Desert Hot Springs City Council
September 5, 2023

- 3 -
rates as shown in Exhibit “B.” The billing rates provided in Exhibit “B” shall be reviewed annually and revised as the Parties may agree upon in writing.

2.2 Ultimate Configuration. In the event streets are added and new traffic signals installed on the Cathedral City and Desert Hot Springs boundary, this Agreement may be updated by submitting a revised Exhibit “A.” The governing bodies of the Parties must approve the revised exhibit prior to the revision taking effect.

3. Payment. Billing by the Lead Agency shall be made no more frequently than quarterly and shall include an itemized accounting of all costs and services rendered during the period. The Secondary Agency shall pay the billed amount within thirty (30) calendar days after receipt of billing from the Lead Agency. In the event of a dispute, the Secondary Agency shall submit any such dispute in writing to Lead Agency. The Parties shall endeavor to resolve any such dispute and pay the balance due, if any, within a reasonable period of time.

4. Records. Records for the work provided under this Agreement shall be kept by the Lead Agency and shall include the Cost of Services performed. Such records shall be maintained in accordance with the Lead Agency’s record retention policy and, upon reasonable notice, shall be made available for inspection by the Secondary Agency.

5. Term and Termination. This Agreement shall commence on May 30, 2014 and shall remain in force until terminated in accordance with this section.

Notwithstanding the foregoing, the Secondary Agency shall compensate the Lead Agency for its prorated share of the Electrical Cost of the electrical power delivered to the Installations effective May 30, 2014. This Agreement may be terminated by any Party hereto upon thirty (30) days’ written notice to the other Party of such termination. Any payment obligations outstanding and the indemnity provisions herein below shall survive any such termination.

6. Indemnity. Desert Hot Springs shall indemnify, defend, save and hold harmless Cathedral City, its officers, elected officials, agents, representatives and employees of and from any and all liability, claims, demands, debts, damages, suits, actions and causes of action of whatsoever kind, nature or sort, including, but not by way of limitation, wrongful death, personal injury or damage to property, the expenses of the defense of said parties and the payment of the attorneys’ fees in any such claim or action arising out of or in any manner connected with activities of Desert Hot Springs or employees of Desert Hot Springs under this Agreement.

Cathedral City shall indemnify, defend, save and hold harmless Desert Hot Springs, its officers, elected officials, agents, representatives and employees of and from any and all liability, claims, demands, debts, damages, suits, actions and causes of action of whatsoever kind, nature or sort, including, but not by way of limitation, wrongful death, personal injury or damage to property, the expenses of

- 4 -
the defense of said parties and the payment of the attorneys’ fees in any such claim or action arising out of or in any manner connected with activities of Cathedral City or employees of Cathedral City under this Agreement.

7. Insurance. Desert Hot Springs shall procure and maintain for the duration of this Agreement liability insurance against claims for injuries to persons or damages to property in an amount not less than One Million Dollars ($1,000,000.00) which may arise from or in connection with the activities of Desert Hot Springs or employees of Desert Hot Springs under this Agreement by including Cathedral City as a “Protected Party” within the insurance program maintained by Desert Hot Springs with the PERMA.

Cathedral City shall procure and maintain for the duration of this Agreement liability insurance against claims for injuries to persons or damages to property in an amount not less than One Million Dollars ($1,000,000.00) which may arise from or in connection with the activities of Cathedral City or employees of Cathedral City under this Agreement by including Desert Hot Springs as a “Protected Party” within the insurance program maintained by Cathedral City with the PERMA.

8. Notice. All notices or other communications required or permitted hereunder shall be in writing and shall be either personally delivered, or sent by means of professional overnight courier service which confirms receipt in writing (such as Federal Express or UPS), or sent by telecopy or facsimile (“FAX”) machine capable of confirming transmission and receipt, or sent by certified or registered mail, return receipt requested, postage prepaid to the following parties at the following addresses or numbers:

If to “Cathedral City”: City of Cathedral City
68-700 Avenida Lalo Guerrero
Cathedral City, CA 92234
Attention: Public Works, Parks
and Facilities Manager
Telephone: (760) 770-0390
FAX: (760) 328-8622
If to “Desert Hot Springs”: City of Desert Hot Springs
11999 Palm Drive
Desert Hot Springs, CA 92270
Attention: Public Works Director
Telephone: (760) 329-6411 X 223
FAX: (760) 288-0639
Notices sent in accordance with this paragraph shall be deemed delivered upon the next business day following the: (1) date of delivery as indicated on the written confirmation of delivery (if sent by overnight courier services); (2) the date of the actual receipt (if personally delivered by other means); (3) date of transmission (if

- 5 -
sent by telecopy or facsimile machine), or; (4) the date of delivery as indicated on the return receipt (if sent by certified or registered mail, return receipt requested).

Notice of change of address shall be given by written notice in the manner detailed in this paragraph.

9. General Provisions.

9.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto, and contains all of the agreements between the parties with respect to the subject matter hereof. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the subject matter hereof.

9.2 Amendment and Waiver. This Agreement may be amended or revoked at any time by a written agreement executed by Cathedral City and Desert Hot Springs. No change or modification of this Agreement shall be valid unless the same is in writing and signed by all the parties. No waiver of any provision of this Agreement shall be valid unless in writing and signed by the party granting such waiver, and in no event shall any such waiver be deemed to be a waiver of any other term, covenant or condition of this Agreement.

9.3 Invalid Provision. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

9.4 Headings. The headings of the articles, sections, subsections or paragraphs of this Agreement are inserted solely for convenience of reference, and shall not be deemed to govern, limit or aid in the construction or interpretation of any term of this Agreement.

9.5 Independent Counsel. Each Party has had the opportunity to consult with its own attorney with respect to this Agreement, and in the event that any language contained herein is construed to be vague or ambiguous, this Agreement shall not be strictly construed against either Party.

9.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of Cathedral City and Desert Hot Springs.

9.7 Other Documents. The parties hereto agree that each shall, concurrently herewith, or at any time hereafter, on the demand of the other, execute any other documents or instruments or cause to be done any other acts and things as may be necessary or convenient to carry out the intents and purposes of this Agreement.

- 6 -

9.8 Counterparts. This Agreement may be executed in any one or more counterparts, and all so executed shall constitute one and the same instrument. Any signature page on any counterpart hereof may be detached from and added to any other counterpart identical in form hereto.

9.9 Attorneys’ Fees. In the event that any party to this Agreement shall bring an action to enforce the provisions of this Agreement or as a result of any default in the performance of any of the provisions of this Agreement, the prevailing party in such action shall be entitled to recover all costs and expenses, including reasonable attorneys’ fees, incurred by such party in connection with such action.

9.10 Governing Law. This Agreement shall be construed and governed by the laws of the State of California. The Parties agree that the exclusive venue for any action or proceeding arising from or relating to this Agreement shall be in the County of Riverside, State of California.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed as of the date first written above.

CITY OF CATHEDRAL CITY CITY OF DESERT HOTSPRINGS
By: By:

NAME: KATHLEEN DeROSA NAME: SCOTT MATAS
Mayor Mayor
ATTEST: : ATTEST:

By: By:

NAME:GARY HOWELL NAME: JERRYL SORIANO
City Clerk City Clerk
APPROVED AS TO FORM: APPROVED AS TO FORM:

By: By:

NAME: CHARLES GREEN NAME: JENNIFER MIZRAHI
City Attorney City Attorney
APPROVED AS TO CONTENT:

By:

NAME: Pat Milos
Community development Director

1756575.1
P:\APPS\WPDATA\DHSP\0007-01 ENGINEERING-General Matters\DOC\004 - Traffic Signal Maintenance Agreement Cathedral City (05.28.14).doc

EXHIBIT “A”

MAINTENANCE AGREEMENT FOR

TRAFFIC SIGNAL AND SAFETY LIGHTING INSTALLATIONS

THAT ARE JOINTLY-OWNED BY THE CITY OF DESERT HOT SPRINGS

AND THE CITY OF CATHEDRAL CITY

MAINTAINED BY THE CITY OF DESERT HOT SPRINGS
LOCATION:

PALM DRIVE & VARNER ROAD

PALM DRIVE & PAUL ROAD
OWNERSHIP:

Lead Agency: Desert Hot Springs
Secondary Agency: Cathedral City
50% City of Desert Hot Springs,
25% City of Cathedral City, and
(25% County of Riverside
which is included in cost sharing with
the City of Desert Hot Springs by
separate agreement)
Lead Agency: Cathedral City
Secondary Agency: Desert Hot Springs
50% City of Desert Hot Springs and
50% City of Cathedral City

SR-23-200
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: September 5, 2023
Department: Fire
Prepared by: Mike Beverlin, Division Chief
Subject: Resolution Regarding Compliance With the Annual Fire Inspections of Certain Occupancies Pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code
RECOMMENDATION:

Adopt a Resolution of the City Council of the City of Desert Hot Springs,California, acknowledging receipt of a report made by the Fire Chief of the Riverside County Fire Department regarding compliance with the annual inspection of certain occupancies pursuant to Sections 13146.2 and 13146.3 of the California Health and Safety Code.

BACKGROUND:

In 2018, California Health and Safety Code Section 13146.4 was added and became effective January 1, 2019. Section 13146.4 requires all fire departments, that provide fire protection services, to report annually to their administering authority on their compliance with Health and Safety Code Sections 13146.2 and 13146.3.

Sections 13146.2 and 13146.3 require annual inspections of every building used as a public or private school, hotel, motel, lodging house, apartment house and certain residential care facilities for compliance with building standards.

FISCAL IMPACT:

There is no fiscal impact as a result of this action.

ATTACHMENTS:
1) California Health and Safety Code Sections 13146.2 - 13146.4 2) Resolution
3) DHS State Mandated Inspection List 2022 to 2023 (Parcel)

8/30/23, 5:01 PM HSC 13146.2 to 12346.4
https://cityofdhs.civicweb.net/document/13575/HSC 13146.2 to 12346.4.docx?handle=0CF635DECCB241BAB5CCB864E76279ED 1/2

HEALTH AND SAFETY CODE - HSC
DIVISION 12. FIRES AND FIRE PROTECTION [13000 - 14959]
( Division 12 enacted by Stats. 1939, Ch. 60. )
PART 2. FIRE PROTECTION [13100 - 13263]
( Part 2 enacted by Stats. 1939, Ch. 60. )
CHAPTER 1. State Fire Marshal [13100 - 13159.10]
( Chapter 1 enacted by Stats. 1939, Ch. 60. )
ARTICLE 2. The State Board of Fire Services [13140 - 13147] ( Heading of Article 2 amended by Stats. 1973, Ch. 1197. ) (a) Every city, county, or city and county fire department or district providing fire protection services required by Sections 13145 and 13146 to enforce building standards adopted by the State Fire Marshal and other regulations of the State Fire Marshal shall, annually, inspect all structures subject to subdivision (b) of Section 17921, except dwellings, for compliance with building standards and other regulations of the State Fire Marshal. (b) A city, county, or city and county fire department or district providing fire protection services that inspects a structure pursuant to subdivision (a) may charge and collect a fee for the inspection from the owner of the structure in an amount, as determined by the city, county, or city and county fire department or district providing fire protection services, sufficient to pay the costs of that inspection.
(c) A city, county, or city and county fire department or district providing fire protection services that provides related fire and life safety activities for structures subject to subdivision (b) of Section 17921, such as plan review, construction consulting, fire watch, and investigation, may charge and collect a fee from the owner of the structure in an amount, as determined by the city, county, city and county, or district, sufficient to pay the costs of those related fire and life safety activities.
(d) The State Fire Marshal, or the State Fire Marshal’s authorized representative, who inspects a structure subject to subdivision (b) of Section 17921, except dwellings, for compliance with building standards and other regulations of the State Fire Marshal, may charge and collect a fee for the inspection from the owner of the structure. The State Fire Marshal may also charge and collect a fee from the owner of the structure for related fire and life safety activities, such as plan review, construction consulting, fire watch, and investigation. Any fee collected pursuant to this subdivision shall be in an amount, as determined by the State Fire Marshal, sufficient to pay the costs of that inspection or those related fire and life safety activities. (Amended by Stats. 2019, Ch. 31, Sec. 9. (SB 85) Ef ective June 27, 2019.) (a) A city, county, or city and county fire department or district providing fire protection services shall inspect every building used as a public or private 13146.2.
13146.3.

8/30/23, 5:01 PM HSC 13146.2 to 12346.4
https://cityofdhs.civicweb.net/document/13575/HSC 13146.2 to 12346.4.docx?handle=0CF635DECCB241BAB5CCB864E76279ED 2/2 school within its jurisdiction, for the purpose of enforcing regulations promulgated pursuant to Section 13143, not less than once each year. The State Fire Marshal and the State Fire Marshal’s authorized representatives shall make these inspections not less than once each year in areas outside of corporate cities and districts providing fire protection services. (b) A city, county, or city and county fire department or district that, or the State Fire Marshal or the State Fire Marshal’s authorized representative who, inspects a structure pursuant to subdivision (a) may charge and collect a fee for the inspection in an amount sufficient to pay the costs of that inspection. (Amended by Stats. 2019, Ch. 31, Sec. 10. (SB 85) Ef ective June 27, 2019.) (a) Every city or county fire department, city and county fire department, or district required to perform an annual inspection pursuant to Sections 13146.2 and 13146.3 shall report annually to its administering authority on its compliance with Sections 13146.2 and 13146.3.
(b) The report made pursuant to subdivision (a) shall occur when the administering authority discusses its annual budget, or at another time determined by the administering authority.
(c) The administering authority shall acknowledge receipt of the report made pursuant to subdivision (a) in a resolution or a similar formal document. (d) For purposes of this section, “administering authority” means a city council, county board of supervisors, or district board, as the case may be. (Added by Stats. 2018, Ch. 854, Sec. 1. (SB 1205) Ef ective January 1, 2019.) 13146.4.

RESOLUTION NO. 2023-_______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DESERT

HOT SPRINGS, CALIFORNIA, ACKNOWLEDGING RECEIPT OF A

REPORT MADE BY THE FIRE CHIEF OF THE RIVERSIDE COUNTY

FIRE DEPARTMENT REGARDING COMPLIANCE WITH THE ANNUAL

INSPECTION OF CERTAIN OCCUPANCIES PURSUANT TO
SECTIONS 13146.2 AND 13146.3 OF THE CALIFORNIA HEALTH AND

SAFETY CODE
WHEREAS, California Health & Safety Code Section 13146.4 was added in 2018, and became effective on January 1, 2019; and
WHEREAS, California Health & Safety Code Section 13146.4 requires all fire departments, including the Riverside County Fire Department, that provide fire protection services to report annually to its administering authority on its compliance with Health & Safety Code sections 13146.2 and 13146.3; and WHEREAS, California Health & Safety Code Section 13146.2 and 13146.3 requires all fire departments, including the Riverside County Fire Department, that provide fire protection services to perform annual inspections in every building used as a public or private school, hotel, motel, lodging house, apartment house, and certain residential care facilities for compliance with building standards, as provided; and WHEREAS, the Council of the City of Desert Hot Springs intends this Resolution to fulfill the requirements of the California Health & Safety Code 13146.4 regarding acknowledgment of the Riverside County Fire Department’s compliance with California Health and Safety Code Sections 13146.2 and 13146.3.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Desert Hot Springs, California: expressly acknowledges the measure of compliance of the Riverside County Fire Department with Health and Safety Code sections 13146.2 and 13146.3 in the City of Desert Hot Springs for the time period of July 1, 2022, to June 30, 2023, as follows:

Section 1. RECITALS
That the recitals set forth above are true and correct.

Section 2. EDUCATIONAL GROUP E OCCUPANCIES
For the purposes of this Resolution, are generally those public and private schools, used by more than six persons at any one time for educational purposes through the 12th grade. The Riverside County Fire Department completed 100% of the annual inspections of the identified Group E occupancies, buildings, structures and/or facilities in the City of Desert Hot Springs.

Section 3. RESIDENTIAL GROUP R OCCUPANCIES
For the purposes of this Resolution, are generally those occupancies containing sleeping units, and include hotels, motels, apartments (three units or more), etc. as well as other residential occupancies (including a number of residential care facilities).

These residential care facilities have a number of different sub-classifications, and they may contain residents or clients that have a range of needs, including those related to custodial care, mobility impairments, cognitive disabilities, etc. The residents may also be non-ambulatory or bedridden. The Riverside County Fire Department completed 100% of the annual inspections of the identified Group R occupancies, buildings, structures and/or facilities in the City of Desert Hot Springs.

Section 4. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Resolution as hereby adopted shall remain in full force and effect.

Section 5. EFFECTIVE DATE
That this Resolution shall take effect upon its adoption.

Section 6. CERTIFICATION
That the City Clerk shall certify as to the adoption of this Resolution and shall cause the same to be processed in the manner required by law.

PASSED AND ADOPTED by the City Council of the City of Desert Hot Springs, California, at a regular meeting held on the 5th day of July 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

ATTEST: APPROVED:
________________________________ ______________________________ Jerryl Soriano, City Clerk Scott Matas, Mayor
APPROVED AS TO FORM:
_______________________________
Jennifer Mizrahi, City Attorney

DBA / Facility Name NUMERICS STREET NAME SFM

MANDATED
2019 CFC Occ.

Class.

