Fontana City Council
September 8, 2026

2026 Local Agency Biennial Notice

Name of Agency:

Mailing Address:

Contact Person: Phone No.

Email: Alternate Email:

Accurate disclosure is essential to monitor whether officials have conflicts of interest and to help ensure public trust in government. The biennial review examines current programs to ensure that the agency’s code includes disclosure by those agency officials who make or participate in making governmental decisions.

This agency has reviewed its conflict of interest code and has determined that (check one BOX):

An amendment is required. The following amendments are necessary:
(Check all that apply.)
Include new positions
Revise disclosure categories
Revise the titles of existing positions
Delete titles of positions that have been abolished and/or positions that no longer make or participate in making governmental decisions
Other (describe)
The code is currently under review by the code reviewing body.

No amendment is required. (If your code is over five years old, amendments may be necessary.)

Verification (to be completed if no amendment is required)

This agency’s code accurately designates all positions that make or participate in the making of governmental decisions. The disclosure assigned to those positions accurately requires that all investments, business positions, interests in real property, and sources of income that may foreseeably be affected materially by the decisions made by thos e holding designated positions are reported. The code includes all other provisions required by Government Code Section 87302.

__________________________________________ _________________________ Signature of Chief Executive Officer Date

All agencies must complete and return this notice regardless of how recently your code was approved or amended. Please return this notice no later than October 1, 2026, or by the date specified by your agency, if earlier, to:

(PLACE RETURN ADDRESS OF CODE REVIEWING BODY HERE)

PLEASE DO NOT RETURN THIS FORM TO THE FPPC.
445
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1239 Agenda Date: 9/8/2026
Agenda #: V. Category: Consent Calendar
FROM:

Police Department
SUBJECT:

Approve Purchase of Closure Intelligence AI Software
RECOMMENDATION:

1. Authorize the purchase and installation of the Closure Intelligence AI Software.

2. Approve the Sole Source Purchasing method under the Purchasing Policies and Procedure Manual Section 3.1.5 Non-Competitive Proposal - Single/Sole Source for Fontana Police Department to purchase AI software from Closure Intelligence, Inc.

3. Approve and authorize the City Manager or his assigned designee to enter into documents related to the purchase of Closure Intelligence, Inc. AI software.

COUNCIL GOALS:
· Operate in a businesslike manner by improving services through the effective use of technology.
· Practice sound fiscal management by living within our means while investing in the future.

DISCUSSION:

Major shifts in the information technology landscape over the past two decades have made the collection and analysis of evidence an increasingly important tool for solving crimes and preparing court cases. More and more hi-tech devices are being developed and used for law enforcement purposes. These devices can help law enforcement officers resolve dangerous situations, locate and arrest suspects, gather evidence, solve crimes and protect themselves and the public more effectively.

Artificial intelligence in law enforcement refers to the use of AI-driven technologies to help investigators organize, analyze, and connect large volumes of information in order to identify leads, uncover patterns, and assist in bringing investigations to resolution more efficiently. These systems can rapidly process reports, digital evidence, body-worn camera footage, license plate reader data, social media content, and other investigative information to support informed decision-making. While AI can enhance investigative efficiency and improve data analysis capabilities, it is intended to assist- not replace-the judgment, discretion, and constitutional responsibilities of law enforcement personnel.

Closure is an AI-powered investigative analysis platform designed specifically for law enforcement, prosecutors, and investigators. Its primary purpose is to help agencies manage and analyze massive City of Fontana Printed on 9/3/2026Page 1 of 2
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File #: 26-1239 Agenda Date: 9/8/2026
Agenda #: V. Category: Consent Calendar
amounts of digital evidence faster and more efficiently.

Some key capabilities include transcribing audio and video evidence, translation of multilingual evidence, analyzing large volumes of data, lead and connection identification. The company states the platform is designed around Criminal Justice Information Systems (CJIS) compliance, role-based access controls, encryption, and restricted access to sensitive law enforcement data.

In summary, Closure is an AI-powered digital investigative analyst designed to help law enforcement agencies securely organize, search, transcribe, translate, and analyze large volumes of digital evidence. The platform assists investigators in identifying leads, uncovering connections, and accelerating case resolution while maintaining human oversight and investigative discretion.” The Closure Intelligence Platform License (software subscription) service agreement has been reviewed by staff and the City Attorney’soffice and a draft agreement is attached to this agenda item for reference.

This procurement method is allowed per the City’s Purchasing Policies and Procedures Manual, Section 3.1.5 Non-Competitive Proposal when no competitive advantage would be gained or the services are unique and are only available from one source.

FISCAL IMPACT:

The fiscal impact associated with this request is $375,000 and is not included in the current fiscal year budget. Funding is requested from the Asset Seizure Fund (223) to cover the purchase of the software, implementation, and configuration services, including a three-year service agreement.

Appropriate budget adjustments will be incorporated into the FY 2026-2027 quarterly budget adjustments.

Six months prior to the expiration of the agreement, the Police Department (PD) will conduct a funding and operational assessment to determine long-term funding options. If continued use of the software is recommended, General Fund (101) resources may be requested to support ongoing costs. The PD will also continue to pursue alternative funding opportunities to minimize reliance on the General Fund.

MOTION:

Approve staff recommendation.

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CLOSURE INTELLIGENCE

ORDER FORM

CUSTOMER NAME: Fontana Police Department (“Customer”)

OFFER VALID THROUGH: Aug 31, 2026

This Order Form (“Order Form”) is subject to terms of the Platform Services Agreement between Customer and Closure Intelligence, Inc. (“Closure”) dated _____________ (the “Services Agreement”). Capitalized terms used but not defined in this Order Form will have the meanings assigned to them in the Services Agreement.

Customer Order Contact:

Contact Name: Captain Angela Stover
Contact Email: [email protected]
Contact Phone: 9093567134

Billing Information:

Billing Email: [email protected]

SERVICES
Please select and initial one of the following Subscription Term options for the Closure Intelligence Platform License.

Service

Annual
Price

Subscription
Term

Total Value

Closure Intelligence Platform License $125,000
$280,000 3 Years $375,000
$840,000
Implementation & Configuration
Services**
$0
$75,000 N/A N/A
White Glove Training & Support $0
$50,000 N/A N/A

Definitions
● “Subscription Term” means a three (3) year service term in its entirety based on the agreed to prices quoted herein.
16498.00006\45376828.1
Contact Name: City of Fontana Police Department
Billing Address:
17005 Upland Avenue Fontana, CA
92335
2026-08-25
448

● “Implementation & Configuration Services” means the initial one-time setup and integration of the Closure Intelligence Platform for Customer, which may include, as requested and mutually agreed upon in writing, support for single sign-on (SSO), integrations with third-party platforms or internal systems, and related project management. Customer agrees to provide commercially reasonable participation and cooperation necessary to enable delivery of the Implementation & Configuration Services. Payment for Implementation & Configuration Services is due as specified in this Order Form and is non-cancelable.

● “White Glove Training & Support” includes the following:
○ Engineering Access: Direct, priority communication channel to the Closure engineering team for escalated issues and advanced troubleshooting. ○ Training & Onboarding: Training and onboarding session for Customer’s Users, conducted at Customer’s location or over video teleconferencing. ○ Training Resources: Unlimited access to Closure’s training content, documentation, and learning center resources for Customer and its designated Users.
○ Feature Previews: Early access to new, breaking product features and enhancements prior to general release.

Payment
● Discounts reflect Customer’s Design Partner Status. Renewals of this Order Form after the first Subscription Term will be subject to Closure’s then-current price for the Service. ● The fees set forth in this Order Form do not include any amounts that might be charged to Customer or Closure by Customer’s other vendors and services providers (e.g., API usage fees for an integrated service) or any amounts that might be incurred by Closure in connection with meeting any additional Customer requirements or providing any services or resources not expressly set forth in the Agreement (e.g., additional insurance coverage) (collectively, all such amounts, “Additional Charges”).

Service Allotments
● During the Subscription Term, Services shall include the following allotments:
o Eighteen thousand (18,000) hours of audio and/or video processing o Two million (2,000,000) pages of document processing
o Four million (4,000,000) images of linked media files ● Closure shall notify the Customer Order Contact in writing (which may include email) when Customer reaches any of the following allotments.
o Fifty percent (50%) of any allotment, and again upon
o Eighty percent (80%) of any allotment, and again upon o Full usage (100%) of any included allotment.
● Customer shall not be obligated to pay any overage charges incurred prior to the delivery of the applicable notices.
● Customer will have the option (via executed amendment to this Order Form) to purchase a service allotment increase (the “Allotment Increase”) that will increase the annual service allotments for the current term year by:
o Four thousand (4,000) hours of audio and/or video processing o One million (1,000,000) pages of document processing
o One million (1,000,000) images processed
Each Allotment Increase will increase the prevailing Annual Price by 10% for the current term year (with no proration). The Customer may purchase multiple Allotment Increases. 16498.00006\45376828.1
449

● If Customer does not purchase an Allotment Increase, and usage exceeds the included allotments, the excess shall be charged at the following rates for the remainder of the year:
o Two dollars and fifty cents ($2.50) per hour of audio and/or video processing o Two cents ($0.02) per page of documents processed
o Two cents ($0.02) per image processed
● All executed Order Forms are non-cancelable, except as expressly provided in this Order Form or the Services Agreement.

Other Terms:
● By signing this Order Form, Customer orders from Closure the Services described in this Order Form.
● In the event of a conflict between this Order Form, as executed by Customer and Closure, and a provision of the Services Agreement, the Order Form will control. Any changes made to this Order Form other than the execution of the signature block will be null and void and of no effect. No terms, provisions, or conditions of any purchase order will have any effect on the obligations of the parties under or otherwise modify this Order Form or the Services Agreement.
● This Order Form is effective as of the date of last signature below (the “Order Effective Date”).

Fontana Police Department
By:

Michael Dorsey
Title: Chief of Police
Date: 08/25/26

Closure Intelligence, Inc.

By:

Alex Carter
Title: Head of Business Operations
Date: 08/25/26

16498.00006\45376828.1
Michael Dorsey
450
Closure Intelligence, Inc.

Platform Services Agreement

This Platform Services Agreement (together with all Orders, the “Agreement”) is between Closure Intelligence, Inc. (“Closure”) and Fontana Police Department (“Customer”) and is effective as of (the “Effective Date”). This Agreement allows Customer and its Affiliates to purchase access to certain of Closure’s services as specified under one or more Orders. Certain capitalized terms are defined in Exhibit A and others are defined contextually in this Agreement.

Agreed as of the Effective Date by each party’s authorized representative:

Customer
Fontana Police Department
17005 Upland Avenue
Fontana, CA 92335

Closure
169 Madison Ave
STE 15345
New York, NY 10016

Signature

Michael Dorsey
Print Name

Chief of Police
Title

Primary Contact: Angela Stover
Primary Contact #: 9093567134
Email:[email protected]

Signature

Alex Carter
Print Name

Head of Business Operations
Title

Primary Contact: Alex Carter
Primary Contact #: 6508339753
Email: [email protected]

1. Services

1.1. Services can be purchased pursuant to Orders. During a Subscription Term, Customer may access and use the Services only for its internal purposes in accordance with the Documentation, this Agreement, and any limitations set forth in the applicable Order.

1.2. Closure will provide standard support and maintenance to Customer for the Service at no charge. In the event of a non-standard support and/or maintenance request by Customer, Closure shall notify Customer in writing (email acceptable) that such request is non-standard and shall communicate to Customer the current applicable rate. Upon Customer's written acceptance, Closure shall provide such non-standard support and maintenance for the Service at the current applicable rates.

2. Data

2.1. Use of Customer Data. Customer grants Closure the non-exclusive right, sublicensable to Closure’s Third-Party processors or subcontractors solely as necessary for them to perform the Services on Closure’s behalf, to use, copy, store, disclose, transmit, transfer, display, and modify Customer Data only as necessary to: (a) provide the Services; (b) derive or generate Product Data; and (c) as otherwise required by Laws or as agreed to in writing between the parties. Customer agrees and acknowledges that Closure may also Process log-in credentials and related information of Users in connection with Closure’s provision of the Services. Closure may not use identifiable 16498.00006\45376828.1
Michael Dorsey 451

Customer Data for purposes beyond providing the contracted services without the Customer's prior written approval. Closure shall refrain from using Customer’s name, logo, or identifiable information, such disclosure shall be allowed only upon receiving prior approval in writing from the City of Fontana Information Technology Director in consultation with the Chief of Police and/or his or her designee.

2.2. Product Data. Closure may Process Product Data for internal business purposes, such as to improve, support, develop, and maintain its current and future technology, products, and services, including to test and improve its models and algorithms.

2.3. Third-Party Data. Closure shall provide at-least thirty (30) days advanced notice in writing to Customer before a change in Third-Party processors or subcontractors with access to Customer Data. Any Third-Party Data that Closure may provide via the Services is governed by the third-party providers’ policies. Closure may choose to terminate the provision of any Third-Party Data if Closure’s rights to such Third-Party Data change.

3. Customer Obligations.

3.1. General. Customer is solely responsible for its Customer Data and will provide and maintain its Customer Systems. Customer represents and warrants that: (a) it has all rights necessary for Closure to integrate the Services with Customer’s systems, databases, Customer Data, and applicable Third-Party Data and Third-Party Platforms; (b) it has made all disclosures, provided all notices, and obtained all rights, consents, and permissions necessary for Closure to Process Customer Data as set forth in this Agreement; (c) Customer will ensure that its Users do not share log-in credentials (including between Users) for the Services; and (d) Customer will comply with Laws when using the Services. Customer is responsible for its Users’ compliance with this Agreement.

3.2. Illegal Content. Closure recognizes that Customer is a law enforcement agency and that Customer will use the Services exclusively for authorized law enforcement purposes. In that context, Closure understands that Customer may, in its official capacity, use the Services in connection with law enforcement investigations related to illegal content (“Illegal Content”), including without limitation child pornography and child sexual assault materials. Without limiting the generality of Customer’s obligations set forth in Section 3.1, Customer agrees that with respect to any Customer Data that is, or includes, Illegal Content, (a) Customer, and not Closure, is the exclusive owner, controller, and sole possessor of such Illegal Content; (b) to the extent that Closure receives any Illegal Content from, or Processes any Illegal Content on behalf of, Customer, Closure is acting exclusively at the direction of Customer as Customer’s agent; (c) Customer is solely responsible for, and holds Closure harmless with respect to, all requirements under Law related to or arising from the use, possession, storage, or other Processing of such Illegal Content, including without limitation all reporting and notification requirements related thereto.

3.3. CJIS Requirements. For any CJIS Data, Customer will comply with the following CJIS requirements: (a) Customer agrees to use training, policy and procedures to ensure Users use proper handling, processing, storing and communication protocols for Customer Data and Third-Party Data; (b) Customer agrees to protect the Services and all Third-Party Data, in each case, by monitoring and auditing staff user activity to ensure that it is only within the purview of system application development, system maintenance and the support roles assigned; (c) Customer will only provide access to the Services and any Third-Party Data through Customer-managed role-based access and applied sharing rules configured by Customer; (d) Customer agrees to create and retain activity transaction logs to enable auditing by Closure staff, CJIS, and any Third-Party Data owners; (e) Customer agrees to perform independent employment background screening for its staff at Customer’s own expense; and (f) Customer agrees to reinforce staff policies for creating User accounts with only one Customer domain email address for each User, with exceptions only as granted in writing by Closure.

3.4. Closure Cooperation. Closure will enter into a CJIS Security Addendum, in the form attached hereto as Exhibit B, or similar instrument if and to the extent required by the CJIS 16498.00006\45376828.1 452

Security Policy.

4. Third-Party Platforms.

Use of any Third-Party Platforms integrated into, or otherwise provided or used in connection with, the Services are subject to Customer’s agreement with the relevant provider. Closure disclaims all liability for Third-Party Platforms and their respective providers. By enabling a Third-Party Platform to interact with the Services, Customer authorizes Closure to access and exchange Customer Data with such Third-Party Platform on Customer’s behalf. Closure shall provide at-least thirty (30) days advanced notice in writing to Customer before a change occurs in Third-Party processors or subcontractors with access to Customer Data. Notice shall be provided to the City of Fontana Information Technology Director and Chief of Police. Customer shall have the right to review and object to any proposed changes in Third-Party processors and/or Subcontractors based on reasonable data security concerns by describing those concerns in writing in reasonable detail. Following a timely objection, the parties shall confer in good faith for a period of fifteen (15) days, during which Closure may propose measures to address Customer's concerns or elect not to proceed with the proposed change. If the objection remains unresolved at the end of that period Customer's sole and exclusive remedy shall be to terminate, upon written notice to Closure, either (a) the portion of the Services affected by the proposed change or (b) the Services in their entirety, and to receive a pro rata refund of fees prepaid by Customer for the terminated Services attributable to the period after the effective date of such termination. If Customer does not deliver a timely written objection, the proposed change shall be deemed accepted.

5. Commercial Terms.

5.1. Subscription Term. Each Subscription Term may be renewed only with the mutual written agreement of both parties. Each Subscription Term renewal shall be subject to at least 90 days advanced notice in writing before expiration of the Customer’s intent to renew the subscription term.

5.2. Fees and Taxes. Fees for the Services are described in each Order (“Fees”). Fees are invoiced as described on the schedule in the Order. Unless the Order provides otherwise, all Fees are due within 30 days of the invoice date. Fees for renewal Subscription Terms are at Closure’s then-current rates, regardless of any discounted pricing in any Order. All Fees are exclusive of Taxes and are non-refundable.

6. Restrictions.

Customer will not (and will not permit anyone else to) do any of the following: (a) provide access to a Service to a third party (other than Users for use in accordance with this Agreement); (b) use any Service on behalf of, or to provide any product or service to, third parties; (c) use any Service to develop a similar product or service; (d) reverse engineer, decompile, disassemble, or seek to access the source code or non-public APIs to any Service, except to the extent such a restriction is expressly prohibited by Law (and then only with prior notice to Closure); (e) modify or create derivative works of any Service or copy any element of any Service; (f) remove or obscure any proprietary notices in any Service; (g) publish benchmarks or performance information about any Service, except as required by public transparency laws or as part of Customer’s normal governmental operations; (h) interfere with the operation of any Service, circumvent any access restrictions, or conduct any security or vulnerability test of any Service; (i) take any action that risks harm to others or to the security, availability, or integrity of any Service; (j) access or use any Service for any fraudulent activities or in any manner that violates any Law; or (k) send, store, input, upload, submit, transmit, or otherwise provide any viruses or any infringing, unlawful, or injurious materials to or in connection with the Services.

7. Disclaimers.

7.1. General. The Services are provided “AS IS”. Closure, on its own behalf and on behalf of its suppliers and licensors, makes no other warranties, whether express, implied, statutory, or otherwise, including warranties of merchantability, fitness for a particular purpose, title, or noninfringement. Closure does not warrant that Customer’s use of the Services will be 16498.00006\45376828.1 453

uninterrupted or error-free, that Closure will review Customer Data for accuracy, or that it will maintain Customer Data without loss. Closure is not liable for (a) delays, failures, or problems inherent in use of the Internet and electronic communications or other systems outside Closure’s control; (b) any decisions, actions, or omissions that Customer or any Users make as a result of using the Services or any Reports obtained or accessed via the Services or in connection with use of the Services; (c) any Third-Party Data, or Third-Party Platform; (d) any trial, beta, or other evaluation products or services; or (e) any Service suspension.

7.2. Service Output. Customer is responsible for reviewing all Reports to ensure they are accurate and appropriate for their intended use, as well as for how the Services and any related results, materials, or outputs are used or relied upon by Customer and Users. Customers acknowledge that Reports and Service Output may: (i) contain errors or inaccuracies due to input quality or limitations of the underlying technology; and (ii) include Third-Party Data or other third-party content. Closure makes no representations or warranties about the accuracy, reliability, or error-free nature of Service Output and is not liable for Customer’s use of any Service Output.

Closure is not a law firm, it does not provide legal services or advice, and no attorney-client relationship is created. Any output generated are not legal advice and are not guaranteed to be correct, complete, or current.

8. Term and Termination.

8.1. Term; Termination. The term of this Agreement (the “Term”) starts on the Effective Date and continues until expiration or termination of all Orders. Either party may terminate this Agreement (including any or all Orders) by mutual written agreement or if the other party fails to cure a material breach of this Agreement (including a failure to pay fees) within 30 days after notice. Customer’s obligation to pay any amounts due for those fiscal periods succeeding the current fiscal period are contingent upon appropriation or approval of funds for that purpose. If such funds become unavailable, then Customer may elect to terminate this Agreement by giving written notice of termination to Closure effective immediately or on such other date as Customer specifies in the notice. In such an event, Customer shall have no further liability to pay any funds to Closure or to furnish any other consideration under this Agreement, and Closure shall not be obligated to perform any provisions of this Agreement or to provide services intended to be funded pursuant to this Agreement. If partial funds are appropriated or provided, Customer shall have the option to either terminate this Agreement with no liability to Customer or offer a contract amendment to Closure to reflect the reduced amount, which Closure may accept or reject in its sole discretion.

8.2. Effect of Termination. Upon expiration or termination of an Order, Customer’s access to and Closure’s obligations to provide the Services described in the Order will cease. Upon expiration or termination, and prior to deletion of any Customer Data, Customer shall have the right to request an export of the applicable Customer Data for Customer’s own use and records. Closure shall reasonably cooperate with Customer to provide such export in a mutually acceptable format, provided that the parties are able to identify and agree upon a technically feasible format.

Closure shall not permanently delete or remove the applicable Customer Data from its systems until the export has been completed or Customer confirms in writing that no export is requested.

Customer Data and other Confidential Information, including all backup copies, shall be permanently deleted and removed from Closure’s systems within sixty (60) days after completion of the export, or within sixty (60) days after Customer confirms in writing that no export is requested.

Upon request by Customer, Closure shall provide confirmation in writing that all Customer Data has been deleted in its entirety.

8.3. Survival. These Sections survive expiration or termination of this Agreement: 2.2 (Product Data), 3 (Customer Obligations), 4 (Third-Party Platforms); 5.2 (Fees and Taxes), 6 (Restrictions), 7 (Disclaimers), 8.2 (Effect of Termination), 8.3 (Survival), 9 (Ownership), 11 (Limitations of Liability), 12 (Confidentiality), 13 (Required Disclosures), 15 (General Terms), and Exhibit A (Definitions). Except where an exclusive remedy is provided in this Agreement, exercising a remedy under this Agreement, including termination, does not limit other remedies a 16498.00006\45376828.1 454

party may have.

8.4. Suspension. Closure may upon reasonable notice to Customer, immediately suspend or terminate Customer’s access to any or all of the Services if: (a) Customer breaches this Agreement; (b) Closure’s provision of any Service is prohibited or otherwise adversely affected by Laws or changes to Laws; (c) Customer’s actions risk harm to any of Closure’s other customers or the security, availability, or integrity of a Service; (d) Closure reasonably determines that there is a threat or potential threat or attack or potential attack on any Service; (e) any vendor suspends or terminates Closure’s access to or use of any products or services required for the Service; or (f) Customer’s Service usage substantially exceeds normal usage levels. 16498.00006\45376828.1 455

9. Ownership.

Neither party grants the other any rights or licenses not expressly set out in this Agreement. Except as expressly provided in this Agreement, as between Customer and Closure, Customer retains all intellectual property rights and other rights in Customer Data and Service Output. Except for Customer’s use rights in this Agreement, Closure and its licensors retain all intellectual property rights and other rights in and to (a) the Services; (b) any work product or results of the provision, operation, or maintenance of the Services (other than Customer’s Service Output); (c) all Documentation and Product Data; (d) all Closure technology, templates, algorithms, formats, and dashboards; (e) all general skills, know-how, processes, methodologies, tools, techniques, routines, or technologies, in each case, that are created, adapted or used by Closure in its business generally; and (f) all modifications or improvements to any of the foregoing items set forth in subsections (a) through (e) made by or on behalf of Closure. If Customer provides Closure with feedback or suggestions regarding the Services or other Closure offerings, Closure may use the feedback or suggestions without restriction or obligation.

10. Indemnification.

Closure is required to defend and indemnify the Customer against any third-party claims alleging that the Services, when used as authorized under this Agreement, infringe the intellectual property rights of such third-party, including paying court-awarded damages, fines, and reasonable legal fees or settlement costs. These obligations apply only if the Customer promptly notifies Closure of the claim, allows Closure exclusive control over its defense and settlement, and provides reasonable cooperation at Closure’s expense (provided that Customer may participate in the defense with its own counsel at its own expense). Customer may not settle an indemnified claim without Closure’s prior written consent. Closure may not settle an indemnified claim without Customer’s prior written consent if the settlement would require the Customer party to admit fault or have non-monetary obligations. In the event of an infringement claim, Closure may, at its discretion, secure continued usage rights, replace or modify the Services to resolve the issue without reducing functionality, or terminate the affected subscription and refund any pre-paid, unused fees. Closure’s indemnity does not extend to claims arising from the Service Output, Customer’s unauthorized product modifications, use with unauthorized third-party products, unsupported software releases, or issues stemming from third-party products or customer data/materials, except to the extent such claims arise from Closure’s gross negligence, willful misconduct, violation of law, or breach of its confidentiality, data security, or privacy obligations. In addition to the foregoing, Closure shall indemnify, defend, and hold harmless Customer, the City, and their respective officers, officials, employees, agents, representatives, and volunteers from and against any and all third-party claims, demands, losses, liabilities, damages, fines, penalties, costs, and expenses, including reasonable attorneys’ fees, arising out of or related to any actual or alleged data breach, privacy violation, cybersecurity incident, unauthorized access to or disclosure of Customer Data, City data, CJIS information, or other confidential, sensitive, or regulated information, Closure’s gross negligence or willful misconduct, or Closure’s violation of applicable law, regulation, or contractual confidentiality, data security, or privacy obligation. This IP indemnification is the Customer’s exclusive remedy and constitutes Closure’s complete liability solely for third-party intellectual property infringement claims and does not limit Closure’s indemnification obligations for the other matters described in this Section.

11. Limitations of Liability.

Both parties, their successors, assigns, Affiliates, and each of their suppliers, licensors, employees, officers, and agents, will not have any liability arising out of or related to this Agreement for (a) any loss of use, lost data, lost profits, failure of security mechanisms, interruption of business, or any indirect, special, incidental, reliance, or consequential damages of any kind, even if informed of their possibility in advance or (b) any amounts that exceed, in aggregate, the amounts paid or payable by Customer to Closure pursuant to this Agreement during the 12 months prior to the date on which the applicable claim giving rise to the liability arose under this Agreement (the “Standard Cap”). The waivers and limitations in this Section 11 apply regardless of the form of action, 16498.00006\45376828.1 456

whether in contract, tort (including negligence), strict liability or otherwise and will survive and apply even if any limited remedy in this Agreement fails of its essential purpose. Notwithstanding anything to the contrary in this Agreement, the Standard Cap in this Section shall not apply to liability arising out of or related to Closure’s indemnification obligations, infringement or misappropriation of intellectual property rights, breach of confidentiality obligations, data breaches, cybersecurity incidents, unauthorized access to, use of, disclosure of, alteration of, or loss of Customer Data, City data, CJIS information, or other confidential, sensitive, or regulated information, gross negligence, willful misconduct, fraud, violation of law, or violation of applicable privacy, data security, cybersecurity, or CJIS requirements, for which Closure’s aggregate liability shall be limited to $1,000,000 (the “Enhanced Cap”). Subject to the limits herein, Closure shall remain responsible for all direct damages, legally recoverable damages, regulatory fines and penalties, notification costs, remediation costs, forensic investigation costs, credit monitoring costs, and reasonable attorneys’ fees arising from the foregoing excluded matters.

12. Confidentiality.

12.1. Definition. “Confidential Information” means information disclosed to the receiving party (“Recipient”) under this Agreement that is designated by the disclosing party (“Discloser”) as proprietary or confidential or that should be reasonably understood to be proprietary or confidential due to its nature and the circumstances of its disclosure. Closure’s Confidential Information includes any technical or performance information about the Services. Customer’s Confidential Information includes Customer Data. Customer’s Confidential Information also includes any data, records, files, content, materials, intellectual property, credentials, metadata, law enforcement information, CJIS information, personally identifiable information, or other confidential, sensitive, or regulated information that Closure or its subcontractors access, collect, receive, store, process, transmit, maintain, or generate on behalf of Customer or the City (other than Product Data), whether through the Services or through access to Customer’s or the City’s systems, networks, databases, or facilities.

12.2. Obligations. As Recipient, each party will: (a) hold Confidential Information in confidence and not disclose it to third parties except as expressly permitted in this Agreement; and (b) only use Confidential Information to fulfill its obligations and exercise its rights expressly set forth in this Agreement. At Discloser’s request, Recipient will delete all Confidential Information, except, in the case where Closure is the Recipient, Closure may retain the Customer’s Confidential Information to the extent required to continue to provide the Services. Recipient may disclose Confidential Information to its employees, agents, contractors, subcontractors, and other representatives having a legitimate need to know, provided it remains responsible for their compliance with this Section 12 and they are bound to confidentiality obligations no less protective than this Section 12.

12.3. Exclusions. These confidentiality obligations do not apply to information that: (a) is or becomes public knowledge through no fault of the receiving party; (b) the receiving party rightfully knew or possessed prior to receipt under this Agreement; (c) the receiving party rightfully received from a third party without breach of confidentiality obligations; (d) is released pursuant to Federal, State, Local Law, and/or the California Public Records Act, or (e) that is independently developed without using the other party’s Confidential Information.

12.4. Remedies. Unauthorized use or disclosure of Confidential Information may cause substantial harm for which damages alone are an insufficient remedy. Each party may seek appropriate equitable relief, in addition to other available remedies, for breach or threatened breach of this Section 12.

13. Required Disclosures.

Nothing in this Agreement prohibits either party from making disclosures, including of Confidential Information, if required by Law, subpoena, or court order, provided (if permitted by Law) it notifies the other party in advance and reasonably cooperates in any effort to obtain confidential treatment. 16498.00006\45376828.1 457

14. Publicity.

Neither party may publicly announce that the parties have entered into this Agreement, except with the other party’s prior consent or as required by Laws.

15. General Terms.

15.1. Assignment. Neither party may assign this Agreement without the prior consent of the other party, except that either party may assign this Agreement to a successor to all or substantially all of its business or assets to which this Agreement relates (including in connection with a merger, reorganization, acquisition, or other transfer of all or substantially all its assets or voting securities).

Any non-permitted assignment is void. This Agreement will bind and inure to the benefit of each party’s permitted successors and assigns.

15.2. Governing Law; Arbitration. This Agreement is governed by the laws of the State of California without regard to conflicts of laws provisions. Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in the Inland Empire, California before one arbitrator. The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures and in accordance with the Expedited Procedures in those Rules. This clause shall not preclude parties from (a) seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction and (b) seeking an injunction in any court of competent jurisdiction.

15.3. WAIVER OF JURY TRIAL. CUSTOMER AND CLOSURE HEREBY IRREVOCABLY

WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN

ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER IN CONTRACT, STATUTE, TORT (SUCH AS NEGLIGENCE), OR OTHERWISE) RELATING TO THIS AGREEMENT.

15.4. Attorneys’ Fees and Costs. The prevailing party in any action to enforce this Agreement will be entitled to recover its attorneys’ fees and costs in connection with such action.

15.5. Notices. Except as set out in this Agreement, any notice or consent under this Agreement must be in writing to the addresses on the first page and will be deemed given: (a) upon receipt if by personal delivery; (b) upon receipt if by certified or registered U.S. mail (return receipt requested); (c) one day after dispatch if by a commercial overnight delivery service; or (d) upon confirmation of receipt by email to the email address set forth for the party on the signature block of this Agreement or, if no confirmation has been received, one business day after the date of sending. Either party may update its address with notice to the other party. Closure may also send operational notices to Customer through the Services.

15.6. Entire Agreement. This Agreement (which includes all Orders) is the parties’ entire agreement regarding its subject matter and supersedes any prior or contemporaneous agreements regarding its subject matter. In this Agreement, headings are for convenience only and “including” and similar terms are to be construed without limitation. This Agreement may be executed in counterparts (including electronic copies and PDFs), each of which is deemed an original and which together form one and the same agreement.

15.7. Amendments. Any amendments, modifications, or supplements to this Agreement must be in writing and signed by each party’s authorized representatives or, as appropriate, agreed through electronic means provided by Closure. The terms in any Customer purchase order or business form will not amend or modify this Agreement and are expressly rejected by Closure; any of these Customer documents are for administrative purposes only and have no legal effect.

15.8. Waivers and Severability. Waivers must be signed by the waiving party’s authorized representative and cannot be implied from conduct. If any provision of this Agreement is held invalid, illegal, or unenforceable, it will be limited to the minimum extent necessary, so the rest of this Agreement remains in effect.

15.9. Government Terms. Elements of the Services are commercial computer software. If the 16498.00006\45376828.1 458

user or licensee of the Services is an agency, department, or other entity of the United States Government, the use, duplication, reproduction, release, modification, disclosure, or transfer of the Services or any related documentation of any kind, including technical data and manuals, is restricted by the terms of this Agreement in accordance with Federal Acquisition Regulation 12.212 for civilian purposes and Defense Federal Acquisition Regulation Supplement 227.7202 for military purposes. The Services were developed fully at private expense. All other use is prohibited.

15.10. Force Majeure. Neither party is liable for any delay or failure to perform any obligation under this Agreement (except for a failure to pay fees) due to events beyond its reasonable control.

15.11. Subcontractors. Closure may use subcontractors and permit them to exercise Closure’s rights under this Agreement as long as (i) Closure remains responsible for their compliance and overall performance under this Agreement and (ii) Closure provides Customer with 60 days’ advance written notice of changes to subcontractors that will Process Customer Data.

15.12. Independent Contractors. The parties are independent contractors, not partners or joint venturers.

15.13. Conflicts in Interpretation. If there are inconsistencies or conflicts between the terms of the body of this Agreement and the terms of any schedules, exhibits, attachments, addenda, policies, and other documents attached to or incorporated by reference in this Agreement, the order of precedence is as follows: (a) the terms contained in the body of this Agreement; (b) the terms of the schedules, exhibits, attachments, addenda, and policies to this Agreement; and (c) the Documentation.

15.14. Insurance Requirements. Exhibit C, attached hereto, sets forth the minimum insurance amounts and coverages that Closure shall maintain for the duration of this Agreement.

15.15. Service Level Requirements. Exhibit D, attached hereto, sets forth the minimum Service Level Requirements that Closure shall maintain for the duration of this Agreement. 16498.00006\45376828.1 459

EXHIBIT A
Definitions

1.1. “Affiliate” means an entity directly or indirectly owned or controlled by a party, where “ownership” means the beneficial ownership of 50% or more of an entity’s voting equity securities or other equivalent voting interests and “control” means the power to direct the management or affairs of an entity.

1.2. “CJIS Data” means Customer Data that is subject to the requirements of the CJIS Security Policy set forth by the U.S. Department of Justice, Federal Bureau of Investigation, Criminal Justice Information Services Division.

1.3. “Criminal Justice Information Services Division” or “CJIS” means the FBI division responsible for the collection, warehousing, and timely dissemination of relevant criminal justice information to the FBI and to qualified law enforcement, criminal justice, civilian, academic, employment and licensing agencies.

1.4. “Customer Data” means any data or information that: (a) Customer (including its Users) submits to the Services, including from Third-Party Platforms; and (b) is Processed by Closure to provide the Services to Customer.

1.5. “Customer Systems” means Customer’s hardware, software, other technology, and infrastructure that Customer is required to provide and maintain in order for Customer to access and use the Services.

1.6. “Documentation” means the then-current version of Closure’s usage guidelines and standard technical documentation for the Services that Closure makes generally available to its customers of the applicable Services.

1.7. “Laws” means all applicable relevant local, state, federal and international laws, regulations and conventions.

1.8. “Order” means an order form that describes the Services being purchased by Customer that is executed by the parties and references this Agreement.

1.9. “Process” or “Processed” means to collect, access, use, disclose, transfer, transmit, store, host, or otherwise process.

1.10. “Product Data” means information generated from the use of the Services, which data does not identify Users, any other natural human persons, or Customer, such as technical logs, data, and learnings about Customer’s use of the Services, or anonymized or aggregated versions of Customer Data that no longer identify Customer or any specific individual, but expressly excluding any identifiable Customer Data.

1.11. “Report” means any information, reports, outputs, or other materials obtained or accessed via, or provided by the Services, including Service Output.

1.12. “Service” or “Services” means the then-current version of Closure’s proprietary platform and other Services that are identified in the relevant Order.

1.13. “Service Output” means any data, text, software, audio, video, images, content, computational results, predictions, recommendations, decisions, output, or other information or 16498.00006\45376828.1
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material that is provided by the Service, derived from Customer Data, and provided to Customer or its Affiliates, or any of their employees, agents, consultants, third-party contractors, vendors, customers, or end users.

1.14. “Subscription Term” means the period during which Customer’s subscription to access and use the Services is in effect, as identified in the applicable Order.

1.15. “Third-Party Data” means any third-party data that is licensed from third party vendors and made accessible via the Service. For clarity, Third-Party Data does not include any Customer Data.

1.16. “Third-Party Platform” means any third-party platform, database, add-on, service, or product not provided by Closure that Customer elects to integrate or enable for use with any Service.

1.17. “User” means any employee or contractor of Customer or its Affiliates that Customer allows to use the Services on Customer’s behalf.

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EXHIBIT B
CJIS Security Addendum

(see attached)

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EXHIBIT C
Insurance Requirements

1. Insurance.

1.1 Required Coverages. Closure must maintain in force, during the full term of the Agreement, insurance in at least the following amounts and coverages:
(a) Commercial General Liability Insurance with limits not less than $2,000,000 each occurrence, or $4,000,000 in the aggregate, for bodily injury and property damage, including contractual liability, personal injury, products and completed operations.
(b) Automobile Liability Insurance: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), or, if Closure has no owned autos, Code 8 (hired) and Code 9 (non-owned), with limits not less than $1,000,000 per accident for bodily injury and property damage.
(c) Workers’ Compensation, in statutory amounts, with
employers’ liability limits not less than $1,000,000 for each accident, injury, or illness. (d) Professional Liability Insurance, applicable to Closure’s profession, with limits not less than $4,000,000 for each claim with respect to negligent acts, errors or omissions in connection with the Services. (e) Technology Errors and Omissions Liability Insurance, with limits of $4,000,000 for each claim and each loss. If the policy is written on a claims-made basis, the retroactive date must be on or before the commencement of the Services, and the coverage must remain in force for at least three (3) years following the termination of the Services. The policy shall at a minimum cover professional misconduct or lack of the requisite skill required for the performance of Services defined in this Agreement and shall also provide coverage for the following risks:
(i) Network security liability arising from the unauthorized access to, use of, or tampering with computers or computer systems, including hacker attacks; and
(ii) Liability arising from the introduction of any form of malicious software including computer viruses into or otherwise causing damage to Customer’s or third person’s computer, computer system, network, or similar computer related property and the data, software, and programs thereon.
(f) Cyber and Privacy Liability Insurance with limits of not less than $3,000,000 per claim, and $3,000,000 in the aggregate. Such insurance shall include coverage for liability arising from theft, dissemination, and/or use of confidential information, including but not limited to, bank and credit card account information or personal information, such as name, address, social security numbers, protected health information or other personally identifiable information, stored or transmitted in electronic form.
(g) Shared Limits. A single policy that affords two or more of the coverages required by Section 1.1.1 satisfies each such requirement, provided that the applicable per-claim limit is available for each such coverage. Closure is not required to maintain separate policies or separate limits for each such coverage.

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2.1 Other Insurance Provisions. The insurance policies required by Section 1.1.1 are to contain, or be endorsed to contain, the following provisions:
(a) Additional Insured Status. Customer, and their respective officers, officials, employees, and volunteers are to be covered as additional insureds on the commercial general liability policy with respect to liability arising out of work or operations performed by or on behalf of Closure, including materials, parts, or equipment furnished in connection with such work or operations. Coverage may be provided in the form of an endorsement to Closure’s insurance at least as broad as ISO Form CG 20 10 11 85, or both ISO Forms CG 20 10 and CG 20 37 if later revisions are used; ISO Form CG 20 15 12 19 is also acceptable. This Section only applies to the coverage required by Sections 1.1.1(a).
(b) Primary Coverage. For any claims related to this
Agreement, Closure’s insurance coverage shall be primary and non-contributory, with coverage at least as broad as ISO Form CG 20 01 12 19, as respects Customer, and their respective officers, officials, employees, and volunteers. Any insurance or self-insurance maintained by Customer, or their respective officers, officials, employees, or volunteers shall be excess of Closure’s insurance, including any excess policies, and shall not contribute with it.
(c) Umbrella or Excess Policy. Closure may use umbrella or excess policies to provide the liability limits required by this Exhibit C. Such policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as that provided on the underlying commercial general liability insurance. (d) Notice of Cancellation. Each insurance policy required by this Exhibit C shall state that coverage shall not be canceled except with notice to Customer.
(e) Waiver of Subrogation. Closure hereby grants to Customer a waiver of any right to subrogation which any insurer of Closure may acquire against Customer by virtue of the payment of any loss under such insurance. Closure agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation and to provide a copy to Customer, but this provision applies regardless of whether or not an endorsement has been issued.
(f) Self-Insured Retentions. Self-insured retentions must be declared to and approved by Customer. Customer may require Closure to purchase coverage with a lower retention or to provide proof of ability to pay losses and related expenses within the retention. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or Customer.
(g) Acceptability of Insurers. Insurance is to be placed with insurers authorized to conduct business in the State of California with a current A.M.

Best’s rating of no less than A-:VII, unless otherwise acceptable to Customer. (h) Claims-Made Policies. If any of the required policies provide coverage on a claims-made basis: (i) the retroactive date must be shown and must be before the Effective Date or the date Closure begins performing the Services, whichever is earlier; (ii) insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the Services; and (iii) if coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the Effective Date, Closure must purchase “extended 16498.00006\45376828.1
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reporting” coverage for a minimum of five (5) years after completion of the Services. With respect to the coverage required by Section 1.1.1(e), the periods in clauses (ii) and (iii) are three (3) years, as provided in that Section.
(i) Verification of Coverage. Closure shall furnish
Customer with original certificates and amendatory endorsements, or copies of the applicable policy language, effecting the coverage required by this Exhibit C.

All documents are to be received and approved by Customer before the Services commence. However, failure to obtain the required documents prior to the commencement of the Services shall not waive Closure’s obligation to provide them. Customer reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
(j) Subcontractors. Closure shall require and verify that all subcontractors maintain insurance meeting all of the requirements stated in this Exhibit C, and Closure shall ensure that Customer is an additional insured on insurance required from subcontractors.
(k) Special Risks or Circumstances. Customer reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

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EXHIBIT D
Service Level Requirements

1.1 Availability Service Level:

1.1.1 Definitions:
(a) Actual Uptime: The total minutes in the reporting month that the Services were actually available to Users for normal use. (b) Scheduled Downtime: The total minutes in the reporting month during which Scheduled SaaS Maintenance was performed. (c) Scheduled Uptime: The total minutes in the reporting month less the total minutes represented by the Scheduled Downtime.

1.1.2 Service Level Standard.
(a) Calculation: (Actual Uptime / Scheduled Uptime) * 100 = Percentage Uptime (as calculated by rounding to the second decimal point)

1.2 Availability of Services. Closure (or its hosting service contractor) shall host an application to provide the Services (the “SaaS Services”) on computers owned or controlled by Closure (or its contractor) for Customer to use according to the terms herein.

1.2.1 Hosted System Uptime. Other than Scheduled SaaS Maintenance as described in Section 1.2.2, emergency maintenance as described in Section 1.2.4, and Force Majeure as described in Section 15.10 of the Agreement, Closure shall achieve a Percentage Uptime of 99% for the SaaS Services.

1.2.2 Schedule SaaS Maintenance.
(a) “Scheduled SaaS Maintenance” means the time (in minutes) during the month, as measured by Closure, in which access to the SaaS Services is scheduled to be unavailable for use by Customer due to planned system maintenance and major version upgrades.

(b) Scheduled SaaS Maintenance shall not exceed an average of 4 hours per month over a twelve (12) month period except for major scheduled upgrades.

1.2.3 Unscheduled SaaS Maintenance. Closure shall use commercially reasonable efforts to prevent more than one (1) hour of continuous down time during business hours in any month for which unscheduled SaaS maintenance is required.

1.2.4 Emergency Maintenance. If Force Majeure events or emergencies arise or continue, Closure shall be entitled to take any actions that Closure, in good faith, determines is necessary or advisable to prevent, remedy, mitigate, or otherwise address actual or potential harm, interruption, loss, threat, security or like concern to any of the SaaS Services. Such emergency maintenance may include, but is not limited to: analysis, testing, repair, maintenance, re-setting and other servicing of the 16498.00006\45376828.1
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hardware, cabling, networks, software and other devices, materials and systems through which access to and/or use of the SaaS Services by Customer is made available. Closure shall endeavor to provide advance written notice of such emergency maintenance to Customer as soon as is reasonably possible.

1.2.5 Notice of Unavailability. In the event there will be more than thirty (30) minutes down time of any SaaS Services components for any reason, including but not limited to, Scheduled SaaS Maintenance or emergency maintenance, Closure shall provide notice to users by posting a web page that indicates that the site is temporarily unavailable and to please come back later. Closure shall also provide advanced e-mail notice to [email protected] and the Chief of Police which will include at least a brief description of the reason for the down time and an estimate of the time when Customer can expect the site to be up and available.

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Audit trail
Details
FILE NAME (Execution Version) FPD - Closure Intelligence Inc. - Order Form and Platform Services Agreement (08.25.26)-c1.docx - 8/25/26, 4:51 PM.pdf
STATUS Signed
STATUS TIMESTAMP 2026/08/25
23:52:23 UTC
Activity
SENT
[email protected] sent a signature request to:

Alex Carter ([email protected])
2026/08/25
23:51:25 UTC
SIGNED Signed by Alex Carter ([email protected]) 2026/08/25 23:52:23 UTC
COMPLETED This document has been signed by all signers and is complete 2026/08/25 23:52:23 UTC
The email address indicated above for each signer may be associated with a Google account, and may either be the primary email address or secondary email address associated with that account.

Signature:

Email:
michael DOrsey (Aug 25, 2026 17:57:45 PDT)
michael DOrsey
[email protected]
468
(Execution Version) FPD - Closure Intelligence
Inc. - Order Form and Platform Services
Agreement (08.25.26)-c1.docx - 8_25_26
4_51 PM
Final Audit Report 2026-08-26
Created: 2026-08-26
By: Angela Stover ([email protected])
Status: Signed
Transaction ID: CBJCHBCAABAAl_tSdXhnoDh8po-Xp5ve-koOu6c984yQ "(Execution Version) FPD - Closure Intelligence Inc. - Order For m and Platform Services Agreement (08.25.26)-c1.docx - 8_25_ 26 4_51PM" History
Document digitally presigned by Google LLC
2026-08-25 - 11:52:25 PM GMT
Document created by Angela Stover ([email protected]) 2026-08-26 - 0:55:07 AM GMT
Document emailed to [email protected] for signature 2026-08-26 - 0:56:24 AM GMT
Email viewed by [email protected]
2026-08-26 - 0:56:57 AM GMT
Signer [email protected] entered name at signing as michael DOrsey 2026-08-26 - 0:57:43 AM GMT
Document e-signed by michael DOrsey ([email protected]) Signature Date: 2026-08-26 - 0:57:45 AM GMT - Time Source: server - Signature Appearance Selected: TYPE Agreement completed.
2026-08-26 - 0:57:45 AM GMT
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City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1242 Agenda Date: 9/8/2026
Agenda #: W. Category: Consent Calendar
FROM:

City Council
SUBJECT:

Reduction of User Fees for Block Party Permits
RECOMMENDATION:

Adopt Resolution No. 2026-083, a resolution of the City of Fontana reducing the user fee for Block Party Permits that was previously set forth in a master fee schedule.

COUNCIL GOALS:
· To operate in a businesslike manner by becoming more service oriented. · To practice sound fiscal management by producing timely and accurate financial information.

DISCUSSION:

The City of Fontana engaged Willdan Financial Services to perform a comprehensive fee study to analyze the costs of providing various City regulatory activities, programs, and services. Given the complexity and range of services evaluated, Willdan applied a variety of industry-standard methodologies to calculate full cost recovery for each fee or program area.

A comprehensive study and the development of a fee calculation model allows for economic stabilization to occur as well as future personnel costs to be better forecasted. The study determined the user fee to process block party permits to be $352. This cost includes the processing by engineering staff and the police department personnel to review the application and use of City blockades. User fees are designed to reasonably cover, but not exceed, the reasonable cost of providing the service for which the user fee is charged.

City Council Members expressed a desire to lower the associated permit fee to encourage community engagement and make the said permit more affordable. As such, it is recommended the permit be reduced to a flat rate of $250.

FISCAL IMPACT:

The City issued less than five permits last year. The fiscal impact associated with the approval of this item will result in a minimal reduction of revenue.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2026-083

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

CALIFORNIA, ADOPTING A DECREASE IN USER FEE FOR BLOCK
PARTY PERMITS.

WHEREAS, the City of Fontana has conducted an extensive analysis of its services, the costs reasonably borne of providing those services, the beneficiaries of these services, and the revenues produced by those paying fees and charges for special services; and

WHEREAS, the certain current fees charged for services provided by the City do not fully recover the actual costs of providing such services; and

WHEREAS, per the rate study that was adopted by the City Council on July 22, 2025 for rates that went into effect January 1, 2026, it was determined the fully burden rate block party permits was $352; and

WHEREAS, the City Council desires to make this rate more affordable and encourage community engagement in Fontana neighborhoods; and

WHEREAS, pursuant to Government Code Sections 66016 and 66018, the specific fees charged must be adopted by the City Council by Resolution.

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

Section 1. The schedule of User Fees is amended for “Block Party Permit” and reduced to a flat rate of $250 to offset the cost for staff review and the use of City blockades effective immediately following the adoption of this resolution.

APPROVED AND ADOPTED this 8th day of September, 2026.

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 resolution is the actual resolution duly and regularly adopted by the City Council at a regular meeting on the 8th day of September, 2026, by the following vote to wit:

471
Resolution No. 2026-083

AYES:

NOES:

ABSENT:

ABSTAIN:

City Clerk of the City of Fontana

Mayor of the City of Fontana

ATTEST:

City Clerk

472
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1244 Agenda Date: 9/8/2026
Agenda #: X. Category: Consent Calendar
FROM:

Development Services
SUBJECT:

Adoption of Resolution 2026-084 Approving Purchase and Sale Agreement - Water of Life Community Church Property Acquisition.

RECOMMENDATION:

1. Approve the Purchase and Sale Agreement and Joint Escrow Instructions (“PSA”) between the City of Fontana and Water of Life Community Church, a California nonprofit religious corporation (“WOL”),for City’sacquisition of Lot C (APN 1100-091-71-0000) and Lot D (APN 1100-111-51-0000).

2. Approve the Lot C Ground Lease (“Ground Lease”) between City, as landlord, and WOL, as tenant, for WOL’s continued use of Lot C following closing.

3. Approve the Public Benefit Use Covenant requiring continued operation of CityLink Social Services on Parcel 1 for a period of fifteen (15) years.

4. Approve the Binding Memorandum of Understanding (“MOU”) relating to the Put Option for City’spotential acquisition of the Parcel 2/project property upon a qualifying triggering event, subject to the terms and limitations set forth therein.

5. Authorize the City Manager, or designee, to execute the PSA, Ground Lease, Public Benefit Use Covenant, Binding Memorandum of Understanding, escrow instructions, closing documents, and any other ancillary documents necessary to complete the transaction, subject to approval as to form by the City Attorney.

6. Authorize the City Manager, or designee, in consultation with the City Attorney, to take any actions necessary to comply with or confirm an exemption from the Surplus Land Act (SLA), including making any modifications to the Ground Lease in connection with complying with or confirming an exemption from SLA, before final execution and delivery of the Ground Lease.

COUNCIL GOALS:
· Provide a diverse range of housing types and levels of affordability while addressing homelessness in the community.
· Support the City's efforts to expand transitional housing and supportive services for individuals experiencing homelessness.

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· Promote partnerships with community-based organizations that provide homeless services.

DISCUSSION:

WOL owns and operates the CityLink Campus, a transitional housing and homeless support facility located at 16029 Arrow Boulevard in the City of Fontana. WOL is pursuing construction financing in connection with the future development of transitional residential and mixed-use project and related improvements on a portion of the CityLink Campus, together with related entitlement approvals, including a proposed lot line adjustment. WOL also owns the parcels identified as APN 1100-091-71- 0000 ("Lot C") and APN 1100-111-51-0000 ("Lot D"), which are subject to the proposed acquisition.

The City and WOL are parties to that certain Promissory Note dated March 22, 2023 (“Note”), secured by a deed of trust, recorded March 30, 2023, under which Note, the City, as lender, loaned Water of Life Community Church the original principal amount of $3,040,000 in connection with the development of the CityLink project. Under the proposed PSA, rather than paying cash consideration for Lot C and Lot D, the City will forgive, cancel, and satisfy all outstanding amounts due under the Note, including unpaid principal, accrued interest, default interest, late charges, and any other sums due as of Closing. The Note will be deemed paid and satisfied in full simultaneously with, and conditioned upon, recordation of the grant deed conveying Lot C and Lot D to the City.

The proposed transaction includes four related but independent documents:

1. the PSA,

2. the Ground Lease,

3. the Public Benefit Use Covenant, and

4. the Binding Memorandum of Understanding regarding the Put Option.

PSA
The PSA governs City’s acquisition of Lot C and Lot D. The Ground Lease governs WOL’s post- closing leaseback of Lot C. The Public Benefit Use Covenant requires continued CityLink Social Services on Parcel 1. The MOU separately addresses a Put Option tied to WOL’s construction financing for the Parcel 2/project property. The transaction is intended to support secular public purposes, including City’s acquisition of real property interests and the continued operation of services for homeless, disadvantaged, and other vulnerable populations, and is not intended to fund religious worship, religious instruction, or sectarian purposes.

