Agenda packet — Escondido City Council, June 22, 2022 (part 1 of 2)

CITY of ESCONDIDO

Council Meeting Agenda
WEDNESDAY, JUNE 22, 2022
4:00 PM - Closed Session
5:00 PM - Regular Session
Escondido City Council Chambers, 201 North Broadway, Escondido, CA 92025

WELCOME TO YOUR CITY COUNCIL MEETING
We welcome your interest and involvement in the legislative process of Escondido. This agenda includes information about topics coming before the City Council and the action recommended by City staff.

MAYOR
Paul McNamara

DEPUTY MAYOR
Tina Inscoe (District 2)

COUNCILMEMBERS
Consuelo Martinez (District 1)
Joe Garcia (District 3)
Michael Morasco (Disctrict 4)

CITY MANAGER
Sean McGlynn

CITY ATTORNEY
Michael McGuinness

CITY CLERK
Zack Beck

HOW TO WATCH
The City of Escondido provides three ways to watch a City Council meeting:

In Person On TV Online

201 N. Broadway Cox Cable Channel 19 and U-verse Channel 99 www.escondido.org

1 Wednesday, June 22, 2022

HOW TO PARTICIPATE
The City of Escondido provides two ways to communicate with the City Council during a meeting:

In Person In Writing

Fill out Speaker Slip and Submit to City Clerk https://escondido-ca.municodemeetings.com

ASSISTANCE PROVIDED
If you need special assistance to participate in this meeting, please contact our ADA Coordinator at 760-839-4869.

Notification 48 hours prior to the meeting will enable to city to make reasonable arrangements to ensure accessibility. Listening devices are available for the hearing impaired – please see the City Clerk.

2 Wednesday, June 22, 2022

CLOSED SESSION
4:00 PM

CALL TO ORDER

1. Roll Call: Garcia, Inscoe, Martinez, Morasco, McNamara

ORAL COMMUNICATIONS
In addition to speaking during particular agenda items, the public may address the Council on any item which is not on the agenda provided the item is within the subject matter jurisdiction of the City Council. State law prohibits the Council from discussing or taking action on such items, but the matter may be referred to the City Manager/staff or scheduled on a subsequent agenda. Speakers are limited to only one opportunity to address the Council under Oral Communications.

CLOSED SESSION
I. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (GOVERNMENT CODE section 54956.8)

a. Property: 272 E. Via Rancho Pkwy, Escondido City Negotiator: Sean McGlynn, City Manager, or designee Negotiating Parties: (i) Larry Green, L. Green Investment & Development, LLC (ii) Kimberly Brewer, Unibail-Rodamco-Westfield
Under Negotiation: Price and terms of leases

3 Wednesday, June 22, 2022

II. CONFERENCE WITH LABOR NEGOTIATORS (Government Code section 54957.6)

a. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Police Officers' Association Sworn Personnel Bargaining Unit

b. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Police Officers' Association Non-Sworn Personnel Bargaining Unit

c. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization:

Firefighters Association Safety and Non-safety Bargaining Unit

d. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: ECEA Unit (ACE and SUP)

e. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization:

Maintenance and Operations Bargaining Unit (Teamsters)

ADJOURNMENT

4 Wednesday, June 22, 2022

REGULAR SESSION
5:00 PM Regular Session

MOMENT OF REFLECTION
City Council agendas allow an opportunity for a moment of silence and reflection at the beginn ing of the evening meeting. The City does not participate in the selection of speakers for this portion of the agenda, and does not endorse or sanction any remarks made by individuals during this time. If you wish to be recognized during this portion of the agenda, please notify the City Clerk in advance.

FLAG SALUTE
The City Council conducts the Pledge of Allegiance at the beginning of every City Council meeting.

CALL TO ORDER
Roll Call: Garcia, Inscoe, Martinez, Morasco, McNamara

CLOSED SESSION REPORT

CONSENT CALENDAR
Items on the Consent Calendar are not discussed individually and are approved in a single motion. However, Council members always have the option to have an item considered separately, either on their own request or at the request of staff or a member of the public.

1. AFFIDAVITS OF PUBLICATION, MAILING, AND POSTING (COUNCIL/RRB) -

2. APPROVAL OF WARRANT REGISTER (COUNCIL) -
Request approval for City Council and Housing Successor Agency warrant numbers 363958 – 364184 dated June 8, 2022.

Staff Recommendation: Approval (Finance Department: Christina Holmes) 5 Wednesday, June 22, 2022

3. APPROVAL OF MINUTES: Regular meeting of June 08, 2022

4. AMENDMENT TO PUBLIC SERVICES WITH REDWOOD SENIOR HOMES FOR SENIOR NUTRITION

PROGRAM -
Request the City Council adopt Resolution No. 2022-80 authorizing a First Amendment to the Public Services Agreement with HumanGood SoCal, dba Redwood Senior Homes and Services in the amount of $230,000 for preparation and delivery of Senior Nutrition Program meals to the Park Avenue Community Center.

Staff Recommendation: Approval (Community Services Department: Joanna Axelrod, Deputy City Manager/Director of Community Services)
Presenter: Robert Rhoades
a. Resolution No. 2022-80

5. SAN DIEGO COUNTY CAL-ID GRANT -
Request the City Council adopt Resolution No. 2022-93 authorizing the Police Department to accept a five-year San Diego County Cal-ID Grant from the County of San Diego Remote Access Network (RAN); approve a budget adjustment to spend the funds; and authorize the Mayor to execute grant documents on behalf of the City.

Staff Recommendation: Approval (Police Department: Edward Varso, Chief of Police) Presenter: Edward Varso
a. Resolution No. 2022-93

6. AUTHORIZATION TO PROCESS AN AMENDMENT TO THE GENERAL PLAN LAND USE AND COMMUNITY

FORM CHAPTER RELATED TO SINGLE-ROOM OCCUPANCY (SRO) USES - Request the City Council authorize the processing of an amendment to the General Plan Land Use and Community Form Chapter to address Single-Room Occupancy (SRO) uses in commercial land use designations for consistency with the Hotel Conversion Ordinance adopted in July 2021.

Staff Recommendation: Approval (Development Services Department: Julie Procopio, Interim Director of Community Development)
Presenter: Veronica Morones

6 Wednesday, June 22, 2022

7. ADOPTION OF THE FISCAL YEAR 2022/2023 ROAD MAINTENANCE AND REHABILITATION ACCOUNT

PROJECT LIST AND ANNUAL STREET REHABILITATION AND MAINTENANCE PROGRAM UPDATE - Request the City Council adopt Resolution No. 2022-73, containing the initial Project Location proposed to be completed with Fiscal Year (FY) 22-23 Road Maintenance and Rehabilitation Account (RMRA) funds, and receive a report on the Street Rehabilitation and Maintenance Program.

Staff Recommendation: Approval (Development Services Department, Julie Procopio, Interim Director of Community Development)
Presenter: Matt Souttere
a. Resolution No. 2022-73

8. CONTRACT AMENDMENTS FOR THE CITRACADO PARKWAY EXTENSION PROJECT - Request the City Council adopt Resolution No. 2022-82, authorizing a First Amendment to the Consultant Agreement with TY Lin International in the amount of $982,162.51, and adopt Resolution No. 2022-81 authorizing a Tenth Amendment to the Consultant Agreement with AECOM in the amount of $467,249, for the Citracado Parkway Extension Project (“Project”).

Staff Recommendation: Approval (Development Services Department: Julie Procopio, Interim Director of Community Development)
Presenter: Matt Souttere
a. Resolution No. 2022-81
b. Resolution No. 2022-82

9. $157,660 PUBLIC SERVICES AGREEMENT FOR SENIOR TRANSPORTATION - Request the City Council adopt Resolution 2022-79 authorizing a Public Services Agreement with Full Access & Coordinated Transportation, Inc., dba Facilitating Access to Coordinated Transportation (“FACT”) in the amount of $157,660 for transportation services for seniors to and from the Park Avenue Community Center to participate in the Senior Nutrition Program.

Staff Recommendation: Approval (Community Services Department: Joanna Axelrod, Deputy City Manager / Director of Communications and Community Services) Presenter: Robert Rhoades
a. Resolution 2022-79

7 Wednesday, June 22, 2022

CONSENT RESOLUTIONS AND ORDINANCES (COUNCIL/RRB)
The following Resolutions and Ordinances were heard and acted upon by the City Council/RRB at a previous City Council/Mobilehome Rent Review meeting. (The title of Ordinances listed on the Consent Calendar are deemed to have been read and further reading waived.)

PUBLIC HEARINGS

10. FISCAL YEAR 2022/23 OPERATING BUDGET ADOPTION -
Request the City Council adopt Resolution No. 2022-69 approving the Fiscal Year 2022/23 Annual Operating Budget; and adopt Resolution No. 2022-70 approving the Appropriations Limit (Gann Limit) for Fiscal Year 2022/23.

Staff Recommendation: Approval (Finance Department: Christina Holmes, Director of Finance) Presenter: Christina Holmes
a. Resolution No. 2022-69
b. Resolution No. 2022-70

CURRENT BUSINESS

11. APPROVAL TO COMMENCE JUDICIAL VALIDATION PROCEEDINGS FOR PENSION OBLIGATION BONDS - Request the City Council adopt Resolution No. 2022-89, authorizing judicial validation proceedings relating to the issuance of bonds to refund certain pension obligations of the City, approving the form and authorizing the execution of a trust agreement and bond purchase agreement, and approving additional actions related thereto.

Staff Recommendation: Approval (Finance Department: Christina Holmes) Presenters: Christina Holmes, Sara Oberlies Brown, and Scott Smith a. Resolution No. 2022-89

FUTURE AGENDA

12. FUTURE AGENDA
The purpose of this item is to identify issues presently known to staff or which members of the City Council wish to place on an upcoming City Council agenda. Council comment on these future agenda items is limited by California Government Code Section 54954.2 to clarifying questions, brief announcements, or requests for factual information in connection with an item when it is discussed.

Staff Recommendation: None (City Clerk's Office: Zack Beck) 8 Wednesday, June 22, 2022

COUNCILMEMBERS SUBCOMMITTEE REPORTS AND OTHER REPORTS
CITY MANAGER’S WEEKLY ACTIVITY REPORT
The most current information from the City Manager regarding Economic Development, Capital Improvement Projects, Public Safety, and Community Development. This report is also available on the City’s website, www.escondido.org.

ADJOURNMENT

UPCOMING MEETING SCHEDULE
Wednesday, July 13, 2022 4:00 & 5:00 PM Regular Meeting, Council Chambers Wednesday, July 20, 2022 4:00 & 5:00 PM Regular Meeting, Council Chambers

SUCCESSOR AGENCY
Members of the Escondido City Council also sit as the Successor Agency to the Community Development Commission, Escondido Joint Powers Financing Authority, and the Mobilehome Rent Review Board.

9 Consent Item No. 1 June 22, 2022

A F F I D A V I T S

I T E M

P O S T I N G
10 Item1.
11 Item1.
12 Item1.

STAFF REPORT

June 22, 2022
File Number 0400-40

SUBJECT

APPROVAL OF WARRANT REGISTER (COUNCIL)

DEPARTMENT
Finance

RECOMMENDATION
Request approval for City Council and Housing Successor Agency warrant numbers 363958 – 364184 dated June 8, 2022.

Staff Recommendation: Approval (Finance Department: Christina Holmes)

FISCAL ANALYSIS
The total amount of the warrants for the period of June 2 – June 8, 2022, is $1,960,450.11

BACKGROUND

The Escondido Municipal Code Section 10-49 states that warrants or checks may be issued and paid prior to audit by the City Council, provided the warrants or checks are certified and approved by the Director of Finance as conforming to the curr ent budget. These warrants or checks must then be ratified and approved by the City Council at the next regular Council meeting.

13 Item2.

June 8, 2022 Escondido City Council Minutes Page 1 of 7

CLOSED SESSION
4:00 PM

CALL TO ORDER

1. Roll Call: Garcia, Inscoe, Martinez, Morasco, McNamara

ORAL COMMUNICATION
None.

CLOSED SESSION
I. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (GOVERNMENT CODE section 54956.8)

a. Property: Available density in Northeast Gateway Specific Plan (APNs 240-110-52-00, 225-141-27-00, 225-141-40-00)
City Negotiator: Vince McCaw, Real Property Manager Negotiating Party: Troy Friedeck, Meridian Development Under Negotiation: Price and terms of sale

b. Property: 272 E. Via Rancho Pkwy, Escondido City Negotiator: Sean McGlynn, City Manager, or designee Negotiating Parties: (i) Larry Green, L. Green Investment & Development, LLC (ii) Kimberly Brewer, Unibail-Rodamco-Westfield
Under Negotiation: Price and terms of leases

II. CONFERENCE WITH LEGAL COUNSEL – PENDING LITIGATION (Government Code section 54956(d)(1))
a. Case Name: The Affordable Housing Coalition of San Diego County v. Drager, et. al.

Case No: Sacrament Superior Court Case No. 34-2012-80001158-CU-WM-GDS b. Case Name: Building Industry Association of San Diego County v. City of Escondido Case No: San Diego Superior Court Case No. 37-2021-00008423-CU-MC-NC

14 Item3.

June 8, 2022 Escondido City Council Minutes Page 2 of 7

ADJOURNMENT

Mayor McNamara adjourned the meeting at 4:52 p.m.

______________________________ _______________________________

MAYOR CITY CLERK

15 Item3.

June 8, 2022 Escondido City Council Minutes Page 3 of 7

REGULAR SESSION
5:00 PM Regular Session

MOMENT OF REFLECTION
City Council agendas allow an opportunity for a moment of silence and reflection at the beginning of the evening meeting. The City does not participate in the selection of speakers for this portion of the agenda, and does not endorse or sanction any remarks m ade by individuals during this time. If you wish to be recognized during this portion of the agenda, please notify the City Clerk in advance.

FLAG SALUTE
The City Council conducts the Pledge of Allegiance at the beginning of every City Council meeting.

CALL TO ORDER
Roll Call: Garcia, Inscoe, Martinez, Morasco, McNamara

PROCLAMATIONS
LGBTQ Pride Month, June, 2022

CLOSED SESSION REPORT

ORAL COMMUNICATIONS
Gloria Conejo – Requested the City Council do more to help the LGBTQ Community.

Robroy Fawcett – Expressed concern regarding the sequencing of elections for new Council Districts.

Lorene Hatley – Expressed concern regarding the landscaping on Grand Ave.

CONSENT CALENDAR
Motion: Morasco; Second: Martinez; Approved: 5-0

1. AFFIDAVITS OF PUBLICATION, MAILING, AND POSTING (COUNCIL/RRB) -

2. APPROVAL OF WARRANT REGISTER (COUNCIL) -
Request approval for City Council and Housing Successor Agency warrant numbers:
16 Item3.

June 8, 2022 Escondido City Council Minutes Page 4 of 7

363490 – 363646 dated May 18, 2022
363647 – 363790 dated May 25, 2022
Staff Recommendation: Approval (Finance Department: Christina Holmes)

3. APPROVAL OF MINUTES: Regular meeting of May 25, 2022

4. AMENDMENT TO CONSULTING AGREEMENT FOR EAGLE SCOUT LAKE BRIDGE PROJECT - Request the City Council adopt Resolution No. 2022-60, authorizing an amendment in an amount of $120,000 to the Consulting Agreement with Kleinfelder, Inc. (“Consultant”) for the Eagle Scout Lake Bridge Project (“Project”) in Kit Carson Park. The amendment will provide funding for additional permitting services in support of construction of the Project.

Staff Recommendation: Approval (Utilities Department: Christopher W. McKinney) Presenter: Juan Magdaraog
a. Resolution No. 2022-60

5. ACTIVE TRANSPORTATION PROGRAM GRANT APPLICATION FOR SAFE ROUTES TO SCHOOL (SRTS) PROJECT ON CITRUS AVENUE -
Request the City Council adopt Resolution No. 2022-76 authorizing the Director of Development Services or her designee to apply for up to $3,000,000 in Active Transportation Program (“ATP”) funds from the California Transportation Commission (“CTC”) for a Safe Routes to Schools (“SRTS”) grant to improve student access to Hidden Valley Middle School; and if awarded, to accept the grant funds and complete necessary grant and budget documents.

Staff Recommendation: Approval (Development Services Department: Julie Procopio, Interim Director of Community Development)
Presenter: Julie Procopio
a. Resolution No. 2022-76

CONSENT RESOLUTIONS AND ORDINANCES (COUNCIL/RRB)
The following Resolutions and Ordinances were heard and acted upon by the City Council/R RB at a previous City Council/Mobilehome Rent Review meeting. (The title of Ordinances listed on the Consent Calendar are deemed to have been read and further reading waived.)

PUBLIC HEARINGS
17 Item3.

June 8, 2022 Escondido City Council Minutes Page 5 of 7

6. FISCAL YEAR 2022/23 OPERATING BUDGET ADOPTION -
Request the City Council adopt Resolution No. 2022-69 approving the Fiscal Year 2022/23 Annual Operating Budget; and adopt Resolution No. 2022-70 approving the Appropriations Limit (Gann Limit) for Fiscal Year 2022/23.

Staff Recommendation: Approval (Finance Department: Christina Holmes, Director of Finance) Presenter: Christina Holmes
a. Resolution No. 2022-69
b. Resolution No. 2022-70
Marty Tiedeman – Expressed support for the Queen Califia Magic Circle.

Patricia Spann - Expressed support for the Queen Califia Magic Circle.

Melora Dietz – Expressed support for the Queen Califia Magic Circle.

Lori Pfeiler – Expressed support for more affordable housing.

Ed Wicker – Expressed support for using cannabis as a source of revenue for Escondido.

Gloria Conejo – Expressed support for using cannabis as a source of revenue for Escondido.

Sara Matta – Expressed support for the CCAE
Inki Welch – Requested the Council take a measured approach while addressing the budget deficit.

Douglas Shultz – Expressed concern that the economy may be heading towards a receission.

Esmeralda Cardenas - Expressed support for using cannabis as a source of revenue for Escondido.

Kevin Stevenson - Expressed support for using cannabis as a source of revenue for Escondido.

Linda Wilkinson - Expressed support for the Queen Califia Magic Circle.

Ron Guiles – Expressed support for the Escondido Library.

Barbara Michalec - Expressed support for the Queen Califia Magic Circle.

Greg Tucker – Expressed concern regarding homelessness in Escondido. 18 Item3.

June 8, 2022 Escondido City Council Minutes Page 6 of 7

Leslie Ellsworth - Expressed support for using cannabis as a source of revenue for Escondido.

Polett Schafer - Expressed support for using cannabis as a source of revenue for Escondido.

Danielle Polson - Expressed support for using cannabis as a source of revenue for Escondido.

Mary Ann Smith – Requested the City Council not add new staff positions until the Revenue Measure is resolved.

Joanne Tenney – Expressed support for a one cent Revenue Measure in Escondido.

Chris Nava – Expressed concern regarding the proposed budget cuts.

Motion to allocate $4,170,000 from ARPA funding and $830,000 from the Section 115 Trust to address the budget deficit and have staff bring the budget back on June 22 for final approval:

McNamara; Second: Martinez; Approved: 5-0

7. FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM AND FISCAL YEAR 2022/23 CAPITAL IMPROVEMENT PROGRAM BUDGET STATUS AND ADOPTION OF THE 2023 REGIONAL

TRANSPORTATION IMPROVEMENT PROGRAM -
Request the City Council adopt Resolution No. 2022-78, approving Fiscal Years 2022/23 – 2026/2027 Five-Year Capital Improvement Program and the Fiscal Year 2022/23 Capital Improvement Program Budget; and adopt Resolution No. 2022-77, approving the Regional Transportation Improvement Program for Fiscal Years 2023 through 2027.

Staff Recommendation: Approval (Finance Department: Christina Holmes, Director of Finance) Presenter: Edrilyn D. Cruz
a. Resolution No. 2022-77
b. Resolution No. 2022-78
Motion: Inscoe; Second: Morasco; Approved: 5-0

FUTURE AGENDA

8. FUTURE AGENDA
The purpose of this item is to identify issues presently known to staff or which members of the City Council wish to place on an upcoming City Council agenda. Council comment on these future agenda items is limited by California Government Code Section 54954.2 to clarifying questions, brief announcements, or requests for factual information in connection with an item when it is discussed.
19 Item3.

June 8, 2022 Escondido City Council Minutes Page 7 of 7

Morasco - SDG&E Presentation on Net Zero Carbon Emissions Martinez - Explore a Budget Subcommittee
Staff Recommendation: None (City Clerk's Office: Zack Beck)

COUNCILMEMBERS SUBCOMMITTEE REPORTS AND OTHER REPORTS
Martinez – Attended a San Diego County Water Authority Meeting.

Morasco – Held meetings with representatives from BIA and Supervisor Jim Desmond.

Inscoe – Attended Clean Energy Alliance Meeting. Attended Escondido Chamber of Commerce Rising Star awards ceremony.

McNamara – Attended Escondido Chamber of Commerce Rising Star awards ceremony. Attended Felicita Elementary Career Day.

CITY MANAGER’S WEEKLY ACTIVITY REPORT
The most current information from the City Manager regarding Economic Development, Capital Improvement Projects, Public Safety, and Community Development. This report is also available on the City’s website, www.escondido.org.

ORAL COMMUNICATIONS
None.

ADJOURNMENT

Mayor McNamara adjourned the meeting at 8:15 p.m.

______________________________ _______________________________

MAYOR CITY CLERK

20 Item3.

STAFF REPORT

June 15, 2022
File Number XXXX-XX

SUBJECT

AMENDMENT TO PUBLIC SERVICES WITH REDWOOD SENIOR HOMES FOR SENIOR NUTRITION

PROGRAM

DEPARTMENT
Community Services Department

RECOMMENDATION
Request the City Council adopt Resolution No. 2022-80 authorizing a First Amendment to the Public Services Agreement with HumanGood SoCal, dba Redwood Senior Homes and Services in the amount of $230,000 for preparation and delivery of Senior Nutrition Program meals to the Park Avenue Community Center.

Staff Recommendation: Approval (Community Services: Joanna Axelrod, Deputy City Manager/Director of Community Services)
Presenter: Robert Rhoades, Deputy Director of Community Services

FISCAL ANALYSIS
CDBG funding of $56,110 and a County of San Diego Aging and Independent Services grant in the amount of $156,326 have been awarded for FY 2022-23 which offset contract costs to the General Fund.

PREVIOUS ACTION
On January 26, 2022, the City Council provided direction to City Staff that reaffirmed the priorities of fiscal year 202 0-2024 Community Development Block Grant and Emergency Solutions Grant which includes funding for the Senior Nutrition Program.

On May 12, 2021, the City Council approved Resolution 2021-63, authorizing the City Manager to execute a Public Services Agreement in the amount of $197,737 for the preparation and delivery of the Senior Nutrition Program meals with HumanGood SoCal dba Redwood Senior Homes and Services.

On February 5, 2020, the City Council approved Resolution No. 2020 -15, authorizing the Mayor and City Clerk to accept a grant from the County of San Diego for nutrition and transportation services designated for Escondido seniors, and execute contract documents on behalf of the City.

21 Item4.

BACKGROUND
The City has offered the Senior Nutrition Program for over 40 years. Escondido seniors , who are faced with food scarcity, economic challenges, and now uncertainty due to the global health crisis, find it difficult to make ends meet on a fixed income. The meal services offered through the Senior Nutrition Program present a solution to Escondido seniors to access good nutrition and combat isolation in a positive environment. As a result of this service, the senior community can continue to be an active participant in the City’s economic and civic growth as the health restrictions ease providing more social opportunities.

On May 12, 2021, the City Council approved Resolution 2021-63, authorizing a Public Services Agreement in the amount of $197,737 for the preparation and delivery of the Senior Nutrition Program meals with HumanGood SoCal dba Redwood Senior Homes and Services – the City’s long -time partner and only responsive bidder to the March 2021 RFP. The Senior Nutrition Program Public Services Agreement, which became effective on July 22, 2021, provided for four one -year renewal options should the City wish to extend the contract through June 2026.

In preparing to exercise the first of its four options to extend the agreement, the City was made aware that rising inflation as well as food and fuel costs have resulted in HumanGood SoCal losing money in performing the agreement. Therefore, a reasonable increase in the amount paid per meal and the delivery fee per meal was negotiated and have resulted in increased costs to the City. Pursuant to said negotiations, the service fees as listed in the First Amendment to the Senior Nutrition Program Public Services Agreement, as well as those fees applicable to the remaining three options to extend the contract, shall now be tied to the Consumer Price Index rather than limited by the prior 5% cap.

RESOLUTIONS
A. Resolution No. 2022-80
B. Resolution No. 2022-80 Exhibit “A”

22 Item4.

RESOLUTION NO. 2022-80

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR

TO EXECUTE, ON BEHALF OF THE CITY, A FIRST

AMENDMENT TO THE PUBLIC SERVICES AGREEMENT

WITH HUMANGOOD SOCAL DBA REDWOOD SENIOR

HOMES AND SERVICES

WHEREAS the City of Escondido (“City”) recognizes the need for nutrition services for elderly persons in our community; and
WHEREAS, the City Council approve d a Public Services Agreement (“Agreement”) with HumanGood SoCal, a California non -profit corporation, dba Redwood Senior Homes and Services (“Redwood”), to provide meal services for elderly persons on May 12, 2021; and WHEREAS, Redwood is initiating the first renewal amendment of the original agreement; and WHEREAS, the terms of this contract renewal have been updated to reflect rising inflation, cost of food and fuel, and the necessity to tie future Agreement renewals to the Consumer Price Index rather than a flat 5% annual increase; and
WHEREAS, the Deputy City Manager/Director of Communications and Community Services recommends approval of this Amendment, in an amount not to exceed $ 230,000. Actual numbers may be lower depending on weekly participation levels.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Escondido, California:

1. That the above recitations are true.
23 Item4.

2. That the City Council authorizes the Mayor to execu te, on behalf of the City, a First Amendment to the Public Services Agreement with Redwood, in a substantially similar form to that which is attached and incorporated to this Resolution as Exhibit “A”, and subject to final approval as to form by the City Attorney.
24 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 1 of 7 ends

25 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 2 of 7 ends

26 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 3 of 7 ends

27 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 4 of 7 ends

28 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 5 of 7 ends

29 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 6 of 7 ends

30 Item4.

Resolution No. 2022-80
Exhibit "A"

Page 7 of 7 ends

31 Item4.

STAFF REPORT

June 22, 2022
File Number 0480-70

SUBJECT

SAN DIEGO COUNTY CAL-ID GRANT

DEPARTMENT

Police Department

RECOMMENDATION

Request that City Council adopt Resolution No. 2022-93 authorizing the Police Department to accept a five-year San Diego County Cal -ID Grant from the County of San Diego Remote Access Network (RAN); approve a budget adjustment to spend the funds; and authorize the Mayor to execute grant documents on behalf of the City.

Staff Recommendation: Approval (Department Name: Edward Varso, Chief of Police)

Presenter: Edward Varso, Chief of Police

FISCAL ANALYSIS

Funds will be used to pay salary expenses for a Latent Print Specialist and procurement of goods and services as authorized by the RAN board . Funding for the Latent Print Specialist for each fiscal year is estimated at $110,117. The five-year total grant award is estimated at $550,585. This will have no impact on the General Fund Budget.

PREVIOUS ACTION

On March 1, 2017, City Council approved a five-year County of San Diego Cal -ID Grant. Grant funds covered salary and benefit expenses for one full -time Latent Print Specialist. This is the third renewal of this project.

BACKGROUND

The San Diego County Cal -ID Remote Access Network (RAN) Board currently provides grant funding to cover salary and benefit expenses for a full -time Latent Print Specialist position for the Escondido Police Department. The current grant will be exhausted on June 30, 2022. Funding will be renewed by the Memorandum of Agreement between the County of San Diego and the City.

32 Item5.

The San Diego County Cal -ID Remote Access Network (RAN) Board has authorized the use of Cal -ID revenue to fund a full -time Latent Print Specialist position and authorized goods and services for latent print work in the City of Escondido Police Department’s Crime Laboratory. Funding will cover the cost of salary and benefits for a Latent Print Specialist, plus County of San Diego authorized procurement of goods and services, and will renew annually through June 30, 2027. Grant funds are based on actual salary and benefit expenses. Funding for the Latent Print Specialist for each fiscal year is estimated at $110,117. The five-year total grant award is estimated at $550,585.

RESOLUTIONS
a. Resolution No. 2022-93
b. Resolution No. 2022-93 Exhibit “A” MOA between San Diego County and City of Escondido

ATTACHMENTS
a. Attachment “1” – Budget Adjustment
33 Item5.

RESOLUTION NO. 2022-93

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE CHIEF OF

POLICE OF THE CITY OF ESCONDIDO T O RECEIVE A
$550,585 GRANT FROM THE COUNTY OF SAN DIEGO CAL-

ID PROGRAM AND THE MAYOR OF THE CITY OF

ESCONDIDO TO EXECUTE CONTRACT DOCUMENTS

RELATED TO THE GRANT
WHEREAS, the City of Escondido desires to enter into a contract with the County of San Diego ; and
WHEREAS, the Escondido Police Department has agreed that the FY 2022-2023 is the initial year of contract and will have automatic yearly renewals through June 30, 2027; and WHEREAS, the CAL-ID Grant will be funded by the revenue generated from the California Vehicle Code Section 9250.19 administered by the County of San Dieg o Cal-ID/Remote Access Network (RAN) Board.

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

1. That the above recitations are true.

2. That the City Council authorizes the Mayor to execute the Memorandum of Agreement (MOA) with the County of San Diego, which is attached hereto as Exhibit “A” and incorporated by this reference, including any extensions or amendments thereof and any subsequent contract with the San Diego County in relation thereto.

34 Item5.

MEMORANDUM OF AGREEMENT

BETWEEN THE COUNTY OF SAN DIEGO AND THE CITY OF ESCONDIDO

REGARDING LATENT PRINT SPECIALIST PERSONNEL
I. PURPOSE
This Memorandum of Agreement (Agreement) is entered into by the County of San Diego , a charter county and political subdivision of the State of California (County) and by the City of Escondido, a California charter city and municipal corporation (City) to establish terms and conditions for the reimbursement of costs from the Sheriff Fingerprint ID Trust Fund to the City of Escondido for the purpose of funding: 1) one full-time Latent Print Specialist, and, 2) any goods and services associated with one full-time Latent Print Specialist position. The originating funding source for the Latent Print Specialist and goods and services will be revenue generated from California Vehicle Code 9250.19.

II. BACKGROUND
On May 3, 2021, the San Diego County Cal-ID/Remote Access Network (RAN) Board authorized the use of Cal-ID revenue to fund one full-time Latent Print Specialist from July 1, 2022, to June 30, 2023, with automatic annual renewals for an additional four years through June 30 , 202 7, in the City of Escondido, and for the Sheriff to enter into a Memora ndum of Agreement setting forth the terms and conditions of the funding.

On March 15, 2022, the Board of Supervisors approved the San Diego County Cal -ID/RAN Board's recommendation of May 3, 2021, to fund one full-time Latent Print Specialist in the City of Escondido, and for the Sheriff to enter into a Memorandum of Agreement setting forth the terms and conditions of the funding.

III. OBLIGATIONS
The County of San Diego by and through the San Diego County Sheriff’s Department agrees to:

1. Provide funding from the Sheriff Fingerprint ID Trust Fund to reimburse the actual cost of Salary and Benefits of one full-time Latent Print Specialist, from July 1, 2022, to June 30, 2023, estimated at $110,117 for Fiscal Year 2022-23. The City will provide to the RAN Board known compensation increases annually during the term of the Agreement.

2. Provide funding from the Sheriff Fingerprint ID Trust Fund to reimburse the actual costs of procurement of any goods or services that were authorized by the Sheriff and the RAN Board.

The City of Escondido agrees to the following:

1. The City shall hire one full-time Latent Print Specialist from July 1, 2022, through June 30, 2023. The City shall provide, at its own expense, all necessary training of its personnel.

2. Work performed by the one full-time Latent Print Specialist shall be devoted to enhancing the capacity of the Escondido Police Department to provide automated mobile and fixed location fingerprint identification of individuals who may be involved in driving under the influence of alcohol or drugs in violation of Section 23152 or 23153, or vehicular manslaughter in violation of Section 191.5 of the Penal Code or subdivision (c) of Section 192 of the Penal Code, or any Resolution No. 2022-93
Exhibit "A"

Page 1 of 4 ends

35 Item5.

combination of those and other vehicle -related crimes, and other crimes committed while operating a motor vehicle, in cases where there is a nexus to the City of Escondido.

A Working Committee, consisting of t he Escondido Police Department’s Crime Laboratory Director and the San Diego Sheriff’s Department Cal-ID Program Manager, will be created to monitor the workflow and prescribe the obligations of the personnel under this Agreement.

3. The City shall be responsible for procurement of goods and services in support of the Latent Print Specialist position.

a. The City shall obtain authorization from the Sheriff and the San Diego County Cal - ID/RAN Board prior to the procurement of any goods or services.

b. The City shall follow its own procurement process for the procurement of all goods and services.

c. The City shall procure goods or services only for the amount previously authorized by the Sheriff and the San Diego County Cal-ID/RAN Board. Any increase in procurement costs equal to or over $10,000 shall require re -authorization by the Sheriff and the San Diego County Cal-ID/RAN Board.

d. When procuring goods or services authorized pursuant to this Agreement, t he City agrees to follow the County of San Diego's fiscal year term, which runs from July 1st to June 30th.

e. The City shall procure goods or services authorized pursuant to this Agreement, within the County of San Diego's fiscal year in which the costs of such goods or services were budgeted by the County of San Diego.

f. In the event City is unable to procure goods or services authorized pursuant to thi s Agreement, within the County of San Diego's fiscal year in which the costs of such goods or services were budgeted by the County of San Diego, City shall notify the San Diego County Sheriff's Department Cal -ID Administration , in writing, that such procurement of goods or services cannot be accomplished by the conclusion of that fiscal year.

g. The City shall provide, at its own expense, all necessary training of its personnel needed to operate or utilize the procured goods, and infrastructure needed to inst all or implement such goods.

h. The City shall be responsible for all future maintenance and support costs associated with the procured goods or services.

i. The City shall abide by the requirements of California Vehicle Code Section 9250.19 in procurement of any goods or services.

4. The City will submit a reimbursement request to the San Diego County Sheriff’s Department on a quarterly basis for the actual cost of Salary and Benefits for one full -time Latent Print Specialist. The City will provide to the RAN Bo ard known compensation increases annually during the term of the Agreement.

Resolution No. 2022-93
Exhibit "A"

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36 Item5.

5. The City will submit a reimbursement request to the San Diego County Sheriff's Department for the actual costs of procurement of any goods or services. The reimbursement request must contain a paid itemized invoice with the city name and a Purchase Order associated with the procurement.

IV. EFFECTIVE DATE/TERM
The Effective Date of this Agreement shall be July 1, 2022, to June 30, 2023, with automatic annual renewals for an additional four years through June 30, 2027.

V. TERMINATION
Any party may terminate this Agreement by giving thirty (30) days written notice of termination delivered by certified mail.

VI. NOTICES
All notices, demands, requests, approvals, reports, and statements to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered personally or on the second business day after the deposit thereof in the United States Mail, postage prepaid, registered or certified, addressed as hereinafter provided.

To County of San Diego, Sheriff’s Department, at:

Vladimir Atabekyan, Cal-ID Program Manager
San Diego County Sheriff’s Department
5590 Overland Avenue
San Diego, CA 92123
(858) 285-6139

To City of Escondido at:

Edward Varso, Chief of Police
Escondido Police Department
1163 N. Centre City Pkwy.

Escondido, CA 92026
(760) 839-4721

Should the above address and/or contact person for the party change, that party shall give prompt written notice to the other party of such change.

[SIGNATURE PAGE TO FOLLOW]

Resolution No. 2022-93
Exhibit "A"

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37 Item5.

IN WITNESS THEREOF, the signatory parties hereby approve and agree to the terms of this Agreement on this _______________ day of _____________, 2022.

COUNTY OF SAN DIEGO

By _____________________________________
ANTHONY C. RAY, Sheriff
Sheriff’s Department
County of San Diego

CITY OF ESCONDIDO

By __________________________________
PAUL MCNAMARA, Mayor
City of Escondido

By __________________________________
MICHAEL R. MCGUINNESS, City Attorney
City of Escondido

Resolution No. 2022-93
Exhibit "A"

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FM\105 (Rev.11/06)

C I T Y O F E S C O N D I D O

BUDGET ADJUSTMENT REQUEST
Date of Request: May 25, 2022 For Finance Use Only
Log #
Fiscal Year ear
Department: Police
Division: Administration
Project/Budget Manager: Lisa Rodelo 4905
Name Extension
Council Date (if applicable): June 22, 2022
(attach copy of staff report)
_____ Budget Balances
_____ General Fund Accts
_____ Revenue
_____ Interfund Transfers
_____ Fund Balance
Project/Account Description Account Number Amount of Increase Amount of Decrease Revenue 4127-451-New Project 550,585
Police Grants 451-New Project 550,585
Explanation of Request:

A budget adjustment is requested to spend Cal-ID Remote Access Network grant funds.

APPROVALS

Department Head Date City Manager Date

Finance Date City Clerk Date
Distribution (after approval): Original: Finance
DocuSign Envelope ID: 2277A21B-4837-4A4B-B67B-52D54C11E56B 6/14/2022
6/14/2022
Attachment "1"
39 Item5.

STAFF REPORT

June 22, 2022
File Number 0600-95; A-3378

SUBJECT

AUTHORIZATION TO PROCESS AN AMENDMENT TO THE GENERAL PLAN LAND USE AND COMMUNITY

FORM CHAPTER RELATED TO SINGLE-ROOM OCCUPANCY (SRO) USES

DEPARTMENT
Development Services – Planning Division

RECOMMENDATION
Request the City Council authorize the processing of an amendment to the General Plan Land Use and Community Form Chapter to address Single -Room Occupancy (SRO) uses in commercial land use designations for consistency with the Hotel Conversion Ordinance adopted in July 2021.

Staff Recommendation: Approval (Development Services Department: Julie Procopio, Interim Director of Community Development)
Presenter: Veronica Morones, Senior Planner

FISCAL ANALYSIS
For the purposes of this agenda item, the City Council will only be providing direction to staff on the processing of a General Plan Amendment. Authorization to process the amendment application would have no direct fiscal impacts. The privately -initiated amendment application would be processed using existing staff resources with costs to be paid by the project proponent, applicant(s), and/or the future developer of the project site.

PREVIOUS ACTION
On July 14 , 20 21, the City Council adopted Resolution No. 2021-07, approving a hotel conversion ordinance so that existing hotels and motels in all zoning districts, as well as those located in specific plans, may be converted to supportive housing, transitional housing, single -room occupancy, multi -family housing, or combination thereof . The July 14 , 2021 staff report specifically noted that a proposed conversion of hotels and motels may require a General Plan Amendment and/or rezone to be processed by an applicant to ensure the land use development request complies with applicable, objective General Plan and zoning standards.

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BACKGROUND

REQUESTED ACTION
The Planning Division received a request from Vista International, Inc. to initiate a General Plan Amendment to the City’s General Plan Land Use and Community Form Chapter in order to accommodate the conversion of an existing hotel located at 528 West Washington Avenue to a single-room occupancy use. A letter from Vista International, Inc. summarizing their potential project is attached to this staff report (Attachment “1”). Specifically, the General Plan Amendment would modify text of the General Commercial land use designation to allow for SROs (in conjunction with the proper permitting requirements). The current General Plan language for the General Commercial land use designation does not permit for any residential uses, whereas an SRO is considered a residential use type pursuant to Article 1, Section 33-8 of the City’s Zoning Ordinance.

In addition to the General Plan Amendment, Vista International, Inc. would also submit applications for:
 Zoning Text Amendment requesting modification of text in Article 16 – Commercial Zones to allow SRO uses in the C-G zone when associated with a Hotel Conversion Permit;  Hotel Conversion Permit for the conversion of the existing hotel to a market -rate single-room occupancy use.

It is anticipated that no changes to the building footprint or building envelope would occur for the conversion. It is possible that the project description may change as the entitlement application is processed, however any changes would be reviewed to ensure that they are consistent with the intent of the General Plan.

Authorization by the City Council to initiate the requested General Plan Amend ment would not result in project approval at a future date of decision. City Council authorization of this request would only allow for City staff to accept the application submittal for review and processing, with an ultimate decision by City Council occurring at a future date.

SITE BACKGROUND
The subject site is approximately one acre in size, and has a General Plan land use designation of General Commercial (GC), and a zoning designation of General Commercial (C -G). Existing uses adjacent to the subject site include multifamily residences to the north, Interfaith Community Services to the west, commercial and industrial uses to the south (across Washington Avenue), and a commercial use to the east. While the subject s ite is directly east of Interfaith Community Services, the property owner is not affiliated or partnered with Interfaith Community Services.

In July 1985, City staff approved a plot plan review for a 75-unit motel at the subject site (PL87-1542). The existing building was constructed in 1987 under building permit no. 38487. The subject site originally 41 Item6.

operated as a Best Budget Motel, subsequently as a Super 8 Hotel, and now is under the name of the Hotel Hidden Valley. In April 2022, Vista International, Inc., the current property owner, acquired the site and operations. The current operation of the site functions as 29 -day rentals with an onsite manager during the day and patrolled security at night.

Prior to the Vista International, Inc.’s acquisition of the subject site, the City of Escondido Police Department (EPD) received a high volume of service calls to the site. According to the EPD, the subject site has consistently appeared in the Top 100 calls for service locations since tracking began in January 2022. The subject site’s rankings within the Top 100 calls for service locations are detailed below:
 January – 33rd out of 100
 February – 38th out of 100
 March – 8th out of 100
 April – 25th out of 100
However, since the change of ownership /operation in mid-April 2022 the site has experienced a large reduction in service calls. In the month of May, the subject site was no longer within the Top 100 calls for service locations. As of the writing of this staff report, the subject site has not received a service call in the last 30 days. Additionally, as noted in Attachment 1, the existing SRO developments within the City of El Cajon that are owned and operated by Vista International Inc., have experienced similar reductions in service calls since converting to SRO units from prior hotel uses.