PARCEL
NUMBER
EDWARD L WENZLAFF HEAD START 11625 WEST DR Y E ‐ DAY CARE 664190015 BUBBLING WELLS HEAD START 67501 CAMINO CAMPANERO Y E‐ DAY CARE 656160022 CABOT YERXA HEAD START 67067 DESERT VIEW RD Y E‐ DAY CARE 642070001 JULIUS COSINI HEAD START 68750 HACIENDA DR Y E‐ DAY CARE 644210010 ARROYO DE PAZ ‐ PSUSD DAY CARE 66765 TWO BUNCH PALMS TR Y E‐ DAY CARE 656040053 STORYLAND PRESHOOL ‐ SCHOOL AGE DAY CARE 11480 WEST DR Y E‐ PRESCHOOL 639192049 TWO BUNCH PALMS PRESCHOOL 14250 WEST DR Y E‐ PRESCHOOL 656020043 BELLA VISTA ELEMENTARY SCHOOL 68111 AVENIDA JALISCO Y E‐ PUBLIC 661240043 BUBLLING WELLS ELEMENTARY 67501 CAMINO CAMPENERO Y E‐ PUBLIC 656160022 CABOT YERXA ELEMENTARY 67067 DESERT VIEW RD Y E‐ PUBLIC 642070001 JULIUS CORSINI ELEMENTARY 68750 HACIENDA DR Y E‐ PUBLIC 644210010 DESERT HOT SPRINGS HIGH SCHOOL 65850 PIERSON BLVD Y E‐ PUBLIC 664190040 PAINTED HILLS MIDDLE SCHOOL 9250 SONORA DR Y E‐ PUBLIC 661240045 DESERT SPRINGS MIDDLE SCHOOL 66755 TWO BUNCH PALMS TR Y E‐ PUBLIC 656040038 EDWARD L WENZLAFF ELEMENTARY 11625 WEST DR Y E‐ PUBLIC 664190015 TWO BUNCH PALMS ELEMENTARY 14250 WEST DR Y E‐ PUBLIC 656020043 DESERT HOT SPRINGS ‐ POLICE JAIL 65950 PIERSON BLVD Y I‐3 664190021 EL MOROCCO INN & SPA 66810 4TH ST Y R‐1 639302010
SAHARA MOTEL 66700 5TH ST Y R‐1 639272015
LIVING LONGER MEDICAL RESORT 68247 CALLE AZTECA Y R‐1 644171015 HOPE SPRINGS RESORT 68075 CLUB CIRCLE DR Y R‐1 644072003 DHS Mandated Annual Inspection ‐ Fiscal Year 2019/2020

TUSCAN SPRINGS 68187 CLUB CIRCLE DR Y R‐1 644072019
BROADVIEW LODGE 12672 ELISEO RD Y R‐1 642112002
SAGEWATER SPA 12689 ELISEO RD Y R‐1 642111021
THE GOOD HOUSE 12885 ELISEO RD Y R‐1
642121023
642121014
SANDPIPER INN & SPA 12800 FOXDALE DR Y R‐1 642082001
DESERT PALMS SPA & HOTEL 67485 HACIENDA AVE Y R‐1 642164007 AZURE PALM HOT SPRINGS 67589 HACIENDA AVE Y R‐1 642182017 PARADISE HOT SPRINGS SPA 67789 HACIENDA AVE Y R‐1 642185018 DESERT HOT SPRINGS INN 67840 HACIENDA AVE Y R‐1 642142012 THE O SPA 11740 MESQUITE AVE Y R‐1 639322017
KISMET LODGE 13340 MOUNTAIN VIEW RD Y R‐1 644151004
MIRACLE SPRINGS RESORT & SPA 10625 PALM DR Y R‐1 639083037 DESERT HOT SPRINGS SPA HOTEL 10805 PALM DR Y R‐1
639093054
639093053
HYUNDAE RESORT & SPA 11000 PALM DR Y R‐1 639261016
VISTA VENTANA SPA & RESORT 11220 PALM DR Y R‐1 639261004 EUROPA HOTEL 13475 PALM DR Y R‐1 641214019
AQUA SOLEIL HOTEL & SPA 14500 PALM DR Y R‐1 656050011
THE SPRING RESORT & SPA 12699 REPOSO WAY Y R‐1 642122002 SEA MOUNTAIN RESORT 66540 SAN MARCUS RD Y R‐1
639101021
639101022
639101020
NURTURING NEST SPA & RETREAT 11149 SUNSET AVE Y R‐1 639262013 LIDO PALMS 12801 TAMAR DR Y R‐1 642082008
TWO BUNCH PALMS RESORT & SPA 67425 TWO BUNCH PALMS TR Y R‐1 656130014
642170035
656130017
MULTIPLEX 66565 12TH ST Y R‐2 639141012

MULTIPLEX 66735 12TH ST Y R‐2 639164021
MULTIPLEX 66725 12TH ST YR‐2 639145009
CASA DEL SOL 66600 2ND ST Y R‐2 639281013
VILLA FONTANA 66362 7TH ST Y R‐2 639201035
ADOBE INN & SPA 66365 7TH ST Y R‐2 639202050
MULTIPLEX 66785 8TH ST Y R‐2 639301028
WILLOWCREST APARTMENTS 65568 ACOMA AVE Y R‐2
663408010
663408011
663408012
MULTIPLEX 13501 CALIENTE DR Y R‐2 641253001
MULTIPLEX 13525 CALIENTE DR Y R‐2 641253002
MULTIPLEX 13548 CALIENTE DR Y R‐2 641251011
MULTIPLEX 13255 EL CAJON DR Y R‐2 641201022
MULTIPLEX 13280 EL CAJON DR Y R‐2 641212001
MULTIPLEX 13405 EL CAJON DR Y R‐2 641211013
MULTIPLEX 13576 EL CAJON DR Y R‐2 641241039
MULTIPLEX 13600 EL CAJON DR Y R‐2 641241038
MULTIPLEX 13971 EL CAJON DR Y R‐2 641242020
HACIENDA HILLS APARTMENTS 67150 HACIENDA DR Y R‐2 642081008 HACIENDA COURTYARD 67200 HACIENDA DR Y R‐2 642082005
MULTIPLEX 66300 IRONWOOD DR Y R‐2 641211010
COUNTRY HILLS APARTMENTS 66900 IRONWOOD DR Y R‐2 641281012 VERBENA CROSSING APTS 66950 IRONWOOD DR Y R‐2 641281019 MULTIPLEX 13642 LA MESA DR Y R‐2 641253037
MULTIPLEX 13774 LA MESA DR Y R‐2 641253031

WALDOFF APT 11190 MESQUITE AVE Y R‐2 639301027
MULTIPLEX 13797 LA MESA DR Y R‐2 641241030
MULTIPLEX 13285 MESQUITE AVE Y R‐2 641272013
MULTIPLEX 13477 MESQUITE AVE Y R‐2 641272008
MULTIPLEX 12550 MIRACLE HILL RD Y R‐2 642111023
MULTIPLEX 13098 OCOTILLO RD Y R‐2 641262005
WHITE SANDS APARTMENTS 13100 OCOTILLO RD Y R‐2 641262004 WHITE SANDS APARTMENTS 13135 OCOTILLO RD Y R‐2 641261003 WHITE SANDS APARTMENTS 13199 OCOTILLO RD Y R‐2 641261005 WHITE SANDS APARTMENTS 13220 OCOTILLO RD Y R‐2 641262002 WHITE SANDS APARTMENTS 13230 OCOTILLO RD Y R‐2 641262001 WHITE SANDS APARTMENTS 13255 OCOTILLO RD Y R‐2 641271014 WHITE SANDS APARTMENTS 13256 OCOTILLO RD Y R‐2 641272001 WHITE SANDS APARTMENTS 13283 OCOTILLO RD Y R‐2 641271013 WHITE SANDS APARTMENTS 13286 OCOTILLO RD Y R‐2 641272002 WHITE SANDS APARTMENTS 13315 OCOTILLO RD Y R‐2 641271012 WHITE SANDS APARTMENTS 13375 OCOTILLO RD Y R‐2 641271011 MULTIPLEX 13405 OCOTILLO RD Y R‐2 641271010
TURQUOIS APTS 11330 PALM DR YR‐2 639271021
MULTIPLEX 12625 PARMA DR ‐ B1 Y R‐2 642092016
MULTIPLEX 12625 PARMA DR ‐ B2 Y R‐2 642092018
MULTIPLEX 12625 PARMA DR ‐ B3 Y R‐2 642092024
MULTIPLEX 12625 PARMA DR ‐ B4 Y R‐2 642092025

MULTIPLEX 12700 PARMA DR Y R‐2 642093004
SANDY PALMS APARTMENTS 66800 PIERSON BLVD Y R‐2
639323021
639323022
MULTIPLEX 10592 SUNSET AVE Y R‐2 639145019
MULTIPLEX 11021 SUNSET AVE Y R‐2 639262016
MULTIPLEX 12800 TAMAR DR Y R‐2 642101013
ARROYO DE PAZ 66765 TWO BUNCH PALMS TR Y R‐2
656040058
656040059
DESERT HORIZON APARTMENTS 66789 TWO BUNCH PALMS TR Y R‐2 656040026 ESTANCIA 13355 VERBENA DR Y R‐2 641281020
MULTIPLEX 13255 MESQUITE AVE Y R‐2 641272014
DHS CONGREGATE HOME 66753 HACIENDA AVE Y R‐2.1 641262010 ANGEL VIEW ADULT DAY CARE 12379 MIRACLE HILL RD Y R‐2.1 642050006 DESERT COVE SENIOR CARE 13660 MOUNTAIN VIEW RD Y R‐2.1 644193001 THE RANCH RECOVERY CENTER ‐ MEN'S SERVICES ‐
REHAB
7785 ANNANDALE AVE Y R‐4 671230003
BELLA MONTE ‐ REHAB 68111 CALLE LAS TIENDAS Y R‐4 644142001 HACIENDA VALDEZ ‐ WOMEN'S SERVICES ‐ REHAB 12890 QUINTA WAY Y R‐4 642144008 HARMONY HOUSE ‐ REHAB 12893 MOUNTAIN VIEW RD Y R‐4 642144025 MESA VISTA ‐ REHAB 66610 12TH ST YR‐4 639113021

SR-23-195
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: September 5, 2023
Department: City Clerk
Prepared by: Jerryl Soriano, City Clerk
Subject: Designation of Voting Delegate and Alternate(s) for the 2023 Cal Cities Annual Conference in Sacramento, California
RECOMMENDATION:

Appoint one (1) voting delegate and up to two (2) alternates for the 2023 Cal Cities Annual Conference in Sacramento, California.

DISCUSSION:

The Cal Cities Annual Conference will be held on September 20-22, 2023, in Sacramento, California.

An important part of the Annual Conference is the Annual Business Meeting which will take place on Friday, September 22, 2023 during the General Assembly. At this meeting, the League membership considers and takes action on resolutions that establish League Policy.

In order to vote at the Annual Business Meeting, the City Council must designate a voting delegate.

The City Council may also appoint up to two (2) alternate voting delegates.

FISCAL IMPACT:

There is no fiscal impact.

SR-23-201
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: September 5, 2023
Department: City Clerk
Prepared by: Jerryl Soriano, City Clerk
Subject: City Council Special Meeting Minutes: August 9, 2023 City Council Emergency Meeting Minutes: August 22, 2023 RECOMMENDATION:

Approve the Minutes as presented; or as corrected.

ATTACHMENTS:

Draft City Council Special Meeting Minutes - August 9, 2023 Draft City Council Emergency Meeting Minutes - August 22, 2023

City of Desert Hot Springs

DRAFT ACTION MINUTES
City Council Special Meeting
6:00 PM - Wednesday, August 9, 2023
Council Chambers
CLOSED SESSION - 5:30 P.M.

CALL TO ORDER
Mayor Matas called the Closed Session to order at 5:30 P.M.

ROLL CALL

Present:

Council Members: Gary Gardner, Jan Pye
Mayor Pro Tem: Roger Nuñez
Mayor: Scott Matas

Absent:

Council Member: Russell Betts

PUBLIC COMMENTS
None.

CLOSED SESSION:

1. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9: One Potential Case
REGULAR SESSION - 6:00 P.M.

CALL TO ORDER
Mayor Matas called the Regular Session to order at 6:03 P.M.

ROLL CALL

Present:

Council Members: Gary Gardner, Jan Pye
Mayor Pro Tem: Roger Nuñez
Mayor: Scott Matas

City Council
August 9, 2023

Absent:

Council Member: Russell Betts

PLEDGE OF ALLEGIANCE
Councilmember Gardner led the Pledge of Allegiance.

CITY ATTORNEY REPORT ON CLOSED SESSION
Jennifer Mizrahi, City Attorney, advised that there was no reportable action.

PUBLIC COMMENTS
None.

PUBLIC HEARINGS:

2. Skyborne Amendment to Development Agreement and Lien Contract Recommendation:
1) Staff Report
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take testimony from Applicant;
5) Take public testimony for those in favor;
6) Take public testimony from those opposed;
7) Take public testimony from those in a neutral position; 8) Opportunity for Applicant rebuttal;
9) Close the Public Hearing;
10) City Council discussion and questions to Staff; and 11) A. Read by title only AN ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF DESERT HOT SPRINGS, CALIFORNIA, APPROVING THE

FIRST AMENDMENT TO THE DEVELOPMENT AGREEMENT BY AND

BETWEEN THE CITY OF DESERT HOT SPRINGS AND SKYBORNE
VENTURES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY; and B. Approval of the First Amendment to Lien Contract
Staff Report - SR-23-187 - Pdf
Mayor Matas recused himself due to a potential conflict of interest. Mayor Pro Tem Nuñez assumed the Chair.

Sean Smith, Economic Development Director, presented the staff report and responded to questions.

Mayor Pro Tem Nuñez opened the Public Hearing.

City Council
August 9, 2023
Jeff Bowman spoke in favor.

Dot Reed spoke in favor.

William Sacriste, Lennar, spoke in favor.

Gerald Russel spoke in favor.

Sandra Garland spoke in favor.

Jennifer Johnson, Lennar Project Manager, spoke in favor.

Lloyd Purdy spoke in favor.

Jim Kozak, applicant, addressed the City Council.

Written testimonies in favor were received from: John Gerardi, Russ Martin, Courtney Moe, and Ivan Sewell; copies of which were received, distributed, and made a part of the record.

Mayor Pro Tem Nuñez closed the Public Hearing.

A discussion ensued.

ACTION: Approve Staff recommendation.

Moved by Council Member Gardner
Seconded by Council Member Pye
Carried 3-0 by the following votes:

AYES: Gardner, Pye, and Nuñez
ABSENT: Betts
RECUSE: Matas

ADJOURN
Mayor Pro Tem Nuñez adjourned the meeting at 6:41 P.M.

Jerryl Soriano, CMC, City Clerk

City of Desert Hot Springs

DRAFT ACTION MINUTES
City Council Emergency Meeting
4:00 PM - Tuesday, August 22, 2023
Council Chambers
REGULAR SESSION - 4:00 P.M.

CALL TO ORDER
Mayor Matas called the meeting to order at 4:00 P.M.

ROLL CALL

Present:

Council Members: Russell Betts, Gary Gardner, Jan Pye
Mayor Pro Tem: Roger Nuñez
Mayor: Scott Matas

PLEDGE OF ALLEGIANCE
Mayor Matas led the Pledge of Allegiance.

PUBLIC COMMENTS
None.

ADMINISTRATIVE CALENDAR:

1. Resolution Ratifying Proclamation of Local Emergency Due to Hurricane Hilary
Recommendation:

Adopt a Resolution of the City Council of the City of Desert Hot Springs, California, ratifying the Proclamation of Local Emergency by the City Manager; declaring a local emergency, and promulgating orders and regulations necessary for the protection of life and property due to Hurricane Hilary.

Staff Report - SR-23-191 - Pdf
Doria Wilms, Interim City Manager, presented the staff report and responded to questions.

A discussion ensued.

ACTION: Approve Staff recommendation revising Section 2.4 to reflect 30

City Council
August 22, 2023
days and adopt Resolution No. 2023-037.

Moved by Council Member Betts
Seconded by Council Member Gardner
Carried 5-0 by the following votes:

AYES: Betts, Gardner, Pye, Nuñez, and Matas

ADJOURN
Mayor Matas adjourned the meeting at 4:21 P.M.

Jerryl Soriano, CMC, City Clerk

SR-23-194
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: September 5, 2023
Department: City Clerk
Prepared by: Jerryl Soriano, City Clerk
Subject: Second Reading and Adoption of An Ordinance Approving the First Amendment to the Development Agreement Between the City of Desert Hot Springs and Skyborne Ventures, LLC
RECOMMENDATION:

Approve Second Reading, read by title only and adopt: "An Ordinance of the City Council of the City of Desert Hot Springs, California, approving the First Amendment to the Development Agreement By and Between the City of Desert Hot Springs and Skyborne Ventures, LLC, a California Limited Liability Company."
BACKGROUND:

The Ordinance (Exhibit 2) was introduced and approved for first reading by the City Council on August 9, 2023.

The Ordinance shall take effect thirty (30) days after its second reading.

ATTACHMENTS:
1) Staff Report from August 9, 2023
2) Ordinance
3) First Amendment Development Agreement - Skyborne

SR-23-187
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: August 9, 2023
Department: Economic Development
Prepared by: Sean Smith, Economic Development Director
Subject: Skyborne Amendment to Development Agreement and Lien Contract RECOMMENDATION:
1) Staff Report
2) Entertain questions of Staff from the City Council;
3) Open the Public Hearing;
4) Take testimony from Applicant;
5) Take public testimony for those in favor;
6) Take public testimony from those opposed;
7) Take public testimony from those in a neutral position; 8) Opportunity for Applicant rebuttal;
9) Close the Public Hearing;
10) City Council discussion and questions to Staff; and 11) A. Read by title only AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DESERT HOT

SPRINGS, CALIFORNIA, APPROVING THE FIRST AMENDMENT TO THE DEVELOPMENT

AGREEMENT BY AND BETWEEN THE CITY OF DESERT HOT SPRINGS AND SKYBORNE VENTURES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY; and B. Approval of the First Amendment to Lien Contract
BACKGROUND:

DEVELOPMENT AGREEMENT AND LIEN CONTRACT BACKGROUND
In 2004, following annexation into the City of Desert Hot Springs (“City”), the City approved the Stoneridge Specific Plan for 2,140 residential units including the following entitlements: Stoneridge Specific Plan, General Plan Amendment No. 02-04, Change of Zone No. 02-04, Development Agreement No. 01-04 and Tract Maps 32029 & 32030. An Environmental Impact Report was also prepared and was certified by the City Council on January 2nd, 1993.

