Attachment No. 12
Beneficiary Consent and Subordination Agreement
ATTACHMENT NO. 13
BENEFICIARY CONSENT AND SUBORDINATION AGREEMENT
BENEFICIARY CONSENT AND SUBORDINATION
(Phase 2 South Lot – Development Deed Restriction)
[insert name of Lender]
DATED AS OF: , 2026
NOTICE: THIS BENEFICIARY CONSENT AND SUBORDINATION
EVIDENCES LENDER’S KNOWLEDGE THAT ITS SECURITY INTERESTS IN THE SOUTH LOT AND PHASE 2 PROJECT SHALL BE AND REMAIN SUBJECT
TO AND OF A LOWER PRIORITY THAN THE CERTAIN DEVELOPMENT
DEED RESTRICTION AND COVENANT (MAGNOLIA I AND MAGNOLIA II PROJECT).
The undersigned, [insert name of Lender] (“Beneficiary” and “Lender”), in its capacity as Beneficiary under that certain [Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing] dated as of [insert date], from HPG MAGNOLIA II, LLC, a Washington limited liability company (“South Lot Owner”), as trustor to [_______] Title Company, as trustee for the benefit of the Beneficiary, which was recorded in the Official Records/Recorder’s Office of Orange County, California on [insert date] as Document No. [_______] (“Deed of Trust”), and all of its other and/or additional security interests (together with Deed of Trust, “Security Interests”), encumbering the South Lot owned by South Lot Owner as described in the Deed of Trust (“Property” or “South Lot”) does hereby subordinate and consent to the subordination of the lien of the Deed of Trust to the certain Development Deed Restriction and Covenant (“Covenant”) entered into and executed by South Lot Owner and the parties thereto and agrees that the lien of the Deed of Trust is, and shall at all times remain, subject and subordinate to the Covenant. In the event Beneficiary or any other party shall obtain record title to the Property through foreclosure or deed-in-lieu of foreclosure, the Covenant shall be binding upon the party obtaining record title as the then owner of the Property.
The South Lot is legally described in Exhibit A, attached hereto and fully incorporated by this reference.
Lender hereby acknowledges its understanding of, and consent to, the terms and provisions of the Covenant. The undersigned further agrees that its Security Interests are and shall unconditionally be and remain at all times junior, subordinate and subject to the terms, covenants, conditions and restrictions of the Covenant, provided that a violation of the Covenant will not defeat, render invalid or limit the Security Interests.
In consideration of Lender’s covenants and agreements contained in therein, City and its designated agencies hereby agree for the benefit of Lender that concurrently with any notice from City to South Lot Owner that a default or breach exists under the terms of the Covenant, City shall send a copy of such notice to Lender and Lender shall have the right, but not the obligation, to cure any breach or default within thirty (30) days after the expiration of any cure period set forth in the Notice from City to South Lot Owner regarding such South Lot Owner breach or default, provided that such 30- day period shall be extended for such additional time as Lender may reasonably require to expeditiously either: (i) obtain possession and control of the South Lot or improvements thereon and thereafter cure the breach(es) or default(s) with reasonable diligence and continuity or (ii) obtain the
Attachment No. 13
Beneficiary Consent and Subordination Agreement (Development Deed Restriction)
appointment of a receiver and give such receiver a reasonable period of time in which to expeditiously cure the default; provided that in no event shall such cumulative Lender cure period exceed ninety (90) days in total for a breach or default bearing on the health or safety of residents of any Affordable Unit without the consent of the City Manager. The provisions of this Lender Consent are intended to supplement, and not to limit, waive, modify or replace, those provisions of law pertaining to notice and cure rights of junior lenders including, without limitations, those set forth in California Civil Code Sections 2924b and 2924c. Lender intentionally and unconditionally subordinates the lien or charge of the Security Interests and Deed of Trust in favor of the Covenant.
IN WITNESS WHEREOF, the Beneficiary, by its officer thereunto duly authorized, has executed this Beneficiary Consent and Subordination of the day and year first above written.