MOU
The MOU is intended to assist WOL’s construction financing by providing a limited Put Option framework. If a qualifying lender default occurs and continues beyond applicable notice and cure periods such that the lender may accelerate the loan or exercise remedies against the property or project, WOL can require City to purchase the Parcel 2/project property pursuant to the MOU. City’s total exposure under the MOU is capped at $12,000,000, all in, and the construction loan principal is capped at $11,000,000 unless City approves otherwise. The MOU confirms that City is not a borrower, guarantor, indemnitor, lender, loan party, successor borrower, or party to WOL’s construction loan documents. City’s payment obligation, if triggered, is limited to the capped acquisition obligation expressly set forth in the MOU. The MOU is intended to create only a capped City of Fontana Printed on 9/3/2026Page 2 of 4
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acquisition obligation and not a guaranty, loan assumption, pledge of City’s full faith and credit, pledge of tax revenues, gift of public funds, or indebtedness in violation of applicable law.

Public Use Covenant
The Public Benefit Use Covenant will be recorded against Parcel 1 only, and not against Lot C, Lot D, Parcel 2, or the project property. The covenant requires continued operation of CityLink Social Services for homeless, disadvantaged, and other vulnerable populations within the City for a period of fifteen (15) years. The covenant includes annual compliance certification rights, supporting records rights, default remedies, and transfer restrictions requiring City’s prior written consent.

Ground Lease
At closing, City will lease Lot C back to WOL under a 55-year Ground Lease for parking and related church, ministry, and ancillary uses, subject to City’s reserved rights for public agency training operations and related governmental purposes. During years 1 through 14, Base Rent is $12,000 per month, but is reduced to $1 per year so long as CityLink Social Services continue at the CityLink Campus and WOL is not in default beyond applicable notice and cure periods under the Public Benefit Use Covenant. If services cease and are not cured within applicable notice and cure periods, Base Rent reverts to $12,000 per month until services resume and WOL is no longer in default.

Beginning in year 15, rent resets to $1 per year for the remainder of the lease term. If CityLink Social Services cease more than three times during years 1 through 14 beyond applicable notice and cure periods, WOL permanently loses the rent reduction for the remainder of years 1 through 14.

Because the Ground Lease has a term longer than fifteen (15) years, the City has considered the SLA. The Ground Lease is part of City’s concurrent acquisition and leaseback of Lot C and is limited to continued parking and related uses. The Ground Lease does not approve development or demolition on Lot C. Staff believes the Ground Lease may fall within the statutory exclusion for leases on which no development or demolition will occur, but the City Manager, or designee, in consultation with the City Attorney, will be authorized to take any actions necessary to comply with the SLA or confirm the applicability of any exclusion or exemption before final execution and delivery of the Ground Lease, including modifications to the Ground Lease reasonably necessary to confirm that no development or demolition of Lot C is authorized or will occur under the Ground Lease.

Approval of the proposed agreements will allow the City to complete the acquisition of Lot C and Lot D while furthering the City's long-term objectives relating to transitional housing, homeless services, public benefit uses, and future development opportunities.

FISCAL IMPACT:

The consideration for City’s acquisition of Lot C and Lot D under the PSA consists of City’s forgiveness, cancellation, and satisfaction of all amounts owed under the March 22, 2023 Promissory Note as of the closing, including unpaid principal, accrued interest, default interest, late charges, and any other sums due thereunder. The original principal amount of the Note is $3,040,000.

City Council approval will also authorize the appropriation and reservation of funds in an amount of $12,000,000 for the potential acquisition obligation under the MOU, payable only if the Put Option is validly exercised and the conditions in the MOU are satisfied. The MOU creates a potential future acquisition obligation if the Put Option is validly exercised following a qualifying triggering event.

City’s aggregate exposure under the MOU is capped at $12,000,000, inclusive of all purchase price, City of Fontana Printed on 9/3/2026Page 3 of 4
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File #: 26-1244 Agenda Date: 9/8/2026
Agenda #: X. Category: Consent Calendar
lender payoff, closing costs, lien-release costs, attorneys’ fees, enforcement costs, indemnity amounts, and all other amounts payable by or recoverable from City under or in connection with the MOU. Customary escrow, title, and closing costs will be paid in accordance with the PSA.

MOTION:

Approve Staff Recommendation.

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ATTACHMENT NO. 1
RESOLUTION NO. 2026-084

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

CALIFORNIA APPROVING A PURCHASE AND SALE AGREEMENT

WITH WATER OF LIFE COMMUNITY CHURCH FOR THE

ACQUISITION OF LOT C AND LOT D, APPROVING A LOT C GROUND

LEASE, APPROVING A PUBL IC BENEFIT USE COVENANT,

APPROVING A BINDING MEMORANDUM OF UNDERSTANDING

RELATING TO A PUT OPTION FOR THE PROJECT PROPERTY,

MAKING FINDINGS UNDER CEQA AND THE SURPLUS LAND ACT,

AND AUTHORIZING RELATED ACTIONS

WHEREAS, Water of Life Community Church, a Cal ifornia nonprofit religious corporation (“ WOL”), owns certain real property identified as A PN 1100 -091-71-0000 (“Lot C”) and APN 1100-111-51-0000 (“Lot D”); and
WHEREAS, WOL also owns and operates the CityLink Campus located at 16029 Arrow Boulevard, Fonta na, California, consisting of APN 0232 -201-12-000 (“Parcel 1”) and APN 0232-201-13-0000 (“Parcel 2”); and
WHEREAS, City and WOL are parties to that certain Promissory Note dated March 22, 2023, in the original principal amount of $3,040,000, secured by a d eed of trust recorded against the CityLink Campus; and
WHEREAS, City and WOL have negotiated a Purchase and Sale Agreement and Joint Escrow Instructions (the “ Purchase Agreement ”), pursuant to which City will acquire Lot C and Lot D from WOL in exchange fo r City’s forgiveness, cancellation, and satisfaction of all amounts owed under the Promissory Note as of closing; and WHEREAS, concurrently with closing under the Purchase Agreement, City, as landlord, and WOL, as tenant, will enter into a Lot C Ground Lea se (the “ Ground Lease”), pursuant to which City will lease Lot C back to WOL for a term of fifty-five (55) years for parking and related church, ministry, and ancillary uses, subject to City’s reserved rights and the terms of the Ground Lease; and
WHEREAS, the Ground Lease provides for Base Rent of Twelve Thousand Dollars ($12,000.00) per month during years 1 through 14, reduced to One Dollar ($1.00) per year so long as CityLink Social Services are continuously operated at the CityLink Campus and WOL is not in default beyond applicable notice and cure periods under the Public Benefit Use Covenant; and
WHEREAS, if CityLink Social Services cease prior to year 15 of the Ground Lease and such cessation continues beyond applicable notice and cure periods, Base Rent will revert to Twelve Thousand Dollars ($12,00 0) per month until services resume and WOL is no longer in default, subject to the terms of the Ground Lease; and 477

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WHEREAS, beginning in year 15, rent under the Ground Lease will reset to One Dollar ($1.00) p er year for the remainder of the lease term, without limiting WOL’s separate obligations under the Public Benefit Use Covenant; and WHEREAS, as a material component of the transaction, WOL will execute and record a Public Benefit Use Covenant against Parce l 1 (and not against Lot C, Lot D, Parcel 2, or the project property ), requiring continued operation of CityLink Social Services for a period of fifteen (15) years; and
WHEREAS, City and WOL have also negotiated a Binding Memorandum of Understanding relating to a put option (the “MOU”), pursuant to which WOL may require City to acquire the project property located on a portion of Parcel 2 upon the occurrence of a qualifying triggering event under WOL’s construction financing, subject to the terms, limitations, and maximum purchase price set forth in the MOU; and WHEREAS, the MOU is separate and independent from the Purchase Agreement and the Ground Lease, and City’s obligations under the MOU are limited to the express acquisition obligations set forth therein; and WHEREAS, City’s aggregate exposure under the MOU shall not exceed Twelve Million Dol lars ($12,000,000.00), inclusive of the purchase price, lender payoff, lien releases, closing costs, attorneys’ fees, enforcement costs, indemnity amounts, and all other amounts payable by or recoverable from City thereunder; and WHEREAS, the MOU does not make City a borrower, guarantor, indemnitor, lender, loan party, successor borrower, or party to any construction loan document, and does not require City to assume, guarantee, purchase, refinance, repay, reimburse, indemnify, or cure WOL’s construction loan; and
WHEREAS, City’s obligations under the MOU are intended to constitute a capped acquisition obligation for a public purpose, and not a guaranty, loan, gift of public funds, pledge of City’s full faith and credit, pledge of tax revenues, or indebtedness or liability in violation of Article XVI, Section 18 of the California Constitution; and
WHEREAS, the City Council finds that the transaction serves valid public purposes, including acquisition of real property interests by City, continued operation of services for homeless, disadvantaged, and vulnerable populations within the City, support for transitional housing and related public benefit uses, and protection of City’s interests under the Promissory Note and related transaction documents; and WHEREAS, the City Council further finds that the transaction is supported by adequate consideration to City, including WOL’s conveyance of Lot C and Lot D, WOL’s lease obligations under the Ground Lease, WOL’s obligations under the Public Benefit Use Covenant, and the public benefits arising from continued CityLink Social Services; and
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WHEREAS, the Ground Lease is part of a concurrent acquisition and leaseback of Lot C and au thorizes continued parking and related uses, and this Resolution does not approve any future development, demolition, construction, entitlement, permit, discretionary approval, or CEQA approval for Lot C , which WOL is required to assess independently during the course of the term and any changes it plans to make on the property, and as a condition to the Ground Lease; and
WHEREAS, to the extent the Surplus Land Act applies to the Ground Lease or any related disposition of City -owned property, the City Counc il desires to make all findings and authorize all actions necessary to comply with or confirm an exemption from the Surplus Land Act before final execution and delivery of the Ground Lease.

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

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

Section 2. CEQA Compliance. The City Council finds that approval of this Resolution, the Purchase Agreeme nt, the Ground Lease, the Public Benefit Use Covenant, and the MOU is not a “project” within the meaning of Section 15378 of the State CEQA Guidelines because the approval does not commit City to any development, construction, demolition, physical alterati on, discretionary entitlement, or other activity that may result in a direct or reasonably foreseeable indirect physical change in the environment. The City Council further finds that, even if the approvals are deemed a project, the approvals are exempt fr om CEQA under the common sense exemption in State CEQA Guidelines Section 15061(b)(3), because it can be seen with certainty that there is no possibility that the approvals, in and of themselves, will have a significant effect on the environment. The appro vals will transfer ownership of Lots C and D to the City, lease Lot C back to WOL for continuation of the existing use, and continue the operation of existing CityLink Social Ser vices. The approvals do not authorize any change in land use, new development, or other physical alteration of Lots C or D. Accordingly, it can be seen with certainty that there is no possibility that the approvals may have a significant effect on the environment.

Nothing in this Resolution approves or commits City to approve any fu ture discretionary entitlement, permit, development, construction, demolition, improvement, CEQA determination, or other governmental approval. Any future project, use, improvement, or discretionary approval shall remain subject to all applicable laws, including CEQA, and City retains its full discretion as a governmental agency.

Section 3. Surplus Land Act Findings and Compliance. The City Council finds that the Ground Lease is being entered into as part of City’s concurrent acquisition of Lot C and Lot D and is intended to provide WOL with continued use of Lot C for parking and related uses, subject to City’s reserved rights, and not for the purpose of approving 479

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development or demolition of Lot C. The City Council further finds that this Resolution does not approve any development or demolition on Lot C.

To the extent the Ground Lease is determined to be subject to the Surplus Land Act, the City Council hereby authorizes the City Manager, or designee, in consultation with the City Attorney, to take all actions necessary to comply with the Surplus Land Act or confirm an applicable exemption before final execution and delivery of the Ground Lease, including, if appropriate, preparation and submission of any required notices, declarations, findings, or exemptio n documentation to the California Department of Housing and Community Development. The City Manager shall not finally execute or deliver the Ground Lease unless the City Attorney determines that the City has complied with, or is exempt from, applicable Surplus Land Act requirements.

Section 4. Approval of Purchase Agreement. The City Council hereby approves the Purchase Agreement with WOL for City’s acquisition of Lot C and Lot D. The consideration for the acquisition shall be City’s forgiveness, cancellati on, and satisfaction, effective as of closing, of all amounts owed under the Promissory Note dated March 22, 2023, including all unpaid principal, accrued interest, default interest, late charges, and other sums due thereunder, as provided in the Purchase Agreement.

Section 5. Approval of Ground Lease. The City Council hereby approves the Ground Lease for Lot C, pursuant to which City will lease Lot C back to WOL for a term of fifty -five (55) years, subject to the rent structure, service -related rent reduct ion, reserved City rights, maintenance obligations, default provisions, CEQA, prevailing wage, insurance, indemnity, assignment, and other terms set forth in the Ground Lease.

Section 6. Approval of Public Benefit Use Covenant. The City Council hereby approves the Public Benefit Use Covenant requiring continued operation of CityLink Social Services for a period of fifteen (15) years. The City Council finds that the Public Benefit Use Covenant shall be recorded against Parcel 1 only, and shall not encumber Lot C, Lot D, Parcel 2, or the project property, except to the extent expressly stated in the Public Benefit Use Covenant.

Section 7. Approval of MOU. The City Council hereby approves the MOU. The City Council finds that the MOU is separate and independent from the Purchase Agreement and the Ground Lease, and that approval of the MOU does not make City a borrower, guarantor, indemnitor, loan party, successor borrower, or party to any construction loan document.

Section 8. Maximum City Obligation Under MOU. The City Council hereby approves a maximum City acquisition obligation under the MOU not to exceed Twelve Million Dollars ($12,000,000) for all other amounts payable by or recoverable from City under or in connection with the MOU.

Section 9. Appropriation and Reservation of Funds. The City Council hereby appropriates, reserves, encumbers, or otherwise sets aside funds in an amount not to 480

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exceed Twelve Million Dollars ($12,000,000) for the potential acquisition obligation expressly set forth in the MOU. Any payment by City under the MOU shall be payable only from funds lawfully available and appropriated for that purpose, shall be subject to the terms and limitations of the MOU, and shall not exceed Twelve Million Dollars ($12,000,000).

Section 1 0. Authority to Implement. The City Manager, or designee, is hereby authorized to execute the Purchase Agreement, the Ground Lease, the Public Benefit Use Covenant, the MOU, certificates of acceptance, escrow instructions, closing documents, and such other documents and instruments as are reasonably necessary to implement the transactions approved by this Resolution, subject to approval as to form by the City Attorney. The City Manager’s authority shall not include authority to increase City’s aggregate exposure under t he MOU above Twelve Million Dollars ($12,000,000), convert City’s obligations into a guaranty or loan assumption, waive any required Surplus Land Act compliance or exemption determination, or approve any future discretionary entitlement or CEQA determinati on except through the City’s ordinary governmental approval processes.

Section 11. Independent Agreements. The City Council finds and confirms that the Purchase Agreement, Ground Lease, Public Benefit Use Covenant, and MOU are related components of the ove rall transaction, but shall operate independently in accordance with their respective terms. No agreement shall be deemed to modify, limit, waive, or supersede another agreement except to the extent expressly stated in the applicable agreement.

Section 12. 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 provision or application, and to this end the provisions of this Resolution are severable.

Section 13. Effective Date. This Resolution shall become effective immediately upon its adoption by the City Council, and the City Clerk shall certify t he vote adopting this Resolution.

APPROVED AND ADOPTED this 8th day of September, 2026.

READ AND APPROVED AS TO LEGAL FORM:

____________________________________
City Attorney

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ATTACHMENT NO. 1
I, Germaine Key, City Clerk of the City of Fontana, California, do hereby certify that the foregoing Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting of said City Council on the 8th day of September, 2026, 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

482
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BINDING MEMORANDUM OF UNDERSTANDING
This Binding Memorandum of Understanding (this “Agreement”) is entered into as of , 2026 (the “Effective Date”) by and between WATER OF LIFE COMMUNITY CHURCH, a California non-profit corporation (“WOL”) and the CITY OF FONTANA, a California municipal corporation (the “City”) (each a “Party” and collectively the “Parties”) with reference to the following facts:

RECITALS
A. WHEREAS, WOL is the owner of that certain real property located at 16069 Arrow Blvd, Fontana, CA 92335, in the County of San Bernardino, California (“County”), with a County APN of 0232- 201-13-0000, as more particularly described on Exhibit “A” attached hereto.

B. WHEREAS, WOL is actively undertaking a lot line adjustment, subdivision, parcel map, or similar land division or reconfiguration with respect to the real property described on Exhibit “A” attached hereto, pursuant to which such real property will be legally reconfigured, including creation of the portion thereof upon which the Project contemplated herein will be developed (the “ Lot Line Adjustment”).

C. WHEREAS, WOL intends to develop the Project (defined below) on a portion of the Property (defined below), and in connection therewith is seeking to obtain construction financing in the form of a Construction Loan (defined below).

D. WHEREAS, in order to facilitate WOL’ s ability to obtain the Construction Loan and complete the Project, the City has agreed, subject to the terms and conditions set forth herein, to purchase the Property for a fixed purchase price, and to accept certain related notice and acquisition obligations with respect to the Property, upon the occurrence of any Triggering Event (defined below) if WOL elects to exercise its option rights more particularly set forth in this Agreement.

E. WHEREAS, concurrently with the execution of this Agreement, WOL and the City are entering into a separate transaction pursuant to which, among other things, WOL will convey certain real property interests to the City, and, in consideration therefor, the City will forgive and fully satisfy that certain Promissory Note dated March 22, 2023, in the original principal amount of $3,040,000.00, together with all amounts owing thereunder; and the Parties will enter into or deliver certain related transaction documents, including any applicable conveyance documents, leaseback, use covenant, and other agreements required thereunder, and the Parties will consummate the related exchange, conveyance, leaseback, public benefit, and closing transactions contemplated thereby (the “ Land Exchange Transaction”).

F. WHEREAS, the City's obligations under this Agreement, including its obligation to purchase the Property upon exercise of the Put Option, are given in consideration of, and as material inducement by, the mutual covenants herein and the benefits to the City under the Land Exchange Transaction, the sufficiency of which the City acknowledges.

NOW THEREFORE, in consideration of the recitals set forth above, the mutual agreements set forth herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as set forth below.

ATTACHMENT NO. 2
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AGREEMENT

1. Incorporation of Recitals; Definitions . The foregoing Recitals, along with all of the exhibits attached hereto, are hereby incorporated into this Agreement by reference, as if fully set forth herein, as the mutual understandings and intentions of the Parties and to inform the terms of this Agreement.

In addition to those defined terms set forth in the Recitals, the following capitalized terms used in this Agreement shall have the following definitions:

1.1. “City Support” means only the limited support provided by the City pursuant to this Agreement with respect to the Put Option. City Support shall not include any obligation under any Construction Loan Document or any separate guaranty, other lender document, or other obligation of City with respect to the Construction Loan, nor shall it include any cost of satisfying WOL’ s requirements for conveying to the City fee title to the Property in the condition required by the Option Documents, upon any exercise of the Put Option by WOL, which exceeds the Purchase Price.

1.2. “Construction Loan” means the construction and/or permanent financing to be obtained by WOL from one or more Lenders for the purpose of financing the development, construction, and completion of the Project, which financing may include one or more loans, credit facilities, or similar financing arrangements, and any refinancing, modification, extension, or replacement thereof, in such principal amount and on such terms as may be determined by WOL. For purposes of this Agreement, the term “Construction Loan” shall include any permanent loan or other financing that replaces, refinances, or succeeds the initial construction financing, whether upon completion of construction or otherwise.

1.3. “Construction Loan Documents ” means the loan agreement, promissory note, deed of trust, security agreement, assignments, indemnities, guaranties, disbursement agreements, completion documents, certificates, consents, and all other documents, instruments, and agreements evidencing, securing, governing, or otherwise executed in connection with the Construction Loan, as the same may be amended, modified, extended, refinanced, replaced, or supplemented from time to time.

1.4. “County Grant Documents ” means (a) that certain Regulatory Agreement and Declaration of Restrictive Covenants, dated February 6, 2024, and (b) that certain Revocable Grant Agreement, dated February 6, 2024, each by and between WOL and the County, together with any amendments, modifications, supplements, implementing agreements, or successor documents thereto.

1.5. “Lender” means any Person or Persons providing or committing to provide all or any portion of the Construction Loan, including, without limitation, any bank, financial institution, governmental entity, quasi-governmental entity, fund, investor, or other financing source, together with their respective successors, assigns, participants, agents, and any replacement or refinancing lenders with respect thereto.

1.6. “Lender Coordination Documents ” means one or more agreements among WOL, the City, and/or the applicable Lender setting forth, as reasonably required by the Lender, arrangements for notice to the City and WOL of a default under the Construction Loan Documents, the Lender’ s recognition of the Put Option and of any collateral assignment thereof, and such standstill and coordination arrangements as are reasonably necessary to permit the exercise and consummation of the Put Option notwithstanding the Lender’ s senior lien position. The Lender Coordination Documents shall provide for the release or reconveyance of all liens encumbering the Property as security for the Construction Loan upon the Lender's receipt of all funds in the amount secured by such liens. City shall be required to enter into a Lender Coordination Document only to the extent such document is permitted by ATTACHMENT NO. 2
484
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applicable law and limited to the Put Option or substantially related to the recognition, exercise, and closing mechanics of the Put Option.

1.7. Purchase Price” means Twelve Million and No/100 Dollars ($12,000,000.00), being the absolute fixed price payable by the City for the Property upon exercise of the Put Option, including, without limitation, those prorations and closing adjustments customarily payable by buyers of real property in the County, as provided in the Option Documents. The Purchase Price shall be the absolute maximum aggregate amount payable by, recoverable from, or otherwise chargeable to the City in connection with the Construction Loan, the Project, the Property, the City Support, the Put Option, any acquisition of the Property, or any related document, obligation, or transaction. The Purchase Price includes, without limitation, any amounts paid by the City to or for the benefit of any Lender to obtain a release of liens securing the Construction Loan, all principal, interest, default interest, late charges, lender fees, attorneys’fees, costs, expenses, title charges, escrow fees, closing costs, recording charges, transfer taxes, protective advances, reimbursement obligations, indemnity obligations, enforcement costs, completion obligations, carry obligations, cure amounts, payoff amounts, acquisition amounts, and all other amounts of any kind or character, all of which shall be satisfied from, and shall not be in addition to, the Purchase Price. Any such amounts in excess of the Purchase Price shall be the sole obligation of WOL as provided in Section 4. In no event shall the City be required to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, replenish any reserve, or pay any amount in excess of the Purchase Price. Any City payment obligation is subject to all legally required City approvals and appropriations and shall be payable only from funds lawfully available and appropriated for that purpose.

1.8. “Maximum Loan Amount”means Eleven Million and No/100 Dollars ($11,000,000.00), which amount shall be the maximum aggregate principal amount of the Construction Loan and any refinancing, modification, extension, replacement, or restructuring thereof, unless otherwise approved by the City in writing in the City’ s sole and absolute discretion.

1.9. “Option Documents ” means the purchase and sale agreement, escrow instructions, conveyance instruments, and other documents reasonably necessary or customary to implement and close the Put Option in accordance with Section 4, including any documents relating to the City’ s taking title subject to the County Grant Documents, and to coordinate the same with the Construction Loan Documents and applicable Lender requirements. For the avoidance of doubt, no such document shall require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, or become liable under any Construction Loan Document.

1.10. “Project” means the housing development and related improvements to be developed by WOL on all or any portion of the Property following completion of the Lot Line Adjustment, together with associated buildings, facilities, infrastructure, site improvements, utilities, parking, landscaping, and related uses, substantially consistent with the development concept reflected in plans and applications submitted in connection therewith, including Building Plans (BPCH25-01143), Rough Grade Plans (GRADE-26-00007), and Precise Grading Plans (BPCH25-01140), as any of the foregoing may be amended, supplemented, revised, reconfigured, phased, approved, replaced, or otherwise modified from time to time.

1.11. “Person” means any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental or quasi- governmental entity, or other legal entity.

1.12. “Property” means that certain portion of the real property located at 16069 Arrow Blvd, Fontana, California, as more particularly described on Exhibit “A” attached hereto, upon which the Project is to be developed following completion of the Lot Line Adjustment, as such portion is legally ATTACHMENT NO. 2
485
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created, configured, or described pursuant thereto, together with any related easement rights, appurtenances, and interests associated therewith, and as the same may thereafter be modified, adjusted, or reconfigured in accordance with applicable law. All references in this Agreement to the Property shall be deemed to refer to the Project parcel or parcels as finally configured pursuant to the Lot Line Adjustment.

1.13. “Put Option”means WOL’ s right, exercisable in WOL’ s sole discretion upon the occurrence of a Triggering Event, to require the City to purchase the Property for the Purchase Price in accordance with Section 4. Upon a valid exercise, the City shall be obligated to purchase the Property, and shall have no right to decline, condition, or defer such purchase except as expressly set forth in this Agreement. The Put Option shall not require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, become a party to any Construction Loan Document, cure any default, complete the Project, reimburse WOL or any Lender, indemnify WOL or any Lender, or succeed to WOL’ s obligations under the Construction Loan Documents; the City’ s sole obligation upon exercise is to purchase the Property for the Purchase Price in accordance with Section 4. The Put Option shall expire upon the earlier of (i) full repayment of outstanding principal and interest under the Construction Loan, and (ii) the 20th anniversary of the Effective Date.

1.14. “Term” means the term of this Agreement as determined in accordance with Section 6.1.

2. Purpose and Framework. This Agreement sets forth the binding agreement of the Parties with respect to the principal terms and conditions pursuant to which, for the duration of the Term, (a) WOL shall hold the Put Option, and (b) upon the occurrence of a Triggering Event, WOL shall have the right, in its sole discretion, to exercise the Put Option and require the City to acquire the Property and apply the Purchase Price to obtain a release of the liens securing the Construction Loan, all as more particularly described herein. This Agreement is intended to be binding with respect to the matters expressly set forth herein. Except for the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option, no provision of this Agreement shall require the City to make any payment, assume any obligation, execute any document, cure any default, acquire any property, or take any other action that would cause the City’ s aggregate exposure to exceed the Purchase Price. This Agreement is intended to be the sole agreement, undertaking, and instrument governing the Put Option, City Support, and Purchase Price. No Construction Loan Document shall expand, modify, supplement, or otherwise affect the City Support, the Put Option, or the Purchase Price. This Agreement and City’ s obligations hereunder shall not constitute a guaranty of the Construction Loan, an assumption of any Construction Loan Document, a pledge of City’ s full faith and credit, a pledge of tax revenues, or an indebtedness or liability in violation of Article XVI, Section 18 of the California Constitution.

3. Construction Loan.

3.1. Financing Process. WOL shall have the exclusive right during the Term, in its sole and absolute discretion, to pursue, structure, negotiate, obtain, close, amend, modify, extend, refinance, replace, or otherwise restructure the Construction Loan, including selecting the Lender, determining its structure and components (including any construction and/or permanent financing components), and negotiating the economic and business terms thereof, subject only to the Maximum Loan Amount. The City shall not be part of the Construction Loan review, underwriting, approval, negotiation, or documentation process, and the City shall have no obligation to review, approve, execute, deliver, or be a party to any Construction Loan Document.

3.2. Agreed City Support Parameters . No City Support shall impose any payment, performance, reimbursement, indemnity, completion, carry, operating, cure, payoff, acquisition, assumption, or other obligation on the City in excess of the Purchase Price. Notwithstanding anything to ATTACHMENT NO. 2
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the contrary contained herein, the City shall not be required to undertake obligations that: (i) are unrelated to, or not reasonably connected with, the Construction Loan, the Construction Loan Documents, or the Project or otherwise reasonably anticipated by the terms and conditions of this Agreement; (ii) require the City to make capital contributions, invest equity, fund project costs, or provide voluntary operating subsidies independent of obligations expressly undertaken by the City in this Agreement, the Option Documents or any separate written agreement; (iii) require the City to pledge, encumber, mortgage, or grant a lien or security interest in any property, revenues, or other assets of the City (provided, however, that no interest in the Property arising out of this Agreement shall be deemed an asset of the City for the purposes of this clause (iii)); (iv) require the City to assume ownership of, or day -to-day managerial or operational responsibility for, WOL or the development, construction, leasing, management, or operation of the Project prior to any acquisition of the Property pursuant to Section 4; (v) require the City to make representations, warranties, certifications, or covenants regarding matters outside the City’ s reasonable knowledge, authority, organization, legal capacity; (vi) are expressly prohibited by applicable law or beyond the lawful authority of the City to undertake; (vii) would cause the City’ s aggregate exposure to exceed the Purchase Price; (viii) would constitute an uncapped guaranty, open -ended indemnity, pledge of the City’ s full faith and credit, or obligation payable from future- year revenues without required approvals; or (ix) would require the City to pay, assume, reimburse, cure, acquire, or otherwise support any amount in excess of the Purchase Price.

3.3. City Cooperation. In connection with WOL’ s efforts to obtain, close and perform its obligations under the Construction Loan, the City shall reasonably cooperate with WOL and the applicable Lender, at no cost or expense to City, including by participating in reasonable discussions and providing such information, confirmations, and documentation regarding the City and/or its obligations under this Agreement as may be reasonably requested in connection with underwriting, structuring, and closing the Construction Loan, or any sale or assignment of all or a portion of any interest of a Lender therein, subject to applicable law, including, without limitation, expressly acknowledging in writing its obligations under this Agreement subject to the terms and conditions of Section 3.4; provided that the City shall not be required to provide any information, confirmation, certificate, document, approval, or undertaking that expands the City’ s obligations, limits the City’ s discretion, or creates lender reliance, beyond the express terms of this Agreement, or which is inconsistent with the Purchase Price. The City’ s review and participation rights shall be exercised in accordance with, and shall not expand or modify, the review and execution procedures set forth in Section 5. Any Construction Loan Document that references the City, the City Support, the Purchase Price, the Put Option, or any other City obligation or support shall state that any such City Support is limited solely to the rights and obligations expressly set forth in this Agreement and is subject in all cases to the Purchase Price. No Construction Loan Document shall name the City as a borrower, guarantor, indemnitor, obligor, pledgor, grantor, assignee, successor borrower, purchaser of the Construction Loan, purchaser of the Lender’ s interest, or party, impose or purport to impose any obligation on the City, require any City approval or consent, impair the City’ s rights under this Agreement, or create any claim against the City, except to the extent expressly set forth in this Agreement.

3.3.1. No Separate City Loan Documents . The City shall not be required to execute any guaranty, reimbursement agreement, indemnity, consent, direct agreement, subordination agreement, intercreditor agreement, loan assumption agreement, lender consent, certificate, legal opinion, estoppel, or other document in favor of or for the benefit of any Lender (other than the Lender Coordination Documents and the Option Documents contemplated by this Agreement). Any Lender’ s rights against the City, if any, shall arise solely under this Agreement and shall be subject to the Purchase Price and all other limitations set forth herein.

3.4. Reliance by Lender; Disclosure. WOL may disclose this Agreement to any actual or prospective Lender and its advisors in connection with WOL’ s efforts to obtain the Construction Loan, and each Lender shall be permitted to disclose this Agreement to prospective investors, creditors and assigns ATTACHMENT NO. 2
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of its interest in the Construction Loan. Notwithstanding, the City acknowledges that WOL and any such Lender and its respective, investors, creditors, successors and assigns, may rely on this Agreement solely for purposes of evaluating and underwriting the Construction Loan. Notwithstanding the foregoing, this Agreement does not, by itself, constitute a guaranty or other City Support in favor of any Lender, and no Lender shall be deemed a third-party beneficiary hereof, except as expressly set forth herein. The City acknowledges that any Lender may rely on this Agreement solely for the limited purpose of confirming the City Support expressly set forth herein. No such reliance shall expand the City Support, modify the Purchase Price, make the City a party to any Construction Loan Document, or create any City obligation not expressly set forth in this Agreement. Any Lender accepting or relying on this Agreement shall be deemed to acknowledge that the City has no obligation with respect to the Construction Loan except as expressly provided in this Agreement and subject in all cases to the Purchase Price. No Lender shall have any right to require the City to assume, purchase, refinance, repay, reimburse, indemnify, cure, or otherwise become liable for the Construction Loan. For the avoidance of doubt, the City’ s obligation to purchase the Property upon a valid exercise of the Put Option is an express obligation of the City set forth in this Agreement upon which any Lender may rely, subject in all cases to the Purchase Price and the terms of this Agreement. WOL shall deliver to City, within two (2) business days after receipt, any written notice of default, acceleration, foreclosure, enforcement, payoff demand, lien-release condition, or other material written communication from Lender relating to the Construction Loan, the Property, or any Triggering Event. Delivery of any such notice shall not require City to cure any default, assume any obligation, or make any payment except as expressly provided in this Agreement. WOL shall provide the City, upon request, reasonably current information regarding the outstanding balance of the Construction Loan, the status of any default received by WOL, and the Lender contact responsible for payoff and lien-release coordination. Delivery of any notice or information under this Section shall be for informational and coordination purposes only and shall not require the City to cure any default, assume any obligation, make any payment, or take any action except as expressly required under this Agreement.

4. Put Option; Acquisition. In consideration of the benefits to the City associated with the Land Exchange Transaction and the Project, which are hereby acknowledged by the City, along with the value of the Property itself (as represented by the Purchase Price payable pursuant to the Put Option), to be fair and valuable consideration for the rights of WOL to enforce the Put Option, commencing upon the closing of the Construction Loan, WOL shall have, and the City hereby grants to WOL, the Put Option, exercisable in accordance with this Section 4. The Put Option is intended to permit WOL, upon any Triggering Event that may occur during the Term, to require the City to purchase the Property for the Purchase Price, all or a portion of which shall be applied by WOL to obtain a release of any and all liens securing the Construction Loan. Upon a valid exercise of the Put Option, the City hereby covenants, and shall be irrevocably obligated to purchase the Property for the Purchase Price in accordance with this Section 4 and the Option Documents, and the City’ s obligation to complete such purchase shall not be conditioned on the City’ s discretion or election to cure any default, payoff any loan, or assume any obligation of WOL relating to the Project or the Property, or any other condition not expressly set forth herein.

4.1. Purchase Price. Upon exercise of the Put Option, the City shall purchase the Property for the Purchase Price in strict accordance with this Section 4. The Purchase Price shall be deposited by the City into escrow during the Escrow Period (as defined below) and disbursed from escrow as follows: (a) first, to the Lender in the amount required to pay off the Construction Loan and obtain the release and reconveyance of the liens securing it; (b) second, to pay all other costs payable by WOL pursuant to the Option Documents, and (c) third, the balance, if any, to WOL. If the amount required to release such liens and pay such costs exceeds the Purchase Price, WOL shall deposit the deficiency into escrow at or before closing, and in no event shall the City be required to pay more than the Purchase Price. The payoff of the Construction Loan shall be satisfied from the Purchase Price and shall not constitute a separate, additional, or offsetting obligation of the City, nor reduce the total consideration payable by the City below ATTACHMENT NO. 2
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the Purchase Price. In the event that the Put Option is exercised during the Term and the Term would expire during the Escrow Period, the Parties agree that the Term and the term of the Option Documents shall be automatically extended to expire upon the expiration of the Escrow Period.

4.2. Triggering Event; City Rights and Obligations . Upon the occurrence of a Triggering Event, and following any notice and cure periods afforded to the City under the Lender Coordination Documents (if any), WOL shall have the right, in its sole discretion, to exercise the Put Option by delivering written notice to the City (the “Exercise Notice”). Upon delivery of a valid Exercise Notice, the City shall be unconditionally obligated to purchase the Property for the Purchase Price and to close such purchase within ninety (90) days thereafter (or such shorter or longer period as required by the Lender Coordination Documents; as applicable, the “Escrow Period”), subject only to the closing mechanics set forth in this Section 4. The City shall have no right to decline, condition, or defer such purchase. As used herein, “Triggering Event” means WOL's receipt of a written notice of default from the Lender under the Construction Loan Documents that continues beyond all applicable notice and cure periods that permits Lender to accelerate the Construction Loan or exercise remedies against the Property or the Project. Any Exercise Notice shall include copies of the applicable Lender default notice and the then-current payoff demand or payoff estimate for the Construction Loan.

4.3. Acquisition Mechanics. The purchase of the Property upon exercise of the Put Option shall be consummated through escrow in accordance with the disbursement provisions of Section

4.1. The Put Option may be exercised by WOL or, pursuant to a collateral assignment permitted under Section 13, by the Lender as collateral assignee, and the City shall recognize and honor an exercise by such collateral assignee to the same extent as an exercise by WOL.

4.4. Basic Terms of Option Documents . The Option Documents shall contain such terms, provisions, rights, obligations, conditions, covenants, remedies, and transaction mechanics as are reasonably necessary or customary to implement the acquisition contemplated by this Section 4 and to coordinate such rights with the Construction Loan Documents and the Lender Coordination Documents, provided that no such document shall impose any obligation on the City in excess of the Purchase Price nor extend or delay the City’ s payment of the Purchase Price beyond the Escrow Period.

4.4.1. Post-Acquisition Property Obligations.If the City acquires the Property, the City shall accept the Property subject to the County Grant Documents and any related covenants, restrictions, compliance obligations, reporting obligations, and amounts then owing or thereafter becoming owing thereunder, in each case subject to any required third- party approvals and the Purchase Price; provided that no such acceptance shall require the City to assume the Construction Loan or any obligation of WOL under the Construction Loan Documents.

4.4.2. Customary Transaction Terms . Representations and warranties, covenants, indemnities, conditions precedent, title matters, default provisions, dispute resolution provisions, and such other customary transaction terms and protections as are consistent with this Agreement and subject to the Purchase Price.

4.4.3. Closing and Transfer Mechanics . Customary title review, escrow arrangements, lender lien release procedures, conveyancing documentation, prorations, cost allocations, release documentation, and such other closing mechanics as are reasonably necessary to consummate the acquisition contemplated by this Agreement in accordance with the terms and conditions of this Section 4.

5. Definitive Documents.

5.1. Preparing Definitive Documents . WOL and the City shall cooperate in good ATTACHMENT NO. 2
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faith, at no cost or expense to the City, to promptly prepare, negotiate, and finalize the Option Documents in connection with the Put Option and pay off of the lien after a Triggering Event. The Option Documents shall be prepared and finalized upon exercise of the Put Option, except that if the applicable Lender requires the form of the Option Documents to be agreed earlier, the Parties shall cooperate in good faith to do so.

WOL shall have sole responsibility for preparing and finalizing the Construction Loan Documents with the applicable Lender, and the City shall not be a party to, or required to approve, the Construction Loan Documents. If the Parties have not agreed upon the form of the definitive purchase and sale agreement and related Option Documents within thirty (30) days after the form is first required (whether upon delivery of the Exercise Notice or upon the Lender’ s earlier request; as applicable, the “Initial Documentation Period”), the purchase and sale of the Property shall be documented using the then-current AIR Commercial Real Estate Association Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate (or the AIR form most applicable to the Property; as applicable , the “AIR Form”), modified only as necessary to conform to the terms of this Agreement, including the Purchase Price, the mandatory and non-contingent nature of the City’ s obligation to purchase upon exercise of the Put Option, and the disbursement provisions of Section 4.1; provided that the City’ s payment of the Purchase Price shall not be subject to any financing contingency or discretionary approval of the City Council or any other board or agency that has not been obtained upon the City’ s execution of this Agreement as of the Effective Date, provided that City Council approval of this Agreement shall constitute City’ s approval of the potential acquisition obligation expressly set forth herein, subject to the Purchase Price and the express terms and limitations of this Agreement. No additional discretionary City Council approval shall be required solely to pay the Purchase Price upon a valid exercise of the Put Option, provided that the exercise and closing comply with this Agreement and no Option Document expands City’ s obligations. In the event of any conflict between such AIR form and the terms of this Agreement, the terms of this Agreement shall control.

If the Parties are unable to reach agreement on any modifications to the terms of the AIR Form within thirty (30) days after the expiration of the Initial Documentation Period, the AIR Form shall be deemed modified to conform to this Agreement and shall be used to close the purchase of the Property. Any unresolved terms shall be limited to ministerial escrow, title, payoff, lien-release, prorations, and closing mechanics customarily handled by escrow and title and no unresolved term shall delay City’ s obligation to close if WOL is otherwise able to convey the Property in accordance with this Agreement.

5.2. No Separate City Loan Documents.The Parties acknowledge and agree that this Agreement is intended to be the sole agreement, undertaking, and instrument on which WOL or any Lender may rely for any City Support. Except for this Agreement, and any document the City later elects to execute in connection with an exercise of the Put Option, the City shall have no obligation to prepare, negotiate, review, approve, execute, deliver, or be a party to any Construction Loan Document. The Construction Loan Documents may reference this Agreement as the sole source of any City Support, but shall not modify, expand, supplement, impair, or conflict with this Agreement. Any provision in any Construction Loan Document that purports to impose obligations on the City beyond this Agreement shall be void and unenforceable against the City. No failure by the City to review, comment on, object to, or receive any Construction Loan Document shall be deemed approval, consent, waiver, acceptance, or agreement by the City. No Construction Loan Document shall require or imply that the City has assumed, guaranteed, purchased, refinanced, repaid, reimbursed, indemnified, or otherwise become liable for the Construction Loan.

6. Term; Default; Effect of Termination.

6.1. Term. This Agreement shall become effective as of the Effective Date and shall remain in full force and effect until the earliest to occur of: (a) the mutual written agreement of the Parties to terminate this Agreement; (b) WOL’ s full repayment of the Construction Loan and the reconveyance or release of all liens encumbering the Property as security for such repayment; (c) the consummation of the transaction contemplated by the Put Option; or (d) a final, non-appealable order of a court of competent ATTACHMENT NO. 2
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jurisdiction declaring performance of the material obligations contemplated by this Agreement unlawful or permanently enjoining such performance. No Party shall have any unilateral right to terminate, rescind, withdraw from, or decline performance of this Agreement except as expressly set forth in this Section. No termination of this Agreement shall release WOL from transfer restrictions, accrued obligations, or any obligations that expressly survive termination.

6.2. Default. If either Party materially defaults in the performance of any material obligation under this Agreement, and such default continues for a period of ten (10) business days after written notice from the non-defaulting Party specifying the nature of such default, then the non-defaulting Party shall be entitled to pursue any rights or remedies available at law or in equity, including specific performance, injunctive relief, and damages; provided, however, that no default by WOL shall release the City from its obligation to pay the Purchase Price for the Property if title is conveyed to the City free and clear of all liens securing repayment of the Construction Loan notwithstanding such default. If the nature of such default is such that it cannot reasonably be cured within such ten (10) business day period, the defaulting Party shall not be deemed in default so long as it commences cure within such period and thereafter diligently prosecutes such cure to completion (or, if WOL is the defaulting Party and proceeds of the Purchase Price are sufficient to cure any such default when such close of escrow occurs, escrow instructions executed by the City and WOL requiring the payment of such amount as a condition of closing shall cure such default). The City shall not be in default for refusing to review, approve, execute, deliver, or perform under any document or transaction not expressly required by this Agreement, or for refusing to take any action that would require the City to pay in excess of the Purchase Price, is not authorized by applicable law, or is inconsistent with this Agreement.

6.3. Effect of Termination; Survival. Termination of this Agreement shall not release either Party from liability for any breach occurring prior to such termination, nor impair any rights or remedies accrued prior thereto. Any provisions of this Agreement which by their nature are intended to survive termination, including provisions relating to confidentiality, dispute resolution, enforcement of rights and remedies, and accrued liabilities or obligations, shall survive such termination.

7. Remedies. In the event of any breach or threatened breach of this Agreement by WOL, City shall be entitled to pursue any and all rights and remedies available at law or in equity, including, without limitation, damages, injunctive relief, and specific performance. In the event of any breach or threatened breach of this Agreement by City, WOL shall not be entitled to recover monetary damages from the City, and WOL’ s sole remedies against the City shall be declaratory relief or specific performance of the City’ s express, non-discretionary obligations, including the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option. The Parties acknowledge and agree that a breach of this Agreement may cause irreparable harm for which monetary damages alone may be an inadequate remedy, and that equitable relief, including specific performance and injunctive relief, shall therefore be available to enforce the terms of this Agreement, without the necessity of proving actual damages or posting bond, except as required by applicable law. All rights and remedies under this Agreement shall be cumulative and not exclusive of any other rights or remedies available at law or in equity. In any action or proceeding arising out of or relating to this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’fees and costs, and, in the case of WOL, such recovery shall not be limited by the Purchase Price. Notwithstanding anything to the contrary, except for the City’ s obligation to purchase the Property for the Purchase Price upon a valid exercise of the Put Option, which obligation shall be specifically enforceable, and except for the recovery of attorneys’fees as set forth herein, no remedy, including specific performance or injunctive relief, shall require the City to approve any document, execute any document, make any payment, assume any obligation, cure any default, acquire any property, purchase the Construction Loan, purchase any Lender interest, reimburse or indemnify any party, become liable under any Construction Loan Document, or take any other action that would exceed the Purchase Price, violate applicable law, or require an unlawful debt or liability.

ATTACHMENT NO. 2
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8. Representations and Warranties. Each Party represents and warrants to the other Party that: (a) it has full power, right, and authority to execute, deliver, and perform this Agreement and the transactions contemplated hereby; (b) the execution, delivery, and performance of this Agreeme nt have been duly authorized by all necessary action required of such Party; and (c) this Agreement constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to applicable bankruptcy, insolvency, and other laws affecting creditors’rights generally and general principles of equity. Notwithstanding the foregoing, the City’ s obligations under this Agreement and any related documents are subject to applicable law, required City Council approvals, and the Purchase Price.

Nothing in this Agreement shall be construed as a pledge of the City’ s full faith and credit, a pledge of tax revenues, an obligation payable from future fiscal year revenues without required approvals, or an obligation of the City in excess of the Purchase Price.

9. Governing Law; Venue . This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in San Bernardino County, California, and each Party irrevocably submits to the jurisdiction of such courts.

10. Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, understandings, letters of intent, memoranda, term sheets, and agreements, whether oral or written, relating to such subject matter. No Party has relied upon any representation, warranty, promise, covenant, agreement, or undertaking not expressly set forth in this Agreement.

11. Amendments; Waivers. This Agreement may be amended, modified, supplemented, or waived only by a written instrument expressly referring to this Agreement and executed by duly authorized representatives of each Party. No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party against whom such waiver is sought to be enforced. No waiver of any breach or default shall be deemed a waiver of any preceding, concurrent, or subsequent breach or default.

12. Severability. If any provision of this Agreement, or the application thereof to any Person or circumstance, is held to be invalid, illegal, unenforceable, or incapable of being enforced to any extent by a court of competent jurisdiction, the remainder of this Agreement, and the application of such provision to other Persons or circumstances, shall not be affected thereby and shall be enforced to the greatest extent permitted by law; provided, however, that if such invalidity, illegality, or unenforceabilitymaterially alters the economic substance, allocation of rights, or allocation of obligations contemplated by this Agreement, either Party may seek equitable reformation to give effect as nearly as possible to the original intent of the Parties.

13. Assignment; Successors and Assigns . Neither Party may assign, delegate, transfer, or otherwise convey any of its rights or obligations under this Agreement without the prior written consent of the other Party, not to be unreasonably withheld; provided however, that WOL may, without the City’ s consent, collaterally assign to the Lender, as security for the Construction Loan, all or any portion of WOL’ s rights under this Agreement, including the Put Option and WOL’ s rights to notice, cure, and the Purchase Price and other acquisition consideration hereunder (collectively, the “Assigned Rights”), and any such collateral assignee shall be entitled to exercise the Put Option and enforce the Assigned Rights in accordance with the applicable collateral assignment, subject in all cases to the Purchase Price and all terms, conditions, limitations, and defenses of the City set forth in this Agreement. In addition, any Person that acquires the Property or the Assigned Rights (or WOL’ s interest therein) through foreclosure, trustee's sale, deed in lieu of foreclosure, or other exercise of remedies under the Construction Loan Documents shall succeed to WOL’ s right to exercise the Put Option and enforce the Assigned Rights as WOL’ s successor, in ATTACHMENT NO. 2
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each case subject in all cases to the Purchase Price and all terms, conditions, limitations, and defenses of the City set forth in this Agreement. The City shall recognize and honor an exercise of the Put Option by any such collateral assignee or successor to the same extent as an exercise by WOL. Concurrently with the closing of the Construction Loan, and thereafter from time to time at the Lender’ s reasonable request, WOL shall execute, deliver, and, where applicable, record or file such collateral assignments, UCC financing statements, memoranda of option, and other instruments as the Lender reasonably requires to assign and perfect its security interest in the Assigned Rights, whether the Assigned Rights (or any of them) constitute a general intangible, an interest in real property, or both, and by whichever method or methods of perfection may be applicable, together with such further instruments and actions as may be necessary or appropriate to perfect, continue, and evidence the same under applicable law. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.

14. Notices. Any notice, demand, request, consent, approval, objection, communication, or other notice required or permitted under this Agreement shall be in writing and shall be deemed given: (a) when personally delivered; (b) one (1) business day after deposit with a nationally recognized overnight courier, charges prepaid; (c) upon confirmed transmission by electronic mail during normal business hours (or, if transmitted after business hours, on the next business day), provided that a copy is also sent by one of the methods described in clause (a) or (b); or (d) three (3) business days after deposit in the United States mail, certified or registered, postage prepaid, return receipt requested, addressed to the Parties at their respective addresses set forth below, or to such other address as a Party may designate by notice given in accordance herewith.

If to WOL: Water of Life Community Church
14418 Miller Avenue, Suite K
Fontana CA 92336
Attention: Mark Nuaimi
Email: [email protected]
With copy
(such copy not constituting notice to): Solomon Ward Seidenwurm & Smith LLP 401 B Street, Suite 1200
San Diego, CA 92101
Attention: Joshua Jacobs
Email: [email protected]
If to City: City of Fontana
Attn: City Manager
8353 Sierra Ave.

Fontana, CA 92335
Email: [email protected]
With a copy to: Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Email: [email protected]
ATTACHMENT NO. 2
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15. Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures delivered by electronic transmission, including by PDF, DocuSign, or other electronic signature technology, shall be deemed original signatures for all purposes and shall be fully binding upon the executing Party.

16. No-Third Party Beneficiaries. Except as expressly provided herein, nothing contained in this Agreement, express or implied, is intended to confer upon any Person other than the Parties and their respective permitted successors and assigns any rights, benefits, remedies, claims, obligations, or liabilities under or by reason of this Agreement. No Lender shall have any right to enforce any obligation against the City arising under any Construction Loan Document or any document other than this Agreement, or to require the City to assume, guarantee, purchase, refinance, repay, reimburse, indemnify, cure, or otherwise become liable for the Construction Loan; provided however, the foregoing shall not limit the right of a Lender, as collateral assignee of the Put Option pursuant to Section 13, to exercise the Put Option in accordance with this Agreement.

17. Further Assurances. Each Party shall execute and deliver such further documents and instruments, and take such further actions, as may be reasonably necessary or appropriate to carry out the intent of this Agreement and consummate the transactions contemplated hereby, provided that such documents, instruments, and actions are consistent with the express terms of this Agreement. The City shall not be required to execute any Construction Loan Document, lender document, guaranty, reimbursement agreement, indemnity, consent, acknowledgment, direct agreement, subordination agreement, intercreditor agreement, loan assumption agreement, certificate, legal opinion, estoppel, or other ancillary document (other than the Lender Coordination Documents and the Option Documents contemplated by this Agreement), and no further document or action shall expand the City Support, increase the Purchase Price, require the City to assume the Construction Loan, purchase the Construction Loan, purchase the Lender’ s interest, reimburse any party, indemnify any party, become liable under any Construction Loan Document, or impose any obligation on the City not expressly set forth in this Agreement.

18. Interpretation. The Parties acknowledge that each Party and its respective counsel has participated in the negotiation and drafting of this Agreement. Accordingly, this Agreement shall be construed as though jointly drafted by the Parties, and no presumption or rule of construction shall apply against any Party by reason of authorship or drafting. The words “include,” “includes,” and “including” shall be deemed followed by the phrase “without limitation.” Unless the context otherwise requires, the singular includes the plural and vice versa, and references to Sections are references to Sections of this Agreement.

19. Time of Essence. Time is of the essence with respect to each provision of this Agreement in which time for performance is specified and with respect to the performance of each Party’ s obligations hereunder.

20. Independent Agreements; No Cross -Incorporation. This Agreement and the Land Exchange Transaction (and all documents comprising said Land Exchange Transaction) are separate and independent agreements. No defined term or provision of either applies to, modifies, or is incorporated into the other, and neither is conditioned upon the closing or continued effectiveness of the other.

Notwithstanding the foregoing to the contrary, Land Exchange Transaction remains part of the consideration and inducement for the City’ s obligations under this Agreement, as recited herein. [Signatures on Following Page]
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The Parties hereby agree to the terms and conditions set forth herein and have executed this Agreement as of the Effective Date.

WOL:

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit corporation
By: ___________________________
Name: Jim Kensinger
Title: Executive Director of Ministry Operations
CITY:

CITY OF FONTANA,
a California municipal corporation
By: ___________________________
Name: Matt Ballantyne
Title: City Manager
ATTACHMENT NO. 2
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EXHIBIT “A”
Legal Description
ATTACHMENT NO. 2
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16498.10023\44871023.7
P:4929-4283-2560.10:88014-002 1

PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
This Purchase and Sale Agreement and Joint Escrow Instructions (this “Agreement”) is made as of , 2026 (the “Effective Date”), between WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation (“Seller”) and CITY OF FONTANA, a California municipal corporation (“City” or “Buyer”). Seller and Buyer are sometimes referred to herein individually as a “Party” and collectively as the “Parties.” ARTICLE 1. AGREEMENT OF SALE.

