Citrus Heights City Council Meetings
July 13, 2023

Printed on Recycled Paper
Background and Analysis
The City has been recognized as a Tree City USA by the Arbor Foundation for the last five years.

This recognition stems from the City’s efforts to enhance the urban forest from both a municipal tree and private tree perspective. In 2018, the City initiated the Tree Assistance Program (TAP).

The Program assists in the preservation, protection and enhancement of the City’s 3.6 square miles (2,278 acres) of overall tree canopy. A main component of the program is to provide arboristconsulting services for private property owners interested in preserving and enhancing the existing urban forest.

The City’s contract arborist will visit the requested property and perform an inspection and assessment of one’s trees. A written assessment provides the property owner findings used to make decisions on the immediate and future maintenance of impacted trees. Since the initiation of TAP in May 2018, over 300 property owners have received no-fee arborist services, a service generally costing between $200 - $400 dollars.

The role that trees play in energy conservation, pollution abatement, and stormwater control is highly valued. As an example, a 24-inch oak tree provides $69.00 in yearly energy costs and removes three pounds of pollutants known to cause asthma, coughing, headaches, respiratory and heart disease, and cancer from the surrounding atmosphere1 . In addition to the environmental
benefits, tree canopy contributes to the aesthetic and cultural benefits of the Citrus Heights Community.

Staff recommends continuing the Tree Preservation Program and requests the City Council authorize the execution of a contract with Davey Resources Group to a maximum not-to-exceed amount of $50,000 for the two-year budget cycle, with the option of two one-year extensions (four years total).

Attachments

1. Resolution 2023-__, a Resolution of the City Council of the City of Citrus Heights authorizing the City Manager to execute Agreements with Davey Resource Group for On-Call Arborist Services

2. Consultant Services Agreement

3. Davey Resource Proposal
1 As per the National Tree Benefits calculator
ITEM 9 Page 166
RESOLUTION NO. 2023-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS

AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH DAVEY

RESOURCE GROUP FOR ON-CALL ARBORIST SERVICES
WHEREAS, in 2015, the City conducted the Citrus Heights Urban Greening Strategy which evaluated the City’s urban forest for overall health and condition; WHEREAS, the Citrus Heights Urban Greening Strategy found that the urban forest requires maintenance to continue to thrive and expand,
WHEREAS, in 2018, in efforts to maintain a healthy urban forest, the City began offering arborist services to residential property owners who had questions about a tree(s) maintenance or health needs;
WHEREAS, this arborist service has visited over 300 properties and provided a written assessment, which is used to make a decision on the immediate and future maintenance needs of the property’s tree(s);
WHEREAS, in March 2023, the City circulated a request for proposals for selection of a qualified arborist;
WHEREAS, standard City procurement procedures were followed for selection of the arborist; WHEREAS, the arborist services will be funded utilizing the City’s Tree Mitigation Fund (264- 74-673-43270) and the total expenditure will not exceed $50,000 through June 2025; and WHEREAS, the City now desires to enter into professional services agreement Davey Resource Group, Inc.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED by the City Council of the City of Citrus Heights, the City Manager is hereby authorized to execute an agreement for on-call Arborist Services with Davey Resource Group, Inc. in a form approved by the City Attorney.

The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.

PASSED AND ADOPTED by the City Council of the city of Citrus Heights, California, this 13th day of July 2023, by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:
____________________________________
Tim Schaefer, Mayor
ITEM 9 Page 167
ATTEST:

Amy Van, City Clerk
ITEM 9 Page 168
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 1 of 12

CONSULTING SERVICES AGREEMENT BETWEEN

THE CITY OF CITRUS HEIGHTS AND
Davey Resource Group
(Standard Agreement-DRAFT)
THIS Agreement (“Agreement”) for consulting services is made by and between the City of CITRUS HEIGHTS (“City”) and Davey Resource Group (“Consultant”) (together referred to as the “Parties”) as of July 1, 2023 (the “Effective Date”).

Section 1. SERVICES. Subject to the terms and conditions set forth in this Agreement, Consultant shall provide to City the services described in the Scope of Work attached as Exhibit A, and incorporated herein, at the time and place and in the manner specified therein.

1.1 Term of Services. The term of this Agreement shall begin on the Effective Date and shall end on June 30, 2025. The City has the option to extend th term of the Agreement for two years with final end date of June 30, 2027 unless otherwise terminated.

1.2 Standard of Performance. Consultant shall perform all services required pursuant to this Agreement according to the standards observed by a competent practitioner of the profession in which Consultant is engaged.

1.3 Assignment of Personnel. Consultant shall assign only competent personnel to perform services pursuant to this Agreement. In the event that City, in its sole discretion, at any time during the term of this Agreement, requests in writing the reassignment of any such persons to ensure Consultant performs services in accordance with the Standard of Performance, Consultant shall, immediately upon receiving City’s request, reassign such persons.

1.4 Time. Consultant shall devote such time to the performance of services pursuant to this Agreement as may be reasonably necessary to meet the standard of performance provided herein above and to satisfy Consultant’s obligations hereunder.

Section 2. COMPENSATION. City hereby agrees to pay Consultant a sum not to exceed ________________$( ), as set forth in Exhibit B, attached hereto and incorporated herein for services to be performed and reimbursable expenses incurred under this Agreement.

This dollar amount is not a guarantee that the City will pay that full amount to the Consultant, but is merely a limit of potential City expenditures under this Agreement.

Consultant and City acknowledge and agree that compensation paid by City to Consultant under this Agreement is based upon Consultant’s estimated costs of providing the services required hereunder, including salaries and benefits of employees and subcontractors of Consultant.

Consequently, the parties further agree that compensation hereunder is intended to include the Attachment 2
ITEM 9 Page 169
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 2 of 12

costs of contributions to any pensions and/or annuities to which Consultant and its employees, agents, and subcontractors may be eligible. City therefore has no responsibility for such contributions beyond compensation required under this Agreement.

2.1 Invoices. Consultant shall submit invoices, not more often than once a month during the term of this Agreement, based on the cost for services performed and reimbursable costs incurred prior to the invoice date. Invoices shall contain the following information, unless waived by the City Manager, or his or her designee:
 Serial identifications of progress bills; i.e., Progress Bill No. 1 for the first invoice, etc.;
 The beginning and ending dates of the billing period;  A Task Summary containing the original contract amount, the amount of prior billings, the total due this period, the balance available under the Agreement, and the percentage of completion;
 At City’s option, for each work item in each task, a copy of the applicable time entries or time sheets shall be submitted showing the name of the person doing the work, the hours spent by each person, a brief description of the work, and each reimbursable expense;  The total number of hours of work performed under the Agreement by Consultant and each employee, agent, and subcontractor of Consultant performing services hereunder;
 The Consultant’s signature.

2.2 Monthly Payment. City shall make monthly payments, based on invoices received, for services satisfactorily performed, and for authorized reimbursable costs incurred. City shall pay undisputed invoices that comply with the above requirements within 30 days from the receipt of the invoice.

2.3 Final Payment. Consultant shall submit its final invoice within 60 days of completing its services. Consultant’s failure to submit its final invoice within this 60 day period shall constitute Consultant’s waiver of any further billings to, or payments from, City.

2.4 Reimbursable Expenses. Reimbursable expenses, if any, are specified in Exhibit B and included in the total compensation referenced in Section 2.

Expenses not listed in Exhibit B are not chargeable to, or reimbursable by, City.

2.5 Payment of Taxes. Consultant is solely responsible for the payment of all federal, state and local taxes, including employment taxes, incurred under this Agreement.

2.6 Authorization to Perform Services. The Consultant is not authorized to perform any services or incur any costs whatsoever under the terms of this ITEM 9 Page 170
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 3 of 12

Agreement until receipt of a written authorization from the City Manager, or his or her designee.

Section 3. FACILITIES AND EQUIPMENT. Except as set forth herein, Consultant shall, at its sole cost and expense, provide all facilities and equipment that may be necessary to perform the services required by this Agreement
Section 4. INSURANCE REQUIREMENTS. Before beginning any services under this Agreement, Consultant, at its own cost and expense, shall procure the types and amounts of insurance specified herein and maintain that insurance throughout the term of this Agreement.

The cost of such insurance shall be included in the Consultant’s bid or proposal. Consultant shall be fully responsible for the acts and omissions of its subcontractors or other agents.

4.1 Workers’ Compensation. Consultant shall, at its sole cost and expense, maintain Statutory Workers’ Compensation Insurance and Employer’s Liability Insurance for any and all persons employed directly or indirectly by Consultant in the amount required by applicable law. The requirement to maintain Statutory Workers’ Compensation and Employer’s Liability Insurance may be waived by the City upon written verification that Consultant is a sole proprietor and does not have any employees and will not have any employees during the term of this Agreement.

4.2 Commercial General and Automobile Liability Insurance.

4.2.1 General requirements. Consultant, at its own cost and expense, shall maintain commercial general and automobile liability insurance for the term of this Agreement in an amount not less than $2,000,000 per occurrence and $4,000,000 aggregate, combined single limit coverage for risks associated with the work contemplated by this Agreement.

4.2.2 Minimum scope of coverage. Commercial general coverage shall be at least as broad as Insurance Services Office Commercial General Liability occurrence form CG 0001 (most recent edition) covering comprehensive General Liability on an “occurrence” basis. Automobile coverage shall be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (most recent edition) covering any auto (Code 1), or if Consultant has no owned autos, hired (code 8) and non-owned autos (Code 9). No endorsement shall be attached limiting the coverage.

4.2.3 Additional requirements. Each of the following shall be included in the insurance coverage or added as a certified endorsement to the policy:
a. The Commercial General and Automobile Liability Insurance shall cover on an occurrence basis.

ITEM 9 Page 171
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 4 of 12

b. City, its officers, officials, employees, agents, and volunteers shall be covered as additional insureds for liability arising out of work or operations on behalf of the Consultant, including materials, parts, or equipment furnished in connection with such work or operations; or automobiles owned, leased, hired, or borrowed by the Consultant. Coverage can be provided in the form of an endorsement to the Consultant’s insurance at least as broad as CG 20 10 11 85, or both CG 20 10 10 01 and CG 20 37 10 01. c. For any claims related to this Agreement or the work hereunder, the Consultant’s insurance covered shall be primary insurance as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents or volunteers shall be excess of the Consultant’s insurance and non-contributing. d. The policy shall cover inter-insured suits and include a “separation of Insureds” or “severability” clause which treats each insured separately.
e. Consultant agrees to give at least 30 days prior written notice to City before coverage is canceled or modified as to scope or amount.

4.3 Professional Liability Insurance.

4.3.1 General requirements. Consultant, at its own cost and expense, shall maintain for the period covered by this Agreement professional liability insurance for licensed professionals performing work pursuant to this Agreement in an amount not less than $1,000,000 per occurrence or claim covering the Consultant’s errors and omissions.

4.3.2 Claims-made limitations. The following provisions shall apply if the professional liability coverage is written on a claims-made form:
a. The retroactive date of the policy must be shown and must be before the date of the Agreement.
b. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the Agreement or the work.

ITEM 9 Page 172
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 5 of 12

c. If coverage is canceled or not renewed and it is not replaced with another claims-made policy form with a retroactive date that precedes the date of this Agreement, Consultant must purchase an extended period coverage for a minimum of five (5) years after completion of work under this Agreement.
d. A copy of the claim reporting requirements must be submitted to the City for review prior to the commencement of any work under this Agreement.

4.4 All Policies Requirements.

4.4.1 Submittal Requirements. Consultant shall submit the following to City prior to beginning services:
a. Certificate of Liability Insurance in the amounts specified in this Agreement; and
b. Additional Insured Endorsement as required for the General Commercial and Automobile Liability Polices.

4.4.2 Acceptability of Insurers. All insurance required by this Agreement is to be placed with insurers with a Bests' rating of no less than A:VII.

4.4.3 Deductibles and Self-Insured Retentions. Insurance obtained by the Consultant shall have a self-insured retention or deductible of no more than $100,000.

4.4.4 Wasting Policies. No policy required herein shall include a “wasting” policy limit (i.e. limit that is eroded by the cost of defense).

4.4.5 Waiver of Subrogation. Consultant hereby agrees to waive subrogation which any insurer or contractor may require from Consultant by virtue of the payment of any loss. Consultant agrees to obtain any endorsements that may be necessary to effect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the Consultant, its employees, agents, and subcontractors.

4.4.6 Subcontractors. Consultant shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements ITEM 9 Page 173
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 6 of 12

for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein, and Consultant shall ensure that City, its officers, officials, employees, agents, and volunteers are covered as additional insured on all coverages.

4.4.7 Excess Insurance. If Consultant maintains higher insurance limits than the minimums specified herein, City shall be entitled to coverage for the higher limits maintained by the Consultant.

4.5 Remedies. In addition to any other remedies City may have if Consultant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, City may, at its sole option: 1) obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the Agreement; 2) order Consultant to stop work under this Agreement and withhold any payment that becomes due to Consultant hereunder until Consultant demonstrates compliance with the requirements hereof; and/or 3) terminate this Agreement.

Section 5. INDEMNIFICATION AND CONSULTANT’S RESPONSIBILITIES.

5.1 General Requirement. To the fullest extent permitted by law, Consultant shall indemnify, defend with counsel acceptable to City, and hold harmless City and its officers, officials, employees, agents and volunteers (collectively, “Indemnitees”) from and against any and all liability, loss, damage, claims, expenses, and costs, including without limitation, attorney’s fees, costs and fees of litigation, (collectively, “Liability”) of every nature arising out of or in connection with Consultant’s performance of the services under this Agreement, or its failure to comply with any of its obligations contained in this Agreement, or its failure to comply with any applicable law or regulation, except such Liability caused by the sole negligence or willful misconduct of City.

Acceptance by City of insurance certificates and endorsements required under this Agreement does not relieve Consultant from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to any damage or claims for damages whether or not such insurance policies shall be been determined to apply.

