Agenda packet — Atwater City Council, December 8, 2025 (part 2 of 2)

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17.16.065 Fences.

Fences constructed from wood may not exceed seven feet in height on the interior property lines, but may not exceed three feet in height in exterior setbacks or within the clear-zone. A chainlink fence without slats or similar type, which does not block the view, may be four feet high within exterior setbacks. On all corner lots, exterior side yard fence constructed from wood may be seven feet in height, set back ten feet from the property line.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 905, § 1, 5-26-2009; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.070 Exterior yards or setbacks.

An exterior yard or setback shall be identified as follows: All yards adjacent to a public right-of- way shall be exterior yards.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1069, § 3(Exh. A), 11-12-2024)

17.16.080 Other required conditions.

A. Off-street parking as required elsewhere in this title.

B. Clear zone: On corner lots, the maximum height within 25 feet of that point of the lot nearest to the street intersection may not exceed three feet, and provided further, that no fence, hedge, wall or other natural or structural object shall in any way impair visibility at intersections in such a manner as to endanger life, health, or property.

C. Landscaping shall not obscure ingress or egress of neighboring properties so as to endanger health and safety.

D. Distance between main buildings shall be a minimum of ten feet, unless fire or building code require a larger distance.

E. Zero lot line may be established in Planned Development zones and in new development in compliance with Article 16, Subdivision Ordinance of the Atwater Municipal Code.

F. Detached accessory buildings shall not exceed a height of 16 feet to the highest point of the roof, and shall not encroach on any exterior yard setback, and may not be placed within five feet of the interior rear or side property line.

G. Accessory buildings on through lots shall have not less than 20 feet to the rear property line.

H. An accessory building or structure, which contains less than 120 square feet of projected roof area and is less than eight feet in overall height is exempt from the provisions of this chapter, provided that no such structure shall encroach on any exterior yard or easement, and that only one exempt structure is permitted per residential lot.

I. Accessory structures shall not exceed 500 square feet in size or cause greater than 60 percent lot coverage (for accessory structures exceeding 500 square feet in size see Section 17.16.040).

J. Reserved.

K. Distance between main buildings and detached accessory buildings/structures shall be a minimum of five feet unless fire or building codes require a larger distance.

L. The front yard setback for carports that are located on a paved driveway shall be zero feet.

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(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 804, 8-12-2002; Ord. CS 905, § 1, 5-26-2009; Ord. CS 1069, § 4(Exh.

A), 11-12-2024, Ord. CS XXX, 11-10-2025)

17.16.090 Reserved.

Ord. CS 1059, § 1, adopted March 27, 2023, repealed § 17.16.090, which pertained to site plan and design review.

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Exhibit B
Title 17 - ZONING
CHAPTER 17.16 LOW DENSITY RESIDENTIAL DISTRICTS
Atwater, California, Code of Ordinances Created: 2025-10-01 08:18:35 [EST] (Supp. No. 11)

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CHAPTER 17.16 LOW DENSITY RESIDENTIAL DISTRICTS

17.16.010 Purpose.

To protect the value and charm of the existing residential areas, and to promote health, safety, comfort, convenience, and the general welfare, the following single-family residential districts are established by this chapter:

R-E Residential Estate
R-1-10, R-1-8, R-1-6, and R-1-5.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.020 Principal permitted uses.

A. One single-family dwelling per lot.

B. Supportive housing as defined in Section 17.06.613.

C. Transitional housing as defined in Section 17.06.627. (Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1014, § 3, 9-23-2019; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.030 Accessory uses.

Accessory buildings and uses customarily appurtenant to a single-family residence, such as:

A. Garages, carports, off-street parking areas;
B. Private swimming pools;
C. Sheds for tools and garden equipment (see Section 17.16.080); D. Parabolic antennas;
E. Living quarters for relatives, friends, or persons regularly employed on the premises, but not rented or otherwise conducted as a business, provided that no kitchen facilities are installed; F. Community care facilities;
G. Occupations conducted away from home, when the residence is used only as business address. (See definitions: Home Occupation.)
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.040 Conditional uses requiring a permit.

A. Public and quasi-public buildings and uses of recreational, educational, religious, cultural, or public service types; not including corporation yards, storage, repair yards, warehouses and similar uses; B. Home occupations;

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C. A second unit with kitchen and bath facilities, if in compliance with Chapter 17.28.

D. Detached accessory structures greater than 500 square feet in size but cover less than 60 percent of the lot upon which it is constructed.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 804, 8-12-2002; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.045 Prohibited uses.

The maintenance of kennels, and storage for any commercial purpose shall be prohibited. (Ord. CS 559, 1984; Ord. CS 529, 1983; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.050 Lot area, dimension, setbacks, density, and coverage.

The following minimum requirements shall be observed, except where increased for conditional uses, or by the Planning Commission or City Council to mitigate environmental impact.

R-E R-1-10 R-1-8 R-1-6 R-1-5
Minimum Lot Area per dwelling unit (sq.
ft.)
16,000 10,000 8,000 6,000 5,000
Minimum Lot Width (feet), Interior Lot 110 100 80 60 50 Minimum Lot Width (feet) Corner Lot 110 100 80 70 60
Minimum Lot Depth 130 100 100 100 100
Minimum Front yard Setback (exterior) 20 20 20 20 10
Minimum Rear yard Setback 20 20 20 15 5
Minimum Side yard Setback (interior) 10 10 5 5 5
Minimum Side yard Setback Corner Lot
abutting a front yard 20 20 15 15 10
abutting a side yard 10 10 10 10 2
Minimum Landscaped or open
recreational area
30 percent
30 percent
30 percent
30 percent
25 percent
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 595, 1985; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.055 Exceptions to setback requirements.

Setback requirements along major arterials shall supersede the requirements of this chapter.

A. To offset the monotonous building setbacks, a property owner may choose to reduce the front yard setback by up to three feet, but shall be required to have the same number of feet added to the regular rear yard by the same number of feet.

If a property owner chooses to give an additional three feet or less in addition to the required front yard setback, he may reduce the rear yard by the same number feet.

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B. Side yard for boat and RV parking. If the property owner adds an extra five feet to a five foot side yard requirement, in order to park vehicles behind the front yard setback, he may encroach by five feet into the rear yard setback.

C. Single family residential setbacks for lots that front on a cul-de-sac bulb and have an average lot depth of less than 100 feet may encroach by up to five feet into the required front yard setback provided the garage be no closer than 20 feet to the property line.

D. Attached unenclosed patio covers may encroach by ten feet into the required rear yard setback. (Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 595, 1985; Ord. CS 905, § 1, 5-26-2009; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.060 Height of structures.

No building constructed in this zone shall exceed a height of 35 feet unless the following has occurred:

1. The Fire Marshal and Chief Building Official, or designees, have both approved the site plans, improvement plans, and/or other required submittals for the project; and

2. The Planning Commission makes all of the following findings:

A. The applicant has adequately demonstrated a need for the project to exceed 35 feet in building height that is related to the project's benefit to the community, or due to site constraints, or in order to achieve desired architectural qualities;
B. The project will be exemplary in its design;
C. The project design will complement and be compatible with the setting and the character of the neighboring properties with sensitivity to any adjacent federal, state, and City or other historic landmarks;
D. The project's proximity to railroads, airports, major freeways or highways, or other transportation hubs, stations, or centers will not interfere, impede, or otherwise disturb such transit services;
E. The project is consistent and compatible with the City's General Plan, Zoning Code, and other adopted specific plans and/or master plans;
F. Intended use of the project will enhance or promote the standard of living for City residents, and/or the local economy;
G. The project's proposed height would not adversely affect visual blockage of light, air, or cause intrusion of privacy to adjacent and surrounding properties; H. The project is not detrimental to the health, safety, peace, comfort, and general welfare of persons or property in the neighborhood and surrounding environs, including without limitation, it will not affect emergency response times or services, nor seismic and/or structural integrity; and
I. The project's proposed building height does not impede pedestrian or vehicular accessibility along any public or private pathways, sidewalks, driveways or roadways, visually impede any safe use of the same, or otherwise present a hazard to pedestrian or vehicular use of the same.

Additional conditions of approval may be imposed by the Planning Commission relative to the project as it relates to this section.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1056, § 1, 1-23-2023; Ord. CS 1069, § 1(Exh. A), 11-12-2024)

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17.16.065 Fences.

17.16.070 Exterior yards or setbacks.

17.16.080 Other required conditions.

A. Off-street parking as required elsewhere in this title.

C. Landscaping shall not obscure ingress or egress of neighboring properties so as to endanger health and safety.

D. Distance between main buildings shall be a minimum of ten feet, unless fire or building code require a larger distance.

E. Zero lot line may be established in Planned Development zones and in new development in compliance with Article 16, Subdivision Ordinance of the Atwater Municipal Code.

G. Accessory buildings on through lots shall have not less than 20 feet to the rear property line.

I. Accessory structures shall not exceed 500 square feet in size or cause greater than 60 percent lot coverage (for accessory structures exceeding 500 square feet in size see Section 17.16.040).

J. Reserved.

K. Distance between main buildings and detached accessory buildings/structures shall be a minimum of five feet unless fire or building codes require a larger distance.

L. The front yard setback for carports that are located on a paved driveway shall be zero feet.

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(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 804, 8-12-2002; Ord. CS 905, § 1, 5-26-2009; Ord. CS 1069, § 4(Exh.

A), 11-12-2024, Ord. CS XXX, 11-10-2025)

17.16.090 Reserved.

Ord. CS 1059, § 1, adopted March 27, 2023, repealed § 17.16.090, which pertained to site plan and design review.

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Exhibit C
Title 17 - ZONING
CHAPTER 17.16 LOW DENSITY RESIDENTIAL DISTRICTS
Atwater, California, Code of Ordinances Created: 2025-10-01 08:18:35 [EST] (Supp. No. 11)

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CHAPTER 17.16 LOW DENSITY RESIDENTIAL DISTRICTS

17.16.010 Purpose.

R-E Residential Estate
R-1-10, R-1-8, R-1-6, and R-1-5.
(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.020 Principal permitted uses.

A. One single-family dwelling per lot.

B. Supportive housing as defined in Section 17.06.613.

C. Transitional housing as defined in Section 17.06.627. (Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 1014, § 3, 9-23-2019; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.030 Accessory uses.

Accessory buildings and uses customarily appurtenant to a single-family residence, such as:

17.16.040 Conditional uses requiring a permit.

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C. A second unit with kitchen and bath facilities, if in compliance with Chapter 17.28.

17.16.045 Prohibited uses.

The maintenance of kennels, and storage for any commercial purpose shall be prohibited. (Ord. CS 559, 1984; Ord. CS 529, 1983; Ord. CS 1069, § 4(Exh. A), 11-12-2024)

17.16.050 Lot area, dimension, setbacks, density, and coverage.

The following minimum requirements shall be observed, except where increased for conditional uses, or by the Planning Commission or City Council to mitigate environmental impact.

17.16.055 Exceptions to setback requirements.

Setback requirements along major arterials shall supersede the requirements of this chapter.

If a property owner chooses to give an additional three feet or less in addition to the required front yard setback, he may reduce the rear yard by the same number feet.

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17.16.060 Height of structures.

No building constructed in this zone shall exceed a height of 35 feet unless the following has occurred:

1. The Fire Marshal and Chief Building Official, or designees, have both approved the site plans, improvement plans, and/or other required submittals for the project; and

2. The Planning Commission makes all of the following findings:

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17.16.065 Fences.

17.16.070 Exterior yards or setbacks.

17.16.080 Other required conditions.

A. Off-street parking as required elsewhere in this title.

C. Landscaping shall not obscure ingress or egress of neighboring properties so as to endanger health and safety.

D. Distance between main buildings shall be a minimum of ten feet, unless fire or building code require a larger distance.

E. Zero lot line may be established in Planned Development zones and in new development in compliance with Article 16, Subdivision Ordinance of the Atwater Municipal Code.

G. Accessory buildings on through lots shall have not less than 20 feet to the rear property line.

I. Accessory structures shall not exceed 500 square feet in size or cause greater than 60 percent lot coverage (for accessory structures exceeding 500 square feet in size see Section 17.16.040).

J. Reserved.

K. Distance between main buildings and detached accessory buildings/structures shall be a minimum of five feet unless fire or building codes require a larger distance.

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(Ord. CS 529, 1983; Ord. CS 559, 1984; Ord. CS 804, 8-12-2002; Ord. CS 905, § 1, 5-26-2009; Ord. CS 1069, § 4(Exh.

A), 11-12-2024)

17.16.090 Reserved.

Ord. CS 1059, § 1, adopted March 27, 2023, repealed § 17.16.090, which pertained to site plan and design review.

