Banning City Council
June 23, 2026

RESOLUTION 2026-103

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA, ESTABLISHING AN APPROPRIATIONS LIMIT FOR FISCAL YEAR 2026/27 AND RETROACTIVELY APPROVING THE FISCAL YEAR 2025/26, PURSUANT TO ARTICLE

XIIIB OF THE CALIFORNIA CONSTITUTION
WHEREAS, Article XIIIB of the California Constitution (Propositions 4 and 111) places an appropriations limit on State and Local Government, including the City of Banning (“City”) known as the Gann Appropriation Limit; and
WHEREAS, pursuant to said Article XIIIB of said California Constitution, and Section 7900 et seq. of the California Government Code, the City is required to set its appropriation limit for each fiscal year; and
WHEREAS, this appropriations limitation is based on proceeds of taxes adjusted annually, for population growth, inflation, and transfers of financial responsibility from one government entity to another, by the population growth factor of either the City or for the County of Riverside, and by an inflation factor that is either the change in the California Per Capita Personal Income (“CCPI”) or the change in non-residential construction for the City; and
WHEREAS, the City has received inflation and population data from the State Department of Finance to calculate the fiscal year 2026/27 appropriations limit; and WHEREAS, the City wishes to select the population growth factor and inflation factor providing the greatest ratio of change as shown below:

Change in CCPI 4.95%
City of Banning Population Change 2.51%
WHEREAS, due to staffing vacancies and administrative transitions within the Finance Department prior to the beginning of Fiscal Year 2025/26, the Fiscal Year 2025/26 appropriations limit was not separately presented to the City Council for consideration and adoption; and
WHEREAS, the City Council now desires to establish the appropriations limits for Fiscal Year 2025/26 (retroactively) and Fiscal Year 2026/27 in accordance with Article XIIIB of the California Constitution and applicable provisions of the California Government Code.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The City Council retroactively approves the appropriation limit for Fiscal Year 2025/26, set at $68,398,928.
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Resolution 2026-103

SECTION 2. The City Council approves the appropriation limit for Fiscal Year 2026/27 in the amount of $73,586,470.

SECTION 3. The City Clerk shall certify the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED, AND ADOPTED this 23
rd day of June 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning

APPROVED AS TO FORM AND
LEGAL CONTENT:

John Pinkney, City Attorney
Slovak, Baron, Empey, Murphy &
Pinkney LLP
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Resolution 2026-103

CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2026-103, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 23 rd day of June 2026 by
the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning, California
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Resolution 2026-103

EXHIBIT A
Description of Exhibit A
676
City of Banning
FY 2026-27 Budget
Article XIIIB of the California State Constitution was adopted by California voters in November 1979, and is more commonly referred to as the Gann Limit. The Article places limits on the amount of revenue which can be appropriated (spent) each fiscal year. Only revenues which are considered proceeds of taxes are subject to the limit.

The limit is different for each agency and changes each year, modified for changes in inflation and population. (1) (2) (3) (4) * (5) * (6) (7)
City County % Change
Fiscal Prior Year Previous Year's Current Year's Population Population In Per Current Year Year Gann Limit Population Population Change % Change % Capita Income Gann Limit 15-16 35,822,527 30,325 30,491 0.61% 1.29% 3.82% 37,670,711 16-17 37,670,711 30,491 30,834 0.57% 1.26% 5.37% 40,193,768 17-18 40,193,768 30,834 31,068 0.75% 1.56% 3.69% 42,327,078 18-19 42,327,078 31,068 31,282 0.36% 1.40% 3.67% 44,494,809 19-20 44,494,809 31,282 31,142 0.30% 1.17% 3.85% 46,748,491 20-21 46,748,491 31,142 31,125 -0.05% 0.79% 3.73% 48,875,298 21-22 48,875,298 31,125 32,233 3.79% 0.67% 5.73% 53,634,367 22-23 53,634,367 32,233 30,877 0.81% 0.42% 7.55% 58,151,000 23-24 58,151,000 30,877 31,250 1.28% 0.34% 4.44% 61,510,286 24-25 61,510,286 31,046 31,213 0.54% 0.55% 3.62% 64,087,512 25-26 64,087,512 32,068 31,949 -0.37% 0.27% 6.44% 68,398,928 26-27 68,398,928 31,532 32,323 2.51% 0.42% 4.95% 73,586,470 The Gann Limit is adjusted annually by multiplying the "Prior Year Gann Limit" (column 1) by the greater of the "City or County % Change in Population" (column 4 or 5) and then by the "% Change in Per Capita Income" (column 6) This annual Gann adjustment figure is then added to the Prior Year's limit amount to obtain the Current Year Gann Limit amount in column 7. The shaded boxes indicate the calculation factors that were used in determining the adjustment to the Gann Limit.
*City and County population change % figures are provided by the Department of Finance Demographic Research Unit in their annual Price Factor and Population Information.

GANN LIMIT CALCULATION
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CITY OF BANNING, CA GANN APPROPRIATIONS LIMIT
GANN FY 26-27 FOR 2026-27
6/30/2026
6/30/2027
Total 2026-27 Proceeds NonFund Division Activity Account Description Budget of Taxes Taxes 001 0001 301 1001 Property Taxes-Cur 3,976,528 3,976,528 0 001 0001 301 1003 Prop Tx- Suppl Roll 250,000 250,000 0 001 0001 301 1007 Prop Tx-Admin Chg (22,680) (22,680) 0 001 0001 301 1009 Prop Tx-Cur Unsec 267,011 267,011 0
001 0001 301 1010 Prop Tx-Backfill 4,150,349 4,150,349 0 001 0001 301 1015 State ERAF Shift 0 0 0
001 0001 302 1101 Sales & Use Tax 3,831,466 3,831,466 0 001 0001 302 1103 Sales Tax Sharing (325,000) (325,000) 0 001 0001 302 1109 Cannabis 1,640,000 1,640,000 0
001 0001 302 1106 10% Cabazon Outlet 720,000 720,000 0
001 0001 302 1108 Sales Tax Backfill 0 0
001 0001 306 1203 Bed Tax- Total Tax 1,250,000 1,250,000 0 001 0001 306 1208 Property Trans Tax 300,000 300,000 0
001 0001 341 3101 St Mtr Veh Lic-Reg 40,000 40,000 0
001 0001 341 3103 Off Hwy Mtr Veh Lic 0 0 0
001 0001 341 3110 St Hmown Prop Rel 26,976 26,976 0
001 2200 302 1104 Pub Safety Sales Tax 257,935 257,935 0 001 2400 302 1104 Pub Safety Sales Tax 257,935 257,935 0 SUB-TOTAL 16,620,520 16,620,520 0
TOTAL REVENUE BUDGET- 6/15/2026 121,029,694 16,620,520 104,409,174 Review each year for New Tax Items
Appropriation Limit Calculation for the Year Ended June 30, 2027 Appropriation Limit June 30, 2026 68,398,928
Per Capita Personal Income Change per State 4.95%
Population Change--Use the Larger of City's or County's Annual Percentage Change in Population Increase.

Banning January 1, 2025 to January 1, 2026 2.51%
Riverside County January 1, 2025 to January 1, 2026 0.42% Use Greater of the Two 2.51%
Calculation Factor For June 30, 2027
Per Capita Percentage Increase 1.0495
Population Percentage Increase 1.0251
TOTAL (Per Capita X Population) 1.0758425
Gross Appropriation Limit June 30, 2027 73,586,470
Proceeds of Taxes Subject to Appropriation 16,620,520
Amount Limit Exceeds Taxes Subject to Limit 56,965,950
CONCLUSION: The City Has Not Exceeded its Appropriation Limit for the 2026-27 Year.

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Elizabeth Gibbs, City Manager
PREPARED BY: Mark Staples, Planning Manager
Matt Bassi, Interim Community Development Director
MEETING DATE: June 23, 2026
SUBJECT: Ten Year Review of the Development Agreement between Tri Pointe Homes and the City of Banning Regarding the Development of the Atwell Project within the Butterfield Specific Plan.

STAFF RECOMMENDATION:

Receive and file
BACKGROUND:

Government Code Section 65865.1 requires that development agreements include provisions requiring periodic review at least every 12 months, at which time the applicant, or successor in interest thereto, must be required to demonstrate good faith compliance with the terms of the agreement. Section 65865.1 also states that if, as a result of such periodic review, the local agency finds and determines, on the basis of substantial evidence, that the applicant or successor in interest thereto has not complied in good faith with terms or conditions of the agreement, the local agency may terminate or modify the agreement. This is the Ten Year Review of the Development Agreement between Tri Pointe Homes (TPH, formerly Pardee Homes) and the City of Banning.

The Ten Year Review requirements for the Butterfield Specific Plan Project are set forth in Section 6.6 of the Development Agreement for the Project. In accordance with Section 6.6 (page 21) of the Development Agreement between the City of Banning (“City”) and Tri Pointe Homes (“Developer”), which was entered into on March 27, 2012, with a subsequent revised effective date of February 9, 2015.

Director David Newell conducted the last annual review on October 14, 2025. Director Newell notified the Council that the 10-Year Review would be provided in early 2026. However, the shortage in Community Development staffing delayed the review.

On April 15, 2026, City staff met with TPH to discuss the expectations and format of the Ten Year Review document and submission. Prior annual reviews focused primarily on the sections of the development agreement that could be considered the action items. Sections 4 though 9 are the action items of the DA that involve development impact fees, the formation of financing districts, construction timing and completion milestones, impact fee and TUMF credits, dedications and conveyances, processing of permit applications and timely reviews. For the Ten Year Review, the City and TPH agreed to expand on all sections and provide either a summation of the DA section and/or provide more detail into the section, particularly progress details such as for the number of residential units completed.

The Atwell Ten Year Anniversary Development Agreement Review letter is attached for review. The first draft of the Ten Year Review letter was submitted on May 11, 2026. Matt Bassi, Interim Community Development Director, and Mark Staples, Planning Manager, provided comments, corrections, and 679
recommended revisions to the letter on May 18, 2026. TPH resubmitted a final strikethrough and underline draft of the letter with their revisions and further discussion in sections, per staff direction.

City staff has determined and finds that the Developer has delivered the necessary information, reasonably requested by the City, regarding the Developer’s performance under the Agreement. Staff has reviewed the information requested, performed a series of site inspections, conducted several meetings internally and with the Developer, and determined that the Developer has, and continues to, demonstrate compliance with the Agreement. Based on the review, staff has also determined that the Developer is implementing the Development Agreement in good faith, and continues to comply with the provisions and regulations of the adopted Specific Plan, the certified Environmental Impact Report prepared for the Project, and the existing land use regulations applicable to the Project as set forth in the Banning Municipal Code and the Butterfield Specific Plan.

JUSTIFICATION:

After reviewing TPH’s Ten Year Review update on the progress of the DA, staff concurs that the Atwell project is being carried out in good faith and in accordance with the terms of the Development Agreement. After conducting the public hearing on the Ten Year Review of the Development Agreement, it is recommended that the Council receive and file this matter. The next annual review will presented to the City Council in February 2027.

NOTE: In accordance with Section 6.2.4 of the DA, the applicant was required to demonstrate a good faith effort during the first five (5) year period to market the commercial site (Planning Area 18) for sale or lease to a suitable user. As of the date of this report, staff has been notified by Regency Centers of their interest to develop the commercial site. Their intention is to submit a development review application by July 1, 2026. Staff anticipates that TPH will help facilitate the submission and processing of the design review application package (See Page 4 of Ten Year Review Letter "Third Bullet Point").

Public Communication:

On June 12, 2026, a notice of public hearing was published in the Record Gazette, a newspaper of general circulation within the City of Banning, notifying the public that the subject review would be considered by the City Council at a public hearing on June 23, 2026. As of the time of the writing of this staff report, no public comments were received.

FISCAL IMPACT:

N/A
ATTACHMENTS:

1. 7.1a Atwell - Ten Year DA Review_5-11-26 Final Draft.pdf

2. 7.1b Dev Agree.Pardee 7-17-12.pdf

3. column_affidavit_gf71xNbH24MlQA1Wymnj.pdf
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May 11, 2026
To: Mayor Royce and City of Banning
99 East Ramsey Street
Banning, Ca 92220
Attn: Matthew Bassi, Interim Planning Director
RE: Atwell – Ten Year Anniversary Development Agreement Review Mr. Bassi,
Tri Pointe Homes IE-SD, Inc. (TPH), is the owner and developer of the Atwell master planned community (formerly Butterfield; currently known as Atwell) located in the northwest corner City of Banning, Ca (City). Atwell was originally entitled as a 1,543-acre Specific Plan area with 5,387 residential homes, neighborhood parks, community parks, schools, golf course, retail and commercial parcels. However, a legal challenge was filed in 2012 and ultimately settled which ultimately resulted in among other things, a reduction of 525 units, of primarily high-density residential units, to a current maximum of 4,862 residential homes with the elimination of the golf course but replaced with active open space and flood conveyance facilities.

As part of the project approvals, the City and TPH entered into a Development Agreement (DA) on March 27, 2012, but the DA did not become effective until February 9, 2015 (City Effective Date letter is included in Appendix A). Section 6.6 of DA provides that the City and TPH conduct annual and 10-year anniversary reviews of the performance of the DA and the development goals of the Project.

TPH has submitted and the City Council has conducted eight (8) prior annual reviews, as development did not begin until 2018. The most recent 2025 annual review checklist was presented to the City Council on October 14, 2025, and is included in Appendix B. Because of several key City staff changes in 2025, a decision by the City was made to put off the 10-yr anniversary review (Review) until 2026. As such, TPH sent an email to City staff on February 2, 2026, requesting a meeting to discuss the information and format the City would require to complete the Review which was ultimately held on April 15, 2026.

As discussed below, TPH has met the performance goals of the DA.

The following is a discussion and more thorough review of each section in the DA. 681
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Section 1: DEFINITIONS
TPH Response:

Sections 1.1 through 1.82. Section 1 lists the regular words and phrases used throughout the Development Agreement, such as Certificate of Occupancy, Effective Date, Land Use Regulations, and Term. Past and future annual reviews have not and will not include any further discussion regarding these terms. (CONFORMING/ONGOING)
Section 2: EXHIBITS
TPH Response:

Section 2. This section lists the eight (8) exhibits included in the Development Agreement, from the map and legal description, development impact fees, and proposed project facilities. The current Atwell Preliminary Composite Site Plan is included in Appendix C and is an update to the Specific Plan Map included as Exhibit A-4 of the Development Agreement. (CONFORMING/ONGOING) Section 3: TERM
TPH Response:

Section 3.1. The DA term is a period of forty (40) years which may be extended due to Economic Distress or reduced if Development Goals are not met at each 10-year anniversary review. To date, neither extensions nor reductions have been discussed or proposed. (CONFORMING/ONGOING) Sections 3.2 through 3.4. These three sections cover the Termination Upon Completion of Construction, Termination for Default, and Extension of the Term. As none of these items are occurring, being discussed or proposed, future reviews will not discuss these sections until they are appropriate. (CONFORMING/ONGOING)
Section 3.5. As part of the project approvals, the City and TPH entered into a Development Agreement (DA) on March 27, 2012, but did not become effective until February 9, 2015 (City Effective Date letter is included in Appendix A). (CONFORMING/ONGOING)
Section 4: DEVELOPMENT OF THE DEVELOPER’S PROPERTY
TPH Response:

Sections 4.1 through 4.6. These six (6) sections address TPH’s Right to Develop, Right to Future Approvals, Existing Development Approvals, the Specific Plan, the Priority of Specific Plan standards over the Banning zoning code, and Later Enacted Measures that should not affect future project approvals. (CONFORMING/ONGOING)
Section 4.7. See TPH Response in Section 6.6 below. (CONFORMING/ONGOING) Section 5: FINANCING AND THE CITY’S OBLIGATION
TPH Response:

Sections 5.1 through 5.3. Initial coordination with City staff took place in 2019 and early 2020 to establish Special Services and Maintenance Taxes prior to the formation of the Atwell Community Facilities District (CFD). The Special Services and Maintenance Taxes are collected annually and are expected to be dispersed from the County of Riverside to the City in January and May of any given year.

The CFD was formed and is managed by the California Statewide Communities Development Authority (CSCDA) with coordination/reviews by the City. The following are when CFD bonds were sold:
• Improvement Area I – March 24, 2021 (Net Construction Proceeds – $18,054,758) • Improvement Area II – July 13, 2022 (Net Construction Proceeds – $11,898,797) 682
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• Improvement Area III – May 1, 2024 (Net Construction Proceeds – $12,336,262) • Improvement Area IV – December 18, 2024 (Net Construction Proceeds – $16,298,044) • Improvement Area V – Anticipated sale date 2
nd Quarter 2026
• Improvement Area VI – Anticipated sale date 1
st Quarter 2027
Appendix D contains an exhibit depicting the CFD Improvement Areas as mentioned above. Future CFD bond sales are development dependent. Dates of the future CFD bond sales are unknown at the time of this Review but is anticipated to follow a similar timing as previous bond sales. CONFORMING/ONGOING) Section 5.4. Because of the legal challenge filed in 2012, the golf course was eliminated. In its place, a drainage corridor extends the length of Atwell from north to south conveying both onsite and offsite storm water runoff downstream. Drainage improvements within the corridor are eligible facilities to be constructed by TPH. (CONFORMING/ONGOING)
Section 5.5. On May 11, 2021, TPH and the City entered into a Development Impact Fee Credit Implementation Agreement which provided guidelines for reimbursement/credit for eligible facilities constructed by TPH. (CONFORMING/ONGOING)
Section 5.6. The Atwell Homeowner’s Association (HOA), incorporated on April 22, 2020, and CCRs recorded on August 20, 2020, is responsible for all the maintenance of Atwell’s landscaping, parks and open space, water quality basins and Smith Creek corridor improvements (approx. 500 acres).See TPH Response in Section 5.1 through 5.4 for discussion on City CFD Special Services and Maintenance Taxes. (CONFORMING/ONGOING)
Section 5.7. TPH provided funding for the City to hire consultants in 2011 to produce the nexus studies that established various City DIF fees. The City agreed that TPH be provided with DIF fee credits equal to the TPH funding amount pursuant to this DA section. DIF fee credits for water, wastewater and traffic improvements will be tracked by the City and TPH. (CONFORMING/ONGOING) Section 5.8. (CONFORMING/ONGOING)
Section 6: TIME FOR CONSTRUCTION AND COMPLETION OF PROJECT TPH Response:

Section 6.1. Commencement of construction took place in 2018 beginning at the northeast corner of Highland Springs Avenue and Wilson Street. Given the Term as specified in Section 3, the development has progressed at a much quicker pace than originally anticipated with all land development completed south of the Southern California Edison (SCE) Easement, between Highland Springs Avenue and Highland Home Road, with homes sales/construction following closely behind. Development is currently occurring north of the SCE Easement, along the northern extension of Highland Home Road, with new homes anticipated selling in 2027. (GOAL MET)
Section 6.2. This section specified development goals of Atwell to be completed prior to the Review (DA excerpts below).
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Development Agreement Review
1250 Corona Pointe Court, #600
Corona, CA 92879
TPH Responses
First Bullet Point: Development for Atwell began in 2018 at the northeast corner of Highland Springs Avenue and Wilson Street. (GOAL MET)
Second Bullet Point: As of April 12, 2026, TPH has closed 1,495 homes within Atwell, which means that TPH has already closed 295 units towards the next 1,600 units expected for the 20th anniversary in 2036.

Please note that the table’s unit expectations are based on the original 5,387 units of the 2012 plan, not the current maximum unit development allowance of 4,862 units. (GOAL MET/EXCEEDED) Third Bullet Point: TPH has actively marketed the 23-acre commercial parcel (Parcel) located at the northeast corner of Highland Springs Avenue and Wilson Street since the commencement of development of Atwell. The Section 6.2.4 of the DA stated the “The goal of the City is to locate a significant sales tax generating “big box user” as a major tenant of the project.” Through years of TPH’s marketing efforts, a “big box user” was not identified as being interested in developing the Parcel.

Because of this fact, the City and TPH entered into a Pre-Litigation Settlement Agreement dated February 10, 2021, that acknowledged TPH had marketed in good faith but was unable garner interest from a “big box user” and thus the City agreed that the Parcel was to be developed with a “regional or national grocery store anchor tenant…”. Since the execution of the Pre-Litigation Settlement Agreement, TPH continued to market the site in good faith and hired Regency Centers to engage and attract a suitable retail/commercial anchor tenant. TPH and Regency Centers has had multiple meetings with City staff and current Council members to discuss site plans and interested anchor tenants.

Discussions and meetings are ongoing. (CONFORMING/ONGOING) Fourth Bullet Point: TPH completed the Smith Creek outlet in the first quarter of 2026.. (GOAL MET) The fourth bullet point also calls out “…other improvements in Section 6.2.3.” That section of the DA is below.
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Corona, CA 92879
TPH Responses
(i): See above Third Bullet Point response. (GOAL MET)
(ii): See above Fourth Bullet Point response. (GOAL MET) (iii): The Planning Area 39 identified in the Specific Plan for the Recreation/Emergency Center site is located in a future phase. Once TPH is in the planning stages of that phase, TPH will coordinate with the City. (GOAL ONGOING)
(iv): Through discussions with City staff, it was determined that the satellite wastewater treatment facility in Planning Area 11 was not feasible. It was also determined that recycled water infrastructure would be focused south of the I-10 Freeway. Instead, a TPH built City-owned and operated sewer lift station was constructed on a 2-acre parcel south of Planning Area 11. The City was to appraise the two (2) acre parcel. It should be noted that TPH has not received wastewater DIF credit for the fair market value of the 2-acre parcel per Section 8.3. (GOAL MET)
(v): Water tanks are constructed when needed to support a particular water pressure zone where construction/home closings are to occur. To date, TPH has constructed the City-owned and operated

3.7MG Foothill West Zone Water Reservoir. TPH is currently designing and will build the 2.6MG Mountain North Zone Water Reservoir to support the next development phase north of the SCE Easement. An issue that requires immediate attention from the City, is the Chromium 6 issue and how the City is going to align the goals of meeting the state of California standards with continued development. (GOAL ONGOING)
(vi): Other project facilities are constructed when needed to support a particular Atwell development phase. (GOAL ONGOING)
Section 6.2.4 Commercial Development. See the second bullet point of 6.2 above. (GOAL ONGOING) Section 6.2.5 Extension of Phases. There has not been a request to extend any Phase. (GOAL ONGOING) Section 6.3. Construction commenced in 2018. (GOAL MET) Section 6.4. Public infrastructure (ie new traffic signal, etc) is constructed as needed to mitigate the impacts from a particular development phase. TPH will build the required infrastructure at prevailing wage rates or pay the City DIF fee. (GOAL ONGOING)
Section 6.5. Atwell development phasing has progressed in a logical sequence taking into account existing City infrastructure as well as required infrastructure needed to sustain a particular development phase. Tentative tract maps, final map sequencing and identification of required public infrastructure are analyzed by consultants hired by TPH, discussed with City staff, submitted to the City and reviewed by a City-hired third-party consulting firms for accuracy and completeness. (GOAL ONGOING) 685
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Section 6.6. This section sets forth the guidelines for completing each Review. One subsection to note is Subsection 6.6.2 which states “…all Development Impact Fees are subject to adjustment as part of the Ten-Year Anniversary Review…”. However, had development began on the DA effective date of February 9, 2015 and the City completed their DIF fee nexus studies to establish updated DIFs within the one-year timeframe as specified in DA Section 7.2.2, the DIFs would have been subject to adjustment at the first Review. Since that was not the case from both parties, TPH and the City entered into the Development Impact Fee Credit Implementation Agreement on May 11, 2021, establishing a 10-year DIF fee starting date of September 10, 2019 which coincides with the City adoption of the updated DIF fees.

Therefore, Atwell DIFs are not eligible for adjustment until September 10, 2029 (Agreement excerpt below). (GOAL ONGOING)
Section 6.7. This section identifies that if the development goals are not met by each 10-year Anniversary Review, the term of the DA can be reduced by 5 years at each 10-year milestone. (GOAL ONGOING) Section 6.8. In late 2020, the City and TPH discussed the applicability of this section and whether TPH has met the criteria for development incentives to be afforded this section’s benefits. As such, the City and TPH entered into a Pre-Litigation Settlement Agreement dated February 10, 2021 that acknowledged TPH has met the criteria. (GOAL MET)
Section 6.9. TPH and the City have collaboratively worked together to provide a high-quality, highly desirable community within the City of Banning. (CONFORMING/ONGOING) Section 7: FEES, TAXES AND ASSESSMENTS
TPH Response:

Sections 7.1 and 7.2. TPH is responsible and has been paying all processing fees as invoiced by the City.

The City Council adopted updated DIF fees at the 9/10/19 hearing which adjusted DIF’s from that shown in Exhibit D of the DA. Park fees are not to be imposed on Atwell as the park requirement is met by the construction of parks and open space as shown in the SP. All other required DIF fees are collected at the time of building permit issuance and/or certificate of occupancy. However, if TPH constructs public infrastructure as identified in the City’s Capital Improvement Program (CIP), TPH shall be earn credit with the City for the total construction cost applicable to the type of improvement (i.e. sewer infrastructure constructed then sewer DIF credit is earned). (CONFORMING/ONGOING) Section 7.3. This section discusses water and wastewater DIF fee payments/credits and facility construction. Section 7.3.3 discusses the need for the City to upgrade its existing wastewater treatment facility capacity to be able to adequately treat current and future City wastewater flows. Further 686
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discussion needs to be held between TPH, other developers and the City to discuss the City’s wastewater facility capacity and status of upgrades including deliveries of recycled water to the Sun Lakes Development. (CONFORMING/ONGOING)
Section 7.4. Planned parks and open space have been constructed per the Atwell Specific Plan, Atwell will not be subject to park fees. As of the 10-year Anniversary Review, the southern half of Atwell’s (below the SCE Easement) open space and parks have been either completed or are nearing completion.

TPH has progressed north of the SCE Easement and is currently improving development Phase 3B and 4A-1. As previously mentioned in Section 5.4, the golf course was eliminated. In its place, a drainage corridor extends the length of Atwell from north to south conveying both onsite and offsite storm water runoff downstream. Within the drainage corridor, trails, lookout points, workout stations and leisure area have been constructed for the public to utilize and enjoy. As stated in Section 6.2.3.iii, Planning Area 39 identified in the Specific Plan for the Recreation/Emergency Center site is located in a future phase. Once TPH is in the planning stages of that phase, TPH will coordinate with the City. (CONFORMING/ONGOING)
Section 7.5. This section discusses traffic DIF fee payments/credits and facility construction. Section

7.5.2 discusses interim improvements on Highland Springs Avenue. TPH worked with the City of Banning and the City of Beaumont in the synchronization of the traffic signals near the I-10 Freeway intersection. In addition, TPH developed street improvement plans for the closure/re-routing of Joshua Palmer Avenue and coordinated with property owners that would have been affected by the closure/rerouting. However, TPH and the Cities were unsuccessful in coming to a solution that benefited all parties and the project has been stalled ever since.

TPH is required to conduct and submit for review to the City a Traffic Validation Report (TVR) for each development phase of Atwell. The TVR identifies traffic improvements needed to mitigate the impacts of that particular development phase. TPH has constructed all traffic improvements that the various development phase TVRs have identified (ie traffic signals, street widening, etc.). (GOAL MET/ONGOING) Section 8: DEDICATIONS AND CONVEYANCES OF PROPERTY INTERESTS TPH Response:

Section 8.1. Park and open space improvement plans have been and will continue to be designed by a qualified design professional and submitted for review and approval by the City. Per Section 8.1.4, a six (6) acre community recreation/emergency center parcel shall be in Planning Area 39 and said parcel shall be dedicated to the City without charge. The six (6) acre parcel “may be reduced so as to not adversely affect the development area of adjacent parcels…”. TPH has continuously coordinated with City staff on the location of Planning Area 39 as this is in future development phase 4A-2 of Atwell.

