Industry City Council
May 14, 2025

CITY OF INDUSTRY
CITY COUNCIL Mayor Tim Spohn
REGULAR MEETING AGENDA Mayor Pro Tem Jeff Parriott
Council Member John P. Ferrero
MAY 14, 2015 Council Member Roy Haber, III
9:00 AM Council Member Pat Marcellin
Location: City Council Chamber, 15651 East Stafford Street, City of Industry, California 91744 Addressing the City Council:
< Agenda Items: Members of the public may address the City Council on any matter listed on the Agenda. In order to conduct a timely meeting, there will be a three-minute time limit per person for any matter listed on the Agenda. Anyone wishing to speak to the City Council is asked to complete a Speaker’s Card which can be found at the back of the room and at the podium. The completed card should be submitted to the City Clerk prior to the Agenda item being called and prior to the individual being heard by the City Council.
< Public Comments (Non-Agenda Items): Anyone wishing to address the City Council on an item not on the Agenda may do so during the “Public Comments” period. In order to conduct a timely meeting, there will be a three-minute time limit per person for the Public Comments portion of the Agenda.

State law prohibits the City Council from taking action on a specific item unless it appears on the posted Agenda. Anyone wishing to speak to the City Council is asked to complete a Speaker’s Card which can be found at the back of the room and at the podium. The completed card should be submitted to the City Clerk prior to the Agenda item being called by the City Clerk and prior to the individual being heard by the City Council.

Americans with Disabilities Act:
< In compliance with the ADA, if you need special assistance to participate in any City meeting (including assisted listening devices), please contact the City Clerk’s Office (626) 333-2211. Notification of at least 48 hours prior to the meeting will assist staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting.

Agendas and other writings:
< In compliance with SB 343, staff reports and other public records permissible for disclosure related to open session agenda items are available at City Hall, 15625 East Stafford Street, Suite 100, City of Industry, California, at the office of the City Clerk during regular business hours, Monday through Friday 9:00 a.m. to 5:00 p.m. Any person with a question concerning any agenda item may call the City Clerk’s Office at (626) 333-2211.

1. Call to Order

2. Flag Salute

3. Roll Call

4. Public Comments

CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA
MAY 14, 2015
PAGE NO. 1

5. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine and will be enacted by one vote. There will be no separate discussion of these items unless members of the City Council, the public, or staff request specific items be removed from the Consent Calendar for separate action.

5.1 Review of Actions for City Goods and Services.

RECOMMENDED ACTION: Receive and file.

5.2 Consideration of the minutes of the March 12, 2015 regular meeting.

RECOMMENDED ACTION: Approve as submitted, with Council
Member Ferrero abstaining due to his absence from the meeting.

5.3 Consideration of award of Contract No. CITY-1424, 2014-2015 Slurry Seal and Parking Lot Sealcoat, to American Asphalt South, Inc., in the amount of $233,826.78.

RECOMMENDED ACTION: Award the contract to American Asphalt South, Inc. In the amount of $233,826.78.

5.4 Consideration of authorization to advertise for solicitation of public bids for Contract No. CITY-1422, Clark Avenue Widening and Sidewalk Construction and Salt Lake Avenue Sidewalk Construction, for an estimated cost of $531,000.00.

RECOMMENDED ACTION: Approve the plans and specifications and authorize the advertising of sealed bids.

6. CITY MANAGER MATTERS

6.1 Consideration of a participation Agreement Regarding Improvements to Clark Avenue in the City of Industry with C.E.G. Construction for developer contributions to the construction of City Contract No. CITY-1422, Clark Avenue Widening and Sidewalk Construction and Salt Lake Avenue Sidewalk Construction.

RECOMMENDED ACTION: Approve the Agreement.

6.2 Consideration of a Professional Services Agreement between the City of Industry and Waste Systems Technology, Inc. to provide commercial waste reduction and education program, for a budget amount of $198,765.00.

RECOMMENDED ACTION: Approve the Agreement.

CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA
MAY 14, 2015
PAGE NO. 2

6.3 Consideration of a Purchase and Sale Agreement with Joint Escrow Instructions between the City of Industry and Rockledge Equity, LLC, for the sale and disposition of City-owned property located at 804 Azusa Avenue in the City of Industry.

RECOMMENDED ACTION: Approve the Agreement.

6.4 Consideration of Resolution No. CC 2015-08 - A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF INDUSTRY, CALIFORNIA,

AUTHORIZING PARTICIPATION IN THE CALIFORNIA EMPLOYEE

RETIREE BENEFIT TRUST PROGRAM (CERBT) ADMINISTERED BY
CALPERS AND FURTHER AUTHORIZING PREFUNDING OF THE CITY’S

ACTUARIAL LIABILITIES FOR SUCH HEALTH AND OTHER BENEFIT COSTS.

RECOMMENDED ACTION: Adopt Resolution No. CC 2015-08.

6.5 Consideration of an Agreement for Financial Advisory Services between the City of Industry and NHA Advisors, LLC to provide financial advisory services to the City.

RECOMMENDED ACTION: Approve the Agreement.

7. CITY ATTORNEY MATTERS

7.1 Consideration of Ordinance No. 790 - AN ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF INDUSTRY, CALIFORNIA, CONFIRMING THE CITY’S COMPLIANCE WITH (1) THE CALIFORNIA PREVAILING WAGE REQUIREMENTS PROVIDED IN LABOR CODE SECTIONS 1770, ET
SEQ., AND (2) THE CALIFORNIA PROJECT LABOR AGREEMENTS IN PUBLIC CONTRACT CODE SECTIONS 2500, ET SEQ.
(SECOND READING)
RECOMMENDED ACTION: Waive further reading, and adopt
Ordinance No. 790.

8. PLANNING DIRECTOR MATTERS

8.1 Consideration of Development Plan application 15-4 submitted by Facility Builders and Erectors Inc. for an exterior renovation and the addition of a new loading dock to an existing warehouse located at 17788 Rowland Street.

RECOMMENDED ACTION: Approve Development Plan No. 15-4
submitted by Facility Builders and Erectors Inc. based on the findings and Standard Requirements and Conditions.

9. CLOSED SESSION

CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA
MAY 14, 2015
PAGE NO. 3

9.1 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2): Three Potential Cases.

9.2 CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Initiation of litigation pursuant to Government Code Section 54956.9(d)(4):

One Case.

10. Adjournment. Next regular meeting: Thursday, May 28, 2015 at 9:00 a.m.

CITY OF INDUSTRY CITY COUNCIL REGULAR MEETING AGENDA
MAY 14, 2015
PAGE NO. 4

CITY COUNCIL
ITEM NO. 5.1

CITY COUNCIL
ITEM NO. 5.2

CITY COUNCIL REGULAR MEETING MINUTES

CITY OF INDUSTRY, CALIFORNIA
MARCH 12, 2015
PAGE 1

CALL TO ORDER
The Regular Meeting of the City Council of the City of Industry, California, was called to order by Mayor Tim Spohn at 9:00 a.m. in the City of Industry Council Chamber, 15651 East Stafford Street, California.

FLAG SALUTE
The flag salute was led by Mayor Tim Spohn.

ROLL CALL
PRESENT: Tim Spohn, Mayor
Jeff Parriott, Mayor Pro Tern
Roy Haber, Council Member
Pat Marcellin, Council Member
ABSENT: John P. Ferrero, Council Member
STAFF PRESENT: Kevin Radecki, City Manager; Michele Vadon, City Attorney; Cecelia Dunlap, Deputy City Clerk; John Ballas, City Engineer; and Brian James, Planning Director.

MOTION BY COUNCIL MEMBER HABER, AND SECOND BY COUNCIL MEMBER MARCELLIN TO GRANT COUNCIL MEMBER FERRERO AN EXCUSED ABSENCE.

MOTION CARRIED 4-0, WITH COUNCIL MEMBER FERRERO ABSENT.

PUBLIC COMMENTS
There were no public comments.

CONSENT CALENDAR

MOTION BY MAYOR PROTEM PARRIOTT, AND SECOND BY COUNCIL MEMBER

MARCELLIN THAT THE RECOMMENDATIONS BE ACCEPTED FOR THE FOLLOWING ITEMS LISTED ON THE CONSENT CALENDAR. MOTION CARRIED 4-0, WITH COUNCIL MEMBER FERRERO ABSENT.

1. REVIEW OF ACTIONS FOR CITY GOODS AND SERVICES
RECEIVED AND FILED.

CITY COUNCIL REGULAR MEETING MINUTES

CITY OF INDUSTRY, CALIFORNIA
MARCH 12, 2015
PAGE2

2. CONSIDERATION OF THE MINUTES OF THE DECEMBER 11, 2014 CITY COUNCIL AND PLANNING COMMISSION JOINT SPECIAL MEETING.

APPROVED AS SUBMITTED, WITH COUNCIL MEMBER HABER ABSTAINING DUE TO HIS ABSENCE FROM THE MEETING.

3. CONSIDERATION OF THE MINUTES OF THE JANUARY 8, 2015 AND THE JANUARY 22, 2014 REGULAR MEETINGS.

APPROVED AS SUBMITTED.

CLOSED SESSION
Deputy City Clerk Dunlap announced there was a need for Closed Session as follows:

A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code Section 54956.9(d)(2): Three Potential Cases
There were no public comments on the Closed Session item.

Mayor Spohn recessed the meeting into Closed Session at 9:01 a.m.

RECONVENE CITY COUNCIL MEETING
Mayor Spohn reconvened the meeting at 9:50 a.m. All members of the City Council were present except for Council Member Ferrero who was absent.

With regard to Closed Session item A, only two of the three cases were discussed.

With regard to Closed Session item A, Case One, the City Council took no reportable action.

With regard to Closed Session item A, Case Two, the City Council took no reportable action.

ADJOURNMENT
There being no further business, the City Council adjourned.

CITY COUNCIL REGULAR MEETING MINUTES

CITY OF INDUSTRY, CALIFORNIA
MARCH 12, 2015

CECELIA DUNLAP,

DEPUTY CITY CLERK
PAGE3

TIM SPOHN, MAYOR

CITY COUNCIL
ITEM NO. 5.3

CITY COUNCIL
ITEM NO. 5.4

CITY COUNCIL
ITEM NO. 6.1
An Men

20150501-CITY1422 Cost Estimate PAGE 1 OF 1
ESTIMATOR: CHECKED BY:

A.L. JLN

DESCRIPTION OF ITEM
NO.

UNITS
UNIT
MEAS.

1. Saw cut and Remove AC Pavement Including Base 1110 SF $1.00 $1,110.00

2. Cold Milling AC Pavement, 2" Thick 4375 SF $3.00 $13,125.00

3. Saw cut and remove curb and gutter including base 328 LF $15.00 $4,920.00

4. Saw cut and remove driveway/sidewalk/pedestrian ramp including base and integrated curb where it exists
500 SF $1.50 $750.00

5. Remove Catch Basin 1 EA $2,000.00 $2,000.00

6. Unclassified Excavation 105 CY $25.00 $2,625.00

7. Construct AC Pavement 213 Ton $90.00 $19,170.00

8. Construct Crushed Aggregate Base 113 CY $25.00 $2,825.00

9. Install Geofabric Material 340 SY $5.00 $1,700.00

10. Construct A2 curb and gutter per City Standard Plan 112, including aggregate base
301 LF $26.00 $7,826.00

11. Construct sidewalk per City Standard Plan 115, including aggregate base
1382 SF $6.00 $8,292.00

12. Construct pedestrian ramp per City Standard Plan 116 including, Crushed Aggregate Base and Detectable Warning Surface
1 EA $2,500.00 $2,500.00

13. Construct Catch Basin per SPPWC Plan 313-3, Case E 1 EA $5,000.00 $5,000.00

14. Adjust Existing Storm Drain Manhole to Grade 1 EA $500.00 $500.00

15. Relocate Existing Street Sign 2 EA $300.00 $600.00

16. Install 18" RCP 2000D, connector pipe 27 LF $500.00 $13,500.00

17. Install Junction Structure per SPPWC Standard Plan 331-3 1 EA $1,000.00 $1,000.00

18. Pavement Markers, Markings and Traffic Striping 0.5 LS $1,500.00 $750.00

19. Street Lighting 5 EA $4,000.00 $20,000.00
TOTAL $108,193.00
10% CONTINGENCY $10,819.30
GRAND TOTAL $119,012.30
ENGINEER'S ESTIMATE $119,000.00
CNC ENGINEERING DATE PREPARED: JOB NO.:
______________________________ 1/13/2015 COST ESTIMATE SHEET Rev: 5/1/2015 CITY-1422 (MP 13-06) 255 N. Hacienda Blvd., Suite 222
Industry, CA 91744
Tel: (626) 333-0336
ENGINEER/ DESIGNER:

A.L.

PROJECT NAME: Clark Avenue Widening and Sidewalk Construction and Salt Lake Avenue Sidewalk Construction
SCOPE OF WORK/PROJECT DESCRIPTION: 6' widening of Clark Avenue at 9th Avenue and sidewalk construction on Clark Ave and Salt Lake Ave just east of 7th Ave.

Cost Estimate for portion of work adjacent to 733 9th Avenue (AIN 8217003040) ITEM
NO.

QUANTITY
UNIT

PRICE TOTAL COST

CITY COUNCIL
ITEM NO. 6.2

CITY COUNCIL
ITEM NO. 6.3
LA #4846-6018-9219 v1 1

CITY OF INDUSTRY
TO: Honorable Mayor and Members of the City Council
FROM: Kevin Radecki, City Manager
Gregory M. Murphy, Esq.