1.1 Background.

1.1.1 Seller is the owner and operator of a transitional housing and homeless support facility located at 16029 Arrow Blvd, Fontana, CA 92335, consisting of two parcels commonly known as APNs 0232-201-12-000 (“Parcel 1”) and 0232-201-13-0000 (“Parcel 2”) (collectively, Parcel 1 and Parcel 2 are the “CityLink Campus”).

1.1.2 Seller is seeking to acquire construction financing (the “Construction Loan”) in connection with development of a transitional residential and mixed use project on a portion of Parcel 2 (the “Permanent Housing Project ”). In connection therewith, Seller is pursuing an entitlements package that includes, among other things, a lot line adjustment to the CityLink Campus that will result in a modification of relative proportions of Parcel 1 and Parcel

2. 1.1.3 Buyer and Seller are parties to that certain Promissory Note dated March 22, 2023 in the original principal amount of $3,040,000.00 (the “Note”), which, among other things, provides for interest accruing at 4% per annum, monthly interest-only payments of $10,133, and a maturity date of March 1, 2033.

1.1.4 The Note is secured by a deed of trust recorded March 30, 2023 as Instrument No. 2023-0075111 (the “CityLink Deed of Trust”), among other documents recorded against the CityLink Campus. The Note, the CityLink Deed of Trust, and all other documents evidencing or securing the Note are referred to collectively as the “Loan Documents”.

1.1.5 Seller is also the owner of the parcels identified as APN 1100-091-71-0000 (“Lot C”) and APN 1100-111-51-0000 (“Lot D”).

1.1.6 To consummate this transaction, the Parties intend to enter into: (i) this Agreement for the conveyance of Lot C and Lot D to Buyer (the “ Transaction”), and (ii) concurrently, (x) a Binding Memorandum of Understanding (attached as Exhibit F) between Seller and Buyer (the “Put Option Agreement”), and (y) a ground lease in the form as Exhibit H between Seller and Buyer (the “Lot C Lease”). The Transaction and the Lot C Lease shall close concurrently. The Put Option Agreement is a separate and independent agreement, and neither the effectiveness of this Agreement nor the Closing is conditioned upon the Put Option Agreement.

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1.2 Property. Subject to and on the terms and conditions of this Agreement, Seller shall sell to Buyer and Buyer shall purchase from Seller all of the following (collectively, the “Property”):

1.2.1 Land. The real property which is more particularly described in Exhibit A- 1 (Lot C), and Exhibit A-2 (Lot D) together with (a) all privileges, rights, easements and appurtenances belonging to the real property, including without limitation all minerals, oil, gas and other hydrocarbon substances on and under the real property to the extent owned by Seller, (b) all development rights, air rights, water, water rights and water stock relating to the real property to the extent owned by Seller, and (c) all right, title and interest of Seller in and to any streets, alleys, passages, other easements and other rights-of-way or appurtenances included in, adjacent to or used in connection with such real property, before or after the vacation thereof (collectively, the “Land”);

1.2.2 Improvements. Any and all improvements, structures, systems, facilities, fixtures, fences and parking areas located on the Land and any and all machinery, equipment, apparatus and appliances used in connection with the operation or occupancy of the Land and other improvements located upon the Land (collectively, the “ Improvements”). For clarity, “Improvements” excludes any telecommunications equipment, shelters, lines, or personal property owned by the licensee/operator under the License Agreement (as defined in Section 1.2.3 below).

1.2.3 License Agreement. Lot D is subject to that certain Communication Site License Agreement dated March 18, 2020 by and between Seller (as licensor) and Dish Wireless, LLC (as carrier) and Southern Edison Company, a California corporation (the “ License Agreement”). Pursuant to the General Assignment attached hereto as Exhibit C, Buyer shall acquire title to Lot D subject to the License Agreement and shall assume Seller’s obligations arising under the License Agreement from and after the Closing.

ARTICLE 2. PURCHASE PRICE.

2.1 Amount. The purchase price (the “Purchase Price”) for the Property shall be the full forgiveness, cancellation, and satisfaction by Buyer, effective as of Closing, of all amounts owed under the Note as of the Closing Date, including all unpaid principal, accrued interest, default interest, late charges, and any other sums due thereunder (collectively, the “Loan Satisfaction Amount”).

2.2 Suspension of Payments Under Loan Documents. From the Effective Date until the earlier of Closing or termination of this Agreement, Seller’s obligation to make payments under the Loan Documents shall be suspended, and no default, late charge, default interest, penalty, or collection cost shall be assessed solely from such nonpayment during such period; provided, however, that interest shall continue to accrue at the non-default rate under the Loan Documents during such period. The foregoing suspension shall not act as a waiver or modification of any non- monetary obligation, covenant, default, or event of default by Seller under the Loan Documents.

If Closing occurs, all suspended amounts shall be included in the Loan Satisfaction Amount and forgiven, cancelled, and satisfied at Closing. If this Agreement terminates before Closing for any reason, the Loan Documents shall remain in full force and effect, and Seller shall pay Buyer, within fifteen (15) business days after termination, all principal, interest, and other amounts that became ATTACHMENT NO. 3
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due under the Loan Documents during such suspension period and were not paid, and City shall have other all rights and remedies under the Loan Documents or at law. If Seller timely makes such payment, Seller shall not be deemed in default under the Loan Documents by reason of such suspended nonpayment.

ARTICLE 3. DUE DILIGENCE.

3.1 Due Diligence Period; Inspection and Access.

3.1.1 Due Diligence Period. The “Due Diligence Period ” means the period beginning the Effective Date and ending at 5:00 p.m. on the date sixty (60) days later.

3.1.2 Access to Information and the Property. Buyer shall conduct its investigation of the Property during the Due Diligence Period at no cost to Seller. This investigation (“Due Diligence Investigation ”) may include, at Buyer’s option: a physical inspection of the Land and all Improvements thereon, including soil, geological, any Phase I environmental site assessment, and other tests, engineering evaluations of the Improvements and review of the Plans; review of all governmental matters affecting the Property, including zoning, environmental and permit and occupancy matters; review and verification of all financial and other information previously provided by Seller relating to the operation of the Property; review of the condition of title to the Property, including the review of such other matters pertaining to an investment in the Property as Buyer deems advisable. Notwithstanding the foregoing, Buyer shall not conduct any invasive testing, borings, drilling, sampling, penetrations, or other physically intrusive investigation of the Property without Seller’s prior written consent, which consent may be granted or withheld in Seller’s reasonable discretion. In addition to the Preliminary Documents delivered to Buyer pursuant to Section 3.2, Buyer and its representatives shall have the right , upon at least forty-eight (48) hours’ notice to Seller (which may be oral or via e-mail to Seller’s point of contact: (Mark Nuami: e-mail: [email protected]), to review and copy all files, books, and records reasonably related to the Property, including, without limitation, all of the Additional Documents to be made available to Buyer at the Property pursuant to Section 3.3), to the extent in Seller’s possession;provided however, that in no event shall Seller be required to give access to any Excluded Materials (defined below). Buyer and its representatives shall also have the right of access to the Property during reasonable business hours, upon at least 24-hours’ notice to Seller (which may be oral or via e-mail at the Seller contact above), to conduct its investigation of the physical condition of the Property. Seller agrees that the rights granted to Buyer herein and the results of its Due Diligence Investigation shall not relieve Seller of any express obligations Seller may have under any other provisions of this Agreement, or under other documents entered into concurrently herewith, or implied by law, nor shall they constitute a waiver by Buyer of the right to enforce any of the same. Seller shall reasonably cooperate with Buyer’s Due Diligence Investigations, at no additional cost or expense to Seller. As used herein, “Excluded Materials” means privileged or attorney work-product materials, internal memoranda, tax returns, personnel records, donor, member, congregant, or ministry records, organizational or governance materials, and other records relating generally to Seller’s business, operations, finances, fundraising, relationships, or activities, not inclusive of any records that are public record.

3.2 Delivery of Preliminary Documents. Within 5 business days after the Effective Date, Seller shall deliver to Buyer, at Seller’s expense, all of the documents described in the ATTACHMENT NO. 3
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remaining subsections of this Section 3.2 (collectively, the “Preliminary Documents”) in Seller’s possession.

3.2.1 Title Report and Survey. A preliminary title report or commitment for title insurance (the “Preliminary Title Report ”), dated no earlier than 10 days before the Effective Date, covering the Property and issued by First American Title Company (the “Title Company”), together with a legible copy of each document, map and survey (to the extent applicable) referred to in the Preliminary Title Report. Buyer, at Buyer’s sole cost, may obtain an as-built survey of the Property (the “Survey”) prepared by a certified land surveyor in accordance with the most recent American Land Title Association standards, certified by such surveyor to Buyer and the Title Company in a form acceptable to the Title Company for the purpose of deleting any survey exception from the Title Policy described in Section 4.1.3.

3.2.2 License Agreement Package. A complete, fully executed copy of the License Agreement for Lot D, together with any amendments, consents, recorded memoranda, rent schedule/payment history for the prior twelve (12) months (if available), and any notices of default received by Seller or delivered by Seller.

3.2.3 Reports; Plans. Seller shall deliver to Buyer, to the extent in Seller’s possession, and if any exist, copies of: all as-built plans and specifications for the Improvements, including descriptions of existing renovations and improvements to the Property and rentable space, together with as-built drawings for underground utilities (collectively, the “Plans”), and, if in Seller’s possession, an architect’s certificate acceptable to Buyer certifying that the Improvements were constructed in accordance with the Plans; any soils, structural, mechanical, environmental, geological, or similar reports concerning the Property; certified operating statements for the Property, including itemized income and expenses, and real property tax bills for the applicable periods; all licenses, permits, and certificates required by governmental authorities in connection with construction or occupancy of the Improvements, including certificates of completion, certificates of occupancy, and environmental permits; and all written reports received by Seller within three (3) years prior to the Effective Date from insurance companies, governmental agencies, or other persons or entities requiring correction of any condition or modification or termination of any use of the Property.

3.2.4 License Estoppel. Seller shall deliver an estoppel certificate executed by the licensee under the License Agreement, in form and substance acceptable to Buyer, confirming the complete agreement, rent, deposits, defaults, prepaid amounts, expiration date, renewal rights, termination rights, access rights, utility obligations, ownership of equipment, insurance, and indemnities.

3.3 Additional Documents and Information. From the Effective Date through the Closing Date, Seller shall make available to Buyer at the Property in accordance with Section 3.1, the documents and information described in this Section 3.3, to the extent in Seller’s possession (collectively, the “Additional Documents”):

3.3.1 Agreements. Copies of written, and written descriptions of oral, easements, covenants, restrictions, agreements, contracts and other documents, whether existing or, to the knowledge of Seller, proposed as of the Effective Date, including without limitation any ATTACHMENT NO. 3
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agreements relating to the insurance, service, operation, repair, supply, advertising, promotion, sale, leasing or management of the Property, which (a) affect the Property, (b) are not disclosed by the Preliminary Title Report, and (c) have not been delivered to Buyer pursuant to Section 3.2.

3.3.2 Warranties. Copies of any and all guarantees or warranties and other rights given to Seller in connection with the construction, maintenance, repair or remodeling of the Improvements, periodic inspections, if any.

3.3.3 Insurance Policies. Copies of certificates evidencing the insurance carried by Seller of the Property;

3.3.4 Other Documents. All data, correspondence, documents, agreements, waivers, notices, applications and other records with respect to the Property relating to transactions with taxing authorities, governmental agencies, utilities, vendors and others with whom Buyer may be dealing from and after the Closing Date; and

3.3.5 Requested Information. Such other documents and information concerning the Property as Buyer may reasonably request.

3.3.6 Documents; No Representations. The Preliminary Documents, the Additional Documents, and any other documents, information, reports, studies, plans, records, agreements, correspondence, or other materials delivered, furnished, disclosed, or made available to Buyer by Seller or any representative of Seller, whether before or after the Effective Date, are collectively referred to herein as the “Documents”. Except as expressly set forth in this Agreement, Seller makes no representation or warranty as to the accuracy, completeness, content, or applicability of the Documents, and Buyer shall be responsible for conducting its own review and verification of the matters reflected therein; provided Seller represents and warrants Seller has not intentionally altered or omitted any Documents.

3.4 Approval/Disapproval of Due Diligence Investigations. Buyer shall approve or disapprove the results of Buyer’s Due Diligence Investigation, in Buyer’s sole discretion, by written notice delivered to Seller no later than the expiration of the Due Diligence Period. Buyer’s disapproval shall terminate this Agreement unless, at the time Buyer gives notice of its disapproval, Buyer also notifies Seller of Buyer’s desire to enter into negotiations with Seller for the purpose of reaching an accommodation concerning the disapproval. If Buyer so notifies Seller and the parties have not reached a written agreement satisfactory to both of them regarding the disapproval within 10 days after the date of the disapproval notice, Buyer, at its option, may either (a) elect to terminate this Agreement by so notifying Seller, or (b) elect to proceed with the transactions contemplated by this Agreement notwithstanding its earlier disapproval. If Buyer fails to deliver to Seller notice of its approval or disapproval of the results of its Due Diligence Investigation, Buyer shall be deemed to have disapproved such results. If Buyer elects to terminate the Agreement, Buyer shall return to Seller all Documents previously delivered by Seller to Buyer within 5 business days of such termination. If Buyer elects to terminate, Escrow Holder shall return to each Party any funds deposited by such Party for Closing costs or prorations (if any).

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3.5 Title Review.

3.5.1 Monetary Liens. At its sole expense, Seller shall remove at or prior to the Closing the following monetary liens (collectively, “Monetary Liens”): (i) all delinquent taxes, bonds and assessments and interest and penalties thereon (it being agreed that Seller shall not be required to remove any non-delinquent taxes and assessments imposed by any governmental agency that are paid with the property taxes for the Property); and (ii) all other monetary liens, created by, through, or under Seller after the Effective Date, including without limitation all those shown on the Preliminary Title Report (including judgment and mechanics’ liens, whether or not liquidated, and mortgages and deeds of trust, with Seller being fully responsible for any fees or penalties incurred in connection therewith).

3.5.2 Approval/Disapproval of Title Review. Buyer shall approve or disapprove of the Preliminary Title Report, the Survey and any exceptions to title shown thereon (other than the Monetary Liens) in the exercise of Buyer’s sole discretion, by the expiration of the Due Diligence Period. If Buyer disapproves, Buyer may either (a) terminate this Agreement by giving Seller written notice of termination or (b) give Seller a written notice (“Disapproval Notice”) identifying the disapproved title matters (“Disapproved Title Matters ”). With respect to any Disapproved Title Matters, other than the Monetary Liens, Seller shall notify Buyer in writing within 5 days after Seller’s receipt of the Disapproval Notice whether Seller will cause the Disapproved Title Matters to be removed or cured at or prior to Closing. If Seller elects not to remove or cure all Disapproved Title Matters, Buyer may, at its option: (i) subject to satisfaction of the other conditions to Closing, close the purchase of the Property and take title subject to the Disapproved Title Matters which Seller elects not to remove or cure; or (ii) terminate this Agreement in accordance with Section 9.6.1.

3.5.3 Buyer’s Options. If any Disapproved Title Matters (including the Monetary Liens) have not been removed at least 5 days prior to Closing or provision for their removal at the Closing has not been made to Buyer’s satisfaction, Buyer may, at its option: (i) close the purchase of the Property and take title subject to the Disapproved Title Matters which have not been removed; (ii) solely with respect to Monetary Liens and any Disapproved Title Matters that Seller has expressly agreed in writing to remove or cure, or is expressly required under this Agreement to remove or cure, close the purchase of the Property and cure or remove such Monetary Liens or Disapproved Title Matters, in which event Seller shall reimburse Buyer for Buyer’s actual, reasonable, documented, out-of-pocket costs incurred in connection therewith; or (iii) terminate this Agreement in accordance with Section 9.6.1.

3.5.4 Failure to Disapprove. If Buyer fails to notify Seller of its approval or disapproval of the Preliminary Title Report within the time period stated in Section 3.5.2, the Survey or the exceptions shown thereon by the end of the Due Diligence Period, then Buyer shall be deemed to have disapproved the same.

3.6 As-Is Purchase; Buyer’s Investigations

3.6.1 AS-IS Acquisition. Buyer acknowledges that, prior to Closing, Buyer will have had the opportunity to conduct such investigations, inspections, tests, studies, and reviews of the Property as Buyer deems necessary or appropriate, including with respect to the physical, ATTACHMENT NO. 3
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environmental, legal, entitlement, zoning, title, utility, access, economic, development, use, value, marketability, and condition of the Property, whether patent or latent (collectively, the “Property Conditions”). Except for Seller’s express representations, warranties, covenants, indemnities, and obligations expressly set forth in this Agreement, Buyer shall acquire the Property at Closing in its then-existing condition, “AS IS, WHERE IS, WITH ALL FAULTS,” and Buyer shall rely solely on Buyer’s own investigations and inspections.

3.6.2 Release. Effective as of Closing, except for Seller’s express representations, warranties, covenants, indemnities, and obligations expressly set forth in this Agreement, and except to the extent arising from Seller’s fraud, intentional misrepresentation, intentional omission, willful misconduct, or an intentional failure to disclose a material fact with respect to the Property that Seller had knowledge of (collectively, “Excluded Claims ”), Buyer, for itself and its successors and assigns, hereby releases Seller and Seller’s officers, directors, trustees, employees, agents, representatives, attorneys, consultants, affiliates, successors, and assigns (collectively, the “Seller Parties ”) from any and all claims, demands, liabilities, losses, damages, costs, and expenses arising out of or relating to the Property or the Property Conditions, whether known or unknown, suspected or unsuspected, fixed or contingent. Buyer acknowledges that it has been advised by counsel of the provisions of California Civil Code Section 1542, which provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR

RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR

AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER,

WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
Buyer knowingly and voluntarily waives the benefits of California Civil Code Section 1542 with respect to the release set forth in this Section 3.6.2. _____________
Buyer Initials

3.6.3 Survival. The provisions of this Section 3.6 shall survive Closing.

ARTICLE 4. CONDITIONS PRECEDENT.

4.1 Buyer’s Conditions. Buyer’s obligations under this Agreement are expressly subject to the timely fulfillment of the conditions set forth in this Section 4.1 on or before the Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole or in part by Buyer by written notice to Seller.

4.1.1 Due Diligence. Buyer having approved of the results of its Due Diligence Investigation pursuant to Section 3.4 (including but not limited to Buyer’s reasonable approval of the License Agreement and confirmation of its terms.);

4.1.2 Title Review. Buyer having approved of the results of its review of title pursuant to Section 3.5.

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4.1.3 Title Policy. Seller having caused the Title Company to deliver to Buyer (a) a CLTA Owner’s policy of title insurance, provided that Buyer may require an ALTA Owner’s Policy if Buyer pays the incremental premium for ALTA coverage (“Title Policy”) (or at Buyer’s election a binder therefor) for the Property, or (b) the Title Company’s irrevocable commitment to issue such policy of title insurance, (including such coinsurance, reinsurance and endorsements as Buyer shall require), with liability equal to the Purchase Price showing fee title to the Property vested in Buyer and subject only to (i) the matters and exceptions approved by Buyer pursuant to Section 3.5, (ii) the License Agreement, (iii) any memorandum of the Lot C Lease recorded at Closing, and (iv) the standard printed exceptions in the form of title policy called for (collectively, “Conditions of Title”).

4.1.4 Performance of Covenants. Seller performing and complying in all material respects with all of the terms of this Agreement to be performed and complied with by Seller prior to or at the Closing.

4.1.5 Representations and Warranties. The representations and warranties of Seller set forth in Article 5 being true and accurate on the Closing Date, as if made on such date.

4.1.6 Non-Foreign Certification. Seller having executed and delivered to Buyer on or prior to the Closing Date a certification (“ Seller’ sNon-Foreign Certification ”), substantially in the form of Exhibit B.

4.1.7 California Certification. Seller having furnished the residency certification required pursuant to Sections 18805 and 26131 of the California Revenue and Taxation Code (“Form 593”) or having authorized Escrow Holder in writing to withhold from the Purchase Price the amounts required to be withheld by such Sections.

4.1.8 City Council Approval. Approval of this Agreement and the Lot C Lease, by City Council prior to Closing.

4.1.9 Concurrent Transaction Documents. Execution and delivery at Closing of the Lot C Lease and any other ancillary transaction documents.

4.2 Seller’s Conditions. Seller’s obligations under this Agreement are expressly subject to the timely fulfillment of the conditions set forth in this Section 4.2 on or before the Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole or part by Seller by written notice to Buyer.

4.2.1 Covenants. Buyer performing and complying in all material respects with all of the terms of this Agreement to be performed and complied with by Buyer prior to or at the Closing.

4.2.2 Representations and Warranties. The representations of Buyer set forth in Article 6 being true and accurate on the Closing Date, as if made on such date.

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ARTICLE 5. SELLER’S REPRESENTATIONS AND WARRANTIES.

Subject to Buyer’s opportunity to conduct its Due Diligence Investigation of the Property, Seller hereby makes the following representations and warranties to Buyer with the understanding that each such representation and warranty is material and is being relied upon by Buyer:

5.1 Defects. Seller has not received written notice of any material latent defect in the Improvements that remains uncured.

5.2 Compliance. Seller has not received written notice of any uncured violation of applicable law with respect to the current use of the Property. Seller makes no representation that the Property is developable for any particular use other than its present condition and use.

5.3 Documents. Copies of Documents delivered or made available by Seller to Buyer are true, correct, and complete copies of the materials in Seller’s possession. Except as expressly set forth in this Agreement, Seller makes no representation or warranty as to the accuracy, completeness, content, or applicability of the Documents, except that Seller represents Seller has not intentionally altered or omitted any Documents.

5.4 Taxes and Condemnation. To Seller’s knowledge there are no presently pending or contemplated special taxes or assessments which will affect the Property. There are no presently pending or, to Seller’s knowledge, contemplated proceedings to condemn or demolish the Property or any part of it.

5.5 Utilities. To Seller’s knowledge such utilities and storm and sanitary sewers required for the operation of the Property enter the Land through adjoining public streets or through adjoining private land in accordance with valid public or private easements that will inure to the benefit of Buyer.

5.6 Contracts/Leases/Occupancy Rights. Except for the License Agreement, the Conditions of Title, and any service, maintenance, or other agreements disclosed to Buyer in writing, Seller has not entered into any written lease, occupancy agreement, or license granting possessory rights in the Property that will survive the Closing as an obligation of Buyer as Seller’s successor-in-interest as owner of the Property.

5.7 Litigation. To Seller’s knowledge, there are no actions, suits, proceedings, judgments, orders, decrees or governmental investigations pending or threatened against the Property or Seller which could reasonably be expected to materially and adversely affect the Buyer’s interest in the Property or the purchase, use or enjoyment thereof by Buyer.

5.8 Agreements with Governmental Authorities. There are no agreements with governmental authorities, agencies, utilities or quasi-governmental entities that will survive the Closing and which will affect the Property except those agreements which are identified in the Preliminary Title Report and those matters which are disclosed by the Survey.

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5.9 Hazardous Materials.

5.9.1 Definitions. For purposes of this Agreement:
(a) “Environmental Law(s) ” means the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et. seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq., [The Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. H&S Code Sections 25249.5- 25249.13), the Carpenter-Preseley-Tanner Hazardous Substance Account Act (Cal. H&S Code Sections 25300 et seq.), and the California Water Code Sections 1300, et seq.], as said laws have been supplemented or amended to date, the regulations promulgated pursuant to said laws and any other federal, state or local law, statute, rule, regulation or ordinance which regulates or proscribes the use, storage, disposal, presence, cleanup, transportation or Release or threatened Release into the environment of Hazardous Material.
(b) “Hazardous Material ” means any substance which is (i) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any Environmental Law, as currently in effect or as hereafter amended or enacted, (ii) a petroleum hydrocarbon, including crude oil or any fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) asbestos, (vi) flammable explosives, (vii) infectious materials or (viii) radioactive materials. (c) “Release” means any spilling, leaking, pumping, pouring, emitting, discharging, injecting, escaping, leaching, dumping or disposing into the environment of any Hazardous Material (including the abandonment or discarding of barrels, containers, and other receptacles containing any Hazardous Material).

5.9.2 Representations. Seller represents and warrants that: (a) Seller has not received any written notice of violation of Environmental Laws with respect to the Property that remains uncured; (b) to Seller’s knowledge, there has been no Release of Hazardous Materials on, under or from the Property in violation of Environmental Laws, and no pending or threatened (to Seller’s knowledge) claim, proceeding, or investigation under Environmental Laws relating to the Property; and (c) to Seller’s knowledge, there are no underground or above-ground storage tanks on the Property used or formerly used for storing Hazardous Materials, no asbestos abatement/remediation has been performed on the Property, and no PCB-containing equipment or materials are located on or in the Property.

5.10 Title to the Property. Seller has good and marketable title to the Property, subject to the Conditions of Title. There are no outstanding rights of first refusal or first look, options to purchase, rights of reverter, or claim of right relating to the transfer or sale of the Property or any interest therein. To Seller’s knowledge, there are no unrecorded or undisclosed documents or other matters which affect title to the Property. Except for the City, no person holding a security interest in the Property or any part thereof has the right to consent or deny consent to the sale of the Property as contemplated herein, and Seller has the right to pay off such person and to remove all ATTACHMENT NO. 3
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such liens as of the Closing Date. Seller has enjoyed the continuous and uninterrupted quiet possession, use and operation of the Property.

5.11 Seller’s Authority. Seller has the requisite power and authority to own and operate the Property and conduct its business where the same is now owned or operated. The execution, delivery and performance of this Agreement by Seller have been duly and validly authorized by all necessary action and proceedings, and no further action or authorization is necessary on the part of Seller (or its board of directors) in order to consummate the transactions contemplated herein. This Agreement and the other documents executed by Seller in connection herewith are legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms. Neither the execution and delivery of this Agreement by Seller, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Seller was organized, or any indenture, mortgage, deed of trust, agreement, undertaking, instrument or document to which Seller or any affiliate thereof is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Seller.

5.12 Parking. Seller has received no written notice from any governmental agency that the parking spaces on the Property are in violation of law.

5.13 Zoning. Seller has received no written notice from any governmental agency that the Property is not in compliance with zoning requirements and laws.

5.14 Foreign Person. Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code.

5.15 No Employees. There are no on-site employees of Seller at the Property. Buyer shall have no obligation to employ any individual employed by Seller or its affiliates in connection with the Property.

5.16 Misstatements and Omissions. To Seller’s knowledge neither the representations and warranties made by Seller in this Article 5, nor elsewhere in this Agreement, contain any untrue statement or any omission of a material fact. To Seller’s knowledge, Seller has no documents in its possession that omits material facts related to the Property or which would contradict or negate any of its representations contained in this Agreement.

5.17 Seller’s representations and warranties are made as of the Effective Date and again as of Closing, shall survive Closing as provided herein, and shall not be deemed waived, limited, or qualified by Buyer’s due diligence, inspections, title review, knowledge, or closing, except to the extent Buyer expressly waives a specific representation in writing.

As used in this Agreement, “Seller’ s knowledge” means the actual current knowledge of Mark Nuaimi, without duty of inquiry or investigation. Mark Nuaimi is named solely for purposes of defining Seller’s knowledge, and shall not have any personal liability or obligation to Buyer arising out of or relating to this Agreement, any representation or warranty made herein, or his being so named.

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ARTICLE 6. BUYER’S REPRESENTATIONS AND WARRANTIES.

Buyer makes the following representation and warranties to Seller with the understanding that each such representation and warranty is material and is being relied upon by Seller:

6.1 Buyer’s Authority. The execution, delivery and performance of this Agreement by Buyer have been duly and validly authorized by all necessary action and proceedings. Buyer’s execution and performance herein are subject to approval by Buyer’s City Council, as required.

6.2 No Conflict. Neither the execution nor delivery of this Agreement by Buyer, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Buyer was organized, or any agreement to which Buyer is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Buyer.

ARTICLE 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES

7.1 Survival of Warranties. Buyer and Seller agree that each representation and warranty, covenant by the respective parties contained herein or made in writing pursuant to this Agreement are intended to and shall be deemed made as of the date of this Agreement or such writing and again at the Closing, shall be deemed to be material, and unless expressly provided to the contrary shall survive the execution and delivery of this Agreement, the Deed and the Closing; provided however, that that the representations and warranties of Seller shall survive Closing for a period of nine (9) months only, and no claim for breach thereof may be made unless Buyer delivers written notice of such claim to Seller before the expiration of such nine (9)-month period.

7.2 Notice of Changed Circumstances. If either party becomes aware of any fact or circumstances which would render false or misleading a representation or warranty made by such party, then it shall immediately give notice of such fact or circumstance to the other party, but such notice shall not relieve any party of any liabilities or obligations with respect to any representation or warranty.

7.3 Limitation of Liability; Risk Allocation. In no event shall either Party be liable for consequential, incidental, special, punitive, or speculative damages, including lost profits or diminution in value. Except in the case of any Excluded Claims, Seller shall have no liability arising out of or relating to this Agreement or the transactions contemplated unless and until Buyer’s losses exceed Thirty Thousand Dollars ($30,000.00) (the “Basket”), and Seller’s aggregate liability arising out of or relating to this Agreement or the transactions contemplated hereby shall not exceed Two Hundred Thousand Dollars ($200,000.00) (the “ Cap”), notwithstanding if this Agreement terminates before Closing for any reason, the Loan Documents shall remain in full force and effect, and Seller shall pay Buyer all amounts owed therein pursuant to Section 2.2. If the total amount of such losses exceeds the Basket then Buyer shall be entitled to be indemnified against and compensated and reimbursed for the entire amount of such losses, and not merely the portion of such losses exceeding the Basket. Seller’s maximum aggregate liability hereunder for all such breaches shall not exceed the Cap. Seller shall be responsible for ATTACHMENT NO. 3
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liabilities arising from ownership or operation of the Property prior to Closing, and Buyer shall be responsible for liabilities arising from and after Closing, including obligations under the License Agreement from and after Closing.

ARTICLE 8. SELLER’S PRECLOSING COVENANTS.

Seller shall comply with the covenants contained in this Article 8 from the Effective Date through the Closing Date unless Buyer consents otherwise in writing. Buyer may grant or withhold any such consent requested by Seller in Buyer’s sole discretion.

8.1 Contracts and Documents. Seller shall not, without Buyer’s approval, (a) amend or waive any right under the License Agreement, any Preliminary Documents, or any Additional Documents, or (b) enter into any material agreement of any type affecting the Property that would survive the Closing Date.

8.2 Insurance. Seller shall maintain or cause to be maintained in full force and effect its present insurance policies for the Property.

8.3 Compliance with Obligations. Seller shall fully and timely comply with all obligations to be performed by it under the License Agreement, the other Preliminary Documents, the Conditions of Title and all permits, licenses, approvals and laws, regulations and orders applicable to the Property.

8.4 No Transfers. Seller shall not sell, encumber or otherwise transfer any interest in all or any portion of the Property, or agree to do so.

8.5 Termination of Contracts. Seller at its sole cost and expense shall terminate any and all service contracts affecting the Property, if any, at or before the Closing Date, except for the License Agreement and those contracts (if any) which Buyer expressly agrees to assume and which are actually assumed by Buyer.

8.6 Maintenance. At its sole cost and expense, Seller shall operate and maintain the Property such that on the Closing Date the Property shall be in at least as good a condition and repair as on the Effective Date, reasonable wear and tear excepted. Without limiting the generality of the foregoing, Seller shall, at a minimum, spend such amounts for repair and maintenance as are consistent with its prior practice. Seller shall promptly advise Buyer of any significant repair or improvement required to keep the Property in such condition. Seller shall not make any material alterations to the Property, or remove any of the Improvements therefrom, without Buyer’s prior consent.

8.7 License Agreement. Seller shall not amend, terminate, or waive any material right under the License Agreement without Buyer’s prior written consent, and Seller shall deliver to Buyer prompt written notice of any default notice received or delivered under the License Agreement prior to Closing.

8.8 Good Faith Efforts. Seller shall use good faith efforts to cause the conditions set forth in Section 4.1 to be satisfied by the Closing Date, and Seller shall not knowingly take or ATTACHMENT NO. 3
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permit any action that would result in any of the representations and warranties set forth in Article 5 becoming false or incorrect.

ARTICLE 9. CLOSING.

9.1 Time. Provided all conditions set forth in Article 4 have been either satisfied or waived, the parties shall close this transaction (the “Closing”), on the date which is30 days after the expiration of the Due Diligence Period (the “Closing Date”), as such date may be extended by the provisions of Article 10, or scheduled earlier upon mutual agreement of the Parties. Buyer's execution of the Lot C Lease in final form approved by the City Council shall occur concurrently with Closing.

9.2 Escrow. This Article 9, together with such additional instructions as First American Title Company, Attention: Jeanne Gould, Sr., Escrow Officer, California, (E-mail:
[email protected]; (949) 885-2405) (“Escrow Holder ”), shall reasonably request and the parties shall agree to, shall constitute the escrow instructions to Escrow Holder. If there is any inconsistency between this Agreement and the Escrow Holder’s additional escrow instructions, this Agreement shall control unless the intent to amend this Agreement is clearly stated in said additional instructions. Buyer and Seller shall cause Escrow Holder to execute and deliver a counterpart of this Agreement to each of them. If the Title Company does not serve as the Escrow Holder, the Title Company shall provide a letter to Buyer, in form and content acceptable to Buyer, pursuant to which the Title Company accepts responsibility and liability for the acts and omissions of Escrow Holder in discharging Escrow Holder’s obligations hereunder, including, without limitation, any acts or omissions of Escrow Holder relating to the Title Company’s commitment to issue the Title Policy, the receipt, recordation or delivery of any documents placed into escrow, and the receipt and disbursement of any funds placed into escrow.

9.3 Seller’s Deposit of Documents and Funds Into Escrow. Seller shall deposit into escrow on or before Closing the following documents:

9.3.1 A duly executed assignment and assumption of License Agreement (substantially in the form attached as Exhibit E) of Seller’s interest in the License Agreement, effective as of Closing; provided that Buyer assumes obligations only from and after Closing (the “Assignment of License”);

9.3.2 An estoppel/acknowledgment from the licensee/operator under the License Agreement, in form reasonably acceptable to Buyer;

9.3.3 A duly executed and acknowledged grant deed, in the form acceptable to Buyer, conveying the Property to Buyer (“Grant Deed”) in the form attached as Exhibit D;

9.3.4 A duly executed general assignment, in the form of Exhibit C, assigning to Buyer all of Seller’s interest in: (a) the Plans, (b) all warranties of which Seller is the beneficiary with respect to the Property and (c) all intangible assets of the Property (the “ General Assignment”);

9.3.5 Seller shall deliver an owner’s affidavit / gap indemnity / title affidavit in form required by Title Company;
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9.3.6 Seller’s share of Closing costs, including, but not limited to transfer taxes (if any), one-half of the escrow fees, and any other costs of Closing customarily paid by sellers of real property in County of San Bernardino, plus or minus prorations as provided in Section 9.8; provided that, subject to Section 9.6, Buyer and Seller shall bear their own attorneys’ fees and costs in connection with the negotiation and preparation of this Agreement and the transactions completed by this Agreement;

9.3.7 Seller’s Non-foreign Certification;

9.3.8 Solely to the extent applicable, customary payoff letters, reconveyance documents, release documents, and UCC-3 termination statements sufficient to cause removal, at or through Closing, of all deeds of trust, assignments of rents, financing statements, and other monetary lien matters affecting the Property that are not permitted to remain pursuant to this Agreement; and

9.3.9 Such additional documents, including written escrow instructions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.

9.3.10 Form 593;

9.3.11 Notice letter to licensee under the License Agreement regarding new owner and addresses for payment of rent payment (“Licensee Notice Letter”) in substantially the form attached as Exhibit G.

9.4 Deliveries Outside of Escrow. Notwithstanding Section 9.3, Seller and Buyer may elect to deliver the documents described in Section 9.3 outside of escrow (other than documents which are to be recorded) by giving Escrow Holder a joint written notice of such election, specifying the documents which will be so delivered outside of escrow. Upon receipt of such notice, Escrow Holder shall have no further obligation concerning such specified documents.

9.5 Buyer’s Deposit of Documents and Funds. Buyer shall deposit into escrow:

9.5.1 Buyer shall deposit into Escrow (i) a written acknowledgment of satisfaction and cancellation of the Note effective as of Closing and (ii) such reconveyance, release, or other instruments as are necessary to evidence termination of the Note and release of the CityLink Deed of Trust (and any other security interests securing the Note), all to be recorded and/or delivered simultaneously with Closing.

9.5.2 Fully executed counterparts of the Lot C Lease (or evidence of execution contemporaneously with Closing, as directed by Escrow).

9.5.3 Such additional documents, including written escrow instructions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement, including a Certificate of Acceptance.

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9.6 Default, Termination and Remedies.

9.6.1 Buyer’s Termination. This Agreement may be terminated by Buyer upon written notice to Seller upon the occurrence of any of the following events, provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing contained in Section

4.1 has not been satisfied or waived by Buyer by the Closing Date; or (b) Buyer having exercised its right to terminate this Agreement pursuant to Section 3.4 (disapproval of Due Diligence Investigation), Section 3.5 (disapproval of title) or Article 10 (damage or condemnation). In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement. Buyer shall retain all remedies it may have hereunder, including the remedy of specific performance.

9.6.2 Seller’s Termination. This Agreement may be terminated by Seller upon written notice to Buyer if any condition to Closing contained in Section 4.2 has not been satisfied or waived by Seller by the Closing Date. Seller shall retain all remedies it may have hereunder.

9.6.3 Release from Escrow. Upon termination of this Agreement pursuant to Section 9.6.1 or 9.6.2, Escrow Holder shall promptly return to Buyer and Seller, respectively, all documents and monies deposited by them into escrow without prejudice to their rights and remedies hereunder.

9.6.4 Preservation of Loan Documents. Subject only to Section 2.2, notwithstanding anything in this Agreement to the contrary, until Closing actually occurs and Buyer effects the forgiveness, cancellation, and satisfaction constituting the Loan Satisfaction Amount at Closing, the Note, the CityLink Deed of Trust, and all other documents evidencing or securing the Note shall remain in full force and effect in accordance with their terms.

9.6.5 Remedies.
(a) Buyer’s Remedies. If Seller breaches this Agreement, and fails to cure such breach within ten (10) business days after Buyer’s written notice thereof, then Buyer may, as its sole and exclusive remedy, either: (i) terminate this Agreement, in which event the parties shall have no further obligation to each other except for those obligations that expressly survive termination, or (ii) shall be entitled to seek specific performance. No termination of the escrow by Buyer following a breach by Seller shall be deemed to waive such breach or any remedy otherwise available to Buyer. Buyer shall make such election, if at all, by written notice to Seller within ten (10) business days after expiration of Seller’s cure period, and if Buyer fails to timely deliver such election notice, Buyer shall be deemed to have elected to terminate this Agreement pursuant to clause (i) above.
(b) Seller’s Remedies. If, before Closing, Buyer fails to comply with or perform Buyer’s obligations under this Agreement and does not cure such failure within ten (10) business days after Seller’s written notice thereof, then Seller may terminate this Agreement and, as Seller’s sole and exclusive monetary remedy for such default, recover from Buyer Seller’s actual, reasonable, documented, out-of-pocket costs and expenses (excluding any in-house counsel fees, internal administrative costs, employee or staff time, and overhead) incurred in connection with this Agreement and the transactions contemplated hereby, including escrow fees, title ATTACHMENT NO. 3
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charges, consultant fees, and outside attorneys’ fees (excluding in house counsel), in an aggregate amount not to exceed Twenty-Five Thousand Dollars ($25,000.00). Seller shall provide reasonable supporting documentation for all amounts claimed. In no event shall Seller be entitled to recover any internal administrative costs, employee time, lost profits, opportunity costs, or consequential, incidental, special, punitive, or speculative damages. Upon Seller’s termination of this Agreement pursuant to this Section, Buyer and Seller shall be relieved of any further obligations to each other hereunder except for those obligations that expressly survive termination. (c) Waiver of Specific Performance. SELLER HEREBY WAIVES THE RIGHT TO MAINTAIN AN ACTION FOR SPECIFIC PERFORMANCE OF BUYER’S

OBLIGATION TO PURCHASE THE PROPERTY AND SELLER AGREES THAT SELLER

CAN BE ADEQUATELY COMPENSATED IN MONEY DAMAGES IF BUYER FAILS TO PURCHASE THE PROPERTY IN BREACH OF THIS AGREEMENT. SELLER

ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL

PART OF THE CONSIDERATION BEING GIVEN TO BUYER FOR ENTERING INTO THIS

AGREEMENT AND THAT BUYER WOULD BE UNWILLING TO ENTER INTO THIS AGREEMENT IN THE ABSENCE OF THE PROVISIONS OF THIS PARAGRAPH.

SELLER’S INITIALS BUYER’S INITIALS

9.6.6 If Closing does not occur for any reason, the Note, the CityLink Deed of Trust, and all other documents evidencing or securing the Note shall remain in full force and effect, and Buyer shall have no obligation to forgive, cancel, satisfy, release, reconvey, or terminate the same.

9.6.7 Survival. Notwithstanding anything to the contrary herein, any provision of this Agreement that by its terms, nature, or context is intended to survive termination shall survive any termination of this Agreement.

9.7 Closing. When Escrow Holder has received all documents and funds identified in Sections 9.3 and 9.5, has received notification from Buyer and Seller that all conditions to Closing to be satisfied outside of escrow have been satisfied or waived and Title Company is irrevocably committed to issue the Title Policy, then, and only then, Escrow Holder shall:

9.7.1 Record the Grant Deed with Certificate of Acceptance;

9.7.2 Cause the Title Company to issue the Title Policy to Buyer;

9.7.3 To the extent not otherwise delivered to Buyer outside of escrow, deliver to Buyer: (a) a conformed copy (showing all recording information thereon) of the Grant Deed; (b) fully executed original counterparts of the General Assignment, (c) fully executed original counterparts of the Assignment of License, (d) Seller’s Non-foreign Certification and (e) Form 593;

9.7.4 Disburse funds pursuant to the final Closing statement, including payment of prorations and Closing costs, and return any remaining funds to the depositing Party; ATTACHMENT NO. 3
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9.7.5 Escrow Holder shall prepare and sign closing statements showing all receipts and disbursements and deliver copies to Buyer and Seller and, if applicable, shall file with the Internal Revenue Service (with copies to Buyer and Seller) the reporting statement required under Section 6045(e) of the Internal Revenue Code.

9.7.6 The Note shall be deemed paid and satisfied in full simultaneously with and conditioned upon recordation of the Grant Deed conveying the Property to Buyer. Buyer shall execute and deliver the written acknowledgment of loan satisfaction and shall cause to be recorded any reconveyance, release, or other instrument necessary to evidence termination of the Note and release of any related security interests. If the Closing does not occur for any reason, the Note, CityLink Deed of Trust, and all related security documents shall remain in full force and effect.

9.8 Prorations. Subject to the other provisions of this Section 9.8, all receipts and disbursements of the Property will be prorated as of 11:59 p.m. on the day immediately preceding the Closing Date. Rents/revenues and charges under the License Agreement payable to Seller shall be prorated as of Closing, with Buyer receiving the benefit and bearing the burden from and after Closing. Not less than five business days prior to the Closing, Seller shall submit to Buyer for its approval a tentative prorations schedule showing the categories and amounts of all prorations proposed, including all rents, fees, and operating expenses. The parties shall agree on a final prorations schedule prior to the Closing and shall deliver the same to Escrow Holder. If following the Closing either party discovers an error in the prorations statement, it shall notify the other party and the parties shall promptly make any adjustment required. The parties agree that any trailing bills that pertain to the Property operations before the Closing Date, which are not available as of Closing, may be presented to Buyer for proration and reimbursement up to forty five (45) days after Closing. Failure to provide any bills by such date shall be a waiver by Seller of such reimbursement and Buyer shall have no further obligation for any such bills and Property expenses.

This section 9.8 shall survive Closing.
_________

SELLER INITIALS

9.8.1 Capital Expenditures and Accounts Payable. All capital and other improvements (including labor and material) which have been performed or contracted for, by or on behalf of Seller prior to the Closing Date, and all sums due for accounts payable which have been incurred with respect to the Property prior to the Closing Date shall be paid by Seller and shall be subject to the indemnification provisions of Section 7.3. Buyer shall furnish to Seller for payment any bills for such period received after the Closing Date, and Buyer shall have no further obligation with respect thereto.

9.8.2 Property Taxes. General real estate taxes, water or sewer rates and charges (if not metered), personal property taxes, or any other governmental tax or charge levied or assessed against the Property (collectively, the “Taxes”), relating to the Property and payable during the year in which Closing occurs shall not be prorated between Seller and Buyer in Escrow.

Upon recordation of the Grant Deed, Buyer will request cancellation of the real property taxes for the Property pursuant to California Revenue and Taxation Code Section 4986. If current taxes have not yet been paid as of the Closing Date, then at Closing Seller shall pay through Escrow or ATTACHMENT NO. 3
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out of Seller’s proceeds, the full amount of the installment applicable for the period of Seller’s ownership in which Closing occurs. If Seller has already paid the entire installment for such period, Seller shall be entitled to a refund from the taxing authority (but not Buyer) of any excess payment made to such authority on account of the Property, including any taxes paid by Seller and applicable to any period from and after the Closing Date. The taxing authority will notify Seller of any refund due Seller resulting from the subject acquisition after a review and any subsequent proration of the property tax assessment by the county assessor. Seller retains the right, following close of escrow, to apply to the appropriate governmental authority/ies for refund of real property taxes pursuant to Revenue and Taxation Code Section 5096.7 (or such other applicable law), and Buyer shall reasonably cooperate with Seller’s efforts to obtain said refund.

9.8.3 Utility Charges. All utility charges shall be prorated as of the Closing Date and Seller shall obtain a final billing therefor. All utility security deposits, if any, shall be retained by Seller.

9.9 Possession. Seller shall deliver possession of the Property to Buyer on the Closing Date, subject to the License Agreement, the Lot C Lease, and the Conditions of Title. Buyer acknowledges that possessory rights in Lot C from and after Closing shall be governed by the Lot C Lease.

ARTICLE 10. DAMAGE, DESTRUCTION AND CONDEMNATION.

This Agreement shall be governed by the Uniform Vendor and Purchaser Risk Act as set forth in Section 1662 of the California Civil Code as supplemented and modified by this Article 10. Seller shall promptly notify Buyer in writing of any material damage to the Property and of any taking or threatened taking of all or any portion of the Property. Within a reasonable period of time after receipt of such notice, Buyer shall determine whether a material part of the Property has been damaged or whether such taking or threatened taking has affected or will affect a material part of the Property. As used herein, (a) the destruction of a “material part” of the Property shall be deemed to mean an insured or uninsured casualty to the Property having an estimated cost of repair which in the reasonable judgment of Buyer equals or exceeds $200,000 and (b) a taking by eminent domain of a portion of the Property shall be deemed to affect a “material part” of the Property if in the reasonable judgment of Buyer the estimated value of the portion of the Property taken exceeds $200,000. Upon making its determination, Buyer shall notify Seller in writing of the results of such determination. Buyer may elect, by written notice delivered to Seller within 30 days after giving Seller notice of such determination, to terminate this Agreement in accordance with Section 9.6.1 if a material part of the Property has been damaged or if such taking has affected or will affect a material part of the Property. If Buyer does not so terminate, (i) in the case of damage to a material part of the Property, Seller shall assign to Buyer at the Closing its right to recover under any insurance policies covering such damage and shall pay Buyer at the Closing the amount of the deductible, if any, and (ii) in the case of a threatened or actual taking of a material part of the Property, Seller shall assign to Buyer at the Closing Seller’s entire right, title and interest in the proceeds thereof. If between the Effective Date and the Closing Date the Property suffers damage which is not material, Seller shall repair such damage at its expense prior to the Closing, and the Closing Date shall be extended for a reasonable period of time not to exceed 30 days to allow for completion of such repairs. The ATTACHMENT NO. 3
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Closing Date shall be extended as necessary to permit Buyer to exercise its rights under this Article

10. ARTICLE 11. OTHER AGREEMENTS

11.1 Put Option Agreement. The Parties intend to enter into the Put Option Agreement concurrently with the Closing; provided however, that the Closing is not conditioned upon, and shall not be delayed by, the execution of the Put Option Agreement.

11.2 Lot C Lease. Concurrently with the Closing, City, as landlord, and WOL, as tenant, shall enter into the Lot C Lease in the form attached as Exhibit H.

ARTICLE 12. GENERAL.

12.1 Notices. All notices, demands, approvals, and other communications provided for in this Agreement shall be in writing and shall be effective (a) when personally delivered to the recipient at the recipient’s address set forth below; (b) five business days after deposit in a sealed envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to the recipient as set forth below; or (c) one business day after deposit with a recognized overnight courier or delivery service, addressed to the recipient as set forth below, whichever is earlier. If the date on which any notice to be given hereunder falls on a Saturday, Sunday or legal holiday, then such date shall automatically be extended to the next business day immediately following such Saturday, Sunday or legal holiday. Email notices may be used for convenience only, unless otherwise agreed by the parties in writing, and shall be deemed delivered one (1) business day after delivery if sent after 5 pm, or received the same day if sent on a business day between 8 am and 5 pm, and a duplicate shall be sent via USPS on the same day as the email.

The addresses for notice are:

SELLER: Water of Life Community Church
14418 Miller Avenue, Suite K
Fontana CA 92336
Attention: Mark Nuaimi
Email: [email protected]
With a copy to: Joshua M. Jacobs
Attn: Joshua M. Jacobs
401 B Street Suite 1200
San Diego, CA 92101
Email: [email protected]
BUYER: City of Fontana
Attn: City Manager
8353 Sierra Ave.

Fontana, CA 92335
Email: [email protected]
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With a copy to: Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Email: [email protected]
Either party may change its address by written notice to the other given in the manner set forth above.

12.2 Entire Agreement. This Agreement and the Schedules and Exhibits hereto contain the entire agreement and understanding between Buyer and Seller concerning the subject matter of this Agreement and supersede all prior agreements, including any previous letter of intent or terms, understandings, conditions, representations and warranties, whether written or oral, made by Buyer or Seller concerning the Property or the other matters which are the subject of this Agreement.

12.3 Amendments and Waivers. No addition to or modification of this Agreement shall be effective unless set forth in writing and signed by the party against whom the addition or modification is sought to be enforced. The party benefited by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless made in writing and signed by the waiving party.

12.4 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.

12.5 References. Unless otherwise indicated, (a) all Article, Section, Schedule and Exhibit references are to the articles, sections, schedules and exhibits of this Agreement, and (b) all references to days are to calendar days. All the Schedules and Exhibits attached hereto are incorporated herein by this reference. Whenever under the terms of this Agreement the time for performance of a covenant or condition falls upon a Saturday, Sunday or California state holiday, such time for performance shall be extended to the next business day. The headings used in this Agreement are provided for convenience only and this Agreement shall be interpreted without reference to any headings. The masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so indicates or requires.

12.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in California.

12.7 Confidentiality and Publicity. Buyer is a public entity and as such, this Agreement, upon its presentation for approval at Buyer’s City council at a duly called and agendized public meeting, shall be subject to the Public Records Act. No press release or other public disclosure ATTACHMENT NO. 3
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may be made by Seller or any of its agents regarding Buyer’s intent for this Property or this transaction without the prior consent of Buyer.

12.8 Time. Time is of the essence in the performance of the parties’ respective obligations under this Agreement.

12.9 Attorneys’ Fees. In the event of any legal or equitable proceeding to enforce any of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding shall be entitled to recover its reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and costs of defense paid or incurred in good faith.

Notwithstanding the foregoing, with respect to any claim by Seller arising out of Buyer’s pre- Closing default under this Agreement, Seller’s recovery of costs, expenses, and attorneys’ fees shall be limited to the amounts recoverable under Section 9.6.5(b); provided however, that the foregoing limitation shall not apply to Seller’s reasonable attorneys’ fees and costs incurred in enforcing Seller’s right to recover such amounts under this Section 12.9.

12.10 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Neither Party shall have the right to assign all or any portion of its interest in this Agreement without the other Party’s prior written consent.

12.11 Further Assurances. Each Party, at any time before or after Closing, shall execute, acknowledge, and deliver such further documents and instruments, and take such further actions, as may be reasonably requested by the other Party and are reasonably necessary to carry out the terms of this Agreement; provided, however, that the requesting Party shall bear any third-party costs and expenses incurred in connection therewith unless otherwise expressly provided in this Agreement..

12.12 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to this Agreement.

12.13 Remedies Cumulative; Survival. Except as otherwise expressly provided in this Agreement (including any exclusive-remedy, election-of-remedies, waiver, Cap, Basket, survival, or limitation-of-liability provisions), the remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party.

12.14 Commissions, Indemnity, Disclosure. Each party represents to the other party that there is no broker representing such party in the current transaction, and that the representing party has incurred no liability for any brokerage commission or finder’s fee arising from or relating to the transactions contemplated by this Agreement. Each party hereby indemnifies and agrees to protect, defend and hold harmless the other party from and against all liability, cost, damage or expense (including without limitation attorneys’ fees and costs incurred in connection therewith) on account of any brokerage commission or finder’s fee which the indemnifying party has agreed ATTACHMENT NO. 3
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to pay or which is claimed to be due as a result of the actions of the indemnifying party. This Section 12.14 is intended to be solely for the benefit of the parties hereto and is not intended to benefit, nor may it be relied upon by, any person or entity not a party to this Agreement.

12.15 Counterparts/Facsimile/PDF Signatures. This Agreement may be executed in counterparts and when so executed by the parties, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument that shall be binding upon the parties, notwithstanding that the parties may not be signatories to the same counterpart or counterparts. The parties may integrate their respective counterparts by attaching the signature pages of each separate counterpart to a single counterpart. In order to expedite the transaction contemplated herein, facsimile or .pdf signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or .pdf document, are aware that the other party will rely on the facsimile or .pdf signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.