BENEFICIARY:
[Lender]
By:
Name:
Title:
Attachment No. 13
Exhibit A – Legal Description of South Lot
Beneficiary Consent and Subordination Agreement (Development Deed Restriction)
EXHIBIT A
Legal Description of South Lot
The South Lot Property consists of the following parcel located in the City of Fountain Valley, County of Orange, State of California:
(APN: 143-301-32 and 143-301-42)
PARCEL 1, IN THE CITY OF FOUNTAIN VALLEY, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP FILED IN BOOK 82, PAGE 19 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID ORANGE COUNTY.
EXCEPTING THEREFROM THAT PORTION OF THE LAND CONDEMNED TO ORANGE
COUNTY TRANSPORTATION AUTHORITY, A PUBLIC ENTITY AS EVIDENCED BY FINAL ORDER OF CONDEMNATION RECORDED ON JULY 08, 2021 AS INSTRUMENT NO. 2021-441526 OF OFFICIAL RECORDS.
EXCEPTING THEREFROM, ALL OIL, PETROLEUM, NATURAL GAS, MINERAL
RIGHTS, AND OTHER HYDROCARBON SUBSTANCES LYING BELOW A DEPTH OF 500 VERTICAL FEET FROM SURFACE OF SAID LAND, OR THROUGH ANY PORTION THEREOF ABOVE SAID 500-FOOT DEPTH, FOR THE PURPOSE OF EXPLORING FOR,
EXTRACTING, MINING,
BORING, REMOVING OR MARKETING SAID SUBSTANCES, AS RESERVED BY GULF
OIL CORPORATION, A PENNSYLVANIA CORPORATION, IN A DEED RECORDED OCTOBER 12, 1967 IN BOOK 8401, PAGE 398 OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM, ALL RIGHTS TO UNDERGROUND WATER,
WITHOUT THE RIGHT OF SURFACE ENTRY, AS DEDICATED TO THE CITY OF
FOUNTAIN VALLEY ON THE MAP OF SAID TRACT
CITY OF FOUNTAIN VALLEY
CITY COUNCIL
COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: October 20, 2026
Members of the City Council
SUBJECT: Addition of Five (5) Police Department Positions, One (1) Risk Management Position, Reclassification of One (1) Fire Department Position, and Related FY 2026/27 Budget Amendments
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 requests City Council approval to add five (5) full-time Police Department positions recommended in the 2026 Organizational Assessment by Baker Tilly: one (1) Police Lieutenant (O02), two (2) Dispatchers (G24), and two (2) Community Services Officers (G12) supported by the City Council at the September 15 City Council Study Session. Staff also requests the addition of one (1) full-time Management Specialist (P02) in Risk Management and the reclassification of one (1) Management Aide (G74) to Senior Management Analyst (P39). The authorized full-time headcount would increase by six (6) positions, at a combined annualized cost of $1,027,025.
Staff requests a total of $601,430 in General Fund appropriations to cover the FY 2026/27 cost of these changes.
BACKGROUND
On January 5, 2026, City Council approved a $75,258 agreement with Baker Tilly to conduct a comprehensive organizational assessment of the Police Department, including interviews and focus groups with employees at all levels, an employee survey, observation of field operations, and a review of department data. The findings were presented at the September 15, 2026 Study Session, where the City Council directed staff to proceed with the five (5) recommended positions. Of note, authorized sworn staffing has remained at 64 for decades with little adjustment for population growth, calls for service, or new technologies.
Addition and Reclassification of Positions
October 20, 2026
Separately, on September 22, 2026, the Fire Chief requested reclassification of the Department’s Management Aide position in anticipation of a vacancy, and Risk Management has identified the need for additional staff support in the last year.
DISCUSSION
Police Department – Addition of Five (5) Positions
Police Lieutenant (1). Baker Tilly recommended restoring a fourth Lieutenant position. The Administrative Lieutenant was eliminated in FY 2010/11, and its executive duties were dispersed among the remaining Lieutenants and Sergeants. Reinstating it restores dedicated capacity for administrative, budget, policy, and training oversight, and increases authorized sworn staffing from 64 to 65.
Dispatchers (2). Two additional Dispatchers will reduce solo dispatching, in which a single dispatcher must answer 911 and non-emergency calls while managing radio traffic for officers in the field.
