Garden Grove City Council
April 9, 2024

Notice of Redemption. So long as the Bonds are held in book -entry form, notices of redemption will be mailed by the Trustee only to DTC and not to any Beneficial Owners. The Trustee on behalf and at the expense of the Authority will mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days pr ior to 276

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the date fixed for redemption. Such notice will state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and will require that such Bonds be then surrendered at the principal corporate trust office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Neither the failure to receive any notice so mailed, nor any defect in such notice, will affect the validity of the proceedings for the r edemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

With respect to any notice of optional redemption of the Bonds, such notice may state that such redemption is conditional upon the receipt by the Trustee, on or prior to the date fixed for such redemption, of moneys sufficient to pay the principal of, premium if any, and interest on the Bonds to be redeemed and upon other conditions set forth therein and that, if such money has not been so received or such other conditions have not been satisfied, said notice is of no force and effect and the Trustee is not required to redeem such Bonds. If any condition stated in the redemption notice for an optional redemption have not been satisfied on or prior to the redemption date: (i ) the redemption notice will be of no force and effect, (ii ) the Authority will not be required to redeem such Bonds, (iii ) the redemption will not be made, and (iv ) the Trustee will within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.

Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority will execute and the Trustee will authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in authorized denominations equal in aggregate principal amount representing the unredeemed portion of the Bonds surrendered.

Effect of Notice of Redemption . Notice having been mailed as aforesaid, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds will become due and payable on said date, and, upon presentation and surrender thereof at the principal corporate trust office of the Trustee, said Bonds will be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, will be held by the Trustee so as to be available therefor on such date, and, if notice of redemption ther eof has been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds will cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds will be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon. All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions of the Indenture will be canceled upon surrender thereof and destroyed.

Book-Entry Only System
General. DTC will act as securities depository for the Series 2024A Bonds. The Series 2024A Bonds will be issued as fully-registered bonds registered in the name of Cede & Co. (DTC’s partnership nominee). One fully-registered Series 2024A Bond will be issued for each maturity of the Series 2024A Bonds , each in the initial aggregate principal amount of such maturity, and will be deposited with DTC. See APPENDIX F— “BOOK-ENTRY ONLY SYSTEM.”
Transfer and Exchange of Bonds . The following provisions regarding the exchange and transfer of the Series 2024A Bonds apply only during any period in which the Series 2024A Bonds are not subject to DTC’s book-entry system. While the Series 2024A Bonds are subject to DTC’s book-entry system, their exchange and transfer will be effected through DTC and the Participants and will be subject to the procedures, rules and requirements established by DTC.
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Any Bond may, in accordance with its terms, be transferred upon the books required to be kept by the Trustee pursuant to the provisions of the Indenture by the Person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Bond or Bonds will be surrendered for transfer, the Authority will execute and the Trustee will authenticate and will deliver a new Bond or Bonds of the same Series in a like aggregate principal amount, in any Authorized Denomination.

The Trustee will require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

The Bonds may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Bonds of the same Series of other authorized denominations. The Trustee will require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

The Trustee is not obligated to make any transfer or exchange of Bonds of a Series during the period established by the Trustee for the selection of Bonds of such Series for redemption, or with respect to any Bonds of such Series selected for redemption.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS Pledge of Revenues
The Series 2024A Bonds are equally and ratably payable from and s ecured by Base Rental Payments and certain amounts on deposit in certain funds and accounts established under the Indenture. Base Rental Payments will be paid by the City from any and all legally available funds. See the captions “THE CITY OF GARDEN GROVE,” “CITY FINANCIAL INFORMATION” and “RISK FACTORS” for a description of such available funds and the potential risks associated with the availability of such funds to make Base Rental Payments. The City has covenanted in the Lease Agreement to take such action as may be necessary to include all Base Rental Payments and Additional Rental Payments due under the Lease Agreement as a separate line item in its biennial budgets and to make the necessary annual appropriations therefor.

The Authority, pursuant to the Assignment Agreement, will assign to the Trustee for the benefit of the Series 2024A Bond Owners all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including, without limitation, its right to receive Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided that, the Authority will retain the rights to indemnification and to payment of reimbursement of its reasonable costs and expenses under the Lease Agreement. Th e City will pay Base Rental Payments directly to the Trustee, as assignee of the Authority. See “—Base Rental Payments” below. Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on a parity with the Series 2024A Bonds, subject to certain conditions precedent. See the captions “THE PROJECT” and “—Additional Bonds.”
Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set fo rth in the Indenture, all of the Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are pledged by the Authority pursu ant to the Indenture to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act. Said pledge constitutes a first lien on such assets.

THE SERIES 2024A BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY, PAYABLE

SOLELY FROM BASE RENTAL PAYMENTS AND THE OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE

AUTHORITY, THE CITY OR THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF, IS 278

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PLEDGED TO THE PAYMENT OF THE SERIES 2024A BONDS. THE AUTHORITY HAS NO TAXING POWER.

Base Rental Payments
Rental Payments (collectively, the Base Rental Payments and the Additional Rental Payments) will be paid by the City to the A uthority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid. Each Base Rental Payment will be deposited with the Trustee no later than the third Business Day preceding each Interest Payment Date (the “Base Rental Deposit Date”) on which such Base Rental Payment is due. All Base Rental Payments will be paid directly by the City to the T rustee, and if received by the Authority at any time will be transferred by the Authority to the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee will be deposited by the Trustee in the Base Rental Payment Fund.

Pursuant to the Indenture, on the Business Day immediately preceding each Interest Payment Date and on the Business Day immediately preceding each Principal Payment Date, the Trustee will transfer amounts in the Base Rental Payment Fund as are necessary to the Interest Fund and the Principal Fund to provide for the payment of the interest on and principal of the Series 2024A Bonds.

Scheduled Base Rental Payments relating to the Series 2024A Bonds are set forth below under the caption “BASE RENTAL PAYMENT SCHEDULE.”

THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL PAYMENTS DOES NOT

CONSTITUTE A DEBT OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF

WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR

RESTRICTION, AND DOES NOT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY OR THE

STATE IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY OR THE STATE HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

Additional Rental Payments
For the right to use and occupy the Property, the Lease Agreement requires the City to pay, as Additional Rental payments thereunder, in addition to the Base Rental Payments, such amounts as shall be required for the payment of the following:
(i) All taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein. (ii) All reasonable administrative costs of the Authority relating to the Property including, but without li miting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and rea sonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees. (iii) Insurance premiums for all insurance required pursuant to the Lease Agreement. (iv) Any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with section 148(f) of the Internal Revenue Code of 1986. (v) All other payments required to be paid by the City under the provisions of the Lease Agreement or the Indenture.
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Amounts constituting Additional Rental Payments payable under the Lease Agreement will be paid by the City directly to the person or persons to whom such amounts are payable. The City will pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the C ity stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Abatement
Base Rental Payments and Additional Rental Payments are paid by the City in each Rental Period for and in consideration of the right to use and occ upy the Property. Except as otherwise specifically provided in the Lease Agreement, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments are subject to abatement proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement will continue in full force and effect. The amount of such abatement will be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period may not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. Any such abatement will continue for the period commencing with the date of interf erence resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of the Lease Agreement will be extended as provided in the Lease Agreement, except that the term will in no event be extended ten years beyond the stated termination date of the Lease Agreement. The Trustee cannot ter minate the Lease Agreement in the event of such substantial interference. Abatement of Base Rental Payments and Additional Rental Payments is not an event of default under the Lease Agreement and does not permit the Trustee to take any action or avail itself of any remedy against the City. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGA L DOCUMENTS—THE LEASE AGREEMENT—Rental Payments—Rental Abatement.” Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments due under the Lease Agreement in any of the funds and accounts established under the Indenture (including as a result of the availability of insurance proceeds or amounts in certain funds and accounts pledged to the Series 2024A Bonds ), such Rental Payments will not be abated as provided above but, rather, will be payable by the City as a special obligation payable solely from said funds and accounts.

The Lease Agreement provides that if the Bonds have not been fully paid or defeased by the final maturity thereof, or if the Rental Payments remain due and payable or have been abated at any time and for any reason, then the term of the Lease Agreement will be extended until the date upon which (i) all Bonds are fully paid or defeased, or (ii) the Indenture is discharged by its terms and all Rental Payments are paid in full, up to an additional ten years beyond the final maturity of the Bonds.

Substitution or Release of the Property
General. The Authority and the City may amend the Lease Agreement to substitut e alternate real property for any portion of the Property or to release a portion of the Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement and described below. After a substitution or release, the portion of the Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement.

The Lease Agreement provides that there will be no reduction in or abatement of the Base Rental Payments due from the City thereunder as a result of such substitution or release. Any such substitution or release is subject to the following specific conditions precedent:
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(a) the City finds (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release: (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, and (ii ) has a useful life in excess of the final maturity of any Outstanding Bonds.
(b) the City obtains or causes to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in an amount at least equal to the aggregate principal amount of any Outstanding Bonds, of the type and with the endorsements described in the Lease Agreement; (c) the City provides the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes;
(d) the City, the Authority and the Trustee execute, and the City causes to be recorded with the Orange County Clerk -Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained in the Lease Agreement and in the Ground Lease;
(e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default has occurred and is continuing under the Lease Agreement; (g) the City gives, or causes to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City certifies to the Trustee that the City has a current need for the substituted real property; and
(i) the City certifies to the Trustee that any substitution will not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS —THE LEASE AGREEMENT—No Consequential Damages; Use of Property; Substitution or Release.” Release of Release Property After Completion of Project . Without regard to the requirements of the Lease Agreement described above under the caption “—General,” the City may provide for release and deletion of the Release Property (as defined under the caption THE PROPERTY —The Release Property”) from the Property such that the Project Site constitutes the entire Property, provided that the City satisfies conditions (i) through (iii) described below:
(i) The City files with the Authority and the Trustee a copy of a Lease Supplement which deletes the Release Property from the Lease Agreement (and, at the election of the City, from the Ground Lease); (ii) The City delivers certificate to the Trustee pursuant to the Lease Agreement stating that Phase 1 of the Project has been substantially completed substantially in conformity with the plans and specifications for the Project and is available for occupancy; and
(iii) no event of default has occurred and is continuing under the Lease Agreement.

Upon the satisfaction of all such conditions under the Lease Agreement, the Lease Agreement will end as to the Released Portion and continue as to the Project Site, and the Release Property will be released from the Lease Agreement and no longer form part of the Property thereunder without further act or deed of the City, the 281

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Authority, or the Trustee, provided the Authority and the Trustee execute any such instruments evidencing such release as may be reasonably requested by the City from time to time. The City will not be entitled to any reduction, diminution, extension or o ther modification of the Base Rental Payments whatsoever as a result of such deletion.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS —THE LEASE AGREEMENT—No Consequential Damages; Use of Property; Substitution or Release.” Action on Default
Should the City default under the Lease Agreement, the Trustee, as assignee of the Authority under the Lease Agreement, may terminate the Lease Agreement and recover certain damages from the City, or may retain the Lease Agreement and hold the City liable for a ll Base Rental Payments thereunder on an annual basis, and will have the right to re-enter and re-let the Property. In the event such re-letting occurs, the City would be liable for any resulting deficiency in Base Rental Payments. Base Rental Payments m ay not be accelerated upon a default under the Lease Agreement. See “RISK FACTORS—Limited Recourse on Default; No Acceleration of Base Rental.”
For purposes of certain actions of Bond Owners under the Indenture and the Lease Agreement, such as certain consents and amendments and the direction of remedies following default, Series 2024A Bond Owners do not act alone and may not control such matters to the extent such matters are not supported by the requisite number of the Owners of all Series 2024A Bonds and Additional Bonds, if any.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Authority) contained in the Lease Agreement and the Indenture, see APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Defaults and Remedies” and “—THE INDENTURE—Default and Limitations of Liability.”
No Reserve Fund
The Authority has not funded a debt service reserve fund for the Series 2024A Bonds.

Additional Bonds
Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on parity with the Series 2024A Bonds upon satisfaction of certain conditions, including, but not limited to, the following:
(a) The issuance of such Additional Bonds has been authorized under and pursuant to the Indenture and provided for by a Supplemental Indenture;
(b) The Authority and the City are in compliance with all agreements, conditions, covenants and terms contained in the Indenture, the Lease Agreement and the Ground Lease required to be observed or performed by each of them;
(c) The Ground Lease has been amended, to the extent necessary, and the Lease Agreement has been amended so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the timely payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment is permitted to be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period is in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith. 282

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See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGA L DOCUMENTS —THE INDENTURE—Issuance of Bonds; Application of Proceeds.”
Insurance
The Lease Agreement requires the City to maintain or cause to be maintained fire, lightning and special extended coverage insurance (which includes coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. All insurance required to be maintained pursuant to the Lease Agreement may be subject to a deductible in an amount not to exceed $500,000.

The Lease Agreement requires the City to maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the lo ss, total or partial, of the use of any part of the Property as a result of any of the hazards covered by the casualty insurance described in the preceding paragraph, in an amount sufficient at all times to pay an amount not less than the product of two ti mes the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period.

The City is also required to maintain or cause to be maintained, throughout the term of the Lease Agreement, a standard commercial general liability insurance pol icy or policies in protection of the City, the Authority and their respective members, officers, agents and employees, and worker’s compensation insurance as described in APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT—Insurance.”
The City’s obligation to maintain the insurance described above (including rental interruption insurance) may be satisfied by self -insurance, provided such self -insurance complies with the requirements of the Lease Agreement.

The City is required under the Lease Agreement to provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, in the aggregate amount of not less than the initial aggregate principal amount of the Bonds (and the initial aggregate principal amount of Additional Bonds issued after the Closing Date), insuring the fee interest of the City in the Property, the Authority’s leasehold estate in the Property under the Ground Lease, and the City’s subleasehold estate in the Property under the Lease Agreement, subject only to Permitted Encumbrances, and providing that all proceeds thereunder are payable to the Trustee for the benefit of the Owners.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS —THE LEASE AGREEMENT—Insurance.”
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SOURCES AND USES OF FUNDS
The sources and uses of funds with respect to the Series 2024A Bonds are shown below.

Sources
Principal Amount of Series 2024A Bonds
Original Issue Premium/(Discount)
Total Sources

Uses
Project Fund
Costs of Issuance(1)
Total Uses

(1) Includes legal, municipal advisory, rating agency, printing fees , underwriter’s discount, premiums for the bond insurance policy, if applicable, and other miscellaneous costs of issuance.

BASE RENTAL PAYMENT SCHEDULE
Following is the annual schedule of Base Rental Payments due with respect to the Series 2024A Bonds, assuming no redemption prior to maturity:

Bond Year
(Ending April 1) Principal Interest Total

THE PROJECT
The Project and the Project Site
The Project consists of the design and construction of certain public capital improvements to be located on City-owned property located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility (the “PSF”), a four -level parking structure that will provide 284

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approximately 350 parking spaces (the “Parking Structure”), and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway.

The new PSF will replace the existing police headquarters building and include additional capacity to support anticipated expansion to 2039 projected staffing levels. It will consolidate the following functions: Police Administration and Administrative Services, Records, Evidence and Property, Communications, Investigations, Community Policing, SWAT, memorials for fallen officers, shared training amenities, and a larger temporary holding area. The new facility will be an “Essential Services” building providing 911 dispatch and other important public safety services, along with an Emergency Operations Center and modern ser ver room. The facility has been designed to achieve a LEED Silver sustainability designation.

The Parking Structure is intended to accommodate secured police fleet vehicle parking, staff personal vehicles, and some public parking. It is anticipated that the Parking Structure will accommodate approximately 350 vehicles, with the ultimate distribution of secure and non-secure parking to be determined during the design process.

Community feedback on the re -envisioned Civic Center Park is still in progress. Current design objectives focus on a green space that is safe and welcoming. The City intends for the new park facilities to provide flexibility for activation that is suitable for a wide range of uses and community amenities. The Civic Center Park will be designed to connect the existing and new park areas and will provide walking paths, shade trees, a memorial grove, and public art.

The project will proceed in two phases. Phase 1 includes design and construction of the new PSF and Parking Structure. The current schedule anticipates Phase 1 will be completed in the first quarter of 2026. The PSF is expected to be occupied by May 2026. When the new PSF is occupied, Phase 2 will start with the demolition of the existing police headquarters building then construction of the new re-envisioned Civic Center Park.

As discussed under the caption “ SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS— Substitution or Release of the Property— Release of Release Property After Completion of Project,” upon completion of Phase 1, the City will be entitled to release the Release Property, including the existing police headquarters building, which will be demolished and replaced with the reconfigured Civic Center Park as Phase 2 of the Project, from the Property leased under the Ground Lease and the Lease Agreement. The City-owned fire station located adjacent to the existing police headquarters is operated by the Orange County Fire Authority and will remain in place.

Construction of the Project
The City has e ntered into a Project Agreement dated as of April 1, 2024 (the “Project Agreement”), with Edgemoor Garden Grove Civic Center Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to develop the Project at the Project Site. Edgemoor’s parent company is Edgemoor Infrastructure & Real Estate, which provides design, finance, build, and maintenance services to public and private entities throughout the country. Completed projects in California include UC San Francisco’s Sandler Neuroscience Center and the City of Long Beach City Hall and Library.” Pursuant to the Project Agreement, Edgemoor is required to enter into a Design/Build Agreement with Clark Construction Group, LLC (the “Design Builder”) pursuant to which the Design Builder will complete the design of, and construct, the Project. The Project designers are AC Martin and Roth Sheppard.

Clark Construction Group is the largest privately-held construction firm in the United States, with active projects in 105 cities and approximately $1.8 billion in annual revenue from government, military and public safety projects.
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In the Lease Agreement, the City agrees that substantial completion and occupancy of Phase 1 of the Project will occur on or prior to May 2026 and substantial completion of Phase 2 of the Project will occur on or prior to May 2027, subject to excused delays pursuant to standard City procedures (each, a “Completion Date”).

