Escondido City Council
March 8, 2023

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C. Authorized Public Facilities and S ervices; Priority In gene
ral, priority for CFD financing shall be given to public services and then public facilities directly benefiting the City as well as those improvements identified by the City as the most necessary to serve the specific needs of the portion of the City in which t he CFD will be located. The City Council shall have the sole discretion and final determination as to the eligibility of any improvement for financing, as well as the prioritization of financing of such improvements.

The list
of eligible public facilities include but are not limited to the following:

Stre
ets, highways, and bridges Flood control facilities
Street lighting Libraries
Traffic signals and safety lighting Public utilities
Parks Police and fire protection facilities
Governmental facilities Recreation facilities
Sanitary sewer facilities Storm drain facilities
Landscaping and Revegetation
Potable and reclaimed water facilities
Biological mitigation measures involving land acquisition, dedication Use of
bond proceeds for grading and right -of-way acquisition will be reviewed by the City and its bond counsel and financial advisors on a case- by-case basis.

1. The priority that various kinds of public facilities and services will have for fi
nancing through the City’s use of the Act is as follows: The first priority of the City is the funding of services as specified in section 53313 of the Act, which the City deems appropriate and applicable to a given project and relates to such project’s fiscal impact on the City. The City shall not finance services on behalf of other public agencies.

2. Acquisition & Construction of Public Improvement s. The s econd priority of the City is to fund backbone infrastructure and facilities to be owned and/or operated by the City that is required to serve the project and that is identified in an infrastructure master plan, general plan, specific plan or other appropriate document approved by the City as a major backbone infrastructure element; and/or other public facilities (excluding in-tract infrastructure) to be owned and/or operated by the City for which there is a clearly demonstrated public benefit.

Any publi
c improvements proposed to be financed through a CFD must meet all design and construction requirements and standards as may be established by the C ity. Any public improvement, the construction of Resolution No. 2020-20
Exhibit A

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which is completed following the adoption of the resolution of formation of a CFD, and proposed to be acquired by the City from the owner or developer of property within a Development Related CFD , must be constructed as if such improvements had been constructed under the direction and supervision, or under the authority, of the City.

Generally, in-tra ct infrastructure will not be financed through the City’s use of the Act, and financing of public improvements in tandem with the provision of credits toward the payment of development impact fees will be considered on a limited case-by-case basis at the City’s sole discretion (and may be limited or excluded due to federal tax law considerations).

3. Public
Improvements of other Public Agencies. The third priority of the City is to assist in the provision of public facilities of other public agencies, when to do so is beneficial, in the sole discretion of the City, to serve the taxpayers residing within or owning property within the City boundaries.

4. Gene
ral Exclusion of Private Facilities. Generally, the City will not finance privately-owned improvements.

D. Eligible Incidental Costs
Eligible incidental costs which may be financed ·from the proceeds of special tax bonds issued for a Facilities CFD or the special tax levied within a CFD shall be limited to those incidental costs directly related to the improvements being financed or maintained by the CFD.

E. Required Value-to-Debt Ratio
It is the policy of the City that the value -to-debt ratio (defined as the full cash value of the properties subject to the levy of special taxes, including the value of the improvements to be financed, compared to the aggregate amount of the special tax lien proposed to be created, plus any prior fixed assessment liens and/or special tax liens) for a Facilities CFD shall be at least 4:1. The required value-to-debt ratio shall be determined with respect to all taxable property within the Facilities CFD in the aggregate and with respect to each development area for which no final subdivision map has been filed.

A Facilitie
s CFD with a value -to-debt ratio of less than 4: 1, but equal to or greater than 3:1 may be approved, in the sole discretion of the City Council, upon a determination by the City Manager, after consultation with the Finance Director, the bond counsel, the underwriter and the fi nancial advisor, that a value-to-debt ratio of less than 4:1 is financially prudent under the circumstances of the particular Facilities CFD and in the best interests of the Resolution No. 2020-20
Exhibit A

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City.

F. Criteria for Appraisals

Property value may be based on either an appraisal or on assessed values as indicated on the current assessor’s tax roll. When an appraisal is the property valuation method used, it is the goal of the City to conform, as nearly as practicable, to the California Debt and Investment Advisory Commission’s Appraisal Standards for Land- Secured Financings, as such standards may be amended from time to time. In any event, the value -to- lien ratio, when based upon an appraisal, shall be determined based upon an appraisal by an independent MAI appraiser of the property proposed in the Facilities CFD. The appraisal shall be coordinated by and under the direction of the City. All costs associated with the preparation of the appraisal report shall be paid by the entity r equesting the establishment of the Facilities CFD or through the deposit.

G. Special Tax Requirements

The rate and method of apportionment of the special tax for any CFD shall adhere to the following requirements:

1. The maximum special tax shall be adequate to include an amount necessary to pay for the expenses incurred by such CFD in the levy and collection of the special tax and the administration of the special tax bonds and the CFD. ·

2. The maximum projected annual special tax revenues must equal at least 110% of the projected annual gross debt service on any bonds of the Facilities CFD after deducting estimated annual administrative expenses and incidental costs of the Facilities CFD.

3. All developed and undeveloped property within a CFD which is not otherwise statutorily exempt from the levy of special taxes shall bear its appropriate share of the aggregate special tax obligation from the date of formation of the CFD consistent with the other goals and policies herein.

4. A partial prepayment option at the time of initial sale and a total prepayment option at any time shall be included in any rate and method of apportionment of special taxes to pay for public facilities. No prepayment shall be permitted of a special tax levied to finance authorized services or maintenance.

5. The rate and method of apportionment of a special tax to pay for public facilities shall specify a fiscal year beyond which the special tax may not be levied on any parcel used for private residential purposes . A special tax to pay for public services or maintenance shall have no termination date unless Resolution No. 2020-20
Exhibit A

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established by the City Council.

H. Determination of Special Tax Formula; Maximum Aggregate Taxes and Assessments

The special tax formula shall be reasonable in allocating public facilities’ costs to parcels within the Facilities CFD. At the time of formation of the Facilities CFD, exemptions from the special tax may be given to parcels which are publicly owned, are held by a property owner’s association, are used for a public purpose such as open space or wetlands, are affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness.

The maximum annual special tax installment applicable to any parcel used for residential purposes shall not exceed 0.75% of the sale price of newly developed properties subject to the levy of the special tax as of the date of the close of escrow of the initial sale of any residential dwelling unit to such residential home owner.

The total tax burden (consisting of the anticipated annual special tax of the proposed CFD, together with ad valorem property taxes, special assessments, special taxes for any overlapping community facilities district, City Services CFD, and any other governmental taxes, fees and charges payable from and secu red by the property) (the “Total Tax Burden”) on any parcel in the proposed CFD on which a for-sale residential unit has been, is being or is to be constructed shall not exceed

2.00% of the estimated base sales price of such parcel. The Homeowner’s Exemption shall not be factored into such calculation. The estimated base sales price of such parcel shall be determined in the sole discretion of the City, but generally for new development s, the City would seek an independent market consultant with substantia l experience to prepare a market study that determines such base prices. This service will be paid for through the developer’s deposit.

Generally, debt service on CFD bonds attributable to a predominantly residential CFD shall be substantially level. It is further the policy of the City to comply with the provisions of Section 53321 of the Act with respect to the escalation of maximum special taxes. In the event debt service of a predominantly residential CFD is proposed to escalate up to 2% per year, the Total Tax Burden as de scribed above shall not exceed [1.80%] of the estimated based sales price of such parcel.

In all circumstances, the City has sole discretion on the structure of debt service for a proposed Facilities CFD. Generally, the City shall review and ensure the Total Tax Burden limit is maintained both at formation of the Facilities CFD and at the time of the issuance of the first series of bonds within such Facilities CFD.

I. Terms and Conditions of Special Tax Bonds

Resolution No. 2020-20
Exhibit A

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All terms and conditions of any special tax bonds issued by the City for any Facilities CFD, including, without limitation, the sizing, timing, term, interest rates, discount, redemption features, flow of funds, investment provisions and foreclosure covenants, shall be established by the City. Each special tax bond issue shall be structured to adequately protect bond owners and to avoid negatively impacting the bonding capacity or credit worthiness of the City. Further, it is the policy of the City to comply with all provisions of the Act including, but not limited to, Section 53345.8, as such Section may be amended from time to time.

Unless otherwise approved by the City Council, the following shall serve as minimum bond requirements:

1. A reserve fund shall be established for each bond issue to be funded out of the bond proceeds in an amount equaling the lowest of (i) ten percent (10%) of the original proceeds of such bonds, or (ii) the largest amount, for any bond year during the term of such bonds, of principal and interest payable on such bonds, or (iii) one hundred twenty-five percent (125%) of the average amount payable, for any bond year, or principal and interest on the outstanding bonds of such bond issue (provided, however, that depletion may occur to pay debt service in the last two (2) years of such term), or (iv) such lessor amount as may be required by federal tax law or by recommendation of the City’s underwriter or financial advisor.

2. Interest shall be capitalized for a bond issue only so long as necessary to place the special tax installments on the assessment roll; provided, however, interest may be capitalized for a term to be established in the sole discretion of the City Council on a case -by-case basis, not to exceed an aggregate of 18 months, taking into consideration the value -to-debt ratio, the expected timing of initial residential occupancies, expected absorption a nd buildout of the project, the expected construction and completion schedule for the public improvements to be funded from the proceeds of the bond issue in question, the size of the bond issue, the development pro forma and the equity position of the applicant and such other factors as the City Council may deem relevant.

3. In instances where multiple series of bonds are to be issued, the City shall determine what improvements shall be financed from the proceeds of each series of bonds.

4. Neither the faith, credit or taxing power of the City shall be pledged to the payment of the bonds. The sole source of revenue for the payment of the bonds shall be the special taxes, capitalized interest, if any, and moneys on deposit in the reserve fund established for such bonds.

J. Disclosure to Property Purchasers in CFDs

Resolution No. 2020-20
Exhibit A

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The applicant for the formation of a Development Related CFD will be required to demonstrate to the satisfaction of the City Manager that there will be full disclosure of the special tax obligation for such CFD, and of any and all other special taxes or assessments on individual parcels, to prospective purchasers or lessees of property within such CFD, including interim purchasers, merchant builders, residential homeowners and commercial or industrial purchasers or lessees. The applicant must agree to provide an original copy of all applicable disclosure documents to the City prior to initiating property sales.

Such disclosure shall be placed in all sales brochures, other on-site advertising and purchase documents and must include all of the following in addition to such other provisions required by Section 53341.5 of the Act, at the time set forth therein, other state or federal law, the Municipal Code of the City or as the applicant may deem necessary and prudent:

1. Provide for full disclosure of the existence of the special tax lien and any other assessment or special tax obligation applicable to the properties within the CFD (whether imposed by the City or any other public agency). This shall include the principal amount, term and amount of the expected payments of the special taxes or assessments and the maximum authorized amounts.

2. Provide the ability for the prospective purchaser to elect to exercise the option either to prepay the special tax obligation for the applicable Facilities CFD at the close of escrow or to have the special taxes included in the property taxes for the property.

3. Specify in all disclosure documents the name, title, telephone number and address of a representative of the City as provided to the applicant who may be contacted by any prospective purchaser of property within the CFD for further information regarding the CFD and special tax liens.

K. Preformation Cost Deposits and Reimbursements

Except for those applications for CFDs where the City is the applicant, all City and consultant costs incurred in the evaluation of applications and the proceedings to form a CFD and issue special tax bonds therefore will be paid by the applicant by advance deposit with the City of mo neys sufficient to pay all such costs. Such initial deposit shall not be an amount less than $100,000, or as determined by the CFD Application Review Committee provided for in Section L herein upon initial intake of the Application.

Each application for the formation of a CFD shall be accompanied by an initial deposit in an amount to be determined by the City Manager to be adequate to fund the evaluation of the application and undertake the proceedings to form the CF D and issue the special tax bonds therefor. The City Manager may in his or her sole Resolution No. 2020-20
Exhibit A

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discretion permit an applicant to make periodic deposits to cover such expenses rather than a single lump sum deposit; provided, however, no preformation costs shall be incurred by the City in excess of the amount then on deposit for such purposes, If additional funds are required to pay required preformation costs, the City Manager may make written demand upon the applicant for such additional funds and the applicant shall deposit such additional funds with the City within five (5) working days of the date of receipt of such demand or other such time period or terms as may be stipulated by executed written agreement with the applicant.

Upon the depletion of the funds deposited by applicant for preformation costs, all proceedings shall be suspended until receipt by the City of such additional funds as the City Manager may demand.

The deposits shall be used by the City to pay for costs and expenses incurred by the City incident to the evaluation of the application and the proceedings for the formation of the CF D and the issuance of the special tax bonds therefor, including, but not limited to, legal, special tax cons ultant, engineering, appraisal market absorption, financial advisor, administrative and s taff costs and expenses, required notifications, printing and publication costs.

The City shall refund any unexpended portion of the deposits upon the occurrence of one of the following events :

1. The formation of the CFD or the issuance of the special tax bonds;

2. The formation of the CFD or the issuance of the special tax bonds is disapproved by the City Council;

· 3. The proceedings for the formation of the CFD and the issuance of the special tax bonds are abandoned at the written request of the applicant; or

4. The special tax bonds may not be issued and sold.

Except as otherwise provided herein, the applicant shall be entitled, at the option of the applicant, to reimbursement of or credit against special taxes for all amounts deposited with the City to pay for costs incident to the evaluation of the application and the proceedings for the formation of the CFD and t he issuance of the special tax bonds therefor upon the formation of the CFD and the successful issuance and sale of the special tax bonds for the CFD. Any such reimbursement shall be payable solely from
the proceeds of the special tax bonds.

The City shall not accrue or pay interest on any moneys deposited with the City.

L. Application Procedure for Development Related CFDs
Any application for the establishment of a CFD shall contain such information and be submitted in such form as the City Manager may require. In addition to such Resolution No. 2020-20
Exhibit A

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information as the City Manager may require, each application must contain:

1. Proof of authorization to submit the application on behalf of the owner of the property for which the application is submitted if the applicant is not the owner of such property.

2. Generally, e vidence satisfactory to the City Manager that the applicant represents or has the consent of the owners of not less than 100%, by area, of the property proposed to be subject to the levy of the special tax.

3. For any Development Related CFD proposed to finance improvements to benefit new development, a business plan for the development of the property within the proposed CFD and such additional financial information as the City Manager may deem necessary to adequately review the financial feasibility of the CFD. For Development Related CFDs proposed to finance improvements to benefit new development, the applicant must demonstrate to the satisfaction of the City Manager the ability of the owner of the property proposed to be developed to pay the special tax installments for the CFD and any other assessments, special taxes and ad valorem taxes on such property until full build out of the property.

It is the intention of the City Council that applicants for a CFD have an early opportunity to have the application reviewed by City staff for compliance with this policy. In that regard, the City Council hereby directs the City Manager to create a CFD Application Review Committee (“Committee”) composed of the City Manager, City Attorney, Director of Public Works, City Engineer, Planning Director, Finance Director and such additional persons as the City Manager may deem necessary. The Committee shall meet with the applicant for a CFD for the purpose of reviewing an application to form a CFD following the determination by the City Manager that the information contained in the application for such CFD complies with the requirements of this policy.

Following the review of such an application, the Committee shall prepare and submit a report to the City Council containing the findings and recommendations of the Committee regarding the application. Following completion of the Committee report, the City Manager shall place the application on the City Council agenda for review. After review of the application and consideration of the Committee report, the City Council shall determine whether or not to approve
the initiation of the proceedings from the CFD. The decision of the City Council pertaining to the application shall be final.

The ability of a property owner or developer to obtain financing of public improvements from the proceeds of tax-exempt bonds provides substantial economic benefits to such owner or developer, not the least of which may be the Resolution No. 2020-20
Exhibit A

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financing of such improvements at interest rates substantially lower than conventional financing interest rates, if such conventional financing is available, and/or the ability to obtain financing without providing equity compensation to the lender. Given these benefits and consideration to the property owner or developer, the City Council believes the City should benefit from the project and/or CFD financing plan in a substantial way as determined by the City in its sole discretion.

M. Land Use Approvals

Properties proposed to be included in a Development Related CFD must have received such discretionary land use approvals as determined by the City to be necessary to enable the City to adequately evaluate the CFD, including but not limited to the properties to be inc luded and the improvements proposed to be financed. The City will issue bonds secured by the levy of special taxes within a Development Related CFD when (i) the properties included within such CFD have received those applicable discretionary land use approvals which would permit the development of such properties consistent with the assumptions utilized in the development of the rate and method of apportionment of the special taxes for such CFD, and (ii) applicable environmental review has been completed.

Land use approval for development, such as zoning, specific plan or subdivision approval are to be granted as a part of the City's ongoing planning and land use approval process. In granting such approval, the City reserves such rights as may be permitted by law to modify such approvals in the future as the City Council determines the public health, safety, welfare and interest may require. Suc h approval when granted is subject to a condition that the construction of any part of the development does not, standing alone, grant any rights to complete the development of the remainder of such development. Construction of public improvements to serve undeveloped land financed through a Facilities CFD shall not vest any rights to the then existing land use approvals for the property assessed for such improvements or to any particular level, type or intensity of deve lopment or use. Applicants for a Development Related CFD must include an express acknowledgment of this policy and shall expressly waive on their behalf , and on behalf of their successors and assigns , any claims or causes of action at law or in equity including, but not limited to, ta king or damaging of property, for reassessment of property , or denial of any right protected by U nited States Code Section 1983 which might be applicable to the properties to be assessed.

N. Exceptions to these Policies

The City may find in limite d and exceptional instances that a waiver to any of the above stated policies is reasonable given identified special City benefits to be derived from such waiver. Such waivers will be granted only by action of the City Council.

Resolution No. 2020-20
Exhibit A

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Ja
nuary 13, 2023
Andr
ew Firestine
Director of Development Services
City of Escondido
201 North Broadway
Escondido, CA 92025
[email protected]
Re:

CFD Financing Request for Tract No. SUB18-0005 & 20-0007 Mr
. Firestine:

On beha
lf of Nutmeg 134, LLC , I am writing to follow up on various discussions between City staff and the developer team regarding a community facilities district for the above referenced project. The enclosed contains a description of the project and outlines the major points with respect to the proposed CFD.

We ap
preciate your review and consideration of the attached. Please feel free to contact me with any questions or comments.