Community Services Officer (1) – Court Liaison. The Court Liaison position, critical for communications with the Orange County District Attorney’s Office, was previously eliminated and its duties spread among existing staff. As shown in Table 1, those duties now consume about 69 hours per week across eight (8) employees, including four (4) detectives, at an estimated annual cost of $200,534. A dedicated CSO returns that sworn time to investigations and field work.
Table 1 – Court Liaison Duties Currently Performed by Existing Staff Position Hours per Week Estimated Annual Cost
Records Clerk II (1) 20 $38,991
Support Services Manager (1) 9 $34,256
Police Officer – Detective (4) 32 $99,446
Police Sergeant (1) 4 $15,653
Crime Analyst (1) 4 $12,188
Total 69 $200,534
Community Services Officer (1) – Property and Evidence. Evidence and property volume has grown over the course of time, and two (2) full-time employees are needed to properly manage the overall workload. Current staffing includes one (1) full-time Community Services Officer and one part-time retired annuitant who was hired to assist. The annual cost for a retired annuitant is $54,597, and retired annuitants are limited to working only 960 hours per fiscal year. A second full-time Community Services Officer will better align staffing with the workload and strengthen chain-of-custody controls.
Risk Management – Addition of One (1) Management Specialist (P02) The Risk Management Division oversees workers’ compensation and liability claims, cost recovery for third-party damage to City property, contract and insurance review, ADA grievance and workplace violence investigations, OSHA training and compliance, safety policies, and facility inspections. These functions are currently managed alongside the Risk Manager’s substantive
Addition and Reclassification of Positions
October 20, 2026
responsibilities, increasing the potential for delays and burnout. The Management Specialist would coordinate and track safety training, monitor regulations, maintain records and the intranet page, process payments, monitor contract and insurance expirations, coordinate cost recovery, and provide customer service, including the designated City Manager phone line(s) as needed.
This allows the Risk Manager to focus on risk analysis, claims oversight, policy development, and loss prevention.
A focus for the Management Specialist will be cost recovery. During FY2025/26, Risk Management recovered approximately $270,000 in property recovery claims. There are currently 36 pending claims and another 30 claims waiting to be processed.
Currently, Risk Management has a part-time temporary worker helping with clerical and other risk management tasks at a cost of $54,000 per year.
Fire Department – Reclassification of Management Aide to Senior Management Analyst (P39)
The Fire Department's operations increasingly depend on complex financial analysis and datadriven decision-making. The new Fire Facilities Impact Fee, the city-operated ambulance program, and Ground Emergency Medical Transportation (GEMT) reimbursement, permitting and inspection changes, and the emergency management rebuild each require ongoing fiscal modeling, cost recovery analysis, and performance tracking. The Department's existing Management Aide classification is structured for entry-to-mid-level support work and does not include this level of analytical responsibility, and in some respects is duplicative with the departmeent’s other administrative support position.
The Senior Management Analyst, who would report to the Fire Chief, would lead complex financial analyses, including budget development and forecasting, capital planning, and impact fee administration. The position would manage cost recovery, fee studies, and grants; conduct root cause analysis of operational and fiscal issues and develop recommended solutions; and establish measurable performance outcomes to track program effectiveness and return on investment. The position would also prepare Council reports and support public information efforts. These duties are substantially greater than those of the existing Management Aide classification and are consistent with the Senior Management Analyst classification.
The Department’s cost recovery revenue grew 36 percent, from $5.11 million in FY 2023/24 to $6.95 million in the FY 2025/26 adopted budget, and the position will support the fee and grant work that will generate this revenue and more.
FISCAL REVIEW
Staff requests a total of $601,430 in General Fund appropriations to cover the FY 2026/27 cost of these changes.
Police Department. Staff anticipates filling the Lieutenant position immediately, while the other four (4) positions will be filled in the second half of FY 2026/27. Staff requests a General Fund budget appropriation of $510,045 to cover these costs in the current fiscal year.
Addition and Reclassification of Positions
October 20, 2026
Risk Management and Fire. Both changes are effective January 1, 2027. Staff requests General Fund appropriations of $72,150 for the Management Specialist (annualized $144,300) and $19,235 for the Fire Department reclassification (annualized $38,475, the difference between the two (2) salary ranges plus benefits), for a total of $91,385 in FY 2026/27.