On May 5, 2005, the City and First West-DHS Associates, LLC entered into Development Agreement No. 01-04 for the construction of the Stoneridge Project, this is shown in Exhibit “A”. In July 2005, Western Pacific Housing, Inc., dba for DR Horton purchased the property from First West-DHS Associates, LLC and assumed the Development Agreement with the City and renamed the project as the Skyborne project.

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In 2008, Skyborne Ventures LLC subsequently purchased the property, acquired title to the property comprising the Stoneridge Project. Skyborne Ventures LLC (“Owner”) is the successor in interest to First West and Western Pacific Housing, Inc., under the Development Agreement and Project Approvals and the developer of the Skyborne Project (“Project”).

The Skyborne Project has a Vested Tentative Tract No 32030 which is made up of 10 individual tracts referred to as Villages 1 through 10. Tract No. 32030 consists of public streets along the exterior perimeter, a storm drain system, and various main interior streets. Each Village within Tract No. 32030 consists of multiple lots for single family homes, local streets, a storm drain system, and various amenities.

The Developer secured and provided performance and payment bonds for public improvements on final tract map 32030, that were approved by Council and recorded, as required by the conditions of approval for the project.

On September 16, 2008, the City Council approved the substitution of the security instrument associated with the required public improvements for Tract Map No. 32030 from performance and payment bonds to a lien. The lien was detailed in a Lien Contract in which the lien was assigned to Villages 1 through 10 within Tract Map No. 32030. The Lien Contract is attached as Exhibit “D”.

The Owner is currently working with national home builder, Lennar, for the continued construction of the project based on approval of the First Amendment to the Development Agreement.

CONSTRUCTION BACKGROUND
In 2006, the first phase of construction of the Skyborne Project began. However, in 2008 the local housing market experienced a sudden and rapid economic downturn. During the ensuing recession, construction stalled, and home sales stopped.

On February 13, 2020, the Planning Commission approved the construction of 29 new single-family homes within Village 1 of the Project. The development included building on 27 pre-existing slabs and 2 vacant lots which completed Village 1 and all associated public improvements.

On March 9th, 2021, the Planning Commission approved the construction of 79 new single-family homes within Village 2 of the Project. These new single-family homes are currently under construction.

On April 12, 2022, the Planning Commission approved the construction of the remaining 108 new single-family homes within Village 2 of the Project. Village 2 and all associated public improvements will be complete at the end of construction of the 108 single-family homes. These new single-family homes are currently being constructed in phases.

DISCUSSION:

To date, 332 homes have been completed with 31 more currently under construction. Additionally, the Owner has continued to complete public improvements of grading, streets, and storm drains, for various phases of the Project.

Per Section 3 of the Lien Contract, the Owner is now requesting to amend the Lien Contract to reduce the lien amount to reflect the public improvements that have been completed to date, and to re-assign the lien to specific lots. The Owner is also requesting to amend the original Development Agreement to change some key components.

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Staff met with the Owner on several occasions and discussed the details of both the First Amendment to Lien Contract and the First Amendment to Development Agreement. The Owner has stated that these revisions, if approved, would allow for continued construction on Village 3 with Lennar Homes, the second largest home builder in the United States. The construction of new market rate homes is a significant component of the City’s economic development efforts. Growth in this segment is an important factor to the commercial development community when considering new projects.

First Amendment to Lien Contract
In order to process the First Amendment to the Lien Contract, Staff reviewed all documents and inspected the site and determined percentages of work completed to date. Utilizing each line item from the original performance and payment bonds, a new proposed total lien amount was calculated. The First Amendment to Lien Contract is shown in Exhibit “E”. The below is the summary table of the proposed new lien amount per line item, which is also attached as Exhibit “G”.

Agreements Lien Amount New Required
security New Lien Amount
1 Monument
Agreement for Tract
No. 32030 (Villages 3
and 10) dated March
22, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 20,000.00 100% $ 20,000.00
2 Grading Agreement
for Tract No. 32030
(Village 8) dated 2006
by and between DR
Horton and City of
Desert Hot Springs
$ 57,000.00 0% $ -
3 Grading Agreement
for Tract No. 32030
(Village 9) dated 2006
by and between DR
Horton and City of
Desert Hot Springs
$ 12,000.00 0% $ -
4 Street - Storm Drain
Agreement for Tract
No. 32030 (Villages 1,
2, 3, 4, 5, 6, 7, 8, 9, 10 -
Public Roads - Exterior
Streets) dated March
22, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 1,823,000.00 60% $ 1,093,800.00
5 Street - Storm Drain
Agreement for Tract
No. 32030 (Villages 1,
2, 3, 4, 5, 6, 7, 8, 9, 10 -
Spine Roads-Interior
Streets) dated March
22, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 1,540,000.00 80% $ 1,232,000.00

SR-23-187
Agreements Lien Amount New Required
security New Lien Amount
6 Water and Sewer
Improvements
Agreement for Tract
No. 32030 (Villages 3
and 10) dated March
22, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 2,860,946.00 100% $ 2,860,946.00
7 Street - Storm Drain
Agreement for Tract
No. 32030 (Villages 3
and 10) dated March
22, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 2,609,530.00 100% $ 2,609,530.00
8 Grading Agreement
for Tract No. 32030
(Village 5) dated July
12, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 67,000.00 0% $ -
9 Grading Agreement
for Tract No. 32030
(Village 4) dated July
12, 2006, by and
between DR Horton
and City of Desert Hot
Springs
$ 26,000.00 0% $ -
10 Bond No. 6374143 $ 20,000.00 10% $ 2,000.00
11 Bond No. 6416350 $ 491,000.00 10% $ 49,100.00
Total Public
Improvements $ 9,526,476.00 $ 7,867,376.00
Completed Public Improvements $ 1,659,100.00
New Total Public Improvements $ 7,867,376.00
Proposed 10% Inflation of cost from 2006 Estimate $ 786,737.60 Proposed First Amendment to Lien Contract Amount $ 8,654,114 The original engineer’s estimate was calculated in 2006. To account for inflation of construction costs, a 10% inflation cost was added to the total. The original lien amount was $9,526,476, the proposed new lien amount was estimated at $8,654,114. Developer is committing to making a payment of $100,000 towards the Lien Contract Payment Fee with approval of the First Amendment to the Development Agreement and Lien Contract.

Per Section 3 of the Lien Contract, the Owner is also requesting to re-assign the lien from Villages 1 through 10 to only Village 5. An appraisal report prepared by The Property Sciences Group Inc, dated June 7, 2023, confirmed the value of Village 5 to be $22,170,000. The proposed new lien amount is $8,654,114, per section 3 of the Lien Contract the “Lien-to-Value” ratio is not greater than 50%, and therefore the re-assignment to Village 5 is acceptable. Additionally, the Owner is requesting that the City Manager be provided authority to reassign exiting collateral as appropriate while maintaining the 2:1 ratio of value to lien amount.

SR-23-187
Section 5 of the Lien Contract required a 1% Security Fee be paid to the City annually by the Developer.

In 2010 when the Lien Contract was approved, the Developer offered this fee to assist the City financially. The City has recently approved two other Lien Contracts without a Security Fee. Removing this requirement would be consistent with current City practices.

First Amendment to Development Agreement
The Owner also desires to modify and amend certain provisions of the Development Agreement. The proposed First Amendment to Development Agreement is presented in exhibit “E”. The following is a summary of the proposed changes:

1. 2.3 Term
Current language:

The term of this Agreement shall commence on the Effective Date and, provided Owner has obtained a building permit and begun construction on the first 100 residential units within three (3) years from the Effective Date and is not in default hereunder, shall continue for a period of ten (10) years thereafter unless this term is modified or extended pursuant to the provisions of this Agreement. So long as Owner is found by the City Council, during the Periodic Review conducted during the tenth (10th) year of the Term of this Agreement, to be in substantial compliance with this Agreement, including the Performance Schedule as set out in Exhibit “E” and all other phasing requirements set out in the Existing Development Approvals, this Agreement shall be automatically renewed by the City Council for an additional ten (10) years upon the same terms and conditions as contained herein.

Proposed language:

The term of this Agreement is extended such that it shall expire on May 5, 2035. The City Council shall find that Owner is in substantial compliance with this Agreement, so long as Owner is not in material default of any term herein. This finding by the City Council shall take place during the Periodic Review. Further, if the City Council finds that the Owner is in substantial compliance during the Periodic Review conducted in the year this Agreement is set to expire, this Agreement shall be automatically renewed for an additional ten (10) years upon the same terms and conditions as contained herein.

2. 2.4.4 Partial Release of Purchaser, Transfer or Assignee of Industrial or Commercial Lot Current language:

A purchaser, transferee or assignee of a lot, which has been finally subdivided as provided for in the Development Plan and for which a commercial or industrial plot plan for development of the lot has been finally approved pursuant to the Development Plan, may submit a request, in writing, to ?City to release said lot from the obligations under this Agreement relating to all other portions of the property. Within thirty (30) days of such request, City shall review, and if the above conditions are satisfied shall approve the request for release and notify the purchaser, transferee, or assignee in writing thereof. No such release approved pursuant to this Subsection

2.4.4 shall cause, or otherwise affect, a release of Owner from its duties and obligations under this Agreement.

Proposed language:

This section is being recommended for removal as it is not applicable.

3. 2.7(b) Notices:

Amend to update with current names and address for Notices.

4. 3.3 Timing of Development:

SR-23-187
Current language:

The parties acknowledge that Owner cannot at this time predict when or the rate at which phases of the Property will be developed. Such decisions depend upon numerous factors that are not within the control of Owner, such as market orientation and demand, interest rates, absorption, completion, and similar factors. Since the California /supreme Court held in pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the parties’ intent to cure that deficiency by acknowledging and providing that Owner shall have the right to develop the Property in such order and at such rate and at such times as Owner deems appropriate within the exercise of its subjective business judgment, subject only to the timing and phasing requirements as shown in Exhibit “E” and as otherwise set forth in the Development Plan or the Phasing Plan set forth in Section 3.4.

Proposed language:

The parties acknowledge that Owner cannot at this time predict when or the rate at which phases of the Property will be developed. Such decisions depend upon numerous factors that are not within the control of Owner, such as market orientation and demand, interest rates, absorption, completion, and similar factors. Since the California /supreme Court held in pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the parties’ intent to cure that deficiency by acknowledging and providing that Owner shall have the right to develop the Property in such order and at such rate and at such times as Owner deems appropriate within the exercise of its subjective business judgment, subject only to the timing and phasing requirements, as shown in Exhibit "E", which timing and phasing requirements may be modified from time to time by the City Manager, in City Manager’s reasonable discretion, after request from Owner, and as otherwise set forth in the Development Plan or the Phasing Plan set forth in Section 3.4.

5. 3.4 Phasing Plan
Current language:

Development of the Property shall be subject to all timing and phasing requirements as shown in Exhibit “E” and as otherwise established by the Development Plan, including the Specific Plan.

Once it has obtained a building permit and begun construction of a phase of the Project, Owner shall diligently proceed to completion of such phase.

Proposed language:

Development of the Property shall be subject to all timing and phasing requirements as shown in Exhibit "E", which timing and phasing requirements may be modified from time to time by the City Manager, in City Manager’s reasonable discretion, after request from Owner, and as otherwise established by the Development Plan, including the Specific Plan. Once it has obtained a building permit and begun construction of a phase of the Project, Owner shall diligently proceed to completion of such phase.

6. 3.6.1 (d) Limitations, Reservations and Exceptions
Current language:

Regulations imposing Development Exactions; provided, however, no such subsequently adopted Development Exaction shall be applicable to development of the Property unless such Development Exaction is applied uniformly to development, either throughout the City or within a defined area of benefit that includes the Property. No such subsequently adopted Development Exaction shall apply if its application to the Property would physically prevent development of the Property for the uses and to the density or intensity of development set forth in the

SR-23-187
Development Plan. In the event any such subsequently adopted Development Exaction fulfills the same purposes, in whole or in part, as the fees set forth in Section 4 of this Agreement, City shall allow a credit against such subsequently adopted Development Exaction for the fees paid under Section 4 of this Agreement to the extent such fees fulfill the same purposes.

Proposed language:

This section is being recommended for removal.

7. 3.6.2 Subsequent Development Approvals
Current Language:

This Agreement shall not prevent City, in acting on Subsequent Development Approvals, from applying Subsequent Land Use Regulations that are unrelated to the permitted uses of the Property, the density and intensity of use, and the maximum height and size of proposed buildings, nor shall this Agreement prevent City from denying or conditionally approving any Subsequent Development Approval on the basis of the Existing Land Use Regulations or any Subsequent Land Use Regulation not in conflict with the use and density standards set out in the Development Plan.

Proposed language:

This Agreement shall not prevent City, in acting on Subsequent Development Approvals, from applying Subsequent Land Use regulations that are unrelated to the Development Plan, nor shall this Agreement prevent City from denying or conditionally approving any Subsequent Development Approval on the basis of Existing Land Use Regulations or any Subsequent Land Use Regulation not in conflict with the standards set out in the Development Plan.

8. 4.1.1 Pierson Boulevard Improvements
Current language:

Owner to make contribution to the City in the sum of $600.000, without any credit against impact fees or right of reimbursement whatsoever, toward the total cost of currently proposed improvements required on Pierson Boulevard east of the Project in order to meet the increased traffic demand identified in the EIR as being generated by the Project. Said contribution shall be in lieu of any other mitigation suggested or proposed in the EIR specific to the Project’s impact on Pierson’s Boulevard east of the Project. The contribution is to be made in three installments of $200,000 each as follows: Owner to pay the first installment on or before the second anniversary of the recording of this Agreement or upon the issuance of the Certificate of Occupancy for the 100th unit, whichever occurs first; the second installment of the fourth anniversary or upon the issuance of the Certificate of Occupancy for the 300th unit, whichever occurs first; the third installment on the sixth anniversary or upon the issuance of the Certificate of Occupancy for the 500th unit, whichever occurs first.

Proposed language:

Owner to make contribution to the City in the sum of $600,000, without any credit against impact fees or right of reimbursement whatsoever, toward the total cost of currently proposed improvements required on Pierson Boulevard east of the Project in order to meet the increased traffic demand identified in the EIR as being generated by the Project. Said contribution shall be in lieu of any other mitigation suggested or proposed in the EIR specific to the Project’s impact on Pierson Boulevard east of the Project. As of the date hereof, Owner has contributed $400,000 of the $600,000 to the City. Owner shall cause the final payment of $200,000 to be directed to the City from proceeds received by Owner from the remaining bond sales to fund improvements in Improvement Area 1 of CFD2006-1 (defined below).

9. 4.1.2 Fire Station
This section is being recommended for removal as the obligation to construct a fire station has been fulfilled.

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10) 4.1.3 Park Improvements
Current language:

As agreed by Owner, and in full satisfaction of the City's Quimby requirements, Owner shall provide the following park facilities at Owner's sole cost and expense, and without any further right of reimbursement whatsoever, as follows:
(a) Karen Street Park. Owner shall contribute the 5-acre site identified in the conditions of approval incorporated in the Development Plan and improve said site in the manner also described in the conditions of approval incorporated in the Development Plan or as otherwise approved by the City Manager at a total cost not to exceed $1,200,000, not including land value.

Owner shall complete construction on Karen Street Park before date that Certificate of Occupancy for the first residential is issued.
(b) Parks Within Development. Owner shall develop the park and open areas described in the Development Plan in a manner acceptable to the City. Any and all parks identified within a Village shall be completed on or before the issuance of the first Certificate of Occupancy for a residential unit in that Village. Provided all park areas are developed concurrent with the build-out of each Village, Owner shall be entitled to credit against Quimby fees equal to the improved park acreage deemed by the City to be park area. Before the first transfer of ownership to any property within the Project, Owner shall create a perpetual easement, or other form of title restriction acceptable to the City Attorney, to ensure that the park areas shall be owned, used and maintained by the Homeowner's Association as park areas in perpetuity.

Proposed language:
(a) Karen Street Park. Owner shall: (i) dedicate to City the approximately five (5) acre site identified in the conditions of approval incorporated in the Development Plan (the “Karen Park Parcel”) for use as a public park within fifteen (15) business days of the recording of this First Amendment in the Official Records; and (ii) contribute $1,200,000 (“Karen Park Payment”) to the City for construction of the improvements at the Karen Park Parcel concurrent with the sale of any lots in either Village 3 or Village 10. Owner will notify City Manager in writing upon the opening of escrow to sell the lots in either Village 3 or Village 10 to facilitate City’s delivery of an escrow demand to Owner and escrow holder for payment of the Karen Park Payment from Owner’s proceeds from the sale. Following dedication of the Karen Park Parcel and delivery of the Karen Park Payment, Developer shall have satisfied its obligations related to the Karen Park Parcel.
(b) Parks Within Development. Owner shall develop the park(s) and open areas described in the Development Plan consistent with City standards and as approved by the City Manager.

