including outdoor patios, during all times that alcoholic beverages are being served or consumed. 6. All employees serving alcoholic beverages must complete Responsible Beverage Service Training, or an equivalent approved by the State Department of Alcoholic Beverage Control, prior to being able to serve alcoholic beverages to patrons. Evidence of the completion of such training must be maintained on the premises and available for inspection upon request by the City. During those times when patrons are restricted to 21 years of age or older, the applicant shall at all times utilize an age verification means or device for all purchases of alcoholic beverages. Such verification of age is not intended to discriminate against patrons based on race, ethnicity or legal status, but only to comply with state law restricting the sale of alcohol to those 21 and older. Queuing lines shall be managed in an orderly manner and all disruptive and /or intoxicated patrons shall be denied entry. The business owner, or his designee, shall be responsible for monitoring the queuing lines at all times. EXHIBIT 6 1 of 4 31C-14 9. The outdoor queuing line shall not block public walkways or obstruct the entry or exit doors of adjacent businesses. Stanchions or barriers must be used to maintain order at all times the queue exceeds 25 patrons. All stanchions or barriers located on public property must be approved by the Public Works Agency. 10. Employees and contract security personnel shall not consume any alcoholic beverages during their work shift, except for product sampling for purposes of employee education about new products. Under no circumstances may contract security personnel consume alcoholic beverages during their work shift. 11. There shall be no exterior advertising of any kind or type, including window signs or other signs visible from outside, that promote or indicate the availability of alcoholic beverages on the premises. Interior displays of alcoholic beverages or signs, which are clearly visible to the exterior, shall constitute a violation of this condition. Permissible window displays must be kept to a minimum for maximum visibility and shall not exceed 25 percent of window coverage. Floor displays shall not exceed three feet in height. 12. There shall be no promotions encouraging intoxication or drinking contests or advertisements indicating "buy one drink, get one free ", "two for the price of one ", or "ail you can drink for..." or similar language. 13. Any pool tables, amusement machines or video games maintained on the premises at any time must be reviewed and approved in a security plan submitted to the Chief of Police. 14. Live Entertainment, including but not limited to, amplified music, karaoke, performers and dancing, shall be subject to the issuance of an entertainment permit pursuant to Santa Ana Municipal Code ( "SAMC") Chapter 11 — Entertainment, and shall comply with all of the standards contained therein. Notwithstanding this requirement, music/noise shall not be audible beyond 20 feet from the exterior of the premises in any direction. 15. Neither the applicant, nor any person or entity operating the premises with the permission of the applicant, shall violate the City's adult entertainment ordinance contained in SAMC Section 12 -1 and 12 -2. 16. The premises shall not be operated as an adult entertainment business as such term is defined in SAMC Section 41- 1701.6. 17. The applicant(s) shall be responsible for maintaining free of litter the area adjacent to the premises under the control of the licensee. 18. There shall be no public telephones located on the exterior of the premises. All interior pay phones must be designed to allow outgoing calls only. 2of4 31 C -15 19. Any graffiti painted or marked upon the premises or on any adjacent area under the control of the licensee(s) shall be removed or painted within 24 hours of being applied. 20. Existing bona fide eating establishment and required parking must conform to the provisions of Chapter 8, Article II, Division 3 of the Santa Ana Municipal Code (Building Security Ordinance). These code conditions will require that the existing project lighting, door /window locking devices and addressing be upgraded to current code standards. Lighting standards cannot be located in required landscape planters. Prior to issuance of Letter of Approval to the Alcohol Beverage Control Board, this condition must be complied with. 21. A timed - access cash controller or drop safe must be installed, 22. Install a silent armed robbery alarm. 23. The owner or manager of the licensed premises shall maintain on the premises a written security policy and procedures manual that has been approved by the Police Department, addressing at a minimum the following items: a. Procedures for handling obviously intoxicated persons. b. The method for establishing a reasonable ratio of employees to patrons, based upon activity level, in order to ensure adequate staffing levels to monitor beverage sales and patron behavior. C. Procedures for handling patrons involved in fighting, arguing or loitering about the building, and /or in the immediate adjacent area that is owned, leased, rented or used under agreement by the Licensee(s). d. Procedures for verifying the age of patrons for purposes of alcohol sales. e. Procedures for ensuring that servers monitor patrons to ensure that their drinking limit /potential intoxication is not exceeded. This procedure should include a description of the procedure the server would use to warn, or refuse to serve, the patron. f. Procedures for calling the police regarding observed or reported criminal activity. g. Procedures for management of queuing lines. h. The location and description of any video games proposed to be on the premises. 3of4 31 C -16 24. The operator shall be responsible for submitting a detailed outdoor fencing and dining plan where outdoor dining is proposed as part of the business operation. If the proposed dining area or fencing is in the public right of way, the applicant must obtain all required permits and approvals from the Public Works Agency. 25. Combined alcohol storage and display areas shall not exceed five percent (5 %) of the gross floor area of the licensed establishment. 4of4 31 C -17 ROH — 06/23/14 RESOLUTION NO. 2014 -22 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING CONDITIONAL USE PERMIT NO. 2014 -20 TO ALLOW A TYPE 47 ALCOHOLIC BEVERAGE CONTROL LICENSE FOR THE PROPERTY LOCATED AT 3811 SOUTH BRISTOL STREET 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 applicant is requesting approval of Conditional Use Permit No. 2014- 20 for a Type 47 (on -sale general) Alcoholic Beverage Control (ABC) license to allow the sales of beer, wine and distilled spirits for the property located at 3811 South Bristol Street. B. Conditional Use Permit No. 2014 -20 came before the Planning Commission of the City of Santa Ana for a duly noticed public hearing on June 23, 2014. C. Santa Ana Municipal Code Section 41 -196 requires a conditional use permit for the sale of alcoholic beverages for on -site consumption. D. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to approve a conditional use permit upon making certain findings: 1. Will the proposed use provide a service or facility which will contribute to the general well being of the neighborhood or community? The proposed alcohol beverage license will provide an ancillary service to the restaurant customers by allowing them the ability to purchase beer, wine and distilled spirits with their food throughout the establishment. This will thereby benefit the community by providing a restaurant with an additional and complementary food - related amenity. Additionally, conditions have been placed on the alcoholic beverage control license which will mitigate any potential impacts created by the use and ensure that the use will not negatively affect the surrounding community. Resolution No. 2014 -22 Page 1 of 5 31 C -18 2. Will the proposed use under the circumstances of the particular case be detrimental to the health, safety or general welfare of persons residing or working in the vicinity? The proposed license for the on -sale consumption of beer, wine and distilled spirits at this location will not be detrimental to persons residing or working in the vicinity because conditions have been placed on the alcoholic beverage control license that will mitigate any potential negative or adverse impacts created by the use. In addition, the use will primarily occur within the premises and in outdoor seating areas that are not oriented toward any residential use. Additionally, the proposed ABC license is incidental to the primary restaurant use. 3. Will the proposed use adversely affect the present economic stability or future economic development of properties surrounding the area? The proposed use will not adversely affect the economic stability of the area, but will instead allow the restaurant to compete with other nearby restaurants that also offer alcoholic beverages for sale to their guests and other visitors. Moreover, the offering of alcoholic beverages allows the restaurant to become economically viable and contribute to the overall success of the neighborhood - serving shopping center in which it is located, helping to decrease the number of vacant tenant spaces that may affect the economic viability of the site. 4. Will the proposed use comply with the regulations and conditions specified in Chapter 41 for such use? As conditioned, the proposed project will be in compliance with all applicable regulations and conditions imposed on a restaurant selling beer, wine and distilled spirits pursuant to Chapter 41 of the Santa Ana Municipal Code. The facility has the kitchen equipment necessary to be considered a bona fide restaurant use and is eligible to obtain a restaurant related alcoholic beverage control license. Additionally, the restaurant will utilize only 2.2 percent of the gross floor area for the display and storage of alcoholic beverages, which is below the maximum threshold established by the SAMC. 5. Will the proposed use adversely affect the General Plan or any specific plan of the City? Resolution No, 2014 -22 Page 2 of 5 31 C -19 The proposed use will not adversely affect the City's General Plan. Policy 2.2 of the Land Use Element encourages land uses that accommodate the City's needs for goods and services. A full- service restaurant with an ancillary alcohol license provides a dining service to the residents of Santa Ana, as well as visitors to the surrounding area. Further, restaurant and ancillary uses such as on- premise alcohol sales are permitted within the District Center (DC) land use designation. The proposed project is not located in a specific plan area in the City. Further, Policy 2.9 of the Land Use Element supports developments that create a business environment that is safe and attractive. The physical improvement to the building will create an enhancement to the existing center and promote commercial activity in the area. Policy 5.5 of the Land Use Element encourages development that is compatible with and supporting of surrounding land uses. The Buffalo Wild Wings restaurant will be located in a commercial area and is compatible with the surrounding commercial businesses and nearby residential uses. E. In accordance with the California Environmental Quality Act the recommended action is exempt for further review per Section 15301. The Class 1 exemption allows the operating, permitting and licensing of existing private structures with negligible or no expansion of the existing use. The proposed application is to approve an alcoholic beverage control license and allow the sale of beer, wine and distilled spirits within an existing commercial building. Categorical Exemption Environmental Review No. 2014 -54 will be filed for this project. Section 2. The Planning Commission of the City of Santa Ana hereby approves Conditional Use Permit No. 2014 -20 as conditioned in Exhibit "A" attached hereto and incorporated herein. This decision is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: the Request for Planning Commission Action dated June 23, 2014, and exhibits attached thereto; and the public testimony, all of which are incorporated herein by this reference. Resolution No. 2014 -22 Page 3 of 5 31 C -20 ADOPTED this 23rd day of June , 2014. AYES: Commissioners: Alderete, Bacerra, Yrarrazaval(7) NOES: Commissioners: None (0) ABSENT: Commissioners: None (0) ABSTENTIONS: Commissioners: None (0) APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney Ryan O. Hodge Assistant City Attorney Bauer, Gartner, Mill, Nalle, Eric Alderete Chairman CERTIFICATE OF ATTESTATION AND ORIGINALITY I, ROSA BARELA, Clerk of the Planning Commission, do hereby attest to and certify the attached Resolution No. 2014 -22 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on June 23, 2014. Date: Clerk of the Planning Commission City of Santa Ana 31 C -21 Resolution No. 2014 -22 Page 4 of 5 Conditions for Conditional Use Permit No. 2014 -20 Conditional Use Permit No. 2014 -20 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below prior to exercising the rights conferred by this conditional use permit. The applicant must remain in compliance with all conditions listed below throughout the life of the conditional use permit. Failure to comply with each and every condition may result in the revocation of the conditional use permit. A. Planning Division Alcoholic beverages in containers of less than 16 oz. cannot be sold by single containers for off -site consumption, but must be sold in pre - packaged multi -unit quantities. 2. The subject property is located more than 150 feet from property zoned and used for residential and, as such, does not require a conditional use permit for after -hours operation in the CR zone pursuant to Santa Ana Municipal Code Section 41- 442.5(d). Accordingly, this property is not sect to Santa Ana Municipal Code Section 41- 196(8)(3), which requires a conditional use permit for restaurants selling alcohol after 12:00 a.m. and before 8:00 a.m. (Added by the Planning Commission June 23, 2014.) , 111:7[%1 Resolution No. 2014 -22 Page 5 of 5 31 C -22 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: VARIANCE NOS. 2013 -06, 2013 -07 AND 2014-02 TO ALLOW REDUCTIONS IN THE MINIMUM LOT SIZE, STREET FRONTAGE AND OFF - STREET PARKING REQUIREMENTS FOR THE CONSTRUCTION OF A SINGLE - FAMILY RESIDENCE LOCATED AT 317 NORTH JACKSON STREET - RUBEN GUTIERREZ, APPLICANT CITY MANAG CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2w Reading ❑ Implementing Resolution ❑ Set Pubiic Hearing For CONTINUED TO FILE NUMBER RECOMMENDED ACTION Receive and file the staff report approving Variance No. 2013 -06 as conditioned, Variance No. 2013 -07 as conditioned, and Variance No. 2014 -02 as conditioned. PLANNING COMMISSION ACTION On June 23, 2014, the Planning Commission adopted a resolution approving Variance No. 2013- 06 to allow a reduction in the minimum lot size as conditioned; adopted a resolution approving Variance No. 2013 -07 to allow a reduction in required street frontage as conditioned; and adopted a resolution a resolution approving Variance No. 2014 -02 to allow a reduction in the minimum off - street parking as conditioned by a vote of 7:0 in order to construct a new single - family residence with a detached garage at 317 North Jackson Street located in the Two Family Residence (R -2) zoning district. The Planning Commission made no changes to the recommended conditions of approval outlined in the attached staff report (Exhibit A). DISCUSSION This action will allow for the construction of a 1,909 square foot, two -story, four - bedroom, three - bathroom single family residence in an R -2 zone. The first floor consists of a bedroom /study, living room, kitchen, and bathroom. The second floor consists of three bedrooms and two bathrooms. Additionally, a detached two -car garage is proposed at the rear of the site. The home is designed in Craftsman /Ranch style consistent with the neighborhood. Full sized site plans are available for public viewing in the Clerk of the Council Office. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal No. 5 Community Health, Livability, Engagement & Sustainability, Objective No. 4 (to support neighborhood vitality and livability). 32A -1 Variance Nos. 2013 -06, 2013 -07 & 2014 -02 July 15, 2014 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. Karen Haluza Interim Executive Director Planning & Building Agency HS:rb Ns: 317NJwksoN317NJa&Wr va13-06va13 -07v 14 -02.2 Exhibit: A. Planning Commission Staff Report 32A -2 REQUEST FOR Planning Commission Action PLANNING COMMISSION MEETING DATE: JUNE 23, 2014 TITLE; PUBLIC HEARING — FILED BY RUBEN GUTIERREZ FOR VARIANCE NOS, 2013 -06, 2013 -07 AND 2014 -02 TO ALLOW REDUCTIONS IN THE MINIMUM LOT SIZE, STREET FRONTAGE AND OFF - STREET PARKING REQUIREMENTS FOR THE CONSTRUCTION OF A SINGLE- FAMILY RESIDENCE LOCATED AT 317 NORTH JACKSON STREET Prepared by Halms Soboleske Interim Executive DirectU PLANNING COMMISSION SECRETARY APPROVED ❑ As Recommended ❑ As Amended ❑ Set Public Hearing For DENIED • Applicant's Request • Staff Recommendation CONTINUED TO Acting ann>i Manager RECOMMENDED ACTION 1. Adopt a resolution approving Variance No. 2013 -06 to allow a reduction in the minimum lot size as conditioned. 2. Adopt a resolution approving Variance No. 2013 -07 to allow a reduction in required street frontage as conditioned. 3. Adopt a resolution approving Variance No. 2014 -02 to allow a reduction in the minimum off - street parking as conditioned. DISCUSSION Request of Applicant Ruben Gutierrez is requesting approval of three variances in order to construct a new 1,909 square foot single - family residence with a 400 square foot detached two -car garage on a 3,750 square foot parcel located at 317 North Jackson Street. The request includes variances from Santa Ana Municipal Code (SAMC) Section 41- 247.6(a) for a reduction in lot size, Section 41- 247.7(b) for reduced street frontage and from Section 41- 1321(b) for reduced off- street parking for a single - family residence in the Two - Family Residence (R2) zoning district. Protect Location and Site Description The property is located on the east side of Jackson Street, between First and Fifth Streets, and is within the Santa Anita neighborhood. The lot is 3,750 square feet in size and is currently vacant. The property is surrounded by single - family and multi - family residences to the north, south, east and west (Exhibits 1, 2 and 3). EXHIBIT A 32A -3 VA Nos. 2013 -06, 2013 -07 and 2014 -02 June 23, 2014 Page 2 Proiect Descriotion The project involves the construction of a 1,909 square foot, two -story, four - bedroom, three - bathroom single - family residence. The first floor consists of a bedroom /study, living room, kitchen, and bathroom. The second floor consists of three bedrooms and two bathrooms. Additionally, a detached two -car garage is proposed at the rear of the site. The home is designed in Craftsman /Ranch style, and is in keeping with the Citywide Design Guidelines, as well as the architectural style of the surrounding neighborhood, Exterior materials to be used include stucco and concrete board material with stone veneer accents to provide architectural interest (Exhibits 4, 5 and 6). Proiect Backaround The subject property was subdivided in its current configuration in 1925 with a street frontage of 30 feet and a depth of 125 feet, consistent with a significant number of lots on this block. Over time, some of the lots have merged to create larger lots that allowed the development of multi- family residences, but the subject site has remained in its original configuration. This is the only vacant lot on this block. General Plan and Zonina Analvsis The General Plan land use designation for the site is Low Density Residential (LR -7). Low density designated areas are typically characterized by single- family residential land uses. The proposed single - family residence is consistent with this General Plan land use designation. The subject site is zoned Two - Family Residence (R2). The R2 zone allows development such as duplexes and single- family residences. The use is consistent with the zoning designation. Project Analysis The applicant is proposing to obtain three variances from the development standards established in the Santa Ana Municipal Code (SAMC), specifically Section 41- 247.6(a), which establishes a minimum lot size, Section 41- 247.7(b), which establishes the required lot frontage in the R2 zone, and Section 41- 1420(a)(1), which requires four off - street parking spaces for a single - family residence (two in a garage and two in a driveway). Variances from the SAMC may be granted if the following findings can be established: • That there exists a special circumstance related to the property, such as size, shape, topography, location or surroundings. • That the granting of the variance is necessary for the preservation and enjoyment of substantial property rights. 32A -4 VA Nos. 2013 -06, 2013 -07 and 2014 -02 June 23, 2014 Page 3 • That the granting of the variance will not be detrimental to the public or surrounding property.. • That the granting of the variance will not adversely affect the General Plan. If these findings can be made, then it is appropriate to grant the variances. Conversely, the inability to make any of these findings would result in a denial. Using this information, staff has prepared the following analysis, which forms the basis for the recommendation contained in this report. Variance Nos. 2013 -06 and 2013 -07 — Lot Size and Street Frontage Section 41- 247,6(a) and Section 41- 247.7(b) require a minimum 6,000 square foot lot and a minimum of 50 feet of street frontage respectively. The lot was legally subdivided in 1925 which was prior to the establishment of minimum standards for a lot, and the size and width configuration is therefore legal nonconforming and is consistent with other lots in the neighborhood. Staff recommends approval of the variances for reductions in minimum lot size and street frontage based on the following facts and findings: The project site has special circumstances related to its size, shape and surroundings. The lot was created in 1925 prior to the establishment of development standards for lots in the City. The lot was legally subdivided; and is therefore legally nonconforming, and is consistent with other lots in the neighborhood. The lots on either side of the subject site are developed at this time so there is no potential for this lot to become larger. The granting of these variances are necessary for the preservation and enjoyment of substantial property rights. Without the approval of the requested variances the developable area would be so restricted as to become infeasible for development and would remain vacant. The proposed project maximizes the developable area while minimizing any impacts to any adjacent single - family residences. The lot was legally subdivided in 1925 to a size and width configuration that is legal nonconforming and is consistent with other lots in the neighborhood. The granting of these variances will not be detrimental to the public or surrounding properties. The project has been designed to meet the applicable development standards for the front yard setback to minimize the visual impact on the street. Given these property restrictions, the proposed residence is consistent in size with other homes in the neighborhood. Finally, the granting of these variances will not adversely affect the General Plan. The project has been designed to be architecturally integrated with other single- family homes in the area and is consistent with the Land Use Element's Policies 2.10 and 3.5 that supports new development which is harmonious in scale and character with existing development in the area. The development of a single - family residence on this previously vacant parcel also supports Policy 13 of the Housing Element, which promotes a complementary mix of land uses that improves the character and stability of neighborhoods. 32A -5 VA Nos. 2013 -06, 2013 -07 and 2014 -02 June 23, 2014 Page 4 Variance No. 2014 -02 — Off- Street Parking The applicant is proposing to provide a two -car garage with access from an existing alley. Section 41- 1420(a)(1) requires four parking stalls for a single - family residence, with two stalls within a garage and two stalls in the driveway. Without a driveway, the proposal does not meet the minimum standard of the Santa Ana Municipal Code. Section 41- 1303(a) requires the minimum length of a parking stall be 18 feet. The size of the rear yard would be further reduced if the proposal added an additional 15 feet to the driveway size. Since private open space is related to overall livability, a reduction in parking requirements is a legitimate concession rather than losing additional open space. Providing a driveway would result in a loss of open space and the majority of the rear yard paved with concrete. Staff recommends approval of the variance for a reduction in required off- street parking based on the following facts and findings: The project site has special circumstances related to its size, shape and surroundings, The smaller lot size significantly limits the project's ability to meet all development requirements and provide adequate parking and open space area. An analysis of development options concluded that a project meeting all the development standards in the R2 zone would restrict development on the parcel to a residence that is not viable. The granting of this variance is necessary for the preservation and enjoyment of substantial property rights. Without the approval of the requested variance the developable area of the site would be so restricted as to become infeasible for development and the site would remain vacant. The proposed project allows development on a substandard parcel while minimizing any impacts to any adjacent single- family residences. The size of the rear yard would be reduced if the driveway complied with code. Since private open space is related to overall livability, a reduction in parking is a legitimate concession rather than losing additional open space. The lot was legally subdivided in 1925 and is legal nonconforming as to lot size as are many of the lots in this neighborhood. The granting of this variance will not be detrimental to the public or surrounding properties. The project has been designed to meet the applicable development standards for setbacks to minimize the visual impact on the street. Additionally, the garage is positioned nearest the eastern property line to maintain the required 20 -foot front yard setback and maximize open space between the detached garage and house. Several residences on Jackson Street were constructed in a similar configuration without a major impact to the neighborhood. Lastly; the granting of this variance will not adversely affect the General Plan. The project has been designed to be architecturally integrated with other single - family homes in the area and is consistent with Policies 2.10 and 3.5 of the Land Use Element that supports new development which is harmonious in scale and character with existing development in the area. The development of a single - family residence on this previously vacant parcel also supports Policy 1.3 of the Housing Element that promotes a complementary mix of land uses that improves the character and stability of neighborhoods. 32A -6 VA Nos. 2013 -06, 2013 -07 and 2014 -02 June 23, 2014 Page 5 Public Notification The project site is located within the boundaries of the Santa Anita Neighborhood Association. The president of this Association was notified by mail 10 days prior to this public hearing, In addition, City staff contacted the president to ensure that they were notified of the project and to see if there were any areas of concern. No areas of concern were identified by the Neighborhood Association president, nor was there a request that the applicant present the project to a meeting of their members. The Neighborhood Association expressed support for the development of this lot. The project site was posted with a notice advertising this public hearing, a notice was published in the Orange County Reporter and notices were sent to all property owners and occupants within 500 feet of the project site. At the time of this printing, staff has received no inquiries on this project from members of the public. CEQA Compliance 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 15303. A Class 3 exemption allows for the construction of new, in -fill single- family residence in a zone which permits residential land uses. Categorical Exemption Environmental Review No. 2013 -51 will be filed for this project. Conclusion Based on the analysis provided within this report, staff recommends approval of Variance Nos, 2013 -06, 2013 -07 and 2014 -02 as conditioned. Hally Sobq ske Associate Planner HS.jm Hs:317NJackson/317NJackson_W 39 06va13- 07va1M02.pc Attachments: Exhibit 1 — Vicinity Map Exhibit 2 — Land Use Map Exhibit 3 — Site Photo Exhibit 4 — Site Plan Exhibit 5 — Floor Plan Exhibit 6 — Elevations 32A -7 Sergio z, AICP Principal Planner WESTMINSTER (9EVENtEEM41 sT.V AVE. r -m it cl cl%Eila n.r.iP ran C2 SP -2 p SP -2 j i SP 9) -2 (° CRY F 1 51 -.. RI I RI �Rl a RI RT�Ii_`.. l c aii R2.`' Mt cf -�. Ai RI Gardan G/nve R1 fC w SZ R2 R2 A2 S2 I RX R2 R2 � NI T R2 n. s / r +`� iv [nonvJesr r o / -. 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QDMME AUMLMIM DISRJCF M6 MWTAWOMERAlIONS PA D, 12UREANARARIMEAl15 C2 GEIERALCCMMECIAL C CFEN'TACE FE NEFIDENRIALESWTE 0 CEITRALBUSNES P PRCFEMCNAL EC ERMRCDEVEOFMENt C }A CENTRAL AMNETARDSTNLIACE FCp gANN�CCMMUNIIYDEW -OFMFM 3' �PICPLiN CA RANNMFWRRNG®JT9i Rzf) FWJNEOFE9DENIALDEa(Y,E4EJT C5 ARIGRALCJMMERCIAL VAR 2013 -06 & 07,2014-02 'r GUTIERREZ NEW SINGLE - FAMILY RESIDENCE ,�� 317 NORTH JACKSON STREET �� -- = 5150 FEET 7,77F= P L A N N I N G A N D B Il 1 L 0 I N G A G E N C Y EXHIBIT 1 VICINITY MAP 32A -8 COMMERCIAL C M E CIAL C O M E R C I L 5TH STREET COMMERCIAL. COMMERCI L C M R C I A L C M RCIAL W SIN LE- �- F- W Wrz w V W J J W Q RE51 ENCE W � �S- � a DUP. ww- F V) DUP. M.F.R. M. F, R, S.F.R. D U P. S.F.R. . DUP. DUP. M.F.R. w DUP. u DUP. 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'gg. �ajgss:5 5 d Y€ s $ a$��S@ £ at a § i 3 zf Iw If �.I '. ii 8� g I ff s CL EXHIBIT 4 32A -11 e ?�.Zb v bNV 'tiMV v, 0 V ti ^il ...... 1ww3 1 y4. s ' 2i ^ —-"R3 qy /S� J`J J �a a�C7 ApE �l §RpE a 3 t EZO-£ M # d ❑ If IMP p ig3 vq'y all ;4X '$3,f tl� 9� � � l mjj i 1 Q2 �\ g � � e� �9 Z 49Ftl n #56 �ba yS 83 F jai 3 J &5 tas5�gs qa asa eg£ s ` �GG$6 gi § E9S fY m 895 45 355 it OA1 p dg3 '§§ Xy s`'yx39 3 m' 88 a43 $� S"�apyx 5 t$ 3i 3q W ;4 =t _ 3x6 j yyf �1$ 5.6 € HIMS �1 '� k �N! lLl d§ g 5 0 a2 § fd6 y p ¢$g5q# � ��F �® g� NAH s .: 1,11h 11.1 118 ? n a 5 � IMI � 1sj �� p g ° 9 Pj w5a a nse q��xe� i v E"' LLLLLLL ii 9t hw °moo°€ a s3K �e "ssI W5 €e90 On 3 w U 3 q z -110110 zo ogg °4 x 9 i$ €3 3: �yy10111 1 5 d p 0 .i' u age &� $�IZy _ a3333333 a� gg V d &x "adxaaxxx5$ z & 8 a sill Y Q0N uj ZCV� Z W }sn x n v - T � � � WO dUi w rya f G R W x� ifnp ay87% §a pa LU aNi'M 59£ €3e — 'I If If ' p j 6 53 a3 a5E i�7r? 'gg. �ajgss:5 5 d Y€ s $ a$��S@ £ at a § i 3 zf Iw If �.I '. ii 8� g I ff s CL EXHIBIT 4 32A -11 au _5 m rc ,_II ui ci�l .a Q W W Z ze� 'n CL 0 � f4 O U— k 4: J� a a3 g e Yj � d�� I x� xYer al$S R I ` 1. $r 3s � � j32 Iiis ; ; g Ala x 3 �.Sk0iaC494£ y15C [ F x p� 5 k z � a a € :I 'o $el� P4s���el 6 11 i t3� a 6E1'+a E FYI if! BZY� kai5 d a fti y n x§ W z. w —kph W Ih I i f$ej is 3p fie§ 4 T-y x 111gg 8€ �43i €£;a ipe d `I£s 9 s Ng 'a 3 6'4 Y iMeYYx f Yifid � L4 I LL Z: L a O F7 7 '3 � I I N w EXHIBIT 5 32A -12 i 6� gi ygz his £" P 1 eicn {1{i � ap.q SIN @6 *n � L4 I LL Z: L a O F7 7 '3 � I I N w EXHIBIT 5 32A -12 eaO -S WZ # da Mh f �Hg I 3 s s rc " 0, Lu H9 �$a3A vfi s_ 5+ tit W ' W Li w '4 ° o- j aY � s w e \. I �QI W g L C AE 3 d 65 W \JI q�' ss1y Y Rn? e x#ror.a� O a r4 z vs r yP4Ep dSry F Aft S E93934 pJ i £i,5, 6 a: i� ; z In3> vi EXHIBIT 6 Page T of 2 32A -13 N cvtl_k. 'V/ INV V-. 1p 'r41 rlE 01 n p3 [X.'r tl4. + € c Il�s'I_sY' i I �7J 1 v1J b /J I I U fl 15.0 Id cd rla, _ /1 c i r )3' ✓ � 4 Page 2 of 2 32A -14 TI t x � I z!. o F_ T-IT Eal F J fr d I$ 3i W c �x mg$ i All 11, III r 5g a / it ;h i �" a} £ ul ul W y'1�, s LLI i (D ". ki k x I? yF f Ye553 �C W y h 4 ja k'EiY A & H!6 yH #385$ 0 & H gyyS� 6`i�ei Page 2 of 2 32A -14 t x � I z!. o T-IT Eal F J fr W W W i 81� ry� fl q r 5g a / it Page 2 of 2 32A -14 t x z!. o J fr � W / a} £ ul ul y'1�, s HH 5e N E.� B"x " gyyS� 6`i�ei - z I I } � W LLI g g3 'L3 ROH — 06/23/14 RESOLUTION NO. 2014 -13 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING VARIANCE NOS. 2013 -06, 2013 -07, AND 2014 -02 AS CONDITIONED TO ALLOW REDUCTIONS IN THE MINIMUM LOT SIZE, STREET FRONTAGE, AND OFF - STREET PARKING REQUIREMENTS FOR THE PROPERTY LOCATED AT 317 NORTH JACKSON STREET 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. Applicant is requesting approval of: Variance No. 2013 -06 to allow a reduction in the minimum lot size; Variance No. 2013 -07 to allow a reduction in required street frontage; and, Variance No. 2014 -02 to allow a reduction in the minimum off - street parking as conditioned for a new single - family residence on a 3,750 square foot lot at 317 North Jackson Street. B. Variance Nos. 2013 -06, 2013 -07, and 2014 -02 came before the Planning Commission of the City of Santa Ana for a duly noticed public hearing on June 23, 2014, to consider all testimony, written and oral. C. Variance No. 2013 -06 has been filed with the City of Santa Ana seeking to allow a reduction in the minimum lot size for a single - family residence. 1. Section 41- 247.6(a) of the Santa Ana Municipal Code requires a lot containing one (1) dwelling unit in the R2 district to have an area of at least 6,000 square feet. 2. The lot was legally subdivided in 1925 which was prior to the establishment of minimum standards for a lot, and the size and width configuration is therefore legal nonconforming and is consistent with other lots in the neighborhood. 3. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to grant a variance upon making certain findings: i. That because of special circumstances applicable to the subject property, including size, shape, topography, location or surroundings, the strict application of the zoning ordinance Resolution No. 2014 -13 Page 1 of 10 32A -15 is found to deprive the subject property of privileges not otherwise at variance with the intent and purpose of provisions of this Chapter. The project site has special circumstances related to its size, shape and surroundings. The lot was created in 1925 prior to the establishment of development standards for lots in the City. The lot was legally subdivided, and is therefore legally nonconforming, and is consistent with other lots in the neighborhood. The lots on either side of the subject site are developed at this time so there is no potential for this lot to become larger. ii. That the granting of a variance is necessary for the preservation and enjoyment of one or more substantial property rights. The granting of this variance is necessary for the preservation and enjoyment of substantial property rights. Without the approval of the requested variances the developable area would be so restricted as to become infeasible for development and would remain vacant. The proposed project maximizes the developable area while minimizing any impacts to any adjacent single - family residences. The lot was legally subdivided in 1925 to a size and width configuration that is legal nonconforming and is consistent with other lots in the neighborhood. iii. That the granting of a variance will not be materially detrimental to the public welfare or injurious to surrounding property. The granting of this variance will not be detrimental to the public or surrounding properties. The project has been designed to meet the applicable development standards for the front yard setback to minimize the visual impact on the street. Given these property restrictions, the proposed residence is consistent in size with other homes in the neighborhood. iv. That the granting of a variance will not adversely affect the General Plan of the City. The granting of this variance will not adversely affect the General Plan. The project has been designed to Resolution No. 2014 -13 Page 2 of 10 32A -16 be architecturally integrated with other single - family homes in the area and is consistent with the Land Use Element's Policies 2.10 and 3.5 that supports new development which is harmonious in scale and character with existing development in the area. The development of a single - family residence on this previously vacant parcel also supports Policy 1.3 of the Housing Element, which promotes a complementary mix of land uses that improves the character and stability of neighborhoods. D. Variance No. 2013 -07 has been filed with the City of Santa Ana seeking to reduce the required street frontage in the R1 district. Section 41 -237 of the Santa Ana Municipal Code requires fifty (50) feet of street frontage measured from the back of the front yard setback in the R1 district. 1. Santa Ana Municipal Code Section 41- 247.7(a) requires at least fifty (50) feet of street frontage for lots containing one (1) dwelling unit in the R2 district. 2. The lot was legally subdivided in 1925 which was prior to the establishment of minimum standards for a lot, and the size and width configuration is therefore legal nonconforming and is consistent with other lots in the neighborhood. 3. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to grant a variance upon making certain findings: That because of special circumstances applicable to the subject property, including size, shape, topography, location or surroundings, the strict application of the zoning ordinance is found to deprive the subject property of privileges not otherwise at variance with the intent and purpose of the provisions of this chapter. The project site has special circumstances related to its size, shape and surroundings. The lot was created in 1925 prior to the establishment of development standards for lots in the City. The lot was legally subdivided, and is therefore legally nonconforming, and is consistent with other lots in the neighborhood. The lots on either side of the subject site are developed at this time so there is no potential for this lot to become larger. Resolution No. 2014 -13 Page 3 of 10 32A -17 That the granting of a variance is necessary for the preservation and enjoyment of one or more substantial property rights. The granting of this variance is necessary for the preservation and enjoyment of substantial property rights. Without the approval of the requested variances the developable area would be so restricted as to become infeasible for development and would remain vacant. The proposed project maximizes the developable area while minimizing any impacts to any adjacent single - family residences. The lot was legally subdivided in 1925 to a size and width configuration that is legal nonconforming and is consistent with other lots in the neighborhood. iii. That the granting of a variance will not be materially detrimental to the public welfare or injurious to surrounding property. The granting of this variance will not be detrimental to the public or surrounding properties. The project has been designed to meet the applicable development standards for the front yard setback to minimize the visual impact on the street. Given these property restrictions, the proposed residence is consistent in size with other homes in the neighborhood. iv. That the granting of a variance will not adversely affect the General Plan of the City. The granting of this variance will not adversely affect the General Plan. The project has been designed to be architecturally integrated with other single - family homes in the area and is consistent with the Land Use Element's Policies 2.10 and 3.5 that supports new development which is harmonious in scale and character with existing development in the area. The development of a single - family residence on this previously vacant parcel also supports Policy 1.3 of the Housing Element, which promotes a complementary mix of land uses that improves the character and stability of neighborhoods. E. Variance No. 2014 -02 has been filed with the City of Santa Ana seeking to allow a reduction in required off - street parking. Resolution No. 2014 -13 Page 4 of 10 32A -18 1. Section 41- 1320(a)(1) of the Santa Ana Municipal Code requires four (4) parking stalls for a single - family residence, with two (2) stalls within a garage and two (2) stalls in the driveway. 2. The applicant is proposing to provide a two -car garage with access from an existing alley. 3. Santa Ana Municipal Code Section 41 -638 authorizes the Planning Commission to grant a variance upon making certain findings: i. That because of special circumstances applicable to the subject property, including size, shape, topography, location or surroundings, the strict application of the zoning ordinance is found to deprive the subject property of privileges not otherwise at variance with the intent and purpose of the provisions of this chapter. The project site has special circumstances related to its size, shape and surroundings. The smaller lot size significantly limits the project's ability to meet all development requirements and provide adequate parking and open space area. An analysis of development options concluded that a project meeting all the development standards in the R2 zone would restrict development on the parcel to a residence that is not viable. ii. That the granting of a variance is necessary for the preservation and enjoyment of one or more substantial property rights. The granting of this variance is necessary for the preservation and enjoyment of substantial property rights. Without the approval of the requested variance the developable area of the site would be so restricted as to become infeasible for development and the site would remain vacant. The proposed project allows development on a substandard parcel while minimizing any impacts to any adjacent single - family residences. The size of the rear yard would be reduced if the driveway complied with code. Since private open space is related to overall livability, a reduction in parking is a legitimate concession rather than losing additional open space. The lot was legally subdivided in 1925 and is legal nonconforming as to lot size as are many of the lots in this neighborhood. Resolution No. 2014 -13 Page 5 of 10 32A -19 iii. That the granting of a variance will not be materially detrimental to the public welfare or injurious to surrounding property. The granting of this variance will not be detrimental to the public or surrounding properties. The project has been designed to meet the applicable development standards for setbacks to minimize the visual impact on the street. Additionally, the garage is positioned nearest the eastern property line to maintain the required 20 -foot front yard setback and maximize open space between the detached garage and house. Several residences on Jackson Street were constructed in a similar configuration without a major impact to the neighborhood. iv. That the granting of a variance will not adversely affect the General Plan of the City. The granting of this variance will not adversely affect the General Plan. The project has been designed to be architecturally integrated with other single - family homes in the area and is consistent with Policies 2.10 and 3.5 of the Land Use Element that supports new development which is harmonious in scale and character with existing development in the area. The development of a single - family residence on this previously vacant parcel also supports Policy 1.3 of the Housing Element that promotes a complementary mix of land uses that improves the character and stability of neighborhoods. F. 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 15303. A Class 3 exemption allows for the construction of new, in -fill single - family residence in a zone which permits residential land uses. Categorical Exemption Environmental Review No. 2013 -51 will be filed for this project. Section 2. The Planning Commission, after conducting the public hearing, hereby approves: Variance No. 2013 -06, as conditioned in Exhibit "A" attached hereto and incorporated herein, to allow a reduction in the minimum lot size; Variance No. 2013- 07, as conditioned in Exhibit "B" attached hereto and incorporated herein, to allow a reduction in required street frontage; and, Variance No. 2014 -02, as conditioned in Exhibit "C" attached hereto and incorporated herein, to allow a reduction in the minimum off- street parking, for a new single - family residence at 317 North Jackson Street. This decision is based upon the evidence submitted at the above said hearing, which Resolution No. 2014 -13 Page 6 of 10 32A -20 includes, but is not limited to: the Request for Planning Commission Action dated June 23, 2014, and exhibits attached thereto; and the public testimony, all of which are incorporated herein by this reference. ADOPTED this 23rd day of June, 2014. AYES: Commissioners: Alderete, Bacerra, Bauer, Gartner, Mill, Nalle, Yrarrazaval (7) NOES: Commissioners: None (0) ABSENT: Commissioners: None (0) ABSTENTIONS: Commissioners: None (0) Eric Alderete Chairman APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Ryan O. Hodge Assistant City Attorney CERTIFICATE OF ATTESTATION AND ORIGINALITY I, ROSA BARELA, Acting Commission Secretary of the Planning Commission, do hereby attest to and certify the attached Resolution No. 2014 -13 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on June 23, 2014. Date: Acting Commission Secretary of the Planning Commission City of Santa Ana 32A -21 Resolution No. 2014 -13 Page 7 of 10 Conditions for Approval for Variance No. 2013 -06 Variance No. 2013 -06 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below Prior to exercising the rights conferred by this variance. The applicant must remain in compliance with all conditions listed below throughout the life of the variance. Failure to comply with each and every condition may result in the revocation of the variance. A. Planning Division 1. The project shall remain in compliance with Site Plan Review DP No. 2013- 23. 2. Any amendment to this variance must be submitted to the Planning Division for review. At that time, staff will determine if administrative relief is available or the variance must be amended. 3. Submit a landscape plan for review prior to entering building plan check. Such plan shall be approved prior to issuance of any building permit. 4. A minimum of one 24" box canopy tree shall be planted in the rear yard. 5. All planting areas must be designed with an automatic irrigation system. A pop -up sprinkler type irrigation system shall be provided for all yards for each residential unit. Drip, bubbler, or other low gallonage systems may be used in buffer areas and narrow strips. 6. The use of "xeriphytic" or dry climate type plant materials is encouraged. Irrigation systems may require special fittings to properly water dry climate plantings. 7. All irrigation systems shall be equipped with a controller capable of dual or multiple station programming. 8. Paving in the rear yard shall be a permanent, decorative material. A sample shall be submitted to the case planner prior to building permit issuance. Exhibit A Resolution No. 2014 -13 Page 8 of 10 32A -22 Conditions for Approval for Variance No. 2013 -07 Variance No. 2013 -07 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below prior to exercising the rights conferred by this variance. The applicant must remain in compliance with all conditions listed below throughout the life of the variance. Failure to comply with each and every condition may result in the revocation of the variance. A. Planning Division 1. The project shall remain in compliance with Site Plan Review DP No. 2013- 23. 2. Any amendment to this variance must be submitted to the Planning Division for review. At that time, staff will determine if administrative relief is available or the variance must be amended. 3. Submit a landscape plan for review prior to entering building plan check. Such plan shall be approved prior to issuance of any building permit. 4. A minimum of one 24" box canopy tree shall be planted in the rear yard. 5. All planting areas must be designed with an automatic irrigation system. A pop -up sprinkler type irrigation system shall be provided for all yards for each residential unit. Drip, bubbler, or other low gallonage systems may be used in buffer areas and narrow strips. 6. The use of "xeriphytic" or dry climate type plant materials is encouraged. Irrigation systems may require special fittings to properly water dry climate plantings. 7. All irrigation systems shall be equipped with a controller capable of dual or multiple station programming. 8. Paving in the rear yard shall be a permanent, decorative material. A sample shall be submitted to the case planner prior to building permit issuance. Exhibit B Resolution No. 2014 -13 Page 9 of 10 32A -23 Conditions for Approval for Variance No. 2014 -02 Variance No. 2014 -02 is approved subject to compliance, to the reasonable satisfaction of the Planning Manager, with all applicable sections of the Santa Ana Municipal Code, the California Administrative Code, the California Building Standards Code and all other applicable regulations. The applicant must comply in full with each and every condition listed below rip or to exercising the rights conferred by this variance. The applicant must remain in compliance with all conditions listed below throughout the life of the variance. Failure to comply with each and every condition may result in the revocation of the variance. A. Planning Division 1. The project shall remain in compliance with Site Plan Review DP No. 2013- 23. 2. Any amendment to this variance must be submitted to the Planning Division for review. At that time, staff will determine if administrative relief is available or the variance must be amended. 3. Submit a landscape plan for review prior to entering building plan check. Such plan shall be approved prior to issuance of any building permit. 4. A minimum of one 24" box canopy tree shall be planted in the rear yard. 5. All planting areas must be designed with an automatic irrigation system. A pop -up sprinkler type irrigation system shall be provided for all yards for each residential unit. Drip, bubbler, or other low gallonage systems may be used in buffer areas and narrow strips. 6. The use of "xeriphytic" or dry climate type plant materials is encouraged. Irrigation systems may require special fittings to properly water dry climate plantings. 7. All irrigation systems shall be equipped with a controller capable of dual or multiple station programming. 8. Paving in the rear yard shall be a permanent, decorative material. A sample shall be submitted to the case planner prior to building permit issuance. Exhibit C Resolution No. 2014 -13 Page 10 of 10 32A -24 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: SUBMISSION TO THE VOTERS AT THE NOVEMBER 4, 2014 MUNICIPAL ELECTION: PROPOSED CHARTER AMENDMENTS REGARDING DEPARTMENT HEADS AND CIVIL SERVICE; CREATION OF ETHICS COMMISSION, CITY COUNCIL COMPENSATION; AND LEGAL DEFENSE FUND AND CAMPAIGN CONTRIBUTION LIMITATIONS !/ 2 - (�� CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution giving notice of the City's general municipal election to be held in the City of Santa Ana on November 4, 2014 for the submission of questions to the voters relating to changes in the City Charter regarding Department Heads and Civil Service (Charter Section 1002. Civil service and excepted service.), City Council Compensation (Charter Section 402. Compensation of members.) and Campaign Contribution Limitations (Charter Section 425. Disqualification due to campaign contributions and Section 1206. Campaign contribution limitation.); and requesting Board of Supervisors to consolidate election with the Statewide General Election. 2. Adopt a resolution on ballot questions. 3. Adopt a resolution authorizing submittal of written arguments for or against the various proposed City Charter and Municipal Code Amendments. 4. Approve guidelines for preparation of arguments for or against the proposed City Charter and Municipal Code Amendments, fix the date for the submission of Direct Arguments and Rebuttal Arguments, and post the notice for the argument process in accordance with the provisions of the California State Elections Code. 5. Authorize the City Attorney to prepare an Impartial Analysis for each of the proposed City Charter Amendments to be submitted for consideration by the voters. 6. Direct staff to process all other documents required to proceed with the proposed City Charter Amendments. 65A -1 Proposed Charter Amendments July 15, 2014 Page 2 of 2 DISCUSSION On May 20, 2014, the City Council directed staff to prepare necessary documents to place the proposed City Charter and Municipal Code Amendments on the ballot for the November 4, 2014 Election, as recommended by an ad hoc committee. The committee discussed the draft language proposals and approved the proposed questions presented herein. The California Elections Code requires the adoption of the attached resolutions in order to place ballot measure questions before the voters on the November 4, 2014 ballot. The attached resolutions will allow voters to consider ballot questions as included in the resolution. The attached resolutions also permit the filing of written arguments in favor of or against such measure by members of the City Council, any individual voter eligible to vote on the measure, a bona fide association of such citizens or any combination thereof, and establishes deadlines for submission of such arguments to the Clerk of the Council. The Elections Code specifies that members of the Council would be given preference and priority, if authorized by the City Council. The subject resolution would give that authorization to any member of the Council desiring to submit an argument. The procedures for filing ballot arguments are detailed in the Elections Code. The Election Code procedures, as well as general guidelines for preparing arguments will be provided in a notice prepared by the Clerk of the Council and posted following final adoption of the election ordinance. Whenever a City measure qualifies to be on a ballot, the City Council may direct the City Attorney to prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure (Elections Code §9280). The analysis is printed in the Voter Information Pamphlet preceding the arguments for and against the measure. 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 The cost to consolidate the General Municipal Election is estimated to be $225,000. Funds for these administrative costs are available in the General Non - Departmental, Contractual Services account no. 01105015 62300, FY 2013 -2014 and 2014 -2015. APPROVED AS TO FUNDS AND ACCOUNTS -i twsmr i ®r .A �) Francisco Gutierrez, Executive Director Finance & Management Services Agency Attachments 1 -4 (labeled) 65A -2 EXHIBIT 1 RESOLUTION REQUESTING CONSOLIDATION WITH THE COUNTY 65A -3 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 4, 2014 FOR THE SUBMISSION TO THE VOTERS OF QUESTIONS RELATING TO THE AMENDMENT OF THE CITY CHARTER AND AMENDMENTS TO THE SANTA ANA MUNICIPAL CODE IN REGARD TO DEPARTMENT HEADS AND CIVIL SERVICE, CREATION OF AN ETHICS COMMISSION, CITY COUNCIL COMPENSATION AND BENEFITS AND CAMPAIGN CONTRIBUTION REGULATIONS AND REQUESTING THE BOARD OF SUPERVISORS OF ORANGE COUNTY TO CONSOLIDATE THE GENERAL MUNICIPAL ELECTION WITH THE STATE'S GENERAL ELECTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general election of the City of Santa Ana will be held on November 4, 2014, for the purpose of voting on the following proposed amendments to the City Charter and related Santa Ana Municipal Code provisions and these measures shall be submitted to the voters: Measure _: Shall the Santa Ana Charter be amended to create a Citizens Ethics Commission; reduce contributions for legal defense funds; limit campaign contributions, repeal disqualification and prohibition provisions consistent with the California Political Reform Act and Fair Political Practices Commission; and effective January 1, 2015, establish and restrict the salary of Councilmembers and Mayor in accordance with California Government Code sections 36516 and 36516.1 and AB1234 ethics law to provide benefits and expense reimbursements? Measure _: Shall the Santa Ana Charter be amended to provide that all executive management positions are at -will and not covered by civil service and further provide that individuals promoted from a civil Resolution No. 2014 -XXX 65A-4 Page 1 of 8 service position to at -will position do not have the right to revert back to their former civil service position? B. There will be a statewide general election held on November 4, 2014. C. It is desirable that said general election of the City of Santa Ana be consolidated with the statewide general election to be held on the same date and; that within the City of Santa Ana, the precincts, polling places and election officers be the same, and that the Board of Supervisors of the County of Orange canvass the returns of both elections, in all respects as if there were only one election. Section 2. That pursuant to the requirements of Section 10403 of the Elections Code of the State of California, the Board of Supervisors of the County of Orange is hereby requested to consent to and order the consolidation of the November 4, 2014 general election of the City of Santa Ana for the purpose of voting on a ballot measure relating to proposed charter amendments with the statewide general election to be held on the same date. The election will be held and conducted in accordance with the provisions of law regulating the statewide election. Section 3. The Board of Supervisors of the County of Orange is hereby authorized to canvass the returns of said general municipal election pursuant to Section 10411 of the Elections Code of the State of California. Section 4. The City of Santa Ana recognizes that additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County of Orange for any such costs. Section 5. The Clerk of the Council is hereby directed to file a certified copy of this resolution with the Board of Supervisors of the County of Orange and a certified copy of this resolution with the Registrar of Voters of the County of Orange. Section 6. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of , 2014. Miguel A. Pulido Mayor Resolution No. 2014 -XXX 65A -5 Page 2 of 8 APPROVED AS TO FORM: m Sonia R. Carvalho, City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Maria D. Huizar, Clerk of the Council Resolution No. 2014 -XXX 65A-6 Page 3 of 8 EXHIBIT A TO CITY COUNCIL RESOLUTION RE VARIOUS CITY CHARTER AND MUNCIPAL CODE AMENDMENTS TEXT OF CHARTER AMENDMENT RELATED TO AT -WILL EMPLOYMENT The City Charter for the City of Santa Ana is hereby amended as follows: DEPARTMENT HEADS AND CIVIL SERVICE Sec. 1002. Civil service and excepted service. The civil service system of the City shall cover all employees of the City not excepted by this section. (a) The excepted service shall comprise the following offices and positions: (1) The individual offices held by all elective officers; (2) The City Manager and his assistants, if any; (3) The City Attorney and his legal assistants, if any; (4) The Clerk of the Council; (5) The director of finance; (6) The director of personnel, if any; (7) The head of each department of the City, net a ;e, : fisa Onenified hefein aPA and the chief administrative officeref- A^. and of the housing authority of the City of Santa Ana- ; (8) One private secretary to the City Manager; (9) All members of boards and commissions; (10) Positions occupied by persons employed to render professional, scientific, technical, or expert service of an occasional and exceptional nature; (11) Positions in any class or grade created for a special or temporary purpose, and which are to exist for a period of not longer than ninety (90) days; (12) Positions of any class or grade exempted from the civil service for a maximum of six (6) months in any calendar year provided that the personnel board upon application of the City Manager and after public notice and hearings recommends to the City Council such exemption and the City Council grants such exemption by motion adopted by two- thirds ( 2/3) of its members. Any such exemption shall Resolution No. 2014 -XXX 65A -7 Page 4 of 8 not affect the tenure of any person whose appointment has become final under civil service; (13) Part-time positions or employments requiring less than twenty (20) regular hours of employment per week; (14) School crossing guards; (15) All positions occupied by persons employed to replace employees ordered to active duty, enlisted, or drafted for military service during a national emergency or when this country has declared war and until the expiration of the time when such replaced employee could demand his former position of employment under federal or state statutes. (b) The civil service shall comprise all positions not specifically included by this section in the excepted service. 2. TEXT OF CHARTER AMENDMENTS AND MUNICIPAL CODE REVISIONS RELATED TO CREATION OF ETHICS COMMISSION, COUNCIL COMPENSATION AND BENEFITS AND CAMPAIGN LIMITATIONS The City Charter for the City of Santa Ana is hereby amended as follows: CITIZENS ETHICS COMMISSION Sec. 401.07. Ethics Commission. The City of Santa Ana shall adopt an Ethics Commission to monitor, review and enforce the City of Santa Ana Code of Ethics and Conduct. This Ethics Commission shall be an independent body separate from the City with its own staff and legal counsel. Said Ethics Commission, along with its specific powers, duties and responsibilities, shall be established by ordinance of the City Council within six months of the effective date of this Charter section. 65A -8 Resolution No. 2014 -XXX Page 5 of 8 CAMPAIGN CONTRIBUTION REGULATIONS Sec. 1206.05. Legal Defense Fund contribution limitation. No person shall make, and no candidate for mayor or City Council or campaign treasurer shall solicit or accept, any contribution or loan which would cause the total amount contributed or loaned by that person to that candidate's legal defense fund to exceed one thousand dollars ($1,000.00) in any election cycle; provided, however, that the City Council may, by ordinance, adjust such limit to reflect changes in the consumer price index; and provided further that nothing herein shall apply to a candidate's contribution of his or her personal funds to his or her own legal defense account. As used herein, "election cycle" means the period of time between the date of an election to the office of mayor or councilmember and the date of the next election to the same office. The candidate's legal defense account must be maintained in accordance with California Code of Regulations section 18530.45, including all requirements regarding establishment of the committee, recordkeeping, and reporting provided in subdivisions (c), (e), and (f) respectively. Santa Ana Municipal Code Section 2 -107 is hereby repealed and deleted: Resolution No. 2014 -XXX 65A -9 Page 6 of 8 1111111EASNIQUAII 11111:11,11=111, 11� "III ... Sec. 1206.05. Legal Defense Fund contribution limitation. No person shall make, and no candidate for mayor or City Council or campaign treasurer shall solicit or accept, any contribution or loan which would cause the total amount contributed or loaned by that person to that candidate's legal defense fund to exceed one thousand dollars ($1,000.00) in any election cycle; provided, however, that the City Council may, by ordinance, adjust such limit to reflect changes in the consumer price index; and provided further that nothing herein shall apply to a candidate's contribution of his or her personal funds to his or her own legal defense account. As used herein, "election cycle" means the period of time between the date of an election to the office of mayor or councilmember and the date of the next election to the same office. The candidate's legal defense account must be maintained in accordance with California Code of Regulations section 18530.45, including all requirements regarding establishment of the committee, recordkeeping, and reporting provided in subdivisions (c), (e), and (f) respectively. Santa Ana Municipal Code Section 2 -107 is hereby repealed and deleted: Resolution No. 2014 -XXX 65A -9 Page 6 of 8 CITY COUNCIL COMPENSATION AND BENEFITS Sec. 402. Compensation and Benefits of members. Canh m ether of the City Ge n'1 shall r sa+'en fer his or her senrines as „nh n on+hl.y salary in the sum of ene hundred and twenty fiv dollars ($125.00). Thomember elen+ed +e fill the offlne of ma.yer shall r e the nddifionnl a n+ of seven ty five dollars ($75.00) fer eanh men+h said member eaGh member of the City Council shall shall foil the office of mayor. ronoivo r mbi i rsomon+ far re Further, and n +her ovnenses while n nffini of bus'Ress of the City as authorized and approved by the City Gaun Each City Council Member and the Mayor shall receive compensation for his or her services and shall receive health and welfare benefits, along with reimbursement or an allowance for their necessary and actual expenses. The City Council and Mayor compensation shall be calculated in accordance with the amount set forth in the schedule of California Government Code section 36516 and increased for the Mayor per section 36516.1. Compensation, health and welfare benefits and fixed allowances shall be fixed by ordinance for the Mayor and Council Members. Amendments to each must be adopted by not fewer than five affirmative votes of the City Council, after a noticed, public hearing, notice of which has been given by publication at least fourteen days prior to such hearing. Increases in Council Member or Mayor compensation must also conform to the restrictions and requirements of the Government Code provisions cited above. Once a level of compensation, benefits or allowances for City Council members and the Mayor is established, such level will not be permitted to change automatically by linking such compensation to internal or external factors. Absence of a member of the City Council from all regular and special meetings of the City Council during any calendar month shall render him or her ineligible to receive the monthly salary for such a calendar month unless by permission of the City Council expressed in its official minutes. 65A -1 Resolution No. 2014 -XXX Page 7 of 8 io CITY COUNCIL COMPENSATION AND BENEFITS Sec. 402. Compensation and Benefits of members. Canh m ether of the City Ge n'1 shall r sa+'en fer his or her senrines as „nh n on+hl.y salary in the sum of ene hundred and twenty fiv dollars ($125.00). Thomember elen+ed +e fill the offlne of ma.yer shall r e the nddifionnl a n+ of seven ty five dollars ($75.00) fer eanh men+h said member eaGh member of the City Council shall shall foil the office of mayor. ronoivo r mbi i rsomon+ far re Further, and n +her ovnenses while n nffini of bus'Ress of the City as authorized and approved by the City Gaun Each City Council Member and the Mayor shall receive compensation for his or her services and shall receive health and welfare benefits, along with reimbursement or an allowance for their necessary and actual expenses. The City Council and Mayor compensation shall be calculated in accordance with the amount set forth in the schedule of California Government Code section 36516 and increased for the Mayor per section 36516.1. Compensation, health and welfare benefits and fixed allowances shall be fixed by ordinance for the Mayor and Council Members. Amendments to each must be adopted by not fewer than five affirmative votes of the City Council, after a noticed, public hearing, notice of which has been given by publication at least fourteen days prior to such hearing. Increases in Council Member or Mayor compensation must also conform to the restrictions and requirements of the Government Code provisions cited above. Once a level of compensation, benefits or allowances for City Council members and the Mayor is established, such level will not be permitted to change automatically by linking such compensation to internal or external factors. Absence of a member of the City Council from all regular and special meetings of the City Council during any calendar month shall render him or her ineligible to receive the monthly salary for such a calendar month unless by permission of the City Council expressed in its official minutes. 65A -1 Resolution No. 2014 -XXX Page 7 of 8 Santa Ana Municipal Code Section 2.103 is hereby added to read as follows: Sec. 2 -103. Mayor and City Council Members Compensation and Benefits In accordance with City Charter Section 402 the compensation of the Mayor shall be $1,100 per month and the compensation of the City Council Members shall be $1,000. The Mayor and City Council Members shall also receive those health and welfare benefits and allowances for actual expenses as are provided to the City's Executive Management Team members effective as of June 3, 2014. No adjustments to the compensation, benefits or allowances provided for herein shall be made without first complying with the restrictions and requirements of City Charter Section 402. Resolution No. 2014 -XXX 65A -11 Page 8 of 8 65A -12 EXHIBIT 2 RESOLUTION WITH BALLOT QUESTIONS 65A -13 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA SETTING FORTH THE LANGUAGE OF BALLOT TITLES FOR CITY CHARTER AMENDMENTS REGARDING DEPARTMENT HEADS AND CIVIL SERVICE, CREATION OF AN ETHICS COMMISSION, CITY COUNCIL COMPENSATION AND CAMPAIGN CONTRIBUTION LIMITATIONS TO BE INCLUDED ON THE BALLOT FOR THE 2014 GENERAL MUNICIPAL ELECTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: SECTION 1. By Resolution No. 2014 -XXX, the City Council of the City of Santa Ana has called for a General Municipal Election to be held on November 4, 2014 and submitted to the voters amendments to sections of the Santa Ana City Charter and Santa Ana Municipal Code. SECTION 2. The California Elections Code directs that the City Council approve the form of the ballot questions to be submitted to the voters and the City Council of the City of Santa Ana desires, on its own motion, to submit to the voters of the City questions relating to Department Heads and Civil Service, creation of an Ethics Commission, Limits on Contributions to Legal Defense Funds, City Council Compensation and Campaign Contribution Limitations, to be submitted to the voters at the General Municipal Election to be held on Tuesday, November 4, 2014. SECTION 3. The Resolution shall be proposed as follows, with identification as determined in accordance with the California Elections Code: Measure Ethics Commission, Compensation and YES Campaign Limitations Charter Reform Shall the Santa Ana Charter be amended to create a Citizens Ethics Commission; reduce contributions for legal defense funds; limit campaign contributions, repeal NO disqualification and prohibition provisions consistent with the California Political Reform Act and Fair Political Practices Commission; and effective January 1, 2015, establish and restrict the salary of Councilmembers and Mayor in accordance with California Government Code sections 36516 and 36516.1 and AB1234 ethics law to provide benefits and expense reimbursements? 65A -14 Resolution No. 2014 -XXX Page 1 of 2 Measure : Charter Amendment Concerning At -Will YES Employment Shall the Santa Ana Charter be amended to provide that all executive management positions are at -will and not covered by civil service and further provide that individuals NO promoted from a civil service position to at -will position do not have the right to revert back to their former civil service position? Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of 2014. Miguel A. Pulido Mayor APPROVED AS TO FORM: By: Sonia R. Carvalho, City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers NOT PRESENT: Councilmembers: Resolution No. 2014 -XXX 65A -15 Page 2 of 2 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Maria D. Huizar, Clerk of the Council 65A -1 6 Resolution No. 2014 -XXX Page 3 of 2 EXHIBIT 3 RESOLUTION AUTHORIZING WRITTEN ARGUMENTS 65A -17 RESOLUTION NO. 2014 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR OR AGAINST THE PROPOSED CHARTER AMENDMENTS TO BE PLACED ON THE BALLOT OF THE GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 4, 2014 WHEREAS, California Elections Code Section 9282 authorizes the filing of written arguments for or against City measures, and Elections Code Section 9287 establishes priorities for filing written arguments in favor of and against City measures; and WHEREAS, on July 15, 2014, the City Council adopted Resolution No. 2014- _- authorizing the calling and placement on the ballot a proposed Charter Amendments to be submitted to the electors at the November 4, 2014 general municipal election; and WHEREAS, the City Council desires to authorize the filing of written arguments for and /or against the adoption of the following ballot question proposing amendments to the Santa Ana City Charter by the Mayor and /or other members of the City Council in accordance with Elections Code section 9282(b): Measure _: Ethics Commission, Compensation and Campaign Limitations Charter Reform Shall the Santa Ana Charter be amended to create a Citizens Ethics Commission; reduce contributions for legal YES defense funds; limit campaign contributions, repeal NO disqualification and prohibition provisions consistent with the California Political Reform Act and Fair Political Practices Commission; and effective January 1, 2015, establish and restrict the salary of Councilmembers and Mayor in accordance with California Government Code sections 36516 and 36516.1 and AB1234 ethics law to provide health and welfare benefits and expense reimbursements? Resolution No. 2014 -XXX Page 1 of 3 65A -18 Measure _• Charter Amendment Concerning At -Will YES Employment Shall the Santa Ana Charter be amended to provide that all executive management positions are at -will and not covered by civil service and further provide that individuals NO promoted from a civil service position to at -will position do not have the right to revert back to their former civil service position? NOW, THEREFORE, the City Council of the City of Santa Ana hereby finds, determines and declares as follows that: Section 1. The foregoing recitals are true and correct and are hereby incorporated by reference. Section 2. Authorization to Submit Arguments. Section 9282(b) of the Elections Code of the State of California provides that in a local election, the legislative body may authorize any member(s) of the City Council to write arguments for or against any measure placed on the ballot by the City Council. The City Council hereby authorizes the Mayor and /or City Council members to prepare and file written arguments in favor of or against the proposed ordinance described above Section 3. Authors. That, in accordance with Section 9283 of the Elections Code, the printed names and signatures of not more than five authors shall appear with any argument submitted in accordance with this resolution. Section 4. Argument not to exceed 300 words. That, in accordance with Section 9282(c) of the Elections Code, any written argument in favor of or against the proposed ordinance described above shall not exceed 300 words. Section 5. City Council Preference and Priority. The City Council hereby authorizes and directs the Clerk of the Council to give preference and priority to any written argument for or against the City ordinance set forth above that includes a member or members of the City Council (up to five members), and then to other arguments as set forth in California Elections Code section 9287. Section 6. Deadline for Arguments. In accordance with California Elections Code section 9286(b), the deadline for filing with the City Clerk (and changing or Resolution No. 2014 -XXX Page 2 of 3 65A -19 withdrawing) arguments for or against the proposed ordinance described above shall be set as prescribed by law. Section 7. Certification. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of , 2014. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: 65A -20 Maria D. Huizar, Clerk of the Council Resolution No. 2014 -XXX Page 3 of 3 EXHIBIT ARGUMENT GUIDELINES 65A -21 City of Santa Ana £'; NOTICE OF ELECTION 2014 General Municipal Election November 4, 2014 REGARDING PROPOSED CHARTER AMENDMENTS TO BE VOTED ON CITY OF SANTA ANA, CALIFORNIA NOTICE IS HEREBY GIVEN that the following proposed charter amendments will be voted on at the General Municipal Election to be held in the City of Santa Ana, California on Tuesday, the fourth (4t") day of November 2014: Measure _: Ethics Commission, Compensation and Campaign YES Limitations Charter Reform Shall the Santa Ana Charter be amended to create a Citizens Ethics Commission; reduce contributions for legal defense funds; limit campaign contributions, repeal disqualification and NO prohibition provisions consistent with the California Political Reform Act and Fair Political Practices Commission; and effective January 1, 2015, establish and restrict the salary of Councilmembers and Mayor in accordance with California Government Code sections 36516 and 36516.1 and AB1234 ethics law to provide benefits and expense reimbursements? Measure Charter Amendment Concerning At -Will YES Employment Shall the Santa Ana Charter be amended to provide that all executive management positions are at -will and not covered by civil service and further provide that individuals promoted from a NO civil service position to at -will position do not have the right to revert back to their former civil service position? 65A -22 TIME LIMIT TO SUBMIT BALLOT ARGUMENTS (California Elections Code §9280 -9287) PLEASE TAKE NOTICE that Arguments with respect to the following ballot measure will be received according to the following procedures: 1. The City Council or any member(s) of the Council authorized by the City Council, or bona fide association of citizens, or any individual voter who is eligible to vote on the Measure, or any combination of voters and associations, may file a written argument for or against the measure on the ballot. No argument shall exceed 300 words in length. 2. A ballot argument shall not be accepted unless accompanied by the name(s) of the person(s) submitting it, or, if submitted on behalf of an organization, the name of the organization and the name of at least one of its principal officers. 3. No more than five authors may sign any argument. If an argument is signed by more than five individuals, the names of only the first five persons signing, determined by the order in which their signatures appear, shall be printed on the argument appearing in the Voter Information Pamphlet. 4. The Clerk of the Council shall cause an argument for and an argument against the measure, if submitted, to be printed and shall transmit the arguments to the qualified electors in addition to any necessary ballot materials. Arguments for and against the measure shall be submitted to the Office of the Clerk of the Council, 20 Civic Center Plaza, Santa Ana, California 92701, not later than 14 days after City Council calls for the Election. 5. Arguments may be changed or withdrawn by their authors by specified date. 6. Printed arguments submitted to the voters shall be titled either "Argument In Favor of Measure_" or "Argument Against Measure_ ", accordingly. The blank space will be assigned a number or letter by the Orange County Registrar of Voters. Words used in the title shall not be counted when determining the length of the argument. 7. If more than one argument for or more than one argument against the ballot measure is submitted to the Clerk of the Council within the time prescribed above, the Clerk of the Council shall select one of the arguments for printing and distribution to voters. In such selection, preference and priority shall be given as follows: 1) member(s), of the legislative body authorized by that body, 2) bona fide associations of citizens, and, 3) individual voters who are eligible to vote on the measure. If more than one argument for a measure is received from individuals or groups with the same preference and priority, the first argument submitted to the Clerk of the Council will be selected if no other arguments from an individual or group with a higher priority are received. 8. At the time of filing an argument, a certificate is also required that states that the facts contained in the argument are true and correct. The certificate must be signed by each author of the argument. (A certificate form is available from the Clerk of the Council) 9. Copies of arguments for and against the measure shall be open for public examination at the Clerk of the Council Office, 20 Civic Center Plaza, Santa Ana, California, 92701 65A -23 during normal business hours (Monday through Thursday and alternate Fridays, 8:00 A.M. to 5:00 P.M.) during the Public Review Period. Any individual may obtain a copy of such materials for use outside of said office. A fee, not to exceed the actual costs incurred in providing such copies, will be charged at the time of provision of such copies. 10. Questions concerning this notice shall be directed to the Clerk of the Council, City of Santa Ana, telephone number (714)647 -6520. 11. Copies of the text of the Proposed Charter Amendment to be submitted to the voters of the City of Santa Ana may be obtained from the Clerk of the Council, telephone number (714) 647 -6520. 65A -24 WORD COUNT STANDARDS (Elections Code §9) §9.(a) Counting of words, for purposes of the Elections Code, shall be as follows: (1) Punctuation is not counted. (2) Each word shall be counted as one word except as specified in the Elections Code section. (3) All geographical names shall be considered as one word; for example, "City and County of San Francisco" shall be counted as one word. (4) Each abbreviation for a word, phrase, or expression shall be counted as one word. (5) Hyphenated words that appear in any generally available standard reference dictionary, published in the United States at any time within the 10 calendar years immediately preceding the election for which the words are counted, shall be considered as one word. Each part of all other hyphenated words shall be counted as a separate word. (6) Dates consisting of a combination of words and digits shall be counted as two words. Dates consisting only of a combination of digits shall be counted as one word. All Digits (8/08/07) one word Words and digits (August 8, 2007) two words (7) Any number consisting of a digit or digits shall be considered as one word. Any number which is spelled, such as 'one," shall be considered as a separate word or words. "One" shall be counted as one word whereas 'one hundred" shall be counted as two words. "100" shall be counted as one word. (8) Telephone numbers shall be counted as one word. (9) Internet web site addresses shall be counted as one word. If the text exceeds the word limit, the author must delete or change a sufficient number of words, or a sentence, to put the statement within the required word limit before the statement is filed. The author should correct any misspellings before the statement is filed. 65A -25 65A -26 REQUEST FOR COUNCIL /SANTA ANA FINANCING AUTHORITY ACTION CITY COUNCIL MEETING DATE: JULY 15, 2014 TITLE: RESOLUTIONS EXECUTING AGREEMENTS AND FINANCING DOCUMENTS RELATED TO REFINANCING THE 2004 WATER SYSTEM BONDS V CITY MANAG RECOMMENDED ACTION CITY COUNCIL ACTION •:• _-1 ❑ As Recommended ❑ As Amended ❑ Ordinance on I" Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution authorizing the execution of financing documents and related actions necessary for the refinancing of the 2004 Water System Bonds in an aggregate amount not to exceed $17 million. SANTA ANA FINANCING AUTHORITY ACTION Adopt a resolution authorizing the execution of financing documents and related actions necessary for the refinancing of the 2004 Water System Bonds in an aggregate amount not to exceed $17 million. DISCUSSION The City of Santa Ana Mayor and City Council unanimously adopted the City's 5 -year Strategic Plan which includes a goal to ensure financial stability. Under goal number four, two strategies are outlined: 2d) Conduct an assessment of the City's debt and refinancing options to achieve savings; and 3c) Implement a plan to achieve a General Fund reserve balance of 20 percent. In an effort to implement these strategies, on January 21, 2014, the City Council approved the use of four financial advisory firms to assist staff in reviewing existing debt, identify opportunities for potential savings, or to assist in financing future projects. On April 1, 2014, the team comprised of Urban Futures, Inc. (financial advisor), Stifel /De La Rosa & Co. (underwriters) and Best, Best & Krieger LLP (bond counsel), was selected to review the 2004 Water Revenue Bonds. The 2004 Water Revenue Bonds were issued to refinance the original 1994 Bonds which were used to finance capital projects relating to the City's water system. More specifically, the funds were used for the Garthe Reservoir Project, the South Reservoir Booster Station, as well as 80A -1 Reso to Refinancing of 2004 Water System Bonds July 15, 2014 Page 2 various water main replacement projects throughout the City. The 2004 Bonds are currently outstanding in the amount of $12,785,000 with interest rates ranging from 3.5 % to 5.0 %. The final term of the 2004 Bonds is September 1, 2024. With interest rates on US Treasury Bonds having decreased from 3.0% to 2.5% since the beginning of the year, the municipal bond market has followed suit and has correlated into increased attention in the municipal bond market by investors. In order to benefit from this opportunity, staff is recommending several actions. The item before the City Council relates specifically to refinancing the 2004 Water System Bonds and the financing of an additional $5.8 million for capital related improvements. By taking advantage of low interest rates currently available in the market, staff worked with Urban Futures Inc. (financial advisors) and Stifel /De La Rosa & Co. (underwriters) to develop a financing model whereby long term savings could still be achieved while obtaining additional capital financing for immediate water system needs. The recommended proposal balances those two objectives. As a result, the City will issue approximately $16 million of 2014 Water Revenue Refunding Bonds. Of the $16 million, approximately $12 million will be allocated to the refunding of the 2004 Bonds and approximately $5.8 million will be allocated to finance capital improvements related to the City's water system. The balance of funds will be gained through an estimated premium to be received as a result of the issuance as well as current payment reserves. The recommended action provides for a bond authorizing resolution of a not -to- exceed issuance amount of $17 million, which provides additional cushion in case of unforeseen market fluctuations as well as structuring flexibility to achieve the lowest interest rates possible. The City will save approximately $1.5 million over the life of the bonds which equates to 10% in present value savings of the refinanced bond amount. The recommended action does not increase the term of the current bonds. Like the 2004 Bonds, the 2014 Bonds will be secured by net system revenues of the City's water system less maintenance and operation costs. To date, City staff has been working with the project team and bond counsel to prepare and develop the Preliminary Official statement and all related documents for release. Upon approval, staff will direct the Stifel /De La Rosa & Co. to distribute the official statement and conduct the offering and sale of the 2014 Water System Bonds. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 City Financial Stability, Objective #2 (provide a reliable five -year financial forecast that ensures financial stability in accordance with the strategic plan), Strategy D (conduct an assessment of the City's debt and refinancing options to achieve savings). 80A -2 Reso to Refinancing of 2004 Water System Bonds July 15, 2014 Page 3 FISCAL IMPACT Total savings are estimated at approximately $1.5 million during the term of the Water System Bonds. In addition, $5.8 million will be received as bond proceeds for water related capital projects. Upon closing of the bond issuance, staff will present the City Council an appropriation adjustment to authorize the allocation of proceeds for the water system projects. Francisco Gutierrez Executive Director Finance and Management Services Agency' • I . F ' 1 I RESOLUTION NO. 2014 -XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A MASTER INSTALLMENT PURCHASE AGREEMENT, A FIRST SUPPLEMENT TO MASTER INSTALLMENT PURCHASE AGREEMENT, AN ESCROW AGREEMENT, A CONTINUING DISCLOSURE CERTIFICATE AND A PURCHASE CONTRACT IN CONNECTION WITH THE ISSUANCE OF SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BONDS, SERIES 2014 (PAYABLE SOLELY FROM INSTALLMENT PAYMENTS SECURED BY WATER SYSTEM NET REVENUES), APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $17,000,000 AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA 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 (the "City ") previously financed the costs of the acquisition, construction and installation of certain water system capital improvements (the "Project ") pertaining to the City's water system (the "Water System "); B. In order to accomplish such financing and refinancing, the Authority and the City entered into a Master Installment Purchase Agreement dated as of February 1, 2004 (the "Prior Master Installment Purchase Agreement "), by and between the City and the Authority, and a First Supplement to Master Installment Purchase Agreement dated as of March 1 2004 (the "Prior First Supplement" and together with the Master Installment Purchase Agreement, the "Prior Installment Purchase Agreement "), between the City and the Authority; C. In order to achieve certain savings, the City desires to refinance the Project by exercising its option to prepay the component installment payments (the "Prior Installment Payments ") payable by the City under the Prior First Supplement and cause the redemption of the Prior Bonds; 55394.00011 \8780228.5 80A -5 D. The City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to refinance the Project and fund additional projects (the "2014 Project) through the offering and sale of bonds of the Authority, designated "Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues)" (the 'Bonds "); E. In order to accomplish such refinancing and financing of the 2014 Project, the City and the Authority desire to enter into a new Master Installment Purchase Agreement (the "Master Installment Agreement') and a First Supplement to Master Installment Purchase Agreement (the "First Supplement'), under which the City will make Installment Payments; F. The Authority and the City desire that The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee ") and the Authority enter into an Indenture (the "Indenture ") in order to provide for the issuance of the Bonds; G. The Bonds will be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the "Act'); H. The funds representing the Installment Payments payable by the City under the First Supplement will be applied to the payment and redemption of the Prior Bonds pursuant to an Escrow Agreement (the "Escrow Agreement') by and among the City, the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow agent; I. Stifel, Nicolaus & Company, Incorporated, as underwriter (the "Underwriter "), has submitted to the City and the Authority a proposed form of an agreement to purchase the Bonds in the form of a Bond Purchase Agreement (the "Purchase Contract'); J. A form of the Preliminary Official Statement (the "Preliminary Official Statement") to be distributed in connection with the public offering of the Bonds has been prepared; K. Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 ('Rule 15c2 -12 ") requires that, in order to be able to purchase or sell the Bonds, the Underwriter must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain material events on an ongoing basis; Resolution No. 2014 -XXX 55394.00011 \8780228.5 80A -6 Page 2 of 6 L. In order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate "); M. The City is a member of the Authority and the Project is located within the boundaries of the City; N. The City Council has been presented with the form of each document referred to herein relating to the refinancing contemplated hereby, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such refinancing; and O. All acts, conditions and things required by the laws of the State of California and the City Charter of the City to exist, to have happened and to have been performed precedent to and in connection with the consummation of such refinancing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such refinancing for the purpose, in the manner and upon the terms herein provided; Section 2. All of the recitals herein contained are true and correct and the City Council so finds. Section 3. The City Council, on behalf of the City, hereby finds that the use of the Act to assist the City in refinancing the Project will result in significant public benefits to the citizens of the City because it is expected that such use will provide demonstrable savings in effective interest rate costs. The prepayment of the Prior Installment Payments under the Prior Installment Purchase Agreement and the redemption of the Prior Bonds are hereby approved. Section 4. The forms of the Master Installment Agreement and First Supplement, on file with the Clerk of the Council, are hereby approved, and the Mayor may designate, City Manager, the Assistant City Manager, the Clerk of the Council, Executive Director, Public Works and the Executive Director, Finance and Management Services (the "Authorized Officers "), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Master Installment Agreement and First Supplement in substantially said forms, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the principal components of the installment payments shall not exceed $17,000,000 and the true interest cost applicable to the interest components of the installment payments shall not exceed 4.00 %. Resolution No. 2014 -XXX 55394.00011 \8780228.5 80A-7 Page 3 of 6 Section 5. The form of Indenture, on file with the Clerk of the Council, with such changes, insertions and omissions therein as an authorized officer of the Authority executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, is hereby approved; provided, however, that the aggregate amount of the Bonds shall not exceed $17,000,000, the final maturity date of the Bonds shall be no later than September 1, 2031 and the true interest cost applicable to the Bonds shall not exceed 4.00% and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established by the Purchase Contract as finally executed. Section 6. The issuance of not to exceed $17,000,000 aggregate principal amount of the Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby approved. Section 7. The form of Purchase Contract, on file with the Clerk of the Council, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Purchase Contract in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the underwriter's discount for the sale of the Bonds shall not exceed 0.484% of the aggregate principal amount of such Bonds. Section 8. The form of Escrow Agreement, on file with the Clerk of the Council, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 9. The form of Preliminary Official Statement, on file with the Clerk of the Council, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2 -12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2 -12). Section 10. The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective investors for the Bonds a reasonable number of copies of the Preliminary Official Statement. Section 11. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. Resolution No. 2014 -XXX 55394.00011 \8780228.5 80A-8 Page 4 of 6 The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City. Section 12. The form of Continuing Disclosure Certificate, on file with the Clerk of the Council, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced to the execution and delivery thereof. Section 13. The Mayor, the City Manager, the Executive Director of Finance, the Clerk of the Council, and all other appropriate officials of the City, are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the financing herein authorized. [A detailed list of the main documents to be executed is attached hereto as Exhibit A] Section 14. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 15. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this 15th day of July, 2014. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Jose Sandoval, Chief Assistant City Attorney Resolution No. 2014 -XXX 8055394.0001 /� Page 5 of 6 1 \8780228.5 /�1 7 AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July 15, 2014. Date: Maria D. Huizar, Clerk of the Council Resolution No. 2014 -XXX 55394.00011 \8780228.5 80A -1 0 Page 6 of 6 EXHIBIT A 1. Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. 2. First Supplement to Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. 3. Indenture between the Santa Ana Financing Authority and the Bank of Mellon Trust Company, N.A. 4. Escrow Agreement by and among the Santa Ana Financing Authority and City of Santa Ana and The Bank of Mellon Trust Company, N.A. 5. Preliminary Official Statement relating to the Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014. 6. Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Bond Purchase Agreement. 7. Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Continuing Disclosure Agreement by City. 80A -11 80A -12 EXHIBIT 1 Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. FOODYMW MASTER INSTALLMENT PURCHASE AGREEMENT by and between the CITY OF SANTA ANA and the SANTA ANA FINANCING AUTHORITY Dated as of August 1, 2014 Relating to Installment Payments Secured by the Water Revenue Fund of the City of Santa Ana, California 55394.00011 \8819608.3 80A-14 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS SECTION 1.01. DEFINITIONS .................................. ............................... SECTION 1.02. RULES OF CONSTRUCTION ...................................... ............................... 12 55394.0001 1 \8819608.3 8074 -15 ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.01, SECTION 2.02. REPRESENTATIONS BY THE CITY ...................... . REPRESENTATIONS AND WARRANTIES BY THE AUTHORITY...... 13 ARTICLE III ACQUISITION AND CONSTRUCTION OF PROJECT SECTION 3.01. ACQUISITION AND CONSTRUCTION OF PROJECT; COMPONENTS........................... SECTION 3.02. ............................... CHANGES TO THE PROJECT ..................................... ............................... 14 ARTICLE IV INSTALLMENT PAYMENTS SECTION 4.01. SECTION 4.02. PURCHASE PRICE ............. ............................... INSTALLMENT PAYMENTS; RESERVE FUND PAYMENTS ............... 16 ARTICLE V SYSTEM REVENUES SECTION 5.01. SECTION 5.02. SECTION 5.03. SECTION 5.04. COMMITMENT OF THE NET SYSTEM REVENUES ............................. ALLOCATION OF SYSTEM REVENUES .................. ............................... ADDITIONAL OBLIGATIONS .................................... ............................... MAINTENANCE AND OPERATION OBLIGATIONS 16 16 17 Is ARTICLE VI COVENANTS OF THE CITY SECTION 6.01. SECTION 6.02. SECTION 6.03. SECTION 6.04. SECTION 6.05. SECTION 6.06. COMPLIANCE WITH INSTALLMENT PURCHASE AGREEMENT AND ANCILLARY AGREEMENTS ............................ ............................... AGAINST ENCUMBRANCES ........... ............................... DEBT SERVICE RESERVE FUND ................ .......................... AGAINST SALE OR OTHER DISPOSITION OF PROPERTY ................. AGAINST COMPETITIVE FACILITIES ..................... ............................ PROMPT ACQUISITION AND CONSTRUCTION ......................... ... 18 19 19 20 20 55394.0001 1 \8819608.3 8074 -15 TABLE OF CONTENTS (continued) Page SECTION 6.07. MAINTENANCE AND OPERATION OF THE WATER SYSTEM; BUDGETS ...................... SECTION 6.08. . . AMOUNT OF RATES AND CHARGES; RATE STABILIZATION 20 FUND........................................ SECTION 6.09. ............................... ....... ............................... PAYMENT OF CLAIMS 20 SECTION 6.10. ...... ............................... COMPLIANCE WITH CONTRACTS 21 SECTION 6.11. .......................... ............................... INSURANCE ....... 21 SECTION 6.12. ............................... . ACCOUNTING RECORDS; FINANCIAL STATEMENTS AND 21 OTHER REPORTS ........................ SECTION 6.13. . PROTECTION OF SECURITY AND RIGHTS OF THE 22 AUTHORITY ................... SECTION 6.14, . . PAYMENT OF TAXES AND COMPLIANCE WITH 22 GOVERNMENTAL REGULATIONS SECTION 6.15. .......................... ............................... COLLECTION OF RATES AND CHARGES; NO FREE SERVICE......... 22 SECTION 6.16. EMINENT DOMAIN PROCEEDS 23 SECTION 6.17. ................................ ............................... TAX COVENANTS 23 SECTION 6.18. ...................... ............................... . FURTHER ASSURANCES SECTION 6.19. .......................................... ............................... OPERATE WATER SYSTEM 23 SECTION 6.20. ....................................... ............................... ADDITIONAL COVENANTS 23 ...................................... ............................... 23 ARTICLE VII PREPAYMENT OF INSTALLMENT PAYMENTS SECTION 7.01. PREPAYMENT OF INSTALLMENT PAYMENTS .... ............................... 24 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY SECTION 8.01. EVENTS OF DEFAULT AND ACCELERATION OF MATURITIES SECTION 8.02. ...... APPLICATION OF NET SYSTEM REVENUES UPON 24 ACCELERATION.......................................................... SECTION 8.03. ............................... OTHER REMEDIES OF THE AUTHORITY 25 SECTION 8.04. ............... ............................... NON - WAIVER ...................................... 25 SECTION 8.05. ............................... REMEDIES NOT EXCLUSIVE .................................... ............................... 26 ARTICLE IX DISCHARGE OF OBLIGATIONS SECTION 9.01. DISCHARGE OF OBLIGATIONS ................................ ............................... 26 ARTICLE X MISCELLANEOUS SECTION 10.01. LIABILITY OF CITY LIMITED TO SYSTEM REVENUES ..................... 26 55394.00011 \8819608.3 8GA -16 TABLE OF CONTENTS (continued) Page SECTION 10.02. BENEFITS OF INSTALLMENT PURCHASE AGREEMENT LIMITEDTO PARTIES ................................................. SECTION 10.03. ............................... AMENDMENTS .................... 27 SECTION 10.04. SUCCESSOR IS DEEMED INCLUDED IN ALL REFERENCES TO 27 PREDECESSOR........................................... SECTION 10.05. ............................... WAIVER OF PERSONAL LIABILITY SECTION 10.06. ........................ ............................... PARTIAL INVALIDITY 28 SECTION 10.07. ................................................. .............................28 ASSIGNMENT ................................................................. SECTION 10.08. .............................28 NET CONTRACT ............................................................ SECTION 10.09. .............................28 CALIFORNIA LAW ...................................................... SECTION10.10. ............................... NOTICES ........................................................................ 28 SECTION 10.11. ............................... EFFECTIVE DATE ...................................... 28 SECTION 10.12. ............................... EXECUTION IN COUNTERPARTS .... .. ...................... ............................... 29 EXHIBIT A - DESCRIPTION OF ENTIRE PROJECT ............................... ............................A -1 55394.00011 \8819608.3 8QA-17 MASTER INSTALLMENT PURCHASE AGREEMENT This MASTER INSTALLMENT PURCHASE AGREEMENT, made and entered into as of August 1, 2014, by and between the CITY OF SANTA ANA, a charter city and municipal corporation organized and existing under and by virtue of the Constitution and the laws of the State of California and its Charter (the "City "), and the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority and public entity duly organized and existing under and by virtue of the State of California (the "Authority "); WiTNESSETH: WHEREAS, the City expects to have the need from time to time to finance or refinance the acquisition, construction and installation of improvements to its Water System (capitalized terms used herein shall have the meanings given such terms in Section 1.01); WHEREAS, the Authority desires to assist the City with such financings and refinancings; WHEREAS, in order to accomplish such financings and refinancings, the City will incur obligations payable from net revenues of its Water System; WHEREAS, such obligations may be in the form of bonds of the Authority or may be in the form of installment purchase agreements, leases or other contracts; WHEREAS, the proceeds of such obligations will be used to finance and /or refinance the acquisition, construction, installation and improvement of certain municipal water system facilities of the City, as more fully described in Exhibit A hereof and as may be modified from time to time in conformity with the same (the 'Project "); WHEREAS, the City has determined that the Project and the purchase of the Project and /or Components thereof by the City is necessary and proper for City uses and purposes; WHEREAS, the Authority proposes to sell and /or refinance the Project and/or Components thereof from time to time to the City and the City desires to purchase the Project and /or Components thereof from the Authority upon the terms and conditions set forth herein; WHEREAS, concurrently with the prepayment of the Prior Obligations, the City will reacquire the Project and resell the Project to the Authority and then repurchase the Project from the Authority pursuant to a Supplement; WHEREAS, the City and the Authority have duly authorized the execution of this Installment Purchase Agreement; WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Purchase Agreement do exist, have happened and have been performed in regular and due time, Ruin and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Purchase Agreement; 55394.00011 \8819608.3 80A-1 8 NOW, THEREFORE, IN CONSIDERATION OF THESE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall, for all purposes of this Installment Purchase Agreement and any Supplement, have the meanings set forth below: "Accountant's Report" means a report signed by an Independent Certified Public Accountant. "Acquisition Fund" means the fund by that name established pursuant to any Issuing Instrument. "Authority" means the Santa Ana Financing Authority, a joint exercise of powers authority and public entity duly organized and existing under and by virtue of the laws of the State, or its successors and assigns. "Authorized City Representative" means the Mayor, the City Manager, Assistant City Manager or the Treasurer of the City or such other officer or employee of the City or other person who has been designated as such representative by resolution of the City Council of the City. "Balloon Indebtedness" means, with respect to any Series of Obligations, twenty -five percent (25 %) or more of the principal of which matures on the same date or within a 12 -month period (with sinking fund payments on Term Obligations deemed to be payments of matured principal), that portion of such Series of Obligations which matures on such date or within such 12 -month period; provided, however, that to constitute Balloon Indebtedness the amount of indebtedness maturing on a single date or over a 12 -month period must equal or exceed 150% of the amount of such Series of Obligations which matures during any preceding 12 -month period. For purposes of this definition, the principal amount maturing on any date shall be reduced by the amount of such indebtedness which is required, by the documents governing such indebtedness, to be amortized by prepayment or redemption prior to its stated maturity date. "Bond Counsel" means any attorney at law or film of attorneys, of nationally recognized standing in matters pertaining to the validity of, and exclusion from gross income for federal income tax purposes of interest on, bonds issued by states and political subdivisions and duly admitted to practice law before the highest court of any state of the United States and acceptable to the City. "Charter" means the Charter of the City as it now exists or may hereafter be amended, and any new or successor Charter. 55394.00011 \8819608.3 80A-1 9 "City" means the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution, the laws of the State and its Charter. "Code" means the Internal Revenue Code of 1986, and the regulations thereunder, as amended. "Components" means components of the Project specified in a Supplement. "Consultant" means the consultant, consulting firm, engineer, architect, engineering firm, architectural firm, accountant or accounting firm retained by the City to perform acts or carry out the duties provided for such consultant in this Installment Purchase Agreement. Such consultant, consulting firm, engineer, architect, engineering firm or architectural firm shall be nationally recognized within its profession for work of the character required. Accountants or accounting films shall be independent certified public accountants licensed to practice in the State. "Credit Provider" means any municipal bond insurance company, bank or other financial institution or organization which is performing in all material respects its obligations under any Credit Support Instrument for some or all of the Parity Obligations. "Credit Provider Reimbursement Obligations" means obligations of the City to repay, from Net System Revenues, amounts advanced by a Credit Provider as credit or liquidity support for Parity Obligations. "Credit Support Instrument" means a policy of insurance, a letter of credit, a stand -by purchase agreement, revolving credit agreement or other credit arrangement pursuant to which a Credit Provider provides credit or liquidity support with respect to the payment of interest, principal or the purchase price of any Parity Obligations. "Debt Service" means, for any Fiscal Year, the sum of (1) the interest payable during such Fiscal Year on all outstanding Parity Obligations, assuming that all outstanding Serial Parity Obligations are retired as scheduled and that all outstanding Tenn Parity Obligations are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of sale of any Parity Obligations), (2) that portion of the principal amount of all outstanding Serial Parity Obligations maturing on the next succeeding principal payment date which falls in such Fiscal Year (excluding Serial Obligations which at the time of issuance are intended to be paid from the sale of a corresponding amount of Parity Obligations), (3) that portion of the principal amount of all outstanding Term Parity Obligations required to be redeemed or paid on any redemption date which falls in such Fiscal Year (together with the redemption premiums, if any, thereon); provided that, (a) as to any Balloon Indebtedness, Tender Indebtedness and Variable Rate Indebtedness, interest thereon shall be calculated as provided in the definition of Maximum Annual Debt Service and principal shall be deemed due at the nominal maturity dates thereof; (b) the amount on deposit in a debt service reserve fund on any date of calculation of Debt Service shall be deducted from the amount of principal due at the final maturity of the Parity Obligations for which such debt service reserve fund was established and in each preceding year until such amount is exhausted; (c) the amount of any interest payable on any Parity Obligation for which there exists a Qualified Swap Agreement shall be the net amount payable by the City as provided in paragraph (iv) or 55394.00011. \8819608.3 80A-20 _ paragraph (viii), as applicable, of the definition of Maximum Annual Debt Service; and (d) the amount of payments on account of Parity Obligations which are redeemed, retired or repaid on the basis of the accreted value due on the scheduled redemption, retirement or repayment date shall be deemed principal payments, and interest that is compounded and paid as part of the accreted value shall be deemed payable on the scheduled redemption, retirement or repayment date but not before. For purposes of complying with the rate setting covenants contained herein and satisfying the debt service coverage requirements in connection with the issuance or incurring of Parity Obligations, Debt Service shall not include those portions of Parity Obligations to be paid in such period to the extent the interest that is evidenced and represented thereby is capitalized or is reasonably anticipated to be reimbursed to the Authority by the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program. "Defaulted Obligations" means Obligations in respect of which an Event of Default has occurred and is continuing. "Engineer's Report" means a report signed by an Independent Engineer. "Event of Default" means an event described in Section 8.01. "Fiscal Year" means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other twelve -month period selected and designated as the official Fiscal Year of the City. "Independent Certified Public Accountant" means any firm of certified public accountants appointed by the City, and each of whom is independent pursuant to the Statement on Auditing Standards No. 1 of the American Institute of Certified Public Accountants. "Installment Payment Date" means any date on which an Installment Payment is due as specified in or determined pursuant to a Supplement. "Installment Payments" means the Installment Payments scheduled to be paid by the City under and pursuant hereto and any Supplement. "Installment Payment Obligations" means Obligations consisting of or which are supported in whole by Installment Payments. "Installment Purchase Agreement" means this Master Installment Purchase Agreement, by and between the City and the Authority, dated as of August 1, 2014, as originally executed and as it may from time to time be amended or supplemented in accordance herewith. "Issuing Instrument" shall mean any indenture, trust agreement or installment purchase agreement including any Supplement under which Obligations are issued or created. The term Issuing Instrument shall not include a Qualified Swap Agreement. "Maintenance and Operation Costs" means the reasonable and necessary costs spent or incurred by the City, for maintaining and operating the Water System, calculated in accordance with generally accepted accounting principles, including (among other things) all costs of water 55394.00011A8819608.3 80A in - -2 1 purchased or leased by the City, the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City attributable to the Project and the Installment Purchase Agreement, salaries and wages of employees, payments to employees retirement systems (to the extent paid from System Revenues), overhead, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of the Obligations, including this Installment Purchase Agreement, including any amounts required to be deposited in the Rebate Fund pursuant to the Tax Certificate, and fees and expenses payable to any Credit Provider (other than in repayment of a Credit Provider Reimbursement Obligation), but excluding in all cases (i) depreciation, replacement and obsolescence charges or reserves therefor, (ii) amortization of intangibles or other bookkeeping entries of a similar nature, (iii) costs of capital additions, replacements, betterments, extensions or improvements to the Water System which under generally accepted accounting principles are chargeable to a capital account or to a reserve for depreciation, (iv) charges for the payment of principal and interest on any general obligation bond heretofore or hereafter issued for Water System purposes, and (v) charges for the payment of principal and interest on any debt service on account of any obligation on a parity with or subordinate to the Installment Payments. Payments with respect to Maintenance and Operation Obligations shall be considered Maintenance and Operation Costs if they are incurred in connection with the Maintenance and Operation Costs described in the preceding paragraph. "Maintenance and Operation Obligation" means any contract or lease for the purchase of any facilities, properties, structures, or works, or any loan of credit to or guaranty of debts, claims or liabilities of any other person for the purpose of obtaining any facilities, properties, structures or works, the final payments under which are due more than five years following the effective date thereof; so long as in each case the payments thereunder are to constitute Maintenance and Operation Costs. "Maximum Annual Debt Service" means, at any point in time, with respect to Parity Obligations then Outstanding, the maximum amount of principal and interest becoming due on the Parity Obligations in the then current or any future Fiscal Year, calculated by the City or by an Independent Certified Public Accountant as provided in this definition and provided to the Trustee. For purposes of calculating Maximum Annual Debt Service, the following assumptions shall be used to calculate the principal and interest becoming due in any Fiscal Year: (i) in determining the principal amount due in each year, payments shall (except to the extent a different subsection of this definition applies for purposes of determining principal maturities or amortization) be assumed to be made in accordance with any amortization schedule established for such debt, including the amount of any Parity Obligations which are or have the characteristics of commercial paper and which are not intended at the time of issuance to be retired from the sale of a corresponding amount of Parity Obligations, and including any scheduled mandatory redemption or prepayment of Parity Obligations on the basis of accreted value due upon such redemption or prepayment, and for such purpose, the redemption payment or prepayment shall be deemed a principal payment; in determining the interest due in each year, interest 80A -22 55394.00011 \8819608.3 5 payable at a fixed rate shall (except to the extent subsection (ii) or (iii) of this definition applies) be assumed to be made at such fixed rate and on the required payment dates; (ii) if all or any portion or portions of an Outstanding Series of Parity Obligations constitutes Balloon Indebtedness or if all or any portion of a Series of Parity Obligations or such payments then proposed to be issued would constitute Balloon Indebtedness, then, for purposes of determining Maximum Annual Debt Service, each maturity which constitutes Balloon Indebtedness shall be treated as if it were to be amortized in substantially equal annual installments of principal and interest over a term of 25 years commencing in the year the stated maturity of such Balloon Indebtedness occurs, the interest rate used for such computation shall be determined as provided in (iv) or (v) below, as appropriate, and all payments of principal and interest becoming due prior to the year of the stated maturity of the Balloon Indebtedness shall be treated as described in (i) above; (iii) if any of the Outstanding Series of Parity Obligations constitutes Tender Indebtedness or if Parity Obligations proposed to be issued would constitute Tender Indebtedness, then for purposes of determining Maximum Annual Debt Service, Tender Indebtedness shall be treated as if the principal amount of such Parity Obligations were to be amortized in accordance with the amortization schedule set forth in such Tender Indebtedness or in the Credit Support Instrument established with respect to such Tender Indebtedness, or if no such amortization schedule is set forth, then such Tender Indebtedness shall be deemed to be amortized in substantially equal annual installments of principal and interest over a term of 25 years commencing in the year in which such Series is first subject to tender, and the interest rate used for such computation shall be determined as provided in (iv) or (v) below, as appropriate; (iv) if any Outstanding Parity Obligations constitute Variable Rate Indebtedness (except to the extent paragraph (ii) relating to Balloon Indebtedness or paragraph (iii) relating to Tender Indebtedness applies), the interest rate on such Parity Obligation shall be assumed to be 110% of the daily average interest rate on such Parity Obligations during the 12 months ending with the month preceding the date of calculation, or such shorter period that such Parity Obligations shall have been Outstanding; provided that in the event that Variable Rate Indebtedness has been issued in connection with a Qualified Swap Agreement, the interest rate for purposes of computing Maximtun Annual Debt Service shall be determined by (x) calculating the annualized net amount paid by the City under such Variable Rate Indebtedness and Qualified Swap Agreement (after giving effect to payments made Linder the Variable Rate Indebtedness and made and received by the City under the Qualified Swap Agreement) during the 12 months ending with the month preceding the date of calculation, or such shorter period that such Qualified Swap Agreement has been in effect, and (y) dividing the amount calculated in clause (x) by the average daily balance of the related Parity Obligations Outstanding during the 12 -month period contemplated by clause (x); (v) if Parity Obligations proposed to be issued will be Variable Rate Indebtedness (except to the extent subsection (ii) relating to Balloon Indebtedness or subsection (iii) relating to Tender Indebtedness applies), then such Parity Obligations 80A -23 55394.00011 \8819608,3 6 shall be assumed to bear interest at 110% of the average of the J.J. Kenny High Grade Index during the prior 12 months ending with the month preceding the date of sale of such additional Parity Obligations, or if that index is no longer published, another similar index selected by the City, or if the City fails to select a replacement index, an interest rate equal to 80% of the yield for outstanding United States Treasury bonds having an equivalent maturity, or if there are no such Treasury bonds having such maturities, 100% of the lowest prevailing prime rate of any of the five largest commercial banks in the United States ranked by assets; provided that in the event that such Variable Rate Indebtedness will be issued in connection with a Qualified Swap Agreement, the interest rate for purposes of computing Maximum Annual Debt Service shall be determined by (a) calculating the net amount to be paid by the City under such Variable Rate Indebtedness and Qualified Swap Agreement after giving effect to payments to be made under the Variable Rate Indebtedness and to be made and received by the City under the Qualified Swap Agreement) for the period during which the Qualified Swap Agreement is to be in effect and for this purpose any variable rate of interest agreed to be paid thereunder shall be deemed to be the rate at which the related Parity Obligation shall be assumed to bear interest, and (b) dividing the amount calculated in clause (a) by the average principal amount of the related Parity Obligation to be Outstanding during the first year after the issuance of such Parity Obligation; (vi) if moneys or Permitted Investments have been deposited by the City into a separate fund or account or are otherwise held by the City or by a fiduciary to be used to pay principal and /or interest on specified Parity Obligations, then the principal and /or interest to be paid from such moneys, Permitted Investments or from the earnings thereon shall be disregarded and not included in calculating Maximum Annual Debt Service; (vii) if Parity Obligations are Paired Obligations, the interest thereon shall be the resulting linked rate or effective fixed rate to be paid with respect to such Paired Obligations; and (viii) in the event that an agreement or commitment which, at the time of calculation is a Qualified Swap Agreement is or is to be in effect with respect to a Parity Obligation which is not Variable Rate Indebtedness, the interest rate of such Parity Obligation for purposes of calculating Maximum Annual Debt Service shall be calculated as follows: (a) for such a Qualified Swap Agreement which is in effect on the date of calculation, the interest rate shall be calculated in the same manner as is specified in paragraph (iv) for a Qualified Swap Agreement issued in connection with Variable Rate Indebtedness which is Outstanding on the date of calculation; and (b) for such a Qualified Swap Agreement which is not in effect on the date of calculation, the interest rate shall be calculated in the same manner as is specified in paragraph (v) for a Qualified Swap Agreement to be issued in connection with Variable Rate Indebtedness to be Outstanding after the date of calculation, and for this purpose any variable rate of interest agreed to be paid 80A -24 55394.00011 \8819608.3 7 thereunder shall be assumed to be the rate assumed for Variable Rate Indebtedness described in paragraph (v). "Maximum Rate" means, on any day, the maximum interest rate allowed by law. " Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the state of Delaware, and its successors and assigns, and, if such entity shall for any reason no longer perform the functions of a securities rating agency, " Moody's" shall be deemed to refer to any other nationally recognized securities rating agency (other than S &P) designated by the City. "Net Proceeds" means, when used with respect to any insurance, self insurance or condemnation award, the proceeds from such award remaining after payment of all expenses (including attorneys' fees) incurred in the collection of such proceeds. "Net System Revenues" means, for any Fiscal Year, the System Revenues for such Fiscal Year less the Maintenance and Operation Costs for such Fiscal Year. "Obligations" means (1) obligations of the City for money borrowed (such as bonds, notes or other evidences of indebtedness) or as installment purchase payments under any contract (including Installment Payments), or as lease payments under any financing lease (determined to be such in accordance with generally accepted accoutring principles), the principal and interest on which are payable from Net System Revenues; (ii) obligations to replenish any debt service reserve funds with respect to such obligations of the City; (iii) obligations secured by or payable from any of such obligations of the City; and (iv) obligations of the City payable from Net System Revenues under (a) any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, (b) any contract to exchange cash flows or a series of payments or (c) any contract to hedge payment, currency, rate spread or similar exposure, including but not limited to interest rate swap agreements and interest rate cap agreements. "Outstanding," when used as of any particular time with respect to Obligations, means all Obligations theretofore or thereupon executed, authenticated and delivered by the City or any trustee or other fiduciary, except (i) Obligations theretofore cancelled or surrendered for cancellation; (ii) Obligations paid or deemed to be paid within the meaning of any defeasance provisions thereof; (iii) Obligations owned by the City or the Authority; and (iv) Obligations in lieu of or in substitution for which other Obligations have been executed and delivered. "Owner" means any person who shall be the registered owner of any outstanding Obligation certificate or other evidence of a right to receive Installment Payments directly or as security for payment of the Obligation. "Paired Obligations" shall mean any Series (or portion thereof) of Parity Obligations designated as Paired Obligations in any Issuing Instrument or other document authorizing the issuance or incurrence thereof, which are simultaneously issued or incurred (i) the principal of which is of equal amount maturing and to be redeemed (or cancelled after acquisition thereof) on the same dates and in the same amounts, and (ii) the interest rates which, taken together, result in an irrevocably fixed interest rate obligation of the City for the terms of such Paired Obligations. 80A -25 55394.00011A8819608.3 8 "Parity Installment Obligation" means Obligations consisting of or payable from Installment Payments which are not subordinated in right of payment to other Installment Payments. "Parity Obligations" means (i) Parity Installment Obligations, (ii) Obligations the principal and interest of which are payable on a parity with Parity Installment Obligations, and (iii) Qualified Swap Agreements. Notwithstanding the foregoing, any amounts payable with respect to a Qualified Swap Agreement which represent termination payments or unwinding payments shall not be deemed to be Parity Obligations unless (a) such Qualified Swap Agreement expressly states that such termination payments or unwinding payments are to be considered Parity Obligations and (b) each Rating Agency which currently maintains a rating with respect to any Parity Obligation confirms in writing to the City that the inclusion of such termination payments or unwinding payments as Parity Obligations will not result in a downgrading, withdrawal or suspension of such rating. "Paying Agent" means, with respect to an Installment Payment Obligation or Series of Installment Payment Obligations, the bank, trust company or other financial institution, if any, or other entities designated as the place or entity which shall make payment on such Installment Payment Obligation or a Series of Installment Payment Obligations and /or the interest thereon instead of or in addition to the City Treasurer's office. "Payment Fund" means the fund designated in the Issuing Instrument as the fund into which Installment Payments are to be deposited for the purposes of paying principal or interest on related Obligations. "Permitted Investments" means investments which pursuant to an Issuing Instrument are permissible for the investment of funds received from the sale of Obligations pursuant to the Issuing Instrument or from other funds held pursuant to the Issuing Instrument. "Prior Obligations" means the Santa Ana Financing Authority Water Revenue Bonds, Series 2004 (Payable Solely from Installment Payments Secured by Water System Net Revenues). "Project" means the construction, replacement and improvements to the Water System described in Exhibit A hereto and as modified with respect to Components in conformance with Section 3.02 hereof. "Purchase Price" means the principal amount plus interest thereon owed by the City to the Authority under the terms hereof as provided in Section 4.01 and as specified in a Supplement. "Qualified Swap Agreement" means a contract or agreement, payable from Net System Revenues on a parity with Parity Obligations, intended to place Obligations on the interest rate, currency, cash flow or other basis desired by the City, including, without limitation, any interest rate swap agreement, currency swap agreement, forward payment conversion agreement or futures contract, any contract providing for payments based on levels of, or changes in, interest rates, currency exchange rates, stock or other indices, any contract to exchange cash flows or a series of payments, or any contract, including, without limitation, an interest rate floor or cap, or 80A -26 55394.00011 \8819608.3 9 an option, put or call, to hedge payment, currency, rate, spread or similar exposure, between the City and a counterparty; provided that not less than 30 days prior to the City's execution of such contract or agreement, each Rating Agency which maintains a rating with respect to any Parity Obligation receives notice in writing of the City's pending execution thereof; and provided further that at the time of origination each Rating Agency which maintains a rating with respect to any Parity Obligation confirms in writing to the City that the City's execution and delivery of such contract will not result in a downgrading, withdrawal or suspension of such rating. The counterparty to a Qualified Swap Agreement must have, at the date of execution of the Qualified Swap Agreement, an unsecured, uninsured and nonguaranteed long -tenn obligation rated not lower than A by Moody's and S &P; provided, that such counterparty may satisfy such rating requirements by providing an insurance policy for its obligations under any such swap agreement from an insurer whose unsecured ratings are in the rating categories required above, or alternatively by providing an unconditional, irrevocable, unsecured, uninsured and nonguaranteed guaranty of any other entity, including an affiliated entity, whose unsecured ratings are in the rating categories required above. "Rating Agencies" means Moody's and S &P, or whichever of them is then rating Parity Obligations. "Rebate Fund" means the fund by that name established pursuant to any Issuing Instrument. "Rebate Requirement" shall have the meaning specified in any Tax Certificate. "Reserve Fund" and "Reserve Account" shall have the meanings given to such terms in any Issuing Instrument or Supplement. "Reserve Requirement" shall have the meaning given to such term in any Issuing Instrument or Supplement. "S &P" means Standard & Poor's Ratings Services, its successors and assigns, and if such entity shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody's) designated by the City. "Serial Parity Obligations" means Serial Obligations which are Installment Payments or are payable on a parity with Parity Installment Obligations. "Serial Obligations" means Obligations for which no sinking fund payments are provided. "Series" means Obligations issued at the same time or sharing some other common term or characteristic and designated in the Issuing Instrument pursuant to which such Obligations were issued as a separate issue or series of Obligations. "State" means the State of California. "Subordinated Obligations" means any Obligations, the payment of principal and interest on which are subordinated in right of payment to Parity Obligations. 80A -27 55394.00011 \8819608.3 10 "Supplement" means a supplement, supplemental to or amendatory of this Installment Purchase Agreement providing for the payment of specific Installment Payments as the Purchase Price for Components of the Project, executed and delivered by the City and the Authority. "System Revenues" means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the Water System, including, without limiting the generality of the foregoing, (i) all income, rents, rates, fees, charges (including standby and capacity charges), insurance proceeds or other moneys derived by the City from the water services, facilities, and commodities or byproducts sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Water System, (ii) investment earnings on, and income derived from, the amounts referred to in the preceding clause (i), including investment earnings on the operating reserves, to the extent that the use of such earnings is limited to the Water System by or pursuant to law, and earnings on any Reserve Fund for Obligations but only to the extent that such earnings may be utilized under the Issuing Instrument for the payment of debt service for such Obligations; (iii) the proceeds derived by the City directly or indirectly from the sale or lease of a part of the Water System; and (iv) any amount received from the levy or collection of taxes which are solely available and are earmarked for the support of the operation of the Water System; provided, however, that System Revenues shall not include: (a) customers' deposits or any other deposits or advances subject to refimd until such deposits or advances have become the property of the City; and (b) the proceeds of borrowings. Notwithstanding the foregoing, there shall be deducted from System Revenues any amounts transferred into a Rate Stabilization Fund as contemplated by Section 6.08(b), and there shall he added to System Revenues any amounts transferred out of such Rate Stabilization Fund to pay Maintenance and Operation Costs. System Revenues shall include reimbursements from the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program); provided, however, for purposes of complying with the rate setting covenants contained herein and satisfying the debt service coverage requirements in connection with the issuance or incurring of Parity Obligations. "Tax Certificate" means a certificate relating to the requirements of the Code, signed on behalf of the City and the Authority and delivered in connection with the issuance of Tax - Exempt Installment Payment Obligations. "Tax- Exempt Installment Payment Obligations" means Installment Payment Obligations in respect of which it is intended that the interest component thereof will be excluded from gross income of the holders thereof (other than any holder who is a "substantial user" of facilities financed with such obligations or a "related person" within the meaning of Section 147(a) of the Code) for federal income tax purposes, whether or not such interest in includable as an item of tax preference or otherwise includable directly or indirectly for purposes of calculating other tax liabilities, including any alternative minimum tax or environmental tax under the Code. "Tender Indebtedness" means any Parity Obligations or portions of Parity Obligations, a feature of which is an option, on the part of the holders thereof, or an obligation, under the terms of such Parity Obligations, to tender all or a portion of such Parity Obligations to the City, a Paying Agent or other fiduciary or agent for payment or purchase and requiring that such. Bonds 80A1 -28 55394.00011 \8819608.3 or portions of Bonds or that such rights to payments or portions of payments be purchased if properly presented. "Term Parity Obligations" means Term Obligations which are Parity Installment Obligations or are payable on a parity with Parity Installment Obligations. "Term Obligations" means Obligations which are payable on or before their specified maturity dates from sinking fund payments established for that purpose and calculated to retire such Obligations on or before their specified maturity dates. "Trustee" means a financial institution acting in its capacity as Trustee under and pursuant to the any Issuing Instrument, and its successors and assigns. "Variable Rate Indebtedness" means any portion of indebtedness evidenced by Parity Obligations the interest rate on which is not established at the time of incurrence of such indebtedness and has not, at some subsequent date, been established at a rate which is not subject to fluctuation or subsequent adjustment, excluding Paired Obligations. "Water Revenue Fund" has the meaning ascribed thereto in Section 5.02 hereof. "Water Service" means the water storage and distribution services made available or provided by the Water System. "Water System" means any and all facilities, properties and improvements at any time owned, controlled or operated by the City as part of the Water Revenue Fund (defined in Section 5.02 hereof) for the collection, treatment, distribution, administration, disposal or reclamation of water. SECTION 1.02. Rules of Construction. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neutral genders. Except where the context otherwise requires, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including districts, agencies and other public bodies, as well as natural persons. Unless otherwise indicated, references herein to subsections, "Sections" and "Articles" are to such subsections, Sections and Articles of this Installment Purchase Agreement. Unless the context requires otherwise, the terms "herein," "hereof," "hereunder" and any similar terms, as used in this Installment Purchase Agreement, shall refer to this Installment Purchase Agreement as a whole and not to any particular provisions of this Installment Purchase Agreement. The term "issue" shall include issuance, creation, incurrence, entering into an agreement or any other act pursuant to which the City may become obligated with respect to an Obligation. ARTICLE 11 REPRESENTATIONS AND WARRANTIES SECTION 2.01. Representations by the City. The City makes the following representations: 80A�-29 55394.0001] \88196083 (a) The City is a charter city and municipal corporation of the State, duly organized and validly pursuant to the provisions of the Constitution and the laws of the State and its Charter. (b) The City has full legal right, power and authority to enter into this Installment Purchase Agreement and carry out its obligations hereunder and to carry out and consummate all transactions contemplated by this Installment Purchase Agreement, and the City has complied with the provisions of the Constitution and the laws of the State and its Charter in all matters relating to such transactions. The execution and delivery of this Installment Purchase Agreement is not subject to any voter approval requirement contained in Section 602 of the Charter. (c) By proper action, the City has duly authorized the execution, delivery and due performance of this Installment Purchase Agreement. (d) The execution and delivery of this Installment Purchase Agreement and the consummation of the transactions herein contemplated will not violate any provision of law, any order of any court or other agency of government, or any indenture, material agreement or other instrument to which the City is now a party or by which it or any of its properties or assets is bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the passage of time or both) under any such indenture, agreement or other instrument, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the City. (e) The City has determined that it is necessary and proper for the City uses and purposes within the terms of the Constitution and the laws of the State and its Charter that the City acquire the Project in the manner provided for in this Installment Purchase Agreement, in order to provide essential services and facilities to the persons residing in the City. SECTION 2.02. Representations and Warranties by the Authority. The Authority makes the following representations and warranties: (a) The Authority is a joint exercise of powers authority and public entity organized and existing under the laws of the State. (b) The Authority has full legal right, power and authority to enter into this Installment Purchase Agreement and to carry out its obligations hereunder and to carry out and consummate all transactions contemplated by this Installment Purchase Agreement. (c) By proper action, the Authority has duly authorized the execution, delivery and due performance of this Installment :Purchase Agreement. (d) The execution and delivery of this Installment Purchase Agreement and the consummation of the transactions herein contemplated will not violate any provision of law, any order of any court or other agency of government, or any indenture, material 55394.00011 \8819608.3 80- 13730 agreement or other instrument to which the Authority is now a party or by which it or any of its properties or assets is bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the passage of time or both) under any such indenture, agreement or other instrument, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority. (e) The interest components of Tax - Exempt Installment Payment Obligations will not be includable in the gross income of the owners of such Obligations for federal income tax purposes. ARTICLE III ACQUISITION AND CONSTRUCTION OF PROJECT SECTION 3.01. Acquisition and Construction of Project; Components. The Authority agrees to apply proceeds of its Obligations in accordance with Section 5.02 of the Indenture, and in connection therewith, the Authority hereby agrees to cause the Project or any Component thereof to be constructed, acquired and installed by the City, as agent of the Authority. The City shall enter into contracts and provide for, as agent of the Authority, the complete construction, acquisition and installation of the Project or any Component thereof as may be necessary. The City hereby agrees that it will cause the construction, acquisition and installation of the Project to be diligently performed. It is hereby expressly understood and agreed that, except to the extent of proceeds of Authority Obligations which are deposited in an Acquisition Fund, the Authority shall be under no liability of any kind or character whatsoever for the payment of any cost of the Project or any Components. In the event the proceeds of Authority Obligations deposited in an Acquisition Fund are insufficient to complete the construction, acquisition and installation of the Project or any Components, the City shall cause to be deposited in such Acquisition Fund (or shall otherwise appropriate and encumber) from and to the extent of available amounts on deposit in the Water Revenue Fund (or other lawfully available moneys) an amount equal to that necessary to complete the construction, acquisition and installation of the Project or such Components. The Authority will not undertake to cause any component of the Project to be constricted, acquired or installed unless and until the City and the Authority have entered into a Supplement specifying the components of the Project to be installed or refinanced, the date of completion, the purchase price to be paid by the City hereunder for that component of the Project, and the Installment Payments or the method of calculating Installment Payments. SECTION 3.02. Changes to the Project. (a) From time to time and at any time, the City may modify or amend the description of the Project, to eliminate any part thereof and /or to substitute another Project or Projects, all without obtaining any consent, by filing an amended Exhibit A with the Authority and the Trustee; provided however, that no such amendment shall substitute a Project or Projects which are not to be owned by the City or shall in any way impair the obligations of the City payable from the Water Revenue Fund and contained in any Supplement executed and delivered prior to any such amendment. 55394.00011 \8819608.3 80 1zF_3 l (b) The City may substitute other improvements for those listed as Components in any Supplement, but only if the City first files with the Authority and the Trustee a certificate of an Authorized City Representative: (i) identifying the Components to be substituted and the Components they replace; (ii) stating that the substituted Components will be owned by the City and payable from the Water Revenue Fund; and (iii) stating that with respect to Components financed with Tax - Exempt Installment Payment Obligations, the estimated costs of construction, acquisition and installation of the substituted improvements are not less than such costs for the improvements previously planned. Substituted Components may include or consist of an undivided interest in such Components, in which event the costs associated with the substituted Components over and above the undivided interest need not be deposited in the Acquisition Fund (or otherwise appropriated and encumbered); provided that the certificate of an Authorized City Representative specifies that the funds necessary to complete the substituted Components are on deposit in the Acquisition Fund or otherwise appropriated and encumbered. ARTICLE IV INSTALLMENT PAYMENTS SECTION 4.01. Purchase Price. (a) The City will pay the Purchase Price for any Components being purchased as provided in a Supplement. The Purchase Price to be paid by the City to the Authority pursuant to any Supplement hereto, solely from Net System Revenues and from no other sources, is the sum of the principal amount of the City's obligations under such Supplement plus the interest to accrue on the unpaid balance of such principal amount from the effective date thereof over the tern thereof, subject to prepayment as provided therein. (b) The principal amount of the Installment Payments to be made by the City under a Supplement shall be paid at least five days prior to the date such Installment Payments are payable as specified in such Supplement or at such other earlier time or times and in the manner or manners as specified in such Supplement. (c) The interest to accrue on the unpaid balance of such principal amount shall be paid at least five days prior to the date such interest is payable as specified in a Supplement or at such other earlier time or times as specified in such Supplement, and shall be paid by the City as and constitute interest paid on the principal amount of the City's obligations thereunder. Interest shall be payable in an amount not exceeding the Maximum Rate, at such intervals and according to such interest rate formulas as shall be specified in a Supplement or by reference to any Issuing Instrument to which such Supplement relates, and shall be payable with such frequency as shall be specified therein. 