Fontana City Council
December 10, 2024

RESOLUTION NO. 2024-133

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA

APPROVING THE ANNUAL REPORT ON DEVELOPMENT IMPACT
FEES AND MAKING FINDINGS AS TO UNEXPENDED FUNDS.

WHEREAS, California Government Code Sections 66000 -66006 impose requirements for the collection and expenditure of development impact fees; and

WHEREAS, pursuant to Government Code Section 66006(b), the City must issue a yearly report relating to the development impact fees it imposes; and

WHEREAS, pursuant to Government Code Section 66001(d), at least every five years the City must make certain findings with respect to that portion of each development fee account remaining unexpended; and

WHEREAS, pursuant to Government Code Section 66006(b)(2), the report was made available to the public not less than 15 days prior to the public meeting.

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

Section 1. The City Council approves the attached Annual Report of Development Impa ct Fees for the Fiscal Year Ended June 30, 20 24, and adopts the findings included there.

APPROVED AND ADOPTED this 10th day of December, 2024.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney
I, Germaine M. Key, City Clerk of the City of Fontana, an d Ex-Officio Clerk of the City Council do hereby certify that the foregoing resolution is the actual resolution duly and regularly adopted by the City of Fontana at a regular meeting held on the 10th day of December, 2024, by the following vote to wit:

444
Resolution No. 2024-133

AYES:

NOES:

ABSENT:

ABSTAIN:

City Clerk of the City of Fontana

Mayor of the City of Fontana
ATTEST:

City Clerk

445
City of Fontana
Annual Report on Development Impact Fees
Fiscal Year Ended June 30, 2024

Background

The Mitigation Fee Act, Government Code Section 66000 et seq., (the “Act”) governs the establishment and administration of development impact fees paid b y new development projects for public facilities needed to serve new development. Fees must be separately accounted for and used for the specific purpose for which the fee was imposed. The City’s adopted development impact fees are listed in the attached exhibits. Expenditures are authorized through the annual Operating Budget and the City’s Capital Improvement Program.

Annual Development Fee Reporting

The Act requires that the City prepare an annual review of all development impact fees as defined in the Act and make a public report on the fees available to the public after the end of each fiscal year. Government Code Section 66006(b)(2) requires the report to be placed on an agenda for review at a public meeting not less than 15 days after the report is made available to the public.

The City is also required to adopt by resolution certain findings for any fund accounts which contain unexpended funds as of the fifth fiscal year following the first deposit into those funds (Government Code Section 66001(d)).

The report is organized as follows:

Section 1. A brief description of the purpose of each development impact fee, its authorizing legislation and current amount (Government Code Section 66006(b)(1)(A)).

Section 2. A summary of the beginning fund balance, annual fee re venue collected and interest earned, public improvement expenditures, and the ending fund balance for each fee (Government Code Section 66006(b)(1)(C) and (D)).

Section 3. A five -year history of the beginning fund balance, annual fee revenue collected and interest earned, public improvement expenditures, and the ending fund balance for each fee (Government Code Section 66006(b)(1)(C) and (D)).

Section 4. A listing of projects funded or to be funded with development impact fees.

Section 5. Report of Findings for each fee.
446
SFDU Retail Office Industrial
620 San Sevaine Flood Control Drainage facility improvements 90-34 $4,405 $4,405 $4,405 $4,405 $4,405 $4,405 621 Upper Etiwanda Flood ControlDrainage facility improvements 90-34 $9,790 $9,790 $9,790 $9,790 $9,790 $9,790 SFDU Retail Office Industrial
622 Storm Drainage - Declez NorthMaster interceptor drains & major drainage facilities2022-065 $27,182 $27,182 $27,182 $27,182 $27,182 $27,182 622 Storm Drainage - Declez SouthMaster interceptor drains & major drainage facilities2022-065 $32,274 $32,274 $32,274 $32,274 $32,274 $32,274 622 Storm Drainage - Fontana EastMaster interceptor drains & major drainage facilities2022-065 $16,550 $16,550 $16,550 $16,550 $16,550 $16,550 622 Storm Drainage - I-10 NorthMaster interceptor drains & major drainage facilities2022-065 $23,768 $23,768 $23,768 $23,768 $23,768 $23,768 622 Storm Drainage - I-10 SouthMaster interceptor drains & major drainage facilities2022-065 $5,827 $5,827 $5,827 $5,827 $5,827 $5,827 622 Storm Drainage - I-15 NorthMaster interceptor drains & major drainage facilities2022-065 $22,226 $22,226 $22,226 $22,226 $22,226 $22,226 622 Storm Drainage - Lower EtiwandaMaster interceptor drains & major drainage facilities2022-065 $9,713 $9,713 $9,713 $9,713 $9,713 $9,713 622 Storm Drainage - Middle EtiwandaMaster interceptor drains & major drainage facilities2022-065 $8,102 $8,102 $8,102 $8,102 $8,102 $8,102 622 Storm Drainage - Project 3-4Master interceptor drains & major drainage facilities2022-065 $19,492 $19,492 $19,492 $19,492 $19,492 $19,492 622 Storm Drainage - Upper EtiwandaMaster interceptor drains & major drainage facilities2022-065 $10,508 $10,508 $10,508 $10,508 $10,508 $10,508 SFDU 0-2 3+ Retail Office Industrial
630 Circulation Mitigation Arterial street and interchange improvements 2022-065 $6,685 $4,092 $4,092 $10,030 $8,120 $4,090 SFDU 0-2 3+ Retail Office Industrial
630 Local Transportation Street, sidewalks and pathways 2022-065 $925 $878 $925 $0.253 $0.253 $0.073 630 Local Arterials Local four-lane arterials 2022-065 $518 $492 $518 $0.141 $0.141 $0.041 630 Traffic Signals Local traffic signals 2022-065 $160 $154 $160 $0.044 $0.044 $0.013 631 Fire Assessment Fire protection facilities 2022-065 $431 $409 $431 $0.118 $0.118 $0.034 632 General Government Public facilities 2022-065 $520 $494 $520 $0.142 $0.142 $0.042 633 Landscape Improvements Median landscaping 2022-065 $326 $310 $326 $0.089 $0.089 $0.026 634 Library Cap Improvements Library facilities 2022-065 $116 $110 $116 $0.031 $0.031 $0.009 635 Park Development Park and recreational facilities 2022-065 $7,733 $7,347 $7,733 N/A N/A N/A 636 Police Cap Facilities Police facilities, vehicles and equipment 2022-065 $552 $523 $552 $0.150 $0.150 $0.044 698 Affordable Housing Inclusionary housing 2022-065 $1,574 $768 $768 $1.880 $1.310 $0.150 SFDU 0-2 3+ Retail Office Industrial
702 Sewer Capital Sewer connection 2022-065 $1,023.00 $1,023.00 $1,023.00 $1,023.00 $1,023.00 $1,023.00 Non-Residential Fees per EDU
Fund # Fund Description Fee Description Last UpdatedResidential Fees per Dwelling UnitNon-Residential Fees per Building SF
Fund # Fund Description Fee Description Last UpdatedResidential Fees per Dwelling Unit Non-Residential Fees per 1,000
Gross Building SF
Fund # Fund Description Fee Description Last Updated
Residential Fees per Net Developable
Acre
Non-Residential Fees per 1,000
Gross Building SF
Fund # Fund Description Fee Description Last UpdatedResidential Fees per Dwelling Unit Government Code Section 66006(b)(1)(A) and (B)
Fund # Fund Description Fee Description Last Updated Residential Fees per Gross AcreNon-Residential Fees per 1,000 Gross Building SF
Brief Description and Amount of Fees
City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024
Section 1

447
Beginning
Balance
Ending
Balance
07/01/23 06/30/24
620 Flood Control - San Sevaine 1,931,487 994,865 88,641 (403,904) (8,320) 2,602,769 621 Flood Control - Etiwanda 45,915 0 1,975 0 0 47,890
622 Storm Drain 20,758,650 3,085,653 981,038 (2,233,568) (98,460) 22,493,312 630 Circulation Mitigation 21,801,505 7,865,186 2,074,831 (8,102,715) (73,880) 23,564,927 631 Fire Facility 606,389 390,047 25,857 0 (279,570) 742,722 632 Public Facilities 12,445,256 1,146,361 537,019 (561,258) 0 13,567,378 633 Median Landscaping 5,826,878 314,056 225,381 (3,798,153) (11,720) 2,556,442 634 Library Facility 1,182,630 514,577 47,927 (366,912) (6,440) 1,371,782 635 Park Development 20,319,441 4,789,942 826,423 (9,186,190) (123,970) 16,625,646 636 Police Facilities 3,712,826 1,160,918 162,230 (813,490) (38,880) 4,183,604 698 Affordable Housing 7,351,914 2,451,893 250,896 (1,443,294) 0 8,611,409 702 Sewer Connection 3,321,938 552,195 165,106 900 (663,023) (9,140) 3,367,977 TOTALS 99,304,829 23,265,693 5,387,324 900 (27,572,506) (650,380) 99,735,859 City of Fontana
Fiscal Year Ended June 30, 2024
Fund Balances, Fees Collected, Interest Earned, and Project Expenditures Government Code Section 66006(b)(1)(C) and (D)
Annual Report
Development Impact Fees
Cost
AllocationFund DescriptionFund Fees
Collected
Interest
Earned
Other
Revenues
Capital
Expenditures
Section 2

448
Fee Type 2023/24 2022/23 2021/22 2020/21 2019/20
Flood Control - San Sevaine (620)
Beginning balance 1,931,487 1,403,656 579,435 461,015 364,953 Revenue 994,865 626,722 977,357 216,918 186,943
Interest 88,641 2,714 (42,875) 1,880 15,862
Other revenue
Capital (403,904) (87,935) (96,861) (86,578) (92,743)
Cost allocation (8,320) (13,670) (13,400) (13,800) (14,000) Ending balance 2,602,769 1,931,487 1,403,656 579,435 461,015 Flood Control - Etiwanda (621)
Beginning balance 45,915 45,557 46,973 46,925 45,840
Revenue 0 0 0 0 0
Interest 1,975 358 (1,416) 48 1,085
Other revenue
Capital
Cost allocation
PPA - fees owed to County
Ending balance 47,890 45,915 45,557 46,973 46,925
Storm Drain (622)
Beginning balance 20,758,650 18,253,547 15,843,084 14,963,962 13,634,637 Revenue 3,085,653 3,178,479 4,373,223 3,529,070 2,440,966 Interest 981,038 121,550 (634,878) 22,156 389,307
Other revenue
Capital (2,233,568) (669,467) (1,204,881) (2,381,903) (1,011,048) Cost allocation (98,460) (125,460) (123,000) (290,200) (489,900) Ending balance 22,493,312 20,758,650 18,253,547 15,843,084 14,963,962 Circulation Mitigation (630)
Beginning balance 21,801,505 15,444,197 7,696,915 102,964 (3,481,614) Revenue 7,865,186 9,796,269 10,055,943 8,680,924 5,049,189 Interest 2,074,831 231,173 (1,309,715) 64,926 563,486
Other revenue
Capital (8,102,715) (3,485,004) (817,446) (1,024,499) (1,953,097) Cost allocation (73,880) (185,130) (181,500) (127,400) (75,000) Ending balance 23,564,927 21,801,505 15,444,197 7,696,915 102,964 Government Code Section 66006(b)(1)(C) and (D)
Annual Report
Development Impact Fees
City of Fontana
Fiscal Year Ended June 30, 2024
Fund Balances, Fees Collected, Interest Earned, and Project Expenditures - Five Year History Section 3

449
Fee Type 2023/24 2022/23 2021/22 2020/21 2019/20
Government Code Section 66006(b)(1)(C) and (D)
Annual Report
Development Impact Fees
City of Fontana
Fiscal Year Ended June 30, 2024
Fund Balances, Fees Collected, Interest Earned, and Project Expenditures - Five Year History Fire Facility (631)
Beginning balance 606,389 666,331 637,971 719,932 856,721 Revenue 390,047 256,594 340,822 235,012 155,707
Interest 25,857 6,354 (20,713) 655 16,863
Other revenue
Capital 0 0 0 (309,359)
Cost allocation (279,570) (322,890) (291,749) (317,628) 0 Ending balance 742,722 606,389 666,331 637,971 719,932
Public Facilities (632)
Beginning balance 12,445,256 11,982,002 11,327,524 10,110,789 9,127,783 Revenue 1,146,361 374,013 1,025,717 1,202,606 757,037
Interest 537,019 89,241 (371,240) 14,729 225,969
Other revenue
Capital (561,258) 0 0 0 0
Cost allocation 0 0 0 (600) 0
Ending balance 13,567,378 12,445,256 11,982,002 11,327,524 10,110,789 Median Landscaping (633)
Beginning balance 5,826,878 5,900,772 5,582,394 5,809,267 5,612,257 Revenue 314,056 229,569 658,150 536,533 454,735
Interest 225,381 50,551 (184,480) 6,607 133,565
Other revenue
Capital (3,798,153) (306,174) (108,392) (760,214) (386,590) Cost allocation (11,720) (47,840) (46,900) (9,800) (4,700) Ending balance 2,556,442 5,826,878 5,900,772 5,582,394 5,809,267 Library Facility (634)
Beginning balance 1,182,630 1,179,839 1,020,693 475,855 248,297 Revenue 514,577 104,438 285,160 567,217 328,919
Interest 47,927 11,812 (38,944) 2,321 9,639
Other revenue
Capital (366,912) (113,459) (87,070) 0 (100,000)
Cost allocation (6,440) 0 0 (24,700) (11,000)
Ending balance 1,371,782 1,182,630 1,179,839 1,020,693 475,855 Section 3

450
Fee Type 2023/24 2022/23 2021/22 2020/21 2019/20
Government Code Section 66006(b)(1)(C) and (D)
Annual Report
Development Impact Fees
City of Fontana
Fiscal Year Ended June 30, 2024
Fund Balances, Fees Collected, Interest Earned, and Project Expenditures - Five Year History Park Development (635)
Beginning balance 20,319,441 18,195,031 5,120,626 5,533,262 6,366,089 Revenue 4,789,942 3,466,764 15,299,536 1,645,189 1,274,558 Interest 826,423 142,775 (553,613) 4,200 148,523
Other revenue
Capital (9,186,190) (1,261,439) (1,452,218) (1,906,824) (1,827,208) Cost allocation (123,970) (223,690) (219,300) (155,200) (428,700) Ending balance 16,625,646 20,319,441 18,195,031 5,120,626 5,533,262 Police Facilities (636)
Beginning balance 3,712,826 3,582,441 3,582,959 2,907,816 2,509,702 Revenue 1,160,918 412,280 640,651 767,821 418,738
Interest 162,230 25,073 (115,173) 5,343 63,840
Other revenue
Capital (813,490) (302,278) (521,396) (80,321) (39,064) Cost allocation (38,880) (4,690) (4,600) (17,700) (45,400) Ending balance 4,183,604 3,712,826 3,582,441 3,582,959 2,907,816 Affordable Housing (698)
Beginning balance 7,351,914 5,470,320 5,656,571 4,772,171 3,974,083 Revenue 2,451,893 2,411,904 1,497,365 876,809 710,496
Interest 250,896 22,377 (137,525) 7,591 87,592
Other revenue
Capital (1,443,294) (552,687) (1,546,090) 0 0
Cost allocation 0 0 0 0 0
Ending balance 8,611,409 7,351,914 5,470,320 5,656,571 4,772,171 Sewer Connection (702)
Beginning balance 3,321,938 2,674,884 2,457,842 2,242,168 2,099,980 Revenue 552,195 811,632 336,864 325,729 281,127
Interest 165,106 49,523 (35,784) 3,774 10,159
Other revenue 900 504,743 510,640 509,039 506,564
Loan proceeds
Loan repayment (416,115) (416,115) (416,115) (416,115) (416,115) Capital (246,908) (293,449) (169,463) (198,753) (213,647) Cost allocation (9,140) (9,280) (9,100) (8,000) (25,900) Ending balance 3,367,977 3,321,938 2,674,884 2,457,842 2,242,168 Section 3

451
Flood Control - San Sevaine (620) 0
Due to County Flood Control
See Findings
Flood Control - Etiwanda (621) 0
See Findings
Storm Drain (622) 10,320,615
0063 COURTPLACE 2025 7,134,400 2,279,000 964,314 1,314,686 32% 3361 CYPRESS STORM DRAIN 2025 21,608,344 11,729,715 2,723,786 9,005,929 54% Circulation (630) 30,873,355
Due to other funds for project funding 18,370,049
0002 W LIBERTY PARKWAY/MILLER TS 2025 829,884 44,884 28,795 16,089 5% 0003 FONTANA SRTS GAP CLOSURE 2025 3,745,000 45,912 16,890 29,022 1% 0039 CITRUS AVE WIDENING AT SR-210 2025 620,000 199,020 34,425 164,595 32% 0042 WESTGATE AT CHERRY & VICTORIA AVE2025 4,040,000 1,251,900 0 1,251,900 31% 3058 I-10 CEDAR INTERCHANGE 2025 4,109,655 4,109,655 512,767 3,596,888 100% 3087 I-10 CHERRY INTERCHANGE 2025 10,226,733 9,553,068 9,553,068 0 93% 3088 I-10 CITRUS INTERCHANGE 2025 26,350,374 17,614,401 16,395,578 1,218,823 67% 3281 SIERRA: FOOTHILL - BASELINE 2025 19,843,064 6,852,882 5,334,766 1,518,116 35% 3323 I-15 BASELINE INTERCHANGE 2025 6,028,000 6,028,000 5,775,703 252,297 100% 3333 FOOTHILL: HEMLOCK - ALMERIA 2025 2,230,000 1,357,830 452,587 905,243 61% 3339 ALDER - LOCUST RAMONA SRTS 2025 5,406,660 350,160 0 350,160 6% 3350 ETIWANDA/SLOVER 2025 13,147,629 3,146,196 1,107,103 2,039,093 24% 3378 SIERRA: SUMMIT TO I15 ROW 2025 400,000 128,400 83,936 44,464 32% 0063 COURTPLACE 2025 7,134,400 648,000 0 648,000 9%
3361 CYPRESS STORM DRAIN 2025 21,608,344 109,140 87 109,053 1% 3351 I-10 Citrus Landscape (3088) 2025 642,492 642,492 618,380 24,112 100% 3353 I-10 Cherry Landscape (3087) 2025 130,000 130,000 99,685 30,315 100% 3367 Alder Middle School S/W 2025 3,770,889 97,144 58,758 38,386 3% 0054 Santa Ana & Juniper Ave TS 2025 910,000 279,270 12,521 266,749 31% Project # Project % From Dev
Impact Fees
Expended
Development
Impact Fees
Budgeted
Development
Impact Fees
Project
Completion
Total Project
Cost
Pending DIF
Expenditures
Projects
Government Code Section 66006(b)(1)(E)
City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024
Section 4

452
Project # Project % From Dev
Impact Fees
Expended
Development
Impact Fees
Budgeted
Development
Impact Fees
Project
Completion
Total Project
Cost
Pending DIF
Expenditures
Projects
Government Code Section 66006(b)(1)(E)
City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024
Fire Facility (631) 22,160,000
Due to Bondholders 22,160,000
Public Facilities (632) 11,000,000
0067 Downtown West Parking Structure 2025 18,000,000 11,000,000 - 11,000,000 61% Median Landscaping (633) 2,293,210
0020 JURUPA AVE. LANDSCAPE MEDIAN 2025 6,340,000 4,690,000 4,105,491 584,509 74% 3361 CYPRESS STORM DRAIN 2025 21,608,344 1,900,000 191,299 1,708,701 9% Library Facility (634) 199,472
Due to General Fund 100,000
0034 LEWIS LIBRARY WALL 2025 300,000 300,000 200,528 99,472 100% Park Development (635) 8,471,697
0010 McDERMOTT PARKING LOT 2025 520,000 520,000 210 519,790 100% 0045 MILLER PARK FENCE 2025 900,000 900,000 242,820 657,180 100% 0058 MARTIN TUDOR PARK DESIGN 2025 50,000 50,000 10,010 39,990 100% 3345 SAN SEVAINE PH I 2025 17,552,110 6,500,000 502,449 5,997,551 37% 0008 SOUTHRIDGE DOG PARK EAST 2025 250,000 250,000 19,447 230,553 100% 0009 SOUTHRIDGE DOG PARK WEST 2025 650,000 650,000 23,489 626,511 100% 4241 SPORTS PARK 2025 1,818,171 496 375 121 0%
0003 Southridge Dog Park 2025 47,515 47,515 47,515 - 100% 0019 Southridge Dog Park 2025 25,057 25,057 25,057 - 100% 0010 Veteran's Park Dog Park 2025 100,000 100,000 - 100,000 100% 0071 M Tudor Action Pk 2025 300,000 300,000 - 300,000 100% Police Facilities (636) 222,656
0021 PD FENCE ON SEVILLE AVE 2025 555,297 24,342 24,342 0 4% 2029 POL BUILDING IMPROVEMENTS 2025 531,960 498,540 275,884 222,656 94% 2040 CAPTAIN OFFICES REMODEL 2025 551,151 551,151 551,151 0 100% 4328 EOC POLICE LOBBY REMODEL 2025 2,308,590 278,696 278,696 0 12% Affordable Housing (698) 2,040,992
0007 AHT ACQ/REHAB/RENTAL 2025 1,065,210 1,065,210 924,218 140,992 100% 0023 Aldea Legacy Apts 2025 1,900,000 1,517,931 1,517,931 0 80% 0003 FONTANA SRTS GAP CLOSURE 2025 4,593,414 1,900,000 0 1,900,000 41% Sewer Connection (702) 2,235,079
Due to StateRevolving loan for San Bernardino Trunk Sewer 2,027,679 0063 COURTPLACE 2025 7,134,400 207,400 0 207,400
Section 4

453

City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024

Report of Findings
(Government Code Section 66001(d))

Section 5

San Sevaine Flood Control – Fund 620
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference. The San Sevaine Flood Control fee is a “pass-through” fee to the San Bernardino County Flood Control District (SBCFCD). The SBCFCD determines the project priorities and project expenditures and by agreement the SBCFCD will request a draw of funds on a project priority basis.

Fees are currently being accumulated and are on reserve for these SBCFCD projects.

Upper Etiwanda Flood Control – Fund 621
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference. The Upper Etiwanda Flood Control fee is a “pass-through” fee to the San Bernardino County Flood Control District (SBCFCD). The SBCFCD determines the project priorities and project expenditures and by agreement the SBCFCD will request a draw of funds on a project priority basis.

Fees are currently being accumulated and are on reserve for these SBCFCD projects.

Storm Drainage – Fund 622
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Circulation Mitigation – Fund 630
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference. Many of the projects funded with these fees are subject to a Measure I Agreement which identifies the City’s DIF share.

In order to move projects forward, funds have been borrowed from other sources. All circulation mitigation fees collected are obligated to repay those other sources.

454

City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024

Report of Findings
(Government Code Section 66001(d))

Section 5

Fire Facility – Fund 631
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference. In order to fund the construction of Fire Station No. 71, the Fontana Public Financing Authority issued Taxable Recovery Zone Economic Development Bonds on December 8, 2010, in the amount of $5,420,000. These bonds were refinanced in November 2021 through the issuance of the City’s 2021A Lease Revenue Bonds in the amount of $23,125,000 which will also fund Fire Stations No. 80 and 81 as well as the Fire Protection District Training Facility.

Bond debt service for Fiscal Year 2023/24 is $1,381,100. Fire facility fees as available will be used to service this debt obligation, with any shortfall to be paid by the Fontana Fire Protection District.

Public Facilities – Fund 632
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Median Landscaping – Fund 633
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Library Facility – Fund 634
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Park Development – Fund 635
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.
455

City of Fontana
Annual Report
Development Impact Fees
Fiscal Year Ended June 30, 2024

Report of Findings
(Government Code Section 66001(d))

Section 5

Police Facilities – Fund 636
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Affordable Housing – Fund 698
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference.

Sewer Connection – Fund 702
The purpose of the fee, the relationship between the fee and the purpose, the sources of anticipated funding and the approximate dates on which funding is expected are set forth in the City’s most recent Capital Improvement Plan for Fiscal Years 2023/2024 – 2029/2030, which is incorporated herein by reference. In order to fund the San Bernardino Trunk Sewer project, $8,322,304 was borrowed from the State Revolving Loan Fund. The loan repayment is equal to $416,115 per year. Sewer connection fees are obligated for one-half of this annual repayment amount.

456
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3486 Agenda Date: 12/10/2024
Agenda #: U. Category: Consent Calendar
FROM:

City Manager's Office
SUBJECT:

Acceptance of Energy Efficiency and Conservation Block Grant (EECBG) Funds RECOMMENDATION:

1. Adopt Resolution No. 2024-134, Accepting $230,640 of Energy Efficiency and Conservation Block Grant (EECBG) funds awarded to the City of Fontana by the U.S. Department of Energy.

2. Authorize the appropriation of the awarded funds to implement eligible energy efficiency and conservation projects.

3. Authorize the City Manager, or designee, to execute all necessary agreements, amendments, and documentation required to administer the grant.

COUNCIL GOALS:
· Enhance the local environment for future generations and create a healthy economic and environmental future by committing to purchasing specific products and goods that are climate friendly.

DISCUSSION:

The city was awarded $230,640 under the EECBG program. Staff proposes allocating the funds to the following projects:

1. Municipal Facility Energy Upgrades: Retrofitting lighting, HVAC systems, and other energy- intensive components in city-owned buildings.

2. Renewable Energy Projects: Expanding the installation of solar panels and infrastructure at municipal facilities.

These projects are consistent with the City’s goals of reducing operational costs, minimizing greenhouse gas emissions, and promoting energy independence.

Grant acceptance is required to proceed with these projects. Staff will ensure compliance with all reporting and regulatory requirements as mandated by the U.S. Department of Energy.

FISCAL IMPACT:

The fiscal impact associated with the approval of this item is an increase in Energy Efficiency and Conservation Block Grant (EECBG) Project #37300005, Grant Fund 301 in the amount of $230,640.

The awarded grant funds will fully cover the costs of the proposed projects. No additional General Fund allocations are required. The required budget adjustments will be included in the Mid-Year City of Fontana Printed on 12/5/2024Page 1 of 2
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File #: 21-3486 Agenda Date: 12/10/2024
Agenda #: U. Category: Consent Calendar
Budget Status Report.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 12/5/2024Page 2 of 2
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458
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Program:Energy Efficiency and Conservation Block Grant Program –Bipartisan Infrastructure Law 2021 CFDA:81.128 State: CA Year: 2023Revision:0 Period:09/01/2024 - 08/31/2026 -
Grant Program Federal EstimatedUnobligated FundsNew/RevisedBudgets Total Federal $0.00 $230,640.00 $230,640.00
Total $0.00 $230,640.00 $230,640.00
To access the budget justification information, click on the object class category name. For example, click on"Personnel" in order to access the budget justification associated with personnel.

Using the "Object Class Categories" in the SF-424A Budget form, justify the costs in each category. Theproposed budget costs are estimated values and invoicing shall be calculated from actual costs incurred for eachof the cost categories. Fee or profit will not be paid to award grantees or subgrantees of financial assistanceawards. Contingencies are expressly unallowable, as indicated in 2 CFR, Part 225 (all estimated costs should beallocated to a cost category).

Items identified as direct costs to the project may not be duplicative costs included in the indirect pool that isthe basis of any indirect rate applied for this project. -
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https://www.page.energy.gov/budget/budget.aspx?program=eecbgbil 1/1459

RESOLUTION NO. 2024-134

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA ACCEPTING

ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT (EECBG) FUNDS FROM THE U.S. DEPARTMENT OF ENERGY AND AUTHORIZING THE

IMPLEMENTATION OF ENERGY EFFICIENCY AND RENEWABLE ENERGY PROJECTS.

WHEREAS, the U.S. Department of Energy, under the Bipartisan Infrastructure Law of 2021, administers the Energy Efficiency and Conservation Block Grant (EECBG) Program to assist local governments in reducing energy consumption, promoting sustainability, and achieving energy efficiency goals; and

WHEREAS, the City of Fontana has been awarded $230,640 in EECBG funds to implement projects that align with the program’s objectives, including energy-efficient building upgrades and renewable energy installations; and

WHEREAS, the City is committed to environmental stewardship, operational efficiency, and fiscal responsibility through initiatives that reduce greenhouse gas emissions, lower energy costs, and promote energy independence; and

WHEREAS, the City Council recognizes the importance of this funding to support municipal facility energy upgrades, including retrofitting lighting, HVAC systems, and expanding solar energy infrastructure; and

WHEREAS, accepting the awarded EECBG funds requires compliance with all applicable federal regulations, reporting, and program requirements; and

WHEREAS, this action is exempt from review under the California Environmental Quality Act (CEQA) as it is not considered a project pursuant to CEQA Guidelines Section 15378(b)(4).

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

1. Acceptance of Grant Funds: The City Council hereby accepts $230,640 in Energy Efficiency and Conservation Block Grant (EECBG) funds from the U.S.

Department of Energy.

2. Authorization to Implement Projects: The City Council approves the allocation of the awarded funds to implement eligible energy efficiency and renewable energy projects, including but not limited to municipal facility energy upgrades and the installation of solar panels.

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Resolution No. 2024-134

3. Authorization to Execute Agreements: The City Manager, or designee, is authorized to execute all necessary agreements, amendments, certifications, and documentation required to administer the grant and ensure compliance with applicable regulations.

4. CEQA Exemption: The City Council finds that acceptance of the grant funds and the implementation of energy efficiency projects are exempt from CEQA review as described herein.

5. Effective Date: This Resolution shall take effect immediately upon its adoption.

APPROVED AND ADOPTED this 10th day of December 2024.

READ AND APPROVED AS TO LEGAL FORM:

_____________________________
City Attorney

I, Germaine Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting held on the 10th day of December 2024, by the following to-wit:

AYES:

NOES:

ABSENT
ABSTAIN:

_____________________________
City Clerk of the City of Fontana

_____________________________
Mayor of the City of Fontana

ATTEST:

_____________________________
City Clerk
461
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3359 Agenda Date: 12/10/2024
Agenda #: V. Category: Consent Calendar
FROM:

Public Works
SUBJECT:
2024 City of Fontana Tree Policy Update
RECOMMENDATION:

Approve and adopt Resolution No. 2024-135, updating the City’s Tree Policy Manual COUNCIL GOALS:
· Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
· Invest in the City’s infrastructure (streets, sewers, parks, etc.) by improving the aesthetics of the community through code enforcement, street sweeping, and landscape maintenance.

DISCUSSION:

The City of Fontana considers trees to be one of its most valuable assets and is committed to preserving its Urban Forest. To protect the City’s Urban Forest, Fontana adopted its current “Tree Policy Manual,” which governs the management of its urban forest in accordance with the provisions of Chapter 28 of the Fontana Municipal Code.

City staff is recommending a change to the City’s current policy regarding responses to requests for the removal of City trees. The proposed change would allow the requesting party to have a tree removed at their own expense if the initial denial of their removal request is upheld following an appeal to the City Manager. The requesting party would be responsible for all costs, including obtaining a certified arborist’s report, the removal of the tree, and the planting of two new trees at locations designated by the City. The tree removal and new plantings would be carried out by the City’s current tree maintenance contractor, according to their contract rates, plus a 15% administrative fee for staff time.

FISCAL IMPACT:

There is no fiscal impact associated with this update.

MOTION:

Approve staff recommendation
City of Fontana Printed on 12/5/2024Page 1 of 1
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462

RESOLUTION NO. 2024-135

AN RESOLUTION OF THE CITY CO UNCIL OF THE CITY

OF FONTANA , CALIFORNIA , ADOPTING AN AMENDED

CITY OF FONTANA TREE POLICY MANUAL AND
AMENDED MASTER TREE LIST.

WHEREAS, the City of Fontana is responsible for maintenance of the urban forest, consisting of trees located in the public right of way, parks and parking lots; and WHEREAS, trees in urban environments offer numerous benefits, including improved air quality by absorbing pollutants and releasing oxygen, and temperature regulation through shade and transpiration, which cools the air and reduces the urban heat island effect; and
WHEREAS, trees enhance aesthetics and property values, reduce noise by acting as sound barriers, and support biodiversity by providing habitats for various species; and WHEREAS, the City of Fontana considers trees as one of its most valuable assets and is committed to the preservation, proper maintenance and continued growth of urban forestry throughout the City; and
WHEREAS, Fontana Municipal Code Section 28 -34 requires a City Tree Policy Manual, adopted by resolution of the City Council , which defines and illustrates policies and procedures for care and maintenance of trees to be updated periodically; and WHEREAS, Fontana Municipal Code Section 28-28 requires a Master Tree List, adopted by resolution of the City Council, which designates certain species of trees that may be planted within the City and is to be updated periodically; and WHEREAS, the current “City of Fontana Street Tree Palette” and the proposed “City of Fontana Street Tree Palette,” which results in the removal of thirty-three (33) tree types and the addition of ten (10) tree types to the Master Tree List, are included for the City Council’s consideration (Exhibit “A”).

WHEREAS, the City now desires to amend the City of Fontana Tree Policy Manual and the Master Tree List, which is included as the “City of Fontana Street Tree Palette” within the Tree Policy Manual (Exhibit “B”).

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

Section 1. Recitals. The City Council hereby finds that the foregoing recitals are true and correct and incorporated herein by this reference as substantive findings of this Resolution.
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Resolution No. 2024-135

Section 2. CEQA. Amending the City’s new tree polic through this Resolution does not commit the City of Fontana to any action that may have a significant effect on the environment. As a result, such action does not constitute a project subject to the requirements of the California Environmental Quality Act . The City Clerk is authorized and directed to file a Notice of Exemption with the appropriate official of the County of San Bernardino, California, within five (5) days following the date of adoption of this Resolution.

Section 3. Approval. The City Cou ncil approves and adopts the City of Fontana Amended Tree Policy Manual which includes the Amended Master Tree List (Exhibit “B”).

Section 4. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid pr ovision or application, and to this end the provisions of this Resolution are severable. The City declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

Section 5. Certification. The City Clerk shall certify to the passage and adoption of this Resolution.

Section 6. Effective Date. This Resolution shall become effective immediately upon its adoption.

APPROVED AND ADOPTED this 10th day of December 2024.

READ AND APPROVED AS TO LEGAL FORM:

_______________________________
City Attorney
I, Germaine Key, City Clerk of the City of Fontana, California, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting thereof, held on the 10th day of December 2024, by the following to-wit:

464
Resolution No. 2024-135

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________________
City Clerk of the City of Fontana

________________________________
Mayor of the City of Fontana

ATTEST:

________________________________
City Clerk

465
Resolution No. 2024-135

EXHIBIT “A”

CURRENT STREET TREE PALETTE AND AMENDED STREET TREE PALETTE

466
Resolution No. 2024-135

EXHIBIT “B”

CITY OF FONTANA AMENDED TREE POLICY MANUAL INCLUDING AMENDED

MASTER TREE LIST

467
City of Fontana
Public Works Department

TREE POLICY MANUAL

DECEMBER 10, 2024
468

TABLE OF CONTENTS

INTRODUCTION
Statement of Commitment ....................................................................................1 Tree Policy Manual ................................................................................................1 Public Works Department ....................................................................................1 Authority and Intent ..............................................................................................1

GENERAL PRESERVATION AND PLANNED MANAGEMENT
Heritage, Significant and Specimen Trees ...........................................................2 Fontana’s Adopted Master Tree List ..................................................................2 Inventory Administration .....................................................................................2

MAINTENANCE GUIDELINES
Planting ...................................................................................................................3 Viable Planting Sites ..............................................................................................3 Nursery Stock Standards ......................................................................................3 Planting and Staking Standards ...........................................................................4 Tree Planting Specifications..................................................................................4 Newly Planted Tree Maintenance.........................................................................5 Pruning....................................................................................................................5 Pruning Techniques ...............................................................................................5 Training Young Trees............................................................................................6 Pruning Mature Trees ...........................................................................................7 Pruning Cycles .......................................................................................................7 Street, Sidewalk and Visibility Clearance ...........................................................7 Overhead Utility Clearance Pruning ...................................................................8 Root Pruning ..........................................................................................................9 Certified Arborist................................................................................................ 10 Contractor Qualifications .................................................................................. 10 Site Cleanup ..........................................................................................................10 Removal ................................................................................................................10 469

TABLE OF CONTENTS (CONTINUED)

TREE/HARDSCAPE CONFLICTS

Hardscape Damage Response Procedures ....................................................... 13 Hardscape Installation Guidelines ................................................................... 14

PERMITS

Amendments to Policies ..................................................................................... 15 City Easement and Right-of-Ways ................................................................... 15 DEFINITIONS ...................................................................................................

EXHIBITS
17 Permit to Remove Street Trees ......................................................................... 1 Damage Claim .................................................................................................... 2 Permit to Prune Street Trees ............................................................................ 3 Permit to Plant Street Trees.............................................................................. 4 Tree Pruning Standards .................................................................................... 5 Tree Planting Detail ........................................................................................... 6 Selective Root Pruning Standards .................................................................... 7 Root Shaving Standards .................................................................................... 8 City of Fontana Street Tree Palette

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City of Fontana Public Works Department Tree Policy Manual

INTRODUCTION
Statement of Commitment
The City of Fontana considers trees as one of its most valuable assets and is committed to the preservation, proper maintenance, and continued growth of urban forestry throughout the city. Trees in urban environments offer numerous benefits, including improved air quality by absorbing pollutants and releasing oxygen, and temperature regulation through shade and transpiration, which cools the air and reduces the urban heat island effect. Trees enhance aesthetics and property values, reduce noise by acting as sound barriers, and support biodiversity by providing habitats for various species. Trees also aid in water management by reducing runoff and improving infiltration. Exposure to green spaces and trees can reduce stress, encourage physical activity and improve overall well being by promoting social interaction and community cohesion. To ensure the protect ion of its urban forest , the Public Works Department of the City of Fontana has adopted this updated Tree Policy Manual which will govern the management of its urban forest.