5.2 PERS Indemnification. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing services under this Agreement is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or subcontractors, as ITEM 9 Page 174
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 7 of 12

well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

Section 6. STATUS OF CONSULTANT.

6.1 Independent Contractor. At all times during the term of this Agreement, Consultant shall be an independent contractor and shall not be an employee of City.

6.2 Consultant Not an Agent. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent. Consultant shall have no authority, express or implied, pursuant to this Agreement to bind City to any obligation whatsoever.

Section 7. LEGAL REQUIREMENTS.

7.1 Governing Law. The laws of the State of California shall govern this Agreement.

7.2 Compliance with Applicable Laws. Consultant and any subcontractors shall comply with all laws applicable to the performance of the work hereunder.

Consultant shall also, to the extent required by the California Labor Code, pay not less than the latest prevailing wage rates as determined by the California Department of Industrial Relations.

7.3 Licenses and Permits. Consultant represents and warrants to City that Consultant and its employees, agents, and any subcontractors have, and will maintain at their sole cost and expense, all licenses, permits, qualifications, and approvals of whatsoever nature that are legally required to practice their respective professions. In addition to the foregoing, Consultant and any subcontractors shall obtain and maintain during the term of this Agreement valid business licenses from City.

7.4 Nondiscrimination and Equal Opportunity. Consultant shall not discriminate, on the basis of a person’s race, religion, color, national origin, age, physical or mental handicap or disability, medical condition, genetic information, marital status, sex, sexual orientation, gender or gender identity, against any employee, applicant for employment, subcontractor, bidder for a subcontract, or participant in, recipient of, or applicant for any services or programs provided by Consultant under this Agreement. Consultant shall comply with all applicable federal, state, and local laws, policies, rules, and requirements related to equal opportunity and nondiscrimination in employment, contracting, and the ITEM 9 Page 175
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 8 of 12

provision of any services that are the subject of this Agreement, including but not limited to the satisfaction of any positive obligations required of Consultant thereby.

Section 8. TERMINATION AND MODIFICATION.

8.1 Termination. Upon ten days’ prior written notice, City may cancel this Agreement at any time and without cause upon such written notification to Consultant. In the event of termination, Consultant shall be entitled to compensation for services performed to the effective date of termination; City, however, may condition payment of such compensation upon Consultant delivering to City any or all documents, photographs, computer software, video and audio tapes, and other materials provided to Consultant or prepared by or for Consultant or the City in connection with this Agreement.

8.2 Amendments. The parties may amend this Agreement only by a writing signed by the parties hereto.

8.3 Assignment and Subcontracting. City and Consultant recognize and agree that this Agreement contemplates personal performance by Consultant and is based upon a determination of Consultant’s unique personal competence, experience, and specialized personal knowledge. Moreover, a substantial inducement to City for entering into this Agreement was and is the professional reputation and competence of Consultant. Consultant may not assign this Agreement or any interest therein without the prior written approval of the City Manager, or his or her designee. Consultant shall not subcontract any portion of the performance contemplated and provided for herein, other than to the subcontractors noted in the proposal, without prior written approval of the City Manager, or his or her designee.

8.4 Survival. All obligations arising prior to the termination of this Agreement and all provisions of this Agreement allocating liability between City and Consultant, including but not limited to the provisions of Section 5, shall survive the termination of this Agreement.

8.5 Options upon Breach by Consultant. If Consultant materially breaches any of the terms of this Agreement, City’s remedies shall include, but not be limited to, the following:

8.5.1 Immediately terminate the Agreement;
ITEM 9 Page 176
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 9 of 12

8.5.2 Retain the plans, specifications, drawings, reports, design documents, and any other work product prepared by Consultant pursuant to this Agreement;

8.5.3 Retain a different consultant to complete the work described in Exhibit A not finished by Consultant; or

8.5.4 Charge Consultant the difference between the cost to complete the work described in Exhibit A that is unfinished at the time of breach and the amount that City would have paid Consultant pursuant to Section 2 if Consultant had completed the work.

8.5.5 The remedies mentioned in this Agreement are not exclusive of any other right, power or remedy permitted by law. The City’s failure or delay in exercising any remedy shall not constitute a waiver of such remedy or preclude the further exercise of City’s rights.

Section 9. KEEPING AND STATUS OF RECORDS.

9.1 Records Created as Part of Consultant’s Performance. All final versions of reports, data, maps, models, charts, studies, surveys, photographs, memoranda, plans, studies, specifications, records, files, or any other documents or materials, in electronic or any other form, that Consultant prepares or obtains pursuant to this Agreement and that relate to the matters covered hereunder shall be the property of the City. Consultant hereby agrees to deliver those documents to the City upon termination of the Agreement, and the City may use, reuse or otherwise dispose of the documents without Consultant’s permission. It is understood and agreed that the documents and other materials, including but not limited to those described above, prepared pursuant to this Agreement are prepared specifically for the City and are not necessarily suitable for any future or other use. City and Consultant agree that, until final approval by City, all data, plans, specifications, reports and other documents are confidential drafts and will not be released to third parties by Consultant without prior written approval of City.

9.2 Consultant’s Books and Records. Consultant shall maintain any and all records or documents evidencing or relating to charges for services or expenditures and disbursements charged to the City under this Agreement for a minimum of 3 years, or for any longer period required by law, from the date of final payment to the Consultant to this Agreement. All such records shall be maintained in accordance with generally accepted accounting principles and shall be made available for inspection, audit, and/or copying at any time during regular business hours, upon oral or written request of the City. Pursuant to Government Code Section 8546.7, the Agreement may be subject to the ITEM 9 Page 177
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 10 of 12

examination and audit of the State Auditor for a period of 3 years after final payment under the Agreement.

Section 10 MISCELLANEOUS PROVISIONS.

10.1 Attorneys’ Fees. If a party to this Agreement brings any action, including an action for declaratory relief, to enforce or interpret the provision of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled. The court may set such fees in the same action or in a separate action brought for that purpose.

10.2 Venue. In the event that either party brings any action against the other under this Agreement, the parties agree that trial of such action shall be vested exclusively in the state courts of California in Sacramento County or in the United States District Court for the Eastern District of California.

10.3 Severability. If a court of competent jurisdiction finds or rules that any provision of this Agreement is invalid, void, or unenforceable, the provisions of this Agreement not so adjudged shall remain in full force and effect. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of any other provision of this Agreement.

10.4 No Implied Waiver of Breach. The waiver of any breach of a specific provision of this Agreement does not constitute a waiver of any other breach of that term or any other term of this Agreement.

10.5 Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and shall apply to and bind the successors and assigns of the parties.

10.6 Conflict of Interest. Consultant may serve other clients, but none whose activities within the corporate limits of City or whose business, regardless of location, would place Consultant in a “conflict of interest,” as that term is defined in the Political Reform Act, codified at California Government Code Section 81000 et seq.

Consultant shall not employ any City official in the work performed pursuant to this Agreement. No officer or employee of City shall have any financial interest in this Agreement that would violate California Government Code Sections 1090 et seq.

10.7 Solicitation. Consultant agrees not to solicit business at any meeting, focus group, or interview related to this Agreement, either orally or through any written materials.

ITEM 9 Page 178
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 11 of 12

10.8 Notices. Any notice, demand, request, consent or approval that either party is required to give the other pursuant to this Agreement, shall be in writing and may be given by either (i) personal service, or (ii) certified United States mail, postage prepaid, return receipt requested,. Notice shall be effective upon personal delivery or delivery to the addresses specified below, as reflected on the receipt of delivery or return receipt, as applicable.

Consultant : __________________
__________________
__________________
__________________
City: City of Citrus Heights
6360 Fountain Square Drive
Citrus Heights, CA 95621
ATTN: City Manager

10.9 Professional Seal. Where applicable in the determination of the City Manager, or his or her designee, the first page of a technical report, first page of design specifications, and each page of construction drawings shall be stamped/sealed and signed by the licensed professional responsible for the report/design preparation. The stamp/seal shall be in a block entitled “Seal and Signature of Registered Professional with report/design responsibility.”

10.10 Integration. This Agreement, including the scope of work attached hereto and incorporated herein as Exhibits A and B represents the entire and integrated agreement between City and Consultant and supersedes all prior negotiations, representations, or agreements, either written or oral. To the extent there are any inconsistences between this Agreement, the Exhibits, and Consultant’s proposal, the Agreement shall control To the extent there are any inconsistences between the Exhibits and the Consultant’s Proposal, the Exhibits shall control.

Exhibit A Scope of Services
Exhibit B Compensation Schedule

10.11 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

10.12 Construction of Agreement. Each party hereto has had an equivalent opportunity to participate in the drafting of the agreement and/or to consult with legal counsel. Therefore, the usual construction of an agreement against the drafting party shall not apply hereto.

ITEM 9 Page 179
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 12 of 12

10.13 No Third Party Beneficiaries. This Agreement is made solely for the benefit of the parties hereto, with no intent to benefit any third parties.

SIGNATURES ON FOLLOWING PAGE
The Parties have executed this Agreement as of the Effective Date.

CITY OF CITRUS HEIGHTS CONSULTANT
____________________________ ______________________________ Ashley J. Feeney, City Manager [NAME, TITLE]
Attest:
____________________________
Amy Van, City Clerk
Approved as to Form:
____________________________
Ryan R. Jones, City Attorney
ITEM 9 Page 180
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 1 of 3

EXHIBIT A

SCOPE OF SERVICES
ITEM 9 Page 181
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 2 of 3

EXHIBIT B

COMPENSATION SCHEDULE
ITEM 9 Page 182
Consulting Services Agreement between [EFFECTIVE DATE]
City of Citrus Heights and ______________ Page 3 of 3

CERTIFICATE OF COMPLIANCE WITH LABOR CODE § 3700
I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.

CONSULTANT
By:

Title: 2699908.6
ITEM 9 Page 183
Proposal
On-Call Arborist Support Services
Prepared For:

The City of Citrus Heights
Alison Bermudez, Senior Planner
City of Citrus Heights
6360 Fountain Square Drive
Citrus Heights, CA 95621
Sent via email to
[email protected]
Prepared By:

Anne Fenkner
Project Developer
Davey Resource Group, Inc.
295 South Water Street
Kent, Ohio 44240
Phone: (916) 214-5908
E-mail: [email protected]
April 13, 2023
ITEM 9 Page 184
Table of Contents
Overview…………………………………………………………………...…. 1
Approach
About Davey Resource Group, Inc………………………………………… 2
Urban Forest Experts
Quality of Service
A Trusted Partner and Supporter of Arboriculture
Scope of Work………………………………………………………………. 5
Key Personnel ………………………………………………………………. 6
Lori Murphy, BCMA, RCA
Emily Spillett. Northern California Area Manager
Similar Contract Experience ………………………………………………. 7
Price Proposal ……………………………………………………………… 10
Terms, Conditions and Limited Warranty …………………………….. 11 Overview
Trees are part of everyday life in the City of Citrus Heights. The city’s urban forest creates a sense of place and supplies real benefits to those who live in Citrus Heights. Trees along streets, in parks, around playgrounds, and in backyards provide shade and beauty and enhance the quality of life in Citrus Heights by bringing natural elements and wildlife habitats into urban settings. Trees also moderate temperatures, reduce air pollution and energy use, improve water quality, and promote human health and well-being. Davey Resource Group, Inc. “DRG” understands the benefits trees bring to your community. We also realize the challenges that come with managing public trees.

DRG recognizes the City of Citrus Heights seeks a contractor to manage the city “Tree Assistance Program.”. The person managing the project must hold certifications as an ISA Board Certified Master Arborist (BCMA) and Registered Consulting Arborist (RCA), and have past experience working in a municipal setting. A main component of the scope of work will be to provide arboriculture consulting services for private property owners throughout the City and work with staff and other interested community groups on programs and tree planting projects that promote the City’s tree canopy. The initial contract will run through June 2025 with an option for a two-year extension (June 2027).

Approach
DRG has a history of service to the City of Citrus Heights. If given the opportunity to contract again, we will refresh our relationship with a pre-project meeting. This meeting will serve a number of purposes. The first priority will be to review and confirm the project scope of work and timelines. We will discuss expectations, quality assurance standards, and other aspects of project management. DRG will review the municipal code related to trees and the infrastructure in which they grow. It is our intent to be well prepared going into the contract.

Davey Resource Group

ITEM 9 Page 185
Within the contract scope of work, DRG expects to provide the following services:
● Guide city residents on policies and procedures related to urban forestry, tree preservation. ● Offer professional recommendations to improve tree health and safety. This may include meeting residents at their home, partnering with the Sacramento Tree Foundation, or consulting with the development community prior to and during construction related to trees. ● Enhance and/or protect existing tree canopy by providing professional recommendations to city residents to understand the value of and care for existing trees
● Communicate to the community the benefits of a healthy urban canopy, in terms of aesthetic impact, resource conservation, energy conservation, streetscape enhancement, etc. ● Tree placement guidance – provide guidance to property owners and residents interested in installing and growing new trees.
● Arborist Report Service –provide property owners with an Arborist Report that satisfies the reporting requirement of the City’s Tree Preservation and Protection regulations. ● Achieve or implement City programs and objectives (e.g., General Plan, Greenhouse Gas Reduction Plan, Citrus Heights Urban Greening Strategy, SMUD’s Shade Tree Program, redevelopment projects, additional trees for parks and schools)
● Provide expertise in researching grant opportunities for urban forest projects, and assist with preparation of applications and administration of awarded grants.
● Meet with City staff to review project progress and deliverables.

About Davey Resource Group, Inc.

For 30 years, DRG has provided arboriculture expertise throughout the United States. We know that quality data and assessment are critical to helping you manage your urban forest proactively and better mitigate tree-related risk. Since you rely on the contracted arborist's findings and recommendations to make important decisions, DRG uses only qualified, experienced staff who are knowledgeable of both industry standards and the municipal work environment; and familiar with the City of Citrus Heights.