Any and all parks identified within any Village shall be completed on or before issuance of fifty percent (50%) of the certificates of occupancy for a residential unit in that Village. Provided all park areas are developed concurrent with the build-out of each Village, Owner shall be entitled to credit against Quimby fees equal to the improved park acreage deemed by the City to be park area. Owner shall ensure that the park areas shall be owned, used and maintained by the Homeowner’s Association as park areas in perpetuity.
11) 4.1.4 Financing of Public Improvements
Current language:

A Community Facilities District (CFD) or other funding mechanism, as determined by the City Council, may, within the sole discretion of the City, be formed to finance the cost of construction and/or operation and maintenance of infrastructure and public facilities which serve the Project and surrounding areas. Owner shall cooperate in the formation. If formed, all costs related to the formation and studies related thereto shall be paid by Owner, with subsequent reimbursement

SR-23-187
to Owner by District (or other entity) after it is formed. The CFD (or other entity) may finance that portion that is permitted by law.

Proposed language:
(a) Infrastructure Financing. The Owner believes that the project cannot proceed without a CFD or Alternative Financing Mechanism (“Financing District”) to reimburse the developer for public facilities costs for infrastructure to be owned by the City or other public agencies and associated developer impact fees. At Developer's request, City may at its sole discretion establish an assessment district(s), community facilities district(s) or other public financing mechanism to finance any necessary public improvements for the Project substantially consistent with the financing plan (“Financing Plan”).
(b) Improvements and Financing/Community Facilities District. Pursuant to Chapter 2.5 (commencing with section 53311) Part 1, Division 2, Title 5 of the Government Code of the State of California, commonly known as the "Mello-Roos Community Facilities Act of 1982," the Developer may, at its sole election, petition the City Council of the City or a joint powers agency in which the City is a member to establish a Community Facilities District ("CFD" or “District”), in accordance with the City's policies in existence on the Effective Date. Alternatively, or in addition thereto, the Developer may request that the City initiate and complete proceedings under the Municipal Improvement Act of 1911, the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, or any and all other available public financing mechanism, to provide public conduit financing for the construction of public infrastructure improvements on the Property ("Alternative Financing Mechanisms"). If so, requested by the Developer, the City may at its sole discretion cooperate with the Developer (or, for matters beyond its control, and may use its best efforts) in taking all steps necessary to cause the CFD or Alternative Financing Mechanisms to issue bonds for such purposes. If the Property is included within a CFD or Alternative Funding Mechanism with other surrounding properties, the special taxes or special assessments burdening the various properties so included shall be apportioned on a fair share basis related to the benefit derived by each of such properties in accordance with City policies at the time such property is included.
(c) Existing CFD. Community Facilities District No. 2006-1 (Skyborne) (“CFD2006-1”) was formed by the City in 2006. Developer has applied for, and City Council has will work in good faith in implementing the following changes to CFD2006-1: (i) issuance of a second (2nd) series of bonds to fund further improvements and fees in Improvement Area 1 of CFD2006-1; and (ii) dissolution of Improvement Area 2 of CFD2006-1 for Villages 3 and 10. (d) New CFD. City agrees that following Developer’s application, petition or other request in writing for the dissolution and/or establishment of a CFD for any or all of Villages 3, 4, 5, 6, 7, 8, 9 or 10 (each, a “Subsequent CFD”), together with deposit of sufficient funds to pay the City’s costs to undertake the proceedings to establish any Subsequent CFD, City shall expeditiously conduct such proceedings to establish the Subsequent CFD in accordance with the Mello-Roos Act and City’s policies in existence as of the Effective Date and Developer shall cooperate in the conduct of such proceedings. Each Subsequent CFD shall, at a minimum, be subject to the following requirements:
(i) Tax Rate. City agrees that the maximum effective tax rate for each Subsequent CFD shall not exceed two percent (2%) based upon the product and pricing provided by the Developer.

In addition, the effective tax rate calculation for each CFD or Alternative Financing Mechanisms shall not include trash collection and sewer service assessment charges that are levied on the annual property tax bill.

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(ii) Joint Facilities. City agrees that any Subsequent CFD may finance, in addition to City fees, infrastructure, and public facilities, those fees, infrastructure, and public facilities of other governmental agencies required in connection with the Development Plan, the Development of the Property and any Subsequent Development Approvals, including, without limitation, Palm Springs Unified School District, Mission Springs Water District, and the County of Riverside.
(iii) Improvement Areas. City agrees that Developer, working with the City’s Special Tax Consultant and Formation Counsel, will advise the City on the structure of proposed improvement areas’ which would be designated and included with each Subsequent CFD. 12) 4.2.1 Amount and Component Fees
Current language:

The Owner shall pay all existing or future adopted service, permit, impact and other applicable fees required by the City of Desert Hot Springs as same shall exist at the time that a building permit is applied for. There is no entitlement to fees existing at time of this Agreement.

Proposed language:

The Owner shall pay the service, permit, impact and other applicable fees required by the City for the Existing Development Approvals and any Subsequent Development Approvals as provided in Exhibit “F”.
13) 4.2.4 Art in Public Places– proposed new section
Proposed language:

Owner has donated approved public art in conjunction with the Project’s entry monumentation, which public art has been accepted by the City Council, entitling Owner to fee credits in the amount of the actual cost of the public art. Documentation of actual costs are required, and its adequacy shall be determined by the City Manager prior to allocating the fee credit. The amount of fee credits provided to the Owner shall be limited to the actual costs of the public art and in the event the actual costs total an amount less than the Art In Public Places Program contribution amount required by Municipal Code section 17.60.050, Owner shall also pay into the City’s Art in Public Places Fund an amount equal to the difference between the Art in Public Places contribution amount required by Municipal Code section 17.60.050 and the actual costs of the public art.
14) 6.1 Periodic Review
Current language:

The Planning Manager shall review this Agreement annually, on or before the anniversary of the Effective Date, in order to ascertain the good faith compliance by Owner with the terms of the Agreement Owner shall submit an Annual Monitoring Report, in a form acceptable to the Planning Manager, within 30 days after written notice from the Planning Manager. The Annual Monitoring Report shall be accompanied by an annual review and administration fee sufficient to defray the estimated costs of review and administration of the Agreement during the succeeding year. The amount of the annual review and administration fee shall be set annually by resolution of the City Council.

Proposed language:

SR-23-187
Replace “Planning Manager” with “City Council”
15) 6.2 Special Review
Current language:

The City Council may order a special review of compliance with this Agreement at any time. The Planning Manager shall conduct such special reviews.

Proposed language:

Replace “Planning Manager” with “City Manager”.
16) 6.3. Procedure
Current language:
(b) Upon completion of a periodic review or a special review, the Planning Manager shall submit a report to the City Council setting forth the evidence concerning good faith compliance by Owner with the terms of this Agreement and his or her recommended finding on that issue.

Proposed language:
(b) Upon completion of a periodic review or a special review, the City Manager shall submit a report to the City Council.
17) 11.18 Full Force and Effect – proposed new section
Except as expressly provided in this First Amendment, all of the terms and provisions of the Development Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the parties hereto. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Development Agreement or as a waiver of or consent to any further or future action on the part of either party that would require the waiver or consent of the other party. On and after the date hereof, each reference in the Development Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein” or words of like import, and each reference to the Agreement in any other agreements, documents or instruments executed and delivered pursuant to, or in connection with, the Agreement, will mean and be a reference to the Development Agreement as amended by this First Amendment.

FISCAL IMPACT:

Approval of the proposed revisions and subsequent continued development of the Skyborne project will have the following financial impacts to the city:
• The third and final installment payment of $200,000.00 required for the improvement of Pierson Boulevard and associated mitigation measures will be made upon receipt of funds from the Lennar CFD Bond funding proceeds on the 29 lots that skyborne Ventures LLC owned in Village 1

SR-23-187
• Approximately $2,315,283 in new annual taxes (property, police & fire, and property tax in lieu of vehicle license fee) will be collected at buildout
• Approximately $23,800,000 in total one-time Development Impact Fees will be collected by buildout
• The estimated annual payment of $95,264.76, which is the 1% security fee for the Lien Contract, will be removed
ATTACHMENTS:

Exhibit A - Development Agreement 01-04 Stoneridge aka Skybourne Exhibit B- First Amendment Development Agreement (Final) Exhibit C - First Amendment Development Agreement (Redlined) Exhibit D - Recorded Lien Contract and Subordination Agreement Exhibit E- First Amendment Lien Contract (Final)
Exhibit F - First Amendment Lien Contract (Redlined)
Exhibit G - Total Estimates for First Amendment Lien Contract Exhibit H - Ordinance - First Amendment Development Agreement Skyborne

ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DESERT

HOT SPRINGS, CALIFORNIA, APPROVING THE FIRST AMENDMENT

DEVELOPMENT AGREEMENT BY AND BETWEENTHE CITY OF

DESERT HOT SPRINGS AND SKYBORNE VENTURES, LLC
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Section 65864 et seq. of the California Government Code (the “Development Agreement Statute”); and WHEREAS, the Development Agreement Statute authorizes the City to enter into a property development agreement with any person having legal or equitable interest in real property for the development of such property in order to establish certain development rights; and
WHEREAS, the development agreement and associated entitlements are subject to CEQA and CEQA review was completed; and
WHEREAS, the City of Desert Hot Springs City Council conducted a properly noticed public hearing to consider the First Amendment to Development Agreement (as defined below), at which testimony and evidence, both written and oral, were presented to and considered by the City Council; and
WHEREAS, the City Council shall approve a development agreement by ordinance.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF DESERT HOT SPRINGS DOES ORDAIN FOLLOWS:

Section 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.

Section 2. APPROVAL OF FIRST AMENDMENT TO DEVELOPMENT

AGREEMENT
That the City Council hereby approves the First Amendment to Development Agreement By and Between the City of Desert Hot Springs and SKYBORNE VENTURES, LLC (“First Amendment to Development Agreement”), a copy of which is attached hereto and incorporated herein by this reference as Exhibit “A,” subject to the terms and conditions stated therein.

Section 3. SEVERABILITY
That the City Council declares that, should any provision, section, paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final court

action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Ordinance as hereby adopted shall remain in full force and effect.

Section 4. EFFECTIVE DATE OF ORDINANCE
That this Ordinance shall take effect thirty (30) days after its second reading by the City Council.

Section 5. EFFECTIVE DATE OF FIRST AMENDMENT TO

DEVELOPMENT AGREEMENT
The First Amendment to Development Agreement shall not be executed by the City until on or after the effective date of the Ordinance.

Section 6. RECORDATION OF FIRST AMENDMENT TO

DEVELOPMENT AGREEMENT
That the City Clerk is hereby directed to record the fully executed First Amendment to Development Agreement with the Riverside County Recorder no later than ten (10) days after its execution.

Section 7. CERTIFICATION
That the City Clerk shall certify to the passage of this Ordinance and shall cause the same to be published according to law.

PASSED AND ADOPTED by the City Council of the City of Desert Hot Springs at a regular meeting held on the 5th day of September, 2023, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

ATTEST: APPROVED:
_______________________________ ________________________________ Jerryl Soriano, City Clerk Scott Matas, Mayor
APPROVED AS TO FORM:
_______________________________
Jennifer Mizrahi, City Attorney

EXHIBIT “A”

FIRST AMENDMENT TO DEVELOPMENT AGREEMENT

BY AND BETWEEN

THE CITY OF DESERT HOT SPRINGS

AND SKYBORNE VENTURES, LLC

SEE ATTACHED

RECORDING REQUESTEDBY AND
WHEN RECORDED MAIL TO:

City of Desert Hot Springs
Attn: City Clerk
11999 Palm Drive
Desert Hot Springs, CA 92240
(SPACE ABOVE FOR RECORDER’S USE)
[EXEMPTFROM RECORDING FEES PURSUANT TO GOVERNMENTCODE SECTION 6103 AND27383] FIRST AMENDMENT TO DEVELOPMENT AGREEMENT NO. 01-04

THIS FIRST AMENDMENT TO DEVELOPMENT AGREEMENT
9 NO. 01-04 (the “First
Amendment”)is made and entered into as of this __ day of August, 2023, by and between theCity To ‘ ’ O‘ of DesertHot Springs, a California municipal corporation (the “City”), andiSkyborne Ventures, a Californialimitedliability company (the “Developer”) with respect to the followingfacts:

RECITALS
so _ A; ; ,_,Cityand-Firs1_;West-DHSAssociates,LLC, a California limited liability company, as :;:.;;_i;;; g?predecessor,,in,..interest Ito”We’SferniP-aci?c,,.Housing, Inc., a Delaware corporation (“WPH”), entered " _into"thatcertain‘development"agreement,recorded as Document No. 2005-0355117 in the Official - Records of Riverside County, ‘State-ofCalifornia on or about May 5, 2005(the “Development Agreement”);
H 2
so
A
,,
9 B.; On or about September 15, 2008, City, pursuant to Section 3.5 of the Development » , "Agreement, approvedfaSubsequent DevelopmentApproval as to Section 4.1.3 related to the Karen Street Park (the “Subsequent Park Approval”);
*2 — » _ City, approvedFandapursuant to that approval, WPH assigned the Development A “Agreement toiSkyborneVentures, LLC,recorded September 19,2008 as Document No. 2008-0514881 ' in-theOf?c-ial—Records of Riverside County, State of California (the “Official Records”); T 7 , CD.", Pursuant to the .Development Approvals, WPH obtained a building permit and V
A A : constructedxno:lessthan 100 residentialunits at the Property within three (3) years of May 5, 2005, extending-theTerm of theDevelopmentAgreement, suchthatthe Term of the Agreement was to expire May 5, 2015;
T
O
E. __Pursuant to Sections 6.1 and 6.6 of the DevelopmentAgreement,heCity conducteda O A - PeriodicReview of the Development-Agreementon March 3, 2015 and certifiedthattheDevelopment Agreement remained then in effect and Developer was not in default of the Development Agreement ’ by recording a Certi?cate ofCompliance as Document No. 2015-0291464 in theOfficialRecords on or about July 7, 2015 and extended the Development Agreement for an additional ten (10) years, through May 5, 2025; and
F. In accordancewith Section 2.5 of the DevelopmentAgreement-and Government Code section 65868, City and Developer now desire to amend the DevelopmentAgreement subjectto, and on the terms and conditionsset forth in this First Amendment. I All capitalizedterms not otherwise defined herein shall have the meaning(s) set forth in the DevelopmentAgreement. In considerationof the mutual covenants and agreements containedherein

and other good and valuable consideration,the receipt and legal sufficiency of which is hereby acknowledged,City and Developeragree as follows:

1. Amendments.
(a) Section 1.2 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 1.2 is hereby substitutedin its place:
“Exhibits. The following exhibits are hereby replaced and revised exhibits are attachedto, and by this referenceare made a part of the Agreement:

Exhibit "A" - Legal Descriptionof the Property.

Exhibit “B" — Map showingProperty and its location.

Exhibit "C" - ExistingDevelopmentApprovals.

Exhibit "D” — ExistingLand Use Regulations.

Exhibit "E" - Performance Schedule.

Exhibit “F”
— Fee Schedule.”
following Section 2.3 is hereby substitutedin its place:
':?"7I‘:'=:(b)‘::’:;:’S.6CtlOl’l —2—.3*of—the:Development Agrement is hereby deleted in itsentirety and the———i?l- ‘ ' T‘?i..The term of this Agreement is extended such that it shall expire . -_ . I .0if on Maye5, 2035. The City Council shall find that the Owner is in substantial compliancewith this Agreement so long as the Owner is not in material default of any term herein. Thisfinding by the City Council as shall takeplace duringthe PeriodicReview. Further,ifthe City Council findsthat the Owner is in substantial complianceduring the Periodic , Review conducted in the year this Agreement is set to expire, this -«Agreement shall be automaticallyrenewed for an additionalten (10) years upon the same terms and conditionsas containedherein.” 9 (b)
‘(c) " Pursuant to Section27(0) of the DevelopmentAgreement, the notice addressesfor the parties are modi?ed as follows:

F Section 2.4.4 of the DevelopmentAgreement is hereby deleted in its entirety.

If to City:

CityManager
City of Desert Hot Springs
11999 Palm Drive
Desert Hot Springs, CA 92240
If to Owner.

SkyborneVentures, LLC
505 Lomas Santa Fe Drive, Suite 230
SolanaBeach, CA 92075
Attn: GregoryP. Lansing

With a Copy to:

Lansing Industries,Inc.
505 Lomas Santa Fe Drive, Suite 230
SolanaBeach, CA 92075
Attn: Paul W. Pitingaro,Esq
(d) Section 3.3 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 3.3 is herebysubstitutedin its place:
“Timing of Development.The parties acknowledgethat Owner cannot at this time predict when or the rate at which phases of the Property will be developed.Such decisionsdependupon numerous factors that are not within the control of Owner, such as market orientation and demand, interestrates, absorption,completionand other similarfactors. Sincethe _ CaliforniaSupreme Court held in Pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, that the failure of the partiestherein to provide for the timing of development resulted in a later adopted 4 initiative restricting the timing of developmentto prevail over such ’ parties’ agreement, it is the parties‘ intent to cure that de?ciency by * :5acknowledging and providing that Owner shallhave the right to develop . the‘Propertyin such order and at such rateandat such times as OwnerT ~ deems appropriate within the exerciseof its subjectivebusiness = judgment, subject only to the timing and phasing requirementsas shown inExhibit’"E",which timing and phasing requirementsmay be modi?ed ' from time to time by the City Manager, in City Manager’s reasonable ;:discretion, after request from Owner, and as otherwise set forth in the DevelopmentPlan or the Phasing Plan set forth in Section 3.4.” — r (e)., Section 3.3 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 3.3 is hereby substitutedin its place: 3 7 '
“PhasingPlan.Developmentof the Property shall be subjectto alltiming and phasing requirementsas shown in Exhibit "E"",which timing and phasing requirements may be modified from time to time by the City — ..__ __ . . Manager, in, City Manager’s reasonable discretion,after request from Owner, and as otherwise established by the Development Plan, includingthe Specific Plan. Once it has obtaineda building permit and ’ ,. begun construction of a phase of the Project, Owner shall diligently proceed to completionof such phase.”
(f) Section 3.6.1 ((1)of the DevelopmentAgreement is hereby deletedin its entirety. (g) Section 3.6.2 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 3.6.2 is hereby substitutedin its place:
“SubsequentDevelopmentApprovals. This Agreement shall not prevent City, in acting on SubsequentDevelopmentApprovals, from applying SubsequentLand Use regulations that are unrelated to the Development Plan, nor shall this Agreement prevent City from denying or conditionallyapproving any SubsequentDevelopmentApproval on the basis of Existing Land Use Regulations or any SubsequentLand Use

Regulation not in conflictwith the standardsset out in the Development Plan.”
(h) Section 4.1.1 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 4.1.1 is hereby substitutedin its place:
“Pierson Blvd. Improvements. Owner to make contribution to the City in the sum of $600,000,without any credit against impactfees or right of reimbursement whatsoever, toward the total cost of currently proposed improvements required on Pierson Boulevard east of the Project in order to meet the increasedtraf?c demand identi?ed in the EIR as being generated by the Project. Said contributionshall be in lieu of any other mitigation suggested or proposed in the EIR speci?c to the Project’s impacton PiersonBoulevardeast of the Project.As of the date hereof, Owner has contributed $400,000 of the $600,000 to the City.

