Agenda — Covina City Council, September 20, 2022 (part 2 of 3)

TO: MR. BRIAN LEE
SUBJECT: 1270 GARVEY STREET DIGITAL BILLBOARD PROJECT – PROPOSAL FOR CEQA DOCUMENTATION 11 MAY 2022
▪ NOC (PDF)
▪ Agency Mailing/Distribution List (Excel)
▪ 1 unbound hardcopy of the IS/MND (with appendices on a thumb drive) ▪ 3 bound hardcopies of the IS/MND (with appendices on a thumb drive) ▪ 25 thumb drives of the IS/MND
Task 6 Final Initial Study/Mitigated Negative Declaration Upon completion of the public review period, Dudek will review comments received and prepare responses to comments. Dudek assumes no more than 10 individual comments will require responses (note that a single letter can have multiple individual comments). The Final IS/MND will include all comment letters received during the review period, responses to each comment, a preface, and, if applicable, a discussion of any edits made to the IS/MND as a result of the comments received.

Dudek will provide the City with an electronic copy of the Final IS/MND for review. Dudek will incorporate the City’s comments into the Final IS/MND and submit the Final IS/MND to the City for approval.

In the event the City approves the project and adopts the MND, Dudek will prepare and file a Notice of Determination (NOD) at the County Clerk pursuant to the CEQA noticing requirements (CEQA Guidelines, Section 15075). The cost estimate includes the California Department of Fish and Wildlife and County Clerk filing fees for the NOD.

Task 6 Deliverables
▪ Final IS/MND, Administrative Draft (Word)
▪ Final IS/MMD, Screencheck Draft (Word)
▪ Final IS/MND, Final Version (Word and PDF)
▪ 5 thumb drives of the Final IS/MND
▪ NOD (PDF)
Dudek will distribute an electronic copy of the Final IS/MND in Microsoft Word files for City review. No hard copies will be provided. Dudek will address any edits and prepare a Screencheck Final IS/MND to be provided to the City.

Comments on the Screencheck Final IS/MND are assumed to be minimal. Dudek will then provide the City with a finalized version in Microsoft Word and PDF. No hard copies will be provided; however, in the event that comments are received from agencies, Dudek will be responsible for sending a copy of the Final IS/MND (on thumb drives) to the commenting agencies prior to the City’s adoption hearing for the MND. This scope and cost assumes that there will be no more than 5 commenting agencies.

Task 7 Project Management and Meetings
This scope of work includes up to two coordination calls per month during preparation of the IS/MND (for a total of 14 calls) and Ms. Finneyfrock’s attendance at one Planning Commission and one City Council hearing for the project. This task also includes overseeing internal staff, the subconsultant, managing document review, preparation of memos, and other project management tasks.

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TO: MR. BRIAN LEE
SUBJECT: 1270 GARVEY STREET DIGITAL BILLBOARD PROJECT – PROPOSAL FOR CEQA DOCUMENTATION 12 MAY 2022
3 Schedule
Table 1 presents the anticipated schedule for completion of the IS/MND. The schedule assumes timely receipt of responses to any data needs submitted by Dudek. Other factors that could lengthen or shorten the schedule include dates of receipt of project information, length of project team review, and unanticipated issues arising from City staff or public review of the IS/MND.

Table 1. Tentative Schedule
Deliverable Weeks/Days
Prepare Administrative Draft IS/MND 7 weeks
City review 3 weeks
Prepare Screencheck Draft IS/MND 2 weeks
City review 2 weeks
Finalize and publish Draft IS/MND 2 weeks
Public Review (30 days) 4 weeks
Prepare Final IS/MND 3 weeks *
City review 3 weeks *
Prepare Screencheck Final IS/MND 2 weeks
City review 1 week
Submit Final IS/MND 1 week
Total 7.5 months
Note: * Assumes that minor, non-substantive comments are received during the public review period. An unanticipated volume of comment letters and/or substantive comments may require additional time and additional rounds of review with the City. 4 Assumptions
This proposal assumes that the results of the Initial Study analysis described under Task 4 will clearly demonstrate that an IS/MND is the appropriate CEQA document for the project and that the triggers for an EIR (i.e., significant, unavoidable/unmitigable effects to the environment) will not be met. In the event that the analysis in the Initial Study reveals that one or more significant and unavoidable effects could result from the project, Dudek can prepare an EIR upon request and under a separate scope and cost. This scope and cost also assumes timely receipt of all data needs requests from Dudek and FKA that are necessary to perform the environmental analysis. Industry standards and assumptions may be used in certain cases when project-specific information is not available. This scope and cost does not include any coordination or assistance with Caltrans permitting.
5 Cost Estimate
The preliminary cost estimate for completion of the IS/MND without Optional Task 3 is $87,199.62. Including Optional Task 3, the total cost estimate is $137,458.87, as shown below (Table 2). The cost of completing the tasks will be billed on a time-and-materials basis following Dudek’s 2022 bill rate schedule. The final project budget will be based on the approved scope of work. This cost estimate is valid for 90 days from the date of this letter.

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TO: MR. BRIAN LEE
SUBJECT: 1270 GARVEY STREET DIGITAL BILLBOARD PROJECT – PROPOSAL FOR CEQA DOCUMENTATION Table 2. Cost Estimate
Dudek Labor Hours and Rates Subconsultant
Project Team Role:

Senior
Specialist
IV
Specialist
IV Analyst IV
Specialist
I
Senior
Specialist
III Specialist V
Hydrogeologist
V
Specialist
II
Senior
Designer
II
GIS Analyst
IV
Publications
Specialist ll
TOTAL
DUDEK
HOURS
DUDEK
LABOR
COSTS
OTHER
DIRECT

COSTS TOTAL FEE
Team Member:

Nicole
Cobleigh
Michele
Finneyfrock
Brandon
WhalenCastellanosNicholas
Lorenzen
Michael
Greene
Heather
McDevitt
Audrey
Herschberger
Michael
Williams
Paul
Caligiuri
Christopher
Starbird
Publications
Specialist ll
Francis Krahe
and
Associates
Billable Rate: $235.00 $175.00 $115.00 $140.00 $225.00 $185.00 $185.00 $150.00 $190.00 $165.00 $100.00 Fee* Task 1 Project Initiation 4 16 16 2 38 $5,910.00 $5,910.00 Task 2 Lighting Study Peer Review 4 4 $700.00 $11,500.00 $12,200.00 Task 4 Administrative Draft IS/MND

4.1 AQ/GHG/Energy 86 86 $12,040.00 $12,040.00

4.2 Noise 32 2 34 $7,530.00 $7,530.00

4.3 Other Sections 40 10 8 8 4 70 $9,790.00 $9,790.00

4.4 QA/QC 8 40 48 $8,880.00 $8,880.00
Subtotal Task 4 8 40 40 86 32 10 8 8 6 238 $38,240.00 $38,240.00 Task 5
Screencheck & Public Review Draft
IS/MND 4 16 20 40 80 $10,040.00 $1,334.00 $11,374.00
Task 6 Final IS/MND 4 18 20 20 62 $8,390.00 $3,783.50 $12,173.50 Task 7 Project Management and Meetings 16 20 36 $7,260.00 $42.12 $7,302.12 Total Hours 36 114 96 86 32 10 8 8 0 8 60 458
Total $8,460.00 $19,950.00 $11,040.00 $12,040.00 $7,200.00 $1,850.00 $1,480.00 $1,200.00 $0.00 $1,320.00 $6,000.00 $70,540.00 $11,500.00 $5,159.62 $87,199.62 Optional Services
Task 3 Optional Aesthetics Studies

3.1 Optional Task: Augmented Lighting
Study 2 8 2 12 $2,200.00 $41,400.00 $43,600.00

3.2 Optional Task: Visual Simulations 2 2 8 24 2 38 $6,630.00 $29.25 $6,659.25 Subtotal Task 3 4 10 8 24 4 50 $8,830.00 $29.25 $50,259.25 Total Optional + Base Hours and Fee 40 124 104 86 32 10 8 8 24 12 60 508 $79,370.00 $52,900.00 $5,188.87 $137,458.87 Notes: * Includes 15% markup.

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TO: MR. BRIAN LEE
SUBJECT: 1270 GARVEY STREET DIGITAL BILLBOARD PROJECT – PROPOSAL FOR CEQA DOCUMENTATION 14 MAY 2022
If you have any questions or would like more information about our proposal, please feel free to contact me at 626.204.9823 or by email at [email protected]. We look forward to working with the City to ensure a quick and seamless environmental review process for this project.

Sincerely,
____________________________________
Michele Finneyfrock
Project Manager
Dudek

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CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 14
Meeting: CC Regular Meeting - Sep 20 2022
Title: City of Covina Investment Report for Month ended July 31, 2022 Presented By: Anita Agramonte, Administrative Services Director Recommendation: Receive and File.

EXECUTIVE SUMMARY / BACKROUND:

Pursuant to Government Code Section 53600 et seq. and Section 4.0 of the City of Covina’s Investment Policy, amonthly investment report must be provided to the City Council and City Manager, containing detailed information of all securities, investments and monies of the City.

DISCUSSION:

The attached report for the City and Successor Agency reflects the portfolio balances for the month ended July 31, 2022. The report is in conformity with the City’s Investment Policy as well as Government Code 53601. In accordance with the City's Investment Policy, the City Council authorizes staff to continue investing the City's idle funds in similar securities as those presented in these reports attached hereto. There are sufficient funds to meet the pooled expenditure requirements for all City funds for the next 6 months.

FISCAL IMPACT:

None to receive and file.

ATTACHMENTS:

Attachment A-City - Investment Report for the Month Ended July 31, 2022 Attachment A-1-City - Cash and Investment Summary
Attachment A-Agency- Investment Report for the Month Ended July 31, 2022 Attachment A-1-Agency- Cash and Investment Summary
Attachment A-2 Total Investment Portfolio as of July 31, 2022 Attachment A-3 Investment Transaction Summary
Attachment A-4 Investment Holdings by Sector
Attachment A-5 Cash and Investments - Three Year Comparison Attachment A-6 - City LAIF Statement
Attachment A-7 - Successor Agency LAIF Statement
Attachment A-8 LAIF Market Valuation for July 31, 2022
Respectfully submitted,
CASH BALANCE 6/30/2022 $83,149,314.17
RECEIPTS 7/1/22-7/31/22 28,435,292.38

DISBURSEMENTS 7/1/22-7/31/22 (28,567,966.93)
CASH BALANCE 7/31/2022 $83,016,639.62

ANALYSIS OF CASH AND INVESTMENT BALANCE - BOOK VALUE
INVESTMENT PORTFOLIO Attachment A-2 24,164,399.57
LOCAL AGENCY INVESTMENT FUND Attachment A-6 54,182,793.97 TOTAL PUBLIC INVESTMENTS $78,347,193.54
CHECKING AND PETTY CASH BALANCES 4,669,446.08
CASH AND INVESTMENT BALANCE 7/31/2022 $83,016,639.62
CASH HELD BY BOND TRUSTEES 5,425,084.79
TOTAL CASH AND INVESTMENT BALANCE 7/31/2022 $88,441,724.41

CITY O F CO VINA INVESTMENT REPO RT
FO R THE MO NTH ENDED JULY 31, 2022
The purpose of this report is to provide readers with the overall cash position of the City. There is sufficient investment liquidity to meet the pooled expenditures of all City’s funds for the next 6 months.

Attachment A - CITY

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BOOK ACQUISITION MATURIT

Y MARKET
TYPE OF INVESTMENT ISSUER VALUE $ DATE DATE VALUE $
Cit
y of Covina:

Drawer & Pett
y Cash
N/A 7,935.49
N/A
N/A 7,935.49
General - Checkin
g Account Bank of the West $4,171,648.51
N/A Deman
d 4,171,648.51
Public A
genc
y Savin
g - Parkin
g Fines (as of 6/30/2 Bank of the West 73,329.36
N/A Deman
d 73,329.36
Utilit
y Billin
g Account Bank of the West $50,918.70
N/A Deman
d 50,918.70
Workers' Com
pensation - Checkin
g Account Bank of the West 49,893.72
N/A Deman
d 49,893.72
Pa
yroll - Checkin
g Account Bank of the West $265,710.92
N/A Deman
d 265,710.92
Mone
y Market Bank of the West $28,273.75
N/A Deman
d 28,273.75
AFLAC Flexible S
pendin
g Account Bank of the West 21,735.63
N/A Deman
d 21,735.63
STIFEL Investment Portfolio Various Variou 24,164,399.57 s Various 23,736,745.81Local A genc
y Investment Fun
d State of California 54,182,793.97
N/A Deman
d 54,182,793.97
Subtotal (A) $83,016,639.62 $82,588,985.86
Cash Held Under 3rd Part
y Administrator:

TRIP 2017A Covina Wilmin
gton Trust 44.27
N/A Deman
d $44.27
LA Count
y Loan A
greement U.S. Bank 2,000,100.68
N/A Deman
d $ 2,000,042.61
2021 Taxable Pension Obli
gation Bonds U.S. Bank 3,424,939.63
N/A Deman
d $3,424,939.63
2019 Wastewater Refundin
g Bonds U.S. Bank 0.21
N/A Deman
d $0.21
Subtotal (B) 5,425,026.72 5,425,084.79
TOTAL (A+B) $88,441,724.41 $88,014,012.58
The
purpose of this schedule is to show the total cash and investments held b y the Cit
y of Covina b
y account.

CITY OF COVINA

CASH AND INVESTMENT SUMMARY
FOR THE MONTH ENDED JULY 31, 2022
S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Investment Reports\22-23\July 2022\July 2022 Investment Report\CITY -ATTACH A-1 Attachment A-1 CITY

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CASH BALANCE 6/30/2022 $556,445.68
RECEIPTS 7/1/22-7/31/22 990.00

DISBURSEMENTS 7/1/22-7/31/22 0.00
CASH BALANCE 7/31/2022 $557,435.68

ANALYSIS OF CASH AND INVESTMENT BALANCE
CHECKING ACCOUNT 27,612.64
LOCAL AGENCY INVESTMENT FUND Attachment A-7 529,823.04
AVAILABLE CASH BALANCES $557,435.68
CASH AND INVESTMENTS HELD BY BOND TRUSTEES 3,022,401.58 TOTAL CASH & INVESTMENT BALANCE 7/31/2022 $3,579,837.26

SUCCESSOR AGENCY TO THE COVINA REDEVELOPMENT AGENCY INVESTMENT REPORT FOR THE MONTH ENDED JULY 31, 2022
The purpose of this report is to provide readers with the overall cash position of the Successor Agency to the Covina Redevelopment Agency (Agency). There is sufficient investment liquidity to meet the pooled expenditures of all Agency's funds for the next 6 months.

ATTACHMENT A-AGENCY

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BANK ACQUISITION MARKET
TYPE OF INVESTMENT ISSUER VALUE $ DATE DATE VALUE $
Successor Agency to the Covina Redevelopment Agency:Checking Account Bank of the West $27,612.64 N/A Demand 27,612.64Local Agency Investment Fund State of California 529,823.04 Demand 529,823.04 Subtotal (A) $557,435.68 $557,435.68
Cash Held Under 3rd Party Administrator:(1) 2013 Series A Tax Allocation Bonds U.S. Bank* 2,462,118.52 N/A Demand 2,462,118.52 Fiscal Agent: U.S. Bank(2) 2014 Series A Tax Allocation Bonds U.S. Bank* 162,120.52 N/A Demand 162,120.52 Fiscal Agent: U.S. Bank(3) 2004 Series B Tax Allocation Bonds U.S. Bank* 398,162.54 N/A Demand 398,162.54 Fiscal Agent: U.S. Bank Subtotal (B) $3,022,401.58 $3,022,401.58
TOTAL (A+B) $3,579,837.26 $3,579,837.26
The purpose of this schedule is to show the total cash and investments held by the Successor Agency to the Covina Redevelopment Agency by account. * Formerly BNY Mellon

SUCCESSOR AGENCY TO THE COVINA REDEVELOPMENT AGENCY

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Trustee Purch date Dated Qty
Market Price Per
Share
Total Original Cost
Value Total Market Value Coupon CUSIP Maturity Issuer

FEDERAL AGENCY SECURITIES
Stifel (from U.S. Bank) 11/27/19 6,250 99.979000 625,152.59 624,868.75 1.6250 912828TJ9 8/15/2022 US Treasury Stifel (from U.S. Bank) 09/12/19 4,250 99.975000 423,804.69 424,893.75 1.5000 912828YA2 8/15/2022 US Treasury Stifel (from U.S. Bank) 11/27/19 6,250 99.873000 629,809.57 624,206.25 1.8750 912828M49 10/31/2022 US Treasury Stifel (from U.S. Bank) 03/04/20 1,600 99.383000 162,918.75 159,012.80 1.5000 912828Z29 1/15/2023 US Treasury Stifel (from U.S. Bank) 08/28/19 7,750 99.434000 783,143.55 770,613.50 1.6250 912828P38 1/31/2023 US Treasury Stifel (from U.S. Bank) 03/04/20 2,850 99.191000 289,408.59 282,694.35 1.3750 912828Z86 2/15/2023 US Treasury Total U.S. Treasury 2,886,289.40 2,914,237.74
Stifel (from U.S. Bank) 02/21/20 5,250 99.174000 524,034.00 520,663.50 1.3750 3130AJ7E3 2/17/2023 Federal Home Loan Stifel 06/30/22 10,000 100.268000 1,002,415.10 1,002,680.00 3.1250 3130ASHK8 6/14/2024 FEDL Home Loan Bank Bond Stifel 06/30/22 10,000 95.471000 952,708.25 954,710.00 1.0000 3130AQF40 12/20/2024 FEDL Home Loan Bank Bond Stifel 02/02/22 10,000 99.269000 1,037,957.31 992,690.00 2.6250 3130A6ZQ3 12/12/2025 FEDL Home Loan Bank Bond Stifel 04/07/22 10,000 100.645000 1,011,936.25 1,006,450.00 3.0000 3130A2VE3 9/11/2026 FEDL Home Loan Bank Bond Stifel (from U.S. Bank) 04/21/20 6,100 98.152000 608,475.00 598,727.20 0.3750 3137EAEQ8 4/20/2023 FHLMC Stifel (from U.S. Bank) 05/07/20 6,100 98.010000 609,743.80 597,861.00 0.3750 3137EAER6 5/5/2023 FHLMC Total Federal Home Loan Total Federal Home Loan 5,673,781.70 5,747,269.71 Stifel 04/07/22 10,000 101.351000 1,018,814.07 1,013,510.00 3.1500 3133EJDV8 3/22/2027 Federal Farm Credit Bank Bond Stifel 02/02/22 20,000 97.220000 1,990,871.52 1,944,400.00 0.9000 3133ENLF5 1/18/2024 FEDL Farm Credit Bank Bond Stifel 02/02/22 10,000 96.122000 998,647.01 961,220.00 1.3200 3133ENLU2 1/21/2025 FEDL Farm Credit Bank Bond Stifel 02/02/22 10,000 94.584000 996,151.59 945,840.00 1.5000 3133ENKV1 1/13/2027 FEDL Farm Credit Bank Bond Stifel (from U.S. Bank) 06/09/20 6,000 97.772000 598,044.00 586,632.00 0.3000 3133ELG81 6/8/2023 Federal Farm Credit BKs Total Federal Farm Credit 5,451,602.00 5,602,528.19
Stifel 06/30/22 10,000 92.602000 915,357.70 926,020.00 0.9400 31422XGQ9 10/26/2026 FEDL Agric MTG CorpMedium Term Note
Total Federal Agricultures Mortgage Corp 926,020.00 915,357.70 Certiricates of Deposits
Stifel 04/27/22 2,450 97.757000 245,000.00 239,504.65 2.8500 02007GQQ9 5/5/2026 Ally Bank -
Midvale UT CD
Stifel 03/01/22 2,450 95.993000 245,000.00 235,182.85 1.8000 02589ABP6 3/10/2025 American Express Natl BK -
Salt Lake City UT CD
Stifel 06/30/22 2,450 99.448000 245,000.00 243,647.60 3.2500 02616ABJ7 7/15/2025 American First CR UNBrea CA SHS CTF
Stifel 06/23/22 2,450 99.740000 245,000.00 244,363.00 3.0000 06251A4G2 12/29/2023 Bank Hapoalim BMNew York NY CD
Stifel 05/24/22 2,450 98.962000 245,000.00 242,456.90 3.0500 06740KQS9 6/2/2025 Barclays Bank DEWilmington DE CD
Stifel 03/01/22 2,450 93.763000 245,000.00 229,719.35 2.0500 07371CK81 3/3/2027 Beal Bank -
Las Vegas NV CD
Stifel 03/01/22 2,450 93.763000 245,000.00 229,719.35 2.0500 07371AZQ9 3/3/2027 Beal Bank -
Plano TX CD
Stifel 06/23/22 2,450 99.337000 245,000.00 243,375.65 3.2000 05600XGK0 6/24/2025 BMO Harris Bank NAChicago IL CD
Stifel 03/01/22 2,450 96.022000 245,000.00 235,253.90 1.8000 05580AK37 3/4/2025 BMW Bank North America -
Salt Lake City UT CD
Stifel 04/27/22 2,450 97.870000 245,000.00 239,781.50 3.0500 14042RRA1 5/4/2027 Capital One NA -
Mclean VA CD
Stifel 04/07/22 2,450 96.401000 245,000.00 236,182.45 2.7000 14042TFJ1 4/13/2027 Cpital One Bank USA NA -
Glen Allen VA CD
Stifel 05/20/22 2,450 98.496000 245,000.00 241,315.20 3.2000 254673E36 5/24/2027 Discover BankGreenwood DE CD
Stifel 05/16/22 2,450 98.533000 245,000.00 241,405.85 3.0000 32110YXE0 11/28/2025 First Natl Bank of Amer- East
Lansing MI CE
Stifel 06/30/22 2,450 99.969000 245,000.00 244,924.05 3.2500 33715LEA4 4/15/2024 First Technology FCUMountain View CA SHS CTF
Stifel 04/27/22 2,450 97.858000 245,000.00 239,752.10 3.0500 38149M6Y4 5/11/2027 Goldman Sachs Bank USA -
New York NY CD
Stifel 05/24/22 2,450 99.197000 245,000.00 243,032.65 2.8500 465076TQ0 5/28/2024 Isreal Discount BK of NYNew York NY CD
Stifel 03/03/22 2,490 96.216000 248,751.00 239,577.84 1.8500 538036HW7 2/14/2025 Live Oak Bkg Co -
Wilmington NC CD
Stifel 03/01/22 2,450 93.709000 245,000.00 229,587.05 2.0500 58404DNG2 3/8/2027 Medallion Bank -
Salt Lake City UT CD
Stifel 05/16/22 2,450 98.722000 245,000.00 241,868.90 3.2500 61690UJ68 5/19/2027 Morgan Stanley Bank NA- Salt
Lake City UT CD
Stifel 05/16/22 2,450 98.722000 245,000.00 241,868.90 3.2500 61768EJR5 5/19/2027 Morgan Stanley PVT BK NAPurchase NY CD
Stifel 06/23/22 2,450 99.853000 245,000.00 244,639.85 3.2500 67523TBE2 7/1/2024 Oceanfirst Bank NA- Toms
River NJ CD
Stifel 02/02/22 2,450 92.318000 245,000.00 226,179.10 1.7000 70962LBE1 2/18/2027 Pentagon Federal CR UN -
Tysons Corner VA
Stifel 06/23/22 2,450 99.488000 245,000.00 243,745.60 3.0500 72345SLE9 6/28/2024 Pinnacle Bank -
Nashville TN CD
Exhibit A-2