Community recreation/emergency center parcel will be dedicated to the City without charge once site has been graded and utilities stubbed. (CONFORMING/ONGOING) Section 8.2. TPH has constructed the HOA owned and maintained Planning Area 19 detention basin within Phase 1A of the Atwell development. TPH began design and submittal process Planning Area 71 detention basin (Smith Creek Basin; located in the north) in 2019 and has been in ongoing design and review with Riverside County Flood Control and Water Conservation Department (RCFCD) since. Once constructed, The RCFCD owned and maintained Smith Creek Basin will significantly reduce offsite flows that impact Atwell from the north and in combination with other perimeter basins, alleviate the flood risks in Atwell and downstream portions of the City. The Smith Creek Basin was envisioned potentially as a dual-purpose detention/infiltration facility whereby the Pass Water Agency would discharge State Project Water through an extension of their pipeline into the Smith Creek Basin for groundwater 687
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recharge purposes to augment the City’s water supply. The City has not entertained this option. (CONFORMING/ONGOING)
Section 8.3. See above TPH response in Section 6.iv. (GOAL MET) Section 8.4. The City desires to have an up to two-acre parcel for a future fire station. TPH has continuously coordinated with City staff on the location of Planning Area 60 as this is in a future phase of Atwell. Community recreation/emergency center parcel with be dedicated to the City once site has been graded and utilities stubbed and grant TPH a credit equal to the fair market value determined by an appraisal. (CONFORMING/ONGOING)
Section 8.5. See above TPH response in Section 6.v. Additionally, Atwell’s DA called for a total water storage capacity of 3.5MG between the three (3) reservoirs to support the entirety of Atwell (DA excerpt below) at build-out. Because of further analysis and changing regulations, the projected total water storage capacity for Atwell is approximately 8.3MG in existing and future reservoirs. Please note, each reservoir parcel shall be dedicated to the City without charge once completed. (GOAL ONGOING) Section 9: PROCESSING OF REQUESTS AND APPLICATIONS: OTHER GOVERNMENT PERMITS TPH Response:

Sections 9.1 through 9.12. In general, this section discusses the submittal and City review of the various design plans needed for a typical development project. (CONFORMING/ONGOING) Sections 9.1 and 9.2. TPH has been timely in its development of each phase/Planning Area with each subsequent Tentative Tract Map submittal. To date, TPH has not needed to utilize expedited processing. (CONFORMING/ONGOING)
Section 9.3. A few years ago, the City implemented a new improvement plan and permit tracking software, SmartGov. The software was not without its issues since the initial rollout such as plan check turnaround times, invoice accuracy and file transfer corruption. It seems those issues have been resolved but City interdepartmental coordination and plan check turnaround times have suffered since SmartGov’s implementation and are not typically within the two-week timeframe specified by the DA.

TPH and the City are continually coordinating to resolve these issues, so construction delays are not experienced. (CONFORMING/ONGOING)
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Sections 9.4 through 9.12. Throughout the life of Atwell, TPH will continuously coordinate and submit for City review/approval all required tentative tract maps, final maps and improvement plans, etc. to construct Atwell to City standards. (CONFORMING/ONGOING) Section 10: AMENDMENT AND MODIFICATION OF DEVELOPEMNT AGREEMENT TPH Response:

Sections 10.1 through 10.5. In general, this section discusses the guidelines for minor modifications and amendments to DA. To date, there have been no such amendments and/or modifications to the DA. (CONFORMING/ONGOING)
Section 11: RESERVATIONS OF AUTHORITY
TPH Response:

Sections 11.1 through 11.3. The Atwell DA term is 40 years, which means the project will be subject to several building code change cycles. Atwell will adhere to those code changes as required unless code extensions/grandfathering are granted either via State of California or applications to the City. (CONFORMING/ONGOING)
Section 12: ANNUAL REVIEW
TPH Response:

Section 12.1. To date, TPH has submitted eight annual reviews, with subsequent public reviews at City Council, as development did not begin until 2018. For reference, the most recent 2025 annual review checklist conducted by the City Council on October 14, 2025, is included in Appendix B. Because of several key City staff changes in 2025, a decision by the City was made to put off the 10-year anniversary review (Review) until 2026. As such, TPH sent an email to City staff on February 2, 2026, requesting a meeting to discuss the information and format the City would require to complete the Review which was ultimately held on April 15, 2026. It was agreed upon to hold the 10-year review at a City Council meeting in June 2026. (CONFORMING/ONGOING)
Sections 12.2 and 12.3. (CONFORMING/ONGOING)
Section 13: DEFAULT, REMEDIES AND TERMINATION
TPH Response:

Sections 13.1 through 13.9. Neither TPH nor the City have needed to exercise the default, recovery for damages, dispute resolution, or termination clauses of this section. (CONFORMING/ONGOING) Section 14: ASSIGNMENT
TPH Response:

Sections 14.1 through 14.4. Section 14 lays out the rules and regulations of how TPH could transfer developer’s rights under the agreement. (CONFORMING/ONGOING) Section 15: RELEASE AND INDEMNITIES
TPH Response:

Sections 15.1 through 15.5. Section 15 outlines the releases and indemnities of the City and TPH, including third party litigation and hold harmless of developer’s construction. (CONFORMING/ONGOING) 689
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Section 16: EFFECT OF AGREEMENT ON TITLE
TPH Response:

Section 16.1. This section simply states how the provisions of the Agreement and other covenants run with the land. (CONFORMING/ONGOING)
Section 17: CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION TPH Response:

Sections 17.1 through 17.3. These sections outline the non-liability of City officials and employees, conflict of interest statement, and assuring covenants are non-discriminatory. (CONFORMING/ONGOING) Section 18: MORTGAGEE PROTECTION
TPH Response:

Sections 18.1 through 18.9. This section covers mortgages, project financing, liens, defaults, City’s rights on incomplete improvements, etc. (CONFORMING/ONGOING)
Section 19: MISCELLANEOUS
TPH Response:

Sections 19.1 through 19.13. The miscellaneous items covered in this section include Estoppel Certificates, Interpretations, severability, obligations, no third party beneficiaries, notice contacts to the Developer and City, relationship of parties, attorney’s fees, further actions, time of essence, waivers, and execution of the Agreement. (CONFORMING/ONGOING)
TPH is proud to provide a high-quality development in the City and deliver it in a timely manner consistent with the DA as amended.

Should you have any questions or need additional information please call my office at (951) 428-4400.

Thank you,
Michael Heishman
Director of Land Development
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APPENDIX A
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APPENDIX B
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APPENDIX C
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APPENDIX D
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*RECORDING REQUESTED BY, )
DOC # 2012-0332888
07/17/2012 02:58P Fee:NC

Recorded in Official Records
County of Riverside
AND WHEN RECORDED MAIL TO: )
)
Larry W. Ward
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City of Banning ) S R U PAGE SIZE DA MISC LONG RFD COPY 99 E. Ramsey Street )
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No Recording Fee Required - Government Code § 27383

DEVELOPMENT AGREEMENT
between

THE CITY OF BANNING
("City")
and

PARDEE HOMES
A California Corporation
("Developer")
695

DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this "Agreement") is entered into on March 27, 2012, between the CITY OF BANNING (the "City"), a municipal corporation, and PARDEE HOMES (the "Developer"), a California corporation, pursuant to Article 2.5 of Chapter 4 of Division 1 of Title 7, §§ 65864 through 65869.5 of the Govermuent Code. The City and the Developer shall be referred to within this Agreement jointly as the "Parties" and individually as a "Party."
RECITALS:

A. Capitalized Terms. The capitalized terms used in these Recitals and throughout this Agreement shall have the meaning assigned to them in Section 1. Any capitalized terms not defined in Section 1 shall have the meaning otherwise assigned to them in this Agreement or apparent from the context in which they are used.

B. Development of the Developer's Property. Concurrent with the approval of this Agreement, the City has approved the Specific Plan, which contemplates low, medium and high density residential development, to a maximum total of 5, 387 dwelling units, 36 acres of commercial/retail development, schools, parks and supporting infrastructure on 1,543 acres, and a general plan amendment and a zone change and has certified a Final Enviromuental Impact Report, State Clearinghouse No. 2007091149, for the area descrihed in Exhibit "A" (the "Developer's Property").

C. Legislation Authorizing Development Agreements. To strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted the Development Agreement Statute, authorizing the City to enter into an agreement with any person having a legal or equitable interest in real property providing for the development of such property and establishing certain development rights therein. The legislative findings and declarations underlying the Development Agreement Statute and the provisions governing contents of development agreements state, in Government Code §§ 65864(c) and 65865.2, that the lack of public facilities, including, but not limited to, streets, sewerage, transportation, drinking water, school, and utility facilities is a serious impedimeut to the developmeut of new housing, and that applicants and local govermuents may include provisions in development agreements relating to applicant fmancing of necessary public facilities and subsequent reimbursement over time.

D. Intent of the Parties. The Developer and the City have determined that the Project is a development for which a development agreement is appropriate. The Parties desire to define the parameters within which the obligations of the Developer for infrastructure and public improvements and facilities will be met and to provide for the orderly development of the Developer's Property, assist in attaining the most effective utilization of resources within the City and otherwise achieve the goals of the Development Agreement Statute. In consideration of these benefits to the City and the public benefits ofthe development ofthe Developer's Property, the Developer will receive assurances that the City shall grant all permits and approvals required 01102/0012/108862,12
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for total development of the Developer's Property and will provide for the assistance called for in this Agreement in accordance with the terms ofthis Agreement.

E. Public Benefits of the Project. This Agreement provides assurances that the public benefits identified below in this Recital E will be achieved in accordance with the terms of this Agreement. The Project will provide local and regional public benefits to the City, including, without limitation:

I. Increased Tax Revenues. The development ofthe Developer's Property in accordance with the terms of this Agreement will result in increased real property and sales taxes and other revenues to the City.

2. Reduced Vehicle Miles Travelled. The Project will reduce vehicle trips by implementing a transportation demand management program that takes advantage of alternative modes of mass transit within the City.

3. Pedestrian Mobility. The Project encourages pedestrian mobility through the provision of walking paths, through signage guiding pedestrians to nearby destinations and through preservation of significant open space to create pleasant environments that will encourage walking.

4. Sustainable Design. The Developer will, to the extent reasonably feasible, include sustainable design for commercial and industrial uses and green building standards for residential construction.

5. Pedestrian Connection. The Project will include a series of public pedestrian trails throughout the Developer's Property.

6. Reduced Traffic Congestion. The Project will include improvements and contribute fees to improvements that will reduce congestion on local streets and the regional transportation network.

7. Public Schools. The Project will allow for the construction of elementary schools in both the Beaumont Unified School District and Banning Unified School District, which will benefit residents both within and outside the Project.

8. Natural Open Space. Over 56 acres of natural open space will be preserved in perpetuity.

9. Parks and Recreation. Park and recreation improvements include:
a. 58.5 acres of community and neighborhood parks
b. 8.0 acres devoted to private recreation centers.
c. 254 acres of public golf course or active open space amenity d. 108.4 acres of other open space.
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10. Financial Impact Mitigation. Based upon a study of financial impacts on the City, the Project will pay a Services Special Tax to alleviate negative financial impacts of the Project on the City.

F. Public Hearings: Findings. ill accordance with the requirements of the California Environmental Quality Act (Public Resources Code § 21000, et seq. ("CEQA")), appropriate studies, analyses, reports and documents were prepared and considered by the Planning Commission and the City Council. The Planning Commission, after a public hearing on March 7, 2012, recommended, and the City Council, after making appropriate findings, certified, by Resolution No. 2012-24 adopted on March 27, 2012 a Final Environmental Impact Report for the Project, more specifically identified as the Final Environmental Impact Report for the Butterfield Specific Plan, State Clearinghouse No. 2007091149, as having been prepared in compliance with CEQA. On March 7, 2012, the Planning Commission, after giving notice pursuant to Government Code §§ 65090, 65091, 65092 and 65094, held a public hearing on the Developer's application for this Agreement. On March 27,2012, the City COlllCil, after providing the public notice required by law, held a public hearing to consider the Developer's application for this Agreement. The Planning Commission and the City Council have found on the basis of substantial evidence based on the entire administrative record, that this Agreement is consistent with all applicable plans, rules, regulations and official policies ofthe City.

G. Mutual Agreement. Based on the foregoing and subject to the terms and conditions set forth herein, Developer and City desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and having determined that the foregoing recitals are true and correct and should be, and hereby are, incorporated into this Agreement, the Parties agree as follows:

I. DEFINITIONS
The following words and phrases are used as defined terms throughout this Agreement.

Each defined term shall have the meaning set forth below.

1.1 Acquisition Agreement. "Acquisition Agreement" shall have the meaning set forth in Section 5.1 below.

1.2 Anniversarv Date. "Anniversary Date means the date of the anniversary of each year following the Effective Date established in Section 3.5.

1.3 Annual Review. "Annual Review" means the annual review of the Developer's performance of the Agreement in accordance with Section 12.1 of the Agreement and Government Code § 65865.1.

1.4 Aoolications. "Application(s)" means a complete application for the applicable land use approvals (such as a subdivision map, conditional use permit, etc.) meeting all of the current ordinances of the City provided that any additional or alternate requirements in those ordinances enacted after the Effective Date which affect the Project application shall apply only to the extent permitted by this Agreement.
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1.5 Appraisal of Land Value. "Appraisal of Land Value" when referred to herein shall mean the determination by an experienced and independent MAl appraiser retained by City (Developer may veto any appraiser selected by City for good cause), in a written appraisal at fair market value based upon comparable sales of unimproved land, and serviced by the existing infrastructure, and with the development restrictions of the Specific Plan, and with the understanding that such value shall not exceed $80,000 per acre.

1.6 Assignment. "Assign" shall have the meaning set forth in § 14.1.1 below. All forms of use of the verb "assign" and the nouns "assignment" and "assignee" shall include all contexts of hypothecations, sales, conveyances, transfers, leases, and assignments.

1.7 Authorizing Ordinance. "Authorizing Ordinance" means Ordinance No. 1451 approving this Agreement, introduced on March 27, 2012 and adopted on April 10, 2012.

1.8 Building Pennit. "Building Permit," with respect to any building or structure to be constructed on the Developer's Property, means a building permit for not less than the shell and core of such building or structure issued by the City's Division of Building and Safety.

1.9 CC&R's. "CC&R's" shall have the meaning set forth in Section 14.4 below.

1.10 Certificate of Compliance. "Certificate of Compliance" shall have the meaning set forth in Section 12.2 below.

1.11 Certificate of Occupancy. "Certificate of Occupancy," with respect to a particular building or other work of improvement, means the final certificate of occupancy issued by the City with respect to such building or other work of improvement.

1.12 CFD. "CFD" means a community facilities district for the Project allowed to be formed pursuant to the CFD Act by a Local Agency.

1.13 CFD Act. "CFD Act" means the Mello Roos Community Facilities Act of 1982 (Government Code § 53311 et seq.), as it may be amended from time to time, authorizing the imposition of special taxes to fund capital facilities and services.

1.14 City. "City" means the City of Banning, California.

1.15 City Council. The "City Council" means the governing body of the City.

1.16 City Development Agreement Ordinance. "City Development Agreement Ordinance" means Chapter 17.60 of the Zoning Ordinance which establishes a procedure for the consideration and approval of development agreements pursuant to the Development Agreement Statute.

1.17 City Manager. "City Manager" means the City Manager of City. -4-
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1.18 City Wide Traffic Improvements. "City Wide Traffic Improvements" means those traffic improvements identified in the Traffic Impact Mitigation Fee established in Article 7.

1.1 9 Claims or Litigation. "Claims or Litigation" means any challenge by adjacent owners or any other third parties (i) to the legality, validity or adequacy of the General Plan, Land Use Regulations, this Agreement, Development Approvals or other actions of the City pertaining to the Project, or (ii) seeking damages against the City as a consequence of the foregoing actions, for the taking or diminution in value of their property or for any other reason.

1.20 Dedicate or Dedication. "Dedicate" or "Dedication" means to offer the subject land to the City .

1.21 Default. "Default" refers to auy material default, breach, or violation of a provision of this Development Agreement as defined in Section 13 below. "City Default" refers to a Default by the City, while "Developer Default" refers to a Default by the Developer.

1.22 Developed Property. "Developed Property" shall mean residential property for which a certificate of occupancy has been issued or a final inspection conducted.

1.23 Development Goals. "Development Goals" shall have the meaning set forth in Section 6.2 below.

1.24 Developer's Property. "Developer's Property" means the 1543 acres of land, more or less, described in Exhibit A in which Developer holds a legal orequitable interest and upon which the Project will be developed.

1.25 Development. "Development" means the improvement of the Developer's Property for purposes of effecting the structures, improvements and facilities composing the Project including, without limitation: grading, the construction of infrastructure and public facilities related to the Project, whether located within or outside the Developer's Property; the construction of structures and buildings; the installation of landscaping; and the operation, use and occupancy of, and the right to maintain, repair, or reconstruct, any private building, structure, improvement or facility after the construction and completion thereof, provided that such repair, or reconstruction takes place during the Term of this Agreement on parcels subject to this Agreement.

1.26 Development Agreement Statute. "Development Agreement Statute" means §§ 65864 through 65869.5 of the Government Code as it exists on the Effective Date.

1.27 Development Approvals. "Development Approvals" means all sitespecific (meaning specifically applicable to the Developer's Property only and not generally applicable to some or all other properties within the City) plans, maps, permits, and entitlements to use of every kind and nature. Development Approvals includes, but is not limited to, specific plans, site plans, tentative and final subdivision maps, vesting tentative maps, variances, zoning designations, planned unit developments, conditional use permits, grading, building and other similar permits, the site-specific provisions of general plans, environmental assessments, including environmental impact reports, and any amendments or modifications to those plans, -5-
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maps, permits, assessments and entitlements. The term Development Approvals does not include rules, regulations, policies, and other enactments of general application within the City.

1.28 Development Impact Fees. "Development Impact Fees" means the monetary consideration, other than a tax or assessment, charged by the City in connection with mitigating the Project's specific impacts and the development of the public facilities related to the Development of the Project, including those fees, calculated on the basis of the number of residential units or square footage of non-residential development to be constructed, as set forth on Exhibit "D" attached hereto as well as those Development Impact Fees set forth in Exhibit B and being revised. Development Impact Fees do not include Processing Fees.

1.29 Development Plan. "Development Plan" means the Existing Development Approvals, Future Development Approvals and Existing Land Use Regulations.

1.30 Director. "Director" means the City's Director of Community Development or equivalent official.

1.31 Economically Distressed Year. "Economically Distressed Year" means any calendar year in which the number of building permits for single family dwelling units issued in Western Riverside County (includes all cities and unincorporated county territory) are less than 50% of the average number of building permits issued during the prior 25 years, based on the annual report of the California Construction Industry Research Board. For example, for the 25 year period from 1987 to 2011, inclusive, total permits issued were 235,455 and the annual average was 9418. In 2008, 2009, 2010 the total permits issued were 2794, 2717 and 3321, so all three years would have been declared "Economically Distressed" herennder. If the number of building permits issued in any calendar year are not available from the California Construction Industry Research Board, then the City shall obtain them from any other reliable source measuring the same data over the period.

1.32 Effective Date. "Effective Date" means the date this Agreement becomes effective as set forth in Section 3.5.

1.33 Eligible Facitlities. "Eligible Facilities" means the Proposed Project Facilities and other public facilities, fees and contibutions for public facilities, as described in the Financing Plan.

1.34 Exaction. "Exaction" means Dedications, payment of Development Impact Fees and/or construction of public infrastructure by the Developer as part of the Development of the Project. The development will be subject to all development and/or in lieu fees currently in the process of being studied by the City as indentified in Section 7.22 so long as they are adopted prior to the issuance of building permits for specific portions of the development proposed herein. The amonnt of the fees shall be as required at the time of issuance of building permits.

1.35 Existing Development Approvals. "Existing Development Approvals" means only the Development Approvals which are listed on Exhibit "B." -6-
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1.36 Existing Land Use Regulations. "Existing Land Use Regulations" means those Land Use Regulations applicable to the Property in effect on the Effective Date.

1.37 Financing Plan. "Financing Plan" means Exhibit "H" attached hereto.

1.38 Force Majeure. "Force Majeure" shall have the meaning set forth in Section 19.2 below.

1.39 Future Development Aoorovals. "Future Development Approvals" means those Development Approvals applicable to the Developer's Property approved by the City after the Effective Date such as tentative tract maps, subdivision improvement agreements and other more detailed planning or engineering approvals.

1.40 General Plan. "General Plan" means the City's General Plan as it exists on the Effective Date, and as expressly amended by (i) General Plan Amendment 11-2501 approved by the City Council concurrently with this Agreement; and (ii) future amendments applicable to the Developer's Property, if permitted, by Article II.

1.41 Goals and Policies for Financing. "Goals and Policies for Financing" or "Goals and Policies" means the City's goals and policies adopted in accordance with Section

5.2.1. 1.42 Golf Course/Active Open Space. "Golf Course/Active Open Space" means the area containing all of Planning Area 35 and Planning Area 39 as described in the Specific Plan and Sections 5.3 and 5.9.10 below.

1.43 Grading Permit. "Grading Permit" means a permit issued by the City's Division of Building and Safety which allows the excavation or filling, or any combination thereof, of earth.

1.44 hnprovement Area. "hnprovement Area" shall have the meaning set forth in Section 5.1 below.

1.45 Innocent Owner. "Innocent Owner" shall have the meaning set forth in Section 13.6 below.

1.46 LAFCO. "LAFCO" means the Riverside County Local Agency Formation Commission.

1.47 Land Use Regulations. "Land Use Regulations" means those ordinances, laws, statutes, rules, regulations, initiatives, policies, requirements, guidelines, constraints, codes or other actions of the City which affect, govern, or apply to the Developer's Property or the implementation of the Development Plan. Land Use Regulations include the ordinances and regulations adopted by the City which govern permitted uses of land, density and intensity of use and the design of buildings, applicable to the Property, including, but not limited to, the General Plan, the Specific Plan, zoning ordinances, development moratoria, implementing growth management and phased development programs, ordinances establishing development exactions, subdivision and park codes, any other similar or related codes and building and -7-
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improvements standards, mitigation measures required in order to lessen or compensate for the adverse impacts of a project on the environment and other public interests and concerns or similar matters. The term Land Use Regulations does not include, however, regulations relating to the conduct of business, professions, and occupations generally; taxes and assessments; regulations for the control and abatement of nuisances; building codes; encroachment and other permits and the conveyances of rights and interests which provide for the use of or entry upon public property; any exercise of the power of eminent domain; or similar matters.

1.48 Legal or Equitable Interest. "Legal or Equitable Interest" means (i) an option or purchase agreement or (ii) fee title evidenced by appropriate title insurance issued in favor of the Developer.

1.49 LMD. "LMD" means the Landscape and Maintenance District established pursuant to Streets and Highways Code § 22500 et seq. to fund parks, parkways, City rights of way landscaping and common areas.

1.50 Local Agency. "Local Agency" means any public agency authorized to levy, create or issue any form of land secured fmancing over all or any part of the Project, including, but not limited to, the City.

1.51 Lot. "Lot" means any of the parcels legally created within the Project as a result of any approved fmal subdivision, parcel or tract map, pursuant to the Subdivision Map Act or recordation of a condominium plan pursuant to Civil Code § 1352 .

1.52 Master Tract Map. "Master Tract Map" (or "A Map") means a large scale tract map covering one or more complete Planning Areas which will include all infrastructure necessary to develop the tract and a phasing plan as to the development of the infrastructure and the subsidiary subdivisions within the tract. The Master Tract Map is a subdivision map within the meaning of the Subdivision Map Act and shall meet the requirements of the Act and of this Agreement. The Master Tract Map may also be a fmancing map for purpose of financing the development ofthe Project or the conveyance ofiarge lots and may not require the actual construction of improvements.

1.53 Mortgage. "Mortgage" means a mortgage, deed of trust, sale and leaseback arrangement or other transaction in which all, or any portion of, or any interest in, the Developer's Property is pledged as security.

1.54 Mortgagee. "Mortgagee" refers to the holder of a beneficial interest under a Mortgage.

1.55 Mortgagee Successor. "Mortgagee Successor" means a Mortgagee or any third party who acquires fee title or any rights or interest in, or with respect to, the Developer's Property, or any portion thereof, through foreclosure, trustee's sale, deed in lieu of foreclosure, lease termination, or otherwise from, or through, a Mortgagee. If a Mortgagee acquires fee title or any right or interest in, or with respect to, the Developer's Property, or any portion thereof, through foreclosure, trustee's sale or by deed in lieu of foreclosure and such Mortgagee subsequently conveys fee title to such portion of the Developer's Property to a third party, then such third party shall be deemed a Mortgagee Successor. -8-
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1.56 Municipal Code. "Municipal Code" means the City's Municipal Code as it existed on the Effective Date and as it may be amended from time to time consistent with the terms of this Agreement.

1.57 Non-Defaulting Party. "Non-Defaulting Party" shall have the meaning set forth in Section 13.1 below.

1.58 Owner. "Owner" means Pardee Homes and any successors during the period of time that each such person or entity owns fee title to any portion of the Developer's Property prior to the development of such portion of the developer's Property and subject to the terms of this Agreement.

1.59 Park fees. "Park Fees" means Development Impact Fees levied by the City for Open Space and Park Development pursuant to Chapter 15.68 of the Municipal Code.

1.60 Phase. "Phase" shall have the meaning set forth in Section 6.2 below.

1.61 Phasing Plans. "Phasing Plans" shall mean the detailed plans for development of the Proposed Project Facilities and other infrastructure and for the Project which are developed pursuant to Section 6.5 as a part of processing the Subdivision Maps.

1.62 Planning Area. "Planning Area" means each of the 75 planning areas described in the Specific Plan, and shown on Exhibit "A."

1.63 Planning Commission. "Planning Commission" means the City's Planning Commission.

1.64 Pre-Oualified Buyer. "Pre-Qualified Buyer" means a publicly traded builder or developer or a privately held merchant builder with a minimum net fmancial worth of Five Million Dollars ($5,000,000) who has constructed at least 75 homes in California during the preceding five year period.

1.65 Property Owner's Association or POA. "Property Owner's Association" or "POA" means one or more association formed among the owners of real estate located within the Property (as the same may be subdivided from time to time), including, but not limited to, one or more associations of homeowners and/or other associations of owners of industrial, commercial, educational and retail property.

1.66 Processing Fees. "Processing Fees" means (i) the City's normal fees for processing, enviroumental assessment/review, tentative tracts/parcel map review, plan checking, site review, site approval, administrative review, building permit (plumbing, mechanical, electrical, building), inspection and similar fees imposed to recover the City's costs associated with processing, review and inspection of applications, plans, specifications, etc., and (ii) fees and charges levied by any other public agency, utility, district or joint powers authority, whether or not City is a member of such body or such fees are collected by the City, and whether or not such fees are used for maintenance or capital outlay purposes. -9-
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1.67 Project. "Project" means the Development ofthe Developer's Property, pursuant to this Agreement and the Existing Land Use Regulations, as depicted on Exhibit "B" attached hereto.

1.68 Proposed Project Facilities. "Proposed Project Facilities" means those improvements set forth on Exhibit "F" attached hereto or otherwise included in conditions of approval of the maps.

1.69 Reimburse or Reimbursement. "Reimburse" or "Reimbursement" means the provision by the City of cash or credit in return for land, goods or services provided by Pardee Homes.

1.70 Reservations of Authority. "Reservation of Authority" shall have the meaning set forth in Article II below.

1.71 Services Special Tax. "Services Special Tax" shall mean the special tax authorized to be levied by the CFD(s) established over the Developer's Property to alleviate the negative fiscal impact of the Project on City services as established by the Fiscal hupact Analysis ("FIN') and as further described in Section 5.3 below.

1. 72 Specific Plan. "Specific Plan" means the Butterfield Specific Plan, prepared by RBF Consulting and approved by the City Council by Ordinance No. 1450 introduced on March 27,2012, adopted on April 10, 2012.

1. 73 Subdivision Map. "Subdivision Map" (or "B Map") means the subsidiary subdivision maps for the development of any Tract which shall be consistent with the conditions of the Master Tract Map and shall contain its own phasing plan for the installation of the infrastructure and other improvements within the subdivision. All subdivision maps shall meet the requirements ofthe Subdivision Map Act including § 66473.7 (See 65867.5).

1.74 Subdivision Map Act. "Subdivision Map Act" means Government Code § 66412 et seq. as implemented by Title 16 of the Municipal Code.

1.75 Taxes. "Taxes" means general or special taxes, including but not limited to ad valorem property taxes, sales taxes, transient occupancy taxes, utility taxes or business taxes of general applicability citywide which do not burden the Developer's Property disproportionately to similar types of development in the City and which are not imposed as a condition of approval of a development project. Taxes do not include Development Impact Fees, Processing Fees or Traffic Control Facility Fees.

1.76 Ten or 10th Year Anniversarv Review. "Ten Year Anniversary Review" means the review performed upon each 10th anniversary of the Effective Date as provided in Section 6.6.

1.77 Term. "Term" means that period oftime during which this Agreement shall be in effect and bind the Parties, as defined in Article 6.7 below. -10- 01102/00121108862.12
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1.78 Traffic Control Facilitv Fee. "Traffic Control Facility Fee" means the fee set forth in Exhibit "B" attached hereto.