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CITY COUNCIL

AGENDA REPORT

MEETING
DATE:

December 8, 2025
TO: Mayor and City Council
FROM: Christopher Hoem, City Manager

PREPARED
BY:

Julia Coronado
SUBJECT: Authorizing the Application and Amending the PLHA Plan for the Permanent Local Housing Allocation Program (City Manager Hoem)

RECOMMENDED COUNCIL ACTION
Open the public hearing and take any testimony given;
Close the public hearing;
Motion to adopt Resolution No. 3585-25 authorizing the application and approving amendments to the City of Atwater’s Permanent Local Housing Allocation (PLHA) Plan; or
Motion to approve staff's recommendation as presented.

I. BACKGROUND/ANALYSIS:

I. BACKGROUND:

In 2017, Senate Bill (SB) 2, The Building Homes and Jobs Act, established a permanent source of funding to support affordable housing creation, preservation, and related programs across California. Funds are administered through the Department of Housing and Community Development's (HCD) Permanent Local Housing Allocation (PLHA) Program.

On October 24, 2022, the City Council adopted Resolution No. 3349-22, authorizing the City of Atwater to apply for and administer its PLHA formula allocation for program years 2019-2023. Through its submission to the 2020 Notice of Funding Availability (NOFA), the City was awarded $675,548 in PLHA funds.

HCD released an updated PLHA NOFA on October 15, 2024, requiring eligible jurisdictions to amend their PLHA Plans when modifying or expanding program

CITY COUNCIL
Mike Nelson, Mayor
Danny Ambriz Brian Raymond
John Cale Kalisa Rochester

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Agenda Report - Authorizing the Application and Amending the PLHA Plan for the Permanent Local Housing Allocation Program (City Manager Hoem) Page 2

activities.

To meet current housing needs and align with updated state guidelines, staff is recommending amendments to the previously approved PLHA Plan.

II. ANALYSIS:

1. Amendment to Use of 2022 and 2023 Allocations
The City intends to amend its PLHA application for the:
• 2022 allocation of $139,339, and
• 2023 allocation of $103,072
Originally designated for pre-development, development, acquisition, rehabilitation, and preservation of affordable rental housing, these funds will now be redirected to assist individuals experiencing or at risk of homelessness, an eligible activity under the PLHA Program. This revision better aligns with current community needs and statewide goals to address housing challenges.

2. Amendments to the Accessory Dwelling Unit (ADU) Loan Program To expand local housing options and encourage residential infill, staff proposes the following changes to the City’s PLHA-funded ADU Loan Program:
• Increase in maximum loan amount from $40,000 to $125,000, reflecting updated construction and financing costs.
• Adjustment to eligible household income from 60% of Area Median Income (AMI) to 120% of AMI, broadening eligibility and enabling more homeowners to participate.
• Minimum occupancy requirement: ADUs funded through the program must be rented for no fewer than 30 days, ensuring compliance with State guidelines and discouraging short-term vacation rental use.

Loan terms:

Loans of up to $125,000 will be issued as zero-percent interest, 30-year deferred payment loans, consistent with PLHA requirements.

These amendments require updates to the City’s PLHA Plan and Program Guidelines.

3. Compliance with HCD Requirements
The amended PLHA Plan complies with Sections 302(c)(4) and 302(c)(5) of the PLHA Guidelines, including:
• Public notice and comment requirements
• Eligibility determinations

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Agenda Report - Authorizing the Application and Amending the PLHA Plan for the Permanent Local Housing Allocation Program (City Manager Hoem) Page 3

• Program structure and reporting criteria
Approval of the amended PLHA Plan will allow the City of Atwater to more effectively address local housing needs, expand the availability of accessory dwelling units, and provide targeted support to residents facing housing instability. Adoption of Resolution No. 3585-25 ensures continued compliance with HCD guidelines and positions the City to fully utilize State housing funds intended to support local housing priorities.

II. FISCAL IMPACTS:

There is no negative impact associated with approving this resolution. All activities and administrative costs will continue to be funded through the City’s PLHA allocations.

III. LEGAL REVIEW:

This item has been reviewed by the City Attorney.

IV. EXISTING POLICY:

This item is consistent with goal numbers two (2), three (3), and six (6) of the City’s 2026-2030 Strategic Plan to ensure safety of staff and our community, promote transparency through communication, and improve quality of life.

V. ALTERNATIVES:

N/A
VI. INTERDEPARTMENTAL COORDINATION:

The Community Development Department and the City Manager’s office are coordinating this document.

VII. PUBLIC PARTICIPATION:

The public hearing was properly noticed and advertised for the regularly scheduled City Council hearing. The public can provide comments on this item prior to City Council action.

VIII. ENVIRONMENTAL REVIEW:

Pursuant to the California Environmental Quality Act of 1970, Public Resources Code §21000, et seq., as amended and implementing State CEQA Guidelines, Title 14,Chapter 3 of the California Code of Regulations (collectively, “CEQA”), the applying for and receiving of grant funds does not constitute a “project” within the meaning of Public Resources Code Section 21065, 14 Cal Code Reg. Section 15060(c)(2), 15060(c)(3), or 15378 because there is no potential that it will result in a direct or reasonably foreseeable indirect physical change in the environment. In addition, the activity is categorically exempt pursuant to Section 15061(b)(3), “Review for Exemptions” of the CEQA Guidelines, because there is no possibility that the activity will have a significant effect on the environment, and no further environmental review is

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Agenda Report - Authorizing the Application and Amending the PLHA Plan for the Permanent Local Housing Allocation Program (City Manager Hoem) Page 4

required. Therefore, the activity does not warrant further environmental review.

IX. STEPS FOLLOWING APPROVAL:

Upon City Council adoption of the Resolution, staff will file the Resolution with the City Clerk’s office.

Submitted and Approved by:

Chris Hoem, City Manager
Attachments:

1. Resolution XXXX-25 Amended PLHA

2. Atwater PLHA ADU Guidelines-final

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CITY COUNCIL
OF THE

CITY OF ATWATER
RESOLUTION NO. XXXX-25

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ATWATER AUTHORIZING THE

APPLICATION AND AMENDING THE PLHA PLAN

FOR THE PERMANENT LOCAL HOUSING

ALLOCATION PROGRAM
WHEREAS, the Department is authorized to provide up to $296 million under the SB 2 Permanent Local Housing Allocation Program Formula Component from the Building Homes and Jobs Trust Fund for assistance to Cities and Counties (as described in Health and Safety Code section 50470 et seq. (Chapter 364, Statutes of 2017 (SB 2); and WHEREAS, the State of California (the “State”), Department of Housing and Community Development (“Department”) issued a Notice of Funding Availability (“NOFA”) dated October 15th, 2024 under the Permanent Local Housing Allocation (PLHA) Program; and WHEREAS, the City of Atwater is an eligible Local government who has applied for program funds to administer one or more eligible activities, or a Local or Regional Housing Trust Fund to whom an eligible Local government delegated its PLHA formula allocation; and
WHEREAS, the Department may approve funding allocations for PLHA Program, subject to the terms and conditions of the Guidelines, NOFA, Program requirements, the Standard Agreement, and other contracts between the Department and PLHA grant recipients.

NOW, THEREFORE, BE IT RESOLVED THAT:

1. If Applicant receives a grant of PLHA funds from the Department pursuant to the above referenced PLHA NOFA, it represents and certifies that it will use all such funds in a manner consistent and in compliance with all applicable state and federal statutes, rules, regulations, and laws, including without limitation all rules and laws regarding the PLHA Program, as well as any and all contracts Applicant may have with the Department.

2. Applicant is hereby authorized and directed to receive a PLHA grant, in an amount not to exceed the five-year estimate of the PLHA formula allocations, as stated in Appendix B of the current NOFA, posted October 15th, 2024, in accordance with all applicable rules and laws.

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Resolution No. XXXX-25 Page 2

3. Applicant hereby agrees to use the PLHA funds for eligible activities as approved by the Department and in accordance with all Program requirements, Guidelines, other rules, and laws, as well as in a manner consistent and in compliance with the Standard Agreement and other contracts between the Applicant and the Department.

4. Pursuant to Sections 302(c)(4) and 302(c)(5) of the Guidelines, Applicant’s PLHA Plan Amendment for the 2020-2023 Allocations is attached to this resolution, and Applicant hereby adopts this PLHA Plan Amendment and certifies compliance with all public notice, public comment, and public hearing requirements in accordance with the Guidelines.

5. Applicant certifies that it was delegated by the City of Atwater to submit an application on its behalf and administer the PLHA grant award for the formula allocation of PLHA funds, pursuant to Guidelines Section 300(c) and 300(d), and the legally binding agreement between the recipient of the PLHA funds and the Applicant is submitted with the PLHA application.

6. Applicant certifies that it has or will subgrant some or all of its PLHA funds to another entity or entities. Pursuant to Guidelines Section 302(c)(3), “entity” means a housing developer or program operator, but does not mean an administering Local government to whom a Local government may delegate its PLHA allocation.

7. Applicant certifies that its selection process of these subgrantees was or will be accessible to the public and avoided or shall avoid any conflicts of interest.

8. Pursuant to Applicant’s certification in this resolution, the PLHA funds will be expended only for eligible Activities and consistent with all program requirements.

9. Applicant certifies that, if funds are used for the acquisition, construction or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the requirements stated in Guidelines Section 302(c)(6)(A), (B) and (C).

10.Applicant certifies that, if funds are used for the development of an Affordable Rental Housing Development, the Local government shall make PLHA assistance in the form of a low-interest, deferred loan to the Sponsor of the Project, and such loan shall be evidenced through a Promissory Note secured by a Deed of Trust and a Regulatory Agreement shall restrict occupancy and rents in accordance with a Local government-approved underwriting of the Project for a term of at least 55 years.

11.Applicant shall be subject to the terms and conditions as specified in the Standard Agreement, the PLHA Program Guidelines and any other applicable SB 2 Guidelines published by the Department.

12.The City Manager, or his designee, is authorized to execute the PLHA Program Application, the PLHA Standard Agreement and any subsequent amendments or modifications thereto, as well as any other documents which are related to the Program or the PLHA grant awarded to Applicant, as the Department may deem appropriate.

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Resolution No. XXXX-25 Page 3
The foregoing resolution is hereby adopted this 8th day of December 2025.

AYES:

NOES:

ABSENT:

APPROVED:

________________________________
MICHAEL G. NELSON, MAYOR
ATTEST:
_______________________________
KORY J. BILLINGS, CITY CLERK

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Resolution No. XXXX-25 Page 4
“I, Kory J. Billings, City Clerk of the City of Atwater and as such Ex-Officio Clerk of the City Council of the City of Atwater, hereby certify that the foregoing Resolution is a true, correct, and complete copy of the original of such resolution, which is on file in my office. ________________________________
Kory J. Billings
City Clerk of the City of Atwater, and
Ex-Officio Clerk of the City Council of the
City of Atwater, State of California.”

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1 of 45 City of Atwater
ADU/JADU Program Guidelines
HCD PLHA: Approved: XX/XX/2023

CITY OF ATWATER
Accessory Dwelling Unit/Junior
Accessory Dwelling Unit (ADU/JADU)
Development and Repair Program
Guidelines

PLHA FUNDS
Serving the City of Atwater

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CITY OF ATWATER

ADU/JADU DEVELOPMENT AND REPAIR PROGRAM GUIDELINES

TABLE OF CONTENTS

1.0 GENERAL

1.1. PROGRAM OUTREACH AND MARKETING

1.2. APPLICATION PROCESS AND SELECTION

1.3. LOAN PROCESS

1.4. CONFLICT OF INTEREST REQUIREMENTS

2.0. APPLICANT QUALIFICATIONS

2.1. INCOME LIMITS

2.2. INCOME QUALIFICATION CRITERIA

2.3. HOMEOWNER ELIGIBILITY & RESIDENCY REQUIREMENTS

3.0. PROPERTY ELIGIBLITY

3.1. CONDITIONS

4.0. THE PROGRAM LOAN

4.1. MAXIMUM AMOUNT OF PROGRAM ASSISTANCE

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS

4.3. RATES AND TERMS

4.4. GRANTS

4.5. APPRAISAL

4.6. INSURANCE

4.7. LOAN SECURITY

5.0. PROGRAM LOAN SERVICING AND MAINTENANCE

5.1. PAYMENTS ARE VOLUNTARY

5.2. RECEIVING LOAN REPAYMENTS

5.3. LOAN SERVICING POLICIES AND PROCEDURES

5.4. LOAN MONITORING PROCEDURES

5.5. DEFAULT AND FORECLOSURE

5.6. SUBORDINATIONS

6.0. CONSTRUCTION

6.1. STANDARDS

6.2. ELIGIBLE CONSTRUCTION COSTS

6.3. ELIGIBLE PROJECT COSTS/ACTIVITY DELIVERY COSTS

6.4. REPAIR CALLBACKS

7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

7.1. AMENDMENTS

7.2. EXCEPTIONS

8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE

8.2. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION CONTRACTOR

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3 of 45 City of Atwater
ADU/JADU Program Guidelines

