T h e C i t y o f B e l l f l o w e r
Families. Businesses. Futures.
16600 Civic Center Drive, Bellflower, CA 90706
Tel 562.804.1424 Fax 562.925.8660 www.bellflower.org
Next CC Resolution No. 22-65 Next CC Agreement No. 964 Next Ordinance No. 1422
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (562) 804-1424, extension 2220 or [email protected]. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.
Agenda Items are on file in the Office of the City Clerk and are available for public inspection during normal business hours. For your convenience, the Agenda is also posted on the City’s Website at www.bellflower.org with links to each Agenda Item (unless they are too lengthy or unavailable at the time of posting). Any supplemental material distributed to a majority of the members of the City Council/Successor Agency after the posting of this Agenda will be made available for public inspection during normal business hours in the City Clerk’s Office at City Hall, 16600 Civic Center Drive, Bellflower. (Privileged documents and Closed Session documents are exempted.)
REGULAR MEETING OF THE BELLFLOWER CITY COUNCIL
MONDAY, NOVEMBER 14, 2022
BELLFLOWER CITY HALL - COUNCIL CHAMBERS
5:30 P.M. CLOSED SESSION / 7 P.M. OPEN SESSION
PUBLIC PARTICIPATION
The City Council Chambers will be open to the public. Per the Los Angeles County Health Officer Order effective March 4, 2022, it is strongly recommended, but not required, to wear a face covering when inside Bellflower City Hall.
5:30 P.M. – CLOSED SESSION
1 CALL TO ORDER
2 ROLL CALL: Mayor Ray Dunton
Mayor Pro Tem Sonny R. Santa Ines
Council Member Raymond Y. Hamada
Council Member Dan Koops
Council Member Victor A. Sanchez
AGENDA
Bellflower City Council Agenda
November 14, 2022
3 RECESS TO CLOSED SESSION
A CONFERENCE WITH REAL PROPERTY NEGOTIATOR
(Pursuant to Government Code Section 54956.8)
Property: 16824 Bellflower Boulevard
Agency Negotiator: Jeffrey L. Stewart, City Manager
Negotiating Party: Martin Howard, Gardening at Nite, LLC Under Negotiation: Price and terms of payment
4 RECONVENE FOR OPEN SESSION
7 P.M. – OPEN SESSION
5 CALL TO ORDER
6 ROLL CALL: Mayor Ray Dunton
Mayor Pro Tem Sonny R. Santa Ines
Council Member Raymond Y. Hamada
Council Member Dan Koops
Council Member Victor A. Sanchez
7 INVOCATION: Mayor Ray Dunton
8 PLEDGE OF ALLEGIANCE: P.J. Mellana, Director of Parks and Recreation
9 CITY COUNCIL ANNOUNCEMENTS / PRESENTATIONS
A City Council Announcements
B Family Court Awareness Month Proclamation
10 PUBLIC COMMENTS
This is the time set aside for the public to address the City Council on matters not listed on the Agenda. Anyone wishing to address the City Council should come to the podium, be recognized by the Mayor, and state your name for the record. If you wish to address the City Council on an Agenda Item, you may do so by approaching the podium as we review that particular item. You will be given three (3) minutes to address the City Council.
Bellflower City Council Agenda
November 14, 2022
11 PUBLIC HEARINGS
A Consideration and possible action to conduct a public hearing to consider adopting Resolution No. 22-63 – A Resolution authorizing the City Manager to amend the FY 2022-23 Operating Budget and execute Purchase and Sale Agreement File No. 963, in a form approved by the City Attorney, with the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T for the purchase of real property located at 9818 Artesia Boulevard (APN 7160 -008-021). [Continued from October 10, 2022]
Recommendation to City Council: 1) Continue to take documentary and testimonial evidence; and after considering the evidence, adopt Resolution No. 22 -63 amending the fiscal year 2022-23 Operating Budget to allocate funds for the property purchase and authorizing the Mayor to execute Purcha se and Sale Agreement 963, in a form approved by the City Attorney; or 2) Alternatively, discuss and take other action related to this item.
B Consideration and possible action to conduct a public hearing to adopt Resolution No. 22-62 – A Resolution authorizing the City Manager to execute Agreement File No. 959, in a form approved by the City Attorney, with Darts Corner LLC. to lend funds for Working/Start Up Capital and Equipment Acquisition at 17242-44 Downey Avenue, per the Economic Development Business Assistance Plan, Chapter 5. [Continued from October 10, 2022] Recommendation to City Council: 1) Re-open the public hearing; take documentary and testimonial evidence; and consider whether to adopt Resolution No. 22-62; or 2) Alternatively, discuss and take other action related to this item.
12 ORDINANCES AND RESOLUTIONS FOR CONSIDERATION
A Consideration and possible action to read by title only, waive further reading and introduce Ordinance No. 1419 – An Ordinance repealing Bellflower Municipal Code Chapter 2.40 and amending Chapter 3.20 in its entirety to regulate contracting, including purchases of goods, supplies and services.
Recommendation to City Council: 1) Read by title only, waive further reading, and introduce Ordinance No. 1419; or 2) Alternatively, discuss and take other action related to this item.
B Consideration and possible action to read by title only, waive further reading and introduce Ordinance No. 1420 – An Ordinance adding Section 9.04.110 to the Bellflower Municipal Code (“BMC”) prohibiting unauthorized possession of individual catalytic converters.
Recommendation to City Council: 1) Read by title only, waive further reading, and introduce Ordinance No. 1420; or 2) Alternatively, discuss and take other action related to this item.
Bellflower City Council Agenda
November 14, 2022
12 ORDINANCES AND RESOLUTIONS FOR CONSIDERATION – Continued
C Consideration and possible action to 1) read by title only, waive further reading and introduce Ordinance No. 1421 – An Ordinance adopting the 2022 Editions of the California Building Code, the California Residential Code, the California Electrical Code, the California Mechanical Code, the California Plumbing Code, the California Energy Code, the California Fire Code, the California Existing Building Code, the California Green Building Standards Code, the California Referenced Standards Code, and the California Building Standards Administrative Code; making certain amendments based upon local conditions, and amending the Bellflower Municipal Code to reflect such changes; and 2) setting a public hearing for December 12, 2022, for second reading and adoption of the Ordinance.
CEQA: This Ordinance is exempt from review under the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 California Code of Regulations §§ 15000, et seq., the “CEQA Guidelines”) because it consists only of minor revisions and clarifications to an existing code of construction -related regulations and specification of procedures. These will not have the effect of deleting or substantially changing any regulatory standards or findings. Accordingly, the Ordinance (by itself) does not have the potential to cause significant effects on the environment. In addition, this Ordinance is an action being taken for enhanced protection of the environment and is exempt from further review under CEQA Guidelines § 15308.
Recommendation to City Council: 1) Read by title only, waive further reading, and introduce Ordinance No. 1421; and 2) Set a public hearing for the December 12, 2022, City Council Meeting for second reading and possible adoption of the Ordinance; or 3) Alternatively, discuss and take other action related to this item.
13 CONSIDERATION ITEMS
A Consideration and possible action to authorize increasing Southwest Patrol Inc., deployment, deputy overtime budget, and the purchase of a mobile surveillance camera system.
Recommendation to City Council: 1) Direct staff to initiate one or more of the considered options and authorize City Manager to amend the FY 2022 -23 budget incorporating appropriate funding; or 2) Alternatively, discuss and take other action related to this item.
14 CONSENT CALENDAR
All items under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. Specific items may be removed from the Consent Calendar at the request of any member of the City Council for separate consideration.
Bellflower City Council Agenda
November 14, 2022
14 CONSENT CALENDAR – Continued
A Consideration and possible action to receive and file City Council Warrant Register No. 23-051, dated November 14, 2022.
Recommendation to City Council: 1) Receive and file Warrant Register No. 23- 051; or 2) Alternatively, discuss and take other action related to this item.
B Consideration and possible action to receive and file City Council Treasurer’s Report for the Month of September 2022.
Recommendation to City Council: 1) Receive and file Treasurer’s Report; or 2) Alternatively, discuss and take other action related to this item.
C Consideration and possible action to approve the Minutes of the October 10, 2022, Regular Meeting of the City Council.
Recommendation to City Council: 1) Approve the October 10, 2022, Regular Meeting Minutes; or 2) Alternatively, discuss and take other action related to this item.
D Consideration and possible action to award a contract to West Coast Arborists, Inc. for tree maintenance services without the need for bidding as otherwise required by the Bellflower Municipal Code, and authorize the City Manager to execute Agreement File No. 230.3, in a form approved by the City Attorney, with West Coast Arborists, Inc.
CEQA: Taking the recommended action would not result in a potential for resulting in a direct or reasonably indirect physical change in the environment and, accordingly, does not qualify as a “project” under the California Enviro nmental Quality Act (CEQA) (Public Resources Code §§ 21000, et seq.) and CEQA Guidelines (California Code of Regulations (CCR), Title 14 §§ 15000, et seq.).
Even if the award of contract were to qualify as a project, it would be categorically exempt as a Class 1 or Class 5 project since, at best, it would constitute a minor alteration of existing public structures involving no expansion of use; or alteration in land use limitations (see CCR title 14 §§ 15301, 15305).
Recommendation to City Council: 1) Waive the bidding requirements pursuant to City of Bellflower Municipal Code Subsection 3.28.120B; 2) Award a 3-year tree maintenance contract to WCA, utilizing Irwindale’s agreement with WCA, in an amount not to exceed the annual adopted tree maintenance budget; 3) Authorize the City Manager to execute Agreement File No. 230.3 with WCA, in a form approved by the City Attorney; or 4) Alternatively, discuss and take other action related to this item.
E Consideration and possible action to receive and file Agreement File No. 394.3 with MuniServices, LLC for cannabis tax audit services.
Recommendation to City Council: 1) Receive and file Agreement File No. 394.3; or 2) Alternatively, discuss and take other action related to this item.
Bellflower City Council Agenda
November 14, 2022
14 CONSENT CALENDAR – Continued
F Consideration and possible action to authorize the City Manager to issue a new Request for Proposals (RFP) No. CC-2022-01 for Professional Services for Document Conversion and Scanning Services.
Recommendation to City Council: 1) Authorize the City Manager to issue RFP No. CC-2022-01; or 2) Alternatively, discuss and take other action related to this item.
G Consideration and possible action to adopt Resolution No. 22-64 – A Resolution approving the transfer of an oil pipeline franchise (Agreement File No. 137.1) from Paramount Pipeline, LLC to Air Products and Chemicals, Inc.
Recommendation to City Council: 1) Adopt Resolution No. 22 -64; or 2) Alternatively, discuss and take other action related to this item.
H Consideration and possible action to authorize the Director of Public Works, or designee, to install red curb parking restrictions at 17220 – 17228 Downey Avenue (C.E. #22-15).______________________________________________ Recommendation to City Council: 1) Authorize the Director of Public Works, or designee, to install red curb parking restrictions at 17220 – 17228 Downey Avenue; or 2) Alternatively, discuss and take other action related to this item.
I Consideration and possible action to authorize the Director of Public Works, or designee, to install red curb parking restrictions at four (4) bus stop locations (C.E. #22-16). __________________________________________ Recommendation to City Council: 1) Authorize the Director of Public Works, or designee, to install red curb parking restrictions at four (4) bus stop locations; or 2) Alternatively, discuss and take other action related to this item.
J Consideration and possible action to award a contract to Sequel Contractors, Inc. for the Bellflower Boulevard Complete Streets Project from Artesia Boulevard to South City Limits, HSIPL-5348 (032) (Specifications No. 18/19-07); and authorize the City Manager to execute a contract with Sequel Contractors, Inc. in a form approved by the City Attorney. _______________ CEQA: Pursuant to the California Environmental Quality Act (CEQA) (Public Resources Code §§ 21000, et seq.) and CEQA Guidelines (California Code of Regulations, Title 14, §§ 15000, et seq.), the City conducted an environmental assessment. Based on the environmental assessment, the project was determined to be categorically exempt pursuant to CEQA Guidelines § 15301 (Class 1 - Existing Facilities).
Recommendation to City Council: 1) Award a contract to Sequel for the Project and authorize the City Manager to execute a contract with Sequel, in a form approved by the City Attorney; or 2) Alternatively, discuss and take other action related to this item.
Bellflower City Council Agenda
November 14, 2022
14 CONSENT CALENDAR – Continued
K Consideration and possible action to award a contract to Select Electric, Inc., for the Bellflower Gateway Sign (Specifications No. 22/23-06); and authorize the City Manager to execute a contract with Select Electric, Inc., in a form approved by the City Attorney. ______________________________________ CEQA: Pursuant to the California Environmental Quality Act (CEQA) (Public Resources Code §§ 21000, et seq.) and CEQA Guidelines (California Code of Regulations, Title 14, §§ 15000, et seq.), the City conducted an environmental assessment. Based on the environmental assessment, the proj ect was determined to be categorically exempt pursuant to CEQA Guidelines § 15303 (Class 3 – New Construction or Conversion of Small Structures).
Recommendation to City Council: 1) Award a contract to Select Electric for the Project and authorize the City Manager to execute a contract with Select Electric, in a form approved by the City Attorney; and 2) Establish a budget of $500,000 in Account No. 020-47312-9000 (Public Arts Fund) and authorize a loan of approximately $200,000 from the General Fund; or 3) Alternatively, discuss and take other action related to this item.
L Consideration and possible action to waive a minor irregularity and award a contract to JR Universal Construction, Inc. for the Public Works Yard Office Renovation (Specifications No. 22/23-02); and authorize the City Manager to execute a contract with JR Universal Construction, Inc., in a form approved by the City Attorney. _______________________________________________ CEQA: Pursuant to the California Environmental Quality Act (CEQA) (Public Resources Code §§ 21000, et seq.) and CEQA Guidelines (California Code of Regulations, Title 14, §§ 15000, et seq.), the City conducted an environmental assessment. Based on the environmental assessment, the project was determined to be categorically exempt pursuant to CEQA Guidelines § 15303 (Class 1 – Existing Facilities).
Recommendation to City Council: 1) Waive a minor irregularity as to JR Universal’s listed price for Bid Item No.1 and award a contract to JR Universal for the Project and authorize the City Manager to execute a contract with JR Universal, in a form approved by the City Attorney; and 2) Authorize a budget amendment to establish $200,000 project funding in Account No. 022-47260-9000 (Public Facilities Fund) and reduce the funding in Account No. 013-47260-9000 by $200,000 (DOT Highway Relinquishment Fund); or 3) Alternatively, discuss and take other action related to this item.
Bellflower City Council Agenda
November 14, 2022
14 CONSENT CALENDAR – Continued
M Consideration and possible action to find California Professional Engineering to be a non-responsive bidder; and award a contract to Elecnor Belco Electric, Inc., for the Lakewood Boulevard Traffic Signal Improvements - Part 1: Lakewood Bouelvard (4) Intersections and Part 2:
Lakewood Bouelvard and Alondra Boulevard (Specifications No. 20/21-01); and authorize the City Manager to execute a contract with Elecnor Belco Electric, Inc. in a form approved by the City Attorney.
CEQA: Pursuant to the California Environmental Quality Act (CEQA) (Public Resources Code §§ 21000, et seq.) and CEQA Guidelines (California Code of Regulations, Title 14, §§ 15000, et seq.), the City conducted an environmental assessment. Based on the environmental assessment, the project was determined to be categorically exempt pursuant to CEQA Guidelines § 15303 (Class 3 – New Construction or Conversion of Small Structures).
Recommendation to City Council: 1) Find CPE to be non-responsive, award a contract to Belco for the Project; and authorize the City Manager to execute a contract with Belco, in a form approved by the City Attorney; and 2) Authorize a budget amendment for Account No. 135 -47148-9000 to increase the project funding by $150,000 for construction management/i nspection; or 3) Alternatively, discuss and take other action related to this item.
N Consideration and possible action to authorize the release of a solicitation for bids per BMC § 3.28.090 for pest control services at various City facilities. 1) Authorize the release of a solicitation for bids for pest control services at various City facilities; or 2) Alternatively, discuss and take other action related to this item.
15 COUNCIL REPORTS
16 ADJOURNMENT
Adjourn to the next Regular Meeting of the Bellflower City Council at 5:30 p.m. on Monday, November 28, 2022.
11-A
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to conduct a public hearing to consider adopting Resolution No. 22-63 – A Resolution authorizing the City Manager to amend the FY 2022-23 Operating Budget and execute Purchase and Sale Agreement File No. 963, in a form approved by the City Attorney, with the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T for the purchase of real property located at 9818 Artesia Boulevard (APN 7160-008-021). [Continued from October 10, 2022]
DATE: November 14, 2022
EXECUTIVE SUMMARY
This item was continued from the October 10, 2022, City Council Meeting. Executing the Purchase and Sale Agreement File No. 963 (PSA) with the 1991 Jacquelyn S.
Connolly Revocable Living Trust U/D/T (the “Connolly Trust”) would cause the City to purchase real property located at 9818 Artesia Boulevard for $1,200,000. The property includes the Shoe Kingdom building and is adjacent to a City-owned public parking lot.
Acquiring the property would give the City control over its future use in a manner that contributes to the South Bellflower Boulevard area’s economic growth and image as an extension of Downtown Bellflower. For this acquisition and determination of General Plan conformity, the City Council will act as the City’s Planning Agency in accordance with Bellflower Municipal Code § 2.32.050(F).
RECOMMENDATION TO CITY COUNCIL
1) Continue to take documentary and testimonial evidence; and after considering the evidence, adopt Resolution No. 22-63 amending the fiscal year 2022-23 Operating Budget to allocate funds for the property purchase and authorizing the Mayor to execute Purchase and Sale Agreement 963, in a form approved by the City Attorney; or
2) Alternatively, discuss and take other action related to this item.
- Page 1 of 35 -
Staff Report – Purchase and Sale Agreement File No. 963 with the Connolly Trust November 14, 2022
FISCAL IMPACT
The City will pay $1,200,000 to the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T to acquire the Property plus $10,000 to cover estimated escrow fees and title insurance costs.
A budget amendment to the 2022-23 fiscal year operating budget is needed to allocate $1,210,000 in the Public Projects Fund – Account No. 012-47212-9000 for the purchase of the Property.
PUBLIC NOTICE
On September 29, 2022, a Public Hearing Notice was posted at City Hall, Brakensiek Library, Bellflower Substation, Thompson Park, and Simms Park; also on September 29 and October 7, 2022, a Public Hearing Notice was published in the Herald American newspaper. A Notice of Continuance for the public hearing was posted on October 11, 2022.
DISCUSSION
In late 2021, the Public Works Department contacted the Connolly Trust to discuss incorporating portions of its property at 9818 Artesia Boulevard (the “Property”) in the parking lot repaving project for the adjacent City-owned parking lot. The Property consists of a 5,658 square foot building (“Shoe Kingdom”) on a 15,581 square-foot parcel and a recorded purchase option agreement affecting the adjacent City-owned parking lot. Since that time, the Connolly Trust offered to sell the Property to the City including the purchase option that still affects the City’s parking lot.
A review of the location and its economic potential demonstrates that the Property will definitely contribute to the commercial vitality of that site. Additionally, the City obtained an appraisal report which supports the purchase price of $1,200,000.
After acquiring the Property, staff proposes to continue leasing the property to Shoe Kingdom and construct parking lot and driveway improvements to improve drainage and access to the City-owned public parking lot to the rear. All proceeds from the lease will be deposited into the City’s general fund. Additional City Council consideration is desirable to determine the long-term development of the Property.
Attached is a Summary Report required by Government Code § 52201 that describes the following:
a) the cost of the agreement to the City;
b) the estimated value of the interest to be conveyed or leased determined at the highest and best uses permitted under the general plan or zoning;
c) if applicable, the estimated value of the interest to be conveyed or leased determined at the use with the conditions, covenants, and development costs required by the sale or lease;
- Page 2 of 35 -
Staff Report – Purchase and Sale Agreement File No. 963 with the Connolly Trust November 14, 2022
DISCUSSION – Continued
d) the purchase price or present value of the lease payments which the lessee will be required to make during the term of the lease;
e) if the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use, then the City shall provide, as part of the summary, an explanation of the reasons for the difference; and
f) an explanation of why the sale or lease of the property will assist in the creation of economic opportunity (as defined by Government Code § 52200.2), with reference to all supporting facts and material relied upon in making this decision.
ATTACHMENTS
Summary Report ............................................................................................................. 4 Resolution No. 22-63....................................................................................................... 6 Purchase and Sale Agreement File No. 963 ................................................................... 9
- Page 3 of 35 -
Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 9818 Artesia Bl. 1
SUMMARY REPORT PURSUANT TO
GOVERNMENT CODE § 52201
REGARDING A
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN THE
CITY OF BELLFLOWER AND
THE 1991 JACQUELYN S. CONNOLLY REVOCABLE LIVING TRUST U/D/T
The following Summary Report was prepared pursuant to Government Code § 52201.
This report sets forth certain details of the proposed Purchase and Sale Agreement (“Agreement”) between the City of Bellflower (“City”) and the 1991 Jacquelyn S.
Connolly Revocable Living Trust U/D/T (“Connolly Trust”).
CONNOLLY TRUST owns a total of 15,581 square feet of land located at 9818 Artesia Boulevard on one parcel (APNs 7160-008-021) (“Property”). The Agreement causes the Connolly Trust to sell the Property to the City. Additionally, the Agreement provides that the Connolly Trust will extinguish a purchase option affecting a City-owned parking lot directly adjacent to the Property.
The following Summary Report is based upon information required by the Government Code. It is organized into the following three sections:
I. Salient Points of the Agreement: This section summarizes the major responsibilities agreed to by the Connolly Trust and the City by the Agreement.
II. Cost of the Agreement to the City: This section details the total cost to the City associated with implementing the Agreement.
III. Creation of Economic Opportunity: This section describes the existing condition of the subject property and explains how the Agreement will assist in the creation of economic opportunity.
This report and the Agreement are to be made available for public inspection before the approval of the Agreement and not later than the time of publication of the first required notice of the public hearing pursuant to Government Code § 52201.
I. SALIENT POINTS OF THE AGREEMENT
A. Project Description
The Project is the City’s purchase of all that certain real property located at 9818 Artesia Boulevard, Bellflower, CA 90706 on APN 7160-008-021. Additionally, the Project includes the extinguishment of a purchase option held by the Connolly Trust affecting a City-owned parking lot directly adjacent to the Property.
- Page 4 of 35 -
Summary Report Government Code Section 52200 – Purchase and Sale Agreement – 9818 Artesia Bl. 2
B. Seller Responsibilities Under the Agreement
The Agreement causes the Connolly Trust to accept the following responsibilities:
1. The Connolly Trust agrees to sell the Property, following the satisfactory inspection(s) of the Property by the City and approval of documents produced during a Standard Due Diligence Period. It also causes the Connolly Trust to convey, via a quit claim deed, its purchase option regarding a City-owned parking lot adjacent to the Property.
2. The Connolly Trust agrees to pay the costs associated with a CLTA Standard Coverage Policy of Title Insurance showing title to the Property vested in Buyer.
C. City Responsibilities Under the Agreement
1. The City will purchase the Property for $1,200,000 following satisfactory inspection(s) of the Property during escrow and the Due Diligence Period.
II. COST OF THE AGREEMENT TO THE CITY
The cost incurred by the City to implement the Agreement is approximately $1,210,000, title insurance, and a 50/50 share of the closing costs for the purchase of the Property.
III. ECONOMIC OPPORTUNITY
Significant new development is occurring within the vicinity of the Property. This includes the Golden Corral, In N Out Burger, Dunkin’ Donuts, the Exchange, Starbucks in Belle Fleur Centre, and the Boulevard Collection by City Ventures. A recent street widening of Bellflower Boulevard between the 91 Freeway and Artesia Boulevard will complement a planned Bellflower Boulevard streetscape project in 2023 that will improve the section of Bellflower Boulevard from Artesia Boulevard south to the city boundary.
The Property is owned by the Connolly Trust and is currently occupied by a retail tenant on a short-term lease. It is a legacy property with a pre-Prop 13 tax basis. It currently generates minimal sales tax from a shoe store and a minimum of state and local property taxes. The City intends to market the Property to produce a business venture or development project that will create economic opportunity, as defined by Government Code § 52200.2, by increasing property tax revenues to all property tax collecting entities by at least 15% at full implementation of a project when compared to the year before the Property being acquired by the City. Further, the Agreement with Connolly Trust will cause a purchase option to be extinguished affecting City-owned real property directly adjacent to the Property. It is in the public interest for this purchase option to be removed from City’s title.
- Page 5 of 35 -
CITY OF BELLFLOWER
RESOLUTION NO. 22-63
A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE
A PURCHASE AND SALE AGREEMENT BETWEEN THE
CITY OF BELLFLOWER AND THE 1991 JACQUELYN S. CONNOLLY
REVOCABLE LIVING TRUST U/D/T FOR THE PURCHASE OF
REAL PROPERTY LOCATED AT 9818 ARTESIA BOULEVARD
(APN 7160-008-021)
THE CITY COUNCIL DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. In September 2022, the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T offered to sell its property located at 9818 Artesia Boulevard (APN 7160-008-021; the “Property”)) to the City of Bellflower for a purchase price of $1,200,000;
B. Based on a property appraisal commissioned in September 2022, the City verified the offering price for the property as a fair market purchase price;
C. The 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T desires to convey the Property to the City of Bellflower for a purchase price of $1,200,000, which represents a fair market value for the Property per the City’s property appraisal;
D. The City believes that the Property is an important asset that contributes to the economic activity in the Bellflower Boulevard corridor. Accordingly, the City desires to purchase the Property; and
E. Toward that end, the City and the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T desire to enter into a Purchase and Sale Agreement for the Real Property.
SECTION 2. Planning Agency. Pursuant to Bellflower Municipal Code (“BMC”) § 2.32.050(F), the City Council will act as the Bellflower Planning Agency for purposes of this resolution.
SECTION 3. General Plan Findings. Pursuant to Government Code § 65402(c), the City Council (acting as the Planning Agency) finds that acquisition of the Property conforms with the General Plan including, without limitation, meeting the following Goals, Policies, and Programs:
A. General – Goal 2: Create a City that functions efficiently, is aesthetically pleasing, and makes the best use of its various resources. - Page 6 of 35 -
City of Bellflower
Resolution No. 22-63
The Property is being acquired to promote economic growth within its vicinity, to allow the City to control the aesthetic appeal of hat Property, and to eliminate uncertainty regarding a 1967 purchase option affecting a City-owned parking lot that provides additional vehicle parking for the public.
B. Commercial Policy 1, Implementation Program 1.3: Provide lot consolidation incentives for commercial parcels in order to create large, viable, commercial properties.
The Property is adjacent to successful business operations that already contribute toward the economic improvement of the area. Among other things, acquisition of the Property – and its improvement – will allow the City to sell it to interested buyers that will provide additional economic benefits to the City and surrounding businesses. A review of the entire Property (which includes adjacent businesses) demonstrates that it will form an important business hub for that area.
SECTION 4. Environmental Assessment. Adopting this Resolution is exempt from further environmental review pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regulations §§15000, et seq., the “CEQA Guidelines”).
Specifically, the proposed conveyance is exempt from CEQA requirements pursuant to CEQA Guidelines § 15312. The 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T proposes to sell the Property; the Property is not located in an area of concern; the Property does not have significant value for wildlife habitat or other environmental purpose; and the use of the Property and adjacent property has not changed since the time the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T acquired the Property. Accordingly, this action conforms to a Class 12 categorical exemption under CEQA.