1.79 Transfer. "Transfer" shall have the meaning set forth in Article 14 below.

1.80 Trigger Percentages. "Trigger Percentages" shall have the meaning set forth in Section 14.1.1 below.

1.81 TUMF. "TUMF" means the Transportation Uniform Mitigation Fee promulgated by the Western Riverside Council of Governments and implemented by Chapter

15.76 of the Municipal Code.

1.82 Zoning Code. "Zoning Code" means Title 17 of the Municipal Code as it existed on the Effective Date except (i) as amended by any zone change relating to the Developer's Property approved concurrently with the approval of this Agreement, including Zone Change No. 11-3501, and (ii) as the same may be further amended from time to time consistent with this Agreement.

2. EXHIBITS.

The following are the Exhibits to this Agreement:

Exhibit "A": Map and Legal Description of the Developer's Property Exhibit "B": Existing Development Approvals/Fee Studies Exhibit "C": Estoppel Certificate
Exhibit "D": Development Impact Fees
Exhibit "E": Additional Agreements Concerning Development Exhibit "F": Proposed Project Facilities
Exhibit "G": Highland Springs Avenue Improvements
Exhibit "H": Butterfield Project Financing Plan

3. TERM.

3.1 Term. The term of this Development Agreement (the "Term") shall commence on the Effective Date and shall continue for a period of forty (40) years, subject to review, as called for in Section 6.2 below, to determine whether the Development Goals have been met, and reduction in the Term of five (5) years for each time the Development Goals of a Phase are not met and extensions for Economic Distress, as provided in Sections 6.6.5 and 6.7 below.
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3.2 Termination Upon Completion of Construction. This Agreement shall terminate with respect to any Lot, and such Lot shall be released and no longer subject to this Agreement, without the execution or recordation of any further document, when a certificate of occupancy has been issued for the last building on the Lot or, if no certificate is issued, when the [mal inspection for the last building on the Lot has taken place.

3.3 Termination for Default. This Agreement may be terminated due to the occurrence of any default in accordance with the procedures in Article 13.

3.4 Extension of the Term: The Term shall be extended by one (I) year for each Economically Distressed Year occurring during any Phase up to a maximum of three (3) years for any Phase.

3.5 Effective Date. This Agreement shall become effective upon the date thirty (30) days after the adoption of the Authorizing Ordinance if no Claim or Litigation have been filed which would prevent the Authorizing Ordinance from taking effect. If such a Claim or Litigation has been filed, then the Effective Date shall be the date that the Claim or Litigation has been successfully resolved in the City's favor, and the time for any further judicial review has run, so that the Authorizing Ordinance shall be effective. The City shall give Developer notice as to the date established as the Effective Date. The Effective Date is not otherwise tolled for any other Force Majeure as described in Section 19.2.

4. DEVELOPMENT OF THE DEVELOPER'S PROPERTY.

4.1 Right to Develop. During the Term, the Developer shall have a vested right to develop the Developer's Property (subject to Article 11 below) to the full extent permitted by the Development Plan and this Agreement. Except as provided within this Agreement, the Development Plan shall exclusively control the development of the Developer's Property (including the uses of the Developer's Property, the density or intensity of use, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes and the design, improvement and construction standards and specifications applicable to the Project). The maximum number of residential units authorized to be constructed hereunder and the approximate acreage of commercial development, without regard to any density bonus or incentive or concession for child care pursuant to Government Code §§ 65915 through 65918 or other similar legislation or regulation, is 5,387 units and approximately 36-acres of commercial development. In furtherance of the foregoing, the Developer retains the right to apportion the uses, intensities and densities, between itself and any subsequent Owners, upon the sale, transfer, or assignment of any portion of the Property, so long as such apportionment is consistent with the Existing Land Use Regulations and this Agreement.

4.2 Right To Future Approvals. Subject to the City's exercise of its police power authority as specified in Article 11 below, the Developer shall have a vested right: (i) to receive from the City all future Development approvals for the Developer's Property that are consistent with, and implement, the Existing Land Use Regulations and this Agreement; (ii) not to have such approvals be conditioned or delayed for reasons which are inconsistent with the Existing Land Use Regulations or this Agreement; and (iii) to Develop the Developer's Property in a mauner consistent with such approvals in accordance with the Existing Land Use -12-
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Regulations and this Agreement. All future Development Approvals for the Developer's Property, including without limitation General Plan amendments, zone changes, or parcel maps or tract maps, shall upon approval by the City, be vested in the same manner as provided in this Agreement for the Existing Land Use Regulations, for the term of this Agreement.

4.3 Existing Development Approvals. Only those items specifically set forth on Exhibit "B" hereto are deemed Existing Development Approvals for purposes of this Agreement. Any approvals not included within Exhibit "B" shall not apply to the Project with the exception of those reservations set forth in Article 11 below.

4.4 Specific Plan. Land use and Development of the Property shall be governed by the Specific Plan and this Agreement. Notwithstanding any other provision of this Agreement, the Developer shall have the right, but not the obligation, to Develop the Developer's Property for the uses specified in the Specific Plan at the locations specified in the Specific Plan.

4.5 Priority Of Specific Plan. The City has determined that the Specific Plan is consistent with the General Plan and the Zoning Code. As such, the Specific Plan shall be the primary document governing the use and Development of the Developer's Property and, in the event of a conflict, shall prevail over any other of the Existing Land Use Regulations except for this Agreement, which prevails over the Specific Plan.

4.6 Later Enacted Measures. This Agreement is a legally binding contract which will supersede any initiative, measure, moratorium, statute, ordinance, or other limitation enacted after the Effective Date, except as provided in Article 11. Any such enactment which affects, restricts, impairs, delays, conditions, or otherwise impacts the implementation of the Development Plan (including the issuance of all necessary Future Project Approvals or permits for the Project) in any way contrary to the terms and intent of this Agreement shall not apply to the Project unless otherwise provided by State law.

4.7 Impact Fee Studies. As provided in Section 7.2, studies for certain Development Impact Fees, listed in Exhibit "D," will be performed after the Effective Date of this Agreement and shall become a part of the Existing Development Approvals. Additionally, Development Impact Fees are subject to review and adjustment as a part of the 10 Year Anniversary Reviews, in accordance with Section 6.6. The cost of performing the studies may be included in the fees.

5. FINANCING AND THE CITY'S OBLIGATIONS.

5.1 Formation of CFD(s) and LMDs. Subject to the provIsions of this Article 5, some or all of the Eligible Facilities shall be funded through the City's formation of one or more CFDs and the levy of a special tax of the CFD(s) (the "Facilities Special Tax") and issuance of bonds secured by the Facilities Special Tax (the "Bonds") in accordance with the Financing Plan set forth in Exhibit H. Such CFD(s) shall, pursuant to Section 5.3, also be authorized to fmance certain City public services costs (incurred as a result of Development of the Developer's Property) through the levy of a special tax, in the not to exceed amount set forth in the Financing Plan, on each residential unit located within the boundaries of such CFD(s) (the -13-
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"Services Special Tax"). Additionally, landscape maintenance districts ("LMDs") may be formed under Section 5.6.

5.1.1. Procedures for Formation. The City and the Developer shall cooperate in good faith to form one or more (i) CFDs and/or designate improvement areas therein (the "Improvement Areas"), (ii) LMDs and designate improvement areas therein (also "Improvement Areas"), and (iii) CFDs for the Special Services Tax (collectively referred to herein as the "Financing Districts"), which are consistent with the Financing Plan and which in the aggregate will encompass and encumber the Developer's Property. Final terms and conditions regarding the formation of the Financing Districts, their boundaries, Improvement Area boundaries, the rate and method of apportionment of the Services Special Taxes and Facilities Special Taxes to be levied in any CFD, LMD and/or Improvement Area (including any tax zones therein), any acquisition or construction agreements related thereto, and the terms of one or more series of Bonds to be issued in conjunction therewith shall be determined jointly by City and the Developer in accordance with the Financing Plan and the City's Goals and Polices for Financing. In conjunction with the formation of any Financing District, the Developer and the City shall cooperate in good faith to negotiate and finalize any acquisition and funding agreement prior to the formation of the first Financing District addressing the terms of construction, acquisition and financing of any of the Eligible Facilities to be funded by the Financing District (such agreement to be referred to herein as the "Acquisition Agreement").

Developer shall cooperate in the establishment of the levy over Developer's Property and not exercise any rights of protest.

5.1.2. Timing of Formation. Developer shall prepare all studies and submit all documents necessary to form the Financing Districts within one year after the adoption of City's Goals and Policies for Financing. After Developer has initiated formation of the Financing Districts, City shall form the Financing Districts consistent with the City's adopted Goals and Policies for Financing and State Law. City shall complete formation proceedings within 180 days after Developer makes the necessary submission. The Developer shall indemnity the City and hold it harmless against Claims or Litigation brought in connection with the formation ofthe Financing Districts.

5.1.3. Failure to Form Financing Districts. If any of the contemplated Financing Districts are not formed, or formed but not in accordance with the terms of this Agreement, through the failure of one Party to perform its obligations pursuant to Section

5.1, the other Party shall have the right, but not the obligation, to terminate this Agreement upon providing 30 days written notice to the Party which has failed to perform prior to the actual termination date.

5.2 Adoption of Goals and Policies for Financing. Before the Developer undertakes development of any units, the City shall retain a financial advisor and prepare a Citywide policy for undertaking land based CFD and assessment financing. The draft policy will be reviewed with the Developer and the City shall in good faith consider any comments made by the Developer on the draft policy. The goals and policies for Financing shall be adopted within 180 days after the Effective Date and shall be consistent with Exhibit H, including the Financing Parameters described therein. The goals and policies shall be adopted by Council by resolution and thereafter be the Goals and Policies for Financing. The City may amend the Goals and -14-
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Polices for Financing from time to time, and will be a part of the Existing Land Use Regulations hereunder, but such amendment shall not apply to the Development unless they are consented to by Developer.

5.3 Services Special Tax. The final Fiscal Impact Analysis prepared by the City's consultant, Willdan Financial Services, dated September 16, 2011, (the "FIA") demonstrates an overall negative fiscal impact on certain City public service costs incurred as a result of Development of the Developer's Property, including without limitation, the City's costs for police and fire services. The FIA demonstrates that such negative fiscal impact can fully be mitigated by an annual Services Special Tax, implemented as required by this Section 5.3 and the Financing Plan set forth in Exhibit "H" attached hereto. The annual services Special Tax shall not exceed $ 115 per dwelling unit of greater than 1820 square feet of habitable area and $92 per dwelling unit of 1820 or less square feet of habitable area in fiscal year 2013 -14 and shall increase each fiscal year thereafter by 3%. The Services Special Tax may be levied in perpetuity and shall only be levied by the CFD(s) formed pursuant to Section 5.1 on residential parcels classified as Developed Property, but Developer shall cooperate in the establishment of the levy over Developer's Property and not exercise any rights of protest.

5.4 Planning Area 19, 35, 39 and 71 Drainage Facilities. In the event that the Developer, in its sole and absolute discretion, determines that the Golf Course is financially infeasible, the flood control improvements within Planning Areas 35 and 39 shall be considered Proposed Project Facilities and may be funded through the CFD(s). If this occurs, then portions of the land within Planning Areas 35 and 39 will be dedicated as public open space and the remaining portions dedicated to flood control appurtenances, to be transferred to the City or the Riverside County Flood Control District upon completion of the flood control facilities on such site and shall be improved to the Master Plan Standards of District. Plans for developing the necessary improvements Shall be developed as a part of the Phasing Plans pursuant to Section

6.5, but improvements may not be required until the City Engineer determines that development will (i) intrude into the flood plan or (ii) cause the alteration of Smith Creek. The City Engineer may approve temporary improvements until the scale of the portion of the Project completed requires permanent structures. Upon transfer ofthe portions of the Planning Areas relating to the flood control facilities to the City or District, if the CFD( s) are formed or, as soon thereafter as the CFD(s) are formed, the City shall pay the agreed upon construction costs to the Developer from available CFD Proceeds in accordance with the Financing Plan. (Also see Sections 8.1.3. and 8.2.)

5.5 Reimbursement Agreements. If, and to the extent that, the Developer constructs or installs any infrastructure and/or facilities that have a capacity or size in excess of that required to serve the Project or to mitigate its impacts, the City shall reimburse the Developer for all costs and expenses incurred by the Developer in constructing such improvements for that portion of the Dedications, public facilities and/or infrastructure that the City, pursuant to this Agreement, may require pursuant to the Existing Land Use Regulations.

The City further shall adopt ordinances, including but not limited to those authorized by Government Code § 66485 et seq., as may be required in order to impose a reimbursement obligation on other properties which may be served or benefited by the oversized infrastructure or facilities. The terms of the Reimbursement Agreements shall otherwise be consistent with the City's forms generally used with all other development projects of over 200 units. Such -15-
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reimbursement shall be paid to the Developer at the earliest opportunity out, and upon collection, of available fees from benefited developments so long as consistent with City's other contractual obligations. Repayment shall not extend beyond the Term of this Agreement.

5.6 Landscape Maintenance Districts. The City shall take, and Developer shall support, all steps necessary to establish LMD(s) or other maintenance districts, to fund maintenance of City parks, parkways, City rights of way landscaping, and common areas as provided in Section 5.1. The Developer shall make a deposit to pay the cost for review and approval of all agreements, studies, analysis and actions necessary for the establishment of the LMD(s).

5.7 Reimbursement for Pre-Approval Costs. The City shall provide fee credits to the applicable DIPs, as set forth below, for those residential units for which Commencement of Construction occurs by the twelfth anniversary of the Effective Date, but not more than for the first 1200 units. "Commencement of Construction" as used herein shall have the same meaning as under Section 6.3. The units eligible for fee credits for reimbursement shall be those of the 1200 which are not eligible for the incentive provided for in Section 6.8. If the incentive is taken in accordance with Section 6.8, then the amount of the credit for each unit for each fee shall be determined by taking the amount of cost to be reimbursed and dividing it by 1200 minus the number of units eligible for the incentive. As an example, if the total amount of the cost to be reimbursed is $227,500 and the number of units eligible for the incentive is 400, then the amount of the credit for each unit after the first 400 within the 12 years following the Effective Date will be $227,500/(1200-400) = $227,500/800 = $284 rounded to the nearest dollar. These fee reimbursements may be included in the subsequent fee studies performed pursuant to Section 7.2.2. [The per unit figure shown below assumes the credit is taken over 1200 units.]

5.7.1.1 A fee credit against updated Sewer Sanitary Fee and Recycled Water Fee of $227,500 or $189.60 per unit for the Corolla Study related to the sewer and recycled water master plans.

5.7.1.2 A fee credit against the updated Domestic Water Fee of $1,115,000 or $929.17 per unit for the consultant time related to the preparation of the City's 2010 Urban Water Management Plan.

5.7.1.3 A fee credit against the proposed revised Traffic Control Facility Fee of $105,000 or $875 per unit for the consultant time related to the preparation of the Traffic Impact Analysis and related traffic fee prepared documents.

5.7.1.4 A fee credit against the proposed revised Traffic Control Facility Fee of$45,000 or $375 per unit for the development of Citywide fees related to the Traffic Impact Fees study or other fee studies required as a result of entitlement activities.

5.7.1.5 A fee credit against the proposed revised Traffic Control Facility Fee or other appropriate fee of $550,000 or $462.50 per unit for the consultant time and plan preparation for required studies related to pre-project improvements to Highland Springs near the 1-10 freeway.
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5.7.1.6 A fee credit against the General Plan Fee of
$187,500 or $156 per unit for the General Plan Traffic Circulation Element Amendment preparation.

5.8 Obligations of Developer Respecting Financing; No Speculation.

Except as specifically provided herein, it is expressly understood that the Developer is fully responsible for the cost of the Project and obtaining any necessary construction or long term financing therefore. The Developer's Property shall be used solely to support the development of the Project and may not be pledged as security to support fmancing for any other purpose, in accordance with Article 18.

6. TIME FOR CONSTRUCTION AND COMPLETION OF PROJECT.

6.1 Timing of Development. The Parties acknowledge that the substantial public benefits to be provided by the Developer to the City pursuant to this Agreement are in consideration for, and in reliance upon, assurances that the City will permit Development of the Developer's Property in accordance with the terms of this Agreement. Accordingly, the City shall not attempt to restrict or limit the Development of the Developer's Property in any manner that would conflict with the provisions of this Agreement. The City acknowledges that the Developer cannot at this time predict the timing or rate at which the Developer's Property will be Developed. The timing and rate of Development depend on numerous factors such as market demand, interest rates, absorption, completion schedules and other factors, which are not within the control of the developer or the City. In Pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, the California Supreme Court held that a construction company was not exempt from a city's growth control ordinance notwithstanding that the construction company and the city had entered into a consent judgment (tantamount to a contract under California law) establishing the company's vested rights to develop its property in accordance with the zoning.

The California Supreme Court reached this result on the basis that the consent judgment failed to address the timing of development. It is the intent of the Parties to avoid the result of the Pardee case by acknowledging and providing in this Agreement that the Developer shall have the vested right to Develop the Developer's Property in such order and at such rate and at such time as the Developer deems appropriate, but in accordance with the Development Goals and the phasing plans developed in accordance with Section 6.5, and in accordance with other terms hereof or in the Development Approvals related to project phasing and timing. In addition to, and not in limitation of, the foregoing, but except as set forth in the following sentence, it is the intent of the Parties that no City moratorium or other similar limitation relating to the rate or timing of the Development of the Developer's Property or any portion thereof, whether adopted by initiative, referendum or otherwise, shall apply to the Developer's Property to the extent that such moratorium, referendum or other similar limitation is in conflict with this Agreement.

Notwithstanding the foregoing, the Developer acknowledges that nothing herein is intended or shall be construed as (i) overriding any provision of the Existing Land Use Regulations to the phasing of development of the Project; or (ii) restricting the City from exercising the powers described in Section 11 of this Agreement to regulate development of the Property. Nothing in this Section 6.1 is intended to excuse or release the Developer from any obligation set forth in this Agreement which is required to be performed on or before a specified calendar date or event without regard to whether or not one or more Owners proceeds with any portion of the Project.

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that the Project be Developed in any specific order but, instead, are illustrative of how the Project may be Developed. The Project Phasing instead is controlled by this Agreement.

6.2 Development Goals. Notwithstanding the provisions of Section 6.1, the Developer must achieve certain goals and objectives in terms of Project development in order to keep the Agreement in place for the full term contemplated in Section 3.1. The development of the Project will be reviewed at each Ten Year Anniversary Review. The Development Goals are as follows:

Phase I (10m Anniversary)
• Development will begin near the comer of
Highland Springs and Wilson unless
otherwise agreed
• 1,200 Residential Units to be constructed
• Commercial retail development per 6.2.4
• Outlet for Smith Creek and other
improvements in Section 6.2.3.

Phase II (20th Anniversary • 1,600 residential units to be constructed Phase III (30m Anniversary) • 1,400 residential units to be constructed Phase IV (40m Anniversary) • 1,187 residential units to be constructed

6.2.1. Cumulative Measure of Units. The Development Goals for each Phase shall be cumulative, e.g., if the Developer has constructed 2000 Residential Units in Phase I and 1000 Residential Units in Phase II, then the Developer will have met the Development Goal for Phase II even though less than 1500 Residential Units were constructed during Phase II.

6.2.2. More Detailed Phasing Plans Developed. Within each Phase, as defined above, more detailed phasing plans for each subdivision shall be developed in accordance with Section

6.5, and are subject to the City's review and approval as conditions of approval of the Tract or Subdivision Map and, as approved, shall become a part of the Existing Approvals.

6.2.3. Additional Phase I Development. In addition to the residential unit Development Goals, Phase I shall also include: (i) commercial development as specified in Section 6.2.4, (ii) the outlet for the Smith Creek flood control improvements at Wilson, (iii) the preparation and dedication of the RecreationlEmergency Center site described in Section 8.1.4, (iv) the satellite water treatment plant described in Section 8.3, (v) the water tanks described in Section 8.5; and (vi) such other Proposed Project Facilities as required by the Specific Plan and the Phasing Plans approved pursuant to Section 6.5. Notwithstanding the specification oftiming as provided herein, with the approval of the City Manager, any public improvement required herein may be deferred for good cause.

6.2.4. Commercial Development. A minimum 23-acre retail-commercial site at the comer of Highland Springs and Wilson (Planning Area 18) will be prepared as a part of Phase I, and concurrently with the development undertaken pursuant to Section 6.8. Site preparation -18-
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shall require the grading of the Site, construction of surrounding streets, and bringing all necessary utilities and infrastructure for development. Developer shall also demonstrate a good faith effort undertaken over at least a five (5) year period to market the site for sale or lease to a suitable user. Additionally, Developer shall maintain the potential to expand the site to as much as 88 acres to permit a larger commercial development, provided that such expanded project obtains any necessary entitlements. Developer shall advise City within five (5) years of the Effective Date as to what interest there might be in the expanded project and the parties will mutually agree as to the scope of the project. The timely preparation and attempts to market this site is required for completion of Phase I and is subject to the same treatment as the residential units (i.e. phasing period can be prolonged for economic distress and the Term of Agreement can be shortened pursuant to Section 6.7). The goal of the City is to locate a significant sales tax generating "big box user" as the major tenant of the project. Accordingly, City retains the right to approve the major tenant in the project (tenants over 75,000 sq. ft), in accordance with the provisions in Article 14 as a transferee by lease or sale.

6.2.5. Extensions of Phases. The length of each Phase for the purposes of this Section

6.2 shall be extended by one (1) year for each Economically Distressed Year occurring during the Phase, up to a maximum ofthree (3) years as provided in Section 6.6.5.

6.3 Development Goals Satisfied By Commencement of Construction. The Development Goals for residential units specified above are satisfied if construction has commenced. "Commencement of Construction" of a residential unit means that building plans have been approved, that a building permit has been issued and that construction has commenced on the unit. The unit shall not be counted if the building permit expires without completion of the unit.

6.4 Public Improvements. The Parties understand and agree that the Specific Plan identifies the public infrastructure and though it contains phasing concepts, it does not specify precisely the phasing ofthe construction of public infrastructure. The development phasing will be consistent with the Specific Plan and this Agreement. The City desires that required public infrastructure generally be constructed in the early portion of the applicable phase of the development cycle subject to the guidelines specified below. In consideration of the foregoing, notwithstanding any provision herein to the contrary, the City shall retain the right to condition any Future Approvals to require Developer to dedicate necessary land, pay the development fees specified in Article 7, and/or to construct the required public infrastructure ("Exactions"), at such time as City shall determine in accordance with the process in Section 6.5 and subject to the following conditions:

A. The dedication, payment or construction must be to alleviate an impact caused by the Project or be of benefit to the Project; and B. The timing of the Exaction should be reasonably related to the phasing of the development of the Project and said public improvements shall be phased to be commensurate with the logical progression of the Project development as well as the reasonable needs of the public and the improvements shall be completed based upon the needs of the general public existing from time to time. -19-
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When the Developer is required by this Agreement and/or the Development Plan to construct any public improvements which will be dedicated to the City or any other public agency, upon completion, and if required by applicable laws to do so, the Developer shall perform such work in the same manner and subject to the same construction standards as would be applicable to the City or such other public agency should it have undertaken such construction work. The Developer shall pay prevailing wages as required by law.

6.5 Development of Phasing Plans During Subdivision Map Approvals. The phasing and timing requirements for the construction of all development including public improvements shall generally be in accordance with the Development Approvals and applicable provisions of this Agreement (For example, Sections 6.2, 6.4, 6.5, 7.3, 8.0, etc.). Although the overall timing of Project development remains subject to the Developer's discretion based on market conditions in accordance with Section 6.1, there is a logical sequence to the development and certain improvements are required to be complete before phases of the Project can be considered complete and ready for occupancy. The Phasing Plan will be developed over time in accordance with the following process:

6.5.1. Master Phase Tract Map. Each Phase shall have a Master Tract Map which shall be submitted for financing and conveyance purposes only and no improvements may be constructed nor shall development be permitted pursuant to such approved Tract Map except through submission and approval of tentative and final Subdivsion Maps.

Concurrently with processing of the Master Tract Map, all tentative Subdivision Maps for the Tract shall be submitted and processed.

6.5.2. Subdivision Maps. Each Master Tract Map shall designate future subdivisions within the Tract and the order of subdivision development to the extent that the need for development of public infrastructure dictates the logical progression of subdivision development. Each Subdivision Map shall show all infrastructure necessary for the development of the Subdivision. Each subdivision will have a written Phasing Plan approved by the Director and the City Engineer prior to commencement of development of the subdivision specifying when the lots within the subdivision will be developed and when all public infrastructure within the subdivision will be constructed. Generally all streets, lighting, curbs and gutters, sidewalks, parkway landscaping, asphalt concrete paving, traffic signs and stripping, medians, landscaping, drainage facilities, storm drains, water lines, sewer lines, utility lines, trails and other facilities within the subdivision must be completed before release of any occupancy permits within the subdivision. All conditions which require the provision of Proposed Project Facilities and Subdivision Improvements for the area covered by each tentative Subdivision Map must be satisfied, either through performance or through the provision of suitable security, prior to the approval and recordation of the Subdivision Map.

6.5.3. Proposed Project Facilities. Attached as Exhibit "F" are diagrams showing Proposed Project Facilities and depicting the major public infrastructure of the development, including roadways, detention basins, water lines, sewer lines, recycle water lines, utilities, storm drains and drainage facilities, treatment plants, power substations, community parks, community centers, fire stations; and other infrastructure serving area-wide populations.

The Proposed Project Facilities serve multiple subdivisions, and may need to be constructed in the initial phase of a particular Tract, or even before certain Tracts can be developed. The -20-
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detailed phasing of construction will be provided through the Master Tract and Subdivision Phasing Plans, and subject to Section 6.4.

6.5.4. Time for Map Submission. The Developer shall submit all applications for tentative, or vesting tentative, Master Tract Maps and, concurrently with each application for a Master Tract Map, the applications for tentative, or vesting tentative, Subdivision Maps thereof within five (5) years of the Effective Date for the City's review and approval.

6.6 Ten Year AnniversarvReview.

6.6.1. Generally. On or about each Tenth Anniversary of the Effective Date as provided herein, the City shall conduct the Ten Year Anniversary Review") the City and the Developer review to shall review the performance of this Agreement, and the development of the Project to see if the Development Goals have been met. The cost of the Annual Review shall be borne by the Developer and the Developer shall pay a reasonable deposit in an amount requested by City to pay for such review.

As part of each Ten Year Anniversary Review, sixty (60) days before each tenth anniversary of this Agreement, the Parties shall mutually meet and outline the review process, including (i) the information needed and formats, (ii) the schedule for performing the review, (iii) indentifying any needed consultants and studies, (iv) the adequacy of current DIFs and any anticipated need for changes, (v) any adjustments to needed public infrastructure, (vi) the estimated deposit needed to pay the City's costs of performing the review, and (vii) other matters necessary for the review.

The Developer shall deliver to the City all information reasonably requested by City (i) regarding the Developer's performance under this Agreement demonstrating that the Developer has complied in good faith with the terms of this Agreement and (ii) as required by this Agreement or the Existing Land Use Regulations. The Developer's submittal shall include a written explanation of any reasons why the Development Goals were or were not met, and any request for the modification of future Development Goals in the next 10 year period, and the reasons therefore.

The Developer shall submit its report on or before the Tenth Anniversary.

Thereafter, the Director shall prepare and submit to City Council a written report on the performance ofthe Project. The Developer's written response shall be included in the Director's report. The report and recommendations to Council shall be made within 45 days of the anniversary, and a public hearing shall be held thereon.

6.6.2. Adjustment to DIFs. As provided in Section 7.2.2, all Development hnpact Fees are subject to adjustment as put of the Ten Year Anniversary Review provided (i) the adjustment is based on the preparation a suitable analysis by an independent professional consultant experienced in performing such studies demonstrating the basis for the increase, (ii) the study is performed on a City-wide basis and applies to all development projects of 200 or more residential units, (iii) all infrastructure financed is included within the City's General Plan and capital projects master plan, (iv) the study demonstrates a reasonable nexus to -21-
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the Project and the fees are proportionate to the benefit received. The Development Impact Fees shall not contain any escalators but the studies justifYing the fees may use cost numbers which recognize the ten year horizon of each study.

6.6.3. Parties Can Alter Development Goals Objectives. The Development Goals for the next Ten Year Anniversary Review period as set forth in Section 6.2 may be modified with the mutual agreement of the Parties at the time of the hearing set forth in Section 6.6.1. Unless the Parties reach agreement for modification, the Development Goals will remain as provided therein.