CITY OF ATWATER

ADU/JADU DEVELOPMENT & REPAIR PROGRAM GUIDELINES

TABLE OF CONTENTS - ATTACHMENTS
ATTACHMENT A: TITLE 25 SECTION 6914 GROSS INCOME INCLUSIONS AND EXCLUSIONS ATTACHMENT B: ANNUAL INCOME NET FAMILY ASSET INCLUSIONS AND EXCLUSIONS ATTACHMENT C: CURRENT INCOME LIMITS
ATTACHMENT D: MARKETING PLAN
ATTACHMENT E: LOAN SERVICING POLICIES AND PROCEDURES
ATTACHMENT F: FORECLOSURE POLICY
ATTACHMENT G: CERTIFICATION OF OCCUPANCY
ATTACHMENT H: ADU/JADU HOUSING REHABILITATION/RECONSTRUCTION PROGRAM

CONTRACTOR GUIDELINES AND INFORMATION SHEET

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CITY OF ATWATER

ADU/JADU DEVELOPMENT & REPAIR PROGRAM GUIDELINES

1.0. GENERAL
The above-named entity, hereinafter referred to as the “Sponsor”, has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) to administer one or more HCD-funded ADU/JADU Development and Repair Program, funding will be used to provide financial assistance to households. Funding may be made available to households with incomes at or below 60% of AMI for predevelopment, development and/or repair of an ADU/JADU. The ADU/JADU Development and Repair Program described herein and hereinafter referred to as the “Program” is designed to provide assistance to eligible homeowners seeking to develop, or correct health and safety items, as well as code violations, of ADU/JADU’s located within the Program’s eligible area, as described in Section 3.0. The Program provides this assistance in the form of deferred payment loans used to finance the cost of predevelopment, new construction, conversion and structural modifications to existing homes necessary to accommodate an ADU or a JADU or necessary repairs that will provide the homeowner with a healthy, safe, sanitary and code compliant ADU/JADU, referred to herein as “secondary housing unit”. The Program will be administered by Self-Help Enterprises, hereinafter referred to as the “Program Operator”.

1.1. PROGRAM OUTREACH AND MARKETING
All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. No person shall, on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation, be excluded, denied benefits or subjected to discrimination under the Program.

The Sponsor will ensure that all persons, including those qualified individuals with handicaps have access to the Program.

A. The Fair Housing Lender logo and Accessibility logo will be placed on all outreach materials. Fair housing marketing actions will be based upon a characteristic analysis comparison (census data may be used) of the Program’s eligible area compared to the ethnicity of the population served by the Program (includes, separately, all applications given out and those receiving assistance) and an explanation of any underserved segments of the population. This information is used to show that protected classes (age, gender, ethnicity, race, and disability) are not being excluded from the Program. A Fair Housing Marketing Plan can be found as Attachment D. Flyers or other outreach materials, in English and any other language that is the primary language of a significant portion of the area residents, will be widely distributed in the Program-eligible area and will be provided to any local social service agencies. The Program may sponsor homeownership education classes to help educate homeowners about credit, budgeting, predatory lending, foreclosure prevention and home maintenance, as well as future responsibilities.

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B. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of an otherwise qualified individual, solely by reason of disability, from participation under any Program receiving Federal funds. The Program Sponsor will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public.

1.2. APPLICATION PROCESS AND SELECTION
A. Waiting List/Homeowner Contact
The Sponsor will utilize a waiting list. In response to a homeowner’srequest, the homeowner is placed on the waiting list. Homeowners are offered the opportunity to qualify for assistance by waiting list priority (a first-come, first served basis). Assistance will be provided to eligible homeowners on a first-come, first served basis.

The Program Operator will contact homeowners by mail and/or by telephone to advise them of funding availability. The homeowner has 30 days to complete and return the loan application and supporting documentation. Should a homeowner fail to respond to the initial contact for assistance or to provide any of the required documentation within the 30-day period, the homeowner’s name will be removed from the waiting list. If the homeowner desires assistance at a later time, he/she will be placed on the waiting list at that time.

Should the waiting list be exhausted, the Program will be marketed in accordance with the Sponsor’s Marketing Plan. See Attachment D.

B. Application/Interview
An application packet is provided to the homeowner for completion and submittal to the Program Operator, along with supporting documentation. The Program is fully explained; application forms and documentation are reviewed. Verifications are obtained for income, assets, employment, benefits, and mortgage. Title report and property values are also obtained.

If the Program Operator encounters material discrepancies and/or misrepresentations, and/or there are income, asset, household composition, or other important questions that can't be resolved, the Sponsor reserves the right to deny assistance to the household. In this case, the applicant may re-apply after six months have elapsed from the time of written assistance denial.

C. Household Selection
Households selected for participation in the Sponsor’s ADU/JADU Development and Repair Program are those determined eligible upon completion of processes described in A. and B. above and either have an existing ADU/JADU or a lot adequate to support the development of an ADU/JADU.

D. Initial Inspection/Work Write-Up/Estimate

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Prospective units are inspected by the Program Operator, a certified housing inspector, or a Sponsor representative to determine eligibility and acceptability of properties for participation in the Program.

Measurements and observations are noted about the property, including special conditions with potential cost consequences (dilapidated outbuildings, absence of curb and gutter when required by code, etc.). A floor plan and site plan, as needed, are drawn for the home and property, including all appurtenances.

Findings are noted on an inspection form, and later used by the Program Operator to prepare the work write-up. Estimated costs are determined by the Program Operator who has years of experience in the building industry, and in reviewing contractor bids and verifying cost with materials suppliers. The homeowner reviews the completed work write-up and cost estimate, and the approved write-up is incorporated into bid documents.

E. Bid Solicitation
The homeowner will solicit his/her own bids. The homeowners shall obtain a minimum of two bids and submit them to Program Operator. Program Operator will review bids for cost reasonableness.

Contractors must be licensed and bonded by the State of California Contractors Licensing Board. Contractors must also provide Program Operator with evidence of Workers’ Compensation Insurance and Comprehensive General Liability and Property Damage Insurance with Combined Single Limits of at least $1,000,000.

Cost reasonableness is determined by comparing the bids received with the cost estimate prepared by the Program Operator. Bidsshould be within 10% ofthe Program Operator’s cost estimate, otherwise an explanation must be provided to the file for any bid selected exceeding 10% of the estimate. The homeowner is encouraged to accept the lowest reasonable bid.

The Program Operator determines eligibility of the contractor by contacting the State Contractors License Board and checking the Federal List of Debarred Contractors. The contractor is also required to provide a self-certification stating that he/she is not on the Federal debarred list. Once determined eligible, the contractor isthen notified of provisional award of bid (pending loan approval). Notices of non-award are mailed to participating contractors.

F. Pre-Construction Conference
A pre-construction conference is scheduled with homeowner, contractor, and Program Operator. The Program Operator reviews the Owner-Contractor Construction Contract, including the work write-up, anticipated start date, pay schedule, and anticipated date of completion, with the homeowner and contractor.

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G.Loan Request/Approval
A loan request are prepared on behalf of the homeowner by the Program Operator. The loan request includes the cost of construction, a contingency fund, and other project costs (listed in Section 6.3.). A Loan Review Committee meeting is scheduled to hear the loan request.

Section 1.3. provides additional information on the loan approval process. Once approved, loan documents are executed, and the loan isfunded.

H.Start-Up/Field Inspections
Following loan approval, the construction contract and Notice to Proceed are executed. The Program Operator monitors date of start-up and performs field inspections on a regular basis. The Program Operator will visit the project site regularly in order to check the scope of work, inspect materials, and to confirm the project is on schedule and within budget. The Program Operator works with the Sponsor’s Building Inspector to ensure the work meets building codes, while not exceeding funding limits.

The Program Operator reviews the work status with the homeowner and with the contractor in orderto remedy any developing problems quickly and to ensure that both are satisfied with the construction process. At the completion of each phase, the Program Operator inspects the work and the homeowner authorizes contractor payments.

The Program Operator will refer back to original plans and specifications to verify the work was completed as contracted.

I. Change Orders
Written change orders are required when the homeowner requests any changesin the writeup, such as eliminating an item completely, eliminating one item and substituting another, or adding items. The change order will state the change and dollar value for the change. The change order must be signed by both the contractor and the homeowner and submitted to the Program Operator and Sponsor for signature approval. If the change order exceeds the approved financing, the homeowner will be asked to provide additional funds or a report and request for additional funds may be presented to the Sponsor’s Loan Review Committee for approval prior to Program Operator signing-off on the change order.

J. Progress Payments
Ninety percent (90%) of the contract amount is distributed to the contractor in the form of progress payments during construction. The final ten-percent (10%) of the contract amount is set aside as a retention payment. The contractor requests a progress payment from the homeowner and notifies the Program Operator that he/she has done so. Upon favorable inspection by the homeowner, Program Operator, and Sponsor or Sponsor’s Building Inspector, the payment authorization is signed by the homeowner and submitted for payment.

K.Final Inspections/Notice of Completion/Final Payment
When the project is completed, the Program Operator inspects the work item by item with

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the homeowner, the contractor, and/or the Sponsor. The Sponsor’s Building Inspector performs a final inspection. Any corrections or deficiencies are noted and corrected by the contractor. Upon favorable final inspections, a Notice of Completion is prepared, signed by the homeowner, and then recorded. The final ten percent (10%) retention payment is released 35 days after the recording of the Notice of Completion.

1.3. LOAN PROCESS
The Sponsor’s Loan Review Committee must approve all loans. The Loan Review Committee may approve assistance with ADU/JADU Development and Repair.

In order to obtain financing, applicants must meet all property and eligibility guidelines in effect at the time the application is considered. Homeowners will be provided written notification of approval or denial. Any reason for denial will be provided to the applicant in writing.

1.4. CONFLICT OF INTEREST REQUIREMENTS
The Sponsor’s Program, mustfollow the applicable Conflict of Interestrequirements of Public Contract Code sections 10410, 10411, and 10430 (e)
A contractor with a vested interest in the property cannot bid on a construction/rehabilitation project. Such a contractor may act as owner/builder, subject to standard construction procedures.

2.0. APPLICANT QUALIFICATIONS

2.1. INCOME LIMITS
All homeowners must certify that they meet the household income eligibility requirements for the applicable HCD Program(s) and have their household income documented. The income limits in place at the time of loan approval will apply when determining applicant income eligibility. ADU Program will be targeted to those with incomes at or below 60 percent of AMI and will ensure that 100% of funding in years one through five is provided to households with incomes below 60% of AMI. Program will be targeted to those with incomes at or below 60 percent of AMI and will ensure that 100% of funding in years one through five is provided to households with incomes below 60% of AMI. Households assisted under the ADU program in years one through five may have incomes up to 120% of AMI; however, occupancy of the ADU must be targeted to households below 60% of AMI in an effort to promote affordability that meets the needs of a growing workforce. Should the property owners household have income of 60% of AMI or below, the ADU may be made available to renters with incomes up to 120% of AMI.

See Attachment C.

The link to the official HCD maintained income limits is: http://www.hcd.ca.gov/grantsfunding/income-limits/state-and-federal-income-limits.shtml (choose “Official State Income Limits”).

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Household: means one or more persons who will occupy a housing unit. Unborn children may be counted.

Annual Income: Generally, the gross amount of income of all adult household members that is anticipated to be received during the coming 12-month period.

2.2. INCOME QUALIFICATIONCRITERIA
Projected annual grossincome of the applicant household will be used to determine whether they are above or below the published HCD income limits. Income will be verified by reviewing and documenting tax returns, copies of wage receipts, subsidy checks, bank statements and third-party verification of employment forms sent to employers. All documentation shall be dated within six months prior to loan closing, kept in the applicant file and held in strict confidence.

A. HOUSEHOLD INCOME DEFINITION:

Household income is the annual gross income of all adult household members that is projected to be received during the coming 12-month period and will be used to determine Program eligibility. Refer to Income Inclusions and Exclusions for further guidance to the types of incomes to be included or excluded when calculating gross annual income. See Attachment A.

Housing and/or debt ratios are not considered as the funding provided creates no additional monthly financial obligation. If a homeowner has a mortgage, creditworthiness is verified by ensuring that all payments are current and that no late payments have been received in the past twelve months.

If the Borrower will occupy an ADU or a JADU, then the residents of the primary unit shall not be considered as part of the Household receiving funding for purposes of this section.

See Attachment A: Title 25 Section 6914 Annual Income inclusions and Exclusions (State) B. ASSETS:

There is no asset limitation for participation in the Program. Income from assets is, however, recognized as part of annual income under the Part 5 definition. An asset is a cash or noncash item that can be converted to cash. The value of necessary items such as furniture and automobiles are not included. (Note: it is the income earned – e.g., interest on a savings account – not the asset value, which is counted in annual income.) An asset’s cash value is the market value less reasonable expenses required to convert the asset to cash, including penalties or feesfor converting financial holdings and costsforselling real property. The market value of an item is counted as an asset.