Davey Resource Group, Inc. (DRG) is a wholly-owned subsidiary of The Davey Tree Expert Company, which was established in 1880. Davey Tree employs more than 11,000 people in North America and is recognized as the eighth-largest employee-owned company in the nation. Our services range from residential and commercial tree care to utility, safety, academic, and technological research, and natural resource consulting, protection, and planning. DRG employs 1894 full-time permanent employees.

Our work throughout North America is a testament to our stability as a company, our capacity to successfully complete projects, and the resources we have available. We provide services to cities large and small and work with each municipality to develop inventory and resource assessment projects that fit specific needs and budgets.

Davey is a company that values our people, our clients, and the communities in which they live. Our trustworthiness and reliability have contributed to our reputation for quality services and a desirable company to work with. Consequently, our list of satisfied customers is extensive. By choosing DRG, Citrus Heights will benefit in the following ways:

Davey Resource Group

ITEM 9 Page 186
● Leverage the Company with the most Experience and Expertise: The City of Citrus Heights can leverage our vast network, experience, and expertise to receive a customized approach using industry best management practices and innovative solutions.
● We are committed to creating value: Our arborists, GIS specialists, and urban forestry professionals have a deep understanding of their expertise. They are attuned to nuances in data and present the training, vocation, practice, and experience to interpret its meaning. ● We collaborate. Public understanding and participation are essential in urban forestry planning. The DRG team is looking forward to working with the Sacramento Tree Foundation to facilitate community engagement in caring for the canopy within the City of Citrus Heights. ● Our people are invested in your success: Our employees are committed to the idea of improving our communities through trees and urban forestry; as demonstrated by DRG’s 6 years of service to the City of Citrus Heights. As an employee-owned company, our employees are committed to the success of each client and project. We are reliable and deliver on time and on budget.

Urban Forest Experts
DRG’s team is your committed partner for natural resource planning and management. We understand the complex ecosystems, resource challenges, and regulatory concerns that impact the success of any city, and we leverage our expertise to deliver reliable, environmental consulting services. We combine the latest technologies with time-tested techniques to provide high-quality results in a timely and professional manner.

Quality of Service
DRG will provide extensive information with the following processes to ensure that the following quality expectations are met and exceeded:

Training - Quality operations are intended to ensure quality service. The DRG Certified Arborist will participate in training and certification as required by State and City Regulations. DRG employees receive annual ethics and harassment training and car driving standards. The DRG Operations Manager will ensure all personnel training associated with this contract aligns with City Standards.

Professionalism – Our personnel follow all Davey, OSHA and ANSI standards. Our staff will represent the City honorably in tenor, presentation and content. DRG personnel will dress appropriately to the City’s cultural standards and will wear an identification badge to distinguish themselves as a Davey employee contracted by the City. Ordinance compliance, fees and regulations often generate impassioned comments. DRG personnel are level-headed, kind and courteous when responding to public commentary regarding their activities, yet implement strategies to politely stay engaged in their work.

Communications – In serving the community, we anticipate the On-Call Certified Arborist will balance her time between communicating with city staff, conducting community site visits and writing reports.

DRG will provide a computer and mobile phone so the On-Call Arborist will have the ability to Davey Resource Group

ITEM 9 Page 187
communicate by way of voice, email and instant messaging. The team is committed to responding to information requests the same day or the next business day with a call or email. They will attend and participate in monthly coordination meetings and specially called meetings through the progress of the work. Reports will be completed electronically so that all communications have a permanent record of requests, correspondence and outcomes.

Documentation and recordkeeping practices - Prior to implementing the contract, the DRG Operations Manager will meet with appropriate City staff to develop a matrix for tracking counter visits, permit requests and reviews, site visits, compliance checks, post project audits, community outreach and other deliverables. A meeting calendar will be identified to review work requests, compliance measures, and departmental communication outcomes to ensure the contract is performing as intended. The Operations Manager will collaborate with the City Operations and Maintenance Manager or the City Operations and Maintenance Manager’s designee to develop a baseline for acceptable outcomes for this contract. The On-Call Arborist will provide weekly updates of services provided in the format preferred by the City of Citrus Heights.

Project Neutrality - The urban forestry community in the Sacramento area is a tight knit community. We see each other frequently at California Urban Forest Council and California ReLeaf meetings, as well as other professional advancement workshops and infrastructure meetings. Many of us serve on land use, transportation, non-profit urban forestry and parks and recreation boards and committees. For years we have worked together to advance the science and collective benefits of the regional urban forest. Given DRG’s significant and influential role in urban forest management solutions, it is likely our staff will have professional awareness of, and possible professional relationships with firms and/or individuals who submit proposals in response to tree maintenance contracts and other RFPs being developed. If selected for this contract, DRG will treat all City customers and stakeholders equally based on BMPs and program compliance. Our contractual role will be to serve as an extension of the City of Citrus Heights. We will conduct all project activities with neutrality, respect and professionalism. DRG welcomes the opportunity to discuss and design quality assurance strategies with the City staff to confirm and validate our professionalism on all levels of serving the City of Citrus Heights.

A Trusted Partner and Supporter of Arboriculture
Davey is a trusted partner of the United States Department of Agriculture (USDA) Forest Service and thArbor Day Foundation, and a long-time supporter of the ISA and its local chapters. Davey is a founding partner with the USDA Forest Service of the i-Tree software.

Davey staff helped to develop and revise the American National Standards Institute (ANSI) standards for arboriculture, including tree risk assessment and drafted some of ISA’s best management practices. Davey also works with the Tree Care Industry Association (TCIA), as safety is priority one for the Davey Company.

Recently, DRG created the Urban Forest Program Continuum to help our clients gauge and grow their tree management programs.

Davey Resource Group

ITEM 9 Page 188
Davey Resource Group has proven solutions to help the City of Citrus Heights advance its program forward along the Urban Forest Continuum.

Scope of Work
Within the scope of this contract DRG personnel will:
● Provide on-site consultation to city residents, including recommendations for tree removal or maintenance.
● Report on tree conditions, both orally and in written form, and provide an accurate and detailed assessment of trees' species, size, health, evaluation of root conditions, structure, and risk factors.
● Provide pest and disease diagnostics and provide protection strategies from the physical stresses of construction.
● Provide root damage mitigation options.
● Provide photographic documentation as needed.
● Work with the Community Development Department to review and comment on development plans and tree planting standards.
● Advise on the use of accepted tree care standards and BMPs. ● Advise staff on all matters related to tree plantings and removals for all street trees and trees in public areas, provide sound solutions for view disputes and review appeals regarding tree removals, plantings, trimming and pruning. ● Act in an advisory capacity to the City's Commissions, City Council, City Manager and City staff.
● Advise staff on policies, standards, guidelines, and regulations for street trees and other public trees located within City-owned spaces.

Davey Resource Group

ITEM 9 Page 189
Key Personnel
We are pleased to re-introduce DRG and our team of urban forest experts to the City of Citrus Heights; as well as present our qualifications for providing arborist consulting services. Our teams’ credentials include International Society of Arboriculture (ISA) Certified Arborists, with advanced Tree Risk Assessment Qualified (TRAQ) credentials, ISA Board Certified Master Arborist, and Registered Consulting Arborist. Our team presents the knowledge, certifications, and training required to address all aspects of Citrus Heights’s tree and urban forestry assessment needs on time and within budget while exceeding the City’s expectations.

Lori Murphy | Master Arborist
Lori Murphy has been with DRG since 2009 and serves
as a Consulting Arborist for the Western Region. She
has acted as field lead on many of DRG’s municipal
inventories, urban tree risk assessments, and the
monitoring of construction and tree-protection plans.

She currently serves the City of Rancho Cordova as the
City Arborist, providing approximately 20 hours or less as the City’s arboricultural expert. She presents
experience in pest and disease diagnostics and solutions, tree risk assessment and reporting, staff and municipal leadership level advisory, and urban forestry solutions.

Lori resides in Orangevale and is a well-known and
respected arborist.

She has been active with the U.C. Cooperative Extension Master Gardeners since 1999, diagnosing problems with landscapes and pests at plant clinics and presenting proper pruning and pest management techniques.

Prior to working with DRG, Lori worked with the Sacramento Tree Foundation as a community forester.

There, she worked with homeowners, businesses, and municipalities, siting trees in appropriate locations and teaching proper tree planting, pruning, and cultural care. She has organized tree planting events and led tree tours. Lori has maintained her relationship with the Sacramento Tree Foundation by serving on the volunteer technical advisory committee. Lori is an ISA Board Certified Master Arborist and Municipal Specialist (WE-7844BM), ASCA Registered Consulting Arborist (RCA #780), and holds ISA Tree Risk Assessment Qualification (ISA TRAQ) certification.

Davey Resource Group

ITEM 9 Page 190
Emily Spillett | Northern California Area Manager
Emily Spillett ensures quality operations of all DRG urban forestry projects in Northern California. She has managed significant and numerous urban forestry projects throughout California and the Western states. Ms. Spillett’s leadership includes customized solutions unique to each client and coordinating the wide variety of resources Davey has to offer. In this position, her role is to ensure client satisfaction, strong communication, and adherence to project scope and timeliness. Emily Spillett works with many municipalities and has managed over 100 urban forestry projects that have included inventories, numerous management plans, and unique consulting projects. These projects have been completed on time, within budget, and to the satisfaction of Davey’s clients.

Ms. Spillett holds a Bachelor of Science degree in Environmental Forest Biology from the State University of New York College of Environmental Science and Forestry. She is the former president of the Board of the California Urban Forest Council and is a member and volunteer for the Western Chapter of the International Society of Arboriculture.

Similar Contract Experience
Davey Resource Group has completed countless consulting projects throughout the country. The following contractual overviews are examples of work that closely correlate with City of Citrus Heights on-call arboriculture needs. Our projects were completed within their estimated budget and with the highest quality results or are currently active. Support for these clients is managed with weekly production reporting to the program manager to ensure cost control.

More than just a company with extensive experience, DRG values relationships. We value our people, our clients, and the communities in which they live. This approach has resulted in a long list of satisfied customers who can attest to DRG's excellence in arboricultural care. In addition to our history as the City of Citrus Heights arborist, we proudly present five contract overviews from our work in Northern California, which serve as examples of successful and high-quality projects. We welcome the opportunity to share a complete list of clients and the capacity in which we support their goals and objectives.

City of Rancho Cordova, California
Services Provided: Davey Resource Group performs various professional arboricultural services for the City of Rancho Cordova including residential site visits, serving as a community liaison in coordination with the Sacramento Tree Foundation, tree risk assessments, planning review, report writing, etc.

Client Project Manager:

Steve Harriman |Operations and Maintenance Manager
Rancho Cordova City Hall
2729 Prospect Park Drive
Davey Resource Group

ITEM 9 Page 191
Rancho Cordova, CA 95670
(916) 851-8716| [email protected]
Davey Resource Group staff | Responsibilities
Lori Murphy serves the role of City Arborist and Urban Forestry Manager on behalf of the City of Rancho Cordova. Davey Resource Group staff maintain a desk within the City Hall and serve as the professional services liaison between the City and the community it serves. Within this role, Davey Resource Group consulting staff manage and coordinate the planting, maintenance, removal, and preservation/protection of public trees. This includes
● Administer the city’s Tree Preservation Ordinance and permit system. ● Work in coordination with the Sacramento Tree Foundation to educate the public and grow the city tree canopy.
● Guide Sacramento Tree Foundation staff on planning and implementation of tree planting projects to meet tree care standards and industry Best Management Practices (BMP’s). ● Advise city and Sacramento Tree Foundation staff on policies, standards, guidelines, and regulations for street trees and other public trees located within City owned spaces. ● Provide on-site consultation to city residents, including recommendations for tree removal or maintenance.
● Work with the Community Development Department to review and comment on development plans and tree planting standards.
● Administer tree pruning and removal permits.
● Provide expertise in researching grant opportunities for tree planting projects, and assist with preparation of applications and administration of awarded grants. ● Act in an advisory capacity to the City’s Commissions, City Council, City Manager, and City staff
City of Davis, California
Services Provided: Technical advanced arborist advisement and reports to address public and private trees.

Client Project Manager:

Charlie Murphy | City Forester
Department of Public Works
1717 5th Street, Davis, CA 95616
530.757.5633 |[email protected]
Scope of Work:
● Report on tree conditions, both orally and in written form, and provide an accurate and detailed assessment of trees’ species, size, health, evaluation of root conditions, structure, risk factors, and monetary value
● Provide pest and disease diagnostics and provide protection strategies from the physical stresses of construction
● Provide root damage mitigation options
● Review planning applications for urban forestry aspects Davey Resource Group

ITEM 9 Page 192
● Advise staff on all matters related to tree plantings and removals for all street trees and trees in public areas, provide sound solutions for view disputes and review appeals regarding tree removals, plantings, trimming and pruning
● Act in an advisory capacity to the City’s Commissions, City Council, City Manager and City staff
● Advise staff on policies, standards, guidelines, and regulations for street trees and other public trees located within City-owned spaces
● Assist with Community Tree Planting Projects-Work with city staff, community stakeholders, and the Davis Tree Foundation on the planning and implementation of tree planting projects.

City of Menlo Park, California
Services Provided: Davey Resource Group serves as the professional technician to represent the protection and care of trees during all phases of construction. This includes validating and authorizing heritage tree removal and prescribed tree replacements.

Client Project Manager:

Joanna Chen |Management Analyst
City of Menlo Park Public Works
701 Laurel St., Menlo Park, CA 94025
650-330-6764 | [email protected]
Davey Resource Group staff | Responsibilities
The Davey Resource Group team reviews and evaluates development plans, tree preservation, and care strategies during construction, performs site surveys to evaluate tree health, identifies preservation potential, and determines critical root zones for trees that may be impacted by construction. Davey Resource Group provides on-site consultation for site developers and landscape architects to help preserve tree resources during construction. Our Arborist serves as a liaison to the City and works closely with architects and site developers to ensure protecting trees is “part of the plan” by communicating applicable tree preservation policies and construction site monitoring.