6.6.4. No Other Changes to Development Plan. Other than the Development Impact Fee adjustments provided in Section 6.6.2 which may be unilaterally approved by City subject to performing the required studies, no other changes to the Development Approvals may be made by City without the consent of Developer. Nothing herein shall restrict the City's reservations of rights under Article II.

6.6.5. Extensions Due to Economic Distress.

6.6.5.1 Determination of Distress. As provided in Section 6.2.4, the Phases can be extended up to three (3) years due to the occurrence of an Economically Distressed Year(s). In any year in which Developer believes conditions exist to warrant Declaration of an Economically Distressed Year, within 30 days following the Anniversary Date, Developer shall submit his request therefore. Additionally, in support thereof, Developer shall provide City with a Report including the following: (i) a written analysis of County-wide data supporting the Declaration; (ii) publicly available reports concerning general market conditions affecting home building; (iii) analysis as to how general market conditions have affected the Project including demand, costs and fmancing; and (iv) forecasts concerning the next three (3) years. The Report is for informational purposes only and City shall not be permitted to disapprove the Declaration of Economic Distress if the data submitted meets the definition in Section 1.31. Within 30 days the City Manger shall review the Declaration and Report and determine if the data supports the declaration of an Economically Distressed Year. The City Manager's determination is appealable to the Council under Section 13.6.3, but not as a default thereunder.

6.6.5.2 Effect of Determination on 10-Year Review. Generally the effect of the declaration of an Economically Distressed Year shall also toll the performance of the 10 Year Armiversary Review. For example, if during any 10 year cycle, two years had been declared Economically Distressed, then the lOY ear Anniversary Review would be performed on or about the Armiversary Date of the 12th year, as otherwise provided in Section 6.6. The City, however, retains the right to elect to perform the DIP adjustments in accordance with Section

6.6.2 on the 10 Year Anniversary, or to defer the studies and do them in accordance with the general lOY ear Anniversary Review performed on the date to which the Phase has been extended due to the extensions for Economically Distressed Years pursuant to Section 6.2.4.

6.7 Failure to Satisfy Phasing Goals and Objectives. For reasons stated in Section 6.1, failure to achieve the Development Goals in any ten year period shall not be a default hereunder, but it shall cause the term of the Agreement to be shortened five (5) years. -22-
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Accordingly, a failure at the first Ten Year Anniversary Review shall cause the term of the Agreement in Section 3.1 to be reduced to 35 years, while a failure at the second review in year 20 (to achieve 3000 units) shall cause the Agreement to be shortened another five (5) years to 30 years (subject to any extension of the Term due to the occurrence of Economically Distressed Years as set forth in Section 3.4), but once the Term has been reduced, the lost time is not reinstated due to production of excess units in later phases.

The termination of this Agreement shall not alter the provisions of the Specific Plan concerning the zoning, density of development or any other regulatory provisions concerning the development of the Project, though the limitations provided in Article 4 on enactment of Future Land Use Regulations would be null and void.

6.8 Developer Incentives for Expedited Development.

6.8.1. Incentive for Early Development. The City wishes to establish new communities in the City and to encourage the early development of the Project, which, in light of current economic conditions, may require economic incentives to be provided to the Developer. Accordingly, the Developer shall be given a credit so that DIFs do not have to be paid for up to 500 residential units, if Commencement of Construction, as that term is defined in Section 6.3, occurs on or before the production dates in Section 6.8.4.

6.8.2. Conditions for Receipt of Credits. To receive the credits, the following conditions must be satisfied: (i) the units must be in Planning Areas 1 and 2 provided that, for good cause, City may approve building the units in alternative Planning Areas, (ii) each Tract containing residential units needs to be developed as a single unit with appropriate entry design features including walls, fountains, landscaping, signage and other features approved by City, (iii) the preparation of the commercial site in Planning Area 18 shall take place pursuant to Section 6.2.4, unless waived by City.

6.8.3. Fees Eligible for Credit. The DIFs eligible for credit are those identified as eligible in Exhibit "D."

6.8.4. Schedule. The credit shall be given for all units for which the Commencement of Construction, as that term is defmed in Section 6.3, occurs within five (5) years after the Effective Date.

6.9 City Provided Assistance. The City shall provide the Developer with each of the items set forth in Exhibit "E."

7. FEES, TAXES AND ASSESSMENTS.

7.1 Processing Fees. During the Term of this Agreement, the City may require the Developer to pay all Processing Fees applicable to the Development of the Project at the rates in effect on the applicable application date or as described in this Agreement unless a specific amount is stated herein.
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7.2 Development Impact Fees.

7.2.1. Limit on Exactions, Mitigation Measures, Conditions and Development Fees. Except for those fees expressly set forth in Sections 7.3 and 7.5 below, and for the reservations of authority in Article 11, the City shall charge and impose only those Exactions, mitigation measures and conditions, including, without limitation, dedications as are set forth in the Existing Land Use Regulations, and those fees relating to the Development of the Developer's Property as are expressly set forth in Exhibit "D" attached hereto, and no others.

Per Section 7.4 below, Park Fees shall not be imposed during the life of this Agreement. The Developer shall pay the stated amount of all other fees shown in Exhibit "D" for the first 10 years of the Term, and subsequently adjusted amounts determined in accordance with Section

6.6.2. 7.2.2. Development Impact Fees to be Established Based on Studies. The City will study and establish DIFs within one year of the effective Date for the following: revised City Traffic Control Facility Fee, revised Domestic Water Fee, new Recycled Water Fee and revised Sanitary Sewer Fee. The Developer shall be obligated to pay the revised fees and the revised DIFs shall be considered part of the Existing land Use Regulations. The initial DIFs shall be established in accordance with fee studies meeting the requirements of Section 6.6.2.

7.2.3. Adjustment at 10 Year Anniversary Review. The
Developer shall pay increased fees after the Ten Year Anniversary Review if those fees are adopted on a City wide basis after the preparation of, and are justified by, a suitable analysis demonstrating the basis for the increase in accordance with Section 6.6.2. The City shall be entitled to repeat the process of increasing the fees thereafter upon the same terms, during the Ten Year Anniversary Review in accordance with Section 6.6.2, throughout the Term of this Agreement.

7.2.4. Payment of Development Impact Fees. The Developer shall pay all Development Impact Fees with respect to Development commenced on the portion of the Developer's Property owned by the Developer. The Development Impact Fees set forth on Exhibit "D" attached hereto shall be paid at the issuance of the Certificate of Occupancy for each building. Unless otherwise specified herein, all other fees, including Processing Fees shall be paid when at issuance of building permits or otherwise when required by code.

7.3 Wastewater, Domestic and Reclaimed Water Facilities Development Impact Fees.

7.3.1. Wastewater Fees. The City levies two capital facilities fees related to wastewater: (i) a sewer collection fee; and (ii) a sewer frontage fee, but collectively such fees are referred to herein as sewer collection fees. The sewer collection fee shall be fixed in accordance with Section 7.2.1 above.

7.3.2. Construction of Wastewater Collection Infrastructure in Lieu of Fees. If any additions, improvements and/or upgrades to the City's wastewater collection system outside or within the boundaries of the Developer's Property are required in -24-
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connection with any Development of the Project, then with the mutual agreement of the parties, the Developer shall have the option to elect to construct some or all of such additions, improvements and/or upgrades at its sole cost and expense. The City shall develop the project specifications and shall undertake a design process to develop project plans and drawings meeting the City's specifications. The City may utilize the Developer to develop the plans and drawings if the design costs are competitive and Developer has retained competent design professionals who can timely perform the services. If, thereafter, the Developer wishes to construct the improvements, the Developer shall give City a fixed budget and construction schedule, while City obtains competitive bids. City may award the contract to the most competitive entity, considering price, fmancing, schedule and ability to perform. The contract may include liquidated damages provisions and other requirements to assure the timely and satisfactory completion of the project within budget. If performed by Developer, upon completion of such works of improvement, the Developer shall be entitled to offset the actual costs approved by City and incurred by it for the design, permitting, construction and installation of such works of improvement against any wastewater collection-related Development Impact Fees that may otherwise be payable in connection with future Development of the portion of the Developer's Property owned by the Developer.

7.3.3. Wastewater Treatment Capacity. The City shall use its best efforts to obtain the required permits and to construct the needed improvements to the City's wastewater treatment facilities in order to serve the Project as the need for additional facilities arises. The Developer shall include the construction of the wastewater treatment plant within the phasing plan developed pursuant to Section 6.5. The City estimates that a four year lead time is required with one year for design and one year for permitting with the remaining period needed for construction.

7.3.4. Wastewater. Domestic and Reclaimed Water Facilities and Fees. If any additions, improvements and/or upgrades to the City's water system, either domestic or reclaimed, outside or within the boundaries of the Developer's Property are required in connection with any Development of the Project, then with the City's approval, they may be undertaken by the Developer in accordance with the procedures in Section 7.3.2. Without limiting the generality of the foregoing, this includes the water tanks, pipelines and appurtenant facilities described in Section 8.5.

7.3.5. Recycled and Domestic Water Fees. Recycled and
domestic water developer impact fees shall be established in accordance with Section 7.2.1 above. City does not currently have Development Impact Fees for reclaimed water facilities or for domestic water facilities for the Project. Within a year after the Effective Date, the City shall conduct a study to determine the reasonable charge and the Developer's pro rata share of the cost of such improvements. When adopted by the Council, the fees shall be considered incorporated herein as Existing Land Use Regulations, and shall be subject to further review at the Ten Year Anniversary Review as provided in Section 6.2.2.

7.4 Park Fees.

7.4.1. Construction of Facilities. The Developer will be constructing, installing and improving the park and recreation facilities listed below, which are -25-
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deemed to be park, recreation and/or open space for the purpose of complying with the Municipal Code's park fee requirements. All parkland and open space shall be maintained by the POA, the Developer, the City, the Golf Course operator or such other entity as approved by the City. Provided that all required parks and recreation facilities are constructed and installed in accordance with the Specific Plan and this Agreement, the Project shall not be subject to the imposition of Park Fees by the City. The City acknowledges that the value of the land and improvements for the park, recreation and open space land and facilities exceeds the aggregate of all park fees which may be charged by the City pursuant to the Municipal Code in connection with the proposed Development of the entire Project. The Developer shall construct and install within the Project's boundaries the following park and recreation facilities:

7.4.1.1 254-acre Golf Course or Active Open Space, as set forth in Sections 5.3 above and 8.1.3 below;

7.4.1.2 22 publicly accessible parks (each ranging in size from approximately less than 1 acre to over 16 acres), equipped by Developer with typical neighborhood park facilities, which may include picnic facilities, shade structures, playgrounds, turf areas, and related facilities as further defmed in the Specific Plan and in accordance with the plans developed in Section 8.1;

7.4.1.3 Two private recreation centers, totaling
approximately eight acres, which will be gated and accessible only to the residents of the Project.

These centers may, but are not required to, include clubhouse facilities, restrooms, and other amenities as further defmed in the Specific Plan; and

7.4.1.4 108.4 acres of additional open space as described in the Specific Plan.

7.4.2. Community Recreation Center. The City shall also be entitled to construct a community recreation center in Planning Areas 35 or 39, on any park or open space site or on any site identified for a public facility, such as a fire station or waste water treatment plant, if that site is not used for the public facility. Once the site has been identified, the Developer shall grade it and stub utilities to site. The Developer's obligations are further described in Section 8.1.4.

7.5 Traffic Impact Mitigation.

7.5.1. Fees to be Established. The City has established a Development Impact Fee for the purpose of collecting funds to pay for the cost of constructing localized transportation improvements. At the request of the City, the Developer may initiate a study to expand upon the existing Traffic Control Facility Fee to include additional improvements not currently covered in the fee. The fee includes signal costs and minor roadway improvements. The Developer shall pay the applicable Traffic Control Facility Fee established by the City in effect on the Effective Date or at the time that the new revised fee is established, pursuant to Section 7.2.1 above.
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7.5 .2. Highland Springs Interim hnprovement Project. The Developer has initiated and will complete interim improvements to Highland Springs Avenue between Ramsey Street and the 1-10 Freeway. These improvements include, but are not limited to, the synchronization of traffic signals along Highland Springs Avenue, relocation of traffic signals, closings and relocation of Joshua Palmer Way and the restriping and repaving of Highland Springs Avenue. The City believes that the current traffic impacts are caused by the Developer's earlier project in Beaumont. The City shall use its best efforts to coordinate with the City of Beaumont an agreement to reimburse a portion of the improvements either through the appropriate transportation fee credits or other mechanism.

7.5.3. The Developer to Construct Traffic Improvements In Lieu of Paving City Fair Share Fees. In the event the Developer is required to construct traffic improvements in lieu of paying the City's fair share fees, City shall reimburse the Developer for the cost of the completed improvements through Reimbursement Agreements mandating that any project larger than 20 dwelling units pay a prorated share for benefits associated with completion of the Project.

8. DEDICATIONS AND CONVEYANCES OF PROPERTY INTERESTS

8.1 Park hnprovements.

8.1.1. Neighborhood/Community Parks. Prior to the construction of any parks, the Developer shall meet with both the Director and the Director of Parks and Recreation to review the provisions set forth in the Specific Plan outlining the facilities to be provided at each park and discuss the Developer's plans for near term construction of the parks.

Prior to development of each park, a detailed site plan consistent with the Specific Plan shall be prepared by the Developer and approved by the Director and the Parks and Recreation Commissions. The Developer shall complete the construction of neighborhood parks, Planning Areas 22 through 34, 62, 64 through 67 and 72, and the parks in the SCE easement, Planning Areas 36 through 38, no later than the issuance of the final Certificate of Occupancy for residential units within the adjacent subdivisions. Active use park improvements may not be placed in the SCE easement parks if the Director and Commissions believe there are issues of public health with electro magnetic radiation. A subdivision separated from a park by a street shall not be considered to be adjacent to the park. The Parties shall, mutually, determine what constitutes the adjacent subdivision if a park adjoins more than one subdivision. Upon completion of each neighborhood park, the City shall after the one-year maintenance period has expired, within 10 working days, develop [mal punch lists of items to be corrected prior to acceptance by the City. Upon correction of final punch list items by the Developer, the City shall accept the park within 30 days of the date of the final inspection.

8.1.2. POA Recreation Centers. The POA Recreation centers identified in Planning Areas 21 and 63 shall be constructed by the Developer in accordance with the Tract Phasing Plan pursuant to Section 6.5.
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8.1.3. GolfCourse/Active Open Space. The Golf Course shall be constructed at the sole and absolute discretion of the Developer. The determination to construct the Golf Course will take place within the first phase of Phase I of development due to the need to construct of the flood control improvements for Smith Creek. The Golf Course will be maintained by a Developer selected operator and open to the public. The operator may sell annual play memberships. If, as described in Section 5.4 above, the Golf Course is determined to be financially infeasible, the Developer shall notify the Planning Department in writing and the open space and drainage provisions described in the Specific Plan shall dictate the uses allowed on Planning Areas 35 and 39. The revised use of Planning Areas 35 and 39 shall be approved by both the Planning Commission (as the recommending body) and City Council prior to construction. The revised plan shall incorporate active recreational use including biking and pedestrian trails, turnouts for exercise, viewing and educational facilities, all linkable to other tracts, parks and open space, landscaping and providing full public access.

8.1.4. Community Recreation/Emergency Center. The City's Parks Master Plan indentifies the need in the Project for a community recreation center, and this is even more necessary if the Golf Course is not developed. This Center would be on an approximately six (6) acre parcel in Planning Area 39 in lieu of the golf clubhouse, or alternatively could be located as a part of a community park or other available site including in Plarming Area 71, or in lieu of the waste water treatment plant site in Planning Area II.

Depending on the site selected, the six (6) acres may be reduced so as to not adversely affect the development area of adjacent parcels from the development areas shown in the Specific Plan.

The Center is contemplated as a 30,000 sq. foot facility. The plan for the Center shall be included in the Park Master Plan and the site plan shall be processed at the time the chosen Planning Area is developed, subject to the Phasing Plans approved pursuant to Section 6.5, and provided that if the City chooses to put the Center in Planning Area II, it may be developed as part of Phase I provided that Developer shall satisfy the Phase I obligation by providing a developed Site, and need not fund the construction of the improvements if there are insufficient DIF's for credit. The Developer shall dedicate the site to City without charge. If developed as part of a park it shall be developed at the time required for parks in Section 8.1.1. The Center may include emergency operations and shelter components, and will also include appropriate landscaped grounds and facilities as specified in the Master Plan. The Center may be developed and constructed by Developer in the same manner as for the waste water treatment plant in Section 7.3.2, except as provided above.

8.2 Drainage Facilities. Planning Areas 19 and 71 are required areas of detention, recharge and conveyance of Project created and natural storm flows through the Project as set forth in Section 5.4 above. Planning Area 19 will consist of water quality basins, habitat restoration and flood conveyance facilities as well as the head works for the culvert underneath Wilson Street. This Planning Area may be ultimately transferred to the Flood Control District or City for acceptance and maintenance, but the Developer shall have the right to utilize it until such time as Development has fully or partially occurred for erosion control purposes. Planning Area 71 may be constructed in Phase I of the Project if required for the realignment of Smith Creek. This Planning Area may also consist of a large open reservoir, detention basin and recharge facility that may ultimately be transferred to the City or other appropriate body for acceptance and maintenance. The City shall have no obligation to accept -28- 01102/0012/108862.12
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the facilities if they primarily benefit the Project and are for flood control purposes but City may do so if the recharge facility and reservoir facility is designed for water recharge purposes and City determines in its sole and absolute discretion that they are needed to enhance the City's water supply.

8.3 Satellite Water Treatment Plant. The Director of Public Works Director shall determine the location of a two to five acre portion of Planning Area 11 for the onsite treatment of Project-related and other localized wastewater flows. The City shall have an Appraisal of Land Value determined within one (1) year of the signing of this Agreement. The City shall grant a credit equal to the fair market value determined by the appraisal to the City's waste water impact fee, when that fee is established, which credit may be used by the Developer on a unit by unit basis. Title to the site shall be transferred to the City after the site has been graded by the Developer and utilities are stubbed to the site.

8.4 Fire Station Site. The Specific Plan has identified a site in Planning Area 60 as the possible site for a fire station. The City shall have the an Appraisal of Land Value performed for a site of up to two (2) acres within one (1) year of the signing of this Agreement.

The City shall grant a credit equal to the fair market value determined by the appraisal to the City's Fire Facilities Development Fee which credit may be used by the Developer on a unit by unit basis. Title to the site shall be transferred to the City after the site has been graded by the Developer and utilities are stubbed to the site.

8.5 Water Tanks. The City's water facilities and improvements described in Section 7.3.4 include certain water tanks, pipelines, access roads and appurtenant facilities which largely serve the Development and must be located at specific locations and elevations to make the water system function correctly and maintain public health and safety. The water tanks shall be developed as follows:

A. A 500,000 gallon tank in Planning Area 73 at an high water elevation line of 3237 feet.

B. A 1.4 million gallon tank in Planning Area 73 at an high water elevation line of 3070 feet.

C. A 1.6 million gallon tank Planning Area 68 or 50 at an high water elevation line of 2822 feet.

Each tank will require a parcel from 1 to 1.5 acres in area and additional area for access, and shall be dedicated to City without charge after the site has been graded and stubbed out by Developer. The Developer may construct the improvements in accordance with Section 7.3.2 and receive fee credits to the water development impact fee on a unit per unit basis for the construction costs. The water tanks are considered part of the Proposed Project Facilities and shall be constructed in accordance with the Phasing Plans developed in accordance with Section

6.5 provided that the tanks in paragraph C above must be in Phase 1. -29-
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9. PROCESSING OF REOUESTS AND APPLICATIONS: OTHER GOVERNMENT PERMITS.

9.1 Processing. In reviewing Future Development Approvals which are discretionary, the City may impose only those conditions, exactions, and restrictions which are allowed by the Development Plan and this Agreement. Upon satisfactory completion by the Developer of all required preliminary actions, meetings, submittal of required information and payment of appropriate processing fees, if any, the City shall promptly commence and diligently proceed to complete all required steps necessary for the implementation of this Agreement and the development by the Developer of the Project in accordance with the Existing Development Approvals. In this regard, the Developer, in a timely manner, will provide the City with all documents, applications, plans and other information necessary for the City to carry out its obligations hereunder and will cause the Developer's planners, engineers and all other consultants to submit in a timely manner all required materials and documents therefor. It is the express intent of this Agreement that the parties cooperate and diligently work to implement any zoning or other land use, site plan, subdivision, grading, building or other approvals for development of the Project in accordance with the Existing Development Approvals and those items set forth in Exhibit "E." Notwithstanding the foregoing, nothing contained herein shall be construed to require City to process Developer's Applications ahead of other projects in process in the City and City's obligations hereunder shall be subject to the City's workload and staffing at any given time.

9.2 Developer to Pay for Expedited Processing. If Developer elects, in its sole and absolute discretion, to request the City to incur overtime or additional consulting services to receive expedited processing by the City, the Developer shall pay all such overtime costs, charges or fees incurred by City for such expedited processing.

9.3 General Time Periods for Processing.

9.3.1. General Plan Review and Approval. The City shall provide comments within two weeks for all plan checks for required infrastructure, building, grading, both mass and finished, architectural, erosion control or any other required plan submittal and will not unduly extend amount of plan checks beyond three submittals provided that Developer's consultants are responsive. In the event that consensus between the City and the Developer regarding the content of the plans after the 3rd submittal can not be made, a meeting will be scheduled to discuss how to reconcile the differences.

9.3.2. Architectural Plan Submittal Process. The Developer shall submit architectural plans to the Planning Department for maximum two-week review of the entire plan set for each submittal for a maximum of three plan check reviews to ensure that they conform to the guidelines set forth in Specific Plan provided that Developer's consultants are responsive. In the event that consensus can not be made after the third plan check, a meeting will be coordinated with the plan checker, Planning Department and the Developer or the Developer's representative. The Planning Department, upon determining compliance with the guidelines set forth in the Specific Plan, shall approve the plans. This review is a ministerial action. Additional architectural enhancements that are above and beyond the design guidelines -30-
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will be implemented at the Developer's sole and absolute discretion but are subject to review by City if proposed.

9.4 Precise Grading/Plot Plan Revisions. In the event that the Developer wishes to revise house plan type or elevation on an approved plot plan or revised grading plan, City Engineering and Planning staff review and approval shall be done over the counter.

9.5 Additional Inspectors and Plan Checkers. In the event that the Developer requests it, the City shall permit overtime, including both additional days and hours, for inspections and plan checking at the Developer's expense. In the event that the City is unable to provide inspectors or plan checkers capable of meeting the demand for inspections or plan checks required for the Development of the Project in a timely fashion, the City shall, if requested to do so by the Developer and at the Developer's expense, employ additional private entities or persons to perform such services.

9.6 Tentative Subdivision Maps. The City shall extend through the Term hereof (pursuant to Government Code § 66452.6) all Master Tract Maps and all tentative and vesting tentative Subdivision Maps applied for by the Developer during the term of this Agreement and approved by the City in the future.

9.7 Multiple Final Subdivision Maps: The Developer may file as many fmal maps over a tentative Subdivision Map as it deems appropriate in its sole and absolute discretion.

9.8 Financing and Conveyance Maps: The Developer may have a Master Tract Map approved for the purpose of conveying portions of the Developer's Property to others and/or for the purpose of creating legal lots which may be used as security for loans to develop the Developer's Property and as provided in Section 6.5.1. Any such map shall not authorize any Development and shall not be subject to any conditions, Exactions or restrictions, other than monumentation and conditions which do not require the payment of money or the installation or construction of improvements.

9.9 Water Availabilitv. Any final subdivision map prepared for the Developer's Property, or any portion of the Developer's Property, shall comply with the provisions of Government Code § 66473.7.

9.10 Other Governmental Permits. The Developer shall apply in a timely manner for such other permits and approvals as may be required from other governmental or quasi-governmental agencies having jurisdiction over the Project as may be required for the development of, or provision of services to, the Project. The City shall cooperate with the Developer in its efforts to obtain such permits and approvals.

9.11 Public Agency Coordination. The City and Developer shall cooperate and use reasonable efforts in coordinating the implementation of the Development Plan with other public agencies, if any, having jurisdiction over the Property or the Project.

9.12 Annexation. This Agreement's effectiveness over land within the Developer's Property that is currently not within the City nor within its sphere of influence is subject to the annexation of that land into the City. If the land is annexed into the City, the terms -31-
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of this Agreement shall automatically apply to all portions of that land upon its annexation. ill the event that annexation of portions of the Developer's Property not currently within the City is not approved by LAFCO, or for any other reason is not annexed to the City, then any such portions shall be excluded from this Agreement. With the exception of land within Planning Area 43B, the City shall, subject to the negotiation of a tax allocation agreement with the County of Riverside acceptable to City, use its best efforts to expeditiously accomplish the annexation of those portions of the Developer's Property not within the City, or such portions thereof as may be approved by the developer, to the City.

10. AMENDMENT AND MODIFICATION OF DEVELOPMENT AGREEMENT.

10.1 Initiation of Amendment. Either Party may propose an amendment to this Agreement.

10.2 Procedure. Except as set forth in Section 10.4 below, the procedure for proposing and adopting an amendment to this Agreement shall be the same as the procedure required for entering into this Agreement in the first instance, and meet the requirements of the Development Agreement Statute § 65867.

10.3 Consent. Except as expressly provided in this Agreement, no amendment to all or any provision of this Agreement shall be effective unless set forth in writing and signed by duly authorized representatives of each of the Parties hereto and recorded in the Official Records of Riverside County.

10.4 Minor Modifications.

10.4.1. Flexibility Necessary. The provisions of this Agreement require a close degree of cooperation between the City and the Developer. Implementation of the Project may require minor modifications of the details of the Development Plan and affect the performance of the Parties under this Agreement. The anticipated refinements to the Project and the Development of the Developer's Property may demonstrate that clarifications to this Agreement and the Existing Land Use Regulations are appropriate with respect to the details of performance of the City and the Developer. The Parties desire to retain a certain degree of flexibility with respect to those items covered in general terms under this Agreement. Therefore, non-substantive and procedural modifications of the Development Plan shall not require modification of this Agreement.

10.4.2. Non-Substantive Changes. A modification will be deemed non-substantive and/or procedural if it does not result in a material change in fees, maximum residential density, maximum intensity of use, permitted uses, the maximum height and size of buildings, the reservation or dedication of land for public purposes, or the improvement and construction standards and specifications for the Project, including density transfers between phases. A "material change" is generally one which does not change the standard by ten percent (10%) or more. For example, for a height limit of 20 feet, a change of less than two feet is deemed non-material.
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10.4.3. Hearing Rights Protected. Notwithstanding the foregoing, City will process any change to this Development Agreement consistent with state law and will hold public hearings thereon if so required by state law and the parties expressly agree nothing herein is intended to deprive any party or person of due process of law.

10.5 Effect of Amendment to Development Agreement. Except as expressly set forth in any such amendment, an amendment to this Agreement will not alter, affect, impair, modifY, waive, or otherwise impact any other rights, duties, or obligations of either Party under this Agreement.

II. RESERVATIONS OF AUTHORITY.

11.1 Limitations, Reservations and Exceptions. Notwithstanding anything to the contrary set forth hereinabove, in addition to the Existing Land Use Regulations, only the following Land Use Regulations adopted by City hereafter shall apply to and govern the Development ofthe Developer's Property ("Reservation of Authority"):

11.1.1. Future Regulations. Future Land Use Regulations which (i) are not in conflict with the Existing Land Use Regulations, (ii) which would be applicable under the Development Agreement statute (§ 65866); (iii) if in conflict with the Existing Land Use Regulations but the application of which to the Development of the Developer's Property has been consented to in writing by Developer.

11.1.2. State and Federal Laws and Regulations. Where state or federal laws or regulations enacted after the Effective Date prevent or preclude compliance with one or more provisions of the Development Agreement, those provisions shall be modified, through revision or suspension, to the extent necessary to comply with such state or federal laws or regulations.

11.1.3. Public Health and SafetvlUniform Codes.

11.1.3.1 Adoption Automatic Regarding Uniform
Codes. This Agreement shall not prevent the City from adopting Future Land Use Regulations or amending Existing Regulations which are uniform codes and are based on recommendations of a multi-state professional organization and become applicable throughout the City, such as, but not limited to, the Uniform Building, Electrical, Plumbing, Mechanical, or Fire Codes.