The hotel conversion would include market rate SRO units only, and would not include any deed restricted affordable units. However, SRO unit types are typically small units which result in de facto affordability by design. Based on the preliminary project description, the anticipated project would not result in units that count toward the City’s deed restricted affordable units for the purposes of RHNA. However, it is possible they may count toward non-deed restricted affordable unit, depending on the proposed rental costs. City staff would conduct further analysis during formal project review to determine affordability (i.e., above moderate, moderate, low, very low) of all units for the purposes of counting toward RHNA.

Hotel uses generate transit occupancy tax (TOT) which the City receives as a revenue source. Table 1 below shows the existing hotel use’s generated TOT over the last 5 years, plus the amount to date for the current calendar year. While the conversion of th e existing hotel use to SRO units would no longer generate TOT, the improved operations of the site and change in use are anticipated to continue the reduced number of service calls, reducing EPD related resources to the site. 42 Item6.

Table 1: Transit Occupancy Tax for 528 W. Washington (2017-2022)

Year TOT generated Jan-April Total Annual TOT
2022 $44,455.30 TBD
2021 $39,198.97 $133,873.81
2020 $43,816.93 $144,614.60
2019 $28,413.69 $109,956.64
2018 $28,404.78 $106,698.70
2017 $30,858.92 $112,169.23

ENVIRONMENTAL REVIEW
The action before the City Council is statutorily exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15262, Feasibility and Planning Studies. This agenda item involves the con sideration of processing a General Plan Amendment and land use development application. This general direction does not have a legally binding effect on any possible future discretionary action.

ATTACHMENTS

1. Applicant’s Initiation Request Letter

43 Item6.

June 7, 2022
Ms. Veronica Morones
City of Escondido
201 North Broadway
Escondido, California 92025
Re:

Vista Cove – A Single Room Occupancy Hotel Project
Dear. Ms. Morones,
Vista International, Inc. (applicant) is requesting the City of Escondido (City) process a General Plan Amendment (GPA), Zone Amendment (AZ), and Hotel Conversion Permit (HCP) to allow the existing hotel located at 528 W. Washington Avenue in Escondido (APN: 229-171-34-00) to operate as a market-rate Single Room Occupancy (SRO) residential development in accordance with Section 33-1348 of the Escondido Municipal Code (EMC). The Vista Cove Project (Project) would include interior and exterior site improvements, including, but not limited to, installation of efficiency kitchens in each unit, the expansion of shared laundry facilities, the renovation of an outdoor pool and jacuzzi, and upgrades to common areas such as the building lobby, parking lot, and outdoor landscaping.

The project site is approximately 1.1 acre in size and contains one, three-story structure. The existing hotel contains a total of approximately 33,100 square feet (sf) of gross building area.

There are a total of 84 rooms, which are each approximately 305 sf, a community pool/jacuzzi, on-site laundry facilities, and a total of 74 parking spaces. The northern, eastern, and southern perimeter of the site is landscaped and contains grass, three palm trees, and a few decorative shrubs.

Historically, the Project property has been operated as a standard, affordable-option hotel, with 2021 rates starting at $89 a night, plus tax. Over the years the building has degraded and not been maintained at very high level resulting in low-rating and low occupancy. In 2022, the property was purchased by the applicant. The new owners are bringing their many years of experiences to the Project and are committed to operating the SRO hotel at high standards with a focus on safe, clean, and long-term living.

The purpose of an SRO hotel is to be an effective method to meet the housing needs of low- income individuals and small households. Rates for SRO units are typically lower than standard housing simply because they are the most basic form of housing available. Approving the Vista Cove SRO units would permit the hotel to operate as a property offering market rate, lower cost, and stable long-term living situations (six months or longer). This would allow for a greater variety of housing availability for lower economic segments of the community.

Attachment "1"
44 Item6.

2 By creating a long-term living situation, tenants would invest more into making the community a safer and more appealing place to live when compared to the transient visitors of a hotel. The proposed physical improvements and changes to the management operations will result in an enhancement for guests and have a positive influence on the surrounding community when compared to the existing transient operations. No social, transitional or support services will be offered at the facility. The shift from temporary to permanent living has the potential to reduce calls to public services such as police, fire, and medical services, as well as providing tenants with local public transit opportunities; thereby reducing costs to the city and environment.
a. Owner Background
Vista International Inc. is a privately held real estate investment company which has proven their dedication to high standards and willingness to work with public agencies through the approval of three SRO hotels in the city of El Cajon. As the first applications ever submitted in El Cajon for SRO hotels, Vista International invested ample time and finances to ensure that the project exceeded the expectations of city staff and decision-makers. Similar upgrades and renovations that were proposed as a part of those SRO hotels are also being proposed for the Vista Cove Project. Vista International is also currently pursuing similar projects in the cities of Chula Vista, Oceanside, and Vista, as well as the community of Rancho Bernardo.

All three of the El Cajon SRO hotels have been successfully operating with no violations of their conditions of approval. Further, the conversion of the hotels to SRO hotels resulted in a substantial decrease in calls for police services reducing calls from an average of 9 to 16 per month to approximately 2 per month. Vista International has a proven track record as a residential property company that will oversee the transition of the existing hotel to an SRO hotel with professionalism and effectiveness.
b. Property Management Background
Borba Property Group is a highly regarded and deeply experienced residential property management firm located in Artesia, California. The company was founded in 1986 by real estate professionals Valquirio (Val) and Maria Borba. Over three decades, the company grew from a small start-up to a large apartment property management firm, managing over 2000 residential units throughout southern California. The company remains family-owned and local, run today by the second generation, the brother and sister team Michael Borba and Sonya Borba. The Borba Property Group currently manages Vista International SRO hotels in the City of El Cajon and is contracted to manage the SRO hotel in Oceanside, as well as the future project in Vista.
c. Operations and Maintenance Plan
The proposed Project will implement operational procedures to be consistent with long-term living. A draft Operations and Management Plan will be submitted as part of the project Attachment "1"
45 Item6.

3 application materials for staff and city decisionmakers to review. The information below offers select details as to the management practices of Vista International Inc. SRO hotel properties.

Tenant Screening. The tenant screening process is to be implemented in accordance with the Federal Fair Housing Act and State and local fair housing and civil rights laws. All applications will be submitted to CoreLogic Safe Rent, a third-party rental applicant screening company where all applications are evaluated based on a rental scoring system. The scoring system is based on real data and statistical data such as payment history, quantity and type of accounts, outstanding debt, and age of accounts. Every applicant is treated objectively because each application is scored statistically in the same manner.

Rates and Housing Assistance. Units at Vista Cove will be offered to the public at market rate determined based on comparable rates in the general region. Additionally, the Project owner intends to participate in housing programs such as the Section 8 (Housing Choice Voucher) Program and the Veterans Affairs Supportive Housing (VASH) program, which provides rental assistance to veterans and offer ongoing VA case management and supportive services.

On-Site Management. It is the intent of the Project owner to provide on-site management at this SRO Hotel. The primary responsibility of the manager is to utilize training, motivation, and example to ensure that the highest level of service is afforded to each guest. The manager manages the day-to-day operations of the property by overseeing the safety programs, marketing plans, property maintenance and security. The manager is responsible for representing the property’s service commitment to guests. They handle all move in/ move out procedures, guest processing, telephone calls, and maintains ongoing communication with the maintenance staff.

Security Patrol: Regular Patrol Service will be provided by a contracted vendor that will provide 4 patrol visits conducted by 1 guard between the hours of 8 pm and 6 am the next day. Patrol is defined as walking the property, ensuring that all doors and pool areas are secured and responding to occupant telephone calls and other emergencies during patrol hours. An activity report is delivered immediately after each service.

Security Cameras: There are cameras installed throughout the property in common areas and on the exterior of the building. The monitor is installed in the leasing office area to enable staff members to always view the recording. Video footage is saved for 2 weeks, at which point it is then recorded over.

Locks: All units will be equipped with both deadbolt and security latch to provide a safe and secure environment for guests; however, none of the doors have the capability to automatically close itself. In the case a tenant becomes locked out, the tenant will need to notify the manager and pay a lock fee $10.00 to replace lost key.

Visitors: Tenants are responsible for informing visitors of the property’s rules and policies. They may have overnight guests for no more than 7 nights in any month, and no more than two overnight guests at a time, unless they receive approval from the management beforehand.

Attachment "1"
46 Item6.

4 Management does not require guests to sign a visitor log and asks tenants to abide by the honor system of reporting. All tenants must obtain approval from the management prior to adding or removing an occupant to/from the contract.

Smoking: Smoking in units is prohibited. Tenants are responsible to inform visitors of property policies. Due to damages and cleanup caused by smoking in the unit, the guest will be required to forfeit the security deposit.
d. Substantiation of Request
In August 2021, the Escondido City Council found that the rising housing costs and lack of affordable housing options have led to a rise in homelessness in the region, including within the City of Escondido. People experiencing homelessness are more likely to successfully transition to permanent housing when provided with easily accessible support services such as health, substance abuse, education, job training, and case management, in addition to affordable housing. City Council found that the conversion of existing hotels and motels to affordable housing requires substantially less time and cost than new development of affordable housing.

The conversion of existing hotels and motels to affordable housing allows for the creation of new housing through adaptive reuse of existing buildings, thereby substantially maintaining the existing scale and character of established neighborhoods. It was determined that hotels and motels present a unique opportunity to utilize existing structures to respond to immediate housing needs. These buildings are structurally similar to residential buildings and have the potential to be quickly adapted to provide housing though publicly funded programs. Today, individual rooms in hotels and motels are often already used as a form of transient guest housing accommodation, and there is increasing interest in converting entire properties to transitional housing and/or supportive housing.

In response, City Council adopted Ordinance 2021-07, providing a track for applicants to convert existing hotels and motels to housing or other underlying zone-permissible land uses.

The Escondido Municipal Code (EMC) was subsequently revised to include the following definition: “Single Room Occupancy (SRO) Unit means a living or efficiency unit, as defined by California Health and Safety Code section 17958.1, intended, or designed to be used as a primary residence for a period of more than 30 consecutive days. Each SRO unit consists of one combined living and sleeping room with a closet and may contain either a kitchen or separate private bathroom. The kitchen or bathroom, if not contained within the individual unit, shall be provided as a common facility within the same structure and shall be shared with the tenants of other SRO units within the same structure. An SRO may include an office for the purpose of managing the SRO units and common facilities. An SRO may include one self-contained dwelling unit with kitchen and bathroom facilities for a caretaker.” (EMC Section 33-8: Definitions) Further, the City of Escondido’s Housing Element identifies SRO’s as “…small studio-type units intended for one or two persons.” SROs can provide an affordable housing option for small Attachment "1"
47 Item6.

5 households with very low or extremely low incomes. In the City of Escondido SROs are referred to as Single Room Occupancy Residential Hotels.

The intent of the City of Escondido is clearly to allow for the conversion of existing hotels and motels to housing, including SRO hotels. Pursuant to EMC 33-1348, to qualify for a hotel or motel conversion to housing, which may include SRO units, the proposed development would have to comply with applicable, objective General Plan, Zoning, and subdivision standards. It is the responsibility of the applicant to ensure that any construction, alteration, or conversion of property for hotel or motel use conforms to the General Plan and other planning and zoning laws. The proposed project site is classified as General Commercial on the land use and zoning maps. The General Commercial land use and zoning designation does not currently allow for residential uses, including SRO hotels. Therefore, General Plan and Zoning amendments are required of the project to move forward.

Furthermore, an assessment of 12 Escondido hotels and motels concluded that the land use designation and underlying zoning of nine facilities is General Commercial, with two in specific plan areas, and one in a planned commercial development area. Again, General Commercial zones do not currently allow for residential uses, including SRO hotels. The South Centre City Specific Plan allows for hotel conversions to multi-family residential only in the EB Mixed-Use Overlay and the Downtown Specific Plan only allows for apartments/flats, condominiums, row homes, townhomes, duplexes (two units attached) with residential portion on the ground floor (i.e., not SRO hotel units). It appears that no hotel conversions pursued under EMC 33-1348 would be permitted to convert to housing without a General Plan Amendment and Zoning Amendment, and possibly a Specific Plan Amendment. This is counterintuitive to the rationale behind the intent of Ordinance 2021-07.

Therefore, the project applicant would like to pursue text changes to the General Plan Land Use Definition and Municipal Code to include SRO Hotels as a compatible and allowable use within General Commercial land use and zoning designations, when associated with a Hotel Conversion Permit.

We appreciate the opportunity to present this request for authorization proceed with the application process.

Sincerely,

Sally Schifman
Project Manager
Attachment "1"
48 Item6.

STAFF REPORT

June 22, 2022
File Number: 0600-95; A-3378

SUBJECT
ADOPTION OF THE FISCAL YEAR 2022/2023 ROAD MAINTENANCE AND REHABILITATION ACCOUNT

PROJECT LIST AND ANNUAL STREET REHABILITATION AND MAINTENANCE PROGRAM UPDATE

DEPARTMENT
Development Services, Engineering Division

RECOMMENDATION
Request the City Council adopt Resolution No. 2022-73, containing the initial Project Location proposed to be completed with Fiscal Year (FY) 22-23 Road Maintenance and Rehabilitation Account (RMRA) funds, and receive a report on the Street Rehabilitation and Maintenance Program.

Staff Recommendation: Approval (Development Services, Julie Procopio, Interim Director of Community Development)

Presenter: Matt Souttere, Associate Engineer

FISCAL ANALYSIS
The 5 -year CIP programs a variety of funding sources toward an annual Street Rehabilitation and Maintenance Project, including Gas Tax, TransNet, RMRA, and CalRecycle Grant funds.

There is no fiscal impact associated with approval of the RMRA initial project list. The City of Escondido (“City”) is required to submit a City Council-approved initial project list before moving forward with project design in order to receive RMRA funding for use on approved projects.

PREVIOUS ACTION
On September 15, 2021, the City Council adopted Resolution No. 2021 -131, awarding the 2021 Street Maintenance and Rehabilitation project to Eagle Paving Company, Inc., the lowest responsive and responsible bidder, in the amount of $5,582,894.

On February 2, 2022, the City Council adopted Resolution 2022-22 to authorize a change order to the 2021 Street Rehabilitation and Maintenance Project – Phase 2 (“Project”) in the amount of $3 20,141 to complete additional roadway repairs on Country Club Drive, and urgent pavement repairs requested by the Utilities Department on Sunset Drive.
49 Item7.

On April 6, 2022, the City Council adopted Resolution No. 2022-45 to authorize a change order to the 2021 Street Rehabilitation and Maintenance Project – Phase 2 (“Project”) in the amount of $246,333 to complete additional roadway maintenance on Rincon Avenue east of its intersection with Broadway, and striping updates on North Broadway, north of Rincon Avenue.

BACKGROUND
On April 28, 2017, the Governor signed Senate Bill (SB) 1, known as the Road Repair and Accountability Act of 2017. Prior to July 1st of each year, the City is required to provide the California Transportation Commission (“CTC”) a project, or list of projects, project locations, and the type of work proposed for the future year RMRA funding. FY 2 2/23 RMRA funding is proposed to be used for the 202 3 Street Rehabilitation and Maintenance project that will focus in the East -South Maintenance Zone bounded by Ash Street on the west, Valley Parkway on the north, and City limits to the east and south.

The initial projects list is intended to promote transparency on use of RMRA funds. The initial list is published on the State’s website as a mea ns to share with the public the type of projects that RMRA funding is being used to support. As a part of the design process for the project, each street within the zone of focus will be evaluated and the streets in highest need for rehabilitation and maintenance will be identified based on funding available. The final list of streets to be resurfaced will be included in the 2023 Street Maintenance and Rehabilitation project anticipated to be awarded by the City Council during the third (3) quarter of FY 22/23 for completion over the Summer of 2023.

STREET MAINTENANCE PROGRAM UPDATE
Completed Project: The 2021 Street Rehabilitation and Maintenance Project is complete. The project resurfaced 50 lane-miles of roadway, replaced or installed 3.5 miles of bike lanes, updated striping and signage on five streets, and replaced 0.86 miles of sidewalks. The zone of focus for residential streets was Maintenance Zone NW, and includes the area west of North Broadway and north of State Route 78 .

Substantial work was also completed on several higher volume streets, including; Borden Road, Centre City Parkway, Conway Drive, Country Club Lane, El Norte Parkway, Lincoln Avenue, Nutmeg Street, Rincon Avenue, Rock Springs Road, and West Valley Parkway.

Current Project: The first phase of the 2022 Street Rehabilitation and Maintenance Project is scheduled to be advertised for bid in July 2022, with the second phase to follow in the Fall of 2022. The zone of focus for the 2022 Project will be Maintenance Zone EN, which includes the area bound by Lincoln Avenue on the north, Valley Parkway on the south, Ash street on the west, and City Limits on the east.

Program Accomplishments: Since inception of the program, a substantial increase in the overall pavement condition of the City has been achieved. At the March 13, 2013 Pavement Management Workshop, the City Council directed staff to set a pavement management budget at a level predicted by pavement modelling software that would maintain the average citywide Pavement Condition Index of 55. Through 50 Item7.

use of cost -effective and innovative resurfacing technologies, including rubberized pavement strategies that were supported with grant funds in excess of $1-million, the network performance has exceeded the model projections. Rather than maintaining the same pavement condition, the citywide average Pavement Condition Index has increased from 55 to 66 since the first project under the new program was completed in 2014.

Program accomplishments include the following:
 498 -lanes miles of street rehabilitation
 4.25 -miles of sidewalk repair
 43.63 -miles of added or improved bike lanes

RESOLUTIONS
A. Resolution No. 2022-73
B. Resolution No. 2022-73 Exhibit “A” FY 22/23 Road Maintenance Rehabilitation Account (“RMRA”) Initial Project List.

51 Item7.

RESOLUTION NO. 2022-73

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, ADOPTING THE FISCAL YEAR
2022-23 ROAD MAINTENANCE AND REHABILITATION

ACCOUNT INITIAL PROJECT LIST

WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017), was passed by the Legislature and s igned into law by the Governor in April 2017 in order to address the significant multi-modal transportation funding shortfalls statewide; and WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the City of Escondido (City) are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and
WHEREAS, the City must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1 , which must include a description and the location of each proposed project, a proposed schedule fo r the project’s completion, and the estimated useful life of the improvement; and WHEREAS, the City will receive an estimated $3,779,782 in RMRA funding in Fiscal Year 2022-23 from SB 1; and
WHEREAS, this is the sixth year in which the City is receiving SB 1 funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging street improvements, providing bike lane facilities, and increasing access and mobilit y options for the traveling public that would not have otherwise been possible without SB 1; and WHEREAS, the City has undergone a robust process to review and prioritize the streets in the Maintenance Zone, and to use submitted input from the community to ensure the community’s transportation priorities are being addressed; and
52 Item7.

WHEREAS, the City used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used to treat the highest-priority streets using a cost-effective Maintenance Zone approach for residential street rehabilitation and maintenance projects that meet the City’s priorities for transportation investment; and
WHEREAS, the funding from SB 1 will help the City complete annual street rehabilitation and maintenance of multiple streets throughout the Maintenance Zone this year and complete similar projects into the future; and
WHEREAS, the 2021 California Statewide Local Streets and Roads Needs Asses sment found that the City’s streets are estimated to be in “higher risk” condition and this revenue will help it increase the overall Pavement Condition Index (PCI) of the City road system, and over the next decade will bring City streets and roads into a “good” condition; and
WHEREAS, the Road Maintenance and Rehabilitation Account Project List, and overall investment in local streets and roads infrastructure with a focus on safety, accessibility, bike facilities, maintenance, and upgraded signal facilities, and by investing in City street infrastructure, and using available technology, materials and practices, will have significant and positive co-benefits citywide.

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

1. That the above recitations are true.

2. That the City Council approves the Fiscal Year 2022-23 RMRA proposed list of projects to be completed with Road Maintenance and Rehabilitation Account revenues. The list of proposed projects is shown in Exhibit “A”, which is attached to this Resolution and incorporated by this reference.

53 Item7.

Resolution 2022-73
Exhibit “A”

Page 1 of 1 ends

Road Maintenance and Rehabilitation Account
FY 22/23 Initial Project List

FY 2022/23 Street Rehabilitation and Maintenance Project:

The City has elected to use Road Maintenance and Rehabilitation Account (RMRA) funding on this project. This annual project rehabilitates street and sidewalk areas in a maintenance zone within the City. A majority of this project will take place in the East-South (ES) Maintenance Zone of the City. As part of this project, RMRA funds will be used to resurface, or remove and replace, pavement in poor condition within the ES Maintenance Zone bounded by Ash Street on the west, Valley Parkway on the north, and City limits to the east and south.

Street segments within this maintenance zone are prioritized based on pavement condition, volume of daily traffic, or isolated elements in need of repair.

The City anticipates completing this project during the second half of Fiscal Year 22/23.

Work completed as part of this project has an Estimated Useful Life between 7 and 15 years for the various treatments, with the potential to exceed that timeline with proper maintenance. 54 Item7.

STAFF REPORT

June 22, 2022
File Number: 0600-10

SUBJECT

CONTRACT AMENDMENTS FOR THE CITRACADO PARKWAY EXTENSION PROJECT

DEPARTMENT
Engineering Services

RECOMMENDATION
Request the City Council adopt Resolution No. 2022-82, authorizing a First Amendment to the Consultant Agreement with TY Lin International in the amount of $982,162.51, and adopt Resolution No. 2022-81 authorizing a Tenth Amendment to the Consultant Agreement with AECOM in the amount of $467,249, for the Citracado Parkway Extension Project (“Project”).

Staff Recommendation: Approval (Development Services, Julie Procopio)

Presenter: Matt Souttere

FISCAL ANALYSIS
Funds in the amount of $29.7 million remain in the Project budget, including a $12.5 million Local Partnership Program grant, a competitive grant selected by Caltrans. The Capital Improvement Program (“CIP”) budget includes programming toward the project of $2.3 million in Traffic Impact Fees in Fiscal Year 22/23. There are adequate funds in the Project budget to cover the proposed consultant contract amendments.

PREVIOUS ACTION

On August 1, 2012, the City Council approved a Consulting Agreement with AECOM in the amount of $2,135,356 for design of the Project. On February 12, 2014, the City Council approved an amendment to the Consultant Agreement in the amount of $634,448 for add itional design services necessary to implement value engineering, including a narrower roadway and shorter bridge, reducing the estimated construction cost by $4 million. On May 6, 2015, the City Council approved an amendment in the amount of $42,702.25 for updated biological the surveys required for resource agency permitting.

Project progress was delayed for five years while seeking grant funding for construction. Grant funding was secured and on June 19, 2019, and at that time the City Council approved an amendment to the Consultant Agreement with AECOM in the amount of $357,325 to update project plans to current standards.
55 Item8.

On February 10, 2021, the City Council approved Amendment Nine to AECOM’s agreement in the amount of $118,371.25 to update the plans to address constructability review comments, and to address utility and permitting agency requirements.

Since origination of AECOM’s contract, five (5) contract amendments totaling $203,195 have been approved by staff to add la nd surveying services, update wetland delineation, prepare Environmental Impact Report addenda for value engineering and SDG&E relocation, and for additional utility coordination activities.

On February 5, 2020, the City Council approved a consulting agreement in the amount of $1,596,544 with TY Lin International to provide construction management and material testing services for the Citracado Extension Project.

BACKGROUND
An Amendment to the professional services agreement with AECOM is requ ested to provide services during the construction period, including responding to design related questions, preparing any necessary design revisions, providing environmental support for responses to permitting agencies, and applying for environmental permit extensions.

An Amendment to the consultant services contract with TY Lin is req uested to add environmental monitoring and reporting, and to increase hours of service and adjust for inflation over the extended construction period. The construction period was exte nded during bidding to respond to bidder’s requests which led to bid prices 14% below the Engineer’s Estimated and a savings of over $6-million.

Project Status:

SDG&E’s relocation of distribution and transmission electrical facilities to accommodate the Citracado Parkway Extension Project is in process. At the May 11, 2022 meeting, the City Council awarded a contract to the lowest responsible bidder, Flatiron West, Inc., in the amount of $23,787,000 and construction is expected to begin in August 2022 and be completed by Summer 2024

RESOLUTIONS
A. Resolution No. 2022-81
B. Resolution No. 2022-81 –Exhibit “A” 10th Amendment to Consulting Agreement with AECOM C. Resolution No. 2022-82
D. Resolution No. 2022 -82 –Exhibit “A” 1 st Amendment to Consulting Agreement with TY Lin International

56 Item8.

RESOLUTION NO. 2022-82

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, A UTHORIZING THE MAYOR TO

EXECUTE, ON BEHALF OF THE CITY, THE FIRST AMENDMENT

TO THE CONSULTING AGREEMENT WITH TY LIN

INTERNATIONAL FOR THE CITRACADO EXTENSION PROJECT

WHEREAS, the City Council has allocated fund ing in the adopted Capital Improvement Program Budget for the Citracado Extension Project (“Project”); and WHEREAS, additional construction management services are requested of TY Lin International to support the construction of the Project in the amount of $982,162.51.

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

1. That the above recitations are true.

2. That the Mayor is authorized to execute a First Amendment to the Consulting Agreement with TY Lin International, which is attached and incorporated to this Resolution as Exhibit “A”, and subject to final approval as to form by the City Attorney.

3. That the City Manager is authorized to approve additional amendments to this contract up to $200,000.

57 Item8.

First Amendment - 1 - CAO: 9/17/2021
To Consulting Agreement

CITY OF ESCONDIDO

FIRST AMENDMENT TO CONSULTING AGREEMENT
This First Amendment to Consulting Agreement (“First Amendment”) is made and entered into as of this _____ day of ________________, 2022 (“Effective Date”),

Between: CITY OF ESCONDIDO
a California municipal corporation
201 N. Broadway
Escondido, CA 92025
Attn: Julie Procopio
760-839-4001
("CITY")

And: T.Y. Lin International
a California corporation
404 Camino del Rio South, Suite 700
San Diego, CA 92108
Attn: Joseph Smith
619-692-1920
("CONSULTANT").
(The CITY and CONSULTANT each may be referred to herein as a “Party” and collectively as the “Parties.”)
WHEREAS, the Parties entered into that certain Consulting Agreement dated February 9, 2020 (“Agreement”), wherein CITY retained CONSULTANT to provide services for construction management for the Citracado Parkway Extension Project, as more specifically described in the Agreement; and
WHEREAS, the Parties desire to amend the Agreement to include additional services as described in “Attachment A” to this First Amendment, which is attached hereto and incorporated herein by this reference.

NOW, THEREFORE, in consideration of the mutual covenants, promises, terms, and conditions set forth herein, and the mutual benefits derived therefrom, the Parties hereby agree as follows:

1. The CON SULTANT shall furnish all of the Services described in “Attachment A ” to this First Amendment.

2. Section 2 (Compensation) of the Agreement shall be deleted in its entirety and replaced with the following:
58 Item8.

First Amendment - 2 - CAO: 9/17/2021
To Consulting Agreement

2 a. Compensation. The CITY will pay the CONSULTANT in accordance with the conditions specified in “Attachment A,” not to exceed $1,596,544. Any breach of this Agreement will relieve the CITY from the obligation to pay CONSULTANT, if CONSULTANT has not corrected the breach after the CITY provides notice and a reasonable time to correct it.

3. The CITY will compensate CON SULTANT in an additional amount not to exceed the sum of $982,162.51, pursuant to the conditions contained in “Attachment A” to this First Amendment.

4. All other terms of the Agreement not referenced in this First Amendment shall remain unchanged and in full force and effect. In the event of a conflict between a provision of the Agreement and this First Amendment, this First Amendment shall prevail.

5. This First Amendment and the Agreement, together with any attachments or other documents described or incorporated therein, if any, constitute the entire agreement and understanding of the Parties, and there are no other terms or conditions, written or oral, controlling this matter.

6. This First Amendment may be executed on separate counterparts that, upon completion, may be assembled into and shall be construed as one document. Delivery of an executed signature page of this First Amendment by electronic means, including an attachment to an email , shall be effective as delivery of an executed original.

7. Unless a different date is provided in this First Amendment, the effective date of this First Amendment shall be the latest date of execution set forth by the names of the signatories below.

IN WITNESS WHEREOF, this First Amendment is executed by the Parties or their duly authorized representatives as of the Effective Date:

CITY OF ESCONDIDO

Date: __________________ ____________________________________ Paul McNamara, Mayor

T.Y. Lin International

Date: __________________ ___________________________________ Signature

___________________________________
Name & Title (please print)
APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY
MICHAEL R. MCGUINNESS, CITY ATTORNEY

BY: __________________________

THE CITY OF ESCONDIDO DOES NOT DISCRIMINATE AGAINST QUALIFIED PERSONS WITH DISABILITIES. 59 Item8.

ATTACHMENT “A”
Scope of Work

Page 1 of 1 ends

A. General

T. Y. LIN INTERNATIONAL , a California corporation (“Consultant”) will provide the City of Escondido, a California municipal corporation (“City”) with consulting services related to the City’s Citracado Parkway Extension project (“Project”).

B. Location

Consultant shall provide services at various locations in relation to the Project, including certain services located at the Project site as identified in Exhibit 1 to this Scope of Work, which is attached hereto and incorporated by this reference.

C. Services

Consultant shall provide services as described in Exhibit 2 to this Scope of Work, which is attached hereto and incorporated by this reference. In the event of a conflict between Exhibit 2 and this First Amendment (including this Scope of Work), the terms of this First Amendment shall prevail.

D. Scheduling

Inquires relating to this First Amendment, including scheduling and coordination with City staff, shall be directed to Matt Souttere at 760-214-4718 or [email protected]. Further instructions will be provided upon scheduling.

E. Contract Price and Payment Terms

The contract price of this First Amendment shall not exceed $982,162.51. The contract price of this First Amendment shall bring the cumulative contract price of the Agreement to $2,578,706.51. The contract price includes all labor, materials, equipment, and transportation required to perform the work. Services will be billed as services are performed. Payment will be made after services have been performed and within 30 days of receipt of an invoice for those services. Consultant shall not bill the City for any transportation costs associated with travel to and from the project site.

The service rates described in Exhibit 3 to this Scope of Work, which is attached hereto and incorporated by this reference, shall remain in effect throughout the term of this First Amendment.

F. Term

The term of this Tenth Amendment shall be from the Effective Date of this Tenth Amendment through the date of Notice of Completion for the Project which shall be filed by the City with the County of SD.

60 Item8.

EXHIBIT 1

61 Item8.

Page 1 of 2 ends

EXHIBIT 2

T.Y. Lin International

Construction Management, Inspection, and Material Testing of Project Work

A. General.

Consultant shall provide additional Construction Management (CM) services to provide pre‐construction coordination, environmental services, early property owner coordination and public outreach , utility company coordination and management of all aspects of construction for the Citracado Parkway Extension project. In addition, the CM will manage sub‐consultants who will provide quality assurance, special inspection and testing services in accordance with the City’s Quality Assurance Plan.

B. Additional Services.

Consultant shall provide property owner and homeowner’s association coordination, including coordination with effected property owners in advance of construction of the sound wall, and continued coordination during construction per the original Agreement, and for an extended period of time pursuant to the First Amendment and the modified wage rates reflected in Exhibit 3 to the First Amendment the Scope of Work.

1. Consultant shall provide coordination and inspection for Rincon Water District facilities shown to be relocated or installed on the plans, including receiving Rincon’s concurrence on invoicing by the contractor and coordinating water shut downs and other necessary project management functions per the original Agreement, and for an extended period of time pursuant to the First Amendment and the modified wage rates reflected in Exhibit 3 to the First Amendment Scope of Work.

2. Consultant shall provide management of all aspects of construction, including inspection services for compliance with the contract, responding to requests for information, reviewing submittals, reviewing compliance and feasibility of schedules, reviewing invoices, change order requests for additional time and/or compensation and making recommendations for change orders per the original Agreement, and for an extended period of time pursuant to the First Amendment to cover project set up, longer construction duration, and project closeout at the wage rates reflected in Exhibit 3 to the First Amendment the Scope of Work.

3. Consultant shall provide quality assurance, special inspection and testing services in accordance with the City’s Quality Assurance Plan, contract documents and including management of subconsultants and coordination with contractor per the original Agreement, and for an extended period of time pursuant to the First Amendment and the modified wage rates reflected in Exhibit 3 to the First Amendment Scope of Work.

4. Consultant shall perform required environmental surveys, monitoring and reporting through the SMARTS system, including GIS documentation, and coordination of work with previous biologist to ensure full compliance with project environmental permits.

5. Consultant shall perform public outreach prior to and during construction with affected mobile-home parks. Work shall include notifications to residents about the project, and monthly updates.
62 Item8.

Page 2 of 2 ends

C. Rates.

The City will pay Consultant for their additional Services on a time and material basis, in an amount not to exceed $982,162.51, in accordance with the attached proposal.

D. Payment.

Consultant will invoice City on a monthly basis for work completed. Invoices will be paid within 30 days of receipt. Included with each payment request shall be an itemized list of staff that worked on the project, the task or tasks performed, their rate, and the amount of time spent working on the project. Payment requests shall be submitted in a city approved format, and shall include receipts for incidentals being invoiced for. Payment requests shall be submitted within fifteen days of the monthly billing period being invoiced for. 63 Item8.

Citracado Parkway - CM Services (Proj# 701405.20 / 3010.0012799.xxx) 5/24/2022 2019 Initial Fee
2022 Total Fee
update
Supplemental work:

All parties
Additional Helix
services (estimate)
Helix 2022
Survey
TYLI
Anticipated
work
Thru 4/22/22 for SDG&E 6 LBV surveys 40 hrs
TY Lin - Anticipated work 7,664.40$
Helix - Anticipated work 20,000.00$ 5,000.00 $ Supplemental Svcs.: TYLI 51,233.15$
Supplemental Svcs.: Helix 47,731.90$
Supplemental Svcs.: Kleinfelder 1,716.60$
Subtotal 100,681.65$ 20,000.00 $ 5,000.00 $ 7,664.40 $ Markup (3% for Subs) 1,483.46$ 600.00 $ 150.00 $ Total: 1,596,544.00$ 846,583.00 $ 2,443,127.00$ 102,165.11 $ 20,600.00 $ 5,150.00 $ 7,664.40 $ 982,162.51$ fee increase for
updated rates and
schedule duration
Total additional
fee
64 Item8.

RESOLUTION NO. 2022-81

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, A UTHORIZING THE MAYOR TO

EXECUTE, ON BEHALF OF THE CITY, A TENTH AMENDMENT

TO THE CONSULTING AGREEMENT WITH AECOM FOR THE

CITRACADO EXTENSION PROJECT

WHEREAS, the City Council has allocated fund ing in the adopted Capital Improvement Program Budget for the Citracado Extension Project (“Project”); and WHEREAS, additional design services are requested of AECOM to support the construction of the Project in the amount of $467,249.

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

1. That the above recitations are true.

2. That Mayor is authorized to execute a Tenth Amendment to the Consulting Agreement with AECOM, which is attached hereto as Exhibit “A” and incorporated by this reference, and subject to final approval as to form by the City Attorney.

3. That the City Manager is authorized to approve additional amendments to this contract up to $200,000.

65 Item8.

Resolution No. 2022-81
Exhibit "A"

Page 1 of 11 ends

Tenth Amendment
To Consulting Agreement
- 1 - CAO: 9/17/2021

CITY OF ESCONDIDO

TENTH AMENDMENT TO CONSULTING AGREEMENT

This Tenth Amendment to Consulting Agreement (“Tenth Amendment”) is made and entered into as of this day of , 2022 (“Effective Date”),

Between: CITY OF ESCONDIDO
a California municipal corporation
201 N. Broadway
Escondido, CA 92025
Attn: Julie Procopio
760-839-4001
("CITY")

And: AECOM Technical Services, Inc.
a California corporation
401 West A Street, Suite 1200
San Diego, CA 92101
Attn: Carolyn Crull
(619) 610-7600
("CONSULTANT").

(The CITY and CONSULTANT each may be referred to herein as a “Party” and collectively as the “Parties.”)
WHEREAS, the Parties entered into that certain Consulting Agreement dated August 20, 2012, which was subsequently amended by a First Amendment dated March 17, 2014, a Second Amendment dated March 10, 2014, a Third Amendment dated July 10, 2014, a Fourth Amendment dated November 3, 2014, a Fifth Amendment dated June 11, 2015, a Sixth Amendment dated May 25, 2017, a Seventh Amendment dated September 30, 2019, an Eighth Amendment dated May 12, 2020, and a Ninth Amendment dated March 9, 2021 (collectively, the “Agreement”), wherein CITY retained CONSULTANT to provide services for fi nal plans and specifications for the Citracado Parkway Extension project, as more specifically described in the Agreement; and WHEREAS, the Parties desire to amend the Agreement to include additional services as described in “Attachment A” to this Tenth Am endment, which is attached hereto and incorporated herein by this reference.

NOW, THEREFORE, in consideration of the mutual covenants, promises, terms, and conditions set forth herein, and the mutual benefits derived therefrom, the Parties hereby agree as follows:
66 Item8.

Resolution No. 2022-81
Exhibit "A"

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Tenth Amendment
To Consulting Agreement
- 2 - CAO: 9/17/2021

1. The CONSULTANT shall furnish all of the Services described in “Attachment A” to this Tenth Amendment.

2. The CITY will compensate CONSULTANT in an additional amount not to exceed the sum of $467,249, pursuant to the conditions contained in “Attachment A” to this Tenth Amendment.

3. All other terms of the Agreement not referenced in this Tenth Amendment shall remain unchanged and in full force and effect. In the event of a conflict between a provision of the Agreement and this Tenth Amendment, this Tenth Amendment shall prevail.

4. This Tenth Amendment and the Agreement, together with any attachments or other documents described or incorporated therein, if any, constitute the entire agreement and understanding of the Parties, and there are no other terms or conditions, written or oral, controlling this matter.

5. This Tenth Amendment may be executed on separate counterparts that, upon completion, may be assembled into and shall be construed as one document. Delivery of an executed signature page of this Tenth Amendment by electronic means, including an attachment to an email, shall be effective as delivery of an executed original.

6. Unless a different date is provided in this Tenth Amendment, the effective date of this Tenth Amendment shall be the latest date of execution set forth by the names of the signatories below.

IN WITNESS WHEREOF, this Tenth Amendment is executed by the Parties or their duly authorized representatives as of the Effective Date:

CITY OF ESCONDIDO

Date:

Paul McNamara, Mayor

AECOM Technical Services, Inc.

Date:

Signature

Name & Title (please print)
APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY
MICHAEL R. MCGUINNESS, CITY ATTORNEY

BY:

THE CITY OF ESCONDIDO DOES NOT DISCRIMINATE AGAINST QUALIFIED PERSONS WITH DISABILITIES. 67 Item8.

Resolution No. 2022-81
Exhibit "A"

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ATTACHMENT “A”
Scope of Work

A. General

AECOM Technical Services, Inc., a California corporation (“Consultant”) will provide the City of Escondido, a California municipal corporation (“City”) with consulting services related to the City’s Citracado Parkway Extension project (“Project”).

B. Location

Consultant to provide services in relation to the Project, including certain services located at the Project site as depicted in Exhibit 1 to this Scope of Work, which is attached hereto and incorporated by this reference.

C. Services

Consultant shall pr ovide services as described in Exhibit 2 to this Scope of Work, which is attached hereto and incorporated by this reference. In the event of a conflict between Exhibit 2 and this Tenth Amendment (including this Scope of Work), the terms of this Tenth Amendment shall prevail.

D. Scheduling

Inquires relating to this Tenth Amendment, including scheduling and coordination with City staff, shall be directed to Matt Souttere at 760-214-4718 or [email protected].

E. Contract Price and Payment Terms

The contract price of this Tenth Amendment shall not exceed $467,249. The contract price of this Tenth Amendment shall bring the cumulative Agreement price to $3,958,646.50.

The contract price in cludes all labor, materials, equipment, and transportation required to perform the work. Services will be billed as services are performed. Payment will be made after services have been performed and within 30 days of receipt of an invoice for those servic es.

Consultant shall not bill the City for any transportation costs associated with travel to and from the project site.

See the Exhibit 3 to this Scope of Work, which is attached hereto and incorporated by this reference, for Consultant’s hour and cost estimates per task.

F. Term

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68 Item8.

Resolution No. 2022-81
Exhibit "A"

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EXHIBIT 1

69 Item8.

Resolution No. 2022-81
Exhibit "A"

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EXHIBIT 2
Task 200 – Environmental Protocol Surveys and Permitting

240 – CTC Submittal Support

Support the City's submittal to the California Transportation Commission (CTC). Support activities included responding to questions, providing supporting documentation, and revising the first addendum to the Environmental Impact Report (EIR).

The following is supporting documentation for this task.

• Final Environmental Impact Report
• ADA compliant Statements of Overriding Considerations • Notice of Determination
• ADA compliant vicinity map (8.5 x 11” black and white) • Brief statement explaining why the decision was made to prepare an Environmental Impact Report, rather than a Negative Declaration or Mitigated Negative Declaration • Memo summarizing in a bullet point list the significant environmental impacts and the required mitigation measures for the project

250 – NEPA Documentation

Preparation of NEPA documents and information in support of the City's effort to obtain federal grant funding for the construction of Citracado Parkway. Work includes preparation of the environmental narrative and certification forms.

Task 500 – Civil Plans, Specifications, and Estimate

560 – Update Civil Unit Costs for Final Engineer's Estimate of Cost

AECOM submitted an engineer's estimate of cost to the City for the constructability review in December 2019. In addition to updating the engineer's estimate of cost based on plan revisions, provide new unit costs for 94 civil bid items. New unit costs necessary to account for major changes in the cost of construction materials and labor costs since December 2019 need to be identified. Standard cost escalation processes to account for typical annual inflation would not be accurate due to the impact of recent international tariffs, labor shortages, procurement delays, and inflation in construction costs over the past two years.

580 – Storm Water Pollution Prevention Plan (SWPPP)

Preparation of a draft Storm Water Pollution Prevention Plan required for construction and issuance of a Construction Permit/WDID number. A WDID number is required before work can commence.
70 Item8.

