Fountain Valley City Council
April 18, 2023

City Council Regular Meeting Agenda Page 1 April 18, 2023

AGENDA CITY COUNCIL/ SUCCESSOR

AGENCY TO THE FOUNTAIN

VALLEY AGENCY

FOR COMMUNITY DEVELOPMENT/

FOUNTAIN VALLEY HOUSING AUTHORITY
Closed Session 5:00 p.m.

Regular Meeting 6:00 p.m.

Tuesday, April 18, 2023
Council Chambers
10200 Slater Avenue
Fountain Valley, CA 92708
http://www.fountainvalley.org

MEETING ASSISTANCE: In compliance with the Americans with Disabilities Act, anyone needing special assistance to participate in a meeting of the government bodies listed herein should contact the City Clerk’s Office at (714) 593-4445. Notification 72 hours prior to the meeting allows the City to make reasonable arrangements to ensure accessibility to the meeting.

AGENDA COMMUNICATIONS: All revised or additional documents and writings related to an item on this agenda provided to all or a majority of the government body members after distribution of the agenda packet, are available for public inspection (1) in the City Clerk’s Office at 10200 Slater Avenue, Fountain Valley, CA 92708 during normal business hours; and (2) in the Council Chambers at the time of the meeting. Unless directed otherwise by a government body listed herein all actions shall be based on/memorialized by the latest document submitted as a late communication.

PUBLIC COMMENTS/PUBLIC HEARINGS: Persons wishing to address the City Council or other government body listed complete a speaker card and give it to the City Clerk prior to the public comment period. Requests to speak will not be accepted after the public comment session begins without permission of the Mayor/Chair. Speakers must limit remarks to a total of (3) three minutes and address the City Council through the Mayor. Comments to individuals or staff are not permitted. Scheduled Matters, including Public Hearings: Indicate on the card what item you want to address. Unscheduled Matters: Indicate on the card what subject matter you want to address. Comments must be related to issues that are within the jurisdiction of the governing body listed on the agenda. Pursuant to the Brown Act, the governing body may not enter into discussion regarding items not on the agenda.

CONSENT CALENDAR: All matters listed under the Consent Calendar are considered by the governing bodies listed herein to be routine and will be enacted on simultaneously with one motion without discussion unless separate action and/or discussion is requested by a governing body member, staff, or a member of the public.

PUBLIC HEARINGS: Persons wishing to speak in favor of or in opposition to a proposal are given an opportunity to do so during the public hearing. Those wishing to address a governing body during the hearing are requested to complete the speaker card and submit it to the City Clerk prior to the hearing. If a proposed action is challenged in court, there may be a limitation to raising only those issues raised during the hearing or in written correspondence received by the governing body at or before the hearing.

Note: The Fountain Valley City Council serves as the Successor Agency to the Fountain Valley Agency for Community Development (Successor Agency), the Fountain Valley Housing Authority, and the Fountain Valley Finance Authority. The Actions of the Successor Agency are separate and apart from the actions of the City Council.

ZOOM LINK INFORMATION
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• All public comments are allowed up to 3 minutes to speak.

Topic: City Council
Time: Apr 18, 2023 06:00 PM Pacific Time (US and Canada) Join Zoom Meeting
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CLOSED SESSION
CALL TO ORDER 5:00 p.m.

PUBLIC COMMENTS (Closed Session matters only)
Persons wishing to speak on a Closed Session matter are requested to identify themselves by completing a blue speaker card indicating the item they want to address and to give the card to the City Clerk prior to the public comment period.

1. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
(Paragraph (1) of subdivision (d) of Section 54956.9)
Name of case: Auster v. City of Fountain Valley OCSC Case No. 30-2020-01158809

2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Property: 17101 Bushard (APN: 167-301-04)
Agency Negotiators: Maggie Le, City Manager; Omar Dadabhoy, Community Development Director/Deputy City Manager; Ryan Smith, Finance Director; Colin Burns, Attorney for the City; Bill McQuaid, Fire Chief, Celeste Brady, Special Counsel Negotiating Parties: Kim Raeburn Henry, as Trustee, of The BSK Family Trust, Dated December 18, 2020
Direction re Price and terms of payment.

OPEN SESSION
CALL TO ORDER 6:00 p.m.

INVOCATION
SALUTE TO THE FLAG Council Member Ted Bui

CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY/ ROLL CALL Council Members: Bui, Cunneen, Harper, Mayor Pro Tem/Vice Chair Grandis, Mayor/Chair Constantine

ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS

CITY MANAGER / MAYOR UPDATE

FIRST CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
The Unscheduled Matters Public Comments portion will last 15 Minutes at the beginning of the meeting. Any requests to speak on unscheduled matters after the initial 15 minutes, will be heard at the end of the meeting, unless the Mayor approves an extension of this time. If an individual speaks during the First unscheduled matters time period, they do not get to speak at the end of the meeting as well. Persons wishing to speak on an unscheduled matter are requested to identify themselves by completing a blue speaker and to give the card to the City Clerk. Each person will have up to 3 minutes to speak. The City Clerk will call upon those that wish to speak.

PUBLIC COMMENTS (Scheduled Matters Only)
Persons wishing to speak on Agenda item(s) are requested to identify themselves by completing a blue speaker card indicating the item they want to address and to give the card to the City Clerk prior to the public comment period. Each person will be given up to 3 minutes to speak on the entire Consent Calendar, 3 minutes to speak on each item pulled from the consent calendar, and 3 minutes to speak on any agendized item(s) not appearing on the Consent Calendar.

CONSENT CALENDAR
Consent Calendar Items 1 - 5 will be approved simultaneously with one motion, unless separate action/or discussion is requested.

1. Waive the reading in full of all ordinances under consideration and direct the Mayor to read by titles only

2. Receive and File the Draft Minutes of the April 4, 2023 Regular City Council Meeting Page 6

3. City of Fountain Valley Six Month Strategic Objectives Update for November 17, 2022 through May 11, 2023 Page 12
Recommended Action: Staff recommends that the City Council Receive and File the Six Month Strategic Objectives matrix for November 17, 2022 through May 11, 2023

4. Award of Contract for Environmental Services to Phil Martin for the Our Lady of Guadalupe Project Page 18
Recommended Action: Staff is requesting City Council approve Alternative No. 1 to approve a contract to Phil Martin & Associates for planning and environmental services as specified in the attached scope of work

5. Adopt a Resolution of Intent of the City Council to Withdraw from Prism Insurance Pool Page 51
Recommended Action: Staff is requesting the City Council Approve Alternative No. 1: Adopt a Resolution of Intent of the City Council of the City of Fountain Valley to Withdraw from the Prism Insurance Pool

PUBLIC HEARINGS
Each person will have up to 3 minutes to speak on each Public Hearing.

6. Adopt a Resolution of Intention and Approve a First Reading of an Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley – Presentation by Mario Espindola, Sr. Human Resources Analyst Page 55
Recommended Action: Staff recommends Alternative No. 1: To approve the Resolution of Intention and Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley

ADMINISTRATIVE ITEMS

7. Approve the purchase of Nutanix HCI, and authorize the City Manager to execute an agreement with IMPEX Technologies – Presentation by Scott Kim, IT Director Page 68

8. Authorize the Finance Director to create a Measure HH Reserve and assign $23,261,479 of General Fund Capital Project reserves to the newly created Measure HH reserve – Presentation by Ryan Smith, Finance Director Page 72

9. Adopt the City Council Resolution that: (a) makes certain findings under CEQA, (b) approves the Purchase and Sale Agreement to acquire the Property located at 17101 Bushard Street, Fountain Valley, CA 92708 for a purchase price of $8,125,000, (c) authorizes and directs the City Manager to take all necessary steps to close escrow and complete the purchase of the Property; and (d) appropriates General Fund reserve assigned to Measure HH in the amount of $8,185,000 to purchase the property and pay all closing costs and installation of security measures – Presentation by Omar Dadabhoy, Deputy City Manager/Community Development Director Page 76

COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION

CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
Persons wishing to speak on an unscheduled matter are requested to identify themselves by completing a blue speaker and to give the card to the City Clerk. Each person will have up to 3 minutes to speak. The City Clerk will call upon those that wish to speak.

CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY AB 1234/GENERAL

COMMENTS

ADJOURN THE MEETING OF THE CITY COUNCIL/SUCCESSOR

AGENCY/HOUSING AUTHORITY
The next Regular Meeting of the Fountain Valley City Council is May 2, 2023 at 6:00 p.m., in the Fountain Valley Council Chambers, 10200 Slater Avenue, Fountain Valley.

MINUTES OF THE

CITY COUNCIL/ SUCCESSOR AGENCY TO THE FOUNTAIN

VALLEY AGENCY

FOR COMMUNITY DEVELOPMENT/ FOUNTAIN VALLEY

HOUSING AUTHORITY
Closed Session 4:30 p.m.

Study Session 5:25 p.m.

Regular Meeting 6:00 p.m.

Tuesday, April 4, 2023
Council Chambers

CLOSED SESSION
CALL TO ORDER 4:30 p.m.

PUBLIC COMMENTS (Closed Session matters only)
There were no public comments

1. CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9: 1 potential case
There was no reportable action.

2. CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Paragraph (1) of subdivision (d) of Section 54956.9
Name of case: WISP v. City of Fountain Valley (Federal Communications Commission) There was no reportable action.

STUDY SESSION
CALL TO ORDER 5:25 p.m.

PUBLIC COMMENTS (Study Session matters only)
There were no public comments
 Sidewalk Vending Presentation - Presented by Christine Lane – Orange County Environmental Health Division
Christine Lane provided an update on how the County treats sidewalk vending and the applicable laws, and Daniel Lopez provided the city’s laws in regards to street vendors and doorto-door solicitors.

OPEN SESSION
CALL TO ORDER 6:00 p.m.

INVOCATION Pastor Gary Garcia
SALUTE TO THE FLAG Mayor Kim Constantine

CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY/ ROLL CALL Council Members Present: Bui, Cunneen, Harper, Mayor Pro Tem/Vice Chair Grandis, Mayor/Chair Constantine

Council Members Absent: None

ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS
None

CITY MANAGER / MAYOR UPDATES
City Manager Maggie Le spoke about a planned power outage, the compost give away and the Easter Egg Hunt.

Mayor Constantine spoke about the website revamp that the city will be conducting as well as the Federal Funding the city received to have 8 intersections updated to have left hand turn protected signals.

PRESENTATIONS
 Proclamation Recognizing April as Donate Life Month – Presentation by Mayor Constantine Mayor Constantine presented the proclamation to Maria Jimenez of One Legacy.  Community Service Day – Presentation by Jynene Johnson of the Greater Huntington Beach Interfaith Council
Jynene Johnson presented the information about this year’s Community Clean-up Day. Mayor Constantine presented her with a proclamation.

FIRST CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
Katy Wright

CONSENT CALENDAR
Consent Calendar Items 1-2 and 4-5 were approved simultaneously.

1. Waive the reading in full of all ordinances under consideration and direct the Mayor to read by titles only.

ACTION: Move to Waive the reading in full of all ordinances under consideration and direct the Mayor to read by titles only.

MOTION: Grandis SECOND: Cunneen
AYES: Bui, Cunneen, Harper, Grandis, Constantine
NOES: None
ABSENT: None
ABSTAIN: None

2. Receive and File the Draft Minutes of March 21, 2023 Regular City Council Meeting ACTION: Move to Receive and File the Draft Minutes of March 21, 2023 Regular City Council Meeting
MOTION: Grandis SECOND: Cunneen
AYES: Bui, Cunneen, Harper, Grandis, Constantine
NOES: None
ABSENT: None
ABSTAIN: None

3. Pulled by Mayor Constantine
Second Reading and Adoption of an Ordinance of the City Council of the City of Fountain Valley Increasing the Campaign Contribution Limit to Adjust for Inflation ACTION: Move to Approve the Second Reading and Adoption of an Ordinance of the City Council of the City of Fountain Valley Increasing the Campaign Contribution Limit to Adjust for Inflation
MOTION: Grandis SECOND: Bui
AYES: Bui, Cunneen, Grandis,
NOES: Harper, Constantine
ABSENT: None
ABSTAIN: None

4. Approve a Resolution Ratifying the Director of Emergency Service’s Proclamation of the Existence of a Local Emergency Due to the 2023 California Rainstorms ACTION: Move to Approve a Resolution Ratifying the Director of Emergency Service’s Proclamation of the Existence of a Local Emergency Due to the 2023 California Rainstorms
MOTION: Grandis SECOND: Cunneen
AYES: Bui, Cunneen, Harper, Grandis, Constantine
NOES: None
ABSENT: None
ABSTAIN: None

5. Approve a First Amendment to CON-20-53 to Increase Hourly Rate for Barber & Bauermeister for Claims Defense Legal Services
ACTION: Move to Approve a First Amendment to CON-20-53 to Increase Hourly Rate for Barber & Bauermeister for Claims Defense Legal Services MOTION: Grandis SECOND: Cunneen
AYES: Bui, Cunneen, Grandis, Constantine
NOES: None
ABSENT: None
ABSTAIN: Harper

ADMINISTRATIVE ITEMS

6. Consideration and Direction in Regards to Whether the City Continues to Participate with PRISM-EIA or Return to the Previous Insurance Program California Joint Powers Insurance Authority (CalJPIA)
Public Comment: Cheryl Brothers
ACTION: Move to Approve the city joining CalJPIA Insurance Program MOTION: Bui SECOND: Grandis
AYES: Bui, Cunneen, Harper, Grandis, Constantine
NOES: None
ABSENT: None
ABSTAIN: None

COUNCIL MEMBER ITEMS FOR FUTURE CONSIDERATION
Mayor Constantine requested that the vendor / solicitor ordinance be brought back with more specific language. Seconded by Council Member Bui.

CITY COUNCIL/ SUCCESSOR AGENCY/ HOUSING AUTHORITY/ PUBLIC COMMENTS (Unscheduled Matters Only)
None
CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY AB 1234/GENERAL COMMENTS Council Member Bui
March 29 Attended the ABA OC Small Business Development Day March 30 Attended the Measure HH Committee Meeting
March 31 Attended Senator Janet Nguyen’s District Office Grand Opening Council Member Cunneen
March 30 Attended the Mayor’s Breakfast
Mayor Pro Tem Grandis
March 22 Attended the OC Sanitation Board meeting
March 23 Attended the Kiwanis Board meeting and the FV Regional Hospital Board Meeting March 25 Attended the Walk with Parks event
March 28 Attended the Finance Ad-Hoc Subcommittee meeting and the Boys and Girls Club of Huntington Valley Board Meeting
March 31 Attended the Boys and Girls Club of Huntington Valley Board retreat and Senator Janet Nguyen’s District Office Grand Opening
April 1 Attended the FV Living Magazine Patrons Party
April 3 Attended the FV Schools Foundation Board meeting Mayor Constantine
March 2 I participated in the City Insurance Renewals Meeting at City Hall.

March 24 I stopped by the “Queen Bees” Movie at the Fountain Valley Community land Senior Center.

March 25 I was pleased to participate in the United Way Walk with Parks Journey to 100” that started out at the FV Recreation Center.

March 28 I participated in the Finance Ad Hoc Meeting at City Hall, then watched the OC Board of Supervisors Meeting on the County website.

March 29 I attended the Asian Business Association of Small Business Development Day event at the Embassy Suites in Garden Grove.

March 30 I hosted the first Mayor’s Breakfast of 2023 at the Fountain Valley Surgery Center (Fountain Valley Hospital), then met with a local developer at City Hall, attended the Measure HH Oversight Advisory Committee Meeting at City Hall, then attended the

Fountain Valley Republican Assembly Meeting at IHOP on Beach Blvd., in Huntington Beach.

March 31 I attended the 59th Birthday Celebration at our Black Angus.

April 1 I attended the Fountain Valley Living Magazine Patrons Party at the FV Recreation Center, then again attended the 59th Birthday Celebration at Black Angus.

April 2 I attended the FV Moms Easter Celebration & Kids Easter Egg Hunt at Plavan Elementary School.

April 3 I volunteered at the Friends of the Fountain Valley Library pulling dot books and packing them in boxes for an upcoming book sale.

April 4 I attended the FV Rotary Meeting at Founders Village Community and Senior Center. Our School Superintendent did a Safe Schools presentation.

Council Member Harper
March 22 Attended the OCTA Finance Committee
March 24 Attended the SARFPA Board Meeting
March 27 Attended the OCTA Board meeting
March 30 Attended the Mayors Breakfast and Measure HH Committee Meeting March 31 Attended Senator Janet Nguyen’s District Office Grand Opening April 3 Attended the OCTA regional Planning meeting

ADJOURN THE MEETING OF THE CITY COUNCIL/SUCCESSOR AGENCY/HOUSING

AUTHORITY

Mayor Constantine adjourned the meeting at 6:56 pm to the next Meeting of the Fountain Valley City Council on April 18, 2023 at 6:00 p.m., in the Fountain Valley Council Chambers, 10200 Slater Avenue, Fountain Valley.
________________________________________________________________________________________________________________________________ Kim Constantine, Mayor
Attest:
___________________________
Rick Miller, City Clerk

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: City of Fountain Valley Six Month Strategic Objectives Update for November 17, 2022 through May 11, 2023
Three-Year Strategic Goals
☒ Enhance the culture and environment of “A Nice Place to Live” ☒ Attract and retain revenue producing businesses and opportunities ☒ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☒ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY:

On November 17, 2022, the City Council held a strategic planning session to help clearly define the goals and priorities of the City in which a finalized Six Month Strategic Objectives Matrix for November 17, 2022 through May 11, 2023 has been prepared for adoption. This report is the monthly update as to the progress staff has made towards accomplishing the objectives. The City Council will be updated monthly with the ongoing progress and status of all the items on the Strategic Plan.

DISCUSSION:

During the city’s strategic planning session on November 17, 2022, the City Council, management and staff in attendance reviewed the previously established mission statement, three-year goals and six-month strategic planning objectives. The strategic plan has and will continue to serve as a guideline for both the City Council and staff as we work to achieve our goals over the next few years.

Our strategic planning efforts reconfirmed the existing city mission statement that states; “The City of Fountain Valley delivers cost-effective quality public services to provide a safe and desirable community that enriches its residents and businesses.” The three-year goals established by City Council in 2020 were reviewed and discussion occurred to determine what the next three-year goals should be.

Six Month Strategic Objectives
April 18, 2023

The recommended 2020 - 2023 goals are:
o Enhance the culture and environment of “A Nice Place to Live” o Attract and retain revenue producing businesses and opportunities o Achieve fiscal stability in accordance with the 20-Year Financial Plan o Attract and retain quality staff
During the November 17, 2022 Strategic Planning Retreat six-month objectives were established in support of these goals. These objectives and staff’s progress toward achieving them are attached for your reference under Attachment No. 1.

FINANCIAL REVIEW:

There are no financial impacts related to this update.

ATTORNEY REVIEW:

City Attorney review was not necessary for this item.

ALTERNATIVES:

Alternative No. 1: Receive and File the updated Six-Month Strategic Objectives Matrix for November 17, 2022 through May 11, 2023
Alternative No. 2: Direct staff to take an alternate action.

RECOMMENDATION:

Staff recommends that the City Council Receive and File the Six Month Strategic Objectives matrix for November 17, 2022 through May 11, 2023.

Prepared By: Rick Miller, City Clerk
Approved By: Maggie Le, City Manager
Attachment 1: Updated Six Month Strategic Objectives Matrix for November 17, 2022 through May 11, 2023

A

C I T Y O F F O U N T A I N V A L L E Y

SIX-MONTH STRATEGIC OBJECTIVES
N o v e m b e r 1 7 , 2 0 2 2 – M a y 1 1 , 2 0 2 3
THREE-YEAR GOAL: ENHANCE THE CULTURE AND ENVIRONMENT OF “A NICE PLACE TO LIVE”

WHEN WHO WHAT STATUS COMMENTS

DONE ON
TARGET
REVISE
D
BUDGET

1. By March 7,
2023, City
Council meeting
City Clerk-lead, Community
Services Director, and IT
Manager
Develop and make available to the public, a survey to
gauge if Fountain Valley is “A Nice Place to Live.”
Future Strategic Planning goals will include the actual dissemination of the survey to determine the public’s
perception of the City, identify issues in need of
improvement and implement programs to make
Fountain Valley “A Nice Place to Live”.

X
N/A Due to other priority
projects, just moving the
date back.

Completed on March 2nd.

2. By March 21,
2023, City
Council meeting
Police Chief-lead, Community
Services Director, Community
Development Director
Design and present to the City Council, a publication
that identifies a focused approach to support a
continuum of care and crisis support for the unhoused
population in Fountain Valley.

Success for this objective will be the creation of a
publication that informs the public how the City
provides a consistent well-developed approach to
assisting our unhoused population
X
N/A Date changed from
February to March 21st.

Publication presented to
Council and available for
public dissemination.

3. By March 23,
2023, City
Council meeting
Community Services Director Develop and present to the City manager, a unified messaging platform for the City to help brand public
facing information and reinforce “one voice” from the
City.

X $18,250
-
$27,375
Staff has worked with a
consultant to develop a
“One Voice” brand and
has presented to the City
Manager for direction

B
THREE-YEAR GOAL: ATTRACT AND RETAIN REVENUE PRODUCING BUSINESSES AND

OPPORTUNITIES

WHEN WHO WHAT STATUS COMMENTS

DONE ON
TARGET
REVISE
D
BUDGET

1. By March 21, 2023.
with updates provided
in City Council
Communicator
Community
Development
Director-lead, IT
Manager, Public
Works Director
Create a survey for the business community that will
identify their technology needs and identify opportunities for supporting the business community through the
provision of fiber optic cabling. This survey to be utilized in the site visits outlined in Objective 2.

X N/A Survey drafted and
distributed per No. 2,
below

2. By April 30, 2023 with
updates provided in
City Council
Communicator
Community
Development
Director-lead, IT
Manager
Conduct site visits to one business park and two shopping centers, surveying businesses on their needs, including technology, and focus on building relationships.

X
N/A Conducted site visits to
one business park and
one shopping center

3. By April 4, 2023. City
Council meeting
Finance Directorlead, Community
Development
Director, IT Manager
Evaluate the business license process identifying if online renewals and payments are possible.

X N/A On-line renewals and
payments are an
existing service
provided to the
business community

4. By May 16, 2023, City
Council meeting
Community
Development Director
Complete and present Economic Development plan
update. X
In current
budget
Meetings held with City
Council and business
leaders. Consultants
currently conducting
market research.

C
THREE-YEAR GOAL: ACHIEVE FISCAL STABILITY IN ACCORDANCE WITH THE 20-YEAR FINANCIAL PLAN

WHEN WHO WHAT STATUS COMMENTS

DONE ON
TARGET
REVISE
D
BUDGE
T

1. By May 6, 2023, City
Council meeting
Finance Director-lead
and Public Works
Director
Identify facilities in need of major repair or replacement and place in a newly created Fund.

X TBD Changed date from
March to May 6th.

2. January 17, 2023,
City Council meeting
Finance Director Establish a process and methodology for presenting the 20-year fiscal plan to the City Council and community.

X N/A Presented at the
joint City
Council/Measure
HH Committee
meeting on
February 16th. The
20-year Plan will be
updated each year
with the draft
budget and upon
completion of the
ACFR.

3. May 6, 2023, City
Council meeting
Finance Directorlead, Community
Development
Director, Public
Works Director,
Community Services
Director
Create an RFP for a Fees and Services study to ensure
fees continue to represent the true cost of providing
services.

X N/A

D
THREE-YEAR GOAL: ATTRACT AND RETAIN QUALITY STAFF

WHEN WHO WHAT STATUS COMMENTS

DONE ON
TARGE
T
REVIS
ED
BUDGET

1. By January 17,
2023, City
Council
meeting
City Attorney-lead
and HR Director
Create a process/protocol and platform for employees to bring forward issues related to comments/social media posts made by members of the legislative bodies regarding staff.

X N/A Attorney for the City to
email a memo to City
Council before 1/17/23.

2. By June 6,
2023, City
Council
Meeting
Cross City Committee
with
Oversite/Assistance
From Fire Chief and
HR Director
Present results from Engagement Team – Increase
Engagement of staff for teambuilding, equity, inclusion, retention, and morale.

X
$25,000 Council to perhaps
provide a budget for
future initiatives, or
potential next FY
budgeted items.

Revised date to June 6,
2023.

3. By June 6,
2023, City
Council
meeting
HR Director-lead,
Community Services
Director, Police Chief,
Public Works
Director, Fire Chief
Staff to identify creative solutions and options to address the current trends in workforce and labor market that are having a negative impact on recruitment and retention efforts.

X N/A Ideas for consideration
that may have a fiscal
impact, perhaps a
budget provided for
initiatives. Revised date
to June 6, 2023.

4. By June 6,
2023, City
Council
meeting
PW Director-lead,
Community Services
Director, HR Director,
Police Chief, and IT
Manager
Present to City Council suggested improvements to the
hiring and on-boarding process.

X $10,000/annu
ally
NeoGov OnBoard
Platform. Revised date
to June 6, 2023.

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: Award of Contract to Phil Martin & Associates, Inc. to Provide Environmental Services for a New Two Story 29-Unit Senior Affordable Unit Project at Our Lady Of Guadalupe Located At 17103 Magnolia Street Three-Year Strategic Goals
☐ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☐ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☒ Not applicable

EXECUTIVE SUMMARY
Our Lady of Guadalupe has submitted a request for the construction of a new two-story 13,498 square foot building for 29 senior affordable units at the Our Lady of Guadalupe property located at 17103 Magnolia Street. The project will include the processing of a General Plan Amendment, Zoning Map Amendment, Precise Plan, Conditional Use Permit, and an environmental review.

Pursuant to the provisions of the California Environmental Quality Act, (CEQA), an environmental assessment must be conducted to identify any potential environmental impacts associated with the proposed project before the Planning Commission and City Council consider the project.

The applicant will be responsible for paying the cost of the environmental assessment plus staff time to review.

DISCUSSION
Our Lady of Guadalupe has submitted a request for the construction of a new two-story 13,498 square foot building for 29 senior affordable units at the Our Lady of Guadalupe property located at 17103 Magnolia Street.

The 29 unit Project will have two (2) different floor plans with 15 studio units raging in size from 378 square feet to 422 square feet and 14 1-bedroom units at 556 square feet each.

The Project will be located directly west of the existing 3-story 71 senior affordable unit building on the property. Access to the Project will be provided by the existing property driveway located off of Magnolia Street.

To assist staff with the environmental review process for this Project a request for proposal was sent to sixteen (16) environmental consultants to provide a CEQA analysis

Council Action Request
Contact with Phil Martin & Associates, Inc.

City Council Meeting April 18, 2023

for the Project. Phil Martin & Associates (PMA) was the only consultant to return a proposal. Staff has reviewed the proposal and, based on the scope of work and budget, recommends that the City Council award a contract to PMA.

The proposal submitted by PMA includes the preparation of a screen check draft Initial Study/MND that will include an air quality, greenhouse gas, noise, and traffic reports, preparation and distribution of the staff approved Initial Study/MND, prepare responses to comments, and prepare a mitigation monitoring and reporting plan in accordance with the provision of the California Environmental Quality Act. PMA will also handle all public notices to appropriate agencies including filing the MND with CEQAnet, the State of California Office of Planning and Research’s online portal for all CEQA documents, and the County Recorders Office, attend and consult at public meetings, and file Notice of Determination and pay appropriate Fish and Game fees.

The following is a cost of Phil Martin & Associates proposal.

