Clovis City Council
May 16, 2022

May 16, 2022 - 1 - 6:18 PM A G E N D A • C I T Y C O U N C I L M E E T I N G

May 16, 2022 6:00 PM Council Chamber

In compliance with the Americans with Disabilities Act, if you need special assistance to access the City Council Chamber to participate at this meeting, please contact the City Clerk or General Services Director at (559) 324 -2060 (TTY – 711). Notificatio n 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the Council Chamber.

The Clovis City Council meetings are open to the public at the physical address listed above. There are numerous ways to participate in the City Council meetings: you are able to attend in person; you may submit written comments as described below; you may participate by calling in by phone (see “Verbal Comments” below); and you may view the meeting which is webcast and acces sed at www.cityofclovis.com/agendas.

Written Comments

 Members of the public are encouraged to submit written comments at:
www.cityofclovis.com/agendas at least two (2) hours before the meeting (4:00 p.m.). You will be prompted to provide:

 Council Meeting Date
 Item Number
 Name
 Email
 Comment

 Please submit a separate form for each item you are commenting on.

 A copy of your written comment will be provided to the City Council noting the item number.

If you wish to make a verbal comment, please see instructions below.

 Please be aware that any written comments received that do not specify a particular agenda item will be marked for the general public comment portion of the agenda.

 If a written comment is received after 4:00 p.m. on the day of the meeting, efforts will be made to provide the comment to the City Council during the meeting. However, staff cannot guarantee that written comments received after 4:00 p.m. will be provided to City Council during the meeting. All written comments received prior to the end of the meeting will be made part of the record of proceedings.

Council Chamber, 1033 Fifth Street, Clovis, CA 93612 (559) 324-2060 www.cityofclovis.com
1 May 16, 2022 - 2 - 6:18 PM Verbal Comments

 If you wish to speak to the Council on an item by telephone, you should contact the City Clerk at (559) 324-2060 no later than 4:00 p.m. the day of the meeting.

 You will be asked to provide your name, phone number, and your email. You will be emailed instructions to log into Webex to participate in the meeting. Staff recommends participants log into the Webex at 5:30 p.m. the day of the meeting to perform an audio check.

 All callers will be placed on mute, and at the appropriate time for your comment your microphone will be unmuted.

 In order for everyone to be heard, please limit your comments to 5 minutes or less, or 10 minutes per topic

Webex Participation

 Reasonable efforts will be made to allow written and verbal comment from a participant communicating with the host of the virtual meeting. To do so, a participant will need to chat with the host and request to make a written or verbal comment. The host w ill make reasonable efforts to make written and verbal comments available to the City Council. Due to the new untested format of these meetings, the City cannot guarantee that these written and verbal comments initiated via chat will occur. Participants desiring to make a verbal comment via chat will need to ensure that they accessed the meeting with audio transmission capabilities.

CALL TO ORDER

FLAG SALUTE - Councilmember Mouanoutoua

ROLL CALL

PRESENTATIONS/PROCLAMATIONS

1. Presentation of Proclamation honoring the life and legacy of Daryle Lamonica

2. Presentation of Proclamation celebrating State Farm's 100 Year Anniversary.

3. Presentation of Proclamation Designating May 15 - 21, 2022 as National Public Works Week.

PUBLIC COMMENTS - This is an opportunity for the members of the public to address the City Council on any matter within the City Council’s jurisdiction that is not listed on the Agenda. In order for everyone to be heard, please limit your comments to 5 minutes or less, or 10 minutes per topic. Anyone wishing to be placed on the Agenda for a spec ific topic should contact the City Manager’s office and submit correspondence at least 10 days before the desired date of appearance.

2 May 16, 2022 - 3 - 6:18 PM ORDINANCES AND RESOLUTIONS - With respect to the approval of resolutions and ordinances, the reading of the title shall be deemed a motion to waive a reading of the complete resolution or ordinance and unless there is a request by a Councilmember that the resolution or ordinance be read in full, further reading of the resolution or ordinance shall be deemed waived by unani mous consent of the Council.

CONSENT CALENDAR - Items considered routine in nature are to be placed upon the Consent Calendar. They will all be considered and voted upon in one vote as one item unless a Councilmember requests individual consideration. A Councilmember’s vote in favor of the Consent Calendar is considered and recorded as a separate affirmative vote in favor of each action listed. Motions in favor of adopti on of the Consent Calendar are deemed to include a motion to waive the reading of any ordinance or resolution on the Consent Calendar. For adoption of ordinances, only those that have received a unanimous vote upon introduction are considered Consent items.

4. Administration - Approval - Minutes from the May 9, 2022, Council Meeting.

5. Administration - Adopt - Ord. 22-04, An ordinance adding sectio n 1.9.03 (Electronic Filing) to Title 1 Chapter 9 of the Clovis Municipal Code relating to Campaign Contribution Limits to provide for electronic filing of campaign statements and Statements of Economic Interests (Form 700). (Vote: 5-0)

6. Administration - Approval – Res. 22 -___, Approving Owner -Occupied Home Rehabilitation Loan Program and First Time Homebuyer and Mortgage Assistance Loan Program Guidelines for the City of Clovis Affordable Housing Programs.

7. Administration - Approval – Res. 22 -___, Supporting the Fresno County 2022 Homelessness Priorities as Adopted by the Board of Supervisors of the County of Fresno.

8. Administration - Approval – Purchase of Support and Maintenance Contract for Network and Telecommunications equipment from Zones, Inc.

9. General Services – Approval – Waive the City’s Usual Purchasing Requirements and Authorize the Purchase of the Spare Platform with Spare Pooled OnDemand; and Approval – Res. 22-___, Amending the FY2021-2022 Transit Budget to add funds for purchase of the Spare Platform.

10. Planning and Development Services – Approval – Res. 22-___, Adopt a list of projects funded by SB1: The Road Repair and Accountability Act.

PUBLIC HEARINGS - A public hearing is an open consideration within a regular or special meeting of the City Council, for which special notice has been given and may be required. When a public hearing is continued, noticing of the adjourned item is required as per Government Code 54955.1.

11. Consider Approval – Res. 22-___, GPA2022-002, A request to amend the General Plan to redesignate approximately 2.51 acres from the Industrial classification to the Office classification for property located on the west sid e of N. Clovis Avenue, immediately north of Freeway 168. City of Clovis, applicant.

Staff: Dave Merchen, City Planner
Recommendation: Approve

3 May 16, 2022 - 4 - 6:18 PM

12. Consider Approval – Conduct Public Hearing and Close Election Regarding an Assessment Increase in Landscape Maintenance District No. 1.

Staff: Glenn Eastes, Assistant Public Utilities Director Recommendation: Approve

13. Consider Approval – Res. 22-___, Adoption of the City of Clovis 2022 -2023 Annual Action Plan for the expenditure of Community Development Block Grant Funds. (Continued from the May 9, 2022 meeting)

Staff: Claudia Cazares, Management Analyst
Recommendation: Approve

14. Consider Review and Introduction - Res. 22 -___, 2022 -23 City of Clovis Annual Budget, Five-year Capital Improvement Program, and information regarding the Clovis Successor Agency.

Staff: Jay Schengel, Finance Director/John Holt, City Manager Recommendation: Receive Introduction and continue the public hearing to June 13, 2022

COUNCIL ITEMS

15. Consider Approval – To submit a letter of Support for Senate Bill 1410 - Caballero, California Environmental Quality Act: Transportation Impacts.

Staff: John Holt, City Manager
Recommendation: Approve

CITY MANAGER COMMENTS

COUNCIL COMMENTS

ADJOURNMENT

MEETINGS AND KEY ISSUES

Regular City Council Meetings are held at 6:00 P.M. in the Council Chamber. The following are future meeting dates:

June 6, 2022 (Mon.)
June 13, 2022 (Mon.) Budget Adoption
June 20, 2022 (Mon.)
July 5, 2022 (Tue.)
July 11, 2022 (Mon.)
July 18, 2022 (Mon.)
4 5
AGENDA ITEM NO. 1.
6 AGENDA ITEM NO. 2.
7 AGENDA ITEM NO. 3.

PRELIMINARY - SUBJECT TO APPROVAL

CLOVIS CITY COUNCIL MEETING

May 9, 2022 6:00 P.M. Council Chamber

Meeting called to order by Mayor Flores at 6:02
Flag Salute led by Councilmember Bessinger

Roll Call: Present: Councilmembers Ashbeck, Bessinger, Mouanoutoua, Whalen Mayor Flores

PRESENTATION – 6:03

6:03 - ITEM 1 - PRESENTATION OF PROC LAMATION DECLARING M AY 9 -15, 2022, AS NATIONAL SALVATION ARMY WEEK.

The City Council presented a proclamation to Captains Kalahni and Jenny of the local Salvation Army declaring May 9-15, 2022, as National Salvation Army Week.

Shonna Halterman introduced the captains and shared that they will be relocated to Washington in the next month and thanked them for their service in our community.

Captain Kalahni thanked the Council for their support in the work that the Salvation Army does in the community.

6:09 - ITEM 2 - PRESENTATION OF CERTIFICATES OF APPRECIATION TO THE CITIZENS' ADVISORY COMMITTEE.

The City Council presented certificates of appreciation and challenge coins to the 25 members of the Citizens’ Advisory Committee.

Chris Casado, Citizens’ Advisory Committee Chair, thanked Council for appointing members of the community to address the issue the Police Department is facing.

PUBLIC COMMENTS – 6:14
None.

CONSENT CALENDAR – 6:15

Motion by Councilmember Ashbeck, seconded by Councilmember Bessinger, that the items on the Consent Calendar be approved. Motion carried by unaminous vote.

3. Administration - Approved - Minutes from the May 2, 2022, Council Meeting. 8 AGENDA ITEM NO. 4.

PRELIMINARY - SUBJECT TO APPROVAL

4. Planning and Development Services – Approved – Bid Award for CIP 21 -12, Nees Avenue Widening – Rule 20B; and Authorize the City Manager to e xecute the contract on behalf of the City.

5. Planning and Development Services - Approved - Res. 22-38, A Resolution Declaring the Intention to levy and collect assessments for Fiscal Year 2022 -23, Authorizing the City of Clovis Engineering Department to conduct a property owner Proposition 218 proceeding, Approving the Fiscal Year 2022 -23 Preliminary Engineer’s Report, and setting a Public Hearing for July 5, 2022, or at such time thereafter for Benefit Assessment District No. 95 -1 (Blackhorse Estates).

6. Police - Approved - Res. 22 -39, Amending the 2021 -2022 Police Department Budget to reflect the award of the CalRecycle Disposal Site Abatement Grant Program in the amount of $228,140.

7. Public Utilities – Approved – Waive Formal Bidding Requirements and Authorize the Purchase of an Aerial Truck from Altec Industries, Inc. Using the Sourcewell Purchasing Contract.

ADMINISTRATIVE ITEMS – 6:17

6:17 – ITEM 8 - WORKSHOP – FOR THE C ITY COUNCIL TO CONSI DER OPTIONS

ADDRESSING THE FINDI NGS AND RECOMMENDATI ONS PROVIDED BY THE

CITIZENS ADVISORY CO MMITTEE REGARDING TH E POLICE DEPARTMENT STAFFING AND FUNDING.

Matt Basgall, asked if there is a cap on on the Transient Occupancy Tax and if it could be a flat rate or if it is required to be a percentage. He also comme nted on being cautious of stating that Clovis PD will have 15 officers in the 5 -Year Forecast because in his experience, it changes from year to year and has not not increased.

Chris Casado, commented on the conversation by Council and the importance of educating the general public. He is not sure that the City can be successful in educating the voters by November to vote on a measure and the the City would need a good plan moving forward.

Diane Pearce, commented on concerns regarding voter understanding of the different types of taxes. She also asked clarifying questions regarding general versus special taxes and City versus citizen driven initiatives. She commented on the importance of educ ation and creating more awareness around what’s going on with the Police Department.

Greg Newman, asked what kind of explanation is required on the ballot for a Transient Occupancy Tax increase and how to make it easy to understand for voters. He also commented on the impacts of a tax from a business perspective.

Noha Elbaz, commented on the importance of safety when travelling. She also commented on creating more awareness on the issues with the Police Department so that the residents who choose to live in Clovis because it is a safe community, can support the needs of the department and have high quality service.
9 AGENDA ITEM NO. 4.

PRELIMINARY - SUBJECT TO APPROVAL

It was the consensus of the City Council to pursue a general tax increase for the Transient Occupancy Tax for the November 2022 ballot, increasing the rate by 2% (from currently 10% to 12%).

8:20 – ITEM 9 - RECEIVED AND FILED - INFORMATION RELATED TO ANALYSIS OF 2020 CENSUS DATA AND MARCH 2, 2021, ELECTION DATA.

It was the consensus of the City Council to complete another analysis after the November 2022 election to see if there is racially polarized voting.

PUBLIC HEARINGS – 9:04

9:04 – ITEM 10 - CONTINUED – RES. 22-XX, ADOPTION OF THE CITY OF CLOVIS 2022-2023

ANNUAL ACTION PLAN F OR THE EXPENDITURE O F COMMUNITY DEVELOPM ENT BLOCK GRANT FUNDS.

Item continued to the May 16, 2022, City Council meeting.

9:05 – ITEM 1 1 - APPROVED INTRODUCTION – ORD. 22 -04, AN ORDINANCE ADDING SECTION 1.9.03 (ELEC TRONIC FILING) TO TI TLE 1 CHAPTER 9 OF T HE CLOVIS

MUNICIPAL CODE RELAT ING TO CAMPAIGN CONT RIBUTION LIMITS TO P ROVIDE

FOR ELECTRONIC FILIN G OF CAMPAIGN STATEM ENTS AND STATEMENTS OF ECONOMIC INTERESTS (FORM 700).

Motion for approval by Councilmember Whalen, seconded by Councilmember Ashbeck.

Motion carried by unanimous vote.

CITY MANAGER COMMENTS – 9:10

COUNCIL COMMENTS – 9:10

CLOSED SESSION – 9:16

ITEM 12 - GOVERNMENT CODE SECT ION 54957.6 CONFEREN CE WITH LABOR NEGOTIATORS AGENCY D ESIGNATED REPRESENTA TIVES: JOHN HOLT, AN DREW

HAUSSLER, JEFFREY BL ANKS, CURT FLEMING , SHONNA HALTERMAN, L ORI SHIVELY, SCOTT G. CROSS EMPLOYEE ORGANIZATION: CLOVIS POLICE OFFICERS ASSOCIATION,

CLOVIS FIREFIGHTERS ASSOCIATION, CLOVIS EMPLOYEES ASSOCIATION, C LOVIS

PUBLIC WORKS EMPLOYE ES ASSOCIATION, CLOV IS PUBLIC SAFETY EMP LOYEES

ASSOCIATION, CLOVIS PROFESSIONAL AND TEC HNICAL EMPLOYEES ASS OCIATION,

CLOVIS TRANSIT EMPLO YEES BARGAINING UNIT , CLOVIS TECHNICAL A ND FINANCIAL PROFESSIONALS ASSOCI ATION, AND UNREPRESE NTED EMPLOYEE: MANAG EMENT

EMPLOYEES

10 AGENDA ITEM NO. 4.

PRELIMINARY - SUBJECT TO APPROVAL

Mayor Flores adjourned the meeting of the Council to May 16, 2022

Meeting adjourned: 10:30 p.m.

______________________________ ________________________________ Mayor City Clerk
11 AGENDA ITEM NO. 4.

TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Administration - Adopt - Ord. 22 -04, An ordinance adding section

1.9.03 (Electronic Filing) to Title 1 Chapter 9 of the Clovis Municipal Code relating to Campaign Contribution Limits to provide for electronic filing of campaign statements and Statements of Economic Interests (Form 700). (Vote: 5-0)

ATTACHMENTS: None

This item was approved for introduction on May 9, 2022, with a unanimous vote.

Please direct questions to the City Manager’s office at 559-324-2060.

12 AGENDA ITEM NO. 5.

TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Administration - Approval – Res. 22-___, Approving Owner-Occupied Home Rehabilitation Loan Program and First Time Homebuyer and Mortgage Assistance Loan Program Guidelines for the City of Clovis Affordable Housing Programs.

ATTACHMENTS: 1. Resolution

2. Owner-Occupied Home Rehabilitation Loan Program Guidelines

3. First Time Homebuyer and Mortgage Assistance Loan Program Guidelines

CONFLICT OF INTEREST
None.

RECOMMENDATION
For the City Council to approve a resolution approving the Owner-Occupied Home Rehabilitation Loan Program and First Time Homebuyer and Mortgage Assistance Loan Program Guidelines for the City of Clovis Affordable Housing Programs.

EXECUTIVE SUMMARY
The Program Guidelines will assist in directing the implementation of both the Owner-Occupied Housing Rehabilitation Program and the First Time Homebuyer Assistance Program, as required by the State of California for the implementation of the CalHome Program and HOME Program.

BACKGROUND
The City was successful in obtaining grant funds from the State of California for its Affordable Housing Programs through the CalHome Progr am ($5,000,000) and the HOME Program ($1,000,000) for Owner-Occupied Home Rehabilitation and for First Time Homebuyer Mortgage Assistance.

13 AGENDA ITEM NO. 6.

The allocations for the programs are as follows:

Program Funding Source Total CalHome HOME
Owner Occupied Home Rehabilitation $4,449,375 - $4,449,375 Mortgage Assistance $550,625 $1,000,000 $1,550,625

City staff proposes to assist 27 low -income owner-occupied households with repairs to their homes. The maximum loan will be $75,000 and will primarily be used to address health and safety issues found in the home. City staff will market the program, administer application intake, review, underwrite, and will contract with one or more non-profit housing development agencies, as consultants, to oversee the construction inspection and construction management portions of the Program. The selected consultant(s) will be brought to Council for contract approval at the June 6, 2022, Council date, based on the results of the Request for Qualifications published on April 13, 2022.

The Home Rehabilitation loans will carry the following terms:

 Maximum loan amount: $75,000.00
 Deferred Payment with a 30-year term
 Zero percent (0%) interest
 Loans for mobile home replacement will decline at 10% per year after the first 10 years of the loan term, with the loan being forgiven at the end of the 20-year term if the mobile home is still occupied by the Applicant.

The First Time Homebuyer Mortgage Assistance Program will target assistance for approximately 15 households. The CalHome Program limits maximum assistance to $100,000 per household. The HOME Program loan amount will average approximately $117,000 per household, as this funding source has a higher maximum allowed. City staff will market the program, administer applica tion intake, review and underwriting, loan approval and escrow management.

The Mortgage Assistance Program loans will carry the following terms:

 Loan amount(s): $100,000 - $117,000
 Deferred Payment with a 30-year term
 Three percent ( 3%) simple interest, with declining rates if continued Applicant occupancy
 Loans due upon sale or transfer of property, when the property ceases to be owner-occupied, or upon the CalHome program Loan maturity date Due to the escalation in housing values and the limit on home prices as part of the programs (currently set at $282,000 for existing homes and $304,000 for new construction homes) , the City requested and received approval from the State of California to utilize a portion, or possibly 14 AGENDA ITEM NO. 6.
all, of the HOME program financin g for Tenant Based Rental Assistance. To facilitate keeping the funds for mortgage assistance, t he City has also requested an increase in the maximum home value to $394,250 and expects to receive notice in this regard within the next month.

City Council a pproval of the program guidelines is required by the State of California to implement the programs. The guidelines will then be submitted to the State for their review and approval before any loans can be processed and approved.

FISCAL IMPACT
There is no fiscal impact related to the adoption of the resolution.

REASON FOR RECOMMENDATION
State of California Housing and Community Development Department requires the City Council to approve the program guidelines before they are submitted for their review and approval.

ACTIONS FOLLOWING APPROVAL
Staff will submit the guidelines to the State of California, and pending their approval, will commence to implement the programs.

Prepared by: Claudia Cazares, Affordable Housing Management Analyst

Reviewed by: City Manager _ AH__

15 AGENDA ITEM NO. 6.

ATTACHMENT 1
RESOLUTION NO. 22-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS

APPROVING THE OWNER-OCCUPIED HOME REHABILITATION LOAN PROGRAM AND

FIRST TIME HOMEBUYER AND MORTGAGE ASSISTACE LOAN PROGRAM

GUIDELINES FOR THE CITY OF CLOVIS AFFORDABLE HOUSING PROGRAMS

WHEREAS, the City of Clovis applied for and received a $5,000,000 allocation of State of California CalHome Program funds, as well as $1,000,000 in HOME Program funds, for both the City’s Owner -Occupied Home Rehabilitation and First Time Homebuyer -Mortgage Assistance programs; and

WHEREAS, the California Department of Housing and Community Development (hereinafter referred to as “HCD”) requires that awardees develop and adopt a set of programmatic guidelines, loan servicing policies, and reuse account plans for the programs before any expenditures are made; and

WHEREAS, the Program Guidelines, Loan Serving Policies and Procedures, and Reuse Account Plan have been developed in accordance with both the CalHome and HOME Program Guidelines.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Clovis supports the approval and adoption of the Owner-Occupied Home Rehabilitation Loan Program and First Time Homebuyer and Mortgage Assistance Loan Programs Guidelines.

* * * * *

The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

DATED: May 16, 2022

_____________________________ ______________________________ Mayor City Clerk
16 AGENDA ITEM NO. 6.

CITY OF CLOVIS

OWNER-OCCUPIED HOME REHABILITATION

LOAN PROGRAM GUIDELINES
(CalHome Program)
May 16, 2022
ATTACHMENT 2
17 AGENDA ITEM NO. 6.

TABLE OF CONTENTS
I. GENERAL ...................................................................................................................... 1 II. PROGRAM OUTREACH AND MARKETING ................................................................. 1 III. APPLICATION PROCEDURES ...................................................................................... 2 IV. PROPERTY ELIGIBILITY ............................................................................................... 3 V. APPLICANT ELIGIBILITY ............................................................................................... 3 VI. PROGRAM LOAN TERMS ............................................................................................. 7 VII. LOAN UNDERWRITING GUIDELINES AND REQUIREMENTS ................................... 8 VIII. ELIGIBILE COSTS FOR REHABILITATION ................................................................... 9 IX. PROHIBITED AND INELIGIBLE USES OF FUNDS ...................................................... 12 X. REHABILITATION CONSTRUCTION REQUIREMENTS .............................................. 12 XI. LOAN CLOSING PROCEDURES ................................................................................ 14 XII. ACTIVITY DELIVERY FEES ........................................................................................ 16 XIII. CONTRACTOR GUIDELINES AND REQUIREMENTS ............................................... 17 XIV. LOAN MONITORING PROCEDURES ......................................................................... 18 XV. PROGRAM LOAN REPAYMENT ................................................................................. 18 XVI. LOAN ACCELERATION ............................................................................................... 18 XVII. DRAW REQUESTS (TO HCD) ..................................................................................... 19 XVIII. CONFLICT OF INTEREST ........................................................................................... 20 XIX. PROGRAM COMPLAINT AND APPEAL PROCEDURE .............................................. 20 XX. PERFORMANCE REPORTING TO HCD ..................................................................... 21 XXI. AUDIT/RETENTION AND INSPECTION OF RECORDS ............................................. 21 XXII. COMPLIANCE WITH STATE AND FEDERAL LAWS, RULES AND GUIDELINES ..... 22 XXIII. REUSE ACCOUNT ...................................................................................................... 22 XXIV. LOAN SERVICING POLICIES AND PROCEDURES ................................................... 22 XXV. AMENDMENTS ............................................................................................................ 23 18 AGENDA ITEM NO. 6.

CITY OF CLOVIS

OWNER-OCCUPIED HOME REHABILITATION

LOAN PROGRAM GUIDELINES

I. GENERAL
The City of Clovis (“City”) supports efforts to improve the City’s affordable housing stock. To that end, t he City has entered into a contractual relationship with the State of California Department of Housing and Community Development (“HCD”) to administer one or more HCD- funded owner-occupied rehabilitation programs. T he program described herein , the Owner- Occupied Home Rehabilitation Loan Program (the “Program”) is designed to provide financial assistance to eligible owner-occupied households to correct health and safety issues in the home by providing loans of up to $75,000 as provided through the CalHome Program.

II. PROGRAM OUTREACH AND MARKETING
A. All outreach efforts will be done in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach and access to the Program. The City assures that no otherwise qualified person shall be excluded from participation or employment, denied program benefits, or be subjected to discrimination based on race, color, national origin, sex, age, handicap, familial status, religion, or belief, under any program or activity funded by this contract, as required by the Califo rnia Fair Employment and Housing Act (Government Code, section 12990, et. seq.), the Holden Act (Health & Safety Code, section 35800, et. seq.), Title VI of the Civil Rights Act of 1964, the Fair Housing Act (42 USC 360120) and all implementing regulations , and the Age Discrimination Act of 1975 and all implementing regulations. The City will ensure that all persons, including those qualified individuals with handicaps, have access to the Program.

B. The Fair Housing Lender and Accessibility logos will be pla ced on all outreach materials. Fair housing marketing actions will be based upon a characteristic analysis comparison (census data may be used) of the Program’s eligible area compared to the ethnicity of the population served by the Program (includes, separately, all applications given out and those receiving assistance) and an explanation of any underserved segments of the population. This information is used to show that protected classes (age, gender, ethnicity, race, and disability) are not being excluded from the Program. Flyers or other outreach materials, in English and any other language that is the primary language of a significant portion of the area residents, will be widely distributed in the Program -eligible area and will be provided to any local social service agencies.

C. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of an otherwise qualified individual, solely by reason of disability, from participation under any program receiving Federal funds. The City will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public.
19 AGENDA ITEM NO. 6.

D. As funding become s available, City staff will market the program through the following methods:

1. Outreach to households on the City’s interest list.

2. Publication on City’s Website

3. Publication on City’s Social Media Sites

4. Placing brochures and flyers at the following locations: Planning and Development Services Department, City of Clovis Administration Office, Senior Center, County Library – Clovis Site, local mobile home parks, and local social service agencies.

E. Applications for the City’s Owner -Occupied Home Rehabilitation Loan Program will be available by calling the City of Clovis at (559) 324-2094, can be downloaded from the City website, or picked up at the City of Clovis Administration Office, 1033 Fifth Street, Clovis, CA.

III. APPLICATION PROCEDURES
A. The City maintains a n list of interested applicants. As funding is available, all applicants will be provided notice, along with a copy of the Application Form.

Additionally, City staff will begin marketing the program and accepting applications. Each potential applicant is required to complete an application form, which asks for sufficient information concerning income, assets, employment, household members, home -ownership and income of household members to establish preliminary eligibility for Program participation.

B. Applicants will also be required to identify race, ethnicity, senior and Veteran status at the time of submitting an application. All applications will be processed in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach, and ac cess to the Program. No person shall be excluded or denied benefits on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation.

C. Applications are date/time stamped when received by the City and reviewed for completeness. Applications are deemed complete only if all information is required is included, any necessary documents are attached, and the application is signed and dated. Incomplete applications are returned to the applicant and will not be date/time stamped until complete. City staff will sign completed applications that are determined to be preliminarily eligible.

D. Completed applications are “Accepted” by City sta ff and documented as such with City -staff signature, date and time on the application. Accepted applications/applicants are placed on a “Eligible List” and processed on a first - come-first-served basis. Applicants are advised of their placement on the list, and informed that their application will undergo a full review, processing and underwriting as outlined in this document, when their application reaches the top 20 AGENDA ITEM NO. 6.

of the Eligible List. They are also advised that the Eligible List expires when funding for the specific program/program year is depleted.

E. Once the applicant’s name comes to the top of the Eligible List, their Program eligibility is confirmed, funding is reserved for the Applicant. The City will request any additional documentation to determine el igibility, as needed, before any further steps are taken. City will send Applicant a letter regarding their eligibility, contingent on a Home Inspection. The Applicant is referred to the Housing Inspector to conduct an initial property inspection and deter mine the rehabilitation work to be performed on the proper ty, as may be identified as eligible in these guidelines.

1. If the City encounters material discrepancies and/or misrepresentations, during Program eligibility confirmation, and/or there are income, a sset, household composition, or other important questions that can't be resolved, the City reserves the right to deny assistance to the household.

In this case, the applicant may re -apply after six months have elapsed from the time of written assistance d enial. If the then current waiting list includes sufficient applicants to account for the available funding, the applicant is placed back on the interest list and notified when additional funding is available as noted above.

2. NOTE: The Eligible List is on ly applicable to the current Program year, which includes Program funds applied for in 2020 and received in 2021.

The List will not carry over to future Program grants, or other funding programs.

IV. PROPERTY ELIGIBILITY
To be eligible to participate in the City’s Program, the Applicant’s home (or “property”) must be an owner-occupied residence located in the incorporated area of the City of Clovis.

V. APPLICANT ELIGIBILITY
The City will confirm applicant eligibility, by verifying income qualification, homeownership and owner-occupancy. Underwriting guidelines are found in Section 7.

A. Verifying Income Qualification - To be eligible to participate in the Program, gross household annual income must not exceed eighty percent (80%) of the area median income (AMI) for Fresno County for the year in which the loan is made , which is adjusted for household size and reported in the most current income guidelines published by HCD.

1. Income Documentation
a. Income will be determined by examining source documents evidencing gross income. Third -party verification of employment forms sent to employers is the preferable method to determine income. Other source documents will be used to assist in income 21 AGENDA ITEM NO. 6.

determination (i.e. tax returns, copies of wage receipts, subsidy checks, and bank statements). When collecting income verification documentation, City will consider any known or upcoming changes. b. If third -party verification of employment/income isn’t available, other types of documentation will be used, such as pay stubs, tax returns and/or three months of bank statements.
c. Undocumented income or “stated income” will not be utiliz ed but will be investigated and documented when possible.
d. All documentation shall be dated within six months prior to funding/project approval and kept in the applicant file and held in strict confidence. If the applicant was previously qualified for the program and more than 6 months have lapsed, they must be re - qualified.

2. The following terms are key to understanding the requirements for calculating gross income.
a. Gross amount . The amount earned before any deductions have been taken.
b. Projected to be receive d. Projected earnings rather than past earnings will be used when estimating annual income for income - eligibility purposes.
c. Household. All persons in the residence are considered household members for the purpose of income eligibility. Household members are not restricted to immediate family.
d. Household income . The applicant’s income combined with the income of all household members, related or non-related, aged 18 and older.
e. ADU/JADU related income. The definition of “Annual Income” has been modified to exempt ADU or JADU related income from the income calculation since this rental income will help low -income families achieve or maintain homeownership.
f. Income inclusions and exclusions. Detailed guidance pertaining to what types of incomes must be included or excluded when calculating gross annual income can be found in Attachment A, as identified in Part 5, Appendix B Annual Income Inclusions and Exclusions, as stated in the HUD Technical Guide for Determining Income and Allowances. The information can also be found at:
https://www.hcd.ca.gov/grants-funding/income-limits/income- calculation-and-determination-guide.shtml. The applicant’s file will be documented for any exceptions or exclusions from the gross income calculation.
22 AGENDA ITEM NO. 6.

3. Calculating Gross Income – Gross Income means all anticipated eligible income of a person or househo ld for the 12 -month period following the date of determination of income. City will complete the Gross Income Worksheet (Attachment B) , using the guidelines below, to determine applicant’s eligibility.
a. Income qualification for self -employed persons is base d on prior year income tax returns. Net income plus depreciation from the operation of a business or profession will be used. Any withdrawal of cash or assets from the operation of a business will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family. Income averaging is allowed only when the borrowers are seasonal employees with fluctuating incomes.
b. For a seasonal worker, the City will determine the flow of pay and relate it to the paystub’s year -to-date (YTD) figure. The YTD may only cover either the period of time when the season is strong and the figure is high, or during the off -season period when the figure is low – this will be ta ken into consideration , and income will be adjusted to anticipate earnings for the next 12 months. c. Per diem income is not counted, as it is considered a reimbursement to the employee for expenses, he/she had to pay out of pocket to perform work for the employer.
d. City is to ascertain the basis on which employees are paid (hourly, weekly, or monthly, with or without overtime or bonuses or if on commission, or seasonal work). An employee who gets paid “twice a month” may actually be paid twice a month (24 time s a year) or every two weeks (26 times a year).
e. It is important to clarify whether overtime is sporadic or a predictable component of an employee’s income.
f. An annual salary is counted as annual income regardless of the payment schedule. For example, if a t eacher’s annual salary is $30,000, this is the annual income regardless if the teacher is paid over a 9- or 12- month period.
g. If the applicant will occupy an ADU, or a JADU, then the residents of the primary unit shall not be considered as part of the Household receiving CalHome program funding for purposes of this section. h. Gross income from all sources must be used, including:
• Overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services (before any payroll
deductions).
23 AGENDA ITEM NO. 6.

• If an upcoming raise is shown on the Verification of
Employment, it must be calculated as current income.
• Wages from a second job.
• The regular amount of periodic payments received from Social Security, Supplemental Security Income (SSI), annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts.

These amounts should not be grossed up.
• Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay.
• Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling.

4. Treatment of Assets - An asset is a cash or non -cash item that can be converted to cash (i.e. checking and savings and money market accounts, stocks, bonds, and other forms of capital investments) , and recognized as part of annual income.
a. When a household has household assets in excess of $5,000 , gross income will include the greater of:
• Actual amount of income, if any, derived from all the household assets, or
• HUD Passbook rate of the value of all such assets.

b. If the assets are less than $5,000 no income is counted from assets. If the assets are $5,000 or greater, count the income from all of the assets.
c. Note: it is the income earned from the assets that is counted – e.g. interest on a savings account – not the asset value.
d. If there is no regular income from assets, the income is imputed by using the HUD Passbook rate.
e. CalHome does not have a requirement to spend down the borrower’s assets to qualify for a loan and the program encourages a homeowner to retain adequate emergency funds (3-6 months of expenses). However, it is expected that the borrower invests their funds first and only rely on the CalHome loan as alternate financing.
f. For checking accounts City will use the average 3-month balance. 24 AGENDA ITEM NO. 6.

g. Retirement accou nts are not counted as assets for CalHome Income verification if they are not accessible to the applicant without retiring or terminating employment.
h. The value of equity in real property, value of gems, art collections, etc. is not to be considered in the asset base because the value fluctuates until sold. However, income from the property must be separately considered.
i. The value of necessary items such as furniture and automobiles shall be excluded.
j. City will utilize Attachment C – Part 5, Annual Income Asset Inclusions and Exclusions, as stated in the HUD Technical Guide for Determining Income and Allowances, to identify what types of assets must be included or excluded when calculating gross annual income. The guidance can also be found at:
https://www.hcd.ca.gov/grants-funding/income-limits/income- calculation-and-determination-guide.shtml.
k. The applicant’s file will be documented for any exceptions or exclusions from the asset base.

B. Owner-Occupancy – Applicants must live in the property , be on title and intend to continue occupying the home as a principal place of residence. In some cases, there may be owners on title not living in the property, such as a parent who co- owns the home with their son or daughter. If the children do not live on the property, do not deduct the property on their income taxes, and can document a different place of residence, their income may be excluded, and they would not be counted as household members. However, if they are on title, they must sign the loan documents.

VI. PROGRAM LOAN TERMS
A. Maximum amount of CalHome Program assistance. The City will provide a loan of UP TO $75,000 for eligible activities. Loan amounts will be determined by the actual need/cost of the repairs. The maximum loan to homeowners for repairs shall no t exceed the amount required to fund costs associated with eligible improvements.

B. Maximum CalHome activity delivery fee. The City will incur Activity Delivery Fee(s) in the maximum amount of $7,396 (per home), and request reimbursement of these eligible co sts from HCD. The amount of the loan provided to the homeowner, plus the amount of the Activity Delivery Fee, will not exceed $100,000, which is the maximum assistance amount as set in the NOFA for the award year.
25 AGENDA ITEM NO. 6.

C. An owner-occupied rehabilitation loan for a stick-built home will be secured by the real property and improvements. A manufactured home that is not on a permanent foundation will be secured by an HCD 480 Statement of Lien.

D. The CalHome Program loans shall have the following terms and conditions:

1. Maximum loan amount: $75,000.00

2. Zero percent (0%) interest

3. Deferred Payment with a 30-year term

4. Loans for mobile home replacement will carry a 20 year term. The principal balance will decline at 10% per year after the first 10 years of the loan term, with the loan being forgiven at the end of the 20 year term if the mobile home is still occupied by the Applicant.

E. CalHome Program loans are not assumable.

VII. LOAN UNDERWRITING GUIDELINES AND REQUIREMENTS
The City procedures below will be utilized for loan underwriting and approval.

A. Title Report - The City will order a preliminary title report and review it to document all owners on title. It will also be reviewed to document undisclosed liens that would affect the security of the CalHome loan.

B. Credit Report – The City will order a credit report for the Applicant(s). The City will compare the credit report to the information on the report to that found in the application. If there are discrepancies between the documents, the City will determine what is factual and will have the applicant explain any discrepancies.

Any liens, judgments, bankruptcies, major defaults, credit scores lower than 600, collection accounts and slow pays on the credit report could indicate serious problems and should be explained by th e borrower. Particular attention will be paid to the borrower’s ability and willingness to repay the mortgage debt, as well as attention to applicant’s timely payments on their mortgage loan. When analyzing the borrower’s credit record, it is the overall pattern of credit behavior that will be reviewed rather than isolated occurrences of unsatisfactory or slow payments. The City will document review of the credit report, as well as notate any findings, in the loan file.

C. Property Value - The property must also be eligible for the rehabilitation loan.

The after-rehabilitation value of a home assisted with a CalHome Program loan cannot exceed 100% of the current median sales price of a single -family home in the County. The total loan to value ratio, including all loans secured by the property and the new CalHome loan , may not exceed 105% of the estimated after-rehabilitation value. This calculation will be documented in the file by the City.

1. Prior to commencement of rehabilitation work, City staff will determ ine loan-to-value ratio using information from comparable sales. An appraisal 26 AGENDA ITEM NO. 6.

may be ordered when the loan -to-value percentage of existing encumbrances exceeds 80% of value (based on comparable sales).

2. The appraisal will take into consideration the estimated value of the rehabilitation work to be completed on the property and shall include the pre-rehabilitated value and the after-rehabilitated value.

3. An appraisal is not required in the case of rehabilitation work or replacement of a manufactured home not on a permanent foundation. The City, or home inspector, will be responsible for performing an inspection on the existing manufactured home to ascertain if it should be repaired or replaced. All permits will be obtained from HCD’s Title and Registration Division and all liens will be paid prior to commencing work.

D. No financing, junior or senior to the CalHome loan, may have a balloon payment due before the maturity date of the CalHome loan.

E. Fire insurance (and flood insurance where applicable) requirements are as follows:

1. City will require borrowers to maintain insurance on the property in the amount at least equal to the replacement value of the improvements; or the value of the loans; and

2. City must be named as additional loss payee on the policy.

F. Any cash out of escrow to the hom eowner is prohibited. This is to ensure that CalHome Program funds are spent only in the amount required to pay for actual rehabilitation and non-recurring closing costs.

G. City will obtain title insurance in the amount of the CalHome Program loan at close of escrow, showing the City as the beneficiary.

VIII. ELIGIBILE COSTS FOR REHABILITATION
Cost of rehabilitation of the property in accordance with the following definition: “Rehabilitation” means, in addition to the definition in Section 50096 of the Health and Safety Code, repairs and improvements to a manufactured home necessary to correct any condition causing the home to be substandard pursuant to Section 1704 of Title 25, California Code of Regulations. A.

Rehabilitation includes the repair, full reconstruction, or the addition of ADUs/JADUs, main dwelling reconstruction, bedroom, and bathroom additions to alleviate overcrowding (as defined in the latest Census) as well as repairs and improvements which are necessary to meet any locally adopted standards used in local rehabilitation programs. All rehabilitation costs must be for the alleviation of health or safety issues, the correction of code violations, compliance with local ordinances, or addition and modification of ADUs/JADUs as described above.

Rehabilitation does not include replacement of personal property.

The following are eligible uses of Program funds:
27 AGENDA ITEM NO. 6.

A. Rehabilitation to address the correction of health and safety issues, correction of code violations, or compliance with a local ordinance (the four eligible uses for CalHome funds), as follows:

1. Eligible costs include repair or replacement of electrical, heating, and plumbing systems. It also includes roof replacement, and repairs to remedy mold, dry rot, water damage or termite damage. Also included are lead-based paint hazard reduction and impro vements for disability access. Such funds are made part of the loan and are not considered a grant. All housing units built prior to January 1, 1978 will require a lead paint disclosure to be signed by both the homebuyer and seller (Attachment D).

2. Eligible costs include additional work required to rehabilitate and modernize a home and bring it into compliance with current building codes and regulations. Items in a detached garage are generally not eligible except to the extent that the residence is affected by the current condition.

For example, out -of-code electrical wiring between the house and the garage which could create a fire hazard to the residence; or mold or termites in the garage which could easily move to the residence. a. Repair of an accessory d welling unit or junior accessory dwelling unit is also an eligible cost.
b. Painting, weatherization, and energy efficient improvements are included when required by code. Energy efficient items and green building items cannot be stand -alone but must be conn ected in some fashion to one of the four eligible uses of CalHome funds.

For instance, dual pane windows may replace windows which must be repaired because they are not operational. Insulation may be added when a roof or ceiling requires repair. However, a tankless water heater is considered an enhancement and is not usually eligible to replace a tank-style water heater.

3. Demolition and Clean -up - Eligible costs include the tear down and disposal of dilapidated structures. Eligible costs also include clearance of weeds, junk, debris, stagnant water, and garbage which directly affect the residence structure and constitute a health and safety hazard. Removal of debris and weeds is generally considered normal maintenance and is an ineligible use of CalHome funds.

4. Closing Costs and Other Charges - Eligible costs include non -recurring closing costs for the loan paid to third party providers for such items as title searches, credit reports, notary fees, recording fees, escrow fees, or appraisals. The homeowner does not pay any costs for the CalHome loan such as refundable application fees, loan processing or document fees.

These costs are incurred by the City and reimbursed by CalHome to the City as Activity Delivery Fees. Other costs such as termite inspections 28 AGENDA ITEM NO. 6.

(when termite work is done), haul away, disposal bins, architect fees, permit fees, will be included in the loan.

5. Additions and Accessory Dwelling Units/Junior Accessory Dwelling Units - Eligible costs include construction of additional bedrooms and bathrooms if needed to alleviate overcrowding (as defined in the latest Census). It also includes the full construction or reconstruction of ADUs/JADUs. The program will not fund additions to a home for a den, home office or family room. The only eligible detached additions or buildings are an ADU/JADU, unless otherwise required by a local ordinance, such as covered parking or garage.

6. General Property Improvements - General property improvements are permitted if they relate to health and safety, or code or local ord inance compliance activities. All improvements must be physically attached to the property and permanent in nature. They must remain with the home if the home is sold. A driveway, landscaping or fencing may be considered part of rehabilitation if it is det ermined to be a health and safety issue.

Luxury items are not permitted to be paid with CalHome funds.

7. Appliances - Built in appliances such as garbage disposals, dishwashers, stoves, and ovens may be replaced if they are broken or non -repairable.

Free standing appliances such as refrigerators, washers and dryers are not included. New built-in appliances are ineligible if they do not replace a similar existing appliance.

8. Relocation and Storage - Relocation costs and storage costs are considered secondary costs and allowed only when necessary for health and safety. These costs are part of the loan which must be repaid and are not a grant. Homeowners should be encouraged to stay with friends or relatives so that most of the funds are used for property improvements.

9. Rehabilitation Standards - All repair work related to health and safety conditions will meet Uniform Building Code standards. The priority will be the elimination of health and safety hazards and code compliance. The replacement materials will be of a similar grade and quality compared to the original construction. Substantial upgrades such as premium carpet, travertine tile, marble tile, granite, or marble countertops, are not normally permitted to be paid with CalHome funds.

10. Mobile Homes - Rehabilitation or Replacement of a manufactured home not on a permanent foundation with a similar structure is permitted.

Rehabilitation of a manufactured home may include the replacement of the unit with a new or used manufactured home. A mobile home is eligible for replacement if the cost to rehabilitate it is not feasible. The footprint of the new structure may be larger if the cost of the new manufactured home does not exceed 110% of the cost that would have been incurred if the existing manufactured home had be en rehabilitated. This is usually 29 AGENDA ITEM NO. 6.

feasible when a “gently -used” coach is purchased. All costs associated with the purchase and transportation can be added to the loan.

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

C. Cost of architectural, engineering, and other consultant services which are directly related to the rehabilitation of the property and related to eligible work done using CalHome funds.

D. Non-recurring Loan closing costs, as applicable.

E. Replacement cost of a manufactured home not on a permanent foundation up to the maximum loan amount published in the current NOFA in the case where it has been determined by the City it is infeasible to rehabilitate the manufactured home. The replacement home must be similar quality, type, construction, square footage, etc. A structure on a non -permanent foundation (personal property) cannot be replaced by a structure on a permanent foundation (real property).

However, a stick-built structure on a permanent foundation may be r eplaced by a manufactured home when it is placed on a permanent foundation, since both are considered real property.

F. The City will incur and request for reimbursement, a CalHome activity delivery fee in an amount not to exceed the maximum amount published in the current NOFA per assisted unit.

G. Relocation costs during the project if required for health and safety, and if made part of the loan.

IX. PROHIBITED AND INELIGIBLE USES OF FUNDS
A. Refinancing of existing loans or payoff of personal obligations with CalHome funds.

B. Costs associated with the rehabilitation or repair of property owned by a mobile home park owner.

C. Property improvements not related to health and safety, correction of co de violations or compliance with local ordinances are not permitted. A partial list of ineligible upgrades are barbeques, outdoor kitchens, patios, decks, patio covers, swimming pools, hot tubs, animal shelters, sports courts, storage sheds, workshops, fou ntains, security systems, TV antennas, plantation shutters, wallpaper, tankless water heaters, upgraded carpet, built in entertainment centers, granite counter tops, travertine or marble tile, and garage floor coatings.

X. REHABILITATION CONSTRUCTION REQUIREMENTS
A. The City/Housing Inspector will schedule an initial inspection with the homeowner within 7 days of receiving notice by the City, to determine the rehabilitation work to be performed on the property.
30 AGENDA ITEM NO. 6.

1. Debris removal is a pre -construction requirement for a homeowner’s participation in the program. City staff must be able to access and inspect the parts of the home wherein repairs are needed, and contractors must be able to access those same areas in orde r to provide estimates and complete the repairs. The work area of the home must be in a clean and sanitary condition, free of debris, prior to project approval.

B. Further program eligibility will be determined by demonstrated need at the time of inspection (existence of health and safety issues). A Scope of Work, and estimate, will be prepared to identify the work to be performed. City’s Project Review Committee will review the Scope of Work for approval, or determination that the required or requested repairs are eligible/ineligible.

1. If after development of the Scope of Work (and estimate), the Inspector and/or City determines that the work is ineligible, the Applicant is notified of the cancellation of their Application.

2. If after development o f the Scope of Work (and estimate), the Inspector and/or City determines that the work is above what can be funded through the Program, work will be done to rescope the project if feasible, if not feasible, the Applicant is notified of the cancellation of their Application.

C. If Scope of Work is approved by the City’s Project Review Committee , the applicant will be notified in writing of the committee’s decision and City will draft a Rehabilitation Contract/Agreement between City and Applicant for the work to be performed, a nd prepare other required program documents (see below) for execution. All are provided to Applicant for signatures, and subsequently recorded as required.

1. If the Applicant is unable to obtain sufficient or any bids for the work to be done within 60 days of noticing, the reservation of funds will expire and the next person on the waiting list is given an opportunity to participate in the Program. The Applicant can be requested to be placed on the Eligible List again, but will be placed at the end of the list.

D. The City/Housing Inspector works with Applicant to obtain a minimum of three bids for the Scope of Work. Bids are provided to Applicant for selection.

Applicant is required to sign a rehabilitation contract /agreement between Applicant and general contractor/contractor for the work to be performed.

E. All general contractors and sub contractors selected by the Applicant are to be licensed by the Contractors State License Board and that they maintain Workers’ Compensation and Employer Liability insurance to the extent required by State Law. The contractor selected shall complete work i n accordance with the rehabilitation contract executed between the contractor and the Applicant , as approved by the City, an in a professional manner.

F. The City/Housing Inspector will monitor construction for compliance with the construction contract and program requirements. City expects to pay contractor 31 AGENDA ITEM NO. 6.

selected directly, once, at the completion of construction. Progress payments may be disbursed, on a case -by-case basis, only if approved in writing by the Applicant and City/Housing Inspector.

G. The City expects contractors submitting project estimates to do a thorough inspection of the item(s) to be repaired prior to preparing the bid. Change orders will only be approved if they are necessary to completing the repairs, and could not be anticipated prior to construction. Payment will not be issued for change orders unless they have been approved in writing by the homeowner and a City representative prior to the additional work beginning
XI. LOAN CLOSING PROCEDURES
The City shall be responsible for drawing the deferred payment loan documents, sending the documents and escrow instructions to escrow (unless the City handles the escrow themselves) and closing the loan.

A. Review of the Preliminary Title Report - The Preliminary Title Report is reviewed for correct property address and legal description, as well as confirmation of the title holders, all of whom must sign the loan documents. While reviewing the exceptions, the City may find that certain exceptions must be deleted from the ALTA Policy or may require special endorsements, as in the case of CC&R’s or easements. The City may also find liens and judgments against the homeowner that did n ot show up anywhere else. The report will also show if the property taxes are delinquent.

B. Drawing the CalHome Program Loan Documents and Loan Funding - The City will prepare, execute and record (as needed) the following documents:

C. CalHome Promissory Note e videncing the loan, payable to the City in the principal amount of the loan and stating the terms and rate of interest of the loan consistent with the requirements of the program. The City is prohibited from assigning its beneficial interest under the note . The note must be secured by a Deed of Trust, to be recorded with a title company.

D. The CalHome Deed of Trust shall name the City as the beneficiary and shall be recorded in a junior lien position to existing liens.

E. Clear instructions to the title company, which include requesting an original ALTA Policy with the City listed as a lien holder and a copy of Evidence of Insurance for all hazard and/or flood insurance policies showing the City as additional Loss Payee. In addition, instructions should include the prohibition of cash back to the borrower (except as defined in 25 CCR, Section 7731 [c]) and the requirement that any cash back should be applied to the principal amount of the CalHome loan.

