Cotati City Council
January 27, 2026

AGENDA

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE

FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY
City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday, January 27, 2026
6:00 PM REGULAR MEETING
The Cotati City Council welcomes you to its meetings that are generally scheduled for the 2nd and 4th Tuesday of every month. Your interest and participation are encouraged and appreciated.

City Council meeting agendas, minutes and recordings are posted on the City’s Meeting Portal at www.cotaticity.gov. For questions about the agenda or to receive the City Council agenda by e-mail, contact the City Clerk at [email protected] or 707-665-3622.

Cotati City Council Meetings will be conducted in person in the Council Chamber. To guarantee your ability to participate, you must attend the meeting in person. As a courtesy to the public, the City allows citizens the opportunity to view and offer public comments virtually through Zoom Online video conferencing platform. Technical difficulties may occur that make the Zoom platform unavailable. If Zoom is unavailable, the meeting will continue. Participants considering using Zoom should consider attending in person, if they desire to ensure their ability to view the meeting and offer public comments.

Subject to the above disclaimer, Zoom Online video conferencing is available to watch or listen in the following ways:

1. Using the following online livestream meeting portal link: https://www.youtube.com/@cityofcotati7280/streams

2. Cable T.V. Broadcast, local channel 28
Members of the public can participate in the meeting online by clicking the link below:
https://us02web.zoom.us/j/83503704650?pwd=dJy8aJ8ra4xVYggP7uthziPftlZsBh.1 If you do not have the ability to join online, but would like to participate in the meeting, you can call into the meeting using your telephone, by dialing one of the following numbers and entering the meeting credentials:

Webinar ID: 835 0370 4650 Passcode: 511801
+1 (669) 900-6833 or +1 (346) 248-7799 or +1 (253) 215-8782 or +1 (301) 715-8592 or +1 (312) 626-6799 or +1 (929) 436-2866 Attendees may join the meeting any time after 5:45pm. Attendees will be muted until they are called upon for Public Comment. To make a public comment, use the “raise hand” icon on your smart device or desktop computer, or dial *9 if you are using just your telephone. Please listen carefully for the Mayor or City Clerk to address you by name (or phone number) and for the audible Zoom notification that you have been unmuted. Once you begin your public comment, your three minutes will begin.

If you would prefer to submit your public comment in writing, please email your comments to [email protected]. If you are commenting on a specific agenda item or items, please state the agenda item number(s) in the subject line of the email. All comments received via email will be provided to the City Council in writing and included as part of the record of the meeting. They will not be read aloud into the record at the meeting.

Notice is hereby given that Council may discuss and/or take action on any or all of the items listed on this agenda, in accordance with the City Council Rules of Conduct.

Any writings or documents provided to a majority of the Cotati City Council regarding any item on this agenda will be made available for inspection in the online Meeting Portal at www.cotaticity.gov and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.

Cotati City Council Agenda January 27, 2026
Accommodations: Upon request, this agenda will be made available in appropriate formats to persons with disabilities as required by Section 202 of the Americans with Disabilities Act of 1990. Any person with a disability who requires a modification or accommodation in order to participate in a meeting should contact the City Clerk at (707) 665-3622 at least 48 hours in advance of the meeting.

Rules of Decorum: To avoid distraction, the following meeting etiquette shall be enforced. • Silence electronic devices, including cell phones.
• Audience members are advised to keep conversations to a minimum or conduct them outside the building. • Members of the public are prohibited from speaking, yelling, or otherwise making loud noises from the audience that disrupt the orderly proceeding of the meeting.
• Photographs or video recordings using tri-pods or other means that would be distracting are to be taken only from the designated media area. • The Presiding Officer shall request that the audience withhold expressions of support or opposition for speakers in the interest of time and to encourage the full expression of differing views.

Public Comment: Public comment on any one agenda item is limited to no more than three (3) minutes per person, in accordance with the City Council Rules of Conduct.

Waiver Warning: If you challenge decisions/direction of the City Council of the City of Cotati in court, you may be limited to raising only those issues you or someone else raised at public hearing(s) described in this agenda, or in written correspondence delivered to the City of Cotati at, or prior to, the public hearing(s).

Announcements:

A. Meeting Orientation for New Attendees/Viewers. In conformance with the Brown Act and the adopted City Council Rules, if the City Council is considering an item in which action will be taken, citizens will be invited to provide comments relevant to the item being discussed.

The meeting agenda also includes a Citizen Business item, which is the designated place on the agenda where citizens have the right to comment on any matter within the City’s subject matter jurisdiction. However, Citizen Business items do not generally receive a response because the Brown Act prohibits the City Council from taking action or considering any item that is not on this agenda, so as to ensure that other members of the community who wish to provide comment are notified in advance through a properly noticed meeting agenda. Nonetheless, in accordance with the Brown Act, the Council may briefly respond, may ask a question for clarification, or may direct an item be placed on a future agenda.

B. Measure S supports police services, a variety of recreation programs for all ages, and the maintenance of our streets, parks, and public buildings. See details on the web at cotaticity.gov.

C. Citizens interested in receiving City of Cotati community alerts via text or email are encouraged to enroll with CivicReady, by signing up on the City’s website, www.cotaticity.gov, under the “How do I” link at the top of the homepage.

D. Have you noticed a street light out, pothole, or issues in a City Park? We want to keep Cotati beautiful and running smoothly, so please let us know what needs to be fixed, by going to the City website under “How do I” and “Report a Service Request.” E. Like always, we love to hear from you, so please feel free to contact the City at 707-792-4600 or [email protected]. If you have a nonemergency issue after normal business hours, you can contact us at 707-792-4611 and of course if you have an emergency, please contact 9-1-1.

Continue to look for updates on the City's website and social media channels available on Facebook, Instagram, and CivicReady.

City Council meetings are conducted according to City Council Policy 2025-03: City Council Rules of Conduct. This policy available for inspection in the online Meeting Portal at www.cotaticity.gov and in the City Manager’s office located at 201 West Sierra Avenue, Cotati, California, during the City’s posted business hours.

Those wishing to address the Council are asked to complete a speaker card and give it to the City Clerk. When you are called, step to the podium and state your name and address for the record. Persons wishing to address the Council are not required to identify themselves or complete a speaker card; (Gov’t. Code § 54953.3); however, this information assists the Mayor by ensuring that all persons wishing to address the Council are recognized and it assists the City Clerk in preparing the City Council meeting minutes.

1. CALL TO ORDER - ROLL CALL

2. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED UNDER THIS

AGENDA (ACTION)
A. COTATI CITY COUNCIL – REGULAR MEETING – JAN 13, 2026

3. AGENDA REVIEW (ACTION)
Cotati City Council Agenda January 27, 2026

4. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS Any member of the public wishing to speak to the Council on any item(s) listed on the Consent Calendar or any matter(s) not listed on the agenda that are within the subject matter jurisdiction of the Council may do so at this time. Pursuant to the Brown Act, the Council is not allowed to consider issues or take action on any item not listed on the agenda. Pursuant to City Council Policy 2025-03, comments of any member of the public are normally restricted to a total of three (3) minutes in length per person for matters not on the agenda and a total of three (3) minutes per person in length for any and all items on the Consent Calendar. The Mayor may extend the time limit for a reasonable time where a disability accommodation has been requested. To facilitate public comment, the timer indicator lights will display yellow when there are thirty seconds remaining, and red when time has expired.

5. CONSENT CALENDAR (ACTION)
A. COUNCIL ASSIGNMENTS AS REPRESENTATIVES AND LIAISONS TO VARIOUS COMMITTEES FOR CALENDAR YEAR 2026
It is recommended that the Council have an initial conversation, and if ready, adopt a motion to assign representatives and liaisons to various committees and commissions for calendar year 2026
B. CONSIDERATION AND ADOPTION OF RESOLUTION APPROVING THE 2026 CITY

OF COTATI CLIMATE READY COTATI FAIR
It is recommended that the City Council adopt a resolution approving the 2026 City of Cotati Climate Ready Cotati Fair.

C. MEASURE S ANNUAL REPORT AND LETTER FROM OVERSIGHT COMMITTEE FOR FISCAL YEAR 2024/25
It is recommended that the City Council receive and file the review letter by the Measure S Citizens' Oversight Committee and the supporting Measure S Annual Report for Fiscal Year 2024/25.

D. ENDORSEMENT OF THE CITY OF COTATI’S APPLICATION FOR THE WHALE

TAIL GRANT FUNDS FROM THE CALIFORNIA COASTAL COMMISSION It is recommended that the City Council adopt a resolution endorsing the City of Cotati’s application for the Whale Tail Grant funds from the California Coastal Commission.

6. DIRECTION ON FUTURE AGENDA ITEMS

7. REGULAR AGENDA (ACTION)
A. 120 EAST COTATI AVENUE DISPOSITION AND DEVELOPMENT AGREEMENT It is recommended that the City Council approve a resolution directing the City Manager to execute a Disposition and Development Agreement (DDA) with Freebird Development Company, LLC for the development of 120 East Cotati Avenue as a mixed-use affordable housing project.

B. RANCHO ADOBE FIRE DISTRICT LEASE EXTENSION - COTATI FIRE STATION It is recommended that the City Council adopt a resolution approving the Second Amended Lease Agreement between the City and the Rancho Adobe Fire District (RAFD).

C. APPROVAL OF 2026 COTATI CULTURAL GRANT AWARDEES
It is recommended that the City Council of the City of Cotati adopt a resolution approving the Cotati Cultural Event Small Grant Program awardees for the 2026 cycle year.

D. FOOD AND MOBILE BUSINESS ORDINANCE WORKSHOP
It is recommended that the City Council receive a staff report and conduct a workshop on Cotati City Council Agenda January 27, 2026
potential code updates associated with food and mobile businesses.

E. REVIEW OF THE CITY OF COTATI’S DRAFT CYBERSECURITY AND DATA

PROTECTION POLICIES
It is recommended that the City Council for the City of Cotati review and provide comment, if any, on the draft Cyber Security and Data Protection Policy.

8. LAND ACKNOWLEDGMENT & PLEDGE OF ALLIGIANCE
The City of Cotati recognizes that we’re on the ancestral lands of the Coastal Miwok, who are the original caretakers of this area. We respectfully acknowledge the Indigenous peoples who have been stewarding and maintaining a relationship on this land as knowledge keepers for millenia. This acknowledgment does not take the place of authentic relationships with Indigenous communities but serves as a gesture of respect to the land we are on.

9. CITY MANAGER'S REPORT & COUNCILMEMBER REPORTS

10. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED

11. ADJOURNMENT
Certification of Posting of the Notice: I declare under penalty of perjury that I am employed by the City of Cotati and that I posted this notice on the City’s website, bulletin boards of City Hall, Veterans’ Memorial Building and the SMART Train Depot, on or before January 23, 2026. /s/ Kevin Patterson, City Clerk

MINUTES

JOINT MEETING OF THE COTATI CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE

FORMER COTATI COMMUNITY REDEVELOPMENT AGENCY
City Council Chamber, City Hall 201 W. Sierra Avenue
Tuesday, January 13, 2026
6:00 PM REGULAR MEETING

1. CALL TO ORDER - ROLL CALL
Mayor Lemus called the meeting to order at 6:00pm.

Attendee Name Title Status
Sylvia Lemus Mayor Present
Susan Harvey Vice Mayor Present
Ben Ford Councilmember Present
Laura Sparks Councilmember Present
John Savage Councilmember Present
Staff Present: City Manager Damien O’Bid, Assistant City Attorney Kimia Mahalatti, City Clerk Kevin Patterson, Director of Administrative Services Angela Courter, Director of Community Development Noah Housh, Director of Public Works/City Engineer Craig Scott, Police Chief Chris Simmons, Senior Planner JP Harries

2. APPROVAL OF MINUTES AND NOTICE OF WAIVING OF READING OF ALL

RESOLUTIONS AND ORDINANCES INTRODUCED AND/OR ADOPTED UNDER THIS

AGENDA (ACTION)
A. COTATI CITY COUNCIL – REGULAR MEETING – DEC 9, 2025
RESULT: Approve [5 TO 0]
MOVER: Ben Ford, Councilmember
SECONDER: Susan Harvey, Vice Mayor
AYES: Lemus, Harvey, Ford, Sparks, Savage
NAYS: None
No public comment.

3. RECEPTION
A. RECOGNITION OF OUT-GOING MAYOR AND RECEPTION FOR INCOMING MAYOR AND VICE-MAYOR 5 of 437
Cotati City Council Minutes January 13, 2026
Mayor Lemus opened the item for public comment.

Public Comment:

George Barich of Cotati
Laurie-Ann Barbour of Cotati
Adrienne Lauby of Cotati
Neil Hancock of Cotati
Jenny Blaker of Cotati
Laurie Alderman of Cotati
Unidentified Speaker

After this item, Council took a brief recess.

4. AGENDA REVIEW (ACTION)
No changes.

5. CITIZEN BUSINESS AND PUBLIC COMMENT FOR CONSENT CALENDAR ITEMS Any member of the public wishing to speak to the Council on any item(s) listed on the Consent Calendar or any matter(s) not listed on the agenda that are within the subject matter jurisdiction of the Council may do so at this time. Pursuant to the Brown Act, the Council is not allowed to consider issues or take action on any item not listed on the agenda. Pursuant to City Council Policy 2025-03, comments of any member of the public are normally restricted to a total of three (3) minutes in length per person for matters not on the agenda and a total of three (3) minutes per person in length for any and all items on the Consent Calendar. The Mayor may extend the time limit for a reasonable time where a disability accommodation has been requested. To facilitate public comment, the timer indicator lights will display yellow when there are thirty seconds remaining, and red when time has expired.

Public Comment:

Laurie Alderman of Cotati
Leslie of Cotati

6. CONSENT CALENDAR (ACTION)
A. APPROVE LANDSCAPE MAINTENANCE STANDARD SERVICES AGREEMENTS

FOR RECENTLY IMPROVED HELEN PUTNAM AND SUNFLOWER PARKS
Prior to adoption of the Consent Calendar, Councilmember Sparks requested that Staff ensure that the contractor follows leaf blower hours, the integrated pest management policy, and pull out plastic waddles (if in park maintenance areas after winter).

RESULT: Adopt [5 TO 0]
MOVER: Ben Ford, Councilmember
SECONDER: Susan Harvey, Vice Mayor
AYES: Lemus, Harvey, Ford, Sparks, Savage
NAYS: None

7. DIRECTION OF FUTURE AGENDA ITEMS
None.

8. PUBLIC HEARINGS (ACTION)
A. CONSIDERATION OF A RESOLUTION APPROVING PRELIMINARY AND FINAL 6 of 437
Cotati City Council Minutes January 13, 2026

DESIGN REVIEW, VARIANCES, AND A TREE REMOVAL PERMIT TO ALLOW

CONSTRUCTION OF TWO BUILDINGS CONTAINING A TOTAL OF FIVE RESIDENTIAL UNITS AND 890 SQUARE FEET OF COMMERCIAL RETAIL SPACE AT 8150 LA PLAZA AND FINDING THE INFILL DEVELOPMENT PROJECT

CONSISTENT WITH THE COTATI GENERAL PLAN AND ITS ENVIRONMENTAL

IMPACT REPORT AND EXEMPT FROM FURTHER ENVIRONMENTAL REVIEW UNDER CEQA GUIDELINES SECTIONS 15183 AND 15332
(PA# 25-10 / APN 144-273-009)
Before the presentation of this item, Councilmember Ford announced that he was recusing himself, due to owning property close to the project site.

Presentation by Senior Planner JP Harries and Emil Heuko, owner of 8150 La Plaza.

Councilmembers comment.

Public Comment:

Thomas Trujillo of Cotati
Jenny Blaker of Cotati
Linell Hardy of Cotati
Adrienne Lauby of Cotati
Shelly Berman of Cotati
Laurie Alderman of Cotati

After discussion by the Council, Mayor Lemus elected to re-open the item for public comment.

Public Comment Part 2:

Emil Heuko
Brent Russell
Adrienne Lauby of Cotati
Linell Hardy of Cotati
Jessica N of Cotati
Council approved the Planning Commission recommendations. Council also added two conditions to the project, requiring the applicant to provide a parking management plan to City staff for review and approval prior to issuance of building permits, and requiring the proposed trees on the eastern property line to be 24” box trees.

RESULT: Adopt [4 TO 0]
MOVER: Susan Harvey, Vice Mayor
SECONDER: John Savage, Councilmember
AYES: Lemus, Harvey, Sparks, Savage
NAYS: None
RECUSED: Ford
B. CONSIDERATION TO ADOPT RESOLUTION APPROVING ANNEXATION OF CERTAIN PROPERTY TO COMMUNITY FACILITIES DISTRICT NO. 2017-01 (PUBLIC SERVICES) AND TAKING ASSOCIATED ACTIONS
Presentation by Director of Public Works/City Engineer Craig Scott. 7 of 437
Cotati City Council Minutes January 13, 2026
Councilmembers comment.

Public Comment:

Jessica N of Cotati
RESULT: Adopt [5 TO 0]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Laura Sparks, Councilmember
AYES: Lemus, Harvey, Ford, Sparks, Savage
NAYS: None

9. REGULAR AGENDA (ACTION)
A. SANTERO WAY AND TOC REZONING ORDINANCE
Before the presentation of this item, Councilmember Savage announced that he would recuse himself from items 9A and 9B, due to owning property within the Santero Way District.

Presentation by Director of Community Development Noah Housh.

Councilmembers comment.

Public Comment:

Laurie Alderman of Cotati
Omar Lopez
Michael Hischak
Neil Rudolph
Council voted to adopt the ordinance, excluding the Oliver’s shopping center property. Council also directed staff to return at a later date with a clean-up ordinance to allow conversions of for rent units to condominiums in the event of a bank foreclosure on a multi-family property.

RESULT: Adopt [4 TO 0]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Laura Sparks, Councilmember
AYES: Lemus, Harvey, Ford, Sparks
NAYS: None
RECUSED: Savage
B. MEMORANDUM OF UNDERSTANDING, SANTERO WAY APARTMENTS
Presentation by City Manager Damien O’Bid.

Councilmembers comment.

No public comment. 8 of 437
Cotati City Council Minutes January 13, 2026
RESULT: Approve [4 TO 0]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Laura Sparks, Councilmember
AYES: Lemus, Harvey, Ford, Sparks
NAYS: None
RECUSED: Savage
C. NOR CAL OAKS LICENSE AGREEMENT AMENDMENT
Presentation by City Manager Damien O’Bid.

Councilmembers comment.

Public Comment:

Jason Chickering of Nor Cal Oaks
RESULT: Adopt [5 TO 0]
MOVER: Susan Harvey, Vice Mayor
SECONDER: Laura Sparks, Councilmember
AYES: Lemus, Harvey, Ford, Sparks, Savage
NAYS: None
D. DISCUSSION ON AUTHORIZATION FOR THE MAYOR TO ADVOCATE FOR

INFRASTRTURE FUNDING WITH ABAG/MTC
Presentation by City Manager Damien O’Bid.

Councilmembers comment, and suggested that the letter should reflect that ABAG/MTC’s uncertainty regarding infrastructure funding impacted the willingness to make TOC zoning changes (e.g. Oliver’s Shopping Center).

No public comment.

RESULT: Approve [5 TO 0]
MOVER: Ben Ford, Councilmember
SECONDER: Susan Harvey, Vice Mayor
AYES: Lemus, Harvey, Ford, Sparks, Savage
NAYS: None

10. LAND ACKNOWLEDGMENT & PLEDGE OF ALLIGIANCE
The City of Cotati recognizes that we’re on the ancestral lands of the Coastal Miwok, who are the original caretakers of this area. We respectfully acknowledge the Indigenous peoples who have been stewarding and maintaining a relationship on this land as knowledge keepers for millenia. This acknowledgment does not take the place of authentic relationships with Indigenous communities but serves as a gesture of respect to the land we are on.
9 of 437
Cotati City Council Minutes January 13, 2026

11. After this item, Council took a brief recess.

CITY MANAGER'S REPORT & COUNCILMEMBER REPORTS
Report by City Manager Damien O’Bid.

Councilmembers report out on local and regional events and meetings.

12. INFORMATION RECEIVED AFTER THE AGENDA WAS POSTED

13. ADJOURNMENT
Mayor Lemus adjourned the meeting at 10:02pm.
/s/ Kevin Patterson, City Clerk
10 of 437
Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: COUNCIL ASSIGNMENTS AS REPRESENTATIVES AND

LIAISONS TO VARIOUS COMMITTEES FOR CALENDAR
YEAR 2026
Date: January 27, 2026
Written by: Kevin Patterson, City Clerk
Recommendation
It is recommended that the Council adopt a motion to assign representatives and liaisons to various committees and commissions for calendar year 2026.

Background
Each year, the City Council reviews assignments to committees, commissions and regional assignments that are directly appointed by the City Council. This is typically done concurrently with the City Council reorganization on off-election years in December. On election years when new City Council members join the City Council, appointments are typically made at the first meeting in January.

Many years ago, Cotati had weak representation regionally, so Cotati’s interests were often ignored when decisions were being made. However, over the past decade or so, Cotati has been a key player in regional discussions on a variety of issues, including water supply, transportation, solid waste and negotiating the formation of Sonoma Clean Power, all of which have directly benefited both Cotati residents and the region as a whole. Therefore, it is important to continue to be strongly engaged in regional bodies.

Analysis/Discussion
The current Cotati City Council Appointments and Assignments sheet listing the active committees is attached for review. This is a worksheet listing active committees and approximate time commitments, including a calendar of the various meetings. Current appointees may take this opportunity to update the ‘Hours/Duties’ portion of the appointments 11 of 437
and assignments worksheet as needed.

Note that Councilmember Harvey and Vice Mayor Lemus also have appointments on statewide Cal Cities committees. Councilmember Harvey is on the Public Safety Policy Committee and Vice Mayor Lemus is on the Revenue & Taxation Policy Committee.

Councilmember Sparks has been approved by the Council for an extended leave of absence, from January 26 – May 11, 2026. The alternate appointee for committees where Councilmember Sparks is the primary member will need to attend meetings in her place for the duration of leave.

Based on prior City Council direction, the City Council had an initial non-action discussion about City Council appointments on December 9, 2025. At that meeting, the City Council made two changes proposed changes:
• Mayors’ and Councilmembers Legislative Committee: Move Councilmember Savage into the primary role with Mayor Lemus as the alternate. • Sonoma County Homeless Coalition Board of Directors (Homeless Coalition Board): Mayor Lemus expressed interest in this joint Cotati/Rohnert Park assignment, but preferred to be in the primary role.

Following the December 9 City Council meeting, staff and Mayor Lemus discussed the change to the Homeless Coalition Board with staff at Rohnert Park, as well as Councilmember Elward.

Given the length of time already served by Councilmember Elward on this assignment (3 years), it was decided that Mayor Lemus would assume the primary role and Councilmember Elward would move to alternate. The City of Rohnert Park is planning to make these changes in assignment at their January 27, 2026 City Council meeting.

Financial Considerations
None.

Environmental Issues
The action of assigning representatives and liaisons to various committees and commissions does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required. 12 of 437

C:\Users\kduran\AppData\Local\Microsoft\Windows\INetCache\Content.Outlook\1MA9JXJN\Summary City Council Committee Appointents 3.11.25(2024)(1).docx Cotati City Council
Appointments and Assignments for 2026
REVISED 1/23/2026
Name of Committee Current
Member(s)
Alternate

POSITIONS HELD BY COUNCILMEMBERS
Ad-Hoc Sub-Committees
None active.

Regional Committees/Boards
(City Council Appointed)
Assoc. of Bay Area Governments (ABAG) Sylvia Lemus Susan Harvey CRPUSD (Cotati-Rohnert Park Unified School District) 2x2x2x2 Laura Sparks John Savage
N/A
Rohnert Park-Cotati Library Advisory Board John Savage Ben Ford Mayors’ and Councilmembers Legislative Committee Representative John Savage Sylvia Lemus REMIF/CIRA Board of Directors Damien O’Bid Susan Harvey Russian River Watershed Association Ben Ford Laura Sparks Sonoma Clean Power Sylvia Lemus Ben Ford
Sonoma Co. Transportation Authority/Regional Climate Protection Authority (SCTA/RCPA)
Susan Harvey Ben Ford
Sonoma Co. Waste Management Agency (SCWMA/Zero Waste Sonoma) Susan Harvey Sylvia Lemus Sonoma Water Advisory Committee (WAC) Laura Sparks Sylvia Lemus Groundwater Sustainability Agency (Santa Rosa Plain) Susan Harvey Sylvia Lemus League of California Cities’ Annual Meeting Voting Delegate (assigned prior to meeting)
(assigned prior to
meeting)
Liaisons
Cotati Chamber of Commerce Sylvia Lemus John Savage
Rancho-Cotati Rotary Club Susan Harvey Laura Sparks
Regional Committees/Boards
(Appointments as Indicated)
Joint Cotati City Council/Rohnert Park City Council Appointments Sonoma County Homeless Coalition Board of Directors
(Formerly the Continuum of Care Board of Directors)
Sylvia Lemus Jackie Elward
(Rohnert Park)
Mayors’ and Councilmembers’ Association Appointments
Executive Board/City Selection Committee Mayor Vice Mayor League of California Cities’ North Bay Exec. Board Susan Harvey N/A Recommended by City Selection Committee (Appointed by County Board of Supervisors) LAFCO Susan Harvey N/A
Measure “O” Oversight Committee (County Mental Health Tax) Ben Ford N/A

POSITIONS HELD BY COTATI CITIZENS
(APPOINTED BY CITY COUNCIL OR BOARD OF SUPERVISORS, AS NOTED) AB 939 Local Task Force (Board of Supervisors appointment) Mark Soiland N/A Library Commission-Sonoma County Library (City Council appointment) Tina Poles N/A Marin/Sonoma Mosquito Vector Control Dist. (City Council appointment) Susan Harvey N/A Climate Action Advisory Committee
(Cotati RCPA Director appointment, 2 members)
Neil Hancock
Ryan Martin-Dent N/A
13 of 437

C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Cotati City Council
Appointments and Assignments Worksheet 2025
REVISED 12/4/2025
Name of
Committee
Hours/Duties

POSITIONS HELD BY COUNCILMEMBERS
Ad-Hoc Sub-Committees
Community-Police
Advisory Selection
Committee
NOT

CURRENTLY
ACTIVE
Dept.: City Manager
Hours: 1-2 hours per application received for review and interview of candidates.

Duties: Review applications to serve on the advisory committee and participate in the interviews and candidate selection.

Regional Committees/Boards
City Council Appointed Positions
Assoc. of Bay Area
Governments
(ABAG)
Dept.: City Manager
Hours: General Assemblies meeting in spring and fall
Duties: Attend and vote as needed at general assembly meetings Note: ABAG Alternates have voting rights
CRPUSD (CotatiRohnert Park
Unified School
District ) 2x2x2x2
Generally meets monthly, or as needed, to discuss issues in common with the Cities of Cotati and Rohnert Park and the Cotati-Rohnert Park Unified School District. Meetings are typically 1-2 hours each. More recently has also include representatives from Sonoma State University.

Rohnert ParkCotati Library
Advisory Board
Optionally attend meetings in February, April, June, August, October and December, normally on the 3rd Tuesday at 4:00 p.m. at the Rohnert Park-Cotati Regional Library. Liaisons are non-voting members.
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C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Name of
Committee
Hours/Duties
Mayors’ and
Council Members
Legislative
Committee Liaison
Dept.: City Manager.

Hours: Third Friday of each month in-person in Santa Rosa, 9 am – 11 am.

Duties: The Legislative Committee, established by the Mayors and Councilmembers Bylaws, consists of a Mayor or Councilmember from each of the member cities, chosen by their respective Councils. Its duties are to review pending policy issues affecting cities and to advocate for those on behalf of the cities within Sonoma County. The committee Chairperson shall be the liaison to the Mayors and Councilmembers Board of Directors and shall provide regular updates at the Board of Directors meetings.

REMIF/CIRA
Board of Directors
Dept.: City Manager.

Hours: Board meetings 4 times per year in Sacramento (generally all day); 2-day annual meeting each January (location rotates). Cotati also currently holds the Vice Chair seat on the Executive Committee, the Underwriting Committee, the Health Plan Transition Committee and Chair of the REMIF Board of Directors, each which generally meets monthly, virtual or in person in Sacramento.

Duties: Day to day management of risk management activities.

Qualifications: Specialized knowledge of risk management; recommended that staff be appointed given operational implications of this board.

Russian River
Watershed
Association
Dept.: Public Works
Hours: Meetings typically held from 9-11 am on 4th Thursday of the month every other month in Windsor. 2 hours every other month for Board meeting, plus time for preparation, travel, etc.

Duties: Attend RRWA Board meetings, as Cotati is a member. This group works on a variety of watershed issues that affect all members in the Russian River Watershed. It is an informational and advocacy group that focuses on watershed pollutants, permit issues, etc. The biggest issue currently is the pending municipal stormwater discharge permits.

Qualifications: Should have an interest and preferably background in regional watershed issues.
15 of 437

C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Name of
Committee
Hours/Duties
Sonoma Clean
Power
Dept: N/A
Hours: Meets in Santa Rosa on the 1st Thursday of every month from 9:00am – 12 noon. Allow for 3 hours every month for SCP Board meetings, plus time for preparation, travel, etc. Agendas and related documents can be lengthy and time consuming to review. Allow 5-15 hours per month.

Duties: Represent Cotati on regional green power agency. Weigh in on myriad power issues related to procurement and provision of clean energy on a regional basis. Involvement in representing the interests of California’s community choice electricity providers in the legislature and at state regulatory agencies. Work to help lead county wide GHG reduction efforts.

Qualifications: Should have some background and interest in power issues, clean power, and GHG emission reduction efforts. Preferably served as an alternate on SCP BOD for several years before becoming primary. Established working relationships with Sonoma County councilmembers and supervisors preferable.

Sonoma Co.

Transportation
Authority/Regional
Climate Protection
Authority
(SCTA/RCPA)
Dept.: Public Works
Hours: Meetings typically held from 3:00-5:00 pm on 1st Monday of the month in Santa Rosa. 2 hours every month for SCTA Board meetings, plus time for preparation, travel, etc. Agendas and related documents are lengthy and very time consuming to review. Allow 5-15 hours minimum per month.

Duties: Weigh in on a myriad of transportation related issues, including all modes of transportation. Involved in local and regional (Caltrans) projects. Also evolving to coordinate county wide GHG reduction efforts, which will become important.

Qualifications: Should have an interest in and preferably a background in transportation issues, including how they relates to GHG emissions. Preferably served as an alternate on SCTA/RCPA BOD for several years before becoming primary. Established working relationships with Sonoma County councilmembers and supervisors crucial.
*This is a critical assignment.

Sonoma Co. Waste
Management
Agency (SCWMA
aka Zero Waste
Sonoma)
Dept.: City Manager
Hours: Meets in Santa Rosa on 3rd Wednesday 9-11am, time commitment approx. 6 hours/month
Duties: Joint Powers agency with oversight of landfill and county-wide recycling efforts and hazardous materials.
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C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Name of
Committee
Hours/Duties
Sonoma Water
Advisory
Committee (WAC)
Dept.: Public Works
Hours: Meetings typically held from 9-12 am on 1st Monday of the month at the Santa Rosa Utilities Field Office. 3 hours every month for WAC Board meetings, plus time for preparation, travel, etc. Agendas and related documents are lengthy and very time consuming to review. Allow 10 hours minimum per month Duties: Weigh in on issues related to Sonoma Water water supply. The continuing Potter Valley Project issue is time consuming and may also require out of state travel to advocate on behalf of the City.

Qualifications: Should have an interest in and background in regional water supply issues. It will be especially important as the City deals with these issues. *This is a critical assignment. If the representative does not attend the City does not get a vote. Staff are not able to vote on behalf of the City.

Groundwater
Sustainability
Agency (Santa
Rosa Plain)
Dept: Public Works
Hours: Typically 2nd Thursday, every other month, 1-3:30 PM Duties: Administered by Sonoma Water, Cotati sits on the GSA Board for the Santa Rosa Plain. This board reviews groundwater management activities and oversees monitoring.

Qualifications: Should have an interest in and background in regional water supply issues.

League of
California Cities’
Annual Meeting
Voting Delegate
Votes on resolutions at the annual business meeting during the Cal Cities annual conference. Generally Mayor and Vice Mayor, unless one or both are unable to attend.

Liaisons
Chamber of
Commerce
Attend monthly Chamber of Commerce Board of Director’s meetings on the 2nd Tuesday at 5:15 p.m., immediately before the regularly scheduled City Council meeting.

Rancho Cotati
Rotary Club
Hours: Thursdays at noon.

Location: China Village, 8501 Gravenstein Hwy, Cotati
Duties: Attend meetings on behalf of the City.
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C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Name of
Committee
Hours/Duties
Regional Committees/Boards
Appointments as Indicated
Joint Cotati City Council/Rohnert Park City Council Appointments Sonoma County
Homeless
Coalition Board of
Directors
(Cotati-Rohnert
Park
Representative)
Dept.: City Manager
Hours: Monthly meetings of Board, currently with various subcommittee appointments. Board meetings typically 4 hours each (1 – 5 pm). Allow for 12 hours per month, with an additional 4 hours per month of meeting preparation.

Duties: To ensure a well-functioning homelessness system of care in Sonoma County that works for the entire county.

Qualifications: Can be staff, elected, or citizen jointly appointed by the Cotati and Rohnert Park City Councils. Dense subject matter, so an understanding of homelessness systems or long-term appointment to be conversant in the subject matter desirable.

Mayors’ and Councilmembers’ Association Appointments
Executive Board
and City Selection
Committee
Member and alternate established by Gov’t Code § 50270 et seq League of
California Cities’
North Bay Exec.

Board
Appointed by the Mayors’ and Councilmembers’ Association Board of Directors; term expires TBD
Board of Supervisor Appointments (Recommended City Selection Committee) LAFCO Dept.: Board of Supervisors appointment; Recommended by City Selection Committee; current 4 year term expires 2/2027
Hours: Monthly in the Board of Supervisors’ Chamber on the first Wednesday at 2:00 p.m.

Duties: To regulate the boundaries of cities and special districts. 18 of 437

C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Name of
Committee
Hours/Duties
Measure “O”
Oversight
Committee
(County Mental
Health Tax)
Dept: Board of Supervisors appointment; Recommended by City Selection Committee; current 3 year term expires 12/2027.

Hours: Approximately quarterly, meetings currently held virtually. 4:30 – 6:00 p.m.

Duties: Review the receipt and expenditures of Measure O revenue, including the County’s annual independent audit in conjunction with the County’s budget process. Produce an annual oral or written report on its review which shall be considered by the Board at a public meeting. The committee’s responsibilities shall not include decision-making on spending priorities, financing plans or tax rate projections or assumptions and the committee shall have no authority to direct, nor shall it direct, County or City staff or officials.

POSITIONS HELD BY COTATI CITIZENS
(APPOINTED BY CITY COUNCIL OR

THE BOARD OF SUPERVISORS, AS NOTED)
Name of
Committee
Hours/Duties
AB 939 Local Task
Force
Dept.: City Manager
Hours: Bi-monthly - Second Thursday of the month - 1:30-3:00 p.m. - at Sonoma County Department of Transportation & Public Works
Duties: To develop goals, policies, and procedures which are consistent with guidelines and regulations adopted by the Board, to guide the development of the Siting Element of the County-wide integrated waste management plan.

Library
Commission –
Sonoma County
Library
Dept.: N/A
Hours: Meets at Santa Rosa City Hall, generally meets monthly on the first Monday, but the day may vary, with additional special meetings as needed.

Duties/term: Council-appointed citizen commissioner.

Marin/Sonoma
Mosquito and
Vector Control
District
(MSMVCD)
Dept.: N/A
Hours: Board of Trustees meet monthly at MSMVCD headquarters in Cotati at 6:00 p.m. on the 2nd Wednesday of each month.

Duties/term: City Council appointed for 2 or 4 year terms. 19 of 437

C:\Users\kepatterson\Downloads\Detail Committee Assignments (2024).docx Climate Action
Advisory
Committee
(CAAC)
Dept. City Manager. Two representatives are chosen by each RCPA Board members from their respective jurisdictions.

Duties: The CAAC provides information and advice to the Regional Climate Protection Authority (RCPA) Board, staff and project consultants during the development and implementation of climate action programs. The CAAC does not take official votes or make direct recommendations to any hearing body and consists of stakeholders selected by the RCPA Board of Directors, to represent a diversity of viewpoints and areas of technical expertise.

Hours: The CAAC meets quarterly on the 2nd Friday in January, April, July, and October.
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: CONSIDERATION AND ADOPTION OF RESOLUTION
APPROVING THE 2026 CITY OF COTATI CLIMATE READY

COTATI FAIR
Date: January 27, 2026
Written by: Ashley Wilson, Recreation Manager
Recommendation
It is recommended that the City Council adopt a resolution approving the 2026 City of Cotati Climate Ready Cotati Fair.

Background
The City of Cotati has a goal to promote sustainability within the community, as well as lead by example in reducing resource use and environmental impact. One way that the City’s Community Development Department plans to educate and connect with residents, businesses, and organizations on climate readiness and sustainability is by hosting the 2nd Annual Climate Ready Cotati Fair. Given the success last year, the City would like to bring it back for 2026 and annually thereafter. The event is proposed to take place on Saturday, March 28, 2026, at the Cotati Train Depot property, connected City owned parking lot, Depot Way, and Sonoma County Transit owned bus driveway drop off area.

Analysis/Discussion
Below is a summary of the event. The request includes the following: 1) exclusive use of the Cotati Train Depot and surrounding City owned parking lot; 2) closure of public parking spaces and Depot Way; 3) food truck and other vendor sales; 4) live, amplified entertainment.

Event Attendance Dates/Times
Climate Ready Cotati 300 Saturday, March 28th (10:00am-2:00pm) California Vehicle Code Section 21101 (e) authorizes the temporary closing of any street for 21 of 437
celebrations, parades, local events and other purposes when, in the opinion of local authorities having jurisdiction, the closing is necessary for the safety and protection of persons who are to use that portion of the street during the temporary closing. In this instance, the public parking spaces and Depot Way would be heavily used for food trucks, vendor logistics, porta-potties, and equipment, so closure would be in the best interest of public safety. The Police Department will notify the appropriate public and emergency response agencies of the closures.

The Climate Ready Cotati Fair is a free family friendly event in Cotati. The goal is to educate, empower, and activate the community to reduce resource use and environmental impact through personal and household actions, increase resilience to the impacts of natural disasters and extreme weather events, and connect with nature. The event will begin at 10:00 am with over 30 agencies/businesses in the Cotati train depot and surrounding patio area providing goods, services, and information to attendees. Exclusive use of the Cotati Train Depot and City owned parking spaces, as well as Depot Way, from 8:00am through 4:00pm to allow for set-up, breakdown, and clean-up, is requested. Additionally, the Sonoma County Transit owned bus driveway drop off area would be closed off, pending approval from SCT. Further event details can be found in the attached event summary.

Financial Considerations
This event will be widely marketed and could increase the number of visitors to the City. The event will provide increased opportunities to promote economic development. Financial considerations for the City would be expenditures of about $16,723 on staff costs and supplies which are currently accommodated in the FY 25-26 budget.

Staff Time - 83 hours, estimated cost $16,223, made up of the following:
• Community Development Staff prep work & day of event – 74 hours / $14,504 • Recreation Staff prep work & day of event – 5 hours / $955 • Public Works Staff closing and reopening parking lot –4 hours / $764 Supplies – $500
• Signage
• Promotional materials
Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
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RESOLUTION NO. (XX)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI
APPROVING 2026 CLIMATE READY COTATI FAIR EVENT
WHEREAS, The City of Cotati proposes to host a 2nd Annual Climate Ready Cotati Fair event, to be held at the Cotati train depot property, surrounding City owned parking lot, and Depot Way; and
WHEREAS, California Vehicle Code Section 21101(e) authorizes temporary street closures where certain conditions exist; and
WHEREAS, it will be necessary to temporarily close certain public parking spaces and streets, as described in this resolution and Exhibit “A,” to facilitate this event; and WHEREAS, the closure is necessary for the safety and protection of persons who are to use that portion or portions of the street(s) during the temporary closing; and WHEREAS, the City Council finds that this event is part of a comprehensive economic development strategy by the City of Cotati in that it increases visitation to the City, promotes the Cotati community and may result in increased sales tax revenues; and WHEREAS, the City Council further finds that the health, safety, and welfare of the citizens of the City of Cotati will not be jeopardized by the approval of this event; and WHEREAS, it will be necessary to conform to certain conditions as described in “Exhibit A,” attached hereto, to facilitate this event; and WHEREAS, the action of approving a Climate Ready Cotati event does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.

NOW THEREFORE BE IT RESOLVED, that

1. The above recitals are declared to be true and correct and are incorporated herein as findings of the City Council.

2. The closure of the City owned parking lot on East Cotati Avenue attached to the Cotati Train Depot property and Depot Way for use for the Climate Ready Cotati Fair on Saturday, March 28, 2026, between 8:00 am and 4:00 pm is hereby approved, to include amplified music, vendor and food truck sales, and other activities as described in the accompanying staff report.

3. The use of staff time and City Funds for the Climate Ready Cotati Fair, as further described in the accompanying staff report, is hereby approved.

4. The Conditions of Approval, attached as Exhibit A to this resolution, are hereby approved. 23 of 437
IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 27, 2026, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney
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EXHIBIT “A”

CONDITIONS OF APPROVAL

CLIMATE READY COTATI FAIR

1. The City of Cotati shall ensure the public facilities (park, parking spaces and streets) are cleaned completely and returned to pre-event condition within 48 hours of the event.

2. The event shall be carried out as described in the written descriptions submitted by the applicant, approved by the City Council, and in compliance with these Conditions of Approval.

3. The City of Cotati is granted exclusive use of the Cotati Train Depot and connected dirt Parking Lot, as well as Depot Way, including closure of all parking spaces necessary to accommodate the event on Saturday, March 28th, 2026, from 8:00am to 4:00pm for the event. This approval includes amplified live entertainment and food and vendor sales.

4. The City of Cotati shall arrange for trash, recycling, and compost bins to be delivered and collected.

5. The applicant shall ensure that all vendors follow Cotati Municipal Code 8.20.030 (Prohibited food service ware and products), which bans the selling or serving of food ware that contains polystyrene foam or PFAS.
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: MEASURE S ANNUAL REPORT AND LETTER FROM
OVERSIGHT COMMITTEE FOR FISCAL YEAR 2024/25
Date: January 27, 2026
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council receive and file the review letter by the Measure S Citizens' Oversight Committee and the supporting Measure S Annual Report for Fiscal Year 2024/25.

Background
In 2014, a majority of Cotati voters passed Measure G, a one cent (1.0%) local revenue measure to support essential City services for Cotati residents. Measure G has provided the City with a guaranteed source of local funding for local City services that cannot be taken by the state and has helped maintain the financial viability of the City.

In November 2020, a majority of the voters in Cotati approved Measure S, which continued the same 1.0% transaction sales tax for essential City services. All other aspects of the former Measure G remained as-is, including annual audits and an independent citizen oversight committee that would continue to review expenses annually in a public meeting and report to the City Council. Therefore, other than the designation of Measure S rather than Measure G, all functions and duties of this oversight committee continued. On January 11, 2022, the City Council formally approved the name change to Measure S for the Citizen's Oversight Committee.

Analysis/Discussion
The Measure S Oversight Committee held a public meeting on Thursday January 15, 2026, to review the revenues and expenditures for the Measure funds. 28 of 437
After the Committee reviewed the audited Measure S revenues and expenditures for Fiscal Year 2024/25, they found that the program expenditures followed the intent and letter of Measure S (Cotati Municipal Code Chapter 3.05, Transactions and Use Tax), and followed the City Council's intent as outlined in the strategic planning goals for Fiscal Year 2024/25. The annual Measure S report is attached to the staff report and is additionally linked on the City's website (www.cotaticity.gov).

Financial Considerations
None
Environmental Issues
Under CEQA Guidelines 15060(c)(2)-(3) and 15378, subdivisions (2) and (4) of subdivision (b), a revenue measure does not constitute a project under CEQA and therefore review under CEQA is not required.
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GET TO KNOW YOUR VOTER

APPROVED TAX MEASURE
WHY DID THE CITY COUNCIL PLACE MEASURE S ON THE BALLOT IN 2020? In response to the severe economic recession and the State redistribution of funding through the Redevelopment Dissolution, the City aggressively cut expenses, including a 28% reduction in staffing, elimination of the Recreation Department, voluntary staff salary cut of 14%, cut back or elimination of all contract services, and a general 11% reduction in General Fund expenditures. At that time, the City also was a leader in the state in establishing a new benefit and pension tier for new employees, to reduce future expenses.

In addition to the cuts in expenses, in 2009 the voters of Cotati also approved Measure A, a ½-cent sales tax for 5 years to maintain basic City services through the recession. Even with the additional revenue from Measure A and the City cuts in expenses, the unexpected loss of funding because of the State dissolution of Redevelopment, coupled with a much slower than expected economic recovery, resulted in the City being able to only maintain basic services with no capacity for non-emergency projects. As Measure A was nearing its expiration, the City was again facing the possibility of losing our locally controlled Police Department, and the very viability to continue as a city separate from Rohnert Park or the County was a deep concern.

In response, the City Council declared a State of Emergency on February 11, 2014, putting Measure G on the ballot.

On June 3, 2014, the voters of Cotati passed Measure G, the Cotati Essential City Services Measure.

At the time Measure G was placed on the ballot, the State had taken hundreds of thousands of dollars in funds from Cotati’s budget, which directly affected the General Fund. The General Fund supports all the basic functions of a city including police services, road maintenance, park maintenance, and other essential city services. Just like most cities in California, the economic downturn and declining property values dramatically reduced sales tax and property tax revenues in Cotati.

In 2020 the City once again took the same Measure to the community. This new Measure S continued existing, voter-approved locally controlled funding with no increase in tax rate. Measure S funding would continue to stay local for our community. Cotati City Hall
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HOW MUCH DOES A 1-PERCENT SALES TAX COST ME?
A 1-percent sales tax adds $1 on a $100 purchase for some purchases. Purchases such as food and medicine are exempted from the sales tax. Some of the largest sales tax sources in Cotati include Lowes, Oliver’s Market, and our gas stations, collecting a significant portion of their sales taxes from visitors to Cotati, which benefits our residents and the visitors who use the City services and infrastructure. The revenue from Measure S is used to protect the essential services Cotati residents rely on and assist in the implementation of key improvements desired by the community.

DO FUNDS FROM MEASURE S STAY IN COTATI?
Yes. Measure S funds stay local. Measure S Sales Tax dollars cannot be taken by the State and can only be spent on Cotati and its residents.

WHAT DOES THIS LOCAL SOURCE OF FUNDING PROVIDE FOR COTATI? The City of Cotati uses the funds from Measure S to maintain essential City services for our community. Essential City services include the core services needed to run a City, including improved community services, preserving our local police department, recreational opportunities, and maintenance of public
infrastructure, including streets and pothole repair. With additional public safety funding, it also increased the number of officers on duty to help maintain crime prevention and investigation services.

Measure S can also be used to leverage grant funds and key infrastructure projects such as street maintenance, storm drain maintenance, and improvements to parks and other City facilities.

WHAT OVERSIGHT PROVISIONS ARE IN PLACE?
Cotati Police Department
The City has established an independent Citizens’ Oversight Committee that meets annually to review expenditures for Measure S and help make sure that every penny supports voter-approved priorities. This committee is an advisory body comprised of five members that are appointed by the City Council in a public process. Their involvement will help ensure that funds will continue to be spent responsibly on services provided by the City for purposes that benefit the citizens of Cotati.

Additionally, all receipts of funds and expenditures are subject to audit by an independent auditing firm. The audited statements of revenues and uses are included within the City’s Annual Comprehensive Financial Report and the excerpted statement is included within this annual report. 34 of 437
WHAT MAKES UP THE TOTAL SALES TAX RATE?
As of June 30, 2025, the total sales tax rate in Cotati was 10.25% and is broken by recipients as follows:

California Sales and Use Tax Rates as of June 30, 2025
State 6.000%
County Transportation Funds 0.250%
Local City of Cotati (Bradley Burns) 1.000%
Total State-Wide Sales and Use Tax Rate 7.250%
County* 2.000%
Measure S (formerly Measure G) 1.000%
Total Sales Tax Rate in Cotati 10.250%
Details of County Special Taxes
Sonoma County Library Maintenance Restoration Enhancement Act (SCLM) 0.125% Sonoma County Parks & Safety TT (SCPS) 0.125%
Sonoma County Mental Health & Homeless Services (SOMT) 0.250% Sonoma County Transportation Authority (SCTA) 0.250%
Sonoma County Fire Protection & Emergency Response Services 0.500% Sonoma County Child Care, Education and Healthcare 0.250% Fractional Code - SMART in Sonoma County (SMRT) 0.250%
Sonoma County Agricultural Preservation & Open Space District (SAPD) 0.250% Total 2.000%
Breakdown of Cotati Sales Tax Rate
Local-Measure S,

1.00%
County-Various
Special Sales Taxes,

2.00%
Local-City of Cotati
(Bradley Burns),

1.00%
State-Sales and Use
Tax, 6.00%
State-County
Transportation
Funds, 0.25%
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SUMMARY OF PUBLIC BENEFIT
In 2024/25 the City received $3,054,830 in Measure S funding. The passage of Measure S continues to stabilize the City budget and allows the City to deliver on expectations and desires of our community. This includes enhanced services in public safety and infrastructure maintenance, as well as continuing Recreation Department and all their programing, which was made possible by Measure G and Measure S, and is the reason the City can make significant investments in streets repaving, traffic safety, and building and park improvements.