55394.00011 \8819608.3 80- 1S-32 SECTION 4.02. Installment Payments; Reserve Fund Payments. (a) The City may, subject to any rights of prepayment provided for in a Supplement, pay to the Authority, solely from Net System Revenues and from no other sources, the Purchase Price in installment payments over a period not to exceed the maximum period permitted by law, all as specified in a Supplement. In the event that a Trustee notifies the City that the amount on deposit in a Reserve Fund or Reserve Account is less than the Reserve Requirement, the City shall deposit or cause to be deposited, solely from Net System Revenues, in such Reserve Fund or Reserve Account such amounts on a monthly basis as are necessary to increase the amount on deposit therein to the Reserve Requirement in the ensuing six months. (b) The obligation of the City to make the Installment Payments solely from Net System Revenues is absolute and unconditional, and until such time as the Purchase Price shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Article IX), the City will not discontinue or suspend any Installment Payments required to be made by it under this section when due, whether or not the Project or any Component thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Installment Payments shall not be subject to reduction whether by offset or otherwise and shall not be conditioned upon the performance or nonperformance by any party of any agreement for any cause whatsoever. ARTICLE V SYSTEM REVENUES SECTION 5.01. Commitment of the Net System Revenues. All Parity Obligations, including Parity Installment Payment Obligations, shall be secured by a prior lien on and pledge of Net System Revenues, and within such lien priority, such Parity Obligations shall be of equal rank without preference, priority or distinction of any Parity Obligations over any other Parity Obligations. The City does hereby grant such prior lien on and pledge of Net System Revenues to secure Parity Obligations. Such lien and pledge shall constitute a first lien on Net System Revenues. The City hereby represents and states that it has not previously granted any lien or charge on any of the Net System Revenues except as may be stated in a Supplement; provided, however, that out of Net System Revenues there may be apportioned such sums for such purposes as are expressly permitted by this Article V. SECTION 5.02. Allocation of System Revenues. (a) In order to carry out and effectuate the commitment and pledge contained in Section 5.01, the City agrees and covenants that all System Revenues shall be received by the City in trust and shall be deposited when and as received in the City of Santa Ana Water Revenue Fund (the "Water Revenue Fund ") and which fund the City agrees and covenants to maintain so long as any Installment Payments remain unpaid, and all moneys in the Water Revenue Fund shall be so held in trust and applied and used solely as provided herein. The City shall pay (i) directly or as otherwise required all Maintenance and Operation Costs, (ii) to the Trustee, as assignee of the Authority, for deposit in the Payment Fund for Parity Obligations, the amounts specified in any Issuing Instrument, as 55394.00011 \8819608.3 8M733 payments due on account of Parity Obligations. In the event there are insufficient Net System Revenues to make all of the payments contemplated by clause (ii) of the immediately preceding sentence, then said payments should be made as nearly as practicable, pro rata, based upon the respective unpaid principal amounts of said Parity Obligations. (b) After the payments contemplated by paragraph (a) above have been made, any remaining Net System Revenues shall be used to make up any deficiency in the Reserve Funds and Reserve Accounts for Parity Obligations. In the event there are insufficient Net System Revenues to make up all deficiencies in all Reserve Funds and Reserve Accounts for Parity Obligations, such payments into Reserve Funds and Reserve Accounts shall be made as nearly as practicable pro rata based on the respective unpaid principal amount of all Parity Obligations. Any amounts thereafter remaining in the Water Revenue Fund may from time to time be used to pay for capital expenditures for the Water System or any other lawful purpose of the City, including payments on account of Subordinated Obligations, provided the following conditions are met: (1) all Maintenance and Operation Costs are being and have been paid and are then current; and (2) all deposits and payments contemplated by clause (ii) of paragraph (a) above shall have been made in full and no deficiency in any Reserve Fund or Reserve Account for Parity Obligations shall exist. SECTION 5.03. Additional Obligations. (a) The City may not create any Obligations the payments of which are senior or prior in right to the payment by the City of Parity Obligations. (b) Without regard to Section 5.03(c), the City may at any time enter into or create an obligation or commitment which is a Credit Provider Reimbursement Obligation or a Qualified Swap Agreement provided the Obligation to which the Qualified Swap Agreement relates is a Parity Obligation. (c) After the initial issuance of Parity Obligations hereunder, the City may at any time and from time to time issue or create any other Parity Obligations, provided: (1) The City is not in default under the term of this Agreement. (2) (i) Net System Revenues, as certified by the City, for the most recent audited Fiscal Year preceding the date of execution of the Parity Obligations, plus (ii) projected Net System Revenues (as described below) are at least equal to 120% of Aggregate Maximum Annual Debt Service. The projections described in (2)(ii) above may take into account (A) increases in the charges made for service from the Water System which have been adopted by the City prior to the date of issuance or incurrence of such Parity Obligations, but which were not in effect for all or part of such preceding Fiscal Year, and which are scheduled to be effective in the period of Debt Service shown for such Parity Obligations, and (2) an 55394.00011 \8819608.3 80"r734 allowance for estimated additional average annual Net System Revenues from any additions or connections to or improvernents or extensions of the Water System which have occurred from the end of Fiscal Year preceding the date of execution of the Parity Obligations. (3) Notwithstanding the requirements described above, Parity Obligations may be issued or incurred to refund outstanding Parity Obligations if, after giving effect to the application of the proceeds thereof, total Debt Service will not be increased in any Fiscal Year in which Parity Obligations (outstanding on the date of issuance or incurrence of such refunding Parity Obligations, but excluding such refunding Parity Obligations) not being refunded are outstanding. (4) The City may but shall not be required to fund a reserve fund or obtain a reserve fund surety or instrument with respect to any Parity Obligations. If a reserve fund is funded for any Parity Obligations or a qualified reserve fund surety or instrument is obtained with respect to any Parity Obligations, such funded reserve fiend or qualified reserve fund surety or instrument shall secure only the related Parity Obligations and shall not support the Bonds or any other Parity Obligations. (5) Subordinate Obligations. The City further covenants that it shall not issue or incur any Subordinate Obligations unless Net System Revenues or projected Net System Revenues, calculated in the same manner as described in paragraph (b) above, are equal to at least 100% of the sum of Debt Service on all Parity Obligations and Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. SECTION 5.04. Maintenance and Operation Obligations. Amounts to be paid by the City with respect to any Maintenance and Operation Obligation shall constitute Maintenance and Operation Costs only if at the time such Obligation is entered into the City shall deliver to each Trustee a Certificate of the City to the effect that (i) the malting of payments on such Obligation as Maintenance and Operation Costs will not impair the City's ability to comply with the covenant set forth in Section 6.08(a) hereof during the next five Fiscal Years or five Fiscal Years beyond the commercial operation date of the project being financed with such Obligation, whichever is later, and (ii) the properties, services or commodities to be furnished pursuant to such Obligation can be economically and beneficially utilized by the City. If the amounts to be paid by the City for a Maintenance and Operation Obligation do not constitute Maintenance and Operation Costs, then such amounts shall be paid as Subordinate Obligations, in accordance with Section 5.02(b) hereof unless, at the time such Obligation is initially incurred, the City demonstrates compliance with Section 5,03(c), in which event such amounts may be paid as Parity Obligations, in accordance with Section 5.02(a) hereof. ARTICLE VI COVENANTS OF THE CITY SECTION 6.01. Compliance with Installment Purchase Agreement and Ancillary Agreements. The City will punctually pay Parity Obligations in strict conformity with the tetras 55394.00011 \8819608.3 8M8 3 5 hereof and any ancillary agreement, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, and will not terminate the Installment Purchase Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of the Authority to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Authority or any force majeure, including acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lock outs, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities. The City will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Installment Purchase Agreement, including Supplements, and any Issuing Instrument relating to Parity Obligations required to be observed and performed by it, and it is expressly understood and agreed by and between the parties to the Installment Purchase Agreement that, subject to Section 10.07 hereof, each of the agreements, conditions, covenants and terms contained herein and therein is an essential and material term of the purchase of and payment for each Component by the City pursuant to, and in accordance with, and as authorized under the Constitution, laws of the State and the Charter. The City shall be unconditionally and irrevocably obligated, as long as any Installment Payment Obligations remain outstanding and unpaid, to take all lawful action necessary or required to continue to entitle the City to collect and deposit such System Revenues in the Water Revenue Fund for use as provided in this Installment Purchase Agreement, provided however, such obligation does not, in any way, limit the City's ability to undertake any and all legal actions, including any appeals, in the defense of a federal court order dictating a water system configuration other than that approved and adopted by the City. SECTION 6.02. Against Encumbrances. The City will not make any pledge of or place any lien on the Net System Revenues except as otherwise provided or permitted herein. SECTION 6.03. Debt Service Reserve Fund. The City will maintain or cause to be maintained each Reserve Fund and Reserve Account at the applicable Reserve Requirement. In the event the amount in any such fund or account falls below the applicable Reserve Requirement, the City will replenish such fund or account up to the applicable Reserve Requirement pursuant to Section 5.02. SECTION 6.04. Against Sale or Other Disposition of Property. The City will not sell, lease or otherwise dispose of the Water System or any part thereof essential to the proper operation of the Water System or to the maintenance of the System Revenues, except as provided herein. Further, the City will not, except as otherwise provided herein, enter into any agreement or lease which impairs the operation of the Water System or any part thereof necessary to secure adequate Net System. Revenues for the payment of the Parity Obligations or which would otherwise impair the rights of the Authority with respect to the System Revenues or the operation 55394.00011 \8819608.3 80Arg 36 of the Water System. Any real or personal property which has become nonoperative or which is not needed for the efficient and proper operation of the Water System, or any material or equipment which has become worn out, may be sold if such sale will not materially reduce the Net System Revenues and if the proceeds of such sale are deposited in the Water Revenue Fund. SECTION 6.05. Against Competitive Facilities. The City will not, to the extent permitted by existing law, construct, acquire, maintain or operate and will not, to the extent permitted by existing law and within the scope of its powers, permit any other public or private agency, authority, district or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any water system competitive with the Water System. SECTION 6.06. Prompt Acquisition and Construction. The City will take all necessary and appropriate steps to construct, acquire and install the Project, as agent of the Authority, with all practicable dispatch and in an expeditious manner and in conformity with law so as to complete the same as soon as possible. SECTION 6.07. Maintenance and Operation of the Water System; Budeets. The City will maintain and preserve the Water System in good repair and working order at all times and will operate the Water System in an efficient and economical manner and will pay all Maintenance and Operation Costs as they become due and payable. The City will adopt and file with the Authority, on or before the effective date hereof, a budget approved by the City Council of the City setting forth the estimated Maintenance and Operation Costs for the period from such date until the close of the then current Fiscal Year. On or before August 1, of each Fiscal Year, the City will adopt, and on or before one hundred and twenty (120) days after the beginning of the Fiscal Year, file with the Authority a budget approved by the City Council of the City setting forth the estimated Maintenance and Operation Costs for such Fiscal Year. Any budget may be amended at any time during any Fiscal Year and such amended budget shall be filed by the City with the Authority. SECTION 6.08. Amount of Rates and Charges, Rate Stabilization Fund. (a) The City hereby covenants to fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which (together with other funds accumulated from System Revenues and which are lawfully available to the City for payment of any of the following amounts during such Fiscal Year) are at least sufficient, after making allowances for contingencies and errors in estimates, to pay the following amounts in the following order: (i) all Maintenance and Operation Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) all Debt Service coming due and payable in such Fiscal Year; and (iii) all payments required to meet any other obligations of City which are charges, liens or encumbrances upon, or payable from, the Net System Revenues. 55394.00011 \8819608.3 80 L0 3% The City shall fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which are sufficient to yield Net System Revenues, at least equal to one hundred and [twenty percent (120 %)] of the amounts payable under the preceding clause (b) in such Fiscal Year. (b) The City may establish, as a fund within the Water Revenue Fund, a fund denominated the Rate Stabilization Fund. From time to time the City may deposit into the Rate Stabilization Fund, from current System Revenues, such amounts as the City shall determine and the amount of available current System Revenues shall be reduced by the amount so transferred. Amounts may be transferred from the Rate Stabilization Fund solely and exclusively to pay Maintenance and Operation Costs, and any amounts so transferred shall be deemed System Revenues when so transferred. All interest or other earnings upon amounts in the Rate Stabilization Fund may be withdrawn therefrom and accounted for as System Revenues. SECTION 6.09. Payment of Claims. The City will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien on the Net System Revenues or any part thereof or on any funds in the hands of the City or the Trustee might impair the security of the Installment Payments, but the City shall not be required to pay such claims if the validity thereof shall be contested in good faith. SECTION 6.10. Compliance with Contracts. The City will comply with, keep, observe and perform all agreements, conditions, covenants and terms, express or implied, required to be performed by it contained in all contracts for the use of the Water System and all other contracts affecting or involving the Water System to the extent that the City is a party thereto. SECTION 6.11. Insurance. (a) The City will procure and maintain or cause to be procured and maintained insurance on the Water System with responsible insurers, or provide self insurance reserves, in such amounts and against such risks (including accident to or destruction of the Water System) as are usually covered in connection with water systems similar to the Water System. In the event of any damage to or destruction of the Water System caused by the perils covered by such insurance or self insurance, the Net Proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the Water System. The City shall begin such reconstruction, repair or replacement promptly after such damage or destruction shall occur, and shall continue and properly complete such reconstruction, repair or replacement as expeditiously as possible, and shall pay out of such Net Proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same shall be completed and the Water System shall be free and clear of all claims and liens unless the City detennines that such property or facility is not necessary to the efficient or proper operation of the Water System and therefore determines not to reconstruct, repair or replace such project or facility. If such Net Proceeds exceed the costs of such reconstruction, repair or replacement, then the excess Net Proceeds shall be deposited in the Water Revenue Fund and be available for other proper uses of funds deposited in the Water Revenue Fund. 55394.0001.1 \8819608.3 80 6138 (b) The City will procure and maintain such other insurance which it shall deem advisable or necessary to protect its interests and the interests of the Authority, which insurance shall afford protection in such amounts and against such risks as are usually covered in connection with water systems similar to the Water System; provided that any such insurance may be maintained under a self - insurance program so long as such self - insurance is maintained in the amounts and manner usually maintained in connection with water systems similar to the Water System and is, in the opinion of an accredited actuary, actuarially sound. All policies of insurance required to be maintained herein shall, to extent reasonably obtainable, provide that the Authority and the Trustee shall be given thirty (30) days' written notice of any intended cancellation thereof or reduction of coverage provided thereby. SECTION 6.12. Accounting Records, Financial Statements and Other Reports. (a) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Water System, which records shall be available for inspection by the Authority and the Trustee at reasonable hours and under reasonable conditions. (b) The City will prepare and file with the Authority annually within the number of days specified below after the close of each Fiscal Year (cornmencing with the Fiscal Year ending June 30, 2014) -- (1) within 180 days, financial statements of the Water Revenue Fund for the preceding Fiscal Year prepared in accordance with generally accepted accounting principles, together with an Accountant's Report thereon; and (2) within 45 days, a detailed report as to all insurance policies maintained and self - insurance programs maintained by the City with respect to the Water System as of the close of such Fiscal Year, including the names of the insurers which have issued the policies and the amounts thereof and the property or risks covered thereby, together with a certification from the City to the Authority and the Trustee that it is in compliance with the insurance requirements hereunder. (c) The City will furnish a copy of the financial statements referred to in (b)(1) above to any Owner of the Bonds requesting a copy thereof. SECTION 6.13. Protection of Security and Rights of the Authority. The City will preserve and protect the security hereof and the rights of the Authority to the Installment Payments hereunder and will warrant and defend such rights against all claims and demands of all persons. SECTION 6.14. Payment of Taxes and Compliance with Governmental Regulations. The City will pay and discharge all taxes, assessments and other governmental charges which may hereafter be lawfully imposed upon the Water System or any part thereof or upon the System Revenues when the same shall become due. The City will duly observe and conform with all valid regulations and requirements of any governmental authority relative to the operation of the Water System or any part thereof, but the City shall not be required to comply 55394.00011 \8819608.3 80.�2- 39 with any regulations or requirements so long as the validity or application thereof shall be contested in good faith. SECTION 6.15. Collection of Rates and Charges; No Free Service. The City will have in effect at all times rules and regulations for the payment of bills for Water Service. In each case where a bill remains unpaid in whole or in part after it becomes delinquent, the City may disconnect such premises from the water service, and such premises shall not thereafter be reconnected to the water service except in accordance with City operating rules and regulations governing such situations of delinquency. The City will not permit any part of the Water System or any facility thereof to be used or taken advantage of free of charge by any authority, firm or person, or by any public agency (including the United States of America, the State and any city, county, district, political subdivision, public authority or agency thereof). SECTION 6.16. Eminent Domain Proceeds. If all or any part of the Water System shall be taken by eminent domain proceedings, then the Net Proceeds thereof shall be applied to the replacement of the property or facilities so taken, unless the City determines that such property or facility is not necessary to the efficient or proper operation of the Water System and therefore detennines not to replace such property or facilities. Any Net Proceeds of such award not applied to replacement or remaining after such work has been completed shall be deposited in the Water Revenue Fund and be available for other proper uses of funds deposited in the Water Revenue Fund. SECTION 6.17. Tax Covenants. There shall be included in each Supplement relating to Tax - Exempt Installment Payment Obligations such covenants as are deemed necessary or appropriate by Bond Counsel for the purpose of assuring that interest on such Installment Payment Obligations shall be excluded from gross income under Section 103 of the Code. SECTION 6.18. Further Assurances. The City will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Authority of the rights and benefits provided to it herein. SECTION 6.19. Operate Water System. The City will operate the Water System in an efficient and economical manner, provided that the City may remove from service on a temporary or pennanent basis such part or parts of the Water System so long as (a) Net System Revenues are equal to one hundred twenty percent (120 %) of the Debt Service for the then current Fiscal Year and for each Fiscal Year thereafter to and including the Fiscal Year during which the last Installment Payment is due as evidenced by an Engineer's Report on file with the City, and (b) the City shall have filed with the Trustee an opinion of nationally recognized Bond Counsel to the effect that the removal of such part or parts of the Water System will not adversely affect the exclusion from gross income for federal income tax purposes of the interest on Tax- Exempt Installment Payment Obligations. SECTION 6.20. Additional Covenants. The City may provide additional covenants pursuant to any Supplement, including covenants relating to any Credit Support obtained for Installment Payment Obligations; provided, however, that such additional covenants do not 55394.00011 \8819608.3 80A2,3-40 materially and adversely affect the right of Owners of Outstanding Obligations issued prior to any such Supplement. ARTICLE VII PREPAYMENT OF INSTALLMENT PAYMENTS SECTION 7.01. Prepayment of Installment Payments. Provisions may be made in any Supplement for the prepayment of Installment Payments, in whole or in part, in such multiples and in such order of maturity and from funds of any source, and with such prepayment premiums and other terms as are specified in the Supplement. Said Supplement shall also provide for any notices to be given relating to such prepayment. ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF THE AUTHORITY SECTION 8.01. Events of Default and Acceleration of Maturities. If one or more of the following Events of Default shall happen, that is to say -- (1) if default shall be made in the due and punctual payment of or on account of any Parity Obligation (other than a Qualified Swap Agreement) as the same shall become due and payable; (2) if default shall be made by the City in the performance of any of the agreements or covenants required herein to be performed by it (other than as specified in (1) above and other than any such agreements or covenants, if any, arising in connection with any Qualified Swap Agreement), and such default shall have continued for a period of sixty (60) days after the City shall have been given notice in writing of such default by the Authority; (3) if any Event of Default specified in any Supplement or Issuing Instrument shall have occurred and be continuing; or (4) if the City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property; then and in each and every such case during the continuance of such Event of Default the Authority shall upon the written request of the Owners of twenty -five percent (25 %) or more of the aggregate principal amount of all Series of Parity Installment Obligations Outstanding, voting collectively as a single class, by notice in writing to the City, declare the entire unpaid principal amount thereof and the accrued interest thereon to be due and payable immediately, 80441 55394.00011 \8819608.3 and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding; provided, that with respect to a Series of Parity Installment Obligations supported by a Credit Support Instrument, acceleration shall not be effective unless the declaration is consented to by the related Credit Provider. This subsection however, is subject to the condition that if at any time after the entire principal amount of all Series of Parity Installment Obligations and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Authority a sum sufficient to pay the unpaid principal amount of all such Series of Parity Installment Obligations and the unpaid payments of any other Parity Obligations referred to in clause (1) above due prior to such declaration and the accrued interest thereon, with interest on such overdue installments at the rate or rates applicable thereto in accordance with their terms, and the reasonable expenses of the Authority, and any and all other defaults known to the Authority (other than in the payment of the entire principal amount of the unpaid Parity Installment Obligations and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Authority or provision deemed by the Authority to be adequate shall have been made therefor, then and in every such case the Authority, by written notice to the City, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. SECTION 8.02. Application of Net System Revenues Upon Acceleration. Subject to the provisions of any Issuing Instrument, all Net System Revenues received after the date of the declaration of acceleration by the Authority as provided in Section 8.01 shall be applied as set forth in such Issuing Instrument. SECTION 8.03. Other Remedies of the Authority. The Authority shall have the right, subject to receipt of consent from any Credit Provider with respect to a particular Series of Parity Installment Obligations -- (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any councilmember, officer or employee thereof, and to compel the City or any such councilmember, officer or employee to perform and carry out its or his duties under the Law and the agreements and covenants required to be performed by it or him contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Authority; or (c) by suit in equity upon the happening of an Event of Default to require the City and its councilmembers, officers and employees to account as the trustee of an express trust. SECTION 8.04. Non - Waiver. Nothing in this article or in any other provision hereof shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the Installment Payments to the Authority at the respective due dates or upon prepayment from the Net System Revenues and the other funds herein committed for such payment, or shall affect or 55394.00011 \8819608.3 80 LS42 impair the right of the Authority, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein. A waiver of any default or breach of duty or contract by the Authority shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Authority to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Authority by the Law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Authority. If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Authority, the City and the Authority shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken. SECTION 8.05. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. ARTICLE IX DISCHARGE OF OBLIGATIONS SECTION 9.01. Dischar¢e of Obligations. If the City shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Installment Payment Obligations of a Series the interest thereon and the principal thereof and the redemption premiums, if any, thereon or if all such Outstanding Obligations shall be deemed to have been paid at the times and in the manner stipulated in the applicable Issuing Instrument, then all agreements, covenants and other obligations of the City hereunder shall thereupon cease, terminate and become void and be discharged and satisfied (but only as to such Series) except for the obligation of the City to pay or cause to be paid all sums due hereunder. ARTICLE X MISCELLANEOUS SECTION 10.01. Liability of City Limited to System Revenues. Notwithstanding anything contained herein, the City shall not be required to advance any moneys derived from any source of income other than the Net System Revenues and the other funds provided herein for the payment of the Installment Payments or for the performance of any other agreements or covenants required to be performed by it contained herein. The City may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are 80. X43 55394.00011 \88196083 derived from a source legally available for such purpose and may be legally used by the City for such purpose. The obligation of the City to make the Installment Payments is a special obligation of the City payable solely from such Net System Revenues and other funds provided for herein, and does not constitute a debt of the City or of the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction. SECTION 10.02. Benefits of Installment Purchase Agreement Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the City, the Authority or the assigns of the Authority and any Credit Provider any right, remedy or claim under or pursuant hereto, and any agreement or covenant required herein to be perfonned by or on behalf of the City or the Authority shall be for the sole and exclusive benefit of the other Ply SECTION 10.03. Amendments. This Agreement may be amended with respect to a Series of Installment Payment Obligations in writing as may be mutually agreed by the City and the Authority, with the written consent of any Credit Provider which is providing insurance until the final maturity or payment in full of one or more maturities of such Installment Payment Obligations, or any other Credit Provider for such Installment Payment Obligations and the Owners of a majority in aggregate principal amount of such Installment Payment Obligations then Outstanding, provided that no such amendment shall (a) extend the payment date of any Installment Payment, or reduce the amount of any Installment Payment without the prior written consent of the Owner of each Obligation so affected, or (b) reduce the percentage of Installment Payment Obligations the consent of the Owners of which is required for the execution of any amendment of this Installment Purchase Agreement. With the written consent of any Credit Provider, this Agreement and the rights and obligations of the City and the Authority hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution by the City and the Authority, without the written consents of any Owner of Installment Obligations, but only to the extent permitted by law and only upon receipt of an unqualified opinion of nationally recognized Bond Counsel selected by the City and approved by the Authority to the effect that such amendment or supplement is permitted by the provisions of this Agreement and is not inconsistent with this Agreement and does not adversely affect the exclusion of the interest portion of the Ins01 linent Payments received by the Owners from gross income for federal income tax plu poses, and only for any one or more of the following purposes (1) to add to the covenants and agreements of the Authority or the City contained in this Agreement other covenants and agreements thereafter to be observed or to surrender any right or power herein reserved to or conferred upon the Authority or the City, and which shall not adversely affect the interests of the Owners of the Installment Payment Obligations; (2) to cure, correct or supplement any ambiguous or defective provision contained in this Agreement or in regard to questions arising under this Agreement, as the 8M744 55394.00011 \8819608.3 % Authority or the City may deem necessary or desirable and which shall not adversely affect the interests of the Owners of the Installment Payment Obligations; and (3) to make such other amendments or modifications which shall not materially adversely affect the interests of the Owners of the Installment Payment Obligations. SECTION 10.04. Successor Is Deemed Included in all References to Predecessor. Except as otherwise provided herein, whenever either the City or the Authority is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the City or the Authority, and all agreements and covenants required hereby to be performed by or on behalf of the City or the Authority shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. SECTION 10.05. Waiver of Personal Liabili ty. No official, officer or employee of the City shall be individually or personally liable for the payment of the Installment Payments, but nothing contained herein shall relieve any official, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby. SECTION 10.06. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the City or the Authority shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. SECTION 10.07. Assignment. The Installment Purchase Agreement and any rights hereunder may be assigned by the Authority, as a whole or in part, without the necessity of obtaining the prior consent of the City. The assignment of the Installment Purchase Agreement or rights hereunder or under a Supplement to a Trustee is solely in its capacity as Trustee and the duties, powers and liabilities of the Trustee in acting hereunder shall be subject to the provisions of the Issuing Instrument, SECTION 10.08. Net Contract. The Installment Purchase Agreement shall be deemed and construed to be a net contract, and the City shall pay absolutely net during the term hereof the Installment Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or setoff whatsoever. SECTION 10.09. California Law. The Installment Purchase Agreement shall be construed and governed in accordance with the laws of the State. SECTION 10.10. Notices. All written notices to be given hereunder shall be given by first class mail, postage prepaid, courier or hand delivery to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely: 55394.00011 \8819608.3 80 LB45 If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attn: Department of Finance If to the Authority: Santa Ana Financing Authority 20 Civic Center Plaza Santa Ma, CA 92701 Attn: Executive Director SECTION 10.11. Effective Date. The Installment Purchase Agreement shall become effective as to Installment Payments provided for in a Supplement upon the execution and delivery of such Supplement or as otherwise specified therein, and shall terminate as to such Supplement when the Installment Payments contemplated by such Supplement shall have been fully paid or prepaid (or provision for the payment thereof shall have been made as provided herein). SECTION 10.12. Execution in Counterparts. The Installment Purchase Agreement and each Supplement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 55394.00011 \8819608.3 80 6946 IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above. ATTEST: Cleric of the Council APPROVED AS TO FORM: City Attorney CITY OF SANTA ANA Executive Director SANTA ANA FINANCING AUTHORITY Executive Director ATTEST: Secretary APPROVED AS TO FORM: Authority Counsel 80P3 -47 55394.00011 \8819608.3 0 EXHIBIT A DESCRIPTION OF ENTIRE PROJECT Pursuant to Section 3.02 of the Installment Purchase Agreement, this Exhibit A may be amended from time to time and at any time to modify or amend the description of the Project, to eliminate any part thereof and /or to substitute a Project or Projects, all without obtaining any consent, by filing an amended Exhibit A with the Authority and the Trustee; provided however, that no such amendment shall in any way impair the obligations of the City contained in any Supplement executed and delivered prior to any such amendment. 80 55394.00011 \8819608.3 A_48 1 • 1 � � � l EXHIBIT 2 First Supplement to Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. FOODIA&T11 FIRST SUPPLEMENT TO MASTER INSTALLMENT PURCHASE AGREEMENT by and between the CITY OF SANTA ANA and the SANTA ANA FINANCING AUTHORITY Dated as of August 1, 2014 Relating to Installment Payments Secured by the Water Revenue Fund of the City of Santa Ana, California 55394.00011 \8752854.4 80A -51 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND AMENDMENTS ........................... ............................... 2 Section1.01. Definitions ............................................................. ............................... 2 Section 1.02. Definitions in Agreement and Indenture ............... ............................... 3 ARTICLE II REPRESENTATIONS AND WARRANTIES ................. ............................... 3 Section 2.01. The City hereby snakes the following representations: ........................ 3 Section 2.02. The Authority hereby makes the following representations and warranties: ............................................................................................ 4 ARTICLE III PURCHASE OF PROJECT BY, AND SALE THEREOF TO, THE AUTHORITY; PAYMENT .............................................. ............................... 4 Section 3.01. Purchase and Sale of Project ................................. ............................... 4 Section3.02. Payment ................................................................. ............................... 4 ARTICLE IV PURCHASE OF PROJECT BY, AND SALE THEREOF TO, THE CITY; PAYMENT ............................................................ ............................... 5 Section 4.01. Purchase and Sale of Project ................................. ............................... 5 Section 4.02. The City agrees to pay as Component Installment Payments, solely from Net System Revenues as provided in the Agreement, the following: ................................................................... 5 Section 4.03. The Component Installment Payments specified herein are Parity Installment Obligations .............................. ............................... 5 ARTICLE V PREPAYMENT AND REDEMPTION ........................... ............................... 5 Section 5.01. Prepayment and Redemption ................................ ............................... 5 ARTICLE VI ADDITIONAL COVENANTS ........................................ ............................... 6 Section 6.01. Additional Covenants ............................................ ............................... 6 ARTICLE VII MISCELLANEOUS ......................................................... ............................... 7 Section 7.01. Liability of City Limited ....................................... ............................... 7 Section 7.02. Limitation of Rights .............................................. ............................... 7 Section7.03. Assignment ........................................................... ............................... 7 Section7.04. Notices .................................................................. ............................... 7 Section 7.05. Waiver of Personal Liability ................................. ............................... 8 Section 7.06. Article and Section Headings, Gender and References ....................... 8 Section 7.07. Partial Invalidity .................................................... ............................... 8 Section 7.08. Law Governing ..................................................... ............................... 9 Section 7.09. Execution in Counterparts ..................................... ............................... 9 EXHIBIT A — THE PROJECT ................................................................... ............................... A -1 55394.00011 \8752854.4 80A'-52 FIRST SUPPLEMENT TO MASTER INSTALLMENT PURCHASE AGREEMENT This FIRST SUPPLEMENT TO MASTER INSTALLMENT PURCHASE AGREEMENT, made and entered into as of August 1, 2014 (this "Supplement "), by and between the CITY OF SANTA ANA, a charter city and municipal corporation organized and existing under and by virtue of the Constitution and the laws of the State of California and its Charter (the "City "), and the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority and public entity duly organized and existing tinder and by virtue of the State of California (the "Authority"); WITNESSETH: WHEREAS, the City previously financed the acquisition, construction and installation of certain improvements to its Water System (the "Project ") (capitalized terms used herein shall have the meanings given such teens in Section 1.01) through the incurrence of certain Prior Obligations, defined herein. WHEREAS, the City desires to finance and refinance the Project by prepaying the Prior Obligations; WHEREAS, concurrently with the prepayment of the Prior Obligations, the City will reacquire the Project and will resell the Project to the Authority and then repurchase the Project from the Authority pursuant to this Supplement; WHEREAS, the City and the Authority have heretofore entered into a Master Installment Purchase Agreement, dated as of August 1, 2014 (the "Agreement "), pursuant to which the Authority has agreed to provide the Project and any Components thereof to the City and the City has agreed from time to time to purchase the Project and /or Components thereof as are specified in a Supplement, and has declared the conditions and terms upon which obligations such as installment payments (the "Component Installment Payments "), and the interest thereon, are to be incurred and secured; WHEREAS, the Authority proposes to assign without recourse certain of its rights under and pursuant to this Supplement to The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "); WHEREAS, in consideration of such assignment and the execution and entering into of the Indenture, dated as of the date hereof, by and between the Trustee and the Authority, the Authority has agreed to issue its Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Component Obligation Series 2014 "); WHEREAS, a portion of the proceeds of the Component Obligation Series 2014 will be used to provide for the prepayment of the Prior Obligations; and 80A -53 55394.00011 \8752854.4 1 WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Supplement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Supplement; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I DEFINITIONS AND AMENDMENTS SECTION 1.01. Definitions. All of the definitions contained in the Agreement shall apply to this Supplement except as otherwise expressly provided. In addition, the following terms are defined herein. "Closing Date" means 2014. "Components" means the components of the Project specified in Exhibit A hereto for which the City will be making Installment Payments as hereinafter specified. "Component Installment Payments" means the Installment Payments herein specified which are to pay the Purchase Price of the Components. "Component Obligation Series 2014" means the Santa Ana Financing Authority Water Revenue Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues). "First Supplement" means this First Supplement to Master Installment Purchase Agreement, by and between the City and the Authority, dated as of August 1, 2014, securing the 2014 Bonds. "Indenture" means the Indenture, dated as of August 1, 2014, by and between the Trustee and the Authority, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms. "Person" means an individual, corporation, limited liability company, film, association, partnership, trust or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof. "Prior Installment Agreement" means the Master Installment Purchase Agreement, dated as of February 1, 2004, as supplemented by the First Supplement to Master Installment Purchase Agreement, dated as of February 1, 2004, each by and between the City and the Authority and securing the payment of the Prior Obligations. 80A -54 55394.00011 \8752854.4 2 "Prior Obligations" means the Santa Ana Financing Authority Water Revenue Bonds, Series 2004 (Payable Solely from Installment Payments Secured by Water System Net Revenues). "Trustee" means The Bank of New York Mellon Trust Company, N.A., and its successors or assigns, or any successor trustee. SECTION 1.02. Definitions in Agreement and Indenture. Except as otherwise herein defined and unless the context otherwise requires, the terms defined in the Agreement or the Indenture shall for all purposes hereof and of any amendment hereof or supplement hereto and of any report or other document mentioned herein, have the meanings defined therein, such definitions to be equally applicable to both the singular and plural forms of any of the terms defined therein. With respect to any defined term which is given a different meaning under this Supplement than under the Agreement or the Indenture, as used herein it shall have the meaning given herein. ARTICLE II REPRESENTATIONS AND WARRANTIES SECTION 2.01. The City hereby makes the following representations: (a) The City is a charter city and municipal corporation of the State, duly organized and validly existing pursuant to the provisions of the Constitution and the laws of the State and its Charter. (b) The City has full legal right, power and authority to enter into this Supplement and carry out its obligations hereunder, to carry out and consummate all transactions contemplated by this Supplement, and the City has complied with the provisions of the Constitution and the laws of the State and its Charter in all matters relating to such transactions. The execution and delivery of this Supplement is not subject to any voter approval requirement contained in Section 602 of the Charter. (c) By proper action, the City has duly authorized the execution, delivery and due performance of this Supplement. (d) The execution and delivery of this Supplement and the consummation of the transactions herein contemplated will not violate any provision of law, any order of any court or other agency of government, or any indenture, material agreement or other instrument to which the City is now a party or by which it or any of its properties or assets is bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the passage of time or both) under any such indenture, agreement or other instrument, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the City. (e) The City has determined that it is necessary and proper for the City uses and purposes within the terms of the Constitution and the laws of the State and its Charter and that FORAM 55394.00011 \8752854.4 the City refinance the Project in the manner provided for in this Supplement, in order to provide essential services and facilities to the persons residing in the City. SECTION 2.02. The Authority hereby snakes the following representations and warranties: (a) The Authority is a joint exercise of powers authority and public entity organized and existing under the laws of the State. (b) The Authority has full legal right, power and authority to enter into this Supplement and to carry out its obligations hereunder and to carry out and consummate all transactions contemplated by this Supplement. (c) By proper action, the Authority has duly authorized the execution, delivery and due performance of this Supplement. (d) The execution and delivery of this Supplement and the consummation of the transactions herein contemplated will not violate any provision of law, any order of any court or other agency of government, or any indenture, material agreement or other instrument to which the Authority is now a party or by which it or any of its properties or assets is bound, or be in conflict with, result in a breach of or constitute a default (with due notice or the passage of time or both) under any such indenture, agreement or other instrument, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority. (e) The interest components of Component Installment Payments will not be includable in the gross income of the owners of such Component Installment Payments for federal income tax proposes. ARTICLE III PURCHASE OF PROJECT BY, AND SALE THEREOF TO, THE AUTHORITY; PAYMENT SECTION 3.01. Purchase and Sale of Proieet. Upon prepayment of the Prior Obligations and the discharge of the City's obligations under the First Installment Agreement, the City represents and warrants that it is the sole and exclusive owner of the Project. The Authority hereby purchases from the City, and the City hereby sells to the Authority, the Project in accordance with the provisions of this Supplement. All right, title and interest in the Project shall immediately vest in the Authority on the Closing Date without further action on the part of the Authority or the City. SECTION 3.02. Payment. On the Closing Date, the Authority shall pay to the City, as and for the purchase price of the Project, the amount of $ , which amount shall be paid from the proceeds of the Component Obligation Series 2014. 80A -56 55394.0001 1\8752854.4 4 ARTICLE IV PURCHASE OF PROJECT BY, AND SALE THEREOF TO, THE CITY; PAYMENT SECTION 4.01. Purchase and Sale of Project. The City hereby purchases from the Authority, and the Authority hereby sells to the City, the Project in accordance with the provisions of this Supplement. On the Closing Date, immediately subsequent to the vesting of all right, title and interest in the Project in the Authority pursuant to Section 2.01 hereof, all right, title and interest in the Project shall vest in the City without further action on the part of the City or the Authority SECTION 4.02. The City agrees to pay as Component Installment Payments, solely from Net Systern Revenues as provided in the Agreement, the following: Interest Portion of Installment Installment Payment Date Payments Principal Portion of Total Component Installment Installment Payments Payments SECTION 4.03. The Component Installment Payments specified herein are Parity Installment Obligations. ARTICLE V PREPAYMENT AND REDEMPTION SECTION 5.01. Prepayment and Redemption. The City shall have the following rights and duties to prepay Component Installment Payments: The Component Installment Payments are subject to prepayment, at the option of the City, upon at least 45 days prior written notice to the Authority specifying the date and amount of such prepayment, on or after September 1, , at the following prepayment prices (expressed as a percentage of the Principal Portion of Component Installment Payments to be prepaid) plus the unpaid Interest Portion of Component of Installment Payments up to the date fixed for prepayment: 80A -57 55394.00011 \8752854.4 5 Prepayment Price Prepayment Period (percentage of (dates inclusive) principal portion) September 1, through August 31, % September 1, through August 31, September 1, and thereafter ARTICLE VI ADDITIONAL COVENANTS SECTION 6.01. Additional Covenants. In addition to the covenants specified in the Agreement, the following additional covenants are added with respect to the Component Obligation Series 2014: The City will not directly or indirectly use or permit the use of any proceeds of the Component Obligation Series 2014 or any other funds of the City or of the Project or take or omit to take any action that would cause the Component Obligation Series 2014 to be "private activity bonds" within the meaning of Section 141 of the Code, or obligations which are "federally guaranteed" within the meaning of Section 149(b) of the Code. The City covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest represented by the Component Obligation Series 2014 under Section 103 of the Code. The City will not directly or indirectly use or permit the use of any proceeds of the Component Obligation Series 2014 or any other funds of the City, or take or omit to take any action, that would cause the Component Obligation Series 2014 to be "arbitrage bonds" within the meaning of Section 148(a) of the Code. To that end, the City will comply with all requirements of Section 148 of the Code to the extent applicable to the Component Obligation Series 2014. In the event that at any time the City is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on the investment of any moneys held by the Trustee under the Indenture or otherwise, the City shall so instruct the Trustee in writing, and shall cause the Trustee to take such action as may be necessary in accordance with such instructions. Without limiting the generality of the foregoing, the City agrees that there shall be paid from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and any temporary, proposed or final Treasury Regulations as may be applicable to the Component Obligation Series 2014 from time to time. This covenant shall survive payment in fall or defeasance of the Component Obligation Series 2014. The City specifically covenants to pay or cause to be paid to the United States of America at the times and in the amounts determined under this Section the Rebate Requirement, as described in the Tax Certificate and to otherwise comply with the provisions of the Tax Certificate executed by the City in connection with the execution and delivery of the Component Obligation Series 2014. Notwithstanding any provision of this Section, if the City shall provide to the Trustee an opinion of nationally recognized Bond Counsel to the effect that any action required under this 80A -58 55394,00011\8952854.4 6 Section is no longer required, or to the effect that some further action is required, to maintain the exclusion from gross income of the interest on the Component Obligation Series 2014 pursuant to Section 103 of the Code, the Trustee may rely conclusively on such opinion in complying with the provisions hereof, and the covenants hereunder shall be deemed to be modified to that extent. ARTICLE VII MISCELLANEOUS SECTION 7.01. Liability of City Limited. Notwithstanding anything contained herein, the City shall not be required to advance any moneys derived from any source of income other than Net System Revenues and the other funds provided herein for the payment of the Component Installment Payments, and the interest thereon, and other payments required to be made by it hereunder, or for the performance of any agreements or covenants required to be performed by it contained herein. The City may, however, but in no event shall be obligated to, advance moneys for any such purpose so long as such moneys are derived from a source legally available for such purpose and may be legally used by the City for such purpose. The obligation of the City to pay the Component Installment Payments, and the interest thereon, and other payments required to be made by it hereunder is a special obligation of the City payable, in the manner provided herein, solely from Net Revenues and other funds provided for herein, and does not constitute a debt of the City or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the City or the State, or any political subdivision thereof, is pledged to the payment of the Component Installment Payments, or the interest thereon, or any other payments required to be made hereunder. SECTION 7.02. Limitation of Rights. Nothing in this Supplement expressed or implied is intended or shall be construed to give to any Person other than the City, the Authority and the Trustee, as assignee of the Authority, any legal or equitable right, remedy or claim under or in respect of this Supplement or any covenant, condition or provision therein or herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Authority and the Trustee, as assignee of the Authority. SECTION 7.03. Assignment. The City and the Authority hereby acknowledge the transfer, conveyance and assignment by the Authority to the Trustee of all of the Authority's rights, title and interest under this Supplement, including the right to receive Component Installment Payments, and the interest thereon, from the City, pursuant to the Indenture. SECTION 7.04. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: 80A -59 55394.00011 \8752854.4 7 If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attn: Department of Finance If to the Authority: Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA 92701 Attn: Executive Director If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 South Hope Street, Suite 500 Los Angeles, California 90071 Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section. Any notice to be given to or by the Authority hereunder shall, upon the assignment of the Authority's rights hereunder to the Trustee, also be given to or by the Trustee. SECTION 7.05. Waiver of Personal Liability. No official, officer or employee of the City shall be individually or personally liable for the payment of the Component Installment Payments, or the interest thereon, or other payments required to be made by the City hereunder, but nothing contained herein shall relieve any official, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby. SECTION 7.06. Article and Section Headines, Gender and References. The headings or titles of the several Articles and Sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, constriction or effect hereof, and words of any gender shall be deemed and construed to include all genders. All references herein to "Articles," "Sections" and other subsections or clauses are to the corresponding articles, sections, subsections or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith" and other words of similar import refer to this Supplement as a whole and not to any particular Article, Section, subdivision or clause hereof SECTION 7.07. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the City or the Authority shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. 80A -60 55394.00011 \8752854.4 8 SECTION 7.08. Law Governing. This Supplement shall be construed and governed in accordance with the laws of the State. SECTION 7.09. Execution in Counterparts. This Supplement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. 1 M 55394,00011 \8752854.4 IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment Purchase Agreement by their officers thereunto duly authorized as of the day and year first written above. CITY OF SANTA ANA ATTEST: Clerk of the Council City Attorney City Manager SANTA ANA FINANCING AUTHORITY Lo Executive Director ATTEST: Secretary APPROVED AS TO FORM: Authority Counsel 80A -62 55394.0001.1 \8752854.4 10 EXHIBIT A THE PROJECT The acquisition, installation, and construction of water facilities of the City. 55394.00011 \8752854.4 �� A-700 lO ' A I I EXHIBIT 3 Indenture between the Santa Ana Financing Authority and the Bank of Mellon Trust Company, N.A. .•R' • INDENTURE between the SANTA ANA FINANCING AUTHORITY And THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. as Trustee Dated as of August 1, 2014 Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) 55394.00011 \8754149.4 80A_66 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; EQUAL SECURITY ............................. ............................... 2 Section 1.01. Definitions ............................................................. ............................... 2 Section 1.02. Equal Security ..................................................... ............................... 11 Section 1.03. Number, Gender and Variants ............................ ............................... 11 Section 1.04. Articles, Sections, Etc ......................................... ............................... 11 ARTICLE II ISSUANCE OF 2014 BONDS; REGISTRATION AND TRANSFER OFBONDS ..................................................................... ............................... 12 Section 2.01. Authorization and Purpose of 2014 Bonds ......... ............................... 12 Section 2.02. Execution of 2014 Bonds .................................... ............................... 12 Section 2.03. Transfer and Payment of Bonds .......................... ............................... 12 Section 2.04. Exchange of Bonds ............................................. ............................... 13 Section 2.05. Bond Registration Books .................................... ............................... 13 Section 2.06. Mutilated, Destroyed, Stolen or Lost Bonds ....... ............................... 13 Section 2.07. Temporary Bonds ................................................ ............................... 14 Section 2.08. Validity of Bonds ................................................ ............................... 14 Section 2.09. Book -Entry System ............................................. ............................... 14 Section 2.10. Procedure for Issuance of 2014 Bonds ............... ............................... 17 ARTICLE III TERMS OF 2014 BONDS ............................................. ............................... 17 Section 3.01. Terms of 2014 Bonds .......................................... ............................... 17 Section 3.02. Redemption of 2014 Bonds ................................ ............................... 18 Section 3.03. Form of 2014 Bonds ........................................... ............................... 19 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS ...................... ............................... 20 Section 4.01. Conditions for the Issuance of Additional Bonds .............................. 20 Section 4.02. Procedure for the Issuance of Additional Bonds ............................... 21 ARTICLE V ESTABLISHMENT OF FUNDS; DEPOSIT AND APPLICATION OFPROCEEDS .............................................................. ............................... 22 Section 5.01. Establishment of Funds and Accounts ................ ............................... 22 Section 5.02. Application of Proceeds ...................................... ............................... 22 Section 5.03. Use of Moneys in the Acquisition Fund; Costs of Issuance Fund.................................................................... ............................... 23 ARTICLEVI REVENUES .................................................................... ............................... 24 Section 6.01. Pledge of Revenues ............................................. ............................... 24 Section 6.02. Receipt and Deposit of Revenues in the Payment Fund .................... 24 Section 6.03. Establishment and Maintenance of Accounts for Use of Money inthe Payment Fund ........................................... ............................... 24 Section 6.04. Investment of Moneys in Funds and Accounts ... ............................... 26 55394.00011 \8754149.4 80A'-67 TABLE OF CONTENTS (continued) ARTICLE VII COVENANTS OF THE AUTHORITY ................ Page ................. 27 Section 7.01. Punctual Payment and Performance ................... ............................... 27 Section 7.02. Tax Covenants; Rebate Fund .............................. ............................... 27 Section 7.03. Eminent Domain ................................................. ............................... 28 Section 7.04. Accounting Records and Reports ........................ ............................... 29 Section 7.05. The City's Budgets ............................................. ............................... 29 Section 7.06. Installment Purchase Agreement and Other Documents ................... 29 Section 7.07. Other Liens .......................................................... ............................... 29 Section 7.08. Prosecution and Defense of Suits ....................... ............................... 30 Section 7.09. Further Assurances .............................................. ............................... 30 Section 7.10. Maintenance of Existence ................................... ............................... 30 Section 7.11. Continuing Disclosure ........................................ ............................... 30 ARTICLE VIII THE TRUSTEE ................................................................ .............................31 Section 8.01. Appointment and Acceptance of Duties ............. ............................... 31 Section 8.02. Duties, Immunities and Liabilities of Trustee ..... ............................... 31 Section 8.03. Merger or Consolidation ..................................... ............................... 33 Section 8.04. Compensation ..................................................... ............................... 33 Section 8.05. Liability of Trustee ............................................. ............................... 33 Section 8.06. Right to Rely on Documents ............................... ............................... 34 Section 8.07. Preservation and Inspection of Documents ......... ............................... 35 ARTICLE IX AMENDMENT OF THE INDENTURE ........................ ............................... 35 Section 9.01. Amendment of the Indenture .............................. ............................... 35 Section 9.02. Disqualified Bonds .............................................. ............................... 36 Section 9.03. Endorsement or Replacement of Bonds After Amendment .............. 36 Section 9.04. Amendment by Mutual Consent ......................... ............................... 36 ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF HOLDERS ....................... 36 Section 10.01. Events of Default and Acceleration of Maturities ............................. 36 Section 10.02. Proceedings by Trustee ....................................... ............................... 37 Section 10.03. Effect of Discontinuance or Abandonment ......... ............................... 38 Section 10.04. Rights of Owners ................................................ ............................... 38 Section 10.05. Restriction on Owners' Action ........................... ............................... 38 Section 10.06. Power of Trustee to Enforce ............................... ............................... 39 Section 10.07. Remedies Not Exclusive ..................................... ............................... 39 Section 10.08. Waiver of Events of Default; Effect of Waiver .. ............................... 39 Section 10.09. Application of Moneys ....................................... ............................... 39 ARTICLEXI DEFEASANCE ............................................................... ............................... 41 Section 11.01. Discharge of Bonds ............................................... .............................41 Section 11.02. Unclaimed Money ............................................... ............................... 42 55394.00011 \8754149A 80A-68 TABLE OF CONTENTS (continued) Page ARTICLE XII MISCELLANEOUS ....................................................... ............................... 42 Section 12.01. Liability of Authority Limited to Revenues ........ ............................... 42 Section 12.02. Benefits of Indenture Limited to Parties ............. ............................... 43 Section 12.03. Successor Is Deemed Included In All References To Predecessor......................................................... ............................... 43 Section 12.04. Execution of Documents by Owners .................. ............................... 43 Section 12.05. Waiver of Personal Liability ............................... ............................... 43 Section 12.06. Acquisition of Bonds by Authority ..................... ............................... 44 Section 12.07. Destruction of Cancelled Bonds ......................... ............................... 44 Section 12.08. Content of Certificates ........................................ ............................... 44 Section 12.09. Accounts and Funds ............................................ ............................... 44 Section 12.10. Partial Invalidity .................................................... .............................44 Section 12.11. Execution in Counterparts ................................... ............................... 45 Section 12.12. Law Governing ................................................... ............................... 45 Section12.13. Notices ................................................................ ............................... 45 EXHIBIT A — FORM OF 2014 BOND ......................................................... ............................A -1 55394.00011 \8754149.4 80A-- 69 INDENTURE THIS INDENTURE, made and entered into as of August 1, 2014, by and between the SANTA ANA FINANCING AUTHORITY, a California joint exercise of powers authority and public entity duly organized and existing under and by virtue of the laws of the State of California (the "Authority "), and The Bank of New York Mellon Trust Company, N.A., a banking corporation organized and existing under and by virtue of the laws of the State of California, as trustee (the "Trustee "); WITNESSETH: WHEREAS, the Authority was incorporated to provide financial assistance to the City of Santa Ana (the "City "); WHEREAS, the City desires from time to time to acquire, construct, install and improve its water system as more fully described in Exhibit A to the Master hnstallment Purchase Agreement, dated as of August 1, 2014 (the "Installment Purchase Agreement'), by and between the City and the Authority, and as modified in accordance with the provisions thereof (the "Project'); WHEREAS, concurrently with the prepayment of the Prior Obligations defined herein, the City will reacquire the Project and will resell the Project to the Authority and then repurchase the Project from the Authority pursuant to the provisions of the Installment Purchase Agreement and First Supplement to Master Installment Purchase Agreement (the "First Supplemental Agreement'), dated as of the date hereof; WHEREAS, to provide funds for the purchase of the Project, in order that the Project or Components thereof may be sold to the City pursuant to the Installment Purchase Agreement, the Authority desires to issue its Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "2014 Bonds "), in the aggregate principal amount of $ ; WHEREAS, the 2014 Bonds will be secured by the payments to be made by the City pursuant to the Installment Purchase Agreement as supplemented by the First Supplemental Agreement; WHEREAS, in order to provide for the authentication and delivery of the 2014 Bonds and any additional bonds issued hereunder (the 2014 Bonds and any such additional bonds being collectively referred to as the "Bonds "), to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, the Authority has determined that all acts and proceedings required by law necessary to make the Bonds, when issued and executed by the Authority and authenticated and delivered by the Trustee, the valid, binding and legal limited obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth 55394,00011 \8754149.4 8 O 1_7 O in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of the principal of, premium, if any, and interest on all Bonds at any time issued and outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective owners from time to time of the Bonds, as follows: ARTICLE I DEFINITIONS; EQUAL SECURITY SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall, for all purposes of this Indenture and of any Supplemental Indenture, have the meanings set forth below: "Acquisition Costs" means all costs of acquiring, constructing, installing or improving the Project, including but not limited to: (i) all costs which the Authority or the City shall be required to pay to a manufacturer, vendor or contractor or any other person under the terms of any contract or contracts for the acquisition, construction, installation or improvement of the Project; (ii) obligations of the Authority or the City incurred for labor and materials (including obligations payable to the Authority or the City for actual out -of- pocket expenses of the Authority or the City) in connection with the acquisition, construction, installation or improvement of the Project, including reimbursement to the Authority or the City for all advances and payments made in connection with the Project prior to or after delivery of the Bonds; (iii) the costs of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect during the course of acquisition, construction, installation or improvement of the Project; (iv) all costs of engineering and architectural services, including the actual out - of- pocket costs of the Authority or the City for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees and sales commissions, and for supervising acquisition, construction, installation and improvement, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction, installation or improvement of the Project; and (v) any sums required to reimburse the Authority or the City for advances made by the Authority or the City for any of the above items or for any other costs incurred and 55394.00011 \8754149.4 80he G_71 for work done by the Authority or the City which are properly chargeable to the acquisition, construction, installation or improvement of the Project. "Acquisition Fund" means the fund by that name established under Section 5.01(d) hereof "Additional Bonds" means all revenue bonds of the Authority which are secured by Installment Payments authorized by and at any time Outstanding pursuant hereto and executed, issued and delivered in accordance with Article 4 hereof. "Annual Debt Service" means, for any Fiscal Year, the sum of (1) the interest payable on all Outstanding Bonds in such Fiscal Year, assuming that all Outstanding Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid from sinking fund payments as scheduled (except to the extent that such interest is to be paid from the proceeds of the sale of any Bonds), (2) the principal amount of all Outstanding Serial Bonds maturing by their terms in such Fiscal Year, and (3) the principal amount of all Outstanding Term Bonds required to be redeemed or paid in such Fiscal Year (together with the redemption premiums, if any, thereon). "Authority" means the Santa Ana Financing Authority, a California joint exercise of powers authority and public entity duly organized and existing under and by virtue of the laws of the State, and its successors or assigns. "Authorized Denominations" means $5,000 and any integral multiple thereof. "Beneficial Owners" means those individuals, partnerships, corporations or other entities for whom the Participants have caused the Depository to hold Book -Entry Bonds. "Board" means the Board of Directors of the Authority. "Bond Counsel" means any attorney at law or film of attorneys, of nationally recognized standing in matters pertaining to the validity of, and exclusion from gross income for federal income tax purposes of interest on, bonds issued by states and political subdivisions and duly admitted to practice law before the highest court of any state of the United States and acceptable to the Authority. "Bonds" means the 2014 Bonds and all Additional Bonds. "Book -Entry Bonds" means any Bonds which are then held in book -entry form by a Securities Depository as provided in Section 2.09. "Business Day" means a day of the year which is not a Saturday or Sunday, or a day on which banking institutions located in California are required or authorized to remain closed, or on which the New York Stock Exchange is closed. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Indenture, shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day, with the same force and effect as if done on the 55394.00011 \87541.49.4 8U 3_72 nominal date provided in this Indenture, and, unless otherwise specifically provided this Indenture, no interest shall accrue for the period from and after such nominal date. "Certificate of Completion" means a Certificate of the City filed with the Trustee, stating that the Components of the Project being financed with the proceeds of Bonds have been acquired, constructed, installed and improved and that all Acquisition Costs have been paid or provided for. "Certificate of the Authority" means an instrument in writing signed by the President, the Vice President, the Secretary or any Assistant Secretary of the Authority, or by any other officer of the Authority duly authorized by the Authority for that purpose. "Certificate of the City" means an instrument in writing signed by the Mayor, City Manager, Assistant City Manager, or Treasurer of the City, or by any other official of the City duly authorized by the City for that purpose. "Charter" means the Charter of the City as it now exists or may hereafter be amended, and any new or successor Charter. "City" means the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution, the laws of the State and its Charter. "Closing Date" means , 2014. "Code" means the Internal Revenue Code of 1986, as amended, and the regulations thereunder, and any successor laws or regulations. "Continuing Disclosure Certificate" means the Continuing Disclosure Certificate, dated as of the date hereof, executed by the Authority, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. "Corporate Trust Office of the Trustee" means the principal corporate trust office of the Trustee in Los Angeles, California or such other or additional offices as may be specified to the Authority by the Trustee in writing. "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the City or the Authority relating to the issuance, sale and delivery of the Bonds and the execution and delivery of this Indenture, the Installment Purchase Agreement and the Supplement, filing and recording costs, settlement costs, printing costs, reproduction and binding costs, initial fees and charges of the Trustee (including legal fees), legal fees and charges, insurance fees and charges, financial and other professional consultant fees, fees and charges of rating agencies and /or for credit ratings and fees in connection with the foregoing. "Costs of Issuance Fund" shall have the meaning given to such term in Section 5.01. 55394.00011 \8754149.4 80A4-73 "Defeasance Securities" means, to the extent permitted by State law, the following obligations which may be used as permitted investments to defease Outstanding Bonds: (1) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation). (2) U.S. Treasury Certificates, Notes and Bonds (including State and Local Government Series — "SLGs "). (3) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America. (4) The interest component of Resolution Funding Corporation (REFCORP) strips which have been stripped by request to the Federal Reserve Bank of New York in book entry form. (5) Pre - refunded municipal bonds rated "Aaa" by Moody's and "AAA" by Standard & Poor's. If the issue is rated solely by Standard & Poor's, the pre - refunded bonds must have been pre - refunded with cash, direct U.S. or U.S. guaranteed obligations, or AAA rated pre - refunded mmiicipal bonds. (6) Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America. a. U.S. Export-Import Bank (Eximbank) Direct obligations or fully guaranteed certificates of beneficial ownership b. Fanners Home Administration (FmHA Certificates of beneficial ownership C. Federal Financing Bank d. General Services Administration Participation certificates e. U.S. Maritime Administration Guaranteed Title XI financing f U.S. Department of Housing and Urban Development Project Notes Local Authority Bonds New Communities Debentures U.S. Public Housing Notes and Bonds "Depository" means the securities depository acting as Depository pursuant to "DTC" means The Depository Trust Company, New York, New York, and its successors. 55394.000t 1\8754t49.4 8U J_74 "Escrow Agreement" means that certain Escrow Agreement, dated as of August 1, 2014, by and among the City, the Authority and the Escrow Agent, as the same may be amended from time to time, relating to the Santa Ana Financing Authority Water Revenue Bonds, Series 2004 (Payable Solely from Installment Payments Secured by Water System Net Revenues). "Escrow Agent" means The Bank of New York Mellon Trust Company, N.A., or any successor thereto tinder the Escrow Agreement. "Event of Default" shall have the meaning set forth in Section 10.01 hereof. "Financial Newspaper" means The Wall Street Journal or The Bond Buyer or any other newspaper or journal printed in the English language publishing financial news and selected by the Trustee, whose decision shall be final and conclusive. "Fiscal Year" means the fiscal year of the Authority which, as of the date hereof, is the period from July 1 to and including the following June 30. "Indenture" means this Indenture, dated as of August 1, 2014, between the Authority and the Trustee, as originally executed and as it may from time to time be amended or supplemented by all Supplemental Indentures executed pursuant to the provisions hereof. "Information Services" means "EMMA" or the "Electronic Municipal Market Access" system of the Municipal Securities Rulemaking Board; or, in accordance with then - current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the Successor Agency may designate in a Written Certificate of the Successor Agency delivered to the Trustee. "Installment Payments" means the Installment Payments scheduled to be paid by the City under and pursuant to the Installment Purchase Agreement and any supplement thereto. "Installment Purchase Agreement" means the Master Installment Purchase Agreement, dated as of August 1, 2014, entered into between the Authority, as seller, and the City, as purchaser, as originally executed and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof. "Interest Account" means the account by that name established under Section 5.01(b) hereof. "Interest Payment Date" means each March 1 and September 1, commencing March 1, 2015. "Letter of Representations" means the letter of the Trustee and Authority delivered to and accepted by the Depository on or prior to the delivery of the 2014 Bonds or any Additional Bonds as Book Entry Bonds setting forth the basis on which the Depository serves as depository for such Book Entry Bonds, as originally executed or as it may be supplemented or revised or replaced by a letter to a substitute Depository. 55394.00011 \8754149.4 80 b 75 " Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the state of Delaware, and its successors and assigns, and, if such entity shall for any reason no longer perform the functions of a securities rating agency, " Moody's" shall be deemed to refer to any other nationally recognized securities rating agency (other than S &P) designated by the Authority. "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.09 hereof. "Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 9.02) all Bonds theretofore or thereupon executed by the Authority and authenticated and delivered by the Trustee pursuant hereto, except -- (1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee for cancellation; 11.01 hereof; (2) Bonds paid or deemed to have been paid within the meaning of Section (3) Bonds beneficially owned by the City or the Authority; and (4) Bonds in lieu of or in substitution for which other Bonds shall have been executed by the Authority and authenticated and delivered pursuant hereto. "Owner" means any person who shall be the registered owner of any Outstanding Bond, as shown on the registration books required to be maintained by the Trustee pursuant to Section 2.05 hereof. "Participants" means those broker dealers, banks and other financial institutions from time to time for which the Depository holds Book Entry Bonds as securities depository. "Participating Underwriter" has the meaning ascribed thereto in the Continuing Disclosure Certificate. "Payment Fund" means the fund by that name established under Section 5.01(b) hereof. "Permitted Investments" means any of the following to the extent then permitted by law and Section 6.05 hereof: (1) Cash deposits (insured at all times by the Federal Deposit Insurance Corporation or otherwise collateralized with obligations described in the next paragraph). (2) Direct obligations of (including obligations issued or held in book entry form on the books of the Department of Treasury) the United States of America. In the event these securities are used for defeasance, they shall be non - callable and non - prepayable. 55394.00011 \8754149.4 80A/-76 (3) Obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America. a. U.S. Export-Import Bank (Eximbank) b. Farmers Home Administration (FmHA) C. Federal Financing Bank d. General Services Administration e. U.S. Maritime Administration f U.S. Department of Housing and Urban Development (PHAs) g. General Services Administration h. Government National Mortgage Association (GNMA) i. Federal Housing Administration Debentures (FHA) (4) Direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America: a. Senior debt obligations rated in the highest long -term rating category by at least two nationally recognized rating agencies issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). b. Senior debt obligations of the Federal Home Loan Bank System. C. Senior debt obligations of the Student Loan Marketing Association. d. Obligations of the Resolution Funding Corporation (REFCORP). e. Consolidated systemwide bonds and notes of the Farm Credit System. (5) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks (including the Trustee and any of its affiliates) which either (a) have a rating in one of the two highest short-term rating categories of at least two nationally recognized rating agencies, (b) are insured at all tines by the Federal Deposit Insurance Corporation, or (c) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank). (6) Commercial paper which is rated at the time of purchase in the highest short-term rating category of at least two nationally recognized rating agencies and which matures not more than 270 days after the date of purchase. (7) Investments in (a) money market funds subject to SEC Rule 2a -7 and rated in the highest short-term rating category of at least two nationally recognized rating agencies including any such funds for which the Trustee or an affiliate provides investment management or other services and (b) public sector investment pools operated pursuant to SEC Rule 2a -7 in which the Issuer's deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in one of the two highest short-term rating categories of at least two nationally recognized rating agencies. 55394.00011 \8754149.4 80- b 77 (8) Pre- refimded lmunicipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice; and a. which are rated, based on an irrevocable escrow account or fund (the "escrow "), in the highest long -tern rating category of at least one nationally recognized rating agencies; or b. (i) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and (ii) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate. (9) General obligations of states or political subdivisions of states with a short-term rating in one of the two highest rating categories and a long -term rating in one of the two highest rating categories of at least two nationally recognized rating agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually. (10) Funds invested in the Local Agency Investment Fund (as that term is defined in Section 16429.1 of the California Government Code, as such section may be amended or recodified from time to time) to the extent deposits and withdrawals may be made by the Trustee. (11) Certificates of deposit secured at all times by collateral described in (2) and/or (3) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral. follows: The value of the above investments, other than cash, shall be determined as "Value," which shall be determined as of the end of the month, means "fair market value," which may be determined using a computer pricing service including any service contained in the Trustee's accounting system, provided that the Trustee shall not be liable for any error made by any such service. 55394.00011 \8754149.4 804-78 "Principal Account" means the account of that name established under Section 01(a) hereof. "Rebate Fund" means the fiend by that name established under Section 7.02(a) hereof. "Rebate Requirement" shall have the meaning set forth in the Tax Certificate. "Record Date" means the fifteenth day preceding an Interest Payment Date, whether or not such day is a Business Day. "Redemption Account" means the account by that name established under Section 5.01(a) hereof. "Revenues" means all Installment Payments pursuant to the Installment Purchase Agreement, and the interest or profits from the investment of money in any account or fiord (other than the Rebate Fund) pursuant to Section 6.05. "S &P" means Standard & Poor's Ratings Services, its successors and assigns, and if such entity shall be deemed to refer to any other nationally recognized securities rating agency (other than Moody's) designated by the Authority. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York, 10041 -0099, Attn.: Call Notification Department, Fax (212) 855 -7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the Authority may designate in a Certificate of the Authority delivered to the Trustee. "Serial Bonds" means Bonds for which no sinking fund payments are provided. "Sinking Account" means the account by that name established under Sections 5.01(a) and 6.03(b) hereof. "State" means the State of California. "Supplemental Indenture" means any indenture then in full force and effect which has been duly executed and delivered by the Authority and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder. "Tax Certificate" means the certificate delivered with respect to the Bonds on which it is intended that interest thereon will be excluded from gross income pursuant to Section 103 of the Code. "Term Bonds" means Bonds which are payable on or before their specified maturity dates from sinking fiord payments established for that purpose and calculated to retire such Bonds on or before their specified maturity dates. 55394.00011 \8754149.4 80- 1U 79 "Treasurer" means the Treasurer of the City or the Treasurer of the Authority as appropriate. "Trustee" means The Bank of New York Mellon Trust Company, N.A., a California banking corporation organized and existing under and by virtue of the laws of the State of California, or any other association or corporation which may at any time be substituted in its place as provided in Section 8.02. 112014 Bonds" means the Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) authorized by and at any time Outstanding pursuant hereto and executed, issued and delivered in accordance with Section 3.01, and any Bonds issued upon transfer thereof or in exchange therefor or in lieu thereof in accordance with the provisions hereof. "Written Request of the Authority" means an instrument in writing signed by the President, the Vice President, the Secretary or any Assistant Secretary of the Authority, or by any other officer of the Authority duly authorized by the Authority for that purpose. "Written Request of the City" means an instrument in writing signed by the Mayor, City Manager, Assistant City Manager or Treasurer, or by any other official of the applicable administrative departments of the City duly authorized by the City for that purpose. SECTION 1.02. Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract between the Authority and the Trustee for the benefit of the Owners from time to time of all Bonds authorized, executed, issued and delivered hereunder and then Outstanding to secure the full and final payment of the interest on and principal of and redemption premiums, if any, on all Bonds which may from time to time be authorized, executed, issued and delivered hereunder, subject to the agreements, conditions, covenants and provisions contained herein; and all agreements and covenants set forth herein to be performed by or on behalf of the Authority shall be for the equal and proportionate benefit, protection and security of all Owners of the Bonds without distinction, preference or priority as to security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein. SECTION 1.03. Number. Gender and Variants. The singular form of any word used herein, including the terms defined in Section 1.01, shall include the plural, and vice versa. The use herein of a word of any gender shall include all genders. The definition of a word or term shall include b.11 variants of such word or term. SECTION 1.04. Articles, Sections, Etc.. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture as originally executed, as such Articles, Sections or subdivisions may be amended and supplemented from time to time in accordance with the provisions hereof; and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof unless the context 55394.00011 \8754149.4 80- t1780 otherwise requires. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Indenture. ARTICLE II ISSUANCE OF 2014 BONDS; REGISTRATION AND TRANSFER OF BONDS SECTION 2.01. Authorization and Purpose of 2014 Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the 2014 Bonds and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of the 2014 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and that the Authority is now duly authorized to issue the 2014 Bonds in the faun and manner provided herein for the purpose of providing funds to finance or refinance the costs of acquisition, construction, installation and improvement of the Project, and that the 2014 Bonds shall be entitled to the benefit, protection and security of the provisions hereof. SECTION 2.02. Execution of 2014 Bonds. The Chairman of the Authority is hereby authorized and directed to execute each of the 2014 Bonds on behalf of the Authority and the Secretary of the Authority is hereby authorized and directed to countersign each of the 2014 Bonds on behalf of the Authority and to impress the seal of the Authority thereon. The signatures of such Chairman and Secretary may be by printed, lithographed or engraved by facsimile reproduction. In case any officer whose signature appears on the 2014 Bonds shall cease to be such officer before the delivery of the 2014 Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the 2014 Bonds. Only those 2014 Bonds bearing thereon a certificate of authentication and registration in substantially the forms set forth in Exhibit A hereto, executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the 2014 Bonds so authenticated and registered have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection and security hereof. SECTION 2.03. Transfer and Payment of Bonds. Any Bond may, in accordance with its teams, be transferred in the books required to be kept pursuant to the provisions of Section 2.08 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender, at the Corporate Trust Office of the Trustee, of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds of a like aggregate principal amount of the same maturity and series. The Trustee shall require the payment by the Owner requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer as a condition precedent to the exercise of such privilege. 55394.00011 \8754149.4 80 11 L_81 The Authority and the Trustee may deem and treat the Owner of any Bond as the absolute owner of such Bond for the purpose of receiving payment thereof and for all other purposes, whether such Bond shall be overdue or not, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on such Bond shall be made only to such Owner, which payments shall be valid and effectual to satisfy and discharge liability on such Bond to the extent of the sum or sums so paid. The transfer of any Bond is limited as described in the following Section. SECTION 2.04. Exchanae of Bonds. Bonds may be exchanged at the Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of the same series and maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange as a condition precedent to the exercise of such privilege. The Trustee shall not be required to register the transfer or the exchange of any Bond (i) during any period commencing with the close of business on the fifteenth day next preceding any interest payment date and ending on such interest payment date, (ii) during the period established for selection of Bonds for redemption, or (iii) which has been selected for redemption in whole or in part. SECTION 2.05. Bond Registration Books. The Trustee will keep at its office sufficient books for the registration and transfer of the Bonds which shall at all times be open to inspection by the Authority during normal business hours with reasonable prior notice, and upon presentation for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the Bonds in such books as hereinabove provided. SECTION 2.06. Mutilated, Destroved, Stolen or Lost Bonds. If any Bond shall become mutilated, the Trustee, at the expense of the Owner thereof, shall thereupon authenticate and deliver a new Bond of like series, maturity and Authorized Denomination in exchange and substitution for the Bond so mutilated, but only upon surrender, at the Corporate Trust Office of the Trustee, of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be cancelled by the Trustee and delivered to, or upon the order of, the Authority. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner, shall thereupon authenticate and deliver a new Bond of like series, maturity and Authorized Denomination in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of a reasonable sum for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds secured by this Indenture. Neither the Authority nor the Trustee shall be required to treat both the original ,Bond and any replacement Bond as being Outstanding 55394.00011 \8754149.4 80 1782 for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. SECTION 2.07. Temporary Bonds. The Bonds issued tinder this Indenture may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority, shall be in fully registered form and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed and authenticated in accordance with the terns hereof If the Authority issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, at the Corporate Trust Office of the Trustee, and the Trustee shall deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds delivered hereunder. SECTION 2.08. Validity of Bonds. From and after the issuance of the Bonds the findings and determinations of the Authority respecting the Bonds shall be conclusive evidence of the existence of the facts so found and determined in any action or proceeding in any court in which the validity of the Bonds shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the proceeds of sale of the Bonds. The validity of the issuance of the Bonds shall not be dependent on or affected in any way by the proceedings taken by the Authority for the financing of refinancing of the Project or by any contracts made by the Authority or its agents in connection therewith, and shall not be dependent upon the completion of the acquisition or installation of the Project or upon the performance by any person, firm or authority of his or its obligation with respect thereto. The recital contained in the Bonds that the same are issued pursuant hereto shall be conclusive evidence of their validity and of the regularity of their issuance, and all Bonds shall be incontestable from and after their issuance. The Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received. SECTION 2.09. Book -Entry System. (a) Prior to the execution and delivery of the 2014 Bonds or any Additional Bonds executed and delivered hereunder, the Authority may provide that such Bonds shall be initially executed and delivered as Book -Entry Bonds, and in such event, the Bonds for each principal payment date of such Bonds shall be in the form of a separate single fully registered Bond (which may be typewritten). Upon initial execution and delivery, the ownership of each such Bond shall be registered in the bond register in the name of the Nominee, as nominee of the Depository. Payment of principal or interest for any Book -Entry Bonds registered in the name of the Nominee shall be made on the payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the regular Record Date 55394.00011 \8754149.4 80A4 -83 or special record date, as the case may be, shown for the Nominee in the bond register of the Trustee. (b) With respect to Book -Entry Bonds, the City, the Authority and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such Book -Entry Bonds. Without limiting the immediately preceding sentence, the City, the Authority and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in Book -Entry Bonds, (ii) the delivery to any Participant or any other person, other than an Owner as shown in the bond register, of any notice with respect to Book -Entry Bonds, including any notice of prepayment, (iii) the selection by the Depository and its Participants of the beneficial interests in Book -Entry Bonds to be redeemed in the event the Authority redeems Bonds in part, (iv) the payment to any Participant or any other person, other than an Owner as shown in the bond register, of any amount with respect to principal, premium, if any, or interest evidenced and represented by Book -Entry Bonds, or (v) any consent given or other action taken by the Depository as Owner. (c) The City, the Authority and the Trustee may treat and consider the person in whose name each Book -Entry Bond is registered in the bond register as the absolute Owner of such Book -Entry Bond for the purpose of payment of principal, redemption premium, if any, and interest with respect to such Bond, for the purpose of selecting any Bonds, or portions thereof to be redeemed, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever and the City, the Authority and the Trustee shall not be affected by any notice to the contrary. (d) In the event of a redemption or any other early withdrawal (e.g., tenders made and accepted in response to the Trustee's invitation at the direction of the Authority) necessitating a reduction in aggregate principal amount of Bonds Outstanding, or a redemption of part of the Bonds Outstanding, the Depository, in its discretion, (i) may request the Trustee to execute and deliver a new Bond or (ii) if DTC is the sole owner of the Bonds, shall make an appropriate notation on the Bond indicating the date and amounts of such reduction in principal except in the case of final maturity, in which case the Bond must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal, premium, if any, and interest evidenced and represented by the Bonds only to the respective Owner, as shown in the bond register, or his or her attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal, redemption premium, if any, and interest evidenced and represented by the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the bond register, shall receive a Bond evidencing the obligation to make payments of principal, redemption premium, if any, and interest evidenced and represented by the Bonds. Upon delivery by the Depository to the Owner, the Trustee, the Authority and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, 55394.00011 \8754149.4 80 1�5 84 and subject to the provisions herein with respect to record dates, the word Nominee in this Indenture shall refer to such nominee of the Depository. (f) In order to qualify the Book -Entry Bonds for the Depository's book -entry system, the Trustee shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the Authority, the City or the Trustee any obligation whatsoever with respect to persons having interests in such Book -Entry Bonds other than the Owners, as shown on the bond register of the Trustee. Such Letter of Representations may provide the time, form, content, and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the Trustee, the Authority and the Trustee shall take such other actions, not inconsistent with this Indenture, as are reasonably necessary to qualify Book -Entry Bonds for the Depository's book -entry program. (g) In the event the Authority determines that it is in the best interest of the Beneficial Owners that they be able to obtain certificated Bonds and that such Bonds should therefore be made available and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Bonds. In such event, the Trustee shall transfer and exchange certificated Bonds as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as Depository for Book -Entry Bonds, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the Authority will discontinue the Book -Entry system with the Depository. If the Authority determines to replace the Depository with another qualified Depository, the Authority shall prepare or direct the preparation of a new single, separate, fully registered Bond for each of the Principal Payment Dates of such Book -Entry Bonds, registered in the name of such successor or substitute qualified Depository or its nominee. If the Authority fails to identify another qualified Depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in such bond register in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such bonds shall designate, in accordance with the provisions of Sections 2.06, 2.07 and 2.08 hereof. Whenever the Depository requests the Authority to do so, the Authority will cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate Bonds evidencing the Book - Entry Bonds to any Participant having Book -Entry Bonds credited to its account with the Depository, and (ii) to arrange for another Depository to maintain custody of Bonds evidencing the Book -Entry Bonds. (h) Notwithstanding any other provision of this Indenture to the contrary, so long as any Book -Entry Bond is registered in the name of DTC, or its nominee, all payments with respect to principal, redemption premium, if any, and interest evidenced and represented by such Bond and all notices with respect to such Bonds shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository. (i) In connection with any notice or other communication to be provided to Owners pursuant to this Indenture by the Authority or the Trustee, at the direction of the Authority, with respect to any consent or other action to be taken by the Owners, the Authority or the Trustee, as the case may be, shall establish a record date for such consent or other action 55394.00011 \8754149.4 80- r6 85 and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to the Depository shall be given only when DTC is the sole Owner of the Bonds. If the Authority determines to invite Owners of Bonds to tender Bonds, and will pay for the same with funds other than moneys in a Sinking Account as hereinafter defined, the Authority shall give the Trustee not less than 14 days' advance notice of such invitation to tender, together with a copy of the tender notice to be distributed to the Owners. Such notice shall specify the terms of the tender and the publication date of notice of such tender. The Trustee shall send such notice to DTC by a secure means (e.g., legible facsimile transmission, registered or certified mail, overnight express delivery) in a timely manner designed to assure that such notice is in DTC's possession no later than the close of business on the Business Day before the date for mailing of such notice. (The Trustee shall have a method to verify subsequently the use of such means and timeliness of the notice.) The Trustee shall credit any Bonds so tendered against such of the mandatory sinking account payments of the maturity tendered as shall be designated by the Authority. SECTION 2.10. Procedure for Issuance of 2014 Bonds. The Authority may, at any time, execute the 2014 Bonds for issuance hereunder and deliver them to the Trustee, and thereupon the 2014 Bonds shall be authenticated and delivered by the Trustee to the purchasers thereof upon the Written Request of the Authority and upon receipt of payment therefor from the purchasers thereof. ARTICLE III TERMS OF 2014 BONDS SECTION 3.01. Terms of 2014 Bonds. (a) (a) The 2014 Bonds shall be designated "Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 ('Payable Solely from Installment Payments Secured by Water System Net Revenues)" and shall be in the aggregate principal amount of $ . The 2014 Bonds shall be dated their date of delivery, shall be issued only in fully registered form in Authorized Denominations (not exceeding the principal amount of 2014 Bonds maturing at any one time), and shall mature on the dates and in the principal amounts and shall bear interest at the rates as set forth in the following schedule: Maturity Date Principal Interest (September 1) Amount Rate Subject to the Letter of Representations, the principal of and redemption premiums, if any, on the 2014 Bonds shall be payable in lawful money of the United States of 55394.00011 \8754149.4 80A1 7-86 America at the Corporate Trust Office of the Trustee upon presentation and surrender of such 2014 Bonds. (b) (i) The 2014 Bonds shall bear interest at the rates set forth in Section 3.01(a) above, payable on the Interest Payment Dates in each year, commencing on March 1, 2015. Each 2014 Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, runless such date of authentication is during the period commencing after a Record Date through and including the next succeeding Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless such date of authentication is on or before the first Record Date, in which event it shall bear interest from ; provided, however, that if on the date of authentication of any 2014 Bonds, interest is then in default on the Outstanding 2014 Bonds, such 2014 Bonds shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding 2014 Bonds. (ii) Payment of interest on the 2014 Bonds due on or before the maturity or prior redemption thereof shall be made to the person in whose name such 2014 Bonds is registered, as of the Record Date preceding the applicable Interest Payment Date, on the registration books kept by the Trustee pursuant to Section 2.05 hereof, such interest to be paid by check mailed by first class mail on such Interest Payment Date to such Owner at his address as it appears on such books; provided, that in the event the ownership of such 2014 Bonds is no longer maintained in book -entry form by the Depository, such payment shall be made by wire transfer to any Owner of at least $1,000,000 in aggregate principal amount of 2014 Bonds, in immediately available funds to an account in the United States designated in writing by such Owner to the Trustee prior to the applicable Record Date. Interest on the 2014 Bonds shall be payable in lawful money of the United States of America and shall be calculated on the basis of a 360 day year consisting of twelve 30 day months. SECTION 3.02. Redemption of 2014 Bonds. (a) 2014 Bonds maturing on or after September 1, _ shall be subject to redemption, at the option of the Authority, upon at least 45 days prior written notice to the Trustee specifying the date and amount of such redemption, on or after September 1, in whole or in part on any date (by lot within any maturity and among maturities as specified by the Authority) at the following redemption prices, plus accrued interest to the date fixed for redemption: Redemption Period (dates inclusive) September 1, through August 31, September 1, through August 31, September 1, and thereafter Redemption Price (percentage of principal amount) (b) Notice of redemption shall be given by the Trustee, not less than 30 nor more than 60 days prior to the redemption date to (i) the respective Owners of the 2014 Bonds designated for redemption at their addresses appearing on the registration books of the Trustee by first class mail and (ii) the Securities Depositories and the Information Services by certified or 55394.00011 \8754149.4 80- m 87 registered mail or overnight delivery. Each notice of redemption shall state the date of such 2014 Bonds the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the 2014 Bonds of such maturity, to be redeemed and, in the case of 2014 Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said 2014 Bonds thereof and in the case of a 2014 Bond to be redeemed in part only, the specified portion of the principal amount thereof to be redeemed, together with interest accrued thereon to the redemption date, and that from and after such redemption date interest thereon shall cease to accrue, and shall require that such 2014 Bonds be then surrendered at the address of the Trustee specified in the redemption notice. (c) If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the 2014 Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice 2014 Bonds shall become due and payable, and from and after the date so designated interest on the 2014 Bonds so called for redemption shall cease to accrue, and the Owners of such 2014 Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. (d) Failure by the Trustee to give notice pursuant to this Section to any one or more of the Infonnation Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to mail notice of redemption pursuant to this Section to any one or more of the respective Owners of any 2014 Bonds designated for redemption shall not affect the of the proceedings for redemption with the Owners to whom such notice was mailed. (e) With respect to any notice of optional redemption of the 2014 Bonds, such notice shall state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of premium, if any, and interest on such 2014 Bonds to be redeemed and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem such 2014 Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice in the manner in which the notice of redemption was given, that such moneys were not so received. (f) All 2014 Bonds redeemed pursuant to the provisions of this Section or Section 6.03(b) shall be cancelled by the Trustee and shall not be reissued, and the Trustee shall deliver a certificate of cancellation to the Authority. SECTION 3.03. Form of 2014 Bonds. The 2014 Bonds and the authentication and registration endorsement and assignment to appear thereon shall be substantially in the form set forth on Exhibit A. 80A -88 55394.00011 \8754149.4 19 ARTICLE IV ISSUANCE OF ADDITIONAL BONDS SECTION 4.01. Conditions for the Issuance of Additional Bonds. The Authority may at any time issue Additional Bonds payable from the Revenues as provided herein and secured by a pledge of the Revenues as provided herein equal to the pledge securing the Outstanding Bonds theretofore issued herelmder, but only subject to the following specific conditions, which are hereby made conditions precedent to the issuance of any such Additional Bonds: (a) The Authority shall be in compliance with all agreements and covenants contained herein and all agreements and covenants contained in the Installment Purchase Agreement. (b) The Authority shall have satisfied the requirements set forth in Section 5.03 of the Installment Purchase Agreement. (c) The issuance of such Additional Bonds shall have been authorized by the Authority and shall have been provided for by Supplemental Indenture which shall specify the following: (1) The purpose for which such Additional Bonds are to be issued; provided that such Additional Bonds shall be applied solely for the purpose of (i) financing or refinancing additional improvements to the Project, including payment of all costs incidental to or connected with such financing or refinancing, and /or (ii) refunding any Bonds then Outstanding; (2) The authorized principal amount and designation of such Additional Bonds; (3) The dated date and the maturity dates of, and the sinking fund payment dates, if any, for such Additional Bonds; (4) The interest payment dates for such Additional Bonds, which shall be Interest Payment Dates; (5) That such Additional Bonds shall be issued only in Authorized Denominations; (6) The redemption premiums, if any, and the redemption terms, if any, for such Additional Bonds; (7) The amount; if any, to be deposited from the proceeds of sale of such Additional Bonds in the Interest Account; (8) The amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in an acquisition fund or construction fund to be established; 55394.00011 \8754149.4 80 L0 - 89 (9) The Authority may but shall not be required to fund a reserve fiord or obtain a reserve fund surety or instrument with respect to any Parity Obligations. If a reserve fund is funded for any Additional Bonds or a qualified reserve fund surety or instrument is obtained with respect to any Additional Bonds, such funded reserve fund or qualified reserve fund surety or instrument shall secure only the related Additional Bonds and shall not support the 2014 Bonds or any other Additional Bonds; (10) The forms of such Additional Bonds; and (11) Such other provisions as are necessary or appropriate and not inconsistent herewith. (d) The Installment Purchase Agreement shall have been amended so as to increase the Installment Payments by the City thereunder by an amount at least sufficient to pay the interest on and principal of such Additional Bonds as the same become due. Nothing contained herein shall limit the issuance of any revenue bonds of the Authority payable from the Revenues and secured by a pledge of the Revenues if after the issuance and delivery of such revenue bonds none of the Bonds theretofore issued hereunder will be Outstanding. SECTION 4.02. Procedure for the Issuance of Additional Bonds. The Authority may, at any time, execute Additional Bonds for issuance hereunder and deliver them to the Trustee, and thereupon such Additional Bonds shall be authenticated and delivered by the Trustee to the purchaser thereof upon the Written Request of the Authority, but only upon receipt by the Trustee of the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the date of delivery of such Additional Bonds by the Trustee (unless the Authority shall accept any of such documents bearing a prior date): (a) An executed copy of the Supplemental Indenture authorizing the issuance of such Additional Bonds; (b) A Written Request of the Authority as to the delivery of such Additional Bonds; (c) An opinion of Bond Counsel to the effect that (1) the Authority and the Trustee have the right and power to execute and deliver the Supplemental Indenture and the Supplemental Indenture has been duly and lawfully executed and delivered by the Authority and the Trustee, is in full force and effect and is valid and binding upon the Authority and the Trustee and enforceable in accordance with its terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights and by equitable principles) and no other authorization for the execution and delivery thereof is required, (2) the Supplemental Indenture creates the valid pledge of the Revenues which it purports to create as provided therein, subject to the application thereof to the purposes and on the conditions permitted hereby, (3) such Additional Bonds are valid and binding special obligations of the Authority, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights and by equitable principles) and the terms hereof 55394.00011 \8754149.4 80 G1 n 9O and entitled to the benefits hereof, and such Additional Bonds have been duly and validly authorized, executed, issued and delivered in accordance herewith, (4) the amendment to the Installment Purchase Agreement required by Section 4.01(d) has been duly authorized, executed and delivered and is valid and binding upon the Authority and the City and enforceable in accordance with its terms (except as enforcement may be limited by bankruptcy insolvency, reorganization and other similar laws relating to the enforcement of creditors' rights and by equitable principles), and (5) the issuance of such Additional Bonds will not adversely affect the exclusion from gross income for federal tax purposes of interest on any Outstanding Bonds which purport to bear interest which is excluded from gross income pursuant to Section 103 of the Code; (d) A Certificate of the Authority containing such statements as may be reasonably necessary to show compliance with the conditions for the issuance of such Additional Bonds contained herein; and (e) Such further documents, opinions, money or securities as are required by the provisions of the Supplemental Indenture providing for the issuance of such Additional Bonds. ARTICLE V ESTABLISHMENT OF FUNDS; DEPOSIT AND APPLICATION OF PROCEEDS SECTION 5.01. Establishment of Funds and Accounts. (a) The Trustee shall establish and maintain a special trust fund to be held by the Trustee called the "City of Santa Ana Water System Improvement Project Payment Fund" (the "Payment Fund "). Within the Payment Fund, the Trustee shall establish and maintain an Interest Account (the "Interest Account "), a Principal Account (the "Principal Account "), a Sinking Account (the "Sinking Account ") and a Redemption Account (the "Redemption Account "). (b) The Trustee shall establish and maintain a special trust fund to be held by the Trustee called the "City of Santa Ana Costs of Issuance Fund" (the "Costs of Issuance Fund "). (c) The Authority shall establish and maintain a special trust fund to be held by the Treasurer called the "City of Santa Ana Acquisition Fund" (the "Acquisition Fund "). SECTION 5.02. Application of Proceeds. Upon the receipt of payment for the 2014 Bonds on the Closing Date, the Trustee and the Authority shall apply the proceeds thereof as follows: (i) The Trustee shall transfer $ to the Escrow Agent for deposit in the escrow fund established under the Escrow Agreement; 55394.00011 \8754149.4 80i�- 91 (ii) The Trustee shall transfer to the Treasurer the amount of $ for deposit in the Acquisition Fund; and (iii) The Trustee shall deposit the amount of $ to the Costs of Issuance Fund. For record keeping purposes, the Trustee may establish such accounts as may be necessary to reflect such transfer of proceeds. SECTION 5.03. Use of Moneys in the Acquisition Fund; Costs of Issuance Fund. (a) The Treasurer shall hold the moneys in the Acquisition Fund and shall disburse such moneys therefrom to pay Acquisition Costs. Such disbursements shall be made from time to time upon receipt of a Written Request of the City on behalf of the Authority which: (a) states with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the person, film or authority to whom payment is due, (iii) the amount to be disbursed, and (iv) that each obligation therein has been properly incurred, and is a proper charge against the Acquisition Fund and has not been the basis of any previous disbursement; (b) specifies in reasonable detail the nature of the obligation; and (c) is accompanied by a bill or statement of account for each obligation. (b) If, after payment by the Treasurer of all Written Requests of the City on behalf of the Authority theretofore tendered to the Treasurer under the provisions of this Section and delivery to the Treasurer and the Trustee of a Certificate of Completion, there shall remain any balance of money in the Acquisition Fund, all money so remaining shall be transferred to the Trustee and deposited to the accounts of the Payment Fund as directed by the Authority. (c) The moneys in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance. The Trustee shall disburse moneys in the Costs of Issuance Fund from time to time upon receipt by the Trustee of a Written Request of the Authority which: (a) states with respect to each disbursement to be made: (i) the requisition number, (ii) the name and address of the person, firm or corporation to whom payment is due, (iii) the amount to be disbursed, and (iv) that each obligation therein has been properly incurred, and is a proper charge against the Costs of Issuance Fund and has not been the basis of any previous disbursement; (b) specifies in reasonable detail the nature of the obligation; and (c) is accompanied by a bill or statement of account for each obligation. The Trustee shall hold the moneys in the Costs of Issuance Fund and disburse such moneys therefrom in accordance with this Section. Upon the earlier of the date six months after the Closing Date for the related Series of Bonds or the date of receipt of a Certificate of the Authority stating that all Costs of Issuance have been paid, the Trustee shall transfer any amounts then remaining in the Costs of Issuance Fund to the Acquisition Fund; provided that investment eamings may be transferred to the Rebate Fund as provided in Section 7.02. U 92 55394.00011 \8754149.4 8 Lj ARTICLE VI REVENUES SECTION 6.01. Pledge of Revenues. All Revenues and amounts on deposit in the funds and accounts established hereunder (other than amounts on deposit in the Rebate Fund created pursuant to Section 7.02) are hereby irrevocably pledged to the payment of the interest on and principal of the Bonds as provided herein, and the Revenues shall not be used for any other purpose while any of the Bonds remain Outstanding; provided, however, that out of the Revenues there may be allocated such sums for such purposes as are expressly permitted by Section 6.03. In order to secure the pledge of the Revenues contained in this Section 6.01, the Authority hereby transfers, conveys and assigns to the Trustee, for the benefit of the Owners, all of the Authority's rights under the Installment Purchase Agreement (excepting its right to indemnification thereunder), including the right to receive Installment Payments from the City, the right to receive any proceeds of insurance maintained thereunder or any condemnation award rendered with respect to the Project and the right to exercise any remedies provided therein in the event of a default by the City thereunder. The Trustee hereby accepts said assignment for the benefit of the. Owners subject to the provisions of this Indenture. The Trustee shall be entitled to and shall receive all of the Revenues, and any Revenues collected or received by the Authority shall be deemed to be held, and to have been collected or received, by the Authority as agent of the Trustee and shall forthwith be paid by the Authority to the Trustee. SECTION 6.02. Receipt and Deposit of Revenues in the Payment Fund. In order to carry out and effectuate the pledge contained herein, the Authority agrees and covenants that all Revenues when and as received shall be received in trust hereunder for the benefit of the Owners and shall be deposited when and as received in the Payment Fund. Subject to Section 6.05 hereof, all Revenues shall be accounted for through and held in trust in the Payment Fund, and the Authority shall have no beneficial right or interest in any of the Revenues except only as herein provided. All Revenues, whether received by the Authority in trust or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely to the purposes and uses hereinafter set forth in this Article, and shall be accounted for separately and apart from all other accounts, funds, money or other assets of the Authority. SECTION 6.03. Establishment and Maintenance of Accounts for Use of Money in the Payment Fund. Subject to Section 7.02, all money in the Payment Fund shall be deposited by the Trustee in the following respective special accounts within the Payment Fund (each of which is hereby created and each of which the Trustee hereby covenants and agrees to maintain) in the following order of priority: (a) Interest Account, (b) Principal Account, and (c) Redemption Account. 55394.00011 \8754149.4 804Z93 All money in each of such accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this Section. (a) Interest Account. On or before each Interest Payment Date, the Trustee shall transfer from the Payment Fund and deposit in the Interest Account that amount of money which, together with any money contained in the Interest Account, is equal to the aggregate amount of interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. No deposit need be made in the Interest Account if the amount contained in the Interest Account is at least equal to the aggregate amount of interest becoming due and payable on all Outstanding Bonds on such Interest Payment Date. All money in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Principal Account. On or before September 1 of each year, beginning September 1, 2015, the Trustee shall transfer from the Payment Fund and deposit in the Principal Account that amount of money which, together with any money contained in the Principal Account, is equal to the aggregate principal amount of all Outstanding Serial Bonds maturing on such September 1 plus the aggregate principal amount of all sinking fund payments required to be made with respect to Bonds on such September 1. No deposit need be made in the Principal Account if the amount contained therein is at least equal to the aggregate amount of the principal of all Outstanding Serial Bonds maturing by their terms on such September 1 plus the aggregate amount of all sinking fund payments required to be made on such September 1 for all Outstanding Tempi Bonds. The Trustee shall establish and maintain within the Principal Account a separate subaccount for Bonds of each series and maturity, designated as the "Sinking Account' (the "Sinking Account'), inserting therein the series and maturity (if more than one such subaccount is established for such series) designation of such Bonds. With respect to each Sinking Account, on each mandatory sinking account payment date established for such Sinking Account, the Trustee shall apply the mandatory sinking account payment required on that date to the redemption (or payment at maturity, as the case may be) of Tenn Bonds of the series and maturity for which such Sinking Account was established, upon the notice and in the manner provided herein or in the Supplemental Indenture pursuant to which such series of Bonds were issued; provided that, at any time prior to the selection of Bonds for such redemption, at the written direction of the City or the Authority, the Trustee may apply moneys in such Sinking Account to the purchase of Term Bonds of such series and maturity at public or private sale, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as shall be determined by the Authority, except that the purchase price (excluding accrued interest) shall not exceed the redemption price that would be payable for such Bonds upon redemption by application of such mandatory sinking account payment. If, during the twelve month period immediately preceding the selection of Bonds for redemption, the Trustee has purchased Term Bonds of such series and maturity with moneys in such Sinking Account, such Bonds so purchased shall be applied, to the extent of the full principal amount thereof, to reduce said mandatory Sinking Account payment. 55394.00011 \8754149.4 80 L 94 All money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Bonds as they shall become due and payable, except that any money in any Sinking Account shall be used and withdrawn by the Trustee only to purchase or to redeem or to pay Term Bonds for which such Sinking Account was created. (c) Redemption Account. In addition to the above accounts, the Trustee shall establish and maintain within the Payment Fund a special account designated the "Redemption Account." All money in the Redemption Account shall be held in trust by the Trustee and shall be applied, used and withdrawn either to redeem bonds pursuant to Article 3 or for the purposes authorized in this subsection (c). Any moneys which, pursuant to Section 7.01 of the Installment Purchase Agreement, are to be used to redeem Bonds shall be deposited by the Trustee in the Redemption Account. The Trustee shall, on the scheduled redemption date, withdraw from the Redemption Account and pay to the Owners entitled thereto an amount equal to the redemption price of the Bonds to be redeemed on such date. (d) Any delinquent Installment Payments with respect to the Project shall be applied first to the Interest Account for the immediate payment of interest payments past due and then to the Principal Account for immediate payment of principal payments past due according to the tenor of any Bond. Any remaining money representing delinquent Installment Payments shall be deposited in the Payment Fund to be applied in the manner provided therein. SECTION 6.04. Investment of Moneys in Funds and Accounts. Moneys in the Acquisition Fund shall be accounted for and invested by the Treasurer in any legally permitted investment. Moneys in the Costs of Issuance Fund and the Payment Fund and any accounts therein shall, upon the Written Request of the City, on behalf of the Authority, be invested by the Trustee in Pennitted Investments. In the absence of a Written Request of the City, the Trustee may invest moneys in such funds and accounts in Permitted Investments described in clause (5) or clause (7) of the definition of Permitted Investments. The obligations in which moneys in the said funds and accounts are invested shall mature prior to the date on which such moneys are estimated to be required to be paid out hereunder. Prior to the completion of the acquisition, construction, installation and improvement of the Project, any interest, income or profits from the deposits or investments of all funds and accounts (except the Rebate Fund) shall be retained in such fund or account. After the completion of the acquisition, construction, installation and improvement of the Project, any interest, income or profits from the deposits or investments of all funds and accounts (except the Rebate Fund) shall be deposited to the Interest Account of the Payment Fund. The Trustee shall semiannually, on or about March 1 and September 1 of each year, commencing on September 1, 2015, and at such times as the Authority shall deem appropriate, value the investments in the funds and accounts hereunder. Except as otherwise provided in this Section, Permitted Investments representing an investment of moneys attributable to any fund or account hereunder and all investment profits or losses thereon shall be deemed at all times to be a part of said fund or account. The Trustee may act as principal or agent in the acquisition or disposition of investments. For investment purposes only, the Trustee may commingle the funds and accounts established hereunder, except the Rebate Fund and any fund or account established pursuant to Article 11 hereof. 55394,0001 1 \8754149.4 80k95 ARTICLE VII COVENANTS OF THE AUTHORITY SECTION 7.01. Punctual Payment and Performance. The Authority will punctually pay the interest on and the principal of and redemption premiums, if any, to become due on every Bond issued hereunder in strict conformity with the teens hereof and of the Bonds, and will faithfully observe and perform all the agreements and covenants contained herein and in the Bonds. SECTION 7.02. Tax Covenants; Rebate Fund. (a) In addition to the other funds and accounts created pursuant hereto, the Trustee shall establish and maintain a fund separate from any other fund or account established and maintained hereunder designated the "Rebate Fund" (the "Rebate Fund "). Within the Rebate Fund, the Trustee shall maintain such accounts or subaccounts as are specified in a Written Request of the City to the Trustee pursuant to the Tax Certificate. The Trustee shall deposit moneys in the Rebate Fund made available by the Authority pursuant to a Written Request of the City. Subject to the transfer provisions provided in paragraph (e) below, all money at any time deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy the Rebate Requirement (as such term is defined in the Tax Certificate), for payment to the federal government of the United States of America, and none of the City, the Authority, the Trustee nor the Owners of the Bonds shall have any right in or claim to such money. All amounts deposited into or on deposit in the Rebate Fund shall be governed by this Section and by the Tax Certificate (which is incorporated herein by reference). The Trustee shall be deemed conclusively to have complied with the provisions of this Section 7.02 and the Tax Certificate if it follows the Written. Request of the City, including supplying all necessary information in the manner provided in the Tax Certificate, and except as otherwise expressly provided herein, shall not be required to take any actions hereunder in the absence of written directions by the City, and shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate or this Section. The Trustee agrees to comply with all Written Requests of the City given in accordance with the Tax Certificate. (b) Upon a Written Request of the City, an amount shall be deposited into the Rebate Fund by the Trustee from deposits by the City, if and to the extent required, so that the balance of the amount on deposit thereto shall be equal to the Rebate Requirement. Computations of the Rebate Requirement shall be furnished by or on behalf of the City in accordance with the Tax Certificate. The City shall provide the Trustee with written evidence that the computation of the Rebate Requirement has been made. (c) The Trustee shall have no obligation to rebate any amounts required to be rebated pursuant to this Section, other than from moneys held in the funds and accounts created hereunder or from other moneys provided to it by the City or the Authority. (d) The Trustee shall invest all amounts held in the Rebate Fund in Permitted Investments as directed by a Written Request of the City, which directions shall be subject to the 55394.00011 \8754149.4 80j�; 96 restrictions set forth in the Tax Certificate. Money, including investment earnings, shall not be transferred from the Rebate Fund except as provided in paragraph (e) below. (e) Upon receipt of a Written Request of the City, the Trustee shall remit part or all of the amounts in the Rebate Fund to the United States of America, as so directed. In addition, if the City so directs, the Trustee will deposit moneys into or transfer moneys out of the Rebate Fund from or into such accounts or fund as directed by the Written Request of the City. Any amounts remaining in the Rebate Fund after payment or prepayment of all of the Bonds and payment and satisfaction of any Rebate Requirement, or provision made therefor satisfactory to the Trustee, shall, after payment all fees and expenses of the Trustee, be withdrawn and remitted to the City. (f) Notwithstanding any other provision hereof, including, in particular, Article 12, the obligation to remit the Rebate Requirement to the United States and to comply with all other requirements of this Section and the Tax Certificate shall survive the defeasance or payment in full of the Bonds. (g) The Authority shall not use or permit any proceeds of the 2014 Bonds or any funds of the Authority, directly or indirectly, to acquire any securities or obligations, and shall not take or permit to be taken any other action or actions, which would cause any 2014 Bonds to be an "arbitrage bond" within the meaning of the Code or "federally guaranteed" within the meaning of Section 149(b) of the Code and any such applicable regulations promulgated from time to time thereunder and under Section 103(c) of the Code. The Authority shall observe and not violate the requirements of Section 148 of the Code and any such applicable regulations. The Authority shall comply with all requirements of Sections 148 and 149(b) of the Code to the extent applicable to the 2014 Bonds. (h) The Authority specifically covenants to comply with the provisions and procedures of the Tax Certificate. (i) The Authority shall not use or permit the use of any proceeds of the 2014 Bonds or any funds of the Authority, directly or indirectly, in any manner, and shall not take or omit to take any action that would cause any of the 2014 Bonds to be treated as an obligation not described in Section 103(a) of the Code. 0) Notwithstanding any provisions of this Section 7.02, if the Authority shall provide to the Trustee an opinion of Bond Counsel to the effect that any specified action required under this Section 7.02 is no longer required or that some farther or different action is required to maintain the exclusion from gross income for federal income tax purposes of interest with respect to the 2014 Bonds, the Trustee, the Authority and the City may conclusively rely on such opinion in complying with the requirements of this Section and, notwithstanding Article 8 hereof, the covenants hereunder shall be deemed to be modified to that extent. SECTION 7.03. Eminent Domain. If the whole of the Project or so much thereof as to render the remainder unusable for the purposes for which it was used or intended to be used by the City shall be taken under the power of eminent domain, the Installment Purchase Agreement shall cease as of the day that possession shall be so taken. The Authority shall take or 55394.00011 \8754149.4 80 Z�97 cause to be taken such action as is reasonably necessary to obtain compensation at least equal to the value of the Project or portion thereof taken by eminent domain. If less than the whole of the Project shall be taken under the power of eminent domain and the remainder is usable for the purposes for which it was used by the City at the time of such taking, then the Installment Purchase Agreement shall continue in fall force and effect as to such remainder, and the parties thereto waive the benefits of any law to the contrary. So long as any of the Bonds shall be Outstanding, the net proceeds of any award made in eminent domain proceedings for taking the Project or any portion thereof shall be transferred to the Payment Fund. Any such award made after all of the Bonds have been fully paid and retired and all fees and expenses of the Trustee have been fully paid shall be paid to the City. SECTION 7.04. Accounting Records and Reports. The Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books shall be available for inspection by the Trustee, at reasonable hours and under reasonable conditions. Not more than 270 days after the close of each Fiscal Year, the Authority shall famish or cause to be furnished to the Trustee a complete financial statement covering receipts, disbursements, allocation and application of Revenues for such Fiscal Year, and including a profit and loss statement and balance sheet. The Authority shall also keep or cause to be kept such other information as is required under the Tax Certificate. SECTION 7.05. The Citv's Budgets. The Authority will supply to the Trustee, as soon as practicable after the beginning of each Fiscal Year but in any event no later than September 1 of each Fiscal Year, a Certificate of the City certifying that the City has made adequate provision in its annual budget for such Fiscal Year for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year. If the amounts so budgeted are not adequate for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year, the Authority will take such action as may be necessary and within its power to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be paid by the City in such Fiscal Year for the payment of all installments due under the Installment Purchase Agreement in such Fiscal Year, and will notify the Trustee of the proceedings then taken or proposed to be by the Authority. SECTION 7.06. Installment Purchase Agreement and Other Documents. The Authority will at all times maintain and vigorously enforce all of its rights under the Installment Purchase Agreement, and will promptly collect all installments due for the purchase of the Project as the same become due under the Installment Purchase Agreement, and will promptly and vigorously enforce its rights against any person who does not pay such installments as they become due under the Installment Purchase Agreement. The Authority will not do or pen-nit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be a ground for cancellation or termination of the Installment Purchase Agreement by the purchaser thereunder. SECTION 7.07. Other Liens. The Authority will keep the Project free from judgments, mechanics' and materialmen's liens (except those arising from the acquisition, construction and installation of the Project) and free from all liens, claims, demands and 55394.0001 t \8754149.4 8049-98 encumbrances of whatsoever prior nature or character to the end that the security for the Bonds provided herein will at all times be maintained and preserved free from any claim or liability which, in the judgment of the Trustee (whose determination shall be final), might hamper the Authority in conducting its business or interfere with the City's operation of the Project, and the Trustee at its option (after first giving the Authority ten days' written notice to comply therewith and failure of the Authority to so comply within such period) may (but shall not be obligated to) defend against any and all actions or proceedings in which the validity hereof is or might be questioned, or may pay or compromise any claim or demand asserted in any such action or proceeding; provided, however, that in defending such actions or proceedings or in paying or compromising such claims or demands the Trustee shall not in any event be deemed to have waived or released the Authority from liability for or on account of any of its agreements and covenants contained herein, or from its liability hereunder to defend the validity hereof and the pledge of the Revenues made herein and to perform such agreements and covenants. SECTION 7.08. Prosecution and Defense of Suits. The Authority will promptly from time to time take or cause to be taken such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Project, whether now existing or hereafter developing, and shall prosecute or cause to be prosecuted all such suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify and hold the Trustee harmless from all loss, cost, damage and expense, including attorney's fees, which it may incur by reason of any such defect, cloud, suit, action or proceeding. The Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim arising out of the receipt, application or disbursement of any of the Revenues or involving the rights of the Trustee hereunder; provided that the Trustee at its election may appear in and defend any such suit, action or proceeding. SECTION 7.09. Further Assurances. Whenever and so often as requested to do so by the Trustee, the Authority will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Owners all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby. SECTION 7.10. Maintenance of Existence. The Authority hereby covenants and agrees to take any and all action on its part to maintain its existence, and to cause the City and the successor agency to the Agency to take such action necessary to maintain the existence of the Authority. The Authority shall not permit any action to be taken which shall cause the City or the successor agency to the Agency to terminate or shorten the tern of the Joint Exercise of Powers Agreement, between the City and the Agency. SECTION 7.11. Continuing Disclosure. The Authority will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Indenture, failure of the Authority to comply with the Continuing Disclosure Certificate shall not constitute an event of default hereunder; provided, however, that the Trustee may (and, at the written direction of any Participating Underwriter or the holders of at least 25% of the aggregate principal amount of Outstanding Bonds, and upon being 55394.00011 \8754149.4 80k-99 indemnified to its reasonable satisfaction therefor, shall) or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. ARTICLE VIII THE TRUSTEE SECTION 8.01. Appointment and Acceptance of Duties. The Trustee hereby accepts and agrees to the trusts hereby created to all of which the Authority agrees and the respective owners of the Bonds, by their purchase and acceptance thereof, agree. SECTION 8.02. Duties, Immunities and Liabilities of Trustee. (a) The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied duties or obligations shall be read into this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which has not been cured), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of his own affairs. (b) So long as no Event of Default has occurred and is continuing, the Authority may remove the Trustee at any time and shall remove the Trustee if at any time requested to do so by the Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or, regardless of the occurrence and continuance of an Event of Default, if at any time the Trustee shall be in breach of the trusts set forth in this Indenture, or shall cease to be eligible in accordance with subsection (e) of this Section, or shall become incapable of acting, or shall commence a case under any bankruptcy, insolvency or similar law, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take control or charge of the Trustee or its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee, and thereupon shall appoint a successor Trustee by an instrument in writing. (c) The Trustee may resign by giving written notice of such resignation to the Authority and by giving notice of such resignation by mail, first class postage prepaid, to the Owners at the addresses listed in the bond register. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing. (d) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee; provided that no removal or resignation of the Trustee shall take effect until a successor shall be appointed. If no successor Trustee shall have been appointed and shall have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee, at the expense of the Authority, or any Owner (on behalf of himself and all other Owners) may petition any court of competent jurisdiction for the appointment of a 80A31100 55394.00011 \8754149.4 successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall signify its acceptance of such appointment by executing and delivering to the Authority and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, at the written request of the Authority or of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Authority shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, such successor Trustee shall mail a notice of the succession of such Trustee to the trusts hereunder by first class mail, postage prepaid, to the Owners at their addresses listed in the bond register. (e) Any Trustee appointed Linder the provisions of this Indenture shall be a trust company or bank having trust powers, having a corporate trust office in California, having (or whose parent holding company shall have) a combined capital and surplus of at least fifty million dollars ($50,000,000), subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this subsection (e) the Trustee shall resign immediately in the manner and with the effect specified in this Section. (f) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. (g) The Trustee shall not be responsible for the sufficiency, timeliness or enforceability of the Revenues. (h) The Trustee shall not be accountable for the use or application by the Authority, the City or any other party of any fiords which the Trustee has released under this Indenture. (i) The Trustee may employ attorneys, agents or receivers in the performance of any of its duties hereunder and shall not be answerable for the misconduct of any such attorney, agent or receiver selected by it with reasonable care. 55394.00011 \8754149.4 80A3-2101 0) Notwithstanding any other provision of this indenture, in determining whether the rights of the Owners will be adversely affected by any action taken pursuant to the terms and provisions of this Indenture, the Trustee shall consider the effect on the Owners as if there were no policy or policies of municipal bond insurance. SECTION 8.03. Meraer or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business provided such company shall be eligible tinder subsection (e) of Section 8.02 shall succeed to the rights and obligations of such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. SECTION 8.04. Compensation. The Authority shall pay the Trustee, or cause the Trustee to be paid, reasonable compensation for its services rendered hereunder and shall reimburse the Trustee for reasonable expenses incurred by the Trustee in the performance of its obligations hereunder. The Authority agrees, to the extent permitted by law, to indemnify the Trustee and its respective officers, directors, members, employees, attorneys and agents for, and to hold them harmless against, any loss, liability or expense incurred without negligence or willful misconduct on their part arising out of or in connection with the acceptance or administration of the trusts imposed by this Indenture, including performance of their duties hereunder, including the costs and expenses of defending themselves against any claims or liability in connection with the exercise or performance of any of their powers or duties hereunder. Such indemnity shall survive the termination or discharge of the Indenture and resignation or removal of the Trustee. SECTION 8.05. Liability of Trustee. (a) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Authority, and the Trustee assttmes no responsibility for the correctness of the same, and makes no representations as to the validity or sufficiency of this Indenture, the Installment Purchase Agreement or of the Bonds, and shall incur no responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee may become the Owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. (b) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless the Trustee shall have been negligent in ascertaining the pertinent facts. 55394,00011 \8754149.4 80A33102 (c) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than 25% in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture. (d) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture, except for actions arising from the negligence or intentional misconduct of the Trustee. The permissive right of the Trustee to do things enumerated hereunder shall not be construed as a mandatory duty. (e) The Trustee shall not be deemed to have knowledge of any Event of Default hereunder unless and until it shall have actual knowledge thereof, or shall have received written notice thereof at the Corporate Trust Office of the Trustee. Except as otherwise expressly provided herein, and subject to Section 8.02, the Trustee shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default hereunder or thereunder. The Trustee shall not be responsible for the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, the Trustee shall not be responsible for reviewing the contents of any financial statements furnished to the Trustee pursuant to Section 7.04 and may rely conclusively on the certificates provided hereunder to establish compliance with its duties. (f) The Trustee shall not be considered in breach or in default of its obligations hereunder or progress in respect thereto in the event of enforced delay ( "unavoidable delay ") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and or occurrence beyond the control of the Trustee; provided, however, that the Trustee shall provide notice of any such unavoidable delay to the Authority. SECTION 8.06. Right to Rely on Documents. The Trustee shall be protected in acting upon any notice, resolution, request, requisition, consent, order, certificate, report, opinion, bond, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel but need not be counsel of or to the Authority, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. 80A34103 55394.00011 \8754149.4 Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the Authority, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. SECTION 8.07. Preservation and Inspection of Documents. All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject at all reasonable times to the inspection of the Authority and any Owner, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions. The Trustee agrees to accept and act upon facsimile transmission of written instructions and /or directions pursuant to this Indenture provided, however, that: (a) subsequent to such facsimile transmission of written instructions and /or directions the Trustee shall forthwith receive the originally executed instructions and/or directions, (b) such originally executed instructions and/or directions shall be signed by a person as may be designated and authorized to sign for the party signing such instructions and /or directions, and (c) the Trustee shall have received a current incumbency certificate containing the specimen signature of such designated person. ARTICLE IX AMENDMENT OF THE INDENTURE SECTION 9.01. Amendment of the Indenture. The Indenture and the rights and obligations of the Authority and of the Owners may be amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of at least a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 9.02, are filed with the Trustee. No such amendment shall (1) extend the maturity of or reduce the interest rate on or otherwise alter or impair the obligation of the Authority to pay the interest on or principal of or redemption premium, if any, on any Bond at the time and place and at the rate and in the currency provided herein without the express written consent of the Owner of such Bond, (2) except as provided in Sections 4.01 and 4.02 hereof, perinit the creation by the Authority of any pledge of the Revenues as provided herein superior to or on a parity with the pledge created hereby for the benefit of the Bonds, or (3) modify any rights or obligations of the Trustee without its prior written assent thereto. The Indenture and the rights and obligations of the Authority and of the Owners may also be amended at any time by a Supplemental Indenture which shall become binding upon adoption without the consent of any Owners, but only to the extent permitted by law and after receipt of an approving opinion of Bond Counsel and only for any one or more of the following purposes 55394.00011 \8754149.4 80-5104 (a) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein regard to questions arising hereunder which the Authority may deem desirable or necessary and not inconsistent herewith and which shall not adversely affect the interests of the Owners; (b) to make any other change or addition hereto which shall not materially adversely affect the interests of the Owners, or to surrender any right or power reserved herein to or conferred herein on the Authority; or (c) to provide for the issuance of any Additional Bonds and to provide the terms of such Additional Bonds, subject to the conditions and upon compliance with the procedure set forth in Article 4. SECTION 9.02. Disqualified Bonds. Bonds owned or held by or for the account of the Authority or the City shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds provided in this article, and shall not be entitled to consent to or take any other action provided in this article. SECTION 9.03. Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds may bear a notation by endorsement in form approved by the Authority as to such action, and in that case upon demand of the Owner of any Outstanding Bond and presentation of his Bond for such purpose at the Corporate Trust Office of the Trustee a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond such new Bonds shall be exchanged at the Corporate Trust Office of the Trustee without cost to each Owner for Bonds then Outstanding upon surrender of such Outstanding Bonds. SECTION 9.04. Amendment by Mutual Consent. The provisions of this article shall not prevent any Owner from accepting any amendment as to the particular Bonds owned by him, provided that due notation thereof is made on such Bonds. ARTICLE X EVENTS OF DEFAULT AND REMEDIES OF HOLDERS SECTION 10.01. Events of Default and Acceleration of Maturities. If one or more of the following events (herein called "Events of Default ") shall happen, that is to say: (a) failure in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; (b) failure in the due and punctual payment of the principal of or redemption premimn, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or by proceedings for redemption; 55394.00011 \8754149.4 v 0 ^3 (310 5 (c) failure by the Authority in the performance of any of the other agreements or covenants required herein to be performed by the Authority, and such default shall have continued for a period of 30 days after the Authority shall have been given notice in writing of such default by the Trustee, or to the Authority and the Trustee by Owners of not less than 25% of the Bonds; or (d) if any event of default shall have occurred and be continuing under Section 8.01 of the Installment Purchase Agreement; or (e) if the Authority shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the Authority seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property; then and in each and every such case during the continuance of such event of default the Trustee may, upon the written request of the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding by notice in writing to the Authority, declare the principal of all Bonds then Outstanding and the interest accrued thereon to be due and payable immediately, and upon any such declaration the same shall become due and payable, anything contained herein or in the Bonds to the contrary notwithstanding. This subsection is subject to the condition that if at any time after the entire principal amount of the unpaid Bonds and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay the unpaid principal amount of the Bonds due prior to such declaration and the accrued interest thereon, with interest such overdue installments at the rate or rates applicable thereto in accordance with their terms, and the reasonable fees and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment the entire principal amount of the unpaid Bonds and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then and in every such case the Trustee, by written notice to the City, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon. SECTION 10.02. Proceedings by Trustee. Upon the happening and continuance of any Event of Default the Trustee in its discretion may, and at the written request of the Owners of not less than 25% in aggregate principal amount of Bonds Outstanding shall (but only to the extent indemnified to its satisfaction from fees and expenses, including attorneys' fees), do the following: (a) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Owners and require the Authority to enforce all rights of the Owners of Bonds, including the right to require the Authority to receive and collect Revenues and to 55394.00011 \8754149.4 80A3-7106 enforce its rights under the Installment Purchase Agreement and to require the Authority to carry out any other covenant or agreement with Owners of Bonds and to perform its duties hereunder; (b) bring suit upon the Bonds; (c) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Owners; and (d) as a matter of right, have receivers appointed for the Revenues and the issues, earnings, income, products and profits thereof, pending such proceedings, with such powers as the court making such appointment shall confer. SECTION 10.03. Effect of Discontinuance or Abandonment. In case any proceeding taken by the Trustee on account of any default or Event of Default shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then and in every such case the Authority, the Trustee and the Owners shall be restored to their former positions and rights under this Indenture, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken. SECTION 10.04. Rights of Owners. Anything in this Indenture to the contrary notwithstanding subject to the limitations and restrictions as to the rights of the Owners in Sections 10.01 and 10.02 above and 10.05 below, upon the happening and continuance of any Event of Default, the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have the right upon providing the Trustee security and indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, by an instrument in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under this Indenture. The Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is prejudicial to rights of other Owners or would subject the Trustee to personal liability. SECTION 10.05. Restriction on Owners' Action. In addition to the other restrictions on the rights of Owners to request action upon the occurrence of an Event of Default and to enforce remedies set forth in this Article 11, no Owner of any of the Bonds shall have any right to institute any suit, action or proceeding in equity or at law for the enforcement of any trust under this Indenture, or any other remedy under this Indenture or on said Bonds, unless such Owner previously shall have given to the Trustee written notice of an Event of Default as hereinabove provided and unless the Owners of not less than 25% in aggregate principal amount of the Bonds then Outstanding shall have made written request of the Trustee to institute any such suit, action, proceeding or other remedy, after the right to exercise such powers or rights of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers in this Indenture granted, or to institute such action, suit or proceeding in its or their name; nor unless there also shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall not have complied with such request within a reasonable time; and such notification, request and offer of indemnity are hereby declared in 55394.00011 \8754149.4 80A3-81 07 every such case, at the option of the Trustee, to be conditions precedent to the execution of the trusts of this Indenture or for any other remedy under this Indenture; it being understood and intended that no one or more Owners of the Bonds secured by this Indenture shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture, or to enforce any right under this Indenture or under the Bonds, except in the manner in this Indenture provided, and that all proceedings at law or in equity shall be instituted, and maintained in the manner in this Indenture provided, and for the equal benefit of all Owners of Outstanding Bonds. SECTION 10.06. Power of Trustee to Enforce. All rights of action under this Indenture or under any of the Bonds secured by this Indenture which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceedings instituted by the Trustee shall be brought in its own name, as Trustee, for the equal and ratable benefit of the Owners of the Bonds subject to the provisions of this Indenture. SECTION 10.07. Remedies Not Exclusive. No remedy in this Indenture conferred upon or reserved to the Trustee or to the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given under this Indenture or now or hereafter existing at law or in equity or by statute. SECTION 10.08. Waiver of Events of Default; Effect of Waiver. The Trustee shall waive any Event of Default hereunder and its consequences and rescind any declaration of acceleration, upon the written request of the Owners of at least a majority in aggregate principal amount of all Outstanding Bonds. If any Event of Default shall have been waived as herein provided, the Trustee shall promptly give written notice of such waiver to the Authority and shall give notice thereof by first class mail, postage prepaid to all Owners of Outstanding Bonds if such Owners had previously been given notices of such Event of Default whether or not exhausted; but no such waiver, rescission and annulment shall extend to or affect any subsequent Event of Default, or impair any right or remedy consequent thereon. No delay or omission of the Trustee or any Owner of the Bonds to exercise any right or power accruing upon any default or Event of Default shall impair any such right or power or shall be construed to be a waiver of any such default or Event of Default, or an acquiescence therein; and every power and remedy given by this Article 1 I to the Trustee or the Owners of the Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient. SECTION 10.09. Application of Moneys. Any moneys received by the Trustee pursuant to this Article 10, together with any moneys which upon the occurrence of an Event of Default are held by the Trustee in any of the funds and accounts hereunder (other than the Rebate Fund and other than moneys held for Bonds not presented for payment) shall, after payment of all fees and expenses of the Trustee, and the fees and expenses of its counsel, be applied as follows: 55394.00011. \8754149.4 80A3-91 08 payable, (a) unless the principal of all of the Outstanding Bonds shall be due and FIRST - To the payment of the Owners of all installments of interest then due on the Bonds, in the order of the maturity of the installments of such interest and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment ratably, according to the amounts due on such installment, to the Owners, without any discrimination or privilege; SECOND - To the payment of the Owners of the unpaid principal of and premium, if any, on any of the Bonds which shall have become due (other than Bonds matured or called for redemption for the payment of which moneys are held pursuant to the provisions of this Indenture), in the order of their due dates and, if the amount available shall not be sufficient to pay in full the principal of and premium, if any, on such Bonds due on any particular date, then to the payment ratably, according to the amount due on such date, to the Owners without any discrimination; THIRD - To be held for the payment to the Owners as the same shall become due of the principal of, interest, and premium, if any, on the Bonds, which may thereafter become due either at maturity or upon call for redemption prior to maturity and, if the amount available shall not be sufficient to pay in full such principal and premium, if any, due on any particular date, together with interest then due and owing thereon, payment shall be made in accordance with the FIRST and SECOND paragraphs hereof. (b) if the principal of all of the Outstanding Bonds shall be due and payable, to the payment of the principal, and premium, if any, and interest then due and unpaid upon the Outstanding Bonds without preference or priority of any of principal, premium or interest over the others or of any installment of interest, or of any Outstanding Bond over any other Outstanding Bond, ratably, according to the amounts due respectively for principal, premium and interest, to the Owners without any discrimination or preference except as to any difference in the respective amounts of interest specified in the Outstanding Bonds. Whenever moneys are to be applied pursuant to the provisions of this Section 10.09, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. The Trustee shall give, by mailing by first class mail as it may deem appropriate, such notice of the deposit with it of any such moneys. 55394.00011 \8754149.4 80A4-0109 ARTICLE XI DEFEASANCE SECTION 11.01. Discharge of Bonds. (a) If the Authority shall pay or cause to be paid to the Owners of all Outstanding Bonds the interest thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated herein and therein, then the Owners of such Bonds shall cease to be entitled to the pledge of the Revenues as provided herein, and all agreements, covenants and other obligations of the Authority to the Owners of such Bonds hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority all such instruments as may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Authority all moneys held by it pursuant hereto which are not required for the payment of the interest on and principal of and redemption premiums, if any, on such Bonds. Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid and if, at the time of such payment, the Authority shall have kept, performed and observed all the covenants and promises in such Bonds and in this Indenture required or contemplated to be kept, performed and observed by the Authority or on its part on or prior to that time, then this Indenture shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to be entitled to the lien of this Indenture and such lien and all covenants, agreements and other obligations of the Authority hereunder shall cease, terminate become void and be completely discharged as to such Bonds. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the Bonds, interest payments and dates thereof, tender and exchange provisions, exchange and transfer of Bonds, replacement of mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds, nonpresentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for the payment of the principal of, redemption premium, if any, and interest on the Bonds, to pay to the Owners of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any Bonds, those provisions of this Indenture contained in Section 8.04 relating to the compensation of the Trustee shall remain in effect and shall be binding upon the Trustee and the Authority. (b) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) or this Section if (1) in case any of such Bonds are to be redeemed on any date prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it irrevocable instructions to mail notice of redemption of such Bonds on said redemption date, said notice to be given in accordance with Section 3.02 hereof, (2) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient or (B) Defeasance 55394.00011 \8754149.4 80A41110 Securities which are not subject to redemption prior to maturity (including any such Defeasance Securities issued or held in book entry form on the books of the Department of the Treasury of the United States of America) or tax exempt obligations of a state or political substitution thereof which have been defeased tinder irrevocable escrow instructions by the deposit of such money or Defeasance Securities and which are then rated in the highest rating category by the rating agency, the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with the Trustee at the same time, shall, as verified by an independent certified public accountant or other financial consultant acceptable to the Trustee, be sufficient to pay when due the interest to become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case may be, and the principal of and redemption premiums, if any, on such Bonds, and (3) in the event such Bonds are not by their terms subject to redemption within the next succeeding sixty (60) days, the Authority shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the Owners of such Bonds that the deposit required by clause (2) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and redemption premiums, if any, on such Bonds. SECTION 11.02. Unclaimed Money. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Bonds which remains unclaimed for two years after the date when such Bonds have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee shall at the Written Request of the Authority be repaid by the Trustee to the Authority as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make any such payment to the Authority, the Trustee shall, at the expense of the Authority, cause to be published once a week for two successive weeks in a Financial Newspaper, a notice that such money remains unclaimed and that, after a date named in such notice, which date shall not be less than 30 days after the date of the first publication of each such notice, the balance of such money then unclaimed will be returned to the Authority. ARTICLE XII MISCELLANEOUS SECTION 12.01. Liability of Authority Limited to Revenues. Notwithstanding anything contained herein, the Authority shall not be required to advance any money derived from any source of income other than the Revenues as provided herein for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds or for the performance of any agreements or covenants herein contained. The Authority may, however, advance funds for any such purpose so long as such funds are derived from a source legally available for such purpose without incurring an indebtedness. The Bonds shall be limited obligations of the Authority and shall be payable solely from the Revenues and amounts on deposit in the funds and accounts established 55394.00011 \8754149.4 80A 2111 hereunder (other than amounts on deposit in the Rebate Fund created pursuant to Section 7.02). The Bonds do not constitute a debt or liability of the City or of the State of California and neither the faith and credit of the City nor of the State are pledged to the payment of the principal of or interest on the Bonds. SECTION 12.02. Benefits of Indenture Limited to Parties. Nothing in this Indenture expressed or implied is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Authority, the Trustee and the registered Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Authority, the Trustee and the registered Owners of the Bonds. SECTION 12.03. Successor Is Deemed Included In All References To Predecessor. Whenever herein either the Authority or any member, officer or employee thereof is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions with respect to the administration, control and management of the Project that are presently vested in the Authority or such member, officer or employee, and all agreements and covenants required hereby to be performed by or on behalf of the Authority or any member, officer or employee thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not. SECTION 12.04. Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to make acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him the execution thereof; or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer. The ownership of any Bonds and the amount, maturity, number and date of holding the same may be proved by the registration books relating to the Bonds at the office of the Trustee. Any declaration, request or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond with respect to anything done or suffered to be done by the Authority in good faith and in accordance therewith. SECTION 12.05. Waiver of Personal Liability. No member, officer or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds by reason of their issuance, but nothing herein contained shall relieve any member, officer or employee of the Authority from the performance of any official duty provided by any applicable provisions of law or hereby. 55394.00011 \8754149.4 80A43112 SECTION 12.06. Acquisition of Bonds by Authority. All Bonds acquired by the Authority, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation. SECTION 12.07. Destruction of Cancelled Bonds. Whenever provision is made for the return to the Authority of any Bonds which have been cancelled pursuant to the provisions hereof, the Trustee shall destroy such Bonds and furnish to the Authority a certificate of such destruction. SECTION 12.08. Content of Certificates. Every Certificate of the Authority with respect to compliance with any agreement, condition, covenant or provision provided herein shall include (a) a statement that the person or persons making or giving such certificate have read such agreement, condition, covenant or provision and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based; (e) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such agreement, condition, covenant or provision has been complied with; and (d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or provision has been complied with. Any Certificate of the Authority may be based, insofar as it relates to legal matters, upon an opinion of Bond Counsel unless the person making or giving such certificate knows that the opinion of Bond Counsel with respect to the matters upon which his certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. Any opinion of Bond Counsel may be based, insofar as it relates to factual matters information with respect to which is in the possession of the Authority, upon a representation by an officer or officers of the Authority unless the counsel executing such opinion of Bond Counsel knows that the representation with respect to the matters upon which his opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous. SECTION 12.09. Accounts and Funds. Any account or fund required herein to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to all such accounts and funds shall at all times be maintained in accordance with sound corporate trust industry practice and with due regard for the protection of the security of the Bonds and the rights of the Owners. SECTION 12.10. Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Authority or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall retain all the benefit, protection and security afforded to them hereunder or any applicable provisions of law. The Authority and the Trustee hereby declare that they would have executed and delivered the Indenture and each and every 55394.00011 \8754149.4 v 0A44113 other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid. SECTION 12.11. Execution in Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 12.12. Law Governine. This Indenture shall be governed exclusively by the provisions hereof and by the laws of the State as the same from time to time exist. SECTION 12.13. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the Authority: Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA 92701 Attn: Executive Director If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attn: Department of Finance If to the Trustee: The Bank of New York Mellon Trust Company, N.A. 400 South Hope Street, Suite 500 Los Angeles, California 90071 Attn: Corporate Trust 55394.00011 \8754149.4 80/445114 IN WITNESS WHEREOF, the SANTA ANA FINANCING AUTHORITY has caused this Indenture to be signed in its name by its Executive Director and attested by its Secretary and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., in token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed by one of the officers thereunder duly authorized, all as of the day and year first above written. ATTEST: Secretary APPROVED AS TO FORM: Authority Counsel SANTA ANA FINANCING AUTHORITY am Executive Director THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee In Authorized Signatory 55394.00011 \8754149.4 80A46115 EXHIBIT A [FORM OF 2014 BOND] No. $ SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BOND, SERIES 2014 (PAYABLE SOLELY FROM INSTALLMENT PAYMENTS SECURED BY WATER SYSTEM NET REVENUES) Interest Maturity Dated Rate Date Date CUSIP REGISTERED OWNER: Cede & Co. PRINCIPAL SUM: DOLLARS Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York Corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. The SANTA ANA FINANCING AUTHORITY, a California joint exercise of powers authority, duly organized and validly existing under and pursuant to the laws of the State of California (the "Authority "), for value received, hereby promises to pay (but only out of the Revenues hereinafter referred to) to the registered owner specified above or registered assigns on the maturity date specified above (subject to any right of prior redemption provided for) the principal sum specified above, together with interest thereon from the interest payment date next preceding the date of authentication hereof (unless such date of authentication is during the period commencing after the fifteenth day preceding an interest payment date (the "Record Date ") through and including the next succeeding interest payment date, in which event this Bond shall bear interest from such interest payment date, or unless such date of authentication is on or before the first Record Date, in which event it shall bear interest from , 2014) until the principal hereof shall have been paid at the interest rate per annum specified above, payable on March 1, 2015 and semiannually thereafter on September I and March 1 in each year; provided, however, that if on the date of authentication of this Bond, interest is then in default on this Bond, such Bond shall bear interest from the interest payment date to which interest has previously been paid or made available for payment. 55394.00011 \8754149.4 80�, =1 16 The principal of this Bond shall be payable in lawful money of the United States of America at the corporate trust office of The Bank of New York Mellon Trust Company, N.A., as Trustee (the "Trustee ") in Los Angeles, California upon presentation and surrender of this Bond. Payment of interest on this Bond due on or before the maturity or prior redemption, thereof shall be made to the person in whose name such Bond is registered, as of the Record Date preceding the applicable interest payment date, on the registration books kept by the Trustee at its corporate trust office, such interest to be paid by check mailed by first class mail on such interest payment date to the registered owner at his address as it appears on such books. Interest on this Bond shall be payable in lawful money of the United States of America and shall be calculated on the basis of a 360 day year consisting of twelve 30 day months. It is hereby certified that all acts and proceedings required by law necessary to make this Bond, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal limited obligation of the Authority have been done and taken, and have been in all respects duly authorized. This Bond is one of a duly authorized issue of bonds of the Authority designated as its "Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely From Installment Payments Secured by Water System Net Revenues)" (the "Bonds ") in the aggregate principal amount of $ , all of like tenor and date (except for such variations, if any, as may be required to designate varying numbers, maturities and interest rates), and is issued under and pursuant to the provisions of an indenture, dated as of , 2014 (the "Indenture "), between the Authority and the Trustee (copies of which are on file at the office of the Secretary of the Authority and at the corporate trust office of the Trustee). The Bonds are issued to provide funds to refinance the cost of constructing and improving the water system (the "Project ") of the City of Santa Ana (the "City "). The Bonds are limited obligations of the Authority and are payable, as to interest thereon and principal thereof, solely from the revenues derived from installment payments paid by the City for the purchase of the Project (the "Revenues "). All the Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture by a pledge of the Revenues, which Revenues shall be held in trust for the security and payment of the interest on, principal of and redemption premiums, if any, on the Bonds as provided in the Indenture. The Bonds shall be limited obligations of the Authority and shall be payable solely from the Revenues and amounts on deposit in the fiords and accounts established under the Indenture (other than amounts on deposit in the Rebate Fund). The Bonds do not constitute a debt or liability of the City or of the State of California and neither the faith and credit of the City nor of the State of California are pledged to the payment of the principal of or interest on the Bonds. Additional revenue bonds payable from the Revenues may be issued which will rank equally as to security with the Bonds, but only subject to the conditions and upon compliance with the procedures set forth in the Indenture. Reference is hereby made to the Indenture and any and all amendments thereof and supplements thereto for a description of the 80AA_J 17 55394.00011 \8754149.4 terms under which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights of the registered owners of the Bonds. All of the terms of the Indenture are hereby incorporated herein and constitute a contract between the Authority and the registered owner of this Bond, to all the provisions of which the registered owner of this Bond, by acceptance hereof, agrees and consents. Each registered owner hereof shall have recourse to all of the provisions of the Indenture and shall be bound by all of the terms and conditions thereof. The Authority has agreed and covenanted that, for the payment of the interest on, the principal of and redemption premium, if any, on this Bond and all other Bonds of this issue authorized by the Indenture when due, there has been created and will be maintained by the Trustee a special fund into which all Revenues (other than deposits to the Rebate Fund created by the Indenture) shall be deposited, and the Authority has allocated such Revenues solely to the payment of the interest on and principal of and redemption premiums, if any, on the Bonds, and the Authority will pay promptly when due the interest on and the principal of and redemption premium, if any, on this Bonds and all other Bonds of this issue authorized by the Indenture out of said special fund, all in accordance with the terms and provisions set forth in the Indenture. Bonds maturing on or after September 1, _ shall be subject to redemption, at the option of the Authority, on or after September 1, in whole or in part on any date (by lot within any maturity) at the following redemption prices, plus accrued interest to the date fixed for redemption: Redemption Period (dates inclusive) September 1, through August 31, September 1, through August 31, September 1, and thereafter Redemption Price (percentage of principal amount) As provided in the Indenture, notice of redemption of this Bond shall be given by first class mail not less than 30 days nor more than 60 days before the redemption date to the registered owner hereof. If notice of redemption has been duly given and money for the payment of the redemption price is held by the Trustee, then on the redemption date designated in such notice, this Bond shall become due and payable, and from and after the date so designated, interest on this Bond shall cease to accrue and the registered owner of this Bond shall have no rights with respect hereto except to receive payment of the redemption price hereof. If an Event of Default (as defined in the Indenture) shall occur, the principal of all outstanding Bonds may be declared immediately due and payable upon the conditions, in the manner and with the effect provided in the Indenture; except that the Indenture provides that in certain events such declaration and its consequences may be rescinded by the registered owners of at least a majority in aggregate principal amount of the Bonds then outstanding. This Bond is transferable only on the books required to be kept for that purpose at the office of the Trustee by the registered owner hereof in person or by his duly authorized attorney upon payment of the charges provided in the Indenture and upon surrender of this Bond together with a written instrument of transfer in a form approved by the Trustee duly executed by 80A�_3118 55394.00011 \8754149.4 the registered owner or his duly authorized attorney, and thereupon a new fully registered Bond or Bonds in the same aggregate principal amount will be issued to the transferee in exchange therefor. The Trustee shall not be required to register the transfer of or exchange any Bond (1) during the period commencing with the close of business on the fifteenth day next preceding any interest payment date and ending on such interest payment date, (2) during the period commencing 15 days before the mailing of any notice of redemption and ending on the day of such mailing, or (3) which has been selected for redemption in whole or in part. The Authority and the Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of the interest hereon and principal hereof and for all other purposes, whether or not this Bond shall be overdue, and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of this Bond shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability on this Bond to the extent of the sum or sums so paid. The rights and obligations of the Authority and of the registered owners of the Bonds may be amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such amendment shall (1) extend the maturity of this Bond or reduce the interest rate hereon or otherwise alter or impair the obligation of the Authority to pay the interest hereon or principal hereof at the time and place and at the rate and in the currency provided herein without the express written consent of the registered owner of this Bond, (2) except as otherwise provided in the Indenture, permit the creation by the Authority of any pledge of the Revenues superior to or on a parity with the pledge created by the Indenture for the benefit of the Bonds, (3) modify any rights or obligations of the Trustee without its prior written assent thereto, all as more fully set forth in the Indenture. If the Authority shall pay or cause to be paid or there shall otherwise be paid to the registered owners of all outstanding Bonds the interest thereon, the principal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated herein and in the indenture, then the registered owners of such Bonds shall cease to be entitled to the pledge of the Revenues as provided in the Indenture, and all agreements, covenants and other obligations of the Authority to the registered owners of such Bonds under the Indenture shall thereupon cease, terminate and become void and be discharged and satisfied. This Bond shall not be entitled to any benefit, protection or security under the Indenture or become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been manually executed and dated by the Trustee. 55394.00011 \5754149.4 80A.- 55394,0001 IN WITNESS WHEREOF, the Santa Ana Financing Authority has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its Chairman and attested to by the facsimile signature of its Secretary, and has caused this Bond to be dated 2014. SANTA ANA FINANCING AUTHORITY UA Chairman Attest: Secretary 55394.00011 \8754149.4 80A7,,-120 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds described in the within - mentioned Indenture which has been authenticated and registered on , 2014. The Bank of New York Mellon Trust Company, N.A., as Trustee C Authorized Signatory 55394.00011 \8754149.4 80 A -121 [FORM OF ASSIGNMENT TO APPEAR ON 2014 BONDS] For value received the undersigned hereby sells, assigns and transfers unto the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to transfer the within bond on the books kept for registration thereof, with full power of substitution in the premises. Dated NOTE: The signature to this Assignment must correspond with the name as written upon the face of the bond in every particular, without alteration or enlargement or any change whatsoever. Signature Guaranteed: NOTICE: Signature(s) must guaranteed by an eligible guarantor institution (being banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Securities and Exchange Commission Rule 17A(d) 15. 55394.00011 \8754149.4 80 H -/ 22 80A -123 EXHIBIT 4 Escrow Agreement by and among the Santa Ana Financing Authority and City of Santa Ana and The Bank of Mellon Trust Company, N.A. 80A -124 ESCROW AGREEMENT by and among the SANTA ANA FINANCING AUTHORITY And CITY OF SANTA ANA and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Dated as of August 1, 2014 Santa Ana Financing Authority Water Revenue Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) 55394.0001 1 \8752525.2 80A-1 25 ESCROW AGREEMENT THIS ESCROW AGREEMENT (this "Escrow Agreement "), executed and entered into as of August 1, 2014, is by and among the SANTA ANA FINANCING AUTHORITY (the "Authority "), the CITY OF SANTA ANA (the "City ") and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as escrow agent (the "Escrow Agent "). WITNESSETH: WHEREAS, there are currently outstanding Santa Ana Financing Authority Water Revenue Bonds, Series 2004 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Prior Bonds "), in the original aggregate principal amount of WHEREAS, the Prior Bonds were issued under the Indenture, dated as of February 1, 2004 (as supplemented and amended, the "Prior Indenture "), by and between The Bank of New York Mellon Trust Company, N.A. (the "Trustee "), and the Authority; WHEREAS, the Prior Bonds are payable from component installment payments (the "2004 Installment Payments ") payable by the City tinder the Master Installment Purchase Agreement, dated as of February 1, 2004 (the "Master Installment Purchase Agreement "), between the City and the Authority, and the First Supplement to Master Installment Purchase Agreement, dated as of February 1, 2004, between the City and the Authority (the "Prior Supplement" and together with the Master Installment Purchase Agreement, the "Prior Installment Purchase Agreement ") and pertaining to the City's water system; WHEREAS, the Escrow Agent is the trustee under the Prior Indenture; WHEREAS, the City has determined that a savings will be realized by exercising its option under the Prior Installment Purchase Agreement to prepay said component installment payments, thereby providing the funds necessary to pay, when due, the principal of and interest on the Prior Bonds to and including September 1, 2014 and to redeem the Prior Bonds on September 1, 2014 (the "Redemption Date ") at a redemption price (the "Redemption Price ") equal to 102% of the principal amount of the Prior Bonds plus the accrued but unpaid interest on the Prior Bonds, to the Redemption Date; WHEREAS, in order to provide the funds necessary to exercise said option, the Authority has issued $ aggregate principal amount of Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Bonds ") pursuant to the Indenture, dated as of August 1, 2014 (the "Indenture "), by and between the Trustee and the Authority; WHEREAS, the Prior Bonds are subject to redemption on the Redemption Date and `the City and the Authority have determined to provide for the call for redemption on the Redemption Date of the Prior Bonds outstanding on the Redemption Date; NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Authority, the City and the Escrow Agent agree as follows: 80A-11 26 Section 1. Definitions. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Prior Indenture or, if no meanings are ascribed thereto in the Prior Indenture, such terms shall have the meanings ascribed thereto in the Prior Installment Purchase Agreement. Section 2. The Escrow Fund. (a) There is hereby established a fund (the "Escrow Fund ") to be held as an irrevocably pledged escrow by the Escrow Agent, which the Escrow Agent shall keep separate and apart from all other funds of the Authority, the City and the Escrow Agent and to be applied solely as provided in this Escrow Agreement. Pending application as provided in this Escrow Agreement, amounts on deposit in the Escrow Fund are hereby pledged and assigned solely to the payment of (i) the principal of and interest on the Prior Bonds coming due on and prior to the Redemption Date, and (ii) the Redemption Price on the Redemption Date, which amounts shall be held in trust by the Escrow Agent for the Owners of the Prior Bonds. (b) Upon the execution and delivery of the Bonds, the Escrow Agent is hereby directed to deposit in the Escrow Fund $ received from the proceeds of the sale of the Bonds as provided in Section 5.02 of the Indenture, and to transfer $ from the funds and accounts under the Prior Indenture to the Escrow Fund. (c) Upon the deposit of moneys pursuant to Section 2(b), the moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to purchase the aggregate principal amount of defeasance securities permitted by Section 12.01 of the Prior Indenture ( "Defeasance Securities ") set forth in Exhibit A hereto (the "Exhibit A Securities "), which principal, together with all interest due or to become due on such Exhibit A Securities, and any uninvested cash held by the Escrow Agent in the Escrow Fund, will be sufficient to make the payments required by Section 4 hereof. Section 3. Use and Investment of Moneys. (a) The Escrow Agent hereby acknowledges deposit of the moneys described in Section 2(b) and agrees to invest $ of such moneys in the Exhibit A Securities upon receipt of certification by a nationally recognized firm of independent certified public accountants that the Exhibit A Securities will mature in such principal amounts and earn interest in such amounts and, in each case, at such times, so that sufficient moneys will be available from maturing principal and interest on the Exhibit A Securities, together with any uninvested moneys then held by the Escrow Agent in the Escrow Fund, to make all payments required by Section 4 hereof. Except as provided in Section 3(b) or Section 3(c), the balance of the moneys described in Section 2 shall be held uninvested in the Escrow Fund. (b) Upon the written request of an authorized Authority representative, but subject to the conditions and limitations herein set forth, the Escrow Agent shall purchase substitute Defeasance Securities for the Defeasance Securities then held in an Escrow Fund with the proceeds derived from the sale, transfer, redemption or other disposition of Defeasance Securities then on deposit in such Escrow Fund and any uninvested money then held by the Escrow Agent hereunder in accordance with the provisions of this Section. Such sale, transfer, redemption or other disposition of Defeasance Securities then on deposit in such Escrow Fund 55394.00011 \8752525.2 8 0A a 127 and substitution of other Defeasance Securities shall be effected by the Escrow Agent upon the written request of an authorized Authority representative but only by a simultaneous transaction and only upon receipt of (i) certification by a nationally recognized firm of independent certified public accountants that the Defeasance Securities to be substituted, together with the Defeasance Securities which will continue to be held in such Escrow Fund, will mature in such principal amotmts and earn interest in such amotmts and, in each case, at such times so that sufficient moneys will be available from maturing principal and interest on such Defeasance Securities held in such Escrow Fund, together with any uninvested moneys, to make all payments required by Section 4 hereof, which have not previously been made, and (ii) receipt by the Escrow Agent of an opinion of counsel of recognized standing in the field of law relating to municipal bonds to the effect that the sale, transfer, redemption or other disposition and substitution of Defeasance Securities will not adversely affect the exclusion of interest on any Prior Bonds or on any Bonds from gross income for purposes of federal income taxation. (c) Upon the written request of an authorized Authority representative, but subject to the conditions and limitations herein set forth, the Escrow Agent will apply any moneys received from the maturing principal of or interest or other investment income on any Defeasance Securities held in an Escrow Fund, or the proceeds from any sale, transfer, redemption or other disposition of Defeasance Securities pursuant to Section 3(b) not required for the purposes of said Section (i) to the extent such moneys will not be required at any time for the purpose of making a payment required by Section 4 hereof, as certified by a nationally recognized finn of independent certified public accountants delivered to the Escrow Agent, such moneys shall be transferred to the Trustee for deposit in the Interest Account established under the Indenture upon the written request of an authorized Authority representative as received by the Escrow Agent, free and clear of any trust, lien, pledge or assignment securing the Prior Bonds or otherwise existing hereunder, and (ii) to the extent such moneys will be required for such purpose at a later date, shall, to the extent practicable, be invested or reinvested in Defeasance Securities maturing at times and in amounts sufficient, as certified by a nationally recognized firm of independent certified public accountants delivered to the Escrow Agent, to make such payment required by Section 4 hereof. (d) All Defeasance Securities purchased pursuant to this Escrow Agreement shall be deposited in and held for the credit of the Escrow Fund. Except as provided in this Section 3, no moneys or Defeasance Securities deposited with the Escrow Agent pursuant to this Escrow Agreement nor principal of, or interest payments or other investment income on, any such Defeasance Securities shall be withdrawn or used for any purpose other than, and shall be held in trust for, the payment of the Prior Bonds as provided by Section 4 hereof. (e) The Owners of the Prior Bonds shall have a first and exclusive lien on the moneys and Defeasance Securities in the Escrow Fund until such moneys and Defeasance Securities are used and applied as provided in this Escrow Agreement. (f) The Escrow Agent shall not be held liable for investment losses resulting from compliance with the provisions of this Escrow Agreement. Section 4. Payment of Prior Bonds. From the maturing principal of the Defeasance Securities held in the Escrow Fund and the investment income and other earnings thereon and 80A3128 55394.00011 \8752525.2 any uninvested money then held in the Escrow Fund, the Escrow Agent shall apply such amounts, as follows: (a) On each interest payment date for the Prior Bonds to and including the Redemption Date, the Escrow Agent shall pay interest on the Prior Bonds in accordance with the terms of the Prior Indenture. (b) On each principal payment date for the Prior Bonds to and including the Redemption Date, the Escrow Agent shall pay the principal of the Prior Bonds in accordance with the terms of the Prior Indenture. (c) On the Redemption Date, the Escrow Agent shall pay the Redemption Price in accordance with the terms of the Prior Indenture. To the extent that the amount on deposit in the Escrow Fund on the Redemption Date is in excess of the amount necessary to make the required payments with respect to the Prior Bonds, as shown in the then applicable escrow verification of the nationally recognized firm of independent certified public accountants, such excess shall be transferred to the Trustee for deposit in the Interest Account established under the Indenture. Section 5. Irrevocable Instructions to Mail Notices. The City hereby irrevocably designates the Prior Bonds for prior redemption on the Redemption Date as indicated in Section 4 hereof and hereby irrevocably instructs the Escrow Agent to give, in accordance with Section 3.02 of the Prior Indenture, mailed notice of redemption of the Prior Bonds. Section 6. Performance of Duties. The Escrow Agent agrees to perform the duties set forth herein and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. Section 7. Escrow Agent's Authority to Make Investments. The Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement except as provided in Section 3 hereof. The Escrow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement. Section 8. Indemnity. To the extent permitted by law, the City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees, expenses and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time (whether or not also indemnified against the same by the City or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the purchase of any securities to be purchased pursuant thereto, the retention of such securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement; provided, however, ro 55394.00011 \8752525.2 0A 4129 that the City shall not be required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent's respective successors, assigns, agents and employees or the material breach by the Escrow Agent of the terms of this Escrow Agreement. In no event shall the Authority, the City or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement. Section 9. Responsibilities of Escrow Agent. The Escrow Agent and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in connection with the execution and delivery of this Escrow Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or any securities deposited therein, the purchase of the securities to be purchased pursuant hereto, the retention of such securities or the proceeds thereof, the sufficiency of the securities or any uninvested moneys held hereunder to accomplish the redemption of the Prior Bonds, or any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement or by reason of any non - negligent act, non - negligent omission or non - negligent error of the Escrow Agent made in good faith in the conduct of its duties. The recitals of fact contained in the "Whereas" clauses herein shall be taken as the statements of the Authority and the City, and the Escrow Agent assumes no responsibility for the correctness thereof The Escrow Agent makes no representation as to the sufficiency of the securities to be purchased pursuant hereto and any uninvested moneys to accomplish the redemption of the Prior Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority or the City and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the Authority or the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter (except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds) may be deemed to be conclusively established by a written certification of the Authority or the City. Whenever the Escrow Agent shall deem it necessary or desirable that a matter specifically requiring a certificate of a nationally recognized film of independent certified public accountants or an opinion of counsel of recognized standing in the field of law relating to municipal bonds be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by a certificate signed by a nationally recognized film of certified public accountants or such opinion of counsel of recognized standing in the field of law relating to municipal bonds. 55394.00011 \8752525.2 v 0A 5130 Section 10. Amendments. The Authority, the City and the Escrow Agent may (but only with the consent of the Owners of all of the Prior Bonds and the Bond Insurer, if any, for the Prior Bonds) amend this Escrow Agreement or enter into agreements supplemental to this Escrow Agreement. Section 11. Term. This Escrow Agreement shall commence upon its execution and delivery and shall terminate on the date upon which the Prior Bonds have been paid in accordance with this Escrow Agreement. Section 12. Compensation. The City shall from time to time pay or cause to be paid to the Escrow Agent the agreed upon compensation for its services to be rendered hereunder, and reimburse the Escrow Agent for all of its reasonable advances in the exercise and perfonnance of its duties hereunder; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services rendered or expenses incurred by the Escrow Agent under this Escrow Agreement or otherwise. Section 13. Severability. if any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority, the City or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement. Section 14. Counterparts. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Section 15. Governing Law. This Escrow Agreement shall be construed under the laws of the State of California. 55394.00011 \8752525.2 80A7131 IN WITNESS WHEREOF, the parties hereto have executed and attested this Escrow Agreement by their officers thereunto duly authorized as of the day and year first written above. THE BANK OF NEW YORI{ MELLON TRUST COMPANY, N.A., AS ESCROW AGENT im Authorized Officer SANTA ANA FINANCING AUTHORITY L-A ATTEST: Secretary APPROVED AS TO FORM: Authority Counsel Executive Director CITY OF SANTA ANA M City Manager ATTEST: Clerk of the Council APPROVED AS TO FORM: City Attorney 55394.00011 \8752525.2 80A 71 32 EXHIBIT A UNITED STATES TREASURY SECURITIES Maturity Par Interest Type Date Amount Rate Price 55394.00011 \87525252 $OAA_133 EXHIBIT 5 Preliminary Official Statement relating to the Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014. 80A -134 g.9 �s U ^ �o v 0 y 0.� a'O V U U at/ o t: T oL 0 o O.F ❑�C5 c._ > ;N o �t0 m o � 2 y;n Yi o 0 Fv £1 03 a s �.o v G m F � U t3 w c � ° c 0.� o � U t UO N 0 m'� n v � � m m o o UY,� C O 5 � K ti m ° o 5 0.° vG3 G U Fa O N V. �w o N�a 7;a `U W a °'5 F� o C � V a. 5 �+ n J N N PRELIMINARY OFFICIAL STATEMENT DATED .2014 NEW ISSUE - FULL BOOI{ ENTRY ONLY RATING: S &P: " (See "RATING" herein) In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, subject to certain qualfeadons described herein, under existing statues, regulations, rules and court decisions, and assenting certain representations and ennplinme with certain covenants and requirements described herein, the late, ast on the Bonds is exchided fi our gross income for federal iacorne tax proposes and is not an item of tax preference for purposes of the federal alternative intension tax Imposed on individuals and corporations, ahhough for the purpose of computing the alternative minimuou tax imposed on certain corporations, such interest 1s taken into account in determining certain income and earnings. In the feather opinion ofBond Coomel, such interest is exempt front/ Califonia personal income taxes. See "TAX M- 47YERS" hereto, Dated: Date of Delivery SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BONDS, SERIES 2014 Due: September 1, as shown on inside cover The Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (the "Bonds ") are being issued pursuant to an Indenture of Trust, dated as of June 1, 2014 (the "Indenture ") between the Santa Ana Financing Authority (the "Authority") and The Bank of New York Mellon Trust Company, N.A., Los Angeles, California (the `Trustee "), and will be secured as described in this Official Statement. The Bonds are being issued (i) to fivanee a portion of the acquisition and construction of certain improvements (the "Project") to the water system (the "Water System ") of the City of Santa Ana (the "City'), (ii) to refund certain outstanding obligations of the City's Water System, and (iii) to pay certain costs of issuing the Bonds. See "THE PROJECT," "THE FINANCING PLAN" and "ESTIMATED SOURCES AND USES OF FUNDS," The Bonds will be issued in book -entry form, initially registered in the name of Cede & Co., New York, New York, as nominee of The Depository Trust Company ( "DTC "), New York, New York. Interest on the Bonds will be payable on March 1 and September 1 of each year, connmencing March 1, 2015. Purchasers will not receive certificates representing their interest in the Bonds. Individual purchases will be in integral multiples of $5,000. Payments of principal and interest will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who will remit such payments to the beneficial owners of the Bonds. The Bonds are payable from Revenues of the Authority, consisting principally of Installment Payments by the City pursuant to a Master Installment Purchase Agreement, dated as of , 2014, as supplemented by that First Supplement to the Master Installment Purchase Agreement, dated as of , 2014 (collectively, the "Installment Purchase Agreement') between the City and the Authority. The Authority has assigned, among other things, its right to receive Installment Payments to the Trustee. The Installment Payments are a special limited obligation of the City, payable from and secured by a pledge of and first lien on all Net System Revenues, subject to the parity lien, if any, of any additional obligations as provided for in the Installment Purchase Agreement, in the Payment Fund held by the City in bust under the Installment Purchase Agreement, The Bonds are subject to redemption prior to maturity asset forth herein. (See "THE BONDS -- Redemption of the Bonds. ") THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED UNDER THE INDENTURE AND ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE OR LIEN UPON ANY PROPERTY OF THE AUTHORITY OR THE CITY, OR ANY OF THE AUTHORITY'S INCOME OR RECEIPTS, EXCEPT THE REVENUES, THE BONDS ARE NOT A DEBT, OBLIGATION OR LIABILITY OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS AND NEITHER THE FAITH AND CREDIT OF THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS ARE PLEDGED TO THE PAYMENT OF THE BONDS, AND NEITHER THE AUTHORITY NOR THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION THEREFOR, AND NEITHER THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE THEREFOR, NOR IN ANY EVENT SHALL THE BONDS OR ANY INTEREST OR REDEMPTION PREMIUM BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY AS SET FORTH IN THE INDENTURE. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE INSTALLMENT PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. This cover page contains information for general reference only. It is not a summary of the security or terms of this issue. Investors must read the entire Official Statement, including the section entitled "RISK FACTORS," for a discussion of special factors which should be considered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds. The Bonds are offered when, as and if issued by the Authority, and accepted by the Underwriter, subject to the approval of Best Best & Krieger LLP, Riverside, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Underwriter by its counsel, Frdlmight & Jawomki, LLP, Los Angeles, California, a member of Norton Rose Fhlbright and for the Authority and the City by Best Best & Krieger LLP, Riverside, California. It is anticipated that the Bonds in book -entry form will be available for delivery in New York, New York on , 2014. Dated: , 2014 Preliminary, subject to change. STIFEL 80A -135 MATURITY SCHEDULE $ * Serial Bonds (Base CUSIP: ) Maturity Date Principal Interest (September 1) Amount Rate Yield CUSIP® $ % Term Bonds Due September 1, , Yield: %* (CUSIP: ) Preliminary, subject to change. ° CUSIPO is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of American Bankers Association by S &P Capital IQ. CopyrightO 2014 CUSIP Global Services. All rights reserved. This data is not intended to create a database and does not serve in any way a substitute for the CUSIP Service Bureau. CUSIP© numbers are provided for convenience of reference only. The Santa Ana Financing Authority, the City of Santa Ana and the Underwriters do not take any '8`0 Abilitt SOe accuracy of the CUSIP® numbers SANTA ANA FINANCING AUTHORITY Miguel A. Pulido, Chairman Sal Tinajero, Vice Chairman Vincent Sarmiento, Director Michele Martinez, Director Agelica Amezcua, Director David Benavides, Director Roman Reyna, Director CITY OF SANTA ANA, CALIFORNIA COUNCIL MEMBERS Miguel A. Pulido, Mayor Sal Tinajero, Mayor Pro Tem, Ward 6 Vincent Sarmiento, Councilmember, Ward 1 Michele Martinez, Councilmember, Ward 2 Agelica Amezcua, Councilmember, Ward 3 David Benavides, Councilmember, Ward 4 Roman Reyna, Councilmember, Ward 5 CITY STAFF David Cavazos, City Manager Sonia Carvalho, City Attorney Maria Huizar, Clerk of the Council Francisco Gutierrez, Executive Director, Finance & Management Services Agency William Galvez, Interim Executive Director, Public Works Agency Nabil Saba, Water Resources Manager, Public Works Agency SPECIAL SERVICES Bond Counsel and Disclosure Counsel Best Best & Krieger LLP Riverside, California Financial Advisor Urban Futures Incorporated Orange, California Trustee The Bank of New York Mellon Trust Company, N.A. Los Angeles, California Verification Agent [To Come] 80A -137 GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No dealer, broker, salesperson or other person has been authorized by the Authority to give any information or to make any representations in connection with the offer or sale of the Bonds other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person, in any jurisdiction where such offer, solicitation or sale would be unlawful. The information set forth herein has been obtained from sources that are believed to be reliable, but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation, by the Authority. Neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the Authority since the date hereof. The information and expressions of opinion stated herein are subject to change without notice. Certain statements included or incorporated by reference in this Official Statement constitute "forward - looking" statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the words "expects," "forecasts," "projects," "intends," "anticipates," "estimates," "assumes" and analogous expressions. The achievement of certain results or other expectations contained in such forward - looking statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those that have been projected. No assurance is given that actual results will meet the forecasts of the Authority in any way, regardless of the optimism communicated in the information, and such statements speak only as of the date of this Official Statement. The Authority disclaims any obligation or undertaking to release publicly any updates or revisions to any forward - looking statement contained herein to reflect any changes in the expectations of the Authority with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All summaries of the Indenture and the Installment Purchase Agreement (as defined herein), and of statutes and other documents referred to herein do not purport to be comprehensive or definitive and are qualified in their entireties by reference to each such statute and document. This Official Statement, including any amendment or supplement hereto, is intended to be deposited with one or more depositories. This Official Statement does not constitute a contract between any Owner of a Bond and the Authority. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933 or the Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Sections 3(a)(2) and 3(a)(12), respectively, for the issuance and sale of municipal securities. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR AFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. 80A -138 TABLE OF CONTENTS INTRODUCTION ........................ ..............................1 General................................. ..............................1 The Authority and the City .. ............................... l Purpose................................. ..............................1 Security for the Bonds .......... ..............................2 Limited Obligations .............. ..............................2 B -1 Forward - Looking Statements .............................2 Summaries Not Definitive .... ..............................3 C -1 THE FINANCING PLAN ............ ..............................4 Refunding of Prior Obligations ..........................4 -1 TheProject ............................ ..............................4 E -1 Environmental Compliance .. ..............................4 ESTIMATED SOURCES AND USES OF FUNDS........................... ............................... 5 DEBT SERVICE .......................... ..............................6 THEBONDS ................................ ..............................7 40 Description of the Bonds ...... ..............................7 Redemption of the Bonds ..... ..............................8 Parity Obligations ................. ..............................9 Subordinate Obligations ...... ............................... 9 Boole -Entry Only System ..... .............................10 SECURITY FOR THE BONDS . ..............................1 I General.............................. ............................... 11 Net System Revenues ........ ............................... I 1 Obligations of City Under Installment Purchase Agreement ....... .............................12 Rate Covenant ...................... .............................13 Pledge Under the Indenture . .............................13 Application of System Revenues ...................... 14 THE AUTHORITY ..................... .............................15 THECITY ................................... .............................16 THE WATER SYSTEM .............. .............................17 General; Service Area .......... .............................17 Organization and Staff ......... .............................17 WaterSales .......................... .............................19 LandUse .............................. .............................20 The Project; Future Water System Improvements ............... ............................... 20 Storage Capacity .................. .............................20 Water Sources and Supply; Water Purchases ...................... ............................... 20 Water Demand and Deliveries ..........................29 Water System Rates and Charges .....................29 Collection Procedures .......... .............................32 Outstanding Water System Indebtedness .........32 Largest Customers ............... .............................33 Historic Water Sales Revenues .........................33 Historic Operating Results ... .............................34 Historical Operating Results and Debt Service Coverage ........... .............................35 Projected Operating Results and Debt Service Coverage ........... .............................36 RISK FACTORS ......................... .............................37 Water System Demand and Growth .................37 Water System Expenses ....... .............................37 A -1 Parity Obligations ................ .............................37 Proposition 218 .................... .............................37 Constitutional Limit on Appropriations, B -1 Fees and Charges ............ .............................38 Limited Recourse on Default ............................38 C -1 No Debt Service Reserve Account ...................38 Limitations on Remedies Available; -1 Bankruptcy..................... ....... .......... ...........38 E -1 No Obligation or Ability to Tax .......................39 Changein Law ..................... .............................39 Geologic and Topographic ... .............................39 Risks Associated with OCWD and MW D ............................ ............................... 40 Impact of State Budget ........ .............................40 Secondary Market for Bonds ............................40 Federal Tax - Exempt Status of the Bonds .........40 IRS Audit of Tax-Exempt Issues ......................41 TAX MATTERS .......................... .............................42 NO LITIGATION ........................ .............................43 RATING...................................... .............................43 FINANCIAL ADVISOR ............. .............................43 PROFESSIONAL FEES .............. .............................43 APPROVAL OF LEGALITY ...... .............................43 UNDERWRITING ...................... .............................44 ADDITIONAL INFORMATION .............................45 APPENDIX A — CITY OF SANTA ANA GENERAL DEMOGRAPHIC INFORMATION ............. ............................... A -1 APPENDIX B — SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS .. ............................... B -1 APPENDIX C — FORM OF FINAL OPINION OF BOND COUNSEL .... ............................... C -1 APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT .....................D -1 APPENDIX E — BOOK ENTRY PROVISIONS. E -1 80A =-139 MAP 80A -140 OFFICIAL STATEMENT SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BONDS, SERIES 2014 INTRODUCTION General The purpose of this Official Statement of the Santa Ana Financing Authority (the "Authority ") is to furnish information regarding the issuance and sale of $ ` principal amount of Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (the "Bonds ") pursuant to the provisions of an Indenture of Trust, dated as of 2014 (the "Indenture ") between the Authority and The Bank of New York Mellon Trust Company, N.A. (the "Trustee "). The Bonds will be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985 (Article 4, Chapter 5, Division 7, Title 1 of the California Government Code) (the "Bond Law "). The Authority and the City The Authority was established pursuant to a Joint Exercise of Powers Agreement dated August 1, 1993, between the City of Santa Ana (the "City ") and the Santa Ana Redevelopment Agency (the "Agency "), now the Successor Agency to the Santa Ana Redevelopment Agency. The Authority was created for the purpose of providing financing for public capital improvements jointly owned and operated by the City and the Agency. The City of Santa Ana, county seat of Orange County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City provides traditional city services, including fire protection (192 sworn personnel with ten stations) and police protection (329 and three stations). The City, has approximately [1,492] employees. The Water System provides water service through the municipal water department to over 44,657 accounts. There are two libraries and 41 parks in the City. Public education for grades K -12 is provided by the Santa Ana Unified School District, the Garden Grove Unified School District, the Orange Unified School District and the Tustin Unified School District. The City has served as the county seat since the formation of Orange County in 1889. Numerous government offices have taken advantage of the City's central location and position as county seat. City, county, state and federal offices are conveniently located in the multi - government civic center in the heart of the City. The City has an industrial base which supports the local economy. The City Council is composed of seven members elected biannually at large to four year alternating terms. The Mayor and Mayor Pro -Tem are selected by the City Council. The City has a council /manager form of government. The City Manager is appointed by the City Council to manage the daily affairs of the City and to implement policies established by the Council. For other selected information concerning the City, see "APPENDIX A - CITY OF SANTA ANA GENERAL DEMOGRAPHIC INFORMATION." Purpose The Bonds are being issued (i) to provide funds to refund in full the Authority's Water Revenue Refunding Bonds, Series 2004, delivered in the initial principal amount of $20,110,000, of which $12,785,000 is currently outstanding (the "Prior Obligations "), (ii) to finance a portion of the acquisition and construction of x Preliminary, subject to change. 80A -141 certain improvements (the "Project ") to the water system (the "Water System ") of the City, and (iii) to pay certain costs of issuance of the Bonds. The Prior Obligations were issued to refinance outstanding obligations of the Water System and to finance the acquisition and construction of additional improvements to the Water System. See "THE FINANCING PLAN" and "ESTIMATED SOURCES AND USES OF FUNDS" herein. See "THE WATER SYSTEM" herein for a description of the City's water system. Security for the Bonds The Bonds are payable from Revenues, consisting principally of Installment Payments made by the City pursuant to a Master Installment Purchase Agreement dated as of , 2014 (the "Master Installment Purchase Agreement "), between the City and the Authority as supplemented by that First Supplement to Master Installment Purchase Agreement, dated as of 1 , 2014 (the "First Supplement," and together with the Master Installment Purchase Agreement the "Installment Purchase Agreement "). Pursuant to the Indenture the Authority has assigned to the Trustee, among other things, its right to receive Installment Payments. The Installment Payments are a special limited obligation of the City, payable from and secured by a pledge of and first lien on all Net System Revenues in the Payment Fund held by the City under the Installment Purchase Agreement subject to the parity lien, if any, of any additional obligations as provided for in the Installment Purchase Agreement. See "SECURITY FOR THE BONDS." The Installment Payments are calculated to be an amount sufficient to permit the Authority to pay all scheduled debt service on the Bonds when due. See APPENDIX B "SUMMARY OF DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS." Limited Obligations THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED UNDER THE INDENTURE. THE BONDS ARE NOT A DEBT, LIABILITY OR OBLIGATION OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS AND NEITHER THE FAITH AND CREDIT OF THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS ARE PLEDGED TO THE PAYMENT OF PRINCIPAL OR INTEREST ON THE BONDS AND NEITHER THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE THEREFOR, NOR HAS LEVIED ANY TAXES THEREFOR NOR IS OBLIGATED TO LEVY ANY TAXES THEREFOR, NOR IN ANY EVENT SHALL THE BONDS OR ANY INTEREST OR REDEMPTION PREMIUM THEREON BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY AS SET FORTH IN THE INDENTURE. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE INSTALLMENT PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. Forward- Looking Statements This Official Statement contains forward - looking statements, including (i) statements containing projections of Net System Revenues and other financial items, (ii) statements of future economic performance of the Water System, and (iii) statements of the assumptions underlying or relating to statements described in (i) and (ii) above, (collectively, the "Forward - Looking Statements "). All statements other than statements of historical facts included in this Official Statement, including without limitation statements under "THE WATER SYSTEM" and "SECURITY FOR THE BONDS" regarding the financial position, capital resources and status of the City and the Water System are Forward - Looking Statements. Although the City believes that the expectations reflected in such Forward - Looking Statements are reasonable, no assurance can be given that such expectations will prove to be correct. Important factors which could cause actual results to differ materially from expectations of the City (collectively, the "Cautionary Statements ") are disclosed in this Official Statement. All Forward - Looing Statements attributable to the City or the Authority are expressly qualified in their entirety by the Cautionary Statements. 80A -142 Summaries Not Definitive Definitions of certain capitalized terms herein are contained in Appendix B hereto, and are incorporated herein by reference. Definitions of certain terms used in this Official Statement, and the summaries of and references contained herein to the Indenture, the Bonds, the Installment Purchase Agreement, the Continuing Disclosure Agreement, statutes and other documents do not purport to be comprehensive or definitive and are qualified by reference to each such document, instrument or statute. Additional copies of this Official Statement and copies of the Indenture and the Installment Purchase Agreement may be obtained from the Trustee or the City, 20 Civic Center Plaza, Santa Ana, California 92502. 80A -143 THE FINANCING PLAN Refunding of Prior Obligations The Authority is selling the Bonds to provide, among other things, the moneys (together with other available funds) necessary to refund in whole the Prior Obligations. A portion of the proceeds of the Bonds, along with certain remaining funds from the Prior Obligations, will be used to establish an escrow fund (the "Escrow Fund ") for the Prior Obligations to be held in trust by The Bank of New York Mellon Trust Company, N.A., acting as escrow bank for the Prior Obligations (the "Escrow Bank") under an Escrow Deposit and Trust Agreement between the Authority and the Escrow Bank, dated as of 1, 2014 (the "Escrow Agreement "). Proceeds deposited into the Escrow Fund will be used to pay the debt service on the Prior Obligations thirty (30) following the Closing Date, and to pay the redemption price thereof, as specified in the Escrow Agreement. Upon deposit of such proceeds and other moneys into the Escrow Fund, the Prior Obligations will no longer be deemed outstanding and will no longer have a claim on Net System Revenues. Moneys deposited in the Escrow Fund are not available to pay principal of or interest on the Bonds. The Project The City anticipates the Proj ect to consist of the facilities listed below. The total cost of construction of the Project is estimated by the City to be approximately $31,526,400. Amounts not funded from proceeds of the Bonds are expected to be funded from funds on hand with the City and other available resources of the City. It is expected that the facilities will be installed within three years. Estimated costs of the Project components are as follows: Facility n Estimated Cost Construction Period Water Main Replacement $2,700,000 2015 -16 Pump Station Improvements 4,860,000 2014 -15 Total $7,560,000 The City may replace these improvements with other improvements or betterments to the Water System. See "THE WATER SYSTEM — The Projects, Future Water System Improvements" for additional improvements. Environmental Compliance The Project and its various components are subject to the California Environmental Quality Act ( "CEQA "). Under CEQA, a project which may have a significant effect on the environment and which is to be carried out or approved by a public agency must comply with a comprehensive environmental review process, including the preparation of an Environmental Impact Report ( "EIR "). Contents of an FIR include a detailed statement of the project's significant environmental effects; any such effects which cannot be avoided if the project is implemented; mitigation measures proposed to minimize such effects; alternatives to the proposed project; any significant irreversible environmental changes which would result from the project; the project's growth- inducing impacts; and a brief statement setting forth the agency's reasons for determining that certain effects are not significant and hence do not require discussion in an EIR. If the agency determines that the project itself will not have a significant effect on the environment, it may adopt a negative declaration to that effect and need not prepare an FIR. The City expects that the water main replacement improvements will be categorically exempt from CEQA and the pump station improvements will require the City to prepare a mitigated negative declaration for compliance with CEQA, and does not believe that environmental or permitting considerations will adversely affect the completion of the Project within the contemplated budget or the estimated timetable. 80A -144 ESTIMATED SOURCES AND USES OF FUNDS The proceeds received from the sale of the Bonds are to be applied as follows: Sources of Funds: Principal Amount of Bonds Original Issue Premium/Discount Amount Relating to Prior Obligations TOTAL SOURCES Uses of Funds: Transfer to Escrow Fund Deposit in Project Fund Costs of lssuance�') TOTAL USES Includes fees and expenses of Bond Counsel and Disclosure Counsel, the Financial Advisor and the Trustee, rating agency fee, Underwriters' discount and other costs of issuing the Bonds. 80A -145 DEBT SERVICE The Installment Purchase Agreement requires the City to make Installment Payments on or before each March 1 and September 1, beginning March 1, 2015, and continuing until the end of the term of the Installment Purchase Agreement. The following is an annualized schedule of debt service on the Bonds for each Bond Year until maturity, assuming no redemption other than sinking fund redemption. Period Ending (September 1) Principal Interest 80A -146 Total Debt Service THE BONDS Description of the Bonds The Bonds shall be delivered in the form of fully registered Bonds, without coupons, in integral multiples of $5,000, and shall be dated the date of initial delivery. The Bonds will mature on the dates and in the amounts set forth on the inside front cover of this Official Statement. The Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company, New York, New York ( "DTC "). So long as DTC, or Cede & Co. as its nominee, is the registered owner of all Bonds, all payments on the Bonds will be made directly to DTC, and disbursement of such payments to the DTC Participants (defined below) will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners (defined in APPENDIX E hereto) will be the responsibility of the DTC Participants, as more fully described hereinafter. See "Book -Entry System" below. Interest on the Bonds shall become payable on March 1 and September 1 of each year, commencing March 1, 2015, and continuing to and including the date of maturity or prior redemption, whichever is earlier. Principal of the Bonds shall become payable on September 1 in each of the years and in the amounts set forth on the inside cover page of this Official Statement. Principal and premium, if any, of the Bonds shall become payable upon presentation and surrender thereof at the corporate trust office of the Trustee. Interest on the Bonds shall be based on a 360 -day year composed of twelve 30 -day months. Payment of interest on any Bond on any Interest Payment Date or Redemption Date will be made to the person appearing on the registration books of the Trustee as the Owner as of the Record Date immediately preceding such Interest Payment Date or Redemption Date, as the case may be, such interest to be paid by check mailed by first class mail on the Interest Payment Date to such Owner at his address as it appears on such registration books; provided however, that payment of interest may be by wire transfer in immediately available funds to an account in the continental United States of America to any Owner of Bonds in the aggregate principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee prior to the applicable Record Date. Moneys due on any Interest Payment Date which is not a Business Day shall be paid on the immediately following Business Day, without the accrual of additional interest thereon. See "— Book - Entry Only System." Any Bond may be transferred upon presentation of such Bond to the Trustee by the person in whose name it is registered, in person or by his duly authorized attorney. Upon surrender, together with a duly executed instrument of transfer in form acceptable to the Trustee, and payment of a sum sufficient to cover any tax or other governmental charge, the Trustee shall execute and deliver a new Bond or Bonds of the same maturity, for a like aggregate principal amount. The Trustee shall not be required to transfer any Bond during the period established by the Trustee for selection of Bonds for redemption, nor shall the Trustee be required to transfer any Bond or portion thereof selected for redemption. Bonds may be exchanged at the corporate trust office of the Trustee for a like aggregate principal amount represented by such Bonds of other authorized denominations of the same maturity. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. 80A -147 Redemption of the Bonds The Bonds maturing on or after September 1, shall be subject to redemption, at the option of the Authority, upon at least 45 days prior written notice to the Trustee specifying the date and amount of such redemption, on or after September 1, in whole or in part on any date (by lot within any maturity and among maturities as specified by the Authority) at the following redemption prices, plus accrued interest to the date fixed for redemption: Redemption Period Redemption Price (dates inclusive) (percentage of principal amount) September 1, through August 31, % September 1, through August 31, September 1, and thereafter The Bonds maturing on September 1, , are subject to mandatory sinking fund redemption prior to maturity on September 1, , and each September 1 thereafter to maturity from mandatory sinking fund payments equal to the principal amount in the principal amounts as set forth in the table below, with accrued interest to date set for redemption, without premium as follows: Bonds Maturing September 1, Redemption Date Principal Amount to (September 1) be Redeemed (maturity) Notice of Redemption; Conditional Notice. Notice of redemption shall be given by the Trustee, not less than 30 nor more than 60 days prior to the redemption date to (i) the respective Owners of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee by first class mail and (ii) the Securities Depositories and the Information Services by certified or registered mail or overnight delivery. Each notice of redemption shall state the date of such Bonds the CUSIP number (if any) of the maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the Bonds of such maturity, to be redeemed and, in the case of the Bonds to be redeemed in part only, the respective portions of the principal amount to be redeemed. Each such notice shall also state that on said date there will become due and payable on each of said Bonds and in the case of a Bond to be redeemed in part only, the specified portion of the principal amount to be redeemed, together with interest accrued to the redemption date, and that from and after such redemption date interest shall cease to accrue, and shall require that such Bonds be then surrendered at the address of the Trustee specified in the redemption notice. The Authority shall have the right to rescind any optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in fall of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default under the Indenture. The Authority and the Trustee shall have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent. Effect of Redemption. The Bonds so called for redemption being held by the Trustee, on the redemption date designated in such notice, the Bonds so called for redemption shall become due and payable, interest on the Bonds so called for redemption shall cease to accrue, said Bonds shall cease to be entitled to any benefit or security under the Indenture, and the Owners of said Bonds shall have no rights in respect thereof except to receive payment of the redemption p180Ape1 ire by the Trustee to give notice pursuant to this paragraph to any one or more of the Information Services or Securities Depositories, or the insufficiency of any such notice shall not affect the sufficiency of the proceedings for redemption. Failure by the Trustee to mail notice of redemption pursuant to this paragraph to any one or more of the respective Owners of any Bonds designated for redemption shall not affect the of the proceedings for redemption with the Owners to whom such notice was mailed. Parity Obligations (a) The City may not create any Obligations the payments of which are senior or prior in right to the payment by the City of Parity Obligations. (b) Without regard to the conditions stated below, the City may at any time enter into or create an obligation or commitment which is a Credit Provider Reimbursement Obligation or a Qualified Swap Agreement provided the Obligation to which the Qualified Swap Agreement relates is a Parity Obligation. (c) The City may at any time and from time to time issue or create Parity Obligations, provided: (1) The City is not in default under the term of this Agreement. (2) (i) Net System Revenues, as certified by the City, for the most recent audited Fiscal Year preceding the date of execution of the Parity Obligations, plus (ii) projected Net System Revenues (as described below) are at least equal to 120% of Aggregate Maximum Annual Debt Service. The projections described in (2)(ii) above may take into account (A) increases in the charges made for service from the Water System which have been adopted by the City prior to the date of issuance or incurrence of such Parity Obligations, but which were not in effect for all or part of such preceding Fiscal Year, and which are scheduled to be effective in the period of Debt Service shown for such Parity Obligations, and (2) an allowance for estimated additional average annual Net System Revenues from any additions or connections to or improvements or extensions of the Water System which have occurred from the end of Fiscal Year preceding the date of execution of the Parity Obligations. (3) Notwithstanding the requirements described above, Parity Obligations may be issued or incurred to refund outstanding Parity Obligations if, after giving effect to the application of the proceeds thereof, total Debt Service will not be increased in any Fiscal Year in which Parity Obligations (outstanding on the date of issuance or incurrence of such refunding Parity Obligations, but excluding such refunding Parity Obligations) not being refunded are outstanding. (4) The City may but shall not be required to fund a reserve fund or obtain a reserve fund surety or instrument with respect to any Parity Obligations. If a reserve fund is funded for any Parity Obligations or a qualified reserve fund surety or instrument is obtained with respect to any Parity Obligations, such funded reserve fund or qualified reserve fund surety or instrument shall secure only the related Parity Obligations and shall not support the Bonds or any other Parity Obligations. For purposes of calculating the Debt Service coverage requirement described above, System Revenues shall exclude reimbursements from the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program), and Debt Service shall be net of such reimbursements. Subordinate Obligations The City further covenants that it shall not issue or incur any Subordinate Obligations unless Net System Revenues or projected Net System Revenues, calculated in the same manner as described in paragraph (b) above, are equal to at lea8�lo9�t gm of Debt Service on all Parity Obligations and Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations. Book -Entry Only System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully- registered Bonds registered in the name of Cede & Co., (DTC's partnership nominee). One fully- registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. See "APPENDIX E - BOOK ENTRY PROVISIONS" herein. The Authority, the City and the Trustee cannot and do not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium on the Bonds paid to DTC or its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Authority, the City and the Trustee are not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto. 80A -150 10 SECURITY FOR THE BONDS General THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED UNDER THE INDENTURE AND ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF, OR CHARGE OR LIEN UPON ANY PROPERTY OF THE AUTHORITY OR THE CITY, OR ANY OF THE AUTHORITY'S INCOME OR RECEIPTS, EXCEPT THE REVENUES. THE BONDS ARE NOT A DEBT, LIABILITY OR OBLIGATION OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS AND NEITHER THE FAITH AND CREDIT OF THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS ARE PLEDGED TO THE PAYMENT OF THE BONDS, AND NEITHER THE AUTHORITY NOR THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION, AND NEITHER THE CITY, THE STATE NOR ANY OF ITS POLITICAL SUBDIVISIONS IS LIABLE FOR THE BONDS, NOR IN ANY EVENT ALL THE BONDS OR ANY INTEREST OR REDEMPTION PREMIUM BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY AS SET FORTH IN THE INDENTURE. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE INSTALLMENT PAYMENTS CONSTITUTES AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION. "Revenues" consist primarily of Installment Payments paid by the City to the Authority pursuant to the Installment Purchase Agreement. The Authority shall pay to the Trustee all Revenues, which the Trustee shall deposit in the Bond Fund to be used: first, for payment of debt service (including mandatory sinking fund redemptions), and second, for replenishment of the Reserve Account in the event its balance is less than the Reserve Requirement, as and to the extent required by the Indenture, see "APPENDIX B." The Authority, pursuant to the Indenture, has assigned to the Trustee its right to receive all Installment Payments from the City under the Installment Purchase Agreement and, effective immediately on default by the City under the Installment Purchase Agreement and without any further act on the part of the Authority, any and all of the other rights of the Authority under the Installment Purchase Agreement as may be necessary to enforce payment of such Installment Payments when due or otherwise to protect the interests of the Owners of the Bonds. All Net System Revenues (defined below) are irrevocably pledged by the City to the payment of the Installment Payments and debt service on Parity Obligations as provided in the Installment Purchase Agreement, and the Net System Revenues shall not be used for any other purpose while any of the Installment Payments remain unpaid; provided, however, that out of the Net System Revenues there may be apportioned such sums for such purposes as are expressly permitted by the Installment Purchase Agreement, including payment of debt service on any Parity Obligations. This pledge shall constitute a first lien on the Net System Revenues for the payment of the Installment Payments and debt service on any Parity Obligations in accordance with the Installment Purchase Agreement. The Bonds are not secured by a direct lien on the Water System or any other property of the City. In the Installment Purchase Agreement, the City covenants that, so long as any Bonds are outstanding, the City will not issue or incur any obligations payable from Net System Revenues superior to the payment of the Installment Payments. The City is authorized to issue additional Parity Obligations secured by Net System Revenues with a lien on a parity basis with the lien of Installment Payments, provided it complies with certain provisions in the Installment Purchase Agreement. See "THE BONDS -- Issuance of Parity Obligations." The City is also authorized to issue subordinate debt secured by Net System Revenues. Net System Revenues Net System Revenues are System Revenues less Maintenance and Operation Costs of the Water System. "System Revenues" is defined in the Installment 'Purchase Agreement to mean all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the Water System, including, without limiting the generality of the foregoing, (i) all i$A461es, fees, charges (including standby and capacity 11 charges), insurance proceeds or other moneys derived by the City from the water services, facilities, and commodities or byproducts sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Water System, (ii) investment earnings on, and income derived from, the amounts referred to in the preceding clause (i), including investment earnings on the operating reserves, to the extent that the use of such earnings is limited to the Water System by or pursuant to law, and earnings on any Reserve Fund for Obligations but only to the extent that such earnings may be utilized under the Issuing Instrument for the payment of debt service for such Obligations; (iii) the proceeds derived by the City directly or indirectly from the sale or lease of a part of the Water System; and (iv) any amount received from the levy or collection of taxes which are solely available and are earmarked for the support of the operation of the Water System; provided, however, that System Revenues shall not include: (a) customers' deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City; and (b) the proceeds of borrowings. Notwithstanding the foregoing, there shall be deducted from System Revenues any amounts transferred into a Rate Stabilization Fund as contemplated by Section 6.08(b), and there shall be added to System Revenues any amounts transferred out of such Rate Stabilization Fund to pay Maintenance and Operation Costs. System Revenues shall include reimbursements from the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program); provided, however, for purposes of complying with the rate setting covenants contained in the Installment Purchase Agreement and satisfying the debt service coverage requirements in connection with the issuance or incurring of Parity Obligations, System Revenues shall not include such reimbursements from the United States of America. See Appendix B "SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS." "Maintenance and Operations Costs" is the reasonable and necessary costs spent or incurred by the City, for maintaining and operating the Water System, calculated in accordance with generally accepted accounting principles, including (among other things) all costs of water purchased or leased by the City, the reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City attributable to the Project and the Installment Purchase Agreement, salaries and wages of employees, payments to employees retirement systems (to the extent paid from System Revenues), overhead, taxes (if any), fees of auditors, accountants, attorneys or engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges required to be paid by it to comply with the terms of the Obligations, including this Installment Purchase Agreement, including any amounts required to be deposited in the Rebate Fund pursuant to the Tax Certificate, and fees and expenses payable to any Credit Provider (other than in repayment of a Credit Provider Reimbursement Obligation), but excluding in all cases (i) depreciation, replacement and obsolescence charges or reserves therefor, (ii) amortization of intangibles or other bookkeeping entries of a similar nature, (iii) costs of capital additions, replacements, betterments, extensions or improvements to the Water System which under generally accepted accounting principles are chargeable to a capital account or to a reserve for depreciation, (iv) charges for the payment of principal and interest on any general obligation bond heretofore or hereafter issued for Water System purposes, and (v) charges for the payment of principal and interest on any debt service on account of any obligation on a parity with or subordinate to the Installment Payments. Payments with respect to Maintenance and Operation Obligations shall be considered Maintenance and Operation Costs if they are incurred in connection with the Maintenance and Operation Costs described in the preceding paragraph. See Appendix B — "SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS." "Maintenance and Operation Obligation" means any contract or lease for the purchase of any facilities, properties, structures, or works, or any loan of credit to or guaranty of debts, claims or liabilities of any other person for the purpose of obtaining any facilities, properties, structures or works, the final payments under which are due more than five years following the effective date thereof, so long as in each case the payments thereunder are to constitute Maintenance and Operation Costs. Obligations of City Under Installment Purchase Agreement Pursuant to the Installment Purchase entity commits, absolutely and unconditionally, to make Installment Payments to the Authority s��Y tem Revenues until such time as to the purchase 12 price for the Project has been paid in full (or provision for the payment thereof has been made pursuant to the Indenture). The City will not discontinue or suspend any Installment Payments whether or not the Project or any part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced, curtailed or terminated in whole or in part, and such Installment Payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or non - performance by any party of any agreement for any cause whatsoever. Rate Covenant The City hereby covenants to fix, prescribe, revise and collect rates and charges for the services and facilities famished by the Water System during each Fiscal Year which (together with other funds accumulated from System Revenues and which are lawfully available to the City for payment of any of the following amounts during such Fiscal Year) are at least sufficient, after making allowances for contingencies and errors in estimates, to pay the following amounts in the following order: G) all Maintenance and Operation Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) all Debt Service coming due and payable in such Fiscal Year; and (iii) all payments required to meet any other obligations of City which are charges, liens or encumbrances upon, or payable from, the Net System Revenues. The City shall fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which are sufficient to yield Net System Revenues, at least equal to one hundred and twenty percent (120 %) of the amounts payable under the preceding clause (b) in such Fiscal Year. The City may establish, as a fund within the Water Revenue Fund, a fund denominated the Rate Stabilization Fund. From time to time the City may deposit into the Rate Stabilization Fund, from current System Revenues, such amounts as the City shall determine and the amount of available current System Revenues shall be reduced by the amount so transferred. Amounts may be transferred from the Rate Stabilization Fund solely and exclusively to pay Maintenance and Operation Costs, and any amounts so transferred shall be deemed System Revenues when so transferred. All interest or other earnings upon amounts in the Rate Stabilization Fund may be withdrawn therefrom and accounted for as System Revenues. For purposes of calculating the Debt Service coverage requirement described above, System Revenues shall exclude reimbursements from the United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111 -5, 23 Star. 115 (2009), enacted February 17, 2009)), or any future similar program), and Debt Service shall be net of such reimbursements. Pledge Under the Indenture Pursuant to the Indenture, the Authority has irrevocably pledged all Revenues and amounts on deposits in the funds and accounts established under the Indenture (other than amounts on deposit in the Rebate Fund) to the payments of principal and interest on the Bonds. The Indenture defines the term "Revenues" to mean all Installment Payments paid by the City pursuant to the Installment Purchase Agreement, including interest or profits from the investment of money in any account or fund (other than the Rebate Fund). In order to secure the pledge of the Revenues, the Authority has transferred, conveyed and assigned to the Trustee, for the benefit of the Owners, all of the Authority's rights under the Installment Purchase Agreement (excluding its right to indemnification thereunder), including the right to receive Installment Payments from the City, the right to receive any proceeds of insurance maintained thereunder or any condemnation award rendered with respect to the Project and the right to exercise any remedies provided therein in the event of a default by the City thereunder. 80A -153 13 The Trustee will establish and maintain a special trust fund to be held by the trustee called the Payment Fund. Within the Payment Fund, the Trustee will establish and maintain the Interest Account, the Principal Account, the Sinking Account and the Redemption Account. Under the Installment Purchase Agreement, the City will pay the Installment Payments out of the Water Revenue Fund to the Trustee for deposit into the Payment Fund. Subject to the provisions of the Indenture, all money in the Payment Fund will be set aside by the Trustee in the following respective special accounts within the Payment Fund in the following order of priority: (i) Interest Account, (ii) Principal Account, and (iii) Redemption Account. A debt service reserve fund has not been established for the Bonds. Application of System Revenues The City has covenanted that all System Revenues, when and as received, will be received and held by the City in trust for the benefit of Bondholders and payments with respect to Parity Obligations, and will be deposited by the City immediately upon receipt in the Payment Fund, which the City has covenanted to establish and maintain throughout the term of the Bonds. All Net System Revenues shall be disbursed, allocated and applied solely to the uses and purposes set forth in the Indenture, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the City. All System Revenues in the Payment Fund shall be set aside by the City and applied in the following order of priority: (1) Operation and Maintenance Costs. The City has covenanted to pay all Operation and Maintenance Costs of the Water System (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs of the Water System, the payment of which is not then immediately required) as they become due and payable. (2) Installment Payments. The City covenants and agrees that all Net System Revenues will be held by the City in the Payment Fund. On or before each Installment Payment Date the City shall withdraw from the Payment Fund and transfer to the Trustee, for deposit in the Bond Fund, an amount which, together with the balance then on deposit in the Interest Account, the Sinking Principal Account and Redemption Account is equal to the aggregate amount of the Installment Payment coming due and payable on the next succeeding hnterest Payment Date. Payment of debt service and all other payments relating to principal and interest on or with respect to Parity Obligations shall be paid in accordance with the terms of the Indenture and of such Parity Obligations without preference or priority, and in the event of any insufficiency of such moneys, ratably without any discrimination or preference. (3) General Expenditures. All System Revenues not required to be withdrawn pursuant to the provisions of (1) and (2) above may be expended by the City at any time for any lawful purpose of the City, including, but not limited to, for payment of any obligation subordinate to the Bonds or 'Parity Obligations. 80A -154 14 THE AUTHORITY The Authority was established pursuant to a Joint Exercise of Powers Agreement dated August 1, 1993 (the "Agreement'), between the City and the former Santa Ana Redevelopment Agency (the "Agency "). The Authority was created for the purpose of providing financing for public capital improvements jointly owned and operated by the City and the Agency. The Agreement was entered into pursuant to the provisions of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "JPA Act'). The Authority was created for the purpose of assisting the financing or refinancing of certain public capital facilities within the City. The Authority is governed by a seven - member Board of Directors which consists of the members of the City Council of the City. The Mayor acts as the President of the Authority and the Mayor Pro Tem as its Vice President. 80A -155 15 THE CITY The City of Santa Ana, county seat of Orange County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City was established by William H. Spurgeon in 1869. The City was incorporated on June 1, 1886 and reorganized under a City Charter in 1888. In 1952, the voters approved a charter which established a council- manager form of government. The charter was modified by an election in 1986 to provide for the mayor to be elected by the voters. A 1988 redistricting resulted in a six - member City Council, in addition to the Mayor, which is elected at large for four -year terms. The City provides traditional city services, including fire protection (192 sworn personnel with ten stations) and police protection (329 sworn personnel and three stations). There are two libraries and 41 parks in the City. Public education for grades K -12 is provided by the Santa Ana Unified School District, the Garden Grove Unified School District, the Orange Unified School District and the Tustin Unified School District. The City has served as the county seat since the formation of Orange County in 1889. Numerous government offices have taken advantage of the City's central location and position as county seat. City, county, state and federal offices are conveniently located in the multi - government civic center in the heart of the City. The City has an industrial base which supports the local economy. For other selected information concerning the City, see "APPENDIX A — CITY OF SANTA ANA GENERAL, DEMOGRAPHIC INFORMATION." 80A -156 16 THE WATER SYSTEM General; Service Area The City is the primary provider of water service for residential, commercial, agricultural and industrial enterprises within the City and also serves 45 customers outside the City limits bordering the City of Orange. The City's current population is approximately 330,920, which is also the estimated population served by the Water System. The Water System currently includes a total of approximately 44,657 potable water connections, including approximately 39,140 residential service connections, approximately 4,710 industrial and commercial service connections, approximately 790 municipal /governmental connections, and 11 miscellaneous meters (fire service, temporary construction, etc.). The primary facilities comprising the Water System, as of May 1, 2014, included 20 active water wells, 7 connections to the Metropolitan Water District transmission mains, 10 reservoirs totaling 45 million gallons (MG) of storage and a network of nearly 450 miles of transmission and distribution pipelines. The general age of the Water System is approximately 50 -60 years. The main lines of the Water System were constructed in the decade of 1910. The majority of the water distribution infrastructure was developed over a twenty -year period between 1950 and 1970 to accommodate the City's development. The water distribution infrastructure accounts for 60% of the Water System. Most of the water wells and storage reservoirs were developed during the last 40 years and some of these are only 15 years old. The City purchases and pumps untreated water. The City uses sodium hypochlorite as a mean to treat its groundwater. An average of 0.6 mg /L of chlorine residual is maintained throughout the distribution system and in the storage reservoirs to effectively disinfect the water. All well facilities have a sodium hypochlorite treatment system on site. The water chlorination treatment takes place at the wellhead prior to being delivered and distributed into the Water System. Organization and Staff The City's Water System is under the direction of the following individuals: City Manager, David Cavazos, Executive Director, Finance & Management Services Agency, Francisco Gutierrez, Interim Public Works Director, Edwin "William" Galvez, P.E. and the Water Resources Manager, Nabil Saba, P.E. David Cavazos, City Manager of Santa Ana, has more than 25 years of public management experience. Prior to Santa Ana, David was City Manager of Phoenix where he maintained a AAA bond rating. He has a Master of Science degree in Management and Public Policy from Carnegie Mellon University. He is certified Economic Development Finance Professional Council of Urban and Economic Development (EDFP). He is accredited Airport Executive AAAE American Association of Airport Executives. Francisco Gutierrez started working for the City in 1985. He has held various positions within the City including Executive Assistant to the City Manager, Administrative Services Manager, and his current position of Executive Director of the Finance & Management Service Agency. He has participated in managing major projects including the development and construction of the City's 400,000 square foot Police Administration and Holding Facility as well as a $68 million bond for local streets. He holds a Master of Arts Degree in Business Economics from the University of California at Santa Barbara and a Bachelor of Arts Degree in Economics from the University of California at Irvine. William Galvez has been serving municipal public works agencies for 30 years, beginning his professional career with the City of Los Angeles. He then moved on to serve the cities of Lynwood and Carson as a staff Engineer, and then City Engineer for the City of San Fernando. Mr. Galvez has been Public Works Director and City Engineer for the cities of San Fernando, South Pasadena, and Baldwin Park. Currently, Mr. Galvez is the Santa Ana Public Works Agency Interim Executive Director. 80A -157 17 Mr. Galvez attended Cal State LA where he majored in Civil Engineering and later attended Cal State Northridge (CSUN) where he obtained a Master of Public Administration. Mr. Galvez is a Licensed Civil Engineer in the State of California, and is active in Public Works Organizations such as serving as a Board Director on the Southern California Chapter of the American Public Works Association (APWA), member of the City Engineers Association of Orange County, and also as a past president of the City and County Engineer's Association of Los Angeles County in 2010. Nabil Saba, has over twenty three years of experience in all aspects of water resources operations, engineering, and management. For the past two years, he has served as Water Resources Manager for the City of Santa Ana. Prior to that Mr. Saba served as the Water Operations Principal Civil Engineer for 12 years for the City. Mr. Saba is certified in water treatment and distribution and is registered Professional Civil Engineer in the State of California. Mr. Saba has a Bachelor of Science degree in Chemical Engineering from the California State Polytechnic University at Pomona and a Master in Science in Civil and Environmental Engineering from Loyola Marymount University in Los Angeles. The Water Department is operated by a staff of 49 full -time employees. The following Table 1 summarizes certain operating statistics of the Water System for the past five Fiscal Years. Certain information for the 2013/14 Fiscal Year is estimated. TABLE 1 City of Santa Ana Summary of Operations Fiscal Years 2010 through 2014 2010 2011 2012 2013 2014 Water Purchased(ll Water Pumped n 33,708 23,951 23,976 24,930 26,730 MWDo) (2) 2,655 12,278 12,613 12,454 11,200 Total Potable Water Sold n 36,363 36,229 36,589 37,384 37,930 Change from previous year(l) -3,760 -134 +360 +795 +546 Population 325,210 328,285 330,920 330,920 330,920 Cost of MWD Water $ /a -f n $660 $722 $769 $820 $868 In acre -feet. 2) Pursuant to agreement with The Metropolitan Water District of Southern California. (3) Average cost. (4) Estimated and unaudited. Source: City of Santa Ana. 80A -158 UR Water Sales Service connections in the Water System range in diameter from 5/8 -inch to 6- inches. All water production and consumption is metered. The City currently projects that service connections will increase 0.1% a year for the current and next four fiscal years. Based on projected build -out, the anticipated total water system demand is estimated to be 40,000 acre -feet a year by the year 2016, an increase of 5.0% over current demand. The City attributes such increase, in part, due to the revival of businesses in the City which were closed during the last recession and the return of residents to properties which were unoccupied due to the past decline in the housing market. The following tables present a summary of water sales by type of customer for the past three fiscal years. TABLE 2 City of Santa Ana Water Sold by Type of Customer Last Three Fiscal Years (in Thousands of Gallons) 2012 8,054,021.9 2,203,292.3 761,203.7 113,081.9 350,978.8 485.600.9 11,968,179.5 $2.727 2011 8,017,322.1 2,174,889.3 725,834.5 110,922.4 325,890.9 489.859.2 11,844,718.4 Others include: churches, construction use medical, schools, reclaim water. �) A unit is 748 gallons. Source: City of Santa Ana. Type of Customer Residential Commercial Industrial Wholesale food Government Others(l) Total TABLE 3 City of Santa Ana Water Sold by Type of Customer Last Three Fiscal Years (in Dollars) 2013 $35,686,622.41 9,905,889.26 1,764,219.29 458,835.04 2,401,776.25 4,039.114.78 $54,256,457.03 2012 $34,988,677.46 9,718,633.70 1,712,039.56 452,234.95 2,293,929.91 3.796.383.41 $52,961,809.33 $2.673 2011 $30,560,412.57 8,551,717.85 1,532,700.62 409,574.96 2,032,071.65 3.396.899.49 $46,474,377.14 Others include: churches, construction use medical, schools, reclaim water and water delivered outside of the City. Source: City of Santa Ana. 80A -159 19 2013 Type of Customer Residential 8,191,888.8 Commercial 2,257,527.6 Industrial 801,654.8 Wholesale food 114,953.4 Government 352,676.0 Others( �) 508,589.9 Total 12,227,290.5 Total direct rate Per 44 units (2) $2.727 2012 8,054,021.9 2,203,292.3 761,203.7 113,081.9 350,978.8 485.600.9 11,968,179.5 $2.727 2011 8,017,322.1 2,174,889.3 725,834.5 110,922.4 325,890.9 489.859.2 11,844,718.4 Others include: churches, construction use medical, schools, reclaim water. �) A unit is 748 gallons. Source: City of Santa Ana. Type of Customer Residential Commercial Industrial Wholesale food Government Others(l) Total TABLE 3 City of Santa Ana Water Sold by Type of Customer Last Three Fiscal Years (in Dollars) 2013 $35,686,622.41 9,905,889.26 1,764,219.29 458,835.04 2,401,776.25 4,039.114.78 $54,256,457.03 2012 $34,988,677.46 9,718,633.70 1,712,039.56 452,234.95 2,293,929.91 3.796.383.41 $52,961,809.33 $2.673 2011 $30,560,412.57 8,551,717.85 1,532,700.62 409,574.96 2,032,071.65 3.396.899.49 $46,474,377.14 Others include: churches, construction use medical, schools, reclaim water and water delivered outside of the City. Source: City of Santa Ana. 80A -159 19 Land Use The City is responsible for land use policy for most of the area served by the Water System (as the Water System also serves small areas of the cities of Garden Grove and Orange, and unincorporated Orange County). Relatively little undeveloped land exists within the City. A condition of new or in -fill development is that the developer provide infrastructure sufficient to provide water service for each lot in the proposed development. The City anticipates servicing these customers from the purchase of additional supplies from its resources described in "Water Sources and Supply; Water Purchases" below. The Project; Future Water System Improvements See "THE FINANCING PLAN — The Project" herein for a description of the improvements to the Water System anticipated to be financed by the proceeds of the Bonds. While the City has an ongoing capital improvement plan with respect to repair and replacement of facilities as needed, it does anticipate new major capital improvements in the next five years which are eligible to be financed by the proceeds of the Bonds. These new improvements include the drilling and construction of a new water supply well, the construction and installation of advanced metering infrastructure, relocation of MWD turnout valve, additional water main improvements throughout the City, improvements to Well 32, construction of a perimeter wall for South Station and construction of a new well. Storage Capacity The City's existing 45 million gallons of storage capacity provides the Water System with one day (based on average daily use) of emergency supplies. The City also maintains interconnections with the cities of Orange, Fountain Valley and Tustin, and with the Mesa Water District, which serve adjacent areas, that could provide water in the event of an emergency. Water Sources and Supply; Water Purchases The City presently relies on local groundwater for 72% of its water supply. The City owns and operates a total of 20 wells located within the City limits. Total capacity is 42,000 gallons per minute ( "GPM "), or 60.3 million gallons per day ( "MGD "). In addition, the City is a charter member of MWD. As such, it has rights to the water supply of MWD on a parity basis with other member agencies of MWD. The City relies on MWD for 28% of its water supply at the present time. The cost of purchasing MWD water is three times greater than the cost of pumping local groundwater. The lower Santa Ana River groundwater basin, from which the City pumps its water, is under the jurisdiction of the Orange County Water District ( "OCWD "). The City is a member of OCWD, along with other Orange County cities and water districts which overlie the groundwater basin. OCWD has a comprehensive ground -water replenishment system that includes the injection of highly treated wastewater into the groundwater basin to prevent seawater intrusion and to replenish the basin by spreading at the Anaheim forebay. In the past, sea water intrusion has been a problem in portions of the basin. The member cities of OCWD, including the City, are each allocated a portion of the cost of the groundwater recharge program, depending on a number of factors. The groundwater basin has been relatively stable during this current drought, and the City does not anticipate any curtailment of its ability to pump local groundwater for its service needs. Orange County Water District Groundwater Basin The following information regarding OCWD has been obtained from OCWD and sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy or completeness hereof. Additional information about OCWD may be obtained from OCWD's website at www.ocwd.com. No information contained in such website is incorporated herein by reference. EOOIIZA [�%: 20 The Orange County Water District is the agency responsible for managing the Orange County groundwater Basin, which is Santa Ana's major source of water. OCWD is governed by a ten - member board of directors, which has the power to establish and adjust the annual Basin Production Percentage, the Basin Equity Assessment and the Replenishment Assessment by a vote of eight out of ten of its directors. Each of the cities of Anaheim, Fullerton and Santa Ana has the power to appoint one director; the remaining seven directors are elected by the residents in the geographic districts composing the balance of OCWD's boundaries. Prior to 1968, OCWD managed the Basin from the supply side. This approach did not limit the amount of water that could be taken from the Basin by any of the groundwater producers. OCWD's philosophy was for the Basin to provide sufficient water supply to meet demand regardless of growth, development or drought. In 1968, OCWD obtained authorization to implement the Basin Production Percentage (the "BPP ") as another tool to manage the Basin. The BPP is defined as the proportion of total water production that can be produced from groundwater withdrawals without incurring an additional assessment, known as the Basin Equity Assessment (the "BEA "). The BPP and BEA do not result in a rigid cap on the quantity of groundwater that may be pumped, but instead create a financial disincentive to pump in excess of the BPP. A groundwater producer may in fact pump as much groundwater from the Basin as its system capacity permits, although all water pumped above the BPP is charged the additional BEA, which effectively increases its cost to the MWD Tier II rate. Despite the financial disincentive of the BEA, the fact that the City has the ability to pump as much groundwater as the Water System can accommodate provides a reliable source of alternate water supply in the event that MWD water purchases are disrupted. For many years prior to 2004, OCWD established the Basin Production Percentage at 75 %, with a goal of replenishing the Basin with sufficient quantities of water to sustain that pumping level. Continued growth and several consecutive years of below normal precipitation, however, have decreased groundwater levels significantly. As a result, OCWD developed and implemented a new Basin management strategy that began in Fiscal Year 2003 -04. The goal of this strategy was to reverse the declining trend in water levels and ultimately to refill the Basin. To achieve this goal, OCWD has reduced the BPP in recent years. Since Fiscal Year 2005 -06, the BPP generally has ranged from 64% to 80% depending on Basin conditions. OCWD will set each fature BPP at a level that corresponds to the total amount of water that it estimates will be available for recharge that year, including replenishment water purchased from MWD. As part of this process, OCWD will take into account the level of water in the Basin, as well as hydrologic and replenishment conditions. In addition to adjusting the BPP and the BEA annually, OCWD also annually increases the pump tax or Replenishment Assessment (the "RA "), which is the cost that groundwater producers must pay to pump water from the Basin. The RA provides OCWD with the necessary revenue to construct capital improvement projects to enhance Basin production, to protect the water quality of the Basin's supply, and to purchase replenishment water from MWD when available. The RA for Fiscal Year 2013 -14 is set at $277 per acre -foot, and for Fiscal Year 2014 -15 it is estimated to be approximately $297 per acre -foot. With the energy costs and operational maintenance costs for pumping the groundwater added to the OCWD RA costs, the City pays approximately $432 for each acre -foot of groundwater produced. OCWD's Groundwater Replenishment System ( "GWRS ") became operational in January 2008. The GWRS constitutes a "new" source of supply that will increase the reliability of replenishment water for OCWD. The GWRS can produce nearly 70 million gallons per day, or a total of 72,000 acre -feet of water per year, to recharge the Basin and to support a seawater intrusion barrier in Fountain Valley. In addition, OCWD has developed a Long -Term Facilities Plan identifying capital projects that will appropriately enhance the recharge capacity of the Basin. This plan, along with the GWRS, is expected to allow the Basin to accommodate a BPP of approximately 60% to 75% in the long term, depending on the availability of replenishment water deliveries from MWD. Due to recent imported water supply challenges encountered by MWD, replenishment water is not expected to be available during the next few years and as a result, the BPP has been and will continue to be between approximately 60% and 65 %. In years when replenishment water will be available (estimated by MWD to be approximately every three out of ten yearSOA461cted to be increased to between 70% and 75 %. 21 Occasionally, OCWD will implement programs in cooperation with specific water agencies, including the City, to under -pump or over -pump in certain strategic locations to better address localized Basin conditions or to meet other OCWD objectives, such as refilling the Basin. For example, during Fiscal Year 2002 -03, the City participated in a program to help refill the Basin by purchasing additional quantities of MWD imported water "in- lieu" of pumping that water from the Basin, thereby decreasing the Water System's groundwater production to 68% of its total supply even though the BPP was at 75% for that Fiscal Year. As another example, during Fiscal Years 2000 -01 and 2001 -02, the City participated in the Coastal Pumping Transfer Program ( "CPTP ") at OCWD's request and pumped 78% of its total supply when the BPP was at 75 %. The CPTP minimizes seawater intrusion to the groundwater basin by encouraging agencies along the coast to pump below the BPP, while inland agencies, such as the City, pump a corresponding amount above the BPP. These programs do not increase the City's annual water supply costs, but provide regional benefits by purchasing surplus MWD water for recharging the groundwater basin or preventing seawater intrusion along the coast. Metropolitan Water District of Southern California - Imported Water The following information regarding MWD has been obtained from MWD and sources that the Authority believes to be reliable, but the Authority takes no responsibility for the accuracy or completeness hereof. Additional information about MWD may be obtained from MWD's website at www.mwdh2o.com. No information contained in such website is incorporated herein by reference. MWD is a public agency organized in 1928 by vote of the electorates of several Southern California cities, including the City, following adoption of the original Metropolitan Water District Act (the "MWD Act ") by the California Legislature. MWD is not subject to regulation by the California Public Utilities Commission, although its enabling statute is subject to amendment by the California Legislature. MWD currently has full authority to set rates and policies as necessary to provide a dependable water supply to Southern California. MWD provides nearly between 40% and 60% in any given year of the water used in its service area, which consists of approximately 5,200 square miles in portions of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura Counties. MWD serves a population of almost 19 million people. MWD is governed by a 37- member Board of Directors consisting of at least one representative from each of the 26 member public agencies, including the City, that comprise the MWD. Each member public agency is entitled to have at least one representative on the Board, plus an additional representative for each full 5% of its assessed valuation of property in MWD's service area. Accordingly, from time to time, the Board may have more than 37 members. Representation and voting rights are based upon each agency's assessed valuation. MWD Water Supply MWD faces a number of challenges in providing a reliable and high quality water supply for southern California. These include, among others: (1) population growth within the service area; (2) increased competition for low -cost water supplies; (3) variable weather conditions; and (4) increased environmental regulations. MWD's resources and strategies for meeting these long -term challenges are set forth in its Integrated Water Resources Plan, as updated from time to time. MWD's principal sources of water are the State Water Project and the Colorado River. Court decisions have restricted deliveries from the SWP in recent years. Precipitation, in the form of snow or rain, and its resulting runoff and storage levels are key indicators for MWD's supplies from both its State Water Project and Colorado River sources. Snowpack, as presented below, is a percentage of the April 1 historical average water content. April 1 is recognized as the typical peak of the season in any given year. California hydrology is highly variable from year to year. In March 2011, following a three year drought, California Governor Jerry Brown proclaimed an end to the statewide drought emergency proclaimed in February 2009 by then - Governor Arnold Schwarzenegger. In 2011, California's snowpack peaked at 163 percent of normal. Drier conditions returned for 2012, with California statewide snowpack peaking in mid -April 2012 at 64 percent of normal. After large storms in November and December of 2012, California started 2013 with above normal snowpack conditions for th�t"62 the California 2013 snowpack peaked in March 22 at 61 percent of normal, and associated runoff was 65 percent of normal. Calendar year 2013 was the driest on record in much of California. Dry conditions have continued into February 2014. As a result of these below normal water supply conditions, Department of Water Resources ( "DWR ") storage in key reservoirs is lower than in 1977, one of the two previous driest water years on record. For example, as of February 3, 2014, storage in Lake Oroville, the principal SWP reservoir, was at 36 percent of average capacity and storage in San Luis Reservoir, a critical reservoir south of the San Francisco Bay /Sacramento -San Joaquin River Delta (`Bay - Delta"), was at 30 percent of average capacity. Due to these record -dry conditions and lower than average water levels in State reservoirs, Governor Brown proclaimed a drought emergency on January 17, 2014. Among the responses included in the drought proclamations, State agencies will implement water use reduction plans for all State facilities and a statewide water conservation publicity campaign with a goal of reducing water use statewide by 20 percent. Additionally, regulatory actions are being sought by DWR to adjust Bay -Delta water quality and outflow requirements in order to preserve stored water for health and safety and to provide threatened species protection. On January 31, 2014, DWR reduced the State Water Project allocation percentage to zero, reflecting the severity of California's drought. Except for a small amount of carryover water from 2013, State Water Project contractors may receive none of the contracted amount in 2014 if current dry conditions persist. DWR may increase allocations if warranted by the year's developing hydrologic and water supply conditions. At this time, it is not possible to forecast the impact of the drought or drought proclamation on MWD water supplies. Nevertheless, MWD is well positioned to meet demands in 2014 and does not expect to fundamentally alter water management planning for 2014, despite the zero allocation from DWR for State Water Project supplies. To meet regional demands, MWD plans to use Colorado River Aqueduct deliveries, storage reserves and supplemental water transfers and purchases. MWD storage increased from 2010 to 2012 as a result of increased State Water Project supplies and reduced demand in those years. By the end of 2012, MWD had accumulated the highest end -of -year total water reserves in its history. MWD reduced storage by approximately 358,000 acre -feet in 2013, leaving water reserves in January 2014 at approximately 3.0 million acre -feet. MWD's other principal source of water supply, the Colorado River, comes from watersheds of the Upper Colorado River basin in the states of Colorado, Utah, and Wyoming. As of February 3, 2014, snowpack measured at 101 percent of normal to date. Due to the way that Colorado River Supplies are apportioned, weather conditions do not impact MWD water supplies in the current year. However, impacts will be seen to storage levels in Lake Powell and Lake Mead, which in turn affect the likelihood of surplus or shortage conditions in the future. Uncertainties from potential future temperature and precipitation changes in a climate driven by increased concentrations of atmospheric carbon dioxide also present challenges. Areas of concern to California water planners identified by researchers include: reduction in Sierra Nevada snowpack; increased intensity and frequency of extreme weather events; and rising sea levels resulting in increased risk of damage from storms, high -tide events, and the erosion of levees and potential cutbacks of deliveries from the State Water Project. While potential impacts from climate change remain subject to study and debate, climate change is among the uncertainties that MWD seeks to address through its planning processes. Integrated Water Resources Plan MWD, its member agencies, sub - agencies and groundwater basin managers developed their first Integrated Water Resources Plan ( "IRP "), which was adopted by the Board in January 1996 and updated in 2004, as a long -term planning guideline for resources and capital investments. The purpose of the IRP was the development of a portfolio of preferred resources (see " —The Integrated Resources Plan Strategy" below) to meet the water supply reliability and water quality needs for the region in a cost - effective and environmentally sound manner. On October 12, 2010, MWD's Board adopted an IRP update (the "2010 IRP Update ") as a strategy to set goals and a framework for water resouraoAloM This strategy enables MWD and its member 23 agencies to manage future challenges and changes in California's water conditions and to balance investments with water reliability benefits. The 2010 IRP Update provides an adaptive management approach to address future uncertainty, including uncertainty from climate change. It was formulated with input from member agencies, retail water agencies, and other stakeholders including water and wastewater managers, environmental and business interests and the community. The framework places an emphasis on regional collaboration. The 2010 IRP Update seeks to provide regional reliability through 2035 by stabilizing MWD's traditional imported water supplies and continuing to develop additional local resources, with an increased emphasis on regional collaboration. It also advances long -term planning for potential future contingency resources, such as storm water capture and large -scale seawater desalination, in close coordination with MWD's 26 member agencies and other utilities. The 2010 IRP Update is available on MWD's web site at http: / /www.mwdh2o.com/mwdh2o /pages /yourwater /irp /. Specific projects that may be developed by MWD in connection with the implementation of the IRP will be subject to future Board consideration and approval, as well as environmental and regulatory documentation and compliance. The information set forth on MWD's website is not incorporated by reference. State Water Project One of MWD's two major sources of water is the State Water Project, which is owned by the State and operated by DWR. This project transports Feather River water stored in and released from Oroville Dam and unregulated flows diverted directly from Bay -Delta south via the California Aqueduct to four delivery points near the northern and eastern boundaries of MWD's service area. The total length of the California Aqueduct is approximately 444 miles. In 1960, MWD signed a water supply contract (as amended, the "State Water Contract ") with DWR. MWD is one of 29 agencies that have long -term contracts for water service from DWR, and is the largest agency in terms of the number of people it serves (approximately 18.2 million), the share of State Water Project water that it has contracted to receive (approximately 46 percent), and the percentage of total annual payments made to DWR by agencies with State water contracts (approximately 53 percent for 2012). Colorado River Aqueduct The Colorado River was MWD's original source of water after MWD's establishment in 1928. MWD has a legal entitlement to receive water from the Colorado River under a permanent service contract with the Secretary of the Interior. Water from the Colorado River and its tributaries is also available to other users in California, as well as users in the states of Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming (the "Colorado River Basin States "), resulting in both competition and the need for cooperation among these holders of Colorado River entitlements. In addition, under a 1944 treaty, Mexico has an allotment of 1.5 million acre - feet of Colorado River water annually except in the event of extraordinary drought or serious accident to the delivery system in the United States, in which event the water allotted to Mexico would be curtailed. Mexico also can schedule delivery of an additional 200,000 acre -feet of Colorado River water per year if water is available in excess of the requirements in the United States and the 1.5 million acre -feet allotted to Mexico. The Colorado River Aqueduct, which is owned and operated by MWD, transports water from the Colorado River approximately 242 miles to its terminus at Lake Mathews in Riverside County. After deducting for conveyance losses and considering maintenance requirements, up to 1.25 million acre -feet of water a year may be conveyed through the Colorado River Aqueduct to MWD's member agencies, subject to availability of Colorado River water for delivery to MWD as described below. California is apportioned the use of 4.4 million acre -feet of water from the Colorado River each year plus one -half of any surplus that may be available for use collectively in Arizona, California and Nevada. In addition, California has historically been allowed to use Colorado River water apportioned to but not used by Arizona or Nevada when such supplies haveWiAdtit"or use in California. Under the 1931 priority 24 system that has formed the basis for the distribution of Colorado River water made available to California, MWD holds the fourth priority right to 550,000 acre -feet per year. This is the last priority within California's basic apportionment. In addition, MWD holds the fifth priority right to 662,000 acre -feet of water, which is in excess of California's basic apportionment. Until 2003, MWD had been able to take full advantage of its fifth priority right as a result of the availability of surplus water and apportioned but unused water. However, during the 1990s Arizona and Nevada increased their use of water from the Colorado River, utilizing their respective basic apportionments by 2002 and significantly reducing unused apportionment available for California. In addition, a severe drought in the Colorado River Basin reduced storage in system reservoirs, such that MWD stopped taking surplus deliveries in 2003 in an effort to mitigate the effects of the drought. Prior to 2003, MWD could divert over 1.2 million acre -feet in any year, but since that time, MWD's net diversions of Colorado River water have been limited to a low of nearly 633,000 acre -feet in 2006 and a high of 1,105,232 acre -feet in 2009. Average annual net deliveries for 2003 through 2013 were approximately 838,000 acre -feet, with annual volumes dependent primarily on programs to augment supplies, including transfers of conserved water from agriculture. MWD has entered into agreements with the Imperial Irrigation District, Central Arizona Water Conservation District and Palo Verde Irrigation District and is seeking additional agreements with other agencies to reduce their diversions from the Colorado River, thereby augmenting MWD's available supply. hi January 2001, the Secretary of the Interior adopted guidelines (the "Interim Surplus Guidelines ") for use through 2016 in determining if there is surplus Colorado River water available for use in California, Arizona and Nevada. The purpose of the Interim Surplus Guidelines is to provide a greater degree of predictability with respect to the availability and quantity of surplus water through 2016. The Interim Surplus Guidelines were later extended through 2026. Under the Interim Surplus Guidelines, MWD initially expected to divert up to 1.25 million acre -feet of Colorado River water annually under foreseeable runoff and reservoir storage scenarios from 2004 through 2016. However, an extended drought in the Colorado River Basin reduced these initial expectations. From 2000 to 2004, snowpack and runoff in the Colorado River Basin were well below average. Although runoff was slightly above average in 2005, the runoff in 2006 and 2007 was again below average, making 2000 through 2007 the driest eight -year period on record. Although 2008 and 2009 runoff was near normal, combined storage in Lake Mead and Lake