12.16 Independent Agreements; No Cross-Incorporation. This Agreement, the Put Option Agreement, and the Lot C Lease are separate and independent agreements. No defined term or provision of any one applies to, modifies, or is incorporated into any other, and none is conditioned upon the closing or continued effectiveness of the other, except as expressly provided herein. [SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

BUYER:

CITY OF FONTANA,
a California municipal corporation
By
Matthew C. Ballantyne, City Manager
ATTEST:

By:

City Clerk
APPROVED AS TO FORM FOR BUYER:

BEST BEST & KRIEGER LLP
By:

Ruben Duran, City Attorney
ATTACHMENT NO. 3
520
16498.10023\44871023.7
P:4929-4283-2560.10:88014-002 25
SELLER:

WATER OF LIFE COMMUNITY CHURCH, a
California non-profit religious corporation
By
Name: Jim Kensinger
Its: Secretary/Treasurer
APPROVED AS TO FORM FOR SELLER:

Solomon Ward Seidenwurm & Smith LLP
By:

Joshua M. Jacobs, Attorney for Seller
ATTACHMENT NO. 3
521
16498.10023\44871023.7
P:4929-4283-2560.10:88014-002 26
Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions contained therein.

Dated: ______________, 20___
By:

Name:

Title:

ATTACHMENT NO. 3
522
16498.10023\44871023.7
Exhibit “A”
P:4929-4283-2560.10:88014-002
EXHIBIT A-1

LEGAL DESCRIPTION OF LOT C
ATTACHMENT NO. 3
523
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P:4929-4283-2560.10:88014-002 2
EXHIBIT A-2

LEGAL DESCRIPTION OF LOT D
ATTACHMENT NO. 3
524
16498.10023\44871023.7
Exhibit “B”
P:4929-4283-2560.10:88014-002

EXHIBIT B
TRANSFEROR’S CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the CITY OF FONTANA, a California municipal corporation (the “Transferee”), that withholding of tax under Section 1445 of the Code will not be required upon the transfer of a U.S. real property interest to the Transferee by WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation (the “Transferor”), the undersigned hereby certifies the following on behalf of the Transferor:

1. The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);

2. The Transferor’s U.S. employer identification number is _______________; and

3. The Transferor’s office address is ______________________________________.

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

Under penalty of perjury I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Transferor.

DATED: ________________, 20___.

WATER OF LIFE COMMUNITY CHURCH, a
California nonprofit religious corporation
By: _______________________
Name: Jim Kensinger
Title: Secretary/Treasurer
ATTACHMENT NO. 3
525
16498.10023\44871023.7
Exhibit “C”
P:4929-4283-2560.10:88014-002

EXHIBIT C

GENERAL ASSIGNMENT
This Assignment (the “Assignment”) is dated for reference purposes only as of , 2026 by WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation (“Assignor”).

FOR VALUABLE CONSIDERATION, as set forth in that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated , 2026 (the “Agreement”), Assignor hereby assigns and transfers to the CITY OF FONTANA, a California municipal corporation (“ Assignee”), following:

A. Any and all equipment leases, service and/or maintenance agreements and contracts relating to the Property (as defined in the Agreement) (collectively, the “Contracts”) B. Any and all permits, licenses, consents, registrations and other similar approvals applicable to the Property (collectively, the “Approvals”) C. Any and all as-built plans and specifications for: (1) the Property; (2) any and all improvements used in connection with the operation or occupancy of the Property or located upon the Property (the “Improvements”); and (3) any and all personal property owned by Assignor located within or used in connection with the operation of the Property and Improvements (the “Personal Property”) (collectively, the “Plans”); and
D. All warranties of which Assignor is the beneficiary (the “Warranties”) with respect to the Improvements or Personal Property.

This Assignment shall not supersede the Agreement and, in the event of conflict between this Assignment and the Agreement, the Agreement shall control.

This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective heirs, executors, administrators, successors and assigns.

This Assignment shall take effect the last to occur of the following: (i) full execution by all parties, as shown by the last date entered below the parties’ signatures and (ii) upon the consummation of the transaction between Assignee and Assignor.

IN WITNESS WHEREOF, Assignor has executed this Assignment as of the date first above written.

ASSIGNOR:

WATER OF LIFE COMMUNITY CHURCH, a
California nonprofit religious corporation
By
Name: Jim Kensinger
Its Secretary/Treasurer
ATTACHMENT NO. 3
526
16498.10023\44871023.7
Exhibit “D”
P:4929-4283-2560.10:88014-002

EXHIBIT D

GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO
City of Fontana
8353 Sierra Ave.

Fontana, CA 92335
ATTN: City Clerk

EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
SPACE ABOVE THIS LINE FOR RECORDER’ S USE
APN: 1100-091-71-0000 and 1100-111-51-0000
Grant Deed
The undersigned Grantor(s) declare(s): City of Fontana is exempt from property taxes Documentary transfer tax is $0 pursuant to R&T Code Section 11922 (Grantee is a governmental entity) Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.

Unincorporated area City of Fontana and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation hereby GRANT(S) to
CITY OF FONTANA, a California municipal corporation
the following described real property in the City of Fontana County of San Bernardino
State of California:

SEE ATTACHED EXHIBIT A
Dated: _______________, 20___ WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation
By: [exhibit only – do not execute]
Name:

Its:

ATTACHMENT NO. 3
527
16498.10023\44871023.7
Exhibit “D”
P:4929-4283-2560.10:88014-002

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

STATE OF CALIFORNIA )

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

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

WITNESS my hand and official seal.

Signature:
(seal)
ATTACHMENT NO. 3
528
16498.10023\44871023.7
Exhibit “D”
P:4929-4283-2560.10:88014-002

CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the Grant Deed dated __________________, 2026, from WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation, to the , a , is hereby accepted by the undersigned officer on behalf of the City of , pursuant to the authority conferred by Resolution No. , adopted by the City Council of the City of Fontana on _ , 2026, and the Grantee consents to recordation thereof by its duly authorized officer.

Dated: _________________, 2026 CITY OF FONTANA, a California municipal corporation
By [exhibit only – do not execute]
Matthew C. Ballantyne, City Manager
ATTACHMENT NO. 3
529
16498.10023\44871023.7
Exhibit “E”
P:4929-4283-2560.10:88014-002

EXHIBIT E

ASSIGNMENT AND ASSUMPTION OF LICENSE AGREEMENT

1. This ASSIGNMENT AND ASSUMPTION OF LICENSE AGREEMENT
(the “Assignment”), dated __________________, 2026 for reference purposes only, is made by WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation (“Assignor”) and the CITY OF FONTANA, a California municipal corporation (“Assignee”) who, in consideration of the promises and covenants set forth herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, agree as follows:

2. Background. Pursuant to the Communication Site License Agreement between Water of Life Community Church (Licensor) and
(Licensee) dated March 18, 2020, together with any amendments, consents, recorded memoranda, or other written modifications thereto (the “License Agreement”), Assignor, as licensor, has granted to the licensee identified therein the right to install, operate and maintain certain communication site improvements and related equipment on that certain real property commonly known as APN 1100-111-51-0000 (“Lot D”), located in the City of Fontana, County of San Bernardino, State of California (the “Property”). Concurrently herewith, Assignee is acquiring Lot D (together with other property) from Assignor pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated __________________, 2026 (the “Purchase Agreement”). In connection with Assignee’s acquisition of record fee title to the Property, Assignor desires to assign its interest as licensor under the License Agreement to Assignee, and Assignee desires to accept such assignment on the terms and conditions set forth herein.

3. Assignment. Effective as of the Assignment Date (as defined in Section 5), Assignor hereby assigns to Assignee all of Assignor’s right, title and interest in and to the License Agreement as licensor, including all right to receive rents, fees and other payments thereunder accruing from and after the Assignment Date, together with any guaranties and warranties related thereto, if any. Assignor agrees to indemnify, defend, and hold Assignee harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses, including reasonable attorneys’ fees, arising out of Assignor’s obligations under the License Agreement to the extent arising or accruing before the Assignment Date, subject in all respects to the terms, conditions, and limitations set forth in the Purchase Agreement.

4. Assumption. Assignee hereby accepts the assignment set forth in Section 3 above and hereby assumes all of Assignor’s obligations under the License Agreement arising or accruing on and after the Assignment Date. Assignee agrees to indemnify, defend, and hold Assignor harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses, including reasonable attorneys’ fees, arising out of Assignee’s obligations under the License Agreement to the extent arising or accruing on ATTACHMENT NO. 3
530
16498.10023\44871023.7
Exhibit “E”
P:4929-4283-2560.10:88014-002
and after the Assignment Date, subject in all respects to the terms, conditions, and limitations set forth in the Purchase Agreement.

5. Assignment Date. This Assignment shall be conditioned and effective upon the conveyance to Assignee of record fee title to Lot D (the “Assignment Date”).

6. No Third-Party Beneficiaries. Nothing contained in this Assignment shall be construed to alter the License Agreement or to confer any rights upon any party other than Assignor and Assignee; provided, however, that this Assignment may be presented to the licensee under the License Agreement as evidence of Assignee’s status as successor licensor from and after the Assignment Date.

7. Binding on Successors . This Assignment shall be binding on and shall inure to the benefit of the parties hereto, their heirs, executors, administrators, successors in interest and assigns.

8. Further Assurances. Each of the parties shall execute and deliver any and all additional papers, documents and other assurances and shall do any and all acts and things reasonably necessary in connection with the performance of their obligations under this Assignment and to carry out the intent of the parties, provided that the requesting party shall bear any third-party costs and expenses incurred in connection therewith unless otherwise expressly provided in the Purchase Agreement.

9. Counterparts. This Assignment may be executed in two (2) or more counterparts, each of which shall be deemed an original (including copies sent to a party by electronic transmission as against the party signing such counterpart), but which together shall constitute one and the same instrument.

ATTACHMENT NO. 3
531
16498.10023\44871023.7
Exhibit “E”
P:4929-4283-2560.10:88014-002
IN WITNESS WHEREOF, the parties have executed this Assignment the day and year written above.

ASSIGNOR

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
By: [exhibit only – do not execute]
Name: _________________________
Its: __________________________

ASSIGNEE
CITY OF FONTANA, a California municipal corporation
By [exhibit only – do not execute]
Matthew C. Ballantyne, City Manager
ATTACHMENT NO. 3
532
16498.10023\44871023.7
Exhibit “F”
P:4929-4283-2560.10:88014-002

EXHIBIT F

BINDING MEMORANDUM OF UNDERSTANDING
[See attached]
ATTACHMENT NO. 3
533
16498.10023\44871023.7
Exhibit “G”
P:4929-4283-2560.10:88014-002

EXHIBIT G

LICENSEE NOTICE LETTER

VIA CERTIFIED MAIL (RETURN RECEIPT REQUESTED) AND VIA EMAIL [LICENSEE NAME]
Attn: __________________________
[LICENSEE ADDRESS]
Email: _________________________
Re: Notice of Property Conveyance and Assignment of License Agreement; Successor Licensor
Property: Lot D (APN 1100-111-51-0000), City of Fontana, California License Agreement: Communication Site License Agreement dated March 18, 2020, as amended (“License Agreement”), by and between Water of Life Community Church, a California nonprofit religious corporation, as licensor (“Seller/Licensor”), and [LICENSEE NAME], as licensee (“Licensee”)
To [LICENSEE NAME]:

Please be advised that Licensor has conveyed the above-referenced Property to CITY OF FONTANA, a California municipal corporation (“Successor Licensor”). This letter constitutes formal notice that the transaction is scheduled to close on , 2026 (“Closing”).

Effective as of the Closing, Licensor assigned to Successor Licensor all of Licensor’s right, title, and interest as licensor under the License Agreement, and Successor Licensor assumed all obligations of Licensor under the License Agreement arising after the Closing (the “Assignment”).

All future payments, fees, and all other amounts due under the License Agreement, and all notices, demands, requests, consents, approvals, and other communications required or permitted to be delivered to licensor under the License Agreement, shall be delivered to Successor Licensor at the address set forth below (or such other address as Successor Licensor may later designate to Licensee in writing):

CITY OF FONTANA
Attn: City Manager and City Clerk
8353 Sierra Avenue
Fontana, CA 92335
Email: [email protected]
If Successor Licensor designates a separate department, agent, or third-party administrator for day- to-day administration of the License Agreement (including invoicing and payment processing), Successor Licensor will provide Licensee with updated contact and payment instructions in writing.

ATTACHMENT NO. 3
534
16498.10023\44871023.7
Exhibit “G”
P:4929-4283-2560.10:88014-002
If you have any questions regarding this notice, please contact the City representative identified above. Thank you for your cooperation.

Very truly yours,

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
By: [exhibit only – do not execute]
Name: _________________________
Its: __________________________
ATTACHMENT NO. 3
535
16498.10023\44871023.7
Exhibit “H”
P:4929-4283-2560.10:88014-002

EXHIBIT H

LOT C LEASE
[See attached]
ATTACHMENT NO. 3
536
16498.10023\44871023.7
Exhibit “H”
P:4929-4283-2560.10:88014-002
ATTACHMENT NO. 3
537
16498.10023\44871023.7
Exhibit “H”
ATTACHMENT NO. 3
538
16 498. 10023\45171852. 3Error! Unknown document property name.

P: 4932- 26 90- 6 555. 9: 88014- 002

GROUND LEASE
by and between

CITY OF FONTANA,
a California municipal corporation
("Landlord")
and

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
("Tenant")
ATTACHMENT NO. 4
539
Error! Unknown document property name.

TABLEOFCONTE NTS
Page
P: 4932- 26 90- 6 555. 9: 88014- 002 i
ARTICLE 1. PREMISES AND BACKGROUND......................................................................1

1.01. The Premises..........................................................................................1

1.02. Lease ......................................................................................................1

1.03. Purchase Agreement; Leaseback ...........................................................1 ARTICLE 2. TERM 1

2.01. Term.......................................................................................................1

2.02. Commencement .....................................................................................1

2.03. Tenant Early Termination Right ............................................................2 ARTICLE 3. RENT 2

3.01. Base Rent ...............................................................................................2

3.02. CityLink Services Rent Reduction.........................................................2

3.03. Cessation of CityLink Social Services...................................................2

3.04. Rent Reset ..............................................................................................3

3.05. Net Lease ...............................................................................................3 ARTICLE 4. USE, CHARACTER AND OPERATION OF IMPROVEMENTS...................3

4.01. General...................................................................................................3

4.02. Use Obligations......................................................................................4

4.03. Use Prohibitions.....................................................................................4

4.04. Landlord Improvements.........................................................................5

4.05. Governmental Requirements .................................................................5

4.06. Governmental Capacity; No Entitlement...............................................6 ARTICLE 5. CONSTRUCTION AND MAINTENANCE OF IMPROVEMENTS ...............6

5.01. Required Governmental Permits............................................................6

5.02. Premises Conditions...............................................................................6

5.03. Grant of Easements ................................................................................7

5.04. Maintenance; Repairs, Alterations; Reconstruction ..............................7

5.05. Ownership of Improvements..................................................................8

5.06. Future Improvements; Landlord Approval ............................................9

5.07. Construction Costs; Liens......................................................................9

5.08. CEQA; Governmental Approvals ..........................................................9

5.09. Prevailing Wage Compliance ................................................................9

5.10. Landlord Review; No Responsibility...................................................10 ARTICLE 6. TAXES AND ASSESSMENTS............................................................................10

6.01. Personal Property Taxes ......................................................................10

6.02. Real Property Taxes.............................................................................10

6.03. Tenant's Tax Liability Prorated............................................................10

6.04. Revenue & Taxation Code Section 107.6............................................10 ARTICLE 7. UTILITIES............................................................................................................11 ARTICLE 8. INSURANCE AND INDEMNITY ......................................................................11

8.01. Indemnity .............................................................................................11

8.02. Insurance..............................................................................................11

8.03. Review .................................................................................................12 ATTACHMENT NO. 4
540
Error! Unknown document property name.

TABLEOFCONTE NTS
Page
P: 4932- 26 90- 6 555. 9: 88014- 002 ii

8.04. Proof of Coverage................................................................................12

8.05. Environmental Indemnity ....................................................................12

8.06. Hazardous Materials Compliance; Notice ...........................................14

8.07. Environmental Testing.........................................................................14 ARTICLE 9. CONDEMNATION ..............................................................................................15

9.01. Definitions............................................................................................15

9.02. Parties' Rights and Obligations to be Governed by Lease ...................15

9.03. Total Taking.........................................................................................15

9.04. Effect of Partial Taking........................................................................15

9.05. Restoration of the Premises .................................................................15

9.06. Waiver of Code of Civil Procedure Section 1265.130 ........................16

9.07. Award...................................................................................................16 ARTICLE 10. TENANT DEFAULTS AND LANDLORD'S REMEDIES ............................16

10.01. Defaults by Tenant...............................................................................16

10.02. Landlord's Remedies............................................................................16

10.03. Continuation.........................................................................................17

10.04. Entry.....................................................................................................17

10.05. Rights Cumulative ...............................................................................17

10.06. Landlord's Right to Cure Tenant's Default ..........................................18 ARTICLE 11. MISCELLANEOUS ...........................................................................................18

11.01. Holding Over .......................................................................................18

11.02. Attorneys' Fees.....................................................................................18

11.03. Quiet Possession ..................................................................................18

11.04. Force Majeure ......................................................................................18

11.05. Notices .................................................................................................19

11.06. Waiver..................................................................................................20

11.07. Surrender..............................................................................................20

11.08. Binding.................................................................................................20

11.09. Landlord's Right to Enter the Premises................................................20

11.10. Disclaimer of Partnership ....................................................................21

11.11. Memorandum.......................................................................................21

11.12. Quitclaim..............................................................................................21

11.13. Interpretation........................................................................................21

11.14. Covenants and Conditions ...................................................................21

11.15. Integration ............................................................................................21

11.16. Estoppel Certificate..............................................................................22

11.17. Landlord's Right to Sell .......................................................................22

11.18. Assignment; Sublease; Encumbrances ................................................22

11.19. Proprietary and Governmental Roles...................................................22

11.20. Non-Liability of City Officials ............................................................22 ATTACHMENT NO. 4
541
Error! Unknown document property name.

P: 4932- 26 90- 6 555. 9: 88014- 002 1

LOT C GROUND LEASE
THIS GROUND LEASE (the "Lease") is made and entered into as of , 2026 (the “Effective Date ”), by and between the CITY OF FONTANA, a California municipal corporation ("Landlord " or “City”), and WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation ("Tenant" or “WOL”), in connection with that certain Purchase and Sale Agreement and Joint Escrow Instructions dated , 2026, by and between Landlord, as buyer, and Tenant, as seller (the "Purchase Agreement"), who agree as follows:

ARTICLE 1. PREMISES AND BACKGROUND.

1.01. The Premises. Landlord is the owner, or concurrently with the commencement of this Lease will be the owner, of that certain real property commonly known as Lot C, APN 1100- 091-71-0000, located in the City of Fontana, County of San Bernardino, State of California, as more particularly described in Exhibit A, attached hereto and incorporated herein by reference (the " Premises"). A map of the Premises is attached as Exhibit B , attached hereto and incorporated herein by reference.

1.02. Lease. For and in consideration of the payment of rentals and the performance of all the covenants and conditions of this Lease, Landlord hereby leases and demises to Tenant, and Tenant hereby leases and hires from Landlord, the Premises for the purposes set forth herein.

1.03. Purchase Agreement; Leaseback. This Lease is entered into as a material part of, and concurrently with, the closing under the Purchase Agreement. The parties acknowledge that Tenant (as seller under the Purchase Agreement) conveyed, or concurrently with the commencement of this Lease will convey, fee title to the Premises to Landlord (as buyer under the Purchase Agreement) pursuant to the Purchase Agreement, and that this Lease constitutes the agreed leaseback of the Premises to Tenant. Nothing in this Lease shall modify, waive, or limit either party’ s rights or obligations under the Purchase Agreement, except to the extent expressly stated herein.

ARTICLE 2. TERM.

2.01. Term. The initial term of this Lease (the " Lease Term") shall be fifty-five (55) years and shall expire at 11:59 p.m. on the day immediately preceding the fifty-fifth (55th) anniversary of the Commencement Date, unless terminated earlier in accordance with the provisions of this Lease.

2.02. Commencement. The Lease Term shall commence on the date Landlord acquires fee title to the Premises pursuant to that certain Purchase and Sale Agreement and Joint Escrow Instructions between Landlord and Tenant relating to Lot C and Lot D, provided that this Lease has been fully executed by the parties (the " Commencement Date"). If the closing under the ATTACHMENT NO. 4
542
Error! Unknown document property name.

P: 4932- 26 90- 6 555. 9: 88014- 002 2
Purchase Agreement does not occur, this Lease shall not commence and shall be of no force or effect.

2.03. Tenant Early Termination Right. Tenant may terminate this Lease at any time upon not less than six (6) months prior written notice to Landlord, which termination shall be effective on the date specified in Tenant’ s notice, but in no event earlier than six (6) months after Landlord’ s receipt of such notice. Tenant shall remain responsible for all Rent, taxes, insurance, maintenance obligations, indemnity obligations, surrender obligations, and other obligations accruing through the effective date of termination.

ARTICLE 3. RENT.

3.01. Base Rent. During years 1 through 14 of the Lease Term, the base rent for the Premises shall be Twelve Thousand Dollars ($12,000.00) per month (the "Base Rent"), payable monthly in advance on or before the first day of each calendar month, subject to reduction as provided in Section 3.02. The parties acknowledge that Base Rent is intended to reflect the agreed value differential between the amount forgiven by Landlord under that certain Promissory Note dated March 22, 2023, and the agreed value of Lots C and D acquired by Landlord pursuant to the Purchase and Sale Agreement.

3.02. CityLink Services Rent Reduction. Notwithstanding Section 3.01, and subject to all applicable notice and cure periods, so long as: (a) CityLink Social Services are continuously operated at the CityLink Campus, and (b) the Public Benefit Use Covenant remains in effect and WOL is not in default beyond applicable notice and cure periods thereunder, Base Rent shall be reduced to One Dollar ($1.00) per year. For purposes of this Lease, "CityLink Social Services" means the operation of homeless support, case management, food, clothing, resource navigation, or similar services for homeless, disadvantaged, and other vulnerable populations within the City, substantially consistent with the services operated as of the Commencement Date at that certain real property located at 16029 Arrow Boulevard, Fontana, California, consisting of APN 0232-201-12-000 (“Parcel 1”) as the same may be modified by any lot line adjustment affecting Parcel 1 (the “CityLink Campus ”). The parties acknowledge that the Public Benefit Use Covenant is intended to be recorded against Parcel 1, and not against the Premises. This Section

3.02 establishes a rent-reduction condition only and does not limit, modify, or supersede the Public Benefit Use Covenant. “Public Benefit Use Covenant” means that certain public benefit use covenant attached to this Lease and to be recorded against Parcel 1 (or such portion thereof as is described therein), requiring the continued operation of services for homeless, disadvantaged, and other vulnerable populations within the City for the period set forth therein.

3.03. Cessation of CityLink Social Services. If: (a) CityLink Social Services cease to be continuously operated at the CityLink Campus prior to the commencement of year 15 of the Lease Term, and such cessation continues beyond thirty (30) days after written notice from Landlord (or, if the cessation cannot reasonably be cured within thirty (30) days, such longer period as is reasonable so long as Tenant commences cure within such 30-day period and diligently pursues it to completion, but in any event not to exceed ninety (90) days without Landlord’ s written consent, not to be unreasonably withheld), or (b) if the Public Benefit Use Covenant remains in effect and Tenant is in default beyond any applicable notice and cure period thereunder, then Base Rent shall revert to the amount set forth in Section 3.01 beginning on the ATTACHMENT NO. 4
543
Error! Unknown document property name.

P: 4932- 26 90- 6 555. 9: 88014- 002 3
first day of the calendar month following expiration of the applicable notice and cure period and continuing until the earliest of: (a) the date CityLink Social Services have resumed and Tenant is no longer in default beyond any applicable notice and cure period under the Public Benefit Use Covenant; (b) the commencement of year 15 of the Lease Term; (c) Tenant's proper termination of this Lease pursuant to Section 2.03; or (d) the expiration or earlier termination of this Lease. Reversion of Base Rent under this Section shall be in addition to, and shall not limit, any rights or remedies of Landlord or the City under the Public Benefit Use Covenant or the Purchase Agreement. Notwithstanding the foregoing, if CityLink Social Services cease to be continuously operated more than three (3) times during years 1 through 14 of the Lease Term, beyond any applicable notice and cure period then Tenant shall permanently lose the rent reduction under Section 3.02 for the remainder of years 1 through 14 of the Lease Term, and Base Rent shall thereafter be payable in the amount set forth in Section 3.01. For purposes of this Section, each separate cessation of CityLink Social Services that continues beyond thirty (30) days after written notice from Landlord shall count as one cessation.

3.04. Rent Reset. Commencing on the first day of year 15 of the Lease Term and continuing for the remainder of the Lease Term, Base Rent shall automatically be reduced to One Dollar ($1.00) per year. Nothing in this Section 3.04 shall modify, waive, limit, or supersede Tenant’ s obligations under the Public Benefit Use Covenant.

3.05. Net Lease. This Lease is a net lease, and Rent and other payments due and payable hereunder to or on behalf of Landlord shall be paid without notice or demand and without offset, counterclaim, abatement, suspension, deferment, deduction or defense, except for the rent reduction expressly provided in this Article 3.

ARTICLE 4. USE, CHARACTER AND OPERATION OF IMPROVEMENTS.

4.01. General. Tenant may only use the Premises as set forth herein:

A. Permitted Use. Tenant may use the Premises for parking, and related church, ministry, and ancillary uses, including parking and access uses ancillary to CityLink Social Services operated at the CityLink Campus, and for no other purpose without Landlord's prior written consent (the “Permitted Use”). No building, structure, canopy, solar facility, permanent vertical improvement, or material expansion (collectively, the "Improvements") or change in use shall be constructed, installed, or undertaken on the Premises without Landlord’ s prior written approval, which approval may be granted, conditioned, or withheld in Landlord’ s reasonable discretion, and shall be subject to all required governmental approvals, CEQA (as defined in Section 5.08) compliance, insurance, prevailing wage compliance, and the other requirements of this Lease.

B. Landlord Reserved Use Rights. Landlord reserves the right to access and use the Premises for public agency training operations and related governmental purposes, provided that Landlord shall coordinate such use with Tenant in advance and shall not unreasonably interfere with Tenant's Permitted Use or CityLink Social Services. Tenant shall not install gates, barriers, signage, striping, reserved parking, equipment, or other improvements that would materially impair Landlord’ s reserved rights under this Section without Landlord’ s prior ATTACHMENT NO. 4
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written consent. Landlord shall promptly repair any damage to the Premises solely caused by Landlord’ s use of the Premises.

C. Tenant Improvements. Tenant shall maintain, repair, replace, restripe, expand, or improve parking lot Improvements on the Premises at its sole cost, subject to Section

5.01. Tenant shall obtain all required governmental permits and approvals at Tenant's sole cost.

Any proposed building, structure, permanent vertical improvement, material alteration, change in drainage, change in access, change in parking layout, or improvement that may affect Landlord’ s reserved use rights shall require Landlord’ s prior written approval and shall be subject to Sections

5.07 through 5.10 below.

4.02. Use Obligations. There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, age, handicaps, sex, marital status, sexual orientation, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Premises or the improvements thereon, or any part thereof, and Tenant itself, or any person claiming under or through it, shall not establish or permit any such practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, subtenants or vendees of the Premises or the improvements thereon, or any part thereof. For the avoidance of doubt, nothing in this Section 4.02 shall be construed to restrict or interfere with Tenant’ s rights, as a church and nonprofit religious organization, to govern its internal affairs, conduct its worship and ministries, select its ministers, employees, volunteers, members, or participants, or make decisions consistent with its sincerely held religious beliefs, in each case to the fullest extent permitted by applicable law. Nothing in this Section shall waive or limit any exemption, defense, immunity, right, or protection otherwise available to Tenant under applicable law.

4.03. Use Prohibitions. Tenant agrees that in connection with the use and operation of the Premises it will not:

A. assign or otherwise transfer its interest in this Lease, without the express written consent of Landlord, such consent not to be unreasonably withheld, conditioned or delayed; or
B. Sublease all or any portion of the Premises and improvements thereon without the express written consent of Landlord, such consent not to be unreasonably withheld, conditioned or delayed; or
C. Use or permit the use of any objectionable advertising medium such as, without limitation, loudspeakers, phonographs, public address systems, sound amplifiers, radio or broadcast within the improvements in such manner that any sounds reproduced, transmitted or produced shall be directed primarily beyond the interior of the improvements or common areas (provided, however, that nothing herein shall be deemed to prohibit the installation and use of a public address system for security purposes), or background music and will keep all mechanical apparatus free of vibration and noise which may be transmitted beyond the interior of the improvements or common areas; or
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D. Cause or permit materially offensive odors to emanate from the Premises in a manner that constitutes a nuisance under applicable law; or E. Permit unreasonable accumulations of garbage, trash, rubbish or any other refuse; or
F. Create, cause, maintain or permit any nuisance (as defined under applicable law) in, on or about the Premises; or
G. Commit or suffer to be committed any waste (as defined under applicable law) in, on or about the Premises; or
H. Knowingly use or allow the Premises to be used for any unlawful purpose, or for any purpose which violates the terms of any recorded instrument which affects the Premises and which is senior in priority to this Lease; or
I. By any act or omission of Tenant, cause any insurance coverage required under this Lease to become void or voidable, unless Tenant obtains replacement coverage without a lapse, or make such required coverage unavailable at commercially reasonable rates; or J. Violate any law, ordinance or regulation applicable to the Premises and the improvements thereon.

K. Use any portion of the Premises for residential occupancy, school operations, daycare operations other than incidental child supervision during church or ministry activities, retail sales unrelated to Tenant’ s nonprofit religious or ministry purposes, commercial storage, industrial use, cannabis-related activities, adult-oriented uses, gambling, nightclub or entertainment uses, or any other use not expressly permitted under this Lease; or L. Use or permit the Premises to be used in a manner that materially interferes with Landlord’ s reserved use rights, public safety operations, access rights, or governmental functions.

4.04. Landlord Improvements. Landlord shall have the right to construct, install, maintain, repair, replace, and remove improvements on the Premises, provided that such improvements do not materially interfere with Tenant’ s continued use of the Premises for the Permitted Use. Landlord shall coordinate such work with Tenant in advance, except in an emergency or where immediate action is necessary for public health, safety, or governmental purposes.

4.05. Governmental Requirements. Tenant shall at all times comply in all respects with, and shall pay all costs and expenses incurred or required to be paid in order to comply with, any and all laws, statutes, ordinances, rules and regulations (“Laws”) applicable to Tenant’ s use, occupancy, operation, maintenance, repair, alteration or construction on the Premises, including those requiring alterations or additions to be made to, or safety appliances and devices to be maintained or installed in, on or about the Premises. Tenant shall also pay any fees, charges or assessments directly arising from Tenant’ s use or operation of the Premises. Tenant shall, at Tenant’ s sole cost, obtain and maintain all licenses, permits, approvals, certificates and ATTACHMENT NO. 4
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inspections required by applicable Law for Tenant’ s use, occupancy, maintenance, repair, alteration, construction or operation of the Premises. Notwithstanding the foregoing, Tenant shall not be responsible under this Section to the extent: (a) Tenant proves by clear and convincing evidence such condition or non-compliance predates Tenant’ s ownership of the Property; or (b) Tenant proves by clear and convincing evidence that a condition arises from Landlord’ s gross negligence or willful misconduct after the Commencement Date or arising from Landlord’ s reserved use, improvements, acts or omissions, except to the extent caused or exacerbated by Tenant. Tenant may contest any requirement in good faith, provided that such contest does not subject City or the Premises to any risk, lien or liability.

4.06. Governmental Capacity; No Entitlement. This Lease is entered into by Landlord in its proprietary capacity as owner and landlord of the Premises, and not in its governmental or regulatory capacity. Nothing in this Lease shall be deemed to grant, approve, vest, waive, modify, or supersede any entitlement, permit, approval, inspection, zoning requirement, CEQA determination, building permit, condition of approval, code requirement, or other governmental requirement applicable to the Premises or Tenant’ s use or improvements. Landlord’ s approval under this Lease shall not constitute approval by Landlord in its governmental capacity, and the Landlord shall retain full discretion to approve, condition, deny, or otherwise act on any permit, entitlement, CEQA determination, or governmental approval. Any failure or refusal by the City, acting in its governmental capacity, to approve any permit, entitlement, CEQA document, building permit, inspection, or other governmental approval shall not constitute a default by Landlord under this Lease.

ARTICLE 5. CONSTRUCTION AND MAINTENANCE OF IMPROVEMENTS.

5.01. Required Governmental Permits. Tenant shall procure, and upon Landlord's request, deliver to Landlord at Tenant's expense, evidence of compliance with all then applicable codes, ordinances, regulations and requirements for permits and approvals applicable to any construction, alteration, or other improvement work performed by or for Tenant on the Premises that requires a governmental permit or approval. Tenant shall not commence any construction, alteration, demolition, grading, paving, utility work, drainage work, building work, or other improvement work on the Premises unless Tenant has first obtained all required governmental approvals and Landlord’ s written approval under this Lease. Notwithstanding the foregoing, no Landlord approval shall be required for ordinary maintenance, repair, replacement in kind, cleaning, landscaping, restriping, or other non-structural/non-capital improvement work, provided such work in the aggregate does not exceed $250,000 in a calendar year.

5.02. Premises Conditions. Tenant acknowledges that Tenant is the prior owner of the Premises and, prior to the Commencement Date, owned, occupied, used, operated, maintained, and controlled the Premises. Tenant further acknowledges that Landlord is acquiring the Premises from Tenant pursuant to the Purchase Agreement and is leasing the Premises back to Tenant immediately following such acquisition. Landlord makes no covenants, representations, or warranties respecting any condition of the Premises, including its physical condition, environmental condition, prior use, suitability, access, utilities, zoning, compliance with laws, or fitness for any particular purpose, except to the extent expressly set forth in the Purchase Agreement. By entering on, continuing possession of, and accepting the Premises as of the Commencement Date, Tenant accepts the Premises AS IS, WHERE IS, WITH ALL FAULTS, ATTACHMENT NO. 4
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without reliance on any representation or warranty by Landlord under this Lease. Landlord shall have no obligation to investigate, remediate, repair, restore, improve, or otherwise alter the Premises, except as expressly provided in this Lease.

5.03. Grant of Easements. Landlord may, in its reasonable discretion, cooperate with Tenant in granting easements reasonably necessary to serve the Premises, subject to Landlord approval and at Tenant’ s cost.

5.04. Maintenance; Repairs, Alterations; Reconstruction.

A. Tenant Required to Maintain Premises.
(1) Definition of Duty; Compliance with Laws. Throughout the Term, Tenant shall, at Tenant's sole cost and expense, maintain the Premises and all Improvements, including all parking areas, drive aisles, striping, lighting, landscaping, drainage facilities, and other improvements located on the Premises, in good condition and repair (and in no event in a condition materially worse than as of the Commencement Date), ordinary wear and tear excepted, and in accordance with all applicable laws, rules, ordinances, orders and regulations of federal, state, county, municipal and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus and officials. Notwithstanding the foregoing, Tenant shall not be responsible for any condition or noncompliance to the extent: (i) Tenant proves by clear and convincing evidence that such condition or non-compliance predates Tenant’ s ownership of the Property; or (b) Tenant proves by clear and convincing evidence that a condition arises from Landlord’ s gross negligence or willful misconduct after the Commencement Date, or any condition arising from Landlord's reserved use, entry, improvements, acts, or omissions, except in each case, to the extent caused or exacerbated by Tenant. Tenant shall keep the Premises clean, safe, sanitary, secure, graffiti-free, free of debris and nuisance conditions, and suitable for the permitted parking, church, and ministry uses. Nothing in this Section shall be construed to make Tenant an insurer of the safety or security of the Premises. Landlord shall have no duty or obligation to insure the Premises or any Improvements. (2) Tenant shall promptly and diligently repair, restore, and replace as reasonably necessary to maintain or comply as above. Landlord shall not be required to furnish any services or facilities or to make any repairs or alterations of any kind in or on the Premises except to the extent necessitated by Landlord’ s acts or omissions. (3) Nothing in this provision defining the duty of maintenance shall be construed as limiting any right given elsewhere in this Lease to alter, modify, demolish, remove or replace any improvement, or as limiting provisions relating to condemnation or to damage or destruction during the final year or years of the Term. No deprivation, impairment or limitation of use resulting from any event or work contemplated by this section shall entitle Tenant to any offset, abatement, or reduction in rent nor to any termination or extension of the Term. (4) In determining whether Tenant has acted promptly as required under the foregoing paragraph, one of the criteria to be considered is the availability of any applicable insurance proceeds.

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(5) If Tenant elects not to restore after damage or destruction, in accordance with the provisions of this Lease, all insurance proceeds received by Tenant as a result of such damage or destruction shall be Tenant's sole property.

5.05. Ownership of Improvements.

A. Ownership of Any New Improvements. Any and all Improvements constructed on the Premises by Tenant as permitted by this Lease shall be owned by Tenant until expiration of the Term or sooner termination of this Lease. Tenant shall not waste, destroy or modify any Improvements on the Premises, except as permitted by this Lease.

B. Equipment, Chattel, Trade Fixtures. All articles of personal property, including all chattel and business and trade fixtures, machinery, equipment, furniture and movable partitions owned by Tenant or any subtenants, and which where installed by Tenant or subtenants at their expense on the Premises, shall remain the property of Tenant or subtenant, respectively, and may be removed at any time during the Term or upon termination of this Lease. Tenant shall be responsible for the repair of any damage caused by such removal.

C. Ownership at Termination. Subject to the provisions of Section 5.05.D, all Improvements on the Premises at the expiration of the Term or sooner termination of this Lease shall, without compensation to Tenant, then become Landlord's property free and clear of all claims to or against them by Tenant or any third person, and Tenant shall defend and indemnify Landlord against all liability and loss arising from such claims or from Landlord's exercise of the rights conferred by this paragraph.

D. Tenant's Duty to Remove. At the expiration or sooner termination of the Term, Landlord may, at Landlord's election, demand the removal from the Premises of all fixtures and Improvements constructed or placed on the Premises by Tenant or of certain fixtures or improvements or both, as specified in the notice provided for below. Notwithstanding the foregoing, with respect to the scheduled expiration of the Term only, Tenant shall not be required to remove any fixture or Improvement unless Landlord notified Tenant in writing at least one hundred eighty (180) days before the scheduled expiration of the Term. A demand to take effect at the normal expiration of the Term shall be effected by notice given at least one hundred eighty (180) days before the expiration date. A demand to take effect on any other termination of the Lease shall be effected by notice given in or concurrently with notice of such termination or within fifteen (15) days after such termination. Tenant shall comply with the notice before the expiration date, for normal termination, and within thirty (30) days after the notice for other terminations.

The cost of such removal shall be paid by Tenant. The duty imposed by this provision includes but is not limited to the duty to fill all excavations, return the surface to grade and leave the Premises safe and free from debris and hazards; provided that, after compliance with a demand for removal of less than all fixtures and Improvements, Tenant shall be required to remedy only willful and negligent injuries to the Premises or remaining Improvements or fixtures. The duty imposed by this Section 5.05 shall not include an obligation to remove underground utilities, parking and sidewalk areas and landscaping or any fixtures or improvements installed or constructed by or for Landlord.

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E. Waiver. The provisions of this Article 5 shall govern the rights of the parties in the event of any full or partial destruction of Improvements on the Premises. Tenant hereby waives the provisions of Civil Code section 1932(2) and Civil Code section 1933(4) with respect to any destruction of any Improvements on the Premises to the extent that such Civil Code sections are inconsistent with the provisions of this Article 5.

5.06. Future Improvements; Landlord Approval. Except for ordinary maintenance and repair of existing parking improvements that does not materially alter the Premises, Tenant shall not construct, install, demolish, expand, materially alter, or replace any Improvements without Landlord’ s prior written approval. Tenant’ s request for approval shall include plans, specifications, site layout, proposed schedule, contractor information, evidence of insurance, evidence of required governmental approvals, and such other information as Landlord may reasonably request. Landlord’ s review shall be solely in Landlord’ s proprietary capacity and shall not constitute approval in Landlord’ s governmental capacity.

5.07. Construction Costs; Liens. Tenant shall pay when due all costs of labor, services, materials, equipment, design, engineering, permits, fees, inspections, and other costs incurred in connection with any work performed by or for Tenant on the Premises. Tenant shall not permit any mechanic’ s lien, stop payment notice, bonded stop payment notice, encumbrance, or similar claim to be recorded, served, or asserted against Landlord’ s fee interest or the Premises. Tenant shall cause any such lien or claim to be released, bonded around, or otherwise discharged within thirty (30) days after Tenant obtains actual knowledge thereof. Tenant shall indemnify, defend, and hold harmless Landlord and its elected officials, officers, employees, agents, attorneys, representatives, volunteers, successors, and assigns from and against all claims, liens, stop notices, liabilities, penalties, attorneys’fees, costs, and expenses arising out of or relating to any work performed by or for Tenant on the Premises.

5.08. CEQA; Governmental Approvals. Tenant acknowledges that this Lease, the Purchase Agreement, Tenant’ s use of the Premises, and any construction, alteration, repair, expansion, replacement, or other work on the Premises may be subject to review under the California Environmental Quality Act, Public Resources Code Section 21000 et seq. (“CEQA”), and other applicable laws. Nothing in this Lease commits Landlord to approve any future discretionary approval, permit, entitlement, improvement, use, or project before completion of any required CEQA review. Tenant shall not commence any work or use requiring CEQA review or other governmental approval unless and until all required approvals have been obtained and all applicable CEQA requirements have been satisfied. Tenant shall be solely responsible for all costs associated with CEQA review required for Tenant’ s proposed use or work on the Premises, except to the extent otherwise expressly agreed by Landlord in writing. Tenant shall indemnify, defend, and hold harmless Landlord from and against any claims, actions, proceedings, costs, or liabilities arising out of Tenant’ s failure to comply with CEQA or other applicable governmental approval requirements.

5.09. Prevailing Wage Compliance. Tenant acknowledges that this Lease, any construction, alteration, demolition, installation, repair, maintenance, or other work performed on or about the Premises may be subject to California prevailing wage requirements, including Labor Code Section 1720 et seq. and Section 1770 et seq., depending on the nature of the work and the source and structure of any public funds, assistance, subsidy, rent reduction, loan ATTACHMENT NO. 4
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forgiveness, or other public participation. Tenant shall be solely responsible for determining whether prevailing wage requirements apply to any work performed by or for Tenant on the Premises and, if applicable, for complying with all such requirements, including payment of prevailing wages, contractor and subcontractor registration, certified payroll records, apprenticeship requirements, notices, and all related compliance obligations. Tenant shall indemnify, defend, and hold harmless City from and against any claims, liabilities, penalties, assessments, back wage obligations, liquidated damages, attorneys’fees, costs, or enforcement proceedings arising out of or relating to Tenant’ s failure to comply with applicable prevailing wage requirements. Nothing in this Lease shall be deemed an admission that any particular work is or is not a “public work” or otherwise subject to prevailing wage requirements. Tenant’ s obligations under this Section shall survive the earlier termination or expiration of this Lease.

5.10. Landlord Review; No Responsibility. Landlord shall have no duty to review, inspect, supervise, approve, or accept any plans, specifications, work, labor, materials, construction methods, contractors, subcontractors, or other matters relating to Tenant’ s Improvements or work on the Premises. Any review, inspection, observation, approval, or consent by Landlord shall be solely for Landlord’ s own purposes, shall not be relied upon by Tenant or any third party, shall not constitute approval of the quality, safety, sufficiency, legality, or compliance of any work, and shall not reduce or limit Tenant’ s obligations under this Lease.

ARTICLE 6. TAXES AND ASSESSMENTS.

6.01. Personal Property Taxes. Tenant shall pay before delinquency all taxes, assessments, license fees and other charges that are levied and assessed against Tenant's personal property installed or located in or on the Premises which become payable during the term. On demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments.

6.02. Real Property Taxes. Tenant shall pay all real property taxes (including, if applicable, any possessory interest taxes and personal property taxes), general and special taxes and assessments (" Real Property Taxes ") levied and assessed against the Premises, the Improvements, and Tenant's alterations on the Premises. Tenant shall pay the Real Property Taxes not later than the taxing authority's delinquency date. To the extent applicable, Landlord will forward copies of any relevant tax notices received by Landlord to facilitate Tenant’ s compliance with this Section.

6.03. Tenant's Tax Liability Prorated. Tenant's liability to pay Real Property Taxes and new assessments shall be prorated on the basis of a 365-day year to account for any fractional portion of a fiscal tax year included in the Lease Term at its inception and expiration or earlier termination in accordance with this Lease.

6.04. Revenue & Taxation Code Section 107.6. Possessory Interest Tax. Tenant recognizes and understands that this Lease may create a possessory interest subject to property ATTACHMENT NO. 4
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taxes and that, in the event that a possessory interest is created, Tenant shall be responsible for payment of any taxes levied against such possessory interest.

ARTICLE 7. UTILITIES.

Tenant shall pay when due and shall hold Landlord harmless from any liability for all charges for water, gas, sewage, garbage collection, electricity, telephone and other utility service supplied to the Premises.

ARTICLE 8. INSURANCE AND INDEMNITY.

8.01. Indemnity.

A. Tenant’ s Indemnity. Subject to Section 8.08, Tenant shall protect, indemnify, defend, and hold harmless Landlord and its elected officials, officers, employees, agents, attorneys, representatives, volunteers, successors, and assigns from all demands, claims, actions, and damages to any person or property (including reasonable attorneys' fees) arising out of or connected with the use or occupancy of the Premises by Tenant, and Tenant’ s agents, employees, volunteers, and invitees, except to the extent (and then only to the extent) attributable to the gross negligence or willful misconduct of Landlord or Landlord's agents, officials, or employees.

B. Landlord’ s Indemnity. Subject to Section 8.08, Landlord shall indemnify, defend, and hold harmless Tenant and its officers, directors, employees, agents, and representatives from all demands, claims, actions, and damages to any person or property (including reasonable attorneys' fees) to the extent (and then only to the extent) arising out of the gross negligence or willful misconduct of Landlord or its agents, officials, or employees in connection with Landlord's ownership, reserved use of, entry upon, or activities on the Premises, except to the extent attributable to the negligence or willful misconduct of Tenant.

C. The obligations under this Section shall survive the earlier termination or expiration of this Lease.

8.02. Insurance.

A. General. Without limiting Tenant's indemnification of Landlord, Tenant shall provide and maintain at its own expense during the Lease Term the following programs of insurance covering its operations hereunder. Such insurance shall be provided by insurer(s) reasonably satisfactory to Landlord and evidence of such programs satisfactory to Landlord shall be delivered to Landlord on or before the Commencement Date of this Lease. Such evidence shall specifically identify this Lease and shall contain express conditions that Landlord is to be given written notice at least 30 days in advance of any material modification or termination of any program of insurance. Before commencing any construction, alteration, demolition, grading, paving, utility, drainage, building, or other improvement work on the Premises, Tenant shall also provide evidence satisfactory to Landlord that Tenant and its contractors maintain insurance appropriate for such work, including commercial general liability, automobile liability, workers’ compensation, builder’ s risk or installation coverage, and, if invasive, subsurface, hazardous materials, or environmental work is involved, pollution legal liability or contractor’ s pollution ATTACHMENT NO. 4
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liability coverage, in each case in amounts reasonably required by Landlord. All such policies shall name Landlord and its elected officials, officers, employees, agents, attorneys, representatives, volunteers, successors, and assigns as additional insureds where applicable and shall include primary and noncontributory coverage and waiver of subrogation endorsements where commercially available.
(1) Comprehensive General Liability Insurance endorsed for property- operations, products/completed operations and contractual liability, in the amount of at least $1,000,000 for any occurrence, $2,000,000 annual aggregate and $1,000,000 property damage. (2) Comprehensive Auto Liability Insurance endorsed for all owned and non-owned vehicles with a combined single limit of at least One Million Dollars ($1,000,000) per occurrence.
(3) Worker's Compensation Insurance in an amount and form to meet all applicable requirements of the Labor Code of the State of California and which specifically covers all persons providing services on behalf of Tenant under this Lease and all risks to such persons and employer's liability insurance with a limit of no less than $1,000,000 per employee and $1,000,000 per occurrence.

8.03. Review. The liability insurance requirements may be reviewed by Landlord and Tenant every five years for the purpose of mutually increasing (in consultation with their respective insurance advisors) the minimum limits of such insurance from time to time to limits which shall be reasonable and customary for similar facilities of like size and operation in accordance with generally accepted insurance industry standards. If the parties are unable to mutually agree upon such new limits within 30 days of a written demand by one party upon the other, the determination of an independent insurance advisor selected by the parties' insurance advisors shall be binding upon the parties.

8.04. Proof of Coverage. All policies required hereunder shall be with companies having a Best's A/VIII rating (and if Best's no longer exists, an equivalent rating). Executed copies of all policies of insurance or certificates thereof shall be delivered to Landlord. All insurance policies required by this Article 8 shall name Landlord as an additional insured. As often as any such policies shall expire or terminate, renewal or additional policies shall be procured and maintained in like manner and to like extent. All policies of insurance must contain a provision that the company writing such policy will give all parties 30 days advance written notice of any cancellation or lapse of the effective date or any reduction in the amounts of insurance.

Nothing in this Article 8 shall prevent Tenant from carrying insurance of the kind required of Tenant under a blanket insurance policy or policies which cover other properties owned or operated by Tenant. Tenant shall provide Landlord with certificates of insurance naming Landlord as an additional insured and setting forth the required coverage.

8.05. Environmental Indemnity.

A. Indemnity. Tenant agrees, from and after the Commencement Date, to defend, indemnify, protect and hold harmless Landlord and its officers, beneficiaries, public officials, volunteers, employees, agents, attorneys, representatives, legal successors and assigns ATTACHMENT NO. 4
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("Indemnitees") from, regarding and against any and all liabilities, obligations, orders, decrees, judgments, liens, demands, actions, Environmental Response Actions (as defined herein), claims, losses, damages, fines, penalties, expenses, Environmental Response Costs (as defined herein) or costs of any kind or nature whatsoever, together with fees (including, without limitation, reasonable attorneys' fees and experts' and consultants' fees), resulting from or in connection with the actual or claimed generation, storage, handling, transportation, use, presence, placement, migration and/or release of Hazardous Materials (as defined herein), at, on, in, beneath or from the Premises arising from or relating to: (i) Tenant’ s ownership, use, occupancy, operation, maintenance, or control of the Premises before the Commencement Date (but solely to the extent actually caused by Tenant); (ii) Tenant’ s use, occupancy, operation, maintenance, or control of the Premises during the Term; (iii) any work performed by or for Tenant on the Premises; or (iv) any act or omission of Tenant or Tenant’ s employees, agents, contractors, subcontractors, consultants, licensees, invitees, or representatives (sometimes herein collectively referred to as "Contamination"), except to the extent: (a) Tenant proves by clear and convincing evidence that such condition or non-compliance predates Tenant’ s ownership of the Property; or (b) Tenant proves by clear and convincing evidence that a condition was solely caused by the Landlord or Landlord's agents, employees, or contractors during the term of the Lease. Tenant's defense, indemnification, protection and hold harmless obligations herein shall include, without limitation, the duty to respond to any governmental inquiry, investigation, claim or demand regarding the Contamination, at Tenant's sole cost. Tenant’ s obligations under this Section shall survive the earlier termination or expiration of this Lease.

B. Release and Waiver. Tenant hereby releases and waives all rights, causes of action and claims Tenant has or may have in the future against the Indemnitees arising out of or in connection with any Hazardous Materials (as defined herein), at, on, in, beneath or from the Premises, except to the extent caused by Landlord during the term of the Lease.

C. Definitions.
(1) As used in this Lease, the term " Environmental Response Actions" means any and all activities, data compilations, preparation of studies or reports, interaction with environmental regulatory agencies, obligations and undertakings associated with environmental investigations, removal activities, remediation activities or responses to inquiries and notice letters, as may be sought, initiated or required in connection with any local, state or federal governmental or private party claims, including any claims by Tenant. (2) As used in this Lease, the term " Environmental Response Costs" means any and all costs associated with Environmental Response Actions including, without limitation, any and all fines, penalties and damages.
(3) As used in this Lease, the term "Hazardous Materials" means any substance, material or waste which is (1) defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," or "restricted hazardous waste" under any provision of California law; (2) petroleum or petroleum products; (3) asbestos; (4) polychlorinated biphenyls; (5) radioactive materials; (6) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. section 1251 et seq. (33 U.S.C.§ 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317); (7) defined as a "hazardous substance" ATTACHMENT NO. 4
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pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. section 6901 et seq. (42 U.S.C. § 6903) or its implementing regulations; (8) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. section 9601 et seq. (42 U.S.C. § 9601); or (9) determined by California, federal or local governmental authority to be capable of posing a risk of injury to health, safety or property.

D. Materiality. Tenant acknowledges and agrees that the defense, indemnification, protection and hold harmless obligations of Tenant for the benefit of Landlord set forth in this Lease are a material element of the consideration to Landlord for the performance of its obligations under this Lease, and that Landlord would not have entered this Lease unless Tenant's obligations were as provided for herein.

8.06. Hazardous Materials Compliance; Notice. Tenant shall comply, and shall cause Tenant’ s employees, agents, contractors, subcontractors, consultants, licensees, invitees, and representatives to comply, with all Environmental Laws applicable to the Premises. Tenant shall not cause or permit any Hazardous Materials to be released, discharged, spilled, stored, treated, disposed of, or used on, under, or about the Premises except for ordinary and customary materials used in compliance with all Laws and in quantities reasonably necessary for Tenant’ s permitted use. Tenant shall promptly notify Landlord in writing of any known or suspected release, discharge, spill, regulatory notice, claim, investigation, or other environmental condition affecting the Premises and shall provide Landlord copies of all notices, reports, correspondence, and other materials received from or provided to any governmental authority or third party relating thereto.