Table 2 – Summary of Position Costs
Department / Position Action Annualized Cost FY 2026/27 Cost (1) Police Lieutenant (O02) Add $351,700 $263,775
(2) Dispatchers (G24) Add $262,240 $131,120
(2) Community Services Officers (G12) Add $230,300 $115,150 Police Department Subtotal 5 positions $844,250 $510,045 (1) Risk – Management Specialist (P02) Add $144,300 $72,150 (1) Fire – Senior Management Analyst (P39) Reclassify $38,475 $19,235 Total 6 positions $1,027,025 $601,430
Tables 3 and 4 below detail how these new positions impact the 20-year financial forecast. The five (5) new Police positions will add $886,464 in FY 2027/28, $930,787 in FY 2028/29, and $1,145,093 by FY 2037/38 to projected personnel costs. When factoring in the new Management Specialist and the reclassified Senior Management Analyst, total projected personnel costs increase over the current baseline by $1,078,377 in FY 2027/28, $1,132,295 in FY 2028/29, and $1,392,997 in FY 2037/38.
Table 3 – 20-Year Financial Forecast Personnel Impact (5 Police Positions) Personnel Category FY 2027/28 FY 2028/29 FY 2037/38**
Current Baseline – Personnel Expense $49,961,413 $52,459,484 $64,537,879 Proposed Baseline – (5) PD Positions $50,847,877* $53,390,271* $65,682,972 Total Projected Cost Increase $886,464 $930,787 $1,145,093 *Proposed personnel costs reflect an assumed annual increase factor of 5%. **Measure HH sunsets in FY 2037/38.
Table 4 – 20-Year Financial Forecast Personnel Impact (7 Positions) Personnel Category FY 2027/28 FY 2028/29 FY 2037/38**
Current Baseline – Personnel Expense $49,961,413 $52,459,484 $64,537,879 Proposed Baseline – (7) Positions $51,039,790* $53,591,779* $65,930,876 Total Projected Cost Increase $1,078,377 $1,132,295 $1,392,997 *Proposed personnel costs reflect an assumed annual increase factor of 5%. **Measure HH sunsets in FY 2037/38.
Addition and Reclassification of Positions
October 20, 2026
ALTERNATIVES
Alternative No. 1: Approve the staffing changes and related FY 2026/27 budget amendments as recommended in this report.
Alternative No. 2: Approve the Police Department staffing package, as outlined above, and provide direction to staff about the Risk and Fire personnel changes.
Alternative No. 3: Do not approve Alternative No. 1 or 2 and provide direction to staff.
RECOMMENDATION
Staff recommends that the City Council approve Alternative No. 1 to:
1. Approve the addition of five (5) full-time positions in the Police Department: one (1) Police Lieutenant (O02), two (2) Dispatchers (G24), and two (2) Community Services Officers (G12), along with the corresponding budget appropriation.
2. Approve the addition of one (1) full-time Management Specialist (P02) in Risk Management, along with the corresponding budget appropriation; and
3. Approve the reclassification of one (1) Management Aide (G74) in the Fire Department to Senior Management Analyst (P39), along with the corresponding budget appropriation.
Prepared by: Briana Laszlo, Acting Finance Manager
Reviewed by: Colin Burns, City Attorney
Fiscal Review by: Robin Harnish, Acting Finance Director Approved by: Maggie Le, City Manager
CITY OF FOUNTAIN VALLEY
CITY COUNCIL
COUNCIL ACTION REQUEST
To: Honorable Mayor and Agenda Date: October 20, 2026
Members of the City Council
SUBJECT: Approval of The City of Fountain Valley Six-Month Strategic Objectives for October – March 2027
Three-Year Strategic Goals
☒ Enhance the culture and environment of “A Nice Place to Live” ☒ Achieve fiscal stability by evaluating processes, and attract and retain revenue-producing businesses/opportunities
☒ Attract and retain quality staff through best practices and trends ☒ Maintain, build, and modernize infrastructure to support growth and future needs of the City
☐ Not applicable
EXECUTIVE SUMMARY
On September 17, 2026, the City Council held a strategic planning session with the executive management team and department managers to revisit the three-year goals and discuss the next sixmonth strategic objectives. Those in attendance collaborated to review the City’s three-year goals for 2026-2028 and to establish the City’s six-month strategic objectives plan, which serves as a guiding framework for aligning City Council priorities, staff initiatives, and community input. City staff is presenting the updated six-month strategic objectives for the City Council's adoption.