Owner shall cause the ?nal payment of $200,000 to be directedto the City fromproceeds received by Owner from the remainingbond salesto fund improvementsin Improvement Area 1 of CFD2006—1(de?ned below)?’
* ::;::_z— .(i)::: .—;Section_4.i1_;2e:of:the Devlopment Agreement is hereby deleted in its entirety and they 77 1 following Section 4.1.2 is hereby substitutedin its place: a “Fire Station. Owner’s obligations to construct the Permanent Fire Station have been satis?ed.”
(j) , .,.Sections 4.1I.3._(a)and (b) of the A Development greement, as modi?ed by the Subisequent Park,Approval,is herebydeleted in its entirety and the following Sections 4.1.3 (a) and (b) is hereby substitutedin its place:
“(a) ;iKaren Street Park. Owner shall: (i) dedicate to City the ‘
— approximately?ve (5) acre site identi?ed in the conditionsof approval ‘ incorporatedin the DevelopmentPlan (the “Karen Park Parcel”) for use as a publicpark within ?fteen (15) businessdays of the recording of this First Amendmentin the Of?cial Records;and (ii) contribute$1,200,000 (“Karen Park Payment”) to the City for constructionof the improvementsat the Karen Park Parcel concurrent with the sale of the earlier of any lots in either Village 3 or Village 10. Owner will notify City Manager in writing upon the opening of escrow to sell the lots in either.Vil1age3 or Village 10 to facilitate City’s delivery of an escrow demand to Owner and escrow holder for payment of the ‘Karen Park Payment from Owner’s proceeds from the sale.Following dedicationof the Karen Park Parcel and delivery of the Karen Park Payment, Developershall have satis?ed its obligationsrelated to the Karen Park Parcel.
(b) s ParksWithin Development.Owner shall developthe park(s) and open areas described in the Development Plan consistent with City standards and as approved by the City Manager. Any and all parks identi?ed within any Village shall be completed on or before issuance of ?fty percent (50%) of the certi?cates of occupancy for a residential

unit in that Village. Provided all park areas are developed concurrent with the build—outof each Village, Owner shall be entitled to credit against Quiinby fees equal to the improvedpark acreage deemedby the City to be park area. Owner shall ensure that the park areas shall be owned, used and maintained by the Homeowner’s Association as park areas in perpetuity.”
(k) Section 4.1.4 of the Development Agreement is hereby deleted in its entirety and the following Section 4.1.4 is hereby substitutedin its place:
“Financingof Public Improvements.
(a) Infrastructure Financing. The Owner believes that the project cannot proceed without a CFD or Alternative Financing Mechanism (“Financing District”) to reimburse the developer for public facilities costs forinfrastructureto be owned by the City or other public agencies and associatedeveloperimpactfees. At Developer'srequest, Citymay at its solediscretion establish an assessment district(s), community ,, facilities district(s) or other public financingmechanismto finance any —— e :; necessary public improvementsfor the Project substantiallyconsistent with the financing plan (“FinancingPlan”).
j* P :(b) Improvements and Financing/CommunityFacilities District. Pursuant to Chapter2.5 (commencing with section53311)Part 1,Division 2, Title 5 of the Government Code of the State of California,commonly known ,
’ as the ."Mello-RoosCommunityFacilities Act of 1982," the Developer ‘ T
” c ?1nay,;iat itssole election,petition the City Council of the City or a joint 0 " powers ‘agency in which the City is a memberto establish a Community FacilitiesDistrict ("CFD" or “District”), in accordance with the City's policies in existence on the Effective Date. Alternatively, or in addition thereto, the Developer may request that the City initiateand complete .
. proceedings under the Municipal Improvement Act of 1911, the I "
_ ‘Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, or any and all otheravailable public financing mechanism,to provide public conduit financing for the construction of public infrastructure improvements on the Property ("Alternative Financing Mechanisms").If so requested by the Developer,the City may at itssole discretion cooperate with the Developer (or, for matters beyond its . control, and may use its best efforts) in taking all steps necessary to causethe CFD or AlternativeFinancingMechanismsto issue bondsfor such purposes. If the Property is includedwithin a CFD or Alternative FundingMechanismwith othersurrounding properties,the specialtaxes or special assessments burdeningthe various propertiesso includedshall be apportionedona fair share basisrelatedto the benefitderivedby each of such properties in accordance with City policies at the time such property is included.
(c) Existing CFD. Community Facilities District No. 2006-1 (Skyborne) (“CFD2006—l”)was formedby the City in 2006. Developerhas applied for, and City Council has will work in good faith in implementingthe followingchangesto CFD2006-l: (i) issuance of a second (2nd)series of

bondsto fund further improvementsand fees in Improvement Area 1 of CFD2006-1;and (ii) dissolutionof ImprovementArea 2 of CFD2006-1 for Villages 3 and 10
(d) New CFD. City agrees that followingDeveloper’s application,petition or other request in writing for the dissolutionand/or establishmentof a CFD for any or all of Villages 3, 4, 5, 6, 7, 8, 9 or 10 (each, a “SubsequentCFD”), together with depositof sufficient funds to pay the City’s costs to undertake the proceedingsto establish any Subsequent CFD, City shall expeditiouslyconductsuch proceedings to establish the Subsequent CFD in accordancewith the Mello~RoosAct and City’s policies in existence as of the Effective Date and Developer shall cooperate in the conduct of such proceedings. Each Subsequent CFD shall, at a minimum,be subject to the followingrequirements i. Tax Rate. City agrees that the maximum effective tax rate for each Subsequent CFD shall not exceed two percent (2%) based upon the product andpricingprovided by the Developer.In addition,the effective tax rate calculationfor each CFD or AlternativeFinancingMechanisms shallnot include trash collectionand sewer service assessment charges that are levied on the annual property tax bill.
' 7?"ii—.~*~Joir‘ite:Facilities. City agrees that any Subsequent CFD may ?nance, in ’
4 addition to City fees, infrastructure,and public facilities, those fees, ' ‘ infrastructure, and public facilities of other governmental agencies A required’in connection with theDevelopmentPlan, the Developmentof the Property and any Subsequent DevelopmentApprovals, including, ‘ " without limitation, Palm Springs Unified School District, Mission ,, Springs Water District,and the County of Riverside.
‘ iii. a‘ Improvement Areas. City agrees that Developer, workingwiththe TT _ Cityis Special Tax Consultant and Formation Counsel, will advise the . City on the structure of proposed improvementareas’ whichwould be designated and includedwith each SubsequentCFD.”
(1) ~ Section 4.2.1 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 4.2.1 is herebysubstitutedin its place:
“Amount and Components of Fee. The Owner shall pay the service, a permit, impact and other applicable fees required by the City for the Existing Development Approvals and any Subsequent Development Approvals as provided in Exhibit “F”.”
(m) Section 4.2.4 is hereby added to the DevelopmentAgreement:
“Art In Public Places. Owner has donated approved public art in conjunction with the Project’s entry monumentation,which public art has been acceptedby the City Council, entitling Owner to fee credits in the amount of the actual cost of the public art. Documentation of actual costs are required, and its adequacy shall be determinedby the City Manager prior to allocating the fee credit. The amount of fee credits provided to the Owner shall be limited to the actual costs of the public

(H)
art and in the event the actual costs total an amount less than the Art In PublicPlaces Program contributionamount requiredby MunicipalCode section l7.60.050, Owner shall also pay into the City’s Art in Public PlacesFund an amount equalto the differencebetweenthe Art in Public Places contribution amount required by Municipal Code section l7.60.050 and the actual costs of the public art.”
Section 6.1 of the DevelopmentAgreement is hereby deleted in its entirety and the following Section 6.1 is herebysubstitutedin its place: ‘ 6 (0)
“Periodic Review. The City Council shall review this Agreement annually, on or beforethe anniversary of the Effective Date, in orderto ascertain the good faith compliance by Owner with the terms of the Agreement. Owner shallsubmit an AnnualMonitoringReport, in a form acceptableto the City Council, within 30 days after written notice from the City Council. The Annual MonitoringReport shall be accompanied by an annual review and administration fee sufficient to defray the estimated costs of review and administrationof the Agreement during thedsucceeding year. The amount of the annual review and 2 administrationfee shall be set annually by resolution of the City Council.”
A Section6.2 of the Development Agreement is hereby deleted in its entirety and the following Section 6.2 is hereby substitutedin its place:
(Pl
(C1)
. .,“Special Review. The City Council may order a special reviewof C compliance with this Agreement at any time. The City Manager shall conductsuch specialreviews.”
. ,, _ *7 Section 6.3 (b) ofthe DevelopmentAgreement is hereby deleted in its entiretyand the ,. following Section 6.3 (b) is herebysubstitutedin its place:
—f—‘Upon—completion of a periodic review or a special review, the City Manager shallsubmit a report to the City Council.”
Section 6.6 of the Development Agreement is hereby deleted in its entirety and the following Section 6.6 is herebysubstitutedin its place:
“Certificate of Agreement Com_pliance.If, at the conclusion of a Periodic or Special Review, Owner is found to be in compliance with ,_,this Agreement, City Manager shall, upon request by Owner, issue a Certificate of Agreement Compliance (“Certi?cate”) to Owner stating that after the most recent Periodicof SpecialReview and based upon the information known or made known to the City Council that (1) this Agreement remains in effect and (2) Owner is not in default. The Certificate shall be in recordable form, shall contain information necessary to communicateconstructive record notice of the finding of compliance,shall state whether the Certificateis issued after a Periodic of SpecialReview and shall state the anticipateddate of commencement of the next PeriodicReview. Owner may record the Certi?cate with the County Recorder.

Whether or not the Certi?cate is relied upon by assignees or other transferees or Owner, City shall not be bound by a Certi?cate if a default existed at the time of the Periodic of SpecialReview, but was concealed from or otherwise not known to the City Manager or City Council.” (r) Exhibit “A” — Legal Description of Property, Exhibit “B” — Map Of Property and Exhibit “E” — Performance Schedule are deleted and the attachedExhibit “A” — Legal Descriptionof Property, Exhibit “B” — Map Of Property and Exhibit “E” — Performance Schedule are substituted in their place.
(s) Exhibit “F”
— Fee Schedule”, is hereby added to the DevelopmentAgreement.

2. Full Force andEffect. Except as expresslyprovided in this First Amendment,all of the terms and provisionsof the DevelopmentAgreement are and will remain in full force and effect and are hereby ratified and confirmed by the parties hereto. Without limiting the generality of the . foregoing, the amendments contained herein will not be construed as an amendmentto or waiver of any otherprovisionof the DevelopmentAgreement or as a waiver of or consent to any further or future ‘ action on the part ofeither party that would requirethe waiver or consent of the other party. On and F
._ after.the date hereof,each reference in the Development Agreement to “this Agreement,” “the W : '“Agreement,” “hereunder,” .‘e‘hereof,”e“herein” or words of like import, and each reference to the .:,»:;;—;:;:Agreement—ein any_other.—agreements; documents or instrumentsexecuted and deliveredpursuant to, or he iniconnection?/ith,ithe,Agr‘eement,~willmean and be a reference to the DevelopmentAgreement as amended by this First Amendment.

3. Miscellaneous.
.
_
* (a) This First Amendment is governed by, and construed in accordance with, the * lawsof the Stateof California,without regard to the con?ict of laws provisions of such state. .
— (b) 'ThiseFirstAmendmentshall inure to the benefit of and be binding upon each of F - —— the parties and each oftheir respective permittedsuccessors and permitted assigns. e . sf 2- .

F (c) .
e The headings in”thi'sFirst Amendment are for reference only and do not affect the interpretationof this First Amendment.
'(d) ” ‘This First ‘Amendment may be executed in counterparts, each of which is A deemed anoriginal, but all of which constitutes one and the same agreement. (e) Each party shall pay its own costs and expenses in connection with this First —
A Amendment(including the fees and expenses of its advisors,accounts and legal counsel). (f) This First Amendment constitutesthe sole and entire agreement of the parties hereto with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
[SIGNATURES ON FOLLOWING PAGE]

Executed this __ day of August, 2023
CITY OF DESERT HOT SPRINGS: DEVELOPER:

SKYBORNE VENTURES, LLC, a California
limitedliabilitycompany
Doria Wilms,Interim City Manager BY: LANSING STRATEGIC ” MANAGEMENT,LLC a California limitedliability company
BY: JK—RIVERWOODS, LLC, A

CALIFORNIA LIMITED

LIABILITYCOMPANY

ITS GENERAL PARTNER
BYi
JAMES M. KOZAK
ITS: SOLE MEMBER ATTEST:

Jerryl Soriano,'City Clerk
APPROVED AS TO FORM:

Jennifer Mizrahi,City Attorney

EXHIBIT “A”

LEGAL DESCRIPTION OF PROPERTY
[SEE ATTACHED]

Real property in the City of Desert Hot Springs, County of Riverside,State of California, described as follows:

PARCEL1: INTENTIONALLYDELETED
PARCEL2: INTENTIONALLYDELETED
PARCEL3: (APN'S: 667-300-001 THROUGH054, 058; 667-310-001 THROUGH084 AND088; 667- 320-001 THROUGH026, 029 THROUGH078, 080 THROUGH083 AND667-330-001 THROUGH013, 015 THROUGH072 AND076) LOTS1 THROUGH286 ANDLETTEREDLOTS"O"THROUGH"Z"AND"AA"OF TRACTNO. 32030-3 AS SHOWNON BYMAPON FILEIN BOOK419 PAGES29 THROUGH39 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

E PARCEL4: (APN'S:667-340-001.THROUGH048 AND051; 667-350-001THROUGH074 AND078 THROUGH080; AND667-360-001 THROUGH060 AND064)
,
‘ LOTS1 THROUGH182,INCLUSIVE, ANDLETTEREDLOTS"H"THROUGH"S",INCLUSIVE, OF TRACT ‘"*%NO:.-‘3-2030-’10, AS SHOWN-:BIY, MAPON FILEIN BOOK419 PAGES40 THROUGH47 OF MAPS, RECORDSOF RIVERSIDECOUNTY,CALIFORNIA. 6 PARCEL5: (APN'S:667-080-006,667-100-029,031 AND038)
TENTATIVE.(TRACT)_MAP 32030-4, BEINGA SUBDIVISIONOFTHEFOLLOWINGDESCRIBED PROPERTY:

PARCELNO. 1:
i W THESOUTH_‘/2?OETH_ESNORTHWEST1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN . BERNARDINOBASEANDMERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.
'A.ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTS

TO ALLOTHERHYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V) GEOTHERMALHEATRIGHTS

OR GEOTHERMALSUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATER

RIGHTSANDCLAIMSOR RIGHTSTO WATERAND(VII) ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACERESOURCES")LOCATEDIN OR UNDERTHAT

CERTAINREALPROPERTYSITUATEDIN THECOUNTYOF RIVERSIDE,STATEOF CALIFORNIA DESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATEDHEREIN(THE"PROPERTY"), TO THEEXTENTSUCHSUBSURFACERESOURCESHAVENOT BEENPREVIOUSLYRESERVED; AND B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOF THESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHORINTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.) "
PARCELNO. 2:
7 I (THESOUTHWEST,1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SANBERNARDINO

BASEAND,MERIDIAN, STATEOF CALIFORNIA,CCORDINGTO THEOFFICIALGOVERNMENT PLAT THEREOF.
— EXCEPTINGTHEREFROMTHEEAST‘/2OF THESOUTHWEST‘/4.

I VWAILSO ‘EXCEPTINGTHEREFROMTHEEAST‘/2OFTHENORTHEAST1/4OFTHENORTHWEST ‘/4OF THESOUTHWEST‘/4OF SAIDSECTION. ‘I
*’ALSOEXCEPTINGTHEREFROMTHESOUTHERLY40 FEETCONVEYEDTO THECOUNTYOFI RIVERSIDEBYDEEDFILEDFORIRECORDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIAL RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

I —EXCEPTING._THEREFROMANYPORTIONLYINGWITHINTRACT32030-1 AS SHOWNON FILEIN BOOK404 PAGES67 THROUGH75 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. , 2006-0756951 OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I),O|L RIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS ‘TOWATERAND(VII)ALLPRODUCTS‘DERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANY

SUCHWELLSOR MINES,BUTWITHOUTTHE RIGHTTO DRILL,MINE,EXPLORE,OPERATE, PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHE UPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOF THEPROPERTY.)
PARCELNO. 3:

THEEAST1/2OF THESOUTHWEST‘/4,ANDTHEEAST‘/2OFTHENORTHEAST‘/4OF THE NORTHWEST‘/4OFTHESOUTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST, SANBERNARDINOBASEANDMERIDIAN, STATE OF CALIFORNIA,CCORDINGTO THE OFFICIAL GOVERNMENTPLATTHEREOF.