8.07. Environmental Testing. Landlord shall have the right, but not the obligation, to enter the Premises upon reasonable notice, or without notice in an emergency or where required by a governmental authority, to conduct environmental inspections, testing, or sampling.

Landlord shall conduct such activities in a commercially reasonable manner so as not to unreasonably interfere with Tenant’ s operations. Tenant shall reimburse Landlord for the reasonable costs of such inspections, testing, or sampling to the extent such activities confirm the presence of Hazardous Materials released or caused by Tenant or from Tenant’ s use, occupancy, operations, work, or other obligations in violation of this Lease. Landlord shall bear the cost of all other inspections, testing, or sampling.

8.08. Waiver of Subrogation. Notwithstanding anything to the contrary in this Lease, Landlord and Tenant each hereby waive, and release the other (and the other's elected officials, officers, employees, agents, and representatives) from, any and all rights of recovery, claims, actions, or causes of action against the other for any loss or damage to persons or property to the extent such loss or damage is covered by, or required to be covered by, insurance carried or required to be carried under this Lease, regardless of the negligence of the released party. Each party shall cause each insurance policy it carries or is required to carry under this Lease to contain a waiver of subrogation endorsement consistent with this Section, and, to the extent a party self- ATTACHMENT NO. 4
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insures, such party shall be deemed to have waived subrogation to the same extent as if the applicable coverage were carried through a third-party insurer.

ARTICLE 9. CONDEMNATION.

9.01. Definitions.

A. " Condemnation" means (1) the exercise of any governmental power in eminent domain, whether by legal proceedings or otherwise, by a condemnor, and (2) a voluntary sale or transfer to any condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending.

B. " Date of taking" means the date the condemnor has the right to possession of the property being condemned.

C. " Award" means all compensation, sums or anything of value awarded, paid or received on a total or partial condemnation.

D. " Condemnor" means any public or quasi-public authority, or private corporation or individual, having the power of condemnation.

9.02. Parties' Rights and Obligations to be Governed by Lease. If during the Lease Term there is any taking of all or any part of the Premises, any improvements on the Premises or any interest in this Lease by condemnation, the rights and obligations of the parties shall be determined pursuant to the provisions of this Article 9.

9.03. Total Taking. If the Premises is totally taken by condemnation, this Lease shall terminate on the date of taking.

9.04. Effect of Partial Taking. If any portion of the Premises or the improvements thereon is taken by condemnation, this Lease shall remain in effect, except that Tenant may elect to terminate this Lease if the remaining portion of the Premises is rendered unsuitable (as defined herein) for Tenant's continued use. The remaining portion of the Premises shall be deemed unsuitable for Tenant's continued use if following a reasonable amount of reconstruction, Tenant's facility on the Premises could not be operated in a manner that is comparable to the manner of operation prior to the date of the taking. Tenant must exercise its right to terminate by giving Landlord written notice of its election within 90 days after the nature and extent of the taking have been finally determined. Such notice shall also specify the date of termination, which shall not be prior to the date of taking. Failure to properly exercise the election provided for in this paragraph will result in this Lease continuing in full force and effect.

9.05. Restoration of the Premises. If, in Tenant's reasonable judgment, it is reasonably possible and economically feasible to do so, Tenant shall be entitled to use so much of the award as is necessary to restore or to add on to the Premises so that the area and approximate layout of the Premises will be substantially the same after the date of taking as they were before the date of taking. In such a case the remainder of the award shall belong to Landlord. If it is not ATTACHMENT NO. 4
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reasonably possible to so restore the area and layout of the Premises, the remaining provisions of this Article 9 shall govern the rights of the parties.

9.06. Waiver of Code of Civil Procedure Section 1265.130. Each party waives the provisions of the Code of Civil Procedure section 1265.130 allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

9.07. Award. The award for the Premises and for the improvements shall belong to Landlord, except as hereinafter provided. Tenant shall be entitled to the value of its interest in any personal property and fixtures which it has the right to remove and to any portion of the award specified to apply to Tenant's goodwill, and to be compensated for interruption of or damage to Tenant's business, and compensation based upon the then fair market value of Tenant's interest in this Lease.

ARTICLE 10. TENANT DEFAULTS AND LANDLORD'S REMEDIES.

10.01. Defaults by Tenant. Any of the following occurrences shall constitute a default under this Lease:

A. Tenant fails to pay Rent or any other monetary sum required under this Lease when due, and such failure continues for five (5) business days after written notice from Landlord specifying the amount due; or
B. Tenant fails to keep or perform any other covenant or agreement contained in this Lease, including, without limitation, failure to comply with any CEQA, prevailing wage, or construction lien obligation under this Lease, and such failure continues for thirty (30) days after written notice from Landlord specifying the particulars of such failure; provided, however, that if the failure cannot reasonably be cured within such thirty (30)-day period, no default shall occur so long as Tenant commences the cure within such period and thereafter diligently pursues the cure to completion, provided no cure period shall extend past ninety (90) days without Landlord’ s approval; or
C. Tenant (i) makes a general assignment for the benefit of its creditors or file a petition for bankruptcy or other reorganization, liquidation, dissolution or similar relief; (ii) has a proceeding filed against it seeking any relief mentioned in (i) above which is not discharged within sixty (60) days thereafter; or (iii) has a trustee, receiver or liquidator appointed for Tenant or a substantial part of its property; or
D. Tenant assigns (whether or not such assignment is deemed to be effective) this Lease (or any rights therein or herein), or sells, transfers, conveys, assigns or leases the whole or any part of the Premises or any improvement constructed thereon in violation of this Lease.

10.02. Landlord's Remedies. In the event of any such default by Tenant, in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the ATTACHMENT NO. 4
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immediate option to terminate this Lease and all rights of Tenant hereunder. In the event that Landlord shall elect to so terminate this Lease, then Landlord may recover from Tenant:

A. The worth at the time of Award of any unpaid Rent which had been earned at the time of such termination; plus
B. The worth at the time of Award of the amount by which the unpaid Rent which would have been earned after termination until the time of Award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus C. The worth at the time of Award of the amount by which the unpaid Rent for the balance of the term after the time of Award exceeds the amount of such rental loss that the Tenant proves could be reasonably avoided.

As used in subparagraphs 10.02.A and B above, the "worth at the time of Award" is computed by allowing interest at 10% per annum. As used in subparagraph C above, the "worth at the time of Award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.

10.03. Continuation. In the event of any such default by Tenant, Landlord shall also have the remedy contained in Civil Code 1951.4 in which Landlord has the right to continue this Lease in full force and effect, and this Lease shall continue in effect as long as Landlord does not terminate Tenant's right to possession, and collect Rent when due. During the period Tenant is in default, Landlord can enter the Premises and relet them, or any part of them, to third parties for its own account or for the Tenant's account. Tenant hereby appoints Landlord its special attorney-in-fact for purposes of reletting for Tenant's account. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses of remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining term of this Lease. Tenant shall pay the Landlord the Rent due under this Lease on the dates the Rent is due, less the Rent Landlord receives from any reletting. No act by Landlord allowed by this Article shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease.

10.04. Entry. In the event of any such default by Tenant, Landlord shall also have the right, with or without terminating this Lease, to reenter the Premises and remove all persons and property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. No reentry or taking possession of the Premises by Landlord pursuant to this subsection shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction.

10.05. Rights Cumulative. All rights, options, and remedies of Landlord contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of ATTACHMENT NO. 4
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any rent or other payments due hereunder or any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in such waiver. The consent or approval of Landlord to or of any act by Tenant requiring Landlord's consent or approval shall not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent or similar acts by Tenant.

10.06. Landlord's Right to Cure Tenant's Default. Landlord, at any time after Tenant commits a default which Tenant has failed to cure beyond applicable notice and cure periods, may cure the default at Tenant's cost. In addition, if Landlord reasonably determines that immediate action is necessary to protect public health or safety, preserve the Premises, prevent interference with Landlord’ s reserved use rights, comply with Law, remove a lien, respond to an environmental condition, or prevent material damage or liability, Landlord may take such action without prior notice to Tenant. If Landlord at any time, by reason of Tenant's default, pays any sum, the sum paid by Landlord shall be due immediately from Tenant to Landlord at the time the sum is paid, and if paid at a later date, shall bear interest at the maximum rate permitted by law from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with interest on it, shall be additional rent. Tenant shall also reimburse Landlord for reasonable administrative, consultant, contractor, attorney, and staff costs incurred in connection with such cure.

ARTICLE 11. MISCELLANEOUS.

11.01. Holding Over. If Tenant shall hold over the Premises after the expiration of the term hereof with the consent of Landlord, either express or implied, such holding over shall be construed to be only a tenancy from month to month, subject to all the covenants, conditions and obligations contained in this Lease. Tenant hereby agrees to pay to Landlord as monthly rental an amount equal to one hundred fifty percent (150%) of the monthly Base Rent set forth in Section 3.01, without giving effect to any reduction, reset, waiver, or abatement of Base Rent under Section 3.02, Section 3.03, Section 3.04, or any other provision of this Lease, together with any other monetary sums which are Tenant's obligations to pay under this Lease.

11.02. Attorneys' Fees. In the event that any action or arbitration is brought by either party hereto as against the other party hereto for the enforcement or declaration of any right or remedies in or under this Lease or for the breach of any covenant or condition of this Lease, then and in that event the prevailing party shall be entitled to recover, and the other party agrees to pay, all fees and costs to be fixed by the court or arbitrator therein including, but not limited to, reasonable attorneys' fees.

11.03. Quiet Possession. Landlord agrees that Tenant, so long as Tenant is not in default after notice and time to cure under this Lease and is paying the rent and performing the covenants and conditions of this Lease, shall quietly have, hold and enjoy the Premises throughout the term hereof.

11.04. Force Majeure. Except as to the payment of rent, neither of the parties hereto shall be chargeable with, liable for, or responsible to, the other for anything or in any amount for any delay caused by fire, earthquake, explosion, flood, hurricane, the elements, acts of God or the public enemy, action, inaction or interference of governmental authorities or ATTACHMENT NO. 4
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agents, including a City referendum or initiative, war, invasion, insurrection, rebellion, riots, strikes or lockouts or any other cause whether similar or dissimilar to the foregoing which is beyond the reasonable control of such parties and any delay due to said causes or any of them shall not be deemed a breach of or default in the performance of this Lease.

11.05. Notices.

A. " Notice" means any notice, demand, request or other communication or document to be provided under this Lease to a party to this Lease.

B. The Notice shall be in writing and shall be given to the party at its address or telecopy number set forth below or such other address as the party may later specify for that purpose by Notice to the other party. Each Notice shall, for all purposes, be deemed given and received:
(1) If hand-delivered to a party against receipted copy, when the copy of Notice is receipted;
(2) If given by a nationally-recognized and reputable overnight delivery service, the day on which the Notice is actually received by the party; or (3) If given by certified mail, return receipt requested, postage prepaid, two business days after it is deposited with the United States Postal Service. Notices or other documents sent by personal delivery shall be deemed received on the date of such delivery.

To Landlord: City of Fontana
Attn: City Manager
8353 Sierra Ave.

Fontana, CA 92335
Email: [email protected]
With a copy to: Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Email: [email protected]
To Tenant: Water of Life Community Church
14418 Miller Avenue, Suite K
Fontana CA 92336
Attention: Mark Nuaimi
Email: [email protected]
With a copy (not constituting notice) to:

Joshua M. Jacobs
ATTACHMENT NO. 4
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Attn: Joshua M. Jacobs
401 B Street Suite 1200
San Diego, CA 92101
Email: [email protected]
C. The provisions above governing the date on which a Notice is deemed to have been received by a party to this Lease shall mean and refer to the date on which a party to this Lease, and not its counsel or other recipient to which a copy of the Notice may be sent, is deemed to have received the Notice.

D. If Notice is tendered under the provisions of this Lease and is refused by the intended recipient of the Notice, the Notice shall nonetheless be considered to have been given and shall be effective as of the date provided in this Lease. The contrary notwithstanding, any Notice given to either party in a manner other than that provided in this Lease, that is actually received by the noticed party, shall be effective with respect to such party on receipt of the Notice.

E. Either party hereto may from time to time by written notice to the other party designate a different address which shall be substituted for the one above specified. Notices shall be effective when received.

11.06. Waiver. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this Lease shall be construed to be a waiver of any succeeding breach of the same or other terms, covenants, agreements, restrictions and conditions hereof.

11.07. Surrender. Upon the expiration or sooner termination of the term of this Lease, and notwithstanding anything herein contained to the contrary, Tenant shall surrender the Premises to Landlord, together with the improvements then situated thereon, unless specifically exempted by this Lease, in good condition and repair, except for reasonable wear and tear.

Tenant shall remove all personal property, trade fixtures, debris, trash, and Hazardous Materials introduced or permitted by Tenant, and shall repair any damage caused by such removal.

Tenant’ s surrender obligations shall survive expiration or earlier termination of this Lease.

11.08. Binding. Subject to the restrictions set forth herein regarding assignment of the leasehold estate, each of the terms, covenants and conditions of this Lease shall extend to and be binding on and shall inure to the benefit of not only Landlord and Tenant, but to each of their respective heirs, administrators, executors, successors and assigns. Whenever in this Lease reference is made to either Landlord or Tenant, the reference shall be deemed to include, wherever applicable, the heirs, administrators, executors, successors and assigns of such parties, the same as if in every case expressed.

11.09. Landlord's Right to Enter the Premises. Landlord and its authorized representatives shall have the right to enter the Premises at all reasonable times, after giving Tenant reasonable prior written notice, for any of the following purposes: to determine whether the Premises is in good condition and whether Tenant is complying with its obligations under this Lease; to do any necessary maintenance and to make any restoration to the Premises that Landlord has the right or obligation to perform; to serve, post or keep posted any notices required ATTACHMENT NO. 4
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or allowed under the provisions of this Lease; to post "for rent" or "for lease" signs during the last 6 months of the Lease term, or during any period while Tenant is in default; to show the Premises to prospective brokers, agents, buyers, tenants or persons interested in an exchange, at any time during the term; and to do any act or thing necessary for the safety or preservation of the Premises if any excavation or other construction is undertaken or is about to be undertaken on any adjacent property or nearby street. Landlord shall not be liable in any manner for any inconvenience, disturbance, loss of business, nuisance or other damage arising out of Landlord's entry on the Premises as provided in this Section other than those caused by Landlord's gross negligence or willful misconduct. Tenant shall not be entitled to an abatement or reduction of rent if Landlord exercises any rights reserved in this Section. No prior notice shall be required in an emergency, where entry is required by Law or governmental authority, where necessary to protect public health or safety, where necessary to prevent damage to the Premises, or where necessary to exercise Landlord’ s reserved use rights under Section 4.01.B.

11.10. Disclaimer of Partnership. The relationship of the parties hereto is that of Landlord and Tenant, and it is expressly understood and agreed that Landlord does not in any way nor for any purpose become a partner of Tenant or a joint venturer with Tenant in the conduct of Tenant's business or otherwise.

11.11. Memorandum. A Memorandum of this Lease may be recorded in the Official Records of San Bernardino County. Any amendment or modification thereof may, at the request of either party, also be recorded in the Official Records of San Bernardino County, California. A form of the Memorandum may be attached to this Lease or prepared by the parties in form reasonably acceptable to Landlord and Tenant.

11.12. Quitclaim. At the expiration or earlier termination of this Lease, Tenant shall execute, acknowledge and deliver to Landlord within 30 days after written demand from Landlord to Tenant, any quitclaim deed or other document required by any reputable title company to remove the cloud of this Lease from the real property subject to this Lease.

11.13. Interpretation. The titles to the paragraphs of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease.

11.14. Covenants and Conditions. Each term and each provision, including, without limitation, the obligation for the payment of rent, to be performed by Tenant or Landlord, as the case may be, shall be construed to be both a covenant and a condition of this Lease.

11.15. Integration. This Lease and the exhibits and documents incorporated by reference, constitutes the entire agreement between the parties and there are no conditions, representations or agreements regarding the matters covered by this Lease which are not expressed herein. This Lease is entered into in connection with the Purchase Agreement and shall not modify, waive, supersede, or limit either party’ s rights or obligations under the Purchase Agreement unless expressly stated herein. In the event of a conflict between this Lease and the Purchase Agreement regarding the conveyance of Lot C or Lot D, the closing under the Purchase Agreement, title matters, closing deliveries, prorations, or satisfaction of the Note, the Purchase Agreement shall control. In the event of a conflict regarding Tenant’ s leasehold use, occupancy, ATTACHMENT NO. 4
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maintenance, insurance, indemnity, surrender, construction, improvements, or other post- Commencement Date obligations with respect to the Premises, this Lease shall control.

11.16. Estoppel Certificate. Tenant agrees to deliver, within 15 days after written request therefor by Landlord an estoppel certificate in a form reasonably requested by Landlord certifying that this Lease is unmodified and is in full force and effect (if such be the case), certifying the commencement and termination dates of the Lease Term, certifying that there has been no assignment or sublease of this Lease and that there are no defenses or offsets hereto (or stating those claimed by Tenant) and containing such other information as may reasonably be requested by the party to whom such certificate is addressed. Failure to deliver the estoppel certificate within 15 days shall be a default of the Lease, and shall be conclusive that this Lease is in full force and effect and that Tenant has no defenses or offsets against Landlord.

11.17. Landlord's Right to Sell. Landlord shall have the right to sell its fee estate in the Premises and assign its interest in this Lease without limitation; provided, however, that any such sale shall be subject to this Lease. Upon any such conveyance, Landlord shall automatically be relieved of any obligations under this Lease first accruing after the date of such conveyance. Landlord shall also have the right to mortgage, hypothecate or otherwise pledge its interest in the Premises and this Lease, subject to Tenant's rights under this Lease.

11.18. Assignment; Sublease; Encumbrances. Tenant shall not assign this Lease, sublease all or any portion of the Premises, mortgage, pledge, hypothecate, encumber, or otherwise transfer any interest in this Lease or the Premises without Landlord’ s prior written consent, which shall not be unreasonably withheld. Any assignment, sublease, encumbrance, or transfer without Landlord’ s required consent shall be voidable at Landlord’ s election and shall constitute a default under this Lease. Notwithstanding the foregoing, Landlord shall consent to an assignment to an entity affiliated with Tenant, provided that: (a) the Permitted Use is not changed; (b) no Tenant default exists; (c) the assignee assumes all Tenant obligations in writing; and (d) Tenant remains jointly and severally liable for all Tenant obligations unless expressly released by Landlord in writing. No assignment, sublease, or transfer shall release Tenant from obligations accruing before the effective date of such transfer or from any other obligation that survives termination.

11.19. Proprietary and Governmental Roles. Except where clearly and expressly provided otherwise, Landlord enters into this Lease solely in its proprietary capacity as owner and landlord of the Premises. Nothing in this Lease shall waive, restrict, limit, modify, or supersede Landlord’ s governmental or regulatory authority over the Premises, Tenant, Tenant’ s use, or any proposed improvements, including Landlord’ s authority to adopt laws, impose conditions, conduct inspections, review and issue permits, enforce codes, conduct CEQA review, approve or deny discretionary approvals, and perform all legislative, administrative, and enforcement functions under federal, state, and local law.

11.20. Non-Liability of City Officials. No elected official, appointed official, officer, employee, agent, attorney, representative, consultant, or volunteer of Landlord shall be personally liable to Tenant, any successor, assignee, subtenant, contractor, lender, invitee, or ATTACHMENT NO. 4
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other person claiming by or through Tenant for any default, breach, obligation, claim, or liability arising under or relating to this Lease.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, we have executed this instrument as of the Effective Date.

LANDLORD:

CITY OF FONTANA
By:

City Manager
ATTEST:

City Clerk
APPROVED AS TO FORM:
_________________________________
City Attorney
TENANT:

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
By:

Its: Secretary/Treasurer
By:

Its:

ATTACHMENT NO. 4
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Exhibit A to
Ground Lease

EXHIBIT A

LEGAL DESCRIPTION OF PREMISES
[To be inserted.]
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Exhibit B to
Ground Lease

EXHIBIT B

MAP OF PREMISES
[To be inserted.]
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Exhibit C to
Ground Lease

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attn: City Manager
APN: 1100-091-71-0000
Exempt from recording fee pursuant to
Government Code Section 27383.

No documentary transfer tax is due.

This instrument is not a conveyance.

SPACE ABOVE THIS LINE FOR RECORDER'S USE

MEMORANDUM OF GROUND LEASE
This Memorandum of Ground Lease (" Memorandum") is made as of ____________, 2026, by and between the CITY OF FONTANA, a California municipal corporation (" Landlord"), and WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation ("Tenant"), with reference to the following facts:

A. Landlord and Tenant have entered into that certain Ground Lease dated as of ____________, 2026 (the " Lease"), pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord, certain real property commonly known as Lot C, APN 1100-091-71-0000, located in the City of Fontana, County of San Bernardino, State of California, as more particularly described in Exhibit A attached hereto (the "Premises").

B. The Lease was entered into in connection with that certain Purchase and Sale Agreement and Joint Escrow Instructions dated ____________, 2026, by and between Landlord, as buyer, and Tenant, as seller, relating to Landlord's acquisition of Lot C and Lot D from Tenant (the "Purchase Agreement").

C. The parties desire to record this Memorandum to give notice of the Lease and certain terms thereof.

NOW, THEREFORE, Landlord and Tenant give notice as follows:

1. Lease. Landlord has leased the Premises to Tenant, and Tenant has leased the Premises from Landlord, pursuant to the terms and conditions of the Lease.

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Page ii

2. Term. The initial term of the Lease is fifty-five (55) years commencing on the Commencement Date defined in the Lease, unless terminated earlier in accordance with the Lease.

3. Permitted Use. Tenant may use the Premises only for parking and related church, ministry, and ancillary uses, including parking and access uses ancillary to CityLink Social Services operated at the CityLink Campus, and for no other purpose except as expressly permitted under the Lease.

4. CityLink Services Rent Reduction Condition. The Lease provides that, so long as CityLink Social Services are continuously operated at the CityLink Campus and Tenant is not in default beyond any applicable notice and cure period under the Public Benefit Use Covenant, Base Rent under the Lease shall be reduced to One Dollar ($1.00) per year. " CityLink Social Services" means the operation of homeless support, case management, food, clothing, resource navigation, or similar services for homeless, disadvantaged, and other vulnerable populations within the City of Fontana, substantially consistent with the services operated at the CityLink Campus as of the Commencement Date. This provision is a rent-reduction condition under the Lease and does not constitute a separate public benefit use covenant encumbering the Premises.

5. Public Benefit Use Covenant. In connection with the Purchase Agreement and related transaction documents, Tenant is required to execute and record a separate Public Benefit Use Covenant against the CityLink Campus or such portion thereof as described in that covenant.

The Public Benefit Use Covenant is separate from this Memorandum and is not intended to encumber the Premises except to the extent expressly stated in such covenant.

6. Landlord Reserved Rights. Landlord reserves the right to access and use the Premises for public agency training operations and related governmental purposes, subject to the terms of the Lease.

7. Improvements. Tenant's right to construct, install, alter, expand, or replace improvements on the Premises is subject to Landlord's prior written approval and the other terms and conditions of the Lease.

8. Assignment and Transfer Restrictions. Tenant's rights under the Lease are subject to the assignment, sublease, encumbrance, and transfer restrictions set forth in the Lease.

9. Lease Controls. This Memorandum is only a summary of certain provisions of the Lease and is not intended to amend, modify, or supersede the Lease. In the event of any conflict between this Memorandum and the Lease, the Lease shall control.

10. Counterparts. This Memorandum may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. [SIGNATURES ON FOLLOWING PAGE]
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Page iii
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date first written above.

LANDLORD:

CITY OF FONTANA,
a California municipal corporation
By: ______________________________
Name: ____________________________
Title: City Manager
ATTEST:

By: ______________________________
City Clerk
APPROVED AS TO FORM:

By: ______________________________
City Attorney
TENANT:

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
APPROVED AS TO FORM:

By: ______________________________
A notary acknowledgment must be attached for each party executing this instrument.

ATTACHMENT NO. 4
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EXHIBIT A

LEGAL DESCRIPTION OF PREMISES
[Insert legal description of Lot C / APN 1100-091-71-0000.] ATTACHMENT NO. 4
571
Exhibit D to
Ground Lease

EXHIBI TD

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attn: City Manager
APN: 0232-201-12-000
Exempt from recording fee pursuant to
Government Code Section 27383.

No documentary transfer tax is due.

This instrument is not a conveyance.

SPACE ABOVE THIS LINE FOR RECORDER'S USE

PUBLIC BENEFIT USE COVENANT
This Public Benefit Use Covenant ("Covenant") is made as of ____________, 2026, by WATER OF LIFE COMMUNITY CHURCH, a California nonprofit religious corporation (" Owner"), for the benefit of the CITY OF FONTANA, a California municipal corporation (" City"), with reference to the following facts:

A. Owner is the owner of certain real property located at 16029 Arrow Boulevard, Fontana, California, consisting of APN 0232-201-12-000 (" Parcel 1") as more particularly described in Exhibit A attached hereto. Owner also owns the adjacent parcel, APN 0232-201-13-0000 ("Parcel 2"), which is defined herein for reference only and, as set forth in Section 1, is not burdened by this Covenant.

B. Owner and City are parties to, or intend to enter into, that certain Purchase and Sale Agreement and Joint Escrow Instructions dated ____________, 2026 (the " Purchase Agreement"), pursuant to which City will acquire certain property commonly known as Lot C and Lot D from Owner and the parties will enter into related transaction documents, including this Covenant and Ground Lease dated , 2026. Owner intends to develop a residential and mixed use project on a portion of Parcel 2 (the "Permanent Housing Project").

C. The Purchase Agreement and the related transactions are intended, among other purposes, to support the continued operation of services for homeless, disadvantaged, and other vulnerable populations within the City.

D. As a material inducement to City to enter into and close the transactions contemplated by the Purchase Agreement, Owner has agreed to record this Covenant against the Covenant Property.

NOW, THEREFORE, Owner declares and covenants as follows:

ATTACHMENT NO. 4
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1. Covenant Property. This Covenant shall burden only the real property described in Exhibit A, being Parcel 1 (APN 0232-201-12-000), on which an existing CityLink facility is located (the "Covenant Property"). In no event shall this Covenant burden, encumber, or attach to Parcel 2, the Permanent Housing Project, or any parcel created or reconfigured to contain the Permanent Housing Project (the “Phase 2 Parcel”). If a lot line adjustment, parcel map, merger, subdivision, reconfiguration, or similar action modifies the boundaries of Parcel 1 (a “Lot Line Adjustment”), this Covenant shall continue to burden only Parcel 1 as so reconfigured and shall not extend to the Phase 2 Parcel. Notwithstanding anything in this Covenant to the contrary, Owner's right to pursue, process, and record a Lot Line Adjustment shall not be limited, and the City's consent shall not be required in connection therewith. Following recordation of a Lot Line Adjustment, Owner and City shall execute and record any confirmatory or corrective instrument reasonably necessary to conform the description of the Covenant Property to Parcel 1 as so reconfigured and to confirm that this Covenant does not encumber the Phase 2 Parcel.

2. CityLink Social Services. For purposes of this Covenant, " CityLink Social Services" means the operation of homeless support, case management, food, clothing, resource navigation, or similar services for homeless, disadvantaged, and other vulnerable populations within the City, substantially consistent with the services operated on Covenant Property as of the date this Covenant is recorded, as such services may be reasonably modified from time to time to address community needs and applicable legal requirements.

3. Public Benefit Use Covenant. Owner covenants that, during the Covenant Term, the Covenant Property shall be used and operated in service to homeless, disadvantaged, and other vulnerable populations within the City through the operation of CityLink Social Services. Owner may perform such services directly, through an affiliate, or through qualified service providers, but Owner shall remain responsible for compliance with this Covenant.

4. Covenant Term. The term of this Covenant (the " Covenant Term ") shall commence on the date this Covenant is recorded in the Official Records of San Bernardino County and shall continue for fifteen (15) years, unless earlier released by City by recorded instrument.

5. Reports and Records. Upon City's written request, but not more than once per calendar year unless Owner is then in default, Owner shall provide City a written certification describing Owner's compliance with this Covenant and the CityLink Social Services then being operated at the Covenant Property. Owner shall maintain records reasonably sufficient to demonstrate compliance with this Covenant and shall make such records available to City upon reasonable written request, subject to applicable privacy laws and confidentiality restrictions.

6. Transfer Restrictions. Owner shall not sell, assign, transfer, convey, lease, encumber, or otherwise dispose of the Covenant Property or any material interest therein without City's prior written consent, such consent not to be unreasonably withheld, conditioned, or delayed, except for any related lender-approved documentation. In determining whether to consent, City may consider the proposed transferee’ s financial capacity, operational capacity, experience providing comparable services, willingness to assume this Covenant, and ability to continue CityLink Social Services. Any permitted transferee shall assume this Covenant in writing for the benefit of City, and no transfer shall release Owner from obligations accruing before the effective date of such transfer unless City expressly agrees otherwise in writing.

ATTACHMENT NO. 4
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Page iii

7. Default. Subject to the notice and cure periods set forth in Section 8, a default shall occur if: (a) Owner fails to operate CityLink Social Services in material accordance with this Covenant; (b) Owner transfers or encumbers the Covenant Property in violation of this Covenant; (c) Owner becomes insolvent, makes an assignment for the benefit of creditors, or becomes subject to a bankruptcy, receivership, or similar proceeding that materially impairs performance under this Covenant; or (d) any other material breach of this Covenant occurs and remains uncured beyond the applicable cure period.

8. Notice and Cure. Before a default shall be deemed to have occurred, and before exercising any remedies in connection therewith, City shall give Owner written notice describing the alleged default. Owner shall have thirty (30) days after receipt of the written notice to cure the default; provided that if the default cannot reasonably be cured within thirty (30) days, Owner shall not be in default so long as Owner commences cure within that period and diligently prosecutes the cure to completion, not to exceed ninety (90) days without City's written consent, not to be unreasonably withheld. No notice or cure period shall be required for an unauthorized transfer or encumbrance in violation of Section 6.

9. City Remedies. Upon a default beyond applicable notice and cure periods, City may pursue all rights and remedies available at law or in equity, including specific performance, injunctive relief, declaratory relief, and recovery of enforcement costs as provided in Section 14.

For the avoidance of doubt, the remedies under this Covenant are independent of, and shall not enlarge, condition, or trigger, any separate rights or remedies, nor limit, waive, condition, or impair the City may have under the Purchase Agreement or other transaction documents, each of which shall be governed solely by its own terms. City's rights and remedies are cumulative, and the exercise of one remedy shall not preclude the exercise of any other remedy.

10. Separate Covenant; No Merger. This Covenant is separate from and in addition to the Purchase Agreement, the Lot C Ground Lease, and any other related transaction documents.

Nothing in this Covenant shall modify, limit, waive, or supersede either the City or Owner’ s rights under any other transaction document, except to the extent expressly stated in a recorded amendment signed by City and Owner.

11. Financing Coordination. City acknowledges that the Covenant Property may be subject to financing for the Permanent Housing Project or related improvements. This Covenant shall be subject to any subordination, recognition, lender consent, cure, or enforcement procedures expressly approved by City, or in any lender-approved documentation signed by City.

12. Covenants Running With the Land. This Covenant shall run with the land and shall bind Owner and all successors and assigns having any right, title, or interest in the Covenant Property during the Covenant Term. This Covenant is for the benefit of City and may be enforced by City and its successors and assigns.

13. Amendment; Release. This Covenant may be amended, modified, subordinated, or released only by a written instrument executed by City and Owner, or their respective successors or assigns, and recorded in the Official Records of San Bernardino County. Upon the expiration of the Covenant Term, or upon Owner's earlier satisfaction of the conditions for release set forth ATTACHMENT NO. 4
574
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Page iv
herein, this Covenant shall automatically terminate and be of no further force or effect. Within thirty (30) days after written request by Owner, City shall execute, acknowledge, and deliver, at no cost to City, to Owner a recordable release and quitclaim of this Covenant in form reasonably acceptable to Owner and any applicable title company. If City fails to deliver such release within such period, Owner may record a copy of this Covenant together with evidence of the expiration of the Covenant Term, which shall conclusively evidence the termination of this Covenant of record.

14. Attorneys' Fees. If any action or proceeding is brought to enforce or interpret this Covenant, the prevailing party shall be entitled to recover its reasonable attorneys' fees, expert fees, costs, and expenses, including fees and costs incurred on appeal and in post-judgment proceedings.

15. Notices. Any notice under this Covenant shall be given by personal delivery, nationally recognized overnight courier, or certified mail, return receipt requested, to the addresses set forth below or such other address as a party may designate by written notice.

OWNER: Water of Life Community Church
7625 East Avenue
Fontana, CA. 92336-2901
Attention: Mark Nuaimi
Email: [email protected]
With a copy to: Joshua M. Jacobs
Attn: Joshua M. Jacobs
401 B Street Suite 1200
San Diego, CA 92101
Email: [email protected]
CITY: City of Fontana
Attn: City Manager
8353 Sierra Ave.

Fontana, CA 92335
Email: [email protected]
With a copy to: Best Best & Krieger LLP
Attn: Ruben Duran
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Email: [email protected]

16. Severability. If any provision of this Covenant is held invalid or unenforceable, the remaining provisions shall remain in full force and effect to the fullest extent permitted by law.

17. Governing Law. This Covenant shall be governed by and construed in accordance with the laws of the State of California.

ATTACHMENT NO. 4
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18. Counterparts. This Covenant may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. [SIGNATURES ON FOLLOWING PAGE]
ATTACHMENT NO. 4
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IN WITNESS WHEREOF, Owner has executed this Covenant as of the date first written above.

OWNER:

WATER OF LIFE COMMUNITY CHURCH,
a California nonprofit religious corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
CITY ACCEPTANCE:

City accepts this Covenant for purposes of enforcement and recordation.

CITY:

CITY OF FONTANA,
a California municipal corporation
By: ______________________________
Name: ____________________________
Title: City Manager
ATTEST:

By: ______________________________
City Clerk
APPROVED AS TO FORM:

By: ______________________________
City Attorney
A notary acknowledgment must be attached for each party executing this instrument.

ATTACHMENT NO. 4
577
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Page vii

EXHIBIT A

LEGAL DESCRIPTION OF COVENANT PROPERTY

THELAND REFERRED TO HEREIN BELOW I S SITUATED IN THECI TY OF

FONTANA,COUNTY OFSAN BERNARDINO,STATEOFCALI FORNIA ANDI S DESCRI BEDASFOLLOWS:

Par cel1:

The Wes t1/2ofLot193accor di ng t oMapofEt i wanda Vi neyar ds , i nt he Ci t yofFont ana, Count yofSanBer nar di no, St at e ofCali for ni a, asperMapr ecor ded i nBook17, Page 29 ofMaps , i nt he offi ce oft he Count yr ecor ded ofs ai d Count y.

ATTACHMENT NO. 4
578
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1229 Agenda Date: 9/8/2026
Agenda #: Y. Category: Consent Calendar
FROM:

City Clerk
SUBJECT:

Designation of Voting Delegate for the League of California Cities Annual Conference, September 23- 25, 2026, Anaheim, California
RECOMMENDATION:

Appoint Mayor Warren as the voting delegate for the League of California Cities Annual Conference, in Anaheim, California, on September 23-25, 2026, and authorize the designated voting delegate to vote in support of Resolution No. 1.

COUNCIL GOALS:
· To create a team by working together to provide stability and consistent policy direction. · To create a team by communications Goals and Objectives to all sectors of the community.

DISCUSSION:

The League of California Cities Annual Conference is scheduled for September 23-25, 2026, in Anaheim, California. An important component of the Annual Conference is the Annual Business Meeting, where League membership considers and takes action on resolutions that establish League policy. In order to vote at the Annual Business Meeting, each City Council must designate a voting delegate. Each City may also appoint up to two alternate voting delegates; however, only Mayor Warren will be attending the Annual Conference on behalf of the City, and therefore no alternate voting delegate will be designated.

The 2026 League of California Cities Resolution Packet includes one proposed resolution, submitted by the City of Murrieta. The resolution calls for the League to establish a statewide working group to evaluate a state constitutional amendment or other legislative, policy, or ballot-based strategies to restore and strengthen local authority over housing and land use decisions. The proposed resolution recognizes the State’srole in establishing broad statewide housing goals while seeking to preserve meaningful local authority over general plans, zoning, density, development standards, project siting, and housing development decisions.

The City of Fontana supports the proposed resolution because local governments are best positioned to consider the unique infrastructure, public safety, fiscal, environmental, and community needs of their jurisdictions when making housing and land use decisions. The resolution also supports a balanced approach that maintains the State’s ability to establish statewide housing and safety standards while preserving local discretion in implementing those goals.

Staff recommends that the City Council appoint Mayor Warren as the voting delegate to represent the City at the League of California Cities Annual Business Meeting and authorize the designated voting City of Fontana Printed on 9/2/2026Page 1 of 2
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579
File #: 26-1229 Agenda Date: 9/8/2026
Agenda #: Y. Category: Consent Calendar
delegate to vote in support of Resolution No. 1.

FISCAL IMPACT:

None.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 9/2/2026Page 2 of 2
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580
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: Wednesday, May 13, 2026
T
O: Mayors, Council Members, City Clerks, and City Managers RE
: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
League of California Cities Annual Conference and Expo, Sept. 23-25, 2026 Anaheim Convention Center
E
very year, the League of California Cities convenes a member-driven General Assembly at the Cal Cities Annual Conference and Expo. The General Assembly is an important opportunity where city officials can directly participate in the development of Cal Cities policy.

Ta
king place on Friday, Sept. 25, 2026 the General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. Your appointed voting delegate plays an important role during the General Assembly by representing your city and voting on resolutions.

To c
ast a vote during the General Assembly, your city must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity. Voting delegates may either be an elected or appointed official.

A
ction by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone.

F
ollowing council action, please submit your city’s delegates through the online submission portal by Tuesday, Sept. 1, 2026. When completing the Voting Delegate submission form, you will be asked to attest that council action was taken. You will need to be signed in to your My Cal Cities account when submitting the form.

S
ubmitting your voting delegate form by the deadline will allow us time to establish voting delegate/alternate records prior to the conference and provide pre-conference communications with voting delegates.

C
onference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration opens June 2.

F
or a city to cast a vote, one voter must be present at the General Assembly and in possession of the voting delegate card and voting tool. Voting delegates and Council Action Advised by September 1, 2026
581
alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the voting delegate desk. This will enable them to receive the special sticker on their name badges that will admit the voting delegate into the voting area during the General Assembly.

Please view Cal Cities’ event and meeting policy in advance of the conference.

Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the General Assembly, they may not transfer the voting card to another city official.

Seating Protocol during General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.

The voting delegate desk, located in the conference registration area of the Anaheim Convention Center, will be open at the following times: Wednesday, Sept. 23, 8:00 a.m.-6:00 p.m. and Thursday, Sept. 24, 7:30 a.m.-4:00 p.m. On Friday, Sept. 25, the voting delegate desk will be open at the General Assembly, starting at 7:30 a.m., but will be closed during roll calls and voting.

The voting procedures that will be used at the conference are attached to this memo.

Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city’s voting delegate and alternates.

Once again, thank you for submitting your voting delegate and alternates by Tuesday, Sept. 1. If you have questions, please contact Zach Seals at [email protected].

Attachments:
• G
eneral Assembly Voting Guidelines
• Information Sheet: Cal Cities Resolutions and the General Assembly 582

1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org

General Assembly Voting Guidelines

1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.

2. Designating a City Voting Representative. Prior to the Cal Cities Annual Conference and Expo, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the voting delegate form provided to the Cal Cities Credentials Committee.

3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the voting delegate desk in the conference registration area. Voting delegates and alternates must sign in at the voting delegate desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the General Assembly.

4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the credentials committee at the voting delegate desk, may sign petitions to initiate a resolution.

5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and voting tool; and be registered with the credentials committee. The voting card may be transferred freely between the voting delegate and alternates but may not be transferred to another city official who is neither a voting delegate nor alternate.

6. Voting Area at General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.

7. Resolving Disputes. In case of dispute, the credentials committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the General Assembly.

583
Sixty days before the
Annual Conference
and Expo, Cal Cities
members may submit
policy proposals on
issues of importance
to cities. The resolution must
have the concurrence of at least
five additional member cities or
individual members.

How it works: Cal Cities
Resolutions and the General Assembly
General Assembly
General Resolutions Policy Committees
Developing League of California Cities policy is a dynamic process that engages a wide range of members to ensure Cal Cities represents cities with one voice. These policies directly guide Cal Cities’ advocacy to promote local decision-making, and lobby against statewide policies that erode local control.

The resolutions process and General Assembly is one way that city officials can directly participate in the development of Cal Cities policy. If a resolution is approved at the General Assembly, it becomes official Cal Cities policy. Here’s how resolutions and the General Assembly work.

The petitioned
resolution is an
alternate method
to introduce policy
proposals during
the annual conference. The
petition must be signed by
voting delegates from 10% of
member cities, and submitted to
the Cal Cities President at least
24 hours before the beginning
of the General Assembly.

Petitioned Resolutions
The Cal Cities
President assigns
general resolutions
to policy committees
where members
review, debate, and recommend
positions for each policy proposal.

Recommendations are forwarded
to the Resolutions Committee.

Who’s who
The Resolutions Committee
includes representatives
from each Cal Cities
diversity caucus, regional
division, municipal
department, and policy
committee, as well as
individuals appointed by
the Cal Cities president.

Voting delegates
are appointed by each
member city; every city
has one voting delegate.

The General Assembly is a
meeting of the collective
body of all voting
delegates —one from
every member city.

Seven policy committees
meet throughout the year
to review and recommend
positions to take on bills
and regulatory proposals.

Policy committees include
members from each Cal
Cities diversity caucus,
regional division, and
municipal department,
as well as individuals
appointed by the Cal
Cities president.

During the General Assembly, voting delegates
debate and consider general and petitioned
resolutions forwarded by the Resolutions
Committee. Potential Cal Cities bylaws
amendments are also considered at this meeting.

Cal Cities policy
development is a member-
informed process,
grounded in the voices and
experiences of city officials
throughout the state.

For more information visit www.calcities.org/general-assembly Prior to the Annual Conference and Expo
Resolutions Committee
The Resolutions
Committee considers
all resolutions. General
Resolutions approved1 by
either a policy committee
or the Resolutions Committee are next
considered by the General Assembly.

General resolutions not approved, or
referred for further study by both a
policy committee and the Resolutions
Committee do not go to the General
Assembly. All Petitioned Resolutions
are considered by the General
Assembly, unless disqualified.2
During the Annual Conference and Expo
1 The Resolution Committee can amend a general resolution prior to sending it to the General Assembly. 2 Petitioned Resolutions may be disqualified by the Resolutions Committee according to Cal Cities Bylaws Article VI. Sec. 5(f). 584
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1238 Agenda Date: 9/8/2026
Agenda #: A. Category: Public Hearing
FROM:

Finance
SUBJECT:

Quarterly Lien Action for Delinquent Sewer and Solid Waste Accounts RECOMMENDATION:

1. Authorize staff to complete and record lien against real property for those sewer accounts sixty days or more delinquent and solid waste accounts more than ninety days delinquent, outstanding as described in attached resolutions and written reports and to direct staff to file for the recording of liens for such properties.

2. Adopt Resolution No. 2026-085, of the City Council of the City of Fontana authorizing the collection of certain annual wastewater and solid waste service charges, including delinquent charges for each service, on the County property tax rolls and determining and record liens against current delinquent parcels.
..End
COUNCIL GOALS:
· To operate in a businesslike manner by becoming more service oriented. · To practice sound fiscal management by developing long-term funding and debt management plans.
· To improve public safety by increasing operational efficiency, visibility, and availability.

DISCUSSION:

Public Hearings on proposed liens are scheduled quarterly to allow for timely collections and recording of indebtedness. The lien process protects revenues due to the City which would have otherwise been subject to loss through skipped accounts or property transfers.

The proposed written reports (one each for sewer and solid waste) are on file with the City Clerk.

Each property owner has had notification provided as required by state law regarding the public hearing and intent to record the lien amount, as well as regular billing notification and legal advertisement as required by City Code. The lists recommended for adoption contain the following; Type of Account Number of Properties Current Lien Amount Receivables Protected to Date
Sewer 113 $40,562.85 $4,769,435.56
Solid Waste* 142 $168,894.78 $9,826,033.98 City of Fontana Printed on 9/3/2026Page 1 of 2
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File #: 26-1238 Agenda Date: 9/8/2026
Agenda #: A. Category: Public Hearing
Type of Account Number of Properties Current Lien Amount Receivables Protected to Date
Sewer 113 $40,562.85 $4,769,435.56
Solid Waste* 142 $168,894.78 $9,826,033.98 *Collections are payable to Burrtec Waste and should be made directly to them.

Numbers subject to change if payments are collected
An administrative fee will be included to offset the City's costs to record the lien, as well as the County fee associated with release of the lien to ensure that property titles are cleared once payment has been made. All properties with unpaid liens as of July 1st will be subject to having the remaining amounts placed on the property tax rolls for collection through separate City Council action.

FISCAL IMPACT:

The approval of this item will result in liens totaling approximately $209,457.63 being recorded with the San Bernardino County Recorder’s Office and other applicable Countyoffices. These recorded liens will remain in effect until paid and, if still unpaid, will be included in the City’s next annual process to place delinquent charges on the County property tax roll for collection. This action will help prevent increases in customer charges due to uncollectible accounts. The Sewer lien list receivable amount has been included as revenue in the Sewer Operations Maintenance Fund for current and prior budget periods. Recording the solid waste liens strengthens Fontana solid waste’s ability to collect, thereby increasing the amount generated by the 12% franchise fee remitted to the City.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 9/3/2026Page 2 of 2
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RESOLUTION NO. 2026-085

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA ,

CALIFORNIA, AUTHORIZING THE COLLECTION OF CERTAIN

ANNUAL WASTEWATER AND SOLID WASTE SERVICE CHARGES,

INCLUDING DELIN QUENT CHARGES FOR EACH SERVICE, TO BE

COLLECTED ON THE SAN B ERNARDINO COUNTY ANNUAL

PROPERTY TAX ROLL , DETERMINING THAT CURRENT

DELINQUENT CHARGES CONSTITUTE A LIEN UPON PROPERTY,

AND MAKING CERTAIN FINDINGS AND TAKING OTHER ACTIONS

RELATED THERETO

WHEREAS, the City of Fontana (the “City”) City Council (the “City Council”) has by prior resolutions established rates and charges for the provision of sewer and wastewater services (the “ Wastewater Charges”) and solid waste collection services (the “Solid Waste Charges”) (collectively, the Wastewater Charges and Solid W aste Charges are the “Charges”); and

WHEREAS, pursuant to section 5473 et seq. of the Health and Safety Code, the City may collect the Charges , including delinquent Charges, on the San Bernardino County (the “County”) annual property tax roll in the same manner, at the same time as, together and not separately from, its general taxes; and

WHEREAS, pursuant to section 5473 of the Health and Safety Code, the City Council desires to authorize the collection of the Charges for both the wastewater and solid waste services on the tax roll; and

WHEREAS, the City Council further desires to authorize the collection of any delinquent Charges for both the wastewater and solid waste services on the tax roll pursuant to Health and Safety Code, section 5473a , and furth er desires at this time to record a lien against parcels of property currently delinquent with said wastewater and solid waste service Charges and has caused to be prepared a written report for each Charge (each a “Written Report”), copies of which are att ached hereto as Exhibit “A” and Exhibit “B” and by this reference incorporated herein, to be prepared and filed with the City Clerk containing the description of each real property parcel which has delinquent Charges outstanding and the amount of the Waste water Charges and Solid Waste Charges thereon; and

WHEREAS, the City Clerk caused a notice of the filing of the Written Reports and of the time and place of the public hearing thereon to be published in a newspaper of general circulation all in accordanc e with section 5473.1 of the Health and Safety ; and

WHEREAS, the City has also provided written notice to each parcel of property subject to the lien for delinquent Charges pursuant to section 5473.1; and

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Resolution No. 2026-085

2 of 4
WHEREAS, at the time stated in the notice being the 8th day of September 2026, at 2:00 p.m., the City Council conducted the public hearing on the Written Reports and heard and considered all objections or protests thereto, and has determined and hereby finds that protests have not been made by the owners of a majority of the separate parcels of real property described in the Written Reports for any delinquent Charges ; and

WHEREAS, approval of this Resolution shall authorize the collection of Wastewater Charges and Solid Waste Charges, including any delin quent Wastewater Charges and Solid Waste Charges on the County property tax rolls each year and shall constitute a lien against the parcel or parcels of land in accordance with section 5473 et seq. of the Health and Safety Code; and

WHEREAS, approval of t his Resolution shall also constitute a lien against the delinquent parcels of land included in the attached Written Reports in accordance with section 5473 et seq. of the Health and Safety Code.

NOW, THEREFORE, BE IT RESOLVED by the Cit y Council of the Ci ty of Fontana, California as follows:

Section 1. Recitals. The City Council hereby finds and determines that the above recitals are true and correct and are incorporated herein by this reference.

Section 2. Authorization. The City Council hereby authoriz es the collection of the Wastewater Charges and Solid Waste Charges in the future on the County property tax roll, including any delinquent Wastewater Charges and Solid Waste Charges , to be imposed th ereon, and this Resolution has been adopted by at least two-thirds of the members of the City Council.

Section 3. Written Report Approval . The Written Reports filed with the City Clerk contain the description of each real property parcel which is currently delinquent in the payment of the Wastewater Charges a nd Solid Was te Charges and the Written Reports are therefore approved and adopted.

Section 4. County Recorder’s Office . The City Clerk, or designee thereof, is hereby directed to file for record with the County Recorder’s Office a copy of the Written Reports, with a statement endorsed thereon over his or her signature that the Written Reports have been fully adopted by the City Council, together with a certified copy of this Resolution, and shall request that the y be recorded as a lien against the parcels contained therein.

Section 5. County Tax Roll . The Wastewater Charges and Solid Waste Charges, including any delinquent Wastewater Charges and Solid Waste Charges, shall be forwarded to the County Tax Collector for collection on the County Property tax roll in the same manner, by the same person, at the same time, together with and not separate from the general taxes , against the property to which they relate, and shall constitute liens on the property in the amount of the Charges, including any delinquen t 588
Resolution No. 2026-085

3 of 4
Charges, to be added to the tax bill next levied against each property.

Section 6. Future Proceedings . The City Council shall comply with section 5473 et seq. and cause to be prepared the written report each year the Charges are to be enrolled on the property tax roll pursu ant to section 5473 and 5473a of the Health and Safety Code, and the City Clerk shall cause a notice of public hearing pursuant to section 5473.1 of said code each year in compliance with the Health and Safety Code.

Section 7. CEQA. This action has been reviewed per the authority and criteria contained in the California Environmental Quality Act (CEQA), the State and local CEQA Guidelines, and the City's environmental regulations. The City, acting as the lead agency, determined tha t the resolution is not subject to CEQA pursuant to Sections 15060(c)(2), 15060(c)(3), and 15061(b)(3) of the State CEQA Guidelines, because it will not result in a direct or reasonably foreseeable indirect physical change to the environment as there is no possibility that the action would result in a significant environmental impact, and because it does not constitute a “project” as defined in Section 15378 of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3.

Section 8. Severability. If any provisi on of this Resolution or the application thereof to any person or circumstance is held invalid by a court of competent jurisdiction, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

Section 9. Effective Date. This Resolution shall become effective immediately upon its adoption.

APPROVED AND ADOPTED this 8th day of September.