CITY OF COVINA
U.S. Bank and Stifel
Investment Portfolio as of
July 2022
S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Inve Page 6 of 13 stment Reports\22-23\July 2022\July 2022 Investment Report 1 Trustee Purch date Dated Qty
Market Price Per
Share
Total Original Cost
Value Total Market Value Coupon CUSIP Maturity Issuer
Stifel 06/27/22 2,450 99.879000 245,000.00 244,703.55 2.8500 75524KNZ3 6/29/2023 RBS Citizens NAProvidence RI CD
Stifel 02/16/22 2,450 94.437000 245,000.00 231,370.65 2.2000 795451BH5 2/23/2027 Sallie Mae Bank -
Salt Lake City UT CD
Stifel 02/01/22 2,450 92.620000 245,000.00 226,919.00 1.7500 856285G21 2/9/2027 State Bank of India -
New York NY CD
Stifel 04/07/22 2,450 96.398000 245,000.00 236,175.10 2.7000 87165FK45 4/14/2027 Synchrony Bank -
Draper UT CD
Stifel 06/23/22 2,450 99.682000 245,000.00 244,220.90 3.2000 87164DTM2 8/30/2024 Synovus BankColumbus GA CD
Stifel 06/30/22 10,000 111.626000 1,114,687.71 1,116,260.00 6.7500 880591CJ9 11/1/2025 Tennessee Valley AuthPWR Bond 1995 SER E
Stifel 05/09/22 2,450 98.505000 245,000.00 241,337.25 3.2000 89235MNH0 5/17/2027 Toyota Finl Svgs BankHenderson NV CD
Stifel 06/27/22 2,450 99.761000 245,000.00 244,414.45 3.2000 90348J4B3 7/1/2024 UBS Bank USASalt Lake City UT CD
Total Certificate of Deposits 8,282,485.19 8,468,438.71 Stifel Net Cash Equivalents 516,567.52 516,567.52
Total Value of Portfolio 24,164,399.57 $ 23,736,745.81 $ S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Inve Page 7 of 13 stment Reports\22-23\July 2022\July 2022 Investment Report 2 Qty Purch Date Maturity
Share Price at Purch
Date Net Trade Amount Cost Basis Value Market Value Accrued Interest Issuer CUSIP Held by

NO PURCHASES IN JULY
Total - - - -
Qty Purch Date Maturity
Sale / Maturity
Date
Share Price at Sale /
Maturity Date Original Cost Value
Par Value at
Sale/Maturity
Gain / (Loss) on
Sale / Redemption
Interest Earnings
Since Purchase Issuer CUSIP Held by
10/30/19 7/15/ 4,850 2022 7/15/2022 100.000000 486,212.50 (1, 485,000.00 22, 212.50) US Treasury 994.67 9128287C8 Stifel (from U.S. Bank) Total 486,212.50 (1, 485,000.00 22, 212.50) 994.67
Period Interest Rev enue
Gain / (Loss) on
Transactions Management Fees Net rev enue / (Loss)
Fees as a %
of Revenue
Previous Month 31,567.52 (5, - 954.52) 0% 25,613.00
Previous 12 mos. 267,210.05 12, (10, 813.34 319.84) 4% 269,703.55 Investments Held 24,164,399.57 $ Total Fees 10,319.84Fees as % of Portfolio 0.04% Net Rev enue Analysis - for Period Ending July 31, 2022 PREVIOUS 12 MONTH FEE ANALYSIS
August 2021-July 2022

CITY OF COVINA
Investment Transaction Summary
for the Month Ended July 31, 2022
Purchased Investments
Sold/Matured Investments
S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Investment Reports\22-23\July 2022\July 2022 Investment Report Attachment A-2

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U.S. Bank &
Stifel Total
Investment PercentageBook Value
Cash & Pending Transactions 516,568 2.14%
Federal Home Loan 5,747,270 23.78%Federal Farm Credit 5,602,528 23.19%Federal Agriculture Mortgage 915,358 3.79%Certificate of Deposits 8,468,439 35.05%U.S. Treasury 2,914,238 12.06% Total 24,164,400 100.00%
*Average Investment coupon rate: 2.21% (based on weighted average of Original Cost Value)This chart shows the breakdown of the City's investments into the various investment sectors.

0.00 CITY OF COVIN
A
Inv estment Holdin
gs b
y Sector

2.14%

23.78%

23.19%

3.79%

35.05%

12.06%
Holdings by Sector
Cash & Securities Pending
Settlement U.S. Treasury
Federal Home Loan
Federal Farm Credit
Certif icates of Deposit
Federal Agriculture
Mortgage
S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Investment Holdings by Sector\22-23\Investment Holdings by Sector - Jul 22 Attachment A-4

Page 9 of 13 ends

Quarter
Ending City Agency*
7/31/2020 49,306,933 6,452,7647/31/2021 71,551,786 4,522,936 7/31/2022. 88,441,724 3,579,837
The purpose of this schedule is to show, for comparison purposes, the total cash and investment values for the last 3 years. *Successor Agency to Covina Redevelopment Agency

CITY OF COVINA AND SUCCESSOR AGENCY TO THE COVINA REDEVELOPMENT AGENCY Cash and Investments Three Year Comparison as of July 31, 2022 $0
$20,000,000$40,000,000$60,000,000$80,000,000
$100,000,000
7/31/2020 7/31/2021 7/31/2022.
49,306,933
71,551,786
88,441,724
6,452,764 4,522,936 3,579,837
Quarter Ending July 31
City of Covina & Agency* Total Cash & Investments
Three Year Comparison
CityAgency*
S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Investment Reports\22-23\July 2022\Cash Comparison Jul 22 ATTACHMENT A-5

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Attachment A-7

Page 12 of 13 ends

Carrying Cost Plus
Description Accrued Interest Purch. Fair Value Accrued Interest United States Treasury:

Bills 52,098,128,291.11 $ 52,057,747,000.00 $ NA
Notes $ 104,818,985,610.97 $ 102,520,395,000.00 $ 273,587,614.00 Federal Agency:

SBA $ 300,318,315.91 $ 300,555,022.11 $ 189,527.40
MBS-REMICs $ 4,432,359.73 $ 4,497,025.55 $ 20,034.96
Debentures $ 8,895,418,676.26 $ 8,738,846,550.00 $ 14,157,686.50 Debentures FR $ - $ - $ -
Debentures CL $ 2,450,000,000.00 $ 2,439,724,500.00 $ 9,836,029.50 Discount Notes $ 29,458,450,347.10 $ 29,441,160,000.00 NA Supranational Debentures $ 2,231,820,920.27 $ 2,165,702,700.00 $ 6,556,084.60 Supranational Debentures FR $ - $ - $ -
CDs and YCDs FR $ - $ - $ -
Bank Notes $ 100,000,000.00 $ 99,792,447.60 $ 266,666.67 CDs and YCDs $ 12,760,000,000.00 $ 12,735,555,691.17 $ 41,454,066.65 Commercial Paper $ 10,123,658,513.84 10,111,738,076.32 $ NA Corporate:

Bonds FR - $ $ - $ -
Bonds $ 492,556,729.32 $ 473,132,560.00 $ 2,271,300.58
Repurchase Agreements $ - $ - $ -
Reverse Repurchase $ - $ - $ -
Time Deposits $ 4,614,000,000.00 $ 4,614,000,000.00 NA
PMIA & GF Loans $ 829,187,000.00 $ 829,187,000.00 NA
TOTAL $ 229,165,036,326.99 $ 226,543,954,010.27 $ 348,339,010.86 Fair Value Including Accrued Interest $ 226,892,293,021.13 Repurchase Agreements, Time Deposits, PMIA & General Fund loans, and Reverse Repurchase agreements are carried at portfolio book value (carrying cost).

State of California
Pooled Money Investment Account
Market Valuation
7/31/2022
Attachment A-8

Page 13 of 13 ends

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. PH 1
Meeting: CC Regular Meeting - Sep 20 2022
Title: Consideration of Resolutions CC 2022-95, CC 2022-96 and CC 2022-97, Authorizing Annexation of Territory to City of Covina Community Facilities District No. 2007-1 (Public Services) (Annexation No. 32), and to Call and Hold a Special Election (155 E.

Covina Boulevard, Covina)
Presented By: Brian K. Lee, Director of Community Development Recommendation: 1. City Council to open the public hearing and consider public testimony and close the public hearing; and

2. Adopt Resolution CC 2022-95, authorizing the annexation of territory to Community Facilities District No. 2007-1 (Annexation No. 32) and authorizing the levy of a special tax and submitting the levy of tax to the qualified electors; and

3. Adopt Resolution CC 2022-96, calling a special election and submitting to the voters of Annexation No. 32 of City of Covina Community Facilities District No. 2007-1 (Public Services), propositions regarding the annual levy of special taxes within Annexation No. 32 to finance public services, and the establishment of an appropriations limit; and

4. Adopt Resolution CC 2022-97, making certain findings, certifying the results of an election and adding property to Community Facilities District No. 2007-1 (Public Services), Annexation No. 32.

EXECUTIVE SUMMARY / BACKROUND:

At the August 16, 2022, City Council meeting, the Council adopted the boundary map showing territory proposed to be annexed as Annexation No. 32, and declared its intention to authorize the annexation of that territory to Community Facilities District (CFD) No. 2007-1 (Public Services).

The purpose of the CFD is to finance the public safety and park services that are provided to the territory within the District beyond that provided by the City generally. In Fiscal Year 2022-2023, it has been determined that the cost of these services, for each additional multi-family residential home, will be $589.87 per year. This program has been conceived with the intention that all future residential development, which results in a net increase of non-exempted residential units, would be required to annex to the CFD. The project at 155 E. Covina Boulevard, Covina has a total of thirty-eight (38) new multi-family residential units. The special tax will be applicable to thirty-eight (38) multi-family residential units in Annexation No. 32.

DISCUSSION:

The purpose of the public hearing is to 1) authorize the annexation of territory to the CFD (Annexation No. 32); 2) call and hold an election of property owners within the CFD, and 3) authorize the levy of a special tax within Annexation No. 32 to the CFD. The related resolutions are hereby presented to the City Council, pursuant to the Conditions of Approval for thirty-eight (38) new multi-family residential units to be built at 155 E. Covina Boulevard, Covina, California.

Pursuant to the Conditions of Approval for development of a multi-family development at 155 E. Covina Boulevard, Covina, the applicant agreed to annex to the CFD, or to pay an in lieu fee based on the financial impact on Police, Fire, Emergency, and Parks services. The builder opted to annex into the CFD. Under the proposed CFD, in Fiscal Year 2022-2023, any newly constructed, non-exempted multi-family residential units are charged $589.87 per year for the following services: police, fire protection and suppression, paramedic services, and park maintenance. This Special Tax appears on the annual Property Tax bill for each unit. The Special Tax authorized by the CFD shall be levied on all units for which building permits were issued on or before May 1 of the preceding fiscal year.

FISCAL IMPACT:

The “Special Tax” authorized by the proposed Community Facilities District (CFD) will generate $22,415.06 annually, based on thirty-eight (38) net-new multi-family residential units at the FY 2022-2023 tax rate of $589.87 per multi-family unit and will be deposited to Account No. 2740-4800-45800. The Special Tax shall be used to pay for the following additional services in the District: police, fire protection and suppression, paramedic services, and park maintenance. The Special Tax will increase annually by the greater of two percent (2.00%), or the percentage change in the Consumer Price Index.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Staff has determined that the annexation of the does not constitute a “project” under the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378(b)(4) because such annexation involves the creation of a government funding mechanism which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment.

ATTACHMENTS:

Attachment A - Annexation Map - 155 E. Covina Boulevard, Covina, Annexation 32 Attachment B - Resolution CC 2022-95
Attachment C - Resolution CC 2022-96
Attachment D - Resolution CC 2022-97
Respectfully submitted,

Page 2 of 28 ends

Attachment A
Annexation Map

Page 3 of 28 ends

RESOLUTION CC 2022-95

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, AUTHORIZING THE ANNEXATION OF TERRITORY
TO COMMUNITY FACILITIES DISTRICT NO. 2007-1 (ANNEXATION NO. 32) AND AUTHORIZING THE LEVY OF A SPECIAL TAX AND

SUBMITTING THE LEVY OF TAX TO THE QUALIFIED ELECTORS
WHEREAS, this Council, on August 16, 2022, adopted Resolution CC 2022-86 (hereafter referred to as the “Resolution of Intention”) stating its intention to annex territory to City of Covina Community Facilities District No. 2007-1 (Public Services) (“CFD No. 2007-1”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); and WHEREAS, a copy of the Resolution of Intention, which states the authorized services to be provided and financed by CFD No. 2007-1, and a description and map of the proposed boundaries of the territory to be annexed to CFD No. 2007-1 (“Annexation No. 32”), is on file with the City Clerk and the provisions thereof are fully incorporated herein by this reference as if fully set forth herein; and
WHEREAS, on the 20th of September, 2022, this Council held a noticed public hearing as required by the Act and the Resolution of Intention relative to the proposed annexation of territory to CFD No. 2007-1; and
WHEREAS, at said hearing all interested persons desiring to be heard on all matters pertaining to the annexation of territory to CFD No. 2007-1 and the levy of said special taxes within the area proposed to be annexed were heard and a full and fair hearing was held; and WHEREAS, prior to the time fixed for said hearing, written protests had not been filed against the proposed annexation of territory to CFD No. 2007-1 by (i) 50% or more of the registered voters, or six registered voters, whichever is more, residing in CFD No. 2007-1, or (ii) 50% or more of the registered voters, or six registered voters, whichever is more, residing in the territory proposed to be annexed to CFD No. 2007-1, or (iii) owners of one-half or more of the area of land in the territory within CFD 2007-1 and not exempt from special tax, or (iv), owners of one-half or more of the area of land in the territory proposed to be annexed to CFD No. 2007- 1 and not exempt from the special tax; and
WHEREAS, a boundary map for Annexation No. 32 to CFD No. 2007-1 has been filed with the County Recorder of the County of Los Angeles, which map shows the territory to be annexed in these proceedings, and a copy thereof is on file with the City Clerk.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Recitals. The above recitals are all true and correct.

SECTION 2. Authorization. All prior proceedings taken by this Council with respect to CFD No. 2007-1 and the proposed annexation of territory thereto have been duly considered and are hereby determined to be valid and in conformity with the Act.

Page 4 of 28 ends

Resolution CC 2022-95 Page 2 of 4
SECTION 3. Boundaries. The description and map of the boundaries of the territory to be annexed to CFD No. 2007-1, on file with the City Clerk, are hereby finally approved, are incorporated herein by reference, and shall be included within the boundaries of CFD No. 2007- 1, and said territory is hereby annexed to CFD No. 2007-1, subject to voter approval of the levy of the special taxes therein as hereinafter provided.

SECTION 4. Services. The services which CFD No. 2007-1 is authorized to finance are in addition to those provided in or required for the territory within CFD No. 2007-1 and the territory to be annexed to CFD No. 2007-1 and will not be replacing services already available.

A general description of the services to be financed is as follows:

PUBLIC SERVICES
New police services, fire protection and suppression services, paramedic services, and park maintenance, including but not limited to (i) the costs of contracting services, (ii) related facilities, equipment, vehicles, ambulances, fire apparatus and supplies, (iii) the salaries and benefits of City staff that directly provide police services, fire protection and suppression services, paramedic services, and park maintenance respectively, and (iv) City overhead costs associated with providing such services within CFD No. 2007-1. The Special Tax provides only partial funding for Public Services.

SECTION 5. Special Taxes. It is the intention of this City Council that, except where funds are otherwise available, a special tax sufficient to pay for said services to be provided in CFD No. 2007-1 and the territory proposed to be annexed as part of Annexation No. 32, secured by recordation of a continuing lien against all non-exempt real property in Annexation No. 32, will be levied annually within the boundaries of Annexation No. 32 from and after the annexation of such property to CFD No. 2007-1. The special taxes shall be those as originally authorized through the formation of CFD No. 2007-1 and adopted by Ordinance of this legislative body, and no changes or modifications are proposed in the special taxes from those as originally set forth and made applicable to CFD No. 2007-1.

For particulars as to the rate and method of apportionment of the proposed special tax (the “RMA”), reference is made to the attached and incorporated Exhibit “A,” which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within Annexation No. 32 to clearly estimate the maximum annual amount that said person will have to pay on said special tax.

SECTION 6. Election. The provisions of the Resolution of Intention of the City, each as heretofore adopted by this Council, are by this reference incorporated herein as if fully set forth herein.
(a) Pursuant to the provisions of the Act, the proposition of the levy of the special tax within Annexation No. 32 shall be submitted to the voters within Annexation No. 32 at an election called therefore as hereinafter provided. This Council hereby finds that twelve (12) or more persons have not been registered to vote within Annexation No. 32 for each of the 90 days preceding the close of the hearing heretofore conducted and

Page 5 of 28 ends

Resolution CC 2022-95 Page 3 of 4
concluded by this Council for the purposes of these annexation proceedings. Accordingly, and pursuant to Section 53326 of the Act, this Council finds that for purposes of these proceedings the qualified electors are the landowners within Annexation No. 32 and that the vote shall be by said landowners, each having one vote for each acre or portion thereof such landowner owns in Annexation No. 32.
(b) Pursuant to Section 53326 of the Act, the election shall be conducted by mail ballot under applicable sections of the California Elections Code, commencing with Section 4000 of said code with respect to elections conducted by mail. The Council called a special election to consider the measures described and incorporated in the ballot, attached as Exhibit “B,” which election was held on September 20, 2022, (hereafter referred to as “Election Day”). The City Clerk was the election official to conduct the election and provided each landowner in the territory to be annexed to CFD No. 2007-1, a ballot in the form of Exhibit “B”, which form is hereby approved. The City Clerk has accepted the ballots of the qualified electors received prior to 7:30 p.m. on Election Day, whether received by mail or by personal delivery.
(c) This Council hereby further finds that the provision of Section 53326 of the Act requiring a minimum of 90 days to elapse before said election is for the protection of voters, has been waived by the voters and the date for the election hereinabove specified is established accordingly.

SECTION 7. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 20th day of September, 2022.

City of Covina, California
BY:

PATRICIA CORTEZ, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Deputy City Clerk

Page 6 of 28 ends

Resolution CC 2022-95 Page 4 of 4

CERTIFICATION
I, Fabian Velez, Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2022-95 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
____________________________________________
FABIAN VELEZ, Deputy City Clerk

Page 7 of 28 ends

Resolution CC 2022-95 Exhibit A

EXHIBIT A

FIRST AMENDED RATE AND METHOD OF APPORTIONMENT

Page 8 of 28 ends

FIRST AMENDED

RATE AND METHOD OF APPORTIONMENT

CITY OF COVINA
COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES) A special tax as hereinafter defined shall be levied on and collected for Community Facilities District No. 2007-1 (Public Services) of the City of Covina (“CFD No. 2007-1”) each Fiscal Year, commencing in Fiscal Year 2007-2008, in an amount determined by the City Council of the City of Covina through the application of the appropriate Special Tax for “Developed Property,” as described below. All of the real property in CFD No. 2007-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Act” means the Mello-Roos Communities Facilities Act of 1982 as amended, being Chapter

2.5, Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means any actual ordinary and necessary expense of the City of Covina, or designee thereof or both, to carry out the administration of CFD No. 2007-1 related to the determination of the amount of the levy of the Special Tax, the collection of the Special Tax including the expenses of collecting delinquencies, the payment of a proportional share of salaries and benefits of any City employee whose duties are directly related to the administration of CFD No. 2007-1, fees and expenses for counsel, Special Tax consultant and other consultants hired by the City in relation to CFD No. 2007-1, costs associated with responding to public inquiries regarding CFD No. 2007-1, and costs otherwise incurred in order to carry out the authorized purposes of CFD No. 2007-1.
“Affordable Housing” means any Unit within CFD No. 2007-1 that is subject to a written and recordable covenant, deed restriction, resale restriction, regulatory agreement or similar agreement with either the City of Covina or the Redevelopment Agency of the City of Covina, which restricts the amount of rent for that Unit to “affordable rent” (as that term is defined in California Health and Safety Code Section 50053) for a period of not less than fifty-five (55) years, or which restricts the purchase price for that Unit to “affordable housing cost” (as that term is defined in California Health and Safety Code Section 50052.5) for a period of not less than forty-five (45) years. A Unit shall no longer be considered Affordable Housing following the expiration or termination of the applicable covenant, restriction or agreement. “Annual Escalation Factor” means for the Special Tax, the greater of (i) two percent (2.00%), or (ii) the percentage change in the Consumer Price Index for the Calendar Year ending in December of the prior Fiscal Year.
“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel number within the boundaries of CFD No. 2007-1.

Page 9 of 28 ends

“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel number.
“Base Year” means Fiscal Year ending June 30, 2008.
“Boundary Map” means the map of the boundaries for CFD No. 2007-1, as approved by the City Council, and recorded with the County in maps of assessments and community facilities districts.
“Building Permit” means a permit for new construction for a residential dwelling Unit. For purposes of this definition, “Building Permit” shall not include permits for construction or installation of retaining walls, utility improvements, or other such improvements not intended for human habitation.
“Calendar Year” means the period commencing January 1 of any year and ending the following December 31.
“CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirements and providing for the levy and collection of the Special Tax.
“CFD No. 2007-1” means Community Facilities District No. 2007-1 (Public Services) established by the City under the Act.
“City” means the City of Covina.
“City Council” means the City Council of the City, acting as the Legislative Body of CFD No. 2007-1, or its designee.
“Consumer Price Index” means the index published by the U.S. Department of Labor, Bureau of Labor Statistics for all urban consumers in the Los Angeles-Riverside-Orange County area.
“County” means the County of Los Angeles.
“Developed Property” means all Assessor’s Parcels within CFD No. 2007-1 for which Building Permits were issued on or before May 1 preceding the Fiscal Year for which the Special Tax is being levied, provided that a Final Map was created on or before January 1 of the prior Fiscal Year and that each such Assessor's Parcel is associated with a Lot, as determined reasonably by the City and/or CFD administrator.
“Exempt Property” means all Assessor’s Parcels within CFD No. 2007-1 designated as being exempt from the Special Tax as determined in Section F. “Final Map” means a subdivision of property evidenced by the recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or the recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which Building Permits may be issued without further subdivision.

Page 10 of 28 ends

“Fiscal Year” means the period commencing on July 1 of any year and ending the following June 30.
“Lot” means an individual legal lot created by a Final Map for which a Building Permit could or has been issued.
“Maximum Special Tax” means the Maximum Special Tax determined in accordance with Section C, which can be levied by CFD No. 2007-1 in any Fiscal Year on Taxable Property within CFD No. 2007-1.
“Mixed-Use Property” means all Assessor’s Parcels of Developed Property for which Building Permit(s) have been issued for purposes of constructing Non-Residential Property and Residential Property. Residential Units on Mixed-Use Property shall be classified as MultiFamily Residential. “Multi-Family Residential” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing a residential structure consisting of two or more residential Units that share common walls, including, but not limited to, duplexes, triplexes, town homes, condominiums, apartment Units, and residential Units on Assessor’s Parcels that are considered Mixed-Use Property. “Non-Residential Property” means all Assessor’s Parcels for which a Building Permit was issued for any type of non-residential use.
“Public Property” means any property within the boundaries of CFD No. 2007-1 that is owned by or irrecoverably dedicated to the City, the federal government, the State of California, the County, CFD No. 2007-1, or other public agency. For purposes of this definition, property owned by the Redevelopment Agency of the City of Covina is not considered Public Property and any property owned by the Redevelopment Agency will be subject to the levy of a Special Tax in accordance with Sections C and D herein.
“Public Services” means new police services, fire protection and suppression services, paramedic services, and park maintenance, including but not limited to (i) the costs of contracting services, (ii) related facilities, equipment, vehicles, ambulances, fire apparatus and supplies, (iii) the salaries and benefits of City and Fire District staff that directly provide police services, fire protection and suppression services, paramedic services, and park maintenance, and (iv) City and Fire District overhead costs associated with providing such services within CFD No. 2007-1. The Special Tax provides only partial funding for police, fire protection services, paramedic services, and park maintenance.
“Special Tax” means any special tax authorized to be levied by CFD No. 2007-1 pursuant to the Act to fund the Special Tax Requirement.
“Single-Family Residential” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one single-family residential dwelling Unit.
“Taxable Property” means all Assessor’s Parcels within CFD No. 2007-1 that are not exempt from the levy of the Special Tax.

