Agenda packet — Escondido City Council, December 13, 2023 (part 1 of 3)

CITY of ESCONDIDO

Council Meeting Agenda
WEDNESDAY, DECEMBER 13, 2023
4:00 PM - Closed Session (Parkview Conference Room)
5:00 PM - Regular Session
Escondido City Council Chambers, 201 North Broadway, Escondido, CA 92025

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

MAYOR
Dane White

DEPUTY MAYOR
Joe Garcia (District 2)

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

CITY MANAGER
Sean McGlynn

CITY ATTORNEY
Michael McGuinness

CITY CLERK
Zack Beck

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

In Person On TV Online

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

1 Wednesday, December 13, 2023

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

In Person In Writing

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

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

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

2 Wednesday, December 13, 2023

CLOSED SESSION
4:00 PM

CALL TO ORDER

1. Roll Call: C. Garcia, J. Garcia, Martinez, Morasco, White

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

CLOSED SESSION

ADJOURNMENT

I. CONFERENCE WITH LABOR NEGOTIATORS (Government Code § 54957.6)

a. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Escondido Police Officers’ Association Sworn Personnel Bargaining Unit
b. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Escondido Police Officers’ Association Non-Sworn Personnel Bargaining Unit
c. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Escondido Firefighters’ Association Safety Personnel and Non- safety Personnel Bargaining Unit
d. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Escondido City Employees’ Association Supervisory Bargaining Unit
e. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Maintenance and Operations Bargaining Unit and Administrative / Clerical / Engineering Bargaining Unit, Teamsters Local 911
f. Agency Representative: Sean McGlynn, City Manager, or designee Employee Organization: Police Management Association (Unrecognized) Bargaining Unit 3 Wednesday, December 13, 2023

REGULAR SESSION
5:00 PM Regular Session

MOMENT OF REFLECTION
City Council agendas allow an opportunity for a moment of silence and reflection at the beginning of the meeting to be led by the City Clerk. The City does not endorse, sponsor or sanction any particular religion and any remarks made are to allow all individuals to personally reflect, contemplate, pray, or meditate as they deem appropriate.

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

CALL TO ORDER
Roll Call: C. Garcia, J. Garcia, Martinez, Morasco, White

CLOSED SESSION REPORT

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

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

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

4 Wednesday, December 13, 2023

2. APPROVAL OF WARRANT REGISTER (COUNCIL) -
Request the City Council approve the City Council and Housing Successor Agency warrant numbers:
 378986 – 379168 dated November 21, 2023
 379169 – 379335 dated November 29, 2023
Staff Recommendation: Approval (Finance Department: Christina Holmes)

3. APPROVAL OF MINUTES: None

4. WAIVER OF READING OF ORDINANCES AND RESOLUTIONS –

5. APPROVAL OF THE FISCAL YEAR 2024/25 RECOGNIZED OBLIGATION PAYMENT SCHEDULE Request the City Council adopt Resolution No. 2023-149 approving the Fiscal Year 2024/25 Recognized Obligation Payment Schedule (“ROPS”) so that the Successor Agency may continue to make payments due for enforceable obligations.

Staff Recommendation: Approval (Finance Department: Christina Holmes, Director of Finance) Presenter: Christina Holmes, Director of Finance
a) Resolution No. 2023-149

6. CALTRANS CLEAN CALIFORNIA LOCAL GRANT PROGRAM $3,503,000 FOR ESCONDIDO CREEK TRAIL

ROSE TO MIDWAY
Request the City Council adopt Resolution No. 2023-162, authorizing receipt of Clean California Local Grant Program funds for the Escondido Creek Trail Rose to Midway Project in the amount of $3,503,000, and authorizing execution of all grant-related agreements and forms.

Staff Recommendation: Approval (City Manager’s Office: Joanna Axelrod, Deputy City Manager) Presenter: Joanna Axelrod, Deputy City Manager
a) Resolution No. 2023-162

5 Wednesday, December 13, 2023

7. 220 AND 240 S. BROADWAY LEASE AGREEMENTS WITH THE ESCONDIDO EDUCATION COMPACT Request the City Council adopt Resolution No. 2023-173 authorizing the Mayor to execute, on behalf of the City, two Lease Agreements with the Escondido Education COMPACT for the properties located at 220 and 240 S. Broadway.

Staff Recommendation: Approval (Economic Development Department: Jennifer Schoeneck, Director of Economic Development)
Presenter: Jennifer Schoeneck, Director of Economic Development a) Resolution No. 2023-173

8. SETTLEMENT OF TOUCHSTONE LITIGATION AND FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT FOR MUNICIPAL PARKING LOT #1 PROJECT
Request the City Council approve Resolution No. 2023-164 to (1) authorize the settlement of the litigation titled Touchstone MF Fund I, LLC v. City of Escondido; and (2) approve the First Amendment to Purchase & Sale Agreement.

Staff Recommendation: Approval (City Attorney’s Office: Michael R. McGuinness, City Attorney) Presenter: Michael R. McGuinness, City Attorney
a) Resolution No. 2023-164

9. COUNCIL COMPENSATION
Request the City Council adopt Ordinance No. 2023-19R providing for an amendment to Escondido Municipal Code § 2-28(a) and § 2-28(b) increasing the salary for councilmembers and the mayor, respectively, pursuant to Government Code § 36516 and Council Rules of Policy and Procedure Section B(9).

Staff Recommendation: Approval (City Attorney's Office: Michael R. McGuinness, City Attorney) Presenter: Michael R. McGuinness, City Attorney
a) Ordinance No. 2023-19R (Second Reading and Adoption)

6 Wednesday, December 13, 2023

CURRENT BUSINESS

10. FISCAL IMPACT ANALYSIS OF FUTURE DEVELOPMENT AND CONSIDERATION OF CHANGES TO THE

CITY'S SERVICES COMMUNITY FACILITIES DISTRICT LEVIES
Request the City Council receive and file the Fiscal Impact Analysis (“FIA”) of Future Development.

Additionally, staff recommends the City Council adopt Resolution No. 2023-156 amending the previously set levy of special taxes (“levy” or “levies”) for the City’s Services Community Facilities District (“Services CFD”).

Staff Recommendation: Receive and File FIA and adopt Resolution No. 2023 -156, selecting “Option H”. (Development Services Department: Christopher W. McKinney, Deputy City Manager/Interim Director of Development Services)
Presenter: Christopher W. McKinney, Interim Director of Development Services a) Resolution No. 2023-156

PUBLIC HEARINGS

11. CONTINUED - A REQUEST TO REMOVE A CONDITION OF APPROVAL APPLIED TO A MAJOR PLOT PLAN

REQUIRING FUNDING OF ONGOING MUNICIPAL SERVICES REQUIRED BY THE PROJECT Request the City Council uphold the Planning Commission recommendation of denial (4-2-1) to modify a Major Plot Plan in order to eliminate a condition of approval requiring funding of ongoing municipal services. The request is for a project condition of approval required for a 44-unit apartment project located at 1860, 1866, 1870 & 1896 S. Escondido Blvd. and the City Council may a) adopt Resolution No. 2023-152, denying a modification and upholding a condition of approval; or b) adopt Resolution No. 2023-153, granting the modification and waiving the condition of approval.

Staff Recommendation: Approval (Development Services Department: Christopher McKinney, Deputy City Manager/Interim Director of Development Services)
Presenter: Veronica Morones, City Planner
a) Resolution No. 2023-152
b) Resolution No. 2023-153

7 Wednesday, December 13, 2023

12. SPECIFIC PLAN AMENDMENT, MAJOR PLOT PLAN AND DENSITY BONUS FOR A 21-UNIT, MULTI-FAMILY RESIDENTIAL/MIXED-USE PROJECT - PHG20-0036
Request the City Council introduce Ordinance No. 2023-20 adopting an Addendum to the Final Negative Declaration adopted for the South Centre City Specific Plan and approve an amendment to the South Centre City Specific Plan. Additionally, adopt Resolution No. 2023-171 approving a Major Plot Plan and Density Bonus for a 21-unit mixed-use project.

Staff Recommendation: Approval (Development Services Department: Christopher McKinney, Deputy City Manager/Interim Director of Development Services)
Presenter: Jay Paul, Senior Planner
a) Ordinance No. 2023-20 (First Reading and Introduction) b) Resolution No. 2023-171

CURRENT BUSINESS

13. DEPUTY MAYOR APPOINTMENT
Request the City Council appoint a Deputy Mayor in accordance with Ordinance No. 2020-28.

Staff Recommendation: Approval (City Clerk's Office: Zack Beck, City Clerk) Presenter: Zack Beck, City Clerk

14. COUNCIL RESOLUTION OPPOSING THE REMOVAL OR REPURPOSING OF ANY EXISTING ROADWAY

TRAFFIC LANES
Request the City Council adopt Resolution No. 2023-172, objecting to the removal or repurposing of any travel lanes for purposes of accommodating state or NCTD Climate Goals.

Staff Recommendation: Approval (City Council: Mayor Dane White) Presenter: Mayor Dane White
a) Resolution No. 2023-172

8 Wednesday, December 13, 2023

FUTURE AGENDA

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

Staff Recommendation: None (City Clerk's Office: Zack Beck)

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

ADJOURNMENT

UPCOMING MEETING SCHEDULE
Wednesday, January 10, 2024 4:00 & 5:00 PM Closed Session, Regular Meeting, Council Chambers Wednesday, January 24, 2024 4:00 & 5:00 PM Closed Session, Regular Meeting, Council Chambers

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

9 Consent Item No. 1 December 13, 2023

A F F I D A V I T S

I T E M

P O S T I N G –

 CONTINUED – MODIFICATION OF MAJOR PLOT
PLAN – PL23-0176 AND ADM 19-0092

 SPECIFIC PLAN AMENDMENT, PLOT PLAN AND
DENSITY BONUS – PHG20-0036

10 Item1.

CITY OF ESCONDIDO
OFF

ICE OF THE CITY CLERK
201 NORTH BROADWAY
ESCONDIDO, CA 92025-2798
(760) 839-4617

NOTICE OF PUBLIC HEARING
The City
of Escondido recognizes its obligation to provide equal access to public services for individuals with disabilities. Please contact the American Disabilities Act (A.D.A.) coordinator (760) 839- 4643 with any requests for reasonable accommodations at least 24 hours prior to the meeting. The City of Escondido does not discriminate against any person with a handicapped status. All interested persons are invited to attend the meeting.

The staff report will be available at the Escondido Planning Division, 201 N. Broadway, Escondido, CA 92025; and on the City’s website at
https://escondido-ca.municodemeetings.com/ after
Thursday, December 7, 2023. For additional information, please contact Jay Paul (760) 839-4537, or email at
[email protected] and refer to Case No. PHG20-0036.

Zack Beck, City Clerk
City of Escondido
November 30, 2023
,7190436Ā-6:25782Ā/,(Ā!"#.% *#Ȁ"%&)Ȁ$!""Ȁ** *Ȁ&!%.' &#'+*' The Escondido City Council will hold a public hearing, in the City Council Chambers, Escondido City Hall, 201 N. Broadway, Escondido, California at 5 p.m., on Wednesday, December 13, 2023, to consider the item listed below:

SPECIFIC PLAN AMENDMENT, PLOT PLAN AND DENSITY BONUS – PHG20-0036:

REQUEST: The Project includes an Amendment to the South Centre City Specific Plan to apply the mixed-use overlay to the Project site to allow for residential and commercial development (mixed-use) up to 30 dwelling units per acre and building height up to 45 feet. The request also includes a Major Plot Plan and Density Bonus for the development of a four-story building, ground-floor parking garage, up to 4,200 square feet of ground-floor commercial/flex space and 21 multi-family residential units. The Density Bonus would allow for an increase in allowable density but requires 3 of the units to be restricted for “very low-income” tenants, along with certain concessions/waivers from development standards. The proposal also includes adoption of the environmental determination for the Project.

PROPERTY SIZE AND LOCATION: The 0.46-acre project site is located on the northwest corner of S. Escondido Boulevard and W. Ninth Avenue, addressed at 829 – 849 S. Escondido Boulevard and 332 W. Ninth Avenue (APNs 233-371-14-00 and 233-371-15-00).

ENVIRONMENTAL STATUS: An Addendum to the previously adopted Negative Declaration has been prepared for the proposed project in accordance with section 15164 of the California Environmental Quality Act (CEQA).

If you challenge this item in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing.

PLANNING COMMISSION ACTION: On November, 28, 2023 the Planning Commission voted 4-2 (Noes: Paul, Speer) to recommend approval of the project. Commissioner Weiler recused himself from the hearing.

PUBLIC COMMENT:

To submit comments in writing, please do so at the following link: https://escondido- ca.municodemeetings.com/bc-citycouncil/webform/public-comment. All comments received from the public will be made
a part of the record of the meeting.

Published in THE ESCONDIDO TIMES-ADVOCATE:
11/30/23
11 Item1.

STAFF REPORT

December 13, 2023
File Number 0400-40

SUBJECT

APPROVAL OF WARRANT REGISTER (COUNCIL)

DEPARTMENT
Finance

RECOMMENDATION
Request approval for City Council and Housing Successor Agency warrant numbers:
378986 – 379168 dated November 21, 2023
379169 – 379335 dated November 29, 2023
Staff Recommendation: Approval (Finance Department: Christina Holmes)

FISCAL ANALYSIS
The total amount of the warrants for the following periods are as follows:

November 16, 2023 – November 21, 2023 is $3,021,885.47
November 09, 2023 – November 29, 2023 is $4,953,826.92

BACKGROUND

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

12 Item2.

Consent Item No. 3 December 13, 2023

A P P R O V A L

O F

M I N U T E S

13 Item3.
14 Item4.

STAFF REPORT

December 13, 2023
File Number 0440-35

SUBJECT
APPROVAL OF THE FY2024/25 RECOGNIZED OBLIGATION PAYMENT SCHEDULE

DEPARTMENT
Finance

RECOMMENDATION
Request the City Council adopt Resolution No. 2023-149 approving the FY2024/25 Recognized Obligation Payment Schedule (“ROPS”) so that the Successor Agency may continue to make payments due for enforceable obligations.

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

FISCAL ANALYSIS
Under the Redevelopment Dissolution Act, the Successor Agency is responsible for submitting to the County Oversight Board a payment schedule for obligations of the former Redevelopment Agency. The County Oversight Board will forward this payment schedule to the State for approval. Once approved by the State, the County of San Diego will fund the payments from the County Redevelopment Property Tax Trust Fund (RPTTF).

PREVIOUS ACTION
Resolution No. 202 2-144 to approve the Recognized Obligation Payment Schedule (ROPS2 3-24) was approved by the City Council on December 7, 2022.

BACKGROUND
Escondido’s Redevelopment Agency (“Redevelopment Agency”) wa s established in December 1984 in connection with the adoption of the Escondido Redevelopment Plan (“Plan”) and formation of a Redevelopment Project Area (“Escondido Redevelopment Project Area”). The Redevelopment Agency consisted of the members of the Es condido City Council, although the City and Redevelopment Agency were legally separate entities.

15 Item5.

In essence, redevelopment worked for decades by freezing the level of property taxes at the time the Redevelopment Agency adopted the Plan for the Escondido Redevelopment Project Area. During the existence of redevelopment, any increases in taxes went to the Redevelopment Agency, rather than the various entities that would have otherwise received the tax increases. This stream of revenue (the difference between taxes at the time of formation and the amount of increases, which occur over the years) was known as “tax increment” and could be used to pay the principal of and interest on loans, moneys advanced to, or indebtedness incurred by the Redevelopment Agency to finance a redevelopment project.

As part of the 2011 Budget Act, and in order to protect funding for core public services at the local level, the State Legislature approved the dissolution of the state’s 400 plus Redevelopment Agencies (“RDAs”).

The State of California’s passage of Assembly Bill X1 26 dissolved RDAs and replaced them with successor agencies effective February 1, 2012. As a result of the elimination of the RDAs, property tax revenues are now being used to pay required payments on ex isting bonds, other obligations, and pass -through payments to local governments. The remaining property tax revenues that exceed the enforceable obligations are being allocated to cities, counties, special districts, and school and community college districts.

To help facilitate the wind-down process at the local level, successor agencies were established to manage redevelopment projects currently underway, make payments on enforceable obligations, and dispose of redevelopment assets and properties. The City of Escondido elected to serve as the Successor Agency for the Redevelopment Agency.

Pursuant to Health and Safety Code Section 34179(j), on July 1, 2018, one Countywide Oversight Board (“Countywide OB”) was created. The Countywide OB consists of sev en members representing agencies in the County and it will continue to oversee and approve the wind down actions of the successor agencies for former redevelopment agencies. As such, all actions of the Successor Agency approved by the City Council will then be submitted to the Countywide OB for approval, and then to the State Department of Finance for final approval.

RECOGNIZED OBLIGATION PAYMENT SCHEDULE OUTSTANDING OBLIGATIONS The Recognized Obligation Payment Schedule for July 202 4 through June 202 5 (Exhibit “A”) lists one enforceable obligation of the Redevelopment Agency:

Loan Repayment to Traffic Impact Fund: $150,000
California Health and Safety Code Section 33445 authorized a redevelopment agency to enter into agreements with the host city to borrow money and accept financial assistance from the city for redevelopment projects located within the agency’s jurisdiction. Because newly formed agency funding was limited to a future, expected stream of tax increment, cities often loaned agencies both staff and 16 Item5.

funding to get redevelopment projects started. By Escondido Community Development Commission (“CDC”) Resolution 19 85-07, the Traffic Impact Fund loaned the Redevelopment Agency $200,000 for certain Nordahl Bridge improvements. Under Section 5 of Resolution No. CDC 85 -7, the Commission agreed to reimburse the City for the advance from whatever revenue the Commission i s entitled to and to pay interest at the rate of twelve percent (12%) per annum. On December 18, 2012, this Loan was recognized by the Department of Finance to be an enforceable obligation of the Successor Agency.

Listed in ROPS24-25 (Exhibit “A”) is a request for approval of a payment of $150,000. The $150,000 total payment will result in an ending loan balance of $841,890 including accrued interest, summarized in the table below:

FY2023/24 Ending Balance $885,616
ROPS24-25 Payment (150,000)
FY2024/25 Accrued Interest (12%) 106,274
FY2024/25 Ending Balance $841,890

RESOLUTIONS
a. Resolution No. 2023-149
b. Resolution No. 2023-149 – Exhibit “A” – ROPS 24-25
17 Item5.

RESOLUTION NO. 2023-149

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AS THE SUCCESSOR AGENCY

TO THE ESCONDIDO REDEVELOPMENT AGENCY ,

ADOPTING A RECOGNIZED SCHEDULE OF ENFORCEABLE
OBLIGATIONS FOR THE PERIOD OF JULY 20 24 THRU
JUNE 202 5 PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34177

WHEREAS, pursuant to authorizing Resolution No. 2012 -16, the City Council of the City of Escondido elected to serve as the Successor A gency and S uccessor Housing Agency to the Escondido Redevelopment Agency; and
WHEREAS, pursuant to Health and Safety Code Section 34177, successor agencies are required to make payments due for enforceable obligations and adopt a Recognized Obligation Payment Schedule (“ROPS”); and
WHEREAS, pursuant to Health and Safety Code Section 34177, a ROPS must be adopted that lists all of the enforceable obligations within the meaning of Health and Safety Code Section 34167(d) , and must thereafter be reviewed by other entities, updated, and published in a specific manner; and WHEREAS, it is the intention of the City Council of the City of Escondido as the Successor Agency to the Escondido Redevelopment Agency to adopt the ROPS so that the Successor Agency may continue to make payments due for enforceable obligations.

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

1. That the above recitations are true.
18 Item5.

2. That the City Council, as the Successor Agency to the Escondido Redevelopment Agency, hereby adopts the ROPS for the period of July 2024 to June 2025, which is attached hereto as Exhibit “A” and incorporated by this reference.
19 Item5.

Recognized Obligation Payment Schedule (ROPS 24-25) - Summary Filed for the July 1, 2024 through June 30, 2025 Period Successor Agency: Escondido
County: San Diego
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
24-25A Total
(July -
December)
24-25B Total
(January -
June)
ROPS 24-25
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ - $ - $ - B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ 150,000 $ - $ 150,000 F RPTTF 150,000 - 150,000
G Administrative RPTTF - - -
H Current Period Enforceable Obligations (A+E) $ 150,000 $ - $ 150,000 Certification of Oversight Board Chairman:

Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
Resolution No. 2023-149
Exhibit "A"

Page 1 of 4 ends

20 Item5.

Escondido
Recognized Obligation Payment Schedule (ROPS 24-25) - ROPS Detail July 1, 2024 through June 30, 2025

A B C D E F G H I J K O Q
Item
# Project Name Obligation Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project
Area
Total
Outstanding
Obligation
Retired
ROPS
24-25
Total
ROPS 24-25A (Jul
- Dec) 24-25A
Total Fund Sources
RPTTF
$885,616 $150,000 $150,000 $150,000
7 Loan Repayment to Traffic
Impact Fund
City/County Loan (Prior 06/28/
11), Other
08/15/1994 12/31/2035 City of Escondido Capital Improvement-Nordahl bridge improvements
Esc.

Redev.
885,616 N $150,000 150,000 $150,000
10 Employee Costs-Admin. Fee Admin Costs 07/01/2011 06/30/2021 Employees of City of Escondido
Administration Esc.

Redev.
- N $- - $-
Resolution No. 2023-149
Exhibit "A"

Page 2 of 4 ends

21 Item5.

Escondido
Recognized Obligation Payment Schedule (ROPS 24-25) - Report of Cash Balances July 1, 2021 through June 30, 2022
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.

A B C D E F G H
ROPS 21-22 Cash Balances
(07/01/21 - 06/30/22)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.

Non-Admin
and Admin

1 Beginning Available Cash Balance (Actual 07/01/21)
RPTTF amount should exclude "A" period distribution
amount.
3,256 263,695
2 Revenue/Income (Actual 06/30/22)
RPTTF amount should tie to the ROPS 21-22 total
distribution from the County Auditor-Controller
2,838,138
3 Expenditures for ROPS 21-22 Enforceable Obligations
(Actual 06/30/22)
3,256 51,561 2,838,138
4 Retention of Available Cash Balance (Actual 06/30/22) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
212,134 ROPS22-23: $150,000 ROPS23-24: $62,134
5 ROPS 21-22 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 21-22 PPA
form submitted to the CAC
No entry required
6 Ending Actual Available Cash Balance (06/30/22)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $- $- $-
Resolution No. 2023-149
Exhibit "A"

Page 3 of 4 ends

22 Item5.

Escondido
Recognized Obligation Payment Schedule (ROPS 24-25) - Notes July 1, 2024 through June 30, 2025
Item # Notes/Comments
7 10
Resolution No. 2023-149
Exhibit "A"

Page 4 of 4 ends

23 Item5.

STAFF REPORT

December 13, 2023
File Number 0480-70

SUBJECT
CALTRANS CLEAN CALIFORNIA LOCAL GRANT PROGRAM $3,503,000 FOR ESCONDIDO CREEK TRAIL

ROSE TO MIDWAY

DEPARTMENT
City Manager’s Office

RECOMMENDATION
Request the City Council adopt Resolution No. 2023-162, authorizing receipt of Clean California Local Grant Program funds for the Escondido Creek Trail Rose to Midway Project in the amount of $3,503,000, and authorizing execution of all grant-related agreements and forms.

Staff Recommendation: Approval (City Manager’s Office: Joanna Axelrod, Deputy City Manager) Presenter: Joanna Axelrod, Deputy City Manager

FISCAL ANALYSIS
The City of Escondido (“City”) was awarded $3,503,000 in Clean California Local Grant Program (“CCLGP”) funds from the California Department of Transportation (“Caltrans”). There is no matching requirement or impact to the General Fund.

PREVIOUS ACTION
On September 29, 2021, the City Council approved Resolution No 2021-146 authorizing the acceptance of Coronavirus State and Local Fiscal Recovery Funds established by the American Rescue Plan Act of 2021 in the amount of $38,808,509 amongst which $1 millio n was allocated to the Escondido Creek Trail Project.

On June 5, 2019, the City Council approved Resolution No. 2019 -87 authorizing the Director of Communications and Community Services or her designee to submit an application to the California Department of Parks and Recreation and execute related grant documents for $8.5 million in SPP funds for improvements to the Escondido Creek Trail.