FINANCIAL REVIEW
There is no financial impact associated with approving the proposed contract. The applicant for the Project (Our Lady of Guadalupe) has submitted a check in the amount of $57,228.60 which is the combination of the contract price of $49,764 and $7,464.60 (15% of the contract price) as required by the 2020-2021 Comprehensive Fee Schedule (Resolution No. 9778) adopted by the City Council on February 2, 2021. The 15% fee is required for staff review of the environmental document. The total Project breakdown cost is below.

Phil Martin & Associates: $49,764.00
15% for staff review (Resolution 9778): $7,464.60

Council Action Request
Contact with Phil Martin & Associates, Inc.

City Council Meeting April 18, 2023

Project Total: $57,228.60

PUBLIC NOTIFICATION
Not applicable.

ENVIRONMENTAL IMPACT REVIEW
Not applicable.

ATTORNEY REVIEW
The Attorney for the City has reviewed and approved the contract.

ALTERNATIVES
Alternative No. 1: Approve a contract to Phil Martin & Associates for planning and environmental services as specific in the attached scope of work.

Alternative No. 2: Do not award a contract to Phil Martin & Associates and direct staff to secure the services of another environmental consultant.

Alternative No. 3: Continue the item for further consideration.

RECOMMENDATION:

Staff is requesting City Council approval of Alternative No. 1 to approve a contract to Phil Martin & Associates for planning and environmental services as specific in the attached scope of work.

Prepared by: Steven Ayers, Principal Planner
Reviewed by: Omar Dadabhoy, Deputy City Manager/Community Development Director
Procurement Review by: Amanda McCall, Mgmt. Analyst/ Purchasing Officer Fiscal review by: Ryan Smith, Finance Director
Approved by: Maggie Le, City Manager
Attachments: 1: Contract w/ Phil Martin

AGREEMENT FOR CONSULTANT SERVICES
CON – –
Phil Martin & Associates, Inc.

This AGREEMENT is made and effective as of the EFFECTIVE DATE, by and between the City of Fountain Valley, a municipal corporation ("CITY") and Phil Martin & Associates, Inc. ("CONSULTANT"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:

1. TERM
This AGREEMENT shall commence on April 19, 2023 (“EFFECTIVE DATE”) and remain and continue in effect until all tasks described herein are completed but in no event later than April 19, 2024, unless sooner terminated or extended pursuant to the provisions of this AGREEMENT.

2. SERVICES
CONSULTANT shall perform the tasks described and set forth in Exhibit A, attached hereto and incorporated herein as though set forth in full. CONSULTANT shall complete the tasks according to the schedule of performance which is also set forth in Exhibit A.

3. NOTICE TO PROCEED
CONSULTANT shall not perform any work or be entitled to any compensation under this AGREEMENT until a written Notice to Proceed is issued by CITY. The Notice to Proceed shall not issue unless and until CONSULTANT submits proof, satisfactory to CITY, of its procurement of appropriate insurance required by this AGREEMENT. The failure of CONSULTANT to submit proof of appropriate insurance within 10 days of the EFFECTIVE DATE is a material breach and shall constitute cause for immediate termination of this AGREEMENT by CITY.

4. PERFORMANCE
CONSULTANT shall always faithfully, competently, and to the best of his/her/its ability, experience, and talent perform all tasks described herein. CONSULTANT shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing similar services as are required of CONSULTANT hereunder in meeting its obligations under this AGREEMENT.

5. CITY MANAGEMENT
The Director of Community Development or his designee shall represent CITY in all matters pertaining to the administration of this AGREEMENT, including review and approval of all products submitted by CONSULTANT, but not including the authority to enlarge the tasks to be performed or change the compensation due to CONSULTANT. The City Manager shall be authorized to act on CITY’S behalf and to execute all necessary documents that enlarge the tasks to be performed or change CONSULTANT's compensation, subject to Section 6 hereof.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

6. PAYMENT
(a) CITY agrees to pay CONSULTANT in accordance with the payment rates, terms, and schedule of payment set forth in Exhibit A. This amount shall not exceed Fifty Seven Thousand Two-Hundred Twenty Eight Dollars and sixty cents $57,228.60 (“TOTAL CONTRACT SUM”) for the total term of this AGREEMENT unless additional payment is approved as provided in this AGREEMENT. The total amount includes the 15% to compensate for staff’s review.
(b) CONSULTANT shall not be compensated for any services rendered in connection with its performance of this AGREEMENT that are in addition to those set forth herein, unless such additional services are authorized in advance and in writing by the City Manager. This written authorization requirement cannot be waived. CONSULTANT shall be compensated for any additional services in the amounts and in the manner as agreed to by the City Manager and CONSULTANT at the time CITY’s written authorization is given to CONSULTANT for the performance of said additional services. The City Manager’s authority to approve additional compensation is subject to Fountain Valley Municipal Code section

2.36.110. Approval of additional compensation that exceeds the City Manager’s authority as specified in Fountain Valley Municipal Code section 2.36.110 must be obtained from the City Council.

7. PUBLIC WORK
Notice is provided pursuant to Labor Code Section 1781 that all or a portion of the work contemplated in this AGREEMENT may constitute a “public work” as defined in Chapter 1, Part 7, and Division 2 of the Labor Code, to which Section 1771 applies. If all or a portion of the work contemplated under this AGREEMENT constitutes “public work,” then CONSULTANT shall pay prevailing wages, unless exempt, on those portions of the work which require payment of prevailing wages under the prevailing wage laws (Labor Code, §§ 1720 et seq.), and shall comply with the following:
(a) Prevailing Wage Rates. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages can be found at
http://www.dir.ca.gov/OPRL/PWD/index.htm and are on file at City Hall, which shall be made available to any interested party upon request. CONSULTANT shall post a copy of the determination of the director of the prevailing rate of per diem wages at each job site. Said per diem wages are deemed to include employer payments for health and welfare, pension, vacation and travel time, and subsistence pay, all in accordance with Section 1773.1 of the Labor Code.
(b) Payroll Records. The provisions of Section 1776 of the Labor Code regarding the preparation, maintenance, and filing of payroll records are applicable to this AGREEMENT. CONSULTANT and each subconsultant shall keep accurate payroll records showing the name, address, social security number, work classification, straight time, and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by him/her/it about the public work. Certified payroll records shall be on forms provided by the Division of Labor Standards Enforcement or contain the same information.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

CONSULTANT’S AND ANY SUBCONSULTANT’S PAYROLL RECORDS SHALL BE SUBMITTED TO CITY ON A WEEKLY BASIS. CONSULTANT SHALL BE RESPONSIBLE FOR SUBMITTAL OF SUBCONSULTANT’S PAYROLL RECORDS. Additionally, CONSULTANT or subconsultant has ten (10) days in which to comply after receipt of a written notice requesting the records enumerated in Section 1776, subdivision (a), of the Labor Code. If CONSULTANT or subconsultant fails to comply within the ten (10) day period, he/she/it shall, as a penalty to CITY, forfeit One Hundred Dollars ($100.00) for each calendar day, or portion thereof, for each worker, until strict compliance is effectuated. CITY may deduct this penalty from any monies due or that may become due CONSULTANT under this AGREEMENT.
(c) Penalty. CONSULTANT and any subconsultant under CONSULTANT shall, as a penalty to CITY, forfeit not more than Two Hundred Dollars ($200.00) for each calendar day, or portion thereof, for each worker paid (either by CONSULTANT or any subconsultant under CONSULTANT) less than the prevailing rate set forth herein on the work provided for in this AGREEMENT. CITY may deduct the penalty from any monies due or that may become due CONSULTANT under this AGREEMENT. The difference between the prevailing wage rates and the amount paid to each worker for each calendar day, or portion thereof, for which each worker was paid less than the prevailing wage rate shall also be paid to each worker by CONSULTANT or subconsultant, in accordance with Section 1775 of the Labor Code of the State of California.
(d) Apprentices. If applicable, the provisions of Labor Code Section 1777.5 requiring the use of apprentices in certain ratios to journeymen are hereby imposed upon CONSULTANT.
(e) Legal Day’s Work. In the performance of this AGREEMENT, not more than eight (8) hours shall constitute a day’s work, and CONSULTANT shall not require more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in Labor Code Section 1815. CONSULTANT shall conform to Article 3, Chapter 1, Part 7 (Sections 1810 et seq.), of the Labor Code of the State of California, and it is agreed that CONSULTANT shall forfeit to CITY as a penalty the sum of Twenty-Five Dollars ($25.00) for each worker employed in the execution of this AGREEMENT by CONSULTANT or any subconsultant for each calendar day during which any worker is required or permitted to labor more than eight (8) hours in any one (1) calendar day and forty (40) hours in any one (1) week in violation of said article. CITY may deduct this penalty from any monies due or that may become due pursuant to this AGREEMENT.

8. SUSPENSION OR TERMINATION OF AGREEMENT WITHOUT CAUSE (a) CITY may at any time, for any reason, with or without cause, suspend or terminate this AGREEMENT, or any portion hereof, by serving upon CONSULTANT, at least thirty (30) days prior, written notice. Upon receipt said notice, CONSULTANT shall immediately cease all work under this AGREEMENT, unless the notice provides otherwise.

If CITY suspends or terminates a portion of this AGREEMENT such suspension or termination shall not make void or invalidate the remainder of this AGREEMENT.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

(b) In the event this AGREEMENT is terminated pursuant to this section, CITY shall pay to CONSULTANT the actual value of the work performed up to the time of termination, if the work performed is of value to CITY. Upon termination of the AGREEMENT pursuant to this section, CONSULTANT will submit an invoice to CITY detailing work performed up to the time of termination.

9. DEFAULT OF CONSULTANT
(a) CONSULTANT's failure to comply with the provisions of this AGREEMENT shall constitute a default. If CONSULTANT is in default for cause under the terms of this AGREEMENT, CITY shall have no obligation or duty to continue compensating CONSULTANT for any work performed after the date of default and can terminate this AGREEMENT immediately by written notice to CONSULTANT. If such failure by the CONSULTANT to make progress in the performance of work hereunder arises out of causes beyond CONSULTANT's control, and without fault or negligence of CONSULTANT, it shall not be considered a default.
(b) As an alternative to the procedure for immediate termination for default set forth in subparagraph (a), if CITY determines that CONSULTANT is in default in the performance of any of the terms or conditions of this AGREEMENT, CITY may in its discretion cause to be served upon CONSULTANT a written notice of the default and demand to cure. CONSULTANT shall have ten (10) calendar days after service upon it of said notice to cure the default by rendering a satisfactory performance. If CONSULTANT fails to cure its default within such period, CITY shall have the right, notwithstanding any other provision of this AGREEMENT, to terminate this AGREEMENT without further notice and without prejudice to any other remedy to which it may be entitled at law, in equity, or under this AGREEMENT.

10. OWNERSHIP OF DOCUMENTS
(a) CONSULTANT shall maintain complete and accurate records with respect to the plans, specifications, estimates, drawings, design calculations, letters, reports, testing results, and other such information including as-built records as required by CITY that relate to the performance of services under this AGREEMENT. CONSULTANT shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services.

All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. CONSULTANT shall provide free access to the representatives of CITY or its designees at reasonable times to such books and records; shall give CITY the right to examine and audit said books and records; shall permit CITY to make copies and transcripts therefrom as necessary; and shall allow inspection of all work, data, documents, proceedings, and activities related to this AGREEMENT. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

(b) Upon completion, termination, or suspension of this AGREEMENT all plans, specifications, engineer’s estimates, and other documents prepared in the course of providing the services to be performed pursuant to this AGREEMENT shall become the sole property of CITY and may be used, reused, or otherwise disposed of by CITY without the permission of CONSULTANT.

With respect to computer files, CONSULTANT shall make available to CITY, at CONSULTANT’s office and upon reasonable written request by CITY, the necessary computer software and hardware for purposes of accessing, compiling, transferring, and printing computer files.

11. INDEMNIFICATION
(a) Indemnification for Professional Liability.
(i) Indemnification for Professional Liability Generally. When the law establishes a professional standard of care for CONSULTANT’s services, to the fullest extent permitted by law, CONSULTANT shall indemnify, protect, defend, and hold harmless CITY and any and all of its officials, employees, and agents (“INDEMNIFIED PARTIES”) from and against any and all losses, liabilities, damages, costs, and expenses, including attorney’s fees and costs to the extent the same are caused in whole or in part by any negligent or wrongful act, error, or omission of CONSULTANT, its officers, agents, employees, or subconsultants (or any entity or individual that CONSULTANT shall bear the legal liability thereof) in the performance of professional services under this AGREEMENT.
(ii) Indemnification for Services of a Design Professional. If this AGREEMENT is for design professional services, CONSULTANT’s duty to defend, indemnity, and hold CITY harmless for CONSULTANT’s design professional liability shall be as provided in this paragraph. To the fullest extent permitted by law, CONSULTANT shall indemnify, protect, defend, and hold harmless INDEMNIFIED PARTIES from and against any and all losses, liabilities, damages, costs, expenses, and claims, including attorney’s fees and costs, to the extent the same arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the CONSULTANT. In no event shall the cost to defend charged to the CONSULTANT exceed the CONSULTANT’S proportionate percentage of fault. CONSULTANT shall not be liable for any injuries or property damage resulting from the reuse of the design at a location other than that specified in this AGREEMENT without the written consent of CONSULTANT. (b) Indemnification for Other Than Professional Liability. Other than in the performance of professional services and to the full extent permitted by law, CONSULTANT shall indemnify, defend, and hold harmless CITY, and any and all of its employees, officials, and agents from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses, or costs of any kind, whether actual, alleged, or threatened, including attorney’s fees and costs, court costs, interest, defense costs, and expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this AGREEMENT by CONSULTANT or by any individual or entity for which CONSULTANT is legally liable, including but not limited to officers, agents, Page 25 Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

employees, or subconsultants of CONSULTANT.
(c) General Indemnification Provisions. CONSULTANT agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this section from each subconsultant or any other person or entity involved by, for, with or on behalf of CONSULTANT in the performance of this AGREEMENT.

In the event CONSULTANT fails to obtain such indemnity obligations from others as required here, CONSULTANT agrees to be fully responsible according to the terms of this section.

Failure of CITY to monitor compliance with these requirements imposes no additional obligations on CITY and will in no way act as a waiver of any rights hereunder. This obligation to indemnify and defend CITY as set forth here is binding on the successors, assigns, or heirs of CONSULTANT and shall survive the termination of this AGREEMENT or this section.

Nothing in this indemnity shall be construed as authorizing any award of attorney’s fees in any action on or to enforce the terms of this Indemnity or AGREEMENT. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. (d) Indemnity Provisions for Contracts Related to Construction. This paragraph applies only when this AGREEMENT is related to construction. Without affecting the rights of CITY under any provision of this AGREEMENT, CONSULTANT shall not be required to indemnify and hold harmless CITY for liability attributable to the active negligence of CITY, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In instances where CITY is shown to have been actively negligent and where CITY’s active negligence accounts for only a percentage of the liability involved, the obligation of CONSULTANT will be for that entire portion or percentage of liability not attributable to the active negligence of CITY.

12. INSURANCE
Prior to performing any work or receiving any compensation under this AGREEMENT, CONSULTANT shall obtain, and thereafter maintain for the duration of this AGREEMENT, insurance coverage as specified in Exhibit B, attached hereto and incorporated herein as though set forth in full.

13. WARRANTY FOR GOODS
(a) If this AGREEMENT includes the purchase of equipment, supplies, or chattel (hereafter “GOODS”), CONSULTANT shall provide the following warranty of said GOODS, or obtain a warranty from the manufacturer and/or retailer with provisions equal to or exceeding those specified in this Section. In the event the manufacturer’s warranty or retailer’s warranty do not equal or exceed the protections specified in this Section, CONSUTLANT agrees to provide said warranty protections. The warranty described hereunder extends to the original purchaser of the GOODS warranted under the warranty, and to each transferee owner of the GOODS. The term of this warranty begins on the date the GOODS are delivered to CITY, and continues therefrom. CONSULTANT warrants that:
(1) The GOODS will function properly under normal use, will be of good workmanship, free from defect, of merchantable quality, and fit for CITY’s intended use;

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

(2) The GOODS will fully comply with any specifications provided by CITY and any samples or documentation provided by CONSULTANT; (3) The GOODS will be free of any security interests, liens, or encumbrances and CONSULTANT has title to the GOODS;

(4) The GOODS will not violate any intellectual property rights of any third party;
(5) The GOODS will be delivered free of the rightful claim of a third person by way of infringement; and
(6) The GOODS are merchantable in accordance with Commercial Code Section 2314.
(b) The warranty listed above is in addition to any other warranties made by CONSULTANT, the manufacturer, retailer, or imposed by law. All warranties will survive inspection and payment by CITY and are assignable to CITY’s successors and assigns. If any GOODS do not meet the warranty, CITY may, at CITY’s option, and without additional cost to CITY:
(1) Require CONSULTANT to repair or replace the GOODS until the GOODS meet the warranty. If CONSULTANT cannot replace the GOODS and repair either is not commercially practicable or cannot be made within three (3) days, CONSULTANT will refund the purchase price;
(2) Return any of the GOODS to CONSULTANT at CONSULTANT’s expense for a full refund;
(3) Correct the nonconformance and charge CONSULTANT for the costs to make the correction; or
(4) Engage a third party to provide substitute GOODS and charge CONSULTANT for the costs of obtaining the substitute GOODS from the third party.

14. INDEPENDENT CONTRACTOR
(a) CONSULTANT is and shall at all times remain as to the CITY a wholly independent contractor. The personnel performing the services under this AGREEMENT on behalf of CONSULTANT shall at all times be under CONSULTANT's exclusive direction and control. Neither CITY nor any of its officers, employees, or agents shall have control over the conduct of CONSULTANT or any of CONSULTANT's officers, employees, or agents, except as set forth in this AGREEMENT. CONSULTANT shall not at any time or in any manner represent that it or any of its officers, employees, or agents are in any manner officers, employees, or agents of the CITY. CONSULTANT shall not incur or have the power to incur any debt, obligation, or liability whatsoever against CITY, or bind CITY in any manner.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

(b) No employee benefits shall be available to CONSULTANT in connection with the performance of this AGREEMENT. Except for the fees paid to CONSULTANT as provided in this AGREEMENT, CITY shall not pay salaries, wages, or other compensation to CONSULTANT for performing services hereunder for CITY. CITY shall not be liable for compensation or indemnification to CONSULTANT for injury or sickness arising out of performing services hereunder.

In addition to the indemnification provisions of Section 11, CONSULTANT shall indemnify, defend, and hold CITY harmless from claims or liability arising from CONSULTANT’s employees for CITY benefits including, but not limited to, pension, health benefits, holiday, vacations, etc.

15. LEGAL RESPONSIBILITIES
CONSULTANT shall keep itself informed of State and Federal laws and regulations which in any manner affect those employed by it or in any way affect the performance of its service pursuant to this AGREEMENT. CONSULTANT shall always observe and comply with all such laws and regulations. CITY, and its officers and employees, shall not be liable at law or in equity occasioned by failure of CONSULTANT to comply with this Section.

16. POLITICAL REFORM ACT
If the Political Reform Act requires CONSULTANT to file a Form 700, then CONSULTANT must file a Form 700 with full disclosure within 30 days of assuming office and thereafter must file an annual statement for each calendar year of this AGREEMENT.

17. UNDUE INFLUENCE
CONSULTANT declares and warrants that no undue influence or pressure is used against or in concert with any officer or employee of CITY about the award, terms, or implementation of this AGREEMENT, including any method of coercion, confidential financial arrangement, or financial inducement. No officer or employee of the CITY will receive compensation, directly or indirectly, from CONSULTANT, or from any officer, employee, or agent of CONSULTANT, in connection with the award of this AGREEMENT or any work to be conducted as a result of this AGREEMENT. Violation of this section shall be a material breach of this AGREEMENT entitling CITY to any and all remedies at law or in equity.

18. NO BENEFIT TO ARISE TO LOCAL EMPLOYEES
No member, officer, or employee of CITY, or their designees or agents, and no public official who exercises authority over or responsibilities with respect to the project during his/her tenure or for one year thereafter, shall have any interest, direct or indirect, in any agreement or sub-agreement, or the proceeds thereof, for work to be performed in connection with this AGREEMENT.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

19. RELEASE OF INFORMATION / CONFLICTS OF INTEREST
(a) All information gained by CONSULTANT in performance of this AGREEMENT shall be considered confidential and shall not be released by CONSULTANT without CITY’s prior written authorization. CONSULTANT, its officers, employees, agents, or subconsultants, shall not without written authorization from the City Manager or unless requested by the Attorney for the City, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories, or other information concerning the work performed under this AGREEMENT or relating to any project or property located within the CITY. Response to a subpoena or court order shall not be considered "voluntary" provided CONSULTANT gives CITY notice of such court order or subpoena. (b) CONSULTANT shall promptly notify CITY should CONSULTANT, its officers, employees, agents, or subconsultants be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, requests for admissions, or other discovery request, court order, or subpoena from any person or party regarding this AGREEMENT and the work performed thereunder or with respect to any project or property located within the CITY. CITY retains the right, but has no obligation, to represent CONSULTANT and/or be present at any deposition, hearing, or similar proceeding.

CONSULTANT agrees to cooperate fully with CITY and to provide the opportunity to review any response to discovery requests provided by CONSULTANT. However, CITY's right to review any such response does not imply or mean the right by CITY to control, direct, or rewrite said response.

20. SECURITY OF INFORMATION
CONSULTANT shall identify reasonably foreseeable internal and external risks to the privacy and security of personal information acquired during performance of this AGREEMENT that could result in the unauthorized disclosure, misuse, alteration, destruction, or other compromise of the information. CONSULTANT shall regularly assess the sufficiency of any safeguards and information security awareness training in place to control reasonably foreseeable internal and external risks, and evaluate and adjust those safeguards considering the assessment.

21. NOTICES
Any notices which either party may desire to give to the other party under this AGREEMENT must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, which provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by notice:

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

CITY CONSULTANT
City of Fountain Valley Phil Martin & Associates, Inc.
10200 Slater Avenue 2987 NW Fairway Heights Drive
Fountain Valley, California 92708 Bend, OR 97703
Attention: City Clerk Attention: Phil Martin

22. ASSIGNMENT
CONSULTANT shall not assign the performance of this AGREEMENT, nor any part thereof, nor any monies due hereunder, without the prior written consent of CITY. [ Check if Applicaple ☒ ] CONSULTANT shall provide CITY fourteen (14) days’ notice prior to the departure of any key personnel from CONSULTANT’s employ. Should key personnel leave CONSULTANT’s employ, CITY shall have the option to immediately terminate this AGREEMENT, within three (3) days of the close of said notice period. Upon termination of this AGREEMENT, CONSULTANT’s sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between the City Council and CONSULTANT. [ Check if applicable ☒ ] Because of the personal nature of the services to be rendered pursuant to this AGREEMENT, only Phil Martin & Associates, LLC. (“PRINCIPAL”) shall perform the services described in this AGREEMENT. PRINCIPAL may use assistants, under his/her direct supervision, to perform some of the services under this AGREEMENT.

CONSULTANT shall provide CITY fourteen (14) days’ notice prior to the departure of PRINCIPLE from CONSULTANT’s employ. Should he or she leave CONSULTANT's employ, CITY shall have the option to immediately terminate this AGREEMENT, within three (3) days of the close of said notice period. Upon termination of this AGREEMENT, CONSULTANT’s sole compensation shall be payment for actual services performed up to, and including, the date of termination or as may be otherwise agreed to in writing between CITY and CONSULTANT.

23. LICENSES
At all times during the term of this AGREEMENT, CONSULTANT shall have in full force and effect, all licenses required of it by law for the performance of the services described in this AGREEMENT including, but not limited to, a Fountain Valley business license.

24. GOVERNING LAW
CITY and CONSULTANT understand and agree that the laws of the State of California shall govern the rights, obligations, duties, and liabilities of the parties to this AGREEMENT and also govern the interpretation of this AGREEMENT. Any litigation concerning this AGREEMENT shall take place in Orange County Superior Court or Central District of California Federal District Court.

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

25. ENTIRE AGREEMENT
This AGREEMENT contains the entire understanding between the parties relating to the obligations of the parties described in this AGREEMENT. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this AGREEMENT and shall be of no further force or effect. Each party is entering this AGREEMENT based solely upon the representations set forth herein and upon each party’s own independent investigation of any and all facts such party deems material.

26. CONTENTS OF REQUEST FOR PROPOSAL AND PROPOSAL
CONSULTANT is bound by the contents of CITY’s Request for Proposals and the contents of the Proposal submitted by CONSULTANT. In the event of conflict, this AGREEMENT shall take precedence over CITY’s Request for Proposals and CONSULTANT’s Proposal; and CITY’s Request for Proposals shall take precedence over CONSULTANT’s Proposal. No limitation of CONSULTANT’s liability, waiver of rights of CITY, or release of rights or remedies held by CITY, contained in CONSULTANT’s Proposal shall be of any force or effect.

27. INTERPRETATION
In the event of conflict or inconsistency between this AGREEMENT and any other document, including any proposal or Exhibit hereto, this AGREEMENT shall control unless a contrary intent is clearly stated. This AGREEMENT shall be interpreted as though drafted by all parties hereto.

28. MODIFICATION
No modification to this AGREEMENT shall be effective unless it is in writing and signed by authorized representatives of the parties hereto. The written modification requirement cannot be waived.

29. ATTORNEY FEES
In any action or proceeding brought by either party against the other party arising out of or in any way connected to this AGREEMENT, or where any provision hereof is validly asserted as a defense, the parties shall bear their own attorney’s fees, costs, and expenses.

Nothing in this provision shall excuse CONSULTANT’s duty to provide CITY with a defense at CONSULTANT’s cost when CITY receives a complaint, petition, or other pleading from a third party requiring CITY to defend itself.

30. AUTHORITY TO EXECUTE THIS AGREEMENT
The person or persons executing this AGREEMENT on behalf of CONSULTANT warrants and represents that he/she/they has the authority to execute this AGREEMENT on behalf of CONSULTANT and has the authority to bind CONSULTANT to the performance of his/her/its obligations hereunder

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

Exhibit “A”
Scope of Services
and Payment Terms

2987 NW Fairway Heights Drive  Bend, OR 97703  Phone 949-454-1800  Fax 949-454-1801 March 27, 2023
Mr. Steven Ayers
Principal Planner
City of Fountain Valley
10200 Slater Avenue
Fountain Valley, CA 92708
RE: Guadalupe Manor - Proposal to Prepare Mitigated Negative Declaration Dear Mr. Ayers:

Per your March 17, 2023 email, below is my proposal to prepare a Mitigated Negative Declaration (MND) for the proposed development of 29 low-income senior independent living units in an 18,039 square foot, two-story building on a 2.1 acre site at 17103 Magnolia Street in Fountain Valley.