11.1.3.2 Adoption Regarding Public Health and
SafetY/Uniform Codes. This Development Agreement shall not prevent the City from adopting Future Land Use Regulations respecting public health and safety to be applicable throughout the City which directly result from findings by the City that failure to adopt such Future Land Use Regulations would result in a condition injurious or detrimental to the public health and safety and that such Future General Regulations are the only reasonable means to correct or avoid such injurious or detrimental condition.
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11.1.3.3 Adoption Automatic Regarding Regional
Programs. This Agreement shall not prevent the City from adopting Future Land Use Regulations or amending Existing Regulations which are regional codes and are based on recommendations of a county or regional organization and become applicable throughout the region, such as Western Riverside Council of Governments.

11.1.4. Amendments to Codes for Local Conditions.

Notwithstanding the foregoing, no construction within the Project shall be subject to any provision in any of the subsequent Uniform Construction Codes, adopted by the State of California, but modified by the City to make it more restrictive than the provisions of previous Uniform Construction Codes of the City, notwithstanding the fact that the City has the authority to adopt such more restrictive provision pursuant to the California Building Standards Law, including, but not limited to, Health and Safety Code § 18941.5, unless such amendment applies City-wide. The City shall give Developer prior written notice of the proposed adoption of such amendment and Developer shall have the right to present its objections to the amendment.

11.2 Regulation by Other Public Agencies. It is acknowledged by the Parties that other public agencies not within the control of the City possess authority to regulate aspects of the Development of the Developer's Property separately from, or jointly with, the City and this Agreement does not limit the reasonable authority of such other public agencies.

11.3 Fees, Taxes and Assessments, Notwithstanding any other provision herein to the contrary, the City retains the right (i) to impose or modify Processing Fees and Development Impact Fees as provided in Article 7, (ii) to impose or modify business licensing or other fees pertaining to the operation of businesses, (iii) to impose or modify taxes and assessments which apply City-wide such as utility taxes, sales taxes and transient occupancy taxes, (iv) to impose or modify fees and charges for City services such as electrical utility charges, water rates, and sewer rates, (v) to impose or modify a community wide or area-wide assessment district which does not predominately apply to the Developer's Property, and (vi) to impose or modify any fees, taxes or assessments similar to the foregoing.

12. ANNUAL REVIEW.

12.1 Annual Monitoring Review. Following commencement of construction, the City and the Developer shall review the performance of this Agreement, and the Development of the Project, on or about each anniversary of the Effective Date (the "Annual Review"). The cost of the Annual Review shall be borne by Developer and Developer shall pay a reasonable deposit in an amount requested by City to pay for such review. As part of each Annual Review, within ten (10) days after each anniversary ofthis Agreement, the Developer shall deliver to the City all information reasonably requested by City (i) regarding the Developer's performance under this Agreement demonstrating that the Developer has complied in good faith with the terms of this Agreement and (ii) as required by the Existing Land Use Regulations.
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The Director shall prepare and submit to Developer and thereafter to City Council a written report on the performance of the Project, and identify any deficiencies. If any deficiencies are noted, or if requested by a Councilmember a public hearing shall be held before the City Council on the report to Council. The Developer's written response shall be included in the Director's report. The report to Council shall be made within 45 days of the anniversary date.

If the City determines that the Developer has substantially complied with the terms and conditions of this Agreement, the Annual Review shall be concluded. If the City finds and determines that the Developer has not substantially complied with the terms and conditions of this Agreement for the period under review, the City may declare a default by the Developer in accordance with Section 13.1.

12.2 Certificate of Compliance. If, at the conclusion of an Annual Review, the City finds that the Developer is in substantial compliance with this Agreement, the City shall, upon request by the Developer, issue an Estoppel Certificate to the Developer in the form shown on Exhibit "C."

12.3 Failure to Conduct Annual Review. The failure of the City to conduct the Annual Review shall not be a Developer Default unless Developer fails to cooperate in providing necessary information.

13. DEFAULT, REMEDIES AND TERMINATION.

13.1 Rights of Non-Defaulting Party after Default. The Parties acknowledge that both Parties shall have hereunder all legal and equitable remedies as provided by law following the occurrence of a Default or to enforce any covenant or agreement herein except as provided in Section 13.2 below. Before this Agreement may be terminated or action may be taken to obtain judicial reliefthe Party seeking relief ("Non-Defaulting Party") shall comply with the notice and cure provisions ofthis Article 13.

13.2 No Recovery for Monetary Damages. The nature of a development agreement under the Development Agreement Statute is a very unusual contract involving promoting a very large development project facing many complex issues including geologic, environmental, finance, market, regulatory and other constantly evolving factors over an extremely long time frame. The high level of uncertainty and risk involved justify the extraordinary commitments made to the Developer. However, the original persons representing the parties and approving the transaction are only likely to be involved with the Project for a limited time in comparison to the over-all life of the Project.

It is highly likely that misunderstandings will develop oyer time. Moreover, municipal budgets are extremely constrained, and a threat of recovery of damages against a municipal entity may pressure a municipality with limited resources to settle in a manner adverse to its interests and those of its citizens. Finally, the municipal entity represents the public welfare of the entire community, a community who cannot directly represent themselves. The City Council has come to believe that entering into a development agreement with the Developer vesting the Developer with the extraordinary rights provided herein is in the best interests of the community -35-
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through the Developer's active engagement with the community and open communications over several years. It is critical to the success of this Project that as inevitable obstacles are met, and the persons implementing the Project change over the 40 year time span of the Project, that close working relationships be maintained. Accordingly, in this Agreement, the rights of enforcement are limited as follows (i) the remedy of monetary damages is not available to either Party, and (ii) there is no shortcut to a mediation or arbitration procedure where a nonelected representative can arbitrarily determine land use development issues.

For purposes of enforcement, stated positively, the Parties shall have the equitable remedies of specific performance, injunctive and declaratory relief, or a mandate or other action determining that the City has exceed its authority, and similar remedies, other than recovery of monetary damages, to enforce their rights under this Agreement. The Parties shall have the right to recover their attorney fees and costs pursuant to Section 19.9 in such action. Moreover, the Developer shall have the right to a public hearing before the City Council before any default can be established under this Agreement, as provided in Section 13. 6.

13.3 Recovery of Monies Other Than Damages.

13.3.1. Restitution of hnproper Exactions. In the event any actions, whether monetary or through the provision of land, good or services, are imposed on the Development of the Developer's Property other than those authorized pursuant to this Agreement, the Developer shall be entitled to recover from City restitution of all such improperly assessed exactions, either in kind or the value in lieu of the exaction, together with interest thereon at the rate of the maximum rate provided by law per year from the date such exactions were provided to City to the date of restitution.

13.3.2. Monetary Default. In the event the Developer fails to perform any monetary obligation under this Agreement, City may sue for the payment of such sums to the extent due and payable. The Developer shall pay interest thereon at the lesser of: (i) ten percent (10%) per annum, or (ii) the maximum rate permitted by law, from and after the due date ofthe monetary obligation until payment is actually received by the City.

13.4 Compliance with the Claims Act. Compliance with this Article 13 shall constitute full compliance with the requirements of the Claims Act, Government Code § 900 et seq., pursuant to Government Code § 930.2 in any action brought by the Developer.

13.5 Notice and Opportunity to Cure. A Non-Defaulting Party in its discretion may elect to declare a Default under this Agreement in accordance with the procedures hereinafter set forth for any failure or breach of the other Party ("Defaulting Party") to perform any material duty or obligation of the Defaulting Party under the terms of this Agreement.

However, the Non-Defaulting Party must provide written notice to the Defaulting Party setting forth the nature of the breach or failure and the actions, if any, required by the Defaulting Party to cure such breach or failure. The Defaulting Party shall be deemed in Default under this Agreement, if the breach or failure can be cured, but the Defaulting Party has failed to take such actions and cure such default within thirty (30) days after the date of such notice or ten (10) days for monetary defaults (or such lesser time as may be specifically provided in this Agreement). -36-
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However, if such non-monetary Default cannot be cured within sucb tbirty (30) day period, and if and, as long as the Defaulting Party does each of the following:

I. Notifies the Non-Defaulting Party in writiug with a reasonable explanation as to the reasons the asserted default is not curable withiu the thirty (30) day period;

2. Notifies the Non-Defaulting Party of the Defaulting Party's proposed cause of action to cure the default;

3. Promptly commences to cure the default within the thirty (30) day period;

4. Makes periodic reports to the Non-Defaulting Party as to the progress of the program of cure;

5. Diligently prosecutes such cure to completion, and
Then the Defaulting Party shall not be deemed in breach ofthis Agreement.

Notwithstanding the foregoing, the Defaultiug Party shall be deemed in default under this Agreement if the breach or failure involves the payment of money but the Defaulting Party has failed to completely cure the monetary default within ten (10) days (or such lesser time as may be specifically provided in this Agreement) after the date of such notice.

13.6 Dispute Resolution.

13.6.1. Meet & Confer. Prior to any Party issuing a Default Notice hereunder, the Non-Defaulting Party shall inform the Defaulting Party either orally or iu writiug of the Default and request a meetiug to meet and confer over the alleged default and how it might be corrected. The Parties through their designated representatives shall meet withiu ten (10) days of the request therefore. The Parties shall meet as often as may be necessary to correct the conditions of default, but after the initial meeting either Party may also terminate the meet and confer process and proceed with the formal Default Notice.

13.6.2. Termination Notice. Upon recelVlng a Default Notice, should the Defaultiug Party fail to timely cure any default, or fail to diligently pursue such cure as prescribed above, the Nondefaulting Party may, in its discretion, provide the Defaulting Party with a written notice of intent to terminate this Agreement and other Agreements ("Termiuation Notice"). The Termiuation Notice shall state that the Nondefaulting Party will elect to terminate the Agreement and such other Agreements as the Non-defaulting Party elects to terminate within thirty (30) days and state the reasons therefor (including a copy of any specific charges of default) and a description of the evidence upon which the decision to terminate is based. Once the Termination Notice has been issued, the Non-defaulting Party's election to terminate Agreements will only be waived if (i) the Defaulting Party fully and completely cures all defaults prior to the date of termination, or (ii) pursuant to Section 13.6.3 below. -37-
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13.6.3. Hearing Opportunity Prior to Termination. Prior to any termination, a termination hearing shall be conducted as provided herein (,Termination Hearing"). The Termination Hearing shall be scheduled as an open public hearing item at a regularly-scheduled City Council meeting within thirty (30) days of the Termination Notice, subject to any legal requirements including but not limited to the Ralph M. Brown Act, Government Code Sections 54950-54963. At said Termination Hearing, the Defaulting Party shall have the right to present evidence to demonstrate that it is not in default and to rebut any evidence presented in favor of termination. Based upon substantial evidence presented at the Termination Hearing, the Council may, by adopted resolution, act as follows:

A. Decide to terminate this Agreement.

B. Determine that the alleged Defaulting Party is innocent of a default and, accordingly, dismiss the Termination Notice and any charges of default; or C. Impose conditions on a finding of default and a time for cure, such that Defaulting Party's fulfillment of said conditions will waive or cure any default.

Findings of a default or a condition of default must be based upon substantial evidence supporting the following three [mdings: (i) that a default in fact occurred and has continued to exist without timely cure, (ii) that the Non-Defaulting Party's performance has not excused the default; and (iii) that such default has, or will, cause a material breach of this Agreement and/or a substantial negative impact upon public health, safety and welfare, or the financial tenns established in the Agreement, or such other interests arising from the Project. Notwithstanding the foregoing, nothing herein shall vest authority in the City Council to unilaterally change any material provision of the Agreement.

Following the decision of the City Council, any Party dissatisfied with the decision may seek judicial relief consistent with this Article 13.

13.7 Waiver of Breach. By not challenging any Development Approval within 90 days of the action of City enacting the same, Developer shall be deemed to have waived any claim that any condition of approval is improper or that the action, as approved, constitutes a breach of the provisions of this Agreement. By recordation of a final map on all or any portion of the Developer's Property, the Developer shall be deemed to have waived any claim that any condition of approval is improper or that the action, as approved, constitutes a breach ofthe provisions ofthis Agreement.

13.8 Limitations on Defaults. Notwithstanding any provIsIOn in this Agreement to the contrary, a Default by one Owner shall not constitute a Default by an Owner of a portion of the Developer's Property, which is not the owner of the portion of the Developer's Property that is the subject of the Default (an "Innocent Owner"). Likewise, a Default by an Owner with respect to a Lot (or group of Lots) it owns or leases shall not constitute a Default by an Innocent Owner, nor shall the Default by another Owner of a portion of the Developer's Property not owned by an Innocent Owner constitute a Default of the Innocent Owner.

Therefore, (i) no Innocent Owner shall have any liability to the City for, or with respect to, any -38-
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Default by another Owner or any Default of any other Owner, (ii) an Innocent Owner shall have no liability to the City for, or with respect to, any Default by any other Owner, and (iii) the City's election to terminate this Agreement as a result of a Default by an Owner shall not result in a termination of this Agreement with respect to either (x) any portion of the Developer's Property not owned by such Owner or (y) those Lots owned or leased by an Innocent Owner until such time that this Agreement would otherwise terminate in accordance with its terms.

13.9 Venue. In the event of any judicial action, venue shall be in the Superior Court of Riverside County.

14. ASSIGNMENT.

14.1 Right to Assign.

14.1.1. General. Neither Party shall assign (as hereinafter defined) or transfer (as hereinafter defined) its interests, rights or obligations under this Agreement without the prior written consent of the other, which consent shall not be unreasonably withheld or delayed. The term "assignment" as used in this Agreement shall include successors-in-interest to the City that may be created by operation of law. Notwithstanding the foregoing, the City shall have the right to sell, assign or transfer its interest in any real property dedicated or transferred to the City pursuant to the terms of this Agreement or to another public agency.

As used in this Section, the term "transfer" shall include the transfer to any person or group of persons acting in concert of more than seventy percent (70%) of the present equity ownership and/or more than fifty percent (50%) of the voting control of the Developer Gointly and severally referred to herein as the "Trigger Percentages") or any general partner of the Developer in the aggregate, taking all transfers into account on a cumulative basis, except transfers of such ownership or control interest between members of the same immediate family, or transfers to a trust, testamentary or otherwise, in which the beneficiaries are limited to members of the transferor's immediate family. A transfer of interests (on a cumulative basis) in the equity ownership and/or voting control of the Developer in amounts less than the Trigger Percentages shall not constitute a transfer subject to the restrictions set forth herein. In the event the Developer or any general partner of the Developer or its successor is a corporation or trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of the Developer, or of beneficial interests of such trust; in the event that Developer or any general partner of the Developer is a limited or general partnership, such transfer shall refer to the transfer of more than the Trigger Percentages in the limited or general partnership interest; in the event that the Developer or any general partner is a joint venture, such transfer shall refer to the transfer of more than the Trigger Percentages of such joint venture partner, taking all transfers into account on a cumulative basis.

The Developer shall not transfer this Agreement or any of the Developer's rights hereunder, or any interest in the Developer's Property or in the improvements thereon, directly or indirectly, voluntarily or by operation of law, except as provided below, without the prior written approval of City, and if so purported to be transferred, the same shall be null and void. In considering whether it will grant approval to any transfer by Developer, which transfer requires City approval, City shall consider factors such as (i) the financial strength and capability of the -39-
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proposed transferee to perform the obligations hereunder; and (ii) the proposed transferee's experience and expertise in the planning, financing, development, ownership, and operation of similar projects. In no event shall the City's approval of any transfer be unreasonably withheld or delayed.

In addition, no attempted assignment of any of the Developer's obligations hereunder shall be effective unless and until the successor party signs and delivers to the City an assumption agreement, in a form approved by the City, assuming such obligations. No consent or approval by City of any transfer requiring the City's approval shall constitute a further waiver of the provision ofthis Section 14.1.1 and, furthermore, the City's consent to a transfer shall not be deemed to release the Developer of liability for performance under this Agreement unless such release is specific and in writing executed by City. In no event shall the City's release of the Developer from liability under this Agreement upon a transfer be unreasonably withheld or delayed.

Notwithstanding any provision of this Agreement to the contrary, City approval of a Transfer or Assignment of any portion of the Developer's Property under this Agreement shall not be required in connection with any of the following provided that such person or entity transferee or assignee assumes in writing all of the Developer's obligations under this Agreement and notifies the City in writing of the same:

A. Any mortgage, deed of trust, sale/lease-back, or other form of conveyance for financing and any resulting foreclosure therefrom.

B. The granting of easements or dedications to any appropriate governmental agency or utility or permits to facilitate the development of the Developer's Property.

C. A sale or transfer resulting from, or in connection with, a reorganization as contemplated by the provisions of the Internal Revenue Code of 1986, as amended or otherwise, in which the ownership interests of a corporation are assigned directly or by operation of law to a person or persons, firm or corporation which acquires the control of the voting capital stock of such corporation or all or substantially all of the assets of such corporation.

D. A sale or transfer of less than the Trigger Percentages between members of the same immediate family, or transfers to a trust, testamentary or otherwise, in which the beneficiaries consist solely of immediate family members of the trustor or transfers to a corporation or partnership in which the immediate family members or shareholders of the transferor who owns at least ten percent (10%) of the present equity ownership and/or at least fifty percent (50%) of the voting control of Developer.

E. A transfer of common areas to a POA.

F. Any transfer to an entity or entities in which the Developer retains a minimum of 51 % of the ownership or beneficial interest and retains management and control of the transferee entity or entities.
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G. Any transfer of interests in Owner for estate planning purposes to the heirs of Owner, provided that the heirs retain a minimum of 51% of the ownership or beneficial interest of the transferor entity and retain management and control of the transferee entity.

H. Any transfer of interest to a Pre-Qualified Buyer.

14.1.2. Subject to Tenus of Agreement. Following any such Transfer or Assignment of any of the rights and interests of the Developer under this Agreement, in accordance with Section 14.1.1 above, the exercise, use and enjoyment of such rights and interests shall continue to be subject to the tenus of this Agreement to the same extent as if the assignee or transferee were the Developer.

14.1.3. Release of Developer. Upon the written consent of the City to the complete assignment of this Agreement or the transfer of a portion of the Developer's Property and the express written assumption of the assigned obligations of the Developer under this Agreement by the assignee, the Developer shall be relieved of its legal duty from the assigned obligations under this Agreement with respect to the portion of the Developer's Property transferred, except to the extent the Developer is in default under the tenus of this Agreement prior to the transfer.

14.1.4. No Approval of Terms of Loan by City. Notwithstanding anything to the contrary set forth herein with regards to the approval by the City of hypothecation, encumbrances or mortgages, the City shall only have the right to approve the identity of the Developer's lender, which approval will not be unreasonably withheld, taking into consideration such lender's financial strength, reputation, and other relevant factors. The City shall not have any right to approve any of the terms or conditions of the Developer's financing arrangements with third party lenders.

14.2 Sale to Pre-Oualified Buyer. Nothing herein shall prevent the Developer from selling a portion of the Developer's Property for residential development subject to any approved final subdivision map to a Pre-Qualified Buyer for construction of houses in accordance with the tenus of this Agreement provided that the transferee must enter into appropriate agreements with the City to assure that all Development restrictions hereunder will be met.

14.3 Tenuination of Agreement With Respect to Individual Parcels Upon Sale to Public. Notwithstanding any provisions of this Agreement to the contrary, this Agreement shall terminate as to any Lot which has been finally subdivided and improved with all required public improvements and which is individually (and not in "bulk") sold to an owneruser and thereupon, and without the execution or recordation of any further document or instrument, such Lot shall be released from and no longer be subject to the provisions of this Agreement; provided, however, that CC&R's are placed of record in accordance with Section

14.4 below.
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14.4 Declaration of Covenants. Conditions and Restrictions. Prior to the transfer of any portion of the Project to a third party, the Developer shall submit a proposed form of Declaration of Covenants, Conditions and Restrictions to be recorded against the applicable subdivision to the City for its review and approval ("CC&RS"). The CC&RS must be recorded prior to issuance of certificates of occupancy, and Developer shall pay City's review costs. It is anticipated that the CC&RS will contain, among other things, protective covenants to protect and preserve the integrity and value in the subdivision, including but not limited to use restrictions, maintenance covenants, EIR mitigation measures, restrictions under this Development Agreement which will continue to apply to the subdivision, covenants for construction and completion of the improvements and a provision giving the City the right to enforce the CC&RS, including the right to recover its enforcement costs if there is noncompliance following notice and the opportunity to cure.

15. RELEASES AND INDEMNITIES.

15.1 The City's Release As To Actions Prior To Effective Date. The City forever discharges, releases and expressly waives as against the Developer and its attorneys and employees any and all claims, liens, demands, causes of action, excuses for nonperformance (including but not limited to claims and/or defenses of unenforceability, lack of consideration, and/or violation of public policy), losses, damages, and liabilities, known or unknown, suspected or unsuspected, liquidated or unliquidated, fixed or contingent, based in contract, tort, or other theories of direct and/or of agency liability (including but not limited to principles of respondent superior) that it has now or has had in the past, arising out of or relating to this Agreement and the development agreement approved in 1993, and the currently existing land use plans for the Developer's Property or any portion thereof.

15.2 The Developer's Release As To Actions Prior To Effective Date. The Developer forever discharges, releases and expressly waives as against the City and its respective councils, boards, commissions, officers, attorneys and employees any and all claims, liens, demands, causes of action, excuses for nonperformance (including but not limited to claims and/or defenses of unenforceability, lack of consideration, and/or violation of public policy), losses, damages, and liabilities, known or unknown, suspected or unsuspected, liquidated or unliquidated, fixed or contingent, based in contract, tort or other theories of direct and/or of agency liability (including but not limited to principles of respondent superior) that they have now or have had in the past, arising out of or relating to this Agreement and the development agreement approved in 1993, and the currently existing land use plans for the Developer's Property or any portion thereof.

15.3 Third-Party Litigation.

15.3.1. Non-liability of City. As set forth above, the City has determined that this Agreement is consistent with the General Plan and that the General Plan and Development Approvals meets all of the legal requirements of State law. The Parties acknowledge that:
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A. In the future there may be challenges to legality, validity and adequacy of the General Plan, the Development Approvals and/or this Agreement; and B. If successful, such challenges could delay or prevent the performance of this Agreement and the development ofthe Developer's Property.

In addition to the other provisions of this Agreement, including, without limitation, the provisions of this Section 15, the City shall have no liability under this Agreement for any failure of the City to perform under this Agreement or the inability of the Developer to develop the Developer's Property as contemplated by the Development Plan or this Agreement as the result of a judicial determination that on the Effective Date, or at any time thereafter, the General Plan, the Land Use Regulations, the Development Approvals, this Agreement, or portions thereof, are invalid or inadequate or not in compliance with law.

15.3.2. Revision of Land Use Restrictions. If, for any reason, the General Plan, Land Use Regulations, Development Approvals, this Agreement or any part thereof is hereafter judicially determined, as provided above, to not be in compliance with the State or Federal Constitution, laws or regulations and, if such noncompliance can be cured by an appropriate amendment thereof otherwise conforming to the provisions of this Agreement, then this Agreement shall remain in full force and effect to the extent permitted by law. The Development Plan, Development Approvals and this Agreement shall be amended, as necessary, in order to comply with such judicial decision.

15.3.3. Participation in Litigation: Indemnity. The Developer shall indemnifY the City and its elected boards, commissions, officers, agents and employees and will hold and save them and each of them harmless from any and all actions, suites, claims, liabilities, losses, damages, penalties, obligations and expenses (including but not limited to attorneys' fees and costs) against the City and/or Agent for any such Claims or Litigation (as defined in Section

1.10) and shall be responsible for any judgment arising therefrom. The City shall provide the Developer with notice of the pendency of such action and shall request that the Developer defend such action. The Developer may utilize the City Attorney's office or use legal counsel of its choosing, but shall reimburse the City for any necessary legal cost incurred by City. The Developer shall provide a deposit in the amount of 150% of the City's estimate, in its sole and absolute discretion, of the cost of litigation, including the cost of any award of attorneys fees, and shall make additional deposits as requested by City to keep the deposit at such level. The City may ask for further security in the form of a deed of trust to land of equivalent value. If the Developer fails to provide or maintain the deposit, the City may abandon the action and the Developer shall pay all costs resulting therefrom and City shall have no liability to the Developer. The Developer's obligation to pay the cost of the action, including judgment, shall extend until judgment. After judgment in a trial court, the parties must mutually agree as to whether any appeal will be taken or defended. The Developer shall have the right, within the first 30 days of the service of the complaint, in its sole and absolute discretion, to determine that it does not want to defend any litigation attacking this Agreement or the Development Approvals in which case the City shall allow the Developer to settle the litigation on whatever terms the Developer determines, in its sole and absolute discretion, but Developer shall confer with City before acting and cannot bind City. In that event, the Developer shall be liable for any costs incurred by the City up to the date of settlement but shall have no further obligation to the City -43-
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beyond the payment of those costs. In the event of an appeal, or a settlement offer, the Parties shaH confer in good faith as to how to proceed. Notwithstanding the Developer's indemnity for claims and litigation, the City retains the right to settle any litigation brought against it in its sole and absolute discretion and the Developer shaH remain liable except as foHows: (i) the settlement would reduce the scope of the Project by 10% or more, and (ii) the Developer opposes the settlement. In such case the City may still settle the litigation but shaH then be responsible for its own litigation expense but shaH bear no other liability to the Developer.

15.4 Hold Harmless: Developer's Construction and Other Activities. The Developer shaH defend, save and hold the City and its elected and appointed boards, commissions, officers, agents, and employees harmless from any and aH claims, costs (including attorneys' fees) and liability for any damages, personal injury or death, which may arise, directly or indirectly, from the Developer's or the Developer's agents, contractors, subcontractors, agents, or employees' operations under this Agreement, whether such operations be by the Developer or by any of the Developer's agents, contractors or subcontractors or by anyone or more persons directly or indirectly employed by or acting as agent for the Developer or any of the Developer's agents, contractors or subcontractors. Nothing herein is intended to make the Developer liable for the acts of the City's officers, employees, agents, contractors of subcontractors.

15.5 Survival ofIndemnity Obligations. AH indemnity provisions set forth in this Agreement shaH survive termination of this Agreement for any reason other than the City's Default.

16. EFFECT OF AGREEMENT ON TITLE.

16.1 Covenant Run with the Land. Subject to the provisions of Sections 14 and 18 and pursuant to the Development Agreement Statute (§ 65868.5):

A. AH of the provisions, agreements, rights, powers, standards, terms, covenants and obligations contained in this Agreement shaH be binding upon the parties and their respective heirs, successors (by merger, consolidation, or otherwise) and assigns, devisees, administrators, representatives, lessees, and aH other persons acquiring any rights or interests in the Developer's Property, or any portion thereof, whether by operation of laws or in any manner whatsoever and shaH inure to the benefit of the parties and their respective heirs, successors (by merger, consolidation or otherwise) and assigns; B. AH of the provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land pursuant to applicable law; and C. Each covenant to do or refrain from doing some act on the Developer's Property hereunder (i) is for the benefit of and is a burden upon every portion of the Developer's Property, (ii) runs with such lands, and (iii) is binding upon each party and each successive owner during its ownership of such properties or any portion thereof, and each person having any interest therein derived in any manner through any owner of such lands, or any portion thereof, and each other person succeeding to an interest in such lands.
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17. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION.

17.1 Non-liability of City Officers and Employees. No official, agent, contractor, or employee of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or to its successor, or for breach of any obligation of the terms of this Agreement.

17.2 Conflict of Interest. No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to this Agreement which affects the financial interest of any corporation, partnership or association in which he or she is, directly or indirectly, interested, in violation of any state statute or regulation.

17.3 Covenant Against Discrimination. The Developer covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this Agreement. The Developer shall take affirmative action to insure that employees are treated during employment without regard to their race, color, creed religion, sex, marital status, national origin or ancestry.

18. MORTGAGEE PROTECTION.

18.1 Definitions. As used in this Section, the term "mortgage" shall include any mortgage, whether a leasehold mortgage or otherwise, deed of trust, or other security interest, or sale and lease-back, or any other form of conveyance for financing. The term "holder" shall include the holder of any such mortgage, deed of trust, or other security interest, or the lessor under a lease-back, or the grantee under any other conveyance for financing.