On January 25, 2012, the City Council approved Resolution No. 2012 -11 accepting the final Escondido Creek Trail Master Plan Report and authorized staff to seek and acquire grant funding that will enable the City to continue revitalization of the Escondido Creek Trail. 24 Item6.

BACKGROUND
Starting in early 2010, residents brought forward a vision of the Escondido Creek Trail as a li near park which resulted in the following important planning documents: Revealing Escondido Creek Vision Plan and the Escondido Creek Trail Master Plan. Two top priorities that emerged were to complete the Missing Link bike path between Broadway and Centre City Parkway and to create safe mid-block crossings along the length of the Creek Trail.

In 2020, the City was awarded $8.5 million from the California Department of Parks & Recreation through the Prop 68 Parks & Water Bond Act of 2018 which aims to create new parks and recreation opportunities in underserved communities across California. The current Escondido Creek Trail Expansion and Renovation project w ill improve approximately 4.5 miles of the existing Escondido Creek Trail and add approximately 0.4 miles of new bicycle path. This project will create a double-sided trail on approximately

1.7 miles; on one side will be the existing Class I bicycle path, on the other will be a new DG trail.

The Clean California Local Grant Program, administered by the C alifornia Department of Transportation (Caltrans), provides funding to beautify and improve streets and roads, tribal lands, parks, pathways, and transit centers. In Cycle 2 (2023), Caltrans awarded approximately $100 million in funds to 42 projects across the State. The City submitted an application requesting $3,503,000 to fund the final section of the project, which will improve the Creek Trail between Rose St and Midway Dr. Improvements will include

0.5 miles of new trail on the north side of the Creek, enhancements to the existing trail on the south side of the Creek, and multiple amenities, as outlined in the Escondido Creek Trail Master Plan. Amenities in this section include fencing, lighting, signage, a water filling station, trash/recycling recepta cles, and drought-tolerant landscaping.

On October 9, 2023, the California Department of Transportation notified the City that the Escondido Creek Trail: Rose to Midway project had been selected to be funded at the full requested amount of $3,503,000. This funding is provided without local match requirements and is intended to cover 100% of direct costs necessary to complete the Creek Trail Project.

The City will execute a Restricted Grant Agreement in substantially similar form to the sample attached incorporated here at Attachment “2”.

RESOLUTIONS
a. Resolution No 2023-162

ATTACHMENTS
a. Attachment “1” – Budget Adjustment
b. Attachment “2” – Grant Agreement
25 Item6.

BUDGET ADJUSTMENT

REQUEST
Department: City Manager’s Office
For Finance Use Only
BA # ____________
Fiscal Year ________
Department Contact: Joanna Axelrod
City Council Meeting Date:
(attach staff report) December 13, 2023

EXPLANATION OF REQUEST
Caltrans Clean California Local Grant Program Award for the Escondido Creek Trail Rose to Midway.

BUDGET ADJUSTMENT INFORMATION
Project/Account Description Account Number
Amount of
Increase
Amount of
Decrease
Esc Creek Bike Path Improvement 609901-206 $3,503,000

APPROVALS

DEPARTMENT HEAD DATE FINANCE DATE
DocuSign Envelope ID: 5A770F54-8154-4018-81A7-7D53EB773836 11/20/2023
11/17/2023
Attachment "1"
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Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

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Clean California Local Grant Program (State)
Restricted Grant Agreement
This Restricted Grant Agreement (RGA), betw een the State of California acting by and through its Department of Transportation, referred to herein as CALTRANS, and the CITY OF ESCONDIDO, hereinafter referred to as AGENCY, will commence on September 15, 2023, or upon approval by CALTRANS, whichever occurs later. This RGA is of no effect unless approved by CALTRANS.

AGENCY shall not receive payment for work performed prior to approval of this RGA and before receipt of Notice to Proceed from CALTRANS. This RGA shall expire on December 31, 2026.

Recitals

1. Under thi
s RGA, CALTRANS intends to convey State restricted grant funds to AGENCY, pursuant to Budget Act Line Item 2660-130-0001, who will implement the project pursuant to the attached Approved Grant Application and Amendment(s) to Grant Application, Attachment III under the terms, covenants, and conditions of this RGA.

2. CALTRANS and AGENCY intend that only funds that are authorized as restricted grants will be subject to this RGA, and that no funds that should be the subject of a Joint Powers Agreement, Interagency Agreement, or other non-grant agreement shall be subject to this RGA.

Now, Therefore, based upon the terms, covenants, and conditions of this RGA, the parties agree as follows:

Section I
AGENCY Agrees:

To timely and satisfactorily complete all Project work described in Attachment III (“Project Work”) within the project budget and in accordance with the items of this RGA.

Section ll
CALTRANS Agrees:

That when conducting an audit of the costs claimed by AGENCY under the provisions of this RGA, to conduct the audit in accordance with applicable laws and regulations.

Section lII
It Is Mutually Agreed:

1. Under this RGA, CALTRANS will convey State grant restricted funds to AGENCY, pursuant to Budget Act Line Item 2660-130-0001, and AGENCY will use the funds to only conduct the scope of work identified in this agreement and authorized by Streets and Highway Code section 91.41. The funds subject to this RGA must be identified as available to a public entity that is responsible for implementing the scope of work authorized under the Clean California Local Grant Program in CALTRANS’ budget, and AGENCY represents and warrants that it is a public entity that is responsible for implementing the scope of work authorized under the Clean California Local Grant Program.

Attachment "2"
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Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

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2. Under this restricted grant, funds may be only used for the purposes set forth in this RGA, AGENCY Resolution (Attachment IV), Approved Grant Application and Amendment(s) to Grant Application (Attachment III), and the Grant Program Guidelines (Attachment I), and the funds may only be used for costs and expenses that are directly related to such purpose.

3. AGENCY shall perform all the duties and obligations described in the Escondido Creek Trail: Rose to Midway project, hereinafter “Project”, subject to the terms and conditions of this RGA and Approved Grant Application and Amendment(s) to Grant Application (Attachment III), which are attached hereto as Attachment III.

4. The resolution authorizing AGENCY to execute this RGA pertaining to the above-described Project is attached hereto as Attachment IV.

5. AGENCY agrees that it is not requesting an advance payment, and that it may not hereafter request an advance payment.

6. All services performed by AGENCY pursuant to this RGA shall be subject to and performed in accordance with California Streets and Highways Code §91.41 including, but not limited to, Government Code Section 14460(a)(1), as well as all applicable Federal, State, and Local laws, regulations, and ordinances, all applicable CALTRANS policies and procedures, and all applicable CALTRANS published manuals, including, but not limited to, the Grant Program Guidelines (Attachment I).

California Government Code Section 14460(a)(1) provides: “The department [CALTRANS], and external entities that receive state and federal transportation funds from the department, are spending those funds efficiently, effectively, economically, and in compliance with applicable state and Federal requirements. Those external entities include, but are not limited to, private for profit and nonprofit organizations, local transportation agencies, and other local agencies that receive transportation funds either through a contract with the department or through an agreement or grant administered by the department.”
Attachment "2"
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Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

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7. Project funding is as follows:

Fund Title* Fund Source Dollar Amount
Clean California Local Grant
Funds
State General Fund (0001)
Budget Item 2660-130-0001
State Program Code 20.30.010.900
FY 2023/24

$3,503,000.00
Cash Local Match Agency Provided $0.00
Value of Third-Party In-Kind
Contributions
Agency Provided $0.00
Total of Local Funds Agency Provided $0.00
Total of other fund sources
(not in-kind contributions)
Agency Provided $0.00
Total Participating Costs $3,503,000.00
Total Non-Participating Costs $0.00
Total Project Costs $3,503,000.00
Notes: *Means the amounts in this column only include participating costs.

No in-kind contributions may be made unless the amount and type of the contribution is identified above.

For Caltrans Use Only
I hereby Certify upon my own personal knowledge that budgeted funds are available for encumbrance. $3,503,000.00
Accounting Officer Printed
Name
Accounting Officer
Signature
Date Amount Certified

8. This RGA is exempt from the legal review and approval by the Department of General Services, pursuant to Legal Opinions of the Attorney General : 58 Ops. Cal. Atty. Gen. 586 (1975), 63 Ops.

Cal. Atty. Gen. 290 (1980), 74 Ops. Cal. Atty. Gen. 10 (1991), and 88 Ops. Cal. Atty. Gen. 56.

9. Notification of Parties
a. AGENCY’s Project Manager for Project is Joanna Axelrod, (760) 839-4871. b. CALTRANS’ District Grant Manager is Robin Owen, (619) 930-7203. “District Grant Manager” as used herein includes his/her designee.
c. All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when made in writing and received by the parties at their respective addresses:

Jennie Yee
11/7/2023
Attachment "2"
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Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

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City of Escondido
Attention: Joanna Axelrod, Deputy City Manager
Phone Number: (760) 839-4871
Email: [email protected]
City Hall, Second Floor
201 North Broadway
Escondido, California 92025

California Department of Transportation
District 11/Division of Planning and Local Assistance
Attention: Robin Owen, Clean California Manager
Phone Number: (619) 930-7203
Email: [email protected]
4050 Taylor Street, MS 244
San Diego, California 92110

10. Period of Performance
a. Reimbursable work under this RGA shal
l begin no earlier than on September 15, 2023,
following the written approval of CALTRANS and AGENCY’s receipt of the Notice to Proceed letter of this RGA by CALTRANS. All reimbursable work shall terminate no later than June 30, 2026. Project closeout and final invoicing to CALTRANS must be submitted no later than November 1, 2026. Work incurred after June 30, 2026 will not be reimbursed. Payment shall be forfeit for any and all invoicing submitted to CALTRANS after November 1, 2026.

Notwithstanding the foregoing, Caltrans will reimburse for actual close out costs incurred by AGENCY through November 1, 2026 (which, in total, shall not exceed 5% of the grant award). b. If requested by the CALTRANS District Grant Manager, AGENCY will attend a kickoff meeting with CALTRANS to be scheduled within one (1) week from receipt of Notice to Proceed sent by CALTRANS.

11. Changes in Terms/Amendments
This Agreement may only be amended or modified by mutual written agreement of the parties.

12. Cost Limitation
a. The maximum total amount granted and reimbursable to AGENCY pursuant to this RGA by CALTRANS shall not exceed $3,503,000.00.
b. It is agreed and understood that the CCLGP funds are limited to the amount granted.

CALTRANS will only reimburse the cost of services actually incurred in accordance with the provisions of this RGA and as authorized by the CALTRANS District Grant Manager at or below that fund limitation established herein.

13. Termination
a. CALTRANS reserves the right to terminate this RGA upon written notice to AGENCY at least 30 days in advance of the effective date of such termination in the event CALTRANS determines (at its sole discretion) that AGENCY failed to proceed with Project Work in accordance with the terms of this RGA. In the event of termination for convenience, CALTRANS will reimburse AGENCY for all allowable, authorized, and non-cancelled costs up to the date of termination.

AGENCY shall return any unused advance amounts which cannot be supported by eligible expenditure documentation.

Attachment "2"
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AMS ADV ID: 1124000094

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b. This RGA may be terminated by either party for any reason by giving written notice to the other party at least 30 days in advance of the effective date of such termination. In the event of termination for convenience, CALTRANS will reimburse AGENCY for all costs that are expressly allowable, pre-authorized in writing, and non-cancellable, up to the date of termination. c. AGENCY has 60 days after the Termination Date to submit accurate invoices to CALTRANS to make final allowable payments for Project costs in accordance with the terms of this RGA.

Failure to submit invoices within this period of time shall result in a waiver by AGENCY of its right to reimbursement of expended costs. Costs that are reimbursed and later determined to be ineligible for reimbursement shall be returned by AGENCY to CALTRANS.

14. Budget Contingency Clause
a. It is mutually agreed that if the US Congress or the State Legislature fail to appropriate or allocate funds during the current year and/or any subsequent years covered under this RGA do not appropriate sufficient funds for the program, this RGA shall be of no further force and effect.

In this event, CALTRANS shall have no liability to pay any funds whatsoever to AGENCY or to furnish any other considerations under this RGA and AGENCY shall not be obligated to perform any provisions of this RGA.
b. If funding for any fiscal year is reduced or deleted by US Congress or State Legislature for purposes of this program, CALTRANS shall have the option to either terminate this RGA with no liability occurring to CALTRANS, or offer an RGA Amendment to AGENCY to reflect reduced amount.

15. Payment and Invoicing
a. AGENCY, its contractors, subcontractors, and sub-recipients shall establish and maintain an accounting system and records that properly accumulate and segregate incurred Project costs and matching funds by line. The accounting system of AGENCY, its contractors, all subcontractors, and sub-recipients shall conform to Generally Accepted Accounting Principles (GAAP) and any standards specified by the source of funds, to enable the determination of incurred costs at interim points of completion, and to provide support for reimbursement payment vouchers or invoices.
b. The method of payment for this RGA will be based on the actual allowable costs that are incurred in accordance with the provisions of this RGA and in the performance of the Approved Grant Application and Amendment(s) to Grant Application (Attachment III) . CALTRANS will
reimburse AGENCY for expended actual allowable direct costs, and including, but not limited to, labor costs, travel, and contracted consultant services costs incurred by AGENCY in performance of the Project Work. Indirect costs are reimbursable only if the AGENCY has identified the estimated indirect cost rate in Attachment II and an approved Indirect Cost Allocation Plan or an Indirect Cost Rate Proposal as set forth in Section III–Cost Principles, Item 16d. The total cost shall not exceed the cost reimbursement limitation set forth in Section III–Cost Limitations, Item 11a. Actual costs shall not exceed the estimated wage rates, labor costs, travel, and other estimated costs and fees set forth in Attachment III without an amendment to this RGA, as agreed between CALTRANS and AGENCY. c. Reimbursement of AGENCY expenditures will be authorized only for those allowable costs actually incurred by AGENCY in accordance with the provisions of this RGA and in the performance of Project Work. AGENCY must not only have incurred the expenditures on or after the start date and the issuance of the Notice to Proceed letter for this RGA and before the Expiration Date but must have also paid for those costs to claim any reimbursement.

Attachment "2"
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AMS ADV ID: 1124000094

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d. The AGENCY indirect cost rate must be approved in writing by the California Department of Transportation Independent Office of Audits and Investigations or federal cognizant agency before any reimbursement payment is made by CALTRANS to AGENCY for such cost. e. Travel expenses and per diem rates are not to exceed the rate specified by the State of California Department of Human Resources for similar employees (i.e. non-represented employees) unless written verification is supplied that government hotel rates were not then commercially available to AGENCY, its subrecipients, contractors, and/or subcontractors, at the time and location required as specified in the California Department of Transportation's Travel Guide Exception Process at the following link: https://travelpocketguide.dot.ca.gov/.

Also see website for summary of travel reimbursement rules. f. AGENCY shall submit invoices to CALTRANS at least every six months, but no more frequently than monthly, in arrears upon completion of project tasks, milestone and/or deliverables in accordance with the Project Timeline in Attachment III to the satisfaction of CALTRANS District Grant Manager. Invoices shall reference this RGA Number and shall be signed and submitted to CALTRANS District Grant Managerhttps://dot.ca.gov/-/medi a/dot-media/programs/local- assistance/documents/lapm/ch05.pdf, as stated in Section III–Notification of Parties, Item 8c. g. Invoices shall be complete with all of the following sections in the invoice completed:
1) Section 1: Invoice
2) Section 2: Indirect Cost Calculation, if the AGENCY is seeking reimbursement for indirect costs
3) Section 3: Billing Summary
4) AGENCY shall submit a completed detailed contractor award package, including final cost estimates, to CALTRANS after the project has been awarded to the contractor. The award package shall be submitted to CALTRANS with the first invoice that the AGENCY is seeking reimbursement for the contractor for.
h. Incomplete or inaccurate invoices shall be returned to the AGENCY unapproved for correction.

Failure to submit invoices on a timely basis may be grounds for termination of this RGA for material breach per Section III–Termination, Item 12.
i. CALTRANS will reimburse AGENCY for all allowable Project costs at least every 6 months, but no more frequently than monthly, in arrears as promptly as CALTRANS fiscal procedures permit upon receipt of an itemized signed invoice.
j. The RGA Expiration Date refers to the last date for AGENCY to incur valid Project costs or credits and is the date this RGA expires. AGENCY has until November 1, 2026 to make final allowable payments to Project contractors or vendors, and submit the Project’s Final Report, as defined in Attachment I and a final invoice to CALTRANS for reimbursement for allowable Project costs. Any unexpended Project funds not invoiced by the 60th day will be reverted and will no longer be accessible to reimburse late Project invoices contractor. k. The final invoice will be paid upon submission by AGENCY to CALTRANS and acceptance by CALTRANS of the Final Delivery Report. Complete final delivery reports and invoices must be submitted to CALTRANS by November 1, 2026.

16. Local Match Funds
a. AGENCY shall contribute not less than a proportional cash amount toward the services described herein on a monthly or 6-month basis. Notwithstanding the foregoing, to the extent Attachment "2"
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that in-kind contributions are permitted and identified under this RGA, Section III–Project Funding, Item 6, the contributions may be counted as cash only when they are actually received by the AGENCY and confirmed by CALTRANS. Except where expressly allowed in writing herein, reimbursement of credits for local matching funds and in-kind contributions will be made or allowed only for work performed on and after the initial date of this Agreement and on or before June 30, 2026.
b. AGENCY agrees to contribute the statutorily required local contribution of matching funds if any is specified within this RGA or in any Attachment hereto, toward the actual cost of the services described in Attachment III. AGENCY shall contribute not less than its required match amount toward the services described herein. Local cash and in-kind match requirements can be found in the Grant Program Guidelines (Attachment I); but AGENCY must fully satisfy the local cash and in-kind match amount and percentage identified in Section III, Paragraph 7 with the final invoice.

17. Quarterly Progress Reporting
a. AGENCY shall submit written quarterly progress reports to the CALTRANS District Grant Manager to determine if AGENCY is performing to expectations, on schedule, within funding cost limitations, communicating interim findings, and to afford occasions for airing difficulties respecting special problems encountered so that remedies can be developed.

18. Cost Principles
a. AGENCY agrees to comply with Title 2, Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
b. AGENCY agrees, and will assure that its contractors, sub-recipients, in-kind contributors, and subcontractors will be obligated to agree, that (a) Contract Cost Principles and Procedures, 48 CFR, Federal Acquisition Regulations System, Chapter 1, Part 31, et seq., shall be used to determine the allowability of individual Project cost items and (b) all parties shall comply with Federal administrative procedures in accordance with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

Every sub-recipient receiving Project funds as a sub-recipient, contractor, or subcontractor under this RGA shall comply with Federal administrative procedures in accordance with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards to the extent applicable. c. Any Project costs for which AGENCY has received payment or credit that are determined by subsequent audit to be unallowable under 2 CFR, Part 200, and/or Part 48, Chapter 1, Part 31, are subject to repayment by AGENCY to CALTRANS. Should AGENCY fail to reimburse moneys due CALTRANS within 30 days of discovery or demand, or within such other period as may be agreed in writing between the parties hereto, CALTRANS is authorized to intercept and withhold future payments due AGENCY from CALTRANS or any third-party source, including, but not limited to, the State Treasurer, the State Controller, or any other fund source.
d. Prior to AGENCY seeking reimbursement of indirect costs, AGENCY must have identified estimated indirect cost rate in Attachment II, prepare and submit annually to CALTRANS for review and approval an indirect cost rate proposal and a central service cost allocation plan (if any) in accordance with 2 CFR, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and Chapter 5 of the Local Attachment "2"
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Assistance Procedures Manual which may be accessed at: https://dot.ca.gov/-/medi a/dot- media/programs/local-assistance/documents/lapm/ch05.pdf. e. AGENCY agrees and shall require that all its agreements with consultants and subrecipients contain provisions requiring adherence to this section in its entirety except for section c, above.

19. Americans with Disabilities Act
By signing this Agreement, AGENCY assures CALTRANS that in the course of performing Project Work, it will fully comply with the applicable provisions of the Americans with Disabilities Act (ADA) of 1990, as amended, which prohibits discrimination on the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the ADA (42 USC Section 12101 et seq.).

20. Iran Contracting Act and State of California Executive Order N-6-22 AGENCY must complete and submit to CALTRANS the Iran Contracting Act Certification certifying that AGENCY’S proposed contractor is not on the most current DGS list of Entities Prohibited from Contracting with Public Entities in California per the Iran Contracting Act, 2010 (https://www.dgs.ca.gov/PD/Resources/Page-Cont
ent/Procurement-Division-Resources-List-
Folder/List-of-Ineligible-Businesses), before the Agreem ent has been executed, unless the proposed contractor is exempted from the certification requirement by Public Contract Code Section 2205(c) or (d). If claiming an exemption, the proposed contractor shall provide written evidence that supports an exemption under Public Contract Code Section 2203(c) or (d) before execution of the Agreement. Additionally, and to the extent applicable, AGENCY shall adhere to State of California Executive Order N-6-22, issued on March 4, 2022, with regard to proposed contractor.

21. Indemnification
a. Nei
ther CALTRANS nor any officer or employee thereof is responsible for any injury, damage, or liability occurring by reason of anything done or omitted to be done by AGENCY, its officers, employees, agents, its contractors, its subrecipients, or its subcontractors under or in connection with any work, authority, or jurisdiction conferred upon AGENCY under this RGA.

It is understood and agreed that AGENCY shall fully defend, indemnify, and save harmless CALTRANS and all of CALTRANS’ officers and employees from all claims, suits, or actions of every name, kind, and description brought forth under, including, but not limited to, tortuous, contractual, likeness statutes under California Civil Code §§ 3344 and 3344.1, inverse condemnation, or other theories or assertions of liability occurring by reason of anything done or omitted to be done by AGENCY, its officers, employees, agents, contractors, subrecipients, or subcontractors under this RGA.
b. AGENCY agrees to fully defend, indemnify, and save harmless CALTRANS and all of its officers and employees from any and all claims, lawsuits, or legal actions, including reasonable attorneys’ fees and legal costs, relating to intellectual property claims arising from or related to the Project and/or any work procured under this RGA, including but not limited to claims based on (1) U.S. federal or state trademark infringement laws, (2) patent infringement laws (3) 17 U.S.C. §§ 101-810 (the Copyright Act of 1976, as modified), (4) 17 U.S.C. § 106A(a) (the Visual Artists Rights Act of 1990, “VARA”), (5) 17 U.S.C. § 113, (6) California Civil Code § 987 (the California Art Preservation Act), California Civil Code §989, or (7) any other rights arising under U.S. federal or state laws or under the laws of any other country that conveys rights and protections of the same nature as those conveyed under 17 U.S.C. §106A(a) and California Civil Code §987, including intellectual property claims arising from or Attachment "2"
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related to breach of contract, inverse condemnation, conversion, and/or taking of property.

22. Nondiscrimination Clause (2 CCR 11105 Clause b)
a. During the performance of this RGA, the AGENCY, its contractors, its subrecipients, and its subcontractors shall not deny the contract's benefits to any person on the basis of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status. AGENCY shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. b. AGENCY shall comply with the provisions of the Fair Employment and Housing Act (Gov. Code Sections 12900 et seq.), the regulations promulgated thereunder (California Code of Regulations, Title 2, Sections 11000 et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Gov. Code Sections 11135-11139.5), and the regulations or standards adopted by CALTRANS to implement such article. c. AGENCY shall permit access by representatives of the Department of Fair Employment and Housing and CALTRANS upon reasonable notice at any time during the normal business hours, but in no case less than 24 hours' notice, to such of its books, records, accounts, and all other sources of information and its facilities as said Department or CALTRANS shall require to ascertain compliance with this clause.
d. AGENCY and its contractors, its sub-recipients, and its subcontractors shall give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement.
e. AGENCY shall include the nondiscrimination and compliance provisions of this clause in all agreements with its sub-recipients, contractors, and subcontractors, and shall include a requirement in all agreements with all of same that each of them in turn include the nondiscrimination and compliance provisions of this clause in all contracts and subcontracts they enter into to perform work under this RGA.