See Attachment B: Part 5 Annual Income Net Family Asset Inclusions and Exclusions

2.3. HOMEOWNER ELIGIBILITY AND RESIDENCY REQUIREMENTS

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The Sponsor’s ADU/JADU Development and Repair Program allows for owner-occupied properties to participate in the Program. Owner-occupied units must be the owner’s principal place of residence. A photocopy of a recent utility bill will verify proof of occupancy.

No unit to be developed/rehabilitated will receive financial assistance if it is currently occupied by an over-income household or does not meet the eligibility standards outlined in these guidelines. Loans provided to homeowners with incomes under 60% of AMI may rent units to tenants with incomes up to 120% of AMI. Homeowners with incomes above 60% of AMI will be required to rent units to households with incomes at or below 60% of AMI. Rent restrictions will be for a term of 10 years, will require affordable rents, and must be occupied for a term of no less than 30 days.

A. Continued residency is monitored annually, per Attachment F, forthe term of the loan.

Occupancy will be verified, reviewed, and certified by the submission of the following:

1. Proof of occupancy in the form of a copy of a current utility bill; and

2. Statement of unit's continued use as primary residence of the owner.

B. In the event that a homeowner sells, transfers title, or discontinues residence in the developed/rehabilitated property for any reason, the loan becomes due and payable.

C. If a homeowner converts the property to a rental unit, or any commercial or nonresidential use, the loan is due and payable.

The loan is not transferable except under the following limited circumstances:

The transfer of the Property to the surviving joint tenant by devise, descent or operation of the law, on the death of a joint tenant;
A transfer of the Property where the spouse becomes an owner of the property; A transfer of the Property resulting from a decree of dissolution of marriage, legal separation or from an incidental property settlement agreement by which the spouse becomes an owner of the Property; or,
A transfer to an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

3.0. PROPERTY ELIGIBILITY

3.1. CONDITIONS
A. No unit will be eligible if a household’s income exceeds the prescribed income limits listed in Attachment C.

B. Units to be developed/rehabilitated must be located within the incorporated areas of the

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Sponsor’s jurisdiction.

C. Property must contain a legal residential structure intended for continued residential occupancy.

D. All repair work will meet Local Building Code standards.

4.0. THE PROGRAM LOAN

4.1. MAXIMUM AMOUNT OF PROGRAM ASSISTANCE
Deferred Payment Loans will be provided at zero interest to homeowners with existing ADU's for repairs or to construct a new ADU. The City will provide financing up to $40,000 per unit for eligible applicants.

4.2. AFFORDABILITY PARAMETERS FOR HOMEOWNERS
A. The maximum after-rehab value of a home shall be set at 100% of the current median sales price of a single-family home in the county in which the Program is located.

B. Total indebtedness against property shall not exceed 100 percent of the afterrehabilitation value as determined by an appraisal. An estimate of After-Rehab Value will be made prior to making a commitment of funds using the method outlined in Section 4.4.

C. Any bid within 10% of the Program Operator’s estimate may be selected, otherwise an explanation must be provided to the file for a bid selected exceeding 10% of the estimate.

4.3. RATES AND TERMS
Homeowners are eligible for Deferred Payment Loans (DPL), at zero interest, evidenced by a Promissory Note and secured by a Deed of Trust, with no payback required for 30 years unless the Borrower sells or transfers title or discontinues residence in the dwelling. Payments may be made voluntarily on a DPL, without penalty. Note: If it is determined by the Sponsor that repayment of a PLHA Program loan at the maturity date causes a hardship to the homeowner, the Sponsor may opt the following:
o Amend the note and deed of trust to defer repayment of the amount due at maturity, that is balance of the original principal plus the accrued interest, for up to an additional 30 years (at 0% additional interest). This may be offered one time; or, o Convert the debt at loan maturity; that is the balance of the original principal plus any accrued interest, to an amortized loan, repayable in 15 years at 0% additional interest.

A. In the event that a homeowner sells, transfers title, or discontinues residence in the developed/rehabilitated property for any reason, the loan shall become all due and payable.

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B. Loans are not assumable.

C. If a homeowner fails to maintain residence on the property, converts the property to a commercial or non-residential use, the loan becomes all due and payable.

D. As specified in the Loan Agreement, all applicants who participate in the Program must maintain the property at post-construction conditions for the term of the loan. Should the property not be maintained accordingly, the loan shall be considered in default and becomes all due and payable, and if necessary, foreclosure proceedings will be initiated. A method of inspection will be established by the Sponsor.

E. If a homeowner converts the developed/rehabilitated property to any residential-rental, commercial or non-residential use, the loan becomes all due and payable.

F. As specified in the Loan Agreement, all applicants who participate in the Program must maintain the property at post-rehabilitation/construction conditions for the term of the loan. Should the property not be maintained accordingly, the loan shall be considered in default and becomes all due and payable, and if necessary, foreclosure proceedings will be initiated. A method of inspection will be established by the Sponsor.

G. Loans are not assumable. The following transfers of interest shall not require the repayment of the PLHA Program loan:

1. transfer to a surviving joint tenant by devise, descent, or operation of law on the death of a joint tenant;

2. a transfer in which the transferee is a person who occupies or will occupy the property, which is:
(i) a transfer where the spouse becomes an owner of the property; (ii) a transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an owner of the property; or
(iii) a transfer into an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

4.4 GRANTS

4.5. APPRAISAL
A. The After-Rehab Value for rehabilitation projects is determined using the “Estimate of Value” method. The Sponsor or Program Operator determines estimates of value based on the sale prices of at least three (3) comparable properties, sold within the last six months (within one year of the assistance date, which is the date the promissory note is signed), and if possible, located within one mile of the subject property. The participants’ file will include

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the estimate of value and document the basis for the value estimates. The purpose of the “Estimate of Value” method is to determine that the combined loans will not exceed the maximum combined loan-to- value limit, as described in Section 4.2.A above. If three comparable properties cannot be found, or if there is any question regarding the after-rehab value, the ARV must be determined by a licensed appraiser, as described in Section 4.4.B. below.

B. A licensed appraiser determines the after-rehab value for rehabilitation projects, when the “Estimate of Value” method cannot be used. For rehabilitation projects, the appraiser determines the value of the unit with the rehabilitation building plans and specifications included. The cost of the appraisal will be included in the Borrower’s loan. The purpose of the appraisal is to determine that the after-rehab value of the housing unit will not exceed the applicable HOME Value Limit per HOME Program regulations (See Attachment C), and that the combined loans will not exceed the maximum combined loan-to- value limit, as described in Section 4.2.A above.

C. The After-Rehab Value for reconstruction/new construction projects is determined by a licensed appraiser. The After-Rehab Value for reconstruction projects is determined by an appraisal completed off the building plans and specifications for the new home. The cost of the appraisal will be included in the Borrower’s loan. The purpose of the appraisal is to determine that the combined loans will not exceed the maximum combined loan-to-value limit, as described in Section 4.2.A above.

4.6. INSURANCE

4.6.1. FIRE INSURANCE
The homeowner shall maintain fire insurance on the property for the duration of the Program loan(s). This insurance must be an amount adequate to cover all encumbrances on the property. The insurer must identify the Sponsor as Loss Payee for the amount of the Program loan(s). Evidence of this shall be provided to the Sponsor. Note: Funds cannot be used to pay insurance at any time.

4.6.2. FLOOD INSURANCE
For homes in a 100-year flood zone, the owner is required to maintain flood insurance in an amount adequate to secure the Program loan and all other encumbrances. This policy must designate the Sponsor as Loss Payee and a binder shall be provided to the Sponsor and maintained in the Borrower’s file. Note: Funds cannot be used to pay insurance at any time.

4.7. LOAN SECURITY
A. Loan security for all owner-occupied rehabilitation stick-built homes will be secured by the real property and improvements, and will also include a Deed of Trust, Promissory Note and Loan Agreement in favor of the Sponsor.

B. Entering a subordinate lien is acceptable. However, the Sponsor will not subordinate a

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first lien position once established.

5.0. PROGRAM LOAN SERVICING AND MAINTENANCE

5.1. PAYMENTS ARE VOLUNTARY
Borrowers may begin making voluntary payments at any time, without penalty.

5.2. RECEIVING LOAN REPAYMENTS
A. Program loan payments will be made to:

City of ATWATER
750 Bellevue Road
ATWATER, CA 95301
B. The Sponsor will be the receiver of loan payments or recapture funds and will maintain a financial record-keeping system to record payments and file statements on payment status. Payments shall be deposited and accounted for in the Sponsor’s appropriate Program Income/Reuse Account, as required. The Program Sponsor will accept loan payments from Borrowers prepaying deferred loans, from Borrowers making payments in full upon sale or transfer of the property, and homeowners of tenant occupied units. All loan payments are payable to the Sponsor. The Sponsor may at its discretion, enter into an agreement with a third party to collect and distribute payments and/or complete all loan servicing aspects of the Program.

5.3. LOAN SERVICING POLICIES AND PROCEDURES
See Attachment F for local loan servicing policies and procedures. While the attached policy outlines a system that can accommodate a crisis that restricts Borrower repayment ability, it should in no way be misunderstood: The loan must be repaid. All legal means to ensure the repayment of a delinquent loan as outlined in the Loan Servicing Policies and Procedures will be pursued.

5.4. LOAN MONITORING PROCEDURES
Homeowners will be required to submit each of the following to the Sponsor, annually, for the term of the loan, which will be reviewed and certified by the Sponsor or its designated Loan Servicing Agent at the time of annual occupancy verification per Attachment F:
• Proof of occupancy in the form of a copy of a current utility bill; • Statement of unit's continued use as a residence;
• Declaration that other title holders do not reside on the premises; • Verification that Property Taxes are current; and
• Verification of current required insurance policies.

5.5. DEFAULT AND FORECLOSURE
If an owner defaults on a loan, and foreclosure procedures are instituted, they shall be carried out according to the Program Foreclosure Policy adopted by the Sponsor, and

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attached to these guidelines as Attachment G.

5.6. SUBORDINATIONS
The Sponsor may approve a request to subordinate a loan, in order for the owner to refinance the property, under the following conditions:

A. The lien position of the Sponsor loan will remain the same or be advanced.

B. The new primary loan is no greater than the balance of the loan being refinanced, except the costs of refinancing the loan may be added to the principal balance.

C. The purpose of the new primary loan is to reduce the interest rate being paid and/or reduce the owner's payment.

D. The refinanced loan must have an impound account for taxes and insurances.

E. The refinancing terms must be acceptable to the Sponsor.

6.0. CONSTRUCTION

6.1. STANDARDS
A. All repair work will meet Local Building Code standards. The priority will be the elimination of health and safety hazards. Sponsor may also require elimination of code deficiencies.

However, if certain components of the house ADU/JADU are sound and were built to code prescribed at the time of installation, no repair or alteration will be made to those components.

B. Contracting Process

1. Contracting will be done on a competitive basis.

2. The homeowner will be the responsible agent, but the Sponsor and/or its Program Operator will prepare the work write-up, prepare and advertise the bid package, and assist the owner in negotiating the construction contract.

3. The Sponsor does not warrant any construction work, or provide insurance coverage.

C. Approved Contractors

1. Contractors are required to be licensed with the State of California, and be active and in good standing with the Contractors’ License Board and the Sponsor.

2. Contractors will be checked against the Federal System for Award Management (SAM.gov) for debarred status. No award will be granted to a contractor on the Excluded Parties List System (EPLS).

3. Contractors must have public liability and property damage insurance, and worker’s compensation, unemployment and disability insurance, to the extent required by State law.

4. Contractor must agree to comply with all federal and state regulations.

C. Sweat Equity Labor
The Sponsor does not allow sweat equity participation.

6.2. ELIGIBLE CONSTRUCTION COSTS
Development of new Accessory Dwelling Unit (ADU/JADU) or Rehabilitation of existing Accessory Dwelling Unit (ADU/JADU).

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“Rehabilitation” means, in addition to the definition in Section 50096 of the Health and Safety Code, repairs and improvements to a home necessary to correct any condition causing the home to be substandard pursuant to Section 1704 of Title 25, California Code of Regulations. Rehabilitation also includes room additions to alleviate overcrowding.

Rehabilitation also means repairs and improvements where necessary to meet any locallyadopted standards used in local rehabilitation Programs. Rehabilitation does not include replacement of personal property.

Rehabilitation includes reconstruction. Reconstruction is defined as the demolition and construction of a structure. The Sponsor and/or Program Operator must document that the reconstruction costs are less than the cost to rehabilitate the existing substandard housing.

This will be done using the State’s Test for Reconstruction (see AttachmentJ).

Additionally, funded projects the Sponsor must determine that the project’s value after reconstruction (housing and land combined) is less than the Maximum After- Rehabilitation Value for the Sponsor (see Attachment C).