Si
ncerely,
Jim
Zimmerman
cc: S
ean McGlynn; City of Escondido
John Martin; Nutmeg 134, LLC
Jakki Tonkovich; Nutmeg 134, LLC
David Hendryx; Nutmeg 134, LLC
Jim Simmons; Consultants Collaborative, Inc.

Attachment "2"

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CFD Financing Request – Nutmeg 134, LLC
Proposed City of Escondido CFD
January 13, 2023

Nutmeg 134, LLC (“Developer”) is the owner of approximately 7.5 acres within Tract No. SUB18- 0005 & 20-0007 (“Project”) in the City of Escondido (“City”). The Project is planned for 134 single family residential condominium units and is located at the southwest corner of N. Nutmeg Street and N. Centre City Parkway. The Project is also within the boundary of Rincon Del Diablo Water District (“Water District”). A site plan showing the location and development plan of the Project is attached as Exhibit A. Developer is in the process of selling the Project to a merchant homebuilder (“Builder”) for the construction of the homes. Developer and Builder are proposing the formation of a community facilities district (“CFD”) by the City to finance certain City and Water District development impact fees which fund public capital facilities . The following outlines the proposed structure of the CFD.

1. Lead Agency – The City would act as the lead agency in forming the CFD; however, the City would not incur any costs related to CFD formation since the Developer/Builder will deposit funds with the City to pay for the costs of forming the CFD and entering into the associated agreements. Such deposits would be reimbursed from proceeds of the CFD special tax bonds when issued.

2. CFD Boundary – The boundary of the CFD would include only the property within the Project.

3. CFD Facilities – The CFD would be authorized to fund eligible City development impact fees Water District impact fees. The attached Exhibit B shows the estimated costs of the facilities anticipated to be financed by the CFD. Exhibit B may need to be updated to reflect recent fee increases.

4. Water District JCFA – Developer, City, and Water District would enter into a Joint Community Facilities Agreement (“JCFA”) to allow for the funding of Water District facilities.

5. CFD Special Taxes and Property Tax Rates – The attached Exhibit C details the proposed special tax rates and expected total effective property tax rate for the Project . As shown in Exhibit C, the total property tax rate is estimated to be approximately 1.76% of the anticipated home prices. The CFD special taxes and bond debt service are proposed to escalate by 2% each year.

6. Priority Administration Costs – So that the City does not incur any annual costs related to the CFD, $35,000 as a first priority of special taxes has been assumed for annual costs of administering the CFD. Additional administration costs may be funded from special taxes not needed to pay for bond debt service.

7. Bond Issuance – T he CFD would issue bonds with a term of not less than 30 years in the amount that could be supported based on the special tax revenues providing 110% debt service coverage every year . The CFD bonds would be secured solely by the property within the boundary of the CFD and payable solely from the CFD special tax revenues. Builder and City Attachment "2"

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would work together to issue the bonds once there is sufficient development within the Project and based to sound municipal financing practices. The attached Exhibit D shows the estimated bond proceeds and corresponding estimated debt service schedule. Proceeds of the bonds (net of the underwriter’s discount) would be allocated according to the following priority:
a. First – To fund the costs of issuing the bonds such as bond counsel fees, appraisal fees, municipal advisory fees and reimbursement of Developer’s deposit for CFD formation costs.
b. Second – To fund the required reserve fund for the bonds. c. Third – To fund capitalized interest in an amount requested by Developer not to exceed 24 months.
d. Fourth – To fund an account to finance the City facilities. e. Fifth – To fund an account to finance the Water District facilities.

8. Funding Agreement – In connection with forming the CFD, Builder and City would enter into a funding agreement regarding the issuance of the bonds and the funding of the authorized facilities.

9. Schedule – The proposed general schedule for CFD formation is as follows. a. March 2023 – Builder provides deposit of funds to City. b. May or June 2023 – City Council considers approval of a resolution of intention to form the CFD.
c. June or July 2023 – City Council considers approval of a resolution to form the CFD and conducts a public hearing and special election related to the CFD.

Attachment "2"

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Attachment "2"

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Exhibit B
Nutmeg Homes
Proposed List of CFD Eligible Facilities
January 13, 2023
Per Unit Total
Attached Condominium Units (37 2BR and 97 3BR) 134
City of Escondido Development Impact Fees [a]
Public Facility Fee 4,970$ 665,979$
Drainage Facilities Fee 469 62,875
Water Connection Fee - -
Wastewater Connection Fee (Per Unit Average) 6,982 935,625 Parks 6,664 892,944
Local Traffic Fee 2,095 280,780
Regional Traffic Fee 2,636 353,157
Total 23,816$ 3,191,360$
Rincon del Diablo Municipal Water District [b]
3/4" Meter Drop-in Fee 320$ 42,880$

1.5" Meter Drop-in Fee (Qty 2) 10 1,360 3/4" Rincon Capital Facilities Fee 5,024 673,216

1.5" Rincon Capital Facilities Fee (Qty 2) 250 33,492 Total 5,604$ 750,948$
Total City and Water District Fees 29,420$ 3,942,308$ Footnotes:
[a] City fees for attached condo units.
[b] Rincon del Diablo Municipal Water District 5/8" or 3/4" fees per fee schedule effective January 1, 2022. - All fee estimates based on DIF Estimate from MurowCM dated 4/22/2022.

Attachment "2"

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Exhibit C
Nutmeg Homes
Proposed City of Escondido CFD
CFD Effective Tax Rate & Funding Analysis
January 13, 2023
Bond Issuance Assumptions Estimated Sources & Uses of Funds Allocation of Improvement Fund Weighted Average Bond Yield 5.25% Sources 4,800,000$ City CFD Per Unit Total Priority Administrative Expense 35,000 City Impact Fees 23,816 $ 3,191,360$ Capitalized Interest (Months) 2 Uses Rincon Water Fees 5,604 750,948 Underwriter Discount 1.50% Reserve Fund 445,671$ Total 29,420 $ 3,942,307$ Debt Service Coverage 110% Capitalized Interest 41,274
Debt Service Escalation 2.00% Underwriter Discount 72,000 Total Annual Special Taxes 301,592$ Cost of Issuance 298,748 Improvement Fund 3,942,307
Total Uses 4,800,000$
Land Use Information & Total Property Tax Rates Special Tax Revenues Ad Other EUSD City CFD Total Annual
Unit Home Sq. Ft. Base Valorem Fixed CFD No. Special Tax Total Tax Effective CFD Special Unit Annual Tax Type Size (a) Category Price (a) Taxes (b) Charges (c) 2019-1(d) Per Unit (e) Per Unit Tax Rate Tax Mix (a) Collections Villas 1,104 ≤ 1,150 550,000$ 6,306$ 823$ 477$ 2,101$ 9,708$ 1.77% 2,101$ 25 52,527$ Villas 1,339 1,151 - 1,350 595,000 6,822 823 579 2,179 10,403 1.75% 2,179 60 130,738 Villas 1,646 1,551 - 1,750 650,000 7,453 823 712 2,470 11,457 1.76% 2,470 - - Rowhomes 1,210 1,151 - 1,350 570,000 6,535 823 523 2,179 10,061 1.77% 2,179 12 26,148 Rowhomes 1,500 1,351 - 1,550 625,000 7,166 823 648 2,394 11,031 1.77% 2,394 12 28,725 Rowhomes 1,610 1,551 - 1,750 645,000 7,395 823 696 2,470 11,384 1.77% 2,470 12 29,639 Rowhomes 1,950 1,751 - 1,950 690,000 7,911 823 843 2,601 12,179 1.77% 2,601 13 33,816 1,382 600,746$ 6,888$ 823$ 597$ 2,251$ 10,559$ 1.76% 2,251$ 134 301,592$ Footnotes:
(a) Product and pricing provided by Developer.
(b) Ad Valorem taxes total 1.14654% of the assessed value for FY 22-23. (c) Estimated other fixed charges and assessments for FY 22-23: Amount Vector Disease Control 2.08
CWA Water Availability 10.00
MWD Water Standby Charge 11.50
Mosquito Surveillance 2.28
Escondido CFD No. 2020-1 (Maintenance and Services) (f) 797.32 823.18
(d) Represents the 2022/23 Special Tax Rates for the Escondido Union School District CFD 2019-1 into which the project will annex. Rates assumed to increase by 2% per year. (e) Represents the 2022/23 Special Tax Rates for the proposed City of Escondido CFD. Rates assumed to increase by 2% per year. (f) Represents the 2022/23 Special Tax Rate for project densities between 5.5 and 18 units/acre for City of Escondido CFD No. 2020-1 (Services) to fund public services and project

Attachment "2"
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Exhibit D
Nutmeg Homes
Proposed City of Escondido CFD
Estimated Debt Service & Bond Sizing Schedule
January 13, 2023

ISSUANCE ASSUMPTIONS ESTIMATED SOURCES AND USES
Closing Date 7/1/2025 Sources
Special Tax Rev. Escalation 2.000% Par Bond Amount 4,800,000$ Annual Admin. Expense 35,000$
Admin. Expense Escalation 2.000% Uses
Debt Service Coverage Ratio 110% Reserve Fund 445,671$
Underwriter Discount Est. 1.500% Capitalized Interest 41,274 Issuance Costs Est. 298,748$ Underwriter Discount 72,000 Months of Cap. Interest 2.00 Costs Of Issuance 298,748 Construction Fund 3,942,307
Total Uses 4,800,000$

BOND DEBT SERVICE
Period Gross Priority Capitalized Net Debt Debt Service Ending Revenues Admin Principal Yield Interest Interest Service Coverage 9/1/2025 313,776$ 36,414$ -$ 2.756% 41, 274$ 41,274$ -$ NA 9/1/2026 320,051 37,142 5,000 2.956% 247, 644 - 252,644 111.98% 9/1/2027 326,452 37,885 10,000 3.156% 247, 496 - 257,496 112.07% 9/1/2028 332,981 38,643 20,000 3.356% 247, 181 - 267,181 110.16% 9/1/2029 339,641 39,416 25,000 3.556% 246, 509 - 271,509 110.58% 9/1/2030 346,434 40,204 30,000 3.756% 245, 620 - 275,620 111.11% 9/1/2031 353,363 41,008 35,000 3.956% 244, 494 - 279,494 111.76% 9/1/2032 360,430 41,828 45,000 4.106% 243, 109 - 288,109 110.58% 9/1/2033 367,638 42,665 50,000 4.256% 241, 261 - 291,261 111.57% 9/1/2034 374,991 43,518 60,000 4.406% 239, 133 - 299,133 110.81% 9/1/2035 382,491 44,388 70,000 4.556% 236, 490 - 306,490 110.31% 9/1/2036 390,141 45,276 75,000 4.706% 233, 301 - 308,301 111.86% 9/1/2037 397,944 46,182 90,000 4.806% 229, 771 - 319,771 110.00% 9/1/2038 405,903 47,105 100,000 4.906% 225, 446 - 325,446 110.25% 9/1/2039 414,021 48,047 110,000 4.956% 220, 540 - 330,540 110.72% 9/1/2040 422,301 49,008 120,000 5.006% 215, 088 - 335,088 111.40% 9/1/2041 430,747 49,989 135,000 5.056% 209, 081 - 344,081 110.66% 9/1/2042 439,362 50,988 150,000 5.086% 202, 255 - 352,255 110.25% 9/1/2043 448,149 52,008 165,000 5.116% 194, 626 - 359,626 110.15% 9/1/2044 457,112 53,048 180,000 5.146% 186, 185 - 366,185 110.34% 9/1/2045 466,254 54,109 195,000 5.256% 176, 922 - 371,922 110.81% 9/1/2046 475,580 55,191 215,000 5.256% 166, 673 - 381,673 110.14% 9/1/2047 485,091 56,295 230,000 5.256% 155, 372 - 385,372 111.27% 9/1/2048 494,793 57,421 250,000 5.256% 143, 284 - 393,284 111.21% 9/1/2049 504,689 58,570 275,000 5.256% 130, 144 - 405,144 110.11% 9/1/2050 514,783 59,741 295,000 5.356% 115, 690 - 410,690 110.80% 9/1/2051 525,078 60,936 320,000 5.356% 99, 889 - 419,889 110.54% 9/1/2052 535,580 62,155 345,000 5.356% 82, 750 - 427,750 110.68% 9/1/2053 546,291 63,398 370,000 5.356% 64, 272 - 434,272 111.20% 9/1/2054 557,217 64,666 400,000 5.356% 44, 455 - 444,455 110.82% 9/1/2055 568,362 65,959 430,000 5.356% 23, 031 - 453,031 110.90% Total 13,297,646 1,543,205 4,800, 000 5.250% 5, 598,984 41,274 10,357, 710 110.00% Attachment "2"

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STAFF REPORT

March 8, 2023
File Number 0430-80; 0600-10; A-3449

SUBJECT
FINANCIAL REPORT FOR THE QUARTER ENDED DECEMBER 31, 2022 AND BUDGET ADJUSTMENT

REQUEST

DEPARTMENT
Finance

RECOMMENDATION
It is requested that the City Council:

A. Receive and file the second quarter financial report for FY2022/23 (Attachment 1); B. Adopt Budget Adjustments (Attachment 2) to amend the fiscal year 2022/23 operating budget; C. Adopt Resolution No. 2023-26 Authorizing a services agreement with Avolve Software Corporation in an amount not to exceed $579,000 to provide SaaS (Software as a Service) and the implementation of ProjectDox for plan review processes.

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

FISCAL ANALYSIS
See Below.

PREVIOUS ACTION
On December 7, 2022, the City Council received the Fiscal Year 202 1/22 Financial Status Report for the fiscal year ending June 30, 2022.

BACKGROUND
The City Council Budget and Financial Policies require that the City present quarterly financial reports each fiscal year. The purpose of this report is to provide City Council and the public a financial update of selected funds of the City. This report provides the City Council with the analysis of unaudited revenues and expenditures for Fiscal Year 2022/23 in comparison to Fiscal Year 2021/22 for the General Fund, the Water Fund, and the Wastewater Fund. The financial highlights for each of these funds are summarized below.

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General Fund
Prior to the onset of the COVID -19 pandemic, the City experienced a stable economy with moderate revenue growth averaging 4% annually. Then in March 2020, the public health measures and restrictions due to the pandemic forced government operations and private businesses to close or drastically alter operations, actions that many anticipated would create a severe economic downturn comparable to the Great Recession, which had a devastating impact on the City’s General Fund. However, the COVID-19 restrictions began to be lifted in FY2020/21 and a combination of California fully reopening its economy, improved vaccination rates, public health measures to reduce the spread of the COVID -19 virus, and additional federal funding allowed for additional public activities and improved the economic environment.

The General Fund has benefitted from improved revenue activity since the recovery period of COVID-19, from the end of 2020 through 2022. However, operating revenue has not kept pace with the growing costs of providing City services, and as a result t he General Fund long -term financial plan has projected annual deficits creating a structural b udget deficit . To address this projected shortfall, the City has minimized increases in expenditures when possible 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. In the Preliminary Operating Budget Workshop on May 11, 2022, the City Council direction was to prepare a General Fund Operating Budget that 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 the proposed operating expenses for FY2022/23. Projected operating revenue was increased by $1.4 million due to updated information received subsequent to the May 11, 2022 budget workshop.

General Fund operating expense reductions of $7.1 million were proposed by staff, and t he proposed reductions and modifications to City services were sufficient to close the FY2022/23 budget gap.

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 one -time funds from the American Rescue Plan Act (ARPA) funds and the Section 115 Pension Trust fund. To maintain a balanced budget and yet continue an appropriate level of service and address City priorities, the adopted FY2022/23 budget utilizes $3.7 million from the American Rescue Plan Act.

Through the end of December, operating revenue is at 35% of the total amount projected and has exceeded the prior year by about $2.1 million . This is primarily due to increases in Property Tax, Other Taxes, and Charges for Services.
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The largest source of revenue for the General Fund is sales tax revenue at 43%. As a result of high inflation and strong consumer spending, sales tax revenue in Escondido recovered quickly, increasing by $5.6 million or 13% in FY2021/22, and is anticipated to increase in FY2022/23 by 10% to reach $51.0 million .

Actual sales tax receipts are under the December 2021 amount by $136,020, indicating that the economy is slowing from the post pandemic surge in spending. City staff will continue to monitor economic indicators and sales tax revenue closely and return to Council with updates during the fiscal year.

Actual General Fund expenditures are at 47% of the total operating budget through December 2022 . In addition to the cuts to expenditures approved in the FY2022/23 operating budget , to account for projected annual expenditures savings experienced for items such as employee service savings resulting from vacant positions, the adopted budget includes a cost savings budget reduction of $1 mill ion, offset by a Cost Savings Contingency amount of $400,000 to give some flexibility in managing available resources to be used throughout the fiscal year under the direction of the City Manager. Attachment 1 to this staff report includes an analysis of operating expenditures as of December 2022 and a status update of the Cost Savings Reduction by major expenditure category.

Recommended Budget Adjustments:
 Approve an increase to the Fire Department operating budget of $ 693,860 for the following purposes:

Increase Overtime and Maintenance - $605,720: The adjustment to the Fire Department overtime budget is necessary primarily due to the overtime incurred as a result of the deployments to wildfires this fiscal year through California and Oregon. EFDs assistance to other jurisdictions under the California Fire Assistance Agreement coordinated through the Office of Emergency Services fully reimbursed the City for the direct and backfill overtime created as a result of the deployments. The increase to expenditures is offset by reimbursements from CalOES, there is no net effect to the General Fund.

Increase for Training Tower Pump Repair - $58,140: The training tower at Fire Station 1, which is used for a variety of firefighter training activities, uses a 25,000 -gallon water cistern and a pump to flow, collect and recycle water. The pump system failed requiring the purchase and installation of a new controller and the refurbishment of the pump and motor. In addition, the UV water disinfection system, which had failed in 2021, was repaired. Fortunately, City wastewater personnel provided the expertise and labor to disassemble the equipment and install the new and refurbished parts of the system, which made the fire training facility operational.

Increase for the Fire Chief Conference Room - $30,000: After 12 years of almost daily use, the audio/visual system in the Fire Chief Conference room failed in November 2022 and replacement parts are no longer available. In addition to routine business use, the 166
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conference room is used during Emergency Operation s Center activations when the functionality of the teleconference system is critical. The project includes upgrading from the old analog system to current digital technology with the purchase and installation of new screens, projectors, cabling and other system controller equipment.

