Agenda packet — Fontana City Council, June 14, 2022 (part 2 of 4)

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City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1397 Agenda Date: 6/14/2022
Agenda #: P. Category: Consent Calendar
FROM:

Community Services
SUBJECT:

Co-Sponsorship Application Cycle (1) FY 2022/2023
RECOMMENDATION:

Review and approve (13) Co-Sponsorships recommended for the first half of 2022/2023 fiscal year (July 2022 through June 2023) totaling an amount of $24,498.00 as recommended by Parks, Community, and Human Services Commission.

COUNCIL GOALS:
· To operate in a businesslike manner by becoming more service oriented. · To increase citizen involvement by promoting healthy lifestyle opportunities to Fontana residents of all ages.

DISCUSSION:

Current Co-Sponsorship procedure, as approved by the Parks, Community and Human Services Commission and City Council, requires organizations to submit all Co-Sponsorship requests for activities taking place during the next fiscal year be submitted between February 1-February 28 (cycle one) or between September 1-September 30 (cycle two).

All organizations in consideration for Co-Sponsorship must meet all Co-Sponsorship criteria (Attachment A - Co-Sponsorship Policy) which includes proof of non-profit status (501 c3) or proof that the event is not for profit. Organization must be based in the incorporated boundaries of the City of Fontana. Event must benefit and be open to Fontana residents and organization must adhere to Co-Sponsorship tier rating. A brief description of individual applications is provided (Attachment B - Co-Sponsorship Application Descriptions).

Thirteen (13) eligible applications were received during the February 2022 requested period, (11) requesting assistance with community events and (2) facility use requests. (Attachment C - organizations applying for Co-Sponsorship and Attachment D - Co-Sponsorship in-kind cost breakdown).

Tier Levels:

Tier One:

Organization provides minimum of eighty percent (80%) of program resources and funding.

Tier Two:

Organization provides minimum of seventy percent (70%) of program resources and funding.

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File #: 21-1397 Agenda Date: 6/14/2022
Agenda #: P. Category: Consent Calendar
Tier Three:

Organization provides minimum of fifty percent (50%) of program resources and funding.

Although all organization requesting funding must provide a minimum of fifty percent (50%) of program funding, tier funding levels are not applicable to organizations requesting the use of facilities during regular center hours.

Funding for Co-Sponsorships in the amount of $37,500 was included in the 2022/2023 Council approved fiscal year budget. Requested funding during the February application period totaled $24,498.00, which provides a balance of funding allocation of $13,002.00 for the remainder of FY 2022/2023 operating budget.

All applications were discussed and reviewed at the regular Parks, Community, and Human Services Commission meeting on April 28, 2022. The Commission individually reviewed the thirteen (13) applications and approved the recommendation for Co-Sponsorship requests be forwarded for City Council to review and consider.

After review of the applications, the Commission had consensus to recommend thirteen (13) events for full funding of in-kind services.

FISCAL IMPACT:

Funding for Co-Sponsorships in the amount of $37,500 was included in the 2022/2023 Council approved fiscal year budget. Requested funding during the February application period totaled $24,498.00 which provides an available balance of funding allocation in the amount of $13,002.00.

MOTION:

Approve Parks, Community, and Human Services Commission recommendation.

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Attachment A

New Section Distribution: All Employees
File in City Administrative Manual

City of Fontana

POLICY AND PROCEDURES

Subject:

POLICY TITLE
Co-Sponsorship of Events
Page
1 of 5
Section
20-58
Effective Date
7-1-06
Issued Date
6-13-06

Resolution Number:

Approval Date:

I. PURPOSE

To establish guidelines for the City co-sponsorship of Fontana based events and/or programs.

II. GENERAL POLICY

The City of Fontana allocates certain funds annually for the purposes of assisting non -profit Fontana-based organizations hosting community events. The City does not provide funds for these co-sponsored events, but in kind services. The City shall develop co -sponsorship criteria to prioritize and select co -sponsorship applicants on a biannual basis and to effectively distribute finite budgetary allocations based on classifications and ratings of applicants.

III. DEFINITION

City Co-sponsored Event means an event that is planned and conducted by a Fontana-based non-profit organization that meets the criteria for co-sponsorship and the City participates by contributing staff time, public safety services, equipment use, and/or the use of facilities.

IV. PROVISIONS

1. An organization may fall into the following categories within the co-sponsorship criteria:

A. Classification 1:

A group demonstrating a clear, broad based community benefit demonstrated through the application process.

B. Classification 2:

A group demonstrating a clear community benefit targeted toward a specific segment of the community demonstrating an identified need.

2. An organization may apply for co-sponsorship in one of the following three co-sponsorship tier ratings.

A. Tier #1

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City of Fontana

POLICY AND PROCEDURES

Subject:

Co-Sponsorship of Events Page
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Section
20-58

Effective Date
7-1-06
Issued Date
6-13-06

New Section Distribution: All Employees
File in City Administrative Manual

Organization provides a minimum of eighty percent of program resources and funding.

B. Tier #2

Organization provides a minimum of seventy percent of program resources and funding.

C. Tier #3

Organization provides minimum of fifty percent of program resources and funding.

NOTE: An organization must provide a minimum of fifty percent of the program’s resources (i.e. funding, equipment, advertisement) to be eligible to apply for co-sponsorship with the City.

3. The tier rating is based on the total amount of resources the organization allocates to the event.

4. Co-sponsorship applications will be accepted February 1 through February 28 for co- sponsorship of events taking place during the following July 1 through June 30 period. A second application review process will be offered for events that are identified after the February application deadline. The second round of applications will be accepted September 1 through September 30 for events taking place January 1 through June 30 of the same fiscal planning year.

5. The City will rate each application according to the established criteria and will provide co- sponsorship support based upon the available funding resources.

6. Community Services Department staff will review all requests for co-sponsorship to ensure the organization meets the above criteria.

7. Requests for co-sponsorship will be classified by their overall benefit to the community and will be ranked by tier rating prior to being sent to the Parks and Recreation Commission and City Council for consideration.

8. Organizations will be funded based upon classification and priority of ranking until budgeted co-sponsorship funds have been fully allocated.

V. CO-SPONSORSHIP RATING CRITERIA

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POLICY AND PROCEDURES

Subject:

Co-Sponsorship of Events Page
3 of 5
Section
20-58

Effective Date
7-1-06
Issued Date
6-13-06

New Section Distribution: All Employees
File in City Administrative Manual

1. The applicant’s event must be a benefit to the Fontana community. One or several of the following would qualify a proposed event for consideration by the Parks and Recreation Commission and staff for City co-sponsorship:

A. The event responds to an identified community need. (These are needs that have been either ratified or initiated by the City Council.)

B. The event enhances current department programming efforts. (A local organization is willing to fund and operate a current Special Event or organize an Adult Sports program that provides recreation opportunities to local residents.)

C. The event provides a unique leisure or community service opportunity for either the community at large or for a targeted group. (A local group that wants to organize an event that the staff, Parks and Recreation Commission and/or City Council believes benefits the community.)

D. The event raises funding for either Community Services Department programs or for services that benefit either the community at large or for a targeted group.

2. Application must show proof of 501 (c) 3 non-profit status or group must demonstrate the event is not for profit.

3. Applicant must be based in the incorporated boundaries of the City of Fontana.

4. When applicable, the applicant must have a valid charitable solicitation permit on file with the Management Services Department.

5. Applicant’s event must be open to all Fontana residents.

6. The applicant must qualify within Tier #1, Tier #2, or Tier #3 based on overall resources allocated.

7. The applicant must complete and submit the Co-Sponsorship Application and budget form along with a Special Event Application to the Community Services Department during one of the two identified application filing periods.

VI. ASSESSMENT CRITERA
Assessment(s) will be conducted at the conclusion of the event/activity to determine how well the objectives of the event/activity were met. Total attendance, activities offered, and overall benefit to the community will be reported on. Assessments will be conducted by:

1. Self Assessment
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City of Fontana

POLICY AND PROCEDURES

Subject:

Co-Sponsorship of Events Page
4 of 5
Section
20-58

Effective Date
7-1-06
Issued Date
6-13-06

New Section Distribution: All Employees
File in City Administrative Manual

A self assessment form will be provided to the applicant for the purpose of reporting on the outcome of the event.

2. Parks and Recreation Commission Assessment
When possible, one or more Parks and Recreation Commissioners will attend events to observe and provide feedback to the entire Parks and Recreation Commission.

3. Community Services Department Assessment
When applicable, a Community Services Department employee will be assigned to attend the event and provide feedback to both the applicant and the Parks and Recreation Commission.

VII. PROCEDURES

1. Complete the Co-sponsorship of Event Application and budget form in addition to a Special Event Application.

2. Submit application in February or September of each year to:

Co-Sponsorship Events
Community Services Department
16860 Valencia Avenue
Fontana, CA 92335

3. Upon receipt of applications, Community Services Department staff will verify eligibility, determine classification and assign tier rating.

4. Staff liaison shall place the request for co-sponsorship on the Parks and Recreation Commission agenda for review and consideration.

5. Staff liaison shall notify the applicant request co-sponsorship of the date, time, and location of the Parks and Recreation Commission meeting at which the request will be considered.

6. The request for co-sponsorship will be reviewed and either approved or denied by the Parks and Recreation Commission and then by the City Council.

A. If the request is approved by the Parks and Recreation Commission, staff will forward the request to City Council for consideration as part of the annual Budget Adoption Process or Mid-year Review of Budget Allocations.

i. Organizations that receive approval must recognize support of the City of Fontana as a co-sponsorship of the event or activity. All publicity and marketing for the event or activity must include the approved City of Fontana logo.

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Subject:

Co-Sponsorship of Events Page
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Section
20-58

Effective Date
7-1-06
Issued Date
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File in City Administrative Manual

ii. If the request is approved by the City Council, the staff liaison will notify the applicant and appropriate departments in writing within seven days of the City Council’s action.

B. If the request is denied staff will notify the applicant in writing.

i. Appeal process: In the event the request is denied, the applicant may appeal the Park and Recreation Commission’s decision in writing, care of the Community Services Director at 16860 Valencia Avenue, Fontana, CA 92335 within seven business days of decision.

7. If applying for use of a facility, a Request for Use of Facility must be completed in addition to the Co-sponsorship of Events Application and Special Event Application.

8. The Community Services Director, or designee, can approve a co-sponsorship request for use of a City facility if the requested date and time does not impact facility rentals and/or programs AND which do not exceed $5,000 cumulatively, annually.

9. An applicant approved for co-sponsorship of facility use from the City that does not provide (30) days notice of cancellation of said event to the City will be charged a Class 3 facility rental fee according to the Facility Rental Policy.

10. After the conclusion of the co-sponsored event or activity, the approved Post Event/Activity Assessment will be conducted to determine the benefit to the community.

Note: Parks & Community Services Commission meetings are held on the fourth Thursday of the month. The City Council meetings are held on the second and fourth Tuesday of the month. 360
*Events in RED are new events
2022/2023 Co-Sponsorship Descriptions Attachment B
Event Information Description 2021/2022 Evaluation
CityLink & Water of Life 2021: attendance 500
Back 2 School Bash
July 23, 2022 | 10am-2pm
Jack Bulik Pavilion
Estimated Attendance: 500
Fontana Boxing Club 2021: No event
Ring of Champs
August 20, 2022 | 6:30am-6pm
Jessie Turner Gym
Estimated Attendance: 400
3 Working Dogs for Warriors 2021: attendance 200
A Sound Mind
August 20, 2022 | 9am-1pm
Veterans Park
Estimated Attendance: 600
Concerned Citizens for N. Fontana 2021: attendance 300
Chill-n-Grill BBQ Cook-Off
September 10, 2022 | 10am-3pm
Fontana Park Pavilion
Estimated Attendance: 500
Hayes Events NEW EVENT
Business Community Marketplace
September 24, 2022 | 11am-6pm
Jack Bulik Pavilion
Estimated Attendance: 300
CityLink & Water of Life 2021: attendance 75
CAP Appreciation Celebration
October 7, 2022 | 7pm-9pm
Fontana Community Senior Center
Estimated Attendance: 125
7 Water of Life Community Church 2021: attendance 10,000 Trunk or Treat
October 31, 2022 | 5pm-9pm
Water of Life Community Church
Estimated Attendance: 15,000+
Well organized grilling event bringing PD and Fire
together with the community.

Well organized recognition event for CAP
volunteers
Event takes place on private property.

Combined event with CAP Resource Fair. Well
attended and organized event.

Event took place for the first time in 2019. Well
organized and attended. Hosting organization did
expand event outside of gymnasium for food area.

Directional/informational signage from hosting
6 Mental health awareness resource fair.

Annual trunk or treat every fall to provide a safe
and fun place for families of the surrounding
Fontana community to attend on Halloween.

An annual celebration to recognize the numerous
volunteers that serve with CAP and CityLink
throughout the year. Event will include dinner,
entertainment and presentations of certificates.
1 Community outreach to provide backpacks and
school supplies to students grades K-8 as well as a
resource fair with information for community
members of all ages. Snacks and family friendly
activities and performances will also be included.

Amateur boxing show.

Community grilling competition among first
responders.

An event to bring community businesses together
and reunite at the end of a pandemic to network,
gain exposure and have fun in an outdoor setting.
2 4
5 361
*Events in RED are new events
2022/2023 Co-Sponsorship Descriptions Attachment B
Hayes Events 2021: attendance 65
Taste of the Holidays-Sunday Brunch
November 6, 2022 | 2pm-7pm
Fontana Community Senior Center
Estimated Attendance: 200
Fontana Aquatics Club 2021: attendance 1,500
Veterans Day Classic Swim Meet
November 11-13, 2022
Fontana Park Aquatics Center
Estimated Attendance: 2,000
Project Boon 2021: attendance 3,000
Eat & Be Well
November 23, 2022 | 11am-3pm
Central City Parking Lot
Estimated Attendance: 1,500
Miss Fontana Organization 2021: virtual event due to Covid-19 Miss Fontana Pageant
March - June 2023
Center Stage, Steelworkers' Auditorium, FCSC & JT
Estimated Attendance: 200
AARP 2021: no in-person meetings due to Covid-19
Bi-Monthly Meetings
2nd & 4th Monday of the month
Cypress Center
Estimated Attendance: 30-40
Department of Veterans Affairs NEW EVENT
Counseling of Combat Veterans Meeting
(2) Thursday's monthly
Fontana Community Senior Center
Estimated Attendance: 6-8
Well organized event that ran on schedule.

Event was able to grow due to new location. Huge
turnout. Very well organized.

Reoccurring meetings. Never posed any issues.
13 Counseling meeting for combat veterans within
Fontana.
9 11
12 10 Pre Thanksgiving celebration and resource fair
providing food and services for those in need.

Three day swim meet hosting teams from all over
San Bernardino County.

Rehearsals and photoshoot for Miss Fontana
Scholarship Pageant
Bi-monthly chapter meetings
8 Food tasting from local caterers and restaurants to
showcase their best holiday foods.
362
*Events in RED are new events
2022/2023 Co-Sponsorships
Organizations Applying for Event Co-Sponsorship
Attachment C
Item
# Organization Event Event Budget Value of In-Kind
City Support Tier Level
1 CityLink & Water of Life Back to School Bash $18,320 $1,876 Tier 1 2 Fontana Boxing Club Ring of Champs $2,832
3 Working Dogs for
Warriors
A Sound Mind Health &
Wellness Resource Fair $5,010 $1,026 Tier 2
4 Concerned Citizens for
the Development of
North Fontana Chill-n-Grill BBQ Cook-off $4,900 $2,240 Tier 3 5 Hayes Events
Business Community
Marketplace $5,250 $1,700 Tier 2
6 CityLink & Water of Life CAP Appreciation Celebration $3,300 $160 Tier 1 7 Water of Life
Community Church Trunk or Treat $43,258 $6,700 Tier 1
8 Hayes Events Taste of the Holidays $3,750 $256
9 Fontana Aquatics Club Veterans Day Classic $11,000 $3,552 Tier 2 10 Project Boon Eat & Be Well $33,000 $2,080 Tier 1
11 Miss Fontana
Organization Miss Fontana Pageant $66,652 $2,076 Tier 1 1F AARP AARP Luncheon Meetings
2nd & 4th
Monday of each
month
8am-12:30pm
Cypress
Neighborhood
Center
2F
Department of Veteran
Affairs
Counseling Combat Veterans
Affairs
(2) Thurs each
month
10am-11:30am
Fontana
Community
Senior Center
TOTAL: $24,498
Facility
363
*Events in RED are new events
2022/2023 Co-Sponsorship
Cost Breakdown
Attachment D
# Organization Events Date & Time Location Requested Support City Support July 23, 2022 Veterans Park
10am-2pm (6) Public Works (Parks) $55p/h x 6 x 4hrs = $1,320 (1) Public Works (Streets) $55p/h x 4hrs = $220
(2) KFON $16p/h x 2 x 5.5hrs = $176
(2) CSD Staff (Events) $16p/h x2 x 5hrs = $160
$1,876.00
August 20, 2022 Jessie Turner Gym (3 days)
6:30am-6pm (2) Public Works (Facilities) $55 x 2 x 22hrs = $2,420 Public Works (Streets) $55p/h x 4hrs = $220
(2) CSD Staff (Events) $16p/h x 2 x 6hrs = $192
$2,832.00
August 20, 2022 Veterans Park
9am-1pm (2) Public Works (Parks) $55p/h x 2 x 5hrs = $550 Public Works (Streets) $55p/h x 4hrs = $220
(2) CSD Staff (Events) $16p/h x 2 x 8hrs = $256
$1,026.00
September 10, 2022
10am-3pm
Fontana Park Sports Pavilion (Fri
& Sat)
(7) Public Works (Parks) $55p/h x 7 x 4hrs = $ $1,540
Public Works (Streets) $55p/h x 4hrs = $220
(2) KFON $16p/h x 2 x 6hr = $192
(2) CSD Staff (Events) $16p/h x 2 x 9hrs = $288
$2,240.00
September 24, 2022 Jack Bulik Pavilion
10am-3pm (4) Public Works (Parks) $55p/h x 4 x 6hrs = $1,320 Public Works (Streets) $55p/h x 4 hrs = $220
(2) CSD Staff (Events) $16p/h x 2 x 5hrs = $160
$1,700.00
October 7, 2022
7pm-9pm FCSC Multi Purpose Room
(1) CSD Staff (Events) $16p/h x 2 = $32
(2) CSD Staff (Facilities) $16p/h x 2 x 4hrs = $128
$160.00
October 31, 2022 Fontana PD for traffic control $90p/h x 6 x 6hrs = $3,240 5pm-9pm (4) Public Works (Streets) $55p/h x 4 x 6hrs = $1,320 (6) Public Works (Parks) $55p/h x 6 x 6hrs = $1,980
(2) CSD Staff (Events) $16p/h x 2 x 5hrs = $160
$6,700.00
1 CityLink & Water of Life Back to School Bash Jack Bulik Pavilion 3 Veterans Park
Ring of ChampsFontana Boxing Club Jessie Turner
Gymnasium
2 A Sound MindWorking Dogs for Warriors
Concerned Citizens for the
Development of North Fontana
Chill-n-Grill BBQ Cook-
Off
Fontana Park Pavilion4
Fontana Park PavilionBusiness Community
Marketplace
Hayes Events5
Fontana Community
Senior Center
CAP Appreciation
Celebration
CityLink & Water of Life6
7 Water of Life Community Church Trunk of Treat Water of Life Community Church
364
*Events in RED are new events
2022/2023 Co-Sponsorship
Cost Breakdown
Attachment D
November 6, 2022 FCSC Multi Purpose Room
2pm-7pm (2) CSD Staff (Facilities) $16p/h x 2 x 8hrs = $256 $256.00
November 11-13, 2022 Use of FPAC
(4) Public Works (Parks) $55p/h x 4 x 8hrs = $1,760
(6) CSD Staff (Lifeguards) $16p/h x 6 x 18hrs = $1,728
(2) CSD Staff (Events) $16p/h x 2 x 2hrs = $64
$3,552.00
November 23, 2022 Use of Cypress Center
11am-3pm (4) Public Works (Parks) $55p/h x 4 x 7hrs = $1,540 (1) Public Works (Streets) $55p/h x 4 = $220
(2) CSD Staff (Cypress) $16p/h x 2 x 7hrs = $224
(2) CSD Staff (Events) $16p/h x 2 x 3hrs = $96
$2,080.00
March-June 2023
Use of Center Stage or Steelworkers'
Auditorium for rehearsals
(1) Public Works (Streets) $55p/h x 4 = $220
(2) CSD Staff (Facilities)
$16p/h x 2 x 7hrs x 8 rehearsals =
$1,792
(2) CSD Staff (Events) $16p/h x 2 x 2hrs = $64
$2,076.00
$24,498.00
Use of banquet room, storage
room, kitchen & kitchen storage
$0
2F Department of Veterans Affairs Counseling of Combat
Veterans Meeting
(2) times per work Fontana Community
Senior Center
Use of meeting room for 6-8
participants
$0
$0
1F AARP AARP Luncheon
Meetings
2nd & 4th Monday of
each month
Cypress Neighborhood
Center
Fontana Community
Senior Center
Taste of the Holidays-
Sunday Brunch
Hayes Events8
Fontana Park Aquatics
Club
Veterans Day Classic
Swim Meet
Fontana Aquatics Club9
10 Project Boon Eat & Be Well Central City Parking Lot
Center Stage,
Steelworkers
Auditorium, FCSC & JT
Miss Fontana PageantMiss Fontana Organization11
365
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1429 Agenda Date: 6/14/2022
Agenda #: Q. Category: Consent Calendar
FROM:

City Clerk
SUBJECT:

Calling of the November 8, 2022, General Municipal Election; Requesting Consolidation with the Statewide General Election to be conducted by the San Bernardino County Registrar of Voters; and Providing Regulations for Candidates
RECOMMENDATION:

1. Adopt Resolution No. 2022-038, a Resolution of the City Council of the City of Fontana, California, Calling And Giving Notice of a General Municipal Election to be held in the City of Fontana on Tuesday, November 8, 2022, for the Election of Certain Officers of the City as Required By the Provisions of the Laws of The State of California Relating To General Law Cities;

2. Adopt Resolution No. 2022-039, a Resolution of the City Council of the City of Fontana, California, Requesting the Board of Supervisors of the County of San Bernardino to Consolidate a General Municipal Election to be held on November 8, 2022, with the Statewide Primary Election to be held on the date Pursuant To § 10403 of the Elections Code;

3. Adopt Resolution No. 2022-040, a Resolution of the City Council of the City of Fontana, California, Adopting Regulations for Candidates for Elective Office Pertaining to Candidates Statements Submitted to the Voters at a General Municipal Election to be held on Tuesday, November 8, 2022.

COUNCIL GOALS:
· To concentrate on inter-governmental relations by working cooperatively with neighboring jurisdictions.
· To concentrate on inter-governmental relations by establishing partnerships and positive working relationships with other public agencies providing services to residents. · To increase citizen involvement by seeking community input.

DISCUSSION:

In order to meet the requirements of the California Elections Code, now is the appropriate time for the City Council to call the General Municipal Election for November 8, 2022, to elect Mayor, two City Council members (One Council Member for each District: District 1 and District 4), City Clerk, and City Treasurer, as terms for these positions expire in December 2022, and to request the San Bernardino County Board of Supervisors to consolidate the City’sGeneral Municipal Election with the Gubernatorial General Election.

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File #: 21-1429 Agenda Date: 6/14/2022
Agenda #: Q. Category: Consent Calendar
Before holding an election, the City Council must adopt three resolutions:

1. The first resolution calls and gives notice of the election and requests the San Bernardino County Registrar of Voters to conduct the election and canvass the results;

2. The second resolution request the San Bernardino County Board of Supervisors to consent to consolidation of the Statewide General Election being held on the same day, and

3. The third resolution adopts regulations for the candidates’ statements.

The nomination filing period is from July 18 through August 12, 2022. If an eligible incumbent does not file, a five-day extension will permit filing until Wednesday, August 17, 2022, at 5:00 p.m., for that seat only. The filing fee for candidates is $25.00. Candidates will also provide a deposit for costs associated with printing a candidate statement (200 words or less) in the sample ballot, should they choose to provide one.

To help better acquaint the candidate to the process and City operations, on Monday, June 27, 2022, at 6:00 p.m., in the Grover W. Taylor Council Chambers, the City Clerk’sOffice will be hosting a pre- nomination period orientation. The intent of this session is to provide potential candidates with an overview of the election process and an idea of what it entails to run for an elected City seat.

Members of the public who are not interested in running for public office but would like to know more about the election process, are welcome to attend as well.

As for the election, the Registrar will administer, manage and oversee the operational portion of the City’selection, including the voting processes, ballot counting and canvass of the votes, which will take place at the Registrar’soffice. The Deputy City Clerk will continue to serve as the Elections Official, manage the candidates, nomination filing process, Fair Political Practices Commission (FPPC) filings, creating/publishing official election notices relating to calling an election and nominations, and serve as the liaison between the City and Registrar.

Note that the election on November 8, 2022, coincides with the regularly scheduled City Council Meeting. Options for holding the regular meeting as scheduled, cancelling the meeting, or rescheduling will be considered at a later date.

FISCAL IMPACT:

The estimated cost for an election is based on the number of registered voters. Once the election is conducted, the County Registrar of Voters’will submit the actual costs associated with the election, which could come in higher or even lower than the estimated costs. Staff has budgeted $120,000.00 in the Fiscal Year 2021/22 Proposed Operating Budget in account #10122000-8130.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2022-038

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA, CALIFO RNIA, CALLING FOR THE HOLDING

OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON
TUESDAY, NOVEMBER 8, 2022, FOR THE ELECTION OF

CERTAIN OFFICERS AS REQUIRED BY THE

PROVISIONS OF THE LAWS OF THE STATE OF

CALIFORNIA RELATING TO GENERAL LAW CITIES

RECITALS
WHEREAS, under the provisions of the laws re lating to general law cities in the State of California, a General Municipal Election shall be held on November 8, 2022, for the election of Municipal Officers; and

NOW, THEREFORE, THE CITY COUNCIL OF TH E CITY OF FONTANA,

CALIFORNIA, DOES RESO LVE, DECLARE, DETE RMINE AND ORDER AS FOLLOWS:

SECTION 1. That pursuant to the require ments of the laws of the State of California relating to General Law Cities, there is called and ordered to be held in the City of Fontana, California, on Tuesday, November 8, 2022, a General Municipal Election for the purpose of electing a Mayor, two Members of the City Council (District 1 and District 4), a City Clerk, and a City Treasurer for the full term of four years.

SECTION 2. That the ballots to be used at the election shall be in form and content as required by law.

SECTION 3. That the Deputy City Clerk is authorized, instructed, and directed to coordinate with the County of San Bernardino to procure and furnish any and all official ballots, notices, printed matter and all supp lies, equipment and par aphernalia that may be necessary in order to properly and lawfully conduct the election.

SECTION 4. That in all particulars not recited in this resolution, the election shall be held and conducted as provided by law for holding municipal elections.

SECTION 5. That notice of the time and place of holding the election is given and the Deputy City Clerk is authoriz ed, instructed, and directed to give further or additional notice of the election, in time, form and manner as required by law.

SECTION 6. That the Deputy City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. 368
SECTION 7. The City Council authorizes the Deputy City Clerk to administer said election and all reasonable and actual electi on expenses shall be paid by the City upon presentation of a properly submitted bill.

PASSED, APPROVED AND ADOPTED on this 14th day of June 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
369
I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex- Officio Clerk of the City Council do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City Council at a regular meeting thereof, held on the 14th day of June 2022, by the following vote to-wit:

AYES:

NOE
S:

ABSENT:

ABSTAIN:

Germaine McClellan Key
City Clerk of the C
ity of Fontana
Acquanetta Warren
Mayor of the City of F
ontana
ATTEST:

Germaine McClellan Key
City Clerk of the C
ity of Fontana
370
RESOLUTION NO. 2022-039

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA, CALIFORNIA, REQUESTING THE BOARD OF

SUPERVISORS OF THE COUNTY OF SAN BERNARDINO

TO CONSOLIDATE A GENERA L MUNICIPAL ELECTION
TO BE HELD ON NOVEMBER 8, 2022, WITH THE

STATEWIDE PRIMARY ELECTION TO BE HELD ON THE
DATE PURSUANT TO § 10403 OF THE ELECTIONS CODE
RECITALS:

WHEREAS, the City Council of the City of Fontana called a General Municipal Election to be held on November 8, 2022, for the purpose of the election of a Mayor, two Members of the City Council (District 1 and District 4), a City Clerk, and a City Treasurer; and
WHEREAS, it is desirable that the General Municipal Election be consolidated with the Statewide Primary election to be held on the same date and that within the city the precincts, polling places and election officers of the two elections be the same, and that the county election department of the County of San Bernardino canvass the returns of the General Municipal Election and that the election be held in all respects as if there were only one election;

NOW, THEREFORE, THE CITY COUN CIL OF THE CITY OF FONTANA, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. That pursuant to the requirements of § 10403 of the Elections Code, the Board of Supervisors of the County of San Bernardino is hereby requested to consent and agree to the consolidation of a General Municipal Election with the Statewide Primary election on Tuesday, November 8, 2022, for t he purpose of the election of a Mayor, two Members of the City Council (District 1 and District 4), a City Clerk, and a City Treasurer.

SECTION 2. That the county election dep artment is authorized to canvass the returns of the General Municipal Election. The election shall be held in all respects as if there were only one election, and only one form of ballot shall be used. The election will be held and conducted in accordance with the provisions of law regulating the statewide or special election.

SECTION 3. That the Board of Supervisors is requested to issue instructions to the county election department to take any and all steps necessary for the holding of the consolidated election.

SECTION 4. That the City of Fontana recognizes that additional costs will be incurred by the County by r eason of this consolidation and agrees to reimburse the County for any costs.

SECTION 5. That the Deputy City Clerk is he reby directed to file a certified copy of this resolution with the Board of Supervisors and the county election department of the County of San Bernardino.

SECTION 6. That the Deputy City Clerk shall certify to the pa ssage and adoption of this resolution and enter it into the book of original resolutions. 371

PASSED, APPROVED AND ADOPTED on this 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
372

I, Germaine McClellan Key, City Clerk of th e City of Fontana, Ca lifornia, and Ex- Officio Clerk of the City Council do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City Council at a regul ar meeting thereof, held on the 14th day of June 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Germaine McClellan Key
City Clerk of the City of Fontana

Acquanetta Warren
Mayor of the City of Fontana

ATTEST:

Germaine McClellan Key
City Clerk of the City of Fontana

373
RESOLUTION NO. 2022-040

A RESOLUTION OF THE CITY COUNCI L OF THE CITY OF FONTANA,

CALIFORNIA, ADOPTING REGU LATIONS FOR CA NDIDATES FOR

ELECTIVE OFFICE PERTAINING TO CANDIDATES STATEMENTS

SUBMITTED TO THE VOTERS AT A GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 8, 2022
RECITALS:

WHEREAS, §13307 of the Elections Code of the St ate of California provides that the governing body of any local agency adopt regulations pertaining to materials prepared by any candidate for a municipal election, including costs of the candidates statement;

NOW, THEREFORE, THE CITY COUNC IL OF THE CITY OF FONTANA,

CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:

SECTION 1. GENERAL PROVISIONS. That pursuant to §13307 of the Elections Code of the State of California, each candidate fo r elective office to be voted for at an Election to be held in the City of Font ana on November 8, 2022, may prepare a candidate’s statement on an appropriate fo rm provided by the Deputy City Clerk. The statement may include the name, age and o ccupation of the candidate and a brief description of no more than 200 words of t he candidate’s education and qualifications expressed by the candidate himself or herse lf. The statement shall not include party affiliation of the candidate, nor membership or activity in partisan political organizations.

The statement shall be filed [in typewritten form] in the Office of the City Clerk at the time the candidate’s nomination papers are filed. The statement may be withdrawn, but not changed, during the period for filing nominat ion papers and until 5:00 p.m. of the next working day after the close of the nomination period.

SECTION 2. FOREIGN LANGUAGE POLICY.

A. Pursuant to the Federal Voting Ri ghts Act, candidates statements will be translated into all languages required by the County of San Bernadino. The County is required to translate candidate’s statements into the following languages: Spanish.

B. The County will mail separate vote r information guides and candidates statements in qualified languages to only those voters who are on the county voter file as having requested a voter information guide in a particular language. The County will make the voter information guides and candidates statements in the r equired languages available at all polling places, on the County’s website, and in the Election Official’s office. 374

SECTION 3. PAYMENT.

A. Translations:

1. The candidate shall be required to pay for the cost of translating the candidates statement into any required foreign language as specified in (A) and/or (B) of Section 2 above pursuant to Federal and\or State law.

2. The candidate shall be required to pay for the cost of translating the candidates statement into any forei gn language that is not required as specified in (A) and/or (B) of Section 2 above, pursuant to Federal and\or State law, but is requested as an option by the candidate.

B. Printing:

1. The candidate shall be required to pay for the cost of printing the candidates statement in English in the main voter pamphlet.

2. The candidate shall be required to pay for the cost of printing the candidates statement in a foreign l anguage required in (A) of Section 2 above, in the main voter pamphlet.

3. The candidate shall be required to pay for the cost of printing the candidates statement in a foreign language requested by the candidate per (B) of Section 2 above, in the main voter pamphlet.

4. The candidate shall be required to pay for the cost of printing the candidates statement in a foreign l anguage required by (A) of Section 2 above, in the facsimile voter pamphlet.

The Deputy City Clerk shall estimate the total cost of printing, handling, translating, and mailing the candidate’s statements filed pursuant to this section, including costs incurred as a result of complying with the Voting Rights Act of 1965 (as amended), and require each candidate filing a statement to pay in advance to the local agency his or her estimated pro rata share as a condition of having his or her statement included in the voter’s pamphlet. In the event the estimated payment is required, the estimate is just an approximation of the actual cost that varies from one election to another election and may be significantly more or less than the es timate, depending on the actual number of candidates filing statements. Accordingly, the Deputy City Clerk is not bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expense or refund any excess paid depending on the final actual cost. In the event of underpayment, the Deputy City Clerk may require the candidate to pay the balance of the cost incurred.

In the event of overpayment, the Deputy City Clerk shall prorate the excess amount among the candidates and refund the excess amount paid within 30 days of the election.

SECTION 4. ADDITIONAL MATERIALS. No candidate will be permitted to include additional materials in the voter information guide. 375

SECTION 5. That the Deputy City Clerk shall provide each candidate or the candidate’s representative a copy of this Resolution at the time nominating petitions are issued.

SECTION 6. That all previous resoluti ons establishing council policy on payment for candidate’s statements are repealed.

SECTION 7. That the Deputy City Cle rk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.

PASSED, APPROVED AND ADOPTED on this 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
376

AYES:

NOES:

ABSENT:

ABSTAIN:

Germaine McClellan Key
City Clerk of the City of Fontana

Acquanetta Warren
Mayor of the City of Fontana

ATTEST:

Germaine McClellan Key
City Clerk of the City of Fontana

377
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1365 Agenda Date: 6/14/2022
Agenda #: R. Category: Consent Calendar
FROM:

Administrative Services
SUBJECT:

First Amendment to the Purchase, Sale and Disposition Agreement (PSDA) between the City of Fontana and Citrus Development LLC regarding the North-West Corner of Citrus and South Highland RECOMMENDATION:

Approve a First Amendment to the Purchase, Sale and Disposition Agreement (PSDA) between the City of Fontana and Citrus Development LLC to effectuate development of the property located on the North-West corner of Citrus and South Highland Avenues and authorize the City Manager to execute any documents necessary or appropriate to effectuate said approval.

COUNCIL GOALS:
• To promote economic development by concentrating on job creation. • To promote economic development by pursuing business retention, expansion and attraction.

DISCUSSION:

The City of Fontana currently owns thirty parcels of vacant land, totaling approximately 8.7 acres, at the North-West corner of South Highland and Citrus Avenues. The property is bordered by South Highland on the South, Old Highland Avenue on the North, Citrus Avenue on the East and Catawba Avenue on the West. The properties were originally purchased by the City of Fontana and the Fontana Redevelopment Agency (RDA) with the intent of facilitating commercial and retail development in North Fontana.

On January 26, 2021, the Mayor and City Council approved a Purchase, Sale and Development Agreement (PSDA) with Citrus Development LLC for development of the City owned properties located on the North-West corner of Citrus and South Highland.

The Citrus Development LLC development will include two Business-Class Hotels (an eighty-three room Holiday Inn Express - and a one-hundred room Staybridge Suites), a Banquet Hall of not less than 29,000 square feet, an In & Out Burger Restaurant and one additional restaurant pad.

Following approval of the PSDA, Citrus Development LLC began processing the various land use entitlements (through the Engineering, Planning and Building Departments) required to fully develop the property. In addition, discussions commenced regarding the design, layout and elevations of the Holiday Inn Express and Staybridge Suites hotel facilities.

Citrus Development LLC recently approached the City of Fontana with a request for an amendment (#1) to the PSDA, which would include the following proposed modifications; • The schedule of performance would be modified to allow additional time for approval of the City of Fontana Printed on 6/8/2022Page 1 of 2
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File #: 21-1365 Agenda Date: 6/14/2022
Agenda #: R. Category: Consent Calendar
required City entitlements (through the Planning and Building Departments). • The amendment will also accommodate a change to the original design and layout - to allow for a joint/shared lobby area for the Holiday Inn Express and Staybridge Suites hotels. This change is much more efficient and advantageous for the size and configuration of the property - and will also accommodate the size and design of the proposed Banquet Hall facility. • Changing the design and layout to accommodate a joint/shared lobby area will also allow for simultaneous construction of the Holiday Inn Express and Staybridge Suites hotels (instead of being constructed as two separate phases - as previously proposed). • The amended schedule of performance requires Citrus Development to complete all required entitlements by the end of November. Construction of and both business-class hotels, banquet hall facility and In & Out Burger restaurant would subsequently commence in December, 2022. • The amended PSDA will include an additional provision calling for approval of a use- agreement prior to occupancy of the Banquet Hall facility. The proposed use-agreement will allow the City to utilize (at no cost) the banquet hall facility for various special events and meetings.

Approval of the First Amendment to the PSDA between Citrus Development LLC and the City of Fontana will facilitate development of the vacant City owned properties located at Citrus and South Highland Avenues. When constructed, the development of this property will include two Business- Class Hotels, a large Banquet Hall, an In & Out Burger and one additional restaurant.

FISCAL IMPACT:

No fiscal impact.

MOTION:

Approve staff recommendation.

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16498.00100\40026827.2

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO

City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: City Manager

SPACE ABOVE THIS LINE FOR RECORDER'S USE
Recordation of this Document
is Exempt from Fees Payable to the Recorder
Under Government Code Section 27383

FIRST AMENDMENT TO

PURCHASE, SALE, AND DEVELOPMENT AGREEMENT
This FIRST AMENDMENT TO PURCHASE, SALE, AND DEVELOPMENT AGREEMENT (the “Amendment”) is dated as of _______, 2022, and is entered into by and between CITRUS DEVELOPMENT LLC, a California limited liability company (“Developer”), and the CITY OF FONTANA, a California municipal corporation (the “City” and with Developer, the “Parties”). The Parties enter into this Amendment with reference to the following recitals of fact:

RECITALS
A. WHEREAS, the Parties entered into that certain Purchase, Sale, and Development Agreement, dated as of December 16, 2020 (the “Agreement”), with respect to that certain real property located in the City of Fontana, County of San Bernardino, State of California, as more fully described in Attachment No. 1 of the Agreement (the “Property”); and B. WHEREAS, Developer seeks to modify the site plan, attached to the Agreement as Attachment No. 4 (“Site Plan”), and has provided a revised development schedule to facilitate development of the Property according to this modified Site Plan and supplement or supercede the Schedule of Performance attached to the Agreement as Attachment No. 2 (“Schedule of Performance”).

C. WHEREAS, the Parties desire to amend the Agreement to incorporate the modified Site Plan, revise the Schedule of Performance and related terms to accommodate the development of the Property according to the modified Site Plan, and entitle the City to free use of the Banquet Hall to be constructed on the Property, as more fully set forth herein below.

AGREEMENT
NOW, THEREFORE, it is agreed by and between the Parties as follows:

1. Amendment of Section 2.1(b) (“Banquet Hall”). Section 2.1(b) is amended to replace “twenty-nine thousand square feet (29,000 sf)” with “twenty-eight thousand square feet (28,000 sf).”
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16498.00100\40026827.2

2. Amendment of Section 2.1(oo) (“Outside Closing Date”). Section 2.1(oo) is amended to replace March 31, 2022 with December 7, 2022.

3. Amendment of Attachment No. 2 – Schedule of Performance. Attachment No. 2 to the Agreement is hereby supplemented by Exhibit A to this Amendment. To the extent any discrepancy or ambiguity exists as between the two Schedules of Performance, the date or deadline set forth in Exhibit A to this Amendment shall control. For the avoidance of doubt and notwithstanding anything to the contrary in the Schedule of Performance, Developer shall commence construction of Phase One by no later than December 5, 2022.

4. Amendment of Attachment No. 4 – Site Plan. Attachment No. 4 to the Agreement is hereby replaced in full by Exhibit B to this Amendment.

5. Amendment of Section 10.14. Section 10.14 is replaced in its entirety with the following: “Upon the Close of Escrow, City shall deliver possession of the Property to Developer (or its assignee) free and clear of all rights or claims to possession and use, subject to the following exception: The Parties agree that the City will have free use of the Banquet Hall subject to a separate Use Agreement to be executed by the Parties prior to the issuance of the Certificate of Occupancy after Developer completes construction of Phase One.”

6. Full Force and Effect; Capitalized Terms. Except as amended hereby, the Agreement remains unmodified and in full force and effect. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

7. Counterparts. This Amendment may be executed in any number of counterparts, including facsimile counterparts, each of which shall, for all purposes, be deemed an original and all such counterparts, taken together, shall constitute one and the same instrument.

8. Governing Law. This Amendment shall be governed by, and interpreted in accordance with, the laws of the State of California.

9. Entire Agreement. This Amendment embodies the entire agreement between the Parties with respect to the substance hereof. This Amendment amends the Agreement and any escrow instructions or other agreements previously entered into by the Parties. (signature page follows)

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16498.00100\40026827.2

IN WITNESS WHEREOF, City and Developer have executed this First Amendment to Purchase, Sale, and Development Agreement as of the date first set forth above by and through the signatures of their duly authorized representative(s) set forth below:
“City”

CITY OF FONTANA,
a California municipal corporation
By:

Matt Ballantyne, City Manager
ATTEST:

Germaine McClellan, City Clerk
APPROVED AS TO FORM:

BEST BEST & KRIEGER, LLP
Ruben Duran, City Attorney
“Developer”:

CITRUS DEVELOPMENT LLC, a California limited
liability company
By:

Jinder Singh
By:

Balwinder Singh Wraich

382
16498.00100\40026827.2

EXHIBIT A

SCHEDULE OF PERFORMANCE

383
16498.00100\40026827.2

EXHIBIT B

SITE PLAN

384
ID Task Name Duration Start Finish
1 2 Planning 165 days Tue 2/22/22 Mon 10/10/22
3 City Review 3 wks Tue 2/22/22 Mon 3/14/22
4 DAB 0 days Mon 3/14/22 Mon 3/14/22
5 Modifications (Shared Lobby) 9 wks Tue 3/15/22 Mon 5/16/22 6 City Review 5 wks Tue 5/17/22 Mon 6/20/22
7 DAB Approval 4 wks Tue 6/21/22 Mon 7/18/22
8 Staff Report 4 wks Tue 7/19/22 Mon 8/15/22
9 Planning Commission Notice 4 wks Tue 8/16/22 Mon 9/12/22 10 Planning Commission 0 days Mon 9/12/22 Mon 9/12/22
11 City Council Notice 4 wks Tue 9/13/22 Mon 10/10/22
12 City Council Approval (MUST HIT GPA CYCLE) 0 days Mon 10/10/22 Mon 10/10/22 13 14 Environmental 101 days? Mon 2/28/22 Mon 7/18/22
15 Submit Initial Study 35 days Mon 2/28/22 Fri 4/15/22 16 City Review 7 wks Mon 2/28/22 Fri 4/15/22
17 Revise IS (Shared Lobby) 5 wks Mon 4/18/22 Fri 5/20/22 18 City Review 3 wks Mon 5/23/22 Fri 6/10/22
19 Public Review 4 wks Mon 6/13/22 Fri 7/8/22
20 Final IS Production 1 wk Mon 7/11/22 Fri 7/15/22
21 City Review 1 day? Mon 7/18/22 Mon 7/18/22
22 23 Final Engineering / Architecture 220 days Tue 2/1/22 Mon 12/5/22 24 Prepare Plans 20 wks Tue 2/1/22 Mon 6/20/22
25 City Review & Approval 6 mons Tue 6/21/22 Mon 12/5/22 26 Permit 0 days Mon 12/5/22 Mon 12/5/22
27 28 Begin Construction (expect 1 year for Phase 1) 0 days Mon 12/5/22 Mon 12/5/22 3/14
9/12
10/10
12/5
12/5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2022 2023
Task
Split
Progress
Milestone
Summary
Project Summary
External Tasks
External Milestone
Deadline
FONTANA SQUARE With Shared Lobby

PROJECT SCHEDULE
Date Prepared: April 15, 2022

Page 1 ends

Project: Feb 2, 2022 Fontana Square S
Date: Tue 4/19/22
385

SITTING AREA
SLOPE
15 18
12 23
25 1
98 1019

OUTDOORPATIOFRONTPORCHCANOPY ABOVE
PATIO

POOL AREAOUT DOOR

TITLEPROJECT
DWG. BY:DATE:JOB :

SHEET REVISIONS:

CHK. BY:

Land Planning Civil Engineering Architectural Design Structural Engineering ACE Design LLCACE Design LLCPhone: (702) 396-5113, Fax: (702)446-8155 Folsom, CA 956301024 Iron Point Road, Suite 1046 OF 19
19-03 FONTANA SQUARENWC CITRUS & SO. HIGHLAND AVE,FONTANA, CALIFORNIA 01/12/2022HSMGA1.0.02 TITLEPROJECT
DWG. BY:DATE:JOB :

SHEET REVISIONS:

CHK. BY:

Land Planning Civil Engineering Architectural Design Structural Engineering ACE Design LLCACE Design LLCPhone: (702) 396-5113, Fax: (702)446-8155 Folsom, CA 956301024 Iron Point Road, Suite 1046 OF 19
19-03 FONTANA SQUARENWC CITRUS & SO. HIGHLAND AVE,FONTANA, CALIFORNIA 386
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1406 Agenda Date: 6/14/2022
Agenda #: S. Category: Consent Calendar
FROM:

Management Services
SUBJECT:

Intention to Levy Assessments for Fiscal Year 2022-2023 for Landscape and Lighting Maintenance Districts
RECOMMENDATION:

1. Adopt Resolution No. 2022-041, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 1 ("LMD #1") for Fiscal Year 2022-2023 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.

2. Adopt Resolution No. 2022-042, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 2 ("LMD # 2") for Fiscal Year 2022-2023 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.

3. Adopt Resolution No. 2022-043, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 3 ("LMD # 3") for Fiscal Year 2022-2023 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.

4. Adopt Resolution No. 2022-044, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Landscape Maintenance District No. 3-1 ("LMD # 3-1") for Fiscal Year 2022-2023 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.

5. Adopt Resolution No. 2022-045, of the City of Fontana, California, Declaring its Intention to Levy and Collect Assessments within Local Lighting Maintenance District No. 3 ("LLMD # 3") for Fiscal Year 2022-2023 and Giving Notice of and Setting the Time and Place of the Hearing on the Levy of the Proposed Assessment.

COUNCIL GOALS:
· To practice sound fiscal management by fully funding liabilities and reserves. · To invest in the city's infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.

DISCUSSION:

Pursuant to Streets and Highways Code Section 22622 through 22624, the City is required to file an Annual Engineer's Report and establish the intention to levy and collect assessments before the City City of Fontana Printed on 6/8/2022Page 1 of 2
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File #: 21-1406 Agenda Date: 6/14/2022
Agenda #: S. Category: Consent Calendar
Annual Engineer's Report and establish the intention to levy and collect assessments before the City may adopt assessment rates for Fiscal Year 2022-2023 for the following districts:
· Landscape Maintenance District No. 1 (throughout the City) · Landscape Maintenance District No. 2 (Village of Heritage) · Landscape Maintenance District No. 3 (Hunter's Ridge) · Landscape Maintenance District No. 3-1 (Empire Center) · Local Lighting Maintenance District No. 3 (Hunter's Ridge) A public hearing to adopt the assessment rates for Fiscal Year 2022-2023 is scheduled for Tuesday, July 26, 2022, at 7:00 p.m.

The City's assessments for these districts have been reviewed in light of the passage of Proposition 218. Because all the assessments were either: 1) approved by consent of all of the property owners at the time the assessments were imposed: or 2) designated solely for the purpose of maintaining or operating streets and sidewalks, the assessments as currently proposed are exempt from Proposition 218.

NBS has prepared the required Annual Engineer's Report for each landscape and lighting maintenance district for Fiscal Year 2022-2023 (copies are attached).

The Annual Engineer's Report for the following districts propose assessment rates for Fiscal Year 2022-2023 that are unchanged from the prior year for LMD #1, LMD #3, LLMD #3, and LMD #3-1. · LMD # 2 (Village of Heritage) will increase by 2.0% ($10.25) to $522.76 per equivalent dwelling unit.