The residential structure to be reconstructed must be a structure with cooking, eating, sleeping, and sanitation facilities which has been legally occupied as a residence within the preceding 12 months. Fifth wheels or recreational vehicles, for example, are not considered dwellings and therefore are not eligible under this Program.

Allowable rehabilitation\construction costs include:

C. Cost of building permits and other related government fees.

D. Cost of architectural, engineering, and other consultant services which are directly related to the development/rehabilitation of the property.

E. Staff and overhead costs directly related to carrying out the eligible activities described in Guidelines Section 301(a) are “activity costs” and not subject to the cap on “administrative costs.” Activity delivery fees are considered part of the total financing; however, are not part of the loan to the Borrower.

F. Rehabilitation will address the following issues in the order listed. Eligible costs are included for each item.

1. Health and Safety Issues
Eligible costs include, but are not limited to, energy-related improvements, lead-based paint hazard evaluation and reduction activities, improvements for handicapped accessibility, repair or replacement of major housing systems.

2. Code and Regulation Compliance

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Eligible Rehabilitation costs include, but are not limited to, additional work required to rehabilitate the ADU, and bring it into compliance with current building codes and regulations.

3. -

4. Rehabilitation Standards
All work related to health and safety conditions will meet Local Building Code standards. The priority will be the elimination of health and safety hazards and code compliance.

6.3. ELIGIBLE PROJECT COSTS/ACTIVITY DELIVERY COSTS
Examples of eligible project related costs for all expenses related to the paperwork for processing and insuring a loan application are listed below. • Appraisal
• Property Report/Title Insurance
• Building Plan
• Termite Report
• Land Survey
• Grading Plan
• Recording Fees
• Flood Insurance, as applicable
Costs are based on charges currently incurred by the Sponsor, or the Program Operator, for these products and/or services. Any cost increases charged to the Sponsor/Program Operator for these products and/or services will be passed on to the homeowner and included in the loan. All fees are subject to change and are driven by the market.

6.4. REPAIR CALLBACKS
Contractors will comply with State law regarding all labor and material warranties. All labor and material shall meet FHA minimum specifications.

7.0. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

7.1. AMENDMENTS
The Sponsor may make amendments to these Participant Guidelines. Any changes made shall be in accordance with federal and state regulations, shall be approved by the Sponsor’s Loan Committee and/or local governing body and submitted to HCD for approval.

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7.2. EXCEPTIONS
Any case to which a standard policy or procedure, as stated in the guidelines, does not apply or an applicant treated differently from others of the same class would be an exception.

7.2.1 PROCEDURES FOR EXCEPTIONAL CIRCUMSTANCES
A.The Sponsor or its Program Operator may initiate consideration of an exception and prepare a report. This report shall contain a narrative, including the Sponsor’s/Program Operator’s recommended course of action and any written or verbal information supplied by the applicant.

B. The Sponsor shall make a determination of the exception based on the recommendation of the Program Operator. The request can be presented to the Sponsor’s loan committee and/or governing body for decision.

8.0. DISPUTE RESOLUTION AND APPEALS PROCEDURES

8.1. PROGRAM COMPLAINT AND APPEAL PROCEDURE
Complaints concerning the Sponsor’s ADU/JADU Development and Repair Program should be made to the Program Operator first. If unresolved in this manner, the complaint or appeal shall be made in writing and filed with the Sponsor. The Sponsor will then schedule a meeting with the Sponsor’s Loan Review Committee. Their written response will be made within thirty (30) working days. If the applicant is not satisfied with the committee's decision, a request for an appeal may be filed with the local governing body. Final appeal may be filed in writing with HCD within one year after denial or the filing of the Project Notice of Completion.

8.2. GRIEVANCES BETWEEN PARTICIPANTS AND CONSTRUCTION CONTRACTOR Contracts signed by the contractor and the participant include the following clause, which provides a procedure for resolution of grievances:

Any controversy arising out of or relating to this Contract, or the breach thereof, shall be submitted to binding arbitration in accordance with the provisions of the California Arbitration Law, Code of Civil Procedure 1280 et seq., and the Rules of the American Arbitration Association. The arbitrator shall have the final authority to order work performed, to order the payment from one party to another, and to order who shall bear the costs of arbitration. Costs to initiate arbitration shall be paid by the party seeking arbitration. Notwithstanding, the party prevailing in any arbitration proceeding shall be entitled to recover from the other all attorney's fees and costs of arbitration.

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ATTACHMENT A
Title 25 Section 6914 Gross Income Inclusions
“Gross income” shall mean the anticipated income of a person or family for the twelvemonth period following the date of determination of income. “Income” shall consist of the following:
(a) Except as provided in subdivision (b), “Exclusions”, all payments from all sources received by the family head (even if temporarily absent) and each additional member of the family household who is not a minorshall be included in the annual income of a family. Income shall include, but not be limited to:
(1) The gross amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses;
(2) The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business); (3) Interest and dividends;
(4) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts;
(5) Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay;
(6) Public Assistance. If the public assistance payment includes any amount specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of:
(A) The amount of the allowance or grant exclusive of the amount specifically designated for shelter and utilities, plus
(B) The maximum amount which the public assistance agency could in fact allow for the family for shelter and utilities,
(7) Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts from persons not residing in the dwelling;

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All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the family or spouse.

Title 25 Section 6914 Gross Income Exclusions
(b) The following items shall not be considered as income:
(1) Casual, sporadic or irregular gift items;
(2) Amounts which are specifically for or in reimbursement of the cost of medical expenses; (3) Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlement for personal or property losses;
(4) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or payments to veterans, not used for the above purposes of which are available for subsistence are to be included in income;
(5) The special pay to a serviceman head of a family away from home and exposed to hostile fire;
(6) Relocation payments made pursuant to federal, state, or local relocation law; (7) Foster child care payments;
(8) The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is an excess of the amount actually charged the eligible household; (9) Payments received pursuant to participation of the following volunteer programs under the ACTION Agency:
(A)National Volunteer Antipoverty Programs which include VISTA, Service Learning Programs and Special Volunteer Programs.
(B)National Older American Volunteer Program for persons aged 60 and over which include Retired SeniorVolunteer Programs, FosterGrandparent Program, olderAmerican Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE).

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ATTACHMENT B
PART 5 ANNUAL INCOME NET FAMILY ASSET INCLUSIONS AND EXCLUSIONS This table presents the Part 5 asset inclusions and exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

Statements from 24 CFR Part 5 – Last Modified: January 2005 Inclusions

1. Cash held in savings accounts, checking accounts, safe deposit boxes, homes, etc. For savings accounts, use the current balance. For checking accounts, use the average 6-month balance.

Assets held in foreign countries are considered assets.

2. Cash value of revocable trusts available to the applicant.

3. Equity in rental property or other capital investments. Equity is the estimated current market value of the asset less the unpaid balance on all loans secured by the asset and all reasonable costs (e.g., broker fees) that would be incurred in selling the asset. Under HOME, equity in the family's primary residence is not considered in the calculation of assets for owner-occupied rehabilitation projects.

4. Cash value of stocks, bonds, Treasury bills, certificates of deposit and money market accounts.

5. Individual retirement, 401(K), and Keogh accounts (even though withdrawal would result in a penalty).

6. Retirement and pension funds.

7. Cash value of life insurance policies available to the individual before death (e.g., surrender value of a whole life or universal life policy).

8. Personal property held as an investment such as gems, jewelry, coin collections, antique cars, etc.

9. Lump sum or one-time receipts, such as inheritances, capital gains, lottery winnings, victim's restitution, insurance settlements and other amounts not intended as periodic payments.

10. Mortgages or deeds of trust held by an applicant.

Exclusions

1. Necessary personal property, except as noted in number 8 of Inclusions, such as clothing, furniture, cars and vehicles specially equipped for persons with disabilities.

2. Interest in Indian trust lands.

3. Assets not effectively owned by the applicant. That is, when assets are held in an individual's name, but the assets and any income they earn accrue to the benefit of someone else who is not a member of the household and that other person is responsible for income taxes incurred on income generated by the asset.

4. Equity in cooperatives in which the family lives.

5. Assets not accessible to and that provide no income for the applicant.

6. Term life insurance policies (i.e., where there is no cash value).

7. Assets that are part of an active business. "Business" does not include rental of properties that are held as an investment and not a main occupation.

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ATTACHMENT C

HCD INCOME LIMITS FOR MERCED

COUNTY AREA
*effective 6.15.2023
Area Median Income 1 2 3 4 5 6 7 8
Extremely Low-Income 30% $17,350 $19,800 $24,860 $30,000 $35,140 $40,280 $45,420 $50,560 Very Low-Income 50% $28,900 $33,000 $37,150 $41,250 $44,550 $47,850 $51,150 $54,450 Low Income 60% $46,200 $52,800 $59,400 $65,950 $71,250 $76,550 $81,800 $87,100 Moderate Income 80% $70,400 $80,450 $90,500 $100,550 $108,600 $116,650 $124,700 $132,750 *income limits are subject to change annually https://www.hcd.ca.gov/grants-and-funding/income-limits/stateand-federal-income-rent-and-loan-value-limits

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ATTACHMENT D

ADU/JADU HOUSING REHABILITATION MARKETING PLAN

SUMMARY
The Sponsor will continue its efforts to market the ADU/JADU Housing Rehabilitation Program in a manner that will reach all community members.

All marketing related to the ADU/JADU Housing Rehabilitation Program is publicized in both English and Spanish. All marketing materials include information identifying the Sponsor’s commitment to fair housing laws and affirmative marketing policy, and are widely distributed.

Equal opportunity is emphasized in written materials and oral presentations. A record is maintained by the Sponsor identifying what marketing materials are used, and when and where they are distributed.

Forms of marketing may include fliers, brochures, newspaper ads, articles and public service announcements. Fliers and brochures are distributed at local government buildings, other public buildings and through the mail, as well as to businesses that assist those not likely to apply without special outreach. Advertisements and articles are published in newspapers that are widely circulated within the community.

Established working relationships with local lending agencies also aid in informing the public by facilitating the distribution of informational fliers to households seeking financial assistance for repairs that are unable to obtain conventional financing.

Informational meetings are offered to potential participants to explain Program requirements.

Often, minimal formal outreach efforts are required as the need for assistance generally exceeds funds available. However, marketing measures are actively performed in order to maintain a healthy interest list.

Characteristics on all applicants and participants are collected and compared with the Sponsor’s demographics. Should the Sponsor find that there are underserved segments of the population, a plan to better serve them will be developed and implemented.

MARKETING FORMS
Fliers Brochures
Newspaper Ads and Articles Public Service Announcements Public Informational Meetings

MARKETING VENUES
Local Government Buildings Local Public Services Buildings Private Businesses Lending Agencies Real Estate Offices Newspaper
Radio Mail

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fCity of ATWATER ADU/JADU Housing Rehabilitation Guidelines

ATTACHMENT E

LOAN SERVICING POLICIES AND PROCEDURES FOR THE CITY OF ATWATER The City of ATWATER, hereafter called “Sponsor,” has adopted these policies and procedures in order to preserve itsfinancial interest in properties whose “Borrowers” have been assisted with public funds. The Sponsor will, to the greatest extent possible, follow these policies and procedures, but each loan will be evaluated and handled on a case-by-case basis. The Sponsor has formulated this document to comply with state and federal regulations regarding the use of these public funds and any property restrictionsthat are associated with them.

The Sponsor may, at its discretion, enter into an agreement with a third party to collect and distribute payments and/or complete all loan servicing aspects of the Program.

The policies and procedures are broken down into the following areas: 1) making required monthly payments or voluntary payments on a loan’s principal and interest; 2) required payment of property taxes and insurance; 3) required Request for Notice of Default on all second mortgages; 4) loans with annual occupancy restrictions and certifications 5) required noticing and limitations on any changes in title or use of property; 6) required noticing and process for requesting a subordination during a refinance; 7) processing of foreclosure in case of default on the loan; 8) the Sponsor as Senior Lienholder; and 9) processing of demands and payoffs.

1. Loan Repayments:

The Sponsor will collect monthly payments from those Borrowers who are obligated to do so under Notes that are amortized promissory notes. Late fees will be charged for payments received after the assigned monthly due date.

For Notes that are deferred payment loans, the Sponsor must accept voluntary payments on the loan. Loan payments will be credited to principal. The Borrower may repay the loan balance at any time with no penalty.

At time of completion, the funds expended on a housing unit will be compared to the Note amount. Any funds not expended at completion will be considered a “principal reduction” and will be applied to the principal loan balance thereby lowering the amount owed by the Borrower. Borrowers will receive a closeout letter after the 30-day retention period indicating the amount of their Note, the credit, and the ending balance on their loan. A copy of this credit along with the final cost break-down will be retained in the Borrower’s file.