My proposal is based on the site plan dated November 7, 2022, my experience preparing environmental documents to comply with the California Environmental Quality Act (CEQA) and my experience preparing CEQA documents and working with the City of Fountain Valley for similar projects in the past. I propose the following scope of work:

1. Scope of Work
a. Preparation of Mitigated Negative Declaration
Upon authorization to proceed and signature of a contract, Phil Martin will begin preparation of the MND and include the following tasks:

Aesthetics
The City of Fountain Valley General Plan does not identify any designated scenic resources on the project site and the State of California does not have any adopted scenic state highways adjacent to or close proximity to the site. Therefore, this section will analyze the potential aesthetic impacts and compatibility of the project to the existing land uses adjacent to and surrounding the project and includes single-family residences to the west and south, a retail shopping center to the north, and the existing three-story Our Lady of Guadalupe affordable senior housing facility adjacent to and east of the proposed low-income senior independent living building. The existing three-story Our Lady of Guadalupe affordable senior housing building blocks the direct views of the project from the retail commercial center that is east of the project, east of Magnolia Street. The existing aesthetic

Guadalupe Manor - City of Fountain Valley Page 2
Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 characteristics of the project and surrounding land uses will be described. Surface level photographs of the site and the surrounding land uses will be provided along with a photo key map to show the aesthetic and visual qualities of the site and surrounding areas.

This section will include an analysis of the potential aesthetic impacts of the project and include elevations that show the architecture and design features of the proposed two-story building. The landscape plan showing the proposed plantings and hardscape materials that would provide aesthetic buffering will also be included. The aesthetic section will compare the architecture, design, and landscape plans to applicable city design guidelines.

If aesthetic impacts are identified, measures to mitigate the impacts will be recommended to reduce impacts to less than significant.

Air Quality
Gerrick Consulting will prepare an air quality analysis and greenhouse gas emission calculations for the project as a sub-consultant to Phil Martin & Associates. Phil Martin & Associates will summarize the air quality and greenhouse gas emission reports in the MND and attach the complete documents in the MND appendix.

The air quality report will include the following information:
• Update area air quality setting information for Fountain Valley based upon South Coast Air Quality Management District (SCAQMD) monitoring data from the Anaheim air monitoring station.
• Calculate temporary construction activity emissions (demolition, grading & construction) using procedures identified within the SCAQMD CEQA Air Quality Handbook (1993) incorporated into the latest CalEEMod computer model.
• Calculate project generated regional vehicular emissions using the currently recommended CalEEMod computer model.
• Identify any potentially applicable mitigation measures, including any relevant transportation control measures (TCMs) incorporated into the air basin portion of the California State Implementation Plan (SIP).
• Discuss the projects consistency with the South Coast Air Basin Regional Air Quality Management Plan in terms of land use planning.
• Discuss the potential effects on local air quality of cumulative development in the area. • Summarize findings in a stand-alone air quality report.

The project air quality impacts will be divided into the short-term dust generation, local impacts, and long-term regional air pollution increases. Short-term dust and emission generation due to construction activities will be forecasted using the URBEMIS model. If provided by the project applicant, detailed estimates of the potential construction equipment that will be used during project construction will be referenced to calculate the emissions. Otherwise, conservative estimates of the various required construction activities to determine short-term emissions will be used. The air pollutant emissions generated during project construction will be compared to the SCAQMD Regional Thresholds. Measures to reduce dust generation required by the SCAQMD will be identified. Additionally, measures in the AQMP to control construction activity emissions will be

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 discussed in the air quality report. Long-term operational emissions will be generated by project traffic, combustion of natural gas to heat the residences, operation of landscape equipment, and the use of architectural coatings during residential maintenance. The operational air emissions generated by these sources will be assessed and compared to the SCAQMD Regional Thresholds to determine their significance.

Mitigation measures will be recommended to reduce significant long-term operational air quality emissions as much as possible to meet adopted thresholds and comply with CEQA.

Geology and Soils
CW Soils proposes to prepare a preliminary geotechnical report for the project as a sub-consultant to Phil Martin & Associates. Phil Martin & Associates will summarize the preliminary geotechnical report in the MND and attach the complete document in the MND appendix.

The report will include subsurface geotechnical exploration and in-situ hydraulic conductivity testing for design of onsite infiltration systems for the project. Mitigation measures, if required, will be incorporated to reduce potential geotechnical impacts to less than significant.

The project site is relatively flat terrain and underlain by Quaternary young alluvial fan deposits. The property is not within a State of California Alquist-Priolo Earthquake Fault Zone, but is located within a zone for potential liquefaction. Based on these existing site conditions CW Soils proposes the following scope of work:
• Provide a review of published topographic and geologic maps, geotechnical reports, aerial photographs, and relevant documents made readily available to us. • CW SOILS will not assume responsibility for repair of unmarked or private utility lines. • Excavate three (3) to four (4) borings to a maximum depth of roughly 20 feet or practical refusal. One of the borings may be drilled to a depth of 50 feet or practical refusal to evaluate the potential for liquefaction.
• Perform geologic mapping and site reconnaissance.
• Conduct the exploration, collect samples, log the excavations, and determine the depth to groundwater, if observed. The excavations will be backfilled with the excavated earth materials, upon completion.
• Obtain bulk and/or in-situ samples for engineering classification and laboratory testing. • Conduct laboratory testing of select earth materials to differentiate their engineering properties. The laboratory testing program is anticipated to include in-situ and maximum density, in-situ and optimum moisture, expansion potential, direct shear, consolidation potential, collapse potential, -200, R-value, pH, resistivity, sulfate, and chloride content. • A description of the exploration techniques and equipment utilized, including a detailed log of the excavations, a map showing the mapped geologic units, exploratory locations, and recommendations.
• Engineering and geologic analysis of data associated with the proposed improvements, including provisional conclusions and mitigation recommendations pertaining to the following:

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 - Geotechnical characteristics of the earth materials;
- Depth to groundwater, if observed;
- Collapse potential;
- Expansion potential;
- Preliminary foundation design;
- Corrosion potential and mitigation procedures;
- Excavation characteristics;
- Secondary geologic hazards potential;
- Preliminary pavement design.
• One preliminary geotechnical interpretive report (1 pdf) will be prepared to illustrate the findings, conclusions and recommendations. The report will be prepared in general accordance with the 2022 California Building Code as well as the currently accepted professional engineering practices of southern California. No further warranty is expressed or implied.

Based on completion of the above scope of work, CW Soils will provide specific recommendations with regard to the following:
• A summary of the project and assumptions regarding design criteria at the time the report is prepared.
• A description summarizing the subsurface conditions encountered during the field exploration.
• A geotechnical map presenting the location of exploratory excavations and geologic data. • Exploratory logs of the excavations.
• A description of the laboratory testing procedures and test results. • Site preparation, grading, and ground modification recommendations. • Temporary excavation requirements.
• Acceptability of the earth materials for use as engineered fill or backfill. • Presence of groundwater, if observed, and its potential to impact the proposed improvements.
• Preliminary foundation types, minimum depths, lateral pressures, and allowable bearing values.
• Minimum foundation and slab reinforcement requirements. • Retaining wall design criteria, including equivalent fluid pressures, and subdrain recommendations.
• Earthquake design parameters, including site classification for seismic design, mapped spectral accelerations, site coefficients, and maximum considered earthquake response accelerations.

The following assumptions are made. If any of the assumptions are invalid, fees shall be adjusted accordingly.
• No permits will be required to conduct the subsurface exploration. • No substantial changes in the location of the proposed development have been made.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 • Contaminants and/or pollution will not be encountered nor is an environmental assessment part of this scope of work.
• Electronic versions of your topographic/site plans are provided to us for use as a base map for our data.
• There are no access limitations for the field equipment Greenhouse Gas Assessment
Gerrick Consulting proposes to prepare a greenhouse gas assessment for the project as a subconsultant to Phil Martin & Associates. Phil Martin & Associates will summarize the greenhouse gas assessment in the MND and attach the complete document in the MND appendix.

The greenhouse gas assessment will closely follow the generally accepted analysis methodologies and significance thresholds for greenhouse gas emissions and apply the most current standards to the project. The greenhouse gas scope of work will include the following:
• Describe the existing GHG regulatory environment focused on AB-32 and SB-375.

Summarize the base year GHG emissions inventory for Fountain Valley, if available and discuss the likely progress in moving forward from that time. • Identify the appropriate thresholds of impact significance that include both the quantity of GHG generated by the project as well as project consistency with sustainable community initiatives.
• Quantify GHG emissions associated with transportation, on-site energy consumption, indirect electricity generation emissions, solid waste generation, and water use using the CalEEMod computer model GHG module.
• Determine GHG impact significance after application of available mitigation measures.

Hazards and Hazardous Materials
A Phase I Environmental Site Assessment (ESA) will be provided by the applicant to Phil Martin & Associates. The Phase I ESA will be summarized in the MND and the report included in the MND appendix. Mitigation measures, if required, will be incorporated to reduce potential hazardous impacts to less than significant.

Hydrology/Water Quality
A hydrology report, grading plan and a Water Quality Management Plan (WQMP) will be provided by the applicant to Phil Martin & Associates. The hydrology report and WQMP will be summarized in the MND and the reports included in the MND appendix. Mitigation measures, if required, will be incorporated to reduce potential water quality, grading or storm water impacts to less than significant.

Land Use
This section will evaluate the potential land use impacts associated with the project. The General Plan land use designation for the site is currently General Commercial and is currently zoned C-1 Local Business. The project will require a General Plan Amendment to High Density Residential

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 and a zone change to R4 High Density Multiple Dwelling to allow for the development of 29 lowincome senior units with density bonuses permitted by state law. The land use section will discuss the compatibility of the development with the adjacent surrounding residential land uses and other land uses in the immediate project vicinity. This section will also compare the project for consistency with the R4 development standards in Table 2-7 of the Title 21 Development Code the Fountain Valley Municipal Code (FVMC). If required, mitigation measures will be recommended to reduce land use impacts to less than significant.

Noise
Gerrick Consulting will prepare a noise and vibration assessment as a sub-consultant to Phil Martin & Associates. The noise and vibration assessment will be summarized in the MND and the full report included in the MND appendix.

The noise assessment will include the following:
• Perform limited on-site ambient noise monitoring to establish an existing baseline and to determine the noise generation from adjacent traffic conditions. • Develop a baseline traffic noise exposure profile in terms of the CNEL noise metric using the Federal Highway Administration (FHWA) Model with the latest California vehicle noise curves (CALVENO) focused on local impacts from adjacent traffic. • Evaluate stationary noise impacts from temporary on-site construction noise sources. • Prepare a no-project versus with-project mobile noise impact comparison, including any viable project alternative development scenarios. Identify specific sensitive receiver locations where mobile source noise impacts may adversely affect nearby sensitive receivers. • Relate project noise impacts to the Noise Element noise/land use compatibility guidelines in the City of Fountain Valley General Plan Noise Element and other applicable noise exposure regulations.
• Develop a noise impact mitigation plan for any predicted noise impacts that exceed target noise exposure limits.
• Summarize the findings in a “stand-alone” draft noise and vibration technical report.

Mitigation measures to reduce potential noise or vibration impacts will be provided as necessary to meet the City’s Noise Ordinance and comply with CEQA.

Public Services and Utilities
This section will evaluate the potential impacts of the project on the various public services and utilities that will serve the project. The public services that will be analyzed include police and fire protection, schools, solid waste collection, water, wastewater, electricity, and natural gas. Service letters will be sent to the public agencies that would serve the project to solicit their comments with regards to impacts by the project on their respective service. Information will be provided that identifies the size and location of the existing services/utilities that serve the site and discuss if the existing facilities are adequate of if upgrades and improvements will be required. For the existing utilities that will need to be upgraded or extended to serve the project the MND will discuss potential impacts to extend or upgrade those utilities. When required to comply with CEQA, mitigation measures will be recommended to reduce potential impacts to less than significant.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 Transportation/Traffic
The Ganddini Group, Inc. will prepare a transportation study screening assessment as a subconsultant to Phil Martin & Associates. The traffic assessment will be summarized into the MND and the full report included in the MND appendix.

The traffic assessment will include the following tasks:

Task 1 Transportation Study Screening Assessment
Ganddini Group will prepare a Transportation Study Screening Assessment for the proposed project consisting of the following tasks:
▪ Calculate the proposed project trip generation (including existing and net new trips, if applicable) based on weekday AM/PM peak hour and daily trip generation rates from the Institute of Transportation Engineers (ITE) Trip Generation Manual (11th Edition, 2021). ▪ Assess the need to prepare a transportation impact analysis (TIA) that includes level of service (LOS) analysis based on screening criteria established the City of Fountain Valley.

Based on preliminary review, the project is estimated to generate fewer than 50 peak hour trips; therefore, preparation of a TIA that includes LOS analysis is not anticipated to be required or included in this scope of work.
▪ Assess the need to prepare a transportation impact analysis (TIA) that includes vehicle miles traveled (VMT) analysis based on screening criteria established by the City of Fountain Valley. Based on preliminary review, the project is anticipated to satisfy the screening criteria for projects in low VMT areas; therefore, preparation of detailed VMT modeling/analysis is not anticipated to be required or included in this scope of work. ▪ Prepare a technical letter-report that incorporates the methodology, findings, and all supporting calculations and assumptions. Review one compiled set of City of Fountain Valley comments and make minor revisions, if necessary. The final report will be signed and stamped by a Professional Engineer registered in the State of California.

Task 2 Time-and-Materials for Responses to Public Comments & Meeting Attendance The scope of services includes time to respond to comments from the general public and/or other agencies and participation in two public hearings (virtual or in-person). The budget accounts for approximately 8 hours of senior-level support for response to comments and two in-person public hearings.

Tribal Cultural Resources
Information from city consultation with any tribes that responded to the city’s AB 52 notification letters will be incorporated into this section. Based on the results of any tribal consultation and the potential for impacts to existing tribal cultural resources that may exist on the site, mitigation measures will be recommended accordingly.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 Wildfires
The MND will analyze and discuss any potential wildfire impacts to the project. Based on review of CAL FIRE’s Very High Fire Hazard Severity Zones in Local Responsible Areas for Fountain Valley there are no Very High Fire Hazard Severity Zones in the City. While the project would not be impacted by wildfires, this section will provide information that supports that conclusion.

Cumulative Impacts
Per CEQA Guidelines Section 15355 this section will provide a discussion of the potential environmental effects that could occur with development of the project in conjunction with other planned and entitled projects in the area, including the compounding of cumulative project impacts.

Cumulative project information will be obtained from City staff and include projects that have been entitled but not constructed, projects that are not entitled, but in the planning process, and reasonably foreseeable future projects. A map will be prepared to show the location of the cumulative projects. When required by CEQA, mitigation measures will be recommended to mitigate any cumulative project impacts.

References, Persons and Agencies Contacted and Mitigated Negative Declaration Preparation
This section will list all reference documents used to prepare the MND and all persons, agencies and individuals contacted during preparation of the document.

Appendices
The MND appendix will include all technical reports.
b. Screen Check Mitigated Negative Declaration
Once the MND is completed a digital copy will be submitted to City staff for its review and comment. Staff’s comments and changes will be incorporated and a second digital copy will be submitted for a second screen check review. Staff’s final screen check comments will be incorporated and the MND prepared for printing.
c. Print and Mail Mitigated Negative Declaration
Phil Martin & Associates will mail up to ten (10) compact disks of the MND for public circulation and use by the city. An electronic copy of the MND and appendices will be provided to the city for its use.
d. Prepare Notice of Intent to Adopt a Mitigated Negative Declaration Phil Martin & Associates will prepare a Notice of Intent to Adopt a MND (NOI). Once reviewed by city staff, a copy will be mailed to all responsible agencies and interested persons along with a copy of the MND on compact disc. Phil Martin & Associates will also file the NOI with the Orange County Clerk Recorder to start a 20-day public review period. The MND will also be filed with CEQAnet as required.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 e. Respond to Comments – If Required
Phil Martin & Associates, Inc. will prepare written responses to all comments received to the MND as directed by the city. For this proposal, Phil Martin & Associates has allocated three (3) hours to respond to comments. The traffic consultant has also allocated up to 8 hours to respond to traffic comments. Additional time for Phil Martin & Associates or the traffic consultant to respond to comments beyond the budget will be billed on a time and materials basis.

A digital copy of the Response to Comments will be submitted to the city for its review and comment. City changes will be incorporated and copies of the Response to Comments will be printed. Phil Martin & Associates will mail up to five (5) digital copies of the Response to Comments to the agencies and individuals that submitted comments at least ten days prior to the scheduled hearing to adopt the MND.
f. Attend Public Hearings
As requested, Phil Martin & Associates has budgeted to attend one (1) Planning Commission and two (2) City Council hearing. The traffic consultant has also budgeted to attend two public hearings.

Attendance at additional public hearings will be billed on time and material basis. g. File Notice of Determination and Pay Fish and Wildlife Fee Phil Martin & Associates will prepare the Notice of Determination (NOD) as required by Section 15094 of the CEQA Guidelines. The day after the MND is adopted and the project is approved Phil Martin & Associates will file the Notice of Determination with the Orange County Clerk Recorder and CEQAnet. Phil Martin & Associates will pay the required California Fish and Wildlife MND fee prior to filing the NOD, which for 2023 is $2,764 plus a County Administrative Process fee of $50 for a total of $2,814.

Once the Notice of Determination is filed, there is a 30-day statute of limitation period the public has to file legal challenges to the adoption of the MND. If no legal challenges to the adequacy of the MND are filed within this 30-day period the MND is final.

2. Mitigation Monitoring and Report Plan
Phil Martin & Associates will prepare a Mitigation Monitoring and Reporting Plan (MMRP) as required by Public Resources Code Section 21081.6 for all mitigation measures that are recommended to mitigate significant impacts. The MMRP will list all mitigation measures and identify the city department that will be responsible to monitor and implement each mitigation measure. Once the MMRP is completed, a digital copy will be submitted to city staff for its review.

Staffs comments will be incorporated and a digital copy submitted to the city for its use. The MMRP will be completed and submitted to staff prior to the first Planning Commission hearing for the project.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023

3. Cost Breakdown:

The cost to prepare the Mitigated Negative Declaration based on the above scope of work is $49,764. A cost breakdown is provided below.

Mitigated Negative Declaration – Cost Breakdown
Task Cost
Initial Study/Mitigated Negative Declaration
Initial Study/Mitigated Negative Declaration $24,200
Air Quality/Greenhouse Gas/Noise Report – Giroux
Associates $3,900
Traffic Assessment – Ganddini Group $3,100
CW Soils - Geotechnical Report $9,250
Direct Costs – produce and mail CDs $400
Graphics $200
File MND with CEQAnet $200
Final Mitigated Negative Declaration
Response to Comments – if required
Phil Martin & Associates $600
Ganddini Group $700
Mitigation Monitoring and Reporting Plan $200
Public Hearings – 1 Planning Commission/2 City Council
Phil Martin & Associates $1,800
Ganddini Group $1,700
File CEQA notices – 2 notices $700
Ca. Fish and Wildlife NOD fee $2,814
Total $49,764
The coordination of the completion of the special studies that are provided by the project applicant, including response to comments, shall be provided by the applicant. Should additional services be required beyond the above scope of work my billing rate is $200 per hour.

4. Timeline:

A tentative schedule and milestones to complete the Mitigated Negative Declaration are presented below. The schedule is based on an anticipated “start date” of April 17, 2023 and timely reviews by city staff.
1) Start Project – April 17, 2023.
2) Submit Screen Check Initial Study/MND to City – May 11, 2023. 3) Receive staff comments to Initial Study/MND – May 30, 2023. 4) Submit second Screen Check Initial Study/MND – June 5, 2026. 5) Receive staff second comments to Initial Study/MND – June 13, 2023. 6) Mail Initial Study/MND – June 15, 2023.
7) Initial Study/MND public review period – June 16, 2023 – July 5, 2023. 8) Submit screen check Response to Comments to City – July 11, 2023.

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Proposal To Prepare Mitigated Negative Declaration – March 27, 2023 9) Receive staff comments to screen check Response to Comments – July 14, 2023. 10) Mail Response to Comments and submit Final MND to City staff for its use – July 18, 2023. 11) Planning Commission/City Council hearings – July/August 2023. 12) File Notice of Determination with County Clerk – August 2023.

Milestones
1) Initial Study/MND public review period – June 16, 2023 – July 5, 2023. 2) Planning Commission/City Council hearings – July/August 2023. 3) File Notice of Determination – August 2023.

5. Needed Information:

The following information will be required to begin preparation of the Mitigated Negative Declaration:
• Phase I ESA
• Hydrology Report and WQMP
• Construction schedule and list of the types and number of pieces of grading equipment – to calculate construction emissions.

Please call if you have questions about the proposal.

Sincerely,
Phil Martin
President

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

Exhibit “B”
Insurance Specifications

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

EXHIBIT “B”

INSURANCE SPECIFICATIONS
Without limiting CONSULTANT’s indemnification of CITY, and prior to performing any work under this AGREEMENT or receiving any compensation, CONSULANT shall obtain, provide and maintain at its own expense during the term of this AGREEMENT, policies of insurance of the type and amounts described below and in a form, that is satisfactory to CITY.

General liability insurance. CONSULTANT shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount, not less than $
1,000,000.00
dollars per occurrence,$ 2,000,000.00 dollars
general aggregate, for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability.

Check if Applicable ☒ Automobile liability insurance. CONSULTANT shall maintain automobile insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury and property damage for all activities of CONSULTANT arising out of or about the work to be performed under this AGREEMENT, including coverage for any owned, hired, non-owned, or rented vehicles, in an amount not less than $ 1,000,000.00dollars combined single limit for each accident.

Check if Applicable ☒ Workers’ compensation insurance. CONSULTANT shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance (with limits of at least $ 1,000,000.00 dollars). CONSULTANT shall submit to CITY, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of CITY, its officers, agents, employees, and volunteers.

Check if Applicable ☐ Umbrella or excess liability insurance. CONSULTANT shall obtain and maintain an umbrella or excess liability insurance policy with limits of not less than $ 4,000,000.00 dollars that will provide bodily injury, personal injury, and property damage liability coverage at least as broad as the primary coverages set forth above, including commercial general liability and employer’s liability. Such policy or policies shall include the following terms andconditions:
• A drop-down feature requiring the policy to respond if any primary insurance that would otherwise have applied proves to be uncollectible in whole or in part for any reason;
• Pay on behalf of wording as opposed to reimbursement; • Concurrency of effective dates with primarypolicies;
• Policies shall “follow form” to the underlying primary policies; and • Insureds under primary policies shall also be insureds under the umbrella or excess policies.

Check if Applicable ☒ Professional liability (errors & omissions) insurance CONSULTANT shall maintain professional liability insurance that covers the services to Page 47 Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

be performed about this AGREEMENT, in the minimum amount of $ 1,000,000.00 dollars per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this AGREEMENT and CONSULTANT agrees to maintain continuous coverage through a period no less than three years after completion of the services required by this AGREEMENT.

Check if Applicable ☐ Pollution liability insurance. Environmental Impairment Liability Insurance shall be written on CONSULTANT’s Pollution Liability form or other form acceptable to CITY providing coverage for liability arising out of sudden, accidental, and gradual pollution and remediation. The policy limit shall be no less than $ 1,000,000.00 dollars per claim and in the aggregate. All activities contemplated in this AGREEMENT shall be specifically scheduled on the policy as “covered operations.” The policy shall provide coverage for the hauling of waste from the project site to the final disposal location, including non-owned disposal sites. Products/completed operations coverage shall extend a minimum of the r e e y ear s a f te r pr oj ec t completion.

Coverage shall be included on behalf of the insured for covered claims arising out of the actions of independent contractors. If the insured is using subcontractors, the policy must include work performed “by or on behalf” of the insured. Policy shall contain no language that would invalidate or remove the insurer’s duty to defend or indemnify for claims or suits expressly excluded from coverage. Policy shall specifically provide for a duty to defend on the part of the insurer. The CITY, its officials, officers, agents, and employees, shall be included as insureds under the policy.

Check if Applicable ☐ Explosion, collapse, underground insurance. CONSULTANT shall furnish a copy of a public liability and property damage insurance policy with “XCU” or equivalent coverage in an amount not less than $ 1,000,000.00dollars per person and $ 2,000,000.00 dollars per occurrence for personal injury. The limit of property damage liability shall be not less than $ 1,000,000.00dollars for each occurrence as payment for damages to property which may result from or be caused by such public display of fireworks and arising from any acts of the CONSULTANT, its agent, employees, or subcontractors presenting such public display. CITY, its officers, agents, and employees shall be additional insureds under the policy. CONSULTANT shall not cancel the insurance coverage without fifteen (15) days prior written notice to the State Fire Marshal.

Proof of insurance. CONSULTANT shall provide certificates of insurance to CITY as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers’ compensation. Insurance certificates and endorsement must be approved by CITY prior to commencement of performance. Current certification of insurance shall be kept on file with CITY at all times during the term of this contract. CITY reserves the right to require complete, certified copies of all required insurance policies, at any time.

Duration of coverage. CONSULTANT shall procure and maintain for the duration of the AGREEMENT insurance against claims for injuries to persons or damages to property, which may arise from or in connection with the performance of this

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

AGREEMENT by CONSULTANT, his/her/its agents, representatives, employees, or subconsultants. If this AGREEMENT involves construction, CONSULTANT must maintain general liability and umbrella or excess liability insurance for as long as there is a statutory exposure to completed operations claims. CITY and its officers, officials, employees, and agents shall continue as additional insureds under such policies.

CITY’s rights of enforcement. In the event any policy of insurance required under this AGREEMENT does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by CONSULTANT or CITY will withhold amounts sufficient to pay premium from CONSULTANT’s payments. In the alternative, CITY may cancel thisAGREEMENT.

Acceptable insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders’ Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless otherwise approved by CITY. Notwithstanding the foregoing, XCU insurance shall have a rating of at least B-VI.

Waiver of subrogation. All insurance coverage maintained or procured pursuant to this AGREEMENT shall be endorsed to waive subrogation against CITY, its elected or appointed officers, agents, officials, employees, and volunteers or shall specifically allow CONSULTANT or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. CONSULTANT hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

Enforcement of contract provisions (non estoppel). CONSULTANT acknowledges and agrees that any actual or alleged failure on the part of CITY to inform CONSULTANT of noncompliance with any requirement imposes no additional obligations on the CITY nor does it waive any rights hereunder.

Specifications not limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on coverage, limits, or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of anytype.

Notice of cancellation. CONSULTANT agrees to oblige its insurance agent or broker and insurers to provide to CITY with a thirty (30) day notice of cancellation (except for nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each required coverage.

Additional insured status. General liability policies shall provide or be endorsed to provide that CITY and its officers, officials, employees, and agents shall be additional insureds under such policies. This provision shall also apply to any excess liability

Phil Martin Contract
17103 Magnolia Street – Our Lady of Guadalupe

policies. Coverage available to the additional insured shall be primary and noncontributory.

Agency’s right to revise specifications. CITY reserves the right at any time during the term of the AGREEMENT to change the amounts and types of insurance required by giving CONSULTANT ninety (90) days advance written notice of such change. If such change results in substantial additional cost to CONSULTANT, CITY and CONSULTANT may renegotiate CONSULTANT’s compensation.

Self-insured retentions. Any self-insured retentions must be declared to and approved by CITY. CITY reserves the right to require that self-insured retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be considered to comply with these specifications unless approved byCITY.

Timely notice of claims. CONSULTANT shall give CITY prompt and timely notice of claims made or suits instituted that arise out of or result from CONSULTANT’s performance under this AGREEMENT, and that involve or may involve coverage under any of the required liability policies.

Additional insurance. CONSULTANT shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the work.

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18. 2023
Members of the City Council
SUBJECT: Resolution of Intent to Withdraw from PRISM Insurance Pool Three-Year Strategic Goals
☒ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☒ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY:

At its April 4, 2023 Council Meeting, the City Council determined to leave PRISM and join CalJPIA for insurance purposes. This item asks the City Council to adopt a Resolution of intent to withdraw from PRISM, which is required by PRISM’s Bylaws, in order to withdraw from the pool.