F. Request for Copy of Request for Notice of Default or Sale to be recorded on behalf of the City.
32 AGENDA ITEM NO. 6.

G. Disclosure forms as required by State and Federal law.

H. Notice of Completion to be recorded. This may be a trailer document (a document provided to Escrow at a time subsequent to the recording of the Deed of Trust and Request for Notice of Default or Sale), but it must be recorded prior to requesting credit for the loan from HCD.

I. A Notice of a Three-Day Right of Rescission.

J. All the above closing documents are sent to escrow (unless the City does their own escrows) t o be reviewed by the escrow officer and for the borrower’s signature. Once the borrower has signed, all the above original documents, along with certified copies, except for the original Deed of Trust and Request for Copy of Notice of Default or Sale (thes e items will be sent to the County Recorder’s office for recording), are returned to the City to be reviewed for completeness, accuracy, and conformance to the escrow instructions. After the closing documents have been reviewed for compliance, and funds have been disbursed from the City to escrow, escrow will be able to record the CalHome lien. When the work has been completed, the Notice of Completion will be sent to Escrow for recordation. Since this is a document which protects the homeowner, the return address after recording should be that of the property.

K. City to ensure that the Applicant hasn’t been charged any unallowable fees and that they didn’t receive any unallowable cash back.

L. When the rehabilitation is complete City to verify that the total Cal Home loan funds have been spent or returned to the CalHome reuse account. There may not be any cash back to homeowners, even if their project came in under budget.

If all funds are not spent, the principal of the homeowner’s loan is reduced by the amount of the unspent funds. Unspent funds are deposited in the Reuse Account.

City to send a letter to the borrower indicating that the loan principal has been reduced by the amount of the unspent funds. The original Promissory Note must be annotated on the back to show the principal reduction and should be signed by the City’s Authorized Signatory. Promissory Note is to be stored in a secure, safe place, with a copy in the applicant/borrower file.

M. City will submit a Borrower Summary and all other required docume ntation to HCD within 90 days of completion of rehabilitation work.

N. City will verify that each applicant file contains the following documents:

1. Application for CalHome assistance.

2. Confirmation of household size.

3. Income and asset verification documentation and analysis.

4. Credit Report or other documentation required to show a good credit history.
33 AGENDA ITEM NO. 6.

5. Appraisal or valuation of before - and after -rehabilitation value of the property.

6. Preliminary title report.

7. When applicable: mortgage ver ifications and/or loan verifications for any other debt already existing and recorded against the property.

8. Initial property inspection report; work write -up, cost estimate; bid package; executed construction contract; verification of selected general contractor and subcontractor licensing status with the Contractors State License Board; evidence of Workers’ Compensation and Employer Liability Insurance; onsite inspection records and progress inspection reports for payment issuance, including a final inspection report and final line item budget of costs incurred.

9. Loan Agreement between the Contractor and the Borrower.

10. Copy of contract between Borrower and General Contractor.

11. CalHome draw request forms, including Borrower Summary Sheets.

12. CalHome loan escrow instructions.

13. From the escrow/title company: executed Promissory note; recorded Deed of Trust; Title Insurance Policy for the CalHome loan naming the Contractor as the insured; Hazard Insurance, including flood insuran ce when applicable, naming the Contractor as Additional Loss Payee; copy of recorded Request for Copy of Notice of Default or Sale, copy of recorded Notice of Completion, and a copy of the Settlement Statement.

14. Correspondence (including relevant e -mails) or notes of meetings or phone calls between the Contractor and the homeowner, other lenders, title or escrow companies or other parties contacted in relation to the homebuyer’s loan.

XII. ACTIVITY DELIVERY FEES
A. The City will be reimbursed by HCD for some of the costs incurred to deliver the rehabilitation loan. These costs are considered Activity Delivery Fees. Activity Delivery Fees will be in amounts that are customary and usual for similar services performed by private firms and be reasonable. CalH ome reserves the right to require supporting documentation to determine the appropriateness of any claimed costs, whether by line item or by totals.

B. Such costs could be for home inspections in the development of the work write - up, work write-ups, loan processing, underwriting, loan documents, construction payouts, contract management and bid reviews. These charges are not paid by the homeowner since the City is reimbursed by CalHome. Activity Delivery Fees are not included in the amount of the homeowner’s l oan and do not need to be paid back. These fees are to be reimbursed to the City as a grant. 34 AGENDA ITEM NO. 6.

C. For reimbursement, the City will complete the ADF section of the Borrower Summary and provide the closing documentation as outlined on the form. The maximum amount of ADF is determined by the corresponding NOFA in which funds were awarded.

D. The homeowner only pays for charges and costs that are performed by third party providers, not the City. Those one -time charges are considered non - recurring closing costs and may be paid either at the time of closing or added to the loan that the homeowner pays back. Such closing costs could be for appraisal, title searches, credit reports or escrow charges.

XIII. CONTRACTOR GUIDELINES AND REQUIREMENTS
A. The City can provide, upon request of the homeowner, a list of contractors who have completed repair projects through the program in the previous years.

However, homeowners can contact any contractor of their choosing as long as they meet the following criteria:
• The contractor must hold a current and valid State of California General Contractor’s license.
• The contractor cannot be on the State or Federal Debarred Contractors list.
• The contractor must have a City of Clovis business license. • The contractor must have current and valid General Liability and Workmen’s Compensation Insurance.
• The contractor must provide a one-year warranty for their work.

B. Bids submitted by contractors who do not meet the criteria will not be considered.

C. Contractor Payments: The City will pay the contractor directly. No funds will be distributed to the homeowner. Once the work has been completed, the contractor shall provide the City with all required Permits, Proof of Permit Inspection and Close-Out, and a Homeowner Satisfaction Statement signed by the homeowner. Once all required and completed documentation has been provided to the City, payment may be approved and processed. At the discretion of the City, p artial payments will be permitted if the project is large enough to warrant it.

D. Contractor/Homeowner Disputes - The agreement to complete work rests solely between the homeowner and the contractor, and therefore the City is not a party to the agreement. However, should a dispute arise, the City is willing to act as an intermediary to assist in an agreeable resolution. If it is deemed a contractor has not made a good faith effort to resolve the matter, or has been negligent, the contractor may be barred from participation i n future City -funded projects.

The homeowner may pursue legal action against the contractor through Small Claims Court and/or the State Contractors License Board.

35 AGENDA ITEM NO. 6.

XIV. LOAN MONITORING PROCEDURES
City will monitor Borrowers annually to ensure adherence to Program requirements including, but not limited to, the following:
• Owner-occupancy
• Property tax payment
• Hazard insurance coverage
• Good standing on Primary loans
• General upkeep of housing units
XV. PROGRAM LOAN REPAYMENT
A. Payments are voluntary during the deferral period. Borrowers can begin making voluntary payments at any time without penalty . The City will accept loan payments from borrowers prepaying deferred loans, and from borrowers making payments in full upon sale or transfer of the property.

B. All loan payments are payable to the City and are due at loan maturity. Program loan payments will be made to:

City of Clovis
1033 Fifth Street
Clovis, CA 93612
C. The City will be the receiver of loan payments or recaptured funds and will maintain a financial record -keeping system to record payments and file statements on payment status. Payments shall be deposited and accounted for in the City’s Program Income, or Reuse Account, as required by HCD programs (for CalHome loans).

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

XVI. LOAN ACCELERATION
In the event that an owner sells, transfers title, or discontin ues residence in the assisted property for any reason, the principal balance of the loan is due and payable, except:

A. If the owner of the property dies, and the heir to the property meets income requirements, the First -Time Homebuyer definition, and intends to occupy the home as a principal residence, the heir may be permitted, upon approval of the City, to assume the loan at the rate and terms the heir qualifies for under the current participation guidelines. If the property owner dies and the heir does not meet eligibility requirements, the loan is due and payable.

B. If an owner wants to convert the property to a rental unit, or any commercial or non-residential use, the loan is due and payable.
36 AGENDA ITEM NO. 6.

C. The loan will be in default if the borrower fails to maintain required fire or flood insurance or fails to pay property taxes. Additional information in regards to property restrictions in the event of default, can be found in the City’s Loan Servicing Policies and Procedures (Attachment E).

D. In regards to CalHome loans:

1. The following transfers of interest will not require the repayment of the CalHome Program Loan:
a. Transfer to a surviving joint tenant by devise, descent, or operation of law on the death of a joint tenant;
b. A transfer, in which the transferee is a person who occupies or will occupy the property, which is:
i. A transfer where the spouse becomes an owner of the property;
ii. A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an
owner of the property; or
iii. A transfer into an inter vivos trust in w hich the borrower is and remains the beneficiary and occupant of the property.

2. In general, loans are not assumable.

3. If it is determined by the City that repayment of the CalHome Program loan at the maturity date causes a hardship to the borrower, the City may employ the following two other options. They are:
a. Amending the note and deed of trust to defer repayment of the amount due at loan maturity, that is the original principal and the accrued interest, for up to an additional 30 years (at 0% additional interest), this may be offered one time, or;
b. Converting the debt at loan maturity, that is the original principal balance and any accrued interest, to an amortized loan, repayable in 15 years at 0% additional interest.

XVII. DRAW REQUESTS (TO HCD)
City will make every effort to submit more than one loan with each draw. With each individual draw, City will submit the following to HCD:

A. Completed Owner-Occupied Rehabilitation Draw Request. 37 AGENDA ITEM NO. 6.

B. Completed Owner -Occupied Rehabilitation Borrower Summary for each individual CalHome loan, with the following items attached to each in the following order:

1. Copy of the executed CalHome Promissory Note.

2. Copy of Deed of Trust.

3. Closing Disclosure.

4. Certified Settlement Statement (MA-Borrower/Seller, OOR-Borrower).

5. Completed Activity Delivery Fee Reimbursement form (If Applicable).

6. HCD Form 480.7 Statement of Lien.

7. Copy of Recorded Notice of Completion and/or Lien Releases from Contractors.

8. Initial or F inal Line Item Work Write -up (with cost and details supporting repairs).

9. Change Orders (with costs and details supporting work).

XVIII. CONFLICT OF INTEREST
To the extent consistent with Federal and State conflict of interest laws as they apply to local government officials, employees and agents, the following rules shall apply regarding eligibility for this program. No member of the governing body of the City nor other official, employee, or agent of the City government who exercises policy or decision-making authority in connection with the planning and implementation of the Program shall directly or indirectly be eligible for this Program. This ineligibility shall continue for one year after an individual’s relationship with the City ends.

When the Program Loan contains Federal funds, the applicable Conflict of Interest requirements of 24 CFR Section 570.611 shall be followed for CDBG assistance.

A contractor with a vested interest in the property cannot bid on a rehabilitation job, if applicable. Such a contractor may act as owner/builder, subject to standard construction procedures. Owner/builders are reimbursed for materials purchased which are verified by invoice/receipt and used on the job. Reimbursement occurs after the installation is verified by the City to be part of the scope of work. Owner/builders are not reimbursed for labor.

XIX. PROGRAM COMPLAINT AND APPEAL PROCEDURE
Any applicant denied assistance from the Program has the right to appeal. Complaints concerning the Program should be made in writing and filed with the City. Complaints by applicants, residents or property owners regarding the City’s Program should be ma de to the City’s Assistant City Manager , or Director of Community & Economic Development, who will investigate the complaint, prepare an analysis and recommendation and will schedule a discussion of the complaint with the Loan Review Committee. If the matter is not resolved to the satisfaction of the person filing the complaint, this person may submit a written appeal addressed to the City’s Loan Review Committee. The Loan Review Committee will be convened within fifteen (15) days from the date the appeal is received unless a longer period of time is requested by the appellant. Within five (5) working days from the date the appeal is heard by Loan Review Committee, the City will mail a written response of the Committee’s decision to the appellant. If the appellant is still not satisfied with the decision, they may appeal 38 AGENDA ITEM NO. 6.

in writing to the Clovis City Manager following the same timeline and procedures above. The decision of the City Manager will be final.

XX. PERFORMANCE REPORTING TO HCD
A. During the term of the CalHome Standard Agreement and, no later than 30 days after the end of each calendar quarter, the City will submit a Quarterly- Annual Report as required by HCD.

B. During the term of the Standard Agreement and, no later than 30 days after June 30th of each year and/or within 30 days of the expiration date of the Standard Agreement, the City shall submit, upon request of the Department, a Quarterly-Annual Report on the form provided by the Department.

C. At any time during the term of the Standard Agreement, the Department may perform or cause to be performed a financial audit of any and all phases of the Contractor’s program or homeownership development project. At the Department’s request, the Contractor shall provide, at its own expense, a financial audit prepared by a CPA.

D. Signature, Title and Date: The person submitting the Quarterly Status Report must be specifically authorized to sign this type of document and should provide his/her title, then sign and date the form. This form may not be signed by a staff person unless authorized through resolution.

E. Annual Reporting of the Reuse Account
The annual reporting of the Reuse Account will continue for the length of 20 years, until the expiration date of the City’s CalHome Program Monitoring Agreement. This report is required annually and is done after the Standard Agreement has expired to report what has specifically taken place in the Reuse Account during the last year.

XXI. AUDIT/RETENTION AND INSPECTION OF RECORDS
A. City shall retain any and all records, accounts, documentation, and all other relevant materials pertaining to performance of this Program for a minimum of five (5) years after the expiration of this Agreement for this Program and any and all amendments thereto, unless a longer period of record retention is stipulated.

City shall retai n any and all records, accounts, documentation, and all other relevant materials pertaining to performance of the Program for a minimum of five (5) years after the conclusion or resolution of any and all audits or litigation relevant to this Program and related Agreement, unless a longer period of record retention is stipulated.

B. At any time during the term of the Program, HCD may perform or cause to be performed, an independent financial audit of any and all phases of the Work. At HCD’s request, the City sh all provide, at its own expense, a financial audit prepared by a certified public accountant.
39 AGENDA ITEM NO. 6.

C. City shall adequately document each transaction to permit the determination, through an audit if requested by HCD, of the accuracy of the records and the allowability of the expenditures paid in whole or in part, with Program funds. If the allowability of an expenditure cannot be determined because records or documentation are inadequate, the questionable expenditure shall be disallowed. The City shall reimburse HCD for the amount of any disallowed expenditures of the City or its agents or subcontractors. Determination by HCD of allowability of any expenditure shall be final.

D. City agrees that HCD, or its delegatee shall have the right to review, obtain, and copy all records pertaining to performance of this Program/Agreement. City agrees to provide HCD or its delegatee with any relevant records, accounts, documentation, and all other relevant materials requested and shall permit HCD or its delegatee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees and inspecting and copying such records, accounts, documentation, and all other materials relevant to a matter under investigation for the purpose of determining compliance with Gov. Code, section 8546.7, or pursuant to a financial audit under subsection B above. City further agrees to maintain such records for a period of five (5) years after final payment under the Program/Agreement.

XXII. COMPLIANCE WITH STATE AND FEDERAL LAWS, RULES AND GUIDELINES City agrees at all times to act with respect to the CalHome Program, CalHome activities, and to use the funds committed herein in conformity with all laws applicab le to the CalHome Program including those of the State of California, all federal laws, all local rules or ordinances, all Program Requirements, including the CalHome Statutes and Guidelines. City also agrees to comply with all State and Federal laws, rule s and regulations that pertain to construction, health and safety, labor, fair employment practices, equal opportunity, and all other matters applicable to the Work.

XXIII. REUSE ACCOUNT
All repayments of loan principal and any loan interest accrued (collectively “Program Income” or “PI”) will be deposited to a separately maintained CalHome Reuse Account. This is a separate account from the City’s active grant accounts. The City currently maintains a CalHome Reuse Account which includes deposits from all CalHome activities and for all CalHome grants from previously received Program funds. Within the one account the City identifies the grant source of the funds. See Attachment F for the City’s Reuse Account Plan.

XXIV. LOAN SERVICING POLICIES AND PROCEDURES
The City has developed a Loan Servicing Plan ( Attachment E), identifying loan servicing duties, such as process for monitoring continued owner -occupancy, verifying annual insurance requirements, calculating payoffs, etc.

40 AGENDA ITEM NO. 6.

XXV. AMENDMENTS
Amendments to these guidelines may be made by the City whenever appropriate to improve Program effectiveness and to resolve problems. As part of the amendment adoption process, the City will review the policies of the funding source to ensure continuing compliance with published policies. Minor technical amendments will be made by City staff as the program progresses, to ensure proper administration of the program. Policy amendments will be taken before the City Council for their review and approval. Copies of amendments will be submitted to HCD for review and approval.

41 AGENDA ITEM NO. 6.

ATTACHMENT A
Annual Income Inclusions and Exclusions
Part 5 Inclusions
This table presents the Part 5 income inclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

General Category (Last Modified: January 2005)

1. Income from
wages, salaries, tips,
etc.

The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services.

2. Business Income
The net income from the operation of a business or profession. Exp enditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight -line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family.

3. Interest &
Dividend Income
Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in number 2 (above). Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5, 000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD.

4. Retirement &
Insurance Income
The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump -sum amount or prospective monthly amounts for the delayed start of a periodic payment (except for certain exclusions, listed in Income Exclusions, number 14).

5. Unemployment &
Disability Income
Payments in lieu of earnings, such as unemployment and disability compensation, worker's compen sation and severance pay (except for certain exclusions, listed in Income Exclusions, number 3).

6. Welfare
Assistance
Welfare Assistance. Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income:
• Qualify as assistance under the TANF program definition at 45 CFR 260.31; and • Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c).

If the welfare assistance payment includes an amount specifically des ignated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of:
• the amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus:
• the maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family welfare assistance is reduced from the standard of need by applying a percentage, the amount calculated under 24 CFR 5.609 shall be the amount resulting from one application of the percentage.

7. Alimony, Child
Support, & Gift
Income
Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling.

8. Armed Forces
Income
All regular pay, special day, and allowances of a member of the Armed Forces (except as provided in number 8 of Income Exclusions).

Part 5 Exclusions
This table presents the Part 5 income exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

General Category (Last Modified: January 2005)

1. Income of
Children Income from employment of children (including foster children) under the age of 18 years.

2. Foster Care
Payments
Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone).
42 AGENDA ITEM NO. 6.

3. Inheritance and
Insurance Income
Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains, and settlement for personal or property losses (except for certain exclusions, listed in Income Inclusions, number 5).

4. Medical Expense
Reimbursements
Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member.

5. Income of Live-in
Aides Income of a live-in aide (as defined in 24 CFR5.403).

6. Income from a
Disabled Member
Certain increase in income of a disabled member of qualified families residing in HOME -assisted housing or receiving HOME tenant-based rental assistance (24 CFR 5.671 (a)).

7. Student Financial
Aid The full amount of student financial assistance paid directly to the student or to the educational institution.

8. "Hostile Fire" Pay The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.

9. Self-Sufficiency
Program Income
a. Amounts received under training programs funded by HUD. b. Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set side for use under a Plan to Attain Self-Sufficiency (PASS).
c. Amounts received by a participant in other publicly assisted programs that are specifically for, or in reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, childcare, etc.) and which are made solely to allow participation in a specific program. d. Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for t he PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving s a member of the PHA’s governing board. No resident may receive more than one such stipend during the same period of time.
e. Incremental earnings and benefits resulting to any family member from participation in qualifying state or local employment training programs (including training not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment - training program.

10. Gifts Temporary, nonrecurring, or sporadic income (including gifts).

11. Reparation
Payments
Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era.

12. Income from
Full-time Students
Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household or spouse).

13. Adoption
Assistance Payments Adoption assistance payments in excess of $480 per adopted child.

14. Social Security &
SSI Income
Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts.

15. Property Tax
Refunds
Amounts received by the family in the form of refunds or rebates u nder state or local law for property taxes paid on the dwelling unit.

16. Home Care
Assistance
Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep this developmentally disabled family member at home.

17. Other Federal
Exclusions
Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal Register and distributed to housing owners identifying the benefits that qualify for this exclusion. Updates will be published and distributed when necessary. The following is a list of income sources that qualify for that exclusion:

The value of the allotment provided to an eligible household u nder the Food Stamp Act of 1977; Payments to volunteers under the Domestic Volunteer Service Act of 1973 (employment through AmeriCorps, VISTA, Retired Senior Volunteer Program, Foster Grandparents Program, youthful offender incarceration alternatives, senior companions);
Payments received under the Alaskan Native Claims Settlement Act; Income derived from the disposition of funds to the Grand River Band of Ottawa Indians; Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;
Payments or allowances made under the Department of Health a nd Human Services’ Low-Income Home Energy Assistance Program.

Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721); The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U.S. Claims Court and the interests of individual Indians in trust or restricted lands, including the first $2,000 per year of income received by individual Indians from funds derived from interests held in such trust or restricted lands;
43 AGENDA ITEM NO. 6.

Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under the Federal work-study program or under the Bureau of Indian Affairs student assistance programs; Payments received from programs funded under Title V of the Older Americans Act of 1985 (Green Thumb, Senior Aides, Older American Community Service Employment Program); Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.);
Earned income tax credit refund payments received on or after January 1, 1991, including advanced earned income credit payments;
The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990;
Payments received under programs funded in whole or in part under the Job Training Partnership Act (employment and training programs for Native Americans and migrant and seasonal farm workers, Job Corps, veterans employment programs, state job training programs and career intern programs, AmeriCorps).

Payments by the Indians Claims Commission to the Confederated Tribes and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation;
Allowances, earnings, and payments to AmeriCorps participants u nder the National and Community Services Act of 1990;
Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida who is the child of a Vietnam veteran;
Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant unde r the Victims of Crime Act; and
Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998.

44 AGENDA ITEM NO. 6.

ATTACHMENT B

GROSS INCOME WORKSHEET
(use actual HCD form)

ASSETS
Household Member Assets Description Current Value Actual Income from Assets
(Annualized)*

1. Totals 1(a) 1(b)

2. If line 1(a) is $5,000 or less, enter 0 here and in line 6(d) below.

Income from assets of $5,000 or less is not included in the determination of income eligibility.

2. 3. If line 1(a) is greater than $5,000:
(a) multiply line 1(a) by 2.0% and enter results here 3(a) (b) enter amount from line 1(b) 3(b)
(c) Enter the greater of lines 3(a) or 3(b) here and in line 6(d) below.
3(c)
ANTICIPATED ANNUAL INCOME *

Household Member
a.

Wages/
Salaries
b.

Benefits/
Pensions
c.

Other
Income
d.

Asset
Income

6. Totals

a.

b.

c.

d.

7. Enter total of items from 6a.through 6d. (Total Income)

7. * Use Wage Income Calculations Worksheet (includes method for annualizing amounts)

Completed and Reviewed by: ______________________________ Date: _________ 45 AGENDA ITEM NO. 6.

ATTACHMENT C
Annual Income Asset Inclusions and Exclusions
This table presents the Part 5 asset inclusions and exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

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

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

Assets held in foreign countries are considered assets.

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

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

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

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

6. Retirement and pension funds.

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

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

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

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

Exclusions

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

2. Interest in Indian trust lands.

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

4. Equity in cooperatives in which the family lives.

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

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

Assets that are Part of an Active Business. "Business" does not include rental of properties that are held as an investment and not a main occupation.
46 AGENDA ITEM NO. 6.

ATTACHMENT D

LEAD-BASED PAINT

VISUAL ASSESSMENT, NOTICE OF PRESUMPTION, AND HAZARD REDUCTION FORM

Section 1: Background Information
Property Address: No LBP found or LBP exempt 
Select one: Visual Assessment  Presumption  Hazard Reduction 

Section 2: Visual Assessment. Fill out Sections 1, 2, and 6. If paint stabilization is performed, also fill out Sections 4 and 5 after the work is completed.

Visual Assessment Date: Report Date:

Check if no deteriorated paint found 
Attachment A: Summary where deteriorated paint was found.

Section 3: Notice of Presumption. Fill out Sections 1, 3, 5, and 6. Provide to occupant w/in 15 days of presumption.

Date of Presumption Notice:

Lead-based paint is presumed to be present  and/or Lead-based paint hazards are presumed to be present 
Attachment B: Summary of Presumption:

Section 4: Notice of Lead-Based Paint Hazard Reduction Activity. Fill out Sections 1, 4, 5, and 6.

Provide to occupant w/in 15 days of after work completed.

Date of Hazard Reduction Notice:

Initial Hazard Reduction Notice? Yes  No  Start & Completion Dates:

If “No”, dates of previous Hazard Reduction Activity Notices:

Attachment C: Activity locations and types.

Attachment D: Location of building components with lead-based paint remaining in the rooms, spaces or areas where activities were conducted.

Attachment E: Attach clearance report(s), using DHS form 8552 (and 8551 for abatement activities)

Section 5: Resident Receipt of Notice for Presumption or Lead-Based Paint Hazard Reduction Activity Printed Name: Signature: Date:

Section 6: Contact Information Organization:

Contact Name: Contact Signature:

Date: Address: Phone:

47 AGENDA ITEM NO. 6.

ATTACHMENT E
City of Clovis – Loan Servicing Policies and Procedures The City of Clovis, hereafter called " City," has adopted these policies and procedures to preserve its financial interest in properties whose "Borrowers" have been assisted with public funds. The City will to the greatest extent possible follow these policies and procedures, but each loan will be evaluated and handled on a case -by-case basis. The City has formulated this document to comply with state and federal regulations regarding the use of these public funds and any property restrictions, which are associated with them.

1. Loan Repayments:

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

For Notes which are deferred payment loa ns, the City will accept voluntary payments on the loan. Loan payments will be credited to principal. The Borrower may repay the loan balance, and any interest as applicable, at any time with no penalty. Partial repayments will be annotated in the City’s loan portfolio, and individual homeowner file.

2. Annual Occupancy Restrictions and Certifications:

On owner-occupant loans, the City will require that Borrowers annually certify owner occupancy, during the term of the loan, by submitting utility bills and/or other documentation. For CDBG, some loans may have income and housing cost evaluations, which require a household to document that they are not able to make amortized loan payments, typically every five years. These loan terms are incorporated in the origi nal Note and Deed of Trust. On HOME -funded loans, annual occupancy verification will occur between January 1 and 15 of each year for the term of the loan.

Annual occupancy certifications will be consolidated into a once per year requirement occurring approximately October 15, of each year, for all Housing Programs.

NOTE: In regards to CalHome Program loans: 1) loans are not assumable, and cannot be reassigned if original Borrower is no longer occupying the assisted home; 2) when an owner is not residing in the home due to illness and/or hospitalization, the situation may be considered as a continued owner -occupancy only for the initial six months of absence.

3. Loan Discounting (Owner-Occupied Rehabilitation):

When actual costs to rehabilitate a home is lower than the amount borrowed in the Promissory Note, the City will discount the Note by writing the discount on the back of the Note and identifying the revised amount in the City’s Loan Portfolio and File documentation.

4. Request for Payoff Demands:

City will process request for payoff demands by calculating loan payoffs, including any applicable interest schedules. The calculation will be provided to the owner, escrow officer, or City, with a “good until” date, at which time, if the loan isn’t paid off in full, the Borrower will have to request and receive an updated payoff letter from the City. 48 AGENDA ITEM NO. 6.

Once the loan is paid in full, the City will draft and execute a Full Reconveyance, and have the notarized document recorded at the County Recorder’s office. The repayment will be processed according to the funding program Reuse Account Plan, and the loan taken off of the City‘s loan portfolio.

5. Payment of Property Taxes and Insurance:

As part of keeping the loan from go ing into default, borrower must maintain property insurance coverage naming the City as loss payee. Except for HOME-funded loans, if borrower fails to maintain the necessary insurance, the City may take out force placed insurance to cover the property while the Borrower puts a new insurance policy in place.

All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower's new insurance.

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

Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes then the City may pay the taxes current and add the balance of the tax payment plus any penalties to the balance of the loan (not permissible when funded with HOME).

Wherever possible, the City encourages Borrower to have impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment. The City will verify the continued payment of property taxes on an annual basis.

6. Required Request for Notice of Default:

When the Borrower's loan is in second position behind an existing first mortgage, it is the City's policy to prepare and record a "Request for Notice of Default" for each senior lien in front of City's loan. This document requires any senior lienholder listed in the notice to notify the City of initiation of a foreclosure action. The City will then have time to contact the Borrower an d assist them in bringing the first loan current, if possible.

The City can also monitor the foreclosure process and go through the necessary analysis to determine if the loan can be made whole or preserved. When the City is in a third position and receives notification of foreclosure from only one senior lienholder, it is in their best interest to contact any other senior lienholders regarding the status of their loans.

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

In all cases w here there is a change in title or occupancy or use, the Borrower must notify the City in writing of any change. City and Borrower will work together to ensure the property is kept in compliance with the original Program terms and conditions such that it remains available as an affordable home for low-income families. These types of changes are typical when Borrowers do estate planning (adding a relative to title) or if a Borrower dies and property is transferred to heirs or when the property is sold or 49 AGENDA ITEM NO. 6.

transferred as part of a business transaction. In some cases, the Borrower might move and turn the property into a rental unit without notifying the City. Changes in title or occupancy must be in keeping with the objective of benefit to low -income households (below 80 percent of AMI).

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

NOTE: CalHome Program loans are not assumable, and cannot be reassigned if original Borrower is no longer occupying the assisted home, unless the transfer meets the requirements in Section 8 below.

If a transfer of the property occurs through inheritance, the heir (as owner -occupant) may be provided the opportunity to assume the loan at an interest rate based on household size and household income, provided the heir is income eligible. If the heir intends to occupy the property and is not low -income, the balance of the loan is due and payable. For CDBG only, if the heir intends to act as an owner­ investor (not permitted under HOME), the balance of the loan may be converted to an owner/investor interest rate and loan term and a rent limitation agreement is signed and recorded on title. All such changes are subject to th e review and approval of the City's Loan Committee.

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

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

8. Request for CalHome Loan Transfer:

In regards to CalHome Loans, the following transfers of interest shall not require the repayment of the loan:
• Transfer to a surviving joint tenant by devise, descent, or operation of law on the death of a joint tenant;
• A transfer, in which the transferee is a person who occupies or will occupy the property, which is:
o A transfer where the spouse becomes an owner of the property; 50 AGENDA ITEM NO. 6.

o A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an owner of the property; or
o A transfer into an intervivos trust in which the Borrower is and remains the beneficiary and occupant of the property.

9. Requests for Subordinations after loan is Recorded:

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

For CalHome Program loans: 1) the new senior lien must be for rate or term changes only, and may include financed closing costs; 2) the term of the new senior lien must mature concurrently or after the CalHome lien; 3) the new senior lien must be amortized for the entire period of the loan (negative amortization, balloon payments, or changes in payments are not allowed – all terms required of a first lien placed concurrently with a CalHome lien apply).

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

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

10. Process for Loan Foreclosure:

Upon any condition of loan default: 1) non -payment (if required); 2) lack of insurance or property tax payment; 3) change in title or use without approval; 4) default on senior loans, the City will send out a letter to the Borrower notifying them of the default 51 AGENDA ITEM NO. 6.

situation. If the default situation continues then the City may start a formal process of foreclosure.

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

If the City determines, based on information on the reinstatement amount and status of Borrower, that bringing the loan curren t will not preserve the loan, then staff must determine if it is cost effective to protect their position by paying off the senior lienholder in total and restructure the debt such that the unit is made affordable to the Borrower.

If the City does not have sufficient funds to pay the senior lienholder in full, then they may choose to cure the senior lienholder and foreclose on the property themselves. As long as there is sufficient value in the property, the City can afford to pay for the foreclosure process and pay off the senior lienholder and retain some or all of their investment.

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

11. City as Senior Lienholder
When the City is first position as a senior lienholder, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assis t the homeowner in bringing and keeping the loan current. These attempts will be conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the City may consider foreclosure. City's staff will consider the following factors before initiating foreclosure:
• Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary? • Can the Borrower refinance with a private City and pay off the City? • Can the Borrower sell the property and pay off the City? o Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
52 AGENDA ITEM NO. 6.

• Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and
• Will there be marketing costs?
If the balance is substantial and all of the above factors have been considered, the City may "opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty - day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the City to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

At the end of thirty days, the City should contact a reputable foreclosure service or local title company to prepare and record foreclosure documents and make all necessary notifications to the owner and junior lienholders. The service will advise the City of all required documentation to initiate foreclosure (No te and Deed of Trust usually) and funds required from the owner to cancel foreclosure proceedings. The service will keep the City informed of the progress of the foreclosure proceedings.

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

12. Records Retention
The Originals of legal documents (i.e. Promissory Note, Deed of Trust, Request for Notice of Default or Sale, Reconveyances and Cancelled Loan documents, etc.) will be kept in a secure location with restricted access.

All documentation pertaining to the applications, loans, inspections, work write-ups, etc., or the operation of the City’s Housing Program will remain available to funding agency staff for three years after termination of the funding Agreement, or as required by the agency.
53 AGENDA ITEM NO. 6.

ATTACHMENT F
City of Clovis – Reuse Account Plan (CalHome Program)
The City of Clovis (“City”) commits to maintaining policies and procedures that segregate CalHome funds for future reuse. This reuse account plan is intended to satisfy the requirements specified in Article 2, Section 7724 of the CalHome Program, Title 25 California Code of Regulations, Division 1, Chapter 7, sub Chapter 9, commencing with Section 7715.

CalHome loans shall be managed in accordance with the following policies:

1. All repayments of CalHome loan principal and interest shall be received by the Cit y and deposited into a separate reuse account maintained by the City’s Finance Department.

The City provides a detailed tracking system to document CalHome loans, including borrower name and address, loan/reference number, grant year, APN, date loan was provided and date of loan maturity, and principal and interest.

2. The reuse account shall be an interest-bearing account into which all earned interest shall be deposited. Interest earned shall be considered reuse funds and will be reused for CalHome Program eligible purposes.

3. All funds deposited into the reuse account shall be the property of the City.

4. All CalHome reuse funds shall be expended in accordance with CalHome Program regulations. This includes, but is not limited to, restriction on income levels o f recipients, homebuyer education requirements, and maximum loan amounts.

5. Reuse funds may be used for CalHome Program eligible activities, including the following:
a. First-time homebuyer mortgage assistance;
b. Cost of homebuyer education for each borrower rec eiving mortgage assistance from the reuse account (not to exceed maximum CalHome allowance); c. Loan processing activity delivery fee, as applicable, in accordance with CalHome Program requirements in effect at the time of the loan; d. Up to five percent (5%) for loan servicing;
e. Owner-occupied rehabilitation assistance;
f. Mobile home replacement; and
g. Housing development projects.

6. A portion of the funds deposited in the CalHome reuse account may be used to pay for the delivery of CalHome activities funded from the reuse account. The amount is dependent upon the activity funded and is calculated as a percentage of the loan made.

7. Reuse funds will only be used within the city limits of Clovis.

8. The City will strive to utilize CalHome reuse funds on an ongoing basis.

9. The City will comply with all HCD reporting requirements regarding the use of CalHome reuse funds.

10. The City shall allow HCD full access to the reuse account records for the purpose of determining the City’s compliance with CalHome regulations.

11. The City has the authority to amend this document. All amendments to the Reuse Account Plan are subject to final approval by HCD.
54 AGENDA ITEM NO. 6.

CITY OF CLOVIS

FIRST TIME HOMEBUYER AND MORTGAGE ASSISTANCE

LOAN PROGRAM GUIDELINES
(CalHome, CDBG and HOME Program)
REV. May 16, 2022
ATTACHMENT 3
55 AGENDA ITEM NO. 6.

TABLE OF CONTENTS
I. INTRODUCTION ................................ ................................ ................................ .................... 1 II. PROGRAM OUTREACH AND MARKETING .................................................................... 1 III. PROGRAM PROCESSES AND APPLICANT PRE-QUALIFICATION ................................. 2 IV. THE HOME PURCHASE PROCESS ............................................................................... 3 V. APPLICANT ELIGIBILITY ............................................................................................... 6 VI. HOMEBUYER COSTS ................................................................................................. 11 VII. ELIGIBLE HOUSING UNITS ......................................................................................... 11 VIII. PROPER NOTIFICATION AND DISCLOSURES TO SELLER ......................................... 15 IX. INITIAL PURCHASE PRICE LIMITS – MAXIMUM SALES PRICE .................................... 16 X. MAXIMUM PROGRAM LOAN ....................................................................................... 16 XI. HOMEBUYER EDUCATION REQUIREMENTS .............................................................. 17 XII. PRIMARY LOAN REQUIREMENTS .............................................................................. 17 XIII. PROGRAM LOAN TERMS ........................................................................................... 20 XIV. PROGRAM LOAN UNDERWRITING REQUIREMENTS, REVIEW AND APPROVAL ........ 21 XV. ADDITIONAL PROGRAM REQUIREMENTS .................................................................. 22 XVI. SUBORDINATE FINANCING ........................................................................................ 23 XVII. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE ................................ 23 XVIII. INELIGIBLE TRANSACTIONS AND USES OF PROGRAM FUNDS ................................. 24 XIX. LOAN MONITORING PROCEDURES ........................................................................... 24 XX. PROGRAM LOAN REPAYMENT .................................................................................. 25 XXI. LOAN ACCELERATION ............................................................................................... 25 XXII. DRAW REQUESTS TO HCD ........................................................................................ 26 XXIII. CONFLICT OF INTEREST ........................................................................................... 27 XXIV. PROGRAM COMPLAINT AND APPEAL PROCEDURE .................................................. 27 XXV. PERFORMANCE REPORTING TO HCD ....................................................................... 28 XXVI. AUDIT/RETENTION AND INSPECTION OF RECORDS ................................................. 28 XXVII. COMPLIANCE WITH STATE AND FEDERAL LAWS, RULES AND GUIDELINES ............. 29 XXVIII. REUSE ACCOUNT ...................................................................................................... 29 XXIX. AMENDMENTS ........................................................................................................... 30 XXX. LOAN SERVICING POLICIES AND PROCEDURES ....................................................... 30 56 AGENDA ITEM NO. 6.

CITY OF CLOVIS

FIRST TIME HOMEBUYER AND MORTGAGE ASSISTANCE

LOAN PROGRAM GUIDELINES

I. INTRODUCTION
The City of Clovis, hereinafter referred to as the “City” has entered into a contractual relationship with the California Department of Housing and Community Development (“HCD”) to administer one or more HCD -funded homebuyer programs. The homebuyer program described herein (the “Program”) is designed to provide assistance to eligible homebuyers in purchasing homes, also referred to herein as “housing units”, located within the Program’s eligible area, as described herein. The Program provides this assistance in the form of a low- interest, deferred payment, “silent” second loans as “Gap” financing toward the purchase price and closing costs of affordable housing units that will be occupied by the homebuyers as their primary residence. The Program will be administered by the City of Clovis.

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

A. The Fair Housing Lender and Accessibility logos will be placed on all outreach materials. Fair housing marke ting actions will be based upon a characteristic analysis comparison (census data may be used) of the Program’s eligible area compared to the ethnicity of the population served by the Program (includes, separately, all applications given out and those rece iving assistance) and an explanation of any underserved segments of the population. This information is used to show that protected classes (age, gender, ethnicity, race, and disability) are not being excluded from the Program. Flyers or other outreach materials, in English and any other language that is the primary language of a signific ant portion of the area residents, will be widely distributed in the Program -eligible area and will be provided to any local social service agencies. The Program may City homebuyer classes to help educate homebuyers about the home buying process and future responsibilities. Persons who have participated in local homebuyer seminars will be notified about the Program.

B. The City will work with local real estate agents and primary lenders to explain the Program requirements for eligible housing units and homeb uyers, and to review Program processes. Local real estate agents and primary lenders will also be encouraged to have their customers participate in the Program.

C. Section 504 of the Rehabilitation Act of 1973 prohibits the exclusion of an otherwise qualifie d individual, solely by reason of disability, from participation 57 AGENDA ITEM NO. 6.

under any program receiving Federal funds. The Program City will take appropriate steps to ensure effective communication with disabled housing applicants, residents and members of the public.

D. As funding becomes available, City staff will market the program through the following methods:

1. Outreach to households on the City’s interest list.

2. Publication on City’s Website

3. Publication on City’s Social Media Sites

4. Placing brochures and flyers at the following locations: Planning and Development Services Department, City of Clovis Administration Office, Senior Center, County Library – Clovis Site, local mobile home parks, and local social service agencies.

E. Applications for the City’s First Time Homebuyer and Mortgage Assistance Loan Program will be available by calling the City of Clovis at (559) 324-2094, can be downloaded from the City website, or picked up at the City of Clovis Administration Office, 1033 Fifth Street, Clovis, CA.

III. PROGRAM PROCESSES AND APPLICANT PRE-QUALIFICATION
A. The City maintains a list of interested applicants. As funding is available, all applicants will be provided notice, and a copy of the Application Form. Each potential applicant is required to complete an application form, which asks for sufficient information concerning income, assets, employment, household members, and income of household members to establish preliminary eligibility for Program participation.

B. Applicants will be requested to identify race, ethnicity, senior and Veteran status at the time of submitting an application. All applications will be processed in accordance with state and federal fair lending regulations to assure nondiscriminatory treatment, outreach, and access to the Program. No person shall be excluded or denied benefits on the grounds of age, ancestry, color, creed, physical or mental disability or handicap, marital or familial status, medical condition, national origin, race, religion, gender or sexual orientation.

C. Applications are date/time stamped when received by the City and reviewed for completeness. Applications are deemed complete only if all information required is included, any necessary documents are attached, the application is signed and dated, and a primary lender’s pre -qualification letter is attached to the application. Incomplete applications are returned to the applicant and will not be date/time stamped until complete.

D. Completed applications are “Accepted” by City staff and documented as such with City -staff signature, date and time on the application. Accepted applications/applicants are placed on a waiting list and processed on a first come first served basis. Applicants are advised of their placement on the list, and informed that their application wi ll undergo a full review , processing and 58 AGENDA ITEM NO. 6.

underwriting as outlined in this document when their application reaches the top of the waiting list. They are also advised that the waiting list expires when funding for the specific program/program year is depleted.

E. Once the applicant’s name comes to the top of the waiting list, the City verifies and confirms their Program pre-qualification and eligibility by verifying income and first-time homebuyer status . If program eligibility is verified, Applicant is invited to a briefing regarding participation in the Program. At the briefing the application is reviewed and the potential homebuyer is given a “Preliminary Eligibility Letter” for the Program along with the following forms: Program Brochure, Instructions to H ome Buyer (Attachment A) , List of Participating Lenders, Sellers Lead -Based Paint Disclosure and the EPA Booklet – “Protect Your Family from Lead in Your Home ” (Attachment B) and Notice to Seller (Attachment C).
• If the City encounters material discrepanci es and/or misrepresentations, during Program eligibility confirmation, and/or there are income, asset, household composition, or other important questions that can't be resolved, the Applicant is notified of the cancellation of their Application . In this c ase, the applicant may re -apply after six months have elapsed from the time of written assistance denial. If the then current waiting list includes sufficient applicants to account for the available funding, the applicant is placed back on the interest list and notified when additional funding is available as noted above.

F. The potential homebuyer is given 90 days to find a qualified home (see Section IV: The Home Purchase Process) and begin securing the primary loan for the housing unit. Homebuyer should facilitate the following: having the primary lender send the City any documents required as part of these guidelines, furnishing any additional required documentation to the City, signing any required documents, closing escrow. If during the 90 -day time frame, the potential homebuyer is unable to identify a home to purchase (and/or secure a primary loan), an extension may be given , for no more than an additional 30 calendar days.

G. If it appears the potent ial homebuyer cannot participate in the Program, the reservation of funds expires and the next person on the waiting list is given an opportunity to participate in the Program , and the applicant is notified of the cancellation of their Application . If the then current waiting list includes enough applicants to account for the available funding, the applicant is placed back on the interest list and notified only when additional funding is available as noted above.

IV. THE HOME PURCHASE PROCESS
A. The Applicant will be responsible for searching for , and making an offer for, an eligible housing unit, and securing a primary loan (see sample calculations below).
59 AGENDA ITEM NO. 6.

B. Applicant will ensure Escrow Company and/or Primary Lender submits executed standard form purchase and sale agreement and primary lender prequalification letter to City. The Primary Lender’s purchase and sale agreement will be contingent on the household and housing unit meeting the City’s Program eligibility/underwriting requirements and receiving Program loan approval , in writing, from the City.

C. The following is a simplified example of how a primary lender would analyze a homebuyer’s finances to determine how much the homebuyer could afford to borrow from the primary lender towards homeownership (see below).

DEBT SERVICE
FOR A FAMILY OF FOUR EARNING $4,583 PER MONTH
HOME PURCHASE PRICE: $280,000

HOUSING PAYMENTS (COST) TOTAL OVERALL PAYMENTS
Principal & Interest Payment $ 1,022 Housing Expense $ 1,360 Insurance 63 Other Household Debt Service 300
Taxes + 275 Total Debt Service $ 1,660
Total Housing Expense $ 1,360

IN THIS EXAMPLE:
• Primary Loan Interest Rate is 5.5%
• Down-payment was 1% of purchase price ($2,800)
• PMI may not be required due to LTV
• PITI is less than 30% ($1,397 max)
• Overall debt service per month is less than 41% ($1,909 max)

OTHER HOUSEHOLD DEBT SERVICE:

Car Payment $ 200
Credit Card Payment 100
Total Other Debt $ 300

A $1,360 per month payment equates to borrowing
$180,000 at 5.5% for a 30-year term.

SUBSIDY CALCULATION FOR HOME PURCHASE PRICE OF $280,000 FOR A FAMILY OF FOUR EARNING $4,658 PER MONTH

Purchase Price of Property $ 280,000
Less Primary Loan Amount - 180,000
Less Down-payment of 1% - 2,800
Equals “Gap” = 97,200
Plus estimated allowable
settlement/non-recurring charges

+ 10,000

Equals Total Needed Subsidy $ 107,200 *

*City may choose to layer subsidy, or require buyer to seek additional financing from other deferred silent second source
60 AGENDA ITEM NO. 6.

DEBT SERVICE
FOR A FAMILY OF FOUR EARNING $4,583 PER MONTH
HOME PURCHASE PRICE: $348,000 **
** only if higher home value limits are approved by HUD

HOUSING PAYMENTS (COST) TOTAL OVERALL PAYMENTS
Principal & Interest Payment $ 1,186 Housing Expense $ 1,607 Insurance 79 Other Household Debt Service 300
Taxes + 342 Total Debt Service $1,907
Total Housing Expense $ 1,607

IN THIS EXAMPLE:
• Primary Loan Interest Rate is 5.5%
• Down-payment was 1% of purchase price ($2,800)
• PMI may not be required due to LTV
• PITI is less than 38% ($1,770 max)
• Overall debt service per month is less than 41% ($1,909 max)

OTHER HOUSEHOLD DEBT SERVICE:

Car Payment $ 200
Credit Card Payment 100
Total Other Debt $ 300

A $1,607 per month payment equates to borrowing
$209,000 at 5.5% for a 30-year term.

SUBSIDY CALCULATION FOR HOME PURCHASE PRICE OF $348,000 FOR A FAMILY OF FOUR EARNING $4,658 PER MONTH

Purchase Price of Property $ 348,000
Less Primary Loan Amount - 209,000
Less Down-payment of 1% - 3,480
Equals “Gap” $ 135,520
Plus estimated allowable
settlement/non-recurring charges

+ 10,000

Equals Total Needed Subsidy $ 145,520 *

*City may choose to layer subsidy, or require buyer to seek additional financing from other deferred silent second source, and/or require a higher down-payment to reduce PITI to 30%

D. Upon receipt of Primary Lender documentation, City will 1) verify continued applicant eligibility, 2) verify housing unit eligibility, 3) perform required underwriting and 4) determine amount of assistance to be provided, all consistent with these guidelines.

61 AGENDA ITEM NO. 6.

E. This review will determine Applicant’s approval or denial. City provides written notification to Applicant of approval or denial, with reason. If denied, a copy of the Program’s appeal procedures is also provided to Applicant. If/when Primary Lender, and Program Loan requirements are met, Program funds are deposited into escrow, with required closing instructions and loan documents.

F. Program Loan Documents – The following documents will be prepared by the City, tendered into escrow, and executed to se cure the Program Loan: 1) Clear Escrow Instructions, 2) Promissory Note, 3) Loan Agreement, 4) Deed of Trust, 5) Request for copy of Notice of Default or Sale, 6), and 7) Statutory lending notices (Truth In Lending (TIL), etc.) into escrow for signing and recording with the County of Fresno Recorder’s office, as applicable. The Promissory Loan will be secured by a Deed of Trust to be recorded against the property, or City will obtain leasehold interest as applicable.

G. At the time of escrow closing, the City shall be named as an additional loss payee on fire, flood (if required), and extended coverage insurance for the length of the loan and in an amount sufficient to cover all encumbrances or full replacement cost of the housing unit. A policy of Title Insurance naming the City as insured is also required.

H. City will review the Settlement Statement to ensure no unallowable fees were charged to the homebuyer, and to ensure the borrower did not receive any unallowable cash back.

V. APPLICANT ELIGIBILITY
The City w ill confirm applicant eligibility , by verifying income qualification and homebuyer/household eligibility, when the application/applicant reaches the top of the waiting list. NOTE: this review does not include any underwriting or loan approval.

A. Verifying Income Qualification - To be eligible to participate in the Program, gross household annual income must not exceed eighty percent (80%) of the area median income (AMI) for Fre sno County for the year in which the loan is made, which is adjusted for household size and reported in the most current income guidelines published by HCD.

1. Income Documentation
a. Income will be determined by examining source documents evidencing gross income. Third -party verification of employment forms sent to employers is the preferable method to determine income. Other source documents will be used to assist in income determination (i.e. tax returns, copies of wage receipts, subsidy checks, and bank statements). When collecting income verification documentation, City will consider any known or upcoming changes. b. If third-party verification of employment/income isn’t available, other types of documentation will be used, such as pay stubs, tax returns and/or three months of bank statements.
62 AGENDA ITEM NO. 6.

c. Undocumented income or “stated income” will not be utilized but will be investigated and documented when possible.
d. All documentation shall be dated within six months prior to funding/project approval and kept in the applicant file and held in strict confidence. If the applicant was previously qualified for the program and more than 6 months have lapsed, they must be re - qualified.

2. The following terms are key to understanding the requirements for calculating gross income.
• Gross amount. The amount earned before any deductions have been taken.
• Projected to be received. Projected earnings rather than past earnings will be used when estimating annual income for income -eligibility purposes.
• Household. All persons in the residence are considered household members for the purpose of income eligibility. Household members are not restricted to immediate family.
• Household income. The applicant’s income combined with the income of all household members, related or non-related, aged 18 and older. • Income inclusions and exclusions . Detailed guidance pertaining to what types of incomes must be included or excluded when calculating gross annual income can be f ound in Attachment D , as identified in Part 5, Appendix B Annual Income Inclusions and Exclusions, as stated in the HUD Technical Guide for Determining Income and Allowances. The information can also be found at:
https://www.hcd.ca.gov/grants-funding/income-limits/income- calculation-and-determination-guide.shtml. The applicant’s file will be documented for any exceptions or exclusions from th e gross income calculation.