The Project Agreement provides that, if Edgemoor fails to achieve substantial completion of the PSF and Parking Structure or the Civic Center Park by the respective Completion Date, after taking into account the effect any permitted extension, Edgemoor will pay to the City $10,000 per day for the PSF and Parking Structure with a maximum amount of $3,000,000 and, following substantial completion of the PSF and Parking Structure, $1,000 per day for the Civic Center Park with a maximum amount of $300,000 (such sums each, a “Delay Credit”), commencing in each case on the applicable d ate for substantial completion as set out in the Master Project Schedule and continuing on a daily basis until substantial completion of such Project component. The City agrees in the Lease Agreement that if and to the extent each Phase of the Project is not completed on or before each Completion Date, the City will seek and enforce Edgemoor’s obligation under the Project Agreement to pay Delay Credits (as defined in the Project Agreement) to the City.

The Project Agreement provides that Edgemoor, or the Design Builder (defined in the Project Agreement) on behalf of Edgemoor, will provide a performance bond and payment bond, each of which is sized to 100% of the Guaranteed Maximum Price under the design build agreement entered into between Edgemoor and the Design-Builder relating to the Project. Upon substantial completion of the PSF and Parking Structure and satisfaction of the waiver and release in requirements in the Project Agreement, Edgemoor may cause the amount of the performance bond and payment bond to be reduced to the value of the design and construction work for Civic Center Park.

See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGA L DOCUMENTS —THE LEASE AGREEMENT—ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT.” A variety of factors outside the control of the City could cause completion of the Project to be delayed.

Until Phase 1 of the Project is completed, the City will not be permitted to release the Release Property under the summary process described under t he caption “ SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS —Substitution or Release of the Property —Release of Release Property After Completion of Project” (although the City will be entitled to release or substitute the Property at any time, subject to the conditions described under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Substitution or Release of the Property—General”). The City cannot provide any assurance other than as described above that the Project will be completed on time or on budget.

Plan of Finance
Pursuant to the Project Agreement, Edgemoor has agreed to design, construct, and deliver the Project to the City for a guaranteed maximum price (“GMP”) of $152 million, consisting of a GMP of $140 million for the PSF and Parking Structure and $12 million for demolition of the existing police headquarters building and construction of Civic Center Park. The City expects to use the net proceeds of the Series 2024A Bonds to pay the anticipated cost of the Proje ct. Cost overruns, if any, for which the City is responsible under the Project Agreement will be paid by the City from available cash.

THE PROPERTY
General
The Property leased under the Ground Lease and the Lease Agreement will initially consist of the Project Site and the Release Property, each as described further below. The City has the right to substitute or release all or a portion of the Property subject to certain conditions precedent. Furthermore, the City expects to release the Release Property from the Ground Lease and the Lease Agreement promptly upon completion of Phase 1 of the Project. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDSSubstitution, or Release of the Property” and “THE PROJECT.” 286

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The Release Property
The Release Property consists of the properties listed in the following table and described in more detail below.

Facility Location and Use
Approx.

Building
Square
Footage
Approx.

Land
Square
Footage
Estimated
Building
Value(1)
Estimated
Land Value(2)
City Hall 11222 Acacia Parkway 42,849 26,582 $14,881,718 $ 2,100,000 Existing Police Headquarters 11301 Acacia Parkway 39,300 367,646(3) 10,183,709 25,236,215(4) Community Meeting Center 11300 Stanford Avenue 20,945 -(5) 5,658,644 -(5) Senior Center 11300 Stanford Avenue 10,406 -(5) 2,903,606 -(5) Municipal Services
Center/Public Works Yard 13802 Newhope Street 58,600 411,283 6,844,086 28,700,000 City Administrative Office
Building 11277 Garden Grove Blvd. 31,310(6) 80,148 6,079,240(7) 6,400,000 Garden Grove Park, including
Sports and Recreation Center
(Gymnasium) and Atlantis
Play Center
9301 Westminster Blvd;
13641 Deodara;
13630 Atlantis Way 15,925 1,568,160 5,747,929 94,089,600 Total 198,374 2,453,819 $46,551,003 $ 156,525,815

(1) Building value is the value listed on the City’s current Statement of Values for purposes of the City’s property insurance policy.
(2) Land values are estimated by the City. For properties with a commercial or residential zoning designation, the City estimated the land value based on recent appraisals or land transactions for properties in the City with similar zoning designations. For properties with an open space zoning designation, the City estimated the land value as if the property had the same zoning designation as property adjacent to the subject parcel. (3) Includes the land on which the Community Meeting Center and Senior Center are located. (4) Includes the value of the land on which the Community Meeting Center and Senior Center are located. (5) Land square footage and land value included in figures provided for Existing Police Headquarters. (6) Total square footage includes approximately 7,500 square feet of office space leased to OC Mental Health Assn. and Clark Construction Group. See footnote 7.
(7) Estimated building value has been reduced by 24%, to exclude value associated with an existing lease by the City to the OC Mental Health Assn. with respect to approximately 5,500 square feet of office space and a lease to be entered into with Clark Construction Group during construction of the Project, for approximately 2,000 square feet of office space, as described below.

Source: The City.

The City’s City Hall is a three story building, located at 11222 Acacia Parkway, was construct ed in 1978 and houses the City Manager’s office and the City’s Community Development, Community Services, Economic Development, Finance, Human Resources, and Information Technology Departments.

The City’s Existing Police Headquarters is located at 11301 Acacia Parkway, across Acacia Parkway from the City Hall building. The Existing Police Headquarters was constructed in 1971 and will be demolished as part of Phase 2 of the Project, after the new PSF is constructed and the Police operations have been moved to the new facility.

The City’s Community Meeting Center and Senior Center are located on Stanford Avenue, north of the Existing Police Headquarters. These buildings were built in 1977 and are used by the City to provide various community activities and programming.
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The Municipal Services Center/Public Works Yard , located at 13802 Newhope Street , consists of a large 411,283 square foot parcel of property improved with 11 buildings. The facilities at the Municipal Services Center/Public Works Yard site include offices used by the City’s Public Works, Water, Sewer, and Sanitation Departments, a 16,000 square foot warehouse, and a service station for City-owned vehicles. The buildings were constructed in 1962. The Municipal Services Center/Public Wor ks Yard is located in an area designated by FEMA as Flood Zone A, which indicates a 1% annual chance of flooding and a 26% chance of flooding over a 30‐year period. The City carries flood insurance as part of its property insurance coverage, but is not re quired to maintain flood insurance coverage under the Lease Agreement. Monitoring wells are located on the Municipal Services Center/Public Works Yard site to monitor a plume of groundwater contamination not associated with operations of the Municipal Services Center/Public Works Yard.

The City Administrative Office Building, located at 11277 Garden Grove Blvd., is a two story building built in 1980 which houses the Garden Grove Housing Authority, the City’s computer lab, overflow Police operations, and Garden Grove Channel 3 operations (a cable channel that now also produces videos for the City’s YouTube channel, including videos of City Council meetings and other City events). The City purchased the City Administrative Office Building in 2022, subject to a third party lease (the “OC Mental Health Assn. Lease”).

The OC Mental Health Assn. Lease relates to approximately 5,500 square feet of the total 31,310 square foot building and currently expires in 2026. The City may choose to extend the OC Mental Health Assn. Lease. The City also expects to lease approximately 2,000 square feet of office space to Clark Construction Group during the construction period for the Project (the “Clark Construction Group Lease”). The OC Mental Health Assn.

Lease and the Clark Construction Group Lease are “Permitted Encumbrances” under the Lease Agreement and therefore the office space subject to these leases is not included in the Property leased by the Authority to the City under the Lease Agreement. The building value for the City Administrative Office Building set forth in the table above has been reduced pro -rata based on the square footage of the premises subject to the OC Mental Health Assn. Lease and the Clark Construction Group Lease.

Garden Grove Park is an approximately 36 acre city park located at 9301 Westminster Boulevard. The Garden Grove Sports and Recreation Center and Atlantis Play Center are also located at Garden Grove Park.

The Sports and Recreation Center, located at 13641 Deodara, is an approximately 15,925 square foot gymnasium built in 2005. The Atlantis Play Center is a children’s park, playground, and water park/splash pad located at 13630 Atlantis Way. The City acquired Garden Grove Park from the United States of America in 1959 pursuant to a quitclaim deed which reserves to the federal government the right, during the existence of any national emergency declared by the President or Congress, to the full, unrestricted possession, control and use of the premises (or a portion thereof); provided that the federal government must pay “fair rental” for the portion of the premises so used. The quitclaim deed does not provide a method for calculating the fair rental to be paid by the federal government in the event this property is used by the federal government as permitted by the quitclaim deed. In the event the federal government were to exercise this right, which it has not done in the past, the City’s obligation to pay Base Rental Payments would be abated in part, as provided under the caption “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS —Abatement.” In such case, the Lease Agreement requires rental payments received by the City from the federal government to be applied in the same manner as insurance and condemnation proceeds.

The Project Site
The Project Site consists of approximately 4.12 acres and is currently improved with a parking lot and a grassy park and pond. The Project Site is the future location of Phase 1 of the Project, consisting of the PSF and an approximately 350-space, four-level Parking Structure. Upon substantial completion and occupancy of Phase 1 of the Project, the City is permitted by the Lease Agreement to delete and release the Release Property from the Lease Agreement; at that time, the Project Site, including the PSF and Parking Structure, will constitute the entire Property under the Lease Agreement.

For more information regarding the Project Site, see the caption “THE PROJECT.” Furthermore, the Lease Agreement provides that the Authority may provide for release and deletion of the Release Property from 288

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the Property such that the Project Site constitutes the entire Propert y upon completion of the Project and the satisfaction of certain requirements under the Lease Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDSSubstitution, Addition and Removal of Property.”

THE AUTHORITY
The Authority was established pursuant to the provisions of Articles 1, 2 and 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of Ca lifornia (the “Act”) and a Joint Exercise of Powers Agreement dated as of June 22, 1993 (as amended, the “JPA Agreement”), between the City and the Garden Grove Agency for Community Development. By an Amendment No. 1 to the JPA Agreement dated as of March 28, 2006, the Garden Grove Sanitary District became a member of the Authority and by an Amendment No. 2 to the JPA Agreement dated November 1, 2020, the Successor Agency to the Garden Grove Agency for Community Development, as successor to the Garden Grov e Agency for Community Development, was removed as a member of the Authority. The City Council of the City is appointed as the Governing Board of the Authority and the Authority is administered by the City’s staff. Under the Joint Exercise of Powers Agreement and Article 4 of the Act, the Authority is authorized to assist in the financing of public capital improvements. The Authority has acted as a conduit issuer for the City for a variety of financings.

THE CITY OF GARDEN GROVE
General
The City is located in central Orange County, California, approximately twenty-five miles southeast of downtown Los Angeles, and encompasses an area of approximately 17.8 square miles. As of January 1, 2023, the City had an estimated population of 171,183 and was the fifth largest city in the County and the 30th largest City in the State. The community of Garden Grove was founded in 1874 and t he City was incorporated as a general law city on June 18, 1956. At the present time, the City is essentially built out. For additional economic and demographic information regarding the City, see APPENDIX A  “ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING THE CITY OF GARDEN GROVE.”
City Council
The City is a general law city that operates under the council-manager form of government. Six members of the City Council are elected by voters within their respective districts to a four-year term, and are limited to two consecutive terms. Elections for these six districts are staggered so that only three seats are elected during a single election cycle. However, during every election cycle, the Mayor is elected by the voters of the City at-large for a two-year term, with a limit of four consecutive two -year terms. The regularly scheduled public meetings of the City Council are currently on the second and fourth Tuesday of the month.

The City Council is responsible for, among other things, establishing local law and policies through the enactment of ordinances and resolutions, adopting the City budget, appointing members to advisory municipal commissions and activities. Members of the City Council also serve from time to time on regional committees and boards whose policies may affect the City. The City Council appoints the City Manager , who heads the executive br anch of the government, implements City Council directives and policies , and manages the administrative and operational functions through the various departmental heads. The City Council also appoints the City Attorney.

The members of the City Council and the current expiration dates of their respective terms are set forth in the table below.
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CITY OF GARDEN GROVE
City Council
Name District Term Expires
Steve Jones, Mayor At-Large November 2024
Cindy Ngoc Tran, Mayor Pro Term 3 November 2026
George S. Brietigam III, Council Member 1 November 2026 John R. O’Neill, Council Member 2 November 2024
Joe DoVinh, Council Member 4 November 2026
Stephanie Klopfenstein, Council Member 5 November 2024
Kim B. Nguyen-Penaloza, Council Member 6 November 2024

Source: City of Garden Grove.

City Management
A summary of certain City executive staff are described below.

City Manager. The City Manager has the responsibility for hiring the City’s department directors and for administering the City’s programs in accordance with the policies adopted by the City Council. The mission of the City Manager ’s Office is to assist the City Council in establishing community goals and policies and provide leadership and direction in the administration of all City Departments and services.

The City Manager ’s office includes legislative support, policy implementation, budget development, strategic planning, liaison, and ombudsman services to community constituencies and legal service functions of the City. Additionally, the City Manager’s office manages the City Council meeting agenda, elections, and public records. The office also monitors and responds to federal and state legislative issues, and represents the City’s interests throughout the region and beyond. The City Clerk function is structured within the City Manager’s office.

The City’s current City Manager is Lisa L. Kim. Ms. Kim began serving as the City Manager of the City in March 2023, and joined the City in April 2016 as the Community and Economic Development Director.

Since 2019 and until her appointment as City Manager, Ms. Kim carried out dual roles as Assistant City Manager while overseeing the Office of Economic Development, Planning Services, and the Building and Safety Division.

Ms. Kim holds a Master’s Degree in Public Administration from the University of Massachusetts Global, a member of the Chapman University System; and a Bachelor of Science in Urban and Regional Planning from California State Polytechnic University, Pomona.

Finance Director. The Finance Director of the City assumes the full management responsibilities for all Finance Department services and activities, including finance, budgeting, treasury, accounting, purchasing, payroll, revenues, risk management, and customer service.

The City’s current Finance Director is Patricia Song. Ms. Song began serving as the Finance Director of the City in April 2019. Prior to joining the City, Ms. Song served as the Manage r of Fiscal Services for the City of Irvine, California. Ms. Song holds Master of Business Administration degrees in both accounting and in management information systems from California State University, San Bernardino and is also a certified public accountant.

Employee and Employee Relations
For fiscal year 2023 -24, the City has approximately 569 full -time authorized positions, of which approximately 520 are filled. The City also employs approximately 143 part -time employees. In accordance with the provisions of California Government Code Section 3500, the City participates in labor negotiations with 290

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its employee associations . The result of the negotiations processes is memorialized in memoranda of understanding (each an “MOU”) reached between the City and the City employee associations. The table below lists the City’s four employee associations and the approximate membership as of February 2, 2024, as well as the unrepresented executive employees:

Unit/Affiliation
Contract
Expiration
Date
Number of
Members(2)
Orange County Employee’s Association, Garden Grove Chapter June 30, 2025 169 Orange County Employee’s Association, Garden Grove Employee’s League June 30, 2025 86 Garden Grove Police Association June 30, 2025 166
Garden Grove Police Management Association June 30, 2025 10 Unrepresented Management(1) N/A 89
Total 520

(1) Represents the City’s central and middle management employees, which are not represented by any bargaining unit. (2) Represents filled positions.

Source: City of Garden Grove.

Risk Management
For more information with respect to the insurance requirements under the Lease Agreement, see the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 BONDS—Insurance” in this Official Statement.

The City utilizes a program to self-insure for workers’ compensation liability for the first $1,000,000, per occurrence, for injury or occupational illness to City employees pursuant to State law. The City contracts with a third party who administers the program and acts as the representative of the City in claims hearings and litigation. Excess coverage is placed with a joint powers authority for losses from $1,000,000 up to the statutory limit per occurrence. This self -insurance program is accounted for in the Workers’ Compensation internal service fund in the City’s audited financial statements. There is an estimated liability of $37,481,873 for workers’ claims outstanding including claims incurred but not reported on June 30, 2023, which has been included as liabilities in the Workers’ Compensation internal service fund in the City’s audited financial statements for the fiscal year ended June 30, 2023.

The City also has a self-insured program for its tort and civil liabilities. The City is self-insured for the first $2,000,000 per occurrence. Excess liability insurance is carried thereafter to $33,000,000 per occurrence with commercial insurers. Claims administration and adjusting services are provided by contract with a third - party administrator specializing in public entity liability. Representation in matters of litigation is performed through the retaining of outside law firms and is supervised by the City Attorney. The City’s self -insurance program is accounted for in the Risk Management internal service fund in the City’s audited financial statements.

The City estimates a general liability for claims outstanding, including claims incurred but not reported, on June 30, 2023, in the amount of $6,860,038 which has been included as liabilities in the Risk Management internal service fund in the City’s audited financial statements for the fiscal year ended June 30, 2023.

The City is a defendant in various lawsuits. Attempts are made to settle these cases or proceed to trial as recommended by the City’s attorneys. The City believes that it has meritorious defenses to the allegations contained in the cases. However, the City has accrued and reserved reasonable amounts based on the actuarial analysis and attorney recommendations to cover the potential lo sses to the extent the exposures are deemed probable and estimable.
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Settled claims have not exceeded any of the City’s coverage amounts in any of the last three fiscal years and there were no reductions in the City’s insurance coverage during the year ende d June 30, 2023. For additional information about the City insurance policies, see Note 11 to the City’s audited financial statements for fiscal year 2022-23 attached hereto as Appendix C.

CITY FINANCIAL INFORMATION
Accounting and Financial Reporting
The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”).

The City’s government-wide financial statements (i.e. the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment; (2) operating grants and contributions that are restricted to meeting the operational requirement of a particular function or segment; and (3) capital grants and contributions that are restricted to meeting the capital requirement of a particular function or segment and other miscellaneous revenues that directly benefit a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds and the fiduciary fund. Major governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the pr oprietary fund and fiduciary fund financial statements.

Under the economic resources measurement focus, all (both current and long -term) economic resources and obligations of the reporting government are reported in the government -wide financial statement s. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange -like transactions are recognized when the exchange takes place.

Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. Grant funds received before the revenue recognition criteria have been met are reported as unearned revenues.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government c onsiders revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as in accrual accounting. However, debt service expenditures are recorded only when payment is due.

Property taxes, franchise taxes, licenses, revenues from other agencies and interest associated with the current fiscal year are all considered to be susceptible to accrual and so have been recognized as revenues of the 292

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current fiscal year. All other revenue items are considered to be measurable and available only when cash is received by the government.