DISCUSSION:

Since 2018, City has participated in the PRISM program after having withdrawn from CalJPIA after 32 years of membership. PRISM has been a stable insurance provider in what has turned out to be a very hard market over the past few years as itrelates to General Liability premiums. However, one of the City's Strategic Planning goals is to assess opportunities for cost savings. Given that General Liability premiums have increased by $279,972 over four (4) years, City undertook a project to review the City's cost of coverage.

Staff identified comparable coverage through CalJPIA compared to the coverage afforded by PRISM. As discussed during the April 4, 2023 City Council meeting, the premium quoted by PRISM was over $200,000 more than that quoted by CalJPIA. In addition to the base premium amount, City would also have to contract out for Third Party Claims Administration services within the PRISM program. In the CalJPIA program, the Third Party Administrator cost is absorbed into the GL premium.

Resolution of Intent to Withdraw from Prism
April 18, 2023

The City Council determined to leave PRISM and become a member of CalJPIA.

Pursuant to PRISM’s bylaws, the City must provide 60-day notice of its intent to withdraw.

Provided for approval is a resolution notifying PRISM of the City’s intent to withdraw.

FISCAL REVIEW:

The 2023/24 Preliminary Budget that will be brought forward to the City Council on May 16, 2023 will include all of the insurance premiums due for the 2023/24 renewal, based on final numbers from CalJPIA.

ALTERNATIVES:

Alternative No. 1:

Alternative No. 2:

RECOMMENDATION:

Adopt a Resolution of Intent of the City Council of the City of Fountain Valley to Withdraw from the Prism Insurance Pool.

Do not adopt the Resolution .

Staff is requesting the City Council approve Alternative No. 1: Adopt a Resolution of Intent of the City Council of the City of Fountain Valley to Withdraw from the Prism Insurance Pool.

Prepared by: Colin Burns, Attorney for the City
Approved by: Maggie Le, City Manager
Attachments: Resolution of Intent of the City Council of the City of Fountain Valley to Withdraw from the Prism Insurance Pool

RESOLUTION NO.

RESOLUTION OF INTENT OF THE CITY COUNCIL OF

THE CITY OF FOUNTAIN VALLEY TO WITHDRAW

FROM THE PRISM INSURANCE POOL
WHEREAS, on April 17, 2018, the City Council of the City of Fountain Valley adopted Resolution 9658 to approve becoming a member of the CSAC Excess Insurance Authority (renamed PRISM) for General and other liability coverages; and WHEREAS, City desires to obtain General and various other liability coverages through the California Joint Powers Insurance Agency (CalJPIA), which will provide a significant cost savings and is in the best interest of the City; and WHEREAS, PRISM’s bylaws require City to provide a 60-day notice of intent to leave the insurance pool followed up by a confirmation that City will leave PRISM; and WHEREAS, the City Council desires to provide said 60-day notice of City’s intent to withdraw from PRISM.

NOW, THEREFORE, the City Council of the City of Fountain Valley does hereby RESOLVE as follows:

Section 1. City intends to withdraw from PRISM at the expiration of the 2022-2023 policy year, which ends June 30, 3023, or upon the earliest date thereafter permitted by PRISM and, on that same date, intends to become a member of CalJPIA for General and various other liability coverages.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Fountain Valley at a regular meeting held this 18th day of April, 2023.

Ayes:

Nays:

Absent:

Abstain:

ATTEST:

Rick Miller, City Clerk Kim Constantine, Mayor

APPROVED TO FORM

____________________________
Colin Burns, Attorney for the City

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: Adopt a Resolution of Intention and First Reading of an Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley
Three-Year Strategic Goals
☐ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☒ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY:

The City Council approved and adopted three (3) year Memoranda of Understandings and Resolutions with all seven (7) of its’ bargaining groups as well as its’ unrepresented employees.

One of the City’s priorities for the contract(s) was to address the unfunded actuarial liability related to pension costs, specifically for our Classic/Tier One employees. The City was able to successfully negotiate cost-sharing of a portion of these pension costs through an increase in the employee contributions for all Classic/Tier One employees at all levels of the organization over a term of three (3) year agreements, with different rates for miscellaneous and safety groups.

Increase effective dates Misc.

Increase
Misc. EE Rate Safety
Increase
Safety EE
rate
Implemented 1/8/22 0.5% 8.5% 1.0% 10.0%
Implemented 7/8/22 0.5% 9.0% 1.0% 11.0%
7/7/23 0.5% 9.5% 1.0% 12.0%
Total Increase/Rate by 6/30/24 1.5% 9.5% 3.0% 12.0%
The City has amended its contract(s) with CalPERS to implement the cost-sharing agreements as negotiated for the first two (2) cost sharing increases. The City submitted a formal request to amend its contract(s) with CalPERS for the third cost sharing per Government Code 20516

Council Action Request
Adopt a Resolution and Adopt a First Reading of an Ordinance April 18, 2023

for 0.5% for Classic/Tier One Miscellaneous employees and also 1.0% for Classic/Tier One Fire and Police Safety employees to be effective in the pay period including July 7, 2023.

DISCUSSION:

In order for the City to implement the cost-sharing provision, it is necessary for the City to amend its’ contract with CalPERS. The City Council must adopt a Resolution of Intention to amend the contract and adopt the first reading of the Ordinance with includes the Amendment to the CalPERS contract as an Exhibit. The change is shown under Section A(14)(i) of the amendment contract. California Government Code Section 7507 requires that future annual cost of benefit changes of the proposed contract amendment be made public at a public meeting at least two weeks’ prior the final Ordinance. If the City Council approves the first reading of the Ordinance, then the second reading will occur on May 16, 2023. CalPERS provides the option of the first reading of the Ordinance occurring the same day as the adoption of the Resolution of Intention.

It is recommended the City Council approve the Resolution of Intention and the first reading of an Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley.
 Adopt a Resolution of Intention to amend the City’s CalPERS retirement contract  Adopt First Reading of an Ordinance to Approve an Amendment to the Contract with CalPERS
To implement this employee cost-sharing provision, the City Council will need to approve the Resolution of Intention and Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley.

An employee election was conducted and approved prior to the first amendment adopted and effective on January 8, 2022, CalPERS determined it was not necessary to conduct votes again, since they had already voted and approved all three (3) cost sharing amendments on this election.

FISCAL REVIEW:

Cost savings will be budgeted in the FY 23-24 budget proposal.

PUBLIC NOTIFICATION:

The standard City Clerk’s agenda notification process was used for this item and posted fourteen days prior to the first reading of the ordinance in the local newspaper.

CITY ATTORNEY REVIEW:

The City Attorney has reviewed the attached Resolution of Intention, Ordinance and Amendment to Contract.

Council Action Request
Adopt a Resolution and Adopt a First Reading of an Ordinance April 18, 2023

ENVIRONMENTAL IMPACT REVIEW:

Not applicable.

ALTERNATIVES:

Alternative No. 1:

Alternative No. 2:

RECOMMENDATION:

Approve the Resolution of Intention and Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley.

Do not approve the aforementioned Resolution of Intention and Ordinance and provide alternative direction to City staff.

City staff recommends Alternative 1: Approve the Resolution of Intention and Ordinance to Approve an Amendment to the Contract between the Board of Administration California Public Employees’ Retirement System and the City Council of the City of Fountain Valley.

Prepared by: Carrie Hanes, Human Resources Director
Fiscal review by: Ryan Smith, Finance Director
Approved by: Maggie Le, City Manager
Attachments:

1. Resolution of Intention

2. Ordinance
Exhibit: 1. CalPERS Amendment to Contract

RESOLUTION OF INTENTION

TO APPROVE AN AMENDMENT TO CONTRACT

BETWEEN THE

BOARD OF ADMINISTRATION

CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM

AND THE

CITY COUNCIL

CITY OF FOUNTAIN VALLEY
WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and
WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and
WHEREAS, the following is a statement of the proposed change:

To provide Section 20516 (Employees Sharing Additional Cost) of an additional .5% for first tier classic local miscellaneous members, an additional 1% for first tier classic local police members, and an additional 1% for first tier classic local fire members.

NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof.

By:_________________________________
Presiding Officer
_________________________________
Title
________________________________
Date adopted and approved
(Amendment)
CON-302 (Rev. 3/9/2016 rc)
Attachment 1

Attachment 2
ORDINANCE NO.______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

FOUNTAIN VALLEY AUTHORIZING AN AMENDMENT TO THE

CONTRACT BETWEEN THE CITY COUNCIL OF THE CITY OF

FOUNTAIN VALLEY AND THE BOARD OF ADMINISTRATION
OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT
SYSTEM
NOW, THEREFORE, the City Council of the City of Fountain Valley does hereby ORDAIN as follows:

Section 1. That an amendment to the contract between the City Council of the City of Fountain Valley and the Board of Administration, California Public Employees' Retirement System is hereby authorized, a copy of said amendment being attached hereto, marked Exhibit, and by such reference made a part hereof as though herein set out in full.

Section 2. The Mayor of the City Council is hereby authorized, empowered, and directed to execute said amendment for an on behalf of the City of Fountain Valley.

Section 3. This ordinance shall take effect 30 days after its adoption, and prior to the expiration of 15 days from the passage thereof shall be published at least once in the Orange County Register, a newspaper of general circulation, published and circulated in the City of Fountain Valley and thenceforth and thereafter the same shall be in full force and effect.

PASSED AND ADOPTED by the City Council of the City of Fountain Valley at a regular meeting this 16th day of May, 2023.

ATTEST:
_______________________ _______________________
Rick Miller, City Clerk Kim Constantine, Mayor
Approved as to Form:

_______________________
Colin Burns
Attorney for the City

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: Purchase and Implementation of Nutanix HCI
Three-Year Strategic Goals
☐ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☐ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☒ Not applicable
EXECUTIVE SUMMARY:

Staff is requesting City Council to authorize the purchase of Nutanix Hyper Converge Infrastructure. A necessary hardware and software with IMPEX Technologies to upgrade our existing physical servers and move over to Nutanix Hyper-Converged Infrastructure (HCI). The existing physical server infrastructure will become virtualized with Nutanix HCI, which will eliminate the need to have physical servers and consolidate the infrastructure. We will combine City Hall, Police, and Fire to a single infrastructure system for compute and storage.

DISCUSSION:

The city utilizes physical servers to host the applications and services for City Hall, Police, and Fire. There are currently physical servers that do not have any support services or warranty.

Some servers date back to 2012, and even with third-party support, vital services are running on unreliable systems. Third-party support has been used in the past for a number of servers but utilizing third-party support does not give the city the proper technology needs. It will only hinder growth and not allow the full use of its current systems, such as the Enterprise Resource Planning (ERP) software and backup software needed for Disaster Recovery or system failure.

These are some of the applications that are currently at max capacity with their resources. With more than 50 application services being used, this has led to owning more than 40 physical servers, which require extensive staff time, and money to maintain.

Nutanix HCI Purchase & Implementation
April 18, 2023

The City uses many crucial applications for both the user and system end. This means staff has a limited time frame to perform maintenance during working hours, leading to longer periods without up-to-date software on the servers. Over time more servers were added, which has not allowed the City to upgrade the servers properly. Physical servers have made things disorganized and inefficient. It has led to buying different model types of servers and does not allow a unified system. Upgrading or matching servers would be too expensive as they are needed case by case. Many servers are already at their End-Of-Life (EOL), this is when the manufacturer is no longer supporting the device. Third-party companies that support End-OfLife servers are currently in use but are priced higher since the OEM no longer provides any support and also do not always use genuine parts when doing replacements.

Nutanix Hyper-Converged Infrastructure is a scale-out cluster of high-performance nodes running a standard hypervisor containing processors, memory, and local storage. Each node runs a virtual machine (VM), a digital version of a physical computer, or a server in this case.

Storage from all nodes is virtualized into a unified pool, eliminating the need to expand the storage of our physical servers individually. Nutanix HCI also has a modular scale-out approach that allows growth in granular data and compute hardware. This allow us to expand Nutanix HCI hardware resources to meet our needs as system use is needed. Nutanix house all the servers that are currently physical. This eliminates the cost of renewals, labor, and maintenance. Nutanix will load balance its VMs to ensure optimal performance and is always scaled out to keep the VM online. Even when a node fails or has a faulty component, Nutanix will copy and run the VM to a separate node allowing the VM not to shut down. The same technology is used when running updates, so there will be little to no downtime when updating the system and will allow for a more constant update schedule. In summary you will combine 40 physical servers to 2 physical, 4 node servers. This will also largely reduce power consumptions and air conditioning, which equal to cost savings for the city. By moving to Nutanix HCI, we can eliminate the cost of renewing our current server infrastructure, support, and consolidate it into one system.

FISCAL REVIEW
2023-2026 3-year term
Account Number Item FY
110.40.94001.56002
Nutanix HyperConverged
Infrastructure
$239,444.43
Total $239,444.43
Budget Includes Sufficient Funding
The newly adopted Mid-Year budget includes funding for the purchase of Nutanix HyperConverged Infrastructure, which will be expensed to the account 110.40.94001.56002. Note that the service contract will be a 36-Month Term that will be pre-paid in the current fiscal year and amortized over the 3-year term. Sufficient funding will be included in each fiscal year of the term.

Doing a 3-year term vs a 1-year term results in a cost savings of $8,300 per year, for a total savings of $24,901.27.

PROCUREMENT:

Nutanix HCI Purchase & Implementation
April 18, 2023

Fountain Valley Municipal Code 2.36.070(5) provides that bidding may be dispensed with when “piggybacking” off the pricing that was previously established by another government agency; provided the original solicitation was made in a competitive manner and awarded to the lowest responsible bidder. Here, Nutanix HCI services were competitively bid through a joint powers authority, and the City seeks to take advantage of the competitively bid price of that JPA.

PUBLIC NOTIFICATION:

Not applicable.

ENVIRONMENTAL IMPACT REVIEW:

Not applicable.

ATTORNEY REVIEW:

The Attorney for the City has reviewed this staff report and concurs with the recommended action.

ALTERNATIVES:

Alternative No. 1:

Approve the purchase and authorize the City Manager to
execute an agreement with Impex Technologies, Inc., a local installer and reseller, to purchase the Nutanix Hyperconverge System.

Alternative No 2: Do not accept the purchase and continue on outdated physical servers and storage.

RECOMMENDATION:

Staff is recommending the approval of Alternative No. 1 to approve the purchase of Nutanix HCI, and authorize the City Manager to execute an agreement with IMPEX Technologies.

Prepared by: Robert Vargas, IT Analyst
Approved by: Scott Kim, IT Director
Fiscal review by: Ryan Smith, Finance Director
Approved by: Maggie Le, City Manager
Attachments:

1. IMPEX Quote

2. Nutanix HCI Summary

carahsoft
12369 SUNRISE VALLEY DRIVE | SUITE D-2 | RESTON, VA 20191 | T: 703.871.8500 | 888.66.CARAH | F: 703.871.8505 | WWW.CARAHSOFT.COM Amendment #1 to Agreement SCRA-Impex-051319
Please be advised that Impex Technologies and Carahsoft Technology Corp. have entered into an agreement dated 05-13-19 whereas Impex Technologies is authorized to quote on Carahsoft Technology Corp.’s NASPO Contract #7-17-70-40-05. In Reference to Attachment A, this agreement currently applies to the Rubrik product line only and is effective for the life of the Contract.

The only purpose of this addendum is to update the agreement to add Nutanix products. All terms and conditions of the previous agreement remain the same.

Please feel free to contact us at [email protected] with any questions you may have.

Carahsoft Technology Corp Impex Technologies
Name: Kristina Smith Name: Rajiv Shah
Title: Contracts Manager Title: President
Signature: Signature:

Date: Date: August 28, 2019
8/28/19

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: Assignment of Measure HH Reserves
Three-Year Strategic Goals
☐ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☒ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☐ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY:

City Council previously established reserves for the General Fund to provide a safety net during economic downturns, cover unexpected expenses, or assign certain amounts intended to be used for specific purposes. Since Measure HH revenue source is unique, it is essential to distinguish between the reserves from this revenue source and general reserves to ensure appropriate management and allocation of funds. Staff recommends that City Council assign $23,261,479 of General Fund Capital Project reserves to a newly created Measure HH reserve.

DISCUSSION:

In November 2016, the voters of Fountain Valley approved Measure HH, which authorized a 1% transaction tax. This transaction tax revenue is deposited into the City's General Fund and used to fund various essential City services, including public safety, parks and recreation, infrastructure, and public works. The City of Fountain Valley experienced significant revenue growth in recent years, resulting in identified surpluses from the Measure HH revenue source.

The City Council established reserves for the General Fund to provide financial stability during economic downturns, unexpected expenses, or assigning funds for specific purposes. Given that the Measure HH revenue source is unique, it is of interest to distinguish between the reserves for this revenue source and General Fund reserves.

The City began collecting Measure HH revenues in 2017. Through June 30, 2022, the City has collected $71,165,574 in Measure HH revenue and spent $30,270,674 on essential city services,

Measure HH Reserves
April 18, 2023

capital improvements, and pension payments. The remaining $40,894,900 has been assigned to reserves. Including investment earnings, Measure HH contributed $41,998,864 to Reserves.

HH Reserves
Used
Financial Stewardship: Reserves
Capital Reserves 18,145,228 18,145,228 30,476,135 60%
Capital Projects Set-aside 5,116,251 5,116,251 5,116,251 100% Fire Apparatus Reserves 1,929,307 (1,199,307) 730,000 730,000 100% Pension Reserves 10,300,000 820,701 11,120,701 11,120,701 100% Emergency Reserves 4,903,421 4,903,421 18,426,000 27%
Other Reserves - - - 20,915,028 0%
Total General Fund Reserves $ 40,394,207 $ 820,701 $ (1,199,307) $ 40,015,601 $ 86,784,115 46% OPEB Trust* 1,700,000 283,263 1,983,263 12,376,076 16%
Total HH Reserves $ 42,094,207 $ 1,103,964 $ (1,199,307) $ 41,998,864 Investment
Earnings
General Fund Reserves
As of June 30th, 2022
%
provided
by HH
Total HH
Reserve
Balance
Total HH
Revenue
Reserved
*OPEB Funds are held in a trust provided by PARS. These legally restricted funds are not considered apart of the City's Governmental Funds.

Total General
Fund
Reserves
Currently, General Fund reserves include $35,592,386 assigned to Capital Projects. Of this total, $23,261,479 is from surplus Measure HH revenues. To distinguish between Measure HH reserves and General Fund reserves, staff recommends that the City Council assign all identified Measure HH surpluses in the General Fund Capital Projects reserve to a newly created Measure HH reserve. This separate reserve would be for accounting and public reporting purposes only.

Essentially, it would help the City provide clear data to the public about how each dollar of Measure HH revenue is spent. Creation of the separate account does not change the fact that Measure HH funds are general funds and have no specific legal earmark, such as the case with enterprise funds. Any surplus Measure HH revenues received each year will be added to the Measure HH reserve at the conclusion of the fiscal year.

To ensure transparency and accountability, the use of these reserved funds are subject to annual review and appropriation by the City Council during the budget adoption process. Proposed expenditures would align with the Responsible Spending Pledge.

FISCAL REVIEW
The proposed assignment of General Fund revenues will reduce General Fund Capital Projects reserve to $12,330,907 and add a new Measure HH reserve of $23,261,479. The proposal does not impact the total General Fund Balance.

Measure HH Reserves
April 18, 2023

FUND BALANCES:

Nonspendable:

Inventories 27,590 27,590
Prepaid items 955,242 955,242
Restricted: -
Public safety - -
Transportation 2,238,242 2,238,242
Housing - -
Community development 171,115 171,115
Capital projects 109,812 109,812
Other purposes 271,299 271,299
Debt service 7 7
Pension 11,120,701 11,120,701
Committed: -
Emergencies 18,426,000 18,426,000
Assigned: -
Fleet replacement 2,892,562 2,892,562
Information technology replacement 1,421,229 1,421,229
Major facility replacement 3,036,647 3,036,647
Employee benefits 2,422,709 2,422,709
Self insurance 5,051,199 5,051,199
Capital equipment 1,096,362 1,096,362
Capital projects 35,592,386 12,330,907
Measure HH Reserves - 23,261,479
Economic development 2,130,501 2,130,501
Contingency reserves 500,000 500,000
Unassigned (679,488) (679,488)
TOTAL FUND BALANCES 86,784,115 86,784,115
Current FY 22-23
Beginning Fund
Balance
FY 22-23 Beginning
Fund Balance with
HH Reserve
PUBLIC NOTIFICATION:

Not applicable.

ENVIRONMENTAL IMPACT REVIEW:

Not applicable.

ATTORNEY REVIEW:

The Attorney for the City reviewed this staff report and concurs with the recommended action.

Measure HH Reserves
April 18, 2023

ALTERNATIVES:

Alternative No. 1: Authorize the Finance Director to create a Measure HH Reserve and assign $23,261,479 of General Fund Capital
Project reserves to the newly created Measure HH reserve.

Alternative No 2: Do not approve alternative No. 1 and provide direction to staff.

RECOMMENDATION:

Staff recommends that City Council approve alternative No. 1 to authorize the Finance Director to create a Measure HH Reserve and assign $23,261,479 of General Fund Capital Project reserves to the newly created Measure HH reserve.

Prepared by: Ryan Smith, Finance Director
Reviewed by: Colin Burns, City Attorney
Approved by: Maggie Le, City Manager

CITY OF FOUNTAIN VALLEY

CITY COUNCIL

COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: April 18, 2023
Members of the City Council
SUBJECT: Purchase and Sale Agreement for 17101 Bushard Street, Fountain Valley, CA 92708 (APN No. 167-301-04)
Three-Year Strategic Goals
☒ Enhance the culture and environment of “A Nice Place to Live” ☐ Attract and retain revenue producing businesses
☐ Achieve fiscal stability in accordance with the 20-Year Financial Plan ☒ Attract and retain quality staff
☐ Not applicable
EXECUTIVE SUMMARY:

Pursuant to the proposed Agreement for Purchase and Sale of Real Property and Escrow Instructions (17101 Bushard Street) (“Purchase and Sale Agreement”), if approved, the City will acquire a 2.86-acre parcel of real property located at 17101 Bushard Street (“Property”) for public purposes, in particular to design, construct and operate a new fire station. Current City Fire Station No. 1 is located on a 0.6-acre parcel at 17737 Bushard Street; the existing facilities are outdated and undersized, making it difficult for a new modern fire station to be constructed on the existing site.

The Property is located in a central part of the City; a new fire station at that location would allow for quick response times to emergencies throughout the community. The Property is large enough to accommodate a modern fire station that meets the needs of the community today and into the future, will support gender diversity and appropriate living quarters for the firefighters, and have adequate space for equipment storage and onsite training facilities.

The purchase price for the Property is $8,125,000. In addition to that funding, Staff requests funding to pay for closing costs, demolition of the existing disused office building, and to add interim security measures that include temporary fencing and cameras. Acquisition of this Property for the new fire station also would include cost savings and revenue to the City, estimated to exceed $4 million.

Purchase and Sale Agreement
April 18, 2023

DISCUSSION:

The City’s existing Fire Station No. 1 is outdated and does not meet the current or future needs of the City. Therefore, the Fire Department has identified the need for a new fire station on a larger property that can accommodate modern firefighting equipment and provide better response times to emergencies. The Property is located in a central location that would allow for quick access to all parts of the City serviced by Fire Station No. 1.

The Purchase and Sale Agreement sets forth the terms and conditions for the City’s acquisition of the 2.86-acre; Property is located at 17101 Bushard Street for $8,125,000. The Property is improved with a one-story office building that is in disuse and material disrepair; the limited use of the building presently is for offsite storage by a nearby engineering business. If the acquisition is approved and proceeds, post-closing the City will cause demolition of the building, secure the perimeter of the parcel, then proceed with planning, design, construction and operation of a new fire station. The new facilities will accommodate modern fire apparatus, enhance firefighter and paramedic response times, and afford ample space for offices, living quarters, equipment storage, and onsite training. The size of the parcel, including the existing large parking lot, will facilitate future needs.

Existing Fire Station No. 1 was originally built in 1958 with an addition in 1985, 65 and 38 years ago respectively. This facility was not designed for modern-day fire apparatus, lacks storage space, the onsite parking is inadequate for daily staffing, does not meet present day requirements to accommodate gender diversity, does not meet current design and construction standards for emergency response infrastructure, and lacks necessary space to support housing ambulance response. Given these limitations and the inability to expand due to surrounding residential uses, the Fire Department’s objective has been to locate and acquire a larger parcel sited within the service area.

If the Property is acquired, Staff would engage the services of the architect team presently under contract to design the new fire station. At future meetings, Staff will present to the City Council for consideration and action the planning, design and construction bidding process; this series of actions will take approximately 18 months. In order to secure the perimeter of the Property post-acquisition, Staff requests additional funding of approximately $45,000 to pay for demolition of the existing building and appurtenant structures, installation of security cameras, and rental of proper fencing.

Recently, the City had the Property appraised by a licensed and experienced appraiser; the purchase price of $8,125,000 is consistent with the appraised value.

Purchase and Sale Agreement
The attached Purchase and Sale Agreement sets forth the terms and conditions of the sale, opening of escrow, allows the City a due diligence period to undertake onsite inspection of the land for suitability of the new fire station and evaluation of the existing structures to identify potential issues that may be encountered during demolition. The vested Owner and Seller is The BSK Family Trust, Dated December 18, 2020, Kim Raeburn Henry, Trustee. Through CBRE, Inc., as broker, the Owner offered for sale the Property on the open market; the City did not initiate the for-sale transaction. Mr. Henry, as Trustee of the Owner, is also the

Purchase and Sale Agreement
April 18, 2023

President of SPEC Services, Inc., the tenant engineering company. The Owner, as landlord, and tenant, are parties to a lease to allow for the storage use that is ending prior to close of escrow. The exhibits to the Purchase and Sale Agreement include the legal description, a map of the site, form of grant deed, bill of sale, a list of due diligence documents, and an estoppel and release to be executed by the landlord and tenant.

Cost Savings
While the purchase of the Property does carry additional costs as opposed to utilizing the existing site, there will be substantial costs saving and potential revenue to the City as well.

Acquisition of the Property will allow the continued use of the existing Fire Station No. 1 during construction and eliminate the need for a temporary station. The cost of the temporary station was estimated at $2 to $3 million.

Once the new fire station is constructed and fully operational, the City could sell the existing site at 17737 Bushard Street or consider other reuse options. Staff has discussed the potential value for a residential development on that property with an experienced housing developer and conservatively estimates that value of the property at $1.6 to $2 million depending on density.

Staff also will be evaluating the potential for an interim use of the Property as a source of revenue before construction of the new fire station would begin. For example, during the 18-month RFP process for planning, design, and construction, a temporary use could be outdoor storage.

Given the cost savings and the land value of the existing fire station site, Staff believes that nearly half of the $8,125,000 purchase price could be offset.

FISCAL REVIEW:

If the City Council approves the Purchase and Sale Agreement, the Owner, as Seller, and the City, as Buyer, will open escrow with First American Title Company. The City will pay the purchase price of $8,125,000, one-half of escrow fees, certain title fees, other closing costs, and fees for inspection during the due diligence period. These fees are estimated to be $15,000. Additional costs would include $45,000 for perimeter fencing. Total funding needed for the purchase and security fencing is estimated to be $8,185,000. These costs are not included in the current FY 2022-23 budget and will be appropriated from General Fund Reserves. To date, the City has spent $3,200 on a property appraisal and incurred fees for legal services to negotiate and prepare the Purchase and Sale Agreement with the Seller’s counsel, and review of due diligence materials.