Powell remains at 50% of capacity. MWD's initial 2010 diversion approval from the Bureau of Reclamation totaled 935,700 acre -feet plus any unused Priority 1 through 3 water. MWD anticipates its ultimate 2010 diversion approval from the Bureau of Reclamation will exceed 1 million acre -feet. The Southern Nevada Water Authority ( "SNWA ") and MWD entered into an Agreement Relating to Implementation of Interim Colorado River Surplus Guidelines on May 16, 2002, in which SNWA and MWD agreed on the allocation of unused Arizona apportionment and on the priority of SNWA for interstate banking in Arizona. SNWA and MWD entered into a storage and interstate release agreement on October 21, 2004. Under this program, Nevada can request MWD to store unused Nevada apportionment of Colorado River water in California. The amount of water stored through 2009 under this agreement was 70,000 acre -feet. In subsequent years, Nevada may request recovery of this stored water. As part of a recently executed amendment, it is expected that Nevada will not request return of this water until 2022. The stored water provides flexibility to MWD for blending Colorado River water with State Water Project water and improves near -term water supply reliability. MWD Rates. MWD water rates are established by majority vote of the MWD board in March of each year, after a public hearing held in February. Rates are not subject to regulation by any local, state or federal agency. Under the MWD Act, MWD must, so far as practicable, fix such rates for water as will result in revenue which, together with revenue from any water standby or availability of service charge or assessment, will pay the operating expenses of MWD, provide for repairs and maintenance, provide for payment of the purchase price or other charges for property or services or other rights acquired by MWD and provide for the payment of the interest and principal of the bonded debt of MWD. 80A -165 25 MWD's current rate structure became effective in January 2003. In October 2002, PWP entered into a voluntary purchase order contract with MWD, whereby PWP will be able to purchase up to 90% of its "initial base demand" at the "Tier 1" rate. The "initial base demand" is defined as the maximum firm demand (not including water delivered for in -lieu groundwater storage programs) for MWD water experienced since Fiscal Year 1989. PWP estimates its "initial base demand" to be 23,520 acre - feet/year. This means that with the purchase order contract, PWP may currently purchase up to 21,170 acre - feet/year of water at the Tier 1 rate. In the future, "base demand" is defined as either the agency's "initial base demand" or the rolling 10 -year average of firm demands for MWD water, whichever is higher. Any water purchased from MWD in excess of 90% of the "base demand" must be purchased at the higher Tier 2 rate. The following table shows water rates under MWD's current rate structure. This table includes rates effective January 1, 2012, January 1, 2013 and January 1, 2014. The City purchases both treated and untreated water from MWD. Treatment Surcharge $234 $234 $254 $254 $297 297 Treated Full Service $794 $920 $847 $997 $890 $1032 Includes Delta Supply Surcharge of $58 per acre foot. (2) Excludes Delta Supply Surcharge. Source: MWD. The Tier 1 and Tier 2 Water Supply Rates are designed to recover MWD's water supply costs. The Tier 2 Supply Rate is designed to reflect MWD's costs of acquiring new supplies. MWD member agencies are charged the Tier 1 or Tier 2 Water Supply Rate for water purchases, as described above. The System Access Rate is intended to recover a portion of the costs associated with the conveyance and distribution system, including capital, operating and maintenance costs. All users (including member agencies and third -party wheeling entities of the MWD system) pay the System Access Rate. The Water Stewardship Rate is charged on a dollar per acre -foot basis to collect revenues to support MWD's financial commitment to conservation, water recycling, groundwater recovery and other water management programs approved by MWD's Board. The Water Stewardship Rate is charged for every acre -foot of water conveyed by MWD. The System Power Rate is charged on a dollar per acre -foot basis to recover the cost of power necessary to pump water from the State Water Project and Colorado River through the conveyance and distribution system for MWD's member agencies. The System Power Rate is charged for all MWD supplies. Entities wheeling water will continue to pay the actual cost of power to convey water on the State Water Project, the Colorado River Aqueduct or the MWD distribution system, whichever is applicable. MWD charges a treatment surcharge on a dollar per acre -foot basis for treated deliveries. The treatment surcharge is set to recover the cost of providing ekte_l =a�e�s ice, including capital and operating cost. 26 TABLE 4 MWD WATER RATES (Dollars per Acre -Foot) Rate Category 2012 Rates(') 2013 Rates ('' 2014 RatesM Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Supply Rate $164 $290 $140 $290 $148 $ 290 System Access Rate 217 21 223 223 243 243 Water Stewardship Rate 43 43 41 41 41 41 System Power Rate 136 136 189 189 161 161 Untreated Full Service $560 $686 $593 $743 $593 $ 735 Treatment Surcharge $234 $234 $254 $254 $297 297 Treated Full Service $794 $920 $847 $997 $890 $1032 Includes Delta Supply Surcharge of $58 per acre foot. (2) Excludes Delta Supply Surcharge. Source: MWD. The Tier 1 and Tier 2 Water Supply Rates are designed to recover MWD's water supply costs. The Tier 2 Supply Rate is designed to reflect MWD's costs of acquiring new supplies. MWD member agencies are charged the Tier 1 or Tier 2 Water Supply Rate for water purchases, as described above. The System Access Rate is intended to recover a portion of the costs associated with the conveyance and distribution system, including capital, operating and maintenance costs. All users (including member agencies and third -party wheeling entities of the MWD system) pay the System Access Rate. The Water Stewardship Rate is charged on a dollar per acre -foot basis to collect revenues to support MWD's financial commitment to conservation, water recycling, groundwater recovery and other water management programs approved by MWD's Board. The Water Stewardship Rate is charged for every acre -foot of water conveyed by MWD. The System Power Rate is charged on a dollar per acre -foot basis to recover the cost of power necessary to pump water from the State Water Project and Colorado River through the conveyance and distribution system for MWD's member agencies. The System Power Rate is charged for all MWD supplies. Entities wheeling water will continue to pay the actual cost of power to convey water on the State Water Project, the Colorado River Aqueduct or the MWD distribution system, whichever is applicable. MWD charges a treatment surcharge on a dollar per acre -foot basis for treated deliveries. The treatment surcharge is set to recover the cost of providing ekte_l =a�e�s ice, including capital and operating cost. 26 The Delta Supply Surcharge is applicable to (among other rates) all Tier 1 untreated and treated water rates and reflects the additional supply costs that MWD faces along with other costs due to the pumping restrictions on the State Water Project. Additional charges for the availability of MWD's water are: the Readiness -to -Serve Charge and the Capacity Charge. The Readiness -to -Serve Charge is a variable annual charge of approximately $144.0 million that is divided proportionally among all agencies that receive water from MWD. This money is used by MWD to recover costs associated with standby and peak conveyance capacity and system emergency storage capacity. The Capacity Charge is a fixed annual charge, which is based on the capacity that is requested by the member agency. This charge will be used by MWD to recover the cost of providing peals capacity within the distribution system. Effective January 1, 2014, the capacity charge increased to $8,600 per efs of maximum daily flow. MWD estimates that it can meet its member agencies' supplemental demands through the year 2025, even under a repeat of the worst single -year and multiple -year drought events. MWD has committed to make additional resource and infrastructure improvements in order to maintain reliability and high water quality for at least the next 25 years, as demands grow. MWD's current practices of diversifying water supplies and securing supply reserves allow MWD and its member agencies to adjust to changes in demands and supplies and maintain a high degree of reliability. MWD's storage capacity, which includes reservoirs, conjunctive use and other groundwater and surface storage accounts delivered through the State Water Project or Colorado River Aqueduct, has increased to 5.62 million acre -feet. In 2013, approximately 334,000 acre -feet of stored water is emergency storage that is reserved for use in the event of supply disruption from earthquakes or similar emergencies, as well as extended drought. As of January 1, 2013, MWD had approximately 3.35 million acre - feet of water in storage. The MWD Act provides a preferential entitlement for the purchase of water by each of the MWD member agencies. This preferential right is based on the ratio of all payments made to MWD by each agency compared to total payments made by all member agencies on tax assessments and otherwise, except purchases of water, toward the capital cost and operating expenses of MWD. Historically MWD has not used this criterion in allocating water. The MWD Act provides that water surplus to MWD's needs for domestic and municipal uses may be sold for other beneficial uses. AIWD Scheduling and Operations. MWD member agencies request water from MWD at various delivery points within.MWD's system and pay for such water at uniform rates established by the MWD Board for each class of service. No member is required to purchase water from MWD, but all member agencies are required to pay readiness -to -serve charges (as described below) whether or not they purchase water from MWD. The current rate structure provides for a member agency's agreement to purchase water from MWD by means of a voluntary purchase order. In consideration of executing its purchase order, the member agency is entitled to purchase a greater amount of water at the lower "Tier 1 Water Supply Rate," as described under " — MWD Rates" above. Under each purchase order, a member agency agrees to purchase, over the ten -year term of the contract, an amount of water equal to at least 60% of its highest firm demand for MWD water in any Fiscal Year from 1989 -90 through 2001 -02 multiplied by ten. MWD Member agencies are allowed to vary their purchases from year to year, but a member agency will be obligated to pay for the full amount committed under the purchase order, even if it does not take its full purchase order commitment by the end of the ten -year period. Water is delivered to the member agencies on demand and is metered at the point of delivery. Member agencies are billed monthly and a late charge of 1% of the delinquent payment is assessed for delinquent payments not exceeding five business days. A late charge of 2% of the amount of the delinquent payment is charged for a payment that is delinquent for more than five business days for each month or portion of a month that the payment remains delinquent. MWD has the authority to suspend service to any agency delinquent for more than 30 days. Delinquencies have been rare; in uch in tances late charges have been collected No service has been suspended because of delinquencies. 8U –� 27 Drought and Resources Management Plans. Possible causes of water supply deficits are droughts, failures of major water transmission facilities and other adverse events. MWD's current approach to managing water shortages has evolved from its experiences during the droughts of 1976 -77 and 1987 -92 into the Water Surplus and Drought Management Plan ( "WSDM Plan"). The WSDM Plan splits resource actions into two major categories: Surplus Actions and Shortage Actions. The Surplus Actions store surplus water, first inside then outside the region. The Shortage Actions of the WSDM Plan are split into three subcategories: Shortage, Severe Shortage and Extreme Shortage. Each category has associated actions that could be taken as a part of the response to prevailing shortage conditions. Conservation and water efficiency programs are part of MWD's resource management strategy through all categories. MWD's plan for allocation of water supplies in the event of shortage allocates MWD's water supplies among its member agencies, based on the principles contained in the WSDM Plan, to reduce water use and drawdowns from water storage reserves. MWD's member agencies and retail water suppliers in MWD's service area also have the ability to implement water conservation and allocation programs, and some of the retail suppliers in MWD's service area have initiated conservation measures. The success of conservation measures in conjunction with the Water Supply Allocation Plan is evidenced as a contributing factor in the lower than budgeted water sales during fiscal years 2009 -10, 2010 -11 and 2011 -12. Legislation approved in November 2009 sets a statewide conservation target for urban per capita water use of 20 percent reductions by 2020 (with credits for existing conservation) at the retail level, providing an additional catalyst for conservation by member agencies and retail suppliers. MWD's water sales projections incorporate an estimate of conservation savings that will reduce retail demands. Current projections include an estimate of additional water use efficiency savings that would result from local agencies reducing their per capita water use in response to the 20 percent by 2020 conservation savings goals required by recent legislation as well as an estimate of additional conservation that would have to occur to reach MWD's IRP goal of reducing overall regional per capita water use by 20 percent by 2020. MWD's Water Supply Allocation Plan provides a formula for equitable distribution of available water supplies in case of extreme water shortages within MWD's service area. Delivery within a member agency of more than its allocated amount of MWD supplies will subject the member agency to a penalty of one to four times MWD's full service rate for untreated Tier 2 water, depending on how much the member agency's water use for the twelve -month period beginning on July 1 exceeds its allocated amount. Any penalties collected may be rebated to the member agency that paid them to fund water management projects. The Water Supply Allocation Plan was approved by the Board in February 2008. On April 14, 2009, MWD's Board adopted a resolution declaring a regional water shortage and implementing the Water Supply Allocation Plan, effective July 1, 2009. The Board set the "Regional Shortage Level" at Water Supply Allocation Plan Level 2, which required reduction of regional water use by approximately 10 percent and resulted in a total allocation of about 2.09 million acre -feet of MWD water in fiscal year 2009 -10. On April 13, 2010, the Board adopted a resolution recognizing the continuing regional water shortage and again setting the Regional Shortage Level at Water Supply Allocation Plan Level 2, which sustained the regional water use reduction of approximately 10 percent. Due to improved hydrologic and storage conditions, on April 12, 2011, the Board terminated implementation of the 2010 -11 Water Supply Allocation Plan, restoring imported water deliveries to member agencies without risk of allocation penalties. Following Board - directed review of the Water Supply Allocation Plan three years after its approval, on September 13, 2011, the Board approved adjustments to the formula for calculating member agency supply allocations for any future implementation of the Water Supply Allocation Plan. Although the Act gives each of MWD's member agencies a preferential entitlement to purchase a portion of the water served by MWD, historically, these rights have not been used in allocating MWD's water. MWD's member agencies and retail water suppliers in MWD's service area also may implement water conservation and allocation programs within thegUKti �eLyice territories in times of shortage. Water Demand and Deliveries The City records the volume of water delivered by the Water System. Over the past ten years, the City has delivered, on average, 40,472 acre -feet of potable water. The average daily demand is approximately 110.9 acre -feet. The following table summarizes treated water deliveries for the most recent ten Fiscal Years and the projection for Fiscal Year 2013/14. TABLE 5 City of Santa Ana Historic Potable Water Deliveries(t) (Fiscal Year) Fiscal Year Total Water Percent of Ten June 30 Delivered Year Average 2004 44,942 11.1% 2005 43,417 10.7 2006 42,372 10.5 2007 44,668 11.0 2008 41,969 10.4 2009 40,240 9.9 2010 36,499 9.0 2011 36,353 9.0 2012 36,731 9.1 2013 37,527 9.3 2014«) 39,379 9.7 "' In acre -feet. Includes potable water which is discarded. (2) Projected. Source: City of Santa Ana. See Table 1 herein for a description of historical water sales. During Fiscal Year 2012/13, residential uses comprised approximately 68% of total consumption while commercial /industrial uses constituted approximately 25 %. The City estimates that potable water delivered by the Water System for the current and next five Fiscal Years will increase minimally by 0.5% a year, due to the combined effects of population growth and implementation of State mandates that urban water systems reduce consumption by 20% by the year 2020. Actual potable water deliveries may vary materially from such estimates. The City has factored this anticipated increase in sales in its revised rate schedules (discussed below). On April 20, 2009 the City adopted Ordinance NS -2781, which established permanent water conservation standards, including increased conservation measures based on the level of water shortages. These measures involve limitations on time and duration of landscape irrigation, commercial and industrial water usage restrictions and other measures to reduce waste. Water System Rates and Charges General. hi accordance with California law, the City may, from time to time, fix, alter or change fixed monthly system access fees, commodity charges and other fees related to the Water System. Consequently, the City periodically reviews water rates. In accordance with California law, the City reviews such charges and fees to determ ne if they are sufficient to cover operation and maintenance costs, capital improvement expenditures and debt service requirements. Such charges and fees are set by the City for the services provided by the Water System after a public hearing is held, generally at the time of adoption of the annual budget. Neither the City nor the Water System is subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body in connection with the establishment of charges and fees related to the Water System. See "RISK FACTORS — Proposition 218" for a discussion of the treatment of the City's rates and charges in light of Proposition 218, 80A-1 69 29 The City staff periodically determines the accuracy of the Water System rate structure after full consideration of expected operations, maintenance and capital costs. In accordance with City policy, operating surpluses may be added Water System unrestricted reserves, or returned to ratepayers through mitigation of future rate increases. The following table discloses the current schedule of water rates and charges of the City effective July 1, 2014, reflecting multi -year rate adjustments approved June 6, 2011. These rates are effective for a five -year term. After such time, the City will be required to conduct Proposition 218 proceedings to set rates and charges. hi addition, the City is authorized to pass on increases due to assessments and other supply costs passed on by MWD, over which the City has no control. In Fiscal Year 2013/14 these pass through charges are not projected to result in any increases. TABLE 6 City of Santa Ana Water System Rates and Charges (Effective as of July 1 of Corresponding Fiscal Year) Bi- Monthly Meter Charge Fiscal Year ending June 30 Meter Size 2010n) 2011 2012 2013 2014 2015 5/8" & 3/4" $ 7.00 $ 7.00 $ 7.00 $ 7.00 $ 7.00 $ 7.00 1" 11.00 11.00 11.00 11.00 11.00 11.00 1 -1/2" 16.40 16.40 16.40 16.40 16.40 16.40 2" 23.40 23.40 23.40 23.40 23.40 23.40 3" 46.40 46.40 46.40 46.40 46.40 46.40 4" 116.60 116.60 116.60 116.60 116.60 116.60 6" 280.00 280.00 280.00 280.00 280.00 280.00 p) Rates prior to current rate increase. Source: City of Santa Ana. Bi- Monthly Consumption Charge (Fiscal Year ending June 30) Category 2011 2012 2013 2014 2015 Base Rate -Tier 1 (0 -44 cc) $2.727 $2.727 $2.727 $2.727 $2.727 Trailblock Rate Tier 2 (45 ccf +) 3.154 3.154 3.154 3.154 3.154 Multifamily Dwelling (0 -44 ccf of water per dwelling unit) 2.727 2.727 2.727 2.727 2.727 Multifamily Dwelling (45 ccf+ per dwelling unit) 3.154 3.154 3.154 3.154 3.154 City owned facilities and all schools 2.727 2.727 2.727 2.727 2.727 Wholesale Food Processing Companies 2.727 2.727 2.727 2.727 2.727 Retail Centers with More than 25 Business on Master Meters 2.727 2.727 2.727 2.727 2.727 Source: City of Santa Ana 80A -170 30 The following table presents the current connection fees levied by the City. TABLE 7 City of Santa Ana Water System Connection Fees (as of July 1, 2014) Meter Size Connection Fee 5/8" x 3/4" $ 60.00 3/4" x 1" 80.00 P' 100.00 1 1/2" 310.00 2" 380.00 3" 380.00 4" 380.00 6" 380.00 Source: City of Santa Ana. 80A -171 31 The table below sets forth a comparison of average monthly bill for a single family residential unit with a 5/8 -inch meter in the City to those of surrounding communities (utilizing 18,700 gallons of water per month): TABLE 8 City of Santa Ana Monthly Bill Comparison (As of July 1, 2014) Community Monthly Residential Bill Anaheim, City of $ 53.63 East Orange CWD Retail Zone 87.39 Huntington Beach, City of 55.19 Mesa WD 80.25 Newport Beach, City of 83.36 Serrano WD 92.51 Yorba Linda WD 74.73 Brea, City of 73.17 Buena Park, City of 49.10 Fountain Valley, City of 75.36 Fullerton, City of 60.12 Garden Grove, City of 73.23 Golden State WC 101.44 La Habra, City of 73.97 La Palma, City of 66.26 Orange, City of 51.82 Santa Ana, City of 72.95 Santa Margarita WD 62.10 Seal Beach, City of 67.63 South Coast WD 106.30 Tustin, City of 57.87 Westminster, City of 65.70 El Toro WD 68.80 Emerald Bay Serv. Distr. 96.89 Irvine Ranch WD 36.15 Laguna Beach CWD 103.89 Moulton Niguel WD 47.58 Source: City of Santa Ana Collection Procedures The City is on a bi- monthly billing cycle for water charges. Payment is due within 30 days, and is considered delinquent if not paid by that date. If payment is not received, a 7 day urgent delinquent notice is sent, after which time water service is disconnected. The City has not had any material charges considered uncollectible in the past several years. If services are shut -off, a re- establishment fee of $134.58 if such re- establishment is required after hours, the fee to reestablish service includes payment of all delinquent fees and a range of $62.31 through $416.62 reconnect fee depending upon the meter size. Outstanding Water System Indebtedness As of the date of issuance of the Bonds, the only indebtedness secured by Net System Revenues will be the Installment Payments securing the Bonds (See "INTRODUCTION - Security for the Bonds "). 80A -172 32 Largest Customers The following are the ten largest potable water customers of the Water System based on estimated consumption as of June 30, 2013. The top ten potable water users accounted for approximately 4% of total water consumption, and approximately 3.87% of revenues, in Fiscal Year 2012/13. TABLE 9 City of Santa Ana Largest Water Customers (Fiscal Year 2013) Percentage Source: City of Santa Ana Comprehensive Audited Financial Report Historic Water Sales Revenues The following table shows the City's annual Water System Revenues for the five most recent Fiscal Years, excerpted from the City's audited financial statements, and the unaudited results for Fiscal Year 2013/14. TABLE 10 City of Santa Ana Historic Water Sales System Revenues (As of June 30) Year Water of Total 2010 Consumption Water Water Customer (ft/acres) Revenues Chroma Systems 322,081 0.66% Adohr Farms Inc 274,383 0.56 Fairview Villas 199,453 0.41 Power Circuits Inc. 217,053 0.44 County of Orange 174,628 0.36 Warwick Square Assoc. Inc. 144,487 0.29 Far West Management Corp 139,055 0.28 Town Square Owners 135,096 0.28 County of Orange 144,769 0.30 County of Orange 140,597 0.29 TOTALS 1,891,602 3.87% Source: City of Santa Ana Comprehensive Audited Financial Report Historic Water Sales Revenues The following table shows the City's annual Water System Revenues for the five most recent Fiscal Years, excerpted from the City's audited financial statements, and the unaudited results for Fiscal Year 2013/14. TABLE 10 City of Santa Ana Historic Water Sales System Revenues (As of June 30) Year Water Sale Revenue % Change 2010 $43,601,026 5.6% 2011 42,239,987 -3.1 2012 43,733,561 3.6 2013 45,096,397 3 2014tl1 45,327,310 2.4 (1) Estimated, unaudited. Source: City of Santa Ana. 80A -173 33 Historic Operating Results The following table 11 is a summary of audited operating results of the Water System for the last five Fiscal Years, and the unaudited estimates for Fiscal Year 2013/14. The auditor has not reviewed such statements in connection with their inclusion in this Official Statement, nor has the City requested such a review. Selected information from the aforementioned audited financial statements has been used to prepare the following four -year comparative summary of revenues and expenses. The results presented in the following summary are qualified in their entirety by reference to the respective annual consolidated audited financial statements of the City, including the notes thereto. Copies of the audited financial statements for the City can be obtained at the office of the City's Finance Director. Table 11 is the City's historical debt service coverage based upon "System Revenues" and "Maintenance and Operation Costs" as defined in the Installment Purchase Agreement. TABLE 11 City of Santa Ana Historic Operating Results (Fiscal Year Ended June 30) Non- Operating Revenues (Expenses) Intergovernmental 2010 2011 2012 2013 2014(') Operating Revenues: - (34,136) (4,999) (489,982) 298,889 Charges for Services $48,581,648 $47,471,674 $49,027,532 $50,835,116 $51,546,808 Miscellaneous 200.114 311.755 454456 503.686 510.738 Total Operating Revenues $48,781,762 $47,783,429 $49,481,988 $51,338,802 $52,057,546 Operating Expenses: $3,202,561 $2,227,470 $ 645,960 ($1,113,598) $ 4,529,730 Personal Services $ 4,315,260 $ 3,970,851 $ 4,482,518 $ 3,883,644 $ 4,365,216 Contractuat Services 10,862,094 10,486,225 11,506,262 11,027,568 10,862,154 Materials and Supplies 10,969,682 11,376,567 13,653,137 11,430,534 16,951,482 Other Services and Charges 16,395,679 16,727,496 16,555,311 15,215,619 12,948,492 Depreciation 2.400.464 2,355,524 2.346.182 2.276,297 2.147 321 Total Operating Expenses $44,943,179 $44,916,663 $48,543,41 $43.833,662 $47,274,665 Operating Income (Loss) $ 3,838,583 $ 2,866,766 $ 938,578 $ 7,505,140 $ 4,782,881 Non- Operating Revenues (Expenses) Intergovernmental - $ 85,096 $ 390,077 Net (decrease) in the Fair Value of Investment - (34,136) (4,999) (489,982) 298,889 Investment Earnings $ 147,549 66,598 49,499 70,827 84,851 Interest Expense (7835711 (7568541 (727.195) (694443) (6368911 Total Non - Operating Revenues (Expenses) ($ 636,022 639,296 ($ 292,618 - (253 1511 Income (Loss) Before Transfers $3,202,561 $2,227,470 $ 645,960 ($1,113,598) $ 4,529,730 Transfers hi - - - - Transfers Out Net Income $ 3,202,561 $ 2,227,470 $ 645,960 $ 6,391,542 $ 4,529,730 Net Assets - Beginning $67,240,440 $70.443.001 $72,670,471 $73,3t6,431 $79,707,973 Net Assets - Ending $70 443.001 $72 670 471 $73,316,431 $79 707 973 $84,237,703 (r) Unaudited esthnate, Source: City of Santa Ana Comprehensive Audited Financial Reports 80A -174 34 Historical Operating Results and Debt Service Coverage The table below describes the City's historic operating results, debt service coverage and excess revenues for the Water System for the Fiscal Years ending June 30, 2011, 2012 and 2013, excluding depreciation. TABLE 12 City of Santa Ana Historical Debt Service Coverage Source: City of Santa Ana 80A -175 35 2011 2012 2013 Operating Revenues Charges for Services $47,471,674 $49,027,532 $50,835,116 Miscellaneous 311,755 454,456 503,686 Total Operating Revenues $47,783,429 $49,481,988 $51,338,802 Operating Expenses Cost of Water $17,248,260 $20,659,625 $18,258,688 Maintenance and Operations 25,312,879 25,537,603 23,298,677 Total Operating Expenditures $42,561,139 $46,197,228 $41,557,365 Net Operating Income $ 5,222,290 $ 3,284,760 $ 9,781,437 Non - Operating Revenues: Investment Income $ 66,598 $ 49,499 $ 70,827 Total Non - Operating Revenues $ 66,598 $ 49,499 $ 70,827 Net Revenue $ 5,288,888 $ 3,334,259 $ 9,852,264 Debt Service $ 1,717,526 $ 1,719,341 $ 1,718,301 Debt Service Coverage Remaining Revenues $ 3,571,362 $ 1,614,918 $ 8,133,963 Source: City of Santa Ana 80A -175 35 Projected Operating Results and Debt Service Coverage The City's estimated projected operating results for the Water System for the Fiscal Year ending June 30, 2015 is set forth below, excluding depreciation. TABLE 13 City of Santa Ana Projected Operating Results (Fiscal Year) Source: City of Santa Ana 80A -176 36 2014 2015 2016 Operating Revenues Charges for Services $51,546,808 $49,530,770 $51,287,410 Miscellaneous 510,738 119,420 119,420 Total Operating Revenues $52,057,546 $49,650,190 $51,406,830 Operating Expenses Cost of Water $23,093,666 $19,093,280 $21,658,860 Maintenance and Operations 22,033,678 24,731,855 25,226,492 Total Operating Expenditures $45,127,344 $43,825,135 $46,885,352 Net Operating Income $ 6,930,202 $ 5,825,055 $ 4,521,478 Non - Operating Revenues: Investment Income $ 84,851 $ 32,000 $ 32,000 Total Non - Operating Revenues $ 84,851 $ 32,000 $ 32,000 Net Revenue $ 7,015,053 $ 5,857,055 $ 4,553,478 Debt Service $ 1,709,363 $ 1,707,900 $ 1,712,136 Debt Service Coverage Remaining Revenues $ 5,305,690 $ 4,149,155 $ 2,841,342 Source: City of Santa Ana 80A -176 36 RISK FACTORS The following factors, along with other information in this Official Statement, should be considered by potential investors in evaluating the risks in the purchase of the Bonds. Water System Demand and Growth There can be no assurance that the local demand for the services provided by the Water System will be maintained at levels described in this Official Statement under the heading "THE WATER SYSTEM." Reduction in the level of demand due to conservation efforts of the City and MWD, or other factors, could require an increase in rates or charges in order to produce Net System Revenues sufficient to comply with the City's rate covenant in the Installment Purchase Agreement. Such rate increases could increase the likelihood of nonpayment, and could also further decrease demand. There can be no assurance that any other entity with regulatory authority over the Water System will not adopt further restrictions on operation of the Water System. Water System Expenses There can be no assurance that the City's expenses for the Water System will be consistent with the levels described in this Official Statement. Changes in technology, new regulatory requirements, increases in the cost of energy or other expenses would reduce Net System Revenues, and could require substantial increases in rates or charges in order to comply with the rate covenant. Additionally, the cost of purchasing water from MWD continues to increase. Such rate increases could increase the likelihood of nonpayment, and could also decrease demand. Parity Obligations Although the City has covenanted not to issue additional obligations payable from Net System Revenues senior to the Installment Payments, the Installment Purchase Agreement permits the issuance by the City of certain indebtedness which may have a lien upon the Net System Revenues which is on a parity basis to the lien which secures the Installment Payments, if certain coverage tests are met (see "THE BONDS — Issuance of Parity Obligations" herein). These coverage tests involve, to some extent, projections of Net System Revenues. If such indebtedness is issued or incurred, the debt service coverage for the Installment Payments securing the Bonds will be diluted below what it otherwise would be subject to under the coverage tests. Moreover, there is no assurance that the assumptions which form the basis of such projections, if any, will be actually realized subsequent to the date of such projections. If such assumptions are not realized, the amount of future Net System Revenues may be less than projected, and the actual amount of Net System Revenues may be insufficient to provide for the payment of the Installment Payments and such additional indebtedness. Proposition 218 On November 5, 1996, the voters of the State approved Proposition 218, the "Right to Vote on Taxes Act." Proposition 218 added Articles XIIIC and XIHD to the State Constitution, which contain a number of provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges. 'Proposition 218 also extends the initiative power to reducing or repealing any local taxes, assessments, fees and charges. This extension of the initiative power is not limited to taxes, assessments, fees and charges imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees or charges, except those which are pledged to the repayment of debt. If such a repeal or reduction in City fees or charges were to occur, and it was held that any such taxes, assessments, fees or charges were not pledged to any debt repayment, the City's ability to make Installment Payments could be adversely affected. In addition, while the matter is not free from doubt, Proposition 218 imposed restrictions on the levy of charges for "property- related services." In July 2006 the California Supreme Court confirmed that a public agency's charges for ongoing water delivery are "fees and charges" within the meaning of Proposition 218. As a result, voters within the boundaries of the OQcA4717an initiative measure that reduced or repealed 37 water rates and charges levied by the City, although it is not clear (and has not been determined by State courts) whether such action would be enforceable where such fees and charges are pledged to the repayment of indebtedness. The City's current fees for water service were adopted in accordance with the requirements of Proposition 218. The City believes that its fees for water service will not be adversely affected by the application of the procedural requirements of Proposition 218, and that Proposition 218 would not have any immediate adverse effect on its ability to operate its Water System. However, there can be no assurance of the availability of remedies to protect fully the interest of the holders of the Bonds. In addition, Proposition 218 affects the levy of rates and charges of certain public agency customers of the City. Constitutional Limit on Appropriations, Fees and Charges If a portion of the Water System rates or connection charges were determined by a court to exceed the reasonable costs of providing service, any fee which the City charges may be considered to be a "special tax," which under Articles XIIIA or XIIID of the California Constitution must be authorized by a two - thirds vote of the affected electorate. This requirement is applicable to the City's rates for service provided by the Water System. The reasonable cost of service provided by the Water System has been determined by the State Controller to include depreciation and allowance for the cost of capital improvements. In addition, the State courts have determined that fees such as connection fees (capacity charges) will not be special taxes if they approximate the reasonable cost of constructing Water System improvements contemplated by the local agency imposing the fee. Such court determinations have been codified in the Government Code of the State of California (Section 66000 et seq.). Under Article XIIIB of the California Constitution, state and local government entities have an annual "appropriations limit" which limits their ability to spend certain moneys called "appropriations subject to limitation," which consists of tax revenues, certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. In general terms, the "appropriations limit" is to be based on certain Fiscal Year 1978/79 expenditures, and is to be adjusted annually to reflect changes in the consumer price index, population and services provided by these entities. Among other provisions of Article XIIIB, if an entity's revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. The City is of the opinion that the rates and use charges imposed by the City in connection with the Water System do not exceed the costs it reasonably bears in providing such services. Limited Recourse on Default If the City defaults on its obligation to make histallment Payments, the Trustee, as assignee of the Authority, has the right to accelerate the total unpaid principal amounts of the Installment Payments. However, in the event of a default and such acceleration there can be no assurance that the City will have sufficient Net System. Revenues to pay the accelerated Installment Payments. No Debt Service Reserve Account The Authority is not funding a debt service reserve account for the Bonds. In the event of a failure by the City to pay Installment Payments when due and the Authority to timely pay debt service on the Bonds, no other source of funds will be available to make such payments while the Trustee pursues available remedies under the Indenture. Limitations on Remedies Available; Bankruptcy The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal banlaup80 e,,;tfalicable bankruptcy, insolvency, reorganization, 38 moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; equitable principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercising of powers by the federal or State government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights. No Obligation or Ability to Tax The obligation of the City to pay the Installment Payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay Installment Payments does not constitute a debt or indebtedness of the City, the State or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction. The Authority has no taxing power. Change in Law In addition to the other limitations described herein, the State electorate or Legislature could adopt a constitutional or legislative reallocations of property taxes or an initiative with the effect of reducing revenues payable to or collected by the City. There is no assurance that the State electorate or Legislature will not at some future time approve additional limitations that could have the effect of reducing the Net System Revenues and adversely affecting the security of the Bonds. Geologic and Topographic The value of the Water System, and the ability to generate System Revenues, is contingent upon the ability of the City to deliver water to its customers. The financial stability of the City can be adversely affected by a variety of factors, particularly those which may affect infrastructure and other public improvements and private improvements and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions (such as earthquakes), topographic conditions (such as earth movements and floods) and climatic conditions (such as droughts and tornadoes). The City is in an active geological area. Engineering standards require that some of these factors be taken into account, to a limited extent, in the design of improvements, including the Water System. Some of these factors may also be taken into account, to a limited extent, in the design of other infrastructure and public improvements neither designed nor subject to design approval by the City. Design criteria in any of these circumstances are established upon the basis of a variety of considerations and may change, leaving previously - designed improvements unaffected by more stringent subsequently established criteria. In general, design criteria reflect a balance at the time of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur. Conditions may occur which may result in damage to improvements in varying degrees, and such damage may entail significant repair or replacement costs, and there can be no assurance that such repair or replacement will occur. Under any of these circumstances, the public and private improvements within the City in general may well depreciate or disappear, notwithstanding the establishment of design criteria for any such condition. The area encompassed by the City, like that in much of California, may be subject to unpredictable seismic activity. Occurrence of earthquakes could cause an interruption of deliveries of water to and from the City until repairs could be effected, thus possibly diminishing the value of the Water System and the amount of Net System Revenues. 80A -179 39 Risks Associated with OCWD and MWD The operation and physical conditions of the MWD and OCWD facilities are subject to a number of risk factors that could adversely affect the reliability of such water supply and corresponding water deliveries to the City, or increase the operating expenses of OCWD and MWD, which could increase the City's Maintenance and Operation Costs. See certain risks associated with OCWD and MWD described in "THE WATER SYSTEM" above. Additionally, MWD faces continuing litigation with respect to endangered species projected under federal and state law which is not enumerated in this Official Statement. OCWD and MWD face various challenges in the continued supply of imported water to Orange County. A description of these challenges as well as a variety of other operating information with respect to OCWD and MWD is included in certain disclosure documents prepared, respectively, by OCWD and MWD. Both OCWD and MWD have entered into certain continuing disclosure agreements pursuant to which they are contractually obligated, for the benefit of owners of certain of their respective outstanding obligations, to file certain annual reports, notices of certain material events as defined under Rule 15c2 -12 of the Exchange Act ( "Rule 150-12 ") and annual audited financial statements with certain information repositories. Neither OCWD nor MAID have entered into any contractual commitment with the Authority, the City, the Trustee or the Owners of the Bonds to provide information to the Authority, the City, the Trustee or the Owners of the Bonds. Neither OCWD or MWD have reviewed this Official Statement and have made no representations or warranties with respect to the accuracy or completeness of the information contained or incorporated herein, including information with regard to OCWD or MWD. Impact of State Budget The State has experienced budgetary shortfalls in recent fiscal years, although it is currently expected to finish the current fiscal year with a budget surplus. The City cannot predict what actions will be taken in the future by the State Legislature and the Governor to deal with changing State revenues and expenditures, and it is possible that future legislation will impact revenues of local agencies. These developments at the State level will most likely adversely affect local governments. IIowever, the City does not currently anticipate that the State budget problems will materially adversely impact the operation of the City's Water System. Secondary Market for Bonds There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then - prevailing circumstances. Such prices could be substantially different from the original purchase price. Federal Tax - Exempt Status of the Bonds The Internal Revenue Code of 1986, as amended (the "Code ") imposes a number of requirements that must be satisfied for interest on state and local obligations, such as the Bonds, to be excludable from gross income for federal income tax purposes. These requirements include limitations on the use of Bond proceeds, limitations on the investment earnings on Bonds proceeds prior to expenditure, a requirement that certain investment earnings on the Bond proceeds be paid periodically to the United States and a requirement that the issuers file an information report with the Internal Revenue Service (the "IRS "). The Authority and the City have covenanted in certain of the documents referred to herein that they will comply with such requirements. Failure to comply with the requirements stated in the Code and related regulations, rulings and policies may result in the treatment of interest on the Bonds as taxable, retroactively to the date of issuance of such Bonds. Fi l ffl oe l 40 IRS Audit of Tax - Exempt Issues The IRS has initiated an expanded program for the auditing of tax- exempt issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar obligations). 80A -181 41 TAX MATTERS In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code ") and is exempt from State of California personal income taxes. Bond Counsel is of the further opinion that interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes, provided however, that for the purpose of calculating federal corporate alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The Authority has covenanted to comply with certain restrictions designed to insure that interest on the Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Bonds being included in federal gross income, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bond Owners from realizing the full current benefit of the tax status of such interest. As one example, the Obama Administration recently announced a legislative proposal which, for tax years beginning on or after January 1, 2013, generally would limit the exclusion from gross income of interest on obligations like the Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Certain requirements and procedures contained or referred to in the Indenture, the Tax Certificate, and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to the exclusion from gross income of interest on any Bond if any such change occurs or action is taken or omitted upon the advice or approval of counsel other than Best Best & Krieger LLP. The Internal Revenue Service (the "IRS ") has initiated an expanded program for the auditing of tax - exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of other similar bonds). Although Bond Counsel is of the opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect a Bond Owner's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the Bondholder or the Bond Owner's other items of income or deduction, and Bond Counsel expresses no opinion regarding any such other tax consequences. A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C. 80A -182 42 CONTINUING DISCLOSURE The City has covenanted, pursuant to a Continuing Disclosure Agreement, dated as of June 1, 2014, for the benefit of holders and beneficial owners of the Bonds to provide, or cause to be provided, certain financial information and operating data relating to the City by not later than 270 days following the end of the City's Fiscal Year (which currently would be June 30), commencing with the report for the Fiscal Year ended June 30, 2013 (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events, if material. The Annual Report and notices of material events will be filed by the City with the Municipal Securities Rulemaking Board (the "MSRB "). The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption "APPENDIX D - Form of Continuing Disclosure Agreement." These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5). The City, rather than the Authority, shall be responsible for providing this information. The City has [complied/failed to] fully comply with respect to its previous undertaking with respect to the Rule with respect to the prior Obligations and certain other obligations of . [City to provide status of continuing disclosure obligations]. NO LITIGATION There is no proceeding or litigation of any nature now pending to restrain or enjoin the issuance, sale, execution or delivery of the Bonds, or in any way contesting or affecting the validity of the Bonds, the proceedings of the Authority taken with respect to the issuance or sale thereof, the pledge or application of any moneys or securities provided for the payment of the Bonds, the existence or powers of the Authority or the title of any officers of the Authority to their respective positions. A certificate of the Authority to this effect will be delivered on the date of delivery of the Bonds. RATING Standard & Poor's Credit Market Services, a division of The McGraw -Hill Companies, hie. ( "S &P ") has assigned its municipal bond ratings of " " to the Bonds. The ratings reflect only the views of such organization and an explanation of the significance of such rating may be obtained from S &P. There is no assurance that any rating will continue for any given period of time for the Bonds or that it will not be revised downward or withdrawn entirely by such rating agency, if, in the judgment of such rating agency, circumstances so warrant. The Authority undertakes no responsibility to oppose any downward revision or withdrawal of any rating obtained. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds. FINANCIAL ADVISOR The Authority has retained Urban Futures Incorporated, Los Angeles, California, as Financial Advisor for the sale of the Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness of fairness of the information contained in this Official Statement. Urban Futures Incorporated is an independent advisory firm and is not engaged in the business of underwriting, trading, or distributing municipal or other public securities. PROFESSIONAL FEES In connection with the execution of the Bonds, fees payable to Urban Futures Incorporated, as Financial Advisor, Best Best & Krieger LLP, as Bond Counsel and as Disclosure Counsel, and The Bank of New York Mellon Trust Company, N.A., as Trustee are contingent upon the execution and delivery of the Bonds. APPROVAL OF LEGALITY Best Best & Krieger LLP, Riverside, California, Bond Counsel, will render an opinion with respect to the validity and enforceability of the Hldent r &YA IWtvalidity of the Bonds. Certain matters will be 43 passed upon for the Authority and City by the City Attorney, and by Best Best Best & Krieger LLP, Riverside, California, Disclosure Counsel. UNDERWRITING The Bonds are being sold to Stifel, Nicolaus & Company, Incorporated (the "Underwriters "). The Underwriters have agreed, subject to certain conditions, to purchase the Bonds from the Authority at a purchase price of $ (being the principal amount of the Bonds, less an Underwriter's discount of $ , plus /less original issue premium of $ . The obligations of the Underwriter are subject to certain conditions precedent, and they will be obligated to purchase all such Bonds if any such Bonds are purchased. The Underwriter intends to offer the Bonds to the public initially at the prices and /or yield set forth on the inside cover page of this Official Statement, which prices or yields may subsequently change without any requirement of prior notice. The Underwriter reserves the right to join with dealers and other underwriters in offering the Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealers may re -allow any such discounts on sales to other dealers. In reoffering Bonds to the public, the Underwriter may over - allocate or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. [Balance of this page intentionally left blank] .I J A--. 44 ADDITIONAL INFORMATION Any statements in this Preliminary Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or Owners of any of the Bonds. The execution and delivery of this Official Statement have been authorized by the members of the Authority. SANTA ANA FINANCING AUTHORITY President CITY OF SANTA ANA Finance Executive Director 80A -185 45 APPENDIX A CITY OF SANTA ANA GENERAL, DEMOGRAPHIC INFORMATION Fol •• A -1 APPENDIX B SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS The following material is descriptive of the City of Santa Ana and the surrounding areas of Orange County (the "County "). It has been prepared by or excerpted from sources as noted herein, and has not been independently verified by Bond Counsel, Disclosure Counsel or the Underwriter. The Bonds are payable solely from the sources described herein (see "SECURITY FOR THE BONDS "). General The City of Santa Ana, county seat of Orange County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City was established by William H. Spurgeon in 1869. The City was incorporated on June 1, 1886 and reorganized under a City Charter in 1888. In 1952, the voters approved a charter which established a council- manager form of government. The charter was modified by an election in 1986 to provide for the mayor to be elected by the voters. A 1988 redistricting resulted in a six - member City Council, in addition to the Mayor, which is elected at large for four -year terms. The City provides traditional city services, including fire protection (192 sworn personnel with ten stations) and police protection (329 sworn personnel and three stations). The City has approximately 1,492 employees. The Water System provides water service through the municipal water department to over 44,657 accounts. There are two libraries and 41 parks in the City. Public education for grades K -12 is provided by the Santa Ana Unified School District, the Garden Grove Unified School District, the Orange Unified School District and the Tustin Unified School District. The City has served as the county seat since the formation of Orange County in 1889. Numerous government offices have taken advantage of the City's central location and position as county seat. City, county, state and federal offices are conveniently located in the multi - government civic Center in the heart of the City. The City has an industrial base which supports the local economy. 80A -187 B -1 Population The following table illustrates population estimates of the City for the last ten fiscal years. Employment CITY OF SANTA ANA Population (As of June 2013) Calendar Number of Year Population 2012 329,915 2011 327,731 2010 324,528 2009 357,754 2008 355,662 2007 353,184 2006 353,428 2005 351,322 2004 351,697 2003 347,237 Source: State Department of Finance. CITY OF SANTA ANA Principal Employers (Fiscal Year 2013) (0 "Total Employment' as used above represents the total employment of all employers within the City limits Source: City of Santa Ana Comprehensive Audited Financial Report dated as of June 30, 2013. I Number of Percent of Total Employer Employees Employmenttll County of Orange 17,447 10.7% Santa Ana Unified School District 4,665 2.9 Santa Ana College 2,390 1.5 Integrated Healthcare Holdings 1,932 1.2 City of Santa Ana 1,500 0.9 Corinthian Colleges Inc 1,400 0.9 First American Financial 1,215 0.7 Orange County Register (Freedom Communications) 1,100 0.7 Ingram Micro 985 0.6 Abbott Medical Optics Inc 750 0.5 (0 "Total Employment' as used above represents the total employment of all employers within the City limits Source: City of Santa Ana Comprehensive Audited Financial Report dated as of June 30, 2013. I LOS ANGELES COUNTY -LONG BEACH - GLENDALE METROPOLITAN STATISTICAL AREA LABOR FORCE INDUSTRY EMPLOYMENT ANNUAL AVERAGES (in thousands) Title Civilian Labor Force Civilian Employment Civilian Unemployment Civilian Unemployment Rate Total, All Industries Total Farm Total Nonfarm Mining and Logging Construction Manufacturing Wholesale Trade Retail Trade Utilities Information Financial Activities Professional & Business Services Educational & Health Services Leisure & Hospitality Other Services Government 2008 2009 2010 2011 2012 2013 4,936,000 4,907,600 4,916,300 4,936,400 4,901,300 4,960,300 4,566,900 4,339,300 4,298,500 4,331,500 4,365,800 4,470,700 369,100 568,300 617,900 604,900 535,500 489,600 7.5% 11.6% 12.6% 12.3% 10.9% 9.9% 4,190,800 3,955,600 3,894,600 3,914,600 4,012,300 4,118,000 6,900 - 6,200 6,200 5,600 5,400 5,500 4,183,900 3,949,500 3,888,400 3,909,000 4,006,900 4,112,600 4,400 4,100 4,100 4,000 4,300 4,600 145,200 117,300 104,500 105,000 109,100 116,500 434,500 389,200 373,200 366,800 367,200 366,500 223,700 204,500 203,000 205,200 211,300 217,800 416,500 387,000 386,400 392,900 400,900 405,900 13,500 13,000 12,100 12,400 12,600 12,200 210,300 191,200 191,500 191,900 191,400 197,300 233,300 216,000 209,500 208,400 210,700 211,800 582,600 529,800 527,500 542,900 570,000 590,300 619,000 639,900 637,200 643,100 674,100 713,400 401,600 385,500 384,800 394,600 415,300 436,700 146,100 137,900 136,700 136,900 141,600 145,500 603,700 595,900 579,600 565,500 556,800 549,200 Source: California Economic Development Department. Regional Economy The local economy has declined in recent fiscal years. This is due to many factors that continue to impact the City. The increase of unemployment, decline in consumer confidence and the decline in sales tax are factors that have had a negative impact to the City. The unemployment rate for the City of Santa Ana is %. As of 2013 general fund revenues have decreased by %. Despite the decrease in general fund revenues, the City continues to support the governmental activities of the City. This has been accomplished by adjusting the budget policy that was approved by City Council. It is impossible to predict whether or not the economic situation will decline further or when recovery may be anticipated. For the City the primary decline is in sales tax, however other revenue is also being affected by the weak economy. Close attention to the economy and the State Budget are critical and adjustments may be necessary in the future. At this point in time, no major cuts in programs and services are needed. FA • • L • Assessed Valuation Assessed valuation in the City has increased steadily over all in the past ten years. CITY OF SANTA ANA Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Fiscal Year Taxable Total Direct Ended Taxable Assessed Tax June 30 Secured Unsecured Value Rate(l) 2013 $18,829,929 $1,432,409 $20,093,576 - 2012 18,509,578 1,591,287 19,928,684 - 2011 18,313,282 1,575,006 19,714,394 - 2010 18,811,560 1,700,267 20,337,726 - 2009 20,220,321 1,711,122 21,756,428 - 2008 19,553,630 1,630,486 21,006,625 - 2007 17,927,887 1,631,584 19,378,852 - 2006 16,039,774 1,415,202 17,268,935 - 2005 14,530,607 1,449,024 15,792,399 - 2004 13,388,870 1,467,731 14,669,037 - (0 Basic levy (Prop. 13) for county, city, schools, and districts (apportioned by County Auditor). Proposition 13 in effect eliminated the property rates for cities, exclusive of voted authorizations for which a rate may be established for debt service on debt authorized by the voters prior to July 1, 1978. Source: City of Santa Ana Comprehensive Audited Financial Report dated as of June 30, 2013. Largest Property Taxpayers Principal property owners in Fiscal Year 2013 amounted 5.00% of the total assessed value in the City. The table below shows the top 10 property taxpayers in the City. CITY OF SANTA ANA Principal Property Tax Payers Fiscal Year 2013 Percentage of (0 Presented in order of highest to lowest estimated property tax revenue paid to the City and dissolved Redevelopment Agency. Source: City of Santa Ana Comprehensive Audited Financial Report dated as of June 30, 2013. 80A -190 1M Total City Taxable Taxable Principal Property Tax PaverM Assessed Value Ranh Assessed Value Main Place Shoppingtown $ 222,707,045 1 1.10% Essex Skyline Holdings RP 131,151,146 2 0.65 First American Title 122,561,371 3 0.61 Realty Associates Fund 104,493,653 4 0.52 AG /LPC Griffin Towers LP 92,351,390 5 0.46 Freedom Newspapers Inc 81,214,095 6 0.40 Lapco Industrial Parks 67,477,890 7 0.33 Bel Santa Ana LLC 63,418,500 8 0.31 Prime SCRC LP 62,799,666 9 0.31 Birtcher Anderson Investors 61,867,180 10 0.31 TOTAL $1,010,041,936 5.00% (0 Presented in order of highest to lowest estimated property tax revenue paid to the City and dissolved Redevelopment Agency. Source: City of Santa Ana Comprehensive Audited Financial Report dated as of June 30, 2013. 80A -190 1M Commercial Activity The following table sets forth information regarding taxable sales in the City for Calendar Years 2005 through 2013. "' Miscellaneous category includes health & government, Source: City of Santa Ana Comprehensive Audited Financial Statements, 80A -191 B -5 CITY OF SANTA ANA Taxable Sales by Category Last Nine Fiscal Years (in thousands of dollars) Cateeory 2013 2012 2011 2010 2009 2008 2007 2006 2005 General Retail $ 34,999 $ 33,824 $ 32,722 $ 32,467 $ 35,097 $ 39,163 $ 40,425 $ 40,966 $ 39,059 Business to Business 27,917 27,003 27,500 28,838 35,293 37,484 40,034 38,206 38,719 Transportation 36,590 34,379 31,641 28,414 32,835 36,254 36,901 35,862 34,188 Food Products 23,428 22,040 20,797 20,283 21,654 22,867 22,402 21,875 20,967 Construction 16,171 15,005 14,239 14,305 17,661 20,820 21,621 20,147 18,342 Miscellaneous(l) 1,605 1,510 1,428 1,548 1,997 1,735 1,703 1,655 1,059 Total $140,708 $133,762 $128,327 $125,855 $144,536 $158,323 $163,086 $158,711 $152,334 "' Miscellaneous category includes health & government, Source: City of Santa Ana Comprehensive Audited Financial Statements, 80A -191 B -5 APPENDIX C FORM OF FINAL OPINION OF BOND COUNSEL [Closing Date] Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA 92702 Re: $ Santa Ana Financing Authority Water Revenue Refunding Bonds, SEries 2014 Ladies and Gentlemen: We have reviewed the Constitution and laws of the State of California and certain proceedings taken by the Santa Ana Financing Authority (the "Authority ") in connection with the issuance by the Authority of the $ ` Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (the "Bonds "), pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Law ") and pursuant to an Indenture, dated as of , 2014 (the "Indenture "), by and between The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), and the Authority. The proceeds of the Bonds have been applied by the Authority to refinance outstanding bonds secured by payments relating to the Water System of the City of Santa Ana (the "City ") and to finance improvements to the Water System of the City. The Authority and the City have entered into a Master Installment Purchase Agreement, dated as of , 2014, (the "Master Installment Agreement ") as supplemented by that First Supplement to Master Installment Purchase Agreement, dated as of 2014 (the "First Supplement," and together with the Master Installment Agreement, the "Installment Agreement "), whereby the City will purchase the Authority certain City facilities and property (the "Facilities ") and the City will make Installment Payments for the Facilities to the Authority. Pursuant to the Indenture, the Installment Payments have been assigned by the Authority to the Trustee and will be used by the Trustee to pay the principal of and interest on the Bonds. We have examined the Indenture, the Master Installment Agreement and such certified proceedings and other documents and materials as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon the certified proceedings and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, that: 1. The Authority is a joint powers authority duly organized and validly existing under the laws of the State of California, with power to enter into the Indenture and the Installment Agreement, to perform the agreements on its part contained therein and to issue the Bonds; 2. The Bonds constitute the valid and legally binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture; 3. The Indenture and the Installment Agreement have been duly approved by the Authority and constitute the valid and legally binding obligations of the Authority enforceable against the Authority in accordance with their respective terms; Preliminary, subject to change. 80A -192 C -1 4. The Indenture establishes a lien on and pledge of the Revenues (as such term is defined in the Indenture) which consist of Installment Payments and other funds pledged thereby for the security of the Bonds, in accordance with the terms of the Indenture; Interest on the Bonds is exempt from California personal income taxation. 6. The Internal Revenue Code of 1986, as amended (the "Code "), sets forth certain investment, rebate and related requirements which must be met subsequent to the delivery of the Bonds for the interest received by the owners of the Bonds to be and remain excluded from gross income for purposes of federal income taxation. Noncompliance with such requirements could cause the interest on the Bonds to be subject to federal income taxation retroactive to the date of delivery of the Bonds. Pursuant to the Indenture the Authority has covenanted to comply with the requirements of the Code. Assuming compliance with the aforementioned covenant, we are of the opinion that, under existing statutes, regulations, rulings and court decisions, the interest on the Bonds is excluded from gross income for purposes of federal income taxation. Interest on the Bonds is not a specific preference item for purposes of the alternative minimum tax provisions of the Code. We are further of the opinion that interest on the Bonds received by corporations will be included in corporate adjusted current earnings, a portion of which may increase the alternative minimum taxable income of such corporations. Although the interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds, or any portion thereof, may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend on the recipient's particular tax status or other items of income or deduction. We express no opinion regarding any such consequences. Our opinions, expressed herein, may be affected by action taken (or not taken) on events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or occur. The rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture may be subject to bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and their enforcement may be subject to the exercise of judicial discretion in accordance with general principles of equity. Respectfully submitted, 80A -193 C -z APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT 80A -194 D -1 APPENDIX E BOOK ENTRY PROVISIONS The description that follows of the procedures and recordkeeping with respect to beneficial ownership interests in the Bonds, payment of principal of, premium, if any, and interest on the Bonds to Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in the Bonds, and other related transactions by and between DTC, Participants and Beneficial Owners, is based on information furnished by DTC which the Successor Agency believes to be reliable, but the Successor Agency does not take responsibility for the completeness or accuracy thereof. The Successor Agency cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners either (a) payments of principal, premium, if any, and interest with respect to the Bonds or (b) certificates representing ownership interests in or other confirmation of ownership interests in the Bonds, or that they will so do on a timely basis or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Official Statement. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. The Depository Trust Company ( "DTC "), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered bond will be issued for each maturity (and each individual yield in the case of bifurcated maturities) of the Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited- purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). DTC has a Standard & Poor's rating of AA +. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtce.com; provided that nothing contained in such website is incorporated into this Official Statement. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Series 2013 Bond ( "Beneficial Owner ") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book - entry system for the Bonds is discontinued. 80A -195 E -1 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Indenture. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit will agree to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Successor Agency as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Successor Agency or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Successor Agency, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Successor Agency or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. The Successor Agency may decide to discontinue use of the system of book -entry-only transfers through DTC (or a successor securities depository). hi that event, bond certificates will be printed and delivered to DTC. NEITHER THE SUCCESSOR AGENCY NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF BONDS FOR REDEMPTION. DTC (or a successor securities depository) may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Successor Agency. The Successor Agency, in its sole discretion and without the consent of any other person, may terminate the services of DTC (or a successor securities depository) FTV'�N ®rbe Bonds. The Successor Agency undertakes no E -2 obligation to investigate matters that would enable the Successor Agency to make such a determination. In the event that the book -entry system is discontinued as described above, the requirements of the Indenture will apply. THE SUCCESSOR AGENCY AND THE UNDERWRITER CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, THE PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS OF PRINCIPAL, INTEREST OR PREMIUM, IF ANY, WITH RESPECT TO THE BONDS PAID TO DTC OR ITS NOMINEE AS THE REGISTERED OWNER, OR WILL DISTRIBUTE ANY REDEMPTION NOTICES OR OTHER NOTICES, TO THE BENEFICIAL OWNERS, OR THAT THEY WILL DO SO ON A TIMELY BASIS OR WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE SUCCESSOR AGENCY AND THE UNDERWRITER ARE NOT RESPONSIBLE OR LIABLE FOR THE FAILURE OF DTC OR ANY PARTICIPANT TO MAKE ANY PAYMENT OR GIVE ANY NOTICE TO A BENEFICIAL OWNER WITH RESPECT TO THE BONDS OR AN ERROR OR DELAY RELATING THERETO. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Successor Agency deems reliable, but the Successor Agency takes no responsibility for the accuracy thereof. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered as described in the Indenture. The Successor Agency may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bonds will be printed and delivered as described in the Indenture and payment of interest to each Owner who owns of record $1,000,000 or more in aggregate principal amount of Bonds may be made to such Owner by wire transfer to such wire address within the United States that such Owner may request in writing for all Interest Payment Dates following the 15th day after the Trustee's receipt of such request. 80A -197 E -3 EXHIBIT 6 Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Bond Purchase Agreement. .. Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) PURCHASE CONTRACT Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, California 92702 City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92702 Ladies and Gentlemen: 12014 Stifel, Nicolaus & Company, Incorporated (the "Underwriter "), offers to enter into this Purchase Contract (this "Purchase Contract ") with the City of Santa Ana (the "City ") and the Santa Ana Financing Authority (the "Authority ") with regard to the Bonds described below, which Purchase Contract, upon the acceptance hereof by the City and the Authority, will be binding upon the Authority, the City, and the Underwriter. This offer is made subject to the written acceptance of this Purchase Contract by the Authority and the City and the delivery of such acceptance to the Underwriter at or prior to 11:59 p.m., Pacific time, on the date hereof, and, if it is not so accepted, such offer may be withdrawn by the Underwriter upon written notice to the City and the Authority by the Underwriter at any time before its acceptance. The Authority and the City acknowledge and agree that: (i) the purchase and sale of the Bonds (as defined below) pursuant to this Purchase Contract is an arm's - length commercial transaction among the Authority, the City, and the Underwriter; (ii) in connection with such transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the Authority or the City; (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the Authority or the City with respect to: (A) the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the Authority or the City on other matters), or (B) any other obligation to the Authority or the City except the obligations expressly set forth in this Purchase Contract; and (iv) each of the Authority and the City has consulted with its own legal and financial advisor to the extent it deemed appropriate in connection with the offering of the Bonds. 1. Upon the terms and conditions and upon the basis of the representations, warranties, and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from the Authority for reoffering to the public, and the Authority hereby agrees to sell to the 46331186.2 80A1199 Underwriter for such purpose, all (but not less than all) of the $ aggregate principal amount of the Authority's Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Bonds "). The purchase price of the Bonds shall be $ (representing the par amount of the Bonds, [plus /less original issue premium /discount of $ ], less an Underwriter's discount of $ ). The Preliminary Official Statement with respect to the Bonds, dated 2014 (the "Preliminary Official Statement "), as amended to conform to the terms of this Purchase Contract, and dated the date hereof, and with such changes and amendments as are mutually agreed to by the Authority, the City, and the Underwriter, including the cover page, the appendices, and all information incorporated therein by reference, is herein collectively referred to as the "Official Statement." The Authority represents that it has deemed the Preliminary Official Statement to be final as of its date, except for either revision or addition of the offering price(s), yield(s) to maturity, selling compensation, aggregate denominational amount and maturity value, denominational amount and maturity value per maturity, delivery date, rating(s), and other terms of the Bonds that depend upon the foregoing as provided in and pursuant to Rule 15c2 -12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule "), by delivering a certificate to the Underwriter substantially in the form of Exhibit B attached hereto. 2. The Bonds shall mature on the dates and in the amounts, and will bear interest at the rates, set forth in Exhibit A hereto and as further described in the Official Statement and shall be issued under and pursuant to the Indenture, dated as of 1, 2014 (the "Indenture "), by and between the Authority and The Bank of New York Mellon Trust Company, N.A. (the "Trustee "). Capitalized terms used herein without definition shall have the meanings given to such terms in the Indenture or the Master Installment Purchase Agreement, dated as of 1, 2014 (the "Master Installment Purchase Agreement "), as supplemented by the First Supplement to Master Installment Purchase Agreement, dated as of 1, 2014 (collectively, the "Installment Purchase Agreement "), by and between the Authority and the City. 3. The Underwriter shall make a bona fide public offering of all the Bonds at not in excess of the respective initial public offering prices to be set forth on the cover page of the Official Statement. The Underwriter reserves the right to change such initial offering prices as the Underwriter shall deem necessary in connection with the marketing of the Bonds and to offer and sell the Bonds to certain dealers (including dealers depositing such bonds into investment trusts) and others at prices lower than the initial offering prices set forth on the cover page of the Official Statement. The Underwriter also reserves the right to (i) overallot or effect transactions that stabilize or maintain the market prices of the Bonds at levels above those which might otherwise prevail in the open market and (ii) discontinue such stabilizing, if commenced, at any time. "Public offering" shall include an offering to a representative number of institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. 