EXCEPTINGTHEREFROMTHESOUTHERLY40 FEETASCONVEYEDTO THECOUNTYOF RIVERSIDE, BYDEEDRECORDEDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIALRECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

EXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-1 AS SHOWNON FILEIN BOOK404 PAGES67 THROUGH75 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-3 AS SHOWNON FILE A
I IN BOOK419 PAGES 29 THROUGH39 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA. ' ' TALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A LLTCOLORADOICORPORATION BYDOCUMENTRECORDEDVOCTOBER 13, 2006, AS INSTRUMENTNO.

I£2006:0756951?OF’OFFICIAL‘RECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:
' 7’ ’
' A."ANY'ANDALL(I)OILRIGHTS,(II)"MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL — SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS " ITO WATERAND(VII)ALLPRODUCTSDERIVEDFROM ANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE' RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF —R|VERS|DE,'STATE'OFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THEI'PROPERTY"),TO' THEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND ,
'
’ ‘DIST’ ’ B.-THEPERPETUALRIGHTTO DRIL|.«;%5M|'NE, EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE I
" "L7 " ANYOFTHESUBSURFACERESOURCESONR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLAND MINE,FROM LANDSOTHERTHANTHEPROPERTY, — WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP, MAINTAIN,REPAIR,-

IDEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTY.ORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCEL6: (APN'S:667-100-029,031 AND038; 667-120-051,052, 025 THROUGH027) TENTATIVE(TRACT)MAP32030-5,BEINGA SUBDIVISIONOFTHEFOLLOWINGDESCRIBED PROPERTY:

PARCELNO. 1
THESOUTHWEST1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SANBERNARDINO

BASEANDMERIDIAN,STATEOF CALIFORNIA, ACCORDINGTO THEOFFICIALGOVERNMENTPLAT THEREOF.

EXCEPTINGTHEREFROMTHE EAST1/2OF THESOUTHWESTI/4.

ALSOEXCEPTINGTHEREFROMTHEEAST1/2OF THENORTHEAST1/4OF THENORTHWEST1/4OF THESOUTHWEST1/4OFSAID SECTION.

ALSOEXCEPTINGTHEREFROMTHESOUTHERLY40 FEETCONVEYEDTO THE COUNTYOF RIVERSIDEBYDEEDFILEDFORRECORDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIAL RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-1 AS SHOWNON FILE IN BOOK404, PAGES67 THROUGH75, OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951 OF OFFICIALRECORDSOF SAID COUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER , HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TOWATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE I RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF .. RIVERSIDE,.STATE OF.CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED "?5—HEREIN(THE-5'PROP—ERTYII),TO—THE EXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND
f B.THE PERPETUALRIGHTTOIDRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE :ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE 7 RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY, — -WEI.—L'S, TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO ' BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL, RETUNNEL,EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCH,WELLS OR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, ' OPERATE,’ PRODUCE,’ STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACE.OFTHEPROPERTYOR THEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 2:

I * THEEAST‘/2OF THE--SOUTHWEST1/4,ANDTHEEAST‘/2OF THENORTHEAST‘/4OF THE NORTHWEST‘/4 OFTHESOUTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,

SANBERNARDINOBASEANDMERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.

EXCEPTINGTHEREFROMTHESOUTHERLY40 FEETAS CONVEYEDTO THECOUNTYOFRIVERSIDE, BY DEEDRECORDEDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIALRECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-1 AS SHOWNON FILE IN BOOK404, PAGES67 THROUGH75, OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-3 AS SHOWNON FILE IN BOOK419, PAGES29 THROUGH39, OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951 OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREVAND OPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOF THEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDORDIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIOR LIMITSOFTHE PROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYOR THEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.)
PARCEL3:
7 THAT, PORTION-OFJTHE_EAS7F1/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE4 WEST,SAN ’BERNARDINO’BASEAND?MERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.'
COMMENCINGATCTHESOUTHEASTCORNEROF SAIDSECTION29; THENCENORTHERLYALONG THE EASTERLYBOUNDARY..OF.SAIDSECTION29, A DISTANCEOF 906 FEETTO THETRUEPOINT 1 OF BEGINNING;,THENCE WESTERLYANDPARALLELTHESOUTHERLYBOUNDARYOF SAIDSECTIONA T F 29, ADISTANCEJOF528 FEETTHENCENORTHERLYANDPARALLELWITHTHEEASTERLY BOUNDARYCOF SAIDSECTION-29,A DISTANCEOF 577 FEET;THENCEEASTERLYANDPARALLEL WITHTHESOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEETTO THE E ’ EASTERLYBOUNDARYOF SAIDSECTION29; THENCESOUTHERLYALONGTHEEASTERLY A I IIBOUNDARYOFQSAIDTSECTION 29,’A DISTANCEOF 577 FEETTO THETRUEPOINTOF BEGINNING. 'ALSO§EXCEP_TING THEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO.

I 2007640756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTEREST IS FURTHERDESCRIBED AS FOLLOWS:

AIANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS 'TO,WAT,ER,AND (VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE " RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,

PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR IN THE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOF THE PROPERTY.)
PARCELNO.4:

THE NORTH165 FEETOFTHEREALPROPERTYDESCRIBEDAS FOLLOWS:

THATPORTIONOF THEEAST1/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASEANDMERIDIAN,STATE OF CALIFORNIA, ACCORDINGTO THE OFFICIAL GOVERNMENTPLATTHEREOF.

COMMENCINGAT THESOUTHEASTCORNEROF SAID SECTION29; THENCENORTHERLYALONG THE EASTERLYBOUNDARYOF SAIDSECTION,A DISTANCEOF 329.0 FEETTO THETRUEPOINTOF BEGINNING;THENCEWESTERLYANDPARALLELWITHTHESOUTHBOUNDARYOF SAIDSECTION, A DISTANCEOF 528.0 FEET;THENCENORTHERLYANDPARALLELWITHTHEEASTERLYBOUNDARY OF SAIDSECTION, A DISTANCEOF 577.0 FEET;THENCEEASTERLYANDPARALLELWITHTHE SOUTHBOUNDARYOFSAID SECTIONA DISTANCEOF 528.0 FEET;THENCESOUTHERLYALONG THE EASTERLYBOUNDARYOF SAIDSECTION,A DISTANCEOF 577.0 FEETTO THETRUEPOINTOF BEGINNING.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A COLORADOCORPORATION BY’-DOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. *1...;;20’06:0756951:OF.;OEEICIALfREC©RDS OF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBEDA AS FOLLOWS:

A.ANYANDALL(I)'OILRIGHTS,‘(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER ' WHYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL SUBSTANCESTHAT’MAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE, , RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYASITUATED INTHEVCOUNTY OF ' 7 RIVERSIDE, STATEOF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED "HEREIN(THE'"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B.THEPERPETUALRIGHTTO ‘DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE 7 ANYOFTHESUBSURFACERSOURCESON OR FROM THEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE “RIGHT TO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,’

WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHE PROPERTYOR THEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 5:

THATPORTIONOF THEEAST‘/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASEANDMERIDIAN, STATEOF CALIFORNIA, ACCORDINGTO THEOFFICIAL

GOVERNMENTPLATTHEREOF
COMMENCINGAT THESOUTHEASTCORNEROF SAIDSECTION29; THENCENORTHERLYALONG THE EASTERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 329 FEETTO THETRUEPOINT OF BEGINNING;THENCEWESTERLYANDPARALLELWITHSOUTHERLYBOUNDARYOF SAID SECTION29, A DISTANCEOF 528 FEET;THENCENORTHERLYANDPARALLELWITHTHEEASTERLY BOUNDARYOF SAIDSECTION29, A DISTANCEOF 577 FEET;THENCEEASTERLYANDPARALLEL WITHTHESOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEET;THENCE

SOUTHERLYANDALONGTHEEASTERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 577 FEETTO THETRUE POINTOF BEGINNING.

EXCEPTINGTHEREFROMTHENORTH165 FEETTHEREOF.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951 OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINORUNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PR'OPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOF,THE SUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE 'RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY, . WELLS,TUNNELSANDSHAFTSTINTO, THROUGHORACROSSTHESUBSURFACEOF THEPROPERTY,ANDTO BOTTOMSUC'H,WH|PSTOCKED'—OR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR ' I‘‘BEYONDTHE‘EXTER|OR’L|M|TS'OF’THE PROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

I OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHE-PROPERTYORTHE UPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.) '
PARCELNO. 6:

THAT PORTIONTOFTHEEAST1/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN , BERNARDINOBASEANDMERIDIAN,STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.
7’ COMMENCINGEATITHEI SOUTHTEAST’ CORNEROF SAIDSECTION29; THENCEWESTERLYALONGTHE A I
I SOUTHERLYBOUNDARYOFSAIDSECTION29, A DISTANCEOF 528 FEETTO THETRUEPOINTOF ’ “BEGINNING; THENCECONTINUINGWESTERLYALONGTHE SAIDSOUTHERLYBOUNDARYOF SAID ~SECTION929,A’DISTANCEOF 528 FEET;THENCENORTHERLYANDPARALLELWITHTHE EASTERLYA ” BOUNDARYOF SAIDSECTION29, A DISTANCEOF 2640 FEET;THENCEEASTERLYANDPARALLEL 6 WITHTHESOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEET;THENCE SOUTHERLYANDPARALLELWITHTHEEASTERLYBOUNDARYOF SAIDSECTION29, A DISTANCE2 OF 2640 FEETTO THETRUEPOINT OF BEGINNING.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951 OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSORRIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE,STATEOF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHE EXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND

* i'—TiCOLORADOCORPORATIONBY DOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO.

B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON ORFROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WLLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL, EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREORREMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCEL7: (APN'S:667-080-006;667-100-029,031 AND038; 667-120-051,052 AND024) TENTATIVE(TRACT)MAP32030-6,BEINGASUBDIVISIONOF THEFOLLOWINGDESCRIBED PROPERTY:

PARCELNO. 1: I
‘ ’
’”
THESOUTH1/2OF:THENORTHWEST1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASE ANDMERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF. -
6‘-;’i7’5’T—"—57 "IT‘”TTALSO?EXCEPTING‘ THEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A 2006-0756951“OFOFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

V
- A. ANYANDALL(I)OILRIGHTS,—'(|I) MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONS BYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

JSUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSORRIGHTS ,, TO WATERAND(VI|),ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE,'STATE OF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED ‘" ' "_'"HEREIN(THE,','PROPERTY"),’TO'THE EXTENTSUCHSUBSURFACERESOURCES HAVENOTBEENPREVIOUSLY RESERVED; AND
B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON ORFROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTOWHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,' WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO BOTTOMSUCHWHIPSTOCKEDORDIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINORV_ BEYONDTHEEXTERIORLIMITSOF THEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, OPERATE,—PRODUCE, STOREORREMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHE UPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 2:

THESOUTHWEST1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SANBERNARDINO

BASEANDMERIDIAN, STATEOF CALIFORNIA,CCORDINGTO THEOFFICIALGOVERNMENTPLAT THEREOF.

EXCEPTINGTHEREFROMTHEEAST1/2OFTHESOUTHWEST‘/4.

ALSOEXCEPTINGTHEREFROMTHE EAST1/2OF THENORTHEAST1/4OFTHENORTHWEST‘/4OF

THESOUTHWEST1/4OF SAIDSECTION.

ALSOEXCEPTINGTHEREFROMTHESOUTHERLY40 FEETCONVEYEDTO THECOUNTYOF RIVERSIDEBYDEEDFILEDFORRECORDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIAL RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

EXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-1 ASSHOWNON FILEIN BOOK404 PAGES67 THROUGH75 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

I HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND
" B.——'THE'PERPvE—,TUAL RIGHTTO DRILL—,—' MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE ' "1 ”A'NY’OF;'|‘HESUBSURFA’CE’RES'OURCES ON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE RIGHTTO WHIPSTOCKOR.DIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY, WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOF THEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDORDIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL, EQUIP,MAINTAIN,REPAIR, I ’ ‘DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCES THROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 3:

F
I ’THE‘E’AST7‘/27 OFTHE SOUTHWEST1/4,ANDTHEEAST1/2OF THENORTHEAST‘/4OF THE — NORTHWEST1/4OFTHESOUTHWEST1/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST, SANBERNARDINOBASEANDMERIDIAN, STATEOFCALIFORNIA, ACCORDINGTOTHEOFFICIAL GOVERNMENTPLATTHEREOF. —
EXCEPTINGTHEREFROMTHESOUTHERLY40 FEETASCONVEYEDTO THECOUNTYOFRIVERSIDE BYDEEDRECORDEDJULY26, 1949 AS INSTRUMENTNO. 3081 OF OFFICIALRECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

I
EXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-1 AS SHOWNON FILEIN BOOK404 PAGES67 THROUGH75 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-3 AS SHOWNON FILE IN BOOK419 PAGES29 THROUGH39 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTS

OR GEOTHERMALSUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATER

RIGHTSANDCLAIMSOR RIGHTSTO WATERAND(VII) ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACERESOURCES")LOCATEDIN OR UNDERTHAT

CERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATE OF CALIFORNIA DESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATEDHEREIN(THE"PROPERTY"), TO THEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLYRESERVED; AND B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOF THEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOF THEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 4:

THATPORTIONOFTHEEAST1/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE3 EAST,SAN _ _BERNARDINO BASEANDMERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.
"1 "’V*COMMENCINGATTTHESOUTHEAST CORNEROF SAIDSECTION29; THENCENORTHERLYALONG I, THELEASTERLYBOUNDARY OF SAIDSECTION29, A DISTANCEOF 1483 FEETTO THETRUEPOINT 5 OF.BEGINNING;THENCEWESTERLYANDPARALLELWITHTHESOUTHERLYBOUNDARYOF SAID SECTION29, A DISTANCEOF 528 FEET;THENCENORTHERLYANDPARALLELWITHTHEEASTERLY BOUNDARYOFSAIDSECTION29, A DISTANCEOF 577 FEET;THENCEEASTERLYLANDPARALLEL WITHTHEPSOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEETTO THE F ._
I ,3 EASTERLYBOUNDARYOF SAIDSECTION29; THENCESOUTHERLY ALONGTHEEASTERLY BOUNDARYOFSAIDSECTION-29,A DISTANCEOF 577 FEETTO THETRUEPOINTOF BEGINNING. ‘
’ ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A .COLORADOCORPORATION-BY. DOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENT7 20056307756951; OF OFFICIALFRECORDS OF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED 3 AS FOLLOWS: A
’
A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER — HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS ' TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFVTHE FOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDIN OR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE,STATEOFCALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND '
B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL, RETUNNEL,EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)

PARCELNO. 5:

THATPORTIONOF THEEAST‘/2OF SECTION29, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASEANDMERIDIAN, STATE OF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.

COMMENCINGAT THESOUTHEASTCORNEROFSAIDSECTION29; THENCEWESTERLYALONGTHE SOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEETTO THETRUEPOINTOF BEGINNING;THENCECONTINUINGWESTERLYALONGTHESAID SOUTHERLYBOUNDARYOF SAID SECTION29, A DISTANCEOF 528 FEET;THENCENORTHERLYANDPARALLELWITHTHEEASTERLY BOUNDARYOF SAIDSECTION29, A DISTANCEOF 2640 FEET;THENCEEASTERLYANDPARALLEL I WITHTHESOUTHERLYBOUNDARYOF SAIDSECTION29, A DISTANCEOF 528 FEET;THENCE SOUTHERLYANDPARALLELWITHTHE EASTERLYBOUNDARYOF SAIDSECTION29, A DISTANCE OF 2640 FEETTO THETRUEPOINTOF BEGINNING.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A I COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS: .
,A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

QIHYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL fi"SUBSTANCESTHAT;'MA9Y'BE7PRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS - ,’TO"WATER7AND”(V||)‘A|jI; PRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE, ‘ ” ‘I
T» RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF , RIVERSIDE, STATEOF.CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND
A '17 .B. THEPERPETUALRIGHTFTODRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATION THE . , RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY, ,
' WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO , ',BO'I'|'OM SUCHWHIPSTOCKEDORDIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR BEYONDTHEEXTERIORLIMITSOF THEPROPERTY,ANDTO REDRILL, RETUNNEL, EQUIP,MAINTAIN,-REPAIR, DEEIPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, " OPERATE,PRODUCE,STOREORREMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHE PROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOF THE PROPERTY.) '
PARCEL8: (APN'S:667-080-002THROUGH004 AND006)
TENTATIVE(TRACT)MAP32030-7,BEINGA SUBDIVISIONOFTHEFOLLOWINGDESCRIBED PROPERTY:

PARCELNO. 1
THATPORTIONOFTHENORTHWEST‘/4OF THENORTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SANBERNARDINOBASEANDMERIDIAN, STATEOF CALIFORNIA, ACCORDINGTO THEOFFICIALGOVERNMENTPLATTHEREOF.