18.2 No Encumbrances Except Mortgages to Finance the Project.

Notwithstanding the restrictions on transfer in Section 14, mortgages required for any reasonable method of financing of the construction of the improvements are permitted but only for the following: (i) for the purpose of securing loans of funds used or to be used for fmancing the acquisition of a separate lot(s) or parcel(s), (ii) for the construction of improvements thereon, in payment of interest and other financing costs, and (iii) for any other expenditures necessary and appropriate to develop the Project under this Agreement, or for restructuring or refinancing any for same. No map permitted herein, even if for financing purposes, shall permit financing for other than purposes of developing the Project solely. The Developer (or any entity permitted to acquire title under this Agreement) shall notity the City in advance of any future mortgage or any extensions or modifications thereof. Any lender which has so notified the City shall not be bound by any amendment, implementation, or modification to this Agreement without such lender giving its prior written consent thereto. In any event, the Developer shall promptly notity the City of any mortgage, encumbrance, or lien that has been created or attached thereto prior to completion of construction, whether by voluntary act of the Developer or otherwise. -45-
01102/0012/108862.12
740

18.3 Developer's Breach Not Defeat Mortgage Lien. The Developer's breach of any of the covenants or restrictions contained in this Agreement shall not defeat or render void the lien of any mortgage made in good faith and for value but, unless otherwise provided herein, the terms, conditions, covenants, restrictions, easements, and reservations of this Agreement shall be binding and effective against the holder of any such mortgage whose interest is acquired by foreclosure, trustee's sale or otherwise.

18.4 Holder Not Obligated to Construct or Complete hnprovements. The holder of any mortgage shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion.

Nothing in this Agreement shall be deemed or construed to permit or authorize any such holder to devote the Project or any portion thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.

18.5 Notice of Default to Mortgagee. Whenever the City shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer hereunder, the City shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage who has previously made a written request to the City therefor, or to the representative of such lender as may be identified in such a written request by the lender. No notice of default shall be effective as to the holder unless such notice is given.

18.6 Right to Cure. Each holder (insofar as the rights of City are concerned) shall have the right, at its option, within ninety (90) days after the receipt of the notice, and one hundred twenty (120) days after the Developer's cure rights have expired, whichever is later, to:

A. Obtain possession, if necessary, and to commence and diligently pursue the cure until the same is completed, and
B. Add the cost of said cure to the security interest debt and the lien or obligation on its security interest;
provided that, in the case of a default which cannot with diligence be remedied or cured within such cure periods referenced above in this Section 18.6, such holder shall have additional time as reasonably necessary to remedy or cure such default.

In the event there is more than one such holder, the right to cure or remedy a breach or default of the Developer under this Section shall be exercised by the holder first in priority or as the holders may otherwise agree among themselves, but there shall be only one exercise of such right to cure and remedy a breach or default of the Developer under this Section.

No holder shall undertake or continue the construction or completion of the improvements (beyond the extent necessary to preserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the City by written agreement satisfactory to City with respect to the Project or any portion thereof in which the holder has an interest. The holder must agree to complete, in the manner required by this Agreement, the improvements to which the lien or title of such holder relates, and submit evidence satisfactory to the City that it has the qualifications and financial responsibility necessary to perform such obligations.
-46-
01102/00121108862.12
741

18.7 City's Rights upon Failure of Holder to Complete Improvements. In any case where one hundred eighty (180) days after default by tbe Developer in completion of construction of improvements under this Agreement, the holder of any mortgage creating a lien or encumbrance upon the Project or portion thereof has not exercised the option to construct afforded in this Section or, if it has exercised such option and has not proceeded diligently with construction, the City may, after ninety (90) days' notice to such holder and if such holder has not exercised such option to construct within said ninety (90) day period, purchase the mortgage, upon payment to the holder of an amount equal to the sum of the following:

A. The unpaid mortgage, debt plus any accrued and unpaid interest (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings, if any);
B. All expenses, incurred by the holder with respect to foreclosure, if any;
C. The net expenses (exclusive of general overhead), incurred by the holder as a direct result of the ownership or management of the applicable portion of the Project, such as insurance premiums or real estate taxes, if any; D. The costs of any improvements made by such holder, if any; and E. An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the mortgage debt and such debt had continued in existence to the date of payment by the City.

If the City has not purchased the mortgage within ninety (90) days of the expiration of the ninety (90) days referred to above, then the right ofthe City to purchase shall expire.

In the event that the holder does not exercise its option to construct afforded in this Section, and if the City elects not to purchase the mortgage of holder, upon written request by the holder to the City, the City shall use reasonable efforts to assist the holder in selling the holder's interest to a qualified and responsible party or parties (as determined by City), who shall assume the obligations of making or completing the improvements required to be constructed by the Developer, or such other improvements in their stead as shall be satisfactory to the City. The proceeds of such a sale shall be applied first to the holder of those items specified in subparagraphs A through E hereinabove and any balance remaining thereafter shall be applied as follows:
(1) First, to reimburse the City for all costs and expenses actually and reasonably incurred by the City, including, but not limited to, payroll expenses, management expenses, legal expenses, and others;
(2) Second, to reimburse the City for all payments made by City to discharge any other encumbrances or liens on the applicable portion of the Project or to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations, defaults, or acts of the Developer, its successors or transferees; -47-
Ol102J00121l08862.12
742
(3) Third, to reimburse the City for all costs and expenses actually and reasonably incurred by the City, in connection with its efforts assisting the holder in selling the holder's interest in accordance with this Section; and
(4) Fourth, any balance remaining thereafter shall be paid to the Developer.

18.8 Right of City to Cure Mortgage Default. In the event of a default or breach by the Developer (or entity permitted to acquire title under this Section) prior to completion of the Project or the applicable portion thereof, and the holder of any such mortgage has not exercised its option to complete the development, the City may cure the default prior to completion of any foreclosure. In such event, the City shall be entitled to reimbursement from the Developer or other entity of all costs and expenses incurred by the City in curing the default, to the extent permitted by law, as if such holder initiated such claim for reimbursement, including legal costs and attorneys' fees, which right of reimbursement shall be secured by a lien upon the applicable portion of the Project to the extent of such costs and disbursements. Any such lien shall be subject to:

A. Any Mortgage; and
B. Any rights or interests provided in this Agreement for the protection of the holders of such Mortgages;
provided that nothing herein shall be deemed to impose upon the City any affirmative obligations (by the payment of money, construction or otherwise) with respect to the Project in the event of its enforcement of its lien.

18.9 Right of the City to Satisfy Other Liens on the Developer's Property After Conveyance of Title. After the conveyance oftitle and prior to completion of construction and development, and after the Developer has had a reasonable time to challenge, cure, or satisfY any liens or encumbrances on the Project, the City shall have the right to satisfY any such liens or encumbrances; provided, however, that nothing in this Agreement shall require the Developer to payor make provision for the payment of any tax, assessment, lien or charge so long as the Developer in good faith shall contest the validity or amount thereof, and so long as such delay in payment shall not subject the Project or any portion thereof to forfeiture or sale.

19. MISCELLANOUS.

19.1 Estoppel Certificates. Either Party (or a Mortgagee under Section 18) may at any time deliver written notice to the other Party requesting an Estoppel Certificate stating:

A. The Agreement is in full force and effect and is a binding obligation ofthe Parties;
B. The Agreement has not been amended or modified either orally or in writing or, if so amended, identifYing the amendments; and C. There are no existing defaults under the Agreement to the actual knowledge ofthe party signing the Estoppel Certificate. -48-
01102/0012/108862.12
743
A Party receiving a request for an Estoppel Certificate shall provide a signed certificate to the requesting Party within thirty (30) days after receipt of the request. The Planning Director may sign Estoppel Certificates on behalf of the City. An Estoppel Certificate may be relied on by assignees and Mortgagees. The Estoppel Certificate shall be substantially in the same form as Exhibit "C."

19.2 Force Majeure. The time within which the Developer or the City shall be required to perform any act under this Agreement shall be extended by a period of time equal to the number of days during which performance of such act is delayed due to war, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, casualties, natural disasters, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions on priority, initiative or referendum, moratoria, processing with governmental agencies other than the City, unusually severe weather, third party litigation as described in Section 15.3 above, or any other similar causes beyond the control or without the fault of the Party claiming an extension oftirne to perform. An extension of time for any such cause sball be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if written notice by the party claiming such extension is sent to the other Party within thirty (30) days of knowledge of the commencement of the cause. Any act or failure to act on the part of a Party shall not excuse performance by that Party.

19.3 Interpretation.

19.3.1. Construction of Development Agreement. The language of this Agreement shall be constrned as a whole and given its fair meaning. The captions of the sections and subsections are for convenience only and shaH not influence constrnction. This Agreement shall be governed by the laws of the State of California. This Agreement shall not be deemed to constitute the surrender or abrogation of the City's governmental powers over the Developer's Property.

19.3.2. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this Agreement and this Agreement supersedes all previous negotiations, discussions, and agreements between the Parties. No parol evidence of any prior or other agreement shall be permitted to contradict or vary the terms of this Agreement.

19.3.3. Recitals. The recitals in this Agreement constitute part of this Agreement and each Party shall be entitled to rely on the truth and accuracy of each recital as an inducement to enter into this Agreement.

19.3.4. Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefitted thereby of the covenants to be performed hereunder by such benefitted Party.

19.4 Severability. If any provision of this Agreement is adjudged invalid, void or unenforceable, that provision shall not affect, impair, or invalidate any other provision, unless such judgment affects a material part of this Agreement in which case the parties shall comply with the procedures set forth in Section 15.3.3 above. -49-
Ol102JOOl2!108862.12
744

19.5 Joint and Several Obligations. All obligations and liabilities of the Developer hereunder shall be joint and several among the obligees.

19.6 No Third Party Beneficiaries. The only Parties to this Agreement are the Developer and the City and their successor and assigns. There are no third party beneficiaries and this Agreement is not intended, and shall not be construed, to benefit or be enforceable by any other person whatsoever.

19.7 Notice.

19.7.1. To Developer. Any notice required or permitted to be given by the City to the the Developer under this Development Agreement shall be in writing and delivered personally to the Developer or mailed, with postage fully prepaid, registered or certified mail, return receipt requested, addressed as follows:

Pardee Homes.
10880 Wilshire Boulevard, Suite 1900
Los Angeles, CA 90024
Attention: Legal department
With a copy to:

Kenneth B. Bley, Esq.

Cox, Castle & Nicholson LLP
2049 Century Park East, 28th Floor
Los Angeles, CA 90067-3284
or such other address as the Developer may designate in writing to the City.

19.7.2. To the City. Any notice required or permitted to be given by the Developer to the City under this Development Agreement shall be in writing and delivered personally to the City Clerk or mailed with postage fully prepaid, registered or certified mail, return receipt requested, addressed as follows:

City of Banning
99 E. Ramsey Street
Banning, CA 92220
Attention: Planning Director
With a copy to:

David J. Aleshire, Esq., City Attorney
Aleshire & Wynder, LLP
18881 Von Karman Avenue, Suite 400
Irvine, California 92612
or such other address as the City may designate in writing to the Developer. -50-
01102/0012/1 08862. 12
745
Notices provided pursuant to this Section shall be deemed received at the date of delivery as shown on the affidavit of personal service or the Postal Service receipt.

19.8 Relationship of Parties. It is specifically understood and acknowledged by the Parties that the Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants, and conditions contained in this Agreement. The only relationship between the City and the Developer is that of a government entity regulating the development of private property and the owner of such private property.

19.9 Attorney's Fees. If either Party to this Agreement is required to initiate or defend litigation against the other Party, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Attorney's fees shall include attorney's fees on any appeal, and, in addition, a Party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to a final judgment.

19.10 Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent necessary to implement this Agreement. Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary to implement this Agreement or to evidence or consnmmate the transactions contemplated by this Agreement.

19.11 Time of Essence. Time is of the essence in:

A. The performance of the provisions of this Agreement as to which time is an element; and
B. The resolution of any dispute which may arise concerning the obligations of the Developer and the City as set forth in this Agreement.

19.12 Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon the default of the other Party, shall not constitute a waiver of such Party's right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter.

19.13 Execution.

19.13.1. Countemarts. This Agreement may be executed by the parties in counterparts which counterparts shall be construed together and have the same effect as if all of the Parties had executed the same instrument.

19.13.2. Recording. The City Clerk shall cause a copy of this Agreement to be executed by the City and recorded in the Official Records of Riverside County -51-
01102/00121108862.12
746
no later than ten (10) days after the Effective Date (Gov't Code § 65868.5). The recordation of this Agreement is deemed a ministerial act and the failure of the City to record the Agreement as required by this Section and the Development Agreement Statute does not make this Agreement void or ineffective.

19.13.3. Authority to Execute. The persons executing this Agreement on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing, (ii) they are duly authorized to sign and deliver this Agreement on behalf of the Party he or she represents, (iii) by so executing this Agreement, such Party is formally bound to the provisions of this Agreement, (iv) the entering into of this Agreement does not violate any provision of any other Agreement to which the Party is bound and (v) there is no litigation or legal proceeding which would prevent the Parties from entering into this Agreement. (SIGNATURES ON THE NEXT PAGE.)
-52-
01102/0012/108862.12
747
IN WITNESS WHEREOF, the City and the Developer have executed this Agreement on the date fIrst above written.
01102/0012/108862.1:2

CITY OF BANNING
BY:~l2V~ Don Robinson, Mayor
"DEVELOPER"
PARDEE HOMES, a California corporation
BY:

PreSigellt Michael V. McGee
,,/ !)i j
BY:
pre~Sid.ent. ?d ChiEf ,.~xefutive OffiCer
,/' / / / __ ~____ v"'/ U ' .-
-53-
Seeretary y Glad
Senior Vice resident-Governmental
Affairs
748

CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
State of California
County of Los Angeles
On April 24, 2012, before me, Nancy Trojan, Notary Public personally appeared Michael V. McGee, President and Chief Executive Officer and Amy Glad, Senior Vice President-Governmental Affairs who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entities upon behalf of which the persons acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

NANCY TROJAN WITNESS my hand and official seal
CommiSSion # 1903865
~ Notary Public· California ~ z Los Angeles County ~ J •••• e J4x :OT"!' :x~rts geg 1J}~ltl Nancy rojan
Notary Public i a d for said State.
- - - - - - - - - - - - - - - - -OPTIONAL - - - - - - - - - - - - - - - - - - - - - - - Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document: Development Agreement - City of Banning Signers are Representing: Pardee Homes
Signer( s) other than named ahove:

Name of Signer:

Corporate Officers Title:

CAPACITY CLAIMED BY SIGNER
Michael V. McGee and Amy Glad
President and Chief Executive Officer and Senior Vice President· Governmental Affairs
749
EXHIBIT "A"

MAP AND LEGAL DESCRIPTION OF DEVELOPER'S PROPERTY

LEGAL DESCRIPTION
Those certain parcels of land situated in the City of Banning, County of Riverside, State of California, being Lots I through 20 of Tract No. 34330 as shown on a map thereof filed in Book 429, Pages 84 through 103 of Maps in the Office of the County Recorder of said Riverside County.
750
EXHIBIT "A"

MAP OF DEVELOPER'S PROPERTY
m~H"""i;;llil"'~'~' iiiiiiii~~~"~ri;;;;iii;ij2r IN THE CITY OF BANNING, COUNTY OF RIVERSIDE, STATE OF CAUFORNIA W·.m TRACT NO. 34330 SHEET 3 OF 20 SHEETS
6249814110399v19
BEIIIll ~ SlJBCMSIOH OF POR1l~ or u:rr 1 IS SHOIirn O~ El{ClJJSIO~ IIAP (!£C.OI1ll<D JUr<E', l'S\! AS I~SOOl~EHf H<). ,1000 OF omClIIL ~ECQII\l5 0, Rl'/ERSID£ OOIJ!IlJ. POIITIOK OF SECI10M J!. !(l'jfflSliIP 2 SOIlTll. WlGt t WT, l.1li) _ or St~ I, 1000000HiP 3 W\Illi, ~~GE 1 1I'ESr, B01lI SIN IIII!NARIllHO ~ERlDlMI. .\COOROIHG TO 1!IE OmctlJ.PI.ATTHEREOF.

WIWA1I L. GREEN, LS. 4547 JANUARY 1008
FOR COIlVEYANCE AND FINANCE PURPOSES
SlEC. 25. T28. RWil, S2M
,
,
,
,
,
,
----------1-
LOT'4
lOT15
LOT,s
LOTI?
LOT 19
Exhibit "A"-2
I1I11
""""'T~~ I>JR ""IIW rnAn;. ~~,
~~\::~
751
62498\411 0399v 19
EXHmIT "A"

PARDEE BANNING PROPERTY
Exhibit '''A''-3
752
62498\4110399vI9
~ " Zl,6AC

SPECIFIC PLAN MAP
,
lUAU '"
e, l1lR_l~,OOO
.,~
CI1YOFMNNING
Exhibit "A"-4
-
" fl.1Ae
" OPEilSPAGE li5.:lAG
ARESTAAONSilE ~­

1.6AC '
" MDR_7,200
Zl.llAC
~ HlQh DensilyResldemfai (l(1..1B DUlAC)
~ OS-GolfCourselDrainage
~ OS-Parks
~ OS-Drainage BasiQ
~Scllool
~Gommerclal
§i§J Ulil1ySUbslation
ProjactBoundary
Current City Bounday
Proposed City BOIJIldary
I
753
EXHffiIT "B"

EXISTING DEVELOPMENT APPROV ALS/FEE STUDIES
A. EXISTING DEVELOPMENT APPROVALS fDA Section 1.35)

1. General Plan Amendment No. 11-2501

2. Zone Change No. 11-3501

3. Butterfield Specific Plan

4. Development Agreement
B. DEVELOPMENT FEE STUDIES IN PROCESS IDA Sections 1.28, 4.7) Studies being pepared in accordance with Section 7.2.
01102l{0012/108862.12

1. General Facilities Fee"

2. Fire Facilities Fee"

3. Police Facilities Fee"

4. Traffic Control Fee"

5. Park Land Fee

6. Road and Bridge Fee

7. Recycled Water Fee

8. Water Connection"

9. Waste Water Connection" (Collection Fee)

10. Waste Water Frontage Fee

11. Emergency Shelter Fee
" Also included in Exhibit D and are subject to Developer Incentive Credit under Section 6.8.

Exhibit B - Page 1
754
Date Requested:

Date of Certificate:

EXHIBIT "C"

ESTOPPEL CERTIFICATE
On , 2012, the City of Banning approved the Development Agreement between Pardee Homes, a Califomia corporation and the City of Banning (the "Development Agreement").

This Estoppel Certificate certifies that, as of the Date of Certificate set forth above:
[CHECK WHERE APPLICABLE]

1. The Development Agreement remains binding and effective.

2. The Development has not been amended.

3. The Development Agreement has been amended in the following aspects: __ _

4. To the best of our knowledge, neither Developer nor any of its successors is in default under the Development Agreement.

5. The following defaults exist under the Development Agreement: _____ _ This Estoppel Certificate may be relied upon by an transferee or mortgagee of any interest in the property which is the subject of the Development Agreement.

OI102//0012/108862.12

CITY OF BANNING
BY:--=-::-c-:=-=-::=-:c:::-==-==-=-=----

PLANNING DIRECTOR
Exhibit C - Page 1
755
EXHIBIT "D"

DEVELOPMENT IMPACT FEES
Fire Facilities
Residential
Single Family Detached
Townhouse/Duplex
Multi-Family
Mobile Home
Nonresidential
Com/Shopping Ctr 50,000 SF or less
Com/Shopping Ctr 50,001- 100,000 SF
Com/Shopping Clf 100,001- 200,000 SF
Com/Shopping Ctf over 200,001 Sf
Office/lnst 25,000 SF or less
Office/lnst 25,001- 50,000 SF
Office/lnst 50,001-100,000 SF
Medical- Oent~1 Office
Hospital
Business Park
Light Industrial
Manufacturing
Warehousing
Elementary School
Other Nonresidential
lodging
Day Care
Nursing Home
Polke F;;Icilities
Residential
Single Family Detached
Townhouse/Duplex
Multi·Family
Mobile Home
Nonresidential
Com/Shopping Clr 50,000 SF or less
Com/Shopping Ctr 50,001·100,000 SF
Com/Shopping Ctr 100,001- 200,000 SF
Com/Shopping Ctr over 200,001 SF
Office/lnst 25,000 SF or tess
Offlce/lnst 25,001· 50,000 Sf
Office/lnst 50/001- 100/000 SF
Medlcal- Dental Office
Hospital
Business Park
Light Industrlal
Manufacturing
Warehousing
Elementary School
Other Nonresidential
01102/10012/108862.12
EXHIBIT nOn

CITY OF BANNING

SCHEDULE OF FEES
DEVElOPMENT IMPACT FEES
1,335.00 per unit
1,335.00 per unit
1,335.00 per unit
1,335.00 per unit
$ 579.00 per 1,000 SF
$ 506.00 per 1,000 Sf
$ 450.00 per 1,000 SF
$ 405.00 per 1,000 SF
$ 841.00 per 1,000 SF
$ 792.00 per 1,000 SF
$ 748.00 per 1,000 SF
$ 821.00 per 1,000 SF
$ 685,00 per 1,000 SF
$ 640.00 per 1,000 Sf
$ 468.00 per 1/000 Sf
$ 363.00 per 1,000 Sf
$ 259.00 per 1,000 SF
$ 186.00 per 1,000 SF
$ 144.00 per room
$ 32.00 per student
$ 73.00 per bed
823.00 per unlt
626.00 perunlt
913.00 perunit
500.00 perunil
$ 472.00 per 1/000 SF
$ 413.00 per 1,000 SF
$ 358.00 per 1,000 SF
$ 307.00 per 1,000 SF
$ 192.00 per 1,000 SF
$ 164.00 per 1,000 SF
$ 140.0q per 1,000 SF
$ 379.00 per 1,000 SF
$ 184.00 per 1,000 SF
$ 134.00 per 1,000 SF
$ 73.00 per 1,000 SF
$ 40.00 per 1,000 SF
$ 52.00 per 1,000 SF
152.00 per 1,000 SF
lof3
Exhibit D - Page 1
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006-07S 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006·075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006·075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006-075 8/8/2006
Reso.2006·075 8/8/2006
Reso. 2006..(175 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2005-075 8/8/2006
Reso. 2006·075 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006·075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006..(175 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso, 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2005-075 8/8/2006
Reso. 2006·075 8/8/2006
Reso. 2006..(175 8/8/2006
Reso. 2006·075 8/8/2006
Reso. 2006-075 8/8/2006
756
Day Care
Nursing Home
Traffic COntrol Facilities
Residential
Single Family Detached
Townhouse/Duplex
Multi-Family
Mobile Home
Nonresidential
Com/Shopping Ctr 50,000 SF or less
COm/Shopping Ctl" 50,001-100,000 SF
Com/Shopping Ctl" 100,001- 200,000 SF
Com/Shopping elf over 200,001 SF
Office/lnst 25,000 SF or less
Office/lnst 2.5,001- 50,000 SF
Offlce/lnst 50,001-100,OOOSF
Medical- Dental Office
Hospital
Business Park
tight Industrial
Warehousing
Elementary School
Other Nonresidential
lodging
Day Care
Nursing Home
Parkland
Residential
Single Family Detached
Townhouse/Duplex
Multi-Family
Mobile Home
Commercial/Industrial
General City Facilities
Residential
Single Family Detached
TownhollselDuplex
Multi-Family
Mobile Home
Nonresidential
Com/Shopping Ctr 50,000 Sf or less
Com/Shopping elf 50,001-100,000 SF
Com/Shopping Ctr 100,001- 200,000 SF
/0012/108862.12
EXHIBIT I1DII

CITY OF BANNING

SCHEDULE OF FEES

DEVELOPMENT IMPACT FEES'

47.00 24,00 per bed
$ 250.00 per unit
$ 153.00 p!lrunit
$ 172.00 p!lrunit
$ 130.00 perunit
$ 1,176.00 per 1,000 SF
$ 1,029.00 per 1,000 SF
$ 891.00 per 1,000 SF
$ 764.00 per 1,000 SF
$ 479.00 per 1,000 SF
$ 409.00 per 1,000 SF
$ 349.00 per 1,000 SF
$ 944.00 per 1,000 SF
$ 459.00 per 1,OOOSF
$ 333.00 perl,OOOSF
$ 182.00 per 1,000 SF
$ 130.00 per 1,000 SF
$ 379.00 per 1,000 SF
$ 238.00 per room
$ 117.00 per student
$ 62.00 per bed
$ 1,955.00 per unit
$ 1,485.00 perullit
$ 2,168.00 per unit
$ 1,187.00 per unit
$ 1,233.00 per acre
$ 478.00 perunlt
$ 363.00 per unit
$ 530.00 per unit
$ 290.00 per unit
$ 208.00 per 1,000 SF
$ 182.00 per 1,000 SF
$ 162.00 per 1,000 SF
2of3
Exhibit D - Page 2
Reso. 2.006..(J75 8/8/2006
Reso. 2.006..(J75 8/8/2006
Reso. 2.006-075 8/8/2006
Reso. 2.006-075 8/B/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006-075 8/8/2006
Reso.2oo6-075 8/8/2006
Reso.2oo6:075 8/8/2006
Reso.2oo6-075 8/B/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2.006-075 8/B/2006
Reso. 2006-075 8/8/2006
Reso. 2.006·075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2{)06"075 8/8/2006
Reso.2006·075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006·075 8/8/2006
Reso.2006-075 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso. :2006·075 8/8/2006
Reso. 21106-075 8/8/2006
Reso.2005-075 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2006-tJ75 8/8/2006
Reso. 2006..(J75 8/8/2006
Reso.2006-075 8/8/2006
Reso. 2006-075 8/8/2006
Reso.2006-o75 8/8/2006
757
Officejlnst 25,000 SF or less
Officef\nst 25,001- 50,000 SF
Office/lnst 50,001-100,000 SF
Medical- Dental Office
Hospital
Business Park
Ught Industrial
Manufacturing
Warehousing
Elementary School
Other Nonresidential
lodging
Day Care
Nursing Home
Water Connection
Water system ~onnectlon fee
Wastewater Connection
Wastewater connection fee
EXHIBIT "0"

CITY OF BANNING

SCHEDULE OF FEES

DEVELOPMENT IMPACT FEES
$
$ 285.00 perl,OOOSF
$ 269.00 per 1,000 SF
$ 295.00 per 1,000 SF
$ 246.00 per 1,000 SF
$ 230.00 per 1,000 SF
$ 168.00 per 1,000 SF
$ 130.00 perl,OOD SF
$ 93.00 perl,OOO SF
$ 67.00 per 1,000 SF
$ 52.00 per room
$ 12.00 per student
$ 26.00 per bed
$ 7,232.00 per equivalent
dwelling unit
$ 2,786.00 per equivalent
dwelling unit
Rasa. 2006-{)75 8/8/2006
Rase. 2006-075 S/8/2006
Rasa. 2006-075 8/8/2006
Reso.2006-075 8{8/2006
Raso.2006-075 8/8/2006
Resa.2006-075 8/8/2006
Rase, 2006-075 8/8/200G
Resa. 2006-4)75 8/8/2006
Rasa. 2006-075 8/8/2006
Rase. 2006·075 8/8/2006
Rase, 2006-075 8/8/Z006
Reso.2006-075 8/8/2006
Reso.2006·075 8/8/2006
Ord.# 1320 12/14/2004
Ord.It1321 1/13/2005
* Fee shall be revised annually based an the average percentage change aver the previous calender year set/orth In the Construction Price Index/or the Los Angeles metropolitan area.
30f3
Exhibit D - Page 3
/0012/108862.12
758
EXHIBIT "E"

ADDITIONAL AGREEMENTS CONCERNING DEVELOPMENT
In addition to the other terms and conditions concerning the City's assistance to the Project, the City shall accommodate and expedite the development of the Developer's Property as follows:

1.0 CONSTRUCTION CONDITIONS
l.l Provision of Utility Connections. The City shall provide, at the Developer's expense, any necessary temporary and permanent utility connections requested by the Developer for power, water service and sewer service prior to recordation of [mal map.

1.2 Allowance of Transformers. The City shall allow the setting of transformers without requiring adjacent streets to be fully paved. It is anticipated that 6' feet of curb and gutter will be placed adjacent to the transformer to ensure correct elevation of the transformer pad. In the event that the location or elevation change, the Developer shall incur the full costs of relocation of both the curb and transformer.

1.3 Temporary Water Pipes. Temporary above ground pipes for construction water and temporary fIre hydrants will be acceptable for model and production homes prior to the fIrst certifIcate of occupancy in the construction phase being developed.

1.4 Provision of Construction Water. The City shall provide 'Jumpers" or temporary construction water at the City's normal rate.

1.5 Temporarv Use of City Sewer System. The City shall allow the temporary connection of construction trailers to the permanent City sewer system.

1.6 Temporarv Use of City Water System. The City shall allow temporary connection of construction trailers to the permanent City water system, provided that all required backflow devices are installed to protect the integrity of the system.