The General Fund is the City’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in other funds. The City also reports four other major funds, a Navigation Center special revenue fund, a Water Utility enterprise fund, a Sewage Collection enterprise fund and a Housing Authority enterprise fund. The C ity also reports nonmajor governmental and proprietary funds consisting of the various special revenue, capital project, and enterprise funds, as well as internal service funds (which account for workers’ compensation, fleet management, employee benefits, information systems, warehouse operations, telephone system, risk management, communication replacement, and building and structure rehabilitation services provided to City departments on a cost reimbursement basis ) and a private-purpose trust fund which accounts for the fiduciary responsibilities of the Successor Agency to the Garden Grove Agency for Community Development. For more information regarding the other governmental and proprietary funds of the City, see Note A.3 to the City’s audited financial statements for fiscal year 2022-23 attached to this Official Statement as Appendix C.

As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments -in-lieu of taxes and other charges between the government’s enterprise funds and various governmental funds. Elimination of these charges would distort the direct costs and program revenues reported for the function concerned.

Amounts reported as program reven ues include (1) charges to customers or applicants for goods, services, or privileges provided; (2) fines, forfeitures and penalties; (3) grants and contributions that are restricted to meeting the operational or capital requirement of a particular function; and (4) other miscellaneous revenues that directly benefit a particular function and do not fit into any other category. General revenues include all taxes, investment income, and gain on sale of assets.

Proprietary funds distinguish operating revenues and expenses from non -operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as non - operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

Because the General Fund is the City’s primary operating fund and accounts for all financial resources of the general government, except those required to be accounted for in other funds, the City expects to pay Base Rental Payments from amounts in the General Fund. Tables 3 and 4 below set forth certain historical and current fiscal year budget information for the General Fund. Tables 5 and 6 show the audited five -year trend of the General Fund’s revenues and expenditures and balance sheet. Information on the other governmental funds of the City as of June 30, 2023 is set forth in Appendix C.

City Component Units and Discrete Component Units
General. GAAP requires that the City’s financial statements present the City (the primary government) and its component units. Component units generally are legally separate entities for which a primary government is financially accountable. Financial accountability ordinarily involves meeting both of the following criteria:
the primary government is accountable for the potential component unit (e.g. the primary government appoints the voting majority of its board) and the primary governmen t is able to impose its will upon the potential 293

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component unit, or there is a possibility that the potential component unit may provide specific financial benefits or impose specific financial burdens on the primary government.

The following entities are considered component units and are included in the City’s reporting entity for purposes of the City’s financial statements because of the significance of their operational or financial relationships with the City.

Garden Grove Housing Authority. The Garden Grove Housing Authority (the “Housing Authority”) was established in October 1975, pursuant to the provisions of the Housing and Community Development Act of 1974 and is reported as an enterprise fund as if it were part of the primary government because the governing board is comprised of the City Council, although acting in a different capacity, and two Housing Authority tenants. The Housing Authority governing board approves the Housing Authority budget and the City provides staffing.

Garden Grove Sanitary District. The Garden Grove Sanitary District (the “Sanitary District”) began its operations in 1924 as a special district operating under the authority of the State of California. The Health and Safety Code of California (the Sanitary District Act of 1923) is the governing law. The Garden Grove Sanitary District provides the City, a portion of the City of Santa Ana and unincorporated County areas with sewer maintenance services including cleaning of sewage collection line and inspection of sewage lines built within the Sanitary District by developers. The City has an agreement with Republic Services to provide an exclusive franchise for Solid Waste Handling Services for residents and commercial establishments within the Sanitary District. The Sanitary District became a subsidiary district and component unit of the City on May 30, 1997. The Sanitary District is reported as two enterprise funds, the Sewage Collection enterprise fund and Solid Waste Disposal enterprise fund as if it were part of the primary government because the City Council, although acting in a different capacity, is the governing board. City Council members approve the Sanitary District budget and the City provides staffing.

Garden Grove Public Financing Authority . The Authorit y’s financial data and transactions are included within enterprise funds for purposes of the City’s financial statements. The Authority is administered by the Board who are the members of the City Council and the Mayor. Council members approve the Authority budget and the City provides staffing. For more information regarding the Authority, see the caption “THE AUTHORITY.”
Financial Policies
General. The City Council has adopted a comprehensive set of financial management policies to provide for: (i) budget policies and guidelines; (ii) revenue guidelines; (iii) debt management policy; (iv) General Fund reserve policy; (v) pension funding policy; (v i) investment policy; (vi i) purchasing policies; (viii) infrastructure funding policy; ( ix) capital asset renewal and replacement reserves policy; ( x) enterprise fund business principles; and (xi) financial practices and guidelines. A summary of certain of these City Council policies is set forth below.

General Fund Reserve Policy. The City Council has adopted a General Fund Reserve Policy, which provides for three categories of reserves of the City’s committed fund balance to be set aside to address unforeseen emergencies or disasters, significant changes in the economic environment, and key initiative s including economic development, infrastructure and capital projects: a Catastrophic Reserve, a Stability Reserve and a Designated Revenues Reserve. The Catastrophic Reserve, if and when funded, is to be used to mitigate costs associated with public emergencies, such as natural disasters or other unforeseen catastrophic events, and are not to be used to meet operational shortfalls or to fund new programs or personnel. The Stability Reserve is maintained to mitigate financial risks associated with unexpec ted revenue shortfalls due to changes in the economic environment. The Stability Reserve may be used if authorized by a two-thirds vote of the City Council.

Finally, the City Council may designate to the Designated Revenues Reserve certain one-time revenue generated from non-operating activities outside the City’s normal operations , including but not limited to proceeds from 294

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sale of City property, settlement, contribution, or one-time project and/or transaction. Funds in the Designated Revenues Reserve m ay be appropriated by a two -thirds vote of the City Council at the request of the City Manager. Funds in the Designated Revenues Reserve not appropriated at fiscal year -end are reported as Committed Fund Balance.

The City maintains a minimum level of 16.7% (or two months) of budgeted operating revenues adopted for the same fiscal year, with a goal of reaching 30% over time. This target reserve level does not include the amount set aside for Designated Revenues Reserve (i.e. one time revenues). The 30% targ et reserve level is allocated first to the Stability Reserve (the first 16.7%) and then to the Catastrophic Reserve (up to 13.3%).

The City ended fiscal year 2022-23 with $25,700,000 (or approximately 16.4% of adopted General Fund revenues) in the Stabil ity Reserve, and the City’s fiscal year 2023 -2025 biennial budget projects balances of $27,928,000 and $28,660,000 at the end of fiscal year 2023 -24 and fiscal year 2024 -25, representing approximately 16.7% of the adopted General Fund revenue for the respe ctive fiscal years. The City is not currently funding the Catastrophic Reserve.

Five-Year Plan. The Garden Grove Municipal Code requires the City Manager to prepare and submit to the City Council a proposed five-year plan for the City. The five-year plan includes the five-year forecasts and their allocation with regard to resources, i.e., financial, physical, managerial, and technical. The City develops a five -year capital improvement plan , which is incorporated as part of the biennial budget adoptio n process. Additionally, a long-range General Fund forecast is presented to the City Council periodically. The most recent five-year forecast on the City ’s General Fund was presented to the City Council in January 2024.

Under the base scenario, the City projected that both revenues and expenditures would increase each year through fiscal year 2027-28, with revenues exceeding expenditures in each such fiscal year. The City’s revenues and expenses fluctuate from year to year, and no assurance can be provided that the assumptions on which the five- year plan are based will be realized. See Table 5 and Table 7 for a five-year history of the City’s revenues and expenditures and a five year history of the City’s tax revenues broken down by source, respectively.

Pension Funding Policy. The City has adopted a Pension Funding Policy for the purpose of establishing a systematic and disciplined method to accumulate resources to be used towards funding pension liability and future benefit payments, and to provide reasonable assurance that the cost of pension benefits will be funded in an equitable and sustainable manner. In implementation of the Pension Funding Policy, the City established a Section 115 Trust; as of January 31, 2024, the trust carried a market value of approximately $4.3 million. See the caption “ —Retirement System—Section 115 Pension Trust .” The City may consider the issuance of pension obligation bonds to refinance all or a portion of the City’s unfunded pension liability in the future. See the caption “—Retirement System—Pension Obligation Bonds.” Debt Management Policy. The City has adopted a debt management policy (the “Debt Management Policy”) in compliance with California Government Code Section 8855. The Debt Management Policy generally provides that long -term debt may be issued to finance or refinance the constructio n, acquisition, and rehabilitation of capital improvements and facilities, equipment, and land to be owned and/or operated by the City and that the City will primarily consider the use of debt financing for capital improvement projects when the project’s useful life will equal or exceed the term of the financing or otherwise comply with federal tax law requirements, and when resources are identified sufficient to fund the debt service requirements. The Debt Management Policy also generally provides that short-term financing, such as tax and revenue anticipation notes, may be considered for prudent cash management purposes and conduit financing and as an interim source of funding in anticipation of long -term borrowing. The Debt Management Policy also includ es a policy implementing disclosure procedures in compliance with federal securities laws. The City’s Debt Management Policy is reviewed by City staff periodically to ensure compliance with State and Federal laws.

Infrastructure Funding Policy. The City has adopted an Infrastructure Funding Policy, which sets a framework for policy standards and provides direction to systematically address the infrastructure deficit. It calls out several critical fiscal and asset planning or management practices to be developed over the next few 295

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years, including a Capital Replacement Reserves Policy, asset management plans for each major infrastructure type, and a comprehensive infrastructure plan.

Capital Asset Renewal and Replacement Reserves Policy. The City adopted a Capital Asset Renewal and Replacement Reserves Policy to ensure adequate funding for the renewal and replacement of the City’s capital assets to protect the public investment and achieve the assets’ maximum useful life. The Policy is intended to promote proactive financial management by increasing awareness of the ongoing need for capital replacement and encouraging long-term capital planning. Initial funding of $3.0 million was made at the end of fiscal year 2022-23. The City established a Building and Structure Rehabilitation internal service fund in the adopted fiscal years 2023-2025 biennial budget, and $600,000 per year internal service charges was programmed in the budget.

Investment Policy . The City invests its funds in accordance with the City’ s investment policy (the “Investment Policy”). In accordance with Section 53600 et seq . of the California Government Code, investments and cash management are the responsibility of the City Treasurer. The City’s Investment Policy sets forth the policies and procedures applicable to the investment of City funds and designates eligible investments. The Investment Policy sets forth a stated objective, among others, of ensuring the safety of invested funds by limiting credit and market risks. Funds are invested in the following order of priority:
 Safety;
 Liquidity; and
 Yield.

Eligible investments are generally limited to : bankers acceptances; bonds issued by the City; bonds, notes or other evidence of indebtedness of any local agency within California, or st ate warrants, or Treasury Notes or Bonds of California; bonds, notes or other evidence of indebtedness in any of the other 49 states, in addition to California; commercial paper; discount notes or notes issued by agencies of the Federal Government; diversified management companies, as defined by Section 53601(l) of the California Government Code; medium-term notes issued by corporations; mortgage -backed pass-through securities, collateralized mortgage obligations and asset -backed securities; negotiable cer tificates of deposit issued by a nationally or state - chartered bank, a federal association, or a state licensed branch of a foreign owned bank (insured by Federal Government); repurchase agreements; supranationals; State of California Local Agency Investme nt Fund or other local government investment pools established by public entities; and United States Treasury Notes, Bonds, Bills, or other certificates of indebtedness backed by the United States Government. In many cases, the eligible investments are subject to certain maximum maturity and ratings requirements , as well as certain maximum portfolio limitations for any particular category of eligible investments. Subject to certain constraints set forth in the Investment Policy, the authority to direct the City’s investments is delegated to the Finance Director. The Finance Director is required to file a monthly investment report with the City Council which provides a clear picture of the status of current investments , including comments on the fixed inco me markets and economic conditions, discussions regarding restrictions on percentages of investments by category, possible changes in the portfolio structure and significant changes to investment strategies.

At June 30, 2023, the City had an investment portfolio with a market value of $435,755,837 and at January 31, 2024 the City had an investment portfolio with a market value of $403,849,487 . The City used approximately $20,828,075 from its investment portfolio to defease the Garden Grove Public Financ ing Authority Lease Revenue Bonds, Series 2015A in December 2023. See Note 17 to the City’s audited financial statements for fiscal year 2022 -23 attached hereto as Appendix C for additional details. The following table presents a summary of the City’s investment portfolio as of such dates. 296

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TABLE 1

CITY OF GARDEN GROVE

SUMMARY OF INVESTMENTS
(AS OF JUNE 30, 2023 AND February 29, 2024)
Investment Type
Market Value
As of June 30, 2023 As of February 29,
2024
U.S. Treasury $ 47,990,922 $ 79,132,100
U.S. Agency Securities 110,907,476 110,328,287
Money Market Funds 232,929 4,060,420
Commercial Paper 27,180,556 19,289,888
Corporate Bonds 71,065,408 55,179,428
Municipal Bonds 46,900,800 45,654,291
Supranationals 17,997,277 18,438,193
Local Agency Investment Fund 98,736,470 42,156,865
Restricted cash and investments
Investment Pool (PARS)(1) 3,218,497 4,388,055
Held by fiscal agent
Money Market Funds 11,525,502 14,944,380
Total $ 435,755,937 $ 393,571,907

(1) PARS funds are in a Section 115 trust available only for pension costs. See the caption “—Retirement System—Section 115 Pension Trust.”
Source: City of Garden Grove.

For additional information with respect to the City’s cash and investments, see Note C.1 to the audited financial statements for fiscal year 2022-23 attached to the Official Statement as Appendix C.

Budget Procedure, Current Budget and Historical Budget Information Budget Procedure. The City Council adopts a biennial budget for all City funds for each biennium, which begins on July 1 of each odd-numbered year. Annual appropriations are approved by the Council for each year of the biennial budget period. The City Council has the l egal authority to amend the budget at any time during the fiscal year. The City presents a mid-cycle budget update to the City Council in June of the first fiscal year of the biennial budget. The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) for the City’s operating budget is at the fund lev el. The City Council may amend the budget to increase or decrease appropriations or move appropriations between funds. The City Manager is authorized to transfer appropriations within a fund between various programs and/or departments.

Fiscal Year 2023-25 Adopted Budget. The City’s biennial budget for the 2023-25 period (the “2023- 25 Budget”) was approved by the City Council on June 13, 2023 and presented a balanced budget for both fiscal years. The 2023-25 Budget projects General Fund revenues in fiscal year 2023-24 to be approximately $167.2 million, a decrease of approximately 6.4% from fiscal year 2022-23 audited amounts, and approximately $171.6 million in fiscal year 2024 -25. The 2023-25 Budget also includes one -time funding amounts from fiscal ye ar 2022-23 surpluses of approximately $1.6 million in fiscal year 2023-24 and $2.6 million in fiscal year 2024-25.

The 2023-25 Budget projects General Fund expenditures in fiscal year 202 3-24 to be approximately $ 168.9 million, which represents an increas e of approximately 5.9% from fiscal year 2022-23 audited amounts, and appropriately $174.3 million in fiscal year 2024-25.
297

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The City’s three primary General Fund revenue sources are property taxes, sales taxes and hotel visitor’s taxes, which collectively account for approximately 8 7% of the City’s General Fund revenues in the 2023-25 Budget. The 2023-25 Budget projects that property taxes will grow at approximately 4.7% percent in fiscal year 2023-24 and 3.2% in fiscal year 2024 -25. Sales tax receipts are projected to increase by approximately 0.1% and 2.0% in fiscal years 2023-24 and 2024-25, respectively. While hotel visitor’s tax revenues were budgeted at a lower level compared to the audited fiscal year 2022-23 amounts, based on the first seven months of actual data for fiscal year 2023-24, hotel visitor’s tax receipts are projected to continue to generate revenue at the fiscal year 2022-23 level, which would result in an approximately $3.0 million budget surplus in fiscal years 2023-24 and 2024-25 in each year. Notable increases in budget expenditures in the 2023-24 Budget include the addition of 17 full-time positions; contractual funding for Be Well, which provides mobile mental health services; flood channel repair and improvements; funding to supplemental building, code enforcement and planning services ; funding for economic development and engineering; construction and grant development; r eplacement of critical police equipment; enhancements to the City’s public facilities and infrastructure ; several information technology upgrades/enhancements; c ontinuation of the City’s Pavement Management Plan acceleration program; t raffic and parking enforcement ; a dditional funding for trees and flood control maintenance; and resources for the Sidewalk, Curb and Gutter Cleanup program.

Because certain of the City’s General Fund revenues, such as sales taxes and hotel visitors tax revenues, can be unpredictable, the City uses prior year budgeted revenues (instead of actual revenues) to budget the revenues for its next biennial budget. For the fiscal years presented in Tables 3, 4, and 5, this approach resulted in budgeted revenue shortfalls and actual revenue surpluses. Budgeted revenues are derived from City estimates, with the exception of sales taxes which are estimated by a consultant retained by the City for this purpose.

Capital Improvement Program . The City’s adopted 202 3-2025 biennial budget includes the City’s Capital Improvement Plan (the “CIP”), which consists of long-range (five year) capital projects approved by the City Council. Capital funds account for the acquisition, construction, maintenance, and rehabilitation of fixed assets or capital projects, such as land, buildings, streets, curbs, gutters, sidewalks, drainage, water/sewer systems, a nd equipment. The City’s CIP projects are grouped into seven different categories: Street Improvements, Traffic Improvements, Park Improvements, Community & Economic Development Improvements, Facility Improvements, Water Improvements, and Sewer Improvements. The following table sets forth the City’s projected Five-Year CIP expenditures by CIP category. Total CIP appropriations for the five years total $172.9 million and appropriations for fiscal years 2023-24 and 2024-25 are approximately $67.7 million and $30.2 million, respectively. The City does not expect to issue new debt to finance any of the projects described in this paragraph and the following table.