PUBLIC SAFETY
Without a positive sense of public safety in our community, it can be difficult to bring in new business or families.

Measure S continues to enable the City to preserve our own Police Department by funding core operations and enabling key improvements to public safety, including hiring a full-time police officer and adding a traffic officer assignment starting in FY 2014/15. The City also added a Police Services Aide and a full-time dispatcher, as well as continuing to fund ongoing departmental operations. Maintaining the local police department also opened the opportunity to provide emergency dispatch services to Sonoma State University. The revenue from this shared services agreement has also allowed the hiring and continuation of an additional police officer and a part time dispatcher since FY 2017/18. The City additionally leveraged Measure S to support the 24/7 operations of the Mobile Crisis teams called Specialized Assistance for Everyone (SAFE).

Other elements of the public safety program are intended to improve community safety. This includes things such as street safety and lighting projects.

The City Council’s primary focus during FY 2024/25 was to continue to improve the overall level of public safety services in the City. The following is a summary of Measure S expenditures under the Public Safety Program:

1. The City continued to fund ongoing operations to preserve our local Police Department.

2. Collaborated with the County for using Measure O funds to support 24/7 operations for the Specialized Assistance For Everyone (SAFE) Team services which provide emergency crisis response to our community.

3. Utilizing the City's Local Road Safety Program (LRSP) process with upgrading the crossing area of E.

Cotati Ave & Laguna de Santa Rosa Lighted Crosswalk (RRFB).

4. Repurposing existing vehicle fleet through strategic upfitting to convert vehicles to other uses. 36 of 437

STREET, SIDEWALK, AND STORM DRAINAGE
The community expects and depends on well-maintained city streets, streetlights, traffic signals, sidewalks, and storm drains. Well-maintained roadways are safer and improve the visual appeal of our city. It is critical to be able to leverage available grants to bring in additional funds to benefit our community. In addition, to save money overall, it is critical to fund road maintenance early to prevent expensive repairs and reconstruction of our streets later.

The City Council’s primary focus during FY 2024/25 was to complete outstanding projects while continuing to invest in new improvements, all of which benefit the City with improved levels of maintenance in the streets, sidewalks, and storm drain systems. In any given fiscal year, construction projects will often carry across fiscal years, as the June 30 fiscal year end is in the middle of the construction season. Therefore, it is expected that each year the ratio of services and capital projects/equipment will fluctuate with the timing of project construction.

The following is a summary of Measure S expenditures under the Street, Sidewalk, and Storm Drain Program:

1. Continued funding of ongoing and improved services, including the full-time civil engineer, and continuing enhanced traffic signal, streetlight, and roadway landscape maintenance.

2. Continued design and work with Caltrans on the Hwy 116 & W. Cotati Avenue Intersection.

3. Initiated construction for the Sidewalk Gap Closure Project which will be the first project to receive grant funding from Go Sonoma only available due to Measure S matching.

4. Continued Street construction work for the Redwood Drive & Cypress Repaving project as well as the 2025 Street Improvement Project

5. Continued work on the 5-Year Capital Improvement Plan for Streets and the Trash Implementation Plans for Storm Drainage.

6. Continued design on the City signage for wayfinding and City Welcome Signs. 37 of 437

PARKS AND LANDSCAPING
The City operates and maintains many public parks, including La Plaza Park, Falletti Park, Draper Park, Kotate Park, Sunflower Park, Delano Park, Putnam Park, Mini Park, and Santero Way Park. Parks provide key recreational opportunities for our residents, are local landmarks, and provide a venue for numerous community events.

The City Council’s focus during FY 2024/25 was to continue to improve the overall level of maintenance; improve existing facilities; and add high impact/low-cost safety improvements and amenities. The following is a summary of Measure S expenditures under the Park/Landscape Program:

1. Funded ongoing operations, including the cost of a full-time maintenance worker.

2. Initiated construction of the Putnam Park Phase 1 for picnic areas, dog park, and physical fitness equipment.

3. Continued maintenance of parks and clearing vegetation.

4. Continued work on design for the Park Master Plan including Civic Center Park and Sunflower Park.

5. Facilitated programs and maintenance at the Veronda-Falletti Ranch while partnering for Special Programing, Farm Maintenance, and Animal Husbandry.

6. Continued support of Creek Cleanup and events.
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PUBLIC BUILDINGS
The City operates and maintains several public buildings to conduct public meetings and provide core services to the community, including City Hall, Ray Miller Community Center and Cotati Room, Public Works Corporation Yard, Police Department, and the Cotati Train Depot.

The City Council’s primary focus during FY 2024/25 was to continue to improve the overall level of maintenance of the City Buildings. The following is a summary of Measure S expenditures under the Public Building Program:

1. Funded ongoing building operational costs.

2. Continued to fund building official inspection services and code enforcement.

3. Continued maintenance and repairs of building equipment.

4. Replaced flooring at the Civic Center classroom

5. Invested in upgrades in the City Hall AV Infrastructure removing old systems including cabling and related hardware systems while consolidating hardware locations/services for better management and resiliency of public meeting videos.

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RECREATION
During the recession and the ensuing budget cuts, the City’s Recreation Programs were eliminated. Since then, the City Council has prioritized bringing back the Recreation Department with the use of Measure S funds. The Recreation Department includes a variety of classes, workshops, camps and events for all ages, as well as management of city facilities and parks for public use. The Recreation Department provides an opportunity to bring the public together for positive, healthy activities and provide a sense of community. The following is a summary of Measure S expenditures under Recreation for FY 2024/25:

1. Funded full-time Recreation Manager, Recreation and Facilities Coordinator as well as seasonal employment for up to six part-time camp staff to assist with special recreation programs.

2. Continued expansion and support of community communication through social network services and community outreach.

3. Funded all services and supplies needed to support the growing programs. In Fiscal Year 2024/25, the following is a summary of Recreation programming and events:
a. Bunny Brunch
b. Staffed Free Children’s Summer Lunch
Program
c. Cotati Candyland downtown
trick-or-treat event
d. Promote & support Cotati Holiday Shop
& Stroll
e. Promote & support Cotati Farmers
Market
f. Bunny Grams
g. Valentine Grams
h. Counselor in Training Program
i. Community Yard Sale
j. Movies in the Park
k. Promote & Support National Night Out
l. Fall Festival at the Ranch
m. Holiday Tree Lighting
n. Breakfast with Santa
o. Promote & support the bike-to-anywhere
day.
p. Contracted camps including Several
Animal Husbandry and Farm Related
Camp Programs at Falletti Ranch
Community Yard Sale
Bunny Brunch
Camp Cotati
Cotati Kids Day
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SUMMARY
In FY 2024/25, the City undertook a total of $1,412,209 in ongoing and improved services and $1,632,451 in capital improvements and equipment. During this fiscal year, the focus was on continued preparation for continued significant capital projects for construction, as well as completion of key projects which started during FY 2023/24.

The City is proud of the safety improvements both planned and implemented, as well as the street revitalization investments made and in design during the Fiscal Year. The City looks forward to using Measure S to continue to provide many more critical infrastructure projects as well as continued improved services for our citizens.

Measure S continues to be critical for funding essential city services and infrastructure projects. The City is actively working to promote economic development within Cotati to expand and diversify the tax base to provide more longterm revenue stability. The combination of dedicated local revenue from Measure S and a growing local economy provides the local revenue to deliver the services and infrastructure that the citizens of Cotati desire.

Camp Cotati Field Trip Climate Ready Fair Bike to Anywhere Day 41 of 437
Measure S
Financial Summary
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Measure G/S - Inception To Date Expenditure Uses
Capital
Improvements &
Equipment

44.62%
Operations &
Maintenance

54.91%
State
Administrative
Fees

0.47% 43 of 437

MEASURE S SALES TAX

REVENUE AND EXPENSES
FY 2024/25
Measure S
% of
Measure S*
NET TOTAL MEASURE G/S REVENUE $ 3,044,659 100.0%

OPERATIONS AND MAINTENANCE EXPENSE DETAIL
Street, Sidewalk, and Stormdrain Program
Materials & Supplies 578 0.0%
Contract Services 19,676 0.6%
Utilities 5,153 0.2%
Repairs & Maintenance 14,866 0.5%
Salaries and Benefits 192,180 6.3%
Subtotal $ 232,454 7.6%
Public Safety Program
Materials & Supplies 2,543 0.1%
Contract Services 64,376 2.1%
Utilities 5,478 0.2%
Repairs & Maintenance 19,386 0.6%
Salaries and Benefits 388,545 12.8%
Subtotal $ 480,328 15.8%
Recreation Program
Salaries and Benefits 277,600 9.1%
Recreation Programs Expenses 167,925 5.5%
Subtotal $ 445,524 14.6%
Park/Landscape Program
Materials & Supplies 2,346 0.1%
Contract Services 30,766 1.0%
Utilities 4,565 0.1%
Repairs & Maintenance 3,226 0.1%
Salaries and Benefits 128,120 4.2%
Subtotal 169,023 5.6%
Public Building Program
Materials & Supplies 960 0.0%
Contract Services 77,552 2.5%
Utilities 3,523 0.1%
Repairs & Maintenance 2,845 0.1%
Salaries and Benefits - 0.0%
Subtotal $ 84,880 2.8%
Total Operations and Maintenance Expenses $ 1,412,209 46.4% * Percentages rounded to the nearest 0.1%.
44 of 437

MEASURE S SALES TAX

REVENUE AND EXPENSES
FY 2024/25
Measure S
% of
Measure S*

CAPITAL IMPROVEMENTS AND EQUIPMENT EXPENSE DETAIL
Street, Sidewalk, and Stormdrain Improvements
Hwy 116 & W. Cotati Ave. Intersection 274,620 9.0%
Redwood Dr. & Cypress Ave. Repaving 14,138 0.5%
Sidewalk Gap Closure 272,514 9.0%
2025 Street Improvements 110,293 3.6%
Class 1 Pathway Maintenance 28,479 0.9%
Gateway Signage 11,381 0.4%
Trash Implementation Plan Phase 1 1,965 0.1%
SubTotal $ 713,389 23.4%
Public Safety Improvements
Citywide Traffic Safety 20,830 0.7%
Vehicle Upfitting 8,892 0.3%
SubTotal $ 29,722 1.0%
Park/Landscape Improvements
Sunflower Park Design 37,232 1.2%
Putnam Park Project Phase 1 529,830 17.4%
Falletti Building/Barns 43,065 1.4%
Civic Center Park Improvements 1,880 0.1%
Annual Landscaping Improvements Projects 25,040 0.8%
SubTotal 637,047 20.9%
Public Building Improvements
City Hall AV Project 252,293 8.3%
SubTotal $ 252,293 8.3%
Total CIP and Equipment Expenses $ 1,632,451 53.6%
* Percentagesrounded to the nearest 0.1%.
45 of 437

OPERATIONS AND MAINTENANCE
Public Street, Building Sidewalk, and
Park/Landscape $84,880 Stormdrain
$169,023 $232,454
Recreation
$445,524
Public Safety
$480,328

CAPITAL IMPROVEMENT AND

EQUIPMENT
Public Street,
Building Sidewalk,
$252,293 and
Stormdrain
$713,389
Park/Landscape
$637,047 Public Safety
$29,722
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STATEMENT OF REVENUE AND USES

FOR THE FISCAL YEAR ENDING
JUNE 30, 2025
The following statements are developed for presentation within the audited financial statement for the City of Cotati for the Fiscal year ending June 30, 2025. Audit fieldwork was completed by Chavan and Associates, LLP on October 15, 2025, and the Annual Comprehensive Financial Report was presented for final approval by the City Council on November 18, 2025.

For more information about the City's historical financial activities, you can view the City's audited comprehensive financial statements at City Hall or online at: https://www.cotaticity.gov/195/Financial-Statements 47 of 437
Voter Pamphlets
48 of 437
\ '
Sonoma County 49-518 111 1111111111111111111111

VOTER'S PAMPHLET

MEASURES, ANALYSES AND ARGUMENTS
(whichever is applicable to your ballot)
Arguments in support of, or in opposition to, the proposed laws are the opinions of the authors.

CITY OF COTATI

MEASURE G
Cotati Essential City Services Measure. To maintain
G Cotati as a viable, independent, financially stable City, address State takeaways, prevent potential Police
Department elimination/permanent service cuts, and
maintain law enforcement staffing levels and other City services, including domestic violence response, street paving, and pothole repair, shall the City of Cotati extend its existing Mem;ure A sales tax and set the rate at 1¢ for nine years, with independent citizens' oversight, annual audits, and no money for Sacramento?

CITY ATTORNEY'S IMPARTIAL ANALYSIS OF MEASURE G
The City Council of the City of Cotati placed Measure G on the ballot to ask the City's voters to approve a temporary one percent (1%) transactions and use tax.

The proposed tax would add a penny to the price of an item that costs a dollar. Prior to placing Measure G on the ballot, the City Council unanimously declared the existence of an emergency in the City.

The ordinance proposed by Measure G contains findings that, as a result of factors largely outside of its control-such as the slow recovery from the recession, increased expenses, and the continued taking of City revenues by the State-and despite having taken steps to reduce its operational costs, the City is experiencing an existing and immediate funding crisis. The ordinance further finds that, absent additional General Fund revenue, the City Council will consider reducing police and other essential services, including the possible elimination of the City's Police Department. The ordinance finds that as a result, a fiscal emergency exists within the City.

Because Measure G would not limit the use of tax revenue, it is a "general tax," not a "special tax" that restricts the funds to specific purposes.Therefore, the City may use the funds for any legitimate governmental purpose. Among the examples of general services to be funded by the measure, as described in the ballot question, are maintaining the City's Police Department, including staffing levels, domestic violence response services, street paving, and pothole repair.

The proposed tax would terminate automatically after nine years, unless extended by the voters.

Measure G would require an independent auditor to provide an accounting of the revenue received as a result of the proposed tax and expenditures of the revenue in the City's audited financial statements. The auditor must present a report to the City Council regarding the use of tax proceeds. The report must be a public record.

Technically, the existing "sales tax" is a combination of "sales and use tax" and "transactions and use tax." With some exceptions, both are levied on the sale or use of tangible personal property sold at retail. Retailers collect the tax at the time of sale and remit the funds to the State Board of Equalization, which administers the tax. ·
In 2010, Cotati voters approved Measure A, increasing the sales tax rate from

8.25%lo 8.75% for five years. Measure Gwould replace the Measure A tax and set the sales tax rate at 9.25% for nine years. If Measure G is not approved, the current rate will continue until July 2015 and then become 8.25%. Revenue from Measure G would go to the City's general fund and be available to support the full range of municipal services.

A "Yes" vote is a vote to approve a one-cent sales tax for nine years, with annual review by independent auditors. A "No" vote is a vote against the tax. Measure G would be approved if it received a simple majority of "Yes" votes. s/ Robin Donoghue, City Attorney
City of Cotati

ARGUMENT IN FAVOR OF MEASURE G
Vote Yes qn G to maintain Cotati's status as a viable, independent City and prevent the elimination of our local Police Department!
Yes on G protects our City from the Sacramento money grabs that have resulted in hundreds of thousands of dollars being taken from CotaHs City budget.

Yes on G maintains guaranteed local funding for the vital public safety and community services you expect and rely on, with money that cannot be taken by Sacramento or Washington.

Yes on G ensures your tax dollars are spent locally to keep Cotati financially stable.

Yes on G is not a new tax. It simply continues existing, voter-approved funding at the one cent sales tax rate-ensuring that out-of-towners who use our local services pay their fair share. A majority of Cotati's sales tax is paid by out-of-town shoppers coming to local destinations like Lowe's.

Measure G is not a property tax or a tax on Cotati homeowners, and it does not apply to food purchased as groceries or prescription medication.

Over the last several years, the City has reduced staffing by 28%, frozen wages for over 6 years, reduced employee benefits, and reduced its overall general fund budget by 11%. Cotati has made every cut possible and we need Measure G to maintain current service levels and prevent more severe and potentially permanent service cuts.

Yes on G includes fiscal accountability provisions. Residents will have access to public expenditure reports, and annual independent audits continue to ensure City officials use voter-approved tax dollars as promised.

Join police officers, local business owners, and community leaders in voting Yes on G to protect and maintain Cotati's public safety and community services. For official information about Measure G, visit www.cotaticity.org COTATI CITY COUNCIL s/ Matthew Stapleton
s/ John A. Dell'Osso, Mayor Police Officer, Cotati resident COTATI CHAMBER OF COMMERCE s/ Prudence K. Draper
s/ Jami Brady, President 60-Year Resident and Taxpayer
s/ Moose Jamal
Local Business Owner

NO ARGUMENT WAS SUBMITTED AGAINST MEASURE G
49 of 437

VOTER'S PAMPHLET

MEASURES, ANALYSES AND ARGUMENTS
(whichever is applicable to your ballot)
Arguments in support of, or in opposition to, the proposed laws are the opinions of the authors.

FULL TEXT OF MEASURE G

AN ORDINANCE OF THE VOTERS OF THE CITY OF COTATI AMENDING CHAPTER 3.05 OF THE MUNICIPAL CODE TO EXTEND AND INCREASE A

TRANSACTIONS AND USE TAX ADMINISTERED BY THE STATE BOARD

OF EQUALIZATION
BE IT ORDAINED B'( THE VOTERS OF THE CITY OF COTATI:

SECTION 1. FINDINGS. The voters of the City of Cotati hereby find and declare as follows:
a. Cotati voters adopted Measure A in 2010, which imposed a transactions and use ("sales") tax of .05% and which sunsets in 2015. b. Measure A has provided the City with a guaranteed source of local funding for local City services that cannot be taken by the state and has helped maintain the financial viability of the City. Since voters enacted Measure A the City has maintained a full-service Police Department, with the ability t prvent and investigate property, domestic violence and other types of crime.
c. External costs beyond the City's control have increased faster than the City's revenue sources, including Measure A, and the Stale has continued lo raid the City's coffers, taking $2.3 million from the City, including $600,000 from the general fund.
d. The City is experiencing an existing and immediate funding crisis, which is the result of factors largely outside of its control, including national economic trends, rapid increases in the cost of employee retirement and health insurance benefits, decreases in revenue from existing taxes and fees, increases in charges by the County of Sonoma, and unpredictable State takeaways of local revenue.
e. The City has taken significant steps to reduce its operational costs. It has reduced staffing by 28%, reduced employee benefits and reduced its overall general fund budget by 11% while inflation has increased 20%. f. The City has used its available General Fund balance to bridge the structural budget deficit, meaning ii has used all available financial resources and will have none available to maintain services.
g. Because of changes in State law, particularly the approval of Propositions 62 and 218, the City has very few means available for increasing General Fund revenue.
h. Absent an extension and enhancement of the funds provided by Measure A, the City Council would have no choice other than to implement severe reductions in City services and potential elimination of the Police Department.

Just extending Measure A would be inadequate to address the returned emergency that faced the City in 2010. The Measure must be expanded for nine years at one cent to protect our local, high-quality services and ensure our Police Department has the resources ii needs to keep Cotati safe. i. Without further action, the revenue measure will expire in 2015, resulting in the loss of over $900,000 of funding for essential City services. j. Unless Measure A funds are enhanced and extended, public facilities and property will not be properly maintained, public safety standards will degrade, crime and violence will increase, the community will not have adequate and safe recreational opportunities, businesses and families will be discouraged from moving to or remaining in Cotati, and the health, safety, and welfare of the residents of Cotati will be endangered.
k. Because of that threat to the public health, safety, and welfare, The City Council, at its Regular meeting on February 11, 2014 unanimously adopted Resolution No. 2014-04, declaring that an emergency exists in the City. as the term "emergency" is used in Article XlllC, section 2(b) of the California Constitution. The City must immediately address that emergency by ensuring that the City has the resources necessary to preserve the public health, safety, and welfare.

I. The identified emergency necessitates that the City Council submit a tax measure to the voters of Cotati at the June 3, 2014 election, even though such an election would not be consolidated with a general election for a member of the Council.
m. Article XlllC, section 2(b) of the California Constitution permits the City, in emergency situations unanimously declared by the Council, to seek voter approval for a general tax at an election that is not consolidated with an election for a member of the Council.

SECTION 2. AMENDMENT OF CODE. "Chapter 3.05 Transactions and Use Tax" of the Cotati Municipal Code is hereby amended to read as follows:

Section 3.05.010. TITLE. This ordinance shall be known as the City of Cotati Transactions and Use Tax Ordinance. The City of Cotati hereinafter shall be called "City." This ordinance shall be applicable in the incorporated territory of the City.

Section 3.05.020. OPERATIVE DATE. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the adoption of this ordinance, the date of such adoption being as set forth below. The operative date is anticipated to be October 1, 2014.

Section 3.05.030. PURPOSE. This ordinance is adopted to achieve the following, among other purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes:

A. To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 ofDivision 2 which authorizes the City to adopt thii; tax ordinance which shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose.

B. To adopt a retail transactions and use tax ordinance that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code.

C. To adopt a retail transactions and use tax ordinance that imposes a tax and provides a measure therefore that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the State Board of Equalization in administering and collecting the California State Sales and Use Taxes.

D. To adopt a retail transactions and use tax ordinance that can be administered in a manner that will be, to the greatest degree possible, consistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, minimize the cost of collecting the transactions and use taxes, and at the same time, minimize the burden of record keeping upon persons subject to taxation under the provisions of this ordinance:

Section 3.05.040. CONTRACT WITH STATE. Prior to the operative date, the City shall contract with the State Board of Equalization to perform all functions incident to the administration and operation of this transactions and use tax ordinance; provided, that if the City shall not have contracted with the State Board of Equalization prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract.

Section 3.05.050. TRANSACTIONS TAX RATE. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the City at the rate of 1% of the gross receipts of any retailer from the sale of all tangible personal property sold at retail in said territory on and after the operative date of this ordinance.

CONT. NEXT PAGE
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50 of 437

VOTER'S PAMPHLET

MEASURES, ANALYSES AND ARGUMENTS
(whichever is applicable to your ballot)
Arguments in support of, or in opposition to, the proposed laws are the opinions of the authors.

FULL TEXT OF MEASURE G, CONT.

Section 3.05.060. PLACE OF SALE. For the purposes of this ordinance, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivei:y charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the State or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the State Board of Equalization. · Section 3.05.070. USE TAX RATE. An excise tax is hereby imposed on the storage, use or other consumption in the City of tangible personal property purchased from any retailer on and after the operative date of this ordinance for storage, use or other consumption in said territory at the rate of 1% of the sales price of the property. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made.

Section 3.05.080. ADOPTION OF PROVISIONS OF STATE LAW. Except as otherwise provided in this ordinance and excep,1 insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and TaxCjtion Code, all of the provisions of Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this ordinance as though fully set forth herein.

Section 3.05.090. LIMITATIONS ON ADOPTION OF STATE LAW
AND
COLLECTION OF USE TAXES. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code:

A. . Wherever the State of California is named or referred to as the taxing agency, the name of this City shall be substituted therefore. However, the substitution shall not be made when:

1. The word "State" is used as a part of the title of ttie State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California;

2. The result of that substitution would require action to be taken by or against this City or any agency, officer, or employee thereof rather than by or against the State Board of Equalization, in performing the functions incident to the administration or operation of this Ordinance.

3. In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to:
a. Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the State under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or;
b. Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code.

4. In Sections 6701, 6702 (except in the last sentence thereoD, 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code.

B. The word "City" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203.

Section 3.05.100. PERMIT NOT REQUIRED. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code an additional transactor's permit shall not be required by this ordinance. ' Section 3.05.110. EXEMPTIONS AND EXCLUSIONS.

A. There shall be excluded from the measure of the transactions tax and the usetax the amount of any sales tax or usetax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law or the amount of any state-administered transactions or use tax.

B. There are exempted from the computation of the amount of transactions tax the gross receipts from:

1. Sales of tangible personal property, other ttian fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government.

2. Sales of property to be used outside the City which is shipped to a point outside the City, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outh : . a. With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division

3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out-of-City address and by a declaration under penalty of perjury, signed by the buyer, stating that such .address is, in fact, his or her principal place of residence; and
b. With respect to commercial vehicles, by registration to a place of business out-of-City and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address.

3. The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date of this ordinance.

5. For the purposes of subparagraphs (3) and (4) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

C. There are exempted from the use tax imposed by this ordinance, the storage, use or other consumption in this City of tangible personal property:

1. The gross receipts from the sale of which have been subject to a transactions tax under any state-administered transactions and use tax ordinance.

2. Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California.

3. If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date of this ordinance.

4. If the possession of, or the exercise of any right or power over, the tangible personal properly arises under a lease which is a continuing purchase of such property for. any period of lime for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date of this ordinance.

CONT. NEXT PAGE
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51 of 437

VOTER'S PAMPHLET

MEASURES, ANALYSES AND ARGUMENTS
(whichever is applicable to your ballot)
Arguments in support of, or in opposition to, the proposed laws are the opinions of the authors.

FULL TEXT OF MEASURE G, CONT.

5. For the purposes of subparagraphs (3) and (4) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursu· ant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised.

6. Except as provided in subparagraph (7), a retailer engaged in business in the City shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the City or participates within the City in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the City or through any representative, agent, canvasser, solicitor, subsidiary, or person in the City under the authority of the retailer.

7. "A retailer engaged in business in the City" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the City.

D. Any person subject to use tax under this ordinance may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax.

Section 3.05.120. AMENDMENTS. All amendments subsequent to the effective date of this ordinance to Part 1 ofDivision 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this ordinance, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this ordinance.

The foregoing amendments shall not require voter approval.

The following amendments to this ordinance must be approved by the voters of the City of Cotati: increasing the tax rate or revising the methodology for calculating the tax such that a tax increase would result; imposing the tax on transactions and uses not previously subject to the tax (unless such amendment occurs automatically by operation of the preceding paragraph); or extending the tax beyond the ninth anniversary of the operative date. The City Council may otherwise amend this ordinance without submitting the amendment to the voters for approval.

Section 3.05.130. ENJOINING COLLECTION FORBIDDEN. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action or proceeding in any court against the State or the City, or against any officer of the State or the City, to prevent or enjoin the collection under this ordinance, or Part 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected.

Section 3.05.140. ANNUAL AUDIT AND PUBLIC REPORT. Annually the City Council retains an independent auditor to conduct an audit of and provide audited financial statements for all of the City's financial activities. The auditor shall include an accounting of the revenue received from the tax and expenditures thereof in the audited financial statements. The auditor's report shall be presented to the Council and made available to the public. Additionally, the Director of Administrative Services shall annually prepare and present to the Council and the public a report in conjunction with the audit that reviews the status and performance of the programs and services filnded wholly or partially with proceeds of the tax.

Section 3.05.150. TERMINATION DATE. The authority to levy the tax imposed by this ordinance shall expire on the ninth anniversary of the operative date, unless extended by a majority vote of the voters of the City.

SECTION 3. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

SECTION 4. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes and shall take effect immediately.

SECTION 5. PUBLICATION. The Clerk of the City of Cotati is hereby directed to cause the following summary of the ordinance to be published by one (1) insertion in The Community Voice, a newspaper of general circulation, circulated in the City of Cotati:

Contingent upon majority voter approval, this ordinance adopts a one cent (1%) transactions and use tax on the sale or consumption of tangible personal property within the City of Cotati. The tax shall terminate automatically upon the ninth anniversary of the State beginning to collect it, unless extended by the voters.

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Resolution Establishing
Measure G Citizens
Oversight Committee
As Adopted September 2015
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ORDINANCE NO. 899

AN ORDINANCE OF THE VOTERS OF THE CITY OF COTATI AMENDING CHAPTER 3.05 OF THE MUNICIPAL CODE TO EXTEND THE EXISTING

TRANSACTIONS AND USE TAX ADMINISTERED BY THE CALIFORNIA

DEPARTMENT OF TAX AND FEE ADMINISTRATION
BE IT ORDAINED BY THE VOTERS OF THE CITY OF COTATI:

SECTION 1. FINDINGS. The voters of the City of Cotati hereby find and declare as follows:
a. Ordinance 848 was placed on the ballot as Measure G at the June 2014 election. b. At the June 2014 election, a majority of Cotati voters adopted Measure G, which imposed a transactions and use ("sales") tax of one percent (1.0%) in the City of Cotati ("City") which will sunset on its ninth anniversary in 2023, unless extended by a majority vote of Cotati voters.
c. Measure G was codified m Chapter 3.05 "Transaction and Use Tax" of the Cotati Municipal Code.
d. Measure G has provided the City with a guaranteed source of local funding for City services that cannot be taken by the state and has helped maintain the financial viability of the City and the ability to prepare and respond to natural disasters. Since voters enacted Measure G, the City has maintained a full-service Police Department, with the ability to prevent and investigate property, domestic violence and other types of crime, including the addition of a new police officer, half time dispatcher, and dedicated traffic officer assignment; added a public works maintenance worker position for improved infrastructure maintenance; brought back the Recreation Department and completed numerous infrastructure projects, including $4.3 million to date restoring our streets, parks and public buildings, which are detailed in the annual Measure G reports to the Citizen's Oversight Committee.
e. Measure G expenditures have been reviewed annually in public meetings by the Citizens Oversight Committee to ensure expenditures meet the requirements of the voter approved revenue, with annual reports to the City Council and posted on the City website at www.cotaticity.org.
f. Measure G revenue continues to allow the City to leverage local funds to bring in significant matching state and federal funds to our community, totaling $3.6 million in grant dollars to date.
g. The State continues to create unfunded mandates through new state laws that the City is required to implement, continuing to create significant demands on staff time and City funding.
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h. Because of changes in State law, particularly the approval of Propositions 62 and 218, the City has very few means available for increasing General Fund revenue. i. Unless extended, the existing revenue measure will expire in 2023, resulting in the loss of over $2.2 million in local funding, representing 28% of the City General Fund budget for essential City services.

J. Unless extended, the City Council would have no choice other than to implement severe reductions in City services, including and potential elimination of the Police Department, Recreation Department, elimination of staff in public works, including supporting staff, and completely de-fund nearly all park, public building, and street maintenance projects, reversing the progress made with Measure G and allowing City infrastructure to fall into disrepair and far costlier to repair later.
k. The full impacts of not extending Measure G can be found on the City website, at www.cotaticity.org.

SECTION 2. AMENDMENT TO MUNICIPAL CODE. Section 3.05.150 "Termination Date" of the Cotati Municipal Code is hereby amended to read as follows:

Section 3.05.150 Termination date.

The authority to levy the tax imposed by this chapter shall expire when ended by a majority vote of the voters of the city.

SECTION 3. SEVERABILITY. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid, the remainder of the ordinance and the application of such provision to other persons or circumstances shall not be affected thereby.

SECTION 4. EFFECTIVE DATE. This ordinance relates to the levying and collecting of the City transactions and use taxes, and shall take effect immediately, but shall not become operative unless approved by a majority vote of the voters voting on the ordinance at the election held on November 3, 2020. This ordinance, if approved by a majority of the voters of the City of Cotati at the election on November 3, 2020, shall become effective ten (10) days after the declaration of the results of that election by the City Council of the City of Cotati, pursuant to Elections Code section 9217.

SECTION 5. PUBLICATION. The Clerk of the City of Cotati shall cause this ordinance to be published in accordance with applicable provisions of law.

SECTION 6. EXECUTION. The Mayor is hereby authorized to attest to the adoption of the Ordinance by the voters of the City by signing where indicated below.

It is hereby certified that the foregoing Ordinance No. 899 was APPROVED by the following vote of the People of the City of Cotati on November 3, 2020:

YESES: 3,118
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NOES: 1,068
It is hereby further certified that the foregoing Ordinance No. 899 was ADOPTED by Declaration of the November 3, 2020 election results by the City Council of the City of Cotati on December 81\ 2020, by the following vote:

RESULT: ADOPTED [UNANIMOUS]
MOVER: Susan Harvey, Councilmember
SECONDER: Mark Landman, Vice Mayor
AYES: Skillman, Moore, Harvey, Landman, Dell'Osso
W~iidy Skillm:--' ayor
IT IS HEREBY CERTIFIED that the foregoing ordinance was duly adopted at a regular meeting of the City Council of the City of Cotati held on December 8th, 2020, by the following vote, to wit:

RESULT: ADOPTED BY THE PEOPLE
Approved
Mayor
~ (l &!~
Atte LaurenB~ ~
Approved as to form:
-:z JBakker, City Attorney
This document is a true and correct copy of Ordinance Number 899and has been published or posted pursuant to law. California ·nment ode § 40806
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Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: ENDORSEMENT OF THE CITY OF COTATI’S APPLICATION

FOR THE WHALE TAIL GRANT FUNDS FROM THE

CALIFORNIA COASTAL COMMISSION
Date: January 27, 2026
Written by: Ashley Wilson, Recreation Manager
Recommendation
It is recommended that the City Council adopt a resolution endorsing the City of Cotati’s application for the Whale Tail Grant funds from the California Coastal Commission.

Background
The California Coastal Commission's Whale Tail Grants fund projects that connect people to the California Coast and its watersheds through education, stewardship, and outdoor experiences.

Grant projects can engage people of all ages and can take place anywhere in California.

Approximately $2 million in funding is available for the grant, with approximately $1 million reserved for projects led by California Native American tribal communities.

Government entities, public schools or districts, California Native American tribes, projects with a non-profit fiscal sponsor, and non-profit 501(c)(3) organizations are eligible to apply for the grant to engage communities in California and include education about coastal and marine environments. This can include classroom-based programs, field trips, climate change education and stewardship, coastal habitat restoration or shoreline cleanup programs, community or participatory science, cultural and ancestral practice preservation, workforce development, and more.

The maximum request amount is $50,000, and the grant is reimbursement based, with no match required.
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Analysis/Discussion
The City’s grant application requests $50,000 to fully fund the proposed programs and projects at the Veronda-Falletti Ranch, which would be administered by our partner, Sandy Loam. The projects include establishing a native plant nursery, propagating plants to help with erosion mitigation, facilitating erosion mitigation trips to plant for erosion resiliency, providing ocean recreation field trips for seniors and others facing access barriers, and more.

A more detailed description, including a sample timeline of programs, is provided in the proposed project description, which is attached to the resolution endorsing the submittal of the application.

Financial Considerations
A portion of the grant, totaling $27,800, will offset labor costs and indirect costs already included in the Veronda Falletti Ranch Work Plan by supporting project management & program implementation for youth enrichment, adult livelihood programming, ecological land stewardship (including development of the small greenhouse), and community festivals and gatherings. These funds will be retained by the City.

An additional $11,000 will fund new geo-textile research and development work that is not included in the Veronda Falletti Ranch Work Plan and will be additional work funded by the grant.

The remaining $11,200 in grant funds will cover additional materials and external contractor costs not included in the Veronda Falletti Ranch Work Plan and will be reimbursed via the grant.

A description of the administrative requirements for the grant, if awarded, including information on budget and reimbursement, is included in Exhibit B, attached to the resolution. If the grant is awarded a budget amendment will be required to increase the Grant Fund Revenues and Expenses by the same $50,000 amount leading to a $0 change to the Fund Balance. Staff propose that this adjustment would be approved for the City Manager to process when the award is granted.

Environmental Issues
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
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RESOLUTION NO. (XX)

RESOLUTION APPROVING APPLICATION FOR WHALE TAIL GRANT FUNDS

FROM THE CALIFORNIA COASTAL COMMISSION
WHEREAS, the Commission awards grants for projects that it determines are consistent with Division 20 of the Public Resources Code and with the Commission’s objective of protecting and enhancing California’s coast and ocean for present and future generations; and WHEREAS, the Commission requires that governing body of the grantee certify through a resolution that it approves the application for Commission grant funding and authorizes the execution by a representative of the grantee of a grant agreement on terms and conditions required by the Commission.

WHEREAS, receipt of Whale Tail Grant funds requires a budget amendment to increase both revenues and expenditures in Grant Fund 201 by fifty thousand dollars ($50,000) for fiscal year 2025/26, and to authorize the roll forward of any unused grant funds to fiscal year 2026/27 to ensure completion of the approved grant scope of work; and NOW THEREFORE BE IT RESOLVED, that the City Council:

1. Approves the filing of project proposal for Whale Tail program grant funding from the Commission; and

2. Delegates the authority to the City Manager or designee to conduct all negotiations, sign and submit all documents, including, but not limited to applications, agreements, amendments, and payment requests, which may be necessary for the completion of the grant scope(s); and

3. Agrees to comply with all applicable federal, state and local laws, ordinances, rules, regulations and guidelines.

4. Authorizes the City Manager or designee to approve a budget amendment increasing revenues and expenditures by the same amount of fifty thousand dollars ($50,000) in Grant Fund 201 for fiscal year 2025/26, and to roll forward any unexpended grant funds to fiscal year 2026/27, consistent with grant requirements and City financial policies.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 27, 2026, by the following vote, to wit:

Approved:___________________________
Mayor
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Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney
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Erosion Resiliency in the Sonoma Coastal Bioregion
Project Willow Dean
Stewarding the Watershed from the City of Cotati’s Headwaters to the Pacific Ocean The City of Cotati – Stewarding the Historic Veronda-Falletti Ranch Happy Sattva – Program Manager for Sandy Loam, Stewards of Conserved Open Space Salix laevigata, Red Willow Tree (Pawek, 2013).

Summary
The City of Cotati in partnership with Sandy Loam proposes the development of Project Willow Dean (PWD) for mitigation of erosion-sensitive areas along the Laguna de Santa Rosa watershed and the greater Sonoma Coast bioregion. PWD is a multi-benefit program that provides climate resilience through enhanced nature-based education, erosion mitigation, and coastal-based programming accessible to the community of Cotati. The mission of PWD is to aid in stewardship of the Laguna de Santa Rosa watershed through meaningful programming which, in turn enhances the engagement of the community through actionable steps designed to ensure California’s Sonoma Coast bioregion is resilient to the anticipated sea-level rise of 3.5 feet in the coming years (California Sea Level Rise Guidance, 2024). The major tasks include the propagation of native red willow (Salix laevigata), establishing a native plant nursery at the City’s historic Veronda-Falletti Ranch, facilitating erosion mitigation field trips for its citizens, developing interactive educational programming and enhancing all of these efforts through meaningful connection to the watershed and the ocean by way of trips led by an accredited California Naturalist and insured yoga instructor specializing in Applied Polyvagal Theory. The team consists of experts in erosion mitigation, open-space land stewardship, hydrogeology, foundational community wellbeing systems, and public administration.
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Project Description
Rationale
The City of Cotati lies at the southern headwaters of the Laguna de Santa Rosa, which is northern California's largest freshwater wetlands complex (The Laguna Foundation, 2020).

The Laguna is situated in Sonoma County and known for its rich biological diversity. Its 22-mile channel is the primary tributary to the Russian River, draining a 254-square-mile watershed encompassing much of the Santa Rosa Plain. These 30,000 acres of complex wetlands are facing risk from damages due to erosion causing sedimentation at the rate of 61,000 tons per year, essentially infilling the basin (Butcher, 2020). This fine sedimentary infilling reduces the Laguna’s natural ability to manage storm runoff, exacerbates downstream flooding, decimates habitats of crucial and endangered species and increases sedimentation migration into the marine ecosystem. Areas at risk are vernal pools, wetlands, coastal hillsides, stream and river banks and the Sonoma Coast’s marine habitat (Johnson, 2022). Project Willow Dean seeks to strengthen erosion resiliency efforts in this vast and complex bioregion through strategic plantings of native red willow (Salix laevigata) propagations. Red willow is a fast-growing native tree commonly found along creeks and wetlands throughout California, from sea level to 5,000 feet (Calscape, 2014).

It thrives in consistently moist areas and is often used for erosion control and ecosystem restoration projects.

It is fast growing, easily propagated from cuttings, and is an important component for native habitats,
providing food for butterflies like the Western tiger
swallowtail (Stout, 2016). Red willow holds historical
cultural significance as well, having been used by
numerous local native communities for its durable
flexibility in basketweaving and in ceremony as a
symbol of healing, community, and kinship (Putah
Creek Council, 2022). As a symbol of
interconnectedness, Sandy Loam aims to engage the
community to source local red willow cuttings from
city managed landscapes, propagate them within the
greenhouse located at the City’s own Veronda-Falletti
Ranch, and plant them along areas of the Laguna de
Santa Rosa watershed requiring erosion resiliency
support. In this way, together we may sustain our
community and heal the land from the headwaters to
the sea.
2 Figure 2. California map
showing Sonoma County
(2024).

Figure 3. Map of the Laguna de Santa Rosa
Watershed featuring the City of Cotati,
located at the Laguna’s southern headwaters
(Turner, 2009).
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Goals
● Gather, propagate and plant 1800 red willow
cuttings.
● Engage 30-60 able-bodied volunteers.
● Engage 30-60 seniors and/or others facing
barriers to accessing the ocean.
● Develop enhanced education programming.
● Develop a geotextile to enhance erosion
mitigation.
● Establish a licensed native plant nursery.

Implementation Plan
Activity 1: Red Willow Propagation and Planting for Erosion Resiliency At the heart of PWD is the effort to partner the community with red willow to observe its wisdom within the context of our bioregion and support its effect, to the benefit of all. PWD facilitates the community coming together to learn wisdom from the red willow and partner with it through efforts to gather, nurture, and plant red willow into areas needing erosion mitigation.

Accompanying these conservation efforts, PWD seeks to enhance the meaning of this work for the community through the design and implementation of enhanced event experiences. Guided by an accredited California Naturalist and insured yoga instructor specializing in Applied Polyvagal Theory, each planting event and recreational visit to the ocean will be enhanced by thoughtfully developed therapeutic programming. Participants will engage in hands-on events adapted to their ability at the Veronda-Falletti Ranch’s greenhouse where they will receive education and training on red willow propagation. Able-bodied participants will meet at predetermined planting locations and install red willow propagations, creating six erosion resiliency zones dispersed along the watershed from the headwaters in Cotati to the Sonoma Coastline.

Activity 2: Research and Development of a Geotextile for Erosion Resiliency
Propagating red willow will produce the byproduct known commonly as “willow water.” This is a solution rich in indole-3-acetic acid (IAA), the rooting hormone produced by red willow. In addition to the activities of propagating and planting red willow, PWD seeks to research and develop a geotextile combining this IAA rich solution with compostable natural fibers, which may aid in the success rate of erosion resiliency proliferation. The natural fibers may hold soils and propagations in place during the critical first few months after planting, mechanically resisting erosion. The inundation of the IAA into the 3 Figure 4. A home washed away during recent
flooding of the Russian River (Porter, 2025).

Figure 5. Gathering
red willow cuttings
for propagation
(Brocket, 2025).
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natural fibers may increase growth rate potential. With this enhancement the propagations may stand a better chance at establishing root structures in the intended location. Over the course of months and once the roots have grown, the natural fibers will decompose into a nutrient rich medium for feeding the rapidly growing propagations, further supporting the success rate of the PWD erosion resiliency efforts while leaving no trace of man-made product behind. A simple lysimeter will be constructed in the greenhouse to accommodate research by simulating erosion inducing conditions. These scientific activities will also serve to enhance and expand ongoing nature-based youth education programming.

Activity 3: Provide Enhanced Access to Ocean Recreation for Seniors and Others Facing Access Barriers
PWD seeks to engage the City of Cotati’s residents living in senior communities and others facing access barriers to the ocean in two modalities.

First, an invitation to meaningful volunteer work-days at the Veronda-Falletti Ranch where seniors and others are welcomed to socialize together for educational hands-on workshops. Participants will receive education about erosion mitigation and training in processing and caring for the red willow propagations in the greenhouse. In addition, PWD seeks to provide shuttle transportation for participants to enjoy up to six enhanced recreational outings to the Sonoma Coastline. Exposure to natural settings like the Sonoma Coastline is essential to health and wellbeing as studies have shown measurable physiological and mental health benefits (Andersen, 2021). Led by an accredited California Naturalist with specialized training in Applied Polyvagal Theory for Therapeutic Yoga (Schwartz, 2017, 2021), the 6-session series will guide participants through somatic awareness practices grounded in polyvagal theory (Porges, 2011) and trauma-informed body-based approaches (Levine, 2010). Participants will explore the interconnection between environmental resilience and nervous system regulation, fostering deeper embodied awareness and meaningful connection with self, community, and place.

Future Funding 1: Sea+Me+Cotati Fundraiser Event
PWD seeks to continue the activities listed above in this proposal past the initial funding by establishing an annual fundraiser event called Sea+Me+Cotati. This event seeks to highlight the importance of our interconnection with the Sonoma Coastal bioregion by putting out a call to artists to produce works along this theme. A silent auction will be held and donations welcomed with all proceeds going to fund the continuation of treating erosion resiliency zones along the watershed and providing meaningful beach outings to seniors and others facing barriers to accessing the ocean. Partnerships with Sonoma Land Trust and other organizations will be considered to increase sponsorship and establish patronage. Sandy Loam has plans to onboard an intern in the Spring of 2026 to support the design of a structured sponsorship program which may be implemented as a resource for this fundraiser. 4 Figure 6. Second-year
red willow propagation
displaying rapid
growth (Brocket,
2025).
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Future Funding 2: Native Plant Nursery
PWD seeks to establish a licensed commercial nursery at the Veronda-Falletti Ranch to provide salable red willow propagations and other native plants to the general public, and potentially municipal contractors. Sandy Loam has come to understand that despite valiant efforts by the City to practice conservation in their managed landscapes, the contractors performing the installation of plants at this time have little guidance as to what species are utilized. This oversight has resulted in a non-native species that is potentially invasive being introduced in one such maintenance area. If PWD establishes a native plant nursery, the City will consider including specifications in their landscaper contracts requiring the use of locally sourced native plants, which the Veronda-Falletti Ranch nursery would be well-positioned to provide. The proceeds of these sales would go to fund continuation and expansion of activities listed previously in this proposal.

Table 1. Tentative Schedule for Project Red Willow – Action Plan Key Activity 1 Activity 2 Activity 3 Fundraiser Nursery Year Month Actionable Item Measurable Goal
2026 May Gather initial red willow cuttings. 300 cuttings.

May Processing event at V.F. Ranch greenhouse. 6 seniors and/or others facing access barriers.

May-Aug. Determine target locations for plantings. 6 locations.

May-Aug Willow water collection, processing from solution for stability + natural fiber testing - laboratory
testing with simple lysimeter constructed within
greenhouse.

Produce 1) stable IAA solution,
2) natural fiber material which
retains soil under simulated
erosive conditions.

Sept. Gather a second round of red willow cuttings. 1500 cuttings.

Sept. Processing event at V.F. Ranch greenhouse. 6 seniors and/or others facing access barriers.

Oct. Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

Nov. Prepping propagations for planting at V.F. Ranch
greenhouse.
6 seniors and/or others facing
access barriers.

Nov. Host premier planting event. First location, plant up to 300 propagations.

Nov. Test geotextile prototype in field. 50% propagations planted with geotextile (treated), 50% without
(control).

Dec. Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

Dec. Field survey to observe any changes. Erosion/movement of soils at 5 65 of 437
planting area, measure any
vegetative growth - observe for
any difference between control
vs. treated.

Dec. Adjust design via laboratory testing based on the
Dec. survey (and future surveys) to improve
application results (ongoing for duration of grant
timeline).

TBD
Dec. Host premier Sea+Me+Cotati Fundraiser Event. 5 artists, 25 attendees. 2027 Jan. Prepping propagations for planting at V.F. Ranch greenhouse.
6 seniors and/or others facing
access barriers.

Jan. Host second planting event. Second location, plant up to 300 propagations.

Jan Apply geotextile to all propagations. Improved rate of success.

Jan. Field survey to observe any changes. Erosion/movement of soils at planting area, measure any
vegetative growth, sample for
rate of decay.

Jan. Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

Feb. Prepping propagations for planting at V.F. Ranch
greenhouse.
6 seniors and/or others facing
access barriers.

Feb. Host third planting event. Third location, plant up to 300 propagations.

Feb. Apply geotextile to all propagations. Improved rate of success.