It is projected that the proposed rates will be sufficient to fund the estimated maintenance costs for Fiscal Year 2022-2023, including reserves for cash flow and contingencies, for all districts.

The City Treasurer has reviewed and supports this action.

FISCAL IMPACT:

The proposed assessment rates for Fiscal Year 2022-2023 are projected to generate approximately $4.3 million.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2022-041

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE DISTRICT NO.
1 “LMD #1” FOR FISCAL YEAR 2022-2023 AND GIVING NOTICE OF

AND SETTI NG THE TIME AND PLACE OF THE HEARING ON THE
LEVY OF THE PROPOSED ASSESSMENT.

WHEREAS, on August 5, 1980, the City Council of the City of Fontana, (“City”) adopted Landscape Maintenance District No. 1 pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the “Act”), for the maintenance and servicing of streets, landscaping, parkways and median islands; and
WHEREAS, over the years, the City has enlarged LMD #1 by annexing territory and currently LMD #1 consists of the following annexations:

Nos. 1, 2, 3, 4, 5, 7, 8, 10, 14, 15, 16, 22, 23, 25, 26, 26A, 29, 30, 31, 33, 35, 36, 37, 38, 39, 40, 41, 42 and 43; and
WHEREAS, in November, 1996, the voters of the State of California passed Proposition 218 w hich added Articles XIIIC and XIIID to the California Constitution requiring, among other things, new procedures for the approval of the levying of assessments against real property; and
WHEREAS, Article XIIID of the California Constitution requires that assessments comply with stated procedural and approval provisions by July 1, 1997, unless an assessment district meets certain exemptions as set forth in Section 5 of the Article, which exemptions include the following:
“(a) any assessment imposed exclus ively to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage system or vector control.”
“(b) any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed;” and
WHEREAS, LMD #1 assessments proposed for Fiscal Year 2022-2023 are exempt from Proposition 218 because the assessments generate revenue for the operation and maintenan ce of streets and highways, all expenditures thereunder qualifying as street maintenance as defined by the State of California; and 389
Resolution No. 2022-

2 of 3
WHEREAS, the Act also requires that the City comply with certain procedural and approval procedures before levying its ann ual assessments under an existing assessment district; and

WHEREAS, the adoption of this Resolution, among other things, is required in order to levy the proposed assessments for Fiscal Year 2022-2023 for LMD #1; and

WHEREAS, NBS has filed the required Annual Engineer’s Report with the City Clerk in accordance with the Act, and such report has been presented to and was considered by the City Council.

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

SECTION 1. The City Council hereby declares its intention to levy and collect assessments for LMD #1 during Fiscal Year 2022-2023 pursuant to the Act. The area to be assessed is located in the City of Fontana, San Bernardino County, California.

SECTION 2. The purpose of LMD #1 is for maintenance and servicing of landscaping, irrigation, parkways, medians, and street lighting (in Annexations 14, 22 and 25).

SECTION 3. The report filed by NBS, which is on file with the City Clerk and which has been consi dered by the City Council at the meeting at which this Resolution has been adopted, is hereby accepted. All interested parties are referred to that report for a full and detailed description of the work, the boundaries of the assessment district, and the proposed assessments upon assessable lots and parcels of land within LMD #1.

SECTION 4. On Tuesday, July 26, 2022, at the hour of 7:00 p.m., during the course of its regularly scheduled meeting, the City Council will conduct a public hearing on the quest ion of the levy of the proposed annual assessment. The hearing will be held at the City Council Chambers at 8353 Sierra Avenue, Fontana, California.

SECTION 5. The City Clerk shall give notice of the time and place of said hearing by publishing a copy o f this Resolution once in an adjudicated newspaper of general circulation not less than ten (10) days before the date of the hearing.

SECTION 6. This Resolution is adopted pursuant to Section 22622 of the Streets and Highways Code.

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APPROVED AND ADOPTED 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

___________
City Attorney

I, Tonia Lewis, City Clerk of the City of Fontana, and Ex -Officio Clerk of the City Council, do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City Council at a regular meeting on the 14th day of June, 2022, by the following vote to wit:

AYES:

NOES:

ABSENT:

___________
City Clerk of the City of Fontana

___________
Mayor of the City of Fontana

ATTEST:

___________
City Clerk

391
1 of 3
RESOLUTION NO. 2022-042

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE DISTRICT NO.
2 “LMD #2” FOR FISCAL YEAR 2022-2023 AND GIVING NOTICE OF

AND SETTI NG THE TIME AND PLACE OF THE HEARING ON THE
LEVY OF THE PROPOSED ASSESSMENT.

WHEREAS, on November 18, 1986, the City Council of the City of Fontana, (“City”) adopted Landscape Maintenance District No. 2 pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the “Act”), for the maintenance and servicing of streets, landscaping, parkways and median islands; and
WHEREAS, in November, 1996, the voters of the State of California passed Proposition 218 wh ich added Articles XIIIC and XIIID to the California Constitution requiring, among other things, new procedures for the approval of the levying of assessments against real property; and
WHEREAS, Article XIIID of the California Constitution requires that assessments comply with stated procedural and approval provisions by July 1, 1997 , unless an assessment district meets certain exemptions as set forth in Section 5 of the Article, which exemptions include the following:
“(a) any assessment imposed exclusi vely to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage system or vector control.”
“(b) any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed;” and
WHEREAS, LMD #2 assessments proposed for Fiscal Year 2022-2023 are exempt from Proposition 218 because the assessments generate revenue for the operation and maintenanc e of streets and highways, all expenditures thereunder qualifying as street maintenance as defined by the State of California; and WHEREAS, the items in LMD #2 are exempt from Proposition 218 for the operation and maintenance of streets and highways; and
WHEREAS, LMD #2 assessments are further exempt from Proposition 218 because they were approved previously by property owner consent pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed; and
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WHEREAS, the Act also requires that the City comply with certain procedural and approval procedures before levying its annual assessments under an existing assessment district; and

WHEREAS, the adoption of this Resolution, among other things, is required in order to levy the proposed assessments for Fiscal Year 2022-2023 for LMD #2; and

WHEREAS, NBS has filed the required Annual Engineer’s Report with the City Clerk in accordance with the Act, and such report has been pre sented to and was considered by the City Council.

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

SECTION 1. The City Council hereby declares its intention to levy and collect assessments for LMD #2 du ring Fiscal Year 2022-2023 pursuant to the Act. The area to be assessed is located in the City of Fontana, San Bernardino County, California.

The boundaries of LMD #2 are described in exhibit attached hereto.

SECTION 2. The purpose of LMD #2 is for mai ntenance and servicing of landscaping, irrigation, parkways, medians, parks and street lighting.

SECTION 3. The report filed by NBS, which is on file with the City Clerk and which has been considered by the City Council at the meeting at which this Resol ution has been adopted, is hereby accepted. All interested parties are referred to that report for a full and detailed description of the work, the boundaries of the assessment district, and the proposed assessments upon assessable lots and parcels of lan d within LMD #2.

SECTION 4. On Tuesday, July 26, 2022, at the hour of 7:00 p.m., during the course of its regularly scheduled meeting, the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hear ing will be held at the City Council Chambers at 8353 Sierra Avenue, Fontana, California.

SECTION 5. The City Clerk shall give notice of the time and place of said hearing by publishing a copy of this Resolution once in an adjudicated newspaper of general circulation not less than ten (10) days before the date of the hearing.

SECTION 6. This Resolution is adopted pursuant to Section 22622 of the Streets and Highways Code.

393
Resolution No. 2022-
3 of 3
APPROVED AND ADOPTED 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

___________
City Attorney

AYES:

NOES:

ABSENT:

___________
City Clerk of the City of Fontana

___________
Mayor of the City of Fontana

ATTEST:

___________
City Clerk

394
1 of 3
RESOLUTION NO. 2022-043

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE DISTRICT NO.
3 “LMD #3” FOR FISCAL YEAR 2022-2023 AND GIVING NOTICE OF

AND SETTI NG THE TIME AND PLACE OF THE HEARING ON THE
LEVY OF THE PROPOSED ASSESSMENT.

WHEREAS, on November 6, 1990, the City Council of the City of Fontana, (“City”) adopted Landscape Maintenance District No. 3 pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the “Act”), for the maintenance and servicing of streets, landscaping, parkways and median islands; and
WHEREAS, in November, 1996, the voters of the State of California passed Proposition 218 whi ch added Articles XIIIC and XIIID to the California Constitution requiring, among other things, new procedures for the approval of the levying of assessments against real property; and
WHEREAS, Article XIIID of the California Constitution requires that a ssessments comply with stated procedural and approval provisions by July 1, 1997 , unless an assessment district meets certain exemptions as set forth in Section 5 of the Article, which exemptions include the following:
“(a) any assessment imposed exclusiv ely to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage system or vector control.”
“(b) any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed;” and
WHEREAS, LMD #3 assessments proposed for Fiscal Year 2022-2023 are exempt from Proposition 218 because the assessments generate revenue for the operation and maintenance of streets and highways, all expenditures thereunder qualifying as street maintenance as defined by the State of California; and WHEREAS, the items in LMD #3 are exempt from Proposition 218 for the operation and maintenance of streets and highways; and
WHEREAS, LMD #3 assessments are further exempt from Proposition 218 because they were approved previously by property owner consent pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed; and
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WHEREAS, the Act also requires that the City comply with certain procedural and approval procedures before levying its annual assessments under an existing assessment district; and

WHEREAS, the adoption of this Resolution, among other things, is required in order to levy the proposed assessments for Fiscal Year 2022-2023 for LMD #3; and

WHEREAS, NBS has filed the required Annual Engineer’s Report with the City Clerk in accordance with the Act, and such report has been pres ented to and was considered by the City Council.

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

SECTION 1. The City Council hereby declares its intention to levy and collect assessments for LMD #3 dur ing Fiscal Year 2022-2023 pursuant to the Act. The area to be assessed is located in the City of Fontana, San Bernardino County, California.

The boundaries of LMD #3 are described in exhibit attached hereto.

SECTION 2. The purpose of LMD #3 is for main tenance and servicing of landscaping, irrigation, parkways, and medians.

SECTION 3. The report filed by NBS, which is on file with the City Clerk and which has been considered by the City Council at the meeting at which this Resolution has been adopted, is hereby accepted. All interested parties are referred to that report for a full and detailed description of the work, the boundaries of the assessment district, and the proposed assessments upon assessable lots and parcels of land within LMD #3.

SECTION 4. On Tuesday, July 26, 2022, at the hour of 7:00 p.m., during the course of its regularly scheduled meeting, the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hearing will be held at the City Council Chambers at 8353 Sierra Avenue, Fontana, California.

SECTION 5. The City Clerk shall give notice of the time and place of said hearing by publishing a copy of this Resolution once in an adjudicated newspaper of general circulation not less than ten (10) days before the date of the hearing.

SECTION 6. This Resolution is adopted pursuant to Section 22622 of the Streets and Highways Code.

396
Resolution No. 2022-
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APPROVED AND ADOPTED 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

AYES:

NOES:

ABSENT:

___________
City Clerk of the City of Fontana

____________
Mayor of the City of Fontana

ATTEST:

___________
City Clerk

397
1 of 3
RESOLUTION NO. 2022-044

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, DECLARING ITS INTENTION TO LEVY AND COLLECT ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE DISTRICT NO.
3-1 “LMD #3 -1” FOR FISCAL YEAR 2022-2023 AND GIVING NOTICE

OF AND SETTING THE TIME AND PLACE OF THE HEARING ON THE LEVY OF THE PROPOSED ASSESSMENT.

WHEREAS, on February 19, 1991, the City Council of the City of Fontana, (“City”) adopted Landscape Maintenance District No. 3 -1 pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the “Act”), for the maintenance and servicing of streets, landscaping, parkways and median islands; and
WHEREAS, in November, 1996, the voters of the State of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution requiring, among other things, new procedures for the approval of the levying of assessments against real property; and
WHEREAS, Article XIIID of the California Constitution requires that assessments comply with stated procedural and approval provisions by July 1, 1997 , unless an assessment district meets certain exemptions as set forth in Section 5 of the Article, which exemptions include the following:
“(a) any assessment imposed e xclusively to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage system or vector control.”
“(b) any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed;” and
WHEREAS, LMD #3 -1 assessments proposed for Fiscal Year 2022-2023 are exempt from Proposition 218 because the assessments generate revenue for the operation and ma intenance of streets and highways, all expenditures thereunder qualifying as street maintenance as defined by the State of California; and WHEREAS, the items in LMD #3 -1 are exempt from Proposition 218 for the operation and maintenance of streets and highways; and
WHEREAS, LMD #3 -1 assessments are further exempt from Proposition 218 because they were approved previously by property owner consent pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed; and
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Resolution No. 2022-
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WHEREAS, the Act also requires that the City comply with certain procedural and approval procedures before levying its annual assessments under an existing assessment district; and

WHEREAS, the adoption of thi s Resolution, among other things, is required in order to levy the proposed assessments for Fiscal Year 2022-2023 for LMD #3-1; and

WHEREAS, NBS has filed the required Annual Engineer’s Report with the City Clerk in accordance with the Act, and such repo rt has been presented to and was considered by the City Council.

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

SECTION 1. The City Council hereby declares its intention to levy and collect assessments for LMD #3-1 during Fiscal Year 2022-2023 pursuant to the Act. The area to be assessed is located in the City of Fontana, San Bernardino County, California.

The boundaries of LMD #3-1 are described in exhibit attached hereto.

SECTION 2. The purpose o f LMD #3 -1 is for maintenance and servicing of landscaping, irrigation, parkways, and medians.

SECTION 3. The report filed by NBS, which is on file with the City Clerk and which has been considered by the City Council at the meeting at which this Resolu tion has been adopted, is hereby accepted. All interested parties are referred to that report for a full and detailed description of the work, the boundaries of the assessment district, and the proposed assessments upon assessable lots and parcels of land within LMD #3-1.

SECTION 4. On Tuesday, July 26, 2022, at the hour of 7:00 p.m., during the course of its regularly scheduled meeting, the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hearing will be held at the City Council Chambers at 8353 Sierra Avenue, Fontana, California.

SECTION 5. The City Clerk shall give notice of the time and place of said hearing by publishing a copy of this Resolution once in an adjudicated newspaper of general circulation not less than ten (10) days before the date of the hearing.

SECTION 6. This Resolution is adopted pursuant to Section 22622 of the Streets and Highways Code.

399
Resolution No. 2022-
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APPROVED AND ADOPTED 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

I, Tonia Lewis, City Clerk of the City of Fontana, and Ex -Officio Clerk of the City Council, do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City Council at a regu lar meeting on the 14th day of June, 2022, by the following vote to wit:

AYES:

NOES:

ABSENT:

___________
City Clerk of the City of Fontana

___________
Mayor of the City of Fontana

ATTEST:

___________
City Clerk

400
1 of 3
RESOLUTION NO. 2022-045

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA,

CALIFORNIA, DECLARING ITS INTENTION TO LEVY AND COLLECT

ASSESSMENTS WITHIN LOCAL LIGHTING MAINTENANCE DISTRICT
NO. 3 “LLMD #3” FOR FISCAL YEAR 2022-2023 AND GIVING NOTICE

OF AND SETTING THE TIME AND PLACE OF THE HEARING ON THE LEVY OF THE PROPOSED ASSESSMENT.

WHEREAS, on November 6, 1990, the City Council of the City of Fontana, (“City”) adopted Local Lighting Maintenance District No. 3 pursuant to the Landscaping and Lighting Act of 1972, Part 2 of Division 15 of the Streets and Highways Code (the “Act”), for the maintenance and servicing of streets and lighting; and WHEREAS, in November, 1996, the voters of the State of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution requiring, among other things, new procedures for the approval of the levying of assessments against real property; and
WHEREAS, Article XIIID of the California Constitution requires that assessments comply with stated procedural and approval provisions by July 1, 1997, unless an assessment district meets certain exemptions as set forth in Section 5 of the Article, which exemptions include the following:
“(a) any assessment imposed exclusively to finance the capital costs or maintenance and operation expenses for sidewalks, streets, sewers, water, flood control, drainage system or vector control.”
“(b) any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed;” and
WHEREAS, LLMD #3 assessments proposed for Fiscal Year 2022-2023 are exempt from Proposition 218 because the assessments generate revenue for the operation and maintenance of streets and h ighways, all expenditures thereunder qualifying as street maintenance as defined by the State of California; and WHEREAS, the items in LLMD #3 are exempt from Proposition 218 for the operation and maintenance of streets and highways; and
WHEREAS, LLMD #3 assessments are further exempt from Proposition 218 because they were approved previously by property owner consent pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed; and
401
Resolution No. 2022-
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WHEREAS, the Act also requires that the City comply with certain procedural and approval procedures before levying its annual assessments under an existing assessment district; and

WHEREAS, the adoption of this Resolution, among other th ings, is required in order to levy the proposed assessments for Fiscal Year 2022-2023 for LLMD #3; and

WHEREAS, NBS has filed the required Annual Engineer’s Report with the City Clerk in accordance with the Act, and such report has been presented to and was considered by the City Council.

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

SECTION 1. The City Council hereby declares its intention to levy and collect assessments for LLMD #3 during Fiscal Y ear 2022-2023 pursuant to the Act. The area to be assessed is located in the City of Fontana, San Bernardino County, California.

The boundaries of LLMD #3 are described in exhibit attached hereto.

SECTION 2. The purpose of LLMD #3 is for maintenance an d servicing of landscaping and lighting.

SECTION 3. The report filed by NBS, which is on file with the City Clerk and which has been considered by the City Council at the meeting at which this Resolution has been adopted, is hereby accepted. All interested parties are referred to that report for a full and detailed description of the work, the boundaries of the assessment district, and the proposed assessments upon assessable lots and parcels of land within LLMD #3.

SECTION 4. On Tuesday, July 26, 2022, at the hour of 7:00 p.m., during the course of its regularly scheduled meeting, the City Council will conduct a public hearing on the question of the levy of the proposed annual assessment. The hearing will be held at the City Council Chambers at 8353 Sierra Avenue, Fontana, California.

SECTION 5. The City Clerk shall give notice of the time and place of said hearing by publishing a copy of this Resolution once in an adjudicated newspaper of general circulation not less than ten (10) days before the date of the hearing.

SECTION 6. This Resolution is adopted pursuant to Section 22622 of the Streets and Highways Code.

402
Resolution No. 2022-
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APPROVED AND ADOPTED 14th day of June, 2022.

READ AND APPROVED AS TO LEGAL FORM:

___________
City Attorney

AYES:

NOES:

ABSENT:

_________________
City Clerk of the City of Fontana

___________
Mayor of the City of Fontana

ATTEST:

___________
City Clerk

403

CITY OF FONTANA
LANDSCAPE MAINTENANCE DISTRICT NO. 1

PRELIMINARY ENGINEER'S REPORT

SECTION 1. AUTHORITY FOR REPORT

Among other things, the requirements provide that assessed parcels of real property must receive a special benefit from assessments. Assessments are also subject to majority protest requirements. These requirements apply, unless an assessment district meets certain exemptions set forth in Proposition 218.

The following assessments are exempt from the procedures and approval process of Article XIIID of the California Constitution;

A. Any assessment impo sed exclusively to finance the capital costs or maintenance and/or operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control; or

B. Any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed.

Annexation Nos. 1 through 5, 7, 8, 10, 14, 15, 16, 22, 23, 25, 26, 26A, 29 through 31, 33, 35 through 41, and 43 of the City of Fontana Landscape Maintenance District No. 1 qualify as an existing assessment exempt under exemption "A" described above. This conclusion has been reached using the definitions provided by the Office of the Controller for the State of California and the Guidelines Relating Gas Tax Expenditures published by the division of local government affairs.

Annexation Nos. 38 through 41 and 43 of the City of Fontana Landscape Maintenance District No. 1 also qualify as an existing assessment exempt under exemption "B" described above in that the assessment district was originally formed and the assessment was consented to by all of the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed. The proposed assessments for the 2022- 2023 Fiscal Year for Maintenance District No. 1 fall within this exemption because they are merely the annual levy for assessments previously consented to by property owners.

404

2 SECTION 2. GENERAL DESCRIPTION

This report deals with the annual assessment for annexations of Landscape Maintenance District No. 1. The District consists of the original subdivision and numerous annexations (subdivision) since the formation of LMD No. 1. Areas to be included in the work program are the landscape areas identified on the assessment diagrams for each annexation. An Annual Engineer's Report will be prepared and approved by the City Council defining the specific work programs for each year and the estimated cost for each year. The normal process will be the dedication of the ar eas to the City, followed by landscaping by the developer, and, after a period of maintenance by the developer, the acceptance for maintenance by the Landscape Maintenance District. Ordinarily, there will be a time lapse from the original dedication until the District actually begins maintaining the landscaped areas.

SECTION 3. PLANS AND SPECIFICATIONS

The plans and specifications and installation for all landscaping will be completed by the developers at their cost for the individual areas to be maintained within each subdivision and be approved by the City's Public Works Department. Said plans and specifications show and describe the general nature, location and extent of the existing and proposed improvements to be maintained and/or serviced during the fiscal year and are available for public inspection. The plans and specifications also indicate the class and type of improvements to be maintained and/or serviced for each zone within the District.

Detailed maintenance activities on the areas to be maintained by the District include:

The repair, removal or replacement of all or any part of any improvement, providing for the life, growth, health and beauty of the landscaping, including cultivation, irrigation, trimming, spraying, fertilizing or treating for disease to injury, the removal of trimmings, rubbish, debris, and other solid waste, the maintenance, repair and replacement as necessary of all irrigation systems, and the removal of graffiti from walls immediately adjacent to the cultivated areas.

SECTION 4. ESTIMATED COSTS

No costs will be incurred by the District for original improvement construction. The estimated maintenance cost, for assessment purposes is based upon estimated areas for maintenance, the number of annexations, the number of completed dwelling units and current dollars. The projected costs have been provided by the City of Fontana's Public Works Department. The projected total costs for Fiscal Year 2022-2023 are $965,560.

The total amount of reserve for cash flow and cont ingency is $482,780 and $144,834, respectively

The net amount to be assessed upon assessable lands within the District, being the total maintenance costs, as referred to the above, increased or decreased, whichever the case 405

3 may be, by any surplus, deficit, contribution, reserve or annual installment is $913,806.

SECTION 5. ASSESSMENT DIAGRAM

The "Map of Original Formation of Landscape Maintenance District No. 1" and the assessment diagrams of subsequent annexations, indicating by said boundary line the extent of the territory included within the assessment district, are on file in the City of Fontana and by this reference are made part of this report. The assessment diagram identifies each annexation by a distinctive number. For a detailed description of the lines and dimensions of any lot or parcel, reference is hereby made to the County Assessor's maps, which maps shall govern for all details concerning the lines and dimensions of such lots or parcels

SECTION 6. METHOD OF APPORTIONMENT OF ASSESSMENT SPREAD

The law requires that the assessments levied be based on the benefit the properties receive from the maintenance of the improvements. The statutes do not specify the method or formula that should be used in the special assessment district proceed ings. The responsibility rests with the Engineer of Work, who is appointed for the purpose of making an analysis of the facts and determining the correct apportionment of the assessment obligation.

The Engineer of Work then makes his recommendation on the annual levy of assessments, and the final authority and action rests with the City Council after hearing all testimony and evidence presented at the public hearing. Upon the conclusion of the public hearing, the City Council must make the final action i n determining whether or not the assessment spread has been made in direct proportion to the benefits received.

It is necessary to identify the benefit that the maintenance of improvements will render the properties within the boundaries of each annexation within the LMD No. 1. The basis of an assessment formula for the landscape maintenance district must consider not only the cost of maintenance, but the beneficiaries of the landscaped area. The determination of benefit should take into consideration the following:

1. The purpose of the landscaping is to provide an aesthetic impression for an entire area.

2. The maintained landscaping benefits all properties in the development/annexation (sub-division tract).

3. Lots not adjacent to the landscaped area benefit by the uniform maintenance and appearance. All lots not abutting the landscaped area benefit equally.

4. The assessment for the lots abutting the landscaped area should be given a surcharge to recognize proximity and support benefit.

406

4 In further making the analysis, it is necessary that the property owners receive a special and direct benefit distinguished from the general public. Each annexation may utilize a different formula for the determination of the benefits to be received by the prope rty owners. Two annexations of commercial properties are assessed based on lot sizes. Some annexations share the landscaping benefits equally. Most annexations utilize a formula with a ten (10) percent surcharge charged to the lots adjacent to improvements. Based on the determination of benefits, the following ASSESSMENT FORMULAS were utilized for the 2022-2023 assessment:

FORMULA FOR ANNEXATIONS WITH ADJACENT AND NON-ADJACENT PROPERTIES

P = Total yearly assessment
A = Quantity of adjacent lots
L = Quantity of interior lots
N = Assessment of interior lots
Q = Assessment of adjacent lots

P = N
(A x 1.10) + L

N x 1.10 = Q

FORMULA FOR ANNEXATIONS WITH EQUAL BENEFITS

P = Total yearly assessment
A = Number of lots
Q = Assessment for each lot

P
= Q
A

FORMULA FOR ANNEXATIONS BASED ON LOT SIZES

P = Total yearly assessment
Q = Assessment per lot
T = Total acreage of all lots to be assessed
A = Acreage of each lot

P x A
= Q
T

*Current annual assessment rates for each individual annexation to Landscape Maintenance District No. 1 can be found in Exhibit A of this report.

407
408
409
1 CITY OF FONTANA
LANDSCAPE MAINTENANCE DISTRICT NO. 2

PRELIMINARY ENGINEER'S REPORT

VILLAGE OF HERITAGE

SECTION 1. AUTHORITY FOR REPORT

This report is prepared in compliance with the requirements of Article 2, Chapter 3, Section 22623 of the Streets an d Highway Code, State of California (Landscaping and Lighting Act of 1972). In November of 1996, the voters of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution. These Constitutional provisions affect t he procedural and approval requirements for the levy of assessments. Among other things, these requirements provide that assessed parcels of real property must receive a special benefit from assessments. Assessments are also subject to majority protest r equirements. These requirements apply, unless an assessment district meets certain exemptions set forth in Proposition 218.

The following assessments are exempt from the procedures and approval process of Article XIIID of the California Constitution;

A. Any assessment imposed exclusively to finance the capital costs or maintenance and/or operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control; or

B. Any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed.

The City of Fontana Landscape Maintenance District No. 2 qualifies as an existing assessment exempt under exemption "B" described above in that the assessment district was originally formed and the assessment was imposed pursuant to the district was consented to by all of the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed. The pr oposed assessments for the 2022- 2023 Fiscal Year for Maintenance District No. 2 fall within this exemption because they are merely the annual levy for assessments previously consented to by property owners.

SECTION 2. GENERAL DESCRIPTION

This report deals with the annual assessment for the Landscape Maintenance District No. 2 (Village of Heritage) for the 20 22-2023 Fiscal Year commencing on July 1, 20 22 and ending on June 30, 20 23. Areas to be included in the work program are the parks, the trees within the dedicated tree maintenance easements, and the trees and ground cover within the tree and ground cover maintenance easements dedicated to the City, the public parks, and other areas required by the approved plan or by the City Council, or as dedicated by the various subdivisions.
410

2 SECTION 3. PLANS AND SPECIFICATIONS

The plans and specifications and installation for all landscaping will be completed by the developer at their cost for the individual areas to be maintained within each subdivision and be approved by the City's Public Works Department, available for public inspection, and incorporated herein by this reference as though set forth in full. Said plans and specifications show and describe the general nature, location and extent of the exi sting and proposed improvements to be maintained and/or serviced. The plans and specifications also indicate the class and type of improvements to be maintained and/or serviced for each zone within the District. The maintenance activities of the areas to be maintained by the District include, but are not limited to:

The repair, removal or replacement of all or any part of any improvement, providing for the life, growth, health and beauty of the landscaping, including cultivation, irrigation, trimming, sp raying, fertilizing or treating for disease to injury, the removal of trimmings, rubbish, debris, and other solid waste, the maintenance, repair and replacement as necessary of all irrigation systems, and the removal of graffiti from walls immediately adjacent to the cultivated areas.

SECTION 4. METHOD OF APPORTIONMENT OF ASSESSMENT SPREAD

A. Calculations of Assessment. The methodology used to calculate the annual assessments was approved and adopted during the formation of the District. The assessm ents to be levied and collected for the Fiscal Year utilize the following formula:

The Engineer shall review the calculation of the Maximum Unit Assessment and the Alternate Unit Assessment. If the Alternate Unit Assessment is less than or equal to the Maximum Unit Assessment then:

1. each Mapped Unit shall be assessed the Alternate Unit Assessment; and

2. each Unmapped Unit shall not be assessed.

If the Maximum Unit Assessment is less than the Alternate Unit Assessment then:

1. each Mapped Unit shall be assessed the Maximum Unit Assessment; and

2. the Engineer shall calculate the Unmapped Unit Assessment and each Unmapped Unit shall be assessed the Unmapped Unit
Assessment.

B. Definitions. The following definitions shall be used each fisca l year by the Engineer to calculate the assessment which shall be levied and collected pursuant to the resolution forming Landscape Maintenance District No. 2. 411

3 "Alternate Unit Assessment" means the amount calculated by dividing the Current Year Budget by the Mapped Units.

"Completed District Budget" means the sum of expenditures, including, without limitations, contingencies, which are estimated by the engineer to be incurred by the District during the Fiscal Year.

"Current Year Budget" means the s um of the expenditures, including, without limitations, contingencies, estimated by the engineer to be incurred by the District during the Fiscal Year.

"Current Year Needs" means the amount calculated by subtracting the cash reserves projected by the En gineer to be available to the District at the commencement of the Fiscal Year from the Current Year Budget.

"District" means Landscape Maintenance District No. 2.

"Fiscal Year" means the fiscal year for which the Engineer's report is being prepared.

"Mapped Property" means the property within the District which has been subdivided subsequent to January 1, 1986.

"Mapped Property Assessment" means the amount calculated by multiplying the Total Mapped Units times the Maximum Unit Assessment.

"Mapped Unit" means any unit within the Mapped Property.

"Maximum Unit Assessment" means the amount calculated by dividing the Completed District Budget by the Total Units.

"Residual Cash Requirements" means the amount calculated by subtracting the Mapped Property Assessment from the Current Year Needs.

"Specific Plan" means the West End Specific Plan, as amended from time to time.

"Total Mapped Units" means the sum of Mapped Units.

"Total Unmapped Units" means the sum of the Unmapped Units.

412

4 "Units" shall be calculated as follows:

1. For Unmapped Property:

a. Low Areas, Low Medium 1 Areas and Low Medium 2 Areas shall each be assessed at 4.6 units per acre.

b. Medium Areas shall be assessed at 6.6 units per acre.

c. High Areas shall be assessed at 15 units per acre.

d. Commercial Areas, Office/Institutional Areas and Business Parks Areas shall be assessed at 3.2 units per acre.

2. For Mapped Property:

a. Low Areas, Low Medium 1 Areas and Low Medium 2 Areas shall each be assessed at one (1) unit for each residential lot consisting of not more than 10,000 square feet created as a result of subdivision of the property.

b. Medium Areas shall be assessed at 6.6 units per acre; provided, however, any portion of th e Medium Area on which a site plan has been approved by the City, shall be assessed eight tenths (8/10ths) of a unit for each residential unit to be constructed, or which has been constructed, on such portion of the Medium Area.

c. High Areas shall be assessed at 15 units per acre; provided, however, any portion of the High Area on which a site plan has been approved shall be assessed at seven tenths (7/10ths) of a unit for each residential unit to be constructed, or which has been constructed, on such portion of the High Area.

d. Commercial Areas, Office/Institutional Areas and Business Park areas shall be assessed at 3.2 units per acre.

"Unmapped Property" means property within the Unmapped Property.

"Unmapped Unit" means any unit within the Unmapped Property.

"Unmapped Unit Assessment" means the amount calculated by dividing the Residual Cash Requirements by the Total Unmapped Units.

413

5 Section 5. ESTIMATED COSTS

The costs of the original landscape improvements have been paid by the Developer.

Annual maintenance and replacement costs will be borne by the benefiting property owners after the City accepts the landscape improvements for maintenance. The estimated maintenance cost, for assessment purposes, is based upon the areas to be maintained and the number of dwelling units.

A. Estimated 2022-2023 fiscal year costs:

1. Cost of Maintenance of Improvements

a. Utilities $ 966,740
b. Repair, removal and replacement, spraying, 1,809,640 trimming and treatment debris removal
and construct maintain turf/trees.

Subtotal 2,766,620

2. Incidentals

a. Administration 314,360

3. Total Cost of Maintenance 3,080,980

4. Cash Flow Reserve 1,540,490

5. Contingencies Reserve 462,147

6. Capital Replacement 0

7. Reserve for Capital Replacement 0

8. Allowance for Tax Delinquency 0

9. Total Full Cost Recovery 5,083,617

10. Less: Estimated Beginning Fund Balance <2,551,314>

11. Balance to Assess $ 2,532,303

I. TOTAL UNITS AS OF JUNE 2023

A. Total Map Units

1. Residential
a. L, LM1, LM2
3,523 lots x 1.0 unit/lot = 3,523 units
b. M
0 lots x .8 units/lot = 0 units
c. MT
84 lots x .7 units/lot = 59 units

414

6 2. Non-residential
a. 395.58 acres x 3.2 units/acre = 1,266 units

TOTAL MAPPED UNITS 4,848 units

B. Total Unmapped Units

1. Non-residential
a. 6.01 acres x 3.2 units/acre = 20 units

C. TOTAL UNITS (Mapped & Unmapped) 4,868 units

II. ASSESSMENT FOR FISCAL YEAR 2022-2023

A. Mapped Units Unit Charge ($) # of EDUs Assessment ($)

1. L, LM1, LM2 522.76 3,523 1,841,683

2. M 522.76 0 0

3. MT 344.82 59 28,965

4. Non-residential 522.76 1,266 661,655

B. Unmapped Units

1. L, LM1, LM2 0.00 0 0

2. M 0.00 0 0

3. MT 0.00 0 0

4. Non-residential 0.00 20 0

TOTAL ASSESSMENT OF MAPPED AND UNMAPPED UNITS $2,532,303

All of the costs and areas are based on current estimates. The total cost and unit costs vary as additional improvements for maintenance are added to the District. The costs shown are estimates only. The act ual assessments are based on these costs and the difference between the estimated costs and actual costs will be accounted for in the subsequent year.

The 2022-2023 maximum assessment is $522.76 per EDU an increase of $10.25 (2%) over the prior year.

415

7 SECTION 6. ASSESSMENT

I, the appo inted Engineer of Work, by virtue of the power vested pursuant to the "Landscaping and Lighting Acts of 1972", being Division 15, Part 2, of the California Streets and Highway Code, commencing with Section 22500, an d by ord er of the legislative body, hereby make the following assessment to cover the estimated costs and expenses of the maintenance work for the improvements within Landscape Maintenance District No. 2 for the Fiscal Year commencing on the 1st day of July, 2 022 and ending on the 30th day of June, 2023. Said costs and expenses are generally as follows:

Cost of Maintenance $ 3,080,980

Cash Flow Reserve 1,540,490

Contingency Reserve 462,147

Capital Replacement 0

Reserve for Capital Replacement 0

Allowance for Tax Delinquency 0

Total Costs $ 5,083,617

Less: Credit for Beginning Fund Balance <2,551,314>

Balance to Assess $ 2,532,303

416
417
1 CITY OF FONTANA
LANDSCAPE MAINTENANCE DISTRICT NO. 3

PRELIMINARY ENGINEER'S REPORT FOR HUNTER'S RIDGE

SECTION 1. AUTHORITY FOR REPORT

This report is prepared in compliance with the requirements of Article 2, Chapter 2, Section 22623 of the Streets and Highway Code, State of California (Landscaping and Lighting Act of 1972). In November of 1996, the voters of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution. These Constitutional provisions affect the procedural and approval requirements for the levy of assessments.

The following assessments are exempt from the procedures and approval process of Article XIIID of the California Constitution;

A. Any a ssessment imposed exclusively to finance the capital costs or maintenance and/or operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control; or

B. Any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed.

The City of Fontana Landscaping Maintenance District No. 3 (Hunter's Ridge) qualifies as an existing assessment exempt under exemption "B" de scribed above in that the assessment district was originally formed and the assessment was imposed pursuant to the district was consented to by all of the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed. The proposed assessments for the 2022-2023 Fiscal Year for Landscaping Maintenance District No. 3 fall within this exemption because they are merely the annual levy for assessments previously consented to by property owners.

SECTION 2. GENERAL DESCRIPTION

This report deals with the annual assessment for the Landscape Maintenance District No. 3 (Hunter's Ridge), for the 2022-2023 Fiscal Year commencing on July 1, 2022 and ending on June 30, 20 23. Areas to be included in the work program are the trees within the dedicated tree maintenance easements, the trees and ground cover within the tree and ground cover maintenance easements dedicated to the City, the public parks, and other areas required by the approved plan or by the City Council, or as dedicated by the various subdivisions. These areas listed above will become a part of the active work program, at such time as the specific areas are dedicated to the City.

418
2 SECTION 3. PLANS AND SPECIFICATIONS

The plans and specifications have been prepared according to the City's standards. Plans and specifications for walls, fences, and signage have been prepared in accordance with Hunter's Ridge Specific Plan and City standards. Said plans and specifications show and describe the general nature, location and extent of the existing and proposed improvements to be maintained and/or serviced. The plans and specifications also indicate the class and type of improvements to be maintained and/or serviced for each zone within the District.

The maintenance activities of the areas to be maintained by the District include but are not limited to:

SECTION 4. ESTIMATED COSTS

The costs of the original landscape improvements have been paid by the Developer.

The estimated cost for Fiscal Year 2022-2023 is as follows:

Cost of Maintenance $ 961,990

Cash Flow Reserve 480,995

Contingency Reserve 144,299

Reserve for Capital Replacement 550,000

Total Costs $2,137,284

Less: Estimated Beginning Fund Balance <1,339,829>

Balance to Assess $ 797,455

All of the costs are based on current estimates. The assessments are based on these costs 419
3 and the difference between the estimated cost and the actual cost will be accounted for in the subsequent year.

The 2022-23 maximum assessment is $714.12, an increase of $14.00 (2%) over the prior year.

SECTION 5. ASSESSMENT DIAGRAM

For a detailed description of the lines and dimensions of any lot or parcel, reference is hereby made to the County Assessor's maps, which maps shall govern for all details concerning the lines and dimensions of such lots or parcels.

SECTION 6. METHOD OF APPORTIONMENT OF ASSESSMENT

The Hunter's Ridge Specific Pan is a residential development which includes single family dwelling units and a 3.55 acre commercial site. Areas that are not improved or have been dedicated to the City or the Etiwanda School District or Caltrans will not be assessed for maintenance costs.

The determination of benefit takes into account that all single -family residential lots will receive equal benefit from the landscape improvements. The commercial area will be given a benefit surcharge of 4.2 times the assessment per acre based on an equivalent of 4.2 dwelling units to the acre.

Formula for Assessment

A = Assessment per dwelling unit
L = Number of single-family dwelling units not in the estate area M = Number of Multi-family dwelling units not in the estate area P = Number of estate dwelling units
C = Commercial units

ESTIMATED 2021-2022 ASSESSMENT: $797,455

C(4.2A) + L(1.0A) +M(.8A) +P (1.5A) = 797,455

3.55(4.2A) + 1,580(1.0A) + 0(.8A) + 0(1.5A) = 797,455

14.91(A) + 1,580(A) + 0(A) + 0(A) = 797,455
A = 500.00 per unit

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421
422

CITY OF FONTANA
LANDSCAPE MAINTENANCE DISTRICT NO. 3
PRELIMINARY ENGINEER'S REPORT FOR ANNEXATION NO. 1

EMPIRE CENTER

SECTION 1. AUTHORITY FOR REPORT

This report is prepared in compliance with the requirements of Article 2, Chapter 2, Section 22623 of the Streets and Highways Code, State of California (Landscaping and Lighting Act of 1972). In November of 1996, the voters of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution. These Constitutional provisions affect the procedural and approval requirements for the levy of assessments.

The following assessments are exempt from the procedures and approval process of Article XIIID of the California Constitution;

A. Any assessment imposed exclusively to finance the capital costs or maintenance and/or operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control; or

B. Any assessment imposed pursuant to a p etition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed.

The City of Fontana Landscape Maintenance District No. 3, Annexation No. 1 (Empire Center), qualifies as an existing assessment exempt under exemption "B" described above in that the assessment district was originally formed and the assessment was imposed pursuant to the district was consented to by all of the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed. The proposed assessments for the 2022-2023 Fiscal Year for Maintenance District No. 3, Annexation No. 1, fall within this exemption because they are merely the annual levy for assessments previously consented to by property owners.

SECTION 2 GENERAL DESCRIPTION

This report deals with the annual assessment for the Landscape Maintenance District No. 3, Annexation No. 1 (Empire Center), for the 2022-2023 Fiscal Year commencing on July 1, 2022 and ending on June 30, 2023. Areas to be included in the work program are the trees 423

2 within the dedicated tree maintenance easements, the trees and ground cover within the tree and ground cover maintenance easements dedicated to the City, the public parks, and other areas required by the approved plan or by the City Council, or areas dedicated by the various subdivisions. Annually, the City Council approves an Engineer's Report defining the specific work programs for each year and the estimated cost for each year.

SECTION 3. PLANS AND SPECIFICATIONS

The plans and specifications have been prepared according to the City's standards. Plans and specifications for walls, fences, and signage have been prepared in accordance with Empire Center Specific Plan and City standards. Said plans and specifications show and describe the general nature, location and extent of the existing and proposed improvements to be maintained and/or serviced. The plans and specifications also indicate the class and type of improvements to be maintained and/or serviced for each zone within the District.

The maintenance activities of the areas to be maintained by the District include but are not limited to:

The repair, removal or replacement of all or any part of any improvement, providing for the life, growth, health and beauty of the landscaping, including cultivation, irrigation, trimming, spraying, fertilizing or treating for disease or injury, the removal of trimmings, rubbish, debris, and other solid waste, the maintenance, repair and replacement as necessary of all irrigation systems, and the removal of graffiti from walls immediately adjacent to the cultivated areas.

SECTION 4. ESTIMATED COSTS

The costs of the original landscape improvements will be paid by the Developer. Annual maintenance and replacement costs will be borne by the benefiting property owners after the City accepts the landscape improvements for maintenance. The estimated maintenance cost, for assessment purposes, is based upon the proposed areas for maintenance. The maximum assessment is $1,145.31 per acre.

424

3 The estimated cost for Fiscal Year 2022-2023 is as follows:

A. Cost of Maintenance of Improvements:

1. Landscape Maintenance and Utilities $ 60,570

2. Personnel Services and Other
Departmental Expenses 500

3. Administration 5,000

Total Costs of Maintenance $ 66,070

B. Cash Flow Reserve 33,035

C. Contingencies Reserve 9,911

D. Capital Replacement 60,000

Total Cost $169,016

E. Less: Estimated Beginning Fund Balance <106,896>

F. Total Assessments $ 62,120

All of the costs are based on current estimates. The assessments are based on these costs and the difference between the estimated cost and the actual cost will be accounted for in the subsequent year.

SECTION 5. ASSESSMENT DIAGRAM

425

4 SECTION 6. METHOD OF APPORTIONMENT OF ASSESSMENT

The Empire Center Specific Plan was designed as a multi-use commercial development which included a proposed Regional Mall, a Community Center, a Neighborhood Center, an Entertainment Center, a Promotional Center, a Community -Commercial area, a Community-Office area, and a Community -Regional area. The regional mall was never built, and the development was not completed as planned and due to economic conditions property was removed from the district and the area requiring maintenance was reduced.

The properties and improvements remaining within the district are generally located south of the I-10, east of Sierra Avenue, north of Slover Avenue, and west of the east boundary of the Promotional Center.

The assessment formula takes into account that the proposed Regional Mall would have received greater benefit from the landscape improvement than other areas. The property zoned for Regional Mall would have received a 15% surcharge over and above the maintenance cost per acre based upon the following formula:

TA = Estimated Yearly Maintenance Costs
RM = Number of acres within the Regional Mall
PC = Number of acres within the Promotional Center
(lots 13 thru 33), Community Center (lots 6
thru 11), and Neighborhood Center (lot 5)
A = Assessment per acre

ESTIMATED 2022-2023 ASSESSMENT = $ 62,120

RM (1.15A) + PC (1.00A) = $ 62,120

0.00 (1.15A) + 62.1197 (1.00A) = 62,120

62.1197(A) = 62,120
A = $ 1,000.00 per acre

426
427
428

CITY OF FONTANA
LOCAL LIGHTING MAINTENANCE DISTRICT NO. 3

PRELIMINARY ENGINEER'S REPORT

HUNTER'S RIDGE

SECTION 1. AUTHORITY FOR REPORT

This report is prepared in compliance with the requirements of Article 2, Sections 22623 of the Streets and High ways Code, State of California (Landscaping and Lighting Act of 1972). In November of 1996, the voters of California passed Proposition 218 which added Articles XIIIC and XIIID to the California Constitution. These Constitutional provisions affect the procedural and approval requirements for the levy of assessments. Among other things, the requirements provide that assessed parcels of real property must receive a special benefit from assessments. Assessments are also subject to majority protest requirements.

These requirements apply, unless an assessment district meets certain exemptions set forth in Proposition 218.

The following assessments are exempt from the procedures and approval process of Article XIIID of the California Constitution;

A. Any as sessment imposed exclusively to finance the capital costs or maintenance and/or operation expenses for sidewalks, streets, sewers, water, flood control, drainage systems or vector control; or

B. Any assessment imposed pursuant to a petition signed by the persons owning all of the parcels subject to the assessment at the time the assessment is initially imposed.

The City of Fontana Local Lighting Maintenance District No. 3 (Hunter's Ridge) qualifies as an existing assessment exempt under exemption "B" desc ribed above in that the assessment district was originally formed and the assessment was imposed pursuant to the district was consented to by all of the persons owning all of the parcels subject to the assessment at the time the assessment was initially imposed. The proposed assessments for the 2022-2023 Fiscal Year for Local Lighting Maintenance District No. 3 fall within this exemption because they are merely the annual levy for assessments previously consented to by property owners.

SECTION 2. GENERAL DESCRIPTION

This report deals with the annual assessment for the Local Lighting Maintenance District No. 3 (Hunter's Ridge). The lighting system for Hunter's Ridge has been completely installed. The District will pay for the maintenance and the elec trical consumption of the lighting district.

429

2 SECTION 3. PLANS AND SPECIFICATIONS

The plans and specifications have been prepared in accordance with the Hunter's Ridge Specific Plan, City standards and standards of the utility company. Said plans and specifications show and describe the general nature, location and extent of the lighting improvements to be maintained and/or serviced. The plans and specifications and specific plan, by reference, are hereby made a part of this report to the extent as if said plans and specifications and specific plan were attached hereto.

The maintenance activities of the areas to be maintained by the District include, but are not limited to:

Maintenance of public lighting facilities to include all street lights, poles, ornamental standards, luminaires, supports, conduits, wires, transformers, switches, attachments, and appurtenances within the boundaries of the district.

SECTION 4. ESTIMATED COSTS

The cost of the lighting improvements and equipment that was installed was borne by the developer and the District. Annual maintenance costs will be borne by the benefiting property owners. The estimated maintenance cost, for assessment purposes, is predicated upon the completion of the lighting system.

The estimated cost for Fiscal Year 2022-2023 is as follows:

A. Cost of Maintenance of Improvements:

1. Utilities $ 32,000

2. Administration 3,900

Subtotal $ 35,900

B. Cash Flow Reserve 17,950

C. Contingency Reserve 5,385

Total Costs and Reserves $ 59,235

E. Less: Estimated Beginning Fund Balance <24,147>

F. Balance to Assess $ 35,088

All of the costs are based on current estimates and the difference between the estimated cost and the actual cost will be accounted for in the subsequent year. The 2022-2023 maximum tax is $28.56, an increase of $0.56 (2%) over the prior year. 430

3 SECTION 5. ASSESSMENT DIAGRAM

SECTION 6. METHOD OF APPORTIONMENT OF ASSESSMENT

The Hunter's Ridge Specific Plan is a multi-use residential development which includes single family dwelling units and a 3.55 acre commercial site. Areas not to be developed or improved and dedicated to the City or the Etiwanda School District or Caltrans will not be assessed for maintenance costs.

The determination of benefit takes into consideration the following:

1. The purpose of lighting is to provide a safety improvement to Hunter's Ridge Specific Plan area.

2. The maintained lighting benefits all dwelling units in the Hunter's Ridge Specific Plan as well as the commercial site.

3. All single family dwelling units benefit equally.

4. Commercial acreage is given a benefit surcharge of 4.2 times the assessment per acre based on an equivalent of 4.2
dwelling units to the acre.

The maintenance district will provide for funding a portion of the maintenance costs of lighting facilities deemed to be a fair share of contribution.

Maintenance expenses in excess of the "fair share" contribution shall be funded by a regional lighting district which may be established in the future to include neighboring properties that will share in the benefit of the improvements and facilities.