 Approve an Increase for Engineering Department Professional Services - $196,060: In order to continue to provide services timely while several staff positions are vacant in the Development Services department, the Engineering Department entered into a professional services contract with CValdo Corporation to assist with the review of grading, street, storm drain, sewer, and water improvement plans; drainage studies; storm water quality management plans; cost estimates; easement documents; and final maps. The increase for the contractual services will be offset by the savings in employee services in the department.

 Approve a Services Agreement with Avolve Software to provide Software as a Service and Implement ProjectDox for plan review purposes - $228,480 FY2022/23 Budget Adjustment (full contract amount is not to exceed $579,000) : In 2017 the City set out to digitize government by bringing municipal services online, and reducing the restriction of business hours and the need to travel to City Hall. One area of focus was Development Services. Staff’s Research found a “best in breed” combination of enterprise solutions that worked in concert to bring Business Licenses, Code Compliance, Planning, Engineering, Field Engineering, Utilities Engineering, Building, and Fire Department services into an electronic online system. A component of these technology systems was Electronic Plan Review. The benefit of a modular solution combining integrated systems, is the ability to replace one of the pieces when a superior solution is identified.

Information Systems is seeking Council approval for a budget adjustment to replace the Electronic Plan Review software, and Council approval for the purchase of software and consulting services to implement this software. The following sections will outline the process staff went through to identify the nee d for this change, and how Staff identified the new solution for Electronic Plan Review software.

Evaluation Process

When the City implements solutions to deliver municipal services, it sets a business/technology life cycle in place for future evaluation of the solution. During these evaluations, staff look for changes in the internal and/or external environment; the current needs, requirements, and goals; and conduct a review of the initial success metrics. In the case of digitizing government, and more specifically development services, we found that the City’s original selection of “best in breed” collections of software integrated solutions was working, but the City’s goals have changed in regard to the electronic plan review component. This led to a discovery process looking for possible solutions.

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The discovery process included requirement gathering, such as they must be a Cityworks partner, and must integrate with the other systems that complete this solution. Staff found multiple vendors and went through a demo process with each. This was followed by many reference checks and an extensive gap/fit analysis where Staff identified over a hundred requirements for comparison. The final step in staff’s evaluation was to bring representatives from each se rvice area of the city to complete a deeper evaluation of the possible solution.

Selection Process

The delivering of municipal serv ices is a combination of people, process, and technology. In this case, the City’s goals have been reset for a higher level of transparency, increased data collection for leadership and management, and enhancements to the applicant and employee experience.

The combination of these goals will promote efficiencies for both the City’s customer/applicant and the staff providing this municipal service. This technology review led City staff to research and find ProjectDox by Avolve, an enterprise Software as a Service (SaaS) solution that meets the City’s current goals for electronic plan revi ew. Staff’s extensive research included a collaborative discussion with Cityworks, many other municipalities, and technical publications/reviews. Staff found this solution to be easier and clearer to navigate during the plans upload process, that it gives the applicant the ability to link their projects together, and it allows them to share visibility of the project with other users of their choice. It also improves transparency, as entered review comments can be immediately seen by the applicant, comment responses are interactive between reviewer and applicant eliminating the need for back -and-forth emails, markups are more easily visible and located in marked documents, and a detailed report of project status can be run at any time, including the total amount of time a project has been with the applicant, and total time with the City. City plan reviewers and coordinators will benefit from these improvements, as well as the “best of breed” specific plan review workflows that are a much better fit to City staff’s work processes than we currently have with the current solution’s one- size-fits-all workflow design. Moving from the current on -premise solution, to SaaS, frees the City’s internal technical resources from having to deploy, upgrade, and patch the application.

 Increase to the Fleet Services Fund Fuel budget - $350,000: Fleet Services is responsible for providing fuels (gasoline, diesel, and propane) for all City vehicles and equipment. On June 16, 2021, the City Council approved a contract with SC F uels, Inc. for the purchase of unleaded gasoline and diesel fuel. The contract is part of a fuel purchasing consortium sponsored by the City of San Diego. By creating a fuel purchasing consortium, local agencies benefit from collective fuel purchasing. On average, the City saves between $0.60 and $0.80 per gallon from regular pump prices. However, due to the recent record high cost of gasoline and diesel fuel, a budget adjustment of $ 350,000 is requested to fund fuel purchases for the remainder of the f iscal year. The FY202 2/23 Operating Budget for Fleet Services includes funding for annual fuel purchases of unleaded gasoline in the amount of $900,000, and diesel fuel in the amount of $300,000. The budget adjustment will increase the total annual fuel expense to $1,550,000. 168
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 Increase to the Library Services Grant budget - $82,010: The California State Library provides the Escondido Library with annual funding to support adult and family literacy services through the California Library Literacy Services grant program. Additional funds of $82,010 were awarded for FY2022/23, a budge t adjustment is recommended to increase the grant budget. There is no financial impact to the General Fund.

RESOLUTIONS
A. Resolution No. 202 3-26 Authorizing a service agreement with Avolve Software Corporation in an amount not to exceed $579,000 to provide SaaS (Software as a Service) and the implementation of ProjectDox for plan review processes.

B. Resolution No. 2023 -26 – Exhibit A Software as a Services Agreement with Avolve Software Corporation

ATTACHMENTS

1. Attachment 1 – Second Quarter Financial Status Report FY 2022/23

2. Attachment 2 – Budget Adjustment to amend the FY2022/23 operating and capital budgets

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1 FY2022/23 Financial Status Report
Second Quarter Ending December 31, 2022

OVERVIEW
This report summarizes the City’s financial position through the second quarter ending December 31, 2022 for the General Fund, Water Fund, and Wastewater Fund. The purpose of the report is to provide City Council, City Management, and the Escondido community an update on the City’s fiscal status based on the most recent financial information available . The revenue projections and budget information include adjustments for encumbrances, carryovers, and any other supplemental appropriations approved by the City Council as of December 31, 2022.

This report is for internal use only. The figures presented here are unaudited and have not been prepared in accordance with Generally Accepted Accounting principles (GAAP).

GENERAL FUND
The General Fund has benefitted from improved revenue activity since the recovery period of COVID-19, from the end of 2020 through 2022. However, revenues have not kept pace with the growing costs of providing municipal services, and the City’s structural budget gap remains.

The adopted FY2022/23 operating budget reflects an overall strategy of fiscal prudence on the part of the entire City workforce by maintaining a hardline on expenditures while also continuing to provide core City services including Public Safety, Public Works, Community Services, and Development Services, as well as the community’s priorities. However, to maintain a balanced budget and yet continue an appropriate level of service and address City priorities, the adopted FY2022/23 budget utilizes $3.7 million from the American Rescue Plan Act, a short-term, one-time source of funds.

Total budgeted operating revenue is projected to increase by 6.4% to reach $ 119.7 million and the adopted expenditure budget of $ 125.2 million increased by approximately $ 8.1 million or 6.9% compared to the revised FY2021/22 operating budget.

At the end of the second quarter, General Fund revenues are at 35% of the amended budget, while expenditures are at 47%, shown in the table below. The following report provides an analysis of General Fund financial activity through December 2022.

General Fund
Comparison of Projected FY2022/23 Operating Budget to Actuals FY2022/23

ADOPTED
BUDGET
FY2022/23

AMENDED
BUDGET

ACTUAL RESULTS
DECEMBER 2022 %
Total Operating Revenue $119,687,230 $119,929,230 $41,540,429 35% Total Operating Expenditures (125,186,930) (127,000,950) (60,056,375) 47% Other Sources (Uses) 1,764,670 1,764,670 1,764,670 -
Net Operating Surplus / (Deficit)* ($3,735,030) ($5,307,050) ($16,751,276) *FY2022/23 projected Operating Budget deficit closed with one-time revenue from the American Rescue Plan Act.

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

2 GENERAL FUND REVENUE
FY2022/23

AMENDED
BUDGET

ACTUAL RESULTS
DECEMBER 2022

ACTUAL RESULTS
DECEMBER 2021
Prior Year vs.

Current Year
Sales Tax $51,012,200 $16,381,110 $16,517,130 $(136,020) Property Tax 32,780,100 7,134,690 6,687,530 447,160 Other Taxes 14,659,860 4,968,530 4,232,300 736,230 Charges for Services 10,898,650 7,098,240 6,111,330 986,910 Permits and Licenses 1,778,500 2,723,010 2,824,760 (101,750) Fines and Forfeitures 832,500 342,450 461,520 (119,070) Intergovernmental 3,450,000 931,030 1,062,060 (131,030) Rental Income 3,775,920 1,874,770 1,816,860 57,910 Other Revenue 741,500 595,420 276,930 318,490
TOTAL OPERATING REVENUE $119,929,230 $42,049,250 $39,990,420 $2,058,830

Sales tax is the largest General Fund revenue source at 43% of total operating revenue followed by property tax, other taxes, and charges for services. The chart below shows the major categories of revenue collected through December 31, 2022 compared to the revenue collected in the prior year through December 31, 2021.

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

3 Sales Tax ($16.4 million)
The City works closely with its sales tax consultant,
AvenuInsights, in projecting sales tax revenue. Based on AvenuInsights’ analysis of the trend in year-to-date tax receipts and an examination of the local economy, the City’s sales tax revenue is anticipated to increase in FY2022/23 by 10% to reach $51.0 million.

Sales Tax revenue is highly sensitive to economic conditions and is impacted by the levels of unemployment, consumer confidence, and per -capita income that drive spending and growth in sales tax receipts. Over the past two years, since the onset of the COVID- 19 pandemic, the U.S. economy has swung from the deepest recession on record to a quick recovery and a surge of inflation. The pent-up demand for goods, as well as inflation, led to high er prices for goods, increasing the projected sales tax revenue generated within the City.

As a result of high inflation and strong consumer spending, sales tax revenue in Escondido also recovered quickly, increasing by $5.6 million or 13% in FY2021/22.

Actual sales tax receipts are under the December 2021 amount by $136,020, indicating that the economy is slowing from the post pandemic surge in spending.

The largest sales tax segment, 3 7% of total sales tax revenue, is Transportation, which includes new and used auto sales, auto repair shops, and service stations. Sales revenues increased by 8.1% compared to the same quarter in the prior year primarily due to new auto sales. In 2022, the lack of autos available for sale caused the prices for both new and used vehicles to soar ; however, the inventory is finally increasing from historic lows now that the recent supply chain disruptions and computer chip shortages have eased.

Petroleum per barrel costs increased significantly in the spring of 2022, and as a result receipts received from fuel and service stations increased by about 31% compared to the same quarter in the prior year. However, g as prices have steadily dropped for two consecutive quarters. As of December 2022, the average per gallon rate is at its lowest point in 2022 and is expected to continue to experience downward pressure.

Sales tax revenue received through the County Pool is now the second largest sales tax segment accounting for 19% of total sales tax revenue. Effective in April 2019, new taxable sales are distributed to the City under the AB 147 Wayfair decision which extended the sales and use taxes to online and out-of-state retailers engaged in business in California.

However, the increase in activity from the countywide pool experienced during the pandemic has slowed; total receipts remained flat compared to the prior year.

The Construction sales tax segment which accounts for revenue generated from building materials, includ ing both wholesale and general retail, increased from the prior year by about 18%. This can be attributed to increase s in the price of materials, including l umber and steel , and the continued high demand for home improvements and new construction in the City.

General Retail and Food Products combined make up 25% of the total sales tax revenue for the City and increased by

8.5% compared to the prior fiscal year. This growth reflects increased foot traffic and buying activity as people return to in-store shopping and indoor dining.

Transportation
37%
County Pool
19%
Construction
13%
General Retail
13%
Food Products
12%
Business to Business
7%
Sales Tax by Major Category
Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

4 Property Tax ($7.1 million)
Property Tax revenue increased by $447,159 or about 7% compared to the prior year. The largest portions of property tax revenue are distributed by the County in December and April each year. The FY202 2/23 Operating Budget projected property tax growth of 6%. This is attributed to an increase in current secured and unsecured tax projections, along with an increase in property transfer taxes based on the current and projected development activ ity, such as permits, inspections, and plan checks, which indicate continued growth in property sales.

Other Taxes ($5.0 million)
Other Taxes include franchise fee revenues, transient occupancy tax, and business license revenue and combined have increased by $736,233 compared to the prior year.

The City collects franchise fee revenues from San Diego Gas and Electric (SDG&E), cable companies conducting business within City limits, and Escondido Disposal Incorporated (EDI). Revenues received from franchise agreements increased by $731,000 from the prior fiscal year primarily due to an increase in fees collected SDG&E for electric generation from the Escondido Palomar Energy Plan.

Transient occupancy tax, also known as hotel tax, decreased by $50,823 compared to the prior year. The tourism industry was impacted significantly as a result of the closures, and many forecasted its recovery would take much longer than it has. In the prior fiscal year transient occupancy tax receipts increased by 49% from the pre-pandemic levels in March 2020. It is expected that those receipts will remain flat going forward as the activity stabilizes in the industry.

All entities doing business in the City are required to have a valid business license. The business license tax is calculated based on annual gross receipts ; business license revenue from the 202 2 calendar year is based off of 20 21 gross receipts. Business license revenues increased by $134,270 compared to the prior fiscal year.

Charges for Services ($7.1 million)
Charges for Services include paramedic fees, Community Services fees for recreational and community activities, and charges for development related services, which include Engineering and Planning fees. Community Service fees have increased by approximately $ 568,000 compared to the prior fiscal year primarily due to funding received from the school district to support the After-School Program. Development Services revenue also increased by about $490,000 million, due to the development projects occurring throughout the City.

Intergovernmental ($3.8 million)
Intergovernmental revenue includes the Rincon fire services agreement, state mandated cost claims, various grants, and revenue received from the fire mutual aid reimbursements. Overall revenue has decreased $101,750 compared to the prior year. The City’s Fire Department staff can be deployed to assist other State agencies with responses to fires and other incidents. The California Office of Emergency Services reimburses the City for the time and resources of the staff deployed. As of December 2022, reimbursements of $598,827 have been recorded.

Permits and Licenses ($931,035)
Revenue generated from permits and licenses decreased by $131,026 compared to fiscal year 202 1/22; however, construction and development activity continues driving building permit revenue compared to previous fiscal years.

Fines & Forfeitures ($342,542)
Fines & Forfeitures represent fees collected for vehicle code fines, parking ticket fines, other court fines, code enforcement citations, and impound fees.

Investment, Rental Income, and Other Revenues ($2.5 million) Investments, Rental Income, and Other Revenue includes rental income, interest earned from investing activities, and other miscellaneous receipts and has increased by $376,400 compared to the prior year.

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

5 GENERAL FUND OPERATING EXPENDITURES
The FY202 2/23 General Fund Operating Budget increased by approximately $ 6.6 million or 6% compared to the FY2021/22 revised Operating Budget. In order to address an $8.5 million budget deficit, reductions were made to the proposed operating budget including: reduction in the funding for Fleet Services, removal of new staff positions for Building Maintenance to provide City services that are unable to be outsourced, the management fee to the California Center for the Arts was reduced by $133,000, and alternative funding sources and reclassifications were proposed for fire equipment, Planning division professional services, a Grant Writer position, and Human Resources Analyst position.

The following table includes cumulative expenditure comparisons for General Fund departments as of December 2022.

FY2022/23

AMENDED
BUDGET
ACTUAL

RESULTS

DECEMBER
2022
ACTUAL

RESULTS

DECEMBER
2021
Prior Year
vs. Current
Year
Administrative Services $6,581,600 $2,905,410 $2,493,230 $412,180 Community Services 10,052,680 4,614,830 4,115,160 499,670 Development Services 7,575,110 3,401,060 3,109,050 292,010 Public Works 13,221,160 5,868,460 4,389,990 1,478,470
Police 53,424,990 25,552,450 23,563,560 1,988,890
Fire 30,884,190 15,427,070 14,777,350 649,720
California Center for the Arts 2,480,730 1,235,560 1,554,270 (318,710) Other Expenditures 2,780,490 1,051,530 650,250 401,280
TOTAL OPERATING EXPENDITURES $127,000,950 $60,056,370 $54,652,860 $5,403,510 The City continues to be impacted by a competitive labor market , as a result of recurring vacant positions and long recruitment efforts there are expenditure savings in regular salary and benefits through December 2022. However, the vacant positions have also increased the overtime expenditures which are at 94% of the amount budgeted for the fiscal year. The increase in overtime expenses will be offset by the savings in employee services.

FY2022/23

ADOPTED
BUDGET
FY2022/23

AMENDED
BUDGET

ACTUALS

DECEMBER
2022
% of
Budget
Employee Services $58,143,110 $58,633,030 $26,183,190 45% Other Employee Overhead 42,331,670 42,439,070 19,405,490 46% Employee Services - Overtime 4,853,750 4,853,750 4,555,880 94% SUBTOTAL EMPLOYEE SERVICES 105,328,530 105,925,850 50,144,560 47%

Maintenance and Operations 21,043,830 21,583,070 9,966,610 46% Internal Service Charges 16,422,590 16,422,590 8,211,340 50% Allocations (18,228,140) (18,228,140) (8,580,540) 47% Debt Service 620,120 620,120 - -
Capital Outlay 600,000 1,277,460 314,400 25%
SUBTOTAL OPERATING EXPENDITURES 20,458,400 21,675,100 9,911,810 46%

Cost Savings Reduction (1,000,000) (1,000,000) - - Cost Savings Contingency 400,000 400,000 - -
TOTAL OPERATING EXPENDITURES $125,186,930 $127,000,950 $60,056,370 47% Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

6 GENERAL FUND OPERATING EXPENDITURES – COST SAVINGS REDUCTION In addition to the cuts to expenditures, to account for projected annual expenditures savings experienced for i tems such as employee service savings resulting from vacant positions, the adopted FY2022/23 operating budget includes a cost savings budget reduction of $1,000,000, offset by a 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. Based on an analysis of the previous 5 fiscal years of savings, the Cost Savings Reduction line item has been added to individual departments in the General Fund , excluding the Public Safety departments and services.

The following is each department’s plan for meeting the cost savings target through the remainder of the fiscal year:

Budget
Reduction

Department's Plan for Meeting the Cost Savings Target
City Manager $100,000 Historical cost savings for the City Manager department was based on vacant positions that have since been eliminated for filled. For the remainder of the fiscal year, the
recommendation is to utilize the Lost Revenue category of ARP funds for high priority economic development contracts.

City Attorney 65,000 The City Attorney’s Department will likely not meet the Cost Savings Target this fiscal year. The historical cost savings of $65,000 was the result of vacant positions in prior fiscal years.

All positions in the department are currently filled.

City Clerk 15,000 The City Clerk Department utilizes Temporary Part-Time staff which will not be filled.