City of Saratoga, California
Services Provided: Services include tree health and tree risk assessment, mitigation recommendation, and development review.

Client Project Manager:

Debbie Pedro | Community Development Director
13777 Fruitvale Avenue Saratoga, CA 95070
408.868.1231 [email protected]
Davey Resource Group

ITEM 9 Page 193
Davey Resource Group Responsibilities:

A Davey Resource Group Consulting Arborist performs various duties for the County Department of Public Works which maintains the County Landscape Special Districts and Public Trails. Services include tree inventory and management plans, tree risk assessment, and tree health inspections. Each project includes a full report with maps and documentation.

Contra Costa County, California
Services Provided: Services include tree inventory and management plans, tree risk assessment and mitigation recommendations, and tree health inspections.

Client Project Manager:

Victoria Skerritt, Department of Public Works
255 Glacier Drive, Martinez, CA 94553
925-313-2272 | [email protected]
Davey Resource Group Responsibilities: A Davey Resource Group Consulting Arborist performs various duties for the County Department of Public Works which maintains the County Landscape Special Districts and Public Trails. Services include tree inventory and management plans, tree risk assessment, and tree health inspections. Each project includes a full report with maps and documentation.

Price Proposal:

DRG rates for On-Call Arborist services are inclusive of all vehicle, equipment, and administrative incidentals including travel time required to support contract arborist services for the City of Citrus Heights. DRG does not charge extra for evening, overtime, or weekend work. The minimum charge time is two (2) hours. Given our on-call arborist contractual experience with other local municipalities, we can anticipate most on-call events taking approximately 4-5 hours inclusive of travel, meeting time, evaluation, and report writing. Specifically, our experience conducting an assessment of 5 trees or less is 3.5 hours of time.

If selected for this contract, DRG will encourage the City of Citrus Heights to group work requests to maximize the arborist’s time for optimum efficiency. We welcome the opportunity to discuss our assumptions and are willing to modify our pricing and staff alternatives to best meet the needs of the City of Citrus Heights. We welcome further discussion of this rate to meet your needs and expectations.

ISA Board Certified Master Arborist/ RCA
July 2023 - June 2024 ………………………………….$100/Hour
July 2024 -June 2025 …………………………………..$107/ Hour
ISA Certified Arborist
July 2023 - June 2024 ………………………………….$115/Hour
July 2024 -June 2025 …………………………………..$122/ Hour
Davey Resource Group

ITEM 9 Page 194

TERMS AND CONDITIONS
● All pricing is valid for 30 days from the date of this proposal, after which time we reserve the right to amend fees as needed.
● Time and materials (T&M) estimates may fluctuate and will be billed accordingly. Fixed fee contract prices will be billed as shown.
● Invoicing will be submitted monthly for work performed, unless otherwise agreed upon. ● Payment terms are net 30 days.
● If prevailing wage requirements are discovered after the date of this proposal, we reserve the right to negotiate our fees.
● The client is responsible for any permit fees, taxes, and other related expenses, unless noted as being included in our proposal.
● The client shall provide 48 hours' notice of any meetings where the consultant’s attendance is required.
● Unless otherwise stated, one round of revisions to deliverables is included in our base fee.

Additional edits or revisions will be billed on a time and material (T&M) basis. ● All reports are provided only to the client unless otherwise directed.

LIMITED WARRANTY
Davey Resource Group, Inc. ( “DRG”) provides this limited warranty ( “Limited Warranty”) in connection with the provision of services by DRG (collectively the “Services”) under the agreement between the parties, including any bids, orders, contracts, or understandings between the parties (collectively the “Agreement”).

Notwithstanding anything to the contrary in the Agreement, this Limited Warranty will apply to all Services rendered by DRG and supersedes all other warranties in the Agreement and all other terms and conditions in the Agreement that conflict with the provisions of this Limited Warranty. Any terms or conditions contained in any other agreement, instrument, or document between the parties, or any document or communication from you, that in any way modifies the provisions in this Limited Warranty, will not modify this Limited Warranty nor be binding on the parties unless such terms and conditions are approved in a writing signed by both parties that specifically references this Limited Warranty.

Subject to the terms and conditions set forth in this Limited Warranty, for a period of ninety (90) days from the date Services are performed (the “Warranty Period”), DRG warrants to Customer that the Services will be performed in a timely, professional and workmanlike manner by qualified personnel.

To the extent the Services involve the evaluation or documentation (“Observational Data”) of trees, tree inventories, natural areas, wetlands and other water features, animal or plant species, or other subjects (collectively, “Subjects”), the Observational Data will pertain only to the specific point in time it is collected (the “Time of Collection”). DRG will not be responsible nor in any way liable for (a) any conditions not discoverable using the agreed upon means and methods used to perform the Services, (b) updating any Observational Data, (c) any changes in the Subjects after the Time of Collection (including, but not limited to, decay or damage by the elements, persons or implements; insect infestation; deterioration; or acts of God or nature [collectively, “Changes”]), (d) performing services that are in addition to or different from the originally agreed upon Services in response to Changes, or (e) any actions or inactions of you or any third party in connection with or in response to the Observational Data. If a visual inspection is utilized, visual inspection does not include aerial or subterranean inspection, testing, or analysis unless stated in the scope of work. When performing tree inventories or assessments, DRG will not be liable for the discovery or identification of non-visually observable, Davey Resource Group

ITEM 9 Page 195
latent, dormant, or hidden conditions or hazards, and does not guarantee that Subjects will be healthy or safe under all circumstances or for a specified period of time, or that remedial treatments will remedy a defect or condition.

To the extent you request DRG’s guidance on your permitting and license requirements, DRG’s guidance represents its recommendations based on its understanding of and experience in the industry and does not guarantee your compliance with any particular federal, state or local law, code or regulation.

DRG may review information provided by or on behalf of you, including, without limitation, paper and digital GIS databases, maps, and other information publicly available or other third-party records or conducted interviews (collectively, “Source Information”). DRG assumes the genuineness of all Source Information. DRG disclaims any liability for errors, omissions, or inaccuracies resulting from or contained in any Source Information.

If it is determined that DRG has breached this Limited Warranty, DRG will, in its reasonable discretion, either:
(i) re-perform the defective part of the Services or (ii) credit or refund the fees paid for the defective part of the Services. This remedy will be your sole and exclusive remedy and DRG’s entire liability for any breach of this Limited Warranty. You will be deemed to have accepted all of the Services if written notice of an alleged breach of this Limited Warranty is not delivered to DRG prior to the expiration of the Warranty Period.

To the greatest extent permitted by law, except for this Limited Warranty, DRG makes no warranty whatsoever, including, without limitation, any warranty of merchantability or fitness for a particular purpose, whether express or implied, by law, course of dealing, course of performance, usage of trade or otherwise.

Davey Resource Group

ITEM 9 Page 196
Printed on Recycled Paper

CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE: July 13, 2023
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FROM: Amy Van, City Clerk
SUBJECT: Appointment to Fill Vacancy on the Citrus Heights Education Committee
Summary and Recommendation
The Citrus Heights Education Committee (CHEC) is a limited term committee established to examine the feasibility of a Citrus Heights school district. The CHEC consists of seven members – five members who are individually appointed by each Council Member and two at-large members, subject to ratification by the City Council.

On June 22, 2023, the City Council adopted a resolution appointing seven members to the CHEC. On June 27, 2023, Thomas Scheeler (Mayor Schaefer’s individual appointment) notified the City of his resignation from the CHEC effective immediately, thus creating a vacancy for one of the individually appointed positions. Mayor Schaefer reviewed the remaining CHEC applications that were presented on June 22, 2023, and desires to appoint James Remick to fill the vacancy on the CHEC, whose appointment is subject to ratification by the City Council.

Staff recommends the City Council adopt Resolution No. 2023-___ a Resolution of the City Council of the City of Citrus Heights, California, appointing a member to the Citrus Heights Education Committee (CHEC) to fill a vacancy.

Attachment

1. Resolution appointing a member to the CHEC to fill a vacancy a. CHEC List of Appointees
ITEM 10 Page 197
Printed on Recycled Paper
RESOLUTION NO. 2023- ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS,

CALIFORNIA, APPOINTING A MEMBER TO THE CITRUS HEIGHTS EDUCATION

COMMITTEE (CHEC) TO FILL A VACANCY

WHEREAS, the Citrus Heights Education Committee (CHEC) will serve as a limited-term advisory committee and will provide a policy recommendation to the Citrus Heights City Council concerning the feasibility of a Citrus Heights school district; WHEREAS, the CHEC consists of seven members – five members who are individually appointed by each Council Member and two at-large members; WHEREAS, effective June 27, 2023, there is a vacancy for one of the individually appointed positions; and
WHEREAS, Mayor Schaefer desires to appoint James Remick to fill the individually appointed position.

NOW THEREFORE BE IT RESOLVED AND ORDERED that the City Council of the City of Citrus Heights hereby ratifies the appointment of James Remick to the CHEC to fill a vacancy.

The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 13 day of July, 2023 by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:

Tim Schaefer, Mayor
ATTEST:

Amy Van, City Clerk
Exhibit
a. CHEC List of Appointees
ITEM 10 Page 198

EXHIBIT A
Citrus Heights Education Committee (CHEC) List of Appointees • Jeannie Bruins
• Jessica Fork
• John Kane
• Karen Mix
• James Remick
• Robin Stout
• Laura Wilbur
ITEM 10 Page 199
Printed on Recycled Paper

CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE: July 13, 2023
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FROM: Regina Cave, General Services Director
Mary Poole, Operations Manager
SUBJECT: Resolution Confirming Report of Delinquent Solid Waste Charges and Ordering Collection of Delinquencies on the Property Tax Roll Summary and Recommendation
Staff recommends the City Council:
1) Conduct a Public Hearing on the Report of Delinquent Solid Waste Charges; and 2) Adopt Resolution No. 2023-___, a Resolution of the City Council of Citrus Heights, California, Confirming a Report of Delinquent Solid Waste Charges and Ordering Collection of Delinquencies on the Property Tax Roll.

Fiscal Impact
There is no impact to the FY 23/24 budget. This item is included in the annual solid waste budget. The County charges an annual fee of $35.00 plus 62 cents per levy to record delinquent accounts on the tax roll.

Background and Analysis
Section 74-169 of the Municipal Code directs that solid waste charges be a lien against the property to which solid waste services are provided.

Government Code Sections 38790.1 and 25831 authorize the City to collect delinquent solid waste charges on the property tax roll. Delinquencies are charges that are at least three months overdue. Amounts on the property tax roll are collected by the County on the annual property tax bills in two equal installments that must be paid by December and April.

A report of delinquencies was prepared by Republic Services and filed with the City Clerk. It lists amounts that were originally due on March 1, 2023 or earlier, and remained unpaid at the ITEM 11 Page 200
Subject: Resolution o Record Delinquent Solid Waste Charges on Tax Roll Date: July 13, 2023

Printed on Recycled Paper
time the report was filed. By its Resolution No. 2023-046, adopted on June 8, 2023, the City Council declared its intention to collect delinquencies on the property tax roll and set a public hearing on the report of delinquencies for the July 13, 2023 City Council meeting. Staff mailed notice of the public hearing to each property owner listed on the report at least ten days prior to the scheduled public hearing. The purpose of the public hearing is to give affected property owners a chance to dispute their inclusion on the report (or the amount of the delinquency) before the amount is turned over to the County for collection on the property tax bill.

The original report as filed listed 1420 delinquent accounts, with a past due balance of $610,460.59 and penalties of $61,046.06 for a total of $671,506.65.

An updated report has been filed with the City Clerk to remove delinquencies that have been paid since the original report was produced. The attached resolution confirms that revised report.

The City Council may also make other changes to the report after hearing objections and protests at the public hearing,
It is possible that some payments will be made to Republic Services after the adoption of tonight’s resolution. If such payments are made prior to submission of the report to the County, staff and Republic Services will endeavor to remove the paid delinquencies from the report.

Attachments
1) Resolution No. 2023-___, a Resolution of the City Council of the City of Citrus Heights California, Confirming a Report of Delinquent Solid Waste Charges and Ordering Collection of Delinquencies on the Property Tax Roll
ITEM 11 Page 201
Printed on Recycled Paper
RESOLUTION NO. 2023-___

RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF CITRUS HEIGHTS, CALIFORNIA, CONFIRMING A REPORT

OF DELINQUENT SOLID WASTE CHARGES AND ORDERING

COLLECTION OF DELINQUENCIES ON THE PROPERTY TAX ROLL
WHEREAS, pursuant to Section 74-169 of the Municipal Code, solid waste charges constitute a lien against the property to which services are provided; WHEREAS, Government Code Sections 38790.1 and 25831 authorize the City to collect delinquent solid waste charges on the property tax roll; WHEREAS, a report of delinquencies, listing each delinquent parcel and the amount of its delinquency, has been prepared and placed on file in the Office of the City Clerk and made available for public inspection (the “Report’);
WHEREAS, on June 8, 2023, by its Resolution No. 2023-046 (the “Resolution of Intention”), the City Council declared its intention to collect delinquent solid waste fees on the 2023-2024 property tax roll;
WHEREAS, the Resolution of Intention set July 13, 2023 at 6:00 p.m. in the City Council Chambers, 6360 Fountain Square Drive, Citrus Heights as the time and place for a public hearing on the Report and any objections or protests to the Report (the “Public Hearing”); WHEREAS, notice of the Public Hearing and the filing of the Report was mailed to the landowners listed on the Report at least ten days prior to the date of the Public Hearing; WHEREAS, prior to the Public Hearing, a revised report of delinquencies was prepared to omit delinquencies that have been paid since the Report was originally prepared (the “Revised Report”):

WHEREAS, the Revised Report, which contains no additional delinquencies that were not also on the original Report, is on file in the Office of the City Clerk, available for public inspection, and incorporated herein by reference;
WHEREAS, at the appointed time and place, the City Council held the Public Hearing and heard objections and protests from all interested persons; and WHEREAS, the City Council desires to confirm the Revised Report, without additional changes and to cause the delinquencies listed on the Revised Report to be collected by the County along with property taxes.