Resolution No. 2022-81
Exhibit "A"

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Task 600 – Structures Plans, Specifications, and Estimate

621 – Revise Bridge Plans to Accommodate Future Utilities

Revise the bridge typical sections based on comments received from the utility owners, including AT&T, Cox, and SDG&E. This task includes secondary plan revisions to remaining bridge sheets based on revisions to the typical sections. Revisions are to address changes in the SDG&E gas main from a tangent alignment to a curved alignment, as well as the eventual removal of the large multi-agency future conduits.

680 – Update Structural Unit Costs for Final Engineer's Estimate of Cost

AECOM submitted an engineer's estimate of cost to the City for the constructability review in December 2019. In addition to updating the engineer's estimate of cost based on plan revisions, provide new unit costs for 53 structural bid items. New unit costs necessary to account for major changes in the cost of construction materials and labor costs since December 2019 need to be identified. Standard cost escalation processes to account for typical annual inflation would not be accurate in this case due to the impact of recent international tariffs, labor shortages, procurement delays, and inflation in construction costs over the past two years.

Task 800 – Utility Design and Coordination

820 – Utility Coordination Meetings

Additional utility design coordination meetings with SDG&E, Rincon del Diablo Municipal Water District (RDDMWD), AT&T, or Cox, are necessary to ensure coordination of utilities.

830 – Revised Temporary Bypass Highline Plans, Specifications, and Bid Schedule

Revision of the temporary bypass highline plans and specifications based additional comments received from RDDMWD, beyond revisions and comments scoped in other amendments and in the original contract.

840 – Incorporation of Utility Plans

Insertion of up to eight (8) sheets from SDG&E for a new gas line and one (1) sheet from Cox communications for the conduit for incorporation into the project plan set. This task includes inserting the add itional sheets, updating sheet numbers, adding bid items per utility owner, completing related quantity take-offs, preparing special provisions detailing the work to be done by the contractor and utility owners, and an estimated cost for the contractor's portion of this work, which will be included in the engineer's estimate of cost.

Task 2000 – Constructability Review

2010 – Additional Constructability Comments on Civil Plans and Specifications 2020 – Additional Constructability Comments on Structural Plans and Specifications 2030 – Additional Constructability Comments on Landscape and Irrigation Plans and Specifications
71 Item8.

Resolution No. 2022-81
Exhibit "A"

Page 7 of 11 ends

Page 3 of 6 ends

The additional level of effort required for reviewing, responding to and addressing the review comments is significant. The number of comments received was much higher and over an extended period of time than outlined in Amendment 9.

2040 – Additional Constructability Comments on Water and Recycled Water Plans and Specifications

Because of the addition of a second the high-lining system and other requested revisions to the water plans and specifications by the City, the level of effort required for reviewing and addressing these changes is significantly higher than accounted for in the original contract and previously approved amendments. This work includes addressing all of the review comments, revisions to existing design previously approved, and adding new elements to each of the water systems (potable and reclaimed).

Task 5000 - Accelerated Final Delivery of the PS&E

5010 – Additional City Coordination for Accelerated Schedule Workplan

This task is to accelerate work in order to meet the funding deadline associated with project funding. This work effort is to finalize delivery of the final PS&E from a six -week period to two weeks.

In order to meet the City's targeted advertisement date, additional coordination with the City to develop a plan to accelerate the delivery of the final PS&E. This work requires extensive City coordination an increased level of coordination within the project team internally.

This task includes additional coordination with the City to implement the accelerated work plan.

5020 – Staff Changes for Accelerated Schedule

The primary method of accelerating the schedule wa s to shift work that would normally be completed by lower -level staff to higher -level staff. This allows all levels of staff to work simultaneously and therefore complete the work in less time. Prior to the City’s request to accelerate the schedule, the st affing plan was for lower -level staff to complete as much of the work as possible, with higher -level staff overseeing and checking their work. With higher - and lower-level staff completing the work, principal -level staff is needed to oversee and check the work completed by the higher-level staff.

The cost to the City of accelerating the schedule arises from the use of staff with higher hourly rates completing the same number of hours of work. The cost impact is estimated by multiplying the number of hours of work completed over the two-week period by the difference in the weighted average hourly rate.

Task 6000 - Bid Phase Services

6010 – Electronic Signature Process

In lieu of printing mylars for final plans, a secure electronic signature process using Adobe Sign is preferred. This allows staff to sign all plan sheets from their desk, and reduces time at the end 72 Item8.

Resolution No. 2022-81
Exhibit "A"

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of the project to complete “As-Builts” for City record of project changes.

6020 - Bidding Support

Support during the bidding of Citracado Parkway construction project is imperative to giving contractor’s confidence in the City. Bidding support includes responding to bidders’ inquiries and submitting documentation to the City to be included in any issued bid addenda.

6030 - Conformed Plans

Preparation of a conformed set of plans reflecting all revisions made during the bidding process shall be prepared by AECOM and provided to the City prior to starting construction.

Design Services During Construction

DSDC 1 Project Management

Project management includes the tasks necessary to facilitate project delivery in a manner that meets contractual requirements and adheres to the project schedule and budget. To complete these tasks, AECOM will use proprietary tools for project delivery, developed based on the principles of earned value, risk management, and quality assurance and quality control (QA/QC), among others.

AECOM will monitor its budget and progress on a weekly basis using AECOM’s interna l project management tools and systems. AECOM will report progress on a monthly basis with each invoice to the City of Escondido. The progress report will outline the progress completed for the subject billing period, the tasks anticipated during the next billing period, and a brief discussion of any issues encountered with the schedule, budget, or scope. Up to fourteen (14) monthly progress reports and invoices are included. Deliverables • Progress Reports and Invoices

DSDC 2 Coordination w/CM Team and Field Visits

AECOM will coordinate with and provide consultation to the City of Escondido Project Manager and the City’s Construction Management (CM) team to provide project design support, either in person or via telephone or email during the construction phase of the project. AECOM will attend meetings with the City of Escondido and its oversight staff, and meetings with utility owners or others to resolve issues. AECOM staff may conduct site visits to respond to RFIs, develop change orders, or perform other specific tasks.

The total level of effort for this task will not exceed 168 hours, as shown in the cost proposal in Appendix B, unless additional budget is authorized by the City in a future amendment.

DSDC 3 Biweekly Construction Meetings

AECOM will attend biweekly jobsite meetings with up to one (1) consultant staff member present.

A total number of 28 meetings are anticipated during the 14-month construction period and each meeting is anticipated to be two (2) hours long, including travel. 73 Item8.

Resolution No. 2022-81
Exhibit "A"

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DSDC 4 Respond to Requests for Information (RFI)

AECOM will review and respond to Contractor -generated RFIs forwarded from the City of Escondido CM and issue necessary clarifications and interpretations of the contract docume nts as appropriate to the orderly completion of the Contractor’s work. Any orders authorizing variations from the contract documents will be made by the City of Escondido CM.

AECOM will review up to 45 RFIs and provide written clarifications and responses to the CM within five (5) working days or as required by the construction contract. All responses will be transmitted electronically to the City of Escondido and the CM via email. For cost proposal purposes, six (6) hours are assumed per RFI.

DSDC 5 Prepare Design Revisions

AECOM will prepare revisions to design plans and technical specifications as directed by the City of Escondido. Modifications to the project plans and specifications may be required prior to and during the construction phase of the project. AECOM will work with the City of Escondido CM team to assess the purpose for implementing a potential change, to develop an appropriate solution, and to then develop corresponding revisions to the plans and specifications. Design revisions may be in response to an action required by an RFI, change order, unforeseen site condition, informal value engineering, etc., and will be annotated in a manner directed by the City of Escondido CM. If requested by the City of Escondido, AECOM will develop cost e stimates to coincide with the proposed changes. Design revisions and additional designs will be transmitted in PDF file format.

The total level of effort for this task will not exceed 360 hours, as shown in the cost proposal in Appendix B, unless additional budget is authorized by the City in a future amendment.

DSDC 6 Review Submittals

As the engineer of record, AECOM will review the following submittals from the contractor per City request: bridge prestressing system, temporary support of casin gs, bearing pads, soil nail wall construction system, and structural and shotcrete mix designs, as requested.

AECOM will review up to ten (10) submittals or resubmittals. For cost proposal purposes, five (5) hours are assumed for each submittal round, one (1) hour for AECOM’s construction manager and four (4) hours for AECOM’s structural engineer.

DSDC 7 Punchlist and As-Built Preparation

As the project nears substantial completion, AECOM will attend the final site walk and assist the City of Escondido CM team in preparing a punchlist of items to be addressed. If directed by the City, AECOM will prepare CADD -drafted asbuilt drawings to incorporate changes to the design from CM-approved field construction changes. AECOM will incorporate the plan redlines prepared by the Contractor during construction to develop the as-built drawings.

The total level of effort for this task will not exceed 312 hours, as shown in the cost proposal in Appendix B, unless additional budget is authorized by the City in a future amendment. 74 Item8.

Resolution No. 2022-81
Exhibit "A"

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APDX E&F Continued Environmental Support

Apdx E&F1 Environmental Permit Extension

Based on discussions and correspondence with City staff, AECOM’s environmental compliance and permitting specialists propose the following as -needed services to support environmental compliance and monitoring for the Citracado Parkway Improvements Project.

Environmental Permit Extensions

AECOM will prepare and submit applications to extend environmental permits that will expire before construction is anticipated to be completed. The permits to be extended include the following:
a. Agency / Permit / Expiration / Notes
USACE Nationwide Permit (NWB) 14 - Linear Transportation Projects, SPL-2015-00121- WSZ 3/18/2023 Construction will not be completed by this date.

CDFW Amendment to Streambed Alteration Agreement, 1600 -2013-0026-R5 6/15/2023 Construction is estimated to be completed around this date, so we recommend extending the permit to be conservative.

This task assumes that AECOM is only extending the date of the permits, and is not conducting any additional impact analysis. It is assumed that no new mitigations will be required by the permitting agency. All application fees are assumed to be paid by the Cit

Apdx E&F2 Environmental Compliance Support

AECOM will use its history with the project and institutional knowledge to support the City and the City’s environmental compliance consultant, HELIX, as -needed, for biological resources compliance. Anticipated tasks include locating previously completed documents, participating in phone calls, attending meetings, and answering questions from the City/HELIX team over email.

This task also includes project setup, invoicing and project closure activities.

These services will be provided on a time -and-materials basis. When the budget shown in the cost proposal is expended, if the City requests a continuation of services, AECOM will prepare a proposal to increase the budget.

Assumptions

• This scope is assumed to be a pure services contract, with no contractual deliverables and no fixed schedule.
• The preparation of deliverables is not included in this scope o f services, but may be added by amendment if requested by the City.

Deliverables

• None
75 Item8.

Resolution No. 2022-81
Exhibit "A"

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EXHIBIT 3

Task Estimated
Hours
Estimated
Labor Cost
240 CTC Submittal Support 11 $2,035
250 NEPA Documentation 150 $14,556
560 Update Civil Unit Costs for Final Engineer’s Estimate of Cost 45 $6,500 580 Storm Water Pollution Prevention Plan (SWPPP) 81 $13,035 621 Revise Bridge Plans to Accommodate Future Utilities 90 $17,400 680 Update Structural Unit Costs for Final Engineer’s Estimate of Cost 30 $4,000 820 Utility Coordination Meetings 33 $5,325
830 Revised Temporary Bypass Highline Plans, Specs, and Bid Schedule 284 $38,270 840 Incorporation of Utility Plans 31 $5,025
2010 Additional Constructability Comments on Civil Plans and Specifications
114 $9,625
2020 Additional Constructability Comments on Structural Plans and Specs 85 $8,425 2030 Additional Constructability Comments on Landscape and Irrigation Plans and Specifications
5 $300
2040 Additional Constructability Comments on Water and Recycled Water Plans and Specifications
60 $4,650
5010 Additional City Coordination for Accelerated Schedule Workplan 26 $4,680 5020 Staff Changes for Accelerated Schedule 707.25 $18,035 6010 Electronic Signature Process 23 $2,300
6020 Bidding Support 206 $42,330
6030 Conformed Plans 86 $13,370
DSDC 1 Project Management 66 $10,816
DSDC 2 Coordination w/Construction Management Team and Field Visits ($300 – ODCs) 168 $40,384
DSDC 3 Biweekly Construction Meetings 56 $16,052
DSDC 4 Respond to Requests for Information (RFI) 270 $55,410 DSDC 5 Prepare Design Revisions 360 $60,750
DSDC 6 Review Submittals 50 $12,836
DSDC 7 Punchlist and As-Built Preparation 312 $40,000
Apdx F1 Environmental Permit Extension $8,140
Apdx F2 Environmental Compliance Support $13,000
Total 3349.25 $467,249

76 Item8.

STAFF REPORT

June 22, 2022
File Number 0600-10; A-3416

SUBJECT
$157,660 PUBLIC SERVICES AGREEMENT FOR SENIOR TRANSPORTATION

DEPARTMENT
Community Services Department

RECOMMENDATION
Request the City Council adopt Resolution 2022-79 authorizing a Public Services Agreement with Full Access & Coordinated Transportation, Inc., dba Facilitating Access to Coordinated Transportation (“FACT”) in the amount of $157,660 for transportation services for seniors to and from the Park Avenue Community Center to participate in the Senior Nutrition Program.

Staff Recommendation: Approval (Community Services Department: Joanna Axelrod , Deputy City Manager / Director of Communications and Community Services) Presenter: Robert Rhoades, Deputy Director of Community Services

FISCAL ANALYSIS
CDBG funding of $34,610 and a County of San Diego Aging and Independent Services grant in the amount of $84,895 have been awarded for FY 2022-23 which offset contract costs to the General Fund.

PREVIOUS ACTION
On June 22 , 2022, the City Council will be asked to approve Resolution 2022-80, authorizing a Public Services Agreement Amendment with HumanGood SoCal, dba Redwood Senior Homes and Services in the amount of $230,000 for preparation and delivery of Senior Nutrition Program meals to the Park Avenue Community Center.

On June 15, 2022, the City Council approved Resolution 2022 -84, adopting the fiscal year 2022 -2023 Community Development Block Grant (CDBG) and HOME Investment Partnership Program funds and approving submittal to the United States Department Housing and Urban Development which includes funding of $34,610 for the Senior Transportation Program.

On February 5, 2020, the City Council approved Resolution No. 2020 -15, authorizing the Mayor and City Clerk to accept a grant from the County of San Diego designated for Escondido seniors, and execute contract documents on behalf of the City. The transportation portion of that grant is $84,895. 77 Item9.

BACKGROUND
The City has offered the Senior Nutrition and Transportation Program for over 40 years. Escondido seniors, who are faced with food scarcity, economic challenges, and now uncertainty due to the global health crisis, find it difficult to make ends meet on a fixed income. The transportation and meal services offered through the Senior Nutrition and transportation Program present a solution to Escondido seniors to access good nutrition and combat isolation in a positive environment. As a result of this service, the senior community can continue to be an active participant in the City’s economic and civic growth.

In 2019, a Public Services Agreement was executed with Full Access & Coordinated Transportation, Inc., dba Facilitating Access to Coordinated Transportation (“FACT”) to transport seniors to and from the Park Avenue Community Center for nutritional senior meal service. The term of the Agreement was for seven months, with two additional one-year option periods.

The term of the agreement is ending. A Request for Proposals (RFP) was issued by City staff in May 2022 and emailed to multiple businesses that provide transportation services. One proposal was received. After reviewing the proposal, FACT was determined to be a responsive bidder. Therefore, staff is recommending the contract be awarded to FACT.

The cost of the first year of the agreement will be $157,660. Included in the agreement are three optional one-year renewal periods at a rate not to exceed 5% of the preceding agreement period.

RESOLUTIONS
a. Resolution 2022-79
b. Resolution No. 2022 -79 Exhibit “A” – Public Services Agreement with Full Access & Coordinated Transportation

78 Item9.

RESOLUTION NO. 2022-79

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR

TO EXECUTE, ON BEHALF OF THE CITY, A PUBLIC
SERVICES AGREEMENT FOR $157,660 WITH FULL
ACCESS & COORDINATED TRANSPORTATION, INC.

WHEREAS, the City of Escondido recognizes that transportation is often a barrier for older adults (60 years and older) in our community to accessing critical programs and services including the City’s nutritional meal program; and
WHEREAS, Full Access & C oordinated Transportation, Inc. (“FACT”) has submitted a responsive and responsible proposal for providing senior transportation services; and WHEREAS, The City Council desires at this time, and deems it to be in the best public interest, to approve a Public Service Agreement (“Agreement”) with FACT to provide transportation services to the Park Avenue Community Center for older adults to participate in the nutritional meal program; and WHEREAS, the Deputy City Manager/ Director of Communications and Community Services recommends approval of entering into an Agreement with FACT for one (1) year; with (3) three one-year renewal options, in an amount not to exceed $157,660 for transportation services.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Escondido, California:

1. That the above recitations are true.

2. That the City Council authorizes the Mayor to execute, on behalf of the City, the Agreement for senior transportation services attached as Exhi bit “A” in substantially similar form as approved by the City Attorney.
79 Item9.

Public Services Agreement (v1) - 1 - CAO: 9/17/2021

CITY OF ESCONDIDO

PUBLIC SERVICES AGREEMENT
This Public Services Agreement (“Agreement”) is made and entered into as of this _____ day of _______________ 2022 (“Effective Date”),
Between: CITY OF ESCONDIDO
a California municipal corporation
201 N. Broadway
Escondido, CA 92025
Attn: Robert Rhoades
760-839-5482
("CITY")
And: FULL ACCESS & COORDINATED TRANSPORTATION, INC.
a California nonprofit corporation
dba Facilitating Access to Coordinated Transportation
516 Civic Center Drive
Oceanside, CA 92054
Attn: Arun Prem
760-754-1252
("CONTRACTOR").
(The CITY and CONTRACTOR each may be referred to herein as a “Party” and collectively as the “Parties.”)
WHEREAS, the Parties desire to enter into this Agreement for the performance of the Services described herein.

NOW, THEREFORE, in consideration of the mutual covenants, promises, terms, and conditions set forth herein, and the mutual benefits derived therefrom, the Parties hereby agree as follows:

1. Description of Services. CONTRACTOR shall furnish all of the Services described in the Scope of Work, which is attached to this Agreement as Attachment “A” and incorporated herein by this reference (“Services”).

2. Compensation. In exchange for CONTRACTOR’s completion of the Services, the CITY shall pay, and CONTRACTOR sha ll accept in full, an amount not to exceed the sum of $157,660.

CONTRACTOR shall be compensated only for performance of the Services describe d in this Agreement. No compensation shall be provided for any other work or services without the CITY’s prior written consent.

3. Performance. CONTRACTOR shall faithfully perform the Services in a proficient manner, to the Resolution No. 2022-79
Exhibit "A"

Page 1 of 51 ends

80 Item9.

Public Services Agreement (v1) - 2 - CAO: 9/17/2021
satisfaction of the CITY, and in accord with the terms of this Agreement. CONTRACTOR shall be responsible for the professional quality, technical accuracy, timely completion, and coordination of all reports and other information furnished by CONTRACTOR pursuant to this Agreement, except that CONTRACTOR shall not be responsible for the accuracy of information supplied by the CITY.

4. Termination. The Parties may mutually terminate this Agreement through a writing signed by both Parties. The CITY may terminate this Agreement for any reason upon providing CONTRACTOR with 10 days’ advance written notice. CONTRACTOR agrees to cease all work under this Agreement on or before the effective date of any notice of termination. If the CITY terminates this Agreement due to no fault or failure of performance by CONTRACTOR, then CONTRACTOR shall be compensated based on the work satisfactorily performed at the time of such termination. In no event shall CONTRACTOR be entitled to receive more than the amount that would be paid to CONTRACTOR for the full performance of the Services.

5. City Property. All original documents, drawings, electronic media, and other materials prepared by CONTRACTOR pursuant to this Agreement immediately become the exclusive property of the CITY, and shall not be us ed by CONTRACTOR for any other purpose without the CITY’s prior written consent.

6. Insurance Requirements.
a. CONTRACTOR shall pro cure and maintain , at its own cost, during the entire term of this Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the Services, and the results of such work, by CONTRACTOR, its agents, representatives, employees, or subcontractors. Insurance coverage shall be at least as broad as the following:
(1) Commercial General Liability. Insurance Services Office (“ISO”) Form CG 00 01 covering Commercial General Liability on an “occurrence” basis, including products and completed operations, property damage, b odily injury, and personal & advertising injury, with limits no less than $1,000,000 per occurrence and $2,000,000 general aggregate. (2) Automobile Liability. ISO Form CA 00 01 covering any auto (Code 1), or if CONTRACTOR has no owned autos, hired (Code 8) and non -owned autos (Code 9), with limit s no less than $1,000,000 per accident for bodily injury and property damage, unless waived by the CITY and approved in writing by the CITY’s Risk and Safety Division. (3) Workers’ Compensation. Worker's Compensation as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit s of no less than $1,000,000 per accident for bodily injury or disease.
(4) If CONTRACTOR maintains broader coverage and/ or higher limits th an the minimums otherwise required by this Agreement , the CITY requires and shall be entit led to the broader coverage and/or the higher limits maintained by CONTRACTOR. b. Each insurance policy required by this Agreement must be acceptable to the City Attorney and shall meet the following requirements:
(1) Acceptability of Insurers. Insurance coverage must be provided by an insurer authorized to conduct business in the state of California with a current A.M. Best’s rating of no less than A-: FSC VII, or as approved by the CITY.
(2) Additional Insured Status . Both the Commercial General Liability and the Automobile Liability policies must name the CITY (including its officials, officers, agents, employees, and volunteers) specifically as an additional insured un der the policy on a separate endorsement page. The Commercial General Liability additional insured endorsement shall be at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38, and CG 20 37 if a later Resolution No. 2022-79
Exhibit "A"

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81 Item9.

Public Services Agreement (v1) - 3 - CAO: 9/17/2021
edition is used. The Automobil e Liability endorsement shall be at least as broad as ISO Form CA 20 01.
(3) Primary Coverage. CONTRACTOR’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 with respect to the CITY, its officials, officers, agents, employees, and volunteers. Any insurance or self -insurance maintained by the CITY, its officials, officers, agents, employees, or volunteers shall be in excess of CONTRACTOR’s insurance and shall not contribute with it. (4) Notice of Cancellation . Each insurance policy shall provide that coverage shall not be canceled, except with prior written notice to the CITY. (5) Subcontractors. If applicable, CONTRACTOR shall requi re and verify that all subcontractors maintain insurance meeting all the requirements stated in this Agreement, and CONTRACTOR shall ensure that the CITY (including its officials, officers, agents, employees, and volunteers) is an additional insured on any insurance required from a subcontractor.
(6) Waiver of Subrogation. CONTRACTOR hereby grants to the CITY a waiver of any right to subrogation that any insurer of CONTRACTOR may acquire against the CITY by virtue of the payment of any loss under such insurance. CONTRACTOR agrees to obtain any endorsement that may be nec essary to affect this waiver of subrogation, but this subsection shall apply regardless of whether or not the CITY has received a waiver of subrogation endorsement from the insurer. Any Workers’ Compensation policy required by this Agreement shall be endorsed with a waiver of subrogation in favor of the CITY for all work performed by the CONTRACTOR, its agents, representatives, employees and subcontractors.
(7) Self-Insurance. CONTRACTOR may, with the CITY’s prior written consent, fulfill some or all of the i nsurance requirements contained in this Agreement under a plan of self - insurance. CONTRACTOR shall only be permitted to utilize such self -insurance if, in the opinion of the CITY, CONTRACTOR’s (i) net worth and (ii) reserves for payment of claims of liability against CONTRACTOR are sufficient to adequately compensate for the lack of other insurance coverage required by this Agreement. CONTRACTOR’s utilization of self- insurance shall not in any way limit the liabilities assumed by CONTRACTOR pursuant to this Agreement.
(8) Self-Insured Retentions. Self-insured retentions must be declared to and approved by the CITY.
c. Verification of Coverage. At the time CONTRACTOR executes this Agreement, CONTRACTOR shall provide the CITY with original Certificates of Insu rance including all required amendatory endorsements (or copies of the applicable policy language effecting the insurance coverage required by this Agreement), which shall meet all requirements under this Agreement. The CITY reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by this Agreement, at any time. d. Special Risks or Circumstances. The CITY reserves the right , at any point during the term of this Agreement, to modify the insurance requirements in this Agreement, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. e. No Limitation of Obligations. The insurance requirements in this Agreement, including the types and limits of insurance coverage CONTRACTOR must maintain, and any approval of such insurance by the CITY, are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by CONTRACTOR pursuant to this Agreement, including but not limited to any provisions in this Agreement concerning indemnification. f. Failure to comply with any of the insurance requirements in this Agreement, including but not limited to a lapse in any required insurance coverage during the term of this Agreement, shall be a material breach of this Agreement . In the event that CONTRACTOR fails to comply with any such insurance requirements in this Agreement, in addition to any other remedies the CITY Resolution No. 2022-79
Exhibit "A"

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82 Item9.

Public Services Agreement (v1) - 4 - CAO: 9/17/2021
may have, the CITY may, at its sole option, (i) immediately terminate this Agreement; or (ii) order CONTRACTOR to stop work under this Agreement and/or withhold any payment that becomes due to CONTRACTOR until CONTRACTOR demonstrates compliance with the insurance requirements in this Agreement.

7. Indemnification, Duty to Defend, and Hold Harmless.
a. CONTRACTOR (including CONTRACTOR’s agents, employees, and subcontractors, if any) shall indemnify, defend, and hold harmless the CITY, its officials, officers, agents, employees, and volunteers from and against any and all claims, demands, actions, causes of action, proceedings (including but not limited to legal and administrative proceedings of any kind), suits, fines, penalt ies, judgments, orders, levies, costs, expenses, liabilities, losses, damages, or injuries, in law or equity, including without limitation the payment of all consequential damages and attorney’s fees and other related litigation costs and expenses (collect ively, “Claims”), of every nature caused by, arising out of, or in connection with CONTRACTOR’s performance of the Services or its failure to comply with any of its obligations contained in this Agreement, except where caused by the sole negligence or willful misconduct of the CITY. b. CONTRACTOR (including CONTRACTOR’s agents, employees, and subcontractors, if any) shall defend, indemnify, and hold harmless the CITY, its officials, officers, agents, employees, and volunteers from and against any and all Claims caused by, arising under, or resulting from any violation, or claim of violation, of the San Diego Municipal Storm Water Permit (Order No.

R9-2013-0001, as amended) of the California Regional Water Quality Control Board, Region 9, San Diego, that the CITY might suffer, incur, or become subject to by reason of, or occurring as a result of, or allegedly caused by, any work performed pursuant to this Agreement. c. All terms and provisions within this Section 7 shall survive the termination of this Agreement.

8. Anti-Assignment Clause. Because the CITY has relied on the particular skills of CONTRACTOR in entering into this Agreement, CONTRACTOR shall not assign, delegate, subcontract, or otherwise transfer any duty or right under this Agreement, including as to any portion of the Services, without the CITY’s prior written consent. Any purported assignment, delegation, subcontract, or other transfer made without the CITY’s consent shall be void and ineffective. Unless CONTRACTOR assigns this entire Agreement, including all rights and duties herein, to a third party with the CITY’s prior written consent, CONTRACTOR shall be the sole payee under this Agreement. Any and all payments made pursuant to the terms of this Agreement are otherwise not assignable.

9. Attorney's Fees and Costs. In any action to enforce the terms and conditions of this Ag reement, the prevailing Party shall be entitled to reasonable attorney’s fees and costs.

10. Independent Contractor . CONTRACTOR is an independent contractor , and no agency or employment relationship is created by the execution of this Agreement.

11. Amendment. This Agreement shall not be amended except in a writing signed by the CITY and CONTRACTOR.

12. Merger Clause. This Agreement, together with its attachments or other documents described or incorporated herein, if any, constitutes the entire agreement and understanding of the CITY and CONTRACTOR concerning the subject of this A greement and supersedes and replaces all prior negotiations, understandings, or proposed agreements, wri tten or oral, except as otherwise provided herein. In the event of any conflict between the provisions of this Agreement and any of its attachments or related documents, if any, the provisions of this Agreement shall prevail.

13. Anti-Waiver Clause. None of the provisions of this Agreement shall be waived by the CITY because of previous failure to insist upon strict performance, nor shall any provision be waived because any other provision has been waived by the CITY, in whole or in part.

Resolution No. 2022-79
Exhibit "A"

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83 Item9.

Public Services Agreement (v1) - 5 - CAO: 9/17/2021

14. Severability. This Agreement shall be performed and shall be enforceable to the full extent allowed by applicable law, and the illegality, invalidity, waiver, or unenforceability of any provision of this Agreement shall not affect the legality, validity, applicability, or enforceability of the remaining provisions of this Agreement.

15. Governing Law. This Agreement and all rights and obligations arising out of it shall be construed in accordance with the laws of the State of California. Venue for any action arising from this Agreement shall be conducted only in the state or federal courts of San Diego County, California.

16. Counterparts. This Agreement may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Agreement by electronic means, including an attachment to an email, shall be effective as delivery of an executed original. The Agreement on file with the City is the copy of the Agreement that shall take precedence if any differences exist between or among copies or counterparts of the Agreement.

17. Provisions Cumulative . The foregoing provisions are cumulative to, in addition to , and not in limitation of any other rights or remedies available to the CITY.

18. Notice. Any statements, communications , or notices to be provided pursuant to this Agreement shall be sent to the attention of the persons indicated herein, and the CITY and CON TRACTOR shall promptly provide the other Party with notice of any changes to such contact information.

19. Business License. CONTRACTOR shall obtain a City of Escondido Business License prior to execution of this Agreement and shall maintain such Business License throughout the term of this Agreement.

20. Compliance with Laws, Permits, and Licenses. CONTRACTOR shall keep itself informed of and comply with all applicable federal, state, and local laws, statutes, codes, ordinance s, regulations, rules, and other legal requirements in effect during the term of this A greement. CONTRACTOR shall obtain any and all permits, licenses, and other authorizations necessary to perform the Services. Neither the CITY, nor any elected or appointed boards, officers, officials, employees, or agents of the CITY, shall be liable, at law or in equity, as a result of any failure of CONTRA CTOR to comply with this section.

21. Prevailing Wages . If applicable, pursuant to California Labor Code section 1770 et seq. , CONTRACTOR agrees that a prevailing rate and scale of wages, in accordance with applicable laws, shall be paid in performing this Agreement. CONTRACTOR shall keep itself informed of and comply with all applicable federal, state, and local laws, statutes , codes, ordinances, regulations, rules, and other legal requirements pertaining to the payment of prevailing wages. The prevailing rate and scale to be paid shall be the same as t he applicable “General Prevailing Wage Determination” approved by the Department of Industrial Relations as of the Effective Date of this Agreement, which are available online at http://www.dir.ca.gov/oprl/dprewagedetermination.htm and incorporated into this Agreement by this reference . Neither the CITY, nor any elected or appointed boards, officers, officials, employees, or agents of the CITY, shall be liable, at law or in equity, as a result of any failure of CONTRACTOR to comply with this section.

22. Immigration Reform and Control Act of 1986. CONTRACTOR shall keep itself informed of and shall comply with the Immigration Reform and Control Act of 1986 (“IRCA”). CONTRACTOR represents and warrants that all of its employees and the employees of any subcontractor retained by CONTRACTOR who perform any of the Services under this Agreement, are and will be authorized to perform the Services in full compliance with the IRCA. CONTRACTOR affirms that as a licensed contractor and employer in the State of California, all new employees must produce proof of eligibility to work in the United States within the first three days of employment and that only employees legally eligible to work in the United States will perform the Services. CONTRACTOR Resolution No. 2022-79
Exhibit "A"

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84 Item9.

Public Services Agreement (v1) - 6 - CAO: 9/17/2021
agrees to comply with the IRCA before commencing any Services, and continuously throughout the performance of the Services and the term of this Agreement.

23. Effective Date. Unless a different date is provided in this Agreement, the effective date of this Agreement shall be the latest date of execution set forth by the names of the signatories below. (SIGNATURE PAGE FOLLOWS)
Resolution No. 2022-79
Exhibit "A"

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85 Item9.

Public Services Agreement (v1) - 7 - CAO: 9/17/2021
IN WITNESS WHEREOF, th is Agreement is executed by the Parties or their duly authorized representatives as of the Effective Date:

CITY OF ESCONDIDO
Date: __________________ __________________________________ Paul McNamara, Mayor

FULL ACCESS & COORDINATED

TRANSPORTATION, INC
Date: __________________ ___________________________________ Signature
___________________________________
Name & Title (please print)
APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY
MICHAEL R. MCGUINNESS, CITY ATTORNEY
BY: __________________________
THE CITY OF ESCONDIDO DOES NOT DISCRIMINATE AGAINST QUALIFIED PERSONS WITH DISABILITIES.

Resolution No. 2022-79
Exhibit "A"

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86 Item9.

ATTACHMENT “A”
Scope of Work

Attachment A to Public Services Agreement - 1 - CAO: 9/17/2021

A. General

Full Access & Coordinated Transportation, Inc., a California nonprofit corporation (“Contractor”) will provide the City of Escondido (“City”) transportation for individuals over sixty -years of age (“Seniors”) to and from the Park Avenue Community Center, home of the Escondido Senior Center, Monday through Friday, excluding recognized holidays.

The services under this Agreement shall be provided in connection with the S enior Transportation Program (“Program”) which is partially funded by the County of San Diego (“County”).

B. Location

Contractor will provide services to and from the Park Avenue Community Center located at 210 E. Park Ave, Escondido, CA 92025.

C. Services

Contractor shall provide transportation services as follows:

1. Contractor shall provide curb -to-curb service to and from the Senior’s home and the Park Avenue Community Center. Contractor will transport Seniors who live within the City of Escondido and neighboring unincorporated areas of San Diego County that have an Escondido address;

2. The City shall provide Contractor with a list of Seniors that have qualified to utilize the transportation services provided under this Agreement. The City shall provide Contractor with an updated list on a monthly basis or sooner as may be necessary. Contractor shall contact Mary Rodelo at 760-839-4678, or designated representative for verification of any individual not listed to validate transportation service as needed;

3. Contractor shall use any combination of sedans and vans that are capable of transpor ting Seniors. Contractor shall pursue vendors with paratransit/ADA vehicles that will accommodate Seniors’ mobility and accessibility needs (e.g. wheelchairs, walkers, scooters, etc.) and notify the City once acquired for use as a part of the service.

4. Contractor must obtain the City’s prior written approval to utilize a third-party transportation services provider to perform services under this Agreement. The City’s prior written approval shall not be required for Contractor’s utilization of LYFT.

5. Contractor shall provide transportation services Monday through Friday, except on designated City holidays as described in Section D of this Scope of Work, as follows:

a. Contractor shall pick -up Seniors and drop them off at the Park Avenue Community Center between the hours of 8 a.m. and 10:45 a.m. (“Morning Drop-Offs”); and b. Contractor shall pick up Seniors from the Park Avenue Community Center and return them to their respective homes beginning at 12 p.m. (“Return Service”).

6. Contractor shall make appropriate accommodations for Seniors with mobility issues that may include but not limited to wheelchairs, walkers, and canes;

7. If Contractor sends a vehicle to provide Senior transportation services that is not able to accommodate the Senior’s mobility assistive device (e.g. wheelchair, cane, scooter, or Resolution No. 2022-79
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walker), after being given at least 24-hours’ notice of the Senior’s mobility assistive devise, then City will not be charged a late or cancellation fee.

8. Contractor may allow rideshare opportunities amongst designated Senior participants of the City’s transportation program. Ridesharing amongst individuals who are not Senior participants of the City’s transportation program is strictly prohibited.

9. Contractor will provide the City with daily rider logs that include serviced Seniors’ names and how many one-way trips each Senior was provided per day. These logs are due to the City no later 2 p.m. the following business day.

10. The City shall provide reservation requests via email for the week by 2:00 p.m. on Thursday of the preceding week. Updates may be provided throughout the remainder of the week up to 4:00 p.m. the day prior to the trip.

11. Contractor shall direct Seniors wishing to provide donations for transportation services to City staff for acceptance.

12. Contractor shall instruct drivers to provide Seniors with appropriate assistance in entering and exiting the driver’s vehicl e and as -needed assistance from the driver’s vehicle to the Senior’s residence.

D. Scheduling

Contractor to schedule work in advance by contacting Mary Rodelo , 760 -839-4678, [email protected] or their designee. Work shall be performed in-between the hours of 8 a.m. and 3:30 p.m., Monday through Friday, except on the following City recognized holidays:

1. Monday, July 4, 2022 – Independence Day;

2. Monday, September 5, 2022 – Labor Day;

3. Friday, November 11, 2022 – Veteran’s Day;

4. Thursday, November 24, 2022 – Thanksgiving Day;

5. Friday, November 25, 2022 – Day After Thanksgiving;

6. Monday, December 26, 2022 – Christmas Day (observed);

7. Monday, January 2, 2023 – New Year’s Day (observed);

8. Monday, January 16, 2023 – Martin Luther King Jr. Day;

9. Monday, February 20, 2023 – President’s Day; and

10. Monday, May 29, 2023 – Memorial Day.

E. Contract Price and Payment Terms

The contract price shall not exceed $157,660. The contract price includes all labor, materials, equipment, and transportation required to perform the work. Services will be billed on a monthly basis. Invoices must be received by the fifth of the following month. Payment will be made after services have been performed and within 30 days of receipt of an invoice for those services.

Contractor’s transportation services shall be based on the following rates:

Service Rate
Transportation Services (ambulatory) $19 per trip
Late Cancellation or No Show for Transportation Services $15 per trip Resolution No. 2022-79
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Scope of Work

Attachment A to Public Services Agreement - 3 - CAO: 9/17/2021

*ADA vehicles are not available at this time. Contractor will seek out additional vendors and propose an ADA accessible rate to the City when offered.

F. Term

The term of this Agreement shall be from the Effective Date of the Agreement through June 30, 2023.

City and Contractor may agree to extend the initial term of t his Agreement for three additional one year periods (“Renewal Periods”). Renewal Periods will require City and Contractor to enter into amendments of this Agreement pursuant to Section 11 (Amendments) at least 60 days prior to the termination of the preceding term. Either party may, at that time, decline to extend this Agreement, and such declination would render the renewal option null and void.

The optional Renewal Periods will be subject to the following price increase terms:

A. Renewal Period 1 (July 2023 – June 2024) Increase : Contractor stipulates that the cumulative total of Renewal Period 1 increases would not exceed 5% of the prices in effect at the end of the initial period.

B. Renewal Period 2 (July 2024 – June 2025) Increase : Contractor stipulates that the cumulative total of Renewal Period 2 increases would not exceed 5% of the prices in effect at the end of the first renewal period.

C. Renewal Period 3 (July 2025 – June 2026) Increase : Contractor stipulates that the cumulative total of Renewal Period 3 increases would not exceed 5% of the prices in effect at the end of the second renewal period.

G. Other

Contractor, including all subcontractors, shall comply with all applicable terms, conditions, and requirements of the City’s contract with the County, which is attached to this Scope of Work as Exhibit 1 and incorporated herein by this reference.

Contractor, including all subcontractors, shall comply with all applicable federal, state, county, and local laws, regulations, guidelines, and requirements, including but not limited to those arising out of or related to the COVID-19 pandemic.

Contractor and all subcontractors hereby waive any claims against the City related to or arising from a COVID infection in any way connected to these services.

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STAFF REPORT

June 22, 2022
File Number 0430-30

SUBJECT
FISCAL YEAR 2022/23 OPERATING BUDGET ADOPTION

DEPARTMENT
Finance

RECOMMENDATION
Request the City Council adopt Resolution No. 2022 -69 approving the Fiscal Year 2022/23 Annual Operating Budget; and adopt Resolution No. 2022-70 approving the Appropriations Limit (Gann Limit) for Fiscal Year 2022/23.

Staff Recommendation: Approval (Finance: Christina Holmes, Director of Finance) Presenter: Christina Holmes, Director of Finance

ANALYSIS
The proposed FY2022/23 Annual Operating Budget document can be viewed on the City’s website at:
https://www.escondido.org/annual-operating-budget.

On May 11, 2022, City Council was presented with an update on the annual budget process, General Fund Multi-Year Financial Forecast, and the Preliminary Operating Budget for FY2022/23. Operating revenue has not kept pace with the growing costs of providing City services, and as a result the General Fund long- term financial plan has projected annual deficits creating a structural budget deficit . To address this projected shortfall, the City has maintained a hardline on expenditures and staff are continuously seeking measures that ensure efficiency, while enhancing basic operations . Despite all of these measures, and the City’s efforts to fund projects with grants and other sources of one-time funds, it has not been enough to meet growing costs and demand for services , the General Fund operating budget projected a net operating deficit of $8.5 million. The City Council direction to Staff during the Preliminary Budget Workshop was to prepare a General Fund Operating Budget t hat closed the $8.5 million deficit, without impacting the Public Safety departments and services, including Police, Fire, and Public Works.

In order to address the $8 .5 million General Fund deficit, Staff evaluated both projected operating revenue and t he proposed operating expenses for FY2022/23. A detailed report of the proposed amendments and reductions is included at the conclusion of this staff report. Due to updated information received subsequent to the May 11, 2022 budget workshop, Sales Tax rev enue was increased by 131
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$1,000,000 and property tax revenue was increased by $430 ,000. General Fund operating expense reductions of $7,068,910 were recommended, summarized below.