The State HOME Program “HOME” has selected the Recapture option of ensuring the

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affordability of housing acquired by HOME-assisted homebuyers.

There is no affordability period in the Sponsor’s ADU/JADU Housing Rehabilitation Program; therefore, all payments and payoffs received are Program Income.

2. Payment of Property Taxes and Insurance:

As part of keeping the loan from going into default, Borrower must maintain property insurance coverage naming the Sponsor as loss payee. If Borrower fails to maintain the necessary insurance,the Sponsormay use non-grant funds to take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower’s new insurance.

When a property is located in a 100-year flood plain, the Borrower will be required to carry the necessary flood insurance. A certificate of insurance for flood and for standard property insurance naming the Sponsor as loss payee will be required at close of escrow. The Sponsor must verify the insurance on an annual basis.

Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes, the Sponsor may pay the taxes current and add the balance of the tax payment plus any penalties to the balance of the loan. Wherever possible, the Sponsor encourages Borrower to have impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment.

3. Required Request for Notice of Default:

When the Borrower’s loan is in second position behind an existing first mortgage, it is the Sponsor's policy to prepare and record a "Request for Notice of Default" for each senior lien in front of Sponsor’s loan. This document requires any senior lienholder listed in the notice to notify the Sponsor of initiation of a foreclosure action. The Sponsor will then have time to contact the Borrower and assist them in bringing the first loan current, if possible. The Sponsor can also monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved. When the Sponsor is in a third position and receives notification of foreclosure from only one senior lienholder, it is in their best interest to contact any other senior lienholders regarding the status of their loans.

4. Annual Occupancy Verification:

On owner-occupant loans, the Sponsor requires that Borrowers submit utility bills and/or other documentation annually to prove occupancy during the term of the loan.

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Occupancy will be verified, reviewed and certified by the submission of the following:
o Proof of occupancy in the form of a copy of a current utility bill; and o Statement of unit's continued use as primary residence of the owner. o Declaration that other title holders do not reside on the premises; o Verification that Property Taxes are current; and
o Verification of current required insurance policies.

5. Required Noticing and Restrictions on Any Changes of Title or Occupancy:

In all cases where there is a change in title or occupancy or use, the Borrower must notify the Sponsor in writing of any change. Sponsor, or its designated Loan Servicing Agent, and Borrower will work together to ensure the property is kept in compliance with the original Program terms and conditions such that it remains available as an affordable home for lowincome families.

Change from owner-occupant to owner-occupant occurs at a sale. When a new owneroccupant is not low-income, the loan is not assumable and the loan balance is immediately due and payable. If the new owner-occupant qualifies as low-income, the purchaser may either pay the loan in full or assume all loan repayment obligations of the original owneroccupant, subject to the approval of the Sponsor’s Loan Committee (depends on the HCD Program).

If a transfer of the property occurs through inheritance, the heir (as owner-occupant) may be provided the opportunity to assume the loan at an interest rate based on household size and household income, provided the heir is income eligible. If the heir intends to occupy the property and is not low-income, the balance of the loan is due and payable. If the heir intends to act as an owner-investor, the balance of the loan is due and payable. All such changes are subject to the review and approval of the Sponsor’s Loan Committee.

Change from owner-occupant to owner-investor occurs when an owner-occupant decides to move out and rent the assisted property, or if the property issold to an investor. If the owner converts any assisted unit from owner-occupied to rental, the loan is due in full.

Conversion to use other than residential use is not allowable where the full use of the property is changed from residential to commercial or other. In some cases, Borrowers may request that the Sponsor allow for a partial conversion where some of the residence is used for a business but the household still resides in the property. Partial conversions can be allowed if it isreviewed and approved by any and all agencies required by local statute. If the use of the property is converted to a fully non-residential use, the loan balance is due and

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payable.

The following transfers of interest shall not require the repayment of the ADU/JADU Development & Repair Program loan:

A.transfer to a surviving joint tenant by devise, descent, or operation of law on the death of a joint tenant;
B. a transfer, in which the transferee is a person who occupies or will occupy the property, which is:
1) a transfer where the spouse becomes an owner of the property; 2) a transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an owner of the property; or
3) a transfer into an inter vivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

6. Requests for Subordinations:

When a Borrower wishes to refinance their existing first mortgage, they must submit a subordination request to the Sponsor. The Sponsor will subordinate their loan only when there is no “cash out” as part of the refinance. No cash out means there are no additional charges on the transaction above loan and escrow closing fees. There can be no third-party debt payoffs or additional encumbrances on the property above traditional refinance transaction costs. The refinance should lower the existing housing cost ofthe household. The total indebtedness on the property should not exceed the current market value except when the Borrower is obtaining a HARP II or other similar federally approved refinance loan. If the HARP II or other similar financing is approved and meets all other requirements, combined Loan-To- Value will not be considered when reviewing the subordination request.

Also, the loan must:

A.be fully amortized and have a fixed interest rate that does not exceed the current market rate, as established by an index identified in the most recent NOFA; B. not have a temporary interest rate buy-down;
C. have a term “all due and payable” that matures prior to or concurrently with the maturity date of the Promissory Note. Therefore, the maturity date of the existing Promissory Note should be modified to coincide with the maturity date of the new first mortgage; and, D.not have a balloon payment due before the maturity date of the Program loan.

Upon receiving the proper documentation from the refinance lender, the request will be considered by the loan committee for review and approval. Upon approval, the escrow company will provide the proper subordination document for execution and recordation by the Sponsor.

7. Process for Loan Foreclosure:

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Upon any condition of loan default: 1) non-payment; 2) lack of insurance or property tax payment; 3) change in title or use without approval; or 4) default on senior loans; the Sponsor, or its designated Loan Servicing Agent, will send out a letter to the Borrower notifying them of the default situation. If the default situation continues, the Sponsor may start a formal process of foreclosure.

When a senior lienholder starts a foreclosure process and the Sponsor is notified via a Request for Notice
of Default, the Sponsor, who is the junior lienholder, may cancel the foreclosure proceedings by "reinstating" the senior lienholder. The reinstatement amount or payoff amount must be obtained by contacting the senior lienholder. This amount will include all delinquent payments, late charges and fees to date. Sponsor must confer with Borrower to determine if, upon paying the senior lienholder current, the Borrower can provide future payments. If this is the case, then the Sponsor may cure the foreclosure and add the costs to the balance of the loan with a Notice of Additional Advance on the existing note.

If the Sponsor determines, based on information on the reinstatement amount and status of Borrower, that bringing the loan current will not preserve the loan, then staff must determine if it is cost effective to protect their position by paying off the senior lienholder in total and restructure the debt such that the unit is made affordable to the Borrower. If the Sponsor does not have sufficient funds to pay the senior lienholder in full, then they may choose to cure the senior lienholder and foreclose on the property themselves. As long as there is sufficient value in the property, the Sponsor can afford to pay for the foreclosure process and pay off the senior lienholder and retain some or all of their investment.

If the Sponsor decides to reinstate, the senior lienholder will accept the amount to reinstate the loan up until five (5) days prior to the set "foreclosure sale date." This "foreclosure sale date" usually occurs about four (4) to six (6) months from the date of recording of the "Notice of Default." If the Sponsor fails to reinstate the senior lienholder before five (5) days prior to the foreclosure sale date, the senior lienholder would then require a full pay off of the balance, plus costs, to cancel foreclosure. If the Sponsor determines the reinstatement and maintenance of the property not to be cost effective and allows the senior lienholder to complete foreclosure, the Sponsor's lien may be eliminated due to insufficient sales proceeds.

8. Sponsor as Senior Lienholder
When the Sponsor is first position as a senior lienholder, active collection efforts will begin on any loan thatis 31 ormore daysin arrears. Attempts will bemade to assistthe homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the Sponsor may consider foreclosure. Sponsor’s staff will consider the following factors before initiating foreclosure:

A.Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary?
B. Can the Borrower refinance with a private lender and pay off the Sponsor?

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C. Can the Borrower sell the property and pay off the Sponsor? D.Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
E. Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and marketing costs?
If the balance is substantial and all of the above factors have been considered, the Sponsor may opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty-day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the Sponsor to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

At the end of thirty days, the Sponsor should contact a reputable foreclosure service or local title company to prepare and record foreclosure documents and make all necessary notifications to the owner and junior lienholders. The service will advise the Sponsor of all required documentation to initiate foreclosure (Note and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the Sponsor informed of the progress of the foreclosure proceedings.

When the process is completed, and the property has "reverted to the beneficiary" at the foreclosure sale, the Sponsor could sell the home themselves under a homebuyer Program or use it for an affordable rental property managed by a local housing authority or use it for transitional housing facility or other eligible use. The Sponsor could contract with a local real estate broker to list and sell the home and use those funds for Program income-eligible uses.

9. Process Demands and Payoffs:

Requests for demands and payoffs will be processed within the time frame allowed by law.

Sponsor or its designated Loan Servicing Agent is proficient in performing the related calculations. Reconveyance and lien releases would be prepared for processing by a qualified Title Company.

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ATTACHMENT F
CITY OF ATWATER’S FORECLOSURE POLICY
Sponsor As Junior Lienholder
It is the City of ATWATER’s (Sponsor’s) policy to prepare and record a "Request for Notice" on all junior liens (any lien after the first position) placed on properties financed by a loan.

This document requires any senior lienholder to notify the Sponsor of initiation (recordation of a "Notice of Default") of a foreclosure only. This is to alert the junior lienholder that they are to monitor the foreclosure with the senior lienholder. When the Sponsor is in a third position and receives notification of foreclosure from only one senior lienholder, it would be in their best interest to contact both senior lienholders regarding the status of their loans.

The junior lienholder may cancel the foreclosure proceedings by "reinstating" the senior lienholder. The reinstatement amount must be obtained by contacting the senior lienholder.

This amount will include all delinquent payments, late charges, advances (fire insurance premiums, property taxes, property protection costs, etc.), and foreclosure costs (fees for legal counsel, recordings, certified mail, etc.)
Once the Sponsor has the information on the reinstatement amount, staff must then determine if it is cost effective to protect their position by reinstating the senior lienholder, keeping them current by submitting a monthly payment thereafter, foreclosing on the property possibly resulting in owning the property at the end of foreclosure, protecting the property against vandalism, and paying marketing costs (readying the home for marketing, paying for yard maintenance, paying a real estate broker a sales commission).

Sponsor As Senior Lienholder
When the Sponsor is in a first position, or the senior lienholder, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assist the homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which

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time the Sponsor may considerforeclosure. Sponsor staff will consider the following factors before initiating foreclosure:
- Can the loan be cured (brought current or paid off) by the owner without foreclosure? - Can the owner refinance with a commercial lender and pay off the Sponsor? - Can the owner sell the property and pay off the Sponsor? - Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
- Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and marketing costs?
If the balance is substantial and all of the above factors have been considered, the Sponsor may opt to initiate foreclosure. The owner must receive, by certified mail, a thirty-day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the Sponsor to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

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ATTACHMENT G: CERTIFICATION OFOCCUPANCY CITY OF ATWATER I/We declare as follows:
(Please Print Occupant/Borrower’s Name(s))
That I/we am/are currently occupying as my/our principal place of residence the real property commonly known as:
(Address)
(City, State, Zip code)
Daytime Phone Number:

Executed on , 20 , at , CA (Date)
(City)
I/We declare under penalty of perjury that the foregoing is true and correct. Signature(s) of all occupants:

Occupant:

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ATTACHMENT H

HOUSING REHABILITATION/RECONSTRUCTION PROGRAM CONTRACTOR GUIDELINES

AND INFORMATION SHEET

SELF-HELP ENTERPRISES
Housing Rehabilitation/Reconstruction Program Contractor Guidelines and Information Sheet
Introduction
The mission of Self-Help Enterprises (SHE) is to work together with low-income families to build and sustain healthy homes and communities.

Though known as a top agricultural production region, the San Joaquin Valley has among the highest poverty rates in the State of California with many rural, unincorporated communities lacking adequate housing, water and sewer services. In particular, the people who provide the source of labor for the agricultural fields can find little except substandard housing in existing stock, and have insufficientincome to qualify for standard new home loans. Similarly, the low income, elderly, and handicapped often find themselves trapped in substandard housing. Through our programs, staff works with cities, counties and residents to help meet the needs of our participants and the communities they call home.

SHE appreciates your interest in improving the housing conditions of low-income families in the San Joaquin Valley. It is our hope that together we can realize the dream of safe and decent housing for the less fortunate in our community.

A. General Program Information
The aim of the ADU/JADU Housing Rehabilitation/Reconstruction Program is to repair or replace houses making life-safety and sanitary upgrades underthe standards of the California Building Code (CBC) and the requirements of the State and/or Federal funding sources.