BEGINNINGAT THESOUTHEASTCORNEROFTHENORTHWEST‘/4OF THENORTHWEST1/4,OF SAIDSECTION;THENCEWESTERLY, ON THESOUTHLINEOF SAIDNORTHWEST‘/4OFTHE NORTHWEST‘/4980.5 FEET,TO THEEASTLINEOFTHATCERTAIN60 FOOT ROADKNOWNAS 29 PALMSHIGHWAY;THENCENORTH23° 01' 13" EASTONTHENORTHLINEOF SAIDSECTION 390.71 FEETTO THENORTHEASTCORNEROF THENORTHWEST‘/4_OFTHENORTHWEST1/4OF SAIDSECTION;THENCESOUTH0° 09' 30" EAST,ON THEEASTLINEOF THESAIDNORTHWESTI/4

OF THE NORTHWEST1/4OF SAID SECTION,1380.18 FEET,TO THE POINTOF BEGINNING.

EXCEPTINGTHEREFROMONE HALFOF ALLOIL,GASANDOTHERHYDROCARBONSUBSTANCES UNDERLYINGSAIDLANDAND‘/2OF ALLOTHERMINERALS, AS RESERVEDIN DEEDFROMJOSEPH R. TROT|'ER, HUSBANDANDWIFEFILEDFORRECORDMARCH30, 1955 AS BOOK1715 PAGE 572 OF OFFICIALRECORDSOF SAID COUNTY.

SAID PROPERTYIS ALSOSHOWNAS PARCEL2, 3 AND4 ON RECORDOF SURVEYON FILEIN BOOK 27 PAGE65 OF RECORDSOF SURVEY,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO. 2006~O756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:
,, A.,ANY ANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER ' HYDROCARBONS BYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDIN OR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND '7‘ '1‘"*‘f7'T‘?“4TB."THE’PERPETUAL—RIGHT‘TO,DR|LL}MINE, EXPLOREANDOPERATEFORANDPRODUCE, STOREANDREMOVE ' ANYOFTHESUBSURFACERESOURCESON ORFROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY, WELLS,'TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO_ ' BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOF THEPROPERTY,ANDTO REDRILL, RETUNNEL,EQUIP,MAINTAIN,REPAIR, I
’ DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTVTODRILL,(MINE,EXPLORE, : OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOF THE PROPERTY.)
PARCELNO. 2
’ FTHEIISOUTH1/2OF THENORTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN BERNARDINO BASEANDMERIDIAN, STATEOF CALIFORNIA,CCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC., A . COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROM ANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE

RESOURCESV) LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND
B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREAND

REMOVEANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUT

LIMITATIONTHERIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM

LANDSOTHERTHANTHEPROPERTY,WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSS

THESUBSURFACEOFTHEPROPERTY,ANDTO BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLY

DRILLEDWELLS,TUNNELSANDSHAFTSWITHINOR BEYONDTHEEXTERIORLIMITSOF THE

PROPERTY,ANDTO REDRILL,RETUNNEL, EQUIP,MAINTAIN, REPAIR,DEEPENANDOPERATEANY

SUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,OPERATE, PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR IN THE SURFACEOF THEPROPERTYORTHE UPPERFIVEHUNDRED(500) FEETOF THE SUBSURFACEOF THEPROPERTY.)
PARCEL9: (APN'S: 667-080-O06AND007)
TENTATIVE(TRACT)MAP32030-8,BEINGA SUBDIVISIONOF THE FOLLOWINGDESCRIBED PROPERTY:

PARCELNO. 1
THENORTHEAST‘/4OF THENORTHWEST‘/4ANDTHENORTH‘/2OF THENORTHEAST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SANBERNARDINOBASEANDMERIDIAN, STATE - OF CALIFORNIA, ACCORDINGTO THEOFFICIALGOVERNMENTPLATTHEREOF.

EXCEPTINGTHEREFROMANYPORTIONLYINGWITHINTRACT32030-10AS SHOWNONFILEIN BOOK419PAGES40 THROUGH47 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

ALSOEXCEPTINGITHEREEROM ALLTHATINTEREST CONVEYEDTO DRHENERGY,INC.,A ‘“GOLORADOICORPORATION-‘BY‘DOCUMENT RECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS: I
' A; ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER 7 -HYDROCARBONS BYWHATSOEVERNAMEKNOWN,(V)GEOTHERMAL HEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS 7 ' TOrWATER'AND’(VII)'ALL PRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF , ?R|VERSIDE,—STATEOFCALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEBE|N_(THE",PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOT BEENPREVIOUSLY RESERVED; AND
-—B. THEPERPETUALRIGHTTO DRILL,’MINE, EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE —ANYOFTHESUBSURFACERSOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY, WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL, EQUIP,MAINTAIN,REPAIR, DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, OPERATE,PRODUCE, STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 2:

THESOUTH‘/21OF THENORTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASEANDMERIDIAN, STATEOF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDIN OR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY, WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOF THEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL, RETUNNEL, EQUIP,MAINTAIN,REPAIR, DEEPENANDOPERATEANYSUCHWELLSORMINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, '7 " OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOF THEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE PROPERTY.)
~ PARCEL10: (APN'S:667-080-002THROUGH004, 006 AND007)
" ;
' OffI’TEN'LAIIVE:(TRAU)TMAP
PROPERTY:
32030-9,BEINGA SUBDIVISION
‘ OF THEFOLLOWINGDESCRIBED
PARCELNO. 1
z THATPORTIONOF THENORTHWEST‘/4OFTHENORTHWEST‘/4OF SECTION28, TOWNSHIP2 ‘ :SOUTH,RANGE54EAST,'SANBERNARDINOBASEANDMERIDIAN, STATEOFCALIFORNIA, ' ACCORDINGTO THE OFFICIALGOVERNMENTPLATTHEREOF.

BEGINNINGAT THESOUTHEASTCORNEROFTHENORTHWEST‘/4OFTHENORTHWEST1/4,OF , SAID’SECTION;.THENCELWESTERLY, ONTHESOUTHLINEOF SAIDNORTHWEST‘/4OF THE ,, NORTHWEST-I/4 9.80.5FEET,-ITOTHEEASTLINEOFTHATCERTAIN60 FOOTROADKNOWNAS29 I - PALMSHIGHWAY;;THENCE NORTH23° 01' 13" EASTONTHENORTHLINEOF SAIDSECTION I .3 ,7
T 390.71 FEETITO/THENORTHEASTCORNEROFTHE NORTHWEST1/4OFTHENORTHWEST‘/4OF SAIDSECTION;THENCESOUTH70° 09' 30" EAST,ONTHEEASTLINEOFTHESAIDNORTHWEST1/4 OF THENORTHWEST1/4OF SAIDSECTION,1380.18 FEET,TO THEPOINTOF BEGINNING. , EXCEPTINGTHEREFROMONEHALFOF ALLOIL,GASANDOTHERHYDROCARBONSUBSTANCES UNDERLYINGSAID LANDAND1/2OFALLOTHERMINERALS, AS RESERVEDIN DEEDFROMJOSEPH R.TROTFER,HUSBANDANDWIFEFILEDFORRECORDMARCH30, 1955 AS BOOK1715 PAGE572 OF OFFICIALRECORDSOF SAIDCOUNTY.

ALSOTEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006, AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDSOF SAIDCOUNTY.SAIDINTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A.ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSORRIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDIN OR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED; AND

B. THE PERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOF THESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOF THEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOF THE PROPERTY.)
SAID PROPERTYIS ALSOSHOWNAS PARCEL2, 3 AND4 ON RECORDOF SURVEYON FILEIN BOOK 27 PAGE 65 OF RECORDSOF SURVEY,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

PARCELNO. 2
THENORTHEASTI/4FOFTHE NORTHWEST1/4ANDTHENORTH‘/2OF THENORTHEAST1/4OF SECTION28, TOWNSHIP2 SOUTH,’RANGE4 EAST,SANBERNARDINOBASEANDMERIDIAN, STATE 7OF CALIFORNIA, ACCORDINGTO THEOFFICIALGOVERNMENTPLATTHEREOF.

I
. EXCEPTINGLTHEREFROM ANYPORTIONLYINGWITHINTRACT32030-10 AS SHOWNON FILEIN LBOOK 419. PAGES40.THROUGH47 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

I ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATION BYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO. 2006=0756951OFOFFICIALRECORDS OF SAIDCOUNTY.SAID INTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANY.ANDALL’(|)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER » I

I HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL '
7 SUBSTANCESTHATMAYBEVPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS 'TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE, RESOURCES")LOCATEDINORUNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE,STATEOF CALIFORNIADESCRIBEDIN EXHIBIT"A"ATTACHEDHERETOANDINCORPORATED _ , .HERE|N (THE':'PROPERTY:5:‘),TO THEEXTENTSUCHSUBSURFACERESOURCESHAVENOTBEENPREVIOUSLY RESERVED;AND
' B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORAND PRODUCE,STOREAND REMOVE

ANYOFTHESUBSURFACEVRESOURCES ON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLAND MINE,FROMLANDSOTHERTHANTHEPROPERTY, 'WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO " ' BOTTOM SUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHORINTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.)
PARCELNO. 3
THESOUTH‘/2OF THENORTHWEST‘/4OF SECTION28, TOWNSHIP2 SOUTH,RANGE4 EAST,SAN

BERNARDINOBASEANDMERIDIAN, STATEOF CALIFORNIA, ACCORDINGTO THEOFFICIAL GOVERNMENTPLATTHEREOF.

ALSOEXCEPTINGTHEREFROMALLTHATINTERESTCONVEYEDTO DRHENERGY,INC.,A COLORADOCORPORATIONBYDOCUMENTRECORDEDOCTOBER13, 2006,AS INSTRUMENTNO.

2006-0756951 OF OFFICIALRECORDSOF SAIDCOUNTY.SAID INTERESTIS FURTHERDESCRIBED AS FOLLOWS:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS = TO WATERAND(VII)ALLPRODUCTSDERIVEDFROMANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"ATTACHEDHERETOANDINCORPORATED HEREIN(THE"PROPERTY"),TOTHEEXTENTSUCHSUBSURFACERESOURCESHAVENOT BEENPREVIOUSLY RESERVED;AND
B. THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKORDIRECTIONALLYDRILLANDMINE,FROM LANDSOTHERTHANTHEPROPERTY,

WELLS,TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOF THEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLED WELLS,TUNNELSANDSHAFTSWITHINOR —.BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, ,,.OPERATE,PRODUCE,STOREOR REMOVEANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.
—:-"TLPARCEI:11~1::—(APN'S:-667:300-055510,.667-300-056-1, 667-300-057-2,667-310-085-8,677-310-086-9, ---:—Z6773’310-T087-0,"677-3201027-7,-677-320-028-8, 677-320-079-4,667-330-O14-6,667-330-073-9,667- 330-074-0 AND667-330-075-1)
LE'I'I,'ERED_LOTSA, B,C, F,’G, H, I, J, K,L,MANDNOF TRACTNO. 32030-3 AS SHOWNON BYMAPS ON FILEINBOOK419 PAGES29 THROUGH39 OF MAPS,RECORDSOF RIVERSIDECOUNTY, CALIFORNIA.

EXCEPTINGTHEREFROM:
- A. ANY'AND,ALL(I)OIL-RIGHTS, (II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER -
' HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL , , Z',’S'UBSTANCES,THATMAYBE,PRODUCED FROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS . TO WATERAND(VI|)'ALLPRODUCTS"'DERIVED FROMANYOF THEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"INDEEDRECORDEDOCTOBER13, 2006 AS INSTRUMENTNO. 2006- 0756951 OF OFFICIAL(THE"PROPERTY"), TO THEEXTENTSUCHSUBSURFACE RESOURCESHAVENOT BEENPREVIOUSLYRESERVED;AND
B.THEPERPETUALRIGHTTOIDRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTOWHIPSTOCKOR DIRECTIONALLYDRILLAND MINE,FROM LANDSOTHERTHANTHEPROPERTY, , WWELLS, TUNNELSANDSHAFTSINTO,THROUGHOR ACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO

BOTTOMSUCHWHIPSTOCKEDORDIRECTIONALLYDRILLEDWELLS,TUNNELSANDSHAFTSWITHINOR

BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL, RETUNNEL, EQUIP, MAINTAIN,REPAIR,

DEEPENANDOPERATEANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE,

OPERATE,PRODUCE,STOREOR REMOVEANYOF THESUBSURFACERESOURCESTHROUGHORINTHE , SURFACEOFTHEPROPERTYORTHEUPPERFIVEHUNDRED(500) FEETOFTHESUBSURFACEOFTHE PROPERTY.ASCONVEYEDINDEEDRECORDEDOCTOBER13, 2006 AS INSTRUMENTNO. 2006-0756951OF OFFICIALRECORDS.

PARCEL12: (APN'S:667-340-049-9,667-340-350-9,667-350-O75-3,667-350-O76-4,667-360-061-1, 667-360-062-2 AND667-360-063-3)

LETTEREDLOTSA THROUGHF OF TRACTNO.32030-10,AS SHOWNBYMAPON FILEIN BOOK419 PAGES40 THROUGH47 OF MAPS,RECORDSOF RIVERSIDECOUNTY,CALIFORNIA.

EXCEPTINGTHEREFROM:

A. ANYANDALL(I)OILRIGHTS,(II)MINERALRIGHTS,(III)NATURALGASRIGHTS,(IV)RIGHTSTO ALLOTHER

HYDROCARBONSBYWHATSOEVERNAMEKNOWN,(V)GEOTHERMALHEATRIGHTSORGEOTHERMAL

SUBSTANCESTHATMAYBEPRODUCEDFROMTHEPROPERTY,(VI)WATERRIGHTSANDCLAIMSOR RIGHTS TO WATERAND(VII)ALLPRODUCTSDERIVEDFROM ANYOFTHEFOREGOING(COLLECTIVELY, "SUBSURFACE RESOURCES")LOCATEDINOR UNDERTHATCERTAINREALPROPERTYSITUATEDINTHECOUNTYOF RIVERSIDE, STATEOF CALIFORNIADESCRIBEDINEXHIBIT"A"INDEEDRECORDEDOCTOBER13, 2006 AS . INSTRUMENTNO. 2006- 0756951 OF OFFICIALRECORDS(THE"PROPERTY"), TO THEEXTENTSUCH SUBSURFACERESOURCESHAVENOTBEENPREVIOUSLYRESERVED; AND
- B.THEPERPETUALRIGHTTO DRILL,MINE,EXPLOREANDOPERATEFORANDPRODUCE,STOREANDREMOVE

ANYOFTHESUBSURFACERESOURCESON OR FROMTHEPROPERTY,INCLUDINGWITHOUTLIMITATIONTHE

RIGHTTO WHIPSTOCKOR DIRECTIONALLYDRILLANDMINE,FROMLANDSOTHERTHANTHEPROPERTY,

I WELLS,TUNNELSANDSHAFTSINTO,THROUGHORACROSSTHESUBSURFACEOFTHEPROPERTY,ANDTO '

I BOTTOMSUCHWHIPSTOCKEDOR DIRECTIONALLYDRILLEDWELLS,TUNNELSANDSHAFTSWITHINOR i BEYONDTHEEXTERIORLIMITSOFTHEPROPERTY,ANDTO REDRILL,RETUNNEL,EQUIP,MAINTAIN,REPAIR, '

I FDEEPENANDOPERATETANYSUCHWELLSOR MINES,BUTWITHOUTTHERIGHTTO DRILL,MINE,EXPLORE, '
. ‘Cf ‘I?7’T.T;"OPERATE', PRODUCE,"STOR‘E'OIR’REMOVE ANYOFTHESUBSURFACERESOURCESTHROUGHOR INTHE " 2 ' V ISURF'ACE’OF'THEPROPERTY*'ORTHEUPPERFIVEHUNDRED(500) FEETOF THESUBSURFACEOFTHE ' 'PROPERTYEASCONVEYED,IN DEEDRECORDEDOCTOBER13, 2006 AS INSTRUMENTNO. 2006-0756951 OF OFFICIALRECORDS. ’
PARCEL13: (APN:162—230-015AND162-230-O21)
. ,PARCEL——'.-'B'v' ASSHOWNONLOTLINEADJUSTMENT NO.LLA#19007, AS EVIDENCEDBY 3 1 *
‘ DOCUMENTRECORDEDMARCH12, 2020 AS INSTRUMENTNO. 2020-0115685OF OFFICIAL .