3. Calculating Gross Income - Gross Income means all anticipated eligible income of a person or household for the 12 -month period following the date of determination of income. City will complete the Gross Income Worksheet (Attachment E) , using the guidelines below, to determine applicant’s eligibility. The City will compare this annual gross income to the income the Primary Lender used when qualifying the household. Note that the Primary Lender is usually underwriting to FHA or co nventional guidelines and may not calculate the household income or assets in the same way as required by the Program.
a. Income qualification for self -employed persons is based on prior year income tax returns. Net income plus depreciation from the operation of a business or profession will be used. Any withdrawal of cash or assets from the operation of a business will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the family. Incom e 63 AGENDA ITEM NO. 6.

averaging is allowed only when the borrowers are seasonal employees with fluctuating incomes.
b. For a seasonal worker, the City will determine the flow of pay and relate it to the paystub’s year -to-date (YTD) figure. The YTD may only cover either the period of time when the season is strong and the figure is high, or during the off-season period when the figure is low – this will be taken into consideration, and income will be adjusted to anticipate earnings for the next 12 months. c. Per diem income is not co unted, as it is considered a reimbursement to the employee for expenses, he/she had to pay out of pocket to perform work for the employer.
d. City is to ascertain the basis on which employees are paid (hourly, weekly, or monthly, with or without overtime or b onuses or if on commission, or seasonal work). An employee who gets paid “twice a month” may actually be paid twice a month (24 times a year) or every two weeks (26 times a year).
e. It is important to clarify whether overtime is sporadic or a predictable component of an employee’s income.
f. An annual salary is counted as annual income regardless of the payment schedule. For example, if a teacher’s annual salary is $30,000, this is the annual income regardless if the teacher is paid over a 9- or 12- month period.
g. Gross income from all sources must be used, including:
• Overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services (before any payroll
deductions).
• If an upcoming raise is shown on the Verification o f Employment, it must be calculated as current income.
• Wages from a second job.
• The regular amount of periodic payments received from Social Security, Supplemental Security Income (SSI), annuities, insurance policies, retirement funds, pensions, disabi lity or death benefits, and other similar types of periodic receipts.

These amounts should not be grossed up.
• Payments in lieu of earnings, such as unemployment and disability compensation, worker’s compensation and severance pay.
• Periodic and determi nable allowances, such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling.
64 AGENDA ITEM NO. 6.

4. Treatment of Assets - An asset is a cash or non -cash item that can be converted to cash (i.e. checking and savings and money market accounts, stocks, bonds, and other forms of capital investments), and recognized as part of annual income.
a. When a household has household assets in excess of $5,000, gross income will include the greater of:
• Actual amount of income, if any, derived from all the household assets, or
• HUD Passbook rate of the value of all such assets.

b. If the assets are less than $5,000 no income is counted from assets.

If the assets are $5,000 or greater, count the income from all of the assets.
c. Note: it is the income earned from the assets that is counted – e.g. interest on a savings account – not the asset value.
d. If there is no regular income from assets, the income is imputed by using the HUD Passbook rate.
e. CalHome does not have a requi rement to spend down the borrower’s assets to qualify for a loan and the program encourages a homeowner to retain adequate emergency funds (3 -6 months of expenses). However, it is expected that the borrower invests their funds first and only rely on the CalHome loan as alternate financing. f. For checking accounts, City will use the average 3-month balance. g. Retirement accounts are not counted as assets for CalHome Income verification if they are not accessible to the applicant without retiring or terminating employment.
h. The value of equity in real property, value of gems, art collections, etc. is not to be c onsidered in the asset base because the value fluctuates until sold. However, income from the property must be separately considered.
i. The value of necessary items such as furniture and automobiles shall be excluded.
j. City will utilize Attachment F – Part 5, Annual Income Asset Inclusions and Exclusions, as stated in the HUD Technical Guide for Determining Income and Allowances, to identify what types of assets must be included or excluded when calculating gross annual income. The guidance can also be found at:
https://www.hcd.ca.gov/grants-funding/income-limits/income- calculation-and-determination-guide.shtml
k. The applicant’s file will be docu mented for any exceptions or exclusions from the asset base.
65 AGENDA ITEM NO. 6.

B. Homebuyer/Household Eligibility

1. For CDBG, an eligible homebuyer means an individual or individuals or an individual and his or her spouse who meets the income eligibility requirements and is/are not currently on title to real property. Persons may be on title of a manufactured home unit, who are planning to sell the unit as part of buying a home located on real property. Documentation of homebuyer status will be required for all homebuyers. CDBG -funded programs may assist eligible homebuyers who are not “first -time” homebuyers.

2. HOME and CalHome-funded Programs are required to use the following definition of an eligible homebuyer, which is a “first-time homebuyer” from Title 25 California Code of Regulations, Chapter 7, Sub-Chapter 9, Section 7716(m):

3. First-time homebuyer means an individual or individuals , or an individual and his or her spouse, who have not owned a home during the three-year period before the purchase of a home with subsidy assistance, except that the following individual or individuals may not be excluded from consideration as a first-time homebuyer under this definition:
a. a displaced homemaker who, while a homemaker, owned a home with his or her spouse or resided in a home owned by the spouse.

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

4. Borrower(s) must intend to occupy the home as a principal place of residence.

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VI. HOMEBUYER COSTS
A. Eligible households must document that they have the funds necessary for down payment and closing costs as required by the Primary Lender and the City. The Program’s down payment requirement (below) is in place even if the Primary Lender has a lower down p ayment requirement. If the Primary Lender has a higher down payment requirement, there is no additional down payment requirement required by the Program.

B. Homebuyer must contribute a minimum down payment of one percent (1%) of the purchase price, but may need to contribute additional downpayment funds to close the financial gap and make the primary loan and/or City loan feasible.

C. City will not provide a Program Loan that is greater than the amount of the primary mortgage. The City subsidy will write down the cost of the primary lender’s loan so that the housing costs are within approximately 25 to 30% of the gross household income, and housing cost is affordable to the applicant, based on the requirements found in these Guidelines . The City, at its sole discretion, will consider exceptions to the housing cost percentage, on a case by case basis, up to a maximum housing cost of 38%, contingent on the back end ratio NOT exceeding 41%.

D. The following housing costs will be used in dete rmining Housing Expenses and affordability:

1. Principal and Interest on the primary mortgage loan including any rehabilitation loans.

2. Mortgage Insurance: Depending on what type of first lien and the loan-to- value of the first lien, there may be mortgage insu rance and the monthly obligation must be included in the total housing expense.

3. Property Insurance: The monthly obligation for property insurance is required on the property in the form of fire and hazard (depending on location, flood and/or earthquake insurance may also be required) and must be included in the total housing expense.

4. Property Taxes and Assessments: The monthly obligation for any property taxes and assessments such as Mello Roos must be considered.

Preliminary Title Reports sho uld be reviewed for indications of improvement districts, bonded indebtedness, or special assessment districts.

VII. ELIGIBLE HOUSING UNITS
To be eligible, the proposed housing unit shall 1) be within an eligible area, 2) meet all eligibility criteria before fu nding, and 3) comply with all Lead Hazard requirements, and a completed Lead Compliance Document Checklist (Attachment G) placed in each purchaser’s file.

67 AGENDA ITEM NO. 6.

A. Housing units to be purchased must be located within the eligible area. The eligible area is described as follows: “Within the incorporated City of Clovis.” B. Housing unit types eligible for the homebuyer Program are new or previously owned single -family residences, mobile homes and condominiums, that are ready for occupancy, with the exception of a housin g unit acquired by an acquisition/rehabilitation loan such as a HUD FHA 203(k) loan or the CalHome funded acquisition/rehabilitation loan. CalHome allows mortgage assistance for homes acquired by a loan such as a HUD FHA 203(k) loan . Paragraph I below outlines procedures for processing a mortgage assistance loan with a HUD FHA 203(k) loan, and/or, mortgage assistance with rehabilitation funding as may be managed through a non-profit housing agency.

C. Eligible homes will be those that are currently owner -occupied or have been vacant for three months prior to the acceptance of a contract to purchase, except when the Program Loan is CalHome funded . CalHome funds can be used to purchase tenant-occupied homes if the purchase contract requires property to be vacated prior to the close of escrow. Tenant relocation is not an eligible use of CalHome funds. NOTE: It is not anticipated that the implementation of the Program will result in the displacement of any persons, households, or families.

D. HOME does not allow manufactured homes , unless it is on a permanent foundation system.

E. All housing units must be in compliance with State and local codes and ordinances.

F. Housing units located within a 100 -year flood zone will be required to provide proof of flood insurance with an endorsement naming the City of Clovis as loss payee in order to close escrow.

G. Housing must be “modest”, having no more than three bedrooms, two bathrooms, and a two-car garage. Larger homes are acceptable if necessary for the following reasons:
• The family size necessitates additional bedroom(s); or • A reasonable accommodation is necessary due to the family’s disability (e.g. an extra bedroom for an aide)
Exceptions for these reasons must be approved by the Loan Committee and must be documented for monitoring purposes.

H. Housing Unit Conditions

1. Construction Inspection and Determining N eed for Repair s – Once the participating homebuyer has executed a purchase agreement for a housing unit, and prior to a commitment of Program funds, the following steps must be taken for the housing unit to be eligible for purchase under the Program:
a. When the City’s Program utilizes Federal funds and if the housing unit was constructed prior to 1978 then the lead -based paint 68 AGENDA ITEM NO. 6.

requirements of Paragraph K below will apply.
b. The City, a certified housing inspector, or a City representative will walk through the housing unit, determine if it is structurally sound, and identify any code related and health and safety deficiencies that need to be corrected. A list of code related repair items will be given to the homebuyers and their Realtor to be negotiated with the seller.

Only new construction and homes built within the previous 12 months and not previously occupied are not subject to a home inspection.
c. Upon completion of all work required by the City of Clovis, a final inspection will be conducted prior to close of escrow. The inspector will sign off on all required construction work assuring that each housing unit receiving Program assistance is in compliance with local codes and health and safety requirements at the time of purchase and prior to occupancy.

I. For eligible housing units needing repairs, housing units acquired by an acquisition/rehabilitation loan such as a HUD FHA 203(k) loan, the CalHome funded acquisition/rehabilitation loan, and/or mortgage assistance with rehabilitation funding as may be managed through a non-profit housing agency, the following steps will be taken:

1. Borrower, finds and makes offer for a home that is in need repairs, utilizing the guidelines and requirements as set forth by the ir 203(k) loan FHA approved Primary Lender , or the non -profit housing agency facilitating/funding the repairs . Borrower and Lender determines if the repairs would require a 203(k) Standard Loan (repairs over $35,000), or a 203(k) Limited Loan (repairs under $35,000).

2. Borrower/Lender submits application package to City for review for program eligibility based on the guidelines contained herein.

3. For the 203(k) Standard Loan , Lender/Borrower will be required to work with a 203(k) Consultant professional, certified by HUD, to ensure that all FHA minimum standards are met during the loan process, including inspecting the property, completing work write -ups and estimates , and performing draw request inspections. City will work with the 203(k) Consultant to review Scope of Wo rk, inspect home, and approve construction draws. City may choose to rely on the 203(k) Consultant professional’s work during the construction process, as an alternative to performing the construction inspection and management internally.

4. For the 203(k) Limited Loan, the Borrower, along with City staff/representative inspects home, and develops Scope of Work, prioritizing repair of health and safety violations. City representative will oversee the rehabilitation portion of the project utili zing the City’s Owner- Occupied Home Rehabilitation Guidelines, as closely as possible, as it pertains to: a) scope writing, b) bidding, c) construction inspection and d) construction closeout.
69 AGENDA ITEM NO. 6.

5. Primary lenders typically will require a hard bid, an after -rehabilitation appraisal and underwriting to issue loan approval and documents. City will also review, process and approve the application for eligibility and underwriting based on the guidelines contained herein.

6. If the loan is approved, the Primary lender a nd City will deposit detailed escrow instructions to title (particularly in regards to disbursements) and deposit loan funds in an escrow account, which will disburse proceeds for the property purchase and hold the money for repairs.

7. For the 203(k) Standar d Loan, the 203(k) Consultant professional, and City as applicable, will approve disbursements, at their sole discretion as the work progresses, or is completed. Once repairs are completed, inspected and accepted, and final payment has been made, escrow ca n be closed.

8. For the 203(k) Limited Loan, typically 50% of the repair costs are provided to the contractor up front, and the balance is paid to the contractor when repairs are completed and inspected/accepted, at which time escrow is closed.

J. Per Section 8208 of the State HOME regulations, no additional HOME assistance, including rehabilitation funds, may be provided during the period starting one year following the filing of the Project Completion Report through the end of the Affordability Period.

The HOME Affordability Period is as follows (amount does not include Activity Delivery Costs paid to the State Recipient by HCD):

Amount of HOME Assistance Period of Affordability in Years Under $15,000 5 years
$15,000 to $40,000 10 years
Over $40,000 15 years
K. Lead-Based Paint Hazards: All housing units built prior to 1978 for which HOME, CDBG and/or CalHome funding is anticipated are subject to the requirements of this section. Such homes must undergo a visual assessment by a person who has taken HUD’s online Visual Assessment course. Deteriorated paint must be stabilized using work safe methods. Clearance must be obtained after paint stabilization by a DHS certified LBP Risk Assessor/Inspector. HOME and CDBG general administrative and activity delivery funds may be used to pay for lea d- based paint visual assessments, and if lead mitigation and clearance costs are incurred, these programs may incorporate the costs into the calculation of Program assistance. For the CalHome Program, lead -based paint hazard reduction/abatement costs are eligible uses of funds.

The following requirements must be met:

1. Notification: a) Prior to homebuyer’s obligation to purchase a pre -1978 home, the Buyer will be given the most recent copy of and asked to read the EPA pamphlet “ Protect Your Family From Lead in Your Home” (EPA 70 AGENDA ITEM NO. 6.

747-K-94-001). A signed receipt of the pamphlet will be kept in the City’s homebuyer file; b) A notice to residents is required following a risk assessment/inspection using form DHS 8552, which is provided by the DHS-certified Risk Assessor/Inspector; c) a notice to residents is required following lead-based paint mitigation work using Visual Assessment and Lead-based Paint Notice of Presumption and Hazard Reduction form, LBP – 1 (Attachment H).

2. Disclosure: Prior to the homebuyer’s obligation to purchase a pre -1978 housing unit, the HUD disclosure (Attachment B), “Seller’s Lead -based Paint Disclosure” notice must be provided by the seller to the homebuyer.

3. Inspections: The Inspector shall conduct a “Visual Assessment” of all the dwelling unit’s painted surfaces in order to identify deteriorated paint. All deteriorated paint will be stabilized in accordance with CFR 35.1330 (a) and (b); and a Clearance shall be made in accordance with CFR 35.1340.

4. Mitigation: If stabilization is required, the contractor performing the mitigation work must use appropriately trained workers. Prior to the contractor starting mitigation work the City shall obtain copies of the contractor’s and workers’ appropriate proof of LBP training, as applicable to the job in order to assure that only qualified contractors and workers are allowed to perform the mitigation.

VIII. PROPER NOTIFICATION AND DISCLOSURES TO SELLER
A. Prior to making an offer to purchase an eligible housing unit, homebuyer shall provide seller with a disclosure containing the following provisions:

1. Homebuyer has no power of eminent domain and, therefore, will not acquire the property if negotiations fail to result in an amicable agreement; and

2. Homebuyer’s offer is an estimate of the fair market value of the housing unit, to be finally determined by a state-licensed appraiser;

3. The housing unit will be subject to inspection. The housing unit must comply with local codes at the time of construction and local health and safety standards, except as may be identified in these guidelines.

4. All housing units built prior to January 1, 1978 will require a lead paint disclosure to be signed by both the homebuyer and seller (Attachment E);

5. Since the purchase would be voluntary, the seller would not be eligible for relocation payments or other relocation assistance;

6. The seller understands that the housing unit must be either: currently owner-occupied, newly constructed , or vacant for three months prior to submission of the purchase offer, except as may be identified in these guidelines.

7. If the seller is not provided with a statement of the above six provisions prior to the purchase offer, the seller may withdraw from th e agreement after this information is provided.
71 AGENDA ITEM NO. 6.

B. Upon selection of a housing unit, a qualified seller and homebuyer will be given the necessary disclosures for the Program. The homebuyer must have read and signed all Program disclosure forms. Any and all p roperty disclosures must be reviewed and signed by the homebuyer and seller.

C. All owners who wish to sell their housing units must receive an Acquisition Notice (Attachment C) and the accompanied acknowledgement executed, prior to submission of the homebuyer’s original offer. This notice will be included in the contract and must be signed by all owners on title. The disclosure must contain the items listed in IV.A.1-7 above (required for federally-funded programs).

IX. INITIAL PURCHASE PRICE LIMITS – MAXIMUM SALES PRICE A. For CalHome-funded loans, the maximum allowable initial purchase price (maximum sales price) cannot exceed 100% of the current median sales of a single-family home.

B. HOME and CDBG -funded Programs the value cannot exceed the Maximum Purchase Price/After-Rehabilitation Value Limits as established by HUD.

X. MAXIMUM PROGRAM LOAN
A. For HOME, the amount of Program assistance provided to a homebuyer for the purchase of a home shall not exceed the maximum HOME subsidy limit for Fresno County, per bedroom count, as found in the HCD website , and shall never exceed the amount of the primary mortgage . Any approved “grant” amount for lead-based paint evaluation and reduction activities or for relocation assistance shall be included in this amount, as shall Activity Delivery Costs.

B. For CalHome, the amount of Program assistance provided to a homebuyer for the purchase of a home shall not exceed $100,000. This total assistance amount includes both the allowance for activity delivery fee as well as the amount of the Promissory Note. The actual loan amount is the total assistance, less the ADF fees. The assistance amount shall not exceed the amount published in the current CalHome NOFA, or when considered with other available financing and assistance, the minimum amount necessary to allow them to become homeowners (“the Gap”) while keeping their housing costs affordable, whichever is lower.

If a CalHome loan does not close the gap, it can be layered with other subsidies such as HOME, CDBG, or other funding sources. Reuse account funds can also be used to increase the CalHome loan amount, except in the case where the property being purchased has an Accessory Dwelli ng Unit/Junior Accessory Dwelling Unit (ADU/JADU) attached. If layering funds, the CalHome loan must stand alone with a separate Note and Deed of Trust. If adding Reuse account funds, it will be included in the CalHome Note and Deed of Trust, and the total s are to be noted on the borrower summary form.

72 AGENDA ITEM NO. 6.

XI. HOMEBUYER EDUCATION REQUIREMENTS
Buying a home can be one of the most confusing and complicated transactions anyone can make. Providing the future homebuyer with informative homebuyer education training, ca n bring success to the City, the Program and most importantly, the homebuyer. It has been documented that first -time homebuyers that have had homebuyer education have an easier time of handling problems that occur with homeownership.

All Program partici pants are required to attend a City -approved homebuyer education class.

The training is provided at no cost to the home buyer, but the cost is a part of the Activity Delivery Fee (see Section XV, Paragraph E). Homebuyer Education curriculum shall be pre - approved by HCD (for CalHome loans) and at a minimum, shall include the following topics:
• Preparing for Homeownership
• Financing and credit analysis
• Loan closing process
• Homebuyer and Homeownership responsibilities
• Home maintenance
• Impacts of refinancing
• Loan servicing
Methods of homebuyer counseling and education may include, but are not limited to: one -on- one counseling between homebuyer, counselor and family/individual and/or group workshops and informational sessions. Tools of instruction may include fliers, brochures, power point presentations, worksheets, etc.

A certificate of successful completion of Homebuyer Education shall be issued to each prospective Homeowner and a copy submitted to HCD/Funding Agency as required.

Certificates should be dated within six months of closing, and at no time be more than one year.

XII. PRIMARY LOAN REQUIREMENTS
Prior to obtaining a loan from the City, a homebuyer must provide evidence of financing for the maximum amount the Primary Lender is willing to loan (the “primary loan”).

A. Primary Loan Processing
All homebuyers or their representatives will be sent an eligibility packet with all the necessary forms, disclosures, information, and application. They should submit a complete application packet with all the City’s Program loan documents executed, as well as all the information from the Primary Lender.

The City will require Primary Lender to submit:

1. property sales contract with proper seller notification;

2. mortgage application with good faith estimate s and first mortgage disclosures;

3. full mortgage credit report and rent verification;
73 AGENDA ITEM NO. 6.

4. current third-party income verifications and verifications of assets;

5. homeownership education certificate, if applicable; and

6. signed underwriting transmittal summary and final signed loan application, both from primary lender.

Staff will work with local lenders to ensure qualified participants receive only the benefit from the City’s Program needed to purchase the housing unit and that leveraged funds will be used when possible.

B. Documents From Primary Lender
After initial review of the qualified homebuyer's application packet, the City will request any additional documents needed. Documents may be emailed, but originals shall be received through the mail before Program funds are committed to escrow. Based on receipt and review of the final documents, the City will do an income certification (using most recent HCD program’s guidance on income calculation a nd determination), and homebuyer certification (review of credit report and income taxes). Documentation of affordability will then be verified and subsidy requirement determined.

C. Disclosure of Program and Loan Information to Homebuyers The Program’s appli cation and disclosure forms will contain a summary of the loan qualifications of the borrower with and without Program assistance. Housing ratios with and without Program assistance are also outlined in these guidelines.

Information on the Program’s appli cation will be documented with third party verifications in the file. For example, the sales contact will provide the final purchase price and outline how much of the closing costs are to be paid by the seller, etc. The appraisal, termite and title repor t will provide information to substantiate the information in the sales contract and guide the construction inspection. The Program loan application will provide current debt and housing information and will be documented by the credit report and income/a sset verifications. The Primary Lender’s approval letter and estimated closing cost statement should reflect all the information in the loan package and show any contingencies of loan funding. Reviewing the Primary Lender’s loan underwriting documentation will provide basic information about the qualification of the applicant and substantiate the affordability provided by the Program loan. By reviewing and crosschecking all the Primary Lender information, the final Program loan amount approved will fall within the affordability parameters of the Program.

D. Primary Loan Qualifying Ratios
The front-end (housing) debt-to-income ratio shall be between 25% and 30% and is the percentage of a borrower’s gross monthly income (before deductions) that would cover the c ost of the loan principal and interest payment, property taxes, property insurance, mortgage insurance, and HOA dues, if any. The City will use the “front-end ratio” of housing-expense-to-income to determine if the amount of the proposed primary loan is ac ceptable and, ultimately compute the Program 74 AGENDA ITEM NO. 6.

subsidy amount required, bridging the gap between the acquisition cost (purchase price plus closing costs) less down payment, and the amount of the primary loan. The City, at its sole discretion, will consider e xceptions to the housing cost percentage, on a case by case basis, up to a maximum housing cost of 38%, contingent on the back end ratio NOT exceeding 41%.

The back-end (total) debt -to-income ratio shall be no greater than 41% and is the percentage of a borrower’s gross monthly income that would cover the cost of housing as described in the paragraph above, plus any other monthly debt payments like car or personal loans and credit card debt, as well as child support and alimony payments.

The City could allow the ratios to exceed the normal range where significant compensating factors exist. The underwriter judges the overall merits of the loan application and will determine what compensating factors apply and the extent to which ratios may be exceeded. This decision will be documented in the file.

E. Primary Loan Interest Rate and Terms

1. The primary loan must have a fixed interest rate that does not exceed the current market rate, as established by an index identified in the most recent NOFA.

2. The primary loan shall be fully amortized and have a term “all due and payable” in no fewer than 30 years , except when United States Department of Agriculture Rural Housing Service (USDA -RHS) 502 mortgage loans are in first lien position.

3. A permanent loan buy down is permitted as long as it does not cost more than 1% of the loan amount.

4. Cash out of escrow to borrowers is limited to the amount deposited into escrow by the borrowers and not needed for any lender-required minimum down-payment.
• Excess cash, from the Program loan, shall be paid to the Reuse Account and credited as a principal reduction to the homebuyer’s loan.

There must be a clear accounting of the source of credits.

5. Seller credits in a reasonable amount which create cash-back to the buyer are acceptable. However, credits from lenders or agents which create cash-back to the buyer are not.
• When a lender or agent credit creates a cash-back situation, the cash- back amount should be used as a principal reduction on the CalHome loan and not released to the buyer.

6. No temporary interest rate buy-downs are permitted.

7. Balloon payment and/or graduated payment loans are not allowed. 75 AGENDA ITEM NO. 6.

8. Loans shall not include provisions for negative amortization, principal increases, or deferred interest.

9. Adjustable Rate Loans (ARM’s) are not allowed.

XIII. PROGRAM LOAN TERMS
A. All Program assistance to individual households shall be made in the form of deferred payment (interest and principal) loan (DPL).

B. The Program loan’s term shall be for thirty (30) years, except when the primary loan is through USDA, Rural Housing Service 502 mortgage loans and it is in the first position, then the term of the Program loan shall be the term of the 502 mortgage.

C. The Program loan’s interest rate shall be:
• 3% if due or paid in first 5 years of the note
• 2% if due or paid during years 6-10 of the note
• 1% if due or paid during years 11-15 of the note
• 0% if due or paid during years 16-30 of the note
D. The interest rate shall be calculated as simple interest on an annual basis.

E. Combined Loan -To-Value Ratio – The loan-to-value ratio for a Program loan, when combined with all other indebtedness to be secured by the property, shall not exceed 100 percent of the sales price plus a maximum of up to 5 percent of the sales price to cover actual closing costs.

F. Loan principal shall not be forgiven, and the loan period cannot be extended, except for loans that are resubordinated when a rate and term refinance is approved, per Attachment D.

G. The Program loan shall be recorded in the first lien position following all “performing” loans (i.e. primary mor tgage loan) and subject only to liens, encumbrances and other matters of record reviewed and approved by the City.

H. Loans are not assumable, except as noted below in Section XXI.

I. Loans shall be repayable upon sale or transfer of the property, when the property ceases to be owner-occupied, or upon the CalHome program Loan maturity date (see Program Loan Repayment section below).

J. There can only be one CalHome Program lien against a property at any one time.

K. All persons who will be on title to the property will be included as Borrowers on the CalHome program Promissory Note.

76 AGENDA ITEM NO. 6.

XIV. PROGRAM LOAN UNDERWRITING REQUIREMENTS, REVIEW AND APPROVAL The City will work with the Applicant to ensure the Applicant submits (or Escrow Officer/Primary Lender submits on their behalf) a completed loan request package. The City will review the loan request package, and analyze it based on the underwriting requirements found in this Section.

A. Credit Worthiness – The City will obtain a credit repor t (or obtain a current copy from the primary lender) to determine creditworthiness. A credit report indicates the borrower’s creditworthiness with previous mortgages, shows undisclosed debts, revolving accounts, installment accounts, and any judgments, garnishments, liens and/or bankruptcies that are public records. The report will show information on the status of accounts. The City will compare the credit report to the information on the report to that found in the application. If there are discrepancies between the documents, the City will determine what is factual and will have the applicant explain any discrepancies. The following will also be taken into consideration when reviewing the credit report:

1. Any liens, judgments, bankruptcies, major defaults, credit score s lower than 600, collection accounts and slow pays on the credit report could indicate serious problems and should be explained by the borrower.

2. Particular attention will be paid to the borrower’s ability and willingness to repay the mortgage debt, as we ll as attention to applicant’s timely payments on their mortgage loan.

3. When analyzing the borrower’s credit record, it is the overall pattern of credit behavior that will be reviewed rather than isolated occurrences of unsatisfactory or slow payments.

4. For borrowers with little or no credit history, one may be developed with the use of alternative methods, such as utility payment records (at least 3 months’ worth of most recent statements showing no late or missing payments), rental payments (rental ratin g from the landlord or rental agency, canceled checks or rent receipts covering the most recent 12 month period), automobile insurance payments (showing current and no late or missing payments) or other personal loans (canceled checks and a letter stating that the payments have been made on time).

5. The City will document review of the credit report, as well as notate any findings, in the loan file.

B. Appraisal Review – City will obtain appraisal from Primary Lender, or order one, and ensure the following requirements are met:

1. Appraisal to be prepared by a State -licensed, residential property appraiser;

2. The appraisal will use the sale of comparable properties approach to determining value;
77 AGENDA ITEM NO. 6.

3. The property that is being underwritten will be compared to similar properties sold within the last six months in the surrounding neighborhood; and

4. Maximum appraised home values at time of purchase or upon completion of acquisition/rehabilitation work shall not exceed the appraised value limit established by HCD and published in the CalHome NOFA.

C. The City may approve the loan request with or without conditions. If approved, a final closing date for escrow is set and Program funds are accessed for the homebuyer, contingent on the application of the additional program requirements and escrow processing, as identified below.

XV. ADDITIONAL PROGRAM REQUIREMENTS
A. Non-Recurring C losing Costs – Non-recurring costs such as credit report, escrow, closing and recording fees, and title report and title insurance, title updates and/or related costs may be included in the Program loan, in an amount not to exceed 5% of the purchase price. CalHome funds cannot be used to pay loan closing costs on other loans. No loan fees are to be charged to the homebuyer for the CalHome loan.

B. Impound Account – All households will be required to have impound accounts for the payment of taxes and insurance to ensure they remain current.

C. Closing Costs and Other Charges - Eligible costs include non -recurring closing costs for the loan paid to third party providers for such items as title searches, credit reports, notary fees, recording fees, escrow fees, or appraisals. The homeowner does not pay any costs for the CalHome loan such as refundable application fees, loan processing or document fees. These costs are incurred by the City and reimbursed by CalHome to the City as Activity Delivery Fee . Other costs s uch as termite inspections (when termite work is done), haul away, disposal bins, architect fees, permit fees, should be included in the loan.

D. Title Policy – The escrow/title company shall review the escrow instructions provided by the City and shall issue a California Land Title Association (CLTA) and the American Land Title Association (ALTA) after closing. The CLTA policy is issued to the homebuyer and protects them against failure of title based on public records and against such unrecorded risks as forgery of a deed. The ALTA is issued to each lender providing additional coverage for the physical aspects of the property as well as the homebuyer’s title failure. These aspects include anything which can be determined by only physical inspection, s uch as correct survey lines; encroachments; mechanics liens; mining claims and water rights.

The Program lender instructs the escrow/title company in the escrow instructions as to what may show on the policy; the amount of insurance on the policy (all liens should be covered) and the loss payee (each lender should be listed as a loss payee and receive an original ALTA).

E. Activity Delivery Fee – A CalHome loan-processing activity delivery fee not to exceed $10,000 may be reimbursed in the form of a grant to the City. Activity 78 AGENDA ITEM NO. 6.

Delivery Fees (ADF) are reasonable and necessary costs incurred by the City, and associated with the financing, or development (or both) of activities assisted with CalHome program funds. The Fee is to defray such costs as: homebuyer education classes, which is provided at no cost to the borrower . This amount is not included in the Borrower's Loan amount but reduce s the amount of the Promissory Note. ADF costs cannot be based on salary or administrative costs since the CalHome Program is funded by State bonds.

F. Fire insurance requirements (and flood insurance where applicable) are as follows:

1. City will require borrowers to maintain insurance on the property in an amount at least equal to the replacement value of the improvements; and

2. City must be named as additional loss payee on the policy.

XVI. SUBORDINATE FINANCING
Subordinate loans may be used to cover mortgage subsidy costs that exceed the Program maximum loan amount.
• Homebuyer mortgage assistance loans, when combined, must have a loan-to-value ratio not exceeding 100% of the sales price (or appraised value if lo wer) plus a maximum of up to 5% of the sales price to cover actual non-recurring closing costs. • Fees and/or charges for subordinate financing shall be reasonable loan origination fees for first mortgage financing as determined by the Department to be consi stent with industry standards.
• No financing, junior or senior to the Program loan may have a balloon payment due before the maturity date of the CalHome Program loan.
• All subordinate financing provided shall defer principal and interest payments for the term of the CalHome Program loan.
• The CalHome lien should be the first subsidy/deferred payment loan recorded behind any performing/amortized loans. Exceptions may be made on a case-by-case basis by HCD staff.

XVII. ANTI-DISPLACEMENT POLICY AND RELOCATION ASSISTANCE If tenant-occupied homes are included in the Program and relocation becomes necessary, the activity will be carried out in compliance with City’s relocation plan, which describes how those permanently displaced will be relocated and paid benefits in ac cordance with the following Federal laws.

A. Uniform Relocation Assistance (URA) and Real Property Acquisition Policies Act of 1970

79 AGENDA ITEM NO. 6.

The federal URA and Real Property Acquisition Policies, as amended by the URA Amendments of 1987, contains requirements for ca rrying out real property acquisition or the displacement of a person, regardless of income status, for a project or program for which HUD financial assistance (including CDBG and HOME) is provided. Requirements governing real property acquisition are described in Chapter VIII. The implementing regulations, 49 CFR Part 24, require developers and owners to take certain steps regarding tenants of housing to be acquired, rehabbed or demolished, including tenants who will not be relocated even temporarily.

B. Section104(d) of the Housing and Community Development Act of 1974

Section 104(d) requires each contractor (CHDO or State Recipient), as a condition of receiving assistance under HOME or CDBG, to certify that it is following a residential anti -displacement plan and relocation assistance plan.

Section 104(d) also requires relocation benefits to be provided to low -income persons who are physically displaced or economically displaced as the result of a HOME or CDBG assisted project, and requires the replacement of low-income housing, which is demolished or converted. The implementing regulations for Section 104(d) can be found in 24 CFR Part 570(a).

XVIII. INELIGIBLE TRANSACTIONS AND USES OF PROGRAM FUNDS The following are ineligible transactions and uses of Program funds:

• Refinancing of existing loans.
• Offsite improvements.
• Recurring Loan closing costs.
• Payoff of all or any portion of a Borrower’s consumer debt, liens or judgements, even if required by the primary lender as a condition of loan a pproval, and even if paid through escrow.
• Cash transactions and oral agreements outside of escrow are prohibited. • Any agreements on the side between buyer and seller, buyer and real estate broker or owner and contractor are prohibited. All agreements must be included in the purchase agreement or escrow instructions.
• Relocation costs for tenant-occupied housing units.

XIX. LOAN MONITORING PROCEDURES
City will monitor Borrowers annually to ensure adherence to Program requirements including, but not limited to, the following:

• Owner-occupancy
• Property tax payment
• Hazard insurance coverage
• Good standing on Primary loans
• General upkeep of housing units
80 AGENDA ITEM NO. 6.

XX. PROGRAM LOAN REPAYMENT
A. Payments are voluntary during the deferral period. Borrowers can begin making voluntary payments at any time without penalty . The City will accept loan payments from borrowers prepaying deferred loans, and from borrowers making payments in full upon sale or transfer of the property.

B. All loan payments are payable to the City and are due at loan maturity. Program loan payments will be made to:

City of Clovis
1033 Fifth Street
Clovis, CA 93612
C. The City will be the receiver of loan payments or recaptured funds and will maintain a financial record -keeping system to record payments and file statements on payment status. Payments shall be deposited and accounted for in the City’s Program Income, or Reuse Account, as required by HCD programs (for CalHome loans).

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

XXI. LOAN ACCELERATION
In the event that an owner sells, transfers title, or discontinues residence in the purchased property for any reason, the principal balance is due and payable, except:

A. If the owner of the property dies, and the heir to the property meets income requirements, the First -Time Homebuyer definition, and intends to occupy the home as a principal residence, the heir may be permitted, upon ap proval of the City, to assume the loan at the rate and terms the heir qualifies for under the current participation guidelines. If the property owner dies and the heir does not meet eligibility requirements, the loan is due and payable.

B. If an owner wants to convert the property to a rental unit, or any commercial or non-residential use, the loan is due and payable.

C. The loan will be in default if the borrower fails to maintain required fire or flood insurance or fails to pay property taxes. Additional info rmation in regards to property restrictions in the event of default, can be found in the City’s Loan Servicing Policies and Procedures (Attachment I).

D. In regards to CalHome loans:

1. The following transfers of interest will not require the repayment of the CalHome Program Loan:
a. Transfer to a surviving joint tenant by devise, descent, or operation 81 AGENDA ITEM NO. 6.

of law on the death of a joint tenant;
b. A transfer, in which the transferee is a person who occupies or will occupy the property, which is:
i. A transfer where the spouse becomes an owner of the
property;
ii. A transfer resulting from a decree of dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement by which the spouse becomes an
owner of the property; or
iii. A transfer into an inter vivos trust in which the borrower is and remains the beneficiary and occupant of the property.

2. In general, loans are not assumable.

3. If it is determined by the City that repayment of the CalHome Program loan at the maturity date causes a hardship to the borrower, the City may employ the following two other options. They are:

a. Amending the note and deed of trust to defer repayment of the amount due at loan maturity, that is the original principal and the accrued interest, for up to an addit ional 30 years (at 0% additional interest), this may be offered one time, or;

b. Converting the debt at loan maturity, that is the original principal balance and any accrued interest, to an amortized loan, repayable in 15 years at 0% additional interest.

XXII. DRAW REQUESTS TO HCD
City will make every effort to submit more than one loan with each draw , and only upon loan closing. With each individual draw, City will submit the following to HCD:

A. Completed Mortgage Assistance Draw Request (with contributed Labor Certifications if applicable).

B. Completed Mortgage Assistance Borrower Summary form for each individual CalHome loan, with the following items attached to each in the following order:

1. Copy of the executed CalHome Promissory Note.

2. Copy of Deed of Trust.

3. Closing Disclosure.

4. Certified Settlement Statement (Buyer and Seller).

5. Activity Delivery Fee Reimbursement form (If Applicable).

6. Copy of the buyer’s Homebuyer Education Course Completion Certificate

82 AGENDA ITEM NO. 6.

XXIII. CONFLICT OF INTEREST
To the extent consistent with Federal and State conflict of interest laws as they apply to local government officials, employees and agents, the following rules shall apply regarding eligibility for this program. No member of the governing body of the City nor o ther official, employee, or agent of the City government who exercises policy or decision-making authority in connection with the planning and implementation of the Program shall directly or indirectly be eligible for this Program. This ineligibility shall continue for one year after an individual’s relationship with the City ends.

When the Program Loan contains Federal funds, the applicable Conflict of Interest requirements of 24 CFR Section 570.611 shall be followed for CDBG assistance. Section

92.356 of the HOME Final Rule shall be followed for HOME assistance, as follows:
a. Conflicts prohibited. No persons described in paragraph (b) of this section who exercises or has exercised any functions or responsibilities with respect to activities assisted with HOME funds or who are in a position to participate in a decision making process or gain inside information with regard to these activities, may obtain a financial interest or benefit from a HOME -assisted activity, or have a financial interest in any contract, subcontract or agreement with respect to the HOME -assisted activity, or the proceeds from such activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for one year thereafter.

Immediate family ties include (whether by blood, marriage or adoption) the spouse, parent (including stepparent), child (including stepchild), brother, sister (including a stepbrother or stepsister), grandparent, grandchild and in-laws of a covered person. b. Persons covered. The conflict of interest provisions of paragraph (a) of this section apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the participating jurisdiction, State recipient, or subre cipient which are receiving HOME funds.
c. Exceptions: Threshold requirements. Upon the written request of the participating jurisdiction to HCD, HUD may grant an exception to the provisions of paragraph (a) of this section on a case-by-case basis when it determines that the exception will serve to further the purposes of the HOME Investment Partnerships Program and the effective and efficient administration of the participating jurisdiction's program or project. See 24 CFR 92.356(d)(1 -6) for details on the d ocumentation needed in order to submit an exception request to HUD.

A contractor with a vested interest in the property cannot bid on a rehabilitation job , if applicable. Such a contractor may act as owner/builder, subject to standard construction procedures. Owner/builders are reimbursed for materials purchased which are verified by invoice/receipt and used on the job. Reimbursement occurs after the installation is verified by the City to be part of the scope of work. Owner/builders are not reimbursed for labor.

XXIV. PROGRAM COMPLAINT AND APPEAL PROCEDURE
Any applicant denied assistance from the Program has the right to appeal. Complaints concerning the Program should be made in writing and filed with the City. Complaints by 83 AGENDA ITEM NO. 6.

applicants, residents or property owners regarding the City’s Program should be made to the City’s Assistant City Manager, or Director of Community & Economic Development who will investigate the complaint, prepare an analysis and recommendation and will schedule a discussion of the compla int with the Loan Review Committee. If the matter is not resolved to the satisfaction of the person filing the complaint, this person may submit a written appeal addressed to the City’s Loan Review Committee. The Loan Review Committee will be convened within fifteen (15) days from the date the appeal is received unless a longer period of time is requested by the appellant. Within five (5) working days from the date the appeal is heard by Loan Review Committee, the City will mail a written response of the Co mmittee’s decision to the appellant. If the appellant is still not satisfied with the decision, they may appeal in writing to the Clovis City Manager following the same timeline and procedures above. The decision of the City Manager will be final.

XXV. PERFORMANCE REPORTING TO HCD
A. During the term of the CalHome Standard Agreement and, no later than 30 days after the end of each calendar quarter, the City will submit a Quarterly -Annual Report as required by HCD.

B. During the term of the Standard Agreement and, no later than 30 days after June 30th of each year and/or within 30 days of the expiration date of the Standard Agreement, the City shall submit, upon request of the Department, a Quarterly - Annual Report on the form provided by the Department.

C. At any time du ring the term of the Standard Agreement, the Department may perform or cause to be performed a financial audit of any and all phases of the Contractor’s program or homeownership development project. At the Department’s request, the Contractor shall provide , at its own expense, a financial audit prepared by a CPA.

D. Signature, Title and Date: The person submitting the Quarterly Status Report must be specifically authorized to sign this type of document and should provide his/her title, then sign and date the form. This form may not be signed by a staff person unless authorized through resolution.

E. Annual Reporting of the Reuse Account
The annual reporting of the Reuse Account will continue for the length of 20 years, until the expiration date of the City’s CalH ome Program Monitoring Agreement. This report is required annually and is done after the Standard Agreement has expired to report what has specifically taken place in the Reuse Account during the last year.

XXVI. AUDIT/RETENTION AND INSPECTION OF RECORDS
A. City sh all retain any and all records, accounts, documentation, and all other relevant materials pertaining to performance of this Program for a minimum of five (5) years after the expiration of this Agreement for this Program and any and all amendments thereto, unless a longer period of record retention is stipulated.

City shall retain any and all records, accounts, documentation, and all other 84 AGENDA ITEM NO. 6.

relevant materials pertaining to performance of the Program for a minimum of five (5) years after the conclusion or reso lution of any and all audits or litigation relevant to this Program and related Agreement, unless a longer period of record retention is stipulated.

B. At any time during the term of the Program, HCD may perform or cause to be performed, an independent financial audit of any and all phases of the Work. At HCD’s request, the City shall provide, at its own expense, a financial audit prepared by a certified public accountant.

C. City shall adequately document each transaction to permit the determination, through an audit if requested by HCD, of the accuracy of the records and the allowability of the expenditures paid in whole or in part, with Program funds. If the allowability of an expenditure cannot be determined because records or documentation are inadequate, the questionable expenditure shall be disallowed.

The City shall reimburse HCD for the amount of any disallowed expenditures of the City or its agents or subcontractors. Determination by HCD of allowability of any expenditure shall be final.

D. City agrees that HCD, or its delegatee shall have the right to review, obtain, and copy all records pertaining to performance of this Program/Agreement. City agrees to provide HCD or its delegatee with any relevant records, accounts, documentation, and all other relevant materials requested and shall permit HCD or its delegatee access to its premises, upon reasonable notice, during normal business hours for the purpose of interviewing employees and inspecting and copying such records, accounts, documentation, and all other materials relevant to a matter under investigation for the purpose of determining compliance with Gov. Code, section 8546.7, or pursuant to a financial audit under subsection B above. City further agrees to maintain such records for a period of five (5) years after final payment under the Program/Agreement.

XXVII. COMPLIANCE WITH STATE AND FEDERAL LAWS, RULES AND GUIDELINES City agrees at all times to act with respect to the CalHome Program, CalHome activities, and to use the funds committed herein in conformity with all laws applicable to the CalHome Program including those of the State of California, all federal laws, all local rules or ordinances, all Program Requirements, including the CalHome Statutes and Guidelines. City also agrees to comply with all State and Federal laws, rules and regulations that pertain to construction, health and safety, labor, fair employment pra ctices, equal opportunity, and all other matters applicable to the Work.

XXVIII. REUSE ACCOUNT
All repayments of loan principal and any loan interest accrued (collectively “Program Income” or “PI”) will be deposited to a separately maintained CalHome Reuse Accoun t. This is a separate account from the City’s active grant accounts. The City currently maintains a CalHome Reuse Account which includes deposits from all CalHome activities and for all CalHome grants from previously received Program funds. Within the one account the City identifies the grant source of the funds. See Attachment J for the City’s Reuse Account Plan. 85 AGENDA ITEM NO. 6.

XXIX. LOAN SERVICING POLICIES AND PROCEDURES
See Attachment I for the City’s Loan Servicing P olicies and Procedures. While the attached policy outlines a system that can accommodate a crisis that restricts borrower repayment ability, it should in no way be misunderstood: The loan must be repaid. All legal means to ensure the repayment of a delinquent loan as outlined in the Loan Servicing Polici es and Procedures will be pursued.

XXX. AMENDMENTS
Amendments to these guidelines may be made by the City whenever appropriate to improve Program effectiveness and to resolve problems. As part of the amendment adoption process, the City will review the policies of the funding source to ensure continuing compliance with published policies. Minor technical amendments will be made by City staff as the program progresses, to ensure proper administration of the program. Policy amendments will be taken before the City Council for their review and approval. Copies of amendments will be submitted to HCD for review and approval.

86 AGENDA ITEM NO. 6.

ATTACHMENT A

INSTRUCTIONS TO HOMEBUYER

A. Participant works with lender of choice to obtain the primary lender’s pre-qualification letter.

B. After consultation with City regarding approved bedroom and bathroom maximums (always 3 bedrooms and 2 bathrooms unless overcrowding justifies more to be ap proved), participant works with real estate agent to select home. Program disclosures are reviewed with agent for presentation to seller. The HOME Program allows only homes vacant for three months or more prior to the date of the purchase offer, unless the current tenant is purchasing the home or the seller has been the only occupant during those three months.

C. Participant selects home and enters into a purchase contract (contingent upon receiving Program loan approval). Lender provides the City with a copy of:
- real estate sales contract
- residential loan application and credit report
- verified income documentation
- disclosure statement
- proof of personal funds for participation in program
- breakdown of closing costs
- structural pest control clearance
- appraisal with photos and preliminary title report
D. City reviews paperwork to determine program eligibility and financing affordability for participant.

E. City meets with qualified applicant to provide information relative to the program requirements, the lending process, and homeownership responsibilities.

F. City has home inspected to document health & safety and code compliance. Notice of any deficiencies or needed corrections are given to participant's real estate agent, with recommended course of action. Only new construction and homes built within the previous 12 months and not previously occupied are not subject to a home inspection.

G. City staff can request loan approval from City’s Loan Review Committee. Following loan approval, City prepares Deed of Trust, Promissory Note, Request for Notice of Default, Borrower Agreement with the City of Clovis, and Escrow Instructions, and requests check (or wire) and deposits same into escrow.

H. Escrow company furnishes City with proof of documents to be recorded, and any escrow closeout information. After receipt of recorded loan documents, Final escrow Settlement Statement, Insurance Loss Payee Certification and Final Title Insurance Policy, City closes out the loan file.

87 AGENDA ITEM NO. 6.

ATTACHMENT B

SELLERS LEAD-BASED PAINT DISCLOSURE
Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning Statement

Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particul ar risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller’s possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead -based paint hazards is recommended prior to purchase.

Seller’s Disclosure
(a) Presence of lead-based paint and/or lead-based paint hazards (check (i) or (ii) below):
(i) ☐ Known lead -based paint and/or lead -based paint hazards are present in the housing .

Explain:
(ii) ☐ Seller has no knowledge of lead -based paint and/or lead -based paint hazards in the housing.
(b) Records and reports available to the seller (check (i) or (ii) below):
(i) ☐ Seller has provided the purchaser with all available records and reports pertaining to Lead - based paint and/or lead-based paint hazards in the housing (list documents below).

(ii) ☐ Seller has no reports or records pertaining to lead -based paint and/or lead -based paint hazards in the housing.

Purchaser’s Acknowledgment (initial)
(c) Purchaser has received copies of all information listed above. (d) Purchaser has received the pamphlet Protect Your Family from Lead in Your Home. (e) Purchaser has (check (i) or (ii) below):
(i) received a 10-day opportunity (or mutually agreed upon period) to conduct a risk assessment or inspection for the presence of lead-based paint and/or lead-based paint hazards; or
(ii) waived the opportunity to conduct a risk assessment or inspection for the presence of Lead-based paint and/or lead -based paint hazards (NOT PERMISSIBLE FOR HOME AND CDBG).

Agent’s Acknowledgment (initial)
(f) Agent has informed the seller of the seller’s obligations under 42 U.S.C. 4852d and is aware of his/her responsibility to ensure compliance.

Certification of Accuracy
The following parties have reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate.

—————————— —————————— ————————— —————————
Seller Date Purchaser Date

—————————— —————————— ————————— —————————
Seller Date Purchaser Date

—————————— ——————————
Agent Date
88 AGENDA ITEM NO. 6.

ATTACHMENT C

ACQUISITION NOTICE
Disclosure to Seller with Voluntary, Arm's Length Purchase Offer

DECLARATION

This is to inform you that would like to purchase the property, located at , if a satisfactory agreement can be reached. We are prepared to pay $____________ for a clear title to the property under conditions described in the attached proposed contract of sale.

Because Federal funds may be used in the purchase, however, we are required to disclose to you the following information:

1. The sale is voluntary. If you do not wish to sell, the buyer, ___________________, thru the agency, _____________ will not acquire your property. The buyer does not have the power of eminent domain to acquire your property by condemnation (i.e. eminent domain) and the agency/City ________________________________ will not use the power of eminent domain to acquire the property.