Feb. Field survey to observe any changes. Erosion/movement of soils at planting area, measure any
vegetative growth, sample for
rate of decay.

Feb. Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

March Prepping propagations for planting at V.F. Ranch
greenhouse.
6 seniors and/or others facing
access barriers.

March Host fourth planting event. Fourth location, plant up to 300 propagations.

March Apply geotextile to all propagations. Improved rate of success.

March Conduct field surveys of previously planted sites. Survey report to include results from 3 sites.

April Prepping propagations for planting at V.F. Ranch
greenhouse.
6 seniors and/or others facing
access barriers.

April Host fifth planting event. Fifth location, plant up to 300 6 66 of 437
propagations.

April Apply geotextile to all propagations. Improved rate of success.

April Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

May Prepping propagations for planting at V.F. Ranch
greenhouse.
6 seniors and/or others facing
access barriers.

May Host sixth planting event. Sixth location, plant up to 300 propagations.

May Apply geotextile to all propagations. Improved rate of success.

May Field survey to observe any changes. Erosion/movement of soils at planting area, measure any
vegetative growth, sample for
rate of decay.

May Enhanced recreational outing to the ocean. 10 seniors and/or others facing access barriers.

July Conduct field surveys of previously planted sites. Survey report to include results from 6 sites.

Sept. Gather a third round of red willow cuttings. Quantity TBD based on need to replenish target. sites and
stocking greenhouse as a
resource for governments and the
community.

Sept. Processing event at V.F. Ranch greenhouse. 6 seniors and/or others facing access barriers.

Nov. Conduct field surveys of previously planted sites. Survey report to include results for 6 sites.

Dec. Host second annual Sea+Me+Cotati Fundraiser
Event.
7 artists, 35 attendees.
2028 Jan-April Establish greenhouse as a licensed nursery for red willow propagation.

Supply to 1+ contractor, host 1+
farmstand event.

March Conduct field surveys of previously planted sites. Survey report to include results for 6 sites.

April 17th Completion of All Grant Funded Activities Final Report Submitted 7 67 of 437
Project Willow Dean Coordinators
Happy Sattva
Principal Investigator – Project Manager – Sandy Loam
____________________________________________________________________________________________ A pioneer in sustainable design, Happy champions an innovative approach to nature-centric solutions that bridge the gap between human needs and environmental preservation. Her work is guided by a core philosophy of ecological balance, striving to restore and enhance biodiversity while creating resilient, low-impact educational habitats.

Francisca Lizotte
California Naturalist, Trail Guide and Educator – Common Thread Yoga ____________________________________________________________________________________________ As an accredited California Naturalist, Herbalist, Trail Guide and E-RYT with over 6,000 yoga teaching hours, Francisca creates transformative experiences which connect participants deeply with their bodies and the natural world. Her trauma-informed teaching weaves together meditation, breathwork, and somatic nervous system practices, helping students build resilience and emotional balance. Francisca provides adaptable modalities through a unique blend of Hatha and Restorative yoga.

Ashley Wilson
Grant Coordinator – Recreation Manager – The City of Cotati ____________________________________________________________________________________________ Ashley has over 20 years of parks and recreation experience working with various school districts, special districts, and municipalities. She holds a B.S. in Liberal Studies from California State University, Chico and has served for over 10 years on the California Parks and Recreation Society District 1 Board of Directors, including serving as President in 2020. She started the Recreation department in Cotati in 2015 from the ground up and continues to work to provide quality programs for all. Her passion is bringing the community together and offering unique, fun, and educational experiences for all.
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Aishwarya Kancharla
Grant Compliance Officer – Director – Sandy Loam
____________________________________________________________________________________________ Aishwarya brings over 20 years of project management expertise across education, environmental stewardship, and public health to design and implement foundational community wellbeing systems in her hometown of Cotati. She served as a Communications & Grants Officer for the USAID-funded Rule of Law – Formal project in Afghanistan and as a Healthcare Strategy and Operations Project Manager for public and private health systems worldwide. Aishwarya holds a B.A. in Journalism & Mass Communications from New York University and a J.D. from the University of California College of the Law, San Francisco (formerly UC Hastings). She is currently pursuing an A.S. in Natural Resource Management at Santa Rosa Junior College and a Graduate Certificate in Sustainable Environmental Planning & Management at the University of Connecticut.

Advisory Member
● Dr. Jejung Lee – University of Missouri - Kansas City – Dr. Lee’s expertise is in quantifying and improving the impacts of climate change and anthropogenic activities on groundwater through the integration of surficial processes, land use and vegetation. Dr. Lee has worked closely with Ms.

Sattva on a number of awarded projects during her time attending and working at UMKC.

Community Partners
● Becoming Independent - Serving individuals with intellectual and developmental disabilities. ● Charles Street Village - Affordable senior housing provider in Cotati. ● Friends of the Laguna - Established collection of citizens proactive for conservation. ● Laguna de Santa Rosa Foundation - Experts in conservation efforts within the Laguna. ● Point Blue - Leaders in climate-smart conservation and sustainable native plant environments. ● San Francisco Estuary Institute - Developers of the Laguna de Santa Rosa Master Plan. ● Sonoma Land Trust - Stewards of open space and land conservation practices. ● Sonoma Water - County water agency with a department specializing in erosion mitigation. ● The Sonoma Resource Conservation District (SCD) - Support for natural resource conservation.

Deliverables
Activity 1:

Conduct field surveys and analyze data of erosion resiliency zones, for example:
● Number of propagations alive and remaining;
● Mark and record any movement due to erosion;
● Vegetative growth rate of propagations (in centimeters).

Activity 2:

Examples of geotextile data collection:
● Rate of any changes in soil retention, control vs. geotextile treated area; ● Rate of decomposition of natural fibers under simulated environmental exposure; 9 69 of 437
● Effect on rate of growth - control vs. IAA inundated geotextile planting area.

Activity 3:

Track by surveying participants with a questionnaire including questions like the following examples:
● Describe your desired frequency of accessing the ocean; ● Rating scale: How well has this event inspired your personal connection to the ocean? ● Suggestions for improvement, including: transportation, frequency, programming.

References
Andersen, L., Corazon, S. S., & Stigsdotter, U. K. (2021). Nature Exposure and Its Effects on Immune System Functioning: A Systematic Review. International Journal of Environmental Research and Public Health, 18(4), 1416. https://doi.org/10.3390/ijerph18041416 Brockett, B. (2025, September 2). Beginner’s Guide to Willow Basketry. Foggy Blossom Farm. https://www.foggyblossomfarm.com/stories/beginners-guide-to-willow-basketry.

Butcher, Dr. J. (2020). (tech.). Laguna de Santa Rosa – Linkage Analysis for Sediment Impairments (Revised). Retrieved 2025, from
https://www.waterboards.ca.gov/northcoast/water_issues/programs/tmdls/laguna_de_santa_rosa/pdf/2510 30/sediment-budget.pdf.

California map showing Sonoma County. (2024, January 27). Wikimedia Commons. Retrieved December 7, 2025, from
https://commons.wikimedia.org/w/index.php?title=File:California_map_showing_Sonoma_County.png& oldid=845978440.

California Sea Level Rise Guidance: 2024 Science and Policy Update. 2024. California Sea Level Rise Science Task Force, California Ocean Protection Council, California Ocean Science Trust.

Calscape. (2014). Red Willow. California Native Plant Society. https://calscape.org/Salix-laevigata-(Red-Willow)
Johnson, C., Morkill, A., & Gause, A. (2022). (rep.). Laguna Foundation Impact Report 2020-2021.

Retrieved 2025, from http://www.lagunafoundation.org/pdfs/LDSR_Annual_Report_FY_20-21_web.pdf.

Levine, P. A. (2010). In An Unspoken Voice: How the body releases trauma and restores goodness. North Atlantic Books.

Pawek, J. (2013). Salix laevigata; Red Willow. Calphotos. https://calphotos.berkeley.edu/cgi/img_query?enlarge=0000%2B0000%2B1213%2B0586 Porges, S. W. (2011). The Polyvagal Theory: Neurophysiological foundations of emotions, attachment, communication, and self-regulation. W. W. Norton & Company. 10 70 of 437
Porter, K. (2025, February 4). Forestville house falls into Russian river due to mudslide. The Press Democrat. Retrieved December 7, 2025, from
https://www.pressdemocrat.com/2025/02/04/forestville-house-falls-into-russian-river-due-to-mudslide/.

Putah Creek Council. (2022, April). Red Willow (Salix laevigata). https://putahcreekcouncil.org/creekside-neighbors/red-willow-salix-laevigata/ Schwartz, A. (2017). The complex PTSD workbook: A mind-body approach to regaining emotional control and becoming whole. Althea Press.

Schwartz, A., Porges, S. W., & Cruikshank, T. (2022). Therapeutic Yoga for Trauma Recovery: Applying the principles of polyvagal theory to self-discovery, embodied healing, and meaningful change. PESI Publishing.

Stout, T. (2016, July 24). Western tiger swallowtail papilio rutulus lucas, 1852. Western Tiger Swallowtail Papilio rutulus Lucas, 1852 | Butterflies and Moths of North America. https://www.butterfliesandmoths.org/species/Papilio-rutulus#:~:text=Habitat%3A%20Woodlands%20near %20rivers%20and,rare%20stray%20to%20central%20Nebraska.

The Laguna Foundation. (2020). Recreation in the Laguna de Santa Rosa. http://www.lagunafoundation.org/about_recreation.html#:~:text=The%20largest%20tributary%20of%20t he,two%20weeks%20after%20heavy%20rainfall.

Turner, B. (2009, August 24). Map of the Laguna de Santa Rosa Watershed. http://www.lagunafoundation.org/about_maps.html
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: 120 EAST COTATI AVENUE DISPOSITION AND

DEVELOPMENT AGREEMENT
Date: January 27, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council approve a resolution directing the City Manager to execute a Disposition and Development Agreement (DDA) with Freebird Development Company, LLC for the development of 120 East Cotati Avenue as a mixed-use affordable housing project.

Background
In 2021, the City of Cotati approved a three-story mixed-use project consisting of 27 residential units and 10,400 square feet of commercial space on the subject site - three parcels totaling 0.86 acres at 120 E. Cotati Avenue. This project was never built.

On March 1, 2022, Northbay Housing filed an SB 35 development application proposing to develop a 5-story, 60-foot tall, 70-unit multi-family housing project on the site. In the summer of 2023, while still in the development review process, the applicant indicated an interest in selling the property.

On December 12, 2023, following a closed session discussion, the Cotati City Council directed staff to initiate purchase of the property at 120 E. Cotati Avenue with funding sourced from the Affordable Housing Fund. This funding source, combined with the requirements of the Surplus Land Act, requires that the City-owned property be developed with affordable housing. The specific affordability levels and unit counts are subject to various factors including zoning, funding sources and development capacity of the property. The City took ownership of this property in late 2023.

On February 13, 2024, the City Council determined that the property at 120 E. Cotati Avenue 74 of 437
was “exempt surplus land” and provided direction to staff to issue a Request for Qualifications seeking a qualified developer to partner with the City to develop a 100% affordable housing project at 120 E. Cotati Avenue. This RFQ was issued on March 21, 2024, to over 170 individuals and firms.

On April 30, 2024, City staff received a Developer Qualification Statement from Freebird Development LLC, the only party to respond to the RFQ. After reviewing the statement, an internal panel of City staff determined that Freebird Development was well qualified and versed in the development of affordable housing. On May 30, 2024, City staff interviewed Freebird Development LLC ownership and their development partners and confirmed their qualifications and development acumen.

On June 25, 2024, the City Council authorized the City Manager to enter into an Exclusive Negotiating Agreement (ENA) with Freebird Development LLC to develop a 100% affordable housing project on the city owned parcel. Signed on July 20, 2024, the ENA outlines procedures and standards for negotiating a Disposition and Development Agreement (DDA).

Under the forthcoming DDA, Freebird Development LLC will undertake specific development activities, and the City will transfer the property with a restriction mandating development of the affordable housing project, subject to negotiated conditions. The City and Freebird Development LLC have been negotiating in good faith, adhering to the ENA's terms. This includes submitting designs to City staff for review and feedback and conducting multiple community presentations to gather input on the project's design and operations. The DDA is expected to be finalized and presented to the City Council for approval within the next few months.

On September 18, 2024, City staff and the development team hosted a noticed community engagement meeting at City Hall. About a dozen people attended the meeting; largely residents either adjacent to the site or from nearby residences, including residents from the Charles Street Village senior community. The meeting focused on an introduction of the development team, proposed development & operational goals, and a survey of architectural design preferences.

On November 20, 2024, a second noticed community engagement meeting was held at City Hall, with similar attendance and many of the same attendees from the first meeting. The meeting focused on a recap of the first community engagement meeting, the results of the design survey from the first meeting, and a presentation of four design options: two mission-styled designs and two Craftsman-styled designs. Eight of the twelve attendees expressed preference for the Mission style and at least two of the attendees strongly preferred the Craftsman style.

On December 10, 2024, the project was presented to the City Council at their regular meeting.

The results of the community meetings, including design preferences, were presented. The Council was supportive of the project and expressed support for the mission-style design that was preferred by community members. The primary concern expressed by the Council members was related to traffic and turn movements onto and off E. Cotati Avenue. Staff advised the Council that a transportation impact study would be completed to specifically look at safety concerns. The transportation impact study was completed and provided to the City Council for 75 of 437
review at the August 26, 2025 City Council meeting.

On August 18, 2025, the project was presented to the Planning Commission at their regularly scheduled meeting. Similar to the previous City Council meeting, the results of the community meetings, including design preferences, were presented. Additionally, the Planning Commission reviewed recommended Conditions of Approval that are incorporated into the proposed DDA.

On August 26, 2025 the City Council received a presentation on the project. The City Council provided the following feedback as staff finalize discussions regarding the DDA:
• Make the exit from the project onto E. Cotati Ave be right-turn only • Investigate ways to widen the proposed bike lane
Analysis/Discussion
The project site is comprised of three city-owned contiguous parcels that occupy approximately

0.86 acres. The project site is vacant and relatively flat, consisting primarily of grass and scattered trees. The project features a 77,500-square-foot, three-story elevator-served building with 44 residential rental units, including studios and one-, two-, and three-bedroom units. It also includes approximately 3,850 square feet of ground floor retail/commercial space and amenities such as property management and social services offices, a common laundry room, a community room, and a landscaped second-story courtyard with seating and a playground. The project is proposed to be served by an enclosed ground-level parking garage with 54 vehicle spaces and 46 bicycle spaces.

All units, except one two-bedroom manager’s unit, will be deed-restricted as affordable for households earning 30–80% of the area median income. Additionally, twelve units will be designated as supportive housing for individuals with intellectual and developmental disabilities. 76 of 437
Disposition and Development Agreement
Following the City Council meeting on August 26, 2025, City staff and Freebird Development Company, LLC began to negotiate the DDA, with the proposed final DDA attached.

The primary business points in the DDA are as follows:
• The DDA runs through project certificate of completion, or December 31, 2032, whichever occurs first (Section 2.1). The DDA is subject to early termination for default if certain milestones are not met, as laid in the Schedule of Performance (Exhibit B). • All 43 units (excluding the manager’s unit) are restricted to households earning up to 80% of median income for Sonoma County, in accordance with the Regulatory Agreement (Exhibit D) for a term of 55 years.
• Although this Project is a ”by-right” development, it is subject to a variety of conditions of approval via the DDA, as discussed during public meetings (Exhibit E). • There is a 90-day title review period (Section 2.6) and a 180-day due diligence period (Section 2.3), after which time Freebird must give written notice to the City if they approve or disapprove of the property.
• The City would sell the property for $825,000 (Section 3.1), to partially refund the Inclusionary Housing Fund to be available for the production of more affordable housing units elsewhere in the City.
• The City would waive water conservation, traffic, park and recreation, general plan, linkage, and fire impact fees. Water and sewer impact fees are not waived, as they are Enterprise funds subject to different statutes and must be funded (Section 2.4b). • Close of escrow (property sale and transfer to Freebird), would occur when (Section 3.3):
o City has the executed Affordable Housing Agreement.
o All funds to purchase the property have been deposited into escrow and the title 77 of 437
company is ready to issue title insurance.
o All permits and governmental approvals have been secured for the Project. o The City has determined that the Project is ready to begin construction within 60 days of closing.
o The City has reviewed and approved the complete financing plan, including all needed financing either closed or ready to close concurrently with close of escrow.
o Neither party is in default of the DDA.
• Freebird will pay the cost of title insurance, transfer taxes, recordation fees and title company fees to close escrow (Section 3.5).
• The property is being sold ”as-is” (Section 3.6).
• Certificate of completion must be achieved within 36 months of close of escrow (Section

5.1(a)).
• The City will provide City staff time at no cost for plan and permit reviews. However, Freebird will pay for all third-party consultant costs (Section 5.1(b)). • Freebird will be required to pay Prevailing Wage to contractors and subcontractors, which includes apprentices and payments towards health care, retirement, etc. (Section

5.4). This is further explained later in the staff report. • Freebird will provide lease space to the City for cellular facilities at no cost, but will not be responsible for any required infrastructure and will be provided acceptable insurance and indemnification (Section 6.1b).
• Freebird will coordinate with the City to lease the commercial space on La Plaza for a community serving use. The City also has the first right of refusal and right to match any lease offers on the commercial space (Section 6.1c).
• Subject to applicable law, the City will provide Freebird with a local priority list for the renters, to provide priority for current residents or employees working within the City of Cotati, individuals or families with children whom attend Rancho Cotati school district facilities, members of the Graton Rancheria Native American Tribe, and employees of Sonoma State University (Section 6.3).
• Default & Termination (Article 7): If either party doesn’t perform any action, condition or covenant, or fails to meet the timelines in the Schedule of Performance (Exhibit B), it would constitute a default of the DDA. The non-defaulting party is required to provide written notice to the other party to cure the default within 30 days. Either party can also terminate the agreement prior to the close of escrow in the event of a failure to fulfill any conditions precedent to the close of escrow (Section 3.3). Freebird can terminate for title defects or upon property inspection, within the due diligence periods. The City can terminate if Freebird attempts to assign rights, substantially change ownership, and after close of escrow if Freebird fails to commence construction, abandons or substantially suspends construction or otherwise materially breaches the agreement. • The DDA includes a power of termination and right of reverter prior to the certificate of occupancy in certain cases (Section 7.5). This mechanism allows for the City to, in theory, terminate the DDA and essentially take the property back. However, Section 7.5b states that the City agrees to subordinate this right to any Holder (lenders) having a 78 of 437
security interest in the property. Any lender that loans on the property will insist that the City subordinate so they have a higher lien position on the property in the event of a foreclosure. • The DDA also contains the typical insurance and indemnity clauses, as well as other general legal sections (Section 9).

Conditions of Approval (COA)
The COAs are attached to the DDA as Exhibit E. Note that the City staff are currently working on consolidating this template and referring to standards rather than restating them in the COAs, so the final COAs will likely be further revised to eliminate duplication. At the end of the COA’s, the conditions added during the August 26, 2025 City Council meeting are indicated.

Schedule of Performance (SOP)
The SOP is attached to the DDA as Exhibit B, which contains the project milestones. These milestones are the primary mechanism to provide off-ramps for the City through the ”default” mechanism, as described earlier, including if the project is unable to secure financing and fails to move forward. The proposed schedule has Freebird obtaining State Capital Funding (aka ”Gap Funding”) within two years. Tax credit financing would then need to be secured within two years after that.

The State typically only has one SuperNOFA per year to obtain gap funding, and projects cannot apply for tax credits until all gap funding is secured. Therefore, the proposed schedule allows for two attempts at Gap Funding, an off ramp, and then two attempts at tax credits, and another offramp. If all funding is secured, close of escrow would occur before the end of 2030, followed by construction completion within 36 months.

Regulatory Agreement (Affordable Housing Agreement [AHA]) The AHA form is attached to the DDA as Exhibit B, which is largely a form agreement subject to approval as to form by the City Attorney. Notable terms of the AHA include that it restricts units to 80% of area median income, runs for 55 years, includes local preference policies, income verification and annual reporting, property maintenance/cleanliness requirements and monitoring and record keeping provisions. Note that this agreement also includes a subordination clause (Section 2.5), which could be important in the case of foreclosure. The AHA states that the City will not withhold consent to reasonable requests for subordination of this Agreement, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights. Although it is unlikely that a lender would require subordination of the AHA, California Housing and Community Development (HCD) may require this if they are a lender on the project. Therefore, it will be important to review any future subordination requests to protect the City’s investment and the affordability of the units, in the event of a foreclosure. 79 of 437
Prevailing Wage & Labor Compliance
Following the August 26, 2025 City Council meeting, the Nor Cal Carpenters Union provided staff with language that they requested be included in the DDA (”Prequalification Requirement”, attached). The proposed language contains sections on prevailing wage, apprenticeship, health care expenditures, dispute resolution, enforcement and severability.

Staff sought to incorporate the core elements of this request while not overly burdening the project to the point that no project moves forward, which would be a loss for everyone. As discussed further below, the proposed DDA includes the requirement for prevailing wage, apprenticeship, and as a required component of prevailing wage, health care expenditures. The DDA also includes various mechanisms for resolving disputes, enforcement and severability of the terms of the agreement.

Prevailing Wage
The proposed DDA requires that the project be constructed as a prevailing wage project (Section

5.4). Prevailing wage law (Labor Code Sections 1720 et seq.), and the implementing regulations of the Department of Industrial Relations (the “DIR”), require the use of apprentices (Labor Code Sections 1777.5 et seq.) and require payment of a variety of fringe benefits, including health care.

As an example, based on the latest prevailing wage determination by the California Department of Industrial Relations (DIR) for Sonoma County (December 1, 2025), this is how a residential carpenter would be paid:

Labor Classification Basic Straight Time Hourly Rate
Carpenter (all subtypes) $61.13
Employer Payments (Labor Code 1773.1) Rate per Hour Worked Health & Welfare $14.37
Pension $11.55
Vacation/Dues $6.08
Training $1.31
Other $3.77
Effective Hourly Compensation $98.21 (Straight time)
The DIR wage determination (see attached example), also includes provisions on the payment of overtime, recognized holidays, predetermined increases ($5.32 on July 1, 2026 applied to wages and/or fringe benefits) and required payments for travel and subsistence. In accordance with Prevailing Wage law and DIR regulations, employers who provide benefits would typically pay the base rate as cash plus the benefit cost towards the benefit programs. If employers don’t have benefit programs, the employer must pay the total hourly rate, including the benefit amounts, as cash.

Under prevailing wage law, workers on the project are required to be paid for the work that they actually do (e.g., labor, carpentry, ironworking), not just their hire title. The contractor is 80 of 437
required to submit electronic payroll records to the DIR to prove they're paying correctly, and the proposed DDA also requires the contractor to submit to the City payroll records that are certified by the contractor to be accurate (”Certified Payrolls”), for review by a third-party labor compliance monitor. Additionally, the labor compliance monitor has free access to the project site, where they will interview employees at random and note who is on-site. This is used to spot check the accuracy of the certified payrolls.

As stated earlier, prevailing wage law also requires an apprenticeship program (Labor Code Sections 1777.5 et seq.) under the jurisdiction of the California Apprenticeship Council, established pursuant to Labor Code Section 3070. The California Apprenticeship Council (CAC) sits under the DIR Division of Apprenticeship Standards and issues rules and regulations related to apprenticeship, which become implementing regulations published in the California Code of Regulations. The CAC also hears appeals of DIR Director’s determinations (as the administrator of the apprenticeship program) regarding apprentice disputes.

The CAC has 18 members; 14 are appointed by the governor for four-year terms: six represent management, six represent labor, and two represent the public. The remaining four are ex officio members representing the chancellor of the California Community Colleges, the superintendent of public instruction, Chairperson of the California Firefighter Joint Apprenticeship Committee and the DIR Director.

In accordance with Labor Code 3077, an apprentice is a person with a written agreement that receives training under approved standards developed by the DIR Division of Apprenticeship Standards. Contractors must employ registered apprentices at ratios set by the apprenticeship standards and request them from apprenticeship committees. Apprentices receive a percentage of a journeyman's wage (set by DIR), not less than a set minimum percentage and must complete formal instruction hours. Apprentices perform work under journeyman supervision, following the standards of their registered program.

Labor Compliance
At the City Council meeting on August 26, 2025, it was alleged that Freebird had labor compliance issues on projects in Santa Rosa (South Park Commons) and Healdsburg (Saggio Hills). In addition to the general allegations, the commenter specifically called out violations related to Mitsui Home America (MHA), the framing contractor on South Park Commons and RJP, the framing contractor on Saggio Hills.

In follow up after the meeting, Freebird provided staff a variety of documents to dispute the allegations, including the final third-party labor compliance report on South Park Commons.

Complaints can be filed with DIR by anyone, for any alleged labor compliance issue. When DIR initiates a complaint investigation, there is a significant amount of documentation required by the project Owner, so the Owner will be aware of any investigations.

In summary, staff did not find any complaints, investigations or violations related to MHA on South Park Commons. RJP Framing was the selected framer for the Saggio Hills project, but at the time of the August City Council meeting, this project was just entering the framing phase. 81 of 437
As of the date of this staff report, Freebird is not aware of any complaints or DIR investigations related to RJP’s work on the Saggio Hills project.

Therefore, based on the information available, staff did not find any significant issues of concern on past projects. Regardless, to provide an additional layer of impartial review during construction, the following condition of approval was added to provide a neutral third-party labor compliance monitor to ensure that everyone on site is properly classified and correctly paid. #114. The Applicant shall fund, through a deposit account, the City’s costs for a third-party labor compliance monitor. The third-party labor compliance monitor shall have full access to the construction site, copies of all certified payrolls, and anything else deemed necessary to ensure compliance with labor requirements.

Financial Considerations
The City’s original purchase price was $1,650,000, with funds sourced from the Affordable Housing Fund. Therefore, the $825,000 in sale proceeds would go back into the Affordable Housing Fund. The current estimate of the impact fees that are proposed to be waived are $1,566,170. This does not include impact fees for the water or sewer funds. Therefore, the total estimated city ”hard cost” contribution is $2,391,170 ($54,345 per door). The City will also contribute in-house staff time at no cost, although time will be tracked for costing purposes.

Freebird will retain responsibility for payment for third party consultants and building permit fees (including the labor compliance monitor), as well as various closing costs.

Environmental Issues
The project is exempt from CEQA review pursuant to Government Code Section 65651(a), as established by AB 2162, which designates qualifying supportive housing projects as a use by right in zones where multifamily and mixed-use developments are permitted. As such, the project is subject to a ministerial approval process. According to CEQA Guidelines Section 15268(a), ministerial projects are exempt from CEQA requirements. This project qualifies as supportive housing under Government Code Section 65651(a)(3), as it includes at least 12 units restricted to residents requiring supportive services. Although this project is exempt from CEQA review, the City examined the site extensively between 2017 and 2023 and approved a prior project in 2021 with the same or similar potential impacts to the environment as this project. The prior CEQA analysis described the project and its environmental setting, including the project site’s existing conditions and applicable regulatory requirements, and provided an assessment of the project’s consistency with the City of Cotati General Plan. All adopted mitigating General Plan policies and mitigation measures identified in the 2013 General Plan Environmental Impact Report (EIR) (SCH No. 2013082037) that may apply to the subject project are identified in the analysis and may be imposed as environmental conditions of approval for this project within the Development and Disposition Agreement.
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RESOLUTION NO. (XX)

RESOLUTION OF THE COUNCIL OF THE CITY OF COTATI APPROVING THE

DISPOSITION AND DEVELOPMENT AGREEMENT WITH FREEBIRD

DEVELOPMENT COMPANY, LLC FOR AN AFFORDABLE HOUSING PROJECT AT 120 EAST COTATI AVENUE, COTATI
WHEREAS, the City is the owner of three parcels of real property in the City of Cotati, legally described per Map recorded June 7, 1983, in Book 10, Pages 8 of Official Records, County of Sonoma, State of California, APNs 144-274-014, 144-274-015, and 144-274-002 (the “Property”); and
WHEREAS, on February 13, 2024, the Council of the City of Cotati, by resolution, declared the Property “Exempt Surplus Land” in accordance with the terms, requirements, and provisions of the Surplus Land Act as that term is defined in California Government Code Section 54221(f)(1)(A) or 54221(f)(1)(F), making findings and justifications that the purchaser will be required to develop a project that is consistent with either Government Code Section 54221(f)(1)(A) or 54221(f)(1)(F); and
WHEREAS, a copy of the resolution declaring the Property “Exempt Surplus Land” was sent to the California Department of Housing and Community Development in accordance with the requirements of Section 400(e) of the Surplus Land Act Guidelines (April 2021), and the Guide to Exemptions from the Standard Surplus Land Act Process for Local Agencies issued by the California Department of Housing and Community Development (July 2022); and WHEREAS, development of the Property was put out for competitive bid on March 21, 2024 through a Request for Qualifications (RFQ) process with invitations to participate being sent to all known entities (over 170 individuals and firms) as identified in GC 54222, through which Freebird Development LLC (“Freebird” or “Developer”) was the chosen partners with which to develop the Property; and
WHEREAS, the affordable housing project on the Property, includes parking and related improvements (collectively, the “Project” or “Improvements”); and WHEREAS, the City and Developer entered into an Exclusive Negotiating Rights Agreement dated July 20, 2024 (the “ENRA”), to negotiate and prepare a Disposition and Development Agreement (“Agreement”), which supersedes the ENRA upon execution; and WHEREAS, the Developer and City conducted public workshops on September 18 and November 20, 2024, followed by an initial presentation to the City Council on December 10, 2024; and
WHEREAS, based on feedback from the initial public workshops and City Council presentation, the Developer presented the proposed Project to the Planning Commission on August 18, 2025 and then the City Council on August 26, 2025; and 83 of 437
WHEREAS, the Project will consist of a three-story mixed-use affordable housing development with approximately forty-four (44) rental units, including one (1) manager’s unit and approximately forty-three (43) affordable rental units subject to a City Regulatory Agreement substantially in the form attached to this Agreement; and WHEREAS, the Project is also anticipated to include on-site parking, and indoor amenity space including a community room, a lobby, laundry facilities and a property management office. Commercial space on the ground floor fronting onto La Plaza and East Cotati Avenue is also desired. Outdoor recreation areas are anticipated to include one or more courtyards, with pedestrian and bike infrastructure anticipated to be included along the Project frontage; and
WHEREAS, the Regulatory Agreement will restrict all units (except the manager’s unit) to households earning up to 80% of area median income for Sonoma County, California, adjusted for actual household size, as determined by the U.S. Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations; and WHEREAS, the Parties wish to enter into the Agreement to set forth the terms and conditions relating to City’s disposition of the City Property to the Developer and the Developer’s obligation to construct and operate the Project consistent with the terms of the Agreement; and
WHEREAS, the Project aligns with the City’s General Plan and housing goals, enhancing the supply of affordable housing in Cotati.; and WHEREAS, the Project is exempt from CEQA review pursuant to Government Code Section 65651(a), as established by AB 2162, which designates qualifying supportive housing projects as a use by right in zones where multifamily and mixed-use developments are permitted.

As such, the project is subject to a ministerial approval process. According to CEQA Guidelines Section 15268(a), ministerial projects are exempt from CEQA requirements. The Project qualifies as supportive housing under Government Code Section 65651(a)(3), as it includes at least 12 units restricted to residents requiring supportive services. Although the Project is exempt from CEQA review, the City examined the site extensively between 2017 and 2023 and approved a prior project in 2021 with the same or similar potential impacts to the environment as the Project. The prior CEQA analysis described the Project and its environmental setting, including the Project site’s existing conditions and applicable regulatory requirements, and provided an assessment of the Project’s consistency with the City of Cotati General Plan. All adopted mitigating General Plan policies and mitigation measures identified in the 2013 General Plan Environmental Impact Report (EIR) (SCH No. 2013082037) that may apply to the Project are identified in the analysis and may be imposed as environmental conditions of approval for the Project within the Agreement.

NOW THEREFORE BE IT RESOLVED, that the City Council of the City of Cotati hereby:
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1. Finds the above recitals are true and correct and are incorporated into the findings herein.

2. Authorizes the City Manager to execute the Agreement with Freebird with any amendments that do not materially increase the City’s obligations, subject to approval as to form by the City Attorney.

3. Approves the form of the Regulatory Agreement, with any amendments that do not materially increase the City’s obligations, subject to approval as to form by the City Attorney.

4. Approves the Conditions of Approval, subject to consolidation and removal of duplicative requirements.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 27, 2026, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney
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DISPOSITION AND DEVELOPMENT AGREEMENT
by and between

THE CITY OF COTATI
AND

FREEBIRD DEVELOPMENT COMPANY, LLC
Dated as of ________________, 2026
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DISPOSITION AND DEVELOPMENT AGREEMENT
120 EAST COTATI AFFORDABLE HOUSING PROJECT
This Disposition and Development Agreement (“Agreement”) is entered into as of ________________, 2026 (the “Effective Date”), by and between the CITY OF COTATI, a California municipal corporation (the “City”), and FREEBIRD DEVELOPMENT COMPANY, LLC, a California limited liability company (the “Developer”). The City and Developer may be referred to individually as a “Party” or together as the “Parties.”

RECITALS
A. Capitalized terms used but not defined in these Recitals shall have the meanings set forth in Article 1 below. The Parties intend to refer to those definitions in connection with the use of capitalized terms in these Recitals.

B. The City is the owner of three parcels of real property in the City of Cotati, legally described per Map recorded June 7, 1983, in Book 10, Pages 8 of Official Records, County of Sonoma, State of California, APNs 144-274-014, 144-274-015, and 144-274-002, as shown on the map attached as Exhibit A (collectively, the “Property”).

C. On February 13, 2024, the Council of the City of Cotati, by resolution, declared the Property “Exempt Surplus Land” in accordance with the terms, requirements, and provisions of the Surplus Land Act as that term is defined in California Government Code Section 54221(f)(1)(A) or 54221(f)(1)(F), making findings and justifications that the purchaser will be required to develop a project that is consistent with either Government Code Section 54221(f)(1)(A) or 54221(f)(1)(F). A copy of this Resolution was sent to the California Department of Housing and Community Development in accordance with the requirements of Section 400(e) of the Surplus Land Act Guidelines (April 2021), and the Guide to Exemptions from the Standard Surplus Land Act Process for Local Agencies issued by the California Department of Housing and Community Development (July 2022).

D. Development of the Property was put out for competitive bid on March 21, 2024 through a Request for Qualifications (RFQ) process with invitations to participate being sent to all known entities (over 170 individuals and firms) as identified in GC 54222, through which Freebird Development LLC was the chosen partners with which to develop the Property.

E. The affordable housing project on the Property, including parking and related improvements (collectively, the “Project” or “Improvements”), is detailed in the Scope of Development attached as Exhibit C and the Conditions of Approval attached as Exhibit E.

F. The City and Developer entered into an Exclusive Negotiating Rights Agreement dated July 20, 2024 (the “ENRA”), to negotiate and prepare this Agreement, which supersedes the ENRA upon execution.
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G. The Developer and City conducted public workshops on September 18 and November 20, 2024, followed by an initial presentation to the City Council on December 10, 2024.

H. Based on feedback from the initial public workshops and City Council presentation, the Developer presented the proposed project to the Planning Commission on August 18, 2025 and then the City Council on August 26, 2025.

I. The Project will consist of a three-story mixed-use affordable housing development with approximately forty-four (44) rental units, including one (1) manager’s unit and approximately forty-three (43) affordable rental units subject to a City Regulatory Agreement substantially in the form attached to this Agreement as Exhibit D (the “City Regulatory Agreement”). The Project is also anticipated to include on-site parking, and indoor amenity space including a community room, a lobby, laundry facilities and a property management office. Commercial space on the ground floor fronting onto La Plaza and East Cotati Avenue is also desired. Outdoor recreation areas are anticipated to include one or more courtyards, with pedestrian and bike infrastructure anticipated to be included along the project frontage.

J. The Regulatory Agreement will restrict all units (except the manager’s unit) to households earning up to 80% of area median income for Sonoma County, California, adjusted for actual household size, as determined by the U.S. Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations. The Project is more particularly described, including the anticipated affordability level distribution, in the Scope of Development attached to this Agreement as Exhibit C and Conditions of Approval attached as Exhibit E.

K. The Parties wish to enter into this Agreement to set forth the terms and conditions relating to City’s disposition of the City Property to the Developer and the Developer’s obligation to construct and operate the Project consistent with the terms of this Agreement.

L. The Project aligns with the City’s General Plan and housing goals, enhancing the supply of affordable housing in Cotati.

NOW, THEREFORE, in reliance on the foregoing Recitals, which are incorporated herein, and for good and valuable consideration, the Parties agree as follows:
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ARTICLE 1.

TERM, DEFINITIONS, AND EXHIBITS
Section 1.1 Term
The term of this Agreement will commence on the Effective Date and will end on the earlier of:
(a) the date the Project receives a Certificate of Completion, as defined in Section 5.7, or (b) December 31, 2032, unless extended by mutual agreement of the Parties (“Outside Date”).

Section 1.2 Definitions
The following terms shall have the meanings set forth below unless the context requires otherwise:
a) “Agreement” means this Disposition and Development Agreement, including all Exhibits.
b) “CDLAC” means the California Debt Limit Allocation Committee c) “City” means the City of Cotati, a California municipal corporation. d) “City Property” or “Property” means the real property described in Recital B and Exhibit A.
e) “City Manager” means the City Manager of Cotati or their designee. f) “City Regulatory Agreement” means the regulatory agreement restricting the Project’s affordable units, attached as Exhibit D.
g) “Close of Escrow” or “Closing” means the date the Grant Deed is recorded, no later than thirty (30) days after all conditions precedent are satisfied or waived, unless extended by the Parties.
h) “Council members” means the City Council members of the City of Cotati. i) “Day” means calendar day, unless specified otherwise. j) “Default” means the failure of a Party to perform any action or covenant required by this Agreement within the time periods provided herein following notice and opportunity to cure.
k) “Developer” means Freebird Development Company, LLC, a California limited liability company, and its permitted successors or assigns.
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l) “Development”, “Improvements” or “Project” means the Property and the affordable housing project described in Recital I and Exhibit C..
m) “Due Diligence Period” has the meaning set forth in Section 2.3. n) “Effective Date” means the first date mentioned above in this Agreement. o) “Escrow” means the escrow established with the Title Company for Property conveyance and loan disbursement.
p) “Financing Plan” means the Developer’s plan for financing the Project, approved by the City, revised as needed per Section 2.4.
q) “Grant Deed” means the deed conveying the Property from the City to the Developer. r) “Hazardous Materials” means any hazardous or toxic substances, materials, wastes, pollutants, or contaminants which are defined, regulated, or listed as “hazardous substances,” “hazardous wastes,” “hazardous materials,” “pollutants,” “contaminants,” or “toxic substances” under applicable Hazardous Materials Laws, including without limitation petroleum and petroleum byproducts, flammable explosives, urea formaldehyde insulation, radioactive materials, asbestos, and lead. Hazardous Materials do not include substances that are used or consumed in the normal course of constructing, developing, operating, or occupying a mixed-use project, to the extent and degree that such substances are stored, used, and disposed of in the manner and in amounts that are consistent with normal practice and legal standards.
s) “Hazardous Materials Laws” means Federal, state, and local laws regulating Hazardous Materials.
t) “Opening of Escrow” means the date a copy of this fully executed Agreement is deposited with the Title Company and a request on Escrow Holder is made to open escrow.
u) “Owner’s Title Policy” means, at Developer’s option, either a CLTA or ALTA owner’s policy of title insurance in favor of Developer, the premium of which (including the cost of any endorsements required by Developer) shall be paid by Developer. v) “Property” or “City Property” means the real property described in Recital B and Exhibit A.
w) “Schedule of Performance” means the timeline for Project tasks, attached as Exhibit B. x) “Scope of Development” means the Project description, attached as Exhibit C, including the Conditions of Approval, attached as Exhibit E.
y) “TCAC” means the California Tax Credit Allocation Committee. 91 of 437
z) “Term” means from the Effective Date until the earlier of (a) issuance of the Certificate of Completion, or (b) the Outside Date, unless extended; provided regulatory obligations extend per Exhibit D.
aa) “Title Company”: Old Republic Title Company, Oakland, California, or another mutually agreed escrow title company.
bb) “Title Report” means the preliminary title report for the Property dated January 17, 2025, prepared by Old Republic Title Company, Oakland, California.

Section 1.3 Exhibits
The following exhibits are attached to and incorporated in the Agreement:
• Exhibit A: Legal Description and Map of the Property
• Exhibit B: Schedule of Performance
• Exhibit C: Scope of Development (Entitlement Plan Set, reviewed by the City Council on August 26, 2025)
• Exhibit D: City Regulatory Agreement
• Exhibit E: Conditions of Approval
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ARTICLE 2.

PREDISPOSITION ACTIVITIES
Section 2.1 Schedule of Performance
Tasks must be completed per the Schedule of Performance (Exhibit B), subject to Force Majeure delays (Section 9.3). The Schedule of Performance may be modified by Operating Memoranda as described in Section 9.14, executed by the Developer and by the City Manager on behalf of the City without formal amendment of this Agreement.

Section 2.2 Developer Deposit
In connection with the execution of the ENRA, the Develofinper deposited TWENTY-FIVE THOUSAND Dollars ($25,000) with the City which deposit was not subject to being increased without the consent of the Developer (the “Deposit”). The Deposit was to be used by the City to pay for the City’s third-party consultant costs and expenses associated with the negotiation and preparation of this Agreement. Within five (5) business days of the Effective Date of this Agreement, the City shall return the remaining amount of the Deposit to the Developer.

Section 2.3 Developer Due Diligence
Prior to the conveyance of the Property from the City to the Developer, and it’s representatives , agents, and/or contractors (collectively, “Developer Parties”), shall have the right of access to the Property at all reasonable times, upon not less than forty-eight hours’ prior notice, to inspect and conduct such studies of the Property as the Developer, in its sole discretion, may desire for a period of one hundred eighty (180) days following the Effective Date (the “Due Diligence Period”). On or before the expiration of the Due Diligence Period, the Developer shall give written notice to the City as to whether the Developer approves or disapproves of the Property.

During the Due Diligence Period, the City shall provide the Developer Parties the right to enter upon all portions of the Property for the purposes of conducting soils tests, engineering studies, seismic and geologic studies, inspections and testing for Hazardous Materials, and underground storage tanks, investigation of applicable zoning and other land use regulations, analysis of economic feasibility and other studies related to the Developer Parties use of the Property and the condition of the Property. The Developer shall hold the City harmless for any injury or damages arising out of any activity pursuant to this Section. The Developer Parties shall have access to all data and information on the Property available to the City, but without warranty or representation by the City as to the completeness, correctness or validity of such data and information. Notwithstanding the foregoing, the City shall disclose to Buyer any and all known violations or notices of violation issued by any governmental authority, any unrecorded liens, easements, covenants, or other title encumbrances affecting the Property, and any other known material conditions or facts relating to the Property that would reasonably be expected to affect its value, use, or compliance with applicable laws.

Section 2.4 Financing Plan
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a) Tax Credit Financing and Other Financing. Development of the Project is contingent upon (a) Developer receiving a sufficient allocation (“Tax Credit Allocation”) of lowincome housing tax credits (“Tax Credits”) from the California Tax Credit Allocation Committee (“TCAC”); and (b) Developer obtaining all other financial commitments in addition to the City’s participation to enable the Developer to finance the Project. This Agreement assumes that the Project will be financed, in part, with Tax Credits. However, Developer shall have the right to apply for additional or different sources of financing as Developer determines is necessary to ensure the feasibility of the Project, and the City Manager, in his or her reasonable discretion, shall have the authority to make all necessary amendments and/or modifications to the Agreement, including its attachments, to reflect the ultimate financing structure.
b) Financing Plan. As of the Effective Date, the City has approved the initial Financing Plan that includes potential financing from the State of California Department of Housing and Community Development and other potential sources that the Developer intends to pursue for the Project, as may be subsequently amended and approved by the City Manager. As included in the Financing Plan, the City commits to waive certain City development impact fees—specifically water conservation, traffic, park and recreation, general plan, linkage, and fire impact fees—excluding water and sewer impact fees, in the amounts published at the time of building permit issuance (the “Waived Impact Fees”). Based on the City’s current published fee schedules, the estimated value of the Waived Impact Fees is $1,566,170; however, the actual amount will be determined at the time of building permit issuance. No later than the date set forth in the Schedule of Performance, the Developer shall submit an updated and revised Financing Plan which shall include a development budget, and copies of secured funding commitments. The City shall approve or disapprove the revised Financing Plan in writing within fifteen (15) calendar days after the City’s receipt, which approval shall not be unreasonably withheld, conditioned or denied. Failure by the City to either approve or disapprove a submission made by the Developer within the time set forth above shall be deemed an approval. If the Financing Plan is disapproved by the City, the Developer shall have thirty (30) calendar days from the date of the Developer’s receipt of the City’s notice of disapproval to submit a revised Financing Plan. In the event the City disapproves the submission a second time, the City and the Developer agree to negotiate in good faith to develop a submission that is reasonably acceptable to both the City and the Developer within a reasonable period of time, provided that in no case shall the City be entitled to require changes inconsistent with the initial Financing Plan and any previously approved items.

All financing necessary to acquire the Property and develop the Development, as approved by the City in the Financing Plan (not including permanent financing), shall be closed by the Developer prior to, or simultaneously with, the conveyance of the Property by the City to the Developer.

Section 2.5 Tax Credit Applications
(a) The Developer shall submit a timely and complete application to TCAC for a preliminary reservation of Tax Credits, which may include an application for 9%, and/or 4% Tax 95 of 437
Credits and an application to the California Debt Limit Allocation Committee (“CDLAC”) for an allocation for tax exempt bonds within the time set forth in the Schedule of Performance and continue to submit such applications in each subsequent round until successful.

Section 2.6 Updated Preliminary Title Report
(a) Developer shall have an initial ninety (90) days from the Effective Date (the “Title Review Period”) to review the condition of title to the Property and to deliver to City any written title objections. City shall have thirty (30) days after receipt of Developer’s objections to notify Developer in writing of City’s proposed course of action, which shall include, either (i) remove the objection from title to the property at its sole cost prior to Closing, or (ii) decline to take any action with respect to such objection. Within thirty (30) days after receipt of City’s election or the expiration of the time for City to respond, Developer may elect, in its sole discretion, to (A) terminate this Agreement, in which event any remaining deposits shall be returned to Developer and the parties shall have no further obligations except those that expressly survive termination, or (B) to take such actions necessary to remove the exception, which may include obtaining an endorsement insuring over such exception subject to such conditions and requirements imposed by Escrow Holder, or (C) proceed with the transaction in accordance with the terms of this Agreement notwithstanding City’s election. If Developer elects clause (B) and fails to so terminate or otherwise cure within the fifteen (15) day period, then at Developer’s option, it shall be deemed to have elected clause (A) above.
(b) Following the Effective Date and prior to the Close of Escrow, the City agrees that it shall not voluntarily permit or cause to be created any exceptions to title without Developer’s prior written consent, which shall not be unreasonably withheld (the “City's Title Covenant”). A breach of the City’s Title Covenant shall be a Default. If, following the Effective Date and prior to the Close of Escrow, any new exceptions to title arise without Developer’s prior written consent, then Developer may object to such new exception by notice to City given within fifteen (15) days after Developer receives written notice of the new exception. If Developer fails to object within such period, then the new exception will be deemed to be a permitted exception. If the Developer does object, then City may elect in City’s sole and absolute discretion, at its cost, to remove any such new exceptions prior to the Close of Escrow. If City does so elect, it will notify Developer within ten (10) days after receipt of Developer’s objection. If City elects not to remove or cause to be eliminated the exception, or fails to respond within the ten (10) day period, then Developer shall have the right to: (i) terminate this Agreement by notice to City delivered within ten (10) days after Developer receives City's notice that it has elected not to remove or cause to be eliminated the exception or expiration of the ten (10) day period, whichever occurs earlier; (ii) upon written notice provided to City within ten (10) days of City's election not to remove or cause to be eliminated the exception or failure to respond, diligently proceed to take such actions necessary to remove the exception, which may include obtaining an endorsement insuring over such exception 96 of 437
subject to such conditions and requirements imposed by Escrow Holder; or (iii) proceed with the Close of Escrow subject to such exception. If Developer elects clause (ii) and fails to so terminate or elect to cure within the ten (10) day period, then it shall be deemed to have elected clause (iii) above. Exceptions that City elects not to remove or cause to be eliminated, or is deemed to have elected not to remove or cause to be eliminated, and that Developer elects to accept, or is deemed to have accepted, are also permitted exceptions.