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“Tax Class” means any of the classes listed in Table 1 below. “Undeveloped Property” means all Assessor’s Parcels within CFD No. 2007-1 for which Building Permits have not been issued and that is not classified as Approved Property or Public Property.
“Unit” means any separate residential dwelling unit in which a person or persons may live, which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units and is not considered to be for commercial or industrial use.

B. CLASSIFICATION OF ASSESSOR’S PARCELS
Each Fiscal Year, beginning with Fiscal Year 2007-2008, each Assessor’s Parcel within CFD No. 2007-1 shall be classified as Developed Property or Exempt Property. In addition, each Fiscal Year, beginning with Fiscal Year 2007-2008, each Assessor’s Parcel of Developed Property shall be further classified as Single-Family Residential, Multi-Family Residential, or Mixed-Use Property.

C. MAXIMUM ANNUAL SPECIAL TAX
The Maximum Special Tax for each Assessor’s Parcel classified as Single-Family Residential, MultiFamily Residential, and Mixed-Use Property in Fiscal Year 2007-2008 shall be equal to the Maximum Special Tax set forth in Table 1.

TABLE 1

MAXIMUM ANNUAL SPECIAL TAX RATES
Fiscal Year 2007-2008
Tax Class Description Maximum
Special Tax
1 Single-Family Residential $531 per Unit
2 Multi-Family Residential $395 per Unit
3 Mixed-Use Property $395 per Unit
For each subsequent Fiscal Year following the Base Year, the Maximum Special Tax for each Assessor’s Parcel classified as Developed Property shall be adjusted by the Annual Escalation Factor.

Multiple Tax Classes
In some instances an Assessor’s Parcel may contain more than one Tax Class. The Maximum Special Tax levied on such Assessor’s Parcel shall be the sum of the Maximum Special Tax that can be imposed on all Tax Classes located on that Assessor’s Parcel.

D. METHOD OF APPORTIONMENT OF SPECIAL TAX
Commencing with Fiscal Year 2007-2008, and for each subsequent Fiscal Year, the Special Tax shall be levied on each Assessor’s Parcel of Developed Property at the applicable Maximum Special Tax as set forth in Section C.

Page 12 of 28 ends

E. TERMINATION OF SPECIAL TAX
The Special Tax shall be levied in perpetuity to fund Public Services provided to CFD No. 2007-1.

F. EXEMPTIONS
The City shall classify as Exempt Property: (i) Public Property, (ii) Non-Residential Property, (iii) Undeveloped Property, (iv) Affordable Housing, or (v) Assessor’s Parcels with public or utility easements making impractical their utilization for other purposes than those set forth in the easement.

G. APPEALS
Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the City Council not later than twelve months after having paid the first installment of the Special Tax that is disputed. A representative(s) of CFD No. 2007-1 shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the representative’s decision requires that the Special Tax for an Assessor’s Parcel be modified or changed in favor of the property owner, a cash refund shall not be made, but an adjustment shall be made to the Special Tax on that Assessor’s Parcel in the subsequent Fiscal Year(s).

H. MANNER OF COLLECTION
The annual Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2007-1 may collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Page 13 of 28 ends

Resolution CC 2022-95 Exhibit B

EXHIBIT B

SAMPLE BALLOT

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RESOLUTION CC 2022-96

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, CALLING A SPECIAL ELECTION AND SUBMITTING
TO THE VOTERS OF ANNEXATION NO. 32 OF CITY OF COVINA
COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES)

PROPOSITIONS REGARDING THE ANNUAL LEVY OF SPECIAL
TAXES WITHIN ANNEXATION NO. 32 TO FINANCE PUBLIC

SERVICES, AND THE ESTABLISHMENT OF AN APPROPRIATIONS
LIMIT
WHEREAS, pursuant to Section 53339.7 of the California Government Code the City Council (hereafter referred to as the “City Council”) of the City of Covina (the “City”) has adopted the resolution authorizing the annexation of territory to City of Covina Community Facilities District No. 2007-1 (Public Services), County of Los Angeles, State of California (“CFD No. 2007-1”); and
WHEREAS, by that resolution, the City Council called a special election on the propositions to be submitted to the voters of the territory proposed to be annexed to CFD No. 2007-1 (“Annexation No. 32”) with respect to the levy of special taxes therein for the financing of public services within CFD No. 2007-1; and
WHEREAS, pursuant to Section 53326 of the California Government Code, it is necessary that the City Council submit to the voters of Annexation No. 32 the annual levy of special taxes on taxable property within Annexation No. 32; and WHEREAS, pursuant to Section 53325.7 of the California Government Code and the provisions of said Code, the City Council may also submit to the voters of Annexation No. 32 a proposition for the establishment of an appropriations limit for Annexation No. 32; and WHEREAS, twelve (12) or more registered voters have not resided within the territory of Annexation No. 32 for each of the ninety (90) days preceding September 20, 2022.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Findings. The City Council finds that: (i) the foregoing recitals are true and correct; (ii) 12 persons have not been registered to vote within the territory to be annexed to CFD No. 2007-1 for each of the 90 days preceding the close of the public hearing on September 20th, 2022; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause (ii) above, the vote in the special election called by this resolution shall be by the landowners of the territory to be annexed to CFD No. 2007-1, whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within Annexation No. 32 which would be subject to the proposed special taxes if they were levied at the time of the election; (iv) the owners of all of the land in Annexation No. 32 by written consent (a) waived the time limits set forth in Section 53326 of the California Government Code

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Resolution CC 2022-96 Page 2 of 4
for holding the election called by this resolution and the election on the propositions (b) consented to the holding of the election on September 20th, 2022, (c) waived notice and mailed notice of the time and date of the election, (d) waived an impartial analysis by the City Attorney of the ballot propositions pursuant to Section 9280 of the California Elections Code and arguments and rebuttals pursuant to Sections 9281 to 9287, inclusive, and 9295 of that Code, and mailing of a statement pursuant to Section 9401 of that Code, and (e) waived a synopsis of the measures to be included in the official ballot for said elections pursuant to Section 12111 of that Code; and (v) the City Clerk (hereafter referred to as the “City Clerk”) has consented to the holding of the election on September 20th, 2022.

SECTION 2. Call of Election. The City Council hereby calls and schedules an election for March 15, 2022, on the proposition of the annual levy of special taxes on taxable property within Annexation No. 32 to CFD No. 2007-1 to finance public services within the CFD No. 2007-1, and on the proposition of the establishment of an appropriations limit for Annexation No. 32 to CFD No. 2007-1.

SECTION 3. Propositions. The propositions to be submitted to the voters of Annexation No. 32 at such special election shall be as follows:

Proposition A: Shall special taxes be levied annually on taxable property within the territory to be annexed into the City of Covina Community Facilities District No. 2007-1 (Public Services), County of Los Angeles, State of California (“Annexation No. 32”); and collected so long as the special taxes are needed to pay for police services, fire protection and suppression services, paramedic services, and park maintenance at the special tax rates and pursuant to the method of apportioning the special taxes set forth in Exhibit “B” to the Resolution of Intention, Resolution No. 07-6578, adopted by the City Council of the City of Covina on May 1, 2007, and as amended by Resolution No. 09-6743?
Proposition B: Shall an appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, be established for Annexation No. 32 to the City of Covina Community Facilities District No. 2007-1 (Public Services), County of Los Angeles, State of California, in the amount of $100,000 per annum? The First Amended Rate and Method of Apportionment is attached as Exhibit A.

SECTION 4. Conduct of Election. Except as otherwise provided in Section 5 hereof, the special election shall be conducted by the City Clerk in accordance with the provisions of the California Elections Code governing mail ballot elections of cities, and in particular the provisions of Division 4 (commencing with Section 4000), of that Code, insofar as they may be applicable.

SECTION 5. Election Procedures. The procedures to be followed in conducting the special election on (i) the proposition with respect to the levy of special taxes on taxable property within Annexation No. 32 to CFD No. 2007-1 to pay for public services, and (ii) the proposition with respect to the establishment of an appropriations limit for Annexation No. 32 to CFD No. 2007-1 in the amount of $100,000 per annum shall be as follows:

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Resolution CC 2022-96 Page 3 of 4
(a) Pursuant to Section 53326 of the California Government Code, ballots for the special election shall be distributed to the qualified electors by the City Clerk by mail or by personal service. (b) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and in particular Division 4 (commencing with Section 4000) of that Code with respect to election conducted by mail, the City Clerk, or designated official, shall mail or deliver to each qualified elector an official ballot in the appropriate form, and shall also mail or deliver to all such qualified electors a ballot pamphlet, instructions to voter, and a return identification envelope addressed to the City Clerk for the return of voted official ballots.
(c) The official ballot to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter.
(d) The return identification envelope mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of the declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk. (e) The information to voter form to be delivered by the City Clerk to the landowner-voter shall inform them that the official ballot shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by 7:30 p.m. on the 20th day of September, 2022; provided that if all qualified electors have voted, the election shall be closed with the concurrence of the City Clerk.
(f) Upon receipt of the return identification envelope, which are returned prior to the voting deadline on the date of the election, the City Clerk shall canvass the votes cast in the election, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot.

SECTION 6. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

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Resolution CC 2022-96 Page 4 of 4
APPROVED and PASSED this 20th day of September, 2022.

City of Covina, California
BY:

PATRICIA CORTEZ, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Deputy City Clerk

CERTIFICATION
I, Fabian Velez, Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2022-96 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
____________________________________________
FABIAN VELEZ, Deputy City Clerk

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Resolution CC 2022-96 Exhibit A

EXHIBIT A

FIRST AMENDED RATE AND METHOD OF APPORTIONMENT
(Please see Exhibit A to Resolution CC 2022-95, Attachment B, in this same packet)

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RESOLUTION CC 2022-97

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, MAKING CERTAIN FINDINGS, CERTIFYING THE

RESULTS OF AN ELECTION AND ADDING PROPERTY TO
COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES), ANNEXATION NO. 32
WHEREAS, the City Council of the City of Covina (the “City Council”), has previously formed a Community Facilities District pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, said Article 3.5 thereof. The existing Community Facilities District being designated as Community Facilities District No. 2007-1 (Public Services) (hereafter referred to as CFD No. 2007-1); and
WHEREAS, the City Council initiated proceedings to annex certain territory to Community Facilities District No. 2007-1 (Public Services), Annexation No. 32 (hereafter referred to as “Annexation No. 32”); and
WHEREAS, at this time the unanimous consent to the annexation of Annexation No. 32 has been received from the property owner or owners of such territory; and WHEREAS, twelve (12) or more registered voters have not resided within the territory of Annexation No. 32 for each of the ninety (90) days preceding September 20, 2022, therefore, pursuant to the Act the qualified electors of Annexation No. 32 shall be the “landowners” of Annexation No. 32 as such term is defined in Government Code Section 53317(f) and each such landowner who is the owner of record, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that she or he owns within; and WHEREAS, the time limit specified by the Act for conducting an election to submit the levy of the special taxes on the property within Annexation No. 32 to the qualified electors of Annexation No. 32 and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of Annexation No. 32; and WHEREAS, the City Council adopted on September 20, 2022 a resolution entitled “Resolution of the City Council of the City of Covina, California, Calling a Special Election and Submitting to the Voters of Annexation No. 32 of City of Covina Community Facilities District No. 2007-1 (Public Services) Propositions Regarding the Annual Levy of Special Taxes within Annexation No. 32 to Finance Public Services, and the Establishment of an Appropriations Limit” (the “Resolution Calling Election”), calling for a special election (the “Special Election”) of the qualified electors within Annexation No. 32; and
WHEREAS, pursuant to the terms of said resolution, which are by this reference incorporated herein, the Special Election was held on September 20, 2022, and the City Clerk has on file a Certificate of Election Official and Statement of Votes Cast (the “Certificate”), a copy of which is attached hereto as Exhibit A and by this reference incorporated herein; and

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Resolution CC 2022-97 Page 2 of 3
WHEREAS, the measures voted upon did receive the favorable 2/3’s vote of the qualified electors, and the City Council desires to declare the results of the Special Election; and WHEREAS, a map showing the territory to be annexed and designated as Annexation No. 32 (hereafter referred to as the “Annexation Map”), a copy of which is attached as Exhibit B hereto and incorporated herein by this reference, and a list of Properties to be annexed and landowners, a copy of which is attached as Exhibit C hereto and incorporated herein by this reference, has been submitted to the City Council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Recitals. The above recitals are all true and correct.

SECTION 2. Findings. This City Council does hereby determine as follows:
(a) The unanimous consent to the annexation of Annexation No. 32 to CFD No. 2007-1 has been given by all of the owners within Annexation No. 32 and such consent shall be kept on file in the Office of the City Clerk. (b) Twelve (12) or more registered voters have not resided within the territory of Annexation No. 32 for each of the ninety (90) days preceding September 20, 2022, therefore, pursuant to the Act the qualified electors of Annexation No. 32 shall be the “landowners” of such Annexation No. 32 as such term is defined in Government Code Section 53317(f). (c) Pursuant to the Certificate, the qualified electors of Annexation No. 32 have unanimously voted in favor of the levy of special taxes within Annexation No. 32 upon its annexation to CFD No. 2007-1 and the establishment of an appropriations limit for Annexation No. 32.

SECTION 3. Annexed Area. The boundaries and parcels of territory within Annexation No. 32 and on which special taxes will be levied in order to pay for the costs and expenses of authorized public services are shown on the Annexation Map as submitted to and hereby approved by this City Council.

SECTION 4. Declaration of Annexation. The City Council does hereby determine and declare that Annexation No. 32 is now added to and becomes a part of CFD No. 2007-1. The City Council, acting as the legislative body of CFD No. 2007-1, is hereby empowered to levy the authorized special tax within Annexation No. 32.

SECTION 5. Notice. Immediately upon adoption of this Resolution, notice shall be given as follows:

An Amendment to the Notice of Special Tax Lien (Notice of Annexation) shall be recorded in the Office of the County Recorder no later than fifteen (15) days after the date of adoption of this Resolution.

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Resolution CC 2022-97 Page 3 of 3
SECTION 6. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED AND PASSED this 20th day of September, 2022.

City of Covina, California
BY:

PATRICIA CORTEZ, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Deputy City Clerk

CERTIFICATION
I, Fabian Velez, Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2022-97 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
____________________________________________
FABIAN VELEZ, Deputy City Clerk

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Resolution CC 2022-97 Exhibit A

EXHIBIT A

CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST

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CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.

CITY OF COVINA )
The undersigned, ELECTION OFFICIAL OF THE CITY OF COVINA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DOES HEREBY CERTIFY that pursuant to the provisions commencing with Section 53326 of the Government Code of the State of California, I did canvass the returns of the votes cast at the

CITY OF COVINA
COMMUNITY FACILITIES DISTRICT NO. 2007-1
(PUBLIC SERVICES)
ANNEXATION NO. 32

SPECIAL ELECTION
in the City, held on September 20, 2022.

I FURTHER CERTIFY that this Statement of Votes Cast shows the whole number of votes cast in the area proposed to be annexed, Annexation No. 32 to Community Facilities District No. 2007- 1 (Public Services) of the City of Covina for or against the Measure are full, true and correct.

NUMBER OF ELIGIBLE VOTES: 2
VOTES CAST ON PROPOSITION A: YES
NO
VOTES CAST ON PROPOSITION B: YES
NO
WITNESS my hand this 20th day of September, 2022.
_____________________________________
City Clerk
City of Covina

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Resolution CC 2022-97 Exhibit B

EXHIBIT B

ANNEXATION MAP

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Resolution CC 2022-97 Exhibit C

EXHIBIT C

LIST OF PROPERTIES TO BE ANNEXED

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LIST OF PROPERTIES TO BE ANNEXED
ANNEXATION NO. 32
ASSESSOR PARCEL NO(S) 8406-019-098
Vesting Tract No.

N/A
Address
155 East Covina Boulevard, Covina, CA
Landowner
Century Communities of California, LLC
c/o Century Communities
4695 MacArthur Court, #350
Newport Beach, CA 92660

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CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. PH 2
Meeting: CC Regular Meeting - Sep 20 2022
Title: Resolution CC 2022-99, Approving Covina Town Center Specific Plan Amendment (CTCSPA) No. 3, Amending Various Chapters as Follows: Change the Boundaries between Civic and Cultural Core and Center Street Neighborhoods Districts in Chapter 2; Add and Modify Land Use Categories in Chapter 3; Reduce Rear Yard Setback, Clarify Building Height for Table 4-1 Building Form, Add Signs and Lighting Standards, and Minor Edits for Public Realm Sign Standards and Public Art Guidelines in Chapter 4; Modify and Add Definitions to Chapter 7; and Minor Edits in Chapters 2, 3, 4, 5, and 7 for Consistency and Housekeeping Purpose; and Making a Determination of Exemption Under California Environmental Quality Act (CEQA) Pursuant to CEQA Guidelines Section 15061(b)(3)
Presented By: Brian K. Lee, AICP
Recommendation: Adopt Resolution CC 2022-99, Approving Covina Town Center Specific Plan Amendment (CTCSPA) No. 3, amending various Chapters as follows: change the boundaries between Civic and Cultural Core and Center Street Neighborhoods Districts in Chapter 2; add and modify land use categories in Chapter 3; reduce rear yard setback, clarify building height for Table 4-1 Building Form, add signs and lighting standards, and minor edits for public realm sign standards and public art guidelines in Chapter 4; modify and add definitions to Chapter 7; and minor edits in Chapters 2, 3, 4, 5, and 7 for consistency and housekeeping purpose; and making a determination of exemption under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3).

EXECUTIVE SUMMARY / BACKROUND:

Since the original adoption of the Specific Plan in November 2019, staff has applied the development standards and design guidelines to new development projects and businesses. The staff determines that there are opportunities to further improve the selected provisions within the various chapters, which will facilitate development within the Specific Plan area. On August 23, 2022, the Planning Commission considered the proposed changes and received public testimony. Three persons participated in the virtual public meeting but did not provide comments. After concluding the public hearing, the Planning Commission at a 3-0-2 vote recommended approval to the City Council.

DISCUSSION:

The following summarizes the proposed changes and minor edits to the specific plan's various chapters, as illustrated in Attachment A.

1. Chapter 2
a. Change the boundaries between Civic and Cultural Core District and Center Street Neighborhood District by moving five parcels (APN: 8445-010-020, 85445-010-013. 8445-010-809, 8445-010-810, and 8445-101- 812) from Center Street Neighborhood District To Civic and Cultural Core District, affecting pages 2-6, 2- 16 and 2-19.
b.Modify Front Street/TOD/F.A.I.R. District on page 2-8 to change the distance criteria (from ¼ mile to ½ mile) from Covina Metrolink Station in using the Transit Oriented Development/High Density Residential (TOD/HDR) for mixed-use and standalone residential developments. c. Modify Civic and Cultural Core District on page 2-17 by adding the following criteria “Vacant or underutilized sites within ½ (one-half) mile of Covina Metrolink station may request to use the Transit Oriented Development /High Density Residential (TOD/HDR) Zone for land use density, design guidelines and standards for new mixed-use development or standalone residential development, subject to a Conditional Use Permit.”
d.Modify Front Street/TOD/F.A.I.R. District Figure 2-2 on page 2-7 by adding a symbol for the future pedestrian bridge.

2.Chapter 3
a.Add permitted and conditionally permitted land use categories to various zoning designations such as a list of accessory uses, culinary education and retail kitchenware, indoor food production, government facilities, body art, and specialty cigar lounge.
b.Minor edits for correction and clarification.
c.Modify the density for TOD/HDR for site less than 0.5 acres and modify FAR for non-residential use.

3.Chapter 4
a.Modify Table 4-1 Building Form on page 4-29 by reducing rear yard setback, adding new rear yard setback from the alley, adding building height to various Town Center Districts, and minor edits for clarification. b.Add standards to the following topics: Public Art Guidelines on Page 4-14, Public Realm Sign Standards on page 4-18, Architectural Projections on page 4-55, Lighting on page 4-58, Signs on page 4-60, and Accessory structures on page 4-64.

4.Chapter 5. Minor edits to the Pedestrian Bridge on page 5-7 by referencing pages 2-7 and 2-8 of Chapter 2.

5.Chapter 7.
a.Add a definition describing indoor food production (urban agriculture, vertical farms). b.Add examples to the definition of business and consumer support services such as computer and business/office equipment services, online ticket services, shoe repair shops, and tailor and seamstress services.
c.Add definition for barber shops and beauty salons, including hair, nail, and facial (neck up). d.Modify Personal Services definition as follows: move the barber shops, nail salons, beauty salons, and hair salons as a separate land use category shown in Table 3-2 of Chapter 3, move the shoe repair shops, tailor and seamstress, and ticket service shops to business and consumer services definition as examples, and adding standalone tanning and waxing salons, pet care services and laundry and dry cleaning services.

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e.Add a definition for specialty cigar lounge with on-site alcohol. The description indicates that it is a smoking establishment for a single type of product, cigar only, and the characteristics of such establishment.

FISCAL IMPACT:

The staff does not expect any fiscal impacts related to the Covina Town Center Specific Plan Amendment No. 3.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Pursuant to the California Environmental Quality Act (CEQA), the City has analyzed the project, proposed Covina Town Center Specific Plan Amendment No. 3, and concluded that the project is exempt from the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15061(b)(3) because the activity in question does not have a significant effect on the physical environment. Furthermore, the City has determined that the project does not involve substantial changes which will result in new significant environmental effects, and that the project does not involve new information of substantial importance, which shows that the project will have significant effects not discussed in the prior EIR (SCH – 2018081009) and SOC.

All potential environmental impacts associated with the adoption of the 2019 Covina Town Center Specific Plan (CTCSP) are adequately addressed by the prior certified EIR (SCH – 2018081009) and SOC, and the mitigation measures contained in the prior certified EIR (SCH – 2018081009) will reduce those impacts to a level that is less than significant. The CTCSP EIR serves as the previous CEQA document considered in this CEQA Analysis and is hereby incorporated by reference.

ATTACHMENTS:

Attachment A - Resolution CC 2022-99
Attachment B - Planning Commission Resolution 2022-014PC Respectfully submitted,

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RESOLUTION CC 2022-99

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, APPROVING COVINA TOWN CENTER SPECIFIC PLAN
AMENDMENT (CTCSPA) NO. 3 AND AMEND VARIOUS CHAPTERS AS
FOLLOWS: CHANGE THE BOUNDARIES BETWEEN CIVIC AND
CULTURAL CORE AND CENTER STREET DISTRICTS IN CHAPTER 2; ADD AND MODIFY LAND USE CATEGORIES IN CHAPTER 3; REDUCE REAR YARD SETBACK, CLARIFY BUILDING HEIGHTS IN TABLE 4-1

BUILDING FORM, ADD SIGNS AND LIGHTING STANDARDS, AND

MINOR EDITS FOR PUBLIC REALM SIGN STANDARDS AND PUBLIC
ART GUIDELINES IN CHAPTER 4; MODIFY AND ADD DEFINITIONS TO CHAPTER 7; AND MINOR EDITS IN CHAPTERS 2, 3, 4, 5, AND 7 FOR CONSISTENCY AND HOUSEKEEPING PURPOSE; AND MAKING A

DETERMINATION OF EXEMPTION UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (“CEQA”) PURSUANT TO CEQA
GUIDELINES SECTION 15061(b)(3).

WHEREAS, on November 29, 2019, the City Council of the City of Covina adopted Resolution CC 19-112 and certified the Final Environmental Impact Report (Final EIR) for the Covina Town Center Specific Plan (CTCSP) Project as being in compliance with the California Environmental Quality Act (CEQA). The City Council further adopted Environmental Findings, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program for the CTCSP Project. The City Council further determined that all of the findings were based upon the information and evidence set forth in the Final EIR and in the record of the proceedings.