Total Budget
Reduction
Fleet Services Vehicle Replacement Funds (2,278,970)
Roof Repair of City Buildings (550,000)
Cost Savings Budget Reduction (1,000,000)
California Center for the Arts (1,935,949)
Public Works Reduced Maintenance Positions (427,500)
Items Removed & Reclassified (1,317,491)
Total Budget Reductions ($7,068,910)

The proposed reductions and modifications to City services were sufficient to close the FY2022/23 budget gap. The following is a summary of the proposed sources and uses in the preliminary Operating Budget presented on May 11, 2022, the amendments to the preliminary budget, and the updated sources and uses presented on June 8, 2022:

Sources of Funds:

May 11, 2022
Preliminary
Budget Amendments
June 8, 2022
Proposed
Budget
Operating Revenue $118,257,230 $1,430,000 $119,687,230
Deposit – PEG Fees 11,700 11,700
Transfer from Gas Tax Fund 2,055,000 2,055,000
Transfer from CFD No. 2020-1 (The Services) 285,000 285,000 TOTAL, Sources $120,608,930 $1,430,000 $122,038,930

Uses of Funds:

Operating Budget $128,520,810 ($7,068,910) $121,451,900 Transfer to Building Maintenance 86,880 86,880
Transfer to Reidy Creek Golf Course – Debt Service 362,750 362,750 Transfer to Successor Agency – Housing 25,000 25,000
Transfer to Vehicle Parking District 112,400 112,400
TOTAL, Uses $129,107,840 ($7,068,910) $122,038,930

FY2022/23 General Fund Net Operating Deficit ($8,498,910) $0 132
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JUNE 8 BUDGET DIRECTION RECEIVED FROM CITY COUNCIL
After discussion and consideration of the recommended budget reductions, City Council directed Staff to modify the proposed FY2022/23 operating budget and offset some of the budgetary cuts recommended with the use of no more than $5,000,000 in one -time funds from the American Rescue Plan Act (ARPA) funds and the Section 115 Pension Trust fund.

With the direction from City Council, Staff have evaluated the list of operating budget cuts and are recommending adding back the following items to the FY2022/23 operating budget, resulting in the use of one-time funds of $3,735,030.

Fleet Services Fund – FY2022/23 Proposed Budget Reduction = $2,278,970 Add Back Funding of $1,214,500
To help alleviate budget shortages, available resources in the Fleet Fund have been used to balance prior year budgets. Since the Great Recession that began in FY2009/10, the Fleet Services Fund has minimized budgetary impacts to the General Fund by deferring purchases, reducing allocations, and using reserve balances.

In the preliminary FY2022/23 budget, the allocation from the General Fund to the Fleet Services Fund was increased by $2.2 million to partially fund upcoming Police, Fire, and Street Maintenance vehicle purchases. One of the steps staf f took to close the FY2022/23 General Fund deficit was to reduce this allocation to the Fleet Service Fund by the $2.2 million and to instead utilize $1.2 million from the Fleet Fund reserves in order to replace 20 police cars, 4 police motorcycles, 11 tru cks, and 5 other pieces of equipment all of which are past their useful life.

Staff are proposing to increase the funding to the Fleet Services Fund to move forward with these purchases without the use of reserves of $1,214,500.

Roof Repair of City Buildings – FY2022/23 Proposed Budget Reduction = $550,000 Add Back Funding of $550,000
The roofs of many City buildings are at the end of their useful life resulting in deterioration, leaks, and potential mold. In order to address the deferred maintenance of more than $1 million in roof repairs, the FY2022/23 preliminary operating budget includes $550,000 to address urgent repairs needed to prevent further damage.

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Historical Cost Savings Target – FY2022/23 Proposed Budget Reduction = $1,000,000 Add Back Funding of $400,000
Historically the City’s practice has been to budget for the full cost of operating expenses. Items such as employee service savings resulting from vacant positions are not assumed in the operating budget or financial forecast with the goal of developing a conservative budget. The preliminary FY2022/23 Operating Budget presented in May used this same methodology.

To account for the annual expenditures savings, t he preliminary operating budget presented on June 8 included a cost savings rate, or budget reduction, in recognition of these annual savings. The proposed FY2022/23 cost savings budget reduction is $1 million, which excludes the Public Safety departments and services. Based on an analysis of the previous 5 fiscal years of savings, a Cost Savings Reduction line item has been added to individual departments in the General Fund.

Many municipal agencies utilize this budgetary practice of setting a target based on historical spending trends, but this represents a significant change in way the City does business. Therefore, Staff are recommending to include an offsetting Cost Savings Contingency amount of $400,000 in the non - departmental section of the budget to give some flexibility in managing available resources to be used throughout the fiscal year under the direction of the City Manager.

California Center for the Arts, Escondido (CCAE) – FY2022/23 Proposed Budget Reduction up to $1,900,000
Add Back Funding of $1,570,530
The CCAE facility is owned by the City of Escondido and operated by the California Center for the Arts, Escondido, Foundation, Inc. (the “Foundation”) under a Management Agreement. Financial support is provided to the Foundation from the City for various items, including a management fee paid to the Foundation for the operation of the Center, all gas and electric utility bills for the camp us, and support from Building Maintenance and Network Administration, either through direct payments of operational costs or employee staff time. The following is a summary of those financial support items that were included in the preliminary FY2022/23 operating budget:
 Management Fee: $788,370
 Gas & Electric Utilities expenses: $810,000
 Building Maintenance Services: $829,800
 Network Support Services: $102,090
To address the General Fund deficit for FY2022/23, Staff proposed amending the management agreement with the Foundation to eliminate the management fee of $788,370, transfer the responsibility of all gas & electric utility costs to the Foundation, as well as the direct maintenance expenses of approximately $337,579 that are currently paid for b y the City resulting in General Fund savings of approximately $1,935,949.
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To allow time to work with the Foundation on a long-term solution to the operating and financial impacts to the City, all financial support items for the CCAE were added back to the General Fund operating budget. In addition, the Foundation has proposed an i nitial reduction in the annual management fee of $133,000; from the Preliminary FY2022/23 budget amount of $788,370 to $655,370. The management fee will be disbursed to the Foundation in two installments, the first in July 2022 for half of the original proposed management fee ($394,185) and the balanced of the reduced amount ($ 261,185) in January 2023. Before the second disbursement of funds, the City and Foundation will negotiate a new management agreement to reflect these changes and also update the agreement on related matters.

The following is a summary of the financial support items to the Foundation that are now included in the proposed FY2022/23 operating budget:
 Reduced Management Fee: $655,370
 Gas & Electric Utilities expenses: $810,000
 Building Maintenance Services: $713,270 (modified number reflects updated Citywide allocations in the final proposed budget)
 Network Support Services: $102,090
FY2022/23 OPERATING BUDGET UNDER CONSIDERATION FOR ADOPTION As detailed above, the following is a summ ary of the budgetary reductions that Staff have proposed adding back to the General Fund Operating Budget:

Added Back
Fleet Services Vehicle Replacement Funds $1,214,500
Roof Repair of City Buildings 550,000
Cost Savings Budget Reduction 400,000
California Center for the Arts 1,570,530
Total Added Back to Budget $3,735,030
The staff recommendation is to utilize funds from the Revenue Loss provisio n of the American Rescue Plan Act to close the General Fund operating budget deficit in FY2022/23. The American Rescue Plan Act will provide the City one -time funding of $38,808,509 to cover expenses in response to the COVID -19 pandemic, make up for lost revenue, and ease the overall economic impact from the pandemic. Funds may only be used for project costs initiated on or after March 3, 2021, and must qualify within one of the eligible expenditure categories described below. All funds must be fully spent by December 31, 2026.

The American Rescue Plan Act defines four broad use categories for the State and Local Fiscal Recovery Fund program: response to the public health emergency or its negative economic consequences; provision of premium pay to eligible workers; revenue replac ement; and investments in water, sewer and broadband infrastructure. In September 2021, the City Council approved a spending plan of $22,808,509 135
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and identified $6,000,000 of funds to be used under the loss revenue category based on a calculation required by the Treasury Department, summarized in the table below.

Summary of American Rescue Plan Act Funds
American Rescue Plan Act Allocation $38,808,509
Spending Plan Adopted September 2021 (22,808,509)
Earmarked for Loss Revenue (6,000,000)
Remaining ARPA Funds Not Yet Allocated $10,000,000
Based on updated guidance from Treasury released in January 2022, a standard allowance can be elected by all recipients which permits the amount claimed under revenue loss to increase to $10,000,000. T he amount claimed under revenue loss can be used for “general government services,” which provides significant flexibility for municipalities. “General government services” includes any service traditionally provided by a government, other than a few excep tions explicitly identified by the Treasury. The Final Rule lists some common examples of “general government services,” including road building and maintenance and other infrastructure, health services, general government administration, staff and administrative facilities, environmental remediation, and provision of police, fire and other public safety services (including purchase of fire and police vehicles).

An update on the American Rescue Plan Act was presented to City Council on April 20, 2022. In August, Staff will return to City Council to give feedback and additional details on the requested direction to research funding programs or capital projects . In addition, Council will be asked to vote to finalize the calculation on revenue recovery options based on the January 7, 2022 Final Rule guidelines.

With the use of American Rescue Plan Act Funds of $3,735,030, the updated FY 2022/23 Operating Budget Sources and Uses are as follows:

June 8, 2022
Proposed
Budget
Amendments FY2022/23
Proposed
Budget
Sources of Funds:

Operating Revenue $119,687,230 $119,687,230
Deposit – PEG Fees 11,700 11,700
Transfer from American Rescue Plan Act - $3,735,030 $3,735,030 Transfer from Gas Tax Fund 2,055,000 2,055,000
Transfer from CFD No. 2020-1 (The Services) 285,000 285,000 TOTAL, Sources $122,038,930 $3,735,030 $125,773,960

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Uses of Funds:

Operating Budget $121,451,900 $3,735,030 $125,186,930
Transfer to Building Maintenance 86,880 86,880
Transfer to Reidy Creek Golf Course – Debt Service 362,750 362,750 Transfer to Successor Agency – Housing 25,000 25,000
Transfer to Vehicle Parking District 112,400 112,400
TOTAL, Uses $122,038,930 $3,735,030 $125,773,960
Until revenue is increased on an ongoing and structural basis, the City must continue to rely on short - term, one-time resources to continue operations and avoid drastic cuts to City services. To maintain a balanced budget and yet continue an appropriate l evel of service and address City priorities, the Fiscal Year 2022/23 budget utilizes funds from the American Rescue Plan Act, a short-term, one-time source of funds. There are also many much-needed items that are not included in the FY2022/23 proposed budget:
- critical infrastructure, equipment and vehicle, and repair needs - deferred maintenance of current facilities and parks
- ongoing maintenance of new assets being added to the community - underfunding reserve accounts
- ability to continue supporting community organizations and events - addressing organizational capacity issues

In addition to the above, high priorities from the community are not being addressed. The City continues to strive to provide the level of service residents expect a nd deserve, but given the structural General Fund deficit, it is increasingly becoming more difficult to do so.

In keeping with our commitment to long -term planning, staff will continue to provide financial recommendations based on realistic revenue pro jections, risk assessments, and prudent spending to ensure a stable financial position. The community engagement and outreach regarding the City’s budget and projected operating deficit will continue after this fiscal year’s budget is adopted. The City Manager has set aside funds in the budget to enhance the dialogue with the community, evaluate the services the City provides, and determine the right size of the organization to continue to provide those critical City services while addressing the high priorities of the community.

Summary of Amendments and Budget Reductions Proposed on June 8, 2022 Sales Tax Revenue Forecast – FY2022/23 Budget Revenue Increase = $1,000,000 During the FY2022/23 preliminary budget workshop, City staff reviewed the assumptions and analysis used for forecasting sales tax revenue. Sales Tax, which makes up 42% of total FY2022/23 projected General Fund operating revenue, is highly sensitive to economic conditions, making this r evenue 137
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particularly challenging to forecast. To assist with this analysis, t he City works closely with its sales tax consultant, AvenuInsights, in projecting sales tax revenue.

AvenuInsights prepares three levels in their forecast for projected sales tax revenue – Conservative, Most- Likely, and Optimistic. These assumption and numbers are updated each quarter based on current economic conditions and actual revenue collected for the City. The preliminary FY2022/23 budget proposed using the conservative forecast assumption of $50 million. This level was proposed after discussion with the consultants, and an analysis of possible economic conditions this upcoming fiscal year.

There are indicators that the economy could slow once more which would impact the forecasted revenue.

The fiscal support through Federal programs, which assisted in pushing up demand in 2020 and 2021 through stimulus spending, has expired. Although wages have been increasing nationwide, inflation has been rising faster, leading to a decrease in purchasing power which could hurt consumer demand. On the other hand, the combination of Federal stimulus programs and limitations on household spending for certain items, such as travel, have enabled consumers to save, which could prop up spending leading to continued sales tax growth in the next fiscal year. Despite the unknowns, sales tax revenue continues to grow and is trending above the amount projected in the current fiscal year, 2021/22. Therefore, staff have increased the FY2022/23 projected sales tax revenue by an additional $1 million, or 10% from the prior fiscal year:

Revenue
FY2021/22
Amended
FY2022/23
Projected Change %
Sales Tax $46,347,300 $51,012,200 $4,664,900 10%
City staff will continue to monitor economic indicators and sales tax revenue closely and return to Council with updates during the fiscal year.

Property Tax Revenue Forecast – FY2022/23 Budget Revenue Increase = $430,000 Projected property tax revenue is based on growth in prior fiscal years, while also accounting for the annual inflation adjustment which is capped at 2% under Proposition 13. Changes in the assessed value in property, and subsequent property tax revenue the City receives above the 2% limi t, can be largely attributed to property value reassessments that occurred as the result of changes in ownership and new construction in the City. Shortly after the May 11 City Council meeting, the County Assessor provided their preliminary property assessed values for the City for the upcoming fiscal year. The total combined assessed values are estimated to grow by $1,206,124,087, a 6.7% increase from the prior year, slightly above the amount currently forecasted in the City’s budget. Based on the additional information received from the County Assessor and an evaluation of historical results, staff increased the FY2022/23 projected property tax revenue by $430,000, or 6% from the prior fiscal year. 138
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Revenue
FY2021/22
Budget

AMENDED
FY2022/23
Projected Change %
Property Tax $30,925,000 $32,780,100 $1,855,100 6%
Items Reclassified and Removed – FY2022/23 Budget Reduction = $1,352,540 The following is a summary of the additional budget items that have been eliminated or modified, as described below, from the FY2022/23 proposed operating budget that further closed the budget gap:

Description Budget Amount
1 Staff Position – Grant Writer Management Analyst $112,800 2 Staff Position – Human Resources Analyst 76,000
3 Staff Position – Digital Media Technician 77,240
4 Fire Department Equipment 109,000
5 Planning Division Budget 550,000
6 Reduction in Public Works Municipal Services 427,500
Total Budget Items Reclassified $1,352,540
1) Grant Writer Management Analyst – Reclassified a Vacant Position: The City is heavily reliant upon grant funding in many areas of operations. To prioritize the CityWide effort to continue to seek grant opportunities, the Finance Department has reclassified a vacant Customer Service Representative position to the Grant Writer Management Analyst position which will be no financial impact to the General Fund.
2) Human Resources Analyst – Allocated to Utility Funds: To address a reduction in staff resources and in creased workload, City staff are recommending adding the Human Resource Analyst position to the FY2022/23 budget; however, there will be no financial impact to the General Fund.

The position is recommended to assist with recruitment efforts resulting from increased turnover and to properly support all departments with Human Resources needs. The position is allocated to the Water and Wastewater Funds. In addition, due to the additional responsibilities the Human Resources department has assumed to comply with the mandated COVID-19 protocols, staff costs in the department will be reimbursed from the administrative expenses set aside in the American Rescue Plan Act funds.
3) Digital Media Technician Removed from FY2022/23 Budget: The Digital Media Technician position was added at the request of the City Council Boards and Commissions subcommittee in order to expand services to broadcast Planning Commission and other Board and Commission meetings.

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4) Fire Department Equipment – An alternative funding source was identified for Fire Department equipment of $109,000. At the end of FY2020/21, City Council approved the use of yearend net surplus funds of $475,000 for the purchase of EKG monitors. The total cost of the purchase is estimated to be under the amount budgeted due to negotiating a much more favorable trade in value for the older equipment. City staff are recommending t he remaining funds budgeted for the EKG monitors be reallocated to purchase the Fire equipment proposed in the preliminary FY2022/23 operating budget.
5) Planning Division Reclassification of Consulting Services : The Planning Division budget provided for $500,000 in contract consultant services, which are offset by fees paid for by the project applicant. Expenses are incurred as development projects moved forward; however, over the previous five fiscal years the activity has been minimal. To better reflect anticipated General Fund operating expenses, the activity has been reclassified and will be accounted for outside of the Planning Department budget. This resulted in a decrease of $500,000. The preliminary FY2022/23 Planning Department budget also contained $50,000 for a clean energy study, which is no longer needed since the City joined the Clean Energy Alliance. The total reduction in expenses for this department is $550,000.
6) Reduction in Public Works Municipal Services – Removed from FY2022/23 Budget. During the Great Recession, Public Works pivoted to outsourcing municipal services as a cost saving measure.

Although outsourcing services provided savings, recent case law has determined that for General Law cities like Escondido, outsourcing non-special municipal services is prohibited by state law.

As a result, six new positions were added to the Building Maintenance Fund’s preliminary FY2022/23 budget to perform plumbing, electrical, and structural repairs at City facilities.

Without these positions, there will be longer lead times on plumbing repairs which will result in shutting down restrooms, long -term continued deferred maintenance, and potential loss of power at City facilities. All city facilities will be impacted without these services.

To reduce the increase to the General Fund budget, Building Maintenance has reduced the number of new positions to two plumber staff positions and eliminated the new equipment of $330,000. This will result in budgetary savings from the preliminary proposed budget of approximately $427,500.

RESOLUTIONS
A. Resolution No. 2022-69 approving the Fiscal Year 2022/23 Annual Operating Budget B. Resolution No. 2022-70 approving the Appropriations Limit (Gann Limit) for Fiscal Year 2022/23
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C. Resolution No. 2022-70 – Exhibit A - GANN Calculation D. Resolution No. 2022-70 – Exhibit B - GANN Limit Calculation

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RESOLUTION NO. 2022-69

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, ADOPTING OPERATING

BUDGETS FOR CERTAIN CITY DEPARTMENTS FOR FISCAL
YEAR 2022/23 SUBJECT TO ANY AMENDMENT MADE

PURSUANT TO COMPENSATION PLANS FOR THE CITY OF

ESCONDIDO AND ESTABLISHING CONTROLS ON

CHANGES IN APPROPRIATIONS TO VARIOUS FUNDS AND

DEPARTMENTS

WHEREAS, the budgets for all City of Escondido (“City”) Departments for the period July 1, 2022, through June 30, 20 23, inclusive, contained in the Fiscal Y ear 2022/23 Operating Budget Document (a copy of which is on file in the Office of the City C lerk) as amended by Council, are adopted as the final budgets for the Fiscal Year 2022/23, subject to any further amendments pursuant to approval of Compensation Plans for employees of the City of Escondido; and WHEREAS, the amount designated as Department Total for each department and each fund in the budgets on file with the City Cle rk, is hereby appropriated to the department or fund for which it is designated subject to adjustments for Compensation Plan approvals. Such appropriations as adjusted shall not be increased without approval of the City Council, except that transfers with in funds, may be approved by the City Manager. All amounts designated as Employee Services, Maintenance and Operation, and Capital Outlay in each budget on file with the City Clerk, are hereby appropriated for such uses to the department or fund under which they are listed, subject to any amendments made pursuant to approval of Compensation Plans for employees of the City, and shall not be increased without approval of the City Manager; and
WHEREAS, the approval of the Operating Budget Document, including the Department Total expressed for each department, and any subsequent amendments shall include approval for all actions of 142
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the City acting as Successor Agency of the former Escondido Redevelopment Agency as expressed in said Operating Budget Document.

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

1. That the above recitations are true.

2. That the City Council adopts operating budgets for certain City Departments for Fiscal Year 2022/23 subject to any amendment made pursuant to compensation plans for the City and establishing controls on changes in appropriations to various funds and departments. 143
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RESOLUTION NO. 2022-70

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, ADOPTING AN ANNUAL
APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2022/23

AS REQUIRED BY LAW

WHEREAS, Article XIII -B of the California State Constitution requires that the City of Escondido (“City”) calculate an appropriations limit for each fiscal year, commonly known as the "Gann Limit;" and WHEREAS, the Gann Limit is based on a combination of a population factor and an inflation factor as outlined on Exhibit "B," which is attached to this Resolution and incorporated by this reference; and WHEREAS, the City Council desires at this time and deems it to be in the best public interest to adopt an annual Gann Limit for Fiscal Year 2022/23 as listed on Exhibit "A, " which is attached to this Resolution and incorporated by this reference.

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

1. That the above recitations are true.

2. That the City Council adopts the calculation of the annual Ga nn Limit for the Fiscal Year 2022/23. The Gann Limit is adopted on a provisional basis, as the limit may need to be adjusted when current assessment data are available. The 2021/22 Gann Limit Calculation is finalized as shown on Exhibit “B,” which is attached to this Resolution and incorporated by this reference. 144
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Resolution No. 2022-70
Exhibit A

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PROCEEDS NON-PROC.

PROPERTY TAXES 32,222,700
OTHER TAXES:

Sales and Use Tax 51,012,200
Franchise 6,895,860
Transient Occupancy Tax 2,200,000
RPTTF Residual Payment 2,002,000
Property Transfer 982,400
LICENSES AND PERMITS:

Business Licenses 1,975,000
Building Permits 1,100,000
Electrical Permits 140,000
Mechanical Permits 90,000
Plumbing Permits 40,000
Other Permits 418,500
FINES, FORFEITURES AND PENALTIES:

Parking Fines 200,000
Library Fines and Fees 12,000
Other Court Fines 620,500
REVENUE FROM USE OF MONEY:

Interest Income 469,560 105,440
REVENUE FROM OTHER AGENCIES:

Rincon Fire Agreement 2,375,000
Reimbursements from Outside Agencies 500,000
Grants 380,000
VLF Revenue in Excess 175,000
Post Reimbursement 10,000
State Highway Maintenance 10,000

EXHIBIT A

GANN CALCULATION
2022/23
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Resolution No. 2022-70
Exhibit A

Page 2 of 2 ends

PROCEEDS NON-PROC.

CHARGES FOR CURRENT SERVICES:

Paramedic Services 6,305,000
Community Services 2,261,850
Engineering Fees 775,000
Plan Check Fees 586,000
Special Police Services 50,000
Conservation Credit 1,000
Zoning Fees 135,000
Environmental Impact Reports 25,000
Subdivision Fees 40,000
Sale Maps and Publications 500
Other Current Services 1,114,300
OTHER REVENUE:

Leased Property 3,050,920
Transfer Station Fee 1,120,000
Mobile Home Rent Control 60,000
Small Cell Site Revenue 75,000
Other Revenue 151,500
GAS TAX FUND:

Revenue from Use of Money
Interest Income 15,000
Revenue from Other Agencies
State Gas Tax 2105 978,660
State Gas Tax 2106 611,710
State Gas Tax 2107 1,337,010
State Gas Tax 2107.5 10,000
State Gas Tax 2013 1,493,920
TOTALS 97,759,720 26,373,810
LESS: STATE MANDATES (Estimated) (20,000)
APPROPRIATIONS SUBJECT TO LIMIT 97,739,720
GANN LIMIT FOR 2022/23 1,561,939,571
MARGIN 1,464,199,851
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Resolution No. 2022-70
Exhibit B

Page 1 of 1 ends

POPULATION INFLATION

FACTOR USED FACTOR USED
2006/07 Limitation Non Residential 370,847,343
2007/08 Factor County Growth Assessed Valuation 1.07955 2007/08 Limitation Per Capita 400,348,249
2008/09 Factor County Growth Personal Income 1.05687
2008/09 Limitation Per Capita 423,116,054
2009/10 Factor County Growth Personal Income 1.01888
2009/10 Limitation Per Capita 431,104,485
2010/11 Factor City Growth Personal Income 0.98883
2010/11 Limitation Per Capita 426,289,048
2011/12 Factor City Growth Personal Income 1.03269
2011/12 Limitation Non Residential 440,224,437
2012/13 Factor County Growth Assessed Valuation 1.27787 2012/13 Limitation Non Residential 562,549,601
2013/14 Factor County Growth Assessed Valuation 1.59242 2013/14 Limitation Non Residential 895,815,236
2014/15 Factor County Growth Assessed Valuation 1.06226 2014/15 Limitation Per Capita 951,588,693
2015/16 Factor County Growth Personal Income 1.05045
2015/16 Limitation Per Capita 999,596,343
2016/17 Factor County Growth Personal Income 1.06192
2016/17 Limitation Per Capita 1,061,491,349
2017/18 Factor County Growth Personal Income 1.04644
2017/18 Limitation Non Residential 1,110,787,007
2018/19 Factor County Growth Assessed Valuation 1.05197 2018/19 Limitation Non Residential 1,168,514,608
2019/20 Factor County Growth Assessed Valuation 1.10963 2019/20 Limitation Non Residential 1,296,618,864
2020/21 Factor City Growth Assessed Valuation 1.06106
2020/21 Limitation Per Capita 1,375,790,412
2021/22 Factor City Growth Personal Income 1.05645
2021/22 Limitation Per Capita 1,453,453,781
2022/23 Factor County Growth Personal Income 1.07464
2022/23 Limitation 1,561,939,571

EXHIBIT B

GANN LIMIT CALCULATION
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Attachment "1"
General Fund Departments
5-Year Historical Cost Savings Target
City Council 52 2,925 23,880 52,694 11,791 18,268 - Savings in the department were due to a vacant City Councilmember seat.

City Manager 55 44,400 35 368 16,047 12,181 100,000 Savings from Employee Services, City Manager's office is currently fully staffed City Attorney 128,181 143,186 12,351 857 72,263 71,368 65,000 Savings from Employee Services, City Attorney's office is currently fully staffed City Clerk 54,098 733 62,230 43,957 13,294 34,862 15,000 Vacant Department Specialist position that will not be filled immediately.

City Treasurer 27,210 38,953 85,059 61,876 83,748 59,369 25,000 Savings from Employee Services, Treasury department is currently fully staffed Finance 95,796 179,854 403,742 159,251 305,415 228,811 125,000 Utility Billing implemented a paperless billing and online payment system in FY2018.

As positions became vacant, they were left unfilled as staff developed efficiencies due to the new system. Since then 3 positions have been eliminated, all other positions have been filled.

Human Resources 26,161 6,475 8,146 145,357 82 37,244 10,000 Savings from Employee Services, Human Resources Department is currently fully staffed
Risk Management 71,181 62,517 89,474 152,340 70,435 89,189 50,000 Savings predominantly from Employee Services and partially M&O costs for CityWide training. The Risk Management Department is currently fully staffed Information Systems
Administration 58,340 361 21 454 45 11,844 - Savings in Employee Services in FY2016/17, the average 4-years of budget savings was under $1,000
Enterprise Software &
Web Administration 154,202 31,928 179,459 230,406 54,948 130,189 60,000 Annual savings can be attributed to both Employee Services and M&O costs. M&O savings were due to the Cityworks project, staff took on more of the project activities resulting in consulting services savings.

Digital Media Services 6,307 11,086 8,604 17,543 814 8,871 - Savings in Employee Services, Video Services department is currently fully staffed Geographic Information
Systems 49 253 67,751 10,964 3 15,804 15,000 Savings from Employee Services, GIS department is currently fully staffed TOTAL

ADMINISTRATIVE

SERVICES
621,632 522,669 940,751 876,068 628,884 718,001 465,000 Recreation - 49,642 113,383 278,986 569,869 110,503 Older Adult Services 34,788 48,333 38,206 26,407 27,045 36,934 Senior Nutrition 82,091 81,875 69,924 20,153 99,482 63,511 Communications - - 54 6,400 7 1,613 - Savings in Employee Services in FY2019/20, the average 4-years of budget savings was under $1,000
Main Library 187,748 23,954 29,753 37,084 614,316 30,264 - The library was outsourced in FY2018/19 and closed periodically during FY2020/21 due to COVID, therefore not considered in the calculation. FY2019/20 included an operating supplies budget line item that is no longer in the operating budget

TOTAL COMMUNITY
SERVICES 304,627 203,805 251,320 369,030 1,310,720 242,824 200,000 FY2022/23
Budget
Reduction
200,000
Savings from employee services, specifically temporary part-time positions for programs. In FY2020/21, Recreation programs were cancelled due to COVID-19 therefore excluded from the calculation
Explanation
5-Year
Average FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 148
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Attachment "1"
General Fund Departments
5-Year Historical Cost Savings Target
FY2022/23
Budget
Reduction Explanation
5-Year
Average FY2016/17 FY2017/18 FY2018/19 FY2019/20 FY2020/21 Planning 147,491 520,149 534,302 556,613 689,853 489,682 - Planning division included consulting costs for specific development projects funded by applicant revenue. The department expenditure budget has been reduced by $550,000 in FY2022/23.

Code Compliance 69,697 205,430 54,513 34,740 50,329 82,942 Engineering 132,061 83 40,524 180,683 17 70,673 Building 102,962 93,801 63,232 221,067 2,216 96,656 TOTAL

DEVELOPMENT

SERVICES
452,210 819,463 692,571 993,103 742,416 739,953 100,000 Street Maintenance 568,346 119,825 360 2,825 53 30,766 30,000 The FY2016/17 budget variance was excluded from the calculation. The 4-year average budget savings is $30,000.

Park Maintenance 186,507 105,769 88,571 (1,981) 173,718 91,519 90,000 Savings from Employee Services as vacant positions are being filled, and turnover of temporary part-time staff.

Radio Communications 16,284 12,739 7,948 17,562 46,107 20,128 20,000 The budget includes a contingency for the repair of radios that may not be utilized each fiscal year.

TOTAL PUBLIC
WORKS 771,137 238,333 96,878 18,405 219,878 142,413 140,000 POLICE
DEPARTMENT 143,330 298 158,610 148,886 305,992 151,423 150,000 Savings from Employee Services Fire Department 228,278 213,744 269 133,209 285,090 172,118 170,000 Emergency
Management 42,501 8,976 1,823 11,599 6,340 14,248 10,000

TOTAL FIRE
DEPARTMENT 270,779 222,720 2,092 144,808 291,430 186,366 180,000 Non-Departmental 525,837 166,954 114,367 95,814 361,218 252,838 150,000 Non-Department budget accounts for anticipated retirement and vacation expenses, which is unknown at the time the budget is adopted. The expenses for upcoming ballot measures are also accounted for in this budget.

Community Relations 62,170 77,170 60,170 63,000 87,087 69,919 138,910 Employee Service costs of $138,910 have been removed from this department budget, departments will absorb overtime costs for special events.

TOTAL OTHER
EXPENSES 588,007 244,124 174,537 158,814 448,305 322,757 288,910

CENTER FOR THE
ARTS 96,855 454 45,811 24,134 261,334 85,717 - Annual savings are due to gas & electric expenses.

TOTAL

EXPENDITURE

SAVINGS
3,248,578 2,251,867 2,362,570 2,733,249 4,208,958 2,438,032 1,373,910 Excluding Public Safety (373,910) Per direction from City Council on May 11, 2022, Public Safety is excluded from FY2022/23 budget reductions
Cost Saving Target in FY2022/23 1,000,000
Savings from Employee Services
100,000
Savings from Employee Services, the Development Services Department currently has 3 vacant positions that will not be filled immediately which may impact the service level provided.
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STAFF REPORT

June 22, 2022
File Number 0440-35

SUBJECT

APPROVAL TO COMMENCE JUDICIAL VALIDATION PROCEEDINGS FOR PENSION OBLIGATION BONDS

DEPARTMENT
Finance

RECOMMENDATION
Request the City Council adopt Resolution No. 2022 -89, authorizing judicial validation proceedings relating to the issuance of bonds to refund certain pension obligations of the City, approving the form and authorizing the execution of a trust agreement an d bond purchase agreement, and approving additional actions related thereto.

Staff Recommendation: Approval (Finance: Christina Holmes) Presenters:

Christina Holmes, Director of Finance
Sara Oberlies Brown, Managing Director of Stifel Public Finance Scott Smith, Principal of CSG Advisors

FISCAL ANALYSIS
The City of Escondido (“City”) and its financing team have evaluated a range of structuring options (various maturities and repayment shapes) which will be presented during tonight’s meeting. The app roval of a resolution, draft Trust Agreement, draft Bond Purchase Agreement and approval to proceed with the judicial validation process is the initial step in this effort and will give staff and the financing team direction to continue to analyze a POB issuance for the City.

PREVIOUS ACTION
On January 26, 2022 City Council received information on the City’s California Employees Retirement System pension obligations. On May 25, 2022, a Pension Obligation Bond Workshop was conducted.

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BACKGROUND
The City provides retirement benefits to its employees who provide the City services residents rely on, by contracting with the California Public Employees Retirement System (CalPERS). Retirement benefits are funded by contributions from both employees an d the City (“normal” annual service costs) as well as investment earnings.

CalPERS invests contribution payments with the goal of earning sufficient returns over the long -term to pay defined benefits as promised and cover CalPERS expenses. Historically, more than 60% of all funds paid to CalPERS retirees comes from investment earnings. The estimated long -term average return expected to be earned on investments is referred to as the “discount rate” . When lower investment earnings occur, future contributions must increase to make up the expected difference and an unfunded accrued liability (“UAL”) is created. The UAL represents the shortfall or gap between what is needed to pay retiree benefits versus how much in current assets the City actually has in its accounts with CalPERS.

The UAL is calculated annually and changes depending on the demographic trends of the plan participants.

As noted above, the UAL is essentially the City’s debt owed to CalPERS, and CalPERS currently charges the City a 6.8% interest rate on this debt with a mandatory payment schedule. The table below reflects the UAL from the most recent CalPERS actuarial valuation report as of June 30, 2020. CalPERS will release a new Annual Valuation Report as of June 30, 2021 in July/August 2022.

City of Escondido UAL Calculation Based on CalPERS 06/30/2020 Valuation Miscellaneous Safety Total
A Entry Age Normal Accrued Liability $469,434,960 $445,123,581 $914,558,541 B Market Value of Assets (MVA) $317,151,631 $308,125,828 $625,277,459 C Unfunded Accrued Liability (UAL) A - B $152,283,329 $136,997,753 $289,281,082 D Funded Ratio B / A 67.6% 69.2% 68.3%
Pension cost increases are one of the largest financial challenge facing most cities throughout the state and are primarily due to factors outside of the cities' control, namely actuarial assumption changes made by CalPERS and below average investment returns. CalPERS and the League of California Cities have detailed various options available to help manage pensions. There is no perfect solution to managing a City’s pension obligations and many agencies employ multiple methods to manage their pension obligations. The most typical options include:

1. Identify new sources of revenue to help defray the costs of the City’s pensions,

2. Using cash reserves to make additional payments to CalPERS or to the City's Section 115 Pension Trust Fund to help stabilize yearly fluctuations in pension rates, 151
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3. Pursue a CalPERS Fresh Start which allows an agency to consolidate multiple amortization bases (different components of the UAL) into one base paid off over a shorter period. While annual payments will increase, the UAL can be paid off earlier and it would save the City money over the long-term, or

4. Restructure the UAL at a lower interest rate, such as a Pension Obligation Bond.

PENSION OBLIGATION BONDS
A public workshop was held on May 25, 2022. Concepts of a Pension Obligation Bond (“POB”) were introduced and the benefits and risk factors associated with a POB were disclosed and discussed. There are several potential benefits the City could realize by issuing POBs. These potential benefits include:

1. A tool for fiscal sustainability,
POBs provide the ability to alter the City’s UAL payments in a way that could support long -term financial sustainability, help provide budget predictability and minimize the year over year variability in payments, and provide enhanced resiliency to economic shocks.

2. Budgetary savings,
Using POBs to modify the current CalPERS UAL payment schedule’s peak in projected payments to a more predictable or level structure can create cash flow savings.

3. Interest rate “savings” from arbitrage,
Issuing POBs at market rates that are lower than what CalPERS charges on the UAL creates interest savings through arbitrag e. In this example, arbitrage is created by taking advantage of the difference between the CalPERS rate of 6.8% and current market rates. All else being equal, the City would realize a lower cost of debt.

4. Maturity modification, and
A POB may have a shor ter or longer repayment period based on market conditions and the financial objectives of the issuer. However, if the POBs are structured with deferred principal amortization or repayment longer than the actuarial amortization period the overall cost of debt may increase. Further lengthening the debt repayment period adds risks and is specifically noted in the Government Finance Officers Association advisory against POBs.

5. Preservation of reserve and service levels.

Potential savings achieved through a POB issuance could reduce the need to use reserves to fund ongoing expenditures or reduce service levels.

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There are also many potential risks to consider with a POB:

1. It turns a “variable” obligation into a “fixed” obligation, The City’s UAL obligation to CalPERS will change year over year. It could increase or decrease based on a variety of factors such as investment returns or actuarial assumption changes. This allows the City to benefit from UAL decreases (i.e. lower payments to CalPERS) but does also mean the City is negatively impacted by increases (i.e. higher payments to CalPERS). Issuing a POB transfers and refinances the obligation due to CalPERS into a fixed obligation due to investors. An obligation due to investors will not increase or decrease over time which can be beneficial under the right conditions as it limits downside risk associated with an increasing UAL. However, it also carries risk as a fixed obligation because it cannot take advantage of a consistently de creasing UAL.

2. Low pension fund returns,
If CalPERS investment earnings are below its current discount rate of 6.8% in a given year, the City’s UAL will increase from the addition of a new amortization base to reflect the investment earnings shortfall. This investment shortfall is applied to the City’s Market Value of Assets (MVA) which will be higher after the issuance of POBs. The new amortization base from the investment shortfall will be larger given the MVA is higher resulting in a larger amortization base than the City would have had before issuing POBs. The City’s funded ratio would still be higher, however.

3. “Too much of a good thing,”
If CalPERS investment returns consistently exceed 6.8% after the City issues a POB, the City’s pension plan could become super -funded (i.e. has placed more money with CalPERS than is necessary to cover its pension obligations). Because the POBs become a fixed obligation, the City would not benefit from these surpluses (required contributions would not decrease as the Normal Cost must always be paid) which means the City loses the benefits of cash it could have used on other city services.

4. Future UAL can still change,
The City will always have some UAL or the potential for some UAL. Issuing POBs does not eliminate the City’s UAL obligations; it merely refinances the City’s UAL obligations as of a point in time. This will occur as a result of things such as CalPERS investment returns, future changes in the CalPERS discount rate, changes in actuarial assumptions, etc.

5. Market timing risks,
Market timing risk is related to the timing of the investment of the bond proceeds. A POB issuance produces a lump sum of proceeds which must be remitted to CalPERS immediately after issuance.

This lump sum concentrates market timing r isks rather than spreading it. This is especially a consideration in the recent economic environment as equity markets are at all -time highs. If a market crash occurred between the bond sale and CalPERS investment of the bond proceeds, 153
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which is typically t wo weeks apart, the initial investment cost would be lower and could potentially provide higher future returns. However, if a market crash occurred after the initial investment of bond proceeds, it would negatively impact future earnings given the decrease d potential for compounded earnings. It would also likely result in a new amortization base and increase in UAL all else being equal.

6. Increased bonded debt and credit risk,
Issuing POBs would reduce the City’s UAL but increases its bonded debt potentially using up debt capacity that could be used for other purposes. Having more bonded debt may also impact the City’s credit rating. S&P Global Ratings views POBs in environments of fiscal distress or as a mechanism for short -term budget relief as a negativ e credit factor. That being said, S&P also identifies a large liability to CalPERS as a credit negative and there have been many POB issuers, Chula Vista is a recent example , that did not receive a downgrade in rating associated with the issuance.

7. Judicial validation process, and
The City must proceed through a judicial validation process to issue POBs. POB issuances are validated on the basis that such bonds are an exception to the constitutional debt limit because of a public agencies’ obligations to fund its pension system payments. To date, several public agencies have received a default judgment, but no court has formally ruled on the constitutional debt limit exception.

8. Political process.

POBs can be controversial because, among other things, some view them as gambling on future market returns and they’ve received a negative reputation due to w ell publicized bankruptcies (Detroit, Stockton, and San Bernardino). Stakeholders, constituents, and interest groups may be critical of using POBs as an option for managing the City’s pension obligations.

The City and its financing team will present preliminary UAL restructuring options to refund 100% of the UAL for both the Miscellaneous Plan and Safety Plan. Under current market conditions, estimated savings on a present value basis are approximately $13.8 million or about 4.6% of the refunded UAL. The annual cash flow or budgetary savings to the City over the next 10 years are approximately $1.2 million. With an approximately 100 basis point (1.0%) improvement in interest rates, the present value savings increase to around $40 million (13% of the refunded UAL), translating to annual cash flow savings over the next 10 years of about $3.3 million. A 150 basis point improvement (1.50%) produces annual savings around $4.3 million. Actual savings achieved will depend on improved market conditions.

The approval of a resolution, draft Trust Agreement, draft Bond Purchase Agreement and approval to proceed with the judicial validation process is the initial step in this process and will give staff and the financing team direction to continue to analyze a POB issuance for the City.

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JUDICIAL VALIDATION PROCESS

Authorizing the validation proceeding is the first step in the issuance process; it entails the courts validating the City’s legal ability to issue POBs, and to confirm that the sale meets the State of California’s constitutional requirements. Under normal circumstances, the validation process takes about 4 months to complete. Key milestones of the validation process are listed below:
 City Council passes a resolution authorizing the sale of POBs;  File validation action with San Diego County Superior Court;  Receive Order for Publication of Summons from the Court (This can take >3 weeks to receive);  Publication of notice in local newspaper;
 Waiting period for any responding party to file a petition;  Clerk enters hearing for a default judgement if there is no responding party, schedules a hearing;  Hearing for default judgement, if no responding party;  30-day appeal period.

Although the issue has not been litigated extensively in California, dozens of prior default (i.e. uncontested) validation judgments have determined that pension liabilities are obligations imposed by law and therefore exempt from the debt limitation requirements set forth in Article XVI, Section 18 of the California Constitution. Staff does not anticipate a judicial validation process for the City will proceed differently.

Resolution: The resolution being approved tonight authorizes staff and outside coun sel to submit the necessary documents to the San Diego County Superior Court to start the judicial validation process as well as approves:
(1) the issuance of the bonds in an amount not-to-exceed $350 million, (2) a draft form of the Trust Agreement for the bonds (Attachment 1), (3) draft form of the Bond Purchase Agreement (Attachment 2), and The Trust Agreement identifies the duties and responsibilities of the Trustee, establishes the terms and conditions which the bonds are to be issued, and to secure the payment of the principal and interest. The not-to-exceed amount is meant to create enough flexibility for the City to pay off (1) 100% of its UAL ($289.3 million) if it desires (or anything lower), (2) a portion of its remaining FY 2022/23 UAL amortization payment, and (3) costs of issuance.