SUBJECT: APPROVAL OF REAL PROPERTY DISPOSITION
DATE: May 7, 2015

SUMMARY
The City has received an offer from Rockledge Equity, LLC, for the parcel of land located at 804 South Azusa Avenue in the City of Industry consisting of approximately 3.53 net acres, located within the E-Employment General Plan land use designation and the “M”-Industrial Zone (the “Site”). Before City-owned land may be sold, State law requires that City Council find that the disposition is “for the common benefit”.

DISCUSSION
The land use designation for the Site is E-Employment and the zoning is M-Industrial.

The transfer of the Site from the City to Rockledge Equity, LLC, will allow the development of the Site consistent with the land use designation and zoning, providing for the attraction of new business to a currently-undeveloped site, so as to bring new jobs and generate sales tax revenues to the City. In addition, the City will receive the appraised value of the net acreage of the Site, and Rockledge Equity, LLC, has agreed that the billboard currently occupying a portion of the Site will be removed and replaced on other City-owned land prior to the close of escrow.

As required by Government Code 65402(a), the Planning Commission will consider on May 14, 2015 that the disposition of the land is consistent with the City’s General Plan.

FISCAL IMPACT
The Site is proposed to be sold for $3,850,000.00, which is the appraised value.

RECOMMENDATION
It is recommended that the City Council find that the disposition of the Site is “for the common benefit” and approve the attached Purchase and Sale Agreement with Joint Escrow Instructions.

LA #4846-6018-9219 v1 2
Attachments:

Attachment “A” – Purchase and Sale Agreement with Joint Escrow Instructions LA #4840-1685-8914 v1 1

PURCHASE AND SALE AGREEMENT

WITH JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement with Joint Escrow Instructions ("Agreement") is entered as of May 14, 2015 by and between the CITY OF INDUSTRY, a municipal corporation ("Seller") and ROCKLEDGE EQUITY, LLC, a Delaware limited liability company ("Purchaser"), who agree as follows:

Section 1. Recitals.

A. Seller is the owner of certain real property located in the City of Industry, County of Los Angeles, State of California, commonly known as 804 South Azusa Avenue, located at the intersection of Chestnut Street and Anaheim & Puente Road in the City of Industry, a substantial majority of which is more particularly described in attached Exhibit "A". The real property described in Exhibit “A” is referred to in this Agreement as the “Property”.

B. Purchaser now desires to purchase the Property and Seller is willing to sell the Property on the terms and conditions set forth in this Agreement.

C. Seller and Purchaser recognize the presence of an outdoor advertising display structure (“Billboard”) on the Property, and further recognize that the Billboard shall be removed by its owner prior to the Closing Date and relocated to a Seller-controlled site in the vicinity of the Property. Purchaser acknowledges and agrees that it has no right, title, or equity in the proceeds of the Billboard, that the presence of the Billboard on the Property was not a factor inducing Purchaser to enter into this Agreement, and that removal and relocation of the Billboard is consistent with Purchaser’s objects and goals in entering into this Agreement.

Section 2. Agreement to Sell and Purchase.

Seller agrees to sell and Purchaser agrees to purchase the Property on and subject to the terms and conditions contained in this Agreement.

Section 3. Purchase Price; Deposit.

A. The total purchase price ("Purchase Price") for the Property is $25.00 per net square feet or $3,850,000.00, based on a Summary Appraisal Report prepared by The Duncan Appraisal Corporation, dated December 11, 2014 for comparable property located within the City of Industry.

B. Concurrently with the opening of Escrow (as defined in Section 4), Purchaser agrees to deliver to the Escrow Agent (as defined in Section 4) the amount of $38,500.00 to be held by the Escrow Agent as earnest money (the “Deposit”). Upon the close of Escrow, the Deposit and any interest earned on the Deposit while held in Escrow is to be applied to the Purchase Price, and the Escrow Agent is to disburse the Deposit and such interest to Seller upon LA #4840-1685-8914 v1 2
the close of Escrow. Except as otherwise expressly provided in this Agreement, the Deposit is not refundable to Purchaser unless Seller fails to deliver title to the Property to Purchaser in breach of this Agreement.

Section 4. Escrow.

An escrow ("Escrow") shall be opened to consummate the sale of the Property according to the terms of this Agreement with Chicago Title Company, ("Escrow Agent"). The Escrow is to be opened within three (3) business days after the execution of this Agreement by the parties.

A signed counterpart of this Agreement is to be delivered to the Escrow Agent and shall serve as escrow instructions, subject to the provisions of the Escrow Agent's standard conditions for acceptance of escrow, but only to the extent that the standard conditions impose no additional obligations or liabilities on the parties, and further subject to the terms and conditions in this Agreement, the latter to control in the case of conflict. Within five (5) business days after the opening of escrow, Seller agrees to provide Purchaser with copies of documents pertaining to the operation or maintenance of the Property, if any, in the possession of Seller, including licenses, permits, soils reports, surveys, engineer’s reports, environmental reports, plans and specifications, certificates of occupancy, conditional use permits, development plans, contracts and other documents or studies (“Property Documents”). The Property Documents are provided for informational purposes only and without representation or warranty of any kind or nature regarding their significance, accuracy or completeness.

Section 5. Closing Date.

The conveyance of the Property to Purchaser and the close of Escrow are to take place no later than six (6) months after the date the Escrow is opened, or at such earlier or later time as shall be agreed upon in writing by Seller and Purchaser ("Closing Date"). Purchaser agrees that it shall not refuse to extend Escrow for a period of up to an additional six (6) months in order to allow Seller to secure the removal and relocation of the Billboard consistent with the intent of the parties to have that structure removed prior to the Closing Date.

Section 6. Certain Conditions Precedent.

A. Purchaser's obligation to perform under this Agreement and to complete the purchase contemplated herein is subject to the satisfaction, or express written waiver by Purchaser, of the following conditions:
(1) Seller's representations and warranties in this Agreement being correct as of the date of this Agreement and as of the close of Escrow; (2) Seller's performance of all obligations to be performed by Seller under this Agreement;
LA #4840-1685-8914 v1 3
(3) The Title Company (as defined in Section 7) being prepared to issue the Title Policy (as defined in Section 8A) on the close of Escrow, subject only to the Approved Exceptions (as defined in Section 8A); (4) Completion of a Phase I Environmental Assessment (prepared at Purchaser’s expense if not already existing or current); (5) Purchaser’s obtaining from the City of Industry the development and planning approvals required for the construction of a proposed 75,000 square foot 30’ clear building with 5,000 square feet of office space designed to house the corporate office and warehouse facility for a future tenant, including review of said approvals for compliance with the California Environmental Quality Act; and
(6) Completion of a Soils Report (prepared at Purchaser’s expense if not already existing or current).

B. Seller's obligation to perform under this Agreement and to complete the sale contemplated herein is subject to the satisfaction, or express written waiver by Seller, of the following conditions:
(1) Purchaser's representations and warranties in this Agreement being correct as of the date of this Agreement and as of the close of Escrow; and (2) Purchaser's performance of all obligations to be performed by Purchaser under this Agreement.
(3) Approval of this Agreement and the transactions contemplated hereby by the City Council of Seller.
(4) Removal of the Billboard from the Property, which removal shall be at no cost to Purchaser.

Section 7. Due Diligence - Title.

Within five (5) business days following the opening of Escrow, Escrow Agent is to cause Chicago Title Company (“Title Company”) to issue to Purchaser (with a copy to Seller), at Purchaser’s sole cost an expense, a preliminary report for a CLTA (or at Purchaser’s election, an ALTA) Standard Owner's Policy for the Property ("Preliminary Report"), together with copies of all documents relating to title exceptions referred to in the Preliminary Report. Within thirty (30) days after receipt of the Preliminary Report, Purchaser shall give Seller notice in writing of Purchaser’s approval of all matters contained in the Preliminary Report or of any objections which Purchaser may have to matters reported or shown in the Preliminary Report; provided, however, that Purchaser is not entitled to object to any matters affecting title which have been created by or with the consent of Purchaser or any liens or encumbrances arising from any work, LA #4840-1685-8914 v1 4
activities or things done, suffered or permitted by Purchaser on or about the Property, all such matters, liens and encumbrances being conclusively deemed to be Approved Exceptions (as defined in Section 8A). Purchaser and Seller agree that to the extent the presence of the Billboard is reflected in the Preliminary Report, Seller has already agreed to have the Billboard removed from the Property and the Billboard shall not be deemed to be an Approved Exception.

Matters reported or shown in the Preliminary Report not timely objected to by Purchaser as provided above will be conclusively deemed to be Approved Exceptions; provided, however, that Seller agrees that it will discharge or otherwise satisfy, prior to the close of Escrow, all mortgages, deeds of trust, judgment liens, mechanic’s liens, or other monetary liens created by Seller and secured by the Property. Seller has no obligation to cure or correct any matter objected to by Purchaser. However, no later than seven (7) days after receipt of Purchaser’s objections, if any, Seller may elect by giving written notice to Purchaser (the "Cure Notice") to remove some or all of such objectionable matters. If Seller fails to timely deliver a Cure Notice, or if Seller delivers a Cure Notice stating that it will remove less than all of such objectionable matters, then on or prior to five (5) days following Purchaser’s receipt of the Cure Notice, Purchaser may terminate this Agreement without penalty to Purchaser or waive its objections.

Purchaser’s failure to deliver such notice on or prior to five (5) days following Purchaser’s receipt of the Cure Notice will be conclusively deemed to constitute Purchaser’s waiver of its objections to any such objectionable matters which Seller has not so elected to cure. If Purchaser waives its objection as to any matter (or is deemed to have so waived such objection), then such matter will be conclusively deemed to be an Approved Title Exception. If Purchaser terminates this Agreement as provided in this Section, the Deposit together with all interest is to be returned to Purchaser, and Seller and Purchaser will be released from all further liability and obligation under this Agreement, except for those liabilities and obligations which have accrued prior to the date of termination. Upon any such termination, Seller and Purchaser will each pay one-half the amount of any escrow cancellation fees.

Section 8. Close of Escrow.

A. Simultaneously with the close of Escrow, Escrow Agent is to cause the Title Company to issue a CLTA (or, if elected by Purchaser and available without the necessity of delaying the Closing Date, an ALTA) Standard Owner's Policy of Title Insurance ("Title Policy") in the amount of the Purchase Price, subject only to the following matters ("Approved Exceptions"):
(1) A lien for real property taxes, bonds, and assessments not then due; and (2) Matters approved by Purchaser or deemed to be Approved Exceptions in accordance with Section 7.

B. Seller will deposit with Escrow Agent on or prior to the close of Escrow the following documents:

LA #4840-1685-8914 v1 5
(1) A grant deed executed and acknowledged by Seller conveying to Purchaser good and marketable fee simple title to the Property in the form attached to this Agreement as Exhibit “B” ("Deed");
(2) Seller's affidavit of nonforeign status as contemplated by Section 1445 of the Internal Revenue Code of 1986, as amended ("FIRPTA Affidavit"); and
(3) Seller's affidavit as contemplated by the Revenue and Taxation Code §§ 18662 and 18668 ("Withholding Affidavit").

C. Purchaser will deposit with Escrow Agent, on or prior to the close of Escrow the following:
(1) An amount in cash or immediately available funds which when combined with the amount of the Deposit (plus all interest earned on the Deposit while held in Escrow) equals the Purchase Price.

D. On the Closing Date, Escrow Agent is to close Escrow as follows:
(1) Record the Deed (marked for return to Purchaser) with the Los Angeles County Recorder (which shall be deemed delivery to Purchaser); (2) Cause the Title Policy to be issued;
(3) Prorate costs and other charges as provided in Section 8E; (4) Disburse to Seller the Purchase Price less prorated amounts and charges to be paid by or on behalf of Seller;
(5) Charge Purchaser for those costs and expenses to be paid by Purchaser pursuant to this Agreement and disburse any net funds remaining after the preceding disbursements to Purchaser;
(6) Prepare and deliver to both Purchaser and Seller one signed copy of Escrow Agent's closing statement showing all receipts and disbursements of the Escrow; and
(7) Deliver to Purchaser the FIRPTA Affidavit and the Withholding Affidavit.

If Escrow Agent is unable to simultaneously perform all of the instructions set forth above, Escrow Agent is to notify Purchaser and Seller and is to retain all funds and documents pending receipt of further instructions jointly issued by Purchaser and Seller.

E. Escrow Agent is to prorate the following costs at the close of Escrow:

LA #4840-1685-8914 v1 6
(1) Purchaser is to pay
a. All charges in connection with issuance of the Title Policy not required to be paid by Seller under Section 8E(2), and
b. One-half (1/2) of the escrow fee charged by Escrow Agent. (2) Seller is to pay
a. All governmental conveyancing fees and taxes due upon transfer of the Property,
b. The recording charges in connection with recordation of the Deed, c. One-half (1/2) of the escrow fee charged by Escrow Agent, and d. The portion of the premium for the Title Policy attributable to a CLTA Standard Owner’s Policy of Title Insurance.

Section 9. Liquidated Damages.