If City Council approves the assignment of Measure HH reserves, at the April 18, 2023 City Council Meeting, the City will have two options as to which specific reserve account will be utilized for this purchase. The City can use either General Fund reserves assigned to Capital Projects or General Fund reserves assigned to Measure HH.

First, City Council may elect to use the reserves assigned to Capital Projects. This reserve has a current balance of $12,330,907 and is designed to fund capital expenditures and avoid

Purchase and Sale Agreement
April 18, 2023

the issuance of debt. If City Council elects to use reserves assigned to Capital Projects to fund the purchase of the property, the remaining balance in the General Fund Capital Projects reserve would be approximately $4,190,907. This puts the balance below the stated reserve goal of $10-$15 Million and may limit the City's ability to undertake other capital projects in the near future.

Alternatively, the City may elect to use General Fund reserves assigned to Measure HH. The current reserve balance is $23,261,479. This reserve is designed to align with the original intent of the Measure HH ballot language and the Responsible Spending Pledge. Based on the nature of this property acquisition for Fire Station 1, the purchase fits within the goals of the Responsible Spending Pledge by maintaining and enhancing infrastructure and facilities.

Additionally, the acquisition meets the stated funding priorities of maintaining essential city services including public safety and helps to maintain firefighters/paramedics by providing a modern and safe working environment. Should Council elect to use the reserves assigned to Measure HH, the remaining balance in the reserve would be approximately $15,121,479. The City would still have a significant balance in this reserve, which could be used to fund other essential services, including public safety, senior and youth programs, infrastructure, parks, and paying down debt and unfunded liabilities.

PUBLIC NOTIFICATION:

This item was publicly noticed under normal agenda procedures.

ENVIRONMENTAL IMPACT REVIEW:

Under the California Environmental Quality Act, California Public Resources Code Section 21000, et seq., and the implementing regulations set forth at Title 14 California Code of Regulations Section 15000, et seq. (together, “CEQA”), in particular 14 CCR 15061(b)(3), the sale by the Seller and purchase by the City that causes a change in vesting and title to the Property, without any other or further steps, is an activity that is “covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA[;]” Staff will undertake an initial study and other necessary steps in compliance with CEQA before commencing planning, design and construction of the new fire station facility.

ATTORNEY REVIEW:

Special Counsel Celeste Brady with Stradling Yocca Carlson & Rauth negotiated and prepared the Purchase and Sale Agreement and assisted with the drafting of this staff report, which were also reviewed and approved by the Attorneys for the City.

ALTERNATIVES:

Alternative No. 1: Adopt City Council Resolution 2023-__ Approving the Purchase and Sale Agreement for the Property located at 17101 Bushard Street and approve the appropriation $8,185,000 of General Fund reserves assigned to Measure HH to fund the purchase.

Purchase and Sale Agreement
April 18, 2023

Alternative No. 2:

Alternative No. 3:

Alternative No. 4:

Adopt City Council Resolution 2023-__ Approving the Purchase and Sale Agreement for the Property located at 17101 Bushard Street and approve the appropriation of $8,185,000 of General Fund reserves assigned to Capital Projects to fund the purchase.

Do not adopt City Council Resolution 2023-__ and thereby not acquire the property located at 10711 Bushard Street.

Continue the item for further consideration.

RECOMMENDATION:

Staff recommends that the City Council:

Approve alternative No.1 to adopt the attached City Council Resolution that: (a) makes certain findings under CEQA, (b) approves the Purchase and Sale Agreement to acquire the Property located at 17101 Bushard Street, Fountain Valley, CA 92708 for a purchase price of $8,125,000, (c) authorizes and directs the City Manager to take all necessary steps to close escrow and complete the purchase of the Property; and (d) appropriates General Fund reserve assigned to Measure HH in the amount of $8,185,000 to purchase the property and pay all closing costs and installation of security measures.

Prepared by: Omar Dadabhoy, Deputy City Manager/Community Development Director
Reviewed by: Bill McQuaid, Fire Chief
Fiscal review by: Ryan Smith, Finance Director
Approved by: Maggie Le, City Manager
Attachment:

1. City Council Resolution

2. Purchase and Sale Agreement, with exhibits

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CITY COUNCIL RESOLUTION NO. 2023-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

FOUNTAIN VALLEY APPROVING THAT CERTAIN AGREEMENT FOR

PURCHASE AND SALE OF REAL PROPERTY AND ESCROW
INSTRUCTIONS (17101 BUSHARD STREET BETWEEN THE CITY,
AS BUYER, AND THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY, TRUSTEE, AS SELLER; AUTHORIZING THE CITY MANAGER TO EXECUTE AND IMPLEMENT THE AGREEMENT; AND

MAKING CERTAIN OTHER FINDINGS
WHEREAS, the City of Fountain Valley is a municipal corporation of the State of California (“City”); and
WHEREAS, The BSK Family Trust, dated December 18, 2020, Kim Raeburn Henry, Trustee (“Seller”) is the fee owner of that certain real property located at 17101 Bushard Street, Fountain Valley, California 92708 (APN 167-301-04) (“Property”); WHEREAS, the Property is generally bounded by Bushard Street to the east and the 405 freeway to the west and south and improved and is improved with a 16,133 square feet (approx.) concrete tilt-up single-story office building with an interior atrium and loading dock on an approximately 2.86-acre parcel and which building is fully vacant and not occupied by any person(s) or entity(ies); and
WHEREAS, the Seller has offered for sale on the open market through CBRE Inc. the Property; and
WHEREAS, the City Council believes the Property will be and become necessary for a future public project, in particular as the potential site for a new fire station in the City; and WHEREAS, in this regard, the City Council provided direction to the City Manager and City legal counsel to negotiate with the Seller and its broker, CBRE, Inc., about the potential acquisition of the Property and thereby City and Seller representatives and respective counsels have negotiated the terms and conditions of the sale by Seller and the purchase by City (as Buyer) of the Property as set forth in that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions (17101 Bushard Street) (“Agreement”); and WHEREAS, capitalized terms used in this Resolution are as defined in the Agreement, unless otherwise defined herein; and
WHEREAS, the City Council has duly considered all terms and conditions of the Agreement and believes acquisition of the Property in the vital and best interest of the City and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable laws and by this Resolution the City Council desires to approve the Agreement; and
WHEREAS, under the California Environmental Quality Act, California Public Resources Code Section 21000, et seq., and the implementing regulations set forth at Title 14 California Code of Regulations Section 15000, et seq. (together, “CEQA”), in particular

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14 CCR 15061(b)(3), the sale by the Seller and purchase by the City that causes a change in vesting and title to the Property, without any other or further steps, is an activity that is “covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA[;]” and the future undertaking of activities for a specific public project, such as development and operation of a new fire station, will be subject to CEQA review by the City and thereby the City’s acquisition of the Property does not commit the City to a specific construction plan or project.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FOUNTAIN VALLEY:

Section 1. The City Council finds and determines the foregoing recitals are true and correct and are a substantive part of this Resolution.

Section 2. The City Council approves the Agreement between the Seller and the City with such changes mutually agreed and necessary as are minor and in substantial conformance with the form of the Agreement submitted with this agenda item. The City Council authorizes the City Manager to execute, and the City Clerk to attest on behalf of the City the Agreement, the certificate of acceptance of the Grant Deed executed by the Seller, as grantor, to the City, as grantee, and other implementing documents and instruments.

Copies of the final form of the Agreement, when duly executed and attested, shall be placed on file in the office of the City Clerk. Further, the City Manager, and her designees, are authorized to implement the Agreement and take all further actions necessary and appropriate to carry out the City’s acquisition of the Property. The City Manager, and her designees, are authorized, to the extent necessary during the implementation of the Agreement, to make technical or minor changes and interpretations thereto after execution to properly implement and carry out the Agreement, provided any changes shall not materially affect the rights and obligations of the City.

Section 3. In addition to the authorization of Section 2 above, the City Manager, and her designees, are authorized, on behalf of the City, to cause issuance of warrants and take other actions to implement and administer, the City’s obligations, responsibilities and duties, as Buyer, to be performed under the Agreement.

Section 4. The City Council finds and determines that the Agreement is exempt from CEQA as cited in the above recitals, including the exemption set forth at 14 Cal. Code Regs. Sect. 15061(b)(3).

Section 5. The City Manager, and her designees, are directed to prepare, sign, and file a Notice of Exemption with the County Clerk of the County of Orange pursuant to CEQA.

Section 6. The City Clerk shall certify to the adoption of this Resolution.

THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE CITY COUNCIL THE 4th DAY OF APRIL 2023, BY THE FOLLOWING ROLL CALL VOTE:

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AYES:

NOES:

ABSTAIN:

ABSENT:

CITY OF FOUNTAIN VALLEY
By:

Kim Constantine, Mayor
or Authorized Designee
ATTEST:

Rick Miller, City Clerk
or Authorized Designee

ATTACHMENT TO RESOLUTION
4860-2871-2535v2/024538-0013

ATTACHMENT TO RESOLUTION

ATTACH COPY OF AGREEMENT

4865-7714-1595v7/024538-0013

AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY

AND ESCROW INSTRUCTIONS
(17101 Bushard Street)
Escrow and Title Order No. NCS-1170693-SA1 Date of Opening of Escrow: April __, 2023 To:

Maureen Collier
Sr. Commercial Escrow Officer
First American Title Insurance Company
National Commercial Services
18500 Von Karman Avenue, Suite 600
Irvine, CA 92612
Email: [email protected]
Michael Brinkman
Commercial Title Officer/Underwriter
First American Title Insurance Company
National Commercial Services
18500 Von Karman Avenue, Suite 600
Irvine, CA 92612
Email: [email protected]
Team Email: [email protected]
This AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND ESCROW INSTRUCTIONS (17101 Bushard Street) (“Agreement”) is dated as of April 18, 2023 and is entered into between THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY, TRUSTEE (“Seller” or “Owner”), and CITY OF FOUNTAIN VALLEY, a California municipal corporation (“Buyer” or “City”). City, as Buyer, and Seller, as Owner, are sometimes hereinafter individually referred to as a “Party” and collectively as the “Parties” to this Agreement. The “Effective Date” of this Agreement is the date that both Parties have fully executed this Agreement.

RECITALS
The following Recitals are a substantive part of this Agreement and are incorporated herein:

A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California.

B. Seller is the owner of that certain real property commonly known and located at 17101 Bushard Street, Fountain Valley, CA 92708 in the County of Orange, State of California, County Assessor’s Parcel Number 167-301-04 (“APN”), and generally bounded by Bushard Street to the east and the 405 Freeway to the west and south (“Land”). Presently, the Land is improved with a 16,133 square feet (approx.) concrete tilt-up single story office building with interior atrium and loading dock (“Building”) upon an approximately 2.86-acre parcel, as more particularly described on Exhibit A and depicted on Exhibit B attached hereto and by this reference incorporated herein. The Land and the Building are collectively referred to herein as the “Real Property”. The Real Property, together with all of Seller’s rights in and to (i) all improvements thereon, (ii) all easements, licenses and interests appurtenant thereto, (iii) all tangible property owned by Seller and located on the Real Property as of the Closing (including furniture, fixtures and equipment), and (iv) all development rights, governmental approvals and land entitlements specifically relating thereto, are collectively referred to herein as the “Property”).

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C. Prior to and within six (6) months of the Effective Date, Seller, as Owner, listed and “offered for sale” on the open market this commercial Property with and through CBRE, Inc., Attention, Greg Sullivan, First Vice President, License No. 00920305, ([email protected] and ) www.cbre.com/greg.sullivan (herein, “CBRE”).

D. This transaction qualifies as real property “offered for sale” to the public as such term is defined in California Government Code, Section 7267.2(e):
“…“offered for sale” means any of the following:
(1) Directly offered by the landowner to the public entity for a specified price in advance of negotiations by the public entity.
(2) Offered for sale to the general public at an advertised or published specified price, set no more than six months prior to, and still available at, the time the public entity initiates contact with the landowner regarding the public entity’s possible acquisition of the property.”
E. Buyer has notified Seller of its intent to acquire the Property through Seller’s broker, CBRE, as the Seller’s listing agent. Presently, Buyer is empowered by law and has the authority to acquire real property for a public purpose or public purposes, through a negotiated purchase, and if not successful, through the exercise of its power of eminent domain as a general law city, including acquisition of this Property by eminent domain pursuant to applicable provisions of the California Government Code, the Code of Civil Procedure, and other laws (together, a “Condemnation Action”).

Therefore, Buyer has informed Seller that if Buyer and Seller had not reached mutual agreement for the City’s acquisition of the Property offered for sale by Seller, then the City would have initiated proceedings under the Government Code, and if necessary under the Code of Civil Procedure, to acquire the Property as a Condemnation Action. As a result, Seller has acquiesced and hereby agrees to sell the Property to Buyer pursuant to the terms and conditions of this Agreement in lieu of the City’s continuing acquisition proceedings as a Condemnation Action.

F. Buyer herein acknowledges that Seller has advised Buyer that it would not have entered into this Agreement to sell the Property to Buyer but for Buyer’s authority to initiate a Condemnation Action; and, thereby, Seller and Buyer have entered into this Agreement to avoid the continued proceedings necessary to acquire the Property through a Condemnation Action.

G. Buyer has the right and power to acquire real property for public purposes, including the potential demolition and reuse of the Property, if this sale proceeds, for potential public safety facilities, such as but not limited to a new fire station, in the City, or other public purposes, which Seller acknowledges and agrees as a material part of the consideration and just compensation paid under this Agreement.

H. Therefore, Seller desires to sell to City, and City desires to purchase from Seller, the Property, upon the terms and conditions set forth in this Agreement.

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

1. Purchase and Sale of Property. City hereby agrees to purchase from Seller, and Seller agrees to sell to City, the Property, upon the terms and conditions hereinafter set forth.

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2. Purchase Price. The total purchase price for the Property, which includes the value of the Land and improvements is EIGHT MILLION ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS and 00/100 ($8,125,000.00) (“Purchase Price”).

2.1 Valuation of Property. While the “guidance price” was $8,500,000 as stated in the CBRE public offering and listing that offered for sale the subject Property, the Purchase Price is less than that figure; nonetheless, the Seller agrees that the Purchase Price is just compensation to Owner for City’s acquisition of the Property, and in this regard, pursuant to the Government Code, City has obtained an independent appraisal of the Property to evidence the same. (a) All-Inclusive Sale. The Purchase Price is an all-inclusive payment by City to Seller for any and all of Seller’s interests in the Property. (b) Estoppel. The sale is also inclusive of the Seller’s representation to City that City, Seller, as landlord, and “Tenant”, SPEC Services, Inc., a California corporation, shall enter into that certain Release, Waiver and Estoppel Agreement Re Lease and Relocation Law (“Release, Waiver and Estoppel Agreement”) the form of which is attached as Exhibit F and fully incorporated by this reference. Seller discloses to the City it is the landlord under a certain Lease with Tenant as further described herein; in this regard, Seller discloses to City that Kim Raeburn Henry is the President of the Tenant entity and he also is the named Trustee of the vested Owner.

2.2 Payment of Purchase Price.
(a) Not later than five (5) business days following the Opening of Escrow, as defined herein, City shall deposit in Escrow in good funds, the sum of One Hundred Twenty-Five Thousand Dollars and 00/100 ($125,000.00) (“Initial Deposit”), which Initial Deposit shall be applicable to the Purchase Price upon Closing unless (i) the Closing fails to occur due to Seller’s default in any material respect under this Agreement and City, as its sole and exclusive remedy, elects to terminate this Agreement and have its Deposit returned within seven (7) days of such termination (provided, that City is not in Monetary Default independent of Seller’s default as provided herein), (ii) this Agreement is terminated by City on or before the expiration of the Due Diligence Period, or (iii) this Agreement is terminated in accordance with either Section 8.3 or 13.1, in which case, the Initial Deposit shall be returned to City within seven (7) days of such termination and neither City nor Seller shall have any further obligations to the other, except for those obligations, which as outlined in this Agreement, expressly survive termination. The Initial Deposit shall remain refundable until the City approves of the condition of the Property pursuant to the terms of Section 5.1. “Good funds” shall mean a wire transfer of immediately available funds or cash. (b) Buyer and Seller have bargained for and agree that One Hundred and 00/00Dollars ($100.00) of the Initial Deposit (“Independent Consideration”) is consideration for Buyer’s rights under this Agreement and for Seller providing the Due Diligence Period to Buyer. Upon receipt, the Escrow Holder shall immediately release the Independent Consideration to Seller, and notwithstanding any provision in this Agreement to the contrary, the Independent Consideration shall be nonrefundable to Buyer in all circumstances. Any time that this Agreement provides that the Deposit is to be returned to Buyer, the amount returned to Buyer shall be net of the Independent Consideration.
(c) Upon the City’s approval of the condition of the Property pursuant to the terms of Section 5.1, City shall deposit into Escrow in good funds, the additional sum of One

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Hundred Twenty-Five Thousand Dollars and 00/100 ($125,000.00) (“Additional Deposit”), which Additional Deposit shall be applicable to the Purchase Price upon Closing unless (i) the Closing fails to occur due to Seller’s default in any material respect under this Agreement and City, as its sole and exclusive remedy, elects to terminate this Agreement and have its Deposit returned within seven (7) days of such termination (provided, that City is not in Monetary Default independent of Seller’s default as provided herein), or (ii) this Agreement is terminated in accordance with either Section 8.3 or 13.1, in which case, the Additional Deposit shall be returned to City within seven (7) days of such termination and neither City nor Seller shall have any further obligations to the other, except for those obligations, which as outlined in this Agreement expressly survive termination. The Initial Deposit, the Additional Deposit, and if applicable, the Extension Deposit shall collectively constitute the “Deposit.”
(d) At least one (1) business day prior to the Closing Date, as defined in Section 6, City shall deposit the balance of the Purchase Price, subject to any other credits or debits hereunder, with Escrow Holder in good funds.

2.3 Interest Bearing Account. If requested in writing to do so by City, Escrow Holder shall deposit and hold the Deposit funds specified in Section 2.2 above in an FDICinsured interest-bearing account, in which event City shall pay all costs in connection therewith. All interest earned on said funds shall be credited to the party receiving the Deposit pursuant to the terms of this Agreement.

3. Escrow.

3.1 Opening of Escrow. Within three (3) business days after the execution of this Agreement by all Parties, the Parties shall open an escrow (“Escrow”) with First American Title Insurance Company, National Commercial Services, Maureen Collier, Sr. Commercial Escrow Officer, 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612, [email protected] (“Escrow Holder”) by causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow shall be deemed open on the date that Escrow Holder countersigns this Agreement.

The Parties agree to perform all acts reasonably necessary to close Escrow if and when required hereby. (a) The estimated term of the Escrow is forty-five (45) days from the opening of Escrow, but such period is subject to the terms and conditions of this Agreement, including potential extension of the Closing of Escrow as further described in Section 6.2 herein.

3.2 Escrow Holder. Escrow Holder is authorized to and shall:
(a) Prior to disbursing any portion of the Purchase Price to Seller in connection with the Close of Escrow (as defined below), Escrow Holder shall pay and deduct from the Purchase Price any amount necessary to satisfy (i) any delinquent taxes on the Real Property together with penalties and interest thereon, and/or (ii) delinquent assessments or bonds on the Real Property except those which title is to be taken subject to in accordance with the terms of this Agreement; (b) Prior to disbursing any portion of the Purchase Price to Seller in connection with the Close of Escrow, Escrow Holder shall pay and deduct from the Purchase Price, all amounts necessary to cause to be released and fully reconveyed any and all Monetary Liens (as defined below);

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(c) Pay and charge Seller for all recording fees incurred in this transaction related to payment of reconveyance fees and forwarding fees for partial or full reconveyances of deeds of trust or release of any mortgage by Seller;
(d) Pay and charge to Seller the cost of an ALTA owner’s standard policy of title insurance and pay and charge the City for the additional premium and charges for an ALTA owner’s extended policy of title insurance, including endorsements, as and if requested by the City, in connection with the purchase of the Property;
(e) Pay and charge Seller and City for escrow fees, recording fees, charges, and costs payable under Section 7, in accordance with Section 9.4 below, except as otherwise expressly provided in this Section 3.2;
(f) Prorate, as between City and Seller, real estate taxes and assessments through the Close of Escrow, with City to be charged with and have the benefit of the Closing Date, as provided in Section 9.3 of this Agreement; and
(g) Disburse the Purchase Price to Seller in accordance with this Agreement and record the Grant Deed in the Official Records of the County Recorder of Orange County, California

4. Additional Funds and Documents Required from City and Seller.

4.1 City. Subject to City’s written approval of the condition of the Property as set forth in Section 5.3, City agrees that on or before 1:00 p.m. on the business day preceding the Closing Date, City will deposit with Escrow Holder all additional funds (in good funds) and any other items and/or documents (executed and acknowledged, if appropriate) as may be necessary to comply with the terms of this Agreement, including without limitation, the following:
(a) The balance of the Purchase Price plus the sums necessary to pay City’s share of closing costs and prorations;
(b) A Preliminary Change of Ownership Statement completed in the manner required in Orange County; and
(c) Such funds and other items and instruments as may be reasonably necessary in order for Escrow Holder to comply with this Agreement.

4.2 Seller. Seller agrees that on or before 1:00 p.m. on the business day preceding the Closing Date, Seller will deposit with Escrow Holder items and/or documents (executed and acknowledged, if appropriate) as may be necessary to comply with the terms of this Agreement, including without limitation, the following:
(a) A grant deed conveying the Real Property to City in a form substantially similar to the form of Exhibit C attached hereto and incorporated herein by this reference (“Grant Deed”);
(b) A Bill of Sale in a form substantially similar to the form of Exhibit D attached hereto and incorporated herein by this reference (“Bill of Sale”);

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(c) A Non-Foreign Affidavit on Escrow Holder’s Standard form or a form substantially similar thereto (“Non-Foreign Affidavit”); and (d) Such funds and other items and instruments as may be reasonably necessary in order for Escrow Holder to comply with this Agreement.

4.3 Miscellaneous Documents. City acknowledges that as of the Effective Date Seller has provided (which may be via drop box) the due diligence items identified on Exhibit E (“Due Diligence Items”). City acknowledges and understands that all such materials made available by Seller are only for City’s convenience in making its own examination and determination during the Due Diligence Period, defined below, as to whether it wishes to purchase the Property, and, in so doing, City shall rely exclusively upon its own independent investigation and evaluation of the Property and not on any materials supplied by Seller except to the extent Seller is making representations and warranties under the terms of this Agreement. If City does not acquire the Property, all said documents shall be promptly returned to Seller. In addition, within ten (10) calendar days of the Effective Date, Escrow Holder shall deliver to City a natural hazard disclosure report covering the Real Property in such form as required by law, which shall be countersigned and returned to Seller and Escrow Holder.

5. Due Diligence Period.

5.1 Inspection Rights. At City’s own cost and expense, it may make an independent investigation of the Property and all other aspects of this transaction, and may rely thereon and on the advice of its consultants in entering into and, if applicable, terminating this Agreement.

City shall have the unqualified and unrestricted right to terminate its obligations under this Agreement, other than those which expressly survive termination, on or before the expiration of the Due Diligence Period, hereinafter defined.

5.2 City Inspection. Commencing upon the Opening of Escrow and continuing thereafter for thirty (30) calendar days (“Due Diligence Period”), City, its agents, employees, consultants and representatives shall have the right to:
(a) examine and inspect the Property including the physical condition, quality, quantity and state of repair of the Property in all respects, subject to Section 5.4 below; (b) review all instruments, records and documents that City deems appropriate or advisable to review in connection with this transaction, including, but not by way of limitation, any and all plans, specifications, surveys, environmental assessments, existing leases, contracts, and/or easement documents, reports, and title reports, and to obtain and review the Pro Forma (as defined below); and
(c) review all applicable laws, ordinances, rules and governmental regulations (including those relating to building, zoning and land use) affecting the development, use, occupancy or enjoyment of the Property.

5.3 Approval or Disapproval of Property after Inspection. On or before the expiration of the Due Diligence Period, City may notify Seller and Escrow Holder, in writing, of its unconditional approval or disapproval of the condition of the Property. Should City fail to provide written notice of its unconditional approval or disapproval, City shall be deemed to have disapproved the condition of the Property. Upon City’s delivery of written notice of its unconditional approval of

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the condition of the Property to Seller and Escrow Holder, the Deposit shall remain applicable to the Purchase Price but shall become non-refundable except as otherwise expressly provided in this Agreement. City may, in its sole discretion, elect to terminate this Agreement prior to the expiration of the Due Diligence Period based on disapproval of the condition of the Property. Upon termination of this Agreement, neither City nor Seller shall have any further obligations to the other, except for those obligations, which as outlined in this Agreement, expressly survive termination, and the Initial Deposit in full shall be returned to City as provided in Section 2.2 above,

5.4 Entry for Investigation. Subject to the conditions hereafter stated, Seller grants to City, its employees, consultants, and agents (collectively, “City Representatives”) a limited license to enter upon any portion of the Real Property, at a time and manner reasonably approved by Seller for the purpose of conducting engineering surveys, soil tests, investigations or other studies reasonably necessary to evaluate the condition of the Property, including without limitation interior, exterior, land and any structures on, under, or about the Real Property, which studies, surveys, investigations and tests shall be done at City’s sole cost and expense. City shall (a) notify Seller at least one (1) business day prior to each entry of the date and purpose of intended entry and provide to Seller the names and affiliations of the persons entering the Real Property; (b) conduct all studies in a diligent, expeditious and safe manner and not allow any dangerous or hazardous conditions to occur on the Real Property during or after such investigation; (c) comply with all applicable laws and governmental regulations; (d) keep the Property free and clear of all materialmen’s liens, lis pendens and other liens arising out of the entry and work performed under this paragraph; (e) maintain or assure maintenance of workers’ compensation insurance (or state approved self-insurance) on all persons entering the Real Property in the amounts required by the State of California; (f) maintain a policy of general commercial liability insurance on an “occurrence basis” with a combined single limit for bodily injury and property damage of at least Two Million Dollars ($2,000,000) per occurrence/annual aggregate, and otherwise in a form and from an insurance company reasonably acceptable to Seller and naming Seller as an additional insured, and City shall provide Seller with a certificate of insurance evidencing that such insurance is in place and (g) return the Property to its original condition immediately following City’s entry.

Notwithstanding the foregoing, City shall not be permitted to undertake intrusive or destructive testing of the Property, including, without limitation, a “Phase II” environmental assessment (collectively, the “Intrusive Tests”), without in each instance first obtaining Seller’s prior written consent thereto, which consent Seller may give or withhold in Seller’s sole and absolute discretion. If this Escrow is terminated by the City, then as and if requested by Seller in writing, City hereby agrees to provide to Seller a true and complete copy of all finalized tests, reports, studies and the like generated in connection with City’s inspection of the Property. City agrees to indemnify, defend, protect and hold Seller free and harmless from any and all loss, liability, claims, damages, liens and expenses arising directly or indirectly from the exercise of said license, or from City’s or its Representative’s failure to comply with the conditions to City’s entry onto the Real Property provided herein, but excluding any pre-existing condition discovered by City during its investigation of the Property (as long as City or City Representatives do not exacerbate such condition) and also excluding any matters directly resulting from Seller’s active gross negligence or willful misconduct. Such undertaking of indemnity and City’s other requirements set forth above in this paragraph shall survive the termination of this Agreement until the expiration of the applicable statute of limitations with respect to any potential claim (or, if a claim is made prior to the expiration of such statute of limitations, then until the final resolution (and payment) of any such claim). The limited license herein granted shall be co-extensive with the term of this Agreement or any extension thereof.

