Fontana City Council
June 14, 2022

County of San Bernardino.
643
12 SECTION VII

GENERAL TERMS AND

CONDITIONS

City of Fontana May 20, 2022
Community Facilities District No. 109 (Narra Hills)

www.FinanceDTA.com

VII GENERAL TERMS AND CONDITIONS
A Substitution of Facilities and Services
The descriptions of the public facilities and services, as set forth herein, are general in their nature. The Local Agencies will determine the final nature, location, and costs of facilities and services upon the preparation of final plans and specifications. The final plans may show substitutes, in lieu of modifications to the proposed work in order to accomplish the work of improvement, and any such substitution shall not be a change or modification in the proceedings as long as the public facilities and services provide a service substantially similar to that as set forth in this Report.

B Appeals and Interpretations
Pursuant to Section G of the Rate and Method of Apportionment, 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 Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, a cash refund shall not be made (except for the last year of levy), but the amount 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 days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided 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 relative 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 decision shall be final and binding as to all persons.

C Prepayment of Special Tax
The Facilities Special Tax applicable to an Assessor’s Parcel in CFD No. 109 may be prepaid according to the prepayment provisions identified in Section H of the Rate and Method of Apportionment. The Services Special Tax may not be prepaid. 644

APPENDIX A

City of Fontana
Community Facilities District No. 109
(Narra Hills)

RATE AND METHOD OF

APPORTIONMENT

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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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City of Fontana March 28, 2022
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, 647

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. 648

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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City of Fontana March 28, 2022
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, 650

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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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 655

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

656

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 657

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 658

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
659

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:

660

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 661

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 662

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, 663

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
664

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:

665

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:______________ ________ 666

B

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.

667

APPENDIX B

City of Fontana
Community Facilities District No. 109
(Narra Hills)

BOUNDARY MAP
668
669

5000 BIRCH STREET, SUITE 3000
NEWPORT BEACH, CA 92660
PHONE (800) 969-4DTA
Public Finance
Public-Private Partnerships
Development Economics
Clean Energy Bonds
www.FinanceDTA.com
670

4130-9010-6420.4

JOINT COMMUNITY FACILITIES AGREEMENT

by and among

CITY OF FONTANA

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

and

SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT

Dated as of _____________ 1, 2022

671

1 4130-9010-6420.4

JOINT COMMUNITY FACILITIES AGREEMENT
THIS JOINT COMMUNITY FACILITIES AGREEMENT (this “Facilities Agreement”), dated as of _____________ 1, 2022, is by and among the CITY OF FONTANA, a general law city organized and existing under the laws of the State of California (the “City”), CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and the SAN BERNARDINO COUNTY FLOOD CONTROL DISTRICT, a flood control district organized and existing under the laws of the State of California (the “Flood Control District”).

W I T N E S S E T H:

WHEREAS, the City Council of the City (the “City Council”) has, pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982 (the “Act”), established the Community Facilities District;
WHEREAS, pursuant to the Act, the proceedings of the City Council and an election held within the Community Facilities District, the Community Facilities District is authorized to issue special tax bonds (the “Bonds”) secured by special taxes (the “Special Taxes ”) levied within the Community Facilities District to finance certain public facilities (the “Facilities”); WHEREAS, the Facilities proposed to be financed by the Community Facilities District include certain Facilities to be owned and operated by the City (the “City Facilities”) , certain Facilities to be owned and operated by the Flood Control District (the “Flood Control District Facilities”) and certain Facilities to be owned and operated by certain other public agencies (the “Other Agency Facilities”);
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 faci lities 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 o r 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 purs uant to said Section 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, the City Council and the Board of Supervisors of the Flood Control District have each adopted a resolution declaring that such a joint agreement would be beneficial to the residents of that entity;
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WHEREAS, LS-FONTANA LLC (the “Developer”) is developing the property within the boundaries of the Community Facilities District;
WHEREAS, development of such property will require the acquisition, construction and installation of certain Flood Control District Facilities; WHEREAS, in order to provide for the acquisition, construction and installation of such Flood Control District Facilities, the Flood Control District and the Developer are entering into an Acquisition and Funding Agreement (the “Acquisition Agreement”), pursuant to which the Developer will acquire, construct and install, or cause to be acquired, constructed and instal led, certain of the Flood Control District Facilities and, upon satisfaction of the conditions specified therein, the Flood Control District will acquire and take title to such Flood Control District Facilities and that the Developer will be paid the purchase price thereof from proceeds of Special Taxes or Bonds (collectively, “District Proceeds”) made available for such purpose by the Community Facilities District; and
WHEREAS, the City, the Community Facilities District and the Flood Control District desire to enter into this Facilities Agreement in accordance with Sections 53316.2, 53316.4 and 53316.6 of the Act in order to provide for the financing of the Flood Control District Facilities with District Proceeds;
NOW, THEREFORE, for and in co nsideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:

Section 1. Issuance of Bonds. (a) It is anticipated that the Community Facilities District will issue Bonds to finance the acquisition, construction and installation of the City Facilities, the Flood Control District Facilities and the Other Agency Facilities. The City Council, acting as the legislative body of the Community Facilities District, shall, in its sole discretion, determine whether, when, under what conditions and to what extent Bonds shall be issued to finance the acquisition, construction and installation of the City Facilities, the Flood Control District Facilities or the Other Agency Facilities , or any combination thereof. In no event shall the Flood Control District have any right to compel the Community Facilities District to issue Bonds to finance the acquisition, construction and installation of Flood Control District Facilities or to disburse Bond proceeds to pay the costs of the acquisition, construction and installation of Flood Control District Facilities.
(b) It is anticipated that the Community Facilities Distric t may ma ke proceeds of Special Taxes available to finance the acquisition, construction and installation of the City Facilities, the Flood Control District Facilities and the Other Agency Facilities. The City Council, acting as the legislative body of the Communit y Facilities District, shall, in its sole discretion, determine whether, when, under what conditions and to what extent any such Special Tax proceeds shall be made available to finance the acquisition, construction and installation of the City Facilities, the Flood Control District Facilities or the Other Agency Facilities, or any combination thereof. In no event shall the Flood Control District have any right to compel the Community Facilities District to make proceeds of Special Taxes available to finance the acquisition, construction and installation of Flood Control District Facilities or to disburse such Special Tax 673

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proceeds to pay the costs of the acquisition, construction and installation of Flood Control District Facilities.

Section 2. Flood Control District Facilities. (a) The Flood Control District Facilities, including any real or tangible property that is to be purchased, constructed, expanded or rehabilitated, are described in Exhibit A attached hereto. (b) It is anticipated that the Community Facilities District will make District Proceeds available to finance the acquisition, construction and installatio n of the Flood Control District Facilities. If the Community Facilities District makes District Proceeds available for such purpose, the Community Facilities District shall notify the Flood Control District of the amount of such District Proceeds available for such purpose within 15 days of such District Proceeds becoming so available. The Community Facilities District makes no representation that, if District Proceeds are made available to finance the acquisition, construction and installation of the Flood Control District Facilities, such District Proceeds will be sufficient to finance the acquisition, construction and installation of all of the Flood Control District Facilities, and neither the City nor the Community Facilities District shall have any liability to the Flood Control District if such District Proceeds are insufficient for such purpose. If the Community Facilities District determines not to make District Proceeds available to finance the acquisition, construction and installation of the Flood Control District Facilities, neither the City nor the Community Facilities District shall have any obligation to provide any amounts to finance or pay the costs of the acquisition, construction and installation of the Flood Control District Facilities.

Section 3. Disbursements. (a) District Proceeds available for the acquisition, construction and installation of the Flood Control District Facilities shall be deposited in a special account (howsoever denominated, the “Flood Control District Facilities Account”), which (i) prior to the issuance of Bonds, is to be established and held by or on behalf of the Community Facilities District, and (ii) upon the issuance of Bonds is to be established and held under the Indenture pursuant to which the Bonds are issued. Moneys on deposit in the Flood Control District Facilities Account shall be invested and disbursed at the direction of the Community Facilities District. (b) To the extent that moneys are available therein , the Community Facilities District shall cause disbursements to be made from the Flood Control District Facilities Account from time to time to pay the costs of the acquisition, construction and installation of the Flood Control District Facilities upon submission of a written request of the Flood Control District stating (i) the name and address of the person to whom payment is to be made, (ii) the amount to be paid, (iii ) that an obligation in such amount has been i ncurred by the Flood Control District , (iv) the purpose for which the obliga tion to be paid was incurred, (v ) that each item of the obligation to be paid constitutes a cost of the Flood Control District Facilities, (vi) that the obligation to be paid has not been the subject of a prior Flood Control District request for disbursement from the Flood Control District Facilities Account, (vii) that each portion of the Flood Control District Facilities for which payment is requested was constructed under the direction and supervision, or under the au thority of, the Flood Control District or was constructed as if it had been constructed under the direction and supervision, or under the authority of, the Flood Control District, and (viii) that each portion of the Flood Control District Facilities for wh ich payment is requested is being acquired and purchased in accordance the provisions of the Act and the Acquisition Agreement. 674

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The Community Facilities District shall process in a timely manner written requests for disbursements received from the Flood Control District that conform to the requirements hereof.

Section 4. Construction, Ownership and Maintenance of City Facilities and Flood Control District Facilities. (a) The Flood Control District shall have no responsibility for the acquisition, construction and installation of the City Facilities. The City Facilities shall be and remain the sole and separate property of the City and shall be operated, maintained and utilized by the City. The Flood Control District shall not have any ownership interest in the City Facilities, and the Flood Control District shall have no responsibility for the operation, maintenance or utilization of the City Facilities.
(b) Neither the City nor the Community Facilities District shall have any responsibility for the acquisition, construction and installation of the Flood Control District Facilities or the Other Agency Facilities. The Flood Control District Facilities shall be and remain the sole and separate property of the Flood Control District and shall be operated, maintained and utilized by the Flood Control District, and the Other Agency Facilities financed by the Community Facilities District for a local agency shall be and remain the sole and separate property of such local agency and shall be operated, maintained and utilized by such local agency. Neither the City nor the Community Facilities District shall have any ownership interest in the Flood Control District Facilities or the Other Agency Facilities, and neither the City nor the Community Facilities District shall have any responsibility for the operation, maintenance or utilization of the Flood Control District Facilities or the Other Agency Facilities.

Section 5. Tax Matters. In connection with the issuance of any Bonds, a portion of the proceeds of which are to be made available to finance the acquisition, construction and installation of the Flood Control District Facilities, the Flood Control District shall execute and deliver such certifications and agreements as may be reasonably required in order for bond counsel to conclude that interest on such Bonds will be excluded from gross income under Section 103 of the Internal Revenue Code of 1986.

Section 6. Indemnification. (a) The City agrees to protect, indemnify, defend and hold the Flood Control District, and its officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and court costs which the Flood Control District , or its officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the Flood Control District, or its officers, employees or agents, or any combination thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the City Facilities. If the City fails to do so, the Flood Control District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the City.

No indemnification is required to be paid by the City for any claim, loss or expense arising from the willful misconduct or negligence of the Flood Control District, or its officers, employees or agents.
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(b) The Flood Control District agrees to protect, indemnify, defend and hold the City and the Community Facilities District, and their respe ctive officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and court costs which the City or the Community Facilities District, or their respective officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the City or the Community Facilities District, or their respective officers, employees or agents, or any combina tion thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the Flood Control District Facilities. If the Flood Control District fails to do so, the City and the Community Facilities District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the Flood Control District.

No indemnification is required to be paid by the Flood Control District for any claim, loss or expense arising from the willful misconduct or negligence of the City or the Community Facilities District, or their respective officers, employees or agents.

Section 7. Nature of Agreement; Allocation of Special Taxes . This Facilities Agreement shall constitute a joint community facilities agreement entered into pursuant to Sections 53316.2, 53316.4 and 53316.6 of the Act. The e ntire amount of the proceeds of the Special Taxes shall be allocated and distributed to the City.

Section 8. Limitation of Rights to Parties . Nothing in this Facilities Agreement expressed or implied is intended or shall be construed to give to any person other th an the City, the Community Facilities District and the Flood Control District any legal or equitable right, remedy or claim under or in respect of this Facilities Agreement or any covenant, condition or provision herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Community Facilities District and the Flood Control District.

Section 9. Notices. All written notices to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City:

City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services 676

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If to the Community Facilities District:

City of Fontana Community Facilities
District No. 109 (Narra Hills)
c/o City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services If to the Flood Control District:

San Bernardino County Flood Control District
825 East Third Street, Room 122
San Bernardino, CA 92415-0835
Attention: Chief Flood Control Engineer
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (d) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (e) if given by any other means, upon de livery at the address specified in this Section.

Section 10. Waiver. The failure by any party hereto to insist on the strict performance of any of the provisions of this Facilities Agreement by any other party hereto, or the failure by any party hereto to exercise its rights upon the default of any other party hereto, shall not constitute a waiver of such party’s rig ht to insist and demand strict compliance thereafter by such party with the provisions of this Facilities Agreement.

Section 11. Severability. If any part of this Facilities Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Facilities Agreement shall be given effect to the fullest extent reasonably possible.

Section 12. Successors. This Facilities Agreement shall be binding upon and inure to the benefit of the successors of the parties hereto.

Section 13. Amendments. This Facilities Agreement may be amended, supplemented or otherwise modified only by an instrument in writing executed and delivered by each of the parties hereto.

Section 14. Attorneys’ Fees . In the event of litigation arising from this Facilities Agreement, each party shall bear its own costs, including attorneys’ fees and expenses; provided, however, that this Section shall not apply such costs that are subject to the indemnification provisions of Section 6 of this Facilities Agreement.
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Section 15. Governing Laws ; Jurisdiction. (a) This Facilities Agreement shall be governed and construed in accordance with the laws of the State of California. (b) In the event of any legal action to enforce or interpret this Facilities Agreement, the sole and exclusive venue shall be a court of competent jurisdiction located in San Bernardino County, California, and the parties hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding California Code of Civil Procedure Section 394. Furthermore, the parties specifically agree to waive any and all rights to request that an action be transferred for trial to another county.

Section 16. Electronic Signatures. Each of the parties hereto agrees that the electronic signature of a party to this Facilities Agreement shall be as valid as an original signature of such party and shall be effective to bind such party to this Facilities Agreement. For purposes hereof (a) “electronic signature” means a manually signed original signature that is then transmi tted by electronic means, and (b) “transmitted by electronic means” means sent in the form of a facsimile or sent via the internet as a portable document format (“pdf”) or other replicating image attached to an electronic mail or internet message.

Section 17. Counterparts. This Facilities Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
[Remainder of Page Intentionally Left Blank]

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[Signature Page 1 to Facilities Agreement]
4130-9010-6420.4

IN WITNESS WHEREOF, the parties hereto have executed this Facilities Agreement as of the date first written above.

CITY OF FONTANA

By:

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 109
(NARRA HILLS)

By:

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[Signature Page 2 to Facilities Agreement]
4130-9010-6420.4

SAN BERNARDINO COUNTY FLOOD

CONTROL DISTRICT

By:

Curt Hagman, Board Chairman

Dated:

Signed and Certified that a Copy of this
Document has been Delivered to the
Chairman of the Board

By:

Lynna Monell, Clerk of the Board

FOR COUNTY USE ONLY

Approved as to Legal Form Reviewed for Contract Compliance Reviewed/Approved by District

Sophie A. Akins, Deputy County Counsel Andy Silao, P.E., Chief – Contracts Brendon Biggs, Chief Flood Control Engineer Date Date Date
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A-1
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EXHIBIT A

DESCRIPTION OF FLOOD CONTROL DISTRICT FACILITIES
The types of facilities to be owned and operated by the Flood Control District and financed by the District Proceeds are flood control facilities consisting of the relocation and construction of the Hawker Crawford flood control channel in the vicinity of the Community Facilities District in accordance with plans and specifications approved by the Flood Control District under the Flood Control District’s File 1-806/2.04 and Permit No. P-12019118. 681

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JOINT COMMUNITY FACILITIES AGREEMENT

by and among

CITY OF FONTANA

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)

and

WEST VALLEY WATER DISTRICT

Dated as of June 1, 2022

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JOINT COMMUNITY FACILITIES AGREEMENT
THIS JOINT COMMUNITY FACILITIES AGREEMENT (this “Facilities Agreement”), dated as of June 1, 2022, is by and among the CITY OF FONTANA, a general law city organized and existing under the laws of the State of California (the “City”), CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”) , and the WEST VALLEY WATER DISTRICT , a municipal water district organized and existing under the laws of the State of California (the “Water District”).

W I T N E S S E T H:

WHEREAS, the City Council of the Ci ty (the “City Council”) has, pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982 (the “Act”), established the Community Facilities District;
WHEREAS, pursuant to the Act, the proceedings of the City Council and an election held within the Community Facilities District, the Community Facilities District is authorized to issue special tax bonds (the “Bonds”) secured by special taxes (the “Special Taxes”) levied within the Community Facilities District to finance certain public facilities (the “Facilities”); WHEREAS, the Facilities proposed to be financed by the Community Facilities District include certain Facilities to be owned and operated by the City (the “City Facilities”) , certain Facilities to be owned and operated by the Water District (the “Water District Facilities”) and certain Facilities to be owned and operated by certain other public agencies (the “Other Agency Facilities”);
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 a greement 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 res olution 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 Section 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, the City Council and the Board of Directors of the Water District have each adopted a resolution declaring that such a joint agreement would be beneficial to the residents of that entity;
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WHEREAS, LS-FONTANA LLC (the “Developer”) is developing the property within the boundaries of the Community Facilities District;
WHEREAS, development of such property will require the acquisition, construction and installation of certain Water District Facilities;
WHEREAS, in order to provide for the acquisition, construction and installation of such Water District Facilities, the Water District and the Developer are entering into an Acquisition and Funding Agreement (the “Acquisition Agreement”), pursuant to which the Developer will acquire, construct and install, or cause to be acquired, constructed and installed, certain of the Water District Facilities and, upon satisfaction of the conditions specified therein, the Water District will acquire and take title to such Water District Facilities and that the Developer will be paid the purchase price thereof from proceeds of Special Taxes or Bonds ( collectively, “District Proceeds”) made available for such purpose by the Community Facilities District; and WHEREAS, the City, the Community Facilities District and the Water District desire to enter into this Facilities Agreement in accordance with Sections 53316.2, 53316.4 and 53316.6 of the Act in order to provide for the financing of the Water District Facilities with District Proceeds; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:

Section 1. Issuance of Bonds. (a) It is anticipated that the Community Facilities District will issue Bonds to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities and the Other Agency Facilities . The City Council , acting as the legislative body of the Community Facilities District, shall, in its sole discr etion, determine whether, when, under what conditions and to what extent Bonds shall be issued to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities or the Other Agency Facilities, or any combination thereof. In no event shall the Water District have any right to compel the Community Facilities District to issue Bonds to finance the acquisition, construction and installation of Water District Facilities or to disburse Bond proceeds to pay the costs of the acquisition, construction and installation of Water District Facilities. (b) It is anticipated that the Community Facilities Distric t may make proceeds of Special Taxes available to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities and the Other Agency Facilities. The City Council, acting as the legislative body of the Community Facilities District, shall, in its sole discretion, determine whether, when, under what conditions and to what extent any such Special Tax proceeds shall be made available to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities or the Other Agency Facilities, or any combination thereof. In no event shall the Water District have any right to compel the Community Facilities District to make proceeds of Special Taxes available to finance the acquisition, construction and installation of Water District Facilities or to disburse such Special Tax proceeds to pay the costs of the acquisition, construction and installation of Water District Facilities. 684

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Section 2. Water District Facilities. (a) The Water District Facilities, including any real or tangible property that is to be purchased, constructed, expanded or rehabilitated, are described in Exhibit A attached hereto.
(b) It is anticipated that the Community Facilities District will make District Proceeds available to finance the acquisition, construction and installatio n of the Water District Facilities.

If the Community Facilities District makes District Proceeds available for such purpose , the Community Facilities District shall notify the Water District of the amount of such District Proceeds available for such purpos e within 15 days of such District Proceeds becoming so available. The Community Facilities District makes no representation that, if District Proceeds are made available to finance the acquisition, construction and installation of the Water District Facilities, such District Proceeds will be sufficient to finance the acquisition, construction and installation of all of the Water District Facilities, and neither the City nor the Community Facilities District shall have any liability to the Water District if such District Proceeds are insufficient for such purpose. If the Community Facilities District determines not to make District Proceeds available to finance the acquisition, construction and installation of the Water District Facilities, neither the City nor the Community Facilities District shall have any obligation to provide any amounts to finance or pay the costs of the acquisition, construction and installation of the Water District Facilities.

Section 3. Disbursements. (a) District Proceeds available for the acquisition, construction and installation of the Water District Facilities shall be deposited in a special account (howsoever denominated, the “Water District Facilities Account”), which (i) prior to the issuance of Bonds, is to be established and held by or on behalf of the Community Facilities District , and (ii) upon the issuance of Bonds is to be established and held under the Indenture pursuant to which the Bonds are issued. Moneys on deposit in the Water District Facilities Account shall be invested and disbursed at the direction of the Community Facilities District. (b) To the extent that moneys are available therein, the Community Facilities District shall cause disbursements to be made from the Water District Facilities Account from time to time to pay the costs of the acquisition, construction and installation of the Water District Facilities upon submission of a written request of the Water District stating (i) the name and address of the person to whom payment is to be made, (ii) the amount to be paid, (iii) that an obligation in such amount has been i ncurred by the Water District, (iv) the purpose for which the obliga tion to be paid was incurred, (v ) that each item of the obligation to be paid constitutes a cost of the Water District Facilities, (vi) that the obligation to be paid has not been the subject of a prior Water District request for disbursement from the Water District Facilities Account, (vii) that each portion of the Water District Facilities for which payment is requested was constructed under the direction and supervision, or under the authority of, the Water District or was constructed as if it had been constructed under the direction and supervision, or under the authority of, the Water District, and (viii) that each portion of the Water District Facilities for which payment is requested is being acquired and purchased in accordance the provisions of the Act and the Acquisition Agreement.

The Community Facilities District shall process in a timely manner written requests for disbursements received from the Water District that conform to the requirements hereof. 685

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Section 4. Construction, Ownership and Maintenance of City Facilities and Water District Facilities. (a) The Water District shall have no responsibility for the acquisition, construction and installation of the City Facilities. The City Facilities shall be and remain the sole and separate property of the City and shall be operated, maintained and utilized by the City. The Water District shall not have any ownership interest in the City Facilities, and the Water District shall have no responsibility for the operation, maintenance or utilization of the City Facilities. (b) Neither the City nor the Community Facilities District shall have any responsibility for the acquisition, construction and installation of the Water District Facilities or the Other Agency Facilities. The Water District Facilities shall be and remain the sole and separate property of the Water District and shall be operated, maintained and utilized by the Water District, and the Other Agency Facilities financed by the Community Facilities District for a local agency shall be and remain the sole and separate property of such local agency and shall be operated, maintai ned and utilized by such local agency. Neither the City nor the Community Facilities District shall have any ownership interest in the Water District Facilities or the Other Agency Facilities, and neither the City nor the Community Facilities District shall have any responsibility for the operation, maintenance or utilization of the Water District Facilities or the Other Agency Facilities.

Section 5. Tax Matters. In connection with the issuance of any Bonds, a portion of the proceeds of which are to be made available to finance the acquisition, construction and installation of the Water District Facilities, the Water District shall execute and deliver such certifications and agreements as may be reasonably required in order for bond counsel to conclude that interest on such Bonds will be excluded from gross income under Section 103 of the Internal Revenue Code of 1986.

Section 6. Indemnification. (a) The City agrees to protect, indemnify, defend and hold the Water District, and its officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and cour t costs which the Water District, or its officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the Water District, or its officers, employees or agents, or any combination thereo f, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the City Facilities. If the City fails to do so, the Water District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the City.

No indemnification is required to be paid by the City for any claim, loss or expense arising from the willful misconduct or negligence of the Water District, or its officers, employees or agents.
(b) The Water District agrees to protect, indemnify, defend and hold the City and the Community Facilities District, and their respe ctive officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and court costs which the City or the Community Facilities District, or their respective officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the City or the Community Facilities 686

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District, or their respective officers, employees or agents, or any combina tion thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the Water District Facilities. If the Water District fails to do so, the City and the Community Facilities District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the Water District.

No indemnification is required to be paid by the Water District for any claim, loss or expense arising from the willful misconduct or negligence of the City or the Community Facilities District, or their respective officers, employees or agents.

Section 7. Nature of Agreement; Allocation of Special Taxes . This Facilities Agreement shall constitute a joint community facilities agreement entered into pursuant to Sections 53316.2, 53316.4 and 53316.6 of the Act. The entire amount of the proceeds of the Special Taxes shall be allocated and distributed to the City.

Section 8. Limitation of Rights to Parties . Nothing in this Facilities Agreement expressed or implied is intended or shall be construed to give to any person other than the City, the Community Facilities District and the Water District any legal or equitable right, remedy or claim under or in resp ect of this Facilities Agreement or any covenant, condition or provision herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Community Facilities District and the Water District.

Section 9. Notices. All written notices to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City:

City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services If to the Community Facilities District:

City of Fontana Community Facilities
District No. 109 (Narra Hills)
c/o City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services 687

6 4125-2753-4901.3

If to the Water District:

West Valley Water District
Post Office Box 920
Rialto, CA 92377-0920
Attention: General Manager
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (d) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, o r (e) if given by any other means, upon delivery at the address specified in this Section.

Section 10. Severability. If any part of this Facilities Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Faciliti es Agreement shall be given effect to the fullest extent reasonably possible.