City Treasurer 25,000 The City Treasurer’s Department will likely not meet the Cost Savings Target this fiscal year. The historical cost savings of $25,000 was the result of vacant positions in prior fiscal years.

All positions in the department are currently filled.

Finance 125,000 The Finance Department will meet the budget reduction target by utilizing savings in employee services from four vacant positions in the first half of the fiscal year. Three out of the four positions have been filled as of January 2023.

Human Resources & Risk
Management
60,000 The Human Resources & Risk Management Departments will meet the budget reduction target by utilizing savings in employee services from two vacant positions this fiscal year, a Senior Human Resources Analyst and Senior Safety Analyst.

Information Systems Administration,
Enterprise Software & Web
Administration, and Geographic
Information Systems
75,000 The Information Systems Department will meet the budget reduction target by utilizing savings in employee services from vacant positions this fiscal year. As of January 2023, there are 5 vacant full-time positions.

TOTAL ADMINISTRATIVE SERVICES 465,000

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

7 Budget
Reduction Department's Plan for Meeting the Cost Savings Target Recreation 200,000 The Community Services Department relies Temporary Part- Time positions for programming. Due to the seasonality of Recreation programs and cyclical nature of these positions, there are vacancies that will result in savings in employee services that will help meet the cost savings reduction target of $200,000.

Older Adult Services
Senior Nutrition
Communications
Digital Media Services
Main Library

TOTAL COMMUNICATIONS &
COMMUNITY SERVICES 200,000

Planning
100,000
The Development Services Department will meet the budget reduction target by utilizing savings in employee services from vacant positions this fiscal year. As of January 2023, there are 7 vacant full-time positions.

Code Compliance
Engineering
Building
TOTAL DEVELOPMENT SERVICES 100,000

Street Maintenance
140,000
The Public Works Department will meet the budget reduction target by utilizing savings in employee services from vacant positions this fiscal year. As of January 2023, there are 5 vacant full -time positions in the Street Maintenance
Department.

Park Maintenance
Radio Communications
TOTAL PUBLIC WORKS 140,000

POLICE DEPARTMENT 150,000 The historical cost savings of $150,000 calculated for the Police Department was the result of vacant positions in prior fiscal years. In FY2020/21 the Police Department froze 7 full- time positions as a measure to close the budget deficit.

However, in FY2021/22 due to an increase in demand for City services around traffic safety and homelessness, two Traffic Police Officer positions were reinstated to improve traffic safety and responsiveness and three police officer positions were reinstated to the budget in order to increase the staffing levels of the COPPS Unit.

For the Police Department to meet the budget reduction
target of $150,000, one to two vacant police officer positions would not be filled. Although this would result in employee service savings, the impacts of vacant police officer positions would likely result in overtime to meet minimum staff
requirements.

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

8 TOTAL FIRE DEPARTMENT &

EMERGENCY MANAGEMENT

SERVICES
180,000 The historical cost savings of $180,000 calculated for the fIRE Department was the result of vacant positions in prior fiscal years. For the Fire Department to meet the budget reduction target of $1 80,000, one to two vacant firefighter paramedic positions would not be filled. Although this would result in employee service savings, the impacts of these vacant
positions would likely result in overtime to meet minimum staff requirements at each fire station.

Non-Departmental

95,000 The Non-Departmental budget accounts for anticipated retirement and vacation obligations that occur at the time an employee leaves the City, which are unknown at the time the budget is adopted. The actual expenses incurred as of
December 2022 are under the amount budgeted, as a result the department is anticipated to meet the budget reduction target.

TOTAL OTHER EXPENSES 95,000

CENTER FOR THE ARTS - The annual management fee to the Center for the Arts Foundation was reduced by $133,000 from the Preliminary FY2022/23 budget amount of $788,370 to $655,370. The
reduction is accounted for in a separate line item in the operating budget.

TOTAL EXPENDITURE SAVINGS 1,330,000

(330,000) Per direction from City Council on May 11, 2022, Public Safety is excluded from FY2022/23 budget reductions

FY2022/23 Cost Savings Reduction $1,000,000

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

9 GENERAL FUND RESERVES
In December 2015, City Council adopted a Fund Balance Policy and established a General Fund target Reserve balance of 25% of General Fund operating revenues in order to maintain adequate levels of fund balance based . This goal is based on a risk-based analysis to mitigate current and future risks, adequately provide for cash flow requirements, and to fund one-time unanticipated expenditure requirements.

Total General Fund budgeted operating revenue in FY2022/23 is $119,929,230 and 25% of this amount is $29,982,308.

The current General Fund Reserve balance is $17,392,319, or 15% of budgeted operating revenue, which is below the identified acceptable risk-based analysis adopted by City Council and general government practices.

Section 115 Irrevocable Pension Trust Fund
In February 2018, City Council authorized the establishment of a Section 115 Irrevocable Pension Trust Fund. The Trust Fund is used to set aside and hold money to meet future pension liabilities and can be used to provide economic relief during recessionary cycles and/or rate increases that are significantly above anticipated projected employee rate increases. Funds placed in this Trust can also be used to offset the City’s “normal” CalPERS costs, such that if funds are necessary for other purposes, a certain amount of flexibility is present. Another benefit is that funds held in the Trust can be invested in the same manner as funds in a typical pension fund rather than as part of the City’s General Fund, which means a potentially higher rate of return.

When the Pension Trust Fund was established, a funding policy for contributions to the Fund was recommended and included the four years of annual Successor Agency Redevelopment Loan Repayments of $14 million that began in FY2018/19, future proceeds from the sale of City Property belonging to the General Fund, and a portion of General Fund surplus at the end of each fiscal year, if one exists. On December 7, 2022, City Council approved the transfer of the FY2021/22 Successor Agency Redevelopment Loan Repayment of $ 2,194,370 and the remaining net resources from the FY2021/22 yearend operating results of $4,656,850.

On December 31 , 2022 , t he Section 115 Pension Trust Fund ha d a balance of $ 30,317,329 which include d City contributions of $31,166,650 less a loss on investment earnings net of expenses of $832,626. Prior to FY2021/22, the Trust Fund had a 1-year rate of return of 14%, and the investment earnings had grown to about $1.4 million. The 3- month rate of return of the investment portfolio is a gain of 3.83%, the 1-year rate of return is a loss of 12.57%, and the 3-year rate of return is .54%.

The following table provides a summary of the activity since the establishment of the Trust Fund.

Section 115 Pension Trust Fund
Prior Contributions $24,406,430
Successor Agency Advance Repayment – FY2021/22 2,194,370 General Fund Operating Results – FY2021/22 4,565,850
Investment Earnings, net of expenses (849,321)
Balance as of December 31, 2022 $30,317,329

Attachment "1"
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City of Escondido Fiscal Year 2022/23 Second Quarter Financial Report

10 WATER FUND
Net operating income for the Water Fund through December 2022 was $9.8 million, a decrease of $734,000 from prior year. Operating revenue increased by about $630,000 or 2% compared to the prior year. Operating expenses increased by about $1.4 million or 5% compared to the prior year due to increases in the costs for supplies, maintenance, and utilities.

FISCAL YEAR
2022/23 BUDGET

ACTUAL RESULTS
DECEMBER 2022

ACTUAL RESULTS
DECEMBER 2021

PRIOR YEAR VS

CURRENT YEAR
Operating Revenues $66,175,000 $38,344,823 $37,714,975 $629,848 Operating Expenses (62,501,360) (28,536,692) (27,172,386) (1,364,306) Net Operating Income $3,673,640 $9,808,131 $10,542,589 ($734,458)

WASTEWATER FUND
Net operating income for the Wastewater Fund through December 202 2 was $6.4 million, an decrease of $ 767,000 from the prior year. Operating revenue increased by about $ 212,000 or 1% compared to the prior year . Operating expenses increased by about $ 980,000 or 8% compared to the prior year due to increases in the costs for supplies, maintenance, and utilities.

FISCAL YEAR
2022/23 BUDGET

ACTUAL RESULTS
DECEMBER 2022

ACTUAL RESULTS
DECEMBER 2021

PRIOR YEAR VS

CURRENT YEAR
Operating Revenues $41,200,000 $20,201,960 $19,989,592 $212,368 Operating Expenses (30,979,010) (13,788,386) (12,808,901) (979,485) Net Operating Income $10,220,990 $6,413,574 $7,180,691 ($767,117)

FOR MORE INFORMATION
This summary report is based on detailed information generated by the City’s Finance department. If you have any questions or would like additional information on this report, please contact the Finance department at (760) 839 - 4676 or visit www.escondido.org
Attachment "1"
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Item15.

BUDGET ADJUSTMENT

REQUEST
Department: Finance
For Finance Use Only
BA
# ____________
Fiscal Year ________
Department Contact: Christina Holmes
City Council Meeting Date:
(attach staff report) March 8, 2023

EXPLANATION OF REQUEST
Mid-Year Budget Adjustment to amend the FY2022/23 operating and capital budgets.

BUDGET ADJUSTMENT INFORMATION
Project/Account Description Account Number
Amount of
Increase
Amount of
Decrease
Fire Mutual Aid Reimbursement 4256-001-000 $605,720
Overtime 5020-001-600 595,550
Office/Operating Supplies 5101-001-600 150
Safety Equipment 5105-001-600 5,770
Miscellaneous Motive 5118-001-600 340
Gas 5111-001-600 970
Training & Meetings 5160-001-600 2,940
Maintenance of Equipment –
Training Tower Pump Repair 5126-001-600 58,140
Office/Operating Supplies –
Fire Chief Conference Room 5101-001-600 30,000
General Fund – Fund Balance 3050-001-000 88,140
Adult Literacy Grant
4112-401-409102-
25010 52,850
Family for Literacy
4112-401-409102-
25018 29,160














Attachment "2"
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Item15.

Project/Account Description Account Number
Amount of
Increase
Amount of
Decrease
Fleet Services - Gasoline 5111-653-715 $175,000
Fleet Services - Diesel 5113-653-715 175,000
Fleet Services Fund –
Fund Balance 3050-653-000 350,000
Professional Services –
Engineering Department 5131-001-402 196,060
General Fund – Fund Balance 3050-001-000 196,060
New Capital Project –
ProjectDox Implementation New-229 150,000
Capital Project Fund –
Transfer In 4999-229 150,000
General Fund – Transfer Out 5999-001 150,000
General Fund – Fund Balance 3050-001-000 150,000
General Fund Non-Departmental
– ProjectDox Software 5193-001-701 78,480
General Fund – Fund Balance 3050-001-000 78,480

APPROVALS

DEPARTMENT HEAD DATE FINANCE DATE

















 


Attachment "2"
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Item15.

RESOLUTION NO. 2023-26

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR TO

EXECUTE, ON BEHALF OF THE CITY, A SERVICES

AGREEMENT WITH AVOLVE SOFTWARE CORPORATION

FOR ON SITE WORK OR TRAINING AND/OR
REMOTE WORK REQUIRING PERSONAL INVOLVEMENT.

WHEREAS, the City of Escondido ("City") desires to engage the services of a software corporation to provide professional services, and three years of a Software as Service (“SaaS”) subscription to provide Electronic Plan Review functionality integrated with the City’s Cityworks management system; and WHEREAS, the Chief Information Officer has determined that the contractor will provide services remotely, with training and some meetings conducted at the City’s facility; and WHEREAS, the Chief Information Officer has recommended the execution of the Software as a Service Agreement (“Agreement”) with Avolve Software Corporation for professional services, implementation, training SaaS hosting, patching and upgrading, Ad-hoc and support; and WHEREAS, the City Council desires at this time and deems it to be in the best public interest to approve the Agreement with Avolve Software Corporation to enhance the City’s current systems.

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, on behalf of the City, the Agreement with Avolve Software Corporation for implementation, training, and three years of service not to exceed $579,000, which is attached and incorporated to this Resolution as Exhibit “A” and subject to final approval as to form by the City Attorney.
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AVOLVE SOFTWARE CORPORATION
Software as a Services Agreement
This agreement ( “Agreement”) is made this _____________ ________ (“Effective Date ”) by and between Avolve Software Corporation, a Delaware corporation with offices at 21001 N Tatum Blvd Ste 1630-503, Phoenix, Arizona 85050, United States of America, (“Avolve” or “Services Provider”) and the City of Escondido, a California municipal corporation with offices at 201 N. Broadway, Escondido, CA 92025 (“Customer”).

WHEREAS Avolve offers remotely hosted subscription, software-as-a-service access (on hardware owned or operated on behalf of Avolve by a third party hosting service provider such as Microsoft Corporation ) to Avolve’s software (collectively, such hosted electronic plan review and project information management, collaboration and review system, including all software applications, appli cation program interfaces, modules, databas es, hardware, infrastructure, documentation and system administration, management and monitoring activities that Avolve provides for the software shall be referred to herein as the “Avolve SAAS Solution”); WHEREAS Avolve provides professional services (“Professional Services”) to assist customers with among other things, implementation of the Avolve SAAS Solution and training; WHEREAS the Customer desires to purchase use rights for the Avolve SAAS Solution and rela ted Professional Services (the “Initial Purchase”) from Avolve and, pay for such purchases directly; and WHEREAS Avolve and Customer now desire to provide the terms and conditions under which Avolve will provide the Initial Purchase to Customer, as well provide the terms and conditions for the Customer to purchase other Professional Services from Avolve, without the assistance of Financing Company or another paying agent; NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and promises set forth herein, Avolve and Customer agree as follows.

SECTION A. – AVOLVE SAAS SOLUTION

1. Avolve SAAS Solution.
a. Use Rights. Subject to Customer’s compliance with all the terms and conditions of this Agreement, Avolve grants to Customer a non -exclusive, non -transferable, non -sublicensable right during the subscription term (“Subscription Term”) identified in the Implementation SOW (attached hereto as Exhibit 2) to permit Users to use the Avolve SAAS Solution identified in the Implementation SOW for Customer’s internal business operations, solely for the specific Business Unit(s) as further set forth in the Implementation SOW. Should Customer desire to reorganize any such Business Unit, it shall provide Avolve written notice as soon as possible following the determination of reorganization, so that Avolve may review the planned reorganization to determine if it is consistent with th e Business Unit limitation in this use rights grant and, if not, what additional fees will be required due to Customer’s reorganization to include additional Business Units. As used in this Agreement, “User” means authorized Customer employees and third p arties that require access to the Avolve SAAS Solution in connection with the Customer’s internal business operations, such as the Customer’s administrators, contractors, reviewers, and applicants. There may be different types/levels of Users for the Avolve SAAS Solution, such as administrator Users, if so identified in the Implementation SOW. b. Storage. The Avolve SAAS Solution will include for the initial Subscription Term the amount of storage set forth in the Implementation SOW. Customer acknowledges that should Customer exceed the included storage limits after Avolve has sent notice to Customer in accordance with Avolve's then - current standard storage limits and data backup practices (available upon request), additional charges will be incurred by Customer. Avolve shall invoice Customer for any such additional incurred charges, and Customer shall pay such invoices, in accordance with Section C of this Agreement. Avolve may, in its sole discretion, modify the amount of standard storage included at no additional charge with the Resolution No. 2023-26
Exhibit "A"

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Avolve SAAS Solution, with such modification to become effective upon the effective date of any renewal term provided that Avolve provides Customer written notice of such modification at least ninety days in advance of the expiration of the then-current Subscription Term. c. Restrictions on Use. Customer will not, and will ensure that its Users do not: (i) except as expressly stated herein, copy, reproduce, distribute, republish, download, display, host or transmit in any form or by any means, including but not limited to electronic, mechanical, photocopying, recording, or other means, any part of Avolve SAAS Solution or any other Avolve materials; (ii) use the Avolve SAAS Solution or any other Avolve m aterials to provide services to third parties (e.g., business process outsourcing, service bureau applications or third party training); (ii) assign, sublicense, sell, lease, loan, resell, sublicense or otherwise distribute or transfer or convey the Avolve SAAS Solution or any other Avolve materials, or pledge as security or otherwise encumber Customer’s rights under this Agreement; (iii) make any u se of or perform any acts with respect to the Avolve SAAS Solution or any other Avolve materials other than as expressly permitted in accordance with the terms of this Agreement; or (iv) use the Avolve SAAS Solution components other than those specifically identified in the Implementation SOW and then only as part of Avolve SAAS Solution as a whole, even if it is also technically possible for Customer to access other Avolve SAAS Solution components; or (v) modify, further develop or create any derivative works of, disassemble, decompile, reverse engineer or otherwise attempt to obtain or perceive the source code from which any part of Avolve SAAS Solution is compiled or interpreted, or access or use Avolve SAAS Solution in order to build a similar or competitive product or service; (vi) allow use of the Avolve SAAS Solution or any other Avolve materials by anyone other than authorized Users; (vii) publish any results of benchmark tests run on Avolve SAAS Solution; (viii) unless otherwise expressly authorized in writing by Avolve, use the Avolve SAAS Solution in connection with any software product or tools, or any other software as a serv ice not provided by Avolve; and (ix) input, upload, transmit or otherwise provide to or through Avolve SAAS Solution or any systems used by Avolve anything that is unlawful, injurious, or contains, transmits or activates any harmful code. Customer acknowledges that nothing herein will be construed to grant Customer any right to obtain or use the source code from which Avolve SAAS Solution is delivered. Customer shall not tamper with or attempt to disable any security device or protection used by Avolve SAAS Solution or any other Avolve materials, nor shall Customer damage, destroy, disrupt or otherwise impede or harm in any manner the Avolve SAAS Solution or any systems used by Avolve. Customer agrees to take all commercially reasonable steps to ensure th at Users abide by the terms of this Agreement and expressly agrees to indemnify Avolve, its officers, employees, agents and subcontractors from and against all claims, liabilities, losses, damages and costs (including reasonable attorney fees) suffered by Avolve arising from a breach by the User of the conditions of this Agreement.
d. High-Risk Activities. The Avolve SAAS Solution is not fault-tolerant and is not designed, manufactured, or intended for use or resale as online control equipment in hazardous environments requiring fail-safe performance, such as in the operation of nuclear facilities, aircraft navigation or communication systems, air traffic control, direct life support machines or weapons systems, in which the failure of the Avolve SAAS Solution or derived binaries could lead directly to death, personal injury, or severe physical or environmental damage . The Avolve SAAS Solution is also not designed or intended for use with Federal Tax Information (FTI) as defined in the Internal Revenue Service Publication 1075 (IRS 1075) or criminal justice information ("CJI"), such as fingerprint records and criminal histories. Customer shall not use the Avolve SAAS Solution for any of these h igh-risk activities, including without limitation transmitting, storing or otherwise processing any FTI or CJI with the Avolve SAAS Solution. e. Project Administrator . Customer agrees, if not already designed in the Implementation SOW , to promptly designate in writing one person to be the Customer’s point p erson responsible for all communications with Avolve (the Customer’s “Project Administrator”). The Project Administrator is responsible for project administration duties as documented in the Avolve systems guides, statements of work, and documentation (collectively, the “Documentation”), as provided for time to time by Avolve to Customer.