2. The estimated fair market value of the property is $__________ and was estimated by _______________________________________, to be finally determined by a professional appraiser prior to close of escrow.

Since the purchase would be a voluntary, arms length, transaction you would not be eligible for relocation payments or other relocation assistance under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), or any othe r law or regulation. Also, as indicated in the contract of sale, this offer is made on the condition that no tenant will be permitted to occupy the property before the sale is completed.

Again, please understand that if you do not wish to sell your property, we will take no further action to acquire it. If you are willing to sell the property under the conditions described in the attached contract of sale, please sign the contract and return it to us at:
_______________________________________________. If you have any questions about this matter, please contact __________________________at ______________________.

Sincerely,

____________________________________
Title

_________________________________ _____________________ Buyer Date

_________________________________ _____________________ Buyer Date

Form continues on next page with Seller’s Acknowledgment

89 AGENDA ITEM NO. 6.

Disclosure to Seller with Voluntary, Arm's Length Purchase Offer (Page 2)

Acknowledgement

As the Seller I/we understand that the will inspect the property for health and safety deficiencies. I/we also understand that public funds may be involved in this transaction and, as such, if the property was built before 1978, a lead-based paint disclosure must be signed by both the buyer and seller, and that a Visual Assessment will be conducted to determine the presence of deteriorated paint.

As the Seller, I/we understand that under the City’s program, the property must be currently owner- occupied, vacant for three months at the time of submission of purchase offer, new (never occupied), or renter purchasing the unit. I/we hereby certify that the property is:

Vacant at least 3 months; Owner-occupied; New; or Being Purchased by Occupant

I/we hereby certify that I have read and understand this “Declaration” and a copy of said Notice was given to me prior to the offer to purchase. If received after presentation of the purchase offer, I/We choose to withdraw or not to withdraw, from the Purchase Agreement.

__________________________________ _______________________ Seller Date

__________________________________ _______________________ Seller Date

90 AGENDA ITEM NO. 6.

Part 5 Inclusions
This table presents the Part 5 income inclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

General Category (Last Modified: January 2005)

1. Income from
wages, salaries,
tips, etc.

The full amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses, and other compensation for personal services.

2. Business Income
The net income from the operation of a business or profession. Exp enditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation of assets used in a business or profession may be deducted, based on straight - line depreciation, as provided in Internal Revenue Service regulations. Any withdrawal of cash or assets from the operation of a business or profession will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested in the opera tion by the family.

3. Interest &
Dividend Income
Interest, dividends, and other net income of any kind from real or personal property. Expenditures for amortization of capital indebtedness shall not be used as deductions in determining net income. An allowance for depreciation is permitted only as authorized in number 2 (above). Any withdrawal of cash or assets from an investment will be included in income, except to the extent the withdrawal is reimbursement of cash or assets invested by the family. Where the family has net family assets in excess of $5,000, annual income shall include the greater of the actual income derived from all net family assets or a percentage of the value of such assets based on the current passbook savings rate, as determined by HUD.

4. Retirement &
Insurance Income
The full amount of periodic amounts received from Social Security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump- sum amount or prospective monthly amounts for the delayed start of a periodic payment (except for certain exclusions, listed in Income Exclusions, number 14).

5. Unemployment &
Disability Income
Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay (except for certain exclusions, listed in Income Exclusions, number 3).

6. Welfare
Assistance
Welfare Assistance. Welfare assistance payments made under the Temporary Assistance for Needy Families (TANF) program are included in annual income:
• Qualify as assistance under the TANF program definition at 45 CFR 260.31; and • Are otherwise excluded from the calculation of annual income per 24 CFR 5.609(c).

If the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, the amount of welfare assistance income to be included as income shall consist of:
• the amount of the allowance or grant exclusive of the amount specifically designated for shelter or utilities; plus:
• the maximum amount that the welfare assistance agency could in fact allow the family for shelter and utilities. If the family welfare assistance is reduced from the standard of need by applying a percentage, the amount calculated under 24 CFR 5.609 shall be the amount resulting from one application of the percentage.

7. Alimony, Child
Support, & Gift
Income
Periodic and determinable allowances, such as alimony and child support payments, and regular contributions or gifts received from organizations or from persons not residing in the dwelling.

8. Armed Forces
Income
All regular pay, special day, and allowances of a member of the Armed Forces (except as provided in number 8 of Income Exclusions).

Part 5 Exclusions
This table presents the Part 5 income exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

General Category (Last Modified: January 2005)

1. Income of
Children Income from employment of children (including foster children) under the age of 18 years.

ATTACHMENT D

Appendix B: Annual Income Inclusions and Exclusions
91 AGENDA ITEM NO. 6.

2. Foster Care
Payments
Payments received for the care of foster children or foster adults (usually persons with disabilities, unrelated to the tenant family, who are unable to live alone).

3. Inheritance and
Insurance Income
Lump-sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains , and settlement for personal or property losses (except for certain exclusions, listed in Income Inclusions, number 5).

4. Medical Expense
Reimbursements
Amounts received by the family that are specifically for, or in reimbursement of, the cost of medical expenses for any family member.

5. Income of Live-in
Aides Income of a live-in aide (as defined in 24 CFR5.403).

6. Income from a
Disabled Member
Certain increase in income of a disabled member of qualified families residing in HOME -assisted housing or receiving HOME tenant-based rental assistance (24 CFR 5.671 (a)).

7. Student Financial
Aid The full amount of student financial assistance paid directly to the student or to the educational institution.

8. "Hostile Fire" Pay The special pay to a family member serving in the Armed Forces who is exposed to hostile fire.

9. Self-Sufficiency
Program Income
a. Amounts received under training programs funded by HUD. b. Amounts received by a person with a disability that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because th ey are set side for use under a Plan to Attain Self-Sufficiency (PASS).
c. Amounts received by a participant in other publicly assisted programs that are specifically for, or in reimbursement of, out-of-pocket expenses incurred (special equipment, clothing, transportation, childcare, etc.) and which are made solely to allow participation in a specific program.
d. Amounts received under a resident service stipend. A resident service stipend is a modest amount (not to exceed $200 per month) received by a resident for performing a service for the PHA or owner, on a part-time basis, that enhances the quality of life in the development. Such services may include, but are not limited to, fire patrol, hall monitoring, lawn maintenance, resident initiatives coordination, and serving s a member of the PHA’s governing board. No resident may receive more than one such stipend during the same period of time. e. Incremental earnings and benefits resulting to any family member from participation in qualifying state or local employment training programs (including training not affiliated with a local government) and training of a family member as resident management staff. Amounts excluded by this provision must be received under employment training programs with clearly defined goals and objectives, and are excluded only for the period during which the family member participates in the employment-training program.

10. Gifts Temporary, nonrecurring, or sporadic income (including gifts).

11. Reparation
Payments
Reparation payments paid by a foreign government pursuant to claims filed under the laws of that government by persons who were persecuted during the Nazi era.

12. Income from
Full-time Students
Earnings in excess of $480 for each full-time student 18 years old or older (excluding the head of household or spouse).

13. Adoption
Assistance
Payments
Adoption assistance payments in excess of $480 per adopted child.

14. Social Security
& SSI Income
Deferred periodic amounts from supplemental security income and social security benefits that are received in a lump sum amount or in prospective monthly amounts.

15. Property Tax
Refunds
Amounts received by the family in the form of refunds or rebates under state or local law for property taxes paid on the dwelling unit.

16. Home Care
Assistance
Amounts paid by a state agency to a family with a member who has a developmental disability and is living at home to offset the cost of services and equipment needed to keep this developmentally disabled family member at home.

17. Other Federal
Exclusions
Amounts specifically excluded by any other Federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under any program to which the exclusions set forth in 24 CFR 5.609(c) apply. A notice will be published in the Federal Register and distributed to housing owners identifying the benefits that qualify for this exclusion.

Updates will be published and distributed when necessar y. The following is a list of income sources that qualify for that exclusion:

The value of the allotment provided to an eligible household under the Food Stamp Act of 1977; Payments to volunteers under the Domestic Volunteer Service Act of 1973 (employment through AmeriCorps, VISTA, Retired Senior Volunteer Program, Foster Grandparents Program, youthful offender incarceration alternatives, senior companions); Payments received under the Alaskan Native Claims Settlement Act; Income derived from the disposition of funds to the Grand River Band of Ottawa Indians; Income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes;
Payments or allowances made under the Department of Health and Human Services’ Low-Income Home Energy Assistance Program.

Payments received under the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721); The first $2,000 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the U.S. Claims Court and the interests of individual Indians in trust or restricted lands, 92 AGENDA ITEM NO. 6.

including the first $2,000 per year of income received by indivi dual Indians from funds derived from interests held in such trust or restricted lands;
Amounts of scholarships funded under Title IV of the Higher Education Act of 1965, including awards under the Federal work-study program or under the Bureau of Indian Affairs student assistance programs;
Payments received from programs funded under Title V of the Older Americans Act of 1985 (Green Thumb, Senior Aides, Older American Community Service Employment Program); Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in the In Re Agent Orange product liability litigation, M.D.L. No. 381 (E.D.N.Y.);
Earned income tax credit refund payments received on or after January 1, 1991, including advanced earned income credit payments;
The value of any child care provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990;
Payments received under programs funded in whole or in part under the Job Training Partnership Act (employment and training programs for Native Americans and migrant and seasonal farm workers, Job Corps, veterans employment programs, state job training programs and career intern programs, AmeriCorps).

Payments by the Indians Claims Commission to the Confederated Trib es and Bands of Yakima Indian Nation or the Apache Tribe of Mescalero Reservation;
Allowances, earnings, and payments to AmeriCorps participants under the National and Community Services Act of 1990;
Any allowance paid under the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida who is the child of a Vietnam veteran;
Any amount of crime victim compensation (under the Victims of Crime Act) received through crime victim assistance (or payment or reimbursement of the cost of such assistance) as determined under the Victims of Crime Act because of the commission of a crime against the applicant under the Victims of Crime Act; and
Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1998.

93 AGENDA ITEM NO. 6.

ATTACHMENT E

GROSS INCOME WORKSHEET
(use actual HCD form)

ASSETS
Household Member Assets Description Current Value Actual Income from Assets
(Annualized)*

1. Totals 1(a) 1(b)

2. If line 1(a) is $5,000 or less, enter 0 here and in line 6(d) below.

Income from assets of $5,000 or less is not included in the determination of income eligibility.

2. 3. If line 1(a) is greater than $5,000:
(a) multiply line 1(a) by 2.0% and enter results here 3(a) (b) enter amount from line 1(b) 3(b)
(c) Enter the greater of lines 3(a) or 3(b) here and in line 6(d) below.
3(c)
ANTICIPATED ANNUAL INCOME *

Household Member
a.

Wages/
Salaries
b.

Benefits/
Pensions
c.

Other
Income
d.

Asset
Income

6. Totals

a.

b.

c.

d.

7. Enter total of items from 6a.through 6d. (Total Income)

7. * Use Wage Income Calculations Worksheet (includes method for annualizing amounts)

Completed and Reviewed by: ______________________________ Date: _________

94 AGENDA ITEM NO. 6.

ATTACHMENT F

Annual Income Asset Inclusions and Exclusions
This table presents the Part 5 asset inclusions and exclusions as stated in the HUD Technical Guide for Determining Income and Allowances for HOME Program (Third Edition; January 2005).

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

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

Assets held in foreign countries are considered assets.

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

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

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

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

6. Retirement and pension funds.

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

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

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

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

Exclusions

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

2. Interest in Indian trust lands.

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

4. Equity in cooperatives in which the family lives.

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

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

Assets that are Part of an Active Business. "Business" does not include rental of properties that are held as an investment and not a main occupation.

95 AGENDA ITEM NO. 6.

ATTACHMENT G

Homebuyer Program Lead Compliance Document Checklist

The following documents should be in each Homebuyer file to document compliance with the lead requirements:

Document Name Purpose ✓
Lead Safe Housing Rule Screening Sheet Documents exemptions Physical inspection form (HQS or equivalent) Documents visual assessment results

Seller Certification Seller certifies that paint was
stabilized by qualified workers
and that safe work practices
were followed during paint
stabilization

Clearance Report and Clearance Review Worksheet Documents that unit passed clearance

Disclosure Form Documents that buyer
received disclosure and
pamphlet.

Lead Hazard Reduction Notice Documents that buyer
received required lead hazard
reduction notification.

This was taken from the HUD Website at:

http://www.hud.gov/offices/cpd/affordablehousing/training/leadsafe/usefulforms/index.cfm#crosscut ting

96 AGENDA ITEM NO. 6.

ATTACHMENT H

LEAD-BASED PAINT

VISUAL ASSESSMENT, NOTICE OF PRESUMPTION, AND HAZARD REDUCTION FORM

Section 1: Background Information
Property Address: No LBP found or LBP exempt 
Select one: Visual Assessment  Presumption  Hazard Reduction 

Section 2: Visual Assessment. Fill out Sections 1, 2, and 6. If paint stabilization is performed, also fill out Sections 4 and 5 after the work is completed.

Visual Assessment Date: Report Date:

Check if no deteriorated paint found 
Attachment A: Summary where deteriorated paint was found.

Section 3: Notice of Presumption. Fill out Sections 1, 3, 5, and 6. Provide to occupant w/in 15 days of presumption.

Date of Presumption Notice:

Lead-based paint is presumed to be present  and/or Lead-based paint hazards are presumed to be present 
Attachment B: Summary of Presumption:

Section 4: Notice of Lead-Based Paint Hazard Reduction Activity. Fill out Sections 1, 4, 5, and 6.

Provide to occupant w/in 15 days of after work completed.

Date of Hazard Reduction Notice:

Initial Hazard Reduction Notice? Yes  No  Start & Completion Dates:

If “No”, dates of previous Hazard Reduction Activity Notices:

Attachment C: Activity locations and types.

Attachment D: Location of building components with lead-based paint remaining in the rooms, spaces or areas where activities were conducted.

Attachment E: Attach clearance report(s), using DHS form 8552 (and 8551 for abatement activities)

Section 5: Resident Receipt of Notice for Presumption or Lead-Based Paint Hazard Reduction Activity Printed Name: Signature: Date:

Section 6: Contact Information Organization:

Contact Name: Contact Signature:

Date: Address: Phone:

97 AGENDA ITEM NO. 6.

ATTACHMENT I

City of Clovis – Loan Servicing Policies and Procedures

The City of Clovis, hereafter called " City," has adopted these policies and procedures to preserve its financial interest in properties whose "Borrowers" have been assisted with public funds. The City will to the greatest extent possible follow these policies and procedures, but each loan will be evaluated and handled on a case-by-case basis. The City has formulated this document to comply with state and federal regulations regarding the use of these public funds and any property restrictions, which are associated with them.

1. Loan Repayments:

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

For Notes which are deferred payment loans, the City will accept voluntary payments on the loan. Loan payments will be credited to principal. The Borrower may repay the loan balance, and any interest as applicable, at any time with no penalty. Partial repayments will be annotated in the City’s loan portfolio, and individual homeowner file.

2. Annual Occupancy Restrictions and Certifications:

On owner-occupant loans, the City will require that Borrowers annually certify owner occupancy, during the term of the loan, by submitting utility bills and/or other documentation. For CDBG, some loans may have income and housing cost evaluations, which require a household to document that they are not able to make amortized loan payments, typically every five years. These loan terms are incorporated in the original Note and Deed of Trust. On HOME-funded loans, annual occupancy verification will occur between January 1 and 15 of each year for the term of the loan. Annual occupancy certifications will be consolidated into a once per year requirement occurring appr oximately October 15, of each year, for all Housing Programs.

NOTE: In regards to CalHome Program loans: 1) loans are not assumable, and cannot be reassigned if original Borrower is no longer occupying the assisted home; 2) when an owner is not residing in the home due to illness and/or hospitalization, the situation may be considered as a continued owner -occupancy only for the initial six months of absence.

3. Loan Discounting (Owner-Occupied Rehabilitation):

When actual costs to rehabilitate a home is lower than the amount borrowed in the Promissory Note, the City will discount the Note by writing the discount on the back of the Note and identifying the revised amount in the City’s Loan Portfolio and File documentation.
98 AGENDA ITEM NO. 6.

4. Request for Payoff Demands:

City will process request for payoff demands by calculating loan payoffs, including any applicable interest schedules. The calculation will be provided to the owner, escrow officer, or City, with a “good until” date, at which time, if the loan isn’t paid off in full, the Borrower will have to request and receive an updated payoff letter from the City.

Once the loan is paid in full, the City will draft and execute a Full Reconveyance, and have the notarized document recorded at the County Recorder’s office. The repayment will be processed according to the funding program Reuse Account Plan, and the loan taken off of the City‘s loan portfolio.

5. Payment of Property Taxes and Insurance:

As part of keeping the loan from going into default, borrower must maintain property insurance coverage naming the City as loss payee. Except for HOME-funded loans, if borrower fails to maintain the necessary insurance, the City may take out force placed insurance to cover the property w hile the Borrower puts a new insurance policy in place. All costs for installing the necessary insurance will be added to the loan balance at time of installation of Borrower's new insurance.

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

Property taxes must be kept current during the term of the loan. If the Borrower fails to maintain payment of property taxes then the City may pay the taxes current and add the balance of the tax payment plus any penalties to the balance of the loan (not permissible when funded with HOME).

Wherever possible, the City encourages Borrower to have impound accounts set up with their first mortgagee wherein they pay their taxes and insurance as part of their monthly mortgage payment. The City will verify the continued payment of property taxes on an annual basis.

6. Required Request for Notice of Default:

When the Borrower's loan is in second position behind an existing first mortgage, it is the City's policy to prepare and record a "Request for Notice of Default" for each senior lien in front of City's loan. This document requires any senior lienholder lis ted in the notice to notify the City of initiation of a foreclosure action. The City will then have time to contact the Borrower and assist them in bringing the first loan current, if possible. The City can also monitor the foreclosure process and go throu gh the necessary analysis to determine if the loan can be made whole or preserved. When the City is in a third position and receives notification of foreclosure from only one 99 AGENDA ITEM NO. 6.

senior lienholder, it is in their best interest to contact any other senior lienh olders regarding the status of their loans.

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

In all cases where there is a change in title or occupancy or use, the Borrower must notify the City in writing of any change. City and Borrower will work together to ensure the property is kept in compliance with the original Program terms and conditions such that it remains available as an affordable home for low -income families. These types of changes are typical when Borrowers do estate planning (adding a relative to title) or if a Borrower dies and property is transferred to heirs or when the property is sold or transferred as part of a business transaction. In some cases, the Borrower might move and turn the property into a rental unit without notifying the City. Changes in title or occupancy must be in keeping with the objective of benefit to low -income households (below 80 percent of AMI).

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

NOTE: CalHome Program loans are not assumable, and cannot be reassigned i f original Borrower is no longer occupying the assisted home, unless the transfer meets the requirements in Section 8 below.

If a transfer of the property occurs through inheritance, the heir (as owner-occupant) may be provided the opportunity to assume t he loan at an interest rate based on household size and household income, provided the heir is income eligible. If the heir intends to occupy the property and is not low-income, the balance of the loan is due and payable. For CDBG only, if the heir intends to act as an owner­ investor (not permitted under HOME), the balance of the loan may be converted to an owner/investor interest rate and loan term and a rent limitation agreement is signed and recorded on title. All such changes are subject to the review and approval of the City's Loan Committee.

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

Conversion to use other than residential use is not allowable where the full use of the property is changed from residential to commercial or other. In some cases, Borrowers may request that the City allow for a partial conversion where some of the residence is used for a business but the household still resides in the property. Partial conversions can be allowed if it is reviewed and approved by any and all agencies required by local statute. If the use of the property is converted to a fully non - residential use, the loan balance is due and payable.
100
AGENDA ITEM NO. 6.

8. Request for CalHome Loan Transfer:

In regards to CalHome Loans, the following transfers of interest shall not require the repayment of the loan:

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

9. Requests for Subordinations after loan is Recorded:

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

For CalHome Program loans: 1) the new senior lien must be for rate or term changes only, and may include financed closing costs; 2) the term of the new senior lien must mature concurrently or after the CalHome lien; 3) the new senior lien must be amortized for the entire period of the loan (negative amortization, balloon payments, or changes in payments are not allowed – all terms required of a first lien placed concurrently with a CalHome lien apply).

Also, the loan must:

• be fully amortized and have a fixed interest rate that does not exceed the current market rate, as established by an index identified in the most recent NOFA;
• not have a temporary interest rate buy-down;
• have a term "all due and payable" that matures prior to or concurrently with the maturity date of the Promi ssory Note. Therefore, the maturity date of the existing Promissory Note should be modified to coincide with the maturity date of the new first mortgage; and,
101
AGENDA ITEM NO. 6.

• not have a balloon payment due before the maturity date of the Program loan.

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

10. Process for Loan Foreclosure:

Upon any condition of loan default: 1) non-payment (if required); 2) lack of insurance or property tax payment; 3) change in title or use without approval; 4) default on senior loans, the City will send out a le tter to the Borrower notifying them of the default situation. If the default situation continues then the City may start a formal process of foreclosure.

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

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

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

11. City as Senior Lienholder

When the City is first position as a senior lienholder, active collection efforts will begin on any loan that is 31 or more days in arrears. Attempts will be made to assist t he homeowner in bringing and keeping the loan current. These attempts will be 102
AGENDA ITEM NO. 6.

conveyed in an increasingly urgent manner until loan payments have reached 90 days in arrears, at which time the City may consider foreclosure. City's staff will consider the following factors before initiating foreclosure:
• Can the loan be cured and can the rates and terms be adjusted to allow for affordable payments such that foreclosure is not necessary? • Can the Borrower refinance with a private City and pay off the City? • Can the Borrower sell the property and pay off the City? o Does the balance warrant foreclosure? (If the balance is under $5,000, the expense to foreclose may not be worth pursuing.)
• Will the sales price of home "as is" cover the principal balance owing, necessary advances, (maintain fire insurance, maintain or bring current delinquent property taxes, monthly yard maintenance, periodic inspections of property to prevent vandalism, etc.) foreclosure, and
• Will there be marketing costs?
If the balance is sub stantial and all of the above factors have been considered, the City may "opt to initiate foreclosure. The Borrower must receive, by certified mail, a thirty-day notification of foreclosure initiation. This notification must include the exact amount of funds to be remitted to the City to prevent foreclosure (such as, funds to bring a delinquent BMIR current or pay off a DPL).

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

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

12. Records Retention

The Originals of legal documents (i.e. Promissory Note, Deed of Trust, Request for Notice of Default or Sale, Reconveyances and Cancelled Loan documents, etc.) will be kept in a secure location with restricted access.

All documentation pertaining to the applications, loans, inspections, work write -ups, etc., or the operation of the City’s Housing Program will remain available to funding agency staff for three years after termination of the funding Agreement, or as required by the agency.

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AGENDA ITEM NO. 6.

ATTACHMENT J
City of Clovis – Reuse Account Plan (CalHome Program)

The City of Clovis (“City”) commits to maintaining policies and procedures that segregate CalHome funds for future reuse. This reuse account plan is intended to satisfy the requirements specified in Article 2, Section 7724 of the CalHome Program, Title 25 California Code of Regulations, Division 1, Chapter 7, sub Chapter 9, commencing with Section 7715.

CalHome loans shall be managed in accordance with the following policies:

1. All repayments of CalHome loan principal and interest shall be received by the City and deposited into a separate reuse account maintained by the City’s Finance Department.

The City provides a detailed tracking system to document CalHome loans, including borrower name and address, loan/reference number, grant year, APN, date loan was provided and date of loan maturity, and principal and interest.

2. The reuse account shall be an inter est-bearing account into which all earned interest shall be deposited. Interest earned shall be considered reuse funds and will be reused for CalHome Program eligible purposes..

3. All funds deposited into the reuse account shall be the property of the City.

4. All CalHome reuse funds shall be expended in accordance with CalHome Program regulations. This includes, but is not limited to, restriction on income levels of recipients, homebuyer education requirements, and maximum loan amounts.

5. Reuse funds may be use d for CalHome Program eligible activities, including the following:
a. First-time homebuyer mortgage assistance;
b. Cost of homebuyer education for each borrower receiving mortgage assistance from the reuse account (not to exceed maximum CalHome allowance);
c. Loan processing activity delivery fee, as applicable, in accordance with CalHome Program requirements in effect at the time of the loan; d. Up to five percent (5%) for loan servicing;
e. Owner-occupied rehabilitation assistance;
f. Mobile home replacement; and
g. Housing development projects.

6. A portion of the funds deposited in the CalHome reuse account may be used to pay for the delivery of CalHome activities funded from the reuse account. The amount is dependent upon the activity funded and is calculated as a percentage of the loan made.

7. Reuse funds will only be used within the city limits of Clovis.

8. The City will strive to utilize CalHome reuse funds on an ongoing basis.

9. The City will comply with all HCD reporting requirements regarding the use of CalHome reuse funds.

10. The City shall allow HCD full access to the reuse account records for the purpose of determining the City’s compliance with CalHome regulations.

11. The City has the authority to amend this document. All amendments to the Reuse Account Plan are subject to final approval by HCD.
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AGENDA ITEM NO. 6.

TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Administration - Approval – Res. 22-___, Supporting the Fresno County 2022 Homelessness Priorities as Adopted by the Board of Supervisors of the County of Fresno.

ATTACHMENTS: 1. Resolution

CONFLICT OF INTEREST
None.

RECOMMENDATION
For the City Council to approve a resolution supporting the Fresno County 2022 Homelessness Priorities as Adopted by the Board of Supervisors of the County of Fresno, to serve as guidance in addressing homelessness countywide.

EXECUTIVE SUMMARY
Representatives from the County of Fresno, its fifteen Cities, and partner agencies , have collectively undertaken multiple efforts to address homelessness countywide. Most recently, the agencies produced an update to the list of priorities to strategically address homelessness countywide, which will provide th e basis for coordinating resources regionally and cross - jurisdictionally, engage the community, and attract private funding to support community-specific programs.

BACKGROUND
County of Fresno staff have consolidated input from the fifteen County municipalities, various County Departments, the Fresno Madera Continuum of Care, other public agencies, and community partners to establish the 2022 Homelessness Priorities. The Priorities will provide a guiding tool on development of prevention strategies, maximizing effectiveness of the continuum of services, and assist in prioritizing the application for additional public and private funding.

The Priorities were adopted by the Fresno County Board of Supervisors at their March 22, 2022, board meeting. Since then, County Staff have requested partner cities to also support the County priorities by adopting a resolution in support of the Priorities. Adoption of the resolution will 105
AGENDA ITEM NO. 7.
solidify our continued partnerships to address the needs of the Homeless in our community. The established Priorities include the following:

1. OUTREACH
Informed by reporting parties and law enforcement to engage, provide services and hygiene kits at encampments, linkage to programs/resources, and track key data related to homelessness and service need, and strengthen medical outreach resources.

2. RELOCATION AND SANITATION
Through continued enforcement of ordinances to address hazardous or unsanitary conditions, which constitute fire, health, and/or safety risks.

3. TRANSPORTATION
To connect individuals to services and maintain engagement.

4. SAFE SHELTERS/TRIAGE CENTERS
Through coordination with cities and partnerships with community faith-based organizations and to include emergency housing for those who are not ambulatory and have health needs.

5. TRANSITIONAL AND AFFORDABLE HOUSING
That includes exploration of independent living, rehabilitation of existing homes and other housing opportunities.

6. WRAP AROUND SERVICES
Include substance use disorder and mental health services that continue once individuals exit programs and/or jail and expand diversion from homelessness and rapid rehousing services.

7. JOB PLACEMENT AND TRAINING
To train/retrain individuals entering/re-entering the work force.

Supporting the Countywide priorities will also facilitate the establishment of the Countywide Multi-Agency Response to Community Homelessness (“MARCH”) compact, which will be focused on aligning resources to maximize impact, engaging the community, speak w ith one voice, and seek additional financing. Membership in the MARCH compact will include County staff, and representatives from the City of Fresno, rural area Cities, County of Madera, Fresno Madera Continuum of Care, Superintendent of Schools, Housing Authority, Hospital System/Foundations, Philanthropy, Business Sector, Clients, and from a Managed Care Plan.

Consolidating these services will unify the local “voice” to address homelessness and ensure that the region continues to work in partnership to address the needs and impacts of homelessness in our communities.

FISCAL IMPACT
There is no fiscal impact related to the adoption of the resolution.

REASON FOR RECOMMENDATION
Supporting priorities and goals to address Homelessness countywide will assist the region by unifying efforts, aligning resources and ensuring the continued partnership of region agencies and community groups.

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ACTIONS FOLLOWING APPROVAL
City of Clovis sta ff will continue to work in partnership with County staff and regional agencies to help meet the needs of the homeless, align resources and provide program funding recommendations as needed by funding agencies.

Prepared by: Claudia Cazares, Affordable Housing Project Manager

Reviewed by: City Manager _AH__

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ATTACHMENT 1
RESOLUTION NO. 22-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS

SUPPORTING THE COUNTY OF FRESNO HOMELESSNESS PRIORITIES

WHEREAS, the Board of Supervisors of the County of Fresno adopted Homelessness Priorities Resolution No. 22-079 at their March 22, 2022 meeting; and

WHEREAS, the County of Fresno and the City of Clovis have jointly undertaken multiple efforts at the local level to address homelessness countywide.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Clovis supports the adoption of Resolution No. 22 -079 by the Board of Supervisors of the County of Fresno regarding the matter of Homelessness Priorities for 2022.

* * * * *

The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

DATED: May 16, 2022

_____________________________ ______________________________ Mayor City Clerk
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TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Administration - Approval – Purchase of Support and Maintenance Contract for Network and Telecommunications equipment from Zones, Inc.

ATTACHMENTS: 1. None

CONFLICT OF INTEREST
None.

RECOMMENDATION
For the City Council to award the RFP and approve the purchase of the maintenance and support agreement for the City’s network/telecommunications equipment from Zones, Inc. in the amount of $96,197.12 per year for three years.

EXECUTIVE SUMMARY
Included in the 2021 -2022 Budget are funds to renew existing maintenance and support agreements for the City’s network/Telecommunications equipment. As the City continues to grow, more facilities are connected to the City network, voice/data services are m ore closely integrated, and the additional equipment installed requires maintenance throughout its life expectancy.

Staff went out with a Request for Proposals using the City’s online bid system and is recommending the purchase of the maintenance agre ement from Zones, Inc. based on submitting the lowest-cost responsible proposal.

BACKGROUND
Every year, the City has renewed the Cisco support and maintenance agreement (SmartNet) for the core network/telecommunications equipment to help ensure the system’s availability and reliability in keeping the network continually available.

Several years ago, staff consolid ated maintenance and support agreements to help better manage them. As new network/telecommunications equipment has been added over the years, 109
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staff co-terminates with the existing contract. Support and maintenance for all equipment now starts and ends on the same date each year.

Staff conducted a physical inventory of all network/telecommunications equipment to ensure all necessary equipment is covered.

Staff requested proposals from vendors using the City’s online bidding system on April 14, 2022.

There were 427 vendors notified and staff received two (2) responses.

Zones, Inc is a Cisco Gold Partner and has submitted the lowest responsible proposal for the three-year term of this Smartnet renewal. This would be paid annually at $96,197.12

FISCAL IMPACT
Funds have been allocated in FY21-22 for the renewal of Cisco SmartNet Maintenance.

REASON FOR RECOMMENDATION
Staff is recommending that Council approve this purchase from Zones, Inc. which will provide continuity and it will maintain a consistent level of service.

ACTIONS FOLLOWING APPROVAL
If approved, the agreement with Zones will be executed for Cisco SmartNet services.

Prepared by: Jesse Velez, Deputy Director, Information Technology

Reviewed by: City Manager _ AH__

Vendor Name

1-Year

3-Year
Zones, Inc. $96,197.12 $288,591.36
Red River Solutions $121,288.32 $363,864.96
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AGENDA ITEM NO. 8.

TO: Mayor and City Council
FROM: General Services
DATE: May 16, 2022
SUBJECT: General Services – Approval – Waive the City’s Usual Purchasing Requirements and Authorize the Purchase of the Spare Platform with Spare Pooled OnDemand; and Approval – Res. 22-___, Amending the FY2021-2022 Transit Budget to a dd funds for purchase of the Spare Platform.

ATTACHMENTS: 1. Resolution and Budget Amendment

2. Spare Sales Quote

3. Spare Contract

CONFLICT OF INTEREST
None.

RECOMMENDATION
For the City Council to authorize the City Manager to approve the purchase of the Spare Platform (Software-as-a-Service “SaaS”) with Spare Pooled OnDemand for paratransit dispatch software; and for the City Council to approve a resolution amending the 2021-2022 Transit budget to add $50,620.

EXECUTIVE SUMMARY
Staff recommends the purchase of the Spare Platform to be utilized for Round Up paratransit services. The purchase will aid in the delivery of transportation services to passengers using paratransit services. The annual cost of the software is $50,620, with a total cost of $253,100 over five years. The costs for the software and associated expenses will be paid through State Transit Assistance funds already received.

BACKGROUND
Software Purchase
On May 22, 2014, Clovis Transit entered into an agreement with Mobilitat for its current dispatch software, Easy Rides Plus. The software program no longer meets the needs of the operation , and Mobilitat has stopped providing any feature updates which prompted staff to begin the process of searching for a replacement last year.
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Staff has established three objectives for a replacement software program: 1) improve paratransit passenger service, 2) improve operational efficiency, and 3) bring down operation costs. Staff met with five different vendors to determine if there was a paratransit dispatching software that would meet all three objectives. Out of the five vendors, Spare Labs offered a n innovative solution that met all three objectives. Spare Labs was able to offer the solution that automatically schedule d trips and continuously re -optimized the schedule, without human interaction.

Spare’s proprietary routing and matching optimization algorithm integrates with data feeds from other transit modes (e.g., Google Maps) to continuously calculate, in real-time, the most efficient routes and allocation of transportation resources . Like systems used by well-known ride hail services, it will reduce idle vehicles and maximize resources to provide faster service to passengers and shorter wait times.

Spare Labs software program has many features, including:

 Automatic assignment of trips based on real time information (e.g., vehicle location, traffic, road conditions, and fleet availability) and continuous re-optimization of the schedule.

 User-friendly and intuitive interface for staff and passengers featuring a color -coded live map that will provide real-time information on vehicle location, availability, and capacity.

 Real-time notification and a smartphone a pp that will greatly improve the passenger experience by providing text notifications , push notices, or a phone call to notify when their bus will arrive. Passengers will also be able to view scheduled trips and edit information.

 Spare is fully SOC -2 and HIPPA compliant, ensuring passengers’ information and data will be secure.

 The software is scalable and includes premium services that may be used in the future to deploy on-demand rides and microtransit services if desired.

Spare is currently used by a variety of transit agencies throughout the United States with a high degree of sat isfaction. Agencies experienced swift resolution to customer service inquiries, increases in ridership and passenger satisfaction, and a decline in operational costs. Staff anticipates an August 1, 2022, launch date.

FY2021-2022 Transit Budget Amendment
A budget amendment is required for the FY2021 -2022 budget to account for expenditure of $50,620 in previously received State Transit Assistance as follows:

 Transit Fund 515: Increase expenditure budget for software purchase by $ 50,620 for dispatching software.

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FISCAL IMPACT
Adequate State Transit Assistance (STA) funds are held in the City’s Transit fund account for the purchase of the software. Those funds will be added to the current budget with the budget amendment shown in Attachment 1.

Pricing for the recommended purchase is as follows:

Annual Fees (based on 17-20 simultaneously active vehicles):

Service Cost
Base Platform $10,500 per year
Service Capacity $34,000 per year
Voice Package $6,120 per year

Annual Total: $50,620
Five Year Total: $253,100

REASON FOR RECOMMENDATION
Spare is the only dispatching solution with the capability of fully automated sc heduling and dispatching. Spare’s innovative solution will allow transit services to become more efficient, reduce operational costs, and improve paratransit services to passengers. Spare will also allow transit services to be scalable in the future.

Clovis Transit is requesting a waiver from formal bid procedures due to the lack of viable vendors for this specified purchase as specified within the City of Clovis Purchasing Policy, Section C,1, b, (2).

ACTIONS FOLLOWING APPROVAL
Amendment of the Transit FY2021-2022 budget to reflect the budgetary changes to expenditure accounts. A contract will be prepared for the City Manager’s approval and the software will be ordered.

Prepared by: Amy Hance, General Services Manager

Reviewed by: City Manager _AH__

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Attachment 1
RESOLUTION 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS APPROVING AMENDMENTS TO THE FY 2021-22 GENERAL SERVICES DEPARTMENT

WHEREAS, the City Council adopted the FY2021-22 Budget on June 14, 2021; and

WHEREAS, the City of Clovis has previously received State Transit Assistance (STA) funds for transit capital purchases; and

WHEREAS, prior allocations of STA funds were not expended and remain in the Transit Fund awaiting allocation; and

WHEREAS, the City Council has approved the expenditure of STA funds for the purchase of paratransit dispatch software; and

WHEREAS, the STA funds were not originally included in the FY 202 1-22 General Services budget.

NOW, THEREFORE BE IT RESOLVED, that the City Council of The City of Clovis hereby approves the budget amendment shown in the “Summary of Expenditures/Revenues by Department” “Summary of Expenditures/Revenues by Fund”, attached as Attachment A

* * * * * * *

The foregoing Resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Dated: May 16, 2022

________________________ ___________________________
Mayor City Clerk

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Attachment A

SUMMARY OF EXPENDITURES BY DEPARTMENT

DEPARTMENT – GENERAL SERVICES

Transit $50,620
TOTAL DEPARTMENT $50,620

SUMMARY OF EXPENDITURES BY FUND

Transit $50,620
TOTAL FUND $50,620

SUMMARY OF REVENUES BY DEPARTMENT

DEPARTMENT – GENERAL SERVICES

Transit $50,620
TOTAL DEPARTMENT $50,620

SUMMARY OF REVENUE BY FUND

Transit $50,620
TOTAL FUND $50,620

NET GENERAL FUND SUPPORT

TOTAL $0

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CITY OF CLOVIS

CONTRACT SERVICES AGREEMENT

This Contract Services Agreement ("Agreement") is entered into between the City of Clovis, a California general law city ("City") and Spare Labs Inc. ("Contractor") with respect to the following recitals, which are a substantive part of this Agreement. This Agreement shall be effective on June 1, 2022 ("Effective Date").

RECITALS

City desires to obtain a transit planning and operations platform more fully described in Exhibit A, and, if applicable, as further set forth in the order form from Contractor attached as Exhibit B, which are incorporated herein by reference.

NOW, THEREFORE, in consideration of the promises and mutual agreements herein, City and Contractor agree as follows:

AGREEMENT

1. Scope of Services. Contractor shall perform the Services described in the Recitals and detailed in Exhibits A & B. Changes in the Scope of Services, including the work performed and/or deliverables produced, shall be made in writing, and particularly describe the changes in Services, including payment/costs and schedule/term, as applicable.

2. Priority and Conflicts; Exclusions. If the terms and requirements of this Agreement and/or Exhibit A conflict with Exhibit B, this Agreement and Exhibit A shall control. No contractual terms and/or conditions found in Exhibit B shall purport to waive, disclaim, or limit Contractor’s liability indemnification obligations, warranties, damages for breach or delay, or any security, bonding, or insurance requirements, and any such provisions shall have no force or effect with respect to this Agreement and the Services performed by Contractor.

3. Term of Agreement; Commencement of Services; Schedule. The term of this Agreement shall commence on June 1, 2022, and Contractor shall begin performing the Services on that date, unless otherwise instructed by City. This Agreement shall terminate on May 31, 2025, unless extended beyond that date by mutual consent of the Parties, for a period not exceeding five (5) years. This Agreement may be terminated prior to the end of the term pursuant to Section 26 and 27 herein.

Contractor shall perform the Services according to the schedule set forth in Exhibits A and/or B, if applicable. If no schedule is set forth in Exhibits A and/or B, City and Contractor shall mutually agree on a schedule for performance of the Services and completion of any deliverables. The schedule shall be subject to modification based on the City’s operational needs. City will notify Contractor in advance of any modification to the schedule.

4. Payment for Services. City shall pay Contractor for the Services performed pursuant to this Agreement according to the rate(s) stated in Exhibit A or in Contractor’s Service Agreement, which is set forth in Exhibit B, as applicable. The total amount paid by City to Contractor shall not exceed two hundred ninety thousand dollars ($290,000).

ATTACHMENT 3
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The foregoing is inclusive of all labor, equipment, materials, costs and expenses, taxes, and overhead.

City shall pay Contractor for Services satisfactorily performed pursuant to this Agreement. Contractor shall submit annual invoices to City containing detailed billing information regarding the Services provided and unless otherwise specified in Exhibit A, City shall tender payment to Contractor within thirty (30) days after receipt of invoice.

5. Independent Contractor Status. Contractor and its subcontractors shall perform the Services as independent contractors and not as officers, employees, agents or volunteers of City. Contractor is engaged in an independently established trade, occupation, or business to perform the Services required by this Agreement and is hereby retained to perform work that is outside the usual course of City’s business. Contractor is free from the control and direction of City in connection with the manner of performance of the work. Nothing contained in this Agreement shall be deemed to create any contractual relationship between City and Contractor’s employees or subcontractors, nor shall anything contained in this Agreement be deemed to give any third party, including but not limited to Contractor’s employees or subcontractors, any claim or right of action against City.

6. Acknowledgement. Contractor acknowledges, warrants, and represents that they have thoroughly investigated the scope of work to be provided by the Contractor and has examined all of the Exhibits, and all referenced reports, and has examined the installation site for equipment and/or materials which they have agreed to supply herein and is familiar with the local conditions which may affect their manufacture and delivery of said equipment and that except as provided for herein, he will make no claims for additional compensation over and above as set forth in the bidding documents and Exhibits.

7. Qualifications. Contractor represents that Contractor has the qualifications and skills necessary to perform the services under this Agreement in a competent, professional manner, without the advice or direction of City. This means Contractor is able to fulfill the requirements of this Agreement. Failure to perform all the services required under this Agreement constitutes a material breach of the Agreement.

Contractor has complete and sole discretion for the manner in which the work under this Agreement will be performed.

8. Key Personnel. Contractor agrees and designates the following Project team members as “Key Personnel:
● CEO: Kristoffer Vik Hansen
● Director of Partner Success: Quinn Kliman
● Growth Manager: Rob Precious

Contractor agrees that said Key Personnel and other staff will be able to dedicate the necessary amount of their time to the Services, as needed, for the successful and timely completion of the Project.

9. Contractor Representations; Standard of Care; Compliance with Law. Contractor represents that Contractor and any subcontractors utilized by Contractor are and will be qualified in the field for which Services are being provided under this Agreement and Contractor and any subcontractors are now, and will be throughout their performance of the Services under this Agreement, properly licensed, certified, secured/bonded, trained, and/or otherwise qualified and authorized to perform the Services required and contemplated by this Agreement, as may be required by law. Contractor and its subcontractors shall utilize the standard of care and skill customarily exercised by members of their profession, shall use reasonable diligence and best judgment while performing the Services, and shall comply with all applicable laws, regulations, and industry standards. Contractor shall comply with all Labor Code requirements for public works projects if applicable to Contractor’s work under this Agreement.

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10. Identity of Subcontractors. Contractor shall, before commencing any work under this Agreement, provide to City in writing: (a) the identity of all subcontractors, if any, Contractor intends to utilize in Contractor’s performance of this Agreement; and (b) a detailed description of the full scope of work to be provided by such subcontractors. Contractor shall only employ subcontractors pre-approved by City and in no event shall Contractor replace an approved subcontractor without the advance written permission of City, with the understanding that City's permission will not be unreasonably withheld. Notwithstanding any other provisions in this Agreement, Contractor shall be liable to City for the performance of Contractor’s subcontractors.

11. Subcontractor Provisions. Contractor shall include in its written agreements with its subcontractors, if any, provisions which: (a) impose upon the subcontractors the obligation to provide to City the same insurance and indemnity obligations that Contractor owes to City; (b) make clear that City intends to rely upon the reports, opinions, conclusions and other work product prepared and performed by subcontractors for Contractor; and (c) entitle City to impose upon subcontractors the assignment rights found elsewhere in this Agreement.

12. Drug Free Workplace. Contractor acknowledges that City has adopted a policy of maintaining a drug free workplace and Contractor agrees to abide by the provisions of City’s substance abuse policy provide to Contractor under separate cover. Violation of this provision may result in immediate termination of this Agreement.

13. Power to Act on Behalf of City. Contractor is not acting as an agent of City and shall not have any right, power, or authority to create any obligation, express or implied, or make representations on behalf of City except as may be expressly authorized in advance in writing from time to time by City and then only to the extent of such authorization.

14. Record Keeping; Reports. Contractor shall keep complete records showing the type of Services performed. Contractor shall be responsible and shall require its subcontractors to keep similar records.

City shall be given reasonable access to the records of Contractor and its subcontractors for inspection and audit purposes. Contractor shall provide City with a working draft of all reports upon reasonable request by City and of all final reports prepared by Contractor under this Agreement.

15. Ownership and Inspection of Documents. All data (routes, latitudes/longitudes, passenger information, schedules, etc.), tests, reports, analyses, documents, records, conclusions, opinions, recommendations, and other work product specifically generated by or produced for Contractor or its subcontractors solely on behalf of City in connection with the Services, regardless of the medium, including physical drawings and materials recorded on computer discs or other electronic devices ("Work Product"), shall be and remain the property of City. City shall have the right to use, copy, modify, and reuse the Work Product as it sees fit. Upon City's request, Contractor shall make available for inspection and copying all such Work Product and all Work Product shall be turned over to City promptly at City's request or upon termination of this Agreement, whichever occurs first. Contractor shall not release any Work Product to third parties without prior written approval of City. This obligation shall survive termination of this Agreement and shall survive for four (4) years from the date of expiration or termination of this Agreement.

16. Confidentiality. All Work Product prepared and performed by and on behalf of Contractor in connection with the Services performed pursuant to this Agreement shall be kept confidential and shall be disclosed only to City, unless otherwise provided by law or expressly authorized by City. Contractor shall not disclose or permit the disclosure of any confidential information acquired during performance of the Services, except to its agents, employees and subcontractors who need such confidential information in order to properly perform their duties relative to this Agreement. Contractor shall also require its 133
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subcontractors to be bound to these confidentiality provisions.

17. Professional Responsibility. Notwithstanding any other provision in this Agreement, the review and/or approval by City, or any of its directors, officers, employees, or agents, of any technical specifications, design documents, and all other work products or project communications prepared by the Contractor or any of its subcontractor’s, or of any acts or failures to act by Contractor or any of its subcontractors, shall not relieve the Contractor or any of its subcontractors of any professional responsibility for the services performed.

18. Implementation and Integration Services. Contractor will coordinate all activities, including but not limited to implantation and integration services, inspection, field testing of equipment, monitoring and reporting Contractor’s progress with and to City. Contractor will cooperate with and advise City of Contractor’s progress and timing schedules for the Project and shall provide City access to Contractor’s equipment and facilities for City’s inspections of this Project. City shall have the authority to cause Contractor’s work to be stopped if such work is not in accordance with Exhibits A and B. City shall designate a representative (“City Representative”) who shall have the authority to take all actions on behalf of City. Contractor shall direct all notices and other correspondence to the City Representative.

Any notices or approvals from City that are not sent by the City Representative shall be subsequently confirmed by the City Representative.

19. Labor and Materials. Contractor shall provide and furnish all the labor, materials, necessary tools, expendable equipment, and all utility related to construction, implementation, and integration services, and transportation services required to complete the Project.

20. Extra Work. In the event Contractor requests a Change Order for extra work requires as a result of conditions which are significantly different from those reasonably anticipated when this Agreement was executed, such request shall be submitted to City in writing and shall be accompanied by the following declaration, signed by the Contractor:

I, _______________(name of Contractor’s authorized representative) being the ___________ (title of Contractor’s authorized representative) of _______________ (Contractor’s name) (“Contractor”) declare under penalty of perjury under the laws of the State of California, and do personally certify and attest that:

I have thoroughly reviewed the attached claim for additional compensation and/or extension of time , know its contents, and know said claim is made in good faith; the supporting data is truthful and accurate; the amount requested accurately reflects the Agreement adjustment for which Contractor believes the City is liable. I am familiar with California Penal Code Section 72 and California Government Code Sections 12560 et seq., pertaining to false claims, and I know and understand that submission or certification of a false claim may lead to fines, imprisonment, and/or other severe legal consequences.

______________________________
Signature

____________________ ________
Title Date

Submission of a claim, properly certified, with all required supporting documentation, and written rejection or denial of all or part of the claim by the City, is a condition precedent to any action, proceeding, litigation, suit, or demand for arbitration by Contractor.

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Contractor’s disagreement over the amount to be paid for extra work shall not relieve Contractor of the obligation to continue to perform all the Work on the Project as required in Exhibits A and B.

21. System Acceptance. System acceptance testing shall include Contractor and City staff and will occur per the testing plan mutually agreed upon by the Contractor and City. System acceptance tests will exercise all system components according to an acceptance test plan developed by the Contractor and approved by City.

Tests conducted by the Contractor may not prevent the ongoing operation of City unless previously approved by City. The Contractor shall maintain and submit complete records of all test results.

22. Final Acceptance of Full System Deployment. Final Acceptance for the Full System Deployment (“Final Acceptance”) will be granted after thirty (30) calendar days of continuous achievement of the acceptance metrics and error-free production operation of the System from the System Go-Live date.

23. City Name and Logo. Contractor shall not use City's name or insignia, photographs relating to the City projects or work for which Contractor’s services are rendered, or any publicity pertaining to the Contractor’s Services under this Agreement in any magazine, trade paper, newspaper, television or radio production, internet website, social media, or other similar medium without the prior written consent of City.

24. Conflicts of Interest. Contractor warrants that neither Contractor nor any of its employees have an improper interest, present or contemplated, in the Services which would affect Contractor’s or its employees’ performance of the Services and the Work Product produced. Contractor further warrants that neither Contractor nor any of its employees have real property, business interests or income that will be affected by the Services. Contractor covenants that no person having any such interest, whether an employee or subcontractor shall perform the Services under this Agreement. During the performance of the Services, Contractor shall not employ or retain the services of any person who is employed by the City or a member of any City Board or Commission.

25. Non-liability of Officers and Employees. No officer or employee of City shall be personally liable to Contractor, or any successors in interest, in the event of a default or breach by City for any amount which may become due Contractor or its successor, or for any breach of any obligation under the terms of this Agreement.