Section 2.7 Construction Plans
During the Term, the Developer shall submit its Construction Plans to the City building department for approval within the time set forth in the Schedule of Performance. “Construction Plans” means all construction documentation upon which the Developer and the Developer’s general contractor shall rely on for constructing the Improvements identified in the Scope of Development (Exhibit C) and Conditions of Approval (Exhibit E), which includes final architectural drawings, landscaping plans and specifications, final elevations, building plans and specifications (also known as “working drawings”).
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ARTICLE 3.

CONVEYANCE OF THE PROPERTY
Section 3.1 Purchase and Sale
Subject to the terms and conditions of this Agreement, the City shall convey the Property to the Developer for eight hundred twenty-five thousand dollars ($825,000) (the “Purchase Price”), subject to this Agreement. The Property shall be conveyed by the City Grant Deed.

Section 3.2 Opening Escrow
Within 14 days of the Effective Date, the Parties shall open Escrow with the Title Company, using this Agreement as joint instructions.

Section 3.3 Conditions to Closing
The Close of Escrow is expressly conditioned upon and shall take place 30 days from the satisfaction of the following terms and conditions within the times designated below:
(a) City’s Conditions Precedent. City’s obligation to proceed with the Close of Escrow is subject to the fulfillment by Developer, or written waiver by City, of each and every one of the conditions precedent described below (“City’s Conditions Precedent”), which are solely for the benefit of City, and which shall be fulfilled or waived by the time periods provided for herein. If the City’s Conditions Precedent set forth in this Section are neither satisfied nor waived by the Outside Date, and provided that City is not then in default under this Agreement, City may terminate escrow and this Agreement by giving written notice of termination to the Developer and to Title Company, in which case the respective rights, duties and obligations of the Parties under this Agreement shall terminate without further liability, except for obligations that expressly survive termination of this Agreement. Notwithstanding anything to the contrary contained herein, Developer’s inability to satisfy the City’s Conditions Precedent set forth in this Section prior to the Outside Date shall not be considered a breach of this Agreement. The Close of Escrow under this Agreement constitutes satisfaction of the conditions precedent set forth below:
(i) Developer’s delivery of originals of the executed City Regulatory Agreement in a form approved by the Parties.
(ii) On or before the expiration of the Due Diligence Period, the Developer shall give written notice to the City that the Developer has approved the Property, as required by Section 2.3 of this Agreement. On or before the expiration of the Title Review Period, the Developer shall also provide written notice to the City that the Developer has approved the title to the Property, as required by Section 2.6. (iii) Developer’s deposit into Escrow, of the Purchase Price and all other sums to be deposited, or paid by Developer into Escrow in accordance with this Agreement. 99 of 437
(iv) The Project shall have received approval of all land use entitlements, governmental approvals and permits necessary for the construction of the Project. (v) The City has determined that the construction of the Project is ready to commence within sixty days of the Closing.
(vi) An approved and complete financing plan for all debt and equity necessary to purchase the City Property and construct the Project has been approved by the City, and all financing required by the financing plan to close at or prior to Property acquisition shall have closed or shall be ready to close concurrently with the Closing. (vii) The Developer shall not be in Default of any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained in Section 9.13 herein shall be true and correct in all material respects. (b) Developer’s Conditions Precedent. Developer’s obligation to proceed with the Close of Escrow is subject to the fulfillment by City, or written waiver by Developer, of each and all of the conditions precedent described below (“Developer’s Conditions Precedent”), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the time periods provided for herein. If the Developer’s Conditions Precedent set forth in this Section are neither satisfied nor waived by the Outside Date, and provided that Developer is not then in default under this Agreement, Developer may terminate escrow and this Agreement by giving written notice of termination to City and Title Company, in which case the respective rights, duties and obligations of the Parties under this Agreement shall terminate without further liability, except for obligations that expressly survive termination of this Agreement. Notwithstanding anything to the contrary contained herein, City’s inability to satisfy the Developer’s Conditions Precedent, except for the Developer’s Condition Precedent identified in subsection (i) below, shall not be considered a breach of this Agreement. The Close of Escrow under this Agreement constitutes satisfaction of the conditions precedent set forth below:
(i) City shall have executed and acknowledged the Grant Deed granting a fee simple interest to the City Property and any other documents required of it hereunder, and delivered them to Escrow.
(ii) Prior to the Close of Escrow, City shall not be in Default in any of its obligations under the terms of this Agreement and all representations and warranties of City contained herein shall be true and correct in all material respects. (iii) The Title Company shall have committed to issue the Owner’s Title Policy.
(iv) Developer shall have obtained all City requisite approvals of the Project. 100 of 437
If unsatisfied by the Outside Date, the non-defaulting Party may terminate per Article 7.

Section 3.4 Closing Procedures
At Closing, the Title Company shall:
a) Record the Grant Deed, then the City Regulatory Agreement. b) Disburse the Purchase Price to the City.
c) Deliver the title policy to the Developer and a final settlement statement to the Parties.

Section 3.5 Costs of Escrow and Closing
Ad valorem taxes and assessments, if any, on the Property, and taxes upon this Agreement or any rights hereunder, levied, assessed or imposed for any period commencing prior to conveyance of title shall be borne by the City. The Developer shall pay the cost of all title insurance policies, transfer tax, Title Company document preparation, recordation fees and escrow fees of the Title Company, if any, to close escrow.

Section 3.6 Property Condition
The Property is conveyed “AS IS,” subject to Developer’s due diligence. The City warrants no knowledge of Hazardous Materials except as disclosed to Developer in writing. Post-Closing, the Developer assumes all Hazardous Materials liability, indemnifying the City per Section 9.5. 101 of 437
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ARTICLE 4.
(NOT USED)
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ARTICLE 5.

CONSTRUCTION OF IMPROVEMENTS
Section 5.1 Scope of Development
(a) The Developer shall construct the Project per Exhibit C and Exhibit E, as further refined in the approved Construction Plans. Developer shall commence construction (within 60 days of closing escrow) and achieve Certificate of Completion within 36 months of the Close of Escrow.
(b) The City shall provide City staff time to review and process all development plans and permit applications at no cost to Developer. Developer will pay City, through maintenance of a development deposit account established, the reasonable cost of thirdparty consultants required by the City and necessary for review or inspections of the Project’s permit application. The Developer is responsible for all applicable and publicly listed permit fees, unless specifically waived herein.

Section 5.2 Cost of Construction
The Developer bears all planning, design, and construction costs unless otherwise stated.

Section 5.3 Equal Opportunity
During the construction of the Improvements there shall be no discrimination on the basis of race, color, creed, religion, disability, sex, sexual orientation, marital status, national origin or ancestry in the hiring, firing, promoting or demoting of any person engaged in the construction work.

Section 5.4 Compliance with Laws
The Developer shall cause all construction work to be performed in compliance with (a) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, (b) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental City now having or hereafter acquiring jurisdiction. The work shall proceed only after the payment of all applicable fees, procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction.

Section 5.4 Prevailing Wages
(a) The Developer shall and shall cause its contractors and subcontractors to pay prevailing wages in the construction of the Development as those wages are determined pursuant to Labor Code Sections 1720 et seq., and the implementing regulations of the Department of Industrial Relations (the “DIR”), to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the DIR and comply with the other 105 of 437
applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., 1810-1815 and implementing regulations of the DIR.
(b) All calls for bids, bidding materials and the construction contract documents for the Development must specify that:
(i) No contractor or subcontractor may be listed on a bid proposal nor be awarded a contract for the Development unless registered with the DIR pursuant to Labor Code Section 1725.5.
(ii) The Development is subject to compliance monitoring and enforcement by the DIR.
(c) The Developer, as the “awarding body”, shall register the Development as required by Labor Code Section 1773.3 as set forth in the DIR’s online form PWC-100 within two (2) days after entering into the Construction Contract and provide evidence of such registration to the City within two (2) days of such registration and any additional registration reporting to the DIR.
(d) In accordance with Labor Code Sections 1725.5 and 1771.1, the Developer shall require that its contractors and subcontractors be registered with the DIR, and maintain such registration as required by the DIR.
(e) Pursuant to Labor Code Section 1771.4, the Development is subject to compliance monitoring and enforcement by the DIR. The Developer shall and shall require its contractors and subcontractors to submit payroll and other records electronically to the DIR pursuant to Labor Code Sections 1771.4 and 1776 et seq., or in such other format as required by the DIR.
(f) The Developer shall and shall cause its contractors and subcontractors to keep and retain such records as are necessary to determine if prevailing wages have been paid as required pursuant to Labor Code Sections 1720 et seq., and that apprentices have been employed as required by Labor Code Section 1777.5 et seq., and shall, from time to time upon the request of the City provide to the City such records and other documentation reasonably requested by the City.
(g) The Developer shall and shall cause its respective contractors and subcontractors to comply with all other applicable provisions of Labor Code, including without limitation, Labor Code Sections 1720 et seq., 1725.5, 1771, 1771.1, 1771.4, 1776, 1777.5 et seq., 1810- 1815 and implementing regulations of the DIR in connection with construction of the Development or any other work undertaken or in connection with the Property. (h) Copies of the currently applicable current per diem prevailing wages are available from the DIR website, www.dir.ca.gov. The Developer shall cause its respective contractors to post the applicable prevailing rates of per diem wages at the Development site and to post job 106 of 437
site notices, in compliance with Title 8 California Code of Regulations 16451(d) or as otherwise as required by the DIR.

Section 5.5 Insurance Requirements
Developer shall obtain and maintain or shall cause its contractor to obtain and maintain, until the issuance of the final Certificate of Completion by City, a commercial general liability policy in the amount of Two Million Dollars ($2,000,000) per occurrence, and a comprehensive automobile liability policy in the amount of One Million Dollars ($1,000,000) per occurrence, or such other policy limits as City may reasonably approve, including contractual liability, as shall protect Developer and City from claims for such damages, and which policy shall be issued by an “A” rated insurance carrier. Such policy or policies shall be written on an occurrence form.

Developer shall also furnish or cause to be furnished to City evidence reasonably satisfactory to City that Developer and any contractor with whom it has contracted for the performance of work on the City Property or otherwise pursuant to this Agreement carries workers’ compensation insurance as required by law. Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier on a form approved by City setting forth the general provisions of the insurance coverage. This countersigned certificate shall include City and its officers, employees, agents, representatives and volunteers as additionally insured Parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by Developer shall be primary insurance and not be contributing with any insurance maintained by City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of City.

Section 5.6 Construction Responsibilities
As between the City and the Developer it shall be the responsibility of the Developer to coordinate and schedule the work to be performed so that commencement and completion of the construction of the Improvements will take place in accordance with this Agreement. The Developer shall be solely responsible for all aspects of the Developer’s conduct in connection with the Development, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, and consultants. Any review or inspection undertaken by the City with reference to the Development is solely for the purpose of determining whether the Developer is properly discharging its obligations to the City, and should not be relied upon by the Developer or by any third parties as a warranty or representation by the City as to the quality of the design or construction of the Development.

Section 5.7 Certificate of Completion
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completed by Developer upon the Property (the “Improvements”) in conformity with this Agreement, City shall furnish Developer with the “Certificate of Completion” upon written request by Developer. City shall not unreasonably withhold any such Certificate of Completion.

The Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Property and the Certificate of Completion shall so state. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder’s Office of the County. If City refuses or fails to immediately furnish a Certificate of Completion after a written request by Developer, City shall, within ten (10) days of a written request provide Developer with a detailed written analysis, which identifies each and every reason why the City refused or failed to furnish a Certificate of Completion. The statement shall also contain City’s opinion of all the actions that Developer must undertake to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, or other minor items relating to the completion of construction that are unrelated to public health and safety issues which will be determined at the sole discretion of the City, City will issue its Certificate of Completion upon the posting of a bond or other security acceptable to City in City’s reasonable discretion, in an amount representing a fair value of the work not yet completed. A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof, nor is it evidence of compliance with laws or permits. A Certificate of Completion as set forth herein is not a notice of completion as referred to in the California Civil Code Section 3093.

Section 5.8 Inspections and Reports
The Developer shall permit City inspections and provide quarterly progress reports until full lease-up.
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ARTICLE 6.

ONGOING OBLIGATIONS
Section 6.1 Use and Maintenance
(a) The Developer shall operate the Project as affordable housing per the Regulatory Agreement set out at Exhibit D for 55 years post-occupancy, maintaining it in good condition.
(b) Subject to any required approvals from the Project’s lenders and tax credit investor, the Developer shall allow the City to lease space for cellular facilities at no-cost and shall work with the City in good faith and make their best efforts to identify available locations for antennas and associated telecom equipment. City will ensure that Developer receives acceptable insurance and indemnification. The Developer shall not be responsible for installing or paying for any of the required infrastructure. (c) The Developer shall use good faith efforts to coordinate with the City to lease the commercial space on La Plaza for a community serving use and , subject to any required approvals from the Project’s lenders and tax credit investor, the City shall have the first right of refusal to match any lease offer on such commercial space, which right shall be exercised within 30 days of receiving the offer from Developer. If City does not exercise the right in such 30 day period, the right shall terminate.

Section 6.2 Nondiscrimination
No discrimination shall occur in Project operations per California Government Code §12955.

Section 6.3 Priority Housing Obligations
Developer agrees that pursuant to the City’s local preference policy, to the extent permitted by applicable law and the Project’s funding sources, to establish a priority list for the renters of the affordable housing that is built on the Property and offered for rent, which lists shall provide priority to current residents or employees working within the City of Cotati, individuals or families with children whom attend Rancho Cotati school district facilities, members of the Graton Rancheria Native American Tribe, and employees of Sonoma State University with respect to consideration of applications by such residents, employees, individuals or families, or tribal members to purchase or rent such affordable housing within the project, as applicable.

Notice of available units shall be sent to individuals on the most recent version of the City’s Housing Interest List, which shall be provided by the City upon request. Subject to the limitations of applicable law, inclusive of Federal and State Fair Housing laws and those governing Federal and State Low Income Housing Tax Credit Laws and any other applicable requirements of the Project’s funding sources which may be applicable to the development of affordable housing on the Property, the Parties agree to make best efforts to include terms in the Regulatory Agreement between City and Developer to include a preference for purchasers and renters of affordable housing offered for purchase or rent thereon.

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sources. If determined prior to Close of Escrow to be permitted, the agreed upon preferences shall be added into the final Regulatory Agreement. In the event that, prior to Close of Escrow, City is unable to sufficiently evidence compliance with applicable laws and Project funding sources, or is unable to obtain HUD’s confirmation that the preferences comply with fair housing law, then such preferences shall not apply to the Project.

Section 6.4 Taxes and Assessments
The Developer is solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development, and shall pay such charges prior to delinquency. 111 of 437
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ARTICLE 7.

DEFAULT AND REMEDIES
Section 7.1 Default Remedies
Subject to the extensions of time provided for in Section 9.3 and Section 9.14 of this Agreement, failure by either Party to perform any action, condition, or covenant required by this Agreement within the time periods provided herein, including the events and timeframes contained in Exhibit B, Schedule of Performances, following written notice and failure to cure as described herein, constitutes a “Default” under this Agreement unless defined otherwise within this Agreement. A Party claiming a default shall give written Default Notice (the “Default Notice”) to the other Party specifying and detailing the particular default. The claimant shall not institute any proceeding against any other Party, and the other Party shall not be in default if a Party, within thirty (30) days from receipt of a Default Notice, cures such default, or if the nature of such default is that it cannot reasonably be expected to be cured within such thirty (30) day period, then the claimant shall not institute any proceeding against any other Party and the other Party shall not be in default if the Party receiving the Default Notice promptly commences to cure the default and thereafter completes such cure, correction or remedy with reasonable diligence. City hereby agrees that any cure of any default that is made or tendered by the investor limited partners or lenders of Developer shall be deemed to be a cure by Developer and shall be accepted or rejected on the same basis as if made or tendered by Developer. Upon expiration of an applicable Default Notice cure period, the non-defaulting Party may terminate this Agreement and pursue any and all remedies at law or in equity.

Section 7.2 Termination by Any Party
Prior to the Close of Escrow, any Party shall have the right to terminate this Agreement, by providing written notice to the other Parties, in the event of a failure of any Condition Precedent to the Close of Escrow as set forth in Section 3.3 (Conditions of Closing) of this Agreement, provided that such condition is for the benefit of and such failure is outside the control of the Party seeking to terminate this Agreement. Upon such termination, neither the City nor Developer shall have any further rights against or liability to the other under this Agreement, except for indemnification rights that survive termination of this Agreement.

Section 7.3 Termination by Developer
In the event Developer is not in Default under this Agreement, Developer may terminate this Agreement by written notice to City (and pursue its remedies for Default, if applicable) if any of the following events occur:
(a) City does not tender title to the City Property pursuant to the Grant Deed in the manner and condition and by the date provided in this Agreement, or (b) Developer’s Conditions Precedent are not satisfied on or before the time required by this Agreement; or
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(c) Developer elects to terminate under Section 2.3 (City Property Inspection); or
(d) Default of City before the Outside Date that is not cured within the time set forth herein after written demand by Developer.

Section 7.4 Termination by City
(a) In the event City is not in Default under this Agreement, City may terminate this Agreement (subject to the notice and cure provisions set forth in Section 7.1) by written notice to Developer (and pursue its remedies for Default, if applicable, including pursuing any and all other legal remedies it may have and/or its power of termination as set forth in Section 7.5 below) in the event of a default by a Developer or failure of any Condition Precedent, including but not limited to the following:
(i) Developer fails to satisfy any Condition Precedent to the Close of Escrow within the time established therefore in this Agreement; or (ii) Developer (or any approved successor in interest) assigns or attempts to assign any of Developer’s rights in and to the City Property or any portion thereof or interest therein, or this Agreement or any portion hereof, except as permitted by this Agreement; or
(iii) There is substantial change in the ownership of Developer, or with respect to the identity of the parties in control of a Developer, or the degree thereof contrary to the provisions of Section 9.7 of this Agreement; or
(iv) There is any other material default by Developer under the terms of this Agreement which is not cured within the time provided herein. (b) After the Close of Escrow but before the issuance of the Certificate of Completion, the City shall have the right to terminate this Agreement, in the event any of the following defaults shall occur:
(i) Developer fails to commence construction of the Project as required by this Agreement and such breach is not cured within the time provided in Section 7.1 of this Agreement, provided that such Developer shall not have obtained an extension or postponement to which such Developer may be entitled pursuant to Sections 9.3 and 9.14 herein; or
(ii) Developer abandons or substantially suspends construction of the improvements, and such breach is not cured within the time provided in Section 7.1 of this Agreement, provided Developer has not obtained an extension or postponement to which such Developer may be entitled to pursuant to Sections 9.3 and 9.14 herein; or 114 of 437
(iii) Developer assigns or attempts to assign this Agreement, or any rights herein, or transfer, or suffer any involuntary transfer of their portion of the City Property, or any part thereof, in violation of this Agreement, and such breach is not cured within the time provided in Section 7.1 of this Agreement; or
(iv) Developer otherwise materially breaches this Agreement, and such breach is not cured within the time provided in Section 7.1 of this Agreement.

Section 7.5 City Power of Termination and Right of Reverter The Parties agree that the development of the City Property for the provision of affordable housing, as provided in this Agreement and the City Regulatory Agreement, is a condition subsequent, to which the fee simple estate in the City Property granted to the Developer by the City is subject. If the Developer violates this Agreement prior to the City’s issuance of the Certificate of Completion, subject to applicable notice and cure periods, the City shall have the right, in its sole and absolute discretion, in addition to any other rights and remedies granted in this Agreement or the City Regulatory Agreement, to exercise a power of termination as described in California Civil Code Section 885.010 or in accordance to any pertinent provision within Chapter 5, Title 5, Part 2, Division 2 of the California Civil Code, to terminate and revest in the City the estate in the City Property previously conveyed to Developer pursuant to this Agreement and to re-enter and take possession of the City Property with any improvements thereon. Notwithstanding anything to the contrary contained herein, Developer’s investor limited partner (if any) shall have an additional one hundred eighty (180) days to cure any violation that triggers the City’s rights under this Section 7.5 before City shall exercise such rights. (a) Upon the City’s exercise of its power of termination, the Developer or its successors or assigns shall convey by grant deed to the City title to the City Property, as specified in the City’s notice pursuant to Section 7.4(a), and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the property owner and a notary in a manner suitable for recordation. The City may enforce its rights and remedies pursuant to Section 7.5 by any lawful means, including but not limited to breach of contract, injunctive relief or forfeiture of title action filed in any court of competent jurisdiction.
(b) The City shall agree to subordinate its power of termination and right of reverter to any Holder’s security interest in the City Property. (c) The City’s right of reverter shall terminate upon the City’s issuance of the Certificate of Completion. The Parties agree to execute reasonable documentation as may be appropriate to evidence such termination; provided, however, that the termination of the right of reverter shall be self-executing upon issuance of the Certificate of Completion and not be contingent on the execution of further documentation.

Section 7.6 Rights and Remedies are Cumulative
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Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party.

Section 7.7 Inaction Not a Waiver of Default
Any failures or delays by either Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 116 of 437
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ARTICLE 8.

SECURITY FINANCING AND THE RIGHTS OF HOLDERS
Section 8.1 Project Construction Financing; Holders of Deeds of Trust Developer shall have the right to hypothecate its interest in the Project pursuant to deeds of trust from lenders for the purpose of securing a loan or loans of funds to be used for financing the costs of the Project. Any lender of record, other than City, holding a deed of trust security such as those whose name and address shall have been provided by Developer to City shall be referred to herein as a "Holder" and collectively as "Holders."

8.2 No Encumbrances Except for Development Purposes
Notwithstanding any other provision of this Agreement, mortgages and deeds of trust, or any other reasonable method of security are permitted to be placed upon the Developer’s fee interest in the Property for the purpose of securing loans approved by the City pursuant to the approved Financing Plan. Mortgages, deeds of trust, regulatory agreements, or other reasonable security instruments securing loans approved by the City pursuant to the approved Financing Plan are each referred to as a “Security Financing Interest.” The words “mortgage” and “deed of trust” as used in this Agreement include all other appropriate modes of financing real estate acquisition, construction, and land development. The filing of a mechanics’ lien against the Property shall not constitute a default hereunder; provided, however, that Developer shall cause such lien to be discharged of record within forty-five (45) days after Developer’s receipt of written notice thereof, or, if the underlying claim is being contested in good faith, Developer may post a surety bond in accordance with applicable law while diligently contesting until final resolution.

Section 8.2 Holder Not Obligated to Construct
The holder of any Security Financing Interest authorized by this Agreement is not obligated to the provisions of this Agreement, including to construct or complete any improvements or to guarantee such construction or completion. However, nothing in this Agreement shall be deemed to permit or authorize any such holder to devote the Property or any portion thereof to any uses, or to construct any improvements thereon, other than those uses of improvements provided for or authorized by this Agreement.

Section 8.3 Notice of Default and Right to Cure
Whenever the City pursuant to its rights set forth in Article 7 of this Agreement delivers any notice or demand to the Developer with respect to the commencement, completion, or cessation of the construction of the Improvements, the City shall at the same time deliver to each holder of record of any Security Financing Interest creating a lien upon the Developer’s fee interest in the Property or any portion thereof a copy of such notice or demand. Each such holder shall (insofar as the rights of the City are concerned) have the right, but not the obligation, at its option, within ninety (90) days after the receipt of the notice, to cure or remedy or commence to cure or remedy any such default or breach affecting the Property which is subject to the lien of the Security 118 of 437
Financing Interest held by such holder and to add the cost thereof to the security interest debt and the lien on its security interest. Each Holder shall be authorized to undertake or continue the construction or completion of the Improvements (i) as of right to the extent necessary to conserve or protect such improvements or construction already made without first having expressly assumed in writing the Developer’s obligations to the City relating to such Improvements under this Agreement pursuant to an assignment and assumption agreement prepared by the City, and (ii) after the holder agrees to complete, in the manner provided in this Agreement, the Improvements to which the lien or title of such holder relates. Any such holder properly completing such Improvements pursuant to this paragraph shall assume all rights and obligations of Developer under this Agreement.

Section 8.4 Right of City to Cure
In the event of a default or breach by the Developer of a Security Financing Interest prior to the completion of the construction of the Development, and the holder has not exercised its option to complete the construction of the Development, the City may cure the default, prior to the completion of any foreclosure. In such event the City shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the City in curing the default.

Section 8.5 Modifications
If a holder of a Security Financing Interest or the Investor should, as a condition of providing financing for development of all or a portion of the Development, request any modification of this Agreement in order to protect its interests in the Development or this Agreement, the City shall consider such request in good faith consistent with the purpose and intent of this Agreement and the rights and obligations of the parties under this Agreement. 119 of 437
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ARTICLE 9.

GENERAL PROVISIONS
Section 9.1 Notices, Demands and Communications
Formal notices, demands, and communications between the City and the Developer shall be sufficiently given if, and shall not be deemed given unless, dispatched by registered or certified mail, postage prepaid, return receipt requested, by reputable overnight delivery service, or delivered personally, to the principal office of the City and the Developer as follows:

City: City of Cotati
201 West Sierra Ave.

Cotati, CA 94931
Attn: City Manager
Developer: Freebird Development Company, LLC
1111 Broadway
Oakland, CA 94607
Attn: Robin Zimbler
Section 9.2 Non-Liability of City Officials and Employees No member, official, employee or agent of the City shall be personally liable to the Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Developer or successor or on any obligation under the terms of this Agreement.

Section 9.3 Force Majeure Delays; Extension of Times for Performance All performance deadlines in this Agreement shall be extended to the extent of delays caused beyond the control or without the fault of the Party claiming an extension of time to perform, including, without limitation, the following: war; acts of terrorism; insurrection; strikes; lockouts; labor troubles; inability to procure materials; power failures; riots; floods; earthquakes; fires; other natural disasters; casualties; acts of God; epidemics; pandemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; governmental moratoria; initiation of condemnation proceedings by any governmental agency; and unreasonable acts or unreasonable failures to act of City or any other public or governmental Agency or entity (determined considering the normal processes and response times of City and such governmental entities, which shall be deemed reasonable and not force majeure delays).

Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay only and shall commence to run from the time of the commencement of the cause, and only if notice by the Party claiming such extension is sent to the other Party within thirty (30) days after the commencement of the cause.

Section 9.4 Title of Parts and Sections
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Any titles of the articles, sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any part of its provision.

Section 9.5 Indemnification
Developer shall indemnify, defend, and hold the City and its Council Members, members, directors, officers, employees, consultants, agents and representatives (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, claim, demand, action, suit, legal or administrative proceeding, penalty, deficiency, fine, damage and expense (including without limitation reasonable attorneys’ fees and costs) (all of the foregoing, collectively “Claims”) arising out of or in connection with this Agreement, including but not limited to the purchase of the Property and the development, construction, marketing and operation of the Development, except to the extent such claim arises from pre-existing conditions or from the gross negligence or willful misconduct of the Indemnitees’. Developer’s defense and indemnity obligations pursuant to this Section shall survive the expiration or earlier termination of this Agreement. The Developer’s indemnity obligations under this paragraph shall not apply to (a) any Contamination of the Property that occurred or first accrued during the City’s ownership of the Site, and (b) claims arising out of the City’s failure to disclose any known condition that the City is required to give to the Developer either by law or pursuant to this Agreement. City agrees to defend, indemnify, protect and hold harmless the Developer, and its officers, beneficiaries, employees, agents, attorneys, representatives, legal successors and assigns (“Developer Indemnitees”) from, regarding and against any and all liabilities, obligations (including but not limited to the duty to respond to any governmental inquiry, investigation, claim or demand regarding such Contamination), orders, decrees, judgments, liens, demands, actions, Environmental Response Actions, claims, losses, damages, fines, penalties, expenses, Environmental Response Costs or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys’ fees and experts’ and consultants’ fees), resulting from or in connection with the fee ownership of the Property by the City, the City’s occupancy or use of such Property prior to close of escrow or the City’s performance or nonperformance under or with respect to this Agreement or the Contamination, to the extent such Contamination occurred or first accrued during the City’s ownership of the Site. If the City discovers Contamination or other materials subject to legal requirements or corrective action, the City shall immediately notify the Developer of the same.

Section 9.6 Governing Law
California law governs this Agreement.

Section 9.7 Transfers of Interest in City Property or Agreement (a) Prohibition. The qualifications and identity of Developer are very important and of particular concern to City. Because of those qualifications and identity, City has entered into this Agreement with Developer. Except as provided in Section 9.7(b) below, no voluntary or involuntary successor in interest of Developer shall, before the issuance of the Certificate of Completion, (i) acquire any rights or powers under this Agreement, or (ii) make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the 122 of 437
whole or any part of the City Property or Project without the prior written approval of the City Manager, in its reasonable discretion.
(b) Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment of this Agreement or conveyance of the City Property or Project, or any part thereof, shall not be required in connection with any of the following:
(i) The granting of reasonable easements, licenses, or permits to facilitate construction of the Project.
(ii) The granting of security interests in the Project and this Agreement to a Holder for a loan for the Project, and the transfer of title by foreclosure, deed or other conveyance in lieu of foreclosure in connection with such security interest. (iii) The conveyance of any interest in the Project after the issuance of a Certificate of Completion by City.
(iv) The assignment of this Agreement or any interest in the City Property or the Project to a limited partnership provided that Developer or an affiliate thereof is the a general partner of such limited partnership;
(v) The admission of additional general partners to the Developer’s limited partnership;
(vi) The admission of limited partners to the Developer’s limited partnership in connection with tax credit financing, and any subsequent transfer of such limited partnership interests, including any transfer of stock or equity in the limited partners that does not change management or operational control of the Project, with no material change in beneficial ownership (with the exception of any conveyance to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit) and which constitutes a tax-free transaction under Federal income tax law and California real estate transfer tax; (vii) The removal for cause of any general partner in the Developer by a limited partner of the Developer, and the replacement thereof. (viii) The lease for occupancy of all or any part of the Project in accordance with this Agreement and the City Regulatory Agreement. (c) Binding on Successors. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Agreement, or under law. The covenants and restrictions set forth in this Agreement shall run with the land and shall bind all successors in title to the Property. However, on the termination of this Agreement, such covenants and restrictions shall expire.

Section 9.8 No Brokers
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Each Party represents to the other that it has not had any contact or dealings regarding the Property, or any communication in connection with the subject matter of this transaction, through any real estate broker or other person who can claim a right to a commission or finder’s fee. If any broker or finder makes a claim for a commission or finder’s fee based upon a contact, dealings, or communications, the Party through whom the broker or finder makes this claim shall indemnify, defend with counsel of the indemnified Party’s choice, and hold the indemnified Party harmless from all expense, loss, damage and claims, including the indemnified Party’s attorneys’ fees, if necessary, arising out of the broker’s or finder’s claim. The provisions of this section shall survive expiration of the Term or other termination of this Agreement, and shall remain in full force and effect.

Section 9.9 Severability
If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

Section 9.10 Parties not Co-Venturers
Nothing in this Agreement is intended to or does establish the Parties as partners, co-venturers, or principal and agent with one another.

Section 9.11 Actions by the City
Except as may be otherwise specifically provided in this Agreement, whenever any approval, notice, direction, finding, consent, request, waiver, or other action by the City is required or permitted under this Agreement, such action may be given, made, or taken by the City Manager, or by any person who shall have been designated in writing to the Developer by the City, without further approval by the Council Members. Any such action shall be in writing. The Developer acknowledges that nothing in this Agreement (including any approval by the City Manager in accordance with this Agreement) shall limit, waive, or otherwise impair the authority and discretion of: (i) the City’s Planning Department, in connection with the review and approval of the proposed construction plans for the Development (or any change to such plans), or any use, or proposed use, of the Property, (ii) the City’s issuance of a building permit, or (iii) any other office or department of the City acting in its capacity as a governmental regulatory authority with jurisdiction over the development, use, or operation of the Development.

Section 9.12 City’s Warranty of Good Standing and Authority The City represents and warrants to the Developer that (i) this Agreement has been duly entered into and is the legally binding obligation of the City, (ii) this Agreement will not violate any judgment, law, consent decree, or agreement to which the City is a party or is subject to and will not violate any law or ordinance under which the City is organized, and (iii) there is no claim pending, or to the best knowledge of the City, threatened, that would impede the City’s ability to perform its obligation hereunder.
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Section 9.13 Representations and Warranties of the Developer The Developer hereby represents and warrants to the City as follows:
(a) Organization. The Developer is a duly organized limited liability company, validly existing, and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted. (b) Authority of Developer. The Developer has full power and authority to execute and deliver this Agreement, and the other City Documents to be executed and delivered pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above. (c) Authority of Persons Executing Documents. This Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the Developer. (d) No Conflict. To the best of the Developer’s knowledge, the Developer’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound.

Section 9.14 Operating Memoranda and Implementation Agreements The Parties acknowledge that the provisions of this Agreement require a close degree of cooperation and that new information and future events may demonstrate that changes are appropriate with respect to the details of performance of the Parties under this Agreement. The Parties desire, therefore, to retain a certain degree of flexibility with respect to the details of performance for those items covered in general terms under this Agreement. If and when, from time to time, the Parties find that refinements or adjustments are desirable, such refinements or adjustments shall be accomplished through operating memoranda or implementation agreements approved by the Parties which, after execution shall be attached to this Agreement as addenda and become a part hereof.

Operating memoranda or implementation agreements may be executed on the City’s behalf by the City Manager, or his or her designee. In the event a particular subject requires notice or hearing, such notice or hearing shall be appropriately given. Any significant modification to the terms of performance under this Agreement shall be processed as an amendment of this Agreement in accordance with Section 9.15 and must be approved by the Council Members in accordance with applicable law.

Section 9.15 Amendments
The Parties can amend this Agreement only by means of a writing signed by both Parties, following approval by the Council Members, in accordance with applicable law.

Section 9.16 Multiple Originals; Counterparts
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This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

Section 9.17 Attorney’s Fees
In any action between the Parties to interpret, enforce, reform, modify, rescind or that otherwise relates to any of the terms or provisions of this Agreement, the prevailing Party in the action shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, and reasonable attorneys’ fees.

Section 9.18 Legal Advice
Each Party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or their respective agents, employees or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.

Section 9.19 Time of Essence
Time is of the essence with respect to the performance by City and Developer of each and every obligation and condition of this Agreement in which time is a factor.

Section 9.20 Cooperation
Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements.

Section 9.21 Conflicts of InterestDeveloper acknowledges that no officer or employee of City has or shall have any direct or indirect financial interest in this Agreement nor shall Developer enter into any agreement of any kind with any such officer or employee during the term of this Agreement and for one year thereafter. Developer warrants that Developer has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining this Agreement.

Section 9.22 Entire Agreement
This Agreement contains the entire understanding between the Parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. This Agreement supersedes the ENRA, and such ENRA shall have no further force or effect. Each Party is entering this Agreement based solely upon the representations set forth herein and upon each Party’s own independent investigation of any and 126 of 437
all facts such Party deems material. This Agreement includes all Attachments, which are incorporated herein and together with the Agreement constitute the entire understanding and agreement of the Parties.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the City and the Developer have executed this Agreement as of the Effective Date.

CITY:

CITY OF COTATI,
a California municipal corporation
By: __________________________
Name: Damien O’Bid
Title: City Manager
DEVELOPER:

FREEBIRD DEVELOPMENT COMPANY, LLC,
A California limited liability company
By: __________________________
Name: Robin Zimbler
Title: Member and Manager
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EXHIBIT "A"
Legal Description
CLTA Preliminary Report Form - Modified (11.17.06) Printed: 10.24.23 @ 08:26 AM by SCA0002402.doc / Updated: 08.09.23 3 CA-FT---SPS-1-23-FSNX-3102200239 For APN/Parcel ID(s): 144-274-002-000, 144-274-014-000 and 144-274-015-000

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF COTATI, COUNTY OF SONOMA, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

Parcel One (APN: 144-274-014-000):

Lots 7, 8 and 9, Block 3, as shown upon the Map entitled "Plan of the Townsite of Cotati, being Subdivision No. 6, Rancho Cotati, Sonoma County, California, the property of the Cotati Company", filed in the Office of the County Recorder of Sonoma County, California, on June 7, 1983 in Book 10 of Maps, Page 8.

Excepting therefrom all that portion conveyed to the County of Sonoma by Deed Dated May 2, 1966 and Recorded May 20, 1966 in Book 2210 of Official Records, Page 250, Serial No. J 98361, Sonoma County Records.

Parcel Two (APN: 144-274-015-000):

Lots 10, 11 and 12, in Block 3, as shown upon the Map entitled "Plan of the Townsite of Cotati, being Subdivision No. 6, Rancho Cotati, Sonoma County, California, the property of the Cotati Company", filed in the Office of the County Recorder of Sonoma County, California, on June 7, 1983 in Book 10 of Maps, Page 8.

Excepting therefrom all that portion conveyed to the County of Sonoma by Deed Dated May 2, 1966 and Recorded May 20, 1966 in Book 2210 of Official Records, Page 250, Serial No. J 98361, Sonoma County Records.

Parcel Three (APN: 144-274-002-000):

Lot 13, in Block 3, as shown upon the Map entitled "Plan of the Townsite of Cotati, being Subdivision No. 6, Rancho Cotati, Sonoma County, California, the property of the Cotati Company", filed in the Office of the County Recorder of Sonoma County, California, on June 7, 1983 in Book 10 of Maps, Page 8. 130 of 437
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Schedule of Performance

MILESTONES OUTSIDE DEADLINE

1. Secure State Capital Funding 12/31/2027

2. Secure Tax Credits and Tax-Exempt
Bonds
12/31/2029

3. Submit Updated Financing Plan 12/31/2029

4. Submit Construction Plans 12/31/2029

5. Close Construction Financing (Escrow)
and Construction Commencement
12/31/2030

6. Completion of Project and Issuance of
Certificate of Completion
36 months after Construction Commencement
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1 989.007/631993

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Cotati

EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §§6103, 27383
______________________________________________________________________________ Space above this line for Recorder’s use.

BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF

RESTRICTIVE COVENANTS
This BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Agreement”) is entered into as of ________ (“Effective Date”), by and between the CITY OF COTATI, a municipal corporation (the “City”) and _____________, a California limited partnership (“Owner”). The City and Developer may be referred to individually as a “Party” or together as the “Parties.”

RECITALS
A. Owner is the owner of three parcels of real property in the City of Cotati legally described as per Map recorded June 7, 1983 in Book 10, Pages 8 of Official Records, in the City of Cotati, County of Sonoma, State of California, APNs 144-274-014, 144-274-015 and 144- 274-002, (“Property”) as more particularly described in Exhibit A, attached hereto and incorporated herein by this reference.

B. Owner intends to develop the Property with a new multifamily residential project with _____ (__) rental units and associated open space, parking and related improvements (collectively, the “Project”).

C. On _________, after a duly noticed public hearing, the City Council approved that certain Disposition and Development Agreement by and between the City and the Owner (the "DDA").

D. The DDA requires the Owner to develop the Project and to make all of the Project’s units (except for one unrestricted manager’s unit) affordable to below market rate (“BMR”) households earning up to 80% of area median income (the “BMR Rental Units”).

NOW, THEREFORE, the Parties hereto agree as follows. The recitals are incorporated into this Agreement by this reference.
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1. CONSTRUCTION OF THE PROJECT.

1.1. Construction of the Project. Owner agrees to construct the Project in accordance with the DDA, the Cotati Municipal Code and all other applicable state and local building codes, development standards, ordinances and zoning ordinances.

1.2. City and Other Governmental Permits. Before commencement of the Project, Owner shall secure or cause its contractor to secure any and all permits which may be required by the City or any other governmental agency affected by such construction, including without limitation building permits. Owner shall pay all necessary fees and timely submit to the City final drawings with final corrections to obtain such permits; City staff will, without incurring liability or expense therefore, process applications in the ordinary course of business for the issuance of building permits and certificates of occupancy for construction that meets the requirements of the Cotati Municipal Code, and all other applicable laws and regulations.

1.3. Compliance with Laws. Owner shall carry out the design, construction and operation of the Project in conformity with all applicable laws, including all applicable state labor standards, City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the Cotati Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.

2. OPERATION OF THE BMR UNITS

2.1. Affordability Period. The Property shall be subject to the requirements of this Agreement from the Effective Date until the 55th anniversary of the Owner’s receipt of a Certificate of Completion (as defined in the DDA) for the Project. The duration of this requirement shall be known as the “Affordability Period.”

2.2. Maintenance. Owner shall comply with every condition of the DDA applicable to the Project and shall, at all times, maintain the Project and the Property in good repair and working order, reasonable wear and tear excepted, and in a safe and sanitary condition, and from time to time shall make all necessary and proper repairs, renewals, and replacements to keep the Project and the Property in a good, clean, safe, and sanitary condition.

2.3. Monitoring and Recordkeeping. Throughout the Affordability Period, Owner shall maintain sufficient records to demonstrate compliance with this Agreement and the DDA.

City shall have the right to inspect the books and records of Owner and its rental agent or bookkeeper upon reasonable notice during normal business hours. Representatives of the City shall be entitled to enter the Property, upon at least 48-hour prior written notice, which can be provided via email, to monitor compliance with this Agreement, to inspect the records of the Project with respect to the BMR Rental Units, and to conduct, or cause to be conducted, an independent audit or inspection of such records. Owner agrees to cooperate with the City in making the Property available for such inspection or audit. Owner agrees to maintain records in businesslike manner, and to maintain such records for Affordability Period. 156 of 437
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2.4. Non-Discrimination Covenants. Owner covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, familial status, disability, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property, nor establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property. Owner shall include such provision in all deeds, leases, contracts and other instruments executed by Owner, and shall enforce the same diligently and in good faith. a. In deeds, the following language shall appear:
(1) Grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through it, that there shall be no discrimination against or segregation of a person or of a group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property herein conveyed nor shall the grantee or any person claiming under or through the grantee establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the property herein conveyed. The foregoing covenant shall run with the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).
b. In leases, the following language shall appear:
(1) The lessee herein covenants by and for the lessee and lessee’s heirs, personal representatives and assigns, and all persons claiming under the lessee or through the lessee, that this lease is made subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry or disability in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the property herein leased nor shall the lessee or any person claiming under or through the lessee establish or permit any such practice or practices of discrimination of segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein leased.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of 157 of 437
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the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).
c. In contracts pertaining to management of the Project, the following language, or substantially similar language prohibiting discrimination and segregation shall appear:
(1) There shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the property nor shall the transferee or any person claiming under or through the transferee establish or permit any such practice or practices of discrimination or segregation with reference to selection, location, number, use or occupancy of tenants, lessee, subtenants, sublessees or vendees of the land.
(2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (1) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11 and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (1).

2.5. Subordination. This Agreement shall be recorded in the Official Records of the County of Sonoma and shall run with the land. The City agrees that the City will not withhold consent to reasonable requests for subordination of this Agreement for the benefit of lenders providing financing for the Project, provided that the instruments effecting such subordination include reasonable protections to the City in the event of default, including without limitation, extended notice and cure rights.

3. AFFORDABILITY REQUIREMENTS.

3.1. BMR Rental Units. Owner agrees to make available, restrict occupancy to, and lease not less than ______ (___) BMR Rental Units to Qualifying Households, as hereinafter defined, at an affordable rent, pursuant to the terms set forth below. All BMR Rental Units (except for one unrestricted manager’s unit) shall be restricted as Low Income Units with a Monthly Rent for Low Income Households.

3.2. Qualifying Households. For purposes of this Agreement, “Qualifying Households” shall mean those households with incomes as follows:
a. “AMI” means the median income for Sonoma County, California, adjusted for actual household size, as determined by the U.S. Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937 and as published 158 of 437
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from time to time by the State of California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations or successor provision.
b. “Low-Income Unit”: means units restricted to households with incomes of not more than eighty percent (80%) of AMI. Qualifying Households shall continue to qualify unless at the time of recertification, the household’s income exceeds the Qualifying Household eligibility requirements, then the tenant shall no longer be qualified. Upon Owner’s determination that any such household is no longer qualified, (i) the tenant shall be allowed to remain in the unit but Owner may increase tenant’s rent to 30% of such household’s annual income upon the later of sixty (60) days’ notice or the renewal of the tenant’s lease, and (ii) the unit shall no longer be deemed a Low Income Unit, and the Owner shall rent the next available unit to a Low Income Household.

3.3. Income Verification and Annual Report. On or before July 1 of each year, commencing with the calendar year that the first residential unit in the Project is rented to a tenant, and annually thereafter, Owner shall obtain from each household occupying a BMR Rental Unit and submit to the City, with the published review fees, an income computation and certification form, completed by a tenant of such unit, which shall certify that the income of each Qualifying Household is truthfully set forth in the income certification form, in the form proposed by the Owner and approved by the City (“Annual Report”). Owner shall make a good faith effort to verify that each household leasing a BMR Rental Unit meets the income and eligibility restrictions for the BMR Rental Unit by taking by taking the following steps as a part of the verification process: (a) obtain a minimum of the three (3) most current pay stubs for all adults age eighteen (18) or older; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain the three (3) most current savings and checking account bank statements; (e) obtain an income verification form from the applicant's current employer; (f) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (g) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Copies of tenant income certifications shall be available to the City upon request. The Annual Report shall, at a minimum, include the following information for each BMR Rental Unit: unit number, number of bedrooms, current rent and other charges, dates of any vacancies during the reporting period, number of people residing in the unit, total household Gross Income, and lease commencement and termination dates. The Annual Report shall also provide a statement of the owner’s management policies, communications with the tenants and maintenance of the BMR Rental Unit, including a statement of planned repairs to be made and the dates for the repairs.

Developer shall pay City on an annual basis, on or before September 30 of each year following the issuance date of the Certificate of Occupancy for the building, the Monitoring Fee; provided, however, that to the extent that a unit is monitored by the County for affordability and either the County or the Developer provides evidence reasonably acceptable to the City that the County has determined that such units are in compliance with the County Loan Documents and this Agreement, the City shall not charge a Monitoring Fee for such units. 159 of 437
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In lieu of paying the annual monitoring fee to the City, the Owner may, with prior written approval of the City, elect to engage a qualified third-party entity to conduct compliance monitoring in accordance with the terms of this Agreement. The City shall not unreasonably withhold, condition, or delay its approval of such election, provided the third-party entity meets the City’s standards for qualification and competence and the work product is complete and professional, as determined in the City’s reasonable discretion.

If any third party is conducting the monitoring, as permitted by the City herein, the Owner shall provide the City with a complete duplicate copy of all reporting that is provided to the Owner or other regulating entities.

3.4. Affordable Rent. The maximum Monthly Rent, defined below, chargeable for the BMR Rental Units and paid shall be as follows:
a. “Low-Income Household”: shall be 1/12th of 30 percent of not to exceed 120 percent of the AMI. The Monthly Rent for a Low-Income Household and paid by the household shall be based on an assumed average occupancy per unit of one person per studio unit, 1.5 persons for a one- bedroom unit, 3 persons for a two-bedroom unit and 4.5 persons for a threebedroom unit.

For purposes of this Agreement, “Monthly Rent” means the total of monthly payments actually made by the household for (a) use and occupancy of each BMR Rental Unit and land and facilities associated therewith, (b) any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, and which are not paid directly by Owner, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone or internet service, which reasonable allowance for utilities is set forth in the County of Sonoma’s Utility Allowance Schedule for detached homes, apartments, condominiums and duplexes, and (d) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than Owner.

3.5. Lease Requirements. No later than 180 days prior to the initial lease up of the BMR Rental Units, Owner shall submit a standard lease form to the City for approval by the City Manager or his/her designee. The City shall reasonably approve such lease form upon finding that such lease form is consistent with this Agreement and contains all of the provisions required pursuant to the DDA. The City's failure to respond to Owner's request for approval of the standard lease form within thirty (30) business days of City's receipt of such lease, shall be deemed City's approval of such lease form. Owner shall enter into a written lease, in the form approved by the City, with each new tenant of a BMR Rental Unit prior to a tenant or tenant household’s occupancy of a BMR Rental Unit. Each lease shall be for an initial term of not less than one year which may be renewed pursuant to applicable local and State laws, and shall not contain any of the provisions which are prohibited pursuant to the Guidelines, local, state and Federal laws.

3.7 [INSERT ANY AGREED UPON PREFERENCES, IN ACCORDANCE WITH SECTION 6.3 OF THE DDA]
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3. DEFAULT AND REMEDIES

3.1. Events of Default. The following shall constitute an “Event of Default” by Owner under this Agreement: there shall be a material breach of any condition, covenant, warranty, promise or representation contained in this Agreement and such breach shall continue for a period of thirty (30) days after written notice thereof to the defaulting party without the defaulting party curing such breach, or if such breach cannot reasonably be cured within such 30 day period, commencing the cure of such breach within such 30 day period and thereafter diligently proceeding to cure such breach; provided, however, that if a different period or notice requirement is specified for any particular breach under any other paragraph of Section 4 of this Agreement, the specific provision shall control.