Resolution No. 2023-26
Exhibit "A"

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f. Customer Connection. During the Term, the Customer is responsible for obtaining and maintaining connection to the Avolve SAAS Solution , including the Internet connection . Avolve shall not be responsible for any inadequacy or lack of functionality of Customer’s connection to the Avolve SAAS Solution or the inability of the Customer’s com puter, telecommunications provider, or other equipment and capabilities to access or use the Avolve SAAS Solution. g. Third Party Service Providers and Components. Notwithstanding anything to the contrary in this Agreement or any other documents between Avolve and Customer , Customer acknowledges and agrees as follows.

1. The Avolve SAAS Solution and its component parts are protected by copyright and other propriety rights of Avolve and one or more third party software vendors (including Oracle and Open Text Corporation (“OTC”) (all such third party vendors, including w ithout limitation Oracle and OTC , shall be referred to herein as “third party vendors” or “third party software vendors ”). Customer may be held directly responsible by such third party vendors for acts relating to the Avolve SAAS Solution component parts that are not authorized by this Agreement. Customer’s use of such third party software is limited to only in conjunction with Avolve SAAS Solution and Customer acknowledges that it is not allowed to modify such third party software or use it independent from Avolve SAAS Solution . TO THE MAXIMUM EXTENT

PERMITTED BY LAW, THE CUSTOMER WAIVES, AND WILL CAUSE ITS USERS TO WAIVE,

ALL CLAIMS AND CAUSES OF ACTION AGAINST SUCH THIRD PARTY SOFTWARE VENDORS THAT ARISE UNDER THIS AGREEMENT.

2. If Customer purchases from Avolve hosting of the Avolve SAAS Solution on the Microsoft® Windows Azure TM platform, the terms and conditions for such cloud services as such may be updated by Microsoft Corporation from time to time, are found online on at https://www.microsoft.com/licensing/docs/customeragreement.

Customer should review the documents available on this website carefully to be sure that Customer reviews the appropriate customer agreement. If Customer has purchased Microsoft Cloud for US Government, review the customer agreement for Microsoft Cloud for US Government. If Customer is purchasing commercial access, the customer agreement for commercial access for the United States applies. Upon Customer's request, Avolve will provide Customer with assistance on finding and/or a copy of the appropriate Microsoft customer agreement. Customer acknowledges and agrees THAT (A) THE HOSTED SERVICES WILL BE PERFORMED SOLELY AND

EXCLUSIVELY SUBJECT TO THE APPLICABLE MICROSOFT CORPORATION'S CUSTOMER AGREEMENT (the "Microsoft Customer Agreement) , (B) THAT AVOLVE DOES NOT

GUARANTY MICROSOFT CORPORATION'S OBLIGATIONS PURSUANT TO THE

MICROSOFT CUSTOMER AGREEMENT, AND (C) NOR CAN AVOLVE GRANT ANY

WARRANTIES OR ADDITIONAL TERMS TO THE CUSTOMER AS TO THE HOSTED SERVICES UNDER THIS AGREEMENT. THE HOSTED SERVICES ARE SOLELY GOVERNED BY THE MICROSOFT CUSTOMER AGREEMENT, TO WHICH AVOVLE IS NOT A PARTY .

Microsoft Corporation makes certain servic e level commitments to its customers, which are available online in the Microsoft Corporation's SLAs at https://azure.microsoft.com/en-us/support/legal/sla/summary/. If Customer desires to make a claim under the Microsoft Corporation SLAs, Customer shall submit the claim through Avolve. Avolve will escalate the claim to Microsoft Corporation for review. If Microsoft Corporat ion determines that a credit is due, Avolve will credit Customer the amount Microsoft Corporation has paid to Avolve for the SLA credit promptly after receiving the credit from Microsoft Corporation.

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h. Compatibility Updates. Avolve will make commercially reasonable efforts to update the Avolve SAAS Solution, if and as required, to cause it to operate under new versions or releases of current operating systems and internet browsers, within fifteen (15) months of general availability. i. Passwords, Access. Customer may designate and add Users and shall provide and assign unique passwords and user names to each author ized User pursuant to Avolve’s then-current protocols. At Avolve’s discretion, Users may be added either by Avolve or directly by Customer. Customer shall ensure that multiple Users do not share a password or user name. Customer further acknowledges and agrees that it is prohibited from sharing passwords and/or user names with unauthorized users.

Customer will be responsible for the confidentiality and use of its Users passwords and user names.

Avolve will act as though any electronic communications it receives under such passwords, user names, and/or account numbers have been sent by Customer. Customer agrees to immediately notify Avolve if it becomes aware of any loss or theft or unauthorized use of any of passwords, user names, and/or account numbers. Customer agrees not to access Avolve Cloud by any means other than through the interfaces that are provided by Avolve.
j. Transmission Of Data . Customer understands that the technical processing and transmission of Customer Data is necessary to use of the Avolve SAAS Solution, and consent to Avolve ’s interception and storage of Customer Data. Customer understands that its Users or Avo lve may be transmitting Customer Data over the Internet, and over various networks, only part of which may be owned by Avolve. Avolve is not responsible for any portions of Customer Data that are lost, altered, intercepted or stored without authorization during the transmission of Customer Data across networks not owned by Avolve.
k. Customer Responsibilities. Customer will (a) be responsible for Users’ compliance with this Agreement, (b) be responsible for the accuracy, quality and legality of Customer Data and the means by which it acquired Customer Data, (c) be responsible for cooperating and assisting Avolve as reasonably requested by Avolve to facilitate performance of its obligations and exercising of its rights under this Agreement, (d) use the Avolve SAAS Solution and any other materials provided by Avolve only in accordance with the Documentation and applicable laws and government regulations, including complying with all applic able legal requirements regarding privacy and data protection so as to not violate the intellectual property, privacy or any other rights of any third parties, and (e) use commercially reasonable efforts to prevent any security breach, including any unauthorized access to or use of the Avolve SAAS Solution. Should Customer become aware of any actual or threated security breach, Customer shall promptly notify Avolve and take all reasonable and lawful measures within its control that are necessary to stop th e activity or threatened activity and to mitigate its effects (including, where applicable, by discontinuing and preventing any unauthorized access to the Avolve SAAS Solution). Customer shall provide sufficient notice to, and obtain sufficient consent fr om, its Users and any other party providing personal data to Avolve and its suppliers (including the Microsoft Corporation) to permit the processing of data by Avolve and its supplier, and their respective affiliates, subsidiaries, and service providers solely to the extent such processing of data is expressly allowed for under this Agreement , including for the purpose of disclosing it to law enforcement or other governmental authorities as directed by Avolve solely to the extent Avolve is required to do so by law, or otherwise mutually agreed to in writing by the parties. l. Data Backup. The Avolve SAAS Solution is programmed to perform data backups of Customer Data stored within the Avolve SAAS Solution in accordance with Avolve's then -current standard sto rage limits and data backup practices (available upon request). Additional data backups may be purchased for an additional fee from Avolve and such additional data backup services shall be documented in an SOW pursuant to Section B of this Agreement . In the event of any loss, destruction, damage or corruption of Customer Data caused by Avolve or the Avolve SAAS Solution, Avolve, as its sole obligation and liability and as Customer’s sole remedy, will use commercially reasonable efforts to restore Customer Data from Avolve’s most current backup of Customer Data.

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m. Ownership. Customer acknowledges and agrees that Avolve owns all right, title, and interest in and to all intellectual property rights (including all derivatives or improvements thereof) in the Avolve SAAS Solution and any suggestions, enhancements requests, feedback, recommendations or other information provided by Customer or any of its Users related to the Avolve SAAS Solution. Customer’s use rights to the Avolve SAAS Solution and the related materials supplied by Avolve pursuant to this Agreement are strictly limited to the right to use the proprietary rights in accordance with the terms of this Agreement. No right of ownership, expressed or implied, is granted under this Agreement.

2. Security. The security, privacy and data protection commitments set forth in this Agreement only apply to products and services provided by Avolve directly to Customer and do not include any products or services resold by Avolve hereunder, including any hosting services provided by Microsoft Corporation pursuant to the Customer's Microsoft Customer Agreement.
a. Security Program . Avolve has implemented and maintains an information security p rogram that incorporates administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of the Customer Data provided by Customer and its Users to Avolve in accordance with this Agreement.
b. Annual Audit. Avolve will use commercially reasonable efforts to conduct an annual security audit of Avolve using an independent third party selected by Avolve. Upon the Customer’s written request, a copy of the final report from any such audit shall be promptly provided the Customer. The Customer agrees that any such reports or other information provided to Customer concerning any audit shall be the Confidential Information of Avolve.
c. Security Breach. Avolve will notify Customer promptly and in no event later than one (1) business day following Avolve ’s discovery of a Data Security Breach ( defined below) and shall (i) undertake a reasonable investigation of the reasons for and the circumstances surrounding such Data Security Breach and (ii) reasonably cooperate with Customer in connection with such investigation, including by providing Customer with an initi al summary of the results of Avolve ’s investigation as soon as possible, but in all cases within two (2) business days after the date Avolve discovered or reasonably suspected a Data Security Breach, and then regular updates on the investigation as it progresses; (iii) not make any public announcements relating to such Data Security Breach without Customer’s prior written approval, which shall not be unreasonably withheld; (iv) use commercially reasonable efforts to take all necessary and appropriate corrective action reasonably possible on Avolve’s part designed to prevent a recurrence of such Data Security Breach; (v) collect and preserve evidence concerning the discovery, cause, vulnerability, remedial actions and impact related to such Data Security Breach, which shall meet reasonable expectations of forensic admissibility; and (vi) if requested by Customer, at Customer’s cost, provide notice to individuals or entities whose Confidential Information was or may have been affected in a manner and format specified by Customer. In the event of any Data Security Breach is caused by Avolve, Customer shall have, in addition to all other rights and remedies available under this Agreement, law and equity, the right to terminate the Agreement upon thirty (30) days prior written notice. For purposes of this Agreement, the term “Data Security Breach” shall mean any of the following occurring in connection with Customer Data in connection with Customer’s and its Users ’ authorized use of the Avolve SAAS Solution: (a) the loss or misuse of Customer Data; and (b) disclosure to, or acquisition, access or use by, any person not authorized to receive Customer Data, other than in circumstances in which the disclosure, acquisition, access or use is made in good faith and within the course and scope of the employment with Avolve or other professional relationship with Avolve and does not result in any further unauthorized disclosure, acquisition, access or use of Customer Data. d. Signatures. The parties shall use electronic signatures for all agreements unless otherwise prohibited by law. Prior to any public disclosure of any doc ument containing a signature, the signature shall be redacted by the disclosing party in a manner which renders it illegible and unable to be copied.

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3. Suspension Right. Avolve reserves the right to include disabling devices in the service and software prov ided under this Agreement and to use such disabling devices to suspend access and/or use when any payment is overdue or when Avolve believes that Users are using the Avolve SAAS Solution and/or any other materials or services provided by Avolve hereunder not in accordance with the Documentation, this Agreement and/or applicable laws and government regulations. In addition, if Customer is using Microsoft Corporation for hosting services, Microsoft Corporation may terminate or suspend Customer's hosting services in accordance with the Customer's Microsoft Customer Agreement and, should this happen, Customer will not be able to access the Avolve SAAS Solution. Customer agrees that Avolve shall not be liable to Customer, Users or to any third party for any suspension or inability to access the Avolve SAAS Solution pursuant to this Section A(3). If suspended for failure to pay, upon payment in full of all amounts overdue (including any interest owed), Customer may request the reactivation of its account. Avolve shall reactivate promptly after receiving in advance all applicable reactivation fees, provided that Avolve has not already terminated this Agreement.

4. Ownership and Disposition of Customer Owned Data, Hosting Location . “Customer Data” refers to the data provided by the Customer that resides in the Customer’s Avolve SAAS Solution environment, including any plan review, project drawings and associated project documents. Customer shall own all Customer Data that may reside within Contractor’s hosting environment, to include Disaster recovery site, equipment and media.

Contractor is granted no rights hereunder to use the Customer Data except to the extent necessary to fulfill its obligations to Customer under this Agreement. Unless approved in writing by Customer, Avolve shall host the Avolve SAAS Solution provided to Customer hereunder from a data center located within the United States.

Upon termination or expiration of Customer’s right to use the Avolve SAAS Solution for any re ason other than Customer’s uncured material breach, for the first thirty (30) calendar days following termination or expiration, Customer may request in writing that Avolve provide an copy of Customer's then -current Customer Data and, for no additional cost, Avolve shall provide a copy in a mutually agreed upon format on media supplied by the Customer. If the parties are unable to mutually agree upon the format or the media supplied by Customer is not acceptable to Avolve, Avolve will use commercially reasonable efforts to still provide a copy of the Customer Data but Avolve may charge a reasonable professional services fee for increased costs incurred. After this time period has expired, Avolve has no further obligation to retain the Customer Data and sha ll use commercially reasonable efforts to promptly delete all Customer Data from the Avolve SAAS Solution.

5. Verification. Avolve shall be permitted to audit (at least once annually and in accordance with Avolve standard procedures, which may include on -site and/or remote audit) the usage of the Avolve SAAS Solution and any other materials provided by Avolve to Customer. Customer shall cooperate reasonably in the conduct of such audits. In the event an audit reveals that (i) Customer underpaid fees to Avolve and/or (ii) that Customer has used in excess of the use rights granted herein, Customer shall pay such underpaid fees for such excess usage.

Reasonable costs of Avolve’s audit shall be paid by Customer if the audit results indicate usage in excess of the authorized quantities or levels . Avolve reserves all rights at law and equity with respect to both Customer’s underpayment of fees and usage in excess of the authorized quantities or levels.

SECTION B. – PROFESSIONAL SERVICES AND SOWS

1. Statements of Work . From time-to-time during the Term of this Agreement, the parties may enter into statements-of-work (each being an “SOW”) for Avolve SAAS Solution use rights (including additional storage) and/or Professional Services on terms mutually agreed in writing bet ween the parties in the SOW, including, without limitation, scope of services, expected deliverables, milestone dates, acceptance procedures and criteria, fees and other such matters. No SOW shall be binding until executed by both parties. Each SOW will be incorporated into and subject to this Agreement . In the case of any conflict between the SOW and this Agreement, this Agreement shall control unless the SOW specifically states otherwise.

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SECTION C. – GENERAL TERMS AND CONDITIONS

1. Fees.
a. Implementation SOW and Additional Storage Fees. The Implementation SOW includes the Avolve SAAS Solution subscription fees, as well as the training and implementation professional services; which, unless set forth otherwise in the Implementation SOW, shall be invoiced by Avolve in full, in advance on the Effective Date. Additional storage fees shall be as set forth in the then-current standard storage limits and data backup practices document, a copy of which is available from Avolve upon request.

Additional storage fees will be invoiced in accordance with the then-current standard storage limits and data backup practices document.
b. Other SOWs. Any SOWs that Avolve and the Customer may execute from time to time during the Term of this Agreement shall in clude within them the applicable fees, including whether the Avolve SAAS Solution subscription fees and/or Professional Services fees are being paid by Customer through Financing Company, by Customer through another paying agent, or by Customer directly to Avolve.

Unless otherwise specified in the SOW, Professional Services fees will be invoiced as the Professional Services are delivered and Avolve SAAS Solution subscription fees will be invoiced yearly, in advance, in full at the time the SOW is executed.
c. General Terms. Unless set forth otherwise in an SOW, payment on all invoiced amounts shall be due thirty (30) days from receipt of invoice, with past due amounts accruing interest at the rate of the lesser of either 18% per annum or the maximum amount as allowed by law. The City considers payments as being made on the day a check is dated.

Avolve will invoice for the Avolve SAAS Solution subscription fees yearly, in advance, with the first invoice being issued on the Effective Date of this Agreement. The Customer agrees to pay all invoiced subscription fees net thirty (30) days from receip t of invoice, with past due amounts accruing interest at the rate of the lesser of either 18% per annum or the maximum amount as allowed by law. All fees are due in advance, irrevocable and non-refundable (except as expressly set forth otherwise in this Agreement). Customer agrees to provide Avolve with complete and accurate billing and contact information.

2. Taxes. Fees and other charges described in this Agreement do not include federal, state or local sales, foreign withholding, use, property, excise, service, or similar transaction taxes (“Tax(es)”) now or hereafter levied, all of which shall be for Customer’s account. Any applicable direct pay permits or valid tax-exempt certificates must be provided to Avolve prior to the execution of this Agreement . If Avolve is required to pay Taxes, Customer shall reimburse Avolve for such amounts.

3. Term. Except if terminated earlier in accordance with this Section C(3), this Agreement shall commence on the Effective Date and shall continue for the longer of either (a) the expiration of the Subs cription Term for the Avolve SAAS Solution or (b) the completion of all Professional S ervices under all SOWs. Except as otherwise provided in an y SOW , UPON THE EXPIRATION OF THE INITIAL TERM, THE SUBSCRIPTION TERM SHAL L AUTOMATICALLY RENEW FOR SUCCESSIVE RENEWAL TERMS EACH EQUAL TO TWELVE (12) MONTHS . THE ANNUAL SUBSCRIPTION PRICE FOR YEARS 2 AND 3 SHALL BE $82 ,650 AND $95,160, RESPECTIVELY.

SUBSEQUENT YEARS WILL BE PRICED AT THE LESSER OF A 5% INCREASE OVER THE PREVIOUS 12 MONTH PERIOD, OR AVOLVE’S THEN CURRENT FEES FOR CUSTOMER’S THEN CURRENT USAGE, UNLESS EITHER PARTY PROVIDES NOTICE OF NON-RENEWAL AS SET FORTH IN THIS SECTION C(3). Avolve will provide notice of non-renewal or a notice of the fees due for each Renewal Term at least sixty (60) days prior to the commencement of the Renewal Term. If a notice of fees is provided, it will be in the form of an invoice . Customer acknowledges that it is its responsibility to provide a current email address to Avolve and to monitor such address for such notices.