23. Retention of Records/Audits
a. AGENCY, its contractors, subcontractors, and sub-recipients, agree to comply with Title 2, Code of Federal Regulations (CFR), Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
b. AGENCY, its contractors, subcontractors, and sub-recipients shall establish and maintain an accounting system and records that properly accumulate and segregate incurred Project costs and matching funds by line. The accounting system of AGENCY, its contractors, all subcontractors, and sub-recipients shall conform to Generally Accepted Accounting Principles (GAAP), enable the determination of incurred costs at interim points of completion, and provide support for reimbursement payment vouchers or invoices. All accounting records and other supporting papers of AGENCY, its contractors, subcontractors, and sub-recipients connected with Project performance under this RGA shall be maintained for a minimum of three (3) years from the date of final payment to AGENCY and shall be held open to inspection, copying, and audit by representatives of CALTRANS, the California State Auditor, and auditors representing Attachment "2"
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the federal government. Copies thereof will be furnished by AGENCY, its contractors, its subcontractors, and sub-recipients upon receipt of any request made by CALTRANS or its agents. In conducting an audit of the costs and match credits claimed under this RGA, CALTRANS will rely to the maximum extent possible on any prior audit of AGENCY pursuant to the provisions of State and AGENCY law. In the absence of such an audit, any acceptable audit work performed by AGENCY’s external and internal auditors may be relied upon and used by CALTRANS when planning and conducting additional audits. c. For the purpose of determining compliance with applicable State and AGENCY law in connection with the performance of AGENCY’s contracts with third parties pursuant to Government Code Section 8546.7, AGENCY, AGENCY’s sub-recipients, contractors, subcontractors, and CALTRANS, shall each maintain and make available for inspection all books, documents, papers, accounting records, and other evidence pertaining to the performance of such contracts, including, but not limited to, the costs of administering those various contracts. All of the above referenced parties shall make such materials available at their respective offices at all reasonable times during the entire Project period and for three (3) years from the date of final payment to AGENCY under this RGA. CALTRANS, the California State Auditor, or any duly authorized representative of CALTRANS or the United States Department of Transportation, shall each have access to any books, records, and documents that are pertinent to a Project for audits, examinations, excerpts, and transactions, and AGENCY shall furnish copies thereof if requested. d. AGENCY, its subrecipients, contractors, and subcontractors will permit access to all records of employment, employment advertisements, employment application forms, and other pertinent data and records by the State Fair Employment Practices and Housing Commission, or any other agency of the State of California designated by CALTRANS, for the purpose of any investigation to ascertain compliance with this RGA.
e. Additionally, all grants may be subject to a pre-award audit prior to execution of this RGA to ensure AGENCY has an adequate financial management system in place to accumulate and segregate reasonable, allowable, and allocable costs.
f. Any contract with a contractor, subcontractor, or sub-recipient entered into as a result of this RGA shall contain all the provisions of this article.

24. Adjudication of Facts in Disputes
a. Any dispute concerning a question of fact arising under this RGA that is not disposed of by agreement shall be decided by the CALTRANS Contract Officer, who may consider any written or verbal evidence submitted by AGENCY. The CALTRANS Contract Officer shall issue a written decision within 30 days of receipt of the dispute. If AGENCY rejects the decision of the CALTRANS Contract Officer, AGENCY can pursue any and all remedies authorized by law. Neither party waives any rights to pursue remedies authorized by law.
b. Neither the pendency of a dispute nor its consideration by CALTRANS Contract Officer will excuse AGENCY from full and timely performance in accordance with the terms of this RGA.

Attachment "2"
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25. INTENTIONALLY DELETED

26. Third-Party Contracts
a. AGENCY shall perform the work contemplated with resources available within its own organization and no portion of the work shall be contracted to a third party without prior written notification by the CALTRANS District Grant Manager unless expressly included (subrecipient identified) in Attachment III as Project Work. b. All State-government-funded procurements must be conducted using a fair and competitive procurement process. AGENCY may use its own procurement procedures as long as the procedures comply with the local AGENCY’s laws, rules, and ordinances governing procurement and all applicable provisions of State law, including, without limitation, the requirement that the AGENCY endeavor to obtain at least three (3) competitive bids for solicitation of goods, services, and consulting services (see Public Contract Code, Section 2000 et. seq.); a qualifications-based solicitation process, for which statements of qualifications are obtained from at least three (3) qualified firms for architecture and engineering services (see Government Code, Section 4525 et. seq. and Chapter 10 of the Caltrans Local Assistance Procedures Manual); and, the applicable provisions of the State Contracting Manual (SCM), Chapter 5, which are not inconsistent with this Item 26, Third- Party Contracts. The SCM can be found at the following link:
https://www.dgs.ca.gov/OLS/Resources/Page-Content
/Office-of-Legal-Services-Resources-
List-Folder/State-Contracting. Chapter 10 of the Caltrans Local Assistance Procedures Manual can be found at the following link: https://dot.ca.gov/programs/local- assistance/guidelines-and-procedures/local-assistance-procedures-manual-lapm. c. Any contract entered into as a result of this RGA shall contain all the provisions stipulated in this RGA to be applicable to AGENCY’s sub-recipients, contractors, and subcontractors.

Copies of all agreements with sub-recipients, contractors, and subcontractors, must be able to be provided upon request to the CALTRANS District Grant Manager. d. CALTRANS does not have a contractual relationship with the AGENCY’s subrecipients, contractors, or subcontractors, and the AGENCY shall be fully responsible for all work performed by its subrecipients, contractors, or subcontractors. e. Prior notification in writing by the CALTRANS District Grant Manager shall be required before AGENCY enters into any non-budgeted sub-agreement. AGENCY shall provide an evaluation of the necessity or desirability of incurring such costs. AGENCY shall retain all receipts for such purchases or services and shall submit them with invoices. f. Any contract entered into by AGENCY as a result of this RGA shall mandate that travel and per diem reimbursements and third-party contract reimbursements to subrecipients, contractors, and subcontractors, will be allowable as Project costs only after those costs are incurred and paid for by the subrecipients, contractors, and subcontractors. Travel expenses and per diem rates for subcontractors shall be reimbursed pursuant to Section III–Payment and Invoicing, Item 14b, above.

27. Drug-Free Workplace Certification
By signing this RGA, AGENCY hereby certifies under penalty of perjury under the laws of California that AGENCY will comply with the requirements of the Drug-Free Workplace Act of 1990 (Gov. Code Sections 8350 et seq.) and will provide a Drug-Free workplace by doing all of the following:

Attachment "2"
37 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 12 of 19 ends

a. Publish a statement notifying employees that unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited and specifying actions to be taken against employees for violations, as required by Government Code Section 8355(a). b. Establish a Drug-Free Awareness Program as required by Government Code Section 8355(a)(2) to inform employees about all of the following:
1) The dangers of drug abuse in the workplace.
2) The person's or organization's policy of maintaining a Drug-Free workplace. 3) Any available counseling, rehabilitation, and employee assistance programs. 4) Penalties that may be imposed upon employees for drug abuse violations. c. Provide, as required by Government Code Section 8355(a)(3), that every employee who works on the proposed contract or grant:
1) Will receive a copy of the company's Drug-Free policy statement. 2) Will agree to abide by the terms of the company's statement as a condition of employment on the contract or grant.
d. Failure to comply with these requirements may result in suspension of payments under this RGA or termination of this RGA or both, and AGENCY may be ineligible for the award of any future state contracts if CALTRANS determines that any of the following has occurred: (1) AGENCY has made a false certification or, (2) AGENCY violates the certification by failing to carry out the requirements as noted above.

28. Relationship of Parties
It is expressly understood that this agreement is executed by and between two (2) independent governmental entities and is not intended to, and shall not be construed to, create the relationship of agent, servant, employee, partnership, joint venture or association, or any other relationship whatsoever other than that of an independent party.

29. State-Owned Data
a. AGENCY agrees to comply with the following requirements to ensure the preservation, security, and integrity of State-owned data on portable computing devices and portable electronic storage media:
1) Encrypt all State-owned data stored on portable computing devices and portable electronic storage media using government-certified Advanced Encryption Standard (AES) cipher algorithm with a 256-bit or 128-bit encryption key to protect CALTRANS data stored on every sector of a hard drive, including temp files, cached data, hibernation files, and even unused disk space.
2) Data encryption shall use cryptographic technology that has been tested and approved against exacting standards, such as FIPS 140-2 Security Requirements for Cryptographic Modules.
3) Encrypt, as described above, all State-owned data transmitted from one computing device or storage medium to another.
4) Maintain confidentiality of all State-owned data by limiting data sharing to those individuals contracted to provide services on behalf of the State, and limit use of State information assets for State purposes only.

Attachment "2"
38 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 13 of 19 ends

5) Install and maintain current anti-virus software, security patches, and upgrades on all computing devices used during the course of the Agreement. 6) Notify the CALTRANS District Grant Manager immediately of any actual or attempted violations of security of State-owned data, including lost or stolen computing devices, files, or portable electronic storage media containing State-owned data. 7) Advise the owner of the State-owned data, the AGENCY Information Security Officer, and the AGENCY Chief Information Officer of vulnerabilities that may present a threat to the security of State-owned data and of specific means of protecting that State-owned data. b. AGENCY agrees to use the State-owned data only for State purposes under this Agreement. c. AGENCY agrees to not transfer State-owned data to any computing system, mobile device, or desktop computer without first establishing the specifications for information integrity and security as established for the original data file(s) (State Administrative Manual (SAM) Section 5335.1).

30. CALTRANS’ Use of “Before” and “After” Project Photographs a. AGENCY acknowledges it provided a “Before” photograph of the Project with the AGENCY’s application for the Clean California Local Grant Program. AGENCY acknowledges and agrees it must provide an “After” photograph of the Project as part of the close out reporting process.
b. AGENCY warrants it is the copyright owner of the “Before” and “After” Project photographs. c. Neither the “Before” nor “After” Project photographs shall include the faces of any individuals.
d. AGENCY grants to CALTRANS an irrevocable, perpetual, royalty-free, sublicensable, unlimited, worldwide license to prepare derivative works, make, publish, display, and distribute two-dimensional reproductions and/or copies, digitally and in print, of the “Before” and “After” Project photographs, or derivatives thereof, for non-commercial purposes or any State government purposes. This includes, but is not limited to, reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education, and exhibition catalogues or other similar publication. e. When applicable, AGENCY shall obtain and provide to CALTRANS any and all documentation CALTRANS reasonably determines is necessary or desirable to perfect the license described in this RGA to CALTRANS. This documentation shall be provided to CALTRANS within fifteen (15) days of written notice that this documentation is required.

31. Limited Grant of Rights to CALTRANS for Use of Educational Programming (“educational programming”) Created or Produced for Project and Visual Art Located Outside of State Right-of- Way (“Artwork”) Created or Produced for Project
a. Educational programming:
i. AGENCY shall obtain from any and all copyright owner(s) of educational programming a sublicensable, irrevocable, perpetual, royalty-free, unlimited, worldwide license to prepare derivative works, make, publish, display, and distribute two-dimensional reproductions and/or copies, digitally and in print, of the educational programming created or produced for Project under this RGA, or derivatives thereof, for non-commercial purposes or any State government purposes. This includes, but is not limited to, reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education, exhibition catalogues or other similar publication. AGENCY shall obtain any and all other intellectual property rights necessary to make this grant to CALTRANS as described in this RGA.

Attachment "2"
39 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 14 of 19 ends

ii. AGENCY grants to CALTRANS an irrevocable, perpetual, royalty-free, sublicensable, unlimited, worldwide license to prepare derivative works, make, publish, display, and distribute two-dimensional reproductions and/or copies, digitally and in print, of the educational programming created or produced for Project under this RGA, or derivatives thereof, for non-commercial purposes or any State government purposes. This includes, but is not limited to, reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education, and exhibition catalogues or other similar publication.
iii. When applicable, AGENCY shall obtain and provide to CALTRANS any and all documentation CALTRANS reasonably determines is necessary or desirable to perfect the license or sublicense described in this RGA to CALTRANS. This documentation shall be provided to CALTRANS within fifteen (15) days of written notice that this documentation is required.
iv. To the extent any logos, including trademarks or service marks, belonging to third parties and/or the AGENCY are used on educational programming created or produced for Project under this RGA, AGENCY agrees to obtain and grant all necessary rights for CALTRANS to use and allow agents of CALTRANS to use the logos in connection with use of the educational programming for non-commercial purposes or State government purposes. This includes but is not limited to reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education and exhibition catalogues or other similar publication. This documentation shall be provided to CALTRANS within fifteen (15) days of written notice that this documentation is required. b. Artwork:

i. AGENCY shall obtain from the artist(s), or any other copyright owner(s) of Artwork, a sublicensable, irrevocable, perpetual, royalty-free, unlimited, worldwide license to prepare derivative works, make, publish, display, and distribute two-dimensional reproductions and/or copies, digitally and in print, of Artwork created or produced for Project under this RGA, or derivatives thereof, for non-commercial purposes or any State government purposes. This includes, but is not limited to, reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education, and exhibition catalogues or other similar publication. AGENCY shall obtain any and all other intellectual property rights necessary to make this grant to CALTRANS as described in this RGA.
ii. AGENCY grants to CALTRANS an irrevocable, perpetual, royalty-free, sublicensable, unlimited, worldwide license to prepare derivative works, make, publish, display, and distribute two-dimensional reproductions and/or copies, digitally and in print, of Artwork created or produced for Project under this RGA, or derivatives thereof, for non-commercial purposes or any State government purposes. This includes, but is not limited to, reproductions used in brochures, media publicity, public outreach campaigns (including television and social media campaigns), education, and exhibition catalogues or other similar publication.
iii. AGENCY shall obtain and provide to CALTRANS any and all documentation CALTRANS reasonably determines is necessary or desirable to perfect the license or sublicense described in this RGA to CALTRANS. This documentation shall be provided to CALTRANS within fifteen (15) days of written notice that this documentation is required.

Attachment "2"
40 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 15 of 19 ends

32. Government Purpose Rights for Inventions
a. Inventions are any idea, methodologies, design, concept, technique, invention, discovery, improvement, or development regardless of patentability made solely by AGENCY or jointly with the AGENCY’s contractor, subcontractor and/or subrecipient during the term of this RGA and in performance of any work under this RGA, provided that either the conception or reduction to practice thereof occurs during the term of this RGA and in performance of work issued under this RGA.
b. CALTRANS will have Government Purpose Rights to any inventions created as a result of the Project. “Government Purpose Rights” are the unlimited, irrevocable, worldwide, perpetual, royalty-free, non- exclusive rights, and licenses to use, modify, reproduce, perform, release, display, create derivative works from, and disclose any said invention. “Government Purpose Rights” also include the right to release or disclose said invention(s) outside CALTRANS for any State government purpose and to authorize recipients to use, modify, reproduce, perform, release, display, create derivative works from, and disclose the invention(s) for any State government purpose. “Government Purpose Rights” do not include any rights to use, modify, reproduce, perform, release, display, create derivative works from, or disclose the invention(s) for any commercial purpose.

33. Additional Intellectual Property Provisions
a. To the extent any intellectual property is created or produced for Project under this RGA, and not covered in other provisions of this RGA, AGENCY agrees to take reasonable steps to ensure that CALTRANS has the rights necessary to allow for use of the intellectual property in a fashion substantially similar to other rights for non-commercial uses and State government purposes described in this RGA.
b. If additional uses are reasonably determined to be needed by CALTRANS for public outreach purposes, AGENCY will obtain rights and grant CALTRANS and its agents said additional rights for use of the “Before” and “After” Project photos, Artwork created or produced for Project under this RGA, and educational programming created or produced for Project under this RGA. The grant will be an irrevocable, non-exclusive, perpetual, royalty-free, sublicensable, unlimited, worldwide license.
c. When requested to so do by AGENCY, all reproductions and/or copies by CALTRANS of “Before” or “After” Project photographs, educational programming, and Artwork shall contain a credit to the Artist/ Copyright owner(s) and a copyright notice in substantially the following form:
© [Artist/Copyright owner’s name, date of publication]. AGENCY bears sole responsibility to promptly notify CALTRANS, in writing, about instances where such accreditation is requested and provide the Artist/ Copyright owner’s name and date of publication. CALTRANS will make reasonable efforts to affix the copyright notice in a timely manner. d. Required disclaimer language for educational programming and Artwork created or produced for Project under this RGA.
i. Educational programming: AGENCY must place a disclaimer statement in a conspicuous manner on the educational programming created or produced for Project under this RGA a disclaimer that states the content of the educational programming does not reflect the official views or policies of CALTRANS. The educational programming does not constitute a standard, specification, or regulation.
ii. Artwork: AGENCY must place a disclaimer statement in a conspicuous manner on or in close proximately to the Artwork created or produced for Project under this RGA a disclaimer statement that the contents of the artwork do not reflect the official views or policies of CALTRANS.

Attachment "2"
41 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 16 of 19 ends

e. Avoidance of Infringement: In performing work under this RGA, AGENCY and its employees agree to avoid designing or developing any items that infringe one or more patents or other intellectual property rights of any third party. If AGENCY or its employees becomes aware of any such possible infringement in the course of performing any work under this RGA, AGENCY or its employees shall immediately notify CALTRANS in writing. f. Contractors, Subcontractors, and Subrecipients: Through contract with its sub-recipients, contractors, and subcontractors, AGENCY shall affirmatively bind by contract all of its contractors, subcontractors, subrecipients, and service vendors (hereinafter “AGENCY’s Contractor/Subcontractor/Subrecipient”) providing services under this RGA to conform to the provisions of paragraphs 31-33 of this RGA. In performing services under this RGA, AGENCY’s Contractor/Subcontractor/Subrecipient shall agree to avoid designing or developing any items that infringe one (1) or more patents or other intellectual property rights of any third party. If AGENCY’s Contractor/Subcontractor/Subrecipient becomes aware of any such possible infringement in the course of performing any work under this RGA, AGENCY’s Contractor/Subcontractor/Subrecipient shall immediately notify the AGENCY in writing, and AGENCY will then immediately notify CALTRANS in writing.

34. Visual Art Located on California State Right-of-Way AGENCY agrees if Project involves visual art located on California State right-of-way, Project must be submitted and adhere to CALTRANS’ most current Transportation Art Proposal process, policies, guidelines, and requirements. Information regarding CALTRANS’ Transportation Art program can be found at https://dot.ca.gov/programs/design/lap-landsc ape-architecture-and-
community-livability/lap-liv-j-transportation-art. AGENCY bears sole responsibility for ensuring that any Project will be timely submitted through CALTRANS’ Transportation Art Proposal process, approved, and installed prior to any deadlines as required by this RGA. a. AGENCY ack nowledges that funds provided by CALTRANS under this RGA shall not be used for maintenance outside of the project time limits as provided in this RGA. b. AGENCY acknowledges that the CALTRANS’ Transportation Art Proposal process requires, among other things, CALTRANS ownership of any tangible visual final artwork, an unlimited, irrevocable copyright assignment to CALTRANS of the final artwork, and waiver of moral rights under California Civil Code § 987 (the California Art Preservation Act) and 17 U.S.C. § 106A(a) (the Visual Artists Rights Act of 1990, “VARA”) of the final artwork. c. AGENCY acknowledges that any submittal to the CALTRANS’ Transportation Art Proposal process includes restrictions on the type of work that can be located on California State right-of- way.

35. Assumption of Risk and Indemnification Regarding Exposure to Environmental Health Hazards In addition to, and not a limitation of, AGENCY’s indemnification obligations contained elsewhere in this Agreement, AGENCY hereby assumes all risks of the consequences of exposure of AGENCY’s employees, agents, Subcontractors, Subcontractors’ employees, and any other person, firm, or corporation furnishing or supplying work services, materials, or supplies in connection with the performance of this Agreement, to any and all environmental health hazards, local and otherwise, in connection with the performance of this Agreement. Such hazards include, but are not limited to, bodily injury and/or death resulting in whole or in part from exposure to infectious agents and/or pathogens of any type, kind, or origin. AGENCY also agrees to take all appropriate safety precautions to prevent any such exposure to AGENCY’s employees, agents, Subcontractors, Subcontractors’ employees, and any other person, firm or corporation furnishing or supplying work Attachment "2"
42 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 17 of 19 ends

services, materials, or supplies in connection with the performance of this Agreement. AGENCY also agrees to indemnify and hold harmless CALTRANS, the State of California, and each and all of their officers, agents, and employees, from any and all claims and/or losses accruing or resulting from such exposure. Except as provided by law, AGENCY also agrees that the provisions of this paragraph shall apply regardless of the existence or degree of negligence or fault on the part of CALTRANS, the State of California, and/or any of their officers, agents and/or employees.

36. Mandatory Organic Waste Recycling
It is understood and agreed that pursuant to Public Resources Code Sections 42649.8 et seq., if proposed contractor generates two (2) cubic yards or more of organic waste or commercial solid waste per week, AGENCY shall ensure that the proposed contractor arrange for organic waste or commercial waste recycling services that separate/source organic waste for organic waste recycling. Proposed contractor shall provide AGENCY proof of compliance, i.e., organic waste recycling services or commercial waste recycling services that separate/source organic waste recycling. AGENCY must be able to provide this proof upon request from CALTRANS District Grant Manager.

37. Project Close Out/Closeout Report
a. AGENCY will provide a final close out report to the CALTRANS District Grant Manager no later than November 1, 2026.

CALTRANS reserves the right to inspect the project location prior to approving the final invoice and closeout report.
b. CALTRANS reserves the right to withhold final payment to AGENCY pending receipt and approval of the final closeout report by the CALTRANS District Grant Manager. c. Payments shall be forfeit if invoices are submitted after November 1, 2026.

38. ADA Compliance
All entities that provide electronic or information technology or related services that will be posted online by CALTRANS must be in compliance with Government Code Sections 7405 and 11135 and the Web Content Accessibility Guidelines (WCAG) 2.0 or subsequent version, published by the Web Accessibility Initiative of the World Wide Web Consortium at a minimum Level AA success. All entities will respond to and resolve any complaints/deficiencies regarding accessibility brought to their attention.

39. Prevailing Wages and Labor Code Compliance
AGENCY shall comply with any and all applicable labor and prevailing wage requirements in Labor Code Sections 1720 through 1815 and implementing regulations for any public works or maintenance contracts and subcontracts executed for the AGENCY’s work on or for the Project.

40. In the event of any inconsistency between the provisions which constitute this RGA, the following order of precedence shall apply:

I. This Restricted Grant Agreement (as amended);
II. The CALTRANS Local Grant Program Guidelines;
III. Approved Indirect Cost Rate (if applicable);
IV. Approved Grant Application (as amended); and
V. AGENCY Resolution.

Attachment "2"
43 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 18 of 19 ends

41. Survival
AGENCY’s representations, the indemnification provisions in paragraph 21, intellectual property provisions in paragraphs 30, 31, 32, and 33, and all other provisions which by their inherent character establish ongoing obligations shall remain in full force and effect, regardless of any expiration and/or termination of this RGA.

42. Sanctions
No agreements under this RGA shall be made with individuals and/or entities that are determined to be a target of sanctions by the State of California while such sanctions are in effect.

Attachment "2"
44 Item6.

City of Escondido
Agreement Number: CCL-5081-029
AMS ADV ID: 1124000094

Page 19 of 19 ends

Section IV
Attachments:

The following attachments are incorporated into, and are made a part of this RGA by this reference and attached hereto.

I. Grant Program Guidelines
II. Approved Indirect Cost Rate (if applicable)
III. Approved Grant Application and Amendment(s) to Grant Application (if applicable) IV. AGENCY Resolution

In Witness Whereof, the parties hereto have executed this RGA on the day and year first herein above written:

STATE OF CALIFORNIA

DEPARTMENT OF TRANSPORTATION

CITY OF ESCONDIDO
By:

By:

Printed Name:

Gretchen Chavez
Printed Name:

Title:

Office Chief
Office of Innovative Programs
Division of Local Assistance
Title:

Date:

By:

Printed Name:

Title:

Date:

Attachment "2"
45 Item6.

RESOLUTION NO. 2023-162

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING RECEIPT OF

CLEAN CALIFORNIA LOCAL GRANT PROGRAM FUNDS

FOR THE ESCONDIDO CREEK TRAIL ROSE TO MIDWAY

PROJECT AND EXECUTION OF GRANT AGREEMENTS
AND FORMS IN THE AMOUNT OF $3,503,000

WHEREAS, the City Council of the City of Escondido is eligible to receive State funding for certain transportation related work through the California Department of Transportation; and WHEREAS, a Restricted Grant Agreement is needed to be executed with the California Department of Transportation before such funds can be claimed through the Clean California Local Grant Program; and
WHEREAS, the City of Escondido wishes to authorize execution of the Restricted Grant Agreement with the Department of Transportation to receive grant funds in the amount of $3,503,000 for completion of the Rose to Midway section of the Escondido Creek Trail Project.