ITEM 11 Page 202

Printed on Recycled Paper
NOW THEREFORE BE IT RESOLVED that:

1. Pursuant to Section 258319(c) of the Government Code, the City Council confirms the Revised Report without additional changes.

2. The City Council directs staff to file a certified copy of the Revised Report with the County Auditor for collection on the 2023-24 Property Tax Roll, and take any other action necessary to cause such collection.

3. The delinquent charges (including penalties and interest) listed on the Revised Report shall constitute special assessments against the respective parcels of land and are a lien on the property for the amount of the delinquency. The assessment shall be collected at the same time and in the same manner as ordinary county ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure and sale in case of delinquency as provided for those taxes. All laws applicable to the levy, collection, and enforcement of county ad valorem property taxes shall be applicable to the assessment, except that if any real property to which the lien would attach has been transferred or conveyed to a bona fide purchaser for value, or if a lien of a bona fide encumbrancer for value has been created and attaches thereon, prior to the date on which the first installment of the taxes would become delinquent, then the lien that would otherwise be imposed by this section shall not attach to the real property and the delinquent fees, as confirmed, relating to the property shall be transferred to the unsecured roll for collection.

4. Staff is authorized to remove such items from the Revised Report as are paid prior to the submission of the Revised Report to the County.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 13th day of July, 2023, by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:

Tim Schaefer, Mayor
ATTEST:

Amy Van, City Clerk
ITEM 11 Page 203
Printed on Recycled Paper

CITY OF CITRUS HEIGHTS

CITY COUNCIL STAFF REPORT

MEMORANDUM
DATE: July 13, 2023
TO: Mayor and City Council Members
Ashley J. Feeney, City Manager
FROM: Casey Kempenaar, Community Development Director
Alison Bermudez, Senior Planner
Nicole Piva, Housing and Human Services Program Coordinator SUBJECT: Resolution to Adopt Affordable Ownership Program Guidelines Summary and Recommendation
Due to the complexity and influx of recent housing legislation, City staff worked with Housing INC. a housing consulting firm, to evaluate consistency between existing housing related policies and recent housing legislation. Due to the outcome, City staff drafted Affordable Ownership Program Guidelines to create and preserve long-term affordable homeownership opportunities for people who live and work in the City of Citrus Heights.

On February 23, 2023, during the City Council meeting City staff and Housing INC. presented the Affordable Ownership Program Guidelines. During the meeting, three of the five councilmembers were present; therefore, City Council asked City staff to return at a later date to provide an overview of the Program Guidelines to the full City Council.

The development of the Affordable Ownership Program Guidelines was funded through the State’s Local Early Action Plan (LEAP) grant, therefore if the Guidelines are not adopted the grant would need to be repaid. In addition, City staff pursued grant funds due to the newly adopted laws related to the provision of affordable housing and local government’s role in maintaining and monitoring projects as they are developed and ultimately occupied.

City has two longstanding Surplus Lands Act projects that have the potential to trigger the new provisions related to affordable housing including the Sayonara Drive Redevelopment and the Sylvan Corners projects. These Guidelines may be amended by City Council in the future as necessary to comply with changes in state law and to support related City objectives.

ITEM 12 Page 204
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
Staff recommends the following motion:

Motion: Move to adopt Resolution No. 2023-___ A Resolution of the City Council of the City of Citrus Heights, California, adopting the Affordable Ownership Program Guidelines and finding the project categorically exempt from the California Environmental Quality Act.

City Council Strategic Goal/Objective
This staff report supports strategies that will align with the following City Council Strategic Plan Goal: Enhance Community Vibrancy and Engagement
Background and Analysis
As the State of California continues to experience housing shortages, numerous new laws related to housing have been signed into law. Many of the newly adopted laws have components related to the provision of affordable housing and local government’s role in maintaining and monitoring projects as they are developed and ultimately occupied. To address anticipated development of projects that include affordable units, staff is requesting the adoption of the Affordable Ownership Program Guidelines (Exhibit A) which would assist staff in oversight of the units resulting from changes in state law.

State laws provide developers a variety of incentives such as increased densities, reduced approval timelines, and relaxed development standards for those projects that include housing units reserved for persons/families of lower incomes.

For projects developed utilizing these laws, long-term monitoring is required to ensure the housing remains affordable for long-term periods of time (which can vary depending on the project). Due to the influx of housing laws, push for additional affordable housing and the advantages provided to developers by providing affordable housing, it is anticipated the City will see an influx of affordable units in the near future; each requiring long term monitoring for adherence with the law.

In addition, some state mandates require a developer to provide affordable housing. One locally relevant example are projects that fall under the Surplus Land Act (SLA). The SLA requires government owned property sold for housing to require a certain percentage of the units be provided to restricted incomes.

Of note, the City has two longstanding Surplus Lands Act affiliated projects that have the potential to trigger the SLA provisions related to affordable housing. The Sayonara Drive Redevelopment and the Sylvan Corners sites would be subject to the SLA provisions if they include a housing component. In both of these instances, a minimum of 15% of the units must be sold as affordable and maintained as affordable for a minimum of 45 years, which is the responsibility of the City.

ITEM 12 Page 205
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
Intent of Affordable Ownership Program Guidelines
The goal of the City’s affordable housing program is to create and preserve long-term affordable ownership opportunities for people who live and work in the City of Citrus Heights. The Affordable Ownership Program Guidelines (“Program” or “Guidelines”) will support the program’s goal by providing Guidelines that are fair and equitable for developers and buyers.

The Guidelines will support the administration of affordable housing should residential developers request entitlements under any of these mandates, including AB 2011, SB 6, Surplus Lands Act, Density Bonus, etc.

Any project that includes an affordable component is required to enter into an Affordable Housing Regulatory Agreement (Agreement) with the City. These agreements are legally binding agreements which ensure affordable units remain affordable for specified periods (as prescribed by law), and memorialize the roles and responsibilities of the developer and the City for the development and ongoing maintenance of the affordable housing. These Agreements are required to comply with state law and the provisions of the guidelines.

Within the suite of laws governing affordable housing, there are some components that allow City discretion and/or policy to guide the development of Affordable Housing Regulatory Agreements (for example, giving first priority to those persons who both live and work in Citrus Heights and developer funding contributions for long-term monitoring). Other areas are purely subject to state law and the City has no discretion for implementation (for example, establishment of affordable income categories). Therefore, to provide staff the necessary tools to work with developers and oversee the long-term management of affordable units, staff seeks Council adoption of these Guidelines.

The Affordable Ownership Program Guidelines are provided as Exhibit A. These guidelines are intended to frame the City’s approach towards any future project subject to long term monitoring requirements.

The Guidelines are intended to allow flexibility and serve as a tool for staff to apply as new development projects come forward necessitating long term monitoring of affordable projects.

The full guidelines are provided as Exhibit A and some frequently asked questions are provided as Attachment 2. Below is a summary of the key components of the guidelines:

Description of an “Affordable Unit”
An affordable unit is a housing unit for a household within specific incomes limits.

Incomes of up to 80% of the area median income (AMI) generally are considered “lower income.” The Department of Housing and Community Development (HCD) currently defines $85,750 for a family of four as low income. Program participants purchasing affordable units will be required to be lower income and will have to demonstrate income eligibility and credit worthiness to meet the monthly housing obligations and program requirements.

ITEM 12 Page 206
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
What an “Affordable Unit” is not
Affordable units should not be confused with Section 8 housing, now called Housing Choice Voucher (HCV), which is a voucher program where the monthly housing cost is paid through a Public Housing Authority, locally known as Sacramento Housing and Redevelopment Agency (SHRA).

Program Overview
The Program Guidelines will assist with all aspects of housing units sold as a qualifying affordable unit under a variety of programs including housing projects being developed under density bonus program or other legislative or mandated state programs.

The Program Guidelines have been developed in accordance with Section 50052.5 of the California Health and Safety Code and further consistent with Citrus Heights existing First Time Homebuyer Down Payment Program.

Program Eligibility
Buyers of a qualified unit must be a first-time home buyer, be income qualified, be able to meet the lending requirements, and attend a Home Buyer Orientation.

Buyer Selection Process
The Guidelines provide details on the initial buyer selection process, giving priority to those who currently live AND work in Citrus Heights, followed by those who live OR work in the City and last to all other qualified buyers.

Developers Responsibility
The Guidelines provide an overview of the Program but the project specific details between the Developer and the City will be implemented through an Affordable Housing Agreement (AHA). The AHA implements the project specific details such as the number of units to be provided, codifies that the units will be of the same quality/materials as the market rate units, identifies any marketing requirements for the project, determination for affordable sales prices, and options should a qualified buyer(s) not be found.

In addition, the AHA will establish if the developer will be required to remit a percentage of the unit’s initial sales price to the City to contribute to costs associated with the City’s long-term oversight of the unit. Jurisdictions commonly collect this fee with varying percentages ranging from 1% to 5% of the sales price of an affordable unit. The Guidelines are written to allow up to 3% of sales price to provide adequate funding for ongoing monitoring of affordable requirements. In most cases, this requirement will be evaluated in conjunction with the scope of the project and staff would make a recommendation of an appropriate funding mechanism. The bulk of projects will fall within this range however, the City Council can alter this requirement on a project by project basis.

ITEM 12 Page 207
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
Buyers Responsibility
All buyers of affordable units will be required to sign an Owners Agreement (OA), also known as a Resale Restriction Agreement or Deed Restriction, which is a covenant that will be recorded against the title of each individual property at the time of sale. The OA will outline owners obligations with regards to occupancy, maintenance, refinancing, and reselling that come in exchange for the benefit of purchasing an affordable unit.

It’s worth noting that most laws require the home must remain in the Program for a 45- year term. Should the owner sell the home prior to the 46th year, the home must be sold to another qualified buyer at the restricted resale price as determined in the Guidelines and further outlined in the OA. The OA will give the City the first right of refusal to purchase the home for the restricted resale price prior to the seller offering the home to another qualified buyer.

The City is not obligated to exercise the option to purchase any home in the program, however, the owner is obligated to give the City the option to do so.

Resale Price
Owners of a restricted unit may sell the home to another income qualified buyer at any time. The home must be sold at what is called a “restricted resale price.” This restricted resale price is a calculation set forth in the Guidelines and codified in the OA. The Guidelines require the lessor value of two different calculations to be considered the restricted resale price- 1) the initial sales price plus median income adjustments and increased/decreased value of any improvements or 2) appraised value.

Resale/Refinancing Process
All real estate transactions associated with the restricted unit require processing and approval by the City. This includes refinancing requests and transfer of ownership (resale, death, etc.). The Guidelines allow owners to refinance their home to ensure the continued affordability of the home to the Owner and to minimize the risk of loss of the home by the Owner through default and foreclosure of mortgage loans. As required, the City must approve all financing and refinancing.

The adoption of the Affordable Ownership Program Guidelines will provide the City with tools needed when a development application that includes affordable housing be submitted to the City (for example Sylvan Corners).

Fiscal Impact
The development of the Affordable Ownership Program Guidelines was funded through the State’s Local Early Action Plan (LEAP) grant program. There has been no impact to the City’s General Fund for the development of this program.

Fiscal impacts may exist anytime an affordable housing project is developed in Citrus Heights that would obligate the City for long-term monitoring of affordability.

ITEM 12 Page 208
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
The costs associated with administration of affordable housing monitoring may include implementation of the regulatory agreement with the developer, the oversight and approval of the income qualifications of the initial buyer and/or any subsequent buyer, as well as other administrative steps needed to manage the deed restricted unit.

In most cases, an affordable housing unit remains deed restricted for income qualified buyers for a minimum of 45 years up to 55 years. During this term, monitoring of each affordable unit’s adherence to applicable state laws, income limits, and associated requirements often falls on the City (depending on the funding source and/or entitlement type).

Program costs can vary significantly based on several factors, including the size of the project and the number of units. Programs with the least City costs are those that have funding sources such as tax credits or other financing mechanisms as those funders take on the administration role (for example low income tax credit projects).

Those projects with an affordable housing component, which are developer sponsored, are likely to have the largest fiscal impact to the City. These projects will likely require both internal staff and external partners for each project launch and the anticipated cost can range significantly based on the number of units, affordability levels, and experience/capability of the developer.

The Guidelines outline the responsibilities of the developer and the City’s role in monitoring the program. As affordable units are constructed, the City’s role is limited to oversight of the project specific Affordable Housing Program oversight for the program launch, which are ultimately necessary to sell affordable units to qualified buyers.

After affordable units are first occupied, the City’s responsibility is the long-term monitoring of the affordable units to ensure units remain affordable as required by the governing law and/or funding source. This includes:
• Coordinate refinance and re-sale requests
• Deliver program reports, database management
• Monitor participant compliance and remedy defaults
• Ongoing reporting to state Housing and Community Development (HCD) These costs can vary based on the number of units, number of resales annually, affordability levels, etc. and are anticipated to be $5,000 to $20,000 annually. In order to offset these longterm financial impacts, the Guidelines include requirements for developer contributions to ensure a sustainable funding stream.

The most commonly used funding source for administration of affordable housing programs is the collection of a fee at the time each affordable unit is sold. Implementing this method, the City would receive a percentage of the sales price to cover costs associated with the ongoing monitoring and compliance review.

The Guidelines allow the City to capture up to 3% of the sale price when the affordable unit is sold and each subsequent time the unit is resold.