Tree Policy Manual
This Tree Policy Manual, as authorized by Chapter 28, Article II, Section 28 -34 of the Fontana Municipal Code, defines the City adopted policies and procedures that shall be utilized for the care of all trees located on City property or within the public right -of-way. This Manual also provides recommended procedures for encouraging the protection or replacement of trees on privately held land. These policies and procedures are based in part on nationally accepted standards for tree care.

This document shall act as a source of direction and guidance for the implementation of the duties, authorities and regulations delineated in Chapter 28 of the Fontana Municipal Code to protect and preserve the urban forest.

Public Works Department
Responsibility for daily management of, and emergency response to, the urban forest belongs to the Public Works Department (also known as “Public Services”) The department provides forestation and maintenance services and oversees all contracted and permitted work on City maintained trees. The Department maintains records, including a comprehensive list of the Ci ty’s tree inventory. The Department is the primary resource for residents and businesses that may have concerns or questions about trees in the City. The Department provides residential educational materials on proper tree care, hosts events intended to bring attention to the urban forest, and educates the public on the importance of urban forestry, including the annual Arbor Day Celebration.

Authority and Intent
Pursuant to Fontana Municipal Code Chapter 28, Article II, Section 28-34 , this manual is adopted in the best interest of the City and its citizens as a comprehensive plan for the development and maintenance of trees on parkways and public properties . The purpose of this Manual is to establish rules and regulations relating to the selection, planting, care, and maintenance of trees within parkways and public properties , and for the establishment of rules and regulations regarding the planting, maintenance, removal or replacement of certain trees on privately owned property.

Page | 1
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City of Fontana Public Works Department Tree Policy Manual

GENERAL PRESERVATION AND PLANNED MANAGEMENT
Heritage, Significant and Specimen Trees
Specific trees, which by virtue of their species, size, age, condition, location, appearance, or historical significance, shall be protected by ordinance, Article III of Section 28 of the Fontana Municipal Code.

Fontana’s Adopted Master Tree List
Fontana’s tree population management plan shall be based primarily upon the City’s adopted plan of parkway trees and Master Tree List. Sect, as amended from time to time by resolution of the City Council pursuant to Section 28-28 of the Fontana Municipal Code. A current copy of the Master Tree List is included in the Appendix of this manual and shall supersede all prior adopted lists. The Master Tree List will designate certain species of trees that may be planted within the City of Fontana.

Tree species were evaluated based on the following criteria:
 Species Hardiness. The tree’s adaptability to the region, specifically regarding its ability to resist frost, freezing temperatures, and extreme heat.
 Drought Tolerance. The ability to withstand long periods of drought.  Durability and Wind Resistance. The ability to withstand strong winds.  Grow Space. The expected tree trunk circumference and root flare at maturity.  Pest and Disease resistance. Resistance to insect and disease infestation.  Subsurface and surface growth habits. Potential negative impact to infrastructure.  Tolerance to a variety of irrigation practices. Toleration of variable moisture conditions, including inundation.
 Soil qualities. Toleration of variable soil conditions prevalent through the city.  Cleanliness. Fruiting or flowering potential that may negatively impact the aesthetic of the area.  Historically appropriate. Species that exist in a particular area, have traditionally e xisted in an area, or are native to the region.
 Aesthetics and Shading. Aesthetic appeal with the potential for flowering or color changes, or that provide a good amount of shade are preferred.  Availability. Trees that are readily available and locally sourced.

The Public Works Department retains a current inventory of all City owned trees, including detailed site characteristic and work histories for each tree. Tree records shall be updated on a routine basis.

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City of Fontana Public Works Department Tree Policy Manual

MAINTENANCE GUIDELINES
The Public Works Department shall be responsible for overseeing the planting of all City Trees. The following guidelines and procedures have been developed to promote the health and safety of City Trees from the time they are planted through maturity.

Planting
The Public Works Department shall be responsible for administering planting of all trees in the public right-of-way or on any publicly owned land.

Viable Planting Sites
It shall be the objective of the City to plant all viable vacant sites located in the City public right -of- ways and city owned property and to replace any City Tree which has been removed subject to confirmation that the replanting of a tree is a practical and viable option. The Public Works Director shall, in their sole discretion but based on the below criteria, determine the viability of any new or replacement planting of a City Tree.
 Spacing. There is adequate spacing present overhead, underground and radially to allow for the healthy, unimpeded growth of the tree to its mature size. Specific examples of spacing conditions that may make a site unsuitable for planting include inappropriate canopy room between existing trees, proximity of a planting site t o existing utilities creating potential conflicts and damage or inadequate space to accommodate a tree’s girth or root structure. See “Planting Location Requirements” appendix for detailed specifications.  Traffic Clearance. There is adequate line of sight visibility between normal vehicular or pedestrian traffic and necessary signage, streetlights, or views.  Maintenance Resources. There is an adequate and consistent water source available.  Funding. There is funding available the current fiscal year budget for tree planting and in future years for tree maintenance.

Nursery Stock Standards
The City shall make every effort to ensure that it plants only vigorous, healthy trees which can easily be trained into an attractive natural form, with strong roots and good crown development. The specifications for acceptable nursery stock shall be as follows:
 All trees shall be selected from the City’s master tree list.  All trees shall be true to type, or botanical name as ordered or shown on planting plans.  All trees shall have a reasonably straight trunk with a good taper and good branch distribution vertically, laterally, and radially.
 All trees shall be healthy, have a form typical for the species cultivar, be well -rooted, and properly trained.

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City of Fontana Public Works Department Tree Policy Manual  The root ball of all trees shall be moist throughout and the crown shall show no sign of moisture stress.
 All trees shall comply with Federal and State laws requiring inspection for plant diseases and pest infestations.
 No tree shall be accepted that has been severely topped, headed back, pollarded or lion tailed.  When practical, City Trees shall be locally sourced.
 No tree shall be accepted that has co -dominant stems or excessive wea k branch attachments that cannot be trained out without jeopardizing the natural form of the species.  No tree shall be accepted that is root bound, shows evidence of girdling or kinking roots, or has knees (roots) protruding above the soil.

The City shall reserve the right to refuse any nursery stock that does not meet these standards and may require any person who has planted such sub -standard trees, on City property or within City right-of- ways, to have these trees removed and replaced at that person’s own expense.

Planting and Staking Standards
Unless otherwise approved by the Public Works Department, all City Trees shall be planted using materials that meet the following criteria:
 Tree Stakes. Shall consist of two (2) sturdy, ten (10') foot long lodge pole pine stakes. Stakes will be placed on the outer edge of the root ball on either side of the tree, perpendicular to prevailing winds. If larger trees are planted and require guying, International Society of Arbor culture standards shall be adhered to.
 Staking Ties. Shall be sixteen (16") to eighteen (18") inch rubber cinch ties to be fastened to each stake with galvanized roofing nails. Ties will be pulled around the tree’s trunk in a manner which supports the top-heaviness of the canopy but is loose enough to allow for free movement of the tree in the wind.
 Trunk Guards. An approved trunk guard shall be placed around the base of the trunk just above the soil grade.
 Wood Chip Mulch. A four (4") inch uniform layer of City approved wood chip mulch shall be placed within the planting basin of the tree. A space of three (3") inches shall be left between the tree’s stem and the mulch layer to allow airflow and to restrict moisture from remaining static around the base of the trunk.

Tree Planting Specifications
Most nursery tree stock in California is sold in a containerized form. The following guidelines are specific for containerized stock. If utilizing bare root or balled and burlapped trees, refer to the appropriate International Society or Arbor culture (ISA) guidelines for planting instructions.

All trees shall be planted immediately after the planting container has been removed. Containers shall not be cut or otherwise damaged prior to delivery of trees to the planting area.

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City of Fontana Public Works Department Tree Policy Manual The planting hole is one of the most important factors in establishing a healthy tree. Measure the width and depth of the root ball prior to digging. The diameter of the planting hole shall be dug at least two (2) times wider than that of the root ball. The depth of the planting hole shall be dug slightly shallower than the depth of the root ball to allow for the top two (2") inches of the root crown to remain above the finished grade.

Before placing the tree into the planting hole, tamp down the base of the hole to allow the tree to stand straight and to avoid the potential of the tree settling below the finished grade. Scarify or scrape the sides of the planting hole to break down any glazing or compaction which may have occurred as a result of digging.

Position the tree in the hole so that the tree stands upright, and the top of the root crown is slightly exposed above the grade. Backfill the planting hole with clean , native soil no higher than halfway up the root ball. Slightly tamp the soil to remove air pockets but be sure not to compact the soil too much. Complete the backfilling to the finish grade. Once again, tamp the soil slightly to remove air pockets.

Form a watering basin out of backfill material, approximately six (6") inches high, around the dripline of the tree. Remove all nursery stakes, ties, and ribbons from the tree, and install the planting and staking materials as specified. Give the tree an initial deep watering. Fill watering basin as many times as necessary to completely saturate root ball.

Tree stakes and ties should be removed from the tree within two years after planting, or when the circumference of the tree’s trunk is equal to or exceeds the circumference of the stakes.

For specific details on proper planting procedures refer to the Standard Tree Planting and Staking instructions in the appendix of this manual.

Newly Planted Tree Maintenance
All newly planted trees shall be placed on a schedule to receive young tree maintenance immediately after completion of a planting program (refer to the Training Young Trees section for details).

Pruning
The Public Works Department shall be responsible for administering and scheduling pruning of all City Trees.

All City Trees shall be pruned on a regular basis using professionally accepted standards, as established by the ISA. All City Trees shall be pruned in a manner that will encourage good development while preserving their health, structure, and natural appearance. Topping, heading back, stubbing, lion-tailing or pollarding of public trees is prohibited. For specific details on proper pruning refer to the Tree Pruning Standards in the Appendix of this manual.

Pruning Techniques
Thinning - sometimes called “drop -crotching” in mature trees, shall be the standard pruning technique for City trees. A thinning cut is the removal of a branch at its point of origin, or the shortening of a branch to a lateral that is large enough to assume the terminal role.

When removing a live branch, pruning cuts should be made just outside the branch bark ridge Page | 5
475
City of Fontana Public Works Department Tree Policy Manual and collar. This location of cut contrasts with a “flush cut” which is made inside the branch bark ridge and collar. Flush cuts should be avoided because they result in a larger wound and expose trunk tissues to the possibility of decay. If no collar is visible, the angle of the cut should approximate the angle formed by the branch bark ridge and trunk.

When removing a dead branch, the final cut should be made just outside the branch bark ridge and collar of live callus or wound wood tissue. If the collar has grown out alon g the branch stub, only the dead stub should be removed; the live collar should remain intact.

If it is necessary to reduce the length of a branch, the final cut should be made just beyond (without violating) the branch bark ridge of the branch being cut to. The remaining branch should be no less than one third (1/3) the diameter of the branch being removed, and with enough foliage to assume the terminal role.

Pruning cuts should be clean and smooth, leaving the bark at the edge of the cut firmly attached t o the wood. A three -cut process, sometimes referred to as jump -cutting, should be used to remove larger limbs to avoid stripping or tearing of the bark, and to minimize wounding.

Training Young Trees
Properly trained trees will develop into structurally s trong trees well -suited for their surrounding environment. These trees should require little corrective pruning as they mature. Young trees that reach a large mature size should have a sturdy, tapered trunk with well -spaced branches that are smaller in diameter than the trunk.

Each City Tree shall be scheduled for training at least once within the first three years after being planted. The Young Tree Maintenance Program shall entail evaluating the overall condition of the tree, cleaning of any dead wood and pruning the tree in such a manner as to develop good structure, checking to ensure stakes and ties are providing adequate support for the tree, and examining the watering basin to verify tree is receiving adequate water.

Pruning Mature Trees
As trees mat ure, their need for structural pruning should decrease. Pruning should then focus on maintaining tree structure, form, health, and appearance. This shall be accomplished through one of the three methods described below.
 Crown cleaning - or cleaning out, is the removal of dead, dying, broken, diseased, crossing, weakly attached, and low -vigor branches from a tree’s crown, as well as the elimination of water sprouts, sucker growth and foreign materials from the entire tree.  Crown restoration – is intended to improve structure and appearance of trees that have sprouted vigorously after being broken, topped, or severely pruned us ng head ng cuts. One to three sprouts, on ma n branch stubs, should be selected to form a natural appearing crown. The more vigorous sprouts may need to be thinned or cut to a lateral to control length growth or ensure adequate attachment for the size of the sprout. Crown restoration may require several pruning’s over several years. Crown restoration shall be completed as necessary, based upon the specific condition and circumstances surrounding the tree.

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City of Fontana Public Works Department Tree Policy Manual  Crown thinning - is the selective removal of branches to increase light penetration and air movement through the crown. Thinning opens the foliage of the tree, reduces weight on heavy limbs, distributes ensuing invigoration throughout the tree and helps retain the tree’s natural form.

When thinning the crown of mature trees, no more than twenty percent (20%) of the tree’s live growth should be removed. In slower growing, or particularly sensitive species (such as native Oaks), no more than ten percent (10%) of live growth should be removed. Trees shall always be thinned to their natural form and should retain wel l-spaced inner lateral branches with foliage. Trees and branches so pruned will have mechanical stress more evenly distributed along the branch and throughout the tree.

Pruning Cycles
Frequency of pruning is also important to a tree’s health. The City of Fontana is currently divided into 36 districts, for purposes of scheduling the trimming of City Trees. The City’s objective is to service each district within a five-year trim cycle. Scheduling is at the discretion of the Public Works Director. Every City Tree shall be pruned when that particular district is being serviced. If a resident requests tree pruning before or after their district is serviced, the Public Works Director shall determine if it is appropriate or feasible to comply with the request. Hazardous conditions shall be evaluated and attended to as soon as possible.

Street, Sidewalk and Visibility Clearance
Street and sidewalk clearance standards shall be achieved through crown raising. Crown raising is the removal of lower branches to provide clearance for vehicles, pedestrians, and bicyclists. Only those branches that must be removed to achieve the established height clearance standard shall be pruned. All such pruning cu ts shall be thinned back to the nearest lateral found above the set minimum height standard.

Where possible, developing trees should be maintained in such a manner that at least one half (1/2) of the foliage should be on branches that originate in the lower two thirds (2/3) of the tree. Similarly, branches should have even distribution of foliage along their lengths. This will ensure a well - formed, tapered structure and will uniformly distribute stress within the tree.

All City Trees shall be maintained to the height clearance specifications established below:
 Over sidewalks or park paths, limbs shall be raised to a minimum of seven (7') feet and a maximum of eight (8') feet from grade to first lateral branch. In locations where no sidewalks exist, limbs may be retained below this minimum elevation if they conform to the natural shape of the species. In locations where City Trees are set back from, or do not interfere with, sidewalk traffic, limbs may also be retained below this minimum height specification.  Over residential or collector streets, limbs shall be raised gradually from eight (8') feet at curb to thirteen (3') feet over traffic lanes from the grade to wood giving the appearance of an arch, rather than an angle.

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City of Fontana Public Works Department Tree Policy Manual  Over arterial streets, limbs shall be raised to fourteen (14') feet from grade to first lateral branch.

A major arterial street may require a higher max mum over central traffic lanes for existing mature canopy-forming limbs.

Visibility clearance for streetlights or signage shall be achieved through “windowing” through the foliage of a tree, rather than severely raising or reducing its crown. Only those branches that need to be removed to attain the visibility clearance desired shall be pruned. All such pruning cuts shall be thinned back to the nearest lateral found away from the structure that is to be cleared.

Overhead Utility Clearance Pruning
Line-clearance tree workers must be trained to work safely around high voltage conductors. The United States Occupational Safety and Health Act (OSHA) and the American National Standards Institute (ANSI) have established minimum distances to be maintained by tree workers from electrical conductors. Line-clearance work involving City Trees shall adhere to these standards, as well as the utility pruning standards established by the International Society of Arboriculture (ISA) and the Utility Arborist Association (UAA).

The following guidelines are designed to maintain the r equired clearance of City Trees from high voltage transmission lines with a minimum of resprout ing and fewer pruning cycles. These guidelines are based upon known tree responses to various pruning techniques. In no sense should they take precedence over safe work practices.

A tree’s growth under utility lines is most economically managed by lateral or directional pruning (thinning cuts). Directional pruning is the removal of a branch to the trunk or a significant lateral branch growing away from the conduct or. Heading cuts (topping), on the other hand, encourages vigorous sprouting and increases the frequency of pruning cycles and the cost of the maintenance.

All trees in public right -of-way should be examined for hazards before commencing with line - clearance work. Hangers and dead wood should be removed. Where possible, the tree should be allowed to attain normal height, with crown development maturing away from high voltage conductors.

To achieve clearance, pruning should be restricted to removal of branche s at crotches within the tree’s crown.

As few pruning cuts as are reasonable should be used to achieve the required clearances.

When the pruning of a branch will result in the loss of more than one half (1/2) of the foliage on the branch, it should be removed to the parent stem.

Precautions shall be taken to pre-cut large limbs to avoid stripping or tearing the bark and minimize unnecessary wounding. Heavy limbs should be lowered on ropes to avoid damaging bark on limbs and trunks below.

The placement of pruning cuts shall be determined by anatomy, structure, and branching habit. Limbs Page | 8
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City of Fontana Public Works Department Tree Policy Manual should not be arbitrarily cut based on a pre-established clearing limit.

Final drop-crotch cuts should be made outside the branch bark ridge on the main stem or lateral branch. The remaining branch shall be no smaller than one third (1/3) the diameter of the port on be ng removed. The removed port on should be pruned out to direct th e remaining growth away from conductors.

Line clearance in the City of Fontana is currently being administered by Southern California Edison (Edison). The city works proactively with Edison in an effort to ensure Edison adheres to appropriate line- clearance methods and practices when practical and appropriate. Public safety, including power line safety shall control regarding decisions for appropriate pruning measures. Should improper pruning methods occur that cause damage to a City Tree, which methods were employed based on concerns for public or utility line safety, City Trees may be removed in the sole discretion of the Public Works Director. The topping of many tree species results in irreparable damage, requiring removal and replacement. City Trees that are topped or otherwise improperly pruned, even for public safety, by an agency, individual, or entity other than the City of Fontana shall be replaced at the full cost and expense by the entity responsible for the improper pruning.

Root Pruning
The root system of a tree is one of its most important physiological components. Roots are the main source of water and mineral absorption for the tree, they provide a foundation and stability, and they act as one of the principal storage areas for food. The proper pruning of a tree’s roots when necessary is as important as the proper pruning of a tree’s crown.

Whenever possible, the City, utility companies or contractors shall avoid removing any of a tree’s root system. In instances where there exists a need t o install subsurface structures or utilities, such as irrigation lines or block wall footings, every effort shall be made to avoid encroachment within the dripline of a tree. If it becomes necessary to excavate within a tree’s dripline, every effort, if cost efficient, shall be made to tunnel under or through the tree’s root system with a minimal amount of pruning, rather than to trench across the tree’s roots.

When root removal becomes necessary for the installation and/or repair of hardscape, such as sidewalks, driveway approaches or curb and gutters, and other utilities, two methods shall be employed by the City to eradicate invasive or encroaching roots. These two methods are specified below and are detailed in the Selective Root Pruning and Shaving Stan dards detailed in the Appendix of this manual.
 Selective Root Pruning is the removal of specific offending roots which are directly interfering with a work area. When pruning out selective roots, great care shall be given to retain as much root surface as possible, including sufficient buttress root dispersal around the radius of the tree. Roots shall be cut back at least four (4") inches away from new hardscape to the nearest node. Pruning cuts shall be made clean and smooth with minimal crushing or tearin g of the remaining root.
 Root Shaving is the removal of a small portion of a nonessential buttress root or general root with a diameter of four (4") inches or greater. Roots will be shaved down to allow for at least Page | 9
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City of Fontana Public Works Department Tree Policy Manual two (2") inches of clearance between the root and the new hardscape. Shav ing cuts shall be made clean and smooth with no crushing or tearing of the remaining root, root shaving shall be undertaken at the discretion of the Public Works Department.

All root pruning activities shall be recorded by the Public Works Department in the City’s tree inventory.

Certified Arborist
Any City -contracted tree company shall be required to have in their employment a full -time, permanent Certified Arborist, as accredited by the International Society of Arboriculture (ISA). This person shall be responsible for ensuring that the contractor’s crews are performing work according to City specifications.

Contractor Qualifications
All contractors shall be required to have a State contractor’s license, which states class of license required for tree work and provide workmen’s compensation benefits to their employees. They shall also provide for equal opportunity employment and have appro priate liability insurance as determined by the City. Contractors shall provide all services in compliance with City specifications.

Specifications are written based on the policies outlined in this manual.

Site Cleanup
Work areas shall be left in a condi tion equal to or better than that which existed prior to the commencement of forestry operations and in accordance with all applicable City Municipal Code Requirements. All debris shall be cleaned up each day before the work crew leaves the site unless permission is given by the City to do otherwise. All lawn areas shall be raked, all streets and sidewalks shall be swept, and all brush, branches, rocks, or other debris shall be removed from the site. City inspector shall be responsible for inspection upon completion of work.

Removal
The Public Works Department shall have the duty to inspect the condition of all City Trees and the authority to remove trees in the public right-of-way or city owned property if the tree meets any of the below specific criteria (Removal Criteria).
 Hazardous Trees. Trees that are declared a hazard by virtue of being determined at high risk of failure including but not limited to frequent limb breakage or danger of falling with a high potential of hitting a target (a sidewalk, str eet or building) shall be removed. A tree with a majority of decayed, dead, or damaged foliage, branches, trunk, or roots may be determined to be a hazard and require immediate removal.
 Dead and Dying Trees . City Trees that are dead or have been determined by the Public Works Department to be in a state of severe decline, although perhaps not an immediate hazard, shall be removed at the earliest practical opportunity.
 Diseased/Insect Infested Trees. Trees that become diseased or are infested with an insect that is declared to be an eminent serious pest threat to the other nearby trees shall be removed, if removal is determined to be the best pest control solution.

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City of Fontana Public Works Department Tree Policy Manual  Emergency Removals. Healthy trees shall be removed if an emergency condition exists, and tree removal is determined to be the only option available as to not impair emergency services.  Hazardous Condition Removal. If it is determined that a tree is causing a serious visibility hazard (i.e., corner tree that blocks the visibility of a stop sign) it should be removed. Removal shall be considered only if pruning to correct the hazard would seriously damage the tree or where the continuing cost of repeated pruning would outweigh the value of the tree.  Hardscape damage - If hardscape repairs cannot be completed without severe root pruning which would jeopardize the health and stability of the tree.  Structural damage - If a tree is causing structural damage to a building, street, or wall and the condition cannot be corrected without removing the tree.  Sewer blockage - If tree roots have blocked a sewer and the public services sewer crew has been called out to clear the obstruction more than once per year, the tree shall be removed.

Requests for Tree Removal or Replacement
All tree removal requests will be evaluated with the ultimate goal of preserving the City’s Urban Forest. Any resident or business owner (Reporting Party) may request tree removal of a specific tree or group of trees located in a city right-of-way, city owned property, or city-controlled easement (City Tree). A representative of the Public Works Department (Staff) will review the request and determine, with the input of the certified arborist contracted by the City, if any of the above criteria have been met. If a determination is made that the tree should be removed, a work order for the removal shall be created and the removal shall occur at the earliest practical opportunity. If a replacement tree is warranted, the replacement shall be completed at the earliest practical opportunity.

If the requested removal does not meet any of the criteria above, the Reporting Party shall be notified of the decision to deny the request, which notification shall include any appropriate actions that will be taken to address the initial concerns, such as pruning or ongoing observation.

If the Reporting Party does not agree with Staff’s decision to deny a removal request, they may appeal the decision to the City Manager. The Public Works Department will provide the Reporting Party with information on the City’s appeal process pursuant to the authority granted by Section 28-33 in the Municipal Code.

The Reporting Party may request removal or replacement of a specific tree that is located within a city right-of-way, city owned property, or city-controlled easement adjacent to their property that does not meet the above Removal Criteria if the tree or trees present a potential public or private nuisance. The Reporting Party that elects to make a request for removal for convenience or potential nuisance shall pay appropriate application fees as identified in the City’s fee schedule. Upon receipt of the request as accompanied by appropriate payment of fees, Public Works Staff will solicit a Certified Arborists Report to supplement the certified arborist’s initial determination to the City, and evaluate the request based on the additional factors listed below to determine the significance of the requested removal, weighing the burden that the tree’s preservation presents to the property owner versus the loss of the positive impacts of the tree to the City or the public if the tree is removed.

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 Species of the tree. Does the tree’s species further the City’s urban forest management goal?  Size of the tree. Does the tree’s size provide significant value in terms of shade, tree canopy, and neighborhood character?
 Approximate age of the tree. Whether the tree is young, mature, or near the end of its life cycle.
 Health of the tree. Is the tree in good health or it is showing signs of advanced decline or approaching the end of its life?
 Physical characteristics of the tree. Does the tree have species appropriate structure and form that suggests a lack of structural integrity?
 Environmental productivity of the tree. Is the tree believed to be environmentally productive or has productivity likely declined due to age, condition, or poor health?  Safety. Will the preservation of the tree present current or near-term future safety concerns for the residents, adjacent property owners, and public at large?  Asset value of the tree. The value of the tree as listed in the City’s inventory may be considered.
 Utility conflicts. The potential for current and likely near-term future conflicts with above and below ground, public or private utilities may be considered when evaluating a removal request.
 Species and age diversification may be considered to determine if the street would benefit from having a more diverse street tree population to reduce threats of deforestation.

City staff evaluate the request based on these additional criteria and analysis developed in the Certified Arborists Report and present a recommendation to the City Manager for consideration of removal or preservation. The City Manager shall review the request and the recommendation of Staff, and will make a final appeal determination pursuant to Section 28-33 of the Municipal Code If the City Manager approves the Reporting Party’s appealed request for removal, a work order for the removal shall be created and the removal shall occur at the earliest practical opportunity. If a replacement tree is warranted, the replacement shall be completed at the earliest practical opportunity.

If the City Manager determines that the tree shall be preserved, the Reporting Party may be offered the opportunity to have the tree removed at their expense. The Public Works Department staff will provide the property owner with information on this process pursuant to the authority granted by Section 28- 33 on the Municipal Code.

If the City Manager, upon an appeal pursuant to Section 28-33 of the Municipal Code grants the Reporting Party the opportunity for the tree to be removed or removed and replaced (which shall be specified by the City Manager) subject to meeting the criteria noted above as potential for nuisance, the property owner will be required to pay for the approved subsequent action. The approval shall include conditions for replacement, if applicable, specifying the number, size, species and cost of tree or trees that shall replace the tree or trees proposed for removal. Costs will be determined based upon the City’s current contract rates for removal and planting (see below for current contract rates as of January 1st, 2025). All costs will include a 15% administrative fee for staff time. Upon receipt of payment, the removal and replacement, if applicable, shall proceed at the earliest opportunity. A viable planting site for the replacement trees will be determined by Staff. The planting sites may or may not be adjacent to the removed tree or on the same property.

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Tree Removal and Replacement Rates – Effective 1/1/2025 Tree removal fees:

Trunk diameter up to 24” $43.00 per diameter inch
(requires minimum 24” Box replacement tree)
Trunk diameter 25” or greater $53.00 per diameter inch
(requires minimum 36” Box replacement tree)
Tree replacement fees:
24” Box tree installed $395.00 each
36” Box tree installed $1,150.00 each

TREE/HARDSCAPE CONFLICTS
In keeping with the City’s policies for protecting and preserving the health and well -being of our urban forest while providing for the safety of our citizens, the following guidelines have been established for correcting potentially hazardous situations that result from tree roots disturbing nearby hardscape.

Hardscape Damage Response Procedures
There are several factors that must be considered in determining the course of action necessary for addressing hardscape damage concerns which involve City trees. These actions are driven by the extent of the damages, and whether the damages are located on private property.

The Public Works Department shall inspect all hardscape damage. If the hardscape concerns include potential damage to private property, the matter shall be referred to the Public Works Manager for evaluation. A sample Tree Report, to be used for such assessments, is included in the Appendix of this Manual.

Upon initial inspect on of the area, staff must determine what course of action is necessary to respond to the problem. The following are the most commonly occurring hardscape problems, and the courses of action that shall be employed to rectify them:
 Hardscape damage is with in public right -of-way and will require a temporary asphalt ramp, followed by permanent repair of the area at a later date. Generally, an asphalt ramp should be installed if there exists a deviation in the concrete that is greater than three-fourths (3/4) of an inch.
 Hardscape damage within public right-of-way but is of such a minor nature that the damaged area can be ground down by a concrete grinding machine. Any deviation in the concrete of less than one- half (1/2) of an inch should be able to be rectified by grinding the raised lip down to grade. If necessary, permanent repair of the area should be scheduled for a later date.  Hardscape damage within public right-of-way, but the nature of the damages cannot be rectified by temporary measures. Thus, permanent repair of the area will need to be scheduled based upon

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City of Fontana Public Works Department Tree Policy Manual the potent al the damages have for creating a public safety hazard.  Hardscape damages are on private property and thereby cannot be addressed by the City.

However, there are clear cut indications that at least some of the damages that have occurred are a direct result of a tree in the publi c right-of-way. Thus, the res dent may have reason to file a claim for damages with the city. If the resident does elect to file a claim, the Public Works Director or designee shall be responsible for evaluating the damaged area and submitting a tree assessment report to the City Clerk for inclusion with the claim file.  Hardscape damages are on private property and thereby cannot be addressed by the City, and there exists no clear -cut indication that a City Tree is the source of the damages. Thus, the resident will be responsible for excavation of the damaged area, for the purpose of exposing any invasive roots, should they wish to file a claim for damages with the city.  Upon excavation of the area, it is the resident’s responsibility to contact the Public W orks Department and schedule an evaluation and assessment of the damage. The Public Services Director designee shall be responsible for submitting this assessment report to the City Clerk for
inclusion with the resident’s claim.
 Hardscape damage is on private property and is clearly not caused by a City Tree.  Once a course of action has been determined, staff shall be responsible for providing written notification to the involved parties informing them of staff’s findings and of what measures they or the City will need to take to rectify the problem.

Hardscape Installation Guidelines
The general policy that shall be observed when repairing or replacing hardscape adjacent to a public right-of-way tree is that the health and integrity of the tree shall be taken into consideration before work commences. Every effort shall be made to protect the tree from root or trunk damage.

Several alternatives are available for accommodating the installation of new hardscape without severely infringing upon a tree’s root system. Any hardscape installation that may involve the removal of an extensive portion of a tree’s root system, shall first be evaluated by the Public Works Department. If it is determined by the Public Works Department that the removal of the offending roots might jeopardize public safety or the health or integrity of the tree, then one of the follow ng alternatives should be considered:
 Off-Set. An off set is the tapering or reduction of a sidewalk’s size down to a width no less than forty-eight (48”) inches.
 Ramping. A sidewalk may be constructed to ramp over offending roots, as long as the slope of the grade does not exceed one (1’) foot of elevation change within a span of twelve (12') linear feet.
 Reconfiguration. Sidewalks do not need to be construct ed in a straight line. If the public easement can accommodate, a sidewalk may be reconfigured to curve around a tree in a suitable manner.

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City of Fontana Public Works Department Tree Policy Manual

 Removal. If no other hardscape installation alternative is feasible, a tree may be removed as long as it complies with the Tree Removal criteria established in this manual.

PERMITS
No person shall plant, remove, cut, prune, apply pesticides or otherwise disturb any City Tree in public right -of-way or on City owned property without first obtaining a permit from the Public Works Department . Applications for permits must be made to the Public Works Department on forms provided by the department and shall include such information as the Department deems necessary to review the application. Examples of the tree permit forms are included in the Appendix of this manual.

Any business wishing to acquire a permit for tree work must provide an official copy of a current City of Fontana Business License at the time of application.

The Public Works Department shall issue the permit if the proposed work is desirable, and the proposed method and workmanship are performed to the standards defined under the Maintenance Guidelines described in this manual. Any permit granted shall contain a date of expiration and the work shall be completed in the time allowed on the permit and in the manner described in it. A permit shall be null and void if its terms are violated. See Fontana Munici pal Code sec. 28 -74 penalties.

Permittees shall be required to sign a Maintenance Guidelines form as proof of their understanding of the City’s tree care specifications. Additional information provided to permittees shall include a copy of this permit policy, as well as any other details or standard plans related to the work that is to be completed.

Permittees shall be required to have a copy of the permit, and a current Fontana Business License (if applicable), present always at the work site. Work und ertaken by the permittee, or their agents may be stopped immediately, and the permittees permit may be revoked by written order of the Public Works Department if it is determined that the program of work or conditions outlined in the permit are not being complied with.

Amendments to Policies
The Public Workers Director shall review these policies and procedures on an annual basis. The Director reserves the right to make non -material revisions or amendments to the policies if it is deemed that such revisions or updates are necessary. Material revisions to this manual shall require codification by Resolution of the City Council.

City Easements and Right-of-Ways
The city retains an established right-of-way or easement on each public street. These easements are City controlled areas for the purpose of public improvements, including streets, sidewalks, curb and gutters, driveway approaches, streetlights, street signs and street trees. Easements size may vary per street and will usually extend beyond street width including parkways and sidewalks.

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City of Fontana Public Works Department Tree Policy Manual Any tree located within this public easement is recognized as a City Tree and is subject to the policies and procedures described here in and in the Municipal Codes which govern all City Trees and public property. Illustrations of typical City right -of-way or easements are included in the Appendix of this manual.

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DEFINITIONS
ANSI Z133.1: The Section of American National Standards which defines safety requirements for pruning, trimming, repairing, maintaining, and removing trees and for cutting brush, and for the use of equipment in such operations.

Arborist: A person possessing the technical competence through experience and related training to provide for or supervise the management of trees and other woody plants i n the residential, commercial, and public landscape and possess a current ISA certification.

Branch Collar: Trunk tissue that forms around the base of a branch between the main stem and the branch or a branch and a lateral. As a branch decreases in vigor or begins to die, the collar usually becomes more pronounced and more completely encircles the branch.

Branch Bark Ridge: A ridge of bark in a branch that marks where branch and trunk tissues met and often extend down the trunk.

Callus: Undifferentiated tissue initially formed by the cambium around and over the wound. Co- dominant Stem: A large branch or secondary leader competing with a tree’s leader.

Crotch: The angle formed at the attachment between a branch and another branch, leader, or trunk of a woody plant.

Crown: The leaves and branches of a tree or shrub; the upper port on of a tree from the lowest branches on the trunk to the top.

DBH: The Diameter at Breast Height as measured at four (4) feet above the ground is the standard measurement of tree size used by arborists.

Dripline: Is the ground area at the outside edge of a tree's branches or canopy.

ISA: The International Society of Arbor culture is a professional association of arborists and tree workers recognized internationally as one of the leading agencies in the research and establishment of high standards for all aspects of tree care.

Lateral: A branch or twig growing from a parent branch or stem.

Leader: A dominant upright stem, usually the main trunk.

NAA: The National Arborist Association is a professional trade association whose chief purpose is to raise the standards of the tree care industry and provide useful service to the public.

Parent Branch or Stem: The tree trunk, or a larger limb from which lateral branches are growing.

Root Ball: The mass of roots growing from the trunk of a tree, including the surrounding soil.

Root Collar: The junction between the root of a plant and its stem, often indicated by a trunk flare.

Topping, Heading Back, Stubbing, Lion-tailing or Pollarding: Severe types of pruning which usually produce fewer desirable results than more moderate pruning with respect to the tree's natural form and which are generally hazardous to the overall health and stability of the tree.

UAA: The Utility Arborist Association is a professional trade association whose chief purpose is to raise the standards of utility line clearance, while providing the safest conditions possible for line-clearance workers.

Wound: An opening that is created when the tree's protective bark is penetrated, cut, or removed, injuring, or destroying living tissue. Pruning a live branch creates a wound, even when the cut is properly made.

Wound wood: Differentiated woody tissue, also referred to as a callus roll, which forms after callus has formed around the margins of a wound. Wounds are closed primarily by wound wood.

487
Exhibit 1

CITY OF FONTANA

PUBLIC WORKS DEPARTMENT

Permit to Remove Street Trees
Date: ___________________ *
I, do hereby request authorization of the City of
Fontana to remove _____ street tree(s) from within the public easement along the property at __________________________________ in accordance with all City specifications. Said work. will begin on _____________ and will be completed by _______________ . I further agree to bear all costs and liabilities connected with the approved removal project; and that, any contractor used to complete this project is lice nsed by the City of Fontana to do approved work; and that, the approved work will be performed by a certified tree worker based on City Standards; and that, all work will be performed in a timely and workman like fashion.