Formula for Assessment
A = Assessment per dwelling unit
L = Number of single family dwelling units not in the estate area M = Number of Multi-family dwelling units not in the estate area P = Number of estate dwelling units
C = Commercial units

ESTIMATED 2022-2023 ASSESSMENT: $ 35,088

C(4.20A) + L(1.0A) +M(.8A) +P(1.5A) = $ 35,088

3.55(4.20A) + 1,580(1.0A) + 0(.8A) + 0(1.5A) = 35,088

14.91(A) + 1,580(A) + 0(A) + 0(A) = 35,088
A = $ 22.00 per unit
431
432

433

Location Map
LMD # 3

434

Location Map
LMD # 3-1

435

Location Map
LLMD # 3

436
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1464 Agenda Date: 6/14/2022
Agenda #: T. Category: Consent Calendar
FROM:

Development Services
SUBJECT:

Option to Purchase Agreement - NH Southridge LLC
RECOMMENDATION:

1. Approval of an Option to Purchase Agreement with NH Southridge LLC for Assessor Parcel Number 0237-411-13 and find the approval is not a “project”requiring review under CEQA, or, in the alternative, is subject to the common-sense exemption from CEQA;

2. Authorize the City Manager to execute any documents necessary or appropriate to execute the Option to Purchase Agreement.

COUNCIL GOALS:
· To promote economic development by establishing a quick, consistent development process.

BACKGROUND:

The City of Fontana (“City”)currently owns real property located in the City of Fontana ("City"), San Bernardino County ("County"), State of California, known as County of San Bernardino Assessor Parcel Number 0237-411-13 (“Property.”)The Property consists of approximately 10 acres of vacant land. NH Southridge, LLC (“Southridge”)is a subsidiary of NewBridge Homes. Southridge has made an offer to purchase the Property, which is currently vacant and undeveloped.

DISCUSSION:

The Development Services Division and Southridge have negotiated an Option to Purchase Agreement (“OptionAgreement”)to facilitate the sale of APN 0237-411-14. To that end, the proposed deal-points included within the Option Agreement include:
· In consideration of Fifty Thousand Dollars ($50,000), Southridge will have the exclusive option to purchase the Property (“Option”).
· Southridge must exercise the Option prior to March 1, 2023, or may extend the Option until August 1, 2023 for an additional Twenty Five Thousand Dollars ($25,000) in consideration. · In order to exercise the Option, Southridge obtain all Entitlements, as that term is provided in the Purchase Agreement, included as Exhibit “B” to the Option Agreement.

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File #: 21-1464 Agenda Date: 6/14/2022
Agenda #: T. Category: Consent Calendar
FISCAL IMPACT:

The sale of the Option to purchase the Property will generate between $50,000 and $75,000 in revenue to the City.

ENVIRONMENTAL REVIEW:

The Option acknowledges that Southridge intends to pursue entitlements for the Property during the Option Term. However, as detailed in the Option, the approval of the Option is not a commitment by the City to take any action under the California Environmental Quality Act (“CEQA”), nor has the City committed itself to any entitlements or to any project related to the Property as a whole, or to any particular features, so as to, in any way, preclude any alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project or any of the entitlements. Given this, and per CEQA Guidelines section 15378, the approval of the Option is a not subject to CEQA review. Alternately, the approval of the Option is not subject to further CEQA review as “it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” (CEQA Guidelines §15061(b)(3).) MOTION:

Approve Staff Recommendation.

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16498.00100\40128762.3

OPTION TO PURCHASE
(CITY PARCEL – APN: 0237-411-13)
In consideration of the sum of $50,000.00 (“Option Consideration”) in hand paid, THE CITY OF FONTANA, a municipal corporation (“Optionor”), hereby offers and grants to NH SOUTHRIDGE LLC, a California limited liability company (“ Optionee”) the exclusive and irrevocable option and right to purchase (the “Option”), under the conditions hereinafter provided, certain real property located in the City of Fontana ("City"), San Bernardino County (" County"), State of California, known as County of San Bernardino Assessor Parcel Number 0237-411-13, and as more particularly described on Exhibit "A"(the “Property”).

Should Optionee exercise the Option to acquire the Property as set forth herein, Optionee shall purchase the Property for One Million Five Hundred Twenty-Five Thousand Dollars ($1,525,000), and other valuable consideration, and the parties shall enter into that certain form of Purchase and Sale Agreement and Joint Escrow Instructions, attached hereto as Exhibit “B ” (the “Purchase Agreement”), for the terms, purchase and conveyance of the Property.

Optionee must exercise the Option prior to March 1, 2023 (the “Option Expiration Date”) by providing written notice to Optionor pursuit to Section 15.3 of the Purchase Agreement.

Notwithstanding the above, Optionee shall have the right to extend the Option Expiration Period until August 1, 2023 provided that the Optionee delivers $25,000.00 in additional Option Consideration.

The Option may not be exercised until Optionee obtains all Entitlements, as that term is defined in the Purchase Agreement. If a private entity files a claim, or any third party initiates a legal action, regarding the Optionor’s approval of this Option or the pursuit of the activities contemplated by this Option (each, an “Action”), the Optionor may terminate this Option on thirty (30) days written notice, without any further obligation to perform the terms of this Option and without any liability to the Optionee resulting from such termination, unless the Optionee unconditionally agrees to indemnify and defend the Optionor with legal counsel acceptable to the Optionor, against such Action, as provided in the next sentence. Within thirty (30) days of receipt of the Optionor’s notice of intent to terminate this Agree ment, as provided in the preceding sentence, the Optionee may offer to defend the Optionor, with legal counsel reasonably acceptable to the Optionor , against the Action and pay all costs, including reasonable attorneys’ fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the Action. Any such offer from the Optionee must be in writing and reasonably acceptable to the Optionor in both form and substance. Nothing in this language shall be deemed or construed to be an express or implied admission that the Optionor is liable to the Optionee or any other person or entity for damages alleged from any alleged or established failure of the Optionor to comply with any statute.

Optionor acknowledges that Optionee intends to pursue Entitlements of the Property during the Option Term. Optionor will cooperate with all commercially reasonable requests of Optionee, at no cost to the Optionor, in connection with the pursuit of such Entitlements. This Option shall not be construed as a commitment by Optionor to take any action under the California 439
16498.00100\40128762.3

Environmental Quality Act (“CEQA”), nor has the Optionor committed its elf to the Entitlements or to any project related to the Property as a whole, or to any particular features, so as to, in any way, preclude any alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project or any of the Entitlements.

If Optionee exercises its O ption, Optionor and Optionee will complete and execute the Purchase Agreement within 15 days. Optionor and Optionee agree that Optionee has no obligation to exercise the Option and Optionor has no obligation to Optionee other than as expressly set forth in this Option.

This Option shall be binding upon and inure to the benefit of the parties, their assigns, and personal representatives.

IN WITNESS WHEREOF, Optionor has caused this Option to be executed and delivered as of _______________, 2022.

OPTIONOR:

CITY OF FONTANA,
a municipal corporation

By:

Acquanetta Warren, Mayor
ATTEST:
_________________________
City Clerk

APPROVED AS TO FORM:
_________________________
Ruben Duran, City Attorney

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16498.00100\40128762.3

EXHIBIT “A”

DESCRIPTION OF THE PROPERTY
The land referred to in this Agreement is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:

LOT 11 OF TRACT NO. 15117, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 275, PAGES 66 THROUGH 90, INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 0237-411-13-0-000

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EXHIBIT “B”

FORM OF THE PURCHASE AGREEMENT

See Attached.

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PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
DATED
______________, 20__

BY AND BETWEEN

CITY OF FONTANA,
a municipal corporation

AS SELLER,

NH SOUTHRIDGE LLC,
a California limited liability company,

AS BUYER

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TABLE OF CONTENTS
Page

1. PURCHASE AND SALE. ...................................................................................................1

2. PURCHASE PRICE. ...........................................................................................................1

2.1 Deposits ..................................................................................................................1

2.2 Deposit of Balance .................................................................................................2

3. ESCROW. ............................................................................................................................2

3.1 Opening of Escrow ................................................................................................2

3.2 Escrow Instructions ................................................................................................2

3.3 Termination/Cancellation ......................................................................................3

4. ACTIONS PENDING CLOSING. ......................................................................................3

4.1 Due Diligence. .......................................................................................................3

4.2 Title. .......................................................................................................................6

4.3 Development Entitlements ....................................................................................6

5. DESCRIPTION OF PROPERTY. .......................................................................................7

5.1 The Real Property ..................................................................................................7

6. CONDITIONS TO CLOSING. ...........................................................................................7

6.1 Buyer’s Closing Conditions ...................................................................................7

6.2 Seller's Closing Conditions ....................................................................................8

7. CLOSING. ...........................................................................................................................8

7.1 Closing Date ...........................................................................................................8

7.2 Deliveries by Seller ................................................................................................8

7.3 Deliveries by Buyer ...............................................................................................9

7.4 Actions by Escrow Agent ......................................................................................9

7.5 Prorations/Apportionment ....................................................................................10

7.6 Closing Costs .......................................................................................................11

7.7 Closing Statement ................................................................................................11

7.8 Deliveries Outside of Escrow ..............................................................................11

8. SELLER’S REPRESENTATIONS AND WARRANTIES. .............................................12

8.1 Due Organization .................................................................................................12

8.2 Seller’s Authority; Validity of Agreements .........................................................12

8.3 No Third-Party Rights ..........................................................................................12 444
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8.4 Litigation ..............................................................................................................12

8.5 Zoning and Condemnation ...................................................................................12

8.6 No Violations of Environmental Laws ................................................................12

8.7 No Other Commitments .......................................................................................13

8.8 Wells ....................................................................................................................13

9. BUYER’S REPRESENTATIONS AND WARRANTIES. ..............................................14

9.1 Due Organization .................................................................................................14

9.2 Buyer’s Authority; Validity of Agreements.........................................................14

10. SURVIVAL. ......................................................................................................................14

11. AS-IS..................................................................................................................................14

12. RISK OF LOSS..................................................................................................................15

12.1 Condemnation ......................................................................................................15

12.2 Casualty ................................................................................................................15

13. REMEDIES........................................................................................................................16

13.1 Default by Seller ..................................................................................................16

13.2 Default by Buyer ..................................................................................................16

14. BROKERS .........................................................................................................................17

15. MISCELLANEOUS PROVISIONS. .................................................................................17

15.1 Entire Agreement .................................................................................................17

15.2 Modification; Waiver ...........................................................................................17

15.3 Notices .................................................................................................................17

15.4 Expenses ..............................................................................................................18

15.5 Severability ..........................................................................................................19

15.6 Successors and Assigns ........................................................................................19

15.7 Counterparts .........................................................................................................19

15.8 Governing Law; Jurisdiction; ..............................................................................19

15.9 Headings ..............................................................................................................19

15.10 Time of Essence ...................................................................................................19

15.11 Further Assurances ...............................................................................................19

15.12 Construction .........................................................................................................20

15.13 Attorneys’ Fees ....................................................................................................20

15.14 Business Days ......................................................................................................20

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1 PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this "Agreement") is made and entered this ____ day of _______, 20__, (the "Effective Date"), by and between CITY OF FONTANA, a municipal corporation ("Seller"), and NH SOUTHRIDGE LLC, a California limited liability company ("Buyer "), for the purpose of setting forth the agreement of the parties and to provide instructions to Escrow Agent with respect to the transaction contemplated by this Agreement. Seller and Buyer are sometimes individually referred to herein as a "Party" and, together, as the "Parties."

RECITALS
This Agreement is entered into with reference to the following recitals of fact (“Recitals”) that Seller and Buyer believe to be true as of the Effective Date of this Agreement:

A. Seller is the owner of an undivided fee simple interest in certain real property located in the City of Fontana ("City"), San Bernardino County (" County"), State of California, known as County of San Bernardino Assessor Parcel Number 0237-411-13, and as more particularly described on Exhibit "A " attached hereto (the "Land"). The Land, together with any Improvements (as defined in Section 5), are referred to in this Agreement as the "Property." B. Buyer is the owner of the adjacent parcel of land [APN: 0237-411- 14] (“Buyer’s Parcel”).

C. Seller desires to sell, transfer, and convey the Property to Buyer, and Buyer desires to purchase and acquire the Property from Seller, upon and subject to the terms and conditions set forth in this Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree, and instruct Escrow Agent, as follows:

1. PURCHASE AND SALE.

Subject to and upon all of the terms and conditions of this Agreement, Seller agrees to sell, transfer, and convey to Buyer, and Buyer agrees to purchase and acquire from Seller, the Property.

2. PURCHASE PRICE.

The purchase price of the Property (the "Purchase Price") shall be One Million Five Hundred Twenty Five Thousand Dollars ($1,525,000.00). The Purchase Price shall be payable as follows:

2.1 Deposit . Within one (1) day following the "Opening of Escrow" (as hereinafter defined), Buyer shall deposit into "Escrow" (as hereinafter defined) the sum of Twenty -Five 446
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2 Thousand Dollars ($25,000) (which amount, together with any and all interest earned thereon, shall hereinafter be referred to as the " Deposit"). The Deposit shall be fully refundable to Buyer for whatever reason from the Opening of Escrow through the end of the Due Diligence Period (the “Deposit Period”). Thereafter, the Deposit shall become non- refundable, except as specifically provided otherwise herein, and shall be credited against the Purchase Price at Closing.

2.1.1 Refund of Deposit. In the event that Buyer delivers its Feasibil ity Notice, but subsequently elects to terminate this Agreement due to (a) a Seller Default, as defined in Section 12.1 hereunder, (b) a failure of a Buyer’s Condition to Closing, or (c) the occurrence of any other event which by the terms of this Agreement gives rise to Buyer’s right to terminate this Agreement and receive a refund of the Deposit, then, subject to the terms of Section 12.1, (i) the Deposit shall be returned by Escrow Agent to Buyer, or to the extent previously released to Seller, and refunded to Buyer by Seller, (ii) this Agreement and the Escrow shall terminate, and (iii) the Parties shall have no further obligation to one another with respect to this Agreement, except with respect to such provisions which by their terms survive the termination of this Agreement.

2.1.2 In
terest . The Deposit and any other cash held by Escrow Agent for the benefit of Buyer shall be held in a federally insured account, with any account set up charges borne by Buyer.

2.2 D ep osit of Balance. Buyer shall, at least one (1) business day prior to Closing (as defined in Section 7.1), deposit into Escrow in the form of wire transfer, cash or a certified or bank cashier’s check for immediately available funds, the amount of the Purchase Price less the Deposit, plus Buyer's closing costs and Buyer's share of any prorations to be made in accordance with this Agreement.

3. ESCROW.

3.1 Opening of Escrow . Buyer and Seller shall cause an escrow (" Escrow") to be opened with Fidelity National Title Insurance Company at 3237 E. Gausti Road, Suite 105, Ontario, CA 91761, Attention: Mary Lou Adame , Escrow Officer ("Escrow Agent") by delivery to Escrow Agent of a fully executed copy of this Agreement. Escrow Agent shall promptly deliver to Buyer and Seller written notice of the date of the “Opening of Escrow.” As used herein, the term "Opening of Escrow" means the day on which Escrow Agent receives a fully executed copy of this Agreement and has notified each Party in writing of such receipt.

3.2 Escrow Instructions . This Agreement shall constitute escrow instructions to Escrow Agent as well as the agreement of the Parties. In the event that any other printed escrow instructions are requested of the Parties and the terms thereof conflict or are inconsistent with any provision of this Agreement or any deed, instrument, or document executed or delivered in connection with the transaction contemplated hereby, the provisions of this Agreement, or such deed, instrument, or document shall control. Escrow Agent is hereby appointed and designated to act as Escrow Agent and instructed to deliver, pursuant to the terms of this Agreement, the documents and funds to be deposited into Escrow as herein provided.

3.3 T
ermination/Cancellation . Upon any termination or cancellation (the terms being used interchangeably herein) by either of the Parties as expressly allowed under this Agreement (including, without limitation, any deemed termination or cancellation), (a) the Deposit shall be 447
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3 delivered to the Party that t his Agreement specifies is entitled thereto; (b) all documents, instruments, and funds delivered into Escrow shall be returned to the Party that delivered the same into Escrow, and (c) the Parties shall thereafter be relieved from further liability hereunder, except with respect to any obligations under this Agreement that are expressly stated to survive any termination of this Agreement. A copy of any notice of termination allowed under this Agreement shall be sent to Escrow Agent by the Party electing to terminate. Upon a termination or cancellation by either of the Parties for any reason other than a default by Seller, Buyer shall deliver to Seller copies of all third-party reports, plans, studies, applications or any other matters obtained by or prepared for Buyer in connection with Buyer’s review of the Property and which relate to the physical condition of the Property, including, without limitation, any engineering and environmental reports completed and/or obtained by Buyer in connection with Buyer’ s review of the Property ("Property Condition Documents"), but excluding any documents that are subject to the attorney client privilege or that contain proprietary, confidential or financial information.

Seller understands and acknowledges that neither Buyer nor any of Buyer's representatives makes any representation or warranty to Seller as to the accuracy or completeness of the Property Condition Documents and that Buyer and Buyer's representatives have not made or will not make any attempt to verify th e data contained therein. Seller agrees that Buyer and Buyer's representatives shall not have any liability to Seller as a result of Seller’s use of the Property Condition Documents.

4. ACTIONS PENDING CLOSING.

4.1 Due Diligence

4.1.1 Property Materials.

4.1.1.1 Within five (5) days following the Opening of Escrow, Seller shall, at Seller’s sole cost and expense, to the extent within the Seller’s possession or control, provide to Buyer copies of all of the following documents (collectively, the " Property Materials"):
(a) All existing environmental reports for the Property; (b) All leases, occupancy agreements, operating agreements, and licenses currently in effect at the Property; and
(c) A Natural Hazards Disclosure Report in conformity with the California Natural Hazards Disclosure Act.

4.1.1.2 Seller shall promptly furnish to Buyer for its review (a) any of the items described in Section 4.1.1.1 that may come into Seller’s possession or control from and after the date of this Agreement, and (b) any additional documents and information in the possession or control of Seller reasonably requested in writing by Buyer. Except as provided in Section 8, Buyer understands and acknowledges that neither Seller nor any of Seller's representatives makes any representation or warranty to Buyer as to the accuracy or completeness of the Property Materials and that Seller and Seller's representatives shall have not made or will not make any attempt to 448
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4 verify the data contained therein. Buyer agrees that Seller and Seller's representatives shall not have any liability to Buyer as a result of Buyer's use of the Property Materials.

4.1.2 Buyer’s Diligence Tests.

4.1.2.1 Until 5:00 pm (Pacific Time) on the date which is thirty (30) days from the Effective Date of this Agreement, (the “Due Diligence Period”), Buyer and its employees, agents, consultants, and contractors shall be entitled, at Buyer’s sole cost and expense, with 2 Business Days’ notice to: (a) enter onto the Property to perform any inspections, investigations, studies, and tests of the Property (including, without limitation, physical, engineering, soils, geotechnical, and environmental tests) that Buyer deems reasonable; and (b) investigate such other matters pertaining to the Property as Buyer may desire. Notwithstanding the foregoing, Buyer shall not conduct any invasive testing on the Property without the prior written consent of Seller, which consent shall not be unreasonably withheld, delayed or conditioned. Any entry by Buyer onto the Property shall be subject to, and conducted in accordance with, all applicable laws.

Further, Buyer shall coordinate all Buyer inspection activities in advance with Seller to limit interference with Seller’s current operations of the Property.

4.1.2.2 Buyer shall keep the Property free and clear of any mechanics' liens and indemnify, protect, defend, and hold Seller and Seller’s partners, officers, directors, shareholders, managers, members, agents, employees and/or licensees at the Property, and representatives (each an "Indemnified Party" and collectively, the "Indemnified Parties") harmless from and against any and all claims (including, without limitation, claims for mechanic’s liens or materialman’s liens), causes of action, demands, obligations, losses, damages, liabilities, judgments, costs, and expenses (including, without limitation, reasonable attorneys’ fees, charges, and disbursements) (collectively, "Claims") in connection with or arising out of any inspections of the Property carried on by or on behalf of Buyer pursuant to the terms hereof, provided, however, that Buyer shall have no responsibility or liability for (a) the gross negligence or willful misconduct of any Indemnified Party; (b) any adverse condition or defect on or affecting the Property not caused by Buyer or its employees, agents, consultants, or contractors but discovered or impacted during their inspections including, without limitation, the pre -existing presence or discovery of any matter (such as, but not limited to, any Hazardous Substance (as hereinafter defined)); and/or (c) the results or findings of any inspection.

4.1.2.3 Upon completion of Buyer's inspections, Buyer shall promptly repair any material damage to the Property caused by its entry thereon and restore the Property to substantially the same conditions as it existed prior to Buyer's entry under this Section 4.1.2.

4.1.2.4 The provisions of this Section 4.1.2 shall survive the Closing or the earlier termination of this Agreement.
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5 4.1.3 Buyer’s Termination Right. Buyer shall have the right at any time during the Due Diligence Period to terminate this Agreement by delivering a written notice of such termination to Seller and Escrow Agent (“Termination Notice”). Upon receipt of a Termination Notice, Escrow Agent shall refund any Deposit to Buyer. By no later than the last day of the Due Diligence Period, Buyer shall indicate its satisfaction and/or waiver of the Due Diligence condition described in this Section 4.1 by delivering written notice (" Feasibility Notice") to Seller a nd Escrow Agent. If Buyer fails to timely deliver a Termination Notice or a Feasibility Notice, then this Agreement and the Escrow shall be automatically deemed terminated, and the Deposit will not be refunded to Buyer, but rather will be transferred to Seller by Escrow Agent.

4.2 Title

4.2.1 Deliveries by Seller . Within five (5) Business Days after the Opening Escrow, Seller shall cause Fidelity National Title Insurance Company ("Title Insurer") to issue and deliver to Buyer (a) a current /updated commitment for an CLTA standard coverage Owner’s Policy of Title Insurance for the Property (the " Title Report") and (b) legible copies of all documents referenced therein (collectively with the Title Report, the "Title Documents").

4.2.2 B uyer’s Review of Titl e. Buyer shall have fifteen (15) days from the Opening of Escrow ("Title Review Date") to notify Seller in writing of any objection that Buyer may have to any matters reported or shown in any survey or the Title Documents or any amendments or updates thereof (a "Buyer's Objection Letter") (provided, however, that if any such amendments or updates are received by Buyer after or within five (5) Business Days before the Title Review Date, Buyer shall have five (5) Business Days following Buyer’s receipt of such amendment or update and copies of all documents referenced therein to notify Seller of objections to matters shown on any such amendment or update that were not disclosed on the previously delivered survey or Title Documents and the Closing Date shall a utomatically be extended as necessary to facilitate such notice period and any subsequent periods for Seller's response and Buyer's election as provided in subsections (i) and (ii), below). Matters shown as exceptions to coverage in the Title Report (or any amendments or updates thereof) that are not timely objected to by Buyer as provided above shall be deemed to be " Permitted Exceptions." Seller shall cooperate, at no cost to Seller, with Buyer to eliminate matters objected to by Buyer, but, except as set forth in the last sentence of this Section

4.2.2, Seller shall have no obligation to cure or
correct any matter objected to by Buyer. On or before the tenth (10th) Business Day following Seller’s receipt of Buyer’s Objection Letter, Seller may elect, by delivering written notice of such election to Buyer and Escrow Agent ("Seller's Response"), to cause Title Insurer to remove or insure over any matters objected to in Buyer’s Objection Letter. If Seller fails to deliver Seller’s Response within the period set forth above, it shall be deemed an election by Seller not to cause Title Insurer to so remove or insure over such objections. If Seller elects or is deemed to have elected not to cause Title Insurer to so remove or insure, or if Buyer determines, in its sole discretion, that any proposed endorsement for or insurance over an objected matter is unsatisfactory, then Buyer must elect, by delivering written notice of such election to Seller and Escrow Agent on or before the earlier to occur of (a) the tenth (10th) Business Day following Buyer’s receipt of Seller’s Response or (b) if no Seller’s Response is received by Buyer, the tenth(10th) Business Day following the date on which Seller shall have been deemed to have responded, as provided above, to: (i) terminate this Agreement, in which case the Deposit, to the extent previously deposited in Escrow, shall be immediately returned to Buyer; or (ii) proceed with 450
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6 this transaction, in which event those objected to exceptions or matters that Seller has not elected to cause Title Insurer to so remove or insure shall be deemed to be Permitted Exceptions. In the event that Buyer fails to make such election on a timely basis, then Buyer shall be deemed to have elected to terminate this Agreement in accordance with the preceding clause (i). Notwithstanding anything else stated herein, in all events, regardless of whether Buyer has given notice of objection as stated above Seller shall be obligated to satisfy and otherwise remove all monetary and financial liens and encumbrances in existence as of the Agreement Date or incurred by Seller on or before Closing hereunder (other than current taxes not yet due) and any additional encumbrances incurred by Seller after the Agreement Date in violation of any provision of this Agreement, and, except as may be otherwise specifically set forth in this Agreement, terminate all leases, possessory agreements, licenses, and operating agreements that affect the Property and Buyer need not object to any such matters. In furtherance thereof, Seller agrees not to cause or create any additional encumbrances or other matters affecting title to the Property to be incurred following the Agreement Date that are not satisfied or otherwise removed on or before Close as contemplated above.

4.2.3 Condition of Title at Closing. Upon the Closing, Seller shall sell, transfer, and convey to Buyer fee simple title to the Property by a duly executed and acknowledged grant deed in the form of Exhibit "B" attached hereto (the "Grant Deed"), subject only to the Permitted Exceptions and the reservations and other matters, if any, referenced or described in said Grant Deed.

4.3 D
evelopment Entitlements

4.3.1 Entitlements. Collectively entitlements shall mean all necessary entitlements, permits, approvals, authorizations, licenses and consents and modifications for commencement of Buyer’s planned development and improvement of the Property, including without limitation, a pre -application meeting, environmental impact reports and/or negative declarations, specific plan(s), general plan amendment(s), variances, development agreements, a tentative tract map, subdivision maps, zoning authorizations and changes, conditional use permits, housing agreements, site plans, drawings, specifications and any other authorizations and approvals (“Entitlements”).

4.3.2 E
xpiration of Buyer’s Tentative Tract Map. If Buyer’s approved tentative tract map for a residential subdivision to the Property expires, Seller shall have the right, but not the obligation to exercise the option and repurchase the Property for the sum of One Million Five Hundred Twenty Five Thousand Dollars ($1,525,000.00)(“Repurchase Price”) within one (1) year of the expiration of the tentative tract map (“Seller’s Repurchase Option.”) Upon Seller exercising Seller’s Repurchase Option and delivery of the Repurchase Price within said one (1) year period, Buyer shall deliver to Seller a duly executed and acknowledged grant deed, in the form attached here to as Exhibit “C”, conveying fee simple title to the Property to the Seller. Any costs, fees and damages incurred by Seller in connection with Seller’s enforcement of this Section 4.3.2 shall be paid by Buyer to Seller. This provision shall survive the Closing. 451
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7 5. DESCRIPTION OF PROPERTY

5.1 The Property. As used in this Agreement, the term "Property" shall mean, collectively, all of Seller’s right, title, and interest in and to: (a) the Land; (b) all improvements thereon (the "Improvements"); and (c) all of the rights, privil eges, appurtenances, hereditaments, easements, reversions, and remainders pertaining to or used in connection with the Land and/or any of the Improvements, including, without limitation, all (i) development rights and credits, air rights, water, water rights, and water stock relating to the Land, (ii) strips and gores, streets, alleys, easements, rights-of-way, public ways, or other rights appurtenant, adjacent, or connected to the Land, and (iii) minerals, oil, gas, and other hydrocarbon substances in, under, or that may be produced from the Land.

6. CONDITIONS TO CLOSING.

6.1 Buyer’s Closing Conditions. The obligation of Buyer to complete the transaction contemplated by this Agreement is subject to the following conditions precedent (and conditions concurrent, with respect to deliveries to be made by Seller at the Closing) (the "Buyer's Closing Conditions"), which conditions may be waived, or the time for satisfaction thereof extended, by Buyer only in a writing executed by Buyer:

6.1.1 T
itle . Title Insurer shall be irrevocably and unconditionally prepared and committed to issue to Buyer (with an effective date not earlier than the Closing Date), a CLTA standard coverage owner’s policy of title insurance ("C LTA Standard Policy") in favor of Buyer for the Property (a) showing fee title to the Property vested in Buyer, (b) with liability coverage in an amount equal to the Purchase Price, (c) with those endorsements reasonably requested by Buyer including, without limitation, a Mechanic's Lien Endorsement, and (d) containing no exceptions other than the Permitted Exceptions and the reservations and other matters referenced or described in the Grant Deed (the "Owner’s Title Policy"). Buyer may, at its expense, obtain from the Title Company an ALTA extended coverage owner's policy provided the issuance of such ALTA form title policy shall not be a condition to Close of Escrow and shall cause no delay to the Close of Escrow. In the event Buyer elects to obtain an ALTA extended coverage policy, Buyer shall obtain an ALTA Survey, at its sole cost and expense, in a timely manner so as to facilitate the issuance of the ALTA extended coverage policy upon the Close of Escrow.

6.1.2 S
eller’s Due Performance. All of the representations and warranties of Seller set forth in Section 8 shall be true, correct, and complete in all material respects as of the Closing Date, and Seller, on or prior to the Closing Date, shall have complied with and/or performed all of the obligations, covenants, and agreements required on the part of Seller to be complied with or performed pursuant to the terms of this Agreement on or prior to the Closing.

6.1.3 P
hysical Condition of Property. The physical condition of the Property shall be substantially the same on the Closing Date as on the Agreement Date, except for reasonable wear and tear, the presence of any agricultural products being grown depending on the closing date, and any damages due to any act of Buyer or Buyer’s representatives.

6.1.4 N
o Moratorium. There shall be no general, agency- wide moratorium, injunction, zoning change, restraining order, or similar restriction imposed by the City, County, or 452
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8 any other governmental authority, utility provider, court, or administrative body that precludes, restricts or prevents utility service, the issuance of building permits, utility services or certificates of occupancy with respect to the Property and/or the construction of residences on the Property.

6.1.5 Bankruptcy. No action or proceeding shall have been commenced by or against Seller under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors, and no attachment, execution, lien, or levy shall have attached to or been issued with respect to Seller’s interest in the Property or any portion thereof.

6.1.6 N
o Entitlement. The “Final Approval” (defined below) of the Tentative Tract Map has occurred. “Final Approval” shall be deemed to have occurred with respect to the Tentative Tract Map when (i) the Tent ative Tract Map has been approved officially by the appropriate governmental agency through duly authorized resolution, ordinance or administrative determination (or similar action) and all applicable and legally valid periods for the filing of an administrative appeal, judicial challenge or request for reconsideration related thereto shall have expired.

6.1.7 P
ossession/Removal of Personal Property. Upon the Close of Escrow, Seller shall deliver exclusive possession of the Property to Buyer. Prior to the Close of Escrow Seller shall have the right to remove any or all improvements and Seller's equipment, trade fixtures or other personal property.

6.2 S
eller's Closing Conditions. All of the representations and warranties of Buyer set forth in Section 9 shall be true, correct, and complete in all material respects as of the Closing Date, and Buyer, on or prior to the Closing Date, shall have complied with and/or performed all of the obligations, covenants, and agreements required on the part of Buyer to be complied with or performed pursuant to the terms of this Agreement on or prior to the Closing.

7. CLOSING.

7.1 Closing Date. Subject to the provisions of this Agreement, the Closing sh all take place on or before the date which is sixty (60) days from the expiration of the Due Diligence Period ("Closing Date"). As used herein, the " Closing" shall mean the recordation of the Grant Deed in the Official Records.

7.2 D eliveries by Seller . On or before the Closing Date, Seller, at its sole cost and expense, shall deliver or cause to be delivered into Escrow the following items, documents, and instruments, each dated as of the Closing Date, fully executed and, if appropriate acknowledged, and, if applicable, in proper form for recording:

7.2.1 G
rant Deed . The Grant Deed conveying the Property to Buyer;

7.2.2 Non-Foreign Affidavit. A Non -Foreign Affidavit in the form attached hereto as Exhibit "D" (the "Non-Foreign Affidavit");

7.2.3 State Affidavit. A California Franchise Tax Board Form 593- C (the "State Affidavit");
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9 7.2.4 Owner’s Affidavit . An owner’s affidavit or seller’s certificate duly executed by Seller in the form customarily required by title insurance companies in the county in which the Property is located, in connection with the issuance of title insurance, to remove standard exceptions for mechanics liens, the gap period from the latest title update of Buyer’s title insurance commitment and Parties in possession;

7.2.5 P
roof of Authority. Such proof of Seller’s authority and authorization to enter into this Agreement and the transaction contemplated hereby, and such proof of the power and authority of the individual(s) executing or delivering any instruments, documents, or certificates on behalf of Sel ler to act for and bind Seller as may be reasonably required by Title Insurer or Escrow Agent; and

7.2.6 O
ther . Such other items, documents, and instruments as may be reasonably required by Buyer, Title Insurer, Escrow Agent, or otherwise in order to effectuate the provisions of this Agreement and the Closing and/or otherwise to fulfill the covenants and obligations to be performed by Seller at the Closing pursuant to this Agreement.

7.3 D
eliveries by Buyer. On or before the Closing Date, Buyer, at its sole cost and expense, shall deliver or cause to be delivered into Escrow the following funds and the following items, documents, and instruments, each dated as of the Closing Date, fully executed and, if appropriate acknowledged, and, if applicable, in proper form for recording:

7.3.1 P
urchase Price. Cash or other immediately available funds in an amount equal to the unpaid sum of the Purchase Price (less the Deposit) and all of Buyer’s share of the Closing Costs (as hereinafter defined) (and otherwise sufficient to close the transaction contemplated herein);

7.3.2 P
roof of Authority. Such proof of Buyer’s authority and authorization to enter into this Agreement and the transaction contemplated hereby, and such proof of the power and authority of the individual(s) executing or delivering any instruments, documents, or certificates on behalf of Buyer to act for and bind Buyer as may be reasonably required by Title Insurer or Escrow Agent; and

7.3.3 O
ther . Such other items, documents, and instruments as may be reasonably required by Seller, Title Insurer, Escrow Agent, or otherwise in order to effectuate the provisions of this Agreement and the Closing and/or otherwise to fulfill the covenants and obligations to be performed by Buyer at the Closing pursuant to this Agreement.

7.4 A
ctions by Escrow Agent . Provided that Escrow Agent shall not have received written notice from Buyer or Seller of the failure of any condition to the Closing or of the termination of the Escrow and this Agreement, when Buyer and Seller have deposited into Escrow the documents and funds required by this Agreement and Title Insurer is irrevocably and unconditionally prepared and committed to issue the Owner’s Title Policy in accordance with the terms hereof, Escrow Agent shall, in the order and manner herein below indicated, take the following actions:
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10 7.4.1 Recording. Cause the Grant Deed and any other documents customarily recorded and/or that the Parties hereto may mutually direct to be recorded in the Official Records and obtain conformed copies thereof for distribution to Buyer and Seller.

7.4.2 F unds. Disburse all funds as follows:

7.4.2.1 Pursuant to the Closing Statement (as hereinafter defined), retain for Escrow Agent’s own account all escrow fees and costs, disburse to Title Insurer the fees and expenses incurred in connection with the issuance of the Owner’s Title Policy, and disburse to any other persons or entities entitled thereto the amount of any other Closing Costs;

7.4.2.2 Disburse to Seller an amount equal to the Purchase Price, less or plus the net debit or credit to Seller b y reason of the prorations and allocations of Closing Costs provided for in this Agreement; and

7.4.2.3 Disburse to the Party who deposited the same any remaining funds in the possession of Escrow Agent after the payments pursuant to Sections 7.4.2.1 and

7.4.2.2 above have been completed.

7.4.3 Delivery of Documents . Deliver: (a) to Seller (i) one original of all documents deposited into Escrow (other than the Grant Deed, the other documents recorded pursuant to the terms of this Agreement, the Non -Foreign Affidavit, the State Affidavit and the General Assignment), (ii) one copy of the Non- Foreign Affidavit, the State Affidavit and the General Assignment, and (iii) one conformed copy of each document recorded pursuant to the terms of this Agreement; and (b) to Buyer, (i) one original of all documents deposited into Escrow (other than the Grant Deed and the other documents recorded pursuant to the terms of this Agreement, but including, without limitation, the Non-Foreign Affidavit and the State Affidavit), and (ii) the one conformed copy of each document recorded pursuant to the terms of this Agreement. Originals of any documents recorded at Closing shall be delivered after such recording as indicated thereon.

7.4.4 O
wner's Title Policy . Cause Title Insurer to issue or be irrevocably and unconditionally prepared and committed to issue the Owner's Title Policy to Buyer.

7.5 P rorations/Apportionment.

7.5.1 Method of Proration. Taxes and assessments affecting the Property shall be prorated between Buyer and Seller as of the Closing Date based on a 365- day year. All non- delinquent real estate taxes and assessments on the Property shall be prorated based on the actual current tax bill. Seller is exempt from ad valorum property taxes and as such shall not incur any property taxes as a p art of the transaction, Buyer shall pay any proration for the current assessed value and Buyer shall bear all real property taxes, including all supplemental taxes, allocable to the period from and after the Closing. If any real property taxes or assessments or any expenses attributable to the Property and allocable to the period prior to the Closing are discovered or billed after the Closing, the P arties shall make any necessary adjustment after the Closing by cash payment to the Party entitled thereto within five (5) Business Days following the discovery thereof or the receipt by any Party of the bill therefor, as the case may be, so that Seller shall have borne all assessments to which it is not exempt and expenses allocable to the period prior to the Closing 455
16498.00100\40032432.6

11 and Buyer shall bear all real property taxes, assessments and expenses allocable to the period from and after the Closing.

7.5.2 Survival. The obligations under this Section 7.5 shall survive the Closing and the delivery and recordation of the Grant Deed for the Property.

7.6 C losing Costs. Each Party shall pay its own costs and expenses arising in connection with the Closing (including, without limitation, its own attorneys’ and advisors’ fees, charges, and disbursements), except the following costs (the "Closing Costs"), which shall be allocated between the Parties as follows:

7.6.1 Escrow Agent’s escrow fees and costs shall be paid one-half by Seller and one-half by Buyer;

7.6.2 The cost of the Owner's Title Policy attributable to the standard coverage portion shall be paid by Buyer;

7.6.3 The cost of the Owner's Title Policy attributable to the extended coverage portion shall be paid by Buyer;

7.6.4 The cost of any items required to be provided by Seller pursuant to Section

4.2.2, shall be paid by Seller, and the costs of any other endorsements to the Owner’s Title Policy shall be paid by Buyer;

7.6.5 Seller shall pay the cost of any documentary transfer taxes in connection with the recording of the Grant Deed;

7.6.6 Buyer shall pay all recording costs for recording the Grant Deed; and

7.6.7 All other closing fees and costs shall be charged to and paid by Seller and Buyer in accordance with customary practices in the County.

7.7 Closing Statement. Three (3) Business Days prior to the Closing Date, Esc row Agent shall deliver to each of the Parties for their review and approval a preliminary closing statement (the "Preliminary Closing Statement") setting forth: (a) the proration amounts allocable to each of the Parties pursuant to Section

7.5; and (b) the Closing Costs allocable to each of the Parties pursuant to Section 7.6. Based on each of the Party’s comments, if any, regarding the Preliminary Closing Statement, Escrow Agent shall revise the Preliminary Closing Statement and deliver a final, signed version of a closing statement to each of the Parties at the Closing (the "Closing Statement").

7.8 Deliveries Outside of Escrow . Upon the Closing, Seller shall deliver sole and exclusive possession of the Property to Buyer, subject only to the Permitted Exceptions. Further, Seller hereby covenants an d agrees to deliver to Buyer, on or prior to the Closing, including, without limitation, the original Property Materials to the extent within Seller’s possession or control. Effective immediately upon the Closing, any personal property remaining on the La nd shall be deemed abandoned and may be removed and disposed of by Buyer at its sole cost and expense. This Section 7.8 shall survive the Closing.
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12 8. SELLER’S COVENANTS, REPRESENTATIONS AND WARRANTIES.

Seller represents, and warrants to Buyer, as of the Agre ement Date and as of the Closing Date, as follows:

8.1 Due Organization. Seller is a municipal corporation duly formed under the laws of the State of California.

8.2 S eller’s Authority; Validity of Agreements . Subject to approval of this Agreement at a duly called and noticed meeting of City Council, Seller has full right, power, and authority to sell the Property to Buyer as provided in this Agreement and to carry out its obligations hereunder.

The individuals executing this Agreement and the instruments referenced herein on behalf of Seller has/have the legal power, right, and actual authority to bind Seller to the terms hereof and thereof.

This Agreement is, and all other instruments, documents and agreements to be executed, and delivered by Seller in connect ion with this Agreement shall be, duly authorized, executed, and delivered by Seller and the valid, binding, and enforceable obligations of Seller (except as enforcement may be limited by bankruptcy, insolvency, or similar laws) and do not, and as of the Closing Date will not result in any violation of, or conflict with, or constitute a default under, any provisions of any agreement of Seller or any mortgage, deed of trust, indenture, lease, security agreement, or other instrument, covenant, obligation, or agreement to which Seller or the Property is subject, or any judgment, law, statute, ordinance, writ, decree, order, injunction, rule, ordinance, or governmental regulation or requirement affecting Seller or the Property.

8.3 N
o Third- Party Rights. Except as disclosed in the Title Report, Seller is not aware of any leases or occupancy agreements that grant third -Parties any possessory or usage rights to all or any part of the Property.

8.4 L itigation . Seller has received no written notice of any legal proceedin gs or administrative actions of any kind or character adversely affecting the Property or Seller’s interest therein, including any federal, state, or local law, ordinance, or regulation relating to the environmental conditions in, at, on, under, or about the Property, including, but not limited to, soil and groundwater conditions ("Environmental Laws").

8.5 A
ctual Knowledge. For purposes hereof, "Seller is not aware" or "to Seller's knowledge," or like terms shall mean the current actual knowledge of Deputy C ity Manager , without implying any duty of investigation or inquiry. In furtherance thereof, Seller hereby warrants and represents that Deputy City Manager is the Seller's representative most knowledgeable regarding the Property.

8.6 B
uyer Covenant to Defend t his Agreement. The Buyer acknowledges that the Seller is a “public entity” and/or “public agency” as defined under applicable California law. Therefore, the Seller must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies . Also, as a public body, the Sellers’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Buyer assumes the risk of delays and damages that may result to the Buyer from any third -party legal actions related to the Seller’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion 457
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13 by the Seller is determined to have occurred. If a government entity delivers a notice of violation, or a private entity files a claim , or any third party initiates a legal action , regarding the Seller ’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement (each, an “Action”), the Seller may terminate this Agreement on thirty (30) days written notice, without any further obligation to perform the terms of this Agreement and without any liability to the Buyer resulting from such termination, unless the Buyer unconditionally agrees to indemnify and defend the Seller, with legal counsel acceptable to the Seller, against such Action, as provided in the next sentence. Within thirty (30) days of receipt of the Seller’s notice of intent to terminate this Agreement, as provided in the preceding sentence, the Buyer may offer to defend the Seller, with legal counsel reasonably acceptable to the Seller , against the Action and pay all costs, including reasonable attorneys’ fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the A ction. Any such offer from the Buyer must be in writing and reasonably acceptable to the Seller in both form and substance. Nothing contained in this Section

8.6 shall be deemed or construed to be an express or implied admission that the Seller is liable to the Buyer or any other person or entity for damages alleged from any alleged or established failure of the Seller to comply with any statute. This Section 8.6 shall survive the Closing.

8.7 Survival. All of the representations, warranties, and agreements of Seller set forth in this Agreement shall be true upon the Agreement Date, shall be deemed to be repeated at and as of the Closing Date, and shall survive the delivery of the Grant Deed and the Closing for a period of one (1) year. Prior to a termination of this Agreement, Seller shall not take any action, fail to take any required action, or willfully allow or consent to any action that would cause any of Seller’s representations or warranties to become untrue. If any representation or warranty of Seller was true as of the date of this Agreement, but is not true as of the Closing Date, then Seller shall disclose this changed fact to Buyer in writing. So long as Seller makes the foregoing disclosure and the change of circumstances regarding the representation or warranty did not arise due to the fault of Seller, then Seller shall not be in breach of this Agreement due to the fact that the representation or warranty has become untrue as of the Closing Date; provided, however, the fact that any representation or warranty under this Section 8 is untrue as of the Closing Date shall still be a failure of a condition pursuant to Section 6.1.2. Notwithstanding the foregoing, if Buyer has actual knowledge of the incorrectness of any representation or warranty set forth in this Section 8 as of the Close of Escrow and Buyer has not elected to terminate this Agreement as provided herein, then Buyer will be deem ed to have waived any claim against Seller for the incorrectness of such representation or warranty.

9. BUYER’S REPRESENTATIONS AND WARRANTIES.

Buyer represents and warrants to Seller, as of the Agreement Date and as of the Closing Date, as follows:

9.1 Due Organization. Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of California and is authorized to do business in the State of California.

9.2 B uyer’s Authority; Validity of Agreements. Buyer has full right, power, and authority to purchase and acquire the Property from Seller as provided in this Agreement and to 458
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14 carry out its obligations hereunder. The individual(s) executing this Agreement and the instruments referenced herein on behalf of Buyer has/have the legal power, right, and actual authority to bind Buyer to the terms hereof and thereof. This Agreement is, and all other instruments, documents, and agreements to be executed and delivered by Buyer in connection with this Agreement shall be, duly authorized, executed, and delivered by Buyer and the valid, binding, and enforceable obligations of Buyer (except as enforcement may be limited by bankruptcy, insolvency, or similar laws) and do not, and as of the Closing Date will not, violate any provision of any law, statute, ordinance, rule, regulation, agreement or judicial order to which Buyer is a Party or to which Buyer is subject.

10. SURVIVAL. ALL OF THE REPRESENTATIONS, WARRANTIES, AND

AGREEMENTS OF BUYER SET FORTH IN THIS AGREEMENT SH ALL BE TRUE UPON

THE AGREEMENT DATE, SHALL BE DEEMED TO BE REPEATED AT AND AS OF THE

CLOSING DATE AND SHALL SURVIVE THE DELIVERY OF THE GRANT DEED AND THE CLOSING FOR A PERIOD OF ONE (1) YEAR. PRIOR TO A TERMINATION OF THIS

AGREEMENT, BUYER SHALL NOT TAKE ANY ACTION, FAIL TO TAKE ANY

REQUIRED ACTION, OR WILLFULLY ALLOW OR CONSENT TO ANY ACTION THAT WOULD CAUSE ANY OF BUYER’S REPRESENTATIONS OR WARRANTIES TO BECOME UNTRUE.

11. AS-IS. THE PARTIES HEREBY ACKNOWLEDGE AND AGREE AS FOLLOWS: (A) BUYER IS A SOPHISTIC ATED BUYER WHO IS FAMILIAR WITH THIS TYPE OF PROPERTY; (B) EXCEPT AS MAY BE SPECIFICALLY SET FORTH IN THIS

AGREEMENT, THE DEED, AND/OR ANY OTHER DOCUMENT OR INSTRUMENT DELIVERED BY SELLER AT CLOSING (THE " EXPRESS REPRESENTATIONS "),

NEITHER SELLER NOR ANY O F ITS AGENTS, REPRESENTATIVES, BROKERS,

OFFICERS, DIRECTORS, SHAREHOLDERS, MEMBERS, OR EMPLOYEES HAS MADE

OR WILL MAKE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND

WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY; AND (C) THE PROPERTY IS BEING SOLD TO BUYER IN ITS PRESENT "AS IS" CONDITION SUBJECT TO THE EXPRESS REPRESENTATIONS.

SUBJECT TO THE EXPRESS REPRESENTATIONS AND THE TERMS HEREOF, BUYER

WILL BE AFFORDED THE OPPORTUNITY TO MAKE ANY AND ALL INSPECTIONS OF

THE PRO PERTY AND SUCH RELATED MATTERS AS BUYER MAY REASONABLY

DESIRE AND, ACCORDINGLY, SUBJECT TO THE EXPRESS REPRESENTATIONS,

BUYER WILL RELY SOLELY ON ITS OWN DUE DILIGENCE AND INVESTIGATIONS IN PURCHASING THE PROPERTY. IN CONNECTION WITH THE FOREGOING, BUYER

EXPRESSLY AGREES TO WAIVE ANY AND ALL RIGHTS WHICH BUYER MAY HAVE UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:
"
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT

THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR

SUSPECT TO EXI ST 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."

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15 12. RISK OF LOSS.

12.1 Condemnation. If, prior to any Closing, all or any portion of the Property is taken by condemnation or eminent domain (or is the subject of a pending or contemplated taking which has not been consummated), Seller shall immediately notify Buyer in writing of such fact. In such event, Buyer shall have the option to terminate this Agreement upon written notice to Seller given within ten (10) Business Days after receipt of such notice from Seller, in which event the Deposit shall be returned to Buyer. Notwithstanding the foregoing, Buyer's failure to provide writte n notice of Buyer's election to terminate within such ten (10) Business Day period shall be deemed Buyer's election to terminate this Agreement. Prior to any termination or deemed termination of this Agreement, Buyer shall have the right to participate in any proceedings and negotiations with respect to the taking and any transfer in lieu of taking (and Seller shall not consummate any transfer in lieu of taking without Buyer’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed). If Buyer waives the right to terminate this Agreement and elects to proceed with the Closing, then (a) Seller, at, and as a condition precedent to Buyer’s obligation to proceed with, the Closing, must: (i) pay to Buyer (or direct Escrow Agent to credit Buyer against the Purchase Price for) the amount of all awards for the taking (and any consideration for any transfer in lieu of taking) actually received by Seller; and (ii) assign to Buyer by written instrument reasonably satisfactory to Buyer all rights or claims to any future awards for the taking (and any consideration for any transfer in lieu of taking); and (b) the Parties shall proceed to the Closing pursuant to the terms hereof without further modification of the terms of this Agreement.