2.0 MAINTAINENCE

2.1 Maintenance of Construction Activities. The Developer shall contract directly for all work required for the maintenance of construction related activities, including but not limited to recycling of construction materials, erosion control, temporary fence installation, and temporary power installation. The selection and retention of the contractor, subcontractor or other person or entity to do such work shall be made by the Developer in its sole and absolute discretion. Trash removal will be coordinated directly with City franchisee. In regards to recycled materials, the Developer will produce for the City, at its request, a manifest to confIrm the location, type and amount of materials recycled.

Exhibit E - Page 1
01102/0012/108862.12
759

3.0 STREETS

3.1 Timing of Street Paving. The Developer shall be allowed to begin construction of model and production homes without first paving streets. Paved streets shall be required as a condition for tbe issuance of the certificate of occupancy for the first production home in each construction phase. The Developer shall install all-weather access for construction and emergency personnel. which. during dry months, may, include maintained dirt roads.

3.1 Final Lift of Pavement. The City shall allow the installation of the final 1" of asphalt pavement through coordination with the Developer and the City's Public Works officials. If the final 1" of pavement is installed early in the Development of specific in -tract or on backbone streets, and if no structural failures have occurred within the street system, the City may require a fog coat seal prior to exoneration of any outstanding bonds.

4.0 GRADINGIDRAINAGE

4.1 At Risk Grading. After the first plan check comments on either the rough or mass grading plans are received by the Developer, the City shall allow the Developer to begin grading operations for the area that is the subject of the plan check. The Developer acknowledges that any changes that may be required by the City will be made at the sole expense of the Developer.

4.2 Erosion Control. The Developer shall Develop the Developer's Property in such a way as to confine all storm water within the Project and shall, do so in a manner which adequately protects all construction within the Project. The Developer shall prepare an erosion control plan that will demonstrate methods that may be incorporated in the Development of the Project to protect downstream watersheds. The Developer shall manage and determine when erosion control measures need to be installed and maintained, but Developer shall comply with any order of City.

4.3 Drainage. Reverse lot drainage on lots that back up to open space, the Golf Course or parks shall be allowed provided that these areas are privately maintained by the Property Owners Association.

5.0 DEVELOPMENT CONDITIONS

5.1 Lot Line Adjustments. In the event that lot line adjustments are required for model complexes or adjustments to open space lots after the recordation of a final map, the City shall review the requested adjustment over the counter with City Engineering staff and the Developer or the Developer's representative. This will not be allowed for the construction of regular production homes.

5.2 Rear Residential Slopes. The Developer shall stabilize according to the City Grading and Landscape Ordinance the rear slope of all residential Lots prior to issuance of a Certificate of Occupancy but shall not be required to landscape andlor irrigate the slopes. It is the intention that rear yard landscaping will be required and installed within the time specified in the CCC & R's by the homeowner.

Exhibit E - Page 2
01102/0012/108862.12
760

5.3 Use of Joint Trenches. The City shall allow the Developer, to utilize joint trenches if it deems it necessary for Internet capabilities and/or telecommunication purposes.

5.4 Curbs. The construction of wedge, rolled curb, or mountable curbs within residential and multifamily zoned Planning Areas shall be permitted at the Developer's sole and absolute discretion.

6.0 GOLF COURSE

6.1 GolfCourse/Active Open Space Drainage Facilities. It is the Developer's intention that the flood control facilities proposed within this area will be constructed consistent with all applicable design standards for such facilities with their maintenance being the responsibility of the either the POA, the operator of the Golf Course, the Developer or the City and not the responsibility of the Riverside County Flood Control District (the "RCFCD") unless the facility has been identified as a Drainage Master Plan Facility by RCFCD.

6.2 Golf Course Water. The financial viability of the Golf Course will be dependent upon the costs to operate and maintain the Golf Course. The City shall provide water to the Project at a per unit rate not to exceed the cost highest tiered rate for irrigation water for the Golf Course for the Term of this Agreement.

7.0 PERMITTING

7.1 Fire Sprinkler Inspections. The City's Building and Safety Division shall serve as Special Fire Marshall for this project. Building and Safety shall be responsible for enforcing the then applicable provisions of the California Fire Code, and the California Building Standards Codes.

7.2 Bond Exoneration. Upon request by the Developer, the City shall generate a one-time punch list of items required for the full or partial exoneration of all Projectrelated improvement bonds, for improvements both within and outside of the Property. The City shall, within 5 days of receipt of a written request from the Developer, provide an inspector to determine if the punch list items have been corrected. Once it has been determined that they have been corrected, the City shall expeditiously exonerate the bonds, partially or fully, as applicable. No additional punch lists shall be generated once an improvement has been inspected and a punch list generated.

7.3 Building Permit Refunds. If a Building Permit has expired without construction having started on the structure for which the Building Permit was issued, the Developer shall be entitled to a refund of the building permit fee less 20% for an administrative fee. No refund will be provided if the request for the refund has not been provided to the City within 30 days of the Building Permit's expiration.

Exhibit E - Page 3
01102/0012/108862.12
761

8.0 PREVAILING WAGES
The Developer shall pay prevailing wages in connection with the construction of the Project as required by law. To the extent that it is determined that Developer has not paid, or does not pay, prevailing wages required by law for any portion of the Project, Developer shall defend and hold the City harmless from and against any and all increase in construction costs, or other liability, loss, damage, costs, or expenses (including reasonable attorneys' fees and court costs) arising from or as a result of any action or determination that the Developer failed to pay prevailing wages in connection with the construction of the Project.

Developer acknowledges and agrees that should any third party, including but not limited to the Director of the Department ofIndustrial Relations ("DIR"), require Developer or any of its contractors or subcontractors to pay the general prevailing wage rates of per diem wages and overtime and holiday wages determined by the Director of the DIR under Prevailing Wage Law, then Developer shall indenmifY, defend, and hold City harmless from any such determinations, or actions (whether legal, equitable, or administrative in nature) or other proceedings, and shall assume all obligations and liabilities for the payment of such wages and for compliance with the provisions of the Prevailing Wage Law. The City makes no representation that any construction or Site uses to be undertaken by Developer are or are not subject to Prevailing Wage Law.

9.0 COST OF DEVELOPMENT AGREEMENT
Developer has previously deposited approximately $200,000 with the City to pay all the City's outside consulting costs, costs of the environmental and legal review, and costs to process and obtain the Development Approvals, including this Agreement. As of March 1, such costs in aggregate exceed the amount deposited by $20,000, and additional costs are anticipated by the end of the approval process. Accordingly, before this Development Agreement shall be executed by the City, the Finance Director shall prepare a final written statement of costs incurred by City in the processing and approval of the Project, and Developer shall pay such amount in good money to City.

Exhibit E - Page 4
01102/0012l108862.l2
762
62498\4110399vI9
EXIllBIT "F"

PROPOSED PROJECT FACILITIES
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764
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EXHmIT "F"

PROPOSED PROJECT FACILITIES

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765
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EXHIBIT "F"

PROPOSED PROJECT FACILITIES
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EXIDBIT "G"

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6249814110399v19 Exhibit "G"-l
768
EXHIBIT "H"

BUTTERFIELD PROJECT FINANCING PLAN
This Financing Plan sets forth the basic terms and conditions pursuant to which City and Developer will cooperate to establish one or more CFD(s) and designate Improvement Areas therein pursuant to the CFD Act to finance the Eligible Facilities in connection with the Project and to levy the Services Special Tax. Capitalized terms not otherwise defined in this Financing Plan shall be defmed as provided in the Development Agreement.

I. Goals and Policies for Financing. The City will adopt general Goals and Policies for establishing CFDs. The Goals and Polices for Financing shall apply on a City-wide basis and may be amended from time to time. This Financing Plan shall be consistent with the City's Goals and Policies for Financing. The principal objectives of this Financing Plan are to:
a. Provide City and Developer reasonable certainty that each CFD will be established in accordance with the Goals and Policies and this Financing Plan.
b. Provide basic parameters for the levy of (i) the Facilities Special Tax (defmed below) within each CFD or Improvement Area to pay directly for Eligible Facilities and to secure the issuance of bonds of each CFD or Improvement Area secured by and payable from the Facilities Special Tax in order to finance the Eligible Facilities ("Bonds") and (ii) the Services Special Tax.
c. Provide basic parameters for the issuance of Bonds by or for the CFD(s) and any Improvement Areas therein.

2. Formation. City shall initiate proceedings to establish a CFD, upon Developer's petition request pursuant to the CFD Act and submittal of City's standard application form and receipt of an advance from Developer in an amount determined by City to pay for City's estimated costs to be incurred in undertaking the proceedings to establish the CFD ("Formation Proceeding Costs"). City agrees that all such advances for Formation Proceedings Costs so long as the costs re reasonable and not due to the actions of developer, incurred in connection with the formation of such CFD shall be eligible for reimbursement out of the first available proceeds of Surplus Special Taxes (defined below) and Bonds of the CFD and/or Facilities Special Taxes to the extent approved by the City's Bond Counsel ("CFD Proceeds"). The exact terms and conditions for the advance of funds by Developer and the reimbursement of such advances shall be memorialized in a separate agreement between City and Developer. City agrees to use its best efforts to complete the proceedings to form each CFD and record the notice of special tax lien for the CFD and each Improvement Area therein within 210 days after City's receipt of Developer's complete application and deposit.

3. Boundaries. The CFD boundary, or the boundaries of all CFDs if more than one is formed, shall encompass the Project. Each CFD may contain multiple Improvement Areas based on phasing of the Project within the CFD.

Exhibit H - Page I 01102/0012/108862.12
769

4. Eligible Public Facilities and Discrete Components. Subject to the City's adopted Goals and Policies for Financing, and review by Bond Counsel, conditions set forth in the following paragraph, City may authorize the CFDs to finance the acquisition or construction of the Eligible Facilities, which may include the following:
a. public streets and other related improvements within the public right-of-way
b. water facilities
c. storm drain facilities
d. sewer facilities
e. public parks, open space and landscaping
f. electrical facilities to be extent reasonable
g. any public facility to be constructed by City for which Developer is required to make a cash contribution pursuant to the Project's conditions of approval or this Agreement or which is included in any City capital improvement fee program and which public facility is to be owned by the City, subject to credit against the corresponding fee.

The costs of any Eligible Facility to be constructed by Developer that are eligible to be financed with CFD Proceeds ("Actual Costs") shall include the following if permissible under the Act:
(i) The actual hard costs for the construction or the value of the Proposed Eligible Facility, including labor, materials and equipment costs; (ii) The costs of grading related to the Eligible Facility; (iii) The costs incurred in designing, engineering and preparing the plans and specifications for the Eligible Facility;
(iv) The costs of environmental evaluation and mitigation of or relating to the Eligible Facility;
(v) Fees paid to goverrnnental agencies for, and costs incurred in connection with, obtaining permits, licenses or other goverrnnental approvals for the Eligible Facility; (vi) Costs of construction administration and supervision; (vii) Professional costs associated with the Eligible Facility, such as engineering, legal, accounting, inspection, construction staking, materials and testing and similar professional services; and
(viii) Costs of payment, performance and/or maintenance bonds and insurance costs directly related to the construction of the Eligible Facility.

Exhibit H - Page 2 01102/0012/108862.12
770
(ix) Any other costs permitted by law.

The Eligible Facilities constructed by Developer, and for which Developer elects to submit payment requests, shall be bid, contracted for and constructed in accordance with the Acquisition Agreement to be entered into between City and Developer at the time of formation of the first CFD. The Acquisition Agreement shall provide additional detail, consistent with the provisions ofthe Goals and Polices for Financing and this Development Agreement, with respect to the acquisition and construction of the Eligible Facilities, including a more detailed description of the specific Eligible Facilities that will be eligible to be financed through the CFD and discrete components of each Eligible Facility that may be reimbursed prior to the completion of the entire Eligible Facility. The Acquisition Agreement will also provide additional detail with respect to the financing of the City's construction of Eligible Facilities in satisfaction of corresponding City capital improvement fees, as elected by Developer. The CFD financing of the acquisition of an Eligible Facility constructed by Developer that is included in a City Capital improvement fee program or required by the Project conditions of approval, shall not preclude the Developer's receipt of corresponding fee credits.

5. Financing Parameters. Each CFD shall be authorized to levy Facilities Special Taxes of each Improvement Area and issue Bonds of each CFD or Improvement Area in one or more series to finance the Eligible Facilities in accordance with the basic parameters set forth below:
01102/00121108862.12
a. A precondition to the issuance of Bonds shall be that the value of the real property subject to Facilities Special Taxes required to repay the Bonds shall be at least three times the amount of the Bonds.
b. Each series of Bonds shall have a term of at least thirty (30) years and include escalating annual debt service commensurate with any annual escalation in the Facilities Special Taxes.
c. The total effective tax rate within each Improvement Area applicable to any residential parcel on which a residential dwelling has or is to be constructed, taking into account all ad valorem property taxes, voter-approved ad valorem property taxes in excess of one percent (1 %) of assessed value, the annual special taxes of existing community facilities districts and community facilities districts under consideration and reasonably expected to be established (but excluding the Services Special Tax), the annual assessments (including any administrative surcharge) of existing assessment districts and assessment districts under consideration and reasonably expected to be established (but excluding assessments for maintenance and services), and the Facilities Special Taxes, shall equal two percent (2.00%) of the projected initial sales price of the residential dwelling unit and such parcel, as estimated at the time of formation of the applicable CFD, or such lesser amount requested by Developer. The Facilities Special Taxes may escalate by up to 2% per year.

Exhibit H - Page 3
771

TABLE OF CONTENTS

1. DEFINITIONS .................................................................................................................. 3

1.1 Acquisition Agreement. ...................................................................................... 3

1.2 Anniversary Date .................................................................................................. 3

1.3 Annual Review. . .................................................................................................. 3 lA Applications ........................................................................... , ............................ 3

1.5 Appraisal of Land Value ....................................................................................... 4

1.6 Assignment." ....................................................................................................... 4

1.7 Authorizing Ordinance. . ...................................................................................... 4

1.8 Building Permit. .................................................................................................... 4

1.9 CC&R' s ................................................................................................................. 4

1.10 Certificate of Compliance. .. ................................................................................ 4

1.11 Certificate of Occupancy .................................................................................... 4

1.12 CFD ....................................................................................................................... 4

1.13 CFD Act. ............................................................................................................. 4

1.14 City ...................................................................................................................... 4

1.15 City Council. ....................................................................................................... 4

1.16 City Development Agreement Ordinance ............................................................. 4

1.1 7 City Manager. .. ................................................................................................... 4

1.18 City Wide Traffic Improvements. .. ..................................................................... 5

1.19 Claims or Litigation .............................................................................................. 5

1.20 Dedicate or Dedication. .. .................................................................................... 5

1.21 Default ................................................................................................................... 5

1.22 Developed Property ............................................................................................ 5

1.23 Development Goals ............................................................................................... 5

1.24 Developer's Property ............................................................................................ 5

1.25 Development. ........................................................................................................ 5

1.26 Development Agreement Statute .......................................................................... 5

1.27 Development Approvals ....................................................................................... 5

1.28 Development Impact Fees ................................................................................... 6

1.29 Development Plan ................................................................................................. 6

1.30 Director ............................................................................................................... 6

1.31 Economically Distressed Year .............................................................................. 6

1.32 Effective Date ....................................................................................................... 6

1.33 Eligible Facitlities ................................................................................................. 6

1.34 Exaction. . ............................................................................................................ 6

1.35 Existing Development Approvals ......................................................................... 6

1.36 Existing Land Use Regulations ............................................................................. 7

1.37 Financing Plan. . .................................................................................................. 7

1.38 Force Majeure ..................................................................................................... 7

1.39 Future Development Approvals. .. ....................................................................... 7 lAO General Plan. . ...................................................................................................... 7 IAI Goals and Policies for Financing .......................................................................... 7 IA2 GolfCourse/Active Open Space ......................................................................... 7 01102/00121108862.12
772
TABLE OF CONTENTS (cont.)
Page

1.43 Grading Permit. . .................................................................................................. 7

1.44 Improvement Area ................................................................................................ 7

1.45 Innocent Owner ................................................................................................... 7

1.46 LAFCO. . ............................................................................................................. 7

1.47 Land Use Regulations. .. .................................. " .................................................. 7

1.48 Legal or Equitable Interest. ................................................................................... 8

1.49 LMD.. .................................................................................................................. 8

1.50 Local Agency. . .................................................................................................... 8

1.51 Lot. ...................................................................................................................... 8

1.52 Master Tract Map. .. ............................................................................................. 8

1.53 Mortgage.. ........................................................................................................... 8

1.54 Mortgagee ............................................................................................................. 8

1.55 Mortgagee Successor. . ........................................................................................ 8

1.56 Municipal Code. . ................................................................................................. 9

1.57 Non-Defaulting Party. . ........................................................................................ 9

1.5 8 Owner.. ................................................................................................................ 9

1.5 9 Park fees. . ............................................................................................................ 9

1.60 Phase.. ................................................................................................................. 9

1.61 Phasing Plans. . .................................................................................................... 9

1.62 Planning Area. . .................................................................................................... 9

1.63 Planning Commission ........................................................................................... 9

1.64 Pre-Qualified Buyer .............................................................................................. 9

1.65 Property Owner's Association or POA. .............................................................. 9

1.66 Processing Fees. . ................................................................................................. 9

1.67 Project. ........................................................ : ..................................................... 10

1.68 Proposed Project Facilities .................................................................................. 10

1.69 Reimburse or Reimbursement. .......................................................................... 10 I. 70 Reservations of Authority ................................................................................... 10 I. 71 Services Special Tax. .. .................................... " ................................................ 10

1.72 Specific Plan. .. ................................................ " ................................................ 10

1.73 Subdivision Map. .. .......................................... " ................................................ 1 0

1.74 Subdivision Map Act. ......................................................................................... 10

1.75 Taxes... .............................................................................................................. 10 I. 76 Ten or 10th Year Anniversary Review. .. ........................................................... 10

1.77 Term.. ................................................................................................................ 10

1.78 Traffic Control Facility Fee. .. ........................................................................... 11

1. 79 Transfer.. ........................................................................................................... 11

1.80 Trigger Percentages. .. ....................................................................................... 11

1.81 TUMF.. ............................................................................................................. 11

1.82 Zoning Code ........................................................................................................ 11 ii
01102/00121108862.12
773
TABLE OF CONTENTS (cont.)

2. EXHIBITS ...................................................................................................................... 11

3. TERM ............................................................................................................................. 11

3.1 Tenn .................................................................................................................. 11

3.2 Termination Upon Completion of Construction ............................................... 12

3.3 Termination for Default. ................................................................................... 12

3.4 Extension of the Tenn: ...................................................................................... 12

3.5 Effective Date. . ................................................................................................. 12

4. DEVELOPMENT OF THE DEVELOPER'S PROPERTY ........................................... 12

4.1 Right to Develop ............................................................................................... 12

4.2 Right To Future Approvals. . ............................................................................. 12

4.3 Existing Development Approvals ..................................................................... 13

4.4 Specific Plan ....................................................................................................... 13

4.5 Priority Of Specific Plan ................................................................................... 13

4.6 Later Enacted Measures .................................................................................... 13

4.7 Impact Fee Studies ............................................................................................ 13

5. FINANCING AND THE CITY'S OBLIGATIONS ...................................................... 13

5.1 Formation ofCFD(s) and LMDs ...................................................................... 13

5.2 Adoption of Goals and Policies for Financing. . ................................................ 14

5.3 Services Special Tax. . ....................................................................................... 15

5.4 Planning Area 19, 35, 39 and 71 Drainage Facilities. . ..................................... 15

5.5 Reimbursement Agreements ............................................................................. 15

5.6 Landscape Maintenance Districts ..................................................................... 16

5.7 Reimbursement for Pre-Approval Costs ........................................................... 16

5.8 Obligations of Developer Respecting Financing; No Speculation ................... 17

6. TIME FOR CONSTRUCTION AND COMPLETION OF PROJECT. ......................... 17

6.1 Timing of Development. ................................................................................... 17

6.2 Development Goals ............................................................................................. 18

6.3 Development Goals Satisfied By Commencement of Construction ................... 19

6.4 Public Improvements. . ...................................................................................... 19

6.5 Development of Phasing Plans During Subdivision Map Approvals ............... 20

6.6 Ten Year Anniversary Review ............................................................................ 21

6.7 Failure to Satisty Phasing Goals and Objectives ................................................ 22

6.8 Developer Incentives for Expedited Development ............................................. 23

7. FEES, TAXES AND ASSESSMENTS .......................................................................... 23

7.1 Processing Fees ................................................................................................. 23

7.2 Development Impact Fees ................................................................................... 24

7.3 Wastewater, Domestic and Reclaimed Water Facilities Development Impact Fees ......................................................................................................... 24

7.4 Park Fees ............................................................................................................. 25

7.5 Traffic Impact Mitigation ................................................................................... 26

8. DEDICATIONS AND CONVEYANCES OF PROPERTY INTERESTS ................... 27

8.1 Park Improvements ............................................................................................. 27

8.2 Drainage Facilities. . .......................................................................................... 28 iii
01102/0012/108862.12
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TABLE OF CONTENTS (cont.)
Page

8.3 Satellite Water Treatment Plant. ....................................................................... 29

8.4 Fire Station Site. . ............................................................................................... 29

8. 5 Water Tanks. . .................................................................................................... 29

9. PROCESSING OF REQUESTS AND APPLICATIONS: OTHER GOVERNMENT PERMITS ........................................................................................................................ 30

9.1 Processing.. ....................................................................................................... 30

9.2 Developer to Pay for Expedited Processing ...................................................... 30

9.3 General Time Periods for Processing ................................................................. 30

9.4 Precise Grading/Plot Plan Revisions. .. ............................................................. 31

9.5 Additional Inspectors and Plan Checkers. .. ...................................................... 31

9.6 Tentative Subdivision Maps. .. .......................................................................... 31

9.7 Multiple Final Subdivision Maps: .................................................................... 31

9.8 Financing and Conveyance Maps: .................................................................... 31 9 .9 Water Availability. . ........................................................................................... 31

9.10 Other Governmental Permits. . .......................................................................... 31

9.11 Public Agency Coordination. .. .......................................................................... 31

9.12 Annexation.. ...................................................................................................... 31

10. AMENDMENT AND MODIFICATION OF DEVELOPMENT AGREEMENT ........ 32

10.1 Initiation of Amendment. .. ................................................................................ 32

10.2 Procedure.. ........................................................................................................ 32

10.3 Consent. ............................................................................................................ 32

10.4 Minor Modifications ........................................................................................... 32

10.5 Effect of Amendment to Development Agreement. ......................................... 33 II. RESERVATIONS OF AUTHORITY ............................................................................ 33

11.1 Limitations, Reservations and Exceptions. .. ..................................................... 33

11.2 Regulation by Other Public Agencies. .. ............................................................ 34

11.3 Fees, Taxes and Assessments. .. ........................................................................ 34

12. ANNUAL REVIEW ....................................................................................................... 34

12.1 Annual Monitoring Review. . ............................................................................ 34

12.2 Certificate of Compliance. . ............................................................................... 35

12.3 Failure to Conduct Annual Review ................................................................... 35 13 . DEFAULT, REMEDIES AND TERMINATION .......................................................... 35

13.1 Rights of Non-Defaulting Party after Default. .. ................................................ 35

13.2 No Recovery for Monetary Damages. .. ............................................................ 35

13.3 Recovery of Monies Other Than Damages ......................................................... 36

13.4 Compliance with the Claims Act. ..................................................................... 36

13.5 Notice and Opportunity to Cure ........................................................................ 36

13.6 Dispute Resolution .............................................................................................. 37

13.7 Waiver of Breach. . ............................................................................................ 38

13.8 Limitations on Defaults ....................................................................................... 38

13. 9 Venue.. .............................................................................................................. 39 14 . ASSIGNMENT ............................................................................................................... 39

14.1 Right to Assign ................................................................................................... 39 iv
01102/00121108862.12
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TABLE OF CONTENTS (cont.)

14.2 Sale to Pre-Qualified Buyer. . ........................................................................... .41

14.3 Tennination of Agreement With Respect to Individual Parcels Upon Sale to Public. . .......................................................................................................... 41

14.4 Declaration of Covenants .................................................................................... 42

15. RELEASES AND INDEMNITIES ................................................................................ 42

15.1 The City's Release As To Actions Prior To Effective Date ............................ .42

15.2 The Developer's Release As To Actions Prior To Effective Date. . ................ .42

15.3 Third-Party Litigation ......................................................................................... 42

15.4 Hold Harmless: Developer's Construction and Other Activities ..................... .44

15.5 Survival of Indemnity Obligations ................................................................... .44

16. EFFECT OF AGREEMENT ON TITLE ...................................................................... .44

16.1 Covenant Run with the Land. . ......................................................................... .44

17. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION ........................... .45

17.1 Non-liability of City Officers and Employees ................................................. .45

17.2 Conflict of Interest. ........................................................................................... 45

17.3 Covenant Against Discrimination. . ................................................................... 45

18. MORTGAGEE PROTECTION ..................................................................................... 45

18.1 Definitions ......................................................................................................... 45

18.2 No Encumbrances Except Mortgages to Finance the Project. ......................... .45

18.3 Developer's Breach Not Defeat Mortgage Lien .............................................. .46

18.4 Holder Not Obligated to Construct or Complete Improvements ....................... .46

18.5 Notice of Default to Mortgagee ......................................................................... .46

18.6 Right to Cure ....................................................................................................... 46

18.7 City's Rights upon Failure of Holder to Complete hnprovements .................. .47

18.8 Right of City to Cure Mortgage Default. . ........................................................ .48

18.9 Right of the City to Satisty Other Liens on the Developer's Property After Conveyance of Title ............................................................................................ 48

19. MISCELLANOUS .......................................................................................................... 48

19.1 Estoppel Certificates ........................................................................................... 48

19.2 Force Majeure ................................................................................................... 49

19.3 Interpretation ....................................................................................................... 49

19.4 Severability ....................................................................................................... 49

19.5 Joint and Several Obligations ........................................................................... 50

19.6 No Third Party Beneficiaries. . .......................................................................... 50

19.7 Notice .................................................................................................................. 50

19.8 Relationship of Parties ...................................................................................... 51

19.9 Attorney's Fees ................................................................................................. 51

19.10 Further Actions and Instruments. . ..................................................................... 51

19.11 Time of Essence ................................................................................................ 51

19.12 Waiver ............................................................................................................... 51

19.13 Execution ............................................................................................................ 51 v
01102/0012/108862.12
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AFFIDAVIT OF PUBLICATION
Record Gazette
218 N. Murray St., Banning, CA 92220
Proof of Publication
(2015.5 C.C.P.)
PHN CC Meeting 6-23-26 Atwell DA 10 Year
___________________________________________________
State of California          )
County of Riverside   )  SS.

I am a citizen of the United States and a resident of the State of California; I am over the age of eighteen years, and not a party to or interested in the above matter. I am the principal clerk of the printer and publisher of Record Gazette, a newspaper published in the English language in the City of Banning, County of Riverside, and adjudicated a newspaper of
general circulation as defined by the laws of the state of California by the Superior Court of the County of Riverside, under the date October 14, 1966, Case No. 54737.

That the notice, of which the annexed is a copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit:

Jun 12, 2026
Executed on: ____________________
At City of Banning, California
I ceritfy (or declare) under penalty of perjury that the foregoing is true and correct.
___________________________________________________
Signature
PHN CC Meeting 6-23-26 Atwell DA 10 Year | Page 1 of 2
June 12, 2026
777
PHN CC Meeting 6-23-26 Atwell DA 10 Year | Page 2 of 2
778

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Elizabeth Gibbs, City Manager
PREPARED BY: Holly Stuart, Public Works Program Manager Arturo Vela, Director of Public Works
MEETING DATE: June 23, 2026
SUBJECT: Public Hearing and Consideration of Resolution 2026-92, Approving a Report in Connection with the Proposed Collection on the 2026/2027 Riverside County Property Tax Roll of Delinquent Solid Waste Service Charges for Single-Family and Multi-Family Dwelling Accounts and Making a Determination of Exemption under CEQA
STAFF RECOMMENDATION:

Staff recommends that the City Council Adopt Resolution 2026-92:

1. Conduct the Public Hearing and accept public testimony regarding calendar year 2025 singlefamily and multi-family delinquent accounts to be applied to the Fiscal Year 2026/2027 County of Riverside property tax roll.

2. In the absence of a majority protest, approve the single-family and multi-family solid waste delinquency report from Waste Management of the Inland Empire (“Waste Management”) listing calendar year 2025 delinquencies for placement on the Fiscal Year 2026/2027 County of Riverside property tax roll (“County Tax Roll”).

