Agenda packet — Eastvale City Council, October 9, 2024

REGULAR CITY COUNCIL MEETING AGENDA
Eastvale City Hall Council Chambers
12363 Limonite Avenue, Suite 900, Eastvale, CA 91752
Closed Session: 5:30 PM
Regular City Council Meeting:
6:30 PM
Wednesday, October
9, 2024

City Councilmembers
Christian Dinco, Mayor
Michael McMinn, Mayor Pro Tem
Clint Lorimore, Councilmember
Todd Rigby, Councilmember
Jocelyn Yow, Councilmember

Mark Orme, City Manager
Erica Vega, City Attorney
Marc Donohue, Government Services Director/City Clerk
This Agenda contains a brief general descrip)on of each item to be considered. Except as otherwise provided by law, no ac)on or direc)on shall be taken on any item not appearing on the following Agenda. Unless legally privileged, all suppor)ng documents, including staﬀ reports, and any wri)ngs or documents provided to a majority of the City Council a/er the pos)ng of this agenda are available for review at Eastvale City Hall, 12363 Limonite Avenue, Eastvale, CA 91752 or you may contact the City Clerk’s Oﬃce, at (951) 361-0900 Monday through Thursday from 7:30 a.m. to 5:30 p.m. and available online at www.eastvaleca.gov
.

Members of the public can observe the mee)ng by viewing the live-stream at www.eastvaleca.gov
and may provide public
comment by sending comments to the City Clerk's Oﬃce by email at [email protected]
. Staﬀ will monitor emails to the
extent possible during the mee)ng and provide comments as possible. All comments will be made part of the record. Comments will then be read into the record, with a maximum allowance of 3 minutes per individual comment, subject to the Mayor’s discre)on to reduce )me on public comment. All comments should be a maximum of 500 words, which corresponds to approximately 3 minutes of speaking )me. If a comment is received before the agenda item is heard but before the close of the mee)ng, the comment will all be included as a part of the record of the meeting but will not be read into the record.

In compliance with the Americans with Disabili)es Act, if you need special assistance to par)cipate in this mee)ng, you should contact the City Clerk’s Office at (951) 361-0900.

Regular mee)ngs are recorded and made available on the City’s website at www.eastvaleca.gov
. Mee)ng recordings are uploaded
to the City’s website within 24 hours (unless otherwise noted) after the completion of the meeting. 1 1.

CALL TO ORDER

2. ROLL CALL

3. CLOSED SESSION PUBLIC COMMENT

Any member of the public may address the Council on items within the Council’s subject maer jurisdicon, but which are not listed on this agenda during PUBLIC COMMENTS. However, no acon may be taken on maers that are not part of the posted agenda. We request comments made on the agenda be made at the me the item is considered and that comments be limited to three minutes per person with a maximum of six minutes (me may be donated by one person). Please address your comments to the Council and do not engaged in dialogue with individual Council Members, City staﬀ, or members of the audience. Blue speaker forms are available at the front table to the entrance of Council Chambers.

4. CLOSED SESSION ITEM(S)

4.1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section 54956.8) Property: Lot 3 of Tentative Tract Map 38290 approved by the City Council on May 11, 2022 Agency negotiator: Gustavo Gonzalez, Community Development Director Negotiating parties: Arroyo Cap III-2, LLC Under negotiation:

Price and terms of payment

5. INVOCATION

6. PLEDGE OF ALLEGIANCE

7. ADDITIONS/REVISIONS

The City Council may only add an item to the Agenda a2er making a ﬁnding that there is a need to take immediate acon on the item and that the item came to the aenon of the agency subsequent to the posng of the agenda. An acon adding an item to the agenda requires 2/3 vote of the Council. If there is less than 2/3 of the Council members present, adding an item to the agenda requires a unanimous vote. Added items will be placed for discussion at the end of each section unless otherwise noted.

8. PRESENTATIONS/ANNOUNCEMENTS

8.1. Recognition of Former Public Safety Commissioner Herbert Cirilo

8.2. Red Ribbon Week Proclamation

8.3. Code Enforcement Officer Appreciation Week Proclamation

8.4. Breast Cancer Awareness Month Proclamation

9. AGENCY PARTNER UPDATES

2 10.

PUBLIC COMMENT

Any member of the public may address the Council on items within the Council’s subject maer jurisdicon, but which are not listed on this agenda during PUBLIC COMMENTS. However, no acon may be taken on maers that are not part of the posted agenda. We request comments made on the agenda be made at the me the item is considered and that comments be limited to three minutes per person with a maximum of six minutes (me may be donated by one person). Please address your comments to the Council and do not engaged in dialogue with individual Councilmembers, City staﬀ, or members of the audience. Blue speaker forms are available at the front table to the entrance of Council Chambers.

11. CONSENT CALENDAR

Consent Calendar items are normally enacted in one moon. The Mayor or City Council may remove a Consent Calendar item for separate acon. If a member of the public would like to speak on a Consent Calendar item, please complete a blue “Public Comment Form” and submit to the City Clerk prior to the item.

11.1. City Council Meeting Minutes

Submitted by: Marc A. Donohue, Government Services Director/City Clerk

RECOMMENDED ACTION(S):

Staff recommends that the City Council approve the City Council meeting minutes from the regular meeting on September 25, 2024.

11.2. Acceptance of a Quitclaim Right-of-Way Dedication Deed from Chino Basin Desalter Authority for a Portion of a Parcel (APN 164-020-015) located at the Southwest corner of Sumner Avenue and Bellegrave Avenue

Submitted by: Jimmy Chung, Public Works Director/City Engineer

RECOMMENDED ACTION(S):

Staff recommends that the City Council adopt a Resolution authorizing the City Manager to accept the Quitclaim Right-of-Way Dedication Deed for a portion of a parcel (APN 164-020-015) from Chino Basin Desalter Authority and authorize the City Manager to execute the Dedication of Real Property Agreement with the Chino Basin Desalter Authority.

11.3. Approval of Contract Amendment with GeoCon West Inc. for the Geotechnical Investigation and Preparation of the Soils Report and Recommendations for the Potential Public Works Yard Site

Submitted by: Jimmy Chung, Public Works Director/City Engineer

3 RECOMMENDED ACTION(S):

Staff recommends that the City Council:

1 .

Approve the Contract Amendment with Geocon West Inc. (Geocon) to provide additional geotechnical services for an additional amount of $21,818.5, which is $19,835 plus 10% contingency of $1,983.50, for a total not-to-exceed amount of $41,818.50 which includes previously approved Environmental Site Assessment Phases 1 and 2 contract of $20,000; and,
2 .

Authorize the City Manager to execute all necessary documents.

11.4. Approval of Agreement with Bear Electric Solutions, Inc. for Citywide Streetlight Operation and Maintenance Services

Submitted by: Jimmy Chung, Public Works Director/City Engineer

RECOMMENDED ACTION(S):

Staff recommends that the City Council a
pprove a three-year service agreement with
Bear Electrical Solutions, Inc.
for Citywide Streetlight Operation and Maintenance
Services for a not-to-exceed amount of $85,000 per year and determine that compliance with formal bidding procedures is not in the best interest of the City pursuant to EMC Section 4.06.080(i) and authorize the City Manager to execute the necessary documents

11.5. Acceptance of Public Improvements of Parcel Map 37649 the Merge Project, The Merge Company, LLC – Located at the Northeast Corner of Limonite Avenue and Archibald Avenue.

Submitted by: Jimmy Chung, Public Works Director/City Engineer

RECOMMENDED ACTION(S):

Staff recommends that the City Council adopt a Resolution accepting as complete the Public Improvements for Parcel Map 37649 (The Merge, PW29-10011)

11.6. Approval & Adoption of Employer Sponsored Retirement Health Savings Program

Submitted by: Maricela Mejia, Assistant HR & Risk Management Director

RECOMMENDED ACTION(S):

Staff recommends that the City Council:

1 .

Approve the Adoption Agreement for a Retirement Health Savings Program through MissionSquare Retirement;
2 .

Adopt a Resolution Adopting the Retirement Health Savings Program; and 3 .

Authorize the City Manager to execute all necessary documents

4 12.

PUBLIC HEARINGS

The public is encouraged to express your views on any maer set for public hearing. It is our procedure to ﬁrst receive the staﬀ report, then to ask for public tesmony, ﬁrst from those in favor of the project followed by tesmony from those in opposion to it, and if there is opposion, to allow those in favor, rebual tesmony only as to the points brought up in opposion. To tesfy on the maer, you need to simply come forward to the speaker’s podium at the appropriate me, give your name and address and make your statement. A2er a hearing is closed, you may not further speak on the maer unless requested to do so or are asked quesons by the Mayor or a Councilmember. Public comment is limited to three (3) minutes each with a maximum of six (6) minutes (time may be donated by one speaker.)

13. CITY COUNCIL BUSINESS

13.1. Approval of the Purchase of Real Property for a Public Works Yard

Submitted by: Jimmy Chung, Public Works Director/City Engineer

RECOMMENDED ACTION(S):

Staff recommends that the City Council:

1 .

Approve the Agreement for Purchase and Sale of Real Property (Including Escrow Instructions) to acquire parcel numbers 144-080-010 and 144-080-011 located along the northside of Chandler Street, between Hellman Avenue and Hall Avenue, for a City Public Works Yard; and
2 .

Authorize the City Manager to sign the agreement and take all necessary actions to complete the purchase of the subject property, including but not limited to executing the certificate of acceptance of the grant deed; and 3 .

Authorize the City Manager to approve minor modifications to the form of Agreement prior to execution, with the consent of the City Attorney.

13.2. Business Incentive Loan Program Policy Revisions

Submitted by: Alexander Fung, Economic Development Manager

RECOMMENDED ACTION(S):

Staff recommends that the City Council review and adopt the revised Business Incentive Loan Program Policy.

13.3. Hamner Place Branding

Submitted by: Jimmy Chung, Public Works Director/City Engineer

RECOMMENDED ACTION(S):

Staff recommends that the City Council provide feedback, receive and file the presented update.

14. CITY MANAGER/CITY STAFF REPORT

15. CITY COUNCIL COMMUNICATIONS/COMMITTEE REPORTS

5 16.

ADJOURNMENT

The next regular mee)ng of the Eastvale City Council is scheduled for Wednesday, October 23, 2024, at 6:30 p.m. at Eastvale City Hall Council Chambers, 12363 Limonite Avenue, Suite 900, Eastvale, CA 91752.

17. AFFIDAVIT OF POSTING

I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing Agenda was posted at the following locations: City Hall, 12363 Limonite Avenue, Suite 910 and website of the City of Eastvale (
www.eastvaleca.gov
,) not less than 72 hours
prior to the meeting.

______________________________________________________
Marc A. Donohue, MMC
City Clerk

6 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 1

MINUTES

CITY OF EASTVALE

CITY COUNCIL REGULAR MEETING
Wednesday, September 25, 2024
Closed Session: 5:30 PM
Regular Meeting: 6:30 PM
City Hall Council Chambers
12363 Limonite Avenue, Suite 900
Eastvale, CA 91752

1. CALL TO ORDER
The regular meeting of the Eastvale City Council was called to order at 5:30 p.m. by Mayor Dinco.

2. ROLL CALL

Present: Councilmembers Lorimore, Rigby, Yow, Mayor Pro Tem McMinn, and Mayor Dinco.

Absent:

City Staff

Present: City Manager Orme, City Attorney Vega and Senior Management Analyst Cooper were present at Roll Call. Other staff members were present.

3. CLOSED SESSION PUBLIC COMMENT – None

4. CLOSED SESSION ITEM(S)

4.1 Conference with Legal Counsel – Anticipated Litigation (Gov't Code Sec. 54956.9(d)(2), (e)(5)) Number of cases:1
City Attorney Vega stated that there was no reportable action.

4.2 PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Government Code sec. 54957(b)(1)) Title: City Attorney
City Attorney Vega stated that there was no reportable action.

4.3 PUBLIC EMPLOYEE PERFORMANCE EVALUATION (Government Code sec. 54957(b)(1)) Title: City Manager
7 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 2
City Attorney Vega stated that there was no reportable action.

5. INVOCATION
Pastor James Turner from Eastvale Bible Church offered the invocation.

6. PLEDGE OF ALLEGIANCE

Councilmember Lorimore led the Pledge of Allegiance.

7. ADDITIONS/REVISIONS – None

8. PRESENTATIONS/ANNOUNCEMENTS

8.1 Recognition of Eastvale Little League Teams
Eastvale Little League 10U, 11U, and 12U Teams were recognized.

8.2 Childhood Cancer Awareness Month Proclamation
The Childhood Cancer Awareness Month proclamation was presented.

8.3 Hispanic Heritage Month Proclamation
The Hispanic Heritage Month proclamation was presented.

9. AGENCY PARTNER UPDATES

9.1 Eastvale Library Update
Eastvale Library Branch Manager Jamie Shin provided an update.

9.2 YMCA Update
Casey Christianson from the Corona-Norco Family YMCA provided an update.

9.3 Youth Council Update
Dev Raturi from the Youth Council provided an update.

9.4 Norco College Update
Dr. Monica Green from Norco College and Trustee Bill Hedrick from RCCD, provided an update.

10. PUBLIC COMMENT
Chris Shoults, candidate for California State Assembly - District 63, provided public comment. 8 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 3

11. CONSENT CALENDAR
On motion of Councilmember Rigby, second by Mayor Dinco, the City Council, and voted unanimously to approve the Consent Calendar.

11.1 City Council Meeting Minutes
The City Council approved the City Council meeting minutes from the regular meeting on September 11, 2024.

11.2 Warrant Register: July 2024
The City Council approved the payment of warrants as submitted by the Finance Department under Attachment 1.

11.3 Warrant Register: August 2024
The City Council approved the payment of warrants as submitted by the Finance Department under Attachment 1.

11.4 Treasurer’s Report: August 2024
The City Council received and filed the City Treasurer’s Report.

11.5 Planning Department Update
The City Council received and filed the Planning Department Update.

11.6 Public Works Department Update
The City Council received and filed the Public Works Department Update.

11.7 City of Eastvale Crime Statistics – July 2024
The City Council received and filed the Eastvale Crime Statistics for July 2024.

11.8 Award of Contracts for On-Call Consulting for Community Safety Department Services
The City Council:

1. Approved the recommended consultants to provide on-call professional services to the City as needed; and

2. Authorized the City Manager to execute agreements and any necessary documents for on-call professional services with the recommended consultants for one (1) three-year 9 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 4
period with the ability to renew for two (2) one-year extensions in the amount not-to- exceed $1,018,600.00 per contract.

11.9 Approval of a Purchase Order with Opengov for Cartegraph The City Council approved a purchase order with Opengov for Cartegraph, Public Works Asset Management Software, in the amount of $45,769.83 for FY24-25 annual subscription.

11.10 Approval of a Change Order for Task Order No. 13 for the Leal Plan Check Reviews for CSG Consultants
The City Council:

1. Approved a change order for Task Order 13 for the On-call Contract with CSG Consultants, Inc. for the plan check reviews of the Leal development project in the amount of $75,000; and

2. Authorized the City Manager to execute all necessary documents.

11.11 Adoption of Ordinance Prohibiting Camping and Storage of Personal Property in Public Places
The City Council City Council adopted Ordinance 24-08 entitled: AN ORDINANCE OF THE CITY OF EASTVALE ADDING CHAPTER 8.10 TO THE EASTVALE MUNICIPAL CODE PROHIBITING CAMPING AND STORAGE OF PERSONAL PROPERTY IN PUBLIC PLACES.

11.12 Adoption of Ordinance Prohibiting Camping and Storage of Personal Property in Public Places
The City Council City Council adopted Ordinance 24-07 entitled: AN ORDINANCE OF

THE CITY COUNCIL OF THE CITY OF EASTVALE, CALIFORNIA, AMENDING SECTION 120.04.010 (ACCESSORY DWELLING UNITS) OF THE EASTVALE MUNICIPAL CODE.

12. PUBLIC HEARINGS – None

13. CITY COUNCIL BUSINESS

13.1 Civic Schedule Update
Public Works Director/City Engineer Chung, Finance Director/City Treasurer Wells, and Community Development Director Gonzalez provided a PowerPoint presentation and answered related questions.

Mayor Dinco opened the public comment period. Hearing no response, Mayor Dinco closed the public comment period.
10 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 5
The City Council received and filed the presentation.

13.2 Consideration of Support for Riverside Community College District Bond Measure Councilmember Yow recused herself from hearing the item.

Senior Management Analyst Cooper introduced the item. Dr. Monica Green from Norco College and Trustee Bill Hedrick from RCCD answered related questions.

Mayor Dinco opened the public comment period. Hearing no response, Mayor Dinco closed the public comment period.

On motion of Mayor Dinco and second by Mayor Pro Tem McMinn, the City Council voted 3-0-2 to adopt Resolution 24-60, supporting the Riverside Community College District Bond Measure. Councilmembers Lorimore and Yow were noted as abstentions.

14. CITY MANAGER/CITY STAFF REPORT
City Manager Orme provided an update on upcoming City events.

15. CITY COUNCIL COMMUNICATIONS/COMMITTEE REPORTS

15.1 League of California Cities
No report was provided.

15.2 Southern California Association of Governments
Councilmember Lorimore provided a report.

15.3 Western Riverside Council of Governments
Mayor Dinco provided a report.

15.4 Riverside Transit Agency
Councilmember Yow provided a report.

15.5 Northwest Mosquito and Vector Control District
Councilmember Lorimore provided a report.

15.6 Riverside County Transportation Commission
Councilmember Lorimore provided a report.

15.7 Western Riverside County Regional Conservation Authority No report was provided.
11 Eastvale City Council Meeting Minutes
September 25, 2024 Page - 6

15.8 Finance Committee
No report was provided.

15.9 Eastvale Schools Committee
No report was provided.

15.10 Business and Development Success Ad-Hoc Committee Councilmember Rigby provided a report.

15.11 Eastvale Legislative Ad-Hoc Committee
No report was provided.

15.12 Eastvale Community Services Ad-Hoc Committee
No report was provided.

15.13 City Council Communications
The City Council provided comments.

ADJOURNMENT – Mayor Dinco adjourned the regular meeting at 9:17 P.M. The next regular meeting of the Eastvale City Council is scheduled for Wednesday, October 9, 2024, at 6:30 P.M.

Jessica Cooper, MMC
Senior Management Analyst
12 AGENDA STAFF REPORT

City Council Meeting

CONSENT CALENDAR

Agenda Item No. 11.2
October
9, 2024
Acceptance of a Quitclaim Right-of-Way Dedica-on Deed from Chino Basin Desalter Authority for a Por-on of a Parcel (APN 164- 020-015) located at the Southwest corner of Sumner Avenue and Bellegrave Avenue
Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staﬀ recommends that the City Council adopt a Resolu on authorizing the City Manager to accept the Quitclaim Right-of-Way Dedica on Deed for a por on of a parcel (APN 164-020-015) from Chino Basin Desalter Authority and authorize the City Manager to execute the Dedica on of Real Property Agreement with the Chino Basin Desalter Authority.

Summary
During the February 9, 2023 Strategic Workshop, one of Council's Ac on/Schedule as part of Priority #2, Target #B, Goal #C, was to "Develop branding and iden ty for Eastvale". Staﬀ iden ﬁed a possible monument loca on on the south west corner of Sumner and Bellegrave. The proposed monument loca on is on the parkway area adjacent to an exis ng CDA well site. The exis ng property is currently own by Chino Desalter Authority (CDA) and city staﬀ coordinated with CDA to dedicate a portion of the property in question to the City of Eastvale.

Background
The City of Eastvale approached the CDA during the design of the Chino II well II-1 improvement project to request and coordinate a dedica on of a por on of the property for a future city monument. The Well II-1 project included installing a wall on the north side of the property and 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
13 paving. The property being requested did not impede the opera on of the well, so the ﬁnal design accommodated the request. Under normal condi ons, landscaping would be required on the street sides of the facility. The following condi ons were approved by the CDA Board and City's Ad Hoc CommiFee: City will install and maintain landscaping along the frontage, while the CDA will provide the irriga on water and 500 waFs of electricity for Irriga on controller and the monument ligh ng.

The City would also reimburse the CDA $5,400 for cost sharing of the prepara on of the map and legal description for the dedication.

Environmental
The dedica on of open space is considered to be exempt from CEQA by Sec on 15061(b)(3) since the proposed dedication to the City would not have a significant impact on the environment.

Strategic Plan Action - Priority Level: 2
| Target #: B
| Goal #: C
Develop branding and Identity for Eastvale
Fiscal Impact
The City will reimburse CDA $5,400 for the shared cost of the prepara on of the map and legal description. The city will use account 210-510-6660-94010 for the reimbursement.

Prior City Council/Commission Action
On September 27, 2023 City Council received the presenta on on the update to the Eastvale Entryway Masterplan and provided feedback on the options for monument signs.

Attachment(s)
Attachment 1 - Agreement and Exhibits
Attachment 2 - Resolution
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
14 4861-9442-0269v13/024429-0000

DEDICATION OF REAL PROPERTY AGREEMENT
This DEDICATION OF REAL PROPERTY AGREEMENT (this “Agreement”) is made and entered into as of August __, 2024 (the “Effective Date”), by and between CITY OF EASTVALE, a California municipal corporation (the “Grantee”), and the CHINO BASIN DESALTER AUTHORITY, a joint powers authority (the “Grantor”), with respect to the following facts and circumstances:

R E C I T A L S
A. The Grantor is a joint powers authority organized and existing under the Joint Exercise of Powers Act (Cal. Gov’t Code § 6500 et seq.).

B. The Grantor is the fee owner of certain real property situated within the jurisdictional boundaries of the Grantor, which property is more particularly described in Exhibit “A” and the Plat Map in Exhibit “B” attached hereto (the “Property”).

C. The Grantee desires to acquire a portion of the Property and the Grantor desires to convey the portion of the Property to the Grantee upon the terms and conditions set forth in this Agreement.

D. Each of the Grantor and the Grantee has determined that the “Designated Work”, as defined in Exhibit “C,” attached hereto, to be performed by the Grantee, including labor and materials, represents value equivalent to the fair value of the portion of the Property to be dedicated. The Designated Work includes ongoing obligations that Grantor and Grantee agree to continue to perform after the conveyance of the Property.

NOW, THEREFORE, with reference to the foregoing Recitals, in consideration of the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantor and Grantee hereby agree as follows:

1. Conveyance. Subject to the satisfaction of the Conditions Precedent described in Section 2, the Grantor agrees to convey the Property to the Grantee by way of Dedication Deed, and the Grantee agrees to acquire the Property, upon the terms and conditions set forth herein in consideration for the provision of the Designated Work.

2. Conditions Precedent to Conveyance of the Property. The conditions precedent described in this Section below are referred to herein as the “Conditions Precedent.” a. Conditions Precedent to Grantor’s Obligations. Grantor’s obligation to convey the Property to Grantee under this Agreement is subject to the timely satisfaction of the Conditions Precedent set forth in this Section for Grantor’s benefit (or Grantor’s waiver thereof, it being agreed that Grantor may waive any or all of such conditions) on or prior to the dates designated below for the satisfaction of such conditions. i. Grantee shall not have terminated this Agreement within its rights under this Agreement;
ii. Grantor shall not have terminated this Agreement within its rights under this Agreement;
15 4861-9442-0269v13/024429-0000
iii. No material adverse change shall have occurred to the physical and environmental condition of the Property after the Effective Date of this Agreement or, if the physical or environmental condition of the Property has materially changed, Grantee shall have approved the physical and environmental condition of the Property; and
iv. Grantee shall have paid the costs to prepare the legal description of the Property, set forth in Exhibit “A” attached hereto. The cost to prepare the legal description is $5,400 which shall be paid at execution of this Agreement. b. Conditions to Grantee’s Obligations. Grantee’s obligation to consummate the transaction contemplated by this Agreement is subject to the timely satisfaction of the Conditions Precedent set forth in this Section for Grantee’s benefit (or Grantee’s waiver thereof, it being agreed that the Grantee may waive any or all of such conditions) on or prior to the dates designated below for the satisfaction of such conditions. If Grantee timely terminates this Agreement in writing due to the failure of any of such conditions which are not the result of Grantee’s default under this Agreement, then Grantee shall be relieved of all further obligations and liabilities under this Agreement.
i. Grantee shall not have terminated this Agreement within its rights under this Agreement;
ii. Grantor shall not have terminated this Agreement within its rights under this Agreement;
iii. Each of Grantee and Grantor shall have accepted and approved the transaction contemplated by this Agreement;
iv. No material adverse change shall have occurred to the physical and environmental condition of the Property after the Effective Date of this Agreement or, if the physical or environmental condition of the Property has materially changed, Grantee shall have approved the physical and environmental condition of the Property; and
v. Grantor shall have paid the costs to prepare the dedication document.

3. Ongoing Obligations. Grantee agrees that Grantee shall have the ongoing obligation to pay for the installation and maintenance of landscaping and irrigation system on the Property. Grantor agrees that Grantor shall have the ongoing obligation to provide the water for the landscaping and provide 500 watts of electricity for the lighting of the monument and the irrigation controller.

4. 5. Right-of-Way Dedication Deed. Within ten (10) Business Days after execution of this Agreement, Grantor shall record a deed (the “Dedication Deed”), in the form attached hereto as Exhibit “E,” duly executed by Grantor.

6. Notices. All notices, demands, requests or other communications required or permitted hereunder (collectively, “Notices”) shall be in writing, shall be addressed to the receiving party as provided in this paragraph, and shall be personally delivered, sent by overnight mail (Federal Express or another carrier that provides receipts for all deliveries), sent by certified mail, postage prepaid, return receipt requested. All Notices shall be effective upon receipt at the appropriate address. For the purposes hereof, the addresses of the parties (until notice of a change thereof given in writing to the other party) shall be as follows:
16 4861-9442-0269v13/024429-0000
If to Grantee: City of Eastvale
Attention: City Manager
12363 Limonite Avenue, Suite 910
Eastvale, California 91752
If to Grantor: Chino Basin Desalter Authority
Attention: General Manager
3550 E. Philadelphia Street, Suite 170
Ontario, California 91761
[email protected]
With Copy to: Stradling Yocca Carlson & Rauth
Attention: Allison Burns, Esq.
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
[email protected]

7. Brokers . Each Party represents that it has engaged no private parties as consultants, finders or real estate brokers in connection with the exchange contemplated in this Agreement, and no brokerage commission, finder’s fee or other compensation of any kind is due or owing to any person or entity in connection with this Agreement. Each Party agrees to and does hereby indemnify and hold the other Party free and harmless from and against any and all costs, liabilities or causes of action or proceedings which may be instituted by any broker, agent or finder, licensed or otherwise, claiming through, under or by reason of the conduct of the indemnifying Party in connection with this Agreement.

8. Waiver, Consent and Remedies. Each provision of this Agreement to be performed by the Parties shall be deemed both a covenant and a condition and shall be a material consideration for the Grantor’s and the Grantee’s performance hereunder, as appropriate, and any breach thereof by the Grantor or the Grantee shall be deemed a material default hereunder. Either Party may specifically and expressly waive in writing any portion of this Agreement or any breach thereof, but no such waiver shall constitute a further or continuing waiver of a preceding or succeeding breach of the same or any other provision. A waiving Party may at any time thereafter require further compliance by the other Party with any breach or provision so waived.

The consent by one Party to any act by the other for which such consent was required shall not be deemed to imply consent or waiver of the necessity of obtaining such consent for the same or any similar acts in the future. No waiver or consent shall be implied from silence or any failure of a Party to act, except as otherwise specified in this Agreement. All rights, remedies, undertakings, obligations, options, covenants, conditions and agreements contained in this Agreement shall be cumulative and no one of them shall be exclusive of any other. Except as otherwise specified herein, either Party hereto may pursue any one or more of its rights, options or remedies hereunder or may seek damages or specific performance in the event of the other Party’s breach hereunder, or may pursue any other remedy at law or equity, whether or not stated in this Agreement.

9. Cooperation. Grantor and Grantee agree to execute such instruments and documents and to diligently undertake such actions as may be required in order to consummate the conveyance herein contemplated.
17 4861-9442-0269v13/024429-0000

10. Remedies. Without limitation as to the availability of other remedies, this Agreement may be enforced by an action for specific enforcement.

11. Time. Time is of the essence of every provision herein contained.

12. Counterparts; Facsimile Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute but one and the same instrument. A facsimile signature shall be deemed an original signature.

13. Captions. Any captions to, or headings of, the sections or subsections of this Agreement are solely for the convenience of the Parties, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreement or any provision hereof.

14. Third Party Rights. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties to this Agreement to, any person or entity other than the Parties.

15. Amendment. The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each Party.

16. Applicable Law. This Agreement shall be governed by and construed in accordance with the local law of the State of California.

17. Exhibits. The exhibits attached hereto are incorporated herein by this reference for all purposes.

18. Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between, and the final expression of, the Parties with respect to the subject matter hereof. The Parties hereto expressly agree and confirm that this Agreement is executed without reliance on any oral or written statements, representations or promises of any kind which are not expressly contained in this Agreement. No subsequent agreement, representation or promise made by either Party, or by or to an employee, officer, agent or representative of either Party shall be of any effect unless it is in writing and executed by the Party to be bound thereby.

19. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the permitted successors and assigns of the Parties.

20. Assignment. Neither Party may assign its rights under this Agreement without the prior consent of the other Party.

In WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

Grantor:
18 4861-9442-0269v13/024429-0000
Chino Basin Desalter Authority, a joint powers
authority
By:____________________
Its:_____________________
Date:___________________
Grantee:

City of Eastvale
By:____________________
Its:_____________________
Date:___________________
19 4861-9442-0269v13/024429-0000
EXHIBIT “A”

LEGAL DESCRIPTION OF THE PROPERTY
20 4861-9442-0269v13/024429-0000
21 4861-9442-0269v13/024429-0000
22 4861-9442-0269v13/024429-0000
EXHIBIT “B”

PLAT MAP OF THE PROPERTY
23 4861-9442-0269v13/024429-0000
EXHIBIT “C”

DESIGNATED WORK
Grantee agrees to provide and pay for the installation and maintenance of landscaping and irrigation system on the Property. Grantee agrees to construct the monument and associated facilities. Grantor agrees to provide the water for the landscaping and 500 watts of electricity for the lighting of the monument and the irrigation controller.
24 4861-9442-0269v13/024429-0000
Exhibit “D”
Landscape Area
25 4861-9442-0269v13/024429-0000
EXHIBIT “E”

RIGHT-OF-WAY DEDICATION DEED
Recording Requested By and
When Recorded Mail To:

City Clerk
City of Eastvale
12363 Limonite Avenue, Suite 910
Eastvale, CA 91752
This document is exempt from the payment of a
recording fee pursuant to Gov’t Code § 6103.

Project Name:

Project No.:

Parcel Map No.:

OK to Accept: Resolution No. _____________
Date: ___________
CHINO BASIN DESALTER AUTHORITY, a joint powers authority (“Grantor”), does hereby remise, release and forever quitclaim unto the CITY OF EASTVALE, a California municipal corporation (“Grantee”), all of Grantor’s right, title and interest in and to that certain real property located in the City of Eastvale, County of Riverside, State of California, that is more particularly described on Exhibit “A” attached hereto and incorporated herein and depicted on Exhibit “B” attached hereto and incorporated herein (the “Property”).

RESERVING THEREFROM unto Grantor a perpetual non-exclusive easement for the maintenance, operation, replacement, reconstruction, removal, renewal and/or enlargement of its present and future facilities over, under and across the entirety of the Property (“Easement”). Grantor agrees to provide reasonable notice and apply for a city of Eastvale No Fee Encroachment Permit prior to Grantor’s use of the Easement to reconstruct, maintain, replace, remove, or enlarge its present or future facilities on the Property. Grantee’s improvements shall not be constructed or installed so as to damage Grantor’s facilities.

SUBJECT TO Grantee’s continuing obligation to maintain the landscaping and irrigation system on the Property, and Grantor’s continuing obligation to provide (i) water for the landscaping and (ii) 500 watts of electricity for the monument lighting and irrigation controller.

CHINO BASIN DESALTER AUTHORITY,
a joint exercise of powers agency
By:

Name: Thomas O’Neill
Title: General Manager/CEO
26 4861-9442-0269v13/024429-0000
State of California )
) ss
County of ___________ )
On , before me, __________________________________________, (Name of Notary)
notary public, personally appeared ______________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.
(Notary Signature)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 27 4861-9442-0269v13/024429-0000

CERTIFICATE OF ACCEPTANCE
In accordance with California Government Code Section 27281, this is to certify that the interest in real property conveyed by the Right-of-Way Dedication Deed dated _______________, 202_, from CHINO BASIN DESALTER AUTHORITY, a joint powers authority (“Grantor”) to the CITY OF EASTVALE (“Grantee”), is hereby accepted by the undersigned officer or agent on behalf of the Grantee pursuant to authority conferred by Resolution No. _____, dated ________________, 202_.

Date: ________________, 202_ “Grantee”

CITY OF EASTVALE
State of California )
) ss
County of ___________ )
On , before me, __________________________________________, (Name of Notary)
notary public, personally appeared ______________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EASTVALE, CALIFORNIA,

AUTHORIZING THE CITY MANAGER TO ACCEPT THE QUITCLAIM RIGHT-OF-WAY DEDICATION DEED FOR APN 164-020-015, LOCATED AT THE SOUTHWEST

CORNER OF SUMNER AVENUE AND BELLEGRAVE AVENUE, FROM CHINO BASIN

DESALTER AUTHORITY
NOW, THEREFORE, BE IT RESOLVED AND ORDERED, that, in accordance with California Government Code Section 27281, the City Council of the City of Eastvale hereby authorizes the City Manager to accept a Quitclaim Right-of-Way Dedication Deed substantially in the form attached hereto as Exhibit A from the Chino Basin Desalter Authority and within the City of Eastvale; and
BE IT FURTHER RESOLVED that the City Manager is authorized to execute any documents and take all action necessary to complete the acceptance and recordation of the quitclaim right-of-way dedication deed.

PASSED, APPROVED AND ADOPTED this 9th day of October, 2024. __________________________________________
Christian Dinco
Mayor
APPROVED AS TO FORM: ATTEST:
__________________________________________ __________________________________________ Erica Vega Marc A. Donohue, MMC
City Attorney City Clerk
29 STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) §

CITY OF EASTVALE )

I, Marc A. Donohue, City Clerk of the City of Eastvale, California, do hereby certify that the foregoing City Council Resolution No. 24-XX, was duly adopted by the City Council of the City of Eastvale, California, at a meeting held on the 9th day of October 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________________________
Marc A. Donohue, MMC
City Clerk
30 AGENDA STAFF REPORT

City Council Meeting

CONSENT CALENDAR

Agenda Item No. 11.3
October
9, 2024
Approval of Contract Amendment with GeoCon West Inc. for the Geotechnical Inves/ga/on and Prepara/on of the Soils Report and Recommendations for the Potential Public Works Yard Site Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staff recommends that the City Council:

1 .

Approve the Contract Amendment with Geocon West Inc. (Geocon) to provide addi)onal geotechnical services for an addi)onal amount of $21,818.5, which is $19,835 plus 10% con)ngency of $1,983.50, for a total not-to-exceed amount of $41,818.50 which includes previously approved Environmental Site Assessment Phases 1 and 2 contract of $20,000; and, 2 .

Authorize the City Manager to execute all necessary documents.

Summary
Public Works Yard is a facility where all maintenance and construc)on related equipment and associated infrastructure supplies and parts are stored. It also provides oﬃce, mee)ng, locker room, and break space for all maintenance, inspec)on, and other ﬁeld staﬀ. To acquire a property for future Public Works Yard, an Environmental Site Assessment (ESA) phase 1 should be performed prior to purchasing the property, to determine whether or not any environmentally hazardous material exist on site. If phase 1 assessment determines hazardous material exists, addi)onal tes)ng (phase 2) is required to assess severity and mitigation measures.

GeoCon, an expert in this ﬁeld, has provided a fee to provide this service for a lump sum fee of 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752 951.361.0900 |
eastvaleca.gov
31 $19,835 for the geotechnical tes)ng and repor)ng. With 10% con)ngency, and previously approved $20,000 for the ESA Phase 1 and 2, the total not to exceed amount for the amended contract is $41,818.50.

Background
The Public Works Team is commiBed to the maintenance and opera)on of the City of Eastvale’s infrastructure. This includes ensuring the safety and quality of: streets, sidewalks, traﬃc signals, street lights, traﬃc signs, and storm drain inlets. Through ini)a)ves such as the Capital Improvement Program, we ac)vely improve the City’s infrastructure. Our mission is to keep the ameni)es that make Eastvale a premiere loca)on to live and raise a family and we work hard to make sure the needs of Eastvale residents are met and exceeded every single day.

In order to perform daily du)es more eﬀec)vely and eﬃciently, it is crucial to have the maintenance yard. Several locations have been considered for future Public Works Yard.

On December 13, 2023, Council approved the contract with Geocon for Environmental Site Assessment (ESA) for a not to exceed amount of $20,000 for phase 1 ($4,200) and con)ngency for phase 2 ($15,800) pending results from phase 1.

Staﬀ nego)ated the sales price of the proper)es and the approval of the Purchase and Sale Agreement is a separate agenda item for Council approval.

Once that agreement is approved, staﬀ will proceed with remaining due diligence before closing escrow, such as preparing an ALTA survey, geotechnical tes)ng and report (this Council approval) , and possible ESA Phase 2.

Environmental
Pursuant to Sec)on 15378 of the CEQA Guidelines, the item is not considered a project, thus, no environmental review is required.

Strategic Plan Action - Priority Level: 1
| Target #: E
| Goal #: A
The proposed contract contribute to the development of a Public Works Yard that will support the maintenance of Downtown Eastvale, Civic Center, Library, Civic Park, and a Police Sta)on which can signiﬁcantly aBract businesses and retailers to establish their presence in the City and create a “Destination Eastvale” with high-quality and unique businesses Develop and Construct Civic Center Fiscal Impact
The total ﬁscal impact for the contract is $41,818.50.

There is suﬃcient budget in the General Fund,
account number
100-320-6490,
in order to cover the full cost of the professional services agreement
.

Prior City Council/Commission Action
There is no prior City Council/Commission Action on this item.

Attachment(s)
Attachment 1 - Professional Services Agreement

12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
32 33
34 35
36 37
38 39
40 AGENDA STAFF REPORT

City Council Meeting

CONSENT CALENDAR

Agenda Item No. 11.4
October
9, 2024
Approval of Agreement with Bear Electric Solu-ons, Inc. for Citywide Streetlight Operation and Maintenance Services Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staff recommends that the City Council a
pprove a three-year service agreement with
Bear Electrical
Solu#ons, Inc.
for Citywide Streetlight Opera#on and Maintenance Services for a not-to-exceed amount of $85,000 per year and determine that compliance with formal bidding procedures is not in the best interest of the City pursuant to EMC Sec#on 4.06.080(i) and authorize the City Manager to execute the necessary documents

Summary
In December 2014, the Western Riverside Council of Governments (WRCOG) developed and administered a program that assisted the City with energy savings and u#lity costs associated with streetligh#ng. The program allowed the City to purchase eligible streetlights from Southern California Edison (SCE) with WRCOG providing opera#ons and maintenance (O&M) services. The current contract between WRCOG and the City expires on June 30, 2024.

EMC Sec#on 4.06.070 requires compe##ve, formal bidding procedures to be u#lized to award contracts for nonprofessional services of $25,000 or greater, and for the contract to be awarded to the lowest responsive, responsible bidder. City staﬀ did not follow these procedures. Instead, an RFP that substan#ally mirrored the RFP issued by WRCOG for the same services was prepared and published. EMC Sec#on 4.06.080(i) allows the City Council to approve an exemp#on from formal bidding requirements if it determines the exemp#on is in the best interest of the City. Staﬀ is reques#ng that the Council approve an exemp#on for this procurement on the basis that a compe##ve process was used (an RFP rather than a No#ce Invi#ng Bids) and to re-do the 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752 951.361.0900 |
eastvaleca.gov
41 procurement at this point in time may put the City at a competitive disadvantage.

A signiﬁcant amount, approximately half of the cost of the rendered services by the vendor, are expected to be reac#onary measures to incidentals and accidents that cannot be predicted.

Incidentals and accidents such as inclement weather, u#lity service provider disrup#ons, vehicular crashes, etc. As such, it would be impossible to accurately prepare a bid list of itemized quan##es of required services for vendors to bid.