12.2 C
asualty . Prior to the Closing and notwithstanding the pendency of this Agreement, the entire risk of loss or damage by earthquake, hurricane, tornado, flood, landslide, fire, sinkhole, contamination by hazardous materials or other casualty shall be borne and assumed by Seller. If, prior to the Closing, any portion of the Property is damaged as a result of any earthquake, hurricane, tornado, flood, sinkhole, landslide, fire, contamination by hazardous materials or other casualty, Seller shall immediately notify Buyer in writing of such fact. In such event, Buyer shall have the option to terminate this Agreement upon written notice to Seller given within ten (10) Business Days after receipt of any such notice from Seller, in which event the Deposit shall be returned to Buyer. Notwithstanding the foregoing, Buyer's failure to provide written notice of Buyer's election to terminate within such ten (10) Business Day period shall be deemed Buyer's election to terminate this Agreement. Prior to any termination or deemed termination of this Agreement, Buyer shall have the right to participate in any adjustment of the insurance claim. If Buyer waives the right to terminate this Agreement and elects to proceed with the Closing, then (a) Seller, at, and as a condition precedent to Buyer’s obligation to proceed with, the Closing, must either: (i) pay to Buyer (or direct Escrow Agent to credit Buyer against the Purchase Price for) the amount of any insurance proceeds actually received by Seller plus the amount of any deductible under Seller’s insurance; or (ii) if no insurance proceeds have been received by Seller, assign to Buyer by written instrument reasonably satisfactory to Buyer all rights or claims to the insurance proceeds and credit Buyer against the Purchase Price for any deductible payable under Seller’s insurance policy; and (b) the Parties shall proceed to the Closing pursuant to the terms hereof without further modification of the terms of this Agreement. 460
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16 13. REMEDIES.

Default by Seller. If Seller shal l breach any of the terms or provisions of this Agreement or otherwise fail to perform any of Seller’s obligations under this Agreement at or prior to Closing, and if such failure continues without cure by Seller for five (5) Business Days after Buyer provides Seller and Escrow Agent with written notice thereof (a "Seller Default"), and provided Buyer is not then in default, then Buyer may, as Buyer’s sole remedies for such failure, but without limiting Buyer’s right to recover attorneys' fees pursuant to Section 14.13 below: (a) waive the effect of such matter and proceed to consummate this transaction; (b) cancel this Agreement and receive a full refund of the Deposit and recover from Seller the reasonable out-of-pocket expenses incurred by Buyer related to the Property and this transaction, which amounts shall be payable by Seller to Buyer within five (5) Business Days following receipt by Seller of written request therefor from Buyer together with copies of invoices evidencing such expenses; or (c) proceed with any remedies available to Buyer at law or in equity, which may, without limitation, include the bringing of an action against Seller for specific performance and/or recovery of the Deposit and any other damages suffered or incurred by Buyer as a result of any breach or failure by Seller to perform any of Seller’s obligations under this Agreement.

13.1 Default by Buyer . IF BUYER SHALL BREACH ANY OF THE TERMS OR

PROVISIONS OF THIS AGREEMENT OR OTHERWISE FAIL TO PERFORM ANY OF BUYER’S OBLIGATIONS UNDER THIS AGREEMENT AND IF SUCH FAILURE CONTINUES WITHOUT CURE BY BUYER FOR THREE (3) BUSINESS DAYS AFTER

SELLER PROVIDES BUYER AND ESCROW AGENT WITH WRITTEN NOTICE THEREOF,

AND PROVIDED SELLER IS NOT THEN IN DEFAULT, THEN SELLER MAY WAIVE

SUCH BREACH AND PROCEED TO CONSUMMATE THIS TRANSACTION IN

ACCORDANCE WITH THE TERMS HEREOF, OR SELLER MAY, AS ITS EXCLUSIVE REMEDY (BUT WITHOUT LIMITING SELLER’S RIGHT TO RECOVER ATTORNEYS' FEES PURSUANT TO SECTION 14.13 BELOW), CANCEL THIS AGREEMENT AND

RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND AS CONSIDERATION FOR

THE ACCEPTANCE OF THIS AGREEMENT AND FOR TAKING THE PROPERTY OFF THE MARKET, AND NOT AS A PENALTY. BUYER AND SELLER HAVE DETERMINED

AND HEREBY AGREE THAT IT WOULD BE IMPRACTICAL OR EXTREMELY

DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY

THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER IF BUYER

FAILS TO PERFORM ANY OF ITS OBLIGATIONS IN ACCORDANCE WITH THE

PROVISIONS OF THIS AGREEMENT, AND THE PARTIES AGREE THAT A

REASONABLE ESTIMATE OF SUCH DAMAGES UNDER THE CIRCUMSTANCES IS AN AMOUNT EQUAL TO THE DEPOSIT. ACCORDINGLY, BUYER AND SELLER AGREE

THAT IF BUYER BREACHES ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT

OR OTHERWISE DEFAULTS HEREUNDER, SELLER MAY RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES. THE PAYMENT AND RETENTION OF THE DEPOSIT AS

LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS

INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.

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17 Seller’s Initials Buyer’s Initials

14. BROKERS.

Neither Party has been represented in this transaction by a broker. Each of Buyer and Seller hereby represents and warrants to and agrees with each other that it has not had, and shall not have, any dealings with any third Party to whom the payment of any broker’s fee, finder’s fee, commission, or other similar compensation shall or may become due or payable in connection with the transaction con templated hereby. Seller shall indemnify, defend, protect, and hold Buyer harmless for, from, and against any and all Claims incurred by Buyer by reason of any breach or inaccuracy of the representation, warranty, and agreement of Seller contained in this Section.

Buyer shall indemnify, defend, protect, and hold Seller harmless from and against any and all Claims incurred by Seller by reason of any breach or inaccuracy of the representation, warranty, and agreement of Buyer contained in this Section. The provisions of this Section shall survive the Closing or earlier termination of this Agreement.

15. MISCELLANEOUS PROVISIONS.

15.1 Entire Agreement . This Agreement, including the exhibits attached hereto, constitutes the entire agreement between Buyer and Seller p ertaining to the subject matter hereof and supersedes all prior agreements, understandings, letters of intent, term sheets, negotiations, and discussions, whether oral or written, of the Parties, and there are no warranties, representations, or other agreements, express or implied, made to either Party by the other Party in connection with the subject matter hereof except as specifically set forth herein or in the documents delivered pursuant hereto or in connection herewith.

15.2 M
odification; Waiver . No supplement, modification, waiver, or termination of this Agreement shall be binding unless executed in writing by the Party to be bound thereby. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

15.3 N
otices . All notices, consents, requests, reports, demands or other communications hereunder (collectively, "Notices") shall be in writing and may be given personally, by registered or certified mail, by electronic mail, by courier, or by Federal Express (or other reputable overnight delivery service) for overnight delivery, as follows:

To Buyer: NH Southridge LLC
500 Newport Center Drive, Suite 570
Newport Beach, California 92660
Attention: J. Robert Meserve
Telephone: 949-344-2704
Email: [email protected]

To Seller: City of Fontana
8353 Sierra Avenue
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18 Fontana, California 92335
Attention: City Manager
Telephone: (909) 350-7600
Email: [email protected]

With A Copy To: City Attorney
City of Fontana
Attention: Ruben Duran
Telephone: (213) 787-2569
Email: [email protected]

To Escrow Agent: Fidelity National Title Insurance Company 3237 E. Guasti Road, Suite 105
Ontario, CA 91761
Attention: Mary Lou Adame
Telephone: 909-978-3020
Email: [email protected]

or to such other address or such other person as the addressee Party shall have last designated by Notice to the other Party and Escrow Agent. All Notices shall be deemed to have been given three (3) days following deposit in the United States Postal Service (postage prepaid) or, upon receipt, if sent by overnight delivery service, courier, facsimile transmission (so long as confirmed by the appropriate automatic confirmation page), electronic mail (so long as receipt is acknowledged or otherwise confirmed), or personally delivered. Notice to a Party shall not be effective unless and until each required copy of such Notice is given. The inability to deliver a Notice because of a changed address of which no Notice was given or an inoperative facsimile number for which no Notice was given of a substitute number, or any rejection or other refusal to accept any Notice, shall be deemed to be the receipt of the Notice as of the date of such inability to deliver or rejection or refusal to accept. Any Notice to be given by any Party hereto may be given by legal counsel for such Party. Telephone numbers are provided herein for convenience only and shall not alter the manner of giving Notice set forth in this Section 15.3.

15.4 Expenses. Subject to the provision for payment of the Closing Costs in accordance with the terms of Section 7.6 of this Agreement and of any other provision of this Agreement, whether or not the transaction contemplated by this Agreement shall be consummated, all fees and expenses incurred by any Party hereto in connection with this Agreement shall be borne by such Party.

15.5 Severability. Any provision or part of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall, as to such situation and such jurisdiction, be ineffective only to the extent of such invalidity and shall not affect the enforceability of the remaining provisions hereof or the validity or enforceability of any such provision in any other situation or in any other jurisdiction.

15.6 S
uccessors and Assigns. Neither Seller nor Buyer shall assign its rights under this Agreement without the consent of the other Party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, either Party shall have the right, without the 463
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19 consent of the other, to assign its rights under this Agreement to an affiliate entity directly or indirectly controlling, controlled by or under common control with the assigning Party or an entity in which such assigning Party or such an affiliate directly or indirectly owns a financial and voting interest and directly or indirectly is responsible for day to day management of the entity provided such assignee assumes such Party's obligations hereunder pursuant to a written agreement, a copy of which shall be provided to the other Party by the assigning Party. Notwithstanding any such assignment, no assignment shall relieve the assignor of any obligations or liability under this Agreement. Subject to the foregoing, all of the Parties’ rights, duties, benefit s, liabilities, and obligations under this Agreement shall inure to the benefit of, and be binding upon, their respective successors and assigns.

15.7 Counterparts. This Agreement may be executed in as many counterparts as may be deemed necessary and convenien t, and by the different Parties hereto on separate counterparts, each of which, when so executed, including, without limitation, by .pdf scanned counterparts of any initialed or executed pages delivered via electronic mail, shall be deemed an original, but all such counterparts shall constitute one and the same instrument.

15.8 G
overning Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of California without regard to conflicts-of-laws principles that would require the application of any other law. Each Party hereby consents to the exclusive jurisdiction of any court of competent jurisdiction in San Bernardino County in any action related to or arising under this Agreement.

15.9 H
eadings . The Section headings of this Agreement are for convenience of reference only and shall not be deemed to modify, explain, restrict, alter, or affect the meaning or interpretation of any provision hereof.

15.10 T
ime of Essence. Time shall be of the essence with respect to all matters contemplated by this Agreement.

15.11 F urther Assurances . In addition to the actions recited herein and contemplated to be performed, executed, and/or delivered by Seller and Buyer, during the term of this Agreement and after the Closing, Seller and Buyer agree to perform, execute, and/or deliver or cause to be performed, executed, and/or delivered any and all such further acts, instruments, deeds, and assurances as may be reasonably required to consummate the transaction contemplated hereby. In furtherance of the foregoing, so long as Buyer is not in default under the terms of this Agreement, Seller will cooperate, as reasonably needed, and at no cost to Seller, in Buyer's feasibility review process, which shall include but not be limited to Seller's consent to Buyer's unrestricted access to agencies, representatives, tenants, consultants and other parties familiar with the Property and the execution and delivery of such applications or other documents as reasonably requested by Buyer.

15.12 C
onstruction. As used in this Agreement, the masculine, feminine, and neuter gender and the singular or plural shall each be construed to include the other whenever the context so requires. This Agreement shall be construed as a whole and in accordance with its fair meaning, without regard to any presumption or rule of construction causing this Agreement or any part of it to be construed against the Party causing the Agreement to be written. The Parties acknowledge that each has had a full and fair opportunity to review the Agreement and to have it reviewed by 464
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20 counsel. If any words or phrases in this Agreement have been stricken, whether or not replaced by other words or phrases, this Agreement shall be construed (if otherwise clear and unambiguous) as if the stricken matter never appeared and no inference shall be drawn from the former presence of the stricken matters in this Agreement or from the fact that such matters were stricken.

15.13 Attorneys' Fees. In the event that either Party hereto brings an action or proceeding against the other Party to enforce or interpret any of the covenants, conditions, agreements, or provisions of this Agreement, the prevailing Party in such action or proceeding shall be awarded all costs and expenses of such action or proceeding, including, without l imitation, attorneys’ fees (including fees for a Party’s use of in- house counsel), charges, disbursements, and the fees and costs of expert witnesses. If any Party secures a judgment in any such action or proceeding, then any costs and expenses (including, but not limited to, attorneys’ fees and costs) incurred by the prevailing Party in enforcing such judgment, or any costs and expenses (including, but not limited to, attorneys’ fees and costs) incurred by the prevailing Party in any appeal from such judgment in connection with such appeal shall be recoverable separately from and in addition to any other amount included in such judgment. The preceding sentence is intended to be severable from the other provisions of this Agreement, and shall survive and not be merged into any such judgment.

This Section shall survive Closing and any earlier termination of this Agreement.

15.14 B
usiness Days. As used herein, the term " Business Day" shall mean a day that is not a Saturday, Sunday, or legal holiday. In the event that the date for the performance of any covenant or obligation under this Agreement shall fall on a Saturday, Sunday, or legal holiday, the date for performance thereof shall be extended to the next Business Day. Similarly, in the event that the day for the performance of any covenant or obligation under this Agreement involving Escrow Agent shall fall on a Business Day on which Escrow Agent is closed for business to the public, the date for performance thereof shall be extended to the next Business Day on which Escrow Agent is open for business to the public.

[Signatures on following page]

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21 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

SELLER:

CITY OF FONTANA,
a municipal corporation

By:

Matthew Ballantyne, City Manager

ATTEST:

_________________________
Tonia Lewis, City Clerk

BUYER:

NH SOUTHRIDGE LLC,
a California limited liability company

By NewBridge Homes LLC,
a California limited liability company,
its Managing Member

By:

Ian Harvey, Manager

ESCROW AGENT:

The undersigned Escrow Agent hereby accepts the foregoing Purchase and Sale Agreement and Joint Escrow Instructions, agrees to act as Escrow Agent under this Agreement in strict accordance with its terms, agrees to insert as the "Agreement Date" on page 1 hereof, if not otherwise dated, the latest date this Agreement was signed by Seller and Buyer and delivered to Escrow Agent, and agrees to comply with the applicable provisions of the Internal Revenue Code with respect to the transactions contemplated hereby.

FIDELITY NATIONAL TITLE INSURANCE

COMPANY
Date: , 20__ By:

Name: Mary Lou Adame
Title: Escrow Officer
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LIST OF EXHIBITS

EXHIBIT "A" LEGAL DESCRIPTION
EXHIBIT "B" GRANT DEED
EXHIBIT "C" GRANT DEED AND CERTIFICATE OF ACCEPTANCE
EXHIBIT "D" NON-FOREIGN AFFIDAVIT

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EXHIBIT "A"

DESCRIPTION OF THE PROPERTY
The land referred to in this Agreement is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:

APN: 0237-411-13-0-000

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EXHIBIT "B"

GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO

_____________________
_____________________
_____________________
_____________________

SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 0237-411-13
Grant Deed
The undersigned Grantor(s) declare(s):

Documentary transfer tax is $_________________
Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.

Unincorporated area City of _______________, and

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Fontana, a municipal corporation
hereby GRANT(S) to
NH SOUTHRIDGE LLC, a California limited liability company the following described real property in the City of ___________, County of _____________, State of California:

SEE ATTACHED EXHIBIT A.

Dated: _______________, 20___

_______________________, a __________________

By: _________________________________
___________________ (Name)
___________________ (Title)

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

State of California
County of )
On before me, , Notary Public (insert name and title of the officer)
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)

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EXHIBIT "A"

LEGAL DESCRIPTION

The real property is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:

APN: 0237-411-13-0-000

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EXHIBIT "C"

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO

_____________________
_____________________
_____________________
_____________________

SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: 0237-411-13
Grant Deed
The undersigned Grantor(s) declare(s):

Documentary transfer tax is $_________________
Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.

Unincorporated area City of _______________, and

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, NH SOUTHRIDGE LLC, a California limited liability company hereby GRANT(S) to
City of Fontana, a municipal corporation
the following described real property in the City of Fontana, County of San Bernardino, State of California:

SEE ATTACHED EXHIBIT A.

Dated: _______________, 20___

_______________________, a __________________

By: _________________________________
___________________ (Name)
___________________ (Title)

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ACKNOWLEDGMENT
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.

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)

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EXHIBIT "A"

LEGAL DESCRIPTION

The real property is situated in the City of Fontana, County of San Bernardino, State of California, and is described as follows:

APN: 0237-411-13-0-000

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RECORDED AT REQUEST OF AND

SPACE ABOVE THIS LINE FOR

RECORDER'S USE
WHEN RECORDED MAIL TO:

City Clerk

CITY OF FONTANA
8353 Sierra Avenue
Fontana, CA 92335
APN: _0237-411-13__________No recording fee pursuant to Government Code Section 27383 and 6103

CITY OF FONTANA

CERTIFICATE OF ACCEPTANCE FOR RECORDATION

IRREVOCABLE OFFER OF DEDICATION OF REAL PROPERTY

This is to certify the Irrevocable Offer of Dedication dated _______________, 20__ from NH Southridge LLC to City of Fontana, a municipal corporation of the State of California, is hereby accepted for future recordation by the undersigned officers.

The interest in real property conveyed by the Offer of Dedication is made in a manner consistent with Section 7050 of the Government Code of the State of California and shall remain open and may be accepted at any time and at the sole discretion of the City Manager of City of Fontana or his designee.

CITY OF FONTANA,
a municipal corporation
Date: By:

Name: -_____________________
Its: City Manager

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ACKNOWLEDGMENT
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.

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)

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EXHIBIT "D"

NON-FOREIGN AFFIDAVIT

STATE OF )
) ss.

County of )
The undersigned, as authorized agent of CITY OF FONTANA, a municipal corporation ("Transferor"), after being duly sworn upon his oath deposes and says that:

Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform NH SOUTHRIDGE LLC, a California limite d liability company (" Transferee"), that withholding of tax is not required upon the disposition of Transferor’s interest in a U.S. real property interest, the undersigned hereby certifies the following:

1. Transferor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust, foreign estate, or other foreign person within the meaning of § 1445 and § 7701 of the Internal Revenue Code and the treasury regulations promulgated thereunder;

2. Transferor is not a disregarded entity as defined in Treas. Reg. § 1.1445-2(b)(2)(iii);

3. Transferor’s U.S. taxpayer identification number is: ;

4. Transferor’s business address is:
.

Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury Transferor declares that it has examined this certification and to the best of its knowledge and belief this certification is true, correct, and complete. The undersigned agent declares that he has the authority to sign this document on behalf of Transferor.

TRANSFEROR:

CITY OF FONTANA, a municipal
corporation

By:
____________, Mayor
ATTEST:

_________________________
____________, City Clerk

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

STATE OF CALIFORNIA )
) ss.

COUNTY OF )

On , 20___, before me,
, Notary Public, personally appeared
, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they/executed the same in his/her/their authorized capacity(ies) and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Notary Public
In and For Said County and State

479
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1435 Agenda Date: 6/14/2022
Agenda #: U. Category: Consent Calendar
FROM:

Administrative Services
SUBJECT:

Purchase and Sale Agreement for Vacant Property located on the North side of Arrow Blvd. in Downtown Fontana
RECOMMENDATION:

1. Approve a Purchase & Sale Agreement for the acquisition of APN #0191-162-05, a vacant property located on the North side of Arrow Blvd. in Downtown Fontana.

2. Authorize the City Manager to execute any documents necessary or appropriate to effectuate said approval and/or agreement.

COUNCIL GOALS:
• To promote economic development by concentrating on job creation. • To promote economic development by pursuing business retention, expansion and attraction.

DISCUSSION:

The City of Fontana will be undertaking an expansive and comprehensive revitalization of Downtown Fontana. The specific geographic area to be targeted includes Upland Ave to the North, Merrill Ave to the South, Mango Ave to the East and Juniper Ave to the West. In an effort to facilitate the implementation of this revitalization, the City will be assisting with the acquisition and assemblage of various properties in Downtown Fontana.

A vacant property - APN #019116205, recently became available for acquisition in Downtown Fontana. The available property is a 6,500 square foot lot, located on the North side of Arrow Blvd.

The City and sellers brokers have reached agreement on a Purchase & Sale Agreement (PSA) for the acquisition of this property, with the following proposed deal-points; • The City of Fontana would acquire APN #019116205 for the price of $170,000. The acquisition price is consistent with the sales prices for other vacant property located in Downtown Fontana. • The City of Fontana and seller will equally split any/all escrow and title fee’s - and sales commissions - as appropriate.
• The City will have thirty (30) days to perform any due-diligence required on the subject property.
• Following the due-diligence period the City will have a thirty-day financing period to complete City of Fontana Printed on 6/8/2022Page 1 of 2
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File #: 21-1435 Agenda Date: 6/14/2022
Agenda #: U. Category: Consent Calendar
• Following the due-diligence period the City will have a thirty-day financing period to complete all wire-transfers and documents necessary for the close of escrow.

Approval of the Purchase Agreement and acquisition of APN #019116205 will assist with the assemblage of properties located in Downtown Fontana. That assemblage will facilitate the City’s vision and plans to dramatically revitalize the Downtown Community.

FISCAL IMPACT:

Monies are available for the acquisition of this property, totaling approximately $190,000 - in fund 602 - Capital Improvements.

MOTION:

Approve staff recommendations.

City of Fontana Printed on 6/8/2022Page 2 of 2
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SELLER COUNTER OFFER No. 1
May not be used as a multiple counter offer.
(C.A.R. Form SCO, Revised 12/21)
Date
This is a counter offer to the Purchase Agreement, OR Buyer Counter Offer No. , Other (“Offer”), dated , on property known as (“Property”),
between (“Buyer”)
and (“Seller”).

Buyer and Seller are referred to as the "Parties."

1. TERMS: The terms and conditions of the above referenced document are accepted subject to the following:

A. The Liquidated Damages and Arbitration of Disputes paragraphs in the Offer each require initials by all Parties. If either of those paragraphs is not initialed by all Parties, that paragraph is excluded from the final agreement unless specifically referenced for inclusion in paragraph 1C of this or another Counter Offer or an addendum.

B. Unless otherwise agreed in writing, down payment and loan amount(s) will be adjusted in the same proportion as in the original Offer, but initial and increased deposit amount(s) shall remain unchanged from the original Offer.

C. OTHER TERMS:

D. The following attached documents are incorporated into this Seller Counter Offer when Signed and Delivered by both Parties (if both parties do not Sign and Deliver all attached addenda, then any acceptance of this Seller Counter Offer is not valid):

Addendum No. (C.A.R. Form ADM)
Back Up Offer Addendum (C.A.R. Form BUO)
Seller License to Remain in Possession Addendum (C.A.R. Form SIP) (occupancy up to 29 days) Seller Purchase of Replacement Property (C.A.R. Form SPRP) Tenant Occupied Property Addendum (C.A.R. Form TOPA)
Residential Lease After Sale (C.A.R. Form RLAS) (occupancy for 30 or more days) Seller Intent to Exchange Addendum (C.A.R. Form SXA)
Other Other

2. EXPIRATION: This Seller Counter Offer shall be deemed revoked and the deposits, if any, shall be returned:

A. Unless by 5:00 PM on the third Day after the date this Seller Counter Offer is signed in paragraph 4 (if more than one signature then, the last signature date)(or by AM/ PM on (date)) (i) it is signed in paragraph 5 by Buyer and (ii) a copy of the Signed Seller Counter Offer is Delivered to Seller or Seller's Authorized Agent.

B. OR If Seller withdraws this Seller Counter Offer anytime prior to Buyer's Acceptance by communicating withdrawal to Buyer or Buyer's Agent (C.A.R. Form WOO may be used).

C. OR If Seller accepts another offer prior to Buyer's Acceptance of this Seller Counter Offer.

3. MARKETING TO OTHER BUYERS: Seller has the right to continue to offer the Property for sale. Seller has the right to accept any other offer received, prior to Acceptance of this Counter Offer by Buyer as specified in 2A and 5. In such event, Seller is advised to withdraw this Seller Counter Offer before accepting another offer.

4. OFFER: SELLER MAKES THIS COUNTER OFFER ON THE TERMS ABOVE AND ACKNOWLEDGES RECEIPT OF A COPY.

BY MAKING THIS COUNTER OFFER, ANY PREVIOUS OFFER OR COUNTER OFFER CAN NO LONGER BE ACCEPTED.

The terms and conditions of those documents are incorporated into this Seller Counter Offer unless Otherwise Agreed.

Seller Date
Seller Date

5. ACCEPTANCE: I/WE accept the above Seller Counter Offer (If checked SUBJECT TO THE ATTACHED BUYER COUNTER OFFER) and acknowledge receipt of a Copy.

Buyer Date
Buyer Date
© 2021, California Association of REALTORS®, Inc. United States copyright law (Title 17 U.S. Code) forbids the unauthorized distribution, display and reproduction of this form, or any portion thereof, by photocopy machine or any other means, including facsimile or computerized formats. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS®. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. This form is made available to real estate professionals through an agreement with or purchase from the California Association of REALTORS®. It is not intended to identify the user as a REALTOR®. REALTOR® is a registered collective membership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscribe to its Code of Ethics.

Published and Distributed by:

REAL ESTATE BUSINESS SERVICES, LLC.
a subsidiary of the CALIFORNIA ASSOCIATION OF REALTORS® 525 South Virgil Avenue, Los Angeles, California 90020
SCO Revised 12/21 (PAGE 1 OF 1)
SELLER COUNTER OFFER (SCO PAGE 1 OF 1)
Phone: Fax:

Produced with Lone Wolf Transactions (zipForm Edition) 717 N Harwood St, Suite 2200, Dallas, TX 75201 www.lwolf.com 05/12/2022
04/27/2022 0 ARROW BLVD, FONTANA, CA

THE CITY OF FONTANA

MITCH PORRAS, MARYANN PORRAS

1. SALE PRICE TO BE 170,000.00

2. INSPECTIONS AND ALL CONTINGENCY REMOVAL BY THE BUYER TO BE 30 DAYS AFTER THE ACCEPTANCE

OF THE OFFER

3. TITLE COMPANY TO BE CALIFORNIA BEST TITLE

4. ESCROW TO BE ESCROW RESOURCES INC

X CONFIRMATION OF AGENCY RELATIONSHIP

X MITCH PORRAS

X MARYANN PORRAS

THE CITY OF FONTANA
Coldwell Banker Top Team, 15348 Central Ave. Chino CA 91710 (562)619-2125 909 606 1921 PORRAS Rogelio Rivera
Authentisign ID: 7B88217E-31A3-4FC9-8671-E30DB6F8D6E5
Authentisign ID: 7B88217E-31A3-4FC9-8671-E30DB6F8D6E5
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City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-938 Agenda Date: 6/14/2022
Agenda #: V. Category: Consent Calendar
FROM:

Engineering
SUBJECT:

Sale of Surplus Property located South of South Highland Avenue and West of Oleander Avenue RECOMMENDATION:

1. The proposed sale of the property is exempt from environmental review pursuant to the California Environmental Quality Act (Pub. Resources Code, §§21000 et seq.) (CEQA) and the State CEQA Guidelines (Cal. Code Regs. Tit. §§15000 et seq.) Specifically, the proposed project qualifies for the Class 12 Categorical Exemption (State CEQA Guidelines, §15312), which applies to surplus government property.

2. Adopt Resolution No. 2022-046, approving a sale of City-owned exempt surplus property located south of South Highland Avenue and west of Oleander Avenue to Diego of Fontana, LLC and make the requisite declarations and findings contained therein.

3. Approve and authorize the City Manager and City Attorney to execute the Purchase and Sale Agreement with Developer.

COUNCIL GOALS:
· To invest in the city's infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.

DISCUSSION:

In 1997, the City initiated right of way acquisition for the construction of South Highland Avenue. The accompanying uneconomic remnant parcel acquired as part of that 1997 right of way acquisition is now considered surplus. The City of Fontana currently owns this property located south of South Highland Avenue and west of Oleander Avenue (APN 0240-011-30) which consists of approximately 1,587 square feet of land and is made up of this remnant parcel. Developer previously made an unsolicited offer to purchase this currently vacant and undeveloped exempt surplus property for $31,000.00 based on an Opinion of Value attached to this report.

Staff has determined the 1,587 square feet of land on South Highland Avenue and Oleander Avenue, adjacent to Parcel Map 20283, is “exemptsurplus land”under Assembly Bill AB 1486. AB 1486 went into effect on January 1st, 2020 and expands the Surplus Land Act (Act) requirements for local agencies to achieve more affordable housing on surplus properties. The Act provides for several exemptions including “surplusland that is … less than 5,000 square feet in area”(Cal. Gov. Code § 54221(f)(1)(B(i))) and “surplusland that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property”(Cal. Gov. Code § 54221(f)(1)(E).) Pursuant to the provisions of the Act cited above, staff has determined that the sale of this uneconomical remnant parcel to the Developer, who owns the adjacent property, is "exempt surplus land" and will be made available for City of Fontana Printed on 6/8/2022Page 1 of 2
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Developer, who owns the adjacent property, is "exempt surplus land" and will be made available for sale in accordance with California Government Code Section 37420, et seq. To comply with these provisions, staff recommends adoption by the City Council of the attached resolution which makes the statutorily required declarations and findings.

FISCAL IMPACT:

The sale of this property will generate $31,000.00 in revenue to the City of Fontana.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 6/8/2022Page 2 of 2
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RESOLUTION NO. 2022-046

A RESOLUTION OF THE CITY COUNCIL OF FONTANA,

CALIFORNIA, TO CONVEY THAT CERTAIN REAL PROPERTY

LOCATED SOUTH OF SOUTH HIGHLAND AVENUE AND WEST OF

OLEANDER AVENUE IN FONTANA, CALIFORNIA (ASSESSOR
PARCEL NUMBER 0240 -011-30) TO DIEGO OF FONTANA, LLC,
PURSUANT TO GOVERNMENT CODE SECTION 37350, ET SEQ.

WHEREAS, the City of Fontana, a municipal corporation ("City"), is the owner of certain 1,587 square -foot parcel of real property generally located south of South Highland Avenue and west of Oleander Avenue in the City of Fontana, California (APN:
0240-011-30), and consisting of uneconomic remnant parcels acquired for South Highland Avenue, and more specifically described in Exhibit “A” attached hereto and incorporated herein by this reference ("Property"); and

WHEREAS, Assembly Bill 1486 went into effect on January 1, 2020 and expands the Surplus Land Act (“Act”) requirements for local agencies to achieve more affordable housing on surplus properties; and

WHEREAS, Pursuant to the provis ion of the Act, City staff has determined that the sale of this remnant parcel constitutes "exempt surplus land" under Government Code Section 54221(f)(1)(B)(i), as surplus land that is less than 5,000 square feet in area that will be “sold to an owner of contiguous land,” and (f)(1)(E), as “surplus land that is a former street, right of way, or easement, and is conveyed to an owner of an adjacent property;” and

WHEREAS, City staff has determined Government Code Section 54221(f)(1)(B)(i) is applicable sin ce the Property is less than 5,000 square feet and will be sold to Diego of Fontana, LLC (“Developer”), who will have ownership over adjacent property, as well as (f)(1)(E), since the Property was acquired for right of way purposes described herein, and th at the proposed sale of Property consists of uneconomic remnants resulting from that right of way, that are to be sold to Developer; and

WHEREAS, Government Code Section 54222.3 states that the Act does not apply to the disposal of exempt surplus land; and

WHEREAS, California Government Code Section 37420 through 37430 authorizes the City to dispose of public property; and

WHEREAS, California Government Code Section 37351 provides that the legislative body of a city may “may control, dispose of, and conv ey … [real] property for the benefit of the city”; and

WHEREAS, the City desires to take final action regarding the conveyance of the Property; and
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WHEREAS, Under the California Environmental Quality Act (Pub. Resources Code, §§21000 et seq.) (“CEQA”) an d the State CEQA Guidelines (Cal. Code Regs. tit.14, §§15000 et seq.) City Staff have determined based on its independent review the sale of this Property is exempt from CEQA. Specifically, the proposed sale qualifies for the Class 12 Categorical Exemption (State CEQA Guidelines § 15312), which applies to the sale of surplus government property.

NOW, THEREFORE, THE CITY DOES HEREBY RESOLVE AND DECLARE AS FOLLOWS:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. Surplus Land Act Declaration and Findings . The City Council declares, based on the Recitals and all other information and testimony provided, that the Property is “exempt surplus land” under the Surplus L and Act pursuant to Government Code Section 54221(f)(1)(B)(i) because the Property is less th an 5,000 square feet and will be sold to Developer, who will have ownership over adjacent property, as well as (f)(1)(E), since the Property was originally acquire d for right of way purposes and now consists of uneconomic remnants resulting from that right of way.

Section 3. Public Interest and Convenience Findings. The City Council intends to sell the Property to Developer and, based on the Recitals and all othe r information and testimony provided, finds that the public interest and convenience require the sale of the Property to Developer at fair market value.

Section 4. Compliance with California Code of Civil Procedure. There has been compliance by the City with the requirements of Section 1245.235 of the California Code of Civil Procedure regarding notice and hearing.

Section 5. CEQA. The proposed sale of the property is exempt from environmental review pursuant to the California Environmental Quality Act (Pub.

Resources Code, SS 2100 et seq.) (“CEQA”) and the State CEQA Guidelines (Cal.

Code Regs, tit. 14 SS 15000 et seq.). Specifically, City Staff have determined based on its independent review the sale of this Property is exempt from CEQA under the Class 12, Categorical Exemption for the sale of surplus government property (State CEQA Guidelines § 15312). Specifically, City Staff have determined that due to the location and proximity of the Property to South Highland Avenue and other private property, the Property does not have significant values for wildlife habitat or other environmental purposes. Additionally, City Staff have determined that based on the size, shape and inaccessibility of the uneconomic remnant parcels that make up the Property, the Property is incapable of independent development or use. The City Clerk is authorized and directed to file a Notice of Exemption with the appropriate official of the County of San Bernardino, California within (5) days following the date of the adoption of th is Resolution.
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Section 6. Description of the Property. The Property is generally located south of South Highland Avenue and west of Oleander Avenue in the City of Fontana, California (APN: 0240 -011-30) and is further depicted in Exhibit “A" attached to t his Resolution.

Section 7. Approval of Purchase and Sale Agreement. The Purchase and Sale Agreement for the conveyance of the Property to Developer, is hereby approved by the City Council in substantially the same form as hereto attached as Exhibit “B”, together with any such changes as hereafter approved by the City Manager and the City Attorney deemed to be within the City’s best interest.

Section 8. Implementation. The City Manager or designee is authorized to sign and enter into the Purchase Agreeme nt on behalf of the City and to take any other actions reasonably necessary.

Section 9. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not af fect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City declares that the City would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

Section 10. Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify the vote adopting this resolution.

APPROVED AND ADOPTED this 14th day of June, 2022.

____________________________________
City Attorney

I, Ashton Arocho, Deputy City Clerk of the City of Fontana, California, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting of said City Council on the 14thth day of June, 2022, by the following to-wit:

AYES:

NOES:

ABSENT:

City Clerk of the City of Fontana

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Mayor of the City of Fontana

ATTEST:

City Clerk

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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this “Agreement”) is dated for reference purposes as of _________, 2022 (the “Effective Date”), by and between Diego of Fontana, LLC , a California limited liability company (“Buyer”) and City of Fontana, a California municipal corporation (“Seller”).

RECITALS:

A. Seller is the owner of that certain real propert y located in the City of Fontana, County of San Bernardino, State of California, commonly referred to as Assessor Parcel Number 0240-011-30 and legally described and depicted on Exhibit “A” attached hereto and incorporated herein by this reference (the “Property”).

B. Buyer desires to acquire and Seller desires to sell the Property for the consideration and on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:

1. AGREEMENT TO PURCHASE AND SELL.

Seller agrees to sell, assign and convey to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title and interest in and to the Property. The Property includes, at no additional cost to Buyer, all intangible property or rights therein or thereto now owned or held by Seller which arise from or are related to any portion of the real property or improvements comprising the Property (the “Intangible Property”), including, but not limited to, benefits an d rights pursuant to any and all certificates of occupancy, zoning approvals, variances, permits, transferable guarantees and warranties covering the Property or any part thereof; provided, however, that Buyer shall not be deemed to have assumed those obli gations of Seller under any agreements unless otherwise specified in writing. To the extent owned by Seller, the Property also includes at no additional cost to Buyer all rights which are appurtenant thereto, including those related to all minerals, oil, gas and other hydrocarbon substances on or under the Property as well as all development rights, water rights, easements, rights of way, licenses and tenant improvements.

2. CONSIDERATION.
(a) Purchase Price. The purchase price for the Property is Thirty-One Thousand Dollars ($31,000.00) (“Purchase Price”), which Buyer and Seller agree is no less than the fair market value of the Property in its condition as of Close of Escrow. (b) Deposit. Within five (5) days following execution of this Agreement, Buyer shall deposit into Escrow a deposit in the full amount of the Purchase Price (the “Deposit”) by wire transfer or cash or cashier’s check drawn on good and sufficient funds on a federally insured bank in the State of California and made payable to the order of the Escrow Company (“Immediately Available Funds”). The Purchase Price deposited pursuant to this subsection (b) shall be non - refundable, except as otherwise provided in this Agreement; provided, however, that, 514

notwithstanding any other pro vision of this Agreement to the contrary, $100.00 of the Purchase Price shall not be refundable to Buyer under any circumstances (the “Independent Consideration”).

The Independent Consideration is separate consideration, bargained for and agreed to by the parties as independent and sufficient consideration for Seller’s execution and delivery of this Agreement.

3. TITLE.
(a) Title Report. Buyer shall wor k with Chicago Title (referred to herein as both “Escrow Company” and “Title Company”) to have prepared at Buyer’s cost, a preliminary report (“PTR”) pertaining to the Property.
(b) Title Exceptions. Buyer shall take title subject to all exceptions shown in the PTR ( “Permitted Exceptions”) and such other exceptions disclosed in writing by Sell er to Buyer prior to the expiration of the Due Diligence Period (defined below) which do not materially affect the use of the Property by Buyer. If exceptions other than the Permitted Exceptions, exist which cannot be removed prior to the Close of Escrow (as defined in Section 8) and such exceptions materially affect the use of the Property, Buyer shall elect, by giving written notice to Seller and Escrow Company, (i) to terminate this Agreement, or (ii) to waive its disapproval of such exceptions, in which case such exceptions shall then be deemed to be Permitted Exceptions.

In the event Buyer elects to terminate this Agreement, Escrow Company shall return to Buyer the Deposit, less the Independent Consideration and escrow, title and cancellation fees and both parties shall be relieved from any liabilities and/or obligations under this Agreement , except those liabilities and/or obligations that explicitly survive expiration or earlier termination of this Agreement.
(c) Title Policy. Title Company shall issue, at the Closing, a CLTA Standard Owners Policy of Title Insurance (the “Title Policy”) together with endorsements reasonably requested by Buyer, with liability equal to the Purchase Price, subject only to (A) the Permitted Exceptions; (B) the standard prin ted exceptions and conditions in the Title Policy; and (C) the general and special taxes and assessments not then delinquent and a lien, if any, for current real property taxes for the fiscal year in effect at the time of the Closing.

4. ESCROW.
(d) Opening of Escrow. Within two (2) days after the Effective Date (defined in Section 13 below), Buyer and Seller each shall deposit a counterpart of this Agreement executed by such party (or either of them shall deposit a copy executed by both Buyer and Seller) wi th Escrow Company. Buyer and Seller hereby instruct Escrow Company to accept and act upon electronic copies of signed documents, including this Agreement, but not including documents that will be recorded. This Agreement, together with such further instructions, if any, as the parties shall provid e to Escrow Company by written agreement, shall constitute the joint escrow instructions of the parties . Escrow shall be deemed open ( “Opening of Escrow” or “Opening Date”) upon Escrow Holder’s receipt of a fully executed copy or executed counterparts of this Agreement. Buyer and Seller agree to be bound by Escrow Company’s proforma instructions or letter of acceptance, including Escrow Company’s general provisions; provided, however, that in 515

the event of any inconsistency between such additional document s and this Agreement, this Agreement will govern.
(e) Funds and Documents . Seller shall make its deposits into escrow in accordance with Section 6. Buyer shall make its deposits into escrow in accordance with Section 7.
(f) Prorations. Escrow Company sha ll prorate any real property taxes and assessments on the Property as of the Close of Escrow for the current fiscal year based on the most current official real property tax information available from the County Assessor’s office where the Property is loca ted or from other assessing authorities. If real property tax and assessment figures for the current fiscal year are not available, real property taxes shall be prorated based on real property taxes for the previous year. Seller is a public agency and generally not liable for real property taxes for its period of ownership of the Property. Buyer hereby acknowledges that Seller may receive a supplemental tax bill covering real property taxes and assessments covering its ownership of the Property from the Close of Escrow.
(g) Costs. Buyer shall pay: (a) the documentary transfer tax due (which transfer tax shall not be posted on the Grant Deed), if any, in connection with the consummation of this transaction, (b) the premium for the Title Policy equal to the amount of a CLTA standard coverage owner’s policy and ( c) one hundred percent (100%) of all other escrow, title and closing costs.

Pursuant to Government Code Section 27383, no recording fee will be payable with respect to the recording of the Grant Deed.

5. CONDITIONS PRECEDENT.
(a) Buyer’s Conditions Precedent. The following shall be conditions precedent to Buyer’s obligation to consummate the purchase and sale transaction contemplated herein (the “Buyer’s Conditions Precedent”):
(i) Buyer shall not have terminated this Agreement in accordance with the provisions of Section 3(b) above.
(ii) Seller shall have delivered to the Escrow Company the items described in Section 6.
(iii) At the Close of Escrow, Buyer shall be placed in possession of the Property, free of any claims to or rights of possession, occupancy or ownership of any party other than Buyer, except for Permitted Exceptions.
(iv) There shall be no change in title to the Property after Buyer’s approval of the Title Policy, and no material easement, right of way, encroachment, or encumbrance with respect to the Property actually known to Seller but not shown in the Title Policy.
(v) Title Company shall, subject only to payment of the applicable premium, have irrevocably committed to iss ue the Title Policy to Buyer in the amount of 516

the Purchase Price insuring that Buyer owns marketable fee simple title to the Property, subject to the Permitted Exceptions.
(vi) As of the Close of Escrow , none of the documents or materials provided by Seller to Buyer shall have been rescinded, amended or otherwise modified in a manner which would be materially adverse to Buyer.
(vii) The conditions set forth in this Section are solely for the benefit of Buyer and may be waived only by Buyer. Buyer shall, at all times prior to the termination of this Agreement, have the right to waive any of these conditions; provided that such waiver is in writing. In the event that the conditions are not satisfied or waived by the Buyer, in writing, on or before the Closing, Escrow Company shall return to Buyer the Deposit and interest earned thereon, less the Independent Consideration and title and escrow cancellation fees and both parties shall be released from any liabilities or obligations under this A greement, except such liabilities or obligations that explicitly survive expiration or earlier termination of this Agreement. (b) Seller’s Conditions Precedent. The following shall be conditions precedent to Seller’s obligation to consummate the purchase and sale transaction contemplated herein (the “Seller’s Conditions Precedent”):
(i) Buyer shall not have terminated the Agreement in accordance with the terms of this Agreement.
(ii) Buyer shall have delivered to Escrow Company, prior to the Closing, for disbursement as directed hereunder, the Purchase Price in I mmediately Available Funds due from Buyer in accordance with this Agreement. (iii) Buyer shall have delivered to Escrow Company the items described in Section 7.
(iv) The conditions set forth in this Section are solely for the benefit of Seller and may be waived only by Seller. Seller shall, at all times prior to the termination of this Agreement, have the right to waive any of these conditions; provided that such waiver is in writing. In the event that the conditions are not satisfied or waived by the Seller, in writing, on or before the Closing, Escrow Company shall return to Buyer the Deposit and interest earned thereon, the Independent Consideration and title and escrow cancellation fees and both parties shall be released from any liabilities or obligations under this Agreement, except such liabilities or obligations that explicitly survive expiration or earlier termination of this Agreement.

6. SELLER’S CLOSING DELIVERIES.

At least one (1) business day prior to the Closing, Seller shall deliver or cause to be delivered to Escrow Company the following:
(a) A deed in the form and content as set forth in Exhibit “B” attached hereto and by this reference incorporated herein (the “Grant Deed”). 517

(b) An affidavit certifying that Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986 (the “Certificate of Non - Foreign Status”).
(c) A properly executed California form 590 or other evidence sufficient to establish that Buyer is not required to withhold any funds pursuant to the California Revenue and Taxation Code.
(d) A properly completed and executed Documentary Transfer Tax Affidavit. (e) Any other documents, instruments or agreements reasonably necessary to effectuate the transaction contemplated by this Agreement.

6.1 SELLER’S REPRESENTATIONS AND WARRANTIES.

Notwithstanding any disclaimer of warranties and/or releases in this Agreem ent, Seller represents and warrants to Buyer that (i) Seller has or will obtain all consents necessary for the full performance of Seller’s obligations under this Agreement, and for the actions contemplated to be performed by Seller under this Agreement, (ii) at the Close of Escrow, Seller has the right and full authority to sell the Property to Buyer, (iii) there are no ground leases, mortgages, deeds of trust, or other hypothecation s or security device s (collectively, " Security Device s") affecting the Property or any portion thereof, and Seller shall not create any Security Devices without the prior consent of Buyer, which may be withheld in Buyer’s sole and absolute discretion; and (i v) all Seller representations and warranties are true, correct and not misleading as of the Effective Date and will be true, correct, and not misleading at the Close of Escrow . These representations and warranties shall survive the Close of Escrow.

7. BUYER’S CLOSING DELIVERIES.

At least one (1) business day prior to the Closing, Buyer shall deliver to Escrow Company:
(a) The sums as Escrow Company shall require to pay Buyer’s share of the closing costs, prorations and adjustments set forth herein, in Immediately Available Funds. (b) A fully completed and executed Preliminary Change of Ownership Report. (c) Any other documents, instruments or agreements reasonably necessary to effectuate the transaction as contemplated by this Agreement.

7.1 BUYER’S REPRESENTATIONS AND WARRANTIES.

Notwithstanding any disclaimer of warranties and/or release s in this Agreement, Buyer represents and warrants to Seller that (i) Buyer has or will obtain all consents necessary for the full performance of Buyer’s obligations under this Agreement, and for the actions contemplated to be performed by Buyer under this Agreement, (ii) at the Close of Escrow, Buyer has the right and full authority to purchase the Property from Seller, and (iii) all Buyer representations and warranties are true, correct and not misleading as of the Effective Date and will be true, correct , and not 518

misleading at the Close of Escrow. These representations and warranties shall survive the Close of Escrow.

8. CLOSE OF ESCROW.
(a) Closing Period. The purchase and sale described in this Agreement shall close (“Closing” or “Close of Escrow”) no later than fifteen (15) days following the end of the Due Diligence Period, as defined in Section 9 below. Buyer shall have the right to extend the Close of Escrow for three (3) additional thirty (30) day extension periods. Should Buyer elect to exercise an extension, Buyer shall deposit an additional extension deposit of ONE THOU SAND DOLLARS AND NO CENTS ($1,000.00) into Escrow for each extension (“Extension Deposit”).

Extension Deposits shall not be credited towards the Purchase Price and shall be non -refundable for any reason.
(b) Authorization to Close . Provided that Escrow Company has not received written notice in a timely manner from Buyer or Seller of the failure of any condition to the Closing or of termination of the escrow, Escrow Company is authorize d to close the escrow at such time as (i) Escrow Company has received all items to be delivered by Seller and Buyer pursuant to Sections 6 and 7; and (ii) Title Company is prepared to issue the Title Policy at Closing. (c) Closing Deliveries . Upon Closing, Es crow Company will deliver the following to Buyer and Seller:
(i) Deliver to Buyer: (A) the Grant Deed by causing it to be recorded in the Official Records of the Office of the County Recorder of San Bernardino County, California; and immediately upon recording, delivering to Buyer a conformed copy of the Grant Deed; (B) California form 590; (C) the Certificate of Non -Foreign Status; (D) any funds deposited by Buyer, and any interest earned thereon, in excess of the amount required to be paid to Seller hereunder; and (E) the Title Policy. (ii) Deliver to Seller: (A) the Purchase Price; and (B) the fully completed and executed Preliminary Change of Ownership Report. (d) Tax Reporting . Escrow Company is hereby designated the “real estate reporting person” and any instructions or settlement statement prepared by Escrow Company shall so provide. Upon the consummation of the transaction contemplated by this Agreement, Escrow Company shall file Form 1099 information return and send the statement to Seller.