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 resolution is the actual resolution duly and regularly adopted by the City Council at a regular meeti ng held on the 1 0th day of February, 2026, by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

589
Resolution No. 2026-085

4 of 4
_______________________________
City Clerk of the City of Fontana

_______________________________
Mayor of the City of Fontana

ATTEST:

_______________________________
City Clerk
590

EXHIBIT “A”

WRITTEN REPORT OF ASSESSOR’S PARCELS

DELINQUENT WASTEWATER SERVICE CHARGES

[Report Attached on Following Pages]
591

Customer Name Account APN Property Address Total
Ustrell, Sandro 003000 102733700 8855 Sierra 98.56 Garcia Jr., Jose 003090 102029600 16379 Foothill 98.56 Maharaj, Bisnath 003212 104254800 15355 Manila 258.06 Yates Commerce Assoc 003628 104254600 10721 Business 387.09 USPP Jurupa LLC 003873 104434000 13052 Jurupa 774.18 Obeid, Khaled 004252 101261600 13479 Baseline 1,182.72 Ayres, Richard 005130 104058700 10720 Mulberry 258.06 Sunrise Ford 005489 104120300 16005 Valley 788.48 Shalabi Enterprises 006262 102936400 16454 Merrill 98.56 Aguilera, Samuel K 006444 102767000 8561 Nuevo 98.56 Amarikwa, Linus 006608 103311500 9176 Sierra 98.56 Serrano, Daniel 007055 102437300 17345 Arrow 98.56 Ibrahim, Ibrahim M 007057 105411600 9399 Sierra 98.56 Tovar, William 007405 102819800 8627 Wheeler 98.56 Morales, Abraham 007513 102701400 8641 Sierra 295.68 Chado, Richard & Anthony 008830 111879100 7391 East 183.72 Hch Investments Llc 010322 106030200 17695 Arrow 98.56 Padilla, Marin 010334 116038600 8836 Sierra 394.24 Tan, Rocio Revocable 011042 102512200 8285 Wheeler 98.56 Maria Ong 011248 105820800 8832 Sierra 98.56 Rupar, Gary 011641 102336500 8171 Sierra 98.56 Rama Investment Llc 011717 102768500 8562 Wheeler 98.56 Reddy, Mallu 011718 102751700 8560 Wheeler 98.56 Vasili Trust Ivan & Iva 011774 102706800 16803 Arrow 591.36 Labra Investments LLC 011778 111984000 17670 Foothill 197.12 Fontana Woman's Club 011872 105340800 16880 Seville 348.92 Bishop Protestant Episcopal 011923 112002500 8321 Chantry 174.46 Labra Investment LLC 012195 103001300 8885 Sierra 295.68 Mizysak, Dorothy 012250 102327000 16235 Foothill 179.20 Rupar, Gary 012282 102383000 8181 Sierra 197.12 Mizysak, Dorothy 012712 106064700 16111 Ivy 189.27 Citrus Nursing Cntr 012839 103342600 9440 Citrus 951.60 Golden Properties Inc 012866 103143000 9008 Sierra 98.56 Hundal, Vishavdeep S. 013269 104099000 16718 Valley 98.56 Piazza Apartments 013450 103833900 9971 Juniper 4,163.94 Crouch, Allen G. 014412 102663500 17690 Arrow 197.12 Brinkman, Eduard 016833 104828800 15737 San Roque 139.00 Romero, Victor 017047 104891500 15413 Daybreak 139.00 Rodriquez, Mario 017070 104895800 11770 Malagon 138.15 Fontana Southridge Partners 017181 106414000 11673 Cherry 788.48 Labra Investments LLC 017850 102242300 17696 Foothill 197.12 Rhie Property Llc 017970 103026000 16724 Merrill 98.56 Medrano, Telesforo 018066 103012300 16522 Merrill 98.56 ONG, MARIE 018336 102926900 8818 Sierra 295.68 Hightech Floor Covering Inc 018397 102294400 16756 Foothill 98.56 Happyland Equity Llc 018468 106483700 17487 Arrow 591.36 Facundo, Fuentes 018529 110309800 9491 Sierra 98.56 Rico's Auto Repair & Smog Inc. 018602 102669700 17548 Arrow 394.24 592

Lynne S Bassey Trust 019496 104121600 10161 Sierra 150.33 Mendocino Forest Products 020010 105014500 13041 Union 387.09 Duke Realty 109 Beech Ave LP 020841 104290600 10905 Beech 82.11 Casey, Kim 020957 102859400 16920 Orange 98.56 Hardie, James 022466 104294600 10901 Elm 164.22 Escobar, David 022676 104541800 11412 Citrus Glen 139.00 Fontana Southridge Partners LP 023037 106435800 11647 Cherry 2,464.00 Azucena, Maria 023233 104557600 11475 Hideaway 139.00 Ruiz Trust 4/11/2016 023242 104539700 11448 Hideaway 139.00 Arevalo, Teresa 023312 104945300 15671 Willow 139.00 Flores, Denise 023530 104594000 16239 Valleyvale 114.34 Crown Technical System 023550 105062600 13470 Philadelphia 903.21 Molina, Pedro 023724 102758300 8550 Sierra 98.56 Allen, Arthur 024524 104654200 11464 Aberdeen 139.00 Mercado, Cesar 024679 102821600 8633 Rosena 208.20 Rossetta Management LLC 027354 105331700 17658 Foothill 98.56 Cedillo, Sandra 027528 102376600 8188 Sierra 788.48 Mueller, David 029323 106412700 16889 Arrow 394.24 Rosenblum, Jerry A & Cheryl Rev Tr 029623 102349000 8137 Sierra 197.12 8 Miller LLC 029676 101758000 14500 Miller 387.09 Andrade, Cristian 029872 103006900 16806 Merrill 98.56 Hernandez, Raquel 030634 102326700 17015 Foothill 197.12 Melia Holdings LLC 030972 102317500 17509 Foothill 492.80 Cardenas, Junior 031415 103036600 16629 Merrill 197.12 Ohana-ohai Llc 033789 104255500 15305 Manila 258.06 Bka Properties Llc 033826 104298000 13611 Santa Ana 645.15 Rexford Ind Realty Inc 034014 105342100 13231 Slover 81.92 Lang, Thomas 035674 102435000 16178 Arrow 98.56 Guzman, Tina 035962 105401500 17602 Arrow 197.12 Guzman, Jose T 035980 106430300 9057 Sierra 197.12 Rodriguez, Alicia 036778 102758100 8551 Sierra 98.56 Brito Cousin Inc 037461 102671200 18080 Arrow 1,379.84 Victory Bible Church 038201 106416700 10557 Juniper 4,883.80 Shawna Enterprises Inc 038206 106154200 17312 Foothill 197.12 Kurschner, Thomas 101005 110761800 7460 Cherry 223.07 LLC, SHRISHA 101085 107838100 7470 Cherry 591.36 Outpost 101206 108884400 11081 Cherry 197.12 106** Production Llc 101248 110717200 10681 Production 1,141.54 A & S Prof Real Estate Llc 101486 111382600 8867 Sierra 98.56 South Sierra Plaza Inc 102108 111645800 10664 Sierra 689.92 ZUHA INVESTMENTS LLC 102112 109485800 8048 Cherry 98.56 Trotter, Ronald 102403 108855400 14540 Slover 98.56 Tsehridis, Stavros 102508 106941900 16491 Valley 197.12 Ct Jurupa Industrial Llc 103231 108896800 15996 Jurupa 258.06 Sunoaks LLC 104805 114797100 16944 South Highland 689.92 Harb Ahmad 105107 114843700 14675 Valley 197.12 Alfred Signs 105144 112072800 14976 Foothill 98.56 Gabion Ranch Master 200531 115131100 5303 Napa Valley 300.65 BTC III Fontana Logistics Center 201080 109057400 10855 Cherry 197.12 Gabion Ranch Master Association 202556 115374000 5601 Montelena 300.65 593

Lajada, Alex Ninoi D 202921 112055400 7762 Edison 129.03 LEXIBRAND LLC 202922 112037400 7762 Edison 129.03 Valley Blvd Fontana Holding Group 203730 109264200 15762 Valley 98.56 March Bachli 204304 107839300 16726 Slover 129.03 Mulberry & Jurupa IND LLC 204309 111670700 13770 Jurupa 129.03 Pinnacle Realty & Holdings LLC 204331 108855100 14562 Slover 98.56 CIVF VI-CA 1W02 LLC 204490 115859800 16288 Boyle 129.03 Highland Park of Fontana Com Assoc 204494 106525000 14921 Gallery 98.56 Duke Realty Calabash LP 204496 109444200 13930 Santa Ana 387.09 BCIF SIERRA IC LP 204525 108044200 5309 Sierra 129.03 Boukdis Trust 7/8/87 (Dutch Bros) 204528 114796500 17010 South Highland 98.56 158** Valley Blvd Investors 204544 111606700 15894 Valley 129.03 MVP FONTANA I LLC 204550 115390200 6260 Mango 258.06 SCG/DP SLOVER LLC 204843 110455400 14457 Slover 129.03 Taher, Shams 204864 107055300 6285 Lytle Creek 98.56 $ 40,562.85

594

EXHIBIT “B”

WRITTEN REPORT OF ASSESSOR’S PARCELS

DELINQUENT SOLID WASTE SERVICE CHARGES

[Report Attached on Following Pages]

595

Parcel Num Owner Name Property Address Total
1119241200000 SIERRA LAKES COMMERCE LLC 6101 Sierra Ave 1,651.03 1119221590000 FICAROTTA, THOMAS JR (JT-ANGELO) 6183 Sierra Ave 1,206.68 1118463090000 STEPHEN, JOSEPH H 5247 Wildflower Ln 105.78 1118461520000 GHAZANFARI, ARMIN 16740 Plantain Way 142.89 1118443050000 ZAMORA, DANIEL WILLIAM 5165 Loquat Ln 142.89 1118441420000 HOPTON, FLINNOY III 5166 Currant Way 158.67 1118441250000 BELO, LESHTER B 5139 Currant Way 142.89 1118441210000 TAYLOR, KYLE STEVEN 5130 Currant Way 142.89 1118441080000 OTA, MALINDA LYNN 5159 Currant Way 258.21 1118422190000 ROMAN, CLADIO 16595 Botanical Ln 142.89 1118421330000 GUESS, RONALD 16470 Botanical Ln 142.89 1118421080000 SAUCEDA, HEIDI 16505 Botanical Ln 142.89 1118402150000 ABBRUZZESE, ETHAN 16570 Bottlebrush Ln 159.88 1118401140000 CRUZ, JOHN 16560 Stone Pine Ln 142.89 1118393110000 DEL RIO, MARTHA L CAVAZOS
16502 Casa Grande
Ave 300.00
1118291380000 PATEL, CHETAN & DAXA LIVING TR 10/4/ 5609 Lancewood Ct 179.31 1110011180000 INTEX PROPERTIES INLAND EMPIRE 14600 Bar Harbor Rd 1,839.91 1108431440000 BUSTILLOS, KARLA VICTORIA 6344 Moonfire Ln 142.89 1108431430000 CARBONE, JOSEPH 6346 Moonfire Ln 225.43 1108431250000 ARAFAT, AHMED 6343 Moonfire Ln 254.57 1108431200000 PORUNG, BERRY MELVY 15586 Asana Way 142.89 1108431110000 NUNEZ, EDGAR GERARDO 15520 Asana Way 142.89 1108431070000 NAMOU, KAMAL 15517 Asana Way 142.89 1108331310000 GRAYS LIVING TRUST 1/20/23 5992 Big Pine Dr 82.48 1107552220000 ZHANG, JINHUA 16086 Esparza Ln 142.89 1107552210000 GAYTAN, FELIPE JR 16084 Esparza Ln 142.89 1107552150000 PEREZ, RONALDO A 16064 Esparza Ln 177.19 1107552090000 BARAJAS, YORELY STELL 16044 Esparza Ln 142.89 1107551570000 DAVIS, NALIK K JR 16041 Olivas Ln 81.56 1107551550000 HE, YAO 16042 Olivas Ln 142.89 1107551170000 ZHANG, JINHUA 16031 Olivas Ln 142.89 1107551060000 GONZALEZ, OSCAR GALINDO 16056 Montenegro Ln 152.60 1107533430000 MELENDEZ, BRIANNA GISELLE 16040 Jamie Ln 142.89 1107261500000 CL SHOPS ON SUMMIT I CA LP 15254 Summit Ave 794.99 1100762390000 DE MORON, MARIA ELENA GALLEGOS 13372 Gettysburg St 168.99 0256131250000 IDIL WEST VALLEY LOGISTICS CEN 11520 Armstrong Rd 843.88 0256011340000 OLTMANS INVESTMENTS COMPANY LL 10760 Tamarind Ave 4,112.55 0256011320000 FIRST INDUSTRIAL L P 10586 Tamarind Ave 1,435.29 0255271080000 866 BERRY COURT LLC 10557 Juniper Ave 414.72 0255271070000 MGF SERVICES LLC 10557 Juniper Ave 269.35 596

0255091060000 CITY OF FONTANA 16679 Santa Ana Ave 142.89 0255081560000 GLC FONTANA II LLC 11263 Oleander Ave 24,537.71 0252032120000 TRIEU, DINH 9999 Palmetto Ave 411.54 0252012250000 LEDESMA, OSCAR
17385 San Bernardino
Ave 602.31
0251202150000 TDC BOYLE PARTNERS LLC 16748 Boyle Ave 3,256.88 0251121080000 MARCONI LLC 16277 Valley Blvd 594.15 0251111260000 ALDANA, ROBERT J & K. E. NIELSON FAM 17270 Valley Blvd 241.80 0251073380000 VALLE NUEVO LLC 16780 Valley Blvd 1,292.90 0246121010000 LIMON FAMILY TRUST 6/23/17 17715 Arrow Blvd 243.49 0246081260000 DIAB, DIAB 18150 Arrow Blvd 1,094.55 0243241400000 OEUNG, PEN LIANG 7398 Maple Ave 439.07 0243121250000 YASMEH FAMILY LIVING TR 6-18-0 17904 Foothill Blvd 748.05 0241261050000 CHITIAN LED INC 16544 San Jacinto Ave 255.78 0241251050000 SALINAS, VICTOR 7384 Palmetto Ave 142.89 0241033010000 WANG, XINGWEI & YE TRUST 04/2021 7687 Toyon Ave 142.89 0240554190000 MANJARREZ, CARLOS 7155 Citrus Ave 168.45 0239803270000 ESPINOZA, LUCINDA 4563 Condor Ave 142.89 0239071180000 PRINCE TADROS LLC 4385 Lytle Creek Rd 142.89 0238174350000 VINTAGE PARK EAST LLC 11899 Cabernet Dr 875.21 0238171690000 LBA RVI-COMPANY XXII LLC 11806 Pacific Ave 14,859.27 0238171510000 GPT PACIFIC AVENUE OWNER LP 11751 Pacific Ave 4,687.46 0238143130000 11545 PACIFIC AVE LLC 11545 Pacific Ave 1,011.08 0238143100000 DH 11440 PACIFIC LLC 11440 Pacific Ave 216.21 0237274150000 SERRANO, MICHAEL JOSEPH 14606 Argentine Ct 69.77 0237111420000 LIT INDUSTRIAL LIMITED PARTNER 10863 Catawba Ave 142.89 0237091070000 TA REALTY VALUE-ADD FUND XIII 15521 Slover Ave 2,434.11 0237061020000 DDM FAMILY REVOCABLE LIVING TR 14955 Slover Ave 997.02 0237053120000 LINDLEY, MARIA O 16032 Boyle Ave 116.28 0237031100000 PENNINGTON, FRANCI TAYLOR LIVING TRU 15251 Boyle Ave 269.35 0236591170000 AQUIRRE, NETZA 11537 Winery Dr 142.89 0236422510000 ROMERO, ALONZO G 11354 Almond Ave 387.48 0236191010000 CIVF VII-CA4MO2 LLC 10917 Cherry Ave 861.87 0236181060000 HINOJOSA, XICOTENCALT 10991 Almond Ave 269.35 0236161250000 AFFORDABLE LOGISTIC INC 11101 Calabash Ave 748.05 0236151690000 MULBERRY & JURUPA IND LLC 13770 Jurupa Ave 1,489.52 0236151520000 DESCANSANDO PARTNERS LP 11272 Calabash Ave 735.45 0236122220000 SALGUERO, SALVADOR 10691 Cherry Ave 162.74 0236122030000 DORRIZ, MARK M 14643 Aliso Dr 491.28 0236091400000 VFIV/DP BANANA SLOVER OWNER LL 10575 Banana Ave 142.89 0236071320000 CORTEZ, ENRIQUETA BUCIO REV TR 5/14/ 10546 Calabash Ave 773.73 0236061030000 KOSTON, JEROME D & JERRY ALYNE FAM T 14750 Boyle Ave 582.20 0236052450000 BUSTAMANTE, LILIANA 10466 Redwood Ave 687.10 597

0236021130000 VO AND LE FAMILY TRUST 11/16/1 10453 Calabash Ave 142.89 0233291190000 PADILLA, JOEY 9411 Catawba Ave 238.79 0233141180000 RALPH BROILES POST 6563 V F W 9190 Fontana Ave 1,723.86 0232191150000 TREJO, MONICA 16045 Dorsey Ave 841.38 0232102100000 GARCIA, SOFIA L 16097 Ivy Ave 174.45 0230411080000 WHITFIELD, DAISY 14424 Bing Ave 224.22 0230411050000 VALDEZ, ANTHONY JOSEPH 14430 Bing Ave 223.01 0228662560000 MONTANO, MARIA GUADALUPE 6973 Lisa Dr 259.42 0228291270000 OEUNG, PENG LIANG 6590 Almeria Ave 423.30 0228193270000 WEI, GONGHANG 7019 Aloe Ln 142.89 0228152410000 GLEN AT FONTANA BORROWER LLC 7021 Cedar Creek Way 220.58 0228152400000 GLEN AT FONTANA BORROWER LLC 15949 Cascade Dr 187.24 0228152360000 GLEN AT FONTANA BORROWER LLC 7058 Cedar Creek Way 142.89 0228152270000 GLEN AT FONTANA BORROWER LLC 7037 Bandon Dr 206.05 0228152130000 GLEN AT FONTANA BORROWER LLC 7020 Bandon Dr 325.66 0228152080000 GLEN AT FONTANA BORROWER LLC 7060 Bandon Dr 220.58 0226754110000 ZENG, HUA 15752 Caterpillar Dr 142.89 0226753580000 RUBIO, JESUS JR 4788 Milkweed Ct 193.97 0226753520000 ESCOBAR, BALBINO ENRIQUE 4804 Milkweed Ct 170.81 0226753480000 WORLEY, JUSTIN JAMES 4812 Milkweed Ct 207.40 0226552040000 RIOS, JUAN M 4761 Hawk Ridge Ave 316.58 0194431420000 PAN PACIFIC MILLENNIUM INC 9098 Alder Ave 142.89 0194411210000 DIETZ, DAVID 9135 Tamarind Ave 169.60 0194203360000 HAVEN ESTATE LLC 9057 Palmetto Ave 594.62 0194062200000 MIRANDA FAMILY TRUST 8/16/25 17403 Pinedale Ave 142.89 0193651510000 NIU, HENG 16483 Gala Ave 138.45 0193222010000 GRANDA, MARCO A 9363 Bennett Ave 318.67 0193131250000 CHAVEZ, MARIO 16764 Athol St 180.34 0193111340000 CARDENAS, COSME 16629 Merrill Ave 594.15 0193111040000 ARTEAGA, NORMA LIDIA MIRANDA 8944 Juniper Ave 368.67 0193051250000 RAMIREZ, ANGEL NERY 16309 Merrill Ave 100.14 0192311010000 MELIA HOLDINGS LLC 17509 Foothill Blvd 521.61 0192221380000 HAPPYLAND EQUITY LLC 17487 Arrow Blvd 194.72 0192211770000 AKIN, MARC TRUST 10/28/24 8840 Blanchard Ave 74.90 0192183210000 CITY OF FONTANA 8534 Kaiser Ave 142.89 0192151270000 KIM, CASEY 16920 Orange Way 174.27 0192151040000 BLUE HOMES GROUP LLC 8665 Sierra Ave 174.27 0192141030000 VILLALPANDO, ANA M 8575 Sierra Ave 118.54 0192133120000 FWK017 LLC 17606 Arrow Blvd 594.15 0192121130000 LUONG & NGUYEN FAMILY TRUST 08 17460 Arrow Blvd 748.05 0192011060000 RUPAR, GARY J 8171 Sierra Ave 841.38 0192011050000 RUPAR, GARY J 8185 Sierra Ave 444.15 0191303170000 YOTS PROPERTIES LLC 8822 Sierra Ave 187.58 598

0191303160000 ARROWCRAFT 840SBST LLC 8816 Sierra Ave 174.27 0191303150000 ARROWCRAFT 840SBST LLC 8806 Sierra Ave 156.25 0191302290000 ANDRADE, CRISTIAN P 16806 Merrill Ave 174.27 0191283010000 HAMDALLA, LISA M 8679 Bennett Ave 142.89 0191282110000 ROBLES, RAUL 8624 Bennett Ave 368.67 0191272170000 MERENDA, MARTHA ANN TRUST 05/24/18 8556 Bennett Ave 577.74 0191261010000 SHANNAK FAMILY REVOCABLE TR 2/ 16522 Merrill Ave 402.42 0191241540000 KAA PROPERTIES LP 16623 Valencia Ave 368.67 0191241100000 LOPEZ, DAVID ALVAREZ 16622 Orange Way 481.56 0191182360000 PULIDO, VIDAL ANAYA & AGUIRRE, LEONO 16269 Ceres Ave 255.78 0191181140000 MUNGUIA, FLORENCIO 16158 Ceres Ave 903.99 0191162390000 CITY OF FONTANA 16756 Arrow Blvd 65,108.24 0191062180000 SANCHEZ, EDGAR 16489 Ivy Ave 168.99 0190321330000 LABRA INVESTMENTS LLC 17696 Foothill Blvd 174.27 0190272220000 VALENCIA, MARIA LUZ REV TR 12/18/97 7986 Tamarind Ave 142.89 0190161100000 RODRIGUEZ, JOSE & LIZETTE RV LV TR 8015 Juniper Ave 255.78 0190013010000 BRUMELL, CARLTON 7794 Cartilla Ave 142.89

$ 168,894.78

599
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1222 Agenda Date: 9/8/2026
Agenda #: B. Category: Public Hearing
FROM:

Housing
SUBJECT:

Public Hearing for Consolidated Annual Performance Evaluation Report (CAPER) Fiscal Year 2025- 2026
RECOMMENDATION:

1. Conduct a public hearing for the Consolidated Annual Performance Evaluation Report (CAPER) prepared for the U.S. Department of Housing & Urban Development to report on specific Federal during Fiscal Year 2025-2026; and

2. Authorize the City Manager to enter into and/or transmit any documents necessary to submit the Consolidated Annual Performance, along with any comments received during the public hearing and public comment period, to the Department of Housing & Urban Development.

COUNCIL GOALS:
· Increase citizen involvement by informing the public about issues, program, and accomplishments.
· Concentrate on Inter-governmental relations by pursuing financial participation from county, state and federal governments.

DISCUSSION:

As an entitlement jurisdiction of the U.S. Department of Housing and Urban Development (HUD), the City of Fontana is required to annually prepare and submit the Consolidated Annual Performance and Evaluation Report (CAPER) to HUD. The CAPER document summarizes the City’s use of federal entitlements in a given fiscal year.

In fiscal year 2025-2026, the City of Fontana received $1,942,933.00 in Community Development Block Grant (CDBG) Program funds, $588,015.66 in HOME Investment Partnerships (HOME) Program funds, and $172,779.00 in Emergency Solutions Grant (ESG) Program funds. The 2025- 2026 CAPER evaluates the City’s achievement of goals established in the One-Year Action Plan for FY 2025-2026 and assesses the City’s overall performance during fiscal year 2025-2026 in meeting priorities identified in the first year of the City’s adopted Five-Year Consolidated Plan (2025-2029).

In fiscal year 2025-2026, the City of Fontana successfully carried out the actions outlined in both the One-Year Action Plan and the Consolidated Plan.

As required by HUD, a preliminary draft of the CAPER has been made available for public review for City of Fontana Printed on 9/2/2026Page 1 of 2
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600
File #: 26-1222 Agenda Date: 9/8/2026
Agenda #: B. Category: Public Hearing
a minimum of 15 days. From August 24th through September 8th, 2026, copies of the draft CAPER were available to residents of the City of Fontana and other interested parties on the City’s webpage and various City buildings.

Notice of availability of the CAPER and invitation to comment was published in the Press Enterprise and the San Bernardino Sun newspapers.

FISCAL IMPACT:

No fiscal impact. Funds were appropriated and allocated in prior fiscal years in CDBG & ESG Fund #362 and HOME Fund #363.

MOTION:

Approve staff recommendation.

City of Fontana Printed on 9/2/2026Page 2 of 2
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601

2025-2026 CONSOLIDATED ANNUAL PERFORMANCE

AND EVALUATION REPORT
JULY 1, 2025 THROUGH JUNE 30, 2026

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Table of Contents

CR-05 - Goals and Outcomes ................................................................................................ 1 CR-10 - Racial and Ethnic composition of families assisted .................................................... 8 CR-15 - Resources and Investments 91.520(a) ...................................................................... 9 CR-20 - Affordable Housing 91.520(b)...................................................................................14 CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) ...............16 CR-30 - Public Housing 91.220(h); 91.320(j) .........................................................................19 CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j) ................................................................... 20 CR-40 - Monitoring 91.220 and 91.230 ..................................................................................22 CR-45 - CDBG 91.520(c).......................................................................................................24 CR-50 - HOME 91.520(d) ......................................................................................................25 CR-60 - ESG 91.520(g) (ESG Recipients only) .....................................................................27 CR-65 - Persons Assisted .....................................................................................................29 CR-70 – ESG 91.520(g) - Assistance Provided and Outcomes .............................................32 CR-75 – Expenditures ...........................................................................................................33

Appendices

Appendix A – Public Notices ...................................................................................................... A Appendix B – Summary of Citizen Participation Comments ....................................................... B Appendix C – IDIS Reports ........................................................................................................ C

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605

City of Fontana 2025-2026 CAPER 1
OMB Control No: 2506-0117 (exp. 07/31/2015)

CR-05 - Goals and Outcomes
Progress the jurisdiction has made in carrying out its strategic plan and its action plan.

91.520(a)

The 2025-2026 Consolidated Annual Performance and Evaluation Report (CAPER) is the City of Fontana’s report to the U.S. Department of Housing and Urban Development (HUD) describing the use of federal Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME) and Emergency Solutions Grant (ESG) funds. The CAPER reports on the first program year of the 2025-2029 Consolidated Plan period, covering July 1, 2025 to June 30, 2026.

The City receives CDBG, HOME and ESG funds from HUD on a formula basis each year, and in turn, implements projects and awards grants and loans to individual households and nonprofit, for-profit or public organizations for projects in furtherance of the adopted Consolidated Plan. The activities reported in this CAPER were determined and planned in the City’s 2025 -2026 Annual Action Plan. The Annual Action Plan was approved at a Public Hearing on March 25, 2025.

For the 2025-2026 program year, the City received $1,942,933 of CDBG funds; $588,015.66 of HOME funds; and $172,779 in ESG funds . In FY2021 the City received $2,633,568 of HOME ARP funds and in FY2025 the City continued to identify next steps for implementation.

The investment of these funds was a catalyst for positive change in the community. Together with other federal, state, and local investments, HUD resources allowed the City and its partners to provide low- and moderate-income households with the services which follow:
• Fair Housing services to 78 individuals
• Public Safety services to 12,845 LMI persons, 20,735 total persons • Recreational scholarships to 169 individuals
• Acquisition and rehab of 3 housing units
• Rehab of 20 homeowner housing units
• Assistance to 15 people experiencing homelessness
Tables 1 – 3 provide a summary of the five- year and one-year accomplishments for the period ending June 30, 2026, arranged by each of the Strategic Plan Goals included in the 202 5-2029 Strategic Plan of the Consolidated Plan.
606

City of Fontana 2025-2026 CAPER 2
OMB Control No: 2506-0117 (exp. 07/31/2015)
Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g)

Table 1 - 5-Year 2025-2029 Forecasted Budget
Goal Description Category 2025-2029 Source/
Amount
Affordable Housing
Owner occupied rehabilitation,
acquisition and rehabilitation,
support of new development
Affordable Housing HOME: $6,673,986.47
CDBG: $5,314,535
CDBG and HOME Program
Administration Program administration Administration CDBG: $1,792,930 HOME: $294,007.83
Public Facilities Improvements Improve public facilities and infrastructure of LMI residents
Non-Housing Community
Development CDBG: $1,000,000
Fair Housing Services Fair housing and tenant and
landlord mediation services Other CDBG: $150,000
Homeless Assistance Homelessness prevention and
rapid rehousing
Non-Housing Community
Development

ESG: $863,895
Public Services for low-income
families
Senior and youth scholarships
and public safety services
Non-Housing Community
Development
CDBG: $1,457,200

607

City of Fontana 2025-2026 CAPER 3
OMB Control No: 2506-0117 (exp. 07/31/2015)
Table 2- 1-Year 2025 Budget
Goal Description Category 2025 Source/ Amount
Affordable Housing
Owner occupied rehabilitation,
acquisition and rehabilitation,
support of new development
Affordable Housing
HOME: 4,557,130.09
CDBG: 262,907

CDBG and HOME
Program Administration
Program administration Administration HOME: 58,801.57
CDBG: 358,586
Fair Housing Services Fair housing and tenant and
landlord mediation services Affordable Housing CDBG: 30,000 Homeless Assistance
Homelessness prevention and
rapid rehousing
Non-Housing Community
Development

ESG: 172,799
Public Services for low-
income families
Senior and youth scholarships
and public safety services
Non-Housing Community
Development
CDBG: 291,440

Public Facilities
Improvements
Improve public facilities and
infrastructure of LMI residents
Non-Housing Community
Development CDBG: $1,000,000

608

City of Fontana 2025-2026 CAPER 4
OMB Control No: 2506-0117 (exp. 07/31/2015)
Table 3 - Cumulative and 1-Year Accomplishments
Goal Indicator Unit of
Measure
Strategic Plan: 2025-2029 Annual Outcomes: 2025
Expected
(2025-
2029)
Actual (2025-
2029)
Percent
Complete
Expected Actual Percent
Complete
Affordable
Housing
Homeowner
Housing
Rehabbed
Household
Housing
Unit
50 20 40% 10 20 200%
Rental units
constructed
Household
Housing
Unit
11 0 0 2 0 0%-
Rental units
rehabbed
Household
Housing
Unit
12 3 25% 1 3 300%

TBRA / RRH
Household
Housing
Unit

11 0 0% 0 0 0%
CDBG and
HOME
Program
Admin
Other Other 5 1 20% 1 1 100%
Fair Housing
Services Other Other 5 1 20% 1 1 100%
Homeless
Assistance
TBRA / Rapid
Rehousing
Households
Assisted 20 0 0% 4 0 0%
609

City of Fontana 2025-2026 CAPER 5
OMB Control No: 2506-0117 (exp. 07/31/2015)
Goal Indicator Unit of
Measure
Strategic Plan: 2025-2029 Annual Outcomes: 2025
Expected
(2025-
2029)
Actual (2025-
2029)
Percent
Complete
Expected Actual Percent
Complete
Homelessness
Prevention
Persons
Assisted 500 0 0% 100 0 0%
Emergency
Shelter
Persons
Assisted 100 15 15% 20 15 75%
Public
Services for
low-income
families
Public service
activities other
than LMI
Housing
Benefit
Persons
Assisted
64,225 13,014 20% 12,845 13,014 101%
Public
Facilities
Improvements
Public facility
or
infrastructure
activities for
Low-/Moderate
Income
Housing
Households
Assisted 10 0 0% 2 0 0%

610

City of Fontana 2025-2026 CAPER 6
OMB Control No: 2506-0117 (exp. 07/31/2015)
Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified.

The 2025-2029 Consolidated Plan identified seven high priority goals of the city. During the 2025- 2026 program year t he city made progress toward meeting these goals . The pandemic drove down performance early in the Consolidated Planning cycle, since then annual performance has rebounded.

Preservation of the supply of affordable housing, specifically existing affordable housing stock occupied by low - and moderate-income households, was achieved through the city’s housing rehabilitation program s. In program year 202 5-2026, the housing rehabilitation program rehabilitated 20 housing units.

The city worked to expand the supply of affordable housing . In partnership with housing developers. CDBG and HOME funds may be leveraged in support of the development of new rental housing units affordable to households earning less than 30, 60, or 80 percent of Area Median Income (AMI), including units reserved for residents with special needs. In addition, the City may use CDBG and HOME funds to acquire and rehabilitate existing single family and multi- family housing units to increase the supply of affordable rental housing for its lower -income households. In program year 2025- 2026 the Affordable rental housing development program acquired 3 properties, which have benefitted 7 low-moderate income household. The Courtplace Apartment Project continues to make progress. It is anticipated this project will bring 11 new units of affordable housing to market 2026-2027.

Ensuring equal access to housing opportunities by affirmatively furthering fair housing choice through the provision of fair housing education, counseling, anti -discrimination, and landlord- tenant mediation services is a high priority goal for the city. In program year 2025 -2026 Inland Fair Housing & Mediation Board served 78 residents of Fontana.

Prevention and eliminat ion of homelessness is a high priority goal for the city. Fontana supports a continuum of services to prevent and eliminate homelessness. In program year 2025- 2026 emergency shelter was provided to 15 people.

Providing public services to low-income residents to prevent homelessness and ameliorate the effects of poverty is a high priority of the city. Through the 2025 public safety program CDBG funds supported the City's Multiple Enforcement Team (MET), which provided a balanced approach in traditional law enforcement services, along with conducting outreach, education and providing resources to the homeless population. The MET worked directly with the homeless to reduce crime relating to homelessness, calls for service, resources to medical professionals and city staff. There were seven 7 sworn officers assigned to the MET Unit (1 sergeant, 1 corporal and 5 officers) . This area-wide program served 12,845 LMI persons and 20,735 total persons.

The City also provided funding for the recreational scholarship program which benefited 169 low- income individuals.
611

City of Fontana 2025-2026 CAPER 7
OMB Control No: 2506-0117 (exp. 07/31/2015)
Improving city public facilities and infrastructure to benefit low - and moderate- income residents or those presumed under HUD regulations to be low - and moderate-income such as the elderly and disabled adults is a high priority goal. The Acquisition / Improvement of Public Facilities project was added to the Action Plan, through a Substantial Amendment, in May 2026.

This project is still in development.
612

City of Fontana 2025-2026 CAPER 8
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-10 - Racial and Ethnic composition of families assisted Describe the families assisted (including the racial and ethnic status of families assisted).

91.520(a)
Table 4 – Table of assistance to racial and ethnic populations by source of funds Race CDBG HOME
White 87 0
Black or African American 29 0
Asian 11 0
American Indian or American Native 0 0
Native Hawaiian or Other Pacific Islander 1 0
Total 128 0
Hispanic 120 0
Not Hispanic 13 0
Total 133 0

HESG
American Indian, Alaska Native, or Indigenous 0
Asian or Asian American 0
Black, African American, or African 2
Hispanic/Latina/e/o 7
Middle Eastern or North African 0
Native Hawaiian or Pacific Islander 0
White 4
Multiracial 0
Client doesn't know 0
Client prefers not to answer 0
Data not collected 0
Total 13

Narrative
Table 4 provides an aggregate of race and ethnicity data for the number of people reported as complete during the program year based on the CDBG and ESG accomplishments of, as reported in HUD’s Integrated Disbursement and Information System (IDIS).

It should be noted that CDBG participants identified racially in ways not included in Table 4. Those ways were as follows: 50 as Other multi -racial, 4 as Black/ African American and White, 1 as American Indian/ Alaskan Native and Black / African American, 1 as Asian and White, 1 as Black and White, and 3 as other totaling 59 people.

It should be noted that 2 ESG participants identified as 'White & Hispanic/Latina/o which is not included in the table above.
613

City of Fontana 2025-2026 CAPER 9
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-15 - Resources and Investments 91.520(a)
Identify the resources made available

Table 5 - Resources Made Available
Source of Funds Resources
Made
Available
Amount
Expended During
Program Year
CDBG $1,942,933 $743,514
HOME $4,557,130.09 $2,452,565
ESG $173,930 $12,600

Narrative

The federal, state, local and private resources available for the implementation of projects during the 2025-2026 program year are identified in -Table 5. The CDBG resources included $1,942,933 in formula grant funds. The HOME resources included $588,015.66 formula funds, $3,922,280 in prior year resources, and $105,636 in program income. The ESG resources included $ 172,779 in formula funds. The remaining CDBG-CV funds are for administration to close out the grant.

The City is prioritizing the investment of HOME funds in support of the Courtplace Apartment project that it is anticipated will expand the supply of affordable housing by 11 units available to 30%, 60% , and 80% AMI households . Significant HOME funds are available to finance this project, which is anticipated to be completed in fiscal year 2026-2027. In FY2025 ESG funds were allocated to emergency shelter and administration. The 60 percent threshold for street outreach and emergency shelter was not crossed.

Identify the geographic distribution and location of investments

Table 6 - Identify the geographic distribution and location of investments Target Area
Planned
Percentage of
Allocation
Actual
Percentage of
Allocation
Narrative Description
Citywide 84% 84% Public services mostly serve low- and
moderate-income areas.

Low- and
Moderate-Income
Areas
16% 16%
There were no capital projects in the
program year. Only the public safety
program was restricted to low- and
moderate-income areas.

Narrative
The actual percentages of allocation in the table above reflect the City’s CDBG formula allocation excluding the City’s planned administrative costs.
614

City of Fontana 2025-2026 CAPER 10
OMB Control No: 2506-0117 (exp. 07/31/2015)
Leveraging
Explain how federal funds leveraged additional resources (private, state and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the plan.

In planning and implementing all HUD funded activities, the City regularly works to identify and leverage other funding streams to maximize the impact of the CDBG, HOME, and ESG activities.

Cities receiving HOME Program funds are generally required to provide a HOME match of 25% of their annual allocation. During FY2023 Fontana met the criteria of a financial distressed jurisdiction and received a 50 percent reduction in match to 12.5 percent. This is the most current calculation of the reduced HOME match requirement. The ESG program requires a dollar -for- dollar match requirement. The City of Fontana requires its ESG subrecipients to meet the match requirement and the City provides match for administrative funds it expends. This is done through a mix of cash and in-kind match as allowed under 24 CFR Part 576. In accordance with State law and local priority, the City consistently looks to leverage state and locally owned property to achieve its annual goals.

Table 5 – Fiscal Year Summary - HOME Match Report
Fiscal Year Summary – HOME Match

1. Excess match from prior Federal fiscal year $19,426,074

2. Match contributed during current Federal fiscal year $0

3. Total match available for current Federal fiscal year (Line 1 plus Line 2) $19,426,074

4. Match liability for current Federal fiscal year $0

5. Excess match carried over to next Federal fiscal year (Line 3 minus Line 4) $19,426,074

615

City of Fontana 2025-2026 CAPER 11
OMB Control No: 2506-0117 (exp. 07/31/2015)
Table 7 - Match Contribution for the Federal Fiscal Year Match Contribution for the Federal Fiscal Year
Project No. or
Other ID
Date
Contributed
Cash
(non-
Federal
sources)
Foregone
Taxes,
Fees,
Charges
Appraised
Land/Real
Property
Required
Infrastructure
Site Prep,
Construction
Materials,
Donated
Labor
Bond
Financing Total
None N/A $0 $0 $0 $0 $0 $0 $0

Table 8 - Program Income
Program Income – Enter the program amounts for the reporting period Balance on hand at
beginning of reporting
period
Amount received during
reporting period
Total amount expended
during reporting period
Amount expended for
TBRA
Balance on hand at end
of reporting period
$22,555.15 $0.00 $0.00 $0.00 $22.555.15

616

City of Fontana 2025-2026 CAPER 12
OMB Control No: 2506-0117 (exp. 07/31/2015)
HOME MBE/WBE report

Minority Business Enterprises and Women Business Enterprises – Indicate the number and dollar value of contracts for HOME projects completed during the reporting period Table 9 - Minority Business and Women Business Enterprises Total
Minority Business Enterprises
White
Non-
Hispanic
Alaskan
Native
or
America
n Indian
Asian or
Pacific
Islander
Black
Non-
Hispanic
Hispanic
Contracts
Number 0 0 0 0 0 0
Dollar Amount $0 $0 $0 $0 $0 $0
Sub-Contracts
Number 0 0 0 0 0 0
Dollar Amount $0 $0 N/A $0 $0 $0
Total Women Business
Enterprises Male
Contracts
Number 0 0 0
Dollar Amount $0 $0 $0
Sub-Contracts
Number 0 0 0
Dollar Amount $0 $0 $0

617

City of Fontana 2025-2026 CAPER 13
OMB Control No: 2506-0117 (exp. 07/31/2015)
Minority Owners of Rental Property – Indicate the number of HOME assisted rental property owners and the total amount of HOME funds in these rental properties assisted Table 10 -Minority Owners of Rental Property
Total
Minority Property Owners
White
Non-
Hispanic
Alaskan
Native or
America
n Indian
Asian or
Pacific
Islander
Black
Non-
Hispani
c
Hispanic
Number 0 0 0 0 0 0
Dollar Amount $0 $0 $0 $0 $0 $0

Relocation and Real Property Acquisition – Indicate the number of persons displaced, the cost of relocation payments, the number of parcels acquired, and the cost of acquisition

Table 11 – Relocation and Real Property Acquisition
Parcels Acquired 0 $0
Businesses Displaced 0 $0
Nonprofit Organizations Displaced 0 $0
Households Temporarily Relocated, not
Displaced 0 $0

Househol
ds
Displaced
Total
Minority Property Enterprises
White
Non-
Hispanic
Alaskan
Native or
American
Indian
Asian or
Pacific
Islander
Black Non-
Hispanic Hispanic
Number 0 0 0 0 0 0
Cost $0 $0 $0 $0 $0 $0

618

City of Fontana 2025-2026 CAPER 14
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-20 - Affordable Housing 91.520(b)
Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low -income, low-income, moderate-income, and middle-income persons served.

Table 12- Number of Households
One-Year Goal Actual
Number of homeless households to be provided
affordable housing units 0 0
Number of non -homeless households to be
provided affordable housing units 13 27
Number of special -needs households to be
provided affordable housing units 0 0
Total 13 27

Table 13 Number of Households Supported
One-Year Goal Actual
Number of households supported through rental
assistance 0 0
Number of households supported through the
production of new units 2 0
Number of households supported through the
rehab of existing units 10 20
Number of households supported through the
acquisition of existing units 1 7
Total 13 27

Discuss the difference between goals and outcomes and problems encountered in meeting these goals.

Labor and material costs continue to rise. According to the one-year goals in the 2025 Action Plan the City forecasted providing affordable housing to 13 low- and moderate-income households.

The city exceeded this goal, assisting a total of 27low- and moderate-income households.

I

619

City of Fontana 2025-2026 CAPER 15
OMB Control No: 2506-0117 (exp. 07/31/2015)
Discuss how these outcomes will impact future annual action plans.

The City will continue to work to make affordable housing and programming resources available to low- and moderate-income households and those at- risk of and experiencing homelessness.

Progress will continue to be made on the Courtplace project which will bring on 11 new units of affordable housing.

Include the number of extremely low-income, low-income, and moderate-income persons served by each activity where information on income by family size is required to determine the eligibility of the activity.

Table 14 - Number of Families or Households Served
Number of Households Served CDBG Actual HOME Actual
Extremely Low-income 1 0
Low-income 4 0
Moderate-income 2 0
Total 7 0

Narrative Information
Table 14 includes the CDBG funded owner-occupied rehab, acquisition rehab and scholarship programs. To address what HUD defines as “worst case housing need” – low-income residents who pay more than 50 percent of their income for housing costs – the city added 7 units of affordable housing. Further, the City continues to pursue the development of additional low- and moderate-income housing opportunities through the CDBG, HOME and other federal and state programs.

Through all programs, the City ensures that assistance is targeted and made available to individuals experiencing disabilities to ensure they have equal access to affordable housing programs. Where possible, homeless service providers leverage County programs for supportive housing activities and refers clients to such programs.

620

City of Fontana 2025-2026 CAPER 16
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-25 - Homeless and Other Special Needs 91.220(d, e); 91.320(d, e); 91.520(c) Evaluate the jurisdiction’s progress in meeting its specific objectives for reducing and ending homelessness through:

Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
To address incidences of homelessness in Fontana and to prevent extremely low-income Fontana families from becoming homeless, the City places a high priority on programs that work to prevent homelessness or rapidly connect homeless individuals with housing and supportive services. To address this need, the City has supported a continuum of services in Fontana and though the San Bernardino County Continuum of Care (CoC) utilizing its ESG funds, to prevent and eliminate homelessness; including, but not limited to, Homelessness Prevention, Rapid Rehousing, and Street Outreach.

The 2025 Point-In-Time count found in San Bernardino County found1,201 people experiencing homelessness were sheltered and 2,636 were unsheltered. Approximately nine percent of the total homeless population in the County resides in Fontana. The 2025 PIT count found 36 sheltered, 57 transitionally housed, and 271 unsheltered people experiencing homelessness in Fontana.

Addressing the emergency shelter and transitional housing needs of homeless persons The ultimate solution to ending homelessness is transitional and permanent housing closely aligned with supportive services that ensure housing stability can be maintained. However, because the demand for affordable housing far outpaces the region’s supply, the CoC continues to rely on its emergency and transitional housing system to address the immediate needs of San Bernardino County’s homeless population.

The City of Fontana , through its ESG allocation, funded the Water of Life Homelessness Prevention and Rapid Rehousing Programs. In addition, the City supported the efforts of the San Bernardino County Continuum of Care (CoC) and its member organizations that address homelessness.

Helping low -income individuals and families avoid becoming homeless, especially extremely low -income individuals and families and those who are: likely to become homeless after being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); and, receiving assistance from public or private agencies that address housing, health, social services, employment, education, or youth needs
During Program Year 2025-2026 the City connected chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth with available resources through the San Bernardino County CoC, which is comprised of a network of public, private, faith-based, for-profit, and non-profit service providers who utilize several federal, 621

City of Fontana 2025-2026 CAPER 17
OMB Control No: 2506-0117 (exp. 07/31/2015)
state and local resources to provide services for homeless people. The goal was to help unsheltered homeless persons make the transition to permanent housing and independent living, including shortening the period that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units.

The City provided ESG funds to Water of Life to rapidly rehouse families experiencing homelessness and to prevent individuals and families who are at risk of homelessness from experiencing it. This assistance helped extremely low-income individuals and families who were currently housed but faced circumstances beyond their control that made it infeasible to stay current on their rent.

To augment ESG-funded homelessness services, the city secured competitively awarded State Homekey grants and spends State Permanent Local Housing Allocation (PLHA) funds . These sources fund rehab, operation, and services, including case management for emergency shelter, transitional, and permanent housing. Additionally, the City has formed the Community Outreach and Support Team (COAST) in partnership with the San Bernardino County’s Department of Behavioral Health and the San Bernardino Fire Department. This unit provides mental health services to the hom eless population out in the field through crisis intervention, c ommunity activities, and providing resources to those in need. This partnership expedites the process and services in providing much-needed mental health to the homeless population.

The City of Fontana funds the Inland Fair Housing and Mediation Board to provide fair housing, tenant/landlord mediation and legal services for residents through attorney consultations and preparation of legal documents for the residents to represent themselves in family law and landlord/tenant actions. Some of these services are provided to prevent undue evictions that could lead to homelessness.

The Housing Authority of the County of San Bernardino provides Section 8 rental assistance to extremely low- and very low -income households located within the City limits. The Section 8 program gives priority to households that are at risk of becoming homeless or currently residing in inadequate housing.

Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the peri od of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again The San Bernardino County CoC Ten-Year Plan to End Homelessness included a goal to more rapidly identify and assess people experiencing homelessness. The CoC is working with 2 -1-1 to create a Coordinated Entry System (CES) for persons at risk or experienc ing homelessness within the CoC. The activities include street outreach, a universal assessment, intake, referrals and transportation to resources. The CES will include a database, housed in the Homeless Management Information System (HMIS), using real-time data entry to match clients to 622

City of Fontana 2025-2026 CAPER 18
OMB Control No: 2506-0117 (exp. 07/31/2015)
appropriate service providers. Collectively these strategies minimize duplication of effort and better connect the most vulnerable individuals and families, chronically homeless, and people at risk of becoming homeless to appropriate resources.

623

City of Fontana 2025-2026 CAPER 19
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-30 - Public Housing 91.220(h); 91.320(j)
Actions taken to address the needs of public housing
The City of Fontana Housing Authority was formed in 1994 under State of California Housing Authority Law to actively improve existing neighborhoods and develop affordable housing opportunities using local, state and federal resources. The Fontana Housing A uthority does not administer a Section 8 Program and does not own HUD Public Housing; however, the City is within the service area of the Housing Authority of the County of San Bernardino (HACSB) for the purposes of Section 8 and Public Housing.

HACSB primarily operates as a voucher-based housing authority, owning only one unit of public housing. As of December 2025 , HACSB offered the following types and quantities of housing vouchers:
- 7,508 Tenant-Based Housing Choice Vouchers (HCV)
- 1,129 Project-Based HCVs
- 1,113 Rental Assistance Demonstration (RAD) HCVs
- 118 Family Unification Special Purpose Voucher (SPV)
- 309 Mainstream SPVs
- 420 Veteran Assistance Supportive Housing (VASH) SPVs - 68 Housing Opportunities for Persons with AIDS vouchers - 460 Emergency Housing Vouchers
- 246 Continuum of Care vouchers
- 8 master leasing projects
As of December 2025 , a total of 745 housing vouchers of all types were in use throughout Fontana.

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

Actions taken to provide assistance to troubled PHAs
Not applicable. HACSB is considered a High Performing PHA. 624

City of Fontana 2025-2026 CAPER 20
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-35 - Other Actions 91.220(j)-(k); 91.320(i)-(j)
Actions taken to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, and policies affecting the return on residential investment. 91.220 (j); 91.320 (i) A barrier to affordable housing is a public policy or nongovernmental condition that constrains the development or rehabilitation of affordable housing, such as land use controls, property taxes, state prevailing wage requirements, environmental protection, cost of land and availability of monetary resources. Barriers to affordable housing are distinguished from impediments to fair housing choice in the sense that barriers are lawful and impediments to fair housing choice are usually unlawful.

The primary barriers to affordable housing in Fontana continue to be housing affordability and the lack of monetary resources necessary to develop and sustain affordable housing. The two barriers are related in the sense that demand for affordable housing exceeds the supply and insufficient resources are available to increase the supply of affordable housing to meet demand.

To address housing affordability and the lack of monetary resources for affordable housing, the Strategic Plan of the 20 25-2029 Consolidated Plan called for the investment of a significant portion of CDBG and HOME funds for the construction of 11 new affordable rental housing units, 12 rental units acquired and rehabbed and the preservation of 50 existing affordable housing units. During the first program year of this Consolidated Plan cycle 2025-2026, 3 units have been acquired and rehabilitated and 20 affordable housing units have been preserved.

Actions taken to address obstacles to meeting underserved needs. 91.220(k); 91.320(j) The primary obstacles to meeting the underserved needs of low - and moderate-income people include lack of funding from federal, state and other local sources, the high cost of housing, and the lack of availability of home improvement financing in the private lending industry. To address these obstacles, the City invested CDBG and ESG funds in Program Year 2025-2026 in projects that provided loans to low - and moderate -income homeowners for home repair projects and projects that prevent and shorten periods of homelessness.

Actions taken to reduce lead-based paint hazards. 91.220(k); 91.320(j) The Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) emphasizes prevention of childhood lead poisoning through housing- based approaches. To reduce lead- based paint hazards, the rehabilitation of housing units built prior to January 1, 1978 included a lead-based paint testing and risk assessment process. Whe n lead-based paint wa s identified, the City ensured that developers and contractors incorporate safe -work practices and depending on the level of assistance, abate the lead-based paint as part of the scope of work to effectively reduce lead-based paint hazards to children in accordance with 24 CFR Part 35.

625

City of Fontana 2025-2026 CAPER 21
OMB Control No: 2506-0117 (exp. 07/31/2015)
Actions taken to reduce the number of poverty-level families. 91.220(k); 91.320(j) The City’s CDBG and ESG funds were used to maintain safe and adequate housing for many residents in program year 2025 . In addition to these resources , mainstream state and federal resources also contributed to reducing the number of individuals and families in poverty. Federal programs, such as the Earned Income Tax Credit and Head Start, provide pathways out of poverty for families who are ready to pursue employment and educational opportunities. Additionally , in California, the primary programs that assist families in poverty are CalWORKS, CalFresh (formerly food stamps) and Medi-Cal. Together, these programs provided individuals and families with employment assistance, subsidy for food, medical care, child- care and cash payments to meet basic needs such as housing, nutrition and transportation. Other services are available to assist persons suffering from substance abuse, domestic violence and mental illness.

In fiscal year 2023 the City was awarded a grant from HUD’s Office of Lead Hazard Control and Healthy Homes. The resulting Lead Hazard Reduction Program helps to prevent childhood lead poisoning and unsafe lead conditions by eliminating lead and other hazards (e.g., cracking paint, contaminated soil) in rental and owner -occupied properties where households with low ‐income reside.

Actions taken to develop institutional structure. 91.220(k); 91.320(j) The institutional delivery system in Fontana is high-functioning and collaborative—particularly the relationship between local government and the nonprofit sector comprised of a network of capable nonprofit organizations that are delivering a full range of services to residents. Strong City departments anchor the administration of HUD grant programs and the housing, community and economic development activities that are implemented by the City.

To support and enhance the existing institutional structure, the City of Fontana continued to collaborate with affordable housing developers and nonprofit agencies receiving CDBG and ESG funds through the 2025-2026 Action Plan to ensure that the needs of low- and moderate-income residents were met as envisioned within the 2025-2029 Consolidated Plan - Strategic Plan.

Actions taken to enhance coordination between public and private housing and social service agencies. 91.220(k); 91.320(j)
To enhance coordination between public and private housing and social service agencies, the City continued consulting with and inviting the participation of a wide variety of agencies and organizations involved in the delivery of housing and supportive ser vices to low- and moderate- income residents in Fontana—particularly in the low-and moderate-income areas.

Identify actions taken to overcome the effects of any impediments identified in the jurisdiction’s analysis of impediments to fair housing choice. 91.520(a) During Program Year 2025-2026, the City of Fontana Housing Department and the Inland Fair Housing and Mediation Board affirmatively furthered fair housing choice through education and direct assistance.
626

City of Fontana 2025-2026 CAPER 22
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-40 - Monitoring 91.220 and 91.230
Describe the standards and procedures used to monitor activities carried out in furtherance of the plan and used to ensure long-term compliance with requirements of the programs involved, including minority business outreach and the comprehensive planning requirements
To ensure CDBG, HOME, and ESG funds are used efficiently and in compliance with applicable regulations, the City provides technical assistance and monitors the progress of subrecipients throughout the program year.

The City provides technical assistance to its departments, agencies, and subrecipients receiving CDBG, HOME and ESG funding. Following approval of the Annual Action Plan, City staff conduct detailed reviews of program regulations with subrecipients and City d epartments. This process provides useful forms and resources for documenting compliance, as well as reviewing the City’s compliance procedures and requirements. Additionally, individualized technical assistance is provided on an as-needed basis throughout the program year.

All activities undergo monitoring, beginning with a detailed review upon receipt of an application to assess eligibility, conformance with a National Objective, and alignment with a Plan goal. This review also examines the proposed use of funds, eligibility of the service area, eligibility of the intended beneficiaries, and likelihood of compliance with other federal requirements.

Subrecipients are required to submit an audit and other documentation to establish their capacity.

Any findings noted in the audit are reviewed with the applicant. Eligible applications are then considered for funding. Once funded, desk monitoring includes ongoing review of required quarterly performance reports. For CDBG public service and ESG activities, on-site monitoring is conducted at least once every two years to ensure compliance. These are fiscal and programmatic reviews of the subrecipient’s activities to determine compliance with the program regulations and City contract.