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

1. That the above recitations are true.

2. That the City Council approves the acceptance of the grant funds award.

3. That the City Council appoints the Deputy City Manager, or their designee, as agent to conduct all negotiations and submit all documents to the California Department of Transportation including, but not limited to payment requests and forms, which may be necessary for the completion of the Escondido Creek Trail Project; and authorizing the May or, City Manager, or Deputy City Manager to 46 Item6.
execute all agreements (and amendments thereto) as permitted under Escondido Municipal Code § 10 -

96. 47
Item6.

STAFF REPORT

December 13, 2023
File Number 0600-10; A-3490-A, A-3490-B, A-3490-C, A-3490-D

SUBJECT
220 AND 240 S. BROADWAY LEASE AGREEMENTS WITH THE ESCONDIDO EDUCATION COMPACT

DEPARTMENT
Economic Development, Real Property

RECOMMENDATION
Request the City Council adopt Resolution No. 2023-173 authorizing the Mayor to execute, on behalf of the City, two Lease Agreements with the Escondido Education COMPACT for the properties lo cated at 220 and 240 S. Broadway.

Staff Recommendation: Approval (Economic Development: Jennifer Schoeneck, Director of Economic Development)
Presenter: Jennifer Schoeneck, Director of Economic Development

FISCAL ANALYSIS
Lease income in the amounts of $1,776.35 per month for the location at 220 S. Broadway, and $500 per month for the location at 240 S. Broadway for a term of 59 months.

PREVIOUS ACTION
On June 21, 2023, City Council unanimously approved Resolution 2023-76 entering into a Public Services Agreement and a Memorandum of Understanding with The Escondido Education COMPACT.

BACKGROUND
On June 21, 2023, The Escondido City Council entered into a contract and an MOU with The Escondido Education COMPACT (COMPACT) to provide community services related to public safety, namely Juvenile Diversion Program, Family Intervention Team, Girls Rock, Cannabis Abuse Program, Guiding Good Choices Program, Tattoo Removal Program, and the Alternatives to Detention Program. COMPACT currently operates offices and programs at 220 S. Broadway on a month-to-month hold over from an expired lease.

These leases are for a location that the organization is currently occupying at 220 S. Broadway and also for an additional building at 240 S. Broadway for expanded programming uses.

48 Item7.

ATTACHMENTS
a. Resolution No. 2023-173
b. Resolution No. 2023-173 Exhibit “A” - Escondido Education COMPACT 220 S. Broadway Lease Agreement
c. Resolution No. 2023-173 Exhibit “B” – Escondido Education COMPACT 240 S. Broadway Lease Agreement

49 Item7.

RESOLUTION NO. 2023-173

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE MAYOR TO

EXECUTE, ON BEHALF OF THE CITY, TWO LEASE

AGREEMENTS WITH THE ESCONDIDO EDUCATION
COMPACT FOR THE PROPERTIES LOCATED AT 220 AND
240 S BROADWAY

WHEREAS, the City of Escondido (“City”) recognizes that The Escondido Education COMPACT fulfills a valuable role in providing important services to at-risk youth and their families in Escondido that compliment and expand other existing City services; and WHEREAS, it is in the best interest of the City to retain intervention and prevention services for at-risk youth in the community; and
WHEREAS, the City of Escondido has an MOU with The Escondido Education COMPACT; and
WHEREAS, the City desires to enter into two lease agreements with The Escondido Education COMPACT.

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

1. That the above recitations are true.

2. That the City Council authorizes the Mayor to enter into two Lease Agreements, attached as Exhibit “A” and Exhibit “B”, with The Escondido Education COMPACT, in substantially similar forms to those attached to this Resolution and incorporated by this reference 50 Item7.

and subject to final approval as to form by the City Attorney.

51 Item7.
1 Lease Agreement

LEASE AGREEMENT
for
220 S. Broadway, Escondido, CA 92025
between
City of Escondido
and
The Escondido Education COMPACT
Effective Date: January 2, 2024
Term: 59 months
Resolution No. 2023-173
Exhibit "A"

Page 1 of 21 ends

52 Item7.

Lease Agreement
2 CAO: 12/20/2021

LEASE AGREEMENT

This LEASE AGREEMENT (this "Lease") is entered into this ______ day of ________________, 20___ (“ Effective Date”), by and between the City of Escondido, a California municipal corporation (the “City”), and The Escondido Education COMPACT, a California nonprofit public benefit corporation (“Lessee”) regarding the City’s rea l property located at 220 S. Broadway Escondido, CA 9202 5, and having assessor’s parcel number (APN) 223-091-02, as more particularly described in Exhibit A of this Lease, which is attached hereto and incorporated herein by this reference (“Premises”). (The City and Lessee each may be referred to herein as a “Party” and collectively as the “Parties.”)

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Term. The term of this Lease shall be for a period of 59 months, commencing on the Effective Date (“Term”).

2. Holdover. Occupancy of the Premises by Lessee after the expiration of the Term shall be construed as a month -to-month tenancy in which all other terms and conditions of this Lease shall continue in full force and effect, on a month-to-month basis. Lessee may not occupy the Premises after the expiration of the Term without the express consent of City. The City shall have the right to terminate the month-to-month tenancy without cause and for any reason by giving 30 days’ prior notice to Lessee.

3. Rent.

3.1 Base Rent. In consideration of the possession and use of the Premises , Lessee shall pay to the City rent in the amount of $1,776.35 per month (“Rent”), due and payable on or before the first day of each month, commencing on the Effective Date. Checks should be made payable to the City of Escondido and delivered to Attn: Accounts Receivable at 201 N. Broadway, Escondido, CA 92025.

3.2 Services Included in Rent. The monthly Rent, as described in Section 3.1 of this Lease, includes costs attributed to the following: (i) network and systems administration for up to 33 users, provided by the City, at a cost of $ 738.68 per month; (ii) phone system equipment and services provided by the City, at a cost of $316.67 per month and (iii) duplicating costs of $221 per month, not to exceed 45,000 copies per year. Any additional work station network services and equipment must be pre-approved by the City’s Directo r of Information Systems in writing and shall be charged to Lessee , as further detailed in Section 16 – Information Systems. The Lessee may choose to terminate additional services with 30 days notice.

3.2 Holdover Rent. Rent for any holdover as described in Paragraph 2 of this Lease shall be equal to the previous year’s Rent plus an additional 10% of the Base Rent amount stated in Paragraph 3.1 of this Lease.

3.3 Late Fee. Rent payments received after the fifth day of any month during the Term of this Lease will be considered late and Lessee shall be charged the Rent plus an additional 5% of the Base Rent amount stated in Paragraph 3.1 of this Lease.

Resolution No. 2023-173
Exhibit "A"

Page 2 of 21 ends

53 Item7.

Lease Agreement
3 CAO: 12/20/2021

4. Security Deposit. N/A

5. Utility Payments. Lessee agrees to provide and shall pay before delinquency all charges for utilities and services necessary for Lessee’s occupancy and use of the Premises, including but not limited to the following: gas, water, electricity, sewage charges, and trash.

6. Taxes, Assessments, and Fees.

6.1 The terms of this Lease may result in the creation of a possessory interest. If such a possessory interest is vested in Lessee, Lessee shall pay, prior to delinquency, all taxes and assessments that may be levied upon or assessed against the Premises and all taxes and assessments of every kind and nature whatsoever arising in any way from the use, occupancy , or possession of the Premises or assessed against the improvements situated thereon. The City shall not be required to pay any taxes or assessments whatsoever that relate to or may be assessed against this Lease or the Premises, including but not limited to any buildings, improvements, structures, machines, appliances, or other improvements of any nature whatsoever, or on any interest therein.

6.2 Lessee may, at its option, contest in good faith, and by an appropriate and timely legal proceeding, any such tax and assessment; provided, however, that Lessee shall indemnify and hold harmless the City from any loss or damage resulting from any such contest, and all expenses of the same (including, without limitation, all attorneys’ fees, court costs, and other costs) shall be paid solely by Lessee.

6.3 Lessee further agrees not to allow such taxes, ass essments, or fees to become a lien against the Premises or any improvement thereon. Nothing in this Lease shall be deemed to prevent or prohibit Lessee from contesting the validity or amount of any such tax, assessment, or fee in any manner authorized by law.

7. Use.

7.1 Permitted Uses. Lessee shall use and occupy the Premises exclusively for the following uses: office and business use, consistent with this Lease. Lessee’s use and occupancy of the Premises shall comply with all provisions and requirements contained in any permits or approvals issued by the City of Escondido or any other governmental agency relating to the Premises . Lessee shall not use or occupy, nor permit the use or occupancy of, the Premises other than as authorized in this Lease.

7.2 Prohibited Use. Lessee shall not use or allow the Premises to be used for any unlawful purpose, nor shall Lessee cause or maintain or permit any nuisance in, on , or about the Premises. Lessee shall not commit or suffer the commission of any waste in, on, or about the Premises.

Lessee shall not use or permit the use of the Premises for any purpose prohibited by this Lease.

7.3 Use Determination. In any case where Lessee is in doubt as to the propriety of any particular use, Lessee may request written determination of the City that such use is or is not permitted at the Premises.

7.4 Right to Inspect. The Premises shall at all times be open to inspection by all local, state, and federal governmental authoritie s. In the event the City determines that Lessee’s use of the Premises creates an unnecessary or unreasonable risk to the Premises or to public health, safety , or welfare, the City may require that Lessee cease using the Premises until such risk no longer exists.

Resolution No. 2023-173
Exhibit "A"

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7.5 Pets. No pets or livestock of any kind may be kept on the Premises throughout the Term without the prior written consent of the City’s Economic Development Director or designee.

8. Acceptance and Maintenance.

8.1 Lessee hereby acknowledges and agrees that Lessee has inspected the Premises and Lessee accepts said Premises "as is" and "where is." Lessee acknowledges that the City makes no representations as to the condition or suitability of the Premises or any improvements on the Premises.

8.2 Pursuant to the noticing requirements of California Civil Code section 1938, Lessee acknowledges that the Premises being leased has not undergone inspection by a Certified Access Specialist (CASp). Pursuant to California Civil Code section 1938(e), the City states as follows:
a. A CASp can inspect the Premises and determine whether the Premises complies with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the Premises, the City may not prohibit Lessee from obtaining a CASp inspection of the Premises, if requested by Lessee. Should Lessee request a CASp inspection, the Parties shall mutually agree on the arrangements for the time and manner of the CASp inspection. the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Premises. b. Lessee hereby expressly agrees that the CASp inspection fee and any repairs or modifications necessary to correct violations of construction -related accessibility standards that are noted in a CASp’s inspection report are the sole responsibility of Lessee.

8.3 Lessee agrees to maintain the Premises in good condition and in compliance with all applicable property maintenance and related laws. Lessee releases the City from any obligation to maintain any other portion of the Premises. Said release is part of the consideration for the rental of the Premises, and Lessee therefore waives all rights it may otherwise have under California Civil Code sections 1941 and 1942.

8.4 In the event Lessee fails to properly maintain the Premises as required by the City, the City shall notify Lessee in writing of the same. If Lessee fails to correct the identified insufficient maintenance within 30 days of the City’s notice, the City may either:
a. Treat Lessee’s failure as an Event of Default pursuant to Paragraph 11.2 of this Lease; or
b. Perform such maintenance as the City deems necessary, at Lessee’s sole cost, to keep the Premises in good condition and in compliance with all applicable property maintenance and related laws (“Necessary Maintenance”) . If the City performs Necessary Maintenance, costs resulting therefrom may include, but are not limited to, labor, material, and equipment . Upon completion of Necessary Maintenance by the City , the City shall provide Lessee with an invoice for all Necessary Maintenance costs. Lessee shall pay the City the full invoiced amount within 10 days of receipt of the invoice. Lessee’s failure to pay the full invoiced amount within 10 days of receipt of the invoice may be treated as an Event of Default pursuant to Paragraph 11.2 of this Lease.

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improvements to the Premises during the Term shall become a fixture to the realty and shall remain on and be surrendered with the Premises upon termination of this Lease. Applications for permits to conduct alternations to the property must be pre -approved in writing by the City’s Economic Development Director or designees.

10. Occupancy, Assignment, and Subletting.

10.1 Occupancy. Lessee shall take occupancy of the Premises within 30 days of the Effective Date of this Lease. The Premises shall only be occupied by Lessee, except with prior written consent of the City’s Economic Development Director or designee.

10.2 Assignment and Subletting. Lessee may not assign or sublease any interest in this Lease to any third party, at any time, including by means of a transfer of a controlling interest in Lessee, without prior written consent of the City’s Economic Development Director or designee.

11. Lease Termination.

11.1 The City may terminate this Lease at any time, at its sole discretion, by providing Lessee with 90 days’ written notice.

11.2 Event of Default . The following shall constitute an event of default (“Event of Default”) whereby the City may immediately terminate this lease upon written notice:
a. Lessee’s violation of any provision of this Lease , excluding a default in the timely payment of Rent or other payment required to be made by Lessee under this Lease as described in Paragraph 11.2(b) of this Lease; or
b. Lessee’s d efault in the timely payment of Rent or other payment required to be made by Lessee under this Lease , where such default is not cured within five business days after written notice of such default is given to Lessee; or
c. Lessee’s material breach of the Memorandum of Understanding entered into by and between Lessee and the City dated June 21, 2023 (“MOU”).

11.3 Vacation of Premises. Upon termination of this Lease for any reason, Lessee shall peaceably vacate and deliver the Premises to the City in the same condition as Les see found it upon Lessee’s acceptance of the Premises hereunder, excepting ordinary wear and tear and other conditions accepted in the City’s sole and absolute discretion.

11.4 Upon termination of this Lease, Lessee shall immediately:
a. Arrange and pay for the disconnection of all utilities and services as referenced in Paragraph 5 of this Lease;
b. Provide a written statement to the City’s Economic Development Director or designee. identifying Lessee’s new address for purpose of refunding monies, if any, due Lessee under this Lease; and
c. Deliver any keys for the Premises to the City’s Economic Development Director or designee. , the means of such delivery consisting of personal delivery or, if in-person delivery is not possible, by certified mail.

12. Notice. Unless otherwise provided herein, any statements, communications, or notices to be Resolution No. 2023-173
Exhibit "A"

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provided pursuant to this Lease shall be sent by personal delivery, certified or registered mail, or email to the addresses and to the attention of the persons set forth herein. Either Party shall provide the other Party with 10 days’ written notice of any change of person to be notified or change of address.

If to Lessee:

Escondido Education Compact
405 S. Midway Drive
Escondido, CA 92027
Attn: Patricia Huerta
760-839-4515
[email protected]
If to the City:

City of Escondido
201 N. Broadway
Escondido, CA 92025
Attn: Jennifer Schoeneck
Economic Development
Director
760-839-4587
[email protected]

13. Indemnification, Hold Harmless, Duty to Defend.

13.1 Lessee (including Lessee’s agents, employees, contractors, and subcontractors, if any) shall indemnify, hold harmless, and defend the City, its boards, commissions, departments, officials, officers, agents, employees, and volunteers (collectively, “Indemnified Parties”) from and against any and all claims, demands, actions, causes of action, proceedings (including but not limited to legal and administrative proceedings of any kind), suits, fines, penalties, judgments, orders, liens, levies, costs, expenses, liabilities, losses, damages, or injuries, in law or equity, including without limitation the payment of all consequential damages and attorney’s fees and other related litigation costs and expenses (collectively, “Claims”), and any attorney’s, consultant, or expert fees and City staff costs for investigating and responding to any Claims, and provide and pay all costs for a defense of any and all Claims against any of the Indemnified Parties, in connection with this Lease or any component thereof; the validity, applicability, or implementation of this Lease; the presence of Hazardous Materials as defined in this Lease; or Lessee’s use of the Premises.

13.2 Lessee shall further indemnify, p rotect, defend, and hold harmless the Indemnified Parties from and against any and all Claims caused by, arising under, or resulting from any violation, or claim of violation, of the San Diego Municipal Storm Water Permit (Order No. R9 -2013- 0001, as amended) of the California Regional Water Quality Control Board Region 9, San Diego, that the City might suffer, incur, or become subject to by reason of, occurring as a result of, or allegedly caused by, this Lease or Lessee’s use of the Premises.

13.3 All provisions within this Section 11 shall survive termination of this Lease.

14. Insurance.

14.1 Lessee shall procure and maintain, at its own cost, during the entire term of this Lease, insurance against claims for injuries to persons or damages to property that may arise from or in connection with this Lease, and the results of Lessee’s use of the Premises , by Lessee, its agents, representatives, employees, or volunteers. Insurance coverage shall be at least as broad as the following:
a. Commercial General Liability. Insurance Services Office (“ISO”) Form CG 00 01 covering Commercial General Liability on an “occurrence” basis, including products and completed operations, property damage, bodily injury, and personal & advertising injury, with limits no less than $2,000,000 per occurrence/$4,000,000 general aggregate.

Resolution No. 2023-173
Exhibit "A"

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b. Workers’ Compensation. Workers' Compensation as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limits of no less than $1,000,000 per accident for bodily injury or disease.
c. Property Insurance. Lessee shall procure and maintain p roperty insurance against all risks of loss to any Lessee improvements or betterments, at full replacement cost with no coinsurance penalty provision . Property insurance shall include not less than $1,000,000 Fire Legal liability on the Premises, including improvements and betterments owned by the City, and shall name the City as a loss payee. Lessee shall also provide fire insurance on all personal property contained within or on the Premises. The policy must be written on an “all risks” basis, excluding earthquake and flood. The contract shall insure for not less than 90% of the actual cash value of the personal property, and Lessee shall name the City as an additional insured. d. Interruption of Business Insurance. Lessee shall, at its sole cost and expense, maintain business interruption insurance by which the minimum monthly rent will be paid to the City for a period of up to one year if the Premises is destroyed or rendered inaccessible b y a risk insured against by a policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements.
e. If Lessee maintains broader coverage and/or higher limits than the minimums otherwise required by this Lease, the CITY requires and shall be entitled to the broader coverage and/or the higher limits maintained by Lessee.

14.2 Each insurance policy required by this Lease must be acceptable to the City Attorney and shall meet the following requirements:
a. Acceptability of Insurers. Insurance coverage must be provided by an insurer authorized to conduct business in the state of California with a current A.M. Best’s rating of no less than A-: FSC VII , or as approved by the City.
b. Additional Insured Status. Lessee’s Commercial General Liability policy must name the City (including its officials, officers, agents, employees, and volunteers) specifically as an additional insured under the policy on a separate endorsement page. The Commercial General Liability additional insured endorsement shall be at least as broad as ISO Form CG 20 10 11 85, or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33, or CG 20 38, and CG 20 37 if a later edition is used.
c. Primary Coverage. Lessee’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 with respect to the City, its officials, officers, agents, employees, and volunteers. Any insurance or self -insurance maintained by the City, its officials, officers, agents, employees, or volunteers shall be in excess of Lessee’s insurance and shall not contribute with it. d. Notice of Cancellation. Each insurance policy shall provide that coverage shall not be canceled, except with prior written notice to the City. e. Waiver of Subrogation. Lessee hereby grants to the City a waiver of any right to subrogation that any insurer of Lessee may acquire against the City by virtue of the payment of any loss under such insurance. Lessee agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this subsection shall apply regardless of whether or not the City has received a waiver of subrogation endorsement from the insurer. Any Workers’ Compensation policy required by Resolution No. 2023-173
Exhibit "A"

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this Lease shall be endorsed with a waiver of subrogation in favor of the city for all work performed by Lessee, its agents, representatives, employees and volunteers. f. Self-Insurance. Lessee may, with the City’s prior written consent, fulfill some or all of the insurance requirements contained in this Lease under a plan of self-insurance. Lessee shall only be permitted to utilize such self-insurance if, in the opinion of the City, Lessee’s (i) net worth and (ii) reserves for payment of claims of liability against Lessee are sufficient to adequately compensate for the lack of other insurance coverage required by this Lease. Lessee’s utilization of self-insurance shall not in any way limit the liabilities assumed by Lessee pursuant to this Lease. g. Self-Insured Retentions . Self -insured retentions must be declared to and approved by the City.

14.3 Verification of Coverage . At the time Lessee executes this Lease, Lessee shall provide the City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting the insurance coverage required by this Lease), which shall meet all requirements under this Lease. The City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by this Lease, at any time.

14.4 Special Risks or Circumstances. The City reserves the right, at any point during the term of this Lease, to modify the insurance requirements in this Lease, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

14.5 No Limitation of Obligations . The insurance requirements within this Lease, including the types and limits of insurance coverage Lessee must maintain, and any approval of such insurance by the City, are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by Lessee pursuant to this Lease, including but not limited to any provisions within this Lease concerning indemnification.

14.6 Failure to comply with any of the insurance requirements in this Lease, including but not limited to a lapse in any required insurance coverage during the term of this Lease, shall be a material breach of this Lease. In the event that Lessee fails to comp ly with any such insurance requirements in this Lease, in addition to any other remedies the City may have, the City may, at its sole option, (i) immediately terminate this Lease; or (ii) order Lessee to immediately vacate the Premises until Lessee demonstrates compliance with the insurance requirements in this Lease.

15. Memorandum of Lease Agreement. Promptly upon execution of this Lease, the Parties shall execute a Memorandum of Lease Agreement (“Memorandum”), in a form and content substantially similar to that contained in Exhibit B of this Lease. The Memorandum shall be filed with the San Diego County Recorder’s Office and recorded in the Official Records of San Diego County, as required by Government Code section 37393. Lessee shall pay for all recording costs and fees as determined by the San Diego County Recorder’s Office.

16. Information Systems.

16.1 City has connected the leased premises to the City’s telephone and computer network at City’s cost and provides technical support on equipment meeting City hardware standards.

Lessee will pay for n etwork and system administration for thirty-three users that are provided by the City, estimated to be $ 738.68 per month. Any additional users must be preapproved by the City’s Resolution No. 2023-173
Exhibit "A"

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Director of Inf ormation Systems and shall be charged to Lessee at cost. All hardware installed for Lessee’s benefit under this lease (switch, rack, phones) shall be the property of the City and will remain with the property upon lease termination. Lessee will provide its own computer equipment and will be responsible for the annual Microsoft Licensing fee, as well as costs attributed to network services and any costs for additional computers, as pre-approved by the City’s Director of Information Systems and as set forth in the Microsoft Enterprise contract that is current at the time of the upgrade. Any equipment that is on the City’s network must be maintained to the City’s hardware standards. Any equipment falling below this standard shall be upgraded or replaced at the sole cost of Lessee or otherwise will be eliminated from the City’s network and will no longer be maintained by City staff.

16.2 Lessee’s staff will be included on the City’s e-mail system. All Lessee volunteers and employees must adhere to the City’s computer use policy. Equipment not on the City’s network will be the sole and exclusive responsibility of Lessee. City e-mail support will be provided during the first three years of the Term and will terminate thereafter.

16.3 Voice Over Internet Phones (VOIP) will be provided to Lessee for 33 users.

Lessee will pay the monthly telephone fees of $ 316.67 per month. Any additional required phones will trigger an increase to the monthly fee.

16.4 City has provided a Kyocera copy machine for Lessee’s use. The copier will be serviced and maintained by the City, however Lessee will provide the paper and Lessee will be charged for duplicating costs, estimated to be $221.00 per month, based on 45,000 c opies per year. The charge for duplicating costs will be separate and apart from the monthly rent payment described above in Section

3.2. City technical support will be provided during the first year of the Term and will terminate thereafter.

17. Miscellaneous.

17.1 Provisions Cumulative. All provisions contained herein are cumulative and in addition to and not in limitation of any other rights or remedies available to the City.

17.2 Merger Clause . This Lease and its attachments, if any, constit ute the entire understanding of the Parties, and there are no other terms or conditions, written or oral, controlling this matter. In the event of any conflict between the provisions of this Lease and any attachments, the provisions of this Lease shall prevail.

17.3 Anti-Waiver Clause. None of the provisions contained herein shall be waived because of the City’s previous failure to insist upon strict performance, nor shall any provision be waived because the City has waived any other provision, in whole or in part.

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

17.5 Choice of Law . This Lease shall be governed by the laws of the State of California. Venue for any action arising from this Lease, including but not limited to matters concerning validity, construction, performance , or enforcement shall be exclusively in the state or federal courts located in San Diego County, California.