9. DUE DILIGENCE AND TIME FOR SATISFACTION OF CONDITIONS. (a) Due Diligence Period . Buyer, or its designees, shall commence due diligence with respect to the Property promptly following the Opening of Escrow, and the due diligence period shall be twe nty (20) days from Buyer’s receipt of the PTR and all hyperlinked underlying documents (the “Due Diligence Period”). Buyer agrees and acknowledges that Seller has provided to Buyer all materials, reports, and documents in Seller’s possession or control that affect or pertain to the use or occupancy of the Property and has no further obligation hereunder and therefor. At Buyer’s election, Buyer shall have the right to terminate this Agreement at any time during the Due Diligence Per iod by giving written notice of cancellation (“ Notice of 519

Cancellation”) to Seller and Escrow Holder, in which case neither party shall have any further rights or obligations hereunder, except any rights or obligations that expressly survive the termination of this Agreement , and Buyer shall receive a refund of the Deposit , less the Independent Consideration. However, should Buyer proceed with the purchase of the Property, all Deposits shall be applicable to the Purchase Price and non-refundable to Buyer. If Buyer elects to proceed with the purchase of the Property as provided herein, Buyer shall provide Seller and Escrow Holder with written notice of such election (“ Notice to Proceed ”), on or before the expiration of the Due Diligence Period. Upon delivery of a Notice to Proceed as provided herein, the Due Diligence Period shall expire. Should Buyer fail to deliver either a Notice of Cancellation or a Notice to Proceed by the end of the Due Diligence Period, a Notice to Proceed shall be deemed given by Buyer.
(b) Physical Inspections. During the Due Diligence Period and until the Close of Escrow, Seller shall afford Buyer and the authorized representatives of Buyer reasonable access at reasonable times to the Property for purposes of satisfying any of Buyer’s Conditions Precedent (defined below) to the Close of Escrow contained herein, and Buyer shall have the right, at Buyer’s sole cost and expense and upon at least two (2) business days’ written notice to Seller, to perform such engineering analyses, wa ter, soils and geotechnical studies, site history investigations, marketing studies, and environmental assessments as Buyer deems necessary in connection with its investigation of the Property, and shall schedule any such physical tests during normal business hours unless otherwise approved by Seller. If Buyer elects to terminate this Agreement, Buyer shall repair and restore any damage caused to the Property by Buyer’s testing and investigation and leave the Property in substantially the same condition as existed on the Effective Date . Subject to the foregoing, Buyer shall indemnify, defend and hold harmless Seller from and against any and all claims, demands, liabilities, costs, expenses, damages and losses, cause or causes of action, proceeding(s) or suit(s), including reasonable attorneys’ fees, caused by Buyer’s (or its agent’s, employee’s, or representative’s) inspection, testing, occupation or use of Property prior to the Close of Escrow pursuant to this Section; provided, however, that Buyer shall have no responsibility or liability for (a) the pre-existing presence and discovery of Hazardous Substances (defined below), (b) the results or findings of any tests, (c) any negligent or willfully unlawful act or omission of Seller, its agents, employee s, consultants or contractors, or (d) any adverse condition or defect on or affecting the Property not caused by Buyer or its employees, agents, contractors, or subcontractors but discovered during their inspections. (d) Copies of Reports . In the event that this Agreement becomes terminated for reasons other than Seller’s default, Buyer shall provide Seller, at no cost to Seller, with copies of all reports and studies created pursuant to Buyer’s due diligence investigation, excepting any reports that are protected from disclosure by law, within five (5) calendar days after the termination date; provided, however, that Buyer makes no warranty as to the completeness or accuracy of such reports and studies and Seller shall accept and rely on such materials a t Seller’s sole risk. The provisions of this Section shall survive the termination of this Agreement.

10. PROPERTY “AS/IS”.
(a) Buyer represents and warrants that, as specified herein, Buyer has, or shall inspect and conduct tests and studies of the Property and that Buyer is or shall be familiar with the general conditions of the Property. Buyer understands and acknowledges that the Property may 520

be subject to earthquake, fire, floods, erosion, high water table, dangerous underground soil conditions, hazardous ma terials and similar occurrences that may alter its condition or affect is suitability for any proposed use. Seller shall have no responsibility or liability with respect to any such occurrence. Buyer represents and warrants that Buyer is acting and will act only upon information obtained by Buyer directly from Buyer’s own inspection of the Property.

Notwithstanding anything to the contrary contained in this Agreement, the suitability or lack of suitability of the Property for any proposed or intended use , or availability or lack of availability of (i) permits or approvals of governmental or regulatory authorities, or (ii) rights with respect to any such proposed or intended use of Property shall not affect the rights or obligations of the Buyer hereunder.
(b) No person on behalf of Seller is authorized to make, and by execution hereof, Buyer acknowledges that no person has made any representation, agreement, statement, warranty, guarantee or promise regarding the Property or the transaction contemplated herein or the zoning, construction, physical condition or other status of the Property except as may be expressly set forth in this Agreement. No representation , warranty, agreement, statement, guarantee or promise, if any, made by any person acting in behalf of Seller which is not contained in this Agreement will be valid or binding on Seller.
(c) BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS

SPECIFICALLY PROVIDED IN THIS AGREEMENT , SELLER HAS NOT MADE, DOES

NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY

REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR

GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS

OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (i) VALUE; (ii) THE INCOME TO BE DERIV ED FROM THE PROPERTY; (iii) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL

ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON, INCLUDING THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (iv) THE

HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROF ITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (v) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (vi) THE

NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (v ii) THE COMPLIANCE OF OR BY

THE PROPERTY OR ITS OPERATION WITH ANY LAW, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (viii)

COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND

USE LAWS, RULES, REGULATION, O RDER OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990,

CALIFORNIA HEALTH & SAFETY CODE, THE FEDERAL WATER POLLUTION

CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE U.S. ENVIRONMENTA L PROTECTION AGENCY REGULATIONS AT 40. C.F.R., PART 261, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCE CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING WATER

ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC

SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF 521

THE FOREGOING; (ix) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE PROPERTY; (x) THE CONFORMITY OF THE

PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS; (xi) DEFICIENCY OF ANY UNDERSHORING; (xii) DEFICIENCY OF ANY DRAINAGE; (xiii) THE FACT THAT ALL OR PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE; (xiv) THE EXISTENCE OF

VESTED LAND USE, ZONING OR BUILDING ENTITLEMENT AFFECTING THE PROPERTY; OR (xv) WITH RESPECT TO ANY OTHER MATTER. BUYER FURTHER

ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS IS” CONDITION AND BASIS WITH ALL FAULTS, AND THAT SELLER HAS NO

OBLIGATION TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN. BUYER REPRESENTS, WARRANTS AND COVENANTS TO SELLER THAT, EXCEPT FOR SELLER’S EXPRESS

REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS AGREEMENT, BUYER IS PURCHASING THE PROPERTY BASED ON BUYER’S OWN INVESTIGATION OF THE PROPERTY.

Buyer shall rely solely upon Buyer’s own knowledge of the Property based on its investigation of the Property and its own inspection of the Property in determining the Property’s physical condition. With the exception of claims relating to or arising out of a breach of any of Seller’s representations and warranties, or any of Seller’s representations or warranties being untrue or misleading, Buyer and anyone claiming by, through or under Buyer hereby waives his/her/its right to recover from and fully irrevocably releases Seller, its elected and appointed officials, employees, officers, directors, representatives, agents, servants, attorneys, affiliates, parent, subsidiaries, successors, and assigns, and all persons, firms, corporations and organizations in its behalf ( “Released Parties” ) from any and all claims that it may now have or he reafter acquire against any of the Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to any construction defects, errors, omissions or other conditions, latent or otherwise, includi ng environmental matters, affecting the Property, or any portion thereof. This release includes claims of which Buyer is presently unaware or which Buyer does not presently suspect to exist which, if known by Buyer, would materially affect Buyer’s release to Seller. Buyer specifically waives the provision of California Civil Code Section 1542, which provides as follows:
“A GENERAL RELEASE DO ES NOT EXTEND TO CLA IMS

THAT THE CREDITOR OR RELEASING PARTY DOE S NOT

KNOW OR SUSPECT TO E XIST IN HIS OR HER F AVOR AT

THE TIME OF EXECUTIN G THE RELEASE AND TH AT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIAL LY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.”
In this connection and to the extent permitted by law, Buyer hereby agrees represents and warrants that Buyer realizes and acknowledges that factual matters now unknown to him/her/it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, 522

and Buyer further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release, discharge and acquit Seller from any such unknown cause of action, claims, demands, debts, controversies, damages, costs, losses and expenses which might in any way be included as a material portion of the consideration given to Seller by Buyer in exchange for Seller’s performance hereunder.

Buyer shall defend, indemnify and save the Released Parties from and against any and all loss, expense, claims, demands, costs including attorneys’ fees and costs of any kind or character that the Released Parties may at any time incur by reason of any liability arising out of or in connection with the physical condition of the Property occurring after the Close of Escrow , including, without limitation, construction defects, errors, omissions or the conditions, latent or otherwise, including environmental matters affecting the Property, including repair, clean -up or detoxification or preparation and implementation of any removal, remedial response, closure or other plan concerning any petroleum products and/or any toxic, dangerous or hazardous chemicals, materials, substances, pollutants and wastes, in violation of applicable laws, rules or regulations, exposure to which is prohibited, limited or regulated by any requirement of any governmental authority, or if not so prohibited, limited or r egulated, which may pose a hazard to the health and safety of the occupants of the Property or the occupants and/or owners of property near the Property. The obligations of Buyer in this paragraph shall not apply in the event any loss, expense, claim, demand, or cost, arises out of a breach of any of Seller’s representations and warranties, or of any of Seller’s representations or warranties being untrue or misleading, Seller and Buyer have initialed this Section 10 to further indicate their awareness and acceptance of each and every provision.
___________________________ __________________________ SELLER’S INITIALS BUYER’S INITIALS

11. DEFAULT/REMEDIES.

11.1 Events of Default. In addition to other acts or omissions of a Party that may legally or equitably constitute a Default or breach of this Agreement, the occurrence of any of the following specific events shall constitute an “Event of Default” under this Agreement:
(a) Monetary Default. If a Monetary Default occurs and continues for seven (7) days after written notice from the City, specifying in reasonable detail the amount of money not paid and the nature and calculation of each such payment. (b) Bankruptcy or Insolvency . If , prior to the Close of Escrow, the Buyer ceases to do busin ess as a going concern, ceases to pay its debts as they become due or admits in writing that it is unable to pay its debts as they become due, or becomes subject to any Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within sixty (60) days after commencement), or a custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made with respect to, substantially all of the Buyer’s assets or the Buyer’s interest in this Agreement (unless such appointment, attachment, 523

execution, or other seizure was involuntary and is contested with diligence and continuity and vacated and discharged within sixty (60) days).
(c) Breach of Representation or Warranty . If a ny representation, warranty or disclosure made by the Seller or by the Buyer in this Agreement is materially false or misleading.
(d) Deposit of Funds, Bonds or Other Security . If the Buyer fails to make any deposit of funds or provide or maintain any bond or other security required under this Agreement within seven (7) days’ after Notice of such Default to the Buyer. (e) Non-Monetary Default. If any Non -Monetary Default occurs and the defaulting party does not cure such Non-Monetary Default within thirty (30) days after Notice from the non-defaulting party describing the Default in reasonable detail, or, in the case of a Non- Monetary Default that cannot with reasonable due diligence be cured within thirty (30) days from such Notice, if the defaulting party shall not: (a) within thirty (30) days after the Notice, advise the non-defaulting party of the defaulting party’s intention to take all reasonable steps to cure such Non-Monetary Default; (b) duly commence such cure within such period, and then diligently prosecute such cure to completion; and (c) complete such cure within a reasonable time under the circumstances.
(f) Transfer. The occurrence , prior to the Close of Escrow, of a Transfer other than a Permitted Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms and conditions of this Agreement.

11.2 THE BUYER WAIVES ANY RIGHT TO MAINTAIN AN ACTION

AGAINST THE SELLER FOR SPECIFIC PERFORMANCE OF ANY TERM OR PROVISION OF THIS AGREEMENT, PRIOR TO THE CLOSE OF ESCROW. UPON THE OCCURRENCE

OF AN EVENT OF DEFAULT BY THE SELLER, PRIOR TO THE CLOSE OF ESCROW, THE

BUYER SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY

EXPENDED BY THE BUYER IN REASONABLE RELIANCE ON THIS AGREEMENT,

PRIOR TO THE DATE OF THE OCCURRENCE OF THE DEFAULT BY THE SELLER, NOT TO EXCEED AN AGGREGATE AMOUNT OF TEN THOUSAND DOLLARS ($10,000) AND

FURTHER, THE SELLER SHALL WAIVE ANY REQUIREMENT THAT THE PROPERTY

BE ACQUIRED BY THE BUYER, OR BY ANY AFFILIATE OF THE BUYER, AS A

CONDITION OF APPROVAL OF THE PENDING PROJECT FOR THE CONSTRUCTION BY BUYER, AND THE ANTICIPATED OPERATION BY BUYER’S AFFILIATE, OF A CHRYSLER DODGE JEEP RAM FACILITY ON A PARCEL ADJOINING THE PROPERTY.

THE BUYER WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE

SELLER ARISING FROM A DEFAULT BY THE SELLER, PRIOR TO THE CLOSE OF ESCROW. THE BUYER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVERS AND REL EASES CONTAINED IN THIS SECTION, WHICH CIVIL CODE SECTION READS AS FOLLOWS:

A GENERAL REL EASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNO W OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE 524

RELEASE AND THAT, IF KNOWN BY HIM OR HER , WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMEN T WITH THE
DEBTOR OR RELEASED PARTY.

BY INITIALING BELOW, THE BUYER

KNOWINGLY AND VOLUNTARILY WAIVES
THE PROVISIONS OF SECTION 1542 SOLELY

IN CONNECTION WITH THE WAIVERS AND
RELEASES OF THIS SECTION.

__________________________
Initials of Authorized
Buyer Representative

11.3 LIQUIDATED DAMAGES. THE PARTIES AGREE THAT IT WOULD

BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX PRIOR TO SIGNING THIS

AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM BUYER’S OBLIGATIONS UNDER THIS AG REEMENT.

THEREFORE, IF AFTER SATISFACTION OR WAIVER OF ALL CONDITIONS PROVIDED

FOR IN THIS AGREEMENT, OR FAILURE OF ANY CONDITION DUE TO BUYER'S

BREACH HEREUNDER, THIS AGREEMENT FAILS TO CLOSE AS A RESULT OF BUYER’S BREACH, THE SELLER WILL BE ENTITLED TO RETAIN AS LIQUIDATED DAMAGES THE DEPOSIT OF THIRTY-ONE THOUSAND DOLLARS ($ 31,000) AS SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT, WHICH WILL BE RELEASED TO SELLER. UPON PAYMENT OF SAID SUMS TO SELLER, BUYER WILL BE RELEASED FROM ANY FURTHER LIABILITY UNDER THIS AGREEMENT. _______________ _______________
Buyer Initials Seller Initials

11.4 Legal Actions. Following the Close of Escrow, either Party may institute legal action to cure, correct or remedy any Default, to recover damages for any Default, or to obtain any other remedy available to that Party under this Agreement, at law or in equity regarding any Default. Any such legal action must be instituted in the Superior Court of the State of California in San Bernardino County, in any other appropriate court within the County, or in the United States District Court with jurisdiction in the County.

12. BROKER’S COMMISSION/ESCROW FEES.

Seller shall not be responsible for any of Buyer’s real estate brokerage or sales commissions, finder fees or similar charges that may arise from or be related to this Agreement.

Seller represents that it has not used a broker or finder in connection with this Agreement. Buyer shall be solely responsible for any real estate brokerage or sales commissions, finder fees or similar charges that may arise from or be related to this Agreement that are claimed by any person engaged by the Buyer relating to the Property or the Park Property or this Agreement , and, Buyer shall 525

indemnify the Seller from any such claims for real estate brokerage or sales commissions, finder fees or similar charges from any person engaged by Buyer . E xcept as specifically set forth otherwise in this Agreement, escrow/title fees will be split equally between Buyer and Seller.

13. MISCELLANEOUS.
(a) Authority. Each individual and entity executing this Agreement hereby represents and warrants that he/she/it has the capacity set forth on the signature pages hereof with full power and authority to bind the party on whose behalf he or it is executing this Agreement to the terms hereof.
(b) Entire Agreement. This Agreement is the entire Agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether oral or written, between the parties with respect to the matters contained in this Agreement. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or in behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach.
(c) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signatures(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Agreement attached hereto. (d) Time of Essence . Time is of the essence in the performance of and compliance with each of the provisions and conditions of this Agreement. (e) Notices. Any communication, notice or demand of any kind whatsoever which either party may be required or may desir e to give to or serve upon the other shall be in writing and delivered by personal service (including express or courier service), by electronic communication (if receipt is confirmed in writing ), or by recognized overnight courier with delivery costs prepaid (e.g., FedEx):

Buyer: Diego of Fontana, LLC
c/o Oremor Automotive Group
ATTN: RJ Romero
1377 Kettering Dr.

Ontario, CA 91761

With a Copy to: Oremor Automotive Group
ATTN: Mark Sanborn, Esq.

Legal Department
1377 Kettering Dr.

Ontario, CA 91761

526

Seller: City of Fontana
Attn: City Manager
8353 Sierra Ave.

Fontana, CA 92335

With a Copy to: Fontana City Attorney
2855 East Guasti Road
Suite 400
Ontario, CA 91761

Escrow Company: Debbi Faber
Chicago Title Company
920 Glenneyre, Suite N
Laguna Beach, CA 92651

Any party may change its address for notice by written notice given to the other in the manner provided in this Section. Any such communication notice or demand shall be deemed to have been duly given or served on the date personally served, if by personal service, one (1) day after the date of written acknowledgment of receipt, if by electronic communication, and one (1) day after deposit with recognized overnight courier.
(f) Further Actions. The parties agree to execute such other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement. (g) Construction. Wherever possible, each provision o f this Agreement shall be interpreted in such a manner as to be valid under applicable law; but, if any provision of this Agreement shall be invalid or prohibited thereunder, such invalidity or prohibition shall be construed as if such invalid or prohibited provision had not been inserted herein and shall not affect the remainder of such provision or the remaining provisions of this Agreement. (h) Interpretation. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Section headings of this Agreement are solely for convenience of reference and shall not govern the interpretation of any of the provisions of this Agreement. References to “Sections” are to Sections of this Agreement, unless otherwise specifically provided. (i) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
(j) Attorneys’ Fees. If any action is brought by either pa rty against the other party, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action.

For purposes of this Agreement, the term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of counsel to the parties hereto. (k) Relationship of Parties. Notwithstanding anything to the contrary contained herein, this Agreement shall not be deemed or construed to make the parties hereto partners or 527

joint venturers, or to render either party liable for any of the debts or obligations of the other, it being the intention of the parties to merely create the relationship of Seller and Buyer with respect to the Property to be conveyed as contemplated hereby.
(l) No Recording. This Agreement, or a memorandum thereof, shall not be recorded or filed in the public land or other public records of any jurisdiction by either party and any attempt to do so may be treated by the other party as a breach of this Agreement. (m) Assignment. Buyer shall neither assign its rights nor delegate its obligations hereunder without obtaining Seller’s prior written consent, which may be withheld in Seller’s sole discretion. Notwithstanding the foregoing, Buyer may, at any time prior to the Close of Escrow and without Seller’s prior written consent but upon ten (10) day’s prior written notice to Seller , assign its rights and obligations hereunder to an entity that controls, is controlled by or under common control with Buyer ( “Affiliate”). Any other purported or attempted assignment or delegation without obtaining Seller’s prior written consent shall be void and of no effect. (n) Binding Effect. Subject to the restrictions on transfer set forth in subsection (m) hereof, this Agreement shall be binding upon and inure to the benefits of the heirs, successors and assigns of the parties hereto.
(o) Effective Date. This Agreement shall be effective as of the date upon which it is executed by the final party executing the same.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOLLOWS

528

SIGNATURE PAGE
TO

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.

Dated:

SELLER:

CITY OF FONTANA,
a California municipal corporation

Matt Ballantyne
City Manager

ATTEST:

CITY CLERK

APPROVED AS TO FORM:

CITY ATTORNEY

Dated:

BUYER:

Diego of Fontana, LLC
a California corporation

Richard J. Romero
President/CEO

529

530

531

Grant Deed
16498.00001\29100188.4
EXHIBIT “B”

GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Fontana
8353 Sierra Ave.

Fontana, CA
Attention: City Manager

APN: 0240-011-30

SPACE ABOVE THIS LINE FOR RECORDER'S USE
EXEMPT FROM RECORDING FEES – GOVERNMENT
CODE SECTION 27383

GRANT DEED

CITY OF FONTANA, a California municipal corporation (hereinafter referred to as "Grantor"),

FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, does hereby GRANT and CONVEY to

Diego of Fontana, LLC, a California corporation (hereinafter referred to as "Grantee"),

Fee simple absolute title to that certain property more fully described in EXHIBIT A attached hereto and incorporated herein by reference.

IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on the date set forth below.

Dated: __________ CITY OF FONTANA, a California municipal corporation

By: _____________________________
Matt Ballantyne
City Manager

532

Grant Deed
16498.00001\29100188.4

533

Grant Deed
16498.00001\29100188.4

534

16498.00001\29100188.4

NOTARY ACKNOWLEDGEMENT
(California All-Purpose Acknowledgement)

STATE OF CALIFORNIA )
) ss.

COUNTY OF SAN BERNARDINO )

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

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

WITNESS my hand and official seal.

__________________________________________
Signature of Notary Public

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.
535
February 27, 2022
Ms. Penny L. Reeves
Attorney at Law
Manning Leaver Bruder & Berberich, LLP
801 S. Figueroa Street, Suite 1150
Los Angeles, California 90017
Reference: 1,587 sf parcel of land contiguous to a proposed multi-point auto dealership (dba Fontana CDJR), 16263
South Highland Avenue, City of Fontana, San Bernardino
County, California 92336.

Dear Mr. Reeves:

In accordance with your request and authorization, this writing transmits Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). The subject property comprises a relatively small 1,587 sf parcel of land, which consists of a former dedicated roadway easement, located contiguous to a proposed multi-point auto dealership dba Fontana CDJR.

The purpose of this Restricted Use Appraisal report is to set forth the investigations and analysis leading to our opinion of the as is fee simple market value of the subject property. The date of value is February 25, 2022, which corresponds to the last date of inspection; all references to property use and description relate to the date of value. The report is dated February 28, 2022, which generally corresponds to the completion of the investigations, analysis of relevant data and the completion of this report document.

The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with: the appraisal guidelines of the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP). 38 61st Place
Long Beach, CA 90803
Phone: 562.881.3998
Fax: 562.434.5315
Email: [email protected]
1 536
Ms. Penny L. Reeves
Manning Leaver Bruder & Berberich, LLP
February 28, 2022

Page 2 ends

This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2(c) of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.

As a result of the studies and analyses made, we have formed the opinion that the market values, subject to the attached Limiting Conditions and Certification, are:

As Is Fee Simple Market Value
Thirty One Thousand Dollars
($31,000)
The values represent cash or cash equivalent terms without any special or creative financing or sales concessions granted by anyone associated with a sale. The following Restricted Use Appraisal is for the exclusive use of Ms. Penny L. Reeves, the law firm Manning Leaver Bruder & Berberich, LLP and Ormer Auto Group, its subsidiaries and/or affiliates.

Respectfully submitted,
Steven P. Sullivan Michael Comstock, MAI
Director, Business Valuation & Real Estate Appraisals Certified General Real Estate Appraiser Auto Dealership Appraisal Group
38 61st Place
Long Beach, CA 90803
Phone: 562.881.3998
Fax: 562.434.5315
Email: [email protected]
2 537

CERTIFICATION
We certify that, to the best of our knowledge and belief, .... - The statements of fact contained in this report are true and correct. - The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions and conclusions. - We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.
- We ave no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
- Our engagement in this assignment was not contingent upon developing or reporting predetermined results. - Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
- Our analyses, opinions and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice. - Steven P. Sullivan made a personal inspection of the property that is the subject of this report. No other person provided significant professional assistance to my reported analysis and conclusions. Steven P. Sullivan is in conformity with all requirements stated within this certification. - The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice (USPAP); Title XI of the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and its regulations, the Standards for the Federal Deposit Insurance Corporation (FDIC), 12 CFR Part 323; and 12 CFR Part 34, Subpart C-Appraisals, 34.42 Definitions (g); and the Office of Thrift Supervision (OTS) Federal Regulation 12 CFR, Parts 506, 563, 564 and 571. - The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
- Steven P. Sullivan and Michael Comstock, MAI have adequate education, previously appraised many properties similar to this type of property, and is familiar with the area. Each is competent to appraise the subject property. Please see the qualifications section of this report for additional information. - We performed no appraisal services regarding the property that is the subject of this report within the three- year period immediately preceding acceptance of this assignment.

Steven P. Sullivan Michael Comstock, MAI
Director, Business Valuation & Real Estate Appraisals Certified General Real Estate Appraiser Auto Dealership Appraisal Group
3 538

COMPETENCY PROVISION
Steven P. Sullivan has adequate education, previously appraised many properties similar to this type of property, and is familiar with the area. A sample of auto dealerships appraised by this office has been summarized below:

Volvo Cars of Ontario, 1300 Auto Center Dr., Ontario
Jim Snead Ford, 2401 West Main Street, Waynesboro, Virginia John Donoghue Chevrolet, 363 Vinson Blvd, Whiteville, NC Volkswagen of Ontario, 701 Auto Center Dr., Ontario
Stanford Motors Inc (CDJR), 9631 AL-18, Vernon, AL
Derrow Shirkey Ford Lincoln, 1248 E Main St, Montpelier, OH Jeff Johnson Chevrolet, 2533 Carrollton Pike, Woodlawn, Virginia Cadillac / Mazda of Lake Lanier, 2355 Browns Bridge Road, Gainsville, GA McKenna Subaru, 18801 Beach Blvd, Huntington Beach
Family Kia, 2665 U.S. Highway 1 South, St. Augustine, Florida Pacific Volkswagen, 14900 Hindry Avenue, Hawthorne
South Bay Porsche, 14610 Hindry Avenue, Hawthorne
BMW of Riverside, 3060 Adams Street, Riverside
Lexus of Woodland Hills, 21701 Ventura Bl., Woodland Hills Tustin Toyota, 36 Auto Center Drive, Tustin
Empire Nissan & Ontario Hyundai, 1307 & 1377 Kettering Drive, Ontario, California Kent Chevrolet Cadillac, 1413 Hwy 62 E, Mountain Home, AR Nassief Toyota Ford Hyundai, 1059 OH-46, Fefferson, Ohio Shenango Honda, 3965 E. State Street, Hermitage, Pennsylvania Johnson Family CDJR, 178 Parkway Lane S., Floyd, VA
Atlanta West CDJR, 1251 Thorton Rd, Lithia Springs, Georgia Mike Patton Ford, 1402 Lafayette Parkway, LaGrange, Ga
Mike Patton Honda, 1406 Lafayette Parkway, LaGrange, Ga Mike Patton CDJR, 1408 Lafayette Parkway, LaGrange, Ga
Mike Patton PDI/Collision Center, 1400 Lafayette Parkway, LaGrange, Ga Hyundai of Venice Florida, 200 Jacaranda Boulevard, Venice, FLA Infiniti of Northern Kentucky, 1945 Dixie Highway, Ft. Wright, Kentucky Chrysler of Lawrenceburg, 1181 Bypass South, Lawrenceburg, Kentucky Rice Toyota, 2630 Battleground Ave, Greensboro, NC 27408 Bob Smith BMW, 24500 Calabasas Rd, Calabasas
Mercedes-Benz of Louisville, 2520 Terra Crossing Blvd, Louisville, KY Danville Toyota, 125 Piedmont Place, Danville, VA
Rocket Town DCJR, 1221 North H Street, Lompoc, Ca
Volkswagen of Rochester, 20 & 18A Farmington Road, Rochester, NH Galpin Honda, 11151 Laurel Canyon Blvd, San Fernando, CA Glenn Ford Lincoln, 4080 Lexington Road, Nicholasville
Covina Valley Kia, 626 S. Citrus Avenue, Covina Ca
Simi Valley Chevrolet, 1001 Cochran St, Simi Valley, CA Van Andel & Flikkema Chrysler Jeep, 3844 Plainfield Avenue, NE, Grand Rapids, Michigan Auto Plaza USA, 2000 Vince Road, Nicholasville, Ky 40356 Astro @ Exit 132 Buick GMC, 2238 White Hall Boulevard, White Hall, W. Virginia 26554 Johnson Chevrolet Buick Inc., 348 McClure Avenue, Clintwood, Va 24228 Auto Plaza USA, 2000 Vince Road, Nicholasville, Ky 40356 Astro @ Exit 132 Buick GMC, 2238 White Hall Boulevard, White Hall, W. Virginia 26554 Johnson Chevrolet Buick Inc., 348 McClure Avenue, Clintwood, Va 24228 Auto Plaza USA, 2000 Vince Road, Nicholasville, Ky 40356 Mansfield Chevrolet-Buick, Inc., 452 Hopkinsville Road, Russellville, KY 42276 Glendale Nissan, 727 S Brand Blvd. ,Glendale, CA 91204
4 539
Glendale Infiniti, 812 S Brand Blvd. Glendale, CA 91204 Orange Coast Infiniti & Adjacent Airstream Orange County, 15550 Beach Boulevard & 8084 W.

McFadden Avenue, Westminster, Ca
Dempewolf Ford, 2530 US 41 North Henderson, KY 42420
Delta Chevrolet Buick GMC, 125 51 Bypass North, Dysenburg TN Crown Ford, 420-445 Merrick Road & 247 Sunrise Highway, Lynbrook (Long Island), New York Driver Motors (CDJR of Mayfield), 915 Paducah Road, Mayfield, Kentucky Kia of Orange, 210 W. Katella Avenue, Orange, Ca 92867
K & M Dodge and Ram,4100 Plainfield Avenue NE, Grand Rapids, MI 49525 Motor Mile Dealership, 4180 Jupiter NE, Grand Rapids, MI 49525 Gloucester Toyota, 6357 George Washington Memorial Hwy, Gloucester Courthouse, Virginia 23061 Goodwin Bros DCJR, 250 Broad Street, New Castle, IN
Hyundai of Cumming, 750 Peachtree Parkway, Cumming, Georgia Rancho Santa Margarita Honda, 29961 Rancho Santa Margarita Parkway, Ranch Santa Margarita Redlands Ford, 121 West Colton Avenue, Redlands, California Smith Motor Cars (Mercedes Benz, Volvo, Jaguar Land Rover), 5 Dudley Farms Lane, Charleston, WV Win Chevrolet / Hyundai, 2201 E. 223rd Street, Carson, Ca Surprise Hyundai, 12925 N. Auto Show Avenue, Surprise, Arizona Mercedes Benz West Chester, 5897 Muhlhauser Road, West Chester Township, Ohio Mercedes Benz , Cincinnati, 8663, 8727, 8765 Montgomery Road, Cincinnati, Ohio Toyota of McDonough, 144 Georgia Highway 81 West, McDonough, Georgia Marina Del Rey Toyota, 4636 Lincoln Boulevard, Marina Del Rey, California 90292 Thornton Road Chrysler Dodge Jeep RAM, 1251 Thornton Road, Lithia Springs, Georgia Hanford Hyundai, 1990 Glendale Avenue, Hanford, California BMW of Murrieta, 26825 Auto Mall Parkway, Murrieta
Thorton Road Kia, 1301 Thorton Road, Lithia Springs, Georgia Hyundai of Athens, 4160 Atlanta Highway, Athens, Georgia Hardin Hyundai, 1271 S. Auto Center Drive, Anaheim
Acura of Tempe, 7800 South Autoplex Loop, Tempe
AutoNation Hyundai Tempe, 8050 South Autoplex Loop, Tempe Subaru Superstore of Chandler, 1050 South Gilbert Road, Gilbert AutoNation Honda Chandler, 1150 S. Gilbert Road, Gilbert Vista Ford of Oxnard, 1501 Auto Center Drive, Oxnard
Courtesy Toyota Satellite, N. Econlockatchee Trial and E. Colonial Drive, Orlando AutoNation Direct Ft Lauderdale, 1413 North Federal Highway, Frt Lauderdale, Fla Champion Hyundai, 3115 S. Padre Island, Corpus Christi, Texas Brown & Brown Chevy Mesa, 146 & 156 East Main Street, Mesa, AZ Courtesy Pontiac GMC, 605 N. US Highway 17/92, Longwood, Fla Autoway Pontiac GMC North, 9929 US Highway 19, Port Ritchey, Florida Bankston Dodge Grand Prairie, 2615 Interstate 20, Grand Prairie, Tx Dobbs Honda at Covington Pike, Elmore Drive, Memphis, TN Former Dobbs Nissan, 6535 Winshester Road, Memphis, TN
Go Hyundai 104th, 759 West 104th Avenue, Colorado
Maroone Honda Hollywood, 1450 N. State Road 7, Hollywood, FL Mercedes Benz Oxnard, 1511 Auto Center Drive, Oxnard
AutoNation Fiat North Denver, 749 West 104th Street, Northglenn, CO AutoNation Volvo Delray, 2201 N. Federal Highway, Delray, FL AutoNation Fiat South Bay, 14700 Hindry Avenue, Hawthorne, CA AutoNation Chevrolet Gelleria, 4747 LBJ Freeway, Dallas AutoNation Nissan Dallas, 4707 LBJ Freeway, Dallas
Toyota Arlington, 1661 Wet N’ Wild Way, Arlington, Texas Mini Valencia, 24135 Creekside Road, Valencia
AutoNation Volvo South Bay, 3010 Pacific Coast Highway, Torrance Dobbs Honda Mendenhall, 2785 S. Mendenhall Road, Memphis, TN MINI of Santa Monica, 1402 Santa Monica Boulevard, Santa Monica, CA 101 Ford & Hyundai, 200 N. Vermont & 3718 Beverly Bl., Los Angeles AutoNation Nissan Jacksonville, 1726 Cassat Ave., Jacksonville, FL 5 540
Nissan of Fort Lauderdale, 1050 S. Federal Highway, Fort Lauderdale, FL Hudson Nissan, 2159 Lexington Road, Nicholasville, KY
South Bay Lexus Service & Parts Center, 24777 Crenshaw Boulevard, Torrance, CA Chino Hills Ford, 4480 Chino Hills Parkway, Chino Hills Bakersfield Hyundai, 5300 Wible Road, Bakersfield
Simi Valley DCJ RAM, 2350 1st Street, Simi Valley
Coachella Valley Volkswagen, 79050 Varner Road, Indio
Temecula Buick GMC, 27420 Ynez Road, Temecula
Victorville Mitsubishi, 14644 Valley Center Dr, Victorville New Century BMW, 4245 Lankershim Bl, North Hollywood
New Century MINI, 4338 Lankershim Bl, North Hollywood
Fladeboe Buick GMC of Irvine, 42 Auto Center Drive, Irvine, Ca Fladeboe Pre-Owned, 14 Auto Center Drive, Irvine, Ca
Villa Ford, 2550 N. Tustin Avenue, Orange
Infiniti of Van Nuys, 5455 Van Nuys Bl., Sherman Oaks
Nissan of Van Nuys, 5425 Van Nuys Bl., Sherman Oaks
Proposed “Keyes Audi of Valencia” 23923 Creekside Road, Santa Clarita Culver City Honda, 9055 W. Washington Bl., Culver City
Culver City Toyota, 9077 W. Washington Bl., Culver City Manhattan Beach Toyota, 1500 N. Sepulveda Bl., Manhattan Beach Former Courtesy Pontiac GMC, 605 N. US Highway 17/92, Longwood, Fla Browning Dodge Chrysler Jeep RAM, 1983 Hamner Avenue, Norco Huntington Beach Mitsubishi, 16751 Beach Bl., Huntington Beach Metro Honda / Acrua, 9377 & 9399 Autoplex Drive, Montclair David Maus VW North, 1050 Lee Road, Orlando, FL
David Maus VW South, 5474 S. Orange Blossom Trail, Orlando, FL Del Ray Honda, 3000 S. Federal Highway, Delray Beach, FL Grapevine Ford (Future Texas Toyota of Grapevine), 701 E. State Highway, Texas Grand Pairie Ford, 701 E. Safari, Grand Prairie
Gwent Place Ford, 3230 Satellite Bl, Duluth, Georgia
Gwent Place Nissan, 2555 Pleasant Hill Road, Duluth, Georgia Mall of Georgia Ford, 4525 Nelson Brigden Bl., Burford, GA Metro Auto Auction Dallas, 1836 Midway, Louisville, Texas South County Lexus Used Car Bldg, 28400 Marguerite Parkway, Mission Viejo Texas Nissan of Grapevine, 1401 W. State Highway 114, Grapevine, Texas Texas Toyota of Grapevine, 801 E. State Highway, Grapevine, Texas Toyota of Dallas, 2610 Forest Lane, Dallas, Texas
Toyota of Deerfield, 1441 S. Federal Highway, Deerfield Beach, Florida Trophy Nissan, 5050 N. Gallo way Avenue, Mesquite, Texas Vandergriff Hyundai, 1120 Interstate Highway 20 West, Arlington, Texas Vandergriff Chevrolet, 1200 Interstate Highway 20 West, Arlington, Texas Volvo of Dallas, 6600 State Highway 121, Frisco, Texas
Crest Cadillac and Pre-Owned, 2701 N. Central Expressway, Plano, TX Crest Infiniti and former Isuzu, 2501 N. Central Expressway, Plano, TX Crest Pre-Owned, 2349 N. Central Expressway, Plano, TX
Crown Automotive Toyota, 255 W Pershing Rd, Decatur, Ill Husker Auto Group, 6833 Telluride Drive, Lincoln, Nebraska Joe Myers Auto Mall, Houston, TX
Baker Nissan, 19630 NW 290, Houston, TX
Kenny Kent Chevrolet, 4600 Division, Evansville, Indiana Kenny Kent Toyota/Lexus, Evansville, Indiana
McKinney Buick GMC / Nissan of McKinney, 3800 - 3900 S. Central Expressway, McKinney, TX Miles Chevrolet, 150 W Pershing Rd, Decatur, Illinois
Reliable Chevrolet (TX), 800 N. Central Expressway, Richardson, Tx Reliable Chevrolet (TX) UT Facility, 101 E Arapaho, Richardson, TX Reliable Chevrolet Mercedes Infiniti, 3655 S Campbell, Springfield, MO Reliable Chevrolet, 9901 Coors Blvd, Albequerque, New Mexico 6 541
Reliable Nissan, 9901 Coors Blvd, Albequerque, New Mexico Reliable Imports & RV, 438 S Ingram Mills Road, Springfield, MO Reliable Lexus/Toyota/BMW, Spingfield, MO
Richardson Chrys,Jeep,Dodge, 1321 N Central Exp Richardson, TX Town East Ford, 18411 LBJ Freeway, Mesquite, TX
Toyota of Richardson, Main Sales Facility, 1221 N. Central Expressway, Richardson, TX Toyota of Richardson, 400 & 404 Monte Blaine Ln, Richardson, TX Van Chevrolet (TX) - Main Facility, U/C, 1700 S I-35E, Carrolton, TX Van Chevrolet Cadillac Subaru, 100 NW Vivion Rd, Kansas City Van Hyundai (TX), 1207 S I-35 E, Carrollton, TX
Vandergriff Acura, 1100 W I-20, Arlington, TX
Vandergriff Honda, 1104 W. I-20 Arlington, TX
Vandergriff Toyota, 1000 W I-20, Arlington, TX
Volvo of Richardson, Richardson, TX
Westway Ford Fleet Sales Facility, 727 W Airport Freeway, Irving, TX Westway Ford Main Facility, 801 W Airport Freeway, Irving, Tx Vandergriff Honda, 1104 W I-20, Arlington, TX
Cerritos Dodge Chrysler Jeep, located at 18803 Studebacker Road, Cerritos Cerritos Acura Mazda, located at 18827 Studebacker Road, Cerritos Valley Hi Honda located at 16710 Valley Park Lane, Victorville Valley hi Nissan 15722 Valley Park Lane, Victorville
Keyes Toyota 2020 Bell Road, Phoenix
Hardin Honda, 1381 S. Auto Center Drive, Anaheim
Hardin Buick GMC of Anaheim, 1380 S. Auto Center Dr, Anaheim Poway Buick GMC, 13811 County Highway S4, Poway
Mercedes Benz Louisville, 4156 Shelbyville Road, Louisville, KY Mini of Louisville, 4170 Shelbyville Road, Louisville, KY Vacant Dealership In Cerritos, 10901 E. 183rd Street, Cerritos Modesto Acura 4325 McHenry Avenue, Modesto
Power Honda Costa Mesa, 2888 Harbor Boulevard, Costa Mesa, CA Volkswagen of Garden Grove, 10800 Trask Avenue, Garden Grove, CA Keyes Mercedes-Benz, 5746 Van Nuys Boulevard, Van Nuys, CA Keyes Toyota & Lexus, 5803 & 5905 Van Nuys Boulevard, Van Nuys, CA 91401 South County Lexus, 28242 and 28302 Marguerite Parkway, Mission Viejo, CA 92692 South County Motor Cars, 28402 Marguerite Parkway, Mission Viejo, CA Vacant Dealership, 19232 Beach Bl., Huntington Beach
Roseville Kia & Mitsubishi, 780 Automall Drive, Roseville, CA Keyes Hyundai, 5319 Van Nuys Boulevard, Van Nuys, Ca 91401 Keyes Nissan, 20539 Ventura Boulevard, Woodland Hills, Ca 91364 Former Autoway Nissan, 13600 Icot Boulevard, Clearwater, FL 33760 Former Autoway Dodge, 19400 US Highway 19 N, Clearwater, FL. 33760 Former Autoway Pontiac Buick GMC South, 19320 US Highway 19 N, Clearwater, FL 33760 Former Autoway Ford - Bradenton, 3400 14th Street West, Bradenton, FL Existing Mercedes Benz Sarasota, 6828 S. Tamiami Trail, Sarasota, FL Maroone Lincoln Mercury of N. Palm Beach, 3626 Northlake Boulevard, Lake Park, FL Lexus of Palm Beach (remote service), 1030 N. Congress Avenue, W. Palm Beach, FL Existing Mercedes Benz of Miami, 444 NW 165th Street, Miami, FL Mercedes Benz Body Shop, 9200 NW 27th Avenue, Miami, FL Dobbs Honda at Covington Pike, Elmore Drive, Memphis, TN Former BMW of Dallas, 2536 Forest Lane, Dallas, Tx
Former Desert Chrysler Jeep Dodge, 3115 Fremont Street, Las Vegas, NV Pacific Ford, 3600 Cherry Avenue, Long Beach, CA 90807
Toyota of Carson City, located at 3659 South Carson Street, Carson City, NV Hoehn Audi, located at 5215 Car Country Drive, Carlsbad, Ca.

BMW of Long Beach, located at 2998 Cherry Avenue, Signal Hill, Ca Proposed North County BMW, located at 1715 Hacienda Drive, Vista, Ca 7 542
Proposed Circle Audi of Long Beach, located at 1919 Lakewood Boulevard, Long Beach, CA.S & J Chevrolet, located at 18605 Studebaker Road, Cerritos, CA.