The City is not committed to any specific amount as staff and the financing team will be evaluating a full range of options to ensure the most optimal size and structure is executed. The preliminary analysis provided in the presentation and required good faith cost estimates are based on a total bond size of $304.4 million.

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SCHEDULE
With City Council approval of the resolution, the validation process will be initiated. During the validation period, staff and the financing team will refine the various options for the POBs. These options may include evaluating different sizes of POBs, amortization shapes, maturities (length of term) and targeted funded ratios.

City staff will return to Council with an update at the conclusion of a successful court validation. This exact date will be dictated by the actual duration of the validation period but is anticipated to conclude by the end of the calendar year, December 2022.

Adopting the Resolution and commencing the validation process does not in any way obligate the City to issue the POBs, it simply provides the City with a basis to issue POBs in the future. Approval to issue a POB, draft Preliminary Official Statement, and proposed financing would be requ ired by the City Council at a future date.

RESOLUTIONS
A. Resolution No. 2022-89 authorizing judicial validation proceedings relating to the issuance of bonds to refund certain pension obligations of the City

ATTACHMENTS

a. Attachment 1 – Trust Agreement
b. Attachment 2 – Bond Purchase Agreement

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RESOLUTION NO. 2022-89

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO AUTHORIZING THE ISSUANCE OF BONDS

TO REFUND AND PREPAY CERTAIN PENSION

OBLIGATIONS OF THE CITY, APPROVING THE FORM

AND AUTHORIZING THE EXECUTION OF A TRUST

AGREEMENT AND BOND PURCHASE AGREEMENT,

AUTHORIZING JUDICIAL VALIDATION PROCEEDINGS

RELATING TO THE ISSUANCE OF SUCH BONDS, AND

APPROVING ADDITIONAL ACTIONS RELATED THERETO

WHEREAS, the City of Escondido (the “City”), a municipal corporation that is duly organized and existing under the general laws of the State of California, has previously adopted a retirement plan pursuant to the Public Employees’ Retirement Law, commencing with Section 20000 of the Government Code of the State of California, as amended (the “Retirement Law”), and elected to become a contracting member of the California Public Employees’ Retirement System (“PERS”); and WHEREAS, the Retirement Law and the contract (as amended, the “PERS Contract”) effective November 1, 1958 between the Board of Administration of PERS and the City Council of the City (the “City Council”) obligate the City: (i) to make contributions to PERS to fund pension benefits for certain City employees; (ii) to make payments towards the unfunded actuarial liability with respect to such pension benefits under the Retirement Law and the PERS Contract (the “Unfunded Liability”); and (iii) to appropriate funds for the foregoing purposes; and
WHEREAS, the City desires to authorize the issuance of its City of Escondido Taxable Pensio n Obligation Bonds (the “Bonds”) pursuant to the provisions of Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, commencing with Section 53570 of said Code (the “Bond Law”), in a maximum principal amount not to exceed that which is required to refund the Unfunded Liability, to prepay all or a portion of the City’s annual required retirement contribution that is due and 157
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payable to PERS within 18 months of the issuance of the Bonds (the “Current Obligation”) , to pay capitalized interest on the Bonds and to pay the costs of issuance of such Bonds, including the underwriter’s discount and any original issue discount on such Bonds; and WHEREAS, the City expects that the need may arise in the future to issue add itional refunding bonds (the “Additional Bonds”) pursuant to the Bond Law to refinance all or a portion of the then outstanding Unfunded Liability and to fund the Current Obligation; and WHEREAS, the Bonds will be issued under and secured by a Trust Agree ment (such Trust Agreement, in substantially the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Trust Agreement”) by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee; and WHEREAS, the City has determined the advisability of filing an action to determine the validity of the Bonds, the Additional Bonds and the Trust Agreement, and the actions proposed to be taken in connection therewith; and
WHEREAS, in compliance with Section 5852.1 of the Government Code of the State of California, the City has obtained from its Municipal Advisor the required good faith estimates and such estimates are disclosed and set forth in Exhibit A; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of the financing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such financing for the purpose, in the manner and upon the terms herein provided;
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Escondido, California:

1. The City Council hereby specifically finds and declares that each of the statements, findings and determinations of the City Council that are set forth in the above recitals and in the preambles of the documents that are approved herein are true and correct.

2. The City Council hereby authorizes and approves the issuance of the Bonds on the terms and conditions set forth in, an d subject to the limitations specified in, the Trust Agreement. The Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be issued in the form and shall have terms as provided in the Trust Agreement, as the same shall be completed in accordance with this Resolution. The title of the Bonds may be changed to reflect the year in which the Bonds are issued, and to reflect the appropriate series designation, as directed by the City Manager of the City.

3. The City Council hereby approves and authorizes the execution of the Trust Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein.

The Mayor, the City Manager, any Deputy City Manager, or Finance Director and their authorized designees (the “Authorized Officers”) are, and each of them is, hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Trust Agreement in substantially the form presented to this meeti ng, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Trust Agreement by such Authorized Officer. The City Cle rk of the City is hereby authorized and directed to attest the Trust Agreement for and in the name and on behalf of the City.

4. The City Council hereby authorizes and approves the issuance of Additional Bonds pursuant to the Bond Law, as authorized by the Trust Agreement, from time to time, to refund all or a portion of the Unfunded Liability and fund the Current Obligation, provided that the City Manager, or his 159
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or her designee, first certifies to the City Council in writing that such actions will result in anticipated cost savings to the City. The City Council authorizes any one of the Authorized Officers, or their designees, to execute and deliver one or more other trust agreements and/or one or more supplemental agreements supplementing or amending the Trust Agreement and providing for the issuance of Additional Bonds (each, an “Additional Trust Agreement”); provided, however, that: (i) each series of Additional Bonds shall be in a principal amount not to exceed the sum of: (1) the Unfunded Liability of the City to PERS under the PERS Contract and the Retirement Law remaining unpaid on the date of issuance of such Additional Bonds; (2) the Current Obligation; and (3) the costs of issuing the Additional Bonds; (ii) the issuance of each series of Additional Bonds results in net present value savings to the City, as determined by an Authorized Officer at the time that each series of such Additional Bonds are issued; and (iii) the Additional Bonds shall not mature later than the last date through which PERS has determined for the amortization of the Unfunded Liability of the City in accordance with its current procedures.

Each Unfunded Liability refunded and Current Obligation funded by the Bonds and each series of Additional Bonds pursuant to the Trust Agreement and each Additional Trust Agreement constitutes an obligation imposed by law pursuant to the Constitution and laws of the State of California and an obligation of the City not limited as to payment from any special source of funds. The Unfunded Liability refunded and Current Obligation funded by the Bonds pursuant to the Trust Agreement and each series of Additional Bonds pursuant to an Additional Trust Agreement shall not, however, constitute an obligation of the City for which the City is obligated or permitted to levy or pledge any form of taxation or for which the City has levied or pledged or will levy or pledge any form of taxation.

5. The City Council hereby approves the form of the Bond Purchase Agreement (the “Bond Purchase Agreement”) presented to this meeting and on file with the Clerk and the sale of the Bonds to Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) pursuant thereto upon the terms and 160
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conditions set forth therein, and subject to such approval and the provision s hereof, the Authorized Officers, acting alone, are each hereby authorized and directed to evidence the City’s acceptance of the offers made by the Bond Purchase Agreement by executing and delivering the Bond Purchase Agreement in substantially said form, with any additions thereto (including the insertion of the maturity dates, principal amounts, interest rates and redemption provisions of the Bonds) and changes therein as any of the Authorized Officers executing the same may approve and such matters as a re authorized by this Resolution, such approval to be conclusively evidenced by the execution and delivery thereof by any one of the Authorized Officers.

6. The City Council hereby authorizes the Authorized Officers, on behalf of the City, to establish and determine: (i) the final principal amount of the Bonds, provided that the aggregate initial principal amount of the Bonds shall not be greater than the lesser of: (a) $350,000,000; or (b) the sum of the City’s Unfunded Liability and Current Obligation as calculated by PERS or another actuary selected by the Authorized Officer, together with the costs of issuing the Bonds as approved by such Authorized Officer; (ii) the final interest rates on various maturities of the Bonds, provided that the issuance o f the Bonds results in net present value savings to the City as determined by an Authorized Officer at the time that the Bonds are sold and that the maturity date of the Bonds shall not be later than the last date through which PERS has determined for the amortization of the Unfunded Liability of the City in accordance with its current procedures; and (iii) the Underwriter’s discount for the purchase of the Bonds, not to exceed 0.75% of the principal amount of the Bonds.

7. The City Council hereby author izes the Authorized Officers to negotiate and execute an insurance policy and/or a debt service reserve fund insurance policy for the Bonds (and such other agreements that may be required by the insurer in connection therewith) if it is determined that the 161
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policies will result in interest rate savings for the City, and to pay the insurance premium of such policies from the proceeds of the issuance and sale of the Bonds.

8. The City Council hereby appoints The Bank of New York Mellon Trust Company, N.A., to act as trustee under the Trust Agreement.

9. In order to determine the validity of the Bonds, the Additional Bonds, the Trust Agreement and the Additional Trust Agreements, and the actions authorized hereby to be taken in connection therewith, the City Council hereby authorizes the City Attorney, in concert with Stradling Yocca Carlson & Rauth, Bond Counsel, to prepare and cause to be filed and prosecuted to completion all proceedings required for the judicial validation of the Bonds, the Additional Bonds, the Trust Agreement and the Additional Trust Agreements in the Superior Court of San Diego County, under and pursuant to the provisions of Section 860 et seq. of the California Code of Civil Procedure. The City Council further authorizes the Authorized Officers and all other officers, employees and agents of the City to take any and all actions, including the execution and delivery of appropriate documentation, as may be required to conclude such judicial validation proceedings.

10. The City Council hereby authorizes and directs the Authorized Officers, and each of them, to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated hereby, including, but not limited to, the preparation of an Official Statement (and a Preliminary Official Statement) for use in connection with the offering and sale of the Bonds, the execution and delivery of a continuing disclosure undertaking, and the execution and delivery of any documents required by PERS in order to complete the issuance of the Bonds or Additional Bonds, the refunding of the Unfunded Liability and the funding of the Current Obligation.
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11. The City Council hereby approve s, confirms and ratifies all actions heretofore taken by the Authorized Officers and by any other officers, employees or agents of the City with respect to the issuance of the Bonds, or in connection with or related to any of the agreements or documents referenced herein

12. In accordance with Section 5852.1 of the Government Code of the State of California, the City has obtained from CSG Advisors Incorporated, the City’s Municipal Advisor, required good faith estimates relating to the Bonds, and such estimates are disclosed and set forth in Exhibit A.

13. This Resolution shall take effect from and after its date of adoption.

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EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by CSG Advisors Incorporated (the City’s “Municipal Advisor”) in consultation with Stifel, Nicolaus & Company, Incorporated, the Underwriter of the Bonds.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be sold is $304,405,000 (the “Estimated Principal Amount”).

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 5.24%.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for th e Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $1,317,000.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amo unt of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected 164
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to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $303,088,000.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $481,343,000.

The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the sal e of the Bonds being different than the date assumed for purposes of such estimates; (b) the actual principal amount of Bonds sold being different from the Estimated Principal Amount; (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the City’s financing plan, delays in the financing, additional legal work or a combination of such factors and additional finance charges, if any, attributable thereto. Market interest rates are affected by economic and other factors beyond the control of the City.

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Stradling Yocca Carlson & Rauth
Draft of 6/13/22
4894-5184-7202v3/022009-0055

TRUST AGREEMENT
by and between

CITY OF ESCONDIDO
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Dated as of _____ 1, 202__
Relating to
$_____

CITY OF ESCONDIDO
PENSION OBLIGATION BONDS, SERIES 202__
(FEDERALLY TAXABLE)
Attachment "1"
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TABLE OF CONTENTS
Page
i
4894-5184-7202v3/022009-0055

ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.01 Certain Defined Terms .............................................................................................. 1 Section 1.02 Other Definitional Provisions .................................................................................. 13

ARTICLE II

THE BONDS
Section 2.01 Issuance of Bonds; Form; Dating ............................................................................ 13 Section 2.02 Description of the Bonds ......................................................................................... 14 Section 2.03 Interest on the Bonds ............................................................................................... 14 Section 2.04 Medium of Payment ................................................................................................ 14 Section 2.05 Form ......................................................................................................................... 15 Section 2.06 Additional Bonds ..................................................................................................... 15

ARTICLE III
EXECUTION, AUTHENTICATION AND EXCHANGE OF BONDS; BOOK ENTRY BONDS Section 3.01 Execution and Authentication; Registration ............................................................ 15 Section 3.02 Transfer or Exchange of Bonds ............................................................................... 16 Section 3.03 Book-Entry Bonds ................................................................................................... 16 Section 3.04 Mutilated, Lost, Stolen or Destroyed Bonds ........................................................... 18 Section 3.05 Destruction of Bonds ............................................................................................... 19 Section 3.06 Temporary Bonds .................................................................................................... 19

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Notices to Trustee; Notices to Bondholders; Notices to DTC ................................. 19 Section 4.02 Optional Redemption of Bonds ............................................................................... 20 Section 4.03 Mandatory Sinking Fund Redemption of Bonds ..................................................... 22 Section 4.04 Payment of Bonds Called for Redemption; Effect of Redemption Call .................. 22 Section 4.05 Selection of Bonds for Redemption; Bonds Redeemed in Part ............................... 23

ARTICLE V
APPLICATION OF PROCEEDS; SOURCE OF PAYMENT OF BONDS
Section 5.01 Application of Proceeds ........................................................................................... 24 Section 5.02 Sources of Payment of Bonds; Semi-Annual Payments by the City ....................... 24

ARTICLE VI

CREATION OF CERTAIN FUNDS AND ACCOUNTS
Section 6.01 Creation of Costs of Issuance Fund ......................................................................... 25 Section 6.02 Creation of Revenue Fund and Certain Accounts ................................................... 25 Section 6.03 Creation of Redemption Fund ................................................................................. 26 Section 6.04 Moneys Held in Redemption Fund .......................................................................... 26 Section 6.05 Unclaimed Moneys .................................................................................................. 26 Attachment "1"
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TABLE OF CONTENTS
(continued)
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ARTICLE VII

CONCERNING PAYING AGENT
Section 7.01 Paying Agent; Appointment and Acceptance of Duties .......................................... 26 Section 7.02 Paying Agent - General Responsibilities ................................................................. 26 Section 7.03 Certain Permitted Acts ............................................................................................. 27 Section 7.04 Resignation or Removal of Paying Agent and Appointment of Successor ............. 27

ARTICLE VIII

COVENANTS OF THE CITY
Section 8.01 Payment of Principal and Interest ............................................................................ 27 Section 8.02 Performance of Covenants by City; Authority; Due Execution .............................. 28 Section 8.03 Instruments of Further Assurance ............................................................................ 28 Section 8.04 No Inconsistent Action ............................................................................................ 28 Section 8.05 No Adverse Action .................................................................................................. 28 Section 8.06 Maintenance of Powers ............................................................................................ 28 Section 8.07 Covenants of City Binding on Successors ............................................................... 28 Section 8.08 Trust Agreement to Constitute a Contract ............................................................... 29 Section 8.09 City to Perform Pursuant to Continuing Disclosure Agreement ............................. 29

ARTICLE IX

INVESTMENTS
Section 9.01 Investments Authorized ........................................................................................... 29 Section 9.02 Reports ..................................................................................................................... 30 Section 9.03 Valuation and Disposition of Investments ............................................................... 30 Section 9.04 Application of Investment Earnings ........................................................................ 30

ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Bonds; Release of Trust Agreement ................................................... 30 Section 10.02 Bonds Deemed Paid ................................................................................................. 31

ARTICLE XI

DEFAULTS AND REMEDIES
Section 11.01 Events of Default ..................................................................................................... 31 Section 11.02 Remedies.................................................................................................................. 32 Section 11.03 Restoration to Former Position ................................................................................ 32 Section 11.04 Bondholders’ Right to Direct Proceedings on their Behalf ..................................... 33 Section 11.05 Limitation on Bondholders’ Rights to Institute Proceedings ................................... 33 Section 11.06 No Impairment of Right to Enforce Payment .......................................................... 33 Section 11.07 Proceedings by Trustee Without Possession of Bonds ............................................ 33 Section 11.08 No Remedy Exclusive ............................................................................................. 33 Section 11.09 No Waiver of Remedies ........................................................................................... 34 Section 11.10 Application of Moneys ............................................................................................ 34 Attachment "1"
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TABLE OF CONTENTS
(continued)
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Section 11.11 Severability of Remedies ......................................................................................... 34 Section 11.12 Additional Events of Default and Remedies............................................................ 35

ARTICLE XII
TRUSTEE; REGISTRAR
Section 12.01 Acceptance of Trusts ............................................................................................... 35 Section 12.02 Duties of Trustee ...................................................................................................... 35 Section 12.03 Rights of Trustee ...................................................................................................... 36 Section 12.04 Individual Rights of Trustee .................................................................................... 38 Section 12.05 Trustee’s Disclaimer ................................................................................................ 38 Section 12.06 Notice of Defaults .................................................................................................... 38 Section 12.07 Compensation of Trustee ......................................................................................... 38 Section 12.08 Eligibility of Trustee ................................................................................................ 38 Section 12.09 Replacement of Trustee ........................................................................................... 38 Section 12.10 Successor Trustee or Agent by Merger.................................................................... 39 Section 12.11 Registrar ................................................................................................................... 39 Section 12.12 Other Agents ............................................................................................................ 39 Section 12.13 Several Capacities .................................................................................................... 39 Section 12.14 Accounting Records and Reports of Trustee ........................................................... 39 Section 12.15 No Remedy Exclusive ............................................................................................. 40

ARTICLE XIII

MODIFICATION OF THIS TRUST AGREEMENT
Section 13.01 Limitations ............................................................................................................... 40 Section 13.02 Supplemental Agreements Not Requiring Consent of Bondholders ....................... 40 Section 13.03 Supplemental Agreement Requiring Consent of Bondholders ................................ 41 Section 13.04 Effect of Supplemental Agreements ........................................................................ 41 Section 13.05 Supplemental Agreements to be Part of this Trust Agreement ............................... 42

ARTICLE XIV

MISCELLANEOUS PROVISIONS
Section 14.01 Parties in Interest ..................................................................................................... 42 Section 14.02 Severability .............................................................................................................. 42 Section 14.03 No Personal Liability of City Officials; Limited Liability of City to Bondholders ............................................................................................................. 42 Section 14.04 Execution of Instruments; Proof of Ownership ....................................................... 43 Section 14.05 Governing Law; Venue ............................................................................................ 43 Section 14.06 Notices ..................................................................................................................... 43 Section 14.07 Holidays ................................................................................................................... 44 Section 14.08 Captions ................................................................................................................... 44 Section 14.09 Counterparts ............................................................................................................. 44

Exhibit A Form of Bond ......................................................................................................... A-1 Exhibit B Form of Requisition ............................................................................................... B-1 Attachment "1"
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4894-5184-7202v3/022009-0055

TRUST AGREEMENT
This TRUST AGREEMENT is dated as of _____ 1, 202__, and is made by and between the CITY OF ESCONDIDO, a municipal corporation and general law city that is duly organized and validly existing under and pursuant to the Constitution and the laws of the State of California (the “City”), and THE BANK OF NEW YORK MELLON TRUST COMPAN Y, N.A. , a national banking association that is organized and existing under the laws of the United States of America, as trustee (the “Trustee”).

RECITALS
A. The City is a member of the California Public Employees’ Retirement System (“PERS”) and, as such, is obligated by the Public Employees’ Retirement Law, constituting Part 3 of Division 5 of Title 2 of the California Government Code (the “ Retirement Law”), and the contract between the Board of Administration of PERS and the City Council of the City, effective November 1, 1958 (as amended, the “ PERS Contract”), to make contributions to PERS: (1) to fund pension benefits for its employees who are members of PERS; (2) to amortize the unfunded actuarial liability with respect to such pension benefits; and (3) to approp riate funds for the purposes described in clauses (1) and (2).

B. The City is authorized pursuant to Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Division 2 of Title 5 of the California Government Code (the “ Refunding Law”) to issue b onds for the purpose of refunding certain evidences of indebtedness of the City, including the requirements imposed by the Retirement Law and the PERS Contract.

C. The City has determined to issue its $____________ City of Escondido Pension Obligation Bonds, Series 202 __ (Federally Taxable) (the “ Bonds”), pursuant to and as secured by this Trust Agreement providing for the issuance of the Bonds, all in the manner provided herein: (1) to refund the City’s unamortized, unfunded accrued actuarial liability with respect to pension benefits under the PERS Contract and the Retirement Law (the “ Unfunded Liability”); (2) to prepay all or a portion of the City’s annual required retirement contribution that is due and payable within 18 months of the issuance of the Bo nds (the “Current Obligation”); and (3) to pay Costs of Issuance, including underwriter’s discount and any original issue discount.

The City and the Trustee hereby agree as follows, each for the benefit of the other and the benefit of holders of the Bonds (as defined below) issued in accordance with this Trust Agreement.

ARTICLE I

DEFINITIONS; INTERPRETATION
Section 1.01 Certain Defined Terms . The terms defined in this Article I shall, for all purposes of this Trust Agreement, have the meanings that are specified below unless the context clearly requires otherwise.
“Account” means any account established pursuant to this Trust Agreement. “Additional Bonds” means bonds issued in accordance with Section 2.06 hereof.

Attachment "1"
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2 4894-5184-7202v3/022009-0055
“Annual Debt Service ” means, for any Bond Year, the sum of the aggregate amount of principal required to be paid on the Bonds during such Bond Year either at maturity or pursuant to a mandatory sinking fund payment and the interest due on the Bonds on each Interest Payment Date during such Bond Year.
“Authorized City Representative ” means the Mayor, the City Manager, any Deputy City Manager, the Finance Director or the City Clerk, or their authorized designees. “Authorized Denominations” means $5,000 and any integral multiple thereof. “Beneficial Owner ” means, whenever used with respect to a Bond, the person in whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the records of such Participant or such person’s subrogee.
“Bond” or “ Bonds” means the bonds issued under this Trust Agreement and designated as “City of Escondido Pension Obligation Bonds, Series 202__ (Federally Taxable).” “Bond Counsel” means: (a) Stradling Yocca Carlson & Rauth, a Profession al Corporation; or (b) a firm of attorneys nationally recognized as experts in the area of municipal finance who are familiar with the transactions contemplated under this Trust Agreement and acceptable to the City. “Bond Interest Account ” means the Account of that name established within the Revenue Fund pursuant to Section 6.02 hereof.
“Bond Principal Account” means the Account of that name established within the Revenu e Fund pursuant to Section 6.02 hereof.
“Bond Year” means the twelve-month period commencing on each ____ 2 and ending on the next succeeding ____ 1, except that the first Bond Year shall commence on the Closing Date and end on ____ 1, 202__.
“Book-Entry Bonds” means the Bonds held by DTC (or its nominee) as the registered owner thereof pursuant to the terms and provisions of Section 3.03 hereof. “Business Day ” means any day of the year in New York, New York or Los Angeles, California other than a Saturday or a Sunday, or a day on which banking institutions in any city in which the Principal Office of the Trustee is located are authorized or obl igated by law or executive order to be closed.
“Closing Date” means ____ __, 202__.
“Consultant” means the accountant, attorney, consultant, municipal finance consultant or investment banker, or firm thereof, retained by the City to perform acts and carry out the duties provided for such Consultant in this Trust Agreement. Such accountant, attorney, consultant, municipal finance consultant or investment banker, or firm thereof, shall be nationally recognized within its profession for work of the character required. “Continuing Disclosure Certificate” means that certain Continuing Disclosure Certificate related to the Bonds, entered into by the City and dated the Closing Date , as originally executed and as it may be amended from time to time in accordance with the terms thereof.

Attachment "1"
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3 4894-5184-7202v3/022009-0055
“Costs of Issuance” means all costs and expenses incurred by the City in connection with the issuance of the Bonds , the refunding of the Unfunded Liability and the funding of the Current Obligation, including, but not limited to, out -of-pocket expenses of the City, costs and expenses of printing and copying documents and issuing and administering the Bonds, fees, costs and expenses of Rating Agencies, credit providers or enhancers, the Trustee, coun sel to the Trustee, Bond Counsel, the verification agent, accountants, municipal finance consultant, disclosure counsel and other consultants and the premium for any municipal bond insurance and surety bond insurance. “Current Obligation ” has the meaning a ssigned to that term in the Recitals of this Trust Agreement.
“Defeasance Securities” means any of the following: (a) non-callable direct obligations of the United States of America (“Treasuries”); (b) evidence of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the under lying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated; and (c) pre- refunded municipal obligations rated “AAA” and “Aaa” by S&P and Moody’s, respectively (or any combination thereof), which shall be authorized to be used to effect defeasance of the Bonds. “DTC” means The Depository Trust Company, a limited -purpose trust company organized under the laws of the State of New York, and its successors and assigns. “Event of Default” means any occurrence or event specified in Section 11.01 hereof. “Fiduciary” or “Fiduciaries” means the Trustee, any Paying Agent, or any or all of them, as may be appropriate.
“Fiscal Year” means the period of time beginning on July 1 of each given year and ending on June 30 of the immediately subsequent year, or such other period as the City designates as its fiscal year.
“Fund” means any fund established pursuant to this Trust Agreement. “Holder,” or “Bondholder,” “owner” or “registered owner” means the registered ow ner of any Bonds, including DTC or its nominee as the sole registered owner of Book-Entry Bonds. “Information Services ” means any one or more of the national information services that Trustee determines are in the business of disseminating notices of redem ption of obligations such as the Bonds.
“Interest Payment Date” means _____ 1, 202__ and each ____ 1 and ____ 1 thereafter. “Mail” means by first-class United States mail, postage prepaid. “Moody’s” means Moody’s Investors Service, Inc., and its successors, and, if such corporation shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized rating agency designated by the City.

Attachment "1"
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4 4894-5184-7202v3/022009-0055
“Opinion of Bond Counsel” means a written opinion of Bond Counsel. “Outstanding,” with respect to the Bonds, means all Bonds which have been authenticated and delivered under this Trust Agreement, except:
(a) Bonds cancelled or purchased by the Trustee for cancellation or delivered to or acquired by the Trustee for cancellation and, in all cases, with the intent to extinguish the debt represented thereby.
(b) Bonds deemed to be paid in accordance with Section 10.02 hereof. (c) Bonds in lieu of which other Bonds have been authenticate d under Sections 3.02 and 3.04 hereof.
(d) Bonds that have become due (at maturity, on redemption, or otherwise) and for the payment of which sufficient moneys, including interest accreted or accrued to the due date, are held by the Trustee or a Paying Agent.
(e) For purposes of any consent or o ther action to be taken by the H olders of a specified percentage of Bonds Outstanding under this Trust Agreement, Bonds held by or for the account of the City or by any person controlling, controlled by or under comm on control with the City, unless such Bonds are pledged to secure a debt to an unrelated party, shall, for purposes of consents and other Bondholder action, be deemed to be Outstanding and owned by the party to which such Bonds are pledged. Nothing herein shall be deemed to prevent the City from purchasing Bonds from any party out of any funds available to the City.
“Participant” means the participants of DTC , which include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. “Paying Agent” means any paying agent for the Bonds , or successor thereto, appointed by the City pursuant to Sections 7.01 or 7.02 hereof, and any successor appointed pursuant to Section 7.04 hereof.
“Permitted Investments” means the following:
(1) Direct obligations of the United States of America and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America (“U.S. Government Securities”).
(2) Direct obliga tions* of the following federal agencies which are fully guaranteed by the full faith and credit of the United States of America:

* The following are explicitly excluded from the securities enumerated in clauses 2 and 3:
(i) All derivative obligations, including without limitation inverse floaters, residuals, interest -only, principal-only and range notes;
(ii) Obligations that have a possibility of returning a zero or negative yield if held to maturity; (iii) Obligations that do not have a fixed par value or those whose terms do not promise a fixed dollar amount at maturity or call date; and
(iv) Collateralized Mortgage-Backed Obligations.

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a. Export-Import Bank of the United States – Direct obligations and fully guaranteed certificates of beneficial interest
b. Federal Housing Administration – debentures
c. General Services Administration – participation certificates d. Government National Mortgage Association (“ GNMAs”) – guaranteed mortgage -backed securities and guaranteed participation certificates
e. Small Business Administration – guaranteed participation certificates and guaranteed pool certificates
f. U.S. Department of Housing & Urban Development – local authority bonds
g, U.S. Maritime Administration – guaranteed Title XI financings h. Washington Metropolitan Area Transit Authority – guaranteed transit bonds
(3) Direct obligations * of the following federal agencies which are not fully guaranteed by the faith and credit of the United States of America:
a. Federal National Mortgage Association (“ FNMAs”) – senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P
b. Federal Home Loan Mortgage Corporation (“ FHLMCs”) – participation certificates and senior debt obligations rated “Aaa” by Moody’s and “AAA” by S&P
c. Federal Home Loan Banks – consolidated debt obligations d. Student Loan Marketing Association – debt obligations e. Resolution Funding Corporation – debt obligations
(4) Direct, general obligations of any state of the United States of America or any subdivision or agency thereof whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, “A2” or better by Moody’s and “A” or better by S&P, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose uninsured and unguaranteed general obligation debt is rated, at the time of purchase, “A2” or better by Moody’s and “A” or better by S&P.
(5) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, “P-1” by Moody’s and “A-1” or better by S&P. (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits in amounts that are continuously and fully insured by the Federal Deposit Insurance Corporation ( the “FDIC”), including the Bank Insurance Fund and the Savings As sociation Insurance Fund, and including funds for which the Trustee or its affiliates provide investment advisory or other management services.
(7) Certificates of deposit, deposit accounts, federal funds or bankers’ acceptances (in each case having maturities of not more than 365 days following the date of purchase) of any domestic commercial bank or United States branch office of a foreign bank, provided that such bank’s short-term certificates of deposit are rated “P-1” by Moody’s and “A-1” or better by S&P (not considering holding company ratings).

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(8) Investments in money -market funds rated “AAAm” or “AAAm-G” by S&P, including funds for which the Trustee and its affiliates provide investment advisory or other management services.
(9) Repurchase agreements that meet the following criteria:
a. A master repurchase agreement or specific written repurchase agreement, substantially similar in form and substance to the Public Securities Association or Bond Market Association master repurchase agreement, governs the transaction.
b. Acceptable providers shall consist of : (i) registered broker/dealers subject to Securities Investors’ Protection Corporation (“SIPC”) jurisdiction or commercial banks insured by the FD IC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed rating of “A3/P-1” or better by Moody ’s and “A-/A-1” or better by S&P; or (ii) domestic structured investment companies rated “Aaa” by Moody’s and “AAA” by S&P.
c. The repurchas e agreement shall require termination thereof if the counterparty’s ratings are suspended, withdrawn or fall below “A3” or “P-1” from Moody’s, or “A-” or “A-1” from S&P. Within ten (10) days, the counterparty shall repay the principal amount plus any accrued and unpaid interest on the investments.
d. The repurchase agreement shall limit acceptable securities to U.S.

Government Securities and to the obligations of GNMA, FNMA or FHLMC described in 2(d), 3(a) and 3(b) above. The fair market value of the secu rities in relation to the amount of the repurchase obligation, including principal and accrued interest, is equal to a collateral level of at least 104% for U.S. Government Securities and 105% for GNMAs, FNMAs or FHLMCs. The repurchase agreement shall req uire: (i) the Trustee or the Agent to value the collateral securities no less frequently than weekly; (ii) the delivery of additional securities if the fair market value of the securities is below the requi red level on any valuation date; and (iii) liquidation of the repurchase securities if any deficiency in the required percentage is not restored within two (2) business days of such valuation. e. The repurchase securities shall be delivered free and clear of any lien to the Trustee or to an independent th ird party acting solely as agent (“Agent”) for the Trustee, and such Agent is : (i) a Federal Reserve Bank; or (ii) a bank which is a member of the FDIC and which has combined capital, surplus and undivided profits or, if appropriate, a net worth, of not le ss than $50 million, and the Trustee shall have received written confirmation from such third party that such third party holds such securities, free and clear of any lien, as agent for the Trustee.

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f. A perfected first security interest in the repurchase securities shall be created for the benefit of the Trustee, and the issuer and the Trustee shall receive an opinion of counsel as to the perfection of the security interest in such repurchase securities and any proceeds thereof. g. The repurchase agreement shall have a term of one year or less, or shall be due on demand.
h. The repurchase agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the repurchase securities:
(i) insolvency of the broker/dealer or commercial bank
serving as the counterparty under the repurchase
agreement;
(ii) failure by the counterparty to remedy any deficiency in the required collateral level or to satisfy the margin maintenance call under item 9(d) above; or
(iii) failure by the counterparty to repurchase the
repurchase securities on the specified date for
repurchase.
(10) Investment agreements, collateralized at 102% (also referred to as guaranteed investment contracts) that meet the following criteria:
a. A master agreement or specific investment agreement governs the transaction.
b. Acceptable providers of uncollateralized investment agreements shall consist of : (i) domestic FDIC -insured commercial banks, or U.S. branches of foreign banks, rated at least “Aa2” by Moody’s and “AA” by S&P; (ii) domestic insurance companies rated Aaa by Mo ody’s and “AAA” by S&P; and (iii) domestic structured investment companies rated “Aaa” by Moody’s and “AAA” by S&P.
c. Acceptable providers of collateralized inv estment agreements shall consist of: (i) registered broker/dealers subject to SIPC jurisdiction, if such broker/dealer has an uninsured, unsecured and unguaranteed rating of “A1” or better by Moody’s and “A+” or better by S&P; (ii) domestic FDIC -insured co mmercial banks, or U.S. branches of foreign banks, rated at least “A1” by Moody’s and “A+” by S&P; (iii) domestic insurance companies rated at least “A1” by Moody’s and “A+” by S&P; and (iv) domestic structured investment companies rated “Aaa” by Moody’s a nd “AAA” by S&P. Required collateral levels shall be as set forth in 10(f) below.
d. The investment agreement shall provide that if the provider’s ratings fall below “Aa3” by Moody’s or “AA-” by S&P, the provider shall within ten (10) days either : (i) repay the principal amount plus any Attachment "1"
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accrued and interest on the investment; or (ii) deliver Permitted Collateral as provided below.
e. The investment agreement must provide for termination thereof if the provider’s ratings are suspended, withdrawn or fall below “A3” from Moody’s or “A-” from S&P. Within ten (10) days, the provider shall repay the principal amount plus any accrued interest on the agreement, without penalty to the City.
f. The investment agreement shall provide for the delivery of collateral described in (i) or (ii) below (“Permitted Collateral”) which shall be maintained at the following collateralization levels at each valuation date:
(i) U.S. Government Securities at 104% of principal plus accrued interest; or
(ii) Obligations of GNMA, FNMA or FHLMC (described in 2(d), 3(a) and 3(b) above) at 105% of principal and accrued
interest.
g. The investment agreement shall require the Trustee to determine the market value of the Permitted Collateral not less than weekly and notify the investment agreement provider on the valuation day of any deficiency. Permitted Collateral may be released by the Trustee to the provider only to the extent that there are excess amounts over the required levels. Market value, with respect to collateral, may be determined by any of the following methods:
(i) the last quoted “bid” price as shown in Bloomberg, Interactive Data Systems, Inc., The Wall Street Journal or Reuters; (ii) valuation as performed by a nationally recognized pricing service, whereby the valuation method is based on a
composite average of various bid prices; or
(iii) the lower of two bid prices by nationally recognized dealers.

Such dealers or their parent holding companies shall be rated investment grade and shall be market makers in the securitie s being valued.
h. Securities held as Permitted Collateral shall be free and clear of all liens and claims of third parties, held in a separate custodial account and registered in the name of the Trustee or the Agent. i. The provider shall grant the Truste e a perfected first security interest in any collateral delivered under an investment agreement. For investment agreements collateralized initially and in connection with the delivery of Permitted Collateral under item 10(f) above, the Trustee shall receive an opinion of counsel as to the perfection of the security interest in the collateral.

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j. The investment agreement shall provide that moneys invested under the agreement must be payable and putable at par to the Trustee without condition, breakage fee o r other penalty, upon not more than two (2) business days’ notice, or immediately on demand for any reason for which the funds invested may be withdrawn from the applicable fund or account established under the authorizing document, as well as the following:
(i) In the event of a deficiency in the debt service
account;
(ii) Upon acceleration after an event of default;
(iii) Upon refunding of the Bonds in whole or in part;
(iv) Reduction of any debt service reserve requirement for the Bonds; or
(v) If a determination is later made by a nationally
recognized bond counsel that investments must be
yield-restricted.

Notwithstanding the foregoing, the agreement may provide for a breakage fee or other penalty that is payable in arrears and not as a condition of a draw by the Trustee if the City’s obligation to pay such fee or penalty is subordinate to its obligation to pay debt service on the Bonds and to make deposits to any debt service reserve fund established for the Bonds.
(k) The investment agreement shall establish the following as events of default, the occurrence of any of which shall require the immediate liquidation of the investment securities:
(i) Failure of the provider or the guarantor (if any) to make a payment when due or to deliver Permitted
Collateral of the character, at the times or in the
amounts described above;
(ii) Insolvency of the provider or the guarantor (if any) under the investment agreement;
(iii) Failure by the provider to remedy any deficiency with respect to required Permitted Collateral;
(iv) Failure by the provider to make a payment or observe any covenant under the agreement;
(v) The guaranty (if any) is terminated, repudiated or
challenged; or
(vi) Any representation of warranty furnished to the
Trustee or the issuer in connection with the agreement
is false or misleading.

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(l) The investment agreement must incorporate the following general criteria:
(i) “Cure periods” for payment default shall not exceed two (2) business days;
(ii) The agreement shall provide that the provider shall remain liable for any deficiency after application of
the proceeds of the sale of any collateral, including
costs and expenses incurred by the Trustee;
(iii) Neither the agreement nor guaranty agreement, if
applicable, may be assigned (except to a pr ovider that would otherwise be acceptable under these
guidelines);
(iv) If the investment agreement is for a debt service
reserve fund, reinvestments of funds shall be required
to bear interest at a rate at least equal to the original contract rate.
(v) The provider shall be required to immediately notify the Trustee of any event of default or any suspension,
withdrawal or downgrade of the provider’s ratings;
and
(vi) The agreement shall be unconditional and shall
expressly disclaim any right of set -off or
counterclaim.
(11) Forward delivery agreements in which the securities delivered mature on or before each interest payment date (for debt service or debt service reserve funds) or draw down date (construction funds) that meet the following criteria:
(a) A specific written investment agreement governs the transaction. (b) Acceptable providers shall be limited to : (i) any registered broker/dealer subject to the Securities Investors’ Protection Corporation jurisdiction, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated “A3/P-1” or better by Moody’s and “A-/A-1” or better by S&P; (ii) any commercial bank insured by the FDIC, if such bank has an uninsured, unsecured and unguaranteed obligation rated “A3/P-1” or better by Moody’s and “A-/A-1” or better by S&P; and (iii) domestic structured investment companies rated “Aaa” by Moody’s and “AAA” by S&P. (c) The forward delivery agreement shall provide for termination or assignment (to a qualified provider hereunder) of the agreement if the provider’s ratings are suspended, withdrawn or fall below “A3” or “P-1” from Moody’s or “A-” or “A-1” from S&P. Within ten (10) days, the provider shall fulfill any obligations it may have with respect to shortfalls in market value. There shall be no breakage fee payable to the provider in such event.

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(d) Permitted securities shall include the investm ents listed in items 1, 2 and 3 above.
(e) The forward delivery agreement shall include the following provisions:
(i) The permitted securities must mature at least one (1) business day before a debt service payment date or scheduled draw.

The maturity amount of the permitted securities must equal or exceed the amount required to be in the applicable fund on the applicable valuation date.
(ii) The agreement shall include market standard termination provisions, including the right to terminate for the provid er’s failure to deliver qualifying securities or otherwise to perform under the agreement. There shall be no breakage fee or penalty payable to the provider in such event.
(iii) Any breakage fees shall be payable only on debt service payment dates and sha ll be subordinated to the payment of debt service and debt service reserve fund replenishments. (iv) The provider must submit at closing a bankruptcy opinion to the effect that upon any bankruptcy, insolvency or
receivership of the provider, the securities will not be considered to be a part of the provider’s estate.
(v) The agreement may not be assigned (except to a provider that would otherwise be acceptable under these guidelines).
(12) Forward delivery agreements in which the securities delivered mature after the funds may be required but provide for the right of the City or the Trustee to put the securities back to the provider under a put, guaranty or other hedging arrangement. (13) Maturity of investments shall be governed by the following:
a. Investments of monies (other than reserve funds) shall be in securities and obligations maturing not later than the dates on which such monies will be needed to make payments.
b. Investments shall be considered as maturing on the first date on which they are redeemable without penalty at the option of the holder or the date on which the Trustee may require their repurchase pursuant to repurchase agreements.
c. Investments of monies in reserve funds not payable upon demand shall be restricted to maturities of five years or less. (14) Any other investment which the City is permitted by law to make, including without limitation investment in the Local Agency Investment Fund of the State of California (LAIF), provided that any investment of the type authorized pursuant to paragraphs (d), (f), (h) and (i) of Section 53601 of the California Government Code are additionally restricted as provided in the appropriate paragraph or paragraphs above applicable to such type of investment and provided Attachment "1"
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further that investments aut horized pursuant to paragraphs (k) and (m) of Section 53601 are not permitted.