Customer may elect not to renew a Subscription Term by providing notice to Avolve at least thirty (30) days prior to the commencement of the Renewal Term. Avolve will provide, upon renewal, updates to all business Resolution No. 2023-26
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operation documentation that was required at execution of this contract, such as certificates of insurance and proof of Escondido business license.

4. Termination. In addition to any termination rights that may be set forth in a specific SOW, either party may (a) terminate this Agreement for convenience upon sixty days prior written notice to the other party and (b) terminate this Agreement for material breach in the event that the other party materially breaches this Agreement and thereafter has failed to cure such material breach (or commenced diligent efforts to cure such breach that are reasonably acceptable to the terminating party) within thirty (30) days after receiving written notice thereof. Without prejudice to either party's rights to terminate set forth in the prior sentence, if Customer has purchased from Avolve hosting of the Avolve SAAS Solution on the Microsoft® Windows AzureTM platform, and Microsoft Corporation terminates the Customer's Microsoft Customer Agreement during a Subscription Term, Avolve and Customer shall act in good faith to determine a mutually acceptable replacement provider promptly upon receiving notice of Microsoft Corporation's intent to terminate the Customer's Microsoft Customer Agreement. Upon termination by either party, Customer shall be provided all data stored on Customer’s behalf by Avolve, in accordance with Section A(4).

5. Force Majeure. Any delay or nonperformance of any provision of this Agreement (other than for the payment of amounts due hereunder) caused by conditions beyond the reasonable control of the performing party shall not constitute a breach of this Agreement, and the time for performance of such provision, if any, shall be deemed to be extended for a period equal to the duration of the conditions preventing performance.

6. Confidentiality. Each party shall use commercially reasonable efforts to hold confidential information (“Confidential Information”) of the other in confidence. All Confidential Information (including but not limited to data) shall (i) remain the sole property of the disclosing party and (ii) be used by the receiving party only as authorized herein. Information will not be considered to be Confidential Information if (i) available to the public other than by a breach of this agreement; (ii) rightfully received from a third party not in breach of any obligation of confidentiality, (iii) independently developed by or for a party without access to Confidential Information of the other; (iv) lawfully known to the receiving party at the time of disclosure, (v) produced in compliance with applicable law, securities reporting requirement or a government or court order, provided the other party is given notice and an opportunity to intervene unless prohibited by law ; or (vi) it does not constitute a tra de secret and more than three (3) years have elapsed from the date of disclosure. If Avolve receives a request for Customer Data (either directly or as redirected to Avolve by the Microsoft Corporation), then Avolve shall redirect the law enforcement agen cy to request that data directly from Customer. If compelled to disclose Customer Data to law enforcement, then Avolve shall within five business days notify Customer and provide a copy of the demand, unless legally prohibited from doing so. To the exten t required by law, Customer shall notify individual Users that their data may be processed for the purpose of disclosing it to law enforcement of other governmental authorities as directed by Avolve, and shall obtain the User's consent to the same.

7. Indemnification; Limitation of Liability.
• Indemnification. If a third party makes a claim against the Customer that any Customer’s use of the Avolve SAAS Solution in accordance with the terms of this Agreement infringes such third party ’s intellectual property rights, Avolve, at its sole cost and expense, will defend Customer against the claim and indemnify Customer from the damages, losses, liabilities, costs and expenses awarded by the court to the third party claiming infringement or t he settlement agreed to by Avolve, provided that Customer: (i) notifies Avolve promptly in writing of the claim; (ii) gives Avolve sole control of the defense and any settlement negotiations; and (iii) gives Avolve reasonable assistance in the defense of such claim. If Avolve believes or it is determined that the Avolve SAAS Solution has violated a third party’s intellectual property rights, Avolve may choose to either modify the Avolve SAAS Solution to be non-infringing or obtain a license to allow for continued use, or if these alternatives are not commercially reasonable, Avolve may terminate Customer’s use rights and refund any unused, prepaid fees Customer may have paid to Avolve. Avolve will not indemnify the Customer to the extent that the alleged i nfringement arises from (1) the combination, operation, or use of the Avolve SAAS Solution with products, services, information, materials, technologies, Resolution No. 2023-26
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business methods or processes not furnished by Avolve; (2) modifications to the Avolve SAAS Solution, which modifications are not made by Avolve; (3) failure to use updates to the Avolve SAAS Solution provided by Avolve; or (4) use of Avolve SAAS Solution except in accor dance with any applicable Documentation or specifications. Interfaces developed exclusively by Avolve using Avolve’s standard APIs, and configuration changes made within the Avolve -provided user interface to the product by Avolve shall not constitute modifications for purposes of this section. Customer development of API interfaces not auth orized by Avolve Software, or the use of API calls for pushing or pulling data to or from the Avolve SaaS system that has a negative impact to the performance or functionality of the system requiring Avolve Software assistance for resolution are not covered. This includes modifications to workflows and the overall system configurations available to the customer.
a. This section provides THE SOLE, EXCLUSIVE, AND ENTIRE LIABILITY OF AVOLVE AND ITS LICENSORS TO CUSTOMER, AND IS CUSTOMER’s SOLE REMEDY, WITH RESPE CT TO THE INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS.
b. Limitation of Liability. In no event will Avolve be liable for special, indirect, incidental, consequential, or exemplary damages, including, without limitation, any damages resulting from loss of use, loss of data, interruption of business activities, or failure to realize savings arising out of or in connection with this agreement, including without limitation use of the Avolve SAAS Solution and the provision of the Professional Services. Except for direct damages and expenses associated with Avolve’s obligation to indemnify Customer pursuant to Section C (7) (a), Avolve’s aggregate, cumulative liability for damages and expenses arising out of this Agreement, whether based on a theory of contract or tort, including negligence and strict liability, will be limited to the amount of fees receive d by Avolve under this Agreement. Such fees reflect and are set in reliance upon this limitation of liability . The limited remedies set forth in this Agreement shall apply notwithstanding the failure of their essential purpose.

8. Support; Warranties.
a. Support. During the Customer’s Subscription Term, at no additional cost to the Customer, Avolve shall provide the Avolve SAAS Solution in accordance with Avolve ’s Service Level Agreement (attached hereto as Exhibit 1).
b. Warranties. Customer warrants and covenants that it owns or otherwise has and will have the necessary rights and consents in and relating to the Customer Data so that, as received by Avolve and processed in accordance with this Agreement, they do not and will not infringe, misappropriate or otherwise violate any intellectual property rights, or any privacy or other rights of any third party or violate a ny applicable laws or and government regulations, including but not limited to all foreign, United States federal and United States state recording laws. If Customer is purchasing from Avolve resold rights to Microsoft Cloud for US Government, Customer further warrants that it is one of the following: (i) a bureau, office, agency, department or other entity of the United States Government; (ii) any agency of a state or local government in the United States; (iii) any United States county, borough, commonwealth, city, municipality, town, township, special purpose district, or other similar type of governmental instrumentality established by the laws of Customer's state and located within Customer's state jurisdiction and geographic boundaries; or (iv) a fed erally-recognized tribal entity performing tribal governmental functions and eligible for funding and services from the US Department of Interior by virtue of its status as an Indian tribe. c. Disclaimer. Avolve AND ITS SUPPLIERS AND LICENSORS DISCLAIM ALL OTHER WARRANTIES

STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF TITLE, NON -INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY IS GIVEN AS TO ACCURACY, ERROR -FREE O R UNINTERRUPTED SERVICE . CUSTOMER

ASSUMES ALL RESPONSIBILITY FOR DETERMINING WHETHER THE SERVICES, ANY AVOLVE MATERIALS,

THE AVOLVE SAAS SOLUTION OR THE INFORMATION GENERATED THEREBY IS ACCURATE OR SUFFICIENT FOR ITS PURPOSES . EACH PARTY DISCLAIMS ALL LI ABILITY AND INDEMNIFICATION Resolution No. 2023-26
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OBLIGATIONS FOR ANY HARM OR DAMAGES CAUSED BY ANY THIRD -PARTY HOSTING PROVIDERS.

Avolve makes no warranties or conditions as to any services or products distributed under a third-party name, copyright, trademark or trade name that may be offered with or incorporated with the Avolve SAAS Solution or Professional Services provided by Avolve hereunder (such as the Microsoft hosting services). To the maximum extent permitted by law, Avolve will have no liability in connection with the third-party services or products.

9. Notices: Any notices being given by this Agreement shall be in writing and shall be effective if delivered personally, sent by prepaid courier service, sent by prepaid mail, or sent by facsimile or electronic communication (confirmed on the same or following day by prepaid mail) . All correspondence shall be addressed to the parties as follows:

If to Avolve: If to Customer:

Mr. Jay Mayne
CFO
Avolve Software Corporation
21001 N. Tatum Blvd, Suite 1630-503
Scottsdale, AZ 85050
Robert Van De Hey
Chief Information Officer
City of Escondido
201 N. Broadway

Escondido, CA 92025

10. Governing Law. This Agreement will be governed by and construed in accordance with the laws of Customer’s state of domicile.

11. Entire Agreement . This Agreement, together with any SOWs, constitutes the entire agreement and understanding between the parties and supersedes any prior agreements, representation, or understandings, whether oral or written, relating to the services provided hereunder.

12. Severability. Should any court of competent jurisdiction declare any term of this Agreement void or unenforceable, such declaration shall have no effect on the remaining terms hereof.

13. Assignment. These services and any other information o r rights provided by Avolve, may not be sold, leased, assigned, sublicensed or otherwise transferred in whole or in part. Customer may not assign this Agreement or the benefits there from in whole or in part without the prior written consent of Avolve, which consent shall not be unreasonably withheld. Any assignment made in conflict with this provision shall be voidable at the option of Avolve.

14. Independent Contractor. Avolve is an independent contractor and not an employee of the Customer. Any personnel performing services under this Agreement on behalf of Avolve shall at all times be under Avolve ’s exclusive direction and control. Avolve shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of services under this Agreement and as required by law . Avolve shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to:
social security taxes, income tax withholding, unemployment insurance, and worker’s compensation insurance.

15. Amendment. This Agreement may only be modified by written amendment signed by authorized representatives of both parties.

16. Hierarchy. The following order of precedence shall be applied in the event of conflict or inconsistency between provisions of the components of this Agreement: (i) this Agreement and (ii) the applicable Avolve Support SLA or SOW. Notwithstanding the foregoing, if any part of the Avolve Support SLA or SOW expressly states that it shall control over the Agreement, it shall so control.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth below.

Avolve Software Corporation City of Escondido
By: By:

Name: Name:

Title: Title:

Date: Date:

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EXHIBIT 1 – SERVICES SERVICE LEVEL AGREEMENT (SLA)

SUPPORT PROCESS AND SERVICE LEVEL AGREEMENT
Avolve’s current support process and service level commitments (“Support”) are defined below.

Support Portal. Avolve provides Support through its Support Portal ( https://support.avolvesoftware.com). A ll issues can be logged using the portal or through an on-call support number. Customer personnel receive Support Portal login credentials promptly following purchase of rights to use the Avol ve SAAS Solution . After a login is received, the Customer may enter, track, update, and report on trouble ticket, as well as communicate with Avolve helpdesk staff via phone, email, web meeting, and/or ticket notes. Help, FAQs, Documentation, and a Knowledge- base are also available at the Avolve support portal.

Support Hours. 8 AM – 5 PM MST, Monday through Friday (excluding standard holidays).

Planned Downtime. Avolve or its third -party agent may re nder the Avolve SAAS Solution unavailable in order to perform upgrades, updated, patches, enhancements and routine maintenance activities, so long as the Avolve SAAS Solution is only unavailable to Customer and its Customer Users outside of the hours of 7 AM through 9 PM East Coast Time on business days during the Subscription Term. Avolve shall provide no less than five (5) days advance notice to Customer of any planned downtime. Customer acknowledges that in the case of emergencies, Avolve or its third-party agents may render the Avolve SAAS Solution unavailable in order to address the emergency. In such situations, if reasonably feasible, Avolve will provide notice to Customer in advance of rending the Avolve SAAS Solution unavailable or, if not reasonably feasible, notice to Customer promptly following the rendering of the Avolve SAAS Solution unavailable. Customer understands and agrees that Avolve shall not be liable for any such interruption in access to the Avolve SAAS Solution for downtime occurring pursuant to this paragraph (collectively, referred to herein as “Planned Downtime”).

On-Site Emergency Support. Customer may request on-site emergency operational support services as a separate and distinct billable service. In such cases and at its discretion, Avolve will dispatch appropriate technical staff to deliver on-site technical services.

Problem Determination and Resolution. Avolve resources are allocated to resolve reported problems based on the severity level as described in the following table. Avolve uses commercially reasonable efforts to provide a prompt acknowledgement, acceptable resolution, workaround, or a plan for the provision of a resolution or acceptable workaround in the timeframe set forth below:

Incident Response, Resolution, and Restoration Times
Severity Level System
Down Critical High Medium Low
Response Time 1 hour 4 business
hours
12 business
hours
24 business
hours
48 business
hours
Resolution
Time
Reasonable
Best Effort
Reasonable
Best Effort
Reasonable
Best Effort
Reasonable
Best Effort
Reasonable
Best Effort
Incident
Reports 24 Hours n/a n/a n/a n/a

*Normal Business Hours: 8:00 a.m. through 5:00 p.m. Mountain Standard Time, Monday through Friday (excluding standard holidays).

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Support Classification Definitions:
• Response Time. Once a problem has been reported, the Customer receives an acknowledgement by email, chat, phone or the through the support portal. Avolve will begin the process of problem determination and resolution at this point. The time the ticket is submitted, and the response time will be logged to ensure SLA is met.
• Status Updates. During the problem determination and resolution process, Customer may receive regular communications, via email, chat, phone, or the support portal, as to the status of the problem determination and resolution. All communications should be l ogged in Avolve’s support system including date, time, and contact name. This helps Avolve and the customer determine the status and duration of the issue reported. Any communications outside the support portal, unless scheduled by Avolve Support such as an online conference (e.g., Zoom or Teams), will not be considered as part of Avolve’s SLA. Tickets forwarded to Avolve Development/QA or 3rd Party Software company for further analysis or patch development, may result to delayed updates to the customer. • Resolution Time. It is the time the issue should be resolved. In some instances, a resolution may still be a temporary fix beyond the viable workaround. This incident occurs if the solution requires a product patch and/or product upgrade that result to a longer resolution schedule. • Severity Re-classification. Avolve and the Customer can reclassify the severity of a ticket if required.

Severity Type Definitions:
• System Down: A complete system failure impacting Customer’s ability to use the system tha t affects their business operations. From a time management perspective, it is urgent and important. Examples of a system down severity is when all users are unable to login or various errors occur simultaneously for all users. Avolve Support will respo nd to the ticket within 1 hour and try to restore the system within 4 hours. Customer’s administrators, IT, and/or users experiencing the issue may need to be available to help address specific tickets. If it requires further investigation and longer resolution time, a temporary workaround (i.e., restoration) will be determined with the Customer to allow operations to proceed during business or non -business hours. Status updates will be provided periodically, on a System Down tickets 24x7 until resolution. Infrastructure issues are often resolved quickly by service or system restart. Any potential system alerts will be promptly addressed in an effort to avoid issues from reoccurring. Avolve will create a new ticket with a low severity rating if the iss ue has been resolved but require further root-cause analysis.
• Critical: An application failure impacting 1 or more end -users’ ability to use the system and affects critical operations that need to be addressed immediately. From a time management perspective, it is urgent and important for some users. Examples of a critical severity is when 1 or more users are unable to upload files, batch stamp approved plans, open several files, or run reports after several attempts.

Avolve Support will respond to the i ssue within 4 hours and try to resolve the issue within 6 hours. Customer’s administrators, IT, and/or users experiencing the issue may need to be available to help address specific issues. If it requires further investigation and longer resolution time, a temporary workaround (i.e., restoration) will be determined with the customer to allow operations to proceed during business hours. Critical tickets will be immediately worked on until restoration from Monday to Friday (excluding US holidays) and withi n business hours. Any issue that requires work beyond work hours will be addressed on the following workday and within business hours. Avolve will create a new ticket with a low severity rating if the issue has been resolved but require further root-cause analysis. • High: An error that causes Avolve product to fail with minimal business impact. From a time management perspective, it is not urgent but important. Examples of a high severity are intermittent but frequent operational errors that need to be a ddressed. Avolve Support will respond to the issue Resolution No. 2023-26
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within 12 business hours and try to resolve the issue within 24 business hours. If it requires further investigation and longer resolution time, a temporary workaround will be determined with the customer to allow operations to proceed during business hours. Support will work on the issue from Monday to Friday (excluding US holidays) and within business hours. Any issue that requires work beyond business hours will be addressed on the following workday and within business hours. Avolve will create a new ticket with a low severity rating if the issue has been resolved but require further root-cause analysis.
• Medium: An error that causes Avolve product to fail with no significant business impact. From a time management perspective, it is not urgent and slightly important to some users. Examples of a medium severity are how-to questions, or specific issues only occurring to a single end -user. Avolve Support will respond to the issue within 24 business hours and resolve the issue within reasonable best efforts.

Support will work on the issue from Monday to Friday (excluding US holidays) and within business hours. Any issue that requires work beyond business hours will be addressed on the following workday and within business hours.
• Low: A service request for a new feature, additional documentation, or an explanation of product functionality that does not impact business operations. From a time management perspective, it is not urgent with low importance. Avolve Support will respond to the issue within 48 business hours and resolve the issue within reasonable best efforts. Support will work on the issue from Monday to Friday (excluding US holidays) and within business hours. Any issue that requires work beyond business hours will be addressed on the following workday and within business hours.

Unsupported Issues. Avolve does not cover under Support, and the SLA does not include the following conditions (collectively, the “Unsupported Issues”).
• Any Avolve SAAS Solution use not covered by an active support contract and/or not in compliance with a valid agreement with Avolve. Authorized users of the Avolve SAAS Solution are entitled to Support as part of their use fee.
• End-user’s computer hardware/sof tware configurations such as OS (e.g., Linux or older Windows versions) or browser versions not supported by Avolve.
• Problems caused by misuse or misapplication of the Avolve SAAS Solution, including any anomalies and/or failures in test or production operating environments that impact the Avolve SAAS Solution and are determined to have their cause due to unwarranted Customer decisions, actions, system modification, policies and/or procedures. Interfaces created exclusively by Avolve using Avolve’s standard APIs, and configuration changes made exclusively by Avolve within the Avolve-provided user interface to the product shall not constitute misuse or misapplication and are not considered unwarranted for purposes of this section. Customer development of API interfaces not authorized by Avolve Software, or the use of API calls for pushing or pulling data to or from the Avolve SaaS system that has a negative impact to the performance or functionality of the system requiring Avolve Software assistance for resolu tion are not covered. This includes modifications to workflows and the overall system configurations available to the customer.