To accomplish this, Self-Help Enterprises (SHE):

1. Assists the jurisdiction to apply for funds providing low-interest financing to eligible Owners sothat they can afford to rehabilitate or reconstruct their home or rental unit;

2. Contracts with the jurisdiction to provide technical assistance forthe financial and construction aspects of the program; and

3. Keeps projects on schedule, running smoothly, and when problems arise, works with all parties to swiftly resolve those problems.

B. Work Standards

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The work must meet all applicable building codes and be done in a competent manner. We expect professional quality. Everything must be functional, visually acceptable, and be built to California Building Performance Guidelines for Residential Construction Standards.

C. Contractor Eligibility

1. Contractors must be licensed in the State of California as a Class B General Contractor and their license must be in good standing with the Contractors’ State Licensing Board;

2. California law requires Contractors have a minimum of $1,000,000.00 liability insurance, worker’s compensation, and a valid Contractor Bond. Evidence of these must be provided prior to entering into a Construction Contract and insurance must be in force throughout the term of the Contract;

3. Contractors will be checked against the Federal System for Award Management (SAM.gov) for debarred status. Contractors listed on the Excluded Parties List System (EPLS)are ineligible;

4. Contractors must complete an application;

5. Contractors may be asked to participate in project orientation; and

6. Contractors will receive an evaluation after every project.

D. Contractor Suspension/Elimination from Bid List
A Contractor will be moved to the Inactive Contractor List for the reasons identified below and/or if a performance evaluation results in a Below Standard rating. If not permanently eliminated, a Contractor can submit a request to be reinstated to Active status upon correction of the issue or following the time period found in parenthesis by each reason.

1. Contractor fails to return the annual request for confirmation of interest in remaining on the Active Contractor List (Upon Receipt of Confirmation of Interest)

2. Contractor’s license is no longer valid (Upon Proof of Correction)

3. Inability to acquire insurance (Upon Proof of Correction)

4. Failure to finish one or more projects in the time specified in the Contract (One Year)

5. Failure to prove the knowledge and/or ability to perform the work required of any given Contract per the California Building Code (One Year AND Upon Proof of Correction)

6. Quality of work does not meet specifications in the Contract (One Year)

7. Failure to resolve legitimate complaints about the workmanship and/or materials (Permanent Elimination)

8. Evidence of financial problems (One Year AND Proof of Positive Credit/Credit Report)

9. Withdrawal of bids and/or failure to attend bid tours (Six Months)

10. Pressuring Owners to choose a specific Contractor; promising rebates, kickbacks, or additional work not included in the bid documents, or otherwise trying to circumvent the bid process in an unethical or illegal manner (Permanent Elimination)

11. Failure to disclose that the Contractor, or an employee of the Contractor, is the Owner of, or has a financial interest in, the property the Contractor is rehabilitating (Permanent Elimination)

12. Failure to comply with established jurisdiction guidelines and/or standards (Permanent Elimination)

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E. Federal/State Requirements
The paperwork required (contracts, bid procedures, payment requisition, etc.) is designed to protect the Contractor’s and Owner’s interests, and it is far less complicated than the typical federally-funded project.

Three requirements to take note of are:

1. Equal opportunity laws govern the program. Discriminatory practices in the employment of individuals based on race, creed, color, gender, age, religion, or national origin are unacceptable;

2. No jurisdiction or SHE employee can have any direct or indirect financial interest in the work to be performed and cannot have any financial dealings with Contractors or Owners involved in the program; and

3. Neither a Contractor, nor their employee(s) can be the Owner of or have a financial interest in the property, except as an Owner-Builder.

F. Scope of Work
The Owner, working with SHE staff and jurisdiction inspectors, decides on the work. This is specified in the bid documents and any drawings needed.

G. Bid/Contractor Selection
When a home comes up for bid in the area(s) you requested, your name/company will be submitted with other contractors to the family for consideration. If the family selects your name, you will be contacted by a SHE Rehabilitation Specialist to attend a bid tour. Owners have the right to exclude Contractors from the list without justification, and they may request that other qualified Contractors be added. Contractors will be notified via telephone and/or in writing (email, fax, etc.) at least one week prior to each bid tour.

1. Contractors must develop a proven performance record to be awarded multiple contracts.

A Contractor develops a proven performance record upon completion of the following steps:
a. All new Contractors who have been awarded their first contract under the Housing Rehabilitation Programs operated by SHE are not eligible to receive additional contracts until the awarded contract is completed and project performance is evaluated by the jurisdiction’s building official or building inspector and SHE’s Rehabilitation Construction Manager or Rehab Specialist (see attached Contractor Project Performance Evaluation). b. After completion and positive evaluation of the first contract, a Contractor may be awarded two contracts but will not be eligible to receive additional contracts until one or both of the two awarded contracts are completed and evaluated.
c. Following the completion of three, positively evaluated contracts, a Contractor is considered to have established a proven performance record. Once a Contractor establishes a proven performance record, that Contractor is eligible to bid and receive multiple contracts.

2. Contractors cannot submit a bid on any property in which they have a vested interest. Such a Contractor may act as an Owner-Builder, subject to standard construction procedures. (Owner- Builders are reimbursed for purchased materials which are verified by invoice/receipt and used on the project, but they are not reimbursed for labor.

Reimbursement occurs after the work is completed, inspected by the Building Department as required/applicable, and verified by a SHE Rehabilitation Specialist).

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3. Homeowners are encouraged to accept the lowest reasonable bid. Reasonableness is determined by comparing the bidsreceivedwith the cost estimate prepared by the SHE Rehab Specialist. Bidsshould be within 10% of SHE’s cost estimate.

4. The total bid amount is non-confidential and available for everyone to see. However, the itemized amounts for each part of the work required with the bid are confidential.

5. Construction Contract is between the Owner and Contractor. Neither the jurisdiction nor SHE is a party to the Contract. The Owner pays for all work specified in the Contract from the loan which he or she has received.

H. Change Orders
All changes in the scope of work must be in writing and approved by the Owner, Contractor, SHE Rehab Specialist, and the jurisdiction. No changes to the scope of work should be handled without a written change order. It is not a sound business practice. The Contractor has no guarantee of payment without an approved, written change order.

I. Loan Funds
Loan funds are safe. A construction account is established with SHE for each project. Before the project starts, the loan funds are on deposit. Since no money can be withdrawn without authorization by the Owner and review by SHE, you can be assured that funds are available to cover the amount of the Contract.

J. Payment
Contractor submits an invoice for a progress payment based on work completed. The invoice must be inspected and approved by the Owner and SHE’s Rehab Specialist prior to payment of the invoice. Generally a contractor will receive payment by mail within two (2) to three (3) weeks after submitting an invoice.

Ten Percent (10%) of each invoice will be withheld and paid to the Contractor thirty-five days after the Notice of Completion has been recorded and all paperwork has been submitted and pick up/punch list work completed.

We look forward to talking to you more about this opportunity. Please feel free to call the office if you would like more information.

MelissaValdez
Manager – Housing Rehabilitation 559-802-162

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CONTRACTOR PROJECT PERFORMANCE EVALUATION INSTRUCTIONS
I. Introduction
Contractor performance is defined as how a contractor carries out the obligations of the contract. This includes all requirements stated in the contract scope of work, provisions, and SHE’s General Specifications, adherence to the budget or price, and the provision of customer service. The purpose of this document is to establish a standardized process for Self-Help Enterprises (SHE) to identify, document, and communicate performance with contractors and other program, SHE, and City staff. The process used provides staff the ability to identify performance issues, if any, as they arise. The performance evaluation and rating process provides feedback to contractors with below standard, standard, and above standard performance.

Performance evaluations will occur at the end of the life of the contract, no later than 30 calendar days following the final walk-through, clearance of any punch list items, or submission of the contractor’s final invoice, whichever occurs later. SHE will email or mail a copy of the results of the evaluation to the contractor for review and comment. The evaluation process is NOT a collaborative process between the contractor and staff.

Contractors do not participate in the evaluation and rating process. The purpose for sharing the evaluations with the contractor is to provide feedback to the contractor on performance.

All evaluation results will be recorded by SHE to determine eligibility, and Active or Inactive status, of the contractor for future contracting.

II. General Instructions
A.Contractor Notification
Contractor should be made aware of the evaluation process prior to receiving the results of the evaluation. Contractors attending a bid tour will receive a copy of this document to explain the purpose of the evaluation, process, and rating system. Contractors requesting additional information about the evaluation process will be instructed to contact SHE directly.

B. Evaluation Timeline
Performance evaluations must be completed no later than 30 calendar days after the final walk- through, clearance of any punch list items, or submission of the contractor’s final invoice, whichever occurs later. During the 30 calendar days, the evaluation is conducted, the results are sent to the contractor and the contractor is provided 14 calendar days to review the results and submit comments to SHE. There is some flexibility of this time line for unforeseen or unusual circumstances (e.g., a death in the family).

III. Evaluation Process
The staff member(s) conducting the evaluation must be familiar with the contract and the contractor’s performance. Unless otherwise stated in writing, the jurisdiction’s building official or building inspector and SHE’s Rehabilitation Construction Manager or Rehab Specialist will perform the performance evaluation. These individuals are referred to as the

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“Evaluators” in performance evaluation related materials.

IV. Below Standard Ratings & Disputes
Performance evaluations may result in a Below Standard rating. If this occurs, the Evaluators will move the contractor from the Active Contractor List to the Inactive Contractor List with reasons noted and send the contractor a letter of explanation along with the copy of his or her evaluation results.

Regardless of the rating given, a contractor may disagree with the evaluation/rating. A contractor must dispute his or her evaluation by submitting comments to SHE within 14 days of receiving his or her copy of the evaluation results. Upon receipt of a dispute, the Evaluators will review the contractor’s comments and respond to the contractor by elaborating on the reasons for the rating given.

V. Evaluation Category Definitions and Factors
The seven categories listed below are used by SHE to assess each contractor’s performance during the contract period. Each evaluation category is described and examples of possible factors provided. Factors listed below that are not applicable can be removed from the list and replaced with applicable factors developed by the Evaluators. While factors can be customized, the descriptions CANNOT.

Each contract is unique and the Evaluators should utilize contract specific factors to evaluate performance under each category. This necessary flexibility may be confusing to contractors and will require thoughtful explanation. If the contractor requires clarification or additional information about the categories or evaluation process, they may contact SHE directly.

A.Quality: The contractor achieved desired outcomes with a minimum of avoidable errors and problems. Work met the requirements, expectations, or desired outcomes as set forth in the contract/scope of work. The work was accurate and complete. The work was done in an efficient and effective manner.

Factors:
• Overall compliance – the contractor complied with the terms and conditions (to include program and funding requirements) of the contract and showed an understanding of agency’s standards and expectations.
• Conformity to specifications – the product or service conformed to the specifications identified in the original solicitation and contractual agreement. The product performed and/or the services were provided as expected.
• Reliability – the rate of product failure was within reasonable limits or repairs and rework was acceptable.
• Durability – reasonable period of time lapses before replacement is necessary. • Support – available from the contractor in a reasonable period of time and met the need for assistance.

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• Warranty – reasonable length and provisions of warranty protection offered and problems resolved in a timely fashion.
• State-of-the-art product/service – The contractor offered products and/or services consistent with industry standards. The contractor consistently refreshes product life by adding enhancements.

B. Timeliness: The contractor performed work within the time frames identified or specified in the contract/scope of work and kept the project on schedule.

Factors:
• The contractor delivered product and/or services by date agreed to in the contract. • The contractor met timelines for the submission of deliverables such as reports, plans, invoices, etc.
• The contractor responded/replied to requests for information or assistance in a reasonable period of time.
• The contractor’s average delivery time was comparable to that of other contractors for similar products and/or services.

C. Price/Budget: The contractor effectively managed costs and the value of the product and/or services received supported the costs. The contractor adhered to budget as specified in the contract/scope of work.

Factors:
• Contractor’s invoices were accurate with appropriate backup documentation. • Estimates did not vary from the final invoice.
• There were a low number of variances from the initial agreed to prices and the costs stated on received invoices.
• The contractor was sensitive to costs and demonstrated respect for funding and the agency’s needs.

D.Business Relations/Customer Service: The degree to which the contractor was professional and respectful in its business approach and interactions with the agency.

Factors:
• The contractor was courteous, cooperative, and had a professional approach in all forms of communication.
• The contractor handled complaints efficiently and effectively. • The contractor was knowledgeable about the project and/or had the expertise to provide assistance as requested.
• The contractor managed change effectively.
• The contractor attempted to resolve problems in a timely manner and followed up with a status report.
• The contractor provided technical support for maintenance, repair, and installation situations. Technical instructions, documentation, and general information was also provided.
• The contractor provided training on the effective use of its products or services.

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E. Deliverables/Requirements: The degree to which the contractor was compliant in meeting the standards of contract requirements and deliverables.

Factors:
• All deliverables submitted were complete, accurate, and submitted within the required timeline using required forms or format, if applicable. • Requirements were demonstrated and/or documented.