Background
The City solicited proposals from professional consul#ng ﬁrms to provide Citywide streetlight maintenance and opera#ons services. A request for proposals (RFP) was posted on PlanetBids and the City's website on April 11, 2024. A total of ﬁve (5) proposals were received from qualiﬁed ﬁrms, City staﬀ reviewed bid proposals and evaluated them based on the demonstra#on of technical competency, project approach, understanding of project scope, and relevant project experience.

AEer careful review and evalua#on, Bear Electrical Solu#ons, Inc. (Bear), was selected as the top- ranked ﬁrm. Established in 2013, Bear has been providing similar services to public municipali#es throughout California. Bear has successfully delivered similar projects in the cities of Newport Beach, Fountain Valley, and Tustin.

The contract services include, but are not limited to, rou#ne maintenance including repair and replacement of damaged/inoperable ﬁxture material, photocell repair and maintenance, and quarterly review of system opera#on; and extraordinary street light maintenance du#es including 24/7 emergency response and pole knockdown repair for all streetlights owned and operated by the City (approximately 4,323 street pole totaling 4,357 light bulbs). The scope also includes providing record documents and upda#ng GIS system, providing a call-center and online work order management system, providing a storage facility and other additional services.

Based on historical expenditure, $70,000 is the es#mated annual cost.

The average cost for
streetlight O&M services for the last four (4) ﬁscal years has been approximately $35,618.13. The average cost of extra-ordinary services, such as streetlight knockdowns, has been approximately $28,916.76. Because the price of costs and services has increased, the es#mated annual cost for FY 24/25 is
$85,000.

The proposed agreement for streetlight maintenance and opera#ons services is included with this report as AIachment 1. The proposed term of the agreement is for three (3) years, beginning July 1, 2024, with an option to extend for up to two (2) additional one (1) year terms.

Environmental
The miscellaneous maintenance work is not considered a project under a California Environmental Quality Act (CEQA) due to the ac#vity not resul#ng in a direct or reasonably foreseeable indirect physical change in the environment.

Strategic Plan Action - Priority Level: N/A
| Target #: E
| Goal #: E
Plan for landscape, roads, and street maintenance.

Fiscal Impact 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752 951.361.0900 |
eastvaleca.gov
42 The Fiscal Year 2024-2025 Opera#ng Budget recommends $135,000 for Street Light Maintenance under General Fund account 100-500-6439. There is sufficient budget to complete these services.

Prior City Council/Commission Action
There is no prior City Council or Commission action on this item.

Attachment(s)
Attachment 1 - Draft Agreement

Attachment 2 - Cost Proposal
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
43 1

AGREEMENT FOR MAINTENANCE / REPAIR / MINOR CONSTRUCTION SERVICES

BETWEEN

THE CITY OF EASTVALE, CALIFORNIA
AND
BEAR ELECTRICAL SOLUTIONS, INC.

This Agreement for Maintenance / Repair / Minor Construction Services (“Agreement”) is entered into as of October 9, 2024 (“Effective Date”) between the City of Eastvale, a municipal corporation (“ City”) and Bear Electrical Solutions, Inc.

Contractor”) (collectively the “Parties”). In consideration of the mutual promises and covenants made by the parties and contained here and other consideration, the value and adequacy of which are hereby acknowledged, the parties agree as follows:

SECTION 1. SCOPE OF SERVICES

1.1 Term. Subject to the provisions of Section 8 [Termination] of this Agreement, the term of this Agreement is for three (3) years commencing on the Effective Date (“Term”) with an option to extend for up to two (2) additional one (1) year terms.

1.2 Contractor Services . Subject to the terms and conditions of this Agreement, Contractor agrees to perform for City those services specified in the Scope of Services attached hereto and incorporated herein by reference as Exhibit “A” [Scope of Services] (“Services”). Contractor agrees to furnish, for the compensation provided for herein, all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately perform and complete the Services. The Services shall be subject to inspection and approval by City. Contractor agrees to work closely with City staff in the performance of the Services and shall be available to City’s staff and consultants at all reasonable times.

1.3 Extra Work . Contractor shall not be compensated for any work or services rendered in connection with its performance of this Agreement, which are in addition to or outside of the Services (“ Extra Work”), except as expressly provided for herein. It shall be Contractor’s responsibility to ensure that the scope and price of any Extra Work to be performed by Contractor is approved by City in writing in advance of Contractor’s commencement of the Extra Work in accordance with Section 9.10 [Amendments] and Section 9.19 [Administration and Implementation]. City shall not be obligated to pay for or otherwise be liable for unauthorized Extra Work performed by Contractor.

1.4 Schedule of Performance . Contractor agrees to diligently perform and complete the Services in accordance with the schedule of performance attached hereto and incorporated herein by reference as Exhibit “B” [Schedule of Performance] (“Schedule of Performance ”). Modifications to the Schedule of Performance must be 44 2
agreed upon in writing in advance by the City Manager pursuant to Section 9.19 [Administration and Implementation] and Contractor.

1.5 General Warranty . Contractor warrants all Services under this Agreement (which for purposes of this Section shall be deemed to include unauthorized Extra Work which has not been removed and any non-conforming materials incorporated into the Services) to be of good quality and free from any defective or faulty material and workmanship. All warranties and guarantees of subcontractors, suppliers and manufacturers with respect to any portion of the Services, whether express or implied, are deemed to be obtained by Contractor for the benefit of City, regardless of whether or not such warranties and guarantees have been transferred or assigned to City by separate agreement and Contractor agrees to enforce such warranties and guarantees, if necessary, on behalf of City.

1.6 Repair of Defects . Contractor agrees that for a period of one (1) year from and after final acceptance of the Services, or in any guarantee or warranty provided by any manufacturer or supplier of equipment or materials incorporated into the Services, whichever is later, Contractor shall within ten (10) days after being notified in writing by City of any defect in the Services or non-conformance of the Services, commence and prosecute with due diligence all work and services necessary to fulfill the terms of the warranty at its sole cost and expense. In addition, Contractor shall, at its sole cost and expense, repair and replace any portions of the work, facilities, fixtures, or materials damaged by its defective Services or which becomes damaged in the course of repairing or replacing defective Services. For any Services so corrected, Contractor's obligation hereunder to correct defective Services shall be reinstated for an additional one year period, commencing with the date of acceptance of such corrected Services. Contractor shall perform such tests as City may require to verify that any corrective actions are adequate to remedy the defective condition. In the event that Contractor fails to perform its obligations under this Section to the reasonable satisfaction of City, then City shall have the right to correct and replace any defective, non-conforming, or damaged Services at Contractor's sole expense. Contractor shall be obligated to fully reimburse City for any expenses incurred hereunder upon demand.

1.7 Contractor’s Representative . Contractor hereby designates the representative named in Exhibit “D” [Representatives], or his or her designee, to act as its representative for the performance of this Agreement (“ Contractor’s Representative”). Contractor’s Representative shall have full authority to represent and act on behalf of the Contractor for all purposes under this Agreement. Contractor’s Representative shall supervise and direct the Services, using his or her best skill and attention, and shall be responsible for all means, methods, techniques, sequences and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

1.8 Contract Documents. The following documents shall be referred to collectively as the "Contract Documents," each of which is incorporated into and made part of this Agreement by reference:
45 3
Approved and fully executed change orders (if any)
Addenda (if any)
This Agreement
All exhibits to this Agreement
Notice Inviting Bids (if any)
Instructions to Bidders, and any documents referenced therein (if any) Bid Forms (including Contractor’s Bid Schedule) (if any) Payment and Performance Bonds, if required
The Contract Documents are intended to be complementary, and a requirement in one document is as effective as if it appeared in all of the Contract Documents. In the event of a conflict between any of the Contract Documents, the documents shall be given effect in the order set forth above (from top to bottom).

SECTION 2. COMPENSATION AND METHOD OF PAYMENT

2.1 Compensation. City shall pay to Contractor for non-disputed Services rendered the compensation set forth in Exhibit “C” [Compensation] attached hereto and incorporated herein by reference. Total compensation to Contractor for the Services shall not exceed the total price or “not to exceed” amount set forth in Exhibit “C,” without the prior written approval of City in accordance with Section 9.10 [Amendments] and Section 9.19 [Administration and Implementation].

2.2 Payment of Compensation. Contractor shall submit periodic (monthly or quarterly as specified in Exhibit “C”) invoices together with an itemized statement of Services provided. The statement shall describe the Services provided, the percent of work completed by item, together with such other reasonable detail and supporting documentation as may be required by the City Manager, or his/her designee. City will review the statement and pay, with the exception of any charges for work performed or expenses incurred by Contractor which are disputed by City, within 30 days of receiving such statement, all approved charges thereon. Payment by City shall release City from any further obligation for payment to Contractor, for Services performed or expenses incurred as of the date of the invoice. Payment to Contractor for work performed pursuant to this Agreement shall not be deemed to waive any defect in work performed by Contractor.

SECTION 3. RESPONSIBILITIES OF CONTRACTOR

3.1 Control and Payment of Subordinates; Independent Contractor .

Contractor agrees that all Services shall be performed by Contractor or under its supervision. The personnel performing the Services under this Agreement on behalf of Contractor shall at all times be under the Contractor’s exclusive direction and control.

Contractor will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. Contractor is and shall at all times remain a wholly independent contractor and not an officer, employee or agent of City.

Contractor shall have no authority to bind City in any manner, nor to incur any 46 4
obligation, debt or liability of any kind on behalf of or against City, whether by contract or otherwise, unless such authority is expressly conferred under this Agreement or is otherwise expressly conferred in writing by City. Neither Contractor, nor any of Contractor’s officers, employees or agents, shall obtain any rights to retirement, healthcare or any other benefits which may otherwise accrue to City’s employees.

Contractor expressly waives any claim Contractor may have to any such rights.

Contractor shall make payments promptly, as due, to all persons supplying labor or materials for the Services. Contractor shall not permit any lien or claim to be filed or prosecuted against the City on any account of any labor or material furnished for the Services. If Contractor fails, neglects or refuses to make prompt payment of any claim for labor or services furnished to Contractor or a subcontractor by any person as such claim becomes due, City may pay such claim and charge the amount of the payment against funds due or to become due the Contractor. The payment of the claim in this manner shall not relieve Contractor or their surety from obligation with respect to any unpaid claims.

3.2 Standard of Care and Licenses . Contractor agrees that all Services shall be performed in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Contractor represents and warrants that it, its employees and subcontractors shall have sufficient skill and experience to perform the Services and that it, its employees and subcontractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, including a City Business License, and that such licenses and approvals shall be maintained in good standing throughout the term of this Agreement.

3.3 Required Corrections. Contractor shall perform, at its own expense and without reimbursement from the City, any work necessary to correct errors or omissions that are caused by the Contractor’s failure to comply with the standard of care provided for herein.

3.4 Law and Regulations. Contractor shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Contractor shall be liable for all violations of such laws and regulations in connection with Services.

3.5 Safety. Contractor shall perform the Services, and maintain its work area, so as to avoid injury or damage to any person or property and shall otherwise exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed.

3.6 Labor Code and Prevailing Wage Requirements.

3.6.1 Apprenticeable Crafts. To the extent applicable, Contractor shall comply with the provisions of Section 1777.5 of the Labor Code with respect to the employment of properly registered apprentices upon public works. 47 5

3.6.2 Hours of Work. Contractor shall comply with the legal days work and overtime requirements of Section 1813 of the Labor Code.

3.6.3 Payroll Records. In accordance with the requirements of Labor Code Section 1776, Contractor shall keep accurate payroll records which are either on forms provided by the Division of Labor Standards Enforcement or which contain the same information required by such forms. Contractor shall make all such records available for inspection at all reasonable hours.

3.6.4 Prevailing Wage Laws. Contractor represents and warrants that it is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 1600, et seq., (“Prevailing Wage Laws”), which require the payment of prevailing wage rates and the performance of other requirements on “Public Works” and “Maintenance” projects.

Contractor acknowledges that the Services are being performed as part of an applicable “Public Works” or “Maintenance” project, as defined by the Prevailing Wage Laws, and Contractor agrees to fully comply with such Prevailing Wage Laws. City shall provide Contractor with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Contractor shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Contractor’s principal place of business and any location where the Services are performed.

3.7 Equal Opportunity Employment . Contractor represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant, in any way, in the employment of persons to perform the Services in violation of any federal or state law prohibiting discrimination in employment, including based on the race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, of any person, except as provided under California Government Code section 12940.

SECTION 4. INDEMNIFICATION

4.1 Indemnity. Except as to the sole negligence or willful misconduct of City, Contractor expressly agrees to, and shall, indemnify, defend, release, and hold City, and its respective officials, officers, employees, agents, and contractors harmless from and against any Action, liability, loss, damage, entry, judgment, order, lien, and Costs and Expenses which arises out of, or are in any way related to, any act or omission of Contractor, or its officers, directors, employees, agents, or contractors, connected with the performance or failure to perform under this Agreement, notwithstanding that City may have benefited therefrom, or any challenge to this Agreement. This Section shall apply to any acts or omissions, willful misconduct or negligent conduct, whether active or passive, on the part of Contractor’s officers, directors, employees, agents and contractors, including but not limited to acts or omissions in any way related to, the 48 6
release, treatment, use, generation, transportation, storage, or disposal in, on, under, to, or from the location at which work under this Agreement is performed of any Hazardous Substances by Contractor or its officers, directors, employees, agents, and subcontractors. The Parties expressly agree that any payment, or Costs and Expenses City incurs or makes to, or on behalf of, an injured employee under City’s workers’ compensation or other insurance, is included as a loss or Costs and Expenses for the purpose of this Section. City shall not be responsible for any acts, errors or omissions of any person or entity except City and its officers, agents, servants, employees or contractors. The Parties expressly agree that the obligations of Contractor under this Section shall survive the expiration or early termination of the Agreement.

4.2 Action. For purposes of this Agreement, “Action” shall mean any suit (whether legal, equitable, or declaratory in nature), proceeding or hearing (whether administrative or judicial), arbitration or mediation (whether voluntary, court-ordered, binding, or non-binding), or other alternative dispute resolution process, and the filing, recording, or service of any process, notice, claim, demand, lien, or other instrument which is a prerequisite or prelude to commencement of the Action.

4.3 Costs and Expenses . For purposes of this Agreement, “Costs and Expenses” shall mean all costs and expenses, to the extent reasonable in amount, actually and necessarily incurred by a Party in good faith in the investigation, prosecution or defense of an Action, including, but not limited to, court costs, filing, recording, and service fees, copying costs, exhibit production costs, special media rental costs, attorney’s fees, consultant fees, fees for investigators, witness fees (both lay and expert), travel expenses, deposition and transcript costs, and any other costs or expenses, the award of which a court of competent jurisdiction may determine to be just and reasonable.

4.4 Hazardous Substances . For purposes of this Agreement, “Hazardous Substances” shall mean any and all of the following:
a. any substance, product, waste or other material of any nature whatsoever which is or becomes listed, regulated, or for which liability arises for misuse, pursuant to the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601, et seq .; the Hazardous Materials Transportation Act, 49 U.S.C. §1801, et seq.; the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. §6901, et seq.; the Toxic Substances Control Act, 15 U.S.C.S. §2601, et seq. ; the Clean Water Act, 33 U.S.C. §1251, et seq .; the Insecticide, Fungicide, Rodenticide Act, 7 U.S.C. §136, et seq .; the Superfund Amendments and Reauthorization Act, 42 U.S.C. §6901, et seq.; the Clean Air Act, 42 U.S.C. §7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. §300f, et seq.; the Solid Waste Disposal Act, 42 U.S.C. §6901, et seq .; the Surface Mining Control and Reclamation Act, 30 U.S.C. §1201, et seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. §11001, et seq.; the Occupational Safety and Health Act, 29 U.S.C. §§655 and 657; the Hazardous Waste Control Act, California Health and Safety Code (“H.&S.C.”) §25100, et seq.; the Hazardous Substance Account Act, H.&S.C.§25330, et seq.; the 49 7
California Safe Drinking Water and Toxic Enforcement Act, H.&S.C. §25249.5, et seq.; the Underground Storage of Hazardous Substances, H.&S.C. §25280, et seq. ; the Carpenter-Presley-Tanner Hazardous Substance Account Act, H.&S.C. §25300, et seq.; the Hazardous Waste Management Act, H.&S.C. §25170.1, et seq .; the Hazardous Materials Response Plans and Inventory, H.&S.C. §25001, et seq.; the Porter-Cologne Water Quality Control Act, Water Code §13000, et seq., all as they may from time to time be amended; and
b. any substance, product, waste or other material of any nature whatsoever which is or becomes listed, regulated, or for which liability for misuse arises pursuant to any other federal, state or local statute, law, ordinance, resolution, code, rule, regulation, order or decree due to its hazardous, toxic or dangerous nature.

SECTION 5. RECORDS AND DOCUMENTS

5.1 Accounting Records.

5.1.1 Maintenance and Inspection. Contractor shall maintain complete and accurate records with respect to all expenses incurred under this Agreement. Any and all such documents or records shall be maintained in accordance with generally accepted accounting principles and shall be sufficiently complete and detailed so as to permit an accurate evaluation of the Services provided by Contractor pursuant to this Agreement. All such records shall be clearly identifiable.

5.1.2 Inspection and Copying. Contractor shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement. At no cost to City, Contractor shall provide copies of such documents or records directly to the City for inspection, audit and copying when it is practical to do so; otherwise, unless an alternative is mutually agreed upon, such documents and records shall be made available at Contractor’s address indicated for receipt of notices in this Agreement.

5.2 Ownership of Documents. All original maps, models, designs, drawings, photographs, studies, surveys, reports, data, notes, computer files, files and other documents prepared, developed or discovered by Contractor in the course of providing the Services shall become the sole property of City and may be used, reused or otherwise disposed of by the City without the permission of the Contractor. Upon completion, expiration or termination of this Agreement, Contractor shall turn over to City all such original maps, models, designs, drawings, photographs, studies, surveys, reports, data, notes, computer files, files and other documents 50 8
SECTION 6. INSURANCE

6.1 Maintenance of Insurance. Prior to the beginning of and throughout the term of this Agreement, Contractor will maintain insurance in conformance with requirements established by City for the type of Services being performed. Contractor acknowledges that prior to the Effective Date of this Agreement, City provided to Contractor the applicable insurance requirements, a copy of which are attached hereto as Exhibit “F” [Insurance]. Contractor acknowledges that the insurance coverage and policy limits provided by City constitute the minimum amount of coverage required. Any insurance proceeds in excess of the limits and coverage required in this Agreement and which are applicable to a given loss, will be available to the City.

6.2 Subcontractors Insurance . Contractor agrees to ensure that subcontractors, and any other party involved in the performance of the Services by Contractor, provide the same minimum insurance coverage required of Contractor.

Contractor agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section. Contractor agrees that upon request, all agreements with subcontractors and others engaged in the project will be submitted to City for review.

6.3 Modification of Insurance Provisions . The City Manager may make reasonable amendments to the insurance requirements of this section, with the written concurrence of the Finance Director or Risk Manager, in accordance with Section 9.19 [Administration and Implementation] after considering the Scope of Services, potential liabilities, and the required level of insurance to adequately protect the City.

SECTION 7. BONDS

7.1 Performance and Payment Bonds . If required by law or specifically required by City as set forth in Exhibit “E” [Bonds Required], attached hereto and incorporated herein by reference, Contractor shall execute and provide to City concurrently with Contractor’s execution of this Agreement, but in no event later than the Effective Date of this Agreement, a Performance Bond and/or a Payment Bond in the amount of the total, not-to-exceed compensation indicated in Exhibit C, and in a form provided or approved by the City.

7.2 Bond Provisions . Should, in City's sole opinion, any bond become insufficient or any surety be found to be unsatisfactory, Contractor shall renew or replace the affected bond within 10 days of receiving notice from City. In the event the surety or Contractor intends to reduce or cancel any required bond, at least thirty (30) days prior written notice shall be given to the City, and Contractor shall post acceptable replacement bonds at least ten (10) days prior to expiration of the original bonds. No further payments shall be deemed due or will be made under this Agreement until any replacement bonds required by this section are accepted by the City. To the extent, if any, that the total compensation is increased in accordance with the Agreement, the Contractor shall, without further notice from City, cause the amount of the bonds to be increased accordingly and shall promptly deliver satisfactory evidence of such increase 51 9
to the City. To the extent available, the bonds shall further provide that no change or alteration of the Agreement (including, without limitation, an increase in the total compensation, as referred to above), extensions of time, or modifications of the time, terms, or conditions of payment to the Contractor, will release the surety.

7.3 Surety Qualifications . Only bonds executed by an admitted surety insurer, as defined in Code of Civil Procedure Section 995.120, shall be accepted. The surety must be a California-admitted surety with a current A.M. Best’s rating no less than A:VIII and satisfactory to the City. If a California-admitted surety insurer issuing bonds does not meet these requirements, the insurer will be considered qualified if it is in conformance with Section 995.660 of the California Code of Civil Procedure, and proof of such is provided to the City.

SECTION 8. TERMINATION.

8.1 Termination by City. City may, by written notice to Contractor, terminate with or without cause, and without any prior notice of default or right to cure by Contractor, the whole or any part of this Agreement at any time and by giving written notice to Contractor of such termination, and specifying the effective date thereof, at least five (5) days before the effective date of such termination. Upon termination, Contractor shall be compensated only for those non-disputed Services that have been adequately rendered to City, and Contractor shall be entitled to no further compensation.

8.2 Termination by Contractor . Contractor may, by written notice to City, terminate this Agreement based upon City’s failure to timely cure a default under this Agreement as provided herein. At least forty-five (45) days prior to termination, Contractor shall provide City with a written notice specifying City’s alleged default and providing City with a forty-five (45) day period to cure the default. Should City timely cure such default, the Agreement shall continue. Should City fail to timely or adequately cure such default, Contractor may terminate this Agreement by issuance of written notice to City.

SECTION 9. GENERAL PROVISIONS

9.1 Assignment or Transfer . Contractor shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

9.2 Loss and Damage . Contractor shall be responsible for all loss and damage which may arise out of the nature of the Services agreed to herein, or from the action of the elements, or from any unforeseen difficulties which may arise or be encountered in the prosecution of the Services until the same is fully completed and accepted by City.
52 10

9.3 Liquidated Damages . The Parties agree that City has a legitimate interest in ensuring that Contractor provides the Services (including performance of all duties and responsibilities) required under this Agreement in a consistent and reliable manner, and that Contractor’s failure to timely provide such Services or to provide them in an inadequate manner will cause City to suffer damages and that it is, and will be, impractical and extremely difficult to ascertain and determine the exact amount of damages or to calculate actual damages. Therefore, in addition to City’s right to treat such non-performance as a material breach of, and to terminate, this Agreement, the Parties agree that liquidated damages, as provided herein, represent a reasonable estimate of the monetary damages that reasonably could be anticipated and that proof of actual damages would be costly or impractical. The Parties specifically confirm the accuracy of the statements made above and the fact that each Party has had ample opportunity to consult with legal counsel and obtain an explanation of the liquidated damage provisions at the time that the Agreement was made. Therefore, in lieu of actual damages, Contractor is subject to payment of $500 per failure to perform, per day. City may, at its election, deduct any assessed liquidated damages from payment due, or that will become due, to Contractor from City.

9.4 Excusable Delays. Contractor shall not be liable for damages, including liquidated damages, if any, caused by delay in performance of failure to perform due to causes beyond the control of Contractor. Such causes include, but are not limited to, acts of God, acts of the public enemy, acts of federal, state or local governments, acts of City, court orders, fires, floods, epidemics, strikes, embargoes, and unusually severe weather. The term and price of this Agreement shall be equitably adjusted for any delays due to such causes.

9.5 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of the Agreement.

9.6 Governing Law. This Agreement shall be interpreted, construed and governed according to the laws of the State of California. In the event of litigation between the parties, venue in state trial courts shall lie exclusively in the County of Riverside. In the event of litigation in a U.S. District Court, venue shall lie exclusively in the Eastern Division of the Central District of California, located in Riverside, California.

9.7 Integration. This Agreement, including the attached Exhibits “A” through “F” and other Contract Documents, is the entire, complete, final and exclusive expression of the parties with respect to the matters addressed therein and supersedes all other agreements or understandings, whether oral or written, or entered into between Contractor and City prior to the execution of this Agreement. No statements, representations or other agreements, whether oral or written, made by any party which are not embodied herein shall be valid and binding.

9.8 Severability. If a term, condition or covenant of this Agreement is declared or determined by any court of competent jurisdiction to be invalid, void or 53 11
unenforceable, the remaining provisions of this Agreement shall not be affected thereby and the Agreement shall be read and construed without the invalid, void or unenforceable provision(s).

9.9 Prohibited Interests. Contractor represents and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Further, Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement.

9.10 Amendments. No amendment to or modification of this Agreement shall be valid unless made in writing and approved by Contractor and City. The City Manager shall have the authority to approve any amendment to this Agreement if the total compensation under this Agreement, as amended, would not exceed the City Manager’s contracting authority under the Eastvale Municipal Code. All other amendments shall be approved by the City Council. The Parties agree that the requirement for amendments or modifications to be in writing cannot be waived and that any attempted waiver shall be void.

9.11 No Third Party Beneficiaries . There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

9.12 Delivery of Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be given to the respective parties at the email addresses or physical addresses listed in Exhibit “D”, or at such other address as the respective parties may provide in writing for this purpose. Such notice shall be deemed made when emailed or personally delivered or forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

9.13 Binding Effect . This Agreement shall be binding upon the heirs, executors, administrators, successors and assigns of the Parties.

9.14 Waiver. Waiver by any Party to this Agreement of any term, condition, or covenant of this Agreement shall not constitute a waiver of any other term, condition, or covenant. Waiver by any Party or any breach of the provisions of this Agreement shall not constitute a waiver of any other provision, nor a waiver of any subsequent breach or violation of any provision of this Agreement. Acceptance by City of any Services by Contractor shall not constitute a waiver of any of the provisions of this Agreement.

9.15 Attorney’s Fees, Costs and Expenses . In the event litigation or other proceeding is required to enforce or interpret any provision of this Agreement, the prevailing party in such litigation or other proceeding shall be entitled to an award of 54 12
reasonable attorney’s fees and Costs and Expenses, in addition to any other relief to which it may be entitled.

9.16 Subcontracting. Contractor shall not subcontract any portion of the Services, except as expressly stated herein, without prior written approval of City.

Subcontracts, if any, shall contain a provision making them subject to all provisions of this Agreement.

9.17 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

9.18 Authority to Execute. The person or persons executing this Agreement on behalf of Contractor represents and warrants that he/she/they has/have the authority to so execute this Agreement and to bind Contractor to the performance of its obligations hereunder.

9.19 Administration and Implementation. This Agreement shall be administered and executed by the City Manager or his or her designated representative.

The City Manager shall have the authority to issue interpretations and to make amendments to this Agreement, including amendments that commit additional funds, consistent with the City Manager’s contracting authority under the Eastvale Municipal Code.

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed the day and year first above written.

CITY OF EASTVALE CONTRACTOR:

Mark Orme_______________________ Bear Electrical Solutions, Inc.______ City Manager By: ___________________________
Its: ___________________________
ATTEST:
______________________________
By: __________________________
________________________________ Its: __________________________ Marc Donohue, City Clerk
APPROVED AS TO FORM:
________________________________
Erica Vega, City Attorney
55 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA

STATE OF CALIFORNIA )

COUNTY OF RIVERSIDE )
On ____________________, 20__, before me, ,Date Name And Title Of Officer (e.g. “Jane Doe, Notary Public”) personally appeared ,Name of Signer(s) who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature of Notary Public

OPTIONAL
Though this section is optional, completing this information can deter alternation of the document or fraudulent reattachment of this form to an unintended document.

CAPACIT(IES) CLAIMED BY SIGNER(S) DESCRIPTION OF ATTACHED DOCUMENT Signer's
Name:
¨ Individual
¨ Corporate Officer
Title(s) Title or Type of Document
¨ Partner(s) ¨ Limited
¨ General
¨ Attorney-In-Fact Number Of Pages
¨ Trustee(s)
¨ Guardian/Conservator
¨ Other:

Signer is representing:

Name Of Person(s) Or Entity(ies)
Date Of Document
Signer(s) Other Than Named Above
56 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA

STATE OF CALIFORNIA )

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

WITNESS my hand and official seal.

Signature of Notary Public

OPTIONAL
Though this section is optional, completing this information can deter alternation of the document or fraudulent reattachment of this form to an unintended document.

Signer is representing:

Name Of Person(s) Or Entity(ies)
Date Of Document
Signer(s) Other Than Named Above
57 EXHIBIT “A”

SCOPE OF SERVICES
Contractor to provide ongoing streetlight operation and maintenance (O&M) services for all streetlights owned and operated by the City which include approximately 4,323 street poles totaling 4,357 light bulbs (68 Pre-Retrofit Metal Halide Decorative lamps, 2 Pre-Retrofit HPS Cobra lamps, and 4,287 Post-Retrofit LED Cobra lamps). Most of the streetlights were originally acquired under the LS2-B rate structure and maintenance responsibility.

Contractor shall perform the following:

1. Maintenance: Maintain the above-mentioned street poles and light bulbs along with any streetlights and poles that come under the ownership of the City or that become energized within the contract term as identified in this RFP. The streetlight maintenance service provider shall:
a. Provide necessary equipment, personnel, and infrastructure to maintain the City’s streetlights and poles (including any connected or contained equipment such as photocells or controllers) throughout the contract term. b. Have qualified and experience personnel and equipment available to respond to non-emergency reports of streetlight outages and diagnose and/or repair the malfunction within 24 hours, unless the degree of repair dictates an alternative schedule to be coordinated and approved by the City on a case-by-case basis. i. Some maintenance may require the assistance of SCE. SCE is responsible for underground wiring and will need to shut off power for the contractor to work on any infrastructure. It is highly recommended that the City, SCE, and the selected contractor communicate to facilitate proper maintenance.
c. Provide qualified and experienced personnel and equipment for 24-hour on- call/stand-by personnel to respond to emergencies. Personnel must be able to respond on-site to all emergency call-outs within 45 minutes. General circuit outages and individual streetlight burnouts generally would not constitute an emergency except under extenuating circumstances. Examples of typical emergency response items include:
Streetlight pole knockdowns
Exposed or damaged wires that constitute a danger to the public as determined by responding emergency staff (e.g., Police, City staff, etc.)

1. SCE will need to be notified by the Contractor to advise of potential danger in terms of exposed or damaged wires to 58 determine whether power needs to be shut off to tend to the matter.
Equipment or pole damage that may pose an immediate public danger (e.g., damaged/leaning poles, hanging luminaire/mast arm, etc.)

2. Installation (as-needed): On occasion, the City will need LED retrofit and/or pole tagging services for Cobra head or decorative streetlights. The Contractor shall coordinate with the City to install approved LED luminaires. The luminaire for this contract is a complete lighting unit consisting of LED lamp, driver, and long-life photocell. The streetlight GIS maps and database shall be updated to reflect the fixture installed, pole identifier installed, and installation date. The Contractor shall provide all required services related to documentation to deem the work complete. During the installation phase, all necessary and appropriate temporary traffic control measures will be compliant with the California Manual of Uniform Traffic Control Devices (CA MUTCD) and/or the Work Area Traffic Control Handbook (WATCH).

3. LED Procurement (as-needed): Contractor shall conduct all necessary photometrics, analyses, and measurements needed to identify the LED replacement fixture and wattage, and procurement of said equipment. Contractor shall coordinate with the City to adequately meet lighting standards.

4. Removal and Disposal: Contractor shall be responsible for the removal and disposal of existing luminaire heads and any other discarded materials as part of the California Recycle and Disposal Laws. Any hazardous materials including universal waste will be disposed of according to the provisions set forth in California law. During the removal phase, all necessary and appropriate temporary traffic control measures shall be compliant with the California Manual of Uniform Traffic Control Devices (CA MUTCD) and/or the Work Area Traffic Control Handbook (WATCH).

5. Install House-Side Shields (as-needed): On occasion, the City will receive a request to install a shield on a streetlight. All requests for shields will be reviewed and approved by the City prior to installation. Contractor shall install house-side shields on an as-needed basis.

6. Record Documents and Update GIS System: Contractor shall provide record (“as- built”) documentation of installed LED luminaires, pole identifier, GIS data, digital images of nameplates of each replaced fixture, and any applicable warranties, service, maintenance and operations manuals, and similar information in Cartegraph (City’s asset management software). Training will be provided to a successful candidate. No additional licensing or device is required.

7. Compliance with all Laws: Contractor shall ensure compliance with all federal, state, and local laws and regulations, including but not limited to, wage and labor laws, OSHA requirements, and appropriate safety measures.

8. Provide a Call Center and Online Work Order Management System: Contractor must provide an online management system that allows the City and the general public to remotely track and check the status of service requests, download historical maintenance reports, and view GIS data on a secure website portal. Contractor shall 59 provide a 24/7 Call Center which can receive calls from reporting parties for streetlight work order requests.

9. Provide a Storage Facility: Contractor shall provide adequate storage space to maintain an adequate ship and storage facility for all necessary equipment and materials, including but not limited to, poles, luminaires, pole tags, and related equipment and materials to provide all services as defined in this RFP. If the Contractor makes its storage facility available to the City, Contractor shall manage deliveries and staging of materials, including any secured storage considerations.

10. Additional Services: Contractor shall provide additional services, including:
a. Assist the City in processing claims for damage caused by other parties (e.g., Insurance claims and restitution) by providing an itemized list of relevant information regarding damage and repair costs as needed to process claims. b. Quarterly streetlight system reviews (evening inspections) and reports, including a summary of all system activities and a semi-annual review of all streetlight operations.
c. Quickly respond to and abate graffiti on all streetlight components. d. Coordinate electrical service repairs/restorations with SCE and the City. e. Repair/restore electrical service malfunctions, component damage, vandalism, theft, etc.
f. Replace all damaged pull-box covers.
g. Replace missing pole hand hole covers and repair damaged hand hole covers as needed.
h. Replace pole identification tags as needed.
i. Annual painting of portion of metal poles based on City approved priority/need. j. Submit requests for house-side shields to the City for review and furnish and install shields as authorized.
k. Respond to all Underground Service Alerts (Dig Alert) requests and provide appropriate facility markings for all City underground streetlight components in accordance with applicable guidelines.
l. Complete all repairs/replacements of equipment as needed to restore streetlights in instances of a knock-down. Contractor is expected to maintain an inventory of poles, luminaires, mast arms, and other appurtenances to complete repairs in a timely and expeditious manner within ten (10) working days unless otherwise approved by the City. This process may take longer if SCE is needed.

Invoice: Contractor shall submit an invoice for each month of routine maintenance. Invoices for additional work must be separate from routine maintenance. Invoices for additional work must be line itemed by each individual pole and/or funding zone. All knockdowns that occur shall be invoiced separately. A summary of invoices related to a knockdown shall be provided, as the City will be seeking restitution from the responsible party. 60 EXHIBIT “B”

COMPENSATION

ITEM DESCRIPTION UNIT OF

MEASURE
UNIT
COST
Routine Maintenance
1 LED Fixture
Maintenance
(Cobra
Head)
This shall include the cost for all
regular maintenance and
associated tasks to maintain the
cobra head fixtures in the
streetlight system as identified in
Section B.1 of this RFP. This fee
is expected to be all inclusive,
with the sole exceptions being
those items identified in the
extraordinary maintenance
section.

Per Light /
Per Month
$ 0.75
2 LED Fixture
Maintenance
(Decorative)
This shall include the cost for all
regular maintenance and
associated tasks to maintain the
cobra head fixtures in the
streetlight system as identified in
Section B.1 of this RFP. This fee
is expected to be all inclusive,
with the sole exceptions being
those items identified in the
extraordinary maintenance
section.

Per Light /
Per Month
$ 0.75
Extraordinary Maintenance ( Reference pricing only – this scope will be quoted on a time and material basis)
3 LED
Replacement
(Cobra
Head)
This shall include the cost for
labor and equipment (trucks,
lifts, tools, traffic control, etc.) for
replacing existing cobra head
fixtures with a new LED fixture,
disposal and updating of
database with model number
installed and installation date.

The replacement fixture cost
shall not be included and shall
be charged at material cost plus
the markup listed below.

Each $ 145.00
4 LED
Replacement
This shall include the cost for
labor and equipment (trucks,
Each $ 217.00
61 (Decorative) lifts, tools, traffic control, etc.) for replacing existing cobra head
fixtures with a new LED fixture,
disposal and updating of
database with model number
installed and installation date.

The replacement fixture cost
shall not be included and shall
be charged at material cost plus
the markup listed below.
5 Street Light
Pole ID Tag
This shall include the labor for
installation of a unique pole ID
tag for each pole, excluding the
cost of the actual tag. Pole tags
will be affixed to pole with an
adhesive, no riveting or drilling
will be performed. Material will
be charged at cost plus the
markup listed below.

Each $ 72.50
6 House Side
Shield
Installation
This shall include the costs
associated with the installation
of a house side shield on an
existing LED fixture, excluding
the cost of the actual shield.

Material will be charged at cost
plus the markup listed below.

Each $ 72.50
7 Knockown
Pole
Replacement
(No
Foundation)
This shall include the costs
associated with the replacement
of an entire street light pole,
luminaire arm, fixture and wiring
typically associated with a street
light knockdown that does not
require replacement of the
foundation.

Each $6,100.00
8 Knockdown
Pole
Replacement
(with
Foundation)
This shall include the costs
associated with the replacement
of an entire street light pole,
luminaire arm, fixture and wiring
typically associated with a street
light knockdown that does
require replacement of the
foundation.

Each $8,945.00
9 Pull Box Lid
Replacement
This shall include the cost of
labor, materials, and equipment
to purchase, supply, and replace
Each $ 190.50
62 a pull box lid with a fiberlyte lid
due to damage or missing lid.
10 Pole Graffiti
Abatement
This shall include the estimated
cost per pole to remove or cover
reported graffiti. Costs shall
include labor, equipment and
materials needed to complete
each individual abatement.

Each $ 145.00
11 Overhead
Wiring
Replacement
Total cost to repair or replace
damaged overhead wiring,
including labor, equipment, and
materials to complete the repair
during normal working hours.

Per Foot $ 5.50
12 Pole Painting This shall include the costs on a
per occurrence (per sole) basis
for all labor, equipment and
materials needed to prep and
paint a standard metal street
light pole (assume 30-foot.

Assume that ten (10) poles
would be scheduled for painting
as a group, annually.

Each $ 750.00
13 USA Dig
Alert
This service is on a per-
occurrence basis. This shall
include the following: technician
identifies the point of
demarcation on site using field
equipment.

Each $ 135.00

LABOR RATES
Position Title Quantity
Regular
Rate (per
hour)
Overtime
Rate
(per hour)
Premium
Rate
(per hour)
Electrician/Crane
Operator
1 $110.00 $155.00 $190.00
Electrician – Foreman 1 $115.00 $160.00 $195.00
Laborer 1 $90.00 $135.00 $155.00
Technician 1 $90.00 $135.00 $155.00
Regular Time, Overtime, and Premium Time:
 Regular Time: Monday through Friday (excluding holiday) from 7:30am 63 to 4:00pm
 Overtime: Monday through Friday after Regular hours for the first four (4) straight hours on any job as well as Saturday for the initial eight (8) working hours
 Premium Time: Monday through Friday after four (4) hours of Overtime on any one job, Saturdays after eight (8) hours on any one job, all day Sunday starting at 12:00am until Monday at 7:30am, and all holidays starting at 12:00am until the next morning at 7:30am

EQUIPMENT RATES
Item Description Quantity Price
(per hour)
Bucket Truck 1 $35.00
Crane Truck 1 $65.00
Dump Truck 1 $25.00
Service Truck 1 $25.00

MATERIAL MARKUP
Item Description Unit %
Material Markup % 15%
64 EXHIBIT “C”

REPRESENTATIVES
CITY’S REPRESENTATIVE
City of Eastvale
Public Works Department
Attn: Yurhi Choi, Principal Engineer
2363 Limonite Ave #910
Eastvale, CA 91752
Phone: (951) 361-0900
Email Address: [email protected]
CONTRACTOR’S REPRESENTATIVE
Bear Electrical Solutions, Inc.