SECTION 5. Authorizations. The City Council authorizes the purchase of the Property from the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T to the City upon payment of $1,200,000 by City. In order to effectuate that conveyance, the Mayor and City Manager are authorized to execute all documents, in a form approved by the City Attorney, needed to implement the conveyance of the Property as contemplated by this Resolution including, without limitation, escrow instructions, the grant deed, a quit claim deed needed to extinguish a purchase option for adjacent property owned by the City, closing statement, and the certificate of acceptance. The City Manager is further authorized to accept the grant deed and quit claim deed and cause them to be recorded in the Office of the County Recorder of the County of Los Angeles after they are executed by the 1991 Jacquelyn S. Connolly Revocable Living Trust U/D/T.
SECTION 6. The City Manager, or designee, is directed to amend the FY 2022-2023 Operating Budget to allocate $1,210,000 in the Public Projects Fund Account No. 012-47212-9000 to account for the acquisition of property.
- Page 7 of 35 -
City of Bellflower
Resolution No. 22-63
SECTION 7. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 8. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
SECTION 9. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 14th DAY OF NOVEMBER 2022.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
- Page 8 of 35 -
CITY OF BELLFLOWER
AGREEMENT FILE NO. 963
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this “Agreement”) is made and entered into as of November 14, 2022 (the “Effective Date”), by and between THE 1991 JACQUELYN S. CONNOLLY REVOCABLE LIVING TRUST (“Seller”) and THE CITY OF BELLFLOWER, a general law city and municipal corporation (“Buyer”). Seller and Buyer are sometimes each individually referred to as a “Party” and collectively as the “Parties.”
IN CONSIDERATION of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:
1. Purchase and Sale. Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, subject to the terms and conditions of this Agreement, the following (collectively, the “Property”):
1.1 all of the fee simple interest in, to and under that certain real property located at 9818 Artesia Boulevard, Bellflower, California, Parcel Number 7161-008-021 and more particularly described on Exhibit A attached hereto (the “Land”);
1.2 all of Seller’s right, title and interest in, to and under all privileges and easements appurtenant to the Land, including, without limitation, all of Seller’s right, title and interest, if any, in and to all minerals, oil, gas and other hydrocarbon substances in, on and under the Land, all development rights, air rights, water rights and water stock owned by Seller relating to the Land, and all easements, rights of way or other appurtenances of Seller used in connection with the beneficial use and enjoyment of the Land (collectively, the “Appurtenances,” and together with the Land, the “Real Property”); and
1.3 all of Seller’s right, title and interest in, to and under all intangible property used in the ownership, use, operation, occupancy, maintenance or development of the Real Property, including without limitation all (a) licenses, permits, certificates, entitlements, approvals, authorizations and other entitlements issued (the “Permits”); (b) reports, test results, environmental assessments, surveys, plans, specifications (the “Plans”); and (c) other intangible property related to the Real Property (collectively, the “Intangible Property”); and
1.4 all of Seller’s right, title and interest in, to and under all privileges and interest contained in the instrument recorded as document number BKD3698P6570 and captioned “Option Agreement and Use of Existing Driveway” dated June 14, 1967, and recorded July 11, 1967 (the “Option,” and together with the Land and Real Property, the “Entire Property”). Seller agrees and understands that conveying the Option to Buyer in accordance with this Agreement is a material inducement for Buyer to purchase the Real Property and that the failure to convey the Option will render this Agreement void.
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2. Purchase Price. The total Purchase Price of the Property is $1,200,000 (“Purchase Price”), payable as follows:
2.1 Deposit. Within three calendar days after mutual execution and exchange of this Agreement, Buyer will deposit into Escrow (as defined below) the amount of $36,000 (the “Deposit”), in the form of a wire transfer payable to First American Title Escrow Attn: Gabriel Guerra (“Escrow Holder”). Escrow Holder must deposit the Deposit in a non-commingled trust account and invest the Deposit in an insured, interest bearing money market accounts, certificates of deposit, United States Treasury Bills or such other instruments as directed by Buyer and reasonably acceptable to Seller and interest thereon must be credited to Buyer’s account and deemed to be part of the Deposit. In the event of the consummation of the purchase and sale of the Property as contemplated hereunder, the Deposit will be paid to Seller and credited against the Purchase Price on the Closing Date. In the event the sale of the Property is not consummated because of (a) a Seller default, (b) the termination of this Agreement by Buyer in accordance with any right to so terminate provided herein, or (c) the failure of any of Buyer’s Closing Conditions (as defined below) to occur, then the Deposit must be immediately and automatically paid over to Buyer without the need for any further action by either Party hereto. The sole remedy for a failure by Buyer to make the Deposit as and when required hereunder is for Seller to terminate this Agreement.
2.2 Closing Payment. On or before the Closing Date, Buyer must deposit with the Escrow Holder to be held in Escrow the balance of the Purchase Price (the “Closing Payment ”), as adjusted by (a) the prorations and adjustments provided for in this Agreement and (b) the Deposit, which is to be credited against the Purchase Price.
2.3 Independent Contract Consideration. Notwithstanding anything in this Agreement to the contrary, $100 of the Deposit is delivered to the Escrow Holder for delivery to Seller as “Independent Contract Consideration,” and the Deposit is reduced by the amount of the Independent Contract Consideration so delivered to Seller, which amount has been bargained for and agreed to as consideration for Seller’s execution and delivery of this Agreement.
3. Title to Property.
Title Insurance. At the Closing, Seller must convey to Buyer fee simple title to the Real Property by duly executed and acknowledged Deed (as defined in Section 6.3.1 below). A condition to Buyer’s obligations under this Agreement is the issuance by First American Title Company (the “Title Company”) to Buyer of a 2006 ALTA Extended Coverage Owner’s Policy of Title Insurance (with the general exceptions deleted) insuring fee simple title to the Real Property in Buyer with liability in the amount of the Purchase Price, subject only to such exceptions as Buyer approved pursuant to Section 3.2 below (the “Permitted Exceptions”), and without survey exceptions (the “Title Policy”). The Title Policy must provide full coverage against all labor, mechanics’ and materialmen’s liens, and contain such endorsements as Buyer may reasonably require, including any endorsements required by Buyer (the “Endorsements”). Notwithstanding anything in this Agreement to the contrary, and notwithstanding any approval or consent given or deemed given by Buyer hereunder, Seller covenants to cause to be released and reconveyed from the Property, and to remove as exceptions to title on or before the Closing Date all labor, - Page 10 of 35 -
materialmen’s and mechanics’ liens, mortgages, deeds of trust and other monetary encumbrances, assessments and/or indebtedness, except for real estate taxes not yet due or payable (the “Pre- Disapproved Exceptions”).
3.1 Procedure for Approval of Title. Seller must cause, not later than three business days following the Effective Date (the “Title Delivery Date”), a title insurance commitment for the Property (the “Commitment”), together with legible copies of all items identified as exceptions therein (the “Title Documents”) to be delivered to Buyer. Within three days following the Effective Date, Seller must furnish Buyer with a copy of the most recent survey of the Property in Seller’s possession (the “Prior Survey,” and if no New Survey is obtained, the “Survey”), and on or before the expiration of the Due Diligence Period, Buyer may at its option obtain a current as-built survey (a “New Survey,” and collectively with the Prior Survey, the “Survey”) of any or all of the Land and the Improvements by a registered land surveyor. Buyer must pay all costs and expenses incurred in obtaining a New Survey. Buyer has 15 business days following the receipt of the later of the Title Documents and the New Survey to review and approve, in writing, the condition of the title to the Real Property (“Title Review Period”). If the Title Documents or the Survey reflect or disclose any defect, exception or other matter that is unacceptable to Buyer (each, a “Title Defect,” and collectively, the “Title Defects”), then Buyer must provide Seller with written notice of Buyer’s objections not later than the conclusion of the Title Review Period; provided, however, that if Buyer fails to notify Seller in writing within the Title Review Period either that the condition of title is acceptable or of any specific objections to the state of title, then Buyer is deemed to have objected to all exceptions to title or other conditions or matters which are described in the Title Documents or shown on the Survey. Seller may, at its sole option, elect, by written notice given to Buyer within five days following the conclusion of the Title Review Period (“Seller’s Notice Period”), to cure or remove, or agree to cure and remove by Closing, the Title Defects; provided, however, Seller in all events has the obligation to (i) act in good faith in making such election and curing any Title Defects that Seller elects to cure, (ii) specifically remove the Pre-Disapproved Exceptions, and (iii) remove any Title Defect that attaches to the Property subsequent to the conclusion of the Title Review Period. The failure of Seller to deliver written notice electing to cure any or all such objected to exceptions during Seller’s Notice Period is deemed an election by Seller not to cure such exceptions. In the event Seller elects (or is deemed to have elected) not to cure or remove any objection, or in any event Seller fails to cure or remove any objection which Seller agrees or is required to cure, then Buyer is entitled, as Buyer’s sole and exclusive remedies, either to (i) terminate this Agreement and obtain a refund of the Deposit or (ii) waive any Title Defects that Seller has not elected to cure and close this transaction as otherwise contemplated herein. The failure of Buyer to provide written notice to Seller within 10 days following the expiration of Seller’s Notice Period waiving any Title Defects Seller has not elected to cure is deemed an election by Buyer to waive its objections as to all Title Defects that are (x) not Pre-Disapproved Exceptions and (y) Seller has not agreed to release or cure. If at any time before the Closing Date, Buyer receives a new, updated or supplemental Commitment or Survey and such new, updated or supplemental Commitment or Survey discloses one or more Title Defects that are not Permitted Exceptions (in each case, a “New Title Defect”) and any New Title Defect is unacceptable to Buyer, Buyer may, within three business days after receiving such new, updated or supplemental Commitment or Survey, as the case may be, deliver to Seller another written notice of Buyer’s objections with respect to any New Title Defect only and the process described in this Section shall apply thereto. If any of the time periods set forth in this Section 3.2 extend beyond the expiration of the Due Diligence Period, Buyer is nevertheless afforded any rights (including termination of this Agreement and return of the Deposit) on the terms set forth in this - Page 11 of 35 -
Section.
4. Due Diligence Items.
4.1 Due Diligence Items. Seller must, on or before three business days after the Effective Date (the “Delivery Date”), deliver or otherwise make available to Buyer all of the information regarding the Property as Buyer may reasonably request including, without limitation, items such as Seller’s existing title policies, any preliminary title reports, all surveys, all existing environmental reports, tax bills, current and historical actuarial studies, “as built” and/or engineering drawings for the Real Property, all reports, notices received by any governmental entity, authority, or agency, including without limitation notices alleging violations of any zoning, building, fire, health, safety or environmental code applicable to the Property, contracts, licenses or agreements affecting the Property, existing licenses and permits, insurance policies (and claims history for Seller’s entire ownership period) (collectively, the “Due Diligence Items”).
5. Inspections.
5.1 Procedure. Buyer, at its sole expense, may conduct feasibility, environmental, engineering and physical studies of the Property at any time during the period beginning on the Effective Date and expiring on the date that is 30 days after the Effective Date (the “Initial Due Diligence Period”). Buyer and Buyer’s agents, employees, representatives, contractors, attorneys, and potential financing sources (collectively, “Buyer Representatives”) are permitted to enter upon the Property at all reasonable times during the Due Diligence Period upon at least 24 hours advance notice (which may be given by email) to Seller in order to conduct engineering studies, soil tests or other environmental studies and any other inspections and/or tests that Buyer may deem necessary or advisable in Buyer’s sole discretion including without limitation a Phase I environmental survey of the Property and, in the event the Buyer discovers evidence of possible contamination from hazardous waste or other toxic substances at the Property or a the Phase I environmental survey otherwise recommends, a Phase II environmental survey of the Property (collectively, the “Inspections”).
5.2 Approval.
5.2.1 Buyer has until the conclusion of the Due Diligence Period to approve or disapprove of the Inspections, Due Diligence Items, the scope of the Stormwater Drainage Damage, and the economic feasibility of the Property, it being acknowledged that Buyer is permitted, before the expiration of the Due Diligence Period, to terminate this Agreement for any reason or no reason. Buyer must endeavor, before the expiration of the Due Diligence Period, to notify Seller in writing of its intention to proceed (and waive its termination right relating to due diligence approval) or terminate this Agreement and have the Deposit returned, provided, however, that if Buyer fails to deliver a written notice to Seller and Escrow Holder within the Due Diligence Period approving Buyer’s due diligence in Buyer’s sole and absolute discretion, this Agreement is automatically terminated, Buyer is not entitled to purchase the Property, Seller is not obligated to sell the Property to Buyer, and the Parties are relieved of any further obligation to each other with respect to the Property. Upon termination (or any deemed termination), Escrow Holder must, without any further action required from any Party, return all documents and funds, including the Deposit, to the Party who deposited same and no further - Page 12 of 35 -
duties shall be required of Escrow Holder.
6. Escrow.
6.1 Opening of Escrow. The sale of the Property must be consummated through an escrow (“Escrow”) to be opened with Escrow Holder within two business days after the execution of this Agreement by Seller and Buyer. This Agreement constitutes the joint escrow instructions between the Parties. In the event of any conflict between the terms and conditions of this Agreement and any further escrow instructions, the terms and conditions of this Agreement control.
6.2 Closing Date. The consummation of the purchase and sale of the Property (the “Closing”) occurs 30 days after the execution of this Agreement or (B) such date as agreed to by Seller and Buyer. The date upon which the Closing actually occurs is referred to as the “Closing Date.” For all purposes under this Agreement, subject to Section 6.8 hereof, the Closing is deemed to have occurred at 12:00:01 a.m. local time (i.e., in the time zone where the Property is located) on the Closing Date.
6.3 Seller Deliveries. Not later than one (1) business day before the Closing Date (or such earlier date as is specified in any subsection below), Seller must deliver to Escrow Holder the following:
6.3.1 Deeds. One original Grant Deed in the form attached hereto as Exhibit B (the “Deed”), duly executed and acknowledged by Seller and in proper form for recording, conveying fee title to the Property to Buyer. In addition, one original Quit Claim Deed in the form attached as Exhibit C (the “Quit Claim Deed”), duly executed and acknowledged by Seller and in proper form for recording, conveying all rights, obligations, and title contained in the “Option Agreement and Use of Existing Driveway” dated June 14, 1967 and recorded July 11, 1967 to Buyer;
6.3.2 Assignment Agreement. Two originals of an Assignment and Assumption Agreement in the form attached hereto as Exhibit D (the “Assignment Agreement”), duly executed by Seller;
6.3.3 Transferor’s Certification of Non-Foreign Status. One original certification as to Seller’s non-foreign status which complies with the provisions of Section 1445(b)(2) of the Internal Revenue Code of 1986, as amended, any regulations promulgated thereunder (“Internal Revenue Code”), and any revenue procedures or other officially published announcements of the Internal Revenue Service or the U.S. Department of the Treasury in connection therewith (“FIRPTA”);
6.3.4 Form 593-C. One California Form 593-C, duly executed by Seller
6.3.5 Title Documents. Such other documents and instruments, executed and properly acknowledged by Seller, if applicable, as Title Company may require from Seller in order to issue the Title Policy including, without limitation, the Title Company’s standard owner’s/seller’s affidavit;
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6.3.6 Authority Documents. Such resolutions, authorizations, bylaws, or other corporate and/or partnership documents or agreements relating to Seller and its partners as are reasonably required by Title Company and Buyer;
6.3.7 Closing Statement. A customary Closing Statement prepared by Escrow Holder and approved by Seller showing the payment of the Closing Payment by Buyer and the balance payable to Seller;
6.3.8 Other Documents. Such other documents as may be required by this Agreement or as may reasonably be required to carry out the terms and intent of this Agreement, provided that such documents shall not increase Seller’s liability or result in a material expense to Seller.
6.4 Buyer Deliveries. Not later than one business day before the Closing Date, Buyer must deliver to Escrow Holder the following:
6.4.1 Purchase Price. The Closing Payment;
6.4.2 Assignment Agreement. Two originals of the Assignment Agreement, duly executed by Buyer;
6.4.3 Title Documents. On or before the Closing Date, such other documents as the Title Company may require from Buyer in order to issue the Title Policy;
6.4.4 Closing Statement. A customary Closing Statement prepared by Escrow Holder and approved by Buyer showing the payment of the Closing Payment by Buyer and the balance payable to Seller; and
6.4.5 Other Documents. Such other documents as may be required by this Agreement or as may reasonably be required to carry out the terms and intent of this Agreement, provided that such documents do not increase Buyer’s liability or result in a material expense to Buyer.
6.5 Post-Closing Deliverables. Within one business day after the Closing Date, Seller must deliver to Buyer the following:
6.5.1 Permits. The original Permits;
6.5.2 Records. All records and files relating to the Property, including, without limitation, all insurance policies and property tax bills; and
6.6 Seller’s Costs. Seller must pay the following:
6.6.1 One-half (½) of Escrow Holder’s fee, costs and expenses;
6.6.2 All realty transfer, recordation and documentary fees and taxes imposed on the Deed, the conveyance of the Property or the transaction contemplated by this Agreement;
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6.6.3 The CLTA portion of the premium costs and expenses of the Title Policy for the Property (including all costs related to title searches, examinations and issuance of the Commitment);
6.6.4 All costs incurred in connection with the prepayment, satisfaction or reconveyance of any loan encumbering the Property or any portion thereof, including, without limitation, all prepayment, reconveyance and recording fees, penalties or charges, and any legal fees associated therewith, and any other document(s) required by the Title Company in order to release Title Defects or New Title Defects;
6.6.5 All costs associated with the cure of any Title Defect and/or New Title Defect identified in Section 3.2 above that Seller has agreed to remove (collectively, “Curative Endorsements”);
6.6.6 All other costs customarily borne by sellers of real property in Los Angeles County, California.
The provisions of this Section 6.6 survive the termination of this Agreement.
6.7 Buyer’s Costs. Buyer must pay the following:
6.7.1 One-half (½) of Escrow Holder’s fees, costs and expenses;
6.7.2 Any additional premium necessary to obtain the Title Policy in ALTA extended form and the cost of any Endorsements (other than the Curative Endorsements) as well as the cost of the New Survey; and
6.7.3 All other costs customarily borne by buyers of real property in Los Angeles County, California.
The provisions of this Section 6.7 survive the termination of this Agreement.
6.8 Prorations.
6.8.1 Items to Be Prorated. Subject to the immediately following paragraph, the items set forth in this Section 6.8.1 shall be prorated between Seller and Buyer as of the Closing Date with Buyer being deemed the owner of the Property as of the Closing Date and with Buyer receiving credit for or charged with the entire day of the Closing. Except as hereinafter expressly provided, all prorations must be done on the basis of the actual number of days in the year in which Closing occurs for the actual number of days elapsed to the Closing Date or the actual number of days in the month in which the Closing occurs and the actual number of days elapsed in such month to the Closing Date, as applicable
(a) Taxes and Assessments. Seller must pay, on or before Closing, any and all delinquent real estate taxes and assessments with respect to the Property.
General real estate taxes and assessments that are due or accrue during the year in which the Closing occurs must be prorated as of the Closing Date; provided, however, that Seller must pay on or before Closing the full amount of any bonds or assessments against the Property, including - Page 15 of 35 -
interest payable therewith, and including any bonds or assessments that may be payable after the Closing Date that are a result of or relate to the construction or operation of any public improvements that serve only the Property. If after the Closing there is any retroactive increase in the real property taxes or assessments imposed on the Property: (i) if such increase relates to the tax year in which the Closing occurred, then such increase must be prorated by Seller and Buyer on a per diem basis based on their respective periods of ownership during the period to which such increase applies, (ii) if such increase relates to any tax year subsequent to the tax year which the Closing occurred, then such increase is the obligation of Buyer, and (iii) if such increase relates to any tax year prior to the tax year in which the Closing occurred, then such increase is the obligation of Seller. The prorations must be based upon the most recently issued tax bill for the Property. If the most recent tax bill is not for the current tax year, then the Parties will reprorate within 90 days after the receipt of the tax bill for the current tax year.
6.8.2 Calculation; Reproration. Escrow Holder must prepare and deliver to Buyer not later than three business days before the Closing Date an estimated closing statement which sets forth all costs payable, and the prorations and credits provided for in this Agreement. Any item which cannot be finally prorated because of the unavailability of information will be tentatively prorated on the basis of the best data then available and adjusted when the information is available in accordance with this subsection. The Parties must attempt in good faith to reconcile any differences or disputes regarding such estimated closing statement not later than one business day before the Closing Date. The estimated closing statement as adjusted as aforesaid and approved in writing by the Parties (which may not be withheld if prepared in accordance with this Agreement) is referred to as the “Closing Statement.” If the prorations and credits made under the Closing Statement prove to be incorrect or incomplete for any reason, then either Party is entitled to an adjustment to correct the same; provided, however, that any adjustment shall be made, if at all, within 90 days after the Closing Date, and if a Party fails to request an adjustment to the Closing Statement by a written notice delivered to the other Party within the applicable period set forth above (such notice to specify in reasonable detail the items within the Closing Statement that such Party desires to adjust and the reasons for such adjustment), then the prorations and credits set forth in the Closing Statement are binding and conclusive against such Party.
6.8.3 Items Not Prorated. Seller and Buyer agree that (a) on the Closing Date, the Property will not be subject to any financing arranged by Seller; (b) none of the insurance policies relating to the Property will be assigned to Buyer and Buyer is responsible for arranging for its own insurance as of the Closing Date; and (c) utilities, including telephone, electricity, water and gas, must read on the Closing Date and Buyer is responsible for all the necessary actions needed to arrange for utilities to be transferred to the name of Buyer on the Closing Date, including the posting of any required deposits and Seller may recover and retain from the providers of such utilities any refunds or overpayments to the extent applicable to the period before the Closing Date, and any utility deposits which it or its predecessors may have posted. Accordingly, there will be no prorations for debt service, insurance or utilities. In the event a meter reading is unavailable for any particular utility, such utility is prorated in the manner provided in Section 6.8.2 above.
6.8.4 Indemnification. Buyer and Seller shall each indemnify, protect, defend and hold the other harmless from and against any claim in any way arising from the matters for which the other receives a credit or otherwise assumes responsibility pursuant to this Section 6.8.
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6.8.5 Survival. This Section 6.8 survives the Closing.
6.9 Duties of Escrow Holder. Escrow Holder’s Obligations at Closing. Escrow Holder must undertake the following at or promptly after Closing:
6.9.1 If necessary, Escrow Holder is authorized and instructed to insert the Closing Date as the effective date of any documents conveying interests herein or which are to become operative as of the Closing Date;
6.9.2 Cause the Deed and any other recordable instruments which the Parties so direct to be recorded in the Official Records of the Recorder of the County in which the Property is located. If permitted by applicable law, Escrow Holder is instructed not to affix the amount of the documentary transfer tax on the face of the Deed, but to pay on the basis of a separate affidavit of Seller not made a part of the public record;
6.9.3 Cause each non-recorded document to be delivered to the Party acquiring rights thereunder, or for whose benefit such document was obtained, unless there are sufficient fully executed counterparts so that each Party executing the same can receive its own fully executed counterpart;
6.9.4 Deliver the Title Policy to Buyer as soon as practicable; and
6.9.5 Deliver to Seller the Closing Payment, and such other funds, if any, as may be due to Seller by reason of credits under this Agreement.
6.9.6 Comply with all applicable federal, state and local reporting and withholding requirements relating to the close of the transactions contemplated herein. Without limiting the generality of the foregoing, to the extent the transactions contemplated by this Agreement involve a real estate transaction within the purview of Section 6045 of the Internal Revenue Code, Escrow Holder shall have sole responsibility to comply with the requirements of Section 6045 of the Internal Revenue Code (and any similar requirements imposed by state or local law). For purposes hereof, Seller’s tax identification number is 81-6721133. Escrow Holder must defend, indemnify and hold Buyer, Seller and their counsel free and harmless from and against any and all liability, claims, demands, damages and costs, including reasonable attorneys’ fees and other litigation expenses, arising or resulting from the failure or refusal of Escrow Holder to comply with such reporting requirements. - Page 17 of 35 -
7. Seller Representations, Warranties, and Covenants.
7.1 Representations and Warranties. Seller represents and warrants as of the date hereof and as of the Closing Date as follows:
7.1.1 Organization and Authorization. Seller is the Jacquelyn S.
Connolly Trust, duly created and validly existing under the laws of the State of California and authorized to enter into this transaction in the State of California. Seller has full power and authority to enter into this Agreement, to perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and all documents contemplated hereby by Seller have been duly and validly authorized by all necessary action on the part of Seller and all required consents and approvals have been duly obtained and will not result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, agreement or instrument to which Seller is a Party or otherwise bound. This Agreement is a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to the effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting the rights of creditors generally.
7.1.2 No Conflicting Agreements. The execution and delivery by Seller of, and the performance of and compliance by Seller with, the terms and provisions of this Agreement, do not (a) conflict with, or result in a breach of, the terms, conditions or provisions of, or constitute a default under, Seller’s organizational documents, or any other agreement or instrument to which Seller is a Party or by which all or any part of the Property is bound, (b) violate any restriction, requirement, covenant or condition to which all or any part of the Property is bound, (c) constitute a violation of any applicable code, resolution, law, statute, regulation, ordinance or rule applicable to Seller or the Property, (d) constitute a violation of any judgment, decree or order applicable to Seller or specifically applicable to the Property, or (e) require the consent, waiver or approval of any third Party.
7.1.3 Title. To Seller’s knowledge, there are no outstanding rights of first refusal, rights of first offer, rights of reverter, purchase options or other similar rights or options relating to the Property or any interest therein. Upon conveyance of the Property to Buyer, neither Seller nor anyone claiming by, through or under Seller shall have any right of redemption in the Property, and Seller and all such persons or entities will be estopped from asserting any claim to or right of redemption against the Property.
7.1.4 FIRPTA. Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code.
7.1.5 Litigation. There are no actions or suits, or any proceedings or investigations by any governmental agency or regulatory body pending or threatened against Seller (related to the Property) or the Property. Seller has not received notice of any threatened actions, suits, proceedings or investigations against Seller (related to the Property) or the Property at law or in equity, or before any governmental board, agency or authority which, if determined adversely, would materially and adversely affect the Property or title to the Property (or any part thereof). The are no unsatisfied or outstanding judgments against Seller (related to the Property) or the Property.