The City Council further determined that each of the overriding benefits stated in the Findings and the Statement of Overriding Considerations were justified despite any significant unavoidable impacts identified in the EIR; and
WHEREAS, the long term strategies of the CTCSP are to promote transit-oriented development, increase opportunities of rail ridership, improve first/last mile opportunities, and revitalize and reinvigorate Covina’s town center; and
WHEREAS, staff has found there is a need to modify chapter 3 and add new land use categories and expand the local market on experiences, goods and services not currently available in the Specific Plan area, and to further improve, add and clarify standards and guidelines regarding setbacks, building height, signs, lighting, and public art within chapter 4; and WHEREAS, staff found there are minor editing and technical changes or additions needed for consistency and housekeeping purposes within chapters 2, 3, 4, 5 and 7 of the CTCSP document; and
WHEREAS, pursuant to the California Environmental Quality Act (CEQA), the City has analyzed the project, proposed Covina Town Center Specific Plan Amendment, and concluded that the project is exempt from the requirements of the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15061(b)(3), because the activity in question does not have a significant effect on the physical environment. Furthermore, the City has determined that the project does not involve substantial changes which will result in new significant environmental

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Resolution CC 2022-99 Page 2 of 4
effects, and that the project does not involve new information of substantial importance, which shows that the project will have significant effects not discussed in the prior EIR (SCH – 2018081009) and SOC. All potential environmental impacts associated with the adoption of the 2019 Covina Town Center Specific Plan (CTCSP) are adequately addressed by the prior certified EIR (SCH – 2018081009) and SOC, and the mitigation measures contained in the prior certified EIR (SCH – 2018081009) will reduce those impacts to a level that is less than significant. The CTCSP EIR serves as the previous CEQA document considered in this CEQA Analysis and is hereby incorporated by reference; and
WHEREAS, on July 26, 2022, and continued to August 9, 2002 and August 23, 2022, the Planning Commission conducted a duly noticed public hearing to consider the proposed Amendment No. 3 to CTCSP. The Planning Commission concluded the hearing on August 23, 2022. The Planning Commission, by a 3-0-2 vote, adopted Resolution No. 2022-014 PC recommending to the City Council the approval of the proposed Amendment No. 3 to the CTCSP, as outlined in the attached Exhibit A to this Resolution CC 2022-99; and WHEREAS, on September 20, 2022, the City Council of the City of Covina held a duly noticed public hearing to consider the proposed Amendment No. 3 to the CTCSP and concluded the hearing on that date; and
WHEREAS, all legal prerequisites prior to adoption of this Resolution have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The foregoing recitals are true and correct and are incorporated herein and made an operative part of this Resolution.

SECTION 2. In considering this application relative to the California Environmental Quality Act ( CEQA) Guidelines, the City Council affirms the determination of the Planning Commission that the Covina Town Center Specific Plan Amendment No. 3 is not subject to the CEQA pursuant to CEQA Guidelines Sections 15061(b)(3). Where it can be seen 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. Further, the City Council determined that the proposed Amendment No. 3 does not involve substantial changes which will result in new significant environmental effects, and that the project does not involve new information of substantial importance, which shows that the project will have significant effects not discussed in the prior EIR (SCH – 2018081009) and SOC. All potential environmental impacts associated with the adoption of the 2019 Covina Town Center Specific Plan (CTCSP) are adequately addressed by the prior certified EIR (SCH – 2018081009) and SOC, and the mitigation measures contained in the prior certified EIR (SCH – 2018081009) will reduce those impacts to a level that is less than significant.

SECTION 3. The City Council has reviewed the proposed Amendment No. 3 to the CTCSP, the Planning Commission hearing input and reports, and all evidence received by the Planning Commission and at the City Council hearings, and all documents and evidences are hereby incorporated by reference into this Resolution. After giving full consideration to all evidence presented at the public hearing, both oral and written, and after being fully informed, the

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Resolution CC 2022-99 Page 3 of 4
City Council does hereby find and decide that the proposed Amendment No. 3 to the CTCSP are consistent with the public interest and with the City’s General Plan for the following reasons:
a. The proposed Amendment No. 3 to the CTCSP meet the long term strategies of the Specific Plan to promote transit-oriented development, increase opportunities of rail ridership, improve first/last mile opportunities, and revitalize and reinvigorate Covina’s town center;
b. The proposed Amendment No. 3 to the CTCSP is a unique opportunity to facilitate redevelopment that capitalizes on Covina’s downtown strengths, and focuses on access to the regional transportation network (Land Use Element III C.1.a.6); and

SECTION 4. In consideration of the findings stated above, the City Council of the City of Covina does hereby approve the Amendment No. 3 to the CTCSP, as set forth in Exhibit “A” (Amendments) incorporated herein by this reference as though set forth in full.

SECTION 5. The documents and materials that constitute the record of proceedings on which these findings and this Resolution are based are located at the City Clerk’s Office located at 125 E. College Street, Covina, CA 91723. The custodian of these records is the City Clerk.

SECTION 6. Effective Date. This Resolution shall be effective upon adoption.

SECTION 7. Certification. The City Clerk shall certify to the passage and adoption of this Resolution and shall enter the same in the Book of Original Resolutions.

SIGNED AND APPROVED this 20th day of September, 2022.

City of Covina, California
BY:

PATRICIA CORTEZ, Mayor
ATTEST:
______________________________________
FABIAN VELEZ, Deputy City Clerk

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Resolution CC 2022-99 Page 4 of 4

CERTIFICATION
I, Fabian Velez, Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2022-99 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
__________________________________________
FABIAN VELEZ, Deputy City Clerk

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Resolution CC 2022-99 Exhibit A
RESOLUTION CC 2022-99

EXHIBIT A
A. SUMMARY LIST OF CHANGES FOR AMENDMENT NO. 3 TO COVINA TOWN

CENTER SPECIFIC PLAN

1. Chapter 2
a. Change the boundaries between Civic and Cultural Core District and Center Street Neighborhood District by moving five parcels (APN: 8445-010-020, 85445-010-013. 8445-010-809, 8445-010-810, and 8445-101-812) from Center Street Neighborhood District To Civic and Cultural Core District, affecting pages 2-6, 2-16 and 2-19.
b. Modify Front Street/TOD/F.A.I.R. District on page 2-8 to change the distance criteria (from ¼ mile to ½ mile) from Covina Metrolink Station in using the Transit Oriented Development/High Density Residential (TOD/HDR) for mixed-use and standalone residential developments.
c. Modify Civic and Cultural Core District on page 2-17 by adding the following criteria “Vacant or underutilized sites within ½ (one-half) mile of Covina Metrolink station may request to use the Transit Oriented Development /High Density Residential (TOD/HDR) Zone for land use density, design guidelines and standards for new mixed-use development or standalone residential development, subject to a Conditional Use Permit.”
d. Modify Front Street/TOD/F.A.I.R. District Figure 2-2 on page 2-7 by adding a symbol for the future pedestrian bridge.

2. Chapter 3
a. Add permitted and conditionally permitted land use categories to various zoning designations such as a list of accessory uses, culinary education and retail kitchenware, indoor food production, government facilities, body art, and specialty cigar lounge.
b. Minor edits for correction and clarification.
c. Modify the density for TOD/HDR for site less than 0.5 acres and modify FAR for non-residential use.

3. Chapter 4
a. Modify Table 4-1 Building Form on page 4-29 by reducing rear yard setback, adding new rear yard setback from the alley, adding building height to various Town Center Districts, and minor edits for clarification. b. Add standards to the following topics: Public Art Guidelines on Page 4-14, Public Realm Sign Standards on page 4-18, Architectural Projections on page 4-55, Lighting on page 4-58, Signs on page 4-60, and Accessory structures on page 4-64.

4. Chapter 5. Minor edits to the Pedestrian Bridge on page 5-7 by referencing pages 2-7 and 2-8 of Chapter 2.

5. Chapter 7.
a. Add a definition describing indoor food production (urban agriculture, vertical

Page 8 of 45 ends

farms).
b. Add examples to the definition of business and consumer support services such as computer and business/office equipment services, online ticket services, shoe repair shops, and tailor and seamstress services.
c. Add definition for barber shops and beauty salons, including hair, nail, and facial (neck up).
d. Modify Personal Services definition as follows: move the barber shops, nail salons, beauty salons, and hair salons as a separate land use category shown in Table 3-2 of Chapter 3, move the shoe repair shops, tailor and seamstress, and ticket service shops to business and consumer services definition as examples, and adding standalone tanning and waxing salons, pet care services and laundry and dry cleaning services.
e. Add a definition for specialty cigar lounge with on-site alcohol. The description indicates that it is a smoking establishment for a single type of product, cigar only, and the characteristics of such establishment.

B. ATTACHMENT OF MULTIPLE PAGES OF CHAPTER 2, 3, 4, 5 AND 7 SHOWING THE PROPOSED CHANGES:

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Mult
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Page 42 of 45 ends

WHEREAS, on November 29, 2019, the City Council of the City of Covina adopte Resolution CC 19-112 and certi?ed the Final Enviromnental Impact Report (Final EIR)dfor the Covina Town Center Speci?c Plan (CTCSP) Project as being in compliance with the California EnvironmentalQuality Act (CEQA). The City Council ?irther adopted EnvironmentalFindings, a Statement of Overriding Considerations, and a Mitigation Monitoring and Reporting Program for the CTCSP Project. The City Council further determinedthat all of the ?ndings were base upon the information and evidence set forth in the Final EIR and in the record of the proceedings. d The City Council further determined that each of the overriding bene?ts stated in the Findings an the Statement of Overriding Considerations were justi?ed despite any signi?cant unavoidable d impacts identi?ed in the Final EIR; and
WHEREAS, the long term strategies of the CTCSP are to promote transit-oriented development, increase opportunities of rail ridership, improve ?rst/last mile opportunities, and revitalize and reinvigorate Covina’s town center; and
WHEREAS, staff has found there is a need to modify chapter 3 and add new land use categories and expandthe local market on experiences,goods and servicesnot currently available in the Speci?c Plan area, and to ?irther improve,add and clarify standards and guidelinesregarding setbacks, building height, signs, lighting, and public art within chapter 4; and WHEREAS, staff found there are minor editing and technical changes or additions neede for consistency and housekeeping purposes within chapters 2, 3, 4, 5 and 7 of the CTCSP d RESOLUTION NO. 2022-14 PC

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY

OF COVINA, CALIFORNIA, RECOMMENDING THAT THE
CITY COUNCIL APPROVE AMENDMENT NO. 3 TO

COVINA TOWN CENTER SPECIFIC PLAN AND
AMEND VARIOUS CHAPTERS AS FOLLOWS:

CHANGE THE BOUNDARIES BETWEEN CIVIC AND

CULTURAL CORE AND CENTER STREET DISTRICTS
IN CHAPTER 2; ADD LAND USE CATEGORIES IN
CHAPTER 3; REDUCE REAR YARD SETBACK,
CLARIFY BUILDING HEIGHTS IN TABLE 4-1

BUILDING FORM, ADD SIGNS AND LIGHTING

STANDARDS, AND MINOR EDITS FOR PUBLIC

REALM SIGN STANDARDS AND PUBLIC ART
GUIDELINES IN CHAPTER 4; MODIFY AND ADD
DEFINITIONS TO CHAPTER 7; AND MINOR EDITS IN
CHAPTERS 2, 3, 4, 5, AND 7 FOR CONSISTENCY AND
HOUSEKEEPING PURPOSE; AND MAKING A

DETERMINATION OF EXEMPTION UNDER THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT
(“CEQA”)

Page 43 of 45 ends

document; and
WHEREAS, pursuant to the California Environmental Quality Act (CEQA), the City has analyzed the project, proposed Covina Town Center Speci?c Plan Amendment, and concluded that the project is exempt from the requirements of the California Environmental Quality Act (CEQA) per CEQAGuidelines Section 15061(b)(3), because the activity in question does not have a signi?cant effect on the physical environment. Furthermore, the City has determinedthat the project does not involve substantial changes which will result in new signi?cant environmenta l effects, and that the project does not involve new information of substantial importance, which shows that the project will have signi?cant effects not discussed in the prior EIR (SCH — 2018081009) and SOC. All potential environmental impacts associated with the adoption of the 2019 Covina Town Center Speci?c Plan (CTCSP) are adequately addressed by the prior certi?ed EIR (SCH — 2018081009) and SOC, and the mitigation measures contained in the prior certi?ed EIR (SCH — 2018081009) will reduce those impactsto a level that is less than signi?cant. The CTCSP EIR serves as the previous CEQAdocument considered in this CEQAAnalysis and is hereby incorporatedby reference; and
WHEREAS, on July 26, 2022, the Planning Commission conducted a duly notice public hearing to consider the proposed Amendment No. 3 to the CTCSP and continuedthe hearing to August 9, 2022 and August 23, 2022; and
WHEREAS, on August 23, 2022, the Plarming Commission consider the propose Amendment No. 3 to the CTCSP, the public hearing input and reports, and all evidencedreceived at the hearings, and concluded the hearing on that date; and WHEREAS, all legal prerequisites prior to adoption of this Resolution have occurred.

NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF
COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Based on the entire record, and reviewing the proposed Amendment No. 3 to the CTCSP, the Addendum and written comments thereon, and considering all oral and written information regarding the proposed Amendment No. 3 on July 26, 2022, August 9, 2022, an August d 23, 2022, the Planning Commission hereby ?nds, determines, and resolves as follows:
a. The above recitals are true and correct, and the Planning Commission hereby incorporatesthem into this Resolution by this reference. b. The proposed Amendment No. 3 to the CTCSP has been environmentally reviewed pursuant to the provisions of CEQAand the State CEQAGuidelines. c. The proposed Amendment No. 3 to the CTCSP is consistent with the City of Covina General Plan for the reasons set forth in Section 3 of City Council Resolution attached hereto as Exhibit “2” and incorporatedherein by this reference.

SECTION 2. Planning Commission Recommendation. After giving full consideratio

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to all evidence presented at the public hearings, and in c eration ngs stated in the attached proposed City Council Resolution listed below, the Planning Commission of the City of Covina does hereby recommend that the City Council of the City of Covina adopt the proposed Resolution CC 2022- approving the proposed Amendment No. 3 to the CTCSP attached hereto as Exhibit “2”:
a. Council Draft Resolution CC 2022-XX, A Resolution of the City Council of the City of Covina, California, Approving Amendment No. 3 to the Covina Town Center Speci?c Plan, and amend various chapters (CTCSP) as follows: change the boundaries between Civic and Cultural Core and Center Street Neighborhoods Districts in Chapter 2; add and modify land use categories in Chapter 3; reduce rear yard setback, clarify building height for Table 4-1 Building Form, add signs and lighting standards, and minor edits for public realm sign standards and public art guidelines in Chapter 4; modify and add de?nitions to Chapter 7; and minor edits in Chapters 2, 3, 4, 5, and 7 for consistency and housekeeping purpose; and making a determination of exemption underthe CaliforniaEnvironmentalQuality Act (“CEQA”).

SECTION 3. The documents and materials that constitute the record of proceedings on which these ?ndings and this Resolution are based are located at the City C1erk’soffice or the Community Development Department, Planning Division, located at 125 E. College Street, Covina, CA 91723 or at www.covinaca.gov. The custodian of these records is the City Clerk.

SECTION 4. The Planning Commission Secretary shall certify the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED by the members of the Planning Commission of Covina this 23"‘day of August, 2022.
“C.M....»

SUSAN ZERMENO, CHAIR

CITY OF COVINA PLANNING COMMISSION
I hereby certify that the foregoing is a true copy of a Resolution adopted by the Planning Commission of the City of Covina at a regular meeting thereof held on the 23”’day of August, 2022, by the following vote of the Planning Commission:

AYES: CONNORS, RODRIGUEZ, ZERMENO
NOES: NONE
ABSTAIN: NONE
ABSENT: RICHARDSO CMEEKIN
GOMMISSIONSEC -a TARY

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CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. PH 3
Meeting: CC Regular Meeting - Sep 20 2022
Title: Consider Proposed Lease Financing Between the City and The Covina Public Financing Authority, And Issuance of a Note by The Authority, In Order to Assist the City with Financing the Acquisition of The Covina Center for The Performing Arts Located At 104 North Citrus Avenue, Covina, CA 91723
Presented By: Chris Marcarello, City Manager
Recommendation: It is recommended that the City Council (the “City Council”) of the City of Covina (the “City”) and the Board of Directors (the “Board of Directors”) of the Covina Public Financing Authority (the “Authority”) as follows:

1. Conduct a public hearing of the City of Covina and the Board of Directors of the Covina Public Financing Authority; and

2. Approve Resolution PFA 2022-01, A Resolution of the Board of Directors of the Covina Public Financing Authority, Authorizing Execution and Delivery of a Site Lease, A Lease Agreement, and Other Related Documents in Connection with the Lease Financing Arrangement with the City and Certain Other Actions Relating Thereto; and

3. Approve Resolution CC 2022-104, A Resolution of the City Council of the City of Covina Authorizing Execution and Delivery of a Site Lease, a Lease Agreement, and Other Related Documents in Connection with the Lease Financing Arrangement with the City and Certain Other Actions Relating Thereto; and

4. Approve Resolution CC 2022-105, A Resolution of the City Council of the City of Covina Amending the Fiscal Year 2022-2023 Operating Budget to Appropriate $1,820,000 from the Measure CC Fund and $2,750,000 from the Sewer Fund in Conjunction with other Specified Funding Sources for the Purpose of Funding the Purchase of the Covina Center for the Performing Arts Property Located at 100 – 104 N. Citrus Avenue (APN: 8445-009-043) and 110 – 112 N. Citrus Avenue (APN 8445-009-012), and Establish Fund 6400 as the Theater Fund; and

5. Approve the Purchase and Sale Agreement ("PSA") for the Covina Center for the Performing arts - for the Purchase of Property Located at 100–104 N. Citrus Avenue, Covina, CA 91723 (APN: 8445-009-043) between the Champion Family Foundation and the City of Covina; and

6. Approve the Purchase and Sale Agreement (“PSA”) for the Covina Center for the Performing Arts – for the Purchase of Property Located at 110 – 112 N. Citrus Avenue (APN: 8445-009-012) between the Champion Family Trust and the City of Covina.; and

7. Appoint 2 Members of the City Council to Serve on a Theater Operations Review and Selection Committee in Vetting Potential Operators for the CCPA.

EXECUTIVE SUMMARY:

The Covina Center for the Performing Arts (“CCPA”) was designed by Frank Cox and built in 1920 at the northeast corner of Citrus Avenue and Badillo Street. Over the last 100 years, the CCPA has been an integral resource for Downtown Covina and the broader community – serving as a film house, performing arts venue and a local entertainment destination. Since its construction, the CCPA has undergone extensive modernization efforts, with its current owners completing seismic retrofitting, comprehensive interior improvements and the addition of audio/visual upgrades that uniquely serve a variety of live musical and theatrical performances.

During the Covid-19 pandemic, the CCPA sat vacant and was unable to host live performances due to regional health orders. Also, during this time, the space was listed for sale and the City entered into discussions to acquire the facility. The City’s efforts would help to preserve the CCPA’s status as a local landmark in the Downtown commercial core and maintain its significance as a valuable performing arts space in the San Gabriel Valley.

In fall 2021, to bolster the City’s efforts to acquire the CCPA, the City was awarded a $3 million appropriation from the State budget with the support of Senator Susan Rubio. These funds, combined with a portion ($1.1 million) in Measure CC Funds backfilled with Revenue Replacement American Rescue Plan Act funds via the Federal budget will provide roughly 60% of the purchase price for the CCPA. As proposed, the balance of the price ($2.75 million) will be financed via an inter-fund loan and require no general funds to complete the purchase.

The terms of the loan include a 20-year repayment schedule, an interest rate equal to the 20-year State Local Agency Investment Fund (LAIF) and the pledge of CCPA operating revenues to fund debt service payments.

BACKGROUND:

The Covina Center for the Performing Arts Theater (CCPA) opened its doors in 1920. For 101 years, it has unified friends and families by bringing programmatic services, art, and different forms of expression. CCPA is an essential linkage from times past in the San Gabriel Valley, from history to local entertainment destination, film house, and performing arts space.

Over time, the CCPA was upgraded with seismic retrofitting, the addition of an outside theater marquee, and interior improvements to make the space suitable for performing arts. In the 1980s, CCPA was transformed into the Covina Playhouse. It hosted performing arts groups like the West Covina Players who presented performances like the Fiddler on the Roof and Kander & Ebb’s Cabaret. Later in the 2000s, the CCPA’s owner underwent extensive modernization efforts, including additional seismic retrofitting and comprehensive interior improvements to make it the special performing arts venue it is today. As it currently stands, this exceptional space is a regional cultural destination, providing an intimate venue that offers a wide range of musical and performing arts performances.

DISCUSSION:

During the Covid-19 pandemic, the CCPA sat vacant and was unable to host performance groups due to regional health orders. Also, during this time, the space was listed for sale and the City of Covina entered into discussions to acquire the site. The City’s efforts would help to preserve CCPA’s status as a local landmark in the City’s downtown commercial core and maintain its significance as a valuable performing arts space for the San Gabriel Valley. As proposed, the City would look to acquire the CCPA and operate the space to serve a wide range of needs and segments of the broad community as follows:
• Performing arts (theatrical, musical) programs;
• Comedy performances;
• Youth performing arts programs (in conjunction with local schools and non-profit organizations); • Public benefit programs that provide free/low-cost entertainment performances; • Shared office space to serve independent/small businesses in need of office and meeting space; • Restaurant space;
• Banquet and meeting space; and
• Marketing and outreach to expand patronage and enhance downtown Covina’s appeal as a regional destination.

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Market Appraisal/Purchase and Sale Agreement
In the fall of 2021, the City completed an appraisal to assess the CCPA’s market value (Attachment 1). This appraisal was subsequently updated in July 2022. Due to the unique characteristics of the facility and its potential use as an income property, there are several alternatives that may be utilized to derive its value. One alternative is using a Sales Approach – whereby the market value is calculated using the characteristics of the property and its fixed improvements relative to recent comparable sales of similar properties. Another alternative is using an Income Approach – whereby durable rental income and market rental data arecompared with operating expenses and vacancy factors to derive the net operating income for the facility. Using comparable capitalization rates of similar properties, a market value is obtained for the facility. • CCPA Property Description
The CCPA includes several components – a 17,793 square foot theater space, roughly 6,250 square feet of retail space, roughly 2,400 square feet of office space, a 2,500 square feet full-service upstairs restaurant and bar space, and a cellular antenna tower lease for equipment that is affixed to the roof of the facility. • Sales Approach
An analysis of theater property sales was completed based on the four comparable properties listed below.

Pricing adjustments were made based on location, each facility’s construction quality and condition, and available parking. Based on this assessment, an adjusted average price per square foot of $252/ft and an adjusted median price per square foot of $256/ft were derived. Based on these comparable sales, the appraiser determined that a $255/ft price was acceptable and estimated a total value of $6.77 million.

The comparable sold properties are further detailed in Attachment 1 and summarized below. • Income/Direct Capitalization Approach
The CCPA has existing lease agreements for roughly 6,250 square feet of retail and office spaces onsite.

Lease payments for these spaces vary from $0.82 to $2.22/ft.

Page 3 of 149 ends

An analysis of existing rents for comparable theater, restaurant, retail and office spaces was completed.

Pricing adjustments were made based on location, each facility’s construction quality, condition and available seating. Based on this assessment, an adjusted average price per square foot of $2.13/ft and an adjusted median price per square foot of $2.14/ft was derived. Based on these comparable sales, the appraiser determined that a $2.15/ft cost for the theater space was acceptable. Similar calculations were made to determine a $2.50/ft cost for the restaurant space, a $1.50/ft cost for the retail space and a $1.00/ft cost for the office spaces.