Attn: Robert Asuncion, TE, Vice President
1252 State Street, PO Box 924
Alviso, CA 95002
Phone: (408) 449-5178
Email Address: [email protected]
65 EXHIBIT “D”

BONDS REQUIRED
No Bonds Required
66 EXHIBIT “E”

INSURANCE REQUIREMENTS FOR CITY OF EASTVALE
The City requires a certificate of insurance, including an underwriter’s endorsement, prior to commencement of the Services.

The insurance policies are to include additional endorsements that contain the following provisions:

1. That the City of Eastvale and its respective elected officials, officers, employees, agents and representatives are additional insureds under the policy;

2. The policies are primary and non-contributory to any insurance that may be carried by City;

3. The City is entitled to thirty (30) days’ prior written notice of cancellation, material reduction, or non-renewal of the policy or policies.

4. The insurance shall be carried only by responsible insurance companies that have rated “A-” and “V” or better by the A.M. Best Key Rating Guide, that are licensed to do business in the State of California. City will accept insurance provided by non- admitted “surplus lines” carriers only if the carrier is authorized to do business in the State of California.

Only the following “marked” requirements are applicable:

X Commercial General Liability (CGL): Insurance written on an occurrence basis to protect Contractor and City against liability or claims of liability which may arise out of this Agreement in the amount of one million dollars ($1,000,000) per occurrence and subject to an annual aggregate of two million dollars ($2,000,000). There shall be no endorsement or modification of the CGL limiting the scope of coverage for either insured vs. additional insured claims or contractual liability. All defense costs shall be outside the limits of the policy.

X Vehicle Liability Insurance: Contractor shall also procure and shall maintain during the term of this Agreement vehicle liability insurance in an amount not less than $1,000,000 for injuries, including accidental death, to any one person, and subject to the same minimum for each person, in an amount not less than one million dollars ($1,000,000) for each accident, and property damage insurance in an amount of not less than one million dollars ($1,000,000).

X Workers’ Compensation Insurance: For all of Contractor’s employees who will provide Services under this Agreement and to the extent required by applicable state or federal law, Contractor shall keep in full force and effect a Workers’ Compensation policy that 67 includes a minimum of one million dollars ($1,000,000) of employers’ liability coverage.

Contractor shall provide an endorsement that the insurer waives the right of subrogation against the City and its respective elected officials, officers, employees, agents and representatives. In the event a claim under the provisions of the California Workers’ Compensation Act is filed against City by a bona fide employee of Contractor participating under this Agreement, Contractor is to defend and indemnify the City from such claim. 68 18
Attachment A: COST PROPOSAL

ITEM DESCRIPTION UNIT OF

MEASURE
UNIT
COST
Routine Maintenance
1 LED Fixture
Maintenance
(Cobra Head)
This shall include the cost for all regular maintenance and associated tasks to maintain the cobra head
fixtures in the streetlight system as identified in Section B.1 of this RFP. This fee is expected to be all inclusive, with the sole exceptions being those items identified in the extraordinary maintenance section.

Per Light /
Per Month
$
2 LED Fixture
Maintenance
(Decorative)
This shall include the cost for all regular maintenance and associated tasks to maintain the cobra head
fixtures in the streetlight system as identified in Section B.1 of this RFP. This fee is expected to be all inclusive, with the sole exceptions being those items identified in the extraordinary maintenance section.

Per Light /
Per Month
$
Extraordinary Maintenance (Reference pricing only – this scope will be quoted on a time and material basis) 3 LED
Replacement
(Cobra Head)
This shall include the cost for labor and equipment
(trucks, lifts, tools, traffic control, etc.) for replacing existing cobra head fixtures with a new LED fixture,
disposal and updating of database with model number
installed and installation date. The replacement fixture cost shall not be included and shall be charged at
material cost plus the markup listed below.

Each $
4 LED
Replacement
(Decorative)
This shall include the cost for labor and equipment
(trucks, lifts, tools, traffic control, etc.) for replacing existing cobra head fixtures with a new LED fixture,
disposal and updating of database with model number
installed and installation date. The replacement fixture cost shall not be included and shall be charged at
material cost plus the markup listed below.

Each $
5 Street Light
Pole ID Tag
This shall include the labor for installation of a unique pole ID tag for each pole, excluding the cost of the
actual tag. Pole tags will be affixed to pole with an
adhesive, no riveting or drilling will be performed.

Material will be charged at cost plus the markup listed below.

Each $
6 House Side
Shield
Installation
This shall include the costs associated with the
installation of a house side shield on an existing LED
fixture, excluding the cost of the actual shield. Material will be charged at cost plus the markup listed below.

Each $

0.75 145.00

0.75 217.00

72.50 72.50
69 19

7 Knockown
Pole
Replacement
(No
Foundation)
This shall include the costs associated with the
replacement of an entire street light pole, luminaire
arm, fixture and wiring typically associated with a street light knockdown that does not require replacement of
the foundation.

Each $
8 Knockdown
Pole
Replacement
(with
Foundation)
This shall include the costs associated with the
replacement of an entire street light pole, luminaire
arm, fixture and wiring typically associated with a street light knockdown that does require replacement of the
foundation.

Each $
9 Pull Box Lid
Replacement
This shall include the cost of labor, materials, and
equipment to purchase, supply, and replace a pull box
lid with a fiberlyte lid due to damage or missing lid.

Each $
10 Pole Graffiti
Abatement
This shall include the estimated cost per pole to remove or cover reported graffiti. Costs shall include labor,
equipment and materials needed to complete each
individual abatement.

Each $
11 Overhead
Wiring
Replacement
Total cost to repair or replace damaged overhead
wiring, including labor, equipment, and materials to
complete the repair during normal working hours.

Per Foot $
12 Pole Painting This shall include the costs on a per occurrence (per sole) basis for all labor, equipment and materials
needed to prep and paint a standard metal street light
pole (assume 30 foot. Assume that ten (10) poles would
be scheduled for painting as a group, annually.

Each $
13 USA Dig
Alert
This service is on a per-occurrence basis. This shall
include the following: technician identifies the point of demarcation on site using field equipment.

Each $

6,100.00
8,945.00
145.00
190.50

5.50 750.00
135.00
70 20

LABOR RATES

Position Title Quantity Regular Rate
(per hour)
Overtime Rate
(per hour)
Premium Rate
(per hour)
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $

Regular Time, Overtime, and Premium Time:

• Regular Time: Monday through Friday (excluding holiday) from 7:30am to 4:00pm • Overtime: Monday through Friday after Regular hours for the first four (4) straight hours on any job as well as Saturday for the initial eight (8) working hours • Premium Time: Monday through Friday after four (4) hours of Overtime on any one job, Saturdays after eight (8) hours on any one job, all day Sunday starting at 12:00am until Monday at 7:30am, and all holidays starting at 12:00am until the next morning at 7:30am

EQUIPMENT RATES

Item Description Quantity Price
(per hour)
$
$
$
$
$
$

Electrician - Foreman
Electrician/Crane Operator
Technician
Laborer
1 1
1 1
110.00
115.00

90.00 90.00
135.00
160.00
155.00
135.00
190.00
195.00
155.00
155.00
Crane Truck
Dump Truck
Service Truck
Bucket Truck
1 1
1 1

35.00 65.00

25.00 25.00
71 21

MATERIAL MARKUP

Item Description Unit %
Material Markup % $

IN WITNESS WHEREOF CONTRACTOR executed this proposal as of date set forth:

Signature of Proposer:

Signer’s Name:

Company Name:

Date:

Robert Asuncion
Bear Electrical Solutions, Inc.
05/08/24

15.0%
72 23

Attachment C: PROPOSAL AFFIRMATION

CITYWIDE STREETLIGHT OPERATION AND MAINTENANCE SERVICES RFP No.

With regard to the information provided hereinabove, I affirm that:

• All information provided is true and correct to the best of my knowledge, and;

• I understand that a materially false statement willfully or fraudulently made in connection with this Proposal may result in the termination of any contract between the City of Eastvale and , and as a further result, the aforesaid firm may be barred from participation in future City contracts as well as be subject to possible criminal prosecution, and; • I have legal authority to bind to the terms of this affirmation.

FOR PROPOSAL TO BE VALID, THIS SHEET MUST BE SIGNED

Signature Date

Printed Name

Title

Company Name

END OF PROPOSAL SUBMISSION FORM
Bear Electrical
Solutions, Inc.

Bear Electrical Solutions, Inc.

Robert Asuncion
Vice President
Bear Electrical Solutions, Inc.
05/08/24
73 AGENDA STAFF REPORT

City Council Meeting

CONSENT CALENDAR

Agenda Item No. 11.5
October
9, 2024
Acceptance of Public Improvements of Parcel Map 37649 the Merge Project, The Merge Company, LLC – Located at the
Northeast Corner of Limonite Avenue and Archibald Avenue.

Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staﬀ recommends that the City Council adopt a Resolu on accep ng as complete the Public Improvements for Parcel Map 37649 (The Merge, PW29-10011)

Summary
All public improvements required of this development have been completed to the sa sfac on of the City Engineer. The public improvements include but are not limited to; asphalt pavement, curb, gutter, sidewalk, landscaping, street lights, utilities and other drainage facilities.

Background
Prior to construc on of the public improvements, the developer, The Merge Company, LLC submi7ed securi es to ensure sa sfactory comple on of the improvements. Upon acceptance, the improvements will automa cally enter a one year warranty period as required by the Subdivision Improvement Agreement and the remaining securities will be exonerated as follows:

Security to be Exonerated
Amount
Time of Release
Date
Faithful Performance Bond No.

PB00067200295
$1,973,625.00
Day after City Council approval
October 10, 2024
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
74 Labor and Materials Bond No.

PB00067200295
$1,315,750.00
180 days after City Council
approval
April, 2025
Survey Monumentation Bond
No.

PB00067200296
$18,100
Day after City Council approval
October 10, 2024
Warranty Bond
$657,875 (25% of FP
Bond)
365 days after City Council
approval
October, 2025
Environmental
Parcel Map 37649 was previously evaluated in accordance with the California Environmental Quality Act (CEQA). This tract has been constructed and the improvements associated with Parcel Map 37649 do not require any additional environmental analysis or determination.

Strategic Plan Action - Priority Level: 2
| Target #: B
| Goal #: C
Developing branding and identity for Eastvale.

Fiscal Impact
This action item will not have a fiscal impact to the city’s operating budget.

Prior City Council/Commission Action
On February 26, 2020, City Council approved the Subdivision Improvement Agreement and securities for PM 37649.

Attachment(s)
Attachment 1 - Vicinity Map

Attachment 2 - Proposed Resolution

12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
75 Vicinity Map

NOT TO SCALE
Parcel Map No. 37649
N
Project Location
76 RESOLUTION NO. 24-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EASTVALE, CALIFORNIA,

ACCEPTING THE PUBLIC IMPROVEMENTS ASSOCIATED WITH PARCEL MAP 37649, THE MERGE DEVELOPMENT (PW29-10011)
WHEREAS, The Merge Development, LLC, proposed a development of Parcel Map 37649 which included, in part, the construction of public improvements; and WHEREAS, on February 26, 2020, the City Council approved the final map for Parcel Map 37649 and securities for the construction of the public improvements; and WHEREAS, The Merge Development, LLC, completed the public improvements and the City is ready to accept the improvements.

NOW, THEREFORE, BE IT RESOLVED AND ORDERED, that the City Council of the City of Eastvale hereby accepts the completed required public improvements subject to the conditions of the Subdivision Improvement Agreement for the following project:

Parcel Map 37649 (The Merge), The Merge Development, LLC BE IT FURTHER RESOLVED AND ORDERED that the City Council of the City of Eastvale, hereby direct staff to file a Notice of Completion for said improvements.

CITY OF EASTVALE )

AYES:

NOES:

ABSENT:

ABSTAIN:
____________________________________
Marc A. Donohue, MMC
City Clerk
78 AGENDA STAFF REPORT

City Council Meeting

CONSENT CALENDAR

Agenda Item No. 11.6
October
9, 2024
Approval & Adop+on of Employer Sponsored Re+rement Health Savings Program
Prepared By:

Maricela Mejia, Assistant HR & Risk Management Director Recommended Action(s)
Staff recommends that the City Council:

1 .

Approve the Adop#on Agreement for a Re#rement Health Savings Program through MissionSquare Retirement;
2 .

Adopt a Resolution Adopting the Retirement Health Savings Program; and 3 .

Authorize the City Manager to execute all necessary documents Summary
The City’s Classiﬁca#on & Compensa#on study, adopted May 2024, included the provision for a Re#rement Health Savings Program (RHS Program) which allows governmental employers and employees to accumulate assets to pay for health insurance and out-of-pocket medical expenses in re#rement. The RHS Program has a number of advantages including tax free contribu#ons, tax free investment earnings, and tax free disbursements for eligible medical expenses for par#cipants and their qualifying dependents.

Par#cipa#on in the RHS Program showcases the City’s commitment and dedica#on to caring for its employees throughout their employment and into their retirement.

The contribution schedule is dependent on months of continuous service:
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
79 Contribution Level
Months of Continuous
Service
Monthly Contribution
for FT Employees
Monthly Contribution
for PT Employees
A
60 months - 119 months
$100.00
$50.00
B
120 months - 179
months
$125.00
$62.50
C
180 months – 239
months
$150.00
$75.00
D
240 months – 299
months
$175.00
$87.50
E
300 months -until
separation
$200.00
$100.00

Background
The City does not currently oﬀer addi#onal health savings contribu#ons to its employees. The RHS Program would be oﬀered through MissionSquare Re#rement. Adop#ng this plan is in alignment with direc#on provided through the Classiﬁca#on and Compensa#on Study adopted in May 2024, in addition to Strategic Plan Action Target G-Organizational Development.

Environmental
Not applicable.

Strategic Plan Action - Priority Level: N/A
| Target #: G
| Goal #: G
Organizational Development
Fiscal Impact
There is an an#cipated ﬁscal impact of $15,600.00 in ﬁscal year 2024-25, suﬃcient budget has been set aside for the proposed benefit.

Prior City Council/Commission Action
The City Council adopted Resolu#on 24-27 Adop#ng Salary Schedules and Range Tables for Fiscal Years 24-25. 25-26, and 26-27; and Amending the City’s Personnel Policies and Procedures Manual.

Attachment(s)
Attachment 1 - Resolution 24-XX Adopting the MissionSquare Retirement Health

Attachment 2 - MissionSquare Retirement Health Savings Program Adoption Agreement

12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
80 RESOLUTION NO. 24-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EASTVALE, CALIFORNIA,

ADOPTING THE MISSIONSQUARE RETIREMENT HEALTH SAVINGS PROGRAM

WHEREAS, the City of Eastvale adopted a Classification and Compensation S tudy in May 2024; and

WHEREAS, the City of Eastvale has employees rendering valuable services; and

WHEREAS, the City of Eastvale desi res to establish a retirement health savings program to enable to City to provide reasonable security regarding employees’ health needs during retirement; and

WHEREAS, the City of Eastvale desires to en hance its ability to retain and attract top talent; and

WHEREAS, the City of Eastvale has determined that the establishment of th e retirement health savings program serves the above objectives

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EASTVALE DOES HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated as a material part of this.

SECTION 2. The City of Eastvale approves and a dopts the MissionSquare Re tirement Health Savings Program effective September 1, 2024, for the benefit of its employees and authorizes and directs the City Mana ger, or his designee, to execute the attached adoption agreement on behalf of the City and any documents relat ing to the administration of the plan.

PASSED, APPROVED AND ADOPTED this 9th day of October 2024.

__________________________________________
Christian Dinco
Mayor

APPROVED AS TO FORM: ATTEST:

81 __________________________________________ __________________________________________ Erica Vega Marc A. Donohue, MMC
City Attorney Government Services Director/City Clerk 82 STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) §

CITY OF EASTVALE )

I, Marc A. Donohue , City Clerk/Communications Director of the City of Eastvale, California, do hereby certify that the foregoing City Council Resolution No. 24-XX, was duly adopted by the City Council of the City of Eastvale, California, at a meeting held on the 9th day of October 2024, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

____________________________________
Marc A. Donohue, MMC
Government Services Director/City Clerk
83 Retirement Health Savings Program RETURN BOOK (2 of 2) 84 MissionSquare Retirement Health Savings Plan
This is one of two books containing information to establish your MissionSquare Retirement Health Savings (RHS) Plan. This Return Book contains the documents that must be returned to MissionSquare Retirement to establish a RHS Plan. Should you need additional information on completing the documents, refer to Retain/Instructions Book (1 of 2).
.

MissionSquare RHS Adoption Documents to return to MissionSquare Page Suggested Resolution for Adoption of the MissionSquare RHS Program OR Suggested Affirmative Statement for Adoption of the MissionSquare RHS Program 3 MissionSquare RHS Adoption Agreement 6
VantageTrust II Participation Agreement 15
Administrative Services Agreement (provided separately) Sample Declaration of the Integral Part Trust 22
Sample Retiree Welfare Benefits Plan 31
Please retain a copy of all MissionSquare RHS Adoption Documents for your records, including the documents that are being returned to MissionSquare.

Please Note
The information in this book only takes into account the federal tax rules related to the MissionSquare Retirement Health Savings Program. Prior to implementing an RHS Program, the employer is responsible for determining that there are no state or local laws that would prohibit the employer from offering the Program to its employees. The employer must also determine that the options it selects in the MissionSquare Retirement Health Savings Adoption Agreement comply with state and local requirements. The employer is responsible for determining that the investments selected for the welfare benefits plan utilized by the RHS Program fall within state and local requirements.
85 MissionSquare Retirement Health Savings Program Return Book

3 Suggested Resolution for AdoptionAnd Suggested Affirmative Statement of Adoption 86 MissionSquare Retirement Health Savings Program Return Book 5 Suggested Affirmative Statement for Adoption of the MissionSquare Retirement Health Savings (RHS) Program
Plan Number: 8
Name of Employer: State:

Affirmative Statement of the above-
WHEREAS, the Employer has employees rendering valuable services; and WHEREAS, the establishment of a retiree health savings program serves the interests of the Employer by enabling it to
providing increased flexibility in its personnel management system, and by assisting in the attraction and retention of competent personnel; and
WHEREAS, the Employer has determined that the establishment of the retiree health savings program NOW THEREFORE, as a duly authorized agent of the Employer, I hereby:

SPECIFY that the assets of the Plan shall be held in trust, with the following entity or individual serving as trustee (Select one):
the Employer
the following position within the Employer: _______________________ (insert title of individual acting as trustee)
the following group or committee within the Employer: _________ (insert group or committee acting as trustee)
the following third-party trustee:___
(insert name of third-party trustee)
for the exclusive benefit of Plan participants and their survivors, and the assets of the Plan shall not be diverted to any other purpose prior to the satisfaction of all liabilities of the Plan. The Employer has executed the Declaration of Trust of the
Integral Part Trust in the form of: (Select one)
The sample trust made available by MissionSquare Retirement The trust provided by the Employer (executed copy attached hereto) SPECIFY that the shall be the
coordinator and contact for the Plan and shall receive necessary reports, notices, etc.

Date:

Title of Designated Agent
Signature
87 MissionSquare Retirement Health Savings Program Return Book 6 MissionSquare RHS Adoption
Agreement
88 MissionSquare Retirement Health Savings Program Return Book 7 MissionSquare Retirement Health Savings (RHS) Adoption Agreement Plan Number: 8
Select as applicable:

Standalone RHS Integrated RHS Amendment to Existing Plan New Plan I. Employer Name: State:

II. The Employer hereby attests that it is a unit of a state or local government or an agency or instrumentality of one or more units of a state or local government.

III. Plan Dates:

A. Plan Effective Date
B. Plan Year: Enter the annual accounting period for the RHS program.

IV. The Employer intends to utilize the Trust to fund only welfare benefits pursuant to the following welfare benefit plan(s) established by the Employer:

V. Eligible Groups, Participation and Participant Eligibility Requirements A. Eligible Groups
benefits plan identified in Section IV. (check all applicable boxes):

All Employees
All Full-Time Employees
Non-Union Employees
Public Safety Employees Police
Public Safety Employees Firefighters
General Employees
Collectively-Bargained Employees (Specify unit(s))
__________________________________________________________________________________ Other (specify group(s))
The Employee group(s) specified must correspond to a group(s) of the same designation that is defined in the statutes, ordinances, rules, regulations, personnel manuals or other documents or provisions in effect in the state or locality of the Employer.

B. Participation
Mandatory Participation: All Employees in the covered group(s) are required to participate in the Plan and shall receive contributions pursuant to Section VI.

If the underlying welfare benefit plan is in whole or part a non-collectively bargained plan that allows reimbursement for medical expenses other than insurance premiums, the nondiscrimination requirements of Internal Revenue Code (IRC) Section 105(h) will apply. These rules may impose taxation on the benefits received by highly compensated individuals if the Plan discriminates in favor of highly compensated individuals in terms of eligibility or benefits. The Employer should discuss these rules with appropriate counsel. 89 MissionSquare Retirement Health Savings Program Return Book 8 C. Participant Eligibility Requirements

1. Minimum service: The minimum period of service required for participation is (write N/A if no minimum service is required).

2. Minimum age: The minimum age required for eligibility to participate is (write N/A if no minimum age is required).

VI. Contribution Sources and Amounts
A. Definition of Earnings
,
including Direct Employer Contributions (Section VI.B.1.) and Mandatory Employee Compensation Contributions (Section VI.B.2.).

Definition of earnings:

B. Direct Employer Contributions and Mandatory Contributions Contributions for participants include:

1. Direct Employer Contributions
The Employer shall contribute on behalf of each Eligible Employee % of Earnings*
$ each Plan Year
A discretionary amount to be determined each Plan Year
Other (describe):

2. Mandatory Employee Compensation Contributions
The Employer will make mandatory contributions of Employee compensation as follows:

Reduction in Salary % of Earnings or $ will be contributed for the Plan Year.

Decreased Merit or Pay Plan Adjustment
or pay plan adjustment will be contributed as follows:

An Employee shall not have the right to discontinue or vary the rate of mandatory contributions of employee compensation.

3. Mandatory Employee Leave Contributions
The Employer will make mandatory contributions of accrued leave as follows (provide formula for determining mandatory employee leave contributions):

Accrued Sick Leave
Accrued Vacation Leave
Other (specify type of leave) Accrued Leave
An Employee shall not have the right to discontinue or vary the rate of mandatory leave contributions.
* Non-collectively bargained plans that reimburse medical expenses other than insurance premiums should consult their benefits counsel regarding welfare plan nondiscrimination rules if the employer elects to make contributions based on a percentage of earnings.
5 consecutive years of service
90 MissionSquare Retirement Health Savings Program Return Book 9 C. Limits on Total Contributions (check one box)
The total contribution by the Employer on behalf of each Participant (including direct employer and mandatory employee contributions) for each Plan Year shall not exceed the following limit(s) below. Limits on individual contribution types are defined within the appropriate section above.

There is no Plan-defined limit on the percentage or dollar amount of earnings that may be contributed.
% of earnings
Definition of earnings: Same as Section VI.A. Other
$ for the Plan Year.

VII. Vesting for Direct Employer Contributions
A. Vesting Schedule (check one box)
(If no selection is made, the default is 100% vested at all times.) The account is 100% vested at all times.

The vesting schedule below shall apply to direct employer contributions as outlined in Section VI.B.1.

Vesting schedules beyond 10 years are not supported.

Years of Service Vesting
Completed Percentage
%
%
%
%
%
%
%
%
%
%
x
91 MissionSquare Retirement Health Savings Program Return Book 10 B. The account will become 100% vested upon the death, disability, retirement*, or attainment of benefit eligibility (as outlined in Section IX) by a Participant. * Definition of retirement includes a separation from service component and is further defined by (check one):

The primary retirement plan of the Employer
Completion of _______ years of continuous service
Normal Retirement Age (NRA) of _____
Check this option ONLY if you want the automatic vesting feature to be turned on. Providing an NRA establishes an automatic vesting feature that automatically makes the participant 100% vested when the participant reaches the NRA regardless of any service requirement. If NRA is left blank, the standard default is age 62, and automatic vesting feature is turned off regardless of whether NRA is selected.

Other
If your plan has multiple definitions of retirement, please notify MissionSquare Retirement, and note that it is the employer's responsibility to maintain and provide vested percentage for eligible employees upon benefit eligibility by submitting a letter of instruction (LOI) with the required data to MissionSquare Retirement.

C. Any period of service by a Participant prior to a rehire of the Participant by the Employer shall not count toward the vesting schedule outlined in A above.

VIII. Forfeiture Provisions
If a Participant separates from service prior to full vesting, non-vest account shall be forfeited in accordance with the box checked under this section.

Upon the death of a Participant, surviving spouse, and all surviving eligible dependents (as outlined in Section XI), funds remaining in the Par
with the box checked under this section.

If a Participant permanently opts out and waives future reimbursements, as allowed under IRS Notice 2013- the time of waiver shall be forfeited in
accordance with the box checked under this section.*
Remain in the Trust to be reallocated among all Plan Participants with a balance as Direct Employer Contributions for the next and succeeding contribution cycle(s).** Remain in the Trust to be reallocated on an equal dollar basis among all Plan Participants with a balance.**
Remain in the Trust to be reallocated among all Plan Participants based upon Participant account balances.**
* If the
required to provide further direction to MissionSquare regarding the treatment of possible contributions that are required to be made fo
** If the forfeited balance is small whereby the reallocation amount to each Plan Participant with a balance is minimal, the ass ets will here are Participants without a balance who
should receive forfeiture assets, please provide alternative instructions to MissionSquare on the forfeiture reallocation not ice. 92 MissionSquare Retirement Health Savings Program Return Book 11 IX. Eligibility Requirements to Receive Medical Benefit Payments from the MissionSquare Retirement Health Savings Program
A. A Participant is eligible to receive benefits:

At retirement only (also complete Section B.)
Definition of retirement:

Same as Section VII.B.

Other
At separation from service with the following restrictions No restrictions
Other
B. Termination prior to general benefit eligibility: In a case where the general benefit eligibility as outlined in Section IX.A includes a retirement component, a Participant who separates from service of the Employer prior to retirement will be eligible to receive benefits:

Immediately upon separation from service
Other
C. A Participant who becomes totally and permanently disabled will become immediately eligible to receive medical benefit
welfare benefits plan.

As defined by the Social Security Administration
Other
D. Upon the death of the Participant, benefits shall become payable as outlined in Section XI.
93 MissionSquare Retirement Health Savings Program Return Book 12 X. Permissible Medical Benefit Payments
Select one option.

Benefits eligible for reimbursement under the plan are as allowed under IRC Section 213 other than direct long-term care expenses.

Option 1: All Medical Benefits*
Option 2: Insurance Premiums Only
Option 3: Select Expenses*
Medical Insurance Premiums
Medical Out-of-Pocket Expenses
Medicare Part B Insurance Premiums
Medicare Part D Insurance Premiums
Medicare Supplemental Insurance Premiums
Prescription Drug Insurance Premiums
COBRA Insurance Premiums
Dental Insurance Premiums
Dental Out-of-Pocket Expenses
Vision Insurance Premiums
Vision Out-of-Pocket Expenses
Qualified Long-Term Care Insurance Premiums
Non-Prescription medications allowed under IRS guidance Other qualifying medical expenses (describe)
* Non-collectively bargained plans that reimburse medical expenses other than insurance premiums should consult their benefits counsel regarding welfare plan nondiscrimination rules if the employer elects to make contributions based on a percentage of earnings.
94 MissionSquare Retirement Health Savings Program Return Book 13 XI. Benefits After the Death of the Participant
A. Surviving Spouse and/or Surviving Dependents
Upon the death of a Participant, the surviving spouse and/or surviving eligible dependents (as defined in Section XII.D.) of the deceased Participant are immediately eligible to maintain the e the remaining balance to fund eligible medical benefits specified in Section X above. The account balance may be reallocated* by the surviving spouse or dependents.
* Before investing, please read the applicable fund disclosure materials carefully for a complete summary of all fees, expenses, investment objectives and strategies, and risks. This information is available when you log in at www.icmarc.org/login, or upon request by calling (800) 326-7272. spouse, the account balance may continue to be utilized to pay benefits of eligible dependents.

Upon the death of all eligible dependents, the account will revert in accordance with the MissionSquare RHS Adoption Agreement.

B. No Surviving Spouse or Surviving Dependents
If there are no living spouse or dependents at the time of death of the Participant, the account MissionSquare
RHS Adoption Agreement.

XII. The Plan Will Operate According to the Following Provisions:

A. Employer Responsibilities

1. The Employer will submit all MissionSquare Retirement Health Savings Plan enrollment and contribution data via electronic submission.

2. The Employer will submit all MissionSquare Retirement Health Savings Plan Participant status updates or personal information updates via electronic submission. This includes but is not limited to termination notification, benefit eligibility, and vesting notification.

B. Participant account administration and asset-based fees will be paid through the redemption of Participant account shares, unless agreed upon otherwise in the Administrative Services Agreement.

C. Assignment of benefits is not permitted. Benefits will be paid only to the Participant, his/her survivors, the Employer, or an insurance provider (as allowed by the claims administrator).

Payments to a third-party payee (e.g., medical service provider) are not permitted with the exception of reimbursement to the Employer or insurance provider (as allowed by the claims administrator).

D.
age of 27, as defined by IRC Section 152(f)(1) and Internal Revenue Service Notice 2010-38, or (c) any other individual who is a person described in IRC Section 152(a), as clarified by Internal Revenue Service Notice 2004-79.

E. The Employer will be responsible for withholding, reporting and remitting any applicable taxes for payments which are deemed to be discriminatory under IRC Section 105(h), as outlined in the MissionSquare Retirement Health Savings Employer Manual. 95 MissionSquare Retirement Health Savings Program Return Book 14 XIII. Employer Acknowledgements
A. The Employer hereby acknowledges it understands that failure to properly fill out this MissionSquare Retirement Health Savings Adoption Agreement may result in the loss of tax exemption of the Trust and/or loss of tax-deferred status for Employer contributions.

B. Check this box if you are including supporting documents that include plan provisions.

Employer Signature
By: Date:

Title:

Attest: Date:

Title:
96 Addendum to the
MissionSquare Retirement Health Savings Program
City of Eastvale, California, Plan Number 800465
Section VI(B)(1)
Contribution Sources and Amounts:

Direct Employer Contributions
Contribution Level Months of Continuous
Service
Monthly Contribution
for Full-time
Employees
Monthly Contribution
for Part-time
Employees
A 60 months- 119
months
$100.00 $50.00
B 120 months -179
months
$125.00 $62.50
C 180 months- 239
months
$150.00 $75.00
D 240 months- 299
months
$175.00 $87.50
E 300 months- until
separation
$200.00 $100.00

Name: _Mark Orme_____________________________________
Signature: _____________________________________________ Title: City Manager_____________________________________ Date: __________________________________

97 MissionSquare Retirement Health Savings Program Return Book 15 VantageTrust II Participation Agreement
98 MissionSquare Retirement Health Savings Program Return Book 16 VantageTrust II Multiple Collective Investment Funds Trust Participation Agreement
This Participation Agreement is by and between VantageTrust Company, LLC VantageTrust II Multiple Collective Investment Funds Trust (the retirement plan(s) or retirement trust(s) identified on the signature page and is effective as of the

RECITALS

1. The Trust Company maintains the Trust (including each separate investment fund established 015, and all other attachments
for the collective investment and reinvestment of assets of certain tax-exempt, governmental pension and profit-sharing plans, and retiree welfare plans within the meaning of section 401(a)(24) of the Internal Revenue Code of 1986, as amended, and related trusts, and other eligible investors that become Participating Trusts under the Declaration of Trust (defined as n the Declaration of Trust).

2. The Retirement Trust desires to become a Participating Trust as defined in the Declaration of Trust.

DEFINITIONS

1. Unless otherwise specified herein, any capitalized word or phrase shall have the meaning as set forth in the Declaration of Trust.

AGREEMENT
In consideration of the foregoing and the promises set forth below, the parties agree to the following:

1. Appointment and Acceptance . The Employer hereby acknowledges that the Trust Company has appointed MissionSquare Retirement, or its wholly owned subsidiary, MissionSquare Investments, investment advisors registered under the Investment Advisers Act of 1940, as an investment advisor, pursuant to the terms of the Declaration of Trust to provide advice and recommendations to the Trust Company in the management of the Funds. The Employer acknowledges that the Trust Company has appointed MissionSquare Retirement to perform various administrative functions of the Funds. The Employer further acknowledges and accepts that the Trust Company is a wholly owned subsidiary of MissionSquare Retirement.

2. Adoption of Trust. The Retirement participation in each Fund will at all times be subject to the terms of the Declaration of Trust, which is hereby adopted as a part of the Retirement Trust subject to the terms of the Declaration of Trust.

3. Acceptance of Plan . The Trust Company accepts the Retirement Trust (including each plan forming a part thereof) as a Participating Trust as of the date specified on the execution page of this Participation Agreement.
99 MissionSquare Retirement Health Savings Program Return Book 17

4. Notice of Disqualification. In the event that the Retirement Trust ceases to be an Eligible Trust as defined in the Declaration of Trust, then, in the case of any such event, the Employer shall deliver to the Trust Company a written notice of its ceasing to be an Eligible Trust within fifteen (17) calendar days of receipt of any notice, execution of any amendment, receipt of any letter or determination of such cessation. Upon the Trust receipt of such information, in writing or otherwise, provisions of the
Declaration of Trust.

5. Term and Termination. This Agreement shall be in effect from the day specified at the end of this Agreement until termination by Employer or Trust Company upon ninety (90) days prior written notice.

6. Termination Restriction . Employer acknowledges and agrees that, consistent with the terms applicable to the MissionSquare PLUS Fund as outlined in the Disclosure Memorandum, MissionSquare Investments retains full discretion to defer Employer-initiated withdrawals from the MissionSquare PLUS Fund for a period of not more than 12 months following notice of termination of this Agreement.

WARRANTIES, REPRESENTATIONS AND COVENANTS OF EMPLOYER AND ELIGIBLE TRUST

1. Employer and Retirement Trust represent and warrant as follows:

A. The Retirement Trust meets the definition of an
under the Declaration of
Trust. This means the Retirement Trust is any of the following:
i. a retirement, pension, profit-sharing, stock bonus, or other employee benefit trust that is exempt from Federal income taxation under Section 501(a) of the Code by reason of qualifying under Section 401(a) of the Code; or ii. an eligible governmental plan trust or custodial account under Section 457(b) of the Code that is exempt under Section 457(g) of the Code; or iii. Section 401(a)(24) governmental plans; or
iv. any common, collective, or commingled trust fund the assets of which consist solely of assets of eligible investors in a group trust under Revenue Ruling 81- 100; or
v. an insurance company separate account (i) the assets of which consist solely of assets of eligible investors in a group trust under Revenue Ruling 81-100, (ii) with respect to which the insurance company maintaining the separate account has entered into a written arrangement with the Trust Company consistent with the requirements of Revenue Ruling 2011-1, and (iii) the assets of which are insulated from the claims of the insurance company's general creditors; or vi. any other plan, trust, or other entity that is an eligible investor in a group trust under Revenue Ruling 81-100.

B. The Retirement Trust is established, maintained and administered under one or more documents that authorize part or all of the assets of the Retirement Trust to be transferred to, 100
MissionSquare Retirement Health Savings Program Return Book 18 and commingled for investment purposes in, a Trust that meets the requirements of Revenue Ruling 81-100, as amended or clarified from time to time; C. The Declaration of Trust (including each Fund thereunder) is adopted as part of the Retirement Trust;
D. Authorization or license from any foreign, federal, state or local regulatory authority or agency required on the part of the Employer or the Retirement Trust has been obtained and any necessary filing with any of the foregoing has been duly made; E. Employer will not transmit, or cause to be transmitted, any order for purchase or redemption of units of the MissionSquare PLUS Fund that are not based on instructions communicated in proper form by Retirement Plan participants; and
F. Employer will not use the MissionSquare PLUS Fund as a temporary holding account, default investment, or investment account for employer level accounts including revenue sharing accounts or any other non-participant account. Notwithstanding the foregoing, the Employer can use the MissionSquare PLUS Fund in a forfeiture account.

2. Employer hereby represents and acknowledges the following:

A. It has the requisite authority to enter into this Participation Agreement on behalf of the Retirement Trust, to authorize investments under the provisions of the documents of the Retirement Trust and to make, on behalf of the Retirement Trust, any and all certifications, covenants, representations or warranties set forth in this Agreement.

B. The Declaration of Trust, any addenda thereto, the Disclosure Memorandum, any applicable Fund Fact Sheets, and any additional materials and information requested by the Employer describing the Trust and its business and operation have been made available to the Employer and have been reviewed by the Employer, and that in making a prudent investment decision with respect to the contribution of assets to Trust in exchange for units and the current or future selection of one or more Funds, the Employer has relied solely upon independent investigations made, directly or indirectly, by it.

C. It has been given the opportunity to review with the Trust Company the terms and conditions of this Participation Agreement and the Declaration of Trust, and to obtain additional information to verify the accuracy of the information contained in the aforesaid materials, and such other information as it desires to evaluate its investment in the Trust.

D. The Units of the Fund(s) have not been registered under the Securities Act of 1933, or the applicable securities laws of any states or other jurisdictions.

E. Neither the Trust nor any Fund is registered under the Investment Company Act of 1940 and investors are not entitled to the protections of that Act.

F. The Units of the Fund(s) are not insured by the Federal Deposit Insurance Corporation or any other type of deposit insurance coverage.

3. Employer agrees promptly to notify the Trust Company in the event that any of the representations set forth above or any information provided pursuant to the provisions hereof ceases to be accurate during the term of this Participation Agreement. Until such notice is given 101
MissionSquare Retirement Health Savings Program Return Book 19 to the Trust Company, the Trust Company may rely on the representations contained in, and all other information provided pursuant to or as contemplated by, this Participation Agreement in connection with all matters related to the Funds and the Trust.

4. Upon reasonable request by the Trust Company, Employer agrees to provide the Trust Company with a list of all Employer affiliates that provide financial services to Employer, including any broker- dealer.

5. Employer acknowledges that the Trust may invest in a range of securities, whether directly or indirectly through another pooled investment vehicle. Employer acknowledges and agrees that it is investment in the Trust will not
contravene any provision of existing law or regulations applicable to the Retirement Trust, or of the organizational or governing documents of the Retirement Trust.

FEES AND EXPENSES

1. Fees and expenses incurred with respect to the Trust, including compensation of the Trustee, shall be paid in accordance with the Declaration of Trust.

MISCELLANEOUS

1. Consent to Electronic Delivery . By submitting an email address on the signature page of this Agreement, the Employer hereby authorizes, and agrees to the use of electronic mail or web- based availability to deliver all documents required to be delivered by, or on behalf of, the Fund to the Employer under applicable law or regulation and pursuant to the Declaration of Trust, such delivery or notice of web-based availability to be sent to the email address listed on the signature page of this Agreement, unless Employer otherwise notifies Trust Company in writing. The Employer may elect not to receive such documents by electronic means by submitting a written request to Trust Company.

2. Construction. This Participation Agreement shall be deemed to be executed and delivered in the District of Columbia, and, except to the extent superseded by federal laws, all laws or rules of construction of the District of Columbia shall govern the rights of the parties hereto and the interpretation of provisions of this Participation Agreement.

3. Counterparts. This Participation Agreement may be executed in any number of separate counterparts, each of which shall be deemed an original, but the several counterparts shall together constitute one and the same Participation Agreement of the parties hereto.

4. Amendments. This Participation Agreement shall be automatically amended by any amendment to the Declaration of Trust, and all such amendments shall be automatically incorporated by reference herein, and any provisions of this Participation Agreement inconsistent with the terms of such amendment shall be null and void on and after the effective date of such amendment.

5. Agreement Conflicts. In the event that any terms of this Participation Agreement conflict with or are in addition to the terms of any parties, the
terms of this Participation Agreement and the Declaration of Trust shall prevail. In the event that the terms of this Participation Agreement conflict with the terms of the Declaration of Trust, the terms of the Declaration of Trust shall prevail.
102
MissionSquare Retirement Health Savings Program Return Book 20

6. Prohibited Transactions. If the Trust Company determines that the Retirement involvement with certain assets, liabilities or transactions will result, or has resulted, in the Trust engaging in a transaction that is prohibited by the Internal Revenue Code, Employee Retirement Income Security law, the Trust Company, in its sole discretion, may take action to correct such prohibited transaction, or may treat the Retirement Trust as having withdrawn from participation and shall redeem the

7. Severability. Each clause or term of this Participation Agreement is severable from the entire Participation Agreement, and if any clause or term is declared invalid, the remaining clauses or terms shall remain in effect.