Section 11. Successors. This Facilities Agreement shall be binding upon and inure to the benefit of the successors of the parties hereto.

Section 12. Amendments. This Facilities Agreement may be amended, supplemented or otherwise modified only by an instrument in writing executed and delivered by each of the parties hereto.

Section 13. Governing Laws. This Facilities Agreement shall be governed and construed in accordance with the laws of the State of California.

Section 14. Counterparts. This Facilities Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
688

7 4125-2753-4901.3

IN WITNESS WHEREOF, the parties hereto have executed this Facilities Agreement as of the date first written above.

CITY OF FONTANA

By:

Matthew C. Ballantyne,
City Manager

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 109
(NARRA HILLS)

By:

Matthew C. Ballantyne,
City Manager of the City of Fontana

WEST VALLEY WATER DISTRICT

By:

Shamindra Manbahal,
General Manager

689

A-1
4125-2753-4901.3

EXHIBIT A

DESCRIPTION OF WATER DISTRICT FACILITIES
The types of facilities to be owned and operated by the Water District and financed by the District Proceeds are water distribution facilities, together with appurtenances and appurtenant work. 690
4147-7227-9861.2

CONSENT AND WAIVER

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)
City Council
City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Members of the City Council:

Pursuant to a petition of Arroyo Cap II-6, LLC, a Delaware limited liability company (the “Landowner”), the City Council (the “City Council”) of the City of Fontana (the “City”) has commenced proceedings under the Mello-Roos Community Facilities Act of 1982 (the “Act”) to establish a community facilities district proposed to be named City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”) and to authorize the levy of a special tax (the “Special Tax”) therein and to authorize special tax bonds for the Community Facilities District. This is a consent and waiver with respect to certain procedural matters under the Act, and the undersigned hereby states as follows:

1. Landowner; Property. This Consent and Waiver is submitted by the Landowner, as the legal owner of the real property described in Exhibit A attached hereto and made a part hereof (the “Property”). All of the Property is proposed to be included within the boundaries of the Community Facilities District. The Property consists of approximately 73.25 acres and comprises 100% of the land within the Community Facilities District not proposed to be exempt from the Special Tax.

2. Proceedings. The Landowner hereby acknowledges and agrees that the City Council has, pursuant to a petition of the Landowner, commenced proceedings pursuant to the Act to establish the Community Facilities District, to authorize the levy of the Special Tax in the Community Facilities District to finance certain public facilities and services, and to authorize special tax bonds for the Community Facilities District in an amount not to exceed $50,000,000.

The public facilities proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Facilities” on Exhibit B attached hereto and the services proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Services” on Exhibit B attached hereto. The City Council has fixed June 14, 2022 at 7:00 p.m. or as soon thereafter as the City Council may reach the matter, at 8353 Sierra Avenue, Fontana, California, as the time and place where the City Council will conduct public hearings on the establishment of the Community Facilities District and the proposed debt issue of the Community Facilities District, 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 observe such public hearings and offer public comment would be as prescribed in the notice and agenda for such City Council meeting. The Landowner hereby acknowledges and agrees that notices of the hearings were published by the City Clerk on May 6, 2022 in the Fontana Herald 691
2 4147-7227-9861.2
News, a newspaper of general circulation published in the area of the Community Facilities District. The Landowner hereby acknowledges and agrees that it had actual notice of the public hearings, that notice of such hearings has been given in accordance with the Act, that it waives any and all defects (if any) in such notice, and that it waives any rights it may have to make any protest or complaint or to undertake any legal action challenging the adequacy of such notice.

3. Ownership of Property; No Registered Voters; Landowner Election. The Landowner represents and warrants to the City that it is the legal owner of the fee interest in all of the Property and that no other person or entity is the legal owner of all or any portion of the fee interest in any of the Property. To the best of the Landowner’s knowledge, there are no registered voters residing within the boundaries of the Property as of the date hereof, and there have been fewer than 12 registered voters residing therein during each of the 90 days preceding the date of this Consent and Waiver.

The Landowner hereby acknowledges and agrees that, pursuant to Section 53326(b) of the Act, if fewer than 12 persons have 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 of the Community Facilities District, the vote on the proposition to incur bonded indebtedness of the Community Facilities District, to levy the Special Tax in the Community Facilities District and to establish an appropriations limit for the Community Facilities District shall be by the landowners of the Community Facilities District and each person who is the owner of land at the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that he or she owns within the Community Facilities District not exempt from the Special Tax. The Landowner hereby acknowledges and agrees that if, as anticipated, said public hearings are closed on the date hereof, said vote shall, pursuant to Section 53326(b) of the Act, be by the landowners of the Community Facilities District.

4. Request. The Landowner hereby requests that the special election to be held under the Act on the proposition to incur bonded indebtedness of the Community Facilities District, to levy the Special Tax in the Community Facilities District and to establish an appropriations limit for the Community Facilities District be conducted using mailed or hand-delivered ballots, that such ballots be opened and canvassed at such election, and that the results of such election be certified at the same meeting of the City Council as the public hearings on the establishment of the Community Facilities District and the proposed issuance of bonded indebtedness of the Community Facilities District, or as soon thereafter as possible.

5. Consent and Waiver. The Landowner hereby acknowledges and agrees that if the special election to be held under the Act on the proposition to incur bonded indebtedness of the Community Facilities District, to levy the Special Tax in the Community Facilities District and to establish an appropriations limit for the Community Facilities District is held on June 14, 2022, said election would be held less than 90 days after the anticipated close of the June 14, 2022 public hearings on the establishment of the Community Facilities District and the proposed issuance of bonded indebtedness of the Community Facilities District. The Landowner hereby acknowledges and agrees that, pursuant to Section 53326 of the Act, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of such special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing 692
3 4147-7227-9861.2
with Section 53345 of the Act), may be waived with the unanimous consent of the qualified electors of the Community Facilities District and the concurrence of the election official conducting the election. The Landowner hereby consents to the waiver of, and hereby waives, 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), including, but not limited to, all notices with respect thereto (published, mailed or otherwise to be given), any voter qualification requirements, any time limitations, any requirements as to form or content of election materials, all publication requirements, all pre-election, election or voting procedures (other than the right to vote) and all canvass, recount and tie vote procedures. The Landowner hereby consents to the holding of said special election on June 14, 2022.

The Landowner hereby acknowledges and agrees that (a) as the vote is to be by the landowners of the Community Facilities District, pursuant to Section 53327(b) of the Act, any impartial analysis, arguments or rebuttals, if any, with respect to the special election on the proposition to incur bonded indebtedness of the Community Facilities District, to levy the Special Tax in the Community Facilities District and to establish an appropriations limit for the Community Facilities District may be waived with the unanimous consent of all the landowners of the Community Facilities District, and (b) pursuant to Section 53326 of the Act, with the concurrence of the election official for said special election, any requirement pertaining to the conduct of said special election may be waived with the unanimous consent of all the qualified electors of the Community Facilities District. The Landowner hereby acknowledges and agrees that said special election is to be held without the preparation of an impartial analysis and arguments and rebuttals, if any, as permitted by Section 53327(b) of the Act. The Landowner hereby consents to the waiver of, and hereby waives, the requirement in Section 53327(a) that there be prepared and included in the ballot material provided to each voter an impartial analysis pursuant to Section 9160, 9280 or 9500 of the California Elections Code, and arguments and rebuttals, if any, pursuant to Sections 9162 to 9167, inclusive, and Section 9190 of the California Elections Code or pursuant to Sections 9281 to 9287, inclusive, and Section 9295 of the California Elections Code, or pursuant to Sections 9501 to 9507, inclusive, of the California Elections Code, or pursuant to other provisions of law applicable to other special districts as appropriate.

The Landowner hereby represents that it has obtained such information with respect to the consents and waivers contained herein as it has deemed necessary or appropriate. The Landowner hereby confirms and represents that it is fully informed with respect to such consents and waivers and fully understands the consequences thereof.

The Landowner hereby waives any and all defects in notice or procedure in any proceedings to establish the Community Facilities District, to levy the Special Tax in the Community Facilities District and to authorize special tax bonds for the Community Facilities District, or in the conduct of the election, whether known or unknown (other than, in the case of the election, the right to have ballots accurately counted), and the Landowner hereby represents that the election is being expedited pursuant to this Consent and Waiver, at the particular request of the Landowner. The Landowner further waives its right to make any protest or complaint or to undertake any legal action challenging the validity of the election. 693
694
A-1
4147-7227-9861.2

EXHIBIT A

DESCRIPTION OF PROPERTY
The Property consists of the following San Bernardino County Assessor Parcel Numbers:
0226-075-13
0226-075-17
0226-075-18
0226-075-26
0226-075-27
0226-075-28
0226-075-29
0226-075-36
0226-075-39
0226-075-49
0226-075-50
0226-075-51
The Property constitutes all of the property included within the boundaries of the Community Facilities District. The boundaries of the Community Facilities District are depicted in the attached map.
695
696
B-1
4147-7227-9861.2

EXHIBIT B

FACILITIES AND SERVICES TO BE FINANCED
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, 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.
697
4142-3213-2149.2

LETTER OF CREDIT AGREEMENT
by and between

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)
and

LS-FONTANA LLC
Dated as of June 1, 2022
City of Fontana
Community Facilities District No. 109
(Narra Hills)
698

TABLE OF CONTENTS
Page
i
4142-3213-2149.2
ARTICLE I DEFINITIONS ................................................................................................. 2 Section 1.1. Definitions...................................................................................................... 2 ARTICLE II SECURITY FOR PAYMENT OF SPECIAL TAX ........................................ 6 Section 2.1. Developer Letter of Credit ............................................................................. 6 Section 2.2. Transferred Parcel Letter of Credit ................................................................ 8 Section 2.3. No Contest to Foreclosure ........................................................................... 10 ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................. 12 Section 3.1. Representations and Warranties of the Developer ....................................... 12 Section 3.2. Representations and Warranties of the Community Facilities District ........ 13 ARTICLE IV MISCELLANEOUS ...................................................................................... 14 Section 4.1. Binding on Successors and Assigns ............................................................. 14 Section 4.2. Amendments ................................................................................................ 14 Section 4.3. Waivers ........................................................................................................ 14 Section 4.4. Third Party Beneficiaries ............................................................................. 14 Section 4.5. Notices ......................................................................................................... 14 Section 4.6. Attorneys’ Fees ............................................................................................ 15 Section 4.7. Jurisdiction and Venue ................................................................................. 15 Section 4.8. Governing Law ............................................................................................ 15 Section 4.9. Usage of Words............................................................................................ 15 Section 4.10. Counterparts ............................................................................................... 15 699
4142-3213-2149.2

LETTER OF CREDIT AGREEMENT
THIS LETTER OF CREDIT AGREEMENT (this “Agreement”), dated as of June 1, 2022, is by and between the CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), and LS-FONTANA LLC, a limited liability company organized and existing under the laws of the State of Delaware (the “Developer”).

W I T N E S S E T H :

WHEREAS, the Community Facilities District has been established under the provisions of the Mello-Roos Community Facilities Act of 1982;
WHEREAS, it is anticipated that, in order to finance certain public facilities, the Community Facilities District will issue bonds (the “Bonds”) secured by a special tax (the “Special Tax”) levied within the Community Facilities District;
WHEREAS, the Developer is the owner of the property within the Community Facilities District, the Developer 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; and 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 the Special Tax levied on certain of such undeveloped property within the Community Facilities District; NOW, THEREFORE, for and in consideration of the mutual premises and covenants contained herein, the parties hereto agree as follows:
700
2 4142-3213-2149.2

ARTICLE I

DEFINITIONS
Section 1.1. Definitions. All terms defined in the Indenture shall have the same meaning in this Agreement, except as indicated. Unless the context otherwise requires, the terms defined in this Article I shall have the meanings herein specified:
“Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” means this Letter of Credit Agreement, dated as of June 1, 2022, by and between the Community Facilities District and the Developer, as originally executed or as the same may be amended from time to time in accordance with its terms. “Annual Debt Service” means, for each Bond Year, the sum of (a) the interest due on the outstanding Bonds in such Bond Year, assuming that the outstanding Bonds are retired as scheduled (including by reason of mandatory sinking fund redemptions), and (b) the principal amount of the outstanding Bonds due in such Bond Year (including any mandatory sinking fund redemptions due in such Bond Year).
“Bond Year” has the meaning ascribed thereto in the Indenture. “Bonds” means the City of Fontana Community Facilities District No. 109 (Narra Hills) Special Tax Bonds issued under the Indenture.
“City” means the City of Fontana, a general law city organized and existing under the laws of the State, and its successors.
“Closing Date” means the date on which the Bonds are issued and delivered to the initial purchaser thereof.
“Community Facilities District” means the City of Fontana Community Facilities District No. 109 (Narra Hills), a community facilities district organized and existing under the laws of the State, and its successors.
“Developer” means LS-FONTANA LLC, a limited liability company organized and existing under the laws of the State of Delaware, and its successors and assigns. “Developer Letter of Credit” means an irrevocable letter of credit that (a) is issued by a financial institution authorized to do business in the State of California, the long-term unsecured obligations of which, at the time of delivery of such letter of credit, are rated not less than “Aa2” by Moody’s or not less than “A” by S&P, (b) has terms and provisions that make it suitable for the 701
3 4142-3213-2149.2
purposes of, and facilitate its use in accordance with, the provisions of the Indenture and Section

2.1 hereof, which terms and provisions are reasonably acceptable to the Community Facilities District, (c) is delivered to and accepted by the Trustee pursuant to the Indenture and Section 2.1(a) hereof, and (d) is for a term of at least one year; provided, however, that upon the acceptance by the Trustee of a Substitute Letter of Credit in substitution of the Developer Letter of Credit in accordance with the Indenture and Section 2.1(e) hereof, such term shall mean such Substitute Letter of Credit.
“Developer Secured Parcels” means, as of any date, all Remaining Parcels that are owned by any of the Developer or an Affiliate thereof, and all Transferred Parcels, excluding Secured Transferred Parcels.
“Hazardous Material” means any hazardous or toxic substance, material or waste which is regulated by any local governmental authority, the State or the United States Government, including, without limitation, any material or substance which is (a) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321), (b) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (c) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., (d) petroleum, or (e) asbestos.
“Indenture” means the indenture, by and between the Community Facilities District and the Trustee, pursuant to which the Bonds are issued, as originally executed or as the same may from time to time be supplemented or amended by any supplemental indenture entered into pursuant to the provisions thereof or, if such Indenture has been discharged in accordance with its terms, the indenture, trust agreement, fiscal agent agreement or similar instrument, regardless of title, pursuant to which bonds, notes or other evidences of indebtedness of the Community Facilities District have been issued and are outstanding, as originally executed or as the same may from time to time be supplemented or amended pursuant to the provisions thereof. “Letter of Credit Provider” means (a) with respect to the Developer Letter of Credit, the issuer of the Developer Letter of Credit, and its successors and assigns, or the issuer of a Substitute Letter of Credit substituted for the Developer Letter of Credit in accordance with the Indenture and Section 2.1(e) hereof, and (b) with respect to a Transferred Parcel Letter of Credit, the issuer of such Transferred Parcel Letter of Credit, and its successors and assigns, or the issuer of a Substitute Letter of Credit substituted for such Transferred Parcel Letter of Credit in accordance with the Indenture and Section 2.2(e) hereof.
“Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year, including the Bond Year the calculation is made.
“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Property” means the real property located within the Community Facilities District. 702
4 4142-3213-2149.2
“Rate and Method” means the Rate and Method of Apportionment for City of Fontana Community Facilities District No. 109 (Narra Hills) approved by the qualified electors of the Community Facilities District.
“Rating Downgrade” means, with respect to the Developer Letter of Credit or a Transferred Parcel Letter of Credit, that the rating of the long-term unsecured obligations of the issuer thereof has been reduced to less than “A3” by Moody’s or to less than “A-” by S&P. “Remaining Parcels” means, as of any date, all parcels of Property, excluding any of such parcels for which final inspection approval has been given by the City (or for which a certificate of occupancy has been issued by the City) on or prior to such date. “Required Letter of Credit Amount” means, with respect to any parcel or parcels within the Community Facilities District, for each Bond Year, an amount equal to 200% of the Share of MADS that would be applicable to such parcel or parcels for the Fiscal Year ending in such Bond Year. Notwithstanding the above, the initial Required Letter of Credit Amount will be based on an estimate.
“Secured Transferred Parcel” means a Transferred Parcel for which a Transferred Parcel Letter of Credit has been delivered to and accepted by the Trustee pursuant to the Indenture and Section 2.2(a) hereof.
“Share of MADS” means, with respect to any property within the Community Facilities District, the share of Maximum Annual Debt Service allocable to such property, which share shall be equal to Maximum Annual Debt Service multiplied by a fraction, the numerator of which is the amount of the Special Tax to be levied on such property in the then current Fiscal Year pursuant to the Rate and Method (assuming that no capitalized interest is available to pay any portion of debt service on the Bonds), and the denominator of which is the total amount of the Special Tax to be levied on all property within the Community Facilities District in the then current Fiscal Year pursuant to the Rate and Method (assuming that no capitalized interest is available to pay any portion of debt service on the Bonds); provided, however, that, for purposes of determining Share of MADS, any property that, as of the date of such determination, is Undeveloped Property (as defined in the Rate and Method) for which final inspection approval has been given by the City (or for which a certificate of occupancy has been issued by the City) shall be deemed to be Developed Property (as defined in the Rate and Method) for purposes of calculating the amount of the Special Tax to be levied on such property in the then current Fiscal Year pursuant to the Rate and Method.
“Special Tax” means the special tax described and defined in the Rate and Method as the “Facilities Special Tax” approved by the qualified electors of the Community Facilities District. “State” means the State of California.
“Substitute Letter of Credit” means one or more irrevocable letters of credit, each of which (a) with respect to a Substitute Letter of Credit replacing the Developer Letter of Credit, is delivered to and accepted by the Trustee pursuant to the Indenture and Section 2.1(e) hereof, or, with respect to a Substitute Letter of Credit replacing a Transferred Parcel Letter of Credit, is delivered to and accepted by the Trustee pursuant to the Indenture and Section 2.2(e) hereof, (b) 703
5 4142-3213-2149.2
is issued by a financial institution authorized to do business in the State of California, the long- term unsecured obligations of which, at the time of delivery of such letter of credit, are rated not less than “A” by Moody’s and not less than “A” by S&P, (c) has the same material terms and provisions as the Developer Letter of Credit or Transferred Parcel Letter of Credit, as applicable, that it is replacing, and (d) is for a term of at least one year. “Transferred Parcel” means, as of any date, a Remaining Parcel that is subject to the Special Tax and is owned by a Person other than any of the Developer or an Affiliate thereof. “Transferred Parcel Letter of Credit” means an irrevocable letter of credit that (a) is issued by a financial institution authorized to do business in the State of California, the long-term unsecured obligations of which, at the time of delivery of such letter of credit, are rated not less than “A” by Moody’s and not less than “A” by S&P, (b) has terms and provisions that make it suitable for the purposes of, and facilitate its use in accordance with, the provisions of the Indenture and Section 2.2 hereof, which terms and provisions are reasonably acceptable to the Community Facilities District, (c) is delivered to and accepted by the Trustee pursuant to the Indenture and Section 2.2(a) hereof, and (d) is for a term of at least one year; provided, however, that upon the acceptance by the Trustee of a Substitute Letter of Credit in substitution of such Transferred Parcel Letter of Credit in accordance with the Indenture and Section 2.2(e) hereof, such term shall mean such Substitute Letter of Credit.
“Trustee” means the commercial bank or trust company initially designated as trustee under the Indenture, and any successor thereto permitted under the Indenture. 704
6 4142-3213-2149.2

ARTICLE II

SECURITY FOR PAYMENT OF SPECIAL TAX
Section 2.1. Developer Letter of Credit. (a) Delivery of the Developer Letter of Credit.

If, at the time of the public posting of the official statement or other offering document for the Bonds, the Share of MADS allocable to Developer Secured Parcels will equal or exceed 9% of the then estimated Maximum Annual Debt Service, the Developer shall, on or before such posting date, deliver to the Trustee a Developer Letter of Credit, accompanied by one or more opinions of counsel reasonably satisfactory to the Trustee and the Community Facilities District addressed to the Trustee and the Community Facilities District to the effect, singly or together, that the Developer Letter of Credit is a legal, valid and binding obligation of the Letter of Credit Provider with respect thereto, enforceable against such Letter of Credit Provider in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to such Letter of Credit Provider and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The amount available under such Developer Letter of Credit shall be at least equal to the Required Letter of Credit Amount for Developer Secured Parcels for the first full Bond Year commencing after the Closing Date. (b) Compliance with the Indenture . The Community Facilities District shall comply with the provisions of the Indenture applicable to the Developer Letter of Credit and shall use its best efforts to cause the Trustee to comply with such provisions of the Indenture. (c) Rating Downgrade . The Developer shall either (i) require the Letter of Credit Provider that issues the Developer Letter of Credit to covenant in a written agreement to give notice to the Developer, the Community Facilities District and the Trustee of a Rating Downgrade with respect to such Letter of Credit Provider, or (ii) provide for an alternative method of providing notice to the Developer, the Community Facilities District and the Trustee of a Rating Downgrade with respect to such Letter of Credit Provider acceptable to the Community Facilities District. The Developer shall provide notice to the Community Facilities District and the Trustee of a Rating Downgrade with respect to the Letter of Credit Provider that issued the Developer Letter of Credit immediately upon receiving notice thereof.
(d) Recalculation of Amount of Developer Letter of Credit . The Developer shall, no later than August 1 of each year (commencing on the August 1 immediately following the Closing Date), deliver to the Community Facilities District a certification as to which parcels within the Community Facilities District constitute Developer Secured Parcels as of such August 1, together with written evidence of the matters so certified (including, but not limited to, copies or adequate descriptions of relevant final inspection approvals received (or certificates of occupancy issued) during the twelve months immediately preceding such August 1), which certification and written evidence shall be in form and substance reasonably satisfactory to the Community Facilities District; provided, however, that the Developer shall have no obligation to deliver such certification and written evidence after the first time that such certification and written evidence 705
7 4142-3213-2149.2
demonstrates that the Share of MADS allocable to the Developer Secured Parcels is less than 9% of Maximum Annual Debt Service.

The Community Facilities District shall, no later than August 15 of each year, deliver to the Developer a draft Written Certificate of the Community Facilities District specifying the Required Letter of Credit Amount for Developer Secured Parcels for the Bond Year commencing on the immediately succeeding September 2; provided, however, that the Community Facilities District’s obligation to deliver such Written Certificate shall be subject to the Community Facilities District’s receiving from the Developer, no later than August 1 of such year, the certification and written evidence required to be provided by the Developer to the Community Facilities District pursuant to the preceding paragraph. The Required Letter of Credit Amount shall be calculated based on the parcels that constitute Developer Secured Parcels as of such August 1. Within five days of receipt of a copy of such draft Written Certificate, the Developer may provide evidence to the Community Facilities District that such calculation of the Required Letter of Credit Amount is incorrect. If, in its reasonable determination, the Community Facilities District agrees with the Developer that such calculation is incorrect, the Community Facilities District shall revise such Written Certificate of the Community Facilities District so as to correct the Required Letter of Credit Amount specified therein. No sooner than six days and no later than ten days after delivering to the Developer such draft Written Certificate of the Community Facilities District, the Community Facilities District shall deliver to the Trustee (with a copy to the Developer) the final Written Certificate of the Community Facilities District (revised, if necessary, in accordance with the preceding sentence) specifying the Required Letter of Credit Amount for Developer Secured Parcels for the Bond Year commencing on the immediately succeeding September 2. If the amount available under the Developer Letter of Credit is greater than the Required Letter of Credit Amount as specified in such Written Certificate, the Community Facilities District shall direct the Trustee to, in accordance with the terms of the Indenture and the Developer Letter of Credit, cause the available amount under the Developer Letter of Credit to be reduced, on or after September 2 of the following Bond Year, to an amount equal to the Required Letter of Credit Amount as specified in such Written Certificate. If the Required Letter of Credit Amount as specified in such Written Certificate is less than 9% of Maximum Annual Debt Service, the Community Facilities District shall direct the Trustee to, in accordance with the terms of the Indenture and the Developer Letter of Credit, surrender the Developer Letter of Credit to the Letter of Credit Provider with respect thereto.
(e) Substitute Letter of Credit. If at any time (i) the Developer has provided a Substitute Letter of Credit which satisfies the requirements specified in the definition thereof, (ii) the amount available to be drawn under such Substitute Letter of Credit is at least equal to the Required Letter of Credit Amount for Developer Secured Parcels for the Bond Year in which such Substitute Letter of Credit is delivered, and (iii) such Substitute Letter of Credit is accompanied by one or more opinions of counsel reasonably satisfactory to the Trustee and the Community Facilities District addressed to the Trustee and the Community Facilities District to the effect, singly or together, that the Substitute Letter of Credit is a legal, valid and binding obligation of the provider thereof, enforceable against the provider thereof in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to the provider thereof and by general principles of equity 706
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(regardless of whether such enforceability is considered in a proceeding in equity or at law), the Community Facilities District shall deliver to the Trustee (with a copy to the Developer) a Written Request of the Community Facilities District directing the Trustee to, upon receipt of such Substitute Letter of Credit, accept such Substitute Letter of Credit in substitution of the Developer Letter of Credit then held by the Trustee and surrender the Developer Letter of Credit being replaced to the Letter of Credit Provider that issued such Developer Letter of Credit. (f) No Reduction, Credit or Cure. The Developer hereby acknowledges and agrees that the amount received pursuant to any draw on the Developer Letter of Credit shall in no way reduce, constitute a credit, or cure any delinquency, in respect of the amount of any Special Tax levied on any Developer Secured Parcel or on any other parcel in the Community Facilities District.