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7.1.6 Compliance with Laws and Environmental Conditions. To the best of Seller’s knowledge, there is no violation of any laws, orders, rules or regulations, ordinances or codes of any kind or nature whatsoever (collectively, “Laws”) including, without limitation, (i) laws relating to “Hazardous Materials” (as hereinafter defined) (“Environmental Laws”) (ii) laws relating to the Property or the ownership or operation thereof (including, without limitation, building, fire, health, occupational safety and health, zoning and land use, planning and environmental laws, orders, rules and regulations); (iii) any covenants, conditions, restrictions or agreements affecting or relating to the ownership, use or occupancy of the Property; or (iii) any order, writ, regulation or decree relating to any matter referred to in (i) or (ii) above. To the best of Seller’s knowledge, with respect to the Property: (a) there have been no releases or threatened releases of Hazardous Materials on, from or under the Property, except in compliance with all Environmental Laws; (b) no Hazardous Materials have been or are being used, generated, stored or disposed of at the Property, except in compliance with all Environmental Laws; (c) underground storage tanks on or under the Property, if any, have been and currently are being operated in compliance with all applicable Environmental Laws; (d) any closure, abandonment in place or removal of an underground storage tank on or from the Property was performed in compliance with applicable Environmental Laws, and any such tank had no release contaminating the Property or, if there had been a release, the release was remediated in compliance with applicable Environmental Laws to the satisfaction of regulatory authorities; and (e) no summons, citation or inquiry has been made by any such environmental unit, body or agency or a third party demanding any right of recovery for payment or reimbursement for costs incurred under CERCLA or any other Environmental Laws, and the Property is not subject to the lien of any such agency. “Disposal” and “release” has the meanings set forth in CERCLA. For purposes of this Agreement, “Hazardous Materials” are substances defined as: “toxic substances,” “toxic materials,” “hazardous waste,” “hazardous substances,” “pollutants,” or “contaminants” as those terms are defined in the Resource, Conservation and Recovery Act of 1976, as amended (42 U.S.C. § 6901, et seq.), the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601, et seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. § 1801, et seq.), the Toxic Substances Control Act of 1976, as amended (15 U.S.C. § 2601, et seq.), the Clean Air Act, as amended (42 U.S.C. § 1251, et seq.) and any other federal, state or local law, statute, ordinance, rule, regulation, code, order, approval, policy and authorization relating to health, safety or the environment; asbestos or asbestos-containing materials; lead or lead-containing materials; oils; petroleum-derived compounds; pesticides; or polychlorinated biphenyls. To the best of Seller’s knowledge, no part of the Property has been previously used by Seller, or by any other person or entity, for the storage, manufacture or disposal of Hazardous Materials, except as may be disclosed in the Due Diligence Items.
Except as set forth in the Due Diligence Items, to the knowledge of Seller, there are no underground storage tanks of any nature located on any portion of the Property.
7.1.7 Unpaid Claims. There are no unpaid bills, claims, or liens in connection with any construction or repair of the Property except for those that will be paid in the ordinary course of business prior to the Closing Date, or which have been bonded over or the payment of which has otherwise been adequately provided for to the satisfaction of Buyer. On the Closing Date, there will be no written or oral contract made for any improvements, including capital improvements to the Property, or for offsite improvements related to the Property, which have not been fully completed and paid for or a credit given to Buyer at Closing in the amount sufficient to complete the improvement.
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7.1.8 Leases. Seller represents to Buyer that all such leases are month to month and may be terminated by Buyer upon 30 days notice to tenant.
7.1.9 Condemnation Proceedings. There are no presently pending or contemplated proceedings to condemn or assess the Property or any part of it, or any utilities, sewers, roadways or other public improvements serving the Property.
7.1.10 Service Contracts. There are no contracts or agreements relating to the operation, maintenance, or repair of the Real Property.
7.1.11 Due Diligence Items. To Seller’s knowledge, the Due Diligence Items provided to Buyer constitute all of the material documents, information, data, reports or written materials that are in response to Buyer’s written requests and relate to the Property, in Seller’s possession, control or known to Seller and Seller has not knowingly provided to Buyer any Due Diligence Items which it knows to be false or inaccurate in any material respect. In addition, Seller has provided all material information in Seller’s possession, control, or otherwise known to Seller relating to any Stormwater Drainage Damage.
7.1.12 Patriot Act Compliance. To the extent applicable to Seller, Seller has complied with the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001, which comprises Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) and the regulations promulgated thereunder, and the rules and regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), to the extent such Laws are applicable to Seller. Seller is not included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered under the laws of, (A) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns or (B) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur.
7.1.13 Insurance. Seller currently maintains adequate insurance for the Property.
7.1.14 Bankruptcy; Insolvency. Seller has not filed or been the subject of any filing of a petition seeking or consenting to reorganization or relief as debtor under any applicable federal or state law relating to bankruptcy, insolvency or other relief for debtors, suffered the appointment of a receiver to take possession of all, or substantially all, of its assets, suffered the attachment or other judicial seizure of all, or substantially all, of its assets, made any general assignment for the benefit of its creditors, admitted in writing its inability to pay its debts generally as they come due, nor made an offer of settlement, extension or composition to its creditors generally, nor taken any action in furtherance of any of the foregoing. Seller has not concealed assets from any creditor nor entered into any transaction with the intent to hinder, delay
- Page 20 of 35 -
or defraud creditors of Seller or the creditors of any other person or entity. Seller is not, and as a result of the transactions contemplated by this Agreement will not be rendered, insolvent, undercapitalized, or unable to pay its debts as they become due.
The foregoing representations and warranties of Seller are made by Seller as of the Effective Date and again as of the Closing Date, shall survive the Closing for a period of 12 months and shall not be merged as of the Closing Date hereunder.
7.2 Covenants of Seller. Seller hereby covenants from and after the Effective Date and through the Closing Date as follows:
7.2.1 Seller Insurance. To cause to be in force fire and extended coverage insurance upon the Property, and public liability insurance with respect to damage or injury to persons or property occurring on the Property in at least such amounts, and with the same deductibles, as are maintained by Seller on the Effective Date.
7.2.2 Liens. To not sell, assign, or convey any right, title, or interest whatsoever in or to the Property, or create or permit to attach any lien, security interest, easement, encumbrance, charge, or condition affecting the Property (other than the Permitted Exceptions).
7.2.3 Agreements. To not, without Buyer’s written approval, enter into any service, operating or maintenance agreement affecting the Property that would survive the Closing.
7.2.4 Operations. To operate the Property from and after the Effective Date in substantially the same manner as prior thereto.
8. Buyer Representations and Warranties. Buyer hereby represents and warrants to Seller as of the Effective Date that:
8.1 Organization and Authorization. Buyer is a municipal corporation duly organized and validly existing under the laws of the State of California. Buyer has full power and authority to enter into this Agreement, to perform this Agreement and to consummate the transactions contemplated hereby. This Agreement is a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to the effect of applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting the rights of creditors generally.
8.2 No Conflicting Agreements. The execution, delivery and performance of this Agreement and all documents contemplated hereby by Buyer have been duly and validly authorized by all necessary action on the part of Buyer and all required consents and approvals have been duly obtained and will not result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, agreement or instrument to which Buyer is a Party or otherwise bound.
8.3 Patriot Act Compliance. To the extent applicable to Buyer, Buyer has complied in all material respects with the Patriot Act and the regulations promulgated thereunder, - Page 21 of 35 -
and the rules and regulations administered by OFAC, to the extent such Laws are applicable to Buyer. Buyer is not included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC, or is a resident in, or organized or chartered under the laws of (A) a jurisdiction that has been designated by the U.S. Secretary of the Treasury under Section 311 or 312 of the Patriot Act as warranting special measures due to money laundering concerns, or (B) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur.
9. Conditions Precedent to Closing.
9.1 Conditions Precedent. The obligation of Buyer to purchase the Property pursuant to this Agreement is, at the option of Buyer, subject to the fulfillment, on or before the Closing Date, of all of the conditions set forth in this Section 9.1 (“Buyer’s Closing Conditions”), any or all of which may be waived by Buyer in its sole and absolute discretion:
9.1.1 Representations, Warranties and Covenants. All of the representations and warranties of Seller set forth in this Agreement must be true and correct as of the Effective Date and as of the Closing Date, and Seller has fully complied with all of Seller’s duties and obligations contained in this Agreement.
9.1.2 Title Policy. On the Closing Date, the Title Company is unconditionally obligated and prepared, subject to the payment of the applicable title insurance premium and other related charges, to issue to Buyer the Title Policy in accordance with the requirements of Section 3.2.
10. Eminent Domain. If, before the Closing Date, proceedings are commenced for the taking by exercise of the power of eminent domain of all or a material part of the Property which, as reasonably determined by Buyer, would render the Property unacceptable to Buyer or unsuitable for Buyer’s intended use, Buyer shall have the right, by giving written notice to Seller within 10 days after Seller gives notice of the commencement of such proceedings to Buyer, to terminate this Agreement, in which event this Agreement will automatically terminate, the Deposit must be returned to Buyer without any further action required from either Party, and neither Party shall have any continuing obligations hereunder. If, before the Closing Date, proceedings are commenced for the taking by exercise of the power of eminent domain of less than a material part of the Property, or if Buyer has the right to terminate this Agreement pursuant to the preceding sentence but Buyer does not exercise such right, then this Agreement remains in full force and effect and, on the Closing Date, the condemnation award (or, if not theretofore received, the right to receive such portion of the award) payable on account of the taking will be assigned, or paid to, Buyer. Seller must give written notice to Buyer within three business days after Seller’s receiving notice of the commencement of any proceedings for the taking by exercise of the power of eminent domain of all or any part of the Property. The provisions of this Section 10 survive the Closing.
11. Notices. All notices, demands, or other communications of any type given by any Party hereunder, whether required by this Agreement or in any way related to the transaction - Page 22 of 35 -
contracted for herein, are void and of no effect unless given in accordance with the provisions of this Section 11. All notices must be in writing and delivered to the person to whom the notice is directed, either (a) in person, (b) by United States Mail, as a registered or certified item, return receipt requested, or (c) by a nationally recognized overnight delivery service. Notices transmitted to the then designated email address of the Party intended to be given notice are deemed received when sent, notices sent by a nationally recognized overnight delivery service are deemed received on the next business day and notices delivered by certified or registered mail are deemed delivered three days following posting. Notices must be given to the following addresses:
Buyer: The City of Bellflower
Jeff Stewart, City Manager
16600 Civic Center Drive
Bellflower, CA 90241
E-mail: [email protected]
With a copy to: Karl H. Berger, City Attorney
2600 W. Olive Avenue, Suite 500
Burbank, California 91505
E-mail: [email protected]
Seller: Sean Connolly, Trustee
Jacqueline S. Connolly Living Trust
P.O. Box 735
Gleneden Beach, OR 97388
Telephone: (424) 299-1380
E-mail: [email protected]
With a copy to: Molly K. Zurflueh, Esq.
Law Office of Molly K. Zurflueh
1278 Glenneyre Street #262
Laguna Beach, CA 92651
Telephone: (949) 218-1325
E-mail: [email protected]
If to Escrow Holder:
First American Title Escrow
Attention: Gabriel Guerra
30110 Crown Valley Pkwy #203
Laguna Niguel CA 92677
Telephone: 760-277-2138
Email: [email protected]
12. Remedies.
12.1 Seller Default. In the event the sale of the Property is not consummated because of default under or breach of this Agreement on the part of Seller, Buyer has the option
FOLLOWING NOTICE TO SELLER AND FIVE DAYS THEREAFTER DURING - Page 23 of 35 -
WHICH PERIOD SELLER MAY CURE THE DEFAULT, as its sole and exclusive remedy at law or in equity, to either (i) terminate this Agreement by delivery of written notice of termination to Seller, whereupon Buyer and Seller are each released from all liability hereunder (except for those provisions which recite that they survive termination), the Deposit must be returned to Buyer and Seller must reimburse Buyer for all of Buyer’s reasonable third-party costs and expenses (including all consultant, expert and legal fees and expenses) incurred by Buyer in connection with this Agreement, or (ii) continue this Agreement and seek the equitable remedy of specific performance and deliver the documents required to convey the Property to Buyer in accordance with this Agreement pursuant to California Civil Code Section 1680 and Sections 3384 through 3395. The provisions of this Section 12.1 to the contrary notwithstanding, if the remedy of specific performance is not available or is impracticable to Buyer as a result of a willful breach of this Agreement by Seller, then Buyer may avail itself of any and all rights and remedies available at law or in equity. Additionally, in the event that Buyer elects to pursue the equitable remedy of specific performance and in any such action for specific performance, the court rules that such remedy is unavailable, then the rights and remedies available under this Section 12.1 and the running of any and all statutes of limitation, statutes of repose, passage of time relating to laches and other statutes, rules, doctrines or principles which impose any time limits for commencing any suit, action, arbitration, mediation or other proceeding on account of such breach or default by Seller are suspended and tolled while Buyer is pursuing any such action for specific performance.
12.2 Buyer Default. IN THE EVENT THE SALE OF THE PROPERTY IS
NOT CONSUMMATED SOLELY BECAUSE OF A DEFAULT UNDER THIS
AGREEMENT ON THE PART OF BUYER FOLLOWING NOTICE TO BUYER AND
FIVE DAYS THEREAFTER DURING WHICH PERIOD BUYER MAY CURE THE
DEFAULT, SELLER MAY DECLARE THIS AGREEMENT TERMINATED, IN WHICH CASE, AS SELLER’S SOLE AND EXCLUSIVE REMEDY, THE DEPOSIT MUST BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES HAVE AGREED THAT SELLER’S ACTUAL DAMAGES, IN THE EVENT THE SALE
OF THE PROPERTY IS NOT CONSUMMATED SOLELY BECAUSE OF A DEFAULT
BY BUYER, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR INITIALS BELOW, THE PARTIES
ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES AND AS SELLER’S SOLE AND EXCLUSIVE REMEDY AGAINST BUYER,
AT LAW OR IN EQUITY, IN THE EVENT THE SALE OF THE PROPERTY IS NOT
CONSUMMATED SOLELY BECAUSE OF A DEFAULT UNDER THIS AGREEMENT
ON THE PARTY OF BUYER AND EACH PARTY IS THEREUPON RELIEVED OF ALL
FURTHER OBLIGATIONS AND LIABILITIES, EXCEPT ANY WHICH SURVIVE TERMINATION. SUCH RETENTION OF THE DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND MAY NOT BE DEEMED TO
CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR PROVISION. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389 AND ANY RIGHT TO AN ACTION FOR SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS AGREEMENT.
INITIALS: SELLER BUYER
- Page 24 of 35 -
13. Assignment. Seller may not assign any of its right, title, claim or interest in, to or under this Agreement. Buyer may, without Seller’s consent, assign any or all of its rights and obligations under this Agreement (or directly deed the Land and assign all of the Property) to any one or more persons or entities upon notice to Seller; provided, however, that (i) notwithstanding any such assignment, Buyer must be an affiliate of, or continue to act as the liaison on behalf of, such assignee(s), and (ii) absent the express agreement of Seller, no such assignment releases Buyer from its liabilities hereunder until Closing, at which time Buyer (but not such assignee(s)) is released from its liabilities hereunder. For the avoidance of doubt, any provisions herein which state that all or any portion of the Property may be assigned or transferred “to Buyer” are deemed to mean “to Buyer or its assignee.”
14. Interpretation and Applicable Law. This Agreement must be construed and interpreted in accordance with the laws of the State of California. Where required for proper interpretation, words in the singular shall include the plural; the masculine gender includes the neuter and the feminine, and vice versa. The terms “successors and assigns” include the heirs, administrators, executors, successors, and assigns, as applicable, of any Party hereto.
15. Amendment. This Agreement may not be modified or amended, except by an agreement in writing signed by the Parties. The Parties may waive any of the conditions contained herein or any of the obligations of the other Party hereunder, but any such waiver is effective only if in writing and signed by the Party waiving such conditions and obligations.
16. Entire Agreement; Survival. This Agreement, including all Exhibits and Schedules attached hereto, constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings of the Parties in connection therewith. No representation, warranty, covenant, agreement, or condition not expressed in this Agreement is binding upon the Parties hereto nor will affect or be effective to interpret, change, or restrict the provisions of this Agreement. The obligations of the Parties hereunder and all other provisions of this Agreement survive the Closing or earlier termination of this Agreement, except as expressly limited herein.
17. Counterparts. This Agreement may be executed in any number of counterparts, all of which when taken together constitutes the entire agreement of the Parties.
18. Time Is of the Essence; Calculation of Time Periods. Time is of the essence in this Agreement as to each provision in which time is an element of performance. Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, except that if such last day falls upon a Saturday, Sunday, or legal holiday under the Federal law or laws of the State(s) where the Property is located, then such period runs until the end of the next day that is neither a Saturday, Sunday, or legal holiday under Federal law or the laws of the State(s) where the Property is located. The last day of any period of time described herein shall be deemed to end at 11:59 p.m. Los Angeles, California time.
19. Real Estate Commission. Seller and Buyer each represent and warrant to the other that neither Seller nor Buyer has contacted or entered into any agreement with any real estate broker, agent, finder or any other Party in connection with this transaction, and that neither Party has taken any action which would result in any real estate broker’s, finder’s or other fees or - Page 25 of 35 -
commissions being due and payable to any Party with respect to the transaction contemplated hereby. Each Party hereby indemnifies and agrees to hold the other Party harmless from any loss, liability, damage, cost, or expense (including reasonable attorneys’ fees) resulting to the other Party by reason of a breach of the representation and warranty made by such Party in this Section.
20. Severability. If any provision of this Agreement, or the application thereof to any person, place, or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of this Agreement and such provisions as applied to other persons, places and circumstances shall remain in full force and effect.
21. Further Assurances. Each Party will, whenever and as often as it is requested to do so by the other Party, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered any and all such further conveyances, assignments, approvals, consents and any and all other documents and do any and all other acts as may be necessary to carry out the intent and purpose of this Agreement. The provisions of this Section 21 survive the Closing.
22. Exclusivity. Until the Closing Date or the date that this Agreement is terminated, Seller may not enter into any contract, or enter into or continue any negotiations, to sell the Property to any person or entity other than Buyer, nor will Seller solicit proposals from, or furnish any non-public information to, any person or entity other than Seller’s agents, attorneys and lenders and Buyer regarding the possible sale of the Property.
23. No Option; Binding Effect. The submission of this Agreement for examination and review does not constitute an option to purchase the Property, an offer to sell the Property or an agreement to purchase and sell. This Agreement has no binding effect and will only be effective upon Seller’s and Buyer’s execution and mutual receipt of the others executed version of this Agreement. Escrow Agent’s execution of this Agreement is not a prerequisite to the effectiveness of this Agreement.
24. Natural Hazard Disclosure Statement. Seller must cause the property disclosure report (the “Disclosure Report”) to be delivered to Buyer within five Business Days after the Effective Date. The Disclosure Report fully and completely discharges Seller from its disclosure obligations, if any, which may be required under the Natural Hazard Disclosure Act, California Government Code Sections 8589.3, 8589.4, and 51183.5, California Public Resources Code Sections 2621.9, 2694, and 4136, and 1103.2, and any successor law, and, for the purposes of this Agreement, the provisions of Civil Code Section 1103.4 regarding the non-liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply and the preparer of the Disclosure Report is deemed to be an expert, dealing with matters within the scope of its expertise with respect to the examination and Disclosure Report. Nothing set forth in the Disclosure Report (A) requires Seller to remediate any matter referred to in the Disclosure Report or (B) creates any liability by Seller to Buyer therefor and Seller may not in any event be required to expend funds to remediate any matters disclosed in the Disclosure Report. Following the Closing, Buyer is solely responsible for preparing and delivering its own disclosure report to any subsequent prospective buyers of the Property.
- Page 26 of 35 -
SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT AND JOINT
ESCROW INSTRUCTIONS
SELLER:
By:
Name: Sean Connolly, Trustee of the
Jacquelyn S. Connolly Living Trust
THE CITY OF BELLFLOWER
By:
Name: Raymond Dunton
Its: Mayor
ATTEST:
__________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
__________________________
Karl H. Berger, City Attorney
ESCROW HOLDER:
The undersigned Escrow Holder accepts the foregoing Purchase and Sale Agreement and Joint Escrow Instructions and agrees to act as Escrow Agent under this Agreement in strict accordance with its terms.
By:
Name:
Its:
- Page 27 of 35 -
EXHIBIT A
LEGAL DESCRIPTION
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE CITY OF BELLFLOWER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: THE SOUTHERLY 139.07 FEET OF THE NORTHERLY 159.07 FEET OF LOT 461 OF SOMERSET
ACRES, IN THE CITY OF BELLFLOWER, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 14, PAGE 105 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THE WESTERLY 20 FEET.
Address: 9818 Artesia Boulevard
Assessor’s Parcel Number: 7161-008-021
RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:
- Page 28 of 35 -
EXHIBIT B DEED
- Page 29 of 35 -
EXHIBIT C
- Page 30 of 35 -
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the “Assignment”) is entered into as of , 202_ (the “Effective Date”), by and between , (“Assignor”), and (“Assignee”).
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Assignment. As of the Effective Date, Assignor hereby grants, conveys, transfers and assigns to Assignee all of Assignor’s rights, title and interest in, to and under any and all of the following to the extent they are related to that certain real property commonly known as Xxx and more particularly described in Exhibit A attached hereto (the “Real Property”): to the extent assignable, all intangible personal property now or hereafter owned by Assignor and used in the ownership, use, operation, occupancy, maintenance or development of the Real Property, including, without limitation (i) all licenses, permits, certificates, approvals, authorizations and other entitlements issued; (ii) all reports, test results, environmental assessments, surveys, plans, specifications; and (iii) all other intangible property related to the Real Property (collectively, the “Intangible Property”).
2. Assumption. As of the Effective Date, Assignee hereby accepts the foregoing assignment and assumes all of Assignor’s obligations under the Real Property and Intangible Property (collectively, the “Assigned Interest”) with respect to the period from and after the Effective Date.
3. Assignor’s Indemnity. Assignor hereby agrees to indemnify, protect, defend and hold Assignee harmless from and against any and all claims, demands, liabilities, losses, costs, damages or expenses (including, without limitation, reasonable attorneys’ fees and costs) arising out of or resulting from any breach or default by Assignor under the terms of the Assigned Interests arising prior to the Effective Date.
4. Assignee’s Indemnity. Assignee hereby agrees to indemnify, protect, defend and hold Assignor harmless from and against and any all claims, demands, liabilities, losses, costs, damages or expenses (including, without limitation, reasonable attorneys’ fees and costs) arising out of or resulting from any breach or default by Assignee under the terms of the Assigned Interests arising on or after the Effective Date.
5. Further Assurances. Assignor hereby covenants that it will, at any time and from time to time upon written request therefore and without the assumption of any additional liability thereby, execute and deliver to Assignee, its successors and assigns, any new or confirmatory instruments and take such further acts as Assignee may reasonably request to fully evidence the assignment contained herein and to enable Assignee, its successors and assigns to fully realize and enjoy the rights and interests assigned hereby.
6. Successors and Assigns. The provisions of this Assignment shall be binding upon, and shall inure to the benefit of, the successors and assigns of Assignor and Assignee, respectively.
- Page 31 of 35 -
7. Counterparts. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have caused their duly authorized representatives to execute this Assignment as of the date first above written.
SELLER:
By:
Name:
Its:
BUYER:
By:
Name: Raymond Dunton
Its: Mayor
ATTEST:
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
Karl H. Berger, City Attorney
- Page 32 of 35 -
EXHIBIT C
- Page 33 of 35 -
- Page 35 of 35 -
11-B
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to conduct a public hearing to adopt Resolution No. 22-62 – A Resolution authorizing the City Manager to execute Agreement File No. 959, in a form approved by the City Attorney, with Darts Corner LLC. to lend funds for Working/Start Up Capital and Equipment Acquisition at 17242-44 Downey Avenue, per the Economic Development
Business Assistance Plan, Chapter 5. [Continued from October 10, 2022)
DATE: November 14, 2022
EXECUTIVE SUMMARY
On October 10, 2022, the City Council held a public hearing to consider an application by Darts Corner LLC (Darts Corner) for a Small Business Microloan under Chapter 5 of the Bellflower Business Assistance Plan. At the conclusion of the public hearing, the City Council closed and continued the hearing to November 14, 2022. The City Council referred the application back to Darts Corner to correct and refine the financial documents associated with the application. Darts Corner has since updated its revenue projections and financials, which are attached for the City Council’s review.
RECOMMENDATION TO CITY COUNCIL
1) Re-open the public hearing; take documentary and testimonial evidence; and consider whether to adopt Resolution No. 22-62; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The total Small Business Microloan amount payable under Agreement File No. 959 for building façade design and improvements is $30,000. Sufficient funds for the Agreement are budgeted in Economic Development Account No. 510-44410-4002.
PUBLIC NOTICE
On September 29, 2022, a Public Hearing Notice was posted at City Hall, Bellflower Substation, Thompson Park, and Simms Park; and on September 29, 2022 and October 6, a Public Hearing Notice was published in the Herald American newspaper. A Notice of Continuance for the public hearing was posted on October 11, 2022. - Page 1 of 26 -
Staff Report – Resolution No. 22-62, Darts Corner LLC
November 14, 2022
DISCUSSION
On October 10, 2022, the City Council held a public hearing to consider an application by Darts Corner for a Small Business Microloan under Chapter 5 of the Bellflower Business Assistance Plan. At the conclusion of the public hearing the City Council closed and continued the hearing to November 14, 2022. The City Council referred the application back to Darts Corner LLC to correct and refine the financial documents.
Tonia McMillian, owner of Darts Corner, worked with Economic Development Department staff to update the financial documents for Darts Corner by providing her actual revenue for July 2022 to October 2022, reviewing and updating her Monthly Cash Flow Projections starting in November 2022 (specifically adding estimates for Costs of Goods Sold), properly entering Beginning Cash, including the use of personal funds (added as Cash Infusion under the Revenues section) and adjusting Food & Beverage revenue to start at a lower amount with a more conservative monthly increase of 1%.
For Expenses, the line item for supplies was reduced based on actual costs, and maintenance costs were reduced by not contracting for cleaning services. Funds were also added in the Ads/Promotion line item twice per year for paid social media boosts.
Darts Corner has provided staff the updated Marketing Plan portion of the Darts Corner Business Plan (attached).
Staff confirmed that Darts Corner has a 5-year lease, which commenced on November 1, 2021 with a 5-year option to extend. The lease also has an annual consumer price index (CPI) increase of 3% per year, which is included in the “Rent” line item.
Darts Corner submitted an application under Chapter 5 for a $30,000 Small Business Microloan for her business located at 17242-44 Downey Avenue. The Microloan will provide working and start-up capital due to the loss of an investment partner. The business is located within the shopping center at the northeast corner of Downey Avenue and Artesia Boulevard and opened for business in June 2022 taking the space formerly occupied by Enrique’s Mexican Restaurant. Under the Plan, the Applicant is providing a personal guaranty, collateral totaling approximately $30,000 in fixtures, furnishings and equipment, and has certified to creating 4 full-time equivalent (FTE) jobs (program requires 1 FTE). The loan payments will begin 60-days following the full disbursement of the loan. Based on the prime rate at the time of application, loan payments will be $358.32 at 7.5%.