8. Notice. All notices under this Participation Agreement must be sent in writing to the below address:

VantageTrust Company, LLC
c/o MissionSquare Retirement
Attn: Legal Department
777 North Capitol Street, NE
Washington, DC 20002

9. Electronic Signatures. The parties agree that this document may be electronically signed and that any electronic signatures appearing on this document are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility. [The remainder of this page intentionally left blank]
103
MissionSquare Retirement Health Savings Program Return Book 21 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date specified below.

VantageTrust II Multiple Collective Investment Funds Trust By:

VantageTrust Company, LLC, as Trustee,
By: Erica McFarquhar
Assistant Secretary
Plan/Retirement Trust:

Plan/Retirement Trust Name Plan Number
Plan/Retirement Trust Name Plan Number
By:

Name of Employer or Fiduciary Customer Number
By:

Authorized Officer Signature Date
Printed Name and Title
Address Line 1
Address Line 2
Telephone Number
104
MissionSquare Retirement Health Savings Program Return Book 22 Declaration of Trust of the
Name of Employer
Integral Part Trust
City of Eastvale
105
MissionSquare Retirement Health Savings Program Return Book 23 Declaration of Trust of the
(Name of Employer)
Integral Part Trust
Declaration of Trust made as of the day of , 20 , by and between the (Name of Employer) , (State)
a (Type of Entity)
(Name or Title of Trustee)
Recitals
WHEREAS, the Employer is a political subdivision of the State of (state) exempt from federal income tax under the Internal Revenue Code of 1986; and WHEREAS, the Employer provides for the security and welfare of its eligible employees (hereinafter post-
retirement welfare benefit plans, programs or arrangements which provide for life, sickness, medical, disability, severance and other similar benefits through insurance and self-funded reimbursement WHEREAS, it is an essential function and integral part of the exempt activities of the Employer to assist Participants, their Spouses and Dependents by making contributions to and accumulating assets in the trust, a segregated fund, for post- retirement welfare benefits under the Plan; and WHEREAS, the authority to conduct the general operation and administration of the Plan is vested in the Employer or its designee, who has the authority and shall be subject to the duties with respect to the trust specified in this sample Declaration of Trust; and WHEREAS, the Employer wishes to establish this trust to hold assets and income of the Plan for the exclusive benefit of Plan Participants, their Spouses and Dependents; NOW, THEREFORE, the parties hereto do hereby establish this trust, by executing the sample Declaration of Trust of the
(Name of Employer)
Integral Part Trust (hereinafter referred t
106
MissionSquare Retirement Health Savings Program Return Book 24 Article I
Definitions

1.1 Definitions. For the purposes of this Declaration, the following terms shall have the respective meanings set forth below unless otherwise expressly provided. (a) means the individual recordkeeping account maintained under the Plan to record the interest of a Participant in the Plan in accordance with Section 7.3. (b) means the Employer or the entity designated by the Employer to carry out administrative services as are necessary to implement the Plan. (c) means the Spouse and Dependents, who will receive any benefits payable Dependents, any amount of contributions, plus accrued earnings thereon, remaining in the MissionSquare RHS Adoption Agreement.
(d) means the Internal Revenue Code of 1986, as amended from time to time. (e)
age of 27, as defined by IRC Section 152(f)(1) and Internal Revenue Service Notice 2010-38, or (c) any other individual who is a person described in IRC Section 152(a), as clarified by Internal Revenue Service Notice 2004-79.
(f) means any separate investment option or vehicle selected by the Employer in which all or a portion of the Trust assets may be separately invested as herein provided. The Trustee shall not be required to select any Investment Fund. (g)
which has vested pursuant to the
Participant shall, at all times, have a one hundred percent (100%) Nonforfeitable Interest in the (h) aws of the
jurisdiction in which the Participant was married.
(i) means the trust established by this Declaration.
(j) means the Employer or the person or persons appointed by the Employer to serve in that capacity.

Article II
Establishment of Trust

2.1 The Trust is hereby established as of the date set forth above for the exclusive benefit of Participants, their Spouses and Dependents.
107
MissionSquare Retirement Health Savings Program Return Book 25 Article III
Construction

3.1 This Trust and its validity, construction and effect shall be governed by the laws of the State of .

3.2 Pronouns and other similar words used herein in the masculine gender shall be read as the feminine gender where appropriate, and the singular form of words shall be read as the plural where appropriate.

3.3 If any provision of this Trust shall be held illegal or invalid for any reason, such determination shall not affect the remaining provisions, and such provisions shall be construed to effectuate the purpose of this Trust.

Article IV
Benefits

4.1 Benefits. This Trust may provide
Dependents pursuant to the terms of the Plan.

4.2 Form of Benefits. This Trust may reimburse the Participant, his Spouse and Dependents for insurance premiums or other payments expended for permissible benefits described under the Plan. This Trust may reimburse the Employer, or the Administrator for insurance premiums.

Article V
General Duties

5.1 name as directed by the Employer or its designees in writing. The Trustee shall not be under any duty to compute the amount of contributions to be paid by the Employer or to take any steps to collect such amounts as may be due to be held in trust under the Plan. The Trustee shall not be responsible for the custody, investment, safekeeping or disposition of any assets comprising the Trust, to the extent such functions are performed by the Employer or the Administrator, or both.

5.2 It shall be the duty of the Employer, subject to the provisions of the Plan, to pay over to the to the ident
books and records with respect to the Participants of the Plan.

Article VI
Investments

6.1 The Employer may appoint one or more investment managers to manage and control all or part of the assets of the Trust and the Employer shall notify the Trustee in writing of any such appointment.

6.2 The Trustee shall not have any discretion or authority with regard to the investment of the Trust and shall act solely as a directed Trustee of the assets of which it holds title. To the extent directed by the Employer (or Participants or their Spouses and Dependents to the extent provided herein) 108
MissionSquare Retirement Health Savings Program Return Book 26 the Trustee is authorized and empowered with the following powers, rights and duties, each of which the Trustee shall exercise in a nondiscretionary manner:
(a) To cause stocks, bonds, securities, or other investments to be registered in its name as Trustee or in the name of a nominee, or to take and keep the same unregistered; (b) To employ such agents and legal counsel as it deems advisable or proper in connection with its duties and to pay such agents and legal counsel a reasonable fee. The Trustee shall not be liable for the acts of such agents and counsel or for the acts done in good faith and in reliance upon the advice of such agents and legal counsel, provided it has used reasonable care in selecting such agents and legal counsel;
(c) To exercise where applicable and appropriate any rights of ownership in any contracts of insurance in which any part of the Trust may be invested and to pay the premiums thereon; and
(d) At the direction of the Employer (or Participants, their Spouses, their Dependents, or the investment manager, as the case may be) to sell, write options on, convey or transfer, invest and reinvest any part thereof in each and every kind of property, whether real, personal or mixed, tangible or intangible, whether income or non-income producing and wherever situated, including but not limited to, time deposits (including time deposits in the Trustee or its affiliates, or any successor thereto, if the deposits bear a reasonable rate of interest), shares of common and preferred stock, mortgages, bonds, leases, notes, debentures, equipment or collateral trust certificates, rights, warrants, convertible or exchangeable securities and other corporate, individual or government securities or obligations, annuity, retirement or other insurance contracts, mutual funds (including funds for which the Trustee or its affiliates serve as investment advisor, custodian or in a similar or related capacity), or in units of any other common, collective or commingled trust fund.

6.3 Notwithstanding anything to the contrary herein, the assets of the Plan shall be held by the Trustee as title holder only. Persons holding custody or possession of assets titled to the Trust shall include the Employer, the Administrator, the investment manager, and any agents and subagents, but not the Trustee. The Trustee shall not be responsible or liable for any loss or expense which may arise from or result from compliance with any direction from the Employer, the Administrator, the investment manager, or such agents to take title to any assets nor shall the Trustee be responsible or liable for any loss or expense which may result from t negligence or intentional misconduct. The Trustee may refuse to comply with any direction from the Employer, the Administrator, the investment manager, or such agents in the event that the Trustee, in its sole and absolute discretion, deems such direction illegal.

6.4 The Employer hereby indemnifies and holds the Trustee harmless from any and all actions, claims, demands, liabilities, losses, damages or reasonable expenses of whatsoever kind and nature in connection with or arising out of (i) any action taken or omitted in good faith by the Trustee in accordance with the directions of the Employer or its agents and subagents hereunder, or (ii) any disbursements of any part of the Trust made by the Trustee in accordance with the directions of the Employer, or (iii) any action taken by or omitted in good faith by the Trustee with respect to an investment managed by an investment manager in accordance with any direction of the investment manager or any inaction with respect to any such investment in the absence of directions from the investment manager. Notwithstanding anything to the contrary herein, the Employer shall have no responsibility to the Trustee under the foregoing indemnification if the Trustee fails negligently, intentionally or recklessly to perform any of the duties undertaken by it under the provisions of this Trust.

6.5 Notwithstanding anything to the contrary herein, the Employer or, if so designated by the Employer, the Administrator and the investment manager or another agent of the Employer, will 109
MissionSquare Retirement Health Savings Program Return Book 27 be responsible for valuing all assets so acquired for all purposes of the Trust and of holding, investing, trading and disposing of the same. The Employer will indemnify and hold the Trustee harmless against any and all claims, actions, demands, liabilities, losses, damages, or expenses of whatsoever kind and nature, which arise from or are related to any use of such valuation by the Trustee or holding, trading, or disposition of such assets.

6.6 The Trustee shall and hereby does indemnify and hold harmless the Employer from any and all actions, claims, demands, liabilities, losses, damages and reasonable expenses of whatsoever kind and nature in connection with or arising out of (a)
the Employer, the Administrator, the investment manager, or agents thereof, except as permitted by the last sentence of Section 6.3 above; (b) any disbursements made without the direction of the Declaration.

Article VII
Contributions

7.1 Employer Contributions. The Employer shall contribute to the Trust such amounts as specified in the Plan or by resolution.

7.2 Accrued Leave. Contributions up to an amount equal to the value of accrued sick leave, vacation leave, or other t
provide a formula for determining the value of
ts from receiving the
accrued leave in cash in lieu of a contribution to the Trust.

7.3 Accounts. Employer contributions, including mandatory Participant contributions, and contributions of accrued leave, all investment income and realized and unrealized gains and losses, and forfeitures allocable thereto will be deposited into an Account in the name of the Participant for the exclusive benefit of the Participant, his Spouse and Dependents. The assets in Funds as directed by the Participant (or,
Plan, from among the Investment Funds selected by the Employer.

7.4 Receipt of Contributions. The Employer or, if so designated by the Employer, the Administrator or investment manager or another agent of the Employer, shall receive all contributions paid or delivered to it hereunder and shall hold, invest, reinvest and administer such contributions pursuant to this Declaration, without distinction between principal and income. The Trustee shall not be responsible for the calculation or collection of any contribution under the Plan, but shall rected by the
Employer or its designee pursuant to this Declaration.

7.5 No amount in any Account maintained under this Trust shall be subject to transfer, assignment, or alienation, whether voluntary or involuntary, in favor of any creditor, transferee, or assignee of the Employer, the Trustee, any Participant, his Spouse, or Dependent.

7.6 Upon the satisfaction of all liabilities under the Plan to provide such benefits, any amount of Employer contributions, plus accrued earnings thereon, remaining in such separate Accounts must, under the terms of the Plan, be returned to the Employer. 110
MissionSquare Retirement Health Savings Program Return Book 28 Article VIII
Other Plans
If the Employer hereafter adopts one or more other plans providing life, sickness, accident, medical, disability, severance, or other benefits and designates the Trust hereby created as part of such other plan, the Employer or, if so designated by the Employer, the Administrator or an investment manager or another agent of the Employer shall, subject to the terms of this Declaration, accept and hold hereunder contributions to such other plans. In that event (a) the Employer or, if so designated by the Employer, the Administrator or an investment manager or another agent of the Employer, may commingle for investment purposes the contributions received under such other plan or plans with the contributions previously received by the Trust, but the books and records of the Employer or, if so designated by the Employer, the Administrator or an investment manager or another agent of the Employer, shall at all times show the portion of the Trust Fund allocable to each plan; (b) the term h have
been designated by the terms of such other plans as having the authority to control and manage the operation and administration of such other plan.

Article IX
Disbursements and Expenses

9.1 The Employer or its designee shall make such payments from the Trust at such time to such persons and in such amounts as shall be authorized by the provisions of the Plan provided, however, that no payment shall be made, either during the existence of or upon the discontinuance of the Plan (subject to Section 7.6), which would cause any part of the Trust to be used for or diverted to purposes other than the exclusive benefit of the Participants, their Spouses and Dependents pursuant to the provisions of the Plan.

9.2 All payments of benefits under the Plan shall be made exclusively from the assets of the Accounts of the Participants to whom or to whose Spouse or Dependents such payments are to be made, and no person shall be entitled to look to any other source for such payments.

9.3 The Employer, Trustee and Administrator may be reimbursed for expenses reasonably incurred by them in the administration of the Trust. All such expenses, including, without limitation, reasonable fees of accountants and legal counsel to the extent not otherwise reimbursed, shall constitute a charge against and shall be paid from the Trust upon the direction of the Employer.

Article X
Accounting

10.1 The Trustee shall not be required to keep accounts of the investments, receipts, disbursements, and other transactions of the Trust, except as necessary to perform its title-holding function hereunder. All accounts, books, and records relating thereto shall be maintained by the Employer or its designee.

10.2 As promptly as possible following the close of each year, the Trustee shall file with the Employer a written account setting forth assets titled to the Trust as reported to the Trustee by the Employer or its designee.
111
MissionSquare Retirement Health Savings Program Return Book 29 Article XI
Miscellaneous Provisions

11.1 Neither the Trustee nor any affiliate thereof shall be required to give any bond or to qualify before, be appointed by, or account to any court of law in the exercise of its powers hereunder.

11.2 No person transferring title or receiving a transfer of title from the Trustee shall be obligated to look to the propriety of the acts of the Trustee in connection therewith.

11.3 The Employer may engage the Trustee as its agent in the performance of any duties required of the Employer under the Plan, but such agency shall not be deemed to increase the responsibility or liability of the Trustee under this Declaration.

11.4 The Employer shall have the right at all reasonable times during the term of this Declaration and for three (3) years after the termination of this Declaration to examine, audit, inspect, review, extract information from, and copy all books, records, accounts, and other documents of the Article XII
Amendment and Termination

12.1 The Employer reserves the right to alter, amend, or (subject to Section 9.1) terminate this Declaration at any time for any reason without the consent of the Trustee or any other person, provided that no amendment affecting the rights, duties, or responsibilities of the Trustee shall be adopted without the execution of the Trustee to the amendment. Any such amendment shall

12.2 Upon termination of this Declaration and upon the satisfaction of all liabilities under the Plan to provide such benefits, any amount of Employer contributions, plus accrued earnings thereon, remaining in such separate Accounts must, under the terms of the Plan, be returned to the Employer.

Article XIII
Successor Trustees

13.1 The Employer reserves the right to discharge the Trustee for any or no reason, at any time by

13.2 ance written
notice to the Employer.

13.3 In the event of discharge or resignation of the Trustee, the Employer may appoint a successor Trustee who shall succeed to all rights, duties, and responsibilities of the former Trustee under this Declaration, and the terminated Trustee shall be deemed discharged of all duties under this Declaration and responsibilities for the Trust.
112
MissionSquare Retirement Health Savings Program Return Book 30 Article XIV
Limited Effect of Plan and Trust
Neither the establishment of the Plan and the Trust or any modification thereof, the creation of any fund or account, nor the payment of any benefits, shall be construed as giving to any person covered under the Plan or other person any legal or equitable right against the Trustee, the Administrator, the Employer or any officer or employee thereof, except as may otherwise be expressly provided in the Plan or in this Declaration.

Article XV
Protective Clause
Neither the Administrator, the Employer, nor the Trustee shall be responsible for the validity of any contract of insurance or other arrangement maintained in connection with the Plan, or for the failure on the part of the insurer or provider to make payments provided by such contract, or for the action of any person which may delay payment or render a contract void or unenforceable in whole or in part.

IN WITNESS WHEREOF, the Employer and the Trustee have executed this Declaration by their respective duly authorized officers, as of the date first hereinabove mentioned.

EMPLOYER:

By: Title:

TRUSTEE(S):

By: Title:

By: Title:
113
MissionSquare Retirement Health Savings Program Return Book 31 Name of Employer
Retiree Welfare Benefits Plan
114
MissionSquare Retirement Health Savings Program Return Book 32 Retiree Welfare Benefits Plan
Table of Contents
Article I Preamble

1.01 Establishment of Plan

1.02 Purpose of Plan
Article II Definitions

2.01 2.02

2.03 2.04

2.05 2.06

2.07 2.08

2.09 2.10

2.11 Article III Eligibility

3.01 General Requirements
Article IV Amount of Benefits

4.01 Annual Benefits Provided by the Plan

4.02 Cost of Coverage
Article V Payment of Benefits

5.01 Eligibility for Benefits

5.02 Claims for Benefits
Article VI Plan Administration

6.01 Allocation of Authority

6.02 Provision for Third-Party Plan Service
Providers

6.03 Several Fiduciary Liability

6.04 Compensation of Plan Administrator

6.05 Bonding

6.06 Payment of Administrative Expenses

6.07 Timeliness of Payments

6.08 Annual Statements
Article VII Claims Procedure

7.01 Procedure if Benefits are Denied Under
the Plan

7.02 Requirement for Written Notice of
Claim Denial

7.03 Right to Request Hearing on Benefit
Denial

7.04 Disposition of Disputed Claims

7.05 Preservation of Other Remedies
Article VIII Amendment or Termination
of Plan

8.01 Permanency

8.02 8.03
Article IX General Provisions

9.01 No Employment Rights Conferred

9.02 Payments to Survivor

9.03 Nonalienation of Benefits

9.04 Mental or Physical Incompetency

9.05 Inability to Locate Payee

9.06 Requirement of Proper Forms

9.07 Source of Payments

9.08 Tax Effects

9.09 Multiple Functions

9.10 Gender and Number

9.11 Headings

9.12 Applicable Laws

9.13 Severability
115
MissionSquare Retirement Health Savings Program Return Book 33 (Name of Employer)
Retiree Welfare Benefits Plan
Article I
Preamble
THIS INSTRUMENT made and published by
day of , 20 ,
creates the Retiree Welfare Benefits

1.01 Establishment of Plan
The Employer named above hereby establishes a Retiree Welfare Benefits Plan as of the day of , 20 .

1.02 Purpose of Plan
This Plan has been established to reimburse the eligible Retirees of the Employer for medical and dental expenses incurred by them, their Spouses and MissionSquare Retirement Health Savings (RHS) Program.

ARTICLE II
Definitions
The following words and phrases as used herein shall have the following meanings, unless a different meaning is plainly required by the context:

2.01 means any amounts paid to a Participant, Spouse or Dependents in the Plan as reimbursement for Eligible Medical and Dental Expenses incurred by the Participant during a Plan Year by him, his Spouse or his Dependents.

2.02 means the Internal Revenue Code of 1986, as amended.

2.03 means any individual who is a dependent of the Participant within the meaning of Code Sec. 152, as amplified by Internal Revenue Service Notice 2004-79, 2004-49 I.R.B.898 and Internal Revenue Service Notice 2010-38.

2.04 means those expenses designated by the
Employer as eligible for reimbursement in the MissionSquare Retirement Health Savings Adoption Agreement.

2.05 means the unit of state or local government creating this Plan, or any affiliate or successor thereof that likewise adopts this Plan.

2.06 means the first day the Participant meets the eligibility requirements of Article III as of such Date.

2.07 means any Retiree who has met the eligibility requirements set forth in Article III. 116
MissionSquare Retirement Health Savings Program Return Book 34

2.08 means the Employer or other person appointed by the Employer who has the authority and responsibility to manage and direct the operation and administration of the Plan.

2.09 means the annual accounting period of the Plan, which begins on the day of , 20 , and ends on the day of ,
20 , with respect to the first Plan Year, and thereafter as long as this Plan remains in effect, the period that begins on , and ends on month/day .

2.10 means any individual who, while in the service of the Employer, was considered to be in a legal employer-employee relationship with the Employer for federal withholding tax purposes, and who was part of the classification of employees designated as covered by the

2.11 in which the Participant was married. All other defined terms in this Plan shall have the meanings specified in the various Articles of the Plan in which they appear.

Article III
Eligibility
Retirement Health Savings Adoption Agreement shall be eligible to participate in this Plan.

Article IV
Amount of Benefits

4.01 Annual Benefits Provided by the Plan
Each Participant shall be entitled to reimbursement for his documented, Eligible Medical Expenses incurred during the Plan Year in an annu
account balance under the Plan.

4.02 Cost of Coverage
The expense of providing the benefits set out in Section 4.01 shall be contributed as outlined in Adoption Agreement.

Article V
Payment of Benefits

5.01 Eligibility for Benefits
a) Each Participant in the Plan shall be entitled to a benefit hereunder for all Eligible Medical Expenses incurred by the Participant on or after the Entry Date of his or her participation (and after the effective date of the Plan), subject to the limitations contained in this Article V, regardless whether the mental or physical condition for which the Participant makes application for benefits under this Plan was detected, diagnosed, or treated before the Participant became covered by the Plan.
117
MissionSquare Retirement Health Savings Program Return Book 35 b) In order to be eligible for benefits, the Participant must separate from service or separate MissionSquare Retirement Health Savings Plan Adoption Agreement. c) A Participant who becomes totally and permanently disabled (as defined by the Social Employer) will become immediately eligible to receive medical benefit payments from the Retirement Health Savings Adoption Agreement, the surviving Spouse and Dependents shall become immediately eligible to receive or to continue receiving medical benefit payments from the Plan upon the death of the Participant.

5.02 Claims for Benefits
No benefit shall be paid hereunder unless a Participant, his Spouse or Dependent has first submitted a written claim for benefits to the Plan Administrator on a form specified by the Plan Administrator, and pursuant to the procedures set out in Article VI, below. Upon receipt of a properly documented claim, the Plan Administrator shall pay the Participant, his Spouse or Dependent the benefits provided under this Plan as soon as is administratively feasible.

Article VI
Plan Administration

6.01 Allocation of Authority
The Employer shall control and manage the operation and Administration of the Plan. The Employer shall have the exclusive right to interpret the Plan and to decide all matters arising thereunder, including the right to remedy possible ambiguities, inconsistencies, or omissions. All determinations of the Employer with respect to any matter hereunder shall be conclusive and binding on all persons.

Without limiting the generality of the foregoing, the Employer shall have the following powers and duties:
a) To decide on questions concerning the Plan and the eligibility of any Employee to participate in the Plan, in accordance with the provisions of the Plan; b) To determine the amount of benefits that shall be payable to any person in accordance with the provisions of the Plan; to inform the Plan Administrator, as appropriate, of the amount of such Benefits; and to provide a full and fair review to any Participant whose claim for benefits has been denied in whole or in part; and
c) To designate other persons to carry out any duty or power which would otherwise be a fiduciary responsibility of the Plan Administrator, under the terms of the Plan. d) To require any person to furnish such reasonable information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefits under the Plan;
e) To make and enforce such rules and regulations and prescribe the use of such forms as he shall deem necessary for the efficient administration of the Plan.

6.02 Provision for Third-Party Plan Service Providers
The Plan Administrator, subject to approval of the Employer, may employ the services of such persons as it may deem necessary or desirable in connection with operation of the Plan. The Plan 118
MissionSquare Retirement Health Savings Program Return Book 36 Administrator, the Employer (and any person to whom it may delegate any duty or power in connection with the administration of the Plan), and all persons connected therewith may rely upon all tables, valuations, certificates, reports and opinions furnished by any duly appointed actuary, accountant, (including Employees who are actuaries or accountants), consultant, third party administration service provider, legal counsel, or other specialist, and they shall be fully protected in respect to any action taken or permitted in good faith in reliance thereon. All actions so taken or permitted shall be conclusive and binding as to all persons.

6.03 Several Fiduciary Liability
To the extent permitted by law, neither the Plan Administrator nor any other person shall incur any liability for any acts or for failure to act except for his own willful misconduct or willful breach of this Plan.

6.04 Compensation of Plan Administrator
Unless otherwise agreed to by the Employer, the Plan Administrator shall serve without compensation for services rendered in such capacity, but all reasonable expenses incurred in the performance of his duties shall be paid by the Employer.

6.05 Bonding
Unless otherwise determined by the Employer, or unless required by any Federal or State law, the Plan Administrator shall not be required to give any bond or other security in any jurisdiction in connection with the administration of this Plan.

6.06 Payment of Administrative Expenses
All reasonable expenses incurred in administering the Plan, including but not limited to administrative fees and expenses owing to any third party administrative service provider, actuary, consultant, accountant, attorney, specialist, or other person or organization that may be employed by the Plan Administrator in connection with the administration thereof, shall be paid by the Employer, provided, however that each Participant shall bear the monthly cost (if any) charged by a third party administrator for maintenance of his Benefit Account unless otherwise paid by the Employer.

6.07 Timeliness of Payment for Benefits
Payment for Benefits shall be made as soon as administratively feasible after the required forms and documentation have been received by the Plan Administrator.

6.08 Annual Statements
The Plan Administrator shall furnish each Participant with an annual statement of his medical expense reimbursement account within ninety (90) days after the close of each Plan Year.

Article VII
Claims Procedure

7. 01 Procedure if Benefits are Denied Under the Plan
Any Participant, Spouse, Dependent, or his duly authorized representative may file a claim for a plan benefit to which the claimant believes that he is entitled. Such a claim must be in writing on a form provided by the Plan Administrator and delivered to the Plan Administrator, in person or by mail, postage paid. Within thirty (30) days after receipt of such claim, the Plan Administrator 119
MissionSquare Retirement Health Savings Program Return Book 37 shall send to the claimant, by mail, postage prepaid, notice of the granting or denying, in whole or in part, of such claim, unless special circumstances require an extension of time for processing the claim. In no event may the extension exceed forty-five (45) days from the end of the initial period. If such extension is necessary, the claimant will be given a written notice to this effect prior to the expiration of the initial 30-day period. If such extension is necessary due to a failure of the Participant, Spouse or Dependent to submit the information necessary to decide the claim, the notice of extension shall describe the required information and the claimant shall be afforded at least forty-five (45) days from receipt of the notice within which to provide such information. The Plan Administrator shall have full discretion to deny or grant a claim in whole or in part. If notice of the denial of a claim is not furnished in accordance with this Section, the claim shall be deemed denied and the claimant shall be permitted to exercise his right to review pursuant to Sections 7.03 and 7.04.

7. 02 Requirement for Written Notice of Claim Denial
The Plan Administrator shall provide, to every claimant who is denied a claim for benefits, written notice setting forth in a manner calculated to be understood by the claimant:
a) The specific reason or reasons for the denial;
b) Specific reference to pertinent Plan provisions, including references to the MissionSquare Retirement Health Savings Adoption Agreement, on which the denial is based; c) A description of any additional material of information necessary for the claimant to perfect the claim and an explanation of why such material is necessary; and d)

7. 03 Right to Request Hearing on Benefit Denial
Within one-hundred eighty (180) days after the receipt by the claimant of written notification of the denial (in whole or in part) of his claim, the claimant or his duly authorized representative, upon written application to the Plan Administrator, in person or by certified mail, postage prepaid, may request a review of such denial, may review pertinent documents, and may submit issues and comments in writing.

7. 04 Disposition of Disputed Claims
Upon its receipt of notice of a request for review, the Plan Administrator shall make a prompt decision on the review. The decision on review shall be written in a manner calculated to be understood by the claimant and shall include specific reasons for the decision and specific references to the pertinent plan provisions on which the decision is based. The decision on request for a review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered not later than one hundred-twenty (120) days after receipt of a request for review. If an extension is necessary, the claimant shall be given written notice of the extension prior to the expiration of the initial sixty (60) day period. If notice of the decision on the review is not furnished in accordance with this Section, the claim shall be deemed denied and the claimant shall be permitted to exercise his right to legal remedy pursuant to Section 7.05.

7. 05 Preservation of Other Remedies
After exhaustion of the claims procedures provided under this Plan, nothing shall prevent any person from pursuing any other legal or equitable remedy otherwise available. 120
MissionSquare Retirement Health Savings Program Return Book 38 Article VIII
Amendment or Termination of Plan

8.01 Permanency
While the Employer fully expects that this Plan will continue indefinitely, due to unforeseen, amend or terminate the Plan, as provided in Sections 8.02 and 8.03, below.

8.02 to Amend
The Employer reserves the right to amend the Plan at any time and from time to time, and retroactively if deemed necessary or appropriate to meet the requirements of the Code, or any similar provisions of subsequent revenue or other laws, or the rules and regulations in effect under any of such laws or to conform with governmental regulations or other policies, to modify or amend in whole or in part any or all of the provisions of the Plan.

8.03 The Employer reserves the right to discontinue or terminate the Plan at any time without prejudice.

Article IX
General Provisions

9.01 No Employment Rights Conferred
Neither this Plan nor any action taken with respect to it shall confer upon any person the right to be continued in the employment of the Employer.

9.02 Payments After Death of Participant
Any benefits otherwise payable to a Participant following the date of death of such Participant Savings Plan Adoption Agreement.

9.03 Nonalienation of Benefits
No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No benefit under the Plan shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person. If any person entitled to benefits under the Plan becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any benefit under the Plan, or if any attempt is made to subject any such benefit to the debts, contracts, liabilities, engagements or torts of the person entitled to any such benefit, except as specifically provided in the Plan, then such benefit shall cease and terminate in the discretion of the Plan Administrator, and he may hold or apply the same or any part thereof to the benefit of any dependent of such person, in such manner and proportion as he may deem proper. 121
MissionSquare Retirement Health Savings Program Return Book

39 9.04 Mental or Physical Incompetency If the Plan Administrator determines that any person entitled to payments under the Plan is incompetent by reason of physical or mental disability, the Plan Administrator may cause all payments thereafter becoming due to such person to be made to any other person for the benefit of the Participant, without responsibility to follow the application of amounts so paid. Payments made pursuant to this Section shall completely discharge the Plan Administrator and the Employer. 9.05 Inability to Locate Payee If the Plan Administrator is unable to make payment to any Participant or other person to whom a payment is due under the Plan because he cannot ascertain the identity or whereabouts of such Participant or other person after reasonable efforts have been made to identify or locate such person (including a notice of the payment so due mailed to the last known address of such Participant or other person as shown on the records of the Employer), such payment and all subsequent payments otherwise due to such Participant or other person shall be escheated under the laws of the State of the last known address of the Participant or other persons eligible for benefits. 9.06 Requirement of Proper Forms All communications in connection with the Plan made by a Participant shall become effective only when duly executed on forms provided by and filed with the Plan Administrator. 9.07 Source of PaymentsThe Employer shall be the sole source of benefits under the Plan. No Employee, Spouse or Dependents shall have any right to, or interest in, any assets of the Employer upon termination of employment or otherwise, except as provided from time to time under the Plan, and then only to the extent of the benefits payable under the Plan to such Employee, Spouse or Dependents. 9.08 Tax Effects Neither the Employer nor the Plan Administrator makes any warranty or other representation as to whether any payments received by a Participant, his Spouse or Dependents hereunder will be treated as includible in gross income for federal or state income tax purposes. 9.09Multiple FunctionsAny person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. 9.10 Gender and Number Masculine or feminine pronouns include all genders, and the singular shall include the plural, unless indicated otherwise by the context. 9.11 Headings The Article and Section headings contained herein are for convenience of reference only, and shall not be construed as defining or limiting the matter contained thereunder. 9.12 Applicable Laws The provisions of the Plan shall be construed, administered and enforced according to the laws of the State of . 122
MissionSquare Retirement Health Savings Program Return Book

40 9.13 Severability Should any part of this Plan subsequently be invalidated by a court of competent jurisdiction, the remainder thereof shall be given effect to the maximum extent possible. IN WITNESS WHEREOF, we have executed this Plan Agreement the date and year first written above. EMPLOYER By: Title: Signature of Authorized Official ATTEST (if applicable) By: Title: Signature of Attestor 123
MissionSquare Retirement777 North Capitol Street, NE Washington, DC 20002-4240(800) 669-7400www.missionsq.org63111-1223-826Rev. 1/24 124

AGENDA STAFF REPORT

City Council Meeting

CITY COUNCIL BUSINESS

Agenda Item No. 13.1
October
9, 2024
Approval of the Purchase of Real Property for a Public Works Yard Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staff recommends that the City Council:

1 .

Approve the Agreement for Purchase and Sale of Real Property (Including Escrow Instruc(ons) to acquire parcel numbers 144-080-010 and 144-080-011 located along the northside of Chandler Street, between Hellman Avenue and Hall Avenue, for a City Public Works Yard; and 2 .

Authorize the City Manager to sign the agreement and take all necessary ac(ons to complete the purchase of the subject property, including but not limited to execu(ng the cer(ﬁcate of acceptance of the grant deed; and
3 .

Authorize the City Manager to approve minor modiﬁca(ons to the form of Agreement prior to execution, with the consent of the City Attorney.

Summary
Staﬀ is recommending the City Council approve the Purchase and Sale of Real Property Agreement (agreement) and Escrow Instruc(on for the acquisi(on of two parcels (property) numbers 144-080- 010 at 14835 Chandler Street, and 144-080-011 at 14821 Chandler Street, located along the northside of Chandler Street, between Hellman Avenue and Hall Avenue, for a Public Works Yard.

Purchase price of the property is $1,250,000.

Background
During the closed session at the City Council Mee(ngs on November 8, 2023, and February 14, 2024 the City Council authorized the Public Works Director/City Engineer to nego(ate an agreement with 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752 951.361.0900 |
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125
the property owner, Trinidad Perez, to acquire parcel numbers 144-080-010 and 144-080-011, located along Chandler Street, between Hellman Avenue and Hall Avenue. Each parcel is 2.06 acre, for a total of 4.12 acres. Of the 4.12 acres, approximately 2.27 acres of the northern half of the property has been condemned as ﬂood easement, see Lot 50 and 51 in AFachment 1 - Vicinity Map.

As such, occupiable buildings cannot be built on the easement, but vehicles, raw material such as sand and gravel, and other spare assets like light poles and signal poles can be stored in this area.

Approximately 1.85 acres is buildable, and the City believes this is suﬃcient to suit its needs for a Public Works Yard. This restricted use has been accounted for in the appraisal, AFachment2 - Appraisal. Parcel numbers 144-080-010 (14835 Chandler Street) has been appraised for $486,000, and 144-080-011 (14821 Chandler Street) for $564,000 for a combined total of $1.05M. Purchase price of the 4.12 acres is $1.25M, approximately $303k per acre. The City is agreeing to pay above the appraised fair market value because the property holds a unique value for the City that is not present in the general real estate market, as the City can make make produc(ve use of the areas subject to the ﬂood easement. Furthermore, the City would incur addi(onal costs if it were to ini(ate eminent domain proceedings that are avoided by agreeing to pay a price that is slightly above market value.

The Public Works Department has been ac(vely seeking to grow its Maintenance Division by hiring addi(onal staﬀ to increase the level of service to the community. In addi(on to staﬃng, the Department is increasing the number of vehicles and needs a Public Works Yard to store vehicles, equipment, and support staff.

The City obtained a consultant to conduct and provide an Phase 1 Environmental Site Assessment (ESA) of the parcel. Addi(onally, the following services will be required as due diligence prior to escrow closing and its expenses have been budgeted: surveyor to produce an ALTA survey map, geotechnical engineer to prepare geotechnical tes(ng and report, geotechnical engineer for possible Phase 2 ESA pending Phase 1 result, escrow closing cost, and etc.

Environmental
The purchase of property is exempt from review under the California Environmental Quality Act (CEQA) under CEQA Guideline 15061(b)(3) as it can be seen with certainty that the purchase of the property will not result in signiﬁcant environmental impacts. The purchase of the property does not commit the City to construct any improvements and the City's proposed storage uses are similar to the uses already being made of the property. Future improvements will be evaluated for compliance with with CEQA.

Strategic Plan Action - Priority Level: 2
| Target #: B
| Goal #: C
Developing and branding Eastvale.

Fiscal Impact
Total ﬁscal impact for this project is $1,250,000 for the land acquisi(on only. Addi(onal geotechnical inves(ga(on, environmental site tes(ng, survey map prepara(on, escrow, etc. will be required as well. Budget totaling $2,400,000 was appropriated in the ﬁscal year 2023-24 budget within the General Capital Projects Fund under account 600-500-6630-95021-0000; this budget will be rolled into the new 2024-25 ﬁscal year as the budget remained unspent as of June 30, 2024. As such, there is suﬃcient available budget to facilitate the land purchase. The land acquisi(on will not trigger any ongoing opera(onal costs borne by the General Fund, however future improvements constructed 12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752 951.361.0900 |
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on the property will have an annual operational cost impacting the General Fund.

Prior City Council/Commission Action
Closed Session, City Council Meeting – November 8, 2023 Closed Session, City Council Meeting – February 14, 2024 Attachment(s)
Attachment 1 - Vicinity Map

Attachment 2a - Appraisal, 14821 Chandler

Attachment 2b - Appraisal, 14835 Chandler

Attachment 3 - Purchase Sale Agreement

12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
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127
Vicinity Map

NOT TO SCALE
Parcel Nos: 144-080-010 and 144-080-011

Property Locations
128

Chandler St
129

APPRAISAL REPORT

OF THE

UNDERLYING LAND

LOCATED AT

14821 CHANDLER STREET

EASTVALE, CALIFORNIA 92880

AS OF

JUNE 19, 2024

130
425 East Colorado Street, Suite 640 · Glendale, CA 91205 · tel: (213) 532-3800 · fax: (213) 532-3807 · www.btiappraisal.com

June 28, 2024

Mr. Gabriel Mayorguin
Assistant Engineer
City of Eastvale
12363 Limonite Avenue
Eastvale, California 91752

Re: 14821 Chandler Street Land, UD/2024

Dear Gabriel:

At your request, we physically inspected the underlying land located at 14821 Chandler Street, Eastvale, California 92880 in order to prepare an appraisal report. This is an update of our appraisal report of the subject property dated October 30, 2023.

It is our opinion that , based on the data and analysis contained in the accompanying report, the fee simple fair market value of the subject property on June 19, 2024 was Five Hundred Sixty Four Thousand Dollars.

$564,000.00

It should also be noted that the subject property is delinquent in real estate taxes for the 2023-2024 year in the amount of $4,655.48.

Very truly yours,

Stephen O’Rourke, ASA, R/W-AC
Executive Vice President
Certified General Real Estate Appraiser
#AG036788
Ben F. Tunnell III
Chairman
Certified General Real Estate Appraiser
#AG006964

BT:kp
N5883-2.rpt
131

SUMMARY OF SALIENT FACTS & CONCLUSIONS

Client: City of Eastvale
Owner: Trinidad Perez, Estate of Jose Trinidad Perez
Property Type: Underlying land
Property Location: 14821 Chandler Street
Eastvale, CA 92880

Assessor Parcel Number(s): 144-080-011
Purpose of the Appraisal: To determine the fair market value of the subject property.

Intended Use: To assist the client in reviewing the asset value of the subject property for possible purchase.

Property Rights Appraised: Fee Simple Estate
Date of Report: June 28, 2024
Date of Value: June 19, 2024
Parcel:

Size: 89,925 gross square feet (per map)
43,362 net square feet

Shape: Rectangular
Zoning: A-1, Light Agriculture
Topography: Level
Highest & Best Use:

As Vacant: Hold for future development
Legally Conforming: Conforming
Value Conclusion: $564,000
132

TABLE OF CONTENTS

LETTER OF TRANSMITTAL

SUMMARY OF SALIENT FACTS & CONCLUSIONS

INTRODUCTION
Assumptions & Limiting Conditions ............................................................................ 1 Intended Use & Users of the Appraisal Report ............................................................ 2 Property Interest Being Appraised ................................................................................ 2 Identification of Real Estate Being Appraised .............................................................. 3 Tax Information ............................................................................................................ 3 County Assessor Plat Map ............................................................................................ 4 Date of Value ................................................................................................................ 5 Fair Market Value Definition........................................................................................ 5 Sale and Listing History of Subject .............................................................................. 5 Exposure Time .............................................................................................................. 6 Marketing Time ............................................................................................................ 6 Scope of The Appraisal ................................................................................................. 7 Regional Analysis ....................................................................................................... 10 Market Area Analysis ................................................................................................. 26

SUBJECT
Subject Photographs.................................................................................................... 27 Land Description ......................................................................................................... 34 Site Improvements ...................................................................................................... 36 Environmental Checklist ............................................................................................. 36 Highest and Best Use .................................................................................................. 37

VALUATION
Approach To Value ..................................................................................................... 39 Sales Comparison Approach ....................................................................................... 40

CONCLUSION
Value Conclusion ........................................................................................................ 53 Information On Our Company .................................................................................... 54 Representative BTI Appraisal Client List ................................................................... 55 Certification ................................................................................................................ 56

EXHIBITS
Legal Description .......................................................................................................... 1 Flowage Easement ........................................................................................................ 2

133

1 ASSUMPTIONS & LIMITING CONDITIONS

We believe the information furnished to us is reliable but assume no responsibility for its accuracy.