IN THE EVENT THAT THIS TRANSACTION FAILS TO CLOSE THROUGH PURCHASER’S DEFAULT OR FAILURE TO PERFORM IN ACCORDANCE WITH THIS

AGREEMENT, AND PROVIDED THAT SELLER IS NOT IN DEFAULT UNDER THIS AGREEMENT, THE FULL AMOUNT OF THE DEPOSIT SPECIFIED IN SECTION 3B

ABOVE, TOGETHER WITH ALL ACCRUED INTEREST THEREON, SHALL BE

DELIVERED FROM ESCROW BY THE ESCROW AGENT TO SELLER AS LIQUIDATED

DAMAGES, WHICH SUM PURCHASER AND SELLER AGREE IS A REASONABLE SUM

CONSIDERING THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS

AGREEMENT, INCLUDING THE RELATIONSHIP OF THE SUM TO THE RANGE OF

HARM TO SELLER THAT REASONABLY COULD BE ANTICIPATED, SELLER'S

ANTICIPATED USE OF THE PROCEEDS OF SALE AND THE FACT THAT PROOF OF ACTUAL DAMAGES WOULD BE IMPRACTICABLE. SUCH LIQUIDATED DAMAGES

SHALL BE SELLER'S SOLE REMEDY IN THE EVENT OF PURCHASER'S DEFAULT HEREUNDER; PROVIDED, HOWEVER, THAT THE PROVISIONS OF THIS SECTION SHALL NOT IN ANY WAY LIMIT OR AFFECT SELLER’S RIGHTS TO INDEMNIFICATION UNDER THIS AGREEMENT. IN ADDITION, IF PURCHASER DOES

NOT PROMPTLY RELEASE OR JOIN IN INSTRUCTING ESCROW AGENT TO RELEASE

SAID SUM TO SELLER, AND COOPERATE IN CANCELING THE ESCROW, THEN IN

ADDITION TO SAID SUM SELLER SHALL ALSO BE ENTITLED TO RECOVER FROM PURCHASER (i) ALL OF ITS REASONABLE COSTS AND EXPENSES, INCLUDING BUT NOT LIMITED TO ATTORNEYS’ FEES, COSTS AND EXPENSES, INCURRED IN

OBTAINING SUCH SUM AND IN OBTAINING THE CANCELLATION OF ESCROW, AND (ii) ANY AMOUNTS WHICH WOULD OTHERWISE REDUCE SUCH SUM AND TO LA #4840-1685-8914 v1 7

WHICH ESCROW AGENT IS ENTITLED IN CONNECTION THEREWITH, BY WAY OF INTERPLEADER OR OTHERWISE. IN PLACING THEIR INITIALS AT THE PLACES

PROVIDED, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE

STATEMENTS MADE ABOVE AND ITS UNDERSTANDING OF THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.

SELLER INITIAL HERE: _________
PURCHASER INITIAL HERE: _________
Section 10. Property Conditions -- Due Diligence and Acceptance of AS IS Conditions.

A. “AS IS” Condition. Except for any representations, warranties, and covenants expressly stated by the Seller to the Purchaser in this Agreement, Purchaser agrees that it is purchasing the Property in an “AS IS” condition as of the close of Escrow. Purchaser agrees that as of the close of Escrow, it will have completed its own independent investigation of the existing physical and economic conditions affecting the Property and its use, including, but not limited to, the physical configuration of the Property, any trees, stumps, brush, or other vegetation on the Property, the condition of its soils, the presence or impact of any geologic or hydrologic features and faults, the nature of its lateral and subjacent support, the presence of Hazardous Substances, waste, garbage, rubbish, or refuse on, in, under, or adjacent to the Property, the location of the Property within any flood plain or high risk fire area, the location of public utilities and public improvements on, in, under, or over the Property, the presence, soundness, and habitability of any structures, fixtures, or improvements on or in the Property, the existence of any faults or defects (whether known or unknown, patent or latent), the economic and legal suitability of the Property for the intended use, all market conditions that may affect development and use of the Property, and all actions, orders, and judgments affecting the Property, (collectively, the “Property Conditions”) and either accepted or disapproved of the Property Conditions. Purchaser and Seller agree that the presence of the Billboard is not a Property Condition, as Seller has already agreed to have the Billboard removed from the Property.

B. Investigation of Property Conditions. Within five (5) business days following the opening of Escrow, Seller shall deliver to Purchaser true, correct, and complete copies of all reports, studies, or other documents concerning the Property Conditions including, but not limited to, the Property Documents described in Section 4, all applicable information relating to Hazardous Substances on, in, or under the Property and any current leases, contracts, licenses, profits, permits, or other documents which affect title, possession, or use of the Property, which Seller has in its possession, custody, or control, along with any other information in Seller’s possession or control reasonably requested by Purchaser regarding the Property. Purchaser shall undertake and complete its own independent investigation of the Property Conditions on or before the ninetieth (90th) business day following the opening of Escrow (the “Due Diligence Date.”) As part of its investigation, Purchaser may, at its sole cost and expense, and in its sole and absolute discretion, obtain a Phase I ESA, or other such studies, reports, or investigations as it deems necessary. On or before the Due Diligence Date, Purchaser shall notify Seller in writing LA #4840-1685-8914 v1 8
(“Purchaser’s Property Condition Notice”) of Purchaser’s approval or disapproval, in Purchaser’s sole and absolute discretion, of the Property Conditions. In the event Purchaser has specifically disapproved any Property Conditions, Purchaser’s Property Condition Notice shall include either a request that Seller immediately commence actions to remedy and correct the disapproved Property Conditions or that Purchaser elects to cancel the escrow and terminate the Agreement.

Seller has no obligation to cure or correct any matter objected to by Purchaser. However, no later than seven (7) days after receipt of Purchaser’s Property Condition Notice, Seller may elect, by delivering a written Cure Notice to Purchaser, to remove some or all of such objectionable matters. If Seller fails to timely deliver a Cure Notice, or if Seller delivers a Cure Notice stating that it will remove less than all of such objectionable matters, then on or prior to five (5) days following Purchaser’s receipt of the Cure Notice, Purchaser may terminate this Agreement without penalty to Purchaser or waive its objections. Purchaser’s failure to deliver such notice on or prior to five (5) days following Purchaser’s receipt of the Cure Notice will be conclusively deemed to constitute Purchaser’s waiver of its objections to any such objectionable matters which Seller has not so elected to cure. If Purchaser waives its objection as to any matter (or is deemed to have so waived such objection), then such matter will be conclusively deemed to be approved by Purchaser. If Purchaser terminates this Agreement as provided in this Section, the Deposit together with all interest is to be returned to Purchaser, and Seller and Purchaser will be released from all further liability and obligation under this Agreement, except for those liabilities and obligations which have accrued prior to the date of termination. Upon any such termination, Seller and Purchaser will each pay one-half the amount of any escrow cancellation fees.

C. Right of Entry. Subject to the conditions hereafter stated, Seller grants to Purchaser and its employees, agents, and consultants, a right to enter upon any portion of the Property for the purpose of conducting engineering surveys, soil tests, investigations, a Phase I ESA, or other studies reasonably necessary to evaluate the Property Conditions, which studies, surveys, investigations, and tests shall be done at Purchaser’s sole cost and expense. Purchaser shall indemnify, defend, and hold Seller harmless from and against any claims, injuries, or damages arising out of or in connection with the entry and work performed in this Section.

D. Purchaser hereby expressly acknowledges and agrees that (a) it has the opportunity by and through this Section 10 to thoroughly inspect and examine the Property to the extent deemed necessary by Purchaser in order to enable Purchaser to evaluate and make an informed decision regarding the purchase of the Property and (b) Purchaser will rely solely upon such familiarity with and inspection, examination and evaluation of the Property in purchasing the Property. Purchaser acknowledges and agrees that it will acquire and accept the Property in its “AS-IS AND WITH ALL FAULTS CONDITION,” including, without limitation, any faults and conditions specifically referenced in this Agreement. No person acting on behalf of Seller is authorized to make (and by execution of this Agreement, Purchaser acknowledges and agrees that, except as specifically provided in this Agreement, Seller has not made, does not make and specifically negates and disclaims) any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to:
(1) The value of the Property or the income to be derived from the Property; LA #4840-1685-8914 v1 9
(2) The suitability of the Property for any and all activities and uses which Purchaser may conduct thereon, including any development of the Property;
(3) The nature, quality or condition of the Property, including without limitation, its state of repair, soils, drainage and geology; (4) The compliance of or by the Property with any laws, rules, ordinances or regulations of any applicable governmental authority or body, including, without limitation, compliance with any environmental protection, pollution or land use laws, rules, regulations, orders or requirements;

(5) The presence or absence of Hazardous Substances (as defined below) at, on, under, or adjacent to the Property;
(6) The content, completeness or accuracy of the Preliminary Report and any information or other materials which may have been provided to Purchaser by Seller;
(7) The existence or non-existence of vested land use, zoning or building entitlements affecting the Property; or
(8) Any other matter concerning the Property except as may be otherwise expressly stated in this Agreement, including, without limitation, any and all such matters referenced, discussed or disclosed in any documents delivered by Seller to Purchaser, in any public records of any governmental agency or entity or utility company, or in any other documents available to Purchaser.

B. Effective as of the Closing Date, Purchaser waives, releases, acquits and forever discharges Seller and its officials, officers, employees, agents, attorneys, and any other person acting on behalf of Seller, from and against any and all claims, actions, causes of action, demands, rights, damages, costs, expenses or compensation whatsoever (including without limitation attorneys’ fees and costs), direct or indirect, known or unknown, foreseeable or unforeseeable, which Purchaser now has or which may arise in the future on account of or in any way relating to or connected with any zoning or land use regulations or laws or any other laws, rules or regulations of any governmental entities or instrumentalities applicable to the Property, the value, condition, status, or quality of the Property, and the presence in or on the Property, or under the surface of the Property, of underground storage tanks, asbestos-containing materials, transformers or other equipment containing polychlorinated biphenyls, or any Hazardous Substances. Purchaser agrees to protect, defend, indemnify and hold Seller and its officials, officers, employees, agents, attorneys, and any other person acting on behalf of Seller, and their respective heirs, successors and assigns, free and harmless from and against any and all losses, actual or consequential damages whether foreseeable or not, punitive damages, fines, penalties, LA #4840-1685-8914 v1 10
liabilities, costs (including costs of clean-up or other remediation and required studies), interest, attorney’s fees (including such fees and expenses incurred in enforcing this indemnity), suits, causes of action, legal or administrative proceedings, demands, or claims (including, without limitation, claims for personal injury) made, threatened or asserted by any person, party or governmental entity or agency by reason of or in any way connected with the presence in or on the Property, or under the surface of the Property, of any Hazardous Substance. By initialing below, Purchaser acknowledges that it is aware of, has read, has had explained to it by its attorneys, and understands and expressly waives any and all rights it has or may have under the provisions of California Civil Code § 1542, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE

CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR

AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR

HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
Purchaser’s Initials:

C. To the maximum extent permitted by law, the sale of the Property as provided for herein is made on an “AS IS” condition and basis, “WITH ALL FAULTS,” and Seller has no obligation to make repairs, replacements or improvements except as may otherwise be expressly stated in this Agreement.

D. As used in this Agreement, “Hazardous Substances” means all substances, materials, and wastes that are or become regulated or classified as "hazardous substances," "hazardous wastes," "hazardous materials," "toxic substances," "pollutants," "contaminants" or other similar terms under any federal, state, or local laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements; and any petroleum or refined petroleum product, asbestos, polychlorinated biphenyl, material or substance designated as a hazardous substance pursuant to 33 USC § 1321 or listed pursuant to 33 USC § 1317, any flammable explosive, or and radioactive material.

Section 11. Authority of Parties.

A. Seller represents and warrants that this Agreement:
(1) Has been duly authorized, executed, and delivered by Seller; (2) Is the valid and binding obligation of Seller in accordance with its terms; (3) Does not violate the provisions of any agreement or instrument, or any judgment, order or decree, to which Seller is a party or by which Seller or the Property is bound;
LA #4840-1685-8914 v1 11
(4) Except as disclosed or referenced in the Property Documents delivered to Purchaser by Seller, to Seller’s knowledge (i) no actions, suits or proceedings are pending before any commission, board, bureau, agency, arbitrator, court or tribunal that would affect the Property or the right to occupy or utilize the same, and (ii) Seller has received no notice that any condition of the Property violates applicable laws, rules, regulations covenants, conditions or restrictions or of any unfulfilled order or directive of any applicable governmental agency requiring investigation, remediation, repair or maintenance or improvement to be performed on the Property;
(5) To Seller’s knowledge, no persons shall have any right of possession to the Property or any part thereof other than Purchaser and persons or entities claiming under or through Purchaser.

B. Purchaser represents and warrants that this Agreement:
(1) Has been duly authorized, executed, and delivered by Purchaser; (2) Is the valid and binding obligation of Purchaser in accordance with its terms; and
(3) Does not violate the provisions of any agreement or instrument, or any judgment, order or decree, to which Purchaser is a party or by which Purchaser is bound.

C. Each party warrants and represents to the other that the persons executing this Agreement on its behalf are authorized to do so, and on execution of this Agreement, this Agreement shall be its valid and binding obligation, enforceable against it in accordance with its terms.

Section 12. Brokers.

Purchaser agrees to pay all sales commissions due to DAUM Commercial Real Estate (“Broker”) in connection with this transaction pursuant to the terms of a separate agreement between Purchaser and Broker. Purchaser agrees to defend, indemnify, protect and hold harmless the Seller and its officials, officers, employees, agents, attorneys, and any other person acting on behalf of Seller, from any claims, expenses, costs, or liabilities arising in connection with a breach of Purchaser’s representations, warranties, or covenants under this Agreement.

LA #4840-1685-8914 v1 12
Section 13. Assignment.

Purchaser may not assign this Agreement without Seller’s prior written consent. No assignment by Purchaser shall release Purchaser from any of its liabilities and obligations under this Agreement.

Section 14. Attorney Fees.