Signature of Permit Recipient Date
Authorized Representative Signature Date
Print Name Title
* PERMIT EXPIRES 60 CALENDAR DAYS FROM THE ABOVE DATE

488

Exhibit 2

CITY OF FONTANA

PUBLIC WORKS DEPARTMENT
Damage Claim

NOTE: Certain procedures governing the filing of claims for money or damages are set forth in Title I, Division

3.6, Part 3 (Sections 900, et seq.) of the Government Code, State of California. This Claim for Damage or Injury has been prepared in accordance with California Government Code, Sect on 9 0.4. When this form is used, please submit to the City Clerk's Department, City Hall, 8353 Sierra Avenue, Fontana, CA 92335. [ ] Original Filing [ ] Amendment to Previous Claim
Name of Claimant Address (City, State & Zip Code)
Address to Send Notices Telephone Number (Include Area Code) Place of Occurrence of Damage or Injury Date of Occurrence of Damage or Injury General description of damage or injury incurred so far as it is known at the time of presenting this claim:

If submitting PHOTOGRAPHS, PLEASE ATTACH TWO (2) SETS
What particular act on by the City, Agency, Authority, or their respective employees caused the damage or injury? (Include names of employees if known):

Amount claimed, including the estimated amount of any prospective damage or injury, insofar as may be known at the time of presentation of this claim, together with the basis of computation of the amount claimed (Attach estimates or invoices, if possible):
$
$
Names and addresses of known witnesses to damage or injury:

Signature of Claimant Date
489
Exhibit 3

CITY OF FONTANA

PUBLIC WORKS DEPARTMENT
Permit to Prune Street Trees
Date: _________________ *
I, _ do hereby request authorization of the City of Fontana to

prune ______ street tree(s) along __________________________________ in accordance with all City

specifications. Said work will begin on _____________ and will be completed by ____________ .

I further agree to bear all costs and liabilities connected with the approved pruning project; and that, any contractor used to complete this project is licensed by the City of Fontana to do approved work; and that, the approved work will be performed by a certified tree trimmer based on City Standards; and that, all work will be performed in a timely and workman like fashion.

Signature of Permit Recipient Date
Authorized Representative Signature Date
* PERMIT EXPIRES 60 CALENDAR DAYS FROM THE ABOVE DATE

490
Exhibit 4

CITY OF FONTANA

PUBLIC WORKS DEPARTMENT
Permit to Plant Street Trees
Date: *
I, do hereby request authorization of the City of

Fontana to plant ______ street tree(s) from within the public easement along the property at

_________________________ . In accordance with all City specifications, I will,

within 60 days of said request install the current, designated street tree:
( ______________________ ).

I further agree to bear all costs and liabilities connected with the approved planting project; and that, any contractor used to complete this project is licensed by the City of Fontana to do approved work.

Upon completion of the entire project, I shall relinquish the ownership and responsibility for said tree(s) to the City of Fontana.

Signature of Perm t Recipient Date
Authorized Representative Date
Print Name Title
* PERMIT EXPIRES 60 CALENDAR DAYS FROM THE ABOVE DATE

491
Exhibit 5

City of Fontana
Tree Pruning Standards

General Procedures
Each cut should be made carefully, at the correct location, leaving a smooth surface with no jagged edges or torn bark. The correct anatomical location is just beyond the branch collar.

Jump Cutting
Large or heavy limbs should be removed using three cuts.

1. The first undercuts the limb one or two feet out
from parent branch or trunk. A properly made
undercut will eliminate the chance of the branch
"peeling" or tearing bark as it is removed.

2. The second cut is the top cut which is made
slightly further out on the limb than the
undercut. This allows the limb to drop
smoothly when the weight is released.

3. The third cut removes the stub back to just
outs de the branch collar.

Drop Crotching Co-dominant or Dead Leaders
Removing a co-dominant or dead leader is best accomplished by cutting the limb back to a lateral that is at least 1/3 the size of the parent limb.

Pruning at Narrow Attachments
To prevent damage to the parent limb when removing a branch with a narrow attachment, the final cut should be made from the bottom of the branch up.

492
Exhibit 6

1. Tree spacing 35' minimum to 50' maximum.

2. Plant 50' minimum from the BCR on the approach to an intersection and 15' from the ECR on the exit side.

3. Plant 10' minimum from edge of approach.

4. Plant 1 0' minimum from utility and sewer lines.

5. Plant 20' minimum from street light standards and power poles.

6. Plant 10' minimum from fire hydrants.

7. Plant 5' from house walks and utility meters.

8. 3'x3' tree well standard unless otherwise specified.

9. Center tree between sidewalk and curb.

10. Where there is no sidewalk, plant tree 8" behind curb.

11. Where public right-of-way is available and sidewalk is adjacent to curb, plant tree 3' behind back of sidewalk.

City of Fontana
Tree Planting Detail
493
Exhibit 7

City of Fontana
Selective Root Pruning Standards

PLAN VIEW

SECTION VIEW
NOTES:

1. Roots shall be cut at the nearest node to encourage roots that grow away from the sidewalk.

2. Roots must be cleanly cut 4" away from the new sidewalk edge.

3. Backfill excavated areas with soil.
494
Exhibit 8
NOTES:

1. Roots are to be shaved down to enable at least 2" clearance between sidewalk and root. Backfill with soil.

2. Root barrier shall not be installed on shaved roots.

City of Fontana
Root Shaving Standards
495

City of Fontana Street Tree Palette

Botanical Name Common Name Pkwy Size Ht/Sprd Type Water Use Comments Arbutus 'Marina' Marina Medrone 3-4' 3 x 3' cutout 20/35 evergreen Medium Strong branches, Low root intrusion, wet fruit Cercis canadensis Eastern Redbud 3-4' 3 x 3' cutout 20/35 deciduous Medium Great tree for small locations, dry fruit Cercis occidentalis Western Redbud 3-4' 3 x 3' cutout 25/20 deciduous Medium Tolerates drought & clay soil Chilopsis lineares Desert Willow 3-4' 3 x 3' cutout 25/20 deciduous Low Drought tolerant, low root intrusion Chitalpa tashkentensis Chitalpa 3-4' 3 x 3' cutout 25/25 deciduous Low Drought tolerant, low root intrusion Eriobotrya deflexa Bronze Loquat 3-4' 3 x 3' cutout 25/25 evergreen Medium Drought tolerant, low root intrusion Fraxinus dipelata California Ash 3-4' 3 x 3' cutout 25/25 deciduous Low Great as a specimen tree, low root intrusion Lagerstromia indica Crape Myrtle 3-4' 3 x 3' cutout 20/20 deciduous Medium Low root intrusion, L. indica x L. fauriei are faster growing Melaleuca linarifolia Flax leaf Paperback 3-4' 3 x 3' cutout 20/40 evergreen Low Fire resistant, can be use as a wind breaker specimen Magnolia grandiflora 'Russett' Russet Magnolia 3-4' 5 x 5' cutout 25/35 evergreen Medium Flowers, Dry Fruit and Leaves. Low root intrusion Magnolia grandiflora 'St Mary' S. Magnolia 'St Mary' 3-4' 5 x 5' cutout 25/25 evergreen Medium Flowers, Dry Fruit and Leaves. Low root intrusion Magnolia g. 'Majestic Beauty' S. Magnolia 'Majestic Beauty' 3-4' 5 x 5' cutout 25/20 evergreen Medium Flowers, Dry Fruit and Leaves. Low root intrusion Olea europaea Olive Tree 3-4' 5 x 5' cutout 30/30 evergreen Low Fruit can be a nuisance. Fruitless varieties preferred Tabebuia chrusotricha Yellow Trumpet Tree 3-4' 3 x 3' cutout 25/40 deciduous Medium Most accessible in 24" box, blooms heaviest April - May Tabebuia impetiginosus Pink Trumpet Tree 3-4' 3 x 3' cutout 25/40 deciduous Medium Shape can seem off when young, very large capsule Washingtonia filifera California Fan Palm 3-4' 3 x 3' cutout 50' Palm Low For Parks, set back landscape and commercial developments only Washingtonia robusta Mexican Fan Palm 3-4' 3 x 3' cutout 90' Palm Low For Parks, set back landscape and commercial developments only Brachychiton populneus Bottle Tree 5-6' 5 x 5' cutout 50/40 evergreen Medium Withstands heat, sun, dust & drought Callistemon viminalis Weeping Bottle Brush 5-6' 5 x 5' cutout 40/20 evergreen Low Tolerant of heat, cold& most adverse soil conditions Calodendrum capense Cape Chestnut 5-6' 5 x 5' cutout 40/40 deci/semi Medium Prefers moderately light clay or loam soil Cassia leptophylla Gold Medallion Tree 5-6' 5 x 5' cutout 25/20 deci/semi Medium Zones 21-24, most shapely & graceful of the Cassias Cercidium praecox Sonoran Palo Verde 5-6' 5 x 5' cutout 30/20 deciduous Low Full sun, tolerates aridity, low root intrusion Cinnamomum camphora Camphor Tree 5-6' 5 x 5' cutout 50/60 evergreen Medium Tree can become very large, Dry fruit and leaves Geijera parvifolia Australian Willow 5-6' 5 x 5' cutout 40/25 evergreen Medium Tolerates a wide range of soils, low root intrusion Ginkgo biloba 'Autumn Gold' Maidenhair Tree 5-6' 5 x 5' cutout 35/45 deciduous Medium This cultivar is the most available Laurus nobilis Sweet Bay 5-6' 5 x 5' cutout 40/30 evergreen Low Pest problems are psyllids & scale, Dry fruit Jacaranda mimosifolia Jacaranda Tree 5-6' 5 x 5' cutout 40/50 deci/semi Medium Flowers, Dry Fruit and Leaves Koelreuteria bipinnata Chinese Flame Tree 5-6' 5 x 5' cutout 40/40 deciduous Medium Grows best in well-drained soil Koelreuteria paniculata Goldenrain Tree 5-6' 5 x 5' cutout 35/25 deciduous Medium Takes cold. Heat, Drought, Wind & Alkaline soil Pistachia chinensis Chinese Pistache 5-6' 5 x 5' cutout 40/40 deciduous Low Relatively drought tolerant, low root intrusion Pyrus c. 'Aristocat' Aristocrat Pear 5-6' 5 x 5' cutout 30/30 deciduous Medium Fairly resistant to firelight. Dry Fruit & Leaves Pyrusc. "Redspire' Redspire Pear 5-6' 5 x 5' cutout 30/25 deciduous Medium Red/Orange fall color 496 Pyrus betulifolia Dancer Pear 5-6' 5 x 5' cutout 30/20 deciduous Medium More resistant to firelight. Has smaller leaf Pinus halapensis Aleppo Pine 8-10' 8 x 8' cutout 30/60 evergreen Low Drought Tolerant. Not to be planted closer than 15' from residential wall Pinus canariensis Canary Island Pine 8-10' 8 x 8' cutout 80/35 evergreen Low Drought Tolerant. Not to be planted closer than 15' from residential wall Platanus racemosa Western Sycamore 8-10' 8 x 8' cutout 30/80 deciduous Medium Dry fruit, Leaves, Twigs and Bark.

Quercus ilex Holly Oak 8-10' 8 x 8' cutout 50/50 evergreen Low Will tolerate drought, air pollution, alkaline soil & wind Quercus lobata Valley Oak 8-10' 8 x 8' cutout 50/70 deciduous Medium Native, large tree, great in the right placement Quercus agrifolia Coast Live Oak 8-10' 8 x 8' cutout 70/80 evergreen Low Native to coastal ranges; susceptible to oak moth larvae

497
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3453 Agenda Date: 12/10/2024
Agenda #: W. Category: Consent Calendar
FROM:

Human Resources
SUBJECT:

Implementation of Classification and Compensation Study and Approval of Tentative Agreements for the Teamsters Local 1932, Public Works and City Hall Bargaining Units.

RECOMMENDATION:

Adopt Resolution No. 2024-130, a resolution of the City Council of the City of Fontana, California, ratifying the Tentative Agreement between the Teamsters Local 1932, Public Works and City Hall Bargaining Units and approving the updated corresponding salary tables.

COUNCIL GOALS:
· Operate in a businesslike manner by ensuring that the public debate is based on accurate information.
· Practice sound fiscal management by producing timely and accurate financial information. · Practice sound fiscal management by living within our means while investing in the future. · Create and maintain a dynamic team by promoting stability and predictability by providing consistent policy direction.
· Create and maintain a dynamic team by communicating Goals and Objectives to all commissions and employees.
· Create and maintain a dynamic team by emphasizing staff development.

DISCUSSION:

On February 14, 2023, the City Council awarded an agreement to Public Sector Personnel Consultants (PSPC) to assess the competitiveness of the City’s current classification and compensation structure for all positions city-wide. A Classification and Compensation Study was conducted, and the findings were presented to the City Council during Closed Session on May 14, 2024. At that time, the City Council directed staff to develop a pathway toward competitive pay as part of their goal to address employee recruitment, retention, and stability.

Coinciding with these efforts, the Memoranda of Understanding between the City and the Teamsters Local 1932 Public Works Unit (“Public Works Unit”) and the Teamsters Local 1932, City Hall Unit (“City Hall Unit”) expired as of June 30, 2024. The City and both bargaining units have been negotiating in good faith since May 2024, with the implementation plan outlined below incorporated into these negotiations.

Implementation Plan
Although the study found that the City was, on average, five percent (5%) ahead of market based on City of Fontana Printed on 12/5/2024Page 1 of 3
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File #: 21-3453 Agenda Date: 12/10/2024
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Although the study found that the City was, on average, five percent (5%) ahead of market based on total compensation, many of our current salary ranges are below the market average for similar roles in comparable cities, which directly impacts recruitment and employee retention. Specifically, PSPC identified classifications within the Public Works and City Hall Units as being an average of 1.8% and

3.7% below market, respectively. Aligning salary ranges with the market average and negotiated wage adjustments moving forward are essential for maintaining a competitive and fair compensation structure. The implementation plan outlined below will address current pay disparities to be fair and equitable, support employee satisfaction, and enhance our ability to attract and retain top talent.

Effective January 11, 2025, salary ranges for the Public Works and City Hall Unit classifications identified as below market will be adjusted to the rate established in the Classification and Compensation Study, and the negotiated wage increase applied. On average, classifications within the Public Works Unit are being adjusted by 2.39%, and classifications within the City Hall Unit are being adjusted by 3.9%. For the classifications identified as below market, incumbents will be moved to the next highest step within the new range, potentially unlocking future earning potential for the incumbent within their updated classification’s salary range.

Tentative Agreement
In addition to implementation of the Classification and Compensation Study, the City has concluded negotiations with the Public Works and City Hall Units. City staff and representatives of the Public Works and City Hall Units have agreed on terms and conditions of employment outlined in the respective tentative agreement summary documents. Staff is recommending the formal ratification of each tentative agreement, with the formal Memoranda of Understanding being presented at a later date.

The tentative agreements reached with the Public Works and City Hall Units span a three (3) year period, ending June 30, 2027. Highlights include:
· A 4.0% base salary increase effective January 11, 2025. · On July 12, 2025, a 4.0% base salary increase, with a 1.0% wage deduction to a Retiree Medical Trust, resulting in a net salary increase of 3.0% in Year 2. · On July 11, 2026, a 3.0% base salary increase, with an increased 0.5% wage deduction to a Retiree Medical Trust, resulting in a net salary increase of 2.5% in Year 3.

The respective salary tables for the Public Works and City Hall Units are also being presented.

Additionally, a one-time payment of $2,000 will be provided to all Public Works and City Hall Unit employees as of December 10, 2024.

FISCAL IMPACT:

The total estimated budgetary financial impact associated with the approval of these contracts is $3,096,870 (Public Works - $887,917 and City Hall - $2,208,953) through fiscal year 2026-27 and are detailed as follows:

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File #: 21-3453 Agenda Date: 12/10/2024
Agenda #: W. Category: Consent Calendar
MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2024 -

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

CALIFORNIA, RATIFYING THE TENTATIVE AGREEMENT BETWEEN
THE TEAMSTERS LOCAL 1932, PUBLIC WORKS AND CITY HALL

UNITS, AND APPROVING THE UPDATED CORRESPONDING SALARY
TABLES.

WHEREAS, the City Council of the City of Fontana has adopted Memoranda of Understanding (MOU) which incorporate the terms, working conditions, and compensation levels for the City’s represented bargaining groups; and

WHEREAS, a MOU has expired, and the City and this labor group have agreed on new terms outlined in the tentative agreement; and

WHEREAS, the City Council of the City of Fontana has adopted the Personnel Rules and Regulations which incorporate the City’s Classifica tion and Compensation Plan; and

WHEREAS, the Classification and Compensation Plan is not a static plan and requires revisions to reflect organizational changes and needs; and

WHEREAS, the City Council directed staff to develop a pathway towards competitive pay.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, to ratify the Tentative Agreements between the City of Fontana and the Teamsters Local 1932, Public Works (Exhibit A) and City Hall (Exhibit B) Unit s and approve the updated corresponding salary tables (Exhibit C).

EFFECTIVE DATE (SALARY TABLES): January 11, 2025

APPROVED AND ADOPTED this 10
th day of December, 2024.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

I, Germaine McClellan Key, City Clerk of the City of Fontana, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council of said City at a regular meeting thereof, held on the 10
th day of December 2024, by the following vote to wit:
501
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AYES:

NOES:

ABSENT:

ABSTAIN:

__________________________
City Clerk of the City of Fontana

___________________________
Mayor of the City of Fontana

ATTEST:

___________________________
City Clerk
502

City Council Meeting
December 10, 2024
Exhibit A

2024 Negotiations Tentative Agreement Summary
between the
City & Teamsters Local 1932, Public Works Unit

Wages:
 Year 1: 4.0%
 Year 2: Total benefit: 4.0%, with 1.0% base salary going towards Retiree Medical Trust.  Year 3 Total benefit: 3.0%, with 0.5% base salary going towards Retiree Medical Trust.

Retiree Medical Trust (RMT)
 The City agrees to work collaboratively with the Union to establish a RMT for all employees.  Official contract language to be determined once terms are agreed upon by the City and Union.  Proposed Terms:
o The City will contribute, on behalf of each employee, an amount equal to one percent (1.0%) of each employees’ base biweekly salary to the RMT. These deposits will commence on July 12, 2025. o Effective July 11, 2026, the City will contribute an amount equal to an additional one-half percent (0.5%) of each employees’ base biweekly salary to the RMT. This will bring the total contribution to 1.5%.

One-Time Payment:
 $2,000/employee in lieu of retro COLAs

Classification & Compensation Study
 Bring the salary range for each classification to market average, as presented on 10/07/2024 o This represents an average salary range increase of 2.39%, which is outside of the wage proposal listed above.

Health Insurance
 Cafeteria allotment will be tiered based on medical plan enrollment.  The City will contribute an additional $100/tier (excluding cash-back option) within the cafeteria plan.

Holidays
 Add one (1) additional floating holiday, valued at the rate of the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)  Change the value of Day After Thanksgiving holiday to be the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)  ALL floating holidays drop in during the first full pay period following July 1st of each year (for 2024, upon contract ratification)

Leave Cash Out
 Add pre-election language in accordance with 26 CFR 1.451-2  Increase the leave time that can be cashed out to 120 hours per calendar year  Remove language that allows the City Manager to increase the maximum amount of leave cash out.

Leave Accrual Limits
 Cap personal leave accruals on a pay period by pay period basis, in exchange for increasing the amount of leave time that can be cashed out on an annual basis.
503
2024 Negotiations Tentative Agreement Summary
between the
City & Teamsters Local 1932, City Hall Unit

Wages:
 Year 1: 4.0%
 Year 2: Total benefit: 4.0%, with 1.0% base salary going towards Retiree Medical Trust.  Year 3 Total benefit: 3.0%, with 0.5% base salary going towards Retiree Medical Trust.

Retiree Medical Trust (RMT)
 The City agrees to work collaboratively with the Union to establish a RMT for all employees.  Official contract language to be determined once terms are agreed upon by the City and Union.  Proposed Terms:
o The City will contribute, on behalf of each employee, an amount equal to one percent (1.0%) of each employees’ base biweekly salary to the RMT. These deposits will commence on July 12, 2025.
o Effective July 11, 2026, the City will contribute an amount equal to an additional one-half percent (0.5%) of each employees’ base biweekly salary to the RMT. This will bring the total contribution to 1.5%.

One-Time Payment:
 $2,000/employee in lieu of retro COLAs

Classification & Compensation Study
 Bring the salary range for each classification to market average, as presented on 11/05/2024 o This represents an average salary range increase of 3.9%, which is outside of the wage proposal listed above.

Holidays
 Add one (1) additional floating holiday, valued at the rate of the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)
 Change the value of Day After Thanksgiving holiday to be the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)
 ALL floating holidays drop in during the first full pay period following July 1st of each year (for 2024, upon contract ratification)

Leave Cash Out
 Add pre-election language in accordance with 26 CFR 1.451-2  Increase the leave time that can be cashed out to 120 hours per calendar year  Remove language that allows the City Manager to increase the maximum amount of leave cash out.

504
2024 Negotiations Tentative Agreement Summary
between the
City & Teamsters Local 1932, City Hall Unit

City Council Meeting
December 10, 2024
Exhibit B
Leave Accrual Limits
 Cap personal leave accruals on a pay period by pay period basis, in exchange for increasing the amount of leave time that can be cashed out on an annual basis.

Standby Duty
 Add the Sr. Building Inspector classification to standby duty list and remove classifications that are no longer needed for standby pay.
 Increase standby pay by $50 per week for all employees who are assigned standby duty.

505

CITY OF FONTANA

PUBLIC WORKS BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL/PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$25.32 $26.59 $27.92 $29.32 $30.79 Hourly
$4,388.80 $4,608.94 $4,839.47 $5,082.14 $5,336.94 Monthly $52,665.60 $55,307.20 $58,073.60 $60,985.60 $64,043.20 Annual $28.80 $30.24 $31.76 $33.35 $35.02
$4,992.00 $5,241.60 $5,505.07 $5,780.67 $6,070.14
$59,904.00 $62,899.20 $66,060.80 $69,368.00 $72,841.60
$31.65 $33.24 $34.91 $36.66 $38.50
$5,486.00 $5,761.60 $6,051.07 $6,354.40 $6,673.34
$65,832.00 $69,139.20 $72,612.80 $76,252.80 $80,080.00
$30.40 $31.92 $33.52 $35.20 $36.96
$5,269.34 $5,532.80 $5,810.14 $6,101.34 $6,406.40
$63,232.00 $66,393.60 $69,721.60 $73,216.00 $76,876.80
$32.07 $33.68 $35.37 $37.14 $39.00
$5,558.80 $5,837.87 $6,130.80 $6,437.60 $6,760.00
$66,705.60 $70,054.40 $73,569.60 $77,251.20 $81,120.00
$34.79 $36.53 $38.36 $40.28 $42.30
$6,030.27 $6,331.87 $6,649.07 $6,981.87 $7,332.00
$72,363.20 $75,982.40 $79,788.80 $83,782.40 $87,984.00
$22.48 $23.61 $24.80 $26.04 $27.35
$3,896.54 $4,092.40 $4,298.67 $4,513.60 $4,740.67
$46,758.40 $49,108.80 $51,584.00 $54,163.20 $56,888.00
$31.84 $33.44 $35.12 $36.88 $38.73
$5,518.94 $5,796.27 $6,087.47 $6,392.54 $6,713.20
$66,227.20 $69,555.20 $73,049.60 $76,710.40 $80,558.40
$23.16 $24.32 $25.54 $26.82 $28.17
$4,014.40 $4,215.47 $4,426.94 $4,648.80 $4,882.80
$48,172.80 $50,585.60 $53,123.20 $55,785.60 $58,593.60
$24.98 $26.23 $27.55 $28.93 $30.38
$4,329.87 $4,546.54 $4,775.34 $5,014.54 $5,265.87
$51,958.40 $54,558.40 $57,304.00 $60,174.40 $63,190.40
$27.44 $28.82 $30.27 $31.79 $33.38
$4,756.27 $4,995.47 $5,246.80 $5,510.27 $5,785.87
$57,075.20 $59,945.60 $62,961.60 $66,123.20 $69,430.40
$32.01 $33.62 $35.31 $37.08 $38.94
$5,548.40 $5,827.47 $6,120.40 $6,427.20 $6,749.60
$66,580.80 $69,929.60 $73,444.80 $77,126.40 $80,995.20
PW11Mechanic Assistant
Aquatics Maintenance
Worker PW01
Lead Equipment
Mechanic PW02
Equipment Mechanic II PW04
Equipment Mechanic I PW03
Pump Maintenance
Technician I PW17
Heavy Equipment
Operator PW07
Irrigation Technician PW16
Public Works
Maintenance Worker I PW10
PW12Public Works
Maintenance Worker II
Public Works Crew
Leader PW13
Pump Maintenance
Technician II PW15

Exhibit C 506

CITY OF FONTANA

PUBLIC WORKS BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL/PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$27.63 $29.02 $30.48 $32.01 $33.62 Hourly
$4,789.20 $5,030.14 $5,283.20 $5,548.40 $5,827.47 Monthly $57,470.40 $60,361.60 $63,398.40 $66,580.80 $69,929.60 Annual $28.98 $30.43 $31.96 $33.56 $35.24
$5,023.20 $5,274.54 $5,539.74 $5,817.07 $6,108.27
$60,278.40 $63,294.40 $66,476.80 $69,804.80 $73,299.20
$33.05 $34.71 $36.45 $38.28 $40.20
$5,728.67 $6,016.40 $6,318.00 $6,635.20 $6,968.00
$68,744.00 $72,196.80 $75,816.00 $79,622.40 $83,616.00
Senior Public Works
Maintenance Worker PW18
Welder/Fabricator PW08
Tree Trimmer Specialist PW19

Exhibit C 507

CITY OF FONTANA

CITY HALL BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$21.92 $23.02 $24.18 $25.39 $26.66 Hourly
$3,799.47 $3,990.14 $4,191.20 $4,400.94 $4,621.07 Monthly $45,593.60 $47,881.60 $50,294.40 $52,811.20 $55,452.80 Annual $23.71 $24.90 $26.15 $27.46 $28.84
$4,109.74 $4,316.00 $4,532.67 $4,759.74 $4,998.94
$49,316.80 $51,792.00 $54,392.00 $57,116.80 $59,987.20
$34.86 $36.61 $38.45 $40.38 $42.40
$6,042.40 $6,345.74 $6,664.67 $6,999.20 $7,349.34
$72,508.80 $76,148.80 $79,976.00 $83,990.40 $88,192.00
$38.73 $40.67 $42.71 $44.85 $47.10
$6,713.20 $7,049.47 $7,403.07 $7,774.00 $8,164.00
$80,558.40 $84,593.60 $88,836.80 $93,288.00 $97,968.00
$31.81 $33.41 $35.09 $36.85 $38.70
$5,513.74 $5,791.07 $6,082.27 $6,387.34 $6,708.00
$66,164.80 $69,492.80 $72,987.20 $76,648.00 $80,496.00
$36.58 $38.41 $40.34 $42.36 $44.48
$6,340.54 $6,657.74 $6,992.27 $7,342.40 $7,709.87
$76,086.40 $79,892.80 $83,907.20 $88,108.80 $92,518.40
$40.51 $42.54 $44.67 $46.91 $49.26
$7,021.74 $7,373.60 $7,742.80 $8,131.07 $8,538.40
$84,260.80 $88,483.20 $92,913.60 $97,572.80 $102,460.80 $24.21 $25.43 $26.71 $28.05 $29.46
$4,196.40 $4,407.87 $4,629.74 $4,862.00 $5,106.40
$50,356.80 $52,894.40 $55,556.80 $58,344.00 $61,276.80
$19.29 $20.26 $21.28 $22.35 $23.47
$3,343.60 $3,511.74 $3,688.54 $3,874.00 $4,068.14
$40,123.20 $42,140.80 $44,262.40 $46,488.00 $48,817.60
$21.29 $22.36 $23.48 $24.66 $25.90
$3,690.27 $3,875.74 $4,069.87 $4,274.40 $4,489.34
$44,283.20 $46,508.80 $48,838.40 $51,292.80 $53,872.00
$26.90 $28.25 $29.67 $31.16 $32.72
$4,662.67 $4,896.67 $5,142.80 $5,401.07 $5,671.47
$55,952.00 $58,760.00 $61,713.60 $64,812.80 $68,057.60
$29.31 $30.78 $32.32 $33.94 $35.64
$5,080.40 $5,335.20 $5,602.14 $5,882.94 $6,177.60
$60,964.80 $64,022.40 $67,225.60 $70,595.20 $74,131.20
$43.19 $45.35 $47.62 $50.01 $52.52
$7,486.27 $7,860.67 $8,254.14 $8,668.40 $9,103.47
$89,835.20 $94,328.00 $99,049.60 $104,020.80 $109,241.60 Administrative Analyst I CH07
Administrative Analyst II CH08
Account Clerk I CH01
Account Clerk II CH02
Accountant I CH03
Accountant II CH04
Accounting Technician CH05
Administrative Clerk I CH10
Administrative Clerk II CH11
Administrative
Technician CH12
Aquatics Coordinator CH13
Assistant Engineer CH14
Administrative Assistant CH64

Exhibit C 508

CITY OF FONTANA

CITY HALL BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$36.50 $38.33 $40.25 $42.27 $44.39 Hourly
$6,326.67 $6,643.87 $6,976.67 $7,326.80 $7,694.27 Monthly $75,920.00 $79,726.40 $83,720.00 $87,921.60 $92,331.20 Annual $49.03 $51.49 $54.07 $56.78 $59.62
$8,498.54 $8,924.94 $9,372.14 $9,841.87 $10,334.14
$101,982.40 $107,099.20 $112,465.60 $118,102.40 $124,009.60 $40.63 $42.67 $44.81 $47.06 $49.42
$7,042.54 $7,396.14 $7,767.07 $8,157.07 $8,566.14
$84,510.40 $88,753.60 $93,204.80 $97,884.80 $102,793.60 $30.93 $32.48 $34.11 $35.82 $37.62
$5,361.20 $5,629.87 $5,912.40 $6,208.80 $6,520.80
$64,334.40 $67,558.40 $70,948.80 $74,505.60 $78,249.60
$34.54 $36.27 $38.09 $40.00 $42.00
$5,986.94 $6,286.80 $6,602.27 $6,933.34 $7,280.00
$71,843.20 $75,441.60 $79,227.20 $83,200.00 $87,360.00
$42.45 $44.58 $46.81 $49.16 $51.62
$7,358.00 $7,727.20 $8,113.74 $8,521.07 $8,947.47
$88,296.00 $92,726.40 $97,364.80 $102,252.80 $107,369.60 $31.88 $33.48 $35.16 $36.92 $38.77
$5,525.87 $5,803.20 $6,094.40 $6,399.47 $6,720.14
$66,310.40 $69,638.40 $73,132.80 $76,793.60 $80,641.60
$35.06 $36.82 $38.67 $40.61 $42.65
$6,077.07 $6,382.14 $6,702.80 $7,039.07 $7,392.67
$72,924.80 $76,585.60 $80,433.60 $84,468.80 $88,712.00
$26.52 $27.85 $29.25 $30.72 $32.26
$4,596.80 $4,827.34 $5,070.00 $5,324.80 $5,591.74
$55,161.60 $57,928.00 $60,840.00 $63,897.60 $67,100.80
$29.97 $31.47 $33.05 $34.71 $36.45
$5,194.80 $5,454.80 $5,728.67 $6,016.40 $6,318.00
$62,337.60 $65,457.60 $68,744.00 $72,196.80 $75,816.00
$17.16 $18.02 $18.93 $19.88 $20.88
$2,974.40 $3,123.47 $3,281.20 $3,445.87 $3,619.20
$35,692.80 $37,481.60 $39,374.40 $41,350.40 $43,430.40
$34.54 $36.27 $38.09 $40.00 $42.00
$5,986.94 $6,286.80 $6,602.27 $6,933.34 $7,280.00
$71,843.20 $75,441.60 $79,227.20 $83,200.00 $87,360.00
$29.31 $30.78 $32.32 $33.94 $35.64
$5,080.40 $5,335.20 $5,602.14 $5,882.94 $6,177.60
$60,964.80 $64,022.40 $67,225.60 $70,595.20 $74,131.20
Building Inspector II CH20
Audio Visual (AV)
Production Specialist CH79
Assistant Planner CH16
Associate Engineer CH17
Associate Planner CH18
Building Inspector I CH19
Audio Visual (AV)
Production Supervisor CH59
Code Compliance
Inspector CH29
Community Services
Coordinator CH30
Buyer II CH78
Cashier CH26
Buyer I CH23
Budget Analyst CH80

Exhibit C 509

CITY OF FONTANA

CITY HALL BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$32.92 $34.57 $36.30 $38.12 $40.03 Hourly
$5,706.14 $5,992.14 $6,292.00 $6,607.47 $6,938.54 Monthly $68,473.60 $71,905.60 $75,504.00 $79,289.60 $83,262.40 Annual $39.58 $41.56 $43.64 $45.83 $48.13
$6,860.54 $7,203.74 $7,564.27 $7,943.87 $8,342.54
$82,326.40 $86,444.80 $90,771.20 $95,326.40 $100,110.40 $31.68 $33.27 $34.94 $36.69 $38.53
$5,491.20 $5,766.80 $6,056.27 $6,359.60 $6,678.54
$65,894.40 $69,201.60 $72,675.20 $76,315.20 $80,142.40
$34.54 $36.27 $38.09 $40.00 $42.00
$5,986.94 $6,286.80 $6,602.27 $6,933.34 $7,280.00
$71,843.20 $75,441.60 $79,227.20 $83,200.00 $87,360.00
$24.96 $26.21 $27.53 $28.91 $30.36
$4,326.40 $4,543.07 $4,771.87 $5,011.07 $5,262.40
$51,916.80 $54,516.80 $57,262.40 $60,132.80 $63,148.80
$35.84 $37.64 $39.53 $41.51 $43.59
$6,212.27 $6,524.27 $6,851.87 $7,195.07 $7,555.60
$74,547.20 $78,291.20 $82,222.40 $86,340.80 $90,667.20
$30.42 $31.95 $33.55 $35.23 $37.00
$5,272.80 $5,538.00 $5,815.34 $6,106.54 $6,413.34
$63,273.60 $66,456.00 $69,784.00 $73,278.40 $76,960.00
$46.08 $48.39 $50.81 $53.36 $56.03
$7,987.20 $8,387.60 $8,807.07 $9,249.07 $9,711.87
$95,846.40 $100,651.20 $105,684.80 $110,988.80 $116,542.40 $33.01 $34.67 $36.41 $38.24 $40.16
$5,721.74 $6,009.47 $6,311.07 $6,628.27 $6,961.07
$68,660.80 $72,113.60 $75,732.80 $79,539.20 $83,532.80
$35.24 $37.01 $38.87 $40.82 $42.87
$6,108.27 $6,415.07 $6,737.47 $7,075.47 $7,430.80
$73,299.20 $76,980.80 $80,849.60 $84,905.60 $89,169.60
$31.76 $33.35 $35.02 $36.78 $38.62
$5,505.07 $5,780.67 $6,070.14 $6,375.20 $6,694.14
$66,060.80 $69,368.00 $72,841.60 $76,502.40 $80,329.60
$24.96 $26.21 $27.53 $28.91 $30.36
$4,326.40 $4,543.07 $4,771.87 $5,011.07 $5,262.40
$51,916.80 $54,516.80 $57,262.40 $60,132.80 $63,148.80
$28.43 $29.86 $31.36 $32.93 $34.58
$4,927.87 $5,175.74 $5,435.74 $5,707.87 $5,993.87
$59,134.40 $62,108.80 $65,228.80 $68,494.40 $71,926.40
Engineering
Technician I CH33
IT Systems Specialist CH77
Environmental
Compliance Technician CH81
Engineering
Technician II CH34
GIS Specialist CH40
Housing Technician CH41
GIS Analyst CH43
Grant Analyst CH61
Environmental
Compliance
Inspector I
CH37
Environmental
Compliance
Inspector II
CH67
IT Technician I CH45
IT Technician II CH46
IT Systems Technician CH71

Exhibit C 510

CITY OF FONTANA

CITY HALL BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$31.29 $32.86 $34.51 $36.24 $38.06 Hourly
$5,423.60 $5,695.74 $5,981.74 $6,281.60 $6,597.07 Monthly $65,083.20 $68,348.80 $71,780.80 $75,379.20 $79,164.80 Annual $34.54 $36.27 $38.09 $40.00 $42.00
$5,986.94 $6,286.80 $6,602.27 $6,933.34 $7,280.00
$71,843.20 $75,441.60 $79,227.20 $83,200.00 $87,360.00
$42.17 $44.28 $46.50 $48.83 $51.28
$7,309.47 $7,675.20 $8,060.00 $8,463.87 $8,888.54
$87,713.60 $92,102.40 $96,720.00 $101,566.40 $106,662.40 $30.73 $32.27 $33.89 $35.59 $37.37
$5,326.54 $5,593.47 $5,874.27 $6,168.94 $6,477.47
$63,918.40 $67,121.60 $70,491.20 $74,027.20 $77,729.60
$40.80 $42.84 $44.99 $47.24 $49.61
$7,072.00 $7,425.60 $7,798.27 $8,188.27 $8,599.07
$84,864.00 $89,107.20 $93,579.20 $98,259.20 $103,188.80 $27.33 $28.70 $30.14 $31.65 $33.24
$4,737.20 $4,974.67 $5,224.27 $5,486.00 $5,761.60
$56,846.40 $59,696.00 $62,691.20 $65,832.00 $69,139.20
$31.76 $33.35 $35.02 $36.78 $38.62
$5,505.07 $5,780.67 $6,070.14 $6,375.20 $6,694.14
$66,060.80 $69,368.00 $72,841.60 $76,502.40 $80,329.60
$34.54 $36.27 $38.09 $40.00 $42.00
$5,986.94 $6,286.80 $6,602.27 $6,933.34 $7,280.00
$71,843.20 $75,441.60 $79,227.20 $83,200.00 $87,360.00
$30.33 $31.85 $33.45 $35.13 $36.89
$5,257.20 $5,520.67 $5,798.00 $6,089.20 $6,394.27
$63,086.40 $66,248.00 $69,576.00 $73,070.40 $76,731.20
$38.34 $40.26 $42.28 $44.40 $46.62
$6,645.60 $6,978.40 $7,328.54 $7,696.00 $8,080.80
$79,747.20 $83,740.80 $87,942.40 $92,352.00 $96,969.60
$42.17 $44.28 $46.50 $48.83 $51.28
$7,309.47 $7,675.20 $8,060.00 $8,463.87 $8,888.54
$87,713.60 $92,102.40 $96,720.00 $101,566.40 $106,662.40 $42.38 $44.50 $46.73 $49.07 $51.53
$7,345.87 $7,713.34 $8,099.87 $8,505.47 $8,931.87
$88,150.40 $92,560.00 $97,198.40 $102,065.60 $107,182.40 $36.18 $37.99 $39.89 $41.89 $43.99
$6,271.20 $6,584.94 $6,914.27 $7,260.94 $7,624.94
$75,254.40 $79,019.20 $82,971.20 $87,131.20 $91,499.20
CH31Permit Technician I
Landscape
Technician I CH48
Landscape
Technician II CH49
Project Coordinator CH60
Permit Technician II CH21
Marketing Specialist II CH50
Marketing Specialist I CH51
Lead Traffic Signal
Maintenance Technician CH70
Plans Examiner II CH58
Public Works Inspector CH63
Planning Technician CH56
Planning Inspector CH55
Plans Examiner I CH57

Exhibit C 511

CITY OF FONTANA

CITY HALL BARGAINING UNIT

HOURLY/MONTHLY/ANNUAL PAY SCHEDULE
Effective 01/11/2025
TITLE RANGE STEP 1 STEP 2 STEP 3 STEP 4 STEP 5
$30.01 $31.52 $33.10 $34.76 $36.50 Hourly
$5,201.74 $5,463.47 $5,737.34 $6,025.07 $6,326.67 Monthly $62,420.80 $65,561.60 $68,848.00 $72,300.80 $75,920.00 Annual $40.17 $42.18 $44.29 $46.51 $48.84
$6,962.80 $7,311.20 $7,676.94 $8,061.74 $8,465.60
$83,553.60 $87,734.40 $92,123.20 $96,740.80 $101,587.20 $37.96 $39.86 $41.86 $43.96 $46.16
$6,579.74 $6,909.07 $7,255.74 $7,619.74 $8,001.07
$78,956.80 $82,908.80 $87,068.80 $91,436.80 $96,012.80
$37.96 $39.86 $41.86 $43.96 $46.16
$6,579.74 $6,909.07 $7,255.74 $7,619.74 $8,001.07
$78,956.80 $82,908.80 $87,068.80 $91,436.80 $96,012.80
$33.15 $34.81 $36.56 $38.39 $40.31
$5,746.00 $6,033.74 $6,337.07 $6,654.27 $6,987.07
$68,952.00 $72,404.80 $76,044.80 $79,851.20 $83,844.80
$46.89 $49.24 $51.71 $54.30 $57.02
$8,127.60 $8,534.94 $8,963.07 $9,412.00 $9,883.47
$97,531.20 $102,419.20 $107,556.80 $112,944.00 $118,601.60 $44.37 $46.59 $48.92 $51.37 $53.94
$7,690.80 $8,075.60 $8,479.47 $8,904.14 $9,349.60
$92,289.60 $96,907.20 $101,753.60 $106,849.60 $112,195.20 $39.58 $41.56 $43.64 $45.83 $48.13
$6,860.54 $7,203.74 $7,564.27 $7,943.87 $8,342.54
$82,326.40 $86,444.80 $90,771.20 $95,326.40 $100,110.40 $34.18 $35.89 $37.69 $39.58 $41.56
$5,924.54 $6,220.94 $6,532.94 $6,860.54 $7,203.74
$71,094.40 $74,651.20 $78,395.20 $82,326.40 $86,444.80
$37.61 $39.50 $41.48 $43.56 $45.74
$6,519.07 $6,846.67 $7,189.87 $7,550.40 $7,928.27
$78,228.80 $82,160.00 $86,278.40 $90,604.80 $95,139.20
Senior IT Technician CH44
Senior Administrative
Assistant CH09
Senior Plans Examiner CH68
Senior Building
Inspector CH65
Senior Environmental
Compliance Inspector CH36
Traffic Signal
Maintenance
Technician I
CH73
Traffic Signal
Maintenance
Technician II
CH75
Senior Code
Compliance Inspector CH66
Traffic Engineering
Technician CH74
Senior Public Works
Inspector CH69

Exhibit C 512
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3494 Agenda Date: 12/10/2024
Agenda #: X. Category: Consent Calendar
FROM:

Human Resources
SUBJECT:

Implementation of Classification and Compensation Study and Approval of Updated Terms of Employment for Employees of the Management/Confidential Group.