This appraisal assumes all elements of the subject property are in serviceable condition. Since BTI Appraisal is not a licensed building inspector, this report is subject to re- evaluation if elements of the property are found to be unserviceable.

If financial statements, operating histories or any other data relating to the income and expenses attributed to the subject property have been utilized, they were provided by the owner, or representatives of the owner, and have been accepted without furth er verification, except as specifically set forth in this report.

We assume no responsibility for legal matters, nor do we render an opinion as to the title of the subject property. The legal descriptions given in this report were furnished by others, based on our review of public records as noted in the report, and are assumed to be correct.

The appraiser made no legal survey , nor has one been commissioned.

Therefore, any plat, diagram or previous survey appearing in the report is only for the purpose of assisting the reader to visualize the subject property. Any sketch of the subject property included in this report has been prepared by our f irm and has been relied upon unless specifically stated in this report.

The allocation of total value to land or building, if shown in this report, is invalidated if used separately or in conjunction with any other appraisal.

This report has been made without the benefit of a current soil or structural analysis by a competent engineer, a building inspection by a certified inspector or a termite report unless otherwise stated . We offer no opinion as to the structural integrity of retaining walls or foundations, nor to present or future adverse effects due to the presence of asbestos, soil contaminants or other natural or man-made pollutants.

We are unaware of any lawsuits or contractual obligations, other than those specifically noted in this report, that would enhance or diminish the value of the subject property or its assets. If the presence of such matters is revealed, we reserve the right to modify our opinions expressed in this report.

The Americans with Disabilities Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey and/or analysis of the subject property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the subject property , together with a detailed analysis of the requirements of the ADA, could reveal that the subject property is not in compliance with one or more elements of the ADA. If so, th is fact could have a negative 134

2 effect upon the value of the subject property. Since the appraiser has no direct evidence relating to this issue, the appraiser did not consider possible noncompliance with the requirements of the ADA in estimating the value of the subject property.

Possession of this report does not carry with it the right of publication, nor may it be used for any purpose by any person but the client without the previous written consent of the client and BTI Appraisal. Testimony or attendance in court by reason of this appraisal shall not be provided unless previous arrangements have been made.

INTENDED USE & USERS OF THE APPRAISAL REPORT

The intended use of the appraisal is to assist the client , City of Eastvale , in reviewing the asset value of the subject property for possible purchase.

PROPERTY INTEREST BEING APPRAISED

We are appraising the following interest in the subject property:

Fee Simple Estate: “Absolute ownership unencumbered by any other interest or estate; subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.”
135

3 IDENTIFICATION OF REAL ESTATE BEING APPRAISED

We will appraise the underlying land described by the document as provided by Datatree, as that certain real property situated in the State of California, County of Riverside, City of Eastvale, and more particularly described in Exhibit 1 – Legal Description.

This property is commonly referred to as:

14821 Chandler Street
Eastvale, California 92880
Riverside County
Latitude and Longitude: 33.947730/-117.606930

TAX INFORMATION

Assessor’s Parcel Number: 144-080-011

Assessed Value: Land $ 130,627
Improvements 243,191
Total $ 373,818

Tax Rate Area: 027-002
Taxes: $4,197.72 (2023)
General Tax Rate: 1.11745%
Direct Assessments: $20.49

The assessed value and real property taxes of the subject property are the result of California State Proposition 13, a statewide ballot issue passed in 1978. The proposition limits taxes to 1% of the property's assessed value, plus a factor for bonded county or city debt or special assessments. Assessed values are modified upon most transfers based upon the market value of the property at that time. Finally, all assessed values may be adjusted upward 2% annually unless they have been reassessed in the year of a transfer. In our a nalysis of the subject property, we have considered both the long and short-term effects on value due to any change in the tax liability of the property. Our research indicates the property taxes are currently delinquent for the 2023-2024 year in the amount of $4,655.48. 136

4 COUNTY ASSESSOR PLAT MAP

137

5 DATE OF VALUE

The appraiser performed a physical inspection of the subject property on October 27, 2023. At the request of City of Eastvale , the value of this repor t is specifically applicable to June 19, 2024.

FAIR MARKET VALUE DEFINITION

Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) Buyer and seller are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (3) A reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and ( 5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Source: 12 C.F.R. §225.62 (h)

SALE AND LISTING HISTORY OF SUBJECT

The subject property is currently owned by Trinidad Perez/The Estate of Jose Trinidad Perez. Based on a review of public records, there have been no transfers, sales or listings in the last three years.

138

6 EXPOSURE TIME

Exposure time is “the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective time estimate based upon an an alysis of past events assuming a competitive and open market. ” In assessing the subject's expected exposure time we are assuming that the subject would have been professionally marketed through a qualified broker or owner, that the prope rty would have been listed at a reasonable asking price with an owner willing to accept a reasonable offer and that the buyer and seller would not have b een influenced by undue stimuli . We estimate the subject's exposure time would have been within 6 months, based on a review of 4 comparable sales.

MARKETING TIME

“An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after effective date of an appraisal. ” In assessing the subject's expected marketing time if offered for sale, we are assuming that the subject will be professionally marketed through a qualified broker or owner, that the property will be listed at a reasonable asking price with an owner willing to accept a reasonable offer and that the buyer and seller will not be influenced by undue stimuli. At the present time, we are unaware of any new develop ments expected to occur in the near future which would negatively or positively affect the marketability of the subject compared to recent trends of competitive properties in the area. Marketing time in the subject area, based on current supply and demand , is typically within 6 months, based on a review of 4 comparable sales.

139

7 SCOPE OF THE APPRAISAL

The following steps were taken in arriving at our final estimates of value of the subject property:

1. After receiving the assignment, a preliminary search was made to determine market trends and other significant factors pertinent to the subject property.

In order to develop credible assignment results, this appraisal included research and analysis of property characteristics, taxes, zoning, restrictions and encumbrances.

The Sales Comparison Approach included research of market trends, new construction, absorption, marketing and exposure time, comparable sales and analysis of sale comparables.

In this case the sales comparison is the one applicable method for the valuation of underlying land.

Data systems we utilize include, but are not limited to, the following:

Datatree, provided by First American, is also a comprehensive on-line database providing a second, confirming source for data used in our reports.

CoStar Comps, provided by the CoStar Group, is an on -line database which provides detailed sales and financial information for commercial, industrial, special purpose and apartment properties throughout the United States.

Real Estate Multiple Listing Services provide on -line connections to MLS cooperatives throughout most of Southern California, allowing the appraiser to gather up -to-the-minute information on property sales , rentals and current listings.

In addition to our in -house data systems we interview, by telephone or in person, real estate brokers, property owners, buyers and sellers of property, and tenants, as well as governmental and non -governmental entities having jurisdiction or influence in current market trends and attitudes. We then analyze and reconcile the collected data to form our opinion of value.

2. A physical inspection of the subject property was performed. However, the appraiser is not an expert in such matters as pest control, structural engineering, hazardous waste, soil slippage, electrical, plumbing, roofing, foundation systems, etc., and no warranty is given with regard to these elements. As needed, inspections by various l icensed professionals within these fields might be recommended with the final estimate subject to their findings.

140

8 3. This appraisal report was completed in accordance with requirements dictated by the Uniform Standards of Professional Appraisal Practice Standard Rule 2-3, 2024 @ The Appraisal Foundation . This report includes such data and information needed to lead the reader to a similar estimate of our fair market value conclusions.

4. The Dictio nary of Real Estate Appraisal, 7th edition , as published by the Appraisal Institute, is the source of all definitions in this appraisal report, unless otherwise noted.

141

9 REGIONAL MAP

142

10 REGIONAL ANALYSIS

Data Source

Quantitative data is supplied by CoStar and provides a view of market activity across the spectrum of all properties in the industrial, office and retail sectors. When a market area is small, we make no effort to limit the type of industrial, office or retail properties included in the search so that we can maximize the number of properties returned to illustrate overall market trends.

Properties included in the CoStar database are more heavily weighted to newer and high profile properties represented by brokers using CoStar’s services to market commercial properties. As a result, vacancy rates tend to be understated and market rents tend to be above average. Data presented in this section of the report is only to identify overall trends and is not specifically applicable to the subject of this report.

Analysis

The combination of San Bernardino and Riverside Counties is known as the Inland Empire. It is the third largest metropolitan area in California, and reports increasing population data. In 2022, the population of the Inland Empire was nearly 5 million perso ns, a 12% increase over the figures of the 2010 census. As of the 2020 U.S. Census, the population was 2,181,654, making it the fifth -most populous county in California and the 14th -most populous in the United States. The population of the Inland Empire is larger than 24 states in the nation.

The Inland Empire is comprised of 52 incorporated cities within an area of 27,669 square miles. Its vast area stretches eastward from the edges of Orange, Los Angeles, and Kern Counties all the way to the borders of Arizona and Nevada. To the south, Riverside County shares a border with San Diego as well as Imperial County. To the north, San Bernardino County borders Inyo County. The area is a major transportation hub through which several interstate highways pass, including the I -15 and I -215 freeways ; major north-south routes. Interstates 10 and 40 and state highways 60 and 91 al so provide direct access to and from metropolitan Los Angeles and Orange County, joining up with national highways at the California/Arizona border.

Riverside is trisected by two transcontinental rail lines that carry over 75% of the freight handled by the ports of Long Beach and Los Angeles. Passenger railway lines also transit the area, provided by Amtrak/Metrolink, and the Riverside and San Bernardino Transit Authorities. Bus routes to and from Orange and Los Angeles Counties are also plentiful .

Additionally, th ere are commercial airports in both Ontario and Palm Springs, as well as several municipal airports throughout the two -county area. The regio n is easily accessed by freeway, air, and rail transit from Los Angeles, Long Beach and San Diego airports and harbors.

143

11 The Inland Empire maintains a rich arts, music, recreation and cultural component and a full range of educational opportunities, from local school districts to prominent higher education institutions. The University of California at Riverside, Loma Linda University, California State University San Bernardino, and the University of Redlands are all in the Inland Empire and lure top students and professors from around the world.

Economy

The Inland Empire has been Southern California’s growth leader in terms of overall economic output. In 2007, Riverside County was the second fastest growing county in California with a population of over 2.0 million residents, while San Bernardino County recorded the fifth largest numeric population increase in the state, according to the Department of Finance. In 2007 the U.S. Census Bureau and the Los Angeles Times stated that Riverside County had replaced Los Angeles County as the state’s top destinatio n for new residents. A report by the US Conference of Mayors predicts that the area will continue to grow, reaching an estimated population of 7.2 million in the next 30 years. If so, it will be one of the country’s top 10 largest metro areas by 2046.

Companies are drawn to the Inland Empire for its large supply of available land and affordable housing for employees. While problems in housing and other sectors created a difficult environment between 2007 into 2009, the Inland Empire economy saw significant improvement in 2013, which continued steadily until the worldwide health crisis slowdown in 2020. More recently, as leasing and consumer spending begins to return to pre -pandemic levels, many business sectors are reporting an improved economic outlook.

The top employers in the Inland Empire are The Counties of Riverside and San Bernardino, the University of California Riverside, Loma Linda University, Kaiser Permanente, the U.S. Marine Corps Air Ground Combat Center, Ft. Irwin National Training Center and March Air Reserve Base. Construction companies are also major employers in the area, as the region regains its growth momentum after the Covid-19 slowdown.

In addition to retail and services industries, the industrial sector is a prime component of the economic base in the Inland Empire. Products manufactured in the region include medical devices and equipment, electronic components, light aircraft assembly , electrical instruments, insulation materials, fabricated metal items, cement, clay tile, mobile homes, and recreational vehicles, just to name a few. When pandemic -related shutdowns caused a dramatic shift in online retail volume, Riverside and San Berna dino’s role in the e - commerce supply chain became increasingly evident. The area’s central location continues to attract further development for use in the warehousing, fulfillment, and transportation sectors.

The unemployment rate in the Riverside -San Bernardino was 4.9% in April 2024. This compares with an unemployment rate of 5.3% for California and 3.9% for the nation during the same period. The unemployment rate was 4.9% in Riverside County, and 4.8% in San Bernardino County. While t he rates are just slightly below the state’s overall unemployment rate of 5.3%, they are relatively similar to the 4.8% reported for the Inland Empire in April 2024.
144

12 Residential Market

The Inland Empire was one of the fastest growing markets in California twice in the last decade. Both Riverside and San Bernadino enjoyed strong housing markets from 2002 to 2006 with increasing construction, sales, and median price. First -time buyers flocked to the area; assisted by adjustable rates and subprime mortgages. Beginning in 2007, like most housing markets across the nation, the Inland Empire was severely impacted by rising foreclosures and defaults on subprime mortgages. As interest rates incre ased, foreclosures in the Inland Empire more than doubled, to an astounding 126,000 in 2008. More recently, while there are still foreclosure properties in the county, the number is nowhere near the 2008 figure.

According to California Forward, a non -profit alliance born out of the California Economic Summit in 2019, the Inland Empire has a 14% higher home ownership rate than the state.

Throughout much of 2022, the median price for a home in California had been rising steadily. The pandemic created an unprecedented sudden demand for larger suburban homes as people transitioned to working remotely. With the supply rush, coupled with rock - bottom mortgage rates, the market became a seller’s delight. Existing single family home prices repeatedly hit record highs, month after month.

In 2023, most of Riverside and San Bernardino Counties has experience d decreasing sale prices because of continued increases in interest rates by the F ederal Reserve Board. Higher mortgage interest rates, combined with the swift home price appreciation in the last several years have lessened demand for housing and impacted buyers’ purchasing power and ability to afford increased monthly payments.

Redfin1 reported in May 2024, Riverside County single family prices were up

4.1% compared to last year, selling for a median price of $ 635,000. On average, homes in Riverside County sold after 39 days on the market compared to 41 days last year. There were 2,029 homes sold in May this year, down from 2,132 last year.

Redfin reported in May 2024, Riverside County condominium prices were up

5.3% compared to last year, selling for a median price of $474,000. On average, condominiums in Riverside County sold after 57 days on the market compared to 45 days last year. There were 355 condominiums sold in May this year, down from 388 last year.

Redfin reported in May 2024, San Bernardino County single family prices were up 4.1% compared to last year, selling for a median price of $ 512,906. On average, homes in San Bernardino County sold after 36 days on the market compared to 40 days last year. There were 1,435 homes sold in May this year, down from 1,546 last year.

Redfin reported in May 2024, San Bernardino County condominium prices were up 11.4 % compared to last year, selling for a median price of $ 560,000. On average, condominiums in San Bernardino County sold after 36 days on the market compared to 34 days last year. There were 153 condominiums sold in May this year, up from 136 last year.

1 The information presented is based on average selling prices for each period and may not be indicative of home prices across the board.
145

13 Retail Market

The Inland Empire has extensive commercial and retail opportunities. On a large scale, there are numerous regional malls which are anchored by notable retailers such as Nordstrom, Macy's, Saks Fifth Avenue, and Forever 21. The region is home to California’ s largest outlet mall, Ontario Mills. Target and Kohl’s anchor many of the area’s retail centers as well. There are also many neighborhood shopping malls, primarily anchored by grocery stores like Vons and Ralphs. Numerous mini -malls, strip retail centers, boutiques, and storefronts run by small businesses provide local level shopping to the many neighborhoods.

The Inland Empire retail market experienced an increase in the vacancy rate and an increase in the asking rental rate in the first quarter of 2024. The CoStar Group reported the asking rental rate as $2.19 per square foot per month, up from $2.17 reported in the previous quarter. The vacancy rate was reported at 5.53%, up from 5.32% reported in the previous quarter.

Retail - Vacancy and Asking Rental Rates

Retail - Absorption and Deliveries

146

14 Office Market

The Inland Empire office market experienced an increase in the vacancy rate and an increase in the asking rental rate in the first quarter of 2024. The CoStar Group reported the asking rental rate as $2.28 per square foot per month, up from $2.27 reported in the previous quarter. The vacancy rate was reported at 6.04%, up from 5.90 % reported in the previous quarter.

Office - Vacancy and Asking Rental Rates

Office - Net Absorption and Deliveries

147

15 Industrial/Flex Market

The Inland Empire industrial/flex market experienced an in crease in the vacancy rate and no change in the asking rental rate in the first quarter of 2024. The CoStar Group reported the asking rental rate as $1.16 per square foot per month, unchanged from $1.16 reported in the previous quarter. The vacancy rate was reported at 6.9%, up from 5.7 % reported in the previous quarter.

Industrial/Flex - Vacancy and Asking Rental Rates

Industrial/Flex - Net Absorption and Deliveries

148

16 Multifamily Market

The Inland Empire multifamily market experienced an increase in the occupancy rate and an increase in the market rental rate in the first quarter of 2024. The CoStar Group reported the market rental rate was $1,833 per unit per month, up from $1,805 per unit per month reported in the previous quarter. The occupancy rate was reported at 94.2%, up from

94.0% reported in the previous quarter.

Multifamily - Occupancy and Market Rental Rates

Multifamily - Absorption, Deliveries & Vacancy

149

17 Conclusion

The Inland Empire was one of the fastest growing areas in the nation up to 2007, but its rapid development made the region more susceptible to the economic crises of the Great Recession. Foreclosures soared to new records in 2008, and the construction sect or endured major setbacks. Since rebounding from the recession, the Inland Empire has established itself as one of Southern California’s most important hubs for transportation.

The counties of the Inland Empire are showing marked improvement in all sectors during this year’s recovery from the pandemic. B usiness and economic activity continues to steadily increase , and unemployment rates show significant improvement, recovering from historic declines during the second quarter of 2020. The United States has largely mirrored this growth, and both the nation and the Inland Empire are poised for more growth into 2023.

While the enormous difficulty inflicted on the entire US economy by the Covid- 19 pandemic hit the Inland Empire hard, it also served to benefit the region’s future. More people than ever before have transitioned to working remotely, triggering a migration from urban cores to more spacious and affordable housing such as that in the Inland Empire. As the Inland Empire’s population continues to expand, it’s anticipated that retail spending in the area will also. Additionally, a s more consumers turn to online shopping, it is predicted that the warehouse, logistics, transport, and distribution industries that are currently set ting up in the Inland Empire will make the region a prominent factor in the state’s overall economy.

In 2024, it is widely predicted that additional leasing velocity in the retail sector will grow, as “non -essential” businesses continue reopening . It’s also expected that more multi-tenant investments will be active from a diversity of buyer types. The overall picture of the Inland Empire is an optimistic one, as low interest rates continue, the debt markets relax and some of the uncertainty caused by COVID-19 is alleviated.

150

18 LOCAL CITY AREA MAP

151

19 EASTVALE, CALIFORNIA

Eastvale is a city in northwestern Riverside County, part of the Inland Empire region of Southern California. Portions of the Santa Ana River traverse the southern portion of the city. According to the 2020 Census data, the city of Eastvale is home to 69,757 residents, a 29.98% population increase from the 53,668 individuals recorded in the 2010 Census data .

In 2023, the population estimate had grown to 74,518. According to the Eastvale area plan, Eastvale has a total area of 13.1 square miles, of which 12.5 square miles is land and 0.6 square miles, or 4.76%, is water. The city’s boundaries border the San Bernardino County Line both to the west, at Hellman Avenue, and the north, at Bellegrave Avenue. Its eastern boundary is Interstate 15. The Los Angeles County line is approximately 8 miles northwest of Eastvale, and the Orange County line approximately 5 miles southwest. The proximity of these two heavily commercialized counties, and the fact that Eastvale is r ight between the Interstate 15 and California State Routes 91, 60, and 71, has made Eastvale a popular home for commuters.

Humans have lived along the Santa Ana River for at least 9,000 years. In the period immediately before and during European colonization, there were four distinct indigenous groups in the area. In 1838, the area became known as “Rancho Jurupa” under a Mexican land grant to Senõr Don Juan Bandini. What is now Eastvale was the westernmost quarter of the former rancho. In February1848, a vast portion of the southwest, including present day California, was ceded to the United States at the end of the Mexican American War. Two years later, in 1850, California entered the Union as a free, non-slavery state.

For 65 years, between 1889 and 1954, the Fuller family owned about 5,000 acres, including more than half of present -day Eastvale. The area between Schleisman Road and the river was included within the ranch’s boundaries. O.R. Fuller named the ranch the “Fuller RanchO” with a capital “O” at the end, most likely for the first letter of his first name, demonstrated on all the old ranch paperwork. Fuller built up the ranch’s dairy business and began home delivery routes in Pomona, Ontario, and San Bernardino. He turned part of their home into a guest ranch in 1937, expanding the house to accommodate as many as 25 guests. Lively dinners in the ornate dining room attracted Hollywood celebrities like W.C. Fields, Groucho Marx, Spencer Tracy, and Mary Pickford.

Eastvale, spelled as two words, "East Vale," in early records, was first an elementary school district. From the formation of Riverside County in 1893 up until 1947, it served the area for 54 years, before merging with Corona and Norco into a school district .

Today, the resulting Corona-Norco Unified School District is a highly accredited public school system, named the top Exemplary School District of California in 2019.

From the 1950s and into the 1980s, the extended Los Angeles population continued to expand into outlying farmlands. Eastvale was still a primarily rural area, but dairy farms and agricultural areas were increasingly sharing space with residential development.

Eastvale continued to suburbanize in the 1990s, accommodating the steady influx of people from neighboring Orange and Los Angeles Counties in search of affordable housing. A large portion of the area’s homes were sold to the community during the early and 152

20 mid-2000s at highly inflated prices; fueled by the subprime mortgage industry. This made Eastvale particularly vulnerable when the United States housing bubble burst in 2007.

According to the Zillow database, the median home in Eastvale that had been value d at $601,000 in June 2006, fell drastically to a median value of $304,000 by June 2009. This represented a 50% decrease in home values over a span of three years. More recently, however, Eastvale has left those figures to history. In January 2022, Zillow reported the median home price in Eastvale was $856,128, an increase of 28.8% over the past year. As of August 2023, Zillow reported the median home price of $878,062.

Incorporated in 2010, Eastvale is one of the newest cities in Western Riverside County. The city has kept its ties to Corona and Norco, sharing both a school district and two zip codes: 92880 with the City of Corona, and 91752 with the City of Jurupa Valley. The city also contracts law enforcement and fire department services from Riverside County, although patched as city service personnel.

Eastvale is a fast -growing city, due to competitively priced housing, highly rated schools, multiple community parks, and the city’s proximity to transportation corridors. Its streets are now lined with residential houses and upscale townhomes built within the last decade.

In 2016, Eastvale was named by Money Magazine as #1 on the “Best Places to Live in California” list. That same year, WalletHub ranked it #5 of the “Best Places to Raise a Family in California.”

The top employers in Eastvale are the Amazon and Walmart Fulfillment Centers, and the school district. Retail opportunities in Eastvale range from major retail ers such as Costco, Albertson’s and Home Depot to small businesses and artisanal markets. The city’s many local businesses reflect the community ’s diversity, offering residents a variety of shopping options.

In April 2024, the unemployment rate for Eastvale, CA was 3.8%, which is below both the 4.9% reported for Riverside County and 5.3% reported for the entire state of California in the same period. Many of the area’s residents are commuters. The nearby Riverside-San Bernardino-Ontario MSA is the 2 nd largest metropolitan area in California by labor force and employment size.

During the first part of 2021 the median price for a home in California rose steadily. Throughout 202 2, existing single family home prices repeatedly hit record highs month after month. California continues to be a highly active residential market despite seeing a statewide population decline last year, for the first time in more than a century. In 2023, most of Eastvale has experience decreasing sale prices because of continued increases in interest rates by the Federal Reserve Board . Higher mortgage interest rates, combined with the swift home price appreciation in the last several years have lessened demand for housing and impacted buyers’ purchasing power and ability to afford increased monthly payments. 153

21 For the 1st quarter of 2024, CoreLogic2 reported the following home price data for Eastvale, CA:

Community name ZIP Code
Condominiums Single Family Homes SFR Only
Sales
Count
Condos
Price
Median
Condos
($1,000)

Price %
Change
from
2023
Sales of
Single
Family
Homes
Price
Median
SFR
($1,000)
Price %
Change
from
2023
Median
Home
Price/Sq. Ft.

Eastvale/Mira Loma 91752 5 $590 1.3% 32 $830 8.4% $345
Eastvale/Corona 92880 8 $750 6.5% 51 $920 2.2% $304

Data Source

Quantitative data for retail, office, industrial and multi -family figures is supplied by CoStar to provide a view of market activity across the spectrum of the industrial, office and retail sectors. When a market area is small, we make no effort to limit the type of industrial, office or retail properties included in the searc h; to maximize the number of properties returned and illustrate overall market trends. Properties included in the CoStar database are more heavily weighted to newer and high -profile properties , represented by brokers using CoStar to market commercial properties. As a result, vacancy rates tend to be understated and market rents above average. Data presented in this section is presented only to identify overall trends. It is not specifically applicable to the subject of this report.

2 The information presented is based on average selling prices for each period and may not be indicative of home prices across the board.

154

22 Retail Market

The Eastvale retail market experienced an increase in the vacancy rate and an increase in the asking rental rate in the first quarter of 2024 . The CoStar Group reported the average asking rental rate as $3.01 per square foot per month , up from $3.00 reported in the previous quarter. The vacancy rate was reported at 1.99%, up from the 1.85% reported in the previous quarter.

Retail Vacancy and Asking Rental Rates

Retail Absorption, Deliveries and Vacancy

155

23 Office Market

The Eastvale office market experienced an increase in the vacancy rate and an increase in the asking rental rate in the first quarter of 2024. The CoStar Group reported the average asking rental rate as $ 2.68 per square foot per month, up from the $2.65 reported in the previous quarter. The vacancy rate was reported at 7.5%, up from the 0.0% reported in the previous quarter.

Office Vacancy and Asking Rental Rates

Absorption, Deliveries and Vacancy

156

24 Industrial/Flex Market

The Eastvale industrial/flex market experienced no change in the vacancy rate and an increase in the asking rental rate in the first quarter of 2024. The CoStar Group reported the average asking rental rate as $1.11 per square foot per month, u nchanged from the $1.11 reported in the previous quarter. The vacancy rate was reported at 9.4%, up from the 1.8% reported in the previous quarter.

Industrial/Flex Vacancy and Asking Rental Rates

Industrial/Flex Absorption, Deliveries and Vacancy

157

25 Multi-Family Market

The Eastvale multi-family market experienced an increase in the occupancy rate and a decrease in the market rental rate in the first quarter of 2024. The CoStar Group reported the average market rental rate as $2,879 per unit per month, down from the $3,006 reported in the previous quarter. The occupancy rate was reported at 95.95%, up from the 95.40% reported in the previous quarter.

Multi-Family Occupancy and Market Rental Rates

Absorption, Deliveries and Vacancy

158

26 MARKET AREA ANALYSIS

Market area is defined as: “ The area associated with a subject property that contains its direct competition”.

The subject property's market area boundaries are considered to be State Route 60 to the north, I-15 to the east, Santa Ana River and Norco to the south and Hellman Avenue to the west. The subject property is located on the north side of Chandler Street, which is a primary residential concrete street in the southwestern part of the City of Eastvale. The subject property is located 4 miles southwest of the downtown Eastvale central business district. This area is primarily a residential market which was originally developed in the early 2010’s. The subject does not conform to land uses in the area . In the Chandler area, there are potentially incompatible land uses adjacent to each other (homes, trucking yards and horse corrals coexist in the Chandler area), according to the City of Eastvale website and our field inspection. The land use on Chandler Street is primarily agricultural on the north side and residential on the south side in this area. Buildings in the area are used for agricultural, church and single family residences. Along Chandler Street, the land is agricultural in nature with nearby new residential construction. This agricultural land is anticipated to be converted to residential in the near future. Over the last several years the area has seen moderate development. Given the current economic trends in the area, it is anticipated that a change in use of properties will occur in the foreseeable future from agricultural to residential.

159

27 SUBJECT PHOTOGRAPHS
(OCTOBER 27, 2023)

Aerial photo

Residence one
160

28 Residence two

Rear view of residence two

161

29 Unpermitted structure

Rear area of property

162

30 Horse corral

Front view of subject

163

31 Front view of gates and fencing

Front view main entrance

164

32 Carport parking

Street scene looking east, subject on left

165

33 Street scene looking west, subject on right
166

34 LAND DESCRIPTION

The title report noted various exceptions for an easement for water pipelines, a potential prohibition to human habitation and perpetual easement for flood control, an easement for underground electrical supply, easement for public utilities, condemnation of a portion of t he site by the Orange County Flood Control District (OCFCD) f or a flowage easement and other non -realty exceptions. Many of the source documents could not be read or interpreted due to their historical nature. It should be noted that the subject property is not located in FEMA Flood Hazard Zone X, an area outside the 100 year flood.

Based on review of the OCFCD exception documents, we note that the northern portion of the subject parcel is impacted by both a US Government flood control easement and the OCFCD flowage easement, see Exhibit 2-Flowage Easement. The document reports that no structures for human habitation are allowed in the easement area and that any other structures must receive approval from OCFCD prior to construction. As reported in the legal description the OCFCD flowage easement totals 45,284 square feet. The client has estimated the US Government flood easement areas (two small triangular pieces) at 1,2 79 square feet.

Therefore, the subject is encumbered by 46,5 63 square feet of flood control easements and has 43,362 square feet of unencumbered usable square footage.

Area: 89,925 gross square feet, based on County
Assessor’s map without benefit of survey.
43,362 net square feet
Location: Interior Lot
Street: Chandler Street is public and 60 feet wide
Alley: None
Parking Access: 3 curb cuts on Chandler Street
Frontage: 165 feet along Chandler Street
Please see plat map for further reference
Shape: Rectangular
Dimensions: 165 x 545 feet
Topography: Level
Geology: No adverse conditions known
Relation to Grade: Level
Drainage: Appears to be adequate
Utility: The site's characteristics appear to make it
adequate for development.

Census Tract #: 0406.09
FEMA Flood Hazard Zone: No
Panel #06071C9375J, Zone X, Date 5/8/2024
Special Hazards: Southern California has a history of earthquake activity, and we make no representation as to the
subject's risk from such future activity.
167

35 Utilities on Site:

Water

Sewer
Electric
Gas
Telephone
Storm Drain

100 foot well on site. The land is anticipated to
be redeveloped with multi-family residential, and
at that time, the new developer will tie into the
readily accessible city water.

Yes
Yes
Yes
Yes
Yes
General Plan: Eastvale General Plan
Zoning Classification: A-1, Light Agricultural
Zoning Requirements:

Permitted Uses

Agricultural, animal related, crop production,
farm stand, grazing, kennel, cattery, home
occupations, one -family dwellings, parks,
playgrounds, mobile home, libraries, public
recreation, religious, schools and winery.

Maximum Height 75 feet
Floor Area Ratio Established by the Eastvale General Plan Coverage Ratio None
Zoning Setbacks 20' in front; 10' in back; 5' on a side Minimum Lot Size 20,000 square feet
Minimum Lot Width 100 feet
Parking Requirement: 2 spaces per dwelling; 2 parking spaces are required, and ample open parking is provided.

Zoning Change: Likely to low density residential
Conform to Zoning: Conforming
Easements, Restrictions and
Reservations:

Standard utility easements were observed, see
Land Description
Agreements: None noted or observed
Covenants: None noted or observed
Contracts: None noted or observed
Declaration: None noted or observed
Special Assessments: None noted or observed
Ordinances: None other than zoning

168

36 SITE IMPROVEMENTS

The site is utilized agriculturally and is largely a dirt/grass lot with tear -down improvements, such as barn, shed, corral and single family residential.

Parking Lot: None
Bumpers: None
Landscape Islands: None
Curb: Concrete
Gutter: Concrete
Sidewalk: Asphalt
Walkways: None
Landscaping: Trees, shrubs and grass
Outdoor Lighting: Ground level
Fencing: Chain link, wrought iron and block
Walls: Block
Retaining Walls: None

ENVIRONMENTAL CHECKLIST

Current Use: Agricultural property
Presence of
Underground Storage Tanks:

None noted or observed
Stained Soil: None noted or observed
Vegetation Damage: None noted or observed
Oily Surface Water: None noted or observed
Discarded Batteries: None noted or observed
Oil Drums: None noted or observed
Propane Tanks: None noted or observed
Water Wells: 100' well on site
Neighboring Properties With
Environmental Risks:

None noted or observed

169

37 HIGHEST AND BEST USE

Highest and Best Use is "the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land or improved property -specific with respect to the user and timing of the use that is adequately supported and results in the highest present value."

Implied in these definitions is that the determination of highest and best use takes into account the contribution of a specific use to the community and community development goals as well as the benefits of that use to individual property owners.

The following tests must be met in estimating highest and best use. The use must be legal and probable, not speculative or conjectural. A demand for the use must exist , and it must yield the highest net return to the land for the longest period. These tests are applied to improved and vacant property. To arrive at an estimate of highest and best use, the subject site was analyzed 1) as though vacant and available for development, and 2) as presently improved.

Highest and Best Use Assuming a Vacant Site

Physical Possibility
The first constraint on the possible use of the property is dictated by the physical aspects of the site. "The land must be able to accommodate the size and shape of the ideal improvement." In general, the larger the site, the greater its potential to achieve economies of scale and flexibility in development.

The physical characteristics of the subject site will not impact development.

The site is not in a FEMA Flood Hazard Zone.

Legally Permissible Use

Of particular importance in the analysis of highest and best use of the subject is to determine the legal extent and use to which the site can be developed. Development of the site is restricted by existing zoning regulations and subject to the interpreta tions by the planning, zoning and/or governing body charged with enforcing said regulations. In addition to these legal constraints, the property may be subject to restrictions placed upon the property by legislative laws, electoral laws, temporary legal restrictions, environmental issues or other possible factors under the public jurisdiction.

170

38 The site is zoned A-1 and is designated for light agricultural uses that allow for the development of various uses such as agricultural, animal related, crop production, farm stand, grazing, kennel, cattery, home occupations, one -family dwellings, parks, playgrounds, mobile home, libraries, public recreation, religious, schools and winery.

In addition to public regulations, the subject may have private rest rictions that limit the site's ability to be developed. These restrictions are typically found in the title report which was reviewed. Based upon our review of the title report, we are unaware of any factors which would impact the subject’s market value.

Financially Feasible Use

In determining which uses are legally permissible and physically possible, we eliminated some uses from consideration. We further analyzed the uses that meet these first two criteria to determine which are likely to produce an income, or return, equal to or greater than the amount needed to satisfy operating expenses, financial obligations and capital amortization. We regard as financially feasible all uses that are expected to produce a positive return. Based on the subject's location, zoning and neighboring uses, the subject is not financially feasible to be developed at this time.

Maximally Productive Use

Of the financially feasible uses, the highest and best use is that use which produces the highest residual land value consistent with the rate of return warranted by the market for that use. To determine the highest and best use of land as though vacant, an appropriate rate of return reflecting the associated risk is often used to capitalize income streams from different uses into their respective values. The use that produces the highest residual land value is considered to be the highest and best use for the subject. The maximally productive use is for future agricultural development or possibly a zone change for residential development.

Conclusion

Based on our observation of the market and considering the factors above, it is our opinion that the highest and best use of the site, as if vacant, would be to be held for future development.
171

39 APPROACH TO VALUE

In the Sales Comparison Approach, market value is estimated by comparing the subject property to similar properties that have been sold recently or for which offers to purchase have been made. A major premise of the Sales Comparison Approach is that the market value of a property is directly related to the prices of comparables, competitive properties. The comparative analysis in the Sales Comparison Approach focuses on differences in the legal, physical, locational, and economic characteristics of similar properties and the subject property and on differences in the real property rights conveyed, the dates of sale, the motivations of buyers and sellers, and the financing arrangements for each sales transaction, which can account for variations in prices. 172

40 SALES COMPARISON APPROACH

173

41 LAND COMPARABLE 1

13170 Archibald Avenue, Ontario, California 91761
Distance from subject: 3.1 miles
APN: 0218-111-30

65,340 sq. ft. land area
220 ft. frontage on Archibald Avenue
A-1 Zone
Lat/Long: 34.0128/-117.59385
Utilities to site
Level topography
Date of sale: June 27, 2023
Price $900,000
All cash
$13.77 per square foot

This rectangular-shaped interior parcel is located north of the subject on a primary street. The property is improved at this time with a fruit stand and various out structures. These improvements are considered to have no contributory value because they will be demolished and redeveloped with residential uses . The marketing time for this sale was 522 days. The grantor was Kwak and LIM Corporation and the grantee was United Christian Church of Hacienda Heights on document number 2023.161891. This comparable was reported or verified by the document, Datatree, CoStar , the County Assessor and the broker via CoStar.
174

42 LAND COMPARABLE 1 PLAT MAP

175

43 LAND COMPARABLE 2

1370 Second Street, Norco, California 92860
Distance from subject: 5.0 miles
APN: 125-190-023, 025

225,205 sq. ft. land area
551.08 ft. frontage on Second Street
A-1 Zone
Lat/Long: 33.90919/-117.55356
Utilities on site
Level topography
Date of sale: February 18, 2022
Price $2,200,000
All cash
$9.77 per square foot

This irregular-shaped interior parcel is located southeast of the subject on a secondary street. The property is improved at this time with a single family residence, barn and various out structures. These improvements are considered to have no contributory value because they will be demolished and redeveloped with contractor’s yard. The marketing time for this sale was 1,018 days. The grantor was Carl E. Henriksen and the grantee was Genesis and Manny Trucking, Inc. on document number 2022.0085829. This comparable was reported or verified by the document, Datatree, CoStar, the County Assessor and the broker via CoStar. 176

44 LAND COMPARABLE 2 PLAT MAP

177

45 LAND COMPARABLE 3

8010 Schaefer Avenue, Ontario, California 91761
Distance from subject: 5.0 miles
APN: 1052-491-06

206,910 sq. ft. land area
330 ft. frontage on Schaefer Avenue
A-1/MR Zone
Lat/Long: 34.00588/-117.62983
Utilities on site
Level topography
Date of sale: June 9, 2022
Price $2,850,000
All cash
$13.77 per square foot

This rectangular-shaped interior parcel is located northwest of the subject on a secondary street. The property is improved at this time with a trucking yard . These improvements are considered to have no contributory value because they will be demolished and redeveloped with residential uses . The grantor was William Clanin and the grantee was CMK Management LLC on document number 2022.210014. This comparable was reported or verified by the document, Datatree, CoStar, the County Assessor and the broker via CoStar.

178

46 LAND COMPARABLE 3 PLAT MAP

179

47 LAND COMPARABLE 4

NWC Chino Avenue & S. Grove Avenue, Ontario, California 91761 Distance from subject: 4.7 miles
APN: 1052-171-01 & 02 and 1052-181-01 & 02

1,225,953 sq. ft. land area
+/-630 ft. frontage on chino Avenue
+/-1,300 ft. frontage on S. Grove Avenue
AG Zone
Lat/Long: 34.013012/-117.628952
Utilities on site
Level topography
Date of sale: January 18, 2024
Price $15,500,000
All cash
$12.64 per square foot

This L-shaped corner parcel is located northwest of the subject on a primary street. The property is improved at this time with a minor residential and agricultural structures and agriculture crops . These improvements are considered to have no contributory value because they will be demolished and redeveloped with a mixed use or residential development.

The marketing time for this sale was 835 days. The grantor was Paul A. Briano Separate Property Trust and the grantee was JH Bray LLC on document number 2024.14419. This comparable was reported or verified by the document, Datatree, CoStar, the County Assessor and the broker via CoStar.