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of this Lease and supersedes and replaces all prior negotiations, understandings, or proposed agreements, written or oral, except as otherwise provided herein. Each of the Parties hereto acknowledges that no other Party, nor the agents nor the attorneys for any Party, has made any promise, representation , or warranty whatsoever, express or implied, not contained herein, to induce the execution of this Lease and acknowledges that this Lease has not been executed in reliance upon any promise, representation, or warranty not contained herein. This Lease shall supersede any leases or rental agreements heretofore made or issued for the Premises between the City and Lessee.

17.7 Amendment. This Lease may not be amended except in a writing signed by all of the Parties hereto, and then only in the specific instance and for the specific purpose given.

17.8 Independent Investigation. The Parties acknowledge that they have conducted an independent investigation of the facts concerning the subject matter of this Lease. The Parties agree that the factual recitals are correct and expressly assume the risk that the true facts concerning the foregoing may differ from those currently understood by them.

17.9 Advice of Counsel. The Parties hereby acknowledge that they have executed this Lease after having the opportunity to consult with, and receive the advice of, their own counsel.

17.10 Capacity. Each individual signing this Lease represents and warrants that he or she has been authorized to do so by proper action of the Party on whose behalf he or she has signed.

17.11 Attorney’s Fees. In any action to enforce the terms of this Lease, the Parties agree that the prevailing party shall be entitled to its reasonable attorney’s fees and all costs, fees, and expenses, including the fees of expert witnesses and consultants, whether or not such costs, fees, and expenses are recoverable or allowed as costs under California Code of Civil Procedure section 1033.5. In addition to the foregoing award of attorney’s fees and costs, the prevailing party shall be entitled to its attorney’s fees and costs incurred in any post -judgment proceedings to collect or enforce any judgment. This provision is separate and shall survive the merger of this provision into any judgment on this Lease.

17.12 Counterparts. This Lease may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

Delivery of an executed signature page of this Lease by electronic means, including an attachment to an email, shall be effective as delivery of an executed original.

17.13 Compliance with Federal, State, and Local Laws . Lessee acknowledges, understands, and agrees that i t is the duty of Lessee , while operating under this Lease , to comply with all federal, state, and local laws, and to indemnify the City from any violation of any such law. Failure to comply with a provision of federal , state, or local law shall constitute an Event of Default and is grounds for the City’s immediate termination of this Lease.

17.14 Non-Discrimination. Lessee understands, acknowl edges, and agrees that this Lease is made and accepted upon and subject to the condition that there shall be no discrimination against any person or group of persons on account of race, color, religion, sex, sexual orientation, gender identity or expression, national origin, age, disability, or an individual’s status in any group or class protected by applicable federal, state, or local law s, in the use, occupancy, tenure, or enjoyment of the Premises.

Lessee shall not establish or permit any such practice of discrimination with reference to the treatment, selection, location, number, or occupancy of customers, tenants, or vendees on the Premises.

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of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste, toxic substances, pollutant or contaminant, imminently hazardous chemical substance or mixture, hazardous air pollutant, toxic pollutant, or words of similar import under any local, state, or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Premises, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq. (CERCLA); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801 et seq.; the Federal Wat er Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. ( RCRA), that requires special handling in collection, storage, treatment, and/or disposal (“Hazardous Materials”). Lessee also hereby covenants and agrees that if at any time it is determined there are Hazardous Materials or contaminated soils located on the Premises, Lessee shall immediately notify the City. Within 30 days of notice to the City, Lessee shall c ommence all necessary action, at Lessee's sole cost and expense, to ensure the Hazardous Materials or contaminated soil are removed from the Premises and shall otherwise ensure swift compliance with all applicable federal, state, and local laws and other environmental requirements.

17.16 Special Provisions. Lessee hereby acknowledges that Lessee waives all rights to any form of relocation assistance provided for by local, state, or federal law to which Lessee may be entitled by reason of this Lease.

17.17 Effective Date. Unless a different date is provided in this Lease, the effective date of this Lease shall be the latest date of execution set forth by the names of the signatories below.

17.18 Audited annual Financial Report. Pursuant to Section 5 of the MOU, Lessee will provide to the City an audited annual Financial Report, including a Profit/Loss Statement, current Business License, proof of 501(c)(3) standing, and proof of insurance. Such reports will be provided to the City within 90 days of the completion of Lessee’s fiscal year. The City shall have 30 days after receipt of the Financial Report to either request additional information or deem the Financial Report complete.

(SIGNATURE PAGE FOLLOWS)

Resolution No. 2023-173
Exhibit "A"

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IN WITNESS WHEREOF, the P arties below are authorized to act on behalf of their organizations, and have executed this Lease as of the Effective Date.

CITY OF ESCONDIDO

Date: __________________ ________________________________________ Dane White, Mayor

THE ESCONDIDO EDUCATION COMPACT

Date: __________________ __________________________________________ Johnnie Landreth, Board Chairperson

(ABOVE SIGNATURES MUST BE NOTARIZED; ACKNOWLEDGMENT PAGES FOLLOW)

APPROVED AS TO FORM:

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

BY: ______________________________________

Resolution No. 2023-173
Exhibit "A"

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ACKNOWLEDGMENT

STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me, ____________________________ __, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she /they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

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

Resolution No. 2023-173
Exhibit "A"

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ACKNOWLEDGMENT

STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me, ______________________________, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

Lessee

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

Resolution No. 2023-173
Exhibit "A"

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Exhibit A

Legal Description of Premises

That certain real property in the County of San Diego, State of California, described as follows:

Lots “C”, “D” and “E” of Williams Subdivision of Lots 15 and 16, in Block 83 of the City of Escondido, County of San Diego, State of California, according to the Map thereof No. 1289, filed in the Office of the County Recorder of San Diego County, September 27, 1910.

Depiction of Premises

Resolution No. 2023-173
Exhibit "A"

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Exhibit B

Memorandum of Lease Agreement

Resolution No. 2023-173
Exhibit "A"

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Memorandum of Lease Agreement
1 EXEMPT FROM FEES pursuant to
Gov’t Code §§ 6103, 27383, and 27388.1
(filing requested/executed by municipality)

RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:

Attn: Director of Economic Development
City of Escondido
201 North Broadway
Escondido, California 92025-2798

This Space for Recorder’s Use Only
APN [232-091-28-00]
Escondido Document No. [M-18-23-]

MEMORANDUM OF LEASE AGREEMENT

This Memorandum of Lease Agreement (“Memorandum”) is dated ________ ____, 20___, and is made between the City of Escondido, a California municipal corporation ( the “City”) and The Escondido Education COMPACT, a California nonprofit public benefit corporation ] (“Lessee”), concerning the City’s real property located at 220 S. Broadway, Escondido, CA 92025], and having assessor’s parcel number (APN) 2330910200, as more particularly described in Exhibit A of this Memorandum, which is attached hereto and incorporated herein by this reference (“Premises”). (The City and Lessee each may be referred to herein as a “Party” and collectively as the “Parties.”)

For good and valuable consideration, the City has leased the Premises to Lessee subject to the terms and conditions contained within that certain Lease Agreement executed by the Parties dated December 13, 2023 and incorporated herein by this reference (“Lease”), including without limitation provisions prohibiting assignment, subleasing, and encumbering any interest in the Lease without the prior written consent of the City, all as more specifically set forth in the Lease.

The term of the Lease is for 59 months, commencing on January 2, 2024 (“Effective Date”) and ending on November 6, 2029.

In the event that the Lease has been terminated, the City shall have the unilateral right to record a Termination of this Memorandum which shall have the effect of terminating this Memorandum when recorded in the public record.

This Memorandum is not a complete summary of the Lease. Provisions in this Memorandum shall not be us ed in int erpreting the Lease ’s provisions , and i n the event of conflict between this Memorandum and the Lease, the Lease shall control.

This Memorandum may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties below are authorized to act on behalf of their organizations, Resolution No. 2023-173
Exhibit "A"

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Memorandum of Lease Agreement
2 and have executed this Memorandum as of the Effective Date.

CITY OF ESCONDIDO

Date: __________________ ________________________________________ Dane White, Mayor

THE ESCONDIDO EDUCATION COMPACT

Date: __________________ __________________________________________ Patricia Huerta, Executive Director

(ABOVE SIGNATURES MUST BE NOTARIZED; ACKNOWLEDGMENT PAGES FOLLOW)

APPROVED AS TO FORM:

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

BY: ______________________________________

Resolution No. 2023-173
Exhibit "A"

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Memorandum of Lease Agreement
3 ACKNOWLEDGMENT

STATE OF CALIFORNIA ]

COUNTY OF ______________________ ]

On ___________________________________, before me,
_______________________________________________, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), o r the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

City of Escondido

Resolution No. 2023-173
Exhibit "A"

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Memorandum of Lease Agreement
4 ACKNOWLEDGMENT

STATE OF CALIFORNIA ]

COUNTY OF ______________________ ]

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

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

The Escondido Education COMPACT

Resolution No. 2023-173
Exhibit "A"

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Memorandum of Lease Agreement
5 Exhibit A

Legal Description of Premises

That certain real property in the County of San Diego, State of California, described as follows:

Legal Description of Premises

That certain real property in the County of San Diego, State of California, described as follows:

Resolution No. 2023-173
Exhibit "A"

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1 Lease Agreement

LEASE AGREEMENT
for
240 S. Broadway, Escondido, CA 92025
between
City of Escondido
and
The Escondido Education COMPACT

Effective Date: January 2, 2023

Term: 59 months
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LEASE AGREEMENT

This LEASE AGREEMENT (this "Lease") is entered into this ______ day of ________________, 20___ (“ Effective Date”), by and between the City of Escondido, a California municipal corporation (the “City”), and The Escondido Education COMPACT, a California nonprofit public benefit corporation (“Lessee”) regarding the City’s rea l property located at 240 S. Broadway Escondido, CA 9202 5, and having assessor’s parcel number (APN) 223-091-02, as more particularly described in Exhibit A of this Lease, which is attached hereto and incorporated herein by this reference (“Premises”). (The City and Lessee each may be referred to herein as a “Party” and collectively as the “Parties.”)

AGREEMENT

1. Term. The term of this Lease shall be for a period of 59 months, commencing on the Effective Date (“Term”).

3. Rent.

3.1 Base Rent. In consideration of the possession and use of the Premises , Lessee shall pay to the City rent in the amount of $500 per month (“Rent”), due and payable on or before the first day of each month, commencing on the Effective Date. Checks should be made payable to the City of Escondido and delivered to Attn: Accounts Receivable at 201 N. Broadway, Escondido, CA 92025.

3.2 Services Included in Rent. No additional services included.

4. Security Deposit. N/A

6. Taxes, Assessments, and Fees.

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6.3 Lessee further agrees not to allow such taxes, assessments, or fees to become a lien against the Premises or any improvement thereon. Nothing in this Lease shall be deemed to prevent or prohibit Lessee from contesting the validity or amount of any such tax, assessment, or fee in any manner authorized by law.

7. Use.

Lessee shall not use or permit the use of the Premises for any purpose prohibited by this Lease.

7.4 Right to Inspect. The Premises shall at all times be open to inspection by all local, state, and federal governmental authorities. In the event the City determines that Lessee’s use of the Premises creates an unnecessary or unreasonable risk to the Premises or to public health, safety , or welfare, the City may require that Lessee cease using the Premises until such risk no longer exists.

7.5 Pets. No pets or livestock of any kind may be kept on th e Premises throughout the Term without the prior written consent of the City’s Economic Development Director or designee.

8. Acceptance and Maintenance.

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8.2 Pursuant to the noticin g requirements of California Civil Code section 1938, Lessee acknowledges that the Premises being leased has not undergone inspection by a Certified Access Specialist (CASp). Pursuant to California Civil Code section 1938(e), the City states as follows:
a. A CASp can inspect the Premises and determine whether the Premises complies with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the Premises, the City may not prohibit Lessee from obtaining a CASp inspection of the Premises, if requested by Lessee. Should Lessee request a CASp inspection, the Parties shall mutually agree on the arrangements for the time and manner of the CASp inspection. the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Premises. b. Lessee h ereby expressly agrees that the CASp inspection fee and any repairs or modifications necessary to correct violations of construction -related accessibility standards that are noted in a CASp’s inspection report are the sole responsibility of Lessee.

9. Alterations. Lessee shall not paint, alter, cut, add to, or otherwise change the appearance, structure, or condition of the Premises without the prior written consent of the City’s Economic Development Director or designee and only after obtaining all applicable permits and approvals. Any improvements to the Premises during the Term shall become a fixture to the realty and shall remain on and be surrendered with the Premises upon termination of this Lease. Applications for permits to conduct alternations to the property must be pre -approved in writing by the City’s Economic Development Director or designees.

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10. Occupancy, Assignment, and Subletting.

11. Lease Termination.

11.1 The City may terminate this Lease at any time, at its sole discretion, by providing Lessee with 90 days’ written notice.

11.3 Vacation of Premises. Upon termination of this Lease for any reason, Lessee shall peaceably vacate and deliver the Premises to the City in the same condition as Lessee found it upon Lessee’s acceptance of the Premises hereunder, excepting ordinary wear and tear and other conditions accepted in the City’s sole and absolute discretion.

12. Notice. Unless otherwise provided herein, any statements, communications, or notices to be provided pursuant to this Lease shall be sent by personal delivery, certified or registered mail, or email to the addresses and to the attention of the persons set forth herein. Either Party shall provide the other Party with 10 days’ written notice of any change of person to be notified or change of address.

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If to Lessee:

Escondido Education Compact
405 S. Midway Drive
Escondido, CA 92027
Attn: Patricia Huerta
760-839-4515
[email protected]
If to the City:

City of Escondido
201 N. Broadway
Escondido, CA 92025
Attn: Jennifer Schoeneck
Economic Development
Director
760-839-4587
[email protected]

13. Indemnification, Hold Harmless, Duty to Defend.

13.3 All provisions within this Section 11 shall survive termination of this Lease.

14. Insurance.

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c. Property Insurance. Lessee shall procure and maintain p roperty insurance against all risks of loss to any Lessee improvements or betterments , at full replacement cost with no coinsurance penalty provision . Property insurance shall include not less than $1,000,000 Fire Legal liability on the Premises, including improvements and betterments owned by the City, and shall name the City as a loss p ayee. Lessee shall also provide fire insurance on all personal property contained within or on the Premises. The policy must be written on an “all risks” basis, excluding earthquake and flood. The contract shall insure for not less than 90% of the actual cash value of the personal property, and Lessee shall name the City as an additional insured. d. Interruption of Business Insurance. Lessee shall, at its sole cost and expense, maintain business interruption insurance by which the minimum monthly rent will be paid to the City for a period of up to one year if the Premises is destroyed or rendered inaccessible by a risk insured against by a policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements.
e. If Lessee maintains broader coverage and/or higher limits than the minimums otherwise required by this Lease, the CITY requires and shall be entitled to the broader coverage and/or the higher limits maintained by Lessee.

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only be permitted to utilize such self-insurance if, in the opinion of the City, Lessee’s (i) net worth and (ii) reserves for payment of claims of liability against Lessee are sufficient to adequately compensate for the lack of other insurance coverage required by this Lease. Lessee’s utilization of self-insurance shall not in any way limit the liabilities assumed by Lessee pursuant to this Lease. g. Self-Insured Retentions . Self -insured retentions must be declared to and approved by the City.

14.6 Failure to comply with any of the insurance requirements in this Lease, including but not limited to a lapse in any required insurance coverage during the term of this Lease, shall be a material breach of this Lease. In the event that Lessee fails to comply with any such insurance requirements in this Lease, in addition to any other remedies the City may have, the City may, at its sole option, (i) immediately terminate this Lease; or (ii) order Lessee to immediately vacate the Premises until Lessee demonstrates compliance with the insurance requirements in this Lease.

16. Information Systems.

16.1 No City Information System support or services will be provided to this location.

Lessee will be responsible for internet, computer and phone service.

17. Miscellaneous.

17.1 Provisions Cumulative. All provisions contained herein are cumulative and in addition to and not in limitation of any other rights or remedies available to the City.

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17.6 Entire Lease. This Lease, together with its attachments or other documen ts, if any, described or incorporated herein, contains the entire Lease and understanding concerning the subject of this Lease and supersedes and replaces all prior negotiations, understandings, or proposed agreements, written or oral, except as otherwise provided herein. Each of the Parties hereto acknowledges that no other Party, nor the agents nor the attorneys for any Party, has made any promise, representation , or warranty whatsoever, express or implied, not contained herein, to induce the execution of this Lease and acknowledges that this Lease has not been executed in reliance upon any promise, representation, or warranty not contained herein. This Lease shall supersede any leases or rental agreements heretofore made or issued for the Premises between the City and Lessee.

17.7 Amendment. This Lease may not be amended except in a writing signed by all of the Parties hereto, and then only in the specific instance and for the specific purpose given.

17.9 Advice of Counsel. The Parties hereby acknowledge that they have executed this Lease after having the opportunity to consult with, and receive the advice of, their own counsel.

17.10 Capacity. Each individual signing this Lease represents and warrants that he or she has been authorized to do so by proper action of the Party on whose behalf he or she has signed.

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17.12 Counterparts. This Lease may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

Delivery of an executed signature page of this Lease by electronic means, including an attachment to an email, shall be effective as delivery of an executed original.

Lessee shall not establish or permit any such practice of discrimination with reference to the treatment, selection, location, number, or occupancy of customers, tenants, or vendees on the Premises.

17.15 Hazardous Materials or Contaminated Soil . Lessee shall not place or permit to be placed any chemical, material, or substance now or hereafter defined as or included in the definition of hazardous substances, hazardous wastes, hazardous materials, extremely hazardous waste, restricted hazardous waste, toxic substances, pollutant or contaminant, imminently hazardous chemical substance or mixture, hazardous air pollutant, toxic pollutant, or words of similar import under any local, state, or federal law or under the regulations adopted or publications promulgated pursuant thereto applicable to the Premises, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601 et seq. (CERCLA); the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1801 et seq.; the Federal Wat er Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq.; and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et seq. ( RCRA), that requires special handling in collection, storage, treatment, and/or disposal (“Hazardous Materials”). Lessee also hereby covenants and agrees that if at any time it is determined there are Hazardous Materials or contaminated soils located on the Premises, Lessee shall immediately notify the City. Within 30 days of notice to the City, Lessee shall c ommence all necessary action, at Lessee's sole cost and expense, to ensure the Hazardous Materials or contaminated soil are removed from the Premises and shall otherwise ensure swift compliance with all applicable federal, state, and local laws and other environmental requirements.

17.17 Effective Date. Unless a different date is provided in this Lease, the effective date of this Lease shall be the latest date of execution set forth by the names of the signatories below.

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(SIGNATURE PAGE FOLLOWS)

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IN WITNESS WHEREOF, the P arties below are authorized to act on behalf of their organizations, and have executed this Lease as of the Effective Date.

CITY OF ESCONDIDO

Date: __________________ ________________________________________ Dane White, Mayor

THE ESCONDIDO EDUCATION COMPACT

Date: __________________ __________________________________________ Johnnie Landreth, Board Chairperson

(ABOVE SIGNATURES MUST BE NOTARIZED; ACKNOWLEDGMENT PAGES FOLLOW)

APPROVED AS TO FORM:

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

BY: ______________________________________

Resolution No. 2023-173
Exhibit "B"

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ACKNOWLEDGMENT

STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me, ______________________________, a Notary Public, per sonally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

Resolution No. 2023-173
Exhibit "B"

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ACKNOWLEDGMENT

STATE OF CALIFORNIA ]
COUNTY OF ______________________ ]
On ___________________________________, before me, ______________________________, a Notary Public, personally appeared _______________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) who se name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

Lessee

Resolution No. 2023-173
Exhibit "B"

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Exhibit A

Legal Description of Premises

That certain real property in the County of San Diego, State of California, described as follows:

The northwesterly 50.00 feet Lots 1 and 2 in Block 83 of Escondido, i n the City of Escondido, County of San Diego, State of California, according to Map thereofNo.336, filed in the office of the County Recorder of San Diego County, July 10, 1886.

Exhibit B

Memorandum of Lease Agreement

Resolution No. 2023-173
Exhibit "B"

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Memorandum of Lease Agreement
1 EXEMPT FROM FEES pursuant to
Gov’t Code §§ 6103, 27383, and 27388.1
(filing requested/executed by municipality)

RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:

Attn: Director of Economic Development
City of Escondido
201 North Broadway
Escondido, California 92025-2798

This Space for Recorder’s Use Only
APN [232-091-28-00]
Escondido Document No. [M-18-23-]

MEMORANDUM OF LEASE AGREEMENT

The term of the Lease is for 59 months, commencing on January 2, 2024 (“Effective Date”) and ending on November 6, 2029.

This Memorandum may be executed on separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties below are authorized to act on behalf of their organizations, Resolution No. 2023-173
Exhibit "B"

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Memorandum of Lease Agreement
2 and have executed this Memorandum as of the Effective Date.

CITY OF ESCONDIDO

Date: __________________ ________________________________________ Dane White, Mayor

THE ESCONDIDO EDUCATION COMPACT

Date: __________________ __________________________________________ Johnnie Landreth, Board Chairperson

(ABOVE SIGNATURES MUST BE NOTARIZED; ACKNOWLEDGMENT PAGES FOLLOW)

APPROVED AS TO FORM:

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

BY: ______________________________________

Resolution No. 2023-173
Exhibit "B"

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Memorandum of Lease Agreement
3 ACKNOWLEDGMENT

STATE OF CALIFORNIA ]

COUNTY OF ______________________ ]

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

City of Escondido

Resolution No. 2023-173
Exhibit "B"

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Memorandum of Lease Agreement
4 ACKNOWLEDGMENT

STATE OF CALIFORNIA ]

COUNTY OF ______________________ ]

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

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

WITNESS my hand and official seal.

Signature: ________________________________________ (Seal)

The Escondido Education COMPACT

Resolution No. 2023-173
Exhibit "B"

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Memorandum of Lease Agreement
5 Exhibit A

Legal Description of Premises

That certain real property in the County of San Diego, State of California, described as follows:

Legal Description of Premises

The northwesterly 50.00 feet Lots 1 and 2 in Block 83 of Escondido, in the City of Escondido, County of San Diego, State of California, according to Map thereofNo.336, filed in the office of the County Recorder of San Diego County, July 10, 1886.

Resolution No. 2023-173
Exhibit "B"

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STAFF REPORT

December 13, 2023
File Number 0170-12; 0600-10; A-3489

SUBJECT

SETTLEMENT OF TOUCHSTONE LITIGATION AND FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT FOR MUNICIPAL PARKING LOT #1 PROJECT

DEPARTMENT
City Attorney’s Office

RECOMMENDATION
Request the City Council Approve Resolution No. 2023 -164 to (1) authorize the settlement of the litigation titled Touchstone MF Fund I, LLC v. City of Escondido; and (2) approve the First Amendment to Purchase & Sale Agreement.

Staff Recommendation: Approval (City Attorney’s Office: Michael R. McGuinness, City Attorney) Presenter: Michael R. McGuinness, City Attorney

FISCAL ANALYSIS
At this time, the City Council is only being asked to approve a settlement of the Lawsuit (described in detail below) and First Amendment to the Purchase & Sale Agreement with Touchstone MF Fund I, LLC. The City Council is not being asked to, and may not, consider any particular new project for the site or the value to the City of any such new project as part of this agenda item . If the City Council approves this settlement, future site-related matters will come to it for consideration including a new application for development of the property and Development Agreement.

The specific value of the Lawsuit settlement is difficult to identify but the damages alleged in the action and potential recoverable attorney’s fees amount to several million dollars. A complete resolution of the Lawsuit removes the exposure to all litigation attorney’s fees and costs including discovery , expert, trial and potential appeal costs and a significant period of time where the property is tied up in litigation.

Further, as part of the settlement, and given the time period elapsed since the original Purchase & Sale Agreement and development project were considered, the parties have agreed to increase the value of the subject property from the initial sales price of $1,590,000 to the negotiated value of $1,815,475. The proceeds of the sale will be received upon close of escrow as provided for in the original purchase and sale agreement.

No other fiscal analysis or benefits from the settlement or potential new project will be evaluated or realized unless and until a new project is advanced to the City Council for consideration. 94 Item8.

PREVIOUS ACTION
On December 18, 2018, the City and Touchstone MF Fund I, LLC (“Touchstone”) executed an Agreement of Purchase and Sale and Joint Escrow Instructions ( “2018 PSA”) relating to City -owned real property located at 137 Valley Parkway, Escondido, California, also known as Municipal Parking Lot 1 (“Property”).