Section 2.2. Transferred Parcel Letter of Credit. (a) Delivery of a Transferred Parcel Letter of Credit. If at any time (i) the owner of a Transferred Parcel makes available a Transferred Parcel Letter of Credit which satisfies the requirements specified in the definition thereof, (ii) the amount available to be drawn under such Transferred Parcel Letter of Credit is at least equal to the Required Letter of Credit Amount for such Transferred Parcel for the Bond Year in which such Transferred Parcel Letter of Credit is delivered, (iii) such Transferred Parcel Letter of Credit is accompanied by one or more opinions of counsel reasonably satisfactory to the Trustee and the Community Facilities District addressed to the Trustee and the Community Facilities District to the effect, singly or together, that the Transferred Parcel Letter of Credit is a legal, valid and binding obligation of the Letter of Credit Provider with respect thereto, enforceable against such Letter of Credit Provider in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to such Letter of Credit Provider and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), and (iv) the owner of such Transferred Parcel requests that the Community Facilities District deliver to the Trustee such Transferred Parcel Letter of Credit and such opinion, the Community Facilities District shall promptly deliver to the Trustee (A) such Transferred Parcel Letter of Credit, (B) such opinion, (C) a Written Request of the Community Facilities District (with a copy to the Developer and such owner) directing the Trustee to accept such Transferred Parcel Letter of Credit, identifying the Transferred Parcel to which such Transferred Parcel Letter of Credit is to apply and specifying the Required Letter of Credit Amount for such Transferred Parcel, and (D) a Written Certificate of the Community Facilities District (with a copy to the Developer) specifying the revised Required Letter of Credit Amount for Developer Secured Parcels for the Bond Year in which such Transferred Parcel Letter of Credit is delivered. (b) Compliance with the Indenture . The Community Facilities District shall comply with the provisions of the Indenture applicable to Transferred Parcel Letters of Credit and shall use its best efforts to cause the Trustee to comply with such provisions of the Indenture. (c) Rating Downgrade. The Developer shall, or shall cause the owner of each Secured Transferred Parcel to, require the Letter of Credit Provider that issued the Transferred Parcel Letter of Credit for such Secured Transferred Parcel to covenant in a written agreement to give notice to the Developer, the owner of such Secured Transferred Parcel, the Community Facilities District 707
9 4142-3213-2149.2
and the Trustee of a Rating Downgrade with respect to such Letter of Credit Provider. The Developer shall provide notice to the Community Facilities District and the Trustee of a Rating Downgrade with respect to each Letter of Credit Provider that issued a Transferred Parcel Letter of Credit immediately upon receiving notice thereof.
(d) Recalculation of Amount of a Transferred Parcel Letter of Credit . The Developer shall cause each owner of a Secured Transferred Parcel to deliver to the Community Facilities District, no later than August 1 of each year (commencing with the August 1 immediately following the delivery of the Transferred Parcel Letter of Credit for such Secured Transferred Parcel), a certification as to which parcels within the Community Facilities District, as of such August 1, constitute Secured Transferred Parcels owned by such owner or Affiliates of such owner, together with written evidence of the matters so certified (an owner title guarantee or copy of a grant deed showing ownership for every parcel within the Community Facilities District owned by such owner or Affiliates of such owner shall be sufficient for such purpose), which certification and written evidence shall be in form and substance reasonably satisfactory to the Community Facilities District. In addition, the Developer shall cause such owner to deliver to the Community Facilities District, no later than August 1 of each year, a certification as to which parcels within the Community Facilities District, as of such August 1, constitute Secured Transferred Parcels owned by such owner or Affiliates of such owner, together with written evidence of the matters so certified (including, but not limited to, copies or adequate descriptions of relevant final inspection approvals received (or certificates of occupancy issued) during the twelve months immediately preceding such August 1).

The Community Facilities District shall, no later than August 15 of each year, deliver to each owner of a Secured Transferred Parcel a draft Written Certificate of the Community Facilities District specifying the Required Letter of Credit Amount for such Secured Transferred Parcel for the Bond Year commencing on the immediately succeeding September 2; provided, however, that the Community Facilities District’s obligation to deliver such Written Certificate shall be subject to the Community Facilities District’s receiving, no later than August 1 of such year, the certification and written evidence with respect to such Secured Transferred Parcel required to be provided pursuant to the preceding paragraph. The Required Letter of Credit Amount shall be calculated based on the parcels that constitute Secured Transferred Parcels owned by such owner or Affiliates of such owner as of such August 1. Within five days of receipt of such draft Written Certificate, the owner of such Secured Transferred Parcel may provide evidence to the Community Facilities District that the calculation of the Required Letter of Credit Amount for Secured Transferred Parcels owned by such owner or Affiliates of such owner is incorrect. If, in its reasonable determination, the Community Facilities District agrees with such owner or the Developer that such calculation is incorrect, the Community Facilities District shall revise such Written Certificate of the Community Facilities District so as to correct the Required Letter of Credit Amount specified therein. No sooner than six days and no later than ten days after delivering to such owner such draft Written Certificate of the Community Facilities District, the Community Facilities District shall deliver to the Trustee (with a copy to such owner) the final Written Certificate of the Community Facilities District (revised, if necessary, in accordance with the preceding sentence) specifying the Required Letter of Credit Amount for such Secured Transferred Parcels for the Bond Year commencing on the immediately succeeding September 2. If the amount available under the Transferred Parcel Letter of Credit for such Secured Transferred Parcels is greater than the Required Letter of Credit Amount as specified in such Written Certificate, the 708
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Community Facilities District shall direct the Trustee to, in accordance with the terms of the Indenture and such Transferred Parcel Letter of Credit, cause the available amount under such Transferred Parcel Letter of Credit to be reduced, on or after September 2 of the following Bond Year, to an amount equal to the Required Letter of Credit Amount for such Secured Transferred Parcels as specified in such Written Certificate. If the Required Letter of Credit Amount as specified in such Written Certificate is less than 9% of Maximum Annual Debt Service, the Community Facilities District shall direct the Trustee to, in accordance with the terms of the Indenture and such Transferred Parcel Letter of Credit, surrender such Transferred Parcel Letter of Credit to the Letter of Credit Provider with respect thereto. (e) Substitute Letter of Credit. If at any time (i) the owner of a Secured Transferred Parcel has provided a Substitute Letter of Credit which satisfies the requirements specified in the definition thereof in the Indenture, (ii) the amount available to be drawn under such Substitute Letter of Credit is at least equal to the Required Letter of Credit Amount for the Secured Transferred Parcels secured thereby for the Bond Year in which such Substitute Letter of Credit is delivered, and (iii) such Substitute Letter of Credit is accompanied by one or more opinions of counsel reasonably satisfactory to the Trustee and the Community Facilities District addressed to the Trustee and the Community Facilities District to the effect, singly or together, that the Substitute Letter of Credit is a legal, valid and binding obligation of the provider thereof, enforceable against the provider thereof in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to the provider thereof and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), the Community Facilities District shall deliver to the Trustee (with a copy to such owner) a Written Request of the Community Facilities District directing the Trustee to, upon receipt of such Substitute Letter of Credit, accept such Substitute Letter of Credit in substitution of the Transferred Parcel Letter of Credit then held by the Trustee securing the Secured Transferred Parcels owned by such owner and Affiliates of such owner and surrender such Transferred Parcel Letter of Credit being replaced to the Letter of Credit Provider that issued such Transferred Parcel Letter of Credit. (f) No Reduction, Credit or Cure. The Developer hereby acknowledges and agrees that the amount received pursuant to any draw on a Transferred Parcel Letter of Credit shall in no way reduce, constitute a credit, or cure any delinquency, in respect of the amount of any Special Tax levied on the Secured Transferred Parcel secured thereby or on any other parcel in the Community Facilities District.
(g) Third Party Beneficiaries. The owners of the Secured Transferred Parcels are third party beneficiaries of this Section.

Section 2.3. No Contest to Foreclosure. The Developer, on behalf of itself and its successors and assigns to any portion of the Property while the same remains categorized as Developer Secured Parcels, agrees and covenants that it will not in any action or proceeding challenge the validity, enforceability or constitutionality of the proceedings by which the Community Facilities District was formed and the Special Tax levied, the lien securing repayment 709
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of the Special Tax or the applicability thereof to such Developer Secured Parcels, provided that such Special Tax is levied in accordance with the Rate and Method. 710
12 4142-3213-2149.2

ARTICLE III

REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Developer. The Developer makes the following representations and warranties for the benefit of the Community Facilities District:
(a) Organization. The Developer represents and warrants that the Developer is a limited liability company organized, validly existing and in good standing under the laws of the State of Delaware, is authorized to conduct business and is in good standing under the laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated. (b) Authority. The Developer represents and warrants that the Developer has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered on behalf of the Developer. (c) Binding Obligation . The Developer represents and warrants that this Agreement is a valid and binding obligation of the Developer and is enforceable against the Developer in accordance with its terms, except as limited by applicable reorganization, insolvency, liquidation, readjustment of debt, moratorium or other similar laws affecting the enforcement of rights of creditors generally as such laws may be applied in the event of a reorganization, insolvency, liquidation, readjustment of debt or other similar proceeding of or moratorium applicable to the provider thereof and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(d) Environmental Matters Relating to Property. The Developer represents and warrants that neither the Developer, nor any subcontractor, agent or employee thereof, has used, generated, manufactured, procured, stored, released, discharged or disposed of (whether accidentally or intentionally) at any time on or prior to the date hereof any Hazardous Material on, under or in the Property, or any structure, fixtures, equipment, or other objects thereon, or transported (whether accidentally or intentionally) any Hazardous Material to or from the Property, or any structure, fixtures, equipment, or other objects thereon, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material.

The Developer represents and warrants that there is not present on, under or in the Property or any structure, fixtures, equipment, or other objects thereon, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, and (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions.
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The Developer represents and warrants that the Developer has not received notice of, and, to the best of the Developer’s knowledge, there is not, any proceeding or formal inquiry by any governmental authority, body or agency with respect to the presence of Hazardous Materials on, under or in the Property, or any structure, fixtures, equipment, or other objects thereon, or the migration thereof from or to other property.

The Community Facilities District shall not be required to issue Bonds on any Closing Date unless the Developer makes, on and as of such Closing Date, representations and warranties similar in all material respects to those set forth above.

Section 3.2. Representations and Warranties of the Community Facilities District.

The Community Facilities District makes the following representations and warranties for the benefit of the Developer:
(a) Authority. The Community Facilities District represents and warrants that the Community Facilities District has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered on behalf of the Community Facilities District.
(b) Binding Obligation . The Community Facilities District represents and warrants that this Agreement is a valid and binding obligation of the Community Facilities District and is enforceable against the Community Facilities District in accordance with its terms.
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ARTICLE IV

MISCELLANEOUS
Section 4.1. Binding on Successors and Assigns. Neither this Agreement nor the duties and obligations of the Developer hereunder may be assigned to any Person without the written consent of the Community Facilities District, which consent shall not be unreasonably withheld or delayed. Neither this Agreement nor the duties and obligations of the Community Facilities District hereunder may be assigned to any Person, without the written consent of the Developer, which consent shall not be unreasonably withheld or delayed. The agreements and covenants included herein shall be binding on and inure to the benefit of any partners, permitted assigns, and successors-in-interest of the parties hereto.

Section 4.2. Amendments. This Agreement may be amended by an instrument in writing executed and delivered by the Community Facilities District and the Developer.

Section 4.3. Waivers. No waiver of, or consent with respect to, any provision of this Agreement by a party hereto shall in any event be effective unless the same shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

Section 4.4. Third Party Beneficiaries. The Trustee and the Owners of the Bonds are third party beneficiaries of this Agreement. As provided in Section 2.2(g) hereof, the owners of the Secured Transferred Parcels are third party beneficiaries of Section 2.2 hereof. No other person or entity shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than the Community Facilities District, the Developer, the Trustee, the Owners of the Bonds and the owners of the Secured Transferred Parcels, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

Section 4.5. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

Community Facilities District: City of Fontana Community Facilities District No. 109 (Narra Hills)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Management
Services
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Developer: LS-FONTANA LLC
7525 Irvine Center Dr., Suite 200
Irvine, California 92618
Attention: Shannon Whittaker, Senior Forward
Planner
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section.

Section 4.6. Attorneys’ Fees. If any action is instituted to interpret or enforce any of the provisions of this Agreement, the party prevailing in such action shall be entitled to recover from the other party thereto reasonable attorney’s fees and costs of such suit (including both prejudgment and postjudgment fees and costs) as determined by the court as part of the judgment.

Section 4.7. Jurisdiction and Venue. Each of the Community Facilities District and the Developer (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Agreement shall be brought in a state or local court in the County of San Bernardino or in the Courts of the United States of America in the district in which said county is located, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding, and (c) waives any objection that it may have to the laying of venue of any suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Each of the Community Facilities District and the Developer agrees that a final and non- appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 4.8. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State.

Section 4.9. Usage of Words. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.

Section 4.10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first hereinabove written.

CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 109
(NARRA IIILLS)
By:

Jessica Brown,
Chief Financial Officer, Management
Services of the City of Fontana

LS-FONTANA LLC,
a Delaware limited liability company
sv, T*
Tom Baine,
Division President
4142-3213-2149.2
16 715
4162-7921-4645.3

ACQUISITION AND FUNDING AGREEMENT
by and among

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)
and

CITY OF FONTANA
and

LS-FONTANA LLC
Dated as of June 1, 2022
City of Fontana
Community Facilities District No. 109
(Narra Hills)
Special Tax Bonds
716

TABLE OF CONTENTS
Page
i
4162-7921-4645.3
ARTICLE I DEFINITIONS .......................................................................................................... 3 Section 1.01. Definitions.................................................................................................... 3 ARTICLE II FUNDING PRIORITIES; CREDITS ....................................................................... 9 Section 2.01. Funding Priorities......................................................................................... 9 Section 2.02. Development Agreement Fee .................................................................... 10 Section 2.03. Payment of Permit Fees as Deposit ........................................................... 10 Section 2.04. Credits ........................................................................................................ 11 ARTICLE III ACQUISITION OF ACQUISITION FACILITIES .............................................. 12 Section 3.01. Acquisition of Acquisition Facilities ......................................................... 12 Section 3.02. Payment of Purchase Price......................................................................... 12 Section 3.03. Payments of Credit Amount....................................................................... 13 Section 3.04. Dedication of Property and Easements to City .......................................... 13 Section 3.05. Modifications to Segments and Acquisition Costs .................................... 14 ARTICLE IV CONSTRUCTION OF ACQUISITION FACILITIES ........................................ 15 Section 4.01. Preparation and Approval of Plans and Specifications .............................. 15 Section 4.02. Duty of Developer to Construct ................................................................. 15 Section 4.03. Public Works Requirements ...................................................................... 15 Section 4.04. Bonding Requirements............................................................................... 16 Section 4.05. Inspection; Completion of Construction .................................................... 17 Section 4.06. Maintenance of Acquisition Facilities; Warranties .................................... 17 Section 4.07. Insurance Requirements ............................................................................. 17 Section 4.08. Ownership of Acquisition Facilities .......................................................... 19 ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS;
INDEMNIFICATION ....................................................................................... 20 Section 5.01. Representations and Warranties of the Developer ..................................... 20 Section 5.02. Covenants of the Developer ....................................................................... 21 Section 5.03. Representations and Warranties of the Community Facilities District and the City .............................................................................................. 22 Section 5.04. Covenants of the Community Facilities District and the City ................... 23 Section 5.05. Indemnification .......................................................................................... 23 717

TABLE OF CONTENTS
(continued)
Page
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ARTICLE VI TERMINATION; DAMAGES ............................................................................. 25 Section 6.01. Termination by Agreement ........................................................................ 25 Section 6.02. Termination by City ................................................................................... 25 Section 6.03. Termination by Developer ......................................................................... 27 Section 6.04. Remedies in General; Damages Limited ................................................... 27 Section 6.05. Force Majeure ............................................................................................ 28 ARTICLE VII MISCELLANEOUS ............................................................................................ 30 Section 7.01. Developer as Independent Contractor ........................................................ 30 Section 7.02. Other Agreements ...................................................................................... 30 Section 7.03. Binding on Successors and Assigns ........................................................... 30 Section 7.04. Amendments .............................................................................................. 30 Section 7.05. Waivers ...................................................................................................... 30 Section 7.06. No Third-Party Beneficiaries ..................................................................... 30 Section 7.07. Notices ....................................................................................................... 30 Section 7.08. Attorneys’ Fees .......................................................................................... 31 Section 7.09. Jurisdiction and Venue ............................................................................... 31 Section 7.10. Governing Law .......................................................................................... 32 Section 7.11. Usage of Words.......................................................................................... 32 Section 7.12. Counterparts ............................................................................................... 32 EXHIBIT A ACQUISITION FACILITIES.............................................................................. A-1 EXHIBIT B FORM OF PAYMENT REQUEST ..................................................................... B-1 718
4162-7921-4645.3

ACQUISITION AND FUNDING AGREEMENT
THIS ACQUISITION AND FUNDING AGREEMENT (this “Acquisition Agreement”), dated as of June 1, 2022, is by and among the CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), the CITY OF FONTANA, a general law city organized and existing under the laws of the State of California (the “City”), and LS-FONTANA LLC, a limited liability company organized and existing under the laws of the State of Delaware (the “Developer”).

W I T N E S S E T H:

WHEREAS, the City Council of the City (the “City Council”) has, pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”), established the Community Facilities District;
WHEREAS, pursuant to the Act, the proceedings of the City Council and an election held within the Community Facilities District, the Community Facilities District is authorized to issue bonds (the “Bonds”) secured by a special tax (the “Special Tax”) levied within the Community Facilities District to finance certain public facilities; WHEREAS, the Community Facilities District will, upon satisfaction of the conditions and in accordance with the terms set forth in this Acquisition Agreement, purchase certain of such public facilities, described herein (the “Acquisition Facilities”), the City will take title thereto and the Developer will be paid from the proceeds of the Bonds for the costs of acquisition, construction and improvement of the Acquisition Facilities at the prices as determined as set forth herein; WHEREAS, the Bonds are to be issued pursuant to an indenture (the “Indenture”) to be entered into by the Community Facilities District and a commercial bank or trust company (the “Trustee”);
WHEREAS, pursuant to the Indenture, the Community Facilities District will establish or cause the Trustee to establish an acquisition account into which a portion of the proceeds of the Bonds will be deposited, which amounts will be used to finance the acquisition of the Acquisition Facilities;
WHEREAS, Section 53313.5 of the Act provides that a community facilities district may only finance the purchase of facilities whose construction has been completed, as determined by the legislative body, before the resolution of formation to establish the community facilities district is adopted pursuant to Section 53325.1 of the Act, except that a community facilities district may finance the purchase of facilities completed after the adoption of the resolution of formation if the facility was constructed as if it had been constructed under the direction and supervision, or under the authority of, the local agency that will own or operate the facility; WHEREAS, the Acquisition Facilities are to be acquired by the City under this Acquisition Agreement pursuant to the Act and, specifically, pursuant to the provisions of Section 53313.5 thereof; and
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WHEREAS, the Community Facilities District, the City and the Developer desire to provide for the priority in which proceeds of the 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;
NOW, THEREFORE, for and in consideration of the mutual premises and covenants contained herein, the parties hereto agree as follows:
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ARTICLE I

DEFINITIONS
Section 1.01. Definitions. All terms defined in the Indenture shall have the same meaning in this Acquisition Agreement, except as indicated. Unless the context otherwise requires, the terms defined in this Article I shall have the meanings herein specified:
“Acceptable Title” means title to land, or an easement therein, delivered free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether any such item is recorded or unrecorded, except those non-monetary items which are reasonably determined by the City not to interfere with the intended use of such land or easement and therefore are not required to be cleared from title.
“Acceptance Date” means (a) with respect to a Segment, either (i) the date that the full amount of the Purchase Price thereof is payable to the Developer pursuant to the terms hereof and of the Indenture, or (ii) if 90% of the Purchase Price of such Segment was paid to the Developer pursuant to Section 3.02(c) hereof, the date that the remaining 10% of the Purchase Price of such Segment is payable to the Developer pursuant to the terms hereof and of the Indenture, and (b) with respect to a Component, either (i) the date that the full Purchase Price of the last of the Segments included in such Component is payable to the Developer pursuant to the terms hereof and of the Indenture, or (ii) if 90% of the Purchase Price of such Segment was paid to the Developer pursuant to Section 3.02(c) hereof, the date that the remaining 10% of the Purchase Price of such Segment is payable to the Developer pursuant to the terms hereof and of the Indenture. “Acquisition Account” means the account by that name established under the Indenture, the amounts in which are to be applied to the payment of the Purchase Price of the Segments. “Acquisition Agreement” means this Acquisition and Funding Agreement, dated as of June 1, 2022, by and among the Community Facilities District, the City and the Developer, as originally executed or as the same may be amended from time to time in accordance with its terms. “Acquisition Cost” means, with respect to a Segment, the amount specified as the Acquisition Cost for such Segment in Exhibit A attached hereto, as the same may be modified by one or more supplements thereto entered into in accordance with Section 3.05 hereof. “Acquisition Facilities” means the public facilities described in Exhibit A attached hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, constituting Sections 53311 et seq. of the California Government Code.
“Actual Cost” means, with respect to a Segment, an amount equal to the sum of (a) the actual, reasonable cost of constructing such Segment, including labor, material and equipment costs, (b) the actual, reasonable cost of designing and preparing the Plans for such Segment, including engineering services provided in connection with designing and preparing such Plans, (c) the actual, reasonable cost of environmental evaluations required in the City’s reasonable determination specifically for such Segment, (d) the amount of any fees actually paid to governmental agencies in order to obtain permits, licenses or other necessary governmental 721
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approvals and reviews for such Segment, (e) the actual, reasonable cost for construction management services for such Segment, which cost shall not exceed 5% of the cost of constructing such Segment, as determined pursuant to clause (a) of this definition, (f) the actual, reasonable cost for professional services directly related to the construction of such Segment, including engineering, inspection, construction staking, materials testing and similar professional services, which costs shall not exceed 18% of the costs of constructing such Segment, as determined pursuant to clause (a) of this definition, (g) the actual, reasonable cost of any performance and maintenance bonds and insurance, including title insurance, required hereby for such Segment, and (h) the actual, reasonable cost of any real property or interest therein acquired from a party other than the Developer or an Affiliate thereof (including amounts advanced by the Developer to the City for such purpose), which real property or interest therein is either necessary for the construction of such Segment ( e.g., temporary construction easements, haul roads, etc.) or is required to be conveyed with such Segment in order to convey Acceptable Title thereto to the City or its designee, all as specified in a Payment Request that has been reviewed and approved by the City Engineer; provided, however, that (x) no item of cost relating to a Segment shall be included in more than one category of cost specified in clauses (a) through (h) of this definition, and (y) each item of cost shall include only amounts actually paid by the Developer to third parties, other than Affiliates of the Developer, and shall not include overhead or other internal expenses of the Developer.
“Administrative Expenses” has the meaning ascribed to that term in the Rate and Method. “Affiliate” of another Person means (a) each Person that, directly or indirectly, owns or controls, whether beneficially or as trustee, guardian, or other fiduciary, 50% or more of any class of equity securities of such other Person, and (b) each Person that controls, is controlled by or is under common control with or by such Person or any Affiliate of such Person. For the purpose of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.
“Aggregate Overage Amount” means, as of any date, the sum of the Overage Amounts for all Segments for which the Acceptance Date occurred on or before such date. “Aggregate Savings Amount” means, as of any date, the sum of the Savings Amounts for all Segments for which the Acceptance Date occurred on or before such date. “Authorized Representative” means, with respect to the Community Facilities District, the City Manager of the City and the Chief Financial Officer, Management Services, of the City, and any other Person designated as an Authorized Representative of the Community Facilities District in a Written Certificate of the Community Facilities District filed with the Trustee. “Bonds” means the City of Fontana Community Facilities District No. 109 (Narra Hills) Special Tax Bonds issued under the Indenture.
“City” means the City of Fontana, a general law city organized and existing under the laws of the State, and its successors.
“City Engineer” means the City Engineer of the City.
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“Closing Date” means the date on which the Bonds are issued and delivered to the initial purchaser thereof.
“Community Facilities District” means the City of Fontana Community Facilities District No. 109 (Narra Hills), a community facilities district organized and existing under the laws of the State, and its successors.
“Complete” means, with respect to a Segment, that the construction of such Segment (including all ancillary, non-essential items included in such Segment) by the Developer is, in the reasonable judgment of the City Engineer, in all respects complete. “Components” means the related groups of Segments identified as such and described in Exhibit A attached hereto; each Component is comprised of the Segments listed thereunder in Exhibit A.
“Conditions of Approval” means the conditions of approval of all land use entitlements approved by the City for the Property and the conditions of the subdivision improvement agreement or other agreement between the Developer and the City relating to the Property, which conditions the Developer must satisfy or cause to be satisfied in order to develop the Property. “Construction Account” means the account by that name established under the Indenture, the amounts in which are to be applied to the payment of the costs of the acquisition, construction and installation of the Construction Facilities.
“Construction Facilities” means the facilities authorized to be financed by the Community Facilities District, other than the Acquisition Facilities. “Credit Amount” means, as of any date, the remainder of (a) the Aggregate Savings Amount as of such date, minus (b) the aggregate amount paid to the Developer prior to such date pursuant to Section 3.03 hereof; provided, however, that in no event shall such Credit Amount exceed the remainder of (x) the Aggregate Overage Amount as of such date, minus (y) the aggregate amount paid to the Developer prior to such date pursuant to Section 3.03 hereof. “Deposit Account” means a separate account established by the City to be used exclusively for the deposit, holding and application of a category of Permit Fees and any amounts paid as a security deposit therefor, as contemplated by Section 2.03 hereof. “Developer” means LS-FONTANA LLC, a limited liability company organized and existing under the laws of the State of Delaware, and its successors and assigns. “Developer Representative” means the person or persons designated as such in a certificate signed by the Developer and delivered to the Community Facilities District and the Trustee, which certificate shall contain an original or specimen signature of each person so designated.
“Development Agreement” means the Development Agreement, dated February 26, 2019 for reference purposes, by and between the City, EPC Holdings 823 LLC, EPC Holdings 944 LLC, 723
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Roseville Investments, LLC, American Superior Land, LLC and RMD Inland Investors, LLC, as originally executed or as the same may be amended from time to time in accordance with its terms. “Development Agreement Fee” has the meaning ascribed to the term “Monarch Hill Development Agreement Fee” in the Development Agreement. “General Prevailing Wage Rates” means those rates as determined by the Director of the Department of Industrial Relations of the State of California. “Hazardous Material” means any hazardous or toxic substance, material or waste which is regulated by any local governmental authority, the State or the United States Government, including, without limitation, any material or substance which is (a) designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321), (b) defined as a “hazardous waste” pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903), (c) defined as a “hazardous substance” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., (d) petroleum, or (e) asbestos.
“Indenture” means the indenture, by and between the Community Facilities District and the Trustee, pursuant to which the Bonds are issued, as originally executed or as the same may from time to time be supplemented or amended by any supplemental indenture entered into pursuant to the provisions thereof or, if such Indenture has been discharged in accordance with its terms, the indenture, trust agreement, fiscal agent agreement or similar instrument, regardless of title, pursuant to which bonds, notes or other evidences of indebtedness of the Community Facilities District have been issued and are outstanding, as originally executed or as the same may from time to time be supplemented or amended pursuant to the provisions thereof. “Overage Amount” means, with respect to a Segment, the amount, if any, by which the Actual Cost of such Segment exceeds the Acquisition Cost of such Segment. “Payment Request” means the document to be provided by the Developer to substantiate the Purchase Price of one or more Segments, which shall be substantially in the form of Exhibit B attached hereto.
“Permit Fees” means, with respect to a Subject Unit, the Police Facilities Impact Fee, the Library Facilities Impact Fee, the Fire Facilities Impact Fee, the Public Facilities Impact Fee, the Municipal Services Impact Fee, the Traffic/Circulation Impact Fee, the Median Landscape Fee, the Park Development Fee, the Sewer Connection Impact Fee, the Storm Drainage Facilities Fee and the Inclusionary Housing Fee, all as described in the Development Agreement, payable to the City as a condition precedent to the City’s issuing a building permit for such Subject Unit. “Person” means an individual, a corporation, a partnership, an association, a limited liability company, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Plans” means the plans and specifications for the Acquisition Facilities prepared or to be prepared at the direction of the Developer pursuant to Section 4.01 hereof. 724
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“Property” means the real property located within the Community Facilities District. “Public Improvement Policies” means the City’s operational and implementation policies and procedures for public improvement construction using public funds, as set forth in the City of Fontana Public Improvement Policy and Procedure Manual, dated July 30, 1990, as originally adopted by the City Council of the City or as the same may be amended or supplemented from time to time.
“Purchase Price” means, with respect to a Segment, subject to the provisions of Section