180

48 LAND COMPARABLE 4 PLAT MAP (1)

181

49 LAND COMPARABLE 4 PLAT MAP (2)

182

50 LAND COMPARABLES MAP

183

51 Analysis

The preceding comparables reflect recent activity in the subject market area. In our analysis of the data presented we considered a variety of factors , including cash equivalency, d ate of sale, listing discount, location, access, view, availability of utilities, topography, utility, zoning and size.

We have had to expand our date of sale parameters to 18 months due to the lack of recent activity.

We adjusted the comparables to the subject based on the differences noted.

Except for those factors presented in the adjustment grid below, it is our opinion that the subject property and the comparables are similar or do not require further adjustments.

One of the foremost characteristics in the analysis of market sales is the relationship between price and time. The sales took place 153-852 days prior to our date of value and were adjusted by 3.0% per year.

Location is considered to be the most important factor in the analysis of a property. In this analysis, the comparables may be superior, inferior or similar to the property being appraised.

We found that larger sites tend to sell for less on a per square foot basis than smaller sites, which is clearly seen in the sales presented. This tendency is referred to as the principle of marginal utility, which is defined as "The addition to total utility made by the last unit of a good at any given point of consumption. In general, the greater the number of items, the lower the marginal utility, i.e., a greater supply of an item or product lowers the value of each item."

Zoning is defined as "The public regulation of the character and extent of real estate use through police power; accomplished by establishing districts or areas with uniform restrictions relating to improvements; structural height, area, and bulk; density of population; and other aspects of the use and development of private property." In the selection of land comparables every effort is made to find properties with identical zoning. When this is not possible, an adjustment may be applied. Properties th at allow a larger and greater variety of development by law are more valuable than properties that allow for smaller and less variety of development.

When land is sold with obsolete improvements on the site, the cost of removing these improvements must be considered as an additional cost incurred by the purchaser for demolition. These costs must be estimated and an adjustment made to reflect the actual land acquisition cost. We utilized $25,000 for the subject demolition costs.

Infrastructure can affect value based on the time and cost to deliver necessary infrastructure, such as sidewalks, curbs, gutters and storm drains.

184

52 Adjustment Grid
(in dollars)

Land Comparable 1 is in a superior location, maintains concrete sidewalks and is adjacent to new development, all superior features. There are also small ancillary structures which require demolition. This land comparable was given primary consideration since it is most similar in size.

Land Comparable 2 required upward adjustments for the significantly larger size. Demolition costs are similar. We gave this comparable strong consideration.

Land Comparable 3 required an upward adjustment for size and infrastructure.

Demolition costs are similar. Downward adjustments were applied for superior location and for superior zoning since the property was in the process of a zoning change at the time of sale.

We gave this comparable the least consideration.

Land Comparable 4 required an upward adjustment for size and infrastructure.

Demolition costs are similar. A downward adjustment was applied for superior location. This land comparable has also been given primary consideration since it is the most recent sale.

Based on our analysis of the adjusted prices of the comparables presented, it is our opinion the subject's land value, per square foot, is as follows:

43,362 square feet @ $13.00 = $563,706 or $564,000 rounded

Land
Comparable
Price Per
Sq. Ft.

Time
Adjustment Location Size Zoning
Demolition
Cost
Infrastructure
(sidewalk/cur
Adj. Price
Per Sq. Ft.

1. 13.77 0.41 (1.00) - - (0.15) (0.25) 12.78

2. 9.77 0.68 - 2.25 - - - 12.70

3. 13.77 0.84 (1.50) 2.00 (3.00) - 0.50 12.61

4. 12.64 0.16 (1.50) 3.00 - - 0.50 14.80
185

53 VALUE CONCLUSION

The value estimate of the Sales Comparison Approach was based upon sales in the open market of similar properties. The quantity and quality of the market data transactions are considered adequate and the required adjustments or analysis were reasonable for the purpose of formulating a value estimate. The appeal of this approach is its objectivity, since the value estimate is derived from a consensus of buyers and sellers as indicated by recent sales prices.

Based on our investigation, together with the data and analysis contained in the accompanying report, the fee simple fair market value of the subject property on June 19, 2024 was Five Hundred Sixty Four Thousand Dollars.

$564,000.00
186

54 INFORMATION ON OUR COMPANY

BTI Appraisal specializes in valuations of real estate, businesses, intangible assets, machinery and equipment and financial analysis. Since 1974, we have performed extensive appraisals, valuations, inspections and research projects for virtually every ne ed including sales, loans, insurance, corporate, legal, I.R.S. and S.E.C. requirements, eminent domain, feasibility and market studies, recapitalizations, economic damages and government requirements. Our clients include law firms and insurance companies , as well as lenders, corporations and federal, state and local governmental agencies. Various staff members normally contribute to a report to meet specialized requirements. This group of experienced professionals provides a broad range of in-depth coverage for a great diversity of project needs.

The firm is managed by Ben F. Tunnell III, Chairman. His previous background includes eight years with First Interstate Bank of California as Vice President at their Corporate Headquarters in Los Angeles. Mr. Tunnell received a BA degree in Economics from Claremont McKenna College and attended post -graduate courses at UCLA and the American Institute of Banking where he also lectured. He has served on the Board of Arbitrators for both the American Arbitration Association and the Better Business Bureau, and was previously a Registered Investment Advisor and a Broker/Dealer with the Securities and Exchange Commission as well as a licensed California Real Estate Broker. Mr. Tunnell is currently a Certified General Real Estate Appraiser in the State of Califo rnia, license #AG006964, in the State of Arizona, license #31404 and in the State of Nevada, license #A.0207571-CG. He has previously been similarly licensed in many other states. He is also an ASA, the senior designation of the American Society of Appraisers in Business Valuation.

Mr. Tunnell is also a member of the International Right of Way Association and Lambda Alpha International. He has qualified and testified in Federal Courts in Los Angeles, New Mexico, New York, Orange County, Oregon, San Dieg o and San Jose and Superior Courts in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura as well as arbitration proceedings as an expert witness in the areas of business, equipment, real estate, personal property and vehicle appraisals.

Mr. Stephen O’Rourke, Executive Vice President and Certified General Real Estate Appraiser in the State of California, license #AG036788, in the State of Arizona, license #31554 and in the State of Nevada, license #A.0205776 -CG, has been appraising since 2003.

He is also an ASA, the senior designation of the American Society of Appraisers, in Real Estate. He has also obtained the Right of Way – Appraisal Certified (R/W-AC) Certification from the International Right of Way Association. He had previous experience appraising real property at KTR Newmark Real Estate Services. Previously he was in the Enterprise Risk Services division of Deloitte & Touche in Los Angeles. Mr. O’Rourke is a graduate of the University of Southern California with a degree in bu siness administration. He is a licensed California real estate broker and a Marshall & Swift Certified Appraiser . He is a member of the International Right of Way Association.

187

55 REPRESENTATIVE BTI APPRAISAL CLIENT LIST

Attorneys
Akerman LLP
Bridge Law, LLP
Burt + Clerc
Chapman Glucksman Dean Roeb & Barger
Dentons US LLP
Fisher & Wolfe LLP
Gifford Dearing & Abernathy, LLP
Greenberg & Glusker
Guralnick & Gilliland
Hamburg, Karic, Edwards & Martin, LLP
Hamlin ● Cody
Law Offices of Esther Hopkins, P.C.

Law Office of John M. Carmack
Lewis Brisbois
Litman and Associates
Loeb & Loeb
Mokri Vanis & Jones, LLP
Morris, Polich & Purdy
Musick Peeler & Garrett
Reed Smith
Sheppard Mullin Richter & Hampton LLC
Walch & Walch
Wasser Cooperman & Mandles, P.C.

Wolf, Rifkin, Shapiro, Schulman & Rabkin

Government Agencies
Caltrans
City of Chino
City of Downey
City of Eastvale
City of Henderson
City of Las Vegas
City of Long Beach
City of Los Angeles
City of North Las Vegas
City of Santa Clarita
City of South Pasadena
City of Torrance
County of Los Angeles
Los Angeles Housing Authority
Metropolitan Transit Authority
State of California
Corporations and Institutions
Alere
California Ironworkers Union
California Resources Corporation
Green Dot Public Schools California
Griffin Structures
International Brotherhood of Electrical
Workers
Jewish Family Service LA
L.A. County Museum of Art
Latino Theater Co.

M2O, Inc.

O'Connor & Co. Securities
Outfront Media
Sears Holdings Management Corporation
Sutter Hill Ventures
Tejon Ranch Co.

Financial Institutions
Bessemer Trust
Celtic Bank
J.P. Morgan Chase Bank
Morgan Stanley Wealth Management
Northeast Bank
Raymond James
Stifel Nicolaus Company
Zions Bank

Insurance Companies
AIG
Allstate Insurance
Automobile Club
Capital Insurance Group
Church Mutual Insurance
Farmers Insurance
Great American Insurance
Hartford Insurance
Liberty Mutual Insurance
Safeco Insurance
State Farm Insurance
Travelers Insurance
21st Century Insurance
Zurich Insurance
188

56 CERTIFICATION

We, Ben F. Tunnell III and Stephen O’Rourke, certify that, to the bes t of our knowledge and belief, the statements of fact contained in this report are true and correct. The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting cond itions, and are our personal, impartial and unbiased professional analyses, opinions and conclusions.

We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

We previously appraised the subject property as of October 27, 2023. We have not performed any other professional services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformance with the standards and reporting requirements of the American Society of Appraisers and the Uniform Standards of Professional Appraisal Practice.

Unless otherwise noted in writing, the appraiser has done similar assignments to the subject and has the knowledge and experience to complete this assignment competently.

Stephen O’Rourke has made a physical inspection of the property that is the subject of this report. Ben F. Tunnell III has not made a physical inspection of the property that is the subject of this report.

No one provided significant appraisal assistance to the persons signing this certification. The preceding certification is cited from the Uniform Standards of Professional Appraisal Practice Standard Rule 2-3, 2024 @ The Appraisal Foundation.

Stephen O’Rourke, ASA, R/W-AC
Executive Vice President
Certified General Real Estate Appraiser
#AG036788
Ben F. Tunnell III
Chairman
Certified General Real Estate Appraiser
#AG006964
189

EXHIBIT 1

LEGAL DESCRIPTION
190
191

EXHIBIT 2

FLOWAGE EASEMENT
192
193
194
195

APPRAISAL REPORT

OF THE

UNDERLYING LAND

LOCATED AT

14835 CHANDLER STREET

EASTVALE, CALIFORNIA 92880

AS OF

JUNE 19, 2024

196
425 East Colorado Street, Suite 640 · Glendale, CA 91205 · tel: (213) 532-3800 · fax: (213) 532-3807 · www.btiappraisal.com

June 28, 2024

Mr. Gabriel Mayorguin
Assistant Engineer
City of Eastvale
12363 Limonite Avenue
Eastvale, California 91752

Re: 14835 Chandler Street Land, UD/2024

Dear Gabriel:

At your request, we physically inspected the underlying land located at 14835 Chandler Street, Eastvale, California 92880 in order to prepare an appraisal report. This is an update of our appraisal report of the subject property dated October 30, 2023.

It is our opinion that , based on the data and analysis contained in the accompanying report, the fee simple fair market value of the subject property on June 19, 2024 was Four Hundred Eighty Six Thousand Dollars.

$486,000.00

It should also be noted that the subject property is delinquent in real estate taxes for the 2021-2022 and 2023-2024 years in the amount of $24,405.53.

Very truly yours,

Stephen O’Rourke, ASA, R/W-AC
Executive Vice President
Certified General Real Estate Appraiser
#AG036788
Ben F. Tunnell III
Chairman
Certified General Real Estate Appraiser
#AG006964

BT:kp
N5883-1.rpt
197

SUMMARY OF SALIENT FACTS & CONCLUSIONS

Client: City of Eastvale
Owner: Trinidad Perez
Property Type: Underlying land
Property Location: 14835 Chandler Street
Eastvale, CA 92880

Assessor Parcel Number(s): 144-080-010
Purpose of the Appraisal: To determine the fair market value of the subject property.

Intended Use: To assist the client in reviewing the asset value of the subject property for possible purchase.

Property Rights Appraised: Fee Simple Estate
Date of Report: June 28, 2024
Date of Value: June 19, 2024
Parcel:

Size: 89,925 gross square feet (per map)
37,422 net square feet

Shape: Rectangular
Zoning: A-1, Light Agriculture
Topography: Level
Highest & Best Use:

As Vacant: Hold for future development
Legally Conforming: Conforming
Value Conclusion: $486,000
198

TABLE OF CONTENTS

LETTER OF TRANSMITTAL

SUMMARY OF SALIENT FACTS & CONCLUSIONS

SUBJECT
Subject Photographs.................................................................................................... 27 Land Description ......................................................................................................... 33 Site Improvements ...................................................................................................... 35 Environmental Checklist ............................................................................................. 35 Highest and Best Use .................................................................................................. 36

VALUATION
Approach To Value ..................................................................................................... 38 Sales Comparison Approach ....................................................................................... 39

CONCLUSION
Value Conclusion ........................................................................................................ 52 Information On Our Company .................................................................................... 53 Representative BTI Appraisal Client List ................................................................... 54 Certification ................................................................................................................ 55

199

1 ASSUMPTIONS & LIMITING CONDITIONS

We believe the information furnished to us is reliable but assume no responsibility for its accuracy.

If financial statements, operating histories or any other data relating to the income and expenses attributed to the subject property have been utilized, they were provided by the owner, or representatives of the owner, and have been accepted without further verification, except as specifically set forth in this report.

The appraiser made no legal survey , nor has one been commissioned.

The allocation of total value to land or building, if shown in this report, is invalidated if used separately or in conjunction with any other appraisal.

INTENDED USE & USERS OF THE APPRAISAL REPORT

The intended use of the appraisal is to assist the client , City of Eastvale , in reviewing the asset value of the subject property for possible purchase.

PROPERTY INTEREST BEING APPRAISED

We are appraising the following interest in the subject property:

3 IDENTIFICATION OF REAL ESTATE BEING APPRAISED

This property is commonly referred to as:

14835 Chandler Street
Eastvale, California 92880
Riverside County
Latitude and Longitude: 33.947730/-117.60746

TAX INFORMATION

Assessor’s Parcel Number: 144-080-010

Assessed Value: Land $ 643,872
Improvements 64,377
Total $ 708,249

Tax Rate Area: 027-002
Taxes: $7,928.76 (2023)
General Tax Rate: 1.11745%
Direct Assessments: $14.43

The assessed value and real property taxes of the subject property are the result of California State Proposition 13, a statewide ballot issue passed in 1978. The proposition limits taxes to 1% of the property's assessed value, plus a factor for bonded county or city debt or special assessments. Assessed values are modified upon most transfers based upon the market value of the property at that time. Finally, all assessed values may be adjusted upward 2% annually unless they have been reassessed in the year of a transfer. In our analysis of the subject property, we have considered both the long and short-term effects on value due to any change in the tax liability of the property. Our research indicates the property taxes are currently delinquent for the 2021-2022 and 2023-2024 years in the amount of $24,405.53. 202

4 COUNTY ASSESSOR PLAT MAP

203

5 DATE OF VALUE

The appraiser performed a physical inspection of the subject property on October 27, 2023. At the request of City of Eastvale , the value of this repor t is specifically applicable to June 19, 2024.

FAIR MARKET VALUE DEFINITION

Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing o f title from seller to buyer under conditions whereby: (1) Buyer and seller are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their own best interests; (3) A reasonable time is allowed for exposur e in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Source: 12 C.F.R. §225.62 (h)

SALE AND LISTING HISTORY OF SUBJECT

The subject property is currently owned by Trinidad Perez. Based on a review of public records, there have been no transfers, sales or listings in the last three years.

204

6 EXPOSURE TIME

Exposure time is “the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective time estimate based upon an analysis of past events assuming a competitive and op en market.” In assessing the subject's expected exposure time we are assuming that the subject would have been professionally marketed through a qualified broker or owner, that the property would have been listed at a reasonable asking price with an owner willing to accept a reasonable offer and that the buyer and seller would not have b een influenced by undue stimuli . We estimate the subject's exposure time would have been within 6 months, based on a review of 4 comparable sales.

MARKETING TIME

“An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after effective date of an appraisal. ” In assessing the subject's expected marketing time if offered for sale, we are assuming that the subject will be professionally marketed through a qualified broker or owner, that the property will be listed at a reasonable asking price with an owner willing to accept a reasonable offer and that the buyer and sel ler will not be influenced by undue stimuli. At the present time, we are unaware of any new developments expected to occur in the near future which would negatively or positively affect the marketability of the subject compared to recent trends of competitive properties in the area. Marketing time in the subject area, based on current supply and demand, is typically within 6 months, based on a review of 4 comparable sales.

205

7 SCOPE OF THE APPRAISAL

The following steps were taken in arriving at our final estimates of value of the subject property:

1. After receiving the assignment, a preliminary search was made to determine market trends and other significant factors pertinent to the subject property.

In order to develop credible assignment results, this appraisal included research and analysis of property characteristics, taxes, zoning, restrictions and encumbrances.

The Sales Comparison Approach included research of market trends, new construction, absorption, marketing and exposure time, comparable sales and analysis of sale comparables.

In this case the sales comparison is the one applicable method for the valuation of underlying land.

Data systems we utilize include, but are not limited to, the following:

Datatree, provided by First American, is also a comprehensive on-line database providing a second, confirming source for data used in our reports.

206

4. The Dictio nary of Real Estate Appraisal, 7th edition , as published by the Appraisal Institute, is the source of all definitions in this appraisal report, unless otherwise noted.

207

9 REGIONAL MAP

208

10 REGIONAL ANALYSIS

Data Source

Analysis

Additionally, th ere are commercial airports in both Ontario and Palm Springs, as well as several municipal airports throughout the two -county area. The region is easily accessed by freeway, air, and rail transit from Los Angeles, Long Beach and San Diego airports and harbors.

209

Economy

Companies are drawn to the Inland Empire for its large supply of available land and affordable housing for employees. While problems in housing and other sectors created a difficult environment between 2007 into 2009, the Inland Empire economy saw signifi cant improvement in 2013, which continued steadily until the worldwide health crisis slowdown in 2020. More recently, as leasing and consumer spending begins to return to pre -pandemic levels, many business sectors are reporting an improved economic outlook.

12 Residential Market

According to California Forward, a non -profit alliance born out of the California Economic Summit in 2019, the Inland Empire has a 14% higher home ownership rate than the state.

Redfin1 reported in May 2024, Riverside County single family prices were up

Redfin reported in May 2024, Riverside County condominium prices were up

1 The information presented is based on average selling prices for each period and may not be indicative of home prices across the board.
211

13 Retail Market

Retail - Vacancy and Asking Rental Rates

Retail - Absorption and Deliveries

212

14 Office Market

Office - Vacancy and Asking Rental Rates

Office - Net Absorption and Deliveries

213

15 Industrial/Flex Market

Industrial/Flex - Vacancy and Asking Rental Rates

Industrial/Flex - Net Absorption and Deliveries

214

16 Multifamily Market

94.0% reported in the previous quarter.

Multifamily - Occupancy and Market Rental Rates

Multifamily - Absorption, Deliveries & Vacancy

215

17 Conclusion

While the enormous difficulty inflicted on the entire US economy by the Covid- 19 pandemic hit the Inland Empire hard, it also served to benefit the region’s future. More people than ever before have transitioned to working remotely, triggering a migration from urban cores to more spacious and affordable housing such as that in the Inland Empire. As the Inland Empire’s population continues to expand, it’s anticipated that retail spending in the area will also. Additionally, a s more consumers turn to online s hopping, it is predicted that the warehouse, logistics, transport, and distribution industries that are currently setting up in the Inland Empire will make the region a prominent factor in the state’s overall economy.

In 2024, it is widely predicted that additional leasing velocity in the retail sector will grow, as “non-essential” businesses continue reopening . It’s also expected that more multi-tenant investments will be active from a diversity of buyer types. The overall picture of the Inland Empire is an optimistic one, as low interest rates continue, the debt markets relax and some of the uncertainty caused by COVID-19 is alleviated.

216

18 LOCAL CITY AREA MAP

217

19 EASTVALE, CALIFORNIA

In 2023, the population estimate had grown to 74,518. According to the Eastvale area plan, Eastvale has a total area of 13.1 square miles, of which 12.5 square miles is land and 0.6 square miles, or 4.76%, is water. The city’s boundaries border the San Bernardino County Line both to the west, at Hellman Avenue, and th e north, at Bellegrave Avenue. Its eastern boundary is Interstate 15. The Los Angeles County line is approximately 8 miles northwest of Eastvale, and the Orange County line approximately 5 miles southwest. The proximity of these two heavily commercialized counties, and the fact that Eastvale is r ight between the Interstate 15 and California State Routes 91, 60, and 71, has made Eastvale a popular home for commuters.

For 65 years, between 1889 and 1954, the Fuller family owned about 5,000 acres, including more than half of present -day Eastvale. The area between Schleisman Road and the river was included within the ranch’s boundaries. O.R. Fuller named the ranch the “Fuller Rancho” with a capital “O” at the end, most likely for the first letter of his first name , demonstrated on all the old ranch paperwork. Fuller built up the ranch’s dairy business and began home delivery routes in Pomona, Ontario, and San Bernardino. He turned part of their home into a guest ranch in 1937, expanding the house to accommodate as many as 25 guests. Lively dinners in the ornate dining room attracted Hollywood celebrities like W.C. Fields, Groucho Marx, Spencer Tracy, and Mary Pickford.

Today, the resulting Corona-Norco Unified School District is a highly accredited public school system, named the top Exemplary School District of California in 2019.

20 mid-2000s at highly inflated prices; fueled by the subprime mortgage industry. This made Eastvale particularly vulnerable when the United States housing bubble burst in 2007.

21 For the 1st quarter of 2024, CoreLogic2 reported the following home price data for Eastvale, CA:

Community name ZIP Code
Condominiums Single Family Homes SFR Only
Sales
Count
Condos
Price
Median
Condos
($1,000)

Price %
Change
from
2023
Sales of
Single
Family
Homes
Price
Median
SFR
($1,000)
Price %
Change
from
2023
Median
Home
Price/Sq. Ft.

Eastvale/Mira Loma 91752 5 $590 1.3% 32 $830 8.4% $345
Eastvale/Corona 92880 8 $750 6.5% 51 $920 2.2% $304

Data Source

2 The information presented is based on average selling prices for each period and may not be indicative of home prices across the board.

220

22 Retail Market

Retail Vacancy and Asking Rental Rates

Retail Absorption, Deliveries and Vacancy

221

23 Office Market

Office Vacancy and Asking Rental Rates

Absorption, Deliveries and Vacancy

222

24 Industrial/Flex Market

Industrial/Flex Vacancy and Asking Rental Rates

Industrial/Flex Absorption, Deliveries and Vacancy

223

25 Multi-Family Market

Multi-Family Occupancy and Market Rental Rates

Absorption, Deliveries and Vacancy

224

26 MARKET AREA ANALYSIS

Market area is defined as: “ The area associated with a subject property that contains its direct competition”.

225

27 SUBJECT PHOTOGRAPHS
(OCTOBER 27, 2023)

Aerial photo

Front view of residence
226

28 Rear view of residence

Side view of residence

227

29 Main view of residence

Storage shed

228

30 Front view main entrance

Rear view of land

229

31 Westernmost view of property

Street scene looking east, subject on left

230

32 Street scene looking west, subject on right
231

33 LAND DESCRIPTION

The title report noted exceptions for watershed benefit assessment areas, easement for reservation to the Coachella Valley County Water District, two easements for flooding and incidental purposes, an easement for public utilities, condemnation of a portion of the by the Orange County Flood Control District (OCFCD) and other non -realty exceptions. It should be noted that the subject property is located in FEMA Flood Hazard Zone X, an area outside the 100 year flood.

Based on review of the OCFCD exception documents, we note that the northern portion of the subject parcel is impacted by both a US Government flood control easement and the OCFCD flowage easement, see Exhibit 2-Flowage Easement. The document reports that no structures for human habitation are allowed in the easement area and that any other structures must receive approval from OCFCD prior to construction. As reported in the legal description the OCFCD flowage easement totals 40,852 square feet. The client has estimated the US Government flood easement areas (north of OCFCD easement) at 11,651 square feet.

Therefore, the subject is encumbered by 52,503 square feet of flood control easements and has 37,422 square feet of unencumbered usable square footage.

Area: 89,925 square feet, based on County Assessor’s
map without benefit of survey.
37,422 net square feet
Location: Interior Lot
Street: Chandler Street is public and 60 feet wide
Alley: None
Parking Access: 2 curb cuts on Chandler Street
Frontage: 165 feet along Chandler Street
Please see plat map for further reference
Shape: Rectangular
Dimensions: 165 x 545 feet
Topography: Level
Geology: No adverse conditions known
Relation to Grade: Level
Drainage: Appears to be adequate
Utility: The site's characteristics appear to make it
adequate for development.

34 Utilities on Site:

Water

Sewer
Electric
Gas
Telephone
Storm Drain

200 foot well on site. The land is anticipated to
be redeveloped with multi-family residential, and
at that time, the new developer will tie into the
readily accessible city water.

Yes
Yes
Yes
Yes
Yes
General Plan: Eastvale General Plan
Zoning Classification: A-1, Light Agricultural
Zoning Requirements:

Permitted Uses

Zoning Change: Likely to low density residential
Conform to Zoning: Conforming
Easements, Restrictions and
Reservations:

233

35 SITE IMPROVEMENTS

The site is utilized agriculturally and is largely a dirt/grass lot with tear -down improvements, such as barn, shed, corral and single family residential.

ENVIRONMENTAL CHECKLIST

Current Use: Agricultural property
Presence of
Underground Storage Tanks:

None noted or observed
Stained Soil: None noted or observed
Vegetation Damage: None noted or observed
Oily Surface Water: None noted or observed
Discarded Batteries: None noted or observed
Oil Drums: None noted or observed
Propane Tanks: None noted or observed
Water Wells: 200' well on site
Neighboring Properties With
Environmental Risks:

None noted or observed

234

36 HIGHEST AND BEST USE

Highest and Best Use Assuming a Vacant Site

The physical characteristics of the subject site will not impact development.

The site is not in a FEMA Flood Hazard Zone.

Legally Permissible Use

235

37 The site is zoned A-1 and is designated for light agricultural uses that allow for the development of various uses such as agricultural, animal related, crop production, farm stand, grazing, kennel, cattery, home occupations, one -family dwellings, parks, playgrounds, mobile home, libraries, public recreation, religious, schools and winery.

Financially Feasible Use

In determining which uses are legally permissible and physically possible, we eliminated some uses from consideration. We further analyzed the uses that meet these first two criteria to determine which are likely to produce an income, or return, equal to or greater than the amount needed to satisfy operating expenses, financial obligations and capital amortization. We regard as financially feasible all uses that are expected to produce a positive return. Based on the subject's location, zoning and neighb oring uses, the subject is not financially feasible to be developed at this time.

Maximally Productive Use

Conclusion

Based on our observation of the market and considering the factors above, it is our opinion that the highest and best use of the site, as if vacant, would be to be held for future development.
236

38 APPROACH TO VALUE

39 SALES COMPARISON APPROACH

238

40 LAND COMPARABLE 1

13170 Archibald Avenue, Ontario, California 91761
Distance from subject: 3.1 miles
APN: 0218-111-30

41 LAND COMPARABLE 1 PLAT MAP

240

42 LAND COMPARABLE 2

1370 Second Street, Norco, California 92860
Distance from subject: 5.0 miles
APN: 125-190-023, 025

43 LAND COMPARABLE 2 PLAT MAP

242

44 LAND COMPARABLE 3

8010 Schaefer Avenue, Ontario, California 91761
Distance from subject: 5.0 miles
APN: 1052-491-06

243

45 LAND COMPARABLE 3 PLAT MAP

244

46 LAND COMPARABLE 4

NWC Chino Avenue & S. Grove Avenue, Ontario, California 91761 Distance from subject: 4.7 miles
APN: 1052-171-01 & 02 and 1052-181-01 & 02

This L-shaped corner parcel is located northwest of the subject on a primary street. The property is improved at this time with a minor residential and agricultural structures and agriculture crops. These improvements are considered to have no contributo ry value because they will be demolished and redeveloped with a mixed use or residential development.

245

47 LAND COMPARABLE 4 PLAT MAP (1)

246

48 LAND COMPARABLE 4 PLAT MAP (2)

247

49 LAND COMPARABLES MAP

248

50 Analysis

We have had to expand our date of sale parameters to 18 months due to the lack of recent activity.

We adjusted the comparables to the subject based on the differences noted.

Except for those factors presented in the adjustment grid below, it is our opinion that the subject property and the comparables are similar or do not require further adjustments.

Location is considered to be the most important factor in the analysis of a property. In this analysis, the comparables may be superior, inferior or similar to the property being appraised.

Infrastructure can affect value based on the time and cost to deliver necessary infrastructure, such as sidewalks, curbs, gutters and storm drains.

249

51 Adjustment Grid
(in dollars)

Land Comparable 2 required upward adjustments for the significantly larger size. Demolition costs are similar. We gave this comparable strong consideration.

Land Comparable 3 required an upward adjustment for size and infrastructure.

Demolition costs are similar. Downward adjustments were applied for superior location and for superior zoning since the property was in the process of a zoning change at the time of sale.

We gave this comparable the least consideration.

Land Comparable 4 required an upward adjustment for size and infrastructure.

Demolition costs are similar. A downward adjustment was applied for superior location. This land comparable has also been given primary consideration since it is the most recent sale.

Based on our analysis of the adjusted prices of the comparables presented, it is our opinion the subject's land value, per square foot, is as follows:

37,422 square feet @ $13.00 = $486,486 or $486,000 rounded

Land
Comparable
Price Per
Sq. Ft.

Time
Adjustment Location Size Zoning
Demolition
Cost
Infrastructure
(sidewalk/cur
Adj. Price
Per Sq. Ft.

1. 13.77 0.41 (1.00) - - (0.15) (0.25) 12.78

2. 9.77 0.68 - 2.25 - - - 12.70

3. 13.77 0.84 (1.50) 2.00 (3.00) - 0.50 12.61

4. 12.64 0.16 (1.50) 3.00 - - 0.50 14.80
250

52 VALUE CONCLUSION

$486,000.00
251

53 INFORMATION ON OUR COMPANY

The firm is managed by Ben F. Tunnell III, Chairman. His previous background includes eight years with First Interstate Bank of California as Vice President at their Corporate Headquarters in Los Angeles. Mr. Tunnell received a BA degree in Economics from Claremont McKenna College and attended post -graduate courses at UCLA and the American Institute of Banking where he also lectured. He has served on the Board of Arbitrators for both the American Arbitration Association and the Better Business Bureau, and was previously a Registered Investment Advisor and a Broker/Dealer with the Securities and Exchange Commission as well as a licensed California Real Estate Broker. Mr. Tunnell is currently a Certified General Real Estate Appraiser in the State of Calif ornia, license #AG006964, in the State of Arizona, license #31404 and in the State of Nevada, license #A.0207571-CG. He has previously been similarly licensed in many other states. He is also an ASA, the senior designation of the American Society of Appraisers in Business Valuation.

Mr. Tunnell is also a member of the International Right of Way Association and Lambda Alpha International. He has qualified and testified in Federal Courts in Los Angeles, New Mexico, New York, Orange County, Oregon, San Die go and San Jose and Superior Courts in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara and Ventura as well as arbitration proceedings as an expert witness in the areas of business, equipment, real estate, personal property and vehicle appraisals.

252

54 REPRESENTATIVE BTI APPRAISAL CLIENT LIST

Wolf, Rifkin, Shapiro, Schulman & Rabkin

M2O, Inc.

O'Connor & Co. Securities
Outfront Media
Sears Holdings Management Corporation
Sutter Hill Ventures
Tejon Ranch Co.

Financial Institutions
Bessemer Trust
Celtic Bank
J.P. Morgan Chase Bank
Morgan Stanley Wealth Management
Northeast Bank
Raymond James
Stifel Nicolaus Company
Zions Bank

55 CERTIFICATION

Unless otherwise noted in writing, the appraiser has done similar assignments to the subject and has the knowledge and experience to complete this assignment competently.

Stephen O’Rourke, ASA, R/W-AC
Executive Vice President
Certified General Real Estate Appraiser
#AG036788
Ben F. Tunnell III
Chairman
Certified General Real Estate Appraiser
#AG006964
254

EXHIBIT 1

LEGAL DESCRIPTION
255
256

EXHIBIT 2

FLOWAGE EASEMENT
257
258
259
260

AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (INCLUDING

ESCROW INSTRUCTIONS)

THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (the " Agreement ") is entered into as of the date of last execution of this Agreement by the parties as indicated on the signature page hereof (“ Effective Date ”) by and between the City of Eastvale, a California municipal corporation (the " Buyer "), and Trinidad Perez, Jr. (the " Seller ").

IT IS HEREBY MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:

1. Agreement to Sell and Purchase. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, upon the terms and for the consideration set forth in this Agreement, that certain real property, together with the buildings, fixtures and appurtenant improvements thereon (collectively, the " Property "), situated in the City of Eastvale, County of Riverside, State of California, which is legally described in the Legal Description attached hereto as Exhibit "A" and incorporated herein.

1.1 The total compensation to be paid by Buyer to Seller is in consideration for all of Seller's interest in the Property and any rights or obligations which exist or may arise out of the acquisition of the Property for public purposes, including without limitation, Seller's fee interest in the land and any improvements and fixtures and equipment located thereon, improvements pertaining to the realty (if any), severance damages, relocation assistance under California Government Code Section 7260, et seq. and its implementing regulations, any alleged pre-condemnation or inverse condemnation damages, loss of business goodwill (if any), costs, interest, attorney's fees, and any claim whatsoever of Seller and Seller's Parties (defined below) which might arise out of or relate in any respect to the acquisition of the Property by the Buyer.

1.2 Seller, on behalf of itself and all Seller's Parties, fully releases and discharges Buyer from all and any manner of rights, demands, liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner to (i) the sale of the Property or the relocation of Seller's Parties' business operations, if any, or the relocation of any person or persons, business or businesses, or other occupant or occupants located on the Property, including the specific waiver and release of any right to any relocation benefits, assistance and/or payments under California Government Code Section 7260, et seq. and its implementing regulations, provided that this waiver is not a waiver of relocation assistance, benefits and/or payments may be otherwise required under said sections or other state or federal law; and (ii) compensation for any interest in the Property or the business operations conducted thereon, including, but not limited to, land and improvements, fixtures, furniture, or equipment thereon, goodwill, severance damage, attorneys' fees or any other compensation of any nature whatsoever. The term " Seller's Parties " means Seller and Seller's affiliates, parent companies, subsidiaries, successors and assigns; and its and their officers, directors, partners, members, employees, agents and representatives.
261

It is hereby intended that the above release relates to both known and unknown claims that the Seller's Parties may have, or claim to have, against the Buyer with respect to the subject matter contained herein or the events relating thereto. By releasing and forever discharging claims both known and unknown which are related to or which arise under or in connection with, the items set out above, the Seller expressly waives any rights under California Civil Code Section 1542, which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR

RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FA VOR

AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER,

WOULD HA VE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY ."

2. Purchase Price.

2.1 The total purchase price for the Property shall be One Million Two Hundred Fifty Thousand Dollars and No Cents ($1,250,000.00) (the " Purchase Price "). Buyer shall pay the Purchase Price by depositing into Escrow, on or before the date for close of Escrow, immediately available funds in the amount of the Purchase Price.

2.2 Payment of Purchase Price. The Purchase Price for the Property shall be payable by Buyer as follows:
(a) Independent Consideration. Upon the Opening of Esc row, Buyer shall deposit with Escrow Holder, in cash, by certi fied or bank cashier’s check made payable to Escrow Holder, or a confirmed wire transfer of fund s, the sum of One Hundred Dollars ($100.00) (the “ Independent Consideration ”). The Independent Consideration is in addition t o and shall not be applied toward the Purchase Price. Buyer and Seller have bargained for and agree that the Independent Consideration is conside ration for Buyer’s rights under this Agreement and for Seller providing the Due Diligenc e Period (defined in Section 6 below) to Buyer. Upon receipt, the Escrow Holder shall immed iately release the Independent Consideration to Seller, and notwithstanding any pr ovision in this Agreement to the contrary, the Independent Consideration shall be nonrefundable to Buyer in all circumstances. (b) Deposit. Upon the Opening of Escrow (as defined in Section 3.1 below) Buyer shall deposit with Escrow Holder (as d efined in Section 3.1 below), in cash, by certified or bank cashier’s check made payable to Escrow Holder, or a confirmed wire transfer of funds, the sum of Twelve Thousand Five Hundred and no/100 Dollars ($12,500.00) (“ Deposit ”).

The Deposit shall be deposited in an interest-beari ng escrow account and all interest thereon shall be deemed part of the Deposit. If the transa ction contemplated herein does not close due to Buyer’s disapproval or deemed disapproval of any ma tters pertaining to the Property prior to the expiration of the Due Diligence Period, then the De posit shall be refunded to Buyer, this Agreement and the Escrow shall terminate and the pa rties shall have no further obligations to one another with respect to this Agreement, except as otherwise expressly provided for herein.

(c) Purchase Price Balance. Provided all of the other conditions precedent to Buyer’s obligation to purchase the Pro perty are timely satisfied, then prior to the 262

Close of Escrow, Buyer shall deposit with Escrow Ho lder by cash, cashier’s check, or other immediately available funds the difference between (i) the Purchase Price and (ii) the Deposit (the “Purchase Price Balance ”).]

3. Conveyance of Title. Seller agrees to convey by Grant Deed to Buyer fee simple title to the Property, free and clear of all recorded and unrecorded liens, encumbrances, assessments, easements, leases, and taxes except such matters which are acceptable to Buyer in its sole discretion, following Buyer's review of the preliminary title report as provided in this Paragraph 3. Within ten (10) days after the date of this Agreement, Buyer shall cause a title company mutually agreeable to both parties (the " Title Company ") to deliver to Buyer a standard CLTA (or ALTA, at the request of the Buyer) preliminary title report (the " Report ") with respect to the title to the Property, together with legible copies of the exceptions set forth in the Report. Buyer shall have ten (10) days from its receipt of the Report within which to give written notice to Seller of Buyer's approval or disapproval of any of such exceptions (“ Title Objections ”). Buyer's failure to give written approval or disapproval of the Report within such time limit shall be deemed disapproval of the Report. No deeds of trust, mortgages or other liens, except for the lien of property taxes and assessments not yet due, shall be approved exceptions or deemed approved exceptions.. If Buyer notifies Seller of any Title Objections then Seller shall notify Buyer in writing (“ Seller’s Title Response ”) within ten (10) days after receipt of Buyer’s notice of Title Objections (“ Seller’s Title Response Period ”) whether Seller elects to remove the same, and, by the Close of Escrow, Seller shall remove those Title Objections elected to be removed by Seller in Seller’s Title Response. If Seller elects not to cause any Title Objections to be removed, Buyer may elect, by Notice to Seller within five (5) days after receipt of Seller’s Title Response or the expiration of the Seller’s Title Response Period if no Seller’s Title Response is provided, to terminate this Agreement, in which event each Party shall promptly execute and deliver to Escrow Holder such documents as Escrow Holder may reasonably require to evidence such termination and the respective obligations of Buyer and Seller, and Seller shall promptly instruct Escrow Agent to return the Deposit to Buyer. Buyer’s failure to give such Notice of termination on or before such date shall constitute Buyer’s waiver of any Title Objections which Seller is unwilling to cure, in which event such Title Objections shall be deemed acceptable to Buyer and the Close of Escrow shall occur as herein provided.

Seller shall not create any new exceptions or permi t any exceptions to be created to title following the date of this Agreement. The Buyer sh all have the right to approve or disapprove any exceptions reported by the Title Company after Buyer has approved the condition of title for the Property.

4. Title Insurance Policy. Escrow Agent shall, following recording of the Grant Deed, provide Buyer with a CLTA (or ALTA, at the request of the Buyer) policy of title insurance in the amount of the Purchase Price, issued by the Title Company, together with any endorsements reasonably requested by the Buyer, showing fee simple title to the Property vested in Buyer, subject only to the exceptions approved by Buyer as set forth in Paragraph 3 and the printed exceptions and stipulations in the policy. Buyer shall pay the title policy premium.