In order to calculate a capitalization rate for the CCPA, the appraiser utilized comparable sales for theater/nightclub venues in the greater Southern California region. Based on this analysis, a capitalization rate of 6.25% was determined to be acceptable.

A pro forma analysis was completed for the facility using existing rent figures, market rental costs for comparable spaces, market vacancy factors/exposure time resulting from vacancies and historical operating costs. Based on these comparable sales, the appraiser determined that a $252/ft price was acceptable and estimated a total value of $6.69 million.

The comparable leased theater properties, office spaces, restaurants and retail spaces are further detailed in Attachment 1. A comparison of theater venues is summarized below. • Reconciliation
As noted, the appraiser determined a total market value of $6.77 million utilizing the sales comparison approach and $6.69 million utilizing the income approach. In comparing these values, the appraiser noted that a typical buyer profile places a greater emphasis on the sales approach, and determined the final market value to be $6.75 million.

Financing Structure
The City is extremely fortunate to have received grant funding to make the acquisition of the CCPA possible. In fact, approximately 60% of the purchase price will be funded through external grant monies – including a $3 million appropriation from Senator Rubio via the State budget and $1.1 in Measure CC Funds backfilled with

Page 4 of 149 ends

Revenue Replacement American Rescue Plan Act funds via the Federal budget. Combining these resources, this leaves a balance of $2.75 million that must be financed in order to complete the acquisition.

In 2022, the City explored a variety of financing opportunities for the $2.75 million funding gap, including financing through financial institutions/banks, the California Infrastructure and Economic Development Bank (I Bank) and an interfund loan agreement. In evaluating these alternatives, it has been determined that an interfund loan is the preferred financing alternative – providing the most favorable financing terms, the most efficient in terms of closing on financing and producing interest revenue for another City fund. The following table provides a summary of the proposed acquisition expenses, funding sources, and financing terms:

Expenses
Purchase Price $ 6,750,000.00
Inspections, Legal, Contingencies $ 100,000.00
$ 6,850,000.00
Funding Sources
State Grant $ 3,000,000.00
Measure CC Backfilled with ARPA $ 1,100,000.00
Interfund Loan $ 2,750,000.00
$ 6,850,000.00
Financing Options
$2.75 million, 20 years
Interfund Loan I Bank Bank Financing
Rate 1.57% * 2.50% 4.00%
Annual Payment $ 161,283.24 $ 174,867.96 $ 199,973.52
Total Payments $ 3,225,664.62 $ 3,497,359.08 $ 3,999,470.05 Total Interest $ 475,664.62 $ 747,359.08 $ 1,249,470.05 *Interfund Loan Rate is based on a 20-year average yield for the Local Agency Investment Fund, available through the CA Treasurer's Office.

Interfund Loan from Sewer Fund
The City’s Sewer Fund has sufficient reserves to fund the interfund loan for the purchase. In order to accomplish this objective, a lease agreement is necessary. The City, as lessor, will lease certain property owned in fee by the City (i.e., the Covina Center for the Performing Arts) to the Authority, as lessee, pursuant to a Site and Facility Lease (the “Site Lease”), and the City will concurrently sublease the property back from the Authority pursuant to a Lease Agreement (the “Lease Agreement”), which will require that the City make lease payments to the Authority (the “Lease Obligation”). The Sewer Fund will invest in the Lease Obligation by using its [reserve] in the amount of $2,750,000 to purchase the proposed Lease Obligation payable from the City’s newly established Theater Fund, in accordance with the City’s investment policy (which allows the purchase of an obligation of a local agency as described in Section 53601(a) of the California Government Code). The proceeds of the lease obligation will be used to finance the purchase price for the Theatre. The Authority will assign its rights to receive the Lease Payments from the City to the Sewer Fund, pursuant to an Assignment Agreement (the “Assignment Agreement”), and will execute a note (the “Note”) as evidence thereof.

The Note will have a principal amount of $2,750,000, bear interest at a rate of 1.57%, and a term of 20 years.

The resolutions will approve the following documents:

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1. Site and Facilities Lease by and between the City of Covina, as Lessor, and the City of Covina Financing Authority, as Lessee;

2. Lease Agreement by and between the City of Covina Financing Authority, as Sublessor, and the City of Covina, as Sublessee;

3. Assignment Agreement among the City of Covina Financing Authority, the City of Covina Sewer Fund, and the City of Covina; and

4. Promissory Note by the Covina Public Financing Authority to the Sewer Fund; and the City Resolution approves the investment by the Sewer Fund in the Lease Obligation as evidenced by the Note.

The City will record all of the documents upon the delivery of the Note.

GOOD FAITH ESTIMATES – Pursuant to California Government Code Section 5852.1, prior to authorization of the issuance of bonds, notes, or other evidence of indebtedness with a term greater than 13 months, the governing body of a public body shall obtain from a third party financial advisor and disclose all of the following information in a meeting open to the public:
(A) The true interest cost of the Note, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the new issue of Note.
(B) The finance charge of the Note, which means the sum of all fees and charges paid to third parties. (C) The amount of proceeds received by the public body for sale of the Note less the finance charge of the Note described in subparagraph (B) and any reserves or capitalized interest paid or funded with proceeds of the Note.
(D) The total payment amount, which means the sum total of all payments the borrower will make to pay debt service on the Note plus the finance charge of the Note described in subparagraph (B) not paid with the proceeds of the Note. The total payment amount shall be calculated to the final maturity of the Note.

The following information consists of estimates that have been provided by Urban Futures, Inc., the City’s municipal advisor, and has been represented by such party to have been provided in good faith:
(A) True Interest Cost of the Note: 1.57%
(B) Finance Charge of the Note (sum of all fees and charges paid to third parties): $0 (C) Net Proceeds of the Note to be Received (net of finance charges, reserves and capitalized interest, if any): $2,750,000
(D) Total Payment Amount through Maturity of the Note: $3,225,664.62 The foregoing constitutes good faith estimates only. The principal amount of the Note, the true interest cost of the Note, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the execution of the Note being different than the date assumed for purposes of such estimates; (b) the actual principal amount of Note being different from the estimated amount used for purposes of such estimates; (c) the actual amortization of the Note being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of sale of the Note being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the City’s financing plan, or a combination of such factors.

Loan Debt Service
As proposed, a new Theater enterprise fund will be created to account for revenues and expenditures at the CCPA.

This fund will utilize revenues derived from operations (ticket sales, food/beverage sales, rentals, etc.) to fund loan payments and operational expenses. The following table includes a summary of existing and projected revenues for the CCPA, based on the appraiser’s assessment:

Page 6 of 149 ends

As proposed, the City would provide a one-time deposit of seed funds equal to one year of projected revenue at CCPA (roughly $720,000). This figure is in addition to the acquisition and ancillary costs of $6.85 million. It is expected that this seed funding would provide a cushion for loan payments and operational expenses during the first year of operations. As proposed, the City would appropriate $720,000 in Measure CC Funds backfilled with Revenue Replacement ARPA grant funds for this purpose.

Closing/Acquisition
If the Council decides to proceed with the acquisition of the theater, the purchase and sale agreement provides for up to a 75-day escrow period to conduct property inspections, negotiate further concessions, transmit funds related to the agreement and execute the agreement. As planned, the City would take possession of the CCPA no later than December 2022.

Proposed Operations
The City continues to explore a variety of performing arts alternatives for the operation of the CCPA. These alternatives include theatrical performances, musical performances, comedy shows, educational programming and food/beverage operations. As planned, the City will present a variety of options for the Council’s consideration during the escrow/closing period. It is likely that the selected operator for the facility will enter into a license agreement for the facility’s operation.

FISCAL IMPACT:

The City’s acquisition of the CCPA represents its commitment to preserving a unique local landmark for the community. With the assistance of State and Federal resources, the City is able to pre-fund $4.1 million (~60%) of the CCPA’s total purchase price ($6.85 million), leaving a balance of $2.75 million that will be financed internally over a 20-year term. This financing structure will provide the CCPA with a low-cost financing alternative (~1.57% interest rate) that will help the facility to be self-sustaining and fund debt-service payments with operating revenues. Additionally, the proposed financing will generate approximately $475,665 in interest revenue for the City’s Sewer Fund over the loan term.

In addition to the hard costs of acquiring the CCPA and managing its operations, the facility represents an opportunity to create synergy and incremental economic activity for the community. A successful performing arts space has many spillover effects for the local economy – additional customers for local food/beverage businesses,

Page 7 of 149 ends

additional shoppers for retail businesses as well as the potential to create a new entertainment destination that helps attract new customers from the broader regional market.

As part of the approval, the City has determined that:

1. The unallocated reserves of the City’s Sewer Fund may be used to purchase the lease obligation, as the purchase of the lease obligation by the Sewer Fund will constitute an investment of such funds, in that the investment will be the purchase of an obligation of a local agency as described in Section 53601(a) of the California Government Code;

2. The lease obligation is for a term permitted under the City’s Investment Policy; and

3. The purchase of the lease obligation will not interfere with the cash flow needs of the Sewer Fund for the term of the investment.

Resolution CC 2022-105 further details the necessary appropriations to fund the purchase of the CCPA as well as for the seed money to fund the first year of operations.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

The acquisition of the property known as the Covina Center for the Performing Arts has been reviewed for compliance with the California Environmental Quality Act (CEQA) and is exempt pursuant to Section 15061 (b) (3). The action is the purchase of an existing community theater property that has cultural and historical value to the Covina community, where no physical modifications are proposed. The purchase of the property by the City of Covina will not alter the use, the intensity of use or the appearance of the existing Covina Theater property and is therefore covered by the General Rule that CEQA applies to projects that have the potential for causing a significant effect on the environment. The purchase of the Covina Center for the Performing Arts will not result in a significant effect on the environment. Therefore, the activity is not subject to CEQA.

ATTACHMENTS:

Attachment A - Resolution PFA 2022-01
Attachment B - Resolution CC 2022-104
Attachment C - Good Faith Estimates and Cash Flows
Attachment D - Resolution CC 2022-105
Attachment E - PSA for 100-104 N Citrus Avenue
Attachment F - PSA for 110-112 N Citrus Avenue
Respectfully submitted,

Page 8 of 149 ends

RESOLUTION PFA 2022-01

RESOLUTION OF THE BOARD OF DIRECTORS OF THE COVINA

PUBLIC FINANCING AUTHORITY, AUTHORIZING EXECUTION

AND DELIVERY OF A SITE LEASE, A LEASE AGREEMENT, AND

OTHER RELATED DOCUMENTS IN CONNECTION WITH THE

LEASE FINANCING ARRANGEMENT WITH THE CITY, AND

CERTAIN OTHER ACTIONS RELATING THERETO
WHEREAS, the Board of Directors (the “Board”) of the Covina Public Financing Authority (the “Authority”) hereby determines that it is in the best interests of the Authority and the City of Covina (the “City”) to finance a portion of the City's purchase of the Covina Center for the Performing Arts located at 104 North Citrus Avenue, Covina, California 91723 (the “Theatre” or the “Project”), through a lease financing arrangement (the “Lease Obligation”) between the Authority and the City which is secured by a lien on the Theatre as described in Exhibit A to the Lease Agreement described below (the “Leased Premises”); and
WHEREAS, the City will lease the Theatre to the Authority, pursuant to a Site and Facility Lease (the “Site Lease”), and concurrently will lease back the Theatre from the Authority pursuant to a Lease Agreement (the “Lease Agreement”), which will require that the City make lease payments thereunder sufficient to pay the Lease Obligation; and
WHEREAS, the Authority will assign the lease payments received from the City to the Sewer Fund pursuant to an Assignment Agreement (the “Assignment Agreement”) with the Sewer Fund, and provide a note (the “Note”) as evidence thereof; and
WHEREAS, the City and the Authority have determined that the Sewer Fund will invest in the Lease Obligation, and that it is in the best interest of the City and the Authority to proceed.

NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE COVINA PUBLIC

FINANCING AUTHORITY HEREBY FINDS, DETERMINES AND RESOLVES AS FOLLOWS:

SECTION 1. Findings and Determinations.
(a) Pursuant to Section 6586 of the Act, the Authority hereby finds and determines that the Lease Obligation to assist in financing the Project will result in significant public benefit to the constituents of the City, including more efficient delivery of local agency services to residential and commercial development, employment benefits, and savings in effective interest rates, underwriting cost, and cost of issuance.
(b) The Board finds and determines that the above recitals are true and correct and that the fair rental value of Leased Premises exceeds the present value of Lease Payments to be made under the Lease Agreement.

SECTION 2. Approval of Financing. The Board hereby approves the purchase of the Theatre and the financing of the Theatre subject to the terms and conditions of this Resolution.

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Resolution PFA 2022-01 Page 2 of 3
SECTION 3. Approval of Financing Documents. The Board hereby approves each of the following documents in substantially the forms on file with the Secretary, together with such additions thereto and changes therein as Special Counsel shall deem necessary, desirable or appropriate, the execution of which by the Chairman, Executive Director, Assistant Executive Director or Treasurer (each, an “Authorized Officer”) shall be conclusive evidence of the approval of any such additions and changes:
(1) the Site Lease;
(2) the Lease Agreement;
(3) the Assignment Agreement; and
(4) the Note to the Sewer Fund.

The Authorized Officers are each hereby authorized and directed to execute, each of the foregoing documents and agreements for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of each of the foregoing documents and agreements.

SECTION 4. Financing Terms. The financing terms presented to the Authority are approved as follows: maximum principal amount of financing is $2,750,000 ; maximum interest rate with respect to the financing is 1.57% for the lease payments; and the maximum term for the financing is 20 years.

SECTION 5. Other Acts. The Authorized Officers and the other officers and staff members of the Authority are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the staff and Special Counsel they may deem necessary or advisable in order to consummate the Project, or otherwise to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed.

SECTION 6. Effective Date. This Resolution shall take effect immediately upon its adoption.

APPROVED and PASSED this 20th day of September, 2022
City of Covina, California
BY:

PATRICIA CORTEZ, Chair
Covina Public Financing Authority
ATTEST:
___________________________________________
FABIAN VELEZ, Secretary
Covina Public Financing Authority

Page 10 of 149 ends

Resolution PFA 2022-01 Page 3 of 3

CERTIFICATION
I, Fabian Velez, Secretary of the Covina Public Financing Authority, do hereby certify that Resolution PFA 2022-01 was duly adopted by the Board of Directors of the Covina Public Financing Authority at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: BOARD MEMBERS:

NOES: BOARD MEMBERS:

ABSTAIN: BOARD MEMBERS:

ABSENT: BOARD MEMBERS:

Dated:
__________________________________________
FABIAN VELEZ, Secretary
Covina Public Financing Authority

Page 11 of 149 ends

RESOLUTION CC 2022-104

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

AUTHORIZING EXECUTION AND DELIVERY OF A SITE LEASE, A

LEASE AGREEMENT, AND OTHER RELATED DOCUMENTS IN

CONNECTION WITH THE LEASE FINANCING ARRANGEMENT

WITH THE CITY, AND CERTAIN OTHER ACTIONS RELATING

THERETO
WHEREAS, the City Council (the “City Council”) of the City of Covina (the “City”) hereby determines that it is in the best interests of the City to finance a portion of the City's purchase of the Covina Center for the Performing Arts located at 104 North Citrus Avenue, Covina, California 91723 (the “Theatre” or the “Project”), through a lease financing arrangement (the “Lease Obligation”) between the Covina Public Financing Authority (the “Authority”) and the City which is secured by a lien on the Theatre as described in Exhibit A to the Lease Agreement described below (the “Leased Premises”); and
WHEREAS, the City will lease the Theatre to the Authority, pursuant to a Site and Facility Lease (the “Site Lease”), and concurrently will lease back the Theatre from the Authority pursuant to a Lease Agreement (the “Lease Agreement”), which will require that the City make lease payments thereunder sufficient to pay the Lease Obligation; and
WHEREAS, the Authority will assign the lease payments received from the City to the Sewer Fund pursuant to an Assignment Agreement (the “Assignment Agreement”) with the Sewer Fund, and provide a note (the “Note”) as evidence thereof; and WHEREAS, the City has determined that the Sewer Fund will invest in the Lease Obligation and that it is in the best interest of the City and Authority to proceed.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY HEREBY FINDS, DETERMINES AND RESOLVES AS FOLLOWS:

SECTION 1. Findings and Determinations.
(a) Pursuant to Section 6586 of the Act, the City Council hereby finds and determines that the Lease Obligation to assist in financing the Project will result in significant public benefit to the constituents of the City, including more efficient delivery of local agency services to residential and commercial development, employment benefits, and savings in effective interest rates, underwriting cost, and cost of issuance. (b) The City Council finds and determines that the above recitals are true and correct and that the fair rental value of Leased Premises exceeds the present value of Lease Payments to be made under the Lease Agreement.

SECTION 2. Approval of Financing. The City Council hereby approves the purchase of, and the financing of, the Project subject to the terms and conditions of this Resolution.

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Resolution CC 2022-104 Page 2 of 3
SECTION 3. Approval of Financing Documents. The City Council hereby approves each of the following documents in substantially the forms on file with the City Clerk, together with such additions thereto and changes therein as Special Counsel shall deem necessary, desirable or appropriate, the execution of which by the Mayor (or in his absence, the Mayor Pro Tem), the City Manager or Administrative Services Director (each, an “Authorized Officer”) shall be conclusive evidence of the approval of any such additions and changes:
(1) the Site Lease;
(2) the Lease Agreement;
(3) the Assignment Agreement; and
(4) the Note to the Sewer Fund.

The Authorized Officers are each hereby authorized and directed to execute, each of the foregoing documents and agreements for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of each of the foregoing documents and agreements.

SECTION 4. Financing Terms. The financing terms presented to the Authority are approved as follows: maximum principal amount of financing is $2,750,000; maximum interest rate with respect to the financing is 1.57 % for the lease payments; and the maximum term for the financing is 20 years.

SECTION 5. Other Acts. The Authorized Officers and the other officers and staff members of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the staff and Special Counsel they may deem necessary or advisable in order to consummate the Project, or otherwise to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed.

SECTION 6. Effective Date. This Resolution shall take effect immediately upon its adoption.

SIGNED AND APPROVED this 20th day of September, 2022.

City of Covina, California
BY:

PATRICIA CORTEZ, Mayor
ATTEST:
______________________________________
FABIAN VELEZ, Deputy City Clerk

Page 13 of 149 ends

Resolution CC 2022-104 Page 3 of 3

CERTIFICATION
I, Fabian Velez, Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2022-104 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 20th day of September, 2022, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
__________________________________________
FABIAN VELEZ, Deputy City Clerk

Page 14 of 149 ends

12463‐0017\2636604
Recording requested by and when
recorded mail to:

City of Covina
125 E Covina Blvd
Covina, CA 91723
Attention: Evelyn Leech
This Document is recorded for the benefit of the City of South Lake Tahoe and is exempt from California documentary transfer tax pursuant to Section 11928 of the California Revenue and Taxation Code and from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.
====================================================================

SITE AND FACILITY LEASE
by and between

CITY OF COVINA,
as Lessor
and

COVINA PUBLIC FINANCING AUTHORITY,
as Lessee
Dated as of October 1, 2022
====================================================================

Page 15 of 149 ends

SITE AND FACILITY LEASE
THIS SITE AND FACILITY LEASE (this “Site Lease”), dated October 1, 2022, is by and between the CITY OF COVINA, a general law city and municipal corporation, duly organized and existing under and by virtue of the laws of the State of California (the “City”), as lessor, and the COVINA PUBLIC FINANCING AUTHORITY, a joint powers agency existing under the laws of the State of California (the “Authority”), as lessee;
WITNESSETH:

WHEREAS, pursuant to this Site Lease, the City proposes to lease that certain parcel of real property, and the improvements thereon, situated in the City of Covina, Los Angeles County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the “Property”), to the Authority, all for the purpose of assisting the City with financing the acquisition of the Covina Center for Performing Arts (the “Project”), as defined in the Lease Agreement; and WHEREAS, the Authority proposes to lease the Property back to the City pursuant to that certain Lease Agreement, dated October 1, 2022, a memorandum of which is recorded concurrently herewith (the “Lease Agreement”); and
WHEREAS, the City possesses statutory authority to lease the Property and its governing body has duly authorized the execution and delivery of the Lease Agreement and this Site Lease.

NOW THEREFORE, for and in consideration of the premises and covenants and conditions hereinafter contained, the parties agree as follows:

Section 1. Definitions. Capitalized terms used, but not otherwise defined, in this Site Lease shall have the meanings ascribed to them in the Lease Agreement.

Section 2. Site Lease. The City hereby leases to the Authority and the Authority hereby leases from the City, on the terms and conditions hereinafter set forth, the Property.

Section 3. Term. The term of this Site Lease shall commence on the Closing Date, and shall end on October 1, [2042] unless such term is extended or sooner terminated as hereinafter provided.

If, on October 1, [2042] the aggregate amount of Lease Payments (as defined in and as payable under the Lease Agreement) shall not have been paid by reason of abatement, default or otherwise, or provision shall not have been made for their payment in accordance with the Lease Agreement, then the term of this Site Lease shall be extended until such Lease Payments shall be fully paid or provision made for such payment, but in no event later than October 1, [2042]. If, prior to October 1, [2042] all Lease Payments shall be fully paid or provision made for such payment in accordance with the Lease Agreement, the term of this Site Lease shall end.

Section 4. Advance Rental Payment. The City agrees to lease the Property to the Authority in consideration of the payment by the Authority of an advance rental payment of $[principal amount].

Section 5. Purpose. The Authority shall use the Property solely for the purpose of leasing the Property to the City pursuant to the Lease Agreement and for such purposes as may be incidental thereto; provided, however, that in the event of default by the City under the Lease Agreement, the Authority and its assigns may exercise the remedies provided in the Lease Agreement.

Page 16 of 149 ends

Section 6. City's Interest in the Property. The City covenants that it is the owner in fee of the Property.

Section 7. Assignments and Subleases. Unless the City shall be in default under the Lease Agreement, the Authority may not assign its rights under this Site Lease or sublet the Property, except as provided in the Lease Agreement. If the City is in default under the Lease Agreement, the Authority (including its successors and assigns under the Lease Agreement) may fully and freely assign and sublease the Property or any portion thereof, this Site Lease and the Lease Agreement.

Section 8. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof.

Section 9. Termination. The Authority agrees, upon the termination of this Site Lease, to quit and surrender the Property in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements and structures existing upon the Site at the time of the termination of this Site Lease shall remain thereon and title thereto shall vest in the City.

Section 10. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the Authority, the City may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease Agreement shall be deemed to occur as a result thereof and the City shall have no right to terminate this Site Lease as a remedy for such default. Notwithstanding the foregoing, so long as the Lease Agreement remains in effect, the City will continue to pay the Lease Payments to the Authority.

In the event of the occurrence of an Event of Default under the Lease Agreement, the Authority may (a) exercise the remedies provided in the Lease Agreement, (b) use the Property for any lawful purpose, subject to any applicable legal limitations or restrictions, and (c) exercise all options provided herein.

Section 11. Quiet Enjoyment. The Authority, at all times during the term of this Site Lease, shall peaceably and quietly have, hold and enjoy all of the Property subject to the provisions of the Lease Agreement.

Section 12. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority are solely liabilities of the Authority and the City hereby releases each and every director, officer, employee and agent of the Authority of and from any personal or individual liability under this Site Lease. No director, officer, employee or agent of the Authority shall at any time or under any circumstances be individually or personally liable under this Site Lease for anything done or omitted to be done by the Authority hereunder.

Section 13. Taxes. All assessments of any kind or character and all taxes, including possessory interest taxes, levied or assessed upon the Property or the Authority's interest in the Property created by this Site Lease (including both land and improvements) will be paid by the City in accordance with the Lease Agreement.