Capistrano Chrysler/Jeep/Dodge, located at 33301 Camino Capistrano, San Juan Capistrano, CA Capistrano Nissan, located at 33375 Camino Capistrano, San Juan Capistrano, CA Nissan of Newport News, located at 12925 Jefferson Ave., Newport News, Virginia Boardwalk Auto Center, located at 1 Bair Island Rd., Redwood City, CA Boardwalk Pre-Owned, 535 E. Bayshore Blvd., Redwood City, CA Power Volvo Cerritos, located at 18303 Studebaker Rd., Cerritos, CA Team Toyota, located at 1000 Blairs Ridge Rd., Lithia Springs, Georgia Team Ford/Lincoln/Mercury, located at 1575 Mansell Rd., Alpharetta, Georgia Cerritos Nissan, located at 18707 Studebaker Rd., Cerritos, CA Hayward Nissan, located at 24644 Mission Blvd., Hayward, CA Power Nissan of Torrance, located at 20710 Hawthorne Blvd., Torrance, CA Toyota of Carlsbad Sales, Service Collision Center, located at 6020 Avenida Encinitas, Carlsbad, CA Power Chevrolet, Pontiac, Buick, GMC, located at 14610 Hindry Ave., Hawthorne, CA Las Vegas Acura, located at 7000 W. Sahara Ave., Las Vegas, Nevada BMW of Mountain View, located at 150 E. El Camino Real, Mountain View, CA Shelly BMW, located at 6750 Manchester Blvd., Buena Park, CA Burt Subaru, located at 5300 S. Broadway, Englewood, Colorado Southwest Chrysler/Jeep, located at 2075 Hamner Ave., Norco, CA Mike Shad Chrysler/Jeep, located at 1736 Cassat Ave., Jacksonville, Florida Irvine Mazda/GMC, located at 11 Auto Center Dr., Irvine, CA Saturn of West 78, located at 2205 Vista Way, Oceanside, CA Saturn of National City, located at 2202 National City Blvd., National City, CA Mazda of Naperville, located at 2363 Aurora Ave., Naperville, Illinois Zero 1 Motors, located at 5300 Katella Ave., Los Alamitos, CA O’Brien Auto Park of Urbana (Volkswagen, Toyota/Scion, Chrysler, Dodge, Mitsubishi, Kia, Mazda, Subaru, Suzuki and Isuzu) located at 1111 O’Brien Dr., Urbana, Illinois Corley Lincoln/Mercury/Volvo, located at 9000 N. Pan American Fwy. NE, Albuquerque, New Mexico Hartzheim Dodge, located at 1050 West Capitol Expressway, San Jose, CA Smythe Volvo, located at 740 West Capitol Expressway, San Jose, CA Toyota of Augusta, located at 3069 Washington Rd., Augusta, Georgia Buena Park Nissan, located at 6501 Auto Center Dr., Buena Park, CA Colonial Honda, located at 144 S. Glendale Ave., Glendale, CA Action Nissan, located at 307 Thompson Ln., Nashville, Tennessee Ford of Rancho Santa Margarita, located at 30031 Santa Margarita Pkwy., Rancho Santa Margarita, CA Weir Canyon Chevrolet, located at 1001 Weir Canyon Rd., Anaheim, CA Proposed Corley Lincoln/Mercury/Volvo, located at 9000 N. Pan American Fwy., Albuquerque, NM AutoMax-Auto Superstore, 5220 E. Main St. and adjacent 0.79-acre parcel, Farmington, New Mexico Union Mitsubishi, located at 998 S. Western Ave., Los Angeles, CA Union Dodge, located at 9898 Trask Ave., Garden Grove, CA Santa Margarita Ford, located at 30031 Santa Margarita Pkwy., Rancho Santa Margarita, CA Vista Chevrolet, located at 5501 Drexel Rd., Las Vegas, Nevada Valley Toyota, located at 1835 Glendale Ave., Hanford, CA Power Volkswagen of Corona, located at 2603 Wardlow Rd., Corona, CA Desert BMW of Las Vegas, located at 2333 S. Decatur Blvd., Las Vegas, Nevada Desert Nissan of Las Vegas, located at 5050 W. Sahara Ave., Las Vegas, Nevada Weir Canyon Honda and Weir Canyon Acura, located at 8323 & 8375 E. La Palma Ave., Anaheim Planet Acura, located at 7550 Firestone Blvd., Downey, CA Power Nissan of Irvine, located at 32 Auto Center Dr., Irvine, CA Modesto Toyota/Scion, located at 4513 McHenry Ave., Modesto, CA Valley Lexus, located at 4320 McHenry Ave., Modesto, CA Modesto Mazda/Suzuki, located at 4401 McHenry Ave., Modesto, CA Lompoc Honda, located at 1224 N. H St., Lompoc, CA
Market ground rent estimate for Smythe Volvo, located at 4650 Stevens Creek Blvd., San Jose Market ground rent estimate for Power Acura of South Bay, located at 25341 Crenshaw Blvd., Torrance Nissan of Mission Hills, located at 11000 Sepulveda Blvd., Mission Hills, CA 8 543
Folsom Lake Ford/Kia, located at 12755 Folsom Bl., Folsom Lake, CA Nissan of Garden Grove, located at 9222 Trask Ave., Garden Grove, CA Toyota of Garden Grove, located at 9444 and 9670 Trask Ave., Garden Grove, CA Hamer Toyota, located at 11041 and 11046 Sepulveda Blvd., Mission Hills, CA Superior Nissan of Mission Hills, located at 11000 Sepulveda Blvd., Mission Hills, CA Surf City Mazda, located at 16800 Beach Blvd., Huntington Beach, CA Porsche of Long Beach, located at 1850 Outer Traffic Cir., Long Beach, CA Circle Imports (VW & Audi), located 1919 N. Lakewood Bl., Long Beach, CA Lujack Lexus of the Quad Cities, located at 101 W. Kimberly Rd., Davenport, Iowa Lujack Honda/Hyundai, located at 3707 N. Harrison St., Davenport, Iowa Marina Honda, located at 5850 Centinela Ave., Los Angeles, CA Marina Ford, located at 5880 Centinela Ave., Los Angeles, CA Action Nissan, located at 307 Thompson Lane, Nashville, Tennessee Priority Hyundai, located at 12872 Jefferson Avenue, Newport News, Virginia Mercedes-Benz of Escondido, located 1101 W. Ninth Ave., Escondido, CA Toyota of Long Beach, located at 4401 E. PCH, Long Beach, CA Long Beach Mitsubishi, located at 4400 E. Los Coyotes Diagonal, Long Beach, CA Coast Cadillac, located at 3399 E. Willow Street, Long Beach, CA Former Anaheim Hyundai, located at 1271 S. Auto Center Dr., Anaheim, CA Long Beach Lincoln/Mercury/Mazda, located at 3500 Cherry Ave., Long Beach, CA Avondale Toyota/Scion, located at 10005 W. Papago Fwy., Avondale, Arizona El Cajon Ford, located at 1595 E. Main St., El Cajon, CA Roseville Mazda Subaru, Autowest BMW & Roseville Buick/GMC, located at 100, 120 and 150 Automall Dr., Roseville, CA
Vacaville Harley-Davidson, located at 100 Auto Mall Dr., Vacaville, CA Moore Chrysler Jeep Dodge, located at 955 W. Ventura St., Fillmore, CA Mercedes Benz of Ann Arbor, located at 570 Auto Mall Dr., Ann Arbor, Michigan Hoehn Porsche, located at 6800 Avenida Encinas, Carlsbad, CA Hoehn Honda, located at 5454 Paseo Del Norte, Carlsbad, CA Norm Reeves Acura of Mission Viejo, located at 28802 Marguerite Pkwy., Mission Viejo, CA Hoehn Mercedes-Benz, located at 5475 Car Country Dr., Carlsbad, CA AutoHaus West, located at 45 Oldfield Rd., Irvine, CA
CA Dodge/Chrysler/Jeep, located at 415 W. Central Ave., Lompoc, CA Hall Nissan of Virginia Beach, located at 141 Spruce St., Virginia Beach, Virginia Hall Honda of Virginia Beach, located at 3516 Virginia Beach Blvd., Virginia Beach, Virginia Hall Chrysler/Jeep, located at 3100/3148/3152 Virginia Beach Blvd., Virginia Beach, Virginia Hall Pontiac/GMC Sales, located at 3200/3222/Virginia Beach Blvd., Virginia Beach, Virginia Hall Hummer, located at 3252 Virginia Beach Blvd., Virginia Beach, Virginia Hall Nissan-Virginia Beach, located at 3757/3769 Bonney Rd., Virginia Beach, Virginia Hall Body & Paint Shop, located at 141 Spruce St., Virginia Beach, Virginia Hall Mazda of Virginia Beach, located at 4372 Holland Rd., Virginia Beach, Virginia Hall Acura and Mitsubishi of Virginia Beach, 3496/3500 Holland Rd., Virginia Beach, Virginia Hall Chevrolet/Hyundai of Chesapeake, 3412/3416 Western Branch Blvd., Chesapeake, Virginia Hall Nissan of Chesapeake, located at 3417 Western Branch Blvd., Chesapeake, Virginia Hall Ford of Newport News, located at 12896 Jefferson Ave., Newport News, Virginia Hall Acura of Newport News, located at 12499/12501 Jefferson Ave., Newport News, Virginia Hall Nissan of Newport News, located at 12925 Jefferson Ave., Newport News, Virginia Hall Auto Mall of Newport News, located at 13151 Jefferson Ave., Newport News, Virginia Hall Stateline Honda, located at 134 Caratoke Hwy., Moyock, North Carolina Toyota/Scion of Whittier, located at 14561/14597 Whittier Blvd., Whittier, CA Power Dodge of Valencia, located at 23901 Creekside Rd., Santa Clarita, CA Power Chrysler Jeep of Valencia, located at 23923 Creekside Rd., Santa Clarita, CA Moreno Valley Hyundai, located at 27750 Eucalyptus Ave., Moreno Valley, CA Moreno Valley Toyota, located at 27990 Eucalyptus Ave., Moreno Valley, CA Moss Bros. Dodge, located at 1100 S. E St., San Bernardino, CA Moss Bros. Ford, located at 1900 W. Valley Blvd., Colton, CA Town North Nissan, located at 9150 Research Blvd., Austin, Texas 9 544
South Bay Lotus, located at 2775 Pacific Coast Hwy., Hermosa Beach, CA Saturn of Tucson, located at 6020 E. Speedway Blvd., Tucson, Arizona Saturn of Fairfield, located at 4850 Auto Plaza Ct., Fairfield, CA Gwent Place Chevrolet and Honda, located at 3325 & 3277 Satellite Blvd., Duluth, Georgia Superior North Lexus, Volvo and Collision Center, located at 9300, 9350 & 9400 NW Prairie View Rd., Kansas City, Missouri
Hummer of Kansas City, located at 7925-7951 Shawnee Mission Pkwy., Merriam, Kansas Saturn of Riverside, located at 8101 Auto Dr., Riverside, CA Infiniti of Oakland, located at 7201 Oakport St., Oakland, CA A portion of the Cary Auto Mall known as Hendrick Cadillac, Hummer and Collision Center of Cary, located at 101, 115 & 121 Crash Ln., Cary, North Carolina A portion of the Cary Auto Mall known as Hendrick Chevrolet, Dodge and Saturn, located at 100 Auto Mall Dr., 81 & 91 Mackenan Dr., Cary, North Carolina
A portion of the Cary Auto Mall known as Hendrick Pontiac, Buick, GMC & Pre-Owned of Cary, located at 80 & 90 Mackenan Dr., Cary, North Carolina
Honda Cars of McKinney, located at 601 S. Central Expressway, McKinney, Texas Hendrick Lexus, located at 6025 E. Independence Blvd., Charlotte, North Carolina Toyota & Honda of Concord, located at 7650 & 7670 Speedway Blvd., Concord, North Carolina Valley-Hi Toyota/Scion/Honda, located at 14612 Valley Center Dr., Victorville, CA Mercedes-Benz of San Francisco, located at 950 Van Ness Ave., San Francisco, CA Lake Norman Chrysler/Jeep, located at 20700 Torrence Chapel Rd., Cornelius, North Carolina Puente Hills Ford, located at 17340 Gale Ave., within the Puente Hills Auto Mall, City of Industry, CA Scottsdale 101 Auto Collection, which includes Acura, Audi, BMW/Mini, Jaguar, Aston Martin, Land Rover, Lincoln/Mercury, Porsche, Volkswagen and Volvo, Scottsdale, Arizona Land Rover of South Bay, located at 900 N. Pacific Coast Hwy., Redondo Beach, CA Security Chevrolet, located at 1100 E. Vista Way, Vista, CA Burt Ford on Arapahoe, located at 10039 E. Arapahoe Rd., Centennial, Colorado Burt Subaru, located at 5300 S. Broadway, Englewood, Colorado Burt Ford in Parker, located at 19185 E. Lincoln Ave., Parker, Colorado Proposed Burt Chevrolet of Parker, located at 19185 E. Lincoln Ave., Parker, Colorado Burt Mazda, located at 10301 E. Arapahoe Rd., Centennial, Colorado Weseloh Chevrolet/Hummer, located at 33633 Camino Capistrano, San Juan Capistrano, CA San Juan Capistrano Honda, located at 33555 Camino Capistrano, San Juan Capistrano, CA Proposed Turnersville Auto Mall, which will comprise seven free-standing complete automotive dealership buildings designed for Acura, BMW, Chevrolet, Honda, Hyundai/Maserati, Nissan and Toyota, all located on a 62.174-acre parcel, located at 3400-3900 Black Horse Pike, Turnersville, Gloucester County, New Jersey
Proposed Inskip Auto Mall, which includes Aston Martin, Audi, Bentley, Maserati, Porsche, BMW, Infiniti, Lexus, Mercedes-Benz and Volvo, located at the northwest quadrant of the intersection of Bald Hill Road and Route 117, Warwick, Kent County, Rhode Island MotorWorld, located at 150 Motorworld Parkway, Wilkes-Barre, Pennsylvania Capistrano Ford, located at 33949 Camino Capistrano, San Juan Capistrano, CA Volvo of San Diego, planned for a major expansion and renovation, located at 5316 & 5350 Kearny Mesa Rd., San Diego, CA
Allison BMW, located at 150 E. El Camino Real, Mountain View, CA Mazda/GMC of Irvine, located at 11 Auto Center Dr., Irvine, CA Champion Chevrolet/Mazda of La Porte, located at 112 S. State Highway 146, La Porte, Texas Power Nissan of El Monte, located at 3428 N. Peck Rd., El Monte, CA Proposed Foothill Ranch GMC/Pontiac/Buick, located at 26901 Auto Center Drive, Foothill Ranch, CA Proposed New Century BMW, located at 1147 Main St., Alhambra, CA Proposed Fairfield Hyundai, located at 2615 Auto Mall Pkwy., Fairfield, CA Diamond Bar Honda, located at 525 Grand Ave., Diamond Bar, CA Bankston Nissan, located at 13130 Preston Rd., Dallas, Texas Todey Lincoln Mercury & Mazda, proposed for a major renovation and expansion, located at 1601 E.

Ventura Blvd., Oxnard, CA
Shamrock Ford, located at 4600 Dublin Blvd., Dublin, CA Family Porsche/VW/Hyundai, located at 5300 Wible Rd., Bakersfield, CA 10 545
Team Dodge of Stone Mountain, located at 4550 Greer Circle, Stone Mountain, Georgia Bankston Dodge Irving, located at 1251 E. Airport Freeway, Irvine, Texas Taft Family Motors, which includes Chevrolet, Pontiac and Buick franchises, located in Taft, CA Huntington Beach Chrysler/Jeep/Hummer, at 3470 16701 Beach Blvd., Huntington Beach Calabasas Motorcars Mercedes-Benz, located at 24181-24241 Calabasas Rd., Calabasas, CA Wondries Nissan, located at 726 E. Main St., Alhambra, CA Wondries Ford, located at 400 S. Atlantic Blvd., Alhambra, CA Wondries Toyota, located at 1543 W. Main St., Alhambra, CA Chapman Las Vegas Dodge, located at 3470 Boulder Hwy., Las Vegas, Nevada Santa Paula Family Ford, located at 126 S. Hallock Dr., Santa Paula, CA Saturn of National City, located at 2202 National City Blvd., National City, CA North County Jeep/GMC/Kia, located at 1501 Auto Park Way South, Escondido, CA North County Ford, located at 450 West Vista Way, Vista, CA Superior Nissan, located at 17320 Gale Ave., City of Industry, CA Fresno Acura, located at 7230 N. Palm Ave., Fresno, CA
Mercedes-Benz of Long Beach, located at 2300 E. Spring St., Signal Hill, CA Norm Reeves Honda Superstore, located at 18500 Studebaker Rd., Cerritos, CA Tustin Mazda, located at 5 Auto Center Dr., Tustin, CA
Power Ford, located at 2 Auto Center Dr., Tustin, CA
Infiniti of Tustin, located at 33 Auto Center Dr., Tustin, CA Tustin Mitsubishi, located at 23 Auto Center Dr., Tustin, CA Power Chevrolet, located at 21 Auto Center Dr., Irvine, CA Scott Pontiac/GMC, located at 11710 Valley Blvd., El Monte, CA Gavilan Honda, located at 6700 Chestnut St., Gilroy, CA Honda North, located at 395 W. Herndon Ave., Clovis, CA Irvine BMW & Mini, located at 9881 Research Dr., Irvine, CA Shelly BMW, located at 6750 Manchester Blvd., Buena Park, CA Ken Grody Lincoln/Mercury, located at 6692 Manchester Blvd., Buena Park, CA Proposed South Bay BMW, located at 18800 Hawthorne Blvd., Torrance, CA Proposed McKenna Audi of Norwalk, located at 10850 Firestone Blvd., Norwalk, CA Proposed McKenna VW of Norwalk, located at 10915 Firestone Blvd., Norwalk, CA Proposed Volkswagen of Puente Hills, located at 17110 Gale Ave., Industry, CA Cutter Automotive Galleries, featuring Mercedes-Benz, Porsche, BMW and Audi franchises, located at 402 S. Hope Ave., Santa Barbara, CA
Cutter Motors, featuring Infiniti, Jaguar and Land Rover franchises, located at 401 S. Hope Ave., Santa Barbara, CA
Proposed McKenna Porsche of Norwalk, located at 10830 Firestone Blvd., Norwalk, CA McKenna Volkswagen of Huntington Beach, located at 18711 Beach Blvd., Huntington Beach, CA Nissan/Daewoo of Fairfield, located at 2545 Auto Mall Pkwy., Fairfield, CA Fairfield Toyota, located at 2575 Auto Mall Pkwy., Fairfield, CA Fairfield Mitsubishi, located at 2701 Auto Mall Pkwy., Fairfield, CA Infiniti/Volvo of Fairfield, located at 2855 Auto Mall Pkwy., Fairfield, CA Metro Infiniti of Monrovia, located at 821 E. Central Ave., Monrovia, CA Santa Ana Chrysler/Jeep, located at 1405 Auto Mall Dr., Santa Ana, CA Pacific Ford, located at 3600 Cherry Ave., Long Beach, CA Car Max Chrysler, located at 1000-1030 W. Manchester Bl., Inglewood, CA Ontario Chrysler/Jeep, located at 1202 Auto Center Dr., Ontario, CA South Bay BMW, located at 2901 Pacific Coast Highway, Hermosa Beach, CA Infiniti of Riverside, located at 3040 Adams St., Riverside, CA Nissan of Sante Fe Springs, located at 12624 Rosecrans Ave., Santa Fe Springs, CA Proposed Toyota of Escondido, located at 231 Lincoln Parkway, Escondido, CA Todey Chevrolet, located at 1345 N. Oxnard Blvd., Oxnard, CA Pacific Porsche, located at 2900 Pacific Coast Highway, Torrance, CA Planet Hyundai, located at 7150 W. Sahara Ave., Las Vegas, Nevada McKenna Pomona Dodge, located at 25 Rio Rancho Rd., Pomona, CA McKenna Pomona Chrysler/Jeep, located at 35 Rio Rancho Rd., Pomona, CA Costa Mesa Lincoln/Mercury, located at 2626 Harbor Blvd., Costa Mesa, CA 11 546
Bell Honda, located at 701 W. Bell Rd., Phoenix, Arizona Proposed Puente Hills Toyota, located at 17070 Gale Ave., City of Industry, CA Proposed Puente Hills Volkswagen, located at 17110 Gale Ave., City of Industry, CA Proposed dealership to be known as Falconi Acura, Las Vegas, Nevada Sierra Chevrolet/Oldsmobile, located at 1450 S. Shamrock Ave., Monrovia, CA Sierra Honda, located at 1450 S. Shamrock Ave., Monrovia, CA Sierra Pontiac/Buick, located at 731-735 E. Central Ave., Monrovia, CA Sierra Isuzu, located at 721 E. Central Ave., Monrovia, CA Saturn of Monrovia, located at 1305 S. Mountain Ave., Monrovia, CA Sierra Acura/Isuzu, located at 1700 W. Main St., Alhambra, CA Saturn of Alhambra, located at 1800 W. Main St., Alhambra, CA Toyota of Escondido, located at 999 N. Broadway, Escondido, CA Puente Hills Pontiac/GMC/Buick, located at 17280 Gale Ave., City of Industry, CA Jack Maxton Chevrolet, located at 700 E. Dublin-Granville Rd., Worthington, Ohio Volvo of Inland Empire, located at 785 Showcase Drive S., San Bernardino, CA Auto Stiegler Mercedes-Benz, situated on a 42,457 sf site (27,834 sf of which is leased), located at 16721 Ventura Blvd., Encino, CA
Nissan of Temecula, located at 41895 Motor Car Parkway, Temecula, CA An existing 14,060 sf existing automobile dealership plus a proposed parking structure located at 5746 Van Nuys Blvd., Los Angeles (Van Nuys), CA
Big Valley Dodge/Subaru, located at 6110 Van Nuys Blvd., Los Angeles (Van Nuys), CA Commonwealth VW/Audi, located at 1450 Auto Mall Dr., Santa Ana, CA Desert Honda, located at 1700 E. Sahara Ave., Las Vegas, Nevada Costa Mesa Toyota, situated on a 4.97-acre site which is ground leased, located at 1966 & 1970 Harbor Blvd., Costa Mesa, CA
South Bay Toyota, located at 18240 & 18416 S. Western Ave., Gardena, CA Tustin Lexus, located at 45 Auto Center Dr., Tustin, CA Valencia Nissan, located at 24111 Creekside Rd., Santa Clarita, CA Mazda, Hyundai and Mitsubishi, automotive dealership known as Bell Road Auto Mall, located at 999 W.

Bell Rd., Phoenix, Arizona
Pacific Porsche, located at 2900 Pacific Coast Highway, Torrance, CA Escondido Motors (Mercedes-Benz), located at 1101 W. Ninth Ave., Escondido, CA Honda of Santa Ana, located at 1505 Auto Mall Dr., Santa Ana, CA Falconi Acura, located at 5550 W. Sahara Ave., plus an adjacent 1.11-acre parcel of land located at 2333 Lindell Rd., Las Vegas, Nevada
North County Toyota, situated on a 5.90-acre site which is ground leased, located at 1331 N. Euclid St., Anaheim, CA
Lexus of Westminster, located at 13590 & 13600 Beach Blvd. and Honda World, located at 13610 Beach Blvd., Westminster, CA
Corona Nissan, located at 2575 Wardlow Rd., Corona, CA
Lexus of Valencia, located in Santa Clarita, CA
Saturn of Loma Linda and Spreen Honda, located within the Loma Linda Auto Center, San Bernardino Puente Hills Nissan/Infiniti, located within the Puente Hills Auto Mall, City of Industry, CA Dealership portfolio including New Century Ford, Toyota of North Hollywood, Toyota Certified Sales/Body Shop and Midway Ford, County of Los Angeles, CA As such, Steven P. Sullivan is competent to appraise the subject property. Please see the qualifications section of this report for additional information. 12 547

TYPE OF APPRAISAL REPORT
This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.

STATEMENT OF OWNERSHIP AND PROPERTY HISTORY
In summary, according to Chicago Title’s on-line data service, title to the subject property is vested as follows:

City of Fontana
To the best of our knowledge, the subject property has not transferred ownership during the past three years.

IDENTIFICATION OF THE PROPERTY
The subject property comprises a dedicated roadway easement which is scheduled to be abandoned by the city of Fontana. No address has been assigned to the parcel. The property is further identified within a parcel map attached as:

CLIENT AND INTENDED USERS
The client and intended user of this report is Ms. Penny L. Reeves, the law firm Manning Leaver Bruder & Berberich, LLP and Ormer Auto Group, its subsidiaries and/or affiliates, and is based, in part, upon documents, writings, and other information provided by the client. The depth of discussion contained herein is specific to the client’s needs and for the stated use. Use of this report by anyone other than the stated intended user and for any other use than the stated intended use, is 13 548
prohibited. The appraiser is unaware of any other users as specified in the engagement of this assignment.

PURPOSE OF THE APPRAISAL
The purpose of this appraisal report is to set forth the investigations and analyses leading to our opinion of the as is fee simple market value of the subject property.

FUNCTION / USE OF REPORT
For use by the Ms. Penny L. Reeves, the law firm Manning Leaver Bruder & Berberich, LLP and Ormer Auto Group for internal decision making purposes. It may not be used in connection with a federally related transaction per FIRREA.

DEFINITION OF MARKET VALUE
Market value means the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. buyer and seller are typically motivated;

2. both parties are well informed or well advised, and acting in what they consider their own best interest;

3. a reasonable time is allowed for exposure in the open market;

4. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.1 1 Office of the Comptroller of the Currency under 12 CFR, Part 34, Subpart C-Appraisals, 34.42 Definitions (g). 14 549

DEFINITION OF MARKET VALUE AS IS
Market value as is means the value of specific ownership rights to an identified parcel of real estate as of the effective date of the appraisal; relates to what physically exists and is legally permissible and excludes all assumptions concerning hypothetical market conditions or possible rezoning.2

PROPERTY RIGHTS / INTEREST APPRAISED
The existing vacant parcel is not encumbered by lease. The property rights appraised are those of the fee simple estate.

SCOPE OF WORK
The scope of this assignment required investigation of sufficient data relative to the subject property to derive an opinion of value. The investigation undertaken in the preparation of this appraisal report included, but was not limited to, the following: The subject property was inspected to determine the locational and physical characteristics. An investigation was made of the surrounding properties to determine conformity and influences. An investigation was made at the appropriate City/County offices to determine the subject property zoning, development standards, approvals, permits, etc.

Site development plans, building plans and specifications were reviewed to determine size and quality of the existing improvements. A survey was conducted of surrounding competitive properties to obtain land sell data. The resulting data was then analyzed, conclusions were made and, utilizing applicable appraisal techniques, an opinion of market value was formed.

This report is a Restricted Use Appraisal Report in accordance with Standards Rule 2-2© of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents only summary discussions of the data, reasoning, analyses that were used in the appraisal process to develop the appraiser’s opinion of value. Supporting documentation concerning the data, reasoning, and analyses has been retained in the appraiser’s work files. The depth of discussion contained in this report was limited based upon the clients specific verbal and written instructions.

EFFECTIVE DATE OF VALUE
The date of value is February 25, 2022, which corresponds to the last date of inspection; all references to property use and description relate to the date of value. 2 The Dictionary of Real Estate Appraisal, 6th Edition, page 306 (2015 by the Appraisal Institute). 15 550

DATE OF REPORT
This report is dated February 28, 2022, which generally corresponds to the completion of the investigations, analysis of relevant data and the completion of this report document.

DESCRIPTION OF SITE
Physical Location: The subject property is located at the southwest corner of S. Highland Avenue and Oleander Avenue, in the city of Fontana, California. A satellite photo utilizing Google Pro is located below.

Fontana was incorporated in 1952. The city is 36 square miles in size and has a sphere of influence of approximately 56 square miles. As a result of the construction of numerous housing tracts in the southern and northern area of the city, by 2010 Fontana’s population more than doubled from about 20 years prior.
16 551
Affordable housing is one of the main sources of Fontana’s overall growth. Because of the high cost of new homes in Los Angeles and Orange County, people began to look elsewhere for their new home purchases. This created a strong demand in the community and Fontana began planning for this boom in 1981. Fontana has eight Specific Planned communities. Each creates a separate environment of parks, recreational facilities, shopping centers, schools, public services and homes. Ten additional Specific Planned residential communities are under development in the North Fontana area.

Altogether, these residential specific plans total over 8,200 acres with over 25,000 residential units.

Four major freeways serve the city. The San Bernardino (10) and Foothill (210) freeways bisect the city in an east-west direction, while the Pomona (60) freeway is near the southern border and the Ontario (15) freeway is at the western boundary. In addition, the (215) freeway is approximately seven miles to the east.
17 552
Physical Address: Not available
Legal Description:

Assessor Parcel Number: Not available
Parcel Size: 1,587 sf per due diligence materials.

Topography: The site is essentially level.

Easements: Based upon inspection of the subject there does not appear to be any easements that would negatively impact the subject property.

Access/Off-Site
Improvements: The subject property has frontage along Oleander Avenue and S.

Highland Avenue. Oleander Avenue is a feeder street with one lane of traffic in each direction. S. Highland Avenue is a main thoroughfare with two lanes of traffic in each direction, plus turn lanes. The subject has frontage along the westerly line of the frontage road which experiences an average daily traffic county of 38,195 vehicle per day, as of 2012. The frontage road contains two traffic lanes traveling in a north-south direction and is fully improved, publically dedicated and maintained right-of-ways.

Zone Use Designation: The site is zoned C2, General Commercial. A variety of commercial uses are permitted including retail and wholesale activities, automobile related sales and services, offices and businesses providing administrative and professional services, medical offices and clinics.

Utility Availability: All the usual and necessary public utilities are available to the subject property and serviced by the normal agencies.

Flood Zone: Flood Zone X, an area determined to be outside the 100- and 500-year floodplains; per Map No. 060274/06071C/7915H dated 8/28/2008. 18 553
Environmental
Observations: The property appears to have no significant archeological, cultural, historical, natural, recreational or scientific value. The property is not affected by the Wetlands Act nor were any endangered species or habitats noted during the inspection. There appear to be no hazardous waste or toxic materials affecting the subject property and to the best of our knowledge, the subject property is not on any Environmental Protection Agency, State, County or Superfund List. It is possible that a tenant has stored some type of hazardous or toxic material on the site or within the building; however, this appraisal is being made under the assumption that no such materials exist. We are not experts in detecting or identifying hazardous substances or material and an expert in this field should be obtained if a more definitive study is desired.

Highest & Best Use: It is our opinion that the highest and best use of the subject site “As if Vacant” is to hold the land for a retail development in conjunction with adjacent land. The subject parcel is too small and has no value as an independent stand-alone parcel.

VALUATION
Land Value: Across-the-Fence Approach:

This method determines market value based on the prices of adjoining land. Many appraisers conclude that the across-the-fence method best accounts for local market conditions by using readily available information to extrapolate value. Across-the-fence methodology (ATF) is an appraisal tool frequently used in valuation assignments where the subject is part of railroad property or a roadway corridor. Appraising excess roadway land is challenging and, over the last 40 years, much has been written about the process. The modern dialogue on the appropriateness of using this methodology dates back to the late 1970s when the Appraisal Journal published an article on the “Valuation of Transportation/Communications Corridors.”
19 554
After making all applicable adjustments, the adjusted values of the comparables range from about $17.76 to $20.59 per square foot, with average and median values of about $19.52 and $19.69 per square foot, respectively. Given the preceding, a value of $19.50 per square foot appears reasonable, as summarized below, as of February 25, 2022, is as following:

Land Valuation
1,587 sf $19.50 psf $30,947
Indicated Fee Simple Value Rounded $31,000
20 555

ADDENDA
556

STANDARD DEFINITIONS
557
The definitions included in this Addenda have been extracted, solely or in combination, from definitions and descriptions printed in:
< The Uniform Standards of Professional Appraisal Practice 2008 Edition (USPAP); < The Dictionary of Real Estate Appraisal, 6th Edition, Appraisal Institute, Chicago, Illinois, 2002 (Dictionary); < The Appraisal of Real Estate, Twelfth Edition, Appraisal Institute, Chicago, Illinois, 2001 (Twelfth Edition); and/or
< Marshall Valuation Service, Marshall & Swift, L. P., Los Angeles, California, 2009 (MVS).

ACCRUED DEPRECIATION
The difference between the reproduction or replacement cost of the improvements on the effective date of the appraisal and the market value of the improvements on the same date. (Dictionary)

APPRAISAL
(noun) The act or process of developing an opinion of value; an opinion of value. (adjective) Of or pertaining to appraising and related functions such as appraisal practice or appraisal services. Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value). (USPAP)

DEFERRED MAINTENANCE
Curable, physical deterioration that should be corrected immediately, although work has not commenced; denotes the need for immediate expenditures, but does not necessarily suggest inadequate maintenance in the past. (Dictionary)

EFFECTIVE DATE OF THE APPRAISAL
The date at which the analyses, opinions, and advice in an appraisal, review, or consulting service apply, which may or may not be the date of inspection; the date of the market conditions that provide the context for the value opinion.

Current appraisals occur when the effective date of the appraisal is contemporaneous with the date of the report.

Prospective value opinions (effective date of the appraisal subsequent to the date of the report) are intended to reflect the current expectations and perceptions along with available factual data. Retrospective value opinions are likely to apply as of a specific historic date; the opinions are intended to reflect the expectations and perceptions of market participants at the specified date, along with available factual data. Data subsequent to the effective date may be considered in estimating a retrospective value as a confirmation of trends. (Dictionary and USPAP)

ENTREPRENEURIAL PROFIT
A market-derived figure that represents the amount an entrepreneur receives for his or her contribution to a project and risk; the difference between the total cost of a property (cost of development) and its market value (property value after completion), which represents the entrepreneur’s compensation for the risk and expertise associated with development. (Dictionary)

ENTREPRENEURIAL INCENTIVE
The term “entrepreneurial incentive” has the same definition as profit, but the perspective of the use of the word “incentive” is forward-looking (expected reward), whereas the use of the word “profit” indicates a retrospective perspective of a quantifiable amount earned. Unless otherwise noted, as used in this report, the terms are synonymous.

The definition is a market-derived figure that represents the amount an entrepreneur expects to receive for his or her contribution to a project and risk. (Dictionary)
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EXPOSURE TIME
The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective estimate based on an analysis of past events assuming a competitive and open market. Exposure time is always presumed to occur prior to the effective date of the appraisal. The overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time but also adequate, sufficient and reasonable effort. Exposure time differs from the marketing period in that exposure time is assumed to precede the effective date of the appraisal. (USPAP and Dictionary)

FEE SIMPLE ESTATE
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (Dictionary)

GROSS BUILDING AREA (GBA)
The total floor area of a building, including below-grade space but excluding unenclosed areas; measured from the exterior of the walls. (Dictionary)

GROSS LEASABLE AREA (GLA)
The total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines, and measured from the center of partitioning to outside wall surfaces; the standard measure for shopping centers. (Dictionary)

HIGHEST AND BEST USE
The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum profitability. (Dictionary)

LEASED FEE ESTATE
An ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the leased fee are specified by contract terms contained within the lease. (Dictionary)

LEASEHOLD ESTATE
The interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions. (Dictionary)

MARKET VALUE
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
• buyer and seller are typically motivated;
• both parties are well informed or well advised, and acting in what they consider their best interests; • a reasonable time is allowed for exposure in the open market; • payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and
• the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (USPAP, according to the Federal Register, CFR 34.42 (g))
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MARKETING PERIOD
A reasonable marketing period is the period of time it might take to sell a property interest in real estate at or near the concluded market value during the period immediately following the effective date of the appraisal. A marketing period is a function of price, time, use, and anticipated market conditions. (Dictionary)

RENTABLE AREA (NRA)
The (net) rentable area is the amount of space on which rent is based; it is calculated according to local practice. (Dictionary)

REPLACEMENT COST
The estimated cost to construct, at current prices as of the effective date of the appraisal, a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout. (Dictionary and USPAP)

REPRODUCTION COST
The estimated cost to construct, at current prices as of the effective date of the appraisal, an exact duplicate or replica of the building being appraised, using the same materials, construction standards, design, layout, and quality of workmanship and embodying all the deficiencies, superadequacies, and obsolescence of the subject building. (Dictionary)

ASSUMPTIONS AND CONDITIONS
Standards Rule 2-1 of the Uniform Standards of Professional Appraisal Practice (USPAP) requires the appraiser to clearly and accurately set forth the appraisal in a manner that will not be misleading; contain sufficient information to enable the intended users of the appraisal to understand the report properly; and clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

General Assumptions and Limiting Conditions
Unless specified otherwise in the text of this report, the following 18 general assumptions and limiting conditions apply.

NO. 1
The appraiser was not provided a current Policy of Title (CLTA or ALTA), which is the best method for the appraiser to determine if any easements or encumbrances exist that could negatively impact the marketability or market value of the subject property. It is recommended that the client obtain a current Policy of Title. The reported value conclusion(s) contained within this report are contingent upon a review of said title policy and the absence of any negative easements and/or encumbrances.

NO. 2
The existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyl, petroleum leakage, or agricultural chemicals, which may or may not be present on the property, was not called to the attention of nor did the appraiser become aware of such during the appraiser’s inspection. The appraiser has no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraiser, however, is not qualified to test for such substances. The presence of such hazardous substances may affect the value of the property. The value opinion developed herein is predicated on the assumption that no such hazardous substances exist on or in the property or in such proximity thereto, which would cause a loss in value. No responsibility is assumed for any such hazardous substances, nor for any expertise or knowledge required to discover them.

NO. 3
The Americans with Disabilities Act (ADA) became effective January 26, 1992. The appraiser has not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect upon the value of the property. Since the appraiser has no direct 560
evidence relating to this issue, possible noncompliance with the requirements of ADA was not considered in developing an opinion of the value of the property.

NO. 4
This report does not address unforeseeable events that could alter the property and/or the market conditions reflected in the analyses, opinions and conclusions.

NO. 5
The value estimate in this appraisal report is gross, without consideration given to any encumbrance, restriction or question of title, unless otherwise specified. We assume no responsibility for matters legal in character, nor do we render any opinions as to title, which is assumed to be good and marketable. All existing liens and encumbrances have been disregarded, and the property is appraised as though free and clear, under responsible ownership and competent management. The legal description is assumed to be correct.

NO. 6
This appraisal report covers only the property described and any values or rates utilized are not to be construed as applicable to any other property, however similar the property might be. The distribution of the total value in this report between land and improvements applies only under the existing or proposed program of utilization. The separate values for land and building must not be used in connection with any other appraisal, and are invalid if so used.

NO. 7
We assume that the utilization of the land is within the boundaries or property lines and that no encroachments or trespasses exist unless specifically noted in the records and data sources utilized. We have made no survey of the property, nor has a survey been provided. All references to dimensions are based on data obtained from the public records or other sources thought reliable, but accuracy cannot be guaranteed.

NO. 8
We were not provided with a certified soil or subsoil analysis of the property. Though no adverse soil conditions were noted upon visual inspection of the property, the discovery of adverse soil conditions is beyond our area of expertise.

We, therefore, assume that there exist no soil or subsoil conditions, which would preclude or adversely affect the development of the site or render it more or less valuable. We assume no responsibility for any such conditions or for the engineering that might be required to discover these factors.

NO. 9
Any maps, sketches, reproductions or photographs included in this report are only for illustration and as an aid in visualizing the property.

NO. 10
This report contains a section including the “Sales History,” which describes the recent title history of the subject property. This should not be construed as a title search or report of title. We render no opinion as to title, which is assumed to be good and marketable.

NO. 11
It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a nonconformity has been stated, defined and considered in the appraisal report. Required licenses, certificates of occupancy, consents or other legislative or administrative authority from any local, state or national government, private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based.

NO. 12
Market data regarding land sales, rents, and improved sales have been abstracted from public records or obtained from other sources. To the extent possible within time and resource constraints, we confirmed or verified recorded data with private sources judged to be informed and reliable. These sources are considered reliable and believed to be accurate.

However, we cannot assume responsibility for accuracy of such data. Following standard professional real estate market analysis procedures, verification with a knowledgeable individual was accepted as confirmation of public record data.

When verification was not possible, the formal, official public record data was accepted as correct. We assume that all buyers, sellers, and other participants in the transactions reported in this report communicated accurate data, were well informed and behaved prudently on the basis of the information available to them at the time of such transactions. 561
NO. 13
We shall not be required to give further consultation or testimony or attend court or be at any governmental hearing with reference to the subject property unless prior arrangements have been made for such employment.

NO. 14
We have not reviewed any environmental impact studies in conjunction with this appraisal assignment; therefore, no responsibility is assumed for any factors that might be disclosed as the result of such studies that could influence the opinions or values set forth in the appraisal report. In the absence of such studies, we hereby reserve the right to review, alter, revise and/or rescind this appraisal or any part thereof, based on the subsequent environmental impact studies.

NO. 15
The descriptions and estimates of the condition of the physical improvements found herein are based on approved building plans. As no engineering tests were conducted, no liability can be assumed for soundness of structural members or any other conditions not readily apparent to the untrained observer.

NO. 16
Disclosure of the contents of this report is governed by the bylaws and regulations of the Appraisal Institute. Neither all nor any part of the contents of the report or copies thereof (including conclusions as to the property value, the identity of the appraiser, professional designations, reference to any professional organizations, or the firm with which the appraiser is connected), shall be used for any purposes by anyone but the client specified in the report, professional appraisal organizations, or any authorized department, agency or instrumentality of the United States, without the previous written consent of the appraiser; nor shall it be conveyed by anyone to the public through advertising, public relations, news, sales, or other media, without written consent and approval of the appraiser.

NO. 17
No determination has been made about the existence of any latent or claimed defection on the property. Such defects include UFFI (Urea Formaldehyde Foam Insulation), asbestos, ground water contamination, radon gas, lead-based paint, soil contamination, toxic or radioactive waste effects, geological or topographic defects, flood hazards or any other unnamed hazards. We assume no responsibility for the presence of such defects on the property.

NO. 18
We assume that acceptance of and/or use of this report constitutes acceptance of the foregoing general assumptions and limiting conditions.

Compliance With Uniform Standards of Professional Appraisal Practice (USPAP).

USPAP includes an Ethics Rule concerning conduct, management, confidentiality and record keeping; a Competency Rule; a Scope of Work Rule; a Jurisdictional Exception Rule; and ten (10) Standards. These Rules and Standards were most recently updated by the Appraisal Standards Board (ASB) of the Appraisal Foundation effective as of January 1, 2008 effective through December 31, 2009.

Standard 1 and Standard 2 governs analysis, production and certification of appraisal reports. Standards Rule 2-2 distinguishes between three different types of appraisals with separate rules for each. (a) Self-Contained Appraisal Report
(b) Summary Appraisal Report
© Restricted Use Appraisal Report
The essence of these rules is reproduced in the following pages as a reference, useful in reading this report. Please refer to ASB of the Appraisal Foundation publications for the full text of the new Rules and Standards. Also refer to the table of contents in this report to identify the sections in response to Standard 1 and Standard 2.

Standard 1: Real Property Appraisal, Development
In developing a real property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible appraisal.

Standards Rule 1-1
In developing a real property appraisal, an appraiser must: (a) be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal; (b) not commit a substantial error 562
of omission or commission that significantly affects an appraisal; and © not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results.

Standards Rule 1-2
In developing a real property appraisal, an appraiser must: (a) identify the client and other intended users; (b) identify the intended use of the appraiser’s opinions and conclusions; © identify the type and definition of value, and, if the value opinion to be developed is market value, ascertain whether the value is to be the most probable price: (I) in terms of cash; or (ii) in terms of financial arrangements equivalent to cash; or (iii) in other precisely defined terms; and (iv) if the opinion of value is to be based on non-market financing or financing with unusual conditions or incentives, the terms of such financing must be clearly identified and the appraiser’s opinion of their contributions to or negative influence on value must be developed by analysis of relevant market data; (d) identify the effective date of the appraiser’s opinions and conclusions; (e) identify the characteristics of the property that are relevant to the type and definition of value and intended use of the appraisal, including: (I) its location and physical, legal, and economic attributes; (ii) the real property interest to be valued; (iii) any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal; (iv) any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, or other items of a similar nature; and (v) whether the subject property is a fractional interest, physical segment, or partial holding; (f) identify any extraordinary assumptions necessary in the assignment; (g) identify any hypothetical conditions necessary in the assignment; (h) determine the scope of work necessary to produce credible assignment results in accordance with the Scope of Work Rule.

Standards Rule 1-3
When necessary for credible assignment results in developing a market value opinion, an appraiser must: (a) identify and analyze the effect on use and value of existing land use regulations, reasonably probably modifications of such land use regulations, economic supply and demand, the physical adaptability of the real estate, and market area trends; and (b) develop an opinion of the highest and best use of the real estate.

Standards Rule 1-4
In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results. (a) When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion. (b) When a cost approach is necessary for credible assignment results, an appraiser must: (I) develop an opinion of site value by an appropriate appraisal method or technique; (ii) analyze such comparable cost data as are available to estimate the cost new of the improvements (if any); and (iii) analyze such comparable data as are available to estimate the difference between the cost new and the present worth of the improvements (accrued depreciation). © When an income capitalization approach is necessary for credible assignment results, an appraiser must: (I) analyze such comparable rental data as are available and/or the potential earnings capacity of the property to estimate the gross income potential of the property; (ii) analyze such comparable operating expense data as are available to estimate the operating expenses of the property; (iii) analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and (iv) base projections of future rent and/or income potential and expenses on reasonably clear and appropriate evidence. (d) When developing an opinion of the value of a leased fee estate or a leasehold estate, an appraiser must analyze the effect on value, if any, of the terms and conditions of the lease(s). (e) When analyzing the assemblage of the various estates or component parts of a property, an appraiser must analyze the effect on value, if any, of the assemblage. An appraiser must refrain from valuing the whole solely by adding together the individual values of the various estates or component parts. (f) When analyzing anticipated public or private improvements, located on or off the site, an appraiser must analyze the effect on value, if any, of such anticipated improvements to the extent they are reflected in market actions. (g) When personal property, trade fixtures, or intangible items are included in the appraisal, the appraiser must analyze the effect on value of such non-real property items.

Standards Rule 1-5
When the value opinion to be developed is market value, an appraiser must, if such information is available to the appraiser in the normal course of business: (a) analyze all agreements of sale, options, and listings of the subject property current as of the effective date of the appraisal; and (b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date of the appraisal.

Standards Rule 1-6
In developing a real property appraisal, an appraiser must: (a) reconcile the quality and quantity of data available and analyzed within the approaches used; and (b) reconcile the applicability or suitability of the approaches used to arrive at the value conclusion(s).
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Standard 2: Real Property Appraisal, Reporting
In reporting the results of a real property appraisal, an appraiser must communicate each analysis, opinion and conclusion in a manner that is not misleading.

Standards Rule 2-1
Each written or oral real property appraisal report must: (a) clearly and accurately set forth the appraisal in a manner that will not be misleading; (b) contain sufficient information to enable the intended users of the appraisal to understand the report properly; and © clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

Standards Rule 2-2
Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used: Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report.
(a) The content of a Self-Contained Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client and any intended users, by name or type; (ii) state the intended use of the appraisal; (iii) describe information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment; (iv) state the real property interest appraised; (v) state the type and definition of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) describe the scope of work used to develop the appraisal; (viii) describe the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, describe the support and rationale for that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3.
(b) The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client and any intended users, by name or type; (ii) state the intended use of the appraisal; (iii) summarize information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment; (iv) state the real property interest appraised; (v) state the type and definition of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) summarize the scope of work used to develop the appraisal; (viii) summarize the information analyzed, the appraisal methods and techniques employed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, summarize the support and rationale for that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3.
© The content of a Restricted Use Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: (I) state the identity of the client, by name or type; and state a prominent use restriction that limits use of the report to the client and warns that the appraiser’s opinions and conclusions set forth in the report may not be understood properly without additional information in the appraiser’s workfile; (ii) state the intended use of the appraisal; (iii) state information sufficient to identify the real estate involved in the appraisal, (iv) state the real property interest appraised; (v) state the type of value and cite the source of the definition; (vi) state the effective date of the appraisal and the date of the report; (vii) state the scope of work used to develop the appraisal; (viii) state the appraisal methods and techniques employed, state the value opinion(s) and conclusion(s) reached, and reference the workfile; exclusion of the sales comparison approach, cost approach, or income capitalization approach must be explained; (ix) state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when an opinion of highest and best use was developed by the appraiser, state that opinion; (x) clearly and conspicuously state all extraordinary assumptions and hypothetical conditions; and state that their use might have affected the assignment results; and (xi) include a signed certification in accordance with Standards Rule 2-3. 564
Standards Rule 2-3
Each written real property appraisal report must contain a signed certification that is similar in content to that which is summarized in this Standards Rule. A similar certification is included on page 3 of this report.

Standards Rule 2-4
To the extent that it is both possible and appropriate, an oral real property appraisal report must address the substantive matters set forth in Standards Rule 2-2(b).
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PROFESSIONAL QUALIFICATIONS
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PROFESSIONAL QUALIFICATIONS

PROFESSIONAL QUALIFICATIONS
EXPERIENCE:
1991-Present SULLIVAN & ASSOCIATES
Sullivan and Associates, founded in 1991 by Mr. Steven P. Sullivan, is an independent appraisal company specializing in the appraisal of all types of low- to high-rise office buildings, single-tenant industrial buildings and multi-tenant industrial parks, cold storage/food processing facilities, retail shopping centers and automotive dealerships. All work is completed by Mr. Sullivan, who has appraised approximately one thousand appraisal assignments on properties totaling billions of dollars.

All appraisals meet current requirements of the Uniform Standards of Professional Appraisal Practice (USPAP), the standards for the Federal Deposit Insurance Corporation (FDIC) and are FIRREA compliant. Mr. Sullivan is licensed/authorized to work on federally related transactions in the states of California, Nevada and Arizona. Fully proficient in most types of real estate cash flow analyses software, including ARGUS, PROJECT, OFFICE 2 and CENTER.

Auto Dealership Appraisal Group - Auto Dealership Appraisal Group was formed by Mr. Sullivan in response to his specialty in the valuation of automotive dealership facilities. Mr. Sullivan, has over twenty years of appraisal experience and in addition to his regular commercial appraisal portfolio he has appraised roughly one hundred dealership facilities in the past two years alone.

Mr. Sullivan is an approved appraiser for all known financial institutions specializing in dealership lending (Comerica, Bank of America, Citibank, US Bank, etc.) as well as all factory credit corporations, including Chrysler, GM, Nissan, Toyota, Mercedes-Benz, BMW, Porsche and VW Credit - to name a few. Mr. Sullivan’s major clients include AutoNation, Sonic Automotive, Van Tuyl, Inc., Group 1 Automotive, Wilson Automotive, Hitchcock Automotive and Keyes Automotive. 1986-1991 GRUBB & ELLIS APPRAISAL / CONSULTATION
Assistant Vice President - completed full narrative appraisals on virtually all types of commercial properties, including hotels, golf courses, office and retail properties. During this time, Mr. Sullivan completed valuation services on some of the largest hotel, resort and office properties in North America. Also responsible for client relations as well as the review and training of junior staff. 1983-1986 LANDAUER ASSOCIATES
Staff Appraiser - primary duties included full narrative appraisals on all types of commercial office, retail and industrial properties located throughout the Western United States. 1983 TARRANTELLO and ASSOCIATES
Staff Appraiser - Employed in Phoenix Arizona office, primary duties included full narrative appraisals on all types of commercial and industrial properties.

EDUCATION:

CALIFORNIA STATE COLLEGE, BAKERSFIELD
Business Administration Major

UNIVERSITY OF CALIFORNIA AT LOS ANGELES (UCLA)
Hotel & Motel Financial Analysis
Hotel/Restaurant Feasibility Studies
Real Estate Law
Restaurant Management & Financial Analysis
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Appraisal Courses
USPAP
Mortgage Fraud
Construction Details & Trends
The Cost Approach
Private Appraisal Assignments
California Law & Regulations
Risky Business Practices: Minimize Liability
Sales Verification: Principles, Procedures & Case Studies Introduction to Expert Witness Testimony
Real Estate Appraisal Principles
Real Estate Appraisal Standards
Advanced Real Estate Appraisal
Income Property Appraisal (AIREA)
Urban Properties (AIREA)
Investment Analysis (AIREA)
Capitalization Theory & Technique Part 1B-A, 1B-B
Real Estate Economics
Real Estate Law
Appraisal Conferences, Seminars and Clinics Attended:

Appraisal of Special Purpose Properties
Appraisal of Vacant Land
Hotel/Motel Valuation Seminar
Apartment Valuation Seminar
Industrial Properties Seminar
Subdivision Seminar
Licensed Real Estate Broker (#01237595): Relate Classes Real Estate Economics
Property Management
Real Estate Finance
Legal Aspects of Real Estate
Office Administration
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Regular City Council Meeting
PARCEL MAP NO. 20283

CITY OF FONTANA, CALIFORNIA
City of Fontana
Department of Engineering, Land Development Section
569

LOCATION
570
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1432 Agenda Date: 6/14/2022
Agenda #: A. Category: Public Hearing
FROM:

Management Services
SUBJECT:

Public Hearing on Formation of Community Facilities District No. 109 (Narra Hills) RECOMMENDATION:

1. Adopt Resolution No. 2022-047 of the City Council of the City of Fontana of formation of the City of Fontana Community Facilities District No. 109 (Narra Hills), authorizing the levy of a special tax within the community facilities district and establishing an appropriations limit for the community facilities district.

2. Adopt Resolution No. 2022-048 of the City Council of the City of Fontana deeming it necessary to incur bonded indebtedness within the City of Fontana Community Facilities District No. 109 (Narra Hills).

3. Adopt Resolution No. 2022-049 of the City Council of the City of Fontana calling special election for City of Fontana Community Facilities District No. 109 (Narra Hills).

4. Adopt Resolution No. 2022-050 of the City Council of the City of Fontana declaring results of special election and directing the recording of notice of special tax lien.

5. Read by title only and waive further reading of and introduce Ordinance No. 1893 levying special taxes within the City of Fontana Community Facilities District No. 109 (Narra Hills); and that the reading of the title constitutes the first reading thereof.

6. Adopt Resolution No. 2022-051 of the City Council of the City of Fontana authorizing the execution and delivery of a Letter of Credit and Funding Agreement.

7. Adopt Resolution No. 2022-052 of the City Council of the City of Fontana authorizing the execution and delivery of Joint Community Facilities Agreements.

COUNCIL GOALS:
· To practice sound fiscal management by developing long-term funding and debt management plans.

DISCUSSION:

Richland Communities, has initiated the process to form a Community Facilities District for the purpose of financing the acquisition of certain public facilities that are eligible under the City financing goals and policies, namely sewer, storm drain, street improvements, landscaping and development impact fees. The formation of the district will benefit the City by funding the infrastructure projects outside of the typical improvements that would be required for the project including a contribution for City of Fontana Printed on 6/8/2022Page 1 of 3
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File #: 21-1432 Agenda Date: 6/14/2022
Agenda #: A. Category: Public Hearing
outside of the typical improvements that would be required for the project including a contribution for a project of community benefit. CFD bond funding will allow for infrastructure to be built at one time reducing construction inconvenience for earlier residents and enhancing the overall community aesthetics.

The project consists of approximately 137.33 gross (73.25 net taxable) acres (489 residential lots), is located on the west side of Citrus Avenue north of Duncan Canyon Road.

On April 12, 2022, the City Council adopted a resolution of intent to establish Community Facilities District No. 109 (Narra Hills) and to incur bonded indebtedness of the district.