5. Escrow.
263

5.1 Opening of Escrow. Within three (3) business days of Buyer’s receipt of a fully executed Agreement, Buyer shall open an escrow account (the " Escrow ") in accordance with this Agreement at First American (the " Escrow Agent "). This Agreement, together with the escrow instructions prepared by Escrow Agent and executed by Buyer and Seller, constitutes the joint escrow instructions of Buyer and Seller, and Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts necessary to close this Escrow in the shortest possible time.

5.2 Closing of Escrow. For purposes of this Agreement, the “ Close of Escrow ” shall be defined as the date that the grant deed (“ Grant Deed ”), the form of which is attached hereto as Exhibit B, conveying the Property to Buyer, is recorded in the Official Records of the Recorder of Riverside County, California. The date upon which the Close of Escrow actually occurs shall sometimes be referred to herein as the “ Closing Date ”. The Closing Date shall occur within ten (10) business days after the expiration of the Due Diligence Period, unless extended by the mutual written consent of the parties hereto.

6. Due Diligence Period. Buyer shall have a period of ninety (90) days following the Effective Date (the " Due Diligence Period "), to satisfy itself in its sole and absolute discretion, with all physical, legal and investment aspects of the Property and its condition and suitability for Buyer (including, without limitation, zoning, the environmental and physical condition of the Property; compliance with any laws, ordinances, codes, statutes, rules, orders, decisions and/or regulations with respect to the Property or any aspects of the Property (collectively the "Due Diligence "). If, prior to the expiration of the Due Diligence Period, Buyer notifies Seller and Escrow Holder in writing of Buyer’s disapproval of the Property (“ Buyer’s Disapproval Notice ”) or if Buyer fails to notify Seller and Escrow Holder of Buyer’s approval of the Property on or before the end of the Due Diligence Period (which shall be deemed to constitute Buyer’s disapproval of the Property), such disapproval shall act to terminate this Agreement and the Escrow created pursuant hereto, in which event Buyer and Seller hereby direct Escrow Holder to pay the Deposit (together with accrued interest thereon) to Buyer and this Agreement shall have no further force and effect (except for any provision hereof expressly providing that same is to survive termination hereof), and Buyer and Seller shall have no liability or obligation hereunder whatsoever, except as otherwise expressly provided for herein. If, prior to the expiration of the Due Diligence Period, Buyer notifies Seller and Escrow Holder in writing of Buyer’s approval of the Property (“ Buyer’s Approval Notice ”), such approval shall satisfy this condition. Upon Seller’s delivery of an Approval Notice, Escrow Holder shall release the Deposit (together with accrued interest thereon) directly to Seller, and the Deposit shall be nonrefundable to Buyer.

6.1 Buyer’s Investigations. During regular business hours within the Due Diligence Period, upon at least twenty-four (24) hours prior written notice and subject to Seller’s right to accompany Buyer at all times, Buyer, its agents, employees, architects, engineers, consultants and contractors shall have the right to enter the Property to conduct an ALTA survey and any non-intrusive investigations, inspections and tests of the Property, at Buyer’s sole cost and expense, as Buyer deems reasonably necessary to evaluate the condition and suitability of the Property. Buyer shall use care and consideration in connection with all of its inspections or tests. Buyer shall also have the right to enter upon the Property for purposes of conducting any invasive inspections including, but not limited to, a Phase 2 Environmental Site Assessment. 264

Buyer shall restore the Property as near as reasonably possible to its condition prior to any intrusive or invasive tests and/or inspections. Buyer shall indemnify, defend (with counsel reasonably satisfactory to Seller) and hold Seller harmless from and against any and all loss, expense, claim, damage, liability and injury to person or property resulting from the acts of Buyer, Buyer’s employees, agents, consultants, architects, engineers, contractors and/or subcontractors on the Real Property or Improvements in connection with the performance of any investigation or other activities upon the Real Property or Improvements as contemplated herein.

The foregoing indemnity, defense and hold harmless obligations do not apply to (a) any loss, liability cost, claim, damage, injury or expense to the extent arising from the negligent acts or omissions of Seller, (b) any diminution in value in the Property arising from or relating to matters discovered by Buyer during its investigation of the Property, (c) any latent defects in the Property discovered by Buyer, and (d) the release or spread of any Hazardous Material (as defined in Paragraph 11.12 herein) that are discovered (but not deposited) on or under the Property by Buyer unless caused by the negligence of Buyer or its agents or contractors. The indemnification and defense obligations of Buyer in this Paragraph 6.1 shall survive the Close of Escrow or termination of this Agreement.

6.2 Property Documents. Within five (5) days after the Effective Date, Seller shall provide Buyer with true and correct copies of the following documents, to the extent such documents are currently existing, and are within Seller’s possession, custody, or control (collectively the “ Property Documents ”):
a. All title reports, easements, and covenants, conditions and restrictions (CC&Rs) pertaining to the Property;
b. All compliance notices and reports (including notices of violation or any correspondence from any government agency with jurisdiction over the Property), geological and soils reports, building or other inspection reports, environmental reports (including any Phase I and Phase II reports), structural reports and other written agreements and notices that affect the ownership, operation, maintenance, repair, improvement or development of the Property;
c. Any claims, litigation, actions or other legal proceedings affecting the Property;
d. Any ALTA surveys or other surveys pertaining to the Property;

7. Escrow Agent Authorization. Escrow Agent is authorized to, and shall:

7.1 Pay and Charge Seller. Pay and charge Seller for any amount necessary to place title in the condition necessary to satisfy Paragraph 3 of this Agreement and any Escrow fees and other closing costs and expenses paid by sellers pursuant to the custom in the County of Riverside.

7.2 Pay and Charge Buyer. Pay and charge Buyer for any Escrow fees and other closing costs and expenses paid by buyers pursuant to the custom in the County of Riverside.
265

7.3 Recording. Record the Grant Deed upon receipt of the Purchase Price.

7.4 Disbursement. Disburse the Purchase Price less prorations to Seller, record the Grant Deed and Certificate of Acceptance, and deliver the title policy and the Non- Foreign Transferor Declaration to Buyer, when conditions of the Escrow have been fulfilled by Buyer and Seller.

7.5 Title Policy. Direct the Title Company to issue the Title Policy to Buyer.

7.6 Fee and Documentary Transfer Tax Exemptions. Escrow Agent shall not charge either party for recording fees or documentary transfer tax. No documentary transfer tax or recording fees shall be due because Buyer is a public entity.

7.7 Prorations.
a. Rents . There are no rents to prorate because there are no tenants. b. Taxes . Escrow Agent shall pay and charge Seller for the portion of the tax bill installment that is currently due and payable and assessments and any penalties and interest thereon allocable to the period prior to the close of Escrow. Escrow Agent shall also pay and charge Seller for any unpaid delinquent property taxes and/or penalties and interest thereon, and for any delinquent assessments or bonds against the Property. The portion of current property taxes which would otherwise be allocable to the period after the close of Escrow shall not be allocated, as Buyer is exempt from payment of property taxes. Seller shall have the sole right, after Close of Escrow, to apply to the Riverside County Tax Collector for a refund of any excess property taxes which have been paid by Seller with respect to the Property. This refund would apply to the period after Buyer's acquisition of the Property, pursuant to Revenue and Taxation Code Section 5096.7.

8. Conditions Precedent to Close of Escrow.

8.1 Buyer's Conditions Precedent to Closing. The obligation of the Buyer to complete the purchase of the Property is subject to the satisfaction of the following conditions:
a. Seller shall deliver through Escrow an executed, acknowledged and recordable Grant Deed sufficient to convey fee title to the Buyer as set forth in Paragraph 3. b. Seller shall deliver a completed California Form 593. c. Seller shall deliver a completed Owner’s Affidavit acceptable to the Title Company.
d. A closing statement prepared (or approved) by the Title Company and approved by Seller and Buyer (“ Closing Statement ”), signed by Seller. e. Seller shall deliver through Escrow such other funds and documents as Escrow Holder may reasonably require and as are necessary to comply with Seller's obligations under this Agreement.
266

f. Seller shall not be in default of any of its obligations under the terms of this Agreement, and all of Seller's representations and warranties made as of the date of this Agreement shall continue to be true and correct as of the close of Escrow. g. Buyer shall have approved the condition of title to the Property pursuant to Paragraph 3 and Escrow Agent shall have committed to deliver to Buyer a title insurance policy as required by Paragraph 3 hereof.
h. Buyer shall have provided an Approval Notice pursuant to Paragraph 6.

On failure of any of the conditions set forth above, Buyer may terminate its obligations under this Agreement with no further liability to Seller by giving notice to Seller on or before the expiration of the time allowed for each condition. In the event of such termination by the Buyer, the Escrow Agent shall return the Deposit and Purchase Price, if deposited, to Buyer. Buyer's failure to elect to terminate its obligations shall constitute a waiver of the condition by Buyer.

8.2 Seller’s Conditions Precedent to Closing. The obligation of Seller to complete the sale of the Property is subject to the satisfaction of the following conditions:
a. The Buyer shall not be in default of any of its obligations under the terms of this Agreement, and all of Buyer's representations and warranties made as of the date of this Agreement shall continue to be true and correct as of the close of Escrow. b. The Buyer shall have deposited with the Escrow Agent immediately available funds in an amount equal to the Purchase Price and the Buyer's share of costs described herein.
c. Buyer shall have deposited a signed Certificate of Acceptance with the Escrow Agent.
d. Buyer shall have deposited a Closing Statement, signed by Buyer, with Escrow Agent.
e. Buyer shall have completed, signed, and deposited with Escrow Holder any transfer tax form, affidavit or declaration required by any laws with respect to the transfer of title to the Property.

On failure of any of the conditions set forth above, Seller may terminate its obligations under this Agreement with no further liability to Buyer by giving notice to Buyer on or before the expiration of the time allowed for each condition. Seller's failure to elect to terminate its obligations shall constitute a waiver of the condition by Seller.

9. Possession and Disposition of Personal Property. Seller shall, prior to the close of Escrow, remove or otherwise dispose of all personal property located on the Property. All personal property remaining on the Property after the Closing shall become the property of Buyer and Buyer may dispose of same without liability as it alone sees fit, and Seller shall be liable for the costs of removal which are incurred by the Buyer. Buyer shall not be liable for any 267

loss of or damage to the personal property remaining on the Property, regardless of when loss or damage occurs.

10. Seller Covenants

10.1 Litigation. Seller shall immediately notify Buyer of any lawsuits, condemnation proceedings, rezoning, or other governmental order or action, or any threat thereof, known to Seller which might affect the Property or any interest of Buyer.

10.2 Notices of Violation . If after the Effective Date Seller receives any notice from any governmental agency or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation, Seller shall notify Buyer within ten (10) days of receipt of such notice. Seller then, at its option, may either elect to perform the work or take the necessary corrective action prior to the close of Escrow or refuse to do so, in which case Seller shall notify Buyer of such refusal and Buyer shall be entitled to either close Escrow with knowledge of such notice(s) or terminate this Agreement.

10.3 Seller's Indemnity.
a. Seller hereby indemnifies and holds Buyer harmless from any and all losses, damages, costs, liabilities and expenses, including, without limitation, reasonable attorneys' fees (and those fees incurred upon any appeals) incurred or suffered by Buyer as a result of the breach by Seller of any of the representations and warranties contained in this Agreement (subject to the Limitation Period set forth in Paragraph 11.15), the failure by Seller to comply with any of the covenants contained in this Agreement or any other default by Seller under the terms of this Agreement. Seller further agrees to defend, indemnify and hold Buyer harmless from and against liabilities arising (including reasonable attorney's fees and cost in defending against claims) out of the ownership, operation or maintenance of the Property during Seller's period of ownership.
b. Seller agrees to indemnify, defend and hold Buyer harmless from and against any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, remediation expense, or other expense (including, without limitation, attorneys' fees), resulting from, arising out of, or based upon (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials (defined below) prior to the Close of Escrow on, under, in or about, the Property, or the transportation of any such Hazardous Materials to or from the Property, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials prior to the Close of Escrow on, under, in or about, to or from, the Property. This indemnity shall include, without limitation, any damage, liability, remediation expense, fine, penalty, parallel indemnity after closing, cost or expense arising from or out of any claim, action, suit or proceeding for personal injury, including sickness, disease or death, tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination, leak, spill, release or other adverse effect on the environment. This indemnity extends to liability arising from (a) acts or omissions to act occurring prior to or up to the Closing Date or (b) any condition existing 268

upon the Close of Escrow or which arises after the Close of Escrow due to acts or omissions to act occurring on or prior to the Close of Escrow, whether any such claim is asserted prior to or after the Close of Escrow. Seller shall not be responsible for damage, liability, fines, penalties or costs or expenses arising from acts or omissions occurring after the Close of Escrow.

11. Seller Representations and Warranties. Seller represents and warrants to Buyer that:

11.1 Pending Claims . To the best of Seller's knowledge, there are no actions, suits, claims, legal proceedings, or any other proceedings affecting the Property or any portion thereof, at law, or in equity before any court or governmental agency, domestic or foreign.

11.2 Encroachments . To the best of Seller's knowledge, there are no encroachments onto the Property by improvements on any adjoining property, nor do any buildings or improvements located on the Property encroach on other properties.

11.3 Condition of Property . The Property is in good condition, and until the close of Escrow, Seller shall maintain the Property in good condition and state of repair and maintenance, and shall perform all of its obligations under any service contracts or other contracts affecting the Property.

11.4 Seller's Title . Until the close of Escrow, Seller shall not do anything which would impair Seller's title to any of the Property.

11.5 Utilities . All utilities including, without limitation, gas, electricity, water, sewage, and telephone, are available to the Property, and to the best of Seller's knowledge, all items are in good working order.

11.6 Conflict with Other Obligation. To the best of Seller's knowledge, neither the execution of this Agreement nor the performance of the obligations herein will conflict with, or breach any of the provisions of any bond, note, evidence of indebtedness, contract, lease, covenants, conditions and restrictions, or other agreement or instrument to which Seller or the Property may be bound.

11.7 Authority . Seller is the owner of and has the full right, power, and authority to sell, convey, and transfer the Property to Buyer as provided herein and to carry out Seller's obligations hereunder. If Seller is a corporation, partnership, limited liability company or other similar entity, each party executing this Agreement on behalf of Seller represents and warrants that such person is duly and validly authorized to do so on behalf of Seller.

11.8 Bankruptcy . Neither Seller nor any related entity is the subject of a bankruptcy proceeding, and permission of a bankruptcy court is not necessary for Seller to be able to transfer the Property as provided herein.

11.9 Governmental Compliance . Seller has not received any notice from any governmental agency or authority alleging that the Property is currently in violation of any law, ordinance, rule, regulation or requirement applicable to its use and operation. 269

11.10 Right to Possession . No person or entity other than Seller has the right to possess the Property or any portion of it, as of the date of this Agreement.

11.11 Non-Foreign Transferor . Seller is not a "foreign person" within the meaning of 26 U.S.C.A. §1445(f)(3) and Seller is not, nor is any person who owns a controlling interest in or otherwise controls Seller, (a) listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or on any other similar list maintained by the OFAC pursuant to any authorizing statute, Executive Order or regulation (collectively, "OFAC Laws and Regulations"); or (b) a person either (i) included within the term "designated national" as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (ii) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or similarly designated under any related enabling legislation or any other similar Executive Orders (collectively, the "Executive Orders"). Neither Seller nor any of its principals or affiliates is (x) a person or entity with which Buyer is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, or that commits, threatens or conspires to commit or supports "terrorism" as defined in the Executive Orders, or (y) is affiliated or associated with a person or entity listed in the preceding clause (x). To the actual knowledge of Seller, neither Seller nor any of its principals or affiliates, nor any brokers or other agents acting in any capacity in connection with the transactions contemplated herein (I) deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked pursuant to the Executive Orders or (II) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law. As used herein, "Anti-Terrorism Law" means the OFAC Laws and Regulations, the Executive Orders and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107- 56, 115 Stat. 272 (2001), as amended.

11.12 Hazardous Materials . Neither Seller nor any current or prior tenant or third party, has used, generated, transported, discharged, released, manufactured, stored, or disposed any Hazardous Material from, into, at, on, under, or about the Property. Additionally, Seller has not received any written notice that the Property has been or is in violation of any Environmental Law.

The term " Hazardous Material " as used herein shall mean any hazardous or toxic substances, materials, chemicals, or wastes in any form and in any concentration that is or becomes, prior to the Close of Escrow, regulated by the United States or any state or local government authority having jurisdiction over the Property (including any present order or agreement imposing liability or standards concerning any such substances, materials, chemicals, or wastes and any future such order or agreement that becomes effective prior to the Close of Escrow), and includes without limitation: any "hazardous substance," as that term is defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) (42 United States Code sections 9601-9675); any "hazardous waste," as that term is defined in the Resource Conservation and Recovery Act of 1976 (RCRA) (42 United States Code sections 6901-6992k); petroleum products; volatile organic compounds; radioactive materials; asbestos and lead paint, in any form or condition; and substances or compounds containing PCBs. The term " Environmental Law " as used herein shall mean any federal, state, or local 270

law, ordinance or regulation, or any order, demand or guidance document of any governmental agency, relating to Hazardous Material.

11.13 Representations True and Correct at Close of Escrow. Each of the representations and warranties made by Seller in this Agreement, shall be true and correct in all material respects on the date hereof, and shall be deemed to be made again as of the Close of Escrow, and shall then be true and correct in all material respects. The truth and accuracy of each of the representations and warranties of Seller contained in this Agreement are conditions precedent to the Close of Escrow.

11.14 Change of Situation . Until the close of Escrow, Seller shall, upon learning of any fact or condition which would cause any of the warranties and representations in Paragraphs 11.1 through 11.14 not to be true as of the close of Escrow, immediately give written notice of such fact or condition to Buyer.

11.15 Limitation Period . Anything to the contrary notwithstanding, the representations and warranties in Paragraphs 11.1 through 11.14 and Seller's representation in Paragraph 13 hereof shall be deemed to survive the Close of Escrow and the delivery of the Grant Deed for a period not to exceed two (2) years after the Closing Date ("Limitation Period") and no action, proceeding, suit or claim of any kind may be commenced or asserted by virtue of any of the representations or warranties contained in Paragraphs 11.1 through 11.14 after the Limitation Period has expired. No claim for breach of a representation or warranty by Seller shall be actionable or payable by Seller if the breach in question results from or is based on a condition, state of facts or other matter which was actually known to Buyer prior to the Close of Escrow. If Buyer has actual knowledge of the incorrectness of any representation or warranty by Seller and fails to so notify Seller prior to the Close of Escrow, then such representation or warranty shall be deemed to be stricken from this Agreement and shall be of no further force or effect.

12. Buyer Representations and Warranties. Buyer represents and warrants to Seller as follows, all of which shall survive the Close of Escrow:

12.1 Authority . Buyer has the capacity and full power and authority to enter into and carry out the agreements contained in, and the transactions contemplated by, this Agreement, and this Agreement has been duly authorized and executed by Buyer and, upon delivery to and execution by Seller, shall be a valid and binding Agreement of Buyer. Buyer represents and warrants that each person executing this Agreement is legally competent and is duly authorized so as to fully and legally bind Buyer.

12.2 No Bankruptcy . Buyer is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor protection statute and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute. Buyer is not entering into the transactions described in this Agreement intending to defraud any creditor or to prefer the rights of one creditor to any other. Buyer and Seller have negotiated this Agreement at arm's- length and the consideration paid represents fair value for the assets to be transferred. Buyer’s representations and warranties shall survive the Close of Escrow. 271

12.3 Representations True and Correct at Close of Escrow. Each of the representations and warranties made by Buyer in this Agreement, shall be true and correct in all material respects on the date hereof, and shall be deemed to be made again as of the Close of Escrow, and shall then be true and correct in all material respects. The truth and accuracy of each of the representations and warranties, and the performance of all covenants of Buyer contained in this Agreement, are conditions precedent to the Close of Escrow.

12.4 No Breach . Buyer represents and warrants that the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in any breach of the terms of, conditions of, or constitute a default under, any instrument or obligation by which Buyer is bound, or violate any order, writ, injunction or decree of any court in any litigation to which Buyer is a party.

12.5 Change of Situation . Buyer shall notify Seller immediately of any facts or circumstances that are contrary to the foregoing representations and warranties contained in Paragraphs 12.1 to 12.4.

13. No Brokers. Seller and Buyer each warrants and represents that it has not engaged the services of any agent, finder or broker in connection with the transaction which is the subject of this Agreement, and that it is not liable for any real estate commissions, broker's fees or finder's fees which may accrue by means of the sale of the Property. Seller and Buyer agree to and do hereby indemnify and hold the other harmless from and against any and all costs, liabilities, losses, damages, claims, causes of action or proceedings which may result from any broker, agent or finder, licensed or otherwise, which it has employed in connection with the transaction covered by this Agreement.

14. Condemnation or Casualty . Seller shall promptly notify Buyer of any casualty to the Property or any condemnation proceeding of which Seller has received written notice or which has commenced or occurred prior to the Close of Escrow. If any such damage or proceeding relates to or may result in the loss of any material portion of the Property then Buyer shall, at its option, elect in writing to Seller and Escrow Holder not later than two (2) days prior to the scheduled date for the Close of Escrow as determined pursuant to Paragraph 5.2 hereof, either to: (a) terminate this Agreement, in which event all funds deposited by Buyer into and remaining in Escrow together with any interest accrued thereon shall be returned to Buyer and neither party shall have any further rights or obligations hereunder (except those obligations of this Agreement that by their terms survive termination); or (b) continue the Agreement in effect without adjustment to the Purchase Price and Seller shall have no obligation for any repair or restoration to the Property, in which event upon the Close of Escrow, Buyer shall be entitled to any compensation, insurance proceeds, awards or other payments or relief resulting from such casualty or condemnation proceeding relating to the Property and Buyer shall be credited at the Close of Escrow with the amount of any deductible under the applicable insurance policies in the event of any such casualty.

15. Default .

15.1 Liquidated Damages for Buyer Default; Limitation on Liability. IF

CLOSE OF ESCROW DOES NOT OCCUR DUE TO BUYER COMMITTING A 272

DEFAULT UNDER THIS AGREEMENT, THEN IN ANY SUCH EVENT, PROVIDED

THAT SELLER IS NOT IN DEFAULT OF ITS OBLIGATIONS FOR THE CLOSE OF

ESCROW, THE ESCROW HOLDER MAY BE INSTRUCTED BY SELLER, AND

SELLER SHALL BE ENTITLED TO SO INSTRUCT ESCROW HOLDER, TO CANCEL

THE ESCROW AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON

THE CIRCUMSTANCES NOW EXISTING, KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH SELLER’S DAMAGE BY REASON OF BUYER’S DEFAULT. ACCORDINGLY, BUYER AND SELLER

AGREE THAT, IN THE EVENT OF DEFAULT BY BUYER UNDER THIS

AGREEMENT, IT WOULD BE REASONABLE AT SUCH TIME TO AWARD SELLER “LIQUIDATED DAMAGES” EQUAL TO THE AMOUNT REPRESENTED BY THE

DEPOSIT, AND SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT, TOGETHER WITH ANY INTEREST ACCRUED THEREON AS SELLER’S SOLE AND EXCLUSIVE REMEDY AT LAW AND EQUITY.

SELLER: ______ BUYER:__________.

15.2 Seller’s default. In the event the sale of the Property as contemplated hereunder is not consummated due to Seller’s default hereunder, including the failure of any condition set forth in Paragraph 8.1, Buyer shall be entitled, as its sole remedy, either (i) to be reimbursed by Seller for legal and other expenses incurred in conducting its Due Diligence up to a maximum amount of $25,000 and to receive the return of the Deposit, which return shall operate to terminate this Agreement and release Seller from any and all liability hereunder, or (b) to enforce specific performance of Seller’s obligation to convey the Property to Buyer in accordance with the terms of this Agreement, provided that Buyer files suit for specific performance as set forth in the last sentence of this Paragraph 15.2 on or before thirty (30) days following the date upon which Close of Escrow was to have occurred, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. Buyer expressly waives its rights to seek damages in the event of Seller’s default hereunder provided, however, no such default shall be deemed to have occurred unless and until Buyer has given Seller written notice thereof, describing the nature of the default, and Seller has failed to cure such default within five days after receipt of such notice (and the Close of Escrow shall be extended, if necessary, to allow the Seller the full five day period).

16. Attorney's Fees. Except as provided in Paragraph 15.2, each party shall be responsible for their respective legal fees in connection with the preparation of this Agreement and the transaction contemplated by the Agreement, whether or not Close of Escrow occurs. In the event any declaratory or other legal or equitable action is instituted between Seller, Buyer and/or Escrow Agent in connection with this Agreement, then as between Buyer and Seller, the prevailing party shall be entitled to recover from the losing party all of its costs and expenses, including court costs and reasonable attorneys' fees, and all fees, costs and expenses incurred on any appeal or in collection of any judgment.

17. Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered, sent by facsimile or email, reputable 273

overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received upon the earlier of: (i) if personally delivered, the date of delivery to the address of the person to receive such notice; (ii) if mailed, three (3) business days after the date of posting by the United States post office; (iii) if delivered by Federal Express or other overnight courier for next business day delivery, the next business day; or (iv) if sent by facsimile or email, with the original sent on the same day by overnight courier for next business day delivery, the date on which the facsimile or email is received, provided that the email or facsimile is received after 5:00 P.M. Pacific Time the facsimile or email shall be deemed received the next day. Notice of change of address shall be given by written notice in the manner described in this Paragraph 17. Rejection or other refusal to accept or the inability to deliver because of a change in address of which no notice was given shall be deemed to constitute receipt of the notice, demand, request or communication sent. Unless changed in accordance herewith, the addresses for notices given pursuant to this Agreement shall be as follows:

If to Buyer: City of Eastvale
12363 Limonite Avenue, Suite 910
Eastvale, CA 91752
Attn: Jimmy Chung, Public Works Director / City Engineer With a Copy to: Burke, Williams & Sorensen, LLP
1770 Iowa Avenue, Suite 240
Riverside, CA 92507
If to Seller: Trinidad Perez, Jr.
14821 Chandler St
Eastvale, CA 92880

18. Gender and Number. In this Agreement (unless the context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural shall be deemed to include one another, as appropriate.

19. Entire Agreement. This Agreement and its exhibits constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and the final, complete and exclusive expression of the terms and conditions thereof. All prior agreements, representations, negotiations and understanding of the parties hereto, oral or written, express or implied, are hereby superseded and merged herein.

20. Captions. The captions used herein are for convenience only and are not a part of this Agreement and do not in any way limit or amplify the terms and provisions hereof.

21. Governing Law. This Agreement and the exhibits attached hereto have been negotiated and executed in the State of California and shall be governed by and construed under the laws of the State of California, without reference to its choice of law provisions.

22. Waiver . The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof. 274

23. Invalidity of Provision. If any provision of this Agreement as applied to any party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.

24. Amendments. No addition to or modification of any provision contained in this Agreement shall be effective unless fully set forth in writing by Buyer and Seller.

25. Counterpart Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.

26. Electronic Signatures. The parties hereby acknowledge and agree that facsimile signatures or signatures transmitted by electronic mail in so-called “pdf” format shall be legal and binding and shall have the same full force and effect as if an original of this Agreement had been delivered. Seller and Buyer (i) intend to be bound by the signatures on any document sent by facsimile or electronic mail, (ii) are aware that the other party will rely on such signatures, and (iii) hereby waive any defenses to the enforcement of the terms of this Agreement based on the foregoing forms of signatures.

27. Time of Essence. Time is of the essence of each provision of this Agreement.

28. Binding Upon Successors. The terms and conditions, covenants, and agreements set forth herein shall apply to and bind the heirs, executors, administrators, assigns and successors of the parties hereof.

29. Not an Offer . This Agreement is transmitted for examination only and does not constitute an offer, and the Agreement shall not become effective until a fully executed original hereof shall be delivered to Buyer and Seller.

30. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time.

31. Legal Advice . Each party represents and warrants to the other the following:
they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise.
275

32. 1031 Exchange. If Seller notifies the Buyer prior to the Closing that Seller wishes to attempt to effectuate a "tax-free" exchange pursuant to Section 1031 or Section 1033 of the Internal Revenue Code (“ Exchange Transaction ”) in connection with the transaction contemplated in this Agreement, the Buyer shall cooperate with Seller, at no cost, expense, or liability to Buyer, in the Seller's attempt to effectuate such Exchange Transaction including, without limitation, an amendment to this Agreement pertaining to the Exchange Transaction and a consent to the assignment of Seller’s rights hereunder to a qualified intermediary, and providing written acknowledgment of receipt of such notices as Seller furnishes to Buyer concerning the Exchange Transaction. Buyer makes no representations to the Seller that any such Exchange Transaction shall be treated as "tax-free" by the Internal Revenue Service. Seller agrees to indemnify Buyer from all liability with respect to any action which the Seller requests the Buyer to take pursuant to this Paragraph 32, and to reimburse the Buyer for all fees, costs, and expenses (including reasonable attorney's fees) incurred by the Buyer as a result of the Seller's election to participate in an Exchange Transaction. The Buyer shall not be required to hold title to any real estate or other assets in order to cooperate with the Seller's Exchange Transaction.

33. Cooperation . Buyer and Seller agree to execute such instruments and documents and to diligently undertake all actions pursuant to the provisions hereof in order to consummate the purchase and sale herein contemplated and shall use their commercially reasonable efforts to accomplish the Close of Escrow in accordance with the provisions hereof; provided, however, Seller and Buyer shall not be required to execute or deliver any document or instrument that materially increases any of either party’s obligations or materially decreases either party’s rights under the terms and provisions of this Agreement.
[Remainder of Page Intentionally Left Blank]
276

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of _______________, 2024.

SELLER:

By:________________________
Trinidad Perez, Jr.

Date: ______________________
[Buyer Signature Page Follows]
277

BUYER:

By:_______________________
Mark Orme, City Manager

Date:_______________________

Approved as to Form:

_____________________________
Erica Vega, City Attorney

Attest:

______________________________
Marc Donohue, City Clerk

278

EXHIBIT “A”
Legal Description
Real property in the City of Eastvale, County of Riverside, State of California, described as follows:

LOT 50 OF PERSIMMON REPUBLIC ACRES, AS PER MAP RECORDED IN BOOK 12,
PAGE 98 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ..

EXCEPT PARCEL 2230-5 AS SHOWN ON RECORD OF SURVEY RECORDED DECEMBER 15, 1971 IN BOOK 57, PAGES 94-97 INCLUSIVE OF RECORDS OF SURVEY , RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

APN: 144-080-010

Real property in the City of Eastvale, County of Riverside, State of California, described as follows:

LOT 51 OF PERSIMMON REPUBLIC ACRES, AS SHOWN BY MAP ON FILE IN BOOK 12,
PAGE(S) 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

EXCEPT PARCEL 2230-6 AS SHOWN ON RECORD OF SURVEY RECORDED DECEMBER 15, 1971 IN BOOK 57, PAGES 94-97 INCLUSIVE OF RECORDS OF SURVEY , RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

APN: 144-080-011
279

EXHIBIT “B”
Form of Grant Deed

RECORDING REQUESTED BY
AND
WHEN RECORDED RETURN TO:

City of Eastvale
City Clerk
Eastvale City Hall
12363 Limonite Ave., Suite 910
Eastvale, CA 91752

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§ 27383,
27388.1(a)(2)(D)

SPACE ABOVE THIS LINE FOR RECORDER'S USE

GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(S):

DOCUMENTARY TRANSFER TAX IS $0.00 [exempt per
Revenue & Taxation Code § 11922 and Eastvale Municipal
Code § 4.22.070]

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,

TRINIDAD PEREZ, JR., a married man as his sole and separate property

hereby GRANT(S) to

CITY OF EASTVALE, a municipal corporation

the real property in the City of Eastvale, County of Riverside, State of California described in Exhibit "A" attached hereto and as further identified in Exhibit “B” attached hereto (the “ Property ”), all incorporated herein by this reference.

GRANTOR:

___________________
Trinidad Perez, Jr.

280

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

STATE OF CALIFORNIA )
)

COUNTY OF RIVERSIDE)

On before me, , Notary Public, personally
appeared who proved to me on the basis of sa tisfactory evidence to be the person(s) whose name(s) is/are s ubscribed to the within instrument and acknowledged to me that he/she/they executed the sa me in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature

(Seal)

281

4865-5821-6934 v1
Exhibit A
Legal Description of Property

All that certain real property situated in the County of Riverside, State of California, described as follows:

Real property in the City of Eastvale, County of Riverside, State of California, described as follows:

LOT 50 OF PERSIMMON REPUBLIC ACRES, AS PER MAP RECORDED IN BOOK 12,
PAGE 98 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY ..

EXCEPT PARCEL 2230-5 AS SHOWN ON RECORD OF SURVEY RECORDED DECEMBER 15, 1971 IN BOOK 57, PAGES 94-97 INCLUSIVE OF RECORDS OF SURVEY , RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

APN: 144-080-010

Real property in the City of Eastvale, County of Riverside, State of California, described as follows:

LOT 51 OF PERSIMMON REPUBLIC ACRES, AS SHOWN BY MAP ON FILE IN BOOK 12,
PAGE(S) 98 OF MAPS, RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

EXCEPT PARCEL 2230-6 AS SHOWN ON RECORD OF SURVEY RECORDED DECEMBER 15, 1971 IN BOOK 57, PAGES 94-97 INCLUSIVE OF RECORDS OF SURVEY , RECORDS OF RIVERSIDE COUNTY , CALIFORNIA.

APN: 144-080-011

282

4865-5821-6934 v1

Exhibit B
Map of Property

283

4865-5821-6934 v1

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real proper ty dedicated under the foregoing GRANT DEED by TRINIDAD PEREZ, JR., a married man as his s ole and separate property, to the CITY OF EASTV ALE, a California municipal corporation (“C ity”), is hereby accepted by the City Council of the City pursuant to authority conferred by action of said City Council on ____________________ ____, 2024, and the City consents to recordation thereof.

Dated: ______________ CITY OF EASTV ALE,
a California municipal corporation
By: ____________________________
Mark Orme, City Manager

284

AGENDA STAFF REPORT

City Council Meeting

CITY COUNCIL BUSINESS

Agenda Item No. 13.2
October
9, 2024
Business Incentive Loan Program Policy Revisions
Prepared By:

Alexander Fung, Economic Development Manager
Recommended Action(s)
Staﬀ recommends that the City Council review and adopt the revised Business Incen!ve Loan Program Policy.

Summary
The City of Eastvale currently administers and manages a Business Incen!ve Loan Program to support economic development and business a(rac!on ac!vi!es in Eastvale. The Program was oﬃcially approved by the City Council on September 25, 2019 to promote Eastvale as an excellent loca!on for quality businesses, boost business expansion opportuni!es, and enhance local economic growth.

Proposed sales tax genera!ng businesses that are new to Eastvale or exis!ng sales tax genera!ng businesses in Eastvale desiring to expand their gross ﬂoor area by 50% or more are eligible to apply for funding under the City’s Business Incen!ve Loan Program. Eligible applicants must also be either a high-end restaurant, an upscale restaurant, or a premium casual restaurant. According to the current Business Incen!ve Loan Program Policy, eligible applicants should also provide high-quality food, formal and elevated atmospheres, wine lists, and sit-down services. Customers should also be served with cloth napkins and metal utensils. The City retains the ability to determine whether a business is classified as a fine dining restaurant or a premium casual restaurant at its sole discretion.

Businesses receiving loans from the City through the Business Incen!ve Loan Program can use the funds on purchases of business equipment, furniture, and ﬁxtures and working capital expenses.

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expenses. These businesses must also remain opera!onal in Eastvale for at least seven years before the loans are forgiven. During the seven-year period, the City can request ﬁnancial documents from business owners or managers as needed. If these businesses fail to comply with the loan agreements’ terms, the businesses must repay their obligations to the City.

Since the Program’s incep!on, the City has awarded a $75,000 loan to Jinya Ramen Bar on March 10, 2021, a $100,000 loan to Bushﬁre Kitchen on April 27, 2022, and a $100,000 loan to Georgia’s Restaurant on June 26, 2024.

The City Council had previously updated and revised the Business Incen!ve Loan Program Policy on September 27, 2023 to streamline the applica!on review process and provide addi!onal clariﬁca!on for interested applicants. Earlier this year, the Economic Development Team began collabora!ng with the City’s Business and Development Success Ad-Hoc Commi(ee to review and evaluate the current Business Incen!ve Loan Program Policy’s criteria for exis!ng eligible businesses. Based on the recommenda!ons from the Business and Development Success Ad-Hoc Commi(ee, staﬀ desires to present several proposed revisions to the Business Incen!ve Loan Program Policy to better serve the needs of Eastvale’s community.

Background
Proposed revisions to the Business Incen!ve Loan Program Policy include changes to the allowable !meline in which eligible businesses can apply for funding and requirements for exis!ng eligible businesses.

Application Timeline for Eligible Businesses
The exis!ng Policy does not place a deadline for eligible businesses to submit applica!ons. In order to fulﬁll the Business Incen!ve Loan Program’s business a(rac!on and reten!on goals, it is recommended that eligible new businesses must submit applica!ons within 90 days of their ﬁrst days of opera!on. For eligible exis!ng businesses, they must submit applica!ons within 90 days of their ﬁrst days of reopening. The 90-day !meline oﬀers small and medium-sized eligible businesses the necessary ﬂexibility to streamline their opera!ons and suﬃcient !me to prepare the required application materials.

Business Eligibility Criteria for Existing Businesses
The current Policy only requires exis!ng eligible businesses to expand their building footprints by at least 50%. To ensure that the Business Incen!ve Loan Program fulﬁlls the goal of enhancing local economic growth, staﬀ proposes that the Policy be revised to reﬂect that exis!ng eligible businesses must expand their building footprints by at least 50%, with at least half of the expansion area being "front of house" to increase the capacity for dine-in customers, and meet at least one of the following requirements:

1 .

Adding a full-service bar or specialty cocktail program; 2 .

Adding a dedicated pa!o or outdoor covered sea!ng area for the exclusive use of the restaurant's patrons (communal outdoor spaces are ineligible); 3 .

Adding a space for the performance of live music (not a DJ); 4 .

Upgrading from counter service (ordering food at counter, food delivered to table or picked up at counter) to full sit-down service (tableside ordering and delivery of food through waitstaff).
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Similar to new eligible businesses that are seeking funding from the Business Incen!ve Loan Program, exis!ng eligible businesses that are seeking funding to expand its opera!ons must submit the following documentation as part of their applications:
1 .

Application Cover Sheet;
2 .

Internal Revenue Service (IRS) Verification Form;
3 .

List of available collateral, including any to be purchased with loan proceeds; 4 .

Month-to-month projects covering any interim period un!l year-end plus one full ﬁscal year including the assumptions that the projects were based upon; 5 .

Resumes for all business owners and managers;
6 .

Current personal financial statement for each business owner; 7 .

Business data and history;
8 .

Complete Business Plan;
9 .

Fictitious Name Statement (filing and proof of publication); 10 .

Ar!cles of Incorpora!on or Partnership Agreement, Limited Liability Company Ar!cle of Organization;
11 .

Fiscal year-end business financial statements for prior three years (if available); 12 .

Interim business financial statement within 60 days of application date; 13 .

Business federal tax returns for the prior three years to include all suppor!ng schedules and statements (if available);
Copy of current/proposed lease on business premises including accessor’s parcel number; and 14 .

Personal federal tax returns for the prior three years to include all suppor!ng schedules and statements, for each business owner.

Addi!onally, both exis!ng eligible businesses and new eligible businesses will be rated using the same rubric:

Category
Points Available
Reducing sales tax leakage and generate increased sales tax for the City
25 Encourage additional foot traffic and social activity within the proposed business location
25 Risk determination analysis
25 Proposed use of funds
25 TOTAL
100

Environmental
Pursuant to Sec!on 15378 of the California Environmental Quality Act (CEQA) Guidelines, organiza!onal or administra!ve ac!vi!es of governments that do not result in direct or indirect physical changes in the environment are not considered as CEQA projects.

Strategic Plan Action - Priority Level: 1
| Target #: B
| Goal #: A
Revisions to the Business Incen!ve Loan Program Policy will ensure that the City con!nues to provide resources that best meet the needs of the local community, thereby furthering the City’s business attraction and retention efforts.
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Fiscal Impact
Revising the Business Incentive Loan Program Policy will not result in any fiscal impacts to the City.