The table below does not include any costs of the Project because such amounts were not included in the CIP; however, the City’s adopted 2023 -25 biennial budget includes approximately $18.1 million from the General Fund to be budgeted towards a portion of the costs of the Project (all or a portion of which will be reimbursed using proceeds of the Ser ies 2024A Bonds). The Project is expected to be included in the Capital Improvement Program as part of the mid -cycle budget update. See the caption “THE PROJECT —Plan of Finance.”
298

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TABLE 2

CITY OF GARDEN GROVE

CAPITAL IMPROVEMENT PLAN
(FISCAL YEARS 2023-24 THROUGH 2027-28)
Project Description
Fiscal Year
2023-24(4)
Fiscal Year
2024-25
Fiscal Years
2025-26 through
2027-28 Total
Street Improvements(1) $ 27,347,522 $ 10,620,059 $ 28,410,735 $ 66,378,316 Traffic Improvements(2) 1,286,500 1,050,000 1,500,000 3,836,500 Park Improvements(2) 4,075,000 745,000 1,795,000 6,615,000 Community and Economic
Development Improvements(3) 8,234,867 55,000 165,000 8,454,867 Facility Improvements(2) 300,000 -- -- 300,000
Water Improvements(2) 15,786,407 10,205,000 25,884,000 51,875,407 Sewer Improvements(2) 10,709,216 7,500,000 17,260,000 35,469,216 Total $ 67,739,512 $ 30,175,059 $ 75,014,735 $ 172,929,306

(1) Payable from various funding sources, including General Fund expenditures for fiscal years 2023-24, 2024-25, and 2025-26 through 2027-28 of approximately $7.4 million, $420,000, and $702,000, respectively. (2) Not expected to be paid from the General Fund.
(3) Payable from various funding sources, including General Fund expenditures in fiscal year 2023 -24 of approximately $1.0 million. Not expected to be paid from the General Fund after fiscal year 2023-24. (4) As of March 31, 2024, the City has expended approximately $27 million on projects included in the CIP for the current Fiscal Year.

Source: City of Garden Grove.

Historical and Preliminary Budget Information . Set forth in Table s 3 presents the adopted General Fund budgets for fiscal years 2021-22 and 2022-23 and the audited results for fiscal year s 2021-22 and 2022-

23. Table 4 presents the adopted General Fund budget for fiscal years 2023 -24 and 2024 -25, with budgeted expenditures broken down by department and by type. The General Fund budgets and actuals shown in Tables 3 and 4 below do not reflect the applicat ion of GAAP and therefore differ in certain respects to the audited General Fund Statement of Revenues, Expenditures and Change in Fund Balance shown in Table 5 below. 299

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TABLE 3

CITY OF GARDEN GROVE

GENERAL FUND BUDGETS TO ACTUAL COMPARISONS (ON A BUDGETARY BASIS)

Adopted
Fiscal Year
2021-22 Budget
Audited
Fiscal Year
2021-22 Results
Adopted
Fiscal Year
2022-23 Budget
Audited
Fiscal Year
2022-23 Results

REVENUES
Taxes $ 115,783,000 $ 147,355,942 $ 142,174,000 $ 159,930,340 Licenses and permits 3,225,000 2,704,550 3,200,000 3,072,537 Fines, forfeits and penalties 2,300,000 1,859,264 1,800,000 2,305,388 Investment earnings 1,152,684 (4,217,678) 1,421,358 709,999 Charges for current services 5,877,401 7,670,580 4,482,036 7,724,342 From other agencies(1) 27,000,000 24,654,556 -- 2,797,420 Other revenues -- 3,367,097 3,565,704 2,069,957 Total revenues $ 155,338,085 $ 183,394,311 $ 156,643,098 $ 178,609,983

EXPENDITURES
Current
Fire $ 30,158,332 $ 26,975,339 $ 31,880,332 $ 30,933,358 Police 70,385,534 68,181,105 76,397,366 72,454,478
Traffic Safety 2,709,761 2,708,284 3,036,178 2,788,572
Public right of way(2) 25,663,584 6,781,007 8,259,291 11,102,502 Community buildings(2) 21,748,677 3,713,197 4,602,787 4,273,408 Community services 5,025,860 4,805,877 5,435,391 5,304,575 Economic development 1,003,112 1,778,841 1,543,391 1,756,237 Parks and greenbelts 1,623,917 1,601,155 1,796,988 1,427,596 Community planning and development 7,692,738 7,136,889 19,011,305 17,793,188 Municipal support 9,282,729 8,856,198 9,178,641 9,898,298 Debt Service(3)
Principal retirement 515,000 541,101 540,000 579,320
Interest 1,092,317 1,093,121 1,063,920 1,150,820 Total expenditures $ 176,901,561 $ 134,172,114 $ 162,745,876 $ 159,462,352

Excess (deficiency) of revenues over (under)
expenditures(2)
$ (21,563,476) $ 49,222,197 $ (6,102,778) $ 19,147,631

OTHER FINANCING SOURCES (USES)
Transfers in $ 1,386,749 $ 1,443,302 -- $ 4,719,612 Transfers out (1,542,282) (831,837) -- (9,092,262)
Proceeds of leases -- -- -- 277,888
Proceeds from sale of capital assets -- -- -- 5,989,694 Total other financing sources (uses) $ (155,536) $ 611,465 -- $ 1,894,932

Net Change in fund balance $ (21,719,012) $ 49,833,662 $ (6,102,778) $ 21,042,563 Fund balance, beginning of year $ 112,431,637 $ 112,431,637 $ 162,265,299 $ 162,265,299 Fund balance, end of year $ 90,712,625 $ 162,265,299 $ 156,192,521 $ 183,307,862

(1) Includes amounts received by the City from the State and Local Fiscal Relief Fund as part of the American Rescue Plan Act. (2) The budgeted deficiency of revenues under expenditures for fiscal years 2021-22 and 2022-23 results from inclusion of one- time capital projects as previously appropriated and carried over in the City’s adopted fiscal year 2021-22 and 2022-23 biennial budgets.
(3) Includes debt service with respect to the 2015 Lease Revenue Bonds, which were defeased in December 2023. See the caption “—Indebtedness.”
Source: City of Garden Grove Audited Financial Statements for fiscal years 2021-22 and 2022-23. 300

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TABLE 4

CITY OF GARDEN GROVE
ADOPTED FISCAL YEAR 2023-25 BIENNIAL BUDGET (ON A BUDGETARY BASIS)(1)

Adopted
Fiscal Year
2023-24 Budget
Adopted
Fiscal Year
2024-25 Budget

REVENUES
Taxes $ 151,347,800 $ 155,370,000
Licenses and permits 2,497,400 2,520,100
Fines, forfeits and penalties 1,924,500 2,045,900
Investment earnings 1,488,700 1,554,700
Charges for current services 7,105,000 7,171,000
From other agencies -- --
Other revenues(2) 4,522,200 5,613,700
Total revenues $ 168,885,600 $ 174,275,400

EXPENDITURES BY DEPARTMENT
Fire $ 31,759,700 $ 32,966,400
Police 80,552,400 84,531,600
City Administration 4,222,400 4,392,600
City Attorney 1,022,600 1,073,800
Community Development(3) 6,447,400 6,845,800
Economic Development & Housing(3) 6,926,400 6,926,400
Community Services 6,833,200 7,092,200
Finance 4,118,800 4,294,400
Human Resources 2,303,500 2,352,900
Information Technology 833,000 852,600
Public Works 21,621,200 20,902,500
Non Departmental 2,245,000 2,246,700
Total expenditures by department $ 168,885,600 $ 174,275,400

EXPENDITURES BY TYPE
Salaries & Wages $ 106,304,600 $ 112,148,200
Contractual Services 41,835,100 42,571,300
Commodities 2,478,100 2,410,000
Internal Service Funds/Debt(4) 15,562,300 16,251,800
Capital 1,764,900 --
General Fund Transfers 940,600 894,100
Total expenditures by type $ 168,885,600 $ 174,275,400

(1) Based on the City’s adopted fiscal year 2023-25 biennial budget. Department Budgets include operating budget, internal service funds and capital improvement.
(2) For fiscal years 2023 -24 and 2024 -25, includes fiscal year 2022 -23 surplus in the amount of $1,648,000 and $2,652,000, respectively, to fund one-time expenditures.
(3) Comm. & Econ Development was restructured into two separate departments starting in fiscal year 2023-24. (4) Does not include debt service on the Series 2024A Bonds.

Source: City of Garden Grove Adopted Fiscal Year 2023-25 Biennial Budget. 301

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Comparative Change in Fund Balance of the City General Fund The table below presents the City’s audited General Fund Statement of Revenues, Expenditures and Change in Fund Balance for fiscal years 2018-19 through 2022-23.

TABLE 5

CITY OF GARDEN GROVE GENERAL FUND STATEMENT OF

REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCES
2018-19 2019-20 2020-21 2021-22 2022-23

REVENUES
Taxes(1) $ 110,241,920 $ 116,998,382 $ 116,343,879 $ 147,355,942 $ 159,930,340 Licenses and permits 2,565,448 2,576,315 2,371,876 2,704,550 3,072,537 Fines, forfeits and penalties 1,644,738 2,192,274 2,120,682 1,859,264 2,305,388 Investment earnings (loss) 3,415,620 4,983,917 19,190 (4,217,678) 709,999 Charges for current services 7,922,150 6,850,280 7,938,035 7,670,580 7,724,342 From other agencies(2) 207,216 2,199,652 27,210,933 24,654,556 2,797,420 Other revenue 3,841,818 4,326,611 2,427,898 3,367,097 2,069,957 Total revenues $ 129,838,910 $ 140,127,431 $ 158,432,493 $ 183,394,311 $ 178,609,983

EXPENDITURES
Current(3)
Fire $ 24,308,795 $ 27,974,934 $ 28,470,151 $ 26,975,339 $ 30,933,358 Police 55,016,027 63,561,473 65,733,881 68,181,105 72,454,478 Traffic Safety 2,174,167 2,444,723 2,702,044 2,708,284 2,788,572 Public right of way 4,868,558 5,425,625 4,741,813 6,781,007 11,102,502 Community buildings 5,853,353 2,780,717 3,163,726 3,713,197 4,273,408 Community services 2,734,079 4,334,159 3,867,459 4,805,877 5,304,575 Economic development 884,492 1,146,165 2,236,894 1,778,841 1,756,237 Parks and greenbelts 1,200,071 1,335,268 1,348,492 1,601,155 1,427,596 Community planning and development(4) 5,789,426 6,055,605 6,440,473 7,136,889 17,793,188 Municipal support 8,210,024 8,220,207 8,572,019 8,856,198 9,898,298 Debt Service(5)
Principal retirement 579,874 495,034 493,697 541,101 579,320 Interest 1,064,018 1,136,795 1,111,907 1,093,121 1,150,820 Total Expenditures $ 112,682,884 $ 124,910,705 $ 128,882,556 $ 134,172,114 $ 159,462,352

Excess (deficiency) of revenues over (under)
expenditures $ 17,156,026 $ 15,216,726 $ 29,549,937 $ 49,222,197 $ 19,147,631

OTHER FINANCING SOURCES
(USES)

Sale of capital assets -- $ 873,620 -- -- $ 5,989,694 Proceeds of leases -- -- -- -- 277,888
Transfers in $ 848,117 3,576,491 $ 948,996 $ 1,443,302 4,719,612 Transfers out(6) (554,862) (4,454,092) (397,369) (831,837) (9,092,262) Total other financing sources (uses) $ 293,255 $ (3,981) $ 551,627 $ 611,465 $ 1,894,932

Net change in fund balances $ 17,449,281 $ 15,212,745 $ 30,101,564 $ 49,833,662 $ 21,042,563 Fund balance, beginning of year $ 49,668,047 $ 67,117,328 $ 82,330,073 $ 112,431,637 $ 162,265,299 Fund balance, end of year $ 67,117,328 $ 82,330,073 $112,431,637 $ 162,265,299 $ 183,307,862

(1) See Table 7 and the caption “—Tax Revenues By Source.” (2) Includes a total of $48.4 million received by the City across fiscal years 2020-21 and 2021-22 from the State and Local Fiscal Relief Fund as part of the American Rescue Plan Act.
(3) Prior to fiscal year 2020 -21, the capital outlay associated with each category of expenditures was reported separately in the City’s audited financial statements. The capital outlay associated with each category of expenditures for such years has been consolidated into the current expenditures shown.
(4) Increase in fiscal year 2022-23 due to approximately $8.5 million being used for the acquisition of the Central Cities Navigation Center. (5) Includes debt service with respect to the 2015 Lease Revenue Bonds, which were defeased in December 2023. See the caption “— Indebtedness.”
(6) In fiscal year 2022-23, includes transfers out of approximately $3.3 million to the Navigation Center Fund, approximately $2.0 million to the Worker’s Compensation internal service fund, and approximately $3.0 million to the newly established Building and Structure Rehabilitation internal service fund.

Source: City of Garden Grove Audited Financial Statements for fiscal years 2018-19 through 2022-23. 302

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Comparative General Fund Balance Sheets of the City
The table below presents the City’s audited General Fund Balance Sheets for fiscal years 2018- 19 through 2022-23.

TABLE 6

CITY OF GARDEN GROVE

GENERAL FUND BALANCE SHEETS

FIVE YEAR COMPARISON
2018-19 2019-20 2020-21 2021-22 2022-23
ASSETS
Cash and cash investments $ 51,565,414 $ 67,308,538 $ 92,107,943 $ 138,234,243 $ 151,276,764 Cash and cash investments with fiscal
agents 78 -- 46 42 1,012
Cash and investments with pension trust -- 661,578 1,634,947 2,129,403 3,218,497 Taxes receivable 10,438,847 9,029,964 12,623,639 14,534,466 13,895,720 Accounts receivable 2,203,820 1,897,631 648,446 1,421,326 797,197 Interest receivable 437,287 578,263 367,618 82,054 405,395 Intergovernmental receivable -- -- 1,331,197 1,470,406 1,280,576 Intercity loans receivable, net(1) 12,792,825 12,101,948 11,382,206 10,632,394 15,401,256 Due from other funds -- 7,500 -- 244,990 20,000
Deposits and prepaid items 21,505 40,510 89,964 85,215 3,330,323 Notes Receivable, net 2,296,356 2,311,570 2,353,227 2,393,824 2,866,840 Leases receivable -- -- -- 2,587,837 4,039,468
Land held for resale -- 2,300,000 2,300,000 2,300,000 2,300,000 Total assets $ 79,756,132 $ 96,237,502 $ 124,839,233 $ 176,116,200 $ 198,833,048

LIABILITIES, DEFERRED INFLOWS

OF RESOURCES, AND FUND

BALANCES
Liabilities:

Accounts payable $ 1,537,525 $ 1,320,877 $ 1,630,452 $ 2,433,646 $ 2,644,936 Accrued liabilities 2,118,367 1,918,665 1,942,676 1,624,685 1,886,182 Refundable deposits 3,558,787 3,577,916 2,687,217 3,406,875 3,399,054 Intercity loan payable(1) 2,590,532 2,553,273 2,509,289 2,435,745 2,353,050 Unearned Revenue -- 617,600 -- - --
Due to other funds 1,538,097 1,982,515 2,115,021 71,587 72,399 Total liabilities $ 11,343,308 $ 11,970,846 $ 10,884,655 $ 9,972,538 $ 10,355,621 Deferred inflows of resources:

Unavailable revenue $ 1,295,496 $ 1,936,583 $ 1,522,941 $ 1,310,659 $ 1,251,636 Lease related -- -- -- 2,567,704 3,917,929
Total deferred inflows $ 1,295,496 $ 1,936,583 $ 1,522,941 $ 3,878,363 $ 5,169,565 Fund balances:

Non-spendable:

Intercity loan(1) $ 12,792,825 $ 12,101,948 $ 8,872,917 $ 8,196,649 $ 13,048,206 Prepaid items 21,505 40,510 89,964 85,215 3,330,323
Land held for resale -- 2,300,000 2,300,000 2,300,000 2,300,000 Restricted:

Public safety 90,596 90,596 90,596 35,426 37,884
Fire protection -- -- 280 55,170 56,670
Public right of way 280 280 280 280 280
Community planning and development 3,469,026 4,038,776 4,038,775 4,260,938 4,841,256 Community services 176,535 176,535 176,535 176,535 191,941 Municipal support and services 56,758 56,758 47,566 47,566 40,885 Pension trust -- 661,578 1,634,947 1,634,947 2,129,403
Committed
Stability reserve -- 22,500,000 22,500,000 22,500,000 25,700,000 Assigned
Post-employment benefits 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 Building improvements 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 Property tax lawsuit -- 500,000 -- -- --
General plan 261,619 357,236 428,622 428,622 576,200
Unassigned 47,448,184 37,205,856 69,951,435 120,243,951 128,754,814 Total fund balances $ 67,117,328 $ 82,330,073 $ 112,431,637 $ 162,265,299 $ 183,307,862 Total liabilities, deferred inflows of
resources, and fund balances $ 79,756,132 $ 96,237,502 $ 124,839,233 $ 176,116,200 $ 198,833,048

(1) Represents various interfund loans between the City’s General Fund and other City funds. For more information with respect t o such intercity loans, see Note C.2 in the City’s audited fina ncial statements for fiscal year 2022 -23 attached to this Official Statement as Appendix C.
303

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Source: City of Garden Grove Audited Financial Statements for fiscal years 2018-19 through 2022-23. 304

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Tax Revenues By Source
The City derives its General Fund tax revenues from a variety of sources including ad valorem property taxes, sales and use taxes, franchise taxes, a real property transfer tax and transient occupancy taxes. The City’s total General Fund tax revenues by source for the five most recent fiscal years are set forth below.

TABLE 7

CITY OF GARDEN GROVE

GENERAL FUND TAX REVENUES BY SOURCE
Revenue Category 2018-19 2019-20 2020-21 2021-22 2022-23 Property Tax(1) $ 49,352,438 $ 50,421,674 $ 55,217,475 $ 59,773,289 $ 66,649,173 Sales and Use Tax 29,371,450 43,122,113 48,400,853 58,770,201 59,309,080 Transient Occupancy Tax(2) 26,285,458 18,277,467 7,598,813 23,421,081 28,075,056 Franchise Tax 2,404,867 2,332,753 2,331,476 2,538,622 2,863,122 Business License Tax 2,827,707 2,844,375 2,795,262 2,852,749 3,033,909 Total $ 110,241,920 $ 116,998,382 $ 116,343,879 $ 147,355,942 $ 159,930,340

(1) Inclusive of property taxes in lieu of Department of Motor Vehicles license fees. See “—Property Taxes” below. (2) Transient Occupancy Tax (Hotel Visitor’s Tax) was negatively affected in fiscal year s 2019-20 and 2020-21 by the federal and state measures imposed to address the COVID-19 pandemic.