Page 17 of 149 ends

Section 14. Eminent Domain. In the event the whole or any part of the Property is taken by eminent domain proceedings, the interest of the Authority shall be recognized and is hereby determined to be the amount of the then unpaid principal component of the Lease Payments, any then unpaid interest component of the Lease Payments and any premium due with respect to the prepayment of Lease Payments to the date such amounts are remitted to the Authority or its assignee, and, subject to the provisions of the Lease Agreement, the balance of the award, if any, shall be paid to the City. The City hereby waives, to the extent permitted by law, any and all rights that it has or may hereafter have to acquire the interest of the Authority in and to the Property through the eminent domain powers of the City. However, the City hereby agrees, to the extent permitted by law, that the compensation to be paid in any condemnation proceedings brought by or on behalf of the City with respect to the Property shall be in an amount not less than the total unpaid principal component of Lease Payments, the interest component of Lease Payments accrued to the date of payment of all Lease Payments and any premium due with respect to the prepayment of Lease Payments under the Lease Agreement.

Section 15. Use of the Proceeds. The City and the Authority hereby agree that the lease to the Authority of the City's right and interest in the Property pursuant to Section 2 serves the public purposes of the City.

Section 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site Lease shall, to any extent, be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding, order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law.

Section 17. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail, return receipt requested, postage prepaid, at the addresses set forth in the Lease Agreement, or to such other addresses as the respective parties may from time to time designate by notice in writing.

Section 18. Binding Effect. This Site Lease shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. The Assignee is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary.

Section 19. Amendment. This Site Lease may not be amended except as permitted under the Lease Agreement.

Section 20. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease.

Section 21. Applicable Law. This Site Lease shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in California.

Page 18 of 149 ends

Section 22. No Merger. Neither this Site Lease, the Lease Agreement nor any provisions hereof or thereof shall be construed to effect a merger of the title of the City to the Property under this Site Lease and the City's leasehold interest therein under the Lease Agreement.

Section 23. Execution in Counterparts. This Site Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF COVINA
By ____________________________________
Chris Marcarello
City Manager
Attest:
___________________________
Evelyn Leech,
Acting Deputy City Clerk

COVINA PUBLIC FINANCING AUTHORITY
By ____________________________________
Chris Marcarello
Executive Director
Attest:
___________________________
Candice C. Lee
City Attorney

Page 19 of 149 ends

State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

Page 20 of 149 ends

EXHIBIT A

DESCRIPTION OF PROPERTY
Covina Center for Performing Arts located at 104 North Citrus Avenue and 110-112 North Citrus Avenue, Covina California 91723

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12923‐0001\2712256v1.doc
====================================================================

LEASE AGREEMENT
by and between

COVINA PUBLIC FINANCING AUTHORITY,
as Sublessor
and

CITY OF COVINA,
as Sublessee
Dated October 1, 2022
====================================================================

Page 22 of 149 ends

TABLE OF CONTENTS
PAGE NO.
-i12923‐0001\2712256v1.doc
ARTICLE I DEFINITIONS ...................................................................................................... 1 Section 1.01. Definitions..................................................................................... 1 Section 1.02. Interpretation ................................................................................. 4 ARTICLE II COVENANTS, REPRESENTATIONS AND WARRANTIES .......................... 4 Section 2.01. Covenants, Representations and Warranties of the City ................................................................................................ 4 Section 2.02. Covenants, Representations and Warranties of the Authority ....................................................................................... 6 ARTICLE III LEASE OF PROPERTY....................................................................................... 6 Section 3.01. Deposit of and Application of Funds ............................................ 6 ARTICLE IV LEASE OF PROPERTY....................................................................................... 6 Section 4.01. Sublease of Property by the Authority Back to the City ................................................................................................ 6 Section 4.02. Term .............................................................................................. 7 Section 4.03. Lease Payments ............................................................................. 7 Section 4.04. Quiet Enjoyment ........................................................................... 9 Section 4.05. Title ............................................................................................... 9 Section 4.06. Release of Excess Property ......................................................... 10 Section 4.07. Substitution of Property .............................................................. 10 ARTICLE V MAINTENANCE ............................................................................................... 11 Section 5.01. Maintenance, Utilities, Taxes and Assessments ......................... 11 Section 5.02. Modification of Property ............................................................. 12 Section 5.03. Public Liability Insurance ........................................................... 12 Section 5.04. Casualty Insurance ...................................................................... 13 Section 5.05. Rental Interruption Insurance ..................................................... 13 Section 5.06. Workers’ Compensation Insurance ............................................. 13 Section 5.07. Recordation Hereof ..................................................................... 14 Section 5.08. Insurance Net Proceeds ............................................................... 14 Section 5.09. Installation of City's Personal Property ...................................... 14 Section 5.010. Liens ............................................................................................ 14 Section 5.011. Advances ..................................................................................... 15 Section 5.012. Environmental Covenants ........................................................... 15 ARTICLE VI EMINENT DOMAIN ......................................................................................... 15 Section 6.01. Eminent Domain ......................................................................... 15 Section 6.02. Application of Net Proceeds ....................................................... 16 Section 6.03. Abatement of Lease Payments in the Event of Damage or Destruction ............................................................... 18 ARTICLE VII OTHER COVENANTS OF THE CITY ............................................................. 18 Section 7.01. Disclaimer of Warranties ............................................................ 18 Section 7.02. Access to the Property ................................................................ 18

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TABLE OF CONTENTS
PAGE NO.
-ii12923-0001\2712256v1.doc
Section 7.03. Release and Indemnification Covenants ..................................... 19 Section 7.04. Assignment by the Authority ...................................................... 19 Section 7.05. Assignment Agreement and Subleasing by the City ................... 20 Section 7.06. Amendment of Lease Agreement ............................................... 20 Section 7.07. Records and Accounts ................................................................. 20 Section 7.08. Observance of Laws and Regulations ......................................... 20 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES ......................................... 21 Section 8.01. Events of Default Defined .......................................................... 21 Section 8.02. Remedies on Default ................................................................... 22 Section 8.03. No Remedy Exclusive................................................................. 23 Section 8.04. Agreement to Pay Attorneys' Fees and Expenses ....................... 24 Section 8.05. No Additional Waiver Implied by One Waiver .......................... 24 Section 8.06. Judicial Reference ....................................................................... 24 ARTICLE IX PREPAYMENT OF LEASE PAYMENTS ........................................................ 25 Section 9.01. Security Deposit .......................................................................... 25 Section 9.02. Optional Prepayment .................................................................. 26 Section 9.03. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain .................................................... 26 ARTICLE X MISCELLANEOUS ........................................................................................... 27 Section 10.01. Notices ........................................................................................ 27 Section 10.02. Binding Effect ............................................................................. 27 Section 10.03. Severability ................................................................................. 27 Section 10.04. Net-net-net Lease ........................................................................ 27 Section 10.05. Further Assurances and Corrective Instruments ......................... 27 Section 10.06. Execution in Counterparts ........................................................... 28 Section 10.07. Applicable Law ........................................................................... 28 Section 10.08. Captions ...................................................................................... 28 EXHIBIT A - DESCRIPTION OF THE PROPERTY ............................................................. A-1 EXHIBIT B - SCHEDULE OF LEASE PAYMENTS............................................................. B-1

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‐1‐
12923‐0001\2712256v1.doc

LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”), dated October 1, 2022, is by and between the COVINA PUBLIC FINANCING AUTHORITY, a public agency existing under the laws of the State of California, as lessor (the “Authority”), and the CITY OF COVINA, a general law city and municipal law corporation, duly organized and existing under and by virtue of the laws of the State of California, as lessee (the “City”); WITNESSETH:

WHEREAS, pursuant to that certain Site and Facility Lease, dated October 1, 2022 (the “Site and Facility Lease”), the City has leased that certain parcel of real property, and the improvements thereon, situated in the City of Covina, Los Angeles County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the “Property”), to the Authority, for the purpose of assisting the City with financing the acquisition of the Covina Center for Performing Arts (the “Project”); and
WHEREAS, the Authority proposes to lease the Property back to the City pursuant to this Lease Agreement; and
WHEREAS, in consideration of the right of possession of, and the continued quiet use and enjoyment of, the Property during each Rental Period under this Lease Agreement, the City agrees to make certain Lease Payments (as hereinafter defined); and WHEREAS, the City and the Authority have agreed to enter into this Lease Agreement providing for Lease Payments with an aggregate principal component in the amount of $2,750,000 for the purpose of implementing the financing transactions described above; and WHEREAS, the City and the Authority agree to mutually cooperate now and hereafter, to the extent possible, in order to sustain the intent of this Lease Agreement and the bargain of both parties hereto.

AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows:

ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
Section 1.01. Definitions. All terms defined in this Section 1.01 have the meanings herein specified for all purposes of this Lease Agreement. “Additional Payments” means the amounts specified as such in Section 4.03(b) of this Lease Agreement.
“Authority” means the Covina Public Financing Authority.

Page 25 of 149 ends

‐2‐
12923‐0001\2712256v1.doc
“Bond Counsel” means (a) Richards Watson & Gershon, or (b) any other attorney or firm of attorneys of nationally recognized expertise with respect to legal matters relating to obligations the interest on which is excludable from gross income under Section 103 of the Tax Code. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in the State.
“City” means the City of Covina, California, a municipal corporation and general law city organized and existing under the laws of the State.
“City Representative” means the Mayor, the City Manager, Assistant City Manager, the Finance Officer, or the designee of any such official, or any other person authorized by resolution delivered to the Authority to act on behalf of the City under or with respect to the Site and Facility Lease and this Lease Agreement.
“Closing Date” means the date this Lease Agreement or a memorandum thereof is recorded in the office of the County Recorder of the County of Los Angeles. “Contract” means any indenture, trust agreement, contract, agreement (other than this Lease Agreement), other contractual restriction, lease, mortgage or instrument. “Default Rate” means [4.00]%.
“Event of Default” means any of the events of default as defined in Section 8.01. “Federal Securities” means any direct general non-callable obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the timely payment of principal of and interest on which are directly guaranteed by the United States of America. “Fiscal Year” means each twelve-month period during the Term of this Lease Agreement commencing on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any other twelve-month period selected by the City as its fiscal year period. “Lease Agreement” means this Lease Agreement, dated October 1, 2022, between the Authority and the City.
“Lease Payment Date” means [April 1 and October 1 in each year, commencing April 1, 2023], and continuing to and including the date on which the Lease Payments are paid in full. “Lease Payments” means all payments required to be paid by the City under Section 4.04, including any prepayment thereof under Sections 9.02 or 9.03. “Net Proceeds” means any insurance or eminent domain award (including any proceeds of sale to a governmental entity under threat of the exercise of eminent domain powers), paid with respect to the Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof.

Page 26 of 149 ends

‐3‐
12923‐0001\2712256v1.doc
“Permitted Encumbrances” means, as of any time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under Article V of this Lease Agreement; (b) the Site and Facility Lease and this Lease Agreement; (c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (d) the exceptions disclosed in the title insurance policy issued with respect to the Property as of the Closing Date; and (e) any easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Property for its intended purposes.
“Project” means the Project as described in the recitals of this Lease Agreement. “Property” means that certain real property as described in Exhibit A hereto and the improvements thereon, including the Covina Center for Performing Arts. “Purchaser” means the Sewer Fund of the City of Covina. “Rental Period” means each period during the Term of the Lease commencing on and including October 1 in each year and extending to and including the next succeeding October 1.

The first Rental Period begins on the Closing Date and ends on October 1, [2042]. “Site and Facility Lease” means the Site and Facility Lease, dated as of October 1, 2022, by and between the City, as lessor, and the Authority, as lessee, together with any duly authorized and executed amendments thereto.
“State” means the State of California.
“Term of this Lease Agreement” or “Term” means the time during which this Lease Agreement is in effect, as provided in Section 4.02.

Section 1.02. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Lease Agreement; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Lease Agreement as a whole and not to any particular Article, Section or subdivision hereof.

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‐4‐
12923‐0001\2712256v1.doc

ARTICLE II

COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 2.01. Covenants, Representations and Warranties of the City. The City makes the following covenants, representations and warranties to the Authority as of the date of the execution and delivery of this Lease Agreement:
(a) Due Organization and Existence. The City is a municipal corporation and general law city, duly organized and existing under and by virtue of the laws of the State, has full legal right, power and authority under the laws of the State to enter into the Site and Facility Lease and this Lease Agreement and to carry out and consummate all transactions on its part contemplated hereby and thereby, and by proper action the City has duly authorized the execution and delivery by the City of the Site and Facility Lease and this Lease Agreement.
(b) Due Execution. The representative of the City executing the Site and Facility Lease and this Lease Agreement has been fully authorized to execute the same by a resolution duly adopted by the City Council of the City. (c) Valid, Binding and Enforceable Obligations. The Site and Facility Lease and this Lease Agreement have been duly authorized, executed and delivered by the City and constitute the legal, valid and binding agreements of the City enforceable against the City in accordance with their respective terms.
(d) No Conflicts. The execution and delivery of the Site and Facility Lease and this Lease Agreement, the consummation of the transactions therein and herein contemplated and the fulfillment of or compliance with the terms and conditions thereof and hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Site and Facility Lease or this Lease Agreement or the financial condition, assets, properties or operations of the City.
(e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of the Site and Facility Lease and this Lease Agreement, or the consummation of any transaction therein and herein contemplated, except as have been obtained or made and as are in full force and effect.

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(f) Sufficient Funds. The City reasonably believes that sufficient funds can be obtained to make all Lease Payments and all other amounts required to be paid pursuant to this Lease Agreement.
(g) No Defaults. The City has never non-appropriated or defaulted under any of its payment or performance obligations or covenants, either under any financing lease of the same general nature as this Lease Agreement, or under any of its bonds, Note, or other debt obligations.
(h) Fee Title. The City is the owner in fee of title to the Property. No lien or encumbrance on the Property materially impairs the City's use of the Property for the purposes for which it is, or may reasonably be expected to be, held. (i) Use of the Property, Essentiality. During the term of this Lease Agreement, the Property will be used by the City only for the purpose of performing one or more governmental or proprietary functions of the City consistent with the permissible scope of the City's authority. The Property is essential to the City's efficient and economic operations and the lease thereof for use by the City is in the best interest of the City. (j) Flooding Risk. The Property is not located in a flood hazard area and has never been subject to material damage from flooding.
(k) Value of Property. The value of the Property (real property replacement cost) is not less than $[principal amount].

Section 2.02. Covenants, Representations and Warranties of the Authority. The Authority makes the following covenants, representations and warranties to the City as of the date of the execution and delivery of this Lease Agreement:
(a) the Authority has been duly organized and is validly existing as a corporation under the laws of the State of California with full corporate power to enter into and undertake its duties and obligations hereunder and has sufficient knowledge and experience in financial and business matters, including purchase and ownership of taxexempt municipal obligations, to be able to evaluate the economic risks and merits of the investment represented by the Lease;
(b) the execution, delivery and performance of this Lease Agreement and the Site and Facility Lease have been duly authorized by all necessary corporate actions on the part of the Authority and do not require any further approvals or consents; (c) the execution, delivery and performance of this Lease Agreement and the Site and Facility Lease do not and will not result in any breach of or constitute a default under any indenture, mortgage, contract, agreement or instrument to which the Authority is a party by which it or its property is bound;
(d) there is no pending or, to the knowledge of the Authority, threatened action or proceeding before any court or administrative agency which will materially adversely

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affect the ability of the Authority to perform its obligations under this Lease Agreement and the Site and Facility Lease; and
(e) the Authority will not mortgage or encumber the Property or the Lease Agreement or assign this Lease Agreement or its rights to receive Lease Payments hereunder, except as expressly permitted herein or in the Site and Facility Lease.

ARTICLE III
LEASE OF PROPERTY; LEASE PAYMENTS
Section 3.01. Deposit of and Application of Funds. On the Closing Date, the Authority shall cause the amount of $2,750,000.00 to be used to fund the Project.

ARTICLE IV
LEASE OF PROPERTY; LEASE PAYMENTS
Section 4.01. Sublease of Property by the Authority Back to the City. (a) The Authority hereby subleases the Property to the City, and the City hereby subleases the Property from the Authority, upon the terms and conditions set forth in this Lease Agreement.
(b) The leasing of the Property by the City to the Authority pursuant to the Site and Facility Lease shall not affect or result in a merger of the City's subleasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Site and Facility Lease.

Section 4.02. Term. The Term of this Lease Agreement commences on the Closing Date and ends on October 1, [2042], or the date on which all of the Lease Payments have been paid in full. If on October 1, [2042], the Lease Payments payable hereunder shall have been abated at any time and for any reason and not otherwise paid from rental interruption insurance or other sources, or the City shall have defaulted in its payment of Lease Payments hereunder or any Event of Default has occurred and continues without cure by the City, then the term of this Lease Agreement shall be extended for the actual period of abatement or for so long as the default remains uncured, as necessary to accommodate the final payment of all Lease Payments due hereunder, not to exceed ten (10) years. The provisions of this Section 4.02 are subject to the provisions of Section 6.01 relating to the taking in eminent domain of the Property or any portion thereof.

Section 4.03. Lease Payments.
(a) Obligation to Pay. Subject to the provisions of Sections 6.01 and 6.03 and the provisions of Article IX, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments (denominated into components of principal and interest) in the respective amounts specified in Exhibit B attached hereto (including any supplements thereto) and by this reference incorporated herein, to be due and payable in immediately available funds on each of the respective Lease Payment Dates specified in Exhibit B. The Lease Payments payable in any Rental Period with respect to the Property shall be for the

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use of the Property during such Rental Period. The interest components of the Lease Payments have been calculated based on an interest rate of 1.57% per annum, on the basis of a 360-day year of twelve 30-day months; provided, however, has occurred and continues without cure by the City, then the rate shall be the Default Rate. The City understands that the Authority has assigned its right to receive the Lease Payments to the Purchaser and that the Purchaser will send an invoice to the City in advance of each Lease Payment Date. (b) Additional Payments. In addition to the Lease Payments set forth herein, the City agrees to pay as Additional Payments all of the following:
(i) all taxes and assessments of any nature whatsoever, including but not limited to excise taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes, if any, levied upon the Property or upon any interest of the Authority therein or in this Lease Agreement; provided, however, the City may, at the City's expense and in its name, in good faith contest any such taxes and assessments and, in the event of such contest, may permit such taxes and assessments to remain unpaid during the period of such contest and appeal therefrom unless the Authority shall notify the City that, in the opinion of Bond Counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any portion thereof, will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes and assessments or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority; (ii) insurance premiums, if any, on all insurance required under the provisions of Article V hereof; and
(iii) any other reasonable fees, costs or expenses incurred by the Authority in connection with the execution, performance or enforcement of this Lease Agreement or any of the transactions contemplated hereby or related to the Property, including, without limitation, any amounts which may become due; provided, however, the City shall not be responsible for any costs incurred by the Authority associated with any assignment of this Lease Agreement.

Amounts constituting Additional Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within thirty (30) days after notice in writing from the Authority to the City stating the amount of Additional Payments then due and payable and the purpose thereof. (c) Effect of Prepayment. If the City prepays all Lease Payments in full under Sections 9.02 or 9.03, the City's obligations under this Section will thereupon cease and terminate. If the City prepays the Lease Payments in part but not in whole under Section

9.03, the principal components of the remaining Lease Payments will be reduced on a pro rata basis; and the interest component of each remaining Lease Payment will be reduced on a pro rata basis.

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(d) Rate on Overdue Payments. If the City fails to make any of the payments required in this Section 4.03, the payment in default will continue as an obligation of the City until the amount in default has been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment at the rate of __% per annum or any lesser maximum legal rate.
(e) Fair Rental Value. The Lease Payments coming due and payable during each Rental Period constitute the total rental for the Property for such Rental Period, and will be paid by the City in each Rental Period for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of the Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments due during each Rental Period are not in excess of the fair rental value of the Property during such Rental Periods. In making this determination, consideration has been given to the estimated fair market value of the Property, the estimated replacement cost of the Property, the uses and purposes which may be served by the Property and the benefits therefrom which will accrue to the City and the general public. (f) Source of Payments; Budget and Appropriation. The Lease Payments are payable from any source of legally available funds of the City, subject to the provisions of Sections 6.01, 6.03 and 9.01. The City covenants to take such action as may be necessary to include all Lease Payments in each of its annual budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for all such Lease Payments.

The covenants on the part of the City herein contained constitute duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City. (g) Allocation of Lease Payments. All Lease Payments received shall be applied first to the interest components of the Lease Payments due hereunder, then to the principal components of the Lease Payments due hereunder, but no such application of any payments that are less than the total rental due and owing shall be deemed a waiver of any default hereunder.
(h) No Offsets. Notwithstanding any dispute between the Authority and the City, the City shall make all Lease Payments when due without deduction or offset of any kind and shall not withhold any Lease Payments pending the final resolution of such dispute.
(i) Payments under this Lease Agreement. The Authority hereby directs the City, and the City hereby agrees, to pay to the Purchaser (or to its assignees as directed pursuant to Section 7.04 hereof) all payments payable by the City under this Section 4.03 and all amounts payable by the City under Article IX.

Section 4.04. Quiet Enjoyment. Throughout the Term of this Lease Agreement, the Authority will provide the City with quiet use and enjoyment of the Property and the City will peaceably and quietly have and hold and enjoy the Property, without suit, trouble or hindrance

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from the Authority, except as expressly set forth in this Lease Agreement. The Authority will, at the request of the City and at the City's cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Authority may lawfully do so.

Notwithstanding the foregoing, the Authority has the right to inspect the Property as provided in Sections 5.12(c) and 7.02.

Section 4.05. Title. At all times during the Term of this Lease Agreement, the City shall hold title to the Property, including all additions which comprise fixtures, repairs, replacements or modifications thereto, subject to Permitted Encumbrances and subject to the provisions of Section 7.02.

Upon the termination of this Lease Agreement (other than under Section 8.02(b) hereof), all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City. Upon the payment in full of all Lease Payments allocable to the Property, or upon the deposit by the City of security for such Lease Payments as provided in Section 9.01, all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City.

The Authority agrees to take any and all steps and execute and record any and all documents reasonably required by the City to consummate any such transfer.

Section 4.06. Release of Excess Property. The City may, at any time and from time to time, release any portion of the Property (the “Released Property”) from this Lease Agreement, with the prior written consent of the Authority, which consent shall be at the Authority's sole discretion, and upon satisfaction of all of the following requirements which are conditions precedent to such release:
(a) The City shall certify to the Authority that no Event of Default has occurred and is continuing, and no event giving rise to an abatement of Lease Payments under Section 6.03 has occurred or is continuing with respect to the Property to be remaining following release of the Released Property;
(b) The City shall file with the Authority, and cause to be recorded in the office of the Los Angeles County Recorder, an amendment to this Lease Agreement which deletes the Released Property from the description of the Property; (c) The City shall file with the Authority a written certificate of the City stating the City's determination that the estimated fair rental value, for each remaining Rental Period and in the aggregate, of the Property remaining after release of the Released Property is at least equal to the remaining Lease Payments for each remaining Rental Period and in the aggregate; and
(d) The City shall file with the Authority such other information, documents and instruments as the Authority shall reasonably request, including (if requested by the Authority) evidence of the insurable value of the Property to be remaining following release of the Released Property, indicating that such value is in excess of the then unpaid principal component of the Lease Payments and such endorsements to the title policy delivered on the Closing Date.

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Upon the satisfaction of all such conditions precedent, the Term of this Lease Agreement will thereupon end as to the Released Property. The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such release. The Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge this Lease Agreement of record against the Released Property.

Section 4.07. Substitution of Property.