ITEM 12 Page 209
Subject: Resolution to Adopt Affordable Ownership Program Guidelines Date: July 13, 2023

Printed on Recycled Paper
Depending on the type of project, number of units and associated project makeup, the Guidelines allow staff to make recommendations between 0 and 3% of sales price. This approach would enable a sustainable funding source to cover the City’s long term monitoring obligations without necessitating funding from other City funds.

Attachments

1. Attachment 1: Resolution to Adopt Affordable Ownership Program Guidelines

2. Attachment 2: Frequently Asked Questions

3. Exhibit A: Affordable Ownership Program Guidelines
ITEM 12 Page 210
Printed on Recycled Paper
RESOLUTION NO. 2023- ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CITRUS HEIGHTS,

CALIFORNIA, ADOPTING THE AFFORDABLE OWNERSHIP PROGRAM GUIDELINES

AND FINDING THE PROJECT CATEGORICALLY EXEMPT FROM THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT

WHEREAS, the City’s General Plan Housing Goals encourage home ownership opportunities for all levels of incomes;
WHEREAS, to implement those Goals, the City encourages developers to provide affordable housing opportunities for persons/families of restricted incomes; WHEREAS, in response to the continued statewide housing crisis, California’s Legislature has enacted a number of new laws providing developers a variety of incentives such as increased densities, reduced approval timelines, and relaxed development standards for those projects that include housing units reserved for persons/families of restricted incomes;

WHEREAS, the City is legally obligated to monitor the long-term affordability of Affordable Units for periods of time specified by law up to 55 years; WHEREAS, to address the potential development of new affordable housing units, the Affordable Ownership Program Guidelines have been created to assist in the implementation and management of affordable housing within the City;
WHEREAS, the Affordable Ownership Program Guidelines are will ensure that housing units are preserved as an affordable unit for the required time as required by law; WHEREAS, the Affordable Ownership Program Guidelines have been developed in accordance with Section 50052.5 of the California Health and Safety Code and are consistent with Citrus Heights existing First-Time Homebuyer Program.

WHEREAS, the project is Categorically Exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA guidelines section 15061(b)(3).

NOW THEREFORE BE IT RESOLVED AND ORDERED that the City Council of the City of Citrus Heights does hereby adopt the Affordable Ownership Program Guidelines for the oversight, monitoring, and management of affordable housing.

The City Clerk shall certify the passage and adoption of this Resolution and enter it into the book of original resolutions.

PASSED AND ADOPTED by the City Council of the City of Citrus Heights, California, this 13th day of July 2023 by the following vote, to wit:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

Attachment 1
ITEM 12 Page 211

ABSENT: Council Members:

Tim Schaefer, Mayor
ATTEST:

Amy Van, City Clerk
Exhibit
A. Affordable Ownership Program Guidelines
ITEM 12 Page 212
City of Citrus Heights
Affordable Ownership Program Guidelines
FAQ’s

1. Who is eligible to purchase an affordable unit?
An affordable unit is a housing unit sold to a household within specific incomes limits. Incomes of up to 80% of the area median income (AMI) generally are considered “lower income.” The Department of Housing and Community Development (HCD) currently defines $81,050 for a family of four as low income in Sacramento County. Program participants purchasing affordable units will be required to be lower income and will have to demonstrate income eligibility and credit worthiness to meet the monthly housing obligations and program requirements.

The goal of the affordable housing program is to create and preserve long term affordable homeownership opportunities for the people who live and work in the City of Citrus Heights.

2. Are homes in the program considered “Section 8” housing? No. Affordable units provide homeownership opportunities to eligible households who would normally not be able to purchase a market rate home. Affordable units should not be confused with Section 8 housing, now called Housing Choice Voucher (HCV), which is voucher program where the monthly housing cost is paid through a Public Housing Authority, locally known as Sacramento Housing and Redevelopment Agency (SHRA).

3. What is an affordable housing program?
The State of California continues to have a shortage of housing that is affordable to middleincome working families. Due to the continued housing shortages, legislation provides developers a variety of incentives such as increased densities, reduced approval timelines, and relaxed development standards for those projects that include housing units reserved for persons/families of restricted incomes. In exchange for these incentives, the developer agrees to sell a set aside number of homes at a price determined to be “affordable”, generally much lower than the market rate.

Homes in the program will have covenants recorded against the title of the property, to ensure their continued affordability for a defined period. For the duration of this affordability period, the City governs the use and transfer of these homes. It’s important to note that homes in the program are required to remain owner occupied, cannot be investment properties or rental homes, must be maintained in accordance with the CCR’s and affordability covenants and are not intended to generate market-rate equity growth for their owners.

Attachment 2
ITEM 12 Page 213

4. How will the City establish the initial sales price with the builder? Housing developments which include affordable units have an initial sales prices for affordable homes are established. These prices are calculated prior to completion of the units so that builders can forecast sales revenues as well as construction costs, both of which are necessary for obtaining construction financing. The builder will be required to sign an affordable housing agreement that outlines the affordable sales prices that the homes will be required to be sold for. The prices will be calculated using current interest rates, property taxes, estimated hazard insurance and HOA dues.

5. Can individual owners sell?
Yes, individual owners are allowed to sell their homes, however all homes must be resold to qualified buyers a restricted sales price determined by the owner’s deed restriction agreement.

All homes in the City’s affordable housing program will be restricted for a 45-year affordability covenant. This agreement will outline all of the program requirements, including how the future price is calculated, and all other use restrictions required by the City. The deed restrictions will be signed in escrow and will appear as a covenant recorded against the title of every home sold within the City’s affordable housing program.

Updated June 22, 2023
ITEM 12 Page 214
July, 2023

City of Citrus Heights
Draft Affordable Ownership
Program Guidelines
City Council Review Date: July 13, 2023
ITEM 12 Page 215
1 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Table of Contents
I. PROGRAM OVERVIEW.................................................................................................. 2 II. DEVELOPMENT AND INITIAL SALES PROCESS ......................................................... 3 III. PROGRAM OUTREACH AND MARKETING................................................................... 4 V. LOAN EVALUATION....................................................................................................... 5 VI. PROGRAM ELIGIBILITY REQUIREMENTS ................................................................... 5 VII. BUYER APPLICATION AND SELECTION PROCESS.................................................... 8 VIII. SENIOR LOAN REQUIREMENTS .................................................................................. 9 IX. OCCUPANCY, MAINTENANCE, and INSURANCE REQUIREMENTS........................... 9 X. TRANSFER RESTRICTIONS AND INHERITANCE .......................................................10 XI. REFINANCING...............................................................................................................11 Request to Refinance Process ..............................................................................................12 XII. SALE OR TRANSFER OF RESIDENCE ........................................................................12 XIII. PAYMENT OF EXCESS SALES PROCEEDS AND EXCESS RENTS...........................14 XIV. DEFAULTS AND REMEDIES.........................................................................................15 XV. PURCHASE OPTION UPON DEFAULT.........................................................................16 XVI. EXCEPTIONS AND SPECIAL CIRCUMSTANCES........................................................16 IV. DEFINITIONS.................................................................................................................17 ATTACHMENT A......................................................................................................................20 Form of Owner Occupancy Certification ................................................................................20 ATTACHMENT B......................................................................................................................21 Form of Owner's Notice of Intent to Transfer .........................................................................21 ITEM 12 Page 216
2 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Below Market Rate Program Guidelines
I. PROGRAM OVERVIEW
The City of Heights is pleased to provide these Affordable Ownership Program Guidelines (“Guidelines”). The goal of the program is to create and preserve long-term affordable homeownership opportunities for people who live and work in the City of Citrus Heights.

These Guidelines will assist with all aspects of housing units sold as a qualifying affordable unit under a variety of programs including those mandated by the Department of Housing and Community Development (“HCD”) i.e., land sold under the State of California’s Surplus Lands Act, and in alignment with the Developer’s recorded Affordable Housing Agreement (“AHA”) and Owner’s Resale Restriction Regulatory Agreement and Option to Purchase and Excess Proceeds Deed of Trust (“Owner’s Agreement”).

Affordable Housing and Owner Agreements ensure the homes will remain affordable and occupied by the owner (“Owner”) for the 45-year restricted term. Program owners can sell their home at a market rate price at the end of the restricted term (46th year).

The Owner’s Agreement gives the City the option to purchase (“Purchase Option”) the home for the Restricted Resale Price if the Owner sells their home during the restricted term. The City can also assign another program eligible buyer to purchase the home. The City is not obligated to exercise its Purchase Option; however, the Owner is obligated to give the City the option to do so.

Owner Agreement Summary:
• The home is restricted for resale to program eligible buyers at the restricted resale price for the term of the Owner’s Agreement;
• The Owner must annually certify primary occupancy of the home; • The Owner must maintain the property – including, but not limited to maintaining all structures and landscaping;
• The Owner must maintain insurance requirements; and the City must be named as additional loss payee on the policy;
• The Owner must give notice to the City prior to the resale of the residence to an Income Eligible Household;
• The City must approve Owner’s Request to Refinance - homes are severely restricted from re-financing to access equity; and
• The Owner grants the City an Option to Purchase the Property upon resale or default Owner Agreements dictate policies and procedures specific to individual properties. These ITEM 12 Page 217
3 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 guidelines support program policies and procedures. Such as:
• Program eligibility, application and financing requirements; • Buyer selection process – including live/work criteria levels; • City approval for refinance process;
• Title transfers (including through marriage, divorce & inheritance); and • Selling process & procedures.

The City may designate and manage one or more third-parties (“City Designee”) to administer and/or facilitate portions or all of the Program Guidelines.

The Program will be implemented consistent with the City’s commitment to non-discrimination.

No person shall be excluded from participation in, denied the benefit of, or be subject to discrimination under any program or activity on the basis of his or her religion or religious affiliation, age, race, color, creed, gender, sexual orientation, marital status, familial status (children), physical or mental disability, nation origin, ancestry, or any other arbitrary cause.

The City will review and update these Guidelines from time to time to reflect changes in the market and better meet the community’s needs. Any changes shall be made in accordance with applicable regulations and be approved by the City’s Loan Committee.

II. DEVELOPMENT AND INITIAL SALES PROCESS
The intent of the City’s Affordable Ownership Program and Developer’s participation therein, is to maintain affordability of the participating homes for 45 years. The Developer and the City will sign an Affordable Housing Agreement to codify the processes and procedures to offer homes for sale to Initial Buyers that are affordable to them and are subject to an Owner’s Agreement.

Developers shall build the homes in accordance with the Affordable Housing Agreement and with development plans and any phasing plan, including bedroom-size and unit location, approved by the City for the Project. The homes will also be constructed in similar quality to base construction materials and finishes of other market rate homes in the same Project and will be subject to City approval.

The Developer’s homes for sale will be priced with the City’s approval and in accordance with applicable regulations. The City Designee shall select and approve Initial Buyers aligned with the City’s current policies and procedures.

The Developer will prepare the purchase and sales agreement for execution by the buyer and the Developer will facilitate the close of escrow.

ITEM 12 Page 218
4 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 The City Designee may be compensated for its role by the Developer at up to 3% of the sales price for each unit as a one-time fee payable upon any sale. The compensation shall be included in the initial buyer’s purchase and sale agreement and continued through any resales.

III. PROGRAM OUTREACH AND MARKETING
The Developer will create and execute an Affirmative Marketing Plan approved by the City in advance, designed exclusively to sell affordable homes and must be consistent with the marketing requirements further described below. The Affirmative Marketing Plan should include traditional marketing avenues such as online marketing, social media marketing, Community Partner Outreach, etc.

All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. No person shall, on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation be excluded, denied benefits or subjected to discrimination under the Program. The Marketing Plan must ensure that all persons, including those qualified individuals with handicaps, have access to the Program.

1. The Fair Housing Lender and Accessibility logos will be placed on all outreach materials.

2. Fair housing marketing actions will be based upon a characteristic analysis comparison (census data may be used) of the Program’s eligible area compared to the ethnicity of the population served by the Program (includes, separately, all applications given out and those receiving assistance) and an explanation of any underserved segments of the population.

This information is used to show that protected classes (age, gender, ethnicity, race, and disability) are not being excluded from the Program. Flyers or other outreach materials, in English and any other language that is the primary language of a significant portion of the area residents, will be widely distributed in the Program-eligible area and will be provided to any local social service agencies. City Designee will host classes, trainings, or workshops to help educate homebuyers about the program application and home buying process with future responsibilities.

3. The City will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public.

ITEM 12 Page 219
5 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 V. LOAN EVALUATION
The Loan Committee will review each application and may approve or deny with or without conditions.

VI. PROGRAM ELIGIBILITY REQUIREMENTS
All homes must be sold to buyers who meet the following requirements:

1. First-time homebuyer. The City shall comply with the Title 25 California Code of Regulations Division 1, Chapter 7, Subchapter 9 commencing with Section 7715 HCD definition of a first-time homebuyer.

A first-time homebuyer means a buyer (s) who has not owned a home during the three-year period before the purchase of a home, except that the following individual or individuals may not be excluded from consideration as a first-time homebuyer under this definition:

A. a displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse. A displaced homemaker is an adult who has not, within the preceding two years, worked on a full-time basis as a member of the labor force for a consecutive twelve-month period and who has been unemployed or underemployed, experienced difficulty in obtaining or upgrading employment and worked primarily without remuneration to care for his or her home and family;
B. a single parent who, while married, owned a home with his or her spouse or resided in a home owned by the spouse. A single parent is an individual who is unmarried or legally separated from a spouse and has one or more minor children for whom the individual has custody or joint custody or is pregnant; or C. an individual or individuals who own or owned, as a principal residence during the three-year period before the purchase of a home, a dwelling unit whose structure is:
a. not permanently affixed to a permanent foundation in accordance with local or state regulations; or
b. not in compliance with state, local, or model building codes and cannot be brought into compliance with such codes for less than the cost of constructing a permanent structure.