Source: City of Garden Grove.

Property Taxes
During fiscal year 2022-23, property tax receipts of approximately $ 66.6 million provided the largest tax revenue source of the City, contributing approximately 37.3% of total General Fund revenues. General Fund property tax revenues of approximately $ 60.9 million are budgeted to be received during fiscal year 2023-24.

Several years ago, the Statewide Department of Motor Vehicles license fees ( “VLF”) were reduced by approximately two-thirds. However, the State continued to remit to cities and counties t he same amount that those local agencies would have received if the VLF had not been reduced, known as the “VLF backfill.” The State VLF backfill was phased out, and as of Fiscal Year 2011-12, all of the VLF is now received through an in- lieu payment from State property tax revenues referred to as Property Taxes in lieu of VLF.

In California, property which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens, ar ising pursuant to State Law, on the secured property, regardless of the time of the creation of other liens. The valuation of property is determined as of January 1 each year, and installments of taxes levied upon secured property are due November 1 and February 1 and become delinquent on the following December 10 and April 10, respectively. Taxes on unsecured property are due July 1, and become delinquent August 31.

Secured and unsecured properties are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes of the State for the amount of taxes that are delinquent.

The taxing authority has four methods of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s Office in order to obtain a lien on certain property of the taxpayer, and (4) seizure and sale of personal property, improvement or possessory interest belonging or taxable to the assessee. 305

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A ten percent penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, beginning on the July 1 following a delinquency, interest begins accruing at the rate of 1 1/2% per month on the amount delinquent. Such property may thereafter be redeemed by the payment of the delinquent taxes and the ten percent penalty, plus interest at the rate of 1 1/2% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A ten percent penalty also applies to the delinquent taxes or property on the unsecured roll, and further, an additional penalty of 1 1/2% per month accrues with respect to such taxes beginning on the varying dates related to the tax billing date.

Legislation enacted in 1984 (Section 75 et seq . of the Revenue and Taxation Code of the State of California), provides for the supplemental assignment and taxation of property as of the occurrence of a change in ownership or completion of new construction. Previously, statutes enabled the asses sment of such changes only as of the next tax lien date following the change and thus delayed the realization of increased property taxes from the new assessment for up to 14 months. Collection of taxes based on supplemental assessments occurs throughout the year. Taxes due are prorated according to the amount of time remaining in the tax year, with the exception of tax bills dated January 1 through May 31, which are calculated on the basis of the remainder of the current fiscal year and the full 12 months of the next fiscal year.

In the past, the State Legislature has shifted property taxes from cities, counties and special districts to the Educational Revenue Augmentation Fund. The term “ERAF” is often used as a shorthand reference for this shift of property taxes. In 1992-93 and 1993-94, in response to serious budgetary shortfalls, the State Legislature and administration permanently redirected over $3 billion of property taxes from cities, counties, and special districts to schools and community colle ge districts. The 2004 -05 State budget included an additional $1.3 billion shift of property taxes from certain local agencies, including the City, to occur in fiscal years 2004 -05 and 2005 -06. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Proposition 1A” and “—Proposition 22” for a description of certain limitations on the State’s authority over local government revenue sources.

The table below sets forth the secured and unsecured assessed valuations for property in the City for the fiscal years 2014-15 through 2023-24. Values shown in the following table exclude the incremental assessed value of property within the redevelopment project areas established in the City above the base year assessed value of such properties (i.e. the assessed value of the property at the time the redevelopment project areas were established). For fiscal years 2021 -22, 2022-23, and 2023-24, the incremental assessed value of the property within the former redevelopment project areas was $4,806,413, $5,110,810, and $5,111,324, respectively. The City receives a share of the residual property taxes generated by such incremental assessed value, after property taxes are allocated to the Successor Agency to pay its enforceable obligations (sometimes referred to as “residual property tax revenue”). The amount of residual property tax revenue received from the City fluctuates from year to year. In fiscal year 2021-22 the City received approximately $3.9 million in residual property tax revenue, and in fiscal year 2022-23 the City received approximately $5.9 million in residual property tax revenue. 306

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TABLE 8

CITY OF GARDEN GROVE

ASSESSED VALUATION
FISCAL YEARS 2013-14 THROUGH 2023-24
(in thousands)
Fiscal Year Secured Unsecured
Taxable
Assessed Value(1)
Total Direct
Tax Rate
2014-15 $10,538,784 $356,435 $10,895,219 1.145%
2015-16 10,568,876 234,280 10,803,156 1.151
2016-17 12,226,724 364,776 12,591,500 1.150
2017-18 12,873,943 335,785 13,209,728 1.189
2018-19 12,373,687 263,636 12,637,323 1.183
2019-20 13,000,870 232,485 13,233,355 1.184
2020-21 14,167,631 252,597 14,420,228 1.185
2021-22 15,071,294 278,284 15,349,578 1.094
2022-23 16,030,786 364,320 16,395,106 1.178
2023-24 16,032,715 364,320 16,397,035 1.179

(1) Excludes incremental assessed value of property located in redevelopment project areas.

Source: City of Garden Grove Audited Financial Statements for fiscal years 2014-15 through 2022-23; the City of Garden Grove for fiscal year 2023-24.

The County operates under a statutory program entitled Alternate Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”). Under the Teeter Plan local taxing entities receive 100% of their tax levies net of delinquencies, but do not receive interest or penalties on delinquent taxes collected by the County. The City’s share of the ad valorem property tax levy is included in the County’s Teeter Plan.

As a result, the City currently receives 100% of such levy and is not impacted by delinquencies in payment.

However, the County may choose to discontinue the Teeter Plan at any time.

The 10 largest property taxpayers in the City for fiscal year 2023-24 based on total assessed valuation, the land use and the percentage of the City’s total assessed value attributable to each are shown in the below table. The information in Table 9 has been obtained from third -party sources and is included for general information purposes only. The City has not verified the information i n Table 9 and does not guarantee the accuracy of such information.

The largest property taxpayer in the City, GWGG LLC, is the owner of the Great Wolf Lodge, a 603- room family-style hotel with a 121,000 square foot indoor water park (exclusively for use by hotel guests) located in the City on Harbor Boulevard, north of Garden Grove Boulevard, approximately three miles from the Disneyland Resort. The second largest property taxpayer in the City, Investel Harbor Resorts LLC, is the owner of the Hyatt Regency Orange County, a 653-room hotel located at the corner of Harbor Boulevard and Chapman Avenue in the City, approximately one mile from the Disneyland Resort. As reflected in the following table, both of these property taxpayers have assessment appeals pending with respect to these properties. 307

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TABLE 9

CITY OF GARDEN GROVE

TOP TEN PRINCIPAL PROPERTY TAXPAYERS
2023-24 ASSESSED VALUATION

Property Owner Secured Unsecured Total
% of
Total(1) Primary Use

1. GWGG LLC(2) $ 250,494,041 -- $ 250,494,041 1.16% Commercial

2. Investel Harbor Resorts LLC(2) 136,199,694 $ 9,821,119 146,020,813 0.68 Commercial 3 House Foods Holding USA INC 36,245,400 71,095,989 107,341,389 0.50 Unsecured

4. Landmark Hotel LLC 87,693,395 5,224,982 92,918,377 0.43 Commercial

5. Rexford Industrial Realty LP 82,783,568 -- 82,783,568 0.38 Industrial

6. New Age Brookhurst LLC 81,862,665 162,909 82,025,474 0.38 Residential

7. Christ Catholic Cathedral 57,805,296 12,680,979 70,486,275 0.33 Commercial

8. Khanna Enterprises Limited(2) 60,150,533 2,911,300 63,061,833 0.29 Commercial

9. SPS Technologies LLC 2,865,051 59,246,857 62,111,908 0.29 Unsecured

10. TNA Distributions LLC 61,518,043 -- 61,518,043 0.28 Residential Totals $ 857,617,686 $ 161,144,135 $ 1,018,761,821 4.71%

(1) 2023-24 Local Assessed Valuation (secured and unsecured): $21,629,090,674 (including incremental value in the redevelopment project areas).
(2) Has pending assessment appeals.

Source: City of Garden Grove.

Sales Taxes
General. During fiscal year 2022-23, sales tax receipts of approximately $ 59.3 million provided the second largest tax revenue source for the City, contributing approximately 33.2% of total General Fund revenues.

General Fund sales tax revenues of approximately $60.3 million are budgeted to be received during fiscal year 2023-24. A sales tax is imposed on retail sales or consumption of personal property. The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters. The current total sales tax rate in the City is 8.75%, which includes the 7.75% sales tax rate established by the State Legislature and the 1% transactions and use tax imposed by the City’s Measure O.

Measure O was approved by the voters of the City on Novemb er 6, 2018, and imposes a one percent transaction and use tax within the City. The Measure O t ransaction and use tax is essentially the same as the sales tax except that it is only subject to transactions delivered to customers within the City (i.e. point -of- destination) whereas sales tax applies to transactions originating within the City (i.e. point-of-sale). The voters authorized the Measure O sales tax to be collected indefinitely, and the revenues generated by the Measure O sales tax are General Fund revenues.

The City is home to over 4,600 businesses , and the top 25 businesses generated approximately 49.8% of the City’s total sales tax revenues in fiscal year 2022-23. The City’s sales tax base is diverse and comprised of the following categories: Autos and Transportation, Restaurants and Hotels, State and County Pools (internet sales), General Consumer Goods, Fuel and Service Stations, Building and Construction, Business and Industry (manufacturing and business-to-business sells), and Food and Drugs.

The table below sets forth the top twenty-five sales tax producers as of the third quarter of calendar year 2023 in alphabetical order.
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TABLE 10

CITY OF GARDEN GROVE
TOP 25 SALES TAX PRODUCERS
(AS OF SEPTEMBER 30, 2023)
Arco My Goods Market
Arco AM PM Quantum Auto Sales
California Fuels & Lubricants Reece Plumbing
Compass Group USA Rexel
Costco Ross
Galaxy Harbor Shell
Garden Grove Hyundai Simpson Chevrolet
Garden Grove Kia STG Auto Group
Garden Grove Nissan Target
Great Wolf Lodge Southern California Toyota Place
Home Depot Volkswagen of Garden Grove
Marshalls Walmart Supercenter
McDonalds

Source: City of Garden Grove.

Sales Tax Abatement Agreements. The City has entered into several tax abatement agreements for the purpose of attracting and retaining businesses within the City.

In 2016, the City approved an Amended and Restated Operating Covenant Agreement with California Fuels and Lubricants for business retention purposes pursuant to Senate Bill 562. The Amended Agreement provides for economic development assistance in the form of varying revenue sharing ratios of the amount of sales tax revenue generated in excess of $200,000 annually for a period of 20 years. For fiscal year 2022-23, California Fuels and Lubricants received assistance payments of $775,493.

In 2017, the City entered into an agreement with Garden Grove Automotive, Inc ( “GGA”) regarding the acquisition and operation by GGA of an existing Kia car dealership. Subject to the contingency that GGA fulfills the covenants of the agreement and generate s enough sales tax revenue during the fiscal year, the City has agreed to pay GGA an amount equal to 35% of the sales tax revenue in excess of $150,000. The amount paid in fiscal year 2022-23 was $37,500.

Transient Occupancy Tax (Hotel Visitor’s Tax)
During fiscal year 2022-23, hotel visitor’s tax receipts of approximately $28.1 million provided the third largest tax revenue source for the City, contributing approximately 15.7% of total General Fund revenues.

General Fund hotel visitor’s tax revenues of approximately $ 25.0 million are budgeted to be received during fiscal year 2023-24. While hotel visitor’s tax was budgeted at a lower level compared to the audited fiscal year 2022-23 amounts, based on the first seven months of actual data for fiscal year 2023 -24, hotel visitor’s tax receipts are expected to remain strong and continue to generate revenue at the fiscal year 2022 -23 level. The City applies a 14.5% hotel visitor’s tax on the cost of hotel or other lodging stays of less than 30 days. The City’s hotel visitor’s tax was originally approved by the voters in 2002 at a rate of 1 3% and in 2012 the voters of the City approved increasing the rate to the current rate of 14.5%. The City’s hotel visitor’s tax does not expire and the revenues collected are General Fund revenues.

Twenty-six hotels operate in the City, including a Hyatt Regency, Marriott, Great Wolf Lodge (hotel and water park), Embassy Suites, and Delta Hotels by Marriott. Eleven of the City’s hotels are located within one mile of the Disneyland Resort, which includes the Disneyland and California Adventure theme parks. 309

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Hotel Visitor’s Tax Abatement Agreement. In 2010, the Successor Agency entered into an agreement with Garden Grove MXD, LLC for the construction of the Great Wolf Lodge. The performance-based assistance began in fiscal year 2015-16 and is based on the City’s hotel visitor’s tax rate. If the hotel visitor’s tax rate charged by the City impacts an agreed upon transient occupancy tax rate differential with a neighboring City, an amount will be rebated to the developer equal to the total room revenue multiplied by that transient occupancy tax differential. The amount of hotel visitor’s tax rebated to Garden Grove MXD, LLC for the fiscal year 2022- 23 was $764,600.66. This amount is an approved enforceable obligation of the Successor Agency and is not expected to be paid from the General Fund.

Business Operation Tax
Business Licenses are a non-regulatory tax. Any person or entity that is physically present in the City of Garden Grove conducting business activity needs a Business License from the City. During fiscal year 2022- 23, business operation tax receipts of approximately $ 3.0 million contributed approximately 1.7% of total General Fund Revenues. General Fund business operation tax revenues of approximately $ 2.8 million are budgeted to be receive d during fiscal year 202 3-24. As of December 31, 2023, total revenues from Business License tax exceeded $1.8 million.

Franchise Taxes
Franchise taxes are collected for services provided within the City. During fiscal year 2022-23, franchise tax receipts of approximately $ 3.0 million contributed approximately 1.7% of total General Fund Revenues. General Fund franchise tax revenues of approximately $ 2.3 million are budgeted to be received during fiscal year 202 3-24. Franchise taxes are collected for services provided within the City. Typically, franchise taxes are collected from electric, natural gas, refuse, cable, and telephone service providers and based on consumer use. Franchise tax revenues are expected to be impacted by cha nges in gas and electric pricing along with changes in weather patterns. While residential population may be slightly increasing, the cable franchise tax is estimated to decline due to the increasing prevalence of alternative entertainment options, including satellite television and online streaming service subscriptions.

Charges for Services
During fiscal year 2022-23, charges for services of approximately $ 7.7 million contributed approximately 4.3% of total General Fund revenues. General Fund revenues f rom charges for services of approximately $7.1 million are budgeted to be received during fiscal year 202 3-24. The City collects charges for services for various building inspection fees, use of City facilities, non -resident ambulance reimbursement, and overhead charges to other funds.

Licenses and Permits
During fiscal year 2022-23, revenues from licenses and permits of approximately $ 3.1 million contributed approximately 1.7% of total General Fund revenues. General Fund revenues from licenses and permits of approximately $2.5 million are budgeted to be received during fiscal year 2023-24. Revenues from licenses and permits are comprised of various building permits, animal license permits and fees and other development related permits.

Fines and Forfeitures
During fiscal year 2022-23, revenues from fines and forfeitures of approximately $ 2.3 million contributed approximately 1.3% of total General Fund revenues. General Fund revenues from fines and forfeitures of approximately $2.0 million are budgeted to be received during fiscal year 2023-24. Revenues from fines and forfeitures consists of traffic fines, parking citations, water violations and code enforcement citations. 310

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Other Revenue Sources
Intergovernmental. The City receives other General Fund reve nue from other government agencies, principally from the State and Federal governments. These revenues include monies called subventions, as well as grants for specific projects, and reimbursements related to State mandated activities or disaster/emergenc y declarations. These revenues can fluctuate from year-to-year for on-going programs and activities.

Investment Earnings . Revenues from investment earnings consist of interest earnings on City investments.

Other. Other sources of General Fund revenue for the City include reimbursements for special events, recovery from damage to City properties, donations, sale of City assets, and other miscellaneous revenue sources.

These revenues can be inconsistent from year-to-year or are generally one-time in nature.

Indebtedness
Long-Term Debt. The City’s long-term obligations payable from the General Fund currently consist of two building leases, two equipment leases, nine vehicle leases and various subscription -based in formation technology arrangements with various vendors with an aggregate total lease liability as of June 30, 2023 of $704,350.

The City has also issued various series of bonds payable from the City’s Water Utility Enterprise Fund, Sewage Collection Fund, or from the Successor Agency’s funds, and not payable from the General Fund.

On December 5, 2023, the Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2015A (the “2015 Lease Revenue Bonds”) were fully defeased. The 2015 Lease Revenue Bonds were originally issued in 2015 in the aggregate principal amount of $24,790,000 and as of June 30, 2023 had a balance of $20,715,000.

For additional information with respect to the City’s outstanding long-term obligations, see Note C.9 to the audited financial statements for fiscal year 2022-23 attached to the Official Statement as Appendix C.

Short-Term Debt. The City currently has no short-term debt outstanding.

Retirement System
This caption contains certain information relating to the California Pu blic Employees Retirement System ( “CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and actuaries. The City has not independently verified the information provided by CalPERS and makes no representations nor expresses any opinion as to the accuracy of the information provided by CalPERS.

The annual comprehensive financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPER S’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forward- looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

Plan Description. The City’s defined benefit pension plans, the Miscellaneous Plan of the City of Garden Grove (the “Miscellaneous Plan”) and the Safety Plan of the City of Garden Grove (the “Safety Plan”), provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members 311

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and beneficiaries. The Miscellaneous Plan and the Safety Plan are part of the Public Agency portion of the California Public Employees Retirement System (“CalPERS”), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State. A menu of benefit provisions as well as other requirements are established by State statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a separate Annual Comprehensive Financial Report. Copies of CalPERS’ annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814.

On September 12, 2012, the California Governor signed the California Public Employees’ Pensio n Reform Act of 2013 (“PEPRA”) into law. PEPRA took effect January 1, 2013. Among other things, PEPRA:
(1) established PEPRA which applies to all public employers and public pension plans on and after January 1, 2013 (except specific exemptions); (2) established new retirement tiers/benefits for new public employees; (3) prohibited certain cash payment from being counted as compensation; and (4) increased retirement age for all new public employees.