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6. Closing Date.

6.1 Closing. Close of Escrow shall occur on or before fifteen (15) calendar days from the expiration of the Due Diligence Period, unless an earlier date is agreed to by the Parties in writing and Escrow Holder is so informed, subject to the extension by Buyer of the Due Diligence Period, or extension by Seller of the Closing Date, as described in Section 6.2 below (“Closing Period”). The terms the “Close of Escrow”, “Closing Date” or “Closing” are used herein to mean the filing by Escrow Holder of Seller’s Grant Deed for record in the Office of the County Recorder of Orange County, California. City and Seller each specifically agree to strictly comply and perform its obligations herein in the time and manner specified and waives any and all rights to claim such compliance by mere substantial compliance with the terms of this Agreement.

6.2 Extension of Closing Date.
(a) Extension of Due Diligence Period by Buyer; Extension Deposit.

City shall have the right to extend the Due Diligence Period described in Section 5 above, and thereby the Closing Period by fifteen (15) calendar days, provided the City delivers to Escrow Holder the sum of Thirty Thousand Dollars ($30,000.00) (“Extension Deposit”), which amount shall be immediately non-refundable and applicable to the Purchase Price and shall be deemed consideration for such extension of the Closing Period. Notwithstanding the foregoing, the Extension Deposit shall be promptly returned to City if (i) Seller is in default in any material respect under this Agreement and City, as its sole and exclusive remedy, elects to terminate this Agreement and have its Deposit returned within seven (7) days of such termination (provided, that City is not in Monetary Default independent of Seller’s default as provided herein), or (ii) this Agreement is terminated in accordance with either Section 8.3 or 13.1, in which case, the Extension Deposit shall be returned to City within seven (7) days of such termination and neither party hereto shall have any further rights or obligations hereunder other than those that expressly survive the termination of this Agreement. (b) Extension of Closing Period by Seller. Seller shall have the right to extend the Closing Period up to an outside Closing Date of August 15, 2023 by giving written notice to Buyer of such election to extend at least five (5) business days prior to the scheduled Closing Date without such extension, provided that Seller shall be and remain obligated to maintain insurance coverages described herein and maintain the Real Property pursuant to Section 6.4 below.

6.3 Distribution of Documents. Following Close of Escrow, Escrow Holder shall distribute the documents as follows:
(a) To City:
(i) One (1) certified conformed copy of the Grant Deed, the original to be mailed or otherwise delivered to the City Clerk following recordation thereof; and (ii) One (1) duplicate original each of the Bill of Sale and the NonForeign Affidavit; (b) To Seller:
(i) The Purchase Price, subject to any credits, debits and prorations; and

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(ii) One (1) duplicate original each of the Bill of Sale and the NonForeign Affidavit.

6.4 Maintenance Obligations Prior to Close of Escrow. From the Effective Date and continuing to the Closing, Seller agrees to use commercially reasonable efforts, i.e., efforts that are fair, done in good faith, and correspond to commonly accepted commercial practices for owners of and tenants at comparable commercial real property (a) to maintain the Real Property in the same manner as Seller has been maintaining the Real Property immediately prior to the Effective Date (subject to Section 13.1 below), but expressly excepting Seller’s acknowledgement, agreement and hereby obligation to enter into the Release, Waiver and Estoppel Agreement, and (b) to secure the Real Property to keep the Real Property free from unauthorized occupancy, trespassers, squatters, unauthorized persons, graffiti, and accumulation of debris or waste material. Buyer acknowledges the existence of the current Lease between Owner and Tenant; and, Seller agrees to not enter into any license, rental, lease, or use agreement or authorize any occupancy at the Real Property by any person or entity not directly affiliated with Seller or Tenant without the Buyer’s prior written consent.

Without limiting other actions which may constitute commercially reasonable efforts, Seller agrees to post notices on and about the Real Property that provide express notice to the public that the Real Property is private property, trespassing is forbidden, and no persons may enter or remain on or about the Real Property without the Owner’s (or its Tenant) written permission. In this regard and in furtherance of clause (b), Seller agrees to use commercially reasonable efforts to keep off and remove unauthorized persons from the Real Property from the Effective Date and through the Closing Date.

In the event that Seller (or its Tenant) has actual knowledge of, or should reasonably be or become aware of an event, condition, or the existence of unauthorized occupancy, trespassers, squatters, or unauthorized persons on the Real Property, Seller or its representatives or agents shall first take commercially reasonable efforts to remove such persons. In addition, Seller may contact the Fountain Valley Police Department and request assistance in instructing and removing such unauthorized persons, trespassers, squatters or unauthorized persons off of the Real Property.

The foregoing steps are considered as commercially reasonable efforts with respect to such matters.

If the physical condition of the Real Property, including performance relating to clause (b) as described above is materially and adversely altered after the Effective Date and prior to Closing by any cause not resulting from the actions of the City, or any of the City Representatives (but excluding actions, if any, by the police department), each of which is a “Changed Property Condition”, and City has not waived such Changed Property Condition in writing, then Seller shall have the right to cure, or continue to cure, such and be entitled to extend the Closing Date for up to ten (10) business days for purposes of such cure. Seller acknowledges and agrees to its obligations related to clause (b) as described above, and that in no event will City waive a Changed Property Condition that relates to trespassers, squatters and unauthorized persons on or about the Real Property. If Seller fails to cure a Changed Property Condition of the Real Property, then the risk of loss provisions of Section 13.1 below shall apply, and neither Seller nor Buyer shall be in default under this Agreement as a result thereof. In this regard, Seller has informed Buyer (A) that the Building is in a state of disrepair and is not capable of being occupied in its current state, excepting Tenant’s use for storage pursuant to the Lease, and (B) that from time to time certain persons have been seen trespassing onto the Land (but not inside the Building).

As to the Building, among other items, parts of the electrical wiring and system have been stripped out, the heating, ventilation and air conditioning unit is not in working order, there are issues with the roof of the Building, certain doors are bolted shut, and the gas meter has been removed. Seller shall have no obligation to conduct any repairs or to make any improvements to the Building or appurtenant structures, and Buyer acknowledges the physical conditions of the Building as disclosed and described by Seller above; provided however the existence, if any, of unauthorized persons, trespassers, and squatters on or about the Real Property would be a Changed Property Condition that shall be cured by

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Seller as a condition precedent to the Closing and if there are any unauthorized persons, trespassers, and squatters on or about the Real Property as of the Closing Date, then Buyer shall not be obligated to proceed with the Closing, may terminate the transaction, and if so terminated receive a full refund of the Deposit, but Seller shall not be in default hereunder. Notwithstanding the foregoing, Seller shall have no obligations pursuant to this Section 6.4 after Closing, and Buyer shall take full responsibility with respect to any matters otherwise covered by this Section 6.4 from and after Closing.

6.5 Contracts. Subsequent to the expiration of the Due Diligence Period and assuming this Agreement has not been terminated, and assuming City has not delivered notice of its disapproval of the condition of the Property, Seller shall not enter into any new contracts or any amendments or modifications to the Existing Contracts, which new contracts or modifications shall survive Closing (collectively, “New Contracts”) without City’s prior written consent, which consent may be withheld in City’s sole discretion; provided, that, in the case of emergency (including, without limitation, immediate repairs) or other exigent circumstances, or as required by law, Seller shall have the right to enter into New Contracts with respect to the foregoing without City’s consent, provided that Seller shall notify City of such New Contracts immediately and as soon as practicable.

Notwithstanding the foregoing, in the event Seller executes a New Contract without first seeking the City’s prior written consent and which New Contract obligates the City to cover expenses or make payments after Closing, the City may at its option elect to deduct the amount of such expenses and payments from the Purchase Price or elect not to accept assignment of such New Contract and Seller shall remain responsible for same in accordance with Section 4.3. Seller shall terminate all existing maintenance contracts as of the Closing Date.

6.6 Leases. Subsequent to the expiration of the Due Diligence Period and assuming this Agreement has not been terminated, and assuming City has not delivered notice of its disapproval of the condition of the Property, in no event shall Seller enter into any agreement with any person or entity that allows occupancy or use of the Real Property or otherwise that may affect the use, operation or enjoyment of the Real Property after the Effective Date as “VACANT” and as of the Closing Date as VACANT real property. Notwithstanding anything to the contrary contained in this Agreement, Seller has informed City that the Building is currently subject to a lease between Seller and SPEC Services, Inc. Seller shall (a) enter into, and cause the Tenant to enter into, the Release, Waiver and Estoppel Agreement, (b) terminate such lease consistent with the Release, Waiver and Estoppel Agreement as a condition precedent to Closing and shall cause SPEC Services, Inc. to vacate the Building at or prior to the Closing Date.

7. Title Policy.

7.1 Approval of Title. Seller has provided to City (as part of the Due Diligence Items) that certain Commitment for Title Insurance issued by First American Title Insurance Company (“Title Company”), Order No. NCS-1170693-SA1 dated as of March 7, 2023, with Schedule B exceptions and hyperlinks to the underlying instruments (“Preliminary Title Report”); Buyer received one version of the Preliminary Title Report from CBRE on March 17, 2023 and that report was updated by the Title Company and received by Buyer from the Title Company on March 20, 2023. The Preliminary Title Report describes the state of title of the Real Property. The assigned title officer at the Title Company is Michael Brinkman. City shall notify Seller in writing of any objections City may have to title exceptions or other matters (“Disapproved Exceptions”) contained in the Preliminary Title Report within fifteen (15) calendar days after the Effective Date (“City’s Objection Notice”). If City fails to deliver City’s Objection Notice within said 15-day period, City shall be conclusively deemed to have approved the Preliminary Title Report and all matters shown thereon. In the event City delivers

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City’s Objection Notice within said period, Seller shall have a period of five (5) calendar days after receipt of City’s Objection Notice in which to notify City of Seller’s election to either (i) agree to remove any such Disapproved Exceptions prior to the Close of Escrow; or (ii) decline to remove any such Disapproved Exceptions (“Seller’s Notice”). It shall be incumbent upon City to request, and the Title Company to issue to City, a “pro forma” or similar commitment for an owner’s policy of title insurance (“Pro Forma”) prior to the expiration of the Due Diligence Period. If City does not receive timely, and thereafter approve, such Pro Forma prior to the expiration of the Due Diligence Period, City shall have the right to terminate this Agreement by written notice to Seller and to Escrow Holder given prior to the expiration of the Due Diligence Period (in which case City shall be entitled to a return of the Deposit). If City fails to so terminate this Agreement, City shall be deemed to have approved such Pro Forma (or, if City has failed to obtain such Pro Forma, then such Preliminary Title Report). City agrees that it will take title to the Real Property subject to the items set forth in the Pro Forma and any other Permitted Exceptions. Notwithstanding anything in this Agreement to the contrary, Buyer hereby objects to and Seller shall remove from title of the Real Property, at or before the Close of Escrow, each, any, and all deeds of trust or mortgages securing loans made to Seller. (a) Upon the issuance of any amendment or supplement to the Preliminary Title Report that adds additional exceptions that are not caused by the actions of City, the foregoing right of review and approval shall also apply to said amendment and/or supplement, provided, however, that City’s initial period of review and approval or disapproval of any such additional exceptions shall be limited to ten (10) additional calendar days following receipt of notice of such additional exceptions along with a legible copy of the underlying document comprising the basis for each such additional exception.
(b) “Monetary Liens” shall mean all (i) liens secured by deeds of trust securing loans which are secured by an interest in the Real Property, (ii) federal tax liens due to failure to timely pay taxes which have been imposed on or secured by the Real Property, and (iii) mechanics’ or materialmens’ liens relating to work contracted for and performed at the Real Property and recorded against title to the Real Property (except for any such lien resulting from the actions of City). Such Monetary Lien amounts may be up to and including the total amount of unpaid principal and interest on note(s) secured by mortgage(s) or deed(s) of trust, if any, and all other amounts due and payable in accordance with the terms and conditions of said trust deed(s) or mortgage(s) or liens including late charges, if any. Notwithstanding the foregoing, Monetary Liens shall expressly exclude any lien which Seller is disputing in good faith.

7.2 Title Policy to be Issued to City. When Escrow Holder holds for City the Grant Deed in favor of City executed and acknowledged by Seller covering the Real Property, Escrow Holder shall cause to be issued and delivered to City and Seller as of the Closing an ALTA standard coverage policy of title insurance, or, upon City’s request therefor and City’s compliance with any additional requirements imposed by the Title Company as a result of such request, an ALTA standard coverage policy of title insurance (“Title Policy”), issued by Title Company, with liability in the amount of the Purchase Price, covering the Real Property and showing title vested in City free of all liens and encumbrances, except (collectively, “Permitted Exceptions”):
(a) All nondelinquent general and special real property taxes and assessments for the current fiscal year;

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(b) Easements, encumbrances, covenants, conditions, restrictions, reservations, rights-of-way and other matters of record, as approved or deemed approved by City pursuant to Section 7.1 above;
(c) The standard printed exceptions and exclusions contained in the ALTA standard or ALTA extended form policy;
(d) Any exceptions created or consented to in writing by City, including without limitation, any exceptions resulting from City’s possession of or entry on the Real Property; (e) If City fails to provide an ALTA survey for the Real Property acceptable to the Title Company for purposes of issuing the Title Policy, a general survey exception; (f) Items shown or that would be shown on any survey of the Real Property and not disapproved by City pursuant to Section 7.1 above; and (g) Such other exceptions as Title Company shall commit to insure over, with City’s prior written consent or approval of same, without any additional cost to City, whether such insurance is made available in consideration of payment, bonding, indemnity by Seller or otherwise.

8. Conditions Precedent to Close of Escrow.

8.1 Conditions Precedent to City’s Obligations. The obligations of City under this Agreement to proceed with Close of Escrow shall be subject to the satisfaction or written waiver, in whole or in part, by City of each of the following conditions precedent:
(a) Seller is not in material default with the terms of this Agreement. (b) All representations and warranties of Seller stated in this Agreement are true and correct in all material respects as if made on and as of the Closing Date except to the extent such representations and warranties are no longer true due to an action taken by Buyer or any of the City Representatives.
(c) Seller shall have duly performed in all material respects every covenant of Seller required to be performed by Seller hereunder prior to the Close of Escrow. (d) Title Company has irrevocably committed to issue the Title Policy, consistent in all material respects with the Pro Forma (or, if City has failed to obtain such Pro Forma, then the Preliminary Title Report) as required by Section 7 of this Agreement insuring title to the Real Property vested in City (or other vestee designated by City for vesting purposes only), subject to the allocation of fees and costs as between Seller and Buyer for issuance of the Title Policy as provided herein.

8.2 Conditions Precedent to Seller’s Obligations. The obligations of Seller under this Agreement to proceed with Close of Escrow shall be subject to the satisfaction or written waiver, in whole or in part, by Seller of the following condition precedent:
(a) City is not in default in any material respect under the terms of this Agreement.

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(b) City shall have duly performed in all material respects every covenant of City required to be performed by City hereunder prior to the Close of Escrow, including the timely delivery of the balance of the Purchase Price pursuant to the provisions of Section 2 above and all other items set forth in Section 4.1 above.
(c) All representations and warranties of City in this Agreement are true and correct in all material respects as if made on and as of the Closing Date except to the extent such representations and warranties expressly relate to an earlier date.

8.3 Return of Deposit; Seller Default. In the event Seller fails to satisfy any of the conditions specified in Section 8.1, above, and those conditions are not waived by City or cured within two (2) business days after Seller’s receipt of a written notice from City specifying such default in writing prior to Closing, this Agreement shall terminate automatically without further action by any Party or Escrow Holder and Escrow Holder shall promptly return the Deposit together with any and all interest accrued thereon to City.

9. Escrow Provisions.

9.1 Escrow Instructions. This Agreement, when signed by City and Seller, shall also constitute escrow instructions to Escrow Holder. Escrow Holder, to whom these instructions are delivered, is hereby authorized, directed, and empowered to act under and in strict accordance with this Agreement. If required by Escrow Holder, City and Seller agree to execute Escrow Holder’s standard escrow instructions, provided that the same are consistent with and do not conflict with the provisions of this Agreement. In the event of any such conflict, the provisions of this Agreement shall prevail.

9.2 General Escrow Provisions. Escrow Holder shall cause the Grant Deed to be recorded (but in no event after the expiration of the Closing Period) when Title Company is in a position to issue the Title Policy in the form described in Section 7 below, and Escrow Holder will hold for the account of Seller and City, respectively, the items described in Sections 4.1 and 4.2 above, to be delivered to Seller and City, respectively, through Escrow, less costs, expenses and disbursements chargeable to Seller and City, respectively, pursuant to the terms hereof. Escrow Holder shall deliver the Title Policy to the City and instruct the Orange County Recorder to mail the Grant Deed to City at the address set forth in Section 27 after recordation. All funds received in this Escrow shall be deposited in one or more general escrow accounts of the Escrow Holder with any bank doing business in Orange County, California, and may be disbursed to any other general escrow account or accounts.

All disbursements shall be made by Escrow Holder’s check or wire transfer.

9.3 Proration of Real Property Taxes; Rents. All nondelinquent general and special real property taxes applicable to the Real Property shall be prorated to the Close of Escrow on the basis of a thirty (30) day month and a three hundred sixty day (360) year. In the event that property taxes are assessed on a parcel of real property that includes land other than the Real Property, such proration shall include only taxes attributable to the Real Property, calculated in terms of total gross square feet of land assessed pursuant to the tax statement versus total gross square footage of the Real Property.

Any supplemental tax bills received after Close of Escrow shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and by City, if due, to the extent they relate to a period after Close of Escrow. If a supplemental tax bill covers a period commencing before and continuing after Close of Escrow, the Party named in the bill will pay the tax and the other Party shall reimburse the first Party its pro rata share of the portion of such supplemental tax bill that pertains to the Real Property

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within thirty (30) calendar days after receipt of a copy of the tax bill and evidence of the second Party’s payment of same. The provisions of this Section 9.3 shall survive Close of Escrow. If either Party fails to pay its pro rata share of taxes by the times herein provided, interest shall accrue on all unpaid amounts from when owing until paid at five percent (5%) over the Federal Discount Rate quoted by the Federal Reserve Bank of San Francisco on the 25th day of the month preceding the date interest commences to accrue.

9.4 Payment of Costs. Seller shall pay charges for drawing the Grant Deed, the charges for the ALTA standard Title Policy, and one-half (1/2) of the escrow fee. City shall pay charges, if any, for recording the Grant Deed, the additional charges for an ALTA extended Title Policy, including the premium and costs for endorsements, and one-half (1/2) of the escrow fee.

All other costs of Escrow not otherwise specifically allocated by this Agreement shall be apportioned between the Parties in a manner consistent with the custom and usage of Escrow Holder. The Parties inform Escrow Holder that each understands that this transaction is exempt from payment of documentary transfer taxes because the Buyer is a governmental entity.

9.5 Termination and Cancellation of Escrow; Remedies. Time is of the essence of this Agreement. If Close of Escrow fails to occur within the Closing Period, then Escrow shall terminate automatically without further action by Escrow Holder or any Party. Upon such termination, Escrow Holder is hereby instructed, without further notice or instructions from either Party to (i) disburse the Deposit and any interest earned on the Deposit, and all other funds then in Escrow, if any, to the Parties as mutually directed by the Parties (failing which Escrow Holder shall retain such funds until mutually directed by the Parties or until otherwise directed by a court); and (ii) return all documents deposited into Escrow, if any, to the Party that deposited the same with Escrow Holder.

Cancellation of Escrow, as provided herein, and return of such funds and documents shall be without prejudice to whatever legal rights City or Seller may have against each other arising from the Escrow or this Agreement.

9.6 Information Report. The “Reporting Person” within the meaning of Treasury Regulation Section 1.6045-4(e)(5) with respect to the transactions contemplated by this Agreement shall be Escrow Holder. It is agreed that Escrow Holder is an eligible person under Section 1.6045- 4(e)(5)(ii) of said Regulations. Escrow Holder hereby agrees to be responsible for complying with the reporting and other requirements of Internal Revenue Code Section 6045(e) and the income tax regulations promulgated thereunder. Pursuant to said regulations, the address for the transferor and transferee are as set forth for Seller and City below, and the identifying information regarding the real estate transferred is the legal description for the Property set forth herein. Escrow Holder agrees to file the form required by said regulations between the end of the calendar year in which the Close of Escrow occurs and February 28 of the following calendar year. City and Seller agree (i) to cooperate with Escrow Holder and with each other in completing any report and/or other information required to be delivered to the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e) regarding the real estate sales transaction contemplated by this Agreement, including without limitation, Internal Revenue Service Form 1099-S as such may be hereinafter modified or amended by the Internal Revenue Service, or as may be required pursuant to any regulation now or hereinafter promulgated by the Treasury Department with respect thereto; (ii) that City and Seller, their respective employees and attorneys, and Escrow Holder and its employees may disclose to the Internal Revenue Service, any information regarding this Agreement or the transaction contemplated herein as such Party reasonably deems to be required to be disclosed to the Internal Revenue Service by such Party pursuant to Internal Revenue Code Section 6045(e); (iii) that neither City nor Seller shall seek to hold any such Party liable for the disclosure to the Internal Revenue Service of any such information; and (iv) to

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retain this Agreement for at least four (4) years following the close of the calendar year in which the Close of Escrow occurs.

10. Representations and Warranties.

10.1 Seller Representations and Warranties. Seller hereby makes the following representations and warranties to City, each of which (i) is material and relied upon by City in making its determination to enter into this Agreement; and (ii) is true in all material respects as of the date hereof (except to the extent any such representation and warranty expressly relates to an earlier date); and (iii) is subject to disclosures by Seller and provided in writing to the City, contained in the Due Diligence Items transmitted to City pursuant to the documents outlined in Exhibit E, and matters of public record:
(a) Seller has received no written notice that any Governmental Authority or any employee or agent thereof considers the Property or the operation, use or ownership of the Property to violate in any material respect any ordinance, rule, law, regulation or order of any government or agency, body or subdivision thereof (including, without limitation, Environmental Laws), or that any investigation has been commenced or is contemplated respecting possible violations.
(i) As used above and otherwise in this Agreement, the term “Governmental Authority” means any federal, state or local government or other political subdivision thereof, including, without limitation, any agency or entity exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.
(b) As of the Effective Date, Seller has not received written notice of any pending or threatened litigation or lawsuits or claims, whether for personal injury, property damage, landlord-tenant disputes, property taxes, contractual disputes or otherwise, which do or may materially and adversely affect the Real Property or the operation or value thereof, and Seller has not received written notice of any actions or proceedings pending or threatened against Seller before any court or administrative agency in any way connected with the Real Property that would materially and adversely affect the Real Property or the market value of the Real Property. Neither the entering into of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in a violation or breach by Seller of any judgment, order, writ, injunction or decree issued against or imposed upon it.
(c) Except as disclosed in the Preliminary Title Report described in Section

7.1 above (and the disclosure by Seller to Buyer of the existence of the unrecorded Lease described below), Seller has not entered into any lease(s), rental agreement(s), license(s), or other right or rights to occupy the Real Property that will remain in effect after Closing, excepting the Seller’s ownership rights prior to the Closing Date and recordation of the Grant Deed. While as of the Effective Date, a “Lease” exists between Seller, as landlord, and SPEC Services, Inc., as Tenant, otherwise Seller itself does not presently, and shall not through the Closing Date, operate any business on or at the Real Property, other than for the storage of equipment and materials and except for the Lease with Tenant, which Lease Seller shall cause to be terminated on or before the Closing Date and for which Seller shall cause Tenant and itself to execute the Release, Waiver and Estoppel Agreement, substantially in the form of Exhibit F.

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(d) Seller has the power and authority (i) to execute, deliver and perform this Agreement, (ii) to sell its fee interests in the Real Property to City, (iii) to perform Seller’s obligations under this Agreement, and (iv) to sign any and all documents executed and delivered by Seller pursuant hereto.
(e) Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended.
(f) Neither Seller nor any beneficial owner of Seller: (a) is listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) pursuant to Executive Order No. 133224, 66 Fed. Reg. 49079 (September 25, 2001) (“Order”) and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable orders (such lists are collectively referred to as the “Lists”); (b) is a person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or (c) is owned or controlled by, or acts for or on behalf of, any person or entity on the Lists or any other person or entity who has been determined by competent authority to be subject to the prohibitions contained in the Order.
(g) This Agreement is the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. (h) Seller has provided to Buyer a copy of that certain Phase I Environmental Assessment report, prepared by AEI Consultants, AEI Project No. 457033, dated as of March 9, 2022 (“Phase I Report”). Except as disclosed in the Phase I Report, to Seller’s knowledge, as of the Effective Date there is not present in, on, or under the Real Property and Seller has not used, stored or disposed of, on, under, or about the Real Property or transported to or from the Real Property any “Hazardous Materials” at the Real Property in violation of Environmental Laws during the period of Seller’s ownership of the Real Property. “Hazardous Materials” shall mean and include any hazardous substance, pollutant, contaminant, material, waste, by-product or constituent which is regulated by any local government authority, the State of California or the United States Government, including, without limitation, any substance, material, waste, or by-product regulated by any governmental laws. To Seller’s knowledge, except as disclosed in the Phase I Report, Seller, as of the Effective Date, is not required by any applicable laws and/or governmental regulations to take any action to remediate any environmental condition affecting the Real Property. (i) As used above and otherwise in this Agreement, the term “Environmental Laws” means all applicable laws regulating or relating to any Hazardous Materials including, without limitation, (a) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601, et seq. (“CERCLA”), (b) the Re-source Conservation and Recovery Act, 42 U.S.C. §6901, et seq. (“RCRA”), (c) the Federal Water Pollution Control Act, 33 U.S.C. §2601, et seq., (d) the Toxic Substances Control Act, 15 U.S.C. §2601, et seq., (e) the Clean Water Act, 33 U.S.C. §1251, et seq., (f) the Clean Air Act, 42 U.S.C. §7401, et seq., (g) the Hazardous Materials Transportation Act, 49 U.S.C. §5101, et seq., (h) the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq., (i) the Oil Pollution Act of 1990, 33 U.S.C. §2701, et seq., (j) the Emergency Planning and Community Right-To-Know Act of 1986, 42 U.S.C. §11001, et seq., (k) the Occupational Safety and Health Act, 29 U.S.C. §651, et seq. (to the extent it regulates exposure to Hazardous Substances), and similar state and local applicable laws, as currently in existence, and all regulations, rules and guidance issued pursuant thereto as currently in existence.

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For purposes of this Section 10.1 and the Seller’s obligation to notify the City of the representations and warranties as outlined in this Agreement, a breach of such shall be considered material when the associated cost, loss, expense, liability, and/or obligation is equivalent to or in an amount of at least twenty-five thousand dollars ($25,000) or more.

As used in this Agreement, “to Seller’s knowledge” (or words of similar import) shall mean the actual current knowledge, without the imputation of any constructive knowledge and without any duty of any inquiry or investigation, of Kim Henry, in his role as property manager and Seller’s representative. In no event shall Kim Henry, as an individual, have any personal liability arising out of any representations, warranties or disclosures made in this Agreement. In this regard, in the event of default by Seller, Buyer may pursue remedies against the Seller trust and assets thereof, but not against Kim Henry as an individual.