Following the monitoring visit, a written report is provided delineating the results of the review and any findings of non -compliance, and required corrective action. Subrecipients and City departments typically have 30 days to provide the City with corrective actions taken address ing any noted findings. Individualized technical assistance is provided, as noted above, when compliance concerns are identified. For CDBG capital projects, monitoring also includes compliance with regulatory agreement requirements.

For HOME funded activities, annual monitoring ensures that renter occupied units comply with household income, rent restrictions, and utility allowance requirements, pursuant to the affordability covenant. For ownership units, annual monitoring of occupancy is conducted throughout the affordability period. For the HOME -funded activities, annual monitoring is undertaken to ensure that for renter -occupied units, household income, rents and utility allowances are in compliance with applicable limits pursuant t o the affordability covenant. For ownership units, annual monitoring of occupancy is conducted throughout the affordability period. 627

City of Fontana 2025-2026 CAPER 23
OMB Control No: 2506-0117 (exp. 07/31/2015)
The following is a list of the 6 rental units that were monitored in program year 2025 -2026 and found to be in compliance.

Property Name Report Date
Minerva Manor 4/11/2026
Piazza 4/11/2026
Date Street 6/11/2026
Hillcrest 6/11/2026
Valencia Woods 6/29/2026
Gardens at Sierra 6/30/2026

Citizen Participation Plan 91.105(d); 91.115(d)
Describe the efforts to provide citizens with reasonable notice and an opportunity to comment on performance reports.

In accordance with the City adopted Citizen Participation Plan, a public notice was published in the San Bernardino Sun, notifying the public of the availability of the Consolidated Annual Performance and Evaluation Report for a 15- day public review and comment period. A copy of the public notices is included in Appendix A . The draft CAPER was made available on the City website and posted publicly.

A public hearing before the City Council was held on September 8, 2026, to solicit comments from residents and interested parties. No public comments were received. The CAPER was approved. 628

City of Fontana 2025-2026 CAPER 24
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-45 - CDBG 91.520(c)
Specify the nature of, and reasons for, any changes in the jurisdiction’s program objectives and indications of how the jurisdiction would change its programs as a result of its experiences.

In the 2025-2026 program year, the City provided CDBG-funded public services. The City’s CDBG Fair Housing program served 78 unduplicated individuals. The City’s Public Safety Program served 12,845 LMI persons and the scholarship program served 169 LMI individuals. The housing programs supported 27 low- and moderate-income households to secure affordable housing. The city’s ESG program provided 15 individuals with emergency shelter.

629

City of Fontana 2025-2026 CAPER 25
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-50 - HOME 91.520(d)
Include the results of on-site inspections of affordable rental housing assisted under the program to determine compliance with housing codes and other applicable regulations Maintaining HOME-assisted affordable housing is a high priority. During the 2025-2026 Program Year, the City inspected the HOME-assisted properties listed below to determine compliance with the housing codes and other applicable regulations. Where any deficiencies existed, the property owner and property management were notified to make repairs and City staff followed up to ensure completion.

The following is a list of the 6 rental units that were monitored in program year 2025 -2026 and found to be in compliance.

Property Name Report Date
Minerva Manor 4/11/2026
Piazza 4/11/2026
Date Street 6/11/2026
Hillcrest 6/11/2026
Valencia Woods 6/29/2026
Gardens at Sierra 6/30/2026

Provide an assessment of the jurisdiction's affirmative marketing actions for HOME units.

92.351(b)
The City certified it made effort to affirmatively further fair housing as a participating jurisdiction that received HOME Program funds. The City used CDBG funds to promote fair housing by contracting with the Inland Fair Housing and Mediation Board to provide a variety of fair housing services.

Refer to IDIS reports to describe the amount and use of program income for projects, including the number of projects and owner and tenant characteristics According to the PR-09 report for the HOME program, $22.555.15 of HOME program income was receipted during Program Year 2025-2026 and will be committed for the next City HOME project in the next Program Year.

630

City of Fontana 2025-2026 CAPER 26
OMB Control No: 2506-0117 (exp. 07/31/2015)
Describe other actions taken to foster and maintain affordable housing. 91.220(k) The City of Fontana funds the Inland Fair Housing and Mediation Board to provide fair housing, tenant/landlord mediation and legal services for residents through attorney consultations and preparation of legal documents for the residents to represent thems elves in family law and landlord/tenant actions. Some of these services are provided to prevent undue evictions that could lead to homelessness.

The Housing Authority of the County of San Bernardino provides Section 8 rental assistance to extremely low- and very low -income households located within the City limits. The Section 8 program gives priority to households that are at risk of becoming homeless or currently residing in inadequate housing.

631

City of Fontana 2025-2026 CAPER 27
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-60 - ESG 91.520(g) (ESG Recipients only)
ESG Supplement to the CAPER in e-snaps
For Paperwork Reduction Act

1. Recipient Information—All Recipients Complete
Basic Grant Information
Recipient Name FONTANA
Organizational DUNS Number 058728630
EIN/TIN Number 956004770
Identify the Field Office LOS ANGELES
Identify CoC(s) in which the recipient
or subrecipient(s) will provide ESG
assistance
San Bernardino City & County CoC

ESG Contact Name
Prefix Mrs.

First Name Valerie
Middle Name
Last Name Gonzales
Suffix N/A
Title Housing Manager

ESG Contact Address
Street Address 1 8353 Sierra Ave.

Street Address 2 N/A
City Fontana
State CA
ZIP Code 92335
Phone Number (909) 350-6625
Extension N/A
Fax Number
Email Address [email protected]

ESG Secondary Contact
Prefix N/A
First Name N/A
Last Name N/A
Suffix N/A
Title N/A
Phone Number N/A
Extension N/A
Email Address N/A

2. Reporting Period—All Recipients Complete
Program Year Start Date 07/01/2025
632

City of Fontana 2025-2026 CAPER 28
OMB Control No: 2506-0117 (exp. 07/31/2015)
Program Year End Date 06/30/2026

633

City of Fontana 2025-2026 CAPER 29
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-65 - Persons Assisted

4. Persons Served
4a. Complete for Homelessness Prevention Activities
Number of Persons in
Households
Total
Adults 0
Children 0
Don't Know/Refused/Other 0
Missing Information 0
Total 0
Table 15 – Household Information for Homeless Prevention Activities

4b. Complete for Rapid Re-Housing Activities
Number of Persons in
Households
Total
Adults 0
Children 0
Don't Know/Refused/Other 0
Missing Information 0
Total 0
Table 16 – Household Information for Rapid Re-Housing Activities

4c. Complete for Shelter
Number of Persons in
Households
Total
Adults 13
Children 2
Don't Know/Refused/Other 0
Missing Information 0
Total 15
Table 17 – Shelter Information
634

City of Fontana 2025-2026 CAPER 30
OMB Control No: 2506-0117 (exp. 07/31/2015)

4d. Street Outreach

Table 18 – Household Information for Street Outreach

4e. Totals for all Persons Served with ESG
Number of Persons in
Households
Total
Adults 13
Children 2
Don't Know/Refused/Other 0
Missing Information 0
Total 15
Table 19 – Household Information for Persons Served with ESG

5. Gender—Complete for All Activities
Total
Male 6
Female 9
Transgender 0
Don't Know/Refused/Other 0
Missing Information 0
Total 15
Table 20 – Gender Information

Number of Persons in
Households
Total
Adults 0
Children 0
Don't Know/Refused/Other 0
Missing Information 0
Total 0
635

City of Fontana 2025-2026 CAPER 31
OMB Control No: 2506-0117 (exp. 07/31/2015)

6. Age—Complete for All Activities

Table 21 – Age Information

7. Special Populations Served—Complete for All Activities Number of Persons in Households ESG
Subpopulation Total Total
Persons
Served –
Prevention
Total
Persons
Served –
RRH
Total
Persons
Served in
Emergency
Shelters
Veterans 0 0 0 0
Victims of
Domestic Violence 2 0 0 2
Elderly
HIV/AIDS 0 0 0 0
Chronically
Homeless 6 0 0 6
Persons with Disabilities:

Severely
Mentally Ill 5 0 0 5
Chronic
Substance Abuse 3 0 0 3
Other Disability 0 0 0 0
Total
(Unduplicated if
possible) 16 0 0 16
Table 22 – Special Population Served
Total
Under 18 2
18-24 1
25 and over 12
Don't Know/Refused/Other 0
Missing Information 0
Total 15
636

City of Fontana 2025-2026 CAPER 32
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-70 – ESG 91.520(g) - Assistance Provided and Outcomes

8. Shelter Utilization
Number of New Units – Rehabbed N/A
Number of New Units – Conversion N/A
Total Number of bed - nights available N/A
Total Number of bed - nights provided N/A
Capacity Utilization N/A
Table 23 – Shelter Capacity

9. Project Outcomes Data measured under the performance standards developed in consultation with the CoC(s)
In FY2021, the City acquired a property to serve as an emergency shelter. It began operating in FY2023.

637

City of Fontana 2025-2026 CAPER 33
OMB Control No: 2506-0117 (exp. 07/31/2015)
CR-75 – Expenditures

11. Expenditures
11a. ESG Expenditures for Homelessness Prevention*
Dollar Amount of Expenditures in Program
Year
2023 2024 2025
Expenditures for Rental Assistance 110,192 68,883 0
Expenditures for Housing Relocation and
Stabilization Services - Financial
Assistance
1,841 0 0
Expenditures for Housing Relocation &
Stabilization Services - Services 34,195 32,002 0
Expenditures for Homeless Prevention
under Emergency Shelter Grants Program 0 0 0
Subtotal Homelessness Prevention 146,228 100,885 0
Table 24 – ESG Expenditures for Homelessness Prevention

11b. ESG Expenditures for Rapid Re-Housing*
Dollar Amount of Expenditures in Program
Year
2023 2024 2025
Expenditures for Rental Assistance 7,104 6,450 0
Expenditures for Housing Relocation and
Stabilization Services - Financial
Assistance
2,600 0 0
Expenditures for Housing Relocation &
Stabilization Services - Services 6,277 3,550 0
Expenditures for Homeless Assistance
under Emergency Shelter Grants Program 0 0 0
Subtotal Rapid Re-Housing 15,981 10,000 0
Table 25 – ESG Expenditures for Rapid Re-Housing

638

City of Fontana 2025-2026 CAPER 34
OMB Control No: 2506-0117 (exp. 07/31/2015)
11c. ESG Expenditures for Emergency Shelter
Dollar Amount of Expenditures in Program
Year
2023 2024 2025
Essential Services 0 0 12,600
Operations 0 0 0
Renovation 0 0 0
Major Rehab 0 0 0
Conversion 0 0 0
Subtotal $0 $0 $12,600
Table 26 – ESG Expenditures for Emergency Shelter

11d. Other Grant Expenditures
Dollar Amount of Expenditures in Program
Year
2023 2024 2025
Street Outreach 0 50,000 0
HMIS 0 0 0
Administration 13,671 13,044 0
Table 27 - Other Grant Expenditures

11e. Total ESG Grant Funds

Table 28 - Total ESG Funds Expended
11f. Match Source
2023 2024 2025
Other Non-ESG HUD Funds 0 0 0
Other Federal Funds 0 0 0
State Government 13,690 13,044 12,300
Local Government 0 0 0
Private Funds 162,189 160,886 0
Other: Employee Salaries/Volunteer
Hours
0 0 0
Fees 0 0 0
Program Income 0 0 0
Total Match Amount $175,879 $173,930 $12,300
Table 29 - Other Funds Expended on Eligible ESG Activities

11g. Total
Total ESG Funds
Expended
2023 2024 2025
$175,880 $173,930 $12,600
639

City of Fontana 2025-2026 CAPER 35
OMB Control No: 2506-0117 (exp. 07/31/2015)
Total Amount of
Funds Expended on
ESG Activities
2023 2024 2025
Total $351,759 $347,859 $24,600
Table 30 - Total Amount of Funds Expended on ESG Activities

640

City of Fontana 2025-2026 CAPER 36
OMB Control No: 2506-0117 (exp. 07/31/2015)
City of Fontana

2025-2026

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2025, THROUGH JUNE 30, 2026

641

City of Fontana 2025-2026 CAPER 37
OMB Control No: 2506-0117 (exp. 07/31/2015)
City of Fontana

2025-2026

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2025, THROUGH JUNE 30, 2026

APPENDIX A
IDIS Reports

CDBG Financial Summary – PR26

642

City of Fontana

2025-2026

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2025, THROUGH JUNE 30, 2026

APPENDIX B
IDIS Reports

CDBG Financial Summary – PR26 CV

643

City of Fontana

2025-2026

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2025, THROUGH JUNE 30, 2026

APPENDIX C
ESG SAGE Report

644

City of Fontana

2025-2026

CONSOLIDATED ANNUAL PERFORMANCE AND EVALUATION REPORT
JULY 1, 2025, THROUGH JUNE 30, 2026

APPENDIX D
Public Notices
Public Comments
645

SUMMARY OF CITIZEN PARTICIPATION COMMENTS

In compliance with the City’s approved Citizen Participation Plan and implementing regulation 24 CFR 91.105, a public notice was published (see attached proof of publication) to solicit public comments from interested citizens regarding the draft 2025-2026 CAPER. The draft CAPER was made available to the general public for a period of 15 days in order to provide an opportunity for the public to review the document.

The following is a summary of Citizen Participation comments: No public comments were received.

646
City of Fontana
Action Report
City Council Meeting
8437 Sierra Avenue
Fontana, CA 92335
File #: 26-1214 Agenda Date: 9/8/2026
Agenda #: C. Category: Public Hearing
FROM:

Finance
SUBJECT:

Complete Change Proceedings to Amend the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge).

RECOMMENDATION:

1. Conduct a Public Hearing regarding Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge).

2. Adopt Resolution No. 2026-086, of the City Council of the City of Fontana, California, calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge).

3. Direct the City Clerk to Conduct a Special Election and take other actions related to such Special Election of the qualified electors of City of Fontana Community Facilities District No. 117 (Southridge).

4. Adopt Resolution No. 2026-087, of the City Council of the City of Fontana, California, Declaring Results of a Special Election regarding Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge).

5. Adopt Resolution No. 2026-088, of the City Council of the City of Fontana, California, determining that Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge) are Lawfully Authorized and Directing Recording of an Amendment to the Notice of Special Tax Lien.

6. Conduct a first reading of a Special Tax Ordinance No. 1997 of the City Council of the City of Fontana, California, Amending and Restating Ordinance No. 1986 Levying a Special Tax within City of Fontana Community Facilities District No. 117 (Southridge).

COUNCIL GOALS:
· Practice sound fiscal management by developing long-term funding and debt management plans.

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647
File #: 26-1214 Agenda Date: 9/8/2026
Agenda #: C. Category: Public Hearing
DISCUSSION:

On April 14, 2026, the City completed formation of Community Facilities District No. 117 (Southridge) (the CFD) for the purpose of financing certain public facilities and services.

Such costs relate to a project under development by KB Home Cal Management Services LLC (the Landowner), which consists of approximately 32.23 gross (20.01 net taxable acres) (255 taxable residential lots), and is located on the east side of Live Oak Avenue and south of Village Drive.

Formation proceedings included the adoption and Landowner approval of a Rate and Method of Apportionment of Special Tax for the CFD (the Original RMA).

On July 14, 2026, the City Council adopted Resolution 2026-075, a Resolution of Consideration of Proposed Changes to the Original RMA, which called for a Public Hearing and commenced proceedings to implement a narrow, technical amendment to the Original RMA. The sole purpose of the amendment, as reflected in that Resolution and the proposed Amended Rate and Method of Apportionment of Special Tax for the CFD (the Amended RMA), is to back-date an initial building permit date used in the Original RMA originally stated as January 1, 2026. This back-dating is necessary to bring within the defined term "Developed Property" - and thereby subject to the Special Tax - the nine (9) model homes for which building permits were issued shortly prior to January 1, 2026. For reference, the amendment substitutes January 1, 2025, as that initial building permit date.

The set of actions before Council are required to implement the proposed changes to the RMA, including:
- Conduct a Public Hearing with regard to such changes; - Adopt a Resolution Calling for a Special Election, subject to no protest with regard thereto, directing the City Clerk to conduct such Special Election and take certain actions related thereto;
- Adopt a Resolution declaring the results of the Special Election; - Adopt a Resolution of Change determining the proposed changes are lawfully authorized and directing the recordation of an Amended Notice of Special Tax Lien of the CFD; and - Conduct a first reading of a Special Tax Ordinance amending and restating the original adopted Special Tax Ordinance of the CFD.

The Landowner has been shown to be the only registered voter over the subject property, and the vote of the Special Election referenced above will be conducted as a landowner election in which the Landowner is entitled to one vote for each acre or portion of an acre it owns within the CFD.

Prior to the commencement of these change proceedings, the City Clerk with report on and acknowledge receipt of all items submitted in furtherance of the proposed changes to the Rate and Method of Apportionment of the Special Tax for the CFD, including: (a) the Consent and Waiver executed by the Landowner, as the sole qualified landowner-elector of the CFD, consenting to the conduct of the Special Election and waiving all applicable statutory time limits, notice requirements, and procedural requirements under the Mello-Roos Community Facilities Act of 1982; (b) any written protests, if any, filed by interested persons prior to the opening of the Public Hearing; (c) receipt of the ballots for the Special Election on the proposition to change the rate and method of apportionment of the Special Tax; and (d) the Canvass and Statement of Results of the Special City of Fontana Printed on 9/3/2026Page 2 of 3
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File #: 26-1214 Agenda Date: 9/8/2026
Agenda #: C. Category: Public Hearing
apportionment of the Special Tax; and (d) the Canvass and Statement of Results of the Special Election. The City Clerk will report on or otherwise acknowledge that no written protests were filed and that the results of the Special Election have been duly canvassed and certified.

The recommended action complies with the City Council's debt management objectives.

FISCAL IMPACT:

There are no costs to the City. The developer has deposited funds with the City to pay for legal and consultant costs for the formation of the CFD and to implement this amendment.

Annual bond debt service and maintenance costs will be paid from special taxes levied on the future homeowners within the CFD.

MOTION:

Approve staff recommendation.

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RESOLUTION NO. 2026-086

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

CALIFORNIA, CALLING A SPECIAL ELECTION FOR PROPOSED

CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF

THE EXISTING SPECIAL TAX OF CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)
WHEREAS, the City Council (the “City Council”) of the City of Fontana (the “City”) has previously established City of Fontana Community Facilities District No. 1 17 (Southridge) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, on July 14, 2026, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, of Consideration to Change the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge) ” (the “Resolution of Consideration”) proposing changes to the rate and me thod of apportionment of the special tax (the “Special Tax ”) levied within the Community Facilities District so as to revise the initial permitting date used in the definition of “Developed Property” and setting the date for a public hearing to be held on such proposed changes; WHEREAS, pursuant to the Resolution of Consideration, notice of said public hearing was published in the Fontana Herald News, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing;
WHEREAS, at the hearing, the testimony of all persons for or against the proposed changes to the rate and method of apportionment of the Special Tax was heard; WHEREAS, written protests against the proposed changes to the rate and method of apportionment of the Special Tax were not made or filed at or before said hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the Community Facilities District, or the owners of one -half or more of the area of land in the territory included in the Community Facilities District and not exempt from the Special Tax;
WHEREAS, pursuant to the provisions of the Resol ution of Consideration, the proposition to change the rate and method of apportionment of the Special Tax is to be submitted to the qualified electors of the Community Facilities District as required by the Act;
WHEREAS, the City Council desires to designa te the City Clerk of the City (the “City Clerk”) as the election official for the special election provided for herein; 650
Resolution No. 2026-086
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WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Bernardino indi cating that no persons were registered to vote within the territory included in the Community Facilities District as of August 13, 2026, and, accordingly, that 12 or more persons have not been registered to vote within the territory included in the Communi ty Facilities District for each of the 90 days preceding the close of said public hearing;
WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, consenting to the holding of said special election on September 8, 2026 and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and
WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on September 8, 2026;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. The proposed changes to the rate and method of apportionment of the Special Tax are modifications that revise the initial permitting date used in t he definition of “Developed Property. ” The proposed changes are reflected in the City of Fontana Community Facilities District No. 117 (Southridge) Amended Rate and Method of Apportionment of Special Tax (the “Amended Rate and Method ”) attached hereto as Exhibit A, which is by this reference incorporated herein.

Section 3. The proposed changes to the rate and method of apportionment of the Special Tax have not been precluded by majority protest pursuant to Section 5333 7 of the Act.

Section 4. Pursuant to Section 53338 of the Act, the proposition to change the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the Amended Rate and Method, shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided herein.

Section 5. The City Clerk is hereby designated as the official to conduct said election.

Section 6. The City Council hereby finds and determ ines that no persons were registered to vote within the territory included in the Community Facilities District as of August 13, 2026, and that 12 or more persons have not been registered to vote within the territory included in the Community Facilities Di strict for each of the 90 days preceding the close of the public hearing heretofore held by the City Council on the proposed 651
Resolution No. 2026-086
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changes to the rate and method of apportionment of the Special Tax. Accordingly, pursuant to Section 53326 of the Act, the vote sh all be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax.

Section 7. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, (b) to the holding of said election on September 8, 2026, and (c) to the waiver of any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding s aid election on September 8, 2026.

Section 8. The City Council hereby calls a special election to submit to the qualified electors of the Community Facilities District the proposition to change the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property, ” as reflected in the Amended Rate and Method, which election shall be held at 8437 Sierra Avenue , Fontana, California, on September 8, 2026. The City Council has caused to be provided to the City Clerk, as the official to conduct said election, the Resolution of Consideration, a certified map of sufficient scale and clarity to show the boundaries of the Community Facilities District, and a sufficient description to allow the City C lerk to determine the boundaries of the Community Facilities District.

The voted ballots shall be returned to the City Clerk not later than 2:00 p.m. on September 8, 2026; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

Section 9. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand -delivered ballots pursuant to Section 4000 et seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, will govern the election.

Section 10. The form of the ballot for said election is attached hereto as Exhibit B and by this reference incorporated herein, and such form of ballot is hereby approved.

The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective landowner to which it pertains.

Each ballot shall be accompanied by all supplies and written instructions necessary for the use and return of the ballot. The identification envelope for return of the ballot shall be enclosed with the ballot, shall have the return postage prepaid, and shall contain (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or the authorized representative of 652
Resolution No. 2026-086
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the landowner entitled to vote and is the person whose name appears on the identification envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration described in clause (b), above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.

Analysis and arguments with respect to the ballot proposition are hereby waived, as provided in Section 53327 of the Act.

Section 11. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at City Hall, 16860 Valencia Avenue, Fontana, California, to and including 2:00 p.m. on September 8, 2026, whether said ballots be personally delivered or received by mail. The City Clerk shall have available ballots that may be marked at said location on the election day by said qualified electors.

Section 12. All actions heretofore taken by the officers, employees and agents of the City with respect to the proposed ch anges to the rate and method of apportionment of the Special Tax, or in connection with or related to any of the documents referred to herein, are hereby approved, confirmed and ratified.

Section 13. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 14. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Fontana shall certify as to the adoption of this Resolution.

APPROVED AND ADOPTED this 8th day of September, 2026.

READ AND APPROVED AS TO LEGAL FORM:

__________________________________
City Attorney

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Resolution No. 2026-086
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I, Germaine 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 at a regular meeting held on the 8th day o f September, 2026, 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

654

A-1

EXHIBIT A

CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

655

B-1

EXHIBIT B

OFFICIAL BALLOT

CITY OF FONTANA
September 8, 2026

SPECIAL ELECTION
This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is ____.

INSTRUCTIONS TO VOTERS:

To vote on the measure, mark a cross (+ or X) in the voting square after the word “YES” or after the word “NO”. All distinguishing marks or erasures are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Fontana and obtain another.

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 117
(SOUTHRIDGE)
MEASURE SUBMITTED TO VOTE OF VOTERS:

Shall the rate and method of apportionment of the special tax levied within City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District ”) be changed so as to revise the initial permitting date used in the definition of “Developed Property, ” all as specified in the Resolution entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the
Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge), ” adopted by the City Council of the City of Fontana on September 8, 2026?

Yes:

No:

656

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RESOLUTION NO. 2026-087

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

CALIFORNIA, DECLARING RESULTS OF A SPECIAL ELECTION

REGARDING PROPOSED CHANGES TO THE RATE AND METHOD OF

APPORTIONMENT OF THE EXISTING SPECIAL TAX OF CITY OF
FONTANA COMMUNITY FACILITIES DISTRICT NO. 117
(SOUTHRIDGE)
WHEREAS, the City Council (the “City Council”) of the City of Fontana (the “City”) has previously established City of Fontana Community Facilit ies District No. 117 (Southridge) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, on September 8, 2026, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge) ” (the “Resolution Calling Election”), calling for a special election of the qualified electors within the Community Facilities District to submit the proposition to change the rate and method of apportionment of the special tax (the “Special Tax ”) levied within the Community Facilities Di strict so as to revise the initial permitting date used in the definition of “Developed Property”;
WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on September 8, 2026; and WHEREAS, the City Clerk of the City (the “City Clerk”) has certified the canvass of the returns of the election and has filed a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

Section 2. The City Council has received, reviewed and hereby accepts the Canvass.

Section 3. The City Council hereby finds and declares that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors in accordance with Section 53338 of the Act.

Section 4. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem 657
Resolution No. 2026-087
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necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 5. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Fontana shall certify as to the adoption of this Resolution.

APPROVED AND ADOPTED this 8th day of September, 2026.

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 Resolution is the actual Resolution duly and regularly adopted by the City Council at a regular meeting held on the 8th day of September, 2026, 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

658

A-1

EXHIBIT A

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 117
(SOUTHRIDGE)

CANVASS AND STATEMENT OF RESULTS OF ELECTION
I hereby certify that on September 8, 2026, I canvassed the returns of the spe cial election held on September 8, 2026, for the City of Fontana Community Facilities District No. 117 (Southridge), that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the proposit ion are as follows and that the totals as shown for and against the proposition are true and correct:

Qualified
Landowner
Votes

Votes
Cast

YES

NO
City of Fontana Community
Facilities District No. 117
(Southridge) Special Election,
September 8, 2026

33 ___

___

___

MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the rate and method of apportionment of the special tax levied within City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) be changed so as to revise the initial permitting date used in the definition of “Developed Property,” all as specified in the Resolution entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge),” adopted by the City Council of the City of Fontana on September 8, 2026?
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 8th day of September, 2026.

By:

Germaine Key, City Clerk
659
1 of 3

RESOLUTION NO. 2026-088

A RESOLUTION OF CHANGE OF THE CITY COUNCIL OF THE CITY OF

FONTANA, CALIFORNIA, DETERMINING THAT CHANGES TO THE

RATE AND METHOD OF APPORTIONMENT OF THE EXISTING

SPECIAL TAX OF CITY OF FONTANA COMMUNITY FACILITIES
DISTRICT NO. 117 (SOUTHRIDGE) ARE LAWFULLY AUTHORIZED

AND DIRECTING RECORDING OF AN AMENDMENT TO NOTICE OF

SPECIAL TAX LIEN
WHEREAS, the City Council (the “City Council”) of the City of Fontana (the “City”) previously established City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, on September 8, 2026, the City Council, pursuant to the Act, adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge)” (the “Resolution Calling Election”), calling a special election of the qualified electors within the Community Facilities District and submitting to such qualified electors the proposition to change the rate and method of apportionment of the special tax (the “Special Tax”) levied within the Community Facilities District so as to revise the initial permitting date used in the definition of “Developed Property”; WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on September 8, 2026; WHEREAS, on September 8, 2026, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, Declaring Results of a Special Election Regarding Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge)” (the “Resolution Declaring Results”), accepting the canvass of the returns of the election and finding and declaring that the ballot proposi tion submitted to the qualified electors had been passed and approved; and WHEREAS, the changes to the rate and method of apportionment of the Special Tax, as reflected in the City of Fontana Community Facilities District No. 117 (Southridge) Amended Rate and Method of Apportionment of Special Tax (the “Amended Rate and Method”), have been approved by the qualified electors of the Community Facilities District;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana, California, as follows:

Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.
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Resolution No. 2026-088

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Section 2. The City Council hereby finds and determines that the changes to the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the Amended Rate and Method, are lawfully authorized in accordance with the Act including, without limitation, the required two-thirds of the votes cast on the proposition are in favor of the proposed changes in accordance with Section 53338(b) of the Act.

Section 3. The City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of San Bernardino an amendment to the notice of special tax lien for the Community Facilities District in accordance with Section 3117.5 of the California Streets and Highways Code.

Section 4. All actions heretofore taken by the officers, employees and agents of the City with respect to the changes to the rate and method of apportionment of the Special Tax, or in connection with or related to any of the documents referred to herein, are hereby approved, confirmed and ratified.

Section 5. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

Section 6. This Resolution shall take effect immediately upon its adoption.

Section 7. The City Clerk shall certify as to the adoption of this Resolution.

APPROVED AND ADOPTED this 8th day of September, 2026.

READ AND APPROVED AS TO LEGAL FORM:

City Attorney

661
Resolution No. 2026-088

3 of 3

I, Germaine 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 at a regular meeting held on the 8th day of September, 2026, 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

662

4161-7067-6586.2

CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

CONCURRENCE OF ELECTION OFFICIAL
I, Germaine Key, City Clerk of the City of Fontana , California (the “City”), hereby certify as follows:

1. that I am the election official responsible for conducting special elections in the City; and

2. that, pursuant to Section 53326(a) of the Mello -Roos Community Facilities Act of 1982 (the “Act”), I do hereby concur to (i) the holding of a special election on September 8, 2026, for the purpose of submitting to the qualified electors of City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) the proposition to change the rate and method of appo rtionment of the special tax levied within the Community Facilities District so as to revise the initial permitting date used in the definition of “Developed Property,” as provided in the resolution proposed to be adopted by the City Council of the City on September 8, 2026, entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge),” and (ii) with respect to such special election, the waiving by the qualified electors of the Community Facilities District of any time limit specified by Section 53326 of the Act.

Dated: September 8, 2026

Germaine Key, City Clerk
663

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ORDINANCE NO. 1997

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FONTANA, CALIFORNIA, AMENDING AND RESTATING ORDINANCE NO. 1986

LEVYING A SPECIAL TAX WITHIN CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)
WHEREAS, the City Council (the “City Council”) of the City of Fontana (the “City”) previously established City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, the qualified electors of the Community Facilities District authorized the levy of a special tax (the “Special Tax”) within the Community Facilities District to pay, in whole or in part, the cost of providing certain facilities (the “Facilities”) and certain services (the “Services”) and incidental expenses pursuant to the Act referenced in the proposition submitted to such qualified electors;
WHEREAS, pursuant to Section 53340 of the Act, the City Council, on April 28, 2026, adopted Ordinance No. 1986, entitled “An Ordinance of the City Council of the City of Fontana, California Levying a Special Tax within City of Fontana Community Facilities District No. 117 (Southridge)” (the “Levy Ordinance”), levying the Special Tax at the rate and in accordance with the method of apportionment referenced therein (the “Original Rate and Method”);
WHEREAS, on July 14, 2026, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, of Consideration to Change the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 11 7 (Southridge) ” proposing changes to the Original Rate and Method so as to revise the initial permitting date used in the definition of “Developed Property”;
WHEREAS, on September 8, 2026, the City Council, pursuant to the Act, adopted a resolution entitled “A Resolution of the City Council of the City of Fontana, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Fontana Community Facilities District No. 117 (Southridge)” (the “Resolution Calling Election ”) calling for a special election of the qualified electors within the Community Facilities District and submitting to such qualified electors the proposition to change the Original Rate and Method so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the City of Fontana Community Facilities District No. 117 (Southridge) Amended Rate and Method of Apportionment of Special Tax (the “Amended Rate and Method”) attached thereto and incorporated therein;
WHEREAS, on September 8, 2026, the City Council adopted a resolution entitled “A Resolution of Change of the City Council of the City of Fontana, California, Determining That Changes to the Rate and Method of Apportionment of the Existing Special Tax of 664
Ordinance No. 1997
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City of Fontana Community Facilities District No. 117 (Southridge) Are Lawfully Authorized and Directing Recording of an Amendment to Notice of Special Tax Lien, ” declaring that the ballot proposition submitted to the qualif ied electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors and finding and determining that the changes to the Original Rate and Method, as reflected in the Amended Rate and M ethod, were lawfully authorized; and
WHEREAS, this Ordinance amends and restates the Levy Ordinance in order to reflect such changes;

THE CITY COUNCIL OF THE CITY OF FONTANA, CALIFORNIA DOES ORDAIN AS FOLLOWS:

Section 1. The Levy Ordinance is hereby amended and restated to read in full as set forth herein.

Section 2. The City Council hereby authorizes and levies the Special Tax within the Community Facilities District pursuant to Sections 53328 and 53340 of the Act, at the rate and in accordance with the method of apportionment set forth in the Amended Rate and Method. The Special Tax is hereby levied in each fiscal year until the last fiscal year in which the Special Tax is authorized to be levied pursuant to the Amended Rate and Method.

Section 3. The City Council may, pursuant to subdivision (b) of Section 53340 of the Act, provide, by resolution, for the levy of the Special Tax in the current tax year or in future tax years at the same rate or at a lower rate than the rate provided by this Ordinance. In no event shall the Special Tax be levied on any parcel within the Community Facilities District in excess of the maximum tax specified therefor in the Amended Rate and Method.

Section 4. The Special Tax shall be levied on all of the parcels in the Community Facilities District, unless exempted by law or by the Amended Rate and Method.

Section 5. The proceeds of the Special Tax shall only be used to pay, in whole or in part, the cost of providing the Facilities and Services and incidental expenses pursuant to the Act.

Section 6. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in the case of delinquency as is provided for ad valorem taxes or in such other manner as t he City Council shall determine, including direct billing of the affected property owners.

Section 7. If for any reason any portion of this Ordinance is found to be invalid, or if the Special Tax is found inapplicable to any particular parcel within the Community Facilities District, by a court of competent jurisdiction, the balance of this Ordinance and 665
Ordinance No. 1997
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the application of the Special Tax to the remaining parcels within the Community Facilities District shall not be affected.

Section 8. This Ordinance shall take effect and shall be in force 30 days after the date of its adoption and prior to the expiration of 15 days from the passage thereof shall be published at least once in The Fontana Herald News , a newspaper of general circulation, printed and published in the City of Fontana, State of California, together with the names of the City Council members voting for and against the same.

APPROVED AND ADOPTED this ___ day of ________ 2026.

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 8th day of September , 2026, and was finally passed and adopted not less than five days thereafter on the ___ day of __________, 2026, 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
666
4149-1205-7706.2

RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:

City Clerk
City of Fontana
16860 Valencia Avenue
Fontana, California 92335

AMENDMENT NO. 1
TO

NOTICE OF SPECIAL TAX LIEN

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 117
(SOUTHRIDGE)
Pursuant to the requirements of Sections 3114.5 and Section 3117.5 of the California Streets and Highways Code and Section 53328.3 of the Mello-Roos Community Facilities Act of 1982 (the “ Act”), a Notice of Special Tax Lien with respect to City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) was recorded in the Office of the Assessor-Recorder-County Clerk of the County of San Bernardino, on April 17, 2026, as Document No. 2026-0099686.

Proceedings conducted pursuant to the Act have resulted in changes to the rate and method of apportionment of the special tax (the “ Special Tax”) levied within the Community Facilities District. Such changes to the rate and method of apportionment revise the initial permitting date used in the definition of “ Developed Property,” as reflected in the City of Fontana Community Facilities District No. 117 (Southridge) Amended Rate and Method of Apportionment of Special Tax (the “ Amended Rate and Method ”) attached hereto as Exhibit A, which is by this reference incorporated herein.

Notice is further given that upon the recording of this notice in the office of the County Recorder of the County of San Bernardino, the obligation to pay the special tax levy shall become a lien upon all nonexempt real property within the Community Facilities District in accordance with Section 3115.5 of the California Streets and Highways Code.

The name of the record owner of the parcel(s) of real property included in the territory of the Community Facilities District, and not exempt from the Special Tax, and the assessor’s parcel number(s) of such parcel(s), are as follows:

Property Owner: KB HOME Cal Management Services LLC
APN: 0237-411-35

For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the 667
4149-1205-7706.2

Chief Financial Officer, Finance Department, City of Fontana, 16860 Valencia Avenue, Fontana, California 92335, (909) 350-7679.

Dated: September ___, 2026

By:

Germaine Key, City Clerk

668

A-1
4149-1205-7706.2

EXHIBIT A

CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

669

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 1

AMENDED RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

CITY OF FONTANA, COUNTY OF SAN BERNARDINO

STATE OF CALIFONIA

A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Fontana Community Facilities District No . 117 (Southridge) ("CFD No. 117") and collected each Fiscal Year commencing in Fiscal Yea r 2026-2027, in an amount determined by the City Council of the City of Fontana, through the application of the Amended Rate and Method of Apportionment as described below. All of the real property in CFD No. 117, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre" or "Acreage" means the land area expressed in acres of an Asses sor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County map or the land area calculated to the reaso nable satisfaction of the CFD Administrator using the boundaries set forth on such map or plan. For residential dwelling units within a condominium plan, the Acres applicable to each resi dential dwelling unit shall be determined by dividing (i) the Acres of the underlying lot or par cel on which the residential dwelling unit is constructed or to be constructed, by (ii) the total number of residential dwelling units constructed or to be constructed on such lot or parcel. The sq uare footage of an Assessor’s Parcel is equal to the Acreage of such parcel multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 (commencing with Section 53311) of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 117, including but not limited to: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecti ng the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxe s to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of t he duties required of it under the Indenture; the costs to the City, CFD No. 117 or any designee ther eof of complying with arbitrage rebate requirements with respect to the Special Tax and CFD No. 117 Bonds; the costs to the City, CFD No. 117 or any designee thereof of complying with disclosure requirements of the City, CFD No. 117 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax dis closure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 117, or any designee thereof related to the reduction of the Assigned Facilities Special Tax and Backup Facilities Special Tax in accordance with Section C.1 herein; the costs of the City, CFD No. 117 or any designee thereof related to an appeal of the Special Tax; and the Ci ty’s annual administration fees and third party expenses related to CFD No. 117 Bonds. Administrat ive Expenses shall also include amounts estimated or advanced by the City or CFD No. 117 fo r any other administrative purposes of CFD No. 117, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. 670

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 2 "Amended Rate and Method of Apportionment" means this Amended Rate and Method of Apportionment for CFD No. 117.
"Assessor" means the Assessor of the County.
"Assessor's Parcel" means a lot or parcel to which an Assessor’s parce l number is assigned as determined from an Assessor’s Parcel Map or the applicable assessment roll. "Assessor's Parcel Map" means an official map of the Assessor designating parcels by Assessor’s Parcel number.
"Assigned Facilities Special Tax" means the applicable Facilities Special Tax for (i) Residential Property as determined in accordance with Section C .1.a.(2) herein, and (ii) Non-Residential Property as determined in accordance with Section C.1.a.(3) herein. "Authorized Facilities" means those facilities eligible to be funded by CFD No. 117. "Authorized Services" means those services eligible to be funded by CFD No. 117 in accordance with the Act, namely, fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible pr operty with an estimated useful life of five or more years that is owned by the City.
"Backup Facilities Special Tax" means the Facilities Special Tax applicable to eac h Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.a.(4) herein. "Buildout" means, for CFD No. 117, that all expected building permits for residential dwelling units and/or non-residential development to be constructed within CFD No. 117 have been issued, as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof , responsible for determining the Special Tax Requirement for Facilit ies and the Special Tax Requirement for Services, providing for the levy and collection of the Special Taxes, and performing other duties as set forth herein.
"CFD No. 117" means City of Fontana Community Facilities District No. 117 (Southridge). "CFD No. 117 Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 11 7 and secured by the Facilities Special Tax levy on property within the boundaries of CFD No. 117 under the Act. "City" means the City of Fontana, California.
"Contractual Impositions" means (a) a voluntary contractual assessment established and levied on an Assessor’s Parcel pursuant to Chapter 29 of P art 3 of Division 7 of the California Streets and Highways Code (commencing with Section 5898.10 et seq. ), as amended from time to time, (b) a special tax established and levied on an Assessor’s Parcel pursuant to Section 53328.1 of the California Government Code and related provisions of the Act, as amended from time to time, and (c) any other fee, charge, tax or assessment establ ished and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof. "Council" means the City Council of the City acting as the legislative body of CFD No. 117. "County" means the County of San Bernardino.
671

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 3 "Developed Property" means, for each Fiscal Year, (i) with respect to the Facilities Special Tax, all Taxable Property, exclusive of Taxable Public P roperty and Taxable Property Owner Association Property, for which a building permit for new construction, other than the construction of a garage, parking lot, or parking structure, was issued after January 1, 2025 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Facilities Special Taxes are being levied, and (ii) with respect to the Services Special Tax, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Associat ion Property, (a) for which the Final Residential Subdivision was recorded prior to the Fiscal Year for which the Services Special Taxes are being levied, or (b) for which a building permit has been issued with respect to Non-Residential Property on or before May 1 of the Fiscal Year prec eding the Fiscal Year for which the Services Special Taxes are being levied.
"Facilities Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within CFD No. 117 to fund the Special Tax Requirement for Facilities, as set forth in Section C.1 herein.
"Final Residential Subdivision" means a Final Subdivision that creates individual lots for which building permits may be issued for residential dwel ling units without further subdivision of such property.
"Final Subdivision" means (i) a subdivision of property by recordation of a final map, parcel map, or lot line adjustment approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq. ) that creates individual lots or parcels for which building permits may be issued, or (ii) for condominiums, a final map approved by the City and a condominium plan recorded pursuant to California Ci vil Code Section 4285 that creates an individual lot(s) for which a building permit(s) ma y be issued without further subdivision. The term "Final Subdivision" shall not include any Asse ssor’s Parcel Map or subdivision map or portion thereof that does not create individual lot s for which a building permit may be issued, including Assessor’s Parcels that are designated as remainder parcels. Notwithstanding the above, a condominium plan for which one or more building p ermits have been issued, but no individual lots have been created for such building permits, s hall be considered a Final Subdivision, and the portion of the condominium plan for which build ing permits have been issued shall be defined as Developed Property.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which CFD No. 117 Bonds are issued, as modified, amended and/or supplemented from time to time.
"Land Use Class" means any of the classes listed in Table 1 or Table 2 herein. "Lower Income Households Welfare Exemption Property " means, for each Fiscal Year, an Assessor’s Parcel within the boundaries of CFD No. 117 that is subject to a welfare exemption under subdivision (g) of Section 214 of the Califor nia Revenue and Taxation Code (or any successor statute), as indicated in the County’s as sessment roll finalized as of the last preceding January 1.
"Maximum Facilities Special Tax" means the maximum Facilities Special Tax, determin ed in accordance with Section C.1 herein, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
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Community Facilities District No. 117 (Southridge) Page 4 "Maximum Services Special Tax" means the maximum Services Special Tax, determined in accordance with Section C.2 herein, that can be levied in any Fiscal Year on any Assessor’s Parcel of Developed Property.
"Minimum Sale Price" means the minimum price at which any parcel in a given Land Use Class has sold or is expected to be sold in a normal mark eting environment and shall not include prices for such parcels that are sold at a discount to exp ected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class. "Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City perm itting the construction of one or more non- residential structures or facilities.
"Outstanding Bonds" means all CFD No. 117 Bonds which are outstanding under the Indenture. "Price Point Consultant" means any consultant or firm of such consultants selected by CFD No. 117 that (a) has substantial experience in performi ng price point studies for residential dwelling units within community facilities districts or othe rwise estimating or confirming pricing for residential dwelling units in community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relate s to the pricing of residential dwelling units in community facilities districts, (c) is in fact independent and not under the control of CFD No. 117 or the City, (d) does not have any substantial inte rest, direct or indirect, with or in (i) CFD No. 117, (ii) the City, (iii) any owner of real property in CFD No. 117, or (iv) any real property in CFD No. 117, and (e) is not connected with CFD No. 117 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 117 or the City. "Price Point Study" means a price point study or a letter updating a p revious price point study prepared by the Price Point Consultant pursuant to Section C herein. "Property Owner Association Property" means, for each Fiscal Year, (i) any property with in the boundaries of CFD No. 117 for which the owner o f record, as determined from the County’s assessment roll for the Fiscal Year in which the Special Tax is being levied, is a property owner’s association, including any master or sub-associatio n, or (ii) any property located in a Final Subdivision that was recorded as of the January 1 p receding the Fiscal Year in which the Special Tax is being levied and which, as determined from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street. Notwithstanding the foregoing, any property previously classified as Developed Property and sub sequently owned in fee or by easement, or dedicated to, a property owner association, includi ng any master or sub-association, shall remain classified as Developed Property.
"Proportionately" means that the ratio of the actual Facilities Speci al Tax levy to the Assigned Facilities Special Tax is equal for all Assessor’s Parcels of Developed Property, and that the ratio of the actual Services Special Tax levy to the Maxi mum Services Special Tax is equal for all Assessor’s Parcels of Developed Property. For Unde veloped Property, "Proportionately" means that the ratio of the actual Facilities Special Tax levy per Acre to the Maximum Facilities Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property. The term "Proportionately" shall similarly be applied to oth er categories of Taxable Property as listed in Section D herein.
"Public Property" means, for each Fiscal Year, any property within t he boundaries of CFD No. 117 that is (i) owned by, irrevocably offered or dedicated to the federal government, the State, the 673

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 5 County, the City, or any local government or other public agency, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or (ii) encumbered by a public utility easement making impractical its use for any purpose other than that set forth in the easement. "Residential Floor Area" means all of the square footage of living area wit hin the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area for an Assessor’s Parcel shall be as set forth in the building permit(s) issued for such Assessor’s Parcel and/or as set forth in the appropriate records kept by the Building and Safety Department of the City, or other applicable City department, as determined by the CFD Administrator. "Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City permitting the construction thereon of one or more residential dwelling units.
"Services Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Developed Property within CFD No. 117 to fund the Special Tax Requirement for Services, as set forth in Section C.2 herein.
"Special Tax" or "Special Taxes" means the Facilities Special Tax and/or Services Special Tax, as applicable.
"Special Tax Requirement for Facilities" means, for any Fiscal Year, that amount required, after taking into account available amounts held in the f unds and accounts under the Indenture, for the following items: (i) debt service on all Outstandin g Bonds due in the calendar year commencing in such Fiscal Year; (ii) periodic costs with respe ct to the CFD No. 117 Bonds, including but not limited to, costs of credit enhancement and federal rebate payments due in the calendar year commencing in such Fiscal Year; (iii) pay all or a portion of Administrative Expenses; (iv) any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) without duplicating any amounts described in clause (iv), a bove, reasonably anticipated Facilities Special Tax delinquencies based on the delinquency rate for the Facilities Special Tax in the previous Fiscal Year, as said levy for delinquencies shall be limited by the Act; and (vi) pay directly for the acquisition or construction of Authorized Facilitie s, provided that the inclusion of such amount does not increase the Facilities Special Tax levy beyond the first step in Section D.1 herein. "Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 117 to (i) pay directly for the Authorized Serv ices; (ii) pay Administrative Expenses not funded through the Special Tax Requirement for Faci lities as determined by the CFD Administrator; (iii) pay for reasonably anticipated Services Special Tax delinquencies based on the delinquency rate for the Services Special Tax levy in the previous Fiscal Year; less (iv) a credit for funds available to reduce the annual Services S pecial Tax levy, as determined by the CFD Administrator, so long as the amount required is not less than zero. "State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the bou ndaries of CFD No. 117 which are not exempt from the Special Tax pursuant to applicable law or Section E herein. "Taxable Property Owner Association Property" means all Assessor’s Parcels of Property Owner Association Property that are not exempt pursuant to Section E herein. 674

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Community Facilities District No. 117 (Southridge) Page 6 "Taxable Public Property" means all Assessor’s Parcels of Public Property th at are not exempt pursuant to Section E herein.
"Total Tax Burden" means, for a parcel of residential property within a Land Use Class, for the Fiscal Year in which Total Tax Burden is being calc ulated, the sum of (a) the Assigned Facilities Special Tax for such Fiscal Year, plus (b) the Maximum Services Special Tax for such Fiscal Year, plus (c) the ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental fees, charges (other than fees or charges for services such as sewer and trash), taxes and assessments (which, for purposes of clarity, do not include Contractual Impositions) collected by the County on ad valorem tax bills and that the CFD Administrator estimates would be levied or imposed on such residential property in such Fiscal Year if the residential dwelling unit thereon or th erein had been completed and sold, and was subject to such fees, charges, taxes and assessments in such Fiscal Year. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Public Property or Taxable Property Owner Association Property.

Please refer to additional definitions in Section H herein relating to the Prepayment of Facilities Special Tax.

B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, commencing with Fiscal Year 2026-2027, all Taxable Property within CFD No. 117 shall be classified as Developed Property, Undeveloped Property, Taxable Public Property or Taxable Property Owner Association Property, and shall be subject to Special Taxes in accordance with this Amended Rate and Method of Apportionment determined pursuant to Sections C and D herein.

C. MAXIMUM SPECIAL TAX RATE

1. Facilities Special Tax
At least 30 days prior to the issuance of the first series of CFD No. 117 Bonds, the Assigned Facilities Special Tax for Residential Property (se t forth in Table 1 below) shall be analyzed in accordance with and subject to the conditions set f orth in this Section C. At such time, the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of residential property with in each Land Use Class. If based upon such Price Point Study the CFD Administrator calculates that the Total Tax Burden applicable to one or more Land Use Classes of residential property constructed or to be constructed within CFD No. 117 shall exceed 1.95% of the Minimum Sale Price of such residential property constructed or to be constructed within CFD No. 117, the CFD Administ rator shall reduce the Assigned Facilities Special Tax to the extent necessary to cause the To tal Tax Burden that shall apply to residential property within such Land Use Class(es) to not exceed 1.95% of the Minimum Sale Price of such residential property. Each Assigned Facilities Spe cial Tax reduction for a Land Use Class shall be calculated separately, and it shall not be requi red that such reduction be proportionate among Land Use Classes. In connection with any reduction in the Assigned Facilities Special Tax for Residential Property, the CFD Administrator shall also reduce the Assigned Facilities Special Tax for Non-Residential in accordance with Section C.1.a.(3) herein, and the Backup Facilities Special Tax in accordance with Section C.1.a.(4) herein. U pon determining the reductions, if any, in the Assigned Facilities Special Tax and Backup Faciliti es Special Tax required pursuant to this 675

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Community Facilities District No. 117 (Southridge) Page 7 Section C, the CFD Administrator shall complete the Certificate to Amend Facilities Special Tax substantially in the form attached hereto as Exhibi t A (the “Certificate to Amend”) and shall execute such completed Certificate to Amend and shall deliver such Certificate to Amend to CFD No. 117. Upon receipt thereof, if in satisfactory form, CFD No. 117 shall execute such Certificate to Amend. The reduced Assigned Facilities Special T ax and Backup Facilities Special Tax specified in such Certificate to Amend shall become effective upon the execution of such Certificate to Amend by CFD No. 117. The Assigned Facilities Special Tax and Backup Facilities Special Tax reductions permitted pursuant to this Section C shall be reflected in an amended notice of Special Tax lien which CFD No. 117 shall cause to be recorded with the San Bernardino County Recorder as soon as practicable after execution of the Certificate to Amend by CFD No. 117. If based upon such Price Point Study the CFD Administr ator calculates that the Total Tax Burden applicable to each Land Use Class of residential pr operty constructed or to be constructed within CFD No. 117 does not exceed 1.95% of the Minimum Sa le Price of each such Land Use Class of residential property constructed or to be construct ed within CFD No. 117, then there shall be no reduction in the Assigned Facilities Special Tax, n or shall there be a reduction in the Backup Facilities Special Tax.
a. Developed Property
(1). Maximum Facilities Special Tax
The Maximum Facilities Special Tax for each Assesso r's Parcel classified as Developed Property shall be the greater of (i) the amount der ived by application of the Assigned Facilities Special Tax or (ii) the amount derived b y application of the Backup Facilities Special Tax.
(2). Assigned Facilities Special Tax for Residenti al Property Residential Property shall be assigned to Land Use Classes 1 through 5 as listed in Table 1 below based on the Residential Floor Area associated with each such residential dwelling unit. The Assigned Facilities Special Tax that sha ll be levied in any Fiscal Year for each Land Use Class is shown below in Table 1 and shall not be subject to escalation.

Table 1
Assigned Facilities Special Tax for Residential Property City of Fontana CFD No. 117 (Southridge)

Land
Use
Class Description
Residential Floor
Area (square feet)
Assigned
Facilities
Special Tax
1 Residential Property 2,175 or greater $3,706 per unit 2 Residential Property 2,025 to less than 2,175 $3,435 per unit 3 Residential Property 1,875 to less than 2,025 $3,382 per unit 4 Residential Property 1,725 to less than 1,875 $3,184 per unit 5 Residential Property Less than 1,725 $3,107 per unit
(3). Assigned Facilities Special Tax for Non-Resid ential Property The Assigned Facilities Special Tax for an Assessor’s Parcel of Non-Residential Property shall equal the lesser of (a) $42,665 per Acre, or (b) in connection with any reduction in 676

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 8 the Assigned Facilities Special Tax as set forth in Section C.1 herein, the amount per Acre calculated pursuant to the formula below:

RAFST = AFST  ATP
These terms have the following meaning:

RAFST = the reduced Assigned Facilities Special Tax for Non-Residential Property AFST = The total estimated Assigned Facilities Special Tax levy for CFD No. 117 based on the reduced Assigned Facilities Special Ta xes for Developed Property permitted pursuant to Section C.1 herein which coul d be levied on all expected development assuming Buildout of CFD No. 117.