The City may at any time and from time to time, with the prior written consent of the Authority, substitute other real property (the “Substitute Property”) for the Property, or any portion thereof (the “Former Property”), provided that the City satisfies all of the following requirements which are conditions precedent to such substitution:
(a) No Event of Default shall have occurred and be continuing and no event giving rise to an abatement of Lease Payments under Section 6.03 hereof shall have occurred and be continuing with respect to the Substitute Property; (b) The City shall file with the Authority, and cause to be recorded in the office of the Los Angeles County Recorder sufficient memorialization of, an amendment of the Lease Agreement which adds to Exhibit A thereto a description of such Substitute Property and deletes therefrom the description of such Former Property; (c) The City shall certify in writing to the Authority that such Substitute Property serves the municipal purposes of the City and constitutes property which the City is permitted to lease under the Laws of the State of California, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City;
(d) The Substitute Property shall not cause the City to violate any of its covenants, representations and warranties made in this Lease Agreement; (e) The City shall file with the Authority an appraisal or other written documentation which establishes that the fair market value and the fair rental value of the Substitute Property are at least equal to the present value of the remaining Lease Payments in the aggregate and for each remaining Rental Period, respectively, and that the useful life of the Substitute Property at least equals the lesser of (i) the useful life of the Former Property; or (ii) the final Lease Payment Date of the Lease Payments allocable thereto; and (f) In the event of damage or destruction of the Leased Property from earthquake or other uninsured peril, the City shall substitute under this Lease Agreement other unencumbered real property of a value and useful life not less than the outstanding principal component of the Lease Payments and the remaining term of this Lease Agreement.

Upon the satisfaction of all such conditions precedent, the term of the Lease Agreement shall thereupon end as to the Former Property and shall thereupon commence as to the Substitute Property, and all references to the Former Property shall apply with full force and effect to the Substitute Property. The City shall not be entitled to any reduction, diminution, extension or other

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modification of the Lease Payments whatsoever as a result of such substitution. The Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge the Lease Agreement of record against the Former Property.

ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease Agreement, as part of the consideration for the rental of the Property, all improvement, repair and maintenance of the Property are the sole responsibility of the City, and the City will pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Lease Payments herein provided, the Authority agrees to provide only the Property, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1932, Section 1933(4) and Sections 1941 and 1942 of the California Civil Code, but such waiver does not limit any of the rights of the City under the terms of this Lease Agreement.

The City will pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Property or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City is obligated to pay only such installments as are required to be paid during the Term of this Lease Agreement as and when the same become due.

The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its reasonable opinion, by nonpayment of any such items the interest of the Authority in the Property will be materially endangered or the Property or any part thereof will be subject to loss or forfeiture, in which event the City will promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.

The City shall promptly notify the Authority of any tax, assessment, utility or other charge it elects to contest.

Section 5.02. Modification of Property. The City has the right, at its own expense, to make additions, modifications and improvements to the Property or any portion thereof. All additions, modifications and improvements to the Property will thereafter comprise part of the Property and become subject to the provisions of this Lease Agreement. Such additions, modifications and improvements may not in any way damage the Property, or cause the Property to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, upon completion of any additions, modifications and improvements made thereto under this Section, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements.

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Section 5.03. Public Liability Insurance. The City shall maintain or cause to be maintained throughout the Term of this Lease Agreement a standard comprehensive general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Property. Such policy or policies must provide coverage with limits of at least $1,000,000 per occurrence, $3,000,000 in the aggregate, for bodily injury and property damage coverage, and excess liability umbrella coverage of at least $[principal amount], and in all events in form and amount (including any deductibles) satisfactory to the Authority. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with Authority's prior written consent, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid.

Section 5.04. Casualty Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, casualty insurance against loss or damage to all buildings situated on the Property and owned by the City, in an amount at least equal to the greater of the replacement value of the insured buildings and the aggregate principal amount of the Lease Payments outstanding, with a lender's loss payable endorsement.

Such insurance must, as nearly as practicable, cover loss or damage by all “special form” perils.

Such insurance shall be subject to a deductible of not to exceed $250,000. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with the Purchaser's prior written consent, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Section 6.02.

Section 5.05. Rental Interruption Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Property and the improvements situated thereon as a result of any of the hazards covered in the insurance required by Section 5.04, in an amount at least equal to the maximum Lease Payments coming due and payable during any future twenty-four (24) month period. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such rental interruption insurance shall not be self-insured by the City. The City will apply the Net Proceeds of such insurance towards the payment of the Lease Payments allocable to the insured improvements as the same become due and payable.

Section 5.06. Workers’ Compensation Insurance. If required by applicable California law, the City shall carry worker's compensation insurance covering all employees on, in, near or about the Property and, upon request, shall furnish to the Authority certificates evidencing such coverage throughout the Term of this Lease Agreement. Such insurance may be

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maintained as part of or in conjunction with any other insurance coverage carried by the City (including a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance.

Section 5.07. Recordation Hereof. On or before the Closing Date, the City shall, at its expense, cause this Lease Agreement, the Site and Facility Lease and the Assignment Agreement, or a memorandum hereof or thereof in form and substance approved by Bond Counsel, to be recorded in the office of the Los Angeles County Recorder with respect to the Property.

Section 5.08. Insurance Net Proceeds; Form of Policies. All insurance policies (or riders) required by this Article V and provided by third party insurance carriers shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten days before the cancellation or revision becomes effective. Each insurance policy or rider required by Sections 5.03, 5.04 and 5.05 and provided by third party insurance carriers shall name the City and the Authority as insured parties and the Authority as loss payee and shall include a lender's loss payable endorsement for the benefit of the Authority. In the case of coverage pursuant to Section 5.03, the Authority shall be added as an additional insured. Prior to the Closing Date, the City will deposit with the Authority policies (and riders and endorsements, if applicable) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Authority evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V unless such insurance is no longer obtainable, in which event the City shall notify the Authority of such fact.

Section 5.09. Installation of City's Personal Property. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City, in which the Authority has no interest, and may be modified or removed by the City at any time. The City must repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement prevents the City from purchasing or leasing items to be installed under this Section under a lease or conditional sale agreement, or subject to a vendor's lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest may attach to any part of the Property.

Section 5.10. Liens. The City will not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Property, other than as herein contemplated and except for such encumbrances as the City certifies in writing to the Authority do not materially and adversely affect the leasehold estate in the Property hereunder and for which the Authority provides its prior written approval, which approval shall be at Authority's sole discretion. Except as expressly provided in this Article V, the City will promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. The City will reimburse the Authority for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim.

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Section 5.11. Advances. If the City fails to perform any of its obligations under this Article V, the Authority may take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as additional rental hereunder, with interest at the rate set forth in Section 4.03(d).

Section 5.12. Environmental Covenants.
(a) Compliance with Laws; No Hazardous Substances. The City will comply with all Applicable Environmental Laws with respect to the Property and will not use, store, generate, treat, transport, or dispose of any Hazardous Substance thereon or in a manner that would cause any Hazardous Substance to later flow, migrate, leak, leach, or otherwise come to rest on or in the Property.
(b) Notification of Authority. The City will transmit copies of all notices, orders, or statements received from any governmental entity concerning violations or asserted violations of Applicable Environmental Laws with respect to the Property and any operations conducted thereon or any conditions existing thereon to the Authority, and the City will notify the Authority in writing immediately of any release, discharge, spill, or deposit of any Hazardous Substance that has occurred or is occurring that in any way affects or threatens to affect the Property, or the people, structures, or other property thereon, provided that no such notification shall create any liability or obligation on the part of the Authority.
(c) Access for Inspection. The City will permit the Authority, its agents, or any experts designated by the Authority to have full access to the Property during reasonable business hours for purposes of such independent investigation of compliance with all Applicable Environmental Laws, provided that the Authority has no obligation to do so, or any liability for any failure to do so, or any liability should it do so.

ARTICLE VI
EMINENT DOMAIN; USE OF NET PROCEEDS
Section 6.01. Eminent Domain. If all of the Property shall be taken permanently under the power of eminent domain or sold to a governmental entity threatening to exercise the power of eminent domain, the Term of this Lease Agreement shall cease as of the day possession shall be so taken. If less than all of the Property shall be taken permanently, or if all of the Property or any part thereof shall be taken temporarily under the power of eminent domain, (a) this Lease Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (b) there shall be a partial abatement of Lease Payments in an amount equal to the application of the Net Proceeds of any eminent domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon by the City and the Authority such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property.

Section 6.02. Application of Net Proceeds.
(a) From Insurance Award.

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(i) Any Net Proceeds of insurance against damage to or destruction of any part of the Property collected by the City in the event of any such damage or destruction shall be deposited by the City promptly upon receipt thereof in a special fund with the Authority designated as the “Insurance and Condemnation Fund.” (ii) Within ninety (90) days following the date of such deposit, the City shall determine and notify the Authority in writing of its determination either (A) that the replacement, repair, restoration, modification or improvement of the Property is not economically feasible or in the best interest of the City and the Net Proceeds, together with other moneys available therefor, are sufficient to cause the prepayment of the principal components of all unpaid Lease Payments pursuant to Section 9.03 hereof, or (B) that all or a portion of such Net Proceeds are to be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property and the fair rental value of the Property following such repair, restoration, replacement, modification or improvement will at least equal the unpaid principal component of the Lease Payments.
(iii) In the event the City's determination is as set forth in clause (A) of subparagraph (ii) above, such Net Proceeds shall be promptly applied to the prepayment of Lease Payments and other amounts pursuant to Section 9.03 of this Lease Agreement; provided, however, that in the event of damage or destruction of the Property in full, such Net Proceeds may be so applied only if sufficient, together with other moneys available therefor, to cause the prepayment of the principal components of all unpaid Lease Payments, all accrued and unpaid interest, prepayment premiums described in Section 9.02, and all other costs related to such prepayments pursuant to Section 9.03 of this Lease Agreement and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Property; provided further, however, that in the event of damage or destruction of the Property in part, such Net Proceeds may be applied to the prepayment of Lease Payments only if the resulting Lease Payments following such prepayment from Net Proceeds represent fair consideration for the remaining portions of the Property and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Property, evidenced by a certificate signed by a City Representative.
(iv) In the event the City's determination is as set forth in clause (B) of subparagraph (ii) above, such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property by the City, and until the Property has been restored to its prior condition, the City shall not place any lien or encumbrance on the Property that is senior to this Lease Agreement without the prior written consent of the Authority, at its sole discretion.
(b) From Eminent Domain Award. If all or any part of the Property shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the

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power of eminent domain) the Net Proceeds therefrom shall be deposited by the City in the Insurance and Condemnation Fund and shall be applied and disbursed as follows:
(i) If the City has given written notice to the Authority of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are not needed for repair or rehabilitation of the Property, the City shall so certify to the Authority and the Authority, and the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.03 of this Lease Agreement.
(ii) If the City has given written notice to the Authority and the Authority of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are needed for repair, rehabilitation or replacement of the Property, the City shall so certify to the Authority, and the City shall apply such amounts for such repair or rehabilitation.
(iii) If (A) less than all of the Property shall have been taken in such eminent domain proceedings or sold to a government threatening the use of eminent domain powers, and if the City has given written notice to the Authority of its determination that such eminent domain proceedings have materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under the Lease Agreement or (B) all of the Property shall have been taken in such eminent domain proceedings, then the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.03 of this Lease Agreement.
(iv) In making any determination under this Section 6.02(b), the City may, but shall not be required to, obtain at its expense, the report of an independent engineer or other independent professional consultant, a copy of which shall be filed with the Authority. Any such determination by the City shall be final. (c) From Title Insurance. The Net Proceeds from a title insurance award shall be deposited by the City in the Insurance and Condemnation Fund and credited towards the prepayment of Lease Payments required to be paid pursuant to Section 9.03 of this Lease Agreement.

Section 6.03. Abatement of Lease Payments in the Event of Damage or Destruction. Lease Payments shall be abated during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the City of the Property or any portion thereof to the extent to be agreed upon by the City and the Authority. The parties agree that the amounts of the Lease Payments under such circumstances shall not be less than the amounts of the unpaid Lease Payments as are then set forth in Exhibit B, unless such unpaid amounts are determined to be greater than the fair rental value of the portions of the

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Property not damaged or destroyed, based upon an appropriate method of valuation, in which event the Lease Payments shall be abated such that they represent said fair rental value. Such abatement shall continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction as evidenced by a certificate of a City Representative to the Authority. In the event of any such damage or destruction, this Lease Agreement shall continue in full force and effect and the City waives any right to terminate this Lease Agreement by virtue of any such damage and destruction. Notwithstanding the foregoing, there shall be no abatement of Lease Payments under this Section 6.03 to the extent that (a) the proceeds of rental interruption insurance or (b) amounts in the Insurance and Condemnation Fund are available to pay Lease Payments which would otherwise be abated under this Section 6.03, it being hereby declared that such proceeds and amounts constitute special funds for the payment of the Lease Payments.

ARTICLE VII

OTHER COVENANTS OF THE CITY
Section 7.01. Disclaimer of Warranties. THE AUTHORITY MAKES NO

AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS

TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY

PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF

THE PROPERTY OR ANY PORTION THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF. THE

CITY ACKNOWLEDGES THAT THE CITY LEASES THE PROPERTY AS-IS, IT BEING

AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event is the Authority liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Lease Agreement for the existence, furnishing, functioning or use of the Property by the City.

Section 7.02. Access to the Property; Grant and Conveyance of Right of Entry.

The City agrees that the Authority, and the Authority's successors or assigns, has the right at all reasonable times, following at least forty-eight (48) hours written notice provided to the City, to enter upon and to examine and inspect (to the extent permitted by law and public policy) the Property or any part thereof. The City further agrees that the Authority, and the Authority's successors or assigns shall have such rights of access to the Property or any component thereof; following at least 48 hours written notice provided to the City, as may be reasonably necessary to cause the proper maintenance of the Property if the City fails to perform its obligations hereunder.

Neither the Authority nor any of its assigns has any obligation to cause such proper maintenance.

The City further grants, conveys and confirms to the Authority, for the use, benefit and enjoyment of the Authority, its successors in interest to the Property, including the Authority, and its sublessees, and their respective employees, invitees, agents, independent contractors, patrons, customers, guests and members of the public visiting the Property, a right of entry which shall be irrevocable for the Term of this Lease Agreement over, across and under the property of the City adjacent to the Property to and from the Property for the purpose of: (a) ingress, egress, passage or access to and from the Property by pedestrian or vehicular traffic; (b) installation, maintenance and replacement of utility wires, cables, conduits and pipes; and (c) other purposes and uses necessary or desirable for access to and from and for operation and maintenance of the Property.

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Section 7.03. Release and Indemnification Covenants. To the extent permitted by law, the City hereby indemnifies the Authority, and its directors, officers, agents, employees, successors and assigns against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Property by the City or the City's employees, agents, contractors, invitees or licensees, (b) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Property, (d) any intentional misconduct or negligence of any sublessee of the City with respect to the Property, (e) the acquisition, construction, improvement and equipping of the Property, (f) the clean-up of any Hazardous Substances or toxic wastes from the Property, or (g) any claim alleging violation of any Applicable Environmental Laws, or the authorization of payment of the costs thereof. No indemnification is made under this Section 7.03 or elsewhere in this Lease Agreement for willful misconduct or gross negligence under this Lease Agreement by the Authority, or its respective officers, agents, employees, successors or assigns. The indemnification hereunder shall continue in full force and effect notwithstanding the full payment of all obligations under this Lease Agreement or the termination of the Term of this Lease Agreement for any reason. The City and the Authority each agree to promptly give notice to each other and the Authority of any claim or liability hereby indemnified against following learning thereof.

Section 7.04. Assignment by the Authority. The Authority may assign its rights, title and interests herein to the Purchaser. The Purchaser and the Authority will not undertake to sell or otherwise transfer the assigned rights hereunder or any note representing the payments due hereunder without the prior written consent of the City. The City shall pay all Lease Payments hereunder to the Authority, as provided in Section 4.03(h) hereof.

Section 7.05. Assignment Agreement and Subleasing by the City. This Lease Agreement may not be assigned, mortgaged, pledged or transferred by the City. The City may sublease the Property, or any portion thereof, with the prior written consent of the Authority, at the Authority's sole discretion, subject to all of the following conditions:
(a) This Lease Agreement and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City, and any sublease shall be subject and subordinate to this Lease Agreement.
(b) The City shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Authority a true and complete copy of such sublease. (c) No such sublease by the City may cause the Property to be used for a purpose other than as may be authorized under the provisions of the laws of the State. (d) The City shall furnish the Authority with a written opinion of Bond Counsel stating that such sublease does not cause the interest components of the Lease Payments to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State.

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(e) Any such sublease shall be subject and subordinate in all respects to the Site and Facility Lease and this Lease Agreement.

Notwithstanding the foregoing, in connection with any sublease entered into for financing purposes, the principal component of the then remaining Lease Payments plus the principal component of the sublease payments shall not exceed the fair market value of the Property.

Section 7.06. Amendment of Lease Agreement. This Lease Agreement may be amended in writing by the parties hereto.

Section 7.07. Records and Accounts. The City covenants and agrees that it shall keep proper books of record and accounts of its operations, in which complete and correct entries shall be made of all transactions relating to the City. Said books and records shall at all reasonable times be subject to the inspection of the Authority upon seventy-two (72) hours' prior notice.

Section 7.08. Observance of Laws and Regulations. The City will well and truly keep, observe and perform or cause to be kept, observed and performed all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired and enjoyed by the City, including the City's right to exist and carry on business as a municipal corporation, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default Defined. Any one or more of the following events constitutes an Event of Default hereunder:
(a) Failure by the City to pay any Lease Payment or other payment required to be paid hereunder at the time specified herein.
(b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in the preceding clause (a) of this Section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority. However, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30-day period, the Authority shall not unreasonably withhold their consent to an extension of such time (for a period not to exceed sixty (60) days) if corrective action is instituted by the City within such 30-day period and diligently pursued until the default is corrected.
(c) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of

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competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar federal or State act now existing or which may hereafter be enacted. (d) Any statement, representation or warranty made by the City in or pursuant to this Lease Agreement or its execution, delivery or performance shall have been false, incorrect, misleading or breached in any material respect on the date when made. (e) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which the City is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by the Authority or any affiliate of the Authority, or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $2,000,000.
(f) Any default by the City to observe any covenant, condition or agreement on its part to be observed or performed under the Site and Facility Lease. (g) Any court of competent jurisdiction shall find or rule that the Site and Facility Lease or this Lease Agreement is not valid or binding against the City. (h) Any Material Adverse Effect shall exist.

Section 8.02. Remedies on Default. Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under this Lease Agreement; provided, however, that notwithstanding anything herein to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable. Each and every covenant hereof to be kept and performed by the City is expressly made a condition and upon the breach thereof the Authority may exercise any and all rights granted hereunder; provided, that no termination of this Lease Agreement shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. Upon the occurrence and during the continuance of any Event of Default, the Authority may exercise any one or more of the following remedies:
(a) Default Rate. So long as an Event of Default has occurred and is continuing, the Lease Payments shall bear a rate of interest at the Default Rate. (b) Enforcement of Payments Without Termination. If the Authority does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (c) hereof, the City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained and shall reimburse the Authority for any deficiency arising out of the re-leasing of the Property, or, if the Authority is unable to re-lease the Property, then for the full amount of all Lease Payments to the end of the Term of this Lease Agreement, but said Lease Payments and/or deficiency shall be payable only at the same time and in the same manner as hereinabove provided for the payment of Lease Payments hereunder, notwithstanding such entry or re-entry by the

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Authority or any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property or the exercise of any other remedy by the Authority. The City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to enter upon and re-lease the Property upon the occurrence and continuation of an Event of Default and to remove all personal property whatsoever situated upon the Property, to place such property in storage or other suitable place in Los Angeles County for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising or occasioned by any such entry upon and re-leasing of the Property and the removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to release the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-leasing shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such re-leasing is made or the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (c) hereof. The City agrees to surrender and quit possession of the Property upon demand of the Authority for the purpose of enabling the Property to be re-let under this paragraph. Any rental obtained by the Authority in excess of the sum of Lease Payments plus costs and expenses incurred by the Authority for its services in re-leasing the Property shall be paid to the City. (c) Termination of Lease. If an Event of Default occurs and is continuing hereunder, the Authority at its option may terminate this Lease Agreement and re-lease all or any portion of the Property, subject to the Site and Facility Lease. If the Authority terminates this Lease Agreement at its option and in the manner hereinafter provided due to a default by the City (and notwithstanding any re-entry upon the Property by the Authority in any manner whatsoever or the re-leasing of the Property), the City nevertheless agrees to pay to the Authority all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as is herein provided in the case of payment of Lease Payments and Additional Payments. Any surplus received by the Authority from such re-leasing shall be applied by the Authority to Lease Payments due under this Lease Agreement. Neither notice to pay rent or to deliver up possession of the premises given under law nor any proceeding in unlawful detainer taken by the Authority shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property, or of the remainder of the Term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice.
(d) Proceedings at Law or In Equity. If an Event of Default occurs and continues hereunder, the Authority may take whatever action at law or in equity may appear

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necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. (e) Remedies under the Site and Facility Lease. If an Event of Default occurs and continues hereunder, the Authority may exercise its rights under the Site and Facility Lease.

Section 8.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law.

Section 8.04. Agreement to Pay Attorneys' Fees and Expenses. If either party to this Lease Agreement defaults under any of the provisions hereof and the non-defaulting party should employ attorneys (including in-house legal counsel) or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the non-defaulting party the reasonable fees of such attorneys (including allocable costs and expenses of in-house legal counsel, if any) and such other expenses so incurred by the non-defaulting party.

Section 8.05. No Additional Waiver Implied by One Waiver. If any agreement contained in this Lease Agreement is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and will not be deemed to waive any other breach hereunder.

Section 8.06. Judicial Reference.
(a) Judicial Reference. The Authority and the City hereby agree: (i) each proceeding or hearing based upon or arising out of, directly or indirectly, this Lease Agreement, the Site and Facility Lease, the Property or any document related thereto, any dealings between the City and the Authority related to the subject matter of this Lease Agreement, the Site and Facility Lease or any related transactions, and/or the relationship that is being established between the City and the Authority (hereinafter, a “Claim”) shall be determined by a consensual general judicial reference (the “Reference”) pursuant to the provisions of Section 638 et seq. of the California Code of Civil Procedure, as such statutes may be amended or modified from time to time; (ii) upon a written request, or upon an appropriate motion by either the Authority or the City, as applicable, any pending action relating to any Claim and every Claim shall be heard by a single Referee (as defined below) who shall then try all issues (including any and all questions of law and questions of fact relating thereto), and issue findings of fact and conclusions of law and report a statement of decision. The Referee's statement of decision will constitute the conclusive

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determination of the Claim. The Authority and the City agree that the Referee shall have the power to issue all legal and equitable relief appropriate under the circumstances before the Referee; (iii) the Authority and the City shall promptly and diligently cooperate with one another, as applicable, and the Referee, and shall perform such acts as may be necessary to obtain prompt and expeditious resolution of all Claims in accordance with the terms of this Section 8.06; (iv) either the Authority or the City, as applicable, may file the Referee's findings, conclusions and statement with the clerk or judge of any appropriate court, file a motion to confirm the Referee's report and have judgment entered thereon. If the report is deemed incomplete by such court, the Referee may be required to complete the report and resubmit it; (v) the Authority and the City, as applicable, will each have such rights to assert such objections as are set forth in Section 638 et seq. of the California Code of Civil Procedure; and (vi) all proceedings shall be closed to the public and confidential, and all records relating to the Reference shall be permanently sealed when the order thereon becomes final.
(b) Selection of Referee; Powers. The parties to the Reference proceeding shall select a single neutral referee (the “Referee”), who shall be a retired judge or justice of the courts of the State of California, or a federal court judge, in each case, with at least ten (10) years of judicial experience in civil matters. The Referee shall be appointed in accordance with Section 638 of the California Code of Civil Procedure (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts). If within ten (10) days after the request or motion for the Reference, the parties to the Reference proceeding cannot agree upon a Referee, then any party to such proceeding may request or move that the Referee be appointed by the Presiding Judge of the Los Angeles County Superior Court, or of the U.S. District Court for the Southern District of California. The Referee shall determine all issues relating to the applicability, interpretation, legality and enforceability of this Section 8.06. (c) Provisional Remedies and Self Help. No provision of this Section 8.06 shall limit the right of either the Authority or the City, as the case may be, to (i) exercise such self-help remedies as might otherwise be available under applicable law, or (ii) ) obtain or oppose provisional or ancillary remedies, including without limitation injunctive relief, writs of possession, the appointment of a receiver, and/or additional or supplementary remedies from a court of competent jurisdiction before, after, or during the pendency of any Reference. The exercise of, or opposition to, any such remedy does not waive the right of the Authority or the City to the Reference pursuant to this Section 8.06(c). (d) Costs and Fees. Promptly following the selection of the Referee, the parties to such Reference proceeding shall each advance equal portions of the estimated fees and costs of the Referee. In the statement of decision issued by the Referee, the Referee shall award costs, including reasonable attorneys' fees, to the prevailing party, if any, and may order the Referee's fees to be paid or shared by the parties to such Reference proceeding in such manner as the Referee deems just.