DISCUSSION
On September 17, 2026, the City Council held a strategic planning workshop to revisit the three-year goals and discuss the next six-month strategic planning objectives for October 2026 through March 2027. Facilitated by Ryder Smith of Tripepi Smith, the session allowed the Council to review progress on the prior three-year plan, identify key takeaways, and refine its approach on future priorities. The process was open to the public for community comments and discussion between the City Council and City staff.
The City’s mission statement is a team-driven organization committed to providing excellent service to our community through our core values: Fiscal Stability, Honesty, Integrity and Ethical Behavior, Teamwork, Innovation, Quality of Life, and Excellent Customer Service.
The three-year Strategic Plan is organized around four (4) primary goals:
• Cultivate a welcoming culture and safe environment that makes our community “A Nice Place to Live.”
City of Fountain Valley Strategic Plan
September 20, 2026
• Ensure long-term fiscal stability by evaluating processes and attracting and retaining revenueproducing businesses/opportunities. • Attract and retain quality staff through best practices and trends. • Maintain, build, plan for, and modernize infrastructure to support the growth and future needs of the city.
To advance these goals, the City Council and staff have established six-month implementation objectives from October 2026 through March 2027 (Attachment 1). Monthly, City staff will provide a progress update to the City Council. The next strategic planning session is scheduled for March 2027.
FISCAL REVIEW
Not applicable.
PUBLIC NOTIFICATION
Not applicable.
ENVIRONMENTAL IMPACT REVIEW
Not applicable.
ATTORNEY REVIEW
Not applicable.
ALTERNATIVES
Alternative No. 1: Approve the six-month strategic objectives matrix for October 2026 – March 2027.
Alternative No. 2: Direct staff to take alternate action.
RECOMMENDATION
Staff recommends that the City Council approve the six-month strategic objectives matrix for October 2026 – March 2027.
Prepared by: Talia Aparicio, Administrative Assistant
Reviewed by: Rick Miller, City Clerk
Approved by: Maggie Le, City Manager
Attachments:
1. Three-Year Goals and Six-Month Strategic Objectives Matrix for October 2026 – March 2027.
City of Fountain Valley
Six-Month Strategic Objectives
October 2026-March 2027
City of Fountain Valley Vision Statement
Fountain Valley is a safe, inclusive, and desirable community where you can live your best life! City of Fountain Valley Mission Statement
The City of Fountain Valley is a team-driven organization committed to providing excellent service to our community through our core values.
Core Values
Fiscal Stability, Honesty, Integrity and Ethical Behavior, Teamwork, Innovation, Quality of Life, and Excellent Customer Service
Three-Year Goal:
Cultivate a welcoming culture and safe environment that makes our community “A Nice Place to Live”.
When Who What Status Comments
By 12/15/2026 City
Council Meeting
(LEAD)
Rob Frizzelle; Community
Service/DCM
(LEAD)
Scott Smith; Public
Works Director
Initiate Request for Proposal and
present the Request for Proposal
submittal for City Council
consideration: implementation
opportunities for the 16-acre park
expansion as identified in the
approved Parks and Community
Services Master Plan.
X
The City of Fountain Valley recently approved
a Parks Master Plan which included a
recommended park improvement plan (RPIP).
The City is scheduled to receive 16 acres of
new park space, within Mile Square Regional
Park, as part of the fully executed 50 year
lease for the Fountain Valley Sports Park. The
RPIP identified specific development
opportunities and funding strategies for the 16
acre expansion site. The requested objective
will provide implementation opportunities for
city council consideration.
By 2/16/2027 (LEAD) Rick Miller;
City Clerk
Community Service/DCM
Community
Development/DCM
Staff to begin development of
community service survey with True
North, with distribution in early 2027.