ATTACHMENTS
Updated Revenue Projections and Actual Revenue ....................................................... 3 Updated Marketing Plan .................................................................................................. 7 Resolution No. 22-62....................................................................................................... 9 Loan Agreement File No. 959 ....................................................................................... 12 Promissory Note ............................................................................................................ 26
- Page 2 of 26 -
Month NOV DEC JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT TOTAL Beginning Cash $0.00 $154.00 $79.25 $162.94 $88.99 $182.96 $32.16 $163.91 $280.58 $59.56 $53.30 $14.25 $1,271.91
REVENUES
Food & Beverage $9,750.00 $9,896.25 $10,044.69 $10,195.36 $10,348.29 $10,503.52 $10,661.07 $10,820.99 $10,983.30 $11,148.05 $11,315.27 $11,485.00 $127,151.81 Dart Board/Juke Box $850.00 $800.00 $850.00 $900.00 $900.00 $900.00 $900.00 $950.00 $950.00 $1,000.00 $700.00 $800.00 $10,500.00 Advertising $75.00 $50.00 $60.00 $60.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $845.00 Cash Infusion $4,500.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $3,800.00 $3,800.00 $3,500.00 $3,000.00 $3,000.00 $3,000.00 $2,800.00 $43,400.00 CASH AVAILABLE $15,175.00 $14,900.25 $15,033.94 $15,318.31 $15,412.28 $15,461.48 $15,468.23 $15,509.90 $15,288.88 $15,282.62 $15,143.57 $15,174.25 $183,168.72
EXPENSES
Cost of Goods Sold $800.00 $750.00 $800.00 $825.00 $800.00 $800.00 $825.00 $800.00 $800.00 $800.00 $800.00 $800.00 $9,600.00 Equipment $0.00
Wages $0.00
Salaries $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $6,000.00 $72,000.00 Payroll Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Fringe Benefits $0.00
Rent $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $67,200.00 Telephone/Internet $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $1,596.00 Utilities $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $5,400.00 Supplies $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $4,200.00 Repair/Maint.$300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $3,600.00 Travel/Delivery $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ads/Promotion $150.00 $75.00 $225.00
Licenses $200.00 $200.00
Insurance $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $14,856.00 Bad Debts $0.00
Loan Pymts $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $3,224.88 $0.00
TOTAL DISBURSEMENT $15,021.00 $14,821.00 $14,871.00 $15,254.32 $15,229.32 $15,429.32 $15,329.32 $15,229.32 $15,229.32 $15,229.32 $15,229.32 $15,229.32 $182,101.88 BALANCE $154.00 $79.25 $162.94 $88.99 $182.96 $32.16 $163.91 $280.58 $59.56 $53.30 $14.25 $44.93 $1,316.84 DEBT COVERAGE RATIO 1.01 1.01 1.01 1.01 1.01 1.00 1.01 1.02 1.00 1.00 1.00 1.00 Monthly Cash Flow Projections
NOVEMBER 2022 THROUGH OCTOBER 2023
- Page 3 of 26 -
Month NOV DEC JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT TOTAL Beginning Cash $0.00 $8.46 $57.99 $99.68 $114.70 $334.24 $164.48 $91.63 $166.93 $41.58 $161.85 $163.98 $1,450.46
REVENUES
Food & Beverage $11,599.85 $11,715.85 $11,833.01 $11,951.34 $12,070.85 $12,191.56 $12,313.48 $12,436.61 $12,560.98 $12,686.59 $12,813.45 $12,941.59 $147,115.16 Dart Board/Juke Box $945.00 $945.00 $945.00 $945.00 $945.00 $945.00 $945.00 $945.00 $960.00 $1,000.00 $925.00 $945.00 $11,390.00 Advertising $75.00 $55.00 $55.00 $60.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $845.00 Cash Infusion $3,800.00 $3,600.00 $3,500.00 $3,500.00 $3,500.00 $3,200.00 $3,100.00 $3,000.00 $2,700.00 $2,900.00 $2,600.00 $2,400.00 $37,800.00 CASH AVAILABLE $16,464.78 $16,324.31 $16,391.00 $16,556.02 $16,705.56 $16,745.80 $16,597.95 $16,548.25 $16,447.90 $16,648.17 $16,595.30 $16,525.57 $198,550.62
EXPENSES
Cost of Goods Sold $840.00 $790.00 $790.00 $840.00 $855.00 $866.00 $866.00 $866.00 $890.00 $915.00 $890.00 $890.00 $10,298.00 Equipment $0.00
Wages $0.00
Salaries $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $84,000.00 Payroll Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Fringe Benefits $0.00
Rent $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $5,768.00 $69,216.00 Telephone/Internet $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $133.00 $1,596.00 Utilities $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $450.00 $5,400.00 Supplies $365.00 $350.00 $350.00 $450.00 $365.00 $365.00 $365.00 $365.00 $365.00 $370.00 $365.00 $365.00 $4,440.00 Repair/Maint.$300.00 $275.00 $300.00 $300.00 $300.00 $300.00 $325.00 $300.00 $300.00 $350.00 $325.00 $300.00 $3,675.00 Travel/Delivery $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ads/Promotion $100.00 $100.00 $200.00
Licenses $200.00 $200.00
Insurance $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $14,856.00 Bad Debts $0.00
Loan Pymts $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $4,299.84 $0.00
TOTAL DISBURSEMENT $16,552.32 $16,362.32 $16,387.32 $16,537.32 $16,467.32 $16,678.32 $16,603.32 $16,478.32 $16,502.32 $16,582.32 $16,527.32 $16,502.32 $198,180.84 BALANCE $8.46 $57.99 $99.68 $114.70 $334.24 $164.48 $91.63 $166.93 $41.58 $161.85 $163.98 $119.25 $1,524.78 DEBT COVERAGE RATIO 1.00 1.00 1.01 1.01 1.02 1.01 1.01 1.01 1.00 1.01 1.01 1.01 Monthly Cash Flow Projections
NOVEMBER 2023 THROUGH OCTOBER 2024
- Page 4 of 26 -
Month NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT TOTAL Beginning Cash $0.00 $39.95 $6.35 $19.77 $16.53 $32.96 $75.40 $5.23 $23.80 $82.52 $62.77 $8.98 $493.50
REVENUES
Food & Beverage $13,071.00 $13,201.71 $13,333.73 $13,467.07 $13,601.74 $13,737.76 $13,875.13 $14,013.89 $14,154.02 $14,295.56 $14,438.52 $14,582.91 $165,773.04 Dart Board/Juke Box $992.25 $925.00 $950.00 $992.25 $992.25 $992.25 $992.25 $992.25 $992.25 $992.25 $1,150.00 $925.00 $11,888.00 Advertising $85.00 $60.00 $70.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $80.00 $75.00 $75.00 $895.00 Cash Infusion $2,500.00 $1,700.00 $2,200.00 $2,100.00 $2,000.00 $2,100.00 $1,750.00 $1,600.00 $1,500.00 $1,300.00 $1,100.00 $1,100.00 $20,950.00 CASH AVAILABLE $16,767.51 $15,993.91 $16,602.33 $16,654.09 $16,685.52 $16,937.96 $16,767.79 $16,686.36 $16,745.08 $16,750.33 $16,668.54 $16,759.14 $200,018.55
EXPENSES
Cost of Goods Sold $910.00 $750.00 $800.00 $840.00 $865.00 $875.00 $900.00 $915.00 $900.00 $950.00 $925.00 $900.00 $10,530.00 Equipment $0.00
Wages $0.00
Salaries $7,000.00 $6,500.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $7,000.00 $83,500.00 Payroll Expense $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Fringe Benefits $0.00
Rent $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $5,883.36 $70,600.32 Telephone/Internet $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $140.00 $1,680.00 Utilities $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $550.00 $6,600.00 Supplies $365.00 $375.00 $370.00 $375.00 $375.00 $375.00 $375.00 $375.00 $375.00 $375.00 $375.00 $375.00 $4,485.00 Repair/Maint.$350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $350.00 $4,200.00 Travel/Delivery $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Ads/Promotion $100.00 $100.00 $200.00
Licenses $200.00 $200.00
Insurance $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $1,238.00 $14,856.00 Bad Debts $0.00
Loan Pymts $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $358.32 $4,299.84 $0.00
TOTAL DISBURSEMENT $16,894.68 $16,144.68 $16,689.68 $16,734.68 $16,759.68 $16,969.68 $16,894.68 $16,809.68 $16,794.68 $16,844.68 $16,819.68 $16,794.68 $201,151.16 BALANCE $39.95 $6.35 $19.77 $16.53 $32.96 $75.40 $5.23 $23.80 $82.52 $62.77 $8.98 $96.58 $470.83 DEBT COVERAGE RATIO 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.01 Monthly Cash Flow Projections
NOVEMBER 2024 THROUGH OCTOBER 2025
- Page 5 of 26 -
Month JULY AUG SEP*OCT TOTAL
REVENUES
Food & Beverage Revised Projections $7,250.00 $8,500.00 $9,000.00 $9,500.00 $34,250.00 Food & Beverage Actual $4,383.00 $9,882.00 $5,063.00 $4,381.00 $23,709.00 Dart Board/Juke Box Projected $900.00 $900.00 $900.00 $900.00 $3,600.00 Dart Board/Juke Box Actual $1,154.00 $1,625.00 $988.00 $1,260.00 $5,027.00 Advertising (future)$0.00 $0.00 $0.00 $0.00 $0.00
TOTAL REVISED PROJECTED REVENUE $8,150.00 $9,400.00 $9,900.00 $10,400.00 $37,850.00 TOTAL ACTUAL REVENUE $5,537.00 $11,507.00 $6,051.00 $5,641.00 $28,736.00 Revenue Actuals
JULY 2022 THROUGH OCTOBER 2022
- Page 6 of 26 -
14 Marketing Plan
Darts Corner is a meeting place for people to unwind, throw some darts and have a great time.
That’s all good, but nobody will visit Darts Corner if they don’t know about it. Marketing the dart lounge does not have to be expensive or difficult and there are great low-cost ways of spreading the word. With the variety of dart boards available at Darts Corner, staff will reach out to the local chapters of the various darts associations/organizations with invitations to come to Darts Corner.
Website
An engaging, accurate, and easy to read website is key to promoting Darts Corner. A calendar will be available to provide people with a schedule of events, leagues, open play nights, and reserved party nights. The website will also list contact and location information, food and beverage menu, playing rates, league rates and playing times. The websites for Darts Corner are www.alldartscorner.org and on Google www.alldartscorner.net .
Social Media Marketing
A fresh social marketing campaign may almost be more important than a website in this day and age. Darts Corner will focus on Facebook at Darts Corner LLC, Instagram at @dartscornerbellflower, and Twitter at @Cornerdarts to promote events, tournaments, special guests/visits and to interact with customers. Google Boosts have brought daily new players; however, the goal is to usher in 5+ new visits per weekday and 10+ on weekends. Darts Corner is on Tik Tok and can also be found on Google and Yelp.
Have a ribbon cutting event/grand opening event that can be shared and posted on various social media platforms by the participants
Join local Facebook groups such as Positively Bellflower In Darts Corner posts, Hash Tag as many darts related things as possible As a Chamber of Commerce member, request an email blast to Chamber members
Promotional Incentives
Darts is a game that is fun and easy to learn, but takes time and practice to master. These are ways to get new people visiting Darts Corner. The strategy here is to get visitors hooked on darts.
Offer first-time players and visitors to Darts Corner a free opportunity to play some games with some instruction on how to shoot darts and use the electronic dart boards. Chamber of Commerce member discounts.
Happy Hour specials
College student discounts
- Page 7 of 26 -
15 Co-Promotion
Darts Corner will look at ways to co-promote with local businesses such as SteelCraft, Ironfire Workspaces, Fantasy Cakes, The Stand Up Comedy Club, Bo’s Cigar Lounge, the Guild House, etc.
Facility Rentals
There will also be opportunities for people to rent or reserve the facility or parts of the facility for team building events, birthday parties, tastings, etc. In addition to a reservation cost, group rentals will be required to purchase food and beverage from Darts Corner with the exception of certain food items such as cakes, cookies, candy, etc.
Fund Raising Events
Make Darts Corner available for various fund-raising events for local charities and area service clubs.
Good Old Fashioned Flyers
Put flyers up at local Starbucks Coffee Houses, the Guild House in Downtown Bellflower (a table game store), the Dart Store in Buena Park, etc. Additionally, Darts Corner can be promoted at the various colleges in the region by posting flyers at the student centers/student unions.
- Page 8 of 26 -
CITY OF BELLFLOWER
RESOLUTION NO. 22-62
A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE
AGREEMENT FILE NO. 959, IN A FORM APPROVED BY THE CITY
ATTORNEY, WITH DARTS CORNER, LLC TO LEND FUNDS FOR
WORKING/STARTING-UP CAPITAL AT DARTS CORNER (17242-44
DOWNEY AVENUE), PER THE ECONOMIC DEVELOPMENT BUSINESS
ASSISTANCE PLAN, CHAPTER 5
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. On May 24, 2021, City Council approved the City’s Operating Budget for Fiscal Years 2021-22 and 2022-23, in which $220,000 was approved in each fiscal year for special economic development programs related to marketing, business retention, tenant improvements, web/social media business support, façade/sign improvements, restaurant attraction, and other financial assistance to business operators and developers;
B. On July 11, 2022, the City Council adopted Resolution No. 22-34 to approve policies and procedures for distributing Economic Development funds to attract or retain customers to business and/or property owners participating in the Economic Development Business Assistance Plan (the Plan) including the addition of the Small Business Microloan Program (Chapter 5) and a budget amendment to increase the allocation for special economic development programs by $420,000 for Chapters 3.3, 4 and 5 of the Plan;
C. In July 2022, Darts Corner, LLC at 17242-44 Downey Avenue, submitted an Application for Chapter 5 of the Plan, which provides qualified businesses with a Small Business Microloan that may be used for working capital, equipment/machinery purchases, inventory purchases, start-up capital and direct business expenses, per the Plan policies and procedures;
D. The Economic Development Director carefully reviewed the Application and determined that the Applicant may qualify for a $30,000 Small Business Microloan based on the policies and procedures of Chapter 5 of the Plan; and
E. On October 10, 2022 and November 14, 2022, the City Council heard public testimony and considered evidence in a public hearing held and noticed in accordance with Government Code § 6066.
- Page 9 of 26 -
City of Bellflower
Resolution No. 22-62
SECTION 2. Loan Approved, Findings. This Resolution declares Darts Corner LLC’s Chapter 5 Small Business Microloan Application for working/start-up capital and equipment acquisition at 17242-44 Downey Avenue as qualified. To be executed, the total loan amount granted to the Applicant is $30,000.00 and is subject to the policies and procedures of the Plan and Loan Agreement File No. 959.
SECTION 3. Administration. The Economic Development Director or designee is authorized to administer the Plan. The Economic Development Department will monitor and enforce the terms of Loan Agreement File No. 959.
SECTION 4. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution’s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.
SECTION 5. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
SECTION 6. To the extent that any other resolution is incorporated into this Resolution, it is superseded or amended in its entirety.
SECTION 7. The City Manager will establish policies and procedures as necessary to carry out this policy.
SECTION 8. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 9. The Mayor, or presiding officer, is hereby authorized to affix [his or her] signature to this Resolution signifying its adoption by the City Council of the City of Bellflower, and the City Clerk, or [his or her] duly appointed deputy, is directed to attest thereto.
SECTION 10. This Resolution will become effective immediately upon adoption.
///
///
///
- Page 10 of 26 -
City of Bellflower
Resolution No. 22-62
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 14th DAY OF NOVEMBER 2022.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
- Page 11 of 26 -
LOAN AGREEMENT FILE NO. 959
BETWEEN THE CITY OF BELLFLOWER
AND
DARTS CORNER, LLC
THIS AGREEMENT is entered into this 14th day of November, 2022, by and between the CITY OF BELLFLOWER, a general law city and municipal corporation ("Lender") and DARTS CORNER, LLC, a California limited liability company ("Borrower").
RECITALS
Borrower requested credit accommodations from Lender and Lender is willing to extend credit accommodations to Borrower, subject to the representations, warranties and terms set forth below. In consideration of these Recitals and of the mutual covenants and conditions set forth below, Lender is willing to enter into this Agreement with Borrower only if Borrower’s member , Tonia McMillian, guarantees Borrower’s performance of this Agreement. Borrower and Lender agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS. The following terms, as used in this Agreement, have the following meanings, unless the context clearly indicates otherwise:
"Agreement" means this Loan Agreement.
"Credit Accommodation" means any debt of the Borrower to the Lender and all terms and conditions of said debt.
"Event of Default" means any act or occurrence specified as an Event of Default in Section 7.
"Generally Accepted Accounting Principles" means generally accepted accounting principles and practices as applicable under Section 1.2 below.
"Guarantor" means any person, corporation, or other entity, which guarantees any Obligation or any Note or has granted Lender a security interest in any of its assets to secure any Obligation or Note.
"Obligation" means any credit accommodations extended or committed by Lender to Borrower and any amount or indebtedness owed or, if contingent, which may be owed Lender by Borrower in connection with or in reliance on or during the term of this Agreement, including loans, advances, letters of credit, Lender's acceptances, guarantees, extensions of credit and any other facility or indebtedness.
"Note" means any and every note, agreement, application, disclosure statement, contract and other document evidencing or securing any Obligation.
“Plan” means the Economic Development Business Assistance Plan adopted by City Council by Resolution 22-34 on July 11, 2022. All terms and conditions in this Agreement are subject to the Plan’s requirements.
- Page 12 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
1.2 ACCOUNTING TERMS AND DETERMINATIONS. All accounting terms used will be interpreted, all accounting determinations will be made, and all financial statements required to be delivered will be prepared in accordance with Generally Accepted Accounting Principles, except for changes after the effective date of this Agreement principles related to inflation accounting, applied on a basis consistent (except for changes approved by Borrower's independent public accountants) with the most recent financial statements of Borrower delivered to Lender.
SECTION 2
THE CREDIT ACCOMMODATIONS
2.1 THE CREDIT ACCOMMODATIONS. Subject to all of the terms of this Agreement, Lender agrees to grant from time to time certain credit accommodations to Borrower at times, in amounts and on terms agreed to by Borrower and Lender, including the terms set forth herein.
2.2 TERM OF AGREEMENT. This Agreement will continue in full force and effect so long as any Obligation is owed Lender by Borrower or Lender has committed to extend any Obligation to Borrower, unless terminated by Lender in writing.
2.3 TERMS OF OBLIGATION. Lender agrees to extend a loan not to exceed $30,000 from the Plan’s Chapter 5 Bellflower Small Business Microloan Program at an interest rate of
7.5% per annum. Payments on principal and interest will be deferred for 60-days from the date of the release of funds.
SECTION 3
CONDITIONS TO CREDIT
Lender's obligation to grant, extend or continue any Obligation to Borrower is subject to the following conditions:
3.1 DOCUMENTS. Lender must receive the following to its satisfaction:
A. Documentation. Borrower’s Promissory Note evidencing the Obligation and any security interests granted in connection therewith and any other instrument or document Lender reasonably requests.
B. Corporate or Other Action: Certified copies of resolutions of the Board of Directors or other organizational authorization of Borrower approving and authorizing the execution, delivery and performance of this Agreement, the Promissory Note and all other documents required by this Agreement.
3.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties contained in Section 4 of this Agreement are accurate and complete as of the date of this Agreement and at the date of the incurrence of each Obligation.
SECTION 4
- Page 13 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that:
4.1 AUTHORIZATION. The execution, delivery and performance by Borrower of this Agreement and each Note: (a) was duly authorized and does not require any other consent or approval, (b) does not violate any article, bylaw, organizational document, law, rule, regulation, order, writ, judgment or decree applicable to Borrower, and (c) will not result in or constitute a default under any indenture, credit agreement, or any other agreement or instrument to which Borrower is a party or to which any of its property is subject.
4.2 FINANCIAL STATEMENTS. The personal financial statement, as of January 1, 2023, and retained earnings for that fiscal year are complete, correct and fairly present the financial position of Borrower and the results of operations for the periods indicated. The financial statements were prepared in accordance with the Generally Accepted Accounting Principles and practices consistently followed in the periods covered.
4.3 FINANCIAL CONDITION. Since the latest statement referred to above, there has been no materially adverse change in the condition of Borrower, financial or otherwise.
Borrower has no contingent liabilities of any substantial amount, which are not reflected in financial statements described above. Since that date, Borrower has not entered into, incurred or assumed any material long-term debts, mortgages, leases or oral or written commitments, nor commenced any significant project, nor made any significant purchase or acquisition of any property.
4.4 ASSETS. Borrower has good and marketable title to all property and assets reflected in the balance sheet referred to in Section 4.2 of this Agreement, except property and assets sold or otherwise disposed of in the ordinary course of business subsequent to that date.
Borrower does not have any outstanding liens or encumbrances on any of its properties or assets. Borrower is not a party to any security agreements or title retention agreements, whether in the form of leases or otherwise, of any personal property except as reflected in said financial statements referred to in Section 4.2 of this Agreement.
4.5 LITIGATION. There are no actions, suits, proceedings or investigations pending or, to the knowledge of Borrower upon reasonable inquiry, threatened against or affecting Borrower at law, in equity, or before or by any governmental department, commission, board, bureau, agency, or instrumentality, domestic or foreign, which if adversely determined would have a materially adverse effect on the business or condition of Borrower. Borrower is not in default of any order, writ, injunction or decree.
4.6 BURDENSOME PROVISIONS. Borrower is not a party to any indenture, agreement, instrument or lease, or subject to any charter, by-law, or other restriction, or any law, rule, regulation, order, writ, judgment or injunction, materially and adversely affecting the business, operations, properties or assets of Borrower.
4.7 OTHER AGREEMENTS. Borrower is not in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any debenture, note or other evidence of indebtedness of Borrower or in any indenture or agreement of Borrower.
- Page 14 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
4.8 TAXES . Borrower has filed all United States federal and state tax returns which are required to be filed and has paid or made adequate provision for the payment of all taxes which have or may become due pursuant to those returns, to any matters raised by audits, assessments received by Borrower, and for any other causes known to it, including foreign taxes.
4.9 THE LOAN. This Agreement, any Note and any other documents delivered by Borrower to Lender at any time will, when executed and delivered, constitute valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally. Borrower will duly and punctually pay any principal and interest when due on any Obligation.
SECTION 5
AFFIRMATIVE COVENANTS OF BORROWER
Unless Lender waives compliance in writing, Borrower agrees to do the following until the full and final payment of each Obligation:
5.1 FINANCIAL STATEMENTS.
A. Borrower to provide CPA-prepared FYE financial statements within 90 days of FYE or calendar year (owners chooses either of reporter period)
B. Borrower to provide copy of personal tax return for guarantor within 15 days of filing
C. Deliver such additional information as Lender from time to time may reasonably request with respect to the business affairs and financial condition of Borrower.
5.2 USE OF LOAN PROCEEDS. Borrower must use the Loan for the following uses:
Startup or expansion expenses of a small business that may include Working Capital, Equipment Purchases, Inventory, Start-Up Capital, and Direct Business Expenses.
5.3 MAINTENANCE OF EXISTENCE. Borrower must remain in and continue to operate substantially the same line of business presently engaged in; maintain and preserve its existence and all rights, privileges and franchises necessary or desirable in the conduct of its business; and conduct its business in an orderly, efficient and customary manner.
5.4 MAINTENANCE OF PROPERTIES. Borrower must maintain, preserve and keep all its properties and assets necessary or useful in its business in good working order and condition.
5.5 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable laws, rules, regulations and orders of all governmental authority, including obligations imposed by ERISA and hazardous substance laws, non-compliance with which could adversely affect - Page 15 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
its business or credit, except where contested in good faith and by appropriate proceedings.
5.6 TAXES AND CLAIMS . Pay and discharge promptly all taxes, assessments, governmental charges and levies imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the date on which penalties would be imposed, and pay all lawful claims for labor, materials and supplies that, if unpaid, might become a lien or charge upon its property, provided that Borrower is not be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof is contested in good faith and by proper proceedings and if Borrower sets aside on its books and maintains adequate reserves for the payment of the same in conformity with Generally Accepted Accounting Principles.
5.7 INSURANCE. Obtain and maintain insurance with responsible companies in such amounts and against such risks (a) as is usually carried by business entities engaged in similar businesses similarly situated, and (b) as is specifically required by Lender in writing, and furnish Lender on request copies of and full information as to the insurance maintained by Borrower. Lender specifically requires Borrower to obtain and maintain adequate liability and hazard insurance on business assets, including but not limited to business equipment and inventory. Lender further requires Borrower to name Lender as additional loss payee on these required insurance policies.
5.8 NOTICE OF DEFAULTS. Give prompt written notice to Lender of any Event of Default as defined in Section 7 of this Agreement or of any event of default arising under any other agreement or indenture entered into by Borrower, or of any other matter which has resulted in or might result in a materially adverse change in its financial condition or operations.
5.9 NOTICE OF LITIGATION. Give prompt written notice of any claim, action or proceeding which would, in the event of an unfavorable outcome, have a materially adverse effect on the financial condition or operations of Borrower.
5.10 RECORDS. Keep and maintain full and accurate accounts and records of its operations according to Generally Accepted Accounting Principles and practices and permit Lender and its designated officers, employees, agents and representatives to have access to such accounts, records and operations and to make examinations thereof at all reasonable times.
5.11 EXECUTION OF OTHER INSTRUMENTS. Do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, all and every such further acts, covenants, assurances or further instruments and documents as Lender may reasonably request in order to carry out the intent and purpose of this Agreement and each other agreement of Borrower with Lender.
5.12 QUARTERLY MEETINGS. Contact Lender quarterly to update Lender of Borrower's business affairs, with the purpose of Lender providing management and technical assistance to Borrower. The quarterly meetings can have several formats as requested by Lender: telephone conference calls; direct mail communications; and/or direct site visits by either Borrower or Lender. This covenant is applicable as deemed necessary by Lender.
- Page 16 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
5.13 PRIORITY. This Loan Agreement also serves as a Security Agreement whereby Borrower pledges all business assets now owned or after-acquired, including but not limited to funds, guaranties, machinery and equipment, inventory, accounts receivable, and the proceeds of such business assets, as Collateral for this Obligation. Upon execution of this agreement, Lender will file a Financing Statement with the California Secretary of State to perfect Lender’s security interest in the Collateral, as required by the Uniform Commercial Code, Article 9, Section 9501 et seq. Filing of the Financing Statement will ensure that Lender’s interest in the Collateral is secured and that Lender’s security interest has priority over any other interest arising in the same property.
5.14 GUARANTY OF BORROWER’S OBLIGATIONS. Concurrently with execution of this Agreement, any individual who is a member of Borrower, must guarantee Borrower’s performance of this Agreement, including, without limitation, the payment of all sums Borrower owes hereunder to Lender, by executing a guaranty substantially in the form attached hereto as Exhibit “A.” Such guaranty will remain in full force and effect until Borrower obligations set forth in the Note are fully paid or otherwise discharged, pursuant to this Agreement’s terms.
SECTION 6
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that until the full and final payment of each Obligation, unless Lender waives compliance in writing, Borrower will not:
6.1 ENCUMBRANCES AND LIENS. Create, execute, assume or allow any mortgage, deed of trust, security agreement, pledge, encumbrance, including the lien of an attachment, judgment or execution, securing a charge or obligation on or of, or execute or allow to be filed any financing statement affecting, any or all of its property, real, personal or mixed, whether now owned or hereafter acquired, except:
A. Liens or charges for current taxes, assessments or other governmental charges which are not delinquent or which remain payable without penalty, or the validity of which is contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided Borrower sets aside on its books and maintains adequate reserves for their payment in conformity with Generally Accepted Accounting Principles.
B. Liens, deposits or pledges less than $500,000.00 made to secure statutory obligations, surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or for purposes of like general nature in the ordinary course of its business.
C. Purchase money security interests for property less than $500,000.00, hereafter acquired, conditional sale agreements, or other title retention agreements, with respect to property hereafter acquired, provided, however, that no such security interest or agreement may extend to any property other than such after-acquired property.
___________(Borrower’s Initials)
- Page 17 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
6.2 BORROWING. Sell or discount any accounts or evidences of indebtedness or other right to payment of money, nor incur, or have outstanding at any time, any indebtedness for borrowed money except for indebtedness incurred pursuant to this Agreement or other written agreement with Lender, nor incur, directly or indirectly, any other liability or obligation for borrowed money.
6.3 CONSOLIDATION AND MERGER. Liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination, except that Borrower may be consolidated with or merged with any entity, provided that in any such merger or consolidation, Borrower is the surviving or resulting entity and immediately after the effectiveness of such merger or consolidation, there is no Event of Default or any event which with notice or lapse of time or both would become an Event of Default under this Agreement.