3.2. Remedies. The occurrence of any Event of Default under Section 4.1 shall give the non-defaulting party the right to proceed with an action in equity to require the defaulting party to specifically perform its obligations and covenants under this Agreement or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement, and the right to terminate this Agreement.

3.3. Obligations Personal to Owner. The liability of Owner under this Agreement to any person or entity is limited to Owner’s interest in the Project, and the City and any other such persons and entities shall look exclusively thereto for the satisfaction of obligations arising out of this Agreement or any other agreement securing the obligations of Owner under this Agreement.

From and after the date of this Agreement, no deficiency or other personal judgment, nor any order or decree of specific performance (other than pertaining to this Agreement, any agreement pertaining to any Project or any other agreement securing Owner’s obligations under this Agreement), shall be rendered against Owner, the assets of Owner (other than Owner’s interest in the Project), its partners, members, successors, transferees or assigns and each of their respective officers, directors, employees, partners, agents, heirs and personal representatives, as the case may be, in any action or proceeding arising out of this Agreement or any agreement securing the obligations of Owner under this Agreement, or any judgment, order or decree rendered pursuant to any such action or proceeding. No subsequent Owner of the Project shall be liable or obligated for the breach or default of any obligations of Owner under this Agreement on the part of any prior Owner. Such obligations are personal to the person who was the Owner at the time the default or breach was alleged to have occurred and such person shall remain liable for any and all damages occasioned thereby even after such person ceases to be the Owner. Each Owner shall comply with and be fully liable for all obligations the Owner hereunder during its period of ownership of the Project.

3.4. Force Majeure. Subject to the party’s compliance with the notice requirements as set forth below, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where delays or defaults are due to causes beyond the control and without the fault of the party claiming an extension of time to perform, which may include, without limitation, the following: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, assaults, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, lack of transportation, governmental restrictions or priority, litigation, unusually severe weather, inability to secure 161 of 437
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necessary labor, materials or tools, acts or omissions of the other party, or acts or failures to act of any public or governmental entity (except that the City’s acts or failure to act shall not excuse performance of the City hereunder). An extension of the time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within 30 days of the commencement of the cause.

4.5. Attorneys’ Fees. In addition to any other remedies provided hereunder or available pursuant to law, if either party brings an action or proceeding to enforce, protect or establish any right or remedy hereunder, the prevailing party shall be entitled to recover from the other party its costs of suit and reasonable attorneys' fees. This Section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.

4.6. Remedies Cumulative. No right, power, or remedy given by the terms of this Agreement is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given by the terms of any such instrument, or by any statute or otherwise.

4.7. Waiver of Terms and Conditions. The City may, in its sole discretion, waive in writing any of the terms and conditions of this Agreement. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition.

4.8. Non-Liability of City Officials and Employees. No member, official, employee or agent of the City shall be personally liable to Owner or any occupant of any BMR Unit, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement.

4.9. Cure Rights. Notwithstanding anything to the contrary contained herein, City hereby agrees that any cure of any default made or tendered by Owner’s mortgage lender, shall be deemed to be a cure by Owner and shall be accepted or rejected on the same basis as if made or tendered by Owner.

5. GENERAL PROVISIONS

5.1. Time. Time is of the essence in this Agreement.

5.2. Notices. Unless otherwise indicated in this Agreement, any notice requirement set forth herein shall be deemed to be satisfied three days after mailing of the notice first-class United States certified mail, postage prepaid, or by personal delivery, addressed to the appropriate party as follows:

OWNER:
__________________________
c/o Freebird Development Company, LLC
1111 Broadway
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Oakland, CA 94607
Attn: Robin Zimbler
CITY:

City of Cotati
201 West Sierra Ave
Cotati, CA 94931
Attention: City Manager
Such addresses may be changed by notice to the other party given in the same manner as provided above.

5.3. Successors and Assigns. This Agreement constitutes a covenant and legal restriction on the Property and shall run with the land, provided the Project remains on the Property, and all of the terms, covenants and conditions of this Agreement shall be binding upon Owner and the permitted successors and assigns of Owner.

5.4. Intended Beneficiaries. The City is the intended beneficiary of this Agreement and shall have the sole and exclusive power to enforce this Agreement. It is intended that the City may enforce this Agreement in order to, satisfy its obligations to improve, increase and preserve affordable housing within the City, as required by the DDA, and to provide that a certain percentage of new housing is made available at affordable housing cost. No other person or persons, other than the City and Owner and their assigns and successors, shall have any right of action hereon.

5.5. Partial Invalidity. If any provision of this Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired.

5.6. Governing Law. This Agreement and other instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California.

Any references herein to particular statutes or regulations shall be deemed to refer to successor statutes or regulations, or amendments thereto. The venue for any action shall be the County of San Mateo.

5.7. Amendment. This Agreement may not be changed orally, but only by agreement in writing signed by Owner and the City.

5.8. Approvals. Where an approval or submission is required under this Agreement, such approval or submission shall be valid for purposes of this Agreement only if made in writing. Where this Agreement requires an approval or consent of the City, such approval shall not be unreasonably withheld may be given on behalf of the City by the City Manager or his or her designee. The City Manager or his or her designee is hereby authorized to take such actions as may be necessary or appropriate to implement this Agreement, including without limitation the execution of such documents or agreements as may be contemplated by this Agreement, and amendments which do not substantially change the uses or restrictions hereunder, or substantially add to the costs of the City hereunder.

5.9. Indemnification. To the greatest extent permitted by law, Owner shall indemnify, defend (with counsel reasonably approved by City) and hold the City, its heirs, successors and 163 of 437
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assigns (the “Indemnitees”) harmless from and against any and all demands. losses, claims, costs and expenses, and any other liability whatsoever, including without limitation, reasonable accountants’ and attorneys’ fees, charges and expense (collectively, “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, or operation of the Property and the Project or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 5.9 shall not extend to Claims to the extent resulting from the gross negligence or willful misconduct of Indemnitees. The provisions of this Section 5.9 shall survive the expiration or earlier termination of this Agreement, but only as to claims arising from events occurring during the Affordability Period.

5.10. Transfer and Encumbrance.

5.10.1. Restrictions on Transfer and Encumbrance. During the term of this Agreement, except as permitted pursuant to this Agreement, Owner shall not directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (other than a lease of a BMR Rental unit on an approved form under Section 3.6 hereof to a qualified tenant as described in Section 3.7 hereof) (collectively, “Transfer”) of the whole or any part of any BMR Rental Unit, without the prior written consent of the City, which approval shall not be unreasonably withheld. In addition, prior to the expiration of the term of this Agreement, except as expressly permitted by this Agreement, Owner shall not undergo any significant change of ownership without the prior written approval of City, which shall not be unreasonably withheld. For purposes of this Agreement, a “significant change of ownership” shall mean a transfer of the beneficial interest of more than twenty-five percent (25%) in aggregate of the present ownership and /or control of Owner, taking all transfers into account on a cumulative basis; provided however, neither the admission of an investor limited partner, nor the transfer by the investor limited partner to subsequent limited partners shall be restricted by this provision.

5.10.2. Permitted Transfers. The prohibitions on Transfer set forth herein shall not be deemed to prevent: (i) the granting of easements or permits to facilitate development of the Property; (ii) assignments creating security interests for the purpose of financing the acquisition, construction, or permanent financing of the Project or the Property, or Transfers directly resulting from the foreclosure of, or granting of a deed in lieu of foreclosure of, such a security interest; (iii) the removal for cause of any general partner in the Owner by a limited partner of the Owner, and the replacement thereof; or (iv) transfers between entities owned or controlled by Freebird Development Company, LLC or __________.

5.10.3. Requirements for Proposed Transfers. The City may, in the exercise of its discretion, not to be unreasonably withheld, consent to a proposed Transfer of this Agreement and/or a BMR Rental Unit if all of the following requirements are met (provided however, the requirements of this Section 5.12.3 shall not apply to Transfers described in clauses (i), (ii), or (iii) of Section 5.12.2.
(i) The proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently complete and manage the Project and to otherwise fulfill the obligations undertaken by the Owner under this Agreement. 164 of 437
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(ii) The Owner and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of all or any part of or interest in the BMR Rental Unit or this Agreement together with such documentation of the proposed transferee’s qualifications and development capacity as the City may reasonably request.
(iii) The proposed transferee shall expressly assume all of the rights and obligations of the Owner under this Agreement arising after the effective date of the Transfer and all obligations of Owner arising prior to the effective date of the Transfer (unless Owner expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Owner’s obligations pursuant to conditions, and restrictions set forth in this Agreement. (iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

If the City has not rejected a proposed Transfer or requested additional information regarding a proposed Transfer in writing within forty-five (45) days following City’s receipt of written request by Owner, the proposed Transfer shall be deemed approved.

5.11. Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer of any BMR Rental Unit shall be deemed to relieve the Owner or any other party from any obligation under this Agreement. This Section 5.12 shall not apply to Transfers described in clauses (i) and (ii) of Section 5.12.2.

5.12. Recovery of City Costs. Owner shall reimburse City for all reasonable City costs, including but not limited to reasonable attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Owner of an invoice detailing such costs. [SIGNATURES ON FOLLOWING PAGE(S).]
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IN WITNESS WHEREOF, Owner and City have executed this Agreement as of the Effective Date.

CITY:

CITY OF COTATI,
a California municipal corporation
By: _______________________________
OWNER:

By: ____________________________
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Exhibit A
Property Description
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(Continued)

PREVAILING WAGE DETERMINATION MADE BY THE DIRECTOR

OF INDUSTRIAL RELATIONS PURSUANT TO CALIFORNIA LABOR CODE PART 7, CHAPTER 1, ARTICLE 2, SECTIONS 1770, 1773, & 1773.1 CRAFT: RESIDENTIAL CARPENTER#
RESIDENTIAL DETERMINATION: R-23-31-1-2025-1B
Pursuant to the California Code of Regulations Section 16001(d), residential projects consist of single-family homes and apartments up to and including four stories. This residential determination applies only to the residential portion of the project meeting this definition.

Construction of any structures or ancillary facilities on the project that does not meet this definition requires the payment of the general commercial prevailing wage rates. The general commercial prevailing wage rates apply to all residential projects consisting of buildings of five or more stories. The residential prevailing wage rates apply to all residential projects consisting of buildings up to and including four stories.

ISSUE DATE: December 1, 2025
EXPIRATION DATE: June 30, 2026**
The rate to be paid for work performed after this date has been determined. If work will extend past this date, the new rate must be paid and should be incorporated in contracts entered into now. Contact the Office of the Director - Research Unit for specific rates at (415) 703-4774.

LOCALITY:

All localities within Napa and Sonoma Counties.

WAGE RATES:

Classifications Basic Straight-Time Hourly Rate
Residential Carpenter $61.13
Residential Hardwood Floorlayers $61.28
Residential Shinglers $61.28
Residential Power Saw Operators $61.28
Residential Steel Scaffold and Steel
Shoring Erectors $61.28
Residential Saw Filers $61.28
EMPLOYER PAYMENTS: (Labor Code Section 1773.1)
Employer Payments Amount
Health & Welfare $14.37 per hour worked
Pension $11.55 per hour worked
# Indicates an apprenticeable craft. To obtain current residential apprentice wage rates please email a request to [email protected] or send to the Office of the Director – Research Unit at P.O. Box 420603, San Francisco, CA 94142-0603.
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Residential Determination: R-23-31-1-2025-1B
Residential Carpenter

Employer Payments Amount
Vacation/Dues $6.08 per hour worked1
Training $1.31 per hour worked
Other $3.77 per hour worked2
PREDETERMINED INCREASE(S):

Effective on July 1, 2026, there will be an increase of $5.32 allocated to wages and/or fringes.

There are no further increases applicable to this determination.

STRAIGHT TIME HOURS:

Eight (8) consecutive hours per day, Monday through Friday, shall constitute a day’s work.

Saturday in the same workweek may be worked at a straight-time rate if a job is shut down during the normal workweek due to inclement weather.

OVERTIME:

One and one-half (1½x) the basic straight-time hourly rate will be paid for the first four (4) daily overtime hours and the first eight (8) hours worked on Saturday. Double (2x) the basic straighttime hourly rate will be paid for all hours worked in excess of the first four daily overtime hours and the first eight hours on Saturday and all hours worked on Sundays and Holidays. For the four designated off/holidays, one and one-half (1½x) the basic straight-time hourly rate will be paid for the first eight (8) hours worked.

RECOGNIZED HOLIDAYS:

New Year’s Day, Martin Luther King’s Day, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Day after Thanksgiving Day, and Christmas Day. If any of the holidays fall on Saturday, the preceding Friday shall be observed as the holiday. If any of the above holidays fall on Sunday, the Monday following shall be observed as the holiday.

The following days will be designated off/holidays:
2025: Friday, January 17th, Friday, May 23rd, Friday, August 29th, Friday, December 26th. 2026: Friday, January 2nd, Friday, February 13th, Friday, May 22nd, Friday, September 4th. 2027: Friday, January 15th, Friday, May 28th, Friday, September 3rd, Friday, November 12th.

TRAVEL AND SUBSISTENCE:

In accordance with Labor Code Sections 1773.1 and 1773.9, contractors shall make travel and/or subsistence payments to each worker to execute the work. Travel and/or subsistence requirements for each craft, classification, or type of worker may be obtained by contacting the Office of the Director – Research Unit at (415) 703-4774. 1 Includes an amount for work fees. 2 Includes an amount for Annuity Trust Fund, Industry Promotion Fund, Contract Work Preservation, Carpenter Employers Contract Administration, Carpenters International Training Fund, and Vacation/Holiday/Sick Leave Admin.
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120 E Cotati Affordable Housing Construction
Pre-Qualification Requirement
Recitals
The City of Cotati (“City”) adopts these pre-qualification requirements for contractors who perform, assign, award, or subcontract carpentry and carpentry related construction work at all tiers (“Covered Work”) on the 120 E Cotati Affordable Housing Construction project located on parcels APN nos. 144-274-002, -014 & -015 and any other APN included in this development in the City and County of Sonoma (“Project”) in order to select the lowest responsible bidder for the Project, ensure efficient procurement of construction services, protect the prudent use of taxpayer funds, and promote a skilled, healthy and reliable construction workforce ready and available to build the infrastructure and other public buildings necessary for a modern and prosperous future.

The pre-qualification requirements encourage competition among reputable contractors, promote a level playing field, improve transparency, and spend taxpayer funds efficiently and economically.

The pre-qualification requirements also enhance the good health of construction workers on the Project, therefore ensuring a pool of skilled labor is available to complete the Project.

The pre-qualification requirements ensure that the Project will be awarded to contractors that participate in high quality, industry-proven apprenticeship programs, and that apprentices working under such contracts are competently trained. This satisfies the City’s proprietary interest in safe and efficient construction and mitigates potential liability.

The pre-qualification requirements also develop a pool of reliable and skilled labor in the local area who can work on future public works projects, for which the City contracts on a regular basis.

Pre-Qualification Applicability
These pre-qualification requirements will apply to the Project whether the City retains title to the Project property or not and whether the City procures the construction for the Project or not. Should the City decide to allow a private developer to develop the Project pursuant to a sale, lease, joint venture, or other arrangement, the City will ensure that it explains these pre-qualification requirements to developer candidates in negotiations and will incorporate the requirements into the ultimate development agreement, Disposition and Development Agreement, and construction contracts as material terms of the agreements. 172 of 437
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Pre-Qualification Requirements
Prevailing Wage:

All construction workers employed by a contractor performing Covered Work in the execution of the Project shall be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.

Apprenticeship:

For every apprenticeable craft, each construction contractor who will employ carpenters on the Project shall participate in a Joint Apprenticeship Program Approved by the State of California, Division of Apprenticeship Standards OR in an apprenticeship program approved by the State of California Division of Apprenticeship Standards that has graduated an average of more than one resident of Sonoma County per year for the (5) years immediately preceding submission of the pre-qualification documents. A construction contractor without construction craft employees shall show a contractual obligation that all of its subcontractors performing Covered Work so comply. A construction contractor is deemed to comply with this apprenticeship requirement for its employees if it is signatory to a valid collective bargaining agreement that requires utilization of registered apprentices.

Any change in participation must be immediately provided to the City and any successor. Construction contractors shall maintain compliance with this provision until Project completion.

Health Care Expenditures:

Each contractor employing carpenters on the Project shall commit to making health care expenditures for each carpenter employee in an amount per hour worked on the Project equivalent to at least the hourly amount indicated for health and welfare payments in the applicable General Prevailing Wage Determination made by the Director of Industrial Relations. Contractors without construction craft employees shall show a contractual obligation that its subcontractors performing Covered Work so comply. “Health care expenditures” include contributions under Sections 501(c) or (d) or 401(a) of the Internal Revenue Service Code and payments toward “medical care” as defined under Section 213(d)(1) of the Internal Revenue Code. Any change in coverage must be immediately provided to the City and any successor. Construction contractors employing carpenters on the Project shall maintain compliance with this provision until Project completion.

Disputes:

If the City procures the construction of the Project, the City will resolve any claim over whether a contractor meets the prequalification requirements through the following process:
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3Cotati
1) The City will promptly notify a contractor it has deemed not prequalified. The City’s notice will include the reason(s) the contractor has been deemed not prequalified, along with any supporting evidence.
2) Within five (5) business days following the City’s notice, the contractor may elect to have a public hearing to review the City’s decision. Within this same five (5) business day period, the City will accept documentary evidence from the contractor and members of the public concerning whether the contractor meets or does not meet the prequalification requirement(s). 3) The City shall consider all documentary evidence regarding a contractor’s prequalification. The City shall announce its final determination of whether the contractor meets the prequalification requirement(s) and is thereby prequalified within five (5) business days after the hearing if a hearing is elected or of the last day to receive evidence if a hearing is not elected. 4) Documents concerning the City’s rejection of a contractor for failure to meet a prequalification requirement and any subsequent final determinations of a contractor’s prequalification status shall be public records.

Enforcement:

In addition to any other enforcement mechanism available at law or equity to the City or successor, any joint labor-management cooperation committee established pursuant to the Federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) has standing to enforce this section, including monetary contributions for medical coverage, through the provisions of Labor Code Sections 218.7 or 218.8.

Severability:

The provisions of this Ordinance are severable. If any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Ordinance is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Ordinance. The City or successor hereby declares that it would have adopted this Ordinance and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not declared invalid or unconstitutional without regard to whether any other portion of this Ordinance or application thereof would be subsequently declared invalid. In particular, the Apprenticeship and Local Hire provisions are distinct and severable from one another, and the Health Care Expenditures provisions are distinct and severable from the remaining provisions of this paragraph. If the provision concerning Health Care Expenditures is held invalid, the Apprenticeship and Local Hire requirements will stand alone and vice versa.
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: RANCHO ADOBE FIRE DISTRICT LEASE EXTENSION -

COTATI FIRE STATION
Date: January 27, 2026
Written by: Damien O'Bid, City Manager
Recommendation
It is recommended that the City Council adopt a resolution approving the Second Amended Lease Agreement between the City and the Rancho Adobe Fire District (RAFD) Background
The City of Cotati and RAFD are parties to an existing Lease Agreement governing the use of City-owned property at 1 East Cotati Avenue. The basic structure of the lease is that the City leases the underlying land to RAFD, who in turn owns, operates and maintains the fire station until the end of the lease term, at which time the fire station reverts to City ownership. The original lease was executed in 1965, with a term of 50 years (expiring in 2015). The lease agreement was subsequently amended in 1989, primarily to address planned improvements to the fire station structure, as well as extending the lease for an additional 50 years (expiring in 2039).

The proposed Second Amended Lease consolidates prior amendments, largely eliminates unnecessary requirements regarding internal improvements and incorporates additional negotiated revisions. Approval of the Second Amended Lease will supersede previous versions of the Lease and provide a single, restated document reflecting the current terms agreed upon by both parties.

Analysis/Discussion
The Second Amended Lease maintains the fundamental structure and intent of the existing agreement while incorporating clarifications and updates intended to improve clarity, align the Lease with current City practices, and reduce the potential for future interpretation disputes. 175 of 437
Summary of Significant Edits from the 1989 License Agreement • Clarifies provisions related to the lease term (extends by 50 years) and administrative timelines to ensure consistency and avoid conflicting interpretations. • Minor revisions clarify rent payment timing, invoicing, and administrative procedures, without materially changing the financial terms of the Lease. • Language was refined to more clearly allocate maintenance and repair responsibilities between the City and the Tenant, and to clarify standards for improvements and alterations.
• Insurance and indemnification provisions were updated to align with current City risk management standards and to clearly define coverage and compliance obligations. • Edits were made to permitted use and operational sections to improve clarity, remove duplicative language, and better reflect existing use of the property. The notable additions include providing exclusive use of 6 off-street parking spaces, and delineation on landscape maintenance responsibilities. However, the City, at its sole discretion, may revoke RAFD’s exclusive right to use the Parking Area upon thirty (30) days written notice to RAFD. The City will engage in good faith discussions with RAFD to identify a different mutually agreeable location for designated parking spaces. All landscape areas on or adjacent to the premises served by the building water meter shall be irrigated and maintained by RAFD. All landscape areas on or adjacent to the premises served by the park water meter(s) shall be irrigated and maintained by the City. • Additional changes include formatting updates, correction of cross-references, definedterm consistency, and removal of outdated or redundant provisions.

At the RAFD Board meeting on January 21, 2026, the RAFD Board approved the proposed lease, in the form attached, and authorized the Fire Chief to execute the agreement on behalf of the RAFD.

Financial Considerations
Approval of the Second Amended Lease is not expected to result in a material fiscal impact beyond what has already been contemplated under the existing Lease. The City will continue to lease the property to RAFD for $1 per year as a public benefit. All financial obligations and cost responsibilities remain consistent with current budget assumptions, and no additional appropriations are anticipated.

Environmental Issues
Where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA review.

This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.
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83886.00001\44330917.283886.00001\44330917.1

SECOND AMENDED & RESTATED LEASE

DOWNTOWN LA PLAZA PARK FIRE STATION
1 EAST COTATI AVENUE, COTATI
THIS LEASE is made on ______________________, by and between the CITY OF COTATI, a municipal corporation, hereinafter called “LESSOR”, and the COTATI RANCHO ADOBE FIRE PROTECTION DISTRICT, hereinafter called “LESSEE”.

RECITALS
WHEREAS, LESSOR and LESSEE are were parties to an existing initial lease which commenced on April 1, 1965, and was scheduled to terminates on March 31, 2015.

WHEREAS, prior to the expiration of the initial lease, LESSOR and LESSEE are parties to an existing leaseentered into an amended and restated lease, which commenced on August 22April 1, 1989, and terminates on March 31, 20152039.

WHEREAS, LESSEE desires to enter into a new lease agreement to extend the term of its leasehold rights to lease the subject premises. until March 31_________, 20__39.

WHEREAS, LESSEE desires to construct certain improvements and additions to the leased premises.

WHEREAS, LESSOR agrees to extend the lease term and to consent to certain improvements being installed on the premises by LESSEE.

NOW, THEREFORE, the parties agree as follows:

AGREEMENT
LESSOR leases to LESSEE and LESSEE hires from LESSOR the premises hereafter described under the following terms and conditions.

1. Premises.

The “premises” are described in Exhibit “A” attached hereto and incorporated by this reference.

2. Term of Lease.

The term of this Lease is fiftyfifty ________ (50__50) calendar years, beginning on January 31, 2026April _________ 1, ____1989, and ending at midnight on January 31, 2076March 31__________, ____2039, unless extended or sooner terminated as provided for in this Lease. 269 of 437
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2 3. Restated Lease.

This Lease supersedes that Lease entered into by and between the parties pertinent to the premises on August 22April 1, 19651989. This Lease restates and memorializes all of the terms and conditions under which LESSOR leases the premises to LESSEE.

4. Rent.

For each year of this Lease, LESSEE shall pay to the LESSOR, in advance on the first day of each year beginning on January 31, 2026April 1_______, ____1989, the amount of ONE DOLLAR ($1.00).

5. Use.

A. LESSEE shall use the premises for a fire station plus the storage of materials and equipment related to that activity and shall not use or permit the premises to be used for any other purpose without the prior written consent of LESSOR. LESSEE shall not do or permit anything to be done in or about the premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the premises or any of its contents, or cause cancellation of any insurance policy covering said premises or any part thereof or any of its contents. LESSEE shall not use or allow the premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall LESSEE cause, maintain or permit any nuisance in, on or about the premises. LESSEE shall not commit or suffer to be committed any waste in or upon the premises.

B. Except for oils and solvents used and stored in the normal operation and maintenance of Lessee’s LESSEE’S equipment and property, neither Lessee LESSEE nor, to the best of Lessee’s LESSEE’S knowledge (after due and diligent inquiry), any third party may use, generate, manufacture, produce, store or dispose of, on, under or about the premises or transport to or from the premises any flammable explosives, asbestos, radioactive materials, hazardous waste, toxic substances or related injurious materials, whether injurious by themselves or in combination with other materials (collectively called “hazardous materials”). For the purpose of this agreement, “hazardous materials” shall include, but not be limited to, substances defined as “hazardous substances”, “hazardous materials” or “toxic substances” in federal and/or state law.

C. LESSEE shall have the exclusive right to use six (6) designated parking spaces within the parking area serving the premises, in locations mutually agreed upon by LESSOR and LESSEE, and further identified in Exhibit B (“Parking Area”). LESSOR shall not reassign or materially interfere with LESSEE’s use of such spaces without LESSEE’s prior written consent, except temporarily as necessary for emergency repairs, maintenance, or public safety, and in such case LESSOR shall use reasonable efforts to minimize disruption. LESSEE may, at its sole cost and expense, install appropriate markings or signage, subject to LESSOR’Ss prior written approval, which shall not be unreasonably withheld, to identify the reserved spaces. LESSOR at its sole discretion may revoke LESSEE’S exclusive right to use the Parking Area upon thirty (30) days written notice to LESSEE. LESSOR will engage in good faith discussions with LESSEE to identify a different mutually agreeable location for a different location for designated parking spaces.
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3 C. All landscape areas on or adjacent to the premises served by the building water meter shall be irrigated and maintained by LESSEE. All landscape areas on or adjacent to the premises served by the park water meter(s) shall be irrigated and maintained by the LESSOR.

6. Compliance with Law.

LESSEE shall not use the premises or permit anything to be done in or about the premises which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. LESSEE shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force, and with the requirements of any board of fire insurance underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the condition, use or occupancy of the premises, including structural changes not related to or affected by LESSEE’S improvements or acts. The judgment of any court of competent jurisdiction or the admission of LESSEE in any action against LESSEE, whether LESSOR be a party thereto or not, that LESSEE has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between the LESSOR and LESSEE.

7. Alterations and AdditionsNot Used.

LESSEE shall not make or suffer to be made any alterations, additions or improvements to or of the premises or any part thereof without the written consent of LESSOR first had and obtained and any alterations, additions or improvements to or of said premises shall on the expiration of the term become a part of the realty and belong to the LESSOR and shall be surrendered with the premises. In the event LESSOR consents to the making of any alterations, additions or improvements to the premises by LESSEE, the same shall be made by LESSEE at LESSEE’S sole cost and expense, and any contractor or person selected by LESSEE to make the same must first be approved of in writing by the LESSOR. Upon the expiration or sooner termination of the term hereof, LESSEE shall, upon written demand by LESSOR, given at least thirty (30) days prior to the end of the term, at LESSEE’S sole cost and expense, forthwith and with all due diligence remove any non-permanent, obsolete, or superseded alterations, additions, or improvements made by LESSEE, designated by LESSOR to be removed, and LESSEE shall, forthwith and with all due diligence at its sole cost and expense, repair any damage to the premises caused by such removal.

LESSOR shall not require removal of improvements that were approved by LESSOR and remain in good and serviceable condition at the time of termination, unless such removal is reasonably necessary for the future use of the premises as determined by LESSOR. If LESSOR requires removal of any such approved and serviceable improvements, the parties shall meet and confer in good faith regarding cost-sharing or reimbursement of LESSEE’sS reasonable removal costs.

8. Other Rights Reserved.

All oil, gas, and mineral rights are expressly reserved from this Lease.

9. Improvements, Alterations and Additions.

A. At any time, from time to time, during the term of the Lease, LESSEE may, but is not obligated to, construct or otherwise make new improvements on any part or all of the 271 of 437
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4 premises and to demolish, remove, replace, alter, relocate, reconstruct or add to any existing improvements in whole or in part, and to modify or change the contour of or grade, or both, of the land, provided LESSEE is not then in default under any condition or provision of this Lease and provided the improvements following the work are at least equal in value to any improvements as they were before being demolished, removed, replaced, altered, relocated, reconstructed, modified or changedof a nature and quality reasonably acceptable to LESSOR pursuant to the approval process set forth in this Paragraph 9(C). All salvage shall belong to LESSEE.

A. LESSEE shall not make or suffer to be made any alterations, additions or improvements to the exterior, or that are visible from the exterior of the premises without the prior written consent of LESSOR, regardless of other permitting requirements or regulations. Consent of LESSOR shall be given or denied in writing within thirty (30) days after receipt from LESSEE of all materials requested by LESSOR to evaluate the proposed alterations, additions or improvements. Any alterations, additions or improvements to or of said premises shall on the expiration of the term become a part of the realty and belong to the LESSOR and shall be surrendered with the premises. In the event LESSOR consents to the making of any alterations, additions or improvements to the premises by LESSEE, the same shall be made by LESSEE at LESSEE’S sole cost and expense, and any contractor or person selected by LESSEE to make the same must first be approved of in writing by the LESSOR. Upon the expiration or sooner termination of the term hereof, LESSEE shall, upon written demand by LESSOR, given at least thirty (30) days prior to the end of the term, at LESSEE’S sole cost and expense, forthwith and with all due diligence remove any non-permanent, obsolete, or superseded alterations, additions, or improvements made by LESSEE, designated by LESSOR to be removed, and LESSEE shall, forthwith and with all due diligence at its sole cost and expense, repair any damage to the premises caused by such removal. LESSOR shall not require removal of improvements that were approved by LESSOR and remain in good and serviceable condition at the time of termination, unless such removal is reasonably necessary for the future use of the premises as determined by LESSOR. If LESSOR requires removal of any such approved and serviceable improvements, the parties shall meet and confer in good faith regarding cost-sharing or reimbursement of LESSEE’S reasonable removal costs.

B. All work shall be performed in a good and workmanlike manner, shall substantially comply with plans and specifications submitted to LESSOR as required by this Lease, and shall comply with all applicable City and other governmental permits, laws, ordinances and regulations. Upon completion, said addition shall become part of the premises and be subject to this Lease. In the event of a dispute, improvements shall be completed to the City’s sole satisfaction.

C. Conditions of Major Construction. Before any major work of construction, addition or alteration, or repair (as defined in Paragraph 9(N)) is commenced on the premises, and before any building materials have been delivered to the premises by LESSEE or under LESSEE’S authority, LESSEE shall comply with all the following conditions or procure LESSOR’S written waiver of the condition or conditions specified in the waiver:
(1) Deliver to LESSOR for LESSOR’S approval two (2) sets of preliminary construction plans and specifications prepared by an architect or engineer licensed to practice as such in the 272 of 437
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5 State of California, all sufficient to enable potential contractors and subcontractors to make reasonably accurate bid estimates and to enable LESSOR to make an informed
judgment about the design and quality of construction and about any effect on the reversion. All improvements shall be constructed within the exterior property lines of the premises; provided that required work beyond the premises on utilities, access, and conditional use requirements do not violate this provisionwould be permitted separately.
(1) With the plans, LESSEE shall deliver to LESSOR the
certificate of the person or persons who prepared the plans and specifications certifying that LESSEE has fully paid for them or waiving payment and waiving any right to a lien for preparing them.
(2) LESSOR shall not unreasonably disapprove preliminary plans and specifications. Approval or disapproval shall be communicated in the manner provided for notices, and
disapproval shall be accompanied by specification of the grounds for disapproval. LESSEE shall not deliver working drawings to any governmental body for a building permit until preliminary plans are approved as in this paragraph.

Following LESSOR’S first or any subsequent disapproval, LESSEE may elect (1) to submit revised plans and
specifications or (2) to give notice contesting the
reasonableness of LESSOR’S disapproval. A contest of
reasonableness shall be resolved by the parties, acting in good faith, within twenty (20) days of the date LESSEE
mails or serves notice of his contest of reasonableness.

Disapproval and election to submit revised plans and
specifications shall reasonably not extend time for
completing construction, to the extent they delay is caused by LESSOR’s review.
(3) Deliver to LESSOR the written approval of the plans and specifications by the financial institution that shall have made the commitment for financing the construction, if any. (4) LESSEE shall prepare final working plans and specifications substantially conforming to preliminary plans previously approved by LESSOR, and deliver to LESSOR one
complete set as approved by the LESSOR. Changes from
the preliminary plans shall be considered to be within the scope of the preliminary plans if they are not substantial or if they are made to comply with suggestions, requests, or requirements of the LESSOR or official in connection with 273 of 437
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6 the application for permit or approval, and if they do not depart substantially in size, utility, or value from the minimum requirements of the work required to construct the improvements.
(5) Notify LESSOR of LESSEE’S intention to commence a
work of improvement at least ten (10) days before
commencement of any such work or delivery of any
materials. The notice shall specify the approximate location and nature of the intended improvements. LESSOR shall
have the right to post and maintain on the premises any notices of non-responsibility provided for under applicable law, and to inspect the premises in relation to the
construction at all reasonable times.
(6) Furnish LESSOR with a true copy of LESSEE’S contract with the general contractor and with evidence of the general contractor’s financial condition for LESSOR’S approval.

The contract shall give LESSOR the right but not the
obligation to assume LESSEE’S obligations and rights under that contract if LESSEE should default.

LESSOR may disapprove of the contractor and/or the
contract by notice given within ten (10) days following delivery of the copy of the contract. The notice shall specify the grounds for disapproval. LESSOR shall not
unreasonably disapprove and shall be considered to have approved in the absence of notice of disapproval given
within ten (10) days after LESSEE furnishes the contract and evidence specified above. If LESSEE elects to act as general contractor, the reference above to contractor and evidence shall be considered to apply to the subcontractor of each subcontract in excess of THREE THOUSAND FIVE
HUNDRED DOLLARS ($3,500.00).
(7) Deliver to LESSOR true copies of all documents to evidence the commitment of financing for any new construction.
“Financing” includes both the construction (or interim) financing and the take- out (also called permanent or longterm) loan. LESSOR may require by notice that no construction commence until the take-out financing is firmly committed but may disapprove the financing only if it
violates an express provision of this Lease.
(8) LESSOR shall have the right but not the obligation to assume LESSEE’S financing for any improvements on the
premises. LESSEE shall cause the lender to execute all
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7 documentation facilitative of this right. LESSOR’S exercise of this right shall not constitute a waiver of any other right LESSOR may have against LESSEE, any surety or
guarantor, or anyone else.
(2) Furnish LESSOR payment and performance bonds as
described below after LESSEE
(3) Liability, Workers Compensation, Automotive Insurance.

All contractors providing services or performing any type of construction or repair shall maintain, at a minimum,
insurance at the policy limits typically maintained by the LESSOR for similar work performed for the LESSOR. The
policy limits, additionally insured and form of insurance shall be provided by LESSOR, as may be updated from time to time.
(9)(4) Payment & Material Bonds. Any construction, addition or alteration work in excess of $100,000 shall include payment and material bonds. has complied with all the foregoing conditions of major construction. The bonds shall be that of a responsible surety company, licensed to do business in California, in an amount not less than 100% of the estimated cost of the improvement and shall remain in effect until the entire cost of the work shall have been paid in full and the new improvements shall have been insured as provided in this Lease. The bonds shall be in the form attached hereto as Exhibit “C”.
(10) LESSEE shall keep LESSOR reasonably informed
regarding the method of disbursing any construction-loan funds during the period of construction and shall provide copies of any related documentation upon request. LESSOR shall have no approval rights or other control over the disbursement of such loan funds. LESSOR shall have the
right to approve of the method of disbursing the construction loan funds during the period of construction, if applicable. (5) Builders Risk Insurance. For any work in excess of
$100,000, Ddeliver to LESSOR (1) certificates of insurance evidencing coverage for “builder’s risk,” to protect LESSOR and LESSEE from financial losses due to physical damage or theft to a building during construction or renovation, covering the structure, materials, and equipment from perils like fire, storms, vandalism, and theft until completion. The coverage limits shall be approved by the LESSOR in writing. 275 of 437
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8 (11) (2) evidence of worker’s compensation insurance
covering all persons employed in connection with the work and with respect to whom death or bodily injury claims could be asserted against LESSOR or the premises, and (3)
evidence that LESSEE has paid or caused to be paid all
premiums for the coverage described above in this paragraph and any increase in premiums on insurance provided for in Paragraph 14, sufficient to assure maintenance of all
insurance above during the anticipated course of the work.

LESSEE shall maintain, keep in force, and pay all premiums required to maintain and keep in force all insurance above at all times during which such work is in progress.
(6) The provision to the cityLESSOR of all necessary permits from all governmental agencies having jurisdiction over the work of improvement.
(12) All approvals or consents required of LESSOR under this Paragraph 9(C) shall be given or denied in writing within thirty (30) days after receipt of the complete submission from LESSEE. Any disapproval shall specify the grounds
therefor in reasonable detail. Failure of LESSOR to respond within such period shall be deemed approval of the matter submitted. LESSOR’s review shall be limited to
confirmation that the proposed work is consistent with this Lease and applicable laws and shall not unreasonably delay LESSEE’Ss construction activities.

D. Not Used. Plans Already Approved. The Parties acknowledge that LESSEE has already submitted to the LESSOR certain elevations and other preliminary site plans dated January 11, 1989 and prepared by Avila Enterprises consisting of 7 number of sheets. Those plans, which are maintained by the LESSOR’s director of planning, have already been approved by LESSOR. Such approval, however, does not relieve LESSEE of the responsibility of complying with paragraph 9(C).

E. Conditions of Premises. LESSOR makes no covenants or warranties respecting the condition of the soil, subsoil, the improvements thereon or any other condition of the premises. LESSEE may enter onto the premises to make structural engineering tests that LESSEE considers necessary. All such tests made by or on behalf of LESSEE shall be at LESSEE’S sole expense and shall be evidenced by a separate contract. A copy of any such report shall be delivered to LESSOR on commencement of the term.

F. Financing. If the LESSEE intends to utilize any type of financing that would utilize the improvements constructed by LESSEE as security, the LESSEE must provide copies of all final documents to the LESSOR. In no case shall the LESSEE obtain any type of financing with a repayment term that extends beyond the term of this Lease or uses the underlying LESSOR’s property or improvements not constructed by LESSEE as security. LESSEE’Ss Right to Grant 276 of 437
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9 easements. LESSOR grants to LESSEE the right to grant to public entities or public service corporations, for the purpose of serving only the premises, rights of way or easements on or over the premises for poles or conduits or both for telephone, electricity, water, sanitary or storm sewers or both, and for other utilities and municipal or special district services. Grants made under the authority of this provisions shall be limited to the period of time required to complete construction.

G. Protection of LESSOR Against Cost or Claim. LESSEE shall pay or cause to be paid the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics’ Lien Law in effect at the place of construction when the work begins. No such payment shall be construed as rent. LESSEE shall not suffer or permit to be enforced against the premises or any part of it any mechanic’s, materialman’s, contractor’s, or subcontractor’s lien arising from any work of improvement, however it may arise. However, LESSEE may in good faith and at LESSEE’S own expense contest the validity of any such asserted lien, claim, or demand, provided LESSEE has furnished the bond required in California Civil Code Section 3143 (or any comparable statute hereafter enacted for providing a bond freeing the premises from the effect of a lien claim).

LESSEE shall defend and indemnify LESSOR against all liability and loss of any type arising out of work performed on the premises by LESSEE, together with reasonable attorney’s fees and all costs and expenses incurred by LESSOR in negotiating, settling, defending, or otherwise protecting against such claims.

LESSEE shall reimburse LESSOR for all sums paid by LESSOR under this paragraph, together with all LESSOR’s reasonable attorney’s fees and costs, plus interest on those sums, fees, and costs at the rate of twelve percent (12%) per year from the date of payment until the date of reimbursement.

H. Notice of Completion. On completion of any substantial work of improvement during the term, LESSEE shall file or cause to be filed a notice of completion.

LESSEE hereby appoints LESSOR as LESSEE’S attorney-in-fact to file the notice of completion on LESSEE’S failure to do so after the work of improvement has been substantially completed.

I. Notice of Change in PlansRecord Documents. On completion of any work of improvement, LESSEE shall give LESSOR one (1) hard copy of the “as-built” drawings and one (1) digital copy of the “as-built” drawings, specifications and complete project file within 90 calendar days of the completion of the work. The drawings shall be on archival mylar, 24” x 36” (unless waived or otherwise agreed to by LESSOR) and the project file shall be pdf or other digital file type acceptable to the LESSOR. notice of all changes in plans or specifications made during the course of the work. LESSOR acknowledges that it is common practice in the construction industry to make numerous changes during the course of construction on substantial projects.

Changes that do not substantially alter plans and specifications previously approved by LESSOR do not constitute a breach of LESSEE’S obligations, but LESSEE shall inform LESSOR of any changes and LESSOR may determine whether the changes substantially alter plans and specifications previously approved. Approval of such changes shall not be unreasonably withheld.

J. Notice of Take-Out (Permanent) Financing. LESSEE shall promptly deliver to LESSOR:
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10 (1) Evidence that the supplier of any construction financing has accepted or approved of the completed improvements; and (2) Evidence that the take-out (permanent) financing has been recorded and the funds properly disbursed, together with copies of the note and the encumbrance securing it.

K. Ownership of New Improvements During Term. All improvements constructed on the premises by LESSEE as permitted by this Paragraph 9 shall be owned by LESSEE until the termination of this Lease. LESSEE shall not, however, remove any improvements from the premises nor waste, destroy, or modify any improvements on the premises, except as permitted by this Lease.

L. Ownership at Termination. All improvements constructed on the premises by LESSEE as permitted by Paragraph 9, at the end of this Lease, or upon sooner termination of this Lease shall, without compensation to LESSEE, then become LESSOR’S property free and clear of all claims to or against them by LESSEE or any third person, and LESSEE shall defend and indemnify LESSOR against all liability and loss arising from such claims or from LESSOR’S exercise of the rights conferred by this paragraph.

M. Diligent Prosecution to Completion. Once the work has begun, LESSEE shall with reasonable diligence prosecute to completion all construction of improvements, additions, or alterations. All work shall be performed in a good and workperson-like manner, shall substantially comply with plans and specifications submitted to LESSOR as required by this Lease, and shall comply with all applicable governmental permits, laws, ordinances and regulations.

N. Major and Minor Repairs Distinguished. LESSOR’s approval is not required for LESSEE’Ss minor repairs, alterations, or additions. “Minor” means construction costs not exceeding THREE THOUSAND DOLLARS ($3,000.00), none of which is derived from funds advanced on the security of an encumbrance on the leasehold or the property. “Construction costs” includes the cost of labor, materials, and reasonable profit to general contractor and subcontractors, engineering and design costs, testing costs and all costs that would constitute the basis of a valid claim under the mechanic’s lien laws for any demolition and any removal of existing improvements or parts of improvements as well as for preparation, construction, and completion of all new improvements or parts of improvements. The dollar amount stated above shall be adjusted by the percentage change in the index known as the United States Department of Commerce Composite Construction Cost Index as published in the survey of current business by the U.S. Department of Commerce, or successor index. If the index is discontinued and there is no successor index, the reference figure shall be determined by LESSOR. “Major” repairs, alterations, or additions are those not defined as “minor” above. For major repairs, alterations or additions, LESSEE shall comply with all conditions of major construction elsewhere described in this Lease.Not used.

10. Repairs.

A. By taking possession of the premises, LESSEE shall be deemed to have accepted the premises as being in good sanitary order, condition and repair. LESSEE shall, at 278 of 437
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11 LESSEE’S sole cost and expense, keep the premises and every part thereof in good condition and repair, damage thereto from causes beyond the reasonable control of LESSEE and ordinary wear and tear excepted. LESSEE shall upon the expiration or sooner termination of this Lease hereof surrender the premises to the LESSOR in good condition, ordinary wear and tear and damage from causes beyond the reasonable control of LESSEE excepted. LESSOR shall have no obligation whatsoever to alter, remodel, improve, repair, decorate or paint the premises or any part thereof, and the parties hereto affirm that LESSOR has made no representations to LESSEE respecting the condition of the premises or any part thereof and the parties hereto affirm that LESSOR has made no representations to LESSEE respecting the condition of the premises or any improvements located thereon.

B. LESSEE waives the right to make repairs at LESSOR’S expense under any law, statute or ordinance now or hereafter in effect.

C. All parts, equipment, garbage, refuse and other debris either used or discarded as part of LESSEE’S business on the premises shall always be stored or discarded in such a manner so as not to be visible by persons located on any property other than on the premises.

C.D. LESSEE shall obtain any necessary permits or approvals required prior to performing the work. Repairs shall be subject to the same workmanship standard, insurance and bonding requirements described in Paragraph 9.

11. Financing Without Fee Subordination.

A. LESSEE shall have the right at any time and from time to time to subject the leasehold estate and any or all improvements to one or more mortgages as security for a loan or loans or other obligation of LESSEE provided that:
(1) The mortgage and all right required under it shall be subject to each and all of the covenants, conditions, and restrictions stated in this Lease and to all rights and interest of LESSOR except as otherwise provided in this Lease.
(2) LESSEE shall give LESSOR thirty (30) days prior notice of any such mortgage, and shall accompany the notice with a true copy of the note and mortgage.
(3) The repayment term of the mortgage shall not extend beyond the term of this Lease.
(2)
B. The mortgage documents shall provide that any proceeds from fire or extended coverage insurance shall be used for repairs or rebuilding of the leasehold improvements and not to repay part of the outstanding mortgage.

C. The mortgage documents shall contain provisions that all notices of default under the note and mortgage must be sent to LESSOR and LESSEE and that LESSOR shall have 279 of 437
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12 the right to cure any default if LESSEE fails to do so. LESSOR shall have sixty (60) days in which to cure any default if the time for LESSEE to cure it has expired. Neither LESSOR’S right to cure any default nor any exercise of such a right shall constitute an assumption of liability under the note or mortgage. If any default is not curable, it shall not be grounds for foreclosure of the mortgage if LESSOR, or LESSEE in possession of the premises, promptly performs all other provisions of the note and mortgage then required to be performed.

D. On the recording of the mortgage, LESSEE shall, at expense, cause to be recorded in the office of the county of the county where the premises are located a written request executed and acknowledged by LESSOR for a copy of all notices of default and all notices of sale under the mortgage as provided by the State of California. Inclusion in the body of the recorded mortgage itself of a request for notice having the effect described above shall constitute compliance with this provision.

E. The leasehold mortgagee (lender) shall not be liable to perform LESSEE’Ss obligations under this Lease until the mortgagee acquires LESSEE’Ss rights by foreclosure. After acquiring LESSEE’S rights by foreclosure, mortgagee shall be liable to perform LESSEE’S obligations only until mortgagee assigns or transfers the leasehold as permitted by this Lease.

Mortgagee shall not, however, be required to cure LESSEE’Ss defaults occurring before mortgagee’s acquisition of LESSEE’Ss rights by foreclosure.

F. No permitted mortgage shall cover any interest in any real property other than interests specifically subjected to mortgage by this Lease. No mortgage permitted by this Lease shall cover more than one (1) indebtedness.

G. On termination of this Lease by LESSOR on LESSEE’S default, or on mortgagee’s acquisition of the leasehold by foreclosure, LESSOR shall enter into a new lease with mortgagee covering the premises covered by the terminated or foreclosed lease if mortgagee (1) gives notice of request within thirty (30) days after termination or foreclosure, (2) pays all costs resulting from default and termination, and (3) remedies all defaults construed as though the Lease had not been terminated. The new lease shall be for the remainder of the term of the terminated or foreclosed lease, effective at the date of termination or foreclosure, at the rent and on the covenants, agreements, conditions, provisions, restrictions, and limitations contained in the terminated or foreclosed Lease.

12. Assignment and Subletting.

A. Except as expressly permitted pursuant to this Paragraph 12. LESSEE shall not, without the prior written consent of the LESSOR, assign or hypothecate this Lease or any interest herein or sublet the premises or any part thereof, or permit the use of the premises by any party other than LESSEE. Any of the foregoing acts without such consent shall be void and shall, at the option of LESSOR, terminate this Lease. This Lease shall not, nor any interest herein, be assignable as to the interest of LESSEE by operation of law without the written consent of LESSOR, such consent not to be unreasonably withheld; provided, however, that no such consent shall be required for any assignment or transfer of LESSEE’Ss interest to a successor public agency that assumes LESSEE’Ss powers and responsibilities pursuant to proceedings of the Sonoma County Local Agency Formation Commission (LAFCo) or other lawful governmental 280 of 437
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13 reorganization. In such event, the successor public agency shall automatically succeed to all rights and obligations of LESSEE under this Lease..