Three-Year Goal:
Ensure long-term fiscal stability by evaluating processes and attract and retain revenue producing businesses/opportunities.
When Who What Status Comments
By 1/19/2027 City
Council meeting
(LEAD)
Omar Dadabhoy;
Community
Development/DCM
Revisit and update Economic
Development Action Plan.
Done On Target Revised Provide an update on existing five-year plan as we are in year four of that plan.
Initiate a new Request for Proposal for economic
development consultants to update the plan.
Plan last updated three years ago.
X
By 10/20/2026 City
Council meeting
(LEAD)
Robin Harnish; Acting
Finance Director
Continue to reduce the City’s
unfunded CalPERS pension liability
to support long-term financial
sustainability.
X
Provide an update on net pension positions and
unfunded liabilities for PERS and OPEB.
Staff will present at the October 20 City Council
meeting.
By 2/16/2027 City
Council Meeting
(LEAD)
Chris Nigg; Fire Chief
Public Works Director
Community
Development/DCM
Evaluate and present the possibility
of a fundraising program for Fire
Station No. 1 through donations
(i.e. bricks, plaques, pavers, etc). X
Extending date to provide time for proper
analysis.
By 12/15/2026
City Council Meeting
(LEAD)
Omar Dadabhoy;
Community
Development/DCM
Staff to begin Request for Proposal
process and report back to City
Council for outdoor advertising at
17101 Bushard Street for Funding
of Future Fire Station #1.
Three-Year Goal:
Attract and retain quality staff through best practices and trends.
When Who What Status Comments
By 7/2027 (LEAD)
Tania Knauerhaze; HR
Director
Successfully conclude 2027 labor
negotiations with bargaining units
that respect the excellence of City
staff and recognizes the needs for
long-term fiscal stability.
Done On Target Revised Explore the possibility of a class and compensation study or total compensation
study.
Obtain official direction from Council to pursue.
Prepared and released Request for Proposal.
X
By 1/31/2027 (LEAD)
Scott Kim;
IT Director
HR Director
Finance Director
Promote responsible AI adoption and
foster an innovation-friendly
organizational culture. Develop a
policy and approach to monitoring
and security, while providing an
outlet for proper use of AI.
X
Hire a staff member focused on AI policy
development and incorporation.
Currently scheduling the second round of
interviews with 4 candidates.
By 3/16/2027
City Council Meeting
(LEAD)
Tania Knauerhaze; HR
Director
(LEAD)
Chief Craig Heredia;
Police Chief
Staff to present Police Department
recruitment outreach ideas to City
Council for consideration. (Prior to
March 2027)
Implementation by March 2027.
X
Explore incentive opportunities, outreach and
recruitment ideas for PD vacancies (specifically
laterals) to achieve full staffing.
PD recruitment video
Three-Year Goal:
Maintain, build, plan for, and modernize infrastructure to support growth and future needs of the city.
When Who What Status Comments
By 2/2/2027 City
Council meeting
(LEAD)
Chris Nigg; Fire Chief
Finance Director
Public Works Director
Community
Development/DCM
Develop a strategic plan for Fire
Station 1 and the broader fire
system, including location evaluation,
modernization, and sustainable
funding.
Done On Target Revised Present RFP results and select consulting firm for development of plan and award by
City Council. (completed 6/2026)
End of 2026 to complete the study, SOC/CRA
presentation to council 1/2027 with susequent X strategic plan occuring 1/2027-4/2027 By 3/2/2027
City Council Meeting
(LEAD)
Finance Director
Chris Nigg; Fire Chief
Public Works Director
Present financial data to fund Fire
Station #1 and seek direction from
the City Council. X
Provide an update and staff report to the City
Council.
By 2/16/2027
City Council Meeting
(LEAD)
Scott Smith; Public
Works Director
Staff to conduct community outreach
with consultants on neighborhood
parking permit process regarding
Euclid Avenue lane between Edinger
and Warner.
X
By 2/2/2027
City Council Meeting
(LEAD)
Scott Smith; Public
Works Director
Staff to report back on OCPA rates
by February 2, 2027, with OCPA
implementation set for April 2027. X