F. Safety: The degree to which the contractor mitigated and demonstrated freedom from risk of injury, danger, damage, or loss of life or property.

Factors:
• The contractor complied with all Federal, State, and local laws and regulations concerning the health and safety of workers, the general public, and personal property. • Contractor’s safety record for the project.

G.Dependability: The degree to which contractor demonstrated trustworthiness and reliability.

Factors:
• The contractor was fair, honest, and reasonable in interactions with the agency. • The contractor demonstrated consistency in business operations. • The contractor was sincere in efforts to deliver a quality product and/orservices. • The contractor followed through on agreements made with the program/agency.

VI. Contractor Performance Rating Definitions and Factors The following three ratings make up the evaluation rating structure. These rating definitions and factors CANNOT be customized.

A.Below Standard: Contractor performance has been less than standard or satisfactory. This rating encompasses contractors whose performance does not consistently meet expectations defined in the contract/scope of work.

Factors:
• Contractor performance does not consistently meet expectations defined in the contract. • Close supervision of the contractor was required to progress the work. • Work was unsatisfactory and consistently failed to meet expectations. • Lack of cooperation.
• Most performance requirements were not met.
• Significant cost overruns.
• Many schedule slips with negative cost impact.
• Lack of user satisfaction.

B. Standard: Contractor has met all specifications and requirements. This rating includes a range of expected performance as stated in the contract/scope of work to support the project. Factors:
• Contractor exhibits competency in the assignments and consistently meets the desired

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expectations of the project.
• Contractor meets standards and objectives and all performance requirements. • Contractor sometimes exceeds expectations.
• Contractor met overall price.
• Contractor met expectations.
• Deliveries were on time.
• Project schedule was not impacted.
• Adequate user satisfaction.

C.Above Standard: Contractor performance exceeds standard or satisfactory. This rating represents consistent and exceptional performance or consistently superior achievement beyond regular assignments and expectations as stated in the contract/scope of work.

Factors:
• Meeting and exceeding performance requirements.
• Significant positive impact to the project.
• Reduced costs while meeting contract requirements.
• All deliveries on time with some arriving early.
• Significantly exceeded expectations.
• High user satisfaction.
• Highly responsive and proactive.

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VII. CONTRACTOR PERFORMANCE EVALUATION

CONTRACTOR PROJECT PERFORMANCE EVALUATION
File #: Contractor Name: Project:

License #: Project Address:

Project Address: City/State/Zip: City/State/Zip:

Below
Standard Standard
Above
Standard
Overall Rating:

1. Quality

2. Timeliness
Original Contract Completion Date:

Actual Contract Completion Date:

3. Price/Budget
Original Contract Amount: $
Final Contract Amount: $

4. Business Relations/Customer Service

5. Deliverables/Requirements

6. Safety

7. Dependability
Evaluator Information:

Printed
Name:

Organization
:

Title: Address:

City/State/Zi
p:

Signature/Date:

Comments:

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PERFORMANCE FACTORS

1. Quality: The contractor achieved desired outcomes with a minimum of avoidable errors and problems. Work met the requirements, expectations, or desired outcomes as set forth in the contract/scope of work. The work was accurate and complete. The work was done in an efficient and effective manner.

FACTORS:

Overall compliance – the contractor complied with the terms and conditions (to include program and funding requirements) of the contract and showed an understanding of agency’s standards and expectations
Conformity to specifications – the product or service conformed to the specifications identified in the original solicitation and contractual agreement.

The product performed and/or the services were provided as expected Reliability – the rate of product failure was within reasonable limits or repairs and rework was acceptable
Durability – reasonable period of time lapses before replacement is necessary Support – available from the contractor in a reasonable period of time and met the need for assistance
Warranty – reasonable length and provisions of warranty protection offered and problems resolved in a timely fashion
State-of-the-art product/service – The contractor offered products and/or services consistent with industry standards. The contractor consistently refreshes product life by adding enhancements

2. Timeliness: The contractor performed work within the time frames identified or specified in the contract/scope of work and kept the project on schedule.

FACTORS:

The contractor delivered product and/or services by date agreed to in the contract
The contractor met timelines for the submission of deliverables such as reports, plans, invoices, etc.

The contractor responded/replied to requests for information or assistance in a reasonable period of time
The contractor’s average delivery time was comparable to that of other contractors for similar products and/or services

3. Price/Budget: The contractor effectively managed costs and the value of the product and/or services received supported the costs. The contractor adhered to budget as specified in the contract/scope of work.

FACTORS:

Contractor’s invoices were accurate with appropriate backup documentation

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Estimates did not vary from the final invoice
here were a low number of variances from the initial agreed to prices and the costs stated on received invoices
The contractor was sensitive to costs and demonstrated respect for funding and the agency’s needs

4. Business Relations/Customer Service: The degree to which the contractor was professional and respectful in its
business approach and interactions with the agency.

FACTORS:

The contractor was courteous, cooperative, and had a professional approach in all forms of communication
The contractor handled complaints efficiently and effectively The contractor was knowledgeable about the project and/or had the expertise to provide assistance as requested
The contractor managed change effectively
The contractor attempted to resolve problems in a timely manner and followed up with a status report
The contractor provided technical support for maintenance, repair, and installation situations. Technical instructions, documentation, and general information was also provided
The contractor provided training on the effective use of its products or services

5. Deliverables/Requirements: The degree to which the contractor was compliant in meeting the standards of contract requirements and deliverables.

FACTORS:

All deliverables submitted were complete, accurate, and submitted within the required timeline using required forms or format, if applicable Requirements were demonstrated and/or documented

6. Safety: The degree to which the contractor mitigated and demonstrated freedom from risk of injury, danger, damage, or loss of life or property.

FACTORS:

The contractor complied with all Federal, State, and local laws and regulations concerning the health and safety of workers, the general public, and personal property
Contractor’s safety record for the project

7. Dependability: The degree to which contractor demonstrated trustworthiness and reliability.

FACTORS:

The contractor was fair, honest, and reasonable in interactions with the agency The contractor demonstrated consistency in business operations The contractor was sincere in efforts to deliver a quality product and/or

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services
The contractor followed through on agreements made with the program/agency

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CITY COUNCIL

AGENDA REPORT

MEETING
DATE:

December 8, 2025
TO: Mayor and City Council
FROM: Christopher Hoem, City Manager

PREPARED
BY:

Christopher Hoem, City Manager
SUBJECT: Accepting the 2026 Regular Meeting Schedule (City Manager Hoem)

RECOMMENDED COUNCIL ACTION
Motion to accept the 2026 Regular Meeting Schedule, selecting either the schedule that has two regularly scheduled City Council meetings in January through June 2026 and one regularly scheduled City Council meeting in July through December 2026, or the status quo schedule that cancels the second regular meeting in July, November, and December 2026; and authorizes and directs the Mayor and/or the City Manager to sign any documents required to maintain essential City services. Said documents shall be reviewed by the City Attorney and be scheduled for ratification by the entire City Council at the next regularly scheduled City Council meeting; or Motion to accept staff's recommendation as presented.

I. BACKGROUND/ANALYSIS:

Each year, the City Council accepts a regular meeting schedule to provide predictable meeting dates and ensure compliance with the Brown Act and other public access laws.

Historically, the City of Atwater has reduced meetings in certain months due to holidays, limited staff availability, and lighter agendas.

With the passage of Senate Bill 707 (SB 707), cities are required to place even greater emphasis on virtual access in public meetings. SB 707 strengthens rules related to agenda posting, remote access, and online availability, and it reinforces the public’s right to receive meeting information in a reliable and accessible way. Accepting a meeting schedule early in the year helps the City meet these expectations by ensuring agendas are prepared with sufficient time for proper review and public notification.

Option A, which includes two regular meetings per month from January through June and one regular meeting per month from July through December, provides the most flexibility for staff and best supports the additional preparation, posting, and accessibility requirements under SB 707. As always, if an additional meeting is required, there is the

CITY COUNCIL
Mike Nelson, Mayor
Danny Ambriz Brian Raymond
John Cale Kalisa Rochester

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Agenda Report - Accepting the 2026 Regular Meeting Schedule (City Manager Hoem) Page 2

option to call a special City Council meeting. This proposed schedule is more efficient for staff time and will allow staff to have a greater focus on operational needs, on-going projects, and process improvement. Based on meetings in the past twelve months, the average number of regular agenda items (that is, non-consent items that require action by the Council) is only 2.5 items per meeting. The majority of agenda items have historically been on the consent calendar. In 2025, one meeting was canceled due to a lack of agenda items, and two other meetings had zero regular agenda items. For these reasons, staff proposes the Option A schedule as a test or pilot program for the second half of 2026, and the City Council could evaluate how it went a year from now and decide whether to continue this schedule into 2027.

Option B, which continues the current practice of canceling the second meeting in July, November, and December, maintains the status quo schedule the City has used in prior years.

Both options give the Council a clear and consistent meeting calendar for 2026 and ensure that City business continues to be handled effectively. Accepting a 2026 meeting schedule that balances public access, staff workload, and the volume of City business will strengthen transparency and improve overall service to the community.

II. FISCAL IMPACTS:

There is no direct fiscal impact associated with adopting either schedule.

III. LEGAL REVIEW:

This item has been reviewed by the City Attorney's office.

IV. EXISTING POLICY:

This item is consistent with goal number three (3) of the City’s 2026-2030 Strategic Plan: Promote Transparency Through Communication.

V. ALTERNATIVES:

N/A
VI. INTERDEPARTMENTAL COORDINATION:

This item has been reviewed by all relevant departments.

VII. PUBLIC PARTICIPATION:

The public will have an opportunity to speak prior to City Council action.

VIII. ENVIRONMENTAL REVIEW:

This item is not a “project” under the California Environmental Quality Act (CEQA) as this activity does not cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to Public Resources Code section 21065.

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Agenda Report - Accepting the 2026 Regular Meeting Schedule (City Manager Hoem) Page 3

IX. STEPS FOLLOWING APPROVAL:

Staff will implement City Council's direction.

Submitted and Approved by:

Chris Hoem, City Manager
Attachments:

1. 2026 Regular Meeting Schedule Calendar- Option A

2. 2026 Regular Meeting Schedule Calendar- Option B

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CITY OF ATWATER
“Option A”
2026 REGULAR MEETING SCHEDULE
Jan Feb March April May June July Aug Sept Oct Nov Dec
Location of all listed
meetings:

Council Chambers
City Council 12
&
26 9
&
23 9
&
23 13
&
27 11
&
26*
8 &
22 13^ 10^ 14^ 12^ 9^ 14^
2 nd and 4th Monday of
each month - 6:00 PM
(Unless otherwise noted)
Planning
Commission 21 18 18 15 20 17 15 19 16 21 18 16
3 rd Wednesday of each
month - 6:00 PM
(Unless otherwise noted)
Audit &
Finance
Committee
26 23 23 27 26* 23 24 28 26
4 th Monday of each
month - 5:00 PM
(Unless otherwise noted)
Citizens’
Oversight
Committee
10 9 15 15
Semi-annually at 5:30
PM
City Council Chambers – City Hall – 750 Bellevue Road
The City Council meets as the Successor Agency to the Atwater Redevelopment Agency, the Atwater Public Improvement Corporation, the Atwater Public Financing Authority, the Atwater Housing Authority, and the Atwater Fire Protection District. However, unless specific items of business are conducted, these corporations will not be officially convened.
• Should the regular meeting fall on a legal holiday, the meeting should be held on the next business day. ^The 2nd meeting of the month has been cancelled.

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CITY OF ATWATER
“Option B”
2026 REGULAR MEETING SCHEDULE
Jan Feb March April May June July Aug Sept Oct Nov Dec
Location of all listed
meetings:

Council Chambers
City Council 12
&
26 9
&
23 9
&
23 13
&
27 11
&
26*
8 &
22 13^
10 &
24 14
&
28 12
&
26 9^ 14^
2 nd and 4th Monday of
each month - 6:00 PM
(Unless otherwise noted)
Planning
Commission 21 18 18 15 20 17 15 19 16 21 18 16
3 rd Wednesday of each
month - 6:00 PM
(Unless otherwise noted)
Audit &
Finance
Committee
26 23 23 27 26* 23 24 28 26
4 th Monday of each
month - 5:00 PM
(Unless otherwise noted)
Citizens’
Oversight
Committee
10 9 15 15
Semi-annually at 5:30
PM
City Council Chambers – City Hall – 750 Bellevue Road
The City Council meets as the Successor Agency to the Atwater Redevelopment Agency, the Atwater Public Improvement Corporation, the Atwater Public Financing Authority, the Atwater Housing Authority, and the Atwater Fire Protection District. However, unless specific items of business are conducted, these corporations will not be officially convened.
• Should the regular meeting fall on a legal holiday, the meeting should be held on the next business day. ^The 2nd meeting of the month has been cancelled.

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Atwater City CouncilDecember 8, 2025

Atwater City Council
December 8, 2025