B. If at any time or from time to time during the term of this Lease LESSEE desires to sublet all or any part of the premises, LESSEE shall give notice to LESSOR setting forth the terms of the proposed subletting and the space so proposed to be sublet. In the event LESSOR consents to such proposed subletting, such consent shall be subject to the following conditions:
(1) the sublease shall be on the same terms set forth in the notice given to LESSOR; (2) no sublease of the premises shall be subleased until an executed counterpart of such sublease has been delivered to LESSOR; (3) no sublessee shall have the right to assign its sublease or further to sublet without the prior written consent of LESSOR; and (4) any sums or other economic consideration received by LESSEE as a result of such subletting, whether denominated rentals under the sublease or otherwise, which exceed, in the aggregate, the total sums which LESSEE is obligated to pay LESSOR under this Lease (prorated to reflect obligations allocable to that portion of the premises subject to such sublease) shall be payable to LESSOR as additional rental under this Lease without affecting or reducing any other obligations of LESSEE hereunder.

C. Regardless of LESSOR’S consent, no subletting or assignment shall release LESSEE of LESSEE’S obligations or alter the primary liability of LESSEE to pay the rental and to perform all other obligations to be performed by LESSEE hereunder. The acceptance of rental by LESSOR from any other person shall not be deemed to be a waiver by LESSOR of any provision hereof. Consent to one assignment or subletting shall not be deemed to be consent to any subsequent assignment or subletting. In the event of default by any assignee of LESSEE or any successor of LESSEE in the performance of any of the terms hereof, LESSOR may proceed directly against LESSEE without the necessity of exhausting remedies against such assignee or successor. LESSOR may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignee of LESSEE, provided, however, that LESSOR shall not amend or modify this Lease with any assignee in a manner that increases or materially alters the obligations or liabilities of the original LESSEE without first providing written notice to, and obtaining the written consent of, the original LESSEE. without notifying LESSEE, or any successor of LESSEE, and without obtaining his consent thereto and such actions Any consent by LESSOR under this Section shall not relieve LESSEE of liability under this Lease., for obligations accruing prior to such assignment.

D. In the event LESSEE shall assign or sublet the premises or request the consent of LESSOR for any act that LESSEE proposes to do, then LESSEE shall pay LESSOR’S reasonable attorneys’ fees incurred in connection therewith.

E. The following are conditions precedent to LESSEE’Ss right of assignment:
(A) LESSEE shall give LESSOR reasonable notice of the proposed assignment with appropriate documentation as evidence that the proposed assignee qualifies as a permitted assignee.
(B) Except as otherwise provided in this Lease for a permitted mortgagee, the proposed assignee shall, in recordable form, expressly assume all of the covenants and conditions of this Lease.
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14 (C) LESSEE shall pay LESSOR the sum of THREE HUNDRED FIFTY DOLLARS ($350.00)a lump sum, determined by LESSOR, to enable LESSOR adequately to investigate the proposed assignee’s qualifications as a permitted assignee. LESSOR shall not be required to account for the use of the sum paid.

13. Hold Harmless.

A. LESSEE, shall indemnify and hold harmless LESSOR against and from any and all claims arising from LESSEE’S use of the premises for the conduct of its business or from any activity, work, or other thing done, permitted or suffered by the LESSEE in or about the premises, and shall further indemnify and hold harmless LESSOR against and from any and all claims arising from any breach or default in the performance of any obligation on LESSEE’S part to be performed under the terms of this Lease, or arising from any act or negligence of the LESSEE, or any officer, agent, employee, guest, or invitee of LESSEE, and from all and against all costs, attorney’s fees, expenses and liabilities incurred in or about any such claim or any action or proceeding brought thereon, and, in any case, any action or proceeding brought against LESSOR by reason of any such claim, LESSEE upon notice from LESSOR shall defend the same at LESSEE’S expense by counsel reasonably satisfactory to LESSOR. LESSEE, as a material part of the consideration to LESSOR, hereby assumes all risk of damage to property or injury to persons, in, upon or about the premises, from any cause other than LESSOR’S sole negligence, and LESSEE hereby waives all claims in respect thereof against LESSOR.

B. LESSOR or its agents shall not be liable for any damage to property entrusted to LESSEE’S employees, nor for loss or damage to any property by theft or otherwise, nor for any injury to or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the buildings, the dock, the wharf, or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the sole negligence of LESSOR, its agents, servants or employees. LESSOR or its agents shall not be liable for interference with the light or other incorporeal hereditaments, loss of business by LESSEE, nor shall LESSOR be liable for any latent defect in the premises or in the building. LESSEE shall give prompt notice to LESSOR in case of fire or accidents in the premises or in the building or of defects therein or in the fixtures or equipment.

14. Insurance.

A. LESSEE agrees to and shall at its own cost and expense procure and maintain during the entire lease term and any extension thereof comprehensive public liability and property insurance covering the leased premises (Exhibit A) and their surrounding areas in a an amount of THREE MILLION DOLLARS ($3,000,000.00) combined single limit at a minimum amount carried by LESSOR at similarly situated facilities and with such company or companies with the same or better rating asas shall be agreeable toapproved by LESSOR’s insurance.

LESSEE shall have the covered premises appraised from time to time to ensure proper property valuation for insurance coverage. Such public liability insurance shall (1) be procured from an insurer authorized to do business in California and approved by LESSOR; (2) provide primary and not excessive coverage; (3) name LESSOR as an additional insured; (4) waive subrogation rights, if any, which the insurer may have against LESSOR by reason of any claim, liability, loss, or 282 of 437
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15 expense as described in Paragraph 13 of this Lease; (5) require that LESSOR be given at least thirty (30) days’ written notice before any such insurance can be cancelled or changed with respect to parties, coverage, or limits of liability; and (6) include cross-liability provisions. LESSEE shall, prior to commencement of the Lease term, deliver to LESSOR a certificate of insurance in the form attached as Exhibit “DC”, as may be updated from time to time, together with the schedule of insurance coverages in effect, as well as satisfactory evidence that the premiums have been paid, and before each expiration of any such insurance coverage during the Lease term and any extension thereof shall deliver to LESSOR satisfactory evidence that such insurance has been renewed and that the required premium or premiums therefor have been paid. (1) Throughout the term, at LESSEE’S sole cost and expense, LESSEE shall keep or cause to be kept insured for the
mutual benefit of LESSOR and LESSEE, on the
improvements against loss or damage by fire and such other risks as are now or hereafter included in an extended
coverage endorsement in common use for residential
structures, including vandalism and malicious mischief. The amount of the insurance shall be sufficient to prevent either LESSOR or LESSEE from becoming a coinsurer under the
provisions of the policies, but in no event shall the amount be less than ninety percent (90%) of the then actual
replacement cost of said improvement, (herein called FULL INSURABLE VALUE). LESSOR shall not carry any
insurance the effect of which would be to reduce the
protection or payment to LESSEE under any insurance that this Lease obligates LESSEE to carry. If any dispute
whether the amount of insurance complies with the above cannot be resolved by agreement, LESSOR may, not more
often than once every six (6) months, request the carrier of the insurance then in force to determine the full insurable value as defined in this provision, and the resulting
determination shall be conclusive between the parties for the purpose of this paragraph.
(2) All the proceeds from the insurance prescribed by this Paragraph 14 shall be deposited with a mutually agreed upon escrow holder to be applied by the escrow holder for the repair, restoration, or reconstruction of any improvements damaged or destroyed by the casualty giving rise to the insurance claim. Said proceeds shall be disbursed by the escrow holder in the same manner as if the proceeds were a construction loan from an institutional lender to LESSEE made under the provisions of this Lease. LESSEE shall pay all escrow fees and charges.
(2)(3) Notwithstanding anything to the contrary in this Lease, insurance proceeds shall be applied to repair, restoration, or 283 of 437
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16 reconstruction of the improvements unless LESSOR and LESSEE mutually agree in writing to an alternative
disposition. If the parties agree not to restore, any remaining proceeds shall be used to restore and improve the former premises for park or other community uses. Any remaining proceeds shall be remitted to LESSEE by LESSOR.
equitably distributed between the parties based on their respective interests in the damaged improvements.
(3) In the event LESSOR is given the authority hereunder to elect not to restore, reconstruct or repair the damage done to said improvements and LESSOR exercises said election, the proceeds of said insurance shall be paid to LESSOR.
(4) Any insurance proceeds remaining after reconstructing, repairing and/or restoring said improvement shall be the LESSEE’S sole property.

B. If either party at any time during the term hereof should fail to secure or maintain the foregoing insurance, the other party shall be permitted to obtain such insurance in the defaulting party’s name or as the agent of the defaulting party and shall be compensated by the defaulting party for the cost of the insurance premiums. The defaulting party shall pay the other interest on paid insurance premiums at the rate of twelve percent (12%) per annum computed from the date written notice is received that the premiums have been paid.

C. Not UsedBefore commencement of any demolition or construction, LESSEE shall procure, and shall maintain in force until completion and acceptance of the work, “all risks” builders’ risk insurance including vandalism and malicious mischief, in form and with a company reasonably acceptable to LESSOR, covering improvements in place and all material and equipment at the job site furnished under contract, but excluding contractor’s, subcontractors’ and construction manager’s tools and equipment and property owned by contractor’s or subcontractor’s employees, with limits of at least ONE MILLION DOLLARS ($1,000,000.00) per loss for all work at the job site.

15. Subrogation.

As long as their respective insurers so permit, LESSOR and LESSEE hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties.

Each party shall obtain any special endorsements, if required by their insurer, to evidence compliance with the aforementioned waiver.

16. Services and Utilities.

At LESSEE’S sole cost, LESSEE shall provide electricity, heating, water and telephone service to the premises. LESSOR shall not be liable for, and LESSEE shall not be entitled to any reduction of rental by reason of, any failure to furnish any of the foregoing. 284 of 437
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17 17. Property Taxes.

LESSEE shall pay, or cause to be paid, to LESSOR, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all of LESSEE’S leasehold improvements described in Paragraphs 1 and 9. LESSEE shall pay, or cause to be paid, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all of LESSEE’S personal property, equipment, furniture and fixtures located on the premises.

18. Estoppel Certificate.

At any time and from time to time but on not less than ten (10) days prior written request by LESSOR, LESSEE shall execute, acknowledge and deliver to LESSOR, promptly upon request, a certificate certifying (a) that this Lease is unmodified, and in full force and effect; (or if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification), (b) the date, if any, to which rental and other sums payable hereunder have been paid, (c) that no notice has been received by LESSEE of any default which has not been cured, except as to defaults specified in said certificate and (d) such other matters as may be reasonably requested by LESSOR. Any such certificate may be relied upon by any prospective purchaser, mortgagee or beneficiary under any deed of trust of the building or any part thereof.

19. Holding Over.

If LESSEE remains in possession of the premises or any part thereof after the expiration of the term hereof, with the express written consent of LESSOR, such occupancy shall be a tenancy from month-to-month at a rental in an amount determined by LESSOR in its sole discretion, plus all other charges, payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy.

20. Entry by LESSOR.

LESSOR reserves and shall at any and all reasonable timesduring all normal business hours have the right to enter the premises, upon reasonable prior notice to LESSEE (except in cases of emergency), to inspect the same, to submit said premises to prospective purchasers or tenants, to post notices of non-responsibility, and to alter, improve or repair the premises and any portion of the premises that LESSOR may deem necessary or desirable, without abatement of rent and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the premises shall not be blocked thereby, and further providing that the business operations of the LESSEE shall not be interfered with unreasonably. LESSEE hereby waives shall not be deemed to have waived, and expressly retains, hereby waives any claim for damages or for any injury or inconvenience to or interference with LESSEE’S businessbusiness, any loss of occupancy or quiet enjoyment of the premises, and any loss occasioned thereby arising from the negligence or willful misconduct of LESSOR, its officers, employees, or agents in connection with such entry or work. For each of the aforesaid purposes, LESSOR shall at all times have and retain a key with which to unlock all of the doors in, upon and about the premises, excluding LESSEE’S vaults, safes and files, and 285 of 437
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18 LESSOR shall have the right to use any and all means which LESSOR may deem proper to open said doors in an emergency, in order to obtain entry to the premises without liability to LESSEE except for any failure to exercise due care for LESSEE’S property. Any entry to the premises obtained by LESSOR by and of said means, or otherwise, if conducted in accordance with this Lease, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the premises, or an eviction of LESSEE from the premises or any portion thereof.

21. Reconstruction.

A. In the event the premises or improvement(s), of which the premises are a part, are damaged by fire or other perils covered by extended coverage insurance, LESSEE agrees to forthwith repair the same; and this Lease shall remain in full force and effect, except that LESSEE shall be entitled to a proportionate reduction of the rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall materially interfere with the business carried on by the LESSEE in the premises. If the damage is due to the fault or neglect of LESSEE or its employees, there shall be no abatement of rent.

B. In the event the premises or the building, wharf, dock, or new improvement(s) of which the premises are a part, are damaged as a result of any cause other than the perils covered by fire and extended coverage insurance, then LESSEE shall forthwith repair the same, provided the extent of the destruction be less than twenty percent (20%) of the then full replacement cost of the premises or improvements, of which the premises are a part. In the event the destruction of the premises or the new improvement(s), is equal to twenty percent (20%) or to an extent greater than twenty percent (20%) of the full replacement cost, the LESSEE shall have the option: (1) to repair or restore such damage, this Lease continuing in full force and effect, but the rent to be proportionately reduced as hereinabove in this Paragraph 21 provided; or (2) give notice to LESSOR at any time within sixty (60) days after such damage terminating this Lease as of the date specified in such notice, which date shall be no less than thirty (30) and no more than sixty (60) days after the giving of such notice. In the event of giving such notice, this Lease shall expire and all interest of the LESSEE in the premises shall terminate on the date so specified in such notice and the rent, reduced by a proportionate amount, based upon the extent, if any, to which such damage materially interfered with the business carried on by the LESSEE in the premises, shall be paid up to date of such termination.

C. Notwithstanding anything to the contrary contained in this Paragraph 21, LESSEE shall not have any obligation whatsoever to repair, reconstruct or restore the premises when the damage resulting from any casualty covered under this Paragraph occurs during the last six (6) months of the term of this Lease or any extension thereof.

D. LESSOR shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any panels, decoration, office fixtures, railings, floor covering, partitions, or any other property installed in the premises by LESSEE.

E. The LESSEE shall not be entitled to any compensation or damages from LESSOR for loss of the use of the whole or any part of the premises, LESSEE’S personal property 286 of 437
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19 or any inconvenience or annoyance occasioned by such damage, repair, reconstruction or restoration.

22. Default.

The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by LESSEE:

A. The vacating or abandonment of the premises by LESSEE.

B. The failure by LESSEE to make any payment of rent or any other payment required to be made by LESSEE hereunder, as and when due where such failure shall continue for a period of thirty three (30) days after written notice thereof by LESSOR to LESSEE.

C. The failure by LESSEE to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by LESSEE other than described in Paragraph 22(B) above, where such failure shall continue for a period of thirty (30) days after written notice thereof by LESSOR to LESSEE; provided, however, that if the nature of LESSEE’S default is such that more than thirty (30) days are reasonably required for its cure, then LESSEE shall not be deemed to be in default if LESSEE commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.

D. The making by LESSEE of any general assignment or general arrangement for the benefit of creditors; or the appointment of a trustee or a receiver to take possession of substantially all of LESSEE’S assets located at the premises or of LESSEE’S interest in this Lease, where possession is not restored to LESSEE within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of LESSEE’S assets located at the premises or of LESSEE’S interest in this Lease, where such seizure is not discharged in thirty (30) days.

23. Remedies in Default.

In the event of any such material default or breach by LESSEE, LESSOR may at any time thereafter, with or without notice or demand and without limiting LESSOR in the exercise of a right or remedy which LESSOR may have by reason of such default or breach:

A. Terminate LESSEE’S right to possession of the premises by giving LESSEE notice of termination, in which case this Lease shall terminate and LESSEE shall immediately surrender possession of the premises to LESSOR. In such event LESSOR shall be entitled to recover from LESSEE all damages incurred by LESSOR by reason of LESSEE’S default including, but not limited to, the cost of recovering possession of the premises; expenses of reletting, including necessary renovation and alteration of the premises, reasonable attorney’s fees, any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that LESSEE proves could be reasonably avoided; that portion of the leasing commission paid by LESSOR and applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of twelve percent (12%) per annum. In the event LESSEE shall have abandoned the premises, LESSOR has the option of (a) taking possession of the 287 of 437
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20 premises and recovering from LESSEE the amount specified in this paragraph, or (b) proceeding under the provision of the following paragraph 23(B).

B. Maintain LESSEE’S right to possession, in which case this Lease shall continue in effect whether or not LESSEE shall have abandoned the premises. In such event LESSOR shall be entitled to enforce all of LESSOR’S rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

C. LESSOR may at LESSOR’S election use LESSEE’S personal property and trade fixtures or any of such property and fixtures without compensation and without liability for use or damage, or store them for the account and at the cost of LESSEE. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time.

D. Pursue any other remedy now or hereafter available to LESSOR under the laws or judicial decisions of the State in which the premises are located.

24. Notice of LESSOR’Ss Default; LESSEE’Ss Waiver.

LESSOR shall not be considered to be in default under this Lease unless (1) LESSEE has given notice specifying the default and (2) LESSOR has failed for thirty (30) days to cure the default, if it is curable, or to institute and diligently pursue reasonable corrective or ameliorative acts for non-curable defaults. LESSEE shall have the right of termination for LESSOR’S default only after notice to and consent by all mortgagees under mortgages then existing under provisions of this Lease relating to purchase or construction of improvements. LESSEE waives the protections of Civil Code Sections 1932 and 1933.

25. Eminent Domain.

A. If more than twenty-five percent (25%) of the premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, either party hereto shall have the right, at its option, to terminate this Lease, and LESSOR shall be entitled to any and all income, rent, award, or any interest therein whatsoever which may be paid or made in connection with such public or quasi-public use or purpose, and LESSEE shall have no claim against LESSOR for the value of any unexpired term of this Lease, except that LESSEE shall be entitled to any portion of such award that is specifically attributable to the unamortized cost or remaining useful value of improvements constructed or paid for by LESSEE. If more than twentyfive percent (25%) of the premises is taken, and neither party elects to terminate as herein provided, the rental thereafter to be paid shall be equitably reduced. If any part of the real property described in Exhibit “A” may be so taken or appropriated, LESSOR shall have the right at its option to terminate this Lease and shall be entitled to the entire entire award as above provided.

B. If more than twenty-five percent (25%) of the premises is taken, LESSEE shall have the right to elect to terminate this Lease. If LESSEE elects not to terminate this Lease because of said taking (25% or less), the rental thereafter to be paid shall not be reduced or abated. 288 of 437
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21 C. LESSOR shall be entitled to any and all award, judgment or payment made by any public or quasi-public entity condemning all or portion of the premises and LESSEE hereby waives any and all right to such compensation, award or payment.

26. Access.

A. LESSEE shall have access to the premises twenty-four (24) hours each day.

B. Notwithstanding any other provision of this Lease, LESSOR shall be entitled to construct improvements to or around the premises related to LESSOR’S use of La Plaza Park and adjacent roadways. LESSOR shall ensure LESSEE continues to have ingress and egress from the premises. LESSOR shall not be liable for, and LESSEE shall not be entitled to any payment to LESSEE for changes in LESSEE’S access to the premises.

27. General Provisions.

A. Plats and Riders. Clauses, plats and riders, if any, signed by the LESSOR and the LESSEE and endorsed on or affixed to this Lease are a part hereof.

B. Waiver. The waiver by LESSOR or any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by LESSOR shall not be deemed to be a waiver of any preceding breach by LESSEE of any term, covenant or condition of this Lease, other than the failure of the LESSEE to pay the particular rental so accepted, regardless of LESSOR’S knowledge of such preceding breach at the time of the acceptance of such rent.

C. Notices. All notices and demands which may or are to be required or permitted to be given by either party to the other hereunder shall be in writing. All notices and demands by the LESSOR to the LESSEE shall be sent by United States mail, postage prepaid, addressed to the LESSEE at the premises, or to such other place as LESSEE may from time to time designated in a notice to the LESSOR. All notices and demands by the LESSEE to the LESSOR shall be sent by United States mail, postage prepaid, addressed to the City of Cotati, City Manager, 201 W. Sierra Avenue, Cotati, California 94931-4217, or to such other person or place as the LESSOR may from time to time designate in a notice to the LESSEE.

D. Joint Obligation. If there be more than one LESSEE the obligations hereunder imposed upon LESSEE shall be joint and several.

E. Marginal Headings. The marginal headings and paragraph titles to the paragraphs of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.

F. Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor.
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22 G. Successors and Assigns. The covenants and conditions herein contained subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto.

H. Recordation. A short form memorandum of this Lease shall be recorded immediately after its execution.

I. Quiet Possession. Upon LESSEE paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on LESSEE’S part to be observed and performed hereunder, LESSEE shall have quiet possession of the premises for the entire term hereof, subject to all of the provisions of this Lease.

J. Late Charges. LESSEE hereby acknowledges that late payment by LESSEE to LESSOR of rent or other sums due hereunder will cause lessor LESSOR to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.

Such costs include, but are not limited to, processing and accounting charges. Accordingly, if any installment of rent or of a sum due from LESSEE shall not be received by LESSOR or LESSOR’S designee within five (5) days after said amount is due, then LESSEE shall pay to LESSOR a late charge equal to twelve (12%) percent of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the cost the LESSOR will incur by reason of the late payment by LESSEE. Acceptance of such late charge by the LESSOR shall in no event constitute a waiver of LESSEE’S default with respect to such overdue amount, nor prevent LESSOR from exercising any of the other rights and remedies granted hereunder.

K. Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties.

L. Inability to Perform. This Lease and the obligations of the LESSOR hereunder shall not be affected or impaired because the LESSOR is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the LESSOR.

M. Attorney’s fees. In the event of any action or proceeding, including arbitration, brought by either party against the other under this Lease, the prevailing party shall be entitled to recover all costs and expenses, including the fees of its attorneys in such action or proceeding in such amount as the court or arbitrator may adjudge reasonable as attorney’s fees.

N. Sale of Premises by LESSOR. In the event of any sale of the premises, LESSOR shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale, provided that (i) the purchaser or transferee has executed and delivered to LESSEE a written assumption agreement expressly 290 of 437
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23 assuming all such covenants and obligations of LESSOR under this Lease, and (ii) a copy of such assumption agreement has been delivered to LESSEE; and the purchaser, at such sale or any subsequent sale of the premises shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the LESSOR under this Lease.

O. Separability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect.

P. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Q. Choice of Law. This Lease shall be governed by the laws of the State of California.

R. Signs and Auctions. LESSEE shall not place any sign upon the premises or building or conduct any auction thereon without LESSOR’S prior written consent.

S. LESSEE’S Duty to Surrender. At the expiration or earlier termination of the term, LESSEE shall surrender to LESSOR the possession of the premises. Surrender or removal of improvements fixtures, trade fixtures, and improvements shall be as directed in provisions of this Lease on ownership of improvements at termination. LESSEE shall leave the surrendered premises and any other property in good and broom-clean condition except as provided to the contrary in provisions of this Lease on maintenance and repair of improvements.

All property that LESSEE is required to surrender shall become LESSOR’S property at termination of the Lease. All property that LESSEE is not required to surrender but that LESSEE does abandon shall, at LESSOR’S election, become LESSOR’S property at termination.

If LESSEE fails to surrender the premises at the expiration or sooner termination of this Lease, LESSEE shall defend and indemnify LESSOR from all liability and expense resulting from the delay or failure to surrender, including, without limitation, claims made by any succeeding LESSEE founded on or resulting from LESSEE’S failure to surrender.

The parties hereto have executed this Lease on the dates specified immediately adjacent to their respective signatures.
[Signatures Continue on Subsequent Page]

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24 LESSOR/CITY OF COTATI:

By: _____________________________ Date: ______________________________ This Lease was approved by the City Council of the City of Cotati on _______________________, by Resolution No. _____________.

LESSEE/COTATI RANCHO ADOBE FIRE PROTECTION DISTRICT:

By: ___________________________ Date: ______________________________ _________________, President
This Lease was approved by the Board of Directors of the Cotati Rancho Adobe Fire Protection District on ______________________, by Resolution No. _____________________.

Approved as to form: Approved as to form:
_________________________________ ____________________________________ ___________________, City Attorney _____________________, Attorney for the Cotati Rancho Adobe Fire Protection District

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25 Exhibit A
Map of Premises

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26 Exhibit B
Parking Area

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27 Exhibit C
Form of Certificate of Insurance
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RESOLUTION NO. (XX)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI

APPROVING A SECOND AMENDED LEASE AGREEMENT BETWEEN THE CITY

OF COTATI AND THE COTATI RANCHO ADOBE FIRE PROTECTION DISTRICT FOR CITY-OWNED PROPERTY LOCATED AT 1 EAST COTATI AVENUE WHEREAS, the City of Cotati (“City”) is the owner of real property located at 1 East Cotati Avenue, Cotati, California; and
WHEREAS, the City and the Cotati Rancho Adobe Fire Protection District (“RAFD”) are parties to an existing Lease Agreement governing the use of the City-owned property; and WHEREAS, under the Lease Agreement, the City leases the underlying land to RAFD, RAFD owns, operates, and maintains the fire station improvements during the lease term, and ownership of the fire station improvements reverts to the City upon expiration or termination of the Lease; and
WHEREAS, the original Lease Agreement was executed in 1965 with a term of fifty (50) years, expiring in 2015, and was subsequently amended in 1989 to address planned improvements to the fire station and to extend the lease term for an additional fifty (50) years, expiring in 2039; and
WHEREAS, the City and RAFD have negotiated a Second Amended Lease Agreement (“Second Amended Lease”) that consolidates prior amendments, largely eliminates unnecessary requirements related to internal improvements, and incorporates additional negotiated revisions; and
WHEREAS, the Second Amended Lease maintains the fundamental structure and intent of the existing agreement while clarifying provisions related to the lease term, rent administration, maintenance and repair responsibilities, insurance and indemnification requirements, permitted use, parking, and landscape maintenance; and WHEREAS, the Second Amended Lease provides RAFD with exclusive use of six (6) off-street parking spaces, subject to the City’s discretionary right to revoke such exclusive use upon thirty (30) days written notice, and delineates landscape maintenance responsibilities between the City and RAFD based on water meter service; and WHEREAS, the City Council finds that approval of the Second Amended Lease will provide a single, restated lease document reflecting the current terms agreed upon by both parties and will reduce the potential for future interpretation disputes; and WHEREAS, approval of the Second Amended Lease is not expected to result in a material fiscal impact, as the City will continue to lease the property to RAFD for $1.00 per year as a public benefit, with all financial obligations consistent with current budget assumptions; and WHEREAS, where it can be determined with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not 296 of 437
subject to CEQA review. This general rule can be applied to activities which could be subject to the CEQA process, but which logic dictates should not be subject to CEQA review. Therefore, based on the information provided above, the proposed resolution is exempt from CEQA pursuant to Section 14.03.021 of the CEQA Guidelines in that there is no possibility that the activity may have a significant impact on the environment.

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

1. The above findings are true and correct.

2. The City Council hereby approves the Second Amended Lease Agreement between the City of Cotati and the Cotati Rancho Adobe Fire Protection District for the City-owned property located at 1 East Cotati Avenue, substantially in the form presented to the City Council.

3. The City Council hereby authorizes the City Manager, or designee, to execute the Second Amended Lease Agreement and any related documents necessary to carry out the intent of this Resolution, subject to approval as to form by the City Attorney.

4. This Resolution shall take effect immediately upon adoption.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 27, 2026, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney
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SECOND AMENDED & RESTATED LEASE

DOWNTOWN LA PLAZA PARK FIRE STATION
1 EAST COTATI AVENUE, COTATI
THIS LEASE is made on January 31, 2026, by and between the CITY OF COTATI, a municipal corporation, hereinafter called “LESSOR”, and the RANCHO ADOBE FIRE PROTECTION DISTRICT, hereinafter called “LESSEE”.

RECITALS
WHEREAS, LESSOR and LESSEE were parties to an initial lease which commenced on April 1, 1965, and was scheduled to terminate on March 31, 2015.

WHEREAS, prior to the expiration of the initial lease, LESSOR and LESSEE entered into an amended and restated lease, which commenced on April 1, 1989, and terminates on March 31, 2039.

WHEREAS, LESSEE desires to enter into a new lease agreement to extend the term of its leasehold rights to lease the subject premises.

WHEREAS, LESSEE desires to construct certain improvements and additions to the leased premises.

WHEREAS, LESSOR agrees to extend the lease term and to consent to certain improvements being installed on the premises by LESSEE.

NOW, THEREFORE, the parties agree as follows:

AGREEMENT
LESSOR leases to LESSEE and LESSEE hires from LESSOR the premises hereafter described under the following terms and conditions.

1. Premises.

The “premises” are described in Exhibit “A” attached hereto and incorporated by this reference.

2. Term of Lease.

The term of this Lease is fifty (50) calendar years, beginning on January 31, 2026, and ending at midnight on January 31, 2076, unless extended or sooner terminated as provided for in this Lease.

3. Restated Lease.
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2 This Lease supersedes that Lease entered into by and between the parties pertinent to the premises on April 1, 1989. This Lease restates and memorializes all of the terms and conditions under which LESSOR leases the premises to LESSEE.

4. Rent.

For each year of this Lease, LESSEE shall pay to the LESSOR, in advance on the first day of each year beginning on January 31, 2026, the amount of ONE DOLLAR ($1.00).

5. Use.

A. LESSEE shall use the premises for a fire station plus the storage of materials and equipment related to that activity and shall not use or permit the premises to be used for any other purpose without the prior written consent of LESSOR. LESSEE shall not do or permit anything to be done in or about the premises nor bring or keep anything therein which will in any way increase the existing rate of or affect any fire or other insurance upon the premises or any of its contents, or cause cancellation of any insurance policy covering said premises or any part thereof or any of its contents. LESSEE shall not use or allow the premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall LESSEE cause, maintain or permit any nuisance in, on or about the premises. LESSEE shall not commit or suffer to be committed any waste in or upon the premises.

B. Except for oils and solvents used and stored in the normal operation and maintenance of LESSEE’S equipment and property, neither LESSEE nor, to the best of LESSEE’S knowledge (after due and diligent inquiry), any third party may use, generate, manufacture, produce, store or dispose of, on, under or about the premises or transport to or from the premises any flammable explosives, asbestos, radioactive materials, hazardous waste, toxic substances or related injurious materials, whether injurious by themselves or in combination with other materials (collectively called “hazardous materials”). For the purpose of this agreement, “hazardous materials” shall include, but not be limited to, substances defined as “hazardous substances”, “hazardous materials” or “toxic substances” in federal and/or state law.

C. LESSEE shall have the exclusive right to use six (6) designated parking spaces within the parking area serving the premises, in locations mutually agreed upon by LESSOR and LESSEE, and further identified in Exhibit B (“Parking Area”). LESSEE may, at its sole cost and expense, install appropriate markings or signage, subject to LESSOR’S prior written approval, which shall not be unreasonably withheld, to identify the reserved spaces. LESSOR at its sole discretion may revoke LESSEE’S exclusive right to use the Parking Area upon thirty (30) days written notice to LESSEE. LESSOR will engage in good faith discussions with LESSEE to identify a different mutually agreeable location for designated parking spaces. All landscape areas on or adjacent to the premises served by the building water meter shall be irrigated and maintained by LESSEE. All landscape areas on or adjacent to the premises served by the park water meter(s) shall be irrigated and maintained by the LESSOR.

6. Compliance with Law.

LESSEE shall not use the premises or permit anything to be done in or about the premises which will in any way conflict with any law, statute, ordinance or governmental rule or regulation 299 of 437
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3 now in force or which may hereafter be enacted or promulgated. LESSEE shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force, and with the requirements of any board of fire insurance underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the condition, use or occupancy of the premises, including structural changes not related to or affected by LESSEE’S improvements or acts. The judgment of any court of competent jurisdiction or the admission of LESSEE in any action against LESSEE, whether LESSOR be a party thereto or not, that LESSEE has violated any law, statute, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between the LESSOR and LESSEE.

7. Not Used.

8. Other Rights Reserved.

All oil, gas, and mineral rights are expressly reserved from this Lease.

9. Improvements, Alterations and Additions.

A. At any time, from time to time, during the term of the Lease, LESSEE may, but is not obligated to, construct or otherwise make new improvements on any part or all of the premises and to demolish, remove, replace, alter, relocate, reconstruct or add to any existing improvements in whole or in part, and to modify or change the contour of or grade, or both, of the land, provided LESSEE is not then in default under any condition or provision of this Lease and provided the improvements following the work are of a nature and quality reasonably acceptable to LESSOR pursuant to the approval process set forth in this Paragraph 9. All salvage shall belong to LESSEE.

LESSEE shall not make or suffer to be made any alterations, additions or improvements to the exterior, or that are visible from the exterior of the premises without the prior written consent of LESSOR, regardless of other permitting requirements or regulations. Consent of LESSOR shall be given or denied in writing within thirty (30) days after receipt from LESSEE of all materials requested by LESSOR to evaluate the proposed alterations, additions or improvements. Any alterations, additions or improvements to or of said premises shall on the expiration of the term become a part of the realty and belong to the LESSOR and shall be surrendered with the premises.

In the event LESSOR consents to the making of any alterations, additions or improvements to the premises by LESSEE, the same shall be made by LESSEE at LESSEE’S sole cost and expense, and any contractor or person selected by LESSEE to make the same must first be approved of in writing by the LESSOR. Upon the expiration or sooner termination of the term hereof, LESSEE shall, upon written demand by LESSOR, given at least thirty (30) days prior to the end of the term, at LESSEE’S sole cost and expense, forthwith and with all due diligence remove any nonpermanent, obsolete, or superseded alterations, additions, or improvements made by LESSEE, designated by LESSOR to be removed, and LESSEE shall, forthwith and with all due diligence at its sole cost and expense, repair any damage to the premises caused by such removal. LESSOR shall not require removal of improvements that were approved by LESSOR and remain in good and serviceable condition at the time of termination, unless such removal is reasonably necessary for the future use of the premises as determined by LESSOR. If LESSOR requires removal of any 300 of 437
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4 such approved and serviceable improvements, the parties shall meet and confer in good faith regarding cost-sharing or reimbursement of LESSEE’S reasonable removal costs.

B. All work shall be performed in a good and workmanlike manner, shall substantially comply with plans and specifications submitted to LESSOR as required by this Lease, and shall comply with all applicable City and other governmental permits, laws, ordinances and regulations. Upon completion, said addition shall become part of the premises and be subject to this Lease. In the event of a dispute, improvements shall be completed to the City’s sole satisfaction.

C. Conditions of Construction. Before any work of construction, addition or alteration is commenced on the premises, and before any building materials have been delivered to the premises by LESSEE or under LESSEE’S authority, LESSEE shall comply with all the following conditions:
(1) All improvements shall be constructed within the premises; required work beyond the premises on utilities, access, and conditional use requirements would be permitted separately. (2) Liability, Workers Compensation, Automotive Insurance.

All contractors providing services or performing any type of construction or repair shall maintain, at a minimum,
insurance at the policy limits typically maintained by the LESSOR for similar work performed for the LESSOR. The
policy limits, additionally insured and form of insurance shall be provided by LESSOR, as may be updated from time to time.
(3) Payment & Material Bonds. Any construction, addition or alteration work in excess of $100,000 shall include payment and material bonds. The bonds shall be that of a responsible surety company, licensed to do business in California, in an amount not less than 100% of the estimated cost of the
improvement and shall remain in effect until the entire cost of the work shall have been paid in full and the new
improvements shall have been insured as provided in this Lease.
(4) Builders Risk Insurance. For any work in excess of
$100,000, deliver to LESSOR certificates of insurance
evidencing coverage for “builder’s risk,” to protect LESSOR and LESSEE from financial losses due to physical damage or theft to a building during construction or renovation, covering the structure, materials, and equipment from perils like fire, storms, vandalism, and theft until completion. The coverage limits shall be approved by the LESSOR in writing. 301 of 437
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5 (5) The provision to LESSOR of all necessary permits from all governmental agencies having jurisdiction over the work of improvement.

D. Not Used.

E. Conditions of Premises. LESSOR makes no covenants or warranties respecting the condition of the soil, subsoil, the improvements thereon or any other condition of the premises. LESSEE may enter onto the premises to make structural engineering tests that LESSEE considers necessary. All such tests made by or on behalf of LESSEE shall be at LESSEE’S sole expense and shall be evidenced by a separate contract. A copy of any such report shall be delivered to LESSOR on commencement of the term.

F. Financing. If the LESSEE intends to utilize any type of financing that would utilize the improvements constructed by LESSEE as security, the LESSEE must provide copies of all final documents to the LESSOR. In no case shall the LESSEE obtain any type of financing with a repayment term that extends beyond the term of this Lease or usesthe underlying LESSOR’s property or improvements not constructed by LESSEE as security.

G. Protection of LESSOR Against Cost or Claim. LESSEE shall pay or cause to be paid the total cost and expense of all works of improvement, as that phrase is defined in the Mechanics’ Lien Law in effect at the place of construction when the work begins. No such payment shall be construed as rent. LESSEE shall not suffer or permit to be enforced against the premises or any part of it any mechanic’s, materialman’s, contractor’s, or subcontractor’s lien arising from any work of improvement, however it may arise. However, LESSEE may in good faith and at LESSEE’S own expense contest the validity of any such asserted lien, claim, or demand, provided LESSEE has furnished the bond required in California Civil Code Section 3143 (or any comparable statute hereafter enacted for providing a bond freeing the premises from the effect of a lien claim).

LESSEE shall defend and indemnify LESSOR against all liability and loss of any type arising out of work performed on the premises by LESSEE, together with reasonable attorney’s fees and all costs and expenses incurred by LESSOR in negotiating, settling, defending, or otherwise protecting against such claims.

LESSEE shall reimburse LESSOR for all sums paid by LESSOR under this paragraph, together with all LESSOR’s reasonable attorney’s fees and costs, plus interest on those sums, fees, and costs at the rate of twelve percent (12%) per year from the date of payment until the date of reimbursement.

H. Notice of Completion. On completion of any substantial work of improvement during the term, LESSEE shall file or cause to be filed a notice of completion.

LESSEE hereby appoints LESSOR as LESSEE’S attorney-in-fact to file the notice of completion on LESSEE’S failure to do so after the work of improvement has been substantially completed. 302 of 437
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6 I. Record Documents. On completion of any work of improvement, LESSEE shall give LESSOR one (1) hard copy of the “as-built” drawings and one (1) digital copy of the “as-built” drawings, specifications and complete project file within 90 calendar days of the completion of the work. The drawings shall be on archival mylar, 24” x 36” (unless waived or otherwise agreed to by LESSOR) and the project file shall be pdf or other digital file type acceptable to the LESSOR.

J. Notice of Take-Out (Permanent) Financing. LESSEE shall promptly deliver to LESSOR:
(1) Evidence that the supplier of any construction financing has accepted or approved of the completed improvements; and (2) Evidence that the take-out (permanent) financing has been recorded and the funds properly disbursed, together with copies of the note and the encumbrance securing it.

K. Ownership of New Improvements During Term. All improvements constructed on the premises by LESSEE as permitted by this Paragraph 9 shall be owned by LESSEE until the termination of this Lease. LESSEE shall not, however, remove any improvements from the premises nor waste, destroy, or modify any improvements on the premises, except as permitted by this Lease.

L. Ownership at Termination. All improvements constructed on the premises by LESSEE as permitted by Paragraph 9, at the end of this Lease, or upon sooner termination of this Lease shall, without compensation to LESSEE, then become LESSOR’S property free and clear of all claims to or against them by LESSEE or any third person, and LESSEE shall defend and indemnify LESSOR against all liability and loss arising from such claims or from LESSOR’S exercise of the rights conferred by this paragraph.

M. Diligent Prosecution to Completion. Once the work has begun, LESSEE shall with reasonable diligence prosecute to completion all construction of improvements, additions, or alterations. All work shall be performed in a good and workperson-like manner, shall substantially comply with plans and specifications submitted to LESSOR as required by this Lease, and shall comply with all applicable governmental permits, laws, ordinances and regulations.

N. Not used.

10. Repairs.

A. By taking possession of the premises, LESSEE shall be deemed to have accepted the premises as being in good sanitary order, condition and repair. LESSEE shall, at LESSEE’S sole cost and expense, keep the premises and every part thereof in good condition and repair. LESSEE shall upon the expiration or sooner termination of this Lease hereof surrender the premises to the LESSOR in good condition, ordinary wear and tear and damage from causes beyond the reasonable control of LESSEE excepted. LESSOR shall have no obligation whatsoever to alter, remodel, improve, repair, decorate or paint the premises or any part thereof, and the parties hereto affirm that LESSOR has made no representations to LESSEE respecting the 303 of 437
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7 condition of the premises or any part thereof and the parties hereto affirm that LESSOR has made no representations to LESSEE respecting the condition of the premises or any improvements located thereon.

B. LESSEE waives the right to make repairs at LESSOR’S expense under any law, statute or ordinance now or hereafter in effect.

C. All parts, equipment, garbage, refuse and other debris either used or discarded as part of LESSEE’S business on the premises shall always be stored or discarded in such a manner so as not to be visible by persons located on any property other than on the premises.

D. LESSEE shall obtain any necessary permits or approvals required prior to performing the work. Repairs shall be subject to the same workmanship standard, insurance and bonding requirements described in Paragraph 9.

11. Financing Without Fee Subordination.

A. LESSEE shall have the right at any time and from time to time to subject the leasehold estate and any or all improvements to one or more mortgages as security for a loan or loans or other obligation of LESSEE provided that:
(1) The mortgage and all right required under it shall be subject to each and all of the covenants, conditions, and restrictions stated in this Lease and to all rights and interest of LESSOR except as otherwise provided in this Lease.
(2) LESSEE shall give LESSOR thirty (30) days prior notice of any such mortgage, and shall accompany the notice with a true copy of the note and mortgage.
(3) The repayment term of the mortgage shall not extend beyond the term of this Lease.

B. The mortgage documents shall provide that any proceeds from fire or extended coverage insurance shall be used for repairs or rebuilding of the leasehold improvements and not to repay part of the outstanding mortgage.

C. The mortgage documents shall contain provisions that all notices of default under the note and mortgage must be sent to LESSOR and LESSEE and that LESSOR shall have the right to cure any default if LESSEE fails to do so. LESSOR shall have sixty (60) days in which to cure any default if the time for LESSEE to cure it has expired. Neither LESSOR’S right to cure any default nor any exercise of such a right shall constitute an assumption of liability under the note or mortgage. If any default is not curable, it shall not be grounds for foreclosure of the mortgage if LESSOR, or LESSEE in possession of the premises, promptly performs all other provisions of the note and mortgage then required to be performed.

D. On the recording of the mortgage, LESSEE shall, at expense, cause to be recorded in the office of the county where the premises are located a written request executed and 304 of 437
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8 acknowledged by LESSOR for a copy of all notices of default and all notices of sale under the mortgage as provided by the State of California. Inclusion in the body of the recorded mortgage itself of a request for notice having the effect described above shall constitute compliance with this provision.

E. The leasehold mortgagee (lender) shall not be liable to perform LESSEE’S obligations under this Lease until the mortgagee acquires LESSEE’S rights by foreclosure. After acquiring LESSEE’S rights by foreclosure, mortgagee shall be liable to perform LESSEE’S obligations only until mortgagee assigns or transfers the leasehold as permitted by this Lease.

Mortgagee shall not, however, be required to cure LESSEE’S defaults occurring before mortgagee’s acquisition of LESSEE’S rights by foreclosure.

F. No permitted mortgage shall cover any interest in any real property other than interests specifically subjected to mortgage by this Lease. No mortgage permitted by this Lease shall cover more than one (1) indebtedness.

G. On termination of this Lease by LESSOR on LESSEE’S default, or on mortgagee’s acquisition of the leasehold by foreclosure, LESSOR shall enter into a new lease with mortgagee covering the premises covered by the terminated or foreclosed lease if mortgagee (1) gives notice of request within thirty (30) days after termination or foreclosure, (2) pays all costs resulting from default and termination, and (3) remedies all defaults construed as though the Lease had not been terminated. The new lease shall be for the remainder of the term of the terminated or foreclosed lease, effective at the date of termination or foreclosure, at the rent and on the covenants, agreements, conditions, provisions, restrictions, and limitations contained in the terminated or foreclosed Lease.

12. Assignment and Subletting.

A. Except as expressly permitted pursuant to this Paragraph 12. LESSEE shall not, without the prior written consent of the LESSOR, assign or hypothecate this Lease or any interest herein or sublet the premises or any part thereof, or permit the use of the premises by any party other than LESSEE. Any of the foregoing acts without such consent shall be void and shall, at the option of LESSOR, terminate this Lease. This Lease shall not, nor any interest herein, be assignable as to the interest of LESSEE by operation of law without the written consent of LESSOR, such consent not to be unreasonably withheld; provided, however, that no such consent shall be required for any assignment or transfer of LESSEE’S interest to a successor public agency that assumes LESSEE’S powers and responsibilities pursuant to proceedings of the Sonoma County Local Agency Formation Commission (LAFCo) or other lawful governmental reorganization. In such event, the successor public agency shall automatically succeed to all rights and obligations of LESSEE under this Lease.

B. If at any time or from time to time during the term of this Lease LESSEE desires to sublet all or any part of the premises, LESSEE shall give notice to LESSOR setting forth the terms of the proposed subletting and the space so proposed to be sublet. In the event LESSOR consents to such proposed subletting, such consent shall be subject to the following conditions:
(1) the sublease shall be on the same terms set forth in the notice given to LESSOR; (2) no sublease of the premises shall be subleased until an executed counterpart of such sublease has been 305 of 437
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9 delivered to LESSOR; (3) no sublessee shall have the right to assign its sublease or further to sublet without the prior written consent of LESSOR; and (4) any sums or other economic consideration received by LESSEE as a result of such subletting, whether denominated rentals under the sublease or otherwise, which exceed, in the aggregate, the total sums which LESSEE is obligated to pay LESSOR under this Lease (prorated to reflect obligations allocable to that portion of the premises subject to such sublease) shall be payable to LESSOR as additional rental under this Lease without affecting or reducing any other obligations of LESSEE hereunder.

C. Regardless of LESSOR’S consent, no subletting or assignment shall release LESSEE of LESSEE’S obligations or alter the primary liability of LESSEE to pay the rental and to perform all other obligations to be performed by LESSEE hereunder. The acceptance of rental by LESSOR from any other person shall not be deemed to be a waiver by LESSOR of any provision hereof. Consent to one assignment or subletting shall not be deemed to be consent to any subsequent assignment or subletting. In the event of default by any assignee of LESSEE or any successor of LESSEE in the performance of any of the terms hereof, LESSOR may proceed directly against LESSEE without the necessity of exhausting remedies against such assignee or successor. LESSOR may consent to subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignee of LESSEE, provided, however, that LESSOR shall not amend or modify this Lease with any assignee in a manner that increases or materially alters the obligations or liabilities of the original LESSEE without first providing written notice to, and obtaining the written consent of, the original LESSEE. Any consent by LESSOR under this Section shall not relieve LESSEE of liability under this Lease.

D. In the event LESSEE shall assign or sublet the premises or request the consent of LESSOR for any act that LESSEE proposes to do, then LESSEE shall pay LESSOR’S reasonable attorneys’ fees incurred in connection therewith.

E. The following are conditions precedent to LESSEE’S right of assignment:
(A) LESSEE shall give LESSOR reasonable notice of the proposed assignment with appropriate documentation as evidence that the proposed assignee qualifies as a permitted assignee.
(B) Except as otherwise provided in this Lease for a permitted mortgagee, the proposed assignee shall, in recordable form, expressly assume all of the covenants and conditions of this Lease.
(C) LESSEE shall pay LESSOR a lump sum, determined by LESSOR, to enable LESSOR adequately to investigate the proposed assignee’s qualifications as a permitted assignee. LESSOR shall not be required to account for the use of the sum paid.

13. Hold Harmless.

A. LESSEE, shall indemnify and hold harmless LESSOR against and from any and all claims arising from LESSEE’S use of the premises for the conduct of its business or from any activity, work, or other thing done, permitted or suffered by the LESSEE in or about the premises, and shall further indemnify and hold harmless LESSOR against and from any and all claims arising from any breach or default in the performance of any obligation on LESSEE’S part 306 of 437
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10 to be performed under the terms of this Lease, or arising from any act or negligence of the LESSEE, or any officer, agent, employee, guest, or invitee of LESSEE, and from all and against all costs, attorney’s fees, expenses and liabilities incurred in or about any such claim or any action or proceeding brought thereon, and, in any case, any action or proceeding brought against LESSOR by reason of any such claim, LESSEE upon notice from LESSOR shall defend the same at LESSEE’S expense by counsel reasonably satisfactory to LESSOR. LESSEE, as a material part of the consideration to LESSOR, hereby assumes all risk of damage to property or injury to persons, in, upon or about the premises, from any cause other than LESSOR’S sole negligence, and LESSEE hereby waives all claims in respect thereof against LESSOR.