If litigation is commenced between the parties, the Prevailing Party in that litigation shall be entitled to recover from the non-prevailing party all reasonable attorney fees and costs. "Prevailing Party" shall include without limitation a party who dismisses an action in exchange for sums allegedly due; the party who receives performance from the other party for an alleged breach of contract or a desired remedy where the performance is substantially equal to the relief sought in an action; or the party determined to be the prevailing party by a court of law.

Section 15. Notices.

All approvals, notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered, delivered by overnight commercial carrier, sent by certified mail, postage prepaid, return receipt requested, or delivered or sent by telecopy and shall be deemed effective upon the earlier of: (i) if personally delivered, the date of delivery to the address of the person set forth below; (ii) if delivered by overnight commercial carrier, one (1) business day following the receipt of such communication by such carrier from the sender, as shown on the sender's delivery receipt from such carrier; (iii) if mailed, on the date of delivery as shown by the sender's certification receipt; or (iv) if given by telecopy, upon electronic confirmation of receipt. Any approval, notice, request, demand, direction or other communication sent by telecopy must be confirmed within forty-eight (48) hours of such sending by letter mailed or delivered in accordance with the foregoing in order to be deemed effective.

Notice of change of address shall be given by written notice in the manner detailed in this Section. The addresses of the Parties are:

To Seller: City of Industry
15625 East Stafford Street #100
City of Industry, California 91744
Attention: City Manager
Fax No.: 626-961-6795
With a copy to: Burke, Williams & Sorensen, LLP
444 South Flower Street, Suite 2400
Los Angeles, California 90071
Attention: Michele R. Vadon, Esq.

Fax No.: 213-236-2700
LA #4840-1685-8914 v1 13
To Purchaser: Rockledge Equity, LLC
2681 Saturn Street
Brea, California 92821
Attn.: Desmond Donnellan
Fax No.: 714-528-4178

Section 16. Entire Agreement.

This Agreement contains the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all prior or contemporaneous agreements and understandings (whether written or oral) of the parties. This Agreement may not be modified in any manner except by an instrument in writing executed by the duly authorized representatives of the parties or of their respective successors in interest.

Section 17. Severability.

If any term or provision of this Agreement is, to any extent, held invalid or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected.

Section 18. Waivers.

Any waiver of a breach of any covenant or condition in this Agreement shall not be deemed a waiver of any other covenant or condition in this Agreement, and no waiver shall be valid unless in writing and executed by the duly authorized representative of the waiving party.

An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act.

Section 19. Construction.

The section headings and captions of this Agreement are, and the arrangement of this instrument is, for the sole convenience of the parties to this Agreement. The section headings, captions, and arrangement of this instrument do not in any way affect, limit, amplify, or modify the terms and provisions of this Agreement. The singular form shall include plural, and vice versa. This Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if both parties have prepared it. Unless otherwise indicated, all references to sections are to this Agreement. All exhibits attached or referred to in this Agreement are a part of this Agreement and incorporated into it by this reference.

Section 20. Merger.

All of the terms, provisions, representations, warranties, and covenants of the parties under this Agreement shall survive the close of Escrow and shall not be merged in the Deed or other documents.

LA #4840-1685-8914 v1 14
Section 21. Counterparts.

This Agreement may be executed in counterparts, each of which is an original but all of which together constitute but one and the same instrument. Signature and acknowledgment pages of this Agreement may be detached from any counterpart and re-attached to any other counterpart of this Agreement which is identical in form hereto but having attached to it one or more additional signature and acknowledgment pages.

Section 22. Time of the Essence.

Time is of the essence in this Agreement.

Section 23. Successors.

Subject to Section 13, this Agreement shall inure to the benefit of and shall be binding upon the parties to this Agreement and their respective heirs, successors, and assigns.

Section 24. Governing Law.

This Agreement shall be governed and construed in accordance with the internal laws of the State of California without regard to principles of conflict of laws.

LA #4840-1685-8914 v1 15
Section 25. Independent Advice of Counsel.

The parties hereto and each of them, represent and declare that in executing this Agreement they relied solely upon their own judgment, belief and knowledge, and the advice and recommendations of their own independently selected counsel, concerning the nature, extent and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the same by any of the parties hereto or by any person representing them, or any of them. The parties hereto, and each of them, further represent and declare that they carefully read this Agreement and know the contents thereof, and that they sign the same freely and voluntarily.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
“SELLER” “PURCHASER”
CITY OF INDUSTRY, a California ROCKLEDGE EQUITY, LLC,
municipal corporation a California limited liability company

By:

Tim Spohn, Mayor Desmond Donnellan
Managing Member
Attest:

Cecelia Dunlap, Deputy City Clerk
Approved As To Form:

Burke, Williams & Sorensen, LLP
By:

Michele R. Vadon, City Attorney
LA #4840-1685-8914 v1 1
EXHIBIT "A"
Legal Description of Property
[TO COME]
LA #4840-1685-8914 v1 1
EXHIBIT “B”
Form of Grant Deed

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Rockledge Equity, LLC
2681 Saturn Street
Brea, California 92821
Attn.: Desmond Donnellan
______________________________________________________________________________ (Above Space for Recorder's Use Only)

GRANT DEED
For a valuable consideration, receipt of which is hereby acknowledged, the CITY OF INDUSTRY, a California municipal corporation ("Grantor"), hereby grants to ROCKLEDGE EQUITY, LLC, a California limited liability company ("Grantee"), the real property in Los Angeles County, State of California, and described in Exhibit 1 attached hereto and made a part hereof.

This conveyance is subject to non-delinquent taxes and assessments, and all matters of record and off-record affecting the Property, including without limitation matters which could be ascertained by an inspection or survey of the Property.

DATED: __________________, 2015 CITY OF INDUSTRY, a California municipal corporation
By:

Tim Spohn, Mayor
Attest:

Cecelia Dunlap, Deputy City Clerk
LA #4840-1685-8914 v1 2

STATE OF CALIFORNIA )
) SS.

COUNTY OF LOS ANGELES )
On this ______ day of _____________________, 2015, before me, _______________________________________________________________________________, (Name of Notary Public)
personally appeared _________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to this instrument, and acknowledged that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument.

NOTARY SEAL
_________________________________
(Signature of Notary Public)

STATE OF CALIFORNIA )
) SS.

COUNTY OF LOS ANGELES )
On this ______ day of _____________________, 2015, before me, _______________________________________________________________________________, (Name of Notary Public)
personally appeared _________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to this instrument, and acknowledged that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument.

NOTARY SEAL
_________________________________
(Signature of Notary Public)
LA #4840-1685-8914 v1 3
EXHIBIT 1
Legal Description
[TO COME]

CITY COUNCIL
ITEM NO. 6.4

MEMORANDUM
To: Mayor and Members of the City Council
From: Dean Yamagata, Contracted Finance Manager
Date: May 14, 2015
Subject: Participation in the California Employers” Retiree Benefit Trust (CERBT) Program and Prefunding of Accrued Liability for Post-Retirement Health and Dental Benefits For Retirees and their Beneficiaires The City of Industry provides post-retirement health and dental care benefits for retirees and their beneficiaries under a single-employer Other Post Employment Benefit ("OPEB") plan. The City is self-insured and pays 100% of all health and dental care benefits. Employees who were hired after April 26, 1990 are provided with a different level of coverage per Resolution No. 1478, which provides 100% coverage after twenty-five years of service. Employees hired prior to April 26, 1990 receive 100% coverage after ten years of service.

The City currently funds the OPEB benefits on a pay-as-you-go basis. As of June 30, 2014, there were eighteen individuals receiving post-retirement benefits from the City. For the year ended June 30, 2014, the City and its component units paid $354,097 in benefits for these individuals.

Government Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, requires government agencies to account for other post-employment benefits, primarily healthcare, on an accrual basis rather than on a pay-as-you-go basis. In order to comply with this accounting standardthe City has engaged Total Compensation Systems, Inc. ("TCS") to analyze the liabilities associated with the OPEB plan.

As of September 1, 2014, TCS has computed the unfunded actuarial accrued liability to be $13,416,543. Actuarial valuations are based on estimates that are likely to change over time. Projections of benefits are based on the nature of benefits provided under the plan at the time of the actuarial valuation and the pattern of cost sharing between the employer and plan members to that point. Actuarial calculations are long-term in nature, and techniques are used to reduce the short-term volatility of actuarial accrued liabilities and the actuarial valuation of assets.

In order to help ensure that there are sufficient funds available to fund the OPEB benefits to be provided for in the future, the City could join the CalPERS administered California Employers’ Retiree Benefit Trust (CERBT) program and prefund up to 100% of the City’s actuarial unfunded liability through June 30, 2015 not to exceed $13,500,000.

This money will be held in a trust and will be invested through the CERBT program and these earnings will help the City to finance the future costs of providing the OPEB benefits. The CERBT offers three diversified asset allocation strategies to employers.

Mayor and Members of the City Council
May 14, 2015

These strategies invest in five common asset classes:
• Global Equity
• Global Public Real Estate
• U.S. Inflation-Linked Bonds
• U.S. Nominal Bonds
• Commodities
Each strategy offers a distinctly different long term expected return and return volatility. These strategies rely on the same underlying set of asset classes. Strategy 1 has the highest long term expected rate of return/return volatility. Strategy 3 has the lowest long term expected rate of return/return volatility. Employers can choose the strategy that best matches the characteristics of their plan and their risk preference.

Strategy 1 Strategy 2 Strategy 3
Expected Return Rate 7.28% 6.73% 6.12%
Standard Deviation of Expected Return 11.74% 9.32% 7.14% Approximately 85% of the total funds invested in the CERBT program is invested in Strategy 1.

The advantages of participation in the CERBT program and prefunding the City’s actuarial accrued liability include: earnings on assets to reduce employer contributions; investment return assumptions, known as discount rate assumptions, that will be higher, making the annual required contribution and unfunded liability lower; preventing the net OPEB obligation from becoming a significant liability on the City’s balance sheet; enhancing the City’s credit rating; and enhancing the financial security of City retirees and their beneficiaries.

In order to participate in the CERBT program, the City needs to submit the documentation outlined in the proposed resolution to CalPERS for its review and approval.

Recommendation
Staff recommends that the Council adopt Resolution No. CC 2015-08, authorizing participation in the CERBT program and the prefunding of the City’s current actuarial accrued liability.

RESOLUTION NO. CC 2015-08

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

INDUSTRY, CALIFORNIA, APPROVING PARTICIPATION IN
THE CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST
(CERBT) AND FURTHER AUTHORIZING THE PREFUNDING OF

ACTUARIAL ACCRUED HEALTH AND OTHER BENEFIT COSTS
THE CITY COUNCIL OF THE CITY OF INDUSTRY RESOLVES AS FOLLOWS:

Section 1. Findings. The City Council finds as follows:

A. The City of Industry provides post-retirement health and dental care benefits for retirees and their beneficiaries after specified years of service under a singleemployer Other Post Employment Benefit ("OPEB") plan.

B. The City is self-insured and pays 100% of all such health and dental care benefits.

C. The City currently funds the OPEB benefits on a pay-as-you-go basis. For the fiscal year ending June 30, 2014, the City and its component units paid $354,097 in OPEB benefits to City retirees and their beneficiaries.

D. Government Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, requires government agencies to account for other post-employment benefits such as healthcare on an accrual basis rather than on a pay-as-you-go basis.

E. The City has engaged Total Compensation Systems, Inc. ("TCS") to analyze the actuarial liabilities associated with the City’s OPEB plan.

F. As of September 1, 2014, TCS has computed the City’s unfunded actuarial accrued liability for the OPEB plan to be $13,416,543.

G. The California Employers' Retiree Benefit Trust (CERBT) Fund – administered by CalPERS - is set up for the purpose of receiving employer contributions that will prefund health and other post-employment benefit costs for retirees and their beneficiaries. By joining this trust fund, California public employers can help finance future costs in large part from the investment earnings provided by CalPERS.

H. The CERBT program allows for prefunding, which enables public agencies to make actuarially determined periodic contributions to partially or completely fund future obligations. The advantages of such prefunding include: earnings on assets to reduce employer contributions; investment return assumptions, known as discount rate assumptions, that will be higher, making the annual required contribution and unfunded liability lower; preventing the net OPEB obligation from becoming a significant liability on the City’s balance sheet; enhancing the City’s credit rating; and enhancing the financial security of City retirees and their beneficiaries.

I. In light of the many benefits provided under the CERBT program, the City Council desires to authorize all actions necessary for the City to participate in the CERBT program, including the prefunding of actuarial accrued liability as provided in this resolution.

Section 2. Authorization to Participate in CERBT Program. The City Council hereby authorizes and directs the Mayor, City Manager, City Attorney, Contract Finance Manager and such other officers, employees or agents of the City as may be required to take or cause to be taken all actions and execute or cause to be executed all documents necessary for the City to participate in the CERBT trust fund program, including but not limited to the following:

A. Having TCS perform a valuation using the OPEB Assumptions Model prescribed by CalPERS and complete and submit the Summary of Actuarial Information Required for CalPERS Financial Statements to CalPERS.

B. Complete and submit the CalPERS Certification of OPEB Actuarial Information and Funding Policy to CalPERS.

C. Complete and submit two original signed copies of the Agreement and Election to Prefund Other Post Employment Benefits to CalPERS. (Attached.)
D. Complete and submit the Delegation of Authority to Request Disbursements to CalPERS. (Attached.)
Section 3. Authorization to Prefund the City’s Unfunded Actuarial Accrued Liability. Upon CalPERS approval of the City’s participation in the CERBT trust fund program, the City Council hereby authorizes and directs the Mayor, City Manager, City Attorney, Contract Finance Manager and such other officers, employees or agents of the City as may be required to take or cause to be taken all actions and execute or cause to be executed all documents necessary for the City to prefund its accrued liability by depositing with the CERBT trust fund program the City’s actuarial accrued liability as determined by the report of actuarial accrued liability as of June 30, 2015, which amount may not exceed $13,500,000 based on the September 1, 2014 report of actuarial accrued liability.