26. Termination of Agreement. This Agreement shall terminate as provided in Section 3, unless terminated earlier pursuant to the following:

a. Termination by City: For Convenience. City may at its discretion terminate this Agreement for convenience and without cause upon fourteen (14) days prior written notice to Contractor. Upon receipt of a termination notice pursuant to this subsection, Contractor shall promptly discontinue all Services affected, unless the notice directs otherwise.

b. Termination by City or Contractor: For Cause. Either party may terminate this Agreement upon thirty (30) days prior written notice to the other party of a material breach, and a failure within that time period to cure or commence reasonable steps to cure the breach.

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c. Compensation to Contractor Upon Termination. Contractor shall be paid compensation for Services satisfactorily performed prior to notice of termination. As to any phase partially performed but for which the applicable portion of Contractor’s compensation has not become due, Contractor shall be paid the reasonable value of its Services provided. However, in no event shall such payment when added to any other payment due under the applicable part of the work exceed the total compensation of such part as specified Section 4. In the event of termination due to Contractor’s failure to perform in accordance with the terms of this Agreement through no fault of City, City may withhold an amount that would otherwise be payable as an offset to City's damages caused by such failure. In the event of termination for convenience by City, Contractor will charge City, and City will pay, an early termination charge equal to 10% of the annual fee for the terminated Services, multiplied by the number of years remaining in the term of this Agreement at the date of termination.

d. Effect of Termination. Upon termination of this Agreement, Contractor shall: (i) promptly discontinue all Services affected, unless the notice of termination directs otherwise; and (ii) deliver or otherwise make available to the City, without additional compensation, all Work Product and/or deliverables accumulated by the Contractor in performing this Agreement, whether completed or in process. Contractor may not refuse to provide such Work Product for any reason whatsoever.

27. Default/Material Breach. If either party defaults in the performance of this Agreement or materially breaches any of its provisions, the non-breaching party may terminate this Agreement by giving written notification to the breaching party. Termination will take effect immediately on receipt of notice by the breaching party or five (5) days after mailing of notice, whichever occurs first. For purposes of this paragraph, material breach of this Agreement includes, but is not limited to, the following:

a. City’s failure to pay Contractor any undisputed compensation due within thirty (30) days after written demand for payment;

b. Contractor’s failure to complete the Project;

c. Contractor’s material breach of any representation or agreement contained herein, and failure to commence actions to correct such breach within thirty (30) days of written notice by City; or

d. City’s material breach of any representation or agreement contained in this Agreement, and failure to commence actions to correct such breach within thirty (30) days of written notice by the Contractor.

28. Insurance. Contractor shall satisfy the insurance requirements set forth in Exhibit C.

29. Limitation of Liability. Notwithstanding anything to the contrary, except for bodily injury of a person, indemnification obligations, breach of applicable laws, gross negligence or willful misconduct, Contractor and its suppliers (including but not limited to all equipment and technology suppliers), officers, affiliates, representatives, contractors and employees shall not be responsible or liable with respect to any subject matter of this agreement or terms and conditions related thereto under any contract, negligence, strict liability or other theory: (a) for any indirect, exemplary, incidental, special or consequential damages; (b) for any matter beyond company’s reasonable control; or (c) for any amounts that, together with amounts associated with all other claims, exceed the fees paid by customer to company for the services under this agreement in the 12 months prior to the act that gave rise to the liability, in 136
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each case, whether or not company has been advised of the possibility of such damages. In the event of bodily injury of a person, breach of applicable laws, gross negligence or willful misconduct, this limitation of liability shall not apply. This limitation of liability shall in no way limit Contractor’s indemnity obligations as set forth in Section 30 below.

30. Indemnity and Defense. Notwithstanding anything to the contrary, Contractor hereby agrees to indemnify, defend and hold the City, its officials, officers, employees, agents, and volunteers harmless from and against all third party claims, demands, causes of action, actions, damages, losses, expenses, and other liabilities, (including without limitation reasonable attorney fees and costs of litigation) of every nature arising out of or in connection with the alleged or actual negligent acts, errors or , omissions of Contractor or its subcontractors relating to the performance of Services described herein to the fullest extent permitted by law, unless the injuries or damages are the result of City's sole negligence or willful misconduct, subject to any limitations imposed by law. Contractor and City agree that said indemnity and defense obligations shall survive the expiration or termination of this Agreement for any items specified herein that arose or occurred during the term of this Agreement. City shall cooperate with Contractor in the defense of any such claim.

31. Risk of Loss. Contractor shall bear the risk of loss or injury or damage to their work until such time as City has, by written formal acceptance, accepted said work. For the purposes of this section, the work does not include any existing property of City, unless said existing property is modified by the Project. City’s acceptance shall occur when the Project has successfully tested and complies with the requirements contained in Exhibits A and B. During the time period which Contractor must bear the risk of loss, Contractor shall rebuild, repair, restore, and replace and make good all injuries or damage to such work, and shall bear the expenses thereof, except for such injuries or damages as are occasioned by acts of federal government or public entity., and only to the extent of five percent (5%) of the Agreement amount where such injuries or damages are proximately caused by an act of God within the meaning of California Public Contract Code Section 7105.

32. Taxes. Contractor agrees to pay all taxes, licenses, and fees levied or assessed by any governmental agency on Contractor incident to the performance of Services under this Agreement, and unemployment and workers’ compensation insurance, social security, or any other taxes upon the wages of Contractor, its employees, agents, and representatives. Contractor agrees to obtain and renew an annual business tax certificate from City and pay the applicable annual business registration tax to City during the term of this Agreement.

33. Assignment. Neither this Agreement nor any duties or obligations hereunder shall be assignable by Contractor without the prior written consent of City, which consent shall not be unreasonably withheld or delayed. In the event of an assignment to which City has consented, the assignee shall agree in writing to personally assume and perform the covenants, obligations, and agreements herein contained. In addition, Contractor shall not assign the payment of any monies due Contractor from City under the terms of this Agreement to any other individual, corporation, or entity. City retains the right to pay any and all monies due Contractor directly to Contractor.

34. Form and Service of Notices. Any and all notices or other communications required or permitted by this Agreement or by law to be delivered to, served upon, or given to either party to this Agreement by the other party shall be in writing and shall be deemed properly delivered, served or given by one of the following methods:

a. Personally delivered to the party to whom it is directed. Service shall be deemed the date of delivery.

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b. Delivered by e-mail to a known address of the party to whom it is directed provided the e-mail is accompanied by an acknowledgment of receipt by the other party. Service shall be deemed the date of acknowledgement.

c. Delivery by a reliable overnight delivery service (ex., Federal Express) receipted, and addressed to the addressees set forth below the signatories to this Agreement. Service shall be deemed the date of delivery.

d. Delivery by deposit in the United States mail, first class, postage prepaid. Service shall be deemed delivered ninety-six (96) hours after deposit.

35. Entire Agreement. This Agreement, including the Exhibits and any other attachments, represents the entire Agreement between City and Contractor, and supersedes all prior negotiations, representations or agreements, either written or oral with respect to the subject matter herein. This Agreement may be amended only by written instrument signed by both City and Contractor.

36. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

37. Authority. The signatories to this Agreement warrant and represent that they have the legal right, power, and authority to execute this Agreement and bind their respective entities. Evidence of Contractor’s authority is attached as Exhibit D.

38. Severability. In the event any term or provision of this Agreement is declared to be invalid or illegal for any reason, this Agreement will remain in full force and effect and will be interpreted as though such invalid or illegal provision were not a part of this Agreement. The remaining provisions will be construed to preserve the intent and purpose of this Agreement and the parties will negotiate in good faith to modify any invalidated provisions to preserve each party’s anticipated benefits.

39. Applicable Law and Interpretation and Venue. This Agreement shall be interpreted in accordance with the laws of the State of California. The language of all parts of this Agreement shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for or against either party. This Agreement is entered into by City and Contractor in the County of Fresno, California. Contractor shall perform the Services required under this Agreement in the County of Fresno, California. Thus, in the event of litigation, venue shall only lie with the appropriate state or federal court in Fresno County.

40. Amendments and Waiver. This Agreement shall not be modified or amended in any way, and no provision shall be waived, except in writing signed by the parties hereto. No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any such waiver constitute a continuing or subsequent waiver of the same provision.

Failure of either party to enforce any provision of this Agreement shall not constitute a waiver of the right to compel enforcement of the remaining provisions of this Agreement.

41. Third Party Beneficiaries. Nothing in this Agreement shall be construed to confer any rights upon any party not a signatory to this Agreement.

42. Execution in Counterparts. This Agreement may be executed in counterparts such that the signatures may appear on separate signature pages. A copy or an original, with all signatures appended together, shall be deemed a fully executed Agreement.

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43. Alternative Dispute Resolution. If a dispute arises out of or relating to this Agreement, or the alleged breach thereof, and if said dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by non-binding mediation before resorting to litigation. The mediator shall be mutually selected by the parties, but in case of disagreement, the mediator shall be selected by lot from among two (2) nominations provided by each party. All costs and fees required by the mediator shall be split equally by the parties, otherwise each party shall bear its own costs of mediation. If mediation fails to resolve the dispute within thirty (30) days, either party may pursue litigation to resolve the dispute.

Demand for mediation shall be in writing and delivered to the other party to this Agreement.

A demand for mediation shall be made within reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for mediation be made after the date when institution of legal or equitable proceedings based on such a claim, dispute or other matter in question would be barred by California statues of limitations.

44. Non-Discrimination. Contractor shall not discriminate on the basis of any protected class under federal or State law in the provision of the Services or with respect to any Contractor employees or applicants for employment. Contractor shall ensure that any subcontractors are bound to this provision. A protected class, includes, but is not necessarily limited to race, color, national origin, ancestry, religion, age, sex, sexual orientation, marital status, and disability.

45. Performance Requirements. Notwithstanding, and in addition to the provisions of, Sections 26 and 27 of this Agreement, if the Services performed hereunder are not in conformity with the requirements of this Agreement and other pertinent documents, City shall have the right to require Contractor to correct the work in conformity with the requirements of this Agreement at no additional increase in the payment to Contractor. Contractor shall promptly correct the work rejected by City for failing to conform to the requirements of the Agreement. Remedy for non-compliance or non- performance shall commence within twenty-four (24) hours of notice. City shall also have the right to require Contractor to take all necessary steps to ensure future performance of the Services in conformity with the requirements of this Agreement. In the event Contractor fails to correct the work or fails to take necessary steps to ensure future performance of the Services in conformity with the requirements of this Agreement, City shall have the right to immediately terminate this Agreement for default.

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Now, therefore, the City and Contractor have executed this Agreement on the date(s) set forth below.

CONTRACTOR CITY OF CLOVIS

By: __________________________ By: ______________________________ John Holt, City Manager

Date: __________________ Date: ______________________

Party Identification and Contact Information:

Contractor City of Clovis
Spare Labs Inc. General Services - Transit
Attn: Kristoffer Vik Hansen Attn: Bethany Berube
CEO Transit Supervisor
815 W Hastings St., Ste 810 155 N Sunnyside Ave.

Vancouver, BC V6C 1B4 Canada Clovis, CA 93612
[email protected] [email protected]
(855) 551-0585 (559) 324-2771

ATTEST

_______________________________
Karey Cha, City Clerk

APPROVED AS TO FORM

_______________________________
Scott G. Cross, City Attorney

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EXHIBIT A

DESCRIPTION OF SERVICES

SCOPE OF SERVICES
Contractor will deploy the Spare Platform (Software-as-a-Service “SaaS”) with the Spare Pooled OnDemand (Spare Driver app, Spare Rider app, Spare Open API, and Spare Platform administration panel), and Spare Smart Matching and Dispatching Algorithm (Spare Engine) on an independent, secure, and scalable datacenter and web server system with disaster recovery capability.

The Spare Platform with Spare Pooled OnDemand will manage, dispatch, and handle bookings for pooled on-demand and scheduled transportation for the City.

Contractor will provide service for a minimum of seventeen to twenty (17-20) simultaneously active vehicles in service per day.

Contractor will provide a Voice Package which includes:
● Spare Automated Phone Notifications: a phone call notification feature that sends an automated phone call notification to riders
● Spare Driver-Rider VOIP: a voice-over-internet-protocol (VOIP) rider calling feature embedded in the Spare Driver iOS and Android applications.
● Spare Pay IVR: an integrated-voice-response (IVR) feature that collects card payment information from users over-the-phone using an automated phone call mechanism that is triggered from the Spare Platform web-portal.

Contractor will supply administrative user accounts to the City with proper privileges on the Spare Platform system.

Contractor will supply administrator training through a two-hour training course via webinar. Training will be set at an agreed upon time that is convenient for City.

Contractor will supply documentation on the Spare Platform, including the web-based administration panel, the Spare Open API, and the Spare Driver app.

SERVICE LEVEL TERMS

General Service Level Terms and Downtime Management:

The Services shall be available 99.9%, measured monthly, excluding scheduled maintenance. If City requests maintenance during these hours, any uptime or downtime calculation will exclude periods affected by such maintenance. Further, any downtime resulting from outages of third-party connections or utilities or other reasons beyond Contractor’s control will also be excluded from any such calculation.

The City's sole and exclusive remedy, and Contractor's entire liability, in connection with Service availability shall be that for each period of downtime lasting longer than one hour, Contractor will credit City 0.3% of annual Service fees for each period of 30 or more consecutive minutes of downtime; provided that no more than one such credit will accrue per day. Downtime shall begin to accrue as soon 141
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as City (with notice to Contractor) recognizes that downtime is taking place, and continues until the availability of the Services is restored. In order to receive downtime credit, City must notify Contractor in writing within 24 hours from the time of downtime, and failure to provide such notice will forfeit the right to receive downtime credit. Such credits may not be redeemed for cash and shall not be cumulative beyond a total of credits for one (1) week of Service Fees in any one (1) calendar month in any event.

Contractor will only apply a credit to the month in which the incident occurred. Contractor’s blocking of data communications or other Service in accordance with its policies shall not be deemed to be a failure of Company to provide adequate service levels under this Agreement.

Incident Management:

If any service issue should arise throughout the duration of service, all issue shall be marked and prioritized as follows:

1. Fatal (Complete degradation – thirty (30) minute response time during Support Hours (see Support Terms)). All users and critical functions affected.

2. Severe (significant degradation – ninety (90) minutes response time during Support Hours (see Support Terms)). Large percentage of users or critical functions affected.

3. Medium (limited degradation – three (3) hour response time during Support Hours (see Support Terms)). Limited number of users or non-critical functions affected. Business processes can continue.

4. Minor (small degradation – four (4) hour response time during Support Hours (see Support Terms)). One user affected. Business processes can continue.

Support Terms:

Contractor will provide support to City via electronic mail, chat, and over phone on a twenty-four (24) hour, seven (7) days a week basis (“Support Hours”).

City may initiate a helpdesk ticket during Support Hours by emailing [email protected].

Contractor will use commercially reasonable efforts to respond to all helpdesk tickets within one business day.

COMPENSATION AND RATES

Contractor shall be compensated according to the following rates/fees:

Services: Year 1 Year 2 Year 3 Year 4 Year 5
Base Platform $10,500 $10,500 $10,500 $10,500 $10,500
Service Capacity
(based on 17-20 simultaneously active
vehicles)
$34,000 $34,000 $34,000 $34,000 $34,000
Voice Package
(based on 17-20 simultaneously active
vehicles)
$6,120 $6,120 $6,120 $6,120 $6,120
Implementation Fee $0
Annual Total $50,620 $50,620 $50,620 $50,620 $50,620

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Miscellaneous Fees/Services: Fee
Travel – Airfare/Ground Cost + 10%
Accommodation/Meals Cost + 10%
On-site Integration and Training $150 per hour
Bespoke Customization works, as agreed between Contractor and City $150 per hour Additional Service Capacity $2000 per vehicle per year Additional Voice Package $360 per vehicle per year
Spare Multimodal Application (Under 10 Fixed Route Vehicles) $12,000 per year

Contractor will not initiate miscellaneous services unless written pre-approval has been provided by City.

These rates/fees represent the total cost for all Services provided under this Agreement, including labor, equipment, materials, costs and expenses, taxes, and overhead, to be paid for Services satisfactorily performed.

Total compensation, including expense reimbursement, shall not exceed:

CONTRACT TOTAL: $290,000

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EXHIBIT B
CONTRACTOR’S PROPOSAL

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Tiers - Vehicles in Service

Spare Platform fee billed Yearly
Fee billed Yearly
Up to 17 simultaneously active
vehicles (minimum)
US$2,000 per year for each vehicle (*Discounted from $3,500 per vehicle per year)

Item

Charge Rate

Travel – Airfare / Ground

Cost + 10%

Accommodation / Meals

Cost + 10%
ORDER FORM #SL-4457

The terms and conditions set out at sparelabs.com/msa (“Agreement”) apply to this Oder Form (“Order Form”) between SPARE LABS INC (“Company”) and City of Clovis as (“Customer”) with a place of business at 1033 Fifth Street, CA 93612, United States (collectively the “Parties” or individually a “Party”). The e ffective date of this Order Form is April 20, 2022 (“Order Form Effective Date”).

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, Company and Customer hereby agree as follows:

Services: Spare Platform (SaaS) with Spare Pooled OnDemand (“Spare Pooled OnDemand”), which manages, dispatches and handles bookings for pooled on-demand and scheduled transportation. (the “Service(s)”).

Service Fees:

US $10,500 Base Platform Fee, charged on an annual
basis.

Minimum 17 simultaneous active vehicles charged at
the rates below on a yearly basis.

Initial Term: 36 months, commencing on August 1,
2022. Yearly optional extensions available after July 31, 2025 to a maximum of 5 years.

Service Capacity:

Dedicated On-Demand Vehicles (vehicles owned or contracted by the agency):

Minimum 17 vehicles at the rates below. Includes access to the Spare Driver app, Spare Platform administration panel, system administrator training, and Spare Open API. Spare charges for the maximum simultaneously active vehicles in service during the day, not for each vehicle in the fleet. Customer will be charged according to the following schedule, on a yearly basis.
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Implementation Services: Company will use commercially reasonable efforts to provide Customer the services described in the Statement of Work (“SOW”), and Customer shall pay Company the Implementation Fee (as defined below), in advance, in accordance with the terms herein.

Implementation Fee (one-time): US$0
(*discounted from $10,000)

Miscellaneous Charges: Spare Labs will not initiate these miscellaneous costs, unless written pre -approval has been provided by the Customer.

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On-site integration and training US $150/hr
Bespoke Customization works, as agreed between
Spare and Customer

US $150/hr

Voice Package (optional)
Includes:
- A phone call notification feature for Spare Platform that sends an automated phone call notification to riders (a.k.a. “Spare Automated Phone Notifications”)
- A voice-over-internet protocol (VOIP) rider calling feature embedded in the Spare Driver iOS and Android applications (a.k.a. “Spare Driver-Rider VOIP”)
- An integrated-voice-response (IVR) feature that collects card payment information from users over-the-phone using an automated phone call mechanism that is triggered from the Spare Platform web -portal (a.k.a. “Spare Pay IVR”)

Item Charge Rate
Voice package (per vehicle) – Up to 20 active
vehicles
$30/vehicle/month
(*discounted from $70/month)

Spare Multimodal Application (optional)
Under 10 Fixed Route Vehicles, $1k/month for Multimodal Trip Planning. (*discounted from $5K/month for 50 routes)

Additional Terms:

By signing this Order Form, you agree to: (a) purchase the products and services pursuant to the terms and fees set forth herein; (b) pay the Services Fees (and applicable sales and use taxes) and authorize Company to submit invoices for such payment; and (c) be bound by the terms and conditions in the Agreement. This Order Form will renew as set forth in the Terms, unless expressly stated otherwise herein.

Note that discounted pricing is valid until May 31, 2022

IN WITNESS WHEREOF, the Parties hereto have executed this Order Form as of the Order Form Effective Date.

Spare Labs Inc

By
Name:

Title:

City of Clovis

By
Name:

Title:

Email(s) for sending invoices to and special invoicing instructions:

Nick Chin <[email protected]> Bethany Berube <[email protected]> 147
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EXHIBIT A

Statement of Work

Provisioning of Administrator User Accounts
Company will supply administrative user accounts with proper privileges to administrators of the Spare Platform system, as may be agreed between Company and Customer. Users and customers of Spare Platform are bound by Spare Platform terms, as outlined at https://sparelabs.com/en/legal, and Spare Open API terms, as outlined at https://sparelabs.com/docs.

Customer Training (On-site or via Webinar)
Company will supply administrator training through a two-hour training course via webinar. Training can be set at a time convenient for Customer, as may be agreed between Company and Customer.

Supply Service Documentation
Company will supply documentation on the Spare Platform, including the web-based administration panel, the Spare Open API, and the Spare Driver app, as may be agreed between Company and Customer.

Service Provisioning
Spare Labs will deploy the Spare Platform with the Spare Pooled OnDemand (Spare Driver app, Spare Rider app, Spare Open API, and Spare Platform administration panel), and Spare Smart Matching and Dispatching Algorithm (Spare Engine) on an independent, secure, and scalable datacenter and web server system with disaster recovery capability, as may be agreed between Spare Labs and Customer.

EXHIBIT B

Payment Schedule

Payment Schedule Milestone
1 Base Platform Fee charged upon contract signing. Company to invoice Customer the following at the beginning of service launch on August 1, 2022:
- Services Fees and base Service Capacity for the current year

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19 Spare Master "Software as a Service"
Agreement
Last Modified: February 17, 2021
THIS SPARE MASTER “SOFTWARE AS A SERVICE” AGREEMENT Agreement (“Agreement”) is made and entered into between SPARE LABS INC (“Company”) with a place of business at Suite 810, 815 W Hastings St, Vancouver, BC V6C 1B4, Canada, and customer stated in the applicable Order Form (“Customer”) (individually a “Party”; collectively, the “Parties”).

By agreeing to an Order Form referencing this Agreement or by accessing or using the Services offered by the Company, the Customer is confirming that the Customer has read, understood and accepted this Agreement. This Agreement can be updated from time to time in accordance with Section 2.5 below. Customer is responsible for regularly reviewing the most current version of this Agreement, which is published at: sparelabs.com/msa. When the Company changes this Agreement, Company will update the “Last Modified” date above.

RECITALS

1. WHEREAS, Company is in the business of providing software as a service with respect to certain business application software and related services; and

2. WHEREAS, Customer desires to utilize such applications on a “software as a service” basis, and both Parties desire that Company provide the services required and desire that all of the rights, duties, and obligations of the Parties be governed in accordance with the terms of this Agreement.

NOW, THEREFORE, based on the foregoing facts and in consideration of the mutual covenants and conditions contained in this Agreement, Company and Customer hereby agree as follows:
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20 1. DEFINITIONS

1.1 Defined terms used in this Agreement shall have the meanings given in this Agreement, including in any applicable Order Form. 1.1.1 “Order Form” means a written document executed by the parties that specifies the Service, subscription period, Fees and any other additional commercial terms agreed by the parties; 1.1.2 “Services” means the subscription(s) pursuant to one or more Order Form(s) to the Company’s transportation software as a service offering described in greater detail at sparelabs.com; 1.1.3 “Term” has the meaning given to in section 6.1.

2. SAAS SERVICES AND SUPPORT

2.1 Company shall provide the Services and such other functions and responsibilities specified in this Agreement and any applicable Order Form, as they may be supplemented, enhanced, modified or replaced, and all updates thereto, during the Term pursuant to the terms of this Agreement.

2.2 Order Forms are binding on the parties only when executed by each party.

Customer’s right to use the Services during the Term shall be in accordance with any additional conditions, restrictions or parameters specified in the Order Form(s) executed by the Parties. Services specified under an Order Form shall be provided during the term of that Order Form.

2.3 Subject to the terms of this Agreement, Company will use commercially reasonable efforts to provide Customer the Services in accordance with the Service Level Terms attached hereto as Exhibit A. As part of the registration process, Customer will identify an administrative user name and password for the Company account. Company reserves the right to refuse registration of, or cancel passwords it deems inappropriate.

2.4 Subject to the terms hereof, Company will provide Customer with reasonable technical support in accordance with the terms set forth in Exhibit B.

2.5 Amendment. Company may change any part of this Agreement (including any terms or documents incorporated by reference in this Agreement) at any time by posting the revised terms on sparelabs.com/msa. It is important for Customer to review this Agreement before using Services and from time to time, though the 150
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21 Company will notify the Customer of any changes that, in Company’s sole discretion, materially impact this Agreement. The updated Agreement will be effective as of the time of posting, or on such later date as may be specified in the updated Agreement, and Customer’s continued use of the Services after any such changes are effective will constitute Customer’s consent to such changes.

2.6 Customer shall ensure that each deployment of the Customer’s service which incorporates the Service shall require any user of the Service to accept Company’s (i) terms of use as set out at https://sparelabs.com/en/terms-of-use/; and (ii) privacy policy as set out https://sparelabs.com/en/privacy-policy/.Customer may impose additional terms of use and privacy policy provided that they do not purport to override the foregoing.

3. RESTRICTIONS AND RESPONSIBILITIES

3.1 Customer will not, directly or indirectly: reverse engineer, decompile, disassemble or otherwise attempt to discover the source code, object code or underlying structure, ideas, know-how or algorithms relevant to the Services or any software, documentation or data related to the Services (“Software”); modify, translate, or create derivative works based on the Services or any Software (except to the extent expressly permitted by Company or authorized within the Services); use the Services or any Software for timesharing or service bureau purposes or otherwise for the benefit of a third; or remove any proprietary notices or labels. With respect to any Software that is distributed or provided to Customer for use on Customer premises or devices, Company hereby grants Customer a non- exclusive, non-transferable, non-sublicensable license to use such Software during the Term only in connection with the Services.

3.2 Customer represents, covenants, and warrants that Customer will use the Services only in compliance with all applicable laws and regulations. Customer hereby agrees to indemnify and hold harmless Company against any damages, losses, liabilities, settlements and expenses (including without limitation costs and attorneys’ fees) in connection with any claim or action that arises from an alleged violation of the foregoing or otherwise from Customer’s use of Services. Although Company has no obligation to monitor Customer’s use of the Services, Company may do so and may prohibit any use of the Services it believes may be (or alleged to be) in 151
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22 violation of the foregoing.

3.3 Customer Responsibilities. The successful operation of the Service is dependent on Customer use of proper procedures and systems and input of correct data.

Customer agrees that it shall have the sole responsibility for inputting, protecting and backing up their original data used in connection with the Service. The Customer is responsible for providing Spare Labs with the necessary information to appropriately integrate with the system and deliver all portions of the contract.

Customer is solely responsible for the accuracy and adequacy of the information and data that it furnishes to Spare Labs for use with the Service, and Spare Labs is not responsible for reductions in Service quality due to Customer action or inaction.

3.4 Customer shall be responsible for obtaining and maintaining any equipment and ancillary services needed to connect to, access or otherwise use the Services, including, without limitation, modems, hardware, servers, software, operating systems, networking, web servers and the like (collectively, “Equipment”). Customer shall also be responsible for maintaining the security of the Equipment, Customer account, passwords (including but not limited to administrative and user passwords) and files, and for all uses of Customer account or the Equipment with or without Customer’s knowledge or consent.

3.5 Customer shall comply with all applicable local, state, provincial, federal and foreign laws in using the Service.

3.6 Customer is solely responsible for (i) providing terms of service in respect of use of the Service by Customer’s end users (which shall be an agreement solely between Customer and such end user); and (ii) obtaining the requisite permission from end users for the use, storage and processing of their personal information by Company through the provision of the Services.

4. CONFIDENTIALITY; PROPRIETARY RIGHTS

4.1 Each party (the “Receiving Party”) understands that the other party (the “Disclosing Party”) has disclosed or may disclose business, technical or financial 152
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23 information relating to the Disclosing Party’s business (hereinafter referred to as “Proprietary Information” of the Disclosing Party). Proprietary Information of Company includes non-public information regarding features, functionality and performance of the Service. Proprietary Information of Customer includes non- public data provided by Customer to Company to enable the provision of the Services (“Customer Data”). The Receiving Party agrees: (i) to take reasonable precautions to protect such Proprietary Information, and (ii) not to use (except in performance of the Services or as otherwise permitted herein) or divulge to any third person any such Proprietary Information. The Disclosing Party agrees that the foregoing shall not apply with respect to any information after five (5) years following the disclosure thereof or any information that the Receiving Party can document (a) is or becomes generally available to the public, or (b) was in its possession or known by it prior to receipt from the Disclosing Party, or (c) was rightfully disclosed to it without restriction by a third party, or (d) was independently developed without use of any Proprietary Information of the Disclosing Party or (e) is required to be disclosed by law.

4.2 Customer shall own all right, title and interest in and to the Customer Data. Customer Data shall include all data entered by end users through the Service at Customer’s request, but shall not include “tombstone” information of such end users such as user name, name, telephone number, email address and password (“Tombstone Information”). Company shall own and retain all right, title and interest in and to (a) the Services and Software, all improvements, enhancements or modifications thereto, (b) any software, applications, inventions or other technology developed in connection with Implementation Services or support, and (c) all intellectual property rights related to any of the foregoing; and (d) all Tombstone Information.

4.3 Notwithstanding anything to the contrary, Company shall have the right collect and analyze data and other information relating to the provision, use and performance of various aspects of the Services and related systems and technologies (including, without limitation, information concerning Customer Data and data derived therefrom), and Company will be free (during and after the term hereof) to (i) use such information and data to improve and enhance the Services and for other development, diagnostic and corrective purposes in connection with the Services and other Company offerings, and (ii) disclose such data solely in aggregate or other 153
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24 de-identified form in connection with its business. No rights or licenses are granted except as expressly set forth herein.

5. PAYMENT OF FEES

5.1 Customer will pay Company the then applicable fees described in any applicable Order Form for the Services with the terms therein (the “Fees”). If Customer’s use of the Services exceeds the Service Capacity set forth on the Order Form or otherwise requires the payment of additional fees (per the terms of this Agreement), Customer shall be billed for such usage and Customer agrees to pay the additional fees in the manner provided herein. Company reserves the right to change the Fees or applicable charges and to institute new charges and Fees at the end of the Term or then-current renewal term, upon thirty (30) days prior notice to Customer (which may be sent by email). If Customer believes that Company has billed Customer incorrectly, Customer must contact Company no later than 60 days after the closing date on the first billing statement in which the error or problem appeared, in order to receive an adjustment or credit. Inquiries should be directed to Company’s customer support department. All Fees are non-refundable once paid.

5.2 Company may choose to bill through an invoice, in which case, full payment for invoices issued in any given month must be received by Company thirty (30) days after the mailing date of the invoice. Unpaid amounts are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all expenses of collection and may result in immediate termination of Service. Customer shall be responsible for all taxes associated with Services other than Canadian taxes based on Company’s net income.

5.3 Company will be billed according to payment schedules set out in any applicable Order Form.

6. TERM AND TERMINATION

6.1 Subject to earlier termination as provided below, this Agreement will commence on the date you agree to an Order Form, and will continue in effect for the term 154
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25 described in such Order Form (the “Term”). Except as expressly stated otherwise in the applicable Order Form, each Order Form will automatically renew for subsequent one-year renewal periods unless the Customer or Company gives written notice of non-renewal at least sixty (60) days prior to the end of the then-current term.

Notwithstanding the foregoing, in no event shall the term of this Agreement or any Order Form exceed the term agreed to in writing between Company and Customer.

6.2 In addition to any other remedies it may have, either party may also terminate this Agreement upon thirty (30) days’ notice (or without notice in the case of nonpayment), if the other party materially breaches any of the terms or conditions of this Agreement. Customer will pay in full for the Services up to and including the last day on which the Services are provided. All sections of this Agreement which by their nature should survive termination will survive termination, including, without limitation, accrued rights to payment, confidentiality obligations, warranty disclaimers, and limitations of liability.

7. WARRANTY AND DISCLAIMER

7.1 Company shall use reasonable efforts consistent with prevailing industry standards to maintain the Services in a manner which minimizes errors and interruptions in the Services and shall perform the Implementation Services in a professional and workmanlike manner. Services may be temporarily unavailable for scheduled maintenance or for unscheduled emergency maintenance, either by Company or by third-party providers, or because of other causes beyond Company’s reasonable control, but Company shall use reasonable efforts to provide advance notice in writing or by e-mail of any scheduled service disruption. HOWEVER,

COMPANY DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED OR ERROR FREE; NOR DOES IT MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM USE OF THE SERVICES. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION, THE SERVICES AND IMPLEMENTATION SERVICES ARE PROVIDED “AS IS”

AND COMPANY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT

NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

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26 8. INDEMNITY

8.1 Company shall hold Customer harmless from liability to third parties resulting from infringement by the Service of any United States patent or any copyright or misappropriation of any trade secret, provided Company is promptly notified of any and all threats, claims and proceedings related thereto and given reasonable assistance and the opportunity to assume sole control over defense and settlement; Company will not be responsible for any settlement it does not approve in writing. The foregoing obligations do not apply with respect to portions or components of the Service (i) not supplied by Company, (ii) made in whole or in part in accordance with Customer specifications, (iii) that are modified after delivery by Company, (iv) combined with other products, processes or materials where the alleged infringement relates to such combination, (v) where Customer continues allegedly infringing activity after being notified thereof or after being informed of modifications that would have avoided the alleged infringement, or (vi) where Customer’s use of the Service is not strictly in accordance with this Agreement. If, due to a claim of infringement, the Services are held by a court of competent jurisdiction to be or are believed by Company to be infringing, Company may, at its option and expense (a) replace or modify the Service to be non-infringing provided that such modification or replacement contains substantially similar features and functionality, (b) obtain for Customer a license to continue using the Service, or (c) if neither of the foregoing is commercially practicable, terminate this Agreement and Customer’s rights hereunder and provide Customer a refund of any prepaid, unused fees for the Service.

9. LIMITATION OF LIABILITY

9.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT FOR BODILY INJURY

OF A PERSON, COMPANY AND ITS SUPPLIERS (INCLUDING BUT NOT LIMITED TO ALL

EQUIPMENT AND TECHNOLOGY SUPPLIERS), OFFICERS, AFFILIATES,

REPRESENTATIVES, CONTRACTORS AND EMPLOYEES SHALL NOT BE RESPONSIBLE OR

LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR TERMS

AND CONDITIONS RELATED THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY: (A) FOR ERROR OR INTERRUPTION OF USE OR FOR

LOSS OR INACCURACY OR CORRUPTION OF DATA OR COST OF PROCUREMENT OF 156
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27 SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY OR LOSS OF BUSINESS; (B) FOR ANY INDIRECT, EXEMPLARY, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES; (C) FOR ANY MATTER BEYOND COMPANY’S REASONABLE CONTROL; OR (D) FOR ANY

AMOUNTS THAT, TOGETHER WITH AMOUNTS ASSOCIATED WITH ALL OTHER

CLAIMS, EXCEED THE FEES PAID BY CUSTOMER TO COMPANY FOR THE SERVICES UNDER THIS AGREEMENT IN THE 12 MONTHS PRIOR TO THE ACT THAT GAVE RISE TO

THE LIABILITY, IN EACH CASE, WHETHER OR NOT COMPANY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

10. MISCELLANEOUS

10.1 If any provision of this Agreement is found to be unenforceable or invalid, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement will otherwise remain in full force and effect and enforceable. This Agreement is not assignable, transferable or sublicensable by Customer except with Company’s prior written consent. Company may transfer and assign any of its rights and obligations under this Agreement without consent. This Agreement is the complete and exclusive statement of the mutual understanding of the parties and supersedes and cancels all previous written and oral agreements, communications and other understandings relating to the subject matter of this Agreement, and that all waivers and modifications must be in a writing signed by both parties, except as otherwise provided herein. No agency, partnership, joint venture, or employment is created as a result of this Agreement and Customer does not have any authority of any kind to bind Company in any respect whatsoever. In any action or proceeding to enforce rights under this Agreement, the prevailing party will be entitled to recover costs and attorneys’ fees. All notices under this Agreement will be in writing and will be deemed to have been duly given when received, if personally delivered; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; the day after it is sent, if sent for next day delivery by recognized overnight delivery service; and upon receipt, if sent by certified or registered mail, return receipt requested. This Agreement shall be governed by the laws of the Province of British Columbia, Canada without regard to its conflict of laws provisions. Customer otherwise agrees to reasonably cooperate with Company to serve as a reference account upon request.
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28 EXHIBIT A
Service Level Terms
General Service Level Terms and Downtime Management:

The Services shall be available 99.9%, measured monthly, excluding scheduled maintenance. If Customer requests maintenance during these hours, any uptime or downtime calculation will exclude periods affected by such maintenance. Further, any downtime resulting from outages of third party connections or utilities or other reasons beyond Company’s control will also be excluded from any such calculation.

Customer's sole and exclusive remedy, and Company's entire liability, in connection with Service availability shall be that for each period of downtime lasting longer than one hour, Company will credit Customer 0.3% of annual Service fees for each period of 30 or more consecutive minutes of downtime; provided that no more than one such credit will accrue per day. Downtime shall begin to accrue as soon as Customer (with notice to Company) recognizes that downtime is taking place, and continues until the availability of the Services is restored. In order to receive downtime credit, Customer must notify Company in writing within 24 hours from the time of downtime, and failure to provide such notice will forfeit the right to receive downtime credit. Such credits may not be redeemed for cash and shall not be cumulative beyond a total of credits for one (1) week of Service Fees in any one (1) calendar month in any event. Company will only apply a credit to the month in which the incident occurred. Company’s blocking of data communications or other Service in accordance with its policies shall not be deemed to be a failure of Company to provide adequate service levels under this Agreement.

Incident Management:

If any service issue should arise throughout the duration of service, all issue shall be marked and prioritized as follows:

1. Fatal (Complete degradation -- 30 Minute response time during Support Hours (see Exhibit B)). All users and critical functions affected.

2. Severe (significant degradation -- 90 Minutes response time during Support Hours (see Exhibit B)). Large percentage of users or critical functions affected. 158
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29 3. Medium (limited degradation -- 3 hour response time during Support Hours (see Exhibit B)). Limited number of users or non-critical functions affected. Business processes can continue.

4. Minor (small degradation -- 4 hour response time during Support Hours (see Exhibit B)). One user affected. Business processes can continue.

EXHIBIT B
Support Terms
Company will provide support to Customer via electronic mail, chat, and over phone on a twenty-four (24) hour, seven (7) days a week basis (“Support Hours”).

Customer may initiate a helpdesk ticket during Support Hours by emailing [email protected].

Company will use commercially reasonable efforts to respond to all helpdesk tickets within one business day.

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30 EXHIBIT C

INSURANCE REQUIREMENTS

Prior to commencement of the Services, Contractor shall take out and maintain at its own expense the insurance coverage required by this Exhibit C. Contractor shall cause any subcontractor with whom Contractor contracts for the performance of Services pursuant to this Agreement to take out and maintain equivalent insurance coverage. Said insurance shall be maintained at all times during Contractor’s performance of Services under this Agreement, and for any additional period specified herein. All insurance shall be placed with insurance companies that are licensed and admitted to conduct business in the State of California and are rated at a minimum with an "A:VII" by A.M. Best Company, unless otherwise acceptable to the City.

a. Minimum Limits of Insurance. Contractor shall maintain the following types of insurance with limits no less than specified:

(i) General Liability Insurance (including operations, products and completed operations coverages) in an amount not less than two million dollars ($2,000,000.00) per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this project/location (ISO CG 25 03 or 25 04) or the general aggregate limit shall be twice the required occurrence limit.

(ii) Worker’s Compensation Insurance as required by the State of California.

(iii) Automobile Liability Insurance in an amount not less than one million dollars ($1,000,000.00) per accident for bodily injury and property damage.

(iv) Umbrella or Excess Liability. In the event Contractor purchases an Umbrella or Excess insurance policy(ies) to meet the “Minimum Limits of Insurance,” this insurance policy(ies) shall “follow form” and afford no less coverage than the primary insurance policy(ies). In addition, such Umbrella or Excess insurance policy(ies) shall also apply on a primary and non-contributory basis for the benefit of the City, its officers, officials, employees, agents and volunteers.

If Contractor maintains higher limits than the minimums shown above, the City shall be entitled to coverage at the higher limits maintained.

b. Other Insurance Provisions. The general liability policy is to contain, or be endorsed to contain, the following provisions:

(i) The City, its officers, officials, employees, agents, and volunteers are to be covered as insured's with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on behalf of the Contractor; and with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts or equipment furnished in connection with such work or operations. General liability coverage can be provided in the form of an endorsement to the Contractor’s insurance (at least as broad as ISO Form 20 10 11 85 or both CG 20 10, CG 20 26, CG 20 33 or CG 20 38; and CG 20 37 forms if later revisions used). 160
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31 (ii) For any claims related to the Services performed pursuant to this Agreement, the Contractor’s insurance coverage shall be primary insurance as respects the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, agents, or volunteers shall be excess of the Contractor’s insurance and shall not contribute with it.

(iii) Each insurance policy required by this section shall be endorsed to state that the City shall receive written notice at least thirty (30) days prior to the cancellation, non-renewal, or material modification of the coverages required herein.

(iv) Contractor grants to the City a waiver of any right to subrogation which any insurer of said Contractor may acquire against the City by virtue of the payment of any loss under such insurance.

Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer.

(v) Any deductibles or self-insured retentions must be declared to and approved by the City of Clovis Risk Services. The City may require the Contractor to purchase coverage with a lower deductible or retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.

c. Evidence of Coverage. Contractor shall deliver to City written evidence of the above insurance coverages, including the required endorsements prior to commencing Services under this Agreement; and the production of such written evidence shall be an express condition precedent, notwithstanding anything to the contrary in this Agreement, to Contractor’s right to be paid any compensation under this Agreement. City's failure, at any time, to object to Contractor’s failure to provide the specified insurance or written evidence thereof (either as to the type or amount of such insurance), shall not be deemed a waiver of City's right to insist upon such insurance later.

d. Maintenance of Insurance. If Contractor fails to furnish and maintain the insurance required by this section, City may (but is not required to) purchase such insurance on behalf of Contractor, and the Contractor shall pay the cost thereof to City upon demand, and City shall furnish Contractor with any information needed to obtain such insurance. Moreover, at its discretion, City may pay for such insurance with funds otherwise due Contractor under this Agreement.

e. Subcontractors. If the Contractor should subcontract all or any portion of the work to be performed in this Agreement, the Contractor shall cover the subcontractor, and/or require each subcontractor to adhere to all the requirements contained herein. Similarly, any cancellation, lapse, reduction or change of subcontractor’s insurance shall have the same impact as described above.

f. Special Risks or Circumstances. The City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

g. Indemnity and Defense. Except as otherwise expressly provided, the insurance requirements in this section shall not in any way limit, in either scope or amount, the indemnity and defense obligations separately owed by Contractor to City under this Agreement. 161
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32 EXHIBIT D

SIGNING AUTHORITY

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TO: Mayor and City Council
FROM: Planning and Development Services Department
DATE: May 16, 2022
SUBJECT: Planning and Development Services – Approval – Res. 22-___, Adopt a list of projects funded by SB1: The Road Repair and Accountability Act.

ATTACHMENTS: 1. Resolution 22-__

2. Vicinity Map

CONFLICT OF INTEREST
None.

RECOMMENDATION
For the City Council to approve a resolution to adopt a list of projects funded by Senate Bill (SB) 1: The Road Repair and Accountability Act.

EXECUTIVE SUMMARY
Prior to receiving an apportionment of Road Maintenance and Rehabilitation Account (RMRA) funds from the Controller in a fiscal year, a city or county must submit to the Califor nia Transportation Commission a list of projects proposed to be funded with these funds. All projects proposed to receive funding must be adopted by resolution by the applicable city council or county board of supervisors at a regular public meeting [SHC 2034(a)(1)].

Pursuant to SHC Section 2034(a)(1) a resolution of the list for SB1 funding is submitted for adoption. The project list submitted is for eight street sections that have been called out in the 2022-2023 Five-year Community Investment Program (CIP), specifically the 20 22-2023 fiscal year. The eight Projects are:

1) Gettysburg Avenue Street Improvements from Sierra Vista Parkway to Clovis Avenue 2) Ashlan Avenue Street Improvements from DeWolf to Locan Avenues 3) Clovis Avenue Street Improvements from Shepherd to Teague Avenues 4) Barstow Avenue Street Improvements from Villa to Minnewawa Avenues 5) Armstrong Avenue Street Improvements from Bullard to Sierra Avenues 6) Barstow Avenue Street Improvements from Sunnyside to Fowler Avenues 7) Bullard Avenue Street Improvements from Villa to Minnewawa Avenues 8) Sunnyside Avenue Street Improvements from Barstow to Shaw Avenues 163
AGENDA ITEM NO. 10.

BACKGROUND
On April 28, 2017, the Governor signed Senate Bill (SB) 1 (Beall, Chapter 5, Statutes of 2017), which is known as the Road Repair and Accountability Act of 2017. To address basic road maintenance, rehabilitation, and critical safety needs on both the state highway and local streets and road system, SB 1: increases per gallon fuel excise taxes; increases diesel fuel sales taxes and vehicle registration fees; and provides for inflationary adjustments to tax rates in future years.

Beginning November 1, 2017, the State Controller (Controller) started to deposit various portions of this new funding into the newly created Road Maintenance and Rehabilitation Account (RMRA). A percentage of this new RMRA funding will be apportioned by formula to eligible cities and counties pursuant to Streets and Highways Code (SHC) Section 2032(h) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and roads system.

SB 1 emphasizes the importance of accountability and transparency in the delivery of California’s transportation programs. Therefore, to be eligible for RMRA funding, statute requires cities and counties to provide basic annual RMRA project reporting to the California Transportation Commission (Commission).

Prior to receiving an apportionment of RMRA funds from the Controller in a fiscal year, a city or county must submit to the Commission a list of projects proposed to be funded with these funds pursuant to an adopted resolution by the city council at a regular public meeting [SHC 2034(a)(1)].

Pursuant to SHC Section 2034(a)(1) a resolution of the list for SB1 funding is submitted for adoption. The project list submitted is for eight street sections that have been called out in the 2022-2023 Five-year Community Investment Program (CIP), specifically the 2022 -2023 fiscal year. The eight Projects are:

1) Gettysburg Avenue Street Improvements from Sierra Vista Parkway to Clovis Avenue 2) Ashlan Avenue Street Improvements from DeWolf to Locan Avenues 3) Clovis Avenue Street Improvements from Shepherd to Teague Avenues 4) Barstow Avenue Street Improvements from Villa to Minnewawa Avenues 5) Armstrong Avenue Street Improvements from Bullard to Sierra Avenues 6) Barstow Avenue Street Improvements from Sunnyside to Fowler Avenues 7) Bullard Avenue Street Improvements from Villa to Minnewawa Avenues 8) Sunnyside Avenue Street Improvements from Barstow to Shaw Avenues

The projects on the list have been chosen by using the City of Clovis Pavement Management System and are programed in the CIP five-year budget.

FISCAL IMPACT
The estimated cost for the eight projects submitted for the SB1 list is $7.47 million. The projects will be included in the 2022-2023 CIP budget. The SB1 funding the city has received in previous years along with the estimated amount we will receive through 2022-2023 is enough funding to cover the estimated cost of the eight proj ects. The City of Clovis will receive an estimated 164
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$2,523,500 in RMRA funding in Fiscal Year 2021 -22 and an estimated $2,777,000 in RMRA funding in Fiscal Year 2022-23 from SB 1. The estimated funding received in subsequent years is expected to increase by a small percentage each year.

REASON FOR RECOMMENDATION
To be eligible to receive the City of Clovis’ apportionment of RMRA funding from the State Controller this fiscal year.

ACTIONS FOLLOWING APPROVAL
Staff will submit the SB1 project list and resolution to the California Transportation Commission pursuant to SHC Section 2034(a)(1).

Prepared by: Thad Avery, Supervising Civil Engineer

Reviewed by: City Manager _AH_

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ATTACHMENT 1
RESOLUTION 22-__

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF CLOVIS TO ADOPT A LIST OF PROJECTS FUNDED BY
SB 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT

WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 in order to address the significant multi -modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Clovis are aware of the projects proposed for funding and which projects have been completed each fiscal year; and
WHEREAS, the City of Clovis must include a list of all projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, in the City of Clovis budget, which must include a description and the location of each propos ed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City of Clovis, will receive an estimated $2, 777,000 in RMRA funding in Fiscal Year 2022-23 from SB 1; and
WHEREAS, the City of Clovis used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the community’s priorities for transportation investment; and WHEREAS, the funding from SB 1 will help the City of Clovis maintain and rehabilitate 217 streets, 18 bridges, add active transportation infrastructure throughout the City of Clovis this year and hundreds of similar projects into the future; and WHEREAS, the 2016 California Statewide Local Streets and Roads Needs Assessment found that the City of Clovis’ streets and roads are in an “good” condition and this revenue will help us increase the overall quality of our road system and over the next decade will bring our streets and roads into a “excellent” condition; and
WHEREAS, without revenue from SB 1, the City of Clovis, would have otherwise been postponing projects throughout the community; and
WHEREAS, modernizing the local street and road system provides well -paying construction jobs and boosts local economies; and
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WHEREAS, police, fire, and emergency medical services all need safe reliable roads to react quickly to emergency calls and a few minutes of delay can be a matter of life and death; and
WHEREAS, maintaining and preserving the local street and road system in good condition will reduce drive times and traffic congestion, improve bicycle safety, and make the pedestrian experience safer and more appealing, which leads to reduce vehicle emissions helping the State achieve its air quality and greenhouse gas emissions reductions goals; and WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive benefit statewide.

NOW, THEREFORE BE IT RESOLVED AND ORDERED, as follows:

1. The foregoing recitals are true and correct.

2. The City of Clovis is adoptin g the following list of projects planned to be funded in fiscal year 2022-2023 with Road Maintenance and Rehabilitation Account revenues:

a. Gettysburg Avenue Street Improvements from Sierra Vista Parkway to Clovis Avenue. The project will include resurfaci ng the street and will increase the useful life of the street by 20 years. It is budgeted in the 2020-2021 & 2022-2023 fiscal years with anticipated construction in 2023.
b. Ashlan Avenue Street Improvements from DeWolf Avenue to Locan Avenue. The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 2021 -2022 & 2022 -2023 fiscal years with anticipated construction in 2022.
c. Barstow Avenue Street Improvements from Villa Avenue to Minnewawa Avenue.