• Problems caused by Customer’s custom application code authorized to be developed using Avolve APIs as set forth in the documentation accompanying such API and the Customer’s Agreement. • Problems caused by updates or upgrades of 3rd party applications that are integrated with Avolve products and/or services.

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• All Training programs, regardless of software version updates and/or upgrades. • On-premises type of support including but not limited to: (a) End-user’s Windows configuration issues; (b) On-prem firewall or other security device configuration; (c) On-prem VPN, proxy servers, or other internal devices that connect to the Avolve SaaS solution; (d) Customer DNS, SSL certifications, or Azure AD configurations and updates if used for the Avolve SaaS solution; (d) On-prem or end-user’s network performance monitoring and updates; (e) End -User browser support; (f) User -modified and new workflows or eforms. Additional services may be purchased for an additional fee. • Any other reasons expressly set forth in the Customer’s Agreement.

Avolve, in its sole discretion, shall determine whether any of the foregoing exclusions are applicab le to Customer.

Any services provided for exclusions shall be paid by Customer at Avolve’s then -current rates, as well as all travel and other expenses incurred by Avolve in providing such services.

Customer’s Obligations for Operational Support. To facilitate clear and consistent communication and timely issue resolution, Customer shall designate up to four contact persons for technical support processes. These individuals are responsible for initiating support requests, communicating with Avolve techni cal support personnel, and monitoring the support process with Avolve. Timely Customer response to Avolve requests for information during issue resolution is a necessary pre -requisite to Avolve’s providing Support. Avolve also requires remote access to the Customer system for the purpose of problem determination and analysis. Where reasonably necessary to provide Support, Customer shall provide Avolve’s technical support personnel reasonable, remote access capabilities into Customer’s systems. Upon Avol ve’s request, Customer will also provide reasonable supporting data to aid in the identification and resolution of the issue.

Service Level Commitments

Uptime commitment. Per Avolve's SaaS agreement, Avolve will use commercially reasonable efforts to make the Avolve SAAS Solution available. The Annual Uptime Percentage has 2 components: The infrastructure uptime, which is dependent on Microsoft's SLA; Avolve software, which is 99.5%, excluding Planned Downtime. In the event that Avolve does not meet this uptime commitment, Customer will be eligible to receive a service credit for 10% of the monthly fee for each one (1) hour of downtime, up to Customer’s Pro-Rated Monthly Subscription Fee.

Definitions
• “Annual Uptime Percentage ” is calculate d by subtracting from 100% the percentage of 10 -minute periods during a calendar month in which the Avolve SAAS Solutions was Unavailable to Customer. • “Availability” means the ability to log into the Avolve SAAS Solution. • “Claim” means a claim for a servic e credit Customer submits by opening a support case with Avolve, on the basis that the hosted Avolve SaaS Product infrastructure has been Unavailable to Customer during a service month.
• “Pro-Rated Monthly Subscription Fee ” is calculated by dividing the Customer’s applicable annual Avolve SAAS Solution subscription fee by twelve.
• “Unavailability” means the inability to log into the Avolve SAAS Solution.

Service Credit Requests
To receive a service credit, Customer must notify Avolve and submit a Claim within thirty (30) days from the incident that would be the basis for the claim . To be eligible, the Claim must include (a) the dates, times, description and duration of each inci dent experienced; and (b) the Customer’s event logs or any other system telemetry that Resolution No. 2023-26
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document the errors and corroborate the claimed Unavailability (any confidential or sensitive information should be removed). Failure to provide a timely Claim, which i ncludes all the required information, will disqualify the Claim and Customer from receiving a service credit . If Avolve validates the Claim, then Avolve will promptly issue the service credit.

Service Credit Provisions
Service credits are Customer’s sole and exclusive remedy for any failure of Avolve to provide the Avolve SAAS Solution in accordance with the terms of the Agreement. Service credits shall be a credit toward future services only and do not entitle Customer to any refund or other payment from Avolve. Service credits may not be transferred, applied to another account, exchanged for, or converted to monetary amounts.

The maximum service credits awarded with respect to Claims the Customer submits in any calendar month shall not, under any circum stance, exceed in the aggregate the Customer’s Pro-Rated Monthly Subscription Fee for such month. Avolve will use all information reasonably available to it to validate Claims and make a good faith judgment on whether a service credit should be applied to the Claim.

SLA Exclusions
This SLA does not apply to any Availability or Unavailability of the Avolve SAAS Solution:
• During Planned Downtime;
• Caused by Unsupported Issues;
• Caused by factors outside of Avolve ’s or Avolve’s hosting company’s control, including any force majeure event or interruption or impediment to Internet access or related problems; • That result from Customer’s equipment, software or other technology and/or third party equipment, software or other technology, including any third party hosting providers; • That resulted from Planned Maintenance or associated to beta, evaluation, non -production systems, and trial services accounts;
• That result from any actions or inactions from Customer or any third party, including employees, Users, agents, contractors, or vendors, or anyone gaining access to the hosted Avolve SaaS Product infrastructure by means of Customer’s (and its Users’) passwords or equipment; • Arising from Avolve’s suspension and termination of Customer’s right to use the hosted infrastructure in accordance with the Agreement; and
• That result from Avolve application software implementation errors caused by Customer’s configuration, customization, installation, or human errors. • Avolve, in its sole discretion, shall determine whether any of the foregoing exclusions are applicable to Customer. Avolve may, but is not obligated to, issue a Service Credit in Avolve’s sole discretion where Customer’s use of the Avolve SAAS Solution may be Unavailable due to factors other than expressly provided here in this SLA.

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City of Escondido, CA
ProjectDox® ePlan Solution Proposal

February 28, 2023

Prepared by your Avolve Software Representative
Bruce Crawford
Director NorCal Northwest Sales
4835 East Cactus Road
Suite 420
Scottsdale, AZ 85254
www.avolvesoftware.com
Telephone: 415-272-9435
Email: [email protected]
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February 28, 2023

City of Escondido, CA
201 North Broadway
Escondido, CA 92025
ATT: Andrew Firestine

We are pleased to propose ProjectDox from Avolve Software. Based on our discussions to date and information derived from an all-day meeting with various Escondido departments and stakeholders, we have prepared a comprehensive proposal and implementation plan, including the implementation of Avolve Best In Class workflows for Building, Planning, Engineering and Fire.

Avolve Best In Class workflows represent the consolidation and refinement of tens of thousands of customer interactions, design and development hours spent addressing customers electronic plan review needs, and more.

Avolve’s ProjectDox product and professional services is unrivaled leading the nation in the number of dedicated ePlan installations, jurisdiction size, years of ePlan experience, the complexity of ePlan projects managed and deployed, and features and functions that support optimum flexibility and ease of-use by departments and citizenry alike.

Our proposal will directly address City of Escondido’s desire to increase transparency both inside and outside the organization, create plan review efficiency and optimize the applicant and reviewer experience, track all review activities with increased downstream/upstream visibility, and ultimately accelerate jobs and revenues driving economic development.

We appreciate the opportunity to work to earn your business and look forward to partnering with you on this important initiative.

Regards,
Bruce Crawford

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Executive Summary
ProjectDox will address City of Escondido’s core needs and much more Ease of Use:

ProjectDox guides your customer (applicant) through their participation in the plan review process. Once a review starts, the applicant immediately receives an email with instructions on how to upload their plan set. Each applicant interaction has a step-by-step instruction and videos to guide the applicant along the way. System interactions quickly become familiar for completing a submission correctly, addressing plan set corrections and downloading the approved plan set.

Review Efficiency
Avolve customers have reported 60-75% efficiency improvements overall, allowing more to be done with existing staff. Become a highly competitive community for attracting new business growth development. • Multiple departments and external agencies can participate in a review, collaborate together (no additional licensing required)
• Review comments are auto assembled for all reviewing departments and outside agencies into a single applicant communication of record for all review cycles
• All participants, including the applicant, know what they need to do next, and when it is due (reminders automatically sent by the system)
• Automation of process steps like stamping, applicant digital certifications, notifications, and reminders Process Insight
Each part of the review process is tracked across each review cycle, providing full insight on SLAs, departmental overloads, efficiency, and workload trends. These analytics are available as dashboard reports by managerial/supervisor levels. CBOs, Planning and Engineering Directors can have dashboards to key/strategic project reviews, departmental analytics to support budget requests, and more. A full record of “everything” communicated to the applicant and their responses is captured and available for archival record. Your applicant has a self-serve ability to track the project review status, reducing inbound inquiry calls, with presentation of any time delays that may have resulted from them. Jurisdictions can choose to enable applicant insight to review comments as the review progresses, allowing them to get an earlier start on changes or corrections required.

Process Solution with View & Markup
• The system operates by permit type, assigns the applicant, appropriate reviewers, coordinators, and external agencies their tasks to complete
• Reviewers work concurrently, not sequentially.
• Workflows can optionally move forward if 3rd party agencies don’t respond by policy set due date • The software auto assembles all review comments, and it records all applicant communication and responses across each cycle as one single review list for all to view. Applicants can review and respond to these comments online or offline in Microsoft Excel
• Automation efficiency – managing review comments, file stamping, digital signature verification, group assignments, and verifying markup corrections as to new versions
• Full process analytics and dashboards providing insight, transparency, and applicant/jurisdictional accountability Resolution No. 2023-26
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Quote Delivered To
Andrew Firestine Development Services Director City of Escondido, CA 201 North Broadway [email protected] (760) 839-4671 Escondido, CA
92025 Date of Quote: 2/28/2023 Quote Valid Until: 3/31/2023

ProjectDox ePlan Solution Pricing Agreement
SAAS
Product Name Product
Code Description Qty Unit Price Total Price
Test Environment
Light-Level
Capacity ProjectDox
SaaS License
SAAS.PDO
X-T.L
Software as a Service (SaaS) for ProjectDox
on a Test Environment. Designed for
organizations who plan to use the system for
development and/or testing with
approximately 5 concurrent users and
approximately 500 permits per year.

Software included for Production:
• ProjectDox Software Subscription
• Unlimited Workflow license

Services included for SaaS Production:
• Set up and installation of ProjectDox
• Managed services
• Annual ProjectDox upgrades

Test Environment Safeguard: Avolve security
policy limits access to the Test environment.

External users including the customer’s IT can
be provided limited VPN access to the Test
servers and database such as creation and
testing of custom reports. VPN access will be
made available upon request at additional
cost.

12 $980.00 $11,760.00
Production
Environment Light-
Level Capacity
ProjectDox SaaS
License
SAAS.PDO
X-P.L
Software as a Service (SaaS) for ProjectDox
on a Production Environment. Designed for
organizations who have approximately 75
concurrent users and 3,000 permits per year.

Software included for SaaS Production:
• ProjectDox Software Subscription
12 $6,000.00 $72,000.00
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• Unlimited Workflow license

Services included for SaaS Production:
• Set up and installation of ProjectDox
• Managed services
• Annual ProjectDox upgrades
-Technical Support

Production Environment Safeguard: Avolve
security policy limits access to the Production
environment. External users including the
customer’s IT will not be allowed direct
access to the Production servers and
database. Any development or testing can be
performed on the Test environment.

SaaS Cityworks
Integration
SaaS-
CW.Int
Avolve and Cityworks SaaS integration with
ProjectDox and Cityworks Permit Licensing
and Land (PLL)

Integration includes:

PLL with ProjectDox:
- Create Projects
- Get Permit Info
- Get Contact Info
- Get Default Reviews
- Add/Remove Plan Reviews
- Update Plan Reviews
Get Fee Balances
- Update Project Status Approved
1 $6,000.00 $6,000.00
TES-Video License
Subscription TES-VLS TES-Video License Subscription 1 $5,400.00 $5,400.00 YEAR 1 SaaS Cost Reduction -$16,680.00
SaaS Total: $78,480.00

TRAINING
Product Name Product
Code Description Qty Unit Price Total Price
Introduction to
ProjectDox
TES-
INTRO
The Training and Educational Services course
includes a flexible mixture of lecture and
hands-on lab time to familiarize the user with
the basic features of ProjectDox. This 3 hour
instructor lead course will review how to
access a project, view a file, use the search
feature and communication tools to efficiently
4 $1,125.00 $4,500.00
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use and communicate using the ProjectDox
application. This course is limited to a max of
12 persons per session/course.

Workflow & Project
Administration for
Coordinators/Admins
TES-
WF.PA.CA
Instructor led lecture, demonstration, and
hands-on activity to teach coordinating and
administrative staff the e-plan review process
using ProjectDox, ProjectFlow eForms and
associated administrative tools. Course
participation is estimated at 6 hours
3 $3,575.00 $10,725.00
Workflow & Markup
Training for
Reviewers
TES-
WF.MU.R
Instructor led lecture, demonstration, and
hands-on activity to learn the workflow review
process and Viewer tools and features.

Course participation is estimated at 6 hours.
4 $3,350.00 $13,400.00
ProjectDox Bundled
Training Services
PKG-
PDOX.TRN
Package Includes:
2 Introduction to ProjectDox
1 Workflow and Markup Training for
Reviewers
1 Workflow and Project Administration for
Coordinators
1 System Administration Training
1 Community Training

Package is limited to 12 Unique Users
1 $13,050.00 $13,050.00
Training Sub-Total: $41,675.00

PROFESSIONAL SERVICES
Product Name Product
Code Description Qty Unit Price Total Price
SaaS Cityworks
Integration Services PS-225 Avolve configuration services to implement the SaaS Cityworks integration subscription. 8 hrs $1,800.00 $1,800.00 Best-in-Class Level 1
ProjectFlow PLUS
Services
PS-225 BIC Plus Setup Services Level 1 for
Workflows: Building 136 hrs $30,600.00 $30,600.00
Best-in-Class Level 1
ProjectFlow PLUS
Services
PS-225 BIC Plus Setup Services Level 1 for
Workflows: Planning 136 hrs $30,600.00 $30,600.00
Best-in-Class Level 2
ProjectFlow CORE
Services
PS-225
BIC Core Setup Services Level 2 for
Workflows: Fire

50 hrs $11,250.00 $11,250.00
Best-in-Class Level 1
ProjectFlow CORE
Services
PS-225
BIC Core Setup Services Level 1 for
Workflows: Engineering

70 hrs $15,750.00 $15,750.00
**Professional Services Discount -$9,000.00
Professional Services Sub-Total: $81,000.00

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Unless otherwise stated, pricing does not include any applicable taxes that may be applied at invoicing. Travel and Expenses are not included in this total and will be invoiced as incurred.

First year SaaS shall be invoiced upon execution of Agreement. Payment for the total amount is due net thirty (30) days from the date of Initial Invoice. Payment via EFT. See notes for details.

Customer will be invoiced each month for the number of Professional Services hours at the hourly rate ($202.50) consumed during the previous month. A short description of each time entry and a time tracking spreadsheet will accompany the invoice each month including the number of hours remaining in the project budget.

Additional Professional Services hours beyond what is provided for in this proposal will be billed at an hourly rate of $225. This rate is locked for 18 months post go live.

Year 1 SaaS: $78,480
Year 2 SaaS: $82,650
Year 3 SaaS: $95,160
Training: Escondido may purchase additional training classes at the rate listed in the Training section above. Rates will be locked for 18 months post go live.

Grand
Total: $201,155

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Additional Pricing Information (not in scope) - the information below is for Avolve Entry-Level SaaS Production
Environment Entry-
Level Capacity
ProjectDox SaaS
License
SAAS.PDOX
-P.E
Software as a Service (SaaS) for ProjectDox
on a Production Environment. Designed for
organizations who have approximately 100
concurrent users and 7,000 plan checks per
year.

Software included for Production:
• ProjectDox Software Subscription
• Unlimited Workflow license

Services included for SaaS Production:
• Set up and installation of ProjectDox
• Managed services
• Annual ProjectDox upgrades

Production Environment Safeguard: Avolve
security policy limits access to the Production
environment. External users including the
customer’s IT will not be allowed direct
access to the Production servers and
database. Any development or testing can be
performed on the Test environment.

12.00 $9,000.00 $108,000.00
Test Environment
Entry-Level
Capacity
ProjectDox SaaS
License
SAAS.PDOX
-T.E
Software as a Service (SaaS) for ProjectDox
on a Test Environment with. Designed for
organizations who plan to use the system for
development and/or testing with
approximately 10 concurrent users and
approximately 2,000 permits per year.

Software included for Test:
• ProjectDox Software Subscription
• Unlimited Workflow license

Services included for SaaS Test:
• Set up and installation of ProjectDox
• Managed services
• Annual ProjectDox upgrades
• Technical Support
Test Environment Safeguard: Avolve security
policy limits access to the Test environment.

External users including the customer’s IT can
be provided limited VPN access to the Test
servers and database such as creation and
testing of custom reports. VPN access will be
made available upon request at an additional
cost.

12.00 $2,000.00 $24,000.00

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Electronic Document Management & Collaboration Solution

City of Escondido
Exhibit 2: Proposed Statement of Work
February 28, 2023

21001 N Tatum Blvd, Ste 1630-503, Phoenix, Arizona 85050 Resolution No. 2023-26
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EXECUTIVE SUMMARY
This Statement of Work will focus on SaaS (Software as a Service) of a Production and Test Environment and the implementation of ProjectDox Best in Class workflows addressing the Customer’s needs for Four (4) Best in Class plan review processes. The goal is to implement ProjectDox and a Cityworks permitting system integration for ProjectDox utilizing web services, in a standardized, off the shelf manner. We will leverage Avolve best practices and built-in configuration and modifications features, to meet the most effective functionality required to achieve the highest business value for the customer (the "Project").

SCOPE OF WORK
PHASE 1 SETUP

The project kickoff will be scheduled between Avolve Software and the customer to start the project and the setup of the Production SaaS environment including installation of the below purchased workflows. Additional activities will include the development and acceptance of the project plan and identification of one 30-minute weekly status calls to occur each week over this 31-week project. Additional environments (Test) will be factored into the project plan and implemented based on the sales order/agreement.