All representations and warranties made hereunder are in addition to any representations and warranties implied by law and in no event shall this Section 10.1 be construed to limit, diminish, or reduce any obligation of disclosure implied upon Seller by law. The representations and warranties of Seller set forth in Section 10.1 hereof shall survive Closing until June 30, 2024.

Seller shall have no liability to City for a breach of any representation or warranty (a) unless written notice containing a description of the specific nature of such breach shall have been given by City to Seller prior to June 30, 2024 and an action shall have been commenced by City against Seller within sixty (60) calendar days following June 30, 2024, or (b) if the breach in question results from or is based on a condition, state of facts or other matter that was Known by City prior to Closing. For purposes hereof, any condition, state of facts or other matter shall be “Known by City” if it was (A) actually known by City, (B) contained in any Due Diligence Items and reasonably discoverable by City, (C) disclosed as a result of City’s due diligence (including, without limitation, in any reports obtained by any representative, agent or consultant of City), (D) disclosed in writing by Seller or Seller’s agents, trustees, joint tenants, employees, and representatives, or (E) a matter of public record.

10.2 Disclaimer of Representations and Warranties. City acknowledges that as of Close of Escrow it will have had an adequate opportunity to inspect the Property and to investigate its physical characteristics and conditions. Upon the Close of Escrow, excepting Seller’s representations and warranties in Section 10.1 above that shall survive the Close of Escrow, City shall be deemed to have waived any and all objections to the physical characteristics and conditions of the Property that would be disclosed by a reasonable and diligent inspection, subject to City’s right to materially rely upon Seller’s express representations and warranties set forth in this Agreement and/or the other documents signed and delivered by Seller at Closing. City acknowledges that, except as specifically provided herein including without limitation Section 6.4, neither Seller nor any of its employees, agents, partners, joint tenants, trustees, or representatives has made any representations, warranties or agreements to or with City on behalf of Seller as to any matters concerning the Property, the present use thereof, or the suitability of City’s intended use of the Property. (a) AS IS, WHERE IS. EXCEPT AS MAY BE OTHERWISE
EXPRESSLY PROVIDED HEREIN INCLUDING WITHOUT LIMITATION SECTION 6.4, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN “AS IS, WHERE IS”

BASIS, WITH ALL FAULTS, AND SELLER HAS NOT MADE, DOES NOT MAKE AND

SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR

GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR

IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE PROPERTY OR ANY OTHER MATTER WHATSOEVER.

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(b) CITY’S RELEASE OF SELLER. CITY REPRESENTS TO SELLER

AND ACKNOWLEDGES THAT CITY HAS HAD THE OPPORTUNITY TO, OR IS BEING

PROVIDED BY THIS AGREEMENT THE OPPORTUNITY TO, CONDUCT SUCH

INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE

PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS CITY DEEMS

NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE

PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE

TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR

DISCHARGED FROM THE REAL PROPERTY, AND WILL RELY UPON ITS

INVESTIGATIONS OF THE PROPERTY AND NOT UPON ANY INFORMATION PROVIDED

BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT

THERETO, EXCEPT AS TO ANY COVENANTS, REPRESENTATIONS OR WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, CITY SHALL ASSUME

THE RISK THAT ADVERSE MATTERS AFFECTING THE PROPERTY, INCLUDING BUT NOT

LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY CITY’S

INVESTIGATIONS, AND CITY, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S OFFICERS, DIRECTORS,

SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL

CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT),

LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR

UNKNOWN, WHICH CITY MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS)

AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT

CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY

APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS,

CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY, EXCEPT AS EXPRESSLY SET FORTH OTHERWISE IN THIS AGREEMENT.

IN CONNECTION THEREWITH, CITY EXPRESSLY WAIVES ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES THAT:
“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.”
____________________

INITIALS OF CITY

10.3 Changed Circumstances. If Seller becomes aware of any fact or circumstance which would materially and adversely change or render incorrect, in whole or in part, any representation or warranty made by Seller under this Agreement (a “Material Exception Matter”), whether as of the date given or any time thereafter until the Close of Escrow and whether or not such representation or warranty was based upon Seller’s knowledge and/or belief as of a certain date, Seller will give written notice of such changed fact or circumstance to City within two (2) business days of becoming aware of such, but such notice shall not release Seller of its liabilities or obligations with

19 4865-7714-1595v7/024538-0013
respect thereto, if any. Upon City becoming aware of any Material Exception Matter (other than if City became aware from a Seller notice pursuant to the immediately preceding sentence), City shall notify Seller of same within five (5) business days after obtaining such knowledge (but, in any event, prior to the Closing). If any Material Exception Matter is capable of being cured, Seller shall have the right to cure such Material Exception Matter and be entitled to extend the Closing Date for up to ten (10) business days for purposes of such cure. Should Seller not cure such Material Exception Matter to the City’s reasonable satisfaction, City shall, as its sole and exclusive remedy, have the right to terminate this Agreement by written notice to Seller given within five (5) days of the expiration of Seller’s cure period, and the Deposit shall be returned to City within five (5) days of such termination and neither City nor Seller shall have any further obligations to the other, except for those obligations, which as outlined in this Agreement, expressly survive termination. Notwithstanding anything to the contrary contained herein, Seller shall not be in breach or default hereunder due to a Material Exception Matter, as long as the representation or warranty was correct when made.

10.4 City Representations and Warranties. City, as Buyer, hereby makes the following representations and warranties to Seller, each of which (i) is material and relied upon by Seller in making its determination to enter into this Agreement; and (ii) is true in all material respects as of the date hereof (except to the extent any such representation and warranty expressly relates to an earlier date):
(a) The California Constitution and Government Code authorize a general law city, including the City, to acquire real property and execute, deliver and perform this Agreement. (b) City has the power and authority (i) to execute, deliver and perform this Agreement, (ii) to acquire the fee interests in the Real Property from Seller, (iii) to perform City’s obligations under this Agreement, and (iv) to sign any and all documents executed and delivered by City pursuant hereto.
(c) Neither the entering into of this Agreement nor the consummation of the transactions contemplated hereby will constitute or result in a violation or breach by City of any judgment, order, writ, injunction or decree issued against or imposed upon it. (d) If Seller did not agree to enter into this Agreement, City may continue acquisition proceedings as described and defined as a Condemnation Action in Recital E above. (e) This Agreement is the legal, valid and binding obligation of City, enforceable against City in accordance with its terms.

11. Indemnification.

11.1 Reciprocal Indemnities. Subject to the limitations contained elsewhere in this Agreement, each Party hereby agrees to indemnify the other party and defend and hold it harmless from and against any and all claims, liabilities, costs, expenses, penalties, damages and losses, including, without limitation, attorneys' fees, resulting from any misrepresentation or breach of warranty or breach of covenant made by such party in this Agreement or in any document, certificate, or exhibit given or delivered to the other pursuant to or in connection with this Agreement.

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(a) The indemnification provisions of this Section 11.1 shall survive beyond the Closing, or, if the Closing does not occur pursuant to this Agreement, beyond any termination of this Agreement.

12. Release, Waiver, and Estoppel Agreement. Seller acknowledges that this transaction is subject to various laws, in particular as to this Section 12, the Relocation Law as defined and described in that certain Release, Waiver and Estoppel Agreement, Exhibit F. Seller agrees to execute, and Seller agrees to cause Tenant to enter into and execute, the Release, Waiver and Estoppel Agreement as a condition precedent to and as of the Closing.

13. Damage, Destruction and Condemnation.

13.1 Risk of Loss. If (a) the physical condition of the Land is materially and adversely altered prior to Closing by any cause not resulting from the actions of Buyer or any of the City Representatives (such as due to the spilling of Hazardous Materials onto the Property during the term of this Agreement) or (b) condemnation proceedings are commenced against the Real Property by any governmental agency other than Buyer, then Seller shall notify Buyer in writing of such occurrence of (a) or (b), and Buyer shall have the right, at its election made within the ten (10) days after written notice by Seller to Buyer of such occurrence of (a) or (b), either to terminate this Agreement or to not terminate this Agreement and purchase the Property. A failure of Buyer to elect to terminate this Agreement due to conditions (a) or (b) of the preceding sentence by written notice to Seller responding to Seller’s notice within such ten (10) day period shall be deemed an election to not terminate this Agreement and to proceed with the Closing. The Closing Date shall automatically be extended to allow such period to run. Since Buyer intends to demolish the Building and other improvements on the Land, Buyer shall not have a termination right in the event of damage or destruction of the Building or any of the improvements prior to Closing (and any such damage or destruction shall not be considered a material and adverse change to the physical condition of the Land), provided such exclusion shall not apply or modify Seller’s obligations under Section 6.4. In the event that a material and adverse change occurs as provided above that gives Buyer the right to terminate this Agreement, and Buyer timely elects to terminate this Agreement as provided above, then this Agreement shall be terminated and Buyer shall be entitled to the return of all funds and documents (including the entirety of the Deposit) that Buyer deposited into the Escrow hereunder. In the event that a material and adverse event occurs as provided above that gives Buyer the right to terminate this Agreement, after required notice by Seller to Buyer, and Buyer does not timely elect to terminate this Agreement as provided above, then the Closing shall occur as contemplated by this Agreement with no adjustment to the Purchase Price.
(a) Seller shall maintain property insurance similar to the property insurance that Seller has in effect as of the Effective Date and shall comply with Section 6.4.

13.2 Waiver of Eminent Domain Law and Relocation Law. Based on advice of counsel and based on Seller’s independent decision and judgment, except as expressly set forth in this Agreement, including without limitation, any covenants and obligations of Buyer and rights and interests of Seller that survive the Close of Escrow and as set forth in any Exhibit attached hereto, further including, without limitation, the Grant Deed (Exhibit C) (together, “Post-Closing Rights and Obligations”), which Post-Closing Rights and Obligations shall remain in full force and effect, and provided that the Closing occurs, then, upon the Closing, Seller shall be deemed to have expressly, knowingly, voluntarily, and intentionally waived, released and forever relinquished Seller’s rights under the Relocation Law and under state and federal eminent domain laws with respect to the Property

21 4865-7714-1595v7/024538-0013
(provided that such waiver, release and relinquishment shall expressly not prevent Seller from seeking to effect a real property like kind exchange as contemplated by Section 35 below.) In this regard and in furtherance of the release and waiver by Seller in this Section 13.2 and pursuant to the Release, Waiver and Estoppel Agreement, Seller expressly acknowledges that Seller has been advised by counsel of Seller’s choosing and Seller fully understands all of Seller’s rights regarding notice, resale, leaseback and other rights provided under the Relocation Law, the Code of Civil Procedure sections 1245.245, 1263.510 and 1263.615 including, but not limited to the following:
(a) The limitations on the use of the Property set forth in Code of Civil Procedure section 1245.245(a);
(b) The requirement that City put the Property to public use within ten (10) years or either: (i) resell the Property to the Seller; or (ii) adopt a resolution of necessity reauthorizing public use of the Property pursuant to the requirements of Code of Civil Procedure section 1245.245(b) and (c);
(c) Seller’s right to judicial review of City’s acquisition of the Property set forth in Code of Civil Procedure section 1245.245(d);
(d) Seller’s right of first refusal under the circumstances and in accordance with the procedures set forth in Code of Civil Procedure section 1245.245(f); (e) The requirement that City sell the Property as surplus under the circumstances and in accordance with the procedures set forth in Code of Civil Procedure section 1245.245(g);
(f) The requirement that City pay any financial gain to the Seller under the circumstances and in accordance with the procedures set forth in Code of Civil Procedure section 1245.245(h);
(g) The requirement that City give written notice to Seller of the rights set forth in Code of Civil Procedure section 1245.245;
(h) The requirement that City offer the Seller a one-year leaseback agreement for the Property set forth in Code of Civil Procedure section 1263.615; and/or (i) The rights, benefits and assistance set forth in the Relocation Law (as further described and defined in the Release, Waiver and Estoppel Agreement.)

13.3 Full and Just Compensation. Provided that the Closing occurs, Seller expressly acknowledges and agrees that the Purchase Price set forth in this Agreement represents full and complete compensation for any and all interests in the Property and neither Seller nor any other person or entity claiming any interest by or through Seller shall have any other or further right to compensation for any interest in the Property, including, but not limited to, severance damages, improvements, improvements pertaining to the realty, personal property, relocation benefits, reestablishment fees and/or costs, lost rents, pre-condemnation damages, loss of business goodwill, lost rents, crops, relocation benefits or assistance, attorney’s fees, interest, costs or any other claim to compensation of any kind or nature whatsoever.

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14. Default.

14.1 Default by City. IN THE EVENT THE CLOSING FAILS TO OCCUR DUE TO CITY’S DEFAULT HEREUNDER, CITY AND SELLER AGREE THAT IT WOULD BE

IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES THAT SELLER MAY SUFFER. THEREFORE CITY AND SELLER DO HEREBY AGREE THAT A

REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD

SUFFER IN THE EVENT THE CLOSING FAILS TO OCCUR DUE TO A DEFAULT BY CITY HEREUNDER SHALL BE AN AMOUNT EQUAL TO THE DEPOSIT; AND, AS SELLER’S SOLE

AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), SAID AMOUNT SHALL

BE DISBURSED TO SELLER AS THE FULL, AGREED AND LIQUIDATED DAMAGES FOR

SUCH A BREACH OF THIS AGREEMENT BY CITY, ALL OTHER CLAIMS TO DAMAGES OR

OTHER REMEDIES IN RESPECT OF A FAILURE OF THE CLOSING TO OCCUR DUE TO CITY’S BREACH OF THIS AGREEMENT BEING HEREIN EXPRESSLY WAIVED BY SELLER.

SUCH PAYMENT OF THE DEPOSIT IS NOT INTENDED AS A PENALTY, BUT AS FULL LIQUIDATED DAMAGES. IN SUCH AN EVENT, CITY SHALL PAY ALL OF ESCROW HOLDER’S AND TITLE COMPANY’S CANCELLATION CHARGES, IF ANY. IN ADDITION,

IN SUCH EVENT, SELLER SHALL ALSO BE ENTITLED TO RECEIVE AND RETAIN THE

EXTENSION DEPOSIT AS CONSIDERATION FOR THE EXTENSION OF THE DUE

DILIGENCE PERIOD AND THEREBY THE CLOSING PERIOD AS SET FORTH IN SECTION

6.2(a) ABOVE (AND NOT AS LIQUIDATED DAMAGES). NOTWITHSTANDING THE

FOREGOING, THIS LIQUIDATED DAMAGES PROVISION APPLIES ONLY TO A FAILURE OF CLOSING TO OCCUR DUE CITY’S DEFAULT, AND DOES NOT LIMIT, AMONG OTHER MATTERS, SELLER’S ABILITY TO SEEK DAMAGES AGAINST CITY DUE TO CITY’S

OBLIGATION TO INDEMNIFY SELLER IN ACCORDANCE WITH THIS AGREEMENT, OR TO

THE EXTENT OTHERWISE RESULTING FROM A MATTER OTHER THAN A FAILURE OF CLOSING TO OCCUR DUE TO CITY’S DEFAULT. BY SEPARATELY INITIALLING THIS

SECTION BELOW, CITY AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND

UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT

EACH PARTY HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
_________________ __________________
City’s Initials Seller’s Initials

15. Possession. Possession of the Property shall be delivered to City as of Close of Escrow.

In the event any of Seller’s or Tenant’s personal property remains on the Property following the Close of Escrow, it shall automatically become the personal property of City; the foregoing does not limit or modify Seller’s performance obligations under Section 6.4.

16. Assignment. City shall not have the right to assign this Agreement or any interest or right hereunder or under the Escrow or to nominate another party to take title to the Property without the prior written consent of Seller, which Seller may withhold in Seller’s sole discretion. In no event shall City be released of liability in the event of an assignment or nomination.

17. Cooperation. City and Seller agree to cooperate with one another, at no cost or expense to the cooperating Party, in satisfying the conditions precedent to Close of Escrow. City shall be responsible for proceeding with diligence and in good faith to satisfy the conditions to City’s

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performance set forth in Section 8.1 and Seller shall be responsible for proceeding with diligence and in good faith to satisfy the conditions to Seller’s performance set forth in Section 8.2.

18. Qualification; Authority. Each Party represents and warrants that it is duly formed, is authorized to do business in the state in which the Property is located and that it has been duly authorized to enter into and perform this Agreement.

19. Attorneys’ Fees. If any legal action is brought to enforce, construe, interpret or invalidate the terms of this Agreement, the prevailing party shall be entitled to all costs and expenses incurred in any such action including court costs and reasonable attorneys’ fees, in addition to any other relief to which they may be entitled.

20. Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both Parties hereto. This Agreement shall be construed in accordance with the laws of the State of California in effect on the Effective Date of this Agreement.

Titles and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates.

21. No Waiver. No delay or omission by either Party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other Party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either Party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other Party shall not be construed as a waiver of any contemporaneous or succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof.

22. Modifications. Any alteration, change or modification of or to this Agreement, or any time limits contained herein, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each Party hereto.

23. Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any Party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

24. Covenants to Survive Escrow. The covenants and agreements which are expressly stated to survive the Close of Escrow shall, subject to the limitations on assignment contained in Section 16 above, be binding upon and inure to the benefit of the Parties hereto and their representatives, heirs, successors and assigns. Without limitation of the foregoing, all indemnity obligations set forth herein shall survive the Close of Escrow or termination of this Agreement with respect to the claims that have accrued thereunder prior to such Close of Escrow or termination, as applicable.

25. Time is of the Essence. Time is hereby expressly made of the essence of this Agreement.

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26. Execution in Counterpart. This Agreement may be executed in several counterparts, and all so executed shall constitute one (1) agreement binding on all Parties hereto, notwithstanding that all Parties are not signatories to the original or the same counterpart.

27. Notices. Any notice which either Party may desire to give to the other Party or to the Escrow Holder must be in writing and shall be effective (a) upon delivery if sent via USPS overnight mail with tracking, or by FedEx or other overnight delivery service with tracking; (b) when personally delivered, if sent by messenger service with signature of such personal delivery; (c) when delivered if sent via USPS first class mail by registered or certified mail, return receipt requested, with postage fully prepaid; or (d) three (3) business days after deposit in the USPS mail, registered, certified, postage fully prepaid, and in each case addressed to the respective Parties as set forth below or to such other address and to such other persons as the Parties may hereafter designate by written notice to the other Party hereto and Escrow Holder:

To Seller: The BSK Family Trust
10540 Talbert Ave., Suite 100 East
Fountain Valley, California 92708
Attention: Kim Henry
With Copy to: The Wolfson Law Firm
11430 Strand Drive, #111
Rockville, MD 20852
Attention: Ken Wolfson
To City: City of Fountain Valley
Attn: City Clerk
10200 Slater Avenue
Fountain Valley, CA 92653
With Copies to: City of Fountain Valley
Attn: City Legal Counsel
10200 Slater Avenue
Fountain Valley, CA 92653
Harper & Burns
453 Glassell Street
Orange, CA 92866
Attention: Colin R. Burns, Esq.

City of Fountain Valley
Attn: Community Development Director
10200 Slater Avenue
Fountain Valley, CA 92653

28. CBRE as Seller’s Broker. Seller represents that CBRE (“Seller’s Broker”) is its real estate broker and has been involved with this transaction and that each and any broker commission payable to Seller’s Broker shall be paid by Seller; subject to the below provisions of this Section 28, City shall have no obligation for payment to Seller’s Broker or any other broker in this transaction.

Subject to the below provisions of this Section, Seller agrees to and hereby indemnifies City against

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any claims, suits, damages, and costs incurred or arising or resulting from the claims of any other broker for any commission, fee, or other remuneration that such person claims is owed in respect with this transaction pursuant to a written agreement made with said claimant. City represents and warrants that City has not engaged or dealt with any broker (other than Seller’s Broker) or other person (such as a finder) in connection with this Agreement, and City agrees to and hereby indemnifies Seller against any claims, suits, damages, and costs incurred or arising or resulting from a breach of this sentence or any broker, agent, party or representative purporting to have represented City in this transaction .

The provisions of this Section shall survive the Closing.

29. Limitation on Liability. Notwithstanding any provision to the contrary in this Agreement, Seller’s liability to City for Seller’s default under this Agreement, including any representation, warranty, covenant or agreement set forth herein, shall be limited to the total aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000) (“Cap”), and in no event shall Seller’s liability exceed such amount. The Cap shall expressly not apply to any provision of this Agreement requiring the return of the Deposit to Buyer (and the return of the Deposit shall not be counted toward the computation of the Cap).
_________________ __________________
City’s Initials Seller’s Initials

30. CEQA. This Section 30 relates to the provisions of the California Environmental Quality Act, California Public Resources Code Section 21000, et seq., and the implementing regulations set forth at Title 14 California Code of Regulations Section 15000, I. (together, “CEQA”).

In connection with the City Council’s consideration and action on this Agreement, by resolution, the City Council made finding that the Seller’s sale, and City acquisition, meets a CEQA exemption, Cal. Code Regs. Tit. 14, §15061(b)(3), in that the acquisition by and vesting title of the Property with the City without any other or further steps is an “activity covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.” After the Effective Date, the City shall cause the posting and filing of a Notice of Exemption pursuant to CEQA.

If the acquisition proceeds and title is vested in the City, then prior to taking other step or steps in connection with reuse of the Property for a public project, the City will complete an initial study and take all applicable steps related to compliance with CEQA and other applicable laws. In this regard, the City reserves all rights to exercise in good faith its discretion as to all matters which it is, by law, entitled or required to exercise its discretion, including, but not limited to, the consideration of CEQA documents, the consideration of any and all plans, permits, licenses, or regulatory approvals, or any other acts or activities requiring the subsequent independent exercise of discretion by the City or any agency or department thereof. The City may in good faith, in its sole and absolute discretion, certify or not certify a CEQA document and approve, approve with modifications, or not approve, or consider other alternatives, including those presented in the CEQA documents. For purposes of clarification, Seller shall have no obligations pursuant to this Section.

31. Entire Agreement, Waiver and Modification. This Agreement is the entire Agreement between the Parties with respect to the subject matter of this Agreement. It supersedes all prior agreements and understanding, whether oral or written, between the Parties with respect to the matters contained in this Agreement. Any waiver, modification, consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or on behalf of the Party to be bound thereby.

26 4865-7714-1595v7/024538-0013

32. City Authorization. The City Manager of the City of Fountain Valley (and her authorized designee(s)) is/are hereby authorized, on behalf of the City, to sign all documents necessary and appropriate to carry out and implement this Agreement and to administer the City’s obligations, responsibilities and duties to be performed under this Agreement and as may be required for Closing.

33. Confidentiality. City agrees that except (a) as otherwise provided or required by valid federal, state or local laws, including without limitation the California Public Records Act, Government Code Section 6250, et seq., and the Brown Act, Government Code Section 54950, et seq., and (b) to the extent reasonably necessary to deliver such documents or information to City and/or City Representatives in connection with City’s evaluation of this transaction, City and City Representatives shall keep (x) the contents of any documents, data, and other materials and information related to the transaction contemplated hereby, including, without limitation, the Due Diligence Items, (y) any information obtained, analyzed, or synthesized by City Representatives arising from any inspections, observations, examinations, surveys, and tests of the Property conducted by or at the request of City, and (z) all information regarding City’s acquisition or ownership of the Property strictly confidential.

City acknowledges that significant portions of the Due Diligence Items are proprietary in nature and that Seller would suffer significant and irreparable harm in the event of the misuse of the Due Diligence Items.

34. LIMITATION ON DAMAGES; NO OFFICER LIABILITY.

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS

AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECULATIVE, CONSEQUENTIAL OR PUNITIVE DAMAGES. IN NO EVENT SHALL A PARTNER,

SHAREHOLDER, OWNER, OFFICER, DIRECTOR, EMPLOYEE, TRUSTEE, TRUSTOR,

BENEFICIARY, MEMBER OR MANAGER OF SELLER OR OF CITY OR ANY PARTNER,

SHAREHOLDER, OWNER, OFFICER, DIRECTOR, EMPLOYEE, TRUSTEE, TRUSTOR,

BENEFICIARY, MEMBER OR MANAGER OF ANY AFFILIATE OR CONTROLLING ENTITY

OR PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM OR ACTION OR OTHER

LIABILITY ARISING OUT OF THIS AGREEMENT, WHETHER BASED ON COMMON LAW,

STATUTE, EQUITY OR OTHERWISE, AND CITY AND SELLER EACH HEREBY AGREES TO LOOK SOLELY TO THE CITY OR BUYER AS OTHERWISE PROVIDED HEREIN. FOR

PURPOSES OF CLARIFICATION, THE FOREGOING SHALL NOT BE INTERPRETED TO EXEMPT THE ASSETS OF THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM

RAEBURN HENRY, TRUSTEE (AS OPPOSED TO THE ASSETS OF THE TRUSTEE OF SUCH TRUST).

35. Like Kind Exchange. Seller has informed City, as Buyer, that Seller desires and intends to elect and effect a real property exchange completed either as a concurrent exchange or a delayed exchange, in either case pursuant to Section 1031 or Section 1033 of the Internal Revenue Code of 1986, as amended from time to time, and any regulations, rulings and guidance issued by the Internal Revenue Service (collectively, the “IRC”). Seller’s intention and election to effect such exchange does not, and shall not in the future, impose upon the City or any City Representatives any legal, financial, tax, or other or additional liability or obligation. This Agreement is not subject to or contingent upon the Seller’s ability to cause such exchange, whether an acquisition or sale, of suitable exchange property or to effectuate an exchange.

In the event of Seller’s exchange, whether concurrent or delayed, except as provided for in Section 6.2(b), the Closing Date shall not be extended without the prior written consent of Buyer in its sole and complete discretion. In furtherance thereof, if any exchange contemplated by Seller should

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fail to occur, for whatever reason, the sale and purchase of the Property shall nonetheless be consummated as provided herein. In no event shall the Parties’ rights or obligations hereunder be altered by such exchange. Seller represents and warrants Seller is relying on legal and tax advice from Seller’s independently retained tax consultant and/or counsel in structuring or completing this transaction as a tax deferred exchange under the IRC, and is not relying on any representations or warranties of the Buyer; in this regard, Seller acknowledges and agrees that Buyer does not and will not advise Seller in any manner whatsoever related to such exchange, including the tax consequences of this transaction, excepting only the provisions set forth in Recitals C to G, inclusive, and Sections

13.2 and 13.3 above. Except for Buyer’s representations, warranties and covenants contained in this Agreement, Seller hereby releases Buyer from all liability relating to Seller’s attempt to qualify this transaction as an exchange as contemplated above. IN CONNECTION THEREWITH, SELLER EXPRESSLY WAIVES ALL RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES THAT:
“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.”
____________________

INITIALS OF SELLER
ATTACHMENTS:

Exhibit A Property Legal Description
Exhibit B Property Depiction
Exhibit C Form of Grant Deed
Exhibit D Form of Bill of Sale
Exhibit E Due Diligence Items
Exhibit F Release, Waiver and Estoppel Agreement
[SIGNATURES BEGIN ON NEXT PAGE]

S-1
4865-7714-1595v7/024538-0013
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement for Purchase and Sale of Real Property and Escrow Instructions (17101 Bushard Street) as of the date set forth above.