3. Authorize the City Manager or designee to decrease the number of delinquent accounts and/or principal balances reported by Waste Management should delinquencies be resolved or reduced prior to final submittal of the delinquencies to the Riverside County Auditor-Controller for collection on the Fiscal Year 2026/2027 County Tax Roll.

4. Authorize the collection of calendar year 2025 single-family and multi-family delinquent solid waste charges on the Fiscal Year 2026/2027 County Tax Roll and direct the City Clerk to file a certified copy of the Resolution and the Solid Waste Delinquency Report with the County of Riverside Auditor-Controller.

5. Find that the proposed collection of delinquent charges on the County Tax Roll is exempt from CEQA.

BACKGROUND:

On April 27, 2021, the City Council approved a solid waste franchise agreement with Waste Management of the Inland Empire (Waste Management) for Residential and Commercial Garbage, Recyclable Materials, and Organics Waste Collection, Transportation, Recycling, and Disposal Services (Franchise Agreement), effective July 1, 2021.

In accordance with the Franchise Agreement, on October 12, 2021, the City Council adopted Ordinance No. 1576, amending and restating Chapter 8.28, “Garbage Collection and Disposal,” of Title 8, “Health and Safety,” of the Banning Municipal Code. In addition to implementing many aspects of the new Franchise Agreement, the ordinance allows the collection of delinquent residential service charges on 779
the County Tax Roll in accordance with the Franchise Agreement and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470 (“Article 4”). The operative date of the amendments to the Municipal Code was January 1, 2022.

Pursuant to Article 4, delinquent charges collected on the County Tax Roll will be collected in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.

The Franchise Agreement provides that Waste Management shall provide solid waste collection services to residential accounts, which include both single-family dwellings (SFD) and multi-family dwellings (MFD). Pursuant to the Franchise Agreement, services provided to residential accounts that become delinquent cannot be discontinued. In consideration of Waste Management not being able to discontinue residential services, the City is committed to working with Waste Management in placing qualifying residential delinquencies on the County Tax Roll. To initiate the process, the Franchise Agreement requires Waste Management, on May 1st of each year or such other agreed-upon date, to notify the City in writing that it seeks to have the City place qualifying delinquencies on the County Tax Roll. At no cost to the City, Waste Management is responsible for timely preparing required information, reports, notices, and materials.

Pursuant to the Franchise Agreement, a qualifying delinquent charge is an SFD or MFD charge that is at least 90 days in arrears and for which Waste Management has provided at least one written notice of the delinquency by mail to the service recipient and to the property owner, as listed on the last equalized assessment roll.

On April 23, 2026, Waste Management submitted a formal letter to the City requesting that qualifying SFD and MFD delinquent solid waste service charges for calendar year 2025 be placed on the Fiscal Year 2026/2027 County Tax Roll, together with a report which includes a description of each parcel within the City for which there is a qualifying delinquent charge (“Identified Parcel”) and the delinquent amount for each Identified Parcel (the “Report”). The Report is on file in the office of the City Clerk.

Amounts listed in the Report include past-due charges for service and late fees (2.5% or $5 minimum on balances over $15). Additionally, County Tax Roll Fees amount to 10% of unpaid balances per occurrence.

For the calendar year 2025 period, Waste Management’s request is for 912 delinquent residential accounts, with a total principal balance of $344,415.79. The principal balance for each parcel includes unpaid charges for solid waste collection services (including extra services) for all or a portion of the period of January 1, 2025, through December 31, 2025, and monthly late fees.

JUSTIFICATION:

The action before the City Council is to conduct a Public Hearing to place calendar year 2025 residential delinquent accounts on the Fiscal Year 2026/2027 County Tax Roll.

At the Public Hearing, the City Council shall hear and consider all oral and written objections or protests, if any, to the Report and the collection of the delinquent accounts on the Fiscal Year 2026/2027 County Tax Roll. If the City Council finds at the conclusion of the Public Hearing that the protest is made by the owners of a majority of the separate Identified Parcels, then the Report shall not be adopted and the delinquent charges shall not be collected on the County Tax Roll. In the absence of a majority protest, the City Council may adopt this resolution for inclusion of residential delinquent accounts to be added to the Fiscal Year 2026/2027 County Tax Roll.

On June 8, 2026, the notice of Public Hearing was mailed to the owner of each Identified Parcel at the address shown on the last equalized assessment roll available on the date the Report was prepared or as known to the City Clerk, and to the address to which the invoices are customarily mailed, if different than the owner’s address. The mailed notices describe the Council’s intent to place delinquent solid 780
waste charges on the Fisal Year 2026/2027 County Tax Roll, public hearing and protests process and deadline to resolve delinquent balances prior to submittal of the delinquencies to the County. In addition, notices of this public hearing were published in the Record Gazette on June 5, 2026 and June 12, 2026.

The following outlines the process for collecting delinquent solid waste charges:

1. Waste Management prepares an annual written Solid Waste Delinquency Report and submits a copy to the City. The delinquency report contains a description of each SFD and MFD parcel receiving solid waste services and the amount of the delinquent amount for each parcel that remains outstanding, which include service charges, late fees and a tax roll fee.

2. City staff evaluates delinquent residential accounts reported and continuously works with Waste Management to identify and resolve any identified inconsistencies. This process is pursued from the time the initial report is submitted by Waste Management through its final submittal to the County of Riverside.

3. At the public hearing, in absence of a majority protest, City Council approves the Solid Waste Delinquency Report and adopts a resolution authorizing the collection of delinquent solid waste charges to be placed on the annual County tax roll. City staff is authorized to decrease the number of residential delinquent accounts and/or principal balances reported to the County, if necessary. Property owners that resolve their outstanding calendar year 2025 solid waste charges with Waste Management, or make partial payment to Waste Management prior to July 17, 2026, will be removed from the accounts submitted to the County of Riverside Auditor-Controller by the City for collection on the County Tax Roll or the amounts submitted will be reduced accordingly.

4. Following the final determination of the delinquent solid waste charges, the City shall file with the County of Riverside Auditor-Controller any remaining delinquent balances, including applicable late fees and tax roll fee, to be included on the respective property owner’s Fiscal Year 2026/27 property tax bill.

Property owners have two options to resolve delinquent solid waste charges:

1. Resolve unpaid solid waste delinquencies with Waste Management before the July 17, 2026 deadline; or

2. Resolve unpaid solid waste delinquencies with the County of Riverside once delinquent charges are included on the Fiscal Year 2026/2027 property tax bill. Delinquent charges collected on the County Tax Roll will be collected in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.

CEQA
City staff has evaluated the proposed collection of the delinquent charges on the County Tax Roll for purposes of compliance with the California Environmental Quality Act (CEQA) and the State CEQA Guidelines. City staff has determined that the proposed collection of delinquent charges on the tax roll is an activity covered by the common sense exemption in that it can be seen with certainty that there is no possibility that such collection may have a significant effect on the environment because the collection only addresses the cost of an existing service provided to the public and not the commencement of a new service or program. Accordingly, the process for the collection of the delinquent charges on the County Tax Roll is exempt from CEQA pursuant to CEQA Guidelines Section 15061(b)(3).

FISCAL IMPACT:

At no cost to the City, Waste Management shall be responsible, without limitation, for all costs associated with preparing required information, including but not limited to reports, notices, and materials, publication costs, and Riverside County fees. The Franchise Agreement provides that the City will pay Waste Management moneys collected from the payment of the delinquent charges placed on the County Tax Roll, less the cost charged by the County to levy the charges on the County Tax Roll, and less a franchise fee equal to twelve and one-half percent (12.5%) of the amount received. If all 912 delinquent residential accounts are levied on the County Tax Roll and all accounts paid both installments 781
of the 2026-2027 property tax bill, the franchise amount the City would collect is $43,052. A budget for the franchise fee will be included with the proposed FY 2026/27 Operating Budget.

ATTACHMENTS:

1. Resolution 2026-92.docx

2. WM TaxRoll Letter_2026.pdf

3. CityOfBanning_Legal_PH Notice.pdf

4. Banning Public Hearing Example Letter.docx

5. column_affidavit_urrIDtf1OF08LgsNrCw1.pdf
782
Resolution 2026-92

RESOLUTION 2026-92

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING A REPORT IN CONNECTION WITH THE PROPOSED COLLECTION ON THE 2026/2027 RIVERSIDE COUNTY PROPERTY TAX ROLL OF DELINQUENT SOLID WASTE SERVICE CHARGES FOR SINGLE-FAMILY DWELLING AND MULTIFAMILY DWELLING ACCOUNTS, AND MAKING A DETERMINATION OF

EXEMPTION UNDER CEQA
WHEREAS, the City Council is authorized pursuant to Section 8.28.270 of the Banning Municipal Code and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470 (“HSC Code”), to levy and collect annual service charges for the collection, transportation, recycling and disposal of solid waste (“Charges”) and to have the delinquent Charges for single-family dwelling (SFD) and multi-family dwelling (MFD) accounts collected on the County of Riverside Property Tax Roll (“County Tax Roll”); and
WHEREAS, the City Council agreed to undertake annual proceedings to collect qualifying delinquent Charges for SFD and MFD accounts on the County Tax Roll in consideration of its franchise agreement with Waste Management of the Inland Empire (“Waste Management”) which provides that Waste Management may not discontinue collection services for these delinquent residential accounts due to nonpayment; and WHEREAS, pursuant to HSC Section 5473, delinquent Charges collected on the County Tax Roll shall be collected in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City; and WHEREAS, pursuant to its solid waste franchise agreement with the City, Waste Management notified the City in writing on April 23, 2026, that it seeks to have the City collect qualifying delinquent Charges for SFD and MFD accounts for calendar year 2025 on the 2026/2027 County Tax Roll; and
WHEREAS, pursuant to the Franchise Agreement, a qualifying delinquent Charge is a Charge that is at least 90 days in arrears and for which Waste Management has provided at least one written notice of the delinquency by mail to the service recipient and to the property owner, as the property owner is listed on the last equalized assessment roll (“Delinquent Charge”); and
WHEREAS, the City has caused a written report to be prepared and filed with the City Clerk in accordance with HSC Sections 5473 and 5473a (“Report”). The Report contains a description of each parcel within the City for which there is Delinquent Charge in connection with a SFD or MFD account (“Identified Parcel”) and the delinquent amount for each Identified Parcel. The City has received the Report, which is on file in the office of the City Clerk; and
783
Resolution 2026-92

WHEREAS, the City set a Public Hearing on the Report and collection of delinquent Charges on the 2026/2027 County Tax Roll for June 23, 2026 in the Council Chambers; and
WHEREAS, the notice of Public Hearing was mailed at least 14 days prior the hearing to the owner of each Identified Parcel at the address shown on the last equalized assessment roll available on the date the Report was prepared or as known to the City Clerk, and to the address to which the invoices are customarily mailed, if different than the owner’s address; and notices of the Public Hearing were published in the Record Gazette on June 5, 2026 and June 12, 2026; and
WHEREAS, the City Council has held a full and fair Public Hearing regarding the Report and collection of the Delinquent Charges on the 2026/2027 County Tax Roll, and the City Council considered all oral and written protests or objections regarding the Report and the collection of the Delinquent Charges on the 2026/2027 County Tax Roll; and WHEREAS, no majority protest, as determined in accordance with Health and Safety Code Section 5473.2, exists against the Report and collection of the Delinquent Charges on the 2026/2027 County Tax Roll.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The City Council hereby overrules all protests and objections to the Report and collection of the Delinquent Charges on the Fiscal Year 2026/2027 Tax Roll and approves the Report as filed.

SECTION 2. The City Council approves the Delinquent Charges, including late fees and a tax roll fee, to be placed for collection on the 2026/2027 County Tax Roll.

SECTION 3. The City Manager or designee is authorized to decrease the number of SFD and MFD accounts and/or principal balances set forth in the Report prior to final submittal, should the Delinquent Charges be resolved or paid in part prior to the deadline identified in the notice of the Public Hearing, which is July 17, 2026.

SECTION 4. The City Clerk or designee is authorized and directed to file a certified copy of this Resolution and the Report with the County of Riverside Auditor-Controller.

SECTION 5. The City Council concurs with staff’s determination that the proposed collection of the Delinquent Charges on the 2026/2027 County Tax Roll is exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is no possibility that such collection will have a significant effect on the environment because the collection of the Delinquent Charges on the County Tax Roll only addresses the cost of an existing service provided to the public and not the commencement of a new service or program. Consequently, the City Council finds the process for the collection of the Delinquent Charges on the 2026/2027 County Tax Roll is exempt from CEQA pursuant to State CEQA Guidelines Section 15061 (b)(3). 784
Resolution 2026-92

SECTION 6. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 23rd day of June 2026.

Richard Royce, Mayor
City of Banning
ATTEST:

Sandra Calderon, Deputy City Clerk
City of Banning
APPROVED AS TO FORM:

John Pinkney, City Attorney
Slovak, Baron, Empey, Murphy & Pinkney,
LLP
785
Resolution 2026-92

CERTIFICATION:

I, Sandra Calderon, Deputy City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2026-92, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 23rd day of June 2026 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sandra Calderon, Deputy City Clerk
City of Banning, California
786
April 23, 2026
Mr. Art Vela, P.E.

Director of Public Works/City Engineer
City of Banning
99 East Ramsey Street
Banning, CA 92220
RE: 2025 Tax Roll Process
Dear Mr. Vela,
As a formality and in accordance with WM’s responsibilities under Section 4.02.1 of the Franchise Agreement, WM is required to provide written notification by May 1st of its intent to place delinquent accounts on the tax roll for calendar year 2025.

4.02.1 Delinquent SFD and MFD Service Accounts. Contractor shall provide SFD and MFD Service Recipients with a notice of delinquency in the event of non-payment if an account is five (5) or more days past due.

Contractor will not discontinue Collection Service from delinquent SFD and MFD Service Units. In consideration for Contractor’s agreement to not discontinue Collection Service from delinquent SFD and MFD Service Units, City agrees to assist Contractor with placing and collecting qualifying delinquencies on the tax roll in accordance with Health & Safety Code §5473a. Contractor shall, by May 1st of each year or at such other time as agreed upon by City and Contractor, notify City in writing as to whether it will seek to have City place and collect qualifying delinquencies on the tax roll. Contractor shall be responsible for timely preparing, at no cost to City, all required information, reports, notices, and materials including without limitation, the report required by Health & Safety Code §5473, the notices required by Health & Safety Code §5473.1 and paying for any publication costs. City agrees that it shall within one-hundred twenty (120) days after the Effective Date of this Agreement adopt the necessary ordinance authorizing collection of eligible delinquent SFD and MFD Service Recipients on the tax roll, and to hold all hearings, timely publish all notices, and to timely make all filings required under the above sections, provided Contractor has timely provided the required information, reports, notices, and materials to City. For the purposes of this Section, a “qualifying delinquency” is an SFD or MFD Service Recipient that is at least ninety (90) days in arrears and for which Contractor has provided at least one written notice of the delinquency delivered to the service recipient and to the property owner, as that owner is listed on the last equalized assessment roll, by mail. City shall pay Contractor money collected from payment of the delinquent fees, less the Franchise Fee and the City’s cost to administer the tax roll lien process.

Once the dates are established, we will provide the customer delinquent report, issue customer notifications, and supply all required information and support for the hearing, as well as any other activities related to this matter.

Should you have any questions, please contact me at (951) 415-4389. Thank you for your time.

Respectfully,
Douglas Tani
WM Public Sector
787

CITY OF BANNING NOTICE OF PUBLIC HEARING
Notice of Public Hearing Regarding the Proposed Collection of Delinquent Solid Waste Charges for Single-Family and Multi-Family Accounts on the Riverside County 2026-27 Tax Roll on PUBLIC HEARING TO BE HELD:

June 23, 2026 at 5:00 p.m.

City Council Chambers – 99 East Ramsey Street, Banning, CA 92220 The City of Banning (“City”) levies and collects annual service charges for the collection, transportation, recycling and disposal of solid waste (“Charges”). The City’s franchised hauler, Waste Management of the Inland Empire (“Waste Management”), bills and collects the Charges.

Pursuant to Section 8.28.270 of the Banning Municipal Code and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470 (“Article 4”), the City is authorized to have the delinquent Charges for single-family and multi-family accounts collected on the County of Riverside Property Tax Roll (“Tax Roll”).

Delinquent Charges collected on the Tax Roll shall be collected in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.

In accordance with the collection agreement Waste Management has requested the City to collect on the 2026-27 Tax Roll qualifying delinquent Charges for single-family and multi-family accounts for all or a portion of the 2025 calendar year pursuant to Section 8.28.270 of the Banning Municipal Code and Article 4. A qualifying delinquent Charge is a Charge that is at least 90 days in arrears and for which Waste Management has provided at least one written notice of the delinquency by mail to the service recipient and to the property owner, as the property owner is listed on the last equalized assessment roll (“Delinquent Charge”).

The City has caused a written report to be prepared and filed with the City Clerk in accordance with Article 4 (“Report”). The Report contains a description of each parcel within the City for which there is Delinquent Charge in connection with a single-family or multi-family account (“Identified Parcel”) and the delinquent amount for each Identified Parcel. The Report is on file in the City Clerk’s O ice, Banning City Hall, 99 East Ramsey Street, Banning, CA 92220. The amount to be collected on the Tax Roll includes the unpaid Charges, accrued late fees, and a 10% Tax Roll fee.

NOTICE IS HEREBY GIVEN that the City Council will hold a public hearing on the Report on Tuesday, June 23, 2026 at 5:00 p.m., or as soon thereafter as the matter may be heard, in the City Council Chambers, located at 99 East Ramsey Street, Banning, CA, 92220. The public hearing may be continued from time to time.

At the public hearing, the City Council will hear and consider all oral or written objections or protests to the Report and the collection of the Delinquent Charges on the County Tax Roll.

Written protests may be personally delivered to the City Clerk during the public hearing or personally delivered to the City Clerk’s O ice, Banning City Hall, 99 E. Ramsey Street, Banning, CA 92220. Written protests may also be mailed to the City Clerk’s O ice, P.O. Box 998, Banning CA 92220. Written objections or protests must arrive by 5:00 pm on June 23, 2026 to be counted.

A written protest must clearly state the signer’s opposition to the collection of the Delinquent Charges on the Tax Roll, identify the parcel for which the protest is being submitted, and include an original signature of the person submitting the protest.

If, at the conclusion of the public hearing, protest is made by the owners of a majority of the separate Identified Parcels, the Delinquent Charges shall not be collected on the 2026-27 Tax Roll, but may be collected by other means, including a collection action.

If a delinquent amount and accrued late fees are paid in full or in part or otherwise cleared by July 17, 2026, the delinquent amount set forth in the Report and late fees will be removed or reduced as applicable.

For questions or additional information regarding the public hearing, you may call the Public Works Department at (951) 922-3130 or email [email protected].

Si necesita ayuda para entender la información de esta notificación por favor llame al (951) 922-3130. 788

NOTICE OF PUBLIC HEARING ON DELINQUENT SOLID WASTE SERVICE CHARGES JUNE 4, 2026
TOTAL BALANCE DUE ON ACCT AS OF JUNE 4, 2026: «Total_MAS» MINIMUM AMOUNT DUE TO AVOID TAX ROLL: «Principal»
«OwnerName»
«MailAddress»
«MailCityState» «MailZip»
SERVICE LOCATION:
«NAME»
«HOUSE» «STREET»
«CITY», «STATE» «ZIPCOD»
ACCOUNT #: «MAS_Acct»
PARCEL #: «ParcelNo»
Your property has been identified as having unpaid charges for solid waste collection services for all or a portion of the period January 1, 2025 – December 31, 2025. Please be aware that under an agreement with its contract trash hauler, Waste Management of the Inland Empire (“Waste Management”), the City of Banning (“City”) is authorized to annually place delinquent solid waste charges, together with accrued late fees and a Tax Roll fee, on the coming year’s County property tax roll pursuant to Section 8.28.270 of the Banning Municipal Code and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code, commencing with Section 5470 (“Article 4”). This is done to avoid unnecessary City-wide rate increases in future years or a reduction in solid waste services.

Delinquent charges collected on the County tax roll shall be collected in the same manner, by the same persons, and at the same time as, together with and not separately from, the general taxes of the City.

The Minimum Amount Due to Avoid Tax Roll referenced above includes unpaid charges for all or a portion of the period January 1, 2025 - December 31, 2025 and accrued late fees. If such amount is not paid or the amount otherwise cleared by July 17, 2026, this amount, together with a 10% Tax Roll fee, will be considered for collection on your County property tax bill for the coming fiscal year (2026-27).

The City in cooperation with Waste Management has prepared a written report which has been filed with the City Clerk in accordance with Article 4 (“Report”). The Report contains a description of each parcel within the City for which there are unpaid charges for solid waste collection services for all or a portion of the period January 1, 2025 through December 31, 2025 in connection with a single-family or multi-family account (“Identified Parcel”) and the amount to be collected on the County Tax Roll for each Identified Parcel. As described above, the amount to be collected on the Tax Roll includes unpaid charges, accrued late fees, and a Tax Roll fee.

The Banning City Council will conduct a public hearing on delinquent solid waste service charges at the following date and time at which time it will consider the Report and the placement of unpaid charges on the County property tax roll and the property tax bills:
5:00 P.M.

June 23, 2026
Banning City Hall
99 E Ramsey St.

Banning, CA 92220
At the public hearing, the City Council will hear and consider all oral or written objections or protests to the Report and the collection of delinquent solid waste service charges on the County tax roll. Written protests may be personally delivered to the City Clerk during the public hearing or personally delivered to the City Clerk’s Office, Banning City Hall, 99 E. Ramsey Street, Banning, CA 92220.

Written protests may also be mailed to the City Clerk’s Office, P.O. Box 998, Banning, CA 92220 and must arrive by 5:00 P.M. on June 23, 2026 to be counted. A written protest must clearly state the signer’s opposition to the collection of the delinquent charges on the County tax roll, identify the parcel for which the protest is being submitted, and include an original signature of the person submitting the protest. If, at the conclusion of the public hearing, protest is made by the owners of a majority of the identified Parcels, the delinquent 789
charges shall not be collected on the 2026-27 Tax Roll but may be collected by other means including a collection action.

If your property is a rental unit, this notice may indicate your tenant has not paid charges for solid waste services. The Banning Municipal Code makes solid waste disposal the responsibility of all property owners in the City. If tenants do not pay their solid waste service charges, the bill becomes the legal obligation of the property owner. Waste Management is willing to send property owners quarterly notices on rental units, so owners will be aware if their tenants have failed to pay. Call Waste Management at the number listed below to arrange for this service.

If you have recently acquired the property identified in this notice, you may not be responsible for charges for service prior to your purchase. You may establish the effective date of the change of ownership by providing a copy of the escrow document or grant deed to Waste Management.

Questions regarding unpaid charges should be directed to Waste Management at (866) 949-9719.

For your convenience, payments can now be made on-line at www.wm.com, or by automated attendant at 1-866-964-2729 using your WM Customer ID# located on your WM invoice.

For questions or additional information regarding the public hearing, you may call the Public Works Department at (951) 922-3130 or email [email protected].

Si necesita ayuda para entender la información de esta notificación por favor llame al (951) 922-3130. .

Waste Management ~ 17700 Indian St ~ Moreno Valley ~ CA ~ 92551 ~ 866-949-9719 790

AFFIDAVIT OF PUBLICATION
Record Gazette
218 N. Murray St., Banning, CA 92220
Proof of Publication
(2015.5 C.C.P.)
Tax roll Publication
___________________________________________________
State of California          )
County of Riverside   )  SS.

I am a citizen of the United States and a resident of the State of California; I am over the age of eighteen years, and not a party to or interested in the above matter. I am the principal clerk of the printer and publisher of Record Gazette, a newspaper published in the English language in the City of Banning, County of Riverside, and adjudicated a newspaper of
general circulation as defined by the laws of the state of California by the Superior Court of the County of Riverside, under the date October 14, 1966, Case No. 54737.

That the notice, of which the annexed is a copy, has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to-wit:

Jun 5, 2026,Jun 12, 2026
Executed on: ____________________
At City of Banning, California
I ceritfy (or declare) under penalty of perjury that the foregoing is true and correct.
___________________________________________________
Signature
Tax roll Publication | Page 1 of 1
June 12, 2026
791

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Elizabeth Gibbs, City Manager
PREPARED BY: Shah Nawaz, Deputy Water/Wastewater Director Art Vela, Director of Public Works
MEETING DATE: June 23, 2026
SUBJECT: Consideration of Resolution 2026-96, Adopting the 2025 Urban Water Management Plan (UWMP) and Consideration of Resolution 2026-97 Adopting the 2025 Water Shortage Contingency Plan (WSCP) STAFF RECOMMENDATION:

Adopt Resolution 2026-96 and Resolution 2026-97
BACKGROUND:

In accordance with the California Urban Water Management Planning Act (UWMPA) (California Water Code Sections 10610 et seq.), urban water suppliers that provide more than 3,000 acre-feet of water annually or serve more than 3,000 customers are required to prepare and update an Urban Water Management Plan (UWMP) every five years. The UWMP serves as the City’s primary long-term water resources planning document and evaluates water supply reliability over a 25-year planning horizon under normal, single-dry, and multiple-dry year conditions.

The City of Banning is the Urban Water Supplier for the City’s service area and portions of the surrounding unincorporated area. The City has remained in compliance with the UWMPA through the adoption and submittal of UWMPs in 1998, 2005, 2010, 2015, and 2020. The 2025 UWMP update is required to be adopted and submitted to the California Department of Water Resources (DWR) no later than July 1, 2026.

On October 14, 2025, the City entered into a Professional Services Agreement with West & Associates Engineering, Inc. to prepare the 2025 UWMP and associated Water Supply Assessments. The Draft 2025 UWMP was prepared in accordance with DWR’s 2025 Urban Water Management Plan Guidebook and includes updated population and water demand projections through 2050, water supply reliability assessments, demand management measures, and an updated Water Shortage Contingency Plan (WSCP).

Key updates incorporated into the 2025 UWMP include:

SBx7-7 conservation target reporting requirements;
Enhanced water loss audit and compliance reporting;
Additional demand management measures for suppliers exceeding their Urban Water Use Objective (UWUO);
Updated indoor residential water use standards;
Potable irrigation phase-out requirements for nonfunctional turf; New and revised water conservation and water use definitions; and Optional DWR planning and reporting tools to improve reliability and drought risk assessments. 792
Consistent with Water Code requirements, the City provided public notice and agency notifications regarding the availability of the Draft 2025 UWMP for review and comment. Notifications were provided to neighboring water agencies, local jurisdictions, interested parties, and other stakeholders. Copies of the Draft 2025 UWMP were made available through the City's website, City Hall, Public Works Department, and the Banning Library.

On June 23, 2026, the City Council will conduct a duly noticed Public Hearing to receive public comments on the Draft 2025 UWMP and Draft 2025 WSCP prior to consideration of adoption. Following adoption, the final UWMP and WSCP will be submitted to DWR in accordance with statutory requirements.

Tables 7.1 through 7.7 summarize the City's water supply and demand projections through normal years and multiple drought years. As indicated in these tables, the City will continue to maintain a healthy water supply portfolio through the planning period (2050) with the implementation of its water planning strategies (i.e. water conservation, recycled water, imported water purchases, etc.).

JUSTIFICATION:

Adoption of the 2025 Urban Water Management Plan and 2025 Water Shortage Contingency Plan is required by California Water Code and is necessary for the City to remain in compliance with the Urban Water Management Planning Act.

The UWMP serves as the City’s long-term water resources planning document and provides the foundation for evaluating future water supply reliability, supporting responsible growth and development, preparing Water Supply Assessments (SB 610), issuing Written Verifications of Water Supply (SB 221), and demonstrating compliance with state water management and conservation requirements.

Additionally, maintaining a current UWMP is a prerequisite for eligibility for many state grant and loan funding programs administered by the California Department of Water Resources (DWR) and other state agencies. Adoption of the 2025 UWMP and WSCP will help ensure the City remains eligible to pursue future funding opportunities for water supply, conservation, infrastructure, drought resilience, groundwater, recycled water, and related water resource projects.

Adoption of the UWMP and WSCP will further position the City to proactively plan for future water demands, regulatory changes, and long-term water supply reliability.

FISCAL IMPACT:

None.

ATTACHMENTS:

1. Resolution No. 2026-96.docx

2. Resolution No. 2026-97.docx

3. City of Banning - Final Draft 2025 UWMP.pdf

4. 2025 UWMP Supply and Demand Projections (Table 7).pdf

5. Public Hearing Notice Publication Proof.pdf

6. column_affidavit_ag9Hz7PzsM8z6X4q9KbW.pdf
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Resolution 2026-96