The proposed Rate and Method of Apportionment (RMA) includes rates to pay for bonded indebtedness and maintenance of street lighting, landscaping and parks. Initial assigned residential rates are proposed as follows:

Land
Use
Class
Residential Floor Area Bond
Debt
Maint Total
1 Detached - 4,400 sf or Greater $8,186 $744 $8,930
2 Detached - 4,200 sf to less than 4,400 sf $7,879 $744 $8,623 3 Detached - 4,000 sf to less than 4,200 sf $7,736 $744 $8,480 4 Detached - 3,800 sf to less than 4,000 sf $7,592 $744 $8,336 5 Detached - 3,600 sf to less than 3,800 sf $7,238 $744 $7,982 6 Detached - 3,400 sf to less than 3,600 sf $6,905 $744 $7,649 7 Detached - 3,200 sf to less than 3,400 sf $6,551 $744 $7,295 8 Detached - 3,000 sf to less than 3,200 sf $6,240 $744 $6,984 9 Detached - 2,800 sf to less than 3,000 sf $6,103 $744 $6,847 10 Detached - 2,600 sf to less than 2,800 sf $5,873 $744 $6,617 11 Detached - 2,400 sf to less than 2,600 sf $5,666 $744 $6,410 12 Detached - 2,200 sf to less than 2,400 sf $5,349 $744 $6,093 13 Detached - 2,000 sf to less than 2,200 sf $5,118 $744 $5,862 14 Detached - Less than 2,000 sf $4,876 $744 $5,620
15 Attached - 2,000 sf or Greater $4,074 $718 $4,792
16 Attached - 1,800 sf to less than 2,000 sf $4,025 $718 $4,743 17 Attached - 1,600 sf to less than 1,800 sf $3,762 $718 $4,480 18 Attached - 1,400 sf to less than 1,600 sf $3,627 $718 $4,345 19 Attached - 1,200 sf to less than 1,400 sf $3,445 $718 $4,163 20 Attached - Less than 1,200 sf $3,320 $718 $4,038
Sales prices for the homes have been estimated at $462,000 to $1,020,000. The proposed rates have been established to provide a total tax rate of less than 1.95% of the home value per City Policy.

The proposed rates for bonded indebtedness will support $36.2 million of bonds, providing funds to City of Fontana Printed on 6/8/2022Page 2 of 3
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File #: 21-1432 Agenda Date: 6/14/2022
Agenda #: A. Category: Public Hearing
The proposed rates for bonded indebtedness will support $36.2 million of bonds, providing funds to finance $31.0 million of facilities and/or fees. The proposed annual rates for maintenance of $744 for detached units and $718 for attached units will be sufficient to fund the annual maintenance costs for street lighting, landscaping and parks within and surrounding the area of the CFD. The rate also includes the maintenance costs related to the water quality system required by the State of California. The maximum annual tax rates for maintenance have been set at $1,040 for detached units and $1,005 for attached units with a 2% escalator per City Policy.

This action will form the District, authorize the levy of the special tax and authorize bonded indebtedness. The recommended action complies with the City Council’s debt management objectives.

FISCAL IMPACT:

This District will provide annual funding for maintenance costs, administration and debt service costs once bonds are issued.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 6/8/2022Page 3 of 3
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RESOLUTION NO. 2022-047

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF FONTANA OF FORMATION OF THE CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS ), AUTHORIZING THE LEVY OF A

SPECIAL TAX WITHIN THE COMMUNITY FACILITIES

DISTRICT AND ESTABLISHING AN APPROPRIATIO NS

LIMIT FOR THE COMMUNITY FACILITIES DISTRICT
WHEREAS, on April 12, 2022 , the City Council (the “City Council”) of the City of Fontana (the “City”), pursuant to the Mello -Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Fontana of Intention to Establish a Community Facilities District Proposed to be Named City of Fontana Community Facilities District No. 109 (Narra Hills ), and to Authorize the Levy of Special Taxes” (the “Resolution of Intention”), stating its intention to establish a community facilities district (the “Community Facilities District”) proposed to be named City of Fontana Community Facilities District No. 109 (Narra Hills ), to authorize the levy of a special tax within the Community Facilities District to finance certain public facilities and services and setting the date for a public hearing to be held on the establishment of the Community Facilities District; WHEREAS, pursuant to the Resolution of Intention, n otice of said public hearing was published in the Fontana Herald News, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing;
WHEREAS, pursuant to the Resolution of Intention, each officer of the City who is or will be responsible for providing one or more of the proposed types of public facilities or services was directed to study, or cause to be st udied, the proposed Community Facilities District and, at or before said public hearing, file a report with the City Council containing a brief description of the public facilities and services by type that will in his or her opinion be required to adequat ely meet the needs of the Community Facilities District, and his or her estimate of the cost of providing such public facilities and services; such officers were also directed to estimate the fair and reasonable cost of the public facilities proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid;
WHEREAS, said report was so filed with the City Council and made a part of the record of said public hearing;
WHEREAS, at the hearing, the testimony of all person s for or against the establishment of the Community Facilities District, the extent of the Community Facilities District and the furnishing of the specified types of public facilities and services was heard; WHEREAS, written protests against the establishm ent of the Community Facilities District, the furnishing of any specified type or types of facilities and services within the 574

2 4140-0033-1317.2

Community Facilities District or the levying of any specified special tax were not made or filed at or before said hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax; WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the proposed Community Facilities District for each of the 90 days preceding the close of said public hearing; WHEREAS, Section 53314.9 of the Act pr ovides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district; WHEREAS, Section 53314.9 of the Act further provides that the legislativ e body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53521 of the Act and in the resolution of formation to establish a community facilities district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; WHEREAS, the City and LS-FONTANA LLC , a Delaware limited liability company (“LS-FONTANA”), entered into a Deposit and Reimbursement Agreement, dated as of February 1, 2022 (the “Deposit Agreement”), that provides for the advancement of funds by LS- FONTANA to be used to pay costs incurred in connec tion with the establishment of the Community Facilities District and the issuance of special tax bonds thereby, and provides f or the reimbursement to LS-FONTANA of such funds advanced, without interest, from the proceeds of any such bonds issued by the Community Facilities District; and WHEREAS, in accordance with Section 53314.9 of the Act, the City desires to accept such advances and to reimburse LS-FONTANA therefor, without interest, from the proceeds of special tax bonds issued by the Community Facilities District; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The Community Facilities District is hereby established pursuant to the Act. 575

3 4140-0033-1317.2

Section 3. The Community Facilities District is hereby named “City of Fontana Community Facilities District No. 109 (Narra Hills).”
Section 4. The public facilities (the “Facilities”) proposed to be financed by the Community Facilities District pursuant to the Act are describ ed under the caption “Facilities” on Exhibit A hereto, which is by this reference incorporated herein. Those Facilities proposed to be purchased as completed public facilities are described under the caption “Facilities to be Purchased” on Exhibit A hereto . The services (the “Services”) proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Services” on Exhibit A hereto. The incidental expenses proposed to be incurred are described under the caption “Incidental Expenses” on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including, but not limited to, a lease, lease -purchase or installment - purchase arrangement.

Section 5. The proposed special tax to be levied within the Community Facilities District has not been precluded by majority protest pursuant to Section 53324 of the Act.

Section 6. Except where funds are otherwise available, a special tax (the “Special Tax”) sufficient to pay for all Facilities and Services, secured by recordation of a continuing lien against all nonexempt real property in the Community Facilities District, will be annually levied within the Community Facilities District. The rate and method of apportionment of the Special Tax (the “Rate and Method”), in sufficient detail to allow each landowner within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is described in Exhibit B attached hereto, which is by this reference incorporated herein. T he conditions under which the obligation to pay the Special Tax to pay for Facilities may be prepaid and permanently satisfied are specified in the Rate and Method. The Special Tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners.

Section 7. The tax year after which no further Special Tax to pay for Facilities will be levied against any parcel used for private residential purposes is specified in the Rate and Method.

Under no circumstances shall the Special Tax to pay for Facilities in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults . For purposes of this paragraph, a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued.

Section 8. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 53344.1 and to those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the Community Facilities District treasurer in full payment or part payment of any installment of the Special Tax or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other 576

4 4140-0033-1317.2

obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender.

Section 9. The name, address and telephone number of the office that will be responsible for preparing annually a current roll of Special Tax levy obligations by assessor’s parcel number and that will be responsible for estimating further Special Tax levies pursuant to Section 53340.2 of the Act are as follows: Chief Financial Officer, Management Services, City of Fontana, 8353 Sierra Avenue, Fontana, California 92335, (909) 350-7679.

Section 10. Upon recordation of a notice of Special Tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall attach to all nonexempt real property in the Community Facilities District and this lien shall continue in force and effect until the Special Tax obligation is prepaid and permanen tly satisfied and the lien canceled in accordance with law or until collection of the tax by the City Council ceases.

Section 11. The boundary map of the Community Facilities District has been recorded in San Bernardino County in Book 90 at Page 20 of Maps of Assessments and Community Facilities Districts in the San Bernardino County Recorder’s Office (Document No. 2022-0148613).

Section 12. The annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, of the Co mmunity Facilities District is hereby established at $50,000,000.

Section 13. Pursuant to the provisions of the Act, the levy of the Special Tax and a proposition to establish the appropriations limit specified above shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing held by the City Council on the establishment of the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax. The voting procedure shall be by mailed or hand-delivered ballot.

Section 14. LS-FONTANA has heretofore advanced certain funds, and may advance additional funds, which have been or may be used to pay costs incurred in connection with the creation of the Community Facilities District and the issuance of special tax bonds thereby. The City Council has previously approved the acceptance of such funds for the purpose of paying costs incurred in connection with the creation of the Community Facilities District and the issuance of special tax bonds thereby. The City Council proposes to repay all or a portion of such funds expended for such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement. The Deposit Agreement is hereby incorporated herein as though set forth in full herein. 577

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Section 15. The City Council hereby finds and determi nes that all proceedings up to and including the adoption of this Resolution were valid and in conformity with the requirements of the Act. In accordance with Section 53325.1 of the Act, such finding shall be final and conclusive.

Section 16. All actions heretofore taken by the officers, employees and agents of the City with respect to the establishment of the Community Facilities District, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 17. The of ficers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provis ions hereof.

Section 18. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

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A-1
4140-0033-1317.2

EXHIBIT A

FACILITIES, SERVICES AND INCIDENTAL EXPENSES
Facilities
The types of facilities to be financed by the Community Facilities District are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, sewers, storm drains, fire protection facilities, police facilities, public facilities, landscaping, library facilities, park and recreational facilities, flood control facilities consisting of the relocation and construction of the Hawker Crawford flood control channel, w ater distribution, treatment and storage facilities and land , rights-of-way and easements necessary for any of such facilities.

Facilities to be Purchased
The types of facilities to be purchased as completed facilities are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, sewers, storm drains, fire protection facilities, police facilities, public facilities, landscaping, library facilities, park and recreational facilities, flood control facilities consisting of the relocation and construction of the Hawker Crawford flood control channel, water distribution, treatment and storage facilities and land, rights-of-way and easements necessary for any of such facilities.

Services
The types of services to be financed by the Community Facilities District are fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City.

Incidental Expenses
The incidental expenses proposed to be incurred include the following:
(a) the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; (b) the costs associated with the creation of the Community Facilities District, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and
(c) any other expenses incidental to the construction, completion, and inspection of the authorized work.

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4140-0033-1317.2

EXHIBIT B

PROPOSED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX 580

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 1

RATE AND METHOD OF APPORTIONMENT FOR
CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Fontana Community Facilities District No . 109 (Narra Hills) ("CFD No. 109") and collected each Fiscal Year, in an amount determined by the City Council of the City of Fontana, through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 109, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

"Acre" or "Acreage" means the land area expressed in acres of an Asses sor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County map or the land area calculated to the reaso nable satisfaction of the CFD Administrator using the boundaries set forth on such map or plan. For residential dwelling units within a condominium plan, the Acres applicable to each resi dential dwelling unit shall be determined by dividing (i) the Acres of the underlying lot or par cel on which the residential dwelling unit is constructed or to be constructed, by (ii) the total number of residential dwelling units constructed or to be constructed on such lot or parcel. The sq uare footage of an Assessor’s Parcel is equal to the Acreage of such parcel multiplied by 43,560.

"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 (commencing with Sect ion 53311) of the California Government Code.

"Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 109, inclu ding but not limited to: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the costs of remitting the Sp ecial Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discha rge of the duties required of it under the Indenture; the costs to the City, CFD No. 109 or an y designee thereof of complying with arbitrage rebate requirements with respect to the S pecial Tax and CFD No. 109 Bonds; the costs to the City, CFD No. 109 or any designee thereof of complying with disclosure requirements of the City, CFD No. 109 or obligated persons associat ed with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Sp ecial Taxes; the costs of the City, CFD No. 109, or any designee thereof related to the reducti on of the Assigned Facilities Special Tax and Backup Facilities Special Tax in accordance with Se ction C.1 herein; the costs of the City, CFD No. 109 or any designee thereof related to an appea l of the Special Tax; and the City’s annual administration fees and third party expenses relate d to CFD No. 109 Bonds. Administrative Expenses shall also include amounts estimated or ad vanced by the City or CFD No. 109 for any other administrative purposes of CFD No. 109, inclu ding attorney’s fees and other costs related to commencing and pursuing to completion any forecl osure of delinquent Special Taxes.

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Community Facilities District No. 109 (Narra Hills) Page 2 "Assessor" means the Assessor of the County.

"Assessor's Parcel" means a lot or parcel to which an Assessor’s parce l number is assigned as determined from an Assessor’s Parcel Map or the applicable assessment roll.

"Assessor's Parcel Map" means an official map of the Assessor designating parcels by Assessor’s Parcel number.

"Assigned Facilities Special Tax" means the Facilities Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.(2) below.

"Assigned Services Special Tax" means the Services Special Tax, determined in acco rdance with Section C.2.b herein, that can be levied in an y Fiscal Year on any Assessor’s Parcel of Developed Property.

"Attached Residential Property" means Assessor’s Parcels of Developed Property for which building permits have been issued for a residential dwelling unit that shares, or will share, an inside wall with another residential dwelling unit.

"Authorized Facilities" means those facilities eligible to be funded by CFD No. 109.

"Authorized Services" means those services eligible to be funded by CFD No. 109 in accordance with the Act, including, but not limited to, fire protection and suppression services, maintenance and lighting of parks, parkways, street s, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City.

"Backup Facilities Special Tax" means the Facilities Special Tax applicable to eac h Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.a.(3) below.

"Buildout" means, for CFD No. 109, that all expected building permits for residential dwelling units and/or non-residential development to be cons tructed within CFD No. 109 have been issued, as determined by the CFD Administrator.

"CFD Administrator" means an official of the City, or designee thereof , responsible for determining the Special Tax Requirement for Facilit ies and the Special Tax Requirement for Services, providing for the levy and collection of the Special Taxes, and performing other duties as set forth herein.

"CFD No. 109" means City of Fontana Community Facilities District No. 109 (Narra Hills).

"CFD No. 109 Bonds" means any bonds or other debt (as defined in Secti on 53317(d) of the Act), whether in one or more series, issued by CFD No. 109 and secured by the Facilities Special Tax levy on property within the boundaries of CFD No. 109 under the Act.

"City" means the City of Fontana, California.

"Contractual Impositions" means (a) a voluntary contractual assessment established and levied on an Assessor’s Parcel pursuant to Chapter 29 of P art 3 of Division 7 of the California Streets and Highways Code (commencing with Section 5898.10 et seq. ), as amended from time to time, 582

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 3 (b) a special tax established and levied on an Asse ssor’s Parcel pursuant to Section 53328.1 of the California Government Code and related provisio ns of the Act, as amended from time to time, and (c) any other fee, charge, tax or assessm ent established and levied on an individual Assessor’s Parcel pursuant to a contractual agreeme nt or other voluntary consent by the owner thereof.

"Council" means the City Council of the City acting as the legislative body of CFD No. 109.

"County" means the County of San Bernardino.

"Detached Residential Property" means Assessor’s Parcels of Developed Property for which building permits have been issued for a residential dwelling unit that is or is expected to be surrounded by freestanding walls and that does not share an inside wall with any other residential dwelling unit.

"Developed Property" means, for each Fiscal Year, (i) with respect to t he Facilities Special Tax, all Taxable Property, exclusive of Taxable Pub lic Property and Taxable Property Owner Association Property, for which a building permit f or new construction, other than the construction of a garage, parking lot, or parking s tructure, was issued after January 1, 2022 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Facilities Special Taxes are being levied, and (ii) with respect to th e Services Special Tax, all Taxable Property, exclusive of Taxable Public Property and Taxable Pr operty Owner Association Property, (a) for which the Final Residential Subdivision was recorde d prior to the Fiscal Year for which the Services Special Taxes are being levied, or (b) for which a building permit has been issued with respect to Non-Residential Property on or before Ma y 1 of the Fiscal Year preceding the Fiscal Year for which the Services Special Taxes are being levied.

"Facilities Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within CFD No . 109 to fund the Special Tax Requirement for Facilities, as set forth in Section C.1 herein.

"Final Residential Subdivision" means a Final Subdivision that creates individual l ots for which building permits may be issued for residentia l dwelling units without further subdivision of such property.

"Final Subdivision" means (i) a subdivision of property by recordation of a final map, parcel map, or lot line adjustment approved by the City pu rsuant to the Subdivision Map Act (California Government Code Section 66410 et seq. ) that creates individual lots or parcels for which building permits may be issued, or (ii) for c ondominiums, a final map approved by the City and a condominium plan recorded pursuant to Ca lifornia Civil Code Section 4285 that creates an individual lot(s) for which a building p ermit(s) may be issued without further subdivision. The term "Final Subdivision" shall no t include any Assessor’s Parcel Map or subdivision map or portion thereof that does not cr eate individual lots for which a building permit may be issued, including Assessor’s Parcels that are designated as remainder parcels.

Notwithstanding the above, a condominium plan for w hich one or more building permits have been issued, but no individual lots have been creat ed for such building permits, shall be considered a Final Subdivision, and the portion of the condominium plan for which building permits have been issued shall be defined as Developed Property.

"Fiscal Year" means the period starting July 1 and ending on the following June 30. 583

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 4 "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which CFD No. 109 Bonds are issued, as modified, amended and/or supplemented from time to time.

"Land Use Class" means any of the classes listed in Table 1, Table 4, or Table 5 herein.

"Lower Income Households Welfare Exemption Property " means, for each Fiscal Year, an Assessor’s Parcel within the boundaries of CFD No. 109 that is entitled to a welfare exemption under subdivision (g) of Section 214 of the Califor nia Revenue and Taxation Code (or any successor statute), as indicated in the County’s as sessment roll finalized as of the last preceding January 1.

"Maximum Facilities Special Tax" means the maximum Facilities Special Tax, determin ed in accordance with Section C.1 herein, that can be lev ied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.

"Maximum Services Special Tax" means the maximum Services Special Tax, determined in accordance with Section C.2 herein, that can be lev ied in any Fiscal Year on any Assessor’s Parcel of Developed Property.

"Minimum Sale Price" means the minimum price at which parcels of a give n Land Use Class have sold or are expected to be sold in a normal ma rketing environment and shall not include prices for such parcels that are sold at a discount to expected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class.

"Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City perm itting the construction of one or more non- residential structures or facilities.

"Outstanding Bonds" means all CFD No. 109 Bonds which are outstanding under the Indenture.

"Planning Area" means an area designated with the letters "P.A." as shown on Exhibit B.

"Price Point Consultant" means any consultant or firm of such consultants s elected by CFD No. 109 that (a) has substantial experience in perf orming price point studies for residential dwelling units within community facilities districts or otherwise estimating or confirming pricing for residential dwelling units in community facilit ies districts, (b) has recognized expertise in analyzing economic and real estate data that relate s to the pricing of residential dwelling units in community facilities districts, (c) is in fact inde pendent and not under the control of CFD No. 109 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 109, (ii) the City, (iii) any owner of real pro perty in CFD No. 109, or (iv) any real property in CFD No. 109, and (e) is not connected with CFD N o. 109 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 109 or the City.

"Price Point Study" means a price point study or a letter updating a p revious price point study prepared by the Price Point Consultant pursuant to Section C herein.

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Community Facilities District No. 109 (Narra Hills) Page 5 "Property Owner Association Property" means, for each Fiscal Year, (i) any property with in the boundaries of CFD No. 109 for which the owner o f record, as determined from the County’s assessment roll for the Fiscal Year in which the Sp ecial Tax is being levied, is a property owner’s association, including any master or sub-as sociation, or (ii) any property located in a Final Subdivision that was recorded as of the Janua ry 1 preceding the Fiscal Year in which the Special Tax is being levied and which, as determine d from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street. Notwithstanding the foregoing, any property previously classified as De veloped Property and subsequently owned in fee or by easement, or dedicated to, a property own er association, including any master or sub- association, shall remain classified as Developed Property.

"Proportionately" means that the ratio of the actual Facilities Speci al Tax levy to the Assigned Facilities Special Tax is equal for all Assessor’s Parcels of Developed Property, and that the ratio of the actual Services Special Tax levy to the Assi gned Services Special Tax is equal for all Assessor’s Parcels of Developed Property. For Unde veloped Property, "Proportionately" means that the ratio of the actual Facilities Special Tax levy per Acre to the Maximum Facilities Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property. The term "Proportionately" shall similarly be applied to oth er categories of Taxable Property as listed in Section D herein.

"Public Property" means, for each Fiscal Year, any property within t he boundaries of CFD No. 109 that is (i) owned by, irrevocably offered or de dicated to the federal government, the State, the County, the City, or any local government or ot her public agency, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified ac cording to its use; or (ii) encumbered by a public utility easement making impractical its use for any purpose other than that set forth in the easement.

"Rate and Method of Apportionment" means this Rate and Method of Apportionment for CFD No. 109.

"Residential Floor Area" means all of the square footage of living area wit hin the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area for an Assessor’s Parcel shall be as set forth in the building permit(s) issued fo r such Assessor’s Parcel and/or as set forth in the appropriate records kept by the Building and Sa fety Department of the City, or other applicable City department, as determined by the CFD Administrator.

"Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City permitting the construction thereon of one or more residential dwelling units.

"Services Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Developed Property within CFD No. 109 to fund the Special Tax Requirement for Services, as set forth in Section C.2 herein.

"Special Tax" means the Facilities Special Tax and/or Services Special Tax, as applicable.

"Special Tax Requirement for Facilities" means, for any Fiscal Year, that amount required, after taking into account available amounts held in the funds and accounts under the Indenture, 585

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 6 for the following items: (i) debt service on all Ou tstanding Bonds due in the calendar year commencing in such Fiscal Year; (ii) periodic costs with respect to the CFD No. 109 Bonds, including but not limited to, costs of credit enhan cement and federal rebate payments due in the calendar year commencing in such Fiscal Year; (iii) pay all or a portion of Administrative Expenses; (iv) any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) without duplicating any amou nts described in clause (iv), above, reasonably anticipated Facilities Special Tax delin quencies based on the delinquency rate for the Facilities Special Tax in the previous Fiscal Year, as said levy for delinquencies shall be limited by the Act; and (vi) pay directly for the acquisiti on or construction of Authorized Facilities, provided that the inclusion of such amount does not increase the Facilities Special Tax levy beyond the first step in Section D.1 herein.

"Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 109 to (i) pay directly for the Authorized Services; (ii) pay Administrative Expenses not funded through the Special Tax Requirement for Facilities as determined by the CFD Administrator; (iii) pay for reasonably anticipated Services Special Tax delinquencies based on the delinquency rate for the Services Special Tax l evy in the previous Fiscal Year; less (iv) a credit for funds available to reduce the annual Ser vices Special Tax levy, as determined by the CFD Administrator, so long as the amount required is not less than zero.

"State" means the State of California.

"Taxable Property" means all of the Assessor's Parcels within the bou ndaries of CFD No. 109 which are not exempt from the Special Tax pursuant to applicable law or Section E herein.

"Taxable Property Owner Association Property" means all Assessor’s Parcels of Property Owner Association Property that are not exempt pursuant to Section E herein.

"Taxable Public Property" means all Assessor’s Parcels of Public Property th at are not exempt pursuant to Section E herein.

"Total Tax Burden" means, for a parcel of residential property within a Land Use Class, for the Fiscal Year in which Total Tax Burden is being calc ulated, the sum of (a) the Assigned Facilities Special Tax for such Fiscal Year, plus (b) the Assi gned Services Special Tax for such Fiscal Year, plus (c) the ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental fees, charges (other than fees or charges for services such as sewer and tras h), taxes and assessments (which, for purposes of clarity, do not include Contractual Impositions) collected by the County on ad valorem tax bills and that the CFD Administrator estimates woul d be levied or imposed on such residential property in such Fiscal Year if the residential dwe lling unit thereon or therein had been completed and sold, and was subject to such fees, c harges, taxes and assessments in such Fiscal Year.

"Trustee" means the trustee or fiscal agent under the Indenture.

"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Public Property or Taxable Property Owner Association Property.

Please refer to additional definitions in Section H herein relating to the Prepayment of Facilities Special Tax.
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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 7 B. ASSIGNMENT TO LAND USE CATEGORIES

Each Fiscal Year, commencing with Fiscal Year 2022- 2023, all Taxable Property within CFD No. 109 shall be classified as Developed Property, Undeveloped Property, Taxable Public Property or Taxable Property Owner Association Prop erty, and shall be subject to Special Taxes in accordance with this Rate and Method of Apportio nment determined pursuant to Sections C and D herein.

C. MAXIMUM SPECIAL TAX RATE

1. Facilities Special Tax

At least 30 days prior to the issuance of the first series of CFD No. 109 Bonds, the Assigned Facilities Special Tax on Developed Property (set f orth in Table 1) shall be analyzed in accordance with and subject to the conditions set f orth in this Section C. At such time, the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of residential property with in each Land Use Class. If based upon such Price Point Study the CFD Administrator calculates that the Total Tax Burden applicable to one or more Land Use Classes of residential property co nstructed or to be constructed within CFD No. 109 shall exceed 1.95% of the Minimum Sale Pric e of such residential property constructed or to be constructed within CFD No. 109, the CFD Ad ministrator shall reduce the Assigned Facilities Special Tax to the extent necessary to c ause the Total Tax Burden that shall apply to residential property within such Land Use Class(es) to not exceed 1.95% of the Minimum Sale Price of such residential property. Each Assigned Facilities Special Tax reduction for a Land Use Class shall be calculated separately, and it sh all not be required that such reduction be proportionate among Land Use Classes. In connectio n with any reduction in the Assigned Facilities Special Tax, the CFD Administrator shall also reduce the Backup Facilities Special Tax in accordance with Section C.1.a.(3) herein. U pon determining the reductions, if any, in the Assigned Facilities Special Tax and Backup Faciliti es Special Tax required pursuant to this Section C, the CFD Administrator shall complete the Certificate to Amend Facilities Special Tax substantially in the form attached hereto as Ex hibit A (the “Certificate to Amend”) and shall execute such completed Certificate to Amend a nd shall deliver such Certificate to Amend to CFD No. 109. Upon receipt thereof, if in satisfa ctory form, CFD No. 109 shall execute such Certificate to Amend. The reduced Assigned Faciliti es Special Tax and Backup Facilities Special Tax specified in such Certificate to Amend shall become effective upon the execution of such Certificate to Amend by CFD No. 109. The Assi gned Facilities Special Tax and Backup Facilities Special Tax reductions permitted pursuan t to this Section C shall be reflected in an amended notice of Special Tax lien which CFD No. 10 9 shall cause to be recorded with the San Bernardino County Recorder as soon as practicable a fter execution of the Certificate to Amend by CFD No. 109. If based upon such Price Point Stu dy the CFD Administrator calculates that the Total Tax Burden applicable to each Land Use Cl ass of residential property constructed or to be constructed within CFD No. 109 does not exceed 1 .95% of the Minimum Sale Price of each such Land Use Class of residential property constru cted or to be constructed within CFD No. 109, then there shall be no reduction in the Assign ed Facilities Special Tax, nor shall there be a reduction in the Backup Facilities Special Tax.

a. Developed Property

(1). Maximum Facilities Special Tax

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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 8 The Maximum Facilities Special Tax for each Assesso r's Parcel classified as Developed Property shall be the greater of (i) the amount der ived by application of the Assigned Facilities Special Tax or (ii) the amount derived b y application of the Backup Facilities Special Tax.

(2). Assigned Facilities Special Tax

Residential Property shall be assigned to Land Use Classes 1 through 20 as listed in Table 1 below based on the type of use and the Resi dential Floor Area for each residential dwelling unit. Non-Residential Propert y shall be assigned to Land Use Class

21. The Assigned Facilities Special Tax that shall be levied in any Fiscal Year for each Land Use Class is shown below in Table 1.

Table 1

Assigned Facilities Special Tax for Developed Property
City of Fontana CFD No. 109 (Narra Hills)

Land
Use
Class Description
Residential Floor
Area (square feet)
Assigned
Facilities
Special Tax
1 Detached Residential Property 4,400 or greater $8 ,186 per unit 2 Detached Residential Property 4,200 to less than 4,400 $7,879 per unit 3 Detached Residential Property 4,000 to less than 4,200 $7,736 per unit 4 Detached Residential Property 3,800 to less than 4,000 $7,592 per unit 5 Detached Residential Property 3,600 to less than 3,800 $7,238 per unit 6 Detached Residential Property 3,400 to less than 3,600 $6,905 per unit 7 Detached Residential Property 3,200 to less than 3,400 $6,551 per unit 8 Detached Residential Property 3,000 to less than 3,200 $6,240 per unit 9 Detached Residential Property 2,800 to less than 3,000 $6,103 per unit 10 Detached Residential Property 2,600 to less than 2,800 $5,873 per unit 11 Detached Residential Property 2,400 to less than 2,600 $5,666 per unit 12 Detached Residential Property 2,200 to less than 2,400 $5,349 per unit 13 Detached Residential Property 2,000 to less than 2,200 $5,118 per unit 14 Detached Residential Property Less than 2,000 $4 ,876 per unit 15 Attached Residential Property 2,000 or greater $ 4,074 per unit 16 Attached Residential Property 1,800 to less than 2,000 $4,025 per unit 17 Attached Residential Property 1,600 to less than 1,800 $3,762 per unit 18 Attached Residential Property 1,400 to less than 1,600 $3,627 per unit 19 Attached Residential Property 1,200 to less than 1,400 $3,445 per unit 20 Attached Residential Property Less than 1,200 $3,320 per unit 21 Non-Residential Property NA $36,640 per Acre

(3). Backup Facilities Special Tax

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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 9 The Backup Facilities Special Tax for an Assessor’s Parcel of Developed Property within a Planning Area shall equal the lesser of (a) the B ackup Facilities Special Tax applicable for such Planning Area set forth in Table 2 below, or (b) in connection with any reduction in the Assigned Facilities Special Tax as set forth in Section C.1 herein, the amount per Acre calculated for each Planning Area pursuant to the formula below:

BFST = AFST  ATP

These terms have the following meaning:

BFST = the reduced Backup Facilities Special Tax fo r Developed Property within a Planning Area

AFST = The total estimated Assigned Facilities Spec ial Tax levy within such Planning Area based on the reduced Assigned Facilit ies Special Taxes for Developed Property permitted pursuant to Section C. 1 herein which could be levied on all expected development within such Plan ning Area assuming Buildout of CFD No. 109.

ATP = The sum of the Acreage of all Taxable Property within a Final Subdivision (assuming Buildout of CFD No. 109) within such Plan ning Area (after excluding Public Property and Property Owner Association Prop erty as set forth in Section E.1 herein) multiplied by 85%.

Table 2

Backup Facilities Special Tax for Developed Property
City of Fontana CFD No. 109 (Narra Hills)

Planning
Area
Backup
Facilities
Special Tax
P.A. 1 $28,860 per Acre
P.A. 2 $52,010 per Acre
P.A. 3 $70,530 per Acre
P.A. 4 $69,890 per Acre

Furthermore, all Assessors’ Parcels within CFD No. 109 shall be relieved simultaneously and permanently from the obligation to pay and disc lose the Backup Facilities Special Tax if the CFD Administrator calculates that (i) th e annual debt service required for the Outstanding Bonds, when compared to the Assigned Fa cilities Special Tax that shall be levied against all Assessors’ Parcels of Developed Property in CFD No. 109 results in 110% debt service coverage (i.e., the Assigned Faci lities Special Tax that shall be levied against all Developed Property in CFD No. 109 in ea ch remaining Fiscal Year based on the then existing development is at least equal to the sum of (a) 1.10 times the debt service necessary to support the remaining Outstand ing Bonds in each corresponding Fiscal Year, and (b) Administrative Expenses), and (ii) all authorized CFD No. 109 Bonds have already been issued or the Council has c ovenanted that it shall not issue any additional CFD No. 109 Bonds (except refunding bond s) to be supported by the Facilities Special Tax in CFD No. 109.

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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 10 (4). Multiple Land Uses

In some instances an Assessor’s Parcel may contain both Developed Property and Undeveloped Property. In such cases, the Acreage o f the Assessor’s Parcel shall be allocated between Developed Property and Undeveloped Property based on the portion of the Assessor’s Parcel for which building permits ha d been issued prior to May 1 of the prior Fiscal Year and the portion of the Assessor’s Parcel for which building permits had not been issued prior to May 1 of the prior Fiscal Year.

Furthermore, Developed Property may contain more th an one Land Use Class. In such cases, the Acreage that is considered Developed Pro perty shall be allocated between Residential Property and Non-Residential Property b ased on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum Facilities Special Tax that can be levied on such Assessor’s Parcel shall be the sum of the Maximum F acilities Special Tax that can be levied on each type of property located on that Assessor’s Parcel.

The CFD Administrator’s allocation to each type of property shall be final.

b. Undeveloped Property, Taxable Public Property, a nd Taxable Property Owner Association Property

The Maximum Facilities Special Tax for each Assesso r’s Parcel of Undeveloped Property, Taxable Public Property, and Taxable Prop erty Owner Association Property within a Planning Area shall be the applicable amou nt for such Planning Area set forth in Table 3 below. The Maximum Facilities Special Tax for Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall not be subject to escalation and shall therefore remain the same in every Fiscal Year.

Table 3

Maximum Facilities Special Tax for Undeveloped Property, Taxable Public Property and Taxable Property Owner Association Property City of Fontana CFD No. 109 (Narra Hills)

Planning
Area
Maximum
Facilities
Special Tax
P.A. 1 $28,860 per Acre
P.A. 2 $52,010 per Acre
P.A. 3 $70,530 per Acre
P.A. 4 $69,890 per Acre

2. Services Special Tax

For purposes of the Services Special Tax, an Assess or(s) Parcel of Developed Property within a Final Residential Subdivision shall be assigned to Land Use Classes 1 through 4, as identified in Table 4 and Table 5 below, based on the Planning Ar ea associated with such Assessor’s Parcel.

Non-Residential Property shall be assigned to Land Use Class 5. Furthermore, the Services Special Tax levied against each Assessor’s Parcel w ithin a Final Residential Subdivision shall be 590

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 11 based on the number of residential dwelling units f or which building permits have been issued or are expected to be issued for such Assessor’s Parce l, as determined by the CFD Administrator based on such Final Residential Subdivision or other available documents.

a. Maximum Services Special Tax

The Fiscal Year 2022-2023 Maximum Services Special Tax for each Land Use Class of Developed Property is shown below in Table 4.

Table 4

Maximum Services Special Tax for Developed Property
City of Fontana CFD No. 109 (Narra Hills)
Fiscal Year 2022-2023

Land
Use
Class
Planning
Area

Description

Maximum
Services
Special Tax
1 P.A. 1 Final Residential Subdivision $1,040 per unit
2 P.A. 2 Final Residential Subdivision $1,040 per unit
3 P.A. 3 Final Residential Subdivision $1,005 per unit
4 P.A. 4 Final Residential Subdivision $1,005 per unit
5 NA Non-Residential Property $6,830 per Acre

b. Assigned Services Special Tax

The Fiscal Year 2022-2023 Assigned Services Special Tax for each Land Use Class of Developed Property is shown below in Table 5.

Table 5

Assigned Services Special Tax for Developed Property
City of Fontana CFD No. 109 (Narra Hills)
Fiscal Year 2022-2023

Land
Use
Class
Planning
Area

Description

Assigned
Services
Special Tax
1 P.A. 1 Final Residential Subdivision $744 per unit
2 P.A. 2 Final Residential Subdivision $744 per unit
3 P.A. 3 Final Residential Subdivision $718 per unit
4 P.A. 4 Final Residential Subdivision $718 per unit
5 NA Non-Residential Property $4,880 per Acre

c. Increase in the Maximum Services Special Tax

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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 12 On each July 1, commencing on July 1, 2023, the Max imum Services Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.

d. Increase in the Assigned Services Special Tax

The Assigned Services Special Tax above shall be ap plicable for Fiscal Year 2022-2023, and shall increase thereafter, commencing on July 1 , 2023, and on each July 1 thereafter in an amount estimated to fund the Special Tax Requ irement for Services for the Fiscal Year commencing on such July 1. However, in no cas e shall the Assigned Services Special Tax for an Assessor’s Parcel of Developed P roperty exceed the applicable Maximum Services Special Tax for such Assessor’s Pa rcel of Developed Property in any Fiscal Year.

e. Multiple Land Uses

In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. In such cases, the Acreage of Developed Property shall be allocated between Residential Property and Non-Residential Pr operty based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum S ervices Special Tax that can be levied on such Assessor’s Parcel shall be the sum o f the Maximum Services Special Tax that can be levied on each type of property located on that Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

1. Facilities Special Tax

Commencing with Fiscal Year 2022-2023, and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requi rement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax;

Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facili ties Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property a t up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;

Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the l evy of the Facilities Special Tax on each Assessor's Parcel of Developed Property whose Maxim um Facilities Special Tax is determined through the application of the Backup Facilities Sp ecial Tax shall be increased in equal percentages from the Assigned Facilities Special Ta x up to the Maximum Facilities Special Tax for each such Assessor's Parcel;

Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, th en the Facilities Special Tax shall be levied 592

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 13 Proportionately on each Assessor’s Parcel of Taxabl e Public Property and Taxable Property Owner Association Property at up to 100% of the Max imum Facilities Special Tax for Taxable Public Property and Taxable Property Owner Associat ion Property, as needed to satisfy the Special Tax Requirement for Facilities.

Notwithstanding the above, the CFD Administrator sh all, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Faci lities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in ord er to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 109 Bon ds have already been issued or the Council has covenanted that it shall not issue any addition al CFD No. 109 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a cons equence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 109 by more than ten percent above the amount that would have been levied in that Fiscal Y ear had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previou s sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Pr operty shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.

2. Services Special Tax

Commencing with Fiscal Year 2022-2023 and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Services and shall provide for the levy of the Services Special Tax until the total Se rvices Special Tax levy equals the Special Tax Requirement for Services. The Services Special Tax shall be levied each Fiscal Year as follows:

First: The Services Special Tax shall be levied Pr oportionately each Fiscal Year on each Assessor’s Parcel of Developed Property at up to 10 0% of the applicable Assigned Services Special Tax as needed to satisfy the Special Tax Requirement for Services;

Second: If additional monies are needed to satisfy the Special Tax Requirement for Services after the first step has been completed, then the l evy of the Services Special Tax on each Assessor's Parcel of Developed Property shall be in creased in equal percentages from the Assigned Services Special Tax up to the Maximum Ser vices Special Tax for each such Assessor’s Parcel.

E. EXEMPTIONS

1. Facilities Special Tax

No Facilities Special Tax shall be levied on up to the applicable Acreage limit of Public Property and/or Property Owner Association Property establis hed for each Planning Area as set forth in Table 6 below. Tax-exempt status shall be assigned by the CFD Administrator in the chronological order in which property within a Plan ning Area becomes Public Property or Property Owner Association Property. However, shou ld an Assessor’s Parcel no longer be 593

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 14 classified as Public Property or Property Owner Ass ociation Property, it shall, from that point forward, be subject to the Facilities Special Tax.

Table 6

Exempt Acreage Limits
City of Fontana CFD No. 109 (Narra Hills)

Planning
Area
Exempt
Acreage
Limit
P.A. 1 64.08 Acres
P.A. 2 0.00 Acres
P.A. 3 0.00 Acres
P.A. 4 0.00 Acres

Notwithstanding the above, an Assessor’s Parcel wit hin a Planning Area that is transferred to a public agency or property owner’s association prior to the issuance of the first series of CFD No. 109 Bonds that causes the Acreage of Public Pro perty and Property Owner Association Property within such Planning Area to exceed the ap plicable Acreage limit that can be designated by the CFD Administrator under this Sect ion E.1 shall also be exempted from paying the Special Tax.

Public Property or Property Owner Association Prope rty that is not exempt from the Facilities Special Tax under this Section E.1 shall be subject to the levy of the Facilities Special Tax and shall be taxed Proportionately as part of the fourt h step in Section D herein, at up to 100% of the applicable Maximum Facilities Special Tax for Taxab le Public Property and Taxable Property Owner Association Property.

In addition, no Facilities Special Tax shall be lev ied on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households W elfare Exemption Property be exempt from the Facilities Special Tax, then the Facilities Special Tax shall be levied on such Assessor’s Parcel in accordance with this Rate and Method of A pportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

2. Services Special Tax

No Services Special Tax shall be levied on Undevelo ped Property, Taxable Public Property, Taxable Property Owner Association Property, Public Property, or Property Owner Association Property.

In addition, no Services Special Tax shall be levie d on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households W elfare Exemption Property be exempt from the Services Special Tax, then the Services Sp ecial Tax shall be levied on such Assessor’s Parcel in accordance with this Rate and Method of A pportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

F. MANNER OF COLLECTION
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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 15 The Special Tax shall be collected in the same mann er and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 10 9 may directly bill the Special Tax, and/or may collect Special Taxes at a different tim e or in a different manner if necessary to meet financial obligations, and, to the extent of the Fa cilities Special Tax, may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels.

G. APPEALS AND INTERPRETATIONS

Any landowner or resident who feels that the amount of the Special Tax levied on his/her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator, provided that the appellant is current in his/her payment of Special Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The CFD Admini strator shall review the appeal, meet with the appellant if the CFD Administrator deems necess ary, and advise the appellant of its determination. If the CFD Administrator agrees wit h the appellant, a cash refund shall not be made (except for the last year of levy), but the am ount of the Special Tax levied shall be appropriately modified through an adjustment to the Special Tax levy in the following Fiscal Year. If the CFD Administrator disagrees with the appellant and the appellant is dissatisfied with the determination, the appellant then has 30 d ays in which to appeal to the Council by filing a written notice of appeal with the City Clerk, pro vided that the appellant is current in his/her payment of Special Taxes. This second appeal must specify the reasons for its disagreement with the CFD Administrator's determination.

The CFD Administrator shall interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguity and make determinations re lative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the CFD Administrator shall be subject to appeal to the Council whose dec ision shall be final and binding as to all persons.

H. PREPAYMENT OF FACILITIES SPECIAL TAX

Under this Rate and Method of Apportionment, an Ass essor’s Parcel within CFD No. 109 is permitted to prepay the Facilities Special Tax. The obligation of the Assessor’s Parcel to pay the Facilities Special Tax may be fully or partially pr epaid and permanently satisfied as described herein, provided that a prepayment may be made only for Assessor’s Parcels of Developed Property, or for an Assessor’s Parcel of Undevelope d Property for which a building permit has been issued after January 1, 2022, and only if ther e are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment . An owner of an Assessor's Parcel intending to prepay the Facilities Special Tax obligation sha ll provide the CFD Administrator with written notice of intent to prepay. Within 30 days of rece ipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge such owner a reasonabl e fee for providing this service. If there are Outstanding Bonds, prepayment must be made not less than 30 days prior to a date that notice of redemption of CFD No. 109 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture that is specified in the report of the Facilities Special Tax Prepayment Amount (defined below).

The following additional definitions apply to this Section H:

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City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 16 "CFD Public Facilities Costs" means either $37,115,500 in 2022 dollars, which sh all increase by the Construction Inflation Index on July 1, 2023 , and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Admini strator as sufficient to provide funding for the Authorized Facilities under the authorized bond ing program for CFD No. 109, or (ii) shall be determined by the Council concurrently with a covenant that it shall not issue any more CFD No. 109 Bonds (except refunding bonds) to be supported by the Facilities Special Tax levy under this Rate and Method of Apportionment.

"Construction Inflation Index" means the annual percentage change in the Engineer ing News Record Building Cost Index for the City of Los Ange les, measured as of the month of December in the calendar year which ends in the previous Fis cal Year. In the event this index ceases to be published, the Construction Inflation Index shall b e another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News Record Building Cost Index for the City of Los Angeles.

"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) co sts of Authorized Facilities previously paid from the Improvement Fun d, (ii) moneys currently on deposit in the Improvement Fund available to pay costs of Authoriz ed Facilities, and (iii) the amount the CFD Administrator reasonably expects to derive from the reinvestment of these funds.

"Improvement Fund" means a fund or account specifically identified in the Indenture (or prior to the issuance of the first series of CFD No. 109 Bonds a fund or account held by the City) to hold funds which are currently available for expend iture to acquire or construct Authorized Facilities.

"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are outstanding under the Indenture after the first int erest and/or principal payment date following the current Fiscal Year.

1. Prepayment in Full

The Facilities Special Tax Prepayment Amount (defin ed below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Facilities Special Tax Prepayment Amo unt

As of the proposed date of prepayment, the Faciliti es Special Tax Prepayment Amount shall be calculated according to the following paragraphs:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For Assessor’s Parcels of Developed Property, compu te the Assigned Facilities Special Tax and Backup Facilities Special Tax for the Asses sor’s Parcel to be prepaid. For 596

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 17 Assessor’s Parcels of Undeveloped Property for whic h a building permit has been issued after January 1, 2022, compute the Assigned Facilit ies Special Tax and Backup Facilities Special Tax for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for such Assessor’s Parcel.

3. (a) Divide the Assigned Facilities Special Tax comp uted pursuant to paragraph 2 by the total estimated Assigned Facilities Special Tax lev y for CFD No. 109 based on the Assigned Facilities Special Taxes for Developed Pro perty which could be levied on all expected development assuming Buildout of CFD No. 1 09, excluding any Assessor’s Parcels which have been prepaid, and

(b) Divide the Backup Facilities Special Tax comput ed pursuant to paragraph 2 by the total estimated Backup Facilities Special Taxes at Buildout for the entire CFD No. 109, excluding any Assessor’s Parcels which have been prepaid.

4. Multiply the larger quotient computed pursuant to p aragraph 3(a) or 3(b) by the Previously Issued Bonds to compute the amount of Pr eviously Issued Bonds to be redeemed (the "Bond Redemption Amount").

5. Multiply the Bond Redemption Amount computed pursua nt to paragraph 4 by the applicable redemption premium (e.g., the redemption price minus 100%), if any, on the Previously Issued Bonds to be redeemed (the "Redemption Premium").

6. Compute the current Future Facilities Costs.

7. Multiply the larger quotient computed pursuant to p aragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the a mount of Future Facilities Costs to be prepaid (the "Future Facilities Amount").

8. Compute the amount needed to pay interest on the Bo nd Redemption Amount from the first bond interest and/or principal payment date f ollowing the current Fiscal Year until the redemption date for the Previously Issued Bonds specified in the report of the Facilities Special Tax Prepayment Amount.

9. Determine the Facilities Special Tax levied on the Assessor’s Parcel in the current Fiscal Year which has not yet been paid.

10. Compute the minimum amount the CFD Administrator re asonably expects to derive from the reinvestment of the Facilities Special Tax Prep ayment Amount, less any interest earnings attributed to the Future Facilities Amount , and less any interest earnings attributed to the Administrative Fees and Expenses (defined below) from the date of prepayment until the redemption date for the Previo usly Issued Bonds to be redeemed with the prepayment.

11. Add the amounts computed pursuant to paragraphs 8 a nd 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount").

12. The administrative fees and expenses of CFD No. 109 are as calculated by the CFD Administrator and include the costs of computation of the prepayment, the costs to invest 597

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 18 the prepayment proceeds, the costs of redeeming CFD No. 109 Bonds, and the costs of recording any notices to evidence the prepayment an d the redemption (the "Administrative Fees and Expenses").

13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as d efined in the Indenture), if any, associated with the redemption of Previously Issued Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new re serve requirement (as defined in the Indenture) in effect after the redemption of Previo usly Issued Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. No Reserve Fu nd Credit shall be granted if the amount then on deposit in the reserve fund for the Previously Issued Bonds is below 100% of the reserve requirement (as defined in the Indenture).

14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the date immediately following the first interes t and/or principal payment following the current Fiscal Year, a capitalized interest cre dit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund or account under the Indenture after such first interest and/or principal payment date (the "Capitalized Interest Credit").

15. The Facilities Special Tax prepayment is equal to t he sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Facilities Special Tax Prepayment Amount").

2. Prepayment in Part

The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula:

PP = [(PE – A) x F] + A

These terms have the following meaning:

PP = the partial prepayment.

PE = the Facilities Special Tax Prepayment Amount calculated according to Section H.1.

F = the percentage, expressed as a decimal, by whic h the owner of the Assessor’s Parcel is partially prepaying the Facilities Special Tax.

A = the Administrative Fees and Expenses calculated according to Section H.1.

3. General Provisions Applicable to the Prepayment of Facilities Special Tax

(a). Use of the Facilities Special Tax Prepayment Amount

The Facilities Special Tax Prepayment Amount, less the Administrative Fees and Expenses calculated according to Section H.1 which shall be retained by CFD No. 109, and less the Future Facilities Amount calculated ac cording to Section H.1 which shall be deposited into the Improvement Fund, shall be depos ited into specific funds established under the Indenture, to fully or partially redeem a s many Outstanding Bonds as possible, 598

City of Fontana March 28, 2022
Community Facilities District No. 109 (Narra Hills) Page 19 and, if amounts are less than $5,000, to make debt service payments on the Outstanding Bonds.