RECOMMENDATION:

Authorize the City Manager to award future one-time payments of up to $2,000 per employee for Management/Confidential and Executive employees.

COUNCIL GOALS:
· Operate in a businesslike manner by ensuring that the public debate is based on accurate information.
· Practice sound fiscal management by producing timely and accurate financial information. · Practice sound fiscal management by living within our means while investing in the future. · Create and maintain a dynamic team by promoting stability and predictability by providing consistent policy direction.
· Create and maintain a dynamic team by communicating Goals and Objectives to all commissions and employees.
· Create and maintain a dynamic team by emphasizing staff development.

DISCUSSION:

On February 14, 2023, the City Council awarded an agreement to Public Sector Personnel Consultants (PSPC) to assess the competitiveness of the City’s current classification and compensation structure for all positions city-wide. A Classification and Compensation Study was conducted, and the findings were presented to the City Council during Closed Session on May 14, 2024. At that time, the City Council directed staff to develop a pathway toward competitive pay as part of their goal to address employee recruitment, retention, and stability.

Coinciding with these efforts, the Confirmation of Understanding between the City and the Management/Confidential Group (“Management/Confidential”)expired as of June 30, 2024. The City Manager has been engaged in discussions with Management/Confidential since May 2024, with the implementation plan outlined below incorporated into these discussions.

Implementation Plan
Although the study found that the City was, on average, five percent (5%) ahead of market based on total compensation, many of our current salary ranges are below the market average for similar roles in comparable cities, which directly impacts recruitment and employee retention. Specifically, PSPC City of Fontana Printed on 12/5/2024Page 1 of 2
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in comparable cities, which directly impacts recruitment and employee retention. Specifically, PSPC identified classifications within Management/Confidential as being an average of 2.1% below market.

Aligning salary ranges with the market average and wage adjustments moving forward are essential for maintaining a competitive and fair compensation structure. The implementation plan outlined below will address current pay disparities to be fair and equitable, support employee satisfaction, and enhance our ability to attract and retain top talent.

Effective February 8, 2025, salary ranges for Management/Confidential classifications identified as below market will be adjusted to the rate established in the Classification and Compensation Study, and the wage adjustment applied. On average, classifications within Management/Confidential are being adjusted by 3.6%. For the classifications identified as below market, incumbents will be moved to the next highest step within the new range, potentially unlocking future earning potential for the incumbent within their updated classification’s salary range.

Management/Confidential Deal Points
In addition to implementation of the Classification and Compensation Study, the City has concluded discussions with Management/Confidential. City staff and Management/Confidential have agreed on updated terms and conditions of employment outlined below:
· One-time, $2,000 payment for each employee as of December 10, 2024. · On February 8, 2025, an additional 1.0% base salary increase (3.0% was applied as of July 13, 2024), resulting in a net base salary increase of 4.0% for Year 1 (FY 2024-2025). · On July 12, 2025, a 4.0% base salary increase.
· On July 11, 2026, a 3.0% base salary increase.
· Increase to Floating Holidays, including the value of the Day after Thanksgiving and one (1) additional Floating Holiday.

The respective salary tables will be presented at the January 28, 2025, City Council Meeting.

FISCAL IMPACT:

The total estimated budgetary financial impact associated with the approval of this item is $2,026,530 for the Management Confidential group through June 30, 2027, and one-time payments of $225,219 for Management Confidential employees and $26,377 for Executives.

MOTION:

Approve staff recommendation.

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2024 Updated Terms of Employment
Management/Confidential Group

Wages:
 Year 1: 4.0% base salary increase, effective February 8, 2025 o (3.0% was applied as of July 13, 2024)
 Year 2: 4.0% base salary increase, effective July 12, 2025.  Year 3: 3.0% base salary increase, effective July 11, 2026.

One-Time Payment:
 $2,000/employee

Classification & Compensation Study
 Bring the salary range for each classification to market average, as presented on 12/04/2024 o This represents an average salary range increase of 3.6%, which is outside of the wage proposal listed above.

Holidays
 Add one (1) additional floating holiday, valued at the rate of the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)
 Change the value of Day After Thanksgiving holiday to be the employee’s normal schedule (10 hrs, 9 hrs, or 8 hrs)
 ALL floating holidays drop in during the first full pay period following July 1st of each year (for 2024, upon contract ratification)

Leave Accrual Limits
 Cap personal leave accruals on a pay period by pay period basis. 515
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3443 Agenda Date: 12/10/2024
Agenda #: A. Category: Public Hearing
FROM:

Planning Department
SUBJECT:

Introduce an Ordinance of the City Council of the City of Fontana, California, Pursuant to an Exemption from the California Environmental Quality Act, Approving a Development Agreement with Catalyst- Fontana, LLC, concerning a retail cannabis business and direct staff to file a Notice of Exemption.

RECOMMENDATION:

Based on the information in the staff report and subject to the findings, conclusions, and resolution presented in the public hearing, staff recommends that the City Council read by title and waive further reading and introduce Ordinance No. 1960; and

1. Find, after review of the Development Agreement, that the project is EXEMPT from the California Environmental Quality Act (“CEQA”),pursuant to State CEQA Guidelines Section 15301 (Existing Facilities) and direct staff to file a Notice of Exemption; and

2. Read by title only and waive further reading of and introduce Ordinance No. 1960, an Ordinance of the City Council of the City of Fontana, California, Pursuant to an Exemption from the California Environmental Quality Act, Approving a Development Agreement with Catalyst - Fontana, LLC, concerning a retail cannabis business and Direct Staff to File a Notice of Exemption.

3. Approve an Operating Agreement with Catalyst - Fontana LLC, as required by FMC 33-21.

COUNCIL GOALS:
· To promote economic development by concentrating on job creation. · To promote economic development by pursuing business retention, expansion, and attraction. · To promote economic development by striving to constantly improve the city's competitiveness.

APPLICANT:

Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
LOCATION:
15911 Highland Avenue (APN: 0228-301-01)
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REQUEST:

A request that the City Council, pursuant to an exemption under CEQA, approve the Development Agreement with Catalyst - Fontana LLC, concerning a retail cannabis business, pending adoption of an Operating Agreement with Catalyst - Fontana LLC.

BACKGROUND INFORMATION:

Pursuant to state law, the City adopted regulations in Chapter 33 of the Fontana Municipal Code (“FMC”)to allow a maximum of three (3) cannabis retail establishments that would be permitted to operate within the city’s jurisdiction, one each in three designated areas (i.e. North, Central and South).

The City received an application from Catalyst - Fontana LLC, (the “Applicant”)on May 4, 2023, for a Retail Commercial Cannabis Business Activity Permit (“Permit”)for the North area of the City pursuant to FMC Chapter 33 for the rights and entitlements to develop and operate a commercial cannabis retail sales business at a project site located at APN: 0240-091-10. On April 24, 2023, the City issued a Cannabis Zoning Verification Letter that provided that the property located at APN:
0240-091-10 had a zoning designation of Commercial/Retail within the Fontana Promenade Specific Plan and that allowed consideration of a cannabis retailer use. The applicant’s application was evaluated and determined to be the second-ranked applicant in the North Area of the City and thus was not initially selected to receive a retail cannabis permit. On May 1, 2024, the top-ranked applicant for the North Area was informed by the City that its permit application process had been terminated by the City. Applicant was then notified by the City on October 17, 2024 that the City Manager was exercising his discretion under the City’sCannabis Application Procedures, and subject to the City Council’sultimate approval of a settlement agreement with Applicant, to (a) move forward with issuing a notice of selection to Applicant as the second-highest scoring applicant in the North Area, and (b) approve 15911 Highland Avenue (APN: 0228-301-01) as an alternate location for the Project, subject to Applicant providing proof of the right to use and occupy the premises on the Project site within 90 days of said notice of selection being issued. Therefore, October 17, 2024, is considered the date when the use was established. On October 21, 2024, the City received an application for a Development Agreement with Applicant (the “Project”)to establish timing parameters and to provide certain fees and other public benefits in conjunction with Applicant’s cannabis operations. On October 29, 2024, the City issued a Cannabis Zoning Verification Letter that provided that the property located at 15911 Highland Avenue (APN: 0228-301-01) had a zoning designation of General Commercial (C-2) and that allowed consideration of a cannabis retailer use.

The Planning Commission held a public hearing on November 19, 2024 and recommended that the City Council adopt the Development Agreement with Catalyst - Fontana LLC. The Planning Commission voted 4-0 (Vice Chair Sanchez absent) to adopt Resolution PC No. 2024-056, thereby forwarding a recommendation of approval to the City Council. Staff received a total of two (2) written communications (see Attachment No. 5) and four (4) verbal communications in opposition of the agreement. After closing the public hearing, the Planning Commission made a minor modification to the DA language in the operating agreement in Section 5.2 Community Benefits. The revised agreement stipulates that the approval of any new additional partners shall be subject to the sole discretion of the City.

In accordance with FMC 33-21, the Applicant is required to enter into a fully executed operating agreement with appropriate fiscal mitigation measures. The Operating Agreement and the City of Fontana Printed on 12/5/2024Page 2 of 5
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agreement with appropriate fiscal mitigation measures. The Operating Agreement and the Development Agreement are mutually dependent on each other. The Operating Agreement is attached as an exhibit to the Development Agreement.

The project site is located within the General Plan Land Use Designation General Commercial (C-G) and zoned with General Commercial (C-2).

PROJECT DESCRIPTION:

Development Agreement with Catalyst - Fontana LLC, which has a term of 3 years, with 2-year extension periods, will provide for timing parameters and community benefits in the form of the payment of a percentage of gross receipts, payment of retail fees to the City and benefits to the local residents of the City by supporting local nonprofit organizations and providing opportunities for local jobs and work.

ANALYSIS:

The Applicant, Catalyst - Fontana, LLC, is seeking issuance a Cannabis Operating Permit that allows for the right to operate a commercial cannabis business at the Project site. The Applicant is now, as required by City ordinance, requesting approval of this Development Agreement to establish timing parameters and community benefits associated with the business operations. Additionally, Applicant will make minor tenant improvements to the existing building and open a Commercial Cannabis Activity facility business on the Site consistent with State Cannabis Law, all other applicable California law, and the project approvals.

The City Council is asked to review and render an approval regarding this Development Agreement by reviewing for consistency with the objectives, policies, general land uses and programs specified in the general plan. The information, findings and conclusions provided in this staff report, the Project documents and upon the information presented in the public hearing will form the basis and reasons for the City Council entering into the Development Agreement with the Applicant.

The Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on the City. The provisions of the Development Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances.

The Applicant has demonstrated to City staff, by its application documentation, that it is qualified to operate a Commercial Cannabis business and has pledged in this Development Agreement that it will operate its business in accordance with state and local law and in a responsible manner to contribute positively to the community and the local economy.

The key terms of the Development Agreement are as follows:

1. Initial Term is three (3) years, and, at the sole discretion of the City, two (2) year extension periods may be granted.

2. Applicant shall pay to City retail and public benefit fees, a percentage of gross receipts of its commercial cannabis business.

3. City will grant a vested right and entitlement to Applicant to develop and operate the Project for City of Fontana Printed on 12/5/2024Page 3 of 5
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3. City will grant a vested right and entitlement to Applicant to develop and operate the Project for the Term of the Development Agreement, subject to all applicable laws, regulations, conditions and permits, including but not limited to, the terms of the Commercial Cannabis Regulatory Permit, the requirements of Chapter 33 of the Fontana Municipal Code governing cannabis businesses and activities, the Development Agreement and Operating Agreement.

4. City covenants to expeditiously process all applications for permits submitted by Applicant.

5. Applicant and City shall enter into an Operating Agreement with additional terms and conditions for the implementation, development, operation and maintenance of the Project, including but not limited to, strict oversight, measures and management of the commercial cannabis business to ensure safety and welfare of the residents of the City and Applicant shall use reasonable efforts and give priority to hiring local Fontana residents to fill open jobs and to engage qualified local contractors to perform work on the Project.

Public notice of its intention to adopt this Ordinance No. 1960 approving and executing the Development Agreement with the Applicant has been given and has conducted public hearings thereon pursuant to California Government Code section 65867 and Municipal Code Section 30-322.

A public hearing is not required for the Operating Agreement.

The key terms of the Operating Agreement are as follows:

1. Initial Term is three (3) years and, at the sole discretion of the City, two (2) year extension periods may be granted;

2. Purpose of Operating Agreement is to ensure positive community impacts from the operation of commercial cannabis business operations;

3. Reasonable efforts to hire qualified City of Fontana residents;

4. Valid City of Fontana business license requirement;

5. Operational requirements; and

6. Default and Termination for Cause provisions.

The terms and conditions of the Development Agreement have undergone extensive review by City staff and have been found to be fair, just, and reasonable. The pursuit of the Project will best serve the interests of its citizens and the public health, safety, and welfare by entering into this Development Agreement. By conducting this public hearing and the Planning Commission rendering a recommendation to the City Council, the required findings in Municipal Code Section 30-322 and pursuant to Section 4 of Fontana Resolution No. 85-217 will have been satisfied.

ENVIRONMENTAL:

The Development Agreement has been reviewed and found to be exempt from the California Environmental Quality Act (“CEQA”)per State CEQA Guidelines Section 15301, Existing Facilities, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building.

FISCAL IMPACT:

New revenue, in the form of special fees paid to the City, resulting from execution of this Development Agreement is currently projected to exceed $500,000 annually.

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MOTION:

Approve staff’s recommendation.

ATTACHMENTS:

Attachment No. 1 - Vicinity Map
Attachment No. 2 - Ordinance and Development Agreement
Attachment No. 3 - PC Package and Public Communication 11-19-2024 Attachment No. 4 - PC Minutes of 11-19-2024
Attachment No. 5 - Notice of Exemption
Attachment No. 6 - Public Hearing Notice
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ATTACHMENT NO. 1

VICINITY MAP
DATE: December 10, 2024

Case: Master Case No. 24-0076
Development Agreement No. 24-006

NORTH

CITY OF FONTANA PLANNING DEPARTMENT

CIT
Catawba Avenue
South Highland Avenue
Project Site
Highland Avenue
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1 ORDINANCE NO. 1960

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

FONTANA, CALIFORNIA, PURSUANT TO AN EXEMPTION

FROM THE CALIFORNIA ENVIRONMENTAL QUALITY

ACT, APPROVING A DEVELOPMENT AGREEMENT WITH

CATALYST - FONTANA, LLC, FOR A RETAIL CANNABIS

BUSINESS, AND DIRECT ING STAFF TO FILE A NOTICE

OF EXEMPTION

WHEREAS, California Government Code Sections 65864 et seq. (“Development Agreement Statutes”) and Section 30-322 of the City’s Development Code authorizes the City Council of the City of Fontana (“City Council”) to enter into a development agreement with those having a legal or equitable interest in real property in order to establish certain development rights in such property; and to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within its jurisdiction; and

WHEREAS, the City of Fonta na Planning Commission (“Planning Commission”) has found that development agreements will strengthen the public planning process, encourage private participation in comprehensive planning by providing a greater degree of certainty in that process, reduce the economic costs of development, allow for the orderly planning of public improvements and services, allocate costs to achieve maximum utilization of public and private resources in the development process, and ensure that appropriate measures to enhance and protect the environment are achieved; and

WHEREAS, pursuant to Section 30 -322 of the City’s Development Code and Section 4 of City Council Resolution No. 85-217, the Planning Commission shall conduct a public hearing concerning any proposed developm ent agreement in accordance with Government Code Section 65867 and shall, by resolution, render a recommendation to the City Council concerning the proposed development agreement, including the reasons for the recommendation and the relationship of the proposed development agreement to applicable general and specific plans and zoning requirements; and

WHEREAS, o n July 26, 2022, in accordance with state law, the City Council adopted Ordinance No. 1899 adding Chapter 33 to the Fontana Municipal Code (“FMC”) to regulate commercial cannabis businesses within the City of Fontana (“ City”) by establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have a regulatory permit and enter into a development agreement and operating agreement with the City Council; and

WHEREAS, on October 25, 2022, the City Council adopted Ordinance No. 1906 amending FMC Chapter 30 and Chapter 33 to rename “commercial cannabis” to “cannabis retailer -storefront” and reference special regulations for same and to make minor modifications to FMC Ch apter 33 related to phasing, authorization letters, and ATTACHMENT NO. 2
522

2 locations for permit applications along with limiting the number of permits to be issued and

WHEREAS, Section 33-7 of the FMC limits the maximum number of commercial cannabis businesses authorized and designated locations to three, one in the north area, one in the central area and one in the south area of the City; and

WHEREAS, the City of Fontana received an application from Catalyst-Fontana, LLC, (the “Applicant”) on May 4, 2023 for a Retail Commercial Cannabis Business Activity Permit for a location within the north area of the City; and

WHEREAS, pursuant to Section 33 -32 of the FMC, on October 17, 2024, the Applicant was notified that the City (a) will move forward with issuing a notice of selection to Applicant and (b) will approve 15911 Highland Avenue (APN: 0228 -301-01) (“Project Site”) as the location for the Project, subject to Applicant providing proof of the right to use and occupy the premises on the Project Site within 90 days of said notice of selection being issued; and

WHEREAS, on October 21, 2024 the City received a request for a development agreement from the Applicant (the “Project”) to establish certain assurances including timing and the provision of public benefits for a commercial cannabis retail sales business at the project site, an approximately 0.24-acre site; and

WHEREAS, on October 29, 2024, the City issued a Cannabis Zoning Verification Letter that provided that the Project Site had a zoning designation of General Commercial (C-2) zone, which allowed for a storefront commercial cannabis to operate in the north area of the city; and

WHEREAS, the Project Site is within the General Plan Land Use Designation of General Commercial (C -G) and zoned C -2 (General Commercial) which allows for a storefront commercial cannabis use; and

WHEREAS, the Project Site is not located within a specific plan; and

WHEREAS, the City wishes to protect and preserve the quality of life throughout the City, through careful consideration of the proposed development agreement and imposition of the requirements of FMC Chapter 33 upon the Applicant; and

WHEREAS, the City and the Applicant agree that, as a condition of allowing the Project, as further defined in the proposed Development Agreement, and due to the unique circumstances of the Project, the Applicant shall be entitled to the assurances and timeframes identifie d in the Development Agreement and shall in turn provide public benefits, including paying to the City a percentage of gross receipts of the Applicant’s commercial cannabis retail sales by providing benefits to nonprofit organizations within the City and p riority to and opportunities for local jobs, and work for the residents and contractors of the City; and

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3 WHEREAS, because of the logistics, magnitude of the expenditure, and considerable lead time required to plan and develop the property, Catalyst-Fontana, LLC has proposed to enter into a development agreement concerning the property (“Development Agreement”), to provide assurances that the property can be developed without disruption caused by a change in the City’s planning polic ies and requirements except as provided in the Development Agreement, which assurances will thereby reduce the actual or perceived risk of planning for and proceeding with development of the property; and

WHEREAS, Applicant's interest in the Project Site, including that interest reflected in the Development Agreement, constitutes a legal or equitable interest in real property pursuant to California Government Code section 65865; and

WHEREAS, the Applicant proposes to operate a commercial cannabis retail business on an approximately 0.24 acre lot; and

WHEREAS, the terms and conditions of the Development Agreement have undergone review by the Planning Commission at a publicly noticed hearing held on November 19, 2024 and recommended that the City Council enter into the Development Agreement;

WHEREAS, the terms and conditions of the Development Agreement have undergone review by the Planning Commission at a publicly noticed hearing on November 19, 2024 and have been found to be fair, just and reasonable, and that (i) the economic interests of the City's citizens and the public health, safety and welfare will be best served by entering into the Development Agreement; (ii) the Development Agreement is consistent with the General Plan; (iii) the Development Agreement is in conformity with the public convenience, general welfare and good land use practice; (iv) the Development Agreement will not be detrimental to the public health, safety and general welfare; and (v) the Development Agreement will not adversely affect the orderly development or the preservation of property values for the property or any other property; and

WHEREAS, pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs.,tit. 14, §15000 et seq.), the Development Agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines 15301, Existing Facilities and Section No. 3.22 of the 2019 Local Guidelines for Implementing CEQ A and a Notice of Exemption will be filed upon adoption of this Ordinance; and

WHEREAS, notice of the public hearing was duly published and posted in accordance with all legal requirements; and

WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, as follows:
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4 Section 1. Recitals. The above recitals are true, correct and incorporated herein by reference.

Section 2. CEQA. The Development Agreement has been reviewed and found to be exempt from California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15301, Existing Facilities, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building and only making minor interior improvements.

Section 3. Public Health, Safety and Welfare. Based on the entire record before the City Council and all written and oral evidence presented to the City Council, the City Council finds this Ordinance promotes the public health, safety and welfare of the community because the Development Agreement will enable needed improvements at the Property and the economic development within the Property, its surroundi ng communities and the citizens of the City.

Section 4. Approval. Pursuant to California Government Code sections 65865 et seq., the City Council hereby approves the development agreement on file with the City Clerk and incorporated by reference herein, entitled "Development Agreement No. 24-006 among the City of Fontana and Catalyst - Fontana, LLC.".

Section 5. Certification. Pursuant to Government Code section 65868.5, within 10 days following the entering into of the Development Agreement, as evidenced by the full execution thereof, the City Clerk shall cause to be recorded with the San Bernardino County Recorder a copy of the executed Development Agreement.

Section 6. Effective Date. This Ordinance shall take effect thirty (30) days after the date of its adoption, and prior to the expiration of the fifteen (15) days from the passage thereof, the Ordinance or a summary of the Ordinance shall be published at least once in the Herald News, a newspaper of general circulation in the City of Fontana.

Thereafter this Ordinance shall be in full force and effect.

APPROVED AND ADOPTED this 28th day of January, 2025.

READ AND APPROVED AS TO LEGAL FORM:

________________________________
City Attorney

I, Germaine Key, City Clerk of the City of Fontana, and Ex-Officio Clerk of the City Council, do hereby certify that the foregoing Ordinance is the actual Ordinance introduced at a regular meeting of said City Council on the 10 th day of December, 2024, and was 525

5 finally passed and adopted not less than five days thereafter on the 28th day of January, 2025 by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________________
City Clerk of the City of Fontana

_______________________________
Mayor of the City of Fontana

ATTEST:

_______________________________
City Clerk

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6 EXHIBIT A

DEVELOPMENT AGREEMENT

WITH CATALYST - FONTANA LLC DBA CATALYST FONTANA

DEVELOPMENT AGREEMENT

WITH CATALYST - FONTANA LLC DBA CATALYST FONTANA

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Clerk

SPACE ABOVE THIS LINE FOR RECORDER’S USE
Recording Fee Exempt per Government Code § 6103

DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this __th day of _____________, 202 5 (the “Execution Date”), by a nd between the CITY OF FONTANA, a California municipal corporation (“City”) and Catalyst - Fontana LLC, a California limited liability company, dba Catalyst - Fontana, with its principal address located at 401 Pine Avenue, Long Beach, CA 90802 (“Permittee”). City and Permittee are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, either may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement.

RECITALS
A. The State of California enacted California Government Code sections 65864 et seq. (“Development Agreement Statutes”) to authorize municipalities to enter into development agreements with those having a legal or equitable interest in real property to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with th e development of real property within their jurisdiction.

B. The purpose of the Development Agreement Statutes is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations, to vest certain rights, and to meet certain public purposes of the local government.
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7 C. As authorized by the Development Agreement Statutes, the City has adopted Municipal Code Section 30-322 establishing the procedures and requirements for the consideration of development agreements with the City.

D. Permittee currently owns legal or equitable interest or leasehold in real property considered in this Agreement, located at 15911 S Highland Avenue, City of Fontana, County of San Bernardino, State of California (the “Site”). The Site includes Assessor’s Parcel Number:
0228-301-01-0000 as is more fully described in Exhibit A and shown in its current condition on the map in Exhibit B, both exhibits being attached hereto and i ncorporated herein by this reference.

E. On September 13, 2016, the City Council adopted Ordinance No. 1747 prohibiting all marijuana uses in the City to the extent allowed under California and included a provision requiring a Residential Indoor Marijuana Cultivation (“RIMC”) permit for any individual who desires to grow up to six (6) marijuana plants in their private residence.

F. On November 8, 2016, California voters approved Proposition 64, titled the “Adult Use of Marijuana Act” (the “AUMA”) and enacted a state statutory scheme legalizing, controlling, and regulating the cultivation, processing, manufacturing, distribution, testing, and sale of nonmedical (“adult-use” or “recreational”) cannabis, including cannabis products, for use by adults twenty-one (21) years of age and older.

G. On June 27, 2017, Governor Brown signed Senate Bill 94, the “Medicinal and Adult- Use Cannabis Regulation and Safety Act” (“SB 94” or the “MAUCRSA”). SB 94 creates one state regulatory structure for medical and adult-use cannabis use and commercial cannabis activities, reconciling AUMA, with Proposition 215 and MAUCRSA. SB 94 continues to provide that a state license will not be approved for a business to engage in Commercial Cannabis Activity if the business activity violates any local ordinance or regulation.

H. The City Council adopted Ordinance No. 1899, on July 12, 2022, as amended on October 25, 2022, establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have an agreement and a regulatory permit prior to operation.

I. Presently, Permittee intends to develop and utilize the Site for the sale of cannabis.

Permittee is an authorized limited liability company as allowed by law duly formed under California law for the pu rpose of commercial cannabis sales (“Commercial Cannabis Activity”). Such Commercial Cannabis Activity facilities shall operate in accordance with the California State Compassionate Use Act (Health & Saf.Code, § 11362.5) (“CUA”), the Medical Marijuana Program Act (Health & Saf. Code, §§ 11362.7 et seq.) (“MMP”), the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (“AUMA”), and the Medicinal and Adult Use Regulation and Safety Act (“MAUCRSA”), Fontana Municipal Code Ordinance Chapter 33 and regu lations promulgated thereunder, and any additional California state law related to Commercial Cannabis Activity (collectively “State Cannabis Law”). Prior to operating a Commercial Cannabis Activity facility, Permittee shall be required to obtain a Commerc ial Cannabis Activity regulatory permit from City pursuant to City ordinance.
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8 J. Permittee shall obtain all required state licenses issued under State Cannabis Law.

K. Pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs.,tit. 14, §15000 et seq.), the whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines Section 15301, Existing Facilities and a Notice of Exemption will be filed upon adoption of the Ordinance approving this Agreement
L. Permittee presently intends to develop and open Commercial Cannabis Activity facilities (“Commercial Cannabis Activity Facility”) on the Site consistent with State Cannabis Law, all other applicable California law, and Project Approvals (known as the “Project”).

M. The Project will include commercial retail cannabis sales to individuals under State Cannabis Law at the Project Site (“Commercial Cannabis Activity Facility”).

N. In its current condition, the Site consists of a total planning area of approximately 0.22 acres. Th e Project will include improvements to the existing Site designed to integrate seamlessly into the City of Fontana ’s General Plan Goals and P olicies for Commercial Districts, including the latest provisions for Commercial Cannabis Activity.

O. City and Permittee have agreed that, as a condition of allowing the Project, as defined herein, and due to the unique circumstances of the proposed Project , shall pay to the City a retail fee based on the gross receipts of Permittee’s commercial cannabis retail sales, as hereinafter defined.

P. City has given public notice of its intention to adopt this Agreement and has conducted public hearings thereon pursua nt to California Government Code section 65867 and Municipal Code Section 30-322. City has found that the provisions of this Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances.

Q. City, in entering into this Agreement, acknowledges that certain City obligations hereby assumed shall survive beyond the terms of the present City Council members, that this Agreement will serve to bind City an d future City Councils to the obligations hereby undertaken, and that this Agreement shall limit the future exercise of certain governmental and proprietary powers of City. By approving this Agreement, the City Council has elected to exercise certain governmental powers at the time of entering into this Agreement rather than defer its actions to some undetermined future date. The terms and conditions of this Agreement have undergone extensive review by City staff, the Planning Commission, and the City Council and have been found to be fair, just, and reasonable. City has concluded that the pursuit of the Project will serve the best interests of its citizens and that the public health, safety, and welfare are best served by entering into this Agreement. Permittee has represented to City that it would not consider or engage in the Project absent City approving this Agreement, i.e., assuring Permittee that it will enjoy the development rights given in this Agreement. The City Council specifically finds that this Agreement satisfies each and every one of the required findings in Municipal Code Section 30-322. . 529

9 R. The City agrees that Permittee’s land use entitlements for the Project shall vest for the term of this Agreement as described below, including, but not limited to, the right to commercial cannabis retail sales and related development in compliance with State Cannabis Law and local ordinances.

S. After conducting a duly noticed hearing on November 19 , 2024, in conjunction with Section 30 -322 of the City’s M unicipal Code, the Planning Commission of the City reviewed, considered, and approved Resolution No. PC 2024-056. The Planning Commission found the Project consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in the General Commercial (C-G); is in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on the City.

T. After conducting a duly noticed hearing on December 10 , 2024, in conjunction with Section 30-322 of the City’s Municipal Code, and after independent review and consideration, the City Council approved the execution of this Agreement. The City Council found the Project consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in the General Commercial zone; is in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of the City; and is in the best interest of the City of Fontana and its residents.

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

1. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same; the Parties further agree to the incorporation by reference herein of said Recitals, together with all definitions provided and exhibits referenced therein. This Agreement pertains to the Site as described in Exhibit A and shown in Exhibit B . Except as otherwise provided in Section 15 of this Agreement, the burdens of this Agreement are binding upon the Permittee. In ord er to provide continued notice thereof, the Parties will record this Agreement with the San Bernardino County Recorder. Should the size or orientation of any Site component specified above be changed in minor respects, e.g., changed by a lot line adjustmen t, this Agreement shall not thereby be deemed to have been affected or invalidated, but the rights and obligations of the Parties shall remain as provided herein.

2. Relationship of the Parties. It is hereby specifically understood and acknowledged that the Project is a private project and that neither City nor Permittee will be deemed to be the agent of the other for any purpose whatsoever. City and Permittee hereby renounce the existence of any form of joint venture or partnership between or among them and agree that nothing contained herein or in any document executed in connection herewith shall be construed as making City and Permittee joint venturers or partners.
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10 3. Term. Except as otherwise specified herein, the term of this Agreement (the “Term”) shall be for three (3) years from the Execution Date. The Term shall generally be subject to earlier termination or extension as hereinafter provided.

3.1 Term Extension. This Agreement shall be subject to two (2) year extensions at the sole discretion of the City. The City Manager is authorized to enter into the term extensions after conducting a periodic review in accordance with Government Code section 65865.1. If at the sole discretion of the City, the City finds that Permittee demonstrates to have complied in good faith with the terms and conditions of this Agreement, the Parties may enter into a written extension signed by both Parties.

3.2 Request by Permittee of Term Extension. The Term of this Agreement may be extended at the request by Permittee by written notice no later than one hundred twenty (120) calendar days before the expiration of the term and Permittee shall not be in default with respect to any provision of this Agreement or any subsequent agreement or understanding between the Parties arising from or related to this Agreement, having received notice from City of said default per this Agreement, or if Permittee did in fact default as to this Agreement, upon notice from City, that Permittee did cure said default during the period to cure provided herein to City’s satisfaction.

3.3 Termination of Agreement. Upon the termination of this Agreement, either by expiration or otherwise, Permittee shall have no right to engage in Commercial Cannabis Activity at the Project Site, except as may otherwise be allowed by City ordinance or law.

3.4 Permittee’s Termination Rights . The Permittee may terminate this Agreement, at any time and in its sole discretion, effective thirty (30) days after the Permittee provides written notice of termination to the City. Such termination sha ll not relieve Permittee of any outstanding or previously incurred liability, payment, or obligation to City. All fees due pursuant to the Commercial Cannabis Permit, this Development Agreement, or any Operating Agreement between the Parties shall immediately be due and payable.

4. Defined Terms . As used in this Agreement, the following terms shall have the meanings hereinafter set forth:

4.1 Certified Report . “ Certified Report” shall mean a detailed document prepared by Permittee on a form acceptable to the City’ s Director of Finance to report to City of the sales by Permittee, as defined herein, in the Project during each Operational Quarter, as defined herein. Each Certified Report shall be certified as true and correct by a duly authorized officer of Permittee. City may also require certification by Permittee.