The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 2021 -2022 & 2022-2023 fiscal years with anticipated construction in 2023.
d. Clovis Avenue Street Improvements from Shepherd Avenue to Teague Avenue. The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 2021 -2022 & 2022 -2023 fiscal years with anticipated construction in 2023.
e. Armstrong Avenue Street Improvements from Bullard Avenue to Sierra Avenue. The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 202 2-2023 & 2023 -2024 fiscal years with anticipated construction in 2024.
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f. Barstow Avenue Street Improvements from Sunnyside Avenue to Fowler Avenue.

The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 202 2-2023 & 2023-2024 fiscal years with anticipated construction in 2024.
g. Bullard Avenue Street Improvements from Villa Avenue to Minnewawa Avenue. The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budg eted in the 2022 -2023 & 2023 -2024 fiscal years with anticipated construction in 2024.
h. Sunnyside Avenue Street Improvements from Barstow Avenue to Shaw Avenue.

The project will include resurfacing the street and will increase the useful life of the street by 20 years. It is budgeted in the 2022 -2023 & 2023-2024 fiscal years with anticipated construction in 2024.

* * * * *

The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit.

AYES:

NOES:

ABSENT:

ABSTAIN:

DATED: May 16, 2022

______________________________ ______________________________ Mayor City Clerk

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AGENDA ITEM NO. 10.

TO: Mayor and City Council
FROM: Planning and Development Services
DATE: May 16, 2022
SUBJECT: Consider Approval – Res. 22-___, GPA2022-002, A request to amend the General Plan to redesignate approximately 2.51 acres from the Industrial classification to the Office classification for property located on the west side of N. Clovis Avenue, immediately north of Freeway 168.

City of Clovis, applicant.

Staff: Dave Merchen, City Planner
Recommendation: Approve

ATTACHMENTS: 1. Draft Resolution

CONFLICT OF INTEREST
None.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution recommending the approval of a general plan amendment redesignating the 2.51-acre project site from the I (Industrial) classification to the O (Office) classification.

EXECUTIVE SUMMARY
At its April 4, 2022, meeting, the City Council adopted a resolution initiating the subject general plan amendment application . The proposed amendment will correct an oversight or mapping error made by the City when it adopted the City -wide land use map in conjunction with 2014 General Plan update. If approved, the general plan amendment would allow the property owner to move forward with separate appli cations for a commercial development project on the site.

The Planning Commission consider ed this project at its April 28, 2022, meeting at which time the Commission recommended approval 3-0-2, with Commissioner Bedstead and Chair Hinkle absent.

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BACKGROUND

 Current General Plan Designation: Industrial
 Current Zoning: C-P (Commercial Professional)
 Lot Size: 2.51 acres
 Current Land Use: Vacant/undeveloped
 Adjacent Land Uses:
o North: Multi-Family
o South: Single-Family/undeveloped
o East: Clovis Avenue right of way
o West: Vacant/undeveloped
 Previous Entitlements: GPA1992-11, R1993-02

PROPOSAL AND ANALYSIS
The subject property is 2.51 acres in size, located on the west side of N. Clovis Avenue, immediately north of Freeway 168. The property has street frontage along both Clovis Avenue and Rogers Avenue, the latter of which is a local street running along the site’s western boundary. The Dry Creek Business Park is generally located to the west of the subject property, and uses on surrounding parc els include apartments, a single-family home, and vacant properties.

The owner of the subject property is working with staff to evaluate the submittal requirements for a potential commercial development project on the site. In researching the property, staff identified a conflict between the existing general plan designation (Industrial) and the existing zoning (Commercial-Professional). Further investigation indicated that the City -wide land use map adopted in conjunction with the 2014 General Plan redesignated the site from Office to Industrial, despite earlier site-specific approvals which had established the Office designation on the site.

Previous Approvals Affecting the Subject Property

In December of 1992, the Clovis City Council approved GPA1992-11, changing the general plan land use designation on the site from L (Low Density Residential) to O (Office). A few months later, Rezoning 1993 -02 was similarly approved to change the zoning from a combination of residential districts to the C-P (Commercial-Professional) district, which generally allows offices and other complimentary uses. The general plan ame ndment and rezoning applications approved in 1992 and 1993 were intended to prepare the site and the surrounding area for changes that would be brought about by the construction of Freeway 168. The commercial/office designations were viewed as more appropr iate for the property that would be located immediately adjacent to the new freeway. Though the owners were contemplating an office building at that time, no construction ever occurred on the site, and it has remained vacant.

2014 General Plan Update
When the 2014 General Plan land use map was adopted for the entire planning area , the land use designation shown for the subject parcel was I (Industrial). It appears that th e I (Industrial) designation for the adjacent planned industrial area, which is now de veloped as the Dry Creek 171
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Business Park, was simply extended onto the neighboring undeveloped properties in error. Staff contacted former Planning and Development Services Director Dwight Kroll for background on this matter. Mr. Kroll confirmed that the change to the I (Industrial) land use designation was an inadvertent mapping error, and the City’s intention was to see the site developed commercially, preferably with a multi-story building that would rise above the elevated freeway.

Because it was the C ity’s oversight that led to the application of the I ( Industrial) land use designation, the City Council authorized Staff to initiate the general plan amendment process to correct the error. If this application is approved, the property owner intends to pr oceed with separate applications to develop the site with a commercial project.

Findings for Approval of a General Plan Amendment
The findings to consider when making a decision on a general plan amendment application include:

1. The proposed amendment is internally consistent with goals, policies, and actions of the General Plan.

The proposed amendment would correct an oversight and/or mapping error that occurred in conjunction with the adoption of the 2014 General Plan land use map, whereby the then existing O (Office) land use designation was errantly changed to an I (Industrial) designation. The proposed change would reestablish the O (Office) designation on the site, which sits adjacent to existing residential uses. The proposed change will help to reestablish a land use pattern which is consistent with General Goal S -1 and Poli cy S-

3.4. Goal S-1: An environment in which minimized noise contributes to the public’s health, safety, and welfare. Policy S-3.4: Land use and traffic patterns. Discourage land use and traffic patterns that would expose sensitive land uses or noise -sensitive areas to unacceptable noise levels.

2. The proposed amendment would not be detrimental to the public interest, health, safety, convenience, or general welfare of the City.

The project is not detrimental to the public interest, health, safety, and convenience, or general welfare of the City. The proposal would reestablish the O (Office) land use designation on the site, which will reduce potential impacts associated with placing industrial uses on properties immediately adjacent to existing residential uses.

3. If applicable, the parcel is physically suitable (including absence of physical constraints, access, compatibility with adjoining land uses, and provision of utilities) for the requested/ anticipated project.

The proposed amendment would correct an oversight and/or mapping error that occurred in conjunction with the adoption of the 2014 General Plan land use map, whereby the then existing O (Office) land use designation was errantly cha nged to an I (Industrial) designation. The change would reestablish the O (Office) designation on the site, which 172
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sits adjacent to existing residential uses. The project site is physically suitable for the uses which are consistent with the O (Office) land use designation.

4. There is compelling reason for the amendment.

The City -wide land use map adopted in conjunction with the 2014 General Plan redesignated the site from O (Office) to I (Industrial), despite earlier site-specific approvals which had estab lished the O ( Office) designation on the site. The amendment would correct the error previously made by the City and provide consistency between the general plan designation and the C -P (Commercial-Professional) zone district. These actions will prepare the site for future commercial development.

Public Comment
A public notice was sent to area residents within 800 feet of the property boundaries and a neighborhood meeting was conducted . There were no attendees at the meeting and s taff has not received comments or concerns from the public upon finalization of this report.

The City published notice of this public hearing in The Business Journal on Wednesday, May 11, 2022.

Planning Commission Consideration
The Planning Commission considered the general plan amendment at its April 28, 2022 meeting at which time the Commission recommended approval 3-0-2, with Commissioner Bedstead and Chair Hinkle absent. No public testimony was offered , and the Commission did not have any questions relative to the project.

FISCAL IMPACT
The recommended change would correct an inconsistency in the subject property’s intended land use designation which was inadvertently changed as part of the update to the 2014 Clovis General Plan. The change would encourage development on the site which wo uld result in an overall positive fiscal impact.

REASON FOR RECOMMENDATION
The proposed amendment will correct an oversight or mapping error made by the City when it adopted the City-wide land use map in conjunction with 2014 General Plan update despite earlier site-specific approvals which had established the Office designation on the site . Amending the land use map to correct the earlier error and reestablish the O (Office) designation would result in a land use pattern that is consistent with the goals and policies of the General Plan.

ACTIONS FOLLOWING APPROVAL
None.

Prepared by: Dave Merchen, City Planner

Reviewed by: City Manager JH

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ATTACHMENT 1
DRAFT
RESOLUTION 22-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS APPROVING GENERAL PLAN AMENDMENT 2022-002 TO AMEND THE 2014 CLOVIS GENERAL PLAN LAND USE ELEMENT FOR APPROXIMATELY 2.51 ACRES LOCATED ON THE WEST SIDE OF N. CLOVIS AVENUE, IMMEDIATELY NORTH OF FREEWAY 168 AND FINDING THAT THE PROJECT IS EXEMPT FROM CEQA PURSUANT TO SECTION 15061(b)(3) OF

THE CEQA GUIDELINES

WHEREAS, City of Clovis, 1033 Fifth Street, Clovis CA, 93619, initiated an application for General Plan Amendment (GPA) 2022-002 to amend the land use designation on approximately 2.51 acres of property located on the west side of N. Clovis Avenue, immediately north of Freeway 168 (“Property”); and

WHEREAS, GPA2022-002 proposes to amend the 2014 Clovis General Plan Land Use Element for the Property from the I (Industrial) designation to the O (Office) designation; and

WHEREAS, GPA2022-002 will correct a mapping error and oversight made when the City prepared and adopted the City-wide land use map in conjunction with the 2014 General Plan Update; and

WHEREAS, GPA2022-002 is consistent with the intent and purpose of the General Plan; and

WHEREAS, the Planning Commission considered GPA2022-002 at a duly noticed public hearing on April 28, 2022, at which time the Planning Commission adopted a resolution recommending approval of the Project; and

WHEREAS, the City published notice of the public hearing in the Fresno Business Journal on May 4, 2022, mailed public notices to property owners within 800 feet of the Property ten (10) days prior to the City Council hearing, and otherwise posted notice of the public hearing according to applicable law; and

WHEREAS, a duly noticed public hearing was held on May 16, 2022; and

WHEREAS, the City Council considered the CEQA analysis outlined in the staff report and elsewhere in the Administrative Record and finds that there is no possibility the project could have a significant effect on the environment, exempting the project pursuant to CEQA Guidelines Section 15061(b)(3); and

WHEREAS, the City Council has had an opportunity to review and consider the entire Administrative Record relating to the Project, which is on file with the Department, and reviewed and considered those portions of the Administrative Record determined to be necessary to make an informed decision, including, but not necessarily limited to, the staff report, the written materials submitted with the request, and the verbal and written testimony and other evidence presented during the public hearing.

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AGENDA ITEM NO. 11.

NOW, THEREFORE, BASED UPON THE ENTIRE RECORD OF THE PROCEEDINGS, THE CITY COUNCIL RESOLVES AND FINDS AS FOLLOWS:

1. The Project satisfies the required findings for approval of a general plan amendment, as follows:

a. The GPA2022-002 is internally consistent with the goals, policies, and actions of the General Plan.

b. The GPA2022-002 would not be detrimental to the public interest, health, safety, convenience, or general welfare of the City.

c. The Property is physically suitable (including absence of physical constraints, access, compatibility with adjoining land uses, and provision of utilities) for the development of the Project.

d. There is a compelling reason for the amendment, namely, to correct the mapping error and oversight previously made by the City relative to establishing the land use designation on the property.

2. The City Council finds that there is no possibility the project could have a significant effect on the environment, exempting the project pursuant to CEQA Guidelines section 15061(b)(3).

3. The basis for the findings is detailed in the Mah 16, 2022 staff report, which is hereby incorporated by reference, the entire Administrative Record, as well as the evidence and comments presented during the public hearing.

4. GPA 2022-002 is hereby approved.

* * * * * *

The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit.

AYES:

NOES:

ABSENT:

ABSTAIN:

DATED: May 16, 2022

______________________________ ______________________________ Mayor City Clerk

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AGENDA ITEM NO. 11.

TO: Mayor and City Council
FROM: Public Utilities Department
DATE: May 16, 2022
SUBJECT: Consider Approval – Conduct Public Hearing and Close Election Regarding an Assessment Increase in Landscape Maintenance District No. 1.

Staff: Glenn Eastes, Assistant Public Utilities Director Recommendation: Approve
ATTACHMENTS: 1. Election Diagram Map: Benefit Zone 1

2. Election Diagram Map: Benefit Zone 5

CONFLICT OF INTEREST
None.

RECOMMENDATION

1. Conduct a public hearing to receive testimony regarding the assessment increase in Benefit Zones 1 and 5 within Landscape Maintenance District No. 1;

2. Accept ballots for the assessment increase election until the close of the public hearing;

3. State that the ballots will be tabulated on May 17, 2022, and May 18, 2022 if an additional day is needed, in the City of Clovis Police and Fire Headquarters located at 1233 Fifth Street starting at 8:00 AM, and that any interested person may attend and watch the tabulation process; and

4. Continue the public hearing to June 6, 2022 for the reporting of the election results.

EXECUTIVE SUMMARY
On February 14, 2022, Council authorized an election to increase the assessment s in Zones 1 and 5 for the fiscal year 2022/23 levy. Ballots have been mailed to all affected property owners with instructions that they must be returned by mail by 5:00 PM on May 16, 2022 or in person by the close of the public hearing to be held at the May 16, 20 22 Council Meeting. This public hearing is being held to hear all public comments regarding the proposed increases to LMD assessments and to close the election at the end of the hearing. The ballots will be tabulated in 176
AGENDA ITEM NO. 12.
the Police and Fire Headquarters beginning at 8:00 AM on May 17, 2022, and tabulation will be continued on May 18, 2022 if there is a need for an additional day. Any interested parties may attend and observe the tabulation. The results of the election will be reported back to Council on June 6, 2022.

Clovis Landscape Maintenance District (LMD) No. 1 is comprised of 47 Benefit Zones that consist of parks, street-side landscaping, neighborhood monuments, lighting, and neighborhood entries and roundabouts that benefit the properties within eac h of the zones. The properties in each zone are assessed to provide funding for landscape maintenance and the repair and replacement of monuments, lights, irrigation systems, entry features and park amenities.

Annually, City staff analyzes the revenues, expenses, and reserves of each Landscape Benefit Zone to determine assessment rates.

Benefit Zone 1 includes the street -side and street median landscaping located generally between Herndon Avenue and Shepherd Avenue. A map showing the properties assessed i n Zone 1 is included as Attachment 1.

The rates in Zone 1 have not increased since the previous election in 2004. Over the past few years, expenditures have exceeded revenue in Zone 1. It is recommended to increase the existing annual rate by $21.00, changing the annual rate from $78.50 to $99.50.

Benefit Zone 5 includes parks located generally south of Herndon Avenue between Sunnyside and Locan Avenue s. A map showing the properties assessed in Zone 5 is included as Attachment 2.

The rates in Zone 5 have not increased since the previous election in 2013. Over the past several years, expenditures have exceeded revenue in Zone 5. In 2016, a rate increase election was conducted but failed by a narrow margin. As a result, services were reduced to keep the fund balance from continuing to decline. In addition, some playground structures need to be replaced. It is recommended to increase the existing annual rate by $22.20, changing the annual rate from $50.10 to $72.30. This would allow sufficient funds to restore maintenance levels and replace the oldest playground structures.

BACKGROUND
There are currently 47 Benefit Zones within Landscape Maintenance District (LMD) No.1. These Benefit Zones were established to provide funding for specific landscape and lig hting benefits throughout the City. The properties that receive a specific benefit from those improvements are assessed in proportion to the benefit they receive. The first six zones cover the City’s LMD street and LMD park landscaping. Benefit Zones 1, 2, and 3 fund the City’s LMD street-side and street median landscaping. Benefit Zones 4, 5, and 6 fund the City’s LMD parks. Benefit Zones 7 through 45 are neighborhood -specific and include decorative neighborhood entries and/or decorative street lighting. Benefit Zone 11 is no longer used. Benefit Zones Southeast (SE) and Northwest (NW) are unique in that these zones fund all street landscaping, parks, and decorative features. Benefit Zone SE is Loma Vista and is generally located south of Bullard Avenue and east of Locan Avenue. Benefit Zone NW is Heritage Grove and is located north of Shepherd Avenue.
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AGENDA ITEM NO. 12.

The assessments for LMD Benefit Zones 1 through 6 do not have an annual escalation factor for rate increases because not all of the properties within these zones include an escalation authority in their property covenants. The assessments for LMD Benefit Zones 7 through NW include an annual escalation factor equal to the Consumer Price Index Increase (CPI) plus 2%.

If assessments need to be increased in Zones 1 through 6, or if they need to be increased more than CPI plus 2% in the other zones, it is necessary to hold an election of the affected property owners. The balloting is conducted per Proposition 218. Election results are determined by a simple majority of returned ballots, weighted by proposed assessment. Benefit zones are tabulated separately, and each benefit zone stands on its own.

The last increase to Benefit Zone 1 was approved in 2004. Over the last few years, revenues have not been keeping pace with expenditures and the funding is facing deficit conditions. The Bureau of Labor Statistics consumer price index suggests prices are 51% higher in 2022 when compared to prices in 2004. That would equate the 2004 rates of $78.50 to $118.75 today in Benefit Zone 1. The proposed rate increase of $99.50 is lower than that value.

The City held an election to increase assessments in Benefit Zone 5 in 2016, which failed by

50.12% of ballots. Reductions to service were implemented in Benefit Zone 5 and those measures have postponed the need for an assessment rate increase election. However, after 6 years, expenditures ar e surpassing revenues , even with reduced services . In addition, an increase is needed to restore and replace some of the aging park structures.

FISCAL IMPACT
There is no impact to the general fund. Costs will be paid by the LMD.

REASON FOR RECOMMENDATION
As required by law, the City Council must conduct a public hearing to allow the public to be heard regarding the assessment ballots , as well as to authorize staff to begin the ballot tabulation process.

ACTIONS FOLLOWING APPROVAL
The ballots cast during the election process, including the ballots turned in at this public hearing, will be tabulated on May 17, 2022 , in the Police and Fire Headquarters located at 1233 Fifth Street, Clovis, CA 93612, beginning at 8:00 AM. The results of the election will be p resented to Council on June 6, 2022.

Prepared by: Glenn Eastes, Assistant Public Utilities Director

Reviewed by: City Manager JH
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SHAW AVESHAW AVESHAW AVE

NEES AVENEES AVE

ASHLAN AVEASHLAN AVEASHLAN AVE

SIERRA AVESIERRA AVE

TEAGUE AVETEAGUE AVE

BARSTOW AVEBARSTOW AVEBARSTOW AVE

BULLARD AVEBULLARD AVE

HERNDON AVEHERNDON AVE

ALLUVIAL AVEALLUVIAL AVE

SHEPHERD AVESHEPHERD AVE

GETTYSBURG AVEGETTYSBURG AVEGETTYSBURG AVE

WILLOW AVE

WILLOW AVE

WINERY AVE

PEACH AVE PEACH AVE

PEACH AVE

MINNEWAWA AVE

MINNEWAWA AVE

VILLA AVE

CLOVIS AVE CLOVIS AVE CLOVIS AVE

SUNNYSIDE AVE

SUNNYSIDE AVE

FOWLER AVE FOWLER AVE

FOWLER AVE

ARMSTRONG AVE

ARMSTRONG AVEARMSTRONG AVE

TEMPERANCE AVE TEMPERANCE AVE

LOCAN AVE

LOCAN AVE

DE WOLF AVE

LEONARD AVE
DE WOLF AVEZone 1
O
LMD Zone 1
GENERAL ZONE 1 BOUNDARY

ASSESSED PARCELS
ATTACHMENT 1
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AGENDA ITEM NO. 12.

SHAW AVESHAW AVE

ASHLAN AVEASHLAN AVE

SIERRA AVE

BARSTOW AVEBARSTOW AVE

BULLARD AVE

HERNDON AVE

ALLUVIAL AVE

GETTYSBURG AVEGETTYSBURG AVE

SUNNYSIDE AVE

FOWLER AVE FOWLER AVE

ARMSTRONG AVEARMSTRONG AVE

TEMPERANCE AVE TEMPERANCE AVE

LOCAN AVE

DE WOLF AVE

LEONARD AVE
Zone 5
O
LMD Zone 5
PARK ZONE 5 BOUNDARY

ASSESSED PARCELS
ATTACHMENT 2
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AGENDA ITEM NO. 12.

TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Consider Approval – Res. 22-___, Adoption of the City of Clovis 2022 - 2023 Annual Action Plan for the expenditure of Community Development Block Grant Funds. (Continued from the May 9, 2022 meeting) Staff: Claudia Cazares, Management Analyst
Recommendation: Approve
ATTACHMENTS: 1. Resolution

2. 2022-2023 Annual Action Plan

CONFLICT OF INTEREST
None.

RECOMMENDATION
Consider adopting the City of Clovis 2022 -2023 Annual Action Plan for the expenditure of Community Development Block Grant Funds.

EXECUTIVE SUMMARY
The U.S. Department of Housing and Urban Development (HUD) requires the City adopt the attached 2022-2023 Annual Action Plan for identifying projects for the expenditure of Community Development Block Grant Funds.

BACKGROUND
As an entitlement city for the purpose of receiving Community Development Block Grant Funds from HUD, Clov is must adopt an Annual Action Plan to identify CDBG projects for the 202 2- 2023 fiscal year. Last year, City Council approved the five-year Consolidated Plan. Development of the Consolidated Plan required an extensive analysis of housing and community development needs for disadvantaged populations to be completed through community input and census data analysis. Staff conducted over 50 interviews with agencies and Clovis residents to identify gaps in services for disadvantaged populations. Additionally, s taff employed a consultant to analyze demographic data to determine the needs in the community. The analysis and input resulted in the following summary of needs by priority, as approved in the Consolidated Plan:

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High Priority Medium Priority
Job Creation/Retention Substance Abuse Services
ADA Sidewalk Improvements Micro Loans to Small Businesses Street/Alley Improvements More Educational Opportunities Homeless Services/Shelters Support Groups for Families of Fire Stations/Equipment Disabled
Code Enforcement Legal Services
Affordable Housing for Families/Seniors/Veterans Road Reconstruction Housing Rehabilitation Tenant/Landlord Fair Housing Jobs for Youth Parks/Recreational Facilities
Food Pantry Programs Substance Abuse Services
Programs for Foster Children Aging Out of System
Youth Counseling/Resource Center Low Priority
First-Time Homebuyer Programs Façade Improvements
Youth Centers Utility Improvements (Water/Sewer)
Community Centers

In order to be eligible for CDBG funding, projects must fall into one of the following categories:

1. Directly benefit low- and moderate-income persons.

2. Aid in the prevention and elimination of slums or blight.

3. Meet an urgent need.

Based on the identified needs, and the CDBG program regulations, the following projects were previously approved by City Council to be funded (at estimated amounts) over the five -year Consolidated Plan period:

5 Year Goals and Allocations
1 Goal Name Public Facility Improvements.

Goal
Description
The City of Clovis intends to utilize approximately $1,500,000 in CDBG funds for the purpose of acquisition, construction, reconstruction, rehabilitation, or installation of water system improvements, sewer systems improvements, street and drainage improvements, neighborhood facilities, solid waste facilities, and/or parks and recreation facilities. In addition, a portion of those funds will be used for the removal of architectural barriers including curb cuts, park improvements, and improvements to public buildings to meet ADA requirements. 2 Goal Name Preservation of Affordable Housing Units.

Goal
Description
The City of Clovis intends to utilize approximately $683,421.25 in CDBG funds for the purpose of providing rehabilitation services to LMI owner-occupied units. 3 Goal Name Job creation for low-income individuals.

Goal
Description
The City of Clovis intends to utilize approximately $250,000 in CDBG funds for the purpose of economic development. The funds will be used to promote commercial revitalization, business expansion, and/or job creation. 4 Goal Name Create a suitable living environment.

Goal
Description
The City of Clovis intends to utilize approximately $561,558.75 in CDBG funds for the purpose of providing code enforcement as a public service to LMI neighborhoods within Clovis.

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AGENDA ITEM NO. 13.
5 Goal Name CDBG administration.

Goal
Description
The City will continue to administer the CDBG program in compliance with program regulations and requirements. To ensure the effective use of limited CDBG funds, the City must allocate funding towards planning and monitoring of the related projects.

While this list meets many of the high priority needs identified through the consolidated planning process, some needs were not addressed with CDBG due to lack of funds. A s in years past, staff will seek out other resources to meet the needs in the community. For the 2022-2023 program year, HUD has allocated $715,051 to the City of Clovis. In addition, Clovis has CDBG project savings of $60,000 to allocate to 2022-2023 projects.

Through the process identified in the HUD -approved Citizen Participation Plan, a recommended list of priority projects was created. The selected pro jects will meet the goals of the Consolidated Plan to improve neighborhoods, create jobs, and enhance the quality of life for the citizens of Clovis. The recommended projects for the 2022 -2023 program year will improve infrastructure by making street/alley and trail improvements, increase policing in CDBG-eligible census tracts throughout Clovis, support microenterprise businesses, and continue to emphasize improvements to Clovis’ low- and moderate-income housing stock.

Staff recommends the proposed projects, for the 2022 -2023 program year , be funded as follows:

1. Housing Rehabilitation $ 125,000

2. Brookhaven/Rosebrook Alley Reconstruction $ 200,000

3. Gould Canal Trail: Peach-Minnewawa $ 139,784

4. Microenterprise $ 60,000

5. Area-Based Policing (Code Enforcement) $ 107,257

6. Administration $ 143,010

In addition to the projects listed above, staff recommends the following projects be included as contingency projects to be funded if additional funds become available during the year:

Housing Rehabilitation - $50,000
ADA Improvements - $300,000
Rosebrook/Brookfield Alley Reconstruction - $150,000
Brookfield/Cole Alley Reconstruction - $200,000

These projects, along with the availability of both the Consolidated Plan and Annual Action Plan, were advertised for public comment in The Business Journal on April 1, 2022, and also on the City of Clovis website and social media.

FISCAL IMPACT
A total of $715,051 in CDBG funds is available for 2022-2023. HUD distributes the funds on a reimbursement basis. The funds are included in the proposed 2022-2023 City of Clovis budget.

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REASON FOR RECOMMENDATION
HUD requires the City Council to adopt an Annual Action Plan each year. The recommended action meets HUD’s requirements to receive CDBG funds as an entitlement city.

ACTIONS FOLLOWING APPROVAL
Staff will submit the 2022-2023 Annual Action Plan to HUD. Staff will then begin operation of the 2022-2023 CDBG Program, and pro jects will be completed during the 2022-2023 fiscal year.

Prepared by: Claudia Cazares, Affordable Housing Management Analyst

Reviewed by: City Manager JH
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ATTACHMENT 1
RESOLUTION NO. 22-___

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS
ADOPTING THE 2022-2023 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ANNUAL ACTION PLAN

WHEREAS, the City Council of the City of Clovis is a U. S. Department of Housing and Urban Development (HUD) entitlement city for the purpose of receiving Community Development Block Grant funds; and

WHEREAS, HUD requires the City of Clovis to adopt an Annual Action Plan to identify projects for the 2022-2023 program year for use of Community Development Block Grant funds.

NOW, THEREFORE, BE IT RESOLVED that the City of Clovis approves and adopts the 2022-2023 Annual Action Plan.

* * * * *

The foregoing resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on May 16, 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

DATED: May 16, 2022

_____________________________ ______________________________ Mayor City Clerk
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Annual Action Plan
2022-2023
Clovis CitY. Council
Jose Flores, Mayor
Lynne Ashbeck, Mayor Pro Tern
Drew Bessinger
Vong Mouanoutoua
Bob Whalen
John Holt, City Manager
Andrew Haussler, Assistant City Manager
May 16, 2022
ATTACHMENT 2
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Annual Action Plan
2022
1 OMB Control No: 2506-0117 (exp. 09/30/2021)
Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)

1. Introduction
The Action Plan is a document submitted to HUD on an annual basis that serves as a comprehensive housing affordability strategy, community development plan, and submissions for funding under any of HUD’s entitlement formula grant programs.

As a CDBG Entitlement City, Clovis’ Community and Economic Development Department has developed a five-year strategic plan that identifies and prioritizes the future use of the City’s Community Development Block Grant (CDBG) funds. The five-year plan became effective July 1, 2021, and will end on June 30, 2026. This Annual Action Plan represents year two of the five-year plan.

In preparing the Consolidat ed Plan, the City utilized several methods to analyze the housing and community development needs of Clovis. Methods included, conducting interviews of community residents, stakeholders, community organizations, and multi -family unit property owners, analy zing U.S. census data, and utilizing information in several city and county planning documents. The City hosted community meetings, hearings and met with organizations as an effort to outreach to and encourage participation of all residents, particularly low - and moderate-income residents, elderly persons, and persons with disabilities. The purpose of the meetings was to inform the community about the Consolidated Plan process and to identify opportunities to improve collaborative efforts, eliminate service delivery gaps in order to develop and sustain decent and affordable housing, suitable living environments, and expanded community and economic opportunities.

2. Summarize the objectives and outcomes identified in the Plan This could be a restatement o f items or a table listed elsewhere in the plan or a reference to another location. It may also contain any essential items from the housing and homeless needs assessment, the housing market analysis or the strategic plan.

Clovis estimates that it will receive CDBG funding of $3,750,000 over the next five years. It is anticipated that 20% of those funds will be used for Administrative costs. Those CDBG funds are anticipated to be divided between four prioritized goals, as follows:

Goal 1: Housing - $750,000 (24%) to be used to improve the quality of owner-occupied units, increase multi-family units for low- to moderate-income households, support transitional and permanent housing for homeless persons, and support regional efforts to end chronic homelessness. 187
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2022
2 OMB Control No: 2506-0117 (exp. 09/30/2021)
Goal 2: Economic Development - $250,000 (6%) to be used to support projects that create jobs for low- to moderate-income persons.

Goal 3: Infrastructure - $1, 337,500 (35%) to be used to improve the quality and increase the quantity of public improvements that benefit low- to moderate-income residents and neighborhoods, improve the quality and increase the quantity of facilities that benefit neighborhoods, seniors, and those with special needs, and provide funds to bring public facilities into ADA compliance.

Goal 4: Public Services - $ 562,500 (15%) to be used to provide crime awareness and additional policing that benefits low - to moderate -income neighborhoods, support senior and youth programs, support programs and activities that benefit those with special needs, and to support food pantry programs.

3. Evaluation of past performance
This is an evaluation of past performance that helped lead the grantee to choose its goals or projects.

The City of Clovis, as an Entitlement, is responsible for ensuring compliance with all rules and regulations associated with the CDBG Program. Clovis’ Annual Action Plans and CAPERs have provided many details about the goals, projects, program expenditures and program performance. The following is an overview of the prior year performance and goals:

Goal 1 Affordable Housing Development
Solivita Commons
In cooperation with the Fresno Housing Authority, construction began in 2020 on a 60 -unit affordable multifamily housing complex. The complex is located at the northeast corner of Willow and Alluvial Avenues in Clovis. Through the City’s Affordable Housing Impact Fee Reduction Program, Clovis committed $1,000,000 to the project. Construction is completed and the property is leased.

In 2020 the City signed a contract with the State of California to receive $1,000,000 in HOME funds for a First-Time Homebuyer Down Payment Assistance Program. Marketing material is currently being developed.

Goal 2 Housing Rehabilitation
The City provides grants of up to $6,000 for health and safety repairs to low-income, owner -occupied households in the City of Clovis. This program served almost 300 households during the previous Consolidated Planning Period.

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2022
3 OMB Control No: 2506-0117 (exp. 09/30/2021)
Recently the City was awarded an additional $5,000,000 in CalHome g rant funds for the rehabilitation of low-income owner-occupied homes in Clovis.

Goal 3 Area-Based Policing/Crime Awareness
Additional policing has been continued with a dedicated Community Service Officer. The officer has been focusing on improving neighborhood conditions in CDBG eligible census tracts. During the previous Consolidated Planning Period significant improvement was made in struggling neighborhoods. The officer continues to develop relationships with apartment managers to improve conditions of dwelling units and reduce crime. The officer utilizes neighborhood watch programs in eligible neighborhoods, code enforcement actions, and actively works to improve neighborhood conditions.

Goal 4 Economic Development/Job Creation
The City invests heavily in economic development activities using local resources to attract and retain businesses that provide high wage jobs for its citizens. During the previous planning period Clovis created a commercial kitchen. CDBG funds were used to pay the rental fees for low-income entrepreneurs owning food-based microbusinesses. Utilization of the commercial kitchen has allowed these entrepreneurs to expand their businesses.

Goal 5 Capital Improvements
The following projects were completed in the previous Consolidated Planning Period:
• ADA Improvements: Various Locations
• Helm/Lincoln Alley Reconstruction
• Alamos/Santa Ana Alley Reconstruction
• Cherry Lane/Oxford Alley Reconstruction
• Minnewawa/Cherry Lane Alley Reconstruction
• Helm/Ashlan Alley Reconstruction
• Ashcroft/Holland Alley Reconstruction
• Two additional alley reconstruction projects are currently in the design stage and will replace 4 separate alleys in low-income areas.

Affirmatively Furthering Fair Housing
HUD requires any jurisdiction receiving funds to commit to affirmatively further fair housing. In accordance with federal requirements, the City of Clovis completed the Analysis of Impediments to Fair Housing Choice in November of 2019, and submitted the Analysis to HUD for their review and approval.

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2022
4 OMB Control No: 2506-0117 (exp. 09/30/2021)

4. Summary of Citizen Participation Process and consultation process Summary from citizen participation section of plan.

Clovis developed a Citizen Participation Plan that was approved by City Council in 2006, and subsequently approved by HUD. Citizens, nonprofits, and all interested parties were provided adequate opportunity to review and comment on the plan. The purpose of the plan is to encourage citizens, particularly LMI residents, to participate in the development of the Consolidated Plan, Action Pl ans, Substantial Amendments, and Annual Performance Reports. Citizens are engaged through community meetings, public hearings, and individual interviews. The primary goals of Clovis’ Citizen Participation Plan are 1) to generate significant public partic ipation, specifically from LMI residents and those residing in LMI neighborhoods; 2) to gather data that accurately describes and quantifies housing and community development needs and to suggest workable solutions; and 3) to obtain comments on proposals f or allocating resources. Throughout the determination of needs and allocation of resources relative to the Consolidated Plan, and the development of this action plan the City consulted with both internal and external departments, agencies, and individuals to understand Clovis’ needs and available resources. Internally, Clovis met with several department representatives to provide information about the Consolidated Plan and the Community Development Block Grant. Department staff provided input on how CDBG resources can be utilized and leveraged to provide services such as housing programs, code enforcement, and infrastructure improvements.

5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen Participation section of the Con Plan.

One public input meeting and one public hearing to obtain citizen input and to respond to proposals and questions were scheduled. The City of Clovis held a CDBG Public Input Virtual Meeting on March 8, 2022, to obtain the community’s input and feedback on the needs within Clovis. The workshop was announced on Clovis social media and website on March 1, 2022. While there were no attendees at the public input meeting, the City received one comment via social media w hich suggested the City consider funding programs for adults with special needs and additional housing.

A public hearing was noticed on April 1, 2022, for a public hearing on May 9, 2022. Citizens were also noticed about the public hearing through the City’s social media and City website. No comments, written or oral, were received during the month-long public comment period. The public hearing notice included information about the locations at which the action plan would be available for review and was published in both English and Spanish in The Business Journal, which services Clovis and the surrounding areas. Clovis was prepared to provide interpreters for non-English speaking citizens upon request. However, no requests were made. Both the public i nput meeting and the public hearing were held during evening hours at convenient locations that accommodated persons with disabilities. 190
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2022
5 OMB Control No: 2506-0117 (exp. 09/30/2021)

6. Summary of comments or views not accepted and the reasons for not accepting them The City received one comment, and it was accepted for inclusion in this Action Plan.

7. Summary
Citizens were encouraged to participate in public input meetings/public hearing held virtually due to COVID-19 restrictions. Clovis staff was prepared to provide extensive information relative t o the CDBG program, the preparation of the Consolidated Plan and Annual Action Plans, and the Citizen Participation process and its importance. Even though great effort on the part of the City went into their preparation, the public input meetings did not facilitate any comments. However, the City does conduct scientifically sampled surveys every two years to provide feedback to the City on services needed. This feedback was incorporated into the needs assessment for the community. 191
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2022
6 OMB Control No: 2506-0117 (exp. 09/30/2021)
PR-05 Lead & Responsible Agencies – 91.200(b)

1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source.

Agency Role Name Department/Agency

CDBG Administrator CLOVIS Administration
Table 1 – Responsible Agencies

Narrative (optional)
The City of Clovis Community & Economic Development Department serves as the lead agency for the Consolidated Plan, 2022 -23 Action Plan and the administration of CDBG funds. The City’s institutional structure consists of a council -manager form of government. Under the council -manager form of government, adopted by municipal code, the City Council provides policy direction to the city manager who is responsible for administering city operations. The council is the legislative body; which approves the budget and determines the tax rate, for example. The council also focuses on the community's goals, major projects, and such long-term considerations as community growth, land use development, capital improvement plans, capital financing, and strategic planning. The council hires a professional manager to carry out administrative responsibilities and supervises the manager's performance.

Consolidated Plan Public Contact Information
Andy Haussler, Assistant City Manager
City of Clovis
1033 Fifth Street
Clovis, CA 93612
(559) 324-2095
[email protected]

Claudia Cazares, Affordable Housing Management Analyst
City of Clovis
1033 Fifth Street
Clovis, CA 93612
(559) 324-2094
[email protected]
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AP-10 Consultation – 91.100, 91.200(b), 91.215(l)

1. Introduction
Throughout the determination of needs and allocation of resources relative to this Action Plan, the City consulted with both internal and external departments, agencies, a nd individuals to understand Clovis’ needs and available resources. Internally, Clovis met with several department representatives to provide information about the Consolidated Plan and the Community Development Block Grant. Department staff provided input on how CDBG resources can be utilized and leveraged to provide services such as housing programs, code enforcement, and infrastructure improvements.

Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l))
The City of Clovis currently does not have publicly -owned housing. However, the Fresno Housing Authority recently completed construction on a 60-unit apartment complex for low-income tenants. The project is called Solivita Commons, and is located at the northeast Corner of Willow and Alluvial Avenues in Clovis and is now fully leased. Clovis provided $1,000,000 toward the construction of the proje ct through its Affordable Housing Development Impact Fee Reduction Program. In addition, the City works closely with the Housing Authority to provide referrals for Section 8 vouchers to Clovis residents.

Describe coordination with the Continuum of Care a nd efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness.

The City of Clovis is an active member of the Fresno Madera Continuum of Care (FMCoC), which is the organization that acts as the regional planning body to address homelessness. This collaborative group addresses homeless issues including chronic homelessness, homelessness prevention, and dischar ge coordination policies on the region-wide basis of Fresno and Madera Counties, which includes the City of Clovis. Based upon the consultation process, the City has recognized a need for shelters for other at -risk populations such as youth and veterans, and will pursue projects to serve these populations.

Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS The City of Clovis does not receive ESG funding.
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2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities
Table 2 – Agencies, groups, organizations who participated 1 Agency/Group/Organization Fresno Madera Continuum of Care Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed by
Consultation?
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Briefly describe how the
Agency/Group/Organization was consulted.

What are the anticipated outcomes of the
consultation or areas for improved coordination?
Based upon the consultation process, the
City has recognized a need for shelters and
other housing for at-risk populations such as
youth and veterans, and will pursue projects
to serve these populations.
2 Agency/Group/Organization FRESNO HOUSING AUTHORITY
Agency/Group/Organization Type Housing
PHA
Services - Housing
What section of the Plan was addressed by
Consultation?
Housing Need Assessment
Public Housing Needs
Market Analysis
Briefly describe how the
Agency/Group/Organization was consulted.

What are the anticipated outcomes of the
consultation or areas for improved coordination?
Based upon the consultation process, the
City has recognized a need for public
housing.

Identify any Agency Types not consulted and provide rationale for not consulting

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Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan?
Continuum of
Care
Fresno Madera
Continuum of Care
This effort aligns with the strategic plan goal to support activities to respond to homelessness and its impacts on the community.

City of Clovis
Housing
Element (2015-
23)
City of Clovis
Government Code Section (GSC) 65300 requires cities and counties to adopt and maintain a General Plan with a
minimum of seven mandatory elements: Land Use,
Circulation, Housing, Conservation, Open Space, Noise, and Safety.

SJVHC Goals &
Objectives
Fresno State
University -
Community &
Economic
Development
The San Joaquin Valley Housing Collaborative (SJVHC)
serves as a regional voice for effective affordable housing policy in the San Joaquin Valley. The group establishes and supports a broad network of partners to promote and
increase the development of affordable and workforce
housing in the Valley.

Table 3 – Other local / regional / federal planning efforts

Narrative (optional)
N/A
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AP-12 Participation – 91.105, 91.200(c)

1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting

Clovis developed a Citizen Participation Plan that was approved by City Council in 2006, and subsequently approved by HUD. Citizens, nonprofits, and all interested parties were provided adequate opportunity to review and comment on the plan. The purpose of the plan is to encourage citizens, particularly LMI residents, to participate in the development of the Consolidated Plan, Action Plans, Substantial Amendments, and Annual Performance Reports. Citizens are engaged through community meetings, public hearings, and individual interviews. The primary goals of Clovis’ Citizen Participation Plan are 1) to generate significant public participation, specifically from LMI residents and those residing in LM I neighborhoods; 2) to gather data that accurately describes and quantifies housing and community development needs and to suggest workable solutions; and 3) to obtain comments on proposals for allocating resources. Throughout the determination of needs a nd allocation of resources relative to the Consolidated Plan, and the development of this action plan the City consulted with both internal and external departments, agencies, and individuals to understand Clovis’ needs and available resources. Internally, Clovis met with several department representatives to provide information about the Consolidated Plan and the Community Development Block Grant. Department staff provided input on how CDBG resources can be utilized and leveraged to provide services such as housing programs, One public input meeting and one public hearing to obtain citizen input and to respond to proposals and questions were scheduled. The City of Clovis held a CDBG Public Input Virtual Meeting on March 8, 2022, to obtain the community’s input and feedback on the needs within Clovis. The workshop was announced on Clovis social media and website on March 1, 2022. While there were no attendees at the public input meeting, the City received one comment via social media which suggested the C ity consider funding programs for adults with special needs and additional housing.

A public hearing was noticed on April 1, 2022, for a public hearing on May 9, 2022. Citizens were also noticed about the public hearing through the City’s social media and City website. No comments, written or oral, were received during the month-long public comment period. The public hearing notice included information about the locations at which the action plan would be available for review and was published in both En glish and Spanish in The Business Journal, which services Clovis and the surrounding areas. Clovis was prepared to provide interpreters for non-English speaking citizens upon request. However, no requests were made. Both the public input meeting and the public hearing were held during evening hours at convenient locations that accommodated persons with disabilities.

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Citizen Participation Outreach
Sort Or
der
Mode of Ou
treach
Target of Ou
treach
Summary of
response/atte
ndance
Summary of
comments re
ceived
Summary of co
mments not
accepted
and reasons
URL (If
applica
ble)
1 Public
Meeting
Minorities

Non-English
Speaking -
Specify other
language:

Spanish

Persons with
disabilities

Non-
targeted/bro
ad
community

Residents of
Public and
Assisted
Housing
No Public
Attendance
City should
consider
funding
programs for
adults with
special needs
and
additional
housing.

N/A
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Sort Or
der
Mode of Ou
treach
Target of Ou
treach
Summary of
response/atte
ndance
Summary of
comments re
ceived
Summary of co
mments not
accepted
and reasons
URL (If
applica
ble)
2 Public
Meeting
Minorities

Non-English
Speaking -
Specify other
language:

Spanish

Persons with
disabilities

Non-
targeted/bro
ad
community

Residents of
Public and
Assisted
Housing
No Public
Attendance N/A N/A
Table 4 – Citizen Participation Outreach
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Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
The City of Clovis is committed to leveraging as many funds as possible against the CDBG allocation, including the following:
• State of California CalHome funds for housing rehabilitation and homeownership assistance • Permanent Local Housing Allocation Funds for housing development • HOME program funds through a State allocation for housing assistance • Remnant Redevelopment Agency funds for housing assistance Anticipated Resources
Program Source
of
Funds
Uses of Funds Expected Amount Available Year 1 Expected Amount
Available
Remainder
of ConPlan
$
Narrative
Description Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
CDBG public
-
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public
Services
715,000 0 60,000 775,000 2,285,000
0 See
introduction
Table 5 - Expected Resources – Priority Table

Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied There is no matching requirement for the use of CDBG funds. However, Clovis strives to leverage as many funding sources as possible when planning community and economic development activities. For example, in the previous funding year Clovis used remnant Redevelopment Agency funds, State HOME funds, and State CalHome funds for the purpose of expanding and preserving Clovis' affordable housing stock.
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If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The City of Clovis donated three publicly-owned lots (purchased with RDA funds) in the Stanford Addition to the local Habitat for Humanity affiliate for construction of three affordable housing units. All thr ee homes are now completed and occupied by low-income households. Clovis recently purchased a vacant, dilapidated home at the Northeast Corner of 4th Street and Sunnyside Avenue in Clovis. The City partnered with an affordable housing developer to constr uct two new single-family homes. Both homes were completed in 2022, and will be occupied by low-income households.

Discussion
The City of Clovis is committed to leveraging as many funds as possible against the CDBG allocation. In addition to the narrativ e above, the City provided $1,000,000 to the Fresno Housing Authority for the construction of 60 units of affordable housing. The funding was provided through the City’s Affordable Housing Development Impact Fee Reduction Program. In addition, a supportive housing project is under construction with the support of $300,000 in funding from the City’s Affordable Housing Development Impact Fee Reduction Program.

The City was recently awarded $5,000,000 in funds from the State of California CalHome program. These funds are focused on owner -occupied rehabilitation including mobile home replacements which house extremely low-income seniors who are at high risk of homelessness. In addition, a small portion of the funds will be used for down-payment assistance. The City also received and will be implementing an award of $1,000,000 in State of California HOME funds for a down -payment assistance in the fall of 2021. The City applied for and was awarded State of California Permanent Local Housing Allocation funds. This will provide just over $2 million over 5 years for a variety of affordable housing efforts. The initial plan is to support multi-family and/or supportive housing projects with residual receipt loans to leverage state and federal tax credit programs. The City has provided a preliminary commitment to a not -for-profit developer for the construction of a 59 -unit affordable multi -family housing project, to help secure additional project financing, and will consider other projects if this particular project is unsuccessful in obtaining the additional financing needed to develop the project.

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Annual Goals and Objectives

AP-20 Annual Goals and Objectives
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Administration 2021 2025 Administration CDBG:
$143,010

2 Affordable
Housing
2021 2025 Affordable
Housing
Increase, Improve, and
Preserve Affordable
Housing
CDBG:
$125,000
Homeowner Housing
Rehabilitated: 20 Household
Housing Unit
3 Infrastructure 2021 2025 Non-Housing
Community
Development
City of Clovis
Low-Moderate
Census Tracts
Improve Public
Facilities
CDBG:
$339,784
Public Facility or Infrastructure
Activities for Low/Moderate
Income Housing Benefit: 2915
Households Assisted
4 Economic
Development
2021 2025 Non-Housing
Community
Development
Job Creation/Retention CDBG:
$60,000
Jobs created/retained: 10 Jobs
5 Public Services 2021 2025 Crime Awareness City of Clovis Low-Moderate
Census Tracts
Code Enforcement CDBG:
$107,257
Other: 26945 Other
Table 6 – Goals Summary

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Goal Descriptions
1 Goal Name Administration
Goal Description Provide administration to implement the CDBG program. 2 Goal Name Affordable Housing
Goal Description Provide rehabilitation services to LMI owner-occupied households. 3 Goal Name Infrastructure
Goal Description Reconstruct Brookhaven/Rosebrook Alley and construct park/trail facilities along the Gould Canal (Minnewawa to Peach). 4 Goal Name Economic Development
Goal Description Provide grants for low-income individuals to start businesses at the Clovis Culinary Center - Micro - enterprise 5 Goal Name Public Services
Goal Description Provide code enforcement activities in low/mod census tracts.

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Projects
AP-35 Projects – 91.220(d)
Introduction
The Consolidated Plan goals described in the SP-45 Goals section represent high priority needs for the City of Clovis, and serve as the basis for the strategic actions the City will use to meet those needs. It is our goal that meeting these needs will expand and preserve the affordable housing stock in Clovis, as well as provide public facilities im provements and public services that will strengthen neighborhood revitalization. The City of Clovis Consolidated Plan preparation coincided with the development of the first year of the Action Plan. This Annual Action Plan represents year two of the five -year plan. The City implements all CDBG-funded projects in-house.

Projects
# Project Name
1 Administration
2 Brookhaven/Rosebrook Alley Reconstruction
3 Gould Canal Trail: Minnewawa - Peach
4 Microenterprise
5 Area-Based Policing
6 Housing Rehabilitation Grants
Table 7 - Project Information

Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
The projects have been selected based on internal consultation with city agencies , the emerging needs from the assessments made in the needs assessment section of the 2021 -2025 consolidated plan as well as public consultations through the annual City of Clovis development survey. These priorities have been selected based on the most pressing needs of the City.

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AP-38 Project Summary
Project Summary Information
1 Project Name Administration
Target Area
Goals Supported Administration
Needs Addressed
Funding CDBG: $143,010
Description
Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities

Location Description
Planned Activities
2 Project Name Brookhaven/Rosebrook Alley Reconstruction Target Area City of Clovis Low-Moderate Census Tracts
Goals Supported Infrastructure
Needs Addressed Improve Public Facilities
Funding CDBG: $200,000
Description Reconstruct the Brookhaven/Rosebrook Alley
Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities
1,855 low-income persons will benefit from this
project.

Location Description Alley between Rosebrook Drive and Brookhaven Drive, from Jefferson Avenue to Brookside Drive.

Planned Activities Reconstruct the Alleys
3 Project Name Gould Canal Trail: Minnewawa - Peach
Target Area
Goals Supported Infrastructure
Needs Addressed Improve Public Facilities
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Funding CDBG: $139,784
Description Construct trail along the Gould Canal between Minnewawa & Peach Avenues
Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities
1,060 persons in the block will benefit from this
activity.