Prior City Council/Commission Action
The crea!on of the Business Incen!ve Loan Program was approved by the City Council on September 25, 2019. The City Council ﬁrst voted to approve the Program’s ﬁrst award in the amount of $75,000 to Jinya Ramen Bar on March 10, 2021. The City Council subsequently approved the Program’s second award in the amount of $100,000 to Bushﬁre Kitchen on April 27, 2022. The City Council approved another ac!on related to the Business Incen!ve Loan Program on April 27, 2022, which included rescinding the ﬁrst loan agreement with Jinya Ramen Bar and approving a second loan agreement with Jinya Ramen Bar due to complica!ons resul!ng from using Community Development Block Grant (CDBG) funds as loan awards. On September 27, 2023, the City Council updated and revised the Business Incen!ve Loan Program Policy to streamline the applica!on review process and provide addi!onal clariﬁca!on for interested applicants. On June 26, 2024, the City Council approved the Program’s third award in the amount of $100,000 to Georgia’s Restaurant.

Attachment(s)
Attachment 1 - Existing Business Incentive Loan Program Policy

Attachment 2 - Proposed Business Incentive Loan Program Policy Revisions

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CITY OF EASTVALE

BUSINESS INCENTIVE LOAN POLICY

1 I. INTRODUCTION

This written policy is intended as a guide in making credit decisions regarding applications for the Business Incentive Loan Program for the City of Eastvale (City).

This policy is written to allow flexibility as credit needs change. It shou ld be used as a tool to provide consistency for project selection. Projects will be considered for funding on a case -by-case basis, until available funding is exhausted. Only those projects falling within the scope of the guidelines will be considered for funding. Depending on the funding amount, s uccessful applicants will be determined by the City Manager or City Council.

II. PURPOSE

This policy provides financial assistance to support economic development and business retention and expansion goals. The goals are structured to promote Eastvale as a positive place for quality businesses, promote business expansion and attraction to enhance local economic growth, and ensure that government regulations promote a favorable business climate.

This loan program is not to be equated with a loan program available through banking or financial institutions. As a public lender , the source of funds is interested as much in the social benefits as return on investment, and preservation of capital. The return to Eastvale is multiple: increased investment in the business community , job creation, and enhanced business activity, and increased tax revenues and quality of life for our residents.

The purpose of the economic development assistance is to:

1. Reduce Eastvale’s sales tax leakage.

2. Create jobs within the community.

3. Create opportunities for business expansion for existing Eastvale businesses.

4. Create opportunities for recruiting new businesses.

5. Encourage additional foot traffic and social activity within a business location.

6. Diversify the City’s sales tax base.

III. PROHIBITION AGAINST CHANGE IN OWNERSHIP , MANAGEMENT AND

CONTROL OF PARTICIPANT

The qualifi cations and identity of Partici pant in this program are of particular concern to City. It is because of those qualifications and identity that City will enter into an Ag reement with Participant. No voluntary or involuntary successor in interest of Participant shall acquire any rights or powers under this program except as expressly set forth within executed documents under this program. A change in ownership, 289

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2 management and control shall be subject to the approval of City, but such approval shall not be unreasonably withheld.

Participant shall not assign all or any part o f any Agreements or Notes under this program without the prior written approval of City, which appro val shall not be unreasonably withheld.

IV. LOAN FORGIVENESS

Participants in this program will be requi red to remain in operation for a specified amount of time, as outlined in Section V below. In meeting this requirement and compliance with the program , funds loaned will be forgiven at the end of that period.

V. PARTICIPATION PERIOD REQUIRED

The required period of time for program com pliance and fund forgiveness/repayment is contingent upon the amount loaned. The following schedule applies:

Amount of Loan Forgiveness/Operating Period
Up to $100,000. . . . . . . . . . . . . . . . . . . . . . . . ... 7 years

VI. ELIGIBLE BUSINESSES

Proposed sales tax generati ng businesses that are new to Eastvale or existing sales tax genera ting businesses in East vale desiring to expand their gross floor area (square footage) by 50% or more are eligible to apply . Applicants must also be a high-end or upscale restaurant or a premium casual restaurant in order to be eligible.

Eligibility Criteria:

High-end or upscale restaurant or premium casual restaurant providing high - quality food, formal and elevated atmospheres, and wine lists. Examples include, but are n ot limited to, Fleming’s Prime Steakhouse, McCormick and Schmick’s, The Wate r Grill , Jinya Ramen Bar, and Bush fire Kitchen . These businesses should also include sit -down services and serve customers with cloth napkins and metal utensils.

City s hall determine, i n its sole discreti on, whether a business would be a f ine dining restaurant or premium casual restaurant.

VII. ELIGIBLE ACTIVITIES
Within these categories funding can be used for the following types of activities:
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3 • Purchase of business equipment, furniture, and fixtures • Working Capital
Interior and/or exterior leasehold improvements and construction/renovation activities are ineligible expenses. The applicant is responsible for determining whether their use of the loan funds requires the payment of prevailing wages. If prevailing wages must be paid, the applicant must fulfill all applicable prevailing wage requirements.

VIII. APPLICATION REQUIRED DOCUMENTS AND RATING
Prior to applying, applicants are encouraged to contact the City ’s Economic Development Manager at [email protected] to discuss interest in applying to the Loan Program. All 16 of the fol lowing application materials must be submitted electronically to
[email protected]:

1. Application Cover Sheet

2. IRS Tax Return Verification Form (IRS Form 2)

3. Detailed proposal of use of requested funds

4. List of available collateral, including any to be purchased with loan proceeds

5. Month-to-month projections covering any interim period until year end plus one full fiscal year including the assumptions that the projects were based upon

6. Resume/CV for all business owners/managers

7. Current personal financial statement for each business owner

8. Business data and history

9. Complete Business Plan

10. Fictitious Name Statement (filing and proof of publication)

11. Articles of Incorporation OR Partnership Agreement, Limited Liability Company Article of Organization

12. Fiscal year end business financia l statements for prior three years (if available)

13. Interim business financial statement within 60 days of application date

14. Business federal tax returns for the prior three years to include all supporting schedules and statements (if available)

15. Copy of current/proposed lease on business premises including assessor’s parcel number

16. Personal federal tax returns for the prior three year s to include all supporting schedules and statements, for each business owner 291

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4 Given the limited amount of funding a vailable annually, loan proposals submi tted by applicants will be reviewed and graded. Eligible applicants’ loan proposals will be evaluated using the following rating system:

1. Reduce sales leakage in Eastvale and generate increased sales tax for the City.

2. Encourage additional foot traffic and social activity within t he proposed business location.

3. The risk determination analysis (see Section XIII).

4. Proposed use of the funds (responsible and appropriate)

Category Points Available
Reducing sales tax leakage and
generate increased sales tax for the
City
25 Encourage add itional foot traffic and
social activity within the proposed
business location
25 Risk determination analysis 25
Proposed use of funds 25
TOTAL 100

Funding decisions will be made based on the rating of the proposal and the availability of funding. The date of sub mission of a proposal as compared to other submissions is not a factor (e.g., funding is not “first-come, first-served”).

IX. ADMINISTRATION

A. Loan Committee

In order to ensure timely review of applications, a business incentive loan committee will be organized. The Committee will be co mprised of the Ci ty Manager, Community Development Dir ector, Economic Development Manager , and Finance Director (Program Administrator). The Committee will meet as needed to review the applications and recommend approval or den ial based upon the rat ing system in section VIII of th is policy . The C ommittee will also review and recommend approval or denial of requests from approved borrowers for payment deferrals, substitution or release of collatera l, waiver or release of covenants, and amendments to loan documents.

B. Program Administrator

The F inance Director wi ll serve as the Program Administrator. The Pro gram Administrator will market, solicit, review, and process potential borrowers’ 292

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5 applications for credit. The Program Administrator w ill decli ne o r refer out to some oth er agency any applicant who clearly does not qualify under eligibility standards as set forth by the policy. The Program Administrator will recommend new credit, payment defe rrals, release or substitution of collateral, waivers/amendments to loan covenants and exceptions to loan policy to the Loan Committee.

X. LOAN APPROVAL

Regardless of the amount of the loan, all loans must be approved by the City Council.

XI. FUNDING AVAILABILITY

The business incentive loan program is funded on a fiscal year basis. The City of Eastvale’s fiscal year begins on July 1st and ends on June 30th of the f ollowing calendar year. Limited funds are available in each fiscal year when the program is funded.

XII. APPLICATION PERIOD

A. Submittal

Applications will be accepted on a continuous basis until the City Council decides to terminate the program.

B. Processing

Applications will be processed when funds are available. The City has no obligation to process applications if all available funding has been exhausted.

XIII. RISK ASSESSMENT

All loans are subject to analysis to determine risk. Loans will be awarded only to projects, which demonstrate that the servi ce provided is commensurate with the risks incu rred. In return for the public funds provided, the businesses will generate incr eased investment, jobs, business activity, and t hus increased tax revenues.

A. General Credit Criteria

The business loan applications will be analyzed for the following crite ria, based on criteria specified by the U.S. Department of Housing and Urban Development, 293

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6 Office of Community Planning and Develop ment, and by the Smal l Business Administration:

1) Ability to repay in case of default or termination of business.

2) Balance Sheet Analysis
Balance sheet must be sound before the loan is made.

3) Historical earni ngs and cash flow records, from verifiable sourc es as determined by t he loan committee, to ensu re sufficient repayment of all requested credit, and to provide the owner(s) wi th a reasonable level of personal income to satisfy personal obligatio ns. Typical ly, a borro wer will have been profitable during the most recently com pleted year a nd will maintain a cash flow coverage ratio o f 1:1 (defined as earnings before debt service, interest and taxes divided by debt service), with sufficient collater al.

The ratio would be 2:1 without collateral. If partial collateral is pledged , the ratio may be prorated downward.

4) Collateral
Collateral, when available in any form, may be request ed by the Loan Committee. Collateral will be pledged commensurate with the amount of requested credit, as well as a security inter est in newly purchase d assets, or those purchased with loan funds. If the pro ject cannot repay the loan from cash flow, the C ity will collect payment by liquidating the asset and satisfying the s pecific lien securing the property. A letter of credit or b ond may be accepted in lieu of collateral.

5) Commitment
Personal and corporate guarantees may be required. The borrower should sign personally for the loan.

6) Management Experience
The management t eam must hav e experienc e in all areas of running the business: sales, finance, o perations, personnel, etc. The management team includes the principals, directors, senior management, and consultants.

The management team should have direct experience in t hese areas or have comparable business skills which can be transferred.

7) Business Plan
The business plan wi ll help identify worthy ventures . T he monthly cash flow statement for the first year is especially important.

8) Character
The owners and management s hould have f avorable cr edit histories, a reputation for trea ting customers fairly , no bankrupt cy in the pas t five years, 294

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7 and a clean crimin al r ecord. Good character will be determine d by credit reports, payment history with verified vendors, personal inte rview, or ot her means as determined.

All of the above cri teria are important, and the absence of any one item may be sufficient to deny a loan request.

B. Undesirable Credit Applications/Borrowers/Guarantors

Using the guidelines for the Small Business A dministration and the D epartment of Housing and Urban Develo pment, the following are undesirab le without mitigating circumstances acceptable to the Loan Committee:

1) Applications for fundin g th at w ould substantially reduce the amount of non-Federal support for the acti vity available in other recognized, reasonable loan programs available in the target areas;

2) Requests for credit to repay existing creditors

3) Funds used to repay debt to applic ant owner(s), partners, and stockholders

4) Requests for funding from new start-up businesses not associated with a franchise chain or not adding an additional business location

5) Requests for funding for businesses which d o not meet the criteria specified in Section VIII A through C.

6) Non-profit organizations, as designated by Charter/Bylaws, unless designated as approved Community B ased Development Orga nizations (CBDO)

7) Lack of profitable operations, as demonstrated by sources acceptable to Loan Committee

8) Loans to restricted membership or discriminatory groups/organizations.

9) Loans to uses with complete access restrictions based on age.

10) Lack of sufficient equity/highly leveraged situations as determined by Loan Committee.

11) Personal or business bankruptcy, o r prior business failure without sufficient, documented information to mitigate, as determined by Loan Committee;

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8 12) Poor personal or business credit a s evidenced b y many derogatory items including public record ite ms, tax liens, judgments, or excessive exis ting credit as determined by Loan Committee;

13) Undocumented aliens;

14) Felony convi ctions, dis honorable discharge or “Bad Conduct” discharge from military service (each situation will be independently evaluated);

15) Business active in any unlawful activity.

C. Exceptions to Loan Policy

If a project does not fall within the guide lines listed above, but is of such special character and wil l complement the area in which loc ation is proposed, the City Manager or City Council (depending on loan amount) may consider th e project for funding.

XIV. PRICING AND TERMS

Considerations of loan product pricing extended to borrowers will be based on a rate equal to the average rate earned b y the City’s investment in the California Local Agency Investment Fund (LAIF) or the current p rime rate for the fiscal year prior to the issuance of the loan (LAIF’s Annual R eturns: https://www.treasurer.ca.gov/pmia- laif/historical/annual.asp), but in no even t to exceed 1 0 per cen t (1 0%) per annum.

Interest which accrues and is unpaid sha ll be added to principal on a monthly basis and thereafter b ear interest as if it were part of principal. Principal and all accrued and unpaid interest shall be due and paya ble not later than the terms specified in the Note.

Additional terms extended to borrowers will be based on the amount of risk involved.

XV. COLLATERAL

Collateral i s a mandatory requirement, real property preferred but not required .

Property such as equipme nt w ill be con sidered as c ollateral. It is intended that any available collateral from the bor rower and/or guarantor(s) will be required, as w ell as a first lien p osition on an y a ssets purchased with any loan funds. Junior liens on re al property will be required at the discretion of the Loan Committee. However, it will be the policy that all collateral required for loan approval will be of mat erial value. Caution will be used whenever taking a junior lien position on collateral w here there is a substantial senior lien. It wil l be a determination of the Loan Committee whether to waive a collateral position when available.

Titled motor vehicl es, when take n as col lateral, must show the City as mortgagee/lienholder on the certific ate of title, and held in safekeeping by the Finance Director or designee.

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9 In all cases, a UCC -1 and secu rity agreement will be taken against all business assets.

XVI. CESSATION OF BUSINESS

If Particip ant should cease business at the site, participant shal l re pay its obligations to City as provided in the Note which shall be executed when Agreement is signed. The term “ce ase business” shall mean when the site is no lon ger used as th e principal place of business for Participant’s business. Participant shal l give City written notice not less than thirty (30) days prior to cessation of business. If Participant s hould cease business at the site, Participant shall pay to t he City, in ca sh, within fifteen ( 15) days of the Participant’s receipt of written notifi cation from the City of th e balance due on the Note. If the Participant moves the business to a new location within Eastvale the City may elect to not treat this relocation as a cessation of business.

XVII. GUARANTORS

The City will generally follow the rules of the Small Business Administration as to qualification of guarantors:

A. Active Management with any ownership equity in borrower must guaranty

B. Shareholders/owners of 20% or more eq uity in borrower mus t g uaranty regardless of active involvement in management

Guarantees may be secu red or unsecu red as d etermined by the Loan Committee.

XVIII. PROBLEM CREDITS

While it is the inten t of this p olicy to be sensitive to the borrower’s financial needs, a nd the intent to match any repayment schedule to the borrower’s abil ity to repay, it is inevitable that there will be delinquencies and defaults. It is the responsibility of the Program Administrator to monitor all loan payments, especially those t hat are in arrears. It will be the stated policy that upon determination of a “problem credit” the City will purs ue any a nd a ll remedies allo wed by Regulation or Law in a profession al, aggressive, and consistent manner until resolution is reached.

XIX. ACTION OCCURRENCES

The following occurrences will warrant action on the part of the Program Administrator and/or City Council.

A. Delinquent payment – whenever the terms of the Promissory Note are not being met in a timely manner (delinquent by more than 30 days); 297

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10 B. Violation of Loan Covenants – whenever the terms of the Loan Agreement are not being met in a ti mely fash ion. The se verity and immediacy of action is dependent on the type of breach; s ome covenan ts are more serious and l ead to a def ault, while others less severe can sometimes be tolerated at the discretion of the Program Administrator.

C. Receipt of bankruptcy notice;

D. Filing of a “Notice of Default” by another lienholder on real property;

E. Legal Service, such as Writs of Attachment, Tax Liens, Subpoenas for records;

F. Death of debtor or guarantor;

G. Notice of significant legal action against borrower/guarantor;

H. Returned mail from borrower’s address by Post Office;

I. “Skip Trace” inquiry from another creditor.

XX. COLLECTION ACTION

Telephone contact with the borrower/guarantor is the most expedient and cost effective; however, some cases dem and more formal notificati on s uch as “D emand Le tters”, Legal Action, and Foreclosure. Personal site visits and conversations with the borrower are warranted at the discretion of the Program Administrator.

XXI. NON-ACCRUAL LOAN STATUS

Credits will be moved to a n on-accrual status at t he 9 0-day del inquency point unless otherwise directed by the City Council. At this point, many of the aforementioned “Action Steps” sho uld have been star ted; a collectio n plan, if applicable, should be in process at this point. Rewriting the entire Note in an ef fort to prov ide relief to the borrower should be considered after a detailed analysis of the financial condition of the borrower and his/her prospects for timely payments in the future. In any case, the City Manager or the City Council must approve a re-structured Note, depending on the dollar value of the re-structured Note.

XXII. COLLATERAL APPRAISALS

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11 Collateral taken as security for any type of credit should be appraised if it has any significant value. In most cases, rea l property will be the col lateral that is most needed for a third-party appraisal (the City will accept “drive-by” and short -form appraisals).

Since the City is n ot under the scrutiny of Federal and State Banking Regulators, there is more flexibility as t o the extent of any apprai sal and in which circumstances. It is the stated policy that some form of va luation be u sed to determine the equity of any collateral ta ken by the City, reme mbering that the cost and time of obtaining such appraisals may have an adverse affect on the borr ower considering the size of the credit involved. The Loan Committee shall u se its discr etion in al l collateral matters, unless otherwise dictated by the City Council.

XXIII. FINANCIAL INFORMATION

It will be the policy of th e City to require financial statements from each applicant in the form of a balance sheet and income st atement for any and all fiscal year -ends since inception of the business (up to 3 years), and within the past 90 days of application date. Current perso nal financial statements f or e ach business owne r and personal and business federal tax returns for the prior three years are r equired, including all supporting sch edules and statements . The City w ill obtain the written permission of the applicant to verif y any and all tax returns with the Internal Revenue Service for accuracy (IRS Form 4506). Month -to-month projections covering any interim period until year -end, p lus one full fiscal y ear is requir ed, including the assumptions that the projections were bas ed u pon. Additional infor mation wi ll be requested at the discretion of the Program Administrator with direction from the Loan Committee and/or City Council.

All borrowers may be req uired in the Loan Agreement to provide financial information when requested by the Loan Committee and/or City Council:

A. Fiscal Year End balance sheet and income statement.

B. More frequent statements such as Accounts Receivable Agings, work in progress reports, or any other documents requested by the Loan Committee to assist the borrower in the monitoring of the credit.

C. Payroll reports showing employee status.

XXIV. FINANCIAL INQUIRIES

The City will not provide responses to inquiries regarding credit status of program participants. The financial i nformation provided by app licants for the City w ill be kept confidential to the extent permitted by law.

XXV. INSURANCE

299

CITY OF EASTVALE

BUSINESS INCENTIVE LOAN POLICY

12 All collateral taken as security for any credit m ust be insured approp riately as determined by the Loan Committee; ev idence of that coverage must be provided showing the City as “Addition al In sured,” “Loss Payee,” or “Mortgagee,” whichever is appropriate for the collateral insur ed. The lapse of any insu rance will create a d efault on the Loan Agreement, and must be remed ied immediately by the borrower. If necessary, the City will obtain a ppropriate insurance to protect its collateral and debit the premium to the borrower.

Additionally, in the case whe re real estate collat eral is taken, a Policy of I nsurance Record Title (PIRT) of short form title po licy will be requ ired. 300

CITY OF EASTVALE

ECONOMIC DEVELOPMENT LOAN POLICY

TABLE OF CONTENTS

I. INTRODUCTION ______________________________________________________ 1 II. PURPOSE ______________________________________________________________1 III. PROHIBITION AGAINST CHANGE IN OWNERSHIP, MANAGEMENT AND CONTROL OF PARTICIPANT____________________________________________ 1 IV. PARTICIPATION PERIOD REQUIRED ____________________________________ 2 V. ELIGIBLE BUSINESSES ________________________________________________ 2 VI. ELIGIBLE ACTIVITIES _________________________________________________ 2 VII. APPLICATION REQUIRED DOCUMENTS AND RATING ____________________ 3 VIII. ADMINISTRATION ____________________________________________________ 4 IX. LOAN APPROVAL ____________________________________________________ 5 X. FUNDING AVAILABILITY ______________________________________________ 5 XI. APPLICATION PERIOD _________________________________________________ 5 XII. RISK ASSESSMENT ____________________________________________________ 5 XIII. PRICING AND TERMS__________________________________________________ 8 XIV. COLLATERAL ________________________________________________________ 8 XV. CESSATION OF BUSINESS _____________________________________________ 9 XVI. GUARANTORS ________________________________________________________ 9 XVII. PROBLEM CREDITS ___________________________________________________ 9 XVIII. ACTION OCCURRENCES _______________________________________________ 9 XIX. COLLECTION ACTION ________________________________________________ 10 XX. NON-ACCRUAL LOAN STATUS ________________________________________ 10 XXI. COLLATERAL APPRAISALS ___________________________________________ 10 XXII. FINANCIAL INFORMATION REQUIRED _________________________________ 11 XXIII. FINANCIAL INQUIRIES _______________________________________________ 11 XXIV. INSURANCE _________________________________________________________ 11

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1 City of Eastvale
Business Incentive Loan Policy

SECTION 1: INTRODUCTION

This written policy is intended as a guide in making credit decisions regarding applications for the Business Incentive Loan Program for the City of Eastvale (City). This policy is written to allow flexibility as credit needs change. It should be used as a tool to provide consistency for project selection. Projects will be considered for funding on a case -by- case basis, until available funding is exhausted. Only those projects falling within the scope of the guidelines will be considered for funding. Depending on the funding amount, successful applicants will be determined by the City Manager or City Council.

SECTION 2: PURPOSE

This loan program is not to be equated with a loan program available through banking or financial institutions. As a public lender, the source of funds is interested as much in the social benefits as return on investment, and preservation of capital. The return to Eastvale is multiple: increased investment in the business community, job creation, and enhanced business activity, and increased tax revenues and quality of life for our residents.

The purpose of the economic development assistance is to:

1. Reduce Eastvale’s sales tax leakage.

2. Create jobs within the community.

3. Create opportunities for business expansion for existing Eastvale businesses.

4. Create opportunities for recruiting new businesses.

5. Encourage additional foot traffic and social activity within a business location.

6. Diversify the City’s sales tax base.

SECTION 3: PROHIBITION AGAINST CHANGE IN OWNERSHIP, MANAGEMENT

AND CONTROL OF PARTICIPANT

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2 The qualifications and identity of Participant in this program are of particular concern to City. It is because of those qualifications and identity that City will enter into an Agreement with Participant. No voluntary or involuntary successor in interest of Participant shall acquire any rights or powers under this program except as expressly set forth within executed documents under this program. A change in ownership, management, and control shall be subject to the approval of City, but such approval shall not be unreasonably withheld.

Participant shall not assign all or any part of any Agreements or Notes under this program without the prior w ritten approval of City, which approval shall not be unreasonably withheld.

SECTION 4: LOAN FORGIVENESS

Participants in this program will be required to remain in operation for a specified amount of time, as outlined in Section V below. In meeting this requirement and compliance with the program, funds loaned will be forgiven at the end of that period.

SECTION 5: PARTICIPATION PERIOD REQUIRED

The required period of time for program compliance and fund forgiveness/repayment is contingent upon the amount loaned. The following schedule applies:

Amount of Loan Forgiveness/Operating Period
Up to $100,000 7 years

SECTION 6: ELIGIBLE BUSINESSES

Given limited funding availability and strong community desire for more variety of options for dine-in restaurants in the City, at this point in time only restaurants are eli gible for a loan through the program.

Eligibility Criteria:

1) The restaurant must be a high-end / upscale restaurant or premium casual restaurant providing high -quality food . Examples include, but are not limited to, Fleming’s Prime Steakhouse, McCormick and Schmick’s, The Water Grill, Jinya Ramen Bar, Georgia’s Restaurant, and Bushfire Kitchen. These businesses must include sit-down services and serve customers with cloth napkins and metal utensils. City shall determine, in its sole 303

3 discretion, whether a business qualifies as a high-end / upscale restaurant or premium casual restaurant.

2a) The restaurant is new to the City; OR

2b) The restaurant is an existing restaurant in the City and is expanding its square footage by 50% or more, at least half of the expansion area is “front of house” to increase the capacity for dine-in customers, and the restauran t will be adding one or more of the following to its offerings:

• Adding a full service bar or a specialty cocktail program; • Adding a patio or outdoor covered seating area for the exclusive use of the restaurant’s patrons (communal outdoor spaces are ineligible); • Adding a space for the performance of live music (not a DJ); • Upgrading from counter service (ordering food at counter, food delivered to table or picked up at counter) to full sit-down service (tableside ordering and delivery of food through waitstaff).

3) The restaurant submits its application within 90 days of the date of opening / re-opening of the restaurant.

SECTION 7: ELIGIBLE ACTIVITIES

Within these categories funding can be used for the following types of activities:
• Purchase of business equipment, furniture, and fixtures • Working capital

Interior and/or exterior leasehold improvements and construction/renovation activities are ineligible expenses. The applicant is responsible for determining whether their use of the loan funds requires the payment of prevailing wages. If prevailing wages m ust be paid, the applicant must fulfill all applicable prevailing wage requirements.

SECTION 8: APPLICATION REQUIRED DOCUMENTS AND RATING

Prior to applying, applicants are encouraged to contact the City’s Economic Development Manager at [email protected] to discuss interest in applying to the Loan Program. All 16 of the following documentation must be submitted electronically to [email protected].

1. Application Cover Sheet
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4 2. IRS Tax Return Verification Form (IRS Form 2)

3. Detailed proposal of use of requested funds

4. List of available collateral, including any to be purchased with loan proceeds

5. Month-to-month projections covering any interim period until year end plus one full fiscal year including the assumptions that the projects were based upon

6. Resume/CV for all business owners/managers

7. Current personal financial statement for each business owner

8. Business data and history

9. Complete Business Plan

10. Fictitious Name Statement (filing and proof of publication)

11. Articles of Incorporation OR Partnership Agreement, Limited Liability Company Article of Organization

12. Fiscal year end business financial statements for prior three years (if available)

13. Interim business financial statement within 60 days of application date

14. Business federal tax returns for the prior three years to include all supporting schedules and statements (if available)

15. Copy of current/proposed lease on business premises including accessor ’s parcel number

16. Personal federal tax returns for the prior three years to include all supporting schedules and statements, for each business owner

Given the limited amount of funding available annually, loan proposals submitted by applicants will be reviewed and graded. Eligible applicants’ loan proposals will be evaluated using the following rating system:

1. Reduce sales leakage in Eastvale and generate increased sales tax for the City.

2. Encourage additional foot traffic and social activity within the proposed business location.

3. The risk determination analysis (see Section XIII).

4. Proposed use of the funds (responsible and appropriate)

Category Points Available
Reducing sales tax leakage and
generate increased sales tax for the
City
25 Encourage additional foot traffic and
social activity within the proposed
business location
25 Risk determination analysis 25
Proposed use of funds 25
TOTAL 100
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5 Funding decisions will be made based on the rating of the proposal and the availability of funding. The date of submission of a proposal as compared to other submissions is not a factor (e.g., funding is not “first-come, first-served”).

SECTION 9: ADMINISTRATION

Loan Committee
In order to ensure timely review of applications, a business incentive loan committee will be organized. The Committee will be comprised of the City Manager, Community Development Director, Economic Development Manager, and Finance Director (Program Administrator). The Committee will meet as needed to review the applications and recommend approval or denial based upon the rating system in section VIII of this policy.

The Committee will also review and recommend approval or denial of requests from approved borrowers for payment deferrals, substitution or release of collateral, waiver or release of covenants, and amendments to loan documents.

Program Administrator
The Finance Director will serve as the Program Administrator. The Program Administrator will market, solicit, review, and process potential borrowers’ applications for credit. The Program Administrator will decline or refer out to some other agency any applicant who clearly does not qualify under eligibility standards as set forth by the policy. The Program Administrator will recommend new credit, payment deferrals, release or substitution of collateral, waivers/amendments to loan covenants and exceptions to loan policy to the Loan Committee.

SECTION 10: LOAN APPROVAL

Regardless of the amount of the loan, all loans must be approved by the City Council.

SECTION 11: FUNDING AVAILABILITY

The business incentive loan program is funded on a fiscal year basis. The City of Eastvale’s fiscal year begins on July 1st and ends on June 30th of the following calendar year. Limited funds are available in each fiscal year when the program is funded.

SECTION 12: APPLICATION PERIOD

Submittal
Applications will be accepted on a continuous basis until the City Council decides to terminate the program.
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6 Processing
Applications will be processed when funds are available. The City has no obligation to process applications if all available funding has been exhausted.

SECTION 13: RISK ASSESSMENT

All loans are subject to analysis to determine risk. Loans will be awarded only to projects, which demonstrate that the service provided is commensurate with the risks incurred. In return for the public funds provided, the businesses will generate increased investment, jobs, business activity, and thus increased tax revenues.

General Credit Criteria
The business loan applications will be analyzed for the following criteria, based on criteria specified by the U.S. Department of Housing and Urban Development, Office of Community Planning and Development, and by the Small Business Administration:

1) Ability to repay in case of default or termination of business.

2) Balance Sheet Analysis
Balance sheet must be sound before the loan is made.

3) Historical earnings and cash flow records, from verifiable sources as determined by the loan committee, to ensure sufficient repayment of all requested credit, and to provide the owner(s) with a reasonable level of personal income to satisfy personal obligations. Typically, a borrower will have been profitable during the most recently completed year and will maintain a cash flow coverage ratio of 1:1 (defined as earnings before debt service, interest and taxes divided by debt service), with sufficient collateral. The ratio would be 2:1 without collateral. If partial collateral is pledged, the ratio may be prorated downward.

4) Collateral
Collateral, when available in any form, may be requested by the Loan Committee. Collateral will be pledged commensurate with the amount of requested credit, as well as a security interest in newly purchased assets, or those purchased with loan funds. If the project cannot repay the loan from cash flow, the City will collect payment by liquidating the asset and satisfying the specific lien securing the property. A letter of credit or bond may be accepted in lieu of collateral.
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7 5) Commitment
Personal and corporate guarantees may be required. The borrower should sign personally for the loan.

6) Management Experience
The management team must have experience in all areas of running the business: sales, finance, operations, personnel, etc. The management team includes the principals, directors, senior management, and consultants.

The management team should have direct experience in these areas or have comparable business skills which can be transferred.

7) Business Plan
The business plan will help identify worthy ventures. The monthly cash flow statement for the first year is especially important.

8) Character
The owners and management should have favorable credit histories, a reputation for treating customers fairly, no bankruptcy in the past five years, and a clean criminal record. Good character will be determined by credit reports, payment history with verified vendors, personal interview, or other means as determined.

All of the above criteria are important, and the absence of any one item may be sufficient to deny a loan request.

Undesirable Credit Applications/Borrowers/Guarantors
Using the guidelines for the Small Business Administration and the Department of Housing and Urban Development, the following are undesirable without mitigating circumstances acceptable to the Loan Committee:

1) Applications for funding that would substantially reduce the amount of non- Federal support for the activity available in other recognized, reasonable loan programs available in the target areas;

2) Requests for credit to repay existing creditors

3) Funds used to repay debt to applicant owner(s), partners, and stockholders

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8 4) Requests for funding from new start-up businesses not associated with a franchise chain or not adding an additional business location

5) Requests for funding for businesses which do not meet the criteria specified in Section VIII A through C.

6) Non-profit organizations, as designated by Charter/Bylaws, unless designated as approved Community Based Development Organizations (CBDO)

7) Lack of profitable operations, as demonstrated by sources acceptable to Loan Committee

8) Loans to restricted membership or discriminatory groups/organizations.

9) Loans to uses with complete access restrictions based on age.

10) Lack of sufficient equity/highly leveraged situations as determined by Loan Committee.

11) Personal or business bankruptcy, or prior business failure without sufficient, documented information to mitigate, as determined by Loan Committee;

12) Poor personal or business credit as evidenced by many derogatory items including public record items, tax liens, judgments, or excessive existing credit as determined by Loan Committee;

13) Undocumented aliens;

14) Felony convictions, dishonorable discharge or “Bad Conduct” discharge from military service (each situation will be independently evaluated);

15) Business active in any unlawful activity.

Exceptions to Loan Policy
If a project does not fall within the guidelines listed above, but is of such special character and will complement the area in which location is proposed, the City Manager or City Council (depending on loan amount) may consider the project for funding.

SECTION 14: PRICING AND TERMS
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9 Considerations of loan product pricing extended to borrowers will be based on a rate equal to the average rate earned by the City’s investment in the California Local Agency Investment Fund (LAIF) or the current prime rate for the fiscal year prior to the issuance of the loan (LAIF’s Annual Returns: https://www.treasurer.ca.gov/pmia- laif/historical/annual.asp), but in no event to exceed 10 per cent (10%) per annum.

Interest which accrues and is unpaid shall be added to principal on a monthly basis and thereafter bear interest as if it were part of principal. Principal and all accrued and unpaid interest shall be due and payable not later than the terms specified in the Note. Additional terms extended to borrowers will be based on the amount of risk involved.

SECTION 15: COLLATERAL

Collateral is a mandatory requirement, real property preferred but not required. Property such as equipment will be considered as collateral. It is intended that any available collateral from the borrower and/or guarantor(s) will be required, as well as a first lien position on any assets purchased with any loan funds. Junior liens on real property will be required at the discretion of the Loan Committee. However, it will be the policy that all collateral required for loan approval will be of material value . Caution will be used whenever taking a junior lien position on collateral where there is a substantial senior lien.

It will be a determination of the Loan Committee whether to waive a collateral position when available.

Titled motor vehicles, when taken as collateral, must show the City as mortgagee/lienholder on the certificate of title, and held in safekeeping by the Finance Director or designee.

In all cases, a UCC-1 and security agreement will be taken against all business assets.

SECTION 16: CESSATION OF BUSINESS

If Participant should cease business at the site, participant shall repay its obligations to City as provided in the Note which shall be executed when Agreement is signed. The term “cease business” shall mean when the site is no longer used as the principal place of business for Participant’s business. Participant shall give City written notice not less than thirty (30) days prior to cessation of business. If Participant should cease business at the site, Participant shall pay to the City, in cash, within f ifteen (15) days of the Participant’s receipt of written notification from the City of the balance due on the Note. If the Participant moves the business to a new location within Eastvale the City may elect to not treat this relocation as a cessation of business.

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10 SECTION 17: GUARANTORS

The City will generally follow the rules of the Small Business Administration as to qualification of guarantors:

A. Active Management with any ownership equity in borrower must guaranty

B. Shareholders/owners of 20% or more equity in borrower must guaranty regardless of active involvement in management

Guarantees may be secured or unsecured as determined by the Loan Committee.

SECTION 18: PROBLEM CREDITS

It will be the stated policy that upon determination of a “problem credit” the City will pursue any and all remedies allowed by Regulation or Law in a professional, aggressive, and consistent manner until resolution is reached.

SECTION 19: ACTION OCCURENCES

The following occurrences will warrant action on the part of the Program Administrator and/or City Council.

A. Delinquent payment – whenever the terms of the Promissory Note are not being met in a timely manner (delinquent by more than 30 days);

B. Violation of Loan Covenants – whenever the terms of the Loan Agreement are not being met in a timely fashion. The severity and immediacy of action is dependent on the type of breach; some covenants are more serious and lead to a default, while others less severe can sometimes be tolerated at the discretion of the Program Administrator.

C. Receipt of bankruptcy notice;
D. Filing of a “Notice of Default” by another lienholder on real property; E. Legal Service, such as Writs of Attachment, Tax Liens, Subpoenas 311

11 for records;

F. Death of debtor or guarantor;

G. Notice of significant legal action against borrower/guarantor;

H. Returned mail from borrower’s address by Post Office;

I. “Skip Trace” inquiry from another creditor.

SECTION 20: COLLECTION ACTION

It is important to be clear and specific about any breach of the Note, Loan Agreement, or any of the above-mentioned occurrences. The circumstances of a particular situation will often dictate the method to use in taking corrective action. Telephone contact with the borrower/guarantor is the most expedient and cost effective; however, some cases demand more formal notification such a s “Demand Letters”, Legal Action, and Foreclosure. Personal site visits and conversations with the borrower are warranted at the discretion of the Program Administrator.

SECTION 21: NON-ACCURAL LOAN STATUS

Credits will be moved to a non -accrual status at the 90 -day delinquency point unless otherwise directed by the City Council. At this point, many of the aforementioned “Action Steps” should have been started; a collection plan, if applicable, should be in process at this point. Rewriting the entire Note in an effort to provide relief to the borrower should be considered after a detailed analysis of the financial condition of the borrower and his/her prospects for timely payments in the future. In any case, the City Manager or the City Council must approve a re -structured Note, depending on the dollar value of the re - structured Note.

SECTION 22: COLLATERAL APPRAISALS

Collateral taken as security for any type of credit should be appraised if it has any significant value. In most cases, real property will be the collateral that is most needed for a third-party appraisal (the City will accept “drive -by” and short -form appraisals). Since the City is not under the scrutiny of Federal and State Banking Regulators, there is more flexibility as to the extent of any appraisal and in which circumstances. It is the stated policy that some form of valuation be used to determine the equity of any collateral taken 312

12 by the City, remembering that the cost and time of obtaining such appraisals may have an adverse affect on the borrower considering the size of the credit involved. The Loan Committee shall use its discretion in all collateral matters, unless otherwise dictated by the City Council.

SECTION 23: FINANCIAL INFORMATION

Current personal financial statements for each business owner and personal and business federal tax returns for the prior three years are required, including all supporting schedules and statements. The City will obtain the written permission of the applicant to verify any and all tax returns with the Internal Revenue Service for accuracy (IRS Form 4506). Month-to-month projections covering any interim period until year -end, plus one full fiscal year is required, including the assumptions that the projections were based upon.

Additional information will be requested at the discretion of the Program Administrator with direction from the Loan Committee and/or City Council.

All borrowers may be required in the Loan Agreement to provide financial information when requested by the Loan Committee and/or City Council:

A. Fiscal Year End balance sheet and income statement.

C. Payroll reports showing employee status.

SECTION 24: FINANCIAL INQUIRIES

The City will not provide responses to inquiries regarding credit status of program participants. The financial information provided by applicants for the City will be kept confidential to the extent permitted by law.

SECTION 25: INSURANCE

All collateral taken as security for any credit must be insured appropriately as determined by the Loan Committee; evidence of that coverage must be provided showing the City as 313

13 “Additional Insured,” “Loss Payee,” or “Mortgagee,” whichever is appropriate for the collateral insured. The lapse of any insurance will create a default on the Loan Agreement, and must be remedied immediately by the borrower. If necessary, the City will obtain appropriate insurance to protect its collateral and debit the premium to the borrower.

Additionally, in the case where real estate collateral is taken, a Policy of Insurance Record Title (PIRT) of short form title policy will be required.

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AGENDA STAFF REPORT

City Council Meeting

CITY COUNCIL BUSINESS

Agenda Item No. 13.3
October
9, 2024
Hamner Place Branding
Prepared By:

Jimmy Chung, Public Works Director/City Engineer
Recommended Action(s)
Staff recommends that the City Council provide feedback, receive and file the presented update.

Summary
Presenta!on to City Council regarding poten!al loca!ons for a branding monument near Hamner Place.

Background
Staff is seeking feedback regarding possible locations of City Branding at Hamner Place.

Environmental
Not applicable
Strategic Plan Action - Priority Level: N/A
| Target #: N/A
| Goal #: N/A
Not applicable
Fiscal Impact
Not applicable
Prior City Council/Commission Action
Not applicable
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
315
Attachment(s)
Not Applicable.
12363 Limonite Avenue | Suite 910 | Eastvale, CA 91752
951.361.0900 |
eastvaleca.gov
316

Eastvale City CouncilOctober 9, 2024

Eastvale City Council
October 9, 2024