To the extent that any of the requirements concerning Permitted Investments embodies a legal conclusion, the Trustee shall be entitled to conclusively rely upon a certificate from the appropriate party or an opinion from counsel to such party, that such requirement has been met. In the case of any Permitted Investment, the Trustee shall be entitled to conclusively rely upon any direction of the City as a deemed certification t hat such investment constitutes an Permitted Investment and is a legal investment under the laws of the State of California and this Trust Agreement.
“PERS” means the California Public Employees’ Retirement System. “PERS Contract ” has the meaning assigned to that term in the Recitals to this Trust Agreement.
“Principal Office of the Trustee ” means the corporate trust office of the Trustee at the address set forth in Section 14.06 of this Trust Agreement, or such other addresses may be specified in writing by the Trustee; provided, however, that for purposes of the transfer, registration, exchange, payment and surrender of Bonds, “Principal Office of the Trustee” means the office or agency of the Trustee at which, at any time, its corporate trust agency busin ess shall be conducted or such other office or address as may be specified in writing by the Trustee. “Rating Agencies” means Moody’s and S&P.
“Rating Category ” means : (i) with respect to any long -term rating category, all ratings designated by a particular letter or combination of letters, without regard to any numerical modifier, plus or minus sign or other modifier ; and ( ii) with respect to any short -term or commercial paper rating category, all ratings designated by a particular letter or combi nation of letters and taking into account any numerical modifier, but not any plus or minus sign or other modifier. “Record Date ” means the fifteenth day of each calendar month preceding any Interest Payment Date, regardless of whether such day is a Business Day. “Redemption Fund” means the Fund by that name established pursuant to Section 6.03. “Refunding Law ” has the meaning assigned to that term in the Recitals to this Trust Agreement.
“Registrar” means, for purposes of this Trust Agreement, the Trustee or its successor or assignee.
“Representation Letter ” means the Letter of Representations from the City to DTC with respect to the Bonds.
“Requisition” or “ Written Requisition ” means a Requisition or Written Requisition, substantially in the form of Exhibit B.
“Responsible Officer ” means any managing director, president, vice president, senior associate, associate or other officer of the Trustee within the Principal Office of the Trustee (or any Attachment "1"
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successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Principal Office of the Trustee because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Trust Agreement.
“Retirement Law ” has the meaning assigned to that term in the Recitals to this Trust Agreement.
“Revenue Fund” means the Fund by that name established pursuant to Section 6.02. “S&P” means S&P Global Ratings, LLC, a Standard & Poor’s Financial Services LLC business, and its successors , and, if such company shall for any reason no longer perfo rm the functions of a securities rating agency, “ S&P” shall be deemed to refer to any other nationally recognized rating agency designated by the City.
“Securities Depositories” means any of The Depository Trust Company or, in accordance with then -current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may indicate in a certificate of the City delivered to the Trustee. “State” means the State of California.
“Total Bond Obligation ” means, as of any date of calculation, the aggregate principal amount of the Bonds then Outstanding.
“Trust Agreement” means this Trust Agreement dated as of _____ 1, 202 __ between the City and the Trustee, as it may be amended, supplemented or otherwise modified from time to time. “Trustee” means the entity named as such in the heading of this Trust Agreement until a successor replaces it, and thereafter means such successor. “Unfunded Liability ” has the meaning assigned to that term in the Recitals to this Trust Agreement.

Section 1.02 Other Definitional Provisions. Except as otherwise indicated, references to Articles and Sections are to the Articles and Sections of this Trust Agreement. Any of the terms defined in Section 1.01 may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

ARTICLE II

THE BONDS
Section 2.01 Issuance of Bonds; Form; Dating . Bonds may be issued by the City under the terms of this Trust Agreement only to refund the City’s Unfunded Liability under the PERS Contract and the Retiremen t Law , to fund the City’s Current Obligation and to pay the Costs of Issuance in connection with the issuance of the Bonds. The Bonds shall be designated “City of Escondido Pension Obligation Bonds , Series 202 __ (Federally Taxable) ” and shall be issued in Authorized Denominations. The Bonds shall be issued hereunder in the aggregate principal amount Attachment "1"
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of $_____. Interest on the Bonds shall be payable on ____ 1, 202__ and each ____ 1 and ____ 1 thereafter.

Section 2.02 Description of the Bonds . Each Bond shall be issue d in fully registered form and shall be numbered as determined by the Trustee. The Bonds shall be dated the Closing Date. The Bonds shall be issued in Authorized Denominations; provided, however, that the Bonds shall initially be Book-Entry Bonds.

The Bonds shall mature on the dates, in the principal amounts, and interest thereon shall be computed at the rates, as shown below:

Maturity Date
(____ 1) Principal Amount Interest Rate
20__ $ %

_______________
* Term Bond.

Section 2.03 Interest on the Bonds . Interest on each Bond of each maturity shall be payable at the respective per annum ra tes set forth in Section 2.02 hereof and shall be payable on each Interest Payment Date until maturity or earlier re demption, computed using a year of 360 days comprised of twelve 30 -day months. Interest on each Bond shall accrue from the Interest Payment Date for the Bonds next preceding the date of authenticatio n and delivery thereof, unless : (i) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) it is authenticated after a Record Date and before the close of business on the immediately following Interest Payment Date, in whic h event interest thereon shall be payable from such Interest Payment Date; or (iii) it is authenticated prior to the close of business on the first Record Date, in which event interest thereon shall be payable from the Closing Date; provided, however, that if at the time of authentication of any Bond interest thereon is in default, interest thereon shall be payable from the Interest Payment Date to which interest has previously been paid or made available for payment or, if no interest has been paid or made available for payment, from the Closing Date.

Section 2.04 Medium of Payment. Principal, premium, if any, and interest on the Bonds shall be payable in currency of the United States of America which at the time of payment is legal Attachment "1"
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tender for the payment of public and private debts. Payments of interest on any of the Bonds will be made on each Interest Payment Date by check of the Trustee sent by Mail, or by wire transfer to any Holder of $1,000,000 or more of Bonds, to the account specified by such Holder in a written request delivered to the Trustee on or prior to the Record Date for such Interest Payment Date, to the Holder thereof on the Record Date; provided, however, that payments of defaulted interest shall be payable to the person in whose name such Bond is reg istered at the close of business on a special record date fixed therefor by the Trustee which shall not be more than 15 days and not less than ten days prior to the date of the proposed payment of defaulted interest. Payment of the principal of the Bonds upon redemption or maturity will be made upon presentation and surrender of each such Bond, at the Principal Office of the Trustee.

Section 2.05 Form. The Bonds shall be substantially in the form set forth in Exhibit A.

The Bonds may be printed, lithographed, photocopied or typewritten and shall be in such Authorized Denominations as may be determined by the City.

Section 2.06 Additional Bonds. From time to time, the City may enter into : (a) one or more other trust agreements or indent ures; and/or (b) one or more agreements suppl ementing and/or amending this Trust Agreement, for the purpose of providing for the issuance of Additional Bonds to refund the Bonds , to refund all or any portion of any Unfunded Liability under the PERS Contract arising subsequent to the issuance of the B onds, to fund all or any portion of the Current Obligation of the City arising subsequent to the issuance of the Bonds or to fund any other obligations due to PERS. Such Additional Bonds may be issued on a parity with the Bonds.

ARTICLE III

EXECUTION, AUTHENTICATION AND EXCHANGE OF BONDS;

BOOK ENTRY BONDS
Section 3.01 Execution and Authentication; Registration. (a) The Bonds will be signed for the City with the manual or facsimile signature of the City Manager or the Mayor of the City. The City may deliver to the Trustee or its age nt duly executed Bonds for authentication from time to time by the Trustee or its agent as such Bonds may be required. Bonds executed and so delivered and authenticated will be valid. In case any officer of the City whose signature or whose facsimile sig nature appears on any Bonds shall cease to be such officer before the authentication of such Bonds, such signature or the facsimile signature thereof shall nevertheless be valid and sufficient for all purposes as if he or she had remained in office until authentication. Also, if a person signing a Bond is the proper officer on the actual date of execution, the Bond will be valid even if that person is not the proper officer on the nominal date of action and even though, at the date of this Trust Agreement, such person was not such officer. (b) A Bond will not be valid until the Trustee or its agent executes the certificate of authentication on such Bond by manual or facsimile signature. Such signature will be conclusive evidence that such Bond has been authenticated under this Trust Agreement. The Trustee may appoint an authenticating agent acceptable to the City to authenticate Bonds. An authenticating agent may authenticate Bonds whenever the Trustee may do so. Each reference in this Trust Agreement to authentication by the Trustee includes authentication by such agent.

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(c) Bonds may be presented at the Principal Office of the Trustee, unless a different office has been designated for such purpose, for registration, transfer and exchange. The Registrar will keep a register of such Bonds and of their transfer and exchange.

Section 3.02 Transfer or Exchange of Bonds. Subject to Section 3.03:
(a) All Bonds shall be issued in fully registered form. Upon surrender for transfer of any Bond at the Principal Office of the Trus tee, the Trustee shall deliver in the name of the transferee or transferees a new fully authenticated and registered Bond or Bonds of Authorized Denominations of the same maturity for the aggregate principal amount which the Bondholder is entitled to receive.
(b) All Bonds presented for transfer, redemption or payment shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the City, duly executed by the Bondhol der or by his or her duly authorized attorney. The Trustee also may require payment from the Bondholder of a sum sufficient to cover any tax or other governmental fee or charge that may be imposed in relation thereto. Such taxes, fees and charges shall be paid before any such new Bond shall be delivered. (c) Bonds delivered upon any transfer as provided he rein, or as provided in Section 3.04, shall be valid obligations of the City, evidencing the same debt as the Bond surrendered, shall be secured by this Trust Agreement and shall be entitled to all of the security and benefits hereof to the same extent as the Bond surrendered. (d) The City, the Trustee and the Paying Agent shall treat the Bondholder, as shown on the registration books kept by the Trustee, as t he person exclusively entitled to payment of principal, premium, if any, and interest with respect to such Bond and to the exercise of all other rights and powers of the Bondholder, except that all interest payments will be made to the party who, as of the Record Date, is the Bondholder.
(e) The Trustee shall not be required to register the t ransfer or exchange of any Bond during the period in which the Trustee is selecting Bonds for redemption and any Bond that has been selected for redemption.
(f) Prior to any tr ansfer of the Bonds outside the book -entry system (including, but not limited to, the initial transfer outside the book -entry system) the transferor shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information
Section 3.03 Book-Entry Bonds.
(a) Except as provided in paragraph (c) of this Section 3.03, the registered owner of all of the Bonds shall be DTC and the Bonds shall be registered in the name of Cede & Co., as nominee for DTC. Except as provided in paragraph (d) of this Section 3.03, payment of principal, interest and premium, if any, for any Bonds registered in the name of Cede & Co. shall be made as provided in the Representation Letter.

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(b) The Bonds sh all be initially issued in the form of a separate single authenticated fully registered Bond for each separate stated maturity of the Bonds. The Trustee, the Registrar and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bond s registered in its name for the purposes of payment of the principal or redemption price of, or interest on, the Bonds, selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required to be given to Bondholders under this T rust Agreement, registering the transfer of Bonds, obtaining any consent or other action to be taken by Bondholders and for all other purposes whatsoever, and neither the Trustee, the Registrar nor the City shall be affected by any notice to the contrary. Neither the Trustee, the Registrar nor the City shall have any responsibility or obligation to any Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or any Participant or any other person which is not shown on the registration books as being a Bondholder, with respect to : (i) the accuracy of any records maintained by DTC or any Participant; (ii) the payment by DTC or any Participant of any amount in respect of the principal or redemption price of or interest on the Bonds; (iii) any notice which is permitted or required to be given to Bondholders under this Trust Agreement; (iv) the selection by DTC or any Participant of any person to receive payment in the event of a partial redemption of the Bonds; or (v) any consent given or other action taken by DTC as a Bondholder. The Trustee shall pay, from funds held under the terms of this Trust Agreement or otherwise provided by the City, all principal or redemption price of and interest on the Bonds only to DTC as p rovided in the Representation Letter and all such payments shall be valid and effective to satisfy and discharge fully the City’s obligations with respect to the principal or redemption price of and interest on the Bonds to the extent of the sum or sums so paid.

No person other than DTC shall receive authenticated Bonds eviden cing the obligation of the City to make payments of principal or redemption price and interest pursuant to this Trust Agreement. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions herein with respect to Record Dates, the name “Cede & Co.” in this Trust Agreement shall refer to such new nominee of DTC. (c) In the event that the City determines that it is in the best interest of the Beneficial Owners that they be able to obtain Bond certificates and notifies DTC, the Trustee and the Registrar of such determination, then DTC will notify the Participants of the availabilit y through DTC of Bond certificates. In such event, the Trustee shall authenticate and the Registrar shall transfer and exchang e Bond certificates as requested by DTC and any other Bondholders in appropriate amounts. DTC may determine to discontinue provi ding its services with respect to the Bonds at any time by giving notice to the City and the Trustee and discharging its responsibilities with respect thereto under applicable law. Under such circumstances (if there is no successor securities depository), the City and the Trustee shall be obligated to deliver Bond certificates as described in this Trust Agreement. In the event that Bond certificates are issued, the provisions of this Trust Agreement shall apply to, among other things, the transfer and exc hange of such certificates and the method of payment of principal of and interest on such certificates. Whenever DTC requests the City and the Trustee to do so, the Trustee and the City will cooperate with DTC in taking appropriate action after reasonable notice: (i) to make available one or more separate certificates evidencing the Bonds to any Participant having Bonds credited to its DTC account ; or (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Bonds.
(d) Notwithstanding any other provision of this Trust Agreement to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal or redemption price of and interest on such Bonds and all notices with respect Attachment "1"
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to such Bonds shall be made and given, respectively, to DTC as provided in the Representation Letter.
(e) In connection with any notice or other communication to be provided to Bondholders pursuant to this Trust Agreement by the City o r the Trustee with respect to any consent or other action to be taken by Bondholders, the City or the Trustee, as the case may be, shall establish a record date for such consent or other action and give DTC notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. Notice to DTC shall be given only when DTC is the sole Bondholder.
(f) If the City purchases, or causes the Trustee to purchase, any of the Bonds, such purchase of Bonds shall be deemed to have o ccurred upon the purchase of beneficial ownership interests in the Bonds from a Participant. Upon receipt by DTC of notice from the City and a Participant that a purchase of beneficial ownership interests in the Bonds has been made by the City from such Participant, DTC shall surrender to the Trustee the Bonds referenced in such notice and, if the principal amount referenced in said notice is less than the principal amount of the Bonds so surrendered, the Trustee shall authenticate and deliver to DTC, in e xchange for the Bonds so surrendered, a new Bond or Bonds, as the case may be, in Authorized Denominations and in a principal amount equal to the difference between : (i) the principal amount of the Bonds so surrendered; and (ii) the principal amount referenced in said notice. (g) Notwithstanding any provision herein to the contrary, the City and the Trustee may agree to allow DTC, or its nominee, Cede & Co., to make a notation on any Bond redeemed in part to reflect, for informational purposes only, the princip al amount and date of any such redemption.
(h) In the event that DTC notifies the Cit y that it is discontinuing the book -entry system for the Bonds, the City may either appoint another entity to hold the Bonds in book -entry form or deliver Bond certificates to the beneficial owners or Participants, as directed by DTC.

Section 3.04 Mutilated, Lost, Stolen or Destroyed Bonds. (a) In the event that any Bond is mutilated or defaced but identifiable by number and description, the City shall execute and the Trustee shall authenticate and deliver a new Bond of like date, maturity and denomination as such Bond, upon surrender thereof to the Trustee; provided that there shall first be furnished to the City and the Trustee proof satisfactory to the Trustee that the Bond is mutilated or de faced. The Bondholder shall accompany the above with a deposit of money required by the City for the cost of preparing the substitute Bond and all other expenses connected with the issuance of such substitute. The City shall then cause proper record to b e made of the cancellation of the original, and thereafter the substitute shall have the validity of the original. (b) In the event that any Bond is lost, stolen or destroyed, the City may execute and the Trustee may authenticate and deliver a new Bond of like date, maturity and denomination as the Bond lost, stolen or destroyed; provided that there shall first be furnished to the Trustee e vidence of such loss, theft or destruction satisfactory to the Trustee, together with indemnity satisfactory to it. (c) The City may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the City and the Trustee for the preparation, execution, authentication and delivery thereof. All Attachment "1"
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substitute Bonds issued and authenticated pursuant to this Section shall be issued as a substitute and numbered, if numbering is provided for by the Trustee, as determined by the Trustee. In the event that any such Bond has matured or has been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof upon receipt of indemni ty satisfactory to the Trustee.

Section 3.05 Destruction of Bonds. Whenever any Outstanding Bonds shall be delivered to the Trustee for cancellation pursuant to this Trust Agreement, upon payment of the principal amount and interest represented thereby or for replacem ent pursuant to Section 3.04 or transfer pursuant to Section 3.02, such Bond shall be cancelled and destroyed by the Trustee and counterparts of a certificate of destruction evidencing such destruction shall, upon the City’s request, be furnished by the Trustee to the City.

Section 3.06 Temporary Bonds.
(a) Pending preparation of definitive Bonds, the City may execute and the Trustee shall authenticate and deliver, in lieu of definitive Bonds and subject to the same limitation and conditions, interim receipts, certificates or temporary bonds which shall be exchanged for the Bonds.
(b) If temporary bonds shall be issued, the City shall cause the definitive Bonds to be prepared and to be executed and delivered to the Trustee, and the Trustee, upon presentation to it of any tempora ry bond, shall cancel the same and deliver in exchange therefor at the place designated by the Bondholder, without charge to the Bondholder thereof, definitive Bonds of an equal aggregate principal amount, of the same series, maturity and bearing interest at the same rate or rates as the temporary Bonds surrendered. Until so exchanged, the temporary bonds shall in all respects be entitled to the same benefit and security of this Trust Agreement as the definitive Bonds to be issued and authenticated hereunder.

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Notices to Trustee; Notices to Bondholders; Notices to DTC. (a) Notice of redemption shall be given by the Trustee, on behalf of the City (provided that the City has so instructed the Trustee at least five (5) Business Days prior to the date of delivery of the notice of redemption to the Holders of the Bonds), not less than 20 nor more than 60 days pr ior to the redempt ion date: (i) in the case of Bonds not registered in the name of a Securities Depository or its nominee, to the respective Holders of the Bonds designated for redemption at their addresses appearing on the registration books of the Trustee; (ii) in the cas e of Bonds registered in the name of a Securities Depository or its nominee, to such Securities Depository for such Bonds; and (iii) to the Information Services. Notice of redemption to the Holders pursuant to clause (i) above shall be given by mail at their addresses appearing on the registration books of the Trustee, or any other method agreed upon by such Holder and the Trustee. Notice of redemption to the Securities Depositories pursuant to clause (ii) above and the Information Services pursuant to clause (iii) above shall be given by electronically secure means, or any other method agreed upon by such entities and the Trustee.

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(b) Each notice of redemption shall state the Bonds or designated portions thereof to be redeemed, the date of redemption, the pla ce of redemption, the redemption price, the CUSIP number (if any) of the Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, the original issue date, interest rate and stated maturity date of each Bond to be redeemed in whole or part. Each such notice shall also state that on said date there will become due and payable on each of the Bonds to be redeemed the redemption price, and redemption premium, if any, ther eof, and that from and after such redemption date interest thereon shall cease to accrue. (c) Failure to give the notices described in this Section 4.01 or any defect therein shall not in any manner affect the redemption of any Bonds. Any notice sent as provi ded herein will be conclusively presumed to have been given whether or not actually received by the addressee. (d) The City has the right to rescind any notice of the redemption of Bonds under clauses (a) or (b) by written notice to the Trustee on or prior to two (2) Business Days prior to the date fixed for redemption, in which case such redemption shall be cancelled and annulled and such cancellation shall not constitute an Event of Default. In addition, any notice of redemption shall be cancelled and annull ed if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an event of default. The City and the Trustee have no liability to the Owners or any other party related to or arising from any such rescission or cancellation of redemption. The Trustee shall mail notice of such rescission and/or cancellation of redemption in the same manner as the original notice of redemption was sent under this Section.

Section 4.02 Optional Redemption of Bonds.
(a) Optional Par Redemption. The Bonds maturing on or after ___ 1, 20__ may be redeemed at the option of the City from any source of funds on ____ 1, 20__ or any date thereafter in whole or in part from such maturities as are selected by the City pursuant to a written notice delivered to the Trustee and by lot within a maturity at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium. (b) Optional Make-Whole Redemption. The Bonds are subject to redemption prior to ____ 1, 20__ , at the option of the City, in whole or in part (and if in part in any order of maturity selected by the City pursuant to a written notice delivered to the Trustee and within a maturity bearing interest at the same rate on a pro -rata basis as described below), on any date at a redemption price equal to the greater of:
(i) 100% of the principal amount of the Bonds to be redeemed; or (ii) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of such Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which such Bonds ar e to be redeemed, discounted to the date on which such Bonds are to be redeemed on a semi -annual basis, assuming a 360-day year consisting of twelve 30 -day months, at the Comparable Treasury Yield (as such term is defined below) plus __ basis points;
plus, in each case, accrued interest on such Bonds to be redeemed to the redemption date.

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For purposes of the foregoing, the following terms have the following meanings:
“Calculation Agent ” means a commercial bank or an investment banking institution of national standing that is a primary dealer of United States government securities in the United States and designated by the City (which may be one of the institutions that served as an underwriter for the Bonds).
“Comparable Treasury Issue ” means the United Sta tes Treasury security selected by the Calculation Agent as having a maturity comparable to the remaining term to maturity of the Bonds being redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in p ricing new issues of corporate debt securities of comparable maturity to the remaining term to maturity of the Bonds being redeemed. “Comparable Treasury Price” means, with respect to any date on which a Bond or portion thereof is being redeemed, either : (a) the average of five Reference Treasury Dealer quotations for the date fixed for redemption, after excluding the highest and lowest such quotations ; and (b) if the Calculation Agent is unable to obtain five such quotations, the average of the quotations that are obtained. The quotations will be the average, as determined by the Calculation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of principal amount) quoted in writing to the Calculation Agent, at 5:00 p.m. New York City time on a date selected by the Calculation Agent which is not less than three business days and not more than 20 business days preceding the date fixed for redemption.
“Comparable Treasury Yield” means the yield that repre sents the weekly average yield to maturity for the preceding week appearing in the most recently published statistical release designated “H.15(519) Selected Interest Rates” under the heading “Treasury Constant Maturities,” or any successor publication selected by the Calculation Agent that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity, for the maturity corresponding t o the remaining term to maturity of the Bonds being redeemed. The Comparable Treasury Yield will be determined no sooner than the third business day nor earlier than the twentieth calendar day preceding the applicable date fixed for redemption. If the H.15(519) statistical release sets forth a weekly average yield for United States Treasury securities that have a constant maturity that is the same as the remaining term to maturity of the Bonds being redeemed, then the Comparable Treasury Yield will be equal to such weekly average yield. In all other cases, the Comparable Treasury Yield will be calculated by interpolation on a straight -line basis between the weekly average yields on the United States Treasury securities that have a constant maturity : (i) closest to and greater than the remaining term to maturity of the Bonds being redeemed; and (ii) closest to and less than the remaining term to maturity of the Bonds being redeemed. Any weekly average yields calculated by interpolation will be rounded to t he nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded upward. If, and only if, weekly average yields for United States Treasury securities for the preceding week are not available in the H.15(519) statistical release or any suc cessor publication, then the Comparable Treasury Yield will be the rate of interest per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price (each as defined herein) as of the date fixed for redemption.

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“Reference Treasury Dealer ” means a primary dealer of United States Government securities in the United States (which may be one of the institutions that served as an underwriter for the Bonds) appointed by the District and reasonably acceptable to the Calculation Agent.

Section 4.03 Mandatory Sinking Fund Redemption of Bonds . The Bonds maturing ___ 1, 20 __ (the “ 20__ Term Bonds ”) are subject to mandatory sinking fund redemption at a redemption price equal to the principal amount thereof, plus accrued interest to the redemption date, without premium. The 20__ Term Bonds shall be so redeemed on the following dates and in the following amounts:

Redemption Date
(____ 1)
Principal
Amount
20__ $

* Maturity.

In the event of prior redemption pursuant to Sections 4.01(a) or (b), the City shall provide the Trustee with a revised mandatory sinking fund schedule giving effect to the redemption so complete.

On or before each ____ 15 next preceding any mandatory sinking fund redemption date, the Trustee shall proceed to select for redemption pro -rata from all Term Bonds subject to mandatory sinking fund redemption at that time, an aggregate principal amount of such Term Bonds equal to the amount for such year as set forth in the table above and shall call such Term Bonds or portions thereof for redemption and give notice of such redemption in accordance with the terms of Section 4.01. At the option of the City, to be exercised by d elivery of a written certificate to the Trustee on or before each ____ 1 next preceding any mandatory sinking fund redemption date, it may: (a) deliver to the Trustee for cancellation Term Bonds or portions thereof (in the amount of an Authorized Denominat ion) of the stated maturity subject to such redemption ; or (b) specify a principal amount of such Term Bonds or portions thereof (in the amount of an Authorized Denomination) which prior to said date have been purchased or redeemed (otherwise than under th e provisions of this Section 4.03) and cancelled by the Trustee at the request of the City and not theretofore applied as a credit against any mandatory sinking fund redemption requirement. Each such Term Bonds or portion thereof so delivered or previousl y redeemed shall be credited by the Trustee at 100% of the principal amount of the Term Bonds so delivered to the Trustee by the City against the obligation of the City on such mandatory sinking fund redemption date.

Section 4.04 Payment of Bonds Called for Redemption; Effect of Redemption Call. (a) Upon surrender to the Trustee or the Trustee’s agent, Bonds called for redemption shall be paid at the redemption price stated in the notice, plus interest accrued to the redemption date.
(b) On the date so designated for redemption , notice having been given in the manner and under the conditions provided herein relating to such Bonds as are to be redeemed and moneys for payment of the redemption price being held in trust to pay the redemption price, the Attachment "1"
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Bonds so called for redemption shall become and be due and payable on the redemption date, interest on such Bonds shall cease to accrue, such Bonds shall cease to be entitled to any lien, benefit or security under this Trust Agreement and the owners of such Bonds shall have no rights in respect thereof except to receive payment of the redemption price and accrued interest to the redemption date.
(c) Bonds which have been duly called for redemption under the provisions of this Article IV and for the payment of the redemption price of which moneys shall be deposited in the Redemption Fund or otherwise held in trust for the Holders of the Bonds to be redeemed, all as provided in this Trust Agreement, shall not be deemed to be Outstanding under the provisions of this Trust Agreement.

Section 4.05 Selection of Bonds for Redemption; Bonds Redeemed in Part. If less than all of the Bonds are called for redemption, the City will designate the maturities from which the Bonds are to be redeemed. For so long as the Bonds are registered in book entry form and DTC o r a successor securities depository is the sole registered owner of such Bonds, if fewer than all of such Bonds of the same maturity and bearing the same interest rate are to be redeemed, the particular Bonds to be redeemed shall be selected on a pro rata pass-through distribution of principal basis in accordance with the operational arrangements of DTC then in effect, and if the DTC operational arrangements do not allow for redemption on a pro rata pass -through distribution of principal basis, all Bonds to be so redeemed will be selected for redemption in accordance with DTC procedures by lot; provided further that any such redemption must be performed such that all Bonds remaining outstanding will be in authorized denominations.

In connection with any repa yment of principal of the Bonds pursuant to the pass -through distribution of principal as described above, the Trustee will direct DTC to make a pass -through distribution of principal to the owners of the Bonds. A form of Pro Rata Pass -Through Distribution of Principal Notice will be provided to the Trustee that includes a table of factors reflecting the relevant scheduled redemption payments and DTC’s applicable procedures, which are subject to change.

For purposes of calculating pro rata pass-through distributions of principal, “pro rata” means, for any amount of principal or interest to be paid, the application of a fraction to such amounts where: (a) the numerator is equal to the amount due to the owners of the Bonds on a payment date; and (b) the denominator is equal to the total original par amount of the Bonds.

It is the City’s intent that redemption allocations made by DTC with respect to the Bonds be made on a pro rata pass -through distribution of principal basis as described above. However, the City cannot provide any assurance that DTC, DTC’s direct and indirect participants or any other intermediary will allocate the redemption of such Bonds on such basis.

If the Bonds are not registered in book -entry form and if fewer than all of the Bonds of th e same maturity and bearing the same interest rate are to be redeemed, the Bonds of such maturity and bearing such interest rate to be redeemed will be selected on a pro rata basis, and the particular Bonds of such maturity and bearing such interest rate t o be redeemed will be selected by lot, provided that any such redemption must be performed such that all Bonds remaining outstanding will be in authorized denominations.

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Upon surrender of a Bond to be redeemed in part, the Trustee will authenticate for the registered owner a new Bond or Bonds of the same maturity and tenor equal in principal amount to the unredeemed portion of the Bond surrendered.

ARTICLE V

APPLICATION OF PROCEEDS;

SOURCE OF PAYMENT OF BONDS
Section 5.01 Application of Proceeds. The net proceeds of the sale of the Bonds received by the Trustee, $ ____ (consisting of the _____.00 principal amount of the Bonds , less $ _____ in underwriter’s discount), shall be deposited by the Trustee as follows:
(i) $____ shall be deposited into the Costs of Issuance Fund; (ii) $____ shall be transferred to PERS and used to pa y the Current Obligation relating to the Safety Plan;
(iii) $____ shall be transferred to PERS and used to pa y the Current Obligation relating to the Miscellaneous Plan;
(iv) $____ shall be transferred to PERS and used to pa y the Unfunded Liability relating to the Safety Plan; and
(v) $_____ shall be transferred to PERS and used to pay the Unfunded Liability relating to the Miscellaneous Plan.

The City shall provide written payment instructions to the Trustee for the above -described transfers to PERS, upon which the Trustee may conclusively rely. The Trustee may establish and maintain for so long as is necessary one or more temporary funds and accounts under this Trust Agreement, including but not limited to a temporary fund for holding the proceeds of the Bonds.

Section 5.02 Sources of Payment of Bonds; Semi-Annual Payments by the City. (a) The City shall provide for payment of principal or redemption price of and interest on the Bonds from any source of legally available funds of the City. If any Bonds are Outstanding, the City shall, no later than three Business Days preceding each Interest Payment Date beginning ____ 1, 202__, deliver funds to the Trustee for deposit to the Revenue Fund in an aggregate amount equal to the portion of the Annual Debt Service coming due on such Interest Payment Date (less amounts on deposit in the Revenue Fund). (b) The Bonds shall be obligations of the City payable from any lawfully available funds, shall not be limited as to payment to any special source of funds o f the City , and shall be subject to appropriation in accordance with Section 8.01 hereof . The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

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ARTICLE VI

CREATION OF CERTAIN FUNDS AND ACCOUNTS
Section 6.01 Creation of Costs o f Issuance Fund . There is h ereby created a Fund to be held by the Trustee designated “City of Escondido 202__ Taxable Pension Obligation Bonds Costs of Issuance Fund” (the “ Costs of Issuance Fund”). Funds on deposit in the Costs of Issuance Fund shall be used to pay or to reimburse the City for the payment of Costs of Issuance. Amounts in the Costs of Issuance Fund shall be disbursed by the Trustee upon Written Requisition in the form of Exhibit B executed by an Authorized City Representative. Each such Written Requisition of the City shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall have no duty to confirm the accuracy of such facts.

At such time as the City delivers to the Trustee written notice that all Cost s of Issuance have been paid or otherwise notifies the Trustee in writing that no additional amounts from the Costs of Issuance Fund will be needed to pay Costs of Issuance, the Trustee shall transfer all amounts then remaining in the Costs of Issuance Fun d to the Bond Interest Account unless otherwise directed by the City. At such time as no amounts remain in the Costs of Issuance Fund, such Fund shall be closed.

Section 6.02 Creation of Revenue Fund and Certain Accounts . There is hereby created a Fund to be held by the Trustee designated “City of Escondido 202__ Taxable Pension Obligation Bonds Revenue Fund” (the “ Revenue Fund”). There are hereby created in the Revenue Fund two separate Accounts designated “Bond Interest Account” and “Bond Principal Account”. (a) All am ounts received by the Trustee from the City in respect of interest payments on the Bonds shall be deposited in the Bond Interest Account and shall be disbursed to the applicable Bondholders to pay interest on the Bonds. All amounts held at any time in the Bond Interest Account (including amounts deposited pursuant to Section 6.03) shall be held for the security and payment of interest on the Bonds pursuant to this Trust Agreement. If at any time funds on deposit in the Bond Interest Account are insufficie nt to provide for the payment of such interest, the City shall promptly deposit funds to such Account to cure such deficiency. On ____ 2 of each year beginning ____ 2, 202__, so long as no Event of Default has occurred and is continuing, the Trustee shall transfer all amounts on deposit in the Bond Interest Account to the Revenue Fund to be used for any lawful purpose.
(b) All amounts received by the Trustee from the City in resp ect of principal payments on the Bonds shall be deposited in the Bond Principal Account and all amounts in the Bond Principal Account will be disbursed to pay principal on the Bonds pursuant to this Trust Agreement.

If at any time funds on deposit in the Bond Principal Account are insufficient to provide for the payment of such principal, the City shall promptly deposit funds to such Account to cure such deficiency.
(c) The moneys in such Fund s and Accounts shall be held by the Trustee in trust and applied on behalf of the City as herein provided and, pending such application, shall be subject to a lien and charge in favor of the holders of the Bonds issued and Outstanding under this Trust Agreement and for the further security of such holders until paid out or transferred as hereinafter provided.

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Section 6.03 Creation of Redemption Fund. A Fund to be held by the Trustee is hereby created and designated the “City of Escondido 202__ Taxable Pension Obligation Bonds Redemption Fund” (the “ Redemption Fund ”). All moneys deposi ted by the City with the Trustee for the purpose of redeeming Bonds shall be deposited in the Redemption Fund. All amounts deposited in the Redemption Fund shall be used and withdrawn by the Trustee , on behalf of the City, solely for the purpose of redeem ing Bonds in the manner, at the times and upon the terms and conditions specified in this Trust Agreement; provided that, at any time prior to giving such notice of redemption, the Trustee shall, upon receipt of written instructions from an Authorized City Representative, apply such amounts to the purchase of Bonds at public or private sale, as and when and at such prices (including brokerage and other charges) as directed by the City.

Section 6.04 Moneys Held in Redemption Fund . All moneys which shall have been withdrawn from the Revenue Fund and deposited in the Redemption Fund for the purpose of paying any of the Bonds hereby secured, either at the maturity thereof or upon call for redemption, shall be held in trust for the respective Holders of such Bonds.

Section 6.05 Unclaimed Moneys. Any moneys which shall be set aside or deposited in the Redemption Fund, the Bond Principal Accou nt, the Bond Interest Account or any other Fund or Account for the benefit of Holders of Bonds and which shall remain unclaimed by the Holders of such Bonds for a period of one year after the date on which such Bonds shall have become due and payable (or such longer period as shall be required by State law) shall be paid to the City, and thereafter the Holders of such Bonds shall look only to the City for payment and the City shall be obligated to make such payment, but only to the extent of the amounts so received without any interest thereon, and the Trustee and any Paying Agent shall have no responsibility with respect to any of such moneys.

ARTICLE VII

CONCERNING PAYING AGENT
Section 7.01 Paying Agent; Appointment and Acceptance of Duties . The City hereby appoints the Trustee as the Paying Agent for the Bonds.

Section 7.02 Paying Agent - General Responsibilities.
(a) The City may at any time or from time to time appoint a different Paying Agent or Paying Agents for the Bonds, and each Paying Agent, if other than the Trustee, shall be a commercial bank with trust powers and shall designate to the City and the Trustee its principal office and signify its acceptance of the duties and obligati ons imposed upon it hereunder by a written instrument of acceptance delivered to the City under which each such Paying Agent will agree, particularly:
(i) to hold all sums held by it for the payment of the principal of, and premium or interest on, Bonds in tru st for the benefit of the Bondholders until such sums shall be paid to such Bondholders or otherwise disposed of as herein provided; (ii) to keep such books and records as shall be consistent with industry practice, to make such books and records available for inspection by the City and the Trustee at all reasonable times upon reasonable prior notice; and
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(iii) upon the request of the Trustee, to forthwith deliver to the Trustee all sums so held by such Paying Agent.
(b) The Paying Agent shall perform the duties and obligations set forth in this Trust Agreement, and in particular shall hold all sums delivered to it by the Trustee for the payment of principal or premium of and interest on the Bonds for the benefit of the Bondholders until such sums shall be paid to such Bondholders or otherwise disposed of as herein provided. (c) In performing its duties hereunder, the Paying Agent shall be entitled to all of the rights, protections and immunities accorded to the Trustee under the terms of this Trust Agreement.

Section 7.03 Certain Perm itted Acts . Any Fiduciary may become the owner of any Bonds, with the same rights it would have if it were not a Fiduciary. To the extent permitted by law, any Fiduciary may act as depository for, and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders or to effect or aid in any reorganization growing out of the enforcement of the Bonds or this Trust Agreement, whether or not any such committee s hall represent the owners of a majority in Total Bond Obligation of the Bonds then Outstanding.

Section 7.04 Resignation or Removal of Paying Agent and Appointment of Successor. (a) Any Paying Agent may at any time resign and be discharged of the duties and obligations created by this Trust Agreement in accordance with the provisions set forth in this Trust Agreement for the removal of the Trustee by giving at least 60 days’ written notice to the City and the other Fiduciaries. Any Paying Agent may be removed at any time u pon 30 days prior written notice by an instrument filed with such Paying Agent and the Trustee and signed by an Authorized City Representative. Any successor Paying Agent shall be appointed by the City with the approval of the Trustee and shall be a comme rcial bank with trust powers or trust company organized under the laws of any state of the United States, having capital stock and surplus aggregating at least $100,000,000, and willing and able to accept the office on reasonable and customary terms and authorized by law to perform all the duties imposed upon it by this Trust Agreement. (b) In the event of the resignation or removal of any Paying Agent, such Paying Agent shall assign and deliver any moneys and Bonds, including authenticated Bonds, held by it to its successor, or if there be no successor, to the Trustee. In the event that for any reason there shall be a vacancy in the office of any Paying Agent, the Trustee shall act as such Paying Agent.

ARTICLE VIII

COVENANTS OF THE CITY
Section 8.01 Payment of Principal and Interest . The City covenants and agrees that it will duly and punctually pay or cause to be paid the principal, premium, if any, and interest on every Bond at the place and on the dates and in the manner specified herein and in the Bonds, according to the true in tent and meaning thereof, and that it will faithfully do and perform all covenants and agreements contained herein and in the Bonds . T he City agrees that time is of the essence in this Trust Agreement. The obligations of the City under the Bonds, includi ng the obligation to make all Attachment "1"
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payments of principal, premium, if any, and interest when due, are absolute and unconditional, without any right of set-off or counterclaim.

The City shall in each Fiscal Year include in its budget a provision to provide funds in an amount that is sufficient to pay the principal, premium, if any, and interest on the Bonds coming due in such Fiscal Year, but only to the extent that such amounts exceed the amount of available funds then on deposit in the Revenue Fund, and shall m ake annual appropriations for all such amounts. If the amount of such principal, premium, if any, and interest on the Bonds coming due in any Fiscal Year exceeds the sum of amounts budgeted in respect thereof together with amounts then on deposit in the Revenue Fund, then the City shall amend or supplement the budget to provide for such excess amounts. The covenants contained in this Section shall be deemed to be and shall be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Trust Agreement agreed to be carried out and performed by the City.

Section 8.02 Performance of Covenants by City; Authority; Due Execution . The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Trust Agreement, in any and every Bond executed, authenticated and delivered hereunder and in all of its proceedings pertaining hereto. The City covenants that it is duly authorized under the Constitution and laws of the State to issue the Bonds.

Section 8.03 Instruments of Further Assuran ce. The City covenants that it will do, execute, acknowledge and deliver, or cause to be done, executed, acknowledged and delivered such further acts, instruments and transfers as the Trustee may reasonably request for the better assuring and confirming to the Trustee all of the rights and obligations of the City under and pursuant to this Trust Agreement. The City shall, upon the reasonable request of the Trustee, from time to time execute and deliver such further instructions and take such further action as may be reasonable and as may be required to effectuate the purposes of this Trust Agreement or any provisions hereof; provided, however, that no such instruments or actions shall pledge the full faith and credit or the taxing powers of the State.

Section 8.04 No I nconsistent Action . The City covenants that no contract or contracts will be entered into or any action taken by the City which shall be inconsistent with the provisions of this Trust Agreement.

Section 8.05 No Adverse Action . The City covenants that it will not take any action which will have a material adverse effect upon the rights of the Holders of the Bonds.

Section 8.06 Maintenance of Powers . The City covenants that it will at all times use its best efforts to maintain the powers, functions, duties and obligations now repos ed in it pursuant to applicable law and will not at any time voluntarily do, suffer or permit any act or thing the effect of which would be to hinder, delay or imperil either the payment of the indebtedness evidenced by any of the Bonds or the performance or observance of any of the covenants herein contained.

Section 8.07 Covenants of City Binding on Successors.
(a) All covenants, stipulations, obligations and agreements of the City contained in this Trust Agreement shall be deemed to be covenants, stipulations, obligation s and agreements of Attachment "1"
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the City to the full extent authorized or permitted by law. If the powers or duties of the City shall hereafter be transferred by amendment of any provision of the Constitution or any other law of the State or in any other manner there shall be a successor to the City, and if such transfer shall relate to any matter or thing permitted or required to be done under this Trust Agreement by the City, then the entity that shall succeed to such powers or duties of the City shall act and be ob ligated in the place and stead of the City as provided in this Trust Agreement, and all such covenants, stipulations, obligations and agreements herein shall be binding upon such successor or successors thereof from time to time and upon any officer, board , body, district, authority or commission to whom or to which any power or duty affecting such covenants, stipulations, obligations and agreements shall be transferred by or in accordance with law.
(b) Except as otherwise provided in this Trust Agreement, all rights, powers and privileges conferred and duties and liabilities imposed upon the City by the provisions of this Trust Agreement shall be exercised or performed by the City or by such officers, board, body, district, authority or commission as may be req uired by law to exercise such powers or to perform such duties.

Section 8.08 Trust Agreement to Constitute a Contract . This Trust Agreement is executed by the City for the benefit of the Bondholders and constitutes a contract with the Bondholders.