3.02 hereof, the lesser of the Actual Cost or the Acquisition Cost of such Segment. “Rate and Method” means the Rate and Method of Apportionment for City of Fontana Community Facilities District No. 109 (Narra Hills) approved by the qualified electors of the Community Facilities District.
“Related Property” means, with respect to a Segment, the property on, in or over which such Segment is located, which property, or an easement thereon or other interest therein, is dedicated or otherwise conveyed to the City as provided in Section 3.04 hereof. “Savings Amount” means, with respect to a Segment, the amount, if any, by which the Acquisition Cost of such Segment exceeds the Actual Cost of such Segment. “Segments” means the discrete portions of the Components identified as such and described in Exhibit A attached hereto, as the same may be modified by one or more supplements thereto entered into in accordance with Section 3.05 hereof. “Special Tax” means the special tax described and defined in the Rate and Method as “Facilities Special Tax” approved by the qualified electors of the Community Facilities District. “State” means the State of California.
“Subject Unit Fee Amount” means, as of any date, the amount of Permit Fees applicable to a Subject Unit as of such date.
“Subject Units” means the 489 residential housing units to be constructed on the Property, for which entitlements have been granted by the City.
“Substantially Complete” means, with respect to a Segment, that the construction of such Segment by the Developer has, in the reasonable judgment of the City Engineer, reached a stage of completion sufficient to allow such Segment to be utilized for the purpose for which it is intended and that only the construction of ancillary, non-essential items remains incomplete; provided, however, that a Segment shall not be deemed to be Substantially Complete if, in the reasonable judgment of the City Engineer, the cost to complete the construction of such ancillary, non-essential items would exceed 10% of the Purchase Price of such Segment. “Trustee” means the commercial bank or trust company initially designated as trustee under the Indenture, and any successor thereto permitted under the Indenture. 725
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“Written Certificate” and “Written Request” of the Community Facilities District mean, respectively, a written certificate or written request signed in the name of the Community Facilities District by an Authorized Representative. Any such certificate or request may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. 726
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ARTICLE II
FUNDING PRIORITIES; CREDITS
Section 2.01. Funding Priorities. (a) Prior to the issuance of the Bonds, the proceeds of the Special Tax collected in each fiscal year shall, as soon as reasonably practicable, be applied in the following order of priority:

First Priority. To pay, or to provide for the payment of, Administrative Expenses.

Second Priority. To provide for the payment of the costs of the acquisition, construction and installation of the Construction Facilities. (b) Upon the issuance of the Bonds, the proceeds thereof received by or on behalf of the Community Facilities District shall be applied in the following order of priority First Priority. To pay, or to provide for the payment of, the costs of issuing the Bonds.

Second Priority. To provide for the payment of Administrative Expenses until Special Tax receipts are anticipated to be sufficient therefor.

Third Priority. To fund a reserve fund for the Bonds in an amount equal to the reserve requirement therefor, as provided in the Indenture.

Fourth Priority. To fund capitalized interest in an amount to pay up to 12 months of interest on the Bonds, as determined by the City.

Fifth Priority. For deposit in the Construction Account until the sum of (i) the amount, if any, provided for Construction Facilities pursuant to the Second Priority in subsection (a) of this Section, plus (ii) the amount deposited in the Construction Account pursuant to this Fifth Priority, is equal to 15% of such proceeds of the Bonds remaining after the application thereof in accordance with the First Priority, Second Priority, Third Priority and Fourth Priority in this subsection.

Sixth Priority. For deposit in the Construction Account until the amount deposited in the Construction Account pursuant to this Sixth Priority, is equal to the Development Agreement Fee, $489,000.

Seventh Priority. For deposit in the Acquisition Account until the amount deposited in the Acquisition Account pursuant to this Seventh Priority, is equal to the total Purchase Prices of all Acquisition Facilities expected to be acquired.

Eighth Priority. For deposit in the Construction Account an amount equal to the lesser of (i) the amount of all Permit Fees paid by or on behalf of the Developer deposited in the Deposit Accounts pursuant to subsection (a) of Section 2.03 hereof, and (ii) the remaining amount of such proceeds.
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Ninth Priority. For deposit in the Construction Account, the remainder of such proceeds, if any; provided, however, that the sum of (i) the amount deposited in the Construction Account pursuant to the Eighth Priority in this subsection, plus (ii) the amount deposited in the Construction Account pursuant to this Ninth Priority shall not exceed the product of (A) 489, times (B) the Subject Unit Fee Amount as of the date such proceeds are so deposited.
(c) If, after the payment of the Purchase Prices of all of the Segments, as provided herein, amounts remain on deposit in the Acquisition Account, such remaining amounts shall be transferred to and deposited in the Construction Account.

Section 2.02. Development Agreement Fee. (a) The deposit of Bond proceeds in the Construction Account, as provided in the Sixth Priority in subsection (b) of Section 2.01 hereof, shall constitute payment of the Development Agreement Fee pursuant to the Development Agreement.
(b) The Developer shall timely pay, or cause to be paid an amount equal to a pro-rata share of the Development Agreement Fee that, pursuant to the Development Agreement, is chargeable upon issuance of a certificate of occupancy for a Subject Unit. Any amount so paid prior to the issuance of the Bonds shall constitute a security deposit for the payment of such share of the Development Agreement Fee and, upon receipt thereof, the City shall deposit such amount in a separate account established by the City. Except as otherwise provided in subsection (c) of this Section, amounts on deposit in such separate account shall not be expended by the City; provided, however, that earnings on the investment of amounts on deposit in such separate account shall be withdrawn by the City and applied by the City to any legally permitted purpose. (c) Upon the issuance of the Bonds and the deposit of proceeds thereof in the Construction Account in an amount equal to the Development Agreement Fee, as provided in the Sixth Priority in subsection (b) of Section 2.01 hereof, the City shall withdraw from the separate account established by the City pursuant to subsection (b) of this Section and, as soon as practicable, return to the Developer, or the Developer’s designee, an amount equal to the share of the Development Agreement Fee previously paid by the Developer and deposited therein.

Section 2.03. Payment of Permit Fees as Deposit. (a) The Developer shall timely pay, or cause to be paid, an amount equal to all Permit Fees that are chargeable upon issuance of a building permit for a Subject Unit. Any amounts so paid prior to the issuance of the Bonds shall constitute a security deposit for the payment of such Permit Fees and, upon receipt thereof, the City shall deposit such amounts in one or more Deposit Accounts. Except as otherwise provided in subsection (b) of this Section, amounts on deposit in such Deposit Accounts shall not be expended by the City; provided, however, that earnings on the investment of amounts on deposit in a Deposit Account shall be withdrawn by the City and applied by the City to any legally permitted purpose.
(b) If, upon the issuance of the Bonds, proceeds thereof are deposited in the Construction Account, as provided in the Eighth Priority in subsection (b) of Section 2.01 hereof, the City shall withdraw from the Deposit Accounts and, as soon as practicable, return to the Developer, or the Developer’s designee, an amount equal to the amount of such proceeds so 728
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deposited. Any amounts remaining in the Deposit Accounts after such withdrawal shall constitute Permit Fees paid by or on behalf of the Developer in satisfaction of the obligation to pay such Permit Fees. Any such amounts remaining in the Deposit Accounts shall be withdrawn by the City and applied thereby to any purposes to which such Permit Fees may legally be applied.

Section 2.04. Credits. (a) If, upon the issuance of the Bonds, proceeds thereof are deposited in the Construction Account as provided in the Eighth Priority in subsection (b) of Section 2.01 hereof, the Developer shall, upon such deposit, be deemed to have paid Permit Fees for the number of Subject Units equal to the largest whole number that is not greater than the quotient of (i) the amount of such proceeds so deposited in the Construction Account in accordance with the Eighth Priority in subsection (b) of Section 2.01 hereof, divided by (ii) the Subject Unit Fee Amount as of the date such proceeds are so deposited. (b) If (i) upon the issuance of the Bonds, proceeds thereof are deposited in the Construction Account as provided in the Ninth Priority in subsection (b) of Section 2.01 hereof, and (ii) the Developer has not, pursuant to subsection (a) of this Section, been deemed to have paid Permit Fees for all of the Subject Units, the Developer shall be deemed to have paid Permit Fees that would otherwise subsequently become payable for the number of Subject Units equal to the lesser of (A) the number of Subject Units for which the Developer has not, pursuant to subsection (a) of this Section, been deemed to have paid Permit Fees, and (B) the largest whole number that is not greater than the quotient of (I) the amount of such proceeds so deposited in the Construction Account in accordance with the Ninth Priority in subsection (b) of Section 2.01 hereof, divided by (II) the Subject Unit Fee Amount as of the date such proceeds are so deposited. (c) If (i) remaining amounts in the Acquisition Account are transferred to and deposited in the Construction Account pursuant to subsection (c) of Section 2.01 hereof, and (ii) the Developer has not, pursuant to subsections (a) and (b) of this Section, been deemed to have paid Permit Fees for all of the Subject Units, the Developer shall be deemed to have paid Permit Fees for a number of Subject Units equal to the lesser of (A) the number of Subject Units for which the Developer has not, pursuant to subsections (a) and (b) of this Section been deemed to have paid Permit Fees, and (B) the largest whole number that is not greater than the quotient of (I) the amounts so transferred to and deposited in the Construction Account pursuant to subsection (c) of Section 2.01 hereof, divided by (II) the Subject Unit Fee Amount as of the date such proceeds are so deposited.
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ARTICLE III

ACQUISITION OF ACQUISITION FACILITIES
Section 3.01. Acquisition of Acquisition Facilities. The Developer hereby agrees to sell to the Community Facilities District, and the Community Facilities District hereby agrees to purchase from the Developer, each Segment for the Purchase Price thereof, subject to the terms and conditions hereof. Title to each Segment purchased pursuant hereto shall be transferred by the Developer to the City as of the Acceptance Date of such Segment by appropriate instrument in accordance with the Conditions of Approval; provided, however, that notwithstanding such transfer, as provided in Section 4.06 hereof, the Developer shall be responsible for the maintenance of such Segment until the Acceptance Date of the Component of which such Segment is a part.

The parties hereto expect that, at some date after the execution hereof, the Community Facilities District will issue the Bonds. The Purchase Price of the Segments is to be paid from proceeds of the Special Tax available for such purpose, as provided in Section 2.01 hereof, and from proceeds of the Bonds deposited in the Acquisition Account, as provided in Section 2.01 hereof. The Community Facilities District shall not be obligated to pay the Purchase Price of the Segments except from such proceeds of the Special Tax and the Bonds. Neither the Community Facilities District nor the City makes any warranty, either express or implied, that such proceeds of the Special Tax and the Bonds available for the payment of the Purchase Price of the Segments will be sufficient for such purpose.

Section 3.02. Payment of Purchase Price. (a) In order to receive all or any portion of the Purchase Price for a Segment, the Developer shall deliver to the Community Facilities District and the City Engineer (i) a Payment Request for such Segment, together with all attachments and exhibits to be included therewith, (ii) a copy of the documents conveying, or which previously conveyed, to the City Acceptable Title to the Related Property of such Segment, as described in Section 3.04 hereof, and (iii) a copy of the Notice of Completion of such Segment which will be filed in accordance with Section 8182 of the California Civil Code, if applicable. (b) Upon receipt of a completed Payment Request (and accompanying documentation) for a Segment, the City Engineer shall conduct a review in order to confirm that such Segment is Complete and was constructed in accordance with the Plans therefor and to verify and approve the Actual Cost of such Segment specified in such Payment Request. The Developer agrees to cooperate with the City Engineer in conducting each such review and to provide the City Engineer with such additional information and documentation as is reasonably necessary for the City Engineer to conclude each such review. The City agrees to cause the City Engineer to conduct such review without unreasonable delay. If the City Engineer determines that the Actual Cost specified in such Payment Request as initially submitted exceeds the Developer’s actual, reasonable cost of constructing such Segment, the Developer shall resubmit such Payment Request, with the Actual Cost specified therein modified so as to take into account such determination by the City Engineer. Upon confirmation that such Segment is Complete and has been constructed in accordance with the Plans therefor, and verification and approval of the Actual Cost of such Segment, the City Engineer shall sign the Payment Request, indicating thereon that the full amount of the Purchase Price of such Segment is to be paid, and forward the same to the Community Facilities District. Upon receipt of such reviewed and fully signed Payment Request, 730
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the Community Facilities District shall, without unreasonable delay, direct the Trustee to pay the full amount of the Purchase Price of such Segment to the Developer. (c) If, as a result of the review described in subsection (b), above, the City Engineer (i) determines that such Segment, while not Complete, is Substantially Complete, (ii) confirms that such Segment has been constructed in accordance with the Plans therefor, and (iii) verifies and approves the Actual Cost of such Segment, the City Engineer shall sign the Payment Request, indicating thereon that an amount equal to 90% of the lesser of (x) such Actual Cost, or (y) the Acquisition Cost of such Segment is to be paid, and forward the same to the Community Facilities District. Upon receipt of such reviewed and fully signed Payment Request, the Community Facilities District shall, without unreasonable delay, direct the Trustee to pay such amount to the Developer.

When the Developer completes or causes to be completed all work with respect to such Segment and concludes that such Segment is Complete, the Developer shall deliver to the City Engineer (i) if as-built drawings or similar plans and specifications for such Segment have not previously been submitted to the City Engineer, such drawings or plans and specifications, together with a certification of the Developer that such drawings or plans and specifications are true, correct and complete, and (ii) such information and documentation as is reasonably required by the City Engineer in order for the City Engineer to determine whether such Segment is Complete. Upon receipt of such information and documentation, the City Engineer shall conduct a review in order to confirm that such Segment is Complete. If, as a result of such review, the City Engineer determines that such Segment is Complete, the City Engineer shall sign a copy of the original Payment Request therefor, indicating thereon that an amount equal to the remainder of the (x) the Purchase Price of such Segment, less (y) the amount paid pursuant to the preceding paragraph is to be paid, and forward the same to the Community Facilities District. Upon receipt of such reviewed and fully signed Payment Request, the Community Facilities District shall, without unreasonable delay, direct the Trustee to pay such amount to the Developer.

Section 3.03. Payments of Credit Amount. If and when the amount of the Credit Amount is greater than zero, the Developer shall be entitled to be paid from the Acquisition Account an amount equal to the Credit Amount. In order to receive all or a portion of the Credit Amount, the Developer shall deliver to the Community Facilities District a written request signed by a Developer Representative stating (a) the amount to be paid, and (b) that such amount does not exceed the amount of the Credit Amount as of the date of delivery of such written request.

Such written request shall be accompanied by a calculation demonstrating the amount of the Credit Amount as of the date of delivery of such written request. Upon receipt of such written request and accompanying calculation, the Community Facilities District shall, without unreasonable delay, direct the Trustee to pay such amount from the Acquisition Account to the Developer.

Section 3.04. Dedication of Property and Easements to City. Acceptable Title to all property on, in or over which each Segment will be located shall be deeded over to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such easement is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Segment located therein, thereon or thereover, and to permit the Developer to perform its obligations as set forth in this Acquisition Agreement. 731
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Upon the request of the City, the Developer shall furnish to the City a title report for such property not previously dedicated or otherwise conveyed to the City or its designee, for review and approval at least 20 calendar days prior to the transfer of Acceptable Title to a Segment to the City or its designee. The City shall approve the title report unless it reveals a matter which, in the reasonable judgment of the City, could materially affect the City’s or its designee’s use and enjoyment of any part of the property or easement covered by the title report. In the event the City does not approve the title report, the City shall not be obligated to accept title to such Segment, and the Community Facilities District shall not be obligated to pay any portion of the Purchase Price for such Segment, until the Developer has cured such objections to title to the reasonable satisfaction of the City.

Section 3.05. Modifications to Segments and Acquisition Costs. The Community Facilities District, the City and the Developer may make modifications in the composition and description of a Segment or a Component, or in the amount of the Acquisition Cost for a Segment, whenever the Community Facilities District, the City and the Developer deem such modifications to be appropriate. Any such modification shall be approved and implemented by the City Manager or Deputy City Manager (on behalf of the Community Facilities District), the City Engineer (on behalf of the City) and the Developer executing a supplement to Exhibit A containing a description of the modified Segment or Component and, if applicable, Acquisition Cost of such Segment.

Upon the execution of any such supplement to Exhibit A, the description of the Segment or Component and, if applicable, the Acquisition Cost of such Segment in Exhibit A shall be deemed to have been modified in accordance therewith.
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ARTICLE IV

CONSTRUCTION OF ACQUISITION FACILITIES
Section 4.01. Preparation and Approval of Plans and Specifications. The Developer shall cause Plans to be prepared for the Acquisition Facilities in accordance with the Conditions of Approval. The Developer shall obtain the written approval of the Plans from all appropriate departments of the City or from any other public agency or public utility from which such approval must be obtained. Copies of all such Plans shall be provided by the Developer to the City Engineer.

Section 4.02. Duty of Developer to Construct. The Developer shall construct or cause to be constructed the Segments in accordance with the Conditions of Approval and the approved Plans. The Developer shall perform all of its obligations hereunder and shall conduct all operations with respect to the construction of the Segments in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified persons utilizing commercially reasonable efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. The Developer shall not be relieved of its obligation to construct a Segment, and convey such Segment to the City in accordance with the terms hereof, even if the Purchase Price for such Segment is less than the Actual Cost of such Segment. Notwithstanding the foregoing, nothing set forth in this Acquisition Agreement shall be construed to require the Developer to construct any Acquisition Facilities other than at the time required by, and in accordance with, the Conditions of Approval or to perform any work requiring a contractor’s license, nor shall the Developer be deemed to be performing construction services pursuant to this Acquisition Agreement.

Section 4.03. Public Works Requirements. (a) In order to insure that the Segments that are acquired by the City pursuant to this Acquisition Agreement are constructed as if they had been constructed under the direction and supervision, or under the authority of, the City, so that they may be acquired pursuant to California Government Code Section 53313.5, the Developer shall comply with all of the requirements of this Section for each Segment for which the Developer submits a Payment Request.
(b) Bids for the construction of each Segment shall be obtained in conformance with the Public Improvement Policies, or as otherwise approved by the City Engineer in writing. (c) The contract for the construction of each Segment shall be awarded to the responsible bidder submitting the lowest responsive bid for the construction of such Segment. (d) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to pay at least General Prevailing Wage Rates to all workers employed in the execution of the contract, to post a copy of the General Prevailing Wage Rates at the job-site in a conspicuous place available to all employees and applicants for employment, and to otherwise comply with applicable provisions of the California Labor Code, the California Government Code and the California Public Contracts Code relating to public works projects of cities and as required by the Public 733
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Improvement Policies. The City has provided the Developer with copies of tables setting forth the General Prevailing Wage Rates, and the Developer hereby acknowledges receipt thereof.

The Developer shall require, and the specifications and bid and contract documents shall require, for all contracts involving in excess of $30,000 or 20 working days, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to comply with the provisions of Section 1777.5 of the California Labor Code with respect to all apprenticeable occupations upon the project.
(e) In performing its obligations under this Acquisition Agreement, the Developer shall comply with the applicable nondiscrimination and affirmative action provisions of the laws of the United States of America, the State and the City. In performing its obligations under this Acquisition Agreement, the Developer shall not discriminate in its employment practices against any employee, or applicant for employment, because of such person’s race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status or medical condition. The Developer shall require, in any contract it enters into for the construction of any Segment, that the contractor be subject to the provisions of this paragraph. (f) The Developer shall require each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to provide proof of insurance coverage satisfying the requirements of Section

4.07 hereof throughout the term of the construction of such Segment; provided, however, that, rather than requiring such contractors, subcontractors, vendors, equipment operators and owner operators to provide such insurance, the Developer may elect to provide the same for the benefit of such contractors, subcontractors, vendors, equipment operators and owner operators. (g) The Developer shall comply, and shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to comply, with such other requirements relating to the construction of the Segments as the City may impose by written notification delivered to the Developer, to the extent legally required as a result of changes in applicable federal, State or City laws or the Public Improvement Policies.
(h) The Developer shall require, and the specifications and bid and contract documents shall require, all contractors, subcontractors, vendors, equipment operators and owner operators, in each such case to the extent such Persons are engaged to perform work on a Segment, to submit certified weekly payroll records to the Developer for inspection by the City, and to furnish certified payroll records to the City promptly upon request.

The Developer shall provide proof to the City, at such intervals and in such form as the City may reasonably require, that the foregoing requirements have been satisfied as to all of the Segments.

Section 4.04. Bonding Requirements. Prior to the commencement of construction of a Segment, the Developer shall secure, or caused to be secured, appropriate bonds for the construction and completion of construction of such Segment, a faithful performance bond and a 734
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bond for the security of laborers and materialmen, each in an amount that is equal to 100% of the contract price for such Segment. Each issuer of any such bond shall be duly authorized to issue such bond in the State. Each such bond shall comply with the provisions of California Government Code Sections 66499.1 and 66499.2.

Section 4.05. Inspection; Completion of Construction. The City shall have primary responsibility for providing inspection of the work of construction of the Segments to ensure that the work of construction is accomplished in accordance with the Plans. The City’s personnel shall have access to the site of the work of construction at all reasonable times for the purpose of accomplishing such inspection. Upon the completion of the construction of a Segment to the satisfaction of the City’s inspectors, the Developer shall notify the Community Facilities District, the City and the City Engineer in writing that the construction of such Segment has been completed in accordance with the Plans.

No later than ten days after receiving notification pursuant to Section 3.02 hereof that a Segment was constructed in accordance with the Plans therefor, the Developer shall forthwith file with the San Bernardino County Recorder a Notice of Completion, in form acceptable to the City Engineer, pursuant to the provisions of Section 8182 of the California Civil Code, if applicable.

The Developer shall furnish to the City and the Community Facilities District a duplicate copy of each such Notice of Completion showing thereon the date of filing with said County Recorder.