See Attachment “1”. Touchstone thereafter filed an Application for certain development entitlements including a Master and Precise Development Plan , including a Density Bonus Application, a Class 32 exemption in accordance with the California Environmental Quality Act ( “CEQA”), and Development Agreement (“Application”) which was processed by City staff.

The Planning Commission recommended approval of the Application. The Application was denied by the City Council at a public hearing on October 9, 2019. On June 2, 2020, Touchstone filed a Complaint against the City alleging Breach of Contract and seeking Declaratory Relief arising out of and related to the denial of the Application . The City thereafter filed a Cross-complaint against Touchstone alleging Breach of Contract and seeking Declaratory Relief (both actions will be referred to collectively herein as the “Lawsuit”). The Lawsuit has been litigated for over three years and is still pending.

BACKGROUND
Previous Project
In 2016, the City and Touchstone began formal discussions with City staff regarding a potential residential development in an existing municipal parking lot located at 137 Valley Parkway, Escondido, also known as Municipal Parking lot 1 (“Aspire Project” or “Project”). In March 2016, the City and Touchstone entered into an Exclusive Negotiating Agreement (“ENA”) to further develop the Project proposal. The ENA was amended and extended several times as the Project progressed and changed.

On September 19, 2018, the City Council approved an Agreement of Purchase and Sale and Joint Escrow Instructions (“2018 PSA”) which became effective on December 18, 2018. The purchase price for the property was $1,590,000 based on an appraisal done in 2018.

In its final iteration, the Project was a proposed six-story, mixed-use structure containing 131 apartment units, approximately 4,289 square feet of commercial space, underground parking , and an outdoor common area with a pool for residents. The proposed structure would be 67 feet in height with parapet walls and a tower element that extended up to 75 feet in height. The apartment units varied from studios to 2-bedroom units.

On August 27, 2019, t he Escondido Planning Commission approved a motion to recommend the Project by a vote of 6-1. On October 9, 2019, the City Council held a public hearing on the Application. Further, the council was asked to consider Ordinance No. 2019 -13 approving a Development Agreement which inter alia allowed for an allocation of density from the Downtown Density Transfer Program. The City Council voted 3-2 to deny the application.
95 Item8.

Soon thereafter, the City and Touchstone disputed the ability of Touchstone to file a new application for entitlements. In general, Touchstone claimed it had the right to file a new, revised application based on the language of the 2018 PSA, past practices and the escrow time period. The City maintained , among other arguments, that the 2018 PSA explicitly and implicitly did not allow for additional, revised applications after the October 9, 2019 hearing denying the Project, the City had the right under the 2018 PSA to reject the Project, Touchstone did not have the property owner’s consent to file a new project application, and it had fully satisfied all of the obligations required of it in the 2018 PSA.

Litigation.

On June 2, 2020, Touchstone filed a lawsuit against the City titled Touchstone MF Fund I, LLC v. City of Escondido, San Diego Superior Court Case No. 37-2020-00020856-CU-BC-NC. Touchstone alleged , in essence, that the City’s refusal to accept a new development application for the project site constituted several wrongs including: (1) a breach of the 2018 PSA and/or waiver of its provisions; and (2) a violation of state housing laws including the State Density Bonus Law and Housing Crisis Act.

On July 22, 2020, the City filed its Cross-complaint against Touchstone alleging a breach of the 2018 PSA for failure to consent to terminate escrow after the Pro ject was denied by council action and breach of the i mplied covenant of good faith and fair dealing for its acts, omissions and conduct related to obstructing the closure of escrow
The Lawsuit has been litigated for over three years and while still pending, discovery and motion practice has been stayed for purposes of this proposed settlement. If the matter does not settle, the stay will be immediately lifted and the parties will appear before the court to set dates for further motions and jury trial. It is anticipated that regardless of the outcome of the Lawsuit before the trial court, one of the parties will file an appeal. As a result, final resolution of the Lawsuit could be years away and the disposition of the property will be stalled during that time due to the pending litigation.

The parties to the Lawsuit have been in extensive and complicated settlement negotiations over an extended period of time to resolve the matter in the best interests of each party. The result of those negotiations has been a proposed settlement of the Lawsuit by entering into a settlement agreement and mutual release of claims as well as simultaneously amending the 2018 PSA to allow for Touchstone to engage another developer to file the appropriate application to develop the Property.

This settlement does not in any way commit the Planning Commission or City Council to a course of action, decision or approval in whole or in part as to any development application for the Property , except as otherwise required by state law. Instead, a new developer will be required to follow all conditions for a development project in the City and the City’s discretion to approve or deny the project remains unqualified and absolute.

96 Item8.

Settlement of Litigation.

Settlement of the Lawsuit includes two principal components:

A. Stay & Dismissal of The Lawsuit.

The first component of the settlement will be authorizing the City Manager to execute a Settlement Agreement and Mutual Release of claims. The proposed Settlement Agreement is at tached to the Staff Report as Attachment “2” and the Resolution as Exhibit “A.” In summary, the Settlement Agreement substantively allows for the following between the parties:

1. The Parties will agree to file a stipulation with the court to further stay the Lawsuit for 30 months and cooperate with the court and each other to maintain a stay of the case;

2. Touchstone will file a dismissal of its lawsuit with prejudice against the City and the City will dismiss its Cross-complaint at the earlier of (1) the conclusion of the 30-month stay; (2) the close of escrow provided for in the First Amendment to the Purchase and Sale Agreement (“First Amended PSA”); or (3) the termination of the First Amended PSA;

3. The parties mutually release and waive any claims to litig ation costs and attorney ’s fees recoverable against the other in the Lawsuit; and

4. The settlement agreement is conditioned upon the execution of the First Amended PSA.

B. First Amendment to the Purchase & Sale Agreement.

The second component of the settlement will be authorizing the City Manager to execute a First Amended PSA with Touchstone. The First Amended PSA is a ttached to the Staff Report as Attachment “3” and to Resolution No. 2023-164 as Exhibit “B.”
In summary, the First Amended PSA amends the original 2018 PSA in the following substantive ways:

1. The Closing Date for the sale will be forty-five (45) days following the earlier of the issuance of (1) a building permit for a project , or (2) twenty-four (24) months after the First Amended PSA is effective, but may be extended and tolled if there is a third -party challenge to the project of the First Amended PSA;

2. The Purchase Price for the Property is increased to $1,815,475;

3. Touchstone agrees to indemnify the City if the California Department of Housing and Community Development (“HCD”) finds that the Agreement is subject to the California Surplus Lands Act (“SLA”) or a violation of the SLA and if it does not so indemnify, the City may terminate the Agreement;

4. Touchstone will allow KB Escondido LLC to submit an application for entitlements for the Property and the City has no obligation to approve said application; 97 Item8.

5. The City has the right, at its option, to terminate this First Amended PSA if escrow is not closed by the Closing Date (including extensions and tolling);

6. The developer will file an application for entitlements within ninety (90) days of the effective date of the First Amended PSA and is permitted more than application up until the Closing Date;

7. The escrow holder will return an existing escrow extension deposit of $20,000 to Touchstone; and

8. The balance of the 2018 PSA will remain in effect.

Conclusion.

The Property transaction envisioned by the 2018 PSA has been stalled for over 4 years at this time a nd the Property cannot be sold or developed until the Lawsuit is resolved. The Settlement Agreement and First Amended PSA allow for an opportunity to minimize the risk of exposure to the Lawsuit damages claimed by Touchstone, to free -up the Property for a nother development opportunity to assist with developing much needed housing, particularly housing that can assist with economic development in the downtown area, and to allow the existing City Council to weigh in on a new application for entitlements at the Property site.

RESOLUTIONS
a. Resolution No. 2023-164
b. Resolution No. 2023-164 Exhibit “A”
c. Resolution No. 2023-164 Exhibit “B”

ATTACHMENTS
a. Attachment “1” – Original 2018 Agreement of Purchase and Sale and Joint Escrow Instructions b. Attachment “2” – Settlement Agreement and Mutual Release c. Attachment “3” – First Amendment to Purchase and Sale Agreement 98 Item8.
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AGREEMENT OF PURCHASE AND SALE AND

JOINT ESCROW INSTRUCTIONS
Attachment "1"
99 Item8.

TABLE OF CONTENTS
SECTION 1 DEFINITION OF TERMS ...................................................................................................................... 1 SECTION 2 PROPERTY ............................................................................................................... .......................... 3 SECTION 3 PURCHASE PRICE .............................................. .......................................................................... ....... 3 SECTION 4 ESCROW ................................................................... ......................................................................... 4 SECTION 5 TITLE ............................................................................ ........................................................... ........... S SECTION 6 CONDITIONS TO CLOSE ESCROW ........................... ................................................ ............................ 5 SECTION 7 BUYER'S OBLIGATIONS .............................................................................................................. ........ 6 SECTION 8 CITY'S OBLIGATIONS .......................................................................................................................... 8 SECTION 9 RIGHT TO ENTER ONTO THE PROPERTY ........................... .................................................................. 9 SECTION 10 COSTS .......................... ............................................................ ........................................................ 10 SECTION 11 ENTITLEMENTS ................................................................................................................................ 11 SECTION 12 TERMINATION .................. ............................. .................................................................................. 12 SECTION 13 SOLE RELIANCE ............................................................................ .................................................... 13 SECTION 14 AS IS, WHERE IS ............................................... .............................. .................................................. 13 SECTION 15 ATTORNEY'S FEES, COSTS AND EXPENSES ........................................................................... ............ 14 SECTION 16 ASSIGNMENT ......................................... ............................. ............................................................ 14 SECTION 17 MISCELLANEOUS ................................ ............................................................................................. 15 EXHIBITS:

Exhibit A• Due Diligence Materials
Exhibit 8 - legal Descriptions
Exhibit C - Grant Deed

Attachment "1"
100
Item8.

CITY OF ESCONDIDO

AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCRO\V INSTRUCTIONS
This Agreement is made as of ;�� , 1 .- e "'--., ,,_
Touchstone MF Fund I, LLC
� __,_ 2018 between the City of Fscondido and

RECITALS
The City is the owner of unoccupied land located at 137 Valley Parkway, Escondido, California.

The City desires Lo sell and Buyer desires to purchase the Property upon the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, City and Buyer agree that the terms and conditions of this Agreement and the instructions to Escrovv Holder with regard to the escrow, created pursuant hereto are as follows:

Section 1 Definition of Terms
The following \VOrds in this Agreement shall have the significance attached to them in this Section unless otherwise arparent from their context.

I. I Agreement. Agreement means this Agreerncnl or Purchase and Sale and Joint Escrow Instructions.
l .2 Approved Conditions of Title, Approved Conditions of Title means only those conditions to title as provided in Section 5.2.

1.3 Buyer. Buyer means Touchstone MF Fund l, LLC, a Delaware Limited Liability Company and does not include its heirs, assigns, or successors in interest.. l .4 City. The City means the City of Escondido. a California general law City.

I .5 Close of Escrow. Close of Escrow means the date the City's Grant Deed is filed for record.
l .6 Closing Date. Closing Date shall be the date scheduled for Close of Escrow, and unless otherwise agreed lo in writing by City and Buyer or as otherwise set forth in this Agreement, the Closing Date shall be forty five (45) days fo!lowing City issuance of a building permit relating to the Entitlements or eighteen ( l 8) months from the Effective Date, whichever occurs first. Buyer shall also have the right to accelerate the Closing Date on providing IO days written notice to City, provided all obligations under this agreement are met prior to closing.

1.7 Deposit. Deposit means the deposit to be made by Buyer in accordance with Attachment "1"
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Item8.

Section 3. l below.

1.8 Due Diligence Materials. Due Diligence Materials shall mean those materials specifically described in Exhibit A attached hereto.
l .9 Effective Date. Effective Date means the date this Agreement is countersigned by the Real Property Manager.

1.10 Entitlements. Entitlements shall mean all necessary City, State, Federal or other governmental approvals including but not limited to a planned development, building permits, CEQA determinations, etc.

1.1 l Escro·w Holder. Escrow Holder means:

Fidelity National Title Insurance Company
4400 MacArthur Blvd., Suite 200
Newport Beach, CA 92660
Attn: Valerie Rapp
Facsimile No.: 866-935-6314
Telephone No.: 949-477-3646
Emai I: [email protected]

1.12 First Deposit. First Deposit shall refer to the original deposit as provided in Section

3.1. l. lJ Feasibility Period. Feasibility Period means the period commencing upon the Effective Date of this Agreement and expiring sixty (60) days thereafter. l .14 General and Special Real Estate Taxes. General and special real estate taxes means all non-delinquent taxes and charges ofthe type customarily evidenced by a secured tax bill issued by the Tax Collector of the County, including, but not limited lo, amounts allocated to (i) County or City general governmental purposes, (ii) bonded indebtedness of the County or City, (iii) bonded or other indebtedness and operating expenses of any school, college, sewer, water, irrigation, hospital, library, utility, county service, community facilities district or other district, and (iv) any other lawful purpose. The parties acknowledge that prior to the Close of Escrow the Property may not be subject to general and special real estate taxes because the Property is owned by a public entity, but such fact shall not be construed to release or relieve Buyer from the obligation to assume responsibility for general and special real estate taxes as of the Close of Escrow

1.15 Grant Deed. Grant Deed means the grant deed re.corded by the City transferring ownership to the Buyer.

1.16 Opening of Escrow. Opening of Escrow means the date as provided in Section 4.1.

I < 17 Party. Buyer or City may be referred to individually as Party or collectively as 2 Attachment "1"
102
Item8.

Parties.

1.18 Pro,ject. Project means a mixed use development with a minimum of 106 units on the Property and consistent with the City's Do·wntown Specific Plan.

1.19 Promissory Note. Promissory Note means a Promissory Note between the Buyer and the City for the amount of seventy-five percent (75%) of the Purchase Price together with any additional documents necessary to secure the Promissory Note by the Prope1ty.

1.20 Property. Property means the real property known as APN 229-421-26, located at 137 Valley Parkway, Escondido, CA 92025, as described in Exhibit B.

1.21 Purchase Price. Purchase Price means the purchase price for the Property described in Section 3.2 below.

1.22 Report Reporl means a standard preliminary title report issued by the Title Company with respect to the Property within five (5) days following the Opening of Escrow.
1,23 Second Deposit. Second Deposit shall refer to the second deposit as provided in Section 3 .1.

1.24 Third Deposit. Third Deposit shall refer to the third deposit as provided in Section

3.1. 1.25 Title Insurer. Title Insurer means the same entity as designated for the Escrow Holder.

1.26 Title Policy. Title Policy means the title policy as set forth in Section 5.1.

Section 2 Property
The City shall sell the Property to Buyer and Buyer shall purchase the Property from the City on the terms and conditions stated in this Agreement City owns vacant real property with an address of 137 Valley Parkway, Escondido, CA 92025 as provided in Exhibit B.

Section 3 Purchase Price

3.1 Deposit. Concurrently with the opening of escro\.v, Buyer shall deliver to Escrow Holder the First Deposit sum of FIFTY THOUSAND DOLLARS ($50,000) which shall be held by Escrow Holder until the expiration of the Feasibility Period, at which time it shall be delivered to City. At the expiration of the Feasibility Period, Buyer shall deposit the Second Deposit of FIFTY THOUSAND DOLLARS ($50,000). Upon the issuance of the Building Permit, Buyer shall deposit the Third Deposit of TWO HUNDRED THOUSAND DOLLARS ($200,000). Collectively, the First, Second and Third Deposits make up the entire Deposit. Buyer shall execute and deliver to Escrow Holder such instructions as may be requested by Escrow Holder to cause the Deposit to be released to City in a timely manner. The 3 Attachment "1"
103
Item8.

Deposit shall be credited lo the Purchase Price upon Close of Escrmv. If either Party terminates this Agreement prior to the expiration of the Feasibility Period, then the First Deposit shall be returned to Buyer. Escrow shall be opened by the parties within five (5) days of the Effective Date.

3.2 Purchase Price. City agrees to sell and Buyer agrees to buy the Property for the Purchase Price of fair market value as determined by an independent appraiser, paid for by the Buyer. In the event that the Patiies cannot agree on an appraiser, each Party shall hire its O\Vn appraiser and the two appraisers shall se.lect the independent appraiser. The appraisal shall be completed within 30 days of the Effective Date.

Each Party may reject the appraisal and tenninate the escro,v within the Feasibility Period.

3.3 Payment of Purchase Price. Buyer shall deposit with Escrow Holder in cash, or by a Promissory Note approved by the City, at least one business day before the Closing Date, the Purchase Price, less the amount of the Deposit and any reimbursement pursuant to Section 3.3. Such Promissory Note will have a maturity date of 36 months from Close of Escrow with an interest rate of 4% per annum.

Section 4 Escrow

4. J Opening of Escrow. For purposes of this Agreement, the escrow shall be deemed opened on the date Escrow Holder receives the Deposit from Buyer and an executed counterpart of this Agreement from both Buyer and the City. Escrow Holder shall notify Buyer and City, in writing, of the date escrow is opened. Buyer and City agree to execute, deliver and be bound by any reasonable or customary supplemental escrow instructions of Escrow Holder or other instruments as may reasonably be required by Escrow Holder in order to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend or supersede any portions of this Agreement. If there is any inconsistency between such supplemental instructions and this Agreement, this Agreement shall control.

4.2 Close of Escrow. Close of escrow occurs when the Grant Deed conveying the Property to Buyer, is recorded in the Official Records of the Recorder of San Diego County, California. Close of escrow shall occur on Closing Date. Buyer and Seller may agree to change the Closing Date by joint written notice to Escrow Holder. If Escrow Holder cannot close escrow on or before the Closing Date, it will nevertheless close this escrow when all conditions have been satisfied or waived unless, after the Closing Date and prior to the Close of Escrow, Escrow Holder receives a written notice to terminate this escrow from a Party who, at the time the notice is delivered, is not in default under this Agreement.

4.3 Extension of Escrow. Buyer shall have two options to extend the Close of Escrow for an additional ninety (90) days. Each option shall require a $20,000 non- 4 Attachment "1"
104
Item8.
refundable extension deposit that will not be applied to the purchase price. The City Manager may extend escrow up to an additional fourteen (l 4) days in the City's sole discretion.

Section 5 Title

5.1 Policy. As a condition to the Close of Escrow, title shall be evidenced by the willingness of the Title Company to issue its ALTA Owner's Policy of Title Insurance with extended coverage, inclusive of any endorsements requested or required by Buyer or its lender, in the amount of the Purchase Price showing title to the Property vested in Buyer upon conveyance of the Grant Deed subject to the Approved Conditions of Title and such other exceptions to title as may be set forth in the Report and not objected to by Buyer.

5.2 A.

5.3 Condition of Title. At the Close of Escrow, title to the Property shall be conveyed to Auyer by the City subject only to the following Approved Conditions of Title:
a lien to secure payment of real estate taxes and assessments, not delinquent;
the lien of supplemental taxes;
matters affecting title to the Property created by or with the written consent of Buyer or which are waived or deemed approved by Buyer; all matters which ·would be disclosed by an inspection or survey of the Property as approved by Buyer; and
all exceptions which are disclosed by the Report, and which are approved by Buyer in accordance with this Agreement.

Title Exceptions. ft is acknowledged and agreed by the City and Buyer that the listing of the Approved Conditions of Title shall be subject to Buyer's approval during the Feasibility Period. ff Buyer (A) does not tenninate the Agreement at or prior to the end of the Feasibility Period or (b) otherwise object thereto as set forth in any Buyer's notice pursuant to Section 7.3 given by Buyer to City, then Buyer's approval shall be deemed given to the City.

Section 6 Conditions to Close Escrow

6.1 Conditions to Buver's Obligations. Buyer's obligation to consummate the transaction contemplated by this Agreement is subject to the satisfaction of the following conditions for Buyer's benefit or Buyer's waiver thereof, on or prior to the dates designated below for the satisfaction of such conditions:

A. City's Obligations. As of the Close of Escrow, City shall have timely performed all of the obligations required to be performed by City under 5 Attachment "1"
105
Item8.
this Agreement.

6.2 Conditions to Citv's Obligations. For the benefit of the City, the Close of Escrow shall be conditioned upon the occun-ence and/or satisfaction of each of the following conditions (or City's waiver thereat� it being agreed that City may waive any or all or such conditions, in its sole and absolute discretion):

A. Buyer's Obligations. Buyer shall have timely performed all of the obligations required by the terms of this Agreement to be performed by Buyer including, without limitation, the timely deposit of all monies required to be deposited by Buyer under this Agreement.

Section 7 Buyer's Obligations

7.1 Application for Entitlements. Buyer shall submit an application for Entitlements as provided in Section 12.

7.2 Entitlement Approval. The Buyer shall secure approval of the Entitlements.

7.3 Public Parking. Buyer agrees to provide a minimum of 76 parking spaces on the Property for public use as approved and determined by the City, with an allowance for overnight parking for residents at the Property. The City shall have the right to any future revenue from the public parking area. Maintenance of the public parking area will be the responsibility of Buyer and regulation of the public parking shall be the responsibility of the City. These obligations shall be recorded on the Property as deed restrictions in favor of the City.

7.4 Review of the physical condition and records.

A. Buyer shall have the Feasibility Period, to satisfy itself in its sole and absolute discretion, with all physical, legal and investment aspects of the Property and its condition and suitability for Buyer (including, without limitation, zoning; the environmental and physical condition of the Property and any other portion of the Property).

B. If, prior to the expiration of the Feasibility Period, Buyer notifies City and Escrow I lo Ider in writing of Buyer's disapproval of the Propc1ty, such disapproval shall act to terminate this Agreement and the Escrow created pursuant hereto, in which event Buyer and City hereby direct Escrow Holder to pay the First Deposit to Buyer. ff, prior to the expiration of the Feasibility Period, Buyer notifies City in writing of Buyer's approval of the Property, or if Buyer fails to notify City and Escrow Holder of Buyer's approval of the Property on or before the end of the Feasibility Period, such approval shall satisfy this condition. Upon satisfaction of this condition, Escrow Holder shall release Buyer's First Deposit to the City. 6 Attachment "1"
106
Item8.

C. Buyer agrees not to disclose any confidential or proprietary information contained in any such document or material reviewed by or provided to Buyer except to the extent that such disclosure is required by any judicial proceeding (including a coUit order), federal, state or local law or is to Buyer's officers, attorneys, prospective lenders, agents or employees (provided that Buyer shall require each of the same to hold such information as confidential), Buyer's obligation under the immediately preceding sentence shall survive any termination of this Agreement. Buyer shat! have until the end of the feasibility Period to satisfy itself as to the review and approval of such documents and materials and the condition and suitability of the Property,
D. Buyer hereby agrees to indemnify, defend, protect and hold the City, its agents, officers, and legislators, and the Property harmless from and against any and all claims, liabilities, obligations, costs, losses, damages and/or expenses, of any kind or nature (including, without limitation, reasonable attorneys' fees and costs), arising out of or resulting from any submiuat(s) affecting the Property by or for Buyer and/or any such entry and/or activities upon the Property by Buyer, its employees, agents, contractors and/or subcontractors and Buyer agrees, al its sole cost and expense, to restore the Property to its condition existing prior to the conduct of any such activities upon the Prope1ty by Buyer, its employees, agents, contractors and/or subcontractors. The provisions of this section shall survive the termination of this Agreement and the Close or Escrow and delivery or the Grant Deed.

7.5 Buyer's Review of Tit!�.

A. Buyer shall have until the Feasibility Period to give City and Escrow Holder written notice of Buyer's disapproval or conditional approval of any matters shown in the Repott. The failure of Buyer to give notice on or before the Feasibility Period shat! be deemed to constitute Buyer's approval of the condition of title to the Property unless Buyer shall have terminated this Agreement.

B. If Buyer disapproves or conditionally approves any matter of title shown in the Report, then on or before the expiration of thirty (30) days from the date of City's receipt of Buyer's notice, the City may elect to eliminate or ameliorate to Buyer's satisfaction the disapproved or conditionally approved title matters. City shall give Buyer written notice not later than thirty (30) days after City" s receipt of Buyer's notice of those disapproved or conditionally approved title matters, if any, which City agrees to either eliminate from the Title Policy as exceptions to title to the Property or to ameliorate to Buyer's satisfaction by the Closing Date. If the City does not 7 Attachment "1"
107
Item8.
elect to eliminate or ameliorate to Buyer's satisfaction any disapproved or conditionally approved title matters, or if City is unable to eliminate or ameliorate to Buyer's satisfaction all such disapproved matters prior to the Closing Date, then Buyer shall elect by wrillen notice to City and Escrow Holder on or before the Feasibility Period, to: (l) waive its prior disapproval, in which event said disapproved matters shall be deemed approved; or (2) terminate this Agreement and the Escrow created pursuant hereto, in which event, Escrow Holder shall disburse the then amount of the First Deposit together with any interest accrued thereon to Buyer.