Section 4. Certification. The City Clerk is directed to certify to the passage and adoption of this resolution.

PASSED, APPROVED AND ADOPTED this 14th day of May, 2015.

______________________________
Tim Spohn, Mayor
ATTEST:
______________________________
Cecelia Dunlap, Deputy City Clerk
Rev 5/14/2014
1 a
CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST PROGRAM ("CERBT")

AGREEMENT AND ELECTION
OF
(NAME OF EMPLOYER)

TO PREFUND OTHER POST EMPLOYMENT
BENEFITS THROUGH CalPERS
WHEREAS (1) Government Code Section 22940 establishes in the State Treasury the Annuitants' Health Care Coverage Fund for the prefunding of health care coverage for annuitants (Prefunding Plan); and
WHEREAS (2) The California Public Employees' Retirement System (CalPERS) Board of Administration (Board) has sole and exclusive control and power over the administration and investment of the Prefunding Plan (sometimes also referred to as CERBT), the purposes of which include, but are not limited to (i) receiving contributions from participating employers and establishing separate Employer Prefunding Accounts in the Prefunding Plan for the performance of an essential governmental function (ii) investing contributed amounts and income thereon, if any, in order to receive yield on the funds and (iii) disbursing contributed amounts and income thereon, if any, to pay for costs of administration of the Prefunding Plan and to pay for health care costs or other post employment benefits in accordance with the terms of participating employers' plans; and
WHEREAS (3) _____________________________________________________ (NAME OF EMPLOYER) (Employer) desires to participate in the Prefunding Plan upon the terms and conditions set by the Board and as set forth herein; and
WHEREAS (4) Employer may participate in the Prefunding Plan upon (i) approval by the Board and (ii) filing a duly adopted and executed Agreement and Election to Prefund Other Post Employment Benefits (Agreement) as provided in the terms and conditions of the Agreement; and
WHEREAS (5) The Prefunding Plan is a trust fund that is intended to perform an essential governmental function within the meaning of Section 115 of the Internal Revenue Code as an agent multiple-employer plan as defined in Governmental Accounting Standards Board (GASB) Statement No. 43 consisting of an aggregation of single-employer plans, with pooled administrative and investment functions; Rev 5/14/2014 2

NOW, THEREFORE, BE IT RESOLVED THAT EMPLOYER HEREBY MAKES THE

FOLLOWING REPRESENTATION AND WARRANTY AND THAT THE BOARD AND EMPLOYER AGREE TO THE FOLLOWING TERMS AND CONDITIONS:

A. Representation and Warranty
Employer represents and warrants that it is a political subdivision of the State of California or an entity whose income is excluded from gross income under Section 115 (1) of the Internal Revenue Code.

B. Adoption and Approval of the Agreement; Effective Date; Amendment (1) Employer's governing body shall elect to participate in the Prefunding Plan by adopting this Agreement and filing with the CalPERS Board a true and correct original or certified copy of this Agreement as follows:

Filing by mail, send to: CalPERS
Affiliate Program Services Division

CERBT (OPEB)
P.O. Box 1494
Sacramento, CA 95812-1494
Filing in person, deliver to:

CalPERS Mailroom
Affiliate Program Services Division

CERBT (OPEB)
400 Q Street
Sacramento, CA 95811
(2) Upon receipt of the executed Agreement, and after approval by the Board, the Board shall fix an effective date and shall promptly notify Employer of the effective date of the Agreement.
(3) The terms of this Agreement may be amended only in writing upon the agreement of both CalPERS and Employer, except as otherwise provided herein. Any such amendment or modification to this Agreement shall be adopted and executed in the same manner as required for the Agreement. Upon receipt of the executed amendment or modification, the Board shall fix the effective date of the amendment or modification. (4) The Board shall institute such procedures and processes as it deems necessary to administer the Prefunding Plan, to carry out the purposes of this Agreement, and to maintain the tax exempt status of the Prefunding Plan. Employer agrees to follow such procedures and processes.

Rev 5/14/2014 3
C. Other Post Employment Benefits (OPEB) Cost Reports and Employer Contributions (1) Employer shall provide to the Board an OPEB cost report on the basis of the actuarial assumptions and methods prescribed by the Board. Such report shall be for the Board’s use in financial reporting, and shall be prepared at least as often as the minimum frequency required by GASB 43. This OPEB cost report may be prepared as an actuarial valuation report or, if the employer is qualified under GASB 45 and 57, may be prepared as an Alternative Measurement Method (AMM) report. (a) Unless qualified under GASB 45 and 57 to provide an AMM report, Employer shall provide to the Board an actuarial valuation report. Such report shall be for the Board's use in financial reporting, and shall be prepared at least as often as the minimum frequency required by GASB 43 and 57, and shall be:
1) prepared and signed by a Fellow or Associate of the Society of Actuaries who is also a Member of the American Academy of Actuaries or a person with equivalent qualifications acceptable to the Board;
2) prepared in accordance with generally accepted actuarial practice and GASB 43, 45 and 57; and,
3) provided to the Board prior to the Board's acceptance of contributions for the valuation period or as otherwise required by the Board. (b) If qualified under GASB 45 and 57, Employer may provide to the Board an AMM report. Such report shall be for the Board’s use in financial reporting, shall be prepared at least as often as the minimum frequency required by GASB 43 and 57, and shall be:
1) affirmed by Employer’s external auditor, or by a Fellow or Associate of the Society of Actuaries who is also a Member of the American Academy of Actuaries or a person with equivalent qualifications acceptable to the Board, to be consistent with the AMM process described in GASB 45;
2) prepared in accordance with GASB 43, 45, and 57; and, 3) provided to the Board prior to the Board's acceptance of contributions for the valuation period or as otherwise required by the Board.
(2) The Board may reject any OPEB cost report submitted to it, but shall not unreasonably do so. In the event that the Board determines, in its sole discretion, that the OPEB cost report is not suitable for use in the Board's financial statements or if Employer fails to provide a required OPEB cost report, the Board may obtain, at Rev 5/14/2014 4
Employer's expense, an OPEB cost report that meets the Board’s financial reporting needs. The Board may recover from Employer the cost of obtaining such OPEB cost report by billing and collecting from Employer or by deducting the amount from Employer's account in the Prefunding Plan.
(3) Employer shall notify the Board of the amount and time of contributions which contributions shall be made in the manner established by the Board. (4) Employer contributions to the Prefunding Plan may be limited to the amount necessary to fully fund Employer's actuarial present value of total projected benefits, as supported by the OPEB cost report acceptable to the Board. As used throughout this document, the meaning of the term "actuarial present value of total projected benefits" is as defined in GASB Statement No. 45. If Employer’s contribution causes its assets in the Prefunding Plan to exceed the amount required to fully fund the actuarial present value of total projected benefits, the Board may refuse to accept the contribution. (5) No contributions are required. If an employer elects to contribute then the contribution amount should not be less than $5000 or the employer’s annual required contribution (ARC), whichever amount is lower. Contributions can be made at any time following the seventh day after the effective date of the Agreement provided that Employer has first complied with the requirements of Paragraph C.

D. Administration of Accounts, Investments, Allocation of Income (1) The Board has established the Prefunding Plan as an agent plan consisting of an aggregation of single-employer plans, with pooled administrative and investment functions, under the terms of which separate accounts will be maintained for each employer so that Employer's assets will provide benefits only under employer's plan. (2) All Employer contributions and assets attributable to Employer contributions shall be separately accounted for in the Prefunding Plan (Employer’s Prefunding Account). (3) Employer’s Prefunding Account assets may be aggregated with prefunding account assets of other employers and may be co-invested by the Board in any asset classes appropriate for a Section 115 Trust.
(4) The Board may deduct the costs of administration of the Prefunding Plan from the investment income or Employer’s Prefunding Account in a manner determined by the Board.
(5) Investment income shall be allocated among employers and posted to Employer’s Prefunding Account as determined by the Board but no less frequently than annually. (6) If Employer's assets in the Prefunding Plan exceed the amount required to fully fund the actuarial present value of total projected benefits, the Board, in compliance with applicable accounting and legal requirements, may return such excess to Employer.

Rev 5/14/2014 5
E. Reports and Statements
(1) Employer shall submit with each contribution a contribution report in the form and containing the information prescribed by the Board.
(2) The Board shall prepare and provide a statement of Employer’s Prefunding Account at least annually reflecting the balance in Employer's Prefunding Account, contributions made during the period and income allocated during the period, and such other information as the Board determines.

F. Disbursements
(1) Employer may receive disbursements not to exceed the annual premium and other costs of post employment healthcare benefits and other post employment benefits as defined in GASB 43.
(2) Employer shall notify CalPERS in writing in the manner specified by CalPERS of the persons authorized to request disbursements from the Prefunding Plan on behalf of Employer.
(3) Employer's request for disbursement shall be in writing signed by Employer's authorized representative, in accordance with procedures established by the Board.

The Board may require that Employer certify or otherwise establish that the monies will be used for the purposes of the Prefunding Plan.
(4) Requests for disbursements that satisfy the requirements of paragraphs (2) and (3) will be processed monthly.
(5) CalPERS shall not be liable for amounts disbursed in error if it has acted upon the written instruction of an individual authorized by Employer to request disbursements. In the event of any other erroneous disbursement, the extent of CalPERS' liability shall be the actual dollar amount of the disbursement, plus interest at the actual earnings rate but not less than zero.
(6) No disbursement shall be made from the Prefunding Plan which exceeds the balance in Employer’s Prefunding Account.

G. Costs of Administration
Employer shall pay its share of the costs of administration of the Prefunding Plan, as determined by the Board.

H. Termination of Employer Participation in Prefunding Plan (1) The Board may terminate Employer’s participation in the Prefunding Plan if:

Rev 5/14/2014 6
(a) Employer gives written notice to the Board of its election to terminate; (b) The Board finds that Employer fails to satisfy the terms and conditions of this Agreement or of the Board's rules or regulations.
(2) If Employer’s participation in the Prefunding Plan terminates for any of the foregoing reasons, all assets in Employer’s Prefunding Account shall remain in the Prefunding Plan, except as otherwise provided below, and shall continue to be invested and accrue income as provided in Paragraph D.
(3) After Employer’s participation in the Prefunding Plan terminates, Employer may not make contributions to the Prefunding Plan.
(4) After Employer’s participation in the Prefunding Plan terminates, disbursements from Employer’s Prefunding Account may continue upon Employer’s instruction or otherwise in accordance with the terms of this Agreement. (5) After the Employer’s participation in the Prefunding Plan terminates, the governing body of the Employer may request either:
(a) A trustee to trustee transfer of the assets in Employer’s Prefunding Account; provided that the Board shall have no obligation to make such transfer unless the Board determines that the transfer will satisfy applicable requirements of the Internal Revenue Code, other law and accounting standards, and the Board’s fiduciary duties. If the Board determines that the transfer will satisfy these requirements, the Board shall then have one hundred fifty (150) days from the date of such determination to effect the transfer. The amount to be transferred shall be the amount in the Employer's Prefunding Account as of the date of the transfer (the “transfer date”) and shall include investment earnings up to an investment earnings allocation date preceding the transfer date. In no event shall the investment earnings allocation date precede the transfer date by more than 150 days.
(b) A disbursement of the assets in Employer’s Prefunding Account; provided that the Board shall have no obligation to make such disbursement unless the Board determines that, in compliance with the Internal Revenue Code, other law and accounting standards, and the Board’s fiduciary duties, all of Employer's obligations for payment of post-employment health care benefits and other post-employment benefits and reasonable administrative costs of the Board have been satisfied. If the Board determines that the disbursement will satisfy these requirements, the Board shall then have one hundred fifty (150) days from the date of such determination to effect the disbursement. The amount to be disbursed shall be the amount in the Employer’s Prefunding Account as of the date of the disbursement (the “disbursement date”) and shall include investment earnings up to an investment earnings allocation date Rev 5/14/2014 7
preceding the disbursement date. In no event shall the investment earnings allocation date precede the disbursement date by more than 150 days.
(6) After Employer’s participation in the Prefunding Plan terminates and at such time that no assets remain in Employer’s Prefunding Account, this Agreement shall terminate.
(7) If, for any reason, the Board terminates the Prefunding Plan, the assets in Employer’s Prefunding Account shall be paid to Employer after retention of (i) amounts sufficient to pay post employment health care benefits and other post employment benefits to annuitants for current and future annuitants described by the employer’s current substantive plan (as defined in GASB 43), and (ii) amounts sufficient to pay reasonable administrative costs of the Board.
(8) If Employer ceases to exist but Employer’s Prefunding Plan continues to exist and if no provision has been made by Employer for ongoing payments to pay post employment health care benefits and other post employment benefits to annuitants for current and future annuitants, the Board is authorized to and shall appoint a third party administrator to carry out Employer's Prefunding Plan. Any and all costs associated with such appointment shall be paid from the assets attributable to contributions by Employer.
(9) If Employer should breach the representation and warranty set forth in Paragraph A., the Board shall take whatever action it deems necessary to preserve the tax-exempt status of the Prefunding Plan.