2. Income eligibility.

Income Eligible Households do not have incomes that exceed 80% of the AMI limits adjusted for household size, published annually by HCD for Sacramento County.

ITEM 12 Page 220
6 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 All income of all household members 18 years old or older will be considered.

A. Household size will not include foster children, unborn children and children being pursued for custody or adoption who do not currently live in the home. Household size will include joint custody children who reside in the home 50% or more of the year.

B. Income verification will be performed using income calculation worksheet.

C. Assets are only significant to the Affordable Ownership Program in the determination of income qualification.
a. Net family assets means the value of equity in real property other than the household's full-time residence, savings, stocks, bonds, and other forms of capital investment. The value of necessary items such as furniture and automobiles shall be excluded.
b. Where a family has net family assets in excess of $5,000 will be included in gross income as the greater of:
i. Income derived from all net household assets, or
ii. 2.5% (passbook rate) of the value of such assets.

D. Gross income shall mean the anticipated income of a person or family for the twelve-month period following the date of determination of income. If the circumstances are such that it is not reasonably feasible to anticipate a level of income over a twelve-month period, a shorter period may be used subject to a redetermination at the end of such a period. a. Income shall include but not be limited to:
i. The gross amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses;
ii. The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business);
iii. Interest and dividends;
iv. The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts;
v. Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (but see subdivision (b)(3)).
vi. Public Assistance. If the public assistance payment includes an amount ITEM 12 Page 221
7 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of:
vii. The amount of the allowance or grant exclusive of the amount specifically designated for shelter and utilities, plus
viii. The maximum amount which the public assistance agency could in fact allow for the family for shelter and utilities
ix. Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling;
x. All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the family or spouse. b. Income shall not include:
i. Casual, sporadic or irregular gifts;
ii. Amounts which are specifically for or in reimbursement of the cost of medical expenses;
iii. Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses;
iv. Amounts of educational Scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such Scholarships, or payments to veterans not used for the above purposes of which are available for subsistence are to be included in income;
v. The special pay to a serviceman head of a family away from home and exposed to hostile fire;
vi. Relocation payments made pursuant to federal, state, or local relocation law; vii. Foster childcare payments;
viii. The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible household;
ix. Payments received pursuant to participation in the following volunteer programs under the ACTION Agency:
x. National Volunteer Antipoverty Programs which include VISTA, ServiceLearning Programs and Special Volunteer Programs. xi. National Older American Volunteer Programs for persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent ITEM 12 Page 222
8 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE).

4. Homebuyer Orientation Program. City Designee will require all program applicants attend a Program Orientation. The Orientation will cover topics such as the application and selection process, ownership requirements (e.g., annual certification and refinance/subordination process), and resale process.

VII. BUYER APPLICATION AND SELECTION PROCESS
Initial buyers shall be ranked and selected to purchase a home according to the following Criteria Levels:

Level One: Those who live and work in the City of Citrus Heights Level Two: Those who live or work in the City of Citrus Heights Level Three: All others
Initial Program Application and Buyer Selection Process. The City Designee shall select and approve Initial Buyers aligned with the City’s current policies and procedures – for example:

Step 1: Affirmative Marketing Plan Launched
• Community Outreach, Notify the Interest List, Social Media, Press Release, etc.

Step 2: Households submit a Program Pre-Application
• Households are screened for criteria level and selected households are invited to attend an Orientation.

Step 3: Orientation
• Selected households attend an orientation to learn amount the program and affordable home(s)
• Developer invited to talk about the affordable home(s) • Loan officers invited to attend to talk about the loan application process.

Step 4: Lender Pre-Approval
• Applicants meet with loan officers to obtain mortgage pre-approval Step 5: Open House
• Households who attended the Orientation and have a lender pre-approval letter are invited to an Open House.

Step 6: Drawing
• Applicants are ranked by a drawing to determine the order in which their applications are processed and approved (Criteria Level One applicants are ranked first, Criteria Level Two are ranked second, etc.).

ITEM 12 Page 223
9 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Step 7: Application
• Applicants are invited to complete a full application. • Applications will be reviewed to determine program eligibility.

Any subsequent discovery by the City of fraudulent or untruthful representations by an applicant either in the original application process or during the program qualification process will disqualify the applicant from purchasing the home.

VIII. SENIOR LOAN REQUIREMENTS
Applicants must obtain conventional, fully amortizing, fixed interest rate mortgages with a term of no more than 30 years from a lender who has approved in advance the Owner’s Agreement.

No interest only loans, negative amortization loans, balloon payment loans or variable interest rate loans are permitted as the affect the homeowners long-term ownership stability.

The lending requirements are as follows:

1. The Housing Cost Ratio (which includes mortgage principal and interest, property taxes, mortgage insurance, homeowners insurance, and homeowner’s association dues) shall not exceed 38% of monthly gross income. In all cases, the City will strive to ensure the housing ratios are lower than this maximum threshold.

2. Total Household Debt Ratio (all misc. debts, car notes, credit cards including Housing Cost) shall be no greater than 42% unless compensating factors can be demonstrated.

3. Allowable Loan to Value Ratio The combined loan-to-value limits shall not exceed 100% of the sales price + 5% for closing costs.

4. Buyer’s downpayment Homebuyer must contribute a minimum down payment of one percent (1%) of the purchase price but may contribute more if desired or required by the lender.

IX. OCCUPANCY, MAINTENANCE, and INSURANCE REQUIREMENTS

1. Occupancy of Residence The Owner shall occupy the home as the principal place of residence throughout the Restricted Term for at least ten (10) months out of each calendar year.

Annually, the City shall remind the Owner to submit their annual Owner Occupancy Verification (Attachment A - online or via US Mail) and required third-party verification documents as directed to confirm the Owner is occupying the home as the primary residence.

ITEM 12 Page 224
10 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Owners who fail to respond to the notice (email, letter, etc.) will receive a notice via certified mail. In the event the Owner fails to respond to any of the notices, the City will attempt to make contact via phone. If contact still cannot be made, the City may initiate a default under the Owner’s Agreement.

The City will also annually review the mailing address for the property tax bill, as available through the Sacramento County Assessor. In the event the mailing address differs from the property address, the City will require an explanation and request additional documentation from the Owner, including paystubs or bank account statements showing the Borrower’s mailing address as the property address.

The City may grant a temporary waiver of this occupancy on a case-by-case basis. The Owner may lease one or more bedrooms in the home to another party if the Owner continues to occupy the home as their principal place of residence. When the Owner is not residing in the property due to illness and/or hospitalization, the Owner may be considered an owner-occupant only for the initial six-month absence, subject to City’s approval.

2. Maintenance Requirements. The Owner shall maintain the home, including landscaping, in good repair and in a neat, clean and orderly condition (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. The Owner agrees to not commit waste or permit deterioration of the home and shall make all repairs and replacements necessary to keep the Home in good condition and repair.

3. Insurance Requirements. The Owner shall maintain a standard all risk property insurance policy equal to the replacement value of the home (adjusted every five (5) years by appraisal, if requested by the City) naming the City as additional insured. Additional insurance requirements are set forth in the respective City Deed of Trust.

X. TRANSFER RESTRICTIONS AND INHERITANCE
In all cases where there is a change in title or occupancy or use, the Owner must notify the City in writing of any change. The City and Owner will work together to ensure the home is kept in compliance with the original program terms and conditions. This section outlines those changes on title that are and are not permitted under the Owner’s Agreement.

1. Transfer. Any Transfer of the home is subject to the provisions of the Owner’s Agreement. "Transfer" shall mean any sale, assignment, or transfer, voluntary or involuntary, of any ITEM 12 Page 225
11 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 interest in the home, including, but not limited to, a fee simple interest, a joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, or an interest evidenced by a land contract by which possession of the home is transferred and the Owner retains title or a deed of trust. A Transfer shall not include a transfer: (1) to an existing spouse or Domestic Partner who is also an obligor under the City Note; (2) to a spouse or Domestic Partner where the spouse or Domestic Partner becomes the co-owner of the home; (3) between spouses as part of a marriage dissolution proceeding; (4) by the Owner into an inter vivos trust in which the Owner is the beneficiary; and (5) a refinance of any Senior Loan meeting the program requirements.

2. Inheritance. The person inheriting the home (the "Inheriting Owner") shall provide the City with income and other information, to be verified by the City, so that the City may determine if the Inheriting Owner qualifies as an Income Eligible Household. If the Inheriting Owner fails to provide required documentation, he or she shall be deemed not to qualify as an Income Eligible Household. If the Inheriting Owner is an Income Eligible Household, he or she shall succeed to the Owner's interest and obligations under this Agreement shall be executed between the Inheriting Owner, and the City recorded against the home. If the Inheriting Owner fails to qualify as an Income Eligible Household, he or she shall be required to Transfer the home to an Income Eligible Household at a price not exceeding the Restricted Resale Price, pursuant to the Agreement’s resale process and procedures and may own and occupy the home for up to six (6) months with one extension prior to selling the home according to the Agreement’s process and procedures.

The Inheriting Owner shall not be required to occupy the home during this six (6) month time period but may rent the home only upon approval from the City to Income Eligible Households approved by the City for an amount that does not exceed rent that is affordable to the Income Eligible Households as determined by the City in accordance with applicable law. In the event the Inheriting Owner rents the home in accordance to this Section, the lease shall also be approved by the City.

XI. REFINANCING
The City’s refinance requirements are necessary to ensure the continued affordability of the home to the Owner and to minimize the risk of loss of the home by the Owner through default and foreclosure of mortgage loans.

The Owner must agree not to place any additional mortgage or deed of trust on the property, including any line of credit, and must not otherwise use the property as security in any transaction without first obtaining prior written consent of the City.

The City must approve in writing all financing and refinancing. The City shall have sole ITEM 12 Page 226
12 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 discretion regarding the approval or disapproval of any refinancing request, including any financing terms.

Subordinate loans, including second or junior loans and equity lines of credit, are not permitted except as expressly approved by the City in writing. Subordinate loans shall be permitted only if they conform to all of the City’s requirements.

The Loan Committee will consider refinance requests if the new loan conforms to the requirements of Section VIII and:
• lowers the housing cost of the Owner with a lower interest rate; • is for a fully amortized, fully documented fixed rate loan, has a term not exceeding thirty (30) years, and requires no balloon payments;
• does not have a temporary interest rate buy-down;
• collects impounds for property taxes and insurance; and • does not cause the principal amount of all debt secured by the home to exceed the greater of: (a) the Restricted Resale Price, calculated by the City; or (b) the then outstanding principal balance (plus refinancing and closing costs) of the Senior Loan.

Request to Refinance Process
Owners should contact the City of Citrus Heights Housing Division to initiate a Request to Refinance before they apply for a new loan. The City will a) determine the new loan does not exceed the Restricted Resale Price or the outstanding principal balance of the Senior Loan; and b) request a list of required third-party documents to approve the request.

The City shall review the Request to Refinance and compliance provisions and may, in its sole discretion, grant or deny the request. The City may also grant the request subject to additional conditions, which are within the City’s discretion to impose. The City shall have no obligation to grant any request for refinancing. Any approval by the City of refinancing is also subject to the City’s approval of any documents that may require City’s execution by the senior City, including but not limited to a subordination document.

If the City approves the Request to Refinance, the escrow company will provide the proper subordination document for execution and recordation by the City. The City will require a copy of the insurance declarations to ensure the City is still listed as a loss payee. The City will also require the recordation of a new Request for Notice of Default or Sale.

XII. SALE OR TRANSFER OF RESIDENCE
The Owner’s Agreement outlines the resale process, timeline and how the Restricted Resale Price is calculated. Home sales may take longer than conventional sales because of the number ITEM 12 Page 227
13 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 of payoffs needed, the city authorization required, and the legal documents involved.

1. Notice of Intent to Transfer. If the Owner intends to Transfer (sell) or vacate their home, the Owner should inform the City in writing at least 90 days prior using the provided form (Attachment B).

The City shall contact the Owner and meet with them to discuss the resale process and procedure as defined in their recorded Agreement. The City will inform the Owner how to proceed including preparing for City inspection and home and inspection reports.

2. Response to Notice of Intent to Transfer. The City will respond to the Owner’s Notice of Intent to Transfer within 60 days of receipt with a calculation of the Restricted Resale Price.

The City will notify the Owner if they want to exercise their Option to Purchase or designate a program Eligible Purchaser. If the City exercises its Option to Purchase, the City may facilitate program and real estate services. Owner shall pay the City the fee as outlined in the initial purchase and sale agreement of the Affordable Ownership residence.

3. Owner Sale at Restricted Resale Price to Income Eligible Household If the City chooses not to exercise its Option to Purchase, the Owner may proceed to sell their home according to their Agreement to an Income Eligible Household at a price not to exceed the Restricted Resale Price. The City must approve the Purchaser that the Owner has identified. If the Owner does not sell the home within 120 days, the City has an additional 60-day period to exercise the Purchase Option.

If the Owner sells the Residence to an Income Eligible Household, the maximum sales price (“the “Restricted Resale Price”) that the Owner shall receive for any type of Transfer of the home shall be the lessor of the Increased Base Price or the Fair Market Value.

4. Determination of Restricted Sales Price If the Purchase Option is exercised, or if the Owner sells the Residence to an Income Eligible Household, the maximum sales price (the "Restricted Resale Price") that the Owner shall receive for any type of Transfer of the Residence shall be the lesser of (1) the Increased Base Price or (2) the Fair Market Value A. Increased Base Price The Increased Base Price of the home is the original purchase price of the home increased by the percentage increase in the household income for a household of four (4) at one hundred percent (100%) of the Median Income as defined by HCD as of the date of receipt of the Notice of Intent to Transfer. If Median Income has decreased from the date of the Owner’s date of purchase of the home, then the Increased Base Price shall be the same as the original purchase price of the home.