Location Description Gould Canal between Minnewawa & Peach Avenues Planned Activities Construct pedestrian/bike trail, and amenities, along the Gould Canal
4 Project Name Microenterprise
Target Area
Goals Supported Economic Development
Needs Addressed Job Creation/Retention
Funding CDBG: $60,000
Description Provide grants to low-income individuals to start a business.

Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities
10 jobs will be created for low-income individuals.

Location Description This will be conducted at the Clovis Culinary Center, a non-profit food business incubator.

Planned Activities Provide space, business coaching, and equipment to low-income individuals to start a business.
5 Project Name Area-Based Policing
Target Area City of Clovis Low-Moderate Census Tracts
Goals Supported Public Services
Needs Addressed Code Enforcement
Funding CDBG: $107,257
Description Provide code enforcement activities in low-mod census tracts in the City of Clovis.
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Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities
26,945 persons reside in the eligible low-mod census
tracts.

Location Description All low-mod census tracts in Clovis, CA.

Planned Activities Conduct code enforcement activities. 6 Project Name Housing Rehabilitation Grants
Target Area
Goals Supported Affordable Housing
Needs Addressed Increase, Improve, and Preserve Affordable Housing Funding CDBG: $125,000
Description Conduct health and safety repairs for 20 homes owned by low/mod families.

Target Date 6/30/2023
Estimate the number and type of families
that will benefit from the proposed
activities
20 households will benefit.

Location Description To be determined based on need and location of low/mod family
Planned Activities Conduct health and safety repairs.
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AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low -income and minority concentration) where assistance will be directed Home rehabilitation assistance will be open to all LMI owner -occupied households throughout Clovis. Alley reconstruction, the trail construction and area -based policing will take place only in LMI Census Tracts/Block Groups. Area-based policing will be done in LMI census tracts/block groups in Clovis. The microenterprise program will be open to LMI small business entrepreneurs and will take place in Clovis.

Geographic Distribution
Target Area Percentage of Funds
City of Clovis Low-Moderate Census Tracts 100
Table 8 - Geographic Distribution

Rationale for the priorities for allocating investments geographically CDBG investments will be made in Census Tracts were at least 51% of the residents are low- to moderate- income.

Discussion
A map identifying low- to moderate-income census tracts is attached as an appendix.

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Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
Clovis’ first public housing authority project, Solivita Commons was completed in the summer of 2021.

The project provides 59 subsidized units affordable to households earning less than 60% of area median income. In addition, Butterfly Gardens, a 75-unit supportive housing project targeting disabled individuals and at-risk homeless individuals began construction in May of 2021. This project is in partnership wi th the County of Fresno Behavioral Health Department and a private not -for-profit developer. The City works closely with the Fresno Housing Authority to provide Section 8 vouchers to Clovis residents. As population demographics continue to change and nee d continues to rise, Clovis will explore further partnerships with the housing authority and private funding to developers to develop additional affordable housing projects in Clovis.

One Year Goals for the Number of Households to be Supported Homeless 0
Non-Homeless 20
Special-Needs 0
Total 20
Table 9 - One Year Goals for Affordable Housing by Support Requirement

One Year Goals for the Number of Households Supported Through Rental Assistance 0
The Production of New Units 0
Rehab of Existing Units 20
Acquisition of Existing Units 0
Total 20
Table 10 - One Year Goals for Affordable Housing by Support Type

Discussion
See Narratives above

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AP-60 Public Housing – 91.220(h)
Introduction
The City of Clovis does not currently own or manage public housing.

Actions planned during the next year to address the needs to public housing Clovis’ first public housing authority project, Solivita Commons was completed in the summer of 2021. The project provides 59 subsidized units affordable to households earning less than 60% of area median income.

Actions to encourage public housing residents to become more involved in management and participate in homeownership
The City of Clovis rec ently received $1,000,000 from the State of California for a first -time homebuyer program. The program will be advertised throughout the City. Also, the City was awarded an additional $5,000,000 in CalHome grant funds for the rehabilitation of low-income owner-occupied homes in Clovis.

If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
The Fresno County Housing Authority is not considered to be troubled.

Discussion
Please refer to the narrative above.
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AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
The City of Clovis does not receive funding specifically to assist the homeless population. The City of Clovis is an active member of the Fresno Madera Continuum of Care (FMCoC), which is the organization that acts as the regional planning body to address homelessness in the region. This collaborative group addresses homeless issues including chronic homelessness, homelessness prevention, and discharge coordination policies on the region-wide basis of Fresno and Madera Counties, which includes the City of Clovis. Through active membership, the City of Clovis supports the FMCoC’s plan to achieve net zero for chronic homelessness by 2017. Based upon the consultation process, the City has recognized a need for shelters for other at-risk populations such as youth and veterans, and will pursue projects to serve these populations. Clovis shares tax revenue with Fresno County that helps support programs such as the Marjaree Mason Center, which reports servicing over 300 battered women from the Clovis area per year. In addition, the tax revenue supports the EOC Sanctuary Youth Center that reports sheltering over 200 homeless youths ages 11-17 annually.

The June 2020, the Fresno-Madera Continuum of Care (FMCoC) released the Point -in-Time Count, the annual count of the region’s sheltered and unsheltered homeless individuals and families. Despite the FMCoC’s efforts to expand its housing and services, the overall count o f the number of persons experiencing homelessness increased significantly compared to the 2019 PIT Count. At 3,641 homeless individuals, this year’s report represents an increase of 45% or 1,133 homeless individuals in comparison to the 2019 count of 2,508.

Much of the increase in the total 2020 PIT Count is driven by an increase in the population of the FMCoC’s emergency shelters. In 2019, the sheltered population count was 439 and in 2020, it was 588. This was achieved by increasing the number of emergency shelter beds in 2019, thus bringing people off the streets allowing the rehousing process to begin.

Although the total count of people experiencing homelessness has increased, many people during the past year have exited homelessness through FMCoC progra ms to permanent housing. During the 2019 calendar year, FMCoC successfully helped 1,284 people exit to permanent housing. This includes 75% of the people who were served by the FMCoC’s Permanent Supportive Housing (PSH), Rapid Rehousing (RRH), and Transitional Housing (TH) programs.

Describe the jurisdictions one -year goals and actions for reducing and ending homelessness including
Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
The City of Clovis has b egun construction on its first dedicated homeless housing facility, Butterfly 210
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Gardens. The project began construction in May of 2021, and is anticipated to be completed in 2022. Butterfly Gardens is a 75-unit supportive housing development targeting disab led individuals and at-risk homeless individuals. This project is in partnership with the County of Fresno Behavioral Health Department and a private not-for-profit developer.

In addition, the City is an active supporter of the MAP Point at POV, and those needing homeless services within Clovis are provided an opportunity to utilize the MAP services. Operated by The Poverello Housing (POV - a homeless shelter), MAP (Multi-Agency Access Program) is an integrated intake process that connects individuals facing housing, substance abuse, physical health and/or mental health challenges to supportive services. MAP Point at POV is a physical intake location for the community’s homeless population that can travel to different points of need and access many areas of the community.

Addressing the emergency shelter and transitional housing needs of homeless persons The City of Clovis amended their Development Code to allow emergency shelters and transitional housing, by-right, in any area that allows residential development. The first project to come to fruition is Butterfly Gardens as describe above.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
The City of Clovis has begun construction on its first dedicated homeless housing facility, Butterfly Gardens. The project began construction in May 2021, and will provide a 75 -unit supportive housing project targeting disabled individuals and at-risk homeless individuals. This project is in partnership with the County of Fresno Behavioral Health Department and a private not-for-profit developer.

In addition, the City is an active supporter of the MAP Point at POV, and those needing homeless services within Clovis are provided an opportunity to utilize the MAP services. Operated by The Poverello Housing (a homeless shelter), MAP (Multi -Agency Access Program) is an i ntegrated intake process that connects individuals facing housing, substance abuse, physical health and/or mental health challenges to supportive services. MAP Point at POV is a physical intake location for the community homeless population.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facil ities, foster 211
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care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs.

The City of Clovis has begun construction on its first dedicated homeless housing facility, Butterfly Gardens. The project began construction in May of 2021, and is anticipated to be completed in 2022. Butterfly Gardens is a 75-unit supportive housing development targeting dis abled individuals and at-risk homeless individuals. This project is in partnership with the County of Fresno Behavioral Health Department and a private not-for-profit developer.

In addition, Clovis residents have access to many facilities within Fresno C ounty, including assisted and independent residential facilities for both the general adult population and the elderly. There are 213 residential elderly care facilities in the County of Fresno, with capacity for over 5,000 persons. There are 161 Adult residential facilities, with capacity for over 900 persons. • Residential Care Facilities for the Elderly provide care, supervision and assistance with activities of daily living, such as bathing and grooming. They may also provide incidental medical services under special care plans. The facilities provide services to person 60 years of age and over, and persons under 60 with comparable needs. These facilities can also be known as assisted living facilities, nursing homes, and board and care homes.
• Adult Residential Facilities are facilities of any capacity that provide 24-hour non-medical care for adults ages 18-59, who are unable to provide for their own daily needs. Adults may be physically handicapped, developmentally disabled, and/or mentally disabled.

Discussion
The City of Clovis in partnership with the County of Fresno and a private developer recently broke ground on a 75 -unit supportive housing project, Butterfly Gardens. The facility is expected to be completed in 2022 and will house homeless, t hose at –risk of homelessness, and individuals with mental health or disabilities. The City provided a grant to the project and coordinated land use approvals and supported funding applications. Full supportive services will be made available to the occupants.

The City of Clovis granted funds to the Fresno Housing Authority for the development of Solivita Commons, a 60 -unit affordable multi -family project. The project is 100% deed -restricted for affordable housing. The City provided land use support, application for funding support, and the grant of funds to make the project possible. Construction is now complete, and the property is leased.

The City was recently awarded $5,000,000 in funds from the State of California CalHome program. These funds are focused on owner -occupied rehabilitation including mobile home replacements which house extremely low-income seniors who are at high risk of homelessness. In addition, a small portion the funds will be used for down -payment assistance. The City also rec eived and will be implementing an award of 212
AGENDA ITEM NO. 13.

Annual Action Plan
2022
27 OMB Control No: 2506-0117 (exp. 09/30/2021)
$1,000,000 in State of California HOME funds for a down-payment assistance in the fall of 2021. The City applied for and was awarded State of California Permanent Local Housing Allocation funds. This will provide just over $2 million over 5 years for a variety of affordable housing efforts. The initial plan is to support multi-family and/or supportive housing projects with residual receipt loans to leverage state and federal tax credit programs. The City has pr ovided a preliminary commitment to a not -for-profit developer for the construction of a 59 -unit affordable multi -family housing project, to help secure additional project financing, and will consider other projects if this particular project is unsuccessful in obtaining the additional financing needed to develop the project.

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AGENDA ITEM NO. 13.

Annual Action Plan
2022
28 OMB Control No: 2506-0117 (exp. 09/30/2021)
AP-75 Barriers to affordable housing – 91.220(j)
Introduction:

Clovis faces barriers to affordable housing that are common across housing markets, including decreasing supply of developable land, which increases the cost of acquisition and development of the land. Another common barrier is negative reaction from neig hbors regarding affordable housing development based upon a misconception that property values will decline and an increase in parking and traffic. Most crucial, over the last two years, the region has experienced a rapid rise in home values, thereby pric ing out first time homebuyers from the home ownership market. Though home values are still significantly below what can be found in surrounding areas, such as the Bay Area, Central Coast and Southern California, the asking prices for homes in the Central V alley are still beyond reach for most lower income families. Additionally, sales inventory which typically holds three months worth of home sales, now has 1-7 days worth of inventory. The lack of available inventory ultimately adds to the lack of access and additional barriers to secure affordable homeownership for the Valley’s lower income families.

Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment
In its 2015-2023 Housing Element, Clovis identified several governmental constraints to the development, maintenance, and improvement of housing and affordable housing, as follows: Zoning Code Amendments, Lot Consolidation and Lot Splits, and Monitoring of Planning and Development Fees. Nongovernmental constraints were identified as follows: Land Costs, Construction Costs, and Availability of Financing.

Discussion:

Please see discussion above.
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Annual Action Plan
2022
29 OMB Control No: 2506-0117 (exp. 09/30/2021)
AP-85 Other Actions – 91.220(k)
Introduction:

Actions planned to address obstacles to meeting underserved needs

Actions planned to foster and maintain affordable housing

Actions planned to reduce lead-based paint hazards

Actions planned to reduce the number of poverty-level families

Actions planned to develop institutional structure

Actions planned to enhance coordination between public and private housing and social service agencies

Discussion:

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AGENDA ITEM NO. 13.

Annual Action Plan
2022
30 OMB Control No: 2506-0117 (exp. 09/30/2021)
Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:

Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)

Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out.

1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 0

2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0

3. The amount of surplus funds from urban renewal settlements 0

4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0

5. The amount of income from float-funded activities 0
Total Program Income: 0

Other CDBG Requirements

1. The amount of urgent need activities 0

2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 100.00%

100% of the CDBG funds used during the 2022-2023 program year will be for the benefit of LMI persons. The City has assumed $60,000 in administrative savings from the 2021-22 program year that is being programmed for 2022-23 projects.

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APPENDICES
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003102 Blk 1
Railroad
005606 Blk 2
003102 Blk 5
005608 Blk 2
005704 Blk 1
005607 Blk 1
005608 Blk 1
003104 Blk 1
003102 Blk 3
003103 Blk 5
003102 Blk 4 003102 Blk 2
003103 Blk 4
003103 Blk 3
005607 Blk 4
Willow
Clovis
Peach
Minnewawa
Dakota
CA-168 Sierra
Villa
Eddy
Bernadine
Chestnut
Veterans
Blackbeard
Woodworth
Sunnyside
De Witt
De Witt
Willow
De Witt
Clovis
Clovis
Bullard
Ashlan
Sunnyside
Dakota
Bullard
Peach
CA-168 Sierra
µ
Eligible CDBG Areas
Legend
Clovis Streets
Clovis City Limits
3/1/2022
005607 Blk 3
005602 Blk 4
005602 Blk 1
005602 Blk 3
005604 Blk 4
City of Clovis
2021 Census Tract CDBG Eligible
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AGENDA ITEM NO. 13.

TO: Mayor and City Council
FROM: Administration
DATE: May 16, 2022
SUBJECT: Consider Review and Introduction - Res. 22-___, 2022-23 City of Clovis Annual Budget, Five -year Capital Improvement Program, and information regarding the Clovis Successor Agency.

Staff: Jay Schengel, Finance Director/John Holt, City Manager Recommendation: Receive Introduction and continue the public hearing to June 13, 2022
ATTACHMENTS: 1. Resolution

2. 2022-23 City of Clovis Annual Budget

CONFLICT OF INTEREST
None.

RECOMMENDATION
Receive the 2022-23 City of Clovis Annual Budget and open the public hearing for departmental review and comment, continue the public hearing to June 13, 2022, and adopt the budget resolution no later than June 30, 2022.

EXECUTIVE SUMMARY
According to the Municipal Code, the City Manager is responsible for providing the City Council with a recommended annual budget prior to commencement of the succeeding fiscal year and by no later than the third regular Council meeting in May. The Annual Budget is a plan for the financial operations of the City and includes a spending plan for all City operations , a five-year community investment program, and estimated revenues for the upcoming fiscal year.

The purpose of the budget is to enable the City Council to make financial plans for current and long-term expenditure needs, to ensure that executive manageme nt is administering the plans as set forth, and to allow citizens and investors with an opportunity to form opinions about the financial policies and administration of the City.

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AGENDA ITEM NO. 14.

BACKGROUND
The 2022-23 Annual Budget is the spending plan for community investment in local services such as public safety, parks and recreation, transit, streets, water and sewer, and repairs/maintenance of public facilities. The Annual Budget is also the spending plan for investment in infrastructure of the community. The Annual Budget provides for a range of public services and focuses on those services that are essential to our citizens. Continuing prudent fiscal decisions and ongoing economic development initiatives enable the City to grow service levels and remain fiscally sustainable.

The General Fund Emergency Reserve is being maintained at 22%, or $21 million set aside for unforeseen emergencies. The budget also includes $4 3 million in City capital improvement projects. The City’s General Fund budget is being funded through current year revenues.

Budget highlights include:

 Provide Targeted Neighborhood Revitalization Investments . This is a long-term effort to improve community appearance, neighborhood stabilization, amenities in older neighborhoods, and economic opportunities. These investments total $26.67 million in the proposed 2022-2023 budget and including the following:
o Trail Enhancements in Southwest Clovis. The budget provides funds to implement the Master Trail Agreement along the Gould Canal between Minnewawa and Peach Avenues, which will include opening the canal bank for trail use and the installation of amenities. o Park Improvements in Central and Southwest Clovis . Includes completion of the dog park at Sierra Bicentennial Park and the creation of a new dog park at Letterman Park.
o Recreation Opportunities . A mobile recreation unit is proposed to allow City recreation staff to conduct programs in parks in southwest and central Clovis.
o Affordable Housing Programs Reach Unprecedented Level of Investment at over $7.5 million in Grant Funding.
 $5.0 million for Housing Rehabilitation Loans
 $1.0 million for Down-Payment Housing Assistance
 $1.5 million to support the creation of new affordable housing.  Continuing the Emergency Housing Repairs Program at $0.1 million
o Active code enforcement will continue with a cross-department effort, including an investment of grant funds focused on low-income areas. o Public street improvements. Reconstruct or Design:
 Reconstruct Barstow Avenue – Villa to Minnewawa Avenues & design Sunnyside to Fowler.
 Reconstruct Fowler Avenue – Ashlan south to the City limits.  Reconstruct Gettysburg Avenue – Sierra Vista Parkway to Clovis Avenue.
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AGENDA ITEM NO. 14.
 Reconstruct Sunnyside Avenue – Fifth to Barstow Avenues, Third to Fifth Streets and design Barstow to Shaw Avenues.
 Design Bullard Avenue – Villa to Minnewawa Avenues.
 Design Willow Avenue – Shaw to Barstow.
 Construct ADA Improvements as part of various street improvement projects.
o Sidewalk Improvements. Design reconstruction of sidewalks near Sierra Vista Elementary School.
o Alley Improvements. Reconstruct various alleys in eligible lower - income neighborhoods.
o Water & Sewer Improvements.
 Construct Well 35 at Dewitt and Santa Ana Avenues.
 Design Sewer main replacement on Santa Ana Avenue west of Clovis.
o Public Safety Improvements
 Construct additional classrooms at Fire Training Facility in Southwest Clovis.
 Reconstruction of Fire Station #2 on Minnewawa near Santa Ana Avenues.
 Addition of 3 sworn police officers and other Public Safety positions. o Economic Development Investments
 Revitalization planning for underutilized Shaw Avenue commercial properties
 Offer s mall and micro business incubation services in Southwest Clovis in partnership with the Clovis Culinary Center and regional partners.
 Continue marketing the area for retail and job generating uses to serve adjacent the neighborhoods and the City as a whole.  Enhance Public Safety. Public safety is a core service to the City. o Increase of 3 sworn Police personnel bringing the total authorized to 112 officers, adding a Communications Supervisor, and a conversion of a Public Safety Dispatcher to a Lead Public Safety Dispatcher o Allows the Police Department to promote vacant Corporals, Sergeants, and Lieutenants positions, restoring pre-pandemic staffing levels. o The budget provides for the replacement of 15 additional vehicles in the Police Department during the budget year, and restoration of annual contributions to the fleet fund to purchase future vehicles with cash rather than financing.
o The full operational cost of the new Fire Station #6 in Loma Vista. o The funding for the reconstruction of Fire Station #2 and additions to the Fire Training Facility in Southwest Clovis that will house the Station #2 crew during reconstruction.
o Completion of the purchase of new Self-Contained Breathing Apparatus (SCUBA) for the Fire Department.
o Fund two Fire Department Command Vehicles.
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AGENDA ITEM NO. 14.
 Provide Fiscal Security. The Emergency Reserve is proposed to be 22% (of General Fund Expenditures), or $21 million, set aside this year for unforeseen emergencies. The City’s auditors recommended a target amount of 20% -25% as a prudent reserve for a city operation the size of Clovis. This fund protects services levels from catastrophic and unexpected losses. Utilization of these funds requires a 4/5ths vote of the City Council.  Further Secure Water Supplies and Systems
o Upgrade outdated supervis ory control and data acquisition (SCADA) software that is no longer supported and does not adhere to current industry security standards for industrial control systems (ICS). Modern SCADA will provide ease of use and advanced functionality for operators, developers, and system administrators.
o Continue investments with the Fresno Irrigation District for the firm surface water supply.
o Design an additional water storage reservoir (Reservoir #9) in the Heritage Grove Growth Area.
o Installation of an additional p ump at Pump Station E to allow for the expansion of recycled water use city-wide.
 Invest in Employees. The budget includes a budgeted cost of living increase and funds for employee benefits. Funds for training and educational opportunities have been includ ed and encouraged to be used to allow employees to reach their full potential at the City. In addition, new positions have been added to meet the growing needs of the City.  Invest in Planning our Future. The budget includes approximately $400,000 related to preparation of environmental impact reports for development projects and master plans that are currently being processed.

In addition, $1.4 million is included for continued work on the Sixth Cycle Housing Element and the initiation of an update to the General Plan. The Housing Element is expected to be complete in the fall of 2023.  Invest in the City’s Economic Future. Staff will be actively working on attracting commercial and industrial businesses to Clovis to add jobs and revenues to the City. Staff will continue to make strategic marketing efforts aimed at top revenue producing businesses to support the financial needs of the City. Relationships are being developed with critical development partners in the community and assisting projects through th e development process. Staff will also be working with regional partners to develop entrepreneurial and small business growth resources. Staff will continue a focused marketing effort on reinforcing Clovis as a medical hub for services, education, and rese arch leverage with the expansion of Clovis Regional Medical Center and the expansion of California Health Sciences University.
 Serve our Seniors. City funds are budgeted to complete construction work for the new Senior Center and Transit Hub at Landmark Square. Pending approval of the County’s regional library, the City will ensure that a pad area is made available to facilitate its future construction on -site. The new facilities will more than double the capacity of the library and Senior Center, 222
AGENDA ITEM NO. 14.
and offer a new amenity to the community, a Transit Hub. This will bolster Old Town as the heart of Clovis and leverage the investment the community has made in the trail system and Old Town.

The 2022-23 Annual Budget for all funds, which totals $297.5 million, is balanced by the use of current revenues, anticipated rate increases, and capital reserves. This budget represents a 20% decrease compared to estimated expenditures for 20 21-22, due primarily to several large capital projects being completed i n the current year and not reflected in the proposed budget.

A summary of expenditures by function is provided below:

The General Fund , which is the only source of discretionary funding used for basic government services such as public safety, streets, parks, recreation and senior services, is budgeted to increase 8% above estimated expenditures for 20 21-22. Department budgets are proposed to increase due to budget increases for core services as well as additional salary and benefit costs. Total current revenue in the General Fund is estimated at $96.3 million and expenditures of $93.6 million are being proposed.

The Executive Summary and Introduction Sections of the Annual Budget provide an overview of the important goals, target actions, resulting projects, and fiscal overview addressed within the budget. The Annual Budget presented to the City Council addresses the goals by which the community will measure its success, meets the most essential service needs for the community, provides substantial investment in planned maintenance of sewer, water, and street facilities, directs resources to economic development and support for job crea tion, continues the effort to plan for the community, and is balanced, with prudent emergency reserve funding set aside, as requested by the Council. For these reasons, the budget is recommended for consideration and adoption by the City Council.

Attached is the Budget Document containing additional summary narratives, details of revenues, expenditures, personnel, and debt and capital projects.

FISCAL IMPACT
In accordance with the Municipal Code, and in compliance with State law, the City Council is required to adopt a balanced, annual budget for each fiscal year by June 30. The Annual Budget provides a spending plan for the upcoming year that is balanced wit h expenditures General
Government
3%
Public Safety
23%
Planning &
Development
Services
5%
Community
Investment
Program
14%
Public
Utilities
26%
Culture &
Rec
6%
Internal
Services
23%
General Government $ 8,838,800
Public Safety 69,893,200
Planning & Development Services 14,873,500
Community Investment Program 43,021,000
Public Utilities 75,386,100
Culture & Rec. 18,531,500
Internal Services 66,943,300
TOTAL $ 297,487,400
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AGENDA ITEM NO. 14.
kept in line with revenues, includes a five -year community investment program, includes a prudent reserve of funds for emergencies and unforeseen events, and authorizes position allocations, all as approved by the Council.

REASON FOR RECOMMENDATION
The City Council must conduct a public hearing to provide an opportunity for the public to comment on the proposed Annual Budget; must review the proposal to determine that the financial plan fairly represents the fiscal policies and priorities of the City Council; and is required by local ordinance, in compliance with State law, to adopt a balanced budget by no later than June 30, 2022. If the Council fails to adopt a budget by that date, then the City Manager’s proposed budget will automatically become effective to avoid any interruption in City operations, but no capital projects or capital purchases would be allowed until final action by the City Council.

ACTIONS FOLLOWING APPROVAL
On May 16, 2022, the 2022 -23 City of Clovis Annual Budget will be presented with a recommendation to opening the public hearing for departmental review and comment, continue the public hearings to June 13, 2022, and adopt the budget resolution no later than June 30, 2022. Copies of the recommended Annual Budget will be available for review by the public by May 16, 2022 and prior to the budget hearings at the Clovis Branch of the Fresno County Library, at City Hall, and on the City’s website found at www.cityofclovis.com.

Prepared by: Gina Daniels, Assistant Finance Director

Reviewed by: City Manager JH
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AGENDA ITEM NO. 14.

ATTACHMENT 1
RESOLUTION 22-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CLOVIS APPROVING THE ANNUAL BUDGET FOR FISCAL YEAR 2022-2023, ORDERING TRANSFERS, AND

ADOPTING THE SUMMARY OF APPROPRIATIONS BY FUND AND DEPARTMENT AND OTHER NECESSARY ACTIONS RELATED TO APPROVING THE 2022-2023 BUDGET

WHEREAS, the City Council is required to adopt the Budget by June 30 of each year; and WHEREAS, the Council has conducted a public hearing on the recommended 2022-2023 Budget; and
WHEREAS, the adoption of Proposition 111 on June 5, 1990, requires the Council adopt an Appropriation Limit; and
WHEREAS, the Council intends to establish the City's Appropriation Limit in conformance with the provisions of Proposition 111; and
WHEREAS, the City Council finds it necessary to adopt the 2022-2023 Budget.

NOW, THEREFORE BE IT RESOLVED, by the City Council of the City of Clovis as follows:
* Note: Exhibits A – E will be available at the June 13, 2022, meeting.

1. The 2022-2023 Annual Budget and corresponding Personnel Allocation is approved.

2. The City Council approves a nd orders the transfer of monies in and out of various funds as set forth in the "Notes to Resources and Appropriations Summary" of said 2022-2023 Budget Book.

3. The “Summary of Expenditures/Expenses 2022-2023 by Department within Fund -Legal Level of Budgetary Control" attached as Exhibit “A” is approved.

4. The Appropriation Limit as calculated and shown on Page 9 of the 2022-2023 Budget book is approved for $373,733,758.

5. The Council orders that any budget savings or unanticipated revenue be transferred to reserves in accordance with the Appropriation Limit.

6. Any amendments to the appropriations as may be subsequently approved by the Council shall be in conformance with Section 2 -8.11, Section 2 -8.13 and Section 2 -8.17 of the Clovis Municipal Code.

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AGENDA ITEM NO. 14.

7. The City Council orders that $21,000,000 of the Fund Balance from the City's General Fund be designated as Emergency Reserve.

8. The City Council approves the Five -Year Capital Improvement Program that is included within the Annual Budget.

9. The updated Monthly Salary Schedules by bargaining group are attached as Exhibit “B”.

10. The Clovis Redevelopment Successor Agency’s information is included in the City budget and accounting systems for administrative purposes and is shown on Exhibit A.

11. The City Council will implement the approved 3% annual increase in sewer user rates and will refund in full the $7.30 per month sewer bond surcharge thereby adopting the fees itemized in Exhibit C.

12. The City Council will implement the approved annual 4% increase in rates for resid ential recycling and greenwaste and a 1.5% decrease will be implemented for the refuse program as shown in Exhibit D.

13. The City Council will implement the approved 3% annual increase in water user rates thereby adopting the fees itemized in Exhibit E. The non-drought rates on Exhibit E will be in effect for 2022-2023.
* * * * *
The foregoing Resolution was introduced and adopted at a regular meeting of the City Council of the City of Clovis held on __________, 2022, the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Dated:

________________________________ ________________________________ Mayor City Clerk
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AGENDA ITEM NO. 14.

RECOMMENDED
2022-2023
Annual Budget
Including Five-Year Community Investment Program
$77$&+0(17 227
AGENDA ITEM NO. 14.




 



 















 

  







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CITY OF CLOVIS

2022 - 2023
BUDGET

Submitted to City Council
May 16, 2022

___________________________________

José G. Flores
Mayor

Lynne Ashbeck
Mayor Pro-Tem

Drew Bessinger
Council Member

Vong Mouanoutoua
Council Member

Robert Whalen
Council Member

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AGENDA ITEM NO. 14.

HOW TO USE THIS BUDGET
This Budget document has been designed to
provide the public concise and readable information
about the City of Clovis. The Budget explains the
services and objectives, annual spending plan for
the 2022-2023 fiscal year, debt obligations, and
other vital information about the operations of the
City.

This Budget document is separated into ten
sections, designated by tabbed pages that provide
quick identification of its contents. The Table of
Contents lists every subject covered in this
document and the associated page number.

The tabbed pages include brief descriptions of the
data within each secion. The following are the ten
major sections and a brief explanation of each:

Table of Contents
A listing of all major sections, subsections, and the
associated page numbers.

Executive Summary
The Executive Summary Section includes the City
Manager's letter to the Mayor, City Council, and
residents of the City of Clovis which provides an
overview of the recommended Budget and its
objectives, policies and goals, a discussion of
funding for City services, a discussion of major
capital projects, and a general economic outlook for
the City.

Introduction
The Introduction Section provides general
information about the City, long-range goals, major
policies, financial policies, discretionary revenues,
economic outlook, basis of budgeting, budget
process and calendar, budgetary controls,
appropriation limitation, fund descriptions, and
organizational charts.

Summary of Revenues and Expenditures
The Summary of Revenues and Expenditures
Section provides several summary presentations of
financial transactions contained in the
recommended Budget and a listing of primary
revenue sources for the General Fund.

Debt Obligations
The Debt Obligation Section provides information
about the City's policies on long-term debt, current
long-term debt obligations, and the legal debt limit.

Personnel
The Personnel Section provides a summary and a
detailed list of all the employee positions and the
proposed changes in the recommended Budget.

Operations
The Operations Section provides detailed
information about the programs and proposed
expenditures for each department. Each
department begins with a summary identifying all
activities for the department. The summary is
followed by department performance measures,
which includes detail for each activity. Activity
narratives include a brief "Five-Year Outlook" that
addresses future budget considerations. Following
the activity narratives is the activity budget detail
including position allocations.

Community Investment Program
The Community Investment Program Section
provides a general explanation of all capital projects
planned for the 2022-2023 fiscal year and is
organized by activity. Projects are identified on the
basis of priority need and availability of funding.

Five-Year Community Investment Program
The Five-Year Community Investment Program
Section provides a general explanation of all capital
projects planned for fiscal years 2022-2023 through
2026-2027 and beyond and is also organized by
activity. Projects are identified on the basis of
priority need and availability of funding.

Appendix
The Appendix Section provides demographic
information, phone numbers of City offices, elected
officials,miscellaneous statistics, and a glossary of
terms used in this document.

Every attempt has been made to make this Budget
document as easy to understand as possible. We
apologize for the use of "technical terms"; but due
to the nature of accounting, their use is sometimes
unavoidable. We hope that including a Glossary of
terms in the Appendix Section will help the reader
through these technical areas. If you have any
questions or need clarification of items in this
Budget, contact the Finance Department by calling
(559)3 24-2130.

The Budg et document is available for public
inspection at City Hall, Clovis Civic Center,
1033 Fifth Street, and the Clovis Branch Library,
1155 Fifth Street, during regular business hours, as
well as the City’s website at www.cityofclovis.com.

Individual copies may also be purchased from the
Finance Department.
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AGENDA ITEM NO. 14.

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AGENDA ITEM NO. 14.
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AGENDA ITEM NO. 14.

TABLE OF CONTENTS

I. Executive Summary .......................................................................................................... .............. i-vi

II. Introduction .............................................................................................................. .................... 1-22 Summary of Discretionary and Non-Discretionary
Revenues Chart .................................................................................................................... 4 Use of Discreti onary Revenues Chart ......................................................................................... 5 Description and Purpose of Accounting Funds .................................................................... 10-11 Organizational Charts ....................................................................................................... .... 12-21 Management Staff & B udget Task Force .................................................................................. 22

III. Summary of Revenues and Expenditures .................................................................................. 23 -46 Fund Balance Summary ........................................................................................................ .... 23 Fund Highlights .......................................................................................................................... 24 Summary of Resources and Appropriations ............................................................................. 25 Notes to Resource s and Appropriations ................................................................................... 26 Summary of Revenues and Expenditures ................................................................................. 27 Budget Summary - All Funds ............................................................................................... 28 -29 Budget Summar y by Fund .................................................................................................... 30-33 Summary of Revenues by Fund ........................................................................................... 34-35 Revenue by Source ........................................................................................................... ... 36-43 Summary of Expenditures by Fund ...................................................................................... 44-46

IV. Debt Obligations .......................................................................................................... ............... 47-54 Debt Summary ........................................................................................................................... 48 Description of Long-Term Debt ............................................................................................ 49-54

V. Personnel………………………………………………………………………………………………...55-62 Personnel Overview .................................................................................................................. 55 Summary of Posit ions by Department ....................................................................................... 57 Detail of Positions by Department ........................................................................................ 58-62

VI. Operations……………………………………………………………………………………………...63-188

Table of Contents ........................................................................................................... ........... 63 Summary of Expenditures by Department/Function ............................................................ 64-65 City Council ................................................................................................................ .......... 66-67 City Attorney ............................................................................................................... .......... 68-69 City Manage r Department .................................................................................................... 70-87 General Services Department ............................................................................................ 88-1 09 Finance Department ......................................................................................................... 110-115 Planning and Development Servi ces Department ........................................................... 116-126 Police D epartment ............................................................................................................ 127-145 Fire Department ................................................................................................................ 146-157 Public Utilitie s Department ............................................................................................... 158-185 Clovis Successor Agencies .............................................................................................. 186- 188

VII. Community Investment Program Summary ............................................................................. C1-C16

VIII. Five-Year Community Investment Program ........................................................................... C17-C64

IX. Appendix .................................................................................................................. .................. A1-A7 Glossary .................................................................................................................... ........ A8-A12 233
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AGENDA ITEM NO. 14.

May 16, 2022
To: Mayor Flores, Members of the City Council, and Citizens of Clovis

EXECUTIVE SUMMARY
The 2022-2023 Annual Budget for general operations and ca pital improvement programs for the City of Clovis in the amount of $297.5 million is hereby submitted, in accordance with the Clovis Municipal Code.

The 2022-2023 Annual Budget was developed to grow the City’s operations to match growth and provide targeted investments in the City to improve the quality of life fo r its residents. Compared to the past few years, this is a welcome return from those restrained budgets due to the economic uncertainty of the pandemic. While economic uncertainty still exists and the General Fund is still constrained, the City is in a solid fiscal position. This proposed budget further solidifies the City’s financial position in improving reserves, setting aside funds for future needs, and reduces the potential need for debt financing while restoring critical services and making significant investments in our City.

Highlights. The 2022-2023 Annual Budget is the spending plan fo r local services and investment in infrastructure of the community. The Annual Budget provides for a range of public services and focuses on those services that are essential to our citizens. Continuing prudent fiscal decisions and ongoing economic development initiatives enable the City to continue to maintain service levels and remain fiscally sustainable. The 2022-2023 Annual Budget highlights include:
x Provide Targeted Neighborhood Revitalization Investments. This is a long-term effort to improve community appearance, neighborhood stabilization, amenities in older neighborhoods, and economic opportunities. These investments total $26.67 million in the proposed 2022-2023 budget and  including the following:
o Trail Enhancements in Southwest Clovis .. The budget provides funds to implement the  Master Trail Agreement along the Gould Canal between Minnewawa and Peach Avenues,  which will include opening the canal bank for trail use and the installation of amenities. o Park Improvements in Central and Southwest Clovis. Includes completion of the dog park at Sierra Bicentennial Park and the creation of a new dog park at Letterman Park. o Recreation Opportunities. A mobile recreation unit is proposed to allow City recreation staff to conduct programs in parks in southwest and central Clovis. o Affordable Housing Programs Reach Unprecedented Level of Investment at over $7.5 million in Grant Funding.
ƒ $5.0 million for Housing Rehabilitation Loans
ƒ $1.0 million for Down-Payment Housing Assistance
ƒ $1.5 million to support the creation of new affordable housing. ƒ Continuing the Emergency Housing Repairs Program at $0.1 million o Active code enforcement will continue with a cross-department effort, including an investment of grant funds focused on low-income areas.
o Public street improvements. Reconstruct or Design:
ƒ Reconstruct Barstow Avenue – Villa to Minnewawa Avenues & design Sunnyside to Fowler.
ƒ Reconstruct Fowler Avenue – Ashlan south to the City limits. ƒ Reconstruct Gettysburg Avenue – Sierra Vista Parkway to Clovis Avenue. ƒ Reconstruct Sunnyside Avenue – Fifth to Barstow Avenues, Third to Fifth Streets and design Barstow to Shaw Avenues.
ƒ Design Bullard Avenue – Villa to Minnewawa Avenues.
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ƒ Design Willow Avenue – Shaw to Barstow.
ƒ Construct ADA Improvements as part of various street improvement projects. o Sidewalk Improvements. Design reconstruction of sidewalks near Sierra Vista Elementary School.
o Alley Improvements. Reconstruct various alleys in eligible lower-income neighborhoods. o Water & Sewer Improvements.
ƒ Construct Well 35 at Dewitt and Santa Ana Avenues.
ƒ Design Sewer main replacement on Santa Ana Avenue west of Clovis. o Public Safety Improvements
ƒ Construct additional classrooms at Fire Training Facility in Southwest Clovis. ƒ Reconstruction of Fire Station #2 on Minnewawa near Santa Ana Avenues. ƒ Addition of 3 sworn police officers and other Public Safety positions. o Economic Development Investments
ƒ Revitalization planning for underutilized Shaw Avenue commercial properties ƒ Offer small and micro business incubation services in Southwest Clovis in partnership with the Clovis Culinary Center and regional partners.
ƒ Continue marketing the area for retail and jo b generating uses to serve adjacent the neighborhoods and the City as a whole.
x Enhance Public Safety. Public safety is a core service to the City. o Increase of 3 sworn Police personnel bringing the total authorized to 112 officers, adding a  Communications Supervisor, and a conversion of a Public Safety Dispatcher to a Lead Public Safety Dispatcher
o Allows the Police Department to promote vacant Corporals, Sergeants, and Lieutenants  positions, restoring pre-pandemic staffing levels.
o The budget provides for the replacement of 15 additional vehicles in the Police Department  during the budget year, and restoration of annual contributions to the fleet fund to purchase  future vehicles with cash rather than financing.
o The full operational cost of the new Fire Station #6 in Loma Vista. o The funding for the reconstruction of Fire Station #2 and additions to the Fire Training Facility in Southwest Clovis that will house the Station #2 crew during reconstruction. o Completion of the purchase of new Self-Contained Breathing Apparatus (SCBA) for the Fire  Department.
o Fund two Fire Department Command Vehicles.
x 3URYLGH )LVFDO 6HFXULW\ The Emergency Reserve is proposed to be 22% (of General Fund  Expenditures), or $21 million, set aside this year for unforeseen emergencies. The City’s auditors recommended a target amount of 20%-25% as a prudent reserve for a city operation the size of Clovis. This fund protects services levels from catastrophic and unexpected losses. Utilization of these funds requires a 4/5ths vote of the City Council.
x Further Secure Water Supplies and Systems
o Upgrade outdated supervisory control and data acquisition (SCADA) software that is no longer supported and does not adhere to current industry security standards for industrial control  systems (ICS). Moder n SCADA will provide ease of use and advanced functionality for  operators, developers, and system administrators.
o Continue investments with the Fresno Irrigation District for the firm surface water supply. o Design an additional water storage reservoir (Reservoir #9) in the Heritage Grove Growth  Area.
o Installation of an additional pump at Pump Station E to allow for the expansion of recycled  water use city-wide.
x ,QYHVWLQ(PSOR\HHV The budget includes a budgeted cost of living increase and funds for employee benefits. Funds for training and educational opportunities have been included and encouraged to be  used to allow employees to reach their full potential at the City. In addition, new positions have been  added to meet the growing needs of the City.
x Invest in Planning our Future. The budget includes approximately $400,000 related to preparation  of environmental impact reports for development projects and master plans that are currently being  processed. In addition, $1.4 million is included for continued work on the Sixth Cycle Housing Element and the initiation of an update to the General Plan. The Housing Element is expected to be complete  in the fall of 2023.
x Invest in the City’s Economic Future . Staff will be actively working on attracting commercial and  industrial businesses to Clovis to add jobs and revenues to the City. Staff will continue to make  strategic marketing efforts aimed at top revenue producing businesses to support the financial needs  of the City. Relationships are being developed with critical development partners in the community  and assisting projects through the development process. Staff will also be working with regional 238
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partners to develop entrepreneurial and small business growth resources. Staff will continue a focused marketing effort on reinforcing Clovis as a medical hub for services, education, and research leverage with the expansion of Clovis Regional Medical Center and the expansion of California Health Sciences University.
x Serve our Seniors. City funds are budgeted to complete construction work for the new Senior Center and Transit Hub at Landmark Square. Pending approval of the C ounty’s regional library, the City will ensure that a pad area is made available to facilitate its future construction on-site. The new facilities  will more than double the capacity of the library and Senior Center, and offer a new amenity to the  community, a Transit Hub. This will bolster Old Town as the heart of Clovis and leverage the  investment the community has made in the trail system and Old Town.

The 2022-2023 Annual Budget will be available for review at the City Clerk’s Office - 1033 Fifth Street, at the Clovis Branch Library - 1155 Fifth Street, and at the City’s website at www.cityofclovis.com as of May 16, 2022. Individual copies are available for purchase from the Finance Department. Public hearings to consider the Annual Budget will be at the regular City Council meeting of June 13, 2022, and, if needed, June 20, 2022, with adoption scheduled at the conclusion of the hearings.

Our Vision, Our Mission, and Our Guiding Principles
The Vision Statement articulates the most desirable qualities that will define the City of Clovis of the future; it builds on the City’s values and opportunities and serves to inspire its citizens to achieve the community’s potential .O u r Vision and Community Values for Clovis:

A City that is committed to the Clovis Community Family, their needs, their values, and a quality way of life for all; reflecting that commitment in how it develops and in the activities it undertakes.

The Mission Statement developed by the City Council after consultation with citizens provides a statement to summarize those things that really matt er to the City Council in leading the community and delivering services to the citizens of Clovis:

Define and deliver local government better than anyone today and tomorrow.

The guiding principles for achieving and perpetuating Our Vision for Clovis as a livable community and Our Mission as a local government are:
x Keeping focus on Our Vision and Our Mission as the community grows and in the activities we undertake. x Educating and informing the citizens of Clovis and our employees of Our Vision and Our Mission. x Mobilizing citizen support for Our Vision and Our Mission. x Believing that Our Vision and Our Mission will happen through the actions we take. x Providing opportunities for volunteers to contribute to Our Vision and Our Mission. x Providing adequate funding and resources to achieve Our Vision and Our Mission. x Celebrating the successes of Our Vision and Our Mission along the way. x Focusing on the very best for the entire community and withstanding individual pressures to stray from Our Vision and Our Mission.

Fiscal Overview
In March of 2020, it became apparent that the spread of the novel coronavirus was going to severely disrupt the global economy. This disruption did not spare the City of Clovis, but the severity of the impact has not been as deep as expected. While the City’s unemployment rate spiked from 3.2% to 13% in May of 2020, the economy has been rebounding and showing strength despite numerous closur e orders and an uncertain environment, as evidenced by the unemployment rate dropping to 2.5% in March of 2022. The City has also enjoyed higher than average retail sales when compared to other cities and the state, and significantly better occupancy at hotels than both forecasted and experienced elsewhere. The prudent manner that t he City managed its finances and supported Clovis businesses the last two years, along with federal aid, has allowed the City to rebuild its fiscal position. Ongoing concerns are still present with inflation increasing rapid ly and monetary policy shifting, as well as geo-political impacts to supply chains and corresponding disruptions.

The City’s rebound economically can be attributed to many quick actions the City Council took to support businesses, such as: providing accurate information, providing connections to assistance programs, and providing 239
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direct assistance whenever possible during the pandemic. H owever, the key to this recovery has been the effort over many years to build a strong and diverse economy that attracts high quality businesses, employees, and residents to our community. This provided Clovis wit h the resiliency needed to weather the challenges of the COVID-19 pandemic and was especially effective with str ong leadership from the City Council in supporting the community through the crisis. The City is on solid ground economically and rapid expansion is underway with new businesses, ideas, and ways of doing business coming f orth to keep Clovis strong for the long run. The fundamentals of a well-educated community, excellent infrastructure, good land use policies, and a heritage of hard work will provide for an economic engine that gives hope for the future. Continuing a spirit of partnership with Clovis businesses is going to be critical in reaching mutual goals of a vibrant community that allows for success of all residents.

Budget Overview
The 2022-2023 Annual Budget for all funds totals $297.5 million, including $249.1 million in operating expenses and $48.4 million in capital improvement expenditures ($43 million in Community Investment Program from the chart below as well as an additional $5  million of capital projects in other funds). The budget is balanced using current revenues, anticipated rate increases, and capital reserves. This budget represents an 20% decrease compared to estimated expenditures for 2021-2022, due primarily to several large capital projects being completed in the current year and not reflected in the proposed budget. A summary of expenditures by function is provided below:

General Fund
The proposed General Fund Budget is balanced using current year revenues. Expenditures are projected at $93.6 million and represent an increase of 8% compared to th e estimated expenditures for 2021-2022. Revenues are projected at $96.3 million, which is a decrease of 6% when compared to the estimated revenues for 2021-2022.

The summary of General Fund expenditures by function is provided below:

The 2022-2023 Annual Budget projects sales tax revenues to be $31.5 million, which represents a 21% increase from the 2021-2022 Annual Budget. Over the last two years, sales tax experienced dramatic growth due to the shift to online purchases which was exacerbated by the pandemic.California’s AB 147, the Marketplace Facilitator’s Act, also provided vigorous gains in the county pools due to online purchases, of which the City receives a share.

Consumers adapted to the pandemic by bu ying online at a record pace. Alth ough recent acceleration to online buying should continue growing sales tax revenues, future gains are anticipated to subside to levels moderately better than historical levels. Sales tax comprises 44% of the projected discretionary revenue for fiscal year 2022- 2023.

Property tax revenues are expected to continue to rise with the strong residential housing market driving growth.

Commercial property tax revenues will be closely monitore d as they may be impacted by the accelerated shift to General
Government
3%
Public Safety
23%
Planning &
Development
Services
5%
Community
Investment
Program
14%
Public Utilities
26%
Culture & Rec
6%
Internal
Services
23%
Public Safety
74%
General
Government/
Economic Dev
10% Public
Utilities
6%
Cultural &
Recreation
10%
General Government $ 8,838,800
Public Safety 69,893,200
Planning & Development Services 14,873,500
Community Investment Program 43,021,000
Public Utilities 75,386,100
Culture & Recreation 18,531,500
Internal Services 66,943,300
TOTAL $ 297,487,400
Public Safety $6 9 , 8 9 3 , 2 0 0
General Government/Economic Dev. 8,838,800
Public Utilities 5,349,900
Cultural & Recreation 9,501,500
TOTAL $ 93,583,400
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online shopping and remote office work. Property taxes, including in-lieu vehicle license fees, are projected to be $33.5 million in fiscal year 2022-2023, which represents a 5% increase from the previous fiscal year. These property taxes comprise 46% of the projected discretionary revenue for fiscal year 2022-2023.

The American Rescue Plan Act of 2021 (ARPA) is an economic stimulus package adopted by Congress and signed into law on March 11, 2021. ARPA included a wide variety of funding for businesses, residents, local government, and other entities. The City of Clovis received approximately $8.65 million in May of 2021 and is scheduled to receive the second tranche of $8.65 million in May of 2022 . The City of Clovis qualified the use of one-time ARPA funds for public safety salary and benefits, and this all owed unused discretionary revenues to be positioned for various one-time expenditures.

A key to ensuring Clovis’ long-term fiscal health is to accumulate sufficient funds to maintain an Emergency Reserve that is adequate to protect the City against an unexpect ed catastrophic event and for the continuance of essential City services during a rapid economic downturn. The City’s auditors recommend a target amount of 20%-25% as a prudent reserve for a city operation the size of Clovis. T he 2022-2023 Annual Budget includes a transfer of $1.6 million to the Emergency Reserve, which results in a balance of $21 million or 22% of expenditures. The Budget also includes an unassigned fund balance of $4.6 mil lion to be carried forward as a contingency for economic uncertainty and in case of unexpected expenditures or revenue shortfalls.

The General Fund is the only fund with discretionary revenues to fund all or portions of operations, such as Police and Fire protection, streets and parks maintenance, re creation, and senior services. The distinction between “discretionary” and “non-discretionary” revenues is key to understanding the financing of local government core services. It is also the key to understanding how decisions about funding of local government and use of revenues made at the state or local level can affect the City’s core services. Only 25% of the City’s total current year revenues are available for discretionary spending. The remaining r evenues are designated for specific purposes. A more detailed description of the use of discretionary revenues is provided in the Introduction Section of this budget.

Other Funds
Although a major focus of the budget discussion is th e General Fund because it represents the essential core services delivered to citizens and is supported by genera l tax revenues, other funds are no less important. These other funds include the community invest ment funds, enterprise funds, and internal service funds. All these funds are balanced for 2022-2023, utilizing current revenue and reserves when appropriate.