Section 8.09 City to Perform Pursuant to Continuing Disclosure Certificate. The City hereby covenant s and agree s that it will comply with and carry out all of the provisions of t he Continuing Disclosure Certificate. Notwithstanding any other provision of this Trust Agreement, failure of the City to Agreement with the Continuing Disclosure Certificate shall not be considered an Event of Default under this Trust Agreement; provided, however, that the obligations of t he City to comply with the provisions of the Continuing Disclosure Certificate shall be enforceable by any Participating Underwriter or any Holder of Outstanding Bonds, or by the Trustee on behalf of the Holders of Outstanding Bonds; provided, further, that the Trustee shall not be required to take any enforcement action whatsoever except at the written direction of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding who shall have provided the Trustee with security and indemnity to its satisfaction, including without limitation, attorney’s fees and expenses. The Participating Underwriters’, Holders’ and Trustee’s rights to enforce the provisions of the Continuing Disclosure Certificate shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the City’s obligations under the Continuing Disclosure Certificate. Notwithstanding the foregoing, the City shall be entitled to amend or rescind the Continuing Disclosure Certificate to the extent permitted by law.

ARTICLE IX

INVESTMENTS
Section 9.01 Investments Authorized. Money held by the Trustee in any fund or account hereunder shall be invested by the Trustee in Permitted Investments pending application as provided herein solely at the prior written direction of an Authorized City Representative, shall be registered in the name of the Trustee where applicable, as Trustee, and shall be held by the Trustee. The City shall direct the Trustee prior to 12:00 p.m. Pacific time on th e last Business Day before the date on which a Permitted Investment matures or is redeemed as to the reinvestment of the proceeds thereof.

In the absence of such direction, the Trustee shall hold moneys uninvested. The Trustee may rely on Attachment "1"
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the City’s cert ification in such investment instructions that such investments are permitted by law and by any policy guidelines promulgated by the City. Money held in any fund or account hereunder may be commingled for purposes of investment only.

The Trustee may, with the prior written approval of an Authorized City Representative, purchase from or sell to itself or any affiliate, as principal or agent, investments authorized by this Section 9.01. Any investments and reinvestments shall be made after giving full consi deration to the time at which funds are required to be available hereunder and to the highest yield practicably obtainable giving due regard to the safety of such funds and the date upon which such funds will be required for the uses and purposes required by this Trust Agreement. The Trustee or any of its affiliates may act as agent in the making or disposing of any investment and may act as sponsor or advisor with respect to any Permitted Investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately.

The City acknowledges that to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokera ge confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the City with periodic cash transaction statements which shall include details for all investment transactions made by the Trustee hereunder.

Section 9.02 Reports. The Trustee shall furnish at least quarterly to the City a report (which may be in the form of its regular statements) of all investments made by the Trustee and of all amounts on deposit in each fund and account maintained hereunder.

Section 9.03 Valuation and Disposition of Investments . For the purpose of determining the amount in any fund or account hereunder, all Permitted Investments shall be valued at the market value thereof not later than July 1 of each year. With the prior written approval of an Authorized City Representative, the Trustee may sell at the best price obtainable or present for redemption, any Permitted Investment so purchased by the Trustee whenever it shall be necessary in order to provide money to meet any required payment, transfer, withdrawal or disbursement from any fund or account hereunder, and the Trustee shall not be liable or responsible for any loss resulting from such investment or sale, except any loss resulting from its own negligence or willful misconduct.

Section 9.04 Application of Investment Earnings . Investments in any Fund or Account shall be deemed at all times to be a part of such Fund or Account, an d any profit realized from such investment shall be credited to such Fund or Account and any loss resulting from such investment shall be charged to such Fund or Account. Interest earnings on investments in a ny Fund or Account shall be deposited in the Bond Interest Account of the Revenue Fund.

ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Bonds; Release of Trust Agreement . Bonds or portions thereof (such portions to be in an Authorized Denomination) which have been paid in full or which are deemed to have been paid in full shall no longer be entitled to the benefits of this Trust Agreement except for the purposes of payment from moneys and Defeasance Securities. When all Bonds which have been issued under this Trust Agreement h ave been paid in full or are deemed to have been paid in full, and all other sums payable hereunder by the City, including all necessary and Attachment "1"
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proper fees, compensation and expenses of the Trustee and any Paying Agents, have been paid or are duly provided fo r, then the Trustee shall cancel, discharge and release this Trust Agreement, shall execute, acknowledge and deliver to the City such instruments of satisfaction and discharge or release as shall be requisite to evidence such release and such satisfaction and discharge and shall assign and deliver to the City any amounts at the time subject to this Trust Agreement which may then be in the Trustee’s possession, except funds or securities in which such funds are invested and held by the Trustee or the Paying Agents for the payment of the principal, premium, if any, and interest on the Bonds.

Section 10.02 Bonds Deemed Paid.
(a) A Bond shall be deemed to be paid within the meaning of this Article X and for all purposes of this Trust Agreement when : (i) payment with respect there to of the principal, interest and premium, if any, either : (1) shall have been made or caused to be made in accordance with the terms of the Bonds and this Trust Agreement ; or (2) shall have been provided for, as certified to the Trustee by a Consultant wh o is a certified public accountant, by irrevocably depositing with the Trustee in trust and irrevocably setting aside exclusively for such payment: (x) moneys sufficient to make such paymen t; and/or (y) Defeasance Securities maturing as to principal and interest in such amounts and at such times as will insure the availability of suffici ent moneys to make such payment; and (ii) all necessary and proper fees, compensation and expenses of the Trustee and any Paying Agents pertaining to the Bonds with respect to which such deposit is made shall have been paid or provision made for the payment thereof. At such times as Bonds shall be deemed to be paid hereunder, such Bonds shall no longer be secured by or entitled to the benefits of this Trust Agreement, except for the purposes of payment from such moneys and Defeasance Securities. (b) Notwithstanding the foregoing paragraph, no deposit under clause (i)(2) of the immediately preceding paragraph shall be deemed a payment of such Bonds until : (i) proper notice of redemption of such Bonds shall have been given in accordance with Section 4.01, or in the event that such Bonds are not to be redeemed within the next succeeding 60 days, until the City shall have given the Trustee irrevocable instructions to notify, as soon a s practicable, the holders of the Bonds in accordance with Section 4.01, that the deposit required by clause (a)(i)(2) above has been made with the Trustee and that such Bonds are deemed to have been paid in accordance with this Article X and stating the m aturity or redemption date upon which moneys are to be available for the payment of the principal of, premium, if any, and unpaid interest on such Bonds; or (ii) the maturity of such Bonds.

ARTICLE XI

DEFAULTS AND REMEDIES
Section 11.01 Events of Default . Each of the following events shall constitute and is referred to in this Trust Agreement as an “Event of Default”:
(a) a failure to pay the principal or premium, if any, on any of the Bonds when the same shall become due and payable at maturity or upon redemption; (b) a failure to pay any installment of interest on any of the Bonds when such interest shall become due and payable;
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(c) a failure by the City to observe and perform any covenant, condition, agreement or provision (other than as specified in clauses (a) and (b) of this Section 11.01) contained in the Bonds or in this Trust Agreement on the part of the City to be observed or performed, which failure shall continue for a period of 60 days after written notice, specifying such failure and requesting that it be remedied, shall have be en given to the City by the Trustee; provided, however, that the Trustee shall be deemed to have agreed to an extension of such period if corrective action is initiated by the City within such period and is being diligently pursued; or (d) if the City files a petition in voluntary bankruptcy, for the composition of its affairs or for its corporate reorganization under any state or federal bankruptcy or insolvency law, or makes an assignment for the benefit of creditors, or admits in writing to its insolvency or inability to pay debts as they mature or consents in writing to the appointment of a trustee or receiver for itself.

Upon its actual knowledge of the occurrence of any Event of Default, the Trustee shall immediately give written notice thereof to the City.

Section 11.02 Remedies.
(a) Upon the occurrence and continuance of any Event of Default, the Trustee in its discretion may, and shall upon the written direction of the holders of a majority of the Total Bond Obligation of the Bonds then Outstanding and, in each case, receipt of indemnity to its satisfaction, in its own name and as the Trustee of an express trust:
(1) by mandamus, or other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders hereunder, as the case may be, and require the Cit y to carry out any agreements with or for the benefit of the Bondholders and to perform its or their duties under the Refunding Law or any other law to which it is subject and this Trust Agreement; provided that any such remedy may be taken only to the ext ent permitted under the applicable provisions of this Trust Agreement;
(2) bring suit upon the defaulted Bonds;
(3) commence an action or suit in equity to require the City to account as if it were the trustee of an express trust for the Bondholders; or (4) by action or suit in equity enjoin any acts or things which may be unlawful or in violation of the rights of the Bondholders hereunder. (b) The Trustee shall be under no obligation to take any action with respect to any Event of Default unless the Trustee has actual kno wledge of the occurrence of such Event of Default.

Section 11.03 Restoration to Former Position . In the event that any proceeding taken by the Trustee to enforce any right under this Trust Agreement shall have been discontinued or abandoned for any reason, or shall hav e been determined adversely to the Trustee, then the City, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, respectively, and all rights, remedies and powers of the Trustee shall continue as though no such proceeding had been taken.

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Section 11.04 Bondholders’ Right to Direct Proceedings on their Behalf . Anything in this Trust Agreement to the contrary notwithstanding, Holders of a majority in Total Bond Obligation shall have the right, at any time, by an instrument in writing executed and delivered to the Trustee, to direct the time, method and place of conducting all remedial proceedings on their behalf available to the Trustee under this Trust Agreement to be taken in connection with the enforcement of the terms of this Trust Agreement or exercising any trust or power conferred on the Trustee by this Trust Agreement; provided that such direction shall not be otherwise than in accordance with the provisions of the law and this Trust Agreement and that there shall have been provided to the Trustee security and indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred as a result thereof by the Trustee; provided further that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Bondholders not parties to such direction.

Section 11.05 Limitation on Bondholders’ Rights to Institute Proceedings. No owner of any Bond shall have the right to institute any suit, action or proceeding at law in equity, for the protection or enforcement of any right or remedy under this Trust Agreement, or applicable law with respect to such Bond, unless : (a) such owner shall have given to the Trustee written notice of the occurrence of an Event of Default; (b) the owners of not less than a majority in Total Bond Obligation shall have made written request upon the Trustee to exercise the powers heretofore granted or to institute such suit, action or proceeding in its own name; (c) such owner or said owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee sha ll have refused or failed to comply with such request for a period of 60 days after such written request shall have been received by and said tender of indemnity shall have been made to, the Trustee ; and (e) the Trustee shall not have received contrary directions from the owners of a majority in aggregate principal amount of the Total Bond Obligation.

Section 11.06 No Impairment of Right to Enforce Payment . Notwithstanding any other provision in this Trust Agreement, the right of any Bondholder to receive payment of the principal of and interest on such Holder’s Bond, on or after the respective due dates expressed therein, or to institute suit for the enforcement of any such payment on or after such respective date, shall not be impaired or affected without the consent of such Bondholder.

Section 11.07 Proceedings by Trustee Without Possession of Bonds . All rights of action under this Trust Agreement or under any of the Bonds secured hereby which are enforceable by the Trustee may be enforced by it without the possession of any of the Bonds, or the production thereof at the trial or other proceedings relative thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the equal and ratable benefit of the Bondholders, as the case may be, subject to the provisions of this Trust Agreement.

Section 11.08 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Trustee or to Bondholders is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumula tive, and shall be in addition to every other remedy given hereunder, or now or hereafter existing at law or in equity or by statute; provided, however, that any conditions set forth herein to the taking of any remedy to enforce the provisions of this Trus t Agreement or the Bonds shall also be conditions to seeking any remedies under any of the foregoing pursuant to this Section 11.08.

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Section 11.09 No Waiver of Remedies . No delay or omission of the Trustee or of any Bondholder to exercise any right or power accruing up on any default shall impair any such right or power or shall be construed to be a waiver of any such default, or an acquiescence therein and every power and remedy given by this Article XI to the Trustee and to the Bondholders, respectively, may be exercised from time to time and as often as may be deemed expedient.

Section 11.10 Application of Moneys.
(a) Any moneys received by the Trustee for the benefit of Bondholders, by any receiver or by any Bondholder pursuant to any right given or action taken under the provisions of this Article XI, after payment of the costs and expenses of the proceedings resulting in the collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the Trustee (including without limitation reasonable fees and re asonable expenses of its attorneys), shall be deposited in the Revenue Fund and all moneys so deposited in the Revenue Fund during the continuance of an Event of Default shall be applied : (i) first, to the payment to the persons entitled thereto of all installments of interest then due on the Bonds, with interest on overdue installments, if lawful, at the rate per annum borne by the Bonds, as the case may be, in the order of maturity of the installments of such interest (if the amount available for such int erest installments shall not be sufficient to pay in full any particular installment of interest, then to the payment ratably, according to the amounts due on such installment), and if the amount available for such interest shall not be sufficient to make payment thereof, then to the payment thereof ratably according to the respective aggregate amounts due; and (ii) second, to the payment to the persons entitled thereto of the unpaid principal, as applicable, of any of the Bonds which shall have become due with interest on such Bonds at their respective rate from the respective dates upon which they became due (if the amount available for such unpaid principal and interest shall not be sufficient to pay in full Bonds due on any particular date, together with such interest, then to the payment ratably, according to the amount of principal and interest due on such date, in each case to the persons entitled thereto, without any discrimination or privilege among Holders of Bonds), and, if the amount available for such principal and interest shall not be sufficient to make full payment thereof, then to the payment thereof ratably according to the respective aggregate amounts due.
(b) Whenever moneys are to be applied pursuant to the provisions of this Section 11.10, such moneys shall be applied at such times, and from time to time, as the Trustee shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. Whenever the Trustee shall apply such funds, it shall fix the date (which shall be an Interest Payment Date unless it shall deem another date more suitable) upon which such application is to be made and upon such date interest on the amounts to be paid on such date shall cease to accrue. The Trustee shall give notice of the deposit with it of any such moneys and of the fixing of any such date by Mail to all Bondholders and shall not be required to make payment to any Bondholder until such Bonds s hall be presented to the Trustee for appropriate endorsement or for cancellation if fully paid.

Section 11.11 Severability of Remedies . It is the purpose and intention of this Article XI to provide rights and remedies to the Trustee and the Bondholders which may be law fully granted under the provisions of applicable law, but should any right or remedy herein granted be held to be unlawful, the Trustee and the Bondholders shall be entitled, as above set forth, to every other right and remedy provided in this Trust Agreement and by applicable law.

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Section 11.12 Additional Events of Default and Remedies . So long as any Bonds are Outstanding, the Events of Default and remedies as set forth in this Article XI may be supplemented with additional Events of Default and remedies as set forth from time to time in a supplemental agreement.

ARTICLE XII

TRUSTEE; REGISTRAR
Section 12.01 Acceptance of Trusts. The Trustee hereby accepts and agrees to execute the trusts specifically imposed upon it by this Trust Agreement, but only upon the additional terms set forth in this Article XII, to all of which the City agrees and the respective Bondholders agree by their acceptance of delivery of any of the Bonds.

Section 12.02 Duties of Trustee.
(a) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are specifically set forth in this Trust Agreement and no others; and
(ii) in the absence of negligence on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Trust Agreement. (b) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this parag raph does not limit the effect of paragraph (b) of this Section 12.02;
(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee s hall not be liable with respect to any action it takes or fails to take in good faith in accordance with a direction received by it from Bondholders or the City in the manner provided in this Trust Agreement; and
(iv) no provision of this Trust Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (c) Every provision of this Trust Agreement that in any way relates to the Trustee is subject to all the paragraphs of this Section 12.02. (d) The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity reasonably satisfactory to it against any loss, liability or expense. (e) The Trustee shall not be liable for interest on any cash held by it except as the Trustee may agree with the City.

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(f) For all purposes hereunder, the Trustee shall not be deemed to have notice or knowledge of any event (including any default or event of default) unle ss a Responsible Officer of the Trustee has received written notice of such event which references this Trust Agreement or the City. The delivery of reports and other documents and information to the Trustee hereunder is for informational purposes only an d the Trustee’s receipt of such documents and information shall not constitute constructive notice of any information contained therein or determinable from information contained therein.

Section 12.03 Rights of Trustee.
(a) The recitals of facts contained herein and in the Bonds shall be taken as statements of the City, and the Trustee assumes no responsibility for the correctness of the same (other than the certificate of authentication of the Trustee on each Bond), and make s no representations as to the validity or sufficiency of this Trust Agreement or of the Bonds or of any Permitted Investment and shall not incur any responsibility in respect of any such matter, other than in connection with the duties or obligations expr essly assigned to or imposed upon it herein or in the Bonds. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performanc e of its duties hereunder, except for its own negligence, willful misconduct or breach of the express terms and conditions hereof. The Trustee and its directors, officers, employees or agents may in good faith buy, sell, own, hold and deal in any of the B onds and may join in any action which any Holder of a Bond may be entitled to take, with like effect as if the Trustee was not the Trustee under this Trust Agreement.
(b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the opinion of such counsel shall be authorization for any action taken or not taken in r eliance on such opinion, but the Trustee shall be answerable for the negligence or misconduct of any such attorney, agent or receiver selected by it.
(c) No permissive power, right or remedy conferred upon the Trustee hereunder shall be construed to impose a duty to exercise such power, right or remedy. (d) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document , but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the City, personally or by agent or attorney. (e) The Trustee shall not be responsible for the application or handling by the City of any moneys transferred to or pursuant to any requisition or request of the City in accordance with the terms and conditions hereof.
(f) Whether or not therein expressly so provided, every provision of this Trust Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article XII.

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(g) The Trustee shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, facsimile transmission, electronic mail, opinion, note or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
(h) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
(i) The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“ Instructions”) given pursuant to this Trust Agreement and delivered using the following communications methods: e -mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder (collectively, “ Electronic Means”); provided, however, that the City shall provide to the Trustee an incumbency certificate listing Authorized City Representatives with the authority to provide such Instructions and containing specimen signatures of such Authorized City Representatives, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon su ch Instructions, the Trustee’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized City Representative listed on the incumbency certificate provided to the Trustee have been sent by such Authorized City Representative. The City shall be responsible for ensuring that only authorized persons transmit such Instructions to the Trustee and the City is solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt thereof. The Trus tee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions, notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interce ption and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; a nd (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.

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Section 12.04 Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Bonds and may ot herwise deal with the City with the same rights it would have if it were not Trustee. Any Paying Agent or other agent may do the same with like rights.

Section 12.05 Trustee’s Disclaimer . The Trustee makes no representations as to the validity or adequacy of this Trus t Agreement or the Bonds, it shall not be accountable for the City’s use of the proceeds from the Bonds paid to the City and it shall not be responsible for any statement in any official statement or other disclosure document or in the Bonds other than its certificate of authentication.

Section 12.06 Notice of Defaults . If an event occurs which with the giving of notice or lapse of time or both would be an Event of Default, and if the event is continuing and if it is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Bondholder notice of the event within 90 days after it occurs. Except in the case of a default in payment or purchase on any Bonds, the Trustee may withhold the notice to Bondholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Bondholders.

Section 12.07 Compensation of Trustee . The C ity shall from time to time, but only in accordance with a written agreement in effect with the Trustee, pay to the Trustee reasonable compensation for its services and shall reimburse the Trustee for all of its reasonable advances and expenditures, including but not limited to advances to and fees and expenses of independent appraisers, accountants, consultants, co unsel, agents and attorneys -at-law or other experts employed by it in the exercise and performance of its powers and duties hereunder , including the enforcement of any provision hereunder . The Trustee shall not otherwise have any claims or lien for paymen t of compensation for its services against any other moneys held by it in the funds or accounts established hereunder, except as provided in Section 11.10, but may take whatever legal actions are lawfully available to it directly against the City. To the extent permitted by applicable law, the City agrees to indemnify and save the Trustee, its officers, employees, directors and agents, harmless against any costs, expenses, claims or liabilities whatsoever, including, without limitation, fees and expenses o f its attorneys, that it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The agreement contained in this Section shall survive the payment of the Bonds, the discharge of this Trust Agreement and the appointment of a successor trustee.

Section 12.08 Eligibility of Trustee . This Trust Agreement shall always have a Trustee that is a trust company, a bank or an association having trust powers and is organized and doing business under th e laws of the United States or any state or the District of Columbia, is subject to supervision or examination by United States, state or District of Columbia authority and has a combined capital and surplus of at least $100,000,000 as set forth in its mos t recent published annual report of condition.

Section 12.09 Replacement of Trustee.
(a) The Trustee may resign as trustee hereunder by notifying the City in writing prior to the proposed effective date of the resignation. The Holders of a majority in Total Bond Obligation of the Bonds may remove the Trustee by notifying the removed Trustee and may appoint a successor Trustee with the City’s consent. The City may remove the Trustee, by notice in writing Attachment "1"
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delivered to the Trustee 30 days prior to the proposed removal date; provided, however, that the City shall have no right to remove the Trustee during any time when an Event of Default has occurred and is continuing unless : (i) the Trustee fails to co mply with the foregoing Section; (ii) the Trustee is adjudged to be a bankrupt or an insolvent; (iii) the Trustee otherwise becomes incapable of acting; or (iv) the City determines that the Trustee’s services are no longer satisfactory to the City. No resignation or removal of the Trustee under this Section shall be effective until a new Trustee has taken office. If the Trustee resigns or is removed or for any reason is unable or unwilling to perform its duties under this Trust Agreement, the City shall promptly appoint a successor Trustee. (b) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the City. Immediately thereafter, the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee shall then (but only then) become effective and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Trust Agreement. If a successor Trustee does not take office within 60 days after the retiring Trustee delivers notice of resignation or the City delivers notice of removal, the retiring Trustee, the City or the Holders of a majority in Total Bond Obligation of the Bonds may petition any court of competent jurisdiction for the appointment of a successor Trustee.

Section 12.10 Successor Trustee or Agent by Merger . If the Trustee, any Paying Agent or Registrar con solidates with, merges or converts into, or transfers all or substantially all its assets (or, in the case of a bank or trust company, its corporate trust business) to, another corporation, the resulting, surviving or transferee corporation without any fur ther act shall be the successor Trustee, Paying Agent or Registrar.

Section 12.11 Registrar. The City shall appoint the Registrar for the Bonds and may from time to time remove a Registrar and name a replacement upon notice to the Trustee. The City hereby appoints the Trustee as Registrar. Each Registrar, if other than the Trustee, shall designate to the Trustee, the Paying Agent, and the City its principal office and signify its acceptance of the duties imposed upon it hereunder by a written instrument of acceptance delivered to the City and the Trustee under which such Registrar will agree, particularly, to keep such books and records as shall be consistent with prudent industry practice and to make such books and records available for inspection by the City, the Trustee and the Paying Agent at all reasonable times.

Section 12.12 Other Agents. The City or the Trustee may from time to time appoint other agents to perform duties and obligations under this Trust Agreement which agents may include, but not be limited to, authenticating agents all as provided by resolution of the City.

Section 12.13 Several Capacities . Anything in this Trust Agreement to the contrary notwithstanding, the same entity may serve hereunder as the Trustee, Registrar and any other agent as appointed to perform duties or o bligations under this Trust Agreement or an escrow agreement, or in any combination of such capacities, to the extent permitted by law.

Section 12.14 Accounting Records and Reports of Trustee. (a) The Trustee shall at all times keep, or cause to be kept, proper books of record and account in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds and all Funds and Accounts established pursuant to this Trust Agreement and held by the Trustee. Such books of record and account shall be available for Attachment "1"
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inspection by the City and any Bondholder, or his or her agent or representative duly authorized in writing, upon prior reasonable notice, at reasonable hours and under reasonable circumstances. (b) The Trustee shall file an d furnish to the City and to each Bondholder who shall have filed his or her name and address with the Trustee for such purpose (at such Bondholder’s cost), on an annual basis (or, with respect to the City, such other interval that the City may request), a complete financial statement (which may be its regular account statements and which need not be audited) covering receipts, disbursements, allocation and application of moneys in any of the funds and accounts established pursuant to this Trust Agreement for the preceding year.

Section 12.15 No Remedy Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other re medy given hereunder, or now or hereafter existing at law or in equity or by statute.

ARTICLE XIII

MODIFICATION OF THIS TRUST AGREEMENT
Section 13.01 Limitations. This Trust Agreement shall not be modified or amended in any respect subsequent to the first delivery of fully execut ed and authenticated Bonds except as provided in and in accordance with and subject to the provisions of this Article XIII.

Section 13.02 Supplemental Agreements Not Requiring Consent of Bondholders. (a) The City may, from time to time and at any time , without the consent of or notice to the Bondholders, execute and deliver supplemental agreements supplementing and/or amending this Trust Agreement as follows:
(i) to cure any defect, omission, inconsistency or ambiguity in this Trust Agreement;
(ii) to add to the covenants and agreements of the City in this Trust Agreement other covenants and agreements, or to surrender any right or power reserved or conferred upon the City, and which shall not adversely affect the interests of the Bondholders; (iii) to confirm, as furt her assurance, any interest of the Trustee in and to the Funds and Accounts held by the Trustee or in and to any other moneys, securities or funds of the City provided pursuant to this Trust Agreement or to otherwise add security for the Bondholders; (iv) to comply with the requirements of the Trust Indenture Act of 1939, as from time to time amended;
(v) to modify, alter, amend or supplement this Trust Agreement in any other respect which, in the judgment of the City, is not materially adverse to the Bondholders; (vi) to qualify the Bonds for a rating or ratings by any Rating Agency; and (vii) to authorize the issuance of Additional Bonds in accordance with this Trust Agreement.

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(b) Before the City shall, pursuant to this Section 13.02, execute any supplemental agreement, there shall have been delivered to the City an Opinion of Bond Counsel to the effect that such supplemental agreement : (i) is authorized or permitted by this Trust Agreement and the Refunding Law and complies with the provisions thereof and conditions precedent thereunder; and (ii) will, upon the execution and delivery thereof, be valid and binding upon the City in accordance with its terms.

Section 13.03 Supplemental Agreement Requiring Consent of Bondholders. (a) Except for any supplemental agreement entered into pursuant to Section 13.02, the Holders of not less than a majority in Total Bond Obligation shall have the right from time to time to consent to and approve the execution by the City of any supplemental agreement deemed necessary or desirable by the City for the purposes of modifying, altering, amending, supplementing or rescinding, in any particular, any of the terms or provisions contained in this Trust Agreement or in a supplemental agreement; provided, however, that, unless approved in writing by the Holders of all of the Bonds then Outstanding, nothing contained herein shall permit or be construed as permitting: (i) a change in the times, amounts or currency of payment of the principal of or interest on any Outstanding Bonds; or (ii) a reduction in the principal amount or redemption price of any Outstanding Bonds or the rate of interest thereon; and provided that nothing contained herein, including the provisions of Section 13.03(b) below, shall, unless approved in writing by the Holders of all the Bonds then Outstanding, permit or be construed as permitting : (1) a preference or priority of any Bond or Bonds over any other Bond or Bonds ; or (2) a reduction in the aggregate principal amount of Bonds the c onsent of the Holders of which is required for any such supplemental agreement. Nothing herein contained, however, shall be construed as making necessary the approval by Holders of the execution of any supplemental agreement as authorized in Section 13.02. (b) If at any time the City shall desire to enter into any supplemental agreement for any of the purposes of this Section 13.03, the City shall cause notice of the proposed execution of the supplemental agreement to be given by Mail to all Holders. Such notice as prepared by the City shall briefly set forth the nature of the proposed supplemental agreement and shall state that a copy thereof is on file at the office of the City for inspection by all Holders. (c) Within two weeks after the date of the first maili ng of such notice, the City may execute and deliver such supplemental agreement in substantially the form described in such notice, but only if there shall have first been delivered to the City : (i) the required consents, in writing, of Holders; and (ii) an Opinion of Bond Counsel stating that such supplemental agreement is authorized or permitted by this Trust Agreement and other applicable law, complies with their respective terms and, upon the execution and delivery thereof, will be valid and binding upo n the City in accordance with its terms.
(d) If Holders of not less than the percentage of Bonds required by this Section 13.03 shall have consented to and approved the execution and delivery thereof as herein provided, no Holders shall have any right to object to the adoption of such supplemental agreement, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution and delivery thereof, or to enjoin or restrain th e City from executing the same or from taking any action pursuant to the provisions thereof.

Section 13.04 Effect of Supplemental Agreements . Upon execution and delivery of any supplemental agreement pursuant to the provisions of this Article XIII, this Trust Agreement and all Attachment "1"
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supplemental agreements shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Trust Agreement and all supplemental agreements of the City, the Trustee, the R egistrar, any Paying Agent and all Holders shall thereafter be determined, exercised and enforced under this Trust Agreement and all supplemental agreements, subject in all respects to such modifications and amendments.

Section 13.05 Supplemental Agreements to be Part o f this Trust Agreement . Any supplemental agreement adopted in accordance with the provisions of this Article XIII shall thereafter form a part of this Trust Agreement or the supplemental agreement which they supplement or amend, and all of the terms and c onditions contained in any such supplemental agreement as to any provision authorized to be contained therein shall be and shall be deemed to be part of the terms and conditions of this Trust Agreement which they supplement or amend for any and all purposes.

ARTICLE XIV

MISCELLANEOUS PROVISIONS
Section 14.01 Parties in Interest . Except as herein otherwise specifically provided, nothing expressed or implied in this Trust Agreement is intended or shall be construed to confer upon any person, firm or corporation other than the City, the Paying Agent, the Trustee and the Bondholders any right, remedy or claim under or by reason of this Trust Agreement, this Trust Agreement being intended to be for the sole and exclusive benefit of the City, the Paying Agent, the Trustee and the Bondholders.

Section 14.02 Severability. In case any one or more of the provisions of this Trust Agreement, or of any Bonds issued hereunder shall, for any reason, be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this T rust Agreement or the Bonds, and this Trust Agreement and any Bonds issued hereunder shall be construed and enforced as if such illegal or invalid provisions had not been contained herein or therein.

Section 14.03 No Personal Liability of City Officials; Limited Liabili ty of City to Bondholders.
(a) No covenant or agreement contained in the Bonds or in this Trust Agreement shall be deemed to be the covenant or agreement of any present or future official, officer, agent or employee of the City in their individual capacity, and neither the members of the City Council of the City nor any person executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. (b) Except for the payment when due of the payments and the observance and performance of the other agreements, conditions, covenants and terms required to be performed by it contained in this Trust Agreement, the City shall not have any obligation or liability to the Bondholders with respect to this Trust Agreement or the preparation, execution, delivery, transfer, exchange or cancellation of the Bonds or the receipt, deposit or disbursement of the payments by the Trustee, or with respect to the performance by the Trustee of any obligation required to be performed by it contained in this Trust Agreement.

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Section 14.04 Execution of Instruments; Proof of Ownership. (a) Any request, direction, consent or other instrument in writing required or permitted by this Trust Agreement to be signed or executed by Bondholder s or on their behalf by an attorney-in-fact may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Bondholders in person or by an agent or attorney -in-fact appointed by an instrument in writing or as provided in the Bonds. Proof of the execution of any such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Trust Agreement and shall be conclusive in favor of the Trustee with regard to any action taken by it under such instrument if made in the following manner:
(i) the fact and date of the execution by any person of any such instrument may be proved by the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take acknowledgments within such jurisdic tion, to the effect that the person signing such instrument acknowledged before him the execution thereof, or by an affidavit of a witness to such execution; and
(ii) the ownership of Bonds shall be proved by the registration books kept under the provisions of Section 3.01 hereof;
(b) Nothing contained in this Section 14.04 shall be construed as limiting the Trustee to such proof. The Trustee may accept any other evidence of matters herein stated which it may deem sufficient. Any request, consent of, or assignment by any Bondholder shall bind every future Bondholder of the same Bonds or any Bonds issued in lieu thereof in respect of anything done by the Trustee or the City in pursuance of such request or consent.

Section 14.05 Governing Law; Venue . This Trust Agreement is made in the State under the Constitution and laws of the State and is to be so construed. If any party to this Trust Agreement initiates any legal or equitable action to enforce the terms of this Trust Agreement, to declare the rights of the parties under this Trust Agreement or which relates to this Trust Agreement in any manner, each such party agrees that the place of making and for performance of this Trust Agreement shall be the City, and the proper venue for any such action is the Superior Court of the St ate of California, County of San Diego.

Section 14.06 Notices.
(a) Any notice, request, direction, designation, consent, acknowledgment, certification, appointment, waiver or other communication required or permitted by this Trust Agreement or the Bonds must be in writing e xcept as expressly provided otherwise in this Trust Agreement or the Bonds.
(b) The Trustee shall give written notice to the Rating Agencies if at any time :
(i) a successor Trustee is appoi nted under this Trust Agreement; (ii) there is any am endment to this Trust Agreement; (iii) Bonds are to be re deemed pursuant to Section 4.01; (iv) Bonds are defeased prior to maturity pursuant to Article X; or (v) the Bonds shall no longer be Book -Entry Bonds.

Notice in the case of an event referred to in clause (ii) here of shall include a copy of any such amendment.

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(c) Except as otherwise required herein, all notices required or authorized to be given to the City, the Trustee and Paying Agent, and the Rating Agencies pursuant to this Trust Agreement shall be in writing and shall be sent by registered or certified mail, postage prepaid, to the following addresses:

1. if to the City, to:

City of Escondido
201 North Broadway
Escondido, California 92025
Attention: Finance Director

2. if to the Trustee and Paying Agent, to:

The Bank of New York Mellon Trust Company, N.A.
633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust

3. if to S&P, to:

S&P Global Ratings
55 Water Street
New York, New York 10041

or to such other addresses as may from time to time be furnished to the parties, effective upon the receipt of notice thereof given as set forth above.

Section 14.07 Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Trust Agreement, shall not be a Business Day, such payment may, unless otherwise provided in this Trust Agreement be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nomi nal date provided in this Trust Agreement, and no interest shall accrue for the period from and after such nominal date.

Section 14.08 Captions. The captions and table of contents in this Trust Agreement are for convenience only and do not define or limit the scope or intent of any provisions or Sections of this Trust Agreement.

Section 14.09 Counterparts. This Trust Agreement may be signed in several counterparts, each of which will be an original, but all of them together constitute the same instrument.

Section 14.10 OFAC.
(a) The City covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government (including the Office of Foreign Assets Control of the United States Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”).

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(b) The City covenants and represents that neither it nor any of their affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Agreement : (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions ; (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (iii) in any other manner that will result in a violation of Sanctions by any person.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

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IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement by their officers thereunto duly authorized as of the date first above written.

CITY OF ESCONDIDO
By:

City Manager
ATTEST:

City Clerk

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:

Authorized Officer

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EXHIBIT A

FORM OF BOND
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the City or its agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER ,

PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

No. ____ $_____________

CITY OF ESCONDIDO
PENSION OBLIGATION BONDS, SERIES 202__
(FEDERALLY TAXABLE)

Neither the faith and credit nor the taxing power of the State of California or any public agency is pledged to the payment of the principal of, or interest on, this Bond.

Maturity
Interest Rate
Per Annum
Dated
Date CUSIP
____ 1, 20____ _____% ____ __, 202__ ____ ___
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _________________ AND NO/100 DOLLARS THE CITY OF ESCONDIDO, a municipal corporation and general law city duly that is organized and validly existing under and pursuant to the Constitution and the laws of the State of California (the “City”), for value received, hereby promises to pay to the registered owner named above or registered assigns, on the maturity date specified above, the principal sum specified above together with i nterest on such principal sum at the rates determined as herein provided on each Interest Payment Date (hereinafter defined) from the Interest Payment Date next preceding the date of authentication and delivery thereof, unless : (i) such date of authenticat ion is an Interest Payment Date, in which event interest shall be payable from such date of authentication; ( ii) it is authenticated after a Record Date and before the close of business on the immediately following Interest Payment Date, in which event int erest thereon shall be payable from such Interest Payment Date; or (iii) it is authenticated prior to the close of business on the first Record Date, in which event interest thereon shall be payable from its Dated Date; provided, however, that if at the ti me of authentication of any Attachment "1"
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Bond interest thereon is in default, interest thereon shall be payable from the Interest Payment Date to which interest has previously been paid or made available for payment or, if no interest has been paid or made available for payment, from its Dated Date . The principal hereof and premium, if any, hereon are payable when due upon presentation hereof at the Principal Office of The Bank of New York Mellon Trust Company, N.A., as trustee (together with any successor as trustee u nder the Trust Agreement (hereinafter defined), the “Trustee”), in lawful money of the United States of America.

This Bond is one of a duly authorized issue of City of Escondido Pension Obligation Bonds, Series 202__ (Federally Taxable) (the “Bonds”) of the designation indicated on the face hereof. Said authorized issue of Bonds is limited in aggregate principal amount as provided in the Trust Agreement and consists or may consist of one or more series of varying denominations, dates, maturities, interest rates and other provisions, as provided in the Trust Agreement, all issued and to be issued pursuant to the provisions of Articles 10 and 11 (commencing with Section 53570 of Chapter 3 of Division 2 of Title 5 of the California Government Code (the “ Refunding Law”). This Bond is issued pursuant to the Trust Agreement dated as of _____ 1, 202__ by and between the City and The Bank of New York Mellon Trust Company, N.A. , as trustee, providing for the issuance of the Bonds and setting forth the terms and au thorizing the issuance of the Bonds (said Trust Agreement as amended, supplemented or otherwise modified from time to time being the “ Trust Agreement”). Reference is hereby made to the Trust Agreement and to the Refunding Law for a description of the term s on which the Bonds are issued and to be issued, and the rights of the registered owners of the Bonds; and all the terms of the Trust Agreement and the Refunding Law are hereby incorporated herein and constitute a contract between the City and the registe red owner from time to time of this Bond, and to all the provisions thereof the registered owner of this Bond, by its acceptance hereof, consents and agrees. All capitalized terms that are used herein and not otherwise defined shall have the meanings given such terms in the Trust Agreement.

The City is required under the Trust Agreement to make payments on the Bonds from any source of legally available funds. The City has covenanted to make the necessary annual appropriations for such purpose.

The obligation of the City to make payments on the Bonds does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

This Bond is one of the Bonds described in the Trust Agreement.

Interest on Bonds
Interest shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

The Bonds or the principal portion thereof called for redemption will cease to bear interest after the specified redemption date, provided that notice has been given pursuant to the Trust Agreement and sufficient funds for redemption are on deposit at the place of payment on the redemption date.

Redemption of Bonds
Optional Par Redemption. The Bonds maturing on or after ___ 1, 20__ may be redeemed at the option of the City from any source of funds on ____ 1, 20__ or any date thereafter in whole or in part from such maturities as are selected by the City pursuant to a written notice delivered to the Attachment "1"
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Trustee and by lot within a maturity at a redemption price equal to the principal amount to be redeemed, together with accrued interest to the date of redemption, without premium.

Optional Make-Whole Redemption. The Bonds are subject to redemption prior to ____ 1, 20__, at the option of the City, in whole or in part (and if in part in any order of maturity selected by the City pursuant to a written notice delivered to the Trustee and within a maturity bearing interest at the same rate on a pro -rata basis as described below), on any date at a redemption price equal to the greater of:
(a) 100% of the principal amount of the Bonds to be redeemed; or (b) the sum of the present value of the remaining scheduled payments of principal and interest to the maturity date of such Bonds to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which such Bonds are to be redeemed, discounted to the date on which such Bonds are to be redeemed on a semi -annual basis, assuming a 360-day year consisting of twelve 30 -day months, at the Comparable Treasury Yield ( as such term is defined below) plus __ basis points;
plus, in each case, accrued interest on such Bonds to be redeemed to the redemption date.

For purposes of the foregoing, the following terms have the following meanings:
“Calculation Agent ” means a commercial bank or an investment banking institution of national standing that is a primary dealer of United States government securities in the United States and designated by the City (which may be one of the institutions that served as an underwriter for the Bonds).
“Comparable Treasury Issue ” means the United States Treasury security selected by the Calculation Agent as having a maturity comparable to the remaining term to maturity of the Bonds being redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term to maturity of the Bonds being redeemed. “Comparable Treasury Price” means, with respect to any date on which a Bond or portion thereof is being redeemed, either : (a) the average of five Reference Treasury Dealer quotations for the date fixed for redemption, after excluding the highest and lowest such quotations ; and (b) if the Calculation Agent is unable to obtain five such quotations, the average of the quotation s that are obtained. The quotations will be the average, as determined by the Calculation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of principal amount) quoted in writing to the Calculatio n Agent, at 5:00 p.m. New York City time on a date selected by the Calculation Agent which is not less than three business days and not more than 20 business days preceding the date fixed for redemption.
“Comparable Treasury Yield” means the yield that represents the weekly average yield to maturity for the preceding week appearing in the most recently published statistical release designated “H.15(519) Selected Interest Rates” under the heading “Treasury Constant Maturities,” or any successor publication selected by the Calculation Agent that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity, for the maturity correspond ing to the remaining Attachment "1"
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term to maturity of the Bonds being redeemed. The Comparable Treasury Yield will be determined no sooner than the third business day nor earlier than the twentieth calendar day preceding the applicable date fixed for redemption. If the H.15(519) statistical release sets forth a weekly average yield for United States Treasury securities that have a constant maturity that is the same as the remaining term to maturity of the Bonds being redeemed, then the Comparable Treasury Yield will be equal to such weekly average yield. In all other cases, the Comparable Treasury Yield will be calculated by interpolation on a straight -line basis between the weekly average yields on the United States Treasury securities that have a constant maturity : (i) closest to and greater than the remaining term to maturity of the Bonds being redeemed; and (ii) closest to and less than the remaining term to maturity of the Bonds being redeemed. Any weekly average yields calculated by interpolation will be rounded to the nearest 1/100th of 1%, with any figure of 1/200th of 1% or above being rounded upward. If, and only if, weekly average yields for United States Treasury securities for the preceding week are not available in the H.15(519) statistical release or an y successor publication, then the Comparable Treasury Yield will be the rate of interest per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Compar able Treasury Price (each as defined herein) as of the date fixed for redemption.
“Reference Treasury Dealer ” means a primary dealer of United States Government securities in the United States (which may be one of the institutions that served as an underwr iter for the Bonds) appointed by the District and reasonably acceptable to the Calculation Agent.