I. General Provisions
(1) Books and Records.

Employer shall keep accurate books and records connected with the performance of this Agreement. Employer shall ensure that books and records of subcontractors, suppliers, and other providers shall also be accurately maintained. Such books and records shall be kept in a secure location at the Employer's office(s) and shall be available for inspection and copying by CalPERS and its representatives. (2) Audit.
(a) During and for three years after the term of this Agreement, Employer shall permit the Bureau of State Audits, CalPERS, and its authorized representatives, and such consultants and specialists as needed, at all reasonable times during normal business hours to inspect and copy, at the expense of CalPERS, books and records of Employer relating to its performance of this Agreement.
(b) Employer shall be subject to examination and audit by the Bureau of State Audits, CalPERS, and its authorized representatives, and such Rev 5/14/2014 8
consultants and specialists as needed, during the term of this Agreement and for three years after final payment under this Agreement. Any examination or audit shall be confined to those matters connected with the performance of this Agreement, including, but not limited to, the costs of administering this Agreement. Employer shall cooperate fully with the Bureau of State Audits, CalPERS, and its authorized representatives, and such consultants and specialists as needed, in connection with any examination or audit. All adjustments, payments, and/or reimbursements determined to be necessary by any examination or audit shall be made promptly by the appropriate party.
(3) Notice.
(a) Any notice, approval, or other communication required or permitted under this Agreement will be given in the English language and will be deemed received as follows:

1. Personal delivery. When personally delivered to the recipient.

Notice is effective on delivery.

2. First Class Mail. When mailed first class to the last address of the recipient known to the party giving notice. Notice is effective three delivery days after deposit in a United States Postal Service office or mailbox.

3. Certified mail. When mailed certified mail, return receipt requested.

Notice is effective on receipt, if delivery is confirmed by a return receipt.

4. Overnight Delivery. When delivered by an overnight delivery service, charges prepaid or charged to the sender's account, Notice is effective on delivery, if delivery is confirmed by the delivery service.

5. Telex or Facsimile Transmission. When sent by telex or fax to the last telex or fax number of the recipient known to the party giving notice. Notice is effective on receipt, provided that (i) a duplicate copy of the notice is promptly given by first-class or certified mail or by overnight delivery, or (ii) the receiving party delivers a written confirmation of receipt. Any notice given by telex or fax shall be deemed received on the next business day if it is received after 5:00 p.m. (recipient's time) or on a nonbusiness day.

6. E-mail transmission. When sent by e-mail using software that provides unmodifiable proof (i) that the message was sent, (ii) that the message was delivered to the recipient's information processing system, and (iii) of the time and date the message was delivered to Rev 5/14/2014 9
the recipient along with a verifiable electronic record of the exact content of the message sent.

Addresses for the purpose of giving notice are as shown in Paragraph B.(1) of this Agreement.
(b) Any correctly addressed notice that is refused, unclaimed, or undeliverable because of an act or omission of the party to be notified shall be deemed effective as of the first date that said notice was refused, unclaimed, or deemed undeliverable by the postal authorities, messenger or overnight delivery service.
(c) Any party may change its address, telex, fax number, or e-mail address by giving the other party notice of the change in any manner permitted by this Agreement.
(d) All notices, requests, demands, amendments, modifications or other communications under this Agreement shall be in writing. Notice shall be sufficient for all such purposes if personally delivered, sent by first class, registered or certified mail, return receipt requested, delivery by courier with receipt of delivery, facsimile transmission with written confirmation of receipt by recipient, or e-mail delivery with verifiable and unmodifiable proof of content and time and date of sending by sender and delivery to recipient. Notice is effective on confirmed receipt by recipient or 3 business days after sending, whichever is sooner.
(4) Modification
This Agreement may be supplemented, amended, or modified only by the mutual agreement of the parties. No supplement, amendment, or modification of this Agreement shall be binding unless it is in writing and signed by the party to be charged. (5) Survival
All representations, warranties, and covenants contained in this Agreement, or in any instrument, certificate, exhibit, or other writing intended by the parties to be a part of their Agreement shall survive the termination of this Agreement until such time as all amounts in Employer's Prefunding Account have been disbursed. (6) Waiver
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy shall be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies.

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(7) Necessary Acts, Further Assurances
The parties shall at their own cost and expense execute and deliver such further documents and instruments and shall take such other actions as may be reasonably required or appropriate to evidence or carry out the intent and purposes of this Agreement.

A majority vote of Employer’s Governing Body at a public meeting held on the ______ day of the month of __________________ in the year _________, authorized entering into this Agreement.

Signature of the Presiding Officer: ________________________________________ Printed Name of the Presiding Officer: _____________________________________ Name of Governing Body: ______________________________________________ Name of Employer: ___________________________________________________ Date: _______________________________

BOARD OF ADMINISTRATION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
BY_____________________________________

JOHN SWEDENSKY

AFFILIATE PROGRAM SERVICES DIVISION
CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
To be completed by CalPERS
The effective date of this Agreement is: _________________________

DELEGATION OF AUTHORITY

TO REQUEST DISBURSEMENTS
OPEB Delegation of Authority (1/13)

RESOLUTION
OF THE
(GOVERNING BODY)
OF THE
(NAME OF EMPLOYER)
The delegates to the incumbents
(GOVERNING BODY)
in the positions of and
(TITLE)
and/or
(TITLE)
authority to request on
(TITLE)
behalf of the Employer disbursements from the Other Post Employment Prefunding Plan and to certify as to the purpose for which the disbursed funds will be used.

By
Title
Witness
Date

CITY COUNCIL
ITEM NO. 6.5
12739-0003\1789654v2.doc 1

AGREEMENT FOR FINANCIAL ADVISORY SERVICES
This AGREEMENT FOR FINANCIAL ADVISORY SERVICES (this “Agreement”), dated as of ____________, 2015, is made by and between the CITY OF INDUSTRY (the “City”) and NHA Advisors, LLC (the “Financial Advisor,” and together with the City, the “Parties,” with each being a “Party”).

RECITALS
A. The City of Industry and its related entities (including but not limited to the City of Industry Public Facilities Authority) have issued bonds from time to time, and in such connection, required the assistance of a financial advisor with respect to the issuance of such bonds and the post-issuance administration of such bonded debt.

B. NHA Advisors, LLC, provides financial advisory services to municipal entities in the State of California.

C. NHA Advisors, LLC has represented to the City that NHA Advisors, LLC is qualified to accomplish the services required of the Financial Advisor under this Agreement.

D. The City wishes to engage NHA Advisors, LLC, to provide financial advisory services to the City in accordance with this Agreement.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Services to be Provided. The Financial Advisor shall perform the Scope of Work described in Exhibit A.

2. Legal Qualifications. The Financial Advisor represents and warrants that the Financial Advisor is a registered municipal advisor with the United States Securities and Exchange Commission and the Municipal Securities Rulemaking Board (the “MSRB”).

Throughout the term of this Agreement, the Financial Advisor shall maintain all licenses, permits, certificates and other legal qualifications (if any) necessary for the provision of services under this Agreement.

3. Professional Standards; IRMA Disclosure.

A. The Financial Advisor represents and warrants that Financial Advisor has the expertise and skills necessary to undertake the services to be provided under this Agreement.

The Financial Advisor shall perform all tasks under this Agreement faithfully, competently and to the best of the Financial Advisor ability, experience and talent. 12739-0003\1789654v2.doc 2
B. Financial Advisor is an independent registered municipal advisor (“IRMA”) and, as an IRMA, must provide certain disclosures required by MSRB regulations that became effective July 1, 2014. In accordance with those proposed regulations, Financial Advisor makes the following disclosures:
• Financial Advisor is not aware of any actual or potential conflicts of interest that might impair Financial Advisor’s ability either to render unbiased and competent advice to the City or to fulfill the Financial Advisor’s fiduciary duty to the City.
• Financial Advisor has no affiliate that provides any advice, service, or product to or on behalf of the City.
• Financial Advisor has not made any payments either directly or indirectly to obtain or retain business with the City.
• There is no additional compensation Financial Advisor will receive in connection with this Agreement other than what is stipulated within this Agreement. Financial Advisor has not and will not receive any payments from third parties in connection with this engagement.
• Financial Advisor has not and will not enter into any fee-splitting arrangements with any provider of investments or services to the City.
• Financial Advisor is not aware of any conflicts of interest that may arise from the City’s payment of the municipal advisory fee for the activities to be performed pursuant to this engagement. • To the best of its knowledge, none of Financial Advisor’s other engagements or relationships will impair Financial Advisor’s ability either to render unbiased and competent advice to the City or to fulfill Financial Advisor’s fiduciary duty to the City. • Financial Advisor is not aware of any legal or disciplinary event that is material to the City’s evaluation of Financial Advisor or the integrity of its management or advisory personnel.
• No legal or disciplinary event has been disclosed by Financial Advisor to the Securities and Exchange Commission as may be required under applicable rules or regulations
12739-0003\1789654v2.doc 3
C. As an IRMA, the Financial Advisor shall act in accordance with its fiduciary duty in the following manner:
• Financial Advisor will work solely in the interest of the City. • With respect to the evaluation of any financing transaction, Financial Advisor has the duty to fairly assess whether the financing terms and covenants are favorable to the City. • With respect to the evaluation of any financing transaction, Financial Advisor has duty to fairly assess whether the rates and yields are favorable.
• To the extent that the Financial Advisor is requested by the City to assist with respect to any financing transaction under this Agreement, Financial Advisor represents to the City that it has sufficient knowledge of the municipal bond market to negotiate the transaction(s) in the best interests of the City.

4. Responsible Principal. Eric J. Scriven, who is a principal at NHA Advisors, LLC, shall be principally responsible for the Financial Advisor’s obligations under this Agreement and shall serve as the principal liaison between the City and the Financial Advisor.

Designation of another Responsible Principal by the Financial Advisor shall not be made without prior written approval of the City Manager.

5. Term of Agreement. This Agreement shall terminate on [June 30, 2020] unless earlier terminated pursuant to the terms of this Agreement.

6. Compensation. The City’s payment to the Financial Advisor for services rendered pursuant to this Agreement, and for reimbursement of expenses directly related to such services, shall be in accordance with the provisions set forth in Exhibit B.

7. Insurance Requirements.

A. Throughout the term of this Agreement (and for periods after the end of this Agreement if required below), the Financial Advisor must have and maintain in place all of the insurance coverages required in this Section 7. The Financial Advisor’s insurance shall comply with all items specified by this Agreement. Any subcontractor (to the extent permitted under Section 8) shall be subject to all of the requirements of this Section 7 and the Financial Advisor shall be responsible to obtain evidence of insurance from each subcontractor and provide it to the City before the subcontractor commences work. 12739-0003\1789654v2.doc 4
B. All insurance policies used to satisfy the requirements imposed hereunder shall be issued by insurers authorized to do business in the State of California. Insurers shall have a current A.M. Best’s rating of not less than A-:VII unless otherwise approved by the City.

C. Unless otherwise approved by the City Manager, the Financial Advisor shall maintain the types of coverages and limits indicated below:
1) COMMERCIAL GENERAL LIABILITY INSURANCE - a policy
for occurrence coverage, including all coverages provided by and to the extent afforded by Insurance Services Office Form CG 0001 ed. 11/88 or 11/85, with no special limitations affecting the City. The limit for all coverages under this policy shall be no less than $1,000,000 per occurrence. The City, its employees, officials and agents, shall be added as additional insureds by endorsement to the policy. The insurer shall agree to provide the City with 30 days prior written notice of any cancellation, non-renewal or material change in coverage. The policy shall contain no provision that would make this policy excess over, contributory with, or invalidated by the existence of any insurance, self-insurance or other risk financing program maintained by the City. In the event the policy contains such an “other insurance” clause, the policy shall be modified by endorsement to show that it is primary for any claim arising out of the work performed under this Agreement.
2) COMMERCIAL AUTO LIABILITY INSURANCE - a policy
including all coverages provided by and to the extent afforded by Insurance Services Office form CA 0001, ed. 12/93, including Symbol 1 (any auto) with no special limitations affecting the City.

The limit for bodily injury and property damage liability shall be no less than $1,000,000 per accident. The City, its employees, officials and agents, shall be added as additional insureds by endorsement to the policy. The insurer shall agree to provide the City with 30 days prior written notice of any cancellation, non-renewal or material change in coverage. The policy shall contain no provision that would make this policy excess over, contributory with, or invalidated by the existence of any insurance, self-insurance or other risk financing program maintained by the City.

In the event the policy contains such an “other insurance” clause, the policy shall be modified by endorsement to show that it is primary for any claim arising out of the work performed under this Agreement.
3) WORKERS’ COMPENSATION INSURANCE – coverage for the
Financial Advisor to insure against all statutory benefit requirements of the Labor Code, or other applicable law, of the State of California. The minimum coverage limits of any required policy shall be no less than $1,000,000 per claim. Any required policy shall contain or be endorsed to include a waiver of subrogation in favor of the City.
4) PROFESSIONAL ERRORS & OMISSIONS - a policy with
minimum limits of $1,000,000 per claim and in the aggregate. This policy shall be issued by an insurance company which is qualified to do business in the State of California and contain a 12739-0003\1789654v2.doc 5
clause that the policy may not be canceled until 30 days written notice of cancellation is mailed to the City. The Financial Advisor agrees to maintain in full force and effect such insurance for one year after performance of work under this Agreement is completed.

D. Additional Requirements. The procuring of such required policies of insurance shall not be construed to limit the Financial Advisor’s liability under this Agreement nor to fulfill the indemnification provisions and requirements of this Agreement. There shall be no recourse against the City for payment of premiums or other amounts with respect to such required insurance. The City shall notify the Financial Advisor in writing of changes in the insurance requirements. If the Financial Advisor does not deposit copies of acceptable insurance policies with the City incorporating such changes within 60 days of receipt of such notice, the Financial Advisor shall be deemed in default under this Agreement.