• System Setup
• Video Subscription Enabled

PHASE 2 CONFIGURATION & INTEGRATION

The Avolve project manager will work with the Customer to schedule configuration workshop sessions with the Customer project team to complete the Configuration Worksheet and complete the base setup using standard templates and design to expedite the project while providing the best business value for the below wo rkflows. This includes three (3) 2 -hour sessions to cover each workflow. Any design requirements identified during this phase outside of the design of the BIC workflow process and/or requiring development will be scoped and presented in a separate Statement of Work or Change Order.

• Building
• Planning
• Engineering
• Fire
The Integration Configuration section of the Configuration Worksheet that will be reviewed with the Customer project team and used to acquire the required data and API (Application Program Interface) connection/credential information to complete the defined integration. This includes two (2) 2-hour sessions.

Integration between ProjectDox and Cityworks requires the Cityworks permitting system to have the required API’s/ web services to facilitate the communication. If APIs are not currently present and functional, the Customer will need to provide the resources to develop and test any new required services and Avolve will assist in testing. Any additional integration points other than what i s described below would be considered additional scope and would require additional professional services (assurance services) to cover design, development, and testing. Direct database calls are not supported. Below is a description of the integration and visual reference of the integration touchpoints denoted by a gear icon are found in the below workflow diagram.

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• Cityworks permitting system integration includes:
o Project Creation – calls the project creation API services in the associated permitting system to create a new permit
o Get Permit Information– calls the API services to retrieve defined permit information from permitting system, i.e., building details, zoning type, square footage, etc. Information available varies per permitting system.

o Get Contact Information– calls the API services to retrieve defined contacts and associated information, i.e., applicant name, address, phone, contractor name, address, phone, etc.

Information available varies per permitting system.

o Get Default Reviews – calls the API services to retrieve the predefined setup of review groups to be assigned during the Assign Reviewers task in ProjectDox. These groups are then automatically selected (checked) in the Assign Reviewers eForm.
o Add/Remove Plan Reviews – as plan reviews (Department Review) are assigned or unassigned, this is posted to the permitting system by adding/deleting/de-activating the associated reviews. o Update Plan Reviews – Push of data to provide the permitting system with the following data related to the plan review:
▪ Reviewer Name
▪ Reviewer Department
▪ Review Cycle
▪ Review Status (Approved, Rejected, Waived, Canceled
▪ Date Completed

o Get Fee Balance - calls the API services to retrieve any fee balance. Some permitting systems APIs (Application Program Interface) can also supply details of fees due, but most only provide a current balance.
o Update Project Status Approved – Push final status or log event of approved to permitting system API indicating to the permitting system that all reviews are approved in ProjectDox.

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PHASE 3 PROJECT TEAM TRAINING
The Avolve training team will schedule a training session to educate the project team on the key concepts and features of the application and workflow to provide knowledge on how to begin unit testing of the workflow(s). This course will include basic navigation of the system, creating and editing annotations on plans and how this relates to the roles within the application and workflow for plan review. All courses are limited to 12 persons per course session maximum.

PHASE 4 ACCEPTANCE TESTING
Integration Unit Testing (IUT)
The Integration Unit testing phase is conducted over a 10-business day per period that includes the delivery of the designed process, validation of the design by the Customer and resolution to design issues by Avolve before starting the next sprint. The Avolve team will provide guidance to the Customer on methods to test the designed process and system meeting with the customer to work towards acceptance of the designed integrated product. Customer will validate the integration and document any identified issues in the Tracking Log document provided by the Avolve project manager. Avolve will resolve any identified issues to allow the customer retest to gain acceptance.

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End to End User Acceptance Testing
The Avolve project manager will meet with the Customer to assist in the review and issue resolution for the functional end-to-end system. This phase is conducted over a 10-business day period and will allow the Customer to test and validate the full design of the system and the designed workflow(s). Any identified issues shall be added to the Tracking Log document provided by the Avolve project manager. Avolve will resolve any identified in scope issues to allow the customer to retest to gain acceptance.

Completion and acceptance of the testing will initiate the promotion of the code from the Production system to the Test system to prepare for go-live training.

• Setup of Test Environment
• Code Promotion from Production to Test
PHASE 5 TRAINING
Avolve education specialists will deliver the courses below to the Jurisdictions staff. The courses will train 60 persons and will be delivered based on the project plan rollout. A maximum of 12 persons per course is enforced except for the Community Outreach (TES-OUT). This demonstration/lecture session is targeted for the design community and is intended to be conducted for larger audiences (25+) to educate and promote the new processes.

It is recommended that training sessions be organized with participants of similar technological abilities to allow for the most efficient delivery and retention of the materials. Additional training beyond the courses below may be added, or additional training may be performed post-go-live by leveraging the assurance services funds afforded by the project.

• Delivery of classes for all products/modules as purchased

Quantity
Total #
of
Users
Class
Size Course Name Est
Length Target Audience
1 12 12 Project Team Training 5 hrs.

Jurisdiction Project Team involved in
UAT Testing
6 72 12 Introduction to ProjectDox 3 hrs.

Plan Reviewer, Intake/Permit
Technicians, Project Coordinators,
Administrators
5 60 12
Workflow & Markup Training for Plan
Reviewers 6 hrs. Plan Review Staff
4 48 12
Workflow Coordination and Project
Administration 6 hrs.

Intake/Permit Technician Staff, Project
Planners, Day-to-Day
Supervisors/Administrators
1 12 12 System Administration 4 hrs.

Business Power Users, IT (Information
Technology)
1 25+ 25+ Community Outreach 2 hrs. Public/Customers
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PHASE 6 GO LIVE/LAUNCH
The Avolve project manager will assist the customer with any product related errors or questions regarding the software for a period of 30 days post go-live. After the 30 day go-live period the project will be considered complete, and the customer shall be introduced and transitioned to the Avolve support team. The extension of support from the project manager can be extended with the purchase of post go live subscription services program.

• Go-Live
• Transition to Support

CLIENT SUCCESS SERVICES SUBSCRIPTION
Service may be used at any time during the project to assist with additional scope identified during the project. The subscription term is initiated post the initial systems Go-Live to provide continued support by your Avolve project team to ensure seamless adoption and change management for the newly added process and system. Subscription hours consumed are reported monthly to the Customer and may not exceed the hours of the subscription. Hours not consumed at the end of the subscription period will be forfeited.

ACCEPTANCE PROCESS
There will be Key Deliverables within the identified phases of the project as identified in the Project Activities/Deliverables Schedule which will be subject to acceptance by the Customer ("Acceptance"). Upon completion of each Key Deliverable, Avolve will request from the Customer a written response/acceptance within five (5) business days after receipt thereof. Notwithstanding the foregoing or anything to the contrary in th e Purchase Agreement, all other Deliverables provided under this Statement of Work shall be deemed to have been accepted by the Customer upon delivery. If Customer does not approve, reasons for rejection must be clearly noted. Avolve will then work with the Customer to come to agreement on obtaining approval. The Customer shall be deemed to accept any such Key Deliverable which the Customer does not accept or reject within such period. This acceptance will initiate the invoice of the milestone, if applicable.

AVOLVE PROJECT PLAN AND PROCESS
Promptly following execution of this Statement of Work, the parties shall meet to discuss the general project schedule, which will be organized around the standard Avolve project On -Boarding process. Within 2 weeks, the initial project plan will be created and sent to the Customer. The Project Plan contains a schedule, a list of tasks in a schedule format, assignments of specific team members over specific times and communication status reporting processes. The Project Plan is a living document that will be reviewed throughout the term of this Agreement and may be adjusted as reasonably necessary, as agreed to from time to time by the parties involved.

PROJECT ASSUMPTIONS AND CAVEATS

1. This Project was scoped based upon purchase of ProjectDox Best In Class, understanding that the site will be hosted by Avolve and configured per established Best-In-Class standards. This understanding forms the basis Resolution No. 2023-26
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for Avolve’s pricing and the Deliverables to be provided under this Statement of Work. Any deviation from these requirements will require a change order and may increase costs or the estimated time of Project completion.

2. Avolve will have full access to the project team upon approval of the Project Manager, through the customer’s project management program (Teamwork). Customer and Avolve agree that updating Teamwork will be the responsibility of customer. This access may require the team members of the customer to dedicate specific time to specific detailed tasks within the Project Plan. Team member tasks will be more clearly defined during the kickoff and planning sessions and documented in the Project Plan. The Avolve PM will work with the customer’s project manager on the scheduling of meetings and requirements gathering sessions with the City.

3. Customer and its third parties and/or subcontractors will fulfill any hardware/software requirements, including the purchase/development of APIs (Application Program Interface) for integration to allow for communication between Avolve Software and the Customer’s permitting system in a timely fashion to keep the Project Plan on schedule.

4. This best approach package to implementation relies on partnership with the jurisdiction to achieve desired go- live goals. To that end, a not to exceed of 400 hours have been allocated to the project for professional service.

Should the customer cause or contribute to the delay of any Deliverable, extend scope of schedule and/or scope of work incremental costs may be associated and may result in compilation of a formal Change Order to denote said changes.

5. Cancellation or rescheduling requests within 72 hours of an upgrade and/or training date may result in a 20% cancellation fee. The 20% fee will be calculated on the total services for the project minus any Assurance Services.

6. All parties will reasonably prioritize their efforts to meet the Project Plan schedule in order to achieve a rapid roll out model. It is understood by all parties that multiple tasks may be in process at one time and Avolve may have more than one Professional Services team member working on the project at one time.

7. Client will provide adequate Project management for their own resources, and/or third parties, to collaborate with Avolve’s project manager. Client subject matter experts and applicable users will be accessible and available in a timely fashion and for adequate and reasonable durations. Avolve will make sure that scheduling of meetings is done in advance of these resource allocations.

8. Avolve has scoped and intends to fully leverage ProjectDox as is, utilizing all built in configuration features to set up the processes using the Configuration Worksheet as a guide to meet business needs.

9. Any optional items chosen in the Purchase Agreement/Sales Order are not included here and would require a modification to this Statement of Work.

10. Customer understands that an ePlan Life Cycle implementation is a significant digital transformation enterprise project that requires dedicated change management from the Customer’s staff. This will be key for the success of the Customer.

11. Work will not begin until an executed copy of all paperwork is complete. Work will begin at the earliest date at which Avolve resources and Customer resources are available or as otherwise agreed to.

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12. Avolve and Customer agree to cooperate in good faith to complete the Services and Deliverables in a timely and efficient manner.

13. Recording of Avolve provided training or UAT (user acceptance testing) sessions is not permitted unless noted within the Statement of Work.

14. All training classes, unless otherwise noted, are limited to 13 persons maximum per class unless noted otherwise in this SOW.

15. In the event the Customer delays the progression of the implementation and Avolve Software resources are placed on-hold and/or removed from the project, all hours that have been completed to that point will be invoiced. Avolve Software will not guarantee Project Managers and/or Technical Avolve resources will be available to re-deploy immediately upon resolution of the issue. Avolve requires 4 weeks’ notice of intent to restart the project, to assess available resources to determine the next available timeframe and communicate any restart costs to restart the project.
*Configuration options are as described by ProjectDox documentation and as evidenced by ProjectDox administration screens. Minor changes to Avolve ProjectDox Best Practices (Best in Class) workflows are changes to activate/deactivate and/or parametrize with variables, existing steps in the Best Practices workflows. Customization of additional products and modules are to be within the bounds and scope of the respective core product(s) and modifications are limited to those that are allowed by core product design.

CHANGE CONTROL PROCESS
The “Change Control Process” is that process which shall govern changes to the scope of the Project during the life of the Project. The Change Control Process will apply to new components and to enhancements of existing components. The Change Control Process will commence at the start of the Project and will continue throughout the Project's duration. Additional procedures and responsibilities may be outlined by the Project Manager identified on the signature page to the Agreement and will be included in the Project Plan if mutually accepted.

Under the Change Control Process, a written “Change Request” (attached) will be the vehicle for communicating any desired changes to the Project. It will describe the proposed change; the reason for the change and the effect the change may have on the Project. The Project Manager of the requesting party will submit a written Change Request to the Project Manager for the other parties.

All parties must sign the approval portion of the Change Request to authorize the implementation of any change that affects the Project’s scope, schedule or price. Furthermore, any such changes that affect the scope of this SOW, schedule or price will require an amendment to the SOW and/or any other part of the Purchase Agreement.

PRICING, TRAVEL AND EXPENSE
Pricing and payment terms are as set forth in the Purchase Agreement/Sales Order. • Professional Service hours will be invoiced monthly as time and materials based on the rate for the applicable resources. Avolve will provide monthly balances for hours remaining for the project. • Training will be invoiced as courses are completed at the identified fixed price provided in the Purchase Agreement/Sales Order.
• Travel and Expenses are estimated to be $12,500.00 and will be invoiced to customer as incurred for trips to the Customer offices. Customer will only be invoiced for actual expenses incurred.

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PROJECT ACTIVITIES / DELIVERABLES PAYMENT SCHEDULE
Preliminary project and deliverable schedules are provided and are subject to change based on discussions to occur post the kick-off of the project, provided that both the Customer and Avolve Software agree to the updated terms in writing. The project scope and associated costs are based on a 31-week implementation schedule.

31 WEEK SCHEDULE, BEGINNING APRIL 3

Schedule Deliverable
Week 1 – Kick Off • Project Kick Off Meeting
• Project Plan
Week 2 – System Setup • ProjectDox system delivered for use Week 3-5 – Configuration Sessions (Building & Planning) • Configuration Workshops • Integration Workshops
Week 6-8– Configuration Sessions (Engineering & Fire) • Configuration Workshops Integration Workshops
Week 9-11 – Customer Configuration Worksheet Completion Week 12-14 – Customer Configuration Worksheet
Completion
Week 15-16– Configuration (Building/Planning)
Week 17-18 – Configuration (Engineering/Fire)
Week 19 – Integration Configuration • Deliver Functional System Week 20 – Project Team Training • Scheduled Project Team Training Course • Applicant, Reviewer and Coordinator Quick Reference Guides Week 21-23 – User Acceptance Integration Unit
Testing (Building/Planning)
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Week 21-23 – User Acceptance Integration Unit Testing
(Engineering/Fire)
Week 24-27 – User Acceptance Workflow Testing
(Building/Planning)
• Provide final system configuration worksheet
Provide final Configuration Requirements Document or CRD Week 24-27 – User Acceptance Workflow Testing
(Engineering/Fire)
• Provide final system configuration worksheet
• Provide final Configuration Requirements Document or CRD Week 28 – Test Environment Setup • Functional Test Environment Week 29-30 – Go Live Training • Go Live Training as identified in the SOW Week 31 – Go Live (Building, Planning, Engineering, Fire) • Launch of System • Launch of Building & Planning Workflows

Client Success
Services
• Subscription is initiated post the initial system Go Live 30-business day period. Subscription is for 48 hours over the term of 6 months.

Sign Off Client Success Services Subscription

For the avoidance of any doubt, all right, title and interest in and to the Deliverables (including without limitation the above Key Deliverables), as well as the intellectual property rights to such Deliverables, shall belong to Avolve, subject to the limited license granted to the Customer pursuant to the Licensing Agreement.

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STATEMENT OF WORK ACCEPTANCE
Once fully executed, this document will become the Statement of Work for the Project defined in this document. Avolve and Customer’s signatures below authorizes Avolve to begin the services described above and indicates Customer’s agreement to pay the invoices associated with these services delivered as described.

AUTHORIZED SIGNATURES
Avolve Software Corporation City of Escondido, CA
By: By:

Name: Name:

Title: Title:

Date: Date:

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EXHIBIT A: CHANGE REQUEST FORM

Resolution No. 2023-26
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March 8, 2023

Item No. 16: APPOINTMENT OF COUNCIL AD-HOC

SUBCOMMITTEE ON

HOMELESSNESS -

 On February 15, 2023, Mayor Dane White requested
that an item be placed on the Future Agenda for the
appointment of a council Ad-Hoc Subcommittee on
homelessness. No materials available for this item.

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KEY-

CONSENT CALENDAR CURRENT BUSINESS

PUBLIC HEARING WORKSHOP
3/15/2023 - BOARD & COMMISSION INTERVIEWS
3/22/2023
PRESENTATION: State of the City
CONSENT CALENDAR - (R. VOGT) - FISCAL YEAR 2022 STATE HOMELAND SECURITY GRANT PROGRAM AND BUDGET ADJUSTMENT - It is requested that the City Council adopt Resolution No. 23-25 authorizing the Escondido Fire Department to accept Fiscal Year 2022 State Homeland Security Grant funds in the amount of $114,919; 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 - (A. FIRESTINE) - GENERAL PLAN and CLIMATE ACTION PLAN ANNUAL PROGRESS REPORT - Request the City Council review and receive the General Plan Annual Progress Report (“APR”), documenting the City of Escondido's ("City") progress on implementing the General Plan and Climate Action Plan, and authorize submittal of the report to the State Office of Planning and Research ("OPR"), the State Department of Housing and Community Development ("HCD"), and the San Diego Association of Governments ("SANDAG").

PUBLIC HEARING - (A. FIRESTINE) - ANNUAL ACTION PLAN AMENDMENT - Request the City Council approves the recommendation to make a substantial amendment in the Annual Action Plans of 2019, 2020, and 2021 to eliminate program funding for playground equipment replacement ($775,000), fitness court in Washington Park ($130,040), debris team ($52,000) and use unallocated funds to increase the funding of already approved projects: Creek Trail Fencing ($250,000) and the Old Escondido Lighting Project ($400,000).

PUBLIC HEARING - (A. FIRESTINE) - HOME-ARP ALLOCATION PLAN AND ADMINISTRATIVE FUNDING - Request the City Council's approval for the HOME-ARP allocation plan and use of administrative funding. The CIiy was awarded a one-time investment grant called HOME-ARP in fall 2021 for $2,262,839 to assist individuals or households who are experiencing or at-risk of homelessness and other vulnerable populations. The City proposes to use these funds to create 15 affordable housing units for extremely low-income 0-30% households with a preference for those experiencing homelessness and add a 1 FTE housing navigator to the Housing & Neighborhood Services Division Team to assist Escondido residents find or maintain housing.

PUBLIC HEARING - (A. FIRESTINE) - AMENDMENT TO THE ADOPTED 2021-2029 HOUSING ELEMENT - Request the City Council approve the recommendation to adopt the General Plan Amendment to update the City’s adopted Housing Element for the 6th Cycle planning period from April 15, 2021, to April 15, 2029.

CURRENT BUSINESS - (C. MCKINNEY) - CALIFORNIA CENTER FOR THE ARTS ESCONDIDO MANAGEMENT AGREEMENT 3/29/23 - NO MEETING

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