4. The Authority and the City hereby authorize the use by the Underwriter of (i) the Indenture, (ii) the Installment Purchase Agreement, (iii) the Continuing Disclosure Certificate, dated as of the Closing Date (the "Continuing Disclosure Certificate "), executed by the City 46331186.2 80A2200 and agreed and accepted by as dissemination agent (the "Dissemination Agent"), (iv) the Escrow Agreement, dated as of 1, 2014 (the "Escrow Agreement "), by and among the Authority, the City and The Bank of New York Mellon Trust Company, N.A., as escrow agent (the "Escrow Agent "), and (v) the Official Statement, and any supplements or amendments thereto, and the information contained in each of such documents, in connection with the public offering and sale of the Bonds. The Authority will deliver to the Underwriter, within seven (7) business days after the date of this Purchase Contract and in sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, copies of the Official Statement in final form (including all documents incorporated by reference therein) and any amendment or supplement thereto in such quantities as the Underwriter may reasonably request in order to comply with the obligations of the Underwriter pursuant to the Rule and the rules of the Municipal Securities Rulemaking Board. As soon as practicable following receipt thereof from the Authority, the Underwriter shall deliver the Official Statement to the Municipal Securities Rulemaking Board. 5. At 8:00 a.m., Pacific Standard Time, on 2014, or at such other time or on such other business day as shall have been mutually agreed upon by the Authority and the Underwriter (the "Closing Date "), the Authority will cause the Trustee to authenticate and deliver to the Underwriter at the office of The Depository Trust Company ( "DTC ") in New York, New York, or at such other place as the Authority and the Underwriter may mutually agree upon, the Bonds in folly- registered book -entry form, duly executed and registered in the name of Cede & Co., as nominee of DTC. Subject to the terms and conditions hereof, the Underwriter will accept such delivery and pay the purchase price of the Bonds by wire transfer payable in immediately available funds to or upon the order of the Authority at such place in Riverside, California, or New York, New York, as shall have been mutually agreed upon by the Authority and the Underwriter. Such delivery of and payment for the Bonds is referred to herein as the "Closing." The Bonds shall be made available for inspection by DTC at least one business day before the Closing. 6. The Authority represents, warrants, and covenants to the Underwriter that: (A) The Authority is a joint powers authority under Article 1 of Chapter 5 of Division 7 of Title 1 of the California Government Code duly organized and validly existing under and by virtue of the Constitution and the laws of the State of California (the "State "). (B) The Authority has the legal right and power to issue and deliver the Bonds and to execute and deliver, and to perform its obligations under, the Indenture, the Installment Purchase Agreement, the Escrow Agreement and this Purchase Contract (collectively, the "Authority Documents "). The Authority has duly authorized the issuance and delivery of the Bonds and the execution and delivery of, and performance of its obligations under, the Authority Documents and, as of the date hereof, such authorizations are in full force and effect and have not been amended, modified, or rescinded. When executed and delivered by the respective parties thereto, the Authority Documents will constitute legal, valid, and binding obligations of the Authority in 46331186.2 80A-3201 accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws and the application of equitable principles relating to or affecting creditors' rights generally. The Authority has complied, and will at the Closing be in compliance in all respects, with its obligations under the Authority Documents. (C) The Bonds are special limited obligations of the Authority and are payable, as to principal, premium (if any), and interest with respect thereto, from the Installment Payments (as defined in the Installment Purchase Agreement) made under the Installment Purchase Agreement. (D) The Bonds will be issued in accordance with the Indenture and will conform in all material respects to the descriptions thereof contained in the Official Statement. The Indenture creates a valid pledge of, first lien upon, and security interest in, the pledged Installment Payments. (E) The information in the Official Statement (excluding any information with respect to DTC and the book -entry only system, [the Bond Insurer (as hereinafter defined), the Bond Insurance Policy (as hereinafter defined), and the Reserve Policy (as hereinafter defined)]) is true and correct in all material respects, and the information in the Official Statement does not contain any misstatement of any material fact and does not omit any statement necessary to make the statements, in the light of the circumstances in which such statements were made, not misleading. (F) The Authority covenants with the Underwriter that for twenty -five days after the Closing Date (the "Delivery Period "), if any event occurs that might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Authority shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will cooperate with the Underwriter and the City in the preparation of an amendment or supplement to the Official Statement, at the expense of the Authority and the City, in a form and in a manner approved by the Underwriter. (G) The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter. The Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale, or distribution of the Bonds. (H) If the Official Statement is supplemented or amended, the Official Statement, as so supplemented or amended, as of the date of such supplement or amendment, will not contain any untrue statement of a material fact or omit to state a 46331186.2 80A4202 material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (I) The Authority is not in breach of or in default under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, consent, or other agreement to which the Authority is a party, and no event has occurred and is continuing that, with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any of the foregoing. (J) The authorization, execution, and delivery by the Authority of the Authority Documents, and compliance by the Authority with the provisions thereof, do not and will not conflict with or constitute a breach of or default by the Authority under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, consent, or other agreement to which it is bound or by which its properties may be affected. (K) No authorization, consent, or approval of, or filing or registration with, any Govermmental Authority (as defined below) or court is, or under existing requirements of law will be, necessary for the valid execution and delivery of, or performance by the Authority of its obligations under, the Authority Documents, other than any authorization, consent, approval, filing, or registration as may be required under the Blue Sky or securities laws of any state in connection with the offering, sale, or issuance of the Bonds. All authorizations, consents, or approvals of, or filings or registrations with, any Governmental Authority or court necessary for the valid issuance of, and performance by the Authority of its obligations under, the Bonds will have been duly obtained or made prior to the issuance of the Bonds (and disclosed to the Underwriter). As used herein, the term "Governmental Authority" refers to any legislative body or governmental official, department, commission, board, bureau, agency, instrumentality, body, or public benefit corporation. (L) The Authority shall furnish such information, execute such instruments, and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and shall use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the Authority shall not be required to execute a general consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction. (M) There is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public board or body, pending or, to the best knowledge of the Authority, threatened (i) in any way questioning the existence of the Authority or the titles of the officers of the Authority to their respective offices; 46331186.2 80A 5203 (ii) affecting, contesting, or seeking to prohibit, restrain, or enjoin the issuance of the Bonds or the execution or delivery of any of the Authority Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Installment Payments or the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby or any proceeding of the Authority taken with respect to any of the foregoing, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority and its authority to pledge the Installment Payments; (iii) that may result in any material adverse change relating to the Authority that will materially adversely affect the Authority's ability to apply the Installment Payments to pay the Bonds when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (N) Other than in the ordinary course of its business or as contemplated by the Official Statement, between the date of this Purchase Contract and the Closing Date the Authority will not, without the prior written consent of the Underwriter, offer or issue any certificates, bonds, notes, or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the Installment Payments. (0) Any certificate signed by any official or other representative of the Authority and delivered to the Underwriter pursuant to this Purchase Contract shall be deemed a representation and warranty by the Authority to the Underwriter as to the truth of the statements therein made. 7. The City represents, warrants, and covenants to the Underwriter that: (A) The City is a municipal corporation of the State duly organized and validly existing under and by virtue of the Constitution and laws of the State and has the legal right and power to execute, deliver, and perform its obligations under the Installment Purchase Agreement, the Escrow Agreement, the Continuing Disclosure Certificate, and this Purchase Contract (collectively, the "City Documents "). (B) The City has the legal right and power to execute and deliver, and to perform its obligations under, the City Documents. The City has duly authorized the execution and delivery of, and the performance of its obligations under, the City Documents and as of the date hereof such authorizations are in full force and effect and have not been amended, modified, or rescinded. When executed and delivered by the respective parties thereto, the City Documents will constitute legal, valid, and binding obligations of the City in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws and the application of equitable principles relating to or affecting creditors' rights 46331156.2 80A6204 generally. The City has complied, and will at the Closing be in compliance in all respects, with its obligations under the City Documents. (C) The Bonds will be paid from the Installment Payments pursuant to and as defined in the Installment Purchase Agreement, which payments are special limited obligations of the City and are payable from a pledge of and lien on Net System Revenues (as defined in the Installment Purchase Agreement), derived from revenues of the City's water system, and which payments have been duly and validly authorized pursuant to applicable law. (D) The information in the Official Statement (excluding any information with respect to DTC and the book -entry only system, [the Bond Insurer, the Bond Insurance Policy, and the Reserve Policy]) is true and correct in all material respects, and the information in the Official Statement does not contain any misstatement of any material fact and does not omit any statement necessary to make the statements, in the light of the circumstances in which such statements were made, not misleading. (B) To assist the Underwriter in complying with the Rule, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. (F) The City covenants with the Underwriter that, during the Delivery Period, if any event occurs that might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the City shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriter and the Authority in the preparation of an amendment or supplement to the Official Statement, at the expense of the Authority and the City, in a form and in a manner approved by the Underwriter. (G) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale, or distribution of the Bonds. (H) If the Official Statement is supplemented or amended, the Official Statement as so supplemented or amended, as of the date of such supplement or amendment, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 46331186.2 80A' -205 (I) The City is not in breach of or in default under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, consent, or other agreement to which the City is a party, and no event has occurred and is continuing that, with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any of the foregoing. (J) The authorization, execution, and delivery by the City of the City Documents, and compliance by the City with the provisions thereof, do not and will not conflict with or constitute a breach of or default by the City under any applicable constitutional provision, law, or administrative rule or regulation of the State or the United States, or any applicable judgment, decree, consent, or other agreement to which it is bound or by which its properties may be affected. (K) No authorization, consent, or approval of, or filing or registration with, any Governmental Authority or court is, or under existing requirements of law will be, necessary for the valid execution and delivery of, or performance by the City of its obligations under, the City Documents, other than any authorization, consent, approval, filing, or registration as may be required under the Blue Sky or securities laws of any state in connection with the offering, sale, or issuance of the Bonds. (L) The City will famish such information, execute such instruments, and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use their best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the City shall not be required to execute a general consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction. (M) There is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public board or body, pending or, to the best knowledge of the City, threatened (i) in any way questioning the existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting, or seeking to prohibit, restrain, or enjoin the issuance of the Bonds or the execution or delivery of any of the City Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Installment Payments or the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contemplated thereby or any proceeding of the City taken with respect to any of the foregoing, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the City and its authority to pledge the Net System Revenues; (iii) that may result in any material adverse change relating to the City that will materially adversely affect the City's ability to pay the Installment Payments when due; or (iv) contesting the completeness or 46331186.2 8W206 accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (N) Other than in the ordinary course of its business or as contemplated by the Official Statement or Installment Purchase Agreement, between the date of this Purchase Contract and the Closing Date the City will not, without the prior written consent of the Underwriter, offer or issue any certificates, bonds, notes, or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the Net System Revenues. (0) The financial statements of, and other financial information regarding, the City contained in the Official Statement fairly present the financial position and results of the operations of the City as of the dates and for the periods therein set forth, and, to the best of the City's knowledge, (i) the audited financial statements have been prepared in accordance with generally accepted accounting principles consistently applied, (ii) the unaudited financial statements have been prepared on a basis substantially consistent with the audited financial statements included in the Official Statement and reflect all adjustments necessary to that effect, and (iii) the other financial information has been determined on a basis substantially consistent with that of the City's audited financial statements included in the Official Statement. (P) Any certificate signed by any official or other representative of the City and delivered to the Underwriter pursuant to this Purchase Contract shall be deemed a representation and warranty by the City to the Underwriter as to the truth of the statements therein made. 8. The Underwriter has entered into this Purchase Contract in reliance upon the representations, warranties, and covenants of the Authority and the City contained herein and in the Authority Documents and the City Documents to which each of the Authority or the City, as applicable, is a party, and the performance by the Authority and the City of their respective obligations hereunder, both as of the date hereof and as of the Closing Date. The Underwriter's obligations under this Purchase Contract are and shall be subject to the following further conditions: (A) The representations and warranties of the Authority and the City contained herein shall be true, complete, and correct in all material respects on the date hereof and at and as of the Closing, as if made at and as of the Closing, and the statements made in all certificates and other documents delivered to the Underwriter at the Closing pursuant hereto shall be true, complete, and correct in all material respects at the Closing; the Authority and the City shall be in compliance with each of the agreements made by it in this Purchase Contract (unless such agreements are waived by the Underwriter); there shall not have occurred an adverse change in the financial position, results of operations, or financial condition of the City that materially adversely affects the ability of the City 463311862 80A-2207 to pay the Installment Payments when due or otherwise perform any of its obligations under the City Documents; and there shall not have occurred an adverse change in the financial position of the Authority that materially adversely affects the ability of the Authority to make payments of principal of and interest on the Bonds when due or otherwise perform any of its obligations under the Authority Documents. (B) At the time of the Closing, the Authority Documents and the City Documents shall be in full force and effect, and shall not have been amended, modified, or supplemented (except as may be agreed to in writing by the Underwriter); all actions that, in the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel ( "Bond Counsel'), shall be necessary in connection with the transactions contemplated hereby shall have been duly taken and shall be in full force and effect; and the City shall perform or shall have performed its obligations required under or specified in the City Documents to be performed at or prior to the Closing and the Authority shall perform or shall have performed its obligations required under or specified in the Authority Documents to be performed at or prior to the Closing. (C) At the time of the Closing, the Official Statement (as amended and supplemented) shall be true and correct in all material respects, and shall not omit any statement or information necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (D) Except as disclosed in the Official Statement or in a schedule delivered to the Underwriter at the Closing, no decision, ruling, or finding shall have been entered by any court or Governmental Authority since the date of this Purchase Contract (and not reversed on appeal or otherwise set aside) that has any of the effects described in Section 8(F) hereof. (E) (i) No default by the City or the Authority shall have occurred and be continuing in the payment of the principal of or premium, if any, or interest on any bond, note, or other evidence of indebtedness issued by the City or the Authority, respectively, and (ii) no bankruptcy, insolvency, or other similar proceeding in respect of the City or the Authority shall be pending or, to the knowledge of the City or the Authority, contemplated. (F) The Underwriter may terminate this Purchase Contract by written notification to the Authority and the City if at any time after the date hereof and prior to the Closing: (i) legislation shall have been enacted by the United States or the State or shall have been reported out of committee or be pending in committee, or a decision shall have been rendered by a court of the United States or the Tax Court of the United States, or a ruling shall have been made or a regulation, proposed regulation, or a temporary regulation shall have been published in the Federal Register or any other release or announcement shall have been made by the Treasury Department of the United States or the Internal Revenue Service, 46331186.2 80A1° 08 with respect to Federal or State taxation upon revenues or other income or payments of the general character to be derived by the City or upon interest received on obligations of the general character of the Bonds, which, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the City), materially adversely affects the market for the Bonds; or (ii) the United States shall have become engaged in hostilities that have resulted in a declaration of war or a national emergency or the President of the United States of America shall have committed the armed forces of the United States of America to combat so as to adversely affect the financial markets in the United States of America and that, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the City), materially adversely affects the market for the Bonds; or (iii) there shall have occurred a general suspension of trading on the New York Stock Exchange, or a general banking moratorium shall have been declared by Federal, California, or New York authorities having jurisdiction and being in force; or (iv) there shall have occurred an adverse change in the financial position, results of operations, or financial condition of the City that, in the reasonable opinion of the Underwriter (after consultation with, and receipt of advice from, the City), materially adversely affects the market for the Bonds; or (v) any legislation, ordinance, rule, or regulation shall be introduced in, or be enacted by, any governmental body, department, or agency of the State, or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered that, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or (vi) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation, or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering, or sale of obligations of the general character of the Bonds, or the issuance, offering, or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (vii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental 46331156.2 80A! -209 authority or by any national securities exchange, which restrictions materially adversely affect the ability of underwriters to trade obligations of the general character of the Bonds; or (viii) any rating of the Bonds shall have been downgraded, suspended, or withdrawn by a national rating service, which, in the Underwriter's reasonable opinion, materially adversely affects the marketability or market price of the Bonds; or (ix) the commencement of any action, suit, or proceeding described in Section 6(M) or 7(M) that, in the judgment of the Underwriter, materially adversely affects the market price of the Bonds; or (x) [any rating of the Bond Insurer shall have been downgraded, suspended, or withdrawn by a national rating service, which, in the Underwriter's reasonable opinion, materially adversely affects the marketability or market price of the Bonds;] or (xi) any event occurring, or information becoming known, that, in the reasonable judgment of the Underwriter, makes any statement or information contained in the Official Statement, as of its date, untrue in any material adverse respect, or has the effect that the Official Statement, as of its date, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (G) At or prior to the Closing, the Underwriter shall receive the following documents: (1) the opinion of Bond Counsel, dated the Closing Date, in substantially the form included in the Official Statement as Appendix C, addressed to the Authority (and accompanied by reliance letters to the Underwriter, the City, [the Bond Insurer], and the Trustee); (2) a supplemental opinion of Bond Counsel, in form and substance satisfactory to the Underwriter, dated the Closing Date, addressed to the Authority and the Underwriter, to the effect that: (i) the Purchase Contract has been duly authorized, executed, and delivered by the City and the Authority and, assuming due authorization, execution, and delivery by the Underwriter, such documents constitute the legal, valid, and binding agreement of the City and the Authority enforceable in accordance with its terms, subject to laws relating to bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought; 46331186,2 80A!�210 (ii) the Bonds are not subject to registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and (iii) the statements contained in the Official Statement under the captions "INTRODUCTION," "THE BONDS," "SECURITY FOR THE BONDS," "TAX MATTERS," "APPENDIX B — SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS," "APPENDIX C — FORM OF FINAL OPINION OF BOND COUNSEL," and "APPENDIX D — FORM OF CONTINUING DISCLOSURE CERTIFICATE," insofar as such statements purport to summarize certain provisions of the Indenture, the Installment Purchase Agreement, the Escrow Agreement, the Continuing Disclosure Certificate, the Bonds, and the opinion of Bond Counsel concerning certain federal tax matters relating to the Bonds, are accurate in all material respects; (3) an opinion of the City Attorney of the City, in form and substance satisfactory to the Underwriter, dated the Closing Date, addressed to the Authority, [the Bond Insurer], and the Underwriter, to the effect that: (i) the City is a municipal corporation and general law city duly organized and validly existing under and by virtue of the laws of the State; (ii) the City has full legal power and lawful authority to enter into the City Documents; (iii) the resolution of the City approving and authorizing the execution and delivery of the City Documents (the "City Resolution ") was duly adopted at a meeting of the City Council of the City that was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the City Resolution is in full force and effect and has not been modified, amended, or rescinded as of the Closing Date; (iv) the City Documents have been duly authorized, executed, and delivered by the City and, assuming due authorization, execution, and delivery by the other parties thereto, such documents constitute the legal, valid, and binding agreements of the City enforceable in accordance with their terms, subject to laws relating to bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought; (v) to the best knowledge of such counsel, the execution and delivery by the City of the City ,Documents, and compliance by the City with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under 46331186.2 80A1111 any law, administrative regulation, court decree, resolution, or agreement to which the City is subject to or by which it is bound; (vi) to the best knowledge of such counsel, the Official Statement (excluding therefrom financial statements and other statistical data included in the Official Statement, and any information with respect to DTC and the book -entry only system, [the Bond Insurer, the Bond Insurance Policy, and the Reserve Policy,] as to which no view need be expressed) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (vii) except as otherwise disclosed in the Official Statement, to the best knowledge of such counsel after reasonable investigation, there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public board or body, pending or, to the best knowledge of such counsel, threatened (a) in any way questioning the existence of the City or the titles of the officers of the City to their respective offices; (b) affecting, contesting, or seeking to prohibit, restrain, or enjoin the issuance of the Bonds or the execution or delivery of any of the City Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Installment Payments or the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the City Documents or the consummation of the transactions contemplated thereby or any proceeding of the City taken with respect to any of the foregoing, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the City and its authority to pledge the Net System Revenues; (c) that may result in any material adverse change relating to the City that will materially adversely affect the City's ability to pay the Installment Payments when due; or (d) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (viii) no authorization, approval, consent, or other order of the State or any other governmental authority or agency within the State having jurisdiction over the City is required for the valid authorization, execution, and delivery by the City of the City Documents; (4) an opinion of the City Attorney of the City, serving as General Counsel to the Authority, in form and substance satisfactory to the Underwriter, dated the Closing Date, addressed to the City, [the Bond Insurer], and the Underwriter, to the effect that: 46331156.2 80k- -'112 (i) the Authority is a joint powers authority under Article 1 of Chapter 5 of Division 7 of Title 1 of the California Government Code duly organized and validly existing under and by virtue of the Constitution and the laws of the State; (ii) the Authority has full legal power and lawful authority to enter into the Authority Documents; (iii) the resolution of the Authority approving and authorizing the execution and delivery of the Authority Documents and approving the Official Statement (the "Authority Resolution ") was duly adopted at a meeting of the governing board of the Authority that was called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Authority Resolution is in full force and effect and has not been modified, amended, or rescinded as of the Closing Date; (iv) the Authority Documents have been duly authorized, executed, and delivered by the Authority and, assuming due authorization, execution, and delivery by the other parties thereto, such documents constitute the legal, valid, and binding agreements of the Authority enforceable in accordance with their terms, subject to laws relating to bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought; (v) to the best knowledge of such counsel, the execution and delivery by the Authority of the Authority Documents, and compliance by the Authority with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under any law, administrative regulation, court decree, resolution, or agreement to which the Authority is subject to or by which it is bound; (vi) to the best knowledge of such counsel, the Official Statement (excluding therefrom financial statements and other statistical data included in the Official Statement, and any information with respect to DTC and the book -entry only system, [the Bond Insurer, the Bond Insurance Policy, and the Reserve Policy,] as to which no view need be expressed) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (vii) except as otherwise disclosed in the Official Statement, to the best knowledge of such counsel after reasonable investigation, there is no action, suit, proceeding, inquiry, or investigation at law or in equity, before or by any court, regulatory agency, or public board or body, pending or, to the best knowledge of such counsel, threatened (a) in any way questioning the existence of the Authority or the titles of the officers of the Authority to their respective offices, 46331186.2 80 13 (b) affecting, contesting, or seeking to prohibit, restrain, or enjoin the issuance of the Bonds or the execution or delivery of any of the Authority Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Installment Payments or the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Bonds or the Authority Documents or the consummation of the transactions contemplated thereby or any proceeding of the Authority taken with respect to any of the foregoing, or contesting the exclusion of the interest on the Bonds from taxation or contesting the powers of the Authority and its authority to make the pledges set forth in the Indenture, (c) that may result in any material adverse change relating to the Authority that will materially adversely affect the Authority's ability to apply the Installment Payments to pay the Bonds when due, or (d) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (viii) no authorization, approval, consent, or other order of the State or any other governmental authority or agency within the State having jurisdiction over the Authority is required for the valid authorization, execution, and delivery by the Authority of the Authority Documents; (5) a letter from Best Best & Krieger LLP, Riverside, California, disclosure counsel to the Authority ( "Disclosure Counsel "), dated the Closing Date, addressed to the Underwriter and the Authority, to the effect that, based upon its participation in the preparation of the Official Statement as counsel to the Authority and without having undertaken to determine independently the fairness, accuracy, or completeness of the statements contained in the Official Statement, such counsel has no reason to believe that, as of the date of the Closing, the Official Statement (excluding therefrom the reports, financial and statistical data and forecasts therein, the information with respect to DTC and the book -entry system, [the Bond Insurer, the Bond Insurance Policy, the Reserve Policy,] and the information included in the Appendices thereto, as to which no belief need be expressed) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (6) a certificate of the City, in form and substance satisfactory to the Underwriter, dated the Closing Date, to the effect that; (i) the representations and warranties of the City contained in this Purchase Contract are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; and 46331186.2 80A1114 (ii) there has been no material adverse change in the financial condition or results of operations of the City from the date of the Official Statement to the Closing Date; (7) a certificate of the Authority, in form and substance satisfactory to the Underwriter, dated the Closing Date, to the effect that; (i) the representations and warranties of the Authority contained in this Purchase Contract are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; and (ii) there has been no material adverse change in the financial condition or results of operations of the Authority from the date of the Official Statement to the Closing Date; (8) a certificate, dated the date of the Preliminary Official Statement, from the Authority addressed to the Underwriter, in the form attached hereto as Exhibit B; (9) an opinion of counsel to the Trustee, dated the Closing Date, addressed to the Underwriter, the Authority, and the City, to the effect that; (i) the Trustee is a national banking association and is validly existing, duly qualified to do business and in good standing under the laws of each jurisdiction in which the performance of its duties under the Indenture would require such qualification and has the requisite power and authority to execute, deliver and perform its obligations under the Indenture; (ii) the Trustee is duly eligible and qualified to act as Trustee under the Indenture; (iii) the Trustee has all requisite power, authority, and legal right to execute and deliver the Indenture and to perform its obligations under the Indenture, and has taken all necessary corporate action to authorize the execution and delivery of and the performance of its obligations under the Indenture; (iv) the Trustee has duly executed and delivered the Indenture. Assuming the due authorization, execution, and delivery thereof by the other parties thereto, the Indenture is the legal, valid, and binding agreement of the Trustee enforceable against the Trustee in accordance with its terms, except to the extent enforceability thereof may be subject to (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other similar laws affecting creditors' rights and remedies heretofore or hereafter enacted, and (B) the application of equitable principles and the exercise of judicial discretion in appropriate cases; (v) the Bonds have been duly authenticated by the Trustee; 46331186,2 80A1115 (vi) the execution, delivery; and performance of the Indenture by the Trustee and the consummation of the transactions contemplated thereby do not and will not (a) to the knowledge of such counsel, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, or other agreement or instrument to which the Trustee is a party or by which the Trustee is bound or to which any of the property or assets of the Trustee or any of its subsidiaries is subject, (b) result in any violation of the provisions of the charter, articles of association, by -laws, or applicable resolutions of the Trustee, or (c) to the knowledge of such counsel, result in any violation of any statute or any order, rule, or regulation of any court or government agency or body having jurisdiction over the Trustee or any of its properties or assets; and (vii) to the knowledge of such counsel, there are no actions, proceedings, or investigations pending or threatened against the Trustee before any court, administrative agency or tribunal (a) asserting the invalidity of the Indenture, (b) seeking to prevent the consummation of any of the transactions contemplated thereby, or (c) that might materially and adversely affect the performance by the Trustee of its obligations under, or the validity or enforceability of the Indenture; (10) a certificate, dated the Closing Date, signed by a duly authorized officer of the Trustee, to the effect that: (i) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the necessary power to enter into, accept, and administer the trusts created under the Indenture and to authenticate the Bonds; (ii) the Indenture has been duly authorized, executed, and delivered by a duly authorized officer of the Trustee, and the execution, delivery, and performance of the Indenture have been duly authorized by all necessary action of the Trustee; (iii) the Indenture constitutes the legal, valid, and binding obligation of the Trustee enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought; (iv) the Bonds have been duly authenticated by a duly authorized officer of the Trustee; (v) no consent, approval, authorization, or other action by any governmental or regulatory authority having jurisdiction over the Trustee that has not been obtained is or will be required for the execution and delivery of the 46331186.2 80A-'116 Indenture or the performance by the Trustee of its duties and obligations under the Indenture; (vi) the execution and delivery by the Trustee of the Indenture and compliance with the terms thereof will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution, or any other agreement or instrument to which the Trustee is a party or by which it is bound, or any law or any rule, regulation, order, or decree of any court or governmental agency or body having jurisdiction over the Trustee or any of its activities or properties (except that no representation, warranty, or agreement need be made with respect to any federal or State securities or blue sky laws or regulations); (vii) the Trustee's action in executing and delivering the Indenture will not contravene the articles or bylaws of the Trustee and is in full compliance with, and does not conflict with, any applicable law or governmental regulation currently in effect, and such action does not conflict with or violate any contract to which the Trustee is a party or any administrative or judicial decision by which the Trustee is bound; and (viii) there is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or governmental agency, public board, or body that has been served on the Trustee, or to the best knowledge of the Trustee, threatened against the Trustee which in the reasonable judgment of the Trustee would affect the existence of the Trustee or in any way contesting or affecting the validity or enforceability of the Indenture or contesting the powers of the Trustee or its authority to enter into and perform its obligations thereunder; (11) a certificate, dated the Closing Date, signed by a duly authorized officer of the Escrow Agent, to the effect that: (i) the Escrow Agent is a national banking association organized and existing under and by virtue of the laws of the United States of America, having the necessary power to enter into, accept, and administer the funds created under the Escrow Agreement; (ii) the Escrow Agreement have been duly authorized, executed, and delivered by a duly authorized officer of the Escrow Agent, and the execution, delivery, and performance of the Escrow Agreement has been duly authorized by all necessary action of the Escrow Agent; (iii) the Escrow Agreement constitutes the legal, valid, and binding obligation of the Escrow Agent enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought; 46331186.2 80A19217 (iv) no consent, approval, authorization, or other action by any governmental or regulatory authority having jurisdiction over the Escrow Agent that has not been obtained is or will be required for the execution and delivery of the Escrow Agreement or the performance by the Escrow Agent of its duties and obligations under the Escrow Agreement; (v) the execution and delivery by the Escrow Agent of the Escrow Agreement and compliance with the terms thereof will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution, or any other agreement or instrument to which the Escrow Agent is a party or by which it is bound, or any law or any rule, regulation, order, or decree of any court or governmental agency or body having jurisdiction over the Escrow Agent or any of its activities or properties (except that no representation, warranty, or agreement need be made with respect to any federal or State securities or blue sky laws or regulations); (vi) the Escrow Agent's action in executing and delivering the Escrow Agreement will not contravene the articles or bylaws of the Escrow Agent and is in full compliance with, and does not conflict with, any applicable law or governmental regulation currently in effect, and such action does not conflict with or violate any contract to which the Escrow Agent is a party or any administrative or judicial decision by which the Escrow Agent is bound; and (vii) there is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or governmental agency, public board, or body that has been served on the Escrow Agent, or to the best knowledge of the Escrow Agent, threatened against the Escrow Agent which in the reasonable judgment of the Escrow Agent would affect the existence of the Escrow Agent or in any way contesting or affecting the validity or enforceability of the Escrow Agreement or contesting the powers of the Escrow Agent or its authority to enter into and perform its obligations thereunder; (12) a certificate, dated the Closing Date, signed by a duly authorized officer of the Dissemination Agent, to the effect that: (i) the Dissemination Agent is a corporation validly existing and in good standing under the laws of the State of California and has fall corporate power and authority to enter into and perform its obligations under the Continuing Disclosure Certificate; (ii) the Continuing Disclosure Certificate has been duly authorized, executed, and delivered by a duly authorized officer of the Dissemination Agent, and the execution, delivery, and performance of the Continuing Disclosure Certificate has been duly authorized by all necessary action of the Agent; 46331186.2 80A20218 (iii) the Continuing Disclosure Certificate constitutes the legal, valid, and binding obligation of the Dissemination Agent enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, or other laws affecting the enforcement of creditors' rights generally and by the application of equitable principles, if equitable remedies are sought; (iv) no consent, approval, authorization, or other action by any governmental or regulatory authority having jurisdiction over the Dissemination Agent that has not been obtained is or will be required for the execution and delivery of the Continuing Disclosure Certificate or the performance by the Dissemination Agent of its duties and obligations under the Continuing Disclosure Certificate; (v) the execution and delivery by the Dissemination Agent of the Continuing Disclosure Certificate and compliance with the terms thereof will not conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution, or any other agreement or instrument to which the Dissemination Agent is a party or by which it is bound, or any law or any rule, regulation, order, or decree of any court or governmental agency or body having jurisdiction over the Dissemination Agent or any of its activities or properties (except that no representation, warranty, or agreement need be made with respect to any federal or State securities or blue sky laws or regulations); (vi) the Dissemination Agent's action in executing and delivering the Continuing Disclosure Certificate will not contravene the articles or bylaws of the Dissemination Agent and is in full compliance with, and does not conflict with, any applicable law or governmental regulation currently in effect, and such action does not conflict with or violate any contract to which the Dissemination Agent is a party or any administrative or judicial decision by which the Dissemination Agent is bound; and (vii) there is no action, suit, proceeding, or investigation, at law or in equity, before or by any court or governmental agency, public board, or body that has been served on the Dissemination Agent, or to the best knowledge of the Dissemination Agent, threatened against the Dissemination Agent which in the reasonable judgment of the Dissemination Agent would affect the existence of the Dissemination Agent or in any way contesting or affecting the validity or enforceability of the Continuing Disclosure Certificate or contesting the powers of the Dissemination Agent or its authority to enter into and perform its obligations thereunder; (13) certified copies of the City Resolution, the Authority Resolution, an incumbency resolution of the Trustee, and an incumbency resolution of the Escrow Agent; 46331186.2 80AI- 219 (14) copies each of the Authority Documents, the City Documents, and the Official Statement, duly executed and delivered by the respective parties thereto; (15) a tax certificate of the Authority and the City, in form satisfactory to Bond Counsel, signed by an appropriate officer of each of the Authority and the City; (16) [evidence satisfactory to the Underwriter that the Bonds shall have received a municipal bond insurance policy (the "Bond Insurance Policy ") by (the "Bond Insurer "), that unconditionally guarantees the timely payments of all debt service on the Bonds]; (17) [evidence satisfactory to the Underwriter that a municipal bond debt service reserve insurance policy guaranteeing certain payments into the Reserve Fund with respect to the Bonds as provided therein and subject to the limitations set forth therein (the "Reserve Policy ") shall have been issued by the Bond Insurer]; (18) [one or more opinions of counsel to the Bond Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel, with respect to, among other matters, the Bond Insurance Policy and the Reserve Policy]; (19) [one or more closing certificates of the Bond Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel, with respect to, among other matters, the Bond Insurance Policy and the Reserve Policy]; (20) [a disclosure, no- default, and tax certificate of the Bond Insurer, in form and substance satisfactory to the Underwriter and Bond Counsel]; (21) [evidence that rating on the Bonds of " " by Standard & Poor's Ratings Service as a result of the Bond Insurance Policy provided by the Bond Insurer is in full force and effect on the Closing Date]; (22) evidence that the underlying ratings on the Bonds of and " " by Standard & Poor's Ratings Service and Moody's Investors Service, respectively, is in full force and effect on the Closing Date; (23) copies of the statements with respect to the sale of the Bonds required to be delivered to the California Debt and Investment Advisory Commission pursuant to Sections 8855 and 53583 of the California Government Code; (24) evidence that the federal tax information form 8038 -G has been prepared by Bond Counsel for filing; and (25) such additional legal opinions, certificates, proceedings, instruments, and other documents as the Underwriter or Bond Counsel may reasonably request to evidence compliance by the City and the Authority with legal requirements, the accuracy, as of the time of Closing, of the Authority and the City's representations herein contained, and the due performance or satisfaction by the City and the Authority at or 46331186.2 80AZ.220 prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City and the Authority. If the City or the Authority shall be unable to satisfy the conditions to the Underwriter's obligations contained in this Purchase Contract or if the Underwriter's obligations shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and none of the City, the Authority, or the Underwriter shall have any further obligation hereunder. 9. The performance by each of the Authority and the City of its obligations is conditioned upon (i) the performance by the Underwriter of its obligations hereunder and (ii) receipt by the Authority, the City, and the Underwriter of opinions and certificates being delivered at the Closing by persons and entities other than Authority and the City. 10. No expenses and costs of the City or the Authority incident to the performance of the Authority's or the City's obligations in connection with the authorization, issuance, and sale of the Bonds to the Underwriter, such as the costs of preparation (including word processing, printing, and reproduction), distribution and delivery of the Preliminary Official Statement, the Official Statement, and this Purchase Contract, in reasonable quantities, fees of rating agencies, fees and expenses of any financial advisor to the City, and fees and expenses of Bond Counsel or Disclosure Counsel for the City, shall be paid by the Underwriter. Except as indicated above, all out -of- pocket expenses of the Underwriter, including the California Debt and Investment Advisory Commission fee, traveling, and other expenses and the fees and expenses of the Underwriter, including Underwriter's Counsel, shall be paid by the Underwriter. 11. Any notice or other communication to be given to the City under this Purchase Contract may be given by delivering the same in writing to the City of Santa Ana, 20 Civic Center Plaza, Santa Ana, California 92702, Attention: Treasurer, or to such other person as the Treasurer may designate in writing; any notice or other communication to be given to the Authority under this Purchase Contract may be given by delivering the same in writing to the Santa Ana Financing Authority, 20 Civic Center Plaza, Santa Ana, California 92702, Attention: Executive Director, or to such other person as the Executive Director may designate in writing; and any notice or other communication to be given to the Underwriter under this Purchase Contract may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 37th Floor, San Francisco, California 94104, Attention: Jim Cervantes. The approval of the Underwriter when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing signed by the Underwriter and delivered to the Authority. 12. For all purposes of this Purchase Contract, a default shall not be deemed to be continuing if it has been cured, waived, or otherwise remedied. This Purchase Contract shall be governed by and construed in accordance with the laws of the State applicable to contracts made and performed within the State. 46331186.2 80A2'121 13. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [Remainder of Page Intentionally Left Blank.] 46331186.2 80k -'222 14. This Purchase Contract when accepted by the Authority and the City in writing shall constitute the entire agreement among the City, the Authority, and the Underwriter and is made solely for the benefit of the City, the Authority, and the Underwriter (including the successors or assigns of the Underwriter). No other person shall acquire or have any right hereunder or by virtue hereof. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED Name: Title: The foregoing is hereby agreed to and accepted as of the date first above written: SANTA ANA FINANCING AUTHORITY By: Name: Title: Time of Execution: CITY OF SANTA ANA By: Name: Title: Time of Execution: 46331186.2 80k -'223 EXHIBIT A Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) Maturity Date (September 1) Total Principal Amount Interest Rate Price Yield 46331186.2 80A =224 EXHIBIT B "DEEMED FINAL CERTIFICATE" FOR PRELIMINARY OFFICIAL STATEMENT 2014 Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 37th Floor San Francisco, California 94104 Re: Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) Ladies and Gentlemen: With respect to the proposed sale by the Santa Ana Financing Authority (the "Authority ") of its Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues) (the "Bonds "), the Authority has delivered to you a Preliminary Official Statement, dated the date hereof (the "Preliminary Official Statement'). The Authority, for purposes of compliance with Rule 15c2 -12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Rule "), deems the Preliminary Official Statement to be final as of its date, except for the omission of no more than the following information: the offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, dates and amounts of mandatory sinking fund payments, delivery dates, ratings, and identity of the purchasers and any other terms of the Bonds relating to such matters and any other information permitted to be omitted by the Rule. SANTA ANA FINANCING AUTHORITY By: _ Name: Title: 46331.186.2 804-425 EXHIBIT 7 Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Continuing Disclosure Agreement by City. 80A -226 SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BONDS, SERIES 2014 (PAYABLE SOLELY FROM INSTALLMENT PAYMENTS SECURED BY WATER SYSTEM NET REVENUES) CONTINUING DISCLOSURE AGREEMENT THIS CONTINUING DISCLOSURE AGREEMENT, dated as of August 1, 2014 (the "Disclosure Agreement") is executed and delivered by and among the City of Santa Ana (the "City ") and The Bank of New York Mellon Trust Company, N.A., as Dissemination Agent hereunder (the "Dissemination Agent') in connection with the issuance of the $ Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (the "Bonds "). The Bonds are being issued pursuant to an Indenture of Trust, dated as of August 1, 2014 (the "Indenture "), between the Santa Ana Financing Authority (the "Authority ") and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "). The City and the Dissemination Agent covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City for the benefit of the Owners of the Bonds and in order to assist the Participating Underwriters (as defined herein) in complying with S.E.C. Rule 15c2- 12(b)(5). Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Reports provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Disclosure Representative" shall mean the Finance Director or City Manager of the City, or his or her designee, or such other officer or employee as the City shall designate in writing to the Dissemination Agent from time to time. "Dissemination Agent" shall mean The Bank of New York Mellon Trust Company, N.A., acting in its capacity as Dissemination Agent, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation. "Fiscal Year" shall mean the twelve month period beginning on July 1 of each year and ending on June 30 of the following year. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "MSRB" shall mean the Municipal Securities Rulemaking Board and any successor entity designated under the Rule as the repository for filings made pursuant to the Rule. "Participating Underwriters" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with the offering of the Bonds. 80A -227 "Repository" shall mean the MSRB. "Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than two hundred and seventy (270) days following the end of each Fiscal Year, commencing with the 2014/15 Fiscal Year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. Not later than fifteen (15) Business Days prior to said date, the City shall provide the Annual Report to the Dissemination Agent. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross - reference other information as provided in Section 4 of this Disclosure Agreement. The information contained or incorporated in each Annual Report shall be for the Fiscal Year which ended on the preceding June 30. The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certifications of the City and shall have no liability, duty or obligation whatsoever to review any such Annual Report. Further, the Dissemination Agent shall have no liability for the contents of any such annual report. (b) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the Repositories by the date specified in subsection (a), the Dissemination Agent shall send a notice to the MSRB, in substantially the form attached as Attachment A. (c) The Dissemination Agent shall: (i) determine each year prior to the Annual Report date the then - applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and (ii) provide notice to the Issuer that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided to the MSRB. Section 4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following: (a) Audited Financial Statements prepared in accordance with general accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. 55394,00011 \8807737.1 80A5228 (b) To the extent not contained in the audited financial statements filed pursuant to the preceding clause (a), the Annual Report shall contain information showing the following: (i) Summary of Operations (for such Fiscal Year only) (Table 1); (ii) Ten Largest Water Customers (for such Fiscal Year only) (Table 9); and (iii) Any changes in Water System rates and charges in such Fiscal Year. (c) In addition to any of the information expressly required to be provided under paragraphs (a) and (b) of this Section, the City shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. Any or all of the items listed above may be incorporated by reference from other documents, including official statements of debt issues of the City or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The City shall clearly identify each such other document so incorporated by reference. Section 5. Reporting of Significant Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds not later than ten business days after the occurrence of the event: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. 7. 8. 9. person. 55394.00011 \8807737.1 Tender offers; Defeasances; Rating changes; or Bankruptcy, insolvency, receivership or similar event of the obligated 80A-229 For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, not later than ten business days after the occurrence of the event: 1. Unless described in paragraph 5(a)(5), adverse tax opinions or other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. Modifications to rights of Bond holders; 3. Optional, unscheduled or contingent Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; 5. Non - payment related defaults; 6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; or 7. Appointment of a successor or additional trustee or the change of name of a trustee. (c) The City shall give, or cause to be given, in a timely manner, notice of a failure to provide the annual financial information on or before the date specified in Section 4, as provided in Section 4(b). (d) Whenever the City obtains knowledge of the occurrence of a Listed Event described in Section 5(b), the City shall determine if such event would be material under applicable federal securities laws. (e) If the City learns of the occurrence of a Listed Event described in Section 5(a), or determines that lrnowledge of a Listed Event described in Section 5(b) would be material under applicable federal securities laws, the City shall within ten business days of occurrence file a notice of such occurrence with the MSRB in electronic format, accompanied by such identifying 80A -230 55394.00011 \8807737.1 4 information as is prescribed by the MSRB. Notwithstanding the foregoing, notice of the Listed Event described in subsections (a)(7) or (b)(3) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Indenture. Section 6. Termination of Reporting Obligation. The City's obligations under this Disclosure Agreement shall terminate upon the defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing thirty (30) days written notice to the City and the Trustee. If at any time there is no designated Dissemination Agent appointed by the City, or if the Dissemination Agent so appointed is unwilling or unable to perform the duties of the Dissemination Agent hereunder, the City shall be the Dissemination Agent and undertake or assume its obligations hereunder. Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment requested by the City, provided the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations), and any provision of this Disclosure Agreement may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities law, acceptable to the City and the Dissemination Agent, to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule. Section 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the City choose to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the City or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Dissemination Agent may, and, at the request of any Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of the outstanding Bonds, shall (but only to the extent funds in any amount satisfactory to the Dissemination Agent have been provided to it or it has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges whatsoever related thereto, including without limitation, fees and expenses of its attorneys), or any Certificate owner may, take such actions as may be necessary and appropriate, including seeking 80A -231 55394.00011 \8807737.1 5 mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an event of default under the Indenture and the sole remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of the Dissemination Agent. The Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitations afforded to the Trustee under said Indenture. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the City agree to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time and shall be reimbursed by the City all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. Neither the Dissemination Agent nor the Trustee shall have any duty or obligation to review any information provided to it hereunder or shall be deemed to be acting in any fiduciary capacity for the City, the owners of the Bonds or any other party. The obligations of the City under this section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Any company succeeding to all or substantially all of the Dissemination Agent's corporate trust business shall be the successor to the Dissemination Agent hereunder without the execution or filing of any document or any further act. Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriters and the Owners from time to time of the Bonds, and shall create no rights in any other person or entity. 80A -232 55394.00011 \8807737.1 6 Section 13. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. CITY OF SANTA ANA Title: THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. Lo Authorized Signatory 80A -233 55394.00011 \8807737.1 7 ATTACHMENT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Santa Ana Financing Authority Name of Issue: Water Revenue Refunding Bonds, Series 2014 Date of Issuance: 2014 NOTICE IS HEREBY GIVEN that the City of Santa Ana has not provided an Annual Report with respect to the above - referenced Bonds as required by the Disclosure Agreement dated as of August 1, 2014 between the City and . The City anticipates that the Annual Report will be filed by Dated: as Dissemination Agent Authorized Signatory cc: Issuer City 80A -234 55394.00011 \8807737.1 A -I RESOLUTION NO. RESOLUTION OF THE GOVERNING BOARD OF THE SANTA ANA FINANCING AUTHORITY AUTHORIZING THE EXECUTION AND DELIVERY BY THE AUTHORITY OF A MASTER INSTALLMENT PURCHASE AGREEMENT, A FIRST SUPPLEMENT TO MASTER INSTALLMENT PURCHASE AGREEMENT, AN INDENTURE, AN ESCROW AGREEMENT AND A PURCHASE CONTRACT IN CONNECTION WITH THE ISSUANCE OF SANTA ANA FINANCING AUTHORITY WATER REVENUE REFUNDING BONDS, SERIES 2014 (PAYABLE SOLELY FROM INSTALLMENT PAYMENTS SECURED BY WATER SYSTEM NET REVENUES), APPROVING THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $17,000,000, AUTHORIZING AN OFFICIAL STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS BE IT RESOLVED BY THE GOVERNING BOARD OF THE SANTA ANA FINANCING AUTHORITY AS FOLLOWS: Section 1. The Governing Board of the Santa Ana Financing Authority hereby finds, determines and declares as follows: A. The City of Santa Ana (the "City ") previously financed and refinanced the costs of the acquisition, construction and installation of certain water system capital improvements (the "Project ") pertaining to the City's water system (the 'Water System "); B. In order to accomplish such financing and refinancing, the Authority and the City entered into a Master Installment Purchase Agreement dated as of February 1, 2004 (the "Prior Master Installment Purchase Agreement "), by and between the City and the Authority, and a First Supplement to Master Installment Purchase Agreement dated as of March 1, 2004 (the "Prior First Supplement" and together with the Master Installment Purchase Agreement, the "Prior Installment Purchase Agreement "), between the City and the Authority; C. Whereas, the Authority previously issued its Water Refunding Revenue Bonds, Series 2004 (the "Prior Bonds ") and now believes that it may achieve a debt service savings by causing a redemption of the Prior Bonds, and the City would desire to prepay Installment Payments due under the Prior Installment Purchase Agreement; 55394M011 \8780240.5 80A -235 D. The City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to refinance the Project and fund additional projects (the "2014 Project) through the offering and sale of bonds of the Authority, designated "Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 (Payable Solely from Installment Payments Secured by Water System Net Revenues)" (the "Bonds "); E. In order to accomplish such refinancing and financing of the 2014 Project the City and the Authority desire to enter into a new Master Installment Purchase Agreement (the "Master Installment Agreement') and a First Supplement to Master Installment Purchase Agreement (the "First Supplement'); F. The Authority and the City desire that The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee ") and the Authority enter into an Indenture (the "Indenture ") in order to provide for the issuance of the Bonds; G. The Bonds will be issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code; H. The funds representing the Installment Payments payable by the City under the First Supplement will be applied to the payment and redemption of the Prior Bonds pursuant to an Escrow Agreement (the "Escrow Agreement') by and among the City, the Authority and The Bank of New York Mellon Trust Company, N.A., as escrow agent; I. Stifel, Nicolaus & Company, Incorporated, as underwriter (the "Underwriter "), has submitted to the City and the Authority a proposed form of an agreement to purchase the Bonds in the form of a Bond Purchase Agreement (the 'Purchase Contract'); J. A form of the Preliminary Official Statement (the 'Preliminary Official Statement") to be distributed in connection with the public offering of the Bonds has been prepared; K. The City is a member of the Authority and the Project is to be located within the boundaries of the City; L. The Governing Board has been presented with the form of each document referred to herein relating to the refinancing contemplated hereby, and the Governing Board has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such refinancing; and Resolution No. 2014 -XXX Page 2 of 6 55394.00011 \8780240.5 80A -236 M. All acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such refinancing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Authority is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such refinancing for the purpose, in the manner and upon the terms herein provided; Section 2. All of the recitals herein contained are true and correct and the Governing Board so finds. Section 3. The forms of Master Installment Agreement and the First Supplement, on file with the Secretary of the Authority, are hereby approved, and the Chair or Vice - Chair of the Authority, or such other member of the Governing Board as the Chair may designate, the Executive Director of the Authority, the Treasurer of the Authority and the Controller of the Authority (the "Authorized Officers ") are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Master Installment Agreement and the First Supplement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the principal components of the installment payments evidenced under the First Supplement shall not exceed $17,000,000 and the true interest cost applicable to the interest components of the installment payments shall not exceed 4.00 %. Section 4. The form of Indenture, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate amount of the Bonds shall not exceed $17,000,000, the final maturity date of the Bonds shall be no later than September 1, 2031 and the true interest cost applicable to the Bonds shall not exceed 4.00% and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established by the Purchase Contract as finally executed. Section 5. The issuance of not to exceed $17,000,000 aggregate principal amount of the Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby authorized and approved. Section 6. The form of Purchase Contract, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver Resolution No. 2014 -XXX Page 3 of 6 55394.0001 1 \8780240.5 80A-237 the Purchase Contract in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the underwriter's discount for the sale of the Bonds shall not exceed 0.484% of the aggregate principal amount of such Bonds. Section 7. The form of Escrow Agreement, on file with the Secretary of the Authority, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Escrow Agreement in substantially said form, with such changes therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 8. The form of Preliminary Official Statement, on file with the Secretary of the Authority, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the Authority that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information as permitted by such Rule). Section 9. The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective investors for the Bonds a reasonable number of copies of the Preliminary Official Statement. Section 10. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the Authority, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the Authority. Section 11. The Chair of the Santa Ana Financing Authority, the Executive Director of the Santa Ana Financing Authority, the Recording Secretary, the Executive Director of Finance, and all other appropriate officials of the City, are hereby authorized and directed to execute such other agreements, documents and certificates and to take such other actions as may be necessary to effect the purposes of this resolution and the financing herein authorized. [A detailed list of the main documents to be executed is attached hereto as Exhibit A]. Resolution No. 2014 -XXX Page 4 of 6 55394.00011 \8780240.5 80A-238 Section 12. All actions heretofore taken by the officers and agents of the Authority with respect to the transactions set forth above are hereby approved, confirmed and ratified. Section 13. This Resolution shall take effect immediately upon its adoption by the Authority, and the Secretary to the Authority shall attest to and certify the vote adopting this Resolution. PASSED AND ADOPTED by the Governing Board of the Santa Ana Financing Authority this 15th day of July, 2014. SANTA ANA FINANCING AUTHORITY Chair APPROVED AS TO FORM: Sonia R. Carvalho, General Counsel By: Jose Sandoval, Assistant General Counsel AYES: Boardmembers: NOES: Boardmembers: ABSTAIN: Boardmembers: NOT PRESENT: Boardmembers: 55394.00011 \8780240.5 80A -239 Resolution No. 2014 -XXX Page 5 of 6 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary to the Board, do hereby attest to and certify that the attached Resolution No. 2014 -XXX to be the original resolution adopted by the Santa Ana Financing Authority on July 15, 2014. Date: Maria D. Huizar, Secretary to the Board Resolution No, 2014 -XXX Page 6 of 6 55394.0001 1 \8780240.5 80A -240 80A -241 EXHIBIT A Exhibits 1 -7 of the Santa Ana Financing Authority are listed below and found on pages 13 -240, Item 80A, of the July 15, 2014 City Council agenda. 1. Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. 2. First Supplement to Master Installment Purchase Agreement by and between the City of Santa Ana and the Santa Ana Financing Authority. 3. Indenture between the Santa Ana Financing Authority and the Bank of Mellon Trust Company, N.A. 4. Escrow Agreement by and among the Santa Ana Financing Authority and City of Santa Ana and The Bank of Mellon Trust Company, N.A. 5. Preliminary Official Statement relating to the Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014. 6. Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Bond Purchase Agreement. 7. Santa Ana Financing Authority Water Revenue Refunding Bonds, Series 2014 Continuing Disclosure Agreement by City. 80A -242