4.2 Certification of Non -Income Tax Exemption . Permittee certifies that Permittee is not income tax exempt under State or Federal Law and that Permittee will not file for such an exemption from the Internal Revenue Service or the Franchise Tax Board. Permittee will also require all Tenant(s) to certify that Tenant(s) are not income tax exempt under State or Federal Law and will not file for such an exemption.

4.3 Gross Receipts. Except as otherwise specifically provided, means the total amount actually received or receivable from all sales and transfers; the total amount of compensation actually received or receivable for the performance of any act or service, of whatever 531

11 nature it may be, for which a charge is made or credit allowed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise; and discounts, gifts, rents, royalties, fees, commissions, dividends, and gains realized from trading in stocks or bonds, however designated. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or se rvice costs, interest paid or payable, or losses or other expenses whatsoever, except that the following shall be excluded therefrom:

4.3.1 Cash discounts were allowed and taken on sales;

4.3.2 Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as gross receipts;

4.3.3 Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

4.3.4 Such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts;

4.3.5 Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the taxpayer in the regular course of the taxpayer’s business; and

4.3.6 Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar.

4.3.7 Retail sales of non -cannabis products, such as t -shirts, sweaters, hats, stickers, key chains, bags, books, posters, rolling papers, cannabis accessories such as pipes, pipe screens, vape pen batteries (without cannabis) or other personal tangible property.

4.4 Operational Quarter . “Operational Quarter ” shall mean any calendar quarter, or portion of a calendar quarter, during which any Gross Receipts of the Project is produced, as defined herein. The calendar quarters shall begin and end as follows: January 1 through March 31; April 1 through June 30; July 1 through September 30; and October 1 through December 31.

4.5 Land Use Regulations. “Land Use Regulations” shall mean all ordinances, resolutions, codes, rules, regulations and official po licies of the City governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, timing and phasing of development, the maximum height and size of buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Project. “Land Use Regulations” do not include any City ordinance, r esolution, code, rule, regulation or official policy governing:
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12 4.5.1 The conduct or taxation of businesses, professions, and occupations applicable to all businesses, professions, and occupations in the City;

4.5.2 Other than as provided in this Agreement, taxes and assessments of general application upon all residents of the City, provided that the taxes and assessments are not imposed for the purpose of taxing the right, power or privilege of developing or improving land (e.g., excise tax) or to directly finance the acquisition or dedication of open space or any other public improvement in respect of which the Developer is paying any fee or providing any improvement pursuant to this Agreement;

4.5.3 The control and abatement of nuisances;

4.5.4 The granting of encroachment permits and the conveyance of rights and interests which provides for the use of, access to or the entry upon public property, as may be approved by mutual agreement between Permittee and City; and

4.5.5 The exercise of the power of eminent domain.

4.6 Existing Land Use Regulations. “Existing Land Use Regulations” means all Land Use Regulations in effect as of the approval date of this Agreement, including the Project Approvals.

4.7 Retail Fee. Shall mean five percent (5%) of Gross Receipts due to the City at the end of each Operational Quarter

5. Fee Payments.

5.1 Fee Payments. In consideration of City’s entering into this Agreement and authorizing the development and operation of the Project, the requirements for City services created by the Project, the City ensuring compliance with this Agreement, State Cannabis Laws, and the City ’s municipal ordinances, throughout the Term of this Agreement, the following payments shall be made to City:

5.1.1 Retail Fee shall be paid quarterly. Retail Fees shall be due to the City by the 15 th of each month succeeding Operational Quarter. Failure to pay the Retail Fee within thirty 30 days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty -five (25%) of the total amount due. The provisions of this subsectio n shall survive any termination or expiration of this Agreement for any reason.

5.2 Community Benefits . Permittee shall contribute one percent (1%) of its Gross Receipts for the first calendar year in which Permittee is operational, and the greater of one percent (1%) of its Gross Receipts or $250,000 annually for every calendar year thereafter (“Community Benefit Contribution” or “CBC”), which funds shall exclusively be directed to the following community benefit partners identified in Permittee’s Retail Comme rcial Cannabis Business Permit Application, with the (1) allocation of funds between community benefit partners to be determined at the sole discretion of Permittee, (2) the recipients of the funds agreeing to use all funds for programs and/or services in the City of Fontana, and (3) the inclusion of additional community benefit partners shall be subject to an open application process, with approval of 533

13 additional partners to be approved at the sole discretion of City: Fontana Chamber of Commerce, Fontana Po lice Officers Association, Fontana K9 Pals, Fontana Police Department, CanAm Dental, Chaffey College, Inland Empire Community Foundation, Miss Fontana Scholarship Pageant, Fontana Historical Society, Golden State Opportunity, Chicano Latino Caucus of SBC, Inland Empire Central Labor Council, and Inland Empire Ronald McDonald House. CBC contributions shall be calculated on an annual calendar year basis with payments due and payable on or before March 1 of the following calendar year. By way of example, if Pe rmittee becomes operational in calendar year 2024, then a CBC payment equal to one percent (1%) of its Gross Receipts for calendar year 2024 would be due on or before March 1, 2025. A CBC payment of the greater of $250,000 or one percent (1%) of its Gross Receipts for calendar year 2025 would then be due on or before March 1, 2026. Permittee must provide a written record of all funds and their recipients, provided to the City each year during the renewal process.

5.2.1 Permittee shall encourage employees of Permi ttee to provide individual volunteer services within the Fontana Community. Employees that provide verifiable volunteer service to the Fontana community shall be entitled to compensation by Permittee at their regular pay rate for up to 40 hours annually. Verification of service performed shall be in the sole discretion of Permittee. Permittee shall provide documentation to City of any such employee volunteer services.

5.2.2 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

6. Payment Procedures. The following procedures shall apply during the operation of the Project:

6.1 Remittance of Retail Fees/Certified Reports . Within thirty (30) calendar days following the end of each Operational Quarter during the Term of this Agreement commencing with the first Operational Quarter in which the Project has commenced, Permittee shall submit the Certified Report to the City’s Finance Director and a payment for the Retail Fees for that Operational Quarter as identified in the Certified Report. Permittee shall pay Retail Fees to City on a quarterly basis without exception. Any material misstatement or misrepresentation in the Certified Report and any failure to pay Retail Fees when due shall constitute events of default by Permittee subject to the default provisions of this Agreement.

6.2 Maintenance of Records . Permittee shall maintain complete records of its operations to substantiate and document the content of each Certified Report. Such records shall include, without limitation, invoices and payments taken by Permittee and/or any operator of the Commercial Cannabis Facility. Permittee shall maintain such records in a form and location reasonably accessible to City, following reasonable notice to Permittee, for a period of at least five (5) calendar years following Permittee ’s submission of the Certified Report to which the records apply.

6.3 Audit. The City may conduct an audit or arrange for a third -party independent audit, at Permittee ’s expense, of Permittee records regarding C ertified Reports and the Gross Receipts, at the sole discretion of the City. Such audit would not occur more than twice in one calendar year. The City ’s Finance Director shall provide at least seven (7) business days 534

14 written notice of the commencement of s uch audit to Permittee and shall reasonably attempt to schedule the audit so as to reduce the impact on Permittee operations as much as is feasible.

Permittee shall cooperate with the City in completing the audit. If the audit reveals that Permittee has underpaid the payment due at the end of any Operational Quarter, Permittee shall pay such underpaid amounts to the City within thirty (30) calendar days of receipt of written notice from the City’s Director of Finance. If the underpaid amount is more than fi ve percent (5%) of the amount due, Permittee shall pay a penalty of an additional ten percent (10%) of Gross Receipts for first time underpayment and an additional twenty -five percent (25%) of Gross Receipts for any subsequent violations of the payment due at the end of the Operational Quarter. If the audit reveals that the Permittee has overpaid any amount of the Gross Receipts, City shall provide written notification to Permittee and shall credit such amount against Permittee ’s subsequent quarterly payments of Gross Receipts until the overpaid amount has been resolved.

6.4 Site Inspection . From time to time, the City has the right to inspect the Facility for the purpose of monitoring operations, checking quantities, and verifying volumes of product during operating hours or any time deemed appropriate to insure accurate reporting. The City must give notice at least forty-eight (48) hours in advance of any inspection.

7. Covenants of Permittee . During the Term of this Agreement, Permittee hereby covenants and agrees with the City as follows:

7.1 Implementation. Permittee shall use commercial reasonable efforts to pursue the implementation of the Project as expeditiously as feasible, in the form approved by the City, subject to all applicable laws, this Agreement, the Op erating Agreement, the Commercial Cannabis Permit and the Municipal Code.

7.2 Maintain & Operate Project . Permittee shall maintain and operate the Project on the Site, throughout the Term of this Agreement, in accordance with the Project Approvals and all City, State and Federal laws (except as such Federal laws relate to the prohibition of the purchase, sale, or general operation of a cannabis business).

8. Indemnification. Permittee shall defend (with Counsel reasonably approved by the City), indemnify, and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from and against any and all actual and alleged liabilities, demands, claims, losses, damages, injuries, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and attorney’s fees), which arise out of, or which are in any way related to i) the cannabis business permit and any land use entitlement related thereto, ii) the proceedings undertaken in connection with the approval, denial, or appeal of the cannabis business permit and any land use entitlement related thereto, iii) any subsequent approvals or licensing/permits relating to the cannabis business permit and any land use entitlement related thereto, iv ) the processing of the cannabis business permit and any land use entitlement related thereto, v) any amendments to the approvals for the cannabis business permit and any land use entitlement related thereto, vi) the City ’s approval, consideration, analysi s, review, issuance, denial or appeal of the cannabis business permit; vii) the City’s approval, consideration, analysis, review, issuance, denial or appeal of any land use entitlement related thereto, viii) the City’s drafting, adoption and passage of an ordinance, and related resolutions, policies, rules and regulations, allowing for cannabis businesses, ix) the City’s drafting, adoption 535

15 and passage of an ordinance, and related resolutions if necessary in the future regarding any zoning law amendment(s) r elated to Permittee, x) the operation of Project or activity, xi) the process used by the City in making its decision to approve, consider, analyze, review, issue, or deny, my cannabis business permit or any related land use entitlement, or the appeal of e ither, xii) City’s compliance or failure to comply with applicable laws and regulations or xiii) the alleged violation of any federal, state or local laws by Permittee or any of its officers, employees or agents, except where such liability is caused by th e sole negligence or willful misconduct of the City.

8.1 City may (but is not obligated to) defend such challenge as City, in its sole discretion, determines appropriate, all at applicant ’s sole cost and expense. Permittee shall bear any and all losses, damages, injuries, liabilities, costs, and expenses (including, without limitation, staff time and in -house attorney’s fees on a fully -loaded basis, attorney ’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any challenge (“Costs”), whether incurred by Permittee, City, or awarded to any third party, and shall pay to the City upon demand any Costs incurred by the City.

8.2 Permittee shall fund a deposit account (“Fund”) to reimburse the City’s cost, including attorney’s fees, to defend any claim, action, or proceeding that is or may be subject to the agreement on limitations of City ’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. In the event that any such claim, action, or proceeding is filed against the City, Permittee shall within 30 days of the filing deposit an initial sum of $25,000 to the Fund to reimburse my portion of the City defense costs, as determined by the City in its sole discretion.

The Fund shall, once established, shall at all times contain an amount necessary to cover not less than three months’ worth of budgeted expenditures by the City relating to the City’s defense of the claim, action, or proceeding, including all time to appeal, or a s long as expenditures made by the City relating to its defense remain unreimbursed, whichever is later. The City may, from time to time, in the City’s sole and absolute discretion, request additional deposits from the Permittee to ensure the fund balance is adequate to defend any claim, action or proceeding, including appeals related thereto. Once all remaining and outstanding reimbursements have been paid to the City by Permitee, City shall return to me any remaining unused portion of my deposit.

8.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason. Permittee’s obligations under this section are in addition to, and shall not be construed to conflict with, Permittee’s obligations under the Settlement Agreement entered into between the City and Permittee dated ____________, 2025.

9. Hold Harmless.

9.1.1 Permittee hereby waives, releases, and holds harmless the City of Fontana ( “City”) and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to my application for a cannabis business permit, the issuance of the cannabis business permit, the process used by the City in making its decision, the enforcement of the conditions of the cannabis business permit, or the cannabis business’ operations. 536

16 9.1.2 Permittee hereby waives, releases and holds harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney ’s fees), suits or other expenses which arise out of, or which are in any way relate to: (1) any repeal or amendment of any provision of the Fontana Municipal Code or Zoning Ordinance relating to commercial cannabis activity; or (2) any investigation, arrest or prosecution of Permittee, operators, employees, cli ents or customers, for a violation of state or federal laws, rules or regulations relating to cannabis activities.

9.1.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason. Permittee’s obligations under this section are in addition to, and shall not be construed to conflict with, Permittee’s obligations under the Settlement Agreement entered into between the City and Permittee dated ____________, 2025.

10. Covenants of City. During the Term of this Agreement, City hereby covenants and agrees with Permittee as follows:

10.1 Expeditious Services. City shall process applications and address questions and concerns raised by Permittee representatives at the “counter” at City Hall as expeditiously as reasonably possible. Upon Permittee’s request, or if, in an exercise of City’s own discretion, City staff determines that it cannot comply with this Section, City shall expeditiously engage the services of private contract planners, plan checkers or inspectors ( “Private Contractors ”) to perform such services as may be necessary to assist in processing the project plans as described herein. Compensation of such Private Contractors shall be at Permittee ’s sole cost and expense, inclusive of any administrative cost to City of integrating services by Private Contractors into the project’s development processing. Permittee shall pay such costs and expenses of Private Contractors via reimbursement to City, per City ’s applicable policies and procedures. City shall have absolute discretion in the selection of such Private Contractors.

10.2 Vested Rights. During the term of this Agreement, Permittee shall have the vested right and entitlement to develop and operate the Project in accordance with the Existing Land Use Ordinances, in addition to any Commercial Cannabis Activity operating standards found in the Municipal Code, which may be amended at the City ’s discretion to minimize or eliminate safety hazards.

10.3 Building Permits and Other Approvals and Permits . Subject to (a) Permittee’s compliance with this Agreement, the Project Approvals the Existing Land Use Ordinances, the Building Ordinances, and Operating Standards; and (b) payment of the usual and customary fees and charges of general application charged for the processing of such applications, permits and certificates and for any utility connection, or similar fees and charges of general application, the City shall process and issue to Permittee promptly upon application therefore all necessary use permits, building permits, occu pancy certificates, permits, licenses and other required permits for the construction, use and occupancy of the Project, or any portion thereof, as applied for, including connection to all utility systems under the City’s jurisdiction and control (to the extent that such connections are physically feasible and that such utility systems are capable of adequately servicing the Project).
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17 10.4 Procedures and Standards . The standards for granting or withholding permits or approvals required hereunder in connection with the development of the Project shall be governed as provided herein by the standards, terms and conditions of this Agreement and the Project Approvals, and to the extent not inconsistent therewith, the Existing Land Use Ordinances, but the procedures for processing applications for such permits or approvals (including the usual and customary fees of general application charged for such processing) shall be governed by such ordinances and regulations as may then be applicable.

11. Effect of Agreement.

11.1 Grant of Right . This Agreement shall constitute a part of the Enacting Ordinance, as if incorporated by reference therein in full. The Parties acknowledge that this Agreement grants Permittee the right and entitlement to develop the Project and use the land pursuant to specified and known criteria and rules as set forth in the Project Approvals and Existing Land Use Ordinances, and to grant the City and the residents of the City certain benefits which they otherwise would not receive.

11.2 Binding on City . This Agree ment shall be binding upon the City and its successors in accordance with and subject to its terms and conditions, unless subsequent action is taken by the City, whether by ordinance or resolution of the City Council, by referenda, initiative, or otherwise . As long as the City permits the retail cannabis in the City, and the Operating Agreement and Development Agreement are in good standing, the Permittee shall have a right to a Commercial Cannabis Permit.

11.3 Future Conflicting Local Laws . If any City law, inc luding ordinances, resolutions, rules, regulations, standards, policies, conditions and specifications (collectively “City Laws”) are enacted or imposed by a citizen -sponsored initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with this Agreement, such City Law shall apply to the Project. The Parties, acknowledge that the City ’s approval of this Agreement and the City Approvals are legislative actions subject to referendum.

12. Specific Criteria Applicable to Development of the Project.

12.1 Applicable Ordinances. Except as set forth in the Project Approvals and subject to the provisions of Section 10.2 below, the Existing Land Use Ordinances shall govern the development of the Site hereunder and the granting or withholding of all permits or approvals required to develop the Site; provided, however, that (a) Permittee shall be subject to all changes in processing, inspection and plan-check fees and charges imposed by City in connection with the processing of applications for development and construction upon the Site so long as such fees and charges are of general application and are not imposed solely with respect to the Project Site, (b) Permittee shall abide by the Building Ordinances in effect at the time of such applications, (c) Development Impact Fees to be paid by Permittee shall be those in effect at the time permits are issued subject to those fees, and (d) development shall be consistent with current O perating Standards.
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18 12.2 Amendment to Applicable Ordinances . Any change to the Existing Land Use Ordinances that conflicts with the Project Approvals shall nonetheless apply to the Project if, (i) it is determined by City and evidenced through findings adopted by the City Council that the change or provision is reasonably required in order to prevent a condition dangerous to the public health or safety; (ii) it is required by changes in State or Federal law; or (iii) it is otherwise expressly permitted by this Agreement. The City has adopted Operating Standards that govern this type of use, which Regulations, and any amendments thereto, shall apply to the Project.

13. Supersedure of Subsequent Laws or Judicial Action.

13.1 The provisions of this Agreement shall, to the ex tent feasible, be modified or suspended as may be necessary to comply with any new Law or decision issued by a court of competent jurisdiction (a “Decision”), enacted or made after the Execution Date which prevents or precludes compliance with one or more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance of such Decision, the Parties shall meet and confer in good faith to determine the feasibility of any such modification or suspension based on the effect such modification or suspension would have on the purposes and intent of this Agreement. In addition, Permittee and City shall have the right to challenge the new Law or the Decision preventing compliance with the terms of this Agreement. In the event that such challenge is successful, this Agreement shall remain unmodified and in full force and effect, except that the Term shall be extended, in accordance with Section 3.1 above, for a period of time equal to the length of time the challenge was pursued, to extent such challenge delayed the implementation of the project.

13.2 The Parties recognize that California adopted, through ballot initiative, the AUMA and may adopt through initiative or legislative action other laws and regulations pertaining to either medical or adult use of cannabis. The Parties intend through this Agreement that Permittee shall have the right for retail sales of cannabis as allowed by current State Cannabis Law, pertaining to Commercial Cannabis Activity. To the extent the changes in Calif ornia law change the legal process or structure by which cannabis retailers can or may operate (i.e. for -profit vs. non-profit entities, size of licensees, etc.), the Parties intend this Agreement to be flexible to allow such changes and may alter the proc edures specified herein, by Operating Agreement as defined below, or otherwise, as may be necessary.

14. Operating Agreement . The Parties have entered into an Operating Agreement, incorporated as Exhibit C. The Operating Agreement and this Agreement are not in dependent of each other but are dependent on each other. Any breach of any terms of one Agreement shall constitute a breach of the other Agreement.

15. CEQA. Pursuant to the California Environmental Quality Act ( “CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs.,tit. 14, §15000 et seq.), the whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines Section 15301, Existing Facilities and a Notice of Exemption will be filed upon adoption of the Ordinance approving this Agreement.

16. Building Permits. Nothing set forth herein shall impair or interfere with the right of City to require the processing of building permits as required by law rel ating to any specific 539

19 improvements proposed for the Project pursuant to the applicable provisions of the City ’s municipal code, inclusive of such California and International Codes as have been adopted in accord therewith, that are in effect at the time such permits are applied for; provided, however, no such permit processing shall authorize or permit City to impose any condition on and/or withhold approval of any proposed improvement the result of which would be inconsistent with this Agreement.

17. Review for Compliance.

17.1 Periodic Review. Pursuant to California Government Code section 65865.1, City shall engage in an annual review of this Agreement, on or before the anniversary of the Execution Date, in order to ascertain Permittee ’s good faith compliance with its terms (the “Periodic Review”). In the event City fails to formally conduct such annual review, Permittee shall be deemed to be in full compliance with the Agreement.

18. Amendment or Canc ellation. This Agreement may be amended or canceled in whole or in part only by mutual consent of the Parties or in the manner provided in California Government Code section 65865.1 or California Government Code section 65868.

19. Provide Notice. Provide the other Party with written notice of such State or Federal law or regulation, a copy of such law or regulation and a statement identifying how such law regulation conflicts with the provisions of this Agreement.

20. Meet and Confer . Upon notice by one Party to an other as to preemption or frustration of this Agreement by law or regulation, the Parties shall promptly meet and confer in good faith and make a reasonable attempt to modify or suspend this Agreement to comply with such applicable Federal or State law or regulation. If the Parties cannot agree on a manner or method to comply with such Federal or State law or regulation, the Parties may, but shall not be required to, engage in alternative dispute resolution.

21. Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be either personally delivered (which shall include delivery by means of professional overnight courier service which confirms receipt in writing [such as Federal Express or UPS] ), sent by telecopier or facsimile (“Fax”) machine capable of confirming transmission and receipt, or sent by certified or registered mail, return receipt requested, postage prepaid to the following parties at the following addresses or numbers:

If to City: City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Manager

With copy to: Best, Best & Krieger, LLP, City Attorney

2855 E. Guasti Rd.

Suite 400 Ontario, CA 91761
Attention: Ruben Duran, Esq.
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20 If to Permittee: Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
Attention: Compliance

With copy to: Anthony Almaz, Esq.
401 Pine Avenue
Long Beach, CA 90802

Notices sent in accordance with this Section shall be deemed delivered upon the: (a) date of delivery as indicated on the written confirmation of delivery (if sent by overnight courier service); (b) date of actual receipt (if personally delivered by other means); (c) date of transmission (if sent by email or telecopier, so long is sender r eceives actual confirmation that the transmission was received); or (d) date of delivery as indicated on the return receipt (if sent by certified or registered mail, return receipt requested). Notice of change of address shall be given by written notice in the manner detailed in this Section.

22. Breach and Remedies . Notwithstanding any provision of this Agreement to the contrary, Permittee shall not be deemed to be in default under this Agreement with respect to any obligation owed solely to City, and City may not terminate or modify Permittee’ rights under this Agreement, unless City shall have first delivered a written notice of any alleged default to Permittee that specifies the nature of such default. If such default is not cured by Permittee within fourteen (14) calendar days after receipt of such notice of default, City may terminate Permittee’s rights under this Agreement. In the event that a breach of this Agreement occurs, irreparable harm is likely to occur to the non - breaching Party and damages will be an inadequate remedy. To the extent permitted by law, therefore, it is expressly recognized that injunctive relief and specific enforcement of this Agreement are proper and desirable remedies, and it is agreed that any claim by Permittee against City for an alleged breach of this Agreement shall be remedied by injunctive relief or an appropriate action for specific enforcement of this Agreement and not by a claim or action for monetary damages.

23. Entire Agreement . This Agreement and the Exhibits herein con tain the entire integrated agreement among the Parties. The Parties intend that this Agreement state their agreement in full to each and every one of its provisions. Any prior agreements, understandings, promises, negotiations or representations respecting the matters dealt with herein or the duties of any Party in relation thereto, not expressly set forth in this Agreement, are agreed by all Parties to be null and void. Notwithstanding this Section 23, the Settlement Agreement entered into between the City and Permittee dated ____________, 202 5, and all terms, conditions, and obligations contained therein, remains in full force and effect, and is in no way modified or superseded by this Agreement.

24. Severability. If any term, provision, con dition, or covenant of this Agreement, or the application thereof to any Party or circumstance, shall to any extent be held invalid or unenforceable, the remainder of the instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held 541

21 invalid or unenforceable, shall not be affected thereby and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

25. Attorneys’ Fees. In the event any Party hereto brings an action or proceeding for a declaration of the rights of the Parties, for injunctive relief, for an alleged breach or default, or any other action arising out of this Agreement, or the transactions contemplated her eby or institutes a reference or arbitration proceeding as may expressly be permitted by the terms of this Agreement, the prevailing Party in any such action shall be entitled to an award of actual attorneys ’ fees and costs incurred in such action or proceeding, without regard to any rule of court or schedule of such fees maintained by the court, in addition to any other damages or relief awarded, regardless of whether such action proceeds to final judgment.

26. Counterparts. This Agreement may be executed in o ne or more counterparts, each of which will be deemed an original, but all of which constitute one and the same instrument.

27. Execution of Agreement. The Parties shall sign this Agreement on or within five (5) business days of approval.

28. Estoppel Certificate. City shall, at any time and from time to time within ten (10) calendar days after receipt of written notice from Permittee so requesting, execute, acknowledge and deliver to Permittee a statement in writing: (a) certifying that this Agreement is unmodifie d and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement, as so modified, is in full force and effect); and (b) acknowledging that there are no uncured defaults on the part of Permittee hereunder or specifying such defaults if any are claimed. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Site. Upon Permittee’s written request, City shall issue a certificate of performance evidencing completion of any of Permittee’s obligation(s) under this Agreement.

29. Discretion to Encumber . The Parties hereto agree that this Agreement shall not prevent or limit Permittee, in any manner, at Permittee ’s sole discretion, from encumbering the Site or any portion thereof or any improvements thereon then owned by such person with any mortgage, deed of trust or other security device ( “Mortgage”) securing financing with respect to the Site or such portion. City acknowledges that the lenders providing such financing may require certain modifications, and City agrees, upon request, from time to time, to meet with Permittee and/or representatives of such lenders to negotiate in good faith any such request for modification.

City further agrees that it will not unreasonably withhold its consent to any such requested modification. Any mortgagee or trust deed beneficiary of the Site or any portion thereof or any improvements thereon and its successors and assigns ( “Mortgagee”) shall be entitled to the following rights and privileges.

30. Lender Requested Modification/Interpretation. City acknowledges that the lenders providing financing to Permittee may request certain interpretations and modifications of this Agreement. City therefore agrees upon request, from time to time, to meet with the Permittee and representatives of such len ders to negotiate in good faith any such request for interpretation or modification. The City will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with th e 542

22 intent and purposes of this Agreement, provided, further, that any modifications of this Agreement are subject to the provisions of this Agreement relative to modifications or amendments.

31. Governing Law and Venue . This Agreement and the legal relations be tween the Parties shall be governed by and construed in accordance with the laws of the State of California.

Furthermore, the Parties agree to venue in San Bernardino County, California.

32. Mutual Covenants. The covenants contained herein, including those con tained in the Recitals herein, are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party.

33. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Parties . No other person or entity shall have any right of action based upon any provision of this Agreement.

34. Waiver. Failure by a Party to insist upon the strict performan ce of any of this Agreement’s provisions by the other party, or the failure by a Party to exercise its rights upon the default of the other Party, shall not constitute a waiver of such Party ’s right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter.

35. Time of Essence . Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.

36. Recordation of Agreement . This Agreement and any amendment or cancellation thereof shall be recorded with the County Recorder by the City Clerk within the period required by Government Code Section 65868.5.

37. Headings. The headings in this Agreement are inserted for convenience only. They do not constitute part of this Agreement and shall not be used in its construction.

38. Waiver. The waiver by any party to this Agreement of a breach of any provision of this Agreement shall not be deemed a continuing waiver or a waiver of any subsequent breach of that or any other provision of this Agreement.

39. Jointly Drafted . It is agreed among the Parties that this Agreement was jointly negotiated and jointly drafted by the Parties and their respective counsel, and that it shall not be interpreted or construed in favor of or against any party solely on the gr ound that it drafted the Agreement. It is also agreed and represented by all Parties that said Parties were of equal or relatively equal bargaining power and that in no way whatsoever shall this Agreement be deemed to be a contract of adhesion, or unreasonable or unconscionable.

40. Independent Legal Counsel. Each Party acknowledges that it has been represented by independent legal counsel of its own choice throughout all of the negotiations that preceded the execution of this Agreement or has knowingly and vol untarily declined to consult legal counsel, and that each Party has executed this Agreement with the consent and on the advice of such independent legal counsel.
543

23 41. Further Cooperation. The Parties herein agree to execute any and all agreements, documents or instruments as may be reasonably necessary in order to fully effectuate the agreements and covenants of the Parties contained in this Agreement, or to evidence this Agreement as a matter of public record, if required to fulfill the purposes of this Agreeme nt. The Parties further agree to mutually cooperate with one another in carrying out the purposes of this Agreement.

42. Enforceability. This Agreement shall not become binding and shall have no force and effect whatsoever until such time as it has been fully executed by and delivered to all of the parties hereto.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Execution Date.

[Signatures on following pages]

544

24 “CITY”
Date: ______________________, 2025

CITY OF FONTANA, CA
a California Municipal Corporation
By: ______________________________
Acquanetta Warren
Mayor
By: ______________________________
Matt C. Ballantyne
City Manager

Attest
By: ______________________________
Germaine McClellan Key
City Clerk
Approved as to form:

Best, Best & Krieger, LLP
By: _______________________________
Ruben Duran, Esq.

City Attorney

545

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

STATE OF CALIFORNIA}
COUNTY OF }
On before
me,
(insert name and title of the officer)
personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacit y(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature of Notary

546

2 “PERMITTEE”
Date: ________________________, 2025
Catalyst - Fontana LLC, a California limited liability
company, d.b.a. Catalyst - Fontana

By: ________________________
Its: Manager, Elliot Lewis
Approved as to form:

By: _________________________
Damian Martin, Esq.

Attorney for Permittee

547

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

STATE OF CALIFORNIA}
COUNTY OF }

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

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

WITNESS my hand and official seal.

Signature of Notary

548

4 Development Agreement Acknowledgement and Authorization to Record

Re: Acknowledgement of Recording of Development Agreement Upon Property I acknowledge I am the owner of the property located at 15911 S. Highland Avenue, Fontana, CA 92336 (“Property”). It is my understanding that as part of the City of Fontana Commercial Cannabis Permit process, Catalyst - Fontana LLC, a California limited li ability company, dba Catalyst Fontana (“Tenant”) must enter into a Development Agreement with the City.

Pursuant to Government Code section 65868.5 a development agreement shall be recorded against real property with the county recorder. By means of this acknowledgement, I am consenting for the foregoing Development Agreement to be recorded against the Property. I also acknowledge that all the conditions and requirements of the Development Agreement are the sole responsibility of the Tenant, and not of the undersigned owner of the Property. “Owner”
Date: ________________________, 2025
Murray Weber Baelly and Goldie Baelly, husband and
wife, as joint tenants

By: ________________________
Murray Weber Baelly

By: ________________________
Goldie Baelly

549

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

STATE OF CALIFORNIA}
COUNTY OF }

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

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

WITNESS my hand and official seal.

Signature of Notary

550

6 EXHIBIT A
PARCEL NO. 022-830-101-000 DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FONTANA,

COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 13 OF TRACT NO. 3348 HIGHLAND HAVEN, IN THE CITY OF FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 47 PAGES 14, 15 AND 16 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING 1/2 OF ALL PETROLEUM, OIL, NATURAL GAS AND ALL OTHER

HYDROCARBONS AND MINERALS, AS EXCEPTED IN THE DEED FROM THE ILLIANA CORPORATION, A CORPORATION TO JOHN VE RNON, RECORDED JULY 3, 1953 IN BOOK 3199 PAGE 317, OFFICIAL RECORDS.
551

7 EXHIBIT B

MAP OF THE SITE
(Current Condition)

552

8 EXHIBIT C

OPERATING AGREEMENT

OPERATING AGREEMENT FOR COMMERCIAL CANNABIS BUSINESS LOCATED IN THE CITY OF

FONTANA, CALIFORNIA
THIS OPERATING AGREEMENT (this “Operating Agreement”) for a Commercial Cannabis Business is made and entered into this __th day of _________ ____,2025 (“Effective Date”), by and between the CITY OF FONTANA, a California municipal corporation (“City”) and CATALYST - FONTANA LLC dba Catalyst Fontana, with its principal address located at 401 Pine Avenue, Long Beach, CA 90802, (“Commercial Cannabis Business”). The City and Commercial Cannabis Business may be referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS
A. The City of Fontana, California (the “City”) is a municipal corporation, duly organized under the constitution and laws of the State of California.

B. The City Council adopted Ordinance No. 1899, on July 12, 2022, as am ended on October 25, 2022, establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have an Agreement and a regulatory permit prior to operation.

C. The Commercial Cannabis Business submitted an application to the City for a use permit to conduct certain commercial cannabis business in the City, located at 15911 S Highland Avenue, Fontana, CA 92336 (“Subject Property”).

D. The City issued a Commercial Cannabis Permit to the Cannabis Business on _____________, 2025, a true and correct copy of which is attached hereto as Exhibit A, to permit cannabis retail sales at the Subject Property, consistent with the provisions and requirements of Chapter 33 of the Fontana Municipal Code, permitting cannabis sales in the City.

E. As required by Chapter 33 of the Fontana Municipal Code, the Parties now wish to enter into this Agreement.

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

AGREEMENT

1. Incorporation of Recitals. The Recitals, and all defined terms set forth in this Agreement, are hereby incorporated into this Agreement as if set forth herein in full.

2. Public Benefit and Social Equity.
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9 2.1 Intent. The purpose of this Agreement is to ensure positive community impacts from commercial cannabis business operations through local sourcing, community benefit and sustainable business practices, and the collection of required fees as applicable for the operation of a commercial cannabis bus iness and to provide mitigation options to be used by City to compensate for impacts to City services, residents, and/or businesses as set forth in Fontana Municipal Code Chapter 33. The Parties agree that this Agreement confers substantial private benefits on Commercial Cannabis Business which should be balanced by commensurate public benefits. As part of the cannabis Regulatory Safety Permit process, Commercial Cannabis Business agrees to enter into this Agreement. Commercial Cannabis Business acknowledges that City and Commercial Cannabis Business have had extensive negotiations and proceedings prior to entering into this Agreement. Commercial Cannabis Business has elected to execute this Agreement as it provides Commercial Cannabis Business with importan t economic benefits.

Accordingly, the Parties intend to provide consideration to the public to balance the private benefits conferred on Commercial Cannabis Business by providing mitigation measures to the public and to pay for City services.

2.2 Local Hiring and Sourcing . Commercial Cannabis Business agrees to use its reasonable efforts to hire qualified City of Fontana residents, currently living in Fontana, to work at its commercial cannabis businesses. Commercial Cannabis Business shall also use reasonable efforts to retain the services of qualified contractors and suppliers who are located in the City of Fontana or who employ a significant number of City of Fontana residents. Commercial Cannabis Business shall make a good faith effort to advertise on various social media sites, at local job fairs, and through public agencies and organizations.

3. Definitions. The following terms shall have the following meanings for purposes of this Agreement, but other terms may be defined elsewhere in this Agreement.

3.1 “Commercial Cannabis Permit” means the regulatory permit issued by the City to the Commercial Cannabis Business pursuant to the provisions of Chapter 33 of the Fontana Municipal Code.

3.2 “City Permits” means and includes all building permits, use permits, zoning amendments, operating agreements, development agreements, and other permits, including the cannabis business permit, licenses, entitlements, and agreements that the City, acting in its governmental capacity, must issue or approve for the Cannabis Business to o perate in accordance with the City’s regulations and this Agreement.

3.3 “Commencement Date” means the date that all of the following have occurred:
(1) the City has issued all necessary City Permits; (2) the Cannabis Business has obtained all necessary State Licenses to operate; and (3) the Cannabis Business has obtained a certificate of occupancy.

3.4 “City Manager” means the City Manager and his or her designee. 554

10 3.5 “Effective Date” means the date first entered above as the Effective Date and is the date that both Parties have signed this Agreement.

3.6 “Manager” means a person with responsibility and authority over the establishment, management, supervision, or oversight of the operation of the Commercial Cannabis Business.

3.7 “State License(s)” means all licenses required to be issued by the State of California for operation of the Commercial Cannabis Business pursuant to Division 10 of the Business and Professions Code and applicable state regulations, including but not limited to Division 42 of Title 16, Division 8 of Title 3, and Division 1 of Title 17 of the California Code of Regulations (“CCR”), as those provisions may be amended.

3.8 “Term” means the period of time this Agreement is in effect as specified in Section

5. 4. Consideration. As consideration for the rights and benefits it enjoys under this Agreement, including its operation of approved cannabis uses in the City during the Te rm, the Commercial Cannabis Business shall pay the City fees as set forth by Resolution by the City Council.

5. Term of Agreement . Except as otherwise specified herein, the term of this Agreement (the “Term”) shall be for three (3) years from the Execution Da te. The Term shall generally be subject to earlier termination or extension as hereinafter provided.

5.1 Term Extension. This Agreement shall be subject to two (2) year extensions at the sole discretion of the City. If at the sole discretion of the City, the C ity finds that Permittee demonstrates to have complied in good faith with the terms and conditions of this Agreement, the Parties may enter into a written extension signed by both Parties.

5.2 Request by Permittee of Term Extension. The Term of this Agreement may be extended at the request by Permittee by written notice no later than one hundred twenty (120) calendar days before the expiration of the term and Permittee shall not be in default with respect to any provision of this Agreement or any subsequent agreement or understanding between the Parties arising from or related to this Agreement, having received notice from City of said default per this Agreement, or if Permittee did in fact default as to this Agreement, upon notice from City, that Permittee did cure said default during the period to cure provided herein to City’s satisfaction.