Each employee contributes toward his or her retirement b ased upon the retirement formula. Under PEPRA, the mandated employee contribution rate is one half of the normal cost as determined annually by CalPERS for the City when the actuarial valuation of the plans are performed. Active PEPRA plan members in the Miscellaneous Plan are required to contribute 6.75% of reportable earnings for a 2.0% at 62 retirement plan.

Active PEPRA plan members in the Safety Plan are required to contribute 12.75% of reportable earnings for a

2.7% at 57 retirement plan. Active “Classic” plan members in the Miscellaneous Plan are required to contribute

8.00% of reportable earnings for a 2.5% at 55 retirement plan. Active “Classic” plan members in the Safety Plan of the City are required to contribute 9.00% of reportable earnings for a 3.0% at 50 retirement plan.

The City entered into an agreement with the Orange County Fire Authority (“OCFA”) on April 9, 2019 for OCFA to provide fire and emergency medical services to the City starting on August 16, 2019. Therefore, the Safety Plan includes the pension liability for the fire employees through April 2019 and OCFA has taken over responsibility for the employer’s share of pension costs for these employees going forward.

The required employer contribution rates for fiscal year ended June 30, 2023 under PEPRA are the same as the employer contribution rates for existing miscellaneous employees and public safety employees.

Benefits provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with st atutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:
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Miscellaneous Plan
Hire date Prior to January 1, 2013 On or after January 1, 2013 Benefit formula 2.5% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 1.0% to 2.5% Required employee contribution rates 8.00% 6.75%
Required employer contribution rates(1) 43.55% 43.55%

(1) As described under “—Contributions” below, CalPERS no longer collects required contributions for the unfunded portion of pension liability based on a percentage of payroll.

Safety Plan
Hire date Prior to January 1, 2013 On or after January 1, 2013 Benefit formula 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life
Retirement age 50 50-57
Monthly benefits, as a % of eligible compensation 3.00% 2.0% to 2.7% Required employee contribution rates 9.00% 12.75%
Required employer contribution rates(1) 97.53% 97.53%

(1) As described under “—Contributions” below, CalPERS no longer collects required contributions for the unfunded portion of pension liability based on a percentage of payroll.

Employees Covered. As of the June 30, 2022 actuarial valuation date, the following employees were covered by the benefit terms for each plan:

Description Miscellaneous Safety
Inactive employees or beneficiaries currently receiving benefits
708 512
Inactive employees entitled to but not yet receiving benefits 495 156 Active employees 386 172
Total 1,589 839

Contributions. Section 20814(c) of the California Public Employee’s Retirement Law (PERL) requires that the employer contribution rates for all p ublic employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuariall y determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between th e actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms a s plan member contributions requirements are classified as plan member contributions.

The required employer contribution is comprised of a Normal Cost component and a component equal to an amortized amount of the unfunded liability or Annual Unfunded Accrued Liability (“UAL”) Payment. The Normal Cost is the annual cost of service earned by active employees for the upcoming fiscal year, which is expressed as a percentage of payroll. The Annual UAL Payment is the amortized dollar amount needed to fund past service credit earned (or accrued) for members who are currently receiving benefits, active members, and for members entitled to deferred benefits, as of the valuation date. The UAL Payment is a fixed dollar annual payment, billed monthly.
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Beginning with fiscal year 2017-18 CalPERS began collecting employer contributions toward the plan’s unfunded liability as dollar amounts instead of the prior method of a contribution rate. According to CalPERS, this change was to address potential funding issues that could arise from a declining payroll or reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of payroll could lead to the underfunding of the plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports include such results in the contribution projection set forth in the tables below. CalPERS indicates that t hese results are provided for information purposes only and contributions toward the unfunded liability will continue to be collected as set dollar amounts.

For the year ended June 30, 2023, the City’s total required contributions were $ 13,424,666 for the Miscellaneous Plan and $21,548,966 for the Safety Plan. Such amounts were paid by the City and represented approximately 8.4% and 13.5%, respectively, of General Fund expenditures. The City’s required contributions in fiscal year 2023-24 are $13,835,656 for the Miscellaneous Plan and $23,176,095 for the Safety Plan, and the City has budgeted to make such payments. However, the City allocates a portion of such pension costs to other City funds (i.e. the City’s Water Utility, Sewer Utility, and Housing Authority funds) as appropriate.

The tables below are derived from the City of Garden Grove Annual Valuation Reports with valuation dates as of June 30, 2022 and delivered in July 2023 (the “2023 Reports”) and show the required and projected employer contributions for the next six fiscal years. Projected results reflect the adopted changes to the discount rates described in the 2023 Report. Such projections also assume that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. The projected normal cost percentages in the projections below does not reflect that the normal cost will decline over the time as new employees are hired into PEPRA or other lower cost benefit tiers.

The foregoing projections assumed the investment return for fiscal year 2022-23 would be 6.80% and beyond. CalPERS announced an investment return of 5.80% for fiscal year 202 2-23. As a result, the actual contribution requirements for the fiscal years 2024-25 and the following years shown below can be expected to differ from such projections. No assurance can be provided that the City’s CalPERS plan expenses will not increase significantly in the future.

Miscellaneous Plan
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond) Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Normal Cost % 11.93% 11.6% 11.3% 11.0% 10.7% 10.5%
UAL Payment $ 11,185,848 $ 10,227,000 $ 10,496,000 $ 11,092,000 $ 12,398,000 $ 12,672,000 Total as a % of Payroll* 45.50% 41.4% 41.1% 41.6% 44.0% 43.6% Projected Payroll $ 33,316,292 $ 34,249,148 $ 35,208,124 $ 36,193,952 $37,207,382 $ 38,249,189

* Illustrative only and based on the projected payroll shown.

Source: CalPERs Miscellaneous Plan of the City of Garden Grove Annual Valuation Report as of June 30, 2022.

Safety Plan
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2022-23 and Beyond) Fiscal Year 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30 Normal Cost % 24.62% 23.9% 23.2% 22.6% 22.0% 21.4%
UAL Payment $ 19,722,288 $ 20,990,000 $ 21,808,000 $ 22,847,000 $ 24,922,000 $ 25,471,000 Total as a % of Payroll* 103.55% 105.6% 105.8% 106.7% 111.3% 110.1% Projected Payroll $ 24,988,207 $ 25,687,876 $ 26,407,137 $ 27,146,537 $ 27,906,639 $ 28,688,026

* Illustrative only and based on the projected payroll shown.

Source: CalPERs Safety Plan of the City of Garden Grove Annual Valuation Report as of June 30, 2022. 314

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Net Pension Liability. The City’s net pension liability is measured as the total pension liability, less the pension plan’s fiduciary net position. The City’s June 30, 2021 valuation was rolled forward t o determine the June 30, 2022 total pension liability, based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Actuarial Cost Method
Actuarial Assumptions
Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table(1) Derived using CalPERS’ membership data for all funds Post Retirement Benefit Increase The lesser of contract COLA up to 2.30% until Purchasing Power Protection Allowance Floor on Purchasing Power applie s, 2.30% thereafter

(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre -retirement and Post -retirement mortality rates include generational mortality improvement using 80% of Scale MP- 2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

The following table shows the changes in net pension liability recognized over the measurement period.

Miscellaneous Plan
Increase (Decreases)

Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c)=(a)-(b)
Balance at June 30, 2021 $ 357,065,376 $ 291,752,153 $ 65,313,223 Changes in the year:

Service cost 6,003,691 -- 6,003,691
Interest on the total pension liability 24,841,644 -- 24,841,644 Changes in assumptions 11,834,221 -- 11,834,221
Difference between actual and expected experience (2,812,686) -- (2,812,686) Contribution - employer -- 12,360,011 (12,360,011) Contribution - employee -- 2,371,491 (2,371,491)
Net Investment income -- (22,166,332) 22,166,332
Benefit payments, including refunds of employee
contributions (18,129,856) (18,129,856) ---
Administrative expense -- (181,744) 181,744
Net changes 21,737,014 (25,746,430) 47,483,444
Balance at June 30, 2022 $ 378,802,390 $ 266,005,723 $ 112,796,667

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Safety Plan
Increase (Decreases)

Total Pension
Liability
(a)
Plan Fiduciary Net
Position
(b)
Plan Net Pension
Liability
(c)=(a)-(b)
Balance at June 30, 2021 $ 586,839,978 $ 434,809,261 $ 152,030,717 Changes in the year:

Service cost 7,909,848 -- 7,909,848
Interest on the total pension liability 40,930,945 -- 40,930,945 Changes in assumptions 21,051,324 -- 21,051,324
Difference between actual and expected experience (2,239,626) -- (2,239,626) Contribution - employer -- 19,491,065 (14,491,065) Contribution - employee -- 2,837,409 (2,837,409)
Net Investment income -- (32,867,582) 32,867,582
Benefit payments, including refunds of employee
contributions (32,808,974) (32,808,974) --
Administrative expense -- (270,860) 270,860
Net changes 34,843,517 (43,618,942) 78,462,459
Balance at June 30, 2022 $ 621,683,495 $ 391,190,319 $ 230,493,176 Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability of each Plan, calculated using the discount rate for each Plan, as well as what the net pension liability would be if it were calculated using a discount rate that is one percentage-point lower or one percentage- point higher than the current rate:

Miscellaneous Plan Safety Plan
1% Lower 5.90% 5.90%
Net Pension Liability $164,346,822 $316,300,449
Current Discount Rate 6.90% 6.90%
Net Pension Liability $112,796,667 $230,493,176
1% Higher 7.90% 7.90%
Net Pension Liability $70,406,942 $160,647,196
The Net Pension Liabilities for the City’s pension plans have been primarily liquidated by funding from the General, Water, Sewage Collection and Housing Authority funds based on their proportionate personnel costs of the year.

Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports and can be obtained on the CalPERS website.

Pension Expenses and Deferred Outflows/Inflows of Resources Re lated to Pensions . On June 25, 2012, the Governmental Accounting Standards Board approved GASB Statement No. 68 ( “GASB 68”) with respect to pension accounting and financial reporting standards for state and local governments and pension plans. GASB 68 st ates that, for pensions within the scope of the statement, a cost -sharing employer that does not have a special funding situation is required to recognize a net pension liability, deferred outflows of resources, deferred inflows of resources related to pen sions, and pension expense based on its proportionate share of the net pension liability for benefits provided through the pension plan. While the accounting standard changed financial statement reporting requirements, they do not impact funding policies of the pension systems.

The audited financial statements of the City for fiscal year 2022-23 attached hereto as Appendix C reflect the application of the GASB 68.

At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
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Miscellaneous Plan
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date $ 13,424,666 -- Changes in assumptions 7,451,176 --
Differences between expected and actual experiences 263,080 $ (1,770,950) Net difference between projected and actual earnings on pension plan investments 13,454,069 --
Totals $ 34,592,991 $ (1,770,950)
Safety Plan
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
Pension contributions subsequent to measurement date $ 21,548,966 -- Changes in assumptions 12,630,794 --
Differences between expected and actual experiences 56,003 $ (1,458,969) Net difference between projected and actual earnings on pension plan investments 19,576,841 --
Totals $ 53,812,604 $ (1,458,969)
The $13,424,666 and $21,548,966 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ending June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Miscellaneous Plan Safety Plan
Measurement
Period Ended
June 30:

Deferred Outflows/(Inflows) of
Resources, Net
Deferred Outflows/(Inflows) of
Resources, Net
2023 $5,760,977 $10,566,056
2024 4,259,548 6,504,715
2025 944,995 1,238,789
2026 8,431,855 12,495,109
Funded Status. The tables below are derived from the 2023 Reports and show the funded status of the City’s defined benefit pension plan as of the valuation dates shown. 317

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Safety Plan
Valuation
Date
Accrued
Liability
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
6/30/2018 $326,674,105 $225,361,716 $101,312,389 69.0% $29,535,056 6/30/2019 339,022,359 234,901,507 104,120,852 69.3 27,675,839 6/30/2020 351,307,306 240,644,136 110,663,170 68.5 28,899,920 6/30/2021 370,636,803 291,734,343 78,902,460 78.7 29,934,218 6/30/2022 385,872,623 265,999,237 119,873,386 68.9 30,667,425

Source: CalPERs Miscellaneous Plan of the City of Garden Grove Annual Valuation Report as of June 30, 2022.

Miscellaneous Plan
Valuation
Date
Accrued
Liability
Market Value of
Assets
Unfunded
Liability Funded Ratio
Annual
Covered
Payroll
6/30/2018 $546,234,958 $348,316,850 $197,918,108 63.8% $28,869,602 6/30/2019 565,114,729 359,902,546 205,212,183 63.7 27,215,867 6/30/2020 581,960,501 363,308,360 218,652,141 62.4 21,181,792 6/30/2021 613,243,226 434,782,371 178,460,855 70.9 22,180,469 6/30/2022 639,254,589 391,180,653 248,073,936 61.2 23,001,478

Source: CalPERs Safety Plan of the City of Garden Grove Annual Valuation Report as of June 30, 2022.

Section 115 Pension Trust. The City Council adopted a Pension Funding Policy in 2019. Accordingly, an Internal Revenue Service Section 115 Trust was established to prefund pension obligations. The trust is a tax-exempt irrevocable trust, trust assets are to be used exclusive for payment of pension liabilities. Assets held in the trust are reported as restricted cash investments in the General Fund. The City has consistently funded the Section 115 Trust on an annual basis since fiscal year 2019-20. As of January 31, 2024, the Section 115 Trust carries a market value of $4,309,613.

For additional information with respect to the City’s retirement plans, including with respect to the long- term expected rate of return, discount rate, amortization of deferred outflows and deferred inflows of resources, and recognition of gains and losses, see Note C.12 to the City’s audited financial statements for fiscal year 2022- 23 attached hereto as Appendix C.

Pension Obligation Bonds. In 2022, the City Council authorized the issuance of pension ob ligation bonds to refinance all or a portion of the City’s unfunded pension liability. The City has not yet issued pension obligation bonds but the City expects to monitor market conditions and may consider the issuance of such bonds to refinance all or a portion of the City’s unfunded pension liability if and when the City determines that such issuance will provide a financial benefit to the City.

Other Post-Employment Benefits
Plan Description. The City administers an Other Post-Employment Benefit (“OPEB”) plan which is subject to changes based on the discretion of the Council. The City provides an agent multiple-employer defined benefit healthcare plan to retirees through CalPERS under the California Public Employees Medical and Hospital Care Act (“PEMHCA”), commonly referred to as “PERS Health.” 318

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Employees Covered . Employees are eligible for retiree health benefits if they retire from the City on or after age 50 (unless disabled) and are eligible to begin drawing a CalPERS pension. The benefits are available only to employees who retire from the City.

As of the June 30, 2023 actuarial valuation, the following current and former employees were covered by the City OPEB plan:

Inactive Employees Receiving Benefit Payments 288
Inactive Employees Entitled to But Not Yet Receiving Benefit Payments -- Participating Active Employees 567
Total Number of Participants 855

Source: City of Garden Grove Actuarial Study of Retiree Health Liabilities Under GASB 74/75, prepared by Total Compensation Systems, Inc., dated March 7, 2024.

Contributions. The contributions for the City’s OPEB benefits are based on pay-as- you-go financing requirements. The contribution requirements of OPEB plan members and the City are established and may be amended by the City Council. The City must agree to make a defined monthly payment towards the cost of each retiree’s coverage. The City’s contribution rates were $151 and $149 per month for each retiree for the calendar years ended 2023 and 2022, respectively. For the fiscal year ended June 30, 2023, the City contributed $517,951 to the OPEB plan.

Actuarial Methods and Assumptions Used to Determine Total OPEB Liability. The City’s total OPEB liability as shown in the City’s audited financial statements for fisc al year 2022 -23 was determined by an actuarial valuation dated June 30, 2021, based on various actuarial methods and assumptions. For additional information with respect to actuarial methods and assumptions used to determine the total OPEB liability, see Note C.13 to the City’s audited financial statements for fiscal year 2022-23 attached hereto as Appendix C.

Costs for Retiree Coverage. Retiree liabilities are based on actual retiree premium plus an implicit rate subsidy of 78.3% of non -Medicare medical premium. Liabilities for active participants are based on the first year costs shown below, which include the implicit rate subsidy. Subsequent years’ costs are based on first year costs adjusted for trend and limited by any City contribution caps.

Participant Type Future Retirees Pre-65 Future Retirees Post-65 Fire Fighters PEMHCA Minimum: $1,752
Implicit Subsidy: $13,982
$1,752
Police Officers PEMHCA Minimum: $1,752
Implicit Subsidy: $13,982
$1,752
Miscellaneous Employees PEMHCA Minimum: $1,752
Implicit Subsidy: $9,375
$1,752

Source: City of Garden Grove Audited Financial Statements for fiscal year 2022-23.

The participation rates per the actuarial report for all employee types for the group that is less than age 65 (Non-Medicare) and for the group that is more than age 65 (Medicare) is 70%.

GASB Statement No. 75. In June 2015, GASB issued Statement No. 75, which became effective for fiscal years beginning after June 15, 2017. The primary objective of Statement No. 75 is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (i.e.

OPEB). Statement No. 75 is also intended to improve information provided by state and local governmental employers about financial support for OPEB that is provided by other entities. Statement No. 75 results from a comprehensive review of the effectiveness of existing standards of accounting and financial reporting for all 319

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postemployment benefits (pensions and OPEB) with regard to providing decision-useful information, supporting assessments of accountability and inter-period equity, and creating additional transparency.

More specifically, Statement No. 75 requires the liability of employers to be measured as the portion of the present value of projected benefit payments to be provided to current active and inactive employees that is attributed to those employees’ past periods of service (total OPEB liability), less the amount of the OPEB plan’s fiduciary net position. Statement No. 75 requires the recognition of the total OPEB liability in the Statement of Net Position.

Total OPEB Liability. If actuarial assumptions are borne out by experience, the City will fully accrue retiree benefits by expensing an amount each year that equals the service cost. If no accruals had taken place in the past, there would be a shortfall of many years’ accruals, accumulated interest and forfeitures for terminated or deceased employees. This shortfall is called the Total OPEB Liability (“TOL”). The TOL is calculated as the Actuarial Present Value of Projected Benefit Payments minus the present value of future service costs.