7.6 Deposit Buyer shall deposit or cause to be deposited with Escrow Holder. the Deposit, as provided in Section 3. l.

7.7 Closing Statement. Buyer shall deposit or cause to be deposited with Escrow Holder, the Closing Statement, signed by Buyer.

7.8 7.9
Forms. Buyer shall deposit or cause to be deposited with Escrow Holder, any transfer tax fonn, affidavit or declaration required by any laws with respect to the transfer of title to the Property, signed by Buyer in form for filing with the applicable governmental authority.

Other Items. Buyer shall deposit or cause to be deposited with Escrow Holder, such other sums required hereunder or reasonably required by the Title Company for the Close of Escrow and such other documentation and/or instruments required hereunder or reasonably required by City or the Title Company for the Close of Escrow.

Section 8 City's Obligations

8.1 Due Diligence Materials. Within five (5) business days of the Opening of Escrow, City shall deliver to Buyer those ce1tain documents and materials. if any, shown on Exhibit A attached hereto. Buyer acknowledges and agrees that such Due Diligence Materials have been prepared by third parties or are based on information provided by third parties, and City does not warrant the accuracy or completeness of such informalion contained therein. If this Agreement is terminated for any reason, Buyer shall return all Due Diligence Materials, and any copies thereof, to City.

8.2 Processing of Entitlements. City shal I process Buyer's application for Entitlements as provided in Section l2.

8.3 Deposits by Citv. At least one (l) business day prior to the Close of Escrow, City shall deposit or cause to be deposited with Escrow Holder the following documents and instruments: Grant Deed, duly executed by City and acknowledged, in the form attached hereto as Exhibit C.
g

Attachment "1"
108
Item8.

8.4 Settlement Statement. City shall deposit or cause to be deposited with Escrow Holder, a closing statement prepared (or approved) by the Title Company and approved by City and Buyer, signed by City.

8.5 Transfer Tax Documentation. City shall deposit or cause to be deposited with Escrow Holder, any transfer tax fonn, affidavit or declaration rcqLJired by any laws with respect to the transfer of title to the Property, signed by City in form for filing with the applicable governmental authority.

8.6 Other Doc.umentation. City shall deposit or cause to be deposited with Escrow Holder, such other documentation and/or instruments required hereunder or reasonably required by Buyer or the Title Company for the Close of Escrow (it being understood that City and Buyer shall nol be required to execute or deliver any document or instwment that materially increases any of either party's obligations or materially decreases either patty's rights under the terms and prov is ions of this Agreement).

Section 9 Right to Enter onto the Property

9.1 Right to Enter the Property. Buyer and its employees, agents and independent l'.Ontractors may, prior to lhe Close of Escrow, reasonably go upon the Property to, at Buyer's sole cost, inspect, survey and test the Property and other similarly related activities after receiving written approval from the City. Should Buyer's right to purchase the Property terminate, Buyer wilL immediately after such termination, at Buyer's sole cost, return the Property to its physical condition immediately before such damage or as close thereto as reasonably possible. Buyer shall not conduct any borings or other invasive testing on or about the Property without first obtaining the prior \Vritten consent of City, which consent shall not be unreasonably withheld; provided, however, that Buyer shall provide City with copies of all tests and reports received by Buyer in connection therewith and Buyer shall return the Property to its fom1er condition at the conclusion of such tests and borings.

Section 10 Indemnification and Insurance
IO. I
l0.2
Indemnification. Buyer will indemnify, defend and hold City and the Property harmless from any claim, loss, cost, damage, liability, lien, action or judgment (including, without limitation, City's reasonable attorneys' fees and court costs) arising in connection with the acts or omissions of Buyer or any its employees, agents or independent contractors. Termination of this Agreement will nol terminate Buyer's obligations hereunder.

Prevailing Wa2:es. The City shall have no liability to the Buyer or any other person for, and Buyer shall indemnify, defend, protect and hold harmless the City from and against, any and all liabilities, claims, actions, causes of action, proceedings, suits, damages, judgments, liens, levies, costs and expenses of whatever nature, 9 Attachment "1"
109
Item8.
including reasonable attorneys' fees and disbursements, which the City may suffer or incur or to which the City may become subject as a result of or allegedly caused by the paymen1. or lack of payment of prevailing wages for any construction related to the Property. Termination of this Agreement will not terminate Buyer's obligations hereunder.

I 0.3 Insurance. Buyer must have insurance in the following amounts prior to entry on the Prope1ty and at all times until Close of Escrow:

A. General liability insurance with at least $1 Million combined single-limit coverage per occurrence for bodily injury and property damage; and B. Automobile liability insurance of $1 Million combined single-limit per accident for bodily injury and property damage; and
C. Workers' compensation and employer's liability insurance as required by the California Labor Code, as amended, or certificate of sole proprietorship.

D. Each policy must name the City specifically as an additional insured under the policy on a separate endorsement page, with the exception of the workers' compensation policy.

E. Buyer agrees to deposit with City, prior to entry to the Property, one Certificate oflnsurance for each of the policy or policies necessary to satisfy the insurance provisions of the feasibility Period and to keep such insurance in effect during the entire Feasibility Period. Said Certificate of Insurance shall be reviewed by, and acceptable to, the City Attorney, prior to entry.

Buyer will also deposit with the City prior to entry, an Additional Insured Endorsement naming City specifically and separately as a "additional insured,'' with the exception of the worker's compensation policy.

Section 11 Costs

11. I City's Charges. City shall pay (i) any documentary transfer tax imposed by the County, (ii) the CLT A Standard owner's title policy premium or its equivalent (but not the added premium for an extended coverage ALT A policy), (iii) one-half (l/2) of Escrow Holder's fee, and (iv) usual City's document-drafting and recording charges.

I 1.2 Buyer's Charges. Buyer will pay (i) one-half (2) of Escrow Holder's fee, (ii) the extra premium for any ALT A title policy or any added endorsements (ordered by Buyer in the manner permitted by the terms of this Agreement) over and above that of the premium of the CL TA Standard owner's title policy or its equivalent, (iii) the premium for City's Title Policy insuring the validity and priority of the lien of the Deed of Trust, and (iv) usual Buyer's document-drafting and recording charges.

IO
Attachment "1"
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Item8.
l l .3 Broker. Each party represents that no person, corporation, or partnership acting as a real estate broker, finder or real estate agent has brought about this Agreement.

Section 12 Entitlements

12. I Application. Buyer shall submit to the City a complete application (Master and Precise Development Plan, Tentative Subdivision Map if processing a condo map) for the Property to pe1111it the construction and operation of the Project within ninety (90) days from the execution of this Agreement. For purposes of this section, a "complete application'' does not include any deficiency due to a proposed density transfer program or ordinance. Buyer agrees to use its best efforts to process and obtain the City's approval of the Entitlements as soon as possible. Nothing in this Agreement shall be construed to require the City to approve such Entitlements. If, despite Buyer's best efforts, the Entitlements are not approved by the City within eighteen ( 18) months following the submission of a complete application, then Buyer shall have the right, at its option, to terminate this Agreement by delivery of written notice thereof to City. Should this Agreement be terminated as a result of Buyer's failure to obtain approval of the Entitlements, then Buyer and City shall each execute escrow cancellation instructions whereby Buyer and City terminate this Agreement and release one another, the Property and Escrow Holder from any obligations under this Agreement with respect to the Property, except those indemnity and corrective obligations of Buyer relating to Buyer's inspection of the Property and any other agreements expressly intended to survive such termination.

If Buyer terminates this Agreement as provided herein, Buyer's First and Second Deposit will remain with the Cit}', or distributed to the City if not already distributed, unless such failure to approve the Entitlements is due to the City's failure to process the application in accordance with standard City procedures regarding the time of processing, in which case all deposits shall be returned to Buyer.

12.2 No Effect on Police Powers. Buyer acknowledges that the Entitlements involve the need for staff and the City Council to act in the public interest and according to applicable legal requirements without regard for this Agreement. Nothing in this Agreement shall in any manner affect the City Council or Planning Commission's sole and absolute discretion to disapprove, modify, or otherwise take any action regarding an application or request for any of the Entitlements to the extent such Entitlement is considered by either the City Council or the Planning Commission.

12.3 Submittals. Buyer shall bear all costs, fees, charges and expenses attributable to, or incurred or otherv.··ise payable in connection with, any such submittal(s) for Entitlements. Buyer hereby agrees, that upon any termination of this Agreement in accordance with the provisions hereof all reports, plans, drawings, studies and other documents associated with the submittal(s) which Buyer prepares or causes to be 1 l

Attachment "1"
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Item8.
prepared with respect to the Property shall be delivered to, and become the properly of, the City.

Section 13 Termination

13. l Breach. Time is expressly stated to be of the essence of each and every provision of this Agreement wherein time for performance is set forth. ln all other respects. the parties hereto covenant to perform their obligations in an expeditious manner.

Failure to comply \Nith this provision shal! be a material breach of this Agreement.

13.2 Termination. This Agreement must be executed by Buyer within 30 clays of the approval of this Agreement by the City Council.

13.3 Uquidated Damages. AUYER A.ND CITY AGREE THAT THE DEPOSIT IS A

REASONABLE ESTIMATE OF CITY'S DAMAGES IF ESCROW FAILS TO CLOSE DUE TO THE DEFAULT OF BUYER. IN THE EVENT THE CLOSE

OF ESCROW DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF

ANY DEFAULT BY BUYER, BUYER AND CITY AGREE THAT IT WOULD BE l!'vIPRACTICAL AND EXTREtv'lEL'{ D[FFICULT TO ESTIMATE THE DAMAGES \:VHICH CITY 1VtA Y SUFFER. THEREFORE, BUYER AND CITY HEREBY AGREE THAT/\ REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT CITY WOULD SUFFER IN Tl!E EVENT THAT BUYER

DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE

PROPERTY IS AND SHALL, BE AN AMOUNT EQUAL TO THE
LIQUIDATED DAMAGES AMOUNT. EXCEPT AS EXPRESSLY PROVIDED ELSEWHERE fN THIS SECTION, SAID AMOUNT SHALL BE THE FULL,

AGREED AND LIQUIDATED DAMAGES FOR THE HREACH OF THIS
AGREEMENT BY BUYER OF ITS OBL!GATfON TO PURCHASE THE
PROPERTY. UPON SUCH DEFAULT BY BUYER, CITY'S OBUGATJONS UNDER nus AGREEMENT SHALL BE TERMfNATED AND CITY SHALL
I [A VE THE RIGHT TO COLLECT SUCH UQUIDATED DAMAGES FROM BUYER AND/OR ESCROW HOLDER. TN ADD!TrON TO SUCH
L!QL!DATED DAMAGES, CITY SHALL BE ENTITLED n) (!) ENFORCE !TS REMEDIES UNDER ANY INDEMNIFICATION CONTAINED IN !HIS

AGREEMENT, AND (H) COLLECT ANY ATTORNEYS' FEES OR OTHER COSTS fNCURRED IN ENFORC[NG THE PROVISIONS OF THfS
PARAGRAPH.
____ @_'"' -
Buyer's Initials
//
_,/
y -''Z. ---- -···-·--- "" ""
City's initials

Attachment "1"
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Item8.

Section 14 Sole Reliance.

Except as expressly set forth herein, Buyer represents and warrants that it is relying solely upon its own inspection, investigation and analyses of the Property in purchasing the Property and is not relying in any way upon any representations, statements, agreements, warranties, studies, reports, descriptions, guidelines or other information, documentation or material furnished by City or its representatives, whether oral or written, express or implied, or arising by operation of law, of any nature whatsoever regarding any of the foregoing matlers.

Section 15 As is, Where is.

Except as expressly set forth herein, Buyer represents and warrants that it is acquiring the Property on an "as is," "where is," and ·'with all faults" basis without representation or warranty by City whatsoever including, withoul limitation, in connection with hazardous materials, substances or conditions; the water, soil, and geology, and the suitability thereof and of the Property for any and all activities. and uses which Buyer may elect to conduct thereon; habitability, merchantability, or fitness for a particular purpose of the Property; the manner, construction, condition, and state of repair or lack ofrepair of the improvements or any other portion of the Property; compliance with laws, statutes, codes, ordinances, orders, decisions, rules and/or reglllations; the leases and superior instruments and/or other restrictions, obligations, rights of way or conditions affocting the ownership, use, operation, development or operation of the Property. Further, and without limiting any uf the foregoing, Buyer represents and warrants that no patent or latent condition affecting the Property in any way, discoverable or hereafter discovered, shall affect Buyer's obligation to purchase the Property or any of Buyer's other obligations contained in this Agreement, nor shall any such condition give rise to any right or damages, rescission or otherwise against City. Further, and without limiting any of the foregoing, 13uyer acknowledges that City has not warranted and does not hereby warrant that any improvements will meet or comply with the requirements of any health, fire, building, zoning, or safety code, ordinance or regulation of the state of California, or any other authority or jurisdiction and that City has not warranted and docs not hereby warrant that the Property will meet or satisfy any particular use, purpose, development or operation, and that City has not made any warranty and does not hereby make any warranty regarding solid waste as defined in the U.S. Environmental Protection Agency Regulations at 40 C.r.R. Pt. 261, or the disposal or existence in, on or emanating from the Property, of any hazardous substance, as defined by the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and regulations promulgated there under. further, and without limiting any of the foregoing, Buyer hereby releases City from all risks and liability (and agrees that City shall not be liable for any special, direct, indirect, consequential, or other damages) resulting or arising from or relating to the ownership, use, condition, location, maintenance, repair or operation of the Property and City shall under no circumstances be liable for any special, indirect or consequential damages in the e.vent of any breach by City. The provisions of this section shalt survive closing hereunder.. Nothing in this section shall in any manner be construed as any representation, assurance or warranty of any kind by City.
13 Attachment "1"
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Item8.

Section 16 Attorney's Fees, Costs and Expenses
In the event legal action is brought to enforce the terms of or to decfarc a termination of this Purchase and sale Agreement for reason of breach thereof, the unsuccessful Party shall pay all of the successful Party's costs of such action, together with reasonable attorney's fees, in an amount to be fixed by the court.

Section 17 Assignment
Neither party may assign or delegate its rights or obligations pursuant to this Agreement without the prior written consent of the other, which consent shall not be unreasonably \"lithheld, conditioned, or delayed. It shall be unreasonable for Seller to deny consent to such assignment if the proposed assignee of Buyer has the same or betier financial strength and real estate development experience as Buyer. Seller shall respond in writing to Buyer's request for consent within thirty (30) days of the request or, if the City requests addilional information, 30 days from the date that the additional information is provided to the City .. Seller's failure to timely respond shall be deemed an approval of such assignment..

Section 18 Notice
All notices between the City and Buyer pursuant to the Agreement shall be in writing and shal! be given by personal delivery, overnight delivery service, certified or registered mail, facsimile or telecopy to the addresses set forth below. The addresses may be changed by giving (ten) I 0 days written notice.

City
City of Escondido
Attention: City Manager
201 N. Broadway
Escondido, CA 92025
with a copy to:

Michael McGuinness, Esq.

City Hall, Second Floor
201 N. Broadway
Escondido CA 92025
Fax: (760) 741-7541
Buyer
Touchstone MF Fund l, LLC
C/0 Touchstone Communities, LLC
Attention: Kerry Garza and Addison Garza
9909 Mira Mesa Blvd., Suite 150
14 Attachment "1"
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Item8.

San Diego, CA 9213 I
Phone: (858) 248-495 l
with a copy to:

David W. Ferguson, Esq.

Lounsbery Ferguson Altona & Peak, LLP
960 Canterbury Place, Suite 300
Escondido, CA 92025-3836
Phone: (760) 743-1201
Section 19 Miscellaneous

19.1 Applicable Law. This Agreement is governed by the laws of the State of California.

19.2 19.3

19.4 !9.5
Venue for all actions arising from this Agreement must be exclusively in the North County Division of the San Diego County Superior Court or fe.deral courts located in San Diego County, California.

Time of Essence. Time is of the essence of each and every term, condition, obligation and provision hereof.

Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.

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

No Obligations to Third Parties. Except as otherwise expressly provided herein, the execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the parties thereto, to any person or entity other than the parties hereto.
l 9.6 Exhibits and Schedules. The Exhibits and Schedules attached hereto are hereby incorporated herein by this reference.
l 9. 7 Amendment to this Agreement. The terms of thls Agreement may not be modified or amended except by an instrument in writing executed by each of the parties hereto.

I 9.8 Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof

19.9 Fees and Other Expenses. Except as otherwise provided herein, each of the paiiies 15 Attachment "1"
115
Item8.

19.10 shall pay its own fees and expenses in connection with this Agreement.

Entire Agreement. This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between Buyer and City as to the subject matter hereof. No subsequent agreement, representation, or promise made by either patty hereto, or by or to an employee, officer, agent or representative of either party shall be of any effect unless it is in writing and executed by the patiy to be bound thereby.
l 9.11 Partial Invalidity. If any portion of this Agreement as applied to either party or to any circumstances shall be adjudged by a court to be void or unenforceable, such portion shall be deemed severed from this Agreement and shall in no way effect the validity or enforceability of the remaining portions of this Agreement.

19.12 19.13

19.14 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the parties hereto.

Preparation of Agreement. Buyer and City acknowledge that the provisions and language of this Agreement have been negotiated, and agree that no provision of this Agreement shall be construed against either party by reason of such party having drafted such provision or this Agreement.

Execution of Agreement. This Agreement is transmitted for examination only and does not constitute an offer, and the Agreement shall not become effective until a fully executed original hereof shall be delivered to Buyer and City.

19. l 5 No Equitable Ownership. Prior to the conveyance of title lo the Propetty to Buyer, Buyer shall not acquire, assume or otherwise obtain any equitable ownership claim

19.16 or interest in the Property in any manner whatsoever.

Administrative Decisions. Where this Agreement may require approvals, interpretations, or other decisions, the City Manager or designee may make said decisions in accordance with the terms and conditions of this Agreement and City policies and procedures
16 Attachment "1"
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Item8.

IN \VlTN ESS WHEREOF, the Parties below are authorized to act on behalf of their organizations, and have executed this Agreement as of the date sel forth belmv.

J\rPROVU.D AS TO FOR\-'..
(Ji'!;ICI. OI' rHF CITY /\TTOR'1EY
MlCI IAU R �-1/f'l IJN\/ESS C1t 1 Auorncy
By:_-f/1

TOUCHSTONE MF FUND I, LLC
Bv: TmiC!ISTONE COMMUNITIES, LLC
ITS: MANAGER
Ker� 6a__ ,.-zo,, }11_a.n�<..r
Name, Title
_':;_;i�_/l�--------
l:)finre+1a-tversun;-ei ty--€-Ier-k

6.,,.,_.ffc.1-.:,· l1-i<·.,-,,, Cfv O e.. -f<_
I
17 Attachment "1"
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Item8.

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 J\ notary public or Jther off'c.;,r cornpieting this cerlifirnt•: ver:lies only th, ide:1\ity oi '.h? im!1vidu;il who signecl the document to wl1ici, ths certific?.te is attacned, and not :he 'rulhfulness. accuracy. or validity of U1,i: rJornrm,nt. evide;:ce to oe the �erson {s) i."/l1os0 r:arne(s} is/are subscribed to the withm :nstrume:·t and re me tho'. he/she.'they executea tl1e smne :r 11,siher:tlleir ,rnthcrized c,pac:ty(iesj, and th<lt by signatu,e[s) en the !1,Strument ti1e person(s). or the entity upcp beha f of which the person(s) acted. executed U,e instrun,ent. 1············fROBERTO VASQUEZ JR.
: No\ary Public- Coi<tornia �
f San Diego County �
Commission ; 2193569
My Comm. £xp,res May 4, 2021
i certify under PENAL TY CF PER.JURY under t11e
laws of U1e State of Califo1 nia U1c1t the for<,'gOi!1g puragrapl1 is true ,rnci correct.

Cornp!et.1ng :his infcr.rnotton can deter onerction of' the c.focun1ent or fraudulent reottochrnPnt of this form to on unrr:ter?ded c-Jocurnent Description of Attached Document
Title or Type of Document:

Document Date:----------------------� Nurn!Jer of P,1ges: ____ _ Signer:s) Other Tilan Narneci .c,bove:

Capacity(ies) Claimed by Signer(s)
Signers Name:

CJ Corporate Officer - Title(s) _______ _
O Partner - D Li1rntecl o General
o lnclivi(Juai
CJ Trustee
[! OU,er.
c Attorney in F,,ct
o Guardian o 1 Conserviitor
Sigrer is Representing: ---------�es--•--_-"-·--·-·--·----- ,:-2017 Nationai Notary /1ssocifltion
S1gn(:r's Nan1e: ___ ·· -•-• »-�•-•--
... "
C Corpornte Officer -- Tille+.)
c Partner - □ Limited
C Individual
c Tn.,;stee
CJ Other
o Attorney in Fact
o Guardian of Conservator
Signer is Re p!esentrn�r ·----------
Ml304-09 (09/17)

Attachment "1"
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Item8.

EXHLBfT A
Within five business days of the Opening of Escrow, Seller will, to the extent the same are within Seller's possession or control, deliver to Buyer copies of the following:

Phase I report
Phase l I report
Engineering Studies
lmprovemenl Plans
Consultant Reports
ALTA Surveys
Appraisals
M.a rkct Research
Financial Projections
Site & Landscape Plans
18 Attachment "1"
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Item8.

EXHfBIT B
LEGAL DESCRf PTION
THE LAND REFERRED TO HEREIN BELOW IS S[TUATED lN THE CITY OF

ESCONDIDO, IN THE COUNTY OF SAN DIEGO, ST ATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

PARCEL I:

LOTS 21 THROUGH 24 fNCLUSIVE JN BLOCK 68 OF ESCONDIDO, IN THE CITY OF

ESCONDIDO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 336, FfLED TN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 10, 1886.

PARCEL 2:

LOTS 25 AND 26 IN BLOCK 68 OF ESCONDIDO, IN THE CITY OF ESCONDIDO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOf NO. 336 FILED IN THE Off ICE OF THE COUNTY RECORDER OF SAN DIEGO, JULY 10, 1886.

PARCEL 3:

LOTS 27 AND 28 IN BLOCK 68 OF ESCONDIDO, IN THE CITY OF ESCONDIDO, IN THE CITY OF ESCONDIDO, COUNTY OF SAN DIEGO, STATE OF CALffORNIA, ACCORDING TO MAP THEREOF NO. 336, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY tO, 1886.

PARCEL 4:

LOTS 29 THROUGH 33, INCLUSIVE, BLOCK 68 OF ESCONDIDO IN THE CITY OF

ESCONDIDO, COUNTY OF SAN DIEGO, STA TE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 336, FILED lN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY IO, 1886.

APN 229-421-26
19 Attachment "1"
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Item8.

EXHIBIT C

RECORDING REQUESTED BY
And When Recorded Mail To:

City Clerk
City of Escondido
201 North Broadway
Escondido, CA 92025
APN: 229-421-26 No recording fee required; this document exempt from fee pursuant to Section 27383
of the California Government Code.

CITY OF ESCONDIDO

GRANT DEED
ESC. DOCUMENT NO. M-__
This deed exempt from tax - Section 11922 of the California Revenue and Taxation Code
THE CITY OF ESCONDIDO, a municipal corporation, for a
valuable consideration, DOES HEREBY GRANT to
Touchstone MF Fund I, LLC, a Delaware Limited Liability Company all that real property described as follows:

LEGAL DESCRIPTION ATTACHED
IN WITNESS WHEREOF, the City of Escondido has caused this deed to be executed by its Real Property Manager, pursuant to City Council Resolution No. 2018-98, adopted September 19, 2018, authorizing such execution, this ___ day of _______ , 2018.

THE CITY OF ESCONDIDO
By: ________ _
Vince Mccaw
Real Property Manager
20 Attachment "1"
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Item8.

SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This SETTLEMENT AGREEMENT AND MUTUAL RELEASE (“Agreement”) is made and entered into, by and between the City of Escondido, a California municipal corporation (“City”), and TOUCHSTONE MF FUND I, LLC , a Delaware limited liability company (“Touchstone”), individually, a “Party” and collectively, “ Parties.” The Parties hereby agree as follows:

R E C I T A L S
A. On December 10, 2018 , the Parties executed an Agreement of Purchase and Sale and Joint Escrow Instructions (“2018 PSA ”) relating to City-owned real property located at 137 Valley Parkway, Escondido, CA 92025, and having assessor’s parcel number 229-421-26 (“Property”); and
B. On June 2, 2020 , Touchstone filed a Complaint against City entitled Touchstone MF Fund I, LLC v. City of Escondido, et al ., in the Superior Court of the State of California, County of San Diego, Case No. 37-2020-00020856-CU-BC-NC, alleging Breach of Contract and Declaratory Relief in relation to the 2018 PSA . On July 22, 2020, City filed a Cross -Complaint against Touchstone alleging Breach of Contract and Declaratory Relief (collectively the “Underlying Action”); and
C. The Parties have a common interest in resolving their disputes and avoiding further litigation. Without admitting any wrongdoing or fault concerning these matters, the Parties wish to settle their disputes and believe that this Agreement is in their mutual best interests; and D. The Parties intend to fully and completely settle and dispose of the Dispute and Underlying Action between them on the terms and conditions in this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

DEFINITIONS

1. “City” refers to the City of Escondido, a California municipal corporation.

2. “Touchstone” refers to Touchstone MF Fund I, LLC, a Delaware limited liability company.

3. “KB Escondido” refers to KB Escondido, LLC, a California limited liability company , who intends to develop the Property.

4. “PSA” refers to an Agreement of Purchase and Sale and Joint Escrow Instructions between City and Touchstone executed on December 10, 2018.

5. “Property” refers to City-owned real property located at 137 Valley Parkway, Escondido, CA 92025, and having assessor’s parcel number 229-421-26.

Attachment "2"
122
Item8.

6. “Underlying Action” refers to the entire matter titled Touchstone MF Fund I, LLC v. City of Escondido, et al., in the Superior Court of the State of California, County of San Diego, Case No. 37-2020-00020856-CU-BC-NC, including the City’s Cross-Complaint.

7. “Dispute” refers to the Underlying Action , inclusive of all claims, cross -claims, counter- claims and defenses alleged therein, and all past and existing claims, demands, actions , suits, damages, debts, liabilities, obligations, costs and expenses, whether known or unknown, suspected or unsuspected, asserted or not asserted, of any kind or nature whatsoever relating to the PSA, the Property, or any prior agreements between the Parties.

8. “First Amendment to Purchase and Sale Agreement ” refers to an executed agreement between the City and Touchstone that is in substance the same as the unexecuted version of the First Amendment to Purchase and Sale Agreement attached as Exhibit “1” hereto and incorporated herein by reference, with the only differences between Exhibit “1” and the executed version of the same being the dating and signatures necessary to execute the same.

A G R E E M E N T

1. Stay and Dismissal of Underlying Action.

1.1. The Parties agree to file a stipulation with the Court in the Underlying Action to stay the Underlying Action for 31 months from the date of execution of this Agreement.

1.2 At the earlier of (a) the conclusion of the stay in the Underlying Action granted by the Court following the efforts by the Parties described in Paragraph 1.5 below, or (b) the close of escrow pursuant to the PSA as amended by the First Amendment to Purchase and Sale Agreement, or (c) the termination of the PSA as amended by the First A mendment to Purchase and Sale Agreement, Touchstone shall file a dismissal with prejudice of its Complaint and City shall file a dismissal with prejudice of its Cross-Complaint. The Parties intend this provision to mean that in all circumstances the Underlying Action will be dismissed regardless of the outcome of any development application process undertaken by KB Escondido , or any other authorized assignee(s), and that Touchst one, including its successors, affiliates, principals, and managing partners, shall not participate in the development of the Property with KB Escondido or any other authorized assignee.

1.3 The Parties agree that the five -year rule under California Cod e of Civil Procedure section 583.310 is hereby waived and a waiver of the five -year rule shall be filed with the Court in the Underlying Action within 30 days of the Court granting the stay(s) described in this Paragraph.

1.4 The Parties mutually agree to release and waive any litigation costs and attorney’s fees recoverable against the other Party incurred in the Underlying Action.

1.5 The Parties shall submit the Stipulation and Order for the Court to consider in the Underlying Action as attached hereto as Exhibit “2.” If the Court does not grant the Parties a 31- Attachment "2"
123
Item8.
month stay in the Underlying Action, the Parties will jointly stipulate or otherwise move for an 18-month stay of the Underlying Action, unless the Court has, prior to the Parties doing so, communicated to the Parties verbally or in writing that it would not approve any such request for a stay of 18 months or longer . If the Court fails or refuses to grant any stay of the Underlying Action, the Parties agree to meet and confer on a resolution of the Underlying Action consistent with the intent of the Parties provided for herein.

2. This Agreement is contingent upon and is of no effect unless and until the First Amendment to Purchase and Sale Agreement is duly approved and executed.

While this Agreement is of no effect unless and until the First Amendment to Purchase and Sale Agreement is executed, the Parties agree that this Agreement will be signed by all Parties prior to any Party signing the First Amendment to Purchase and Sale Agreement.

3. Mutual Releases and Related Provisions.

3.1 City’s Release . Excluding only the rights and obligations created by this Agreement and agreement identified in Paragraph 2 above, City, on behalf of itself, and to the fullest extent permitted by law fully and unconditionally releases, settles, and forever discharges Touchstone from all claims involved in or arising from or relating to the Dispute, which City now has or may have, or which City at any time in the future may have.

3.2. Touchstone’s Release. Excluding only the rights and obligations created by this Agreement and agreements identified in Paragraph 2 above, Touchstone, on behalf of itself, and to the fu llest extent permitted by law fully and unconditionally releases, settl es, and forever discharges City from all claims involved in or arising from or relating to the Dispute, which Touchstone now has or may have, or which Touchstone at any time in the future may have.

3.3. Section 1542 Waiver . The Parties intend to release all claims arising from or relating to the Underlying Action that the releasing Parties may not know or suspect they have against the Parties being released under the releases in Paragraphs 3.1 and 3 .2 herein. In connection with those releases, the Parti es waive all rights under California Civil Code section 1542 (“Section 1542”), which provides:

A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

Each Party is aware that it may discover claims or facts in addition to or different from those now known or b elieved to be true with respect to any matter. Nevertheless, each Party expressly states its intention to fully, finally, and forever settle all claims arising from or relating to the Dispute that do now exist, may exist, or previously have existed.

Attachment "2"
124
Item8.

The Parties further expressly waive all rights and benefits conferred upon them by any provision of any other law similar to Section 1542 and expressly agree that the releases set forth above shall be given full force and effect, according to the express term s and provisions of this Agreement, as to unknown and unsuspected claims arising from or relating to the Dispute.

4. Essential Terms. The Parties acknowledge that the provisions of Section 3 are essential and material terms of the Agreement, and that without such provisions, the Parties would not have entered into this Agreement.

5. General Provisions.

5.1 Cooperation and Further Assurances. The Parties agree to cooperate in good faith in carrying out their mutual intentions in this Agreement, including, without limitation, executing all further and additional documents as shall be reasonable, convenient, necessary, or desirable to carry out the intent and provisions of this Agreement.

5.2 No Admission. It is understood and agreed that this set tlement is the compromise of disputed claims, and that the terms and conditions recited hereinabove are not to be construed as an admission of liability , or of the merit or lack of merit of any of the disputed claims, on the part of the Parties hereby rele ased, and that said Parties intend merely to avoid litigation . The Parties further agree that this Agreement, inclusive of its exhibits incorporated herein, and all evidence of discussions, negotiations, and unexecuted drafts relating to this Agreement sh all not be admissible as evidence in the Underlying Action or any matters relating to the Dispute, regardless of whether or not the same are or are not covered by California Evidence Code § 1152.

5.3 Entire Agreement. This Agreement, which incorporates th e First Amendment to Purchase and Sale Agreement contains all representations and the entire understanding among the Parties with respect to the subject matter of this Agreement.

5.4 Independent Counsel. Each Party hereby represents and warrants that it has been advised to consult with independent legal counsel of its own choosing and has had a reasonable opportunity to do so prior to executing this Agreement.

5.5 Joint Preparation. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any Party hereto because said Party drafted or caused the Party’s legal representative to draft any of its provisions. This Agreement shall be construed without reference to the identity of the Party or Parties preparing the same, it being expressly understood and agreed that the Parties hereto participated equally or had equal opportunity to participate in the drafting thereof.

5.6 Severability. If any term, covenant, condition , or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction or rendered by the adoption of a statute by the State of California or the United States invalid, void or unenforceable, the remainder of the terms, covenants, conditions, or provisions of this Agreement, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.

Attachment "2"
125
Item8.

5.7 Choice of Law and Venue. This Agreement is executed and intended to be performed in the State of California and the laws of California shall govern its interpretation and effect. The Parties agree that all legal proceedings regarding this Agreement shall only be instituted in the courts of the State of California for San Diego County, North County Division.

5.8 Waiver. The failure of any Party to enforce any term, covenant, or condition of this Agreement on the date it is to be performed shall not be construed as a waiver of that Party’s right to enforce such term, covenant , or condition, or any other term, covenant, or condition of this Agreement. A waiver of any Party’s right to enforce any provision of this Agreement shall not be effective unless such a waiver is made expressly in writing. An express waiver of any one breach shall not be deemed a waiver of any other breach of the same or any other provision of this Agreement.

5.9 No Third-Party Beneficiaries. The Parties do not intend to create any third -party beneficiaries to this Agreement.

5.10 Counterparts. This Agreement may be executed in counterparts and each counterpart when executed shall have the efficacy of a signed original. Delivery of an executed signature page of this Agreement by electronic means, i ncluding an attachment to an email, shall be effective as delivery of an executed original.

5.11 Effective Date. The Effective Date of this Agreement shall be the last date on which each of the following events have occurred: (a) the Escondido City Counc il has approv ed the terms of this Agreement; (b) the Escondido City Attorney has approved this Agreement as to form; (c) a duly authorized representative of each Party has signed this Agreement; and (d) the First Amendment to Purchase and Sale Agreement has been approved by the Escondido City Council and has been executed.

5.12 Headings. The section headings herein are for the convenience of the Parties and are not intended to be used as an aid to interpretation of the terms of this Agreement.

5.13 Authority. Each of the signatories hereto warrants and represents that it is competent and authorized to enter into this Agreement on behalf of the Party for whom it purports to sign, except for any signatures indicating only approval of the Agreement as to form.

5.14 Introduction and Recitals . The introductory sections of this Agreement and the Recitals are hereby incorporated into the Agreement and made part thereof.

5.15 Attorney’s Fees Arising out of Enforcement of Agreement. In the event any action or proceeding is brought to enforce this Agreement, the prevailing Party shall be entitled to the reasonable fees, out -of-pocket expenses, and costs of attorneys and experts against the non - prevailing Party, in addition to all other relief to which that Party may be entitled. Absent such action or proceeding, each Party shall bear its own attorney’s fees and costs in connection with the Underlying Action.

5.16 Notices. Notices required under this Agreement shall be given to the Parties by first-class U.S. Mail and by electronic mail as follows:

Attachment "2"
126
Item8.

City: City Attorney’s Office
Attention: Michael R. McGuinness
201 N. Broadway
Escondido, CA 92025

Touchstone:

TOUCHSTONE MF FUND I, LLC
c/o Touchstone Communities, LLC
Attention: Kerry Garza & Addison Garza
9915 Mira Mesa Blvd., Suite 140
San Diego, CA 92131

5.17 Binding on Successors and Assigns . The terms, covenants and conditions herein shall inure to the benefit of, and be binding upon and enforceable against , the successors and assigns of the Parties.

5.18 No Assignments . Each Party represents and warrants that it has not assigned, transferred, or granted, or purported to assign, transfer, or grant, voluntarily or involuntarily, or by operation of law, any of the claims, demands, or causes of action disposed of or agreed to be disposed of by this Agreement.

5.19 Relationship. Nothing in this Agreement shall be deemed or construed by the Parties or by any third person to create a relationship of principal and agent or fiduciary or partnership or a joint venture between the Parties or between a Party and any third party.

Attachment "2"
127
Item8.

This Agreement is executed by the Parties or their duly authorized representatives:

CITY OF ESCONDIDO

Date: By:
[Name, Title]

TOUCHSTONE MF FUND I, LLC

Date: By:
[Name, Title]

APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY
Michael R. McGuinness, City Attorney

By:

Exhibit 1 –First Amendment to Purchase and Sale Agreement Exhibit 2 –Stipulation to Stay Litigation
Attachment "2"
128
Item8.

Attachment "2"
129
Item8.

Attachment "2"
130
Item8.

Attachment "2"
131
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Attachment "2"
132
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Attachment "2"
133
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Joseph L. Oliva, Esq. (SBN 113889)
Matthew R. Toothacre, Esq. (SBN 330298)
JOSEPH OLIVA & ASSOCIATES, P.C.
11956 Bernardo Plaza Drive #532
San Diego, CA 92128
Phone (858) 304-7400
[email protected]
[email protected]
Attorneys for Plaintiff / Cross-Defendant,

TOUCHSTONE MF FUND I, LLC

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN DIEGO – NORTH COUNTY DIVISION
TOUCHSTONE MF FUND I, LLC, a Delaware
limited liability company;
Plaintiff,
v.

CITY OF ESCONDIDO; and DOES 1 to 100,
inclusive;
Defendant.

Case No. 37-2020-00020856-CU-BC-NC
[Complaint Filed: June 2, 2020]
STIPULATION AND [PROPOSED]

ORDER TO STAY PROCEEDINGS

PENDING SETTLEMENT
Judge: Hon. Blaine K. Bowman
Dept: N-31
Complaint Filed: June 2, 2020
Cross-Complaint Filed: July 22, 2020
Trial Date: Not Set

IMAGED FILE

AND RELATED CROSS-ACTION(S)
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///
///
///
///
///
///
Attachment "2"
134
Item8.

Plaintiff/Cross-Defendant TOUCHSTONE MF FUND I, LLC (“Touchstone”) and Defendant/Cross-Complainant CITY OF ESCONDIDO (“City,” and collectively with Touchstone, the “Parties”), by and through their respective attorneys of record, hereby stipulate as follows:

WHEREAS, on August 11, 2023, the Court stayed the litigation of the above -captioned action to allow the Parties to continue undertaking settlement discussions for a period of six months with a status conference scheduled for February 2, 2024.

WHEREAS, the Parties continued negotiations and have reached a settlement agreement of the above -captioned action (“Action”) which is conditioned on the occurrence of future actions between the Parties and a third -party. Those actions will require a significant and extended amount of time to complete.

WHEREAS, “[t]rial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” ( Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) Moreover, this Court may adopt “any suitable process or mode of proceeding . . . which may appear most comfortable to the spirit of [the California Code of Civil Procedure].” (Cal. Civ. Proc. Code § 187; see also Bailey v. Fosca Oil Co., Ltd. (1963) 216 Cal.App.2d 813, 817 –18 (upholding stay to “insure the orderly administration of justice”).

Should there be any concern regarding the five year rule under California Code of Civil Procedure § 583.310, the Parties have agreed to waive that rule if the stay requested here is granted.

NOW, THEREFORE, the Parties hereby stipulate to stay all proceedings in this Action for a period of 31 months. The Parties propose to take off calendar the status conference scheduled for February 2, 2024 at 9:00 a.m.
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Attachment "2"
135
Item8.

IT IS SO STIPULATED.

Dated: _______________, 2023 JOSEPH OLIVA & ASSOCIATES, P.C.

By:

Joseph L. Oliva, Esq.

Matthew R. Toothacre, Esq.

Attorneys for Plaintiff / Cross-Defendant,

TOUCHSTONE MF FUND I, LLC

Dated: _______________, 2023 OFFICE OF THE CITY ATTORNEY Michael R. McGuinness, City Attorney
Keith Phillips, Assistant City Attorney
By:

Mark P. Bookholder
Deputy City Attorney

Attorneys for Defendant / Cross-
Complainant, CITY OF ESCONDIDO

IT IS SO ORDERED.

Dated: ________________, 2023
Blaine K. Bowman, Judge of the Superior Court

Attachment "2"
136
Item8.

Attachment "3"
137
Item8.

Attachment "3"
138
Item8.

Attachment "3"
139
Item8.

Attachment "3"
140
Item8.

Attachment "3"
141
Item8.

RESOLUTION NO. 2023-164

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ESCONDIDO, CALIFORNIA, AUTHORIZING THE CITY

MANAGER TO EXECUTE, ON BEHALF OF THE CITY, A

SETTLEMENT AGREEMENT AND FIRST AMENDMENT TO

PURCHASE AND SALE AGREEMENT TO SETTLE

LITIGATION OVER A PROJECT AT MUNICIPAL PARKING
LOT 1

WHEREAS, the City of Escondido (“City”) owns Municipal Parking Lot 1 located at 137 Valley Parkway, Escondido, California, 92025, and having San Diego County Assessor’s Parcel Number 229-421- 26 (“Property”); and
WHEREAS, on December 10, 2018, the City and Touchstone MF Fund I, LLC, a Delaware limited liability company (“Touchstone”) (collectively the “Parties”), executed an Agreement of Purchase and Sale and Joint Escrow Instructions (“2018 PSA”) relating to the Property; and WHEREAS, the City processed a development application for a residential project at the Property submitted by Touchstone; and
WHEREAS, on October 9, 2019, the City Council of the City considered the project at a public hearing and denied the project; and
WHEREAS, on June 2, 2020, Touchstone filed a Complaint against City entitled Touchstone MF Fund I, LLC v. City of Escondido, et al., in the Superior Court of the State of California, County of San Diego, Case No. 37-2020-00020856-CU-BC-NC, alleging Breach of Contract and Declaratory Relief in relation to the 2018 PSA. On July 22, 2020, City filed a Cross -Complaint against Touchstone alleging Breach of Contract and Declaratory Relief (collectively referred to as the “Lawsuit”); and 142
Item8.

WHEREAS, the Parties to the Lawsuit have litigated the matter and have a common interest in resolving their disputes and avoiding further litigation. Without admitting any liability, wrongdoing or fault concerning the matters alleged by the Parties in the Lawsuit, the Parties wish to settle their disputes fully and completely as between them and believe that a Settlement Agreement and First Amendment to Purchase and Sale Agreement is in their mutual best interests; and WHEREAS, the Settlement Agreement in a form as attached to this Resolution as Exhibit “A” shall resolve all disputes in the litigation between the Parties and is in the best interests of the City; and WHEREAS, the First Amendment to Purchase and Sale Agreement between the Parties in a form as attached to this Resolution as Exhibit “B” shall further the interests of the City in the settlement of the Lawsuit.

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

1. That the above recitations are true and are incorporated herein.

2. That the City Council authorizes the City Manager to execute the Settlement Agreement attached hereto as Exhibit “A,” the First Amendment to Purchase and Sale Agreement attached hereto as Exhibit “B,” in such final forms as may be approved by the City Attorney and consistent with the purpose and intent of this Resolution , and such other escrow and transactional documents necessary to effect the purpose of this settlement and property sale.

3. That the City admits no liability, wrongdoing , or fault with the actions taken in th is Resolution, alleged in the Lawsuit and execution of Exhibits “A” and “B.” 143
Item8.

4. The City commits to no further future actions with respect to the disposition or development of the Property other than as explicitly provided for in Exhibits “A” and “B.” 144
Item8.

Page 1 of 7 ends

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

DEFINITIONS

1. “City” refers to the City of Escondido, a California municipal corporation.

2. “Touchstone” refers to Touchstone MF Fund I, LLC, a Delaware limited liability company.

3. “KB Escondido” refers to KB Escondido, LLC, a California limited liability company , who intends to develop the Property.

4. “PSA” refers to an Agreement of Purchase and Sale and Joint Escrow Instructions between City and Touchstone executed on December 10, 2018.

5. “Property” refers to City-owned real property located at 137 Valley Parkway, Escondido, CA 92025, and having assessor’s parcel number 229-421-26.

Resoution No. 2023-164
Exhibit "A"

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Item8.

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A G R E E M E N T

1. Stay and Dismissal of Underlying Action.

1.1. The Parties agree to file a stipulation with the Court in the Underlying Action to stay the Underlying Action for 31 months from the date of execution of this Agreement.

1.4 The Parties mutually agree to release and waive any litigation costs and attorney’s fees recoverable against the other Party incurred in the Underlying Action.

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Item8.

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month stay in the Underlying Action, the Parties will jointly stipulate or otherwise move for an 18-month stay of the Underlying Action, unless the Court has, prior to the Parties doing so, communicated to the Parties verbally or in writing that it would not approve any such request for a stay of 18 months or longer . If the Court fails or refuses to grant any stay of the Underlying Action, the Parties agree to meet and confer on a resolution of the Underlying Action consistent with the intent of the Parties provided for herein.

2. This Agreement is contingent upon and is of no effect unless and until the First Amendment to Purchase and Sale Agreement is duly approved and executed.

3. Mutual Releases and Related Provisions.

Resoution No. 2023-164
Exhibit "A"

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5. General Provisions.

Resoution No. 2023-164
Exhibit "A"

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5.9 No Third-Party Beneficiaries. The Parties do not intend to create any third -party beneficiaries to this Agreement.

5.12 Headings. The section headings herein are for the convenience of the Parties and are not intended to be used as an aid to interpretation of the terms of this Agreement.

5.14 Introduction and Recitals . The introductory sections of this Agreement and the Recitals are hereby incorporated into the Agreement and made part thereof.

5.16 Notices. Notices required under this Agreement shall be given to the Parties by first-class U.S. Mail and by electronic mail as follows:

Resoution No. 2023-164
Exhibit "A"

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149
Item8.

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City: City Attorney’s Office
Attention: Michael R. McGuinness
201 N. Broadway
Escondido, CA 92025

Touchstone:

TOUCHSTONE MF FUND I, LLC
c/o Touchstone Communities, LLC
Attention: Kerry Garza & Addison Garza
9915 Mira Mesa Blvd., Suite 140
San Diego, CA 92131

Resoution No. 2023-164
Exhibit "A"

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Item8.

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This Agreement is executed by the Parties or their duly authorized representatives:

CITY OF ESCONDIDO

Date: By:
[Name, Title]

TOUCHSTONE MF FUND I, LLC

Date: By:
[Name, Title]

APPROVED AS TO FORM:

OFFICE OF THE CITY ATTORNEY
Michael R. McGuinness, City Attorney

By:

Exhibit 1 –First Amendment to Purchase and Sale Agreement Exhibit 2 –Stipulation to Stay Litigation
Resoution No. 2023-164
Exhibit "A"

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151
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Exhibit "1"
Resoution No. 2023-164
Exhibit "A"

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152
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Exhibit "1"
Resoution No. 2023-164
Exhibit "A"

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153
Item8.

Exhibit "1"
Resoution No. 2023-164
Exhibit "A"

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154
Item8.

Exhibit "1"
Resoution No. 2023-164
Exhibit "A"

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155
Item8.

Exhibit "1"
Resoution No. 2023-164
Exhibit "A"

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156
Item8.

TOUCHSTONE MF FUND I, LLC

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN DIEGO – NORTH COUNTY DIVISION
TOUCHSTONE MF FUND I, LLC, a Delaware
limited liability company;
Plaintiff,
v.

CITY OF ESCONDIDO; and DOES 1 to 100,
inclusive;
Defendant.

Case No. 37-2020-00020856-CU-BC-NC
[Complaint Filed: June 2, 2020]
STIPULATION AND [PROPOSED]

ORDER TO STAY PROCEEDINGS

PENDING SETTLEMENT
Judge: Hon. Blaine K. Bowman
Dept: N-31
Complaint Filed: June 2, 2020
Cross-Complaint Filed: July 22, 2020
Trial Date: Not Set

IMAGED FILE

AND RELATED CROSS-ACTION(S)
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///
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///
///
///
///
///
///
Exhibit "2"
Resoution No. 2023-164
Exhibit "A"

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Should there be any concern regarding the five year rule under California Code of Civil Procedure § 583.310, the Parties have agreed to waive that rule if the stay requested here is granted.

Page 14 of 15 ends

Escondido City CouncilDecember 13, 2023

Escondido City Council
December 13, 2023