Section 4.06. Maintenance of Acquisition Facilities; Warranties. The Developer shall maintain each Segment in good and safe condition until the Acceptance Date of the Component of which such Segment is a part. Prior to the Acceptance Date of the Component of which such Segment is a part, the Developer shall be responsible for maintaining such Segment in proper operating condition, and shall perform such maintenance on such Segment as the City Engineer reasonably determines to be necessary. As of the Acceptance Date of the Component of which a Segment is a part, the performance bond provided by the Developer for such Segment pursuant to Section 4.04 hereof shall be reduced to an amount equal to 20% of the original amount thereof and shall serve as a warranty bond to guarantee that such Segment will be free from defects due to faulty workmanship or materials for a period of 12 months from the Acceptance Date of the Component of which such Segment is a part, or the Developer may elect to provide a new warranty bond in such an amount pursuant to the Public Improvement Policies. As of the Acceptance Date of the Component of which a Segment is a part, the Developer shall assign to the City all of the Developer’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third Persons with respect to such Segment.

Section 4.07. Insurance Requirements. The Developer shall or, pursuant to Section

4.03(f) hereof, shall cause each contractor, subcontractor, vendor, equipment operator and owner operator, in each such case to the extent such Person is engaged to perform work on a Segment, to, at all times prior to the final Acceptance Date of all Segments, maintain, deliver to the City and keep in full force and effect, the following insurance policies:
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(a) a protective liability policy providing for not less than the following amounts:

Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
$1,000,000 each accident for products
and completed operations
Property Damage $1,000,000 each accident
Worker’s Compensation Statutory
(b) Automobile Liability Insurance to include all owned, non-owned or non- hired vehicles, including loading and unloading thereof:

Automobile Bodily Injury $1,000,000 each person
$2,000,000 each occurrence
Automobile Property Damage $1,000,000 each accident
All liability insurance policies shall bear an endorsement or shall have attached a rider whereby it is provided that, in the event of expiration or proposed cancellation of such policies for any reason whatsoever, the City shall be notified by registered mail, return receipt requested, giving a sufficient time before the date thereof to comply with any applicable law or statute, but in no event less than 30 days before expiration or cancellation is effective.

The following statement shall be included on the insurance certificate:

Additional Insured: The insurer agrees that the City, its City Council, and/or all City Council appointed groups, committees, boards and any other City Council appointed body, and/or elective and appointive officers, servants, agents or employees of the City, when acting as such, are additional insureds hereunder, for the acts of the insured, and such insurance shall be primary to any insurance of the City.

The Developer may effect such coverage under blanket insurance policies, provided, however, that (a) such policies are written on a per occurrence basis, (b) such policies comply in all other respects with the provisions of this Section, and (c) the protection afforded the City under any such policy shall be no less than that which would be available under a separate policy relating only to the Segments. All policies of insurance shall be with companies licensed or approved by the California Commissioner of Insurance and rated B+5 or better in the most recent edition of Best’s Insurance Guide and shall be issued and delivered in accordance with State law and regulations.

If Developer fails to maintain or cause to be maintained any insurance required hereby, the City may, but shall not be obligated to, procure such insurance and recover the amount of the premiums therefor from the Developer or retain such amount from any monies due to the Developer under this Acquisition Agreement. The failure of the City to procure any such insurance shall in no way relieve the Developer of any of its obligations under this Acquisition Agreement. 736
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Section 4.08. Ownership of Acquisition Facilities. Notwithstanding the fact that some or all of the Acquisition Facilities may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to the City, the Acquisition Facilities shall be and remain the property of the Developer until title thereto is conveyed to and accepted by the City as provided herein and in the Conditions of Approval. Such ownership by the Developer shall likewise not be affected by any agreement which the Developer may have entered into or may enter into with the City pursuant to the provisions of the Subdivision Map Act, Section 66410 et seq. of the California Government Code, and the provisions of this Section and the Conditions of Approval shall control.
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ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION Section 5.01. Representations and Warranties of the Developer. The Developer makes the following representations and warranties for the benefit of the Community Facilities District and the City:
(a) Organization. The Developer represents and warrants that the Developer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, is authorized to conduct business and is in good standing under the laws of the State, and has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated. (b) Authority. The Developer represents and warrants that the Developer has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered on behalf of the Developer.
(c) Binding Obligation . The Developer represents and warrants that this Acquisition Agreement is a valid and binding obligation of the Developer and is enforceable against the Developer in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights in general and by general equity principles.
(d) Environmental Matters Relating to Segments. The Developer represents and warrants that neither the Developer, nor any subcontractor, agent or employee of either thereof, has used, generated, manufactured, procured, stored, released, discharged or disposed of (whether accidentally or intentionally) any Hazardous Material on, under or in any Segment or the Related Property of such Segment, or transported (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material.

The Developer represents and warrants that, as of the Acceptance Date of each Segment, there will not be present on, under or in such Segment or the Related Property of such Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, or (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions.
(e) Environmental Matters Relating to Property. The Developer represents and warrants that neither the Developer, nor any subcontractor, agent or employee of either 738
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thereof, has used, generated, manufactured, procured, stored, released, discharged or disposed of (whether accidentally or intentionally) at any time on or prior to the date hereof any Hazardous Material on, under or in the Property, or any structure, fixtures, equipment, or other objects thereon, or transported (whether accidentally or intentionally) any Hazardous Material to or from the Property, or any structure, fixtures, equipment, or other objects thereon, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material.

The Developer represents and warrants that there is not present on, under or in the Property or any structure, fixtures, equipment, or other objects thereon, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, and (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions.

The Developer represents and warrants that the Developer has not received notice of, and, to the best of the Developer’s knowledge, there is not, any proceeding or formal inquiry by any governmental authority, body or agency with respect to the presence of Hazardous Materials on, under or in the Property, or any structure, fixtures, equipment, or other objects thereon, or the migration thereof from or to other property.

Section 5.02. Covenants of the Developer. The Developer makes the following covenants for the benefit of the Community Facilities District and the City:
(a) Completion of Segments . The Developer covenants that it will use its reasonable and diligent efforts to do all things which may be lawfully required of it in order to cause the Segments to be completed in accordance with this Acquisition Agreement and the Conditions of Approval.
(b) Compliance with Laws . The Developer covenants that, while the Acquisition Facilities are owned by the Developer or required pursuant to this Acquisition Agreement to be maintained by the Developer, it will not commit, suffer or permit any of its agents, employees or contractors to commit any act to be done in, upon or to the Acquisition Facilities in violation in any material respect of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the Property or the Acquisition Facilities. (c) Payment Requests . The Developer covenants that (i) it will not request payment from the Community Facilities District under this Acquisition Agreement for the acquisition of any improvements that are not part of a Segment, and (ii) it will diligently follow all procedures set forth in this Acquisition Agreement with respect to Payment Requests.
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(d) Financial Records . Until the final Acceptance Date of the Acquisition Facilities, the Developer covenants to maintain proper books of record and account for the Acquisition Facilities and all costs related thereto. The Developer covenants that such accounting books will be maintained in accordance with generally accepted accounting principles, and will be available for inspection by the Community Facilities District and the City within a reasonable time after the Community Facilities District or the City submits a written request to the Developer requesting that such books be made available for inspection.
(e) Environmental Matters Relating to Segments. The Developer covenants that neither the Developer, nor any subcontractor, agent or employee thereof, will use, generate, manufacture, procure, store, release, discharge or dispose of (whether accidentally or intentionally) at any time on or prior to the Acceptance Date of each Segment any Hazardous Material on, under or in such Segment or the Related Property of such Segment, or transport (whether accidentally or intentionally) any Hazardous Material to or from such Segment or such Related Property, in violation of any federal, state or local law, ordinance, regulation, rule or decision regulating Hazardous Material in effect at the time of such use, generation, manufacturing, procurement, storage, release, discharge, disposal or transportation.
(f) Permits. The Developer covenants that it will obtain all governmental or other permits required to proceed with the construction of the Acquisition Facilities, and that it will pay all fees relating thereto that are required to be paid, in accordance with the Conditions of Approval.

Section 5.03. Representations and Warranties of the Community Facilities District and the City. The Community Facilities District and the City make the following representations and warranties for the benefit of the Developer:
(a) Authority. The Community Facilities District represents and warrants that the Community Facilities District has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered on behalf of the Community Facilities District. The City represents and warrants that the City has the power and authority to enter into this Acquisition Agreement, and has taken all action necessary to cause this Acquisition Agreement to be executed and delivered, and this Acquisition Agreement has been duly and validly executed and delivered on behalf of the City.
(b) Binding Obligation . The Community Facilities District represents and warrants that this Acquisition Agreement is a valid and binding obligation of the Community Facilities District and is enforceable against the Community Facilities District in accordance with its terms. The City represents and warrants that this Acquisition Agreement is a valid and binding obligation of the City and is enforceable against the City in accordance with its terms.
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Section 5.04. Covenants of the Community Facilities District and the City. The Community Facilities District and the City make the following covenants for the benefit of the Developer:
(a) Completion of Segments. The City covenants that it will use its reasonable and diligent efforts to take all actions which may be lawfully required of it in issuing permits, processing and approving Plans and inspecting the Segments in accordance with this Acquisition Agreement.
(b) Payment Requests. Each of the Community Facilities District and the City covenants that it will diligently follow all procedures set forth in this Acquisition Agreement with respect to each Payment Request.
(c) Financial Records . Until the final Acceptance Date, the Community Facilities District covenants to maintain proper books of record and account for the Special Tax and the Bonds. The Community Facilities District covenants that such accounting books will be maintained in accordance with generally accepted accounting principles applicable to governmental entities, and will be available for inspection by the Developer within a reasonable time after the Developer submits a written request to the Community Facilities District requesting that such books be made available for inspection.

Section 5.05. Indemnification. The Developer agrees to protect, indemnify, defend and hold the Community Facilities District and the City, and their respective officers, employees and agents (the “Indemnified Parties”), and each of them, harmless from and against any and all claims, losses, expenses, suits, actions, decrees, judgments, awards, attorney’s fees, and court costs which any Indemnified Party may suffer or which may be sought against or recovered or obtained from any Indemnified Party as a result of or by reason of or arising out of or in consequence of (a) the issuance of the Bonds or the acquisition, construction, installation or financing of the Acquisition Facilities, (b) the untruth or inaccuracy of any representation or warranty made by the Developer in this Acquisition Agreement or in any certifications delivered by the Developer pursuant hereto or in connection with the issuance of the Bonds, (c) the release, threatened release, storage, treatment, transportation or disposal of any Hazardous Materials on, under, in, from or to any portion of the Property while such portion of the Property is owned by the Developer, and (d) any act or omission of the Developer or any of its subcontractors, or their respective officers, employees or agents, in connection with the Acquisition Facilities, including noncompliance with any covenants made by the Developer in this Acquisition Agreement. If the Developer fails to do so, the Community Facilities District and the City shall have the right, but not the obligation, to defend the same and charge all of the direct or incidental costs of such defense, including any fees or costs, to and recover the same from the Developer.

Upon receipt by an Indemnified Party of notice of any claim, loss, expense, suit, action, decree, judgment or award for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section, such Indemnified Party shall promptly notify the Developer in writing of such claim, loss, expense, suit, action, decree, judgment or award. Neither the Developer nor an Indemnified Party shall, without the other’s written consent, settle, compromise or consent to the entry of judgment with respect to any claim, 741
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suit or action for which the Developer is obligated to protect, indemnify, defend and hold such Indemnified Party harmless pursuant to this Section.

No indemnification is required to be paid by the Developer for any claim, loss or expense (a) arising from the willful misconduct or negligence of an Indemnified Party, or (b) arising from the use or operation of a Segment after the Acceptance Date of the Component of which such Segment is a part, unless such claim, loss or expense results from the defective or improper design, acquisition, construction or installation of such Segment.

The provisions of this Section shall survive the termination of this Acquisition Agreement. 742
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ARTICLE VI
TERMINATION; DAMAGES
Section 6.01. Termination by Agreement. This Acquisition Agreement may be terminated by written agreement of the Community Facilities District, the City and the Developer.

Upon such termination, the City may, but shall not be obligated to, complete the acquisition, construction and installation of any Segments not theretofore acquired from the Developer pursuant hereto, and the Community Facilities District and the City may use all or any portion of the monies in the Acquisition Account to pay for such acquisition, construction and installation.

In the event of such termination, the Developer shall have no claim or right to any further payments for the Purchase Price of any Segment except as otherwise may be provided in such written agreement.

Section 6.02. Termination by City. (a) The following events shall constitute grounds for the Community Facilities District and the City, at their option, to terminate this Acquisition Agreement, without the consent of the Developer:
(i) the Developer shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law; (ii) the Developer shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of Developer, or shall suffer an attachment or levy of execution to be made against the property it owns within the Community Facilities District unless, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof; (iii) except to the extent that the Developer’s obligation to construct the Acquisition Facilities is excused pursuant to Section 6.05 hereof, the Developer shall abandon construction of the Acquisition Facilities that, as of the time of such abandonment, the Developer is required to construct or cause to be constructed in accordance with the Conditions of Approval (failure for a period of three consecutive months or failure for two periods of two consecutive months to undertake substantial work related to the construction of the Acquisition Facilities shall constitute a non-exclusive example of such abandonment);
(iv) the Developer shall breach any material covenant or default in the performance of any material obligation under this Acquisition Agreement, or any representation or warranty of the Developer set forth herein or in any certifications delivered by the Developer hereunder shall prove to have been false or misleading in any material respect when made or deemed made;
(v) the Developer shall transfer any of its rights or obligations under this Acquisition Agreement, without the prior written consent of the Community Facilities District and the City;
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(vi) the Developer shall have made any material misrepresentation or material omission in any written materials furnished in connection with any preliminary official statement, official statement or bond purchase contract which has not been corrected and is used in connection with the sale of any Bonds; (vii) the Developer or any of its partners, permitted assigns or successors-in- interest under this Acquisition Agreement or any Affiliate of the Developer shall at any time bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body which in any way seeks to challenge or overturn the Community Facilities District, the levy of the Special Tax in accordance with the Rate and Method or the validity of the Bonds or the proceedings leading up to their issuance; provided, however, that the Developer or any of its partners, permitted assigns or successors-in-interest under this Acquisition Agreement or any Affiliate of the Developer that owns any of the Property may bring an action or suit contending that the Special Tax has not been levied in accordance with the methodology contained in the Rate and Method; (viii) the Developer shall materially fail to complete the Acquisition Facilities as contemplated by this Acquisition Agreement and the Conditions of Approval; or (ix) the Developer or any of its partners, permitted assigns or successors-in- interest under this Acquisition Agreement or any Affiliate of the Developer shall fail to pay any Special Tax levied on the Property owned by such party prior to such Special Tax becoming delinquent.
(b) If any event listed in paragraph (i), (ii) or (vii) of subsection (a) of this Section occurs, this Acquisition Agreement shall automatically terminate. (c) If any event listed in paragraph (iii), (iv), (v), (vi), (viii) or (ix) of subsection (a) of this Section occurs, the Community Facilities District and the City may elect to terminate this Acquisition Agreement. If the Community Facilities District and the City intend to terminate this Acquisition Agreement, the Community Facilities District and the City shall first notify the Developer in writing of such intention and of the grounds for such termination and allow the Developer 60 days to eliminate or mitigate to the reasonable satisfaction of the Community Facilities District and the City the grounds for such termination. If, in the reasonable opinion of the Community Facilities District and the City, such grounds for termination can be eliminated or mitigated, but not within such 60 day period, such period shall be extended in order to provide a reasonably sufficient amount of time to accomplish such elimination or mitigation, but only if the Developer has instituted corrective action within such 60 day period and the Developer is thereafter proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof), the Developer has not eliminated or completely mitigated such grounds for termination to the reasonable satisfaction of the Community Facilities District and the City, the Community Facilities District and the City may then terminate this Acquisition Agreement by delivering a written notice of such termination to the Developer. If any of the grounds listed in said paragraph (iii), (iv), (v), (vi), (viii) or (ix) for termination of this Acquisition Agreement by the Community Facilities District and the City (A) has occurred, and (B) has not been eliminated or mitigated to the reasonable satisfaction of the Community Facilities District and the City or waived by the Community Facilities District and the City, the Community Facilities 744
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District, from and after the occurrence thereof, shall have no obligation to acquire any Segment pursuant hereto.

Section 6.03. Termination by Developer. (a) The following events shall constitute grounds for the Developer, at its option, to terminate this Acquisition Agreement, without the consent of the Community Facilities District or the City:
(i) the City or the Community Facilities District shall voluntarily file for reorganization or other relief under any Federal or state bankruptcy or insolvency law; (ii) the City or the Community Facilities District shall have any involuntary bankruptcy or insolvency action filed against it, or shall suffer a trustee in bankruptcy or insolvency or receiver to take possession of the assets of the City or the Community Facilities District, as applicable, or shall suffer an attachment or levy of execution to be made against the property it owns unless, in any of such cases, such action, possession, attachment or levy shall have been terminated or released within 60 days after the commencement thereof;
(iii) the Community Facilities District or the City shall breach any material covenant or default in the performance of any material obligation under this Acquisition Agreement, or any representation or warranty of the Community Facilities District or the City set forth herein shall prove to have been false or misleading in any material respect when made; and
(iv) the Community Facilities District or the City shall transfer any of its respective rights or obligations under this Acquisition Agreement, without the prior written consent of the Developer;
(b) If any event listed in subsection (a) of this Section occurs, the Developer may elect to terminate this Acquisition Agreement. If the Developer intends to terminate this Acquisition Agreement, the Developer shall first notify the Community Facilities District and the City in writing of such intention and of the grounds for such termination and allow the Community Facilities District and the City 60 days to eliminate or mitigate to the reasonable satisfaction of the Developer the grounds for such termination. If, in the reasonable opinion of the Developer, such grounds for termination can be eliminated or mitigated, but not within such 60 day period, such period shall be extended in order to provide a reasonably sufficient amount of time to accomplish such elimination or mitigation, but only if the Community Facilities District and the City have instituted corrective action within such 60 day period and the Community Facilities District and the City are thereafter proceeding with diligence to eliminate or mitigate such grounds for termination. If at the end of such period (and any extension thereof), the Community Facilities District and the City have not eliminated or completely mitigated such grounds for termination to the reasonable satisfaction of the Developer, the Developer may then terminate this Acquisition Agreement by delivering a written notice of such termination to the Community Facilities District and the City.

Section 6.04. Remedies in General; Damages Limited. (a) The Developer acknowledges that neither the Community Facilities District nor the City would have entered into 745
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this Acquisition Agreement if it were to be liable in damages under or with respect to this Acquisition Agreement. The only obligations of the Community Facilities District and the City hereunder to pay amounts or provide funding are the obligations to apply proceeds of the Special Tax and proceeds of the Bonds as provided in Section 2.01 hereof, to pay the Purchase Price of the Segments and any Credit Amount from amounts on deposit in the Acquisition Account, as provided in Section 3.02 hereof and Section 3.03 hereof, respectively and to pay amounts pursuant to Section 7.08 hereof, if and to the extent required by said Section. Neither the Community Facilities District nor the City shall have any pecuniary liability under this Acquisition Agreement for any act or omission of the Community Facilities District or the City, except as set forth in this Section. In no event will an act, or an omission or failure to act, by the Community Facilities District or the City with respect to the sale or proposed sale of the Bonds subject the Community Facilities District or the City to pecuniary liability therefor. (b) In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Acquisition Agreement; provided, however, that the Community Facilities District and the City shall not be liable in damages to the Developer, other than to the extent that remedying a failure to perform an obligation specified in subsection (a) of this Section might be considered direct damages, and, in no case shall the Community Facilities District or the City be liable for any special, exemplary, consequential or punitive damages. In light of the foregoing, the Developer covenants not to sue for or claim any damages, for any alleged breach of, or dispute which arises out of, this Acquisition Agreement, other than to the extent that remedying a failure to perform an obligation specified in subsection (a) of this Section might be considered direct damages.

Section 6.05. Force Majeure. Except as may be specifically provided in this Acquisition Agreement, the performance by the Community Facilities District, the City or the Developer of its respective obligations hereunder shall be excused during, and the period of time for performance of its respective obligations hereunder shall be extended for a period of time equal to, any period of delay caused by reason of (a) acts of God or civil commotion, (b) riots, strikes, picketing or other labor disputes, (c) shortages of materials or supplies, (d) damage to work in progress by reason of fire, floods, earthquakes or other casualty, (e) enactment of laws which prevent or preclude compliance by the Community Facilities District, the City or the Developer with a material provision of this Acquisition Agreement, (f) administrative proceedings challenging the Community Facilities District, the Bonds, this Acquisition Agreement or a Payment Request brought by Persons other than the Community Facilities District, the City or the Developer, or any Affiliate thereof, (g) litigation (including the pendency thereof), brought by Persons other than the Community Facilities District, the City or the Developer, or any Affiliate thereof, including, without limitation, litigation challenging the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement, a Payment Request, (h) pendency of initiatives or referenda affecting the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement or a Payment Request, or (i) any other cause beyond the reasonable control of the Community Facilities District, the City or the Developer, respectively; provided, however that, as to any party (x) the financial inability of such party itself to perform under this Acquisition Agreement, and (y) the negligence or willful misconduct of such party shall not constitute a permitted delay for purposes of this Section and, provided, further, that any action, omission, or failure to approve a Payment Request or other approval, or the imposition of additional requirements or restrictions in connection therewith by the Community Facilities 746
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District or the City, caused by the Developer’s actual failure to comply with applicable laws or regulations or the provisions of this Acquisition Agreement (other than an actual failure to comply that results from the enactment of laws which prevent or preclude compliance by a party with a material provision of this Acquisition Agreement, administrative proceedings challenging the Community Facilities District, the Bonds, this Acquisition Agreement or a Payment Request or other approval, litigation brought by persons other than a party, or an Affiliate of a party, including without limitation, litigation challenging the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement or a Payment Request or other approval, initiative or referenda affecting the Community Facilities District, the development of the Property, the Bonds, this Acquisition Agreement or a Payment Request or other approval), shall not constitute a permitted delay for the Developer for purposes of this Section.

If the Community Facilities District, the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party shall give the other parties hereto written notice of the commencement of such permitted delay within 30 days after first gaining knowledge of such permitted delay.

If the Community Facilities District, the City or the Developer shall claim that performance of its respective obligations hereunder is excused by a permitted delay pursuant to this Section, such party’s performance shall only be excused during, and the period of time for performance of its obligations hereunder shall only be extended for a period of time equal to, the period of time for which the cause of such permitted delay is in effect and is actually causing a delay in performance by such party of its obligations hereunder.

The Community Facilities District, the City and the Developer shall act diligently and in good faith to avoid foreseeable delays in performance and to remove the cause of any permitted delay under this Section or develop a reasonable alternative means of performance of its respective obligations hereunder.
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ARTICLE VII

MISCELLANEOUS
Section 7.01. Developer as Independent Contractor. In performing under this Acquisition Agreement, it is mutually understood that the Developer is acting as an independent contractor, and not an agent of the Community Facilities District or the City. Neither the Community Facilities District nor the City shall have any responsibility for payment to any contractor, subcontractor or supplier of the Developer.

Section 7.02. Other Agreements. Nothing contained herein shall be construed as affecting the City’s or the Developer’s respective duty to perform its respective obligations under other agreements, land use regulations or subdivision requirements relating to the development of the Property, which obligations are and shall remain independent of the Developer’s rights and obligations, and the City’s rights and obligations, under this Acquisition Agreement; provided, however, that the Developer shall use its reasonable and diligent efforts to perform each and every covenant to be performed by it under any lien or encumbrance, instrument, declaration, covenant, condition, restriction, license, order, or other agreement, the nonperformance of which could reasonably be expected to materially and adversely affect the acquisition, construction and installation of the Segments.

Section 7.03. Binding on Successors and Assigns. Neither this Acquisition Agreement nor the duties and obligations of the Developer hereunder may be assigned to any Person without the written consent of the Community Facilities District and the City, which consent shall not be unreasonably withheld or delayed. Neither this Acquisition Agreement nor the duties and obligations of the City or the Community Facilities District hereunder may be assigned to any Person, without the written consent of the Developer, which consent shall not be unreasonably withheld or delayed. The agreements and covenants included herein shall be binding on and inure to the benefit of any partners, permitted assigns, and successors-in-interest of the parties hereto.

Section 7.04. Amendments. This Acquisition Agreement may be amended by an instrument in writing executed and delivered by the Community Facilities District, the City and the Developer.

Section 7.05. Waivers. No waiver of, or consent with respect to, any provision of this Acquisition Agreement by a party hereto shall in any event be effective unless the same shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

Section 7.06. No Third-Party Beneficiaries. No person or entity shall be deemed to be a third-party beneficiary hereof, and nothing in this Acquisition Agreement (either express or implied) is intended to confer upon any person or entity, other than the Community Facilities District, the City and the Developer (and their respective successors and assigns), any rights, remedies, obligations or liabilities under or by reason of this Acquisition Agreement.

Section 7.07. Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be 748
31 4162-7921-4645.3
given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other party in writing from time to time, namely:

Community Facilities District: City of Fontana Community Facilities District No. 109 (Narra Hills)
c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: City Clerk
City: City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Chief Financial Officer, Management Services Developer: LS-FONTANA LLC
7525 Irvine Center Dr., Suite 200
Irvine, California 92618
Attention: Shannon Whittaker, Senior Forward
Planner
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, or (d) if given by any other means, upon delivery at the address specified in this Section.

Section 7.08. Attorneys’ Fees. If any action is instituted to interpret or enforce any of the provisions of this Acquisition Agreement, the party prevailing in such action shall be entitled to recover from the other party thereto reasonable attorney’s fees and costs of such suit (including both prejudgment and postjudgment fees and costs) as determined by the court as part of the judgment.