B. LESSOR or its agents shall not be liable for any damage to property entrusted to LESSEE’S employees, nor for loss or damage to any property by theft or otherwise, nor for any injury to or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak from any part of the buildings, the dock, the wharf, or from the pipes, appliances or plumbing works therein or from the roof, street or subsurface or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to the sole negligence of LESSOR, its agents, servants or employees. LESSOR or its agents shall not be liable for interference with the light or other incorporeal hereditaments, loss of business by LESSEE, nor shall LESSOR be liable for any latent defect in the premises or in the building. LESSEE shall give prompt notice to LESSOR in case of fire or accidents in the premises or in the building or of defects therein or in the fixtures or equipment.

14. Insurance.

A. LESSEE agrees to and shall at its own cost and expense procure and maintain during the entire lease term and any extension thereof comprehensive public liability and property insurance covering the leased premises and their surrounding areas in a combined single limit at a minimum amount carried by LESSOR at similarly situated facilities and with such company or companies with the same or better rating as LESSOR’s insurance. LESSEE shall have the covered premises appraised from time to time to ensure proper property valuation for insurance coverage. Such public liability insurance shall (1) be procured from an insurer authorized to do business in California and approved by LESSOR; (2) provide primary and not excessive coverage; (3) name LESSOR as an additional insured; (4) waive subrogation rights, if any, which the insurer may have against LESSOR by reason of any claim, liability, loss, or expense as described in Paragraph 13 of this Lease; (5) require that LESSOR be given at least thirty (30) days’ written notice before any such insurance can be cancelled or changed with respect to parties, coverage, or limits of liability; and (6) include cross-liability provisions. LESSEE shall, prior to commencement of the Lease term, deliver to LESSOR a certificate of insurance in the form attached as Exhibit “C”, as may be updated from time to time, together with the schedule of insurance coverages in effect, as well as satisfactory evidence that the premiums have been paid, and before each expiration of any such insurance coverage during the Lease term and any extension thereof shall deliver to LESSOR satisfactory evidence that such insurance has been renewed and that the required premium or premiums therefor have been paid. (1) Throughout the term, at LESSEE’S sole cost and expense, LESSEE shall keep or cause to be kept insured for the
mutual benefit of LESSOR and LESSEE, on the
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11 improvements against loss or damage by fire and such other risks as are now or hereafter included in an extended
coverage endorsement in common use for residential
structures, including vandalism and malicious mischief. The amount of the insurance shall be sufficient to prevent either LESSOR or LESSEE from becoming a coinsurer under the
provisions of the policies, but in no event shall the amount be less than ninety percent (90%) of the then actual
replacement cost of said improvement, (herein called FULL INSURABLE VALUE). LESSOR shall not carry any
insurance the effect of which would be to reduce the
protection or payment to LESSEE under any insurance that this Lease obligates LESSEE to carry. If any dispute
whether the amount of insurance complies with the above cannot be resolved by agreement, LESSOR may, not more
often than once every six (6) months, request the carrier of the insurance then in force to determine the full insurable value as defined in this provision, and the resulting
determination shall be conclusive between the parties for the purpose of this paragraph.
(2) All the proceeds from the insurance prescribed by this Paragraph 14 shall be deposited with a mutually agreed upon escrow holder to be applied by the escrow holder for the repair, restoration, or reconstruction of any improvements damaged or destroyed by the casualty giving rise to the insurance claim. Said proceeds shall be disbursed by the escrow holder in the same manner as if the proceeds were a construction loan from an institutional lender to LESSEE made under the provisions of this Lease. LESSEE shall pay all escrow fees and charges.
(3) Notwithstanding anything to the contrary in this Lease, insurance proceeds shall be applied to repair, restoration, or reconstruction of the improvements unless LESSOR and
LESSEE mutually agree in writing to an alternative
disposition. If the parties agree not to restore, proceeds shall be used to restore and improve the former premises for park or other community uses. Any remaining proceeds shall be remitted to LESSEE by LESSOR.

B. If either party at any time during the term hereof should fail to secure or maintain the foregoing insurance, the other party shall be permitted to obtain such insurance in the defaulting party’s name or as the agent of the defaulting party and shall be compensated by the defaulting party for the cost of the insurance premiums. The defaulting party shall pay the other interest on paid insurance premiums at the rate of twelve percent (12%) per annum computed from the date written notice is received that the premiums have been paid. 308 of 437
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12 C. Not Used.

15. Subrogation.

As long as their respective insurers so permit, LESSOR and LESSEE hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage and other property insurance policies existing for the benefit of the respective parties.

Each party shall obtain any special endorsements, if required by their insurer, to evidence compliance with the aforementioned waiver.

16. Services and Utilities.

At LESSEE’S sole cost, LESSEE shall provide electricity, heating, water and telephone service to the premises. LESSOR shall not be liable for, and LESSEE shall not be entitled to any reduction of rental by reason of, any failure to furnish any of the foregoing.

17. Property Taxes.

LESSEE shall pay, or cause to be paid, to LESSOR, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all of LESSEE’S leasehold improvements described in Paragraphs 1 and 9. LESSEE shall pay, or cause to be paid, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all of LESSEE’S personal property, equipment, furniture and fixtures located on the premises.

18. Estoppel Certificate.

At any time and from time to time but on not less than ten (10) days prior written request by LESSOR, LESSEE shall execute, acknowledge and deliver to LESSOR, promptly upon request, a certificate certifying (a) that this Lease is unmodified, and in full force and effect; (or if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date and nature of each modification), (b) the date, if any, to which rental and other sums payable hereunder have been paid, (c) that no notice has been received by LESSEE of any default which has not been cured, except as to defaults specified in said certificate and (d) such other matters as may be reasonably requested by LESSOR. Any such certificate may be relied upon by any prospective purchaser, mortgagee or beneficiary under any deed of trust of the building or any part thereof.

19. Holding Over.

If LESSEE remains in possession of the premises or any part thereof after the expiration of the term hereof, with the express written consent of LESSOR, such occupancy shall be a tenancy from month-to-month at a rental in an amount determined by LESSOR in its sole discretion, plus all other charges, payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy.

20. Entry by LESSOR.
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13 LESSOR reserves and shall during all normal business hours have the right to enter the premises, upon reasonable prior notice to LESSEE (except in cases of emergency), to inspect the same, to submit said premises to prospective purchasers or tenants, to post notices of nonresponsibility, and to alter, improve or repair the premises and any portion of the premises that LESSOR may deem necessary or desirable, without abatement of rent and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the premises shall not be blocked thereby, and further providing that the operations of the LESSEE shall not be interfered with unreasonably. LESSEE hereby waives any claim for damages or for any injury or inconvenience to or interference with LESSEE’S business, any loss of occupancy or quiet enjoyment of the premises, and any loss occasioned thereby. For each of the aforesaid purposes, LESSOR shall at all times have and retain a key with which to unlock all of the doors in, upon and about the premises, excluding LESSEE’S vaults, safes and files, and LESSOR shall have the right to use any and all means which LESSOR may deem proper to open said doors in an emergency, in order to obtain entry to the premises without liability to LESSEE except for any failure to exercise due care for LESSEE’S property. Any entry to the premises obtained by LESSOR by and of said means, or otherwise, if conducted in accordance with this Lease, shall not be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the premises, or an eviction of LESSEE from the premises or any portion thereof.

21. Reconstruction.

A. In the event the premises or improvement(s), of which the premises are a part, are damaged by fire or other perils covered by extended coverage insurance, LESSEE agrees to forthwith repair the same; and this Lease shall remain in full force and effect, except that LESSEE shall be entitled to a proportionate reduction of the rent while such repairs are being made, such proportionate reduction to be based upon the extent to which the making of such repairs shall materially interfere with the business carried on by the LESSEE in the premises. If the damage is due to the fault or neglect of LESSEE or its employees, there shall be no abatement of rent.

B. In the event the premises or the building, wharf, dock, or new improvement(s) of which the premises are a part, are damaged as a result of any cause other than the perils covered by fire and extended coverage insurance, then LESSEE shall forthwith repair the same, provided the extent of the destruction be less than twenty percent (20%) of the then full replacement cost of the premises or improvements, of which the premises are a part. In the event the destruction of the premises or the new improvement(s), is equal to twenty percent (20%) or to an extent greater than twenty percent (20%) of the full replacement cost, the LESSEE shall have the option: (1) to repair or restore such damage, this Lease continuing in full force and effect, but the rent to be proportionately reduced as hereinabove in this Paragraph 21 provided; or (2) give notice to LESSOR at any time within sixty (60) days after such damage terminating this Lease as of the date specified in such notice, which date shall be no less than thirty (30) and no more than sixty (60) days after the giving of such notice. In the event of giving such notice, this Lease shall expire and all interest of the LESSEE in the premises shall terminate on the date so specified in such notice and the rent, reduced by a proportionate amount, based upon the extent, if any, to which such damage materially interfered with the business carried on by the LESSEE in the premises, shall be paid up to date of such termination. 310 of 437
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14 C. Notwithstanding anything to the contrary contained in this Paragraph 21, LESSEE shall not have any obligation whatsoever to repair, reconstruct or restore the premises when the damage resulting from any casualty covered under this Paragraph occurs during the last six (6) months of the term of this Lease or any extension thereof.

D. LESSOR shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any panels, decoration, office fixtures, railings, floor covering, partitions, or any other property installed in the premises by LESSEE.

E. The LESSEE shall not be entitled to any compensation or damages from LESSOR for loss of the use of the whole or any part of the premises, LESSEE’S personal property or any inconvenience or annoyance occasioned by such damage, repair, reconstruction or restoration.

22. Default.

The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by LESSEE:

A. The vacating or abandonment of the premises by LESSEE.

B. The failure by LESSEE to make any payment of rent or any other payment required to be made by LESSEE hereunder, as and when due where such failure shall continue for a period of thirty (30) days after written notice thereof by LESSOR to LESSEE.

C. The failure by LESSEE to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by LESSEE other than described in Paragraph 22(B) above, where such failure shall continue for a period of thirty (30) days after written notice thereof by LESSOR to LESSEE; provided, however, that if the nature of LESSEE’S default is such that more than thirty (30) days are reasonably required for its cure, then LESSEE shall not be deemed to be in default if LESSEE commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.

D. The making by LESSEE of any general assignment or general arrangement for the benefit of creditors; or the appointment of a trustee or a receiver to take possession of substantially all of LESSEE’S assets located at the premises or of LESSEE’S interest in this Lease, where possession is not restored to LESSEE within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of LESSEE’S assets located at the premises or of LESSEE’S interest in this Lease, where such seizure is not discharged in thirty (30) days.

23. Remedies in Default.

In the event of any such material default or breach by LESSEE, LESSOR may at any time thereafter, with or without notice or demand and without limiting LESSOR in the exercise of a right or remedy which LESSOR may have by reason of such default or breach:

A. Terminate LESSEE’S right to possession of the premises by giving LESSEE notice of termination, in which case this Lease shall terminate and LESSEE shall 311 of 437
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15 immediately surrender possession of the premises to LESSOR. In such event LESSOR shall be entitled to recover from LESSEE all damages incurred by LESSOR by reason of LESSEE’S default including, but not limited to, the cost of recovering possession of the premises; expenses of reletting, including necessary renovation and alteration of the premises, reasonable attorney’s fees, any real estate commission actually paid; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that LESSEE proves could be reasonably avoided; that portion of the leasing commission paid by LESSOR and applicable to the unexpired term of this Lease. Unpaid installments of rent or other sums shall bear interest from the date due at the rate of twelve percent (12%) per annum. In the event LESSEE shall have abandoned the premises, LESSOR has the option of (a) taking possession of the premises and recovering from LESSEE the amount specified in this paragraph, or (b) proceeding under the provision of the following paragraph 23(B).

B. Maintain LESSEE’S right to possession, in which case this Lease shall continue in effect whether or not LESSEE shall have abandoned the premises. In such event LESSOR shall be entitled to enforce all of LESSOR’S rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

C. LESSOR may at LESSOR’S election use LESSEE’S personal property and trade fixtures or any of such property and fixtures without compensation and without liability for use or damage, or store them for the account and at the cost of LESSEE. The election of one remedy for any one item shall not foreclose an election of any other remedy for another item or for the same item at a later time.

D. Pursue any other remedy now or hereafter available to LESSOR under the laws or judicial decisions of the State in which the premises are located.

24. Notice of LESSOR’S Default; LESSEE’S Waiver.

LESSOR shall not be considered to be in default under this Lease unless (1) LESSEE has given notice specifying the default and (2) LESSOR has failed for thirty (30) days to cure the default, if it is curable, or to institute and diligently pursue reasonable corrective or ameliorative acts for non-curable defaults. LESSEE shall have the right of termination for LESSOR’S default only after notice to and consent by all mortgagees under mortgages then existing under provisions of this Lease relating to purchase or construction of improvements. LESSEE waives the protections of Civil Code Sections 1932 and 1933.

25. Eminent Domain.

A. If more than twenty-five percent (25%) of the premises shall be taken or appropriated by any public or quasi-public authority under the power of eminent domain, either party hereto shall have the right, at its option, to terminate this Lease, and LESSOR shall be entitled to any and all income, rent, award, or any interest therein whatsoever which may be paid or made in connection with such public or quasi-public use or purpose, and LESSEE shall have no claim against LESSOR for the value of any unexpired term of this Lease. If more than twenty-five percent (25%) of the premises is taken, and neither party elects to terminate as herein provided, 312 of 437
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16 the rental thereafter to be paid shall be equitably reduced. If any part of the real property described in Exhibit “A” may be so taken or appropriated, LESSOR shall have the right at its option to terminate this Lease and shall be entitled to the entire award as above provided.

B. If more than twenty-five percent (25%) of the premises is taken, LESSEE shall have the right to elect to terminate this Lease. If LESSEE elects not to terminate this Lease because of said taking (25% or less), the rental thereafter to be paid shall not be reduced or abated.

C. LESSOR shall be entitled to any and all award, judgment or payment made by any public or quasi-public entity condemning all or portion of the premises and LESSEE hereby waives any and all right to such compensation, award or payment.

26. Access.

A. LESSEE shall have access to the premises twenty-four (24) hours each day.

B. Notwithstanding any other provision of this Lease, LESSOR shall be entitled to construct improvements to or around the premises related to LESSOR’S use of La Plaza Park and adjacent roadways. LESSOR shall ensure LESSEE continues to have ingress and egress from the premises. LESSOR shall not be liable for, and LESSEE shall not be entitled to any payment to LESSEE for changes in LESSEE’S access to the premises.

27. General Provisions.

A. Plats and Riders. Clauses, plats and riders, if any, signed by the LESSOR and the LESSEE and endorsed on or affixed to this Lease are a part hereof.

B. Waiver. The waiver by LESSOR or any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition on any subsequent breach of the same or any other term, covenant or condition herein contained. The subsequent acceptance of rent hereunder by LESSOR shall not be deemed to be a waiver of any preceding breach by LESSEE of any term, covenant or condition of this Lease, other than the failure of the LESSEE to pay the particular rental so accepted, regardless of LESSOR’S knowledge of such preceding breach at the time of the acceptance of such rent.

C. Notices. All notices and demands which may or are to be required or permitted to be given by either party to the other hereunder shall be in writing. All notices and demands by the LESSOR to the LESSEE shall be sent by United States mail, postage prepaid, addressed to the LESSEE at the premises, or to such other place as LESSEE may from time to time designated in a notice to the LESSOR. All notices and demands by the LESSEE to the LESSOR shall be sent by United States mail, postage prepaid, addressed to the City of Cotati, City Manager, 201 W. Sierra Avenue, Cotati, California 94931-4217, or to such other person or place as the LESSOR may from time to time designate in a notice to the LESSEE.

D. Joint Obligation. If there be more than one LESSEE the obligations hereunder imposed upon LESSEE shall be joint and several. 313 of 437
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17 E. Marginal Headings. The marginal headings and paragraph titles to the paragraphs of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof.

F. Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor.

G. Successors and Assigns. The covenants and conditions herein contained subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators and assigns of the parties hereto.

H. Recordation. A short form memorandum of this Lease shall be recorded immediately after its execution.

I. Quiet Possession. Upon LESSEE paying the rent reserved hereunder and observing and performing all of the covenants, conditions and provisions on LESSEE’S part to be observed and performed hereunder, LESSEE shall have quiet possession of the premises for the entire term hereof, subject to all of the provisions of this Lease.

J. Late Charges. LESSEE hereby acknowledges that late payment by LESSEE to LESSOR of rent or other sums due hereunder will cause LESSOR to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.

Such costs include, but are not limited to, processing and accounting charges. Accordingly, if any installment of rent or of a sum due from LESSEE shall not be received by LESSOR or LESSOR’S designee within five (5) days after said amount is due, then LESSEE shall pay to LESSOR a late charge equal to twelve (12%) percent of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the cost the LESSOR will incur by reason of the late payment by LESSEE. Acceptance of such late charge by the LESSOR shall in no event constitute a waiver of LESSEE’S default with respect to such overdue amount, nor prevent LESSOR from exercising any of the other rights and remedies granted hereunder.

K. Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provision of this Lease may be amended or added to except by an agreement in writing signed by the parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both parties.

L. Inability to Perform. This Lease and the obligations of the LESSOR hereunder shall not be affected or impaired because the LESSOR is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the LESSOR.

M. Attorney’s fees. In the event of any action or proceeding, including arbitration, brought by either party against the other under this Lease, the prevailing party shall be entitled to recover all costs and expenses, including the fees of its attorneys in such action or proceeding in such amount as the court or arbitrator may adjudge reasonable as attorney’s fees. 314 of 437
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18 N. Sale of Premises by LESSOR. In the event of any sale of the premises, LESSOR shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the consummation of such sale, provided that (i) the purchaser or transferee has executed and delivered to LESSEE a written assumption agreement expressly assuming all such covenants and obligations of LESSOR under this Lease, and (ii) a copy of such assumption agreement has been delivered to LESSEE; and the purchaser, at such sale or any subsequent sale of the premises shall be deemed, without any further agreement between the parties or their successors in interest or between the parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the LESSOR under this Lease.

O. Separability. Any provision of this Lease which shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof and such other provision shall remain in full force and effect.

P. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

Q. Choice of Law. This Lease shall be governed by the laws of the State of California.

R. Signs and Auctions. LESSEE shall not place any sign upon the premises or building or conduct any auction thereon without LESSOR’S prior written consent.

S. LESSEE’S Duty to Surrender. At the expiration or earlier termination of the term, LESSEE shall surrender to LESSOR the possession of the premises. Surrender or removal of improvements fixtures, trade fixtures, and improvements shall be as directed in provisions of this Lease on ownership of improvements at termination. LESSEE shall leave the surrendered premises and any other property in good and broom-clean condition except as provided to the contrary in provisions of this Lease on maintenance and repair of improvements.

All property that LESSEE is required to surrender shall become LESSOR’S property at termination of the Lease. All property that LESSEE is not required to surrender but that LESSEE does abandon shall, at LESSOR’S election, become LESSOR’S property at termination.

If LESSEE fails to surrender the premises at the expiration or sooner termination of this Lease, LESSEE shall defend and indemnify LESSOR from all liability and expense resulting from the delay or failure to surrender, including, without limitation, claims made by any succeeding LESSEE founded on or resulting from LESSEE’S failure to surrender.

The parties hereto have executed this Lease on the dates specified immediately adjacent to their respective signatures.
[Signatures Continue on Subsequent Page]
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19 LESSOR/CITY OF COTATI:

By: _____________________________ Date: ______________________________ This Lease was approved by the City Council of the City of Cotati on _______________________, by Resolution No. _____________.

LESSEE/RANCHO ADOBE FIRE PROTECTION DISTRICT:

By: ___________________________ Date: ______________________________ _________________, President
This Lease was approved by the Board of Directors of the Rancho Adobe Fire Protection District on ______________________, by Resolution No. _____________________.

Approved as to form: Approved as to form:
_________________________________ ____________________________________ ___________________, City Attorney _____________________, Attorney for the Rancho Adobe Fire Protection District
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20 Exhibit A
Map of Premises
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21 Exhibit B
Parking Area
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22 Exhibit C
Form of Certificate of Insurance
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Exhibit A - Leased Premises
This map is a user generated static output from an Internet mapping site and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable.
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Notes
Downtown Fire Station, 1 East Cotati
Avenue, Cotati
Legend
0 0.02
Address-NonMail
Hansen
Alt Location
Parcel
Proposed
Retired
City Limits
Lake
River and Creek
Subsurface
Surface or Unknown
Freeways (LE 1200)
Major Roads (LE 1200)
Private Roads (LE 1200)
Park

STATE OR REGIONAL
Community Park
Neighborhood Park
Trail Park
Open Space
Special Purpose Park
Recreational Center Site
Civic Site/ Public Area
Beach
Historic
Public Parcels
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Exhibit B - Parking Area
This map is a user generated static output from an Internet mapping site and is for reference only. Data layers that appear on this map may or may not be accurate, current, or otherwise reliable.
300

0.0 THIS MAP IS NOT TO BE USED FOR NAVIGATION
1:

0.00 Miles
Notes
Exclusive use parking spaces, Lease
paragrpah 5.C
Legend
0 0.01
Address-NonMail
Hansen
Alt Location
Parcel
Proposed
Retired
City Limits
Lake
River and Creek
Subsurface
Surface or Unknown
Freeways (LE 1200)
Major Roads (LE 1200)
Private Roads (LE 1200)
Park

STATE OR REGIONAL
Community Park
Neighborhood Park
Trail Park
Open Space
Special Purpose Park
Recreational Center Site
Civic Site/ Public Area
Beach
Historic
Public Parcels
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EVIDENCE OF COVERAGE & ADDITIONAL COVERED PARTY
This Evidence of Coverage is used as a ma4er of informa5on only and confers no rights upon the Cer5ficate Holder. This Evidence of Coverage does not amend, extend, or alter the coverage afforded by the memoranda listed below.

DATE (MM/DD/YYYY)
JPA MEMBER (Covered Party)

TYPE OF COVERAGE ADDL

INSR LIMIT OF LIABILITY / COVERAGE
Re: EVIDENCE OF COVERAGE & ADDITIONAL COVERED PARTY ENDORSEMENT AS REQUIRED BY AGREEMENT OR CONTRACT

ADDITIONAL COVERED PARTY
CIRA EOC ACP (07/2021)

CANCELLATION
Should any of the above coverages for the Covered Party be changed or withdrawn prior to the expira5on date issued above, JPA will mail 30 days wri4en no5ce to the Cer5ficate Holder, but failure to mail such no5ce shall impose no obliga5on or liability of any kind upon JPA, its agents, or representa5ves.

AUTHORIZED REPRESENTATIVE:

EXPIRATION
12:01a.m.

CONTACT NAME
PHONE
EMAIL

EFFECTIVE
(MM/DD/YYYY) MEMORANDUM NUMBER (MOC)
CERTIFICATE NUMBER:

GENERAL LIABILITY $
$

PER OCCURRENCE GROUP SELF-INSURANCE
Public Errors & Omissions SELF-INSURED RETENTION
The JPA Member (Covered Party) named above par5cipates in CIRA, the California Intergovernmental Risk Authority (JPA). As such, it is collec5vely and permissibly self-insured under Sec5ons 990.4 and 990.8 of the California Government Code.

This is to cer5fy that the CIRA Memorandum of Coverages evidenced below have been issued to the Covered Party for the period indicated. The coverage is in effect and is provided through par5cipa5on in a risk sharing joint powers authority. Notwithstanding any requirement, term, or condi5on of any contract or other document with respect to which this Evidence of Coverage may be used or may pertain, the coverages afforded by the Memorandum of Coverages described herein are subject to all the terms, exclusions, and condi5ons of such Memorandum of Coverages.

Bodily Injury / Property Damage
Personal Injury
Auto Liability
$
WORKER’S COMPENSATION PER OCCURRENCE GROUP SELF-INSURANCE $ Employer’s Liability SELF-INSURED RETENTION
N/A
916-927-7727
[email protected]
7/1/2025
✓ CIRA GL# 2025/26 7/1/2025 7/1/2026
CIRA Memorandum Dept.

Amy Northam
California Intergovernmental Risk Authority (CIRA)
2330 E. Bidwell Street, Ste. 150
Folsom, CA 95630
1,000,000
✓ CIRA WC# 2025/26 7/1/2025 7/1/2026 500,000
County of Sonoma, its officers, agents, and
employees
Attn: DHS - Contract & Board Item Development Unit
1450 Neotomas Avenue, Suite 200
Santa Rosa CA 95405
Agreement No: 2022-1047-A00
of the Agreement.

As respects to Agreement for Services between the City of Cotati and the County of Sonoma for the City's to provide services as outlined in Exhibit A City of Cotati
201 West Sierra Ave.

Cotati CA 94931-4217
✓
86076427
5,000
5,000
86076427 | 25/26 GL WC | Alexandra Avila | 7/1/2025 1:41:59 PM (PDT) | Page 1 of 2 This certificate cancels and supersedes ALL previously issued certificates.

FORM SAMPLE
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ADDITIONAL COVERED PARTY ENDORSEMENT DATE (MM/DD/YYYY)
JOINT POWERS AUTHORITY (JPA) JPA MEMBER (Covered Party)

CONDITIONS OF THIS ADDITIONAL COVERED PARTY ENDORSEMENT

ADDITIONAL COVERED PARTY
CIRA EOC ACP ENDORSEMENT (07/2021)

CANCELLATION
Coverage is in effect as stated above and will not be cancelled except upon 30 days’ wriKen noLce to the AddiLonal Covered Party.

CERTIFICATE NUMBER:

The coverage afforded to the Addi$onal Covered Party as described on the CerLficate of Coverage is subject to all terms, exclusions, condiLons, definiLons, and other provisions of the California Intergovernmental Risk Authority’s Liability Memorandum of Coverage.

Coverage is afforded hereunder only to the extent the Covered Party is required by agreement or contract to name the Cer$ficate Holder as Addi$onal Covered Party.

If the Covered Party is required by agreement or contract to name the Cer$ficate Holder as an Addi$onal Covered Party and the agreement or contract requires the coverage provided to the Addi$onal Covered Party to be primary, then the coverage provided by this endorsement shall be primary. In all other events, if collecLble insurance with any insurer, coverage with any other joint powers authority or other self-funding mechanism is available to the Addi$onal Covered Party covering a loss to which the CIRA Memorandum of Coverage applies (whether on a primary, excess or conLngent basis), the coverage provided by this endorsement shall be in excess of, and shall not contribute with such other insurance or coverage; provided, however, that this clause does not apply with respect to excess insurance or coverage purchased specifically to be in excess of such Memorandum.

This Endorsement does not apply to liability arising out of the sole or acLve negligence of the AddiLonal Covered Party named. Also, the AddiLonal Covered Party is not covered for Claims by another Covered Party.

Effec$ve Date: Expira$on Date: 07/01/2025 at 07/01/2026 12:01a.m.

California Intergovernmental Risk Authority (CIRA)
2330 E. Bidwell Street, Ste. 150
Folsom, CA 95630
City of Cotati
County of Sonoma, its officers, agents, and
employees
Attn: DHS - Contract & Board Item Development Unit
1450 Neotomas Avenue, Suite 200
Santa Rosa CA 95405
86076427
86076427 | 25/26 GL WC | Alexandra Avila | 7/1/2025 1:41:59 PM (PDT) | Page 2 of 2 This certificate cancels and supersedes ALL previously issued certificates.

FORM SAMPLE
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: APPROVAL OF 2026 COTATI CULTURAL GRANT

AWARDEES
Date: January 27, 2026
Written by: Ashley Wilson, Recreation Manager
Recommendation
It is recommended that the City Council of the City of Cotati adopt a resolution approving the Cotati Cultural Event Small Grant Program awardees for the 2026 cycle year.

Background
In September of 2024, the City Council approved the Cotati Cultural Event Small Grant Program. The purpose of the program is to encourage organizations and groups to host new and multicultural events in Cotati that promote an equitable, compassionate, and healthy community, that honor diversity as a source of strength. This will be the second cycle of the grant program, with a successful first year in 2025.

Analysis/Discussion
For the 2026 grant cycle, the City received five applications. Below are short descriptions of each of the five proposed events.

1. Running Fence Run – 50th Anniversary Art and Music Celebration of Christro’s “Running Fence”, Liberty Cookies, Inc. – This will be a one-mile art walk/fun run from the SMART station to La Plaza Park with stops for interactive history of the Running Fence. A separate marathon, half-marathon, and 10k are planned for Valley Ford at the same time, with buses ferrying runners and spectators from Cotati to the start/finish, and an art festival in La Plaza Park, which will include arts groups and museums hosting exhibits in the park, as well as live entertainment and food vendors. The event host will partner with the Empire Runners Club, other local running clubs, and local arts groups and museums. 324 of 437

2. Afronisian Afresh Live Event, Los Angeles Divisional League – This is a cultural arts event that honors Afronisian people and includes performances such as dancing, drumming, and storytelling, as well as cultural food tasting, learning about Afronisian heritage, and displaying artwork. The event hosts will partner with local vendors, artists, and small businesses. After the first year, the hosts plan to make the event ticketed as part of a way to continue the event.

3. Cotati Hub Film Festival, On Axis Productions – This is a celebration of local filmmaking and content creators that brings together filmmakers, artists, and neighbors to showcase original shorts, documentaries, animation, and creative experiments. There will be spotlights on underrepresented voices and inclusive screenings in La Plaza Park, and will bring films in from all ages, orientations, and walks of life. The goal is to get the community to enjoy films together instead of watching on the phone or binge watching alone at home.

4. Cultural Cinco De Mayo Festival, Rotary Club of Rancho Cotati – This event will have the theme “United for Good” and will unite local residents and visitors for a day of Latin culture, friendships, and fun in support of the Rotary Club’s mission to bring together people, community leaders, and organizations. The event will include food vendors, nonprofit organizations and businesses with booths, live music, family entertainment, children’s activities, and more. The hosts will use local volunteers with prior Cinco de Mayo festival event experience and Rotary members to work the event and will partner with Cotati and other local businesses to provide food and vendor booths during the event.

5. The Circle Exchange: Native Plant, Food, and Wisdom Sharing, Native Americans in Higher Education and Mentorship – This event is a free community event that is designed to foster resilience, education, and intergenerational connection for Native American families and individuals. The host plans to offer support to Native American college students with mentorship sessions, plant exchange using a barter system, and a free native food table. The event would be run by up to 5 core volunteers and would be set up to serve approximately 100 participants.

All applications were reviewed by a staff committee. Scoring was based on the following criteria:
- Creativity – Uses imagination and innovation to create a new, different, and/or unique and memorable experience for attendees.
- Diversity – Highlights the culture of one or more ethnic groups or communities of interest. - Inclusivity/Access – Increases access to music, arts, history, culture, or heritage, for people who may not feel included in community life, including low-income residents, people with disabilities, and other special populations.
- Feasibility – The event can be delivered with the available resources, time, and skills, as proposed in the application.
- Sustainability – The event will continue past the grant period. - Promotes Community Togetherness/Broad Community Appeal - Cotati Local Resident/Business Owner
Based on the criteria and quality of applications, the City recommends awarding two applicants for the 2025 grant cycle, each with a $5,000 award. The recommendation is to award On Axis Productions to host their proposed Cotati Hub Film Festival event and the Rotary Club of 325 of 437
Rancho Cotati to host their Cultural Cinco De Mayo Festival event.

On Axis Productions would bring a brand-new event to Cotati, with a focus on celebrating and uplifting creators from all backgrounds and providing exposure for the community to local artists. Their intention is to continue the event after the grant cycle has ended and grow the festival into a Cotati signature event, to include workshops, panel discussions, and mentorships.

They have run film festivals throughout the west coast for many years and are looking forward to bringing one to their own town and community in Cotati. Given their film festival and event production experience, this applicant is well equipped to host a successful, safe, and enriching event in Cotati.

The Rotary Club of Rancho Cotati would also bring a new event to Cotati, designed to honor and promote Latino traditions within the community through a family friendly celebration that highlights the rich heritage of Cinco de Mayo, fostering cultural appreciation and understanding, while also in support of the Rotary Club’s mission to bring together people, community leaders, and local organizations. The event is planned to be offered annually, with fundraising efforts throughout the year to support the event. The applicant requested $8,000 on the application but is able to produce the event at the same level proposed with $5,000. The event will be produced by club members and volunteers, eliminating staff costs. Given their connection with many local businesses and organizations, their experience with hosting events and working with volunteers, and their drive to bring the community together, awarding this applicant will provide the support needed to create a meaningful and impactful annual event in La Plaza Park.

Each event will come back to the City Council at a later date for approval of the special event permits, including any street closures, sales, fee waivers, or other requests.

Financial Considerations
The financial considerations for the Cotati Cultural Event Small Grant Program awardees total $10,000, which was approved in the FY 2025/26 budget and is funded through the City Council Annual Contributions budget within the General Fund. In addition, a budget adjustment is required to roll forward $5,000 in cultural grant funds that were originally budgeted in FY 2024/25 but were not expended due to the timing of the Día de los Muertos event, which occurred in September 2025 (FY 2025/26), but was awarded in January 2025 (FY 2024/25).

For FY 2025/26, upon approval of the cultural events, the awarded funds will be encumbered as a future liability of the City to ensure that anticipated expenditures are properly reflected in the fiscal year in which the awards are made. Accordingly, staff has provided a proposed budget amendment for FY 2025/26 to include the $5,000 in rolled-forward funds from the prior fiscal year that was already expended in this fiscal year for the Dia de Los Muertos event. The net effect is that it will leave the original $10,000 budgeted in FY 25-26 available for award in this round. No additional General Fund appropriation is required.

Environmental Issues
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This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
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RESOLUTION NO. (XX)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COTATI
APPROVING THE 2026 COTATI CULTURAL EVENT SMALL GRANT

AWARDEES
WHEREAS, the City of Cotati has a desire to bring more multicultural events to Cotati; and
WHEREAS, the City of Cotati approved the Cotati Cultural Event Small Grant Program in September 2024; and
WHEREAS, five completed applications were received for the 2026 grant cycle year; and
WHEREAS, two applications were identified by the review committee as the highest rated and best suited to be selected as awardees; and
WHEREAS, the two events selected to receive five thousand dollars each in grant funds are On Axis Productions and the Rotary Club of Rancho Cotati; and WHEREAS, the City Council finds that awarding grants to these events are part of a comprehensive economic development strategy in that new multicultural events may increase visitation to the City, promote the Cotati community and result in increased sales tax revenues; and
WHEREAS, the City Council further finds that the health, safety, and welfare of the citizens of the City of Cotati will not be jeopardized by the approval of these grant awards; and WHEREAS, the applications for this program are attached as Exhibit A; and WHEREAS, the scoring rubric for this program is attached as Exhibit B; and WHEREAS, the scoring rubric for the applications for this program are attached as Exhibit C; and
WHEREAS, a portion of the funding for the Cotati Cultural Event Small Grant Program requires a budget amendment to roll forward five thousand dollars ($5,000) that was originally budgeted in fiscal year 2024/25 but not expended due to the timing of a cultural event occurring in fiscal year 2025/26, and staff has prepared a proposed FY 2025/26 budget adjustment to reflect the use of these funds and to ensure the approved grant awards are properly encumbered in the fiscal year of the award; and
WHEREAS, the action of approving a Cultural Events Grant program does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.

NOW THEREFORE BE IT RESOLVED, that
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Section 1. Findings. The above recitals are declared to be true and correct and are incorporated herein as findings of the City Council.

Section 2. Approvals. The Cotati Cultural Small Grant Program recipients for the 2025 cycle will be On Axis Productions and the Rotary Club of Rancho Cotati, with grants of five thousand ($5,000) dollars awarded to each organization.

Section 3. Budget Amendment. The City Council hereby approves a budget amendment for fiscal year 2025/26 to roll forward five thousand dollars ($5,000) in Cotati Cultural Event Small Grant Program funds that were originally budgeted in fiscal year 2024/25 but not expended due to the timing of an approved cultural event occurring in fiscal year 2025/26.

Section 4. Effective Date of this Resolution. This Resolution shall become effective immediately.

Section 5. Severability. Each portion of this resolution is severable. Should any portion of this resolution be adjudged to be invalid and unenforceable by a body of competent jurisdiction, then the remaining resolution portions shall be and continue in full force and effect, except as to those resolution portions that have been adjudged invalid. The City Council of the City of Cotati hereby declares that it would have adopted this resolution and each section, subsection, clause, sentence, phrase and other portion thereof, irrespective of the fact that one or more section, subsection, clause, sentence, phrase, or other portion may be held invalid or unconstitutional.

IT IS HEREBY CERTIFIED that the foregoing resolution was duly adopted at a regular meeting of the City Council of the City of Cotati held on January 27, 2026, by the following vote, to wit:

Approved:___________________________
Mayor
Attest:______________________________
Kevin Patterson, City Clerk
Approved as to form:______________________________
City Attorney
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2 EXEMPLARY
(7-10 POINTS)
1 ADEQUATE
(4-6 POINTS)
0 INSUFFCIENT
(0-3 POINTS)

COMMENTS
The proposal presents an
innovative and original
concept that is new to
Cotati.

The proposed event is new
to Cotati but has been
hosted in nearby
communities.

The proposal presents an
event that is similar to
existing events or is an
existing event.

The application exceptional
diversity, engaging multiple
cultural, ethnic, and/or
social groups and reflects a
broad and accurate
representation of various
cultural perspectives.

The proposed event
involves some engagement
with different ethnic,
cultural, and/or social
groups but could include
more or is not
comprehensive in the
application.

The proposed event lacks
clear effort to include
diverse groups and shows
minimal to no
representation of diverse
cultural perspectives.

The application leaves no
question as to how activities
will be adapted when
appropriate to create an
inclusive environment for all
populations, including those
with specific disabilities and
limitations.

The application implies
intent to provide an
inclusive environment for
all populations, but does
not clearly articulate the
specifics about adaptations
to be employed.

The application includes
few or no plans to adapt
activities to create an
inclusive environment.

Personnel, event activities
timeline, and budget
expenditures congruent
with project description and
outcomes.

Deficiencies or
overestimations exist in
personnel, timeline, or
budget within tolerable
range, outcomes appear
achievable despite gaps or
leaps.

Insufficient information
about personnel, event
activities timeline, or
budget expenditures to
gauge feasibility.

Applicant

CRITERION

CREATIVITY - USES

IMAGINATION AND

INNOVATION TO CREATE A

NEW, DIFFERENT, AND/OR

UNIQUE AND MEMORABLE

EVENT EXPERIENCE FOR
ATTENDEES (10PTS)

DIVERSITY -

HIGHLIGHTS THE

CULTURE OF ONE OR

MORE PARTICULAR

ETHNIC GROUPS OR

COMMUNITIES OF
INTEREST. (10PTS)

INCLUSVITY /ACCESS -

INCREASES ACCESS TO MUSIC,

ARTS, HISTORY, CULTURE, OR

HERITAGE, FOR PEOPLE WHO

MAY NOT FEEL INCLUDED IN

COMMUNITY LIFE, INCLUDING

LOW INCOME RESIDENTS,

PEOPLE WITH DISABILITIES

AND OTHER SPECIAL
POPULATIONS. (10PTS)

FEASABILITY - THE

EVENT CAN BE

DELIVERED WITH THE

AVAILABLE RESOURCES,

TIME, AND SKILLS, AS

PROPOSED IN THE
APPLICATION (10PTS)

COTATI CULTURAL GRANT SCORING RUBRIC
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2 EXEMPLARY
(7-10 POINTS)
1 ADEQUATE
(4-6 POINTS)
0 INSUFFCIENT
(0-3 POINTS)

COMMENTS
Evidence presented that
event or its impact can be
sustained locally beyond
grant period, if results
warrant.

Event plan is temporary,
designed to end when
grant ends, or some effort
to secure commitment
beyond grant period is
represented.

No meaningful plans for
future event beyond
funding term appear in
application.

The event proposes high
engagement and
encourages widespread
community participation
and addresses critical
needs or interests of the
community.

Proposed community
engagement is limited with
moderate participation and
has some relevance but
may not fully align with
community needs or
interests.

The proposal shows low
levels of community
engagement and
participation or shows
minimal relevance to
community needs or
interests.

The applicant lives in or
has a business in Cotati.

The applicant lives in or
has a business in Sonoma
County.

The application does not
live in or have a business in
Sonoma County.

Applicant

CRITERION

SUSTAINABILITY -

THE EVENT WILL

CONTINUE PAST THE

GRANT PERIOD
(10PTS)

PROMOTES

COMMUNITY

TOGETHERNESS/
BROAD

COMMUNITY
APPEAL (10PTS)

COTATI LOCAL

RESIDENT/BUSINESS
OWNER (10PTS)

TOTAL SCORES

COTATI CULTURAL GRANT SCORING RUBRIC
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1/23/2026 5:12:31 PM Page 1 of 3
Budget Adjustment Register
Cotati, CA Adjustment Detail
Packet: GLPKT14095 - Cultural Grant Budget Rollforward from FY 2024/25
Adjustment Number Budget Code Description Adjustment Date BA0000079 Adopted Budget for FY 2025… Cultural Grant Event 1/27/2026 Rollforward of $5,000 in cultural grant budget from fiscal year 2024/25 for Dia de Los Muertos Event. Amount was awarded in Fiscal Year 2024/25 but expended in 2025/26.

Summary Description:

Account Number Account Name Adjustment Description Before Adjustment After 101-10-81150-000000 CONTRIBUTIONS Cultural Grant Event - Rollforward from FY 24/… 25,000.00 5,000.00 30,000.00 September: 5,000.00
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Budget Adjustment Register Packet: GLPKT14095 - Cultural Grant Budget Rollforward from FY 2024/25 1/23/2026 5:12:31 PM Page 2 of 3
Budget Budget Description Account Account Description After Budget Code Summary
Before Adjustment
2025-2026 Adopted Budget for FY 20… 101-10-81150-000000 CONTRIBUTIONS 25,000.00 5,000.00 30,000.00 2025-2026 Total: 25,000.00 5,000.00 30,000.00
Grand Total: 25,000.00 5,000.00 30,000.00
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Budget Adjustment Register Packet: GLPKT14095 - Cultural Grant Budget Rollforward from FY 2024/25 1/23/2026 5:12:31 PM Page 3 of 3
Fund After
Fund Summary
Before Adjustment
Budget Code:2025-2026 - Adopted Budget for FY 2025/26 Fiscal: 2025-2026 101 25,000.00 5,000.00 30,000.00
Budget Code 2025-2026 Total: 25,000.00 5,000.00 30,000.00 Grand Total: 25,000.00 5,000.00 30,000.00
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: FOOD AND MOBILE BUSINESS ORDINANCE WORKSHOP
Date: January 27, 2026
Written by: Autumn Buss, Associate Planner
Recommendation
It is recommended that the City Council receive a staff report and conduct a workshop on potential code updates associated with food and mobile businesses.

Background
The goal of this workshop is to allow the City Council to discuss and provide direction to staff on potential standards to regulate sidewalk vendors, food trucks, and other food-related and outdoor businesses. These standards would be incorporated into an ordinance to amend the City’s land use code, to be considered by the Planning Commission and City Council at a later date. Adopting updated standards and policies can help the City to manage food, outdoor, and mobile businesses more advantageously in terms of economic development, management of impacts, efficient approvals, and effective enforcement. In addition, City standards should be updated in order to comply with State law related to sidewalk vending and Microenterprise Home Kitchen Operations (MEHKOs).

This workshop follows up on an informational presentation on small-scale food and retail businesses to the Council in January 2025. The staff report for that presentation is included as Attachment A for further background on MEHKOs, sidewalk vendors, food trucks, cottage food operations, parklets, and urban agriculture, and associated State and local regulations.

The Planning Commission also held a workshop on this topic at its January 20, 2026 meeting. 374 of 437
Analysis/Discussion
Sidewalk Vending
Sidewalk vending of food and merchandise is broadly permitted by State law, with little opportunity for local regulation. Sidewalk vendors may make sales from a pushcart, stand, wagon, or other nonmotorized conveyance, or from their person, and they may be roaming or stationary. Note that by this definition, sidewalk vendors are distinct from food trucks. State law requires that sidewalk vendors be allowed to operate on public sidewalks and pedestrian paths, including public parks. Further, the law stipulates that sidewalk vendors do not need permission to operate from adjacent private property owners.

Jurisdictions are allowed by State law to adopt a “program” that places limited location and operational standards on sidewalk vendors to ensure community health, safety, and welfare.

Accordingly, in early 2025 the City adopted informal guidelines to control sidewalk vending, included as Attachment B to this report. However, State law requires that a local jurisdiction go further and adopt an ordinance in order to do the following:
• Limit operating hours (may not be unduly restrictive; in nonresidential areas must be similar to any restrictions placed on other businesses on the same street) • Require maintenance of sanitary conditions
• Require compliance with ADA and other accessibility standards • Require a business license or sidewalk vending permit • Require a California seller’s permit
• Cite, fine, or prosecute a sidewalk vendor for violation of regulations Since the above issues are significant in terms of reducing the potential impacts of sidewalk vending on the community, staff recommends adoption of an ordinance setting forth specific standards, within the limits of State law, as being in the city’s best interest.

Following are standards that the Council may wish to consider for inclusion in an ordinance regulating sidewalk vending:

1. Require City business license and County health permit and/or State seller’s permit, as applicable.

2. Location requirements:
a. No operation on private property, roadways, or landscaped areas b. No blocking sidewalks
c. Maintain ADA/accessibility
d. Stationary vendors prohibited in residential-only zoning districts (Rural Residential (RR) and Residential Very Low (RVL))
e. Maintain distance from street furniture, intersections, events and farmers’ market, building entrances, other sidewalk vendors, etc. as determined by health, safety, 375 of 437
and welfare concerns identified in consultation with City departments and Rancho Adobe Fire District.

3. Operating standards:
a. Hours of operation
i. Residential zoning districts 8:00am to 30 minutes before sunset ii. Other districts 7:00am to11:00 pm
b. Maintain a clean, litter-free area; immediately clean up food/fluid spills c. Operation must be self-contained and limited to 25 square feet in area d. Must meet performance standards for noise, odor, or other potential nuisances e. Stationary vendors must have permission to use a restroom located within 200 feet if staying in one location for an hour or more.
f. Roaming vendors may stop only when conducting a sale; after finishing a sale must move at least 200 feet before stopping again; must not return to the same location for at least 6 hours.
g. Limits on size and type of signage (no flashing/blinking lights) h. May not provide dining area, furniture, or cover for customers i. Cart or other conveyance may not be motorized (including electric) j. Must adhere to City’s polysterene ban
k. Other specific standards as determined by health, safety, and welfare concerns identified in consultation with City departments and Rancho Adobe Fire District.

4. Although State law does allow cities to require that sidewalk vendors obtain a sidewalk vending permit, this may require a level of additional administration that strains current staffing levels in Cotati. Adopting specific location and operating standards as described above, and pursuing enforcement against those vendors that do not comply to the standards, may be more efficient.

Microenterprise Home Kitchen Operations (MEHKOs)
MEHKOs are another business type that is allowed by State law with limited local jurisdiction authority to regulate. In early 2025, the County of Sonoma adopted an ordinance, utilizing State law, that requires every jurisdiction in the County allow MEHKOs in any residential use. Almost all review and enforcement authority over MEHKOs is held by Sonoma County Environmental Health. Local land use and zoning standards may not be applied to a MEHKO, although nuisance standards may be enforced.

Sonoma County Environmental Health has convened a monthly meeting of city and County staff to discuss issues arising from MEHKOs and unpermitted food vendors as well as enforcement.

To date, extremely few MEHKOs have been established in Sonoma County in spite of the County’s ordinance, and no problems have come to light.

Although it is not necessary for the City to address MEHKOs in the land use code, it may be 376 of 437
helpful to add them to the code to clarify their status. The City Council may consider the following:

1. Define MEHKOs in the land use code and specify that they are allowed by-right in any residential use.

2. Clarify that MEHKOs are subject to City nuisance regulations, the Sonoma County code and State law.

3. Exempt MEHKOs from the City’s home occupation standards, as these may not legally be applied.

Food Trucks
Unlike sidewalk vendors and MEHKOs, the City has full authority to regulate the operation of food trucks (although a health permit is also required from the County of Sonoma). Cotati’s land use code currently does not identify food trucks as a land use and only allows food trucks on private properties with restaurants with which the food truck is associated (as an extension of the restaurant use), or under the auspices of a special event or limited term permit. However, the potential for food trucks to create economic opportunity, augment consumer culinary choices, and enliven commercial areas indicates that it may be advantageous for Cotati to consider broadening its standards. The 2022 study “Food Truck Truth,” referenced in Attachment A, found significant community and economic benefits from food trucks.