ATP = The sum of the Acreage of all Taxable Property within a Final Subdivision (assuming Buildout) within CFD No. 117 (after exclu ding Public Property and Property Owner Association Property as set forth in Section E.1 herein). (4). Backup Facilities Special Tax
The Backup Facilities Special Tax for an Assessor’s Parcel of Developed Property shall equal the lesser of (a) $50,190 per Acre, or (b) in connection with any reduction in the Assigned Facilities Special Tax as set forth in Sec tion C.1 herein, the amount per Acre calculated pursuant to the formula below:

BFST = AFST  ATP
These terms have the following meaning:

BFST = the reduced Backup Facilities Special Tax
AFST = The total estimated Assigned Facilities Special Tax levy for CFD No. 117 based on the reduced Assigned Facilities Special Ta xes for Developed Property permitted pursuant to Section C.1 herein which coul d be levied on all expected development assuming Buildout of CFD No. 117.

ATP = The sum of the Acreage of all Taxable Property within a Final Subdivision (assuming Buildout) within CFD No. 117 (after exclu ding Public Property and Property Owner Association Property as set forth in Section E.1 herein) multiplied by 85%.

Furthermore, all Assessors’ Parcels within CFD No. 117 shall be relieved simultaneously and permanently from the obligation to pay and disclose the Backup Facilities Special Tax if the CFD Administrator calculates that (i) the an nual debt service required for the Outstanding Bonds, when compared to the Assigned Fa cilities Special Tax that shall be levied against all Assessors’ Parcels of Developed Property in CFD No. 117 results in 110% debt service coverage (i.e., the Assigned Faci lities Special Tax that shall be levied against all Developed Property in CFD No. 117 in ea ch remaining Fiscal Year based on the then existing development is at least equal to the sum of (a) 1.10 times the debt service necessary to support the remaining Outstanding Bonds in each corresponding Fiscal Year, and (b) Administrative Expenses), and (ii) all authorized CFD No. 117 Bonds have already been issued or the Council has covenanted that it s hall not issue any additional CFD No. 117 Bonds (except refunding bonds) to be supported by the Facilities Special Tax in CFD No. 117.
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 9 (5). Multiple Land Uses
In some instances an Assessor’s Parcel may contain both Developed Property and Undeveloped Property. In such cases, the Acreage o f the Assessor’s Parcel shall be allocated between Developed Property and Undeveloped Property based on the portion of the Assessor’s Parcel for which building permits ha d been issued prior to May 1 of the prior Fiscal Year and the portion of the Assessor’s Parcel for which building permits had not been issued prior to May 1 of the prior Fiscal Year.

Furthermore, Developed Property may contain more th an one Land Use Class. In such cases, the Acreage that is considered Developed Pro perty shall be allocated between Residential Property and Non-Residential Property b ased on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum Facilities Special Tax that can be levied on such Assessor’s Parcel shall be the sum of the Maximum Facilities Special Tax that can be levied on each type of property located on that Assessor’s Parcel.

The CFD Administrator’s allocation to each type of property shall be final. b. Undeveloped Property, Taxable Public Property, a nd Taxable Property Owner Association Property
The Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall be $50,190 per Acre and shall not be subject to escalation and shall therefore remain the same in every Fiscal Year.

2. Services Special Tax
For purposes of the Services Special Tax, an Assess or(s) Parcel of Developed Property within a Final Residential Subdivision shall be assigned to Land Use Class 1, as identified in Table 2 below.

Non-Residential Property shall be assigned to Land Use Class 2. Furthermore, the Services Special Tax levied against each Assessor’s Parcel w ithin a Final Residential Subdivision shall be based on the number of residential dwelling units f or which building permits have been issued or are expected to be issued for such Assessor’s Parce l, as determined by the CFD Administrator based on such Final Residential Subdivision or other available documents. a. Maximum Services Special Tax
The Fiscal Year 2026-2027 Maximum Services Special Tax for each Land Use Class of Developed Property is shown below in Table 2.

Table 2
Maximum Services Special Tax for Developed Property
City of Fontana CFD No. 117 (Southridge)

Land Use
Class

Description

Fiscal Year 2026-2027
Maximum Services Special Tax
1 Final Residential Subdivision $1,080.45 per unit
2 Non-Residential Property $13,765.00 per Acre

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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 10 b. Increase in the Maximum Services Special Tax
The Maximum Services Special Tax in Table 2 above s hall be applicable for Fiscal Year 2026-2027, and shall increase thereafter, commencing on July 1, 2027, and on each July 1 thereafter by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.
c. Multiple Land Uses
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. In such cases, the Acreage of Deve loped Property shall be allocated between Residential Property and Non-Residential Pr operty based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum Services Special Tax that can be levied on such Assessor’s Parcel shall be the sum of the Maximum Services Special Tax that can be levied on each type of property located on that Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

1. Facilities Special Tax
Commencing with Fiscal Year 2026-2027, and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the l evy of the Facilities Special Tax on each Assessor's Parcel of Developed Property whose Maxim um Facilities Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor's Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum F acilities Special Tax for Taxable Public Property and Taxable Property Owner Association Pro perty, as needed to satisfy the Special Tax Requirement for Facilities.

Notwithstanding the above, the CFD Administrator sh all, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Faci lities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in ord er to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 117 Bonds have already been issued or the Council has 679

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 11 covenanted that it shall not issue any additional C FD No. 117 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a cons equence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 117 by more than ten percent above the amount that would have been levied in that Fiscal Y ear had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Proper ty shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.

2. Services Special Tax
Commencing with Fiscal Year 2026-2027, and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requi rement for Services and shall levy the Services Special Tax Proportionately on each Assess or’s Parcel of Developed Property at up to 100% of the applicable Maximum Services Special Tax as needed to satisfy the Special Tax Requirement for Services;
E. EXEMPTIONS

1. Facilities Special Tax
No Facilities Special Tax shall be levied on up to 12.22 Acres of Public Property and/or Property Owner Association Property in CFD No. 117. Tax-exe mpt status shall be assigned by the CFD Administrator in the chronological order in which p roperty in CFD No. 117 becomes Public Property or Property Owner Association Property. H owever, should an Assessor’s Parcel no longer be classified as Public Property or Property Owner Association Property, it shall, from that point forward, be subject to the Facilities Special Tax.

Notwithstanding the above, an Assessor’s Parcel in CFD No. 117 that is transferred to a public agency or property owner’s association prior to the issuance of the first series of CFD No. 117 Bonds that causes the Acreage of Public Property an d Property Owner Association Property to exceed the 12.22 Acreage limit that can be designat ed by the CFD Administrator under this Section E.1 shall also be exempted from paying the Facilities Special Tax.

Public Property or Property Owner Association Prope rty that is not exempt from the Facilities Special Tax under this Section E.1 shall be subject to the levy of the Facilities Special Tax and shall be taxed Proportionately as part of the fourt h step in Section D herein, at up to 100% of the applicable Maximum Facilities Special Tax for Taxab le Public Property and Taxable Property Owner Association Property.

In addition, no Facilities Special Tax shall be lev ied on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households Welfare Exemption Property be exempt from the Facilities Special Tax, then the Facilities Special Tax shall be levied on such Assessor’s Parcel in accordance with this Amended Rate and Method of Apportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

2. Services Special Tax
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 12 No Services Special Tax shall be levied on Undevelo ped Property, Taxable Public Property, Taxable Property Owner Association Property, Public Property, or Property Owner Association Property.

In addition, no Services Special Tax shall be levie d on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households Welfare Exemption Property be exempt from the Services Special Tax, then the Services Special Tax shall be levied on such Assessor’s Parcel in accordance with this Amended Rate and Method of Apportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 117 may directly bill the Special Tax, and/or may collect Special Taxes at a different time or in a different manner if necessary to meet financial obligations, and, to the extent of the Facilities S pecial Tax, may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels.

G. APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on his/her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator, provided that the appellant is current in his/her payment of Spec ial Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the a ppellant of its determination. If the CFD Administrator agrees with the appellant, a cash ref und shall not be made (except for the last year of levy), but the amount of the Special Tax levied shall be appropriately modified through an adjustment to the Special Tax levy in the following Fiscal Year. If the CFD Administrator disagrees with the appellant and the appellant is d issatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payment of Special Taxes. This second appeal must specify the reasons for its disagreement with the CFD Administrator's determination.

The CFD Administrator shall interpret this Amended Rate and Method of Apportionment for purposes of clarifying any ambiguity and make deter minations relative to the annual administration of the Special Tax and any landowner or resident appeals. Any decision of the CFD Administrator shall be subject to appeal to the Cou ncil whose decision shall be final and binding as to all persons.

H. PREPAYMENT OF FACILITIES SPECIAL TAX
Under this Amended Rate and Method of Apportionment , an Assessor’s Parcel within CFD No. 117 is permitted to prepay the Facilities Special T ax. The obligation of the Assessor’s Parcel to pay the Facilities Special Tax may be fully prepaid and permanently satisfied or partially prepaid as described herein, provided that a prepayment may be made only for Assessor’s Parcels of Developed Property, or for an Assessor’s Parcel of Undeveloped Property for which a building permit has been issued after January 1, 2025, and o nly if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Facilities Special Tax obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD 681

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 13 Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge such owner a reasonabl e fee for providing this service. If there are Outstanding Bonds, prepayment must be made not less than 30 days prior to a date that notice of redemption of CFD No. 117 Bonds from the proceeds of such prepayment may be given by the Trustee pursuant to the Indenture that is specified in the report of the Facilities Special Tax Prepayment Amount (defined below).

The following additional definitions apply to this Section H:
"CFD Public Facilities Costs" means either $9,463,900 in 2026 dollars, which shall increase by the Construction Inflation Index on July 1, 2027, a nd on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Admini strator as sufficient to provide funding for the Authorized Facilities under the authorized bond ing program for CFD No. 117, or (ii) shall be determined by the Council concurrently with a covenant that it shall not issue any more CFD No. 117 Bonds (except refunding bonds) to be supported by the Facilities Special Tax levy under this Amended Rate and Method of Apportionment.
"Construction Inflation Index" means the annual percentage change in the Engineer ing News Record Building Cost Index for the City of Los Ange les, measured as of the month of December in the calendar year which ends in the previous Fis cal Year. In the event this index ceases to be published, the Construction Inflation Index shall b e another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) co sts of Authorized Facilities previously paid from the Improvement Fun d, (ii) moneys currently on deposit in the Improvement Fund available to pay costs of Authoriz ed Facilities, and (iii) the amount the CFD Administrator reasonably expects to derive from the reinvestment of these funds. "Improvement Fund" means a fund or account specifically identified in the Indenture (or prior to the issuance of the first series of CFD No. 117 Bonds a fund or account held by the City) to hold funds which are currently available for expenditure to acquire or construct Authorized Facilities. "Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year.

1. Prepayment in Full
The Facilities Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Facilities Special Tax Prepayment Amo unt As of the proposed date of prepayment, the Faciliti es Special Tax Prepayment Amount shall be calculated according to the following paragraphs:
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 14

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

2. For Assessor’s Parcels of Developed Property, compu te the Assigned Facilities Special Tax and Backup Facilities Special Tax for the Asses sor’s Parcel to be prepaid. For Assessor’s Parcels of Undeveloped Property for whic h a building permit has been issued after January 1, 2025, compute the Assigned Facilit ies Special Tax and Backup Facilities Special Tax for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for such Assessor’s Parcel.

3. (a) Divide the Assigned Facilities Special Tax comp uted pursuant to paragraph 2 by the total estimated Assigned Facilities Special Tax lev y for CFD No. 117 based on the Assigned Facilities Special Taxes for Developed Pro perty which could be levied on all expected development assuming Buildout of CFD No. 1 17, excluding any Assessor’s Parcels which have been prepaid, and
(b) Divide the Backup Facilities Special Tax computed pursuant to paragraph 2 by the total estimated Backup Facilities Special Taxes at Buildo ut for the entire CFD No. 117, excluding any Assessor’s Parcels which have been prepaid.

4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously Issued Bonds to compute the amount of Previously Is sued Bonds to be redeemed (the "Bond Redemption Amount").

5. Multiply the Bond Redemption Amount computed pursua nt to paragraph 4 by the applicable redemption premium (e.g., the redemption price minus 100%) set forth in the Indenture, if any, on the Previously Issued Bonds t o be redeemed (the "Redemption Premium").

6. Compute the current Future Facilities Costs.

7. Multiply the larger quotient computed pursuant to p aragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount").

8. Compute the amount needed to pay interest on the Bo nd Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the redemption date for the Previously Issued Bonds spe cified in the report of the Facilities Special Tax Prepayment Amount.

9. Determine the Facilities Special Tax levied on the Assessor’s Parcel in the current Fiscal Year which has not yet been paid.

10. Compute the minimum amount the CFD Administrator re asonably expects to derive from the reinvestment of the Facilities Special Tax Prep ayment Amount, less any interest earnings attributed to the Future Facilities Amount, and less any interest earnings attributed to the Administrative Fees and Expenses (defined below) from the date of prepayment until the redemption date for the Previously Issued Bonds to be redeemed with the prepayment.

11. Add the amounts computed pursuant to paragraphs 8 a nd 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount").

12. The administrative fees and expenses of CFD No. 117 are as calculated by the CFD Administrator and include the costs of computation of the prepayment, the costs to invest 683

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 15 the prepayment proceeds, the costs of redeeming CFD No. 117 Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses").

13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected reduction in the reserve requirement (as d efined in the Indenture), if any, associated with the redemption of Previously Issued Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new re serve requirement (as defined in the Indenture) in effect after the redemption of Previo usly Issued Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount then on deposit in the reserve fund for the Previou sly Issued Bonds is below 100% of the reserve requirement (as defined in the Indenture).

14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the date immediately following the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b ) by the expected balance in the capitalized interest fund or account under the Inde nture after such first interest and/or principal payment date (the "Capitalized Interest Credit").

15. The Facilities Special Tax prepayment is equal to t he sum of the amounts computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Facilities Special Tax Prepayment Amount").

2. Prepayment in Part
The amount of the prepayment shall be calculated as in Section H.1; except that a partial prepayment shall be calculated according to the following formula:

PP = [(PE – A) x F] + A
These terms have the following meaning:

PP = the partial prepayment.

PE = the Facilities Special Tax Prepayment Amount calculated according to Section H.1.

F = the percentage, expressed as a decimal, by which the owner of the Assessor’s Parcel is partially prepaying the Facilities Special Tax.

A = the Administrative Fees and Expenses calculated according to Section H.1.

3. General Provisions Applicable to the Prepayment of Facilities Special Tax (a). Use of the Facilities Special Tax Prepayment Amount The Facilities Special Tax Prepayment Amount, less the Administrative Fees and Expenses calculated according to Section H.1 which shall be retained by CFD No. 117, and less the Future Facilities Amount calculated according to Section H.1 which shall be deposited into the Improvement Fund, shall be deposited into speci fic funds established under the Indenture, to fully or partially redeem as many Out standing Bonds as possible, and, if amounts are less than $5,000, to make debt service payments on the Outstanding Bonds. (b). Full Prepayment of Facilities Special Tax
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 16 Upon confirmation of the payment of the current Fiscal Year’s entire Facilities Special Tax obligation, the CFD Administrator shall remove the current Fiscal Year’s Facilities Special Tax levy for such Assessor’s Parcel from the County tax rolls. With respect to any Assessor’s Parcel that is prepaid in accordance wit h Section H.1, the CFD Administrator shall cause a suitable notice to be recorded in com pliance with the Act, to indicate the prepayment of the Facilities Special Tax and the re lease of the Facilities Special Tax lien on such Assessor’s Parcel, and the obligation of such Assessor’s Parcel to pay the Facilities Special Tax shall cease.
(c). Partial Prepayment of Facilities Special Tax
With respect to any Assessor’s Parcel that is partially prepaid, the CFD Administrator shall (i) distribute or cause to be distributed the funds remitted to it according to Section H.3.(a) and (ii) indicate in the records of CFD No. 117 that there has been a partial prepayment of the Facilities Special Tax and that a portion of th e Facilities Special Tax with respect to such Assessor’s parcel, equal to the outstanding pe rcentage (1.00 – F) of the remaining Maximum Facilities Special Tax, shall continue to b e levied on such Assessor’s Parcel pursuant to Section D herein.
(d). Debt Service Coverage
Notwithstanding the foregoing, no prepayment of the Facilities Special Tax shall be allowed unless the amount of Facilities Special Tax that may be levied on Taxable Property (assuming Buildout) within CFD No. 117 in each future Fiscal Year (after excluding Public Property and Property Owner Association Property as set forth in Section E.1 herein), after the proposed prepayment, is at least equal to the s um of (i) 1.10 times the debt service necessary to support the remaining Outstanding Bonds in each corresponding Fiscal Year, and (ii) Administrative Expenses.

I. TERM OF SPECIAL TAX
The Facilities Special Tax shall be levied for a pe riod not to exceed fifty years commencing with Fiscal Year 2026-2027. The Services Special Tax shall be levied in perpetuity to fund the Special Tax Requirement for Services.
685

EXHIBIT A

CERTIFICATE TO AMEND FACILITIES SPECIAL TAX

CFD NO. 117 CERTIFICATE

1. Pursuant to Section C.1 of the Amended Rate and Method of Apportionment (the "Amended Rate and Method") for City of Fontana Community Fac ilities District No. 117 (Southridge) ("CFD No. 117"), the Assigned Facilities Special Ta x and the Backup Facilities Special Tax for Developed Property within CFD No. 117 has been reduced as described herein.

(a) The information in Table 1 of the Amended Rate and Method relating to the Assigned Facilities Special Tax for Residential Property wit hin CFD No. 117 shall be modified as follows:

Land
Use
Class Description
Residential Floor
Area (square feet)
Original
Assigned
Facilities
Special Tax
Reduced

Assigned
Facilities
Special Tax
1 Residential Property 2,175 or greater $3,706 per unit $[_____] per unit 2 Residential Property 2,025 to less than 2,175 $3, 435 per unit $[_____] per unit 3 Residential Property 1,875 to less than 2,025 $3,382 per unit $[_____] per unit 4 Residential Property 1,725 to less than 1,875 $3,184 per unit $[_____] per unit 5 Residential Property Less than 1,725 $3,107 per unit $[_____] per unit

(b) The Assigned Facilities Special Tax for Non-Residential Property, as stated in Section C.1.a.(3) of the Amended Rate and Method, shall be reduced from $42,665 per Acre to $[_____] per Acre.

(c) The Backup Facilities Special Tax for Developed Pro perty, as stated in Section C.1.a.(4) of the Amended Rate and Method, shall be reduced from $50,190 per Acre to $[_____] per Acre.

2. The Assigned Facilities Special Tax and the Backup Facilities Special Tax for Developed Property may only be reduced prior to the first issuance of CFD No. 117 Bonds.

3. Upon execution of the certificate by CFD No. 117, CFD No. 117 shall cause an amended notice of Special Tax lien for CFD No. 117 to be recorded reflecting the reductions set forth herein.

All capitalized terms used herein shall have the me anings set forth in the Amended Rate and Method.

By:___________________________ Date:______________ ________ CFD Administrator

By execution hereof, the undersigned acknowledge, o n behalf of CFD No. 117, receipt of this certificate and modification of the Amended Rate and Method as set forth in this certificate.

CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

By:___________________________ Date:______________ _______

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4150-9713-1370.3

CONSENT AND WAIVER

CHANGE PROCEEDINGS

CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 117
(SOUTHRIDGE)
City Council
City of Fontana
16860 Valencia Avenue
Fontana, California 92335
Members of the City Council:

The City Council (the “City Council”) of the City of Fontana (the “City”) has previously established City of Fontana Community Facilities District No. 117 (Southridge) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”).

The Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain types of facilities and services. KB HOME Cal Management Services LLC, a Delaware limited liability company (the “Landowner”), has, pursuant to Section 53332 of the Act, submitted a petition to the City Council requesting that proceedings be commenced pursuant to the Act to change the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the Amended Rate and Method (as defined below).

This is a consent and waiver with respect to certain procedural matters under the Act, and the undersigned hereby states as follows:

1. Landowner; Property. This Consent and Waiver is submitted by the Landowner as the legal owner of the real property described in Exhibit A attached hereto and made a part hereof (the “Property”). The Property consists of approximately 32.23 acres and comprises 100% of the land within the Community Facilities District not exempt from the Special Tax.

2. Proceedings. The Landowner hereby acknowledges and agrees that the City Council has, pursuant to a petition of the Landowner, commenced proceedings pursuant to the Act to change the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the City of Fontana Community Facilities District No. 117 (Southridge) Amended Rate and Method of Apportionment of Special Tax (the “Amended Rate and Method”) attached hereto as Exhibit B. The City Council has fixed Tuesday, September 8, 2026, at 2:00 p.m. or as soon thereafter as the matter may be heard, at 8437 Sierra Avenue, Fontana, California, as the time and place where the City Council will conduct a public hearing on the proposed changes to the rate and method of apportionment of the Special Tax. The Landowner hereby acknowledges and agrees that notice of such public hearing was published by the City Clerk on August 21, 2026 in The Fontana Herald News , a newspaper of general circulation published in the area of the Community Facilities District. The Landowner hereby acknowledges and agrees that it had actual notice of such public hearing, that notice of such public hearing has been given in accordance with the Act, that it waives any and all 687
2 4150-9713-1370.3
defects (if any) in such notice, and that it waives any rights it may have to make any protest or complaint or to undertake any legal action challenging the adequacy of such notice.

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

The Landowner hereby acknowledges and agrees that, pursuant to Section 53326(b) of the Act, if fewer than 12 persons have been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing on the proposed changes to the rate and method of apportionment of the Special Tax, the vote on the proposition to change the rate and method of apportionment of the Special Tax shall be by the landowners of the Community Facilities District and each person who is the owner of land at the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that he or she owns within the Community Facilities District not exempt from the Special Tax. The Landowner hereby acknowledges and agrees that if, as anticipated, said public hearing is closed on September 8, 2026, said vote shall, pursuant to Section 53326(b) of the Act, be by the landowners of the Community Facilities District.

4. Request. The Landowner hereby requests that the special election to be held under the Act on the proposition to change the rate and method of apportionment of the Special Tax, be conducted using mailed or hand-delivered ballots, that such ballots be opened and canvassed at such election, and that the results of such election be certified at the same meeting of the City Council as the public hearing on the proposed changes to the rate and method of apportionment of the Special Tax, or as soon thereafter as possible.

5. Consent and Waiver. The Landowner hereby acknowledges and agrees that if the special election to be held under the Act on the proposition to change the rate and method of apportionment of the Special Tax is held on September 8, 2026, said special election would be held less than 90 days after the close of the public hearing on the proposed changes to the rate and method of apportionment of the Special Tax on the same date. The Landowner hereby acknowledges and agrees that, pursuant to Section 53326 of the Act, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of such special election may be waived with the unanimous consent of the qualified electors of the Community Facilities District and the concurrence of the election official conducting the election. The Landowner hereby consents to the waiver of, and hereby waives, any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including, but not limited to, all notices with respect thereto (published, mailed or otherwise to be given), any voter qualification requirements, any time limitations, any requirements as to form or content of election materials, all publication requirements, all pre-election, election or voting procedures (other than the right to vote) and all canvass, recount and tie vote procedures. The Landowner hereby consents to the holding of said special election on September 8, 2026. 688
3 4150-9713-1370.3
The Landowner hereby acknowledges and agrees that (a) as the vote is to be by the landowners of the Community Facilities District, pursuant to Section 53327(b) of the Act, any impartial analysis, arguments or rebuttals, if any, with respect to the special election on the proposition to change the rate and method of apportionment of the Special Tax may be waived with the unanimous consent of all the landowners of the Community Facilities District, and (b) pursuant to Section 53326 of the Act, with the concurrence of the election official for said special election, any requirement pertaining to the conduct of said special election may be waived with the unanimous consent of all the qualified electors of the Community Facilities District. The Landowner hereby acknowledges and agrees that said special election is to be held without the preparation of an impartial analysis and arguments and rebuttals, if any, as permitted by Section 53327(b) of the Act. The Landowner hereby consents to the waiver of, and hereby waives, the requirement in Section 53327(a) that there be prepared and included in the ballot material provided to each voter an impartial analysis pursuant to Section 9160, 9280 or 9500 of the California Elections Code, and arguments and rebuttals, if any, pursuant to Sections 9162 to 9167, inclusive, and Section 9190 of the California Elections Code or pursuant to Sections 9281 to 9287, inclusive, and Section 9295 of the California Elections Code, or pursuant to Sections 9501 to 9507, inclusive, of the California Elections Code, or pursuant to other provisions of law applicable to other special districts, as appropriate.

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

The Landowner hereby waives any and all defects in notice or procedure in any proceedings to change the rate and method of apportionment of the Special Tax so as to revise the initial permitting date used in the definition of “Developed Property,” as reflected in the Amended Rate and Method, or in the conduct of the election, whether known or unknown (other than, in the case of the election, the right to have ballots accurately counted), and the Landowner hereby represents that the election is being expedited pursuant to this Consent and Waiver, at the particular request of the Landowner. The Landowner further waives its right to make any protest or complaint or to undertake any legal action challenging the validity of the election. [Remainder of page intentionally left blank.]
689
690
A-1
4150-9713-1370.3

EXHIBIT A

DESCRIPTION OF PROPERTY
The Property consists of San Bernardino County Assessor Parcel Number 0237-411-35. 691
B-1
4150-9713-1370.3

EXHIBIT B
CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

AMENDED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX 692

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 1

AMENDED RATE AND METHOD OF APPORTIONMENT FOR
COMMUNITY FACILITIES DISTRICT NO. 117 (SOUTHRIDGE)

CITY OF FONTANA, COUNTY OF SAN BERNARDINO

STATE OF CALIFONIA

A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels of Taxable Property in City of Fontana Community Facilities District No . 117 (Southridge) ("CFD No. 117") and collected each Fiscal Year commencing in Fiscal Yea r 2026-2027, in an amount determined by the City Council of the City of Fontana, through the application of the Amended Rate and Method of Apportionment as described below. All of the real property in CFD No. 117, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre" or "Acreage" means the land area expressed in acres of an Asses sor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded County map or the land area calculated to the reaso nable satisfaction of the CFD Administrator using the boundaries set forth on such map or plan. For residential dwelling units within a condominium plan, the Acres applicable to each resi dential dwelling unit shall be determined by dividing (i) the Acres of the underlying lot or par cel on which the residential dwelling unit is constructed or to be constructed, by (ii) the total number of residential dwelling units constructed or to be constructed on such lot or parcel. The sq uare footage of an Assessor’s Parcel is equal to the Acreage of such parcel multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 (commencing with Section 53311) of the California Government Code. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 117, including but not limited to: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecti ng the Special Taxes (whether by the County or otherwise); the costs of remitting the Special Taxe s to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of t he duties required of it under the Indenture; the costs to the City, CFD No. 117 or any designee ther eof of complying with arbitrage rebate requirements with respect to the Special Tax and CFD No. 117 Bonds; the costs to the City, CFD No. 117 or any designee thereof of complying with disclosure requirements of the City, CFD No. 117 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax dis closure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 117, or any designee thereof related to the reduction of the Assigned Facilities Special Tax and Backup Facilities Special Tax in accordance with Section C.1 herein; the costs of the City, CFD No. 117 or any designee thereof related to an appeal of the Special Tax; and the Ci ty’s annual administration fees and third party expenses related to CFD No. 117 Bonds. Administrat ive Expenses shall also include amounts estimated or advanced by the City or CFD No. 117 fo r any other administrative purposes of CFD No. 117, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. 693

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 2 "Amended Rate and Method of Apportionment" means this Amended Rate and Method of Apportionment for CFD No. 117.
"Assessor" means the Assessor of the County.
"Assessor's Parcel" means a lot or parcel to which an Assessor’s parce l number is assigned as determined from an Assessor’s Parcel Map or the applicable assessment roll. "Assessor's Parcel Map" means an official map of the Assessor designating parcels by Assessor’s Parcel number.
"Assigned Facilities Special Tax" means the applicable Facilities Special Tax for (i) Residential Property as determined in accordance with Section C .1.a.(2) herein, and (ii) Non-Residential Property as determined in accordance with Section C.1.a.(3) herein. "Authorized Facilities" means those facilities eligible to be funded by CFD No. 117. "Authorized Services" means those services eligible to be funded by CFD No. 117 in accordance with the Act, namely, fire protection and suppression services, maintenance and lighting of parks, parkways, streets, roads and open space, flood and storm protection services and maintenance and operation of any real property or other tangible pr operty with an estimated useful life of five or more years that is owned by the City.
"Backup Facilities Special Tax" means the Facilities Special Tax applicable to eac h Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.a.(4) herein. "Buildout" means, for CFD No. 117, that all expected building permits for residential dwelling units and/or non-residential development to be constructed within CFD No. 117 have been issued, as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof , responsible for determining the Special Tax Requirement for Facilit ies and the Special Tax Requirement for Services, providing for the levy and collection of the Special Taxes, and performing other duties as set forth herein.
"CFD No. 117" means City of Fontana Community Facilities District No. 117 (Southridge). "CFD No. 117 Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 11 7 and secured by the Facilities Special Tax levy on property within the boundaries of CFD No. 117 under the Act. "City" means the City of Fontana, California.
"Contractual Impositions" means (a) a voluntary contractual assessment established and levied on an Assessor’s Parcel pursuant to Chapter 29 of P art 3 of Division 7 of the California Streets and Highways Code (commencing with Section 5898.10 et seq. ), as amended from time to time, (b) a special tax established and levied on an Assessor’s Parcel pursuant to Section 53328.1 of the California Government Code and related provisions of the Act, as amended from time to time, and (c) any other fee, charge, tax or assessment establ ished and levied on an individual Assessor’s Parcel pursuant to a contractual agreement or other voluntary consent by the owner thereof. "Council" means the City Council of the City acting as the legislative body of CFD No. 117. "County" means the County of San Bernardino.
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 3 "Developed Property" means, for each Fiscal Year, (i) with respect to the Facilities Special Tax, all Taxable Property, exclusive of Taxable Public P roperty and Taxable Property Owner Association Property, for which a building permit for new construction, other than the construction of a garage, parking lot, or parking structure, was issued after January 1, 2025 and on or before May 1 of the Fiscal Year preceding the Fiscal Year for which the Facilities Special Taxes are being levied, and (ii) with respect to the Services Special Tax, all Taxable Property, exclusive of Taxable Public Property and Taxable Property Owner Associat ion Property, (a) for which the Final Residential Subdivision was recorded prior to the Fiscal Year for which the Services Special Taxes are being levied, or (b) for which a building permit has been issued with respect to Non-Residential Property on or before May 1 of the Fiscal Year prec eding the Fiscal Year for which the Services Special Taxes are being levied.
"Facilities Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Taxable Property within CFD No. 117 to fund the Special Tax Requirement for Facilities, as set forth in Section C.1 herein.
"Final Residential Subdivision" means a Final Subdivision that creates individual lots for which building permits may be issued for residential dwel ling units without further subdivision of such property.
"Final Subdivision" means (i) a subdivision of property by recordation of a final map, parcel map, or lot line adjustment approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq. ) that creates individual lots or parcels for which building permits may be issued, or (ii) for condominiums, a final map approved by the City and a condominium plan recorded pursuant to California Ci vil Code Section 4285 that creates an individual lot(s) for which a building permit(s) ma y be issued without further subdivision. The term "Final Subdivision" shall not include any Asse ssor’s Parcel Map or subdivision map or portion thereof that does not create individual lot s for which a building permit may be issued, including Assessor’s Parcels that are designated as remainder parcels. Notwithstanding the above, a condominium plan for which one or more building p ermits have been issued, but no individual lots have been created for such building permits, s hall be considered a Final Subdivision, and the portion of the condominium plan for which build ing permits have been issued shall be defined as Developed Property.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. "Indenture" means the indenture, fiscal agent agreement, trust agreement, resolution or other instrument pursuant to which CFD No. 117 Bonds are issued, as modified, amended and/or supplemented from time to time.
"Land Use Class" means any of the classes listed in Table 1 or Table 2 herein. "Lower Income Households Welfare Exemption Property " means, for each Fiscal Year, an Assessor’s Parcel within the boundaries of CFD No. 117 that is subject to a welfare exemption under subdivision (g) of Section 214 of the Califor nia Revenue and Taxation Code (or any successor statute), as indicated in the County’s as sessment roll finalized as of the last preceding January 1.
"Maximum Facilities Special Tax" means the maximum Facilities Special Tax, determin ed in accordance with Section C.1 herein, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 4 "Maximum Services Special Tax" means the maximum Services Special Tax, determined in accordance with Section C.2 herein, that can be levied in any Fiscal Year on any Assessor’s Parcel of Developed Property.
"Minimum Sale Price" means the minimum price at which any parcel in a given Land Use Class has sold or is expected to be sold in a normal mark eting environment and shall not include prices for such parcels that are sold at a discount to exp ected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class. "Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City perm itting the construction of one or more non- residential structures or facilities.
"Outstanding Bonds" means all CFD No. 117 Bonds which are outstanding under the Indenture. "Price Point Consultant" means any consultant or firm of such consultants selected by CFD No. 117 that (a) has substantial experience in performi ng price point studies for residential dwelling units within community facilities districts or othe rwise estimating or confirming pricing for residential dwelling units in community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relate s to the pricing of residential dwelling units in community facilities districts, (c) is in fact independent and not under the control of CFD No. 117 or the City, (d) does not have any substantial inte rest, direct or indirect, with or in (i) CFD No. 117, (ii) the City, (iii) any owner of real property in CFD No. 117, or (iv) any real property in CFD No. 117, and (e) is not connected with CFD No. 117 or the City as an officer or employee thereof, but who may be regularly retained to make reports to CFD No. 117 or the City. "Price Point Study" means a price point study or a letter updating a p revious price point study prepared by the Price Point Consultant pursuant to Section C herein. "Property Owner Association Property" means, for each Fiscal Year, (i) any property with in the boundaries of CFD No. 117 for which the owner o f record, as determined from the County’s assessment roll for the Fiscal Year in which the Special Tax is being levied, is a property owner’s association, including any master or sub-associatio n, or (ii) any property located in a Final Subdivision that was recorded as of the January 1 p receding the Fiscal Year in which the Special Tax is being levied and which, as determined from such Final Subdivision, is or will be open space, a common area recreation facility, or a private street. Notwithstanding the foregoing, any property previously classified as Developed Property and sub sequently owned in fee or by easement, or dedicated to, a property owner association, includi ng any master or sub-association, shall remain classified as Developed Property.
"Proportionately" means that the ratio of the actual Facilities Speci al Tax levy to the Assigned Facilities Special Tax is equal for all Assessor’s Parcels of Developed Property, and that the ratio of the actual Services Special Tax levy to the Maxi mum Services Special Tax is equal for all Assessor’s Parcels of Developed Property. For Unde veloped Property, "Proportionately" means that the ratio of the actual Facilities Special Tax levy per Acre to the Maximum Facilities Special Tax per Acre is equal for all Assessor’s Parcels of Undeveloped Property. The term "Proportionately" shall similarly be applied to oth er categories of Taxable Property as listed in Section D herein.
"Public Property" means, for each Fiscal Year, any property within t he boundaries of CFD No. 117 that is (i) owned by, irrevocably offered or dedicated to the federal government, the State, the 696

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Community Facilities District No. 117 (Southridge) Page 5 County, the City, or any local government or other public agency, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or (ii) encumbered by a public utility easement making impractical its use for any purpose other than that set forth in the easement. "Residential Floor Area" means all of the square footage of living area wit hin the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area for an Assessor’s Parcel shall be as set forth in the building permit(s) issued for such Assessor’s Parcel and/or as set forth in the appropriate records kept by the Building and Safety Department of the City, or other applicable City department, as determined by the CFD Administrator. "Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued by the City permitting the construction thereon of one or more residential dwelling units.
"Services Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor’s Parcel of Developed Property within CFD No. 117 to fund the Special Tax Requirement for Services, as set forth in Section C.2 herein.
"Special Tax" or "Special Taxes" means the Facilities Special Tax and/or Services Special Tax, as applicable.
"Special Tax Requirement for Facilities" means, for any Fiscal Year, that amount required, after taking into account available amounts held in the f unds and accounts under the Indenture, for the following items: (i) debt service on all Outstandin g Bonds due in the calendar year commencing in such Fiscal Year; (ii) periodic costs with respe ct to the CFD No. 117 Bonds, including but not limited to, costs of credit enhancement and federal rebate payments due in the calendar year commencing in such Fiscal Year; (iii) pay all or a portion of Administrative Expenses; (iv) any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) without duplicating any amounts described in clause (iv), a bove, reasonably anticipated Facilities Special Tax delinquencies based on the delinquency rate for the Facilities Special Tax in the previous Fiscal Year, as said levy for delinquencies shall be limited by the Act; and (vi) pay directly for the acquisition or construction of Authorized Facilitie s, provided that the inclusion of such amount does not increase the Facilities Special Tax levy beyond the first step in Section D.1 herein. "Special Tax Requirement for Services" means that amount required in any Fiscal Year for CFD No. 117 to (i) pay directly for the Authorized Serv ices; (ii) pay Administrative Expenses not funded through the Special Tax Requirement for Faci lities as determined by the CFD Administrator; (iii) pay for reasonably anticipated Services Special Tax delinquencies based on the delinquency rate for the Services Special Tax levy in the previous Fiscal Year; less (iv) a credit for funds available to reduce the annual Services S pecial Tax levy, as determined by the CFD Administrator, so long as the amount required is not less than zero. "State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the bou ndaries of CFD No. 117 which are not exempt from the Special Tax pursuant to applicable law or Section E herein. "Taxable Property Owner Association Property" means all Assessor’s Parcels of Property Owner Association Property that are not exempt pursuant to Section E herein. 697

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Community Facilities District No. 117 (Southridge) Page 6 "Taxable Public Property" means all Assessor’s Parcels of Public Property th at are not exempt pursuant to Section E herein.
"Total Tax Burden" means, for a parcel of residential property within a Land Use Class, for the Fiscal Year in which Total Tax Burden is being calc ulated, the sum of (a) the Assigned Facilities Special Tax for such Fiscal Year, plus (b) the Maximum Services Special Tax for such Fiscal Year, plus (c) the ad valorem property taxes, special assessments, special taxes for any overlapping community facilities districts, and any other governmental fees, charges (other than fees or charges for services such as sewer and trash), taxes and assessments (which, for purposes of clarity, do not include Contractual Impositions) collected by the County on ad valorem tax bills and that the CFD Administrator estimates would be levied or imposed on such residential property in such Fiscal Year if the residential dwelling unit thereon or th erein had been completed and sold, and was subject to such fees, charges, taxes and assessments in such Fiscal Year. "Trustee" means the trustee or fiscal agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Public Property or Taxable Property Owner Association Property.

Please refer to additional definitions in Section H herein relating to the Prepayment of Facilities Special Tax.

B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, commencing with Fiscal Year 2026-2027, all Taxable Property within CFD No. 117 shall be classified as Developed Property, Undeveloped Property, Taxable Public Property or Taxable Property Owner Association Property, and shall be subject to Special Taxes in accordance with this Amended Rate and Method of Apportionment determined pursuant to Sections C and D herein.

C. MAXIMUM SPECIAL TAX RATE

1. Facilities Special Tax
At least 30 days prior to the issuance of the first series of CFD No. 117 Bonds, the Assigned Facilities Special Tax for Residential Property (se t forth in Table 1 below) shall be analyzed in accordance with and subject to the conditions set f orth in this Section C. At such time, the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of residential property with in each Land Use Class. If based upon such Price Point Study the CFD Administrator calculates that the Total Tax Burden applicable to one or more Land Use Classes of residential property constructed or to be constructed within CFD No. 117 shall exceed 1.95% of the Minimum Sale Price of such residential property constructed or to be constructed within CFD No. 117, the CFD Administ rator shall reduce the Assigned Facilities Special Tax to the extent necessary to cause the To tal Tax Burden that shall apply to residential property within such Land Use Class(es) to not exceed 1.95% of the Minimum Sale Price of such residential property. Each Assigned Facilities Spe cial Tax reduction for a Land Use Class shall be calculated separately, and it shall not be requi red that such reduction be proportionate among Land Use Classes. In connection with any reduction in the Assigned Facilities Special Tax for Residential Property, the CFD Administrator shall also reduce the Assigned Facilities Special Tax for Non-Residential in accordance with Section C.1.a.(3) herein, and the Backup Facilities Special Tax in accordance with Section C.1.a.(4) herein. U pon determining the reductions, if any, in the Assigned Facilities Special Tax and Backup Faciliti es Special Tax required pursuant to this 698

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 7 Section C, the CFD Administrator shall complete the Certificate to Amend Facilities Special Tax substantially in the form attached hereto as Exhibi t A (the “Certificate to Amend”) and shall execute such completed Certificate to Amend and shall deliver such Certificate to Amend to CFD No. 117. Upon receipt thereof, if in satisfactory form, CFD No. 117 shall execute such Certificate to Amend. The reduced Assigned Facilities Special T ax and Backup Facilities Special Tax specified in such Certificate to Amend shall become effective upon the execution of such Certificate to Amend by CFD No. 117. The Assigned Facilities Special Tax and Backup Facilities Special Tax reductions permitted pursuant to this Section C shall be reflected in an amended notice of Special Tax lien which CFD No. 117 shall cause to be recorded with the San Bernardino County Recorder as soon as practicable after execution of the Certificate to Amend by CFD No. 117. If based upon such Price Point Study the CFD Administr ator calculates that the Total Tax Burden applicable to each Land Use Class of residential pr operty constructed or to be constructed within CFD No. 117 does not exceed 1.95% of the Minimum Sa le Price of each such Land Use Class of residential property constructed or to be construct ed within CFD No. 117, then there shall be no reduction in the Assigned Facilities Special Tax, n or shall there be a reduction in the Backup Facilities Special Tax.
a. Developed Property
(1). Maximum Facilities Special Tax
The Maximum Facilities Special Tax for each Assesso r's Parcel classified as Developed Property shall be the greater of (i) the amount der ived by application of the Assigned Facilities Special Tax or (ii) the amount derived b y application of the Backup Facilities Special Tax.
(2). Assigned Facilities Special Tax for Residenti al Property Residential Property shall be assigned to Land Use Classes 1 through 5 as listed in Table 1 below based on the Residential Floor Area associated with each such residential dwelling unit. The Assigned Facilities Special Tax that sha ll be levied in any Fiscal Year for each Land Use Class is shown below in Table 1 and shall not be subject to escalation.

Table 1
Assigned Facilities Special Tax for Residential Property City of Fontana CFD No. 117 (Southridge)

Land
Use
Class Description
Residential Floor
Area (square feet)
Assigned
Facilities
Special Tax
1 Residential Property 2,175 or greater $3,706 per unit 2 Residential Property 2,025 to less than 2,175 $3,435 per unit 3 Residential Property 1,875 to less than 2,025 $3,382 per unit 4 Residential Property 1,725 to less than 1,875 $3,184 per unit 5 Residential Property Less than 1,725 $3,107 per unit
(3). Assigned Facilities Special Tax for Non-Resid ential Property The Assigned Facilities Special Tax for an Assessor’s Parcel of Non-Residential Property shall equal the lesser of (a) $42,665 per Acre, or (b) in connection with any reduction in 699

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 8 the Assigned Facilities Special Tax as set forth in Section C.1 herein, the amount per Acre calculated pursuant to the formula below:

RAFST = AFST  ATP
These terms have the following meaning:

RAFST = the reduced Assigned Facilities Special Tax for Non-Residential Property AFST = The total estimated Assigned Facilities Special Tax levy for CFD No. 117 based on the reduced Assigned Facilities Special Ta xes for Developed Property permitted pursuant to Section C.1 herein which coul d be levied on all expected development assuming Buildout of CFD No. 117.

ATP = The sum of the Acreage of all Taxable Property within a Final Subdivision (assuming Buildout) within CFD No. 117 (after exclu ding Public Property and Property Owner Association Property as set forth in Section E.1 herein). (4). Backup Facilities Special Tax
The Backup Facilities Special Tax for an Assessor’s Parcel of Developed Property shall equal the lesser of (a) $50,190 per Acre, or (b) in connection with any reduction in the Assigned Facilities Special Tax as set forth in Sec tion C.1 herein, the amount per Acre calculated pursuant to the formula below:

BFST = AFST  ATP
These terms have the following meaning:

BFST = the reduced Backup Facilities Special Tax
AFST = The total estimated Assigned Facilities Special Tax levy for CFD No. 117 based on the reduced Assigned Facilities Special Ta xes for Developed Property permitted pursuant to Section C.1 herein which coul d be levied on all expected development assuming Buildout of CFD No. 117.

ATP = The sum of the Acreage of all Taxable Property within a Final Subdivision (assuming Buildout) within CFD No. 117 (after exclu ding Public Property and Property Owner Association Property as set forth in Section E.1 herein) multiplied by 85%.

Furthermore, all Assessors’ Parcels within CFD No. 117 shall be relieved simultaneously and permanently from the obligation to pay and disclose the Backup Facilities Special Tax if the CFD Administrator calculates that (i) the an nual debt service required for the Outstanding Bonds, when compared to the Assigned Fa cilities Special Tax that shall be levied against all Assessors’ Parcels of Developed Property in CFD No. 117 results in 110% debt service coverage (i.e., the Assigned Faci lities Special Tax that shall be levied against all Developed Property in CFD No. 117 in ea ch remaining Fiscal Year based on the then existing development is at least equal to the sum of (a) 1.10 times the debt service necessary to support the remaining Outstanding Bonds in each corresponding Fiscal Year, and (b) Administrative Expenses), and (ii) all authorized CFD No. 117 Bonds have already been issued or the Council has covenanted that it s hall not issue any additional CFD No. 117 Bonds (except refunding bonds) to be supported by the Facilities Special Tax in CFD No. 117.
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 9 (5). Multiple Land Uses
In some instances an Assessor’s Parcel may contain both Developed Property and Undeveloped Property. In such cases, the Acreage o f the Assessor’s Parcel shall be allocated between Developed Property and Undeveloped Property based on the portion of the Assessor’s Parcel for which building permits ha d been issued prior to May 1 of the prior Fiscal Year and the portion of the Assessor’s Parcel for which building permits had not been issued prior to May 1 of the prior Fiscal Year.

Furthermore, Developed Property may contain more th an one Land Use Class. In such cases, the Acreage that is considered Developed Pro perty shall be allocated between Residential Property and Non-Residential Property b ased on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum Facilities Special Tax that can be levied on such Assessor’s Parcel shall be the sum of the Maximum Facilities Special Tax that can be levied on each type of property located on that Assessor’s Parcel.

The CFD Administrator’s allocation to each type of property shall be final. b. Undeveloped Property, Taxable Public Property, a nd Taxable Property Owner Association Property
The Maximum Facilities Special Tax for each Assessor’s Parcel of Undeveloped Property, Taxable Public Property, and Taxable Property Owner Association Property shall be $50,190 per Acre and shall not be subject to escalation and shall therefore remain the same in every Fiscal Year.

2. Services Special Tax
For purposes of the Services Special Tax, an Assess or(s) Parcel of Developed Property within a Final Residential Subdivision shall be assigned to Land Use Class 1, as identified in Table 2 below.

Non-Residential Property shall be assigned to Land Use Class 2. Furthermore, the Services Special Tax levied against each Assessor’s Parcel w ithin a Final Residential Subdivision shall be based on the number of residential dwelling units f or which building permits have been issued or are expected to be issued for such Assessor’s Parce l, as determined by the CFD Administrator based on such Final Residential Subdivision or other available documents. a. Maximum Services Special Tax
The Fiscal Year 2026-2027 Maximum Services Special Tax for each Land Use Class of Developed Property is shown below in Table 2.

Table 2
Maximum Services Special Tax for Developed Property
City of Fontana CFD No. 117 (Southridge)

Land Use
Class

Description

Fiscal Year 2026-2027
Maximum Services Special Tax
1 Final Residential Subdivision $1,080.45 per unit
2 Non-Residential Property $13,765.00 per Acre

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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 10 b. Increase in the Maximum Services Special Tax
The Maximum Services Special Tax in Table 2 above s hall be applicable for Fiscal Year 2026-2027, and shall increase thereafter, commencing on July 1, 2027, and on each July 1 thereafter by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year.
c. Multiple Land Uses
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. In such cases, the Acreage of Deve loped Property shall be allocated between Residential Property and Non-Residential Pr operty based on the amount of Acreage designated for each land use as determined by reference to the site plan approved for such Assessor's Parcel. The Maximum Services Special Tax that can be levied on such Assessor’s Parcel shall be the sum of the Maximum Services Special Tax that can be levied on each type of property located on that Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

1. Facilities Special Tax
Commencing with Fiscal Year 2026-2027, and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requirement for Facilities and shall provide for the levy of the Facilities Special Tax each Fiscal Year as follows:

First: The Facilities Special Tax shall be levied on each Assessor’s Parcel of Developed Property in an amount equal to 100% of the applicable Assigned Facilities Special Tax; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Facilities Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the Maximum Facilities Special Tax for Undeveloped Property;
Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the l evy of the Facilities Special Tax on each Assessor's Parcel of Developed Property whose Maxim um Facilities Special Tax is determined through the application of the Backup Facilities Special Tax shall be increased in equal percentages from the Assigned Facilities Special Tax up to the Maximum Facilities Special Tax for each such Assessor's Parcel;
Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Facilities Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property and Taxable Property Owner Association Property at up to 100% of the Maximum F acilities Special Tax for Taxable Public Property and Taxable Property Owner Association Pro perty, as needed to satisfy the Special Tax Requirement for Facilities.

Notwithstanding the above, the CFD Administrator sh all, in any Fiscal Year, calculate a levy Proportionately less than 100% of the Assigned Faci lities Special Tax in step one (above), when (i) the CFD Administrator is no longer required to provide for the levy of the Facilities Special Tax pursuant to steps two through four above in ord er to meet the Special Tax Requirement for Facilities; and (ii) all authorized CFD No. 117 Bonds have already been issued or the Council has 702

City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 11 covenanted that it shall not issue any additional C FD No. 117 Bonds (except refunding bonds) to be supported by the Facilities Special Tax.

Further notwithstanding the above, under no circumstances shall the Facilities Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued (in accordance with Section 53321(d)(3) of the California Government Code), be increased as a cons equence of delinquency or default by the owner of any other Assessor’s Parcel within CFD No. 117 by more than ten percent above the amount that would have been levied in that Fiscal Y ear had there never been any such delinquencies or defaults. To the extent that the levy of the Facilities Special Tax on Residential Property is limited by the provision in the previous sentence, the levy of the Facilities Special Tax on each Assessor’s Parcel of Non-Residential Proper ty shall continue in equal percentages up to 100% of the applicable Maximum Facilities Special Tax.

2. Services Special Tax
Commencing with Fiscal Year 2026-2027, and for each following Fiscal Year, the CFD Administrator shall determine the Special Tax Requi rement for Services and shall levy the Services Special Tax Proportionately on each Assess or’s Parcel of Developed Property at up to 100% of the applicable Maximum Services Special Tax as needed to satisfy the Special Tax Requirement for Services;
E. EXEMPTIONS

1. Facilities Special Tax
No Facilities Special Tax shall be levied on up to 12.22 Acres of Public Property and/or Property Owner Association Property in CFD No. 117. Tax-exe mpt status shall be assigned by the CFD Administrator in the chronological order in which p roperty in CFD No. 117 becomes Public Property or Property Owner Association Property. H owever, should an Assessor’s Parcel no longer be classified as Public Property or Property Owner Association Property, it shall, from that point forward, be subject to the Facilities Special Tax.

Notwithstanding the above, an Assessor’s Parcel in CFD No. 117 that is transferred to a public agency or property owner’s association prior to the issuance of the first series of CFD No. 117 Bonds that causes the Acreage of Public Property an d Property Owner Association Property to exceed the 12.22 Acreage limit that can be designat ed by the CFD Administrator under this Section E.1 shall also be exempted from paying the Facilities Special Tax.

Public Property or Property Owner Association Prope rty that is not exempt from the Facilities Special Tax under this Section E.1 shall be subject to the levy of the Facilities Special Tax and shall be taxed Proportionately as part of the fourt h step in Section D herein, at up to 100% of the applicable Maximum Facilities Special Tax for Taxab le Public Property and Taxable Property Owner Association Property.

In addition, no Facilities Special Tax shall be lev ied on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households Welfare Exemption Property be exempt from the Facilities Special Tax, then the Facilities Special Tax shall be levied on such Assessor’s Parcel in accordance with this Amended Rate and Method of Apportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

2. Services Special Tax
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City of Fontana June 25, 2026
Community Facilities District No. 117 (Southridge) Page 12 No Services Special Tax shall be levied on Undevelo ped Property, Taxable Public Property, Taxable Property Owner Association Property, Public Property, or Property Owner Association Property.

In addition, no Services Special Tax shall be levie d on Lower Income Households Welfare Exemption Property, provided that if, in any Fiscal Year, applicable law does not require that an Assessor’s Parcel that is Lower Income Households Welfare Exemption Property be exempt from the Services Special Tax, then the Services Special Tax shall be levied on such Assessor’s Parcel in accordance with this Amended Rate and Method of Apportionment as if such Assessor’s Parcel were not classified as Lower Income Households Welfare Exemption Property.

F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 117 may directly bill the Special Tax, and/or may collect Special Taxes at a different time or in a different manner if necessary to meet financial obligations, and, to the extent of the Facilities S pecial Tax, may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels.

G. APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on his/her Assessor’s Parcel is in error may submit a written appeal to the CFD Administrator, provided that the appellant is current in his/her payment of Spec ial Taxes. During the pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the a ppellant of its determination. If the CFD Administrator agrees with the appellant, a cash ref und shall not be made (except for the last year of levy), but the amount of the Special Tax levied shall be appropriately modified through an adjustment to the Special Tax levy in the following Fiscal Year. If the CFD Administrator disagrees with the appellant and the appellant is d issatisfied with the determination, the appellant then has 30 days in which to appeal to the Council by filing a written notice of appeal with the City Clerk, provided that the appellant is current in his/her payment of Special Taxes. This second appeal must specify the reasons for its disagreement with the CFD Administrator's determination.