In the Public Utilities Department, Sewer will have a 3% rate increase in this year’s budget and will refund the full $7.30 bond surcharge. The Water Fund will implement th e authorized 3% increase and has two rate schedules:
one for normal conditions and one for drought conditions . This year’s budget anticipates normal conditions .

Community Sanitation will have a 4% increase for recyc ling and greenwaste services and a 1.5% decrease for refuse service. Street sweeping charges are increasing $0.50 to $2.75 per month. The Transit Enterprise Fund and Planning and Development Services Fund (PDS) are fully funded this year. These funds are included in the Summary of Fund Balances and other tables in the Summary of Revenue and Expenditures section of this budget.

The Internal Service Funds are included in this budget and act as cost accumulation and allocation centers. All these funds are fully funded with adequate balances to manage emergencies in the respective operational areas, should the need arise. In addition, the Community Investment Program (CIP) is included in this budget with details included in the CIP section.

The 2022-2023 Annual Budget represents the City being in a strong fiscal position poised to make investments to continue Clovis’ heritage and mission to “ Define and deliver local governme nt better than anyone today and tomorrow”.I wish to thank the Council, the City’s Executive Management Team, and all City Employees for their extraordinary efforts during the past two years as we have continued to provide excellent public service during unprecedented and challenging times. I am confident that we will continue to excel in 2022-2023.

Respectfully submitted,
John Holt
City Manager
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INTRODUCTION
The City of Clovis wa s incorporated on February 27,
1912, as a general law city of the State of California and as such can exercise the powers allowed by the
Constitution and laws of the State of California. The City is governed by the City Council-Manager form of
government in which the City Council determines the
mission, land use, and spending policies of the City and appoints the City Manager to oversee the day-to-day
operation in carrying forward those policies. The City Council consists of five members elected at large for
alternating four-year terms. The City provides the
following services: public safety, animal control, transit, senior services, parks, recreation, economic
development, planning and zoning, building inspection
and engineering, street maintenance, water treatment
and delivery, refuse collection and disposal, sewage
collection and treatment, water reuse, street cleaning, and general administrative services.

In accordance with state law and the Clovis Municipal
Code, the City prepares and adopts an annual balanced
budget on a basis consistent with generally accepted
accounting principles. Annual appropriated budgets are adopted for the General Fund, special revenue funds,
capital project funds, and debt service funds. Spending plans are also adopted for the proprietary funds.

FINANCIAL POLICIES
The City Council has established fiscal policies that govern the City’s financial administration and are designed to safeguard the City’s assets, provide for a stable funding base, and ensure that adequate accounting data is compiled. The accounting data allows for the preparation of various accounting reports such as this budget and the Annual Comprehensive Financial Report (ACFR). Following are the financial policies that provide the basis for the financial direction of the City:
x The City’s budget policy states that all operating budgets shall be balanced, and ongoing costs will not exceed current revenues plus the available fund balanc e that exceeds reserve fund requirements. The minimum reserve for any operational fund is 10% of the budgeted expenditures with the goal for reserves of 20-25%% of budgeted expenditures unless capital borrowing or extraordinary fiscal conditions require that higher levels of reserves be maintained.
x The Enterprise Funds are to be fully supported by user fees and charges, and the Internal Services Funds are to be funded at appropriate levels to ensure reasonable ability to respond to unforeseen events.

Annually, the City has designated a contribution of general funds to the General Government Services Fund (an Internal Service Fund) to address the building space needs for new fire stations, safety training facilities, regional park facilities, business and industrial parks, upgrades and new technology for improved productivity, and major remodeling, repairs, or additions to existing facilities. x The City will not issue long-term debt to cover current operations. The City will consider the issuance of long-term debt to purchase/build capital assets when those assets will benefit users over several years and it is determined that it is more equitable to spread the capital investment and financing costs of the assets to current and future users of the assets.
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AGENDA ITEM NO. 14.
x Annually, the City will have an indepen dent audit of its financial records prepared by a certified public accountant, pursuant to generally accepted auditing standards, and will submit an annual financial report to the City Council by December 31 for the previous fiscal year. x Fees for services provided will be charged directly to users of the services when appropriate and should cover the full cost of service delivery. Fees will be reviewed on an annual basis to ensure that the fee is appropriate for the service provided compared to actual cost or an approved cost index. x Development impact fees will be established with the goal that new growth pays the cost of infrastructure improvements and minimizes the burden to existing residents. x The City will invest available cash assets in a manner consistent with the safeguards and diversity that a prudent investor would adhere to with primary emphasis on preservation of principal, sufficient liquidity to cover anticipated payment outflows, and high yields consistent with the first two goals. The City’s investments will be consistent with Section 53601 of the Government Code of the State of California that identifies which types of investments are eligible for investment of public funds, and the maximum percentage of an investment portfolio that is allowed for any one investment.

The City is in compliance with all of its financial policies.

KEY BUDGET OBJECTIVES
The City intends to maintain facilities and deliver essential core services at levels that will meet the most urgent needs of the community, while keeping expenditures in line with revenues. The following are the key objectives of this budget. For more details on how these objectives relate to departmental goals, refer to the Department Summaries included in the Operations Section.

1. Maximize service levels for public safety, crime prevention, hazard prevention, and emergency response in the community by prioritizing the most urgent demands for services and seeking alternative methods to meet lesser priority demands consistent with the need for sustainable spending.

2. Implement the General Plan and all service and infrastructure master plans.

3. Maintain appropriate service levels that will best promote community appearance and the environment and seek to protect the substantial public investment in streetscapes, parks and trails.

4. Implement an Economic Development Strategy that seeks to facilitate the growth of new or expanding businesses and jobs that improve the overall tax base of the City, improve the diversity of the local economy, and improve the income of residents in the community.

5. Pursue an aggressive capital investment program to provide a safe, clean, and well-maintained community for the residents, to provide first-rate public facilities to serve the City’s population well into the future, and to induce increased local employment from construction contracts; and to provide preventative maintenance as a priority expenditure to avoid greater costs in the future.

6. Provide targeted neighborhood revitalization investments. This is a long-term effort to improve community appearance, neighborhood stabilization, amenities in older neighborhoods, and economic opportunities. These investments total $26.67 million in the 2022-23 budget in funding primarily reinvesting in some of the city’s older neighborhoods.

DISCRETIONARY VERSUS NON-DISCRETIONARY REVENUES
The distinction between these categories of revenue is especially important for the General Fund. It is the key to understanding the financing of general government operations and services. Understanding these categories of revenue makes clear how decisions that are made about funding for local government and use of these revenues can affect these core government services. With constrained sources of revenue, the terms “discretionary” and “non-discretionary” revenues have taken on greater importance.

Discretionary revenues are those for which the City can decide, without restriction, how these funds will be expended and on which programs. Examples of discretionary revenues are property taxes, most sales taxes, and business license fees, all of which may be allocated to support any lawful purpose of the City’s choosing.

Discretionary revenues are used to support the General Fund operations and programs. The primary sources of discretionary revenues are property, sales, and certain other taxes which account for more than 98% of total discretionary funding.
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Non-discretionary revenues have restrictions, and the City must spend these revenues on the programs for which they are intended. Examples of non-discretionary revenues include gas taxes that must be used for street maintenance; and development fees that must be used for land use entitlement processes and inspections or investment in public improvements associated with new development.

The chart below entitled “Summary of Discretionary and Non-Discretionary Revenues 2022-2023” illustrates that only 25% of total annual revenues are discretionary with the remaining 75% non- discretionary. The City’s discretionary revenues this year total $72.4 million, of which $72.1 million are being appropriated in the General Fund and $0.3 million are being transferred to the Planning and Development Services Fund to pay for the public benefit supported by that operation. The remaining $225.0 million of revenues are non-discretionary. Of the discretionary revenues, the chart entitled “Use of Discretionary Revenues 2022-2023” shows that the City will use 87%, or $63.2 million, of the total $72.4 million of discretionary funds for public safety.
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SUMMARY OF

DISCRETIONARY AND NON-DISCRETIONARY
REVENUES 2022-2023
Non-
Discretionary Discretionary Total
Property Taxes 31,080,000 2,445,000 33,525,000
Other Taxes 42,120,000 513,000 42,633,000
Licenses & Permits 1,400,000 4,207,000 5,607,000
Fines & Forfeitures 0 193,000 193,000
Use of Money & Property 60,000 1,054,000 1,114,000
Revenue From Other Agencies 130,000 37,705,000 37,835,000 Charges For Current Services 85,000 173,330,600 173,415,600 Other Revenues 0 726,000 726,000
TOTAL CURRENT FUNDING 74,875,000 220,173,600 295,048,600 (Additions to)/Use of Available Balance (2,423,900) 4,862,700 2,438,800 TOTAL 72,451,100 225,036,300 297,487,400
25%
75%
Discretionary Non-Discretionary
Current Funding
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AGENDA ITEM NO. 14.

USE OF DISCRETIONARY REVENUES
2022-2023
Non- Use of
Total Discretionar y Discretionary
Departments Expenditures Revenues Revenues
City Council 394,500 203,000 191,500
City Attorney 1,113,000 743,000 370,000
City Manager 8,646,600 6,887,300 1,759,300
General Services 61,960,900 59,500,000 2,460,900
Finance 3,765,200 3,115,000 650,200
Police 47,843,700 3,909,000 43,934,700
Fire 22,049,500 2,710,000 19,339,500
Public Utilities 93,819,500 90,374,500 3,445,000
Planning & Development Services 14,873,500 14,573,500 300,000 Community Investment Program 43,021,000 43,021,000 0
TOTAL 297,487,400 225,036,300 72,451,100
Public Utilities
5%
Planning & Dev
Serv
1%
Public Safety
87% General Services
3%
Admin & Econ Dev
4%
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AGENDA ITEM NO. 14.

ECONOMIC OUTLOOK
In March of 2020, it became apparent that the spread of the novel coronavirus was going to severely disrupt the global economy. This disruption did not spare the City of Clovis, but the severity of the impact has not been as deep as expected. While the City’s unemployment rate spiked from 3.2% to 13% in May of 2020, the economy has been rebounding and showing strength despite numerous closure orders and an uncertain environment, as evidenced by the unemployment rate dropping to historic low of 2.5% in March of 2022. The City has also enjoyed higher than average retail sales when compared to other cities and the state, and significantly better occupancy at hotels than both forecasted and experienced elsewhere. The forecasts one year ago were uncertain and it warranted prudence from the City and a focused effort to support businesses in Clovis and residents in need.

The City’s rebound economically can be attributed many quick actions the City Council took to support businesses such as: providing accurate information, providing connections to assistance programs, and providing direct assistance whenever able. However, the key to this recovery has been the effort over many years to build a strong and diverse economy that attracts high quality businesses, employees, and residents to our community. This provided Clovis with the resiliency needed to weather the challenges of the COVID- 19 pandemic and was especially effective with strong leadership from City Council in supporting the community through the crisis.

In addition, it allowed the City to take advantage of the rapidly changing environment by identifying opportunities for the community. Examples of this occurred during the first few hours of the shelter-in-place order with staff developing business ideas to well-positioned entities for supply chain needs and creating products needed to protect the community from the virus. Businesses were saved and created through this effort. The City now has a medical device cluster created out of this crisis. This had been a long-term goal of the City, and the virus necessitated it to occur. Staff also recognized the shift to on-line retail and the need for distribution facilities, a small change was made with Council approval to the Development Code to open up areas where this would be allowed, and potential users considering in-fill projects to take advantage of the market. Staff also saw a large increase of entrepreneurial start-ups in various settings including the Clovis Culinary Center and the Valley Small Business Development Center with Clovis residents launching business ideas to make up for lost employment. The City has resourced these start-ups with assistance and will be bolstering these efforts significantly with investments in this budget.

As we gain deeper knowledge of the economic shifts that rapidly occurred during the pandemic, it has confirmed that the City is on solid ground economically and rapid expansion will be underway with new businesses, ideas, and way of doing business coming forth to keep Clovis strong for the long run. The fundamentals of a well-educated community, excellent in frastructure, good land use policies, and a heritage of hard work will provide for an economic engine that gives hope for the future. Continuing a spirit of partnership with Clovis businesses is going to be critical in reaching mutual goals of a vibrant community that allows for success of all residents.

Upcoming projects that will have a positive effect on the local economy include:
• California Health Sciences University (CHSU) increasing enrollment candidates for becoming medical doctors in the Sierra Gateway Commerce District;
• Further attraction of businesses to the Sierra Gateway Commerce District; • Businesses locating in the expanded Dry Creek Industrial Park and nearby business developments; • Additional expansion of medical facilities at Clovis Community Medical Center and on adjacent properties;
• New hotel developments;
• Targeted investments of $26.67 million that will improve older Clovis neighborhoods and provide economic opportunities;
• Development of approximately 400,000 square feet of industrial buildings on vacant parcels in the Clovis Industrial Business Park beginning in 2022-2023, and the addition of several thousand jobs created by the Fresno County Department of Social Services moving into existing buildings in the area; • The development on the Clovis and Dakota Avenue site into approximately 400,000 square feet of industrial will add at least 1,000 jobs to the City;
• Additional retail coming to the Loma Vista Urban Center; and • Construction of a six-lane expressway on Shaw Avenue from DeWolf to McCall Avenues. 6 250
AGENDA ITEM NO. 14.

FUND ACCOUNTING
The accounts of the City are organized on a basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenses/expenditures. Government resources are allocated to and accounted for in individual funds based on the purposes for which they are to be spent. The various funds are grouped into three broad categories as follows:

Governmental Fund Types - Governmental funds are used to account for all of the City's general activities, including the collection and disbursement of earmarked monies (special revenue funds), the acquisition of or construction of general fixed assets (capital projects funds), and the servicing of general long-term debt (debt service funds). The General Fund is used to account for all activities of the general government not accounted for in some other fund.

Proprietary Funds - Proprietary funds are used to account for activities similar to those found in the private sector, where the determination of net income is necessary or useful to sound financial administration and the primary intent is to recover the costs of providing the goods or services through user charges. Goods or services from such activities can be provided either to outside parties (enterprise funds) or to other departments or agencies primarily within the government (internal service funds).

Fiduciary Funds - Fiduciary funds are used to account for assets held on behalf of outside parties in a trustee capacity. Assessment Districts fall within this category as does the Redevelopment Successor Agency.

BASIS OF BUDGETING
The budgets of the gove rnmental fund types (General Fund, special revenue, capital projects, debt service, and assessment districts) are prepared on a modified accrual basis. This means expenditures are recorded when the liability is incurred, and revenues are recognized if they are received during the fiscal year or shortly thereafter. In addition, the City treats encumbrances as expenditures only for budgetary control purposes.

Encumbrances open at year-end are reported as assignments of fund balances since they do not constitute expenditures or liabilities. Available expendable resources include beginning fund balance and current year revenues and transfers from other funds.

The spending plans for the proprietary fund types, comprised of internal service funds (employee benefits, fleet, liability and property insurance, and general services) and enterprise funds (water, sewer, community sanitation, planning and development services, and transit), are prepared on a full accrual basis. Expenses are recorded when the liability is incurred, and revenues are recognized when the service is provided.

Exceptions exist in the way the City prepares its spending plans for the enterprise funds and the way they are reported in the City's Annual Comprehensive Financial Report (ACFR). Depreciation on assets is not shown in the spending plan, but expenditures for capital are shown at the full purchase price. The ACFR shows depreciation but not the capital expenditure, which is in accordance with generally accepted accounting principles. Available expendable resources for proprietary funds include beginning working capital, current revenues, and transfers in. Beginning working capital is defined as current assets less current liabilities; in other words, working capital represents cash available to pay expenses.

FIVE-YEAR COMMUNITY INVESTMENT PROGRAM
Based on the City’s Master Development Plans, the program consists of broad evaluation and establishment of priorities for capital projects essential for future dev elopment, as well as the replacement of existing City facilities as needed to ensure the continued delivery of services to the public. An important part of the process of developing the community investment program for capital improvements is determination of the logical order of construction of projects included in the master plans so that underground work is well coordinated to be accomplished in advance of above groundwork. Public service programs and the master plans are the principal bases for determining general priorities. Other factors, however, may influence the final decision as to when a particular project is to be undertaken, such as public demand, major commercial or industrial users, the need to coordinate with other jurisdictions, or even special funding. The five-year community investment program is not designed to do all things that need to be done, but rather to develop a reasonable program of public needs and a dependable order of urgency for each project in relation to other projects. The preparation of the capital budget provides greater assurance that the projects will be undertaken in order of need, that overlapping projects will be avoided, that costly mistakes can be avoided, and that all projects can be 7 251
AGENDA ITEM NO. 14.
coordinated with each other. Below are a few highlights of projects included in the Five-Year Community Investment Program:
• Reconstruction of Fire Station 2 on Minnewawa Avenue south of Shaw Avenue • Dog Park improvements at Sierra Bicentennial and Letterman parks • Southwest area trail opening and improvements (Gould Canal Trail) • Construction of traffic signals at Armstrong/Nees and Shepherd/Peach intersections • Design of roundabout at Dewolf Avenue and Owens Mountain Parkway • Design of adaptive coordination systems for Shaw, Herndon, and Shepherd Avenues • Continued improvement and maintenance of the City’s infrastructure including street rehabilitati on and sewer and water collection/distribution facilities
• Design of water reservoir #9 at Sunnyside and Perrin Avenues

BUDGET PROCESS
The proposed budget is required by City Ordinance to be submitted to the City Council by the third meeting in May for the upcoming fiscal year (which begins July 1 and ends June 30). The Council holds public hearings following the submittal of the budget, and may add to, subtract from, or change appropriations within revenues and reserves estimated as available. The Council is required to adopt a balanced budget by June 30. If a balanced budget is not adopted by June 30, in order to ensure continuity of government services, the City Manager’s proposed budget becomes effective (excluding capital expenditures).

As part of the budget process, City staff prepares a five-year forecast that analyzes the City's long-term fiscal condition. It identifies trends and issues that must be addressed early in order to ensure the City's continued financial success in meeting the service needs of the City's residents. These planning sessions are intended to identify Council goals and priorities for the upcoming year. The departments then provide budgetary requests necessary to provide the services required to meet the Council goals. Once the City Manager confirms that the budget is structurally balanced with current resources sufficient to cover current expenditures, the Finance Department accumulates the data into a budget book representing the proposed budget that is submitted to Council.

Following adoption of the budget, it is sometimes necessary to amend the budget. The City Manager may transfer any appropriation within a specific fund not to exceed $5,000 for appropriations and $2,500 for reserves. Transfers exceeding these amounts require Council action. Also, the Personnel section from time to time may require an amendment should additional staffing be necessary, or should the complement of staff require adjustment. These changes also require Council action.

BUDGET CALENDAR
March 11, 2022
March 14 - April 15, 2022
May 16, 2022
June 13, 2022
June 13, 2022
Departmental Submittal (including CIP)
City Manager Budget Review
Introduction of Recommended Budget to City Council
Council Budget Review and Public Hearings
Adoption of Budget

BUDGET CONTROL
Budgetary control is maintained at the department level by fund for both expenditures and personnel. The City utilizes encumbrance accounting in governmental funds under which purchase orders, contracts, and other commitments for expenditures are recorded to reserve the budgeted line item. Monthly reports to staff and quarterly reports to Council are utilized to affect budgetary control and reporting.

APPROPRIATIONS LIMITATION
In November of 1979, California vo ters approved a constitutional amendment that established an Appropriations Limitation for the state and local governments. In June of 1990, the electorate approved Proposition 111 that amended the provisions of the constitution to provide for the adjustment of the Limitation.

The formula now used to calculate the Appropriations Limit is the percentage change in California Per Capita Income (PCI) or the percentage change in valuations of non-residential construction (NRC) plus the percentage change in the City's population or the County's, whichever is greater. The State Department of Finance historically provides the City with the population estimates and the California PCI on May 1 st. Due to time
8 252
AGENDA ITEM NO. 14.
constraints, the City has estimated the population and the California PCI for the current proposed budget. The City’s population increased approximately 2.60% from 2021. The percentage change in the California PCI was approximately 5.73%. The change in non-residential construction was 1.49%. Therefore, the change in PCI is used.

Appropriations Limitation 2021-2022 $344,521,822
Add: Change in Population (2.60%) 8,957,567
$353,479,389
Add: Change in PCI (5.73%) 20,254,369
Appropriations Limitation 2022-2023 $373,733,758
Less: Proposed Expenditures Subject to Limitation in 2022-2023 78,201,996 Amount of Unused Authorized Appropriations $295,531,762 Over the past five years, the City of Clovis’ expenditures have been less than the appropriation (approximately 25% of the limit); therefore, it is not likely that the City of Clovis will reach the Appropriations Limit in the future.

It is recommended that the Council's adoption of the Budget include the establishment of the City's Appropriations Limitation for the 2022-2023 fiscal year at $373,733,758. ____________________________________
9 253
AGENDA ITEM NO. 14.

DESCRIPTION AND PURPOSE

OF ACCOUNTING FUNDS
The information below provides a brief outline for each of the funds utilized by the City to account for revenue and expenditures for the various activities of the City.

Community Facilities District 2020-1 Fund
The Community Facilities District 2020-1 Fund is a
special revenue fund that houses the collection and
spending of tax assessments within Community
Facilities District 2020-1. Assessments collected will
be used to finance all costs associated with the
maintenance and operation of certain public sewer
facilities and the eventual replacement thereof.

Community Sanitation Fund
The Community Sanitation Fund, which is self-
supporting from fees, is operated as a City business
or "enterprise." All costs including depreciation are
recorded in this fund. All revenue from service
charges related to the collection and disposal of
solid waste, recycling, greenwaste, and street
sweeping fees is deposited into this fund.

Employee Benefits Fund
This fund accounts for the cost of employee
benefits including retirement, workers'
compensation, health insurance, unemployment
insurance, and social security and Medicare
insurance. The source of funding is a charge to all
departments with personnel.

Fleet Maintenance and Replacement Fund
This fund accounts for the expenditures for
maintaining the City's fleet and for equipment
replacement. The source of funding is rental and
replacement charges to all operating departments
that use vehicles or equipment.

General Fund
The purpose of the General Fund is to account for
general government activities such as public safety,
planning, some public works, and revenue
collection administration. All local tax revenues,
building fees, certain user charges, and all
discretionary revenues are deposited in the General
Fund. The General Fund also receives
non-discretionary revenues related to specific
activities that are performed by the operating
sections within the General Fund.

General Government Services/Facilities Fund
This fund accounts for centralized support provided
to other departments including computer services,
central supplies, communications, energy, and
janitorial services and for government facility
maintenance, enhancements, and acquisitions.

The sources of funding come from a charge to all
operating departments.

Housing & Community Development Fund
This fund accounts for the operations of the
Housing and Community Development Program.

The funding source is the Housing and Community
Development Block Grant.

Housing Successor Fund
This fund was created to continue those City
managed housing projects not affected by the
State’s elimination of Redevelopment Agencies.
10 254
AGENDA ITEM NO. 14.

Landscape Maintenance Fund
This fund accounts for the expenditures of the
Landscape Maintenance Districts.

Liability and Property Insurance Fund
This fund accounts for the cost of general liability
and property damage claims and insurance. The
source of funding is from a charge to all operating
departments.

Park Projects Fund
This fund accounts for the revenue, primarily from
developer fees and park grants, for the purpose of
park development, including acquisition of property.

Also, as needed, funds are transferred from this
fund to the Park Bond Debt Service Fund for
payment of the annual principal and interest on the
Park Bonds, which were used for park acquisition
and development.

Planning & Development Services Fund
This fund accounts for the activities of the building,
planning, and engineering departments of the City.

Revenue is mainly generated from permit fees for
services provided.

Sewer Construction-Developer Fund
This fund accounts for the revenue from developer
fees from the Major Facilities Sewer charge and to
account for capital improvements for major trunk
sewer projects and expansion at the treatment
plant.

Sewer Construction-Enterprise Fund
This fund accounts for capital expenditures for
sewer main construction. Funds are transferred
into the fund from the Sewer Service Fund for user-
related projects and from the Developer Trust Fund
as reimbursements are made for developer
projects.

Sewer Service Fund
This enterprise fund accounts for the operation and
maintenance of the City's sanitary sewer system,
including operating costs of the City's share of the
Fresno-Clovis Wastewater Treatment Facility. The
fund is self-supporting from sewer user fees.

Street Construction Fund
This fund accounts for the capital street projects
paid for out of the City's share of Transportation
Development Act (SB 325) funds allocated by the
state, 1/2 cent sales tax for transportation, Special
Gas Tax Select Street funds, and federal funding
sources under the Federa l Intermodel Surface
Transportation Efficiency Act. In addition, funds are
transferred from the Developer Trust Fund as
reimbursements are made for developer-financed
projects.

Successor Agencies Fund
This fund was established to manage the wind
down of the Clovis Community Development
Agency. State actions eliminated Redevelopment
Agencies effective 1/31/12 and required the
creation of this fund.

Transit Fund
This fund accounts for the operation of the City's
transit system including Stageline and Round-Up
and services contracted from Fresno Area Express
(FAX). The sources of funding for this activity are
SB 325 monies, farebox revenues, and 1/2 cent
sales tax for transportation.

Water Construction-Developer Fund
This fund accounts for the revenue from developer
fees and for capital improvements for major water
lines, water wells, and other major capital
improvements.

Water Construction-Enterprise Fund
This fund accounts for revenue from developer fees
and expenditures for installation of water mains.

Water Service Fund
This enterprise fund accounts for revenues from
delivery of water and the related expenditures to
operate and maintain the water system. Funds are
transferred from this fund to the Water Main
Construction Fund for system maintenance and
upgrades.

11 255
AGENDA ITEM NO. 14.

City Of Clovis Organization Chart

MAYOR AND

CITY COUNCIL

CITY MANAGER

ASSISTANT CITY MANAGER

PLANNING COMMISSION

PERSONNEL COMMISSION

CITY ATTORNEY

CITIZENS OF
CLOVIS

GENERAL SERVICES DEPARTMENT

PERSONNEL/RISK MANAGEMENT

SENIOR SERVICES

PUBLIC TRANSIT

RECREATION SERVICES

FACILITIES MAINTENANCE

PURCHASING

CITY MANAGER DEPARTMENT

ECONOMIC DEVELOPMENT

HOUSING & COMMUNITY DEVELOPMENT

CITY CLERK OPERATIONS

INFORMATION TECHNOLOGY

SUCCESSOR AGENCY

FINANCE DEPARTMENT

ACCOUNTING/REPORTING

UTILITY BILLING

BUDGETING

CITY TREASURER

FIRE DEPARTMENT

OPERATIONS

TRAINING

FIRE PREVENTION

EMERGENCY PREPAREDNESS

PLANNING AND DEVELOPMENT

SERVICES DEPARTMENT

PLANNING

BUILDING

ENGINEERING SERVICES

COMMUNITY INVESTMENT PROGRAM

POLICE DEPARTMENT

ADMINISTRATION & SUPPORT SERVICES

COMMUNICATION

PATROL & JAIL SERVICES

INVESTIGATIONS

YOUTH & ANIMAL SERVICES

PUBLIC UTILITIES DEPARTMENT
WATER
:$67(:$7(5
COMMUNITY SANITATION
PARKS
STREET MAINTENANCE & LIGHTING 
FLEET
12 256
AGENDA ITEM NO. 14.

City Manager Department

CITY MANAGER

EX ECUTIVE

MANAGEMENT TEAM

ADMINISTRATIONCITY CLERK ASSISTANT CITY

MANAGER

HOUSING &

COMMUNITY

DEVELOPMENT

INFORMATION

TECHNOLOGY

COMMUNITY &

ECONOMIC

DEVELOPMENT
13 257
AGENDA ITEM NO. 14.

General Services Department

GENERAL SERVICES

DIRECTOR

PERSONNEL

RISK MANAGEMENT

COMMUNITY SERVICES DEPARTMENT SUPPORT

PERSONNEL SERVICES SENIOR SERVICES PURCHASING

FACILITIES

MAINTENANCE

RECREATIONEMPLOYEE BENEFITS

RISK MANAGEMENT PUBLIC TRANSIT
14 258
AGENDA ITEM NO. 14.

Finance Department

FINANCE DIRECTOR

CITY TREASURER

ACCOUNTING INVESTMENT AND

REVENUE

BUDGETING

FORECASTING

FINANCIAL

REPORTING
BOND

ADMINISTRATION

BILLING AND

COLLECTION
GRANT

ACCOUNTING

INVESTING
COST

ACCOUNTING
15 259
AGENDA ITEM NO. 14.

Planning and Development Services Department

PLANNING AND DEVELOPMENT SERVICES

DIRECTOR

PLANNING

DIVISION

BUILDING

DIVISION

ENGINEERING

DIVISION

ADVANCE PLANNING

CURRENT PLANNING

ANNEX ATIONS

PERMIT PROCESSING ENGINEERING

ADMINISTRATION

CAPITAL

IMPROVEMENTS

CONSTRUCTION

MANAGEMENT

INSPECTIONS

DEVELOPMENT
REVIEW

RESIDENTIAL

COMMERCIAL
16 260
AGENDA ITEM NO. 14.

Police Department

CHIEF OF POLICE

ADMINISTRATION &

SUPPORT SERVICES

PROPERTY &

ADMINISTRATION

OPERATIONS YOUTH & ANIMAL

SERVICES

PATROL PROPERTY &

EVIDENCE
BUDGET

CHAPLAINS &

VOLUNTEERS
JAIL

RESERVES

HOMELESS/
MENTAL

HONOR GUARD
GRANTS

TRAINING

INTERNAL

AFFAIRS

INJURIES W/C
FLEET
PUBLIC

RECORDS ACT

NEIGHBORHOOD

SERVICES

RECORDS &
PUBLIC
ANIMAL

RESPONSE TEAM

MISS WINKLES PET

ADOPTION CENTER

NON-PROFITS

RECEIVING &

CARE CENTER

GRAFFITI

ABATEMENT

JUVENILE

WORK PROGRAM

DIVERSION
SOCIAL
WORK

EX PLORERS
YOUTH

LEADERSHIP

JUVENILE DRUG

EDUCATION

INVESTIGATIONS
K9 SPECIAL

ENFORCEMENT
TEAM
CRIME

ANALYSIS

WELLNESS &

FITNESS
MAGEC/
HEAT

FBI-TERRORISM

TASK FORCE
AB109-ACT

CRIME SCENE

INVESTIGATIO N

HOMELAND

SECURITY

COMPUTER

FORENSICS
EOD
FIELD

TRAINING

PITCHESS

BIKE UNIT

MOBILE FIELD
FORCE

SWAT/CNT

POLICY &

PROCEDURES

MUTUAL AID

TRAFFIC
CUSD

LIAISON
UAV

PIO & MEDIA

TECHNOLOGY
17 261
AGENDA ITEM NO. 14.

Fire Department

FIRE CHIEF

EMERGENCY

SERVICE BUREAU

LIFE SAFETY &

ENFORCEMENT BUREAU

SUPPORT

SERVICES

TRAINING

COMMUNICATIONS

OPERATIONS

EMERGENCY

PREPAREDNESS
FIRE

INVESTIGATIONS

ADMINISTRATION
FIRE

PREVENTION
BUDGET

ACCREDITATION

STRATEGIC

PLANNING

PERSONNEL
SHIFT

OPERATIONS

SPECIALIZED
TEAMS
FLEET

FACILITIES

LOGISTICS
18 262
AGENDA ITEM NO. 14.

Public Utilities Department

PUBLIC UTILITIES

DIRECTOR

UTILITIES & FLEET ADMINISTRATION, SAFETY
& TECHNICAL SERVICES

SANITATION, STREETS &
PARKS

WATER SUPPLY
& DISTRIBUTION

WASTEWATER

STORM DRAINAGE

SOLID WASTE

COLLECTION

LANDFILL

OPERATIONS

RECYCLING

ADMINISTRATION

STREET CLEANING

PARKS/LANDSCAPE

MAINTENANCE
STREET

MAINTENANCE

STREET LIGHTING
FLEET

MAINTENANCE

ADMIN & CLERICAL

UTILITIES PLANNING
& ENGINEERING

SAFETY & COMPLIANCE
19 263
AGENDA ITEM NO. 14.

Clovis Successor Agencies


COMMUNITY & ECONOMIC

DEVELOPMENT DIRECTOR

ECONOMIC

DEVELOPMENT

SUCCESSOR
AGENCY

AFFORDABLE

HOUSING
20 264
AGENDA ITEM NO. 14.

City Departments by Fund Type

CITY OF CLOVIS

GOVERNMENT FUND TYPES

ENTERPRISE FUND

GENERAL SERVICES

PLANNING & DEVELOPMENT SERVICES

PUBLIC UTILITIES

GENERAL FUND

CITY ATTORNEY

CITY CLERK

CITY COUNCIL

CITY MANAGER

FINANCE
FIRE

GENERAL SERVICES
POLICE

PUBLIC UTILITIES

INTERNAL SERVICE FUND

GENERAL SERVICES

PUBLIC UTILITIES
21 265
AGENDA ITEM NO. 14.

CITY OF CLOVIS
2022-2023 MANAGEMENT STAFF

John Holt, City Manager
Andrew Haussler, Assistant City Manager
Karey Cha, City Clerk
Scott Cross, City Attorney
Curt Fleming, Police Chief
John Binaski, Fire Chief
Jay Schengel, Finance Director/Treasurer
Shonna Halterman, General Services Director
Renee Mathis, Planning & Development Services Director
Scott Redelfs, Public Utilities Director

BUDGET PREPARATION TASK FORCE

John Holt, City Manager
Jay Schengel, Finance Director

Andrew Haussler
Gina Daniels
Jeff Blanks
Susan Evans
Jose Reynoso
Jose Cortez
Ran Chan
Thad Avery
Rebecca Simonian
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AGENDA ITEM NO. 14.
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AGENDA ITEM NO. 14.
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AGENDA ITEM NO. 14.

FUND BALANCE SUMMARY
This section contains information about the various funds utilized by the City presented in summary form. The narrative, Highlights of Fund Activities, provides facts about the major fund groups. The information is intended to present to the reader, in a condensed form, important data about each fund group.

The Summary of Resources and Appropriations, which follows the Highlights, provides a very concise presentation of the various funds. For each fund, the Summary includes the estimated beginning fund balance as of July 1, 2022; the total estimated revenue for 2022-2023; the total proposed budget expenditures for 2022-2023; and the projected ending fund balance for each fund as of June 30, 2023.

The Notes to Resources and Appropriations Summary, immediately following the Summary of Resources and Appropriations, provides detail on the various fund transfers along with notes about fund presentation and is an integral part of the Summary.

These schedules provide, in a condensed form, an overview of the financial position of the City for the budget year.
23 269
AGENDA ITEM NO. 14.

FUND HIGHLIGHTS

General Fund - General Fund expenditures are being funded through current year revenues and use of fund balance. Projected revenues are $96.3 million which is $5.7 million or 6% less than the revised revenues for 2021-2022. Revenues for 2022-23 are decreasing in total due mainly to one-time funds received related to state and federal stimulus funds and grant reimbursements for wildfire suppression received in the prior year.

Proposed expenditures are $93.6 million and represent $7 million or 8% more when compared to 2021-2022 estimated expenditures. The increase in 2022-2023 projected expenditures is largely due to increased costs for employee benefit programs including retirement and health insurance along with general price increases on the cost of services and supplies contributed to the increase in expenditures. Lastly, expenditure accounts such as travel and training that were frozen in response to the pandemic were restored. Six new positions are recommended for the General Fund for 2022-2023. There are four in the Police Department, one in the City Manager’s Department and one in the Public Utilities Parks Division. The General Fund has $21 million, or 22% of expenditures, designated as an emergency reserve. The General Fund also reflects $4.6 million unreserved, unassigned balance available to offset the impact of any revenue shortfall or cover any unexpected expenditures that do not meet the emergency designation.

Special Revenue Funds - The Housing and Community Development Fund projects a fund balance of $1.0 million for 2022-2023 with current program costs funded using capital funds for projects and revenues sufficient to cover current operational program costs. The Landscape Assessment District Fund shows a projected fund balance of $8.2 million for 2022-2023. This amount is being accumulated for required reserve and future equipment replacement. The Community Facilities District 2020-1 shows a projected fund balance of $27,600.

Internal Service Funds - All of the City’s Internal Service Funds have adequate revenues or reserves to cover current operating requirements. All In ternal Services Funds derive revenue primarily from charges to user departments. One new position is recommended for 2022-2023. The General Government Facilities Fund includes a limited number of minor projects with the reserves committed to future debt service obligations.

Enterprise Funds - All of the City’s Enterprise Funds show sufficient revenue and working capital to meet current operating requirements. With the increase in development over the last few years, the City has rebated utility customers the Sewer bond coverage charge of $7.30 per month. The City will continue to rebate the $7.30 per month Sewer bond coverage charge in 2022-2023. Sewer operations have an authorized 3% escalator, which is included in the proposed budget. The Community Sanitation Enterprise has an approved 4% increase effective every July 1 as needed. The need for this increase has been reviewed and will be implemented effective July 1, 2022 for the Recycling and Greenwaste programs. A smaller 1.5% decrease will be implemented effective July 1, 2022 for the Refuse program. The Water Enterprise Fund reflects the approved 3% rate increase effective July 1, 2022, with rate increases approved in future years if necessary. The Sewer Enterprise will loan the Developer Funds adequate monies to pay debt service and will maintain sufficient balances to meet bond covenants for coverage on the bonds. The Water/Sewer/Community Sanitation operations will add five new positions in 2022-2023 to accommodate continued growth of the City. The Transit Enterprise will continue utilizing the annual money received from State Transit Assistance (STA) to improve transit services and for capital improvements. The Transit Enterprise has no new recommended positions in 2022-2023. The Planning & Development Enterprise has observed a slight slowdown in commercial and residential construction Staffing is being adjusted to accommodate this observation with one new position and one position eliminated for 2022-2023.

Capital Improvements - Several major projects are included in the 2022-2023 budget and are listed in the Community Investment Program Section . The City has also identified several major projects in the Five- Year Community Investment Program Section for years beyond 2022-2023 that do not currently have funding sources identified.

More details regarding the recommended positions included in the 2022-2023 budget in the General Fund , Internal Service Funds, and Enterprise Funds are included in the Personnel Section. 24 270
AGENDA ITEM NO. 14.

SUMMARY OF

RESOURCES AND APPROPRIATIONS
2022-2023
Beginning Current Ending
Fund Balance Transfers Resources Expenditures Balance

GENERAL
General Fund* 3,832,600 (1,905,000) 96,308,000 93,583,400 4,652,200

SPECIAL REVENUE FUNDS
Housing & Community Develop. 1,056,400 0 210,000 307,800 958,600 Landscape Assessment Dist 7,270,000 0 5,623,000 4,693,000 8,200,000 Community Facilities Dist 2020-1 27,300 0 33,000 32,700 27,600 Total Special Revenue 8,353,700 0 5,866,000 5,033,500 9,186,200

INTERNAL SERVICE FUNDS
Liability & Property Insuranc
e 1,993,700 0 5,017,000 5,126,000 1,884,700
Employee Benefits 10,645,800 0 34,905,800 35,605,200 9,946,400 Fleet Maintenance 15,716,100 992,000 12,960,600 11,547,000 18,121,700 General Government Services 7,723,000 0 15,103,200 14,665,100 8,161,100 Total Internal Service 36,078,600 992,000 67,986,600 66,943,300 38,113,900

ENTERPRISE FUNDS
Community Sanitation 10,917,400 150,000 22,427,000 25,604,100 7,890,300 Sewer Service 25,023,500 700,000 15,183,000 18,632,500 22,274,000 Water Service 21,846,300 (1,250,000) 21,441,000 21,073,900 20,963,400 Transit 33,700 (600,000) 9,298,000 8,722,200 9,500
Planning & Development Service 9,863,800 300,000 14,706,000 14,873,500 9,996,300 Total Enterprise 67,684,700 (700,000) 83,055,000 88,906,200 61,133,500

CAPITAL IMPROVEMENT FUNDS
Sewer Construction 1,655,800 (700,000) 7,774,000 7,154,000 1,575,800 Park Projects 1,038,200 0 2,881,000 1,543,000 2,376,200 Street Construction 16,211,400 0 14,422,000 17,832,000 12,801,400 Water Construction 4,553,800 1,250,000 5,759,000 7,369,000 4,193,800 Housing & Community Develop. 300,000 0 7,335,000 7,635,000 0 Refuse Construction 0 0 1,000,000 1,000,000 0
General Govt Facilities 0 1,213,000 2,662,000 488,000 3,387,000 Total Capital Improvement 23,759,200 1,763,000 41,833,000 43,021,000 24,334,200 139,708,800 150,000 295,048,600 297,487,400 137,420,000 Beginning Ending
Balance Transfers Additions Deductions Balance

SUCCESSOR AGENCIES TRUST FUND
Clovis Successor Agencies** 924,000 0 1,383,000 1,367,000 940,000 * The General Fund maintains a $21,000,000 set aside, or 22% of expenditures, as an emergency reserve as directed by the City Council.
**The Clovis Successor Agencies are Private Purpose Trust Funds and as such are reported separately and not included in Citywide totals.
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AGENDA ITEM NO. 14.

NOTES TO RESOURCES & APPROPRIATIONS

SUMMARY

1. Summary of Transfers
Interfund operating transfers are legally authorized transfers from one fund receiving revenue to the fund where the resources are to be expended.

Amount From To Purpose
$ 300,000 General Fund Planning and Dev General Fund supported activity Services Fund
60,000 General Fund General Services Police Dispatch kitchen remodel 75,000 General Fund General Services Fire SCBA equipment replacement 300,000 General Fund General Services Capital needs assessment 43,000 General Fund General Services Fire Station #2 water drainage 50,000 General Fund General Services Police/Fire HQ parking lot repair 85,000 General Fund General Services Fiber optics system 600,000 Transit General Services Landmark Square Transit Bldg. 17,000 General Fund Fleet Maintenance Fire vehicles
975,000 General Fund Fleet Maintenance Police vehicles
150,000 Comm Sanitation Cap* Comm Sanitation Oper Acquisition of refuse containers 270,000 Sewer Capital-Dev Sewer Service Capital projects 430,000 Sewer Capital-Dev Sewer Service Developer share of debt service 750,000 Water Service Water Capital-Dev Debt service
500,000 Water Service Water Capital-User Water system improvements

2. For presentation purposes, several funds were combined on the Summary of Fund Balances as follows:

Sewer Capital -
Sewer Capital-Enterprise
Sewer Capital-Developer
Water Construction -
Water Capital-Enterprise
Water Capital-Developer
*Community Sanitation Capital Fund is unbudgeted and as such, is not shown on the preceding schedule, but is fully disclosed in the City's Annual Financial Report. 26 272
AGENDA ITEM NO. 14.

SUMMARY REVENUES AND EXPENDITURES
The following summary schedule provides an excellent overview of the City's 2022-2023 revenues and expenditures. The schedule on the following page combines all the City's funds into one summary schedule while the “2022-2023 Budget Summary-By Fund” provides a summary of revenues and expenditures for each fund.

Care needs to be taken when attempting to draw conclusions from summary schedules, especially when comparing one budget year to prior years. Because of the up-and-down nature of capital project expenditures, the City's total budget can experience wide swings from year to year. An example of this may be a large street or sewer project that is budgeted in one budget year and may not exist in the next. This type of project may increase the budget by several million dollars in any one year.

The reader should also be aware that the majority of the City's revenue and expenditures are restricted to specific purposes and cannot be transferred from one fund to another. As was indicated in the City Manager's letter and further discussed in the Introduction Section, the General Fund is the only fund with discretionary revenues to pay for City services, such as police and fire. The other funds are restricted in their use, such as the Water Enterprise Fund, which can only be used to pay expenses related to water delivery.

Following the summary schedules is a detailed description of major revenue sources. We are providing historical trends, budgeting assumptions, and other information as appropriate.

The "2022-2023 Budget Summary-All Funds" includes all funding sources and expenditures for all Governmental and Proprietary Funds. A review of the revenue shows that “Charges for Current Services” is the largest revenue source followed by "Charges to Other Departments”. Included in "Charges for Current Services" are the charges for the City's Enterprise Funds (water, sewer, refuse, etc.). This revenue source makes up 36% of the total funding sources. The source "Charges to Other Departments" reflects interfund charges, or revenue derived, by the City's Internal Service Funds such as General Services, Employee Benefits, Fleet Services, and Liability and Property Insurance to other operating funds for services received from the Internal Service Funds. This funding source reflects 23% of the total. (Please read the note at the bottom of the “2022-2023 Budget Summary-All Funds” about the effect Internal Service Fund charges have on the City's revenues and expenditures.) Property Taxes, show an increase due primarily to expected countywide growth, improving property values from prior years, and the statutory Prop 13 increase of 2% or California CPI, whichever is less. The California CPI for 2022-2023 is 2%.

Property taxes account for 11% of the City’s revenue. The revenue source “Sales & Use Tax” which accounts for 11% of total revenue, is projected to increase due to the positive impact of AB-147 and its significant increase to the sales and use tax pools from online retailers.

Overall the City budget is lower when compared to the prior year. Capital outlays/improvements account for 16% of the total budgeted expenditures in 2022-2023 and are decreasing when compared to the 2021-2022 estimated budget amounts. The combined totals for all salaries and benefits, which account for 34% of the total expenditures, are showing an increase from the previous year due to the net addition of twelve positions for this fiscal year. Reflected in the category “Administrative and Overhead,” which makes up 9% of the total, is the expenditure side of the interfund charges by the City’s Internal Service Funds. This expenditure reflects costs such as computer services, communications, energy, and office supplies. The expenditure category “Employee Related ISF Charges” which accounts for 12% of total expenditures is another interfund related expenditure account and reflects the internal transfer of a portion of employee benefits.

Again, the reader is requested to view each of these revenue and expenditure categories on a per fund and departmental basis along with looking at a "Total Summarized Picture." Each of the department presentations included in the Operational Section will provide further information about the programs and proposed expenditures for each department.
27 273
AGENDA ITEM NO. 14.
2020-2021 2021-2022 2022-2023

ACTUAL ESTIMATED BUDGET

FUNDING SOURCES
Property Taxes 30,285,062 32,100,000 33,525,000
Sales & Use Tax 27,526,307 30,031,000 31,528,000
Other Taxes 9,710,603 10,445,000 11,105,000
Licenses and Permits 4,502,539 4,770,500 5,607,000
Fines 150,920 192,500 193,000
Use of Money & Property 4,587,241 1,379,900 1,114,000
From Other Agencies 39,921,349 68,555,600 37,835,000
Charges for Current Services 87,737,417 106,402,000 106,152,000 Other Revenues 3,700,983 1,382,000 726,000
Charges to Other Departments-ISF 54,096,541 62,584,500 67,263,600 Other Financing Sources 31,267 51,200 0
Total Revenues and Othe
r
Financing Sources 262,250,229 317,894,200 295,048,600
Beginning Fund Balances 129,230,754 153,457,803 101,730,603 Total Available Resources 391,480,983 471,352,003 396,779,203

EXPENDITURES/EXPENSES
Salaries-Regular 48,017,443 51,036,100 56,868,400
Overtime 6,590,919 7,094,700 5,542,000
Extra Help 2,201,561 2,551,700 3,142,700
Benefits 28,597,006 31,390,300 34,547,800
Vehicle Charges 10,401,400 11,124,300 13,452,000
Energy 7,529,449 8,120,300 8,724,400
Communications 771,293 589,600 653,000
Professional Services 28,745,791 25,945,900 29,970,900
Repair and Maintenance 3,748,526 5,696,600 5,749,300
State Mandates 943,914 1,075,000 1,080,000
Special Events 56,233 84,500 107,500
Building and Equipment Rental 13,480 27,000 52,000
Office Supplies 528,304 663,100 667,700
Materials and Supplies 5,312,607 6,008,400 6,729,000
Travel and Meeting Expense 104,464 291,800 367,300
Training 610,268 951,900 1,072,100
Dues and Subscriptions 344,590 446,500 460,100
Administration and Overhead 21,089,709 26,574,900 26,049,700 Employee-Related ISF Charges 26,082,619 30,910,300 34,793,600 Liability Insurance Prog-ISF 2,707,150 3,919,500 4,772,700 Debt Service 14,613,365 14,466,000 14,297,000
Capital Outlays/Improvements 29,563,089 140,803,000 48,388,200 Total Expenditures/Expenses and Other Uses 238,573,180 369,771,400 297,487,400 Net Operating Transfers * 550,000 150,000 150,000
Ending Fund Balances 153,457,803 101,730,603 99,441,803 2022-2023 BUDGET SUMMARY - ALL FUNDS
Included in the schedule below are items that are not considered revenue/expenses for financial reporting purposes. These items are:

Long-term Debt (COPs and loans; included in "Other Financing Sources") -- Reported as liabilities for financial reporting Principal payments on long-term debt (included in "Debt Service") -- Reported as a reduction to liabilities for financial reporting Capital additions (included in "Capital Outlays") -- Reported as fixed assets for financial reporting The numbers presented above include revenue and expenses for the City's Internal Service Funds. These funds act as cost allocation departments in that they accumulate the cost of goods and services and distribute these costs to the various other user departments. The user departments in turn record an expense/expenditure, and the Internal Service Fund records revenue. Therefore, a doubling effect occurs for those revenues and expenses/expenditures.

The Clovis Successor Agencies are Private Purpose Trust Funds and as such are reported separately and not included in Citywide totals. * Net transfers are the result of the transfer to the Refuse Disposal Fund from the Community Sanitation Fund, an unbudgeted fund. 28 274
AGENDA ITEM NO. 14.

Other Taxes

3.3%
Property Taxes

10.1%
Other Financing Sources

0.1%
Sales & Use Tax

9.4%
Licenses and Permits

1.5%
Other Revenues

0.4%
From Other Agencies

21.6%
Use of Money and
Property

0.3%
Charges for Current
Services

33.5%
Fines

0.1%
Charges to Other
Departments-ISF

19.7%
2021-2022 ESTIMATED REVENUES
Other Taxes

3.8%
Property Taxes

11.4%
Other Financing Sources

0.1%Sales & Use Tax

10.7%Licenses and Permits

1.9%
Other Revenues

0.2%
From Other Agencies

12.8%
Use of Money
and Property

0.4%
Charges for Current
Services

35.8%
Fines

0.1%
Charges to Other
Departments-ISF

22.8%
2022-2023 BUDGET REVENUES
Expenditure charts are presented by fund later in this section and by department and function in the Operations section. 29 275
AGENDA ITEM NO. 14.