Section 7.09. Jurisdiction and Venue. Each of the Community Facilities District, the City and the Developer (a) agrees that any suit, action or other legal proceeding arising out of or relating to this Acquisition Agreement shall be brought in a state or local court in the County of San Bernardino or in the Courts of the United States of America in the district in which said county is located, (b) consents to the jurisdiction of each such court in any such suit, action or proceeding, and (c) waives any objection that it may have to the laying of venue of any suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Each of the Community Facilities District, the City and the Developer agrees that a final and non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
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32 4162-7921-4645.3
Section 7.10. Governing Law. This Acquisition Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State.

Section 7.11. Usage of Words. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.

Section 7.12. Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original. 750
IN WITI\ESS WHEREOF, the parties hereto have executed this Acquisition Agreement as of the day and year first hereinabove written.

CITY OF FONTANA COMMT]NITY
FACILITIES DISTRICT NO. 109
(NARRA HILLS)
By:

Matthew C. Ballantyne,
City Manager of the City of Fontana

CITY OF FONTANA
By:

Maffhew C. Ballantyne,
City Manager

LS-FONTANA LLC,
a Delaware limited liability company
By:
om Baine,
Division President
4162-79214645.3
JJ
751
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4162-7921-4645.3

EXHIBIT A

ACQUISITION FACILITIES
Segment/Component
Acquisition
Cost
Circulation / Traffic Improvements
Coyote Canyon street improvements, consisting of mobilization, roadway, curb, gutter, and sidewalk improvements together with all other appurtenant improvements, including design, planning, engineering, surveying and staking, plan check and inspection fees.
$1,559,159
Traffic signal for the intersections of Coyote Canyon Road and Duncan Canyon Road , including related street improvements, signing and striping, and related design, planning, engineering, surveying and staking, plan check, inspection fees and other related costs.
$843,125
Subtotal $2,402,284
Sanitary Sewer Improvements
Sanitary sewer improvements located in Coyote Canyon Road associated with Tract 20010 sewer mainline, sewer laterals, manholes, cleanouts, caps, plugs, testing, points of connection and other appurtenances, including design, planning, engineering, surveying and staking, plan check and inspection fees. $583,087
Sanitary sewer improvements located in Duncan Canyon Road associated with Tract 20010 sewer mainline, sewer laterals, manholes, cleanouts, caps, plugs, testing, points of connection and other appurtenances, including design, planning, engineering, surveying and staking, plan check and inspection fees. $261,162
Sanitary sewer improvements associated with Tract 20010 (Lots 156-233), consisting of opening and closing streets (including asphalt removal and grind and overlay as needed for sewer improvements), sewer mainline, sewer laterals, manholes, cleanouts, caps, plugs, testing, points of connection and other appurtenances, including design, planning, engineering, surveying and staking, plan check and inspection fees.
$1,385,007
Sanitary sewer improvements associated with Tract 20010 (Lots 234-236), consisting of opening and closing streets (including asphalt removal and grind and overlay as needed for sewer improvements), sewer mainline, sewer laterals, manholes, cleanouts, caps, plugs, testing, points of connection and other appurtenances, including design, planning, engineering, surveying and staking, plan check and inspection fees.
$869,567
Subtotal $3,098,823
752
A-2
4162-7921-4645.3
Segment/Component
Acquisition
Cost
Storm Drain Improvements
Bypass Storm Drain and Backbone Storm Drain improvements associated with Tract 20010 located in Coyote Canyon Road, Habitat Drive, Papilio Court, Conservatory Drive, and Pipevine Lane consisting of opening and closing streets (including asphalt removal and grind and overlay as needed for storm drain improvements) including design, planning, engineering, surveying and staking, plan check and inspection fees.
$2,854,302
Storm Drain improvements associated with Tract 20010 located in Coyote Canyon Road consisting of opening and closing streets (including asphalt removal and grind and overlay as needed for storm drain improvements), including design, planning, engineering, surveying and staking, plan check and inspection fees.
$296,965
Subtotal $3,151,267
TOTAL: $8,652,374
753
B-1
4162-7921-4645.3

EXHIBIT B

FORM OF PAYMENT REQUEST
City of Fontana
Community Facilities District No. 109
(Narra Hills)
LS-FONTANA LLC (the “Developer”), hereby requests payment of the Purchase Price of the Segment or Segments described in Attachment A attached hereto. Capitalized undefined terms shall have the meanings ascribed thereto in the Acquisition and Funding Agreement, dated as of June 1, 2022 (the “Acquisition Agreement”), by and among the City of Fontana Community Facilities District No. 109 (Narra Hills) (the “Community Facilities District”), the City of Fontana (the “City”), and the Developer. In connection with this Payment Request, the undersigned hereby represents and warrants to the Community Facilities District and the City as follows:

1. The undersigned is a Developer Representative, qualified to execute this request for payment on behalf of the Developer and knowledgeable as to the matters set forth herein.

2. The Developer has submitted or submits herewith to the City Engineer as-built drawings or similar plans and specifications for the Segments for which payment is requested, and such drawings or plans and specifications, as applicable, are true, correct and complete; provided, however, that if such Segment is Substantially Complete but not Complete, such drawings or plans and specifications need not be submitted to the City Engineer until such Segment is Complete.

3. Each of the Segments described in Attachment A has been constructed in accordance with the Plans therefor, and in accordance with all applicable City standards and the requirements of the Acquisition Agreement, and the as-built drawings or similar Plans and specifications referenced in paragraph 2 above.

4. The true and correct Actual Cost of each Segment for which payment is requested is set forth in Attachment A.

6. The Developer has submitted or submits herewith to the City Engineer invoices, receipts, worksheets and other evidence of costs which are in sufficient detail to allow the City Engineer to verify the Actual Cost of each Segment for which payment is requested.

7. There has not been filed with or served upon the Developer notice of any lien, right to lien or attachment upon, or claim affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law. Copies of lien releases for all work for which payment is requested hereunder are attached hereto.

8. No event listed in subsection (a) of Section 6.02 of the Acquisition Agreement has occurred and is continuing or will occur upon the making of any payment requested hereunder.

9. The representations and warranties of the Developer set forth in Section 5.01 of the Acquisition Agreement are true and correct on and as of the date hereof with the same force and 754
B-2
4162-7921-4645.3
effect as if made on and as of the date hereof (except that no certification is made with respect to the representations and warranties contained in subsections (d) and (f) of said Section 5.01).

10. The Developer represents and warrants that, as of the date hereof, there is not present on, under or in any Segment described in Attachment A or the Related Property of such Segment, or any portion thereof, any Hazardous Materials, except for (i) any types or amounts that do not require remediation or mitigation under federal, state or local laws, ordinances, regulations, rules or decisions, (ii) those that have been remediated or mitigated in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions, (iii) those with respect to which ongoing remediation or mitigation is being performed in full compliance with applicable federal, state or local laws, ordinances, regulations, rules or decisions or (iv) any types or amounts that do not present a human health risk or hazard to the public.

I hereby declare under penalty of perjury that the above representations and warranties are true and correct.

Date: LS-FONTANA LLC,
a Delaware limited liability company
By:

Name: ______________________________
Title:
755
B-3
4162-7921-4645.3

APPROVAL BY THE CITY ENGINEER
[The City Engineer has confirmed that each Segment described in Attachment A is Complete and was constructed in accordance with the Plans therefor and the Actual Cost of each Segment described in Attachment A has been reviewed, verified and approved by the City Engineer. Payment of the full Purchase Price of each such Segment is hereby approved.] [The City Engineer has confirmed that each Segment described in Attachment A is Substantially Complete and was constructed in accordance with the Plans therefor and the Actual Cost of each Segment described in Attachment A has been reviewed, verified and approved by the City Engineer. Payment of $_______, an amount equal to 90% of the sum of the lesser of (a) the Actual Cost, or (b) the Acquisition Cost of each such Segment is hereby approved.] [The City Engineer previously confirmed that each Segment described in Attachment A was Substantially Complete and previously approved the payment of $_______, an amount equal to the sum of the lesser of (a) the Actual Cost, or (b) the Acquisition Cost of each Segment described in Attachment A. The City Engineer has now confirmed that each Segment described in Attachment A is Complete and was constructed in accordance with the Plans therefor and the Actual Cost of each Segment described in Attachment A has been reviewed, verified and approved by the City Engineer. Payment of $_______, an amount equal to the sum of the remainder of (a) the Purchase Price of each such Segment, less (b) the amount previously paid with respect to such Segment is hereby approved.]
Date: CITY ENGINEER OF THE CITY OF

FONTANA
By:
756
B-4
4162-7921-4645.3

ATTACHMENT A
Segment Acquisition Cost Actual Cost Purchase Price*
Total Purchase Price to be Paid:
_________________________
*Lesser of Acquisition Cost or Actual Cost
757
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1328 Agenda Date: 6/14/2022
Agenda #: B. Category: Public Hearing
FROM:

Housing
SUBJECT:

Public Hearing and Adoption of HUD Community Development Block Grant, HOME Investment Partnerships Program, and Emergency Solutions Grant 2022 Annual Action Plan RECOMMENDATION:

1. Adopt the draft FY2022-23 Annual Action Plan for Community Development Block Grant (CDBG), HOME Investment Partnerships Program (HOME), and Emergency Solutions Grant (ESG) programming;

2. Authorize the City Manager, or City Manager’sdesignee, to execute and transmit any documents necessary or desirable, including but not limited to purchase agreements that may include acquisitions costs up to the full amount of the allocated funds, to ensure the City's timely receipt and execution of Community Development Block Grant (CDBG), HOME Investment Partnerships Program (HOME), and Emergency Solutions Grant (ESG) programs;

3. Authorize the City Manager, or City Manager’sdesignee, to execute and transmit any documents necessary or desirable, including but not limited to purchase agreements that may include acquisitions costs up to the full amount of the allocated funds, to facilitate the timely administration of the Community Development Block Grant (CDBG) Acquisition, Rehabilitation, and Rental Program including but not limited to property purchase agreements.

COUNCIL GOALS:
· To practice sound fiscal management by producing timely and accurate financial information. · To concentrate on inter-governmental relations by pursuing financial participation from county, state and federal governments.

DISCUSSION:

The City of Fontana receives Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), and Emergency Solutions Grant (ESG) funds from the U.S. Department of Housing and Urban Development (HUD) each year. In order to receive these funds, HUD mandates that all entitlement communities receiving CDBG, HOME and ESG funds prepare and submit an Action Plan outlining the planned projects, one-year goals and budgets for the CDBG, HOME and ESG programs to be implemented in an effort to address the priority needs and goals identified in the 2020-2024 Consolidated Plan. Six of the seven priority goals will be addressed in the 2022-23 Action Plan. This Action Plan does not include any funds for public facilities and infrastructure activities.

HUD announced annual allocations for 2022 on May 17, 2022. Next fiscal year, the City will receive City of Fontana Printed on 6/8/2022Page 1 of 3
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an $1.9 million of CDBG funds, $758,888 of HOME funds and $179,126 of ESG funds from HUD. In addition, the City has $2,126,347.45 in carryover HOME funds set aside for future affordable housing projects and activities.

The following CDBG projects are included in the draft FY2022-23 Action Plan:

Strategy/Goal Project Funding
N/A CDBG Administration $361,502
Ensure equal access to housing
opportunities/ Fair housing services
Fair Housing $37,500
Provide public services for low-income
residents/families
Public Safety and Recreational
Scholarships
$299,251
Expand the supply of affordable
housing
Acquisition, Rehabilitation, and
Rental Program
$1,296,757
Total: $1,995,010
The CDBG Acquisition, Rehabilitation, and Rental Program is designed to increase the City’s affordable housing stock by purchasing, rehabilitating, and renting single-family properties to income- eligible households at or below 80% Area Median Income (AMI). The Housing staff bids on and purchases properties that are available on the market for sale and then rehabilitates them, in order to offer suitable living conditions for low-income families.

In order to have a successful program and to ensure that staff is able to compete with private purchasers, the following processes have been established:
· The Housing Development Manager would be authorized to submit offers on potential properties
· The Deputy City Manager (for purchases up to $50,000) or the City Manager (for all purchases over $50,000 and up to the full amount of allocated funds) would be authorized to finalize any contractual and/or escrow documents in order to purchase the properties. · Only the City Manager would be authorized to sign the Certificate of Acceptance that is attached to the Grant Deed to complete the acquisition.

Staff will report to City Council annually on property purchases in the Consolidated Annual Performance and Evaluation Report (CAPER).

The following HOME projects are included in the draft Action Plan:

Strategy/GoalProjectFunding
N/A HOME Administration $75,888
Ensure equal access to housing
opportunities/ Fair housing services
Affordable Rental Housing
(including CHDO set-aside)
$683,000
Total: $758,888
The following ESG projects are included in the draft Action Plan:

Strategy/GoalProjectFunding
N/A ESG Administration $13,434
Prevent and eliminate homelessness
& homelessness prevention services.

Homelessness Prevention $124,269
Prevent and eliminate homelessness
& homelessness prevention services.

Rapid Re-Housing Program $41,423
Total: $179,126
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File #: 21-1328 Agenda Date: 6/14/2022
Agenda #: B. Category: Public HearingStrategy/GoalProjectFunding N/A ESG Administration $13,434
Prevent and eliminate homelessness
& homelessness prevention services.

Homelessness Prevention $124,269
Prevent and eliminate homelessness
& homelessness prevention services.

Rapid Re-Housing Program $41,423
Total: $179,126
Citizen Participation in the Development of the draft One-Year Action Plan In compliance with federal regulations and the City’sadopted Citizen Participation Plan, the Notice of Public Hearing and notice of availability of the aforementioned draft documents were published in the Press Enterprise, San Bernardino Sun and the El Chicano on May 12, 2022.

The draft documents were made available for public review and comment from May 13, 2022 through June 14, 2022 at the Library and multiple locations at City Hall/Development Services buildings.

Additionally, it was posted on the City’swebsite. The Public Hearing scheduled for June 14, 2022, at 7:00 p.m. provides another opportunity for public input. Any and all comments received during the process (at public meetings and/or in writing) with respect to a particular draft document will be incorporated into the final draft document, as applicable, prior to submission to HUD.

FISCAL IMPACT:

Appropriate approximately $1,995,010 of federal Community Development Block Grant (CDBG) program funds, $758,888 of HOME Investment Partnerships (HOME) funds, and $179,126 of Emergency Solutions Grant (ESG) funds in FY 2022-23. Expenditure and revenue budgets will be adjusted based on the actual federal allocation at FY 2022-23 1st Quarter Budget adjustments to Fund 362 and 363 in various project strings.

MOTION:

Approve Staff Recommendation
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Annual Action Plan
FY 2022-2023

Draft
Public Review
May 16, 2022

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Table of Contents
Executive Summary ............................................................................................................................ - 1 - AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b) ............................................................... - 1 - PR-05 Lead & Responsible Agencies – 91.200(b) ............................................................................. - 4 - AP-10 Consultation – 91.100, 91.200(b), 91.215(l) .......................................................................... - 5 - AP-12 Participation – 91.105, 91.200(c) ........................................................................................ - 20 - Expected Resources ......................................................................................................................... - 21 - AP-15 Expected Resources – 91.220(c)(1,2) ................................................................................. - 21 - Annual Goals and Objectives ............................................................................................................ - 25 - AP-20 Annual Goals and Objectives............................................................................................... - 25 - AP-35 Projects – 91.220(d) ........................................................................................................... - 27 - AP-38 Project Summary ................................................................................................................ - 28 - AP-50 Geographic Distribution – 91.220(f) ..................................................................................... - 31 - Affordable Housing ........................................................................................................................... - 32 - AP-55 Affordable Housing – 91.220(g) ........................................................................................... - 32 - AP-60 Public Housing – 91.220(h) ................................................................................................. - 34 - AP-65 Homeless and Other Special Needs Activities – 91.220(i) ..................................................... - 34 - AP-75 Barriers to affordable housing – 91.220(j) ............................................................................ - 40 - AP-85 Other Actions – 91.220(k) ................................................................................................... - 41 - Program Specific Requirements ........................................................................................................ - 44 - AP-90 Program Specific Requirements – 91.220(l)(1,2,4) ............................................................... - 44 -

Action Plan Tables
Table 1 – Responsible Agencies .......................................................................................................... - 4 - Table 2 - Agencies, groups, organizations who participated................................................................ - 17 - Table 3 – Other local/ regional/ federal planning efforts....................................................................... - 18 - Table 4 – Citizen Participation Outreach ............................................................................................ - 20 - Table 5 - Expected Resources – Priority Table ................................................................................... - 22 - Table 6 – Goals Summary ................................................................................................................. - 25 - Table 7 - Goals Description ............................................................................................................... - 26 - Table 8 - Project Information ............................................................................................................. - 27 - Table 9 - Project Summary ................................................................................................................ - 30 - 763
City of Fontana iii 2022 Annual Action Plan

Table 10 - Geographic Distribution .................................................................................................... - 31 - Table 11 - One Year Goals for Affordable Housing by Support Requirement ........................................ - 33 - Table 12 - One Year Goals for Affordable Housing by Support Type ................................................... - 33 -

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City of Fontana iv 2022 Annual Action Plan

Version History
No. Summary of Changes
1 Published Draft for Public Comment: Sent to HUD for Approval:

Conducted Public Hearing: Approved by HUD:

765
City of Fontana - 1 - 2022 Annual Action Plan

Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)

1. Introduction
The 2022-2023 Action Plan is the City of Fontana’s Annual Plan for the investment of annual allocations of Community Development Block Grant (CDBG), Home Investment Partnerships (HOME) and Emergency Solutions Grant (ESG) funds from the U.S. Department of Housing and Urban Development (HUD) during the fiscal year 2022-2023. These grant programs are consistent with HUD’s national strategy to provide decent housing opportunities, a suitable living environment, and economic opportunities—particularly for low- and moderate-income people.

In consideration of finite grant resources, the goals and projects within this Action Plan outline the areas and population segments with the greatest level of need for a particular program or activity and intends to invest grant resources in high leverage opportunities where data suggests the City will be able to maximize the impact of every dollar. The Action Plan utilizes the priority needs identified in the 2020 – 2024 Consolidated Plan process, which identified the City’s priority needs, including the rationale for establishing allocation priorities and specific measurable goals to be addressed during the five-year period.

Within the 2022-2023 Action Plan, the City proposes the following activities:
2022-2023 CDBG PROGRAM

Public Service Activities
Public Safety $240,000
Scholarship Program $ 59,251
Capital Activities
Rental Housing Acquisition/Rehabilitation Program $ 1,296,757 Program Administration Activities
CDBG Program Administration $3 61,502
Inland Fair Housing & Mediation Board: Fair Housing Services $ 37,500

2022-2023 HOME PROGRAM

Housing Activities
Project TBD $5 69,166
CHDO TBD $ 113,834
Program Administration Activities
HOME Program Administration $7 5,888

2022-2023 ESG PROGRAM

Homeless Activities
Homeless Prevention $124,269
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City of Fontana - 2 - 2022 Annual Action Plan

Rapid Rehousing $41,423
ESG Administration $13,434

2. Summarize the objectives and outcomes identified in the Plan HUD’s Community Planning and Development (CPD) Outcome Performance Measurement Framework classifies objectives in three categories: decent housing, a suitable living environment, and economic opportunity. Based on the Consolidated Plan process conducted in 2020, the City’s current Strategic Plan identifies seven high priority needs to be addressed through the implementation of activities aligned with seven Strategic Plan goals.

The high priority needs for Fontana include:
• Preserve the supply of affordable housing
• Expand the supply of affordable housing
• Ensure equal access to housing opportunities
• Prevent and eliminate homelessness
• Provide public services for low-income residents
• Improve public facilities and infrastructure
• Provide for program administration
Consistent with HUD’s national goals for the CDBG, ESG and HOME programs to provide decent housing opportunities, maintain a suitable living environment and expand economic opportunities for low- and moderate-income residents, the priority needs listed above will be addressed over the remaining three years through the implementation of CDBG, ESG and HOME funded activities aligned with the following seven measurable Strategic Plan goals:
• Affordable housing preservation
• Affordable rental housing development
• Fair housing services
• Homelessness prevention services
• Public Services for low-income families
• City of Fontana public facilities improvements
• Program administration
Activities proposed in the 2022 Action Plan address the following goals:
• Affordable rental housing development
• Fair housing services
• Homelessness prevention services
• Public Services for low-income families
• Program administration
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City of Fontana - 3 - 2022 Annual Action Plan

3. Evaluation of past performance
During the 2020 and 2021 program years, the City of Fontana prioritized program activities to address the impacts of the COVID-19 pandemic within the City of Fontana. Activities included rental and mortgage assistance, small and microbusiness support, homeless prevention, and targeted public service activities.

Additionally, the City conducted the following projects:

1. Public Safety Assistance

2. Housing Rehabilitation

3. Southridge Affordable Housing development preparation

4. Homeless prevention/ rapid-rehousing

4. Summary of Citizen Participation Process and consultation process In accordance with the City of Fontana's Citizen Participation Plan (CPP), the City conducted a 30-day public comment period from May 16 to June 14, 2022. The City conducted a public hearing June 14, 2022 to receive comments on the draft Action Plan. As noted in the City's CPP, the second public hearing required during the program year is conducted during the CAPER process.

5. Summary of public comments
TBD

6. Summary of comments or views not accepted and the reasons for not accepting them TBD

7. Summary
TBD

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City of Fontana - 4 - 2022 Annual Action Plan

PR-05 Lead & Responsible Agencies – 91.200(b)

1. Agency/entity responsible for preparing/administering the Consolidated Plan The following are the agencies/entities responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source.

Agency Role Name Department/Agency
CDBG Administrator FONTANA Housing Department
HOME Administrator FONTANA Housing Department
ESG Administrator FONTANA Housing Department
Table 1 – Responsible Agencies
Narrative
The City of Fontana Housing Department is the lead agency responsible for the administration of the CDBG, HOME, and ESG programs. The Housing Department is responsible for the day-to-day implementation of the programs and the development of the Five-Year Consolidated Plan and the Annual Action Plan. In addition, the City has contracted with MDG Associates, Inc. to prepare the 2022 Annual Action Plan.

In the development of this Consolidated Plan, MDG Associates, Inc. developed and implemented a comprehensive citizen participation and consultation process and conducted a needs assessment and market analysis to identify levels of relative need regarding affordable housing, homelessness, special needs, and community development. This information was gathered through consultation with public officials and local agencies, public outreach and community meetings, review of demographic and economic data, and housing market analysis.

In the implementation of the 2022 Annual Action Plan, the Housing Department shall be responsible for all grants planning, management, and monitoring duties necessary to comply with HUD regulations and City policy.

Consolidated Plan Public Contact Information
Valerie Gonzales, Housing Development Manager
8353 Sierra Avenue
Fontana, CA 92335
(909) 350-6739
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City of Fontana - 5 - 2022 Annual Action Plan

AP-10 Consultation – 91.100, 91.200(b), 91.215(l)

1. Introduction
As part of the Consolidated Planning process the City of Fontana consulted with representatives from multiple agencies, groups, and organizations involved in the development of affordable housing, creation of job opportunities for low- and moderate-income residents, and/or provision of services to children, elderly persons, persons with disabilities, persons with HIV/AIDS and their families, and homeless persons. To facilitate this consultation, the City solicited feedback through the following methods:
• Stakeholder surveys (web-based and paper-surveys)
• Individual stakeholder consultations
• Community meetings
• Public hearings
• Receipt of written comments
The input gathered from these consultation partners helped establish and inform the objectives and goals described in the Strategic Plan. Specific comments received from consultation partners are included in the Attachments section of the Consolidated Plan.

Provide a concise summary of the jurisdic tion’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(I)).

The City recognizes the importance of careful coordination and alignment among various service providers to maximize the effectiveness of their programs. As a result, during the development of this Consolidated Plan, the City consulted closely with organizations that provide assisted housing, health services and other community-focused agencies. Outreach efforts included surveys which addressed coordination, invitations to community meetings and follow-up in-person interviews where appropriate.

The City further recognizes the importance of continued coordination and alignment throughout the five- year planning period with these organizations and agencies. The City will continue strengthening relationships and alignment among these organizations.

Describe coordination with the Continuum of Care and efforts to address the needs of homeless pe rsons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness San Bernardino County’s homeless Continuum of Care (COC) is comprised of a network of public, private, faith-based, for-profit, and nonprofit service providers who utilize several federal, state and local resources to provide services for homeless people. The region’s municipalities, including the City of Fontana, also provide resources for services that assist the homeless and those at risk of becoming homeless. The 770
City of Fontana - 6 - 2022 Annual Action Plan

nonprofit and faith-based community plays a key role in the current COC system. Hundreds of agencies throughout the County provide programs ranging from feeding the homeless on the street to creating permanent supportive housing opportunities. These services are available to homeless families with children, and single men and women. The nonprofit and faith-based community also serves special needs populations, such as victims of domestic violence, veterans, the disabled and youth.

The COC guides the development of homeless strategies and the implementation of programs to end homelessness throughout the region. The City provided a detailed questionnaire to the COC to identify the COC’s perceived needs in the county and its objectives to address the needs of different homeless persons populations, specifically chronically homeless families and individuals, families with children, veterans, unaccompanied youth and persons at risk of homelessness. Following the delivery and response to this questionnaire, the City followed up with the COC to clarify existing needs and objectives and understand opportunities for collaboration and coordination during the five-year planning process.

Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards and evaluate outcomes, and develop funding, policies and procedures for the administration of HMIS
In the development of the 2020-2024 Consolidated Plan, the City of Fontana consulted 84 housing, social services, governmental and other entities involved in housing and community development in Fontana and throughout the region to obtain valuable information on the priority needs in the City and how CDBG, ESG, HOME, and other resources should be invested to provide decent affordable housing, a suitable living environment and economic opportunities for low- and moderate-income residents. The San Bernardino County Continuum of Care (COC) was consulted directly in person, by telephone, and by email to discuss performance standards, outcomes, and policies and procedures for HMIS.