6.4 ACQUISITIONS. Purchase, acquire or incur any liability for the purchase or acquisition of any or all of the assets or business of any person, firm or corporation.
6.5 DISPOSAL OF ASSETS. Sell, lease, assign, transfer or otherwise dispose of any material part of its property or assets, now owned or hereafter acquired, except obsolete or worn-out property and real estate not used or useful in its business, and except for inventory sold in the ordinary course of business.
6.8 DEFAULT UNDER OTHER AGREEMENTS OR INDENTURES. Commit or do, or fail to commit or do, any act or thing which would constitute an event of default under any of the terms or provisions of any other agreement, indenture, contract, document or instrument executed, or to be executed by Borrower.
______(Borrower's Initials).
6.9 PURCHASE OF SECURITIES. Utilize any part of the proceeds of the loans to purchase or carry any margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System) or to extend credit to others for the purpose of purchasing or carrying any margin stock.
SECTION 7
EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT. If one or more of the following described Events of Default occurs:
A. Borrower defaults in the punctual payment of any principal or interest on any Obligation when due; or
B. Any of the representations or warranties made by Borrower or any Guarantor in this Agreement or in any Note, agreement, guarantee, certificate or financial or other statements delivered or later furnished by or on behalf of Borrower or such Guarantor is false or misleading in any material respect at the time made; or
- Page 18 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
C. Borrower fails to perform or observe any other covenant, term, provision, condition, agreement or obligation of this Agreement or any Note; or
D. Borrower fails to perform or observe any of the covenants, terms, provisions, conditions, agreements or obligations under any other agreement, indenture, document, note or other instrument (including, but not limited to the generality of the foregoing, other indebtedness owing to Lender) executed or to be executed by Borrower; or
E. Borrower or any Guarantor becomes insolvent; or admits in writing its inability to pay its debts as they mature; or fails generally to pay its debts as they become due; or make an assignment for the benefit of creditors or commences a case for its dissolution; or applies for or consents to the appointment of or taking possession by a trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) for it or for a substantial part of its property or business; or takes any action in furtherance of any of the foregoing; or
F. A trustee, liquidator, assignee, custodian, sequestrator or receiver (or similar official) is appointed for Borrower or for a substantial part of its property or business without its consent and is not discharged within 30 days after such appointment; or
G. Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency assumes custody or control of the whole or any substantial portion of the properties or assets of Borrower or any Guarantor and is not dismissed within 30 days thereafter; or
H. Any money judgment, writ or warrant of attachment, or similar process is entered or filed against Borrower or any Guarantor or any of its properties or other assets and is not vacated, bonded, or stayed within the earlier of (a) a period of 15 days or (b) before 5 days prior to the date of any proposed sale thereunder; or
I. A bankruptcy, reorganization, insolvency, or liquidation case or other case for relief under any bankruptcy law or any law for the relief of debtors is commenced by or against Borrower and, if instituted against Borrower or any Guarantor, is not dismissed within 30 days after such institution, or Borrower or any Guarantor by any action or answer approves of, consents to, or acquiesces in any such case or admits the material allegations of, or defaults in answering a petition filed in any such case; or
J. Borrower voluntarily suspends the transaction of business for more than 15 days in any calendar year from the effective date of this Agreement; or K. This Agreement or any Note or any guarantee or other agreement taken in connection herewith or therewith, at any time while any Obligation remains unpaid, ceases to be in full force and effect or is declared null and void, or the validity or enforceability thereof is contested or any party thereto denies that it has any or further liability or obligation under this Agreement or such Note or such guarantee or any other agreement;
THEN, or at any time thereafter, and in each and every such case, unless such Event of Default is waived in writing by Lender, at the option of Lender and at Lender's sole - Page 19 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
discretion, Lender may terminate each commitment to extend any credit accommodations to Borrower and each Obligation outstanding must, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, if not otherwise then due and payable, anything herein or in any Note or other document contained to the contrary notwithstanding, and Lender may immediately, and without expiration of any period of grace, enforce any and all of Lender's rights or remedies provided by this Agreement or any Note or any other rights or remedies afforded by law.
SECTION 8
MISCELLANEOUS PROVISIONS
8.1 NOTICES. Any notices, payments, requests, reports, information or demands which any party may desire or may be required to give to the other party must be given or made upon the other party either through deposit in the mails, by telegraph, or by hand delivery at its address as follows:
BORROWER: Darts Corner, LLC
17242 Downey Avenue
Bellflower, CA 90706
Attn: Tonia McMillian, Owner
LENDER: City of Bellflower
16600 Civic Center Drive
Bellflower, CA 9 0706
Attn: Director of Economic Development
or to such other address as the other party may designate in writing pursuant to this Section. All such notices, requests, demands, directions and other communications must, when mailed or telegraphed, be effective when deposited in the mails or delivered to the telegraph company.
8.2 WAIVER. Neither the failure of nor any delay on the part hereto in exercising any right, power or privilege hereunder precludes other or further exercise thereof or the exercise of any right, power or privilege; nor will any waiver of any right, power, privilege or default hereunder constitute a waiver of any other right, power, privilege or default or constitute a waiver of any other default of the same or of any other term or provision. All rights and remedies herein provided are cumulative and not exclusive of any rights or remedies otherwise provided by law, or in any Note.
8.3 BANKER'S LIEN OR SETOFF. Nothing in this Agreement will be deemed any waiver or prohibition of Lender's right of Lender's lien or setoff.
8.4 EXPENSES OF LENDER. Borrower must pay on demand all costs and expenses, including, without limitation, reasonable counsel fees, including allocated costs of Lender's in-house counsel and appellate fees and costs, incurred by Lender in connection with the - Page 20 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
administration of this Agreement and the enforcement and protection of the rights of Lender under this Agreement, including the protection of the rights of Lender in any bankruptcy, reorganization, liquidation or insolvency proceeding, whether or not litigation is commenced.
8.5 ASSIGNABILITY. This Agreement binds and its benefits inure to Borrower and Lender, and their respective successors and assigns, as the case may be. Borrower may not assign this Agreement or any of Borrower's rights as described in this Agreement without the prior written consent of Lender.
8.6 GOVERNING LAW. This Agreement, any Note and all other documents executed pursuant to this Agreement or any Note were entered into, and are governed and construed according to the laws of the State of California, unless otherwise provided for in writing. Exclusive venue for any action arising from this Agreement will be in Los Angeles County.
8.7 HEADINGS. The headings of this Agreement are solely for the purpose of identification and will not be construed as a part of the paragraphs they head.
CITY OF BELLFLOWER
By
__________________________________
Jeffrey L. Stewart,
City Manager
DARTS CORNER, LLC
By
__________________________________
Tonia McMillian, Owner
APPROVED AS TO FORM:
KARL H. BERGER, CITY ATTORNEY
__________________________________
Joaquin Vazquez,
Deputy City Attorney
ATTEST:
__________________________________
Mayra Ochiqui,
City Clerk
- Page 21 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
EXHIBIT “A”
PERSONAL GUARANTY
PERSONAL GUARANTY OF [NAME]
In consideration of execution of that certain loan agreement between the City of Bellflower ("Lender”) and Darts Corner, LLC, a California limited liability company ("Borrower”), the undersigned, ________ ("Guarantor”) unconditionally and irrevocably guarantees to Lender, its successors, and assigns, the full and prompt performance of Borrower’s obligations under the Agreement, including the payment of all money due, in accordance with the Agreement’s terms.
Guarantor’s liability under this Guaranty will, in no way, be affected by the release or discharge of Borrower in any creditor proceeding, receivership, bankruptcy, or other proceeding; or by the cessation, from any cause whatsoever, whether consensual, or by operation of law, of Borrower’s liability, except cessation of liability caused by Borrower’s full performance or satisfaction of all conditions arising under the Agreement.
In the event of Borrower’s default of the Agreement, Guarantor agrees that Lender may enforce this Guaranty without the necessity of resorting to or exhausting any security or collateral; and Guarantor waives the right to requires Lender to proceed against Borrower, to foreclose any lien on any real or personal property, to exercise any right or remedy under the Agreement, to pursue any other remedy, or to enforce any other right.
Guarantor further agrees that nothing contained in this Guaranty will prevent Lender from pursuing any Agreement remedy or exercising any rights available to it thereunder, and the exercise of any such right will not constitute a legal or equitable discharge by Lender. Guarantor understands that Lender’s exercise of certain rights and remedies under the Agreement may affect or eliminate Guarantor’s right of subrogation against Borrower, and therefore, Lender agrees that, in the event of Borrower’s default of the Agreement, Lender will give written notice of such default to Guarantor, and Guarantor will then have the right to cure Borrower’s default by fully performing Borrower’s obligations, including, without limitation, the payment of late charges and other costs and expenses arising from a late payment or default. In the event Guarantor elects to cure Borrower’s Agreement default, Guarantor must complete performance within 60 days of Lender’s notice to Guarantor of Borrower’s default. In the event Guarantor fails to cure such default within the 60-day timeframe, Lender may pursue its legal rights and remedies under the Agreement and Lender’s rights and remedies under this Guaranty.
Whenever the parties hereto desire to give or serve any notice, demand or request with respect to this Guaranty, each such communication must be in writing and will be effective only if delivered by personal service or mailed by registered or certified mail, postage prepaid, return receipt requested, addressed as set forth below. Such communications will be effective only when they are received by the addressee thereof, but if sent by registered or certified mail, they will be deemed effective three days after being deposited in the United States mail, postage - Page 22 of 26 -
City of Bellflower
Loan Agreement File No. 959 – Darts Corner, LLC
prepaid. Each party may change its address for such communications by giving notice to the other in accordance with this paragraph.
GUARANTOR:
LENDER: City of Bellflower
16600 Civic Center Drive
Bellflower, CA 90706
Attn: Director of Economic Development
This Guaranty will bind Guarantor, their heirs, representatives, administrators, executors, successors, and assigns.
If Lender commences any action against the undersigned to enforce any terms or conditions of this Guaranty, Lender will be entitled to recover from the undersigned Guarantor, in any action in which it may prevail, reasonable attorney fees which will be fixed as part of the costs by the court in which the action is pending.
This Guaranty will be governed by and construed in accordance with the laws of the State of California.
Time is of the essence under this Guaranty and any amendment, modification, or revision to this Guaranty.
GUARANTOR
By:________________________________
Date:_______________________________
- Page 23 of 26 -
PROMISSORY NOTE OF
AGREEMENT FILE NO. 959
BETWEEN THE CITY OF BELLFLOWER
AND
DARTS CORNER, LLC
$30,000.00 Bellflower, CA
For value received, the undersigned (Borrower) promises to pay to the order of the City of Bellflower (Payee) (Holder) at its office in the City of Bellflower, State of California or at holder's option, at such other place as may be designated from time to time by the holder, $30,000 (Thirty Thousand Dollars), with interest on the unpaid principal computed from the date of the final advance to the undersigned at the rate of seven and one half percent (7.5%) per annum, payment to be made in installments as follows (Obligation):
Loan payments must be made in equal installments, each in the amount of $358.32, for a term of 120 months, commencing 60 days from date of the drawdown, and continuing due and payable on the first business day of each month thereafter, when the full unpaid balance of principal and interest becomes due and payable. If Borrower makes scheduled payments in a timely manner and does not prepay any portion of the principal, the loan will be fully amortized in 120 months, with the final payment in the amount of $358.32.
If a payment not timely made remains overdue for a period of (10) days after the same becomes due and payable, Borrower, without notice or demand by the City of Bellflower or any other holder of the Note, must pay a late charge in an amount equal to five percent (5%) of the delinquent payment owing (the “Late Charge”) or $100.00, whichever is greater. Borrower agrees that an amount equal to the Late Charge is a reasonable estimate of the damage to the City of Bellflower or other holder of the Note in the event of late payment due hereunder.
Payment of any installment of principal or interest owing on this Note may be made before the maturity date thereof without penalty.
The term "Indebtedness" as used herein means the indebtedness evidenced by this Note, including principal, interest, and expenses, whether contingent, now due or hereafter to become due and whether heretofore or contemporaneously herewith or hereafter contracted. The term "Collateral" as used in the Note means any funds, guaranties, machinery and equipment, inventory, accounts receivable or other personal and real property or rights therein of any nature whatsoever, or the proceeds thereof which may have been, are, or hereafter may be assigned, pledged or hypothecated, directly by the undersigned or by third parties, in connection with, or as security for, the Indebtedness or any part thereof. The Collateral, and each part thereof, will secure the Indebtedness and each part thereof. The covenants and conditions set forth or referred to in any and all instruments of hypothecation constituting the Collateral are hereby incorporated in the Note as covenants and conditions of the undersigned with the same force and effects as though such covenants and conditions were fully set forth herein. - Page 24 of 26 -
City of Bellflower
Promissory Note – DARTS CORNER, LLC
Upon the nonpayment of the Indebtedness, or any part thereof, when due, whether by acceleration or otherwise, Holder is empowered to sell, assign, and deliver the whole or any part of the Collateral at public or private sale, without demand, advertisement or notice of the time or place of sale or of any adjournment thereof, which are hereby expressly waived. After deducting all expenses incidental to or arising from such sale or sales, Holder may apply the residue of the proceeds thereof to the payment of the Indebtedness returning the excess, if any, to the undersigned. The undersigned hereby waives all right of redemption or appeasement whether before or after sale.
In the event of a default, holder is further empowered to collect or cause to be collected or otherwise to be converted into money all or any part of the Collateral, by suit or otherwise, and to surrender, compromise, release, renew extend, exchange, or substitute any item of the Collateral in transactions with the undersigned or any third party, irrespective of any assignment thereof by the undersigned, and without prior notice to or consent of the undersigned or any assignee. Whenever any item of the Collateral is not paid when due, or is otherwise in default, whether or not the indebtedness, or any part thereof, has become due, Holder has the same rights and powers with respect to such item of the Collateral as are granted in this paragraph in case of nonpayment of the Indebtedness, or any part thereof, when due. None of the rights, remedies, privileges, or powers of Holder expressly provided for therein are exclusive, but each of them are cumulative with and in addition to every other right, remedy, privilege, and power now or hereafter existing in favor of Holder, whether at law or equity, by statue or otherwise.
The undersigned agree to take all necessary steps to administer, supervise, preserve, and protect the Collateral; and regardless of any action taken by Holder, there is no duty upon Holder in this respect. In the event of a default the undersigned must pay all expenses of any nature, whether incurred in or out of court, and whether incurred before or after this Note will become due at its maturity date or otherwise, including without limitation to reasonable attorney's fees and costs, which Holder may deem necessary or proper in connection with the satisfaction of the Indebtedness or the administration, supervision, preservation, protection of (including, but not limited to, the maintenance of adequate insurance) or the realization upon the Collateral. Holder is authorized to pay at any time and from time to time any or all of such expenses, add the amount of such payment to the amount of the Indebtedness, and charge interest thereon at the rate specified herein with respect to the principal amount of this Note.
The security rights of Holder and its assigns hereunder will not be impaired by Holder's sale, hypothecation or rehypothecation of any note of the undersigned or any item of the Collateral, or by any indulgence, including but not limited to (a) any renewal, extension, or modification which Holder may grant with respect to the Indebtedness or any part thereof, or (b) any surrender, compromise, release, renewal, extension, exchange, or substitution which Holder may grant in respect of the Collateral, or (c) any - Page 25 of 26 -
City of Bellflower
Promissory Note – DARTS CORNER, LLC
2 indulgence granted in respect of any endorser, guarantor, or surety. The purchaser, assignee, transferee, pledgee of this Note, the Collateral, and guaranty, and any other document (or any of them), sold, assigned, transferred, pledged, or repledged, will forthwith become vested with and entitled to exercise all the powers and rights given by this Note and all applications of the undersigned to Holder or, as if said purchaser, assignee, transferee, or pledge were originally named as Payee in this Note and in said application or applications.
By: Dated:
Borrower
By: Dated:
Borrower
Note-Corporate applicants must execute Note, in corporate name, by authorized officer, and seal must be affixed and duly attested; partnership applicants must execute Note in firm name, together with signature of a general partner. - Page 26 of 26 -
12-A
TO: Honorable Mayor and Members of the City Council
FROM: Jeff Stewart, City Manager
Karl H. Berger, City Attorney
SUBJECT: Consideration and possible action to read by title only, waive further reading and introduce Ordinance No. 1419 – An Ordinance repealing Bellflower Municipal Code Chapter 2.40 and amending Chapter 3.20 in its entirety to regulate contracting, including purchases of goods, supplies and services.
DATE: November 14, 2022
EXECUTIVE SUMMARY
Recently, the City underwent an administrative and legal review of purchasing policies and practices including the regulations within the Bellflower Municipal Code (“BMC”).
Based upon current practices and law, it is recommended that the City Council consider amending the BMC to update the City’s purchasing regulations including, without limitation, increasing the signature authority of the City Manager and Department Directors.
RECOMMENDATION TO CITY COUNCIL
1) Read by title only, waive further reading, and introduce Ordinance No. 1419; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
Other than a cost associated with codifying the draft Ordinance, there is no immediate fiscal impact related to adopting the proposed Ordinance.
DISCUSSION
Unless otherwise provided by ordinance, there is a two-step process by which Bellflower may enter into a contract: (1) the contract must be approved by the City Council; and (2) the Mayor must sign the contract. Bellflower Municipal Code (“BMC”) Chapter 2.40 provides authority to the City Manager and Department Directors to sign contracts on the City’s behalf. Specifically, the authority for the City Manager is limited to contracts of $25,000 or less; the authority for Department Directors is limited to $2,500. If adopted, the proposed ordinance would consolidate BMC Chapter 2.40 with BMC Chapter 3.28 (for greater ease of reference) and also increase this signature authority to $60,000 and $15,000, respectively. This proposed signature authority for the City Manager matches the current authority under Chapter 3.30, Public Works Contracts, which is $60,000. -1-
Staff Report – Purchasing Regulations
November 14, 2022
DISCUSSION – Continued
In a purchasing context, Bellflower already gives a 5% preference to local vendors in BMC § 3.28.140. California law does allow the City to give a preference to local businesses after identifying specific factors that must be overcome in order to become competitive, e.g., local sales tax or extraordinarily high rent (Associated General Contractors of California v. City and County of San Francisco (9th Cir., 1987) 813 F.2d 922). Here, local factors would include local sales tax (1.25%) along with other matters including higher rent. Consequently, the draft ordinance would give “a 5% preference to businesses within the City of Bellflower submitting bids to the city in order to overcome any competitive disadvantage relating to local factors including, without limitation, sales taxes.”
The proposed ordinance would also add regulations regarding professional service agreements; clarify bidding procedures and exceptions; and allow vendors that are only doing business with the City to avoid obtaining a business license. As to the latter, this would apply only if the only business transaction conducted by the vendor is with the City itself and the only parties to the written contract is the vendor and City. The idea is that the City may avoid paying a higher cost to the vendor (which will simply pass-through any business license cost to the City).
It is anticipated that this ordinance will help facilitate non-public works contracting throughout the City.
Also attached for consideration are Administrative Policies and Procedures (“AP&P”) that would implement the new ordinance. These provide for the day-to-day implementation of the new regulations and may be changed administratively by the City Manager to reflect the City’s corporate practices.
ATTACHMENTS
Draft Ordinance
Draft AP&P
-2-
CITY OF BELLFLOWER
ORDINANCE NO. 1419
AN ORDINANCE REPEALING BELLFLOWER MUNICIPAL CODE
CHAPTER 2.40 AND AMENDING CHAPTER 3.28 IN ITS ENTIRETY TO
REGULATE CONTRACTING INCLUDING PURCHASES OF GOODS,
SUPPLIES AND SERVICES
THE CITY COUNCIL DOES ORDAIN AS FOLLOWS:
SECTION 1. Bellflower Municipal Code (“BMC”) Chapter 2.40 is repealed.
SECTION 2. Bellflower Municipal Code (“BMC”) Chapter 3.28 is amended in its entirety to read as follows:
“Chapter 3.28
CONTRACTING AND PURCHASING
3.28.010. Purpose.
This chapter is adopted pursuant to the City’s general and specific contracting powers and, without limitation, Government Code § 40602 for the purpose of setting forth the requirements to bind the City by contract. Nothing in this chapter is intended to, nor does it, apply to public works projects as defined by California law.
3.28.020. Generally.
The City is not bound by any contract unless the contract is in writing, signed on behalf of the City by an officer or officers as set forth in this chapter, and approved as to form by the City Attorney. Any authorized city official must sign a contract on the City’s behalf when directed to do so by the City Council.
3.28.030. City Council Authority.
Unless otherwise provided in this code, a resolution, or ordinance, the City Council must approve all contracts and authorize the Mayor, or other officer, to sign a contract on the City’s behalf.
3.28.040. Emergency Contracting.
In the event of a declared state of emergency, the City Manager may bind the City, with or without a written contract, for the acquisition of equipment, materials, supplies, labor, services, or other items.
-3-
City of Bellflower
Ordinance No. 1419
3.28.050. Signature Authority.
In accordance with Government Code § 40602, the following persons are authorized to sign contracts on the City’s behalf:
A. The Mayor;
B. The City Manager when directed to do so by the City Council, resolution, ordinance, or any provision of this Code;
C. The City Manager for contracts equal to or less than $60,000;
D. Department directors for contracts equal to or less than $15,000.
3.28.060. Definitions.
Unless the contrary is stated or clearly appears from the context, the following definitions will govern the construction of the words and phrases used in this chapter:
A. “Contract” includes a purchase order and professional services agreement as the context may dictate.
B. “General Services” means services that are manual or routine in nature as opposed to services that are predominately intellectual and varied in character or require specialized knowledge of an advanced type generally acquired from study at an institution of higher learning.
C. “Professional Services” means those services provided to the City by independent consultants that are predominantly intellectual and varied in character – as opposed to manual or routine in nature – which require specialized knowledge of an advanced type generally acquired from study at an institution of higher learning, and entail the exercise of a wide degree of discretion and judgment when performing the services (e.g., lawyers, engineers, architects, certified public accountants and land-use planners).
D. “Purchase” includes renting, leasing, purchasing, licensing, or a trade of supplies.
E. “Supplies” includes general services; equipment; materials; goods, parts; miscellaneous commodities; and other office supplies. “Supplies” does not include professional services.
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City of Bellflower
Ordinance No. 1419
3.28.070. Purchasing agent.
The City Manager is designated as the City’s purchasing agent. The City Manager may delegate purchasing agent responsibilities to another appointed agent in writing. Supplies for City departments must be purchased in accordance with this code, any administrative regulations promulgated pursuant to this chapter, and such additional regulations that the City Council may adopt by written resolution.
The duties of the purchasing agent may be combined with those of any other office or position and include, without limitation, the following:
A. Purchasing or contracting for supplies required by any department.
B. Promulgating administrative policies and procedures to implement the purposes of this chapter as approved by the City Manager in writing.
C. Facilitating the inspection of all supplies purchased under this chapter to determine their quality and ensure conformance with city specifications.
D. Recommending the transfer of surplus or unused supplies and equipment between departments as needed.
E. Selling or disposing of supplies that cannot be used by any department or which have become unsuitable for City use.
F. Performing such other tasks as may be necessary for the proper conduct of purchasing of supplies.
3.28.080. Purchasing.
Except as otherwise provided in this code all purchases and contracts for supplies must be accomplished either by or through the purchasing agent.
3.28.090. Exceptions to bidding.
Bidding is not required for the following:
A. Emergency Purchasing. During a declared state of local emergency, bidding is not required. The city manager must provide a report to the city council in accordance with applicable law regarding such emergency purchases.
B. Convenience. When the supply can be obtained from only one vendor or there are circumstances demonstrating only one vendor is best qualified to provide the supplies.
C. Best Value. The City Manager may select the lowest responsible bidder based on objective criteria for evaluating the qualifications of bidders with the resulting selection representing the best combination of price and qualifications along with the nature of the goods, supplies, or equipment. -5-
City of Bellflower
Ordinance No. 1419
D. Cooperative Purchasing. Where the purchasing agent identifies a cooperative competitive bidding procedure, being prepared by and processed through another local, state, or federal governmental agency, the purchasing agent may join into an existing written purchase contract through a competitive bidding process prepared by and awarded by another local, state or federal governmental agency. The cooperative purchasing contract must be incorporated by reference into the City’s contract and filed with the City Clerk’s office.
E. Supplies less than $3,000. Purchases made for supplies with an estimated value of less than $3,000 may be purchased on the open market without bidding requirements.
3.28.100. Bidding.
Purchases made for supplies with an estimated value of between $3,000 and $60,000 require the following:
A. Purchases must, whenever practicable, be based upon at least three bids and be awarded to the lowest responsible bidder.
B. Bids may be obtained either verbally or in writing.
C. Department directors, or designee, may solicit proposals for such supplies.
D. The City Manager may require that supplies purchased pursuant to this section be formally bid and awarded. Before requiring such bidding, the City Manager must promulgate administrative policies and procedures, in a form approved by the City Attorney, establishing such formal bidding procedures.
3.28.110. Purchasing – Above $60,000.
Purchases made for supplies with an estimated value of over $60,000 require the following:
A. Notice Inviting Bids. Notices inviting informal bids must be posted at City Hall distributed (either electronically or otherwise) at least 10 days before the deadline for submitting bids to all vendors on the City’s list for the supplies being sought and to such other vendors as the purchasing agent deems appropriate. The notice soliciting bids must describe the supplies needed in general and generic terms, identify security required for the bid, how bid specifications can be obtained, and designate the deadline and place for submitting informal bids. The purchasing agent is responsible for soliciting sealed bids from all responsible prospective vendors whose names are on the bidders’ list maintained by the requesting department.
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City of Bellflower
Ordinance No. 1419
B. Bidder’s Security. The purchasing agent may require bidders to secure bids and performance in a manner approved by the purchasing agent and in a form approved by the City Attorney. Unsuccessful bidders are entitled to the return of bid security within 60 days after the date of the award. When deemed necessary by the purchasing agent, bidders’ security may be prescribed in the notices inviting bids. Bidders are entitled to return of bid security; provided, that a successful bidder forfeits their bid security upon refusal or failure to execute the contract within 10 days after the notice of award of contract has been mailed, unless the City is responsible for the delay. If a successful bidder refuses to comply with, or fails to execute, a contract issued by the City within 10 days after being awarded the contract, the City may cancel the award and retain any bid security. Compliance with contract requirements includes, without limitation, submission of insurance documentation. Should this occur, the City Council may award the contract to the next lowest resp onsible bidder.
C. Performance Bonds. The City Council or purchasing agent may require a performance bond in an amount reasonably necessary to protect the best interests of the City. If the City Council or purchasing agent requires a performance bond, the form and amount of the bond will be described in the notice inviting bids.
D. Bid Opening Procedure. Sealed bids must be submitted to the purchasing agent in an envelope clearly marked as a bid along with the bidder’s name and project number written on the outside. The purchasing agent will open properly submitted bids at the time and place stated in the notice inviting bids.
A written record and tabulation must be made at the time all bids are received and then opened. Bids received after the time specified in the notice inviting bids will not be accepted.
E. Council Approval. All bids received as part of the formal bidding process must be submitted to the City Council by the purchasing agent. The City Council may reject all bids or award the purchase contract to the best qualified bidder whose bid or proposal fulfills the purpose intended according to criteria designated in the solicitation, provided that the contract award amount is within the unencumbered appropriation for that item. The City Council may waive any minor bid irregularities. If the City does not receive any bids, the City Council may:
1. Abandon the purchase;
2. Authorize rebidding the purchase on an informal basis; or
3. Authorize purchasing the supplies on a direct negotiated contract.
F. Tie Bids. If two or more bids received are for the same total amount or unit price, quality and service being equal, the City Council may accept one of them or accept the lowest bid made by negotiation with the tie bidders at the time of or after the bid opening.