(b). Full Prepayment of Facilities Special Tax

Upon confirmation of the payment of the current Fis cal Year’s entire Facilities Special Tax obligation, the CFD Administrator shall remove the current Fiscal Year’s Facilities Special Tax levy for such Assessor’s Parcel from th e County tax rolls. With respect to any Assessor’s Parcel that is prepaid in accordance with Section H.1, the CFD Administrator shall cause a suitable notice to be r ecorded in compliance with the Act, to indicate the prepayment of the Facilities Special T ax and the release of the Facilities Special Tax lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay the Facilities Special Tax shall cease.

(c). Partial Prepayment of Facilities Special Tax

With respect to any Assessor’s Parcel that is parti ally prepaid, the CFD Administrator shall (i) distribute or cause to be distributed the funds remitted to it according to Section H.3.(a) and (ii) indicate in the records of CFD No. 109 that there has been a partial prepayment of the Facilities Special Tax and that a portion of the Facilities Special Tax with respect to such Assessor’s parcel, equal to th e outstanding percentage (1.00 – F) of the remaining Maximum Facilities Special Tax, shall continue to be levied on such Assessor’s Parcel pursuant to Section D herein.

(d). Debt Service Coverage

Notwithstanding the foregoing, no prepayment of the Facilities Special Tax shall be allowed unless the amount of Facilities Special Tax that may be levied on Taxable Property (assuming Buildout) within CFD No. 109 in each future Fiscal Year (after excluding Public Property and Property Owner Associ ation Property as set forth in Section E.1 herein), after the proposed prepayment, is at least equal to the sum of (i) 1.10 times the debt service necessary to support the rem aining Outstanding Bonds in each corresponding Fiscal Year, and (ii) Administrative Expenses.

I. TERM OF SPECIAL TAX

The Facilities Special Tax shall be levied for a pe riod not to exceed fifty years commencing with Fiscal Year 2022-2023. The Services Special Tax sh all be levied in perpetuity to fund the Special Tax Requirement for Services.

T/Clients/FONTANA/MELLO/CFD Nos. 109 (Narra Hills)/ Rate and Method/Fontana CFD No. 109 (Narra Hills) R MA for ROI.docx Printed: March 28, 2022
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A-1

EXHIBIT A

CERTIFICATE TO AMEND FACILITIES SPECIAL TAX

CFD NO. 109 CERTIFICATE

1. Pursuant to Section C.1 of the Rate and Method o f Apportionment (the "Rate and Method") for City of Fontana Community Facilities District N o. 109 (Narra Hills) ("CFD No. 109"), the Assigned Facilities Special Tax and the Backup Facilities Special Tax for Developed Property within CFD No. 109 has been reduced as described herein.

(a) The information in Table 1 of the Rate and Method r elating to the Assigned Facilities Special Tax for Developed Property within CFD No. 1 09 shall be modified as follows:

Land
Use
Class Description
Residential Floor
Area (square feet)
Original
Assigned
Facilities
Special Tax
Modified
Assigned
Facilities
Special Tax
1 Detached Residential Property 4,400 or greater $8 ,186 per unit $[____] per unit 2 Detached Residential Property 4,200 to less than 4,400 $7,879 per unit $[____] per unit 3 Detached Residential Property 4,000 to less than 4,200 $7,736 per unit $[____] per unit 4 Detached Residential Property 3,800 to less than 4,000 $7,592 per unit $[____] per unit 5 Detached Residential Property 3,600 to less than 3,800 $7,238 per unit $[____] per unit 6 Detached Residential Property 3,400 to less than 3,600 $6,905 per unit $[____] per unit 7 Detached Residential Property 3,200 to less than 3,400 $6,551 per unit $[____] per unit 8 Detached Residential Property 3,000 to less than 3,200 $6,240 per unit $[____] per unit 9 Detached Residential Property 2,800 to less than 3,000 $6,103 per unit $[____] per unit 10 Detached Residential Property 2,600 to less than 2,800 $5,873 per unit $[____] per unit 11 Detached Residential Property 2,400 to less than 2,600 $5,666 per unit $[____] per unit 12 Detached Residential Property 2,200 to less than 2,400 $5,349 per unit $[____] per unit 13 Detached Residential Property 2,000 to less than 2,200 $5,118 per unit $[____] per unit 14 Detached Residential Property Less than 2,000 $4 ,876 per unit $[____] per unit 15 Attached Residential Property 2,000 or greater $ 4,074 per unit $[____] per unit 16 Attached Residential Property 1,800 to less than 2,000 $4,025 per unit $[____] per unit 17 Attached Residential Property 1,600 to less than 1,800 $3,762 per unit $[____] per unit 18 Attached Residential Property 1,400 to less than 1,600 $3,627 per unit $[____] per unit 19 Attached Residential Property 1,200 to less than 1,400 $3,445 per unit $[____] per unit 20 Attached Residential Property Less than 1,200 $3,320 per unit $[____] per unit 21 Non-Residential Property NA $36,640 per Acre $[_ ___] per Acre

(b) The Backup Facilities Special Tax for Developed Pro perty within a Planning Area, set forth in Table 2 within Section C.1.a.(3) of th e Rate and Method, shall be modified as follows:

600

A-2
Planning
Area
Original
Backup
Facilities
Special Tax
Modified
Backup
Facilities
Special Tax
P.A. 1 $28,860 per Acre $[____] per Acre
P.A. 2 $52,010 per Acre $[____] per Acre
P.A. 3 $70,530 per Acre $[____] per Acre
P.A. 4 $69,890 per Acre $[____] per Acre

2. The Assigned Facilities Special Tax and the Back up Facilities Special Tax for Developed Property may only be reduced prior to the first issuance of CFD No. 109 Bonds.

3. Upon execution of the certificate by CFD No. 109, C FD No. 109 shall cause an amended notice of Special Tax lien for CFD No. 109 to be re corded reflecting the reductions set forth herein.

All capitalized terms used herein shall have the meanings set forth in the Rate and Method.

By:___________________________ Date:______________ ________ CFD Administrator

By execution hereof, the undersigned acknowledge, o n behalf of CFD No. 109, receipt of this certificate and modification of the Rate and Method as set forth in this certificate.

CITY OF FONTANA COMMUNITY FACILITIES DISTRICT No. 109 (NARRA HILLS)

By:___________________________ Date:______________ ________ 601

EXHIBIT B

PLANNING AREAS

Planning
Area (P.A.) Legal Description
P.A. 1 The land area within CFD No. 109 which is not located within P.A. 2, P.A. 3, or P.A. 4
P.A. 2 Lots 156 through 233, inclusive, of Tentativ e Tract Map No. 20010 P.A. 3 Lots 234 and 235 of Tentative Tract Map No. 20010 P.A. 4 Lot 236 of Tentative Tract Map No. 20010
Reference is hereby made to Tentative Tract Map No. 20010 approved by City Council on February 26, 2019 for a description of the lines an d dimensions of the lots listed above. The area geographically identified within the boundaries of an applicable Planning Area may be amended from time-to-time or modified pursuant to a final m ap or precise site plan for such property only at the discretion of the CFD Administrator provided th at such change will not reduce the amount of Maximum Facilities Special Tax below the amount req uired to equal at least 1.1 times the maximum annual debt service on all Outstanding Bo nds, plus the Administrative Expenses.

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4140-0033-1317.2

I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council of said City at a regular meeting thereof, hel d on June 14, 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

City Clerk

Mayor

ATTEST:

City Clerk
603
4126-0762-5781.2
RESOLUTION NO. 2022-048

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF FONTANA DEEMING IT NECESSARY TO INCUR

BONDED INDEBTEDNESS WITHIN THE CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)
WHEREAS, on April 12, 2022 , the City Council (the “City Council”) of th e City of Fontana (the “City”), pursuant to the Mello -Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Fontana of Intention to Establish a Community Facilities District Proposed to be Named City of Fontana Community Facilities District No. 109 (Narra Hills) and to Authorize the Levy of Special Taxes” stating its intention to establish City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) and to authorize the levy of special taxes within the Community Facilities District to finance certain public facilities and services; WHEREAS, on April 12, 2022 , the City Council also adopted a resolution entitled “A Resolution of the City Cou ncil of the City of Fontana to Incur Bonded Indebtedness of the Proposed City of Fontana Community Facilities District No. 109 (Narra Hills)” (the “Resolution to Incur Bonded Indebtedness”) declaring the necessity for incurring bonded indebtedness and setting the date for a public hearing to be held on the proposed debt issue; WHEREAS, pursuant to the Resolution to Incur Bonded Indebtedness, notice of said public hearing was published in the Fontana Herald News , a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing;
WHEREAS, at said public hearing, any person interested, including persons owning property within the area and desiring to appear and present any matters material to the questions set forth in the Resolution to Incur Bonded Indebtedness appeared and presented such matters; WHEREAS, oral or written protests against the proposed debt issue were not made or filed at or before said public hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one -half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax; WHEREAS, on this date, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Fontana of Formation of the City of Fontana Community Facilities District No. 109 (Narra Hills ), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”);
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WHEREAS, the City Clerk of the City (the “City Clerk”) is the election official that will conduct the special election on the proposition to incur bonded indebtedness for the Community Facilities District;
WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of said public hearing; WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement app licable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on June 14, 2022, and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and
WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on June 14, 2022;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The City Council deems it necessary to incur the bonded indebtedness.

Section 3. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities (as defined in the Resolution of Formation), including all costs and estimated costs incidental to, or connected with, the accomplishment of such purpose.

Section 4. In accordance with the previous determination of the City Council, the whole of the Community Facilities District will pay for the bonded indebtedness.

Section 5. The maximum aggregate amount of debt to be incurred is $50,000,000.

Section 6. The maximum term the bonds to be issued shall run before maturity is 40 years.

Section 7. The maximum annual rate of interest to be paid shall not exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds, payable semiannually or at such times as the City Council or its designee shall determine, the actual rate or rates and times of payment of such interest to be determined by the City Coun cil or its designee at the time or times of sale of the bonds.

Section 8. The proposition to incur the bonded indebtedness shall be submitted to the voters.
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Section 9. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings held by the City Council on the proposed debt issue for the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax.

Section 10. The City Council here by finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), and (b) to the holding of said election on June 14, 2022. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on June 14, 2022.

Section 11. The date of the special community facilities district election (which shall be consolidated with the special district election to levy a special tax within the Community Facilities District) at which time the proposition shall be submitted to the voters is June 14, 2022.

Section 12. The election is to be conducted by mail ballot. The mailed ballots are required to be received in the office of the City Clerk no later than 8:30 p.m. on June 14, 2022; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

Section 13. All actions heretofore taken by the officers, employees and agents of the City with respect to the incurrence of bonded indebtedness, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 14. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 15. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
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4 4126-0762-5781.2

AYES:

NOES:

ABSENT:

City Clerk

Mayor

ATTEST:

City Clerk
607
4157-1010-0021.2
RESOLUTION NO. 2022-049

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF FONTANA CALLING SPECIAL ELECTION FOR CITY

OF FONTANA COMMUNITY FACILITIES DISTRICT
NO. 109 (NARRA HILLS)
WHEREAS, on this date, the City Council (the “City Council”) of the City of Fontana (the “City”), pursuant to the Mello -Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Fontana of Formation of the City of Fontana Community Facilities District No. 109 (Narra Hills), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”), establishing City of Fontana Community Facilities District No. 109 (Narra Hills ) (the “Community Facilities District”), authorizing the levy of a special tax (the “Special Tax”) within the Community Facilities District and establishing an appropriations limit of $50,000,000 for the Community Facilities District; WHEREAS, on this date, the City Council also adopted a resolution entitled “A Resolution of the City Council of the City of Fontana Deeming it Necessary to Incur Bonded Indebtedn ess within City of Fontana Community Facilities District No. 109 (Narra Hills )” (the “Resolution Deeming it Necessary to Incur”), deeming it necessary to incur bonded indebtedness in the maximum amount of $50,000,000;
WHEREAS, pursuant to the provisions of said resolutions, the propositions to incur such bonded indebtedness, to levy the Special Tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District are to be submitted to the qualified electors of the Community Facilities District as required by the Act; WHEREAS, the City Council desires to designate the City Clerk of the City (the “City Clerk”) as the election official for the special election provided for herein; WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District;
WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on June 14, 2022 and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and
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WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on June 14, 2022;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. Pursuant to Sections 53351, 53326 and 53325.7 of the Act, the propositions to incur such bonded indebtedness, to levy the Special Tax within the Community Facilities District and to establish such appropriations limit for the Community Facilities District shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided below.

Section 3. The City Clerk is hereby designated as the official to conduct said election.

Section 4. As authorized by Section 53353.5 of the Act, the propositions to incur such bonded indebtedness, to levy the Special Tax within the Community Facilities District and to establish such appropriations limit for the Community Facilities District shall be combined into one ballot proposition.

Section 5. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of April 26, 2022, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings heretofore held by the City Council on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax.

Section 6. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), (b) to the holding of said election on June 14, 2022, and (c) to the waiver of any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council herby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on June 14, 2022.

Section 7. The City Coun cil hereby calls a special election to submit to the qualified electors of the Community Facilities District the combined proposition to incur bonded indebtedness in an amount not to exceed $50,000,000 , to levy the Special Tax within the Community Facilities District and to establish an appropriations limit of the Community Facilities District in the amount of $50,000,000, which election shall be held at 8353 Sierra Avenue, Fontana, California, on June 14, 2022, provided, that, in the event the June 14, 2022 City Council meeting is held via teleconference and/or videoconference only, the means by which the public may 609

3 4157-1010-0021.2

observe such public hearings and offer public comment would be as prescribed in the notice and agenda for such City Council meeting. The City C ouncil has caused to be provided to the City Clerk, as the official to conduct said election, the Resolution of Formation, the Resolution of Deeming it Necessary to Incur, a certified map of sufficient scale and clarity to show the boundaries of the Commun ity Facilities District, and a sufficient description to allow the City Clerk to determine the boundaries of the Community Facilities District.

The voted ballots shall be returned to the City Clerk not later than 8:30 p.m. on June 14, 2022; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

Section 8. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballot pursuant to Section 4000 et. seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, will govern the election.

Section 9. The form of the ballot for said election is attached hereto as Exhibit A and by this reference incorporated herein, and such form of ballot is hereby approved. The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective landowner to which it pertains.

Each ballot shall be accompanied by all supplies and written instructions necessary for the use and return of the ballot. The identification envelope for return of the ballot shall be enclosed with the ballot, shall have the return postage prepaid, and shall contain: (a) the name and addr ess of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or the authorized representative of the landowner entitled to vote and is the person whose name appears on the identification envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration described in clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.

Analysis and arguments with respect to the ballot proposition are hereby waived, as provided in Section 53327 of the Act.

Section 10. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at 8353 Sierra Avenue, Fontana, California, to and including 8:30 p.m. on June 14, 2022, whether said ballots be personally delivered or received by mail. The City Clerk shall have available ballots which may be marked at said location on the election day by said qualified electors.

Section 11. The City Council hereby determines that the facilities and services financed by the Community Facilities District are necessary to meet increased demands placed upon local agencies as a result of development occurring in the Community Facilities District.

Section 12. The specific purposes of the bonded indebtedness proposed to be incurred is the financing of the Facilities (as defined in the Resolution of Formation), including all costs and 610

4 4157-1010-0021.2

estimated costs incidental to, or connected with, the accomplishment of such purpose, and the proceeds of such bonded indebtedness shall be applied only to such specific purposes.

Upon approval of the proposition to incur bonded indebtedness, and the sale of any bonds evidencing such indebtedness, the City Council shall take such action as may be necessary to cause to be established an account for deposit of the proceeds of sale of the bonds. For so long as any proceeds of the bonds remain unexpended, the Chief Financial Officer, Management Services, of the City shall cause to be filed with the City Council, no later than January 1 of each year, a report stating (a) the amount of bond proceeds received and expended during the preceding year, and (b) the status of any project funded or to be funded from bond proceeds. Said report may relate to the calendar year, fiscal year, or other appropriate annual period, as the Chief Financial Officer, Management Services, of the City shall determine, and may be incorporated into the annual budget, audit, or other appropriate routine report to the City Council.

Section 13. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election called for herein, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 15. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

611

A-1
4157-1010-0021.2

EXHIBIT A

OFFICIAL BALLOT

CITY OF FONTANA
June 14, 2022

SPECIAL ELECTION
This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is ___.

INSTRUCTIONS TO VOTERS:

To vote on the measure, mark a cross (+ or X) in the voting square after the word “YES” or after the word “NO”. All distinguishing marks or erasures are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Fontana and obtain another.

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the
City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) be authorized to incur bonded indebtedness in a m aximum amount of not to exceed $ 50,000,000 and levy a special tax in order to finance certain facilities and services and shall the annual appropriations limit of the Community Facilities District be established in the amount of $ 50,000,000, all as specifi ed in the Resolution entitled “A Resolution of the City Council of the City of Fontana of Formation of the City of Fontana Community Facilities District No. 109 (Narra Hills ), Authorizing the Levy of a Special Tax within the Community Facilities District a nd Establishing an Appropriations Limit for the Community Facilities District” and the Resolution entitled “A Resolution of the City Council of the City of Fontana Deeming it Necessary to Incur Bonded Indebtedness within City of Fontana Community Facilitie s District No. 109 (Narra Hills),” each adopted by the City Council of the City of Fontana on June 14, 2022?

Yes:

No:

612

4157-1010-0021.2

I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council of said City at a regular meeting thereof, he ld on June 14, 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

City Clerk

Mayor
ATTEST:

City Clerk

613
4163-6414-9301.2
RESOLUTION NO. 2022-050

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA DECLARING RESULTS OF SPECIAL

ELECTION AND DIRECTING RECORDING OF NOTICE OF

SPECIAL TAX LIEN
WHEREAS, on June 14, 2022, the City Council (the “City Council”) of the City of Fontana (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Fontana Calling Special Election for City of Fontana Community Facilities District No. 109 (Narra Hills)” (the “Resolution Calling Election”), calling for a special election of the qualified electors within City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”); WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on June 14, 2022; and WHEREAS, the City Clerk of the City (the “City Clerk”) has certified the c anvass of the returns of the election and has filed a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The foregoing recitals are true and correct.

Section 2. The City Council has received, reviewed and hereby accepts the Canvass.

Section 3. The City Council hereby finds and declares that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors in accordance with Section 53328, Section 53355 and Section 53325.7 of the Act.

Section 4. The City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of San Bernardino a notice of special tax lien in the form required by the Act, said recording to occur no later than fifteen days following adoption by the City Council of this Resolution.

Section 5. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election, or in connection w ith or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 6. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.
614

2 4163-6414-9301.2

Section 7. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

615

A-1
4163-6414-9301.2

EXHIBIT A

[See attached]
616

A-2
4163-6414-9301.2

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

CANVASS AND STATEMENT OF RESULTS OF ELECTION

I hereby certify that on June 14, 2022, I canvassed the returns of the special election held on June 14, 2022, for the City of Fontana Community Facilities District No. 109 (Narra Hills), that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the proposition are as follows and that the totals as shown for and against the proposition are true and correct:

Qualified
Landowner
Votes

Votes
Cast

YES

City of Fontana Community Facilities
District No. 109 (Narra Hills) Special
Election, June 14, 2022

74 ____

____

MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) be authorized to incur bonded indebtedness in a maximum amount of not to exceed $50,000,000 and levy a special tax in order to finance certain facilities and services and shall the annual appropriations limit of the Community Facilities District be established in the amount of $50,000,000, all as specified in the Resolution entitled “A Resolution of the City Council of the City of Fontana of Formation of the City of Fontana Community Facilities District No. 109 (Narra Hills), Authorizing the Levy of a Special Tax within the Community Facili ties District and Establishing an Appropriations Limit for the Community Facilities District” and the Resolution entitled “A Resolution of the City Council of the City of Fontana Deeming it Necessary to Incur Bonded Indebtedness within City of Fontana Community Facilities District No. 109 (Narra Hills),” each adopted by the City Council of the City of Fontana on June 14, 2022?

IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 14th day of June 2022.

By:

Germaine McClellan Key, City Clerk

617

4163-6414-9301.2

I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council of said City at a regular meeting thereof, he ld on June 14, 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

City Clerk

Mayor
ATTEST:

City Clerk

618
4136-9617-8741.2
ORDINANCE NO. 1893

AN ORDINANCE OF THE CITY OF FONTANA LEVYING A

SPECIAL TAX WITHIN THE CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA
HILLS)
WHEREAS, on April 12, 2022 , the City Council (the “City Council”) of the City of Fontana (the “City”), pursuant to the Mello -Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Fontana of Intention to Establish a Community Facilities District Proposed to be Named City of Fontana Community Facilities District No. 109 (Narra Hills), and to Authorize the Levy of Special Taxes” stating its intention to establish City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”), to authorize the levy of a special tax (the “Special Tax”) within the Community Facilities District and to finance certain public facilities (the “Facilities”) and services (the “Services”);
WHEREAS, on June 14, 2022 , the City Council held a noticed public hearing on the establishment of the Community Facilities District, as required by the Act; WHEREAS, subsequent to the close of said hearing, the City Council adopted resolutions entitled “A Resolution of the City Council of the City of Fontana of F ormation of the City of Fontana Community Facilities District No. 109 (Narra Hills), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”), “A Resolution of the City Council of the City of Fontana Deeming it Necessary to Incur Bonded Indebtedness within City of Fontana Community Facilities District No. 109 (Narra Hills)” and “A Resolution of the City Council of the City of Fontana Calling Special Election for City of Fontana Community Facilities District No. 109 (Narra Hills),” which resolutions established the Community Facilities District, authorized the levy of the Special Tax within the Community Facilities District and called an election within the Community Facilities District on the proposition of incurring indebtedness, levying the Special Tax within the Community Facilities District and establishing an appropriations limit for the Community Facilities District, respectively; and
WHEREAS, on June 14, 2022, an election was held in which the qualified electors of the Community Facilities District approved said proposition by more than the two-thirds vote required by the Act;

THE CITY COUNCIL OF THE CITY OF FONTANA DOES ORDAIN AS
FOLLOWS:

Section 1. The City Council hereby authorizes and levies the Special Tax within the Community Facilities District pursuant to Sections 53328 and 53340 of the Act, at the rate and in accordance with the method of apportionment set forth in Exhibit B to the Resolution of Formation (the “Rate and Method of Apportionment”). The Special Tax is hereby levied commen cing in fiscal year 2022-23 and in each fiscal year thereafter until the last fiscal year in which such Special Tax is authorized to be levied pursuant to the Rate and Method of Apportionment. 619

2 4136-9617-8741.2

Section 2. The City Council may, in accordance with subdivision (b) of Section 53340 of the Act, provide, by resolution, for the levy of the Special Tax in future tax years at the same rate or at a lower rate than the rate provided by this Ordinance. In no event shall the Special Tax be levied on any parcel within the Communit y Facilities District in excess of the maximum tax specified therefor in the Rate and Method of Apportionment.

Section 3. The Special Tax shall be levied on all of the parcels in the Community Facilities District, unless exempted by law or by the Rate and Method of Apportionment.

Section 4. The proceeds of the Special Tax shall only be used to pay, in whole or in part, the cost of providing the Facilities and Services and incidental expenses pursuant to the Act.

Section 5. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in the case of delinquency as is provided for ad valorem taxes, unless another procedure is adopted by the City Council.

Section 6. If for any reason any portion of this Ordinance is found to be invalid, or if the Special Tax is found inapplicable to any particular parcel within the Community Facilities District, by a court of competent jurisdiction, the balance of this Ordinanc e and the application of the Special Tax to the remaining parcels within the Community Facilities District shall not be affected.

Section 7. This Ordinance shall take effect and shall be in force 30 days after the date of its adoption and prior to the expiration of 15 days from the passage thereof shall be published at least once in the Fontana Herald News, a newspaper of general circulation, printed and published in the City of Fontana, State of California, together with the names of the City Council members voting for and against the same.

APPROVED AND ADOPTED this ____ day of _________ 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

620

4136-9617-8741.2

I, Germaine McClellan Key, City Clerk of the City of Fontana and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Ordinance is the actual Ordinance introduced at a regular meeting of said City Council on June 14, 2022, and was finally passed and adopted not less than five days thereafter on ___________, 2022, by the following vote, to wit:

AYES:

NOES:

ABSENT:

City Clerk

Mayor

ATTEST:

City Clerk
621
4129-2423-0197.2
RESOLUTION NO. 2022-051

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AUTHORIZING THE EXECUTION AND

DELIVERY OF A LETTER OF CREDIT AGREEMENT AND

AN ACQUISITION AND FUNDING AGREEMENT
WHEREAS, City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) has been established under the provisions of the Mello -Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, it is anticipated that, in order to finance certain public facilities, the Community Facilities District will issue special tax bonds (the “Bonds”) secured by a special tax (the “Special Tax”) levied within the Community Facilities District; WHEREAS, LS-FONTANA LLC , a Delaware limited l iability company (the “Developer”) is under contract to purchase the property within the Community Facilities District and proposes to construct residential units on the property within the Community Facilities District and to market and sell such residential units;
WHEREAS, it is contemplated that the property within the Community Facilities District may be substantially undeveloped at the time the Bonds are issued and that, as a result, a significant portion of the Special Tax securing the Bonds would be levied on undeveloped property; WHEREAS, in order to increase the credit quality of the Bond issue, the Community Facilities District may require, as a condition to the issuance of the Bonds, that the Developer provide a letter of credit securing the payment of Special Tax levied on certain of such undeveloped property within the Community Facilities District;
WHEREAS, in order to evidence such requirement and the matters pertaining thereto, there has been prepared and presented to this meeting a form of Letter of Credit Agreement, by and between the Community Facilities District and the Developer (such Letter of Credit Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Letter of Credit Agreement”); WHEREAS, the Developer proposes to construct, or cause to be constructed, certain of the public facilities proposed to be financed by the Community Fa cilities District pursuant to the Act, and the Community Facilities District proposes to purchase such public facilities from the Developer, title to which public facilities will be taken by the City; WHEREAS, the Community Facilities District, the City and the Developer desire to provide for the priority in which Special Tax and proceeds of the Bonds are to be applied and certain other matters regarding the Community Facilities District, the Special Tax and the Bonds; WHEREAS, in order to provide for such matters, there has been prepared and presented to this meeting a form of Acquisition and Funding Agreement by and among the Community Facilities District, the City and the Developer (such Acquisition and Fundi ng Agreement, in the 622

2 4129-2423-0197.2

form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Acquisition Agreement”); and WHEREAS, the City Council is the legislative body of the Community Facilities District; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The Letter of Credit Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, b e and the same is hereby approved.

Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City and the Chief Financial Officer, Management Services, of the City, and such other officer o r employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Letter of Credit Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Letter of Credit Agreement by such Authorized Officer.

Section 2. The Acquisition Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Authorized Officers i s hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Acquisition Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Acquisition Agreement by such Authorized Officer.

Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Acquisition Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Acquisition Agreement by such Authorized Officer.

Section 3. All actions heretofore taken by the officers, employees and agents of th e City with respect to the Letter of Credit Agreement and the Acquisition Agreement, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 4. The officers, employees and agents of the City ar e hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.
623

3 4129-2423-0197.2

Section 5. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

624

4129-2423-0197.2

I, Germaine McClellan Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by th e City Council of said City at a regular meeting thereof, held on June 14, 2022, by the following vote to-wit:

AYES:

NOES:

ABSENT:

City Clerk

Mayor
ATTEST:

City Clerk

625
4141-5852-4214.2
RESOLUTION NO. 2022-052

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FONTANA AUTHORIZING THE EXECUTION AND

DELIVERY OF JOINT COMMUNITY FACILITIES

AGREEMENTS
WHEREAS, City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) has been established under the provisions of the Mello -Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, the Community Facilities District is authorized to levy a special tax (the “Special Tax”) upon the land within the Community Facilities District and to issue bonds (the “Bonds”) secured by the Special Tax, the proceeds of which are to be used to finance certain public facilities;
WHEREAS, the public facilities proposed to be financed by the Community Facilities District include certain facilities (the “City Facilities”) to be owned and operated by the City , certain facilities (the “ Flood Control District Facilities ”) to be owned and oper ated by the San Bernardino County Flood Control District (the “Flood Control District”) and certain facilities (the “Water District Facilities”) to be owned and operated by the West Valley Water District (the “Water District”);
WHEREAS, Section 53316.2 of the Act provides that a community facilities district may finance facilities to be owned or operated by a public agency other than the agency that created the community facilities district only pursuant to a joint community facilities agreement or a joint exercise of powers agreement adopted pursuant to said Section; WHEREAS, Section 53316.2 of the Act further provides that at any time prior to the adoption of the resolution of formation creating a community facilities district or a resolution of change to alter a district, or a resolution or resolutions authorizing issuance of bonds pursuant to Section 53356 of the Act, the legislative bodies of two or more local agencies may enter into a joint community facilities agreement pursuant to said Se ction and Sections 53316.4 and 53316.6 of the Act to exercise any power authorized by the Act with respect to the community facilities district being created if the legislative body of each entity adopts a resolution declaring that such a joint agreement would be beneficial to the residents of that entity; WHEREAS, no resolution authorizing the issuance of any Bonds has been adopted; WHEREAS, there has been presented to this meeting a form of Joint Community Facilities Agreement by and among the City, th e Community Facilities District and the Flood Control District that provides for the financing of the Flood Control District Facilities from the proceeds of the Special Tax and Bonds (such Joint Community Facilities Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Flood Control District Joint Facilities Agreement”); 626

2 4141-5852-4214.2

WHEREAS, there has been presented to this meeting a form of Joint Community Facilities Agreement by and among the City, the Community Facilities District and the Water District that provides for the financing of the Water District Facilities from the proceeds of the Special Tax and Bonds (such Joint Community Facilities Agreemen t, in the form that presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Water District Joint Facilities Agreement”); and WHEREAS, the City Council is the legislative body of the Community Facilities District; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana as follows:

Section 1. The City Council hereby declares that each of the Flood Control District Joint Facilities Agreement and the Water District Joint Facilities Agreement will be beneficial to the residents of the City.

Section 2. The Flood Control District Joint Facilities Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manag er of the City and the Chief Financial Officer, Management Services, of the City, and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Flood Control District Joint Facilities Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same ma y require or approve, such requirement or approval to be conclusively evidenced by the execution of the Flood Control District Joint Facilities Agreement by such Authorized Officer.

Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Flood Control District Joint Facilities Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Flood Control District Joint Facilities Agreement by such Authorized Officer.

Section 3. The Water District Joint Facilities Agreement , in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Water District Joint Facilities Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may re quire or approve, such requirement or approval to be conclusively evidenced by the execution of the Water District Joint Facilities Agreement by such Authorized Officer.

3 4141-5852-4214.2

with such changes, insertions and omissions as the Authorized O fficer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Water District Joint Facilities Agreement by such Authorized Officer.

Section 4. All actions heretofore taken by the officers, employ ees and agents of the City with respect to the Flood Control District Joint Facilities Agreement or the Water District Joint Facilities Agreement, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

Section 5. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with th e provisions hereof.

Section 6. This Resolution shall take effect immediately upon its adoption.

APPROVED and ADOPTED by the City Council of the City of Fontana on June 14, 2022.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

628

4141-5852-4214.2

AYES:

NOES:

ABSENT:

City Clerk

Mayor
ATTEST:

City Clerk

629

www.FinanceDTA.com
Public Finance
Public-Private Partnerships
Development Economics
Clean Energy Bonds

COMMUNITY FACILITIES

DISTRICT REPORT

CITY OF FONTANA

COMMUNITY FACILITIES DISTRICT
NO. 109 (NARRA HILLS)

Report Date: May 20, 2022
630

www.FinanceDTA.com 5000 Birch Street, Suite 3000
Newport Beach, CA 92660

COMMUNITY FACILITIES DISTRICT REPORT
FOR

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

Prepared for:

City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
631

TABLE

OF CONTENTS

SECTION
I INTRODUCTION .............................................................. 1 II PROJECT DESCRIPTION ................................................ 2

III DESCRIPTION AND ESTIMATED COSTS OF PUBLIC
FACILITIES AND SERVICES ............................................ 3 A Description of Public Facilities and Services ................ 3 B Estimated Costs of Public Facilities and
Services ................................................................................. 4

IV BONDED INDEBTEDNESS AND INCIDENTAL
EXPENSES .......................................................................... 7 A Projected Bond Sales ......................................................... 7 B Incidental Bond Issuance Expenses to be
Included in the Proposed Bonded
Indebtedness ....................................................................... 7 C Incidental Expenses to be Included in the
Annual Levy of Special Taxes ........................................... 7 V RATE AND METHOD OF APPORTIONMENT .............. 8
A Explanation for Special Tax Apportionment ................. 8 B Maximum Facilities Special Tax ....................................... 9 C Backup Facilities Special Tax .......................................... 10 D Maximum Services Special Tax ...................................... 10 E Accuracy of Information ................................................. 10 VI BOUNDARIES OF THE CFD .......................................... 11 VII GENERAL TERMS AND CONDITIONS ....................... 12 A Substitution of Facilities and Services ......................... 12 B Appeals and Interpretations ........................................... 12 C Prepayment of Special Tax ............................................. 12

APPENDICES

APPENDIX A RATE AND METHOD OF

APPORTIONMENT

APPENDIX B BOUNDARY MAP

632
1 SECTION I

INTRODUCTION

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

I INTRODUCTION
WHEREAS, the City Council of the City of Fontana (hereinafter referred to as the "Council") did, pursuant to the provision of the "Mello-Roos Community Facilities Act of 1982," being Chapter 2.5, Part 1, Division 2 of Title 5 (commencing with Section 53311) of the Government Code of the State of California (hereinafter referred to as the "Act"), and specifically Section 53321.5 thereof, expressly order the filing of a written "Report" with the legislative body of the proposed Community Facilities District (“CFD”). This CFD being City of Fontana CFD No. 109 (Narra Hills) shall hereinafter be referred to as:
"CFD No. 109"; and,
WHEREAS, on April 12, 2022, Council, pursuant to the Act, adopted Resolution No. 2022- 024 entitled “A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA OF

INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT PROPOSED TO BE NAMED CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES" (hereinafter referred to as the "Resolution of Intention") directing that the Report generally contain the following:

1. A brief description of the public facilities and services by type which will be required to adequately meet the needs of CFD No. 109; and

2. An estimate of the cost of providing the public facilities and services, including an estimate of the fair and reasonable cost of the public facilities proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid.

WHEREAS, each officer of the City of Fontana (hereinafter referred to as the "City") who is or will be responsible for providing one or more of the proposed types of public facilities or services to be financed by CFD No. 109 has hereby directed DTA, Inc. to study the proposed CFD No. 109 and, at or before the time of the public hearing on the establishment of CFD No. 109, file the Report with Council pursuant to the provisions of the Resolution of Intention.

NOW, THEREFORE, DTA, Inc. does hereby submit the Report. 633
2 SECTION II

PROJECT DESCRIPTION

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

II PROJECT DESCRIPTION
CFD No. 109 encompasses approximately 137.33 gross acres of land within the City located on the west side of Citrus Avenue north of Duncan Canyon Road. Of this acreage, approximately 73.25 acres are expected to be developed into uses subject to a Mello-Roos Special Tax1. At buildout, it is currently anticipated that CFD No. 90 will consist of approximately 489 residential units, comprised of 129 single family attached townhome units ranging in size from 1,316 to 1,855 square feet, 127 single family detached cluster units ranging in size from 2,100 to 2,555 square feet, and 233 single family detached units ranging in size from 2,387 to 4,249 square feet.

1 Please note that all capitalized terms used herein, unless otherwise indicated, shall have the meanings defined in the Rate and Method of Apportionment for CFD No. 109. 634
3 SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF PUBLIC FACILITIES AND

SERVICES

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

III DESCRIPTION AND ESTIMATED COSTS OF PUBLIC FACILITIES AND

SERVICES
A CFD may provide for the purchase, construction, expansion or rehabilitation of any real or tangible property, including public facilities and infrastructure improvements, with an estimated useful life of five (5) years or longer, which is necessary to meet increased demands placed upon local agencies as a result of development or rehabilitation occurring within the CFD. In addition, a CFD may pay in full all amounts necessary to eliminate any fixed special assessment liens or to pay, repay, or defease any obligation to pay for any indebtedness secured by any tax, fee, charge, or assessment levied within the area of the CFD. A CFD may also provide for financing of certain public services to meet these demands.

A Description of Public Facilities and Services
The type of public facilities proposed to be eligible for funding by CFD No. 109, as identified in the resolution establishing CFD No. 109 (the "Resolution of Formation"), shall consist of those listed below. It is intended that CFD No. 109 will be authorized to finance all or a portion of the costs of any of the following public facilities to be owned and operated by the City, the San Bernardino County Flood Control District, and the West Valley Water District (collectively the “Local Agencies”) and such public facilities shall be constructed, whether or not acquired in their completed states, pursuant to the plans and specifications approved by the Local Agencies:

A.1 Facilities
The types of public facilities proposed to be eligible for funding by CFD No. 109 are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, sewers, storm drains, fire protection facilities, police facilities, public facilities, landscaping, library facilities, park and recreational facilities, flood control facilities consisting of the relocation and construction of the Hawker Crawford flood control channel, water distribution, treatment and storage facilities and land, rights-of-way and easements necessary for any of such facilities.

A.2 Facilities Authorized to be Purchased as Completed Public Facilities The types of public facilities proposed to be purchased as completed facilities by CFD No. 109 are streets, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, sewers, storm drains, fire protection facilities, police facilities, public facilities, landscaping, library facilities, park and recreational facilities, flood control facilities consisting of the relocation and construction of the Hawker Crawford flood control channel, water distribution, treatment and storage facilities and land, rights-of-way and easements necessary for any of such facilities. 635
4 SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF PUBLIC FACILITIES AND

SERVICES

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com
A.3 Services
The types of public services to be financed by CFD No. 109 are fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years that is owned by the City.

A.4 Incidental Expenses
The incidental expenses proposed to be incurred include the following:

The cost of planning and designing public facilities to be financed by CFD No. 109, including the cost of environmental evaluations of those facilities; The costs associated with the creation of CFD No. 109, issuance of CFD No. 109 bonds (the "Bonds"), determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of CFD No. 109; and
Any other expenses incidental to the construction, completion, and inspection of the authorized work.

B Estimated Costs of Public Facilities and Services
The estimated costs of infrastructure and facilities currently expected to be financed through CFD No. 109 are set forth in the table below. The costs listed below are estimates only and actual costs may differ from those estimates herein. As previously referenced, it is intended that CFD No. 109 will be authorized to finance all or a portion of the costs of any of the following public facilities:
636
5 SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF PUBLIC FACILITIES AND

SERVICES

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com
CFD No. 109 (NARRA HILLS) PUBLIC FACILITIES AMOUNT

Acquisition Facilities

$25,138,983 [1]
Hawker-Crawford Channel Backbone Improvements $11,648,004 Lytle Creek Road (& Intract) Planning Area Water System Improvements
$4,392,549
Sewer Improvements (Lytle Creek Sewer Realignment & Intract) $3,098,823 Storm Drain Improvements (Bypass Drainage Backbone) $2,854,302 Circulation Improvements (Lytle Creek Street Improvements) $1,559,159 Traffic Signal Improvements (Glenn Canyon Traffic Signal) $843,125 Street Light Improvements $446,056
Storm Drain Improvements (Lytle Creek Storm Drain) $296,965

Other Public Facilities

$15,955,351 [2]

$12,234,515 [3]
Water System Capacity Improvements $6,566,419 $6,566,419 Park Facility Improvements $3,045,815 $2,398,236
Traffic Circulation Facility Improvements $2,516,901 $1,283,620 Storm Drain Facility Improvements $1,411,314 $0
Housing Facility Improvements $570,882 $570,882
Sewer Facility Improvements $428,662 $0
Public Facility Improvements $332,877 $332,877
Police Facility Improvements $281,240 $281,240
Landscape Facility Improvements $251,310 $251,310
Fire Flow Facility Improvements $246,788 $246,788
Library Facility Improvements $222,947 $222,947
Fire Service Protection Improvements $80,196 $80,196
Additional Capital Facilities Infrastructure Improvements $6,595,323 TOTAL ESTIMATED COSTS $43,968,821
[1] Estimates provided by the Project Developer and subject to review and confirmation. Estimates are inclusive of a 15% construction costs contingency for design, planning, engineering and construction management. [2] Estimated amount of Permit Fees prior to the application of anticipated City fee credits. [3] Estimated amount of Permit Fees after the application of anticipated City fee credits.

In addition, CFD No. 109 is expected to finance the annual costs to provide fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services, and maintenance and operation of any real property or other tangible property with an estimated useful life of five or more years 637
6 SECTION III

DESCRIPTION AND ESTIMATED

COSTS OF PUBLIC FACILITIES AND

SERVICES

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com
that is owned by the City. The Services Special Taxes within CFD No. 109 have been established to pay for these public services at approximately $744 per single family detached residence, $718 per single family detached cluster unit, and $718 per single family attached townhome unit per year. These amounts are subject to change based on the actual need that arises as development progresses within CFD No. 109, and shall also be subject to an annual increase as specified in Section C.2 of the Rate and Method of Apportionment (defined herein).
638
7 SECTION IV

BONDED INDEBTEDNESS AND

INCIDENTAL EXPENSES

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

IV BONDED INDEBTEDNESS AND INCIDENTAL EXPENSES
A Projected Bond Sales
The maximum authorized bonded indebtedness for CFD No. 109 is $50,000,000. It is anticipated that CFD No. 109 will sell one or more series of Bonds, as determined necessary and appropriate by Council, as development progresses within CFD No. 109.

B Incidental Bond Issuance Expenses to be Included in the Proposed Bonded Indebtedness
Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the estimated costs of construction or acquisition of buildings, or both; acquisition of land, rights-of-way, water, sewer, or other capacity or connection fees; satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, engineering, inspection, legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district estimated to be due and payable within two years of issuance of the bonds; election costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel and the City's general counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. For the Bonds proposed to be issued by CFD No. 109, the reserve requirement is estimated at approximately seven percent of the principal amount of Bonds, capitalized interest is estimated at approximately five percent of the principal amount of Bonds, and all other incidental bond issuance expenses are estimated at approximately three percent of the principal amount of Bonds. Actual bond issuance expenses, including the amount of Bond funded capitalized interest, may vary from the above estimates.

C Incidental Expenses to be Included in the Annual Levy of Special Taxes Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to pay, in whole or part, the costs of providing public facilities, services and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the costs of planning and designing public facilities to be financed, including the costs of environmental evaluations of those public facilities; the costs associated with the creation of the district, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the district; any other expenses incidental to the construction, completion, and inspection of the authorized work; and the costs associated with the retirement of existing bonded indebtedness. While the actual costs of administering CFD No. 109 may vary, it is anticipated that the amount of Special Taxes which can be collected will be sufficient to fund at least $40,000 in annual administrative expenses, which shall also be subject to an annual increase of two (2%) annually.
639
8 SECTION V

RATE AND METHOD OF

APPORTIONMENT

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

V RATE AND METHOD OF APPORTIONMENT
All of the property located within CFD No. 109, unless exempted by law or by the Rate and Method of Apportionment (defined below), shall be taxed for the purpose of funding public facilities and services authorized to be financed by CFD No. 109. Pursuant to Section 53325.3 of the Act, the tax imposed “is a special tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property.” The special tax “may be based on benefit received by parcels of real property, the costs of making authorized facilities or authorized services available to each parcel or other reasonable basis as determined by the legislative body,” although the special tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution.

The rate and method of apportionment of the special tax (the "Rate and Method of Apportionment") proposed to be levied within CFD No. 109 is described in Exhibit B to the Resolution of Intention. This proposed Rate and Method of Apportionment, also provided herein as Appendix A, provides information sufficient to allow each property owner within CFD No. 109 to estimate the maximum annual Special Tax he or she will be required to pay.

Sections A through D below provide additional information on the Rate and Method of Apportionment.

A Explanation for Special Tax Apportionment
When a CFD is formed, a special tax may be levied on each parcel of taxable property within the CFD to pay for the construction, acquisition and rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by a CFD. This special tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis.

When more than one type of land use is present within a CFD, several criteria may be considered when apportioning the special tax. Generally, criteria based on building square footage, acreage, and land use are selected, and categories based on such criteria are established to differentiate between parcels of property. These categories are a direct result of the projected product mix and are reflective of the proposed land use types within that CFD. Specific special tax levels are assigned to each land use class, with all parcels within a land use class assigned the same special tax rate.

The Act does not require that special taxes be apportioned to individual parcels based on benefit received. However, in order to ensure fairness and equity, benefit principles have been incorporated in establishing the Special Tax rates for CFD No. 109.

The major assumption inherent in the Special Tax rates set forth in the Rate and Method of Apportionment is that the level of benefit received from the proposed public facilities and services is a function of land use and/or product type. This assumption is borne out 640
9 SECTION V

RATE AND METHOD OF

APPORTIONMENT

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com
through an examination of commonly accepted statistical measures for public facility usage.

For example, in measuring average weekday vehicle trip-ends, the Institute of Transportation Engineer's Trip Generation manual identifies land use as the primary determinant of trip-end magnitude. Larger residential dwelling units typically generate a greater number of trip-ends than do smaller residential dwelling units, and therefore, will tend to receive more benefit from road grading, road landscaping and road improvements.

Drainage and flood control requirements generally vary with the amount of impervious ground cover per parcel. It follows that large homes situated on large lots have more impervious ground cover which will create more drainage flows than that of smaller homes situated on smaller lots.

In addition, sewer treatment costs are based on plant capacity to treat Biochemical Oxygen Demand (“BOD”), Suspended Solids (“SS”), and the flow rate. Other variables for water and sewer requirements include storage and fire flow requirements, as well as the number of bathrooms and fixture units in the home and the population of the household, which tends to vary directly with the size of the dwelling unit.

In addition, larger buildings typically generate a greater number of “person hours,” or the number of hours per week that residents associated with a specific type of land use could potentially use park and recreation facilities, or require the need for the proposed public services.

Therefore, Special Tax rates have been established for residential and non-residential land use classes for CFD No. 109. In addition, in order to ensure fairness, the Special Tax rates are uniformly applied within each land use class. The Special Tax for a parcel of Residential Property in CFD No. 109 will vary directly based on the type of use and the amount of Residential Floor Area on such parcel. The Special Tax for Non-Residential Property, if any, in CFD No. 109 will vary directly with the acreage of such parcel.

Based on the types of public facilities and services that are proposed for CFD No. 109 and the factors described above, the Special Taxes assigned to Developed Properties are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in CFD No. 109 can be considered fair and reasonable.

B Maximum Facilities Special Tax
Table 1 within the Rate and Method of Apportionment lists the Assigned Facilities Special Tax that may be levied on each Assessor’s Parcel classified as Developed Property within CFD No. 109 to fund the Special Tax Requirement for Facilities. The Facilities Special Tax for an Assessor’s Parcel of Developed Property cannot exceed the rates shown in such Table 1, except when the Backup Facilities Special Tax is applied as discussed in Section C below. In addition, the Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association 641
10 SECTION V

RATE AND METHOD OF

APPORTIONMENT

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com
Property shall range from $28,860 per Acre to $70,530 per Acre, as identified in Table 3 within the Rate and Method of Apportionment, based on the location of such Assessor’s Parcel.

C Backup Facilities Special Tax
Pursuant to the Rate and Method of Apportionment, the Maximum Facilities Special Tax for each Assessor’s Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Facilities Special Tax or (ii) the amount derived by application of the Backup Facilities Special Tax. The Backup Facilities Special Tax for an Assessor's Parcel of Developed Property shall range from $28,860 per Acre to $70,530 per Acre, as identified in Table 2 within the Rate and Method of Apportionment, based on the location of such Assessor’s Parcel, or such lower amount as determined pursuant to Section C.1.a.(3) of the Rate and Method of Apportionment.

D Maximum Services Special Tax
Table 4 within the Rate and Method of Apportionment lists the Fiscal Year 2022-2023 Maximum Services Special Tax that may be levied against Developed Property within CFD No. 109 to fund the Special Tax Requirement for Services. On each July 1, commencing July 1, 2023, the Maximum Services Special Tax shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. No Services Special Tax shall be levied on Undeveloped Property, Taxable Public Property, Taxable Property Owner Association Property, or Public Property and Property Owner Association Property in CFD No. 109. Refer to Section C.2 of the Rate and Method of Apportionment for further details on the Services Special Tax.

E Accuracy of Information
In order to establish the Maximum Special Tax rates for CFD No. 109 as set forth in the Rate and Method of Apportionment, DTA has relied on information including, but not limited to, absorption, land-use types, building square footage, and net taxable acreage provided to it by others. DTA has not independently verified such data and disclaims responsibility for the impact of inaccurate data, if any, on the Rate and Method of Apportionment for CFD No. 109, including the inability to meet the financial obligations within CFD No. 109.
642
11 SECTION VI

BOUNDARIES OF THE CFD

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

VI BOUNDARIES OF THE CFD
The boundaries of CFD No. 109 include all land on which the Special Taxes may be levied.

A reduced scale map showing the boundaries of CFD No. 109 is provided herein as Appendix B. A full-scale map is on file with the City Clerk of the City and was recorded on April 20, 2022 in Book 90 of Maps of Assessment and Community Facilities Districts at

Page 20 ends

Fontana City CouncilJune 14, 2022

Fontana City Council
June 14, 2022