Through a competitive process Water of Life Church was awarded a multi-year ESG subrecipient contract for provision of homeless services. FY 2022 is the last year of the contract. The Water of Life Church must comply with the City’s performance standards and achieve established outcomes.

The table below provides a listing of the entities consulted as part of this planning process.

771
City of Fontana - 7 - 2022 Annual Action Plan

2. Describe Agencies, groups, organizations a nd others who participated in the process and describe the jurisdictions consultations with housing, social service agencies and other entities 1 Agency/Group/Organization San Bernardino County Interagency Council on Homelessness
Agency/Group/Organization Type Services-homeless
Regional organization
What section of the Plan was addressed
by Consultation?
Homelessness Strategy
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
In person, personal calls, sent letter and e-mail with
copy of Needs Survey as well as link to the survey.

Through this consultation, Fontana preserved lines of
communication between the stakeholder and the City
to be an active participant in housing and community
development planning in the jurisdiction. Fontana
sought specific input, feedback, and recommendations
related to the topics highlighted above from this
stakeholder.
2 Agency/Group/Organization Palm Communities
Agency/Group/Organization Type Housing
What section of the Plan was addressed
by Consultation?
Housing Need Assessment
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
3 Agency/Group/Organization San Bernardino County Housing Authority Agency/Group/Organization Type PHA
What section of the Plan was addressed
by Consultation?
Public Housing Needs
772
City of Fontana - 8 - 2022 Annual Action Plan

How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Personal call, emails and sent letter and e-mail with
copy of Needs Survey as well as link to the survey.

Through this consultation, Fontana preserved lines of
communication between the stakeholder and the City
to be an active participant in housing and community
development planning in the jurisdiction. Fontana
sought specific input, feedback, and recommendations
related to the topics highlighted above from this
stakeholder.
4 Agency/Group/Organization City of Fontana Housing Authority Agency/Group/Organization Type PHA
What section of the Plan was addressed
by Consultation?
Public Housing Needs
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Personal calls and sent letter and e-mail with copy of
Needs Survey as well as link to the survey. Through this consultation, Fontana preserved lines of
communication between the stakeholder and the City
to be an active participant in housing and community
development planning in the jurisdiction. Fontana
sought specific input, feedback, and recommendations
related to the topics highlighted above from this
stakeholder.
5 Agency/Group/Organization Fontana Unified School District Agency/Group/Organization Type Services-Children
Services-Education
Other government - Local
What section of the Plan was addressed
by Consultation?
Public Services
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
6 Agency/Group/Organization Water of Life Church
Agency/Group/Organization Type Services-Homeless
773
City of Fontana - 9 - 2022 Annual Action Plan

What section of the Plan was addressed
by Consultation?
Homeless Needs-Chronically homeless
Homeless Needs-Veterans
Homeless Needs-Families with Children
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
7 Agency/Group/Organization BOYS AND GIRLS CLUB OF FONTANA Agency/Group/Organization Type Services-Children
What section of the Plan was addressed
by Consultation?
Other-Public Services
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
8 Agency/Group/Organization Jamboree Housing
Agency/Group/Organization Type Housing
What section of the Plan was addressed
by Consultation?
Housing Need Assessment
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
9 Agency/Group/Organization California Apartment Association Agency/Group/Organization Type Services-Housing
774
City of Fontana - 10 - 2022 Annual Action Plan

What section of the Plan was addressed
by Consultation?
Housing Needs Assessment
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
10 Agency/Group/Organization OPARC
Agency/Group/Organization Type Services-Persons with Disabilities What section of the Plan was addressed
by Consultation?
Non-Homeless Special Needs
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
11 Agency/Group/Organization Inland Regional Center
Agency/Group/Organization Type Services-Persons with Disabilities What section of the Plan was addressed
by Consultation?
Non-Homeless Special Needs
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
12 Agency/Group/Organization Foothill AIDS Project
Agency/Group/Organization Type Services-Persons with HIV/AIDS 775
City of Fontana - 11 - 2022 Annual Action Plan

What section of the Plan was addressed
by Consultation?
Non-Homeless Special Needs
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
13 Agency/Group/Organization OPTION HOUSE
Agency/Group/Organization Type Services-Victims of Domestic Violence What section of the Plan was addressed
by Consultation?
Non-Homeless Special Needs
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
14 Agency/Group/Organization FRAZEE COMMUNITY CENTER
Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed
by Consultation?
Homelessness Strategy
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
776
City of Fontana - 12 - 2022 Annual Action Plan

15 Agency/Group/Organization San Bernardino County Homeless Provider Network Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed
by Consultation?
Homelessness Strategy
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
16 Agency/Group/Organization COC SB County Office of Homeless Services Agency/Group/Organization Type Services-homeless
What section of the Plan was addressed
by Consultation?
Homelessness Strategy
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
17 Agency/Group/Organization SAN BERNARDINO COUNTY LIBRARY Agency/Group/Organization Type Services-Education
Other government - County
What section of the Plan was addressed
by Consultation?
Non-Homeless Special Needs
777
City of Fontana - 13 - 2022 Annual Action Plan

How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
18 Agency/Group/Organization Quality Management Group
Agency/Group/Organization Type Housing
What section of the Plan was addressed
by Consultation?
Housing Needs Assessment
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
19 Agency/Group/Organization San Bernardino County Superintendent of Schools Agency/Group/Organization Type Services-Education
What section of the Plan was addressed
by Consultation?
Homeless Needs - Families with children
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana preserved lines of communication between the
stakeholder and the City to be an active participant in housing and community development planning in the
jurisdiction. Fontana sought specific input, feedback,
and recommendations related to the topics highlighted
above from this stakeholder.
20 Agency/Group/Organization Chaffey College - Fontana Campus Agency/Group/Organization Type Services-Education
Other government - Local
What section of the Plan was addressed
by Consultation?
Other-Public Education
778
City of Fontana - 14 - 2022 Annual Action Plan

How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
21 Agency/Group/Organization CA SBDC Small Business Development Center Agency/Group/Organization Type Services-Employment
What section of the Plan was addressed
by Consultation?
Economic Development
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
22 Agency/Group/Organization Inland Empire Economic Partnership (IEEP) Agency/Group/Organization Type Services-Employment
What section of the Plan was addressed
by Consultation?
Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
23 Agency/Group/Organization San Bernardino County Workforce Investment Board Agency/Group/Organization Type Services-Employment
What section of the Plan was addressed
by Consultation?
Economic Development
779
City of Fontana - 15 - 2022 Annual Action Plan

How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
24 Agency/Group/Organization Inland Fair Housing and Mediation Board (IFHMB) Agency/Group/Organization Type Service-Fair Housing
What section of the Plan was addressed
by Consultation?
Housing Need Assessment
Homelessness Strategy
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
25 Agency/Group/Organization San Bernardino County Transitional Assistance Department
Agency/Group/Organization Type Services-Children
Child Welfare Agency
Other government - Local
What section of the Plan was addressed
by Consultation?
Public Services
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
780
City of Fontana - 16 - 2022 Annual Action Plan

26 Agency/Group/Organization San Bernardino County Department of Behavioral Health
Agency/Group/Organization Type Publicly Funded Institution/System of Care What section of the Plan was addressed
by Consultation?
Public Health
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
27 Agency/Group/Organization City of Fontana Chamber of Commerce Agency/Group/Organization Type Business and Civic Leaders What section of the Plan was addressed
by Consultation?
Economic Development
How was the Agency/Group/Organization
consulted and what are the anticipated
outcomes of the consultation or areas for
improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
28 Agency/Group/Organization Southern CA Council of Governments (SCAG) Agency/Group/Organization Type Regional organization
What section of the Plan was addressed
by Consultation?
Economic Development
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
781
City of Fontana - 17 - 2022 Annual Action Plan

29 Agency/Group/Organization City of Fontana Police Department Agency/Group/Organization Type Government – Local
What section of the Plan was addressed
by Consultation?
Public Safety
Correctional program
Homeless Assistance
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.
30 Agency/Group/Organization Target Store (Fontana North) Agency/Group/Organization Type Business Leaders
What section of the Plan was addressed
by Consultation?
Economic Development
How was the Agency/Group/
Organization consulted and what are the
anticipated outcomes of the consultation
or areas for improved coordination?
Sent letter and e-mail with copy of Needs Survey as
well as link to the survey. Through this consultation,
Fontana opened or preserved lines of communication
between the stakeholder and the City to be an active
participant in housing and community development
planning in the jurisdiction. Fontana sought specific
input, feedback, and recommendations related to the
topics highlighted above from this stakeholder.

Table 2 - Agencies, groups, organizations who participated Identify any Agency Types not consulted and provide rationale for not consulting The City attempts to maintain a current and comprehensive list of agencies, organizations and other stakeholders and invited representatives from each entity to participate in the planning process at multiple points. If an agency did not attend meetings or participate in surveys, it was done so by the agency’s choice.

If an agency or organization was not consulted and would like to be included in the City’s list of stakeholders, the agency or organization may contact the CDBG Project Specialist at (909) 350-6625. 782
City of Fontana - 18 - 2022 Annual Action Plan

Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead
Organization
How do the goals of your Strategic Plan overlap with the goals of each plan?
Continuum of
Care
County of San
Bernardino
Department of
Public Social
Services -
Homeless
Programs Unit

The Homelessness Prevention Services goal of the Strategic Plan is consistent with the County of San Bernardino Homelessness Action Plan.

City of Fontana
2021-2029
Housing
Element
City of Fontana
Community
Development
Department
The goals of the Strategic Plan are consistent with the Housing Element with respect to affordable housing development, affordable housing preservation and furthering fair housing choice.

Table 3 – Other local/ regional/ federal planning efforts

783
City of Fontana - 19 - 2022 Annual Action Plan

Describe cooperation and coordination with other public entities, including the State and any adjacent units of general local government, in the implementation of the Consolidated Plan (91.215(l)) In the development of the 2020-2024 Consolidated Plan, the City afforded the following other public entities with the opportunity to provide input on the Consolidated Plan and welcomes their input concerning the future implementation of projects to address the nine Strategic Plan goals:
• City of Rialto
• City of Rancho Cucamonga
• City of San Bernardino
• Council on Aging
• County of San Bernardino
• Court Appointed Special Advocates (CASA)
• Federal Emergency Management Agency (FEMA)
• Fontana Unified School District
• Housing Authority of the County of San Bernardino
• Inland Empire Regional Broadband Consortium
• Inland Regional Center
• San Bernardino Associated Governments (SANBAG)
• San Bernardino County Economic Development Agency
• San Bernardino County Environmental Health Department • San Bernardino County Public Health Department
• San Bernardino County Pre-School Services Department
• San Bernardino County Transportation Commission (RCTC) • San Bernardino County Sheriff’s Department (POP Program) • San Bernardino County Victims Services
• Southern California Council of Governments (SCAG)
• State of California Department of Housing and Community Development • State of California Employment Development Department • U.S Department of the Interior – Bureau of Land Management

784
City of Fontana - 20 - 2022 Annual Action Plan

AP-12 Participation – 91.105, 91.200(c)

1. Summary of citizen participation process/Efforts made to broaden citizen participation In accordance with the City of Fontana’s Citizen Participation Plan, the City conducts two public hearings during the program year to gather feedback on program activities, needs, and accomplishments. The City conducted its first public hearing to review the draft CAPER in 2021. The second public hearing, to gather feedback on the draft Annual Action Plan, was conducted on June 14, 2022.

Additionally, the City made the draft Action Plan available for comment for a period of 30 days.

Citizen Participation Outreach
Sort Order Mode of Outreach Target of Outreach Summary of response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If
applicable)
1 Comment Period All TBD TBD n/a n/a
2 Public Hearing
(6/14/2022)
All TBD TBD n/a n/a
Table 4 – Citizen Participation Outreach

785
City of Fontana - 21 - 2022 Annual Action Plan

Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
For the 2022-23 program year, the City will receive $1,995,010 in CDBG funds, $179,126 in ESG funds and $758,888 in HOME funds and from HUD for the following program activities to be implemented from July 1, 2022 to June 30, 2023.

786
City of Fontana - 22 - 2022 Annual Action Plan

Anticipated Resources
Program Source of
Funds Uses of Funds
Expected Amount Available Year 3 Expected
Amount
Available
Remainder of
ConPlan
$
Narrative
Description
Annual
Allocation: $
Program
Income: $
Prior Year
Resources: $
Total:
$
CDBG public -
federal
• Admin and
Planning
• Housing
• Public
Improvements
Public Services
1,995,010 0 892,466 2,887,476 4,300,000 The expected
amount available
for the remainder
of the
Consolidated
Plan period
assumes level
funding in future
years.

HOME public -
federal
• Acquisition/
Rehabilitation
Multifamily rental new
construction
758,888 95,861 2,030,486 2,885,235 1,400,000 The expected amount available
for the remainder
of the
Consolidated
Plan period
assumes level
funding in future
years.

ESG public -
federal
Rapid re-housing &
homeless prevention
179,126 0 0 179,126 355,000 The expected
amount available
for the remainder
of the
Consolidated
Plan period
assumes level
funding in future
years.

Table 5 - Expected Resources – Priority Table

787
City of Fontana - 23 - 2022 Annual Action Plan

Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied To address housing and community development needs in Fontana and maximize the effectiveness of available funds, the City will leverage its CDBG and HOME entitlement grants with a variety of funding resources. The City’s former Redevelopment Agency was the primary non-federal source of leveraged funds. With the elimination of the City’s Redevelopment Agency, the City’s ability to leverage federal funds has been substantially reduced. The City and its development partners will continue to seek new opportunities to leverage federal funds, such as the Low-Income Tax Credit program and U.S. Department of Housing and Urban Development Section 202 and 811 for the Elderly Program.

Federal Resources
• Continuum of Care (COC) Program
• HUD Veterans Affairs supportive Housing (HUD-VASH)
• Supportive Housing for the Elderly (Section 202)
• Supportive Housing for Persons with Disabilities (Section 811) • Housing Opportunities for Persons with AIDS (HOPWA)
• Youthbuild
• Federal Low-Income Housing Tax Credit Program
State Resources
• State Low-Income Housing Tax Credit Program
• CalHome Program
• Multifamily Housing Program (MHP)
• Housing Related Parks Grant
• CalHFA Single and Multi-Family Program
• Mental Health Service Act (MHSA) Funding
• Homeless Housing, Assistance and Prevention (HHAP) Program • Homeless Emergency Aid Program (HEAP)
• California Emergency Solutions and Housing Program (CESH) Local Resources
• San Bernardino County Homeless Partnership (SBCHP)
• Housing Authority of the County of San Bernardino (HACSB) • Southern California Home Financing Authority (SCHFA) Funding • San Bernardino County Continuum of Care Program
Matching Requirements
788
City of Fontana - 24 - 2022 Annual Action Plan

HOME:

HUD requires that the City provide a 25 percent match for their HOME annual allocation. In accordance with 24 CFR 92.222, satisfying the distress criteria established by the HOME Program regulations are provided a match reduction. The match reductions are granted due to fiscal distress, severe fiscal distress, and Presidential disaster declarations. When a local jurisdiction meets one of the distress criteria, it is determined to be in fiscal distress and receives a reduction of match. The City of Fontana received a 50% match reduction from HUD in FY 2021 and was required to match 12.5% of HOME Funds using non- federal funds. The City anticipates the same determination and matching requirements in FY 2022.

The City of Fontana leverages HOME funds with other local and private non-federal resources even though it has received a match reduction from the 25 percent matching requirement. Any funds that are used in a HOME activity in excess of the required match will be documented by the City and reported to HUD as part of the Consolidated Annual Performance and Evaluation Report (CAPER) each year.

ESG:

HUD requires that the City provide a match of 100 percent match for its total expenditures. The City requires that its ESG subrecipient provide the required match from its own resources in the form of cash and from qualified non-cash sources.

If appropriate, describe publicly owned land or property located within the jurisdiction that may be used to address the needs identified in the plan
Fontana will comply with new State requirements under AB1486 and AB1255 to inventory and support developers to access and utilize surplus municipal and state land for the construction of affordable housing.

If such sites are identified, the City will consider the use of HUD funding or other resources to assist with site preparation and/ or development. At this time, no publicly owned land or property is expected to be used to address the needs in this plan, unless the City addresses ADA Transition Plan needs with CDBG funds.

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Annual Goals and Objectives
AP-20 Annual Goals and Objectives
Sort Order Goal Name Start
Year
End
Year Category Geographic
Area
Needs
Addressed Funding ($) Goal Outcome Indicator
1 Fair Housing
Services
2022 2023 Affordable
Housing
Citywide Ensure equal
access to
housing
opportunities
CDBG: 37,500 Other: 90 persons
2 Public Services
for low-income
residents
2022 2023 Non-Housing
Community
Development
Citywide Provide public
services to
low-income
residents
CDBG: 299,251 Public service activities other
than Low/Moderate Income
Housing Benefit: 20,200
Persons Assisted
3 Homelessness
Prevention
Services
2022 2023 Homeless Citywide Prevent and
eliminate
homelessness
ESG: 179,126 Homelessness Prevention: 100
Persons Assisted
Rapid Rehousing: 50
Households Assisted
4 Affordable Rental
Housing
Development
2022 2023 Affordable
Housing
Citywide Expand the
supply of
affordable
housing
CDBG: 1,296,757
HOME: 2,885,235
Rental units constructed: 11
Housing Units.

Units acquired/ rehabbed: 2
housing units
5 City of Fontana
CDBG and
HOME Program
Administration
2022 2023 Program
Administration
N/A Comply with
federal CDBG
and HOME
statutes and
regulations
CDBG: $361,502
HOME: $75,888
Program Administration
Table 6 – Goals Summary

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Goal Descriptions
1 Goal Name Fair Housing Services
Goal
Description
This program will provide fair housing services including education, outreach, enforcement, landlord/tenant counseling, and mediation services for the residents of the City of Fontana. Fontana residents are provided services at the Inland Fair Housing and Mediation Board office located in the City of San Bernardino.
2 Goal Name Public Services for low-income families
Goal
Description
These programs will provide services to low- and moderate-income families with a range of public services including but not limited to youth services, childcare and crime prevention.
3 Goal Name Homelessness Prevention Services
Goal
Description
These programs will support a continuum of services to prevent and eliminate homelessness including but not limited to homeless prevention and rapid rehousing programs. If and when necessary, Fontana will use HUD funding to address urgent issues and conditions impacting the health and safety of homeless residents and those at risk of becoming homeless. 4 Goal Name Affordable Rental Housing Development
Goal
Description
In partnership with housing developers, leverage HOME, CDBG and other housing funds in support of the development of new rental housing units affordable to households earning less than 30, 60 or 80 percent of Area Median Income (AMI) or the acquisition and rehabilitation of existing housing units affordable to household earning less than 80 percent of AMI . This also include the acquisition and rehabilitation of existing housing units to increase the supply of affordable housing for low - and moderate-income households. 5 Goal Name City of Fontana CDBG and HOME Administration Goal
Description
These funds will be used to comply with federal statutes and regulations pertaining to the CDBG and HOME Programs.

Table 7 - Goals Description
Estimate the number of extremely low -income, low-income and moderate-income families to whom the jurisdiction will provide affordable housing as defined by HOME 91.215(b)
Through the FY2022 goals, the City will provide housing to 13 income-eligible households. Income limits of assisted households will be determined through the specific activities.
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AP-35 Projects – 91.220(d)
Introduction
To address the high priority needs identified in the Strategic Plan to the 2020-2024 Consolidated Plan, the City of Fontana will invest CDBG, HOME, and ESG funds in projects that preserve affordable housing, provide fair housing services, provide services to low- and moderate-income residents, provide public services to low- and moderate-income residents, prevent homelessness, preserve neighborhoods, and improve public facilities and infrastructure. Together, these projects will address the housing and community development needs of Fontana residents-particularly those residents residing in the low- and moderate-income CDBG Target Areas.

Projects
# Project Name
1 Fair Housing Services
2 Affordable Rental Housing Development
3 Public Services for low-income families
4 Homeless Assistance (ESG22 Fontana)
5 Program Administration
Table 8 - Project Information
Describe the reasons for allocation priorities and any obstacles to addressing underserved needs Based on the Strategic Plan, the City is allocating 100 percent of its 2022 CDBG funds (excluding Program Administration) to projects and activities that benefit low- and moderate-income people. The primary obstacles to meeting the underserved needs of low- and moderate-income people include lack of funding from federal, state and other local sources and the high cost of housing that is not affordable to low-income people. Since housing continues to be the greatest need, the City will be allocating most of its allocation to address housing needs and therefore not be investing in projects addressing Public Facilities and Infrastructure Improvements needs. The City will continue investing 2022 CDBG funds in projects that provide neighborhood services for low- and moderate-income people and those with special needs, and projects that prevent homelessness.

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AP-38 Project Summary
Project Summary Information
1 Project Name Fair Housing Services
Target Area Citywide
Goals Supported Fair Housing Services
Needs Addressed Ensure equal access to housing opportunities Funding CDBG: $37,500
Description Fulfill the HUD regulatory mandate to affirmatively further fair housing choice through the provision of fair housing education, counseling, anti-discrimination and landlord- tenant mediation services.

Target Date 6/30/2023
Estimate the
number and type of
families that will
benefit from the
proposed activities
90 low- and moderate-income people
Location
Description
Citywide
Planned Activities Fair Housing Services (90 People) $37,500 2 Project Name Affordable Rental Housing Development
Target Area Citywide
Goals Supported Affordable Rental Housing Development
Needs Addressed Expand the supply of affordable housing Funding HOME: $2,885,235 (includes $113,834 CHDO set-aside as well as unallocated HOME program income and prior year resources ($2,126,347)) CDBG: $1,296,757
Description HOME funds in support of the development of new affordable rental housing units for a yet to be determined a project. Should a project is identified the Plan will be amended.

CDBG funds in support of the acquisition/rehabilitation of existing housing units affordable to household earning less than 80 percent of AMI.

Target Date 6/30/2023
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Estimate the
number and type of
families that will
benefit from the
proposed activities
11 affordable housing units constructed for lower income families 2 affordable housing units acquired and rehabbed for lower income families.

Location
Description
TBD
Planned Activities TBD
3 Project Name Public Services for low-income families
Target Area Citywide
Goals Supported Public Services for low- and moderate-income families Needs Addressed Provide public services to low-income residents Funding CDBG: $299,251
Description Provide low- and moderate-income families with a range of public services necessary to prevent homelessness and ameliorate the effects of poverty.

Target Date 6/30/2023
Estimate the
number and type of
families that will
benefit from the
proposed activities
20,200 Persons
Location
Description
Citywide
Planned Activities Public Safety Program (20,000 persons) $240,000 Recreational and Targeted Services for eligible residents (such as elderly and youth).

Activities may include recreational scholarships, meals and transportation assistance (200 persons) $59,251
4 Project Name Homeless Assistance (ESG22 Fontana)
Target Area Citywide
Goals Supported Homelessness Prevention Services
Needs Addressed Prevent and eliminate homelessness
Funding ESG: $179,126
Description Support a continuum of services in San Bernardino County to prevent and eliminate homelessness including but not limited to homeless prevention and rapid rehousing programs
Target Date 6/30/2023
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Estimate the
number and type of
families that will
benefit from the
proposed activities
150 persons
Location
Description
Citywide
Planned Activities Rapid Re-Housing (50 households) $41,423 Homeless Prevention (100 persons) $124,269
ESG Program Administration $13,434
5 Project Name Program Administration
Target Area Citywide
Goals Supported All
Needs Addressed All
Funding CDBG: $361,502
HOME: $75,888
Description Provide for the administration of the CDBG and HOME programs.

Target Date 6/30/2023
Estimate the
number and type of
families that will
benefit from the
proposed activities
Other
Location
Description
Citywide
Planned Activities Administration of CDBG and HOME programs, projects, and activities.

Table 9 - Project Summary

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AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low -income and minority concentration) where assistance will be directed
Assistance will be primarily directed to low- and moderate-income persons or households, however all public facility improvement project funds will be directed within CDBG eligible Census tracts and block groups. These areas are comprised of low- and moderate-income Census tract Block Groups centered on the central part of Fontana and the Census tract Block Groups along Sierra Avenue to include the southeastern section of the City. Residents of these eligible areas have median incomes substantially below the citywide median household income of $64,304.

Geographic Distribution
Target Area Percentage of Funds
Citywide 100%
Table 10 - Geographic Distribution
Rationale for the priorities for allocating investments geographically Based on the Strategic Plan, the City is allocating 100 percent of its non-administrative CDBG funds and 100 percent of its HOME investments funds for program year 2022 to projects and activities that benefit low- and moderate-income people. While the City targets public facility activities in eligible areas, the City does not target specific neighborhoods with concentrated investment and instead evaluates funding on a citywide basis when determining eligibility. The City is not requesting approval of a Neighborhood Revitalization Strategy Area as part of this Plan.

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Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
Four high priority affordable housing needs are identified in the 2020-2024 Consolidated Plan and four Strategic Plan goals are established to provide the framework necessary to invest CDBG and HOME funds to address the affordable housing needs of the City.

Expand the Supply of Affordable Housing
Based on evaluation of 2011-2015 ACS and CHAS data, there is a high need for housing units affordable for households earning less than 80 percent of AMI. Of the 18,289 households earning 0-80 percent of AMI in the City, 13,988 are cost burdened households—meaning households paying more than 30 percent of their income for housing. Additionally, 7,815 of the cost burdened households are considered severely cost burdened households—meaning that they pay more than 50 percent of their income for housing. Of the 7,815 severely cost burdened households, 3,950 are renters. Of those severely cost burdened renter households, 4,180 households earn less than 50 percent of AMI and are considered the most at risk of becoming homeless.