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City of Bellflower
Ordinance No. 1419
3.28.120. Lowest responsible bidder.
A. For the purposes of this chapter, in addition to price, “lowest responsible bidder” will be determined based on consideration of the following factors:
1. The ability, capacity and skill of the bidder to perform the contract or provide the supplies;
2. Whether the bidder has the ability (e.g., equipment and facilities) to perform the contract or provide the supplies promptly, or within the time specified, without delay or interference;
3. The character, integrity, reputation, judgment, experience and efficiency of the bidder;
4. The bidder’s record or performance of previous contracts or services;
5. The previous and existing compliance by the bidder with laws and ordinances relating to the contract;
6. The sufficiency of the financial resources and ability of the bidder to perform the contract; and
7. The quality, availability and adaptability of the supplies to the particular use required.
B. In addition to the foregoing, for the purpose of calculating the lowest responsible bidder, preference will be awarded to local vendors, when the following criteria are met:
1. The vendor is a person or legal entity with a place of business within the City and a valid current business license issued by the City; and
2. The difference between bids from the local vendor and those outside the City is less than the current sales tax benefit the City would receive.
3.28.130. Local Vendor Preference.
The City will provide a 5% preference to local businesses submitting bids to the City in order to overcome any competitive disadvantage relating to local sales taxes. A “local vendor” means a person or legal entity which has a place of business within the City and has a valid, current, business license issued by the City.
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City of Bellflower
Ordinance No. 1419
3.28.140. City Contracts.
Pursuant to Bellflower Municipal Code Section 5.04.080(B), persons who are a party to a written contract with the City for goods or services need not pay a business license tax under this chapter if all the following provisions apply:
A. The person is party to a written contract with the City approved in accordance with all applicable laws including, without limitation, this chapter;
B. The only business transaction conducted by the person within the City’s jurisdiction is with the City; and
C. The only parties to the written contract is the person and City.
3.28.150. Purchase Orders.
Purchase orders may only be used for purchasing supplies and equipment, and not for services, in accordance with the budget resolution.
3.28.160. Employment Contracts.
This chapter does not apply to the employment of any person by the City at a regular salary.
3.28.170. Professional services.
The City Manager may contract for professional services in an amount not to exceed $60,000. Professional services costing more than $60,000 must be secured by the City Council. The bidding requirements of this chapter do not apply to professional service agreements. However, the City Manager may promulgate administrative policies and procedures to determine how professional services may be secured via a request for qualifications or request for proposals.
3.28.180. CPI Adjustment.
The purchasing thresholds imposed under this chapter are automatically adjusted annually on July 1st beginning July 1, 2024, for the increase in the cost-of-living by the percentage change in the Consumer Price Index (CPI) from the base index of April 2023 to the index of each succeeding year’s April index, as prepared and released by the United States Department of Labor, Bureau of Labor Statistics, for the Los Angeles-Long Beach-Anaheim area for All Items, All Urban Consumers.
The increase for the threshold of $3,000 will be made in the increment of $100, rounded to the nearest multiple of $100. The increase for the thresholds of $15,000 and $60,000 will be made in the increment of $1,000 rounded to the nearest multiple of $1,000.
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City of Bellflower
Ordinance No. 1419
3.28.190. Segmentation Prohibited.
It is unlawful to knowingly take action to separate purchases into smaller units or segments solely for the purpose of evading the competitive formal or informal bidding requirements set forth in this chapter.”
SECTION 3. Environmental Review. This ordinance is exempt from review under the California Environmental Quality Act (California Public Resources Code §§ 21000, et seq., “CEQA”) and CEQA regulations (14 California Code of Regulations §§ 15000, et seq.) because it consists only of revisions and clarifications to existing purchasing regulations and procedures related thereto. Adoption of this ordinance will not have the effect of deleting or substantially changing any regulatory standards or required findings.
SECTION 4. All previously adopted resolutions including, without limitation, Resolution Nos. 80-28 and 87-074, are repealed. Any administrative regulation that is not promulgated in accordance with this ordinance is superseded and rendered void including, without limitation, Policy Nos. 4.1, 4.9, 4.12, 4.14, and 4.16. Repeal of any provision of the BMC, any ordinance, any resolution, or any administrative regulation, does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Ordinance’s effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance.
SECTION 5: If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable.
SECTION 6. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 7. The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Bellflower’s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within 15 days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.
SECTION 8. This Ordinance will take effect on the 30th day following its final passage and adoption.
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City of Bellflower
Ordinance No. 1419
ORDINANCE NO. 1419 HAD ITS FIRST READING ON NOVEMBER 14, 2022, ITS SECOND READING ON ____________, AND WAS DULY PASSED, APPROVED,
AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER AT ITS REGULAR MEETING OF ___________.
Raymond Dunton, Mayor
ATTEST:
_________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
_________________________
Karl H. Berger, City Attorney
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ADMINISTRATIVE POLICIES AND PROCEDURES
APP NO.:______6__________
PURCHASING & CONTRACTING POLICY
I. PURPOSE
This Administrative Policy and Procedure (“AP&P”) is adopted pursuant to Bellflower Municipal Code (“BMC”) § 3.28.070 for the purpose of implementing BMC Chapter 3.28 which governs purchasing and execution of contracts (collectively, “Contracting Regulations”). Nothing in this AP&P may be interpreted as superseding the BMC; this AP&P is intended only to supplement the Contracting Regulations.
II. PURCHASING OFFICER
In accordance with BMC § 3.28.070, the City Manager designates each Department Director as the City’s purchasing officer for his/her respective department. The City utilizes a decentralized purchasing system. Accordingly, each Department is authorized to procure goods and services, except public works projects, in accordance with the requirements of BMC Chapter 3.28.
III. APPLICABILITY
This AP&P implements the Contracting Regulations for securing all services and goods EXCEPT public works projects that are governed by BMC Chapter 3.30 and Public Contract Code §§ 20160-20175.2.
IV. DEFINITIONS
Unless the contrary is stated or clearly appears from the context, the following definitions govern the construction of the words and phrases used in this AP&P. Words and phrases not given a meaning by this AP&P have the meaning set forth in the BMC.
A. “Contract” means an agreement between the City and a third-party for purchasing services or supplies. A contract includes the term “agreement”; “purchase order”; or “memorandum of understanding,” and any derivations of such terms.
B. “Contracting Regulations” means BMC Chapter 3.28 which governs purchasing and execution of contracts.
C. “Equipment” means furnishings, machinery, vehicles, rolling stock, and other personal property generally used in conducting the City’s business.
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D. “General Services” means services that are manual or routine in nature as opposed to services that are predominately intellectual and varied in character or require specialized knowledge of an advanced type generally acquired from study at an institution of higher learning. Examples of general services include janitorial services and secretarial services.
E. “Professional Services” means those services provided to the City by independent consultants that are predominantly intellectual and varied in character – as opposed to manual or routine in nature – which require specialized knowledge of an advanced type generally acquired from study at an institution of higher learning, and entail the exercise of a wide degree of discretion and judgment when performing the services (e.g., lawyers, engineers, architects, certified public accountants and land-use planners).
F. “Purchase” includes renting, leasing, purchasing, licensing, or a trade of supplies.
G. “Request for proposal/RFP” means the competitive selection process, following a solicitation issued by the City, in which vendors are requested to submit proposals for the procurement of goods, services, work and/or materials.
H. “Request for qualifications/RFQ” means a solicitation issued by the City in which vendors are requested to submit detailed information regarding personal competence necessary for the performance of the services required, and/or the qualification of commodities for a particular use.
I. “Services” means either general services or professional services as the context demands.
J. “Supplies” means equipment, materials, goods, tools, parts, or other commodities generally used in conducting the City’s business.
V. PROCUREMENT OF SERVICES AND SUPPLIES
This AP&P implements the Contracting Regulations as to securing supplies and services; the type of contract that must be used is determined by the type of supplies or services sought by the City.
A. General Services
General services may be procured in accordance with BMC Chapter 3.28. Note that the following general services may require specialized contract templates to comply with California law (consult with the City Attorney’s office):
1. Landscape maintenance (may require prevailing wage);
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2. Janitorial services (may require prevailing wage);
3. Hazardous waste removal (requires specialized indemnification);
4. Towing (may require specialized bidding requirements);
5. Solid waste services (separate bidding and contracting requirements); and
6. Transit services (specialized bidding and contracting requirements).
B. Professional Services
Professional services do not require bidding under the BMC. A Department Director, however, may determine that it is desirable for the City to issue a RFQ or RFP for certain professional services. The following professional services may require specialized contracts:
1. Design professionals as defined by California law (specialized indemnification provisions; consult the City Attorney’s office);
2. Attorneys;
3. Environmental consultants (specialized indemnification provisions);
4. Medical professionals;
5. Appraisal services; and
6. Surveyors and some testing consultants (may require prevailing wage; consult with the City Attorney’s office).
C. Supplies
Supplies may be procured in accordance with BMC Chapter 3.28.
VI. TYPES OF CONTRACTS
A. General Services Contract (includes “purchase order”)
The general services contract may be used either for procuring general services or most supplies. It may not be altered without approval from the City Attorney’s office. A general services contract may be used for one particular transaction or multiple transactions during the term of the contract (aka a “blanket purchase order”). These contracts are designed to expedite the procurement process by simply attaching the scope of services to the contract template. No additional City Attorney approval is needed if the template remains unaltered.
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Janitorial, landscape maintenance, towing services, and other types of general maintenance services may require special bidding and contracting language (e.g., the inclusion of prevailing wage terms); consult the City Attorney’s office first.
B. Professional Services Contract (“PSA”)
1. Standard PSA
This may be used for procuring most professional services. See below for exceptions.
Standard PSAs may be utilized for one particular task, or may be issued as an “on-call” agreement. On-call agreements allow the City to assign particular tasks to a consultant during the term of the agreement.
2. Design Professional PSA
These contracts are for engineers and architect services (consult the City Attorney’s office first). California law requires specialized indemnification language.
3. Legal Retainer PSA
Legal Retainer PSAs may only be procured by the City Council upon advice from the City Attorney.
4. Environmental PSA
Professional services secured for environmental review of certain public or private projects must use a specialized professional service agreement. While not required, it is desirable that such services first be subject to an RFQ or RFP process to select a consultant. The Environmental PSA contains specialized language regarding the California Environmental Quality Act (“CEQA”).
5. Medical PSA
Professional services that may utilize medical information of employees or third-persons require specialized contracts. Medical PSAs will include language related to the Health Insurance Portability and Accountability Act (“HIPAA”) along with other language required by California law. Consult the City Attorney’s office first.
6. Other PSA
Appraisal services, surveying, and certain kinds of project management/testing (associated with public works projects) may require a specialized contract. The Labor Code may require such professionals to pay prevailing wage. Consult the City Attorney’s office first.
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VII. PROCESSING CONTRACTS
A. Purchase Orders (PO) (must include Quote Verification Page and may require General Services contract template, as determined by the responsible Department Director)
POs may be used to meet unanticipated, miscellaneous, non-capital day-to-day, or immediate needs of Departments that arise through the fiscal year. These immediate needs are those necessary to complete specific jobs and/or minimize delay in completing an overall project. To establish a PO charge account, Departments must provide complete vendor information, established price lists, and clearly note any discounts that apply to each PO.
B. Requisitions.
Requisitions must be approved by a Department Director, or authorized designee.
VIII. AUTHORITY TO APPROVE AND EXECUTE CONTRACTS
The Contracting Regulations provide the only means by which the City may be bound by contract. Any document that does not meet those requirements is – by California law – void. Generally, a contract becomes effective only when (1) it is in writing; (2) it is approved by an authorized decision-maker; (3) it is signed by an authorized person; and (4) it is approved as to form by the City Attorney.
A. Written Contracts
As noted, only written contracts bind the City. Verbal contracts do not bind the City. All such written contracts must comply with California law, the Contracting Regulations, and this AP&P.
B. Authorized Decision-maker
Generally, the authorized decision-maker is (a) the City Council; (b) the City Manager; or (c) (in limited circumstances) a Department Director. Per the BMC, the City Manager is responsible for all City operations. While the City Manager may delegate authority to Department Directors to make decision regarding contracts, the City Manager (and City Council) remain responsible for a final decision.
C. Authorized Signature
California law provides that the Mayor is the only person authorized to sign contracts, unless otherwise provided by ordinance. In addition to the Mayor, the following persons are authorized to sign contracts:
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1. The City Manager if authorized by the City Council, by the BMC, by resolution, or by other action approved by the City Council.
Generally, the City Manager has signature authority for contracts valued at up to $60,000. The City Manager also derives signature authority from the standard budget resolution adopted by the City Council. Review staff reports and City Council meeting minutes to determine if the City Council delegated other signature authority to the City Manager for a particular matter.
2. Department Directors for contracts valued up to $15,000. Ordinarily, however, the services or supplies procured by such contracts should be identified in a Department budget which is approved by the City Council.
D. Approved as to form
The Contracting Regulations require that the City Attorney’s office approve contracts as to form. What does that mean? It means that the City Attorney, or designee, reviewed the contract; made such changes that are desirable to protect the City, avoid ambiguities, or otherwise clarified the contract; and (in the rare events this happens) advised the City Council, City Manager, or Department Director regarding the risk involved with executing a contract containing legally undesirable language. As to the latter, the level of risk will depend upon which decision-maker will need to be fully informed by the City Attorney.
To help expedite the contract process, therefore, it is important that Departments either utilize the City’s standard contract templates or consult with the City Attorney’s office before procuring services or supplies (if it is apparent there may be contracting challenges from the outset). Common services and supplies that may require City Attorney assistance on the front-end of the procurement process include computer software; public safety equipment; and specialized medical services (e.g., counselors, psychologists, or training).
IX. VALUE OF THE CONTRACT
Different rules apply depending on the total amount of the contract. Generally, the “total amount of the contract” is determined by calculating the amount that would be charged to the City for the entire term of the contract. For example, the total amount of a three- year contract, where the vendor is charging the City $9,000 per year, is $27,000. The “total amount of the contract,” however, may also be related to how much risk is involved with the services or supplies. For example, a contract for a fire dancer may only be $300; but the potential risk to the City may easily exceed $25,000. Therefore, in this scenario, the “total amount of the contract” is more than $25,000.
It is a crime for contracts to be “segmented” for the purpose of evading the procedures established in the Contracting Regulations or this AP&P.
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X. BIDDING AND EXCEPTIONS TO BIDDING
In general, the Contracting Regulations requires the following analysis:
A. Purchases between $3,000 and $60,000. Purchases made for services or supplies with an estimated value between $3,000 and $60,000 are regulated by BMC Chapter 3.28. If a successful vendor fails to execute a contract issued by the City within 10 days after being awarded the contract, the City may cancel the award. Compliance with contract requirements includes, without limitation, submission of insurance documentation. Under this scenario, the responsible Department Director may award the contract to the next lowest-responsible bidder.
B. Purchases greater than $60,000. Services or supplies with an estimated value of more than $60,000 may only be purchased through compliance with the formal bidding requirements. The City’s formal bidding requirements include:
1. Develop Purchase Specifications. To initiate the formal bid process, the requesting Department must develop specifications for the services or supplies to be purchased and prepare bid solicitations.
2. Notice Inviting Bids. The notice inviting bids must generally describe the purpose of the contract; identify security required for the bid (if needed); how bid specifications can be obtained; the form and amount of any required performance bond; and designate the time and place for opening bids. The notice inviting sealed bids must be posted at City Hall and distributed (either electronically or otherwise) at least 10 days before the deadline for submitting bids.
3. Amending the Notice Inviting Bids. If an error has occurred or a change in the requirement is made which requires that the bid solicitation be amended, the Department Director is responsible for making that amendment. Upon making the amendment, the
Is the purchase for
general services (i.e., not
professional services);
equipment, and other
office supplies?
Is the total amount
between $3,000 and
$60,000?
City Manager or
Department Director may
sign contract.
Formal bid required; City
Council approval needed.
Not a “purchase.”
Different procurement
allowed.
Yes
Yes
No
No
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Department Director must immediately notify prospective bidders of the amendment. This information may first be given orally; an amendment to a bid solicitation must always be made or confirmed in writing. Copies must be sent to all parties who received copies of the original invitation. Issuing an amendment may require postponing the opening date for prospective bidders to have reasonable to prepare bids using the new information. Generally, the time of the opening may be postponed by the number of days, which have passed between the date of the invitation and the date of the amendment. The notice of postponement may be combined with the basic amendment.
4. Alternate Bids. In the event that the Purchase specifications cannot be definitively expressed, the solicitation of bids may allow for the submission of alternate bids (generally, alternate bids offer a close substitute). The language in the bid solicitation must be appropriate and sufficiently allow all bidders an equal opportunity to bid on or offer an alternate; otherwise, the bids cannot be accepted. Alternate bids should be considered carefully as they do pose certain disadvantages, including:
Difficulty in determining whether the offered alternate will give the required service.
Bidders not competing on a common basis. This is particularly true if a blanket alternate is allowed. If the City feels that it must allow an alternate, it may permit, whenever possible, alternates on a specific part of the specification and not a blanket alternate.
Alternate bids can only be accepted if they represent a comparable, or better, quality product to that specified. Alternate bids should never be accepted for lower quality products than those specified. Acceptance of alternate bid products must always stand the test of comparability when evaluated by the competition. Comparability must include the product itself, warranty, function, size, etc.
5. Bidder’s Security. The responsible Department Director may require bidders to secure bids and performance in a form approved by the City Attorney. Unsuccessful bidders are entitled to the return of bid security within 60 days after the date of the award.
6. Bid Submittal. The responsible Department Director, or designee, must solicit sealed bids from all prospective bidders whose names are on the bidder’s list, or who have requested their names to be added to the bidder’s list, and any other source known to the Department Director. If no bids are received, the Department Director must notify the City Council at a City Council meeting. -19-
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7. Safeguarding Incoming Bids. All bids received before the bid opening date must be kept in a safe and secure place. Bids either received through the mail or hand delivered by a person, must be date/time stamped in; recorded (on the appropriate bid receipt form); and placed in a file in the responsible Department Director’s, or designee’s, office to be opened at the time and place specified in the bid.
8. Withdrawal of Bids. A bid may be modified or withdrawn by written or telephonic notice from the bidder, if the notice is received before the time set for the opening. In the event a bid withdrawal is requested, the notice should be attached to the bid and the bid held unopened until the time of award. It may then be returned to the bidder unless other disposition is requested or agreed to by the bidder. A bid may not be modified or withdrawn after the opening time and date for opening the bids.
9. Bid Opening Procedure. Bids must be submitted to the purchasing agent in a sealed envelope and be clearly marked as a bid along with the bidder’s name and project number written on the outside of the envelope. The Department Director for the Department responsible for requesting the contract must designate an individual to publicly open properly submitted bids at the time and place stated in the notice inviting bids. A written record and tabulation must be made at the time all bids are received and then opened; this information must be available to the public for inspection during regular City business hours for at least 30 days after the bid opening. No bids may be accepted after the deadline specified in the notice inviting bids. Late bids should be held unopened and returned to the bidder or otherwise disposed of as the bidder requests or agrees.
10. Bid Evaluation & Recommendation to City Council. Bids may be evaluated based upon bid amount, compliance with bid
specifications, responsibility of the bidder, and any other reasonable matter identified in the notice inviting bids, the BMC, or any other rule or regulation promulgated to implement Chapter 3.28. Based upon its evaluation, the requesting Department will make a
recommendation to the City Council regarding the award of a contract (see Section VII of this AP&P regarding vendor selection).
Rejection for Non- conformance. Refer to the RFP template for instructions on rejection for non-conformance.
Entities or individuals may be retained to assist the City in drafting and/or preparing RFPs/RFQs; these
individuals/entities may neither submit an RFP/RFQ nor be selected for the bid award.
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11. Bid Irregularities.
There are occasions when a bid contains irregularities such as incomplete submittals; unsigned bids; qualifications made to the bid; alterations of the Bid Form; submittals on unauthorized forms; or claimed mistakes. Generally, minor irregularities are those that substantially comply with the bid requirements and do not affect the bid price, time, or conditions. Examples include: bids where a unit price is wrong, but the total price is correct; bids where a signature was found on other documents included in the bid package; bids containing erasures; and bids with obvious mathematical errors.
Material irregularities in the form or content of a bid affect the bid price or time and give the bidder making the irregularity an advantage or benefit over another bidder. Examples of material bid irregularities include: failure to list subcontractors; failure to sign the bid; failure to timely submit the bid; and deviations from plans and specifications.
The decision-maker may waive minor irregularities. Material irregularities, however, cannot be waived. Any questions regarding bid irregularities should be referred to the City Attorney’s office for advice on whether the irregularity can be waived.
12. Rejection of All Bids.
The Department Director may reject, in writing, all bids that are unreasonable; determined to be collusive; or where rejection is in the best interest of the City. Examples include (1) before award, if it is determined that the Supplies are no longer needed; (2) if it appears that the specifications should be revised; or (3) if the invitation did not provide for consideration of all factors of cost to the City (e.g., where the cost of transporting City furnished material to the bidder’s plant was not mentioned as a factor in the invitation).
13. City Council Review.
Bids must be submitted to the City Council. Upon submittal and review, the City Council may approve the lowest bidder or reject all bids. In making its determination, the City Council may waive any minor bid irregularities. If the City Council rejects all bids, the item may be re-bid. If the City does not receive any bids, the City Council may abandon the Purchase; authorize rebidding the Purchase on an informal basis; or authorize purchasing the Supplies on a direct negotiated contract.
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Purchasing and Contracting Policy
14. Tie Bids.
If two or more bids received are for the same total amount or unit price – and the quality and service offered are the same – the City Council may accept one of them or accept the lowest bid made by negotiation with the tie bidders at the time of or after the bid opening.
15. Notification to Unsuccessful Bidder(s).
All unsuccessful bidders should be notified that their bids were not accepted. This notification can be accomplished either verbally or in writing. If the bidder responds with a request for additional information about the award it may be furnished with the name and address of the successful bidder together with the contract price.
16. Refusal to Comply With or Failure to Execute Awarded Bid.
If a successful bidder refuses to comply with, or fails to execute, a contract issued by the City within 10 days after being awarded the contract, the City may cancel the award and retain any bid security.
Compliance with contract requirements includes, without limitation, submission of insurance documentation. Should this occur, the City Council may award the contract to the next lowest responsible bidder.
A. Bidding Exception: Cooperative Purchasing. Where the purchasing agent identifies a cooperative competitive bidding procedure, being prepared by and processed through another local, state, and federal governmental agency, the purchasing agent may join into an existing written purchase contract through a competitive bidding process prepared by and awarded by those other agencies. Such contracts for supplies and equipment may include, but are not limited to General Services Administration (GSA), California Multiple Awards Schedules (CMAS), National Association of State Procurement Officials (NASPO) ValuePoint, Sourcewell, HGACBuy, BuyBoard, PEPPM, and other similar government contracts. The cooperative purchasing contract must be incorporated by reference into the City’s contract and filed with the City Clerk’s office.
B. Purchasing supplies.
1. Office supplies. To the extent feasible, paper, toner cartridges, printing supplies, business forms and cards, pens, pencils, stamp, envelopes, folders, binders and other office supplies should be purchased using government contracts (see Cooperative Purchasing above). Otherwise, office supplies, as needed, in the amount of $3,000 or more (up to the budget) may be purchased in the open market with three vendor quotes/price comparisons, or without -22-
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vendor quotes/price comparisons when a particular vendor provides administrative convenience and/or best value for those supplies.
When several different items are being purchased, sampling just top three cost items from each vendor for price comparison is permitted.
2. Other routine supplies should also be purchased using government contracts (see Cooperative Purchasing above). Otherwise, these supplies in the amount of $3,000 or more (up to the budget) may be purchased in the open market with three vendor quotes/price comparisons per fiscal year, or without vendor quotes/price comparisons when a particular vendor provides administrative convenience and/or best value for those supplies. When several different items are being purchased, sampling just top three cost items from each vendor for price comparison is permitted.
XI. SELECTION OF VENDORS
A. Departments are encouraged to maintain the Vendor List. Departments should ensure that vendors are licensed to conduct business in Bellflower (if applicable) and verify that vendors meet other applicable license and insurance requirements before selection.
B. Vendors for Professional Services should be selected based on demonstrated competence, professional qualifications, availability, and fair and reasonable costs.
C. Except as otherwise provided, and notwithstanding the above, contracts may not be executed with a former City employee within one year of the date the former employee terminated his/ her regular employment with the City, unless authorized by the City Manager. This prohibition does not apply when: (1) a request for proposals/quotes has been submitted to at least three other qualified vendors capable of providing the same services/goods; and (2) the services/goods of the former employee are determined to be clearly more advantageous to the City than the services/goods of any other vendor responding to the request for proposals/quotes after considering the qualifications and costs of the former City employee and any other vendors responding to the request for proposals/quotes.
XII. PROVIDING SELECTED VENDORS WITH INFORMATION REGARDING THE CITY’S INSURANCE REQUIREMENTS
It is very important that each vendor be provided with information regarding the kind of liability insurance that the City will require as a condition of the contract with the City. This information should be communicated to the vendor at an early stage of the contracting process and include (1) the type and amount of insurance coverage that will be required as a condition of the contract; (2) the nature of the certificates of insurance; and (3) the nature of the insurance policy endorsement that the vendor will have to produce prior to rendering any services under the contract.
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Purchasing and Contracting Policy
XIII. CONFIRMATION OF FUNDS TO PAY CONTRACT FEES & COSTS
The responsibility for ensuring that there are sufficient funds in the City budget to pay all of the fees and costs of a contract rests with the Department selecting and proposing the contract.
A. Purchasing Methods.
1. Check. Checks may only be processed through the Finance Department.
2. Credit Card. Purchases made using a City-issued credit card must be in accordance with the City’s Credit Card Policy. For credit card Purchases, any Purchase that exceeds the transaction dollar limits, or is outside of the approved commodity or service categories, is unauthorized. Such use of the card may result in disciplinary action up to and including termination and payment for all unauthorized charges.
3. Petty Cash. Petty cash funds are to be used for expenditures that generally do not exceed $50.00. Purchases made using petty cash must be in accordance with the City’s Petty Cash Policy.
B. Payment of Invoice by City. The City will pay vendors within 30 days after it receives an invoice. It is the Department’s responsibility to ensure that vendors understand this policy.
C. Use of Federal Award Funds. Whenever Federal Award funds are used, the criteria in Section XVIII must be followed, unless those rules are updated or supplemented, in addition to the other guidelines in this AP&P.
XIV. PREPARATION OF CONTRACT
A. Contracts Approved as to Form. Contracts submitted by vendors should not generally be used for obtaining Supplies. Using such forms increases the City’s costs because they require review by the City Attorney’s office and could cause a delay in obtaining Supplies. Whenever practicable, the City’s standard forms should be used for purchasing Supplies.
B. Obtaining Signatures. Signature requirements for contracts vary depending on whether a vendor conducts business in the capacity of a corporation, general partnership, limited partnership, or as an individual. Where the contract is with a contractor doing business as a corporation, general partnership or limited partnership, the signature lines should always include the typed-in name and title of the person or persons executing the contract on behalf of the consultant, as well as the business name of the consultant:
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Purchasing and Contracting Policy
1. Where the contract is with a consultant doing business as a corporation, California Corporations Code § 313 requires the contract to be signed by:
One officer from the corporation’s “operational group” consisting of the Chairman of the Board, the President, or any Vice President; and
One officer from the corporation’s “financial group” consisting of the Secretary, or Assistant Secretary, or the Chief Financial Officer or any Assistant Treasurer.