5.3 Termination of Agreement. Upon the termination of this Agreement, either by expiration or otherwise, Permittee shall have no right to engage in Commercial Cannabis Activity at the Project Site, except as may otherwise be allowed by City ordinance or law.

6. Business License Required . A valid City of Fontana Business License is required for all persons engaged in transacting and carrying on any commercial cannabis business activity in the 555

11 City of Fontana. It is unlawful for any person or legal entity to commence, transact or carry -on cannabis business activity in the City of Fontana without first having procured a City of Fontana cannabis business license.

7. Bond Requirement. Commercial Cannabis Business shall provide proof of a bond in the amount of Twenty-Five Thousand Dollars ($25,000.00) to cover the cost of enforcing the terms of Chapter 33 and this Agreement if necessitated by a violation of the licensing requirements.

8. Records and Recordkeeping.

8.1 Commercial Cannabis Business shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than an annual basis, or at an y time upon reasonable request of the City, Commercial Cannabis Business shall file a sworn statement detailing the Commercial Cannabis Business’s revenue and number of sales during the previous 12 -month period (or shorter period based upon the timing of t he request), provided on a per -month basis. The statement shall also include gross revenues for each month, and all applicable taxes paid or due to be paid. On an annual basis, Commercial Cannabis Business shall submit to the City a financial audit of the Commercial Cannabis Business operations conducted by an independent certified public accountant. Each permittee shall be subject to a regulatory compliance review and financial audit as determined by the City.

8.2 Commercial Cannabis Business shall maintain a current register of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in the Commercial Cannabis Business, and separately of all the officers, managers, employees, agents and v olunteers currently employed or otherwise engaged by the Commercial Cannabis Business. The register required by this paragraph shall be provided to the City upon request.

8.3 All records collected by Commercial Cannabis Business shall be maintained for a minimum of seven years and shall be made available by the Commercial Cannabis Business to the agents or employees of the City upon request, except that private medical records shall be made available only pursuant to a properly executed search warrant, subpoena, or court order.

8.4 Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA) regulations, Commercial Cannabis Business shall allow City officials to have access to the business’s books, records, accounts, together wit h any other data or documents relevant to its permitted commercial cannabis activities, for the purpose of conducting an audit or examination. Books, records, accounts, and any and all relevant data or documents will be produced no later than 24 hours afte r receipt of the City’s request, unless otherwise stipulated by the City. The City may require the materials to be submitted in an electronic format that is compatible with the city’s software and hardware.

9. Records Inspection, Examination and Audit. Commercial Cannabis Business acknowledges and agrees that City is empowered under this Agreement to inspect, examine and audit 556

12 Commercial Cannabis Business’s books and records (including tax filings and returns). City or its authorized agents shall have the powe r and authority to conduct a full inspection, examination and audit of such books and records (including tax filings and returns) at any reasonable time, including but not limited to, during normal business hours. In the event any such books, records, tax filings and returns cannot be made fully available within the City of Fontana, Commercial Cannabis Business acknowledges and agrees that it shall reimburse City for the cost of all transportation, lodging, meals, portal-to-portal travel time, and other incidental costs reasonably incurred by City or its authorized agents in obtaining said full inspection, examination and audit.

In the event that said records inspection, examination and audit determines that a net operating agreement or development agreement fee payment deficiency of greater than five percent (5%) exists; Commercial Cannabis Business acknowledges and agrees that it shall reimburse City for the full cost of said records inspection, examination and audit reasonably incurred by City or its authorized agents.

10. General Terms and Conditions . The Commercial Cannabis Business shall comply with all of the following terms and conditions for the Term of this Agreement:

10.1 This Agreement is only valid for the Commercial Cannabis Business to operate at the Sub ject Property identified in this Agreement. The rights and obligations set forth in this Agreement shall not be transferred, assigned, or assumed unless agreed to in advance in writing by the City. The Commercial Cannabis Business expressly acknowledges, understands and agrees that nothing in this Agreement confers any ongoing vested property right or entitlement to conduct the Commercial Cannabis Business, or any other commercial cannabis activity, at the Subject Property; this Agreement sets forth only the operational requirements of the Commercial Cannabis Business as otherwise approved by the City and the Commercial Cannabis Business will be required to obtain a permit in accordance with Chapter 33 of the Fontana Municipal Code which the City shall issue in accordance with this Agreement.

10.2 Conditions placed on any City Permits, expressly including the Commercial Cannabis Business Permit shall be conditions and requirements of this Agreement. Violations of the City Permits shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement. Violations of any applicable State Licenses shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

10.3 The Commercial Cannabis Business shall o btain and maintain at all times a valid Commercial Cannabis Permit, Use Permit, and applicable State License(s) prior to and during operation of the Cannabis Business. The City shall issue a Commercial Cannabis Permit and any other City Permits to the Comm ercial Cannabis Business provided that the Cannabis Business is in compliance with the provision of Chapter 33 of the Fontana Municipal Code and State Law.

10.3.1 As soon as practicable, the Commercial Cannabis Business shall inform the City when it obtains its necessary State License(s), and shall provide a copy of the State License(s) to the City Manager. The City shall cooperate with the Commercial Cannabis Business as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Commercial Cannabis Business. Failure of the Commercial Cannabis Business to procure and 557

13 produce evidence of receipt of any required state licenses within eighteen months of the effective date of this Agreement shall be deemed a material and incurable breach of the Agreement and, this Agreement, along with any permits issued by the City for a Commercial Cannabis Business shall immediately be deemed null and void and the Commercial Cannabis Business shall be prohibited from application for a future Commercial Cannabis Business permit in the City for a period of ten (10) years.

10.3.2 The Commercial Cannabis Business agrees to provide City with copies of any reports provided to a State Cannabis Licensing Agency, including any required financial or compliance reports, w ithin thirty (30) days of that submission and further agrees to keep such records in accordance with State law and Chapter 33 of the Fontana Municipal Code.

10.3.3 The City shall diligently process the Commercial Cannabis Business’s applications for all City Permits. This Agreement commits the City in advance to approve the City Permits provided that the Commercial Cannabis Business complies with all the provisions of Chapter 33 of the Fontana Municipal Code and the requirements to obtain City Permits. Nothing in this Agreement relieves the Commercial Cannabis Business of the obligation to comply with all requirements of the Fontana Municipal Code.

10.4 The Commercial Cannabis Business agrees to comply with all applicable State Law and local laws and regulations app licable to operation of the Commercial Cannabis Business, including Chapter 33 of the Fontana Municipal Code.

10.5 The Commercial Cannabis Business agrees to conduct an annual financial audit and/or compliance review, at Commercial Cannabis Business’s cost, as requested by the City.

11. Operational Requirements. In addition to all operating requirements set forth in Chapter 33 of the Fontana Municipal Code, the Commercial Cannabis Business shall comply with the following specific operational requirements:

11.1 The Commer cial Cannabis Business shall immediately notify the Fontana Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damaged surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Manager of the Commercial Cannabis Business shall notify th e City Police Department as soon as practicable after becoming aware of the security system breach. The Commercial Cannabis Business shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time a nd delay to remedy, the Commercial Cannabis Business shall so notify the City Police Department and provide an estimated timeline the security breach will be cured.

11.2 If the Commercial Cannabis Business receives any criminal threats, or otherwise suspects any criminal targeting related to movement of product or cash from or to the Subject Property, the Commercial Cannabis Business shall immediately notify the City Police Department. 558

14 11.3 Commercial Cannabis Business shall abide by the operating procedures submitted to the City, as set forth in Section 33-8(a)(8) and that are hereby attached and incorporated into this Agreement as Exhibit B. The Commercial Cannabis Business shall immediately notify City of any modifications to the operating procedures.

11.4 Commercial Cannabis Business shall abide by the operating requirements set forth in Sections 33-29, 33-30 and 33-31, including but not limited to, hours of operation not to exceed 9:00 am to 9:00 pm, no consumption of cannabis on premises, no cannabis or cannabis products shall be visible from exterior of property, and no persons under 21 years (or 18 years if such person is a customer of the Commercial Cannabis Business and is in possession of a valid physician's recommendation, a valid county -issued medical marijuana identification card, or be a Primary Caregiver, as defined in Sections 11362.7(d) or 11362.5(e) of the California Health and Safety Code, with a valid physician's recommendation for the patient ) shall be allowed on the premises. The provisions of Sections 33-29, 33 -30 and 33 -31 shall be strictly enforced by Commercial Cannabis Business.

11.5 Commercial Cannabis Business shall abide by the requirements of Development Agreement.

12. Inspections.

12.1 The city manager, police chief, fire marshal, code compliance representat ive and their designees charged with enforcing the provisions of the Fontana Municipal Code may enter the Commercial Cannabis Business at any time during regular business hours, without notice, and inspect the location of the Commercial Cannabis Business a s well as any recordings and records required to be maintained pursuant to this chapter or under applicable provisions of state law.

12.2 It is unlawful for any person having responsibility over the operation of the Commercial Cannabis Business, to impede, obst ruct, interfere with, or otherwise not to allow, the City to conduct an inspection, review or copy records, recordings or other documents required to be maintained by the Commercial Cannabis Business under Chapter 33 or under state or local law. It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any records, recordings or other documents required to be maintained by the Commercial Cannabis Business under Chapter 33 or under state or local law.

13. Default and Termination for Cause . Without prejudice to its other remedies at law or in equity, the City may terminate this Agreement for cause with thirty (30) days’ written notice to Commercial Cannabis Business provided that Commercial Cannabis Business does not cure as set forth in section 13.7 below. Caused as used in this section is defined as:

13.1 Failure to comply with the terms of the City of Fontana Commercial Cannabis Permit issued to Commercial Cannabis Business by City;
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15 13.2 Failure of Commercial Cannabis Business to maintain a valid active City of Fontana Business License as the commercial cannabis business approved by the Commercial Cannabis Permit and as operating;

13.3 Failure by Commercial Cannabis Business to accurately report gross receipts information or other data necessary for City to calculate/confirm operating or development agreement fees;

13.4 Failure by Commercial Cannabis Business to pay operating agreement fees and related reimbursement costs within thirty (30) days of the date those fees are due;

13.5 Failure by Commercial Cannabis Bus iness to cooperate with City or City’s authorized agents in any inspection, examination and audit of Commercial Cannabis Business’s commercial cannabis business books and records (including tax filings and returns).

13.6 This Agreement will automatically terminate if:

13.6.1 Commercial Cannabis Business’s Commercial Cannabis Permit is revoked by City or is not renewed by City, or

13.6.2 Commercial Cannabis Business transfers its Commercial Cannabis Permit in violation of Fontana Municipal Code section 33-15.

13.7 Cure Period. Commercial Cannabis Business shall cure the default resulting from the cause for termination within thirty (30) days of the date of the notice of termination. If Commercial Cannabis Business fails to cure the default within thirty (30) days of the date of the notice of termination for cause, this Agreement will be terminated.

14. Termination.

14.1 The Commercial Cannabis Business may terminate this Agreement prior to expiration of the Term for the reasons and subject to the requirements set forth below. The Commercial Cannabis Business understands and acknowledges that the right to operate the Commercial Cannabis Business is expressly contingent on full compliance with Chapter 33 of the Fontana Municipal Code. As such, termination of this Agreement shall result in th e immediate termination of the Commercial Cannabis Business’s operations, unless and until a new Operating Agreement is executed by the Parties.

14.2 Commercial Cannabis Business’s Termination Rights . The Commercial Cannabis Business may, at any time and in its sole discretion, effective thirty (30) days after the Commercial Cannabis Business provides written notice of termination to the City. Such termination shall not relieve Commercial Cannabis Business of any outstanding or previously incurred liability, payment, or obligation to City. All fees due pursuant to the Commercial Cannabis Permit, this Operating Agreement or any Development Agreement between the Parties shall immediately be due and payable.
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16 15. Indemnification.

15.1 Commercial Cannabis Business shall defend (with Counsel reasonably approved by the City), indemnify, and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from and against any and all actual and alleged liabilities, demands, claims, losses, damages, injuries, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and attorney’s fees), which arise out of, or which are in any way related to i) the cannabis business permit and any land use entitlement related thereto, ii) the proceedings undertaken in connection with the approval, denial, or appeal of the cannabis business permit and any land use entitlement related thereto, iii) any subsequent approvals or licensing/permits relating to the canna bis business permit and any land use entitlement related thereto, iv) the processing of the cannabis business permit and any land use entitlement related thereto, v) any amendments to the approvals for the cannabis business permit and any land use entitlem ent related thereto, vi) the City’s approval, consideration, analysis, review, issuance, denial or appeal of the cannabis business permit; vii) the City’s approval, consideration, analysis, review, issuance, denial or appeal of any land use entitlement related thereto, viii) the City’s drafting, adoption and passage of an ordinance, and related resolutions, policies, rules and regulations, allowing for cannabis businesses, ix) the City’s drafting, adoption and passage of an ordinance, and related resolutions if necessary in the future regarding any zoning law amendment(s) related to Commercial Cannabis Business, x) the operation of Commercial Cannabis Business or activity, xi) the process used by the City in making its decision to approve, consider, analyze, review, issue, or deny, my cannabis business permit or any related land use entitlement, or the appeal of either, xii) City’s compliance or failure to comply with applicable laws and regulations or xiii) the alleged violation of any federal, state or local laws by Commercial Cannabis Business or any of its officers, employees or agents, except where such liability is caused by the sole negligence or willful misconduct of the City.

15.2 City may (but is not obligated to) defend such challenge as City, in its sole discretion, determines appropriate, all at applicant’s sole cost and expense. Commercial Cannabis Business shall bear any and all losses, damages, injuries, liabilities, costs, and expenses (including, without limitation, staff time and in -house attor ney’s fees on a fully -loaded basis, attorney’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any challenge (“Costs”), whether incurred by Commercial Cannabis Business, City, or awarded to any third party, and shall pay to the City upon demand any Costs incurred by the City.

15.3 Commercial Cannabis Business shall fund a deposit account (“Fund”) to reimburse the City’s cost, including attorney’s fees, to defend any claim, action, or proceeding that is or may be subject to the agreement on limitations of City’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. In the event that any such claim, action, or proceeding is filed against the City, Commercial C annabis Business shall within thirty (30) days of the filing deposit an initial sum of $25,000 to the Fund to reimburse Commercial Cannabis Business’ portion of the City defense costs, as determined by the City in its sole discretion. The Fund, once established, shall at all times, until conclusion of the claim, proceedings, or action, contain an 561

17 amount necessary to cover not less than three months’ worth of budgeted expenditures by the City relating to the City’s defense of the claim, action, or proceeding, including all time to appeal, or as long as expenditures made by the City relating to its defense remain unreimbursed, whichever is later. The City may, from time to time, in the City’s sole and absolute discretion, request additional deposits from the Commercial Cannabis Business to ensure the fund balance is adequate to defend any claim, action or proceeding, including appeals related thereto. Once all remaining and outstanding reimbursements have been paid to the City by Commercial Cannabis Business, and upon resolution of the claim, proceeding or action, City shall return any remaining unused portion of deposit.

15.4 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

16. Waiver, Release and Hold Harmless

16.1 Commercial Cannabis Business hereby waives, releases, and holds harmless the City of Fontana (“City”) and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injur ies, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to my application for a cannabis business permit, the issuance of the cannabis business permit, the process used by the City in making its decision, the enforcement of the conditions of the cannabis business permit, or the cannabis business’ operations.

16.2 Commercial Cannabis Business hereby waives, releases and holds harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to:
(1) any repeal or amend ment of any provision of the Fontana Municipal Code or Zoning Ordinance relating to commercial cannabis activity; or (2) any investigation, arrest or prosecution of Commercial Cannabis Business, or the cannabis business’ owners, operators, employees, clients or customers, for a violation of state or federal laws, rules or regulations relating to cannabis activities.

16.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

17. Notice. Any notice or other communication provided pursuant to this Agreement must be in writing and shall be considered properly given and effective only when mailed or delivered in the manner provided by this Section to the persons identified below. A mailed notice or other communication shall be considered given and effective on the third day after it is deposited in the United States Mail (certified mail and return receipt requested). A notice or other communication sent in any other manner will be effective or will be considered pro perly given when actually delivered. A Party may change its address for these purposes by giving written notice of the change to the other Party in the manner provided in this Section. 562

18 If to City: City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Manager

With copy to: Best, Best & Krieger, LLP, City Attorney

2855 E. Guasti Rd.

Suite 400 Ontario, CA 91761
Attention: Ruben Duran, Esq.

If to Permittee: Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
Attention: Compliance

With copy to: Anthony Almaz, Esq.
401 Pine Avenue
Long Beach, CA 90802

17.1 “Force Majeure Event” means a cause of delay that is not the fault of the Party who is required to perform under this Agreement and is beyond that Party’s reasonable control, including the elements (such as floods, earthquakes, windstorms, and unusually severe weather), fire, energy shortages or rationing, riots, acts of terrorism, war or war -defense conditions, acts of any public enemy, epidemics, pandemics, the actions or inactions of any governmental entity (excluding the City) or that entity’s agents, including any “stay at home” or “safer at home” and/or any other governmental order requiring the Commercial Cannabis Business to temporarily cease operations, litigat ion, labor shortages (including shortages caused by strikes or walkouts), and materials shortages.

17.2 Except as otherwise expressly provided in this Agreement, if the performance of any act required by this Agreement to be performed by either the City or Comm ercial Cannabis Business is prevented or delayed because of a Force Majeure Event, then the time for performance shall be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused.

18. Waiver. A Party’s failure to insist on strict performance of this Agreement or to exercise any right or remedy upon the other Party’s breach of this Agreement shall not constitute a waiver of any performance, right, or remedy. A Party’s waiver of the other Party ’s breach of any provision in this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision. A waiver is binding only if set forth in writing and signed by the waiving Party.
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19 19. Relationship of Parties. This Agreement does not create any employment relationship, ownership interest, or other association between the City and Commercial Cannabis Business.

Nothing herein shall be construed to create the relationship of principal and agent, partnersh ip or other joint venture between the City and Commercial Cannabis Business.

20. Attorneys’ Fees . The Party prevailing in any litigation concerning this Agreement, the Subject Property, or the Commercial Cannabis Business operations, shall be entitled to an award by the court of reasonable attorneys’ fees and litigation costs. If the City is the prevailing party, then this Section shall apply whether the City is represented in the litigation by the designated City Attorney or by outside counsel.

21. Jurisdiction and Venue. This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of Californi a. Both parties further agree that San Bernardino County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement.

22. Severability. If a court with competent jurisdicti on finds any provision of this Agreement to be invalid, void, or unenforceable, then the remaining provisions shall remain in full force and effect, and to this end this Agreement shall be severable.

23. Counterparts. The Parties may execute this Agreement in counterparts, each of which shall constitute an original, but all of which shall collectively constitute this same Agreement.

24. Disclaimer. Despite California’s commercial cannabis laws and the terms and conditions of this Agreement or any Commercial Cannabis Permit issued pertaining to Commercial Cannabis Business or the hereinabove specified property location, California commercial cannabis cultivators, transporters, distributors, cannabis testing facility/laboratory businesses or possessors may still be su bject to arrest by federal officers and prosecuted under federal law.

The Federal Controlled Substances Act, 21 USC § 801 et seq., prohibits the manufacture, manufacturing, and possession of cannabis without any exemptions for medical or non-medicinal use.

25. Integration and Modification. This Agreement sets forth the Parties’ entire understanding and agreement regarding the matters addressed herein. This Agreement supersedes all prior or contemporaneous agreements, representations, and negotiations (written, oral, express, or implied) and may be modified only by written agreement signed by both Parties.

IN WITNESS WHEREOF, the parties enter into this Agreement as of the Effective Date.

City of Fontana Catalyst - Fontana LLC

564

20 By: By:

City Manager Elliot Lewis, Manager
Dated: , 2025 Dated: , 2025

Approved as to Form Fontana
City Attorney

By:

City Attorney

565
City of Fontana
Action Report
Planning Commission
8353 Sierra Avenue
Fontana, CA 92335
File #: 21-3400 Agenda Date: 11/19/2024
Agenda #: PH-B Category: Public Hearing
FROM:

Planning Department
TITLE:

Resolution No. PC 2024-____: A Resolution of the Planning Commission of the City of Fontana, California, Recommending, Pursuant to an Exemption from the California Environmental Quality Act, that the City Council Approve a Development Agreement with Catalyst - Fontana LLC, concerning a retail cannabis business and Direct Staff to File a Notice of Exemption.

RECOMMENDATION:

Based on the information in the staff report and subject to the findings, conclusions, and information in the staff report, resolution and presented in the public hearing, staff recommends that the Planning Commission adopt Resolution No. PC 2024-____; and recommend that the City Council:

1. Find, after review of this Development Agreement, that the Project is EXEMPT from the California Environmental Quality Act (“CEQA”),pursuant to State CEQA Guidelines Section 15301 (Class No. 1 - Existing Facilities) and direct staff to file a Notice of Exemption; and

2. Approve a Development Agreement with Catalyst - Fontana LLC, based upon the findings in the staff report and resolution, pending final adoption of the Development Agreement ordinance by the City Council and an Operating Agreement with Catalyst - Fontana LLC.

APPLICANT:

Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
LOCATION:
15911 Highland Avenue (APN: 0228-301-01)
REQUEST:

A request that the Planning Commission make a recommendation, pursuant to an exemption under CEQA, that the City Council approve the Development Agreement with Catalyst - Fontana LLC, concerning a retail cannabis business.

PROJECT PLANNER:

Mai Thao, Assistant Planner
BACKGROUND INFORMATION:

Pursuant to state law, the City adopted regulations in Chapter 33 of the Fontana Municipal Code (“FMC”)to allow a maximum of three (3) cannabis retail establishments that would be permitted to City of Fontana Printed on 11/14/2024Page 1 of 4
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(“FMC”)to allow a maximum of three (3) cannabis retail establishments that would be permitted to operate within the city’s jurisdiction, one each in three designated areas (i.e. North, Central and South).

The City received an application from Catalyst - Fontana LLC, (the “Applicant”)on May 4, 2023, for a Retail Commercial Cannabis Business Activity Permit (“Permit”)for the North area of the City pursuant to FMC Chapter 33 for the rights and entitlements to develop and operate a commercial cannabis retail sales business at a project site located at APN: 0240-091-10. On April 24, 2023, the City issued a Cannabis Zoning Verification Letter that provided that the property located at APN:
0240-091-10 had a zoning designation of Commercial/Retail within the Fontana Promenade Specific Plan and that allowed consideration of a cannabis retailer use. The applicant’s application was evaluated and determined to be the second-ranked applicant in the North Area of the City and thus was not initially selected to receive a retail cannabis permit. On May 1, 2024, the top-ranked applicant for the North Area was informed by the City that its permit application process had been terminated by the City. Applicant was then notified by the City on October 17, 2024 that the City Manager was exercising his discretion under the City’sCannabis Application Procedures, and subject to the City Council’sultimate approval of a settlement agreement with Applicant, to (a) move forward with issuing a notice of selection to Applicant as the second-highest scoring applicant in the North Area, and (b) approve 15911 Highland Avenue (APN: 0228-301-01) as an alternate location for the Project, subject to Applicant providing proof of the right to use and occupy the premises on the Project site within 90 days of said notice of selection being issued. Therefore, October 17, 2024, is considered the date when the use was established. On October 21, 2024, the City received an application for a Development Agreement with Applicant (the “Project”)to establish timing parameters and to provide certain fees and other public benefits in conjunction with Applicant’s cannabis operations. On October 29, 2024, the City issued a Cannabis Zoning Verification Letter that provided that the property located at 15911 Highland Avenue (APN: 0228-301-01) had a zoning designation of General Commercial (C-2) and that allowed consideration of a cannabis retailer use.

The project site is located within the General Plan Land Use Designation General Commercial (C-G) and zoned with General Commercial (C-2).

PROJECT DESCRIPTION:

Development Agreement with Catalyst - Fontana LLC, which has a term of 3 years, with 2-year extension periods, will provide for timing parameters and community benefits in the form of the payment of a percentage of gross receipts, payment of retail fees to the City and benefits to the local residents of the City by supporting local nonprofit organizations and providing opportunities for local jobs and work.

ANALYSIS:

The Applicant, Catalyst - Fontana, LLC, is seeking issuance a Cannabis Operating Permit that allows for the right to operate a commercial cannabis business at the Project site. The Applicant is now, as required by City ordinance, requesting approval of this Development Agreement to establish timing parameters and community benefits associated with the business operations. Additionally, Applicant will make minor tenant improvements to the existing building suite and open a Commercial Cannabis Activity facility business on the Site consistent with State Cannabis Law, all other applicable California law, and the project approvals.

The Planning Commission is asked to review and render a recommendation regarding this City of Fontana Printed on 11/14/2024Page 2 of 4
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The Planning Commission is asked to review and render a recommendation regarding this Development Agreement by reviewing for consistency with the objectives, policies, general land uses and programs specified in the general plan. The information, findings and conclusions provided in this staff report, the Project documents and upon the information presented in the public hearing will form the basis and reasons for the Planning Commission rendering its recommendation to the City.

The Development Agreement is in conformity with the public necessity, public convenience, general welfare, and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on the City. The provisions of the Development Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances.

The Applicant has demonstrated to City staff, by its application documentation, that it is qualified to operate a Commercial Cannabis business and has pledged in this Development Agreement that it will operate its business in accordance with state and local law and in a responsible manner to contribute positively to the community and the local economy.

The key terms of the Development Agreement are as follows:

1. Initial Term is three (3) years, and, at the sole discretion of the City, two (2) year extension periods may be granted.

2. Applicant shall pay to City retail and public benefit fees, a percentage of gross receipts of its commercial cannabis business.

3. City will grant a vested right and entitlement to Applicant to develop and operate the Project for the Term of the Development Agreement, subject to all applicable laws, regulations, conditions and permits, including but not limited to, the terms of the Commercial Cannabis Regulatory Permit, the requirements of Chapter 33 of the Fontana Municipal Code governing cannabis businesses and activities, the Development Agreement and Operating Agreement.

4. City covenants to expeditiously process all applications for permits submitted by Applicant.

5. Applicant and City shall enter into an Operating Agreement with additional terms and conditions for the implementation, development, operation and maintenance of the Project, including but not limited to, strict oversight, measures and management of the commercial cannabis business to ensure safety and welfare of the residents of the City and Applicant shall use reasonable efforts and give priority to hiring local Fontana residents to fill open jobs and to engage qualified local contractors to perform work on the Project.

Public notice of its intention to adopt this Resolution and to provide a recommendation that the City Council approve and execute the Development Agreement with the Applicant has been given and has conducted public hearings thereon pursuant to California Government Code section 65867 and Municipal Code Section 30-322.

The terms and conditions of the Development Agreement have undergone extensive review by City staff and have been found to be fair, just and reasonable. The pursuit of the Project will best serve the interests of its citizens and the public health, safety, and welfare by entering into this Development Agreement. By conducting this public hearing and the Planning Commission rendering a recommendation to the City Council will satisfy the required findings in Municipal Code Section 30- City of Fontana Printed on 11/14/2024Page 3 of 4
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a recommendation to the City Council will satisfy the required findings in Municipal Code Section 30- 322 and pursuant to Section 4 of Fontana Resolution No. 85-217.

Providing a recommendation to the City Council to approve and execute the Development Agreement with the Applicant will further implement the Council’s following Goals:
· To promote economic development by concentrating on job creation. · To promote economic development by pursuing business retention, expansion and attraction. · To promote economic development by striving to constantly improve the city's competitiveness.

Environmental:

The whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from the California Environmental Quality Act (“CEQA”)per State CEQA Guidelines Section 15301, Existing Facilities, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building and only making minor interior improvement.

MOTION:

Approve staff’s recommendation.

ATTACHMENTS:

1. Vicinity Map

2. Resolution and Exhibit

3. Notice of Exemption

4. Public Hearing Notice
City of Fontana Printed on 11/14/2024Page 4 of 4
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ATTACHMENT NO. 1

VICINITY MAP
DATE: November 19, 2024

Case: Master Case No. 24-0076
Development Agreement No. 24-006

NORTH

CITY OF FONTANA PLANNING DEPARTMENT

CIT
Catawba Avenue
South Highland Avenue
Project Site
Highland Avenue
5570

1 RESOLUTION NO. PC 2024-__

A RESOLUTION OF THE PLANNING COMMISSION OF

THE CITY OF FONTANA, CALIFORNIA ,

RECOMMENDING, PURSUANT TO AN EXEMPTION FROM

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT,

THAT THE CITY COUNCIL APPROVE THE

DEVELOPMENT AGREE MENT WITH CATALYST -

FONTANA LLC, CONCERNING A RETAIL CANNABIS

BUSINESS, AND DIRECT STAFF TO FILE A NOTICE OF

EXEMPTION

WHEREAS, California Government Code S ections 65864 et seq. (“Development Agreement Statutes”) and Section 30-322 of the City’s Development Code authorizes the City Council of the City of Fontana (“City Council”) to enter into a development agreement with those having a legal or equitable interest in real property in order to establish certain development rights in such property , to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within its jurisdiction; and

WHEREAS, Planning Commission of the City of Fontana (“Planning Commission”) found that development agreements will strengthen the public planning proc ess, encourage private participation in comprehensive planning by providing a greater degree of certainty in that process, reduce the economic costs of development, allow for the orderly planning of public improvements and services, allocate costs to achieve maximum utilization of public and private resources in the development process, and ensure that appropriate measures to enhance and protect the environment are achieved; and

WHEREAS, pursuant to Section 30 -322 of the City’s Development Code and Section 4 of City Council Resolution No. 85-217, the Planning Commission shall conduct a public hearing concerning any proposed development agreement in accordance with Government Code Section 65867 and shall, by resolution, render a recommendation to the City Council concerning the proposed development agreement, including the reasons for the recommendation and the relationship of the proposed development agreement to applicable general and specific plans and zoning requirements; and

WHEREAS, on July 26, 2022 , in accordance with state law, the City Council adopted Ordinance No. 1899 adding Chapter 33 to the Fontana Municipal Code (“FMC”) to regulate commercial cannabis businesses within the City of Fontana (“City”) by establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have a regulatory permit and enter into a development agreement and operating agreement with the City; and

WHEREAS, on October 25, 2022, the City Council adopted Ordinance No. 1906 ATTACHMENT NO. 2 6571

2 amending FMC Chapter 30 and Chapter 33 to rename “commercial cannabis” to “cannabis retailer -storefront” and reference special regulations for same and to make minor modifications to FMC Chapter 33 related to phasing, authorization letters, and locations for permit applications along with limiting the number of permits to be issued; and

WHEREAS, Section 33-7 of the FMC limits the maximum number of commercial cannabis businesses authorized and designated locations to three; one in the north area, one in the central area and one in the south area of the City; and

WHEREAS, the City received an application from Catalyst - Fontana LLC, (the “Applicant”) on May 4, 2023 for a Retail Commercial Cannabis Business Activity Permit for a location in the north area of the City; and

WHEREAS, pursuant to Section 33-32 of the FMC, on October 17, 2024, the Applicant was notified that the Ci ty had (a) will move forward with issuing a n otice of selection to Applicant and (b) will approve 15911 Highland Avenue (APN: 0228 -301-01) (“Project Site”) as the location for the Project, subject to Applicant providing proof of the right to use and occupy the premises on the Project Site within 90 days of said notice of selection being issued; and

WHEREAS, on October 21, 2024 the City received a request for a development agreement from the Applicant (the “Project”) to establish certain assurances including timing and the provision of public benefits for a commercial cannabis retail sales business at the project site, an approximately 0.24-acre site; and

WHEREAS, on October 29, 2024, the City issued a Cannabis Zoning Verification Letter that provided that the Project Site had a zoning designation of General Commercial (C-2) zone, which allowed for a storefront commercial cannabis to operate in the north area of the city; and

WHEREAS, the Project Site is within the General Plan Land Use Designation of General Commercial (C -G) and zoned C-2 (General Commercial) which allows for a storefront commercial cannabis use; and

WHEREAS, the Project Site is not located within a specific plan; and

WHEREAS, the City wishes to protect and preserve the quality of life throughout the city, through careful consideration of the proposed development agreement and imposition of the requirements of FMC Chapter 33 upon the Applicant; and

WHEREAS, the City and the Applicant agree that, as a condition of allowing the Project, as further define d in the proposed development agreement, and due to the unique circumstances of the proposed Project, the Applicant shall be entitled to the assurances timeframes identified in the proposed development agreement and shall in turn provide public benefits, including paying to the City a percentage of gross receipts of 7572

3 the Applicant’s commercial cannabis retail sales by providing benefits to nonprofit organizations within the city and priority to and opportunities for local jobs, and work for the residents and contractors of the city; and

WHEREAS, because of the logistics, magnitude of the expenditure, and considerable lead time required to plan and develop the Project Site, Catalyst - Fontana LLC has proposed to enter into a development agreement concerning the Property (“Development Agreement”), to provide assurances that the Property can be developed without disruption caused by a change in the City’s planning policies and requirements except as provided in the development agreement, which assurances will thereby reduce the actual or perceived risk of planning for and proceeding with development of the Project Site; and

WHEREAS, Applicant's interest in the Project Site, including that interest reflected in the Development Agreement, constitutes a legal or equitable interest in real property pursuant to California Government Code section 65865; and

WHEREAS, the Applicant proposes to operate a commercial cannabis retail business on an approximately 0.24 acre lot; and

WHEREAS, the Planning Commission desires the timely, efficient, orderly and proper development of the Project in furtherance of the goals of the General Plan; and

WHEREAS, the Planning Commission has found that the Development Agreement, attached hereto as Exhibit A and incorporated herein by reference , is consistent with City's General Plan and it has been reviewed and evaluated in accordance with Section 30-102 of the City’s Development Code; and

WHEREAS, the terms and conditions of the Development Agreement hav ing undergone review by the Planning Commission at a publicly noticed hearing on November 19, 2024, and have been found to be fair, just and reasonable, and that (i) the economic interests of the City's citizens a nd the public health, safety and welfare will be best served by entering into the Development Agreement; (ii) the Development Agreement is consistent with the General Plan; (iii) the Development Agreement is in conformity with the public convenience, general welfare and good land use practice; (iv) the Development Agreement will not be detrimental to the public health, safety and general welfare; and (v) the Development Agreement will not adversely affect the orderly development or the preservation of property values for the Project Site or any other property; and

WHEREAS, the Planning Commission has further determined that by entering into the Development Agreement: (i) the Development Agreement will promote orderly growth and quality development on the Project Site in accordance with the goals and policies set forth in the General Plan and (ii) the City will benefit from increased employment and commercial opportunities created by the Project for residents of the city; and

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4 WHEREAS, pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA G uidelines (Cal. Code Regs.,tit. 14, §15000 et seq.) , the development agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines 15301, Existing Facilities and Section No. 3.22 of the 2019 Local Guidelines for Implementing CEQA and a Notice of Exemption will be filed upon adoption of this Resolution; and

WHEREAS, the Planning Commission carefully considered all information pertaining to the proposed Development Agreement, including the staff report, findings, and all of the information, evidence, and testimony presented at its public hearing on November 19, 2024; and

WHEREAS, notice of the public hearing was duly publ ished and posted in accordance with all legal requirements; and

WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF
FONTANA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1 . Recitals. The above recitals are true, correct and incorporated herein by reference.

SECTION 2. CEQA. The Development Agreement has been reviewed and found to be exempt from California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15301, Existing Facilities and Section No. 3.22 of the 2019 Local Guidelines for Implementing CEQA, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building and only making minor interior improvement.

SECTION 3. Development Agreement Findings . Based on the entire record before the Planning Commission and all written and oral evidence presented, for the reasons described herein, the Planning Commission finds that this Development Agreement promotes the public health, safety and welfare of the community because it will enable necessary improvements at the Project Site and the economic development of the Property will benefit the citizens of the city. Further, approval of the development agreement will:
a. Generate additional sales taxes for the City.

b. Generate additional property taxes.

c. Provide for the payment of a public benefit fee from the Applicant to the City to offset certain private benefits received by Applicant under the development agreement.

d. Provide public benefits that will accrue to the residents of the City. 9574

5 e. Cause revitalization and improvement of an underdeveloped site, enhancing the property values and aesthetics of the area.

f. Cause stimulation of adjacent areas in the city and will encourage positive economic growth by introducing a new commercial business.

g. Cause opportunities for jobs and work for the residents of the city because the requirements of the development agreement and a related operating agreement will prioritize employment of local city residents and contractors.

SECTION 4. Development Agreement Recommendation . Pursuant to California Government Code Sections 65865 et seq., b ased upon the findings , conclusions and information herein and the information presented in the public hearing, the Planning Commission hereby recommends that the City Council approve the Development Agreement with Catalyst - Fontana LLC.

PASSED, APPROVED, AND ADOPTED by the Planning Commission of the City of Fontana, California, at a regular meeting of the Planning Commission held on the 19th day of November, 2024.