E. Any deductibles or self-insured retentions must be declared to and approved by the City. Any deductible exceeding an amount acceptable to the City shall be subject to the following changes: either the insurer shall eliminate or reduce such deductibles or self-insured retentions with respect to the City and its officials, employees and agents (with additional premium, if any, to be paid by the Financial Advisor); or the Financial Advisor shall provide satisfactory financial guarantee for payment of losses and related investigations, claim administration and defense expenses.

F. Verification of Compliance. The Financial Advisor shall furnish the City with original endorsements effecting coverage required by this Agreement. The endorsements are to be signed by a person authorized by the insurer to bind coverage on its behalf. All endorsements are to be received and approved by the City before work commences. Not less than 15 days prior to the expiration date of any policy of insurance required by this Agreement, the Financial Advisor shall deliver to the City a binder or certificate of insurance with respect to each renewal policy, bearing a notation evidencing payment of the premium therefor, or accompanied by other proof of payment satisfactory to the City.

8. Limitations Upon Subcontracting and Assignment. This Agreement shall not be assigned or subcontracted in whole or in part, by the Financial Advisor without the prior written approval of the City Manager. Any attempt by the Financial Advisor to so assign or subcontract this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect.

Regardless of the City’s consent or awareness that certain work under this Agreement is being performed by a subcontractor, the Financial Advisor shall remain responsible and liable to the City for all such work under this Agreement. The Financial Advisor shall be responsible for all compensation to any subcontractor, and the City shall not become liable to the subcontractor whatsoever by virtue of such subcontract. The Financial Advisor shall comply with the provisions of Section 7 with respect to the insurance from each subcontractor. Prior to the commencement of work by any subcontractor, the Financial Advisor shall obtain the subcontractor’s written agreement that, with respect to the work to be performed under such 12739-0003\1789654v2.doc 6
subcontract, the subcontractor shall comply with the provisions of Sections 7 through 15 of this Agreement to the same degree that the Financial Advisor is obligated under this Agreement.

9. Ownership of Information and Documents. As between the Financial Advisor and the City, all documents, tables, data, studies, surveys, drawings, maps, models, photographs, presentations, records, reports or other information created, developed or received by the Financial Advisor in connection with this Agreement shall be the property of the City. The Financial Advisor shall promptly provide the City with copies of these items upon demand. The City may use all or any portion of work submitted by the Financial Advisor as the City deems appropriate.

10. Confidentiality. The Financial Advisor may receive confidential information from the City during the course of the Financial Advisor’s performance under this Agreement.

To the extent that the City provides the Financial Advisor any confidential information, the Financial Advisor shall maintain such confidentiality, shall not disclose or make available the information to third parties except under the following circumstances: (i) the Financial Advisor has obtained the City’s prior written approval for the disclosure, or (ii) the Financial Advisor is required by law to make the disclosure (in which case, such disclosure shall be limited to the extent required by law and the Financial Advisor shall notify City as soon as possible upon learning its obligation to disclose).

11. Conflict of Interest. The Financial Advisor affirms that it presently has no interest and shall not have any interest, direct or indirect, which would conflict in any manner with the performance required under this Agreement. The Financial Advisor shall at all times avoid conflicts of interest or appearance of conflicts of interest in the performance of this Agreement.

12. Independent Contractor. The Financial Advisor is and shall at all times remain as to the City a wholly independent contractor.

A. The personnel performing the services under this Agreement on behalf of the Financial Advisor shall at all times be under the Financial Advisor’s exclusive direction and control. Neither the City nor any of its agents shall have control over the conduct of the Financial Advisor, except as expressly provided under this Agreement. The Financial Advisor shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. The Financial Advisor shall not incur or have the power to incur any debt, obligation or liability whatsoever against the City, or bind the City in any manner.

B. No employee benefits shall be available to the Financial Advisor in connection with the performance of this Agreement. Except for the fees paid to the Financial Advisor as provided in this Agreement, the City shall not pay salaries, wages, or other 12739-0003\1789654v2.doc 7
compensation to the Financial Advisor for performing services under this Agreement. The City shall not be liable for compensation or indemnification to the Financial Advisor for injury or sickness arising out of performing services under this Agreement. The Financial Advisor shall have the sole legal responsibility to remit all federal and state income and social security taxes and to provide for workers compensation and unemployment insurance for Financial Advisor’s employees or subcontractors.

13. Non-Discrimination. The Financial Advisor covenants there shall be no discrimination based upon race, color, creed, religion, sex, marital status, age, handicap, national origin, or ancestry, in any activity pursuant to this Agreement.

14. Compliance with Laws. The Financial Advisor shall comply with all applicable laws, ordinances, codes, and regulations of the federal, state, and local government.

15. Indemnification. The Financial Advisor agrees to indemnify, defend, and hold harmless the City and its elective or appointive boards, officers, agents, attorneys and employees from any and all claims, liabilities, expenses, or damages of any nature, including attorneys’ fees, arising out of the negligence or intentional misconduct of the Financial Advisor, the Financial Advisor’s agents, officers, employees, subcontractors, or independent contractors hired by the Financial Advisor. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by the Financial Advisor.

16. Termination. In the event that Financial Advisor fails to comply with any provision of this Agreement, and if such default is not cured within five days after the City’s written notice of default specifying the nature of such default, the City may immediately terminate this Agreement by written notice. In addition, each of the City and the Financial Advisor shall have the right to terminate this Agreement, without cause, by giving written notice to the other party at least ten days before the termination date.

No later than 30 days after the date of termination of this Agreement (the “Termination Date”), the Financial Advisor shall provide a final invoice to the City for all expenses that have been incurred, but have not been previously reimbursed, through the Termination Date. Other than as provided in this paragraph, the Financial Advisor shall not be entitled to any fee pursuant this Agreement after the Termination Date.

17. Waivers. No waiver of any of the provisions of this Agreement shall be deemed to constitute a waiver of any other provision of this Agreement, nor shall such waiver constitute a continuing waiver of such provision unless otherwise expressly provided.

18. City Not Obligated to Third Parties. The City shall not be obligated or liable under this Agreement to any party other than the Financial Advisor. 12739-0003\1789654v2.doc 8

19. Non-Liability of Officials and Employees of City. No official or employee of the City shall be personally liable for any default or liability under this Agreement.

20. Governing Law. The interpretation and implementation of this Agreement shall be governed by the domestic law of the State of California.

21. Litigation Venue and Expenses. Any litigation concerning this Agreement shall take place in the municipal, superior, or federal district court with geographic jurisdiction over the City of Industry. In the event such litigation is filed by one Party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the Court’s judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted.

22. Severability. Invalidation of any provision contained in this Agreement or the application thereof to any person or entity by judgment or court order shall in no way affect any of the other covenants, conditions, restrictions, or provisions hereof, or the application thereof to any other person or entity, and the same shall remain in full force and effect.

23. Amendment. This Agreement may not be modified, altered or amended except in writing signed by the City and the Financial Advisor.

24. Entire Agreement. This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each Party is entering into this Agreement based solely upon the representations set forth herein and upon each Party’s own independent investigation of any and all facts such party deems material. In the event of a conflict between the provisions of this Agreement and the exhibits hereto, the text of this Agreement shall prevail. This Agreement shall be interpreted as though prepared by both Parties.

Any issue with respect to the interpretation or construction of this Agreement is to be resolved without resorting to the presumption that ambiguities should be construed against the drafter.

25. Survival of Certain Provisions. The provisions of Sections 7(C)(4), 9, 10, 12, 15 through 26 shall survive the termination of this Agreement.

26. Notices. All notices and other communications provided under this Agreement may be in hard copy or in electronic or telephonic form (including e-mail, fax or similar means) and shall be given to the party to whom sent at the address set forth below or other address, email address or telephone or fax number as such party may hereafter specify. Each such notice or communication shall be effective (i) if given by telephone, fax, e-mail or other electronic means, when such communication is transmitted to the specified address and any appropriate answerback or confirmation is received, (ii) if given by certified or registered mail, return receipt requested, on the date of receipt appearing on the return postal receipt for notices given by certified or registered mail, (iii) if given by hand delivery, when delivered at the specified address. The address for receipt of notices may be changed upon written notice delivered in a 12739-0003\1789654v2.doc 9
manner consistent with this section.

To Financial Advisor: NHA Advisors, LLC
4040 Civic Center Drive, Suite 200
San Rafael, CA 94903
Attention: Eric J. Scriven, Principal
Telephone: (415) 785-2025
E-mail: [email protected]
To City: City to the Industry
15625 East Stafford Street #100
City of Industry, CA 91744
Attention: Kevin Radecki, City Manager
Telephone: (626) 333-2211
E-mail: [email protected]
IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be executed this Agreement by their duly authorized representative as of the date first shown above.

CITY OF INDUSTRY
By:

Kevin Radecki
City Manager

NHA ADVISORS, LLC
By:

Eric J. Scriven
Principal

12739-0003\1789654v2.doc A-1

EXHIBIT A

SCOPE OF WORK
The Financial Advisor shall provide financial advisory services to the City, including but not limited to the performance of the following:

1. Each year, assist the City with the formulation and preparation of documents to establish the applicable tax rate to generate sufficient property tax override revenues to pay the City’s outstanding general obligation bonds and otherwise comply with bond covenants

2. Upon request of City Staff, assist with the development of reports or presentations appropriate for the administration of outstanding bonded debt of the City or Cityaffiliated entities

3. Upon the request of City Staff, review and provide analysis with respect specified components of the City’s debt portfolio and financial obligations.

4. At the request or upon approval of the City Manager, identify refunding opportunities for outstanding debt of the City or City-affiliated entities, or evaluate refunding proposals submitted by third parties.

5. At the request of the City, provide services customarily provided by a financial advisor in connection with a specified bond issuance or similar financing or refunding transaction (a “Financing Transaction”), including but not limited to:
• Provide recommendations to the City regarding the selection of any additional third party financing team members that may be necessary or appropriate for implementation of the Financing Transaction, and regarding the contract terms with such third parties (including pricing and scope of services)
• Make recommendations to the City regarding financing structures for the Financing Transaction, provide evaluation of proposals by any underwriter regarding the financing structures, and work with financing team members with respect to the implementation of the financing structures selected by the City
• Monitor and provide updates to the City on municipal bond market movements and make recommendations to the City regarding financial feasibility, financing document covenants, and pricing
12739-0003\1789654v2.doc A-2
• Work with City Staff and financing team members selected by the City to develop reports, presentation and other documents appropriate for the implementation of the Financing Transaction
• Review reports of fiscal consultants, accountants and other consultants and provide comments and recommendations regarding assumptions, analytic methods and conclusion contained in such reports
• Make recommendations to the City regarding scheduling and organization of document review sessions, financing team meetings, meetings with other third parties (such rating agencies, bond insurers and any other credit or liquidity providers)
• Attend all meetings related to the Financing Transaction per the request of the City, including meetings of the City Council and assist City with presentations relating to the Financing Transaction at such meetings • Review draft bond documents and provide comments to City and Bond Counsel or Special Counsel regarding financial and nonfinancial covenants
• Work with disclosure counsel in the preparation of the offering documents and review all appropriate financing documents
• Make recommendations regarding the selection of rating agencies, bond insurers and other liquidity or credit providers, if any, and assist in the furnishing of materials and date to the same
• Analyze rating criteria and its application to gauge credit quality and bracketing interest rates for Financing Transaction
• Review pricing terms proposed by the underwriters and advise the City during negotiations with underwriters.
• Work with the underwriters to recommend timing of the pricing and closing of the Financing Transaction.
• Work with bond counsel or special counsel and underwriters, if any, in the preparation of appropriate closing memoranda
• Coordinate with financing team with respect to pre-closing and closing procedures
12739-0003\1789654v2.doc A-3
• Assist the City in evaluating the investment of Financing Transaction proceeds for the refunding escrow, debt service fund and other bondrelated funds • Conduct post issuance reviews as requested by the City • Provide a written report to City summarizing salient financial and credit features and refinancing results after the closing of each Financing Transaction

6. Provide other financial advisory services reasonably requested by the City 12739-0003\1789654v2.doc B-1

EXHIBIT B

COMPENSATION SCHEDULE AND PAYMENT METHOD
A. FEES AND EXPENSES (EXCEPT FOR WORK IN CONNECTION SPECIFIED

FINANCING TRANSACTIONS)
1) Hourly Rates
Except as provided in Section B, the City shall pay the Financial Advisor based on the hourly rates set forth in the following table, subject to a maximum of $[20,000.00] in any calendar year, unless approved in advance by the City Manger; provided, that the hourly rates and annual maximum may be periodically adjusted as described in subsection 2 below:

Principal $275.00
Vice President $225.00
Associate $175.00
Analyst $125.00
Administrative Staff $75.00

2) Periodic Adjustments to Hourly Rates
From time to time (but not more than once during any 12-month period), the Financial Advisor may propose increases to the hourly rates and the annual maximum amount to be charged for services under this Agreement, provided, that such increases shall be no more than five percent (5%) of the immediately preceding rates and shall become effective and binding only after the written approval of the City Manager. Upon the effectiveness of the increased rates, a new schedule of hourly rates and annual maximum shall be attached and made a part of the Agreement, and kept on file with the City Clerk. 3) Out-of-pocket expenses:

In addition to the fees described above, the City shall reimburse the Fiscal Advisor for out-of-pocket expenses directly related to such work (“Directly Related Job Expenses”), which include: travel expenses, lodging expenses, messenger and delivery services charges, copying and telecommunication charges, and other similar expenses; provided, the aggregate amount of such reimbursement shall not exceed $[3,000.00] for any given calendar year without the prior written consent of the City Manager.