The changes in the OPEB liability for the City in the fiscal year ending June 30, 2023 are as follows:

Increase
(Decrease)
Total OPEB
Liability
Balance at June 30, 2022 $ 48,708,347
Changes recognized for the measurement period:

Service cost 2,250,612
Interest on the total OPEB liability 1,056,801
Employer Contributions as Benefits (1,815,415)
Experience (Gains)/Losses 14
Assumption Changes (8,394,004)
Net Changes (6,901,992)
Balance at June 30, 2023 $ 41,806,355
Sensitivity of OPEB Liability to Changes in the Discount. The following presents the OPEB liability with a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022:

Discount Rate 1% Lower Valuation Discount Rate Discount Rate 1% Higher (2.54%) (3.54%) (4.54%)
$47,774,707 $41,806,355 $37,576,368

The following presents the OPEB liability of the City if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2022:

Trend Rate 1% Lower Valuation Trend Rate Trend Rate 1% Higher (3.00%) (4.00%) (5.00%)
$35,717,597 $41,086,355 $49,090,207

For additional information with respect to the City’s OPEB plan, including with respect to actuarial methods and assumptions used to determine the total OPEB liability, recognition of deferred outflows and inflows of resources and OPEB expense and deferred outflow/inflow of resources to OPEB, see Note C.13 to the audited financial statements for fiscal year 2022-23 attached hereto as Appendix C. 320

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RISK FACTORS
The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating the purchase of the Series 2024A Bonds. However, they do not purport to be an exhaustive listing of risks and other considerations which may be relevant to an investment in the Series 2024A Bonds. In addition, the order in which the following factors are presented is not inte nded to reflect the relative importance of any such risks.

General Considerations – Security for the Series 2024A Bonds The Series 2024A Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State, or any political subdivision thereof, is pledged to the payment of the Series 2024A Bonds. The Authority has no taxing power.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City, the State or of any political subdivision thereof within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obliga tion for which the City or the State is obligated to levy or pledge any form of taxation or for which the City or the State has levied or pledged any form of taxation.

Although the Lease Agreement does not create a pledge, lien or encumbrance upon the fund s of the City, the City is obligated under the Lease Agreement to pay the Base Rental Payments and Additional Rental Payments from any source of legally available funds and the City has covenanted in the Lease Agreement that it will take such action as may be necessary to include all Base Rental Payments and Additional Rental Payments due under the Lease Agreement as a separate line item in its biennial budgets and to make necessary annual appropriations for all such Rental Payments, subject to abatement. The City is currently liable and may become liable on other obligations payable from general revenues. See “CITY FINANCIAL INFORMATION — Indebtedness.”
The City has the capacity to enter into other obligations which may constitute additional charges against its revenues. To the extent that additional obligations are incurred by the City, the funds available to make Base Rental Payments may be decreased. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other activities before making Base Rental Payments and other payments due under the Lease Agreement. The same result could occur if, because of C alifornia Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. However, the City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB of the Californi a Constitution. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS—Article XIIIB of the California Constitution.” Abatements
In the event of substantial interference with the City’s right to use and occupy any portion of the Property by reason of damage to, or destruction or condemnation of the Property, or any defects in title to the Property, Base Rental Payments will be subject to abatement. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Abatement.” In the event that a portion of the Property, if damaged or destroyed by an insured casualty, could not be replaced during the period of time in which proceeds of the City’s rental interruption insurance will be available in lieu of Base Rental Payments, plus the perio d for which funds are available from the funds and accounts established under the Indenture, or in the event that casualty insurance proceeds are insufficient to provide for complete repair or replacement of such portion of the Property or redemption of the Series 2024A Bonds, there could be insufficient funds to make payments to Owners in full.

The Authority has not funded a reserve fund for the Series 2024A Bonds. 321

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It is not always possible to predict the circumstances under which abatement of rental may occur. In addition, there is no statute, case or other law specifying how such an abatement of rental should be measured.

For example, it is not clear whether fair rental value is established as of commencement of the lease or at the time of the abatement. If the latter, it may be that the value of the Property is substantially higher or lower than its value at the time of the execution and delivery of the Series 2024A Bonds. Abatement, therefore, could have an uncertain and material adverse effect on the security for and payment of the Series 2024A Bonds.

The City is required under the Lease Agreement to maintain property insurance and rental interruption insurance with respect to the Property, as well as a policy of title insurance (which is obtained at Closing). See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024 BONDS—Insurance.” If damage, destruction, title defect or eminent domain proceedings with respect to the Property results in abatement of the Base Rental Payments related to such Property and if such abated Base Rental Payments, if any, together with moneys from rental interruption or use and occupancy insurance (in the event of any insured loss due to damage or destruction), and eminent domain proceeds, if any, are insufficient to make all payments of principal and interest with respect to the Series 2024A Bonds during the period that the Property is being replaced, repaired or reconstructed, then all or a portion of such payments of principal and interest may not be made. U nder the Lease Agreement and the Indenture, no remedy is available to the Series 2024A Bond Owners for nonpayment under such circumstances.

Any such abatement will continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of the Lease Agreement will be extended as provided in the Lease Agreement, up to a maximum of ten years beyond the stated termination date of the Lease Agreement.

No Reserve Fund
The Authority has not funded a debt service reserve fund for the Series 2024A Bonds.

Effect of Economy on Revenues
The City relies heavily on property tax, sales tax, and transient occupancy (hotel) tax revenues. These revenues can be negatively affected by economic downturns in various ways. Property taxes are directly linked to the assessed value of property in the City and an economic recession affecting real estate markets can cause a significant decline in the City’s property tax revenues. Similarly, a recession could cause a reduction in consumer spending and travel, which would have a material adverse impact on the City’s sales tax and transient occupancy tax revenues. The “stay at home” orders imposed by federal, state, and local governments in response to the COVID -19 pandemic had a material adverse impact on the Ci ty’s transient occupancy tax revenues in fiscal year 2020-21, as shown in Table 7. The City can provide no assurance that economic factors affecting the City, the State, or the nation will not cause a reduction in the City’s General Fund tax revenues and a material adverse effect on the City’s ability to pay Base Rental Payments.

Natural Disasters
The occurrence of any natural disaster in the City, including, without limitation, fire, windstorm, drought, earthquake, landslide, mudslide, flood or a rise in sea levels as result of climate change, could have an adverse material impact on the economy within the City, its General Fund and the revenues available for the payment of Base Rental Payments. The City has a state -adopted all -hazards plan, which includ es specific planning for emergencies such as earthquakes, floods, fires, winter storms, thunderstorms, hazard materials release, power outage, drought, civil unrest, dam failure and national security threats. 322

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The PSF is being designed to meet the standards of a California Category IV Essential Services facility (as defined by the Seismic Safety Act). Category IV essential services buildings are designed to remain operational even in adverse conditions such as earthquakes or fire.

Earthquakes. Although no known active or potentially active faults, as defined in the Alquist -Priolo Earthquake Fault Zone Act, cross the Property and the Property is not located in an Alquist -Priolo Earthquake Study Zone, all jurisdictions in California are subject to the effect s of damaging earthquakes. An earthquake along one of the faults in the vicinity, either known or unknown, could cause a number of casualties and extensive property damage, including to the Property . The effects of such an earthquake could be aggravated by aftershocks and secondary effects such as fires, landslides, liquefaction and other threats to public health, safety and welfare. The potential direct and indirect consequences of a major earthquake could easily exceed the resources of the City and could require a high level of self-help, coordination and cooperation. The City is not required to, and does not, maintain earthquake insurance with respect to the Property.

Wildfires. The State is periodically subject to wildfires. When wildfires scorch l and, they destroy all vegetation on mountains and hillsides. As a result, when heavy rain falls in the winter, there is nothing to stop the rain from penetrating directly into the soil. In addition, waxy compounds in plants and soil that are released during fires create a natural barrier in the soil that prevents rain water from seeping deep into the ground. The result is erosion, mudslides, and excess water running off the hillsides often causing flash flooding. According to the Safety Element of the City’s General Plan, given the City’s urban terrain and lack of open space, the threat of a wildfire directly impacting the City is diminished but an urban fire during a period of high winds could lead to an urban conflagration. The existence of several petroleum and hazardous materials facilities within the City also contribute to the fire threat. Additionally, fires outside the City can impact residents as smoke and air pollution from wildfires can be a severe health hazard, es pecially for more vulnerable health impaired populations.

Flood Risk. Most of the City is subject to minimal flood risk, and is located in a low risk flood zone.

In the City, the flood zone areas are designated by the Federal Emergency Management Agency (“FEMA”) as Flood Zone A or Flood Zone X. Flood Zone A is designated as the high risk, Special Flood Hazard Area (SFHA), inundated by a 100-year floodplain. Flood Zone X designates areas of a 500-year flood; areas of 100-year flood with average depths of less than 1-foot or with drainage less than 1-square mile; and areas protected by levees from a 100-year flood. The City’s Municipal Services Center/Public Works Yard is located in Flood Zone A.

No other portion of the Property is located within Flood Zone A.

Climate Change. Climate change caused by human activities may have adverse effects on the City.

Climate change can also result in more variable weather patterns throughout the State, which can lead to longer and more severe droughts as well as inc reased risk of flooding and a rise in sea levels. The City considers the potential effects of climate change in its planning.

Projections of the impacts of global climate change on the City are complex and depend on many factors that are outside the City’s control. The various scientific studies that forecast the amount and timing of adverse impacts of climate change are based on assumptions contained in such studies, but actual events may vary materially. Also, the scientific understanding of climate change and its effects continues to evolve. Accordingly, the City is unable to forecast with certainty when adverse impacts of climate change will occur or the extent of such impacts.

The City prepared a Local Hazard Mitigation Plan (“LHMP”) dated February 2020, to help the City plan for natural disasters and hazard events. The LHMP indicates that the City is vulnerable to numerous hazards, including dam failures, floods, earthquakes, drought, and other severe weather events. Climate change can exacerbate these hazards. While the impacts of climate change may be mitigated by the City’s past and future investment in adaptation strategies, the City can give no assurance about the net effects of those strategies and whether the City will be required to take additional adaptive mitigation measures. 323

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The occurrence of natural disasters in the City could result in substantial damage to the City and the Property which, in turn, could substantia lly reduce General Fund revenues and affect the ability of the City to make Base Rental Payments or cause an abatement in Base Rental Payments. Reduced ability to pay Base Rental Payments could affect the payment of the principal of and interest on the Series 2024A Bonds . The City maintains liability insurance and property casualty insurance (for losses other than from seismic events) for the Premises. See the caption “THE CITY OF GARDEN GROVE—Risk Management.” However, there can be no assurance that specific losses will be covered by insurance or, if covered, that claims will be paid in full by the applicable insurers.

Hazardous Substances
An additional environmental condition that may result in the reduction in the assessed value of property, and there fore property tax revenue available to make Base Rental Payments, would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the City. In general, the owners and operators of a property may be required b y law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The owner or operator may be required to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the City be affected by a hazardous substance, could be to reduce the marketability and value of the property by the costs of remedying the condition. With the exception of the groundwater plume located beneath the Municipal Services Center/Public Works Yard property described under the caption “THE PROPERTY —The Release Property,” the City is not aware of any hazardous substances located on the Property.

Other Financial Matters
Due to weakness in the economy of the State and the United States, it is possible that the general revenues of the City will decline. Such financial matters may have a detrimental impact on the City’s General Fund, and, accordingly, may reduce the City’s ability to make Base Rental Payments. See “THE CITY OF GARDEN GROVE” and “CITY FINANCIAL INFORMATION.”
Substitution, Addition and Removal of Property; Additional Bonds The Authority and the City may amend the Lease Agree ment to substitute alternate real property for any portion of or add additional real property to the Property or to release a portion of the Property from the Lease Agreement, upon compliance with all of the conditions set forth in the Lease Agreement. Af ter a substitution or release, the portion of the Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement. In particular, following completion of Phase I of the Project, the C ity may release the Release Property from the Ground Lease and the Lease Agreement, subject to certain conditions. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS―Substitution or Release of the Property .” Moreover, the Authority may issue Additional Bonds secured by Base Rental Payments which are increased from current levels. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Additional Bonds.” Although the Lease Agreement requires, among other things, that the Property, as constituted after such substitution or release, have an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, it does not require that such Property have an annual fair rental value equal to the annual fair rental value of the Property at the time of substitution or release. Thus, a portion of the Property could be replaced with less valuable real property or could be released altogether. Such a replacement or release could have a n adverse impact on the security for the Series 2024A Bonds, particularly if an event requiring abatement of Base Rental Payments were to occur subsequent to such substitution or release. See APPENDIX B—“SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS —THE LEASE AGREEMENT—No Consequential Damages; Use of the Property; Substitution or Release.” 324

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The Indenture requires, among other things, that upon the issuance of Additional Bonds, the Ground Lease and the Lease Agreement will be amended, to the extent necessary, so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds; provided, however, that no such amendment will be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period is in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith. See APPENDIX B— “SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS —THE INDENTURE —Issuance of Bonds; Application of Proceeds.”
Limited Recourse on Default; No Acceleration of Base Rental Failure by the City to make Base Rental Payments or other payments required to be made under the Lease Agreement, or failure to observe and perform any other terms, covenants or conditions contained in the Lease Agreement or in the Indenture for a period of 30 days after written notice of such failure and request that it be remedied has been given to the City by the Authority or the Trustee, constitute events of default under the Lease Agreement and permit the Trustee or the Authority to pursue any and all remedies available. In the event of a default, notwithstanding anything in the Lease Agreement or in the Indenture to the contrary, there is no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable, nor do the Authority or the Trustee have any right to re-enter or re-let the Property except as described in the Lease Agreement.

The enforcement of any remedies provided in the Lease Agreement and the Indenture could prove both expensive and time consuming. If the City defaults on its obligation to make Base Rental Payments with respect to the Property, the Trustee, as assignee of the Authority, may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis and enforce any other terms or provisions of the Lease Agreement to be kept or performed by the City.

Alternatively, the Authority or the Trustee may terminate the Lease Agreement, retake possession of the Property and pr oceed against the City to recover damages pursuant to the Lease Agreement. Due to the specialized nature of the Property or any property substituted therefor pursuant to the Lease Agreement and the restrictions on its use, no assurance can be given that t he Trustee will be able to re -let the Property so as to provide rental income sufficient to make all payments of principal of, interest and premium, if any, on the Series 2024A Bonds when due, and the Trustee is not empowered to sell the Property for the benefit of the Owners of the Series 2024A Bonds. Any suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS” and APPENDIX B—“SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—THE LEASE AGREEMENT— Defaults and Remedies.”
Limitations on Remedies Available; Bankruptcy
The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of cred itors’ rights generally, now or hereafter in effect; usual equitable principles which may limit the specific enforcement under state law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of servicing a significant and legitimate public purpose.

Under Chapter 9 of the United States Bankruptcy Code (Title 11, United States Code) (the “Bankruptcy Code”), which governs bankruptcy proceedings of public entities such as the City, no involuntary bankruptcy 325

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petition may be filed against a public ent ity. However, upon satisfaction of certain prerequisite conditions, a voluntary bankruptcy petition may be filed by the City. The filing of a bankruptcy petition results in a stay against enforcement of remedies under agreements to which the bankrupt entity is a party. A bankruptcy filing by the City could thus limit remedies under the Lease Agreement. A bankruptcy debtor may choose to assume or reject executory contracts and leases, such as the Lease Agreement. In the event of rejection of a lease by debtor lessee, the leased property is returned to the lessor and the lessor has a claim for a limited amount of the resulting damages.

Under the Indenture, the Trustee holds a security interest in the Base Rental Payments for the benefit of the Owners of t he Bonds, but such security interest arises only when the Base Rental Payments are actually received by the Trustee following payment by the City. The Property is not subject to a security interest, mortgage or any other lien in favor of the Trustee for the benefit of Owners. In the event of a bankruptcy filed by the City and the subsequent rejection of the Lease Agreement by the City, the Authority would recover possession of the Property and the Trustee, as assignee of the Authority, would have a claim for damages against the City. The Trustee’s claim would constitute a secured claim only to the extent of Revenues in the possession of the Trustee; the balance of such claim would be unsecured.

Bankruptcy proceedings would subject the Owners of the Series 2024A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently entail risks of delay, limitation, or modification of their rights with respect to the Series 2024A Bonds. In a bankruptcy case, the amount recovered by Owners of the Series 2024A Bonds could be affected by whether the Lease Agreement is determined to be a “true lease” or a loan or other financing arrangement (a “financing lease”), and the Owners’ recovery could be reduced in either case. If the Lease Agreement is determined by the bankruptcy court to constitute a “true lease” (rather than a financing lease), the City could choose not to perform under the Lease Agreement by rejecting it and the claim of the Owners could be substantially limited pursuant to Section 365 of the Bankruptcy Code to a fraction of the scheduled amount of Base Rental Payments, and that reduced claim amount could be impaired as an unsecured claim under a plan of adjustment. If a bankruptcy court were to treat the Leas e Agreement as a financing lease then, under a plan of adjustment, the priority, payment terms, collateral, payment dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Series 2024A Bonds may be altered. Such a pl an could be confirmed even over the objections of the Trustee and the Owners, and without their consent. For example, the amount of the Base Rental Payments from the City might be substantially reduced because of the power of the bankruptcy court under the Bankruptcy Code to adjust secured claims to the value of their collateral, which, as described above, could be limited to the Base Rental Payments held by the Trustee.

In addition, there can be a substantial disparity in treatment based on the nature of the Property. Whether the Lease Agreement is characterized by the bankruptcy court as a true lease or a financing lease, either scenario could result in the Owners not receiving the full amount of the principal and interest due on the Series 2024A Bonds.

The opinions of counsel, including Bond Counsel, delivered in connection with the issuance of the Series 2024A Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.