B. The Increased Base Price shall be increased by the appraised Fair Market Value of the ITEM 12 Page 228
14 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 Eligible Capital Improvements (the amount by which the Eligible Capital Improvements enhance the Fair Market Value of the home at the time of sale), or by such an amount as may be agreed upon by the Owner and the City. The adjustment to the Increased Base Price for the Eligible Capital Improvements shall be limited to the increase in Fair Market Value, not the cost of the Eligible Capital Improvements. The cost of any appraisal prepared for the purpose of adjusting the Increased Base Price shall be borne by the Owner.

C. The Increased Base Price shall be decreased by an amount necessary to repair any damages and to put the home into a "sellable condition." Items necessary to put a home into sellable condition shall be determined by the City and may include cleaning, painting, and needed structural, mechanical, electrical, plumbing, and fixed appliance repairs and other deferred maintenance repairs.

D. In certain circumstances it may be necessary to determine the fair market value of the Residence (the "Fair Market Value"). These circumstances include: (1) where the parties wish to determine if the Increased Base Price exceeds the Fair Market Value; and (2) where the Owner wishes to refinance any Senior Loan. If it is necessary to determine the Fair Market Value of the Residence, it shall be determined by an appraisal prepared by an independent residential appraiser selected by the Owner at the Owner's expense.

Each appraiser shall have been previously approved by the Federal National Mortgage Association or the Federal Housing Administration and placed on its list of approved single family housing appraisers. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding six (6) month period.

XIII. PAYMENT OF EXCESS SALES PROCEEDS AND EXCESS RENTS If the Owner sells the Residence to a non-Income Eligible Household or makes a Transfer in violation of this Agreement, the Owner shall pay the Excess Sales Proceeds to the City. "Excess Sales Proceeds" is the amount by which the gross sales proceeds, minus real estate commission and other closing costs associated with the sale of the property reasonably approved by the City, received by the Owner from the new purchaser exceed the Restricted Resale Price for the Residence.

1. Payment of Excess Sales Proceeds and Excess Rents Excess Sales Proceeds and Excess Rents shall be distributed to the City to be used to develop affordable housing in City of Citrus Heights.

ITEM 12 Page 229
15 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 XIV. DEFAULTS AND REMEDIES

1. Events of Default The following events shall constitute a "Default" by the Owner under this Agreement:

A. The Owner has made a misrepresentation to obtain the benefits of purchase of the Residence or in connection with its obligations under their Owner’s Agreement; B. The Owner fails to owner occupy the Residence;
C. The Owner rents or leases the Residence to another party without maintaining occupancy;
D. The Owner fails to provide information to the City necessary to determine Owner's compliance with the requirements of their Owner’s Agreement; E. The Owner makes a Transfer, or attempts to Transfer, the Residence in violation of their Owner’s Agreement;
F. The Owner otherwise fails to comply with the requirements of this Agreement; G. A notice of default is issued under any Senior Loan or any other financing secured by a deed of trust on the Residence;
H. A lien of mortgage is recorded against the Residence other than the lien of a bona fide first mortgage loan approved by the City;
I. Owner declares bankruptcy or makes an assignment of assets for the benefit of creditors.

2. Notice and Cure The City may give written notice to the Owner specifying the nature of any violation. If the violation is not corrected to the satisfaction of the City issuing the notice within a reasonable period of time, not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City may provide at its sole discretion, the City, may declare a Default by written notice to Owner ("Declaration of Default").

The City shall also provide written notice to any Senior Lender if the Party if the City has sent a Declaration of Default under this Agreement or declared a Default under its note or deed of trust. The notice to any Senior Lender shall indicate that the Purchase Option may be exercised.

3. Remedies The City may exercise any remedies at law or in equity, including without limitation, any or all of the following, none of which shall be an exclusive remedy:

A. Declare all Excess Sales Proceeds or Excess Rents immediately due and payable without further demand;
B. Invoke the power of sale under the City Deed of Trust; C. Apply to a court of competent jurisdiction for such relief at law or in equity as may be appropriate;
D. Take such enforcement action as is authorized under the City Municipal Code; E. Correct maintenance failures, and place a lien upon the Residence to collect costs to ITEM 12 Page 230
16 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 remedy maintenance failures; and
F. Exercise the Purchase Option
XV. PURCHASE OPTION UPON DEFAULT
The City will Exercise the Purchase Option to a Designated Purchaser upon occurrence of any of the following events:
• Upon the issuance of a Declaration of Default by the City • Upon a judicial determination that a Transfer of the Residence in a transaction that does not meet the requirements of this Agreement is null and void; • Upon the receipt of any notice of default or notice of sale pursuant to Civil Code Section 2924b or Civil Code Section 2924f or through any other means under any deed of trust or mortgage with power of sale encumbering the Residence; • Upon service of summons or other papers in any judicial foreclosure against the Residence; or
• Upon execution by the Owner of any deed in lieu of foreclosure transferring ownership of the Residence; and
• This Purchase Option is given in consideration of the economic benefits received by the Owner resulting from ownership of the Residence made possible by the assistance of the City, in acquiring and developing the Residence.

Exercise of Option: The Purchase Option upon Default shall be exercised within forty-five (45) days after each event described above pursuant to the procedures.

XVI. EXCEPTIONS AND SPECIAL CIRCUMSTANCES

1. Definition of Exception. Any case to which a standard policy or procedure, as stated in the Guidelines, does not apply or an applicant is treated differently from others of the same class would be an exception.

2. Procedure for Exceptional Circumstances. The City may initiate consideration of an exception and prepare a report. This report shall contain a narrative, including the City's recommended course of action and any written or verbal information supplied by the applicant.

The City’s Loan Committee shall make a determination of the exception based on the recommendation of the Development Specialist and/or her designee.

ITEM 12 Page 231
17 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 IV. DEFINITIONS
A. Affordable Housing Agreement (AHA): An agreement entered into between the Purchaser and the City of Citrus Heights to establish an affordable housing program as mandated by the State of California’s Surplus Lands Act that is regulated by Department of Housing and Community Development.

B. Application: Formal application approved by City that prospective buyers will complete as part of the purchase process.

C. Area Median Income (AMI): The Department of Housing and Community Development (HCD) publishes annual tables of official Federal and State income limits for determining maximum household income, adjusted by household size, for a variety of housing programs.

State statutory limits are based on federal limits set and periodically revised by the U.S.

Department of Housing and Urban Development (HUD). HUD’s limits are based on surveys of local area median income (AMI).

D. City: City of Citrus Heights
E. City of Citrus Heights Affordable Ownership Program: The City’s Program to manage the affordable home ownership program as mandated and regulated by Department of Housing and Community Development.

F. City Designee: A person or entity that the City may designate to assist in the administration of its Affordable Ownership Program. This may include city staff, broker, consultant, and/or developer.

G. City Response Notice: Written confirmation from the City of receipt of the Owner’s Notice of Intent to Transfer.

H. Criteria Level: The City’s adopted criteria for ranking and selecting Income Eligible Households to purchase an Affordable Ownership home.

I. Declaration of Default: The City may declare a Default for certain events under the Agreement by written notice to Owner.

J. Default: An event that grants the City the Purchase Option to buy the home from the Owner or assign an Income Eligible Household or Designated Purchaser.

K. Designated Purchaser: An Income Eligible Household, a public agency, or a nonprofit corporation to whom the Purchase Option is assigned by the City.

ITEM 12 Page 232
18 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 L. Developer: An entity that constructs residential housing units.

M. Eligible Capital Improvements: Substantial structural or permanent fixed improvements that increase the value of the home as determined by an appraisal.

N. Excess Rents: All rents Owner receives from a third party in violation of the Owner’s Agreement that the Owner must pay the City.

O. Excess Sales Proceeds: The amount by which the gross sales proceeds, minus real estate commission and other closing costs associated with the sale of the property reasonably approved by the City received by the Owner from the new purchaser exceed the Restricted Resale Price for the home.

P. Fair Market Value: The value of the home as determined by an appraisal prepared by an independent residential appraiser.

Q. First-Time Homebuyer: A buyer (s) who has not owned a home during the three-year period before the purchase of a home, except for the exceptions defined in Section III.

R. Gross Income: All income as defined by HCD in Title 25 CCR Section 6914 S. Housing and Community Development (HCD): California Department of Housing and Community Development.

T. Housing and Urban Development (HUD) - U.S. Department of Housing and Urban Development (HUD).

U. Income Eligible Households: Households who meet the requirements outlined in the Agreement to purchase, and in some cases rent, an AFFORDABLE OWNERSHIP home.

V. Increased Base Price: The original purchase price of the home increased by the percentage of increase in household income for a household of four at one hundred percent of the AMI as defined by HCD as of the date of receipt of the Notice of Intent to Transfer.

W. Inheriting Owner: The person inheriting the home.

X. Initial Buyer: The Income Eligible Household purchasing an Affordable Ownership home from a Developer.

Y. Initial Restricted Sales Price: The initial restricted sales price of the home.

Z. Loan Committee: The team may consist of representatives from various City Departments ITEM 12 Page 233
19 City of Citrus Heights Affordable Ownership Program Guidelines July 2023 including City Manager’s Office, Community Development, Administrative Services, and General Services as designated by the Community Development Director or his/her designee.

AA.Lower-income households: Persons and families whose income does not exceed the qualifying limits for lower-income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937.

BB. Notice of Intent to Transfer: The Owner’s written announcement (Attachment A) to the City that owner intent to Transfer (sell) or vacate the residence.

CC. Owner: The name of the person(s) entering into the Agreement with the City to purchase the Affordable Ownership home.

DD.Owner’s Agreement: Refers to the recorded Resale Restriction Regulatory Agreement and Option to Purchase, Excess Sales Proceeds Deed of Trust.

EE. Pre-Application: A pre-application form that allows prospective buyers to be ranked in order of the City approved criteria levels.

FF. Project: Site owned by developer
GG. Purchase Option: The City shall have the option to purchase the Residence from the Owner or designate a purchaser or assign its rights over to a third party.

HH.Restricted Resale Price: The maximum sales price that the Owner shall receive for any type of Transfer of the home.

II. Senior Loan: The loan to which the Owner’s Agreement has been subordinated (usually the first, or primary mortgage loan).

JJ. Surplus Lands Act: Government Code, Title 5, Division 2, Part 1, Chapter 5, Article 8.

Surplus Land.

KK. Transfer: Any sale, assignment, or transfer, voluntary or involuntary, of any interest in the Affordable Ownership home.

LL. Term: The Owner’s Agreement shall start on the date of the close of escrow of the sale of the Residence to the Owner and end on the earlier of: (1) the close of a Transfer to an Income Eligible Household; (2) conveyance to the City or a Designated Purchaser pursuant to exercise of the Purchase Option; (3) acquisition of title through a foreclosure of a Senior Loan to which the Agreement has been subordinated; or forty -five (45) years from the effective date of the Owner’s Agreement (the "Term").

ITEM 12 Page 234
20 City of Citrus Heights Affordable Ownership Program Guidelines July 2023

ATTACHMENT A
Form of Owner Occupancy Certification
To: City of Citrus Heights (“City”)
From: _________________________ [name of owner(s)] ("Owner(s)") _________________________
Address of Residence:_________________________
Phone Number: _________________________
Date: _________________________
By signature below, I _____________________ [insert name or names of Owner] hereby certify to the City under penalty of perjury that I/we occupy the home located at _______________________________________ [insert address] (the "Residence") as my/our principal place of residence and that I/we have occupied the Residence for ___________ (__) [insert number] months of the calendar year _____________ [insert previous calendar year].

Attached to this letter is a copy of _________ [insert utility bill, driver's license, or other requested documentation] showing my place of residence.

This Owner Occupancy Certification is signed on _______________ __, 20__, under penalty of perjury.

By: ______________________________
Owner [type name]
By: ______________________________
Owner [type name]
Attach copy of current homeowner’s insurance, or other information requested by the City showing address of Residence
ITEM 12 Page 235

ATTACHMENT B
Form of Owner's Notice of Intent to Transfer
To: City of Citrus Heights
From: _________________________ [name of owner(s)] ("Owner(s)") Address of Residence:_________________________ ("Residence") Date: _________________________
Please be notified pursuant to Section 6 of the Resale Restriction Agreement and Option to Purchase dated _____________ (the "Resale Agreement") that the Owner intends to transfer the Residence listed above.

A. The following information is provided pursuant to Section t of the Resale Agreement:

1. Address of Residence: _______________________________________________

2. Date Owner purchased Residence: _____________________________________

3. Purchase Price paid by Owner when Residence was purchased: ______________

4. Date Owner intends to vacate Residence:
________________________________

5. Date Residence will be placed on market: _______________________________

6. Name and phone number of person to contact to schedule inspection:
____________________ and __________________
(name) (phone number)
B. If Owner has made Eligible Capital Improvements to the Residence that Owner wishes to include in the calculation of Restricted Resale Price, check box below:
□ Yes, I have made Eligible Capital Improvements as described in Section 9 of the Resale Agreement. I attach the following documents to this letter:

1. List of improvements;

2. Evidence of cost of these improvements;
ITEM 12 Page 236

3. Appraisal showing value added to Residence by the improvements.

C. I agree to prepare the Residence for sale by:

1. obtaining a pest control report and home inspection report within thirty (30) days of the date of this notice,

2. repairing all damage noted in Section 1 of the pest report prior to close of escrow of the sale of the Residence or the Transfer of the Residence,

3. allowing the City or its designee to inspect the Residence within thirty (30) days of this notice,

4. maintaining utility connections until the Residence is transferred,

5. permitting a walk through by the buyer at least three days before the close of escrow or the transfer.

This Owner's Notice of Intent to Transfer is certified by Owner to be true and correct and is signed on ____________________________ [insert date] under penalty of perjury.

By: ______________________________
Owner
By: ______________________________
Owner
ITEM 12 Page 237