The Financial Advisor shall, at its sole cost and expenses, furnish all facilities and equipment which may be required for furnishing services pursuant to this 12739-0003\1789654v2.doc B-2
Agreement.
4) Method of Payment
The Financial Advisor shall submit monthly invoices to the City specifying the amounts due for services and for the reimbursement of the Directly Related Job Expenses incurred for the past calendar month. The invoice shall include a brief description of the work performed, the name(s) of the person(s) performing the work and number of hours spent for such work and an itemization of the reimbursable Directly Related Job Expenses. Upon approval of the services performed and the reimbursement requisition, the City shall pay the Financial Advisor in accordance with such invoice within 45 days of the receipt of the invoice.

B. FEES AND EXPENSES FOR WORK IN CONNECTION SPECIFIED

FINANCING TRANSACTION
1) Flat Fee Option
In connection with work performed by the Financial Advisor for a Financing Transaction (as described in Item No. 5 of Exhibit A), the Financial Advisor will be compensated a flat fee (the “Alternate Fee”) in lieu of the application of the rates set forth in Section A above if the following conditions are met:
• For any and all services covered by the Alternate Fee, the Financial Advisor shall not include such services in any invoice to be submitted to the City pursuant to Section A above (and shall not be paid if so included); • The Financial Advisor shall have submitted a written request to the City Manager specifying the Alternate Fee as soon as practicable after the Financing Transaction has been identified, but in any event before any work described in Item 5 of Exhibit A that is related to the subject Financing Transaction has been included in a monthly invoice submitted to the City pursuant to Section A above;
• The City Manager shall have approved such Alternate Fee; provided that the Alternate Fee shall also be subject to the approval of the City Council if it is over $[75,000.00];
• To the extent that the funds are legally available therefor, the Alternate Fee shall be paid from proceeds of the Financing Transaction, unless otherwise requested or approved by the City Manager.
2) Out-of-pocket expenses:
12739-0003\1789654v2.doc B-3
In addition to the Alternate Fee, the City shall reimburse the Fiscal Advisor for Directly Related Job Expenses incurred in connection with the subject Financing Transaction; provided, the aggregate amount of such reimbursement shall not exceed $[3,000.00] for any Financing Transaction without the prior written approval of the City Manager.

The Financial Advisor shall, at its sole cost and expenses, furnish all facilities and equipment which may be required for furnishing services pursuant to this Agreement.
3) Method of Payment
The Financial Advisor shall submit an invoice at or prior to the closing of the subject Financing Transaction, identifying the amounts due for services and reimbursement of expenses, and the City shall cause the Financial Advisor to be paid out of the proceeds of the Financing Transaction (or such other legally available source of funds as approved by the City Manager); provided if the governing documents of the Financing Transaction requires a different timing for the submission of the invoice(s) or a different method of payment, then the terms of such Financing Transaction documents shall govern.

CITY COUNCIL
ITEM NO. 7.1

CITY COUNCIL
ITEM NO. 8.1

CITY OF INDUSTRY
P.O. Box 3366 • 15625 E. Stafford St. • City of Industry, CA 91744 -0366 • (626) 333 -2211 • FAX (626) 961 -6795

MEMORANDUM
To: City Council May 7, 2015
From: Troy Helling
Subject: Development Plan 15-4 – 17788 Rowland Street
Proposal
Section 17.36.020 of the Municipal Code requires approval of a Development Plan by the City Council for new construction and expansions that exceed $75,000. The proposed project has a valuation of approximately $450,000. Development Plan Application 15-4 (Attachment 1) is being proposed by Facility Builders & Erectors Inc. for an exterior renovation and the addition of a loading dock to an existing 28,394 square foot warehouse at 17788 Rowland Street.

As shown on the attached site plan and floor plan (Attachments 2 and 3), the warehouse renovation would be to the existing 28,394 square foot warehouse and would not add any square footage. The proposed renovation would be visible from the street and would accommodate a new four stall loading dock on the east side of the building. There would be 66 square feet of landscaping added to the project, making a total of 34,648 square feet of landscaping (12 percent) on the site.

The project site would continue to be accessed by two 26 foot wide driveways on Rowland Street and would provide a total of 174 parking spaces as follows:
• 168 standard spaces
• 6 accessible and van accessible spaces
As shown on the elevations (Attachment 4), the new elevations will consist of new stucco coated metal siding, split-face block, and new storefront doors and windows that will blend in well with the existing buildings on the site. The maximum height of the new façade would be 33 feet.

Location and Surroundings
As shown on the attached location map (Attachment 5), the 6.61 acre site is located at 17788 Rowland Street. The subject property is bounded by industrial properties to the west, south, and east and Rowland Street to the north with industrial uses beyond.

Staff Analysis
The proposed development project is consistent with the Zoning (“M” – Industrial) and General Plan (Employment) designations of the site and complies with the development and design standards in Section 17.36, Design Review, of the Industry Municipal Code. Specifically, the project:

• Meets design guidelines. Section 17.36.060 A-J of the Municipal Code call for welldesigned and coordinated buildings, walls, lighting, and landscaping. The existing nonconforming metal building is being remodeled to be more consistent with the existing buildings in the area.
• Meets access requirements. Section 17.36.060.K and N of the Municipal Code requires a minimum driveway and drive-aisle width of 26 feet. Two driveways of 26 feet in width exist and will remain to provide access from Rowland Street. Internal drive-aisle widths that will access the new loading docks will be maintained at a minimum of 26 feet.
• Meets landscaping requirements. Section 17.36.060. Q of the Municipal Code requires that a minimum of 12 percent of the site be devoted to landscaping and 12 percent (34,648 square feet) is proposed.
• Exceeds vehicular parking requirements. Section 17.36.060.K of the Municipal Code requires that buildings over 100,000 square feet provide 150 parking spaces plus one parking space per 1,000 square feet of floor area over the first 100,000 square feet. The existing parking is being reorganized to provide better access to parking stalls. Based on this formula, the project is required to provide 162 parking spaces and 174 parking spaces are proposed.

Environmental Analysis
The proposed project is exempt from the California Environmental Quality Act (CEQA) per Section 15301, which exempts interior and exterior modifications to existing structures when there is little or no expansion of the use. The proposed modification is to the exterior facade and does not expand the existing use.

Findings
Staff recommends that the City Council find that:
• The proposed renovation to an existing industrial building is consistent with the General Plan designation of Employment and conforms with the zoning designation of Industrial for the subject property in the City of Industry because the land use designations permit industrial uses as well as industrial development under certain standards, with which the proposed development complies; • The proposed industrial development is compatible with the surrounding area, which consists of industrial uses because it would accommodate similar uses and would be developed in a similar character and under similar standards as those surrounding uses;
• There is adequate street access from the two existing driveways and existing traffic capacity on Rowland Street, and would not change because of the façade remodel for the proposed development, which serves the project site. • As noted in the staff report, the proposed development is categorically exempt from the requirements of the California Environmental Quality Act of 1970, as amended. • The use requested will not be a menace to or endanger the public health, safety or general welfare to the City due to the forgoing findings and that the project has been designed to comply with requirements of the Municipal Code.

Recommendation
Because the proposed project complies with the development standards of the Municipal Code, improves the project site, and satisfies the above-mentioned findings, Staff recommends that the City Council:

1. Approve Development Plan No. 15-4 submitted by Facility Builders and Erectors Inc. based on the findings, Standard Requirements and Conditions. (Attachment 6).

Attachments
• Attachment 1: Application
• Attachment 2: Site Plan
• Attachment 3: Floor Plan
• Attachment 4: Elevations
• Attachment 5: Location Map
• Attachment 6: Standard Requirements and Conditions of Approval Attachment 1
Application

Attachment 2
Site Plan

Attachment 3
Floor Plan

Attachment 4
Elevations

Attachment 5
Location Map
Figure 3 - Aerial Photograph

1. Introduction
Sbjt Pt

CITY OF INDUSTRY
Rowland Ave
Industrial
Industrial
Industrial
Industrial
Project Site
Ajax Ave
Ajax Cir
DP 15-4
Location Map
Attachment 6
Standard Requirements and Conditions of
Approval

CITY OF INDUSTRY
P.O. Box 3366 • 15625 E. Stafford St. • City of Industry, CA 91744 -0366 • (626) 333 -2211 • FAX (626) 961 -6795 City of Industry Conditions of Approval and Requirements Standard Requirements and Conditions of Approval
Application: Development Plan 15-4
Applicant: Facility Builders & Erectors Inc.

Location: 17788 Rowland Street
Conditions of Approval
Conditions of approval are unique provisions, beyond the requirements of law, the municipal code, or standard practices that are applied to a project by the City Council per Section 17.36.080 of the Zoning Code. Please note that if the design of your project or site conditions change, the conditions of approval may also change. If you have any questions regarding these requirements, please contact the City of Industry.

1. There are no unique conditions for this project.

Code Requirements and Standards
The following is a list of code requirements and standards deemed applicable to the proposed project. The list is intended to assist the applicant by identifying requirements that must be satisfied during the various stages of project permitting, implementation, and operation. It should be noted that this list is in addition to any “conditions of approval” adopted by the City Council and noted above. Please note that if the design of your project or site conditions change, the list may also change. If you have any questions regarding these requirements, please contact the City of Industry.

1. The approval expires twelve (12) months after the date of approval by the City Council if a building permit for each building and structure thereby approved has not been obtained within such period.

2. The applicant shall provide drainage and grading plans to be approved by the City Engineer prior to the issuance of a building permit. Such plans shall be in substantial conformity with the development plans.

3. The applicant shall provide landscaping and automatic irrigation plans to be approved by the Planning Director prior to the issuance of a building permit. Such plans shall be in substantial conformity with the development plans. Such plans shall include: provision for an automatic irrigation/sprinkler system; specimen trees, shrubs, ground cover and/or grass; and specifications for the above to the satisfaction of the Planning Director.

Additionally, such plans shall be designed and specimen trees, shrubs, ground cover and/or grass shall be designed so as to integrate compatibly with street parkway landscaping.

4. The applicant shall construct adequate fire protection facilities to the satisfaction of the

City of Industry Conditions of Approval and Requirements Los Angeles County Fire Department.

5. All exterior surfaces of buildings and appurtenant structures shall be painted in accordance with the approved development plan.

6. The applicant shall supply sanitary sewer facilities to serve all buildings to the satisfaction of the City Engineer prior to the final approval of the development and hook-up of utilities.

7. The owner of the property must comply with the Subdivision Ordinance of the City of Industry.

8. The owner shall dedicate necessary landscape and utility easements along street frontage.

9. Depending upon the nature of the proposed use, the applicant shall obtain an Industrial Waste Permit or receive Domestic Wastewater Clearance from the City Engineer depending on the building use.

10. The applicant shall provide off-street parking as shown on the approved development plan.

11. The applicant shall construct curb, gutter, pave-out, necessary drainage facilities, and sidewalk along street frontage in accordance with City standards and specifications.

12. The owner shall dedicate necessary easements for street or highway purposes.

13. The applicant shall construct storm drains and water quality devices to the satisfaction of the City Engineer prior to the final approval of the development and the hook-up of utilities.

14. The applicant shall provide building plans to be approved prior to the issuance of a building permit. Such plans shall be in substantial conformity with the development plans. (Building plans shall be submitted to and approved by the Los Angeles County Engineer's Office - Building and Safety Division prior to the issuance of a building permit.)

15. Street lights shall be designed and installed along the street frontage of a development to the satisfaction of the City Engineer.

16. Demolition and construction operations shall be limited to the hours prescribed by the Los Angeles County Noise Ordinance (Los Angeles County Municipal Code, Section

12.08.390).

17. Should archeological resources be uncovered during site preparation, grading, or excavation, work shall be stopped for a period not to exceed 14 days. The find shall be immediately evaluated for significance by a county-certified archaeologist. If the archaeological resources are found to be significant, the archaeologist shall perform data recovery, professional identification, radiocarbon dates as applicable, and other special studies; submit resources to the California State University Fullerton; and provide a comprehensive final report including appropriate records for the California Department of Parks and Recreation (Building, Structure, and Object Record; Archaeological Site

City of Industry Conditions of Approval and Requirements Record; or District Record, as applicable).

Interpretation and Enforcement

1. The Planning Department, Engineering Department, and contract agencies (Los Angeles County Fire Department, Los Angeles Department of Building and Safety) shall be responsible for ensuring compliance with all applicable code requirements and conditions of approval.

2. The Planning Director may interpret the implementation of each condition of approval and, with advanced notice, grant minor amendments to approved plans and/or conditions of approval based on changed circumstances, new information, and/or relevant factors as long as the spirit and intent of the approved condition of approval is satisfied. Permits shall not be issued until the proposed minor amendment has been reviewed and approved for conformance with the intent of the approved condition of approval. If the proposed changes are substantial in nature, an amendment to the original entitlement may be required pursuant to the provisions of Industry Municipal Code.

Indemnification and Hold Harmless Condition

1. The owner of the property that is the subject of this project and the project applicant if different from the property owner, and each of their heirs, successors and assigns, shall defend, indemnify and hold harmless the City of Industry and its agents, officers, and employees from any claim, action or proceedings, liability cost, including attorney’s fees and costs against the City or its agents, officers or employees, to attack, set aside, void or annul any approval of the City, including but not limited to any approval granted by the City Council and Planning Commission concerning this project. The City shall promptly notify the applicant of any claim, action or proceeding and should cooperate fully in the defense thereof.