Mandatory Sinking Fund Redemption of Bonds. The Bonds maturing ___ 1, 20__ (the “20__ Term Bonds”) are subject to mandatory sinking fund redemption at a rede mption price equal to the principal amount thereof, plus accrued interest to the redemption date, without premium. The 20__ Term Bonds shall be so redeemed on the following dates and in the following amounts:

Redemption Date
(____ 1)
Principal
Amount
20__ $

* Maturity.

On or before each ____ 15 next preceding any mandatory sinking fund redemption date, the Trustee shall proceed to select for redemption pro -rata from all Term Bonds subject to mandatory sinking fund redemption at that time, an aggregate principal amount of such Term Bonds equal to the amount for such year as set forth in the table above and shall call such Term Bonds or portions thereof for redemption and give notice of such redemption in accordance with the terms of Section 4.01. At the option of the City, to be exercised by delivery of a written certificate to the Trustee on or before each ____ 1 next preceding any mandatory sinking fund redemption date, it may: (a) deliver to the Trustee for cancellation Term Bonds or por tions thereof (in the amount of an Authorized Denomination) of the stated maturity subject to such redemption; or (b) specify a principal amount of such Term Bonds or portions thereof (in the amount of an Authorized Denomination) which prior to said date h ave been purchased or redeemed (otherwise than under the provisions of this Section 4.03) and cancelled by the Trustee at the request of the City and not Attachment "1"
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theretofore applied as a credit against any mandatory sinking fund redemption requirement. Each such Term Bonds or portion thereof so delivered or previously redeemed shall be credited by the Trustee at 100% of the principal amount of the Term Bonds so delivered to the Trustee by the City against the obligation of the City on such mandatory sinking fund redemption date.

Certain Defined Terms
“Interest Payment Date” means _____ 1, 202__ and each ____ 1 and ____ 1 thereafter. “Record Date ” means the fifteenth day of each calendar month preceding any Interest Payment Date, regardless of whether such day is a Business Day.

Other Provisions
The rights and obligations of the City and of the holders and registered owners of the Bonds may be modified or amended at any time in the manner, to the extent, and upon the terms provided in the Trust Agreement, which provide, in certain circumstances, for modifications and amendments without the consent of or notice to the registered owners of the Bonds.

It is hereby certified and recited that any and all acts, con ditions and things required to exist, to happen and to be performed, precedent to and in the incurring of the indebtedness evidenced by this Bond, and in the issuing of this Bond, do exist, have happened and have been performed in due time, form and manner , as required by the Constitution and statutes of the State of California, and that this Bond is within every debt and other limit prescribed by the Constitution and the statutes of the State of California, and is not in excess of the amount of Bonds permi tted to be issued under the Trust Agreement or the Refunding Law.

This Bond shall not be entitled to any benefit under the Trust Agreement, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have be en manually signed by the Trustee.

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IN WITNESS WHEREOF, THE CITY OF ESCONDIDO, a municipal corporation and general law city that is duly organized and validly existing under and pursuant to the Constitution and the laws of the State of California, has caus ed this Bond to be executed in its name and on its behalf by the City Manager, and attested by the City Clerk, and this Bond to be dated as of the Dated Date.

CITY OF ESCONDIDO
By:

Its: City Manager
ATTEST:

City Clerk
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION] This is one of the Bonds described in the within -mentioned Trust Agreement and authenticated the date set forth below.

Dated: ____ __, 202__

THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:

Authorized Signatory
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[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.

City Clerk of the City of Escondido

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[FORM OF ASSIGNMENT]
For value received _____________________ hereby sells, assigns and transfers unto __________________ (Tax I.D. No.: __________________) the w ithin Bond and hereby irrevocably constitute and appoints ____________________ attorney, to transfer the same on the books of the City at the office of the Trustee, with full power of substitution in the premises.

NOTE: The signature to this Assignment must
correspond with the name on the face of the within
Registered Bond in every particular, without alteration or enlargement or any change whatsoever.

Dated: _______________
Signature Guaranteed by:

NOTE: Signature must be guaranteed by an eligible
guarantor institution.

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EXHIBIT B

FORM OF REQUISITION
TO: The Bank of New York Mellon Trust Company, N.A. City of Escondido Use Only Request No. __
DISBURSEMENT REQUEST: RE GARDING $_____ CITY OF ESCONDIDO PENSION OBLIGATION BONDS, SERIES 202__ (FEDERALLY TAXABLE)
You are hereby requested to pay from the Costs of Issuance Fund established by the Trust Agreement with respect to the above -referenced bonds, to the person, corpo ration or other entity designated below as Payee, the sum set forth below such designation, in payment of all ( ) or a portion ( ) of the Costs of Issuance described below.

Name of Payee:

Address:

Amount: $____________
Method of Payment: ___________________
Service Provided:

The undersigned hereby certifies that:
(i) s/he is an Authorized City Representative;
(ii) this requisition for payment is in accordance with the terms and provisions of Section 6.01 of the Trust Agreement;
(iii) each item to be paid with the requisitioned funds represents either incurred or due and payable Costs of Issuance;
(iv) such Costs of Issuance have not been paid from other funds withdrawn from the Costs of Issuance Fund; and
(v) to the best of the signato ry’s knowledge no Event of Default has occurred and is continuing under the Trust Agreement.

Dated: _____________ CITY OF ESCONDIDO
By:

Name:

Title:

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Draft of 6/13/22
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$_____

CITY OF ESCONDIDO
PENSION OBLIGATION BONDS, SERIES 202__
(FEDERALLY TAXABLE)

BOND PURCHASE AGREEMENT
____ __, 202__
City of Escondido
201 North Broadway
Escondido, California 92025
Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated (the “ Underwriter”), offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with the City of Escondido, California (the “City”), which, upon the acceptance by the City, will be binding upon the City and the Underwriter.

This offer is made subject to acceptance by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City. Capitalized terms that are used herein and not otherwise defined shall have the meanings s et forth in the Trust Agreement ( as such term is defined herein).

Section 1. Purchase and Sale . Upon the terms and conditions and on the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agree s to purchase from the City , and the City hereby agrees to issue, sell and deliver to the Underwriter all (but not less than all) of the City of Escondido Pension Obligation Bonds, Series 202__ (Federally Taxable) (the “Bonds”) in the aggregate principal amount of _____. The Bonds shall be dated as of their date of delivery. Interest on the Bonds shall be payable semiannually on ___ 1 and ____ 1 in each year, commencing ____ 1, 202__ (each, an “Interest Payment Date”) and will bear interest at the rates and on the date s as set forth in Exhibit A . In addition, the Bonds shall be subject to redemption as set forth in Exhibit A . The purchase price for the Bonds shall be $ ____ (which represents the principal amount of the Bonds in the amount of _____, less an Underwriter’s discount of $____).

The scheduled payment of principal or interest on the Bonds will be insured pursuant to a bond insurance policy (the “Policy”) will be issued by _____ (the “Insurer”).

The Underwriter agree s to make a bona fide public offering of the Bonds at the initial offering yields set forth in the Official Statement (defined herein); however, the Underwriter reserves the right to make concessions to dealers and to change such initial offering yields as the Underwriter shall deem necessary in connection with the marketing of the Bonds. The Underwriter agrees that, in connection with the public offering and initial delivery of the Bonds to the purchasers thereof from the Underwriter, the Underwriter will deliver or cause to be delivered to each purchaser a copy of the final Official Statement prepared in connection with the Bonds, for the time period required under Rule 15c2 -12 promulgated under the Securities Exchange Act of 1934, as amended (“ Rule Attachment "2"
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15c2-12”). Terms defined in the Preliminary Official Statement, and to be set forth in the final Official Statement are used herein as so defined.

The City acknowledges and agrees that: (i) the purchase and sale of the Bonds pursuant to this Purchase Agreement is an arm’s -length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as a municipal advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended), financial advisor or fiduciary; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in fa vor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter ha d provided other services or are currently providing other services to the City on o ther matters); (iv) the only obligations that the Underwriter ha s to the City with respect to the transaction that is contemplated hereby expressly are set forth in this Purchase Agreement; and (v) the City has consulted its own financial and/or municipal, legal, accounting, tax, financial and other advisors, as applicable, to the extent that it has deemed appropriate.

Section 2. The Bonds . The Bonds are being issued pursuant to Articles 10 and 11 (commencing with Section 53570) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Refunding Law”) and the Trust Agreeme nt, dated as of ____ 1, 202__ (the “Trust Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (together with any successor as trustee under the Trust Agreement, the “ Trustee”), and the Resolutions (as such term is defined herein). The Bonds shal l be obligations of the City payable from any lawfully available funds, shall not be limited as to payment to any special source of funds of the City and the payment thereof shall not be subject to appropriation. The Bonds do not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The Bonds otherwise shall be as described in the Preliminary Official Statement and the Official Statement , the Refunding Law and the Legal Documents (as such term is defined herein) . The agreement of the Underwriter to purchase the Bonds from the City is made in reliance upon the City’s representations, covenants and warranties and on the terms and conditions set forth in this Purchase Agreement.

The City is obligated by the Public Employees’ Retirement Law, constituting Part 3 of Division 5 of Title 2 of the California Government Code (the “ Retirement Law”), and the contract between the Board of Administrati on of the California Public Employees’ Retirement System (“PERS”), established under the Retirement Law , and the City Council of the City, effective November 1, 1958 (as amended, the “PERS Contract”), to make contributions to PERS: (a) to fund pension benefits for its employees who are members of PERS; (b) to amortize the unfunded actuarial liability with respect to such pension benefits; and (c) to appropriate funds for the purposes described in clauses (a) and (b). The City participates in two retirement plans (with tiers within such plans) under the PERS Contract.

The proce eds of the Bonds will be used : (1) to refund the City’s unamortized, unfunded accrued actuarial liability with respect to pension benefits under the PERS Contract and the Retirement La w (the “ Unfunded Liability ”); (2) to prepay all or a portion of the City’s annual required retirement contribution that is due and payable within 18 months of the issuance of the Bonds (the “ Current Obligation ”); and (3) to pay costs of issuance, including Underwriter’s discount and any original issue discount.

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Section 3. Public Offering. The Underwriter agree s to make an initial public offering of all the Bonds at the public offering prices (or yields) set forth on Exhibit A and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserve s the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds, provided that the Underwriter shall not chan ge the interest rates set forth on Exhibit A.

The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices.

Section 4. The Official Statement . By its acceptance of this Purchase Agreement, the City ratifies, confirms and approves of the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement relating to the Bonds, dated ___ __, 202 __ (including the cover page, all appendices and all information incorporated therein and an y supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially consistent with such physical form, the “ Preliminary Official Statement ”) that the City has deemed “final” as of its date for purposes of Rule 15c2 -12, except for certain omissions permitted by Rule 15c2 -12. The City hereby agrees to deliver or cause to be delivered to the Underwriter, within seven (7) business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information that was previously permitted to have been omitted by Rule 15c2 -12, the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the City and the Underwriter, the “ Official Statement”) in such quantity as the Underwriter shall reasonably request to comply with Rule 15c2-12(b)(4) and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).

To the extent required by applicable MSRB Rules, the City hereby confirms that it does not object to distribution of the Official Statement in electronic form.

Section 5. Closing. At 8:00 a.m., Cali fornia time, on ___ __, 202 __ (the “ Closing Date”), or at such other time or date as t he City and the Underwriter mutually agree upon, the City shall deliver or cause to be delivered to the Trustee, and the Trustee shall deliver or cause to be delivered through the facilities of The Depository Trust Company, New York, New York (“ DTC”), the Bonds in definitive form, duly executed and authenticated. Concurrently with the delivery of the Bonds, the City shall deliver the documents hereinafter mentioned at the offices of Stradling Yocca Carlson & Rauth, Newport Beach, California (“ Bond Counsel”), or another place to be mutually agreed upon by the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Bonds, together with the delivery of the aforementioned documents referenced herein, is called the “Closing.”
The Bonds shall be registered in the name of Cede & Co., as nominee of DTC , in denominations of $5,000 and any integral multiple thereof as provided in the Trust Agreement, and shall be made available to the Underwriter at least one (1) business day before the Closing for purposes of inspection and packaging. The City acknowledges that the services of DTC will be used initially by the Underwriter to permit the issuance of the Bonds in book -entry form, and agrees to cooperate fully with the Underwriter in employing such services.

Section 6. Representations, Warranties and Covenants of the City . The City represents, warrants and covenants to the Underwriter as follows.

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(a) The City is a general law city and municipal corporation of the State of California (the “State”), duly organized and validly existing pursuant to the Constitution and laws of the State.
(b) The City had full legal right, power and authority to adopt Resolution No. 2022-__, adopted by a majority of the City Council of the City (the “City Council”) on ___ __, 2022 (the “ Approving Resolution ”) and Resolution No. 202__-__ adopted by a majority of the City Council on ___ __, 202 __ (the “Official Statement Resolution ” and, together with the Approving Resolution, the “ Resolutions”), and the City has, and upon the Closing will have, full legal right, power and authority : (i) to execute and deliver the Trust Agreement, the Continuing Disclosure Certificate, dated the Closing Date, of the City relating to the Bonds (the “ Continuing Disclosure Certificate”) and this Purchase Agreement (collectively, the “ Legal Documents”), and to perform its obligations u nder the Legal Documents, and has by official action duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the Legal Documents; (ii) to issue, sell and deliver the Bonds to t he Underwriter as provided herein; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Legal Documents and the Resolutions.
(c) The City Council has duly and validly adopted the Resolution s at meetings of the City Council that were duly noticed and held and at each of which a quorum was present and acting throughout, and the Resolution s have not been modified or amended and are in full force and effect; and the City Council has duly approved the execution and delivery of the Bonds and the other Legal Documents and the performance by the City of its obligations contained therein, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by each of said documents.
(d) The Bonds and the other Legal Documents will be duly executed and delivered by the City on or before the Closing Date, and the Bonds, when authenticated and delivered to the Underwriter in accordance with the Trust Agreement, and the Legal Documents will constitute legally valid and binding obligations, enforceable against the City in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolve ncy, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally. (e) The City is, and on the Closing Date will be, in compliance, in all respects, with the Legal Documents.
(f) The City is not in breach of or default under any applicable law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, and no event has occ urred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument, in each case which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the Legal Documents. (g) No consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the City that has not been obtained is or will be required for the issuance and delivery of the Bonds or the consummation by the City of the other transactions contemplated by the Trust Agreement.

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(h) The adoption of the Resolutions and the execution and delivery by the City of the Legal Documents and the approval by the C ity of the Official Statement and compliance with the provisions on the City’s part contained in the Legal Documents, will not conflict with, or result in a violation or breach of, or constitute a default under, any law, administrative regulation, judgment , decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, which conflict, breach or default has or may have a material adverse effect on the ability of the City to carry out its obligations under the Legal Documents, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoe ver upon any of the properties or assets of City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument, except as provided by the Legal Documents. (i) Prior to the date hereof, the City has provided to the Underwriter for its review the Preliminary Official Statement, which the City has deemed final for purposes of Rule 15c2-12, has approved the distribution of the Preliminary Official State ment and the Officia l Statement and has duly authorized the execution and delivery of the Official Statement (including in electronic form). The Preliminary Official Statement, at the date thereof, and as of the date hereof, did not and does not contain a ny untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book - entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading. As of the date hereof and on the Closing, the Official Statement did not and will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein (other than the information relating to DTC and its book-entry system, as to which no view is expressed), in light of the circumstances under which they were made, not misleading.
(j) [Reserved].
(k) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not effect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (l) The financial statements relating to the receipts, exp enditures and cash balances of the City as of June 30, 202__ as set forth in the Preliminary Official Statement and in the Official Statement fairly represent the financial position and results of operations of the City as of the dates and for the periods therein set forth in accordance with generally accepted accounting principles. Except as disclosed in the Preliminary Official State ment or the Official Statement or as otherwise disclosed in writing to the Underwriter, there has not been any materially a dverse change in the financial position and results of operations of the City or in its operations since June 30, 202__ and, except as disclosed in the Preliminary Official Statement or the Official Statement or as otherwise disclosed in writing to the Underwriter, there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change. (m) As of the time of acceptance hereof and as of the Closing Date, no action, suit, proceeding, inquiry o r investigation, at law or in equity, before or by any court, government Attachment "2"
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agency, public board or body, is pending or, to the knowledge of the City, threatened : (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or in any way contesting or affecting the validity of the Bonds or the Legal Documents or the consumm ation of the transactions contemplated thereby or contesting the power of the City to enter into the Legal Documents; (iii) which may result in any material adverse change to the financial condition of the City or to its ability to make payment of principa l or redemption price of and interest on the Bonds when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official S tatement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clause (i) through (iv) of this sentence. (n) To the extent required by law, the City will undertake, pursuant to the Continuing Dis closure Certificate, to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. Except as otherwise disclosed in the Preliminary Official Statement, the City has not failed to comply in all material respects with any previous undertakings with regard to Rule 15c2-12 to provide annual reports or notices of enumerated events in the past five years and, the City has been in material compliance during the past five years with its continuing disclosure obligations in accordance with Rule 15c2-12.
(o) Any certificate that is signed by any officer of the City who is authorized to execute such certificate in connection with the issuance, sale and delivery of the Bonds and delivered to the Underwriter shall be deemed a representation and warranty of the City to the Underwriter as to the statements made therein but not of the person signing such certificate. (p) The City will promptly apply the proceeds of the Bonds to refund the Unfunded Liability and fund the Current Obligation as of the date of issuance of the Bonds and to pay costs associated with the issuance and delivery of the Bonds. (q) The City is not in material default, nor has the City been in material default at any time, as to the payment of principal or interest with respect to a material obligation issued by the City or with respect to a material obligation guaranteed by the City as guarantor. (r) As of the date hereof, the City does not have any revenue bonds, capital lease obligations, installment payment obligations or other material financial obligation s, nor other material obligations secured by payments from the general fund of the City, except as disclosed in the Preliminary Official Statement and the Official Statement. (s) The judgment dated ____ __, 202__ entered in the Superior Court of the State of California for the County of San Diego in favor of the City in connection with City of Escondido v. All Persons Interested, etc. (Case No. _____) (the “ Judgment”) was duly entered, the appeal period has run without any appeal having been filed, and the Judgment is in full force and effect.

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(t) The City had, prior to the adoption of the Approving Resolution, and has, in full force and ef fect, a Debt Management Policy that complies with Government Code Section 8855(i).

Section 7. Conditions to the Obligations of the Underwriter . The Underwriter ha s entered into this Purchase Agreement in reliance upon the representations and warranties of the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all respects of the statements of the officers and other officials o f the City, as well as authorized representatives of the City Attorney, Bond Counsel, Disclosure Counsel and the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) The representations, warranties and covenants of the City contained herein shall be true, complete and correct at the date hereof and at the time of t he Closing, as if made on the Closing Date;
(b) At the time of Closing, the Legal Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the Legal Documents, the Preliminary Official Statem ent and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter, and all such reasonable actions as, in the opinion of Bond Counsel, are reasonably deemed necessary in connection with the transactions contemplated hereby, shall have been done and taken;
(c) At the time of the Closing, no default shall have occurred or be existing under the Legal Documents, or any other agreement or document pursuant to which any of the City’s financial obligations were executed and delivered, and the City shall not be in default in the payment of principal or interest with respect to any of its financial obligations, which default would result in any material adverse change to the financial cond ition of the City or adversely impact its ability to make payments of the principal or redemption price of and interest on the Bonds when due; (d) In recognition of the desire of the City and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the absolute discretion of the Underwriter by notification, in writing, to the City prior to d elivery of and payment for the Bonds, if at any time prior to such time, regardless of whether any of the following statements of fact were in existence or known of on the date of this Purchase Agreement:
(i) there shall have occurred any outbreak or escalatio n of hostilities, declaration by the United States of America of a national emergency or war or other calamity or crisis the effect of which on financial markets is materially adverse such as to make it, in the sole judgment of the Underwriter, impractical to proceed with the purchase or delivery of the Bonds as contemplated by the Official Statement (exclusive of any amendment or supplement thereto); or (ii) a general banking moratorium shall have been declared by federal, State or New York authorities, or the general suspension of trading on any national securities exchange; or
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(iii) any event shall occur which makes untrue any statement or results in an omission to state a material fact necessary to make the statements in the Preliminary Official Statement and the Official Statement, in the light of the circumstances under which they were made, not misleading, which event, in the reasonable opinion of the Underwriter would materially or adversely affect the ability of the Underwriter to market the Bonds; or (iv) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State, or a decision by any court of competent jurisdiction within the State shall be rendered which materially adversely affe cts the market price of the Bonds; or
(v) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Underwriter, has been materially adversely affected by an amendment to the Constitution of the United States of America or by any legislation in or by the Congress of the United States of America or by the State, or the amendment of legislation pending as of the date of this Purchase Agreement in the Congress of the United States of America, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States of America, the Treasury Department of the United States of America, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee or by any member thereof, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States of America, or the favorable reporting for passage of legislation to either Hou se of the Congress of the United States of America by a Committee of such House to which such legislation has been referred for consideration; or
(vi) an order, decree or injunction shall have been issued by any court of competent jurisdiction, or order, rulin g, regulation (final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that: (i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Agreement is not exempt from qualification under the Trust Indenture Act of 1939; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; or (vii) legislation shall be introduced, by amendment or otherwise, or be enacted by the Ho use of Representatives or the Senate of the Congress of the United States of America, or a decision by a court of the United States of America shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement, is or would be in violation of any provision of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the Attachment "2"
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issuance, offering or sale of the Bonds or obligations of the general character of the Bonds, as contemplated hereby or by the Preliminary Official Statement and the Official Statement; or (viii) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange, which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; or (ix) the Comptroller of the Currency, the New York Stock Exchange, any other national securities exchange or association or any govern mental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements or financial responsibility requirements of broker dealers; or (x) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange which, in the reasonable opinion of the Underwriter, materially adversely affects the marketability or market price of the Bonds; or (xi) any rating of the Bonds or the rating of any general fund obligations of the City shall have been downgraded , withdrawn or placed on negative watch by a national rating service, which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or
(xii) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market, rendering the marketing and sale of the Bonds, or enforcement of sale contracts with respect thereto impracticable; or
(xiii) the commencement of any action, suit or proceeding described in Section 6(m).
(e) at or prior to the Closing, the Underwriter shall receive or have received the following documents, in each case to the reasonable satisfaction, in form and substance, of the Underwriter and _____ (“Underwriter’s Counsel”):
(i) a copy of the Judgment;
(ii) the Resolutions, certified as of the Closing Date by an authorized official of the City;
(iii) the Legal Documents duly executed and delivered by the respective parties thereto, with only su ch amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;
(iv) the approving opinion of Bond Counsel, dated the Closing Date and addressed to the City, in substantially the form attached as an appendix to the Officia l Statement, together with a reliance letter thereon addressed to the Underwriter and the Trustee; Attachment "2"
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(v) a supplemental opinion of Bond Counsel , dated the Closing Date and addressed to the Underwriter, to the effect that:
(A) the statements on the cover of the Official Statement and in the Official Statement under the captions [“INTRODUCTION,” “THE BONDS,” “SECURITY AND SOURCE OF PAYMENT FOR THE BONDS,” “ TAX MATTERS” and “ VALIDATION,” and in Appendices __ and __], excluding any material that may be treated as included under such captions and appendices by any cross-reference, insofar as such statements expressly summarize provisions of the Bonds, the Trust Agreement and Bond Counsel’s final opinion relating to the Bonds, are acc urate in all material respects as of the Closing Date;
(B) the Purchase Agreement and the Continuing Disclosure Certificate have been duly authorized, executed and delivered by the City and are the valid, legal and binding agreements of the City enforceable in accordance with their respective terms, except that the rights and obligations under the Purchase Agreement and the Continuing Disclosure Certificate are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State, and prov ided that no opinion is expressed with respect to any indemnification or contribution provisions contained therein; and (C) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended , provided that no opinion is provided with respect to bond insurance, if any;
(vi) the Preliminary Official Statement and the Official Statement, the latter executed on behalf of the City;
(vii) evidence that the rating (s) on the Bonds are as described in the Official Statement;
(viii) a certificate, dated the Closing D ate, signed by a duly authorized officer of the City satisfactory in form and substance to the Underwriter to the effect that: (i) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the City, and the City has complied with all of the terms and conditions of the Purchase Agreement required to be complied with by the City at or prior to the Closing Date; (ii) to the best of such officer’s knowledge, no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the inf ormation and statements contained in the Preliminary Official Statement and the Official Statement (other than information relating to DTC and its book entry system) did not as their respective dates and in the Official Statement does not as of the Closing Date contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; (iv) the City is not in breach of or default under any applicable law or administrative regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, Attachment "2"
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resolution, agreement or other instrument to which th e City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the Legal Documents, and no event has occurred and is continuing which, with the passage of time or the giving of n otice, or both, would constitute such a default or an event of default under any such instrument; and (v) no further consent is required for inclusion of its audited financial statements in the Preliminary Official Statement and the Official Statement; (ix) an opinion, dated the Closing Date and addressed to the Underwriter, the Trustee and the Bond Counsel, of the City Attorney of the City of Escondido, substantially in the form attached as Exhibit B;
(x) a letter of Stradling Yocca Carlson & Rauth, Newport Beach, California, Disclosure Counsel to the City , dated the Closing Date and addressed to the Underwriter substantially to the effect that, on the basis of the information made available to them in the course of their participation in the preparation of the Offi cial Statement as Disclosure Counsel, but without having undertaken to determine or verify independently, or assuming any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Official Statement, no facts have come to the attention of the personnel in such firm directly involved in rendering legal advice and assistance to the City in connection with the preparation of the Official Statement which caused them to believe that : (A) the Preliminary Official Stateme nt as of its date or as of ____ __, 202__ (excluding therefrom financial, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; statements relating to DTC, Cede & Co. and the operation of the book -entry system; statements relating to the treatment of the Bonds or the interest, discount or premium, if any, thereon or therefrom for tax purposes under the law of any jurisdiction; and the statements contained in the Preliminary Official Statement under the caption “TAX MATTERS,” and in the appendices to the Preliminary Official Statement; as to all of which they express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2 -12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, debt service requirements, Underwriter’s discount and CUSIP numbers ; or (B) the Official Statement as of its date or as of the Closing Date (excluding therefrom financi al, demographic and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; statements relating to DTC, Cede & Co. and the operation of the book -entry system, statements relating to the treatment of the Bonds or the in terest, discount or premium, if any, thereon or therefrom for tax purposes under the law of any jurisdiction; and the statements contained in the Official Statement under the caption “TAX MATTERS,” and in the appendices to the Official Statement; as to all of which they express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading;
(xi) an opinion of counsel to the Trustee, addressed to the Underwriter and the City, dated the Closing Date, to the effect that:
(A) the Trustee is a national banking association that is duly organized and validly existing under the laws of the United States of America, having full corporate power to undertake the trust created under the Trust Agreement; Attachment "2"
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(B) the Trust Agreement has been duly authorized, executed and delivered by the Trustee and, assuming due authorization, execution and delivery by the City, the Trust Agreement constitutes the vali d, legal and binding obligation of the Trustee enforceable in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights gen erally and by the application of equitable principles, if equitable remedies are sought; (C) the Trustee has duly authenticated the Bonds upon the order of the City;
(D) the Trustee’s actions in executing and delivering the Trust Agreement are in full compliance w ith and do not conflict with any applicable law or governmental regulation and, to the best of such counsel’s knowledge, after reasonable inquiry with respect thereto, do not conflict with or violate any contract to which the Trustee is a party or any admi nistrative or judicial decision by which the Trustee is bound;
(E) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the banking or trust powers of the Trustee that has not been obtained i s or will be required for the execution and delivery of the Bonds or the consummation by the Trustee of its obligations under the Trust Agreement; and (F) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any cou rt or public body pending or, to the best of such counsel’s knowledge, threatened against or affecting the Trustee, which would materially adversely impact the Trustee’s ability to complete the transactions contemplated by the Trust Agreement. (xii) a certificat e, dated the Closing D ate, signed by a duly authorized officer of the Trustee satisfactory in form and substance to the Underwriter, to the effect that:
(A) the Trustee is duly organized and existing as a national banking association under the laws of the Unit ed States of America, having the full corporate power and authority to enter into and perform its duties under the Trust Agreement; (B) the Trustee is duly authorized to enter into the Trust Agreement and has duly executed and delivered the Trust Agreement, an d assuming due authorization and execution by the City, the Trust Agreement is legal, valid and binding upon the Trustee and enforceable against the Trustee in accordance with its terms; (C) the Trustee has duly authenticated the Bonds under the Trust Agreement and delivered the Bonds to or upon the order of the Underwriter; (D) no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the banking or trust powers of the Trustee that has not been obtaine d is required for the execution and delivery of the Bonds or the consummation by the Trustee of its obligations under the Trust Agreement; and (E) there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or publ ic body pending or threatened against or affecting the Attachment "2"
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Trustee, which would materially adversely impact the Trustee’s ability to complete the transactions contemplated by the Trust Agreement.
(xiii) the preliminary and final forms required to be delivered to the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Section 53583 of the Government Code of the State of California and Section 8855(i) and (j) of the Government Code; (xiv) a copy of the executed Blanket Issuer Letter of Representations by and between the City and DTC relating to the book-entry system; (xv) an opinion of Underwriter’s Counsel, in form and substance acceptable to the Underwriter;
(xvi) evidence from the Insurer that the principal of, premium, if any, and interest on the Bonds is guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by the Insurer, together with a closing certificate of the Insurer and an opinion of the Insurer’s counsel, all in form and substance satisfactory to Bond Counsel;
(xvii) a Rule 15c2 -12 certificate, dated the date of the Preliminary Official Statement and executed by the City;
(xviii) a certificate of the PERS actuary setting forth the amount of the discounted prepayment of the annual contribution of the City to the System for Fiscal Year 202__- 2__ together with acknowledgment of payment of the Unfunded Liability and the Current Obligation; and
(xix) such additional legal opinions, proceedings, instruments or other documents as the Underwriter or Underwriter’s Counsel may reasonably request.

If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, this Purchase Agreement shall terminate, and except as set forth in Section 9 hereof, neither the Underwriter nor the City shall be under further obligation hereunder.

Section 8. Changes in Official Statement. Within 90 days after the Closing or within 25 days following the “end of the underwriting period” (as such term is defined in Rule 15c2 -12), whichever occurs first, if any event relating to or affecting the Bonds, the Trustee, or t he City shall occur as a result of which it is necessary, in the reasonable opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in any material respect in the light of the circumstances existing at the time it is delivered to a purchaser, the City will forthwith prepare and furnish to the Underwriter an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to purchaser s, not misleading. The City shall cooperate with the U nderwriter in the filing by the Underwriter of such amendment or supplement to the Official Statement with the MSRB. The Underwriter acknowledges that the “end of the underwriting period” will be the Closing Date unless the Underwriter otherwise notifies the City in writing that it still owns some or all of the Bonds.

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Section 9. Expenses. (a) Whether or not the Underwriter accept s delivery of and pay s for the Bonds as set forth herein, the Underwriter shall be under no obligation to p ay, and the City shall pay out of the proceeds of the Bonds or any other legally available funds of the City, all expenses incidental to the performance of the City’s obligations hereunder, including but not limited to the cost of printing and delivering t he Legal Documents to the Underwriter, the costs of printing and shipping and electronic distribution of the Preliminary Official Statement and the Official Statement in reasonable quantities, the fees and disbursements of the City, the Trustee and its counsel, Bond Counsel, Disclosure Counsel, the City Attorney, the City’s actuar ies, accountants, engineers, appraisers, economic consultants and any other experts or consultants retained by the City in connection with the issuance and sale of the Bonds, ratin g agency fees, bond insurance fees, advertising expenses and any other expenses that are not specifically enumerated in paragraph (b) of this section incurred in connection with the issuance and sale of the Bonds. The City shall pay out of the proceeds of the Bonds for any expenses incurred by the Underwriter on behalf of the City’s employees and representatives which are incidental to implementing this Purchase Agreement, including meals, transportation and lodging (but not entertainment expenses) of those employees and representatives.
(b) Whether or not the Bonds are delivered to the Underwriter as set forth herein, the City shall be under no obligation to pay, and the Underwriter shall be responsible for and pay (which may be included as an expense compone nt of the Underwriter ’s discount), MSRB, CUSIP Bureau and CDIAC fees and expenses to qualify the Bonds for sale under any “blue sky” laws, and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bon ds not specifically enumerated in paragraph (a) of this section, including the cost of preparing this Purchase Agreement and other documents of the Underwriter, travel expenses and the fees and disbursements of Underwriter’s Counsel.

Section 10. Notices. Any notice o r other communication to be given to the Underwriter or the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 1 Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Public Finance . Any notice or communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing at the address first set forth above, Attention: City Manager. All notices or communications h ereunder by any party shall be given and served upon each other party.

Section 11. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns thereof) and no other person shall ac quire or have any right hereunder or by virtue hereof. All representations, warranties and agreements of the City in this Purchase Agreement shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Un derwriter and shall survive the delivery of and payment for the Bonds.

Section 12. Electronic Transactions . The parties hereto agree that the transactions described herein may be conducted and related documents may be stored by electronic means.

Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.

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Section 13. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [Remainder of Page Intentionally Left Blank]

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Section 14. Governing Law . This Purchase Agreement shall be governed by and construed in accordance with the laws of the State.

STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter

By
Authorized Officer

Accepted:

CITY OF ESCONDIDO

By
City Manager

Time of Execution: ____:____, California time

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EXHIBIT A

MATURITY SCHEDULE

CITY OF ESCONDIDO
PENSION OBLIGATION BONDS, SERIES 202__
(FEDERALLY TAXABLE)

Maturity Date
(____ 1) Principal Amount Interest Rate Yield Price
20__ $ % %

T Term Bond.
* Insured pursuant to a bond insurance policy to be issued by _____.

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EXHIBIT B

FORM OF CITY ATTORNEY OPINION

____ __, 202__

City of Escondido
Escondido, California

Stifel, Nicolaus & Company, Inc.

Los Angeles, California

City of Escondido
Pension Obligation Bonds, Series 202__
(Federally Taxable)

Ladies and Gentlemen:

We have acted as counsel to the City of Escondido (the “City”) in connection with the issuance and sale by the City of $_____ aggregate principal amount of its City of Escondido Pension Obligation Bonds, Series 202__ (Federally Taxable) (the “Bonds”). We have examined and relied upon originals (or copie s certified or otherwise identified to our satisfaction) of such documents, records and other instruments as we deem necessary or appropriate for the purposes of this opinion, including, without limitation: (i) those documents relating to the existence, or ganization and operation of the City; (ii) Resolution No. 2022-___, adopted by a majority of the City Council of the City (the “City Council”) on ____ __, 2022 (the “Approving Resolution”) and Resolution No. 202__- __, adopted by a majority of the City Coun cil on ____ __, 202 __ (the “Official Statement Resolution” and, together with the Approving Resolution, the “Resolutions”) ; (iii) all necessary documentation of the City relating to the authorization, execution and delivery of the Trust Agreement, dated as of ____ 1, 202 __ (the “Trust Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as trustee; (iii) the judgment dated ____ __, 202__ entered in the Superior Court of the State of California for the County of San Diego in favor of the City in connection with City of Escondido v. All Persons Interested, etc. (Case No. _____); (iv) the Bond Purchase Agreement, dated ____ __, 202 __ (the “Purchase Agreement”), executed by Stifel, Nicolaus & Company, Incorporated (the “ Underwriter”), and accepted by the City; (v) the Preliminary Official Statement, dated ____ __, 202__ (the “Preliminary Official Statement”), relating to the Bonds; (vi) the Official Statement, dated ____ __, 202__ (the “Official Statement”), relating to the Bonds; (vii) the Continuing Disclosure Certificate, dated the date hereof (the “Continuing Disclosure Certificate”), of the City relating to the Bonds ; and (viii) such other records, documents, certificates, opinions, and other matters as are in our jud gment necessary or appropriate to enable us to render the opinions expressed herein. All capitalized terms that are used herein and not otherwise defined shall have the meaning given to such terms as set forth in the Trust Agreement.

Based on the foregoin g, and with regard to State of California (the “State”) law and United States federal law, we are of the opinion that:

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(a) The City is a general law city and municipal corporation of the State, duly organized and validly existing pursuant to the Constitution and laws of the State. (b) The Resolutions approving and authorizing the execution and delivery of the Bonds, the Trust Agreement, the Purchase Agreement, and the Continuing Disclosure Certificate (collectively, the “Legal Documents”) and approving and authorizing the issuance of the Bonds and the delivery of the Official Statement and other actions of the City were duly adopted at meetings of the governing body of the City which were called and held pursuant to law and with all public notice required by law and at each of which a quorum was present and acting throughout, and such Resolutions are now in full force and effect and have not been amended or superseded in any way. (c) Except as disclosed in the Preliminary Official Statement and in the Officia l Statement, there is no action, suit or proceeding pending, or to the best of our knowledge , threatened against the City: (i) to restrain or enjoin the execution or delivery of the Legal Documents; (ii) in any way contesting or affecting the validity of t he Legal Documents, the Resolution s or the authority of the City to enter into the Legal Documents; or (iii) in any way contesting or affecting the powers of the City in connection with any action contemplated by the Official Statement, the Resolution s or the Legal Documents.
(d) The execution and delivery of the Legal Documents and compliance with the provisions thereof, do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreemen t or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the Legal Documents. (e) No authorization, approval, consent, or other order of the State or any other governmental body within the State is required for the valid authorization, execution and delivery of the Legal Doc uments or the consummation by the City of the transactions on its part contemplated therein, except such as have been obtained and except such as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Bonds by the Underwriter.

Very truly yours,

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KEY-

CONSENT CALENDAR CURRENT BUSINESS

PUBLIC HEARING WORKSHOP
7/13/2022
CONSENT CALENDAR - (J. GOULART) - ANNUAL FUEL PURCHASE - Request the City Council adopt Resolution 2022-67 authorizing the City Council to approve the purchase of unleaded and diesel fuels from SC Fuels.

CONSENT CALENDAR - (J. PROCOPIO) - SANDAG SMART GROWTH INCENTIVE PROGRAM GRANT AGREEMENT - Request the City Council City Council authorize the City Manager or their designee to execute the Smart Growth Inceptive Program Grant (SGIP) Agreement CONSENT CALENDAR - (C. HOLMES) - COMMUNITY FACILITIES DISTRICT (CFD) 2006-01 (EUREKA RANCH) ANNUAL SPECIAL TAX LEVY - Request the City Council adopt Resolution No.2022-85 that will set the Special Tax Levy for Community Facilities District No. 2006-01 (Eureka Ranch) (the “District”) for Fiscal Year 2022-23 CONSENT CALENDAR - (C. HOLMES) - COMMUNITY FACILITIES DISTRICT (CFD) 2000-01 (HIDDEN TRAILS) ANNUAL SPECIAL TAX LEVY - Request the City Council adopt Resolution No.2022-86 that will set the Special Tax Levy for Community Facilities District No. 2000-01 (Hidden Trails) for Fiscal Year 2022-23 CONSENT CALENDAR - (C. HOLMES) - COMMUNITY FACILITIES DISTRICT (CFD) 2020-01 (PUBLIC SERVICES) ANNUAL SPECIAL TAX LEVY - Request the City Council adopt Resolution No.2022-87 that will set the Special Tax Levy for Community Facilities District No. 2020-01 (Public Services) for Fiscal Year 2022-23 CONSENT CALENDAR - (C. HOLMES) - COMMUNITY FACILITIES DISTRICT (CFD) 2020-02 (THE VILLAGES) ANNUAL SPECIAL TAX LEVY - Request the City Council adopt Resolution No.2022-88 that will set the Special Tax Levy for Community Facilities District No. 2020-02 (The Villages) for Fiscal Year 2022-23 CONSENT CALENDAR - (J. MURDOCK) - FY2022 CALIFORNIA GOVERNOR'S OFFICE OF EMERGENCY SERVICES (Cal OES) HIGH FREQUENCY COMMUNICATIONS GRANT PROGRAM AND BUDGET ADJUSTMENT - Request the City Council authorize the Escondido Fire Department to accept FY 2022 Cal OES Grant funds in the amount of $55,516; authorize the Fire Chief or his designee to execute grant documents on behalf of the City; and approve budget adjustments needed to spend grant funds.

CONSENT CALENDAR - (J. PROCOPIO) - OUT-OF-AGENCY SERVICE AGREEMENT FOR 2314 FELICITA AVENUE - PL22-0196

CONSENT RESOLUTIONS AND ORDINANCES - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ESCONDIDO, CALIFORNIA, AUTHORIZING THE DEPUTY CITY MANAGER TO EXECUTE CDBG, HOME, AND ESG CONTRACTS, INCLUDING THOSE INVOLVING NON-SUBSTANTIAL CHANGES - Ordinance No. 2022-11 (2nd reading and adoption)
CURRENT BUSINESS - (Z. BECK) - DESIGNATION OF VOTING DELEGATE – League of California Cities Conference 7/20/2022
PRESENTATION: Clean Energy Alliance Update
CONSENT CALENDAR - (C. MCKINNEY) - AMENDMENT TO EXHIBIT B OF MWD EXCHANGE AGREEMENT - Request the City Council adopt Resolution No. 2022-XX, authorizing an amendment to Exhibit B of the 2003 Agreement Relating to Supplemental Water Among the Metropolitan Water District of Southern California, the San Luis Rey Settlement Parties, and the United States.

CURRENT BUSINESS - (J. PROCOPIO) - ADOPTION ORDINANCE 2022-10 - UPDATES TO CALIFORNIA VEHICLE CODE SECTION 22358.8 TO RETAIN EXISITING SPEED LIMITS ON CERTAIN STREET SEGMENTS (first reading and introduction)

CURRENT BUSINESS - (CITY MANAGER'S OFFICE) - COMMUNITY OPINION POLL RESULTS FOR A POTENTIAL REVENUE MEASURE

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Escondido City CouncilJune 22, 2022

Escondido City Council
June 22, 2022