2. Where the contract is with a consultant conducting business as a general partnership or limited partnership, the contract should be signed by a least one general partner having apparent authority to execute the contract on behalf of the partnership.
3. Where the contract is with a consultant doing business in their individual capacity, that individual must sign the contract. The signature lines need only include the typed-in name of the consultant, as well as the consultant’s business name (when the contractor is doing business under a name other than the contractor’s own name).
C. Types of Contracts. Contracts may be of fixed time duration (to cover specific need requirements for a given period of time); fixed expenditure amount (e.g., where “Not to Exceed” a given amount is written to provide a given budgetary financial limitation control on the contract); for a specific quantity (written to provide the exact known quantity needs of an item); or “open” with expenditure limitations to meet unanticipated needs.
XV. SUBMITTING CONTRACTS
A. To City Council. Where a contract must be approved by the City Council, the Department responsible for the contract must place the contract as an item on the agenda for review and consideration by the City Council.
B. To City Clerk. The original contract, including public works contract, together with sufficient evidence of any insurance required, vendor signature verification page, business entity search, or other requirements (Refer to the attached Agreement/Contract and Purchase Order Requisition Guideline) by the contract must be submitted to the City Clerk’s Office by the responsible Department, which is administering the contract, before the time a contractor undertakes performance of the work required by the contract. Upon determining that the contract was properly signed by or on behalf of both the contractor and the City, and that the accompanying evidence of insurance meets the contract’s requirement, the City Clerk’s Office will attest to the execution of the contract. Thereafter, the City Clerk’s Office will assign and type in a clerk’s contract number (“Agreement File -25-
City of Bellflower – AP&P No. 6
Purchasing and Contracting Policy
Number”) on the contracts where indicated, file the original contract and evidence of insurance in the City’s official records, and return a non-original copy to the City officer or Department responsible for administering the contract. The responsible Department will then transmit a copy to the contract vendor.
C. To the Department. The City officer or Department responsible for administering the contract will not direct a vendor to proceed with the work required by the contract until receiving an attested copy of the contract from the City Clerk’s Office. When receiving an attested copy of the contract from the City Clerk, the Department responsible for administering the contract will submit to the Finance Director (i) a copy of the contract, (ii) a copy of an IRS Form W-9 completed by the vendor in the manner required by the contract (if any), and (iii) a City encumbrance in an amount equal to the maximum amount of the compensation that may be paid to the vendor pursuant to the contract. In addition, the responsible Department must submit to the Finance Department sufficient quotes or justification memos validating the vendor chosen for the contract. Copies of purchase orders will be maintained with the corresponding paid vendor invoices.
XVI. CONTRACT AMENDMENTS
Contract amendments include any change, modification or addendum to a contract after it becomes effective. Contract amendments include any change to a contract that is not expressly authorized by the contract itself. Amendments include, without limitation, extensions of the term of the agreement, as well as changes to any exhibit setting forth the scope of the vendor’s duties or the compensation.
Ordinarily, the City Manager may approve amendments to contracts in conformance with the requirements of this AP&P and the Contracting Requirements if the total amount of the agreement1 is not increased to more than $60,000. Department Directors may approve amendments to contracts in conformance with the requirements of this AP&P and the Contracting Requirements if the total amount of the agreement2 is not increased to more than $15,000. For contract amendments where the total amount of the agreement is more than $60,000, City Council authorization/approval is ordinarily required.
Amendments to City contracts must be approved as to form by the City Attorney.
1 Remember, the “total amount of the agreement” includes the costs to the City for the entire term of the contract, including any amendments. For example, the total amount of a two-year contract, where the vendor is charging the City $20,000 per year, is $40,000. However, if the proposed amendment extends this contract for another two years, then the total amount of the contract becomes $80,000. Similarly, the “total amount of the contract” also includes consideration of how much risk is involved with the services or supplies. A high level of risk of liability to the City would “increase” the total amount of the contract and may bring it outside of the City Manager’s or Department Director’s signatory authority and necessitate Council approval. Please consult the City Attorney’s Office if you have any questions.
2 See footnote 3.
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City of Bellflower – AP&P No. 6
Purchasing and Contracting Policy
Amendments to a City contract must also be signed by the vendor and the City Manager and filed with the City Clerk generally in conformance with the same requirement applicable to the original contract.
XVII. RECEIPT OF GOODS
The responsible Department must inspect all received Supplies to verify that quantity and quality are “as specified.” The Department Director must remedy any discrepancy on a contract. All orders must be inspected within three business days of receipt. A Department’s failure to inspect and accept delivery in a timely manner may affect the City’s ability to remedy a situation. Departments must retain any receiving reports/packing lists to retain along with their copy of the contract to document the receipt of goods.
XVIII. FEDERAL PURCHASING REQUIREMENTS
This Policy Section summarizes the Federal Purchasing requirements published by the Office of Management and Budget (OMB) on December 26, 2013. The OMB issued the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Rule (aka Uniform Guidance) which applies to all non-federal entities receiving Federal awards, and to all new federal awards and existing awards that receive additional funding (or funding increments) after December 26, 2014.
Whenever Federal Award funds are used the following criteria must be followed in addition to the City's Purchasing Policy guidelines:
A. Requirements. The Uniform Guidance requirements for sub-award and sub-recipient is based on the pass-through agency. If the pass-thru agency is subject to the Uniform Guidance (i.e., if the source of funds are federal and the pass-through agency is subject to Uniform Guidance), then the sub-award or sub-recipient is also subject to the Uniform Guidance. The requirement for a sub-award, no matter when the sub-award was made, flows from the requirements of the original federal award from the federal awarding agency.
B. Micro Purchases. The maximum aggregated amount for micro purchases is $10,000. The maximum amount for construction projects is $2,000 and is subject to the Davis-Bacon Act (Prevailing Wages). Micro purchases are exempt from the City’s informal and formal bidding processes, so there are no requirements for multiple quotations. To the extent practical the City must distribute micro-purchases equitably among qualified suppliers. Pursuant to 2 C.F.R. § 200.320(a)(1)(iv), a non-Federal entity may self-certify on an annual basis a micro-purchase threshold not to exceed $50,000 and maintain documentation to be made available to a Federal awarding agency and auditors in accordance with 2 C.F.R. § 200.334. Pursuant to 2 C.F.R. § 200.320(a)(1)(iv), such self-certification must include (1) a justification for the threshold, (2) a clear identification of the threshold, and (3) supporting documentation demonstrating a qualification as a low-risk auditee, in accordance with the criteria in 2 CFR 200.520.
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Purchasing and Contracting Policy
C. Small Purchases. Small purchases utilize simple and informal procurement methods. The acquisition threshold is currently $250,000. The Uniform Guidance states quotes for small purchases must be obtained from an “adequate” number of qualified sources. There is no specific number of sources required by the Uniform Guidance, thus one quote can be sufficient as long as there is proper documentation. Quotes can be obtained from suppliers or from public websites (i.e., City may use internet searches as documentation).
D. Sealed Bids. Sealed bids are required for contracts in excess of $250,000 and is the preferred method for construction contracts. Sealed bids are also appropriate for fixed price contracts where bidders are provided complete and adequate specifications. Additionally, sealed bids must come from two or more qualified bidders must be publicly advertised and solicited from an adequate number of suppliers. The contract is awarded to the lowest responsive and responsible bidder.
E. Competitive Proposals. Competitive proposals are required for contracts in excess of $250,000 and is the preferred method for architectural, engineering and Professional Services. Request for Proposals must be publicized and proposals solicited from an adequate number of qualified sources. Competitive proposals are awarded to the most advantageous bid which considers both price and other factors. The City does not have to select the lowest bid.
F. Sole Source. Vendor must meet at least one of the following criteria:
1. The vendor offers a unique supply or service that can only be fulfilled by one vendor or only one known source for the supply/service exists;
2. There is a public emergency;
3. After soliciting a number of sources, the competition is deemed inadequate; and
4. Written request has been made and approved by the federal agency responsible for the grant.
The City must have written pre-approval from the federal awarding agency. Additionally, the City must have proper documentation as to why a sole source vendor was required in these circumstances. The sole source must be properly documented and the City must maintain the documentation.
XIX. VIOLATIONS OF AP&P
The City Manager may revoke purchasing authority from Departments, or particular employees, based upon substantial evidence that such a Department or persons consistently fail to conform to this AP&P.
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City of Bellflower – AP&P No. 6
Purchasing and Contracting Policy
In addition, the BMC makes certain violations of purchasing requirements a misdemeanor (for example, segmentation) that can result in a $1,000 fine, or six months in jail, or both.
Allegations that the BMC or this AP&P were violated may also result in discipline up to and including termination.
APPROVED:
Jeffrey L. Stewart, City Manager
APPROVED AS TO FORM: __________
Karl H. Berger, City Attorney
Origination: November 14, 2022
CERTIFICATION AND RECEIPT OF UNDERSTANDING
I certify that I have received a copy of the City of Bellflower Policy for Purchasing.
I have reviewed and understand its contents and agree to abide by the principles and requirements in these Administrative Policies & Procedures.
Name:
Title:
Date:
-29-
12-B
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Travis Sais, Assistant to the City Manager
SUBJECT: Consideration and possible action to read by title only, waive further reading and introduce Ordinance No. 1420 – An Ordinance adding Section 9.04.110 to the Bellflower Municipal Code (“BMC”) prohibiting unauthorized possession of individual catalytic converters.
DATE: November 14, 2022
EXECUTIVE SUMMARY
Catalytic converter theft continues to be a serious issue and concern for residents and businesses in the City of Bellflower – which is the case for most cities in California.
Surrounding cities such as Lakewood and Artesia have passed similar ordinances that amended their respective municipal codes to make the possession of an uninstalled catalytic converter unlawful. These code amendments reportedly provide law enforcement personnel necessary tools to begin prosecuting these types of crimes.
If passed, Ordinance No. 1420 would help combat catalytic converter theft by: (1) formally establishing zero-tolerance for catalytic converter thefts; (2) establishing sanctions for possessing stolen catalytic converters; and (3) preventing criminals from profiting from the sale and recycling of stolen catalytic converters.
RECOMMENDATION TO CITY COUNCIL
1) Read by title only, waive further reading, and introduce Ordinance No. 1420; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
No fiscal impact with this action.
DISCUSSION
Catalytic converters are an external component of a vehicle, accessible from the underside of a parked car. They convert most of a vehicle’s emissions into less harmful forms, improving air quality and vehicle performance.
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Staff Report – Ordinance No. 1420
November 14, 2022
DISCUSSION – Continued
Catalytic converters contain valuable materials such as platinum and palladium, rare metals that command ever-increasing prices on the recyclables market. Catalytic converter thefts continue to occur due to the ease and undetectable nature of committing such thefts, potentially in a matter of seconds and through the use of common tools such as a reciprocating saw. Furthermore, individuals are incentivized to commit catalytic converter theft because they are able to recycle catalytic converters at scrap metal yards for high dollar returns ranging from $200 to $1,200 per catalytic converter.
In order to combat catalytic converter theft, cities such as Lakewood and Artesia have passed similar ordinances pertaining to the unlawful possession of a catalytic converter.
Lakewood Station Sheriff Captain Dan Holguin stated these ordinances further assist law enforcement in prosecuting catalytic converter theft. Consequently, staff has prepared the attached ordinance for the City Council’s consideration.
ATTACHMENT
Ordinance No. 1420….…………………………..……………………………………………3
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CITY OF BELLFLOWER
ORDINANCE NO. 1420
AN ORDINANCE ADDING SECTION 9.04.110 TO THE
BELLFLOWER MUNICIPAL CODE (“BMC”) PROHIBITING
UNAUTHORIZED POSSESSION OF INDIVIDUAL CATALYTIC
CONVERTERS
THE CITY COUNCIL DOES ORDAIN AS FOLLOWS:
SECTION 1. A new § 9.04.110 is added to the Bellflower Municipal Code (“BMC”) to read as follows:
“9.04.110 Unauthorized Possession of Individual Catalytic Converter Prohibited.
A. It is unlawful for any person to possess an individual catalytic converter without authorization. “Authorization” means any valid documentation confirming that a person may validly possess an individual catalytic converter that substantially includes the information required by Business and Professions Code § 21610(b). This may include, without limitation, a bill of sale or repair invoice.
B. It is unlawful for any person to possess falsified documentation purporting to reflect “authorization” as contemplated by this code.”
SECTION 2. Environmental Review. This Ordinance was reviewed pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regulations §§15000, et seq., the “CEQA Guidelines”). Based upon that review, the Ordinance is exempt from additional environmental review pursuant to CEQA Guidelines § 15061(b)(3). The Ordinance will not result in any development or changes to the physical environment. Following an evaluation of possible adverse impacts, it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment.
SECTION 3. Construction. This Ordinance must be broadly construed in order to achieve the purposes stated in this Ordinance. It is the City Council’s intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance.
SECTION 4. Enforceability. Repeal of any provision of the BMC does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before this Ordinance’s effective date. Any such repealed part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Ordinance.
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City of Bellflower
Ordinance No. 1420
SECTION 5. Validity of Previous Code Sections. If this entire Ordinance or its application is deemed invalid by a court of competent jurisdiction, any repeal or amendment of the BMC or other ordinance by this Ordinance will be rendered void and cause such previous BMC provision or other the city ordinance to remain in full force and effect for all purposes.
SECTION 6. Reliance on Record. Each and every one of the findings and determinations in this Ordinance are based on the competent and substantial evidence, both oral and written, contained in the entire record relating to the project. The findings and determinations constitute the independent findings and determinations of the City Council in all respects and are fully and completely supported by substantial evidence in the record as a whole.
SECTION 7. Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events. In all instances, best efforts have been made to form accurate assumptions. Somewhat related to this are limitations on the City’s ability to solve what are in effect regional, state, and National problems and issues. The City must work within the political framework within which it exists and with the limitations inherent in that framework.
SECTION 8. Severability. If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable.
SECTION 9. Electronic Signatures. Ordinance may be executed with electronic signatures in accordance with Government Code § 16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 10. The City Clerk, or her duly appointed deputy, is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Bellflower’s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.
SECTION 11. Effective Date. This Ordinance will take effect on the 30th day following its final passage and adoption.
///
///
///
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City of Bellflower
Ordinance No. 1420
ORDINANCE NO. 1420 HAD ITS FIRST READING ON NOVEMBER 14, 2022, ITS SECOND READING ON _________, AND WAS DULY PASSED, APPROVED, AND
ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER AT ITS REGULAR MEETING OF ________.
_____________________________________
Ray Dunton, Mayor
ATTEST:
_______________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
_________________________________
Karl H. Berger, City Attorney
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��� pp BELLFZ,��
TO: Honorable Mayor and Members of the City Council
ATTENTION: Jeffrey L. Stewart, City Manager
FROM: Elizabeth Corpuz, Director of Planning and Building Services Jamie Bruccoleri, Building Official
SUBJECT: Consideration and possible action to 1) read by title only, waive further reading and introduce Ordinance No. 1421 — An Ordinance adopting the 2022 Editions of the California Building Code, the California Residential Code, the California Electrical Code, the California Mechanical Code, the California Plumbing Code, the California Energy Code, the California Fire Code, the California Existing Building Code, the California Green Building Standards Code, the California Referenced Standards Code, and the California Building Standards Administrative Code; making certain
amendments based upon local conditions, and amending the Bellflower Municipal Code to reflect such changes; and 2) setting a public hearing for December 12, 2022, for second reading and adoption of the Ordinance.
DATE:
November 14, 2022
EXECUTIVE SUMMARY
The 2022 California Building Standards Code ("CBSC") takes effect on January 1, 2023.
These are part of the uniform codes imposed by the California Legislature every three years via Title 24 of the California Code of Regulations. Health and Safety Code §17955 allows local governments to amend the CBSC based upon local climatic, topographical, and geological conditions, or for administrative reasons.
The Planning Department, including the Building and Safety Division, is proposing amendments to the Bellflower Municipal Code relating to building code regulations for the purpose of complying with State requirements and to update current administrative and technical standards. The last code adoption with amendments to the Bellflower Municipal Code relating to building code regulations was December 9, 2019.
This Ordinance would amend portions of the proposed 2022 CBSC and adopt the 2022 Edition of the CBSC. The most significant changes with the 2022 Edition of the CBSC relate to fire protection, solar photovoltaic power systems, electric vehicle ("EV") charging stations, and the permit expiration timeframe. -1-
Staff Report - 2022 CBSC; Ordinance No. 1421
November 14, 2022
RECOMMENDATION TO CITY COUNCIL
1) Read by title only, waive further reading, and introduce Ordinance No. 1421; and 2) Set a public hearing for the December 12, 2022, City Council Meeting for second reading and possible adoption of the Ordinance; or
3) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
The cost to administer implementation of fihe CBSC is recovered via Building Division permit fees.
PUBLIC NOTICE
For the adoption of uniform codes, state law requires that the second reading of the Ordinance be noticed as a public hearing. Accordingly, if the City Council follows staff's recommendation to set a public hearing for December 12, 2022, legal notice will be published on November 25, 2022, and December 2, 2022, in the Los Cerritos Community News newspaper in anticipation of the upcoming Public Hearing.
ENVIRONMENTAL ASSESSMENT
This Ordinance is exempt from review under the California Environmental Quality Act (Public Resources Code §§ 21000, et seq., "CEQA") and the regulations promulgated thereunder (14 California Code of Regulations §§ 15000, et seq., the "CEQA Guidelines') because it consists only of minor revisions and clarifications to an existing code of construction -related regulations and specification of procedures. These will not have the effect of deleting or substantially changing any regulatory standards or findings.
Accordingly, the Ordinance (by itself) does not have the potential to cause significant effects on the environment. In addition, this Ordinance is an action being taken for enhanced protection of the environment and is exempt from further review under CEQA Guidelines § 15308.
DISCUSSION
The California Building Standards Commission is authorized by the California Building Standards Law (Health and Safety Code §§ 18901 through 18949.31) to administer the processes related to the adoption, approval, publication, and implementation of California's building codes.
California Code of Regulations Title 24, also known as the CBSC, is a compilation of three types of building cri�erp.a from three origins:
• Building standards that have been adopted by state agencies with change from building standards contained in national model codes;
• Building standards that have been adopted and adapted from the national model code standards to meet California conditions; and
_2_
Staff Rep®rt - 2022 CBSC; Ordinance No. 142°1
N®vember 14, 2022
DISCUSSION —Continued
• Building standards, authorized by the California legislature, that constitute extensive additions not covered by the model codes that have been adopted to address particular California concerns.
Since 1989, the Commission has published triennial editions of Title 24 in their entirety.
These building codes are comprised of 12 parts containing the regulations that govern and serve as the basis for the design and construction of all buildings and structures in California.
California law requires that the City Council conduct a public hearing before second reading of ordinances that adopt the CBSC by reference. Staff recommends that the City Council set a public hearing for the second reading of the Ordinance at its December 12, 2022 meeting.
The most significant changes with the 2022 Edition of the CBSC relate to fire protection, solar photovoltaic power systems, electric vehicle ("EV") charging stations, and the permit expiration timeframe. The fire protection and prevention codes have been updated to comply with the NFPA 72 standards, which includes without limitation, photovoltaic power systems, portable fire extinguishers, gas detection systems, and roofing assembly.
Significant changes to the California Green Building Standards Code have been made to EV charging system requirements for residential and commercial projects, which also alters the requirements for the number of parking spaces. All- codes have changed the permit expiration timeframe from 180 days to 12 months from permit issuance.
The recommended action includes amending Title 15 of the Bellflower Municipal Code by adopting the 2022 Edition of the CBSC. In considering such action, the City Council acts in its discretionary legislative capacity (formulating rules that apply to all future cases).
For the proposed amendments, the City Council must find that they are reasonably necessary because of local climatic, geological or topographical conditions (Health and Safety Code § 17958.7). These findings, and the facts upon which they rely, are included within the draft Ordinance.
Projects for which a building permit application and building plans were submitted before the Ordinance's effective date, and for which building permits are obtained within 90 days of the effective date, are exempt from the updated regulations in the the Ordinance.
Should, however, the building permit expire, all building plans must comply with the updated regulations.
ATTACHMENT
OrdinanceNo. 1421.........................................................................................................4 -3-
CITY OF BELLFLOWER
ORDINANCE NO. 1421
AN ORDINANCE ADOPTING THE 2022 EDITIONS OF THE CALIFORNIA
BUILDING CODE, THE CALIFORNIA RESIDENTIAL CODE, THE
CALIFORNIA ELECTRICAL CODE, THE CALIFORNIA MECHANICAL
CODE, THE CALIFORNIA PLUMBING CODE, THE CALIFORNIA ENERGY
CODE, THE CALIFORNIA FIRE CODE, THE CALIFORNIA EXISTING
BUILDING CODE, THE CALIFORNIA GREEN BUILDING STANDARDS
CODE, THE CALIFORNIA REFERENCED STANDARDS CODE, AND THE CALIFORNIA BUILDING STANDARDS ADMINISTRATIVE CODE;
MAKING CERTAIN AMENDMENTS BASED UPON LOCAL CONDITIONS;
AND AMENDING THE BELLFLOWER MUNICIPAL CODE TO REFLECT
SUCH CHANGES
THE CITY COUNCIL DOES ORDAIN AS FOLLOWS:
SECTION 1. Findings. The City Council finds as follows:
A. The City may adopt model codes by reference pursuant to Government Code §§ 50022.2, et seq.;
B. Health and Safety Code § 17958 requires the City to adopt certain codes that are set forth in Health and Safety Code § 17922 and published in the California Code of Regulations;
C. In accordance with Health and Safety Code § 17958.7, it is in the public interest to adopt the most recent codes published by the California Building Standards Commission;
D. Notice of public hearing to consider this Ordinance was published pursuant to Government Code § 6066 and a duly noticed public hearing was held on December 12, 2022, regarding the adoption of this Ordinance; E. Pursuant to § 50022.6 of the Government Code, at least one copy of all codes adopted by reference in this Ordinance were filed with the City Clerk of the City and were available for public inspection for at least 15 days preceding the date of the hearing;
F. Pursuant to Government Code § 50022.9, the City Council intends to adopt by reference, with local amendments, the following 2022 codes in their entirety as if set forth in full herein:
1. The California Building Code, 2022 Edition - Vol. I & II as published in Title 24, Part 2 of the California Code of Regulations;
2. The California Residential Code, 2022 Edition, as published in Title 24, Part 2.5 of the California Code of Regulations;
3. The California Electrical Code, 2022 Edition, as published in Title 24, Part 3 of the California Code of Regulations;
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4. The California Mechanical Code, 2022 Edition, as published in Title 24, Part 4 of the California Code of Regulations;
5. The California Plumbing Code, 2022 Edition, as published in Title 24, Part 5 of the California Code of Regulations;
6. The California Energy Code, 2022 Edition, as published in Title 24, Part 6 of the California Code of Regulations;
7. The California Fire Code, 2022 Edition, as published in Title 24, Part 9 of the California Code of Regulations;
8. The California Existing Building Code, 2022 Edition, as published in Title 24, Part 10 of the California Code of Regulations;
9. The California Green Building Standards Code, 2022 Edition, as published in Title 24, Part 11 of the California Code of Regulations; and
10. The California Referenced Standards Code, 2022 Edition, as published at Title 24, Part 12, of the California Code of Regulations.
SECTION 2. In accordance with Health and Safety Code § 17958.7, the City Council finds that there are local climatic, geographic, and topographic conditions justifying the various local amendments to the California Building Standards Code. The City Council finds and determines that certain building standards established by these Codes are inadequate for use and enforcement in the City of Bellflower because of unique geological conditions prevailing within the City. Such geological conditions affect the potential consequences of soil strength loss due to known liquefaction zones within the City and the nearby location of earthquake faults, resulting in the possibility of tremendous loss of life and structures within the City unless appropriate building standards are adopted. The lessons learned from previous earthquakes, such as the Northridge and Whittier earthquakes, have been refined with studies and tests that have continued since the last code adoption cycle. The results of these studies and tests necessitate adoption of further amendments to the structural requirements of the California Building Standards Code. The proposed structural amendments are detailed in the sections of the Bellflower Municipal Code adopted by this ordinance which amend the California Building Standards Code and California Residential Code. Additionally, the City of Bellflower is a densely populated area within a climate system capable of producing major winds, fire and rain related disasters, including but not limited to those caused by the Santa Ana winds and EI Nino (or La Nina) subtropical -like weather. This region is especially susceptible to more active termite and .wood attacking insects and microorganisms. Los Angeles County and the City of Bellflower are located in a semi -arid Mediterranean type climate which predisposes all fuels, including wood shingles to rapid ignition and spread of fire.
Therefore, there exists a need for additional fire protection measures. The proposed structural amendments are detailed in the sections of the Bellflower Municipal Code adopted by this ordinance which amend the California Building Standards Code. The proposed fire -safety amendments are detailed in the sections of the Bellflower Municipal Code adopted by this ordinance which amend the California Fire Code. —5—
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SECTION 3. Chapter 15.04 of the Bellflower Municipal
amended in its entirety to read as follows:
"Chapter 15.04 BUILDING CODE
15.04.010 Bung Code —Adopted by Reference; Where filed.
Code ("BMC") is
Chapters 1 through 35, and Appendix Chapters B, F, G, H, I, J, and P of California Code of Regulations Title 24, Parts 1 and 2 (the 2022 California Building Code) are adopted by reference as the Building Code of the City of Bellflower.
In accordance with Government Code § 50022.6, one copy of the chapters and appendices must remain on file with the Building Official within the Planning Department and must be at all times maintained by the Building Official for use and examination by the public.
15.04.020 Definition of terms.
Unless the contrary is stated or clearly appears from the context, the following definitions govern the construction of the words and phrases used in this Title. Words and phrases not defined by this chapter have the meanings set forth in the applicable Code as set forth in Title 24 of the Code of California Regulations. If the definition of any term contained in this Title conflicts with the definition of the same term in the applicable Code, then the definition contained in this Title governs.
"Building and Safety Division" means the Building Division, Planning Department of the City of Bellflower.
"Code" or "Codes" means the applicable 2022 code adopted by reference in this Chapter. "Health Office" means the Los Angeles County Department of Health Services.
15.04.030 Resolution of conflicts in application.
In the event of any conflict or ambiguity between any provision contained in the Codes and Title 15, Title 15 will govern.
15.04.040 Administrative Provisions and Amendments.
A. Chapter 1, Division II (Scope and Administration), Section 101 is amended as follows:
SECTION 101 — TITLE, PURPOSE, INTENT AND SCOPE
B. Chapter 1, Division II (Scope and Administration), Sections 101. 1) 101 027 101 Al and 101.4.1 through 104.11 are amended as follows:
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101.1 Title. These regulations may be referred to as the Administrative Provisions of the California Building Codes of the State of California and other Codes as adopted by Title 15 of the Bellflower Municipal Code.
101.2 Scope. The provisions of the codes apply to the construction, alteration, conversion, relocation, enlargement, improvement, replacement, repair, equipment, use and occupancy, location, maintenance, removal and demolition of every building or structure or any appurtenances connected or attached to such buildings or structures.