Preserve the Supply of Affordable Housing
As the City's housing stock ages, a growing percentage of housing units may need rehabilitation to allow them to remain safe and habitable. The situation is of particular concern for low- and moderate-income homeowners who are generally not in a financial position to properly maintain their homes.

The age and condition of Fontana’s housing stock is an important indicator of potential rehabilitation needs.

Commonly, housing over 30 years of age needs some form of major rehabilitation, such as roof replacement, foundation work and plumbing systems. Housing over 15 years of age will generally exhibit deficiencies in terms of paint, weatherization, heating / air-conditioning systems, hot water heaters and finish plumbing fixtures.

According to CHAS data showing the year that housing units were built categorized by owner and renter tenure:
• 8,665 or 27.1 percent of the 31,945 owner -occupied housing units in Fontana were built 39 or more years ago (built prior to 1980).
• 14,160 or 44.3 percent of the 31,945 o wner-occupied housing units built between 15 and 39 years ago (built between 1980 and 1999).
• 6,665 or 40.3 percent of the 18,029 renter -occupied housing units in Fontana were built 39 or more 797
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years ago (built prior to 1980).
• 7,125 or 39.5 percent of the 18,029 renter -occupied housing units in Fontana were built between 15 and 39 years ago (built between 1980 and 1999).

Preservation of the physical and functional integrity of existing housing units occupied by low- and moderate-income households is a cost-effective way to invest limited resources to retain existing housing units that are already affordable to low- and moderate-income households in the community. Addressing substandard housing conditions through housing preservation activities provide that all economic segments of the community have the means to ensure that their property meets local standards and that all Fontana residents have the opportunity to live in decent housing.

One Year Goals for the Number of Households to be Supported Homeless 50
Non-Homeless 13
Special-Needs 0
Total 63
Table 11 - One Year Goals for Affordable Housing by Support Requirement One Year Goals for the Number of Households Supported Through Rental Assistance 50
The Production of New Units 0
Rehab of Existing Units 11
Acquisition of Existing Units 2
Total 63
Table 12 - One Year Goals for Affordable Housing by Support Type

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AP-60 Public Housing – 91.220(h)
Introduction
The City of Fontana Housing Authority was formed in 1994 under State of California Housing Authority Law to actively improve existing neighborhoods and develop affordable housing opportunities using local, state and federal resources. The Fontana Housing Authority does not administer Section 8 and does not own HUD Public Housing; however, the City is within the service area of the Housing Authority of the County of San Bernardino (HACSB) for the purposes of Section 8 and Public Housing.

Actions planned during the next year to address the needs to public housing HACSB will continue providing housing and public services to existing residents of HACSB-owned affordable housing units. It has completed the process of converting HUD Public Housing units to Section 8 units as part of HUD’s Rental Assistance Demonstration (RAD) program. As of HACSB’s 2020 Annual Report there were 812 vouchers and 144 HASCS-owned units in Fontana. Additionally, the HACSB waitlist for tenant-based rental assistance (Section 8) units is closed.

Actions to e ncourage public housing residents to become more involved in management and participate in homeownership
HACSB encourages residents to be actively involved in the community and in the management of public housing developments through resident councils and numerous opportunities for feedback such as community meetings and surveys. The HACSB and the City of Fontana also actively encourage and promote public housing residents to explore homeownership opportunities and programs through HACSB’s Homeownership Assistance Program targeted at current residents. HACSB also encourages and supports residents in participating in homebuyer counseling programs and recommends residents use the family self-sufficiency escrow account to save money towards homeownership.

As of December 2017, HACSB’s Homeownership program is the second largest in the state by the families participating in the program and is 31st nationwide among nearly 700 agencies with homeownership programs. Since 2002, 248 families have become homeowners through the Housing Authority’s Homeownership Assistance Program, which provides mortgage assistance to working families for up to 15 years and families with disabilities for up to 30 years.

If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
Not applicable. HACSB is considered a High Performing PHA.

Discussion
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HACSB is well-positioned to maintain and expand the supply of affordable housing units in the City of Fontana and throughout San Bernardino County through its partnerships with the State of California, San Bernardino County Department of Community Development and Housing, the City of Fontana, other cities throughout the county and Housing Partners I, a nonprofit affiliate of the Housing Authority.

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AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
The City will invest ESG funds during the 2022 program year to address high priority needs identified in the 2020-2024 Consolidated Plan including preventing homelessness and providing assistance to those who have become homeless. This will be accomplished though homeless prevention programs, emergency shelter and transitional housing.

Homelessness Prevention Services
According to the results of the most recent data available from the bi-annual Point-in-Time Homeless Count (PIT Count) held on January 23, 2020, on any given night in San Bernardino County, approximately 3,125 people were homeless. To address incidences of homelessness in Fontana and to prevent extremely low- income Fontana families from becoming homeless, the City places a high priority on programs that work to prevent homelessness or rapidly connect homeless individuals with housing and supportive services. To address this need, the City will support a continuum of services in the City of Fontana utilizing its ESG funds and though the San Bernardino County COC to prevent and eliminate homelessness including, but not limited to, homelessness prevention programs, emergency shelter programs and transitional housing.

Using ESG funds, the City will invest in homelessness prevention services through the Water of Life’s Rapid Rehousing and Homeless Prevention Program that anticipates serving 150 unduplicated people per year.

Services for Residents with Special Needs
Analysis of available data and consultation with organizations providing services for special needs populations revealed a high need for a range of additional services including, but not limited to, those concerned with developmentally disabled adults. The City’s policy for its new rental housing construction program includes a requirement to set aside a minimum number of units exclusively set aside for persons with disabilities. Any new rental project will comply with Title VIII of the Civil Rights Act of 1968 as amended, including Public Law 90-234.

Describe the jurisdictions one -year goals and actions f or reducing and ending homelessness including reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
Due to the rise in the homeless population within the City of Fontana and the amount of resources being drawn upon to deal with the homeless population, the Fontana Police Department Bike Unit has transitioned to traditional patrol units and has been renamed as the Multiple Enforcement Team. The primary mission of the MET Unit is to provide a balanced approach in traditional law enforcement services, along with conducting outreach, education and providing resources to the homeless population. The goals of the MET Unit are to reduce crime relating to homelessness, calls for service, resources to medical professionals and city staff.
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The Fontana Police Department has partnered with the following organizations to provide additional resources to the homeless population:
• San Bernardino County Department of Behavioral Health InnROADs Program (Innovative Remote Onsite Assistance Delivery)
• Destination: HOME (City of Fontana)
• CitiLink (Water of Life Church)
In addition to these organizations the San Bernardino County’s Department of Behavioral Health has also assigned a member of their staff full time to the MET Unit, which will assist the City in providing mental health services to the homeless population out in the field. This will expedite the process and services in providing the much-needed mental health to the homeless population.

Since 2014, the City has worked with the San Bernardino County Sheriff’s Department efforts in creating a specific unit to engage the homeless. The mission of The Homeless Outreach Proactive Enforcement (H.O.P.E.) Team is to balance proactive outreach with enforcement of the law, while connecting members of the homeless population with resources that may help them transition from homelessness. The ultimate goal is to reduce the rate of recidivism, incarceration, and reduce the current costs associated to homeless related crime. This team interacts with many agencies within the city of Fontana and partners with organizations who are using their resources to reduce the number of chronically homeless individuals and families in the community. The HOPE Team’s goal is to go beyond the traditional response to homelessness by identifying problems, root causes and linking individual homeless people with agencies for help and housing. Through this investment in outreach, assessment and connection to appropriate resources, the City will significantly reduce the number of homeless occupying areas not meant for human habitation such as parks, alleys, canyons, commercial and industrial areas.

Addressing the emergency shelter and transitional housing needs of homeless persons The City of Fontana through its ESG allocation, funds the Water of Life’s Rapid Rehousing and Homelessness Prevention Program that provides emergency shelter and transitional housing to those in need of such services. In addition, the City supports the efforts of the San Bernardino County Continuum of Care (COC) and its member organizations that address homelessness. As described earlier, the City supports local nonprofit agencies who provide emergency rental assistance and housing counseling to low- and moderate-income residents to prevent homelessness.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from b ecoming homeless again
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As mentioned above, during the 2022 program year, the City will use CDBG funds for the Police Department’s MET Team to address the needs of the homeless. The City's HOPE Team will connect chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth with available resources through the San Bernardino County COC, which is comprised of a network of public, private, faith-based, for-profit, and nonprofit service providers who utilize several federal, state, and local resources to provide services for homeless people. The goal is to help unsheltered homeless people make the transition to permanent housing and independent living, including shortening the time individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units.

The nonprofit and faith-based community plays a key role in the current COC system. Hundreds of agencies throughout the County provide programs ranging from feeding the homeless on the street to creating permanent supportive housing opportunities. These services are available to homeless families with children, and single men and women. The nonprofit and faith-based community also serves special needs populations, such as victims of domestic violence, veterans, the disabled and youth.

To prevent individuals and families who were recently homeless from becoming homeless again and to prevent individuals and families who are at risk of homelessness from becoming homeless, the City will provide ESG funds to the Water of Life to assistance low- and moderate-income individuals and families housed in the event circumstances beyond their control make it infeasible to stay current on their rent.

Helping low-income individuals and families avoid becoming homeless, especially extremely low - income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs
The City will utilize its ESG funds to prevent homelessness and provide funding to Water of Life for its rapid rehousing program. This program will provide rental assistance and security deposits. The COC is also developing informational resources (such as 2-1-1) to better serve individuals who are homeless or at risk of becoming homeless. In addition, the COC is working to implement a database using real time information from intake and assessment that is housed in the Homeless Management Information System (HIMS). Collectively these strategies will help minimize duplication of effort and better connect the most vulnerable individuals and families, chronically homeless, and people at risk of becoming homeless to appropriate resources.

In addition, the City Police Department has a memorandum of understanding with the San Bernardino County Department of Behavioral Health to provide dedicated, nonfinancial office space for rapid access to those in mental health crisis through their Triage, Engagement and Support Teams (TEST) and their mobile 803
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Community Crisis Response Teams (CCRT).

Discussion
With limited ESG and CDBG resources available, the City is investing ESG funds through the grants made to Water of Life to prevent homelessness and provide rapid rehousing solutions for person living in Fontana.

Additionally, the City is investing general funds through the Police Department budget to provide HOPE and MET Team officers that will connect unsheltered homeless individuals and families with emergency shelter, transitional housing, and permanent housing opportunities, as well as other services to address special needs such as drug and alcohol rehabilitation and mental health services.

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AP-75 Barriers to Affordable Housing – 91.220(j)
Introduction
A barrier to affordable housing is a public policy or nongovernmental condition that constrains the development or rehabilitation of affordable housing, such as land use controls, property taxes, state prevailing wage requirements, environmental protection, cost of land and availability of monetary resources. Barriers to affordable housing are distinguished from impediments to fair housing choice in the sense that barriers are lawful and impediments to fair housing choice are usually unlawful.

Based on information gathered during community meetings, the Consolidated Plan Needs Assessment Survey, the 2021-2029 Housing Element and market analysis, the primary barriers to affordable housing in Fontana are housing affordability and the lack of monetary resources necessary to develop and sustain affordable housing. The two barriers are related in the sense that demand for affordable housing exceeds the supply and insufficient resources are available to increase the supply of affordable housing to meet demand.

Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment
In the development of the 2021-2029 Housing Element, the City evaluated significant public policies affecting affordable housing development such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges and growth limitations. Based on this evaluation, the City determined that it has taken adequate steps to ameliorate the negative effects of public policies that may have been a barrier to affordable housing. Moreover, the City is actively engaged with affordable housing developers concerning the siting of affordable housing and ensuring that the entitlement process runs smoothly from inception to completion.

Discussion
To address housing affordability and the lack of monetary resources for affordable housing, the 2020-2024 Consolidated Plan - Strategic Plan calls for the investment of a significant portion of CDBG and HOME funds for the development of 22 new affordable rental housing units during the five year period of the Consolidated Plan, the acquisition/rehabilitation of seven additional rental units and the rehabilitation and preservation of 100 existing affordable housing units over the next five years. Although the City no longer has access to Redevelopment Housing Set-Aside funds, the City will continue to leverage its CDBG and HOME funds to attract private and other available public resources, including land conveyed to the City for the purpose of affordable housing, to facilitate affordable housing development. This strategy will increase the supply of affordable housing and preserve existing affordable housing in the City.

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AP-85 Other Actions – 91.220(k)
Introduction
In the implementation of the 2022 Annual Action Plan, the City will invest CDBG and HOME resources to address obstacles to meeting underserved needs, foster and maintain affordable housing, reduce lead- based paint hazards, reduce the number of poverty-level families, develop institutional structure and enhance coordination between public and private housing and social service agencies.

Actions planned to address obstacles to meeting underserved needs The primary obstacles to meeting the underserved needs of low- and moderate-income people include lack of funding from federal, state, and other local sources, the high cost of housing that is not affordable to low- income people and the lack of availability of home improvement financing in the private lending industry. To address these obstacles, the City is investing CDBG and HOME funds through the 2022 Action Plan in projects that provide grants and loans to low- and moderate-income homeowners for home improvements, projects that provide public and neighborhood services to low- and moderate-income people and those with special needs, and projects that prevent homelessness. To address underserved needs, the City is allocating 100 percent of its non-administrative CDBG and 100 percent of its HOME investments for program year 2022 to projects and activities that benefit low- and moderate-income people.

Actions planned to foster and maintain affordable housing In the implementation of the 2022 Annual Action Plan, the City will invest CDBG and HOME funds to foster affordable housing through the City of Fontana Rental Acquisition Rehab Program impacting an estimated 13 households.

Actions planned to reduce lead-based paint hazards
The Residential Lead Based Paint Hazard Reduction Act of 1992 (Title X) emphasizes prevention of childhood lead poisoning through housing-based approaches. To reduce lead-based paint hazards, the City of Fontana Housing Rehabilitation Program will conduct lead-based paint testing and risk assessments for each property assisted that was built prior to January 1, 1978 and will incorporate safe work practices or abatement into the scope of work as required to reduce lead-based paint hazards in accordance with 24 CFR Part 35.

Actions planned to reduce the number of poverty-level families The implementation of CDBG, ESG, and HOME activities meeting the goals established in the 2020-2024 Consolidated Plan - Strategic Plan and the 2022 Annual Action Plan will help to reduce the number of poverty-level families by:
• Supporting activities that expand the supply of housing that is affordable to low- and moderate-income 806
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households
• Supporting activities that preserve the supply of decent housing that is affordable to low- and moderate- income households
• Supporting a continuum of housing and public service programs to prevent and eliminate homelessness • Supporting housing preservation programs that assure low income households have a safe, decent and appropriate place to live
• Supporting public services for low- and moderate-income residents including those with special needs and those at-risk of homelessness offered by nonprofit organizations receiving ESG funds In addition to these local efforts, mainstream state and federal resources also contribute to reducing the number of individuals and families in poverty. Federal programs such as the Earned Income Tax Credit and Head Start provide pathways out of poverty for families who are ready to pursue employment and educational opportunities. Additionally in California, the primary programs that assist families in poverty are CalWORKS, CalFresh (formerly food stamps) and Medi-Cal. Together, these programs provide individuals and families with employment assistance, subsidy for food, medical care, childcare, and cash payments to meet basic needs such as housing, nutrition and transportation. Other services are available to assist persons suffering from substance abuse, domestic violence, and mental illness.

In addition, the City intends to implement Opportunity Zones in an effort to promote business development and expansion opportunities and in the process, create increase the number of jobs available to lower income persons.

Actions planned to develop institutional structure
The institutional delivery system in Fontana is high-functioning and collaborative—particularly the relationship between local government and the nonprofit sector comprised of a network of capable nonprofit organizations that are delivering a full range of services to residents. Strong City departments anchor the administration of HUD grant programs and the housing, community and economic development activities that are implemented by the City. support and enhance this existing institutional structure, the City of Fontana will collaborate with affordable housing developers and nonprofit agencies receiving CDBG and HOME funds through the 2022 Annual Action Plan to ensure that the needs of low- and moderate-income residents are met as envisioned within the 2020-2024 Consolidated Plan - Strategic Plan.

Actions planned to enhance coordination between public and private housing and social service agencies
To enhance coordination between public and private housing and social service agencies, the City will continue consulting with and inviting the participation of a wide variety of agencies and organizations involved in the delivery of housing and supportive services to low- and moderate-income residents in Fontana—particularly the CDBG Target Areas.

Discussion:
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In the implementation of the 2022 Annual Action Plan, the City will invest CDBG, ESG, and HOME resources to address obstacles to meeting underserved needs, foster and maintain affordable housing, reduce lead-based paint hazards, reduce the number of poverty-level families, develop institutional structure and enhance coordination between public and private housing and social service agencies.

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Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction
In the implementation of programs and activities under the 2022 Annual Action Plan, the City of Fontana will follow all HUD regulations concerning the use of program income, forms of investment, overall low- and moderate-income benefit for the CDBG program and recapture requirements for the HOME program.

Eligible applicants for CDBG and ESG assistance include subrecipients who may carry out programs to benefit program beneficiaries on behalf of the City. Applications from interested subrecipients may be solicited by the City directly or via published Notices of Funds Availability at the discretion of the City.

Eligible beneficiaries for CDBG or HOME funded housing rehabilitation or first-time homebuyer programs include households earning less than 80 percent of AMI. Developers for HOME-assisted rental housing development projects shall be selected via an application and underwriting process determined by the City based on the regulatory requirements applicable to the prospective project based on the nature and scope of the proposed development. Opportunities for leveraging and matching funds shall be emphasized in the selection of affordable housing Developers. Selection of affordable rental housing development projects shall be based on project feasibility; funding availability; and City needs as determined by staff and the City Council.

Prospective subrecipients, beneficiaries and developers may obtain more information on the Fontana Housing Department / Housing Authority website at www.fontana.org.

Community Development Block Grant Program (CDBG)
Reference 24 CFR 91.220(l)(1)
Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out.

1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed 0

2. The amount of proceeds from section 108 loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan. 0

3. The amount of surplus funds from urban renewal settlements 0

4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0
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5. The amount of income from float-funded activities 0
Total Program Income: 0
Other CDBG Requirements

1. The amount of urgent need activities 0

2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan.
100.00%
HOME Investment Partnership Program (HOME)
Reference 24 CFR 91.220(l)(2)
A description of other forms of investment being used beyond those identified in Section 92.205 is as follows:

The City will not use any other forms of investment beyond those identified in Section 92.205.

A description of the guidelines that will be used for resale or recapture of HOME funds when used for homebuyer activities as required in 92.254, is as follows:

During the 2022 program year, the City of Fontana will not implement any HOME-assisted homebuyer activities. In the future, should the City choose to implement a homebuyer assistance activity, the City will incorporate a recapture requirement into written agreements and long-term affordability covenants as required by 24 CFR 92.254.

The recapture provision ensures that all or a portion of the City's HOME assistance to homebuyers or homeowners is recaptured if the housing does not continue to be the principal residence of the family for the duration of the applicable period of affordability. In establishing this provision, the City is subject to the limitation that when the recapture requirement is triggered by a sale (voluntary or involuntary) of the housing unit, and there are no net proceeds or the net proceeds are insufficient to repay the HOME investment due, the City can only recapture a portion of the net proceeds, if any. The net proceeds are the sales price minus superior loan repayment (other than HOME funds), capital improvements, and any closing costs.

In the event of a mortgage default, the City has the right of first refusal before foreclosure and may use additional HOME funds to acquire the housing in order to preserve the housing’s affordability.

However, notwithstanding a foreclosure situation, the City intends to recapture all or some of its HOME funds invested during or at the end of the established affordability period, if practicable. Recaptured HOME funds consist of loan payments (including interest) and/or a loan payoff, upon sale if the assisted owner is no longer residing in the assisted residence or for any other breaches of the agreement with the City. Recaptured funds may be used for any HOME eligible activity. 810
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These recaptured funds are identified in the City’s accounting system by a unique recaptured revenue object number. Any recaptured funds will be used by the City before any additional HOME funds.

A description of the guidelines for resale or recapture that ensures the affordability of units acquired with HOME funds? See 24 CFR 92.254(a)(4) are as follows:

See above.

Plans for using HOME funds to refinance existing debt secured by multifamily housing that is rehabilitated with HOME funds along with a description of the refinancing guidelines required that will be used under 24 CFR 92.206(b), are as follows:

The City does not intend to use HOME funds under the 2022 Annual Action Plan to refinance existing debt secured by multifamily housing that is rehabilitated with HOME funds.

Emergency Solutions Grant (ESG)
Reference 91.220(I)(4)
Include written standards for providing ESG assistance (may include as attachment).

The Written Standards for Providing ESG Assistance are included in Appendix C.

If the Continuum of Care has established centralized or coordinated assessment system that meets HUD requirements, describe that centralized or coordinated assessment system.

The County of San Bernardino coordinates homeless services with both entitlement and non-entitlement cities through its Department of Behavioral Health Office of Homeless Services (OHS). This office is the designated administrative authority, or Lead Agency, over the County’s Continuum of Care (COC) and Coordinated Entry System (CES). The County oversees ESG grant distribution for its Service Area, which encompasses all unincorporated areas along with 12 non-entitlement cities within the county (the County Consortium). County ESG grant sub-recipients are required to coordinate with and report their homeless services data to the Homeless Management Information System (HMIS) for use by the County’s OHS and its COC. The HMIS maintains exceptions for victim service providers as set forth under 24 CFR 576.400(d).

Identify the process for making sub-awards and describe how the ESG allocation available to private nonprofit organizations (including community and faith-based organizations).

The City solicited applications for ESG funds through a Request for Proposals (RFP) process. Respondents were required to submit proposals for homeless prevention and rapid-rehousing activities. Respondents were required to have experience with providing these eligible activities, and already participate in, or be willing to participate in the County Homeless Provider Network and HMIS in conjunction with the COC. The applications were reviewed by an Evaluation Committee, which was made up of no less than one homeless 811
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person or formally homeless person. Water of Life was the successful applicant. FY 2022 is the last year of their contract.

If the jurisdiction is unable to meet the homeless participation requirement in 24 CFR 576.405(a), the jurisdiction must specify its plan for rea ching out to and consulting with homeless or formerly homeless individuals in considering policies and funding decisions regarding facilities and services funded under ESG.

As part of the process of making sub-awards, the City included a formerly homeless person on the Evaluation Committee to assist in reviewing applications and making funding recommendations.

Describe performance standards for evaluating ESG.

The City and the COC will continue to work together to develop performance standards that provide a measure to evaluate each ESG subrecipients effectiveness, such as how well the service provider succeeded at (1) targeting those who need the assistance most; (2) reducing the number of people living on the streets or emergency shelters; (3) shortening the time people spend homeless; and (4) reducing each program participant’s housing barriers or housing stability risks. These performance standards will be incorporated into the City’s Subrecipient Agreement, and to the extent possible, will be tracked and measured in HMIS.

Current Performance Standards for the ESG grant are shown in the attached table labeled “ESG Performance Standards.” As previous performance accounting was based upon the Homeless Prevention and Rapid-Re-Housing (HPRP) program, which operated under a different set of regulations, these performance standards will be refined as the program progresses.

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City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-1418 Agenda Date: 6/14/2022
Agenda #: C. Category: Public Hearing
FROM:

Public Works
SUBJECT:

Adopt Resolution for Inland Empire Utilities Agency Capital Capacity Reimbursement Fee RECOMMENDATION:

Adopt Resolution No. 2022-053, approving an increase to the Capital Capacity Reimbursement Fee for capital expansion of the regional sewer system capacity in accordance with yearly increase imposed by Inland Empire Utilities Agency (IEUA) for fiscal 2022/23.

COUNCIL GOALS:
· To concentrate on inter-governmental relations by establishing partnerships and positive working relationships with other public agencies providing services to residents.

DISCUSSION:

The Inland Empire Utilities Agency (IEUA) along with other participating sewage collection agencies (each a ‘RegionalContract Agency”) located within the boundaries of Chino Basin Municipal Water District (“CBWMD”)entered into the Chino Basin Reginal Sewage Contract (“Regional Sewage Service Contract”) to plan for future growth and capacity of the regional sewerage system.

The Current IEUA Capital Capacity Reimbursement Fee, which has been in place since July 2021, is $7,379 per Equivalent Dwelling Unit (EDU). Pending the completion of the sewer flow and load study on May 18, 2022, the IEUA Board of Directors approved Resolution 2022-5-2 authorizing an increase in the Capital Capacity Reimbursement Fee to $7,600 effective July 1, 2022 as follows Current Fee $7,379 Proposed Fee Effective July 1, 2022
$7,600
The $221 increase represents a three percent increase for FY 2022/23 to cover inflation.

Staff recommends that the City Council consider a resolution increasing the Capital Capacity Reimbursement Fee the City collects on behalf of (IEUA) to maintain capacity of the regional sewer system.

The proposed resolution is consistent with the adopted IEUA’sTen-Year Capital Improvement Plan and the Regional Sewage Service Contract of which the City is a party. This contract requires the City to collect and provide the amended fees upon request by IEUA. The proposed Capital Capacity Reimbursement Fee would take effect July 1, 2022.

FISCAL IMPACT:

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File #: 21-1418 Agenda Date: 6/14/2022
Agenda #: C. Category: Public Hearing
The Capital Capacity Reimbursement Fee is collected by the City, held in trust in a Capital Capacity Reimbursement Fund and paid to IEUA upon their request or “call for funds”. This “pass through” fee is charged to new development and does not change the City’s sewer rate or the City’s sewer connection fee.

MOTION:

Approve staff recommendation.

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