SELLER:

THE BSK FAMILY TRUST, DATED
DECEMBER 18, 2020
___________________________________
Kim Raeburn Henry, Trustee
APPROVED AS TO FORM:

By:

Legal Counsel to Seller

S-2
4865-7714-1595v7/024538-0013
[Signatures continued from previous page]
CITY:

CITY OF FOUNTAIN VALLEY,
a California municipal corporation
By:

Maggie Le, City Manager
or Authorized Designee
ATTEST:

By:

Rick Miller, City Clerk
or Authorized Designee
APPROVED AS TO FORM:

HARPER & BURNS
By:

Colin R. Burns, City Legal Counsel
APPROVED AS TO FORM:

STRADLING YOCCA CARLSON & RAUTH
Celeste Stahl Brady, City Special Counsel

Joinder by Escrow Holder

4865-7714-1595v7/024538-0013

JOINDER BY ESCROW HOLDER
Escrow Holder hereby acknowledges that it has received this Agreement executed by the Seller and City and accepts the obligations of and instructions for the Escrow Holder set forth herein. Escrow Holder agrees to disburse and/or handle the Deposit, the Purchase Price and all closing documents in accordance with this Agreement.

Dated: April __ 2023 First American Title Insurance Company By:

Name:

Title:

Exhibit A
Legal Description of Property

4865-7714-1595v7/024538-0013

EXHIBIT A

PROPERTY LEGAL DESCRIPTION
The Land referred to herein below is situated in the City of Fountain Valley, County of Orange, State of California, and is described as follows:

PARCEL 1 OF PARCEL MAP RECORDED IN BOOK 109, PAGE 13 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM ALL MINERALS, ORES, PRECIOUS AND USEFUL MINERALS,

SUBSTANCES AND HYDROCARBONS OF EVERY KIND AND CHARACTER, INCLUDING

PETROLEUM, OIL, GAS, ASPHALTUM AND TAR IN AND UNDER SAID LAND BUT

WITHOUT THE RIGHT TO USE THE SURFACE OF SAID LAND IN CONNECTION WITH THE

DRILLING THEREOF, PROVIDED, HOWEVER, THE SAME SHALL NOT BE CONSTRUED TO

PROHIBIT SLANT DRILLING OPERATIONS OR SOME OTHER OPERATION WHICH IN NO

WAY USES OR ANY WAY EFFECT THE SURFACE RIGHTS OF SAID LAND AND WHICH DO NOT ENTER SAID LAND AT A POINT LESS THAN 500 FEET TO SAID SURFACE.

APN 167-301-04

Exhibit B
Property Depiction

4865-7714-1595v7/024538-0013

EXHIBIT B

PROPERTY DEPICTION

Exhibit C
Grant Deed

4865-7714-1595v7/024538-0013

EXHIBIT C

FORM OF GRANT DEED
RECORDING REQUESTED BY:

CITY OF FOUNTAIN VALLEY
AND WHEN RECORDED MAIL TO:

Attn: City Clerk
City of Fountain Valley
10200 Slater Avenue
Fountain Valley, CA 92653
Escrow and Title Order No. NCS-1170693-SA1
Exempt from recording fee per Government Code §§ 6103 and 27383 (Space Above This Line For Recorder’s Use Only)
Parcel No: 167-301-04

GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(s):

City of Fountain Valley Documentary Transfer Tax is $0.00 City Transfer Tax is $0.00
computed on full value of interest or property
conveyed, or
full value less value of liens or encumbrances
remaining at the time of sale
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY TRUSTEE (“Grantor”), hereby GRANTS in fee simple interest to the CITY OF FOUNTAIN VALLEY, a California municipal corporation (“Grantee”), all of that certain real property located at 17101 Bushard Street, Fountain Valley, CA 92708, County of Orange, State of California (“Land”) as more particularly described in EXHIBIT A, attached hereto and incorporated herein by reference and made a part of this Grant Deed, together with all of Grantor’s right, title and interest in and to all improvements located on or under the Land (collectively the “Property”).

This conveyance is made and accepted subject to all real property taxes and assessments that are not yet delinquent, rights of tenants, as tenants only, under unrecorded leases, all matters of record, and all matters that would be reflected on an accurate survey or shown by a physical inspection of the Property, as of the date hereof.
[END OF DOCUMENT. SIGNATURES ON NEXT PAGE.]

Exhibit C
Grant Deed

4865-7714-1595v7/024538-0013
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of __________, 2023.

GRANTOR:

THE BSK FAMILY TRUST, DATED
DECEMBER 18, 2020
___________________________________
Kim Raeburn Henry, Trustee

4865-7714-1595v7/024538-0013

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 )
) ss.

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

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC

Exhibit A to Grant Deed
Legal Description

4865-7714-1595v7/024538-0013

EXHIBIT A

LEGAL DESCRIPTION
The Land referred to herein below is situated in the City of Fountain Valley, County of Orange, State of California, and is described as follows:

PARCEL 1 OF PARCEL MAP RECORDED IN BOOK 109, PAGE 13 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM ALL MINERALS, ORES, PRECIOUS AND USEFUL MINERALS,

SUBSTANCES AND HYDROCARBONS OF EVERY KIND AND CHARACTER, INCLUDING

PETROLEUM, OIL, GAS, ASPHALTUM AND TAR IN AND UNDER SAID LAND BUT

WITHOUT THE RIGHT TO USE THE SURFACE OF SAID LAND IN CONNECTION WITH THE

DRILLING THEREOF, PROVIDED, HOWEVER, THE SAME SHALL NOT BE CONSTRUED TO

PROHIBIT SLANT DRILLING OPERATIONS OR SOME OTHER OPERATION WHICH IN NO

WAY USES OR ANY WAY EFFECT THE SURFACE RIGHTS OF SAID LAND AND WHICH DO NOT ENTER SAID LAND AT A POINT LESS THAN 500 FEET TO SAID SURFACE.

APN 167-301-04

Certificate of Acceptance of Grant Deed

4865-7714-1595v7/024538-0013

CERTIFICATE OF ACCEPTANCE
This CERTIFICATE OF ACCEPTANCE is to certify that the interest in real property set forth in that certain Grant Deed by and between the City of Fountain Valley, a California municipal corporation , as Grantee, and THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY, TRUSTEE, as Grantor, for property located at 17101 Bushard Street, Fountain Valley, CA 92708, APN: 167-301-04, located in the City of Fountain Valley is hereby accepted by the undersigned officer on behalf of the City of Fountain Valley pursuant to authority conferred by action of the City Council on April 18, 2023. The City of Fountain Valley consents to the recordation of said document in the Office of the Recorder of Orange County, State of California.

Dated : __________________ CITY OF FOUNTAIN VALLEY,
a California municipal corporation
By:

Maggie Le, City Manager
or Authorized Designee
ATTEST:

CITY CLERK
Rick Miller or Authorized Designee

Exhibit D
Form of Bill of Sale

4865-7714-1595v7/024538-0013

EXHIBIT D

FORM OF BILL OF SALE

BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY, TRUSTEE (“Seller”), does hereby GRANT, SELL, CONVEY, TRANSFER AND DELIVER to CITY OF FOUNTAIN VALLEY, a California municipal corporation (“Buyer”), without any warranty of any kind, all of Seller’s rights, title and interest in and to the personal property (“Personal Property”) owned by Seller and located, as of the date hereof, on the real property located at 17101 Bushard Street, Fountain Valley, CA 92708, County of Orange, State of California.

From and after the date of this Bill of Sale, it is intended by the parties that Buyer and its successors and assigns shall have the right to use, have, hold and own the Personal Property forever, This Bill of Sale may be executed in counterparts, each of which shall be deemed an original, and all of which shall taken together be deemed one document. Seller and Buyer agree that the delivery of an executed copy of this Bill of Sale by electronic mail shall be legal and binding and shall have the same full force and effect as if an original executed copy of this Bill of Sale had been delivered.

Seller does hereby covenant to Buyer that such Personal Property is free of liens.

Buyer hereby acknowledges, covenants, represents and warrants that Seller has made absolutely no representations or warranties (express, implied, or statutory) concerning the Personal Property including, without limitation, any warranty of merchantability or condition, or warranty of fitness for a particular purpose. The conveyance contained herein is made “as is, where is”, with all faults, without any representation or warranty whatsoever on behalf of Seller.

This Bill of Sale shall be governed by, interpreted under, and construed and enforceable in accordance with, the laws of the State of California.

The provisions of Sections 10.2 and 29 and 34 of that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions (17101 Bushard Street), made and entered into as of April 18, 2023, by and between Seller and Buyer are incorporated by reference into this Bill of Sale as if fully set forth herein.
[SIGNATURES ON NEXT PAGE]

Exhibit D
Form of Bill of Sale
Page S-1
4865-7714-1595v7/024538-0013
IN WITNESS WHEREOF, this Bill of Sale has been executed as of this _____ day of __________, 2023.

SELLER:

THE BSK FAMILY TRUST, DATED
DECEMBER 18, 2020
___________________________________
Kim Raeburn Henry, Trustee
BUYER:

CITY OF FOUNTAIN VALLEY,
a California municipal corporation
By:

Maggie Le, City Manager
or Authorized Designee
ATTEST:

CITY CLERK
Rick Miller or Authorized Designee

Exhibit E
Due Diligence Items

4865-7714-1595v7/024538-0013

EXHIBIT E

DUE DILIGENCE ITEMS

1. Current Property tax bill.

2. A.L.T.A. Survey dated 9-3-89.

3. Foundation Soils Investigation dated April 30, 1973.

4. Preliminary Environmental Assessment Report (Level I) by National Environmental Consultants, Inc., dated September 1989 for George Elkins Company.

5. Commitment for Title Insurance No. NCS-1170693-SA1 dated as of March 7, 2023.

6. Safeco Title Insurance Company statement dated December 6, 1978 that it is prepared to issue title insurance on the parcel to the north of subject property, which was being sold by Unigard Mutual Insurance Company.

7. Letter dated June 29, 1989 from Unigard Insurance stating not aware of any underground hydrocarbons.

8. First American Title Insurance Company title search, examination, and title insurance effective June 18, 1973 to Unigard Mutual Insurance Company relative to the initial parcel including the subject property and the property to the north.

9. Grant deeds from multiple owners of the initial parcel acquired by Unigard Mutual Insurance Company, dated on or about February 6, 1973. (These were recorded documents.)

10. Street Agreement letter from City of Fountain Valley to Unigard Insurance Company dated June 7, 1973.

11. Encroachment Permit from State of California Department of Transportation to Unigard Insurance Group dated September 22, 1975, which may be related to the parcel to the north of subject property.

12. Director’s Deed form California Department of Transportation to Unigard Mutual Insurance Company dated March 22, 1976, which may or may not be related to the subject property. (This document was recorded.)

13. Deed of Reconveyance dated February 5, 1990. (This document was recorded.)

14. Corporation Grant Deed signed by Unigard Mutual Insurance Company on December 27, 1978 (and not signed by Warner Center Associates), which seems to include some restrictions on the use of the parcel to the north of subject parcel.

15. Network Home Inspection, Inc. Confidential Inspection Report regarding subject property, dated August 1, 1989.

16. Map of Statutory Natural Hazards prepared by JCP-LGS, dated February 14, 2020.

17. Boundary/Topographical Survey prepared by T&M Surveying, dated November 11, 2017.

18. A.L.T.A. Commit for Title Ins. 8.1.16

19. Spec HQ as-builts

20. A.L.T.A. Survey dated March 18, 2022

4865-7714-1595v7/024538-0013

21. FEMA Letter of Map Amendment (LOMA) Flood data – redacted August 26, 2016

22. Geotechnical Professionals Inc., Interim Geotechnical Recommendations-April 21, 2021

23. AEI Phase 1 Environmental Site Assessment Dated March 9, 2022

24. Fountain Valley City St Agreement dated 6/7/73

Exhibit F

4865-7714-1595v7/024538-0013

EXHIBIT F

RELEASE, WAIVER AND ESTOPPEL AGREEMENT
This RELEASE, WAIVER AND ESTOPPEL AGREEMENT RE LEASE AND RELOCATION LAW is entered into as of [_______], 2023, by and among the CITY OF FOUNTAIN VALLEY, a California municipal corporation (“City”), THE BSK FAMILY TRUST, DATED DECEMBER 18, 2020, KIM RAEBURN HENRY, TRUSTEE (“Landlord”) and SPEC SERVICES, INC., a California corporation doing business as “SPEC” (“Tenant”), for the waiver, and release of any and all claims associated with the Tenant’s Leasehold Interest, the Lease, termination of Tenant’s Leasehold Interest and the Lease, and surrender, vacation and move-out of the Premises (provided that Tenant may leave some or all of Tenant’s personal property within the Premises, in which case it shall be deemed abandoned), including estoppel representations by Landlord and Tenant (as such capitalized terms are defined herein).

RECITALS
A. Landlord and Tenant desire to confirm certain facts that are a part of this Release, Waiver and Estoppel Agreement, including that City, as Buyer, and Landlord, as Seller, are parties to that certain Agreement for Purchase and Sale of Real Property and Escrow Instructions (17101 Bushard Street) (“PSA”) dated as of April 18, 2023 by which Landlord agrees to sell, and City agrees to buy the Property defined and described therein that includes the Premises.

B. Landlord currently owns the “Real Property” as defined in the PSA, which is located at 17101 Bushard Street, Fountain Valley, California 92708, County of Orange, State of California, APN 167-301-04. The land is improved with a 16,133 square feet (approx.) concrete tilt-up single story office building with interior atrium and loading dock.

C. Landlord and Tenant are parties to a certain [Lease Agreement] [insert full title of lease] (“Leasehold Interest”) dated as of [_______ insert date] (“Lease”).

D. Landlord, as Seller, offered for sale the Property on the open market voluntarily, independently, and of and by its own action, as further described in the PSA.

E. Pursuant to the Lease, Landlord and Tenant hereby make certain representations, warranties, and certification of certain facts about the Lease, which are set forth in Section 1 herein (“Estoppel”).

F. As defined in the PSA and as used in this Release, Waiver and Estoppel Agreement the term “Relocation Law” means (1) the California Relocation Assistance Law, Health and Safety Code Section 7260, et seq., and the implementing regulations promulgated by the California Department of Housing and Community Development set forth in California Code of Regulations, Title 25, Housing and Community Development, Division 1, Chapter 6, Section 6000, et seq., and, (2) if and as applicable, federal relocation laws and regulations set forth in the Federal Uniform Relocation and Real Property Assistance Act, 42 U.S.C. Section 4601, et seq., the implementing regulations thereto in the Code of Federal Regulations, 49 CFR Part 24, and all applicable, if any, other relocation codes and regulations (together, “Relocation Law”).

Exhibit F

4865-7714-1595v7/024538-0013
E. Tenant understands and acknowledges that it voluntarily, knowingly, and independently (i) enters into this Release, Waiver and Estoppel Agreement with City and Landlord, (ii) agrees to surrender and vacate the Premises at least one (1) business day prior to the Closing pursuant to the PSA, and (iii) agrees to waive and release any and all rights to relocation assistance and benefits, including without limitation, notices, advisory assistance, and monetary payments, and goodwill of its business due to termination of the Lease by Landlord and Tenant surrendering and moving out of the Premises. Tenant desires and intends by this Release, Waiver and Estoppel Agreement to expressly, intentionally, voluntarily and knowingly settle, waive, and release any and all claims against Landlord and/or City associated in any manner whatsoever with Landlord’s termination of Tenant’s Leasehold Interest, Tenant ceasing operation of its business at the Premises, surrendering and moving out of the Premises, whether or not any such claims exist now, or otherwise may or may not arise, or may or may not have arisen in the future, if at all, under the Relocation Law or other applicable laws and regulations.

NOW, THEREFORE, for good and valuable consideration, receipt of which is acknowledged, including the foregoing recitals that are a substantive part hereof, the City, Landlord and Tenant agree as follows:

1. Estoppel. Tenant has leased the Premises from Landlord. The Lease constitutes the entire agreement between Landlord and Tenant and has not been amended. As of the date hereof, the Lease is in full force and effect. Tenant is presently the occupant in possession and has not sublet, assigned or hypothecated or otherwise transferred all or any portion of Tenant's Leasehold Interest in the Lease or Premises. The term of the Lease commenced on ___________.

Prior to the date hereof, Tenant received from Landlord a formal notice of termination of tenancy “Lease Termination”. Tenant has no right or option of any nature whatsoever, whether arising out of the Lease or otherwise, to purchase the Premises, or any interest or portion in or of the Premises.

1.1 Rent. The current Base Rent installment which Tenant is obligated to pay to Landlord is $6,000 per month. Tenant pays certain other charges as additional rent. Tenant has no claim or defense against Landlord under the Lease and is asserting no offsets or credits against either the rent or Landlord.

1.2 No Default.
(a) There does not exist an event of default or events that with notice or the passage of time or both would be events of default under the Lease on the Landlord’s part. (b) There does not exist an event of default or events that with notice or the passage of time or both would be events of default under the Lease on the Tenant’s part. (c) There is no claim, controversy or disagreement existing between Landlord and Tenant.
(d) Landlord has no defense, offset, claim, counterclaim, or right of recoupment against its obligations under the Lease.
(e) Tenant has no defense, offset, claim, counterclaim related to its obligations under the Lease.

Exhibit F

4865-7714-1595v7/024538-0013

1.3 Authority. The persons signing this Certificate on behalf of Landlord and on behalf of Tenant are fully authorized to sign this instrument.

1.4 Security Deposit. Landlord and Tenant represent there is no security deposit related to the Premises.

1.5 No Bankruptcy. No insolvency, bankruptcy, receivership or other similar proceeding has been initiated by Tenant or against Tenant.

1.6 No Tenant Allowances Due or Unpaid. All, if any, tenant constructions allowances or similar inducements have been paid in full. All duties of an inducement nature required of the Landlord in the lease have been fulfilled. All of Landlord's obligations that accrued prior to the date hereof have been performed. Tenant has not received, nor is due, any free rent, credit, abatement or other concessions under the Lease.

1.7 No Third Party. Tenant (a) is not presently engaged in nor does it presently permit, (b) has not at any time in the past engaged in nor permitted, and (c) has no knowledge that any third person or entity engaged in or permitted any operations or activities upon, or any use or occupancy of the Premises, or any portion thereof, for the purpose of or in any way involving the handling, manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or disposal (whether legal or illegal, accidental or intentional) of any radioactive, toxic or hazardous substances, materials or wastes, or any wastes regulated under any local, state or federal law, except as to the Phase I Report described in the PSA.

1.8 City Reliance. Tenant acknowledges and agrees that Tenant shall be estopped from taking any position against City contrary to the statements contained herein.

2. Relocation Law. Tenant acknowledges that Tenant has reviewed and understands the Relocation Law related to the termination of Tenant’s Leasehold Interest and the Lease by Landlord, the relationship of such termination to the PSA, and the timing and reason for its surrender and moveout from the Premises. Tenant acknowledges that it may be, or may have been, may become entitled under the Relocation Law to receive a general information notice (GIN) from the City about Landlord’s intention to sell the Property to the City, about its potential rights for a notice of eligibility related to advisory assistance and monetary benefits that may be or become due under the Relocation Law, acquisition and just compensation laws under the California Government Code and California Code of Civil Procedure (as described in the PSA), and other applicable laws and regulations, including without limitation, moving expenses, in-lieu payment, goodwill payment, bonus value payment, and any and all other potential assistance, benefits, and/or compensation that is due, or may become due, to a displaced business.

2.1 Informed Decision. Tenant acknowledges and agrees it is a fully informed person or entity and that it had decided of its own choosing to not apply for advisory assistance and/or financial benefits and by this Release, Waiver and Estoppel Agreement acknowledges such decision.

Further, Tenant agrees that the assistance and benefits for which it may have been, may be, or may become eligible for have been clearly described to it and with such understanding Tenant agrees to not file any claims against the City (or Landlord) under the Relocation Law whether now or in the future related in any manner whatsoever to the Premises, Tenant’s Leasehold Interest, the Lease, and/or Tenant’s surrender and move-out from the Property.

Exhibit F

4865-7714-1595v7/024538-0013

3. Possession/Vacation of the Premises. Tenant agrees to surrender and move-out of the Premises at least one (1) business day prior to the Closing pursuant to the PSA and subject to the Release, Waiver and Estoppel Agreement.

4. Full and Complete Settlement for Tenant’s Leasehold Interest and the Termination of the Lease by Landlord. Tenant affirms that Landlord has issued to Tenant a written termination of tenancy and the Lease shall terminate as of the earlier to occur of (a) Tenant’s move-out from the Premises, or (b) the Closing pursuant to the PSA. Tenant agrees that this Release, Waiver and Estoppel Agreement evidences Tenant’s intention to waive and release and any and all rights or obligations that exist or may arise out of the termination of Tenant’s Leasehold Interest and the Lease by Landlord, whether for public purposes or private purposes, including without limitation, severance damages, relocation assistance, relocation benefits, any alleged pre-condemnation damages, any alleged loss of business goodwill, costs, interest, attorneys’ fees, and any claim whatsoever of Tenant that might arise out of or relate in any respect whatsoever directly or indirectly to the termination of the Leasehold Interest and the Lease by Landlord. Tenant fully, intentionally, knowingly and voluntarily waives, releases and discharges Landlord and the City of Fountain Valley including the City’s appointed and elected officials, officers, directors, employees, contractors, and agents (together “Indemnitees”) from all and any manner of rights, demands, liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner to (i) the sale of the Premises or the relocation of any of Tenant’s business operations or the relocation of any person or persons, business or businesses, or other occupant or occupants located on the Premises, including the specific waiver and release of any right to any relocation benefits, assistance and/or payments under the Relocation Law notwithstanding that such relocation assistance, benefits and/or payments may be otherwise required under such state or federal law; and (ii) compensation for any interest in the business operations at, on, or about the Premises including, but not limited to, land and improvements, fixtures, furniture, or equipment thereon, Leasehold Interest, goodwill, severance damage, attorneys’ fees or any other compensation of any nature whatsoever. It is hereby intended that the release contained above relates to both known and unknown claims that Tenant and any person or entity claiming by or through Tenant may have, or claim to have, against any of the Indemnitees with respect to the subject matter contained herein or the events relating thereto. By releasing and forever discharging claims both known and unknown which are related to or which arise under or in connection with, the items set out above, Tenant expressly waives any rights under 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.”
____________________
Tenant’s Initials
In connection with this Release, Waiver and Estoppel Agreement, Tenant acknowledges that it is aware that it and its attorneys may hereafter discover claims or facts or legal theories in addition to or different from those which they know or believe to exist with respect to the claims released herein, but that Tenant’s intention hereby is to fully, finally and forever release and waive all such claims, known or

Exhibit F

4865-7714-1595v7/024538-0013
unknown, suspected or unsuspected, which do now exist, may exist or have existed in favor of Tenant.

In furtherance of such intention, this Release, Waiver and Estoppel Agreement provided by Tenant shall be and remain in effect as a full and complete release and waiver, notwithstanding the discovery or existence of any such additional claims, facts, or legal theories under applicable laws or regulations or otherwise relating to the Premises. Tenant understands and acknowledges the significance and consequences of this Release, Waiver and Estoppel Agreement.

5. Informed Consent. Tenant agrees, warrants and represents that it has carefully read the contents of this Release, Waiver and Estoppel Agreement and that, in executing this Release, Waiver and Estoppel Agreement, it does so with full knowledge of any right it may have, that it has received independent legal advice from its attorneys, or in the alternative, knowingly has determined not to seek legal advice with respect to the matters set forth herein, and that Tenant has freely signed this Release, Waiver and Estoppel Agreement without relying on any agreement, promise, statement or representation by or on behalf of any person or entity, including any and all Indemnitees.

6. Binding on Successors. The statements, representations and recitals contained in this Release, Waiver and Estoppel Agreement are to be considered contractual in nature and not merely recitations of fact. This Release, Waiver and Estoppel Agreement shall be binding upon Tenant and its heirs, agents, successors, legal representatives and assigns.

7. Governing Law. The laws of the State of California shall govern this Release, Waiver and Estoppel Agreement in all respects, including, but not limited to, matters of construction, validity, enforcement and interpretation.

8. Attorneys’ Fees. If any legal action is brought to enforce, construe, interpret or invalidate the terms of this Release, Waiver and Estoppel Agreement, the prevailing party shall be entitled to all costs and expenses incurred in any such action including court costs and reasonable attorneys’ fees, in addition to any other relief to which they may be entitled.

9. Entire Agreement. This Release, Waiver and Estoppel Agreement supersedes any prior understandings, discussions or agreements with respect to the subject matter hereof, excepting the reference to and terms and conditions of the PSA between the Landlord and City. This Release, Waiver and Estoppel Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement.

10. Severability. In the event that any terms, covenants or provisions of this Release, Waiver and Estoppel Agreement shall be held by a court of competent jurisdiction to be invalid or contrary to public policy, the remaining provisions shall continue in full force and effect. If a court of competent jurisdiction is required to interpret this Release, Waiver and Estoppel Agreement, the court shall be guided by Tenant’s knowing, voluntary and willing request and desire for Landlord to consent to the Lease and the broadest and most comprehensive release and waiver of Relocation Law.

11. Execution of Further Documents. From time to time, at the request of Landlord or the City and without further consideration of expense and within a reasonable period of time after a request is made, Tenant agrees to execute and deliver any and all further documents and instruments, and to do all acts, as Landlord or the City may reasonably request, which may be necessary or appropriate to fully implement the provisions of this Release, Waiver and Estoppel Agreement, as and if necessary; provided that Tenant shall not be required to incur any out-of-pocket expenses (except as set forth in the immediately following sentence) or to assume any new obligations in connection

Exhibit F

4865-7714-1595v7/024538-0013
therewith. Each and all parties agree to pay their own attorney, consulting and other professional fees incurred in the preparation and execution of such instruments through the Closing Date.

12. Co-Participation in Drafting of this Release, Waiver and Estoppel Agreement.

Landlord and Tenant each represent and warrant that they and their respective counsel fully participated in the drafting and terms of this Release, Waiver and Estoppel Agreement.

13. Notices. Any notice, request, demand, consent, approval or other communication required or permitted hereunder or by law shall be validly given or made only if in writing and delivered in person to an officer or duly authorized representative of the other party, or deposited in the United States mail, duly certified or registered (return receipt requested), postage prepaid, or delivered through another reasonably acceptable method, and addressed to the party for whom intended, as follows:

If to Landlord: The BSK Family Trust
10540 Talbert Ave., Suite 100, East
Fountain Valley, California 92708
Attn: Kim Raeburn Henry, Trustee
to Tenant: SPEC Services, Inc.
10540 Talbert Ave., Suite 100, East
Fountain Valley, California 92708
Attn: Kim Raeburn Henry, President
If to City: City of Fountain Valley
10200 Slater Avenue
Fountain Valley, CA 92653
Attn: City Clerk and City Legal Counsel
Any party may from time to time, by written notice to the other, designate a different address which shall be substituted for that specified above. If any notice or other document is sent by mail as aforesaid, the same shall be deemed fully delivered and received forty-eight (48) hours after mailing as provided above.
[Signature blocks on next page]

Exhibit F

4865-7714-1595v7/024538-0013
IN WITNESS WHEREOF, the parties hereto caused this Release, Waiver and Estoppel Agreement to be executed as of the day and year first above written.

LANDLORD:

CITY OF FOUNTAIN VALLEY,
a California municipal corporation
By:

City Manager or Authorized Designee
ATTEST:

Rick Miller, City Clerk
TENANT:

SPEC SERVICES, INC.,
a California corporation
Kim R. Henry, President
LANDLORD:

THE BSK FAMILY TRUST, DATED
DECEMBER 18, 2020

Kim Raeburn Henry, Trustee