Possible Insufficiency of Insurance Proceeds
The Lease Agreement obliga tes the City to keep in force various forms of insurance, subject to deductibles, for repair or replacement of the Property in the event of damage, destruction or title defects, subject to certain exceptions. The Authority and the City make no representation as to the ability of any insurer to fulfill its obligations under any insurance policy obtained pursuant to the Lease Agreement and no assurance can be given as to the adequacy of any such insurance to fund necessary repair or replacement or to pay pri ncipal of and interest on the Series 2024A Bonds when due. In addition, certain risks, such as earthquakes and floods, are not required to be insured under the Lease Agreement, and therefore, are not carried by the City. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS—Insurance.” 326

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Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” the interest on the Series 2024A Bond s could become includable in gross income for purposes of federal income taxation retroactive to the date of delivery of the Series 2024A Bonds, as a result of acts or omissions of the Authority or the City in violation of its covenants in the Indenture and the Lease Agreement. Should such an event of taxability occur, the Series 2024A Bonds would not be subjec t to a special redemption and would remain Outstanding until maturity or until redeemed under the redemption provisions contained in the Indenture.

No Liability of Authority to the Owners
Except as expressly provided in the Indenture, the Authority will not have any obligation or liability to the Owners of the Series 2024A Bonds with respect to the payment when due of the Base Rental Payments by the City, or with respect to the performance by the City of other agreements and covenants required to be performed by it contained in the Lease Agreement or the Indenture, or with respect to the performance by the Trustee of any right or obligation required to be performed by it contained in the Indenture.

Dependence on State for Certain Revenues
On January 10, 2024 , the Governor released his proposed State budget for fiscal year 2024 -25 (the “Proposed 2024-25 State Budget”). The following is drawn from the Department of Finance (“DOF”) and Legislative Analyst’s Office (“LAO”) summaries of the Proposed 2024-25 State Budget. The Proposed 2024- 25 State Budget reports that the State is facing a budgetary shortfall in 2024 of approximately $37.9 billion. The shortfall is rooted in two separate but related developments that have occurred over the past two fiscal years—a substantial decline in the stock market that drove down revenues and an unprecedented delay in critical income tax collections. The Proposed 2024 -25 State Budget indicates that, typically, the bulk of cash data relating to the prior tax year is available by April, leading to a revised May budget informed by actual cash collections. In calendar year 2023, due to federal and state income tax deadline delays resulting from several winter storms, the majority of the State’s revenues did not arrive until Octo ber and November. As a result, the corrections that would have been necessary to account for the decline in State revenues that would have normally come as part of last year’s May revision are instead being made in the Proposed 2024-25 State Budget.

The Proposed 2024 -25 State Budget also includes multiyear projections of revenues and spending.

Under the administration’s projections, the State faces operating deficits in 2025 -26 through 2027 -28 of $37 billion, $30 billion and $28 billion, respectively . The LAO notes that although these deficits are smaller than the one projected for 2024 -25, the State will have fewer options —such as one -time spending and draws on reserves—which could necessitate ongoing spending cuts or revenue increases The City cannot predict the extent of the budgetary problems the State may encounter in future fiscal years, and it is not clear what measures would be taken by the State to balance its budget, as required by law. In addition, the City cannot predict the impact that State budgets will have on the City’s finances and operations or what actions will be taken in the future by the State Legislature and the Governor to deal with changing State revenues and expenditures. Current and future State budgets will be affected by international, national and State economic conditions and other factors over which the City has no control.

A number of the City’s revenues are collected and dispersed by the State (such as sales taxes and the VLF) or allocated in accordance with State law (most importantly, property taxes). Therefore, State budget decisions can have an impact on City finances. In the event of a material economic downturn in the State, there can be no assurance that any resulting revenue shortfalls to the State will not r educe revenues to local governments (including the City) or shift financial responsibility for programs to local governments as part of the State’s efforts to address any such related State financial difficulties. 327

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Cybersecurity
The City, like many other p ublic and private entities, relies on a large and complex technology environment to conduct its operations. As a recipient and provider of personal, private, or sensitive information, the City is subject to multiple cyber threats including, but not limite d to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and systems . Entities or individuals may attempt to gain unauthorized access to the City’s digital systems for the purposes of misappropriating assets or information or causing operational disruption and damage. The City employs a multi -level cyber protection scheme that includes network firewalls, server - and personal computer - level anti -virus software, anti -spam/malware software, email protection as well as intrusion protection. The City also conducts periodic cybersecurity training for City employees. To date, the City has not experienced an attack on its computer operating systems which resulted in a breach of its cybersecurity systems that are in place. However, no assurances can be given that the City’s efforts to manage cyber threats and attacks will be successful or that any such attack will not materially impact the operations or finances of the City. Additionally, the City carries cybersecurity insurance.

CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS Principal of and interest on the Series 2024A Bonds are payable from Base Rental Payments made from the City’s General Fund. See the caption “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2024A BONDS.” Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, 218, 1A and 22, and certain other provisions of law discussed below are included in this Official Statement to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes.

Article XIIIA of the State Constitution
On June 6, 1978, State voters approv ed Proposition 13, which added Article XIIIA to the State Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to 1% of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service : (i) on indebtedness approved by the voters prior to December 1, 1978; (ii) on bonded indebtedness approved by a two-thirds vote on or after December 1, 1978, for the acquisition or improvement of real property; or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, including a general economic downturn, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways.

Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of time s since 1978 to implement Article XIIIA.

Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter- approved indebtedness). The 1% property tax is automatically levied by counties and distributed according to a formula among taxing agencies.

Increases in assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the 2% annual adjustment are allocated among the various jurisdictions in the “taxing area” 328

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based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full cash value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of taxable value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Article XIIIB of the State Constitution
In addition to the limits that Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues that such entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues and the investment proceeds thereof, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized as of October 1, 1979, or subsequently authorized by the voters (such as the Bonds), appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two - thirds of the legislative body of the local government.

The State and each local gover nment entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each local government’s actual appropriations be tested against its limit every two years.

If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.

The City’s appropriations have never exceeded the limitation on appropriations under Article XIIIB.

Articles XIIIC and XIIID of the State Constitution
On November 5, 1996, State voters approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the State Constitution and contains a number of interrelated provisions affecting the ability of the Ci ty to levy and collect both existing and future taxes, assessments and property-related fees and charges. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed b elow, and it is not possible at this time to predict with certainty the outcome of such determination.

Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City require a majority vote and taxes for specific purposes, even if deposited in the City’s General Fund, require a two -thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no 329

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assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property -related fees, charges, and assessments for municipal services and programs, such as hearings and stricter and more individualized benefit requirements and findings. These provisions include, among other things: (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel; (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits confe rred; (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligati on of the affected party; and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners. If the City is unable to continue to collect these revenues, the services and programs funded with these revenues would have to be curtailed and/or the City’s General Fund might have to be used to support them. The City is unable to predict whether or not in the future it will be able to continue all existing services and programs funded by the fees, charges and assessments in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be used from the City’s General Fund to continue to support such activities.

Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. This extension of the initiative power is not limited to taxes imposed on or after November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or reduction in any existing taxes, assessments, fees and charges, subject to overriding federal constitutional principles relating to the impairments of contracts. Legislation implementing Proposition 218 provides that the initiative power provided for in Proposition 218 “shall not be construed to mean that any owner or beneficial owner of a municipal security, purchased before or after (the effective date of Proposition 218) assumes the risk of, or in any way consents to, any action by initiative measure that constitutes an impairment of contractual rights ” protected by the United States Constitution. However, no assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund.

Although a portion of the City’s General Fund revenues are derived from taxes purported to be governed by Proposition 218, all of such taxes were imposed in accordance with the requirements of Proposition 218. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges which support the City’s General Fund.

Proposition 62
Proposition 62 was adopted by the voters at the November 4, 1986, general election and: (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax; (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two -thirds vote of the vote rs of the governmental entity voting in an election on the tax; (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed; (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA; (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities; and (f) requires that any tax imposed by a local governmental entity on or after July 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988. 330

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California appellate court cases have overturned the provisions of Proposition 62 pertaining to the imposition of taxes for general government purposes. However, the California Supreme Court upheld Proposition 62 in its decision on August 28, 1995 in Fresno County Transportation Authority v. Guardino. This decision reaffirmed the constitutionality of Proposition 62. Certain matters regarding Proposition 62 were not addressed in the Court’s decision, such as what remedies exist for taxpayers subject to a tax not in compliance with Proposition 62, and wheth er the decision applies to charter cities. The City has not experienced any substantive adverse financial impact as a result of the passage of Proposition 62.

Proposition 1A
Proposition 1A, proposed by the State Legislature in connection with the State’s fiscal year 2004-05 budget, approved by the voters in November 2004 and generally effective in State fiscal year 2006-07, provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004.

Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the Legislature. Proposition 1A provides, however, that beginning in State fiscal year 2008-09, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. The State also will not be able to borrow from local property tax revenues for more than two fiscal years within a period of ten fiscal years. In addition, the State cannot reduce the local sales tax rate or restrict the authority of local governments to impose or change the distribution of the State-wide local sales tax. The State may also approve voluntar y exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, 0.65% of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates.

Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State. However, Proposition 1A could also result in decreased resources being available for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City.

Many of the provisions of Proposition 1A have been superseded by Proposition 22 enacted in November 2010 and described below.

Proposition 22
On November 2, 2010, the voters of the State approved Proposition 22, known as “The Local Taxpayer, Public Safety, and Transportation Protection Act ” (“Proposition 22”). Proposition 22, among other things, broadens the restrictions established by Proposition 1A. While Proposition 1A permits the State to appropriate or borrow local property tax revenues on a temporary basis during times of severe financial hardship, Proposition 22 amends Article XIII of the State Constitution to prohibit the State from appropriating or borrowing local property tax revenues under any circumstances. The State can no longer borrow local property tax revenues on a temporary basis even during times of severe financial hardship. Proposition 22 also prohibits the State from appropriating or borrowing proceeds derived from any tax levied by a local government solely for the local government’s purposes. Furthermore, Proposition 22 restricts the State’s ability to redirect redevelopm ent agency property tax revenues to school districts and other local governments and limits uses of certain other 331

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funds although this provision no longer has any meaningful impact given the statewide dissolution of redevelopment agencies. Proposition 22 is intended to stabilize local government revenue sources by restricting the State government’s control over local revenues. The City cannot predict whether Proposition 22 will have a beneficial effect on the City’s financial condition
Proposition 26
On November 2, 2010, State voters also approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (c) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adj udication thereof; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e ) a fine, penalty or other monetary charge imposed by the judicial branch of government or a local government as a result of a violation of law; (f) a charge imposed as a condition of property development; and (g ) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 provides that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity. The City does not believe that Proposition 26 will adversely affect its General Fund revenues.

Possible Future Initiatives
General. Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 218, 111, 62, 1A, 22 and 26 were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

Initiative Measure Qualified for November 2024 Ballot – Taxpayer Prot ection and Government Accountability Act. A ballot initiative known as the “Taxpayer Protection and Government Accountability Act” (“Initiative 1935”) received the required number of signatures to appear on the November 5, 2024 Statewide ballot. If approved by a majority of voters casting a ballot at the November 5, 2024 Statewide election, Initiative 1935 would make numerous significant changes to Articles XIII, XIIIA, XIIIC and XIIID of the California Constitution to further limit the authority of local governments, and electors via the initiative process, to adopt and impose taxes and fees. The full text of Initiative 1935 may be viewed at the website of the California Attorney General.

Among other things, Initiative 1935 would amend the definition “tax” in Article XIIIC to include “every levy, charge, or exaction of any kind imposed by a local law that is not an exempt charge.” Initiative 1935 defines “exempt charge” to mean a “reasonable charge for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the actual costs [as opposed to the reasonable costs] of providing the service or product to the payor.” “Exempt charges” also encompass existing exceptions from the definition of “tax” added to Article XIIIC by Proposition 26, including property-related fees imposed in accordance with Article XIIID (see “ —Articles XIIIC and XIIID of the California Constitution – Proposition 218,” above). “Actual costs” is defined as “the minimum amount necessary to reimburse the government for the cost of providing the service or product … less all other sources of revenue including, but not limited to taxes, other exempt charges, grants, and state or federal funds received 332

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to provide such service or product.” Initiative 1935 further provides that the local government adopting an exempt charge would bear the burden of proving by clear and convincing evidence (as opposed to a preponderance of the evidence) that: (a) a levy, charge or exaction is an exempt charge and not a tax; and (b) the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. Initiative 1935 would also amend Article XIIIC to provide that no local law, whether proposed by the governing body or by an elector, may impose any special tax unless and until that tax is submitted to the electorate and approved by a two -thirds vote. The full definitions of the terms referenced above, along with the full text of Initiative 1935, may be viewed at the website of the California Attorney General.

Initiative 1935 is retroactive, and provides that any tax or exempt charge adopted after January 1, 2022 but prior to the effective date of Init iative 1935, which was not adopted in compliance with the requirements thereof, would be void 12 months after the effective date of Initiative 1935, unless the tax or exempt charge is reenacted in compliance with the provisions of Initiative 1935.

The City cannot predict whether Initiative 1935 will be approved at the November 5, 2024 Statewide election. If Initiative 1935 is approved, the City cannot provide any assurances that it will not have a material adverse effect on the City’s ability to adopt or increase rates, fees, and charges for the various services provided by the City.

TAX MATTERS
In the opinion of Stradling Yocca Carlson & Rauth LLP , Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions , and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. However, it should be noted that for tax years beginning after December 31, 2022, with respect to applicable corporations as define d in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Series 2024A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2024A Bonds is exempt from State of California personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2024A Bonds is based upon certain representations of fact and certifications made by the Authority and others and is subject to the condition that the Authority comply with all requirements of the Code that must be satisfied subsequent to the issua nce of the Series 2024A Bonds to assure that interest (and original issue discount) on the Series 2024A Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Series 2024A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2024A Bond s. The Authority has covenanted to comply with all such requirements.

In the opinion of Bond Counsel, the difference between the issue price of a Series 2024A Bond (the first price at which a substantial amount of the Series 2024A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity of such Series 2024A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The a mount of original issue discount deemed received by a Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Series 2024A Bond.

The amount of original issue discount that accrues to the Beneficial Owner of a Series 2024A Bond is excluded 333

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from the gross income of such Beneficial Owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals, and is exempt from State of California personal income tax.

The amount by which a Series 2024A Bond Owner’s original basis for determining loss on sale or exchange in the applicable Series 2024A Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amort izable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Series 2024A Bond Owner’s basis in the applicable Series 2024A Bond (and the amount of tax-exempt interest received with respect to the Series 2024A Bonds), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Series 2024A Bond Owner realizing a taxable gain when a Series 2024A Bond is sold by the Owner fo r an amount equal to or less (under certain circumstances) than the original cost of the Series 2024A Bond to the Owner. Purchasers of the Series 2024A Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.

The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2024A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2024A Bonds might be affected as a result of such an audit of the Series 2024A Bonds (or by an audit of similar municipal obligations). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Series 2024A Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue dis count) on the Series 2024A Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2024A BONDS THERE MIGHT BE

FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES

TO OR INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE SERIES 2024A BONDS, INCLUDING THE IMPOSITION

OF ADDITIONAL FEDERAL INCOME OR STATE TAXES ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE SERIES 2024A BONDS . THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE SERIES 2024A BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2024A

BONDS STATUTORY CHANGES WILL NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR

REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE SERIES 2024A BONDS , ALL POTENTIAL

PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS R EGARDING POSSIBLE STATUTORY

CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE SERIES 2024A BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Series 2024A Bonds permit cer tain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) for federal income tax purposes with respect to any Series 2024A Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.

Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Series 2024A Bond s is excluded from gross income for federal income tax purposes provided that the Authority continues to comply with certain requirements of the Code, the ownership of the Series 2024A Bonds and the accrual or receipt of interest (and original issue discount) on the Series 2024A Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no opinion regarding any such tax consequences. 334

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Accordingly, before purchasing any of Series 2024A Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Series 2024A Bonds.

Should interest (and original issue discount) on the Series 2024A Bonds become includable in gross income for federal income tax purposes, the Series 2024A Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.

A complete copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix D.

CERTAIN LEGAL MATTERS
The validity of the Series 2024A Bonds and certain other legal matters are subject to the approving opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel. Stradling Yocca Carlson & Rauth LLP is also acting as Disclosure Counsel for the City and represented the City in connection with negotiation of the Project Agreement. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto.

Bond and Disclosure Counsel will receive compensation from the City contingent upon the sale and delivery of the Series 2024A Bonds. From time to time, Bond and Disclosure Counsel represents the Underwriter on matters unrelated to the Series 2024A Bonds. Certain legal matters wi ll be passed upon for the Underwriter by Anzel Galvan LLP. Counsel to the Underwriter will receive compensation contingent upon the issuance of the Series 2024A Bonds.

ABSENCE OF LITIGATION
To the best knowledge of the City and the Authority, there is no action, suit or proceeding pending or threatened either restraining or enjoining the execution or delivery of the Series 2024A Bonds , the Lease Agreement, the Ground Lease or the Indenture, or in any way contesting or affecting the validity of the foregoing or any proceedings of the Authority or the City taken with respect to any of the foregoing.

UNDERWRITING
The Series 2024A Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). The Underwriter will purchase the Series 2024A Bonds from the Authority at an aggregate purchase price of $__________ (representing the principal amount of the Series 2024A Bonds, [plus/less] a [net] original issue [premium/discount] of $___________ and less an Underwriter’s discount of $___________) The purchase agreement relating to the Series 2024A Bonds provides that the Underwriter will purchase all of the Series 2024A Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in such purchase agreement, the approval of certain legal matters by counsel and certain other conditions.

The initial offering prices that are stated on the inside front cover page of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Series 2024A Bonds to certain dealers (including dealers depositing Series 2024A Bonds into investment trusts), dealer banks, banks acting as agent and others at prices lower than said public offering prices.

RATING
S&P Global Ratings, a Standard & Poor’s Financial Services LLC business ( “S&P”) has assigned an issuer credit rating of “_____” with a stable outlook to the Series 2024A Bonds. Such rating reflect s only the views of S&P and any desired explanation of the significance of such rating should be obtained from the rating agency furnishing the same. Generally, a rating agency bases its ratings on the information and materials furnished to it and on investigations, studies and assumptions of its own. There is no assurance such rating will continue for any given period of time or that such rating will not be revised downward or withdrawn entirely by 335

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the rating agency, if in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of the rating may have an adverse effect on the market price of the Series 2024A Bonds.

None of the Authority, the City, or the Underwriter has undertaken any responsibility either to bring to the attention of the