City of Fontana

________________________________
Cathline Fort, Chairperson

ATTEST:

I, Ricardo Quintana, Secretary of the Planning Commission of the City of Fontana, California, do hereby certify that the foregoing resolution was duly and regularly adopted by the Pla nning Commission at a regular meeting thereof, held on the 19th day of November, 2024, by the following vote, to-wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

______________________________
Ricardo Quintana, Secretary
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6 EXHIBIT A

DEVELOPMENT AGREEMENT

WITH CATALYST - FONTANA LLC DBA CATALYST FONTANA

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Clerk

SPACE ABOVE THIS LINE FOR
RECORDER’S USE
Recording Fee Exempt per Government
Code § 6103

DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this “Agreement”) is made and entered into this __ day of _____________, 2025 (the “Execution Date”), by and between the CITY OF FONTANA, a California municipal corporation (“City”) and Catalyst - Fontana LLC, a California limited liability company, dba Catalyst - Fontana, with its principal address located at 401 Pine Avenue, Long Beach, CA 90802 (“Permittee”). City and Permittee are sometimes referenced together herein as the “Parties.” In instances when a provision hereof applies to each of the Parties individually, either may be referenced as a “Party.” The Parties hereby jointly render the following statement as to the background facts and circumstances underlying this Agreement.

RECITALS
A. The State of California enacted California Government Code sections 65864 et seq. (“Development Agreement Statutes”) to authorize municipalities to enter into development agreements with those having a legal or equitable interest in real property to strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development in connection with the development of real property within their jurisdiction.

B. The purpose of the Development Agre ement Statutes is to authorize municipalities, in their discretion, to establish certain development rights in real property for a period of years regardless of intervening changes in land use regulations, to vest certain rights, and to meet certain public purposes of the local government.
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7 C. As authorized by the Development Agreement Statutes, the City has adopted Municipal Code Section 30-322 establishing the procedures and requirements for the consideration of development agreements with the City.

D. Permittee currently owns legal or equitable interest or leasehold in real property considered in this Agreement, located at 15911 S Highland Avenue, City of Fontana, County of San Bernardino, State of California (the “Site”). The Site includes Assessor’s Parcel Number: 0228-301-01-0000 as is more fully described in Exhibit A and shown in its current condition on the map in Exhibit B, both exhibits being attached hereto and incorporated herein by this reference.

E. On September 13, 2016, the City Council adopted Ordinance No. 1747 prohibiting all marijuana uses in the City to the extent allowed under California and included a provision requiring a Residential Indoor Marijuana Cultivation (“RIMC”) permit for any individual who desires to grow up to six (6) marijuana plant s in their private residence.

F. On November 8, 2016, California voters approved Proposition 64, titled the “Adult Use of Marijuana Act” (the “AUMA”) and enacted a state statutory scheme legalizing, controlling, and regulating the cultivation, processing, man ufacturing, distribution, testing, and sale of nonmedical (“adult -use” or “recreational”) cannabis, including cannabis products, for use by adults twenty-one (21) years of age and older.

G. On June 27, 2017, Governor Brown signed Senate Bill 94, the “Medicina l and Adult- Use Cannabis Regulation and Safety Act” (“SB 94” or the “MAUCRSA”). SB 94 creates one state regulatory structure for medical and adult -use cannabis use and commercial cannabis activities, reconciling AUMA, with Proposition 215 and MAUCRSA. SB 94 continues to provide that a state license will not be approved for a business to engage in Commercial Cannabis Activity if the business activity violates any local ordinance or regulation.

H. The City Council adopted Ordinance No. 1899, on July 12, 2022, a s amended on October 25, 2022, establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have an agreement and a regulatory permit prior to operation.

I. Presently, Permittee intends to develop and utilize the Site for the sale of cannabis.

Permittee is an authorized limited liability company as allowed by law duly formed under California law for the purpose of commercial cannabis sales (“Commercial Cannabis Activity”). Such Commercial Cannabis Activity facilities shall operate in accordance with the California State Compassionate Use Act (Health & Saf.Code, § 11362.5) (“CUA”), the Medical Marijuana Program Act (Health & Saf. Code, §§ 11362.7 et seq.) (“MMP”), the Control, Regulate and Tax Adult Use of Marijuana Act of 2016 (“AUMA”), and the Medicinal and Adult Use Regulation and Safety Act (“MAUCRSA”), Fontana Municipal Code Ordinance Chapter 33 and regulations promulgated thereunder, and any additional California state law related to 12577

8 Commercial Cannabis Activity (collectively “State Cannabis Law”). Prior to operating a Commercial Cannabis Activity facility, Permittee shall be required to obtain a Commercial Cannabis Activity regulatory permit from City pursuant to City ordinance.

J. Permittee shall obtain all required state licenses issued under State Cannabis Law.

K. Pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs.,tit. 14, §15000 et seq.), the whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines Section 15301, Existing Facilities and a Notice of Exemption will be filed upon adoption of this Resolution.

L. Permittee presently intends to develop and open Commercial Cannabis Activity facilities (“Commercial Cannabis Activity Facility”) on the Site consistent with State Cannabis Law, all other applicable California law, and Project Approvals (known as the “Project”).

M. The Project will include commercial retail cannabis sales to individuals under State Cannabis Law at the Project Site (“Commercial Cannabis Activity Facility”).

N. In its current condition, the Site consists of a total planning area of approximately

0.22 acres. The Project will include improvements to the existing Site designed to integrate seamlessly into the City of Fontana’s General Plan Goals and Policies for Commercial Districts, including the latest provisions for Commercial Cannabis Activity.

O. City and Permittee have agreed that, as a condition of allowing the Project, as defined herein, and due to the unique circumstances of the proposed Project, shall pay to the City a retail fee based on the gross receipts of Permittee’s commercial cannabis retail sales, as hereinafter defined.

P. City has given public notice of its intention to adopt this Agreement and has conducted public hearings thereon pursuant to Californi a Government Code section 65867 and Municipal Code Section 30 -322. City has found that the provisions of this Agreement and its purposes are consistent with the objectives, policies, general land uses and programs specified in City’s General Plan, zoning code and municipal ordinances.

Q. City, in entering into this Agreement, acknowledges that certain City obligations hereby assumed shall survive beyond the terms of the present City Council members, that this Agreement will serve to bind City and future City C ouncils to the obligations hereby undertaken, and that this Agreement shall limit the future exercise of certain governmental and proprietary powers of City. By approving this Agreement, the City Council has elected to exercise certain governmental powers at the time of entering into this Agreement rather than defer its actions to some undetermined future date. The terms and conditions of this Agreement have 13578

9 undergone extensive review by City staff, the Planning Commission, and the City Council and have been found to be fair, just, and reasonable. City has concluded that the pursuit of the Project will serve the best interests of its citizens and that the public health, safety, and welfare are best served by entering into this Agreement. Permittee has represented to City that it would not consider or engage in the Project absent City approving this Agreement, i.e., assuring Permittee that it will enjoy the development rights given in this Agreement. The City Council specifically finds that this Agreement satisfies each and every one of the required findings in Municipal Code Section 30-322. .

R. The City agrees that Permittee’s land use entitlements for the Project shall vest for the term of this Agreement as described below, including, but not limited to, the right to commercial cannabis retail sales and related development in compliance with State Cannabis Law and local ordinances.

S. After conducting a duly noticed hearing on _____________, 2024, in conjunction with Section 30-322 of the City’s Municipal Code, the Planning Commission of the City reviewed, considered, and approved Resolution No. PC _______. The Planning Commission found the Project consistent with the objectives, policies, general land uses and programs specified in the general plan; compatible with the uses authorized in the General Commercial (C-G); is in conformity with the public necessity, public convenience, general welfare and good land use practices; will not be detrimental to the health, safety and general welfare of the city; will not adversely affect the orderly development of property or the preservation of property values; and will have a positive fiscal impact on the City.

T. After conducting a duly noticed hearing on _____________, 2025, in conjunction with Section 30 -322 of the City’s Mun icipal Code, and after independent review and consideration, the City Council approved the execution of this Agreement. The City Council found the Project consistent with the objectives, policies, general land uses and programs specified in the general pla n; compatible with the uses authorized in the General Commercial zone; is in conformity with good land use practices; will not be detrimental to the health, safety and general welfare of the City; and is in the best interest of the City of Fontana and its residents.

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

1. Binding Effect of Agreement. The Parties agree that the Recitals above are true and correct and intend to be bound by same; the Parties further agree to the incorporation by reference herein of said Recitals, together with all definitions provided and exhi bits referenced therein. This Agreement pertains to the Site as described in Exhibit A and shown in Exhibit B. Except as otherwise provided in Section 15 of this Agreement, the burdens of this Agreement are binding upon the Permittee. In order to provide c ontinued notice thereof, the Parties will record this Agreement with the San Bernardino County Recorder. Should the size or orientation of any Site component 14579

10 specified above be changed in minor respects, e.g., changed by a lot line adjustment, this Agreement shall not thereby be deemed to have been affected or invalidated, but the rights and obligations of the Parties shall remain as provided herein.

2. Relationship of the Parties . It is hereby specifically understood and acknowledged that the Project is a private project and that neither City nor Permittee will be deemed to be the agent of the other for any purpose whatsoever. City and Permittee hereby renounce the existence of any form of joint venture or partnership between or among them and agree that nothi ng contained herein or in any document executed in connection herewith shall be construed as making City and Permittee joint venturers or partners.

3. Term. Except as otherwise specified herein, the term of this Agreement (the “Term”) shall be for three (3) years from the Execution Date. The Term shall generally be subject to earlier termination or extension as hereinafter provided.

3.1 Term Extension. This Agreement shall be subject to two (2) year extensions at the sole discretion of the City. The City Manager is authorized to enter into the term extensions after conducting a periodic review in accordance with Government Code section 65865.1. If at the sole discretion of the City, the City finds that Permittee demonstrates to have complied in good faith with the terms and conditions of this Agreement, the Parties may enter into a written extension signed by both Parties.

3.2 Request by Permittee of Term Extension . The Term of this Agreement may be extended at the request by Permittee by written notice no later than one hundred twenty (120) calendar days before the expiration of the term and Permittee shall not be in default with respect to any provision of this Agreement or any subsequent agreement or understanding between the Parties arising from or related to this Agreement, having received notice from City of said default per this Agreement, or if Permittee did in fact default as to this Agreement, upon notice from City, that Permittee did cure said default during the period to cure provided herein to City’s satisfaction.

3.3 Termination of Agreement. Upon the termination of this Agreement, either by expiration or otherwise, Permittee shall have no right to engage in Commercial Cannabis Activity at the Project Site, except as may otherwise be allowed by City ordinance or law.

3.4 Permittee’s Termination Rights . The Permittee may terminate this Agreement, at any time and in its sole discretion, effective thirty (30) days after the Permittee provides written notice of termination to the City. Such termination shall not relieve Permittee of any outstanding or previously incurred liability, payment, or obligation to City. All fees due pursuant to the Commercial Cannabis Permit, this Development Agreement, or any Operating Agreement between the Parties shall immediately be due and payable.

4. Defined Terms. As used in this Agreement, the following terms shall have the meanings hereinafter set forth:
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11 4.1 Certified Report. “Certified Report” shall mean a detailed document prepared by Permittee on a form acceptable to the City’s Director of Finance to report to City of the sales by Permittee, as defined herein, in the Project during each Operational Quarter, as defined herein. Each Certified Report shall be certified as true and correct by a duly authorized officer of Permittee. City may also require certification by Permittee.

4.2 Certification of Non -Income Tax Exemption. Permittee certifies that Permittee is not income tax exempt under State or Federal Law and that Permittee will not file for such an exemption from the Internal Revenue Service or the Franchise Tax Board. Permittee will also require all Tenant(s) to certify that Tenant(s) are not income tax exempt under State or Federal Law and will not file for such an exemption.

4.3 Gross Receipts. Except as otherwise specifically provided, means the total amount actually received or receivable from all sales and transfers; the total amount of compensation actually received or receivable for the performance of any act or service, of whatever nature it may be, for which a charge is made or credit allow ed, whether or not such act or service is done as a part of or in connection with the sale of materials, goods, wares or merchandise; and discounts, gifts, rents, royalties, fees, commissions, dividends, and gains realized from trading in stocks or bonds, however designated. Included in “gross receipts” shall be all receipts, cash, credits and property of any kind or nature, without any deduction therefrom on account of the cost of the property sold, the cost of materials used, labor or service costs, interest paid or payable, or losses or other expenses whatsoever, except that the following shall be excluded therefrom:

4.3.1 Cash discounts were allowed and taken on sales;

4.3.2 Credit allowed on property accepted as part of the purchase price and which property may later be sold, at which time the sales price shall be included as gross receipts;

4.3.3 Any tax required by law to be included in or added to the purchase price and collected from the consumer or purchaser;

4.3.4 Such part of the sale price of any property returned by purchasers to the seller as refunded by the seller by way of cash or credit allowances or return of refundable deposits previously included in gross receipts;

4.3.5 Receipts derived from the occasional sale of used, obsolete or surplus trade fixtures, machinery or other equipment used by the taxpayer in the regular course of the taxpayer’s business; and

4.3.6 Receipts of refundable deposits, except that such deposits when forfeited and taken into income of the business shall not be excluded when in excess of one dollar.

4.3.7 Retail sales of non -cannabis products, such as t -shirts, sweaters, hats, stickers, key chains, bags, books, posters, rolling papers, cannabis 16581

12 accessories such as pipes, pipe screens, vape pen batteries (without cannabis) or other personal tangible property.

4.4 Operational Quarter. “Operational Quarter” shall mean any calendar quarter, or portion of a calendar quarter, during which any Gross Receipts of the Project is produced, as defined herein. The calendar quarters shall begin and end as follows:

January 1 through March 31; April 1 through June 30; July 1 through September 30; and October 1 through December 31.

4.5 Land Use Regulations . “Land Use Regulations” shall mean all ordinances, resolutions, codes, rules, regulations and official policies of the City governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, timing and phasing of development, the maximum height and size of buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Project. “Land Use Regulations” do not include any City ordinance, resolution, code, rule, regulation or official policy governing:

4.5.1 The conduct or taxation of businesses, professions, and occupations applicable to all businesses, professions, and occupations in the City;

4.5.2 Other than as provided in this Agreement, taxes and assessments of general application upon all residents of the City, provided that the taxes and assessments are not imposed for the purpose of taxing the right, power or privilege of developing or improving land (e.g., excise tax) or to directly finance the acquisition or dedication of open space or any other public improvement in respect of which the Developer is paying any fee or providing any improvement pursuant to this Agreement;

4.5.3 The control and abatement of nuisances;

4.5.4 The granting of encroachment permits and the conveyance of rights and interests which provides for the use of, access to or the entry upon public property, as may be approved by mutual agreement between Permittee and City; and

4.5.5 The exercise of the power of eminent domain.

4.6 Existing Land Use Regulations. “Existing Land Use Regulations” means all Land Use Regulations in effect as of the approval date of this Agreement, including the Project Approvals.

4.7 Retail Fee. Shall mean five percent (5%) of Gross Receipts due to the City at the end of each Operational Quarter

5. Fee Payments.

5.1 Fee Payments . In consideration of City’s entering into this Agreement and authorizing the development and operation of the Project, the 17582

13 requirements for City services created by the Project, the City ensuring compliance with this Agreement, State Cannabis Laws, and the City’s municipal ordinances, throughout the Term of this Agreement, the following payments shall be made to City:

5.1.1 Retail Fee shall be paid quarterly. Retail Fees shall be due to the City by the 15th of each month succeeding Op erational Quarter. Failure to pay the Retail Fee within thirty 30 days after the due date shall result in an additional penalty for nonpayment in a sum equal to twenty-five (25%) of the total amount due. The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

5.2 Community Benefits. Permittee shall contribute one percent (1%) of its Gross Receipts for the first calendar year in which Permittee is operational, and the greater of one percent (1%) of its Gross Receipts or $250,000 annually for every calendar year thereafter (“Community Benefit Contribution” or “CBC”), which funds shall exclusively be directed to the following community benefit partners identified in Permittee’s Retail Commercial Cannabis Busin ess Permit Application, with the (1) allocation of funds between community benefit partners to be determined at the sole discretion of Permittee, (2) the recipients of the funds agreeing to use all funds for programs and/or services in the City of Fontana, and (3) the inclusion of additional community benefit partners to be approved at the sole discretion of City: Fontana Chamber of Commerce, Fontana Police Officers Association, Fontana K9 Pals, Fontana Police Department, CanAm Dental, Chaffey College, Inla nd Empire Community Foundation, Miss Fontana Scholarship Pageant, Fontana Historical Society, Golden State Opportunity, Chicano Latino Caucus of SBC, Inland Empire Central Labor Council, and Inland Empire Ronald McDonald House. CBC contributions shall be calculated on an annual calendar year basis with payments due and payable on or before March 1 of the following calendar year. By way of example, if Permittee becomes operational in calendar year 2024, then a CBC payment equal to one percent (1%) of its Gro ss Receipts for calendar year 2024 would be due on or before March 1, 2025. A CBC payment of the greater of $250,000 or one percent (1%) of its Gross Receipts for calendar year 2025 would then be due on or before March 1, 2026. Permittee must provide a wri tten record of all funds and their recipients, provided to the City each year during the renewal process.

5.2.1 Permittee shall encourage employees of Permittee to provide individual volunteer services within the Fontana Community. Employees that provide verifiable volunteer service to the Fontana community shall be entitled to compensation by Permittee at their regular pay rate for up to 40 hours annually. Verification of service performed shall be in the sole discretion of Permittee. Permittee shall provide documentation to City of any such employee volunteer services.

5.2.2 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

6. Payment Procedures. The following procedures shall apply during the operation of the Project:
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14 6.1 Remittance of Retail Fees/Certified Reports . Within thirty (30) calendar days following the end of each Operational Quarter during the Term of this Agreement commencing with the first Operational Quarter in which the Project has commenced, Permittee shall submit the Certified Report to the City’s Finance Director and a payment for the Retail Fees for that Operational Quarter as identified in the Certified Report. Permittee shall pay Retail Fees to City on a quarterly basis without exception.

Any material misstatement or misrepresentation in the Certified Report and any failure to pay Retail Fees when due shall constitute events of default by Permittee subject to the default provisions of this Agreement.

6.2 Maintenance of Records. Permittee shall maintain complete records of its operations to substantiate and document the content of each Certified Report. Such records shall include, without limitation, invoices and payments taken by Permittee and/or any operator of the Commercial Cannabis Facility. Permittee shall maintain such records in a form and location reasonably accessible to City, following reasonable notice to Permittee, for a period of at least five (5) calendar years following Permittee’s submission of the Certified Report to which the records apply.

6.3 Audit. The City may conduct an audit or arrange for a third -party independent audit, at Permittee’s expense, of Permittee records regarding Certified Reports and the Gross Receipts, at the sole discretion of the City. Such audit would not occur more than twice in one calendar year. The City’s Finance Director shall provide at least seven (7) business days written notice of the commencement of such audit to Permittee and shall reasonably attempt to schedule the audit so as to reduce the impact on Permittee operations as much as is feasible. Permittee shall cooperate with the City in completing the audit. If the audit reveals that Permittee has underpaid the payment due at the end of any Operational Quarter, Permittee shall pay such underpaid amounts to the City within thirty (30) calendar days of receipt of written notice from the City’s Director of Finance. If the underpaid amount is more than five percent (5%) of the amount due, Permittee shall pay a penalty of an additional ten percent (10%) of Gro ss Receipts for first time underpayment and an additional twenty -five percent (25%) of Gross Receipts for any subsequent violations of the payment due at the end of the Operational Quarter.

If the audit reveals that the Permittee has overpaid any amount of the Gross Receipts, City shall provide written notification to Permittee and shall credit such amount against Permittee’s subsequent quarterly payments of Gross Receipts until the overpaid amount has been resolved.

6.4 Site Inspection. From time to time, the City has the right to inspect the Facility for the purpose of monitoring operations, checking quantities, and verifying volumes of product during operating hours or any time deemed appropriate to insure accurate reporting. The City must give notice at least forty-eight (48) hours in advance of any inspection.

7. Covenants of Permittee . During the Term of this Agreement, Permittee hereby covenants and agrees with the City as follows:
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15 7.1 Implementation. Permittee shall use commercial reasonable efforts to pursue th e implementation of the Project as expeditiously as feasible, in the form approved by the City, subject to all applicable laws, this Agreement, the Operating Agreement, the Commercial Cannabis Permit and the Municipal Code.

7.2 Maintain & Operate Project. Permittee shall maintain and operate the Project on the Site, throughout the Term of this Agreement, in accordance with the Project Approvals and all City, State and Federal laws (except as such Federal laws relate to the prohibition of the purchase, sale, or general operation of a cannabis business).

8. Indemnification. Permittee shall defend (with Counsel reasonably approved by the City), indemnify, and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents fro m and against any and all actual and alleged liabilities, demands, claims, losses, damages, injuries, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and attorney’s fees), which arise out of, or which are in any way related to i) the cannabis business permit and any land use entitlement related thereto, ii) the proceedings undertaken in connection with the approval, denial, or appeal of the cannabis business permit and any land use entitlement related thereto, iii) any subsequent approvals or licensing/permits relating to the cannabis business permit and any land use entitlement related thereto, iv) the processing of the cannabis business permit and any land use entitlement related thereto, v) any amendments to the approvals for the cannabis business permit and any land use entitlement related thereto, vi) the City’s approval, consideration, analysis, review, issuance, denial or appeal of the cannabis business permit; vii) the City’s approval, considera tion, analysis, review, issuance, denial or appeal of any land use entitlement related thereto, viii) the City’s drafting, adoption and passage of an ordinance, and related resolutions, policies, rules and regulations, allowing for cannabis businesses, ix) the City’s drafting, adoption and passage of an ordinance, and related resolutions if necessary in the future regarding any zoning law amendment(s) related to Permittee, x) the operation of Project or activity, xi) the process used by the City in making i ts decision to approve, consider, analyze, review, issue, or deny, my cannabis business permit or any related land use entitlement, or the appeal of either, xii) City’s compliance or failure to comply with applicable laws and regulations or xiii) the alleg ed violation of any federal, state or local laws by Permittee or any of its officers, employees or agents, except where such liability is caused by the sole negligence or willful misconduct of the City.

8.1 City may (but is not obligated to) defend such challenge as City, in its sole discretion, determines appropriate, all at applicant’s sole cost and expense.

Permittee shall bear any and all losses, damages, injuries, liabilities, costs, and expenses (including, without limitation, staff time and in -house attorney’s fees on a fully -loaded basis, attorney’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any challenge (“Costs”), whether incurred by Permittee, City, or awarded to any third party, and shall pay to the City upon demand any Costs incurred by the City.
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16 8.2 Permittee shall fund a deposit account (“Fund”) to reimburse the City’s cost, including attorney’s fees, to defend any claim, action, or proceeding that is or may be sub ject to the agreement on limitations of City’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. In the event that any such claim, action, or proceeding is filed against the City, Permittee shall within 30 days of the filin g deposit an initial sum of $25,000 to the Fund to reimburse my portion of the City defense costs, as determined by the City in its sole discretion. The Fund shall, once established, shall at all times contain an amount necessary to cover not less than three months’ worth of budgeted expenditures by the City relating to the City’s defense of the claim, action, or proceeding, including all time to appeal, or as long as expenditures made by the City relating to its defense remain unreimbursed, whichever is la ter. The City may, from time to time, in the City’s sole and absolute discretion, request additional deposits from the Permittee to ensure the fund balance is adequate to defend any claim, action or proceeding, including appeals related thereto. Once all r emaining and outstanding reimbursements have been paid to the City by Permitee, City shall return to me any remaining unused portion of my deposit.

8.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason. Permittee’s obligations under this section are in addition to, and shall not be construed to conflict with, Permittee’s obligations under the Settlement Agreement entered into between the City and Permittee dated ____________, 2025.

9. Hold Harmless.

9.1.1 Permittee hereby waives, releases, and holds harmless the City of Fontana (“City”) and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (i ncluding attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to my application for a cannabis business permit, the issuance of the cannabis business permit, the process used by the City in making its decision, the e nforcement of the conditions of the cannabis business permit, or the cannabis business’ operations.

9.1.2 Permittee hereby waives, releases and holds harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from any a nd all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to: (1) any repeal or amendment of any provision of the Fontana Municipa l Code or Zoning Ordinance relating to commercial cannabis activity; or (2) any investigation, arrest or prosecution of Permittee, operators, employees, clients or customers, for a violation of state or federal laws, rules or regulations relating to cannabis activities.

9.1.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason. Permittee’s obligations under this section are in addition to, and shall not be construed to conflict with, Permittee’s obligations under 21586

17 the Settlement Agreement entered into between the City and Permittee dated ____________, 2025.

10. Covenants of City. During the Term of this Agreement, City hereby covenants and agrees with Permittee as follows:

10.1 Expeditious Services . City shall proce ss applications and address questions and concerns raised by Permittee representatives at the “counter” at City Hall as expeditiously as reasonably possible. Upon Permittee’s request, or if, in an exercise of City’s own discretion, City staff determines that it cannot comply with this Section, City shall expeditiously engage the services of private contract planners, plan checkers or inspectors (“Private Contractors”) to perform such services as may be necessary to assist in processing the project plans as described herein. Compensation of such Private Contractors shall be at Permittee’s sole cost and expense, inclusive of any administrative cost to City of integrating services by Private Contractors into the project’s development processing. Permittee shall pay such costs and expenses of Private Contractors via reimbursement to City, per City’s applicable policies and procedures. City shall have absolute discretion in the selection of such Private Contractors.

10.2 Vested Rights. During the term of this Agreement , Permittee shall have the vested right and entitlement to develop and operate the Project in accordance with the Existing Land Use Ordinances, in addition to any Commercial Cannabis Activity operating standards found in the Municipal Code, which may be am ended at the City’s discretion to minimize or eliminate safety hazards.

10.3 Building Permits and Other Approvals and Permits . Subject to (a) Permittee’s compliance with this Agreement, the Project Approvals the Existing Land Use Ordinances, the Building Ordinances, and Operating Standards; and (b) payment of the usual and customary fees and charges of general application charged for the processing of such applications, permits and certificates and for any utility connection, or similar fees and charges of general application, the City shall process and issue to Permittee promptly upon application therefore all necessary use permits, building permits, occupancy certificates, permits, licenses and other required permits for the construction, use and occupancy of the Project, or any portion thereof, as applied for, including connection to all utility systems under the City’s jurisdiction and control (to the extent that such connections are physically feasible and that such utility systems are capable of adequately servicing the Project).

10.4 Procedures and Standards . The standards for granting or withholding permits or approvals required hereunder in connection with the development of the Project shall be governed as provided herein by the standards, terms and conditions of this Agreement and the Project Approvals, and to the extent not inconsistent therewith, the Existing Land Use Ordinances, but the procedures for processing applications for such permits or approvals (including the usual and customary fees of general application charged for such processing) shall be governed by such ordinances and regulations as may then be applicable.
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18 11. Effect of Agreement.

11.1 Grant of Right. This Agreement shall constitute a part of the Enacting Ordinance, as if incorporated by reference th erein in full. The Parties acknowledge that this Agreement grants Permittee the right and entitlement to develop the Project and use the land pursuant to specified and known criteria and rules as set forth in the Project Approvals and Existing Land Use Ordinances, and to grant the City and the residents of the City certain benefits which they otherwise would not receive.

11.2 Binding on City. This Agreement shall be binding upon the City and its successors in accordance with and subject to its terms and conditio ns, unless subsequent action is taken by the City, whether by ordinance or resolution of the City Council, by referenda, initiative, or otherwise. As long as the City permits the retail cannabis in the City, and the Operating Agreement and Development Agre ement are in good standing, the Permittee shall have a right to a Commercial Cannabis Permit.

11.3 Future Conflicting Local Laws. If any City law, including ordinances, resolutions, rules, regulations, standards, policies, conditions and specifications (collectively “City Laws”) are enacted or imposed by a citizen -sponsored initiative or referendum, or by the City Council directly or indirectly in connection with any proposed initiative or referendum, which City Law would conflict with this Agreement, such City Law shall apply to the Project. The Parties, acknowledge that the City’s approval of this Agreement and the City Approvals are legislative actions subject to referendum.

12. Specific Criteria Applicable to Development of the Project.

12.1 Applicable Ordinances. Except as set forth in the Project Approvals and subject to the provisions of Section 10.2 below, the Existing Land Use Ordinances shall govern the development of the Site hereunder and the granting or withholding of all permits or approvals required to devel op the Site; provided, however, that (a) Permittee shall be subject to all changes in processing, inspection and plan-check fees and charges imposed by City in connection with the processing of applications for development and construction upon the Site so long as such fees and charges are of general application and are not imposed solely with respect to the Project Site, (b) Permittee shall abide by the Building Ordinances in effect at the time of such applications, (c) Development Impact Fees to be paid by Permittee shall be those in effect at the time permits are issued subject to those fees, and (d) development shall be consistent with current Operating Standards.

12.2 Amendment to Applicable Ordinances . Any change to the Existing Land Use Ordinances that conflicts with the Project Approvals shall nonetheless apply to the Project if, (i) it is determined by City and evidenced through findings adopted by the City Council that the change or provision is reasonably required in order to prevent a condition dangerous to the public health or safety; (ii) it is required by changes in State or Federal law; or (iii) it is otherwise expressly permitted by this Agreement. The City has adopted Operating Standards that govern this type of use, which Regulations, and any amendments thereto, shall apply to the Project.
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19 13. Supersedure of Subsequent Laws or Judicial Action.

13.1 The provisions of this Agreement shall, to the extent feasible, be modified or suspended as may be necessary to comply with any new Law or decision issued by a court of competent jurisdiction (a “Decision”), enacted or made after the Execution Date which prevents or precludes compliance with one or more provisions of this Agreement. Promptly after enactment of any such new Law, or issuance of such Decision, the Parties shall meet and confer in good faith to determine the feasibility of any such modification or suspension based on the effect such modification or suspension would have on the purposes and intent of this Agreement. In addition, Permittee and City shall have the right to challenge the new Law or the Decision preventing compliance with the terms of this Agreement. In the event that such challenge is successful, this Agreement shall remain unmodified and in full force and effect, except that the Term shall be extended, in accordance with Section 3.1 above, for a period of time equal to the length of time the challenge was pursued, to extent such challenge delayed the implementation of the project.

13.2 The Parties recognize that California adopted, through ball ot initiative, the AUMA and may adopt through initiative or legislative action other laws and regulations pertaining to either medical or adult use of cannabis. The Parties intend through this Agreement that Permittee shall have the right for retail sales of cannabis as allowed by current State Cannabis Law, pertaining to Commercial Cannabis Activity. To the extent the changes in California law change the legal process or structure by which cannabis retailers can or may operate (i.e. for -profit vs. non -profit entities, size of licensees, etc.), the Parties intend this Agreement to be flexible to allow such changes and may alter the procedures specified herein, by Operating Agreement as defined below, or otherwise, as may be necessary.

14. Operating Agreement . Th e Parties have entered into an Operating Agreement, incorporated as Exhibit C. The Operating Agreement and this Agreement are not independent of each other but are dependent on each other. Any breach of any terms of one Agreement shall constitute a breach of the other Agreement.

15. CEQA. Pursuant to the California Environmental Quality Act (“CEQA”) (Public Resources Code §21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs.,tit. 14, §15000 et seq.), the whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from CEQA pursuant to State CEQA Guidelines Section 15301, Existing Facilities and a Notice of Exemption will be filed upon adoption of this Resolution.

16. Building Permits. Nothing set forth herein shall im pair or interfere with the right of City to require the processing of building permits as required by law relating to any specific improvements proposed for the Project pursuant to the applicable provisions of the City’s municipal code, inclusive of such California and International Codes as have been adopted in accord therewith, that are in effect at the time such permits are applied for; provided, however, no such permit processing shall authorize or permit City to impose 24589

20 any condition on and/or withhold approval of any proposed improvement the result of which would be inconsistent with this Agreement.

17. Review for Compliance.

17.1 Periodic Review. Pursuant to California Government Code section 65865.1, City shall engage in an annual review of this Agreement, on or before the anniversary of the Execution Date, in order to ascertain Permittee’s good faith compliance with its terms (the “Periodic Review”). In the event City fails to formally conduct such annual review, Permittee shall be deemed to be in full compliance with the Agreement.

18. Amendment or Cancellation. This Agreement may be amended or canceled in whole or in part only by mutual consent of the Parties or in the manner provided in California Government Code section 65865.1 or California Government Code sec tion 65868.

19. Provide Notice. Provide the other Party with written notice of such State or Federal law or regulation, a copy of such law or regulation and a statement identifying how such law regulation conflicts with the provisions of this Agreement.

20. Meet and Confer. Upon notice by one Party to another as to preemption or frustration of this Agreement by law or regulation, the Parties shall promptly meet and confer in good faith and make a reasonable attempt to modify or suspend this Agreement to comply with such applicable Federal or State law or regulation. If the Parties cannot agree on a manner or method to comply with such Federal or State law or regulation, the Parties may, but shall not be required to, engage in alternative dispute resolution.

21. Notices. All notices or other communications required or permitted hereunder shall be in writing and shall be either personally delivered (which shall include delivery by means of professional overnight courier service which confirms receipt in writing [such as Federal Express or UPS] ), sent by telecopier or facsimile (“Fax”) machine capable of confirming transmission and receipt, or sent by certified or registered mail, return receipt requested, postage prepaid to the following parties at the following addresses or numbers:

If to City: City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Manager

With copy to: Best, Best & Krieger, LLP, City
Attorney

2855 E. Guasti Rd.

Suite 400 Ontario, CA 91761
Attention: Ruben Duran, Esq.

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21 If to Permittee: Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
Attention: Compliance

With copy to: Anthony Almaz, Esq.
401 Pine Avenue
Long Beach, CA 90802

Notices sent in accordance with this Section shall be deemed delivered upon the: (a) date of delivery as indicated on the written confirmation of delivery (if sent by overnight courier service); (b) date of actual receipt (if personally delivered by other means); (c) date of transmission (if sent by email or telecopier, so long is sender receives actual confirmation that the transmission was received); or (d) date of delivery as indicated on the return receipt (if sent by certified or registered mail, return receipt requested). Notice of change of address shall be given by written notice in the manner detailed in this Section.

22. Breach and Remedies. Notwithstanding any provision of this Agreement to the contrary, Permittee shall not be deemed to be in default under this Agreement with respect to any obligation owed solely to City, and City may not terminate or modify Permittee’ rights under this Agreement, unless City shall have first delivered a written notice of any alleged default to Permittee that specifies the nature of such default. If such default is not cured by Permittee within fourteen (14) calendar days after receipt of such notice of default, City may terminate Permittee’s rights under this Agreement. In the event that a breach of this Agreement occurs, irreparable harm is likely to occur to the non - breaching Party and damages will be an inadequate remedy. To the extent permitted by law, therefore, it is expressly recognized that injunctive relief and specific enforcement of this Agreement are proper and desirable remedies, and it is agreed that any claim by Permittee against City fo r an alleged breach of this Agreement shall be remedied by injunctive relief or an appropriate action for specific enforcement of this Agreement and not by a claim or action for monetary damages.

23. Entire Agreement . This Agreement and the Exhibits herein con tain the entire integrated agreement among the Parties. The Parties intend that this Agreement state their agreement in full to each and every one of its provisions. Any prior agreements, understandings, promises, negotiations or representations respecting the matters dealt with herein or the duties of any Party in relation thereto, not expressly set forth in this Agreement, are agreed by all Parties to be null and void. Notwithstanding this Section 23, the Settlement Agreement entered into between the City and Permittee dated ____________, 2025, and all terms, conditions, and obligations contained therein, remains in full force and effect, and is in no way modified or superseded by this Agreement.

24. Severability. If any term, provision, condition, or covena nt of this Agreement, or the application thereof to any Party or circumstance, shall to any extent be held invalid or unenforceable, the remainder of the instrument, or the application of such 26591

22 term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

25. Attorneys’ Fees . In the event a ny Party hereto brings an action or proceeding for a declaration of the rights of the Parties, for injunctive relief, for an alleged breach or default, or any other action arising out of this Agreement, or the transactions contemplated hereby or institutes a reference or arbitration proceeding as may expressly be permitted by the terms of this Agreement, the prevailing Party in any such action shall be entitled to an award of actual attorneys’ fees and costs incurred in such action or proceeding, without re gard to any rule of court or schedule of such fees maintained by the court, in addition to any other damages or relief awarded, regardless of whether such action proceeds to final judgment.

26. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which constitute one and the same instrument.

27. Execution of Agreement. The Parties shall sign this Agreement on or within five (5) business days of approval.

28. Estoppel Certificate. City shall, at any time and from time to time within ten (10) calendar days after receipt of written notice from Permittee so requesting, execute, acknowledge and deliver to Permittee a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement, as so modified, is in full force and effect); and (b) acknowledging that there are no uncured defaults on the part of Permittee hereunder or specify ing such defaults if any are claimed. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Site. Upon Permittee’s written request, City shall issue a certificate of performance evidencing completion of any of Permittee’s obligation(s) under this Agreement.

29. Discretion to Encumber. The Parties hereto agree that this Agreement shall not prevent or limit Permittee, in any manner, at Permittee’s sole discretion, from encumbering the Site or any portion thereof or any improvements thereon then owned by such person with any mortgage, deed of trust or other security device (“Mortgage”) securing financing with respect to the Site or such portion. City acknowledges that the lenders providing such financing may require certain modifications, and City agrees, upon request, from time to time, to meet with Permittee and/or representatives of such lenders to negotiate in good faith any such request for modification. City further agrees that it will not unreasonably withhold its consent to any such requested modification. Any mortgagee or trust deed beneficiary of the Site or any portion thereof or any improvements thereon and its successors and assigns (“Mortgagee”) shall be entitled to the following rights and privileges.
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23 30. Lender Requested Modification/Interpretation . City acknowledges that the lenders providing financing to Permittee may request certain interpretations and modifications of this Agreement. City therefore agrees upon request, from time to time, to meet with the Permittee and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. The City will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and purposes of this Agreement, provided, further, that any modifications of this Agreement are subject to the provisions of this Agreement relative to modifications or amendments.