Exception° Detached one- and two-family dwellings and townhouses not more than three stories above grade plane in height with a separate means of egress, and their accessory structures not more than three stories above grade plane in height, must comply with the California Building Code or the California Residential Code. 101.4 Referenced codes. Codes listed in
referenced elsewhere in the codes are part
prescribed extent of each such reference.
Sections 101.4.1 through 101.4.12 and
of the requirements of the codes to the
101.4.1 Building Code. The provisions of the California Building Code as adopted in § 15.04.040 apply to the construction, alteration, conversion, relocation, enlargement, improvement, replacement, repair, equipment, use and occupancy, location, maintenance, removal and demolition of every building or structure or any appurtenances connected or attached to such building or structure other than those meeting the scoping limitations contained in the California Residential Code. 101.4.2 Residential Code. The provisions of the California Residential Code as adopted in � 15.60.010 apply to the construction, alteration, movement, enlargement, replacement, repair, equipment, use and occupancy, location, removal and demolition of detached one- and two-family dwellings and townhouses not more than three stories above grade plane in height with a separate means of egress and their accessory structures not more than three stories above grade plane in height. 101.4.3 Gas. The provisions of the California Mechanical Code as adopted in § 15.16.010 apply to the installation of gas piping from the point of delivery, gas appliances and related accessories as covered in the code. These requirements apply to gas piping systems extending from the point of delivery to the inlet connections of appliances and the installation and operation of residential and commercial gas appliances and related accessories.
101.4.4 Mechanical Code. The provisions of the California Mechanical Code as adopted in § 15.16.010 apply to the erection, installation, alteration, repair, relocation, replacement, addition to, use, or maintenance of mechanical systems. 101.4.5 Plumbing Code. The provisions of the California Plumbing Code as adopted in § 15.12.010 apply to the erection, installation, alteration, repair, relocation, replacement, addition to, use, and maintenance of plumbing systems.
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10 1.4.6 Energy Code. The provisions of the California Energy Code as adopted in § 15.56.010 apply to the design and construction of buildings for energy efficiency. 101.4.7 Existing Building Code. The provisions of the California Existing Building Code as adopted in § 15.76.010 apply to the repair, alteration, change of occupancy, addition to and relocation of existing buildings.
101. 4.8 Green Bung Standards Code. The mandatory 1400, of the California Green Building Standards Code as adopted in § 15.64.010 apply to the planning, design, operation, construction, use and occupancy of every newly constructed building or structure.
101.4.9 Referenced Standards Code. The provisions of the California Referenced Standards Code as adopted in § 15.80.010 apply to all buildings and structures. 101.4.10 Property maintenance. The provisions of the California Existing Building Code as adopted in § 15.76.010 apply to existing structures and premises; equipment and facilities; light, ventilation, space heating, sanitation, life and fire safety hazards; responsibilities of owners, operators and occupants; and occupancy of existing premises and structures.
101.4.11 Fire Prevention. The provisions of the Fire Code of the City of Bellflower apply to matters affecting or relating to structures, processes and premises from (i) the hazard of fire and explosion arising from storage, handling or use of structures, materials or devices, (ii) conditions hazardous to life, property or public welfare in the occupancy of structures or premises, and (iii) the construction, extension, repair, alteration or removal of fire suppression and alarm systems or fire hazards in the structure or on the premises from occupancy or operation.
101.4.12 Electrical Code. The provisions of the California Electrical Code as adopted in § 15.08.010 apply to the installation and removal of electrical conductors, equipment, and raceways; signaling and communications conductors, equipment, and raceways; and optical fiber cables and raceways for the following: (1) Public and private premises, including buildings, structures, mobile homes, recreational vehicles, and floating buildings; (2) Yards, lots, parking lots, carnivals, and industrial substations; (3) Installations of conductors and equipment that connect to the supply of electricity; and (4) Installations used by the electric utility, such as office buildings, warehouses, garages, machine shops, and recreational buildings, that are not an integral part of a generating plant, substation, or control center.
C. Chapter 1, Division II (Scope and Administration).
Section 102.6 is amended as
follows:
102.6 Existing structures. The legal occupancy of any structure existing on the date of adoption of the codes may continue without change, except as is specifically covered in the codes or as is deemed necessary by the Building Official for the general safety and welfare of the occupants and the public.
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D. Chapter 1, Division 11 (Scope and Administration), Section 103 — Code Compliance Agency, is amended as follows.
SECTION 103 — BUILDINGS AND SAFETY
103.1 [INTENTIONALLY BLANK]
103.2 Appointment. "U Official is appointed by the City Manager, or designee.
More than one Building Official may be appointed by the City Manager, or designee, in hF
s or her discretion.
103.3 Deputies. In accordance with the prescribed procedures of this jurisdiction and with the concurrence of the City Manager, or designee, the Building Official may appoint a deputy Building Official, the related technical officers, inspectors, plan examiners and other agents. Such appointed agents have powers as delegated by the Building Official.
E. Chapter 1, Division II (Scope and Administration), Section 105 —Permits, is amended as follows:
SECTI®N 105 —PERMITS
105.1 Required. Any owner or authorized agent who intends to construct, enlarge, alter, repair, move, demolish, or change the occupancy of a building or structure, or to erect, install, enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system, the installation of which is regulated by the codes, or to cause any such work to be done, must obtain a valid permit from the Building Official.
Work performed without a permit is a misdemeanor. In addition, any such work constitutes a public nuisance and may be abated in accordance with the BMC. 105.1.1 Time -based permit. In lieu of an individual permit for each alteration to an already approved electrical, gas, mechanical or plumbing installation, the Building Official is authorized to issue a permit, valid for a specific time period not exceeding one year, upon application therefore to any person, firm or corporation regularly employing one or more qualified trade persons in the building, structure or on the premises owned or operated by the applicant for the permit.
105.1.2 Permit Records. The Building Official may detail the scope, parameters and conditions of this permit. The permit may be revoked when it is determined by the Building Official that the outlined scope, parameters, conditions or intent of the codes is not upheld by the permittee. The Building Official has access to such records at all times and such records must be filed with the Building Official as designated. 105.2 Work exempt from permit. Exemptions from permit requirements of the codes are not deemed to grant authorization for any work to be done in any manner in violation of the provisions of the codes or any other applicable law or policy. Except when otherwise subject to City review and approval or when otherwise required by State or local laws, regulations or standards, permits are not required for the following:
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Building:
1. One-story defiached accessory structures used as tool and storage sheds, playhouses and similar uses, provided the floor area does not exceed 120 square feet and conforms to the zoning regulations of the BMC.
2. Chain-link, wrought -iron, and similar fences not over 6 feet high.
3. Concrete or masonry block walls not over 5 feet 11 inches in height and wood and similar fences not over 6 feet in height.
4. Retaining walls that are not over 4 feet in height measured from the bottom of the footing to the top of the wall.
5. Light standards which do not exceed 30 feet in height.
6. Flagpoles not erected upon a building and not more than 15 feet high.
7. A tree house provided that:
7.1 The tree house does not exceed 64 square feet in area or 8 feet in height from floor to roof.
7.2 The ceiling height as established by door height or plate line does not exceed 6 feet.
8. Oil derricks.
9. Water tanks supported directly on grade if the capacity does not exceed 5,000 gallons and the ratio of height to diameter or width is not greater than 2:1.
10. Sidewalks and driveways that are not more than 30 inches above adjacent grade, not over any basement or story below, not part of an accessible route and not part of a commercial site.
11. Painting, papering, tiling, carpeting, cabinets, counter tops and similar finish work.
12.Temporary
motion picture, television and theater stage sets and scenery.
13.Prefabricated swimming pools accessory
to a Group R, Division 3 Occupancy in
,which the pool walls are entirely above the adjacent grade and the capacity does not exceed 5,000 gallons.
�,4.Shade cloth structures constructed for nursery
or agricultural purposes, not
including service systems.
15.Swings and other playground equipment.
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16.Canopies or awnings attached to a Group R or U Occupancy and extending not more than 54 inches from the exterior wall of the building.
17.Temporary sheds, office or storage buildings, and other structures incidental to and work authorized by a valid permit during construction activities. Such structures must be removed upon expiration of the permit or completion of the work covered by the permit.
1 S.Non-fixed and movable fixtures, cases, racks, counters and partitions not over 5 feet 9 inches in height.
19.Steel tanks supported on a foundation not more than two feet (610 mm) above grade when the height does not exceed 1.5 times the diameter.
20.Gantry cranes and similar equipment.
21.Bridges not involving buildings.
Electrical:
1. Repairs and maintenance: Minor repair work, including the replacement of lamps or the connection of approved portable electrical equipment to approved per- manently installed receptacles.
2. Radio and television transmitting stations: The provisions of the codes must not apply to electrical equipment used for radio and television transmissions, but do apply to equipment and wiring for a power supply and the installations of towers and antennas.
3. Temporary testing systems: A permit must not be required for the installation of any temporary system required for the testing or servicing of electrical equipment or apparatus.
Gas:
1. Portable heating appliance.
2. Replacement of any minor part that does not alter approval of equipment or make such equipment unsafe.
Mechanical:
1. Portable heating appliance.
2. Portable ventilation equipment.
3. Portable cooling unit.
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4. Steam, not or chilled water piping within any heating or cooling equipment regulated by the codes.
5. Replacement of any part that does not alter its approval or make it unsafe.
6. Portable evaporative cooler.
7. Self-contained refrigeration system containing 10 pounds or less of refrigerant and actuated by motors of 1 horsepower (746 W) or less.
Plumbing:
1. The stopping of leaks in drains, water, soil, waste or vent pipe, provided, however, that if any concealed trap, drain pipe, water, soil, waste or vent pipe becomes defective and it becomes necessary to remove and replace the same with the new material, such work is considered new work and a permit must be obtained and inspection made as provided in the codes.
2. The clearing of stoppages or the repairing of leaks in pipes, valves or fixtures and the removal and reinstallation of water closets, provided such repairs do not involve or require the replacement or rearrangement of valves, pipes or fixtures. 105.2.1 Emergency repairs. Where equipment replacements and repairs are performed in an emergency situation, the permit application must be submitted within the next working busi
wness day to the Building Official,
105.2.2 Public service agencies. A permit is not required for installation, alteration or repair of generation, transmission, distribution or metering or other related equipment that is under the ownership and control of public service agencies by established right. 105.3 Application for permit. To obtain a permit, the applicant must first file an application therefore in writing on a form furnished by the Building Official for that purpose.
Such application must:
1. Identify and describe the work to be covered by the permit for which application is made.
2. Describe the land on which the proposed work is to be done by legal description, street address or similar description that will readily identify and definitely locate the proposed building or work.
3. Indicate the use and occupancy for which the proposed work is intended.
4. Be accompanied by construction documents and other information as required in Section 107.
5. State the valuation of the proposed work.
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6. Be signed by the applicant, or the applicant's authorized agent.
7. Give such other data and information as required by the Building Official. 105.3.1 Action on application. The Building Official will examine or cause to be examined applications for permits and amendments within a reasonable time after filing.
If the application or the construction documents do not conform to the requirements of applicable law, the Building Official must reject such application in writing.
No building permit or other similar applicable permit bearing on property development or use including additions, modifications or revisions may be issued unless and until the review and approval of all other departments and agencies having legal authority for review of construction projects have found the construction project to be in compliance with all applicable code provisions or entitlements.
When the Building Official is satisfied that the proposed work conforms to the requirements of applicable law, the Building Official must issue a permit in accordance with applicable law.
105.3.2 Time limitation of application. An application for a permit for any proposed work is deemed expired 12 months after the completion of any submittal review unless a permit has been issued. The Building Official is authorized to grant one extension of time of an unexpired application for additional periods not exceeding 12 months. The extension must be requested in writing and justifiable cause demonstrated.
For the purpose of this section, contact by a City representative indicating the review is completed is deemed completion of any submittal review. 105.4 Permit issuance. The application, plans, specifications, computations, and other data filed by an applicant for a permit will be reviewed by the Building Official. Such plans may be reviewed by other City officials to verify compliance with applicable law. If the Building Official finds that the work described in an application for a permit and the plans, specifications and other data filed therewith conform to applicable law, and that the specified fees have been paid, the permit must be issued.
When the Building Official issues the permit where plans are required, they must endorse in writing or stamp the plans and specifications. Such approved plans and specifications cannot be changed, modified or altered without authorization from the Building Official, and all work regulated by the codes must be done in accordance with the approved plans. 105.5 Validity of permit. Issuing a permit or approving plans, specifications, and computations cannot be construed to be a permit for, or an approval of, any violation of applicable law. Permits presuming to give authority to violate or cancel the provisions of the codes or other ordinances of the City are not valid.
Issuing a permit based on construction documents and other data does not prevent the Building Official from requiring the correction of errors in the construction document and other data. Any addition to or alteration of approved construction documents must be -13-
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approved in advance by the Building Official, as evidenced by the issuance of a new or amended permit. The Building Official is also authorized to prevent occupancy or use of a structure where in violation of the codes or of any other ordinances of this City. 105.6 Expiration. Every permit issued by the Bung Official under the provisions of the codes will expire by limitation and become null and void if the building or work authorized Dy such permit is not commenced within 12 months from the date of permit issuance, or if the building or work authorized by such permit is suspended or abandoned at any time after the work is commenced for a period of 12 months. Before such work can be commenced or recommenced, a new permit must first be issued. In no event may any permit be extended, nor may any permit be valid, for any period exceeding three (3) years from the original date of issuance.
For the purpose of this section, if an inspection approval is not recorded, the work authorized by the permit is deemed not commenced, suspended or abandoned. (1) Requesting extension of an unexpired permit: Any permittee holding an unexpired permit may apply for an extension of time within which permittee may commence work under that permit when he is unable to commence or recommence work within the time required by this section for good and satisfactory reasons. The Building Official may extend the time for action by the permittee for a period not more than 180 days upon written request by the permittee showing justifiable cause beyond the control of the permittee have prevented action from being taken. Subject to approval of the Building Official, permits extended in this manner do not require additional permit fees. (2) Requesting reissuance of an expired permit: Any permittee holding a permit which has expired may apply for a reissuance of the permit subject to compliance with current regulations and payment of plan check and permit fees. Plans must be resubmitted for plan check.
105.6.1 Expiration of Permit for Unlawful Structure. Notwithstanding any provision of Section 105.6, if a building permit was issued in order to bring an un -permitted structure or other unlawful, substandard, or hazardous condition into compliance with any applicable law, ordinance, rule or regulation, such permit expires by limitation and become null and void 90 days after the date on which the permit was issued. The Building Official may extend the validity of the permit for a period not exceeding 90 days beyond the initial 90 -day limit upon written request by the applicant filed with the Building Official before the expiration date of the original permit.
105.7 Suspension or revocation. The Building Official is authorized to suspend or revoke a permit issued under the provisions of this code wherever the permit is issued in error or on the basis of incorrect, inaccurate or incomplete information, or in violation of any ordinance or regulation or any of the provisions of the codes. 105.E Placement of permit. The building permit or a copy must be kept on the site of the work until the completion of the project.
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105.9 Responsibility. Every person who perForms work for the installation or repair of building, structure, electrical, gas, mechanical or plumbing systems, for which this code is applicable, must comply with the codes.
105.10 Preliminary inspection. Before issuing a permit, the Building Official is authorized to examine or cause to be examined buildings, structures and sites for which an application has been filed.
105.11 Change of contractor or of ownership. A valid permit terminates upon a change of ownership or a change of contractor regarding the building, structure or grading for which said permit was issued if the work is not complete. A new permit is required for the completion of the work. Permit and applicable State fees, will be made for issuing a new permit under such circumstances. If, however, changes have been made to the plans and specifications last submitted to the Building Official, a permit fee based upon the proposed changes may be levied.
105.12 Incomplete construction. When a permit is revoked pursuant to Section 105.7 or abandoned pursuant to Section 105.6, the incomplete construction for which the permit is issued constitute a public nuisance and must be appropriately abated as in accordance with the procedure set forth in Chapter 8.36.
105.13 Surrender of permit. If a portion of the work or construction covered by the issued permit has not been commenced, the permittee may deliver such permit and approved documents to the Building Official with request that such permit is to be canceled. The Building Official will make note on the permit with or with like wording "Canceled at the request of the Permittee." Thereupon the permit and documents become null and void. 105.14 Liens to be discharged. A permit cannot be issued to any person or corporation under the provision of this Title in respect to any property where the cost of any building repair or abatement has been performed and a lien is recorded by the City, unless and until the amount of said lien with interest, has been paid in full.
F. Chapter 1, Division I I (Scope and Administration), Section 107.1, 107.2, 107.3.2, 107.3.3, 107.3.4.1, and 107.5 are amended as follows:
107.1 General. Construction documents, statement of special inspections, geotechnical reports and other data must be submitted in three or more sets, or in a digital formal where allowed by the Building Official, with each permit application. The construction documents must be prepared by a registered design professional where required by the statutes of the City in which the project is to be constructed. Where special conditions exist, the Building Official is authorized to require additional construction documents to be prepared by a registered design professional.
Exception: The Building Official is authorized to waive the submission of construction documents and other data not required to be prepared by a registered design professional -15®
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if the Building Official finds that the nature of the work applied for is such that review of construction documents is not necessary to obtain compliance with the codes. 107.2 Information on construction documents. Construction documents must be dimensioned and drawn upon suitable material. Electronic media documents are permit- ted to be submitted when approved by the Building Official. Construction documents must be of sufficient clarity to indicate the location, nature and extent of the work proposed and show in detail that it will conform to the provisions of the codes and relevant laws, ordinances, rules and regulations, as determined by the Building Official. 107.3.2 Previous approvals. The codes cannot require changes in the construction documents, construction or designated occupancy of a structure for which a lawful permit was previously issued or otherwise lawfully authorized, and the construction of which was pursued in good faith within 180 days after the effective date of the codes, has not been abandoned or the Building Official has not determined the permit was issued under false information.
107.3.3 Phased approval. The Building Official is authorized to issue a permit for the construction of foundations or any other part of a building or structure before the construction documents for the whole building or structure have been submitted, provided that adequate information and detailed statements are filed complying with pertinent requirements of the codes and the BMC. The holder of such permit for the foundation or other parts of a building or structure must proceed at the holder's own risk with the building operation and without assurance that a permit for the entire structure will be granted. 107.3.4.1 Deferred submittals. For the purposes of this section, deferred submittals are defined as those portions of the design that are not submitted at the time of the application and that are to be submitted to the Building Official within a specified period.
Deferral of any submittal items must have the prior approval of the Building Official. The registered design professional in responsible charge must list the deferred submittals on the construction documents for review by the Building Official.
Documents for deferred submittal items must be submitted to the registered design professional in responsible charge who must review them and forward them to the Building Official with a notation indicating that the deferred submittal documents have been reviewed and been found to be in general conformance to the design of the building.
The deferred submittal items must not be installed until the design and submittal documents have been approved by the Building Official.
107.5 Retention of construction
documents. One set of approved construction
documents must be retained by the Building Official for a period of not less than that required by state law and the City's retention policy.
G. Chapter 1, Division II (Scope and Administration), Section 107.6 — Self - Certification Program, is added as follows:
107.6 Self -Certification Program.
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1. Purpose. To expedite building permit approvals by allowing Licensed Design Professionals to voluntarily self -certify building plans.
2. Definitions. Unless the contrary is stated or clearly appears from the context, the following definitions will govern the construction of the words and phrases used in this section:
(a) "Self -certification," "self -certify" or "self -certified" means the submission to the Building Official (i) is made by a Licensed Design Professional identified in the building permit application; (ii) accompanies plans filed with Building Division by that Licensed Design Professional; and (iii) that Licensed Design Professional attests such plans (1) do not contain any false information, (2) are in compliance with requirements of the applicable State and City of Bellflower laws, codes, and regulations, and (3) were prepared by or under the direct supervision of, and signed and stamped by, that Licensed Design Professional. (b) "Licensed Design Professional" means the California Licensed Architect or Engineer, as applicable, identified as such on the building permit application and accompanying plans.
3. Eligible Participants. In order to participate in the Program, applicants must be registered and be in good standing as a Licensed Design Professional with the State of California.
4. Insurance Requirements. For a project to be accepted for Self -Certification, the Licensed Design Professional is required to furnish the Building Official a Certificate of Professional Liability Insurance, issued by an insurer authorized to insure in the State of California. The amount of required coverage will be reasonably determined by the City Manager or his designee; typically, a minimum of $1,000,000, but not less than the valuation of the permitted project.
5. Optional Prescreening Process. The Licensed Design Professional who intends on filing an application with aSelf-Certification may meet with the Building Official, or designee, for a courtesy prescreening of the proposed project to ensure the submittal is complete.
6. Submittal Requirements. The Licensed Design Professional who intends on filing an application with aSelf-Certification must submit that application to participate in the program to the Building Official. Self -certified plans must contain all the information listed in the corresponding City of Bellfilower handout regarding building design criteria. ASelf- Certification form and a "hold harmless" letter, in a form approved by the city attorney, must be completed in its entirety and submitted for each project by the design team and the property owner. The Self -Certification program will be all inclusive, all construction trade work that requires permits for the project must be Self -Certified. Each page of the plans submitted, must be wet stamped and signed by a Licensed Design Professional for each applicable trade.
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7. Non -Building Division Approvals. The Licensed Design Professional who intends on filing an application with a Self -Certification must provide documentation to the Building Official demonstrating final approvals of any applicable City Divisions/Departments, such as Planning, Public Works, and Engineering before permit issuance. That licensed design professional must also provide documentation to the Building Official appropriate approvals of any applicable "outside" agency. Those outside agencies include, without limitation, the following: Los Angeles County Health Department, school districts, Air Quality Management Districts, and Los Angeles County Sanitation District.
8. Fees: All fees set forth in the City's Comprehensive Fee Schedule apply.
9. Permit Issuance. Applications that have met all the criteria of this voluntary Self -Certification program will be issued a building permit the same day of completed and approved application submittal.
10.Inspection Protocol. All code -required State of California or city of Bellflower inspections are required.
11.Audits. All Self -Certified plans are subject to auditing by the Building Official to determine whether plans comply with the applicable State and City of Bellflower laws, codes, rules, and regulations. If plans are found to be in non-compliance, then the Licensed Design Professional who intends on filing an application with a Self -Certification will ensure compliance. If compliance is not obtained within a reasonable amount of time, then the Building Official may report the non-compliance items to the appropriate licensing board with the State of California.
H. Chapter 1, Division II (Scope and Administration), Section 108 —Temporary Structures and Uses, is amended as follows:
SECTION 108 —TEMPORARY STRUCTURES AND USES
108.1 General. The Building Official is authorized to issue a permit for temporary structures and temporary uses. Such permits must be limited as to time of service, but cannot be permitted for more than 12 months. The Building Official is authorized to grant extensions for demonstrated good cause.
108.2 Conform
ance. Temporary structures and uses must conform to the structural strength, fire safety, means of egress, accessibility, light, ventilation and sanitary requirements of the codes as necessary to ensure public health, safety and general welfare.
108.3 Temporary power. The Building Official is authorized to give permission to temporarily supply and use power in part of an electric installation before such installation has been fully completed and the final certificate of completion has been issued. The part covered by the temporary certificate must comply with the requirements specified for temporary lighting, heat or power in the California Electrical Code. -18-
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108.4 Termination of approval. The Building Official is authorized to terminate such permit for a temporary structure or use and to order the temporary structure or use to be discontinued.
I. Chapter 1, Division I I (Scope and Administration), Section 109 —Fees, is amended as follows:
SECTI®N 109 —FEES
109.1 General. A fee as established by resolution of the City Council must be paid for each plan review when submitted and each permit at time of issuance. 109.2 Permit fees. A fee for each required permit must be assessed in accordance with the fee schedule adopted by City Council resolution.
Failure to pay fees and obtain a permit before commencing work is a violation of the codes, except when a program is established by the Building Official and permit conditions are defined, or it can be proven to the satisfaction of the Building Official that an emergency existed which made it impractical to first obtain the permit. A violation will result in an assessment of an investigation fee in an amount equal to the permit fee for the work undertaken without permit. Payment of a double fee does not relieve any person from fully complying with the requirements of the codes nor from any other penalties prescribed herein.
109.3 Permit valuations. The applicant for a permit must provide an estimated permit value at time of application. Permit valuations shall reflect the total value of work, including materials and labor, for which the permit is being issued, such as electrical, gas, mechanical, plumbing equipment and permanent systems. If, in the opinion of the building official, the valuation is underestimated on the application, the permit will be denied, unless the applicant can show detailed estimates to meet the approval of the Building Official. Final building permit valuation must be set by the Building Official. 109.4 Plan review fees. When a plan or other data is ready to be submitted by Section 105.3, aplan-checking fee, in the amount as established by City Council must be paid to the Building Official at the time of submitting plans and specifications for checking. When submittal documents are incomplete or changes so as to require additional plan review or when the project involves differed submittal items an additional fee must be assessed in accordance with the fee schedule established by City Council. 109.5 Investigation fee. An investigation fee as established by Section 109.2 may be charged by the Building Official whenever work for which a permit is required by the codes has been commenced without first obtaining a permit. This fee must be paid and the investigation must be made before the issuance of any permit for said work. An investigation fee may be charged for any investigation of a building, structure, work reports, certification or any other related work requested by an owner or authorized agent of such owner.
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City of Bellflower
Ordinance No. 1421
109.6 Fee Refunds. In the event that an applicant has submitted for plan review or obtained a permit and no portion of the review, work, or construction covered by such permit has been commenced, and such permit is cancelled, the applicant may submit a written request to the Building Official requesting a refund of permit fees. The request must be submitted within one year from the date of cancellation or expiration of the permit.
The Building Official may refund all or a portion of the permit fees to the applicant. 109.7 Change of Occupancy Investigation fee. A fee as established by City Council resolution must be paid when an occupancy investigation inspection is required by the Building Official. Note: The occupancy investigation fees are in addition to other investigation fees and do not include the fees for the building permit, or fees for electrical, plumbing or mechanical permits covering the alterations and/or repairs of the occupancy conversion.
J. Chapter 1, Division II (Scope and Administration), Section 111 —Certificate of Occupancy, is amended as follows:
SECTION 111 —CERTIFICATE OF OCCUPANCY
111.1 Use and occupancy. No building or structure can be used or occupied in whole or in part, and no change in the existing use or occupancy classification of a building or structure or portion thereof can be made until the Building Official has issued a certificate of occupancy therefore as provided herein. The Building Official cannot issue a Certificate of Occupancy to the builder upon the completion of a commercial structure where there is tenant space. Instead, a Certificate of Occupancy is issued to a business entity that is going to occupy the building or a portion thereof. Issuance of a certificate of occupancy must not be construed as an approval of a violation of the provisions of the codes or other ordinances of the City. Certificates presuming to give authority to violate or cancel the provisions of the codes or other ordinances are not valid.
Exception: The Building Official does not issue Certificate of Occupancies for single and duplex residential dwelling units and owner -occupied dwelling units, such as townhomes, condominiums and U occupancies. Certificates of occupancy are not required for work exempt from permits in accordance with Section 105.2.
111.2 Time limitation of application. An application for a certificate of occupancy is deemed abandoned one year after the date of filing, unless such application has been pursued in good faith or a certificate of occupancy has been issued. 111.3 Certificate issued. After the Building Official inspects the building or structure and finds no violations of the provisions of the codes or other laws that are enforced by the City, the Building Official must issue a certificate of occupancy that contains the following:
1. The building permit number.
2. The address of the structure.
3. The name and address of the owner.
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City of Bellflower
Ordinance No. 1421