Following are standards the Council may wish to consider for inclusion in an ordinance related to food trucks:

1. Define “food trucks” as self-contained motorized vehicles as well as trailers and wagons towed by motorized vehicles.

2. Require a City business license and County health permit.

3. Allow food trucks to operate on any property that is zoned commercial, industrial, or specific plan (Downtown, Transit-Oriented, Santero Way) a. Allow by-right (zoning clearance only) in compliance with specific operating standards
b. Require a Minor Use Permit (MUP) if property abuts a residential use, in the DSP Historic Core (HC), or for multiple trucks operating on a property simultaneously (such as a food truck park)
c. Allow a food truck(s) on a property with any other type of brick-and-mortar business
d. Consider allowing food trucks on vacant properties as well. 377 of 437

4. Consider allowing food trucks to provide modest outdoor dining areas a. As a permanent installation, possibly with a MUP
b. Alternatively, require removal nightly

5. Specific operating standards could include the following:
a. Maintain clean and litter-free conditions
b. Provide trash cans for customers
c. No nuisance noise or smells
d. Comply with polysterene ban
e. Remove truck and all equipment at end of each day (option to allow exceptions with a MUP)
f. Signage limits
g. Prevent spills, rinse water, etc. from getting into storm drains or public ROW h. Maintain minimum parking for primary use on site
i. Do not block access to primary use or emergency access to property j. Operate only between 7:00am and 11:00pm (consistent with typical commercial hours limit in city).
k. Other specific standards as determined by health, safety, and welfare concerns identified in consultation with City departments and Rancho Adobe Fire District.

6. Food trucks are currently not allowed to operate on public streets (ie, from the curb); staff doesn’t recommend that this be changed at this time.

Parklets and Outdoor Dining
The City introduced a process and guidelines for parklets associated with restaurants in 2023, following the removal of Covid-era tent parklets. Parklets guidelines are not part of the City code but rather have been developed with input from multiple City departments and are updated as needed from time to time. The City’s land use code has very little detail regarding outdoor dining standards, and consequently, outdoor dining guidelines have been developed and paired with the parklets guidelines.

Restaurant business interest in parklets has been minimal so far. One parklet has been installed, at the Flagship Taproom, but is not currently in use as Flagship closed some months ago. It is possible that the cost of installing a permanent, or “developed parklet,” which requires railings, raised decking where a curb is present, and traffic barriers as well as a building permit, is prohibitive. For this reason, staff have been willing to consider “temporary parklets” which are in place for one day only and involve minimal infrastructure. To date, one business—Sal’s Pizzeria—has taken advantage of this option. This option has not been promoted, however, and it is possible that more businesses may be interested.

Staff would like feedback from the Council on potential expansion of the temporary parklet concept in the following ways:
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1. Allow food trucks to occupy temporary parklets, by invitation of an adjacent “host” business and with City approval

2. Allow small food carts and other small-scale food operations to occupy temporary parklets. Again, this would be by invitation of an adjacent “host” business and with City approval, and a County health permit would be required.

3. Allow any type of business to host a temporary parklet, rather than limiting this option to food- and beverage-serving businesses. (Any business serving alcohol would be required to also serve food to the parklet, and to have Alcoholic Beverage Control (ABC) approval.)

4. Set limits for operation to minimize potential impacts:
a. Total number of days per year—40 for example
b. Maximum number of consecutive days of operation—3 would allow for weekend operation
c. Minimum number of days between operation—4, for example

5. City approval and general adherence with permanent parklets standards, modified for temporary nature of the parklet, would be required.

Outdoor Dining When Property Abuts a Residential Use
The City’s land use code allows outdoor dining by-right for permitted restaurants and other foodand beverage-serving businesses. The exception to this is when the subject dining area is on a private property abutting a residential use in the Downtown Commercial (CD), Downtown Specific Plan (DSP), (TOC), and (SW). In these zones, a Minor Use Permit (MUP) is required, to allow for notification of occupants and owners of nearby properties, public input, and additional staff review of the proposal.

Note that this requirement applies only to private property. Outdoor dining on public property requires a license agreement and goes through a different staff-level review process than a land use approval such as a MUP.

Staff wishes to confirm the Council’s commitment to applying the MUP requirement in these zoning districts, for dining areas abutting residential properties and/or uses. The expense, time, and uncertainty involved in obtaining a MUP may be a deterrent to restaurants considering installing outdoor dining in these mixed-use zones. For this reason, it may be worth additional consideration. Any proposed changes could be included in a potential ordinance addressing sidewalk vendors, MEHKOs, and/or food trucks.
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Other Potential Code Updates
Staff have identified several inconsistencies in the land use code that impact food-related uses and activities. The Council may wish to address these in an upcoming code amendment ordinance.

1. Chicken-keeping: Current code language states that chicken-keeping must be accessory to a residential use and is allowed in any residential or commercial zoning district.

However, as residential uses occur in zoning districts that are categorized as “mixed use” and “specific plan,” it may be useful to clarify that chicken-keeping is permitted in residential uses in any zoning district where residential may occur. Existing standards for chicken-keeping are intended to minimize impacts on adjacent uses.

2. Market gardens and garden stands:
a. Similar to chicken-keeping, the market garden and garden stand land uses may only occur accessory to a residential use according to the code, and standards are in place to minimize impacts. However, the land use tables in the code only list market gardens and garden stands as allowed (by-right) in the residential zoning districts, while residential uses are permitted in commercial or mixed use zones.

Therefore, it may be beneficial to extend the market garden and garden stand uses to those districts as well.
b. Market gardens and garden stands are not currently addressed in the land use code’s home occupation standards. However, as these activities are allowed accessory to a residential use, it would be useful to include them in the home occupation standards. This would also include allowing these uses to occur outside of the dwelling unit.

3. Community gardens: Community gardens are currently allowed only in residential zoning districts. Given that community gardens are generally most successful when located near multifamily residential, which is allowed in the city’s commercial and mixed use zoning districts, it may be help to allow them in these zones as well. Existing standards for community gardens to minimize impacts on adjacent uses would be extended to all zones.

4. Home occupations: Current code language requires that home occupations occupy only the ground floor of the dwelling. It may be practical to remove this restriction so that a home occupation may occur anywhere in the dwelling. The standard sets forth a limit of 25% of the dwelling’s floor area for a home occupation, which could still apply. 380 of 437
Financial Considerations
Other than the staff time required to prepare this report and potentially to prepare a draft ordinance for Planning Commission and City Council consideration, there are no financial impacts to the City related to this item.

Environmental Issues
This agenda item is not a project and, pursuant to Section 15168 of the CEQA Guidelines, as such no further environmental review is required.
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Cotati City Council
Agenda Staff Report
Item type: REGULAR AGENDA (ACTION)
To: City Council
Subject: UPDATE ON LAWS AND POLICIES THAT REGULATE

SMALL-SCALE FOOD AND RETAIL BUSINESSES IN COTATI
Date: January 14, 2025
Written by: Autumn Buss, Associate Planner
Recommendation
It is recommended that the City Council receive a report on small-scale food and retail businesses.

This report will provide an overview of current laws and policies at the state and local level that regulate small-scale food and retail businesses, including microenterprise home kitchen operations, sidewalk vendors, cottage food operations, parklets, urban agriculture, and food trucks. Over the past several years there have been a number of regulatory changes that have impacted the way that these types of businesses operate in both the public and private spheres.

This report will also describe actions that the City may consider taking in the future to more effectively integrate these businesses into Cotati’s community fabric.

Microenterprise Home Kitchen Operations (MEHKOs)
MEHKOs are small-scale restaurants operated by a resident in a private home, established by State Assembly Bills 626 (2018) and 377 (2019). The intent of this legislation was to provide more home-based business opportunities to disadvantaged persons and those with limited access to capital, increase community access to healthy food, and increase food safety among existing MEHKOs. State law allows counties to “opt in” to the law to permit MEHKOs locally, and provides the health and safety standards for MEHKOs. On October 22, 2024, the County of Sonoma Board of Supervisors adopted an ordinance to permit MEHKOs in all jurisdictions and unincorporated areas of the county. Cities must comply with this ordinance, which will take effect January 1, 2025.

Under the new ordinance, MEHKOs must be allowed by-right in residential occupancies and 150 of 237 382 of 437
may not be further regulated by local zoning or building regulations. However, the City may require a business license and enforce its existing noise and nuisance standards in MEHKO operations. These include rules related to solid waste disposal, prohibition of polysterene products, loud and unruly gatherings, blocking streets or sidewalks, parking in permitted areas, outdoor lighting, and operating hours. In addition, each MEHKO will require an annual health permit from Sonoma County Environmental Health. See Attachment 1 for a summary of the MEHKO standards set by state law.

The County’s ordinance does not fully address responsibility for regulation and enforcement of MEHKOs within individual jurisdictions. However, Sonoma County Environmental Health plans to convene a working group of city staff early in 2025 to discuss these issues and determine an effective structure for communication and coordination between the County and cities.

Sidewalk Vending
State law created by SB 946 (2018) allows sidewalk vending of food and merchandise on public sidewalks and in parks, subject to certain restrictions. SB 972 (2022) clarified that Compact Mobile Food Operations, which conduct limited food preparation, are also protected as sidewalk vendors. Sidewalk vendors may make sales from a pushcart, stand, wagon, or other nonmotorized conveyance, or from their person, and they may be roaming or stationary. A permit from Sonoma County Environmental Health is required for many vendors selling prepared foods, but under state law, local jurisdictions have little latitude to regulate sidewalk vendors. Some of the standards that a city may enforce without adoption of a related ordinance include limited locational restrictions and caps on the total number of vendors in an area for health, safety, and welfare concerns. Attachment 2 is a summary handout of the regulations that are in effect in Cotati at this time.

Local jurisdictions do have the option to adopt an ordinance to further regulate sidewalk vendors, within significant limits. The ordinance may:
• Refine limits on operation within specific parts of the public right of way, in public parks, or designated neighborhoods or areas, if the restriction is directly related to objective health, safety, and welfare concerns
• Limit operating hours
• Require maintenance of sanitary conditions
• Require a sidewalk vending permit or valid business license • Require a California Department of Tax and Fee Administration seller’s permit • Allow a jurisdiction to cite, fine, or prosecute a sidewalk vendor for violation of regulations.

The City Council may choose to direct staff to pursue an ordinance in the future to further regulate sidewalk vendors.

Cottage Food
The California Homemade Food Act (AB 1616) of 2013 created a new category of food 383 of 437 151 of 237
enterprise in California called a cottage food operation, which allows the use of a home kitchen for processing food for sale to the public. The types of foods that a cottage food operation can sell are limited to “non-potentially hazardous foods,” which are foods that are unlikely to grow harmful bacteria or other toxic microorganisms at room temperature. This includes certain baked goods, candies, dried foods, extracts, certain jams and other preserves, nuts/nut butters, certain mustards and vinegars, honey, and powdered drink mixes. Cottage food operators require a permit from Sonoma County Environmental Health. Cottage food sales may occur directly, from the producer to the consumers at community events or from the home; or indirectly through shops, restaurants, or another third party.

State law requires that local jurisdictions allow a cottage food operation in any residential dwelling, either by 1) classifying it as a permitted use in residential zoning districts, or 2) providing for a nondiscretionary permitting process. Cottage food operations would most likely be considered a “Home Occupation,” a land use which is allowed by CMC Section 17.22.020 as a by-right, permitted use in all residential and mixed-use zoning districts. However, Cotati’s home occupation standards, set forth in CMC Section 17.42.080, were last updated in 2004, predating the state’s cottage food law. Therefore, cottage food is not referenced in that section or elsewhere in the Code. Section 17.42.080 provides sufficient standards to ensure that cottage food operations do not negatively impact neighboring uses. The City Council may wish to amend Section 17.42.080 to specifically add cottage food operations as an allowed home occupation use. The text of Section 17.42.080 can be found in Attachment 3.

Parklets
The City embraced parklets for outdoor dining during the Covid pandemic, and when the shortterm “tent” parklets were removed in 2023, prepared guidelines for the installation and maintenance of permanent parklets. One permanent parklet has been installed, at Flagship Taproom, on parking spaces in a privately owned lot. City staff are considering adding guidelines for temporary parklets that would allow businesses the opportunity to occasionally use public or private parking spaces for outdoor dining without installing an expensive permanent fixture or going through the Limited Term Permit process which is also costly. The City’s current Parklet and Outdoor Dining guidelines are included as Attachment 4.

Garden Stands and Produce Stands
With the adoption of its urban agriculture ordinance in 2022, the City approved garden stands as a permitted use in residential areas, allowing residents to sell produce, eggs, and cottage foods from their gardens at small temporary stands up to three days per week. Produce stands, which may be larger than garden stands and operate up to seven days per week, are allowed with a use permit in the Open Space-Recreation, Rural Residential, and Residential Very Low Density zoning districts.

Food Trucks
Cotati’s Code does not contain any references to food trucks, and currently food trucks are only allowed at an event with a limited term permit or on a private property with a restaurant with 152 of 237 384 of 437
which the food truck is affiliated. This is based on the staff interpretation that food trucks are classified as outdoor dining and addressed in the “Outdoor Displays and Sales” standards in CMC Section 17.42.130(E)(1), which states: “An outdoor dining area may be allowed accessory and incidental to a restaurant with an indoor eating area on the same site.” With the exception of minor amendments included in the urban agriculture ordinance of 2022, Section 17.42.130 was last updated in 2007.

Over the intervening years since 2007, food trucks have become increasingly popular across the U.S. as a tool to incubate small businesses, enliven street scenes, and expand the range of culinary offerings in a community. There is a common concern that food trucks compete with brick-and-mortar restaurants. However, “Food Truck Truth,” a 2022 study by the Institute for Justice, indicates otherwise. The study analyzed 12 years’ worth of data from counties across the U.S., which showed that not only do food trucks not harm restaurants, but that growth in the number of food trucks seems to correlate with growth in the number of restaurants. The study authors posit that food trucks may actually help restaurants, by doing the following:
• Functioning as incubator businesses for entrepreneurs who may go on to open restaurants • Primarily competing with fast food outlets, rather than all restaurants • Allowing brick-and-mortar restaurants to test new markets and products • Increasing foot traffic to an area, which can benefit restaurants • Stoking the fire of innovation and healthy competition The full study is available at: https://ij.org/report/food-truck-truth/.

In addition, the changes described above related to MEHKOs, sidewalk vending, cottage food operations, parklets, and garden/product stands have shifted the small-scale food and retail landscape such that food trucks may now be very complementary to other businesses of this type, particularly in relation to local economic development. For these reasons, the City may wish to consider updating its policies related to food trucks. This might include allowing food trucks on private properties without restaurants and/or in public parking areas. If the City wishes to allow food trucks in a greater range of situations, it can adopt standards to ensure that impacts to businesses and residents are minimized. In addition, all food trucks require a Mobile Food Facility Permit from the County of Sonoma Environmental Health Department.

Summary of Potential Future Actions
As described above, the following are potential future actions that the City might consider to better integrate small-scale food and retail businesses into the community:
• Adopt an ordinance creating additional standards for sidewalk vendors as allowed by state law
• Update CMC Section 17.42.080 to classify cottage food operations as home occupation businesses
• Adopt an ordinance allowing food trucks in a greater range of locations and setting standards for their operations.
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Attachment 1: Summary of MEHKO Standards
• A Microenterprise Home Kitchen (MEHKO) is a small-scale restaurant (dine-in or take-out) operated by a resident in a private home, established by State Assembly Bills 626 (2018) and 377 (2019). The intent of this legislation was to provide more home-based business opportunities to disadvantaged persons and those with limited access to capital, increase community access to healthy food, and increase food safety among existing MEHKOs. State law allows counties to “opt in” to the law to permit MEHKOs locally, and provides the health and safety standards for MEHKOs. • On October 22, 2024, the County of Sonoma Board of Supervisors adopted an ordinance in accordance with state law to permit MEHKOs in all jurisdictions and unincorporated areas of the county. Cities must comply with this ordinance, which will take effect January 1, 2025. • Under the new ordinance, MEHKOs must be allowed by-right in residential occupancies and may not be further regulated by local zoning or building regulations, although locations of MEHKOs must not conflict with the Cotati General Plan. Since all of the land use designations in the General Plan that allow residential also allow “associated neighborhood retail” or are commercial designations, conflict with the General Plan is not likely to be an impediment to permitting a MEHKO. • The City may require a business license and enforce its noise and nuisance standards in MEHKO operations. In addition, each MEHKO will require an annual health permit from Sonoma County Environmental Health, which will include confirmation of City business license and consistency with the General Plan. State law requires that EH be the primary point of contact for MEHKOs for permitting.
• Under the County ordinance and state law, MEHKOs will be subject to the following requirements:
o The operator must be a resident of the private home operating as a MEHKO and hold a food safety manager certification (obtainable through third-party accreditation organization).
o The MEHKO must be the primary residence (second homes, vacation homes, and motor homes do not qualify).
o If the residence is leased or rented, the property owner will be required to approve the use.
o No more than one employee may work in the facility, in addition to family and household members.
o Each individual working in the MEHKO must obtain a food handler card (obtainable through third-party accreditation organization).
o Food must be prepared, cooked, and served the same day. o Food preparation must occur in the kitchen of the residence with no auxiliary kitchens added.
o No outdoor signage or outdoor displays are allowed.
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o Sales will be limited to 30 meals/day or 90 meals/week with gross annual sales limited to $100,000 annually.
o Meals may be consumed on-site, picked up, or delivered by an employee, family member, or household member. Third-party delivery services, catering, resale, and sales from food trucks or carts are prohibited, although online sales are allowed and may be through a third-party intermediary.
o Only one MEHKO is allowed per site, and it cannot operate alongside a Cottage Food operation.
o Permits are non-transferrable.
o A MEHKOs may apply to the California Department of Alcohol Beverage Control (ABC) to provide alcoholic beverage service.
• Enforcement:
o Environmental Health may conduct one routine inspection per 12-month period.

Additional inspections will be scheduled in response to complaints or emergencies. o The City may enforce its existing noise and nuisance ordinances in relation to MEHKO operations.
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Sidewalk Vending in Cotati
State law (SB 946) now allows sidewalk vending of food and merchandise on public sidewalks and in parks, subject to certain restrictions. Sidewalk vendors may prepare food and make sales from a pushcart, stand, wagon, or other nonmotorized conveyance, or from their person, and they may be roaming or stationary.

In Cotati, the following rules apply to sidewalk vendors:
• Vendors may not block the sidewalk; they must maintain a minimum 4 feet clear passing space at all times.
• Stationary sidewalk vendors are prohibited in areas zoned exclusively for residential use (the Rural Residential (RR) and Residential Very Low Density (RVL) zones). • Vendors do not require permission from adjacent property owners or any other private entity to operate on public sidewalks and in public parks.
• Vendors selling prepared food (examples include hot dogs, tamales, shaved ice, fruit cups, pre-cooked corn, popcorn, roasted nuts, and churros) must have and display a current permit from Sonoma County Environmental Health.
• Vendors with less than 25 square feet of display space AND selling only prepackaged food (examples include chips and bottled water) or whole uncooked produce are not required to have health permits. • Vendors stopped at one location for over an hour must have access to a permanently installed restroom within 200 feet.
• Sidewalk vending of alcoholic beverages, cannabis products, tobacco products, or other legally controlled substances is prohibited.
• Sidewalk vendors are required to have and display a Cotati business license. • Sidewalk vendors shall maintain a clean and trash-free 10-foot radius around their stand. • When departing a location used for vending the sidewalk vendor shall remove all trash and debris from the location.
• Sidewalk vendors shall immediately clean up any food, grease, or other fluid or item related to their vending activities that falls onto the sidewalk or other public property. • Vendors must comply with the City of Cotati Noise Ordinance. • Vendors may not operate in the following manner or locations:
oIn any area that serves to provide ADA access
oIn any area blocking access to a business, residence, public facility or street furniture, bike racks, etc. oWithin 100 feet of the Cotati Farmer’s market (when operating) or other City approved events oIn any City park outside of the posted open hours of the park, or if the park has no posted hours, between the hours of 8:00pm and 9:00am
Questions?
Contact Noah Housh, Community Development Director, City of Cotati [email protected] 707-665-3636
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EnvironmentalHealth 625 5th Street, Santa Rosa,CA95404707-565-6565 [email protected] https://sonomacounty.ca.gov/Health/Environmental-Health-and-Safety/ Compact Mobile Food Operations
On September 23, 2022, Governor Newsom signed SB 972, a bill that modifies the California Retail Food Code (CRFC) and allows some sidewalk food vendors to obtain public health permits.

The new law established a new retail food facility, among other changes, and is effective on January 1, 2023.

Compact Mobile Food Operation (CMFO) in section 113831 of the CRFC is defined as a “mobile food facility that operates from an individual or from a push cart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance.”
A CMFO may have non-prepackaged food and conduct limited food preparation with potentially hazardous foods and non-potentially hazardous foods. Examples of menu items that easily fit within limited food preparation include but are not limited to: hot dogs, shaved ice, roasted nuts, popcorn, churros, fruit cups, precooked corn, and tamales. The menu that can be prepared from a CMFO depends on the equipment present on the CMFO.

Before operation begins, a CMFO will need the following:
• Health permit required.
• Commissary which can either be a permitted food facility or a permitted Cottage Food Operation (CFO) Class B. A CFO can serve as a commissary for a maximum of 2 CMFO’s with endorsement from Environmental Health.
• Handwashing is required if there is handling of open food on the CMFO. • Warewashing is required if there is handling of raw meats, raw poultry, or raw fish on the CMFO.
• Mechanical refrigeration is required for cold holding potentially hazardous foods at or below 41°F. Hot-holding unit is required for hot holding potentially hazardous foods at or above 135°F.
• Food handler cards required.
• Potentially hazardous food prepared at an approved facility and served from a CMFO shall be destroyed at the end of the operating day.
• Restroom access if parked at one location for more than 1 hour. • Routine inspection conducted annually.

Exemptions: A health permit and an inspection may not apply for CMFOs that have less than 25 square feet of display space AND sell only non-potentially hazardous prepackaged food or whole uncooked produce.

For more information, please contact Sonoma County Environmental Health at (707) 565- 6565 or visit us at: https://sonomacounty.ca.gov/Health/Environmental-Health-and-Safety/ 157 of 237 389 of 437
Cotati Municipal Code Page 1/2
The Cotati Municipal Code is current through Ordinance 926, passed July 9, 2024.

Attachment 3

17.42.080 Home occupations.

The following standards for home occupations are intended to provide reasonable opportunities for employment within the home, while avoiding changes to the residential character of a dwelling that accommodates a home occupation, or the surrounding neighborhood, where allowed by Chapter 17.22 (Allowable Land Uses) of this title:

A. Business License Required. A home occupation shall require a city business license.

B. Limitations on Use. The following are examples of business activities that may be approved as home occupations, and uses that are prohibited as home occupations:

1. Uses Allowed as Home Occupations. The following and other uses determined by the director to be similar may be approved by the director in compliance with this section:
a. Art and craft work (ceramics, painting, photography, sculpture, etc.); b. Office-only uses, including an office for an architect, attorney, consultant, counselor, doctor, insurance agent, planner, tutor, writer, and electronic commerce; c. Personal trainers and licensed massage therapy and physical therapy; and d. Tailors, sewing.

2. Uses Prohibited as Home Occupations. The following are examples of business activities that are not incidental to or compatible with residential activities, and are, therefore, prohibited as home occupations:
a. Adult entertainment activities/businesses;
b. Animal hospitals and boarding facilities;
c. Auto and other vehicle sales, repair and service (body or mechanical), painting, storage, or upholstery, or the repair, reconditioning, servicing, or manufacture of any vehicle engine, or of any motor vehicle, including automobiles, boats, motorcycles, or trucks;
d. Commercial cabinet or furniture making, and similar uses; e. Contractor’s and other storage yards;
f. Dismantling, junk, or scrap yards;
g. Fitness/health facilities, except those allowed under subsection (B)(1) of this section; h. Medical clinics and laboratories;
i. On-site sales, except that mail order businesses may be allowed where there is no stock-in-trade on the site;
j. Personal services as defined in Article 9 (Glossary), except those allowed under subsection (B)(1) of this section;
k. Transportation services, including ambulance, taxi, limousine, tow truck, etc.; l. Uses which require explosives or highly combustible or toxic materials; m. Welding and machine shop operations;
n. Wood cutting businesses; or
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Cotati Municipal Code Page 2/2
The Cotati Municipal Code is current through Ordinance 926, passed July 9, 2024. o. Other use the director determines to be similar to those listed above.

C. Operating Standards. Home occupations shall comply with all of the following operating standards:

1. Accessory Use. The home occupation shall be clearly secondary to the full-time use of the property as a residence.

2. Location of Home Occupation Activities.
a. RR Zoning District. Allowed home occupation activities may be conducted within an approved accessory structure in the RR zoning district, provided that at least two covered parking spaces are continually maintained.
b. Other Zones. All home occupation activities shall be confined completely to one room within the primary dwelling, which shall not occupy more than twenty-five percent of the gross floor area of the ground level floor. Garages or other enclosed accessory structures shall not be used for home occupation purposes, except for the storage of incidental office supplies, and only if two covered parking spaces are continually maintained. Horticulture activities may be conducted outdoors, but only within the rear one-third of the site.

3. Visibility. The use shall not require any exterior modification to the structure not customarily found in a dwelling, nor shall the home occupation activity be visible from a public right-of-way, or from neighboring residential properties.

4. Signs. There shall be no signs, other than one name plate, not exceeding one square foot in area, and only if attached flush to a wall of the structure.

5. Safety. Activities conducted and equipment or material used shall not change the fire safety or occupancy classifications of the premises. The use shall not employ the storage of explosive, flammable, or hazardous materials beyond those normally associated with a residential use.

6. Off-Site Effects. No home occupation activity shall create dust, electrical interference, fumes, gas, glare, light, noise, odor, smoke, toxic/hazardous materials, vibration, or other hazards or nuisances as determined by the director.

7. Outdoor Display or Storage. There shall be no window display or outdoor storage or display of equipment, materials, or supplies associated with the home occupation.

8. Employees. A home occupation shall have no on-site employees other than full-time residents of the dwelling.

9. Client/Customer Visits. The home occupation shall be operated so as to not require more than twelve vehicle trips per day of clients, customers, and/or visitors to the residence. On-site presence of clients or customers shall be limited to one client or family at a time, and only between the hours of nine a.m. and eight p.m.

10. Deliveries. The home occupation shall not involve the use of commercial vehicles for delivery of materials to or from the premises in a manner different from normal residential usage, except for FedEx, UPS, or USPS-type home pick-ups and deliveries.

11. Motor Vehicles. The motor vehicles used or kept on the premises, except residents’ passenger vehicles, shall comply with the requirements of Section 17.36.130 (Commercial vehicles on private property) of this title.

12. Utility Service Modifications. No utility service to the dwelling shall be modified solely to accommodate a home occupation, other than as required for normal residential use. (Ord. 766 § 2 Exh. A (part), 2004). 159 of 237 391 of 437
Parklet and Outdoor Dining Standards
1 A parklet is a semi-permanent installation to allow outdoor dining on parking spaces, which maybe be public or private. Outdoor dining refers to other situations including sidewalks, plazas, or other open areas, and can also be located on public or private property.

Standards for parklets and outdoor dining are divided into three sections below: Those applicable to both parklets and outdoor dining, applicable to outdoor dining only, and applicable to parklets only. For more information, contact the Community Development Department at 707-665-3636.

A. Standards Applicable to Both Parklets and Outdoor Dining General

1. All installations must receive City evaluation and approval for Planning/Zoning issues, design, accessibility/ADA compliance, and traffic safety, and from the Police Department and Fire Marshall. A Minor Use Permit is required if the installation will abut a residential use.

2. All installations shall require a Building Permit, unless the Community Development Director determines that this requirement may be waived.

3. Any installation on public property will require the subject business to enter into a License Agreement with the City, liability insurance to meet City’s standards, and, in the case of a parklet, payment of an annual fee of $1 per square foot of public property occupied.

Licensee is responsible for the installation, maintenance, and upon termination of License, removal of parklet/outdoor dining and return of the space to its prior condition or better.

4. The property owner’s written permission is required for private property installations.

Design and Building

5. Installations on public property must be located directly in front of the subject business, and the linear space allocated shall generally not exceed the length of the subject business’ street frontage.

6. Furnishings, fencing, railing, and other components shall be constructed primarily of finished wood or metal. No plastic furnishings shall be allowed without City approval.

7. No business names, logos, or advertising shall be allowed on furnishings, umbrellas, fencing, lighting, barricades, diverters, planters, or other components.

8. Any signs proposed will require a Sign Permit.
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2 9. Installations shall not block visibility of nearby businesses, encroach by more than 1/3 into street tree canopies, or block driveways or utilities.

10. No element of installations on public property may penetrate the street or sidewalk surface.

11. Battery- and solar-powered lights are allowed.

12. Electricity may be extended to the installation, with City approval. In general, power cords will be limited to one, and must be run overhead.

13. Gas-powered heating devices may be proposed, but will require City approval. Propane heaters must have a minimum 5’ clearance from flammable materials, and shall not be placed underneath canopies, awnings, umbrellas, or trees. Electric heaters may be used per manufacturer’s safety instructions, if electricity is available.

Safety and Accessibility

14. Any installation must preserve a minimum 4’ unobstructed path of travel along sidewalks.

15. All outdoor dining and parklets must be maintained in a clean, sanitary condition.

16. No chemicals or hazardous substances shall be used in the maintenance of parklets or outdoor dining in such a way that they might run off into the street, gutter, and/or storm drains.

17. The City is not responsible for damage to parklets or outdoor dining from vehicles, routine City maintenance in the public right-of-way, or impacts due to emergency repairs to City utilities and/or street features.

18. Any tables, seats, counters, drink rails, and other amenity provided must include at least one each that is of an accessible/ADA-compliant design.

B. Standards Applicable to Outdoor Dining (Non-Parklet) Only

19. All outdoor dining shall provide a minimum clearance of 5’ around fire hydrants, 3’ around fire department connections on buildings, 2’ from driveways, and 10’ from bus stops, and shall not obstruct curb returns or curb ramps.

20. On public property, market-style shade umbrellas may be used and shall be made of canvas or canvas-like material. A minimum vertical clearance of 7’ is required under umbrellas; maximum height umbrellas of is 9’. Umbrellas must be stored in the closed position during non-operating hours.

21. On private property, semi-permanent covering, trellising, pergolas, and canvas shade cloths or umbrellas are allowed and shall be anchored consistent with manufacturer’s guidelines to withstand windloads, and in a manner acceptable to the City. Reasonable height of roofing/covering and supporting posts shall be as approved by the City, generally a minimum of 7’ and maximum of 10’.
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3 C. Standards Applicable to Parklets Only
General

22. Parklets may only be located on streets with existing on-street parking spaces.

23. Parklets proposed for streets with speed limits of 25 or 30mph will require additional City review; parklets are prohibited on streets with speed limits of 35mph or more.

24. A maximum of two public parking spaces, or three private lot parking spaces, may be occupied by a parklet. Accessible/ADA parking spaces and loading zones may not be used for parklets.

25. A parking evaluation will be performed by the City for parklets proposed on private property to ensure that removal of parking will not adversely impact neighboring businesses or residents.

Safety and Accessibility

26. Parklets shall be located such that the entire parklet area maintains the following clearances:
a. 20’ from an intersection from the approaching direction b. 10’ from an intersection from the exiting direction
c. 10’ from bus stops
d. 5’ from fire hydrants or other fire department connections e. 2’ from any active driveway
f. Access to public utilities shall not be obstructed.
g. Parklets located within 35’ of street intersections may be prohibited or limited in height and area, at the City’s discretion.

27. Parklets shall include minimum safety buffers as follows: 4’ from adjacent parallel parking spaces; 2’ from adjacent diagonal parking spaces or perpendicular parking spaces; 2’ from traffic lanes; and 1’ from bike lanes. Safety buffers will be included in the total parklet footprint area allocated to the business.

28. Traffic safety elements shall be installed per City requirements, at applicant’s expense, and must be located within the total parklet footprint area allocated to the business. a. Traffic barricades or their equivalent will be required on all non-sidewalk sides of a parklet. Potential barricades may include steel stock tank planters, heavy wood planter boxes, or similar objects.
b. Wheel stops will be required for parklets occupying parallel parking spaces. c. Edges and corners of parklets should be marked with yellow high-intensity retroreflective tape or reflectors to be visible to drivers at night. d. The City may require additional safety measures at its discretion.

29. Each parklet shall include a readily visible address for emergency responders. 394 of 437 162 of 237
4 Design and Building

30. Parklets shall be delineated by open fencing or other approved barrier material of 30” to 42” high. Intermittently-placed posts exceeding 42” are allowed to support covering, but should not block clear visibility through the parklet. Fully transparent panels above 42” high to block the wind may be considered.

31. If used, umbrellas shall be made of canvas or canvas-like material, and shall be stored in the closed position when the subject business is closed.

32. Semi-permanent covering, trellising, pergolas, and canvas shade cloths are allowed and shall be anchored consistent with manufacturer’s guidelines to withstand windloads, and in a manner acceptable to the City. Reasonable height of roofing/covering and supporting posts shall be as approved by the City, generally a minimum vertical clearance of 7’ and a maximum height of 10’. Coverings shall not extend over a public sidewalk.

33. Parklets adjacent to a sidewalk/curb must have solid flooring installed to create a stable, smooth, slip-resistant ADA-compliant raised platform of less than 2% slope. The flooring must be flush with the sidewalk/curb, with no more than ½” horizontal gap and no more than 1/4” vertical gap or level change.

34. Parklet flooring must be designed and constructed to avoid water pooling underneath, allow regular cleaning underneath, and avoid impeding curbline drainage. A minimum 6” by 6” of clear gutter space must be provided along the entire length of the platform, and should be maintained so that gutter remains unblocked, including regular trash removal.

The rest of the flooring platform shall be designed to prevent debris and trash from going underneath.

Maintenance

35. The area underneath the parklet flooring platform and the adjacent gutter shall be cleaned out weekly, preferably by sweeping or blowing. Trash shall not be allowed to accumulate under or adjacent to the parklet, or to enter any adjacent storm drains.

36. Buffer areas shall be maintained and kept clear of trash and obstructions such as garbage bins, bicycles, etc.

37. Periodically, the City will need to maintain the road surface and may require the operators of parklets on public property to remove the installation for that operation.

Updated April 17, 2023
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Sidewalk Vending in Cota�
State law (SB 946) now allows sidewalk vending of food and merchandise on public sidewalks and in parks, subject to certain restric�ons. Sidewalk vendors may prepare food and make sales from a pushcart, stand, wagon, or other non-motorized conveyance, or from their person, and they may be roaming or sta�onary.

License Requirements
• All mobile vendors must have and display a Cota� City Business license. • Must have and display a seller's permit with the California Department of Tax & Fee Administra�on (CDTFA) • Vendors selling prepared food (examples include hot dogs, tamales, shaved ice, fruit cups, pre-cooked corn, popcorn, roasted nuts, and churros) must have and display a current permit from Sonoma County Environmental Health.
o Exemp�ons: Vendors with less than 25 square feet of display space AND selling only prepackaged food (examples include chips and botled water) or whole uncooked produce are not required to have health permits.
• Addi�onal requirements from Environmental Health can be found here or on page two of this document.

Opera�onal Requirements
• Vendors may not block the sidewalk and must maintain 4-feet of clear passing space at all �mes. • Sta�onary sidewalk vendors are prohibited in areas zoned exclusively for residen�al use (the Rural Residen�al (RR) and Residen�al Very Low Density (RVL) zones).
• Vendors do not require permission from adjacent property owners or any other private en�ty to operate on public sidewalks and in public parks.
• Vendors stopped at one loca�on for over an hour must have access to a permanently installed restroom within 200 feet.
• Sidewalk vending of alcoholic beverages, cannabis products, tobacco products, or other legally controlled substances is prohibited.
• Sidewalk vendors shall maintain a clean and trash-free 10-foot radius around their stand. • When depar�ng a loca�on used for vending the sidewalk vendor shall remove all trash and debris from the loca�on. Proper disposal of all food prepara�on waste is required. • Vendors may not discharge any grease, wash water or any other liquids into the storm drain or any other loca�on.
• Sidewalk vendors shall immediately clean up any food, grease, or other fluid or item related to their vending ac�vi�es that falls onto the sidewalk or other public property. • Vendors must comply with the City of Cota� Noise Ordinance. • Vendors may not operate in the following manner or loca�ons:
o In any area that serves to provide ADA access.
o In any area blocking access to a business, residence, public facility or street furniture, bike racks, etc. o Within 100 feet of the Cota� Farmer’s market (when opera�ng) or other City approved events. o In any City park outside of the posted open hours of the park, or if the park has no posted hours, between the hours of 8:00 PM and 9:00 AM.

Ques�ons?
Contact Noah Housh, Community Development Director, City of Cota� nhoush@cota�city.gov 707-665-3635
Please review the reverse for other requirements from Sonoma County Environmental Health 396 of 437
EnvironmentalHealth 625 5th Street, Santa Rosa,CA95404707-565-6565 [email protected] https://sonomacounty.ca.gov/Health/Environmental-Health-and-Safety/ Compact Mobile Food Operations
On September 23, 2022, Governor Newsom signed SB 972, a bill that modifies the California Retail Food Code (CRFC) and allows some sidewalk food vendors to obtain public health permits.

The new law established a new retail food facility, among other changes, and is effective on January 1, 2023.

Compact Mobile Food Operation (CMFO) in section 113831 of the CRFC is defined as a “mobile food facility that operates from an individual or from a push cart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance.”
A CMFO may have non-prepackaged food and conduct limited food preparation with potentially hazardous foods and non-potentially hazardous foods. Examples of menu items that easily fit within limited food preparation include but are not limited to: hot dogs, shaved ice, roasted nuts, popcorn, churros, fruit cups, precooked corn, and tamales. The menu that can be prepared from a CMFO depends on the equipment present on the CMFO.

Before operation begins, a CMFO will need the following:
• Health permit required.
• Commissary which can either be a permitted food facility or a permitted Cottage Food Operation (CFO) Class B. A CFO can serve as a commissary for a maximum of 2 CMFO’s with endorsement from Environmental Health.
• Handwashing is required if there is handling of open food on the CMFO. • Warewashing is required if there is handling of raw meats, raw poultry, or raw fish on the CMFO.
• Mechanical refrigeration is required for cold holding potentially hazardous foods at or below 41°F. Hot-holding unit is required for hot holding potentially hazardous foods at or above 135°F.
• Food handler cards required.
• Potentially hazardous food prepared at an approved facility and served from a CMFO shall be destroyed at the end of the operating day.
• Restroom access if parked at one location for more than 1 hour. • Routine inspection conducted annually.

Exemptions: A health permit and an inspection may not apply for CMFOs that have less than 25 square feet of display space AND sell only non-potentially hazardous prepackaged food or whole uncooked produce.

For more information, please contact Sonoma County Environmental Health at (707) 565- 6565 or visit us at: https://sonomacounty.ca.gov/Health/Environmental-Health-and-Safety/ 397 of 437
City Council
Workshop on Potential Zoning
Code Updates for Food and
Mobile Businesses
Community Development
Department
January 27, 2026 398 of 437
Background and Goals of Workshop
 Sidewalk Vendors, food trucks, Microenterprise
Home Kitchen Operations (MEHKOs), parklets
and outdoor dining
 State law allows sidewalk vendors with minimal
regulation
 New County law allows MEHKOs
 Food-related and mobile businesses present
both opportunities and challenges
 Discuss and provide input on standards for a
potential zoning code ordinance
 Planning Commission workshop January 20
 Future public hearings on a draft ordinance
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Sidewalk Vendors—Background
 State law allows mobile vending on sidewalks
and in public parks—both food and
merchandise
 Non-motorized pushcarts, wagons, stands, etc.
 May be roaming or stationary
 Permission of adjacent property owners not
required
 Very limited local regulation is allowed
 Adoption of an ordinance = increase in
authority to regulate and ability to enforce
law, levy fines 400 of 437
Sidewalk Vendors
—Potential Standards
 City business license + County health
permit and/or State seller’s permit
 Locational standards Not on private property No blocking sidewalks, must maintain accessibility
Maintain distance from street furniture,
intersections, events, building entrances,
other vendors, etc.
Stationary vendors prohibited in RR and
RVL
Roaming vendors may not be limited to
certain areas 401 of 437
Sidewalk Vendors
—Potential Standards
 Operating standards Hours: Residential zones--8am
-30 minutes
before sunset; other zones--7am-11pm
Clean up litter and spills Odor, noise, nuisance performance standards
Access to restroom (stationary vendors
1+ hour)
Roaming vendors—Stop only for sales,
then move to new location
Signage limitations (size, type) No dining area
 No sidewalk vending permit at this time
402 of 437
MEHKOs
 Restaurants operated in a home by the
resident
 Authorized by State law, County “opted in”;
minimal opportunity for local regulation
Define MEHKO in land use code
Allow only in residential uses
Exempt from home occupation standards
Clarify that nuisance standards apply
(noise, illegal parking, blocking street,
solid waste disposal, et.
Business license and health permit required
 County-led staff working group on food biz 403 of 437 Food Trucks
 Not currently a land use in CMC;
considered “outdoor dining” allowed
accessory to restaurants only
 However, food trucks have grown in
popularity and prevalence over past
decade
Economic opportunity
Culinary choice
Enliven commercial areas
 City has jurisdiction; no State law 404 of 437
Food Trucks—Potential Standards
 Self-contained trucks or trailers/wagons, etc.
 City business license and County health permit
 Allow on private properties in commercial,
industrial, specific plan (DSP, TOC, SW) zoning
districts?
By-right if comply with standards (zoning
clearance)
MUP if property abuts residential use, in DSP
Historic Core, or multiple trucks at once (food
truck park)
Any business type as primary use on site
Consider allowing on vacant properties
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Food Trucks—Potential Standards
 Outdoor dining area—limited size—12’x12’?
Allow, with removal each night, OR
Allow as permanent installation (with MUP?)
 Operating standards
Remove truck from site each night
(exceptions with MUP?)
Maintain parking minimums
No blocking primary use or emergency access
Hours between 7am and 11pm
Signage size and type limitations
Litter and spill cleanup, trash/recycling
containers, noise/odor standards, no
polysterene
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Temporary Parklets
 Parklet is outdoor dining on public or private
parking spaces, operated by an adjacent
restaurant
 City approval required—safety and accessibility
 City policy allows permanent or temporary
 Some additional options for temporary parklets:
 Food trucks
 Food carts or other small-scale food
preparation
 Any type of business host
 Maximum number of days/year (40?)
 Maximum 3 consecutive days, 4 days between
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Outdoor Dining  Current code requirement: Outdoor dining allowed by -right for
restaurants
Exception: An MUP is required if dining
is on private property abutting a
residential use in CD, DSP, TOC, or SW
On public property, a license
agreement is required, not an MUP
 Confirm commitment to this approach MUP introduces expense, time, uncertainty
May be deterrent to restaurants
installing outdoor dining 408 of 437
Other Potential Code Updates
 Chicken-keeping
 Accessory to a residential use
 Current code language allows in residential
or commercial zoning district
 Residential uses also occur in specific plan
districts—extend to those zones?
 Market Gardens and Garden Stands
 Accessory to a residential use
 Current code language allows in residential zoning only  Residential uses also occur in commercial and specific plan districts—extend to those zones?
 Classify as home occupation, allow outdoors
409 of 437
Other Potential Code Updates  Community Gardens Current code language allows in residential zoning only
Community gardens are most successful
near multifamily which is allowed in
commercial and mixed-use zoning—
extend to those zones?
 Home Occupations Current code language limits activity of home occupation to 25% of areas of
ground floor
Maintain 25% but allow on any floor? 410 of 437
Planning Commission Comments
411 of 437
Next Steps
Direction to staff
Staff develop draft ordinance
Public hearings
Planning Commission
City Council
412 of 437
Questions?
413 of 437
Cotati City Council
Agenda Staff Report
Item type: REGULAR CALENDAR (ACTION)
To: City Council
Subject: REVIEW OF THE CITY OF COTATI’S DRAFT

CYBERSECURITY AND DATA PROTECTION POLICIES
Date: January 27, 2026
Written by: Angela Courter, Director of Administrative Services Recommendation
It is recommended that the City Council for the City of Cotati review and provide comment, if any, on the draft Cyber Security and Data Protection Policy.

Background
The City of Cotati relies on information technology systems to support essential municipal operations, including finance, public safety, utilities, human resources, and communications. As digital threats have increased in both frequency and sophistication, public agencies face growing risks to the security of sensitive data, infrastructure, and public trust.

Recent guidance from the California State Auditor, the National Institute of Standards and Technology (NIST), and the California Department of Technology emphasizes the importance of formally adopting local cybersecurity policies to safeguard information systems, ensure regulatory compliance, and prepare for incident response and recovery.

Although the City has implemented various cybersecurity practices and protocols over time, and is part of the GovAI coalition, it does not currently have a consolidated Cybersecurity and Data Protection Policy. Establishing a formal policy will ensure that the City's cybersecurity efforts are aligned with best practices and demonstrates a clear commitment to protecting City systems and data as well as providing guidance to staff on the expected procedures.

Analysis/Discussion
The proposed Cybersecurity and Data Protection Policy establishes a comprehensive framework to safeguard the City's digital infrastructure and data assets, while also addressing the responsible 414 of 437
use of emerging technologies, including artificial intelligence (AI). This policy ensures alignment with California law, including the Public Records Act, and recognized best practices such as the NIST Cybersecurity Framework. Key elements of the policy include:
- Clear Roles and Responsibilities: Cybersecurity is defined as a shared responsibility.

Oversight is delegated to the City Manager and Administrative Services Director, with departmental accountability and individual employee obligations for training and incident reporting.
- Acceptable Use of Technology: City systems are to be used primarily for official business, with strong controls on credentials, password sharing, software installations, and device use. Security measures such as multi-factor authentication and centrally managed updates are required.
- Data Protection Measures: Sensitive data must be encrypted during storage and transmission. Access controls follow the principle of least privilege, and system permissions are subject to regular audits. Routine backups and disaster recovery protocols are mandated.
- AI and Emerging Technology Governance: The policy encourages the innovative use of AI while establishing strict limitations. Staff may not input confidential or sensitive information into public AI tools, and all AI-generated content must be reviewed for accuracy and bias. Approval is required before adopting any new AI technologies. - Public Records Compliance: AI-generated content and other digital outputs are subject to disclosure under the California Public Records Act. The policy emphasizes proper labeling, storage, and retention of such records.
- Incident Response Protocols: The City maintains a formal response plan for cybersecurity incidents, with clearly defined reporting channels, containment strategies, and documentation requirements.
- Training and Awareness: Annual cybersecurity training is required for all staff, along with specialized training for those authorized to use AI tools. - Policy Oversight and Enforcement: The policy will be reviewed biennially, or more frequently as needed, to reflect changing technology and security landscapes.

At this point, staff are seeking review and feedback from the City Council, if any. The next step is to review the attached policy with City labor groups and then return to the City Council with a proposed final policy for adoption.

Financial Considerations
Staffing requirements to draft this policy were included within the proposed strategic plan and budgeted staffing for the fiscal year. There is no known direct fiscal impacts anticipated with the adoption of this policy. Increased training materials are included in the software for the City and managed in coordination with our IT services partner KLH Consulting Environmental Issues
The action of adopting this policy involves an administrative activity that will not result in direct or indirect physical changes in the environment. As such, adoption of the resolution does not 415 of 437
constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required. 416 of 437

CITY OF COTATI
Cybersecurity and Data
Protection Policy
A Summary of the City’s Rules to Promote Excellent
Cybersecurity including Data Protection Including Allowed Uses for Artificial Intelligence (AI) and Other Emerging Technologies.

Purpose and Scope .............................................................................................................................................................2 Roles and Responsibilities ........................................................................................................................................2 Acceptable Use of Technology...............................................................................................................................................2 Data Protection and Security Requirements .............................................................................................................2 Responsible Use of Artificial Intelligence and Emerging Technologies..................................................................3 Public Records Compliance .............................................................................................................................................3 Incident Response and Reporting............................................................................................................................4 Training and Awareness..........................................................................................................................................4 Policy Review and Updates ....................................................................................................................................4 Enforcement............................................................................................................................................................5 417 of 437
City of Cotati
Cybersecurity and Data Protection Policies
Adopted XXXXXXX, 2026