31. Governing Law and Venue. This Agreement and the legal relations between the Parties shall be governed by and construed in accordance with the laws of the State of California. Furthermore, the Parties agree to venue in San Bernardino County, California.

32. Mutual Covenants . The covenants contained herein, including those contained in the Recitals herein, are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party.

33. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Parties. No other person or entity shall have any right of action based upon any provision of this Agreement.

34. Waiver. Failure by a Party to insist upon the strict performance of any of this Agreement’s provisions by the other party, or the failure by a Party to exercise its rights upon the default of the other Party, shall not constitute a waiver of such Party’s right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter.

35. Time of Essence . Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.

36. Recordation of Agreement . This Ag reement and any amendment or cancellation thereof shall be recorded with the County Recorder by the City Clerk within the period required by Government Code Section 65868.5.

37. Headings. The headings in this Agreement are inserted for convenience only. They d o not constitute part of this Agreement and shall not be used in its construction.

38. Waiver. The waiver by any party to this Agreement of a breach of any provision of this Agreement shall not be deemed a continuing waiver or a waiver of any subsequent breach of that or any other provision of this Agreement.

39. Jointly Drafted . It is agreed among the Parties that this Agreement was jointly negotiated and jointly drafted by the Parties and their respective counsel, and that it shall not be interpreted or construed in favor of or against any party solely on the ground 28593

24 that it drafted the Agreement. It is also agreed and represented by all Parties that said Parties were of equal or relatively equal bargaining power and that in no way whatsoever shall this Agreement b e deemed to be a contract of adhesion, or unreasonable or unconscionable.

40. Independent Legal Counsel . Each Party acknowledges that it has been represented by independent legal counsel of its own choice throughout all of the negotiations that preceded the ex ecution of this Agreement or has knowingly and voluntarily declined to consult legal counsel, and that each Party has executed this Agreement with the consent and on the advice of such independent legal counsel.

41. Further Cooperation . The Parties herein agre e to execute any and all agreements, documents or instruments as may be reasonably necessary in order to fully effectuate the agreements and covenants of the Parties contained in this Agreement, or to evidence this Agreement as a matter of public record, if required to fulfill the purposes of this Agreement. The Parties further agree to mutually cooperate with one another in carrying out the purposes of this Agreement.

42. Enforceability. This Agreement shall not become binding and shall have no force and effect whatsoever until such time as it has been fully executed by and delivered to all of the parties hereto.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Execution Date.

[Signatures on following pages]

29594

25 “CITY”
Date: ______________________, 2025

CITY OF FONTANA, CA
a California Municipal Corporation
By: ______________________________
Acquanetta Warren
Mayor
By: ______________________________
Matt C. Ballantyne
City Manager

Attest
By: ______________________________
Germaine McClellan Key
City Clerk
Approved as to form:

Best, Best & Krieger, LLP
By: _______________________________
Ruben Duran, Esq.

City Attorney

30595

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

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

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

WITNESS my hand and official seal.

Signature of Notary

31596

27 “PERMITTEE”
Date: ________________________,
2025
Catalyst - Fontana LLC, a California limited
liability company, d.b.a. Catalyst - Fontana

By: ________________________
Its: Manager, Elliot Lewis
Approved as to form:

By: _________________________
Damian Martin, Esq.

Attorney for Permittee

32597

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

STATE OF CALIFORNIA}
COUNTY OF }

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

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

WITNESS my hand and official seal.

Signature of Notary

33598

29 Development Agreement Acknowledgement and Authorization to Record

Re: Acknowledgement of Recording of Development Agreement Upon Property I acknowledge I am the owner of th e property located at 15911 S. Highland Avenue, Fontana, CA 92336 (“Property”). It is my understanding that as part of the City of Fontana Commercial Cannabis Permit process, Catalyst - Fontana LLC, a California limited liability company, dba Catalyst Font ana (“Tenant”) must enter into a Development Agreement with the City.

Pursuant to Government Code section 65868.5 a development agreement shall be recorded against real property with the county recorder. By means of this acknowledgement, I am consenting f or the foregoing Development Agreement to be recorded against the Property. I also acknowledge that all the conditions and requirements of the Development Agreement are the sole responsibility of the Tenant, and not of the undersigned owner of the Property.
“Owner”
Date: ________________________,
2025
Murray Weber Baelly and Goldie Baelly,
husband and wife, as joint tenants

By: ________________________
Murray Weber Baelly

By: ________________________
Goldie Baelly

34599

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

STATE OF CALIFORNIA}
COUNTY OF }

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

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

WITNESS my hand and official seal.

Signature of Notary

35600

31 EXHIBIT A
PARCEL NO. 022-830-101-000 DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF

FONTANA, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

LOT 13 OF TRACT NO. 3348 HIGHLAND HAVEN, IN THE CITY OF FONTANA,

COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 47 PAGES 14, 15 AND 16 O F MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING 1/2 OF ALL PETROLEUM, OIL, NATURAL GAS AND ALL OTHER

HYDROCARBONS AND MINERALS, AS EXCEPTED IN THE DEED FROM THE

ILLIANA CORPORATION, A CORPORATION TO JOHN VERNON, RECORDED JULY 3, 1953 IN BOOK 3199 PAGE 317, OFFICIAL RECORDS.
36601

32 EXHIBIT B

MAP OF THE SITE
(Current Condition)

37602

33 EXHIBIT C

OPERATING AGREEMENT

38603

OPERATING AGREEMENT FOR COMMERCIAL CANNABIS BUSINESS LOCATED

IN THE CITY OF FONTANA, CALIFORNIA
THIS OPERATING AGREEMENT (this “Operating Agreement”) for a Commercial Cannabis Business is made and entered into this __th day of _____________,2025 (“Effective Date”), by and between the CITY OF FONTANA, a California municipal corporation (“City”) and CATALYST - FONTANA LLC dba Catalyst Fontana, with its principal address located at 401 Pine Avenue, Long Beach, CA 90802, (“C ommercial Cannabis Business”). The City and Commercial Cannabis Business may be referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS
A. The City of Fontana, California (the “City”) is a municipal corporation, duly organized under the constitution and laws of the State of California.

B. The City Council adopted Ordinance No. 1899, on July 12, 2022, as amended on October 25, 2022, establishing a regulatory permit scheme for commercial cannabis activities, such that each proposed commercial activity must have an Agreement and a regulatory permit prior to operation.

C. The Commercial Cannabis Business submitted an application to the City for a use permit to conduct certain commercial cannabis business in the City, located at 15911 S Highland Avenue, Fontana, CA 92336 (“Subject Property”).

D. The City issued a Commercial Cannabis Permit to the Cannabis Business on _____________, 2025, a true and correct copy of which is attached hereto as Exhibit A, to permit cannabis retail sales at the Su bject Property, consistent with the provisions and requirements of Chapter 33 of the Fontana Municipal Code, permitting cannabis sales in the City.

E. As required by Chapter 33 of the Fontana Municipal Code, the Parties now wish to enter into this Agreement.

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

AGREEMENT

1. Incorporation of Recitals . The Recitals, and all defined terms set forth in this Agreement, are hereby incorporated into this Agreement as if set forth herein in full.

2. Public Benefit and Social Equity.

2.1 Intent. The purpose of this Agreement is to ensure positive community impacts from commercial cannabis business operations through local sourcing, community benefit and sustainable business practices, and the collection of required fees as applicable for the operation of a commercial cannabis business and to provide 39604

mitigation options to be used by City to compensate for impacts to City services, residents, and/or busines ses as set forth in Fontana Municipal Code Chapter 33. The Parties agree that this Agreement confers substantial private benefits on Commercial Cannabis Business which should be balanced by commensurate public benefits. As part of the cannabis Regulatory S afety Permit process, Commercial Cannabis Business agrees to enter into this Agreement. Commercial Cannabis Business acknowledges that City and Commercial Cannabis Business have had extensive negotiations and proceedings prior to entering into this Agreeme nt. Commercial Cannabis Business has elected to execute this Agreement as it provides Commercial Cannabis Business with important economic benefits. Accordingly, the Parties intend to provide consideration to the public to balance the private benefits conf erred on Commercial Cannabis Business by providing mitigation measures to the public and to pay for City services.

2.2 Local Hiring and Sourcing . Commercial Cannabis Business agrees to use its reasonable efforts to hire qualified City of Fontana residents, cur rently living in Fontana, to work at its commercial cannabis businesses. Commercial Cannabis Business shall also use reasonable efforts to retain the services of qualified contractors and suppliers who are located in the City of Fontana or who employ a sig nificant number of City of Fontana residents. Commercial Cannabis Business shall make a good faith effort to advertise on various social media sites, at local job fairs, and through public agencies and organizations.

3. Definitions. The following terms shall have the following meanings for purposes of this Agreement, but other terms may be defined elsewhere in this Agreement.

3.1 “Commercial Cannabis Permit” means the regulatory permit issued by the City to the Commercial Cannabis Business pursuant to the provisio ns of Chapter 33 of the Fontana Municipal Code.

3.2 “City Permits” means and includes all building permits, use permits, zoning amendments, operating agreements, development agreements, and other permits, including the cannabis business permit, licenses, entit lements, and agreements that the City, acting in its governmental capacity, must issue or approve for the Cannabis Business to operate in accordance with the City’s regulations and this Agreement.

3.3 “Commencement Date” means the date that all of the followin g have occurred: (1) the City has issued all necessary City Permits; (2) the Cannabis Business has obtained all necessary State Licenses to operate; and (3) the Cannabis Business has obtained a certificate of occupancy.

3.4 “City Manager” means the City Manager and his or her designee.

3.5 “Effective Date” means the date first entered above as the Effective Date and is the date that both Parties have signed this Agreement.

3.6 “Manager” means a person with responsibility and authority over the establishment, management, supervision, or oversight of the operation of the Commercial Cannabis Business.
40605

3.7 “State License(s)” means all licenses required to be issued by the State of California for operation of the Commercial Cannabis Business pursuant to Division 10 of the Business and Professions Code and applicable state regulations, including but not limited to Division 42 of Title 16, Division 8 of Title 3, and Division 1 of Title 17 of the California Code of Regulations (“CCR”), as those provisions may be amended.

3.8 “Term” means the period of time this Agreement is in effect as specified in Section 5.

4. Consideration. As consideration for the rights and benefits it enjoys under this Agreement, including its operation of approved cannabis uses in the City during the Term, the Commercial Cannabis Business shall pay the City fees as set forth by Resolution by the City Council.

5. Term of Agreement . Except as otherwise specified herein, the term of this Agreement (the “Term”) shall be for three (3) years from the Execution Date. The Term shall generally be subject to earlier termination or extension as hereinafter provided.

5.1 Term Extension. This Agreement shall be subject to two (2) year extensions at the sole discretion of the City. If at the sole discretion of the City, the City finds that Permittee demonstrates to have complied in good faith with the terms and conditions of this Agreement, the Parties may enter into a written extension signed by both Parties.

5.2 Request by Permittee of Term Extension. The Term of this Agreement may be ext ended at the request by Permittee by written notice no later than one hundred twenty (120) calendar days before the expiration of the term and Permittee shall not be in default with respect to any provision of this Agreement or any subsequent agreement or understanding between the Parties arising from or related to this Agreement, having received notice from City of said default per this Agreement, or if Permittee did in fact default as to this Agreement, upon notice from City, that Permittee did cure said default during the period to cure provided herein to City’s satisfaction.

5.3 Termination of Agreement. Upon the termination of this Agreement, either by expiration or otherwise, Permittee shall have no right to engage in Commercial Cannabis Activity at the Pr oject Site, except as may otherwise be allowed by City ordinance or law.

6. Business License Required. A valid City of Fontana Business License is required for all persons engaged in transacting and carrying on any commercial cannabis business activity in the City of Fontana. It is unlawful for any person or legal entity to commence, transact or carry-on cannabis business activity in the City of Fontana without first having procured a City of Fontana cannabis business license.

7. Bond Requirement. Commercial Cannabis Business shall provide proof of a bond in the amount of Twenty -Five Thousand Dollars ($25,000.00) to cover the cost of enforcing the terms of Chapter 33 and this Agreement if necessitated by a violation of the licensing requirements.
41606

8. Records and Recordkeeping.

8.1 Commercial Cannabis Business shall maintain accurate books and records in an electronic format, detailing all of the revenues and expenses of the business, and all of its assets and liabilities. On no less than an annual basis, or at any time upo n reasonable request of the City, Commercial Cannabis Business shall file a sworn statement detailing the Commercial Cannabis Business’s revenue and number of sales during the previous 12 -month period (or shorter period based upon the timing of the request), provided on a per-month basis. The statement shall also include gross revenues for each month, and all applicable taxes paid or due to be paid. On an annual basis, Commercial Cannabis Business shall submit to the City a financial audit of the Commercial Cannabis Business operations conducted by an independent certified public accountant. Each permittee shall be subject to a regulatory compliance review and financial audit as determined by the City.

8.2 Commercial Cannabis Business shall maintain a current re gister of the names and the contact information (including the name, address, and telephone number) of anyone owning or holding an interest in the Commercial Cannabis Business, and separately of all the officers, managers, employees, agents and volunteers currently employed or otherwise engaged by the Commercial Cannabis Business. The register required by this paragraph shall be provided to the City upon request.

8.3 All records collected by Commercial Cannabis Business shall be maintained for a minimum of seven years and shall be made available by the Commercial Cannabis Business to the agents or employees of the City upon request, except that private medical records shall be made available only pursuant to a properly executed search warrant, subpoena, or court order.

8.4 Subject to any restrictions under the Health Insurance Portability and Accountability Act (HIPAA) regulations, Commercial Cannabis Business shall allow City officials to have access to the business’s books, records, accounts, together with any other data or documents relevant to its permitted commercial cannabis activities, for the purpose of conducting an audit or examination. Books, records, accounts, and any and all relevant data or documents will be produced no later than 24 hours after receipt of the City’s request, unless otherwise stipulated by the City. The City may require the materials to be submitted in an electronic format that is compatible with the city’s software and hardware.

9. Records Inspection, Examination and Audit . Commercial Canna bis Business acknowledges and agrees that City is empowered under this Agreement to inspect, examine and audit Commercial Cannabis Business’s books and records (including tax filings and returns). City or its authorized agents shall have the power and auth ority to conduct a full inspection, examination and audit of such books and records (including tax filings and returns) at any reasonable time, including but not limited to, during normal business hours. In the event any such books, records, tax filings an d returns cannot be made fully available within the City of Fontana, Commercial Cannabis Business acknowledges and agrees that it shall reimburse City for the cost of all transportation, 42607

lodging, meals, portal-to-portal travel time, and other incidental costs reasonably incurred by City or its authorized agents in obtaining said full inspection, examination and audit. In the event that said records inspection, examination and audit determines that a net operating agreement or development agreement fee payme nt deficiency of greater than five percent (5%) exists; Commercial Cannabis Business acknowledges and agrees that it shall reimburse City for the full cost of said records inspection, examination and audit reasonably incurred by City or its authorized agents.

10. General Terms and Conditions. The Commercial Cannabis Business shall comply with all of the following terms and conditions for the Term of this Agreement:

10.1 This Agreement is only valid for the Commercial Cannabis Business to operate at the Subject Prope rty identified in this Agreement. The rights and obligations set forth in this Agreement shall not be transferred, assigned, or assumed unless agreed to in advance in writing by the City. The Commercial Cannabis Business expressly acknowledges, understands and agrees that nothing in this Agreement confers any ongoing vested property right or entitlement to conduct the Commercial Cannabis Business, or any other commercial cannabis activity, at the Subject Property; this Agreement sets forth only the operatio nal requirements of the Commercial Cannabis Business as otherwise approved by the City and the Commercial Cannabis Business will be required to obtain a permit in accordance with Chapter 33 of the Fontana Municipal Code which the City shall issue in accordance with this Agreement.

10.2 Conditions placed on any City Permits, expressly including the Commercial Cannabis Business Permit shall be conditions and requirements of this Agreement.

Violations of the City Permits shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement. Violations of any applicable State Licenses shall be deemed violations of this Agreement and shall constitute a material breach of this Agreement.

10.3 The Commercial Cannabis Business shall obtain and maintain at all times a valid Commercial Cannabis Permit, Use Permit, and applicable State License(s) prior to and during operation of the Cannabis Business. The City shall issue a Commercial Cannabis Permit and any other City Permits to the Commercial Can nabis Business provided that the Cannabis Business is in compliance with the provision of Chapter 33 of the Fontana Municipal Code and State Law.

10.3.1 As soon as practicable, the Commercial Cannabis Business shall inform the City when it obtains its necessary State License(s) and shall provide a copy of the State License(s) to the City Manager. The City shall cooperate with the Commercial Cannabis Business as appropriate and as needed to facilitate the State’s issuance of a State License(s) to the Commercial Can nabis Business. Failure of the Commercial Cannabis Business to procure and produce evidence of receipt of any required state licenses within eighteen months of the effective date of this Agreement shall be deemed a material and incurable breach of the Agre ement and, this Agreement, along with any permits issued by the City for a Commercial Cannabis Business shall immediately be deemed null and void and the Commercial Cannabis Business shall be prohibited from 43608

application for a future Commercial Cannabis Bus iness permit in the City for a period of ten (10) years.

10.3.2 The Commercial Cannabis Business agrees to provide City with copies of any reports provided to a State Cannabis Licensing Agency, including any required financial or compliance reports, within thirty (30) days of that submission and further agrees to keep such records in accordance with State law and Chapter 33 of the Fontana Municipal Code.

10.3.3 The City shall diligently process the Commercial Cannabis Business’s applications for all City Permits. This Agreement commits the City in advance to approve the City Permits provided that the Commercial Cannabis Business complies with all the provisions of Chapter 33 of the Fontana Municipal Code and the requirements to obtain City Permits. Nothing in this Agreeme nt relieves the Commercial Cannabis Business of the obligation to comply with all requirements of the Fontana Municipal Code.

10.4 The Commercial Cannabis Business agrees to comply with all applicable State Law and local laws and regulations applicable to opera tion of the Commercial Cannabis Business, including Chapter 33 of the Fontana Municipal Code.

10.5 The Commercial Cannabis Business agrees to conduct an annual financial audit and/or compliance review, at Commercial Cannabis Business’s cost, as requested by the City.

11. Operational Requirements . In addition to all operating requirements set forth in Chapter 33 of the Fontana Municipal Code, the Commercial Cannabis Business shall comply with the following specific operational requirements:

11.1 The Commercial Cannabis Bu siness shall immediately notify the Fontana Police Department of any criminal activity, or suspected criminal activity, occurring at the Subject Property. In the event of any internal security system breach, including a faulty alarm system, broken or damag ed surveillance cameras or other video recording equipment, or broken or damaged locks, doors, or lighting which may increase risk of criminal activity at the Subject Property, the Manager of the Commercial Cannabis Business shall notify the City Police De partment as soon as practicable after becoming aware of the security system breach. The Commercial Cannabis Business shall diligently attempt to fix or resolve any such security breach immediately; if circumstances require additional time and delay to reme dy, the Commercial Cannabis Business shall so notify the City Police Department and provide an estimated timeline the security breach will be cured.

11.2 If the Commercial Cannabis Business receives any criminal threats, or otherwise suspects any criminal targeting related to movement of product or cash from or to the Subject Property, the Commercial Cannabis Business shall immediately notify the City Police Department.

11.3 Commercial Cannabis Business shall abide by the operating procedures submitted to the City, as set forth in Section 33-8(a)(8) and that are hereby attached and 44609

incorporated into this Agreement as Exhibit B. The Commercial Cannabis Business shall immediately notify City of any modifications to the operating procedures.

11.4 Commercial Cannabis Business shall abide by the operating requirements set forth in Sections 33 -29, 33 -30 and 33 -31, including but not limited to, hours of operation not to exceed 9:00 am to 9 :00 pm, no consumption of cannabis on premises, no cannabis or cannabis products shall be visible from exterior of property, and no persons under 21 years (or 18 years if such person is a customer of the Commercial Cannabis Business and is in possession of a valid physician's recommendation, a valid county-issued medical marijuana identification card, or be a Primary Caregiver, as defined in Sections 11362.7(d) or 11362.5(e) of the California Health and Safety Code, with a valid physician's recommendation for the patient) shall be allowed on the premises.

The provisions of Sections 33 -29, 33 -30 and 33 -31 shall be strictly enforced by Commercial Cannabis Business.

11.5 Commercial Cannabis Business shall abide by the requirements of Development Agreement.

12. Inspections.

12.1 The city manager, police chief, fire marshal, code compliance representative and their designees charged with enforcing the provisions of the Fontana Municipal Code may enter the Commercial Cannabis Business at any time during regular business hours, w ithout notice, and inspect the location of the Commercial Cannabis Business as well as any recordings and records required to be maintained pursuant to this chapter or under applicable provisions of state law.

12.2 It is unlawful for any person having responsib ility over the operation of the Commercial Cannabis Business, to impede, obstruct, interfere with, or otherwise not to allow, the City to conduct an inspection, review or copy records, recordings or other documents required to be maintained by the Commerci al Cannabis Business under Chapter 33 or under state or local law. It is also unlawful for a person to conceal, destroy, deface, damage, or falsify any records, recordings or other documents required to be maintained by the Commercial Cannabis Business und er Chapter 33 or under state or local law.

13. Default and Termination for Cause. Without prejudice to its other remedies at law or in equity, the City may terminate this Agreement for cause with thirty (30) days’ written notice to Commercial Cannabis Business provided that Commercial Cannabis Business does not cure as set forth in section 13.7 below. Caused as used in this section is defined as:

13.1 Failure to comply with the terms of the City of Fontana Commercial Cannabis Permit issued to Commercial Cannabis Business by City;

13.2 Failure of Commercial Cannabis Business to maintain a valid active City of Fontana Business License as the commercial cannabis business approved by the Commercial Cannabis Permit and as operating;
45610

13.3 Failure by Commercial Cannabis Business to a ccurately report gross receipts information or other data necessary for City to calculate/confirm operating or development agreement fees;

13.4 Failure by Commercial Cannabis Business to pay operating agreement fees and related reimbursement costs within thirty (30) days of the date those fees are due;

13.5 Failure by Commercial Cannabis Business to cooperate with City or City’s authorized agents in any inspection, examination and audit of Commercial Cannabis Business’s commercial cannabis business books and records (including tax filings and returns).

13.6 This Agreement will automatically terminate if:

13.6.1 Commercial Cannabis Business’s Commercial Cannabis Permit is revoked by City or is not renewed by City, or

13.6.2 Commercial Cannabis Business transfers its Commercial Cannabis Permit in violation of Fontana Municipal Code section 33-15.

13.7 Cure Period. Commercial Cannabis Business shall cure the default resulting from the cause for termination within thirty (30) days of the date of the notice of termination. If Commercial Cannabis B usiness fails to cure the default within thirty (30) days of the date of the notice of termination for cause, this Agreement will be terminated.

14. Termination.

14.1 The Commercial Cannabis Business may terminate this Agreement prior to expiration of the Term for the reasons and subject to the requirements set forth below.

The Commercial Cannabis Business understands and acknowledges that the right to operate the Commercial Cannabis Business is expressly contingent on full compliance with Chapter 33 of the Fontana Municipal Code. As such, termination of this Agreement shall result in the immediate termination of the Commercial Cannabis Business’s operations, unless and until a new Operating Agreement is executed by the Parties.

14.2 Commercial Cannabis Business’s Termina tion Rights . The Commercial Cannabis Business may, at any time and in its sole discretion, effective thirty (30) days after the Commercial Cannabis Business provides written notice of termination to the City.

Such termination shall not relieve Commercial Cannabis Business of any outstanding or previously incurred liability, payment, or obligation to City. All fees due pursuant to the Commercial Cannabis Permit, this Operating Agreement or any Development Agreement between the Parties shall immediately be due and payable.

15. Indemnification.

15.1 Commercial Cannabis Business shall defend (with Counsel reasonably approved by the City), indemnify, and hold harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from and aga inst any and all 46611

actual and alleged liabilities, demands, claims, losses, damages, injuries, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and attorney’s fees), which arise out of, or which are in any way related to i) the cannabis business permit and any land use entitlement related thereto, ii) the proceedings undertaken in connection with the approval, denial, or appeal of the cannabis business permit and any land use entitlement related thereto, iii) any subsequent approvals or licensing/permits relating to the cannabis business permit and any land use entitlement related thereto, iv) the processing of the cannabis business permit and any land use entitlement related thereto, v) any amendments to the approvals for the cannabis business permit and any land use entitlement related thereto, vi) the City’s approval, consideration, analysis, review, issuance, denial or appeal of the cannabis business permit; vii) the City’s approval, consideration, analysis, review, issuance, denial or appeal of any land use entitlement related thereto, viii) the City’s drafting, adoption and passage of an ordinance, and related resolutions, policies, rules and regulations, allowing for cannabis businesses, ix) the City’s drafting, adoption and passage of an ordinance, and related resolutions if necessary in the future regarding any zoning law amendment(s) related to Commercial Cannabis Business, x) the operation of Commercial Cannabis Business or activity, xi) the proce ss used by the City in making its decision to approve, consider, analyze, review, issue, or deny, my cannabis business permit or any related land use entitlement, or the appeal of either, xii) City’s compliance or failure to comply with applicable laws and regulations or xiii) the alleged violation of any federal, state or local laws by Commercial Cannabis Business or any of its officers, employees or agents, except where such liability is caused by the sole negligence or willful misconduct of the City.

15.2 City may (but is not obligated to) defend such challenge as City, in its sole discretion, determines appropriate, all at applicant’s sole cost and expense. Commercial Cannabis Business shall bear any and all losses, damages, injuries, liabilities, costs, and expenses (including, without limitation, staff time and in-house attorney’s fees on a fully- loaded basis, attorney’s fees for outside legal counsel, expert witness fees, court costs, and other litigation expenses) arising out of or related to any challenge (“Costs”), whether incurred by Commercial Cannabis Business, City, or awarded to any third party, and shall pay to the City upon demand any Costs incurred by the City.

15.3 Commercial Cannabis Business shall fund a deposit account (“Fund”) to reimburse the Cit y’s cost, including attorney’s fees, to defend any claim, action, or proceeding that is or may be subject to the agreement on limitations of City’s Liability, and Certifications, Assurances Warranties, and Indemnification to City. In the event that any suc h claim, action, or proceeding is filed against the City, Commercial Cannabis Business shall within thirty (30) days of the filing deposit an initial sum of $25,000 to the Fund to reimburse Commercial Cannabis Business’ portion of the City defense costs, as determined by the City in its sole discretion. The Fund, once established, shall at all times, until conclusion of the claim, proceedings, or action, contain an amount necessary to cover not less than three months’ worth of budgeted expenditures by the C ity relating to the City’s defense of the claim, action, or proceeding, including all time to appeal, or as long as expenditures made by the City relating to its defense remain unreimbursed, whichever is later. The City may, from time to time, in the City’ s sole and absolute 47612

discretion, request additional deposits from the Commercial Cannabis Business to ensure the fund balance is adequate to defend any claim, action or proceeding, including appeals related thereto. Once all remaining and outstanding reimbu rsements have been paid to the City by Commercial Cannabis Business, and upon resolution of the claim, proceeding or action, City shall return any remaining unused portion of deposit.

15.4 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

16. Waiver, Release and Hold Harmless

16.1 Commercial Cannabis Business hereby waives, releases, and holds harmless the City of Fontana (“City”) and its Council, boards and commissions, officers, officials, employees, an d agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses which arise out of, or which are in any way relate to my application for a cannabis business permit, the issuance of the cannabis business permit, the process used by the City in making its decision, the enforcement of the conditions of the cannabis business permit, or the cannabis business’ operations.

16.2 Commercial Cannabis Business hereby waives, releases an d holds harmless the City and its Council, boards and commissions, officers, officials, employees, and agents from any and all actual and alleged claims, losses, damages, injuries, liabilities, costs (including attorney’s fees), suits or other expenses whi ch arise out of, or which are in any way relate to: (1) any repeal or amendment of any provision of the Fontana Municipal Code or Zoning Ordinance relating to commercial cannabis activity; or (2) any investigation, arrest or prosecution of Commercial Cannabis Business, or the cannabis business’ owners, operators, employees, clients or customers, for a violation of state or federal laws, rules or regulations relating to cannabis activities.

16.3 The provisions of this subsection shall survive any termination or expiration of this Agreement for any reason.

17. Notice. Any notice or other communication provided pursuant to this Agreement must be in writing and shall be considered properly given and effective only when mailed or delivered in the manner provided by this S ection to the persons identified below. A mailed notice or other communication shall be considered given and effective on the third day after it is deposited in the United States Mail (certified mail and return receipt requested). A notice or other communication sent in any other manner will be effective or will be considered properly given when actually delivered. A Party may change its address for these purposes by giving written notice of the change to the other Party in the manner provided in this Section.
48613

If to City: City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
Attention: City Manager

With copy to: Best, Best & Krieger, LLP, City Attorney

2855 E. Guasti Rd.

Suite 400 Ontario, CA 91761
Attention: Ruben Duran, Esq.

If to Permittee: Catalyst - Fontana LLC
401 Pine Avenue
Long Beach, CA 90802
Attention: Compliance

With copy to: Anthony Almaz, Esq.
401 Pine Avenue
Long Beach, CA 90802

17.1 “Force Majeure Event” means a cause of delay that is not the fault of the Party who is required to perform under this Agreement and is beyond that Party’s reasonable control, including the elements (such as floods, earthquakes, windstorms, and unusually severe weather), fire, energy shortages or rationing, riots, acts of terrorism, war or war-defense conditions, acts of any public enemy, epidemics, pandemics, the actions or inactions of any governmental entity (excluding the City) or that entity’s agents, including any “stay at home” or “safer at home” and/or any other governmental order requiring the Commercial Cannabis Business to temporarily cease operations, litigation, labor shortages (including shortages caused by strikes or walkouts), and materials shortages.

17.2 Except as otherwise expressly provided in this Agreement, if the performance of any act required by this Agreement to be performed by either the City or Commercial Cannabis Business is prevented or delayed because of a Force Majeure Event, then the time for performance shall be extended for a period equivalent to the period of delay, and performance of the act during the period of delay will be excused.

18. Waiver. A Party’s failure to insist on strict performance of this Agreement or to exercise any right or remedy upon the other Party’s breach of this Agreement shall not constitute a waiver of any performance, right, or remedy. A Party’s waiver of the other Party’s breach of any provision in this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision. A waiver is binding only if set forth in writing and signed by the waiving Party.

19. Relationship of Parties . This Agreement does not create any employment relationship, ownership interest, or other association between the City and Commercial 49614

Cannabis Business. Nothing herein shall be construed to create the relationship of principal and agent, partnership or other joint venture between the City and Commercial Cannabis Business.

20. Attorneys’ Fees. The Party prevailing in any litigation concerning this Agreement, the Subject Property, or the Commercial Cannabis Business operations, shall be entitled to an award by the court of reasonable attorneys’ fees and litigation costs. If the City is the prevailing party, then this Section shall apply whether the City is represented in the litigation by the designated City Attorney or by outside counsel.

21. Jurisdiction and Venue. This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that San Bernardino County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement.

22. Severability. If a court with competent jurisdiction finds any provision of this Agreement to be invalid, void, or unenforceable, then the remaining provisions shall remain in full force and effect, and to this end this Agreement shall be severable.

23. Counterparts. The Parties may execute this Agreement in counterparts, each of which shall constitute an original, but all of which shall collectively constitute this same Agreement.

24. Disclaimer. Despite California’s commercial cannabis laws a nd the terms and conditions of this Agreement or any Commercial Cannabis Permit issued pertaining to Commercial Cannabis Business or the hereinabove specified property location, California commercial cannabis cultivators, transporters, distributors, cannab is testing facility/laboratory businesses or possessors may still be subject to arrest by federal officers and prosecuted under federal law. The Federal Controlled Substances Act, 21 USC § 801 et seq., prohibits the manufacture, manufacturing, and possession of cannabis without any exemptions for medical or non-medicinal use.

25. Integration and Modification . This Agreement sets forth the Parties’ entire understanding and agreement regarding the matters addressed herein. This Agreement supersedes all prior or contemporaneous agreements, representations, and negotiations (written, oral, express, or implied) and may be modified only by written agreement signed by both Parties.

IN WITNESS WHEREOF, the parties enter into this Agreement as of the Effective Date.

City of Fontana Catalyst - Fontana LLC

50615

By: By:

City Manager Elliot Lewis, Manager
Dated: , 2025 Dated: , 2025

Approved as to Form Fontana
City Attorney

By:

City Attorney

51616

NOTICE OF EXEMPTION
ATTACHMENT NO. 3
TO: Clerk of the Board of Supervisors
County of San Bernardino
385 N. Arrowhead Avenue, 2nd Floor
San Bernardino, CA 92415-0130
FROM: City of Fontana
Planning Department
8353 Sierra Avenue
Fontana, CA 92335

1. Project Title: Master Case No. (MCN) 24-0076 and Development Agreement No. (AGR) 24- 006

2. Project Location - Specific: 15911 Highland Avenue, S outheast corner of Highland Avenue and Catawba Avenue (APN: 0228-830-01)

3. (a) Project Location - City: Fontana, CA 92336
(b) Project Location - County: San Bernardino

4. Description of nature, purpose, and beneficiaries of Project: Development Agreement with Catalyst- Fontana, LLC which has a term of 3 years, with 2 year extension periods, will grant rights to develop and operate a commercial cannabis business at the Project site, subject to all applicable laws and regulations.

4. Name of Public Agency approving project: City of Fontana

5. Name of Person or Agency carrying out project: Catalyst - Fontana, LLC 401 Pine Avenue
Long Beach, CA 90802

6. Exempt status: (Check one)
(a) _____ Ministerial project.
(b) _____ Not a project.
(c) _____ Emergency Project.
(d) __X__ Categorical Exemption. State type and class number: Exempt under Section 15301 (Class No. 1 – Existing Facilities) of the California Environmental Quality Act and Sections No. 3.22 (Categorical Exemption) of the 2019 Local Guidelines for Implementing CEQA.
(e) _____ Declared Emergency.
(f) _____ Statutory Exemption. State Code section number: _______________________ (g) _____ Other. Explanation: _______________________________________________ Reason why project was exempt: The whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from the California Environmental Quality Act (“CEQA”) per State CEQA Guidelines Section 15301, Existing Facilities, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building and only making minor interior improvement.

7. Contact Person: Mai Thao, Assistant Planner Telephone: (909) 350-6650

Date Received for Filing: __________________________________ Salvador Quintanilla
Senior Planner
(Clerk Stamp Here)
52617

NOTICE OF PUBLIC HEARING AND

OF INTENT TO MAKE A CEQA EXEMPT FINDING
SI DESEA INFORMACION EN ESPAÑOL REFERENTE A ESTA NOTIFICACION O PROYECTO, FAVOR DE COMUNICARSE AL (909) 350-6728.

In compliance with Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the agenda will be made available in appropriate alternative formats to persons with a disability. Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350-7602. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE PLANNING COMMISSION OF THE CITY OF FONTANA FOR THE FOLLOWING:

Resolution No. PC 2024 -______: A Resolution of the Planning Commission of the City of Fontana, California, Recommending, Pursuant to an Exemption from the California Environmental Quality Act, that the City Council Approve a Development Agreement with Catalyst - Fontana, LLC, Concerning a Retail Cannabis Business, and Direct Staff to File a Notice of Exemption.

General Project
Description:

A Development Agreement that has a term of 3 years, subject to 2 -year extension periods, that, in consideration of the City’s approval of cannabis retail sales, provides for payment by the operator to the City a percentage of gross receipts of the business and other communities benefits.

Environmental
Determination:

The whole of the Project, including the Development Agreement, has been reviewed and found to be exempt from the California Environmental Quality Act (“CEQA”) per State CEQA Guidelines Section 15301, Existing Facilities, as the cannabis retail use will be located in an existing commercial facility with no proposed expansion to the building and only making minor interior improvement.

Date of Hearing: November 19, 2024
Place of Hearing: City Hall Council Chambers, 8353 Sierra Avenue, Fontana, CA, 92335 Time of Hearing: 6:00 P.M.

Project Location: 7 15911 Highland Avenue (APN:0228-301-01) ATTACHMENT NO. 4
53618

A draft copy of the proposed Development Agreement is available for public inspection at the office of the Fontana City Clerk, City Hall Council Chambers , 8353 Sierra Avenue, Fontana, CA, 92335.

Should you have any questions concerning this project, please contact Mai Thao at (909) 350- 6650 or [email protected].

ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE T O THE PLANNING COMMISSION . A COPY OF THE RESOLUTION AND ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.

IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING ITEM,

YOU MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SOMEONE ELSE RAISED AT

THE PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.

Publish: November 8, 2024

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620
621
622
Excerpt of the Planning Commission Meeting Minutes of November 19, 2024 Public Hearing Item B
ATTACHMENT NO. 4