ARTICLE IX

PREPAYMENT OF LEASE PAYMENTS

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Section 9.01. Security Deposit. Notwithstanding any other provision of this Lease Agreement, the City may on any date secure the payment of the Lease Payments in whole or in part by depositing with the Authority or a fiduciary reasonably satisfactory to the Authority, in trust, an amount of cash, which shall be held in a segregated trust or escrow fund under a trust or escrow agreement that is in form and content acceptable to the Authority, which cash so held is either (a) sufficient to pay such Lease Payments, including the principal and interest components thereof, in accordance with the Lease Payment schedule set forth in Exhibit B, or (b) invested in whole in non-callable Federal Securities maturing not later than the dates such funds will be required to make Lease Payments or any prepayment in an amount which is sufficient, in the opinion of an independent certified public accountant (which opinion must be in form and substance, and with such an accountant, acceptable to the Authority and addressed and delivered to the Authority), together with interest to accrue thereon and without reinvestment and together with any cash which is so deposited, to pay such Lease Payments when due under Section 4.03(a) or when due on any optional prepayment date under Section 9.02, as the City instructs at the time of said deposit; provided, however, that at or prior to the date on which any such security deposit is established, the City shall deliver to the Authority an opinion of Bond Counsel (in form and substance acceptable to the Authority) to the effect that any such security deposit will not adversely affect the excludability of the interest component of Lease Payments from gross income of the Authority for federal income tax purposes. In the event of a security deposit under this Section with respect to all unpaid Lease Payments, (i) the Term of this Lease Agreement shall continue, (ii) all obligations of the City under this Lease Agreement, and all security provided by this Lease Agreement for said obligations, shall thereupon cease and terminate, excepting only (A) the obligation of the City to make, or cause to be made, all of the Lease Payments from such security deposit and, to the extent of any deficiency, as rent payable from other legally available funds of the City, and (B) the release and indemnification obligations of the City under subparagraphs (f) and (g) of Section 7.03, and (iii) under Section 4.05, the Authority's leasehold interest in the Property will vest in the City on the date of said deposit automatically and without further action by the City or the Authority. The City hereby grants a first priority security interest in and the lien on said security deposit and all proceeds thereof in favor of the Authority. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease Agreement and, notwithstanding anything to the contrary herein, Lease Payments therefrom shall not be subject to abatement under Section 6.03 hereof to the extent payable from the funds held by the Authority or the fiduciary as described in the first sentence of this Section 9.01.

Section 9.02. Optional Prepayment. The City may prepay the principal component of the Lease Payments in full or in part, in such manner as shall be selected by the City, on any date at an amount equal to the principal amount of Lease Payments to be prepaid, together accrued interest to the date fixed for prepayment, without premium.

Section 9.03. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City shall be obligated to prepay the unpaid principal components of the Lease Payments in whole or in part in such order of prepayment as shall be selected by the City on any date, together with any accrued and unpaid interest, from and to the extent of any proceeds of insurance award or condemnation award with respect to the Property to be used for such purpose under Section 6.02.

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ARTICLE X

MISCELLANEOUS
Section 10.01. Notices. Any notice, request, complaint, demand or other communication under this Lease Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by facsimile transmission or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, (b) forty-eight (48) hours after deposit in the United States of America first class mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority and the City may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City: City of Covina
125 E. College Street
P.O. Box 460
Covina, CA 91723
Attention: City Manager
Phone: (626) 384-5410
If to the Authority: Covina Public Financing Authority
125 E. College Street
P.O. Box 460
Covina, CA 91723
Attention: Executive Director
Phone: (626) 384-5410
Section 10.02. Binding Effect. This Lease Agreement inures to the benefit of and is binding upon the Authority, the City and their respective successors and assigns.

Section 10.03. Severability. If any provision of this Lease Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision hereof.

Section 10.04. Net-net-net Lease. This Lease Agreement is a “net-net-net lease” and the City hereby agrees that the Lease Payments are an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.

Section 10.05. Further Assurances and Corrective Instruments. The Authority and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Lease Agreement.

Section 10.06. Execution in Counterparts. This Lease Agreement may be executed in several counterparts, each of which is an original and all of which constitutes one and the same instrument.

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Section 10.07. Applicable Law. This Lease Agreement is governed by and construed in accordance with the laws of the State.

Section 10.08. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or section of this Lease Agreement.

IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

CITY OF COVINA FINANCING

AUTHORITY
By:

Chris Marcarello, Executive Director
ATTEST:

Evelyn Leech, Acting Deputy City Clerk

CITY OF COVINA
By:

Chris Marcarello, City Manager
ATTEST:

Candice C. Lee, City Attorney

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EXHIBIT A

DESCRIPTION OF PROPERTY
Covina Center for Performing Arts located at 100-104 North Citrus Avenue and 110-112 North Citrus Avenue Covina, California 91723 and the following:

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EXHIBIT B

SCHEDULE OF LEASE PAYMENTS

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$2,750,000

LEASE AGREEMENT
dated October 1, 2022,
by and between the
Covina Public Financing Authority, as Sublessor, and
the City of Covina, California, as Sublessee,

CERTIFICATE OF ACCEPTANCE OF LEASE AGREEMENT
This is to certify that the interest in real property conveyed by the Lease Agreement, dated October 1, 2022, from the Covina Public Financing Authority, as sublessor, to the City of Covina, California, as sublessee (the “City”), as evidenced by the Memorandum of Lease Agreement recorded concurrently herewith, is hereby accepted by the undersigned officer on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on __, 2022, and the sublessee consents to recordation thereof by its duly authorized officer.

Dated as of October ____, 2022 CITY OF COVINA
By:

Chris Marcarello
City Manager

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ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated October 1, 2022 (this “Assignment Agreement”), is among the COVINA PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), the CITY OF COVINA SEWER FUND, and its successors and assigns (in its capacity as assignee, the “Assignee” or “Sewer Fund”) and the CITY OF COVINA (the “City”).

BACKGROUND:

1. In order to assist the City with financing the acquisition of the Covina Center for Performing Arts (the “Theatre”), the City is simultaneously leasing the Theatre (the “Leased Property”) more particularly described in a Site and Facility Lease dated October 1, 2022 (the “Site Lease”), between the City, as lessor, and the Authority, as lessee, and the Authority is leasing the Leased Property back to the City pursuant to a Lease Agreement, dated October 1, 2022 (the “Lease”), between the Authority, as sublessor, and the City, as sublessee. Under the Lease, the City is obligated to pay annual lease payments (the “Lease Payments”) to the Authority in consideration of the Lease.

2. The Authority wishes to assign its rights under the Lease, including but not limited to its right to receive and enforce the Lease Payments, to the Assignee.

AGREEMENT:

In consideration of the material covenants contained in this Assignment Agreement, the parties hereto hereby formally covenant, agree and bind themselves as follows:

SECTION 1. Defined Terms. All capitalized terms not otherwise defined herein have the respective meanings given those terms in the Lease.

SECTION 2. Assignment. The Authority hereby assigns to the Assignee all of the Authority's rights under the Lease (excepting only the Authority's rights under Sections 5.12, 7.03 and 8.04 of the Lease) (the “Assigned Rights”), including but not limited to:
(a) the right to receive and collect all of the Lease Payments from the City under the Lease,
(b) the right to receive and collect any proceeds of any insurance maintained thereunder with respect to the Leased Property, or any eminent domain award (or proceeds of sale under threat of eminent domain) paid with respect to the Leased Property, and (c) the right to exercise such rights and remedies conferred on the Authority under the Lease as may be necessary or convenient (i) to enforce payment of the Lease Payments and any amounts required to be applied to the prepayment of the Lease Payments, or (ii) otherwise to protect the interests of the Assignee in the event of a default by the City under the Lease, which rights and remedies may be exercised by the Assignee.

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The assignment made under this Section 2 is absolute and irrevocable, and without recourse to the Authority. The assignment is evidenced by the Promissory Note which is attached hereto as Appendix A and by this reference herein incorporated.

SECTION 3. Acceptance.
(a) The Authority hereby acknowledges that the purchase price of $2,750,000 has been paid by the Sewer Fund.
(b) The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Sewer Fund, irrevocably and absolutely, without recourse, all of its right, title and interest in and to the Lease, including, without limitation, the right to receive the Lease Payments to be paid by the City under and pursuant to the Lease; provided, however, that the Authority shall retain the rights under the Lease to indemnification and payment for any costs and expenses. This assignment is irrevocable and absolute and is immediately effective.
(c) The Assignee hereby accepts the assignments made herein for the purpose of securing the payments due under the Lease to, and the rights under the Lease of, the Authority.

SECTION 4. Consideration; Deposit of Funds. In consideration of the assignment to the Assignee of the Lease Payments and certain other rights of the Authority under Section 2, the Assignee hereby agrees to deposit the amount of $2,750,000 with the City of Covina in the 6300 0000 56710 THETR, Sewer Fund – Theater Loan account of the General Fund.

SECTION 5. Representations. The Authority represents and warrants to the Assignee that:
(a) Enforceability of Assignment Agreement. The Authority has the legal right, power, and authority to execute, deliver and perform this Assignment Agreement, and this Assignment Agreement is a valid, binding, and enforceable obligation of the Authority, except as such enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally and by the application of equitable principles. (b) Marketable Title. Good and marketable title to the rights assigned hereunder has been duly vested in the Assignee free and clear of any liens, security interests, encumbrances or other claims other than the rights of the City under the Lease, and the Authority has not assigned or transferred any of the rights assigned hereunder or any interest in the rights assigned hereunder to any party other than the Assignee.
(c) Neither the execution and delivery of this Assignment Agreement, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound.
(d) Each of the City and the Authority acknowledges and agrees that the Sewer Fund is acting and has acted solely as lender for its own loan account and not as a fiduciary for the City

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or the Authority and is not acting as a broker, dealer, municipal advisor or municipal securities underwriter in connection with the execution or delivery of the Lease, or this Assignment Agreement or any documents relating thereto.

SECTION 6. Covenants.
(a) Nonimpairment of Lease. The Authority agrees that it (1) shall not have any right to amend, modify, compromise, release, terminate or permit prepayment of the Lease, and (2) shall not take any action that may impair the payment of Lease Payments or the validity or enforceability of the Lease.
(b) Lease Payments. If the Authority receives any Lease Payments, then the Authority shall receive such payments in trust for the Assignee and shall immediately deliver the same to the Assignee in the form received, duly endorsed by the Authority for deposit by the Assignee.

SECTION 7. Restriction on Transfers. The Assignee shall not have the right to assign, transfer or convey the Lease or any interest therein or portion thereof.

SECTION 8. Expenses. The fees and disbursements of Special Counsel, the fees and disbursements of the financial advisor to the City or the Authority, fees of Assignee's counsel and other miscellaneous expenses of the City or the Authority incurred in connection with the offering and delivery of the Lease shall all be the obligation of the Authority. The Assignee shall not have any responsibility for any expenses associated with the Lease, including, but not limited to, the expenses identified above as the obligation of the Authority.

SECTION 9. Release and Indemnification. The City shall, to the extent permitted by law, indemnify and save the Assignee, and its respective officers, agents, directors and employees, harmless from and against all claims, losses, liabilities, costs, expenses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management or operation of, or from any work or thing done on, the Leased Property by the City, including injury or damages to any persons or property arising therefrom, (b) any breach or default on the part of the City in the performance of any of its obligations under the Lease, or (c) any act of negligence of the City or the Authority or of any of their agents, contractors, servants, employees or licensees with respect to the Leased Property. No indemnification is made under this Section for willful misconduct or negligence by Assignee or its officers, agents, directors or employees. The provisions of this Section shall continue in full force and effect, notwithstanding the termination of the Term of the Lease for any reason.

SECTION 10. Conditions to Assignee Performance. The Assignee hereby enters into this Assignment Agreement in reliance upon its own due diligence and the representations and warranties of the City contained herein and the representations and warranties to be contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the City and the Authority of their respective obligations both on the Closing Date. Accordingly, the obligations of the Assignee under this Assignment Agreement to purchase and to accept the assignment of Lease hereunder shall be subject, at the option of the Assignee, to the accuracy in all material respects of the representations and warranties of the City contained herein as of the date hereof, to the accuracy in all material respects of the statements of the officers and other

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officials of the City and the Authority made in any certificate or document furnished pursuant to the provisions of the Lease or hereof, to the performance by the City and the Authority of their respective obligations to be performed hereunder and under the Lease, at or prior to the Closing Date, and also shall be subject to such additional legal opinions, certificates, proceedings, instruments and other documents as counsel to the Assignee or the Assignee may reasonably request to evidence the truth and accuracy, as of the Closing Date, of the representations contained herein and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.

SECTION 11. Execution in Counterparts. This Assignment Agreement may be executed in any number of counterparts, each of which is an original and all together constitute one and the same agreement. Separate counterparts of this Assignment Agreement may be separately executed by the Assignee, the Authority and the City, both with the same force and effect as though the same counterpart had been executed by the Assignee, the Authority and the City.

SECTION 12. Binding Effect. This Assignment Agreement inures to the benefit of and binds the Authority and the Assignee, and their respective successors and assigns, subject, however, to the limitations contained herein.

SECTION 13. Fees and Costs. The Authority agrees to pay, or cause the City to pay all fees and costs relating to this Assignment Agreement, the Lease and any related transactions including financial advisory fees, Bond Counsel fees, fees of the Assignee's counsel or any other fees and costs in connection with this transaction.

SECTION 14. Governing Law. This Assignment Agreement is governed by the laws of the State of California.
[Signatures on following page]

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IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their duly authorized officers as of the day and year first written above.

COVINA PUBLIC FINANCING AUTHORITY
By:

Chris Marcarello, Executive Director

CITY OF COVINA WATER AND SEWER FUNDS,
as Assignee
By:

Chris Marcarello, City Manager
CITY OF COVINA, as City
By:

Chris Marcarello, City Manager

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APPENDIX A

PROMISSORY NOTE

THE COVINA PUBLIC FINANCING AUTHORITY
$2,750,000 October 1, 2022
Covina, California
For value received, COVINA PUBLIC FINANCING AUTHORITY, a joint powers public financing authority (“Authority”), pursuant to the provisions of this Promissory Note (“Note”), promises to pay to the CITY OF COVINA SEWER FUND (“Holder”), at 125 E.

College Street, Covina, CA 91723, or such other place as the Holder of this Note may from time to time determine, the amount of [___] Million Dollars ($[principal amount] ), in accordance with the terms of this Note. This Note is secured by an assignment to Holder of the Authority's right to receive the lease payments due under that certain Lease Agreement, dated October 1, 2022, between the Authority and the City of Covina (“Lease”), and evidences the assignment of the payment to the Sewer Fund as described in the Assignment Agreement, dated October 1, 2022 (the “Assignment Agreement”).

1. Terms and Conditions of Payment.

1.1 Interest. The principal balance of this Note, outstanding from time to time, shall bear at the rate of 1.57% per annum, commencing on October 01, 2022. Interest shall be computed on the basis of a year consisting of 360 days and twelve 30-day months. No amount shall be payable hereunder unless all conditions for the close of escrow have been satisfied under the Lease.

1.2 Payments.

1.2.1 Annual Note Payments. Commencing on October 1, 2022, and continuing until the Maturity Date (as defined below), annual note payments due on October 1 of each year in the amounts set forth on the attached Schedule 1 incorporated herein shall be due by Authority under this Note (each, a “Note Payment”). Payment is subject to deferral as set out in the Lease. All payments made under this Note shall be payable in lawful money of the United States of America.

1.2.2 Balance on Maturity Date. The final Note Payment under this Note shall be due and payable on the date that is [October 1, 2042] (the “Maturity Date”).

2. Prepayment. Authority shall have the right to prepay this Note on any date by well and truly paying the principal amount owing hereunder with interest accrued to the date of prepayment, without penalty or premium.

3. Late Charge. In the event Authority should fail to make any of the payments due under this Note, the payment in default shall continue as an obligation of Authority until the amount in default shall have been fully paid, and Authority agrees to pay the same with interest

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thereon, from 30 days after the date of default to the date of payment, at the rate of [4.00]% per annum.

4. Security. This Note is secured by an assignment to Holder of the right by Authority to receive certain Lease Payments under the Lease.

5. Nonrecourse. Holder agrees that it will look solely to the Lease as collateral hereunder to secure the repayment of the indebtedness evidenced hereby. No other property or assets of Authority, or any agency, city, partner, member, or principal of Authority, shall be subject to levy, execution or other enforcement procedure for the satisfaction of the remedies of Holder, or for any payment required to be made under this Note or any other documents related to this Note. Holder acknowledges that Authority's revenue is limited to moneys provided by the City of Covina under the Lease. Authority's obligation to pay on this Note is a special obligation limited solely to the revenue from the Lease. This Note does not constitute a general pledge of the faith and credit of the Authority, but rather is a special limited obligation of Authority payable solely from the funds provided to Authority from the City. Neither the credit nor the taxing power of the Authority is pledged to the payment of the annual payments on this Note and no Holder will have any right to demand payment by the Authority out of any funds or revenue other than funds provided to Authority from the City pursuant to the Lease.

6. Default. The failure by Authority to make any payment due under this Note within thirty (30) days after written notice from Holder shall be deemed an “Event of Default” under this Note.

7. Remedies Upon Default. Upon the occurrence of an Event of Default under this Note, Holder's sole and exclusive remedy, in lieu of any other remedies available to Holder at law or in equity, shall be as set forth in Section 9.02 of the Lease. Holder shall not have the right at any time to accelerate any payments due in the future under this Note.

8. Miscellaneous.

8.1 Notices. All notices, demands, consents, requests or other communications required to or permitted to be given pursuant to this Agreement shall be in writing, shall be given only in accordance with the provisions of this Section, shall be addressed to the parties in the manner set forth below, and shall be conclusively deemed to have been properly delivered:
(a) upon receipt when hand delivered during normal business hours (provided that notices which are hand delivered shall not be effective unless the sending party obtains a signature of a person at such address that the notice has been received); (b) upon receipt when sent by facsimile to the number set forth below (provided, however, that notices given by facsimile shall not be effective unless the sending party delivers the notice also by one other method permitted under this Section); (c) upon the day of delivery if the notice has been deposited in an authorized receptacle of the United States Postal Service as first-class, registered or certified mail, postage prepaid, with a return receipt requested (provided that the sender has in its possession the return receipt to prove actual delivery); or (d) one (1) business day after the notice has been deposited with either FedEx or United Parcel Service to be delivered by overnight delivery (provided that the sending party receives a confirmation of actual delivery from the courier).

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If to the Authority: Covina Public Financing Authority
125 E. College Street
Covina, CA 91723
Attn: Executive Director
Telephone: (626) 384-5430

8.2 Each party shall make an ordinary, good faith effort to ensure that it will accept or receive notices that are given in accordance with this Section, and that any person to be given notice actually receives such notice. Any notice to a party which is required to be given to multiple addresses shall only be deemed to have been delivered when all of the notices to that party have been delivered pursuant to this Section. If any notice is refused, the notice shall be deemed to have been delivered upon such refusal. Any notice delivered after 5:00 p.m. (recipient's time) or on a non-business day shall be deemed delivered on the next business day. Notices delivered by electronic mail shall not be deemed properly delivered, even if the electronic mail addresses of the parties appear above or otherwise provided for convenience. A party may change or supplement the addresses given above, or designate additional addressees, for purposes of this Section by delivering to the other party written notice in the manner set forth above.

8.3 Governing Law. The terms of this Note were negotiated in the State of California and it is understood and agreed that the legality, enforcement and construction of this Note shall be governed by California law applicable to agreements made in California.

8.4 Successor Interests/No Transfer or Sale of Note. The terms of this Note shall be binding upon Authority its heirs, personal representatives, successors and assigns, and shall inure to the benefit of Holder and its successors and assigns. Neither this Note nor any fractional interest in this Note may be sold or transferred.

8.5 Severability. If a court of competent jurisdiction or arbitration tribunal finds any provision in this Note to be invalid, such invalidity shall not affect the remainder of the Note.

In such event, the invalid provision shall be deemed severed therefrom and the remainder of the Note shall remain enforceable in accordance with its terms and of full force and effect.

8.6 Weekends and Holidays. Whenever any payment to be made under this Note is due on a Saturday, Sunday, or public holiday, such payment may be made on the next succeeding business day, and such extension of time shall be included in computing interest in connection with such payment.

IN WITNESS WHEREOF, Authority, on the day and year first above written, has caused this Note to be duly executed.

AUTHORITY:

COVINA PUBLIC FINANCING
AUTHORITY, a joint powers authority

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By:

Name:

Title:

Date:

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SCHEDULE 1
Payment Schedule

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MEMORANDUM OF LEASE AGREEMENT
Recording requested by and when
recorded mail to:

City of Covina
125 E College Street
Covina, CA 91723
Attn: Brian K. Lee
This Document is recorded for the benefit of the City of Covina and is exempt from California documentary transfer tax pursuant to Section 11928 of the California Revenue and Taxation Code and from recording fees pursuant to Sections 6103, 27383 and 27388.1 of the California Government Code.
====================================================================

MEMORANDUM OF LEASE AGREEMENT
This Memorandum of Lease Agreement (this “Memorandum of Lease Agreement”), is entered into October 1, 2022, by and between the COVINA PUBLIC FINANCING AUTHORITY, an a public agency existing under the laws of the State of California, as lessor (the “Authority”), and the CITY OF COVINA, a general law city and municipal corporation duly organized and existing under the laws of the State of California, as lessee (the “City”), who agree as follows:

Section 1. The Lease. The City leases from the Authority and the Authority leases to the City, certain real property, and the improvements situated thereon, described in Exhibit A hereto, upon the terms and conditions, and for the term, more fully set forth in the Lease Agreement, dated October 1, 2022, by and between the Authority, as lessor, and the City, as lessee (the “Lease Agreement”), all of the provisions of which are hereby incorporated into this Memorandum of Lease Agreement by reference.

Section 2. Leased Premises; Term. The Authority leases, lets and demises unto the City and the City leases, hires and takes from the Authority, that certain parcel of real property, and the improvements thereon, situated in the City of Covina, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the “Property”). The Lease Agreement is for a term commencing on the Closing Date and ending on October 1, [2042], or such earlier or later date on which the Lease Payments (as defined in the Lease Agreement) are paid in full or provision has been made for such payment in accordance with the Lease Agreement.

Section 3. Provisions Binding on Successors and Assigns. Subject to the provisions of the Lease Agreement relating to assignment and subletting, the Lease Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns, including the Authority.

Section 4. Purpose of Memorandum. This Memorandum of Lease Agreement is prepared for the purpose of recordation, and it in no way modifies the provisions of the Lease Agreement.

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Covina City CouncilSeptember 20, 2022

Covina City Council
September 20, 2022