P . RECORDS,BEINGMOREPARTICULARLYDESCRIBEDAS FOLLOWS:
7’ THATPORTION‘OFLOT 3 OF TRACTNO. 36822, IN THECITYOFJURUPAVALLEY,COUNTYOF I
I TRIVERSIDE,STATE OF CALIFORNIA, AS PERMAPRECORDED IN BOOK465 OF MAPS,PAGES69 — — THROUGH73,-—INCLUSIV—E,1OF MAPS,IN THEOFFICEOF THECOUNTYRECORDEROF SAID I CO,UNTY,f LYINGWITHINSECTION27, TOWNSHIP2 SOUTH,RANGE6 WEST,S.B.M.,MORE PARTICULARLYDESCRIBEDAS FOLLOWS:

I ”BEGINNINGATTHENORTHEASTCORNEROF SAIDLOT3, SAIDPOINT BEINGONTHESOUTHERLY RIGHTOFWAYOF RANCHOJURUPADRIVE,HAVINGA HALFWIDTHOF 30.00 FEET,AS SHOWNON

SAIDMAP,SAIDPOINTALSOBEINGONA NONTANGENTCURVECONCAVETO THENORTHAND HAVINGA RADIUSOF 280.00 FEET,A RADIALLINEFROMSAIDPOINTBEARSNORTH08° 54’ 47" EAST;
THENCESOUTH00° 36’107”WEST;ALONGTHEEASTLINEOF SAID LOT3, A DISTANCEOF 516.44 FEET;
THENCESOUTH28° 46’ 32" WEST,A DISTANCEOF 49.89 FEETTO A POINTONTHESOUTHERLY LINEOFSAID LOT3, SAID POINTALSOBEINGONTHENORTHERLYRIGHTOF WAYOF EQUESTRIANWAY,HAVINGA HALFWIDTHOF 30.00 FEET,AS SHOWNONSAIDMAP; THENCENORTH61° 13’ 28" WEST,ALONGSAIDSOUTHERLYLINEOF SAIDLOT3, A DISTANCEOF

28.60 FEET;
THENCESOUTH31° 30’ 21" WEST,A DISTANCEOF 275.43 FEET;

THENCESOUTH76° 56’ 11"WEST,A DISTANCEOF 35.62 FEET;
THENCENORTH57° 37’ 59" WEST,A DISTANCEOF 340.72 FEETTO THEBEGINNINGOF A TANGENTCURVECONCAVETO THENORTHEASTANDHAVINGA RADIUSOF 345.00 FEET; THENCENORTHWESTERLYALONGSAIDCURVE,ANARCDISTANCEOF 88.86 FEET,THROUGH ACENTRALANGLEOF 14° 45’ 26";
THENCENORTH72° 23' 25" WEST,A DISTANCEOF 496.61 FEETTO THE BEGINNINGOF A TANGENTCURVECONCAVETO THESOUTHANDHAVINGA RADIUSOF 845.00 FEET; THENCEWESTERLYALONGSAIDCURVE,ANARCDISTANCEOF 484.34 FEET,THROUGH CENTRALANGLEOF 32° 50’ 27";
THENCESOUTH749 46708"WEST,A DISTANCEOF 153.49 FEETTO THEBEGINNINGOF A TANGENTCURVECONCAVETO THESOUTHEASTANDHAVINGA RADIUSOF 670.00 FEET; THENCESOUTHWESTERLYALONGSAIDCURVE,ANARCDISTANCEOF1.51FEET,THROUGHA CENTRALANGLEOF 00° 07’44"; ’
THENCENORTH64°15’-42" WEST,A DISTANCEOF 19.83 FEETTO A POINTONTHEWEST * LINEOFSAID_.LOT'3,ISAID§iEOINT BEINGONTHEEASTRIGHTOF WAYOF BEACHSTREET, HAVINGA HALFWIDTHOF 28.00 FEET,AS SHOWNON SAIDMAP; * F THENCENORTH"15°’13'*52" WEST,A DISTANCEOF 80.36 FEETTO THEBEGINNINGOF A 7 I TANGENTCURVECONCAVETO THEEASTANDHAVINGA RADIUSOF 302.00 FEET; “ THENCENORTHERLYALONGSAIDCURVE,ANARCDISTANCEOF 294.47 FEET,THROUGHA ’ CENTRALANGLEOF 55° 52' 01'’ TO THEBEGINNINGOF A REVERSECURVECONCAVETO THE J NORTHWESTANDHAVINGA RADIUSOF 258.00 FEET,A RADIALLINEFROMSAIDPOINT BEARSNORTH49° 21’ 51" WEST;
'
* THENCENORTHERLYALONGSAIDCURVE,ANARCDISTANCEOF 170.77 FEET, THROUGHACENTRALANGLEOF 37° 55' 25";
THENCENORTH51° 01’.34”EAST,A DISTANCEOF 19.54 FEETTO A POINTONTHENORTH LINEOFSAID LOT 3, SAID POINTBEINGONTHESOUTHRIGHTOF WAYOF RANCHO JURUPADRIVE,HAVINGA HALFWIDTHOF 30.00 FEET,AS SHOWNONSAIDMAP; THENCESOUTH89° ,05' 29" EAST,ALONGSAIDNORTHLINE,A DISTANCEOF 1041.48 FEET TOTHE BEGINNINGOFATANGENTCURVECONCAVETO THESOUTHANDHAVINGA RADIUS3 OF 220.00 FEET;
THENCEEASTERLYALONGSAIDCURVE,ANARCDISTANCEOF 84.14 FEET,THROUGHA CENTRALANGLEOF 21° 54’ 51";
THENCESOUTH67° 10’38 EAST,A DISTANCEOF 57.56 FEETTO THEBEGINNINGOFA TANGENTCURVECONCAVETO THENORTHANDHAVINGA RADIUSOF 280.00 FEET; THENCESOUTHEASTERLYALONGSAIDCURVE,ANARCDISTANCEOF 67.98 FEET,THROUGHA CENTRALANGLEOF 13° 54’35”TO THEPOINTOF BEGINNING.

PARCEL14: (APN: 162-220-019;162-220-020;162-220-021;162-230-010;162-230-011;162- 230-
012; 162-230-013;162-230-014AND162-230-016)
LOT4, 5, 6, 7, 8 AND9 OF TRACTNO. 36822, INTHECITYOFJURUPAVALLEY,COUNTYOF RIVERSIDE, STATE OF CALIFORNIA, AS PERMAPRECORDEDIN BOOK465 OF MAPS,PAGES 69THROUGH73, INCLUSIVE, OF MAPS,INTHEOFFICEOF THECOUNTYRECORDEROF SAID COUNTY.

EXHIBIT “B”

MAP OF PROPERTY
A.i
‘PINTRSTATE do
M A

EXHIBIT “C”

EXISTING DEVELOPMENTAPPROVALS
Final Environmental Impact Report (SCH# 2004061026),including Environmental Assessment No. 01-04 and associated CEQAFindings, Statements of Overriding Consideration, the Comments and Response Document, and Mitigation, Monitoring Program for the StoneRidge Specific Plan
General Plan Amendment No. 02-04
Zoning Map Amendment N0. 02-04
;‘,,s_';;:;.i:‘Specific Plan 0. 01=04, “The StoneRidge Specific Plan” Vesting Tentative Map No. 32030
Tentative Map No. 32029
Development Agreement No. 01-04

EXHIBIT “D”

EXISTING LAND USE REGULATIONS
City of Desert Hot Springs Comprehensive General Plan, including all amendments up to and including General Plan Amendment No. 02-04
City of Desert Hot Springs Zoning Ordinance, Design Guidelines and Subdivision Ordinanceg including all amendments up to and including Zoning Map AmendmentNo. 02-04
Specific Plan N0. 01-04, “The StoneRidge Specific Plan”

EXHIBIT “E”

PERFORMANCE SCHEDULE
Date Performance Due Measured by
Anniversary Date of Recordation of First
Amendment to Development Agreement
5”‘Anniversary
10”‘Anniversary A
’ 15”‘Anniversary* ‘
" ——20‘?_An'niVersary:
-30?‘Anniversary “
-1
25“ Al’11’llVCI'S3.1‘y ’ E’ ’ V” " 7
"

3.5“:Anniversa_r’y1 < ,
40“ Anniversary ’r 7 1;
45“ Anniversary
Description of Cumulative Performance
Owner to have obtainedcerti?cates of
occupancy for at least 200 homes
Owner to have obtainedcerti?cates of
occupancy for at least400 homes
Owner to have obtainedcerti?cates of
occupancy for at least 600 homes
Owner to have obtainedcerti?cates of
occupancy for at least 800 homes
Owner to have obtainedcerti?catesof
occupancy for at least 1,000homes
Owner to have obtainedcerti?cates of
occupancy for at least 1,200 homes
Owner to have obtainedcertificatesof
occupancyfor at least 1,400 homes
Owner to have obtainedcerti?cates of
occupancy for at least 1,600homes
Owner to have obtainedcerti?cates of
occupancy for at least 1,746homes

I2I
E
II
EXHIBIT“F”

SCHEDULE OF FEES APPLICABLE TO EXISTING DEVELOPMENTAPPROVALS AND SUBSEQUENTDEVELOPMENTAPPROVALS AMOUT
§ E — . QUIMBYACT- PARKLANDDEDICATIONFEE § 7 LAWENFORCEMENT FACILITIESIMPACTFEE F FIREPROTECTIONIMPACTFEE V ‘
V . LAWENFORCEMENTFACILITIESIMPACTFEE

GENERALFACILITIESIMPACTFEE

CIRCULATIONSYSTEMIMPAGEFEE
0 DU 0.00 $0.00
‘ 565.00 $161,590.00
583.00 $166,738.00

0.00 $0.00
699.00 $199.914.00
STORMDRAINAGE 4466.00 01.277.276.00 IMPAGT~FEE":’. .
‘ COMMUNIWCENTER “£293.00 $055,798.00 IMPAO'I'v,FEE‘. 1' PARKLAND . $293,722.00 IMPAGTFEE(1) ; L ' AQUATICCENTERIMPACT $633,204.00 FEE5' '-' ..
$54,626.00
BUILDING&SAFE]! DEBT.DEVELQPMENT IMPACTEEES 8SA$RF FEE(GREENFEE) ' 3' ' '"“ STRONGMOTIONIMPLEMENTATION PROGRAM- SMIP ARTINPUBLICPLACESFEE~ ' - 52.86000

31.30 $8,951.60
1205.00 $344,630.00

SR-23-193
City of Desert Hot Springs
City Council

AGENDA ITEM REPORT
To: City Council
Date: September 5, 2023
Department: Administrative Services
Prepared by: Viviana Gonzalez-Osorio, Management Analyst Subject: Contracts Management Report as of August 15, 2023 RECOMMENDATION:

Receive and file.

DISCUSSION:

Of the FY 2023-2024 Consolidated General Fund adopted operating budget of 34.63 Million, 5.89 Million, or 17% is comprised of contract services. To facilitate management of the City’s contracts, a Contracts Management Report (Exhibit 1) has been developed and is submitted to the City Council for informational purposes. This report is comprised of operational contracts over $5,000.00 in support of daily City operations. This report assists staff in proactively administering contracts.

FISCAL IMPACT:

None.

ATTACHMENTS:

Exhibit 1 - Contracts Management Report as of August 15, 2023

City of Desert Hot Springs
Contracts Management Report
September 05, 2023
Balance as of August 15, 2023
Service/Commodity Provided Current
Contractor/ Consultant
Responsible
Department / Division
Annual Contract
Amount Total Contract Amount
Total
Contract
Remaining
Balance
Contract
Effective
Date
Contract Expiration
Date
JOHN H. FURBEE AQUATICS CENTER POOL SERVICES 1 STOP POOL PROS Public Works $ 152,134.56 $ 152,134.56 $ 152,134.56 7/1/2023 6/30/2024 CITY WIDE ZONE 1 & 3 LANDSCAPE SERVICES DESERT CONCEPTS CONSTRUCTION Public Works $ 276,556.80 $ 276,556.80 $ 276,556.80 7/1/2023 6/30/2026 CITYWIDE JANITORIAL SERVICES KELLER MEYER BERGENSONS SERVICES LLC Public Works $ 281,275.05 $ 281,275.05 $ 281,275.05 7/1/2023 6/30/2024 CITY WIDE ZONE 1 & 2 LANDSCAPE SERVICES MARIPOSA LANDSCAPES, INC. Public Works $243,612.12 $243,612.12 $243,612.12 7/1/2023 6/30/2026 CITYWIDE STREET SWEEPING SERVICES SWEEPING CORPORATION OF AMERICA Public Works $ 105,890.00 $ 105,890.00 $ 105,890.00 7/1/2023 6/30/2024 CITYWIDE TRAFFIC SIGNAL SERVICES YUNEX LLC Public Works $ 58,318.14 $ 58,318.14 $ 58,318.14 7/1/2015 6/3/2024 SPECIAL DISTRICT ADMIN SERVICES WEBB MUNICIPAL FINANCE LLC Admin Services Agreement for a period of (3)
years beginning FY23-24
and continue until FY25-26 Not
to exceed $278,496. $278,496 $272,096 7/1/2023 3/31/2026 PROPERTY TAX AUDIT SERVICES HDL COREN & CONE Admin Services Per Base Fixed Services Fee Per Base Fixed Services Fee $13,806 5/23/2017 6/30/2024 MARIJUANA DISPENSARY AUDIT SERVICES HINDERLITER, DELLAMAS & ASSOCIATES Admin Services Not to exceed $104,500 through
FY 23-24 $104,500 $21,000 10/26/2016 6/30/2024
AUDIT SERVICES THE PUN GROUP Admin Services
FY 2022-2023 Audit
$68,770 $68,770 5/18/2023
Contract expires after completion
of the FY 22-23 Audit
DEBRIS ABATEMENT PROGRAM DESERT VALLEY DISPOSAL (DVD) Admin Services $222,082 $222,082 $203,575 7/1/2023 6/30/2024 GRANT WRITING, RESEARCH & CONSULTING SERVICES EVAN BROOKS ASSOCIATES, INC. Admin Services $72,031 $72,031 $0 11/17/2020 Not to exceed annual dollar
amount
BANKING SERVICES UNION BANK/US BANK Admin Services
Per US Bank/ Union Bank Price
Schedule
Per US Bank/ Union Bank Price
Schedule N/A 5/19/2023 5/19/2028
SENIOR CENTER MANAGEMENT MIZELL SENIOR CENTER City Manager $ 225,506.00 $ 225,506.00 $ 210,150.00 3/1/2019 6/30/2024 GENERAL LEGAL SERVICES STREAM KIM City Manager Rate Schedule Rate Schedule Rate Schedule 7/1/2021 Open LITIGATION LEGAL SERVICES STREAM KIM City Manager Rate Schedule Rate Schedule Rate Schedule 7/1/2021 Open CANNABIS COMPLIANCE SERVICES CANNABIS COMPLIANCE SOLUTIONS Code & Compliance Per Rate Schedule - not to
exceed $217,914.96.

Month to Month
$18,159.58 per month N/A 7/1/2020 Month to Month

CODE ENFORCEMENT/VEH ABATEMENT CONTRACT
SERVICES PAMELA CHAFFIN Code & Compliance $50,000 $50,000 $46,721 8/1/2022 24 Hr. Termination Clause CODE ENFORCEMENT/ STVR CONTRACT SERVICES STEVEN EUGENE LIVINGS Code & Compliance $50,000.00 $50,000.00 $43,344 3/7/2023 24 Hr. Termination Clause Page 240 of 241 City of Desert Hot Springs
Contracts Management Report
September 05, 2023
Balance as of August 15, 2023
Service/Commodity Provided Current
Contractor/ Consultant
Responsible
Department / Division
Annual Contract
Amount Total Contract Amount
Total
Contract
Remaining
Balance
Contract
Effective
Date
Contract Expiration
Date

CODE ENFORCEMENT/COMPLIANCE OFFICER CONTRACT
SERVICES WILLDAN Code & Compliance $300,000.00 $300,000.00 $300,000 5/10/2023 24 Hr. Termination Clause FIRE SERVICES RIVERSIDE COUNTY FIRE DEPARTMENT City Manager TOTAL FOR EACH FY: 2021-
2022 $1,831,996 2022-2023
$1,948,842 2023-2024
$2,071,434 $5,852,272 $2,459,140 7/1/2021 7/30/2024
COUNCIL VIDEO AWESOME DUDE VIDEO City Manager / City Council NA NA NA 10/1/2012 Month to Month

LEGAL SERVICE LIEBERT CASSIDY
City Manager / Human
Resources Rate Schedule Rate Schedule Rate Schedule 2/4/2014 Month to Month TEMP SERVICES ROBERT HALF/OFFICE TEAM/CCOUNTEMPS Human Resources Rate Schedule Rate Schedule Rate Schedule 6/21/2022 Open TEMP SERVICES ATWORK PERSONNEL SERVICES Human Resources Rate Schedule Rate Schedule Rate Schedule 6/21/2022 Open TEMP SERVICES PROPER SOLUTIONS Human Resources Rate Schedule Rate Schedule Rate Schedule 6/21/2022 Open TEMP SERVICES LABOR FINDERS Human Resources Rate Schedule Rate Schedule Rate Schedule 6/21/2022 Open BUILDING PLAN CHECK INSPECTION SERVICES SCOTT FAZEKAS & ASSOCIATES Community Development $500,000 Annually plus
$100,000 contingency for a total
annual not to exceed of
$600,000. Not to Exceed $600,000 per year
$500,000 (not
including $100,000
contingency) 9/7/2021 6/30/2024

BUILDING PLAN CHECK INSPECTION SERVICES/ OFFICIAL
& CASP SERVICES WILLDAN ENGINEERING Community Development Contract Not to Exceed
$500,000. - Shall automatically
renew for (4) successive 1 year
terms until 2028
Not to Exceed $500,000 $500,000 6/20/2023 6/20/2028
PLAN CHECK SERVICES INTERWEST CONSULTING GROUP, INC. Community Development FY 18-19 Contract Not to
Exceed $500,000. - Shall
automatically renew for (4)
successive 1 year terms 2023
Not to Exceed $500,000 $0 2/5/2019 Pending
ENVIRONMENTAL SERVICES CHAMBERS GROUP, INC. Community Development Three (3) Year Contract that
started in FY 19-20, Contract
Amended to extend it to
2/7/2024 and increase it from
150K to 200K per year Not to Exceed $200,000 per year $200,000 7/1/2019 3/21/2024

EASTERN RIVERSIDE COUNTY INTEROPERABLE
COMMUNICATIONS AUTHORITY (ERICA) CITY OF INDIO Police
TOTAL 2015-2018:
$1,032,588.84, FY 2018-2019
$351,082.11, FY 2019-2020
$355,509.11 $1,739,180 $806,003 7/1/2015
Complete- Pending Final
Invoice
ANIMAL SERVICES COUNTY OF RIVERSIDE ANIMAL SERVICES Police Billed per rate schedules $36,000 $36,000 7/1/2020 6/30/2024 GRAFFITI REMOVAL GRAFFITI PROTECTIVE COATING Police $90,000 $90,000 $90,000 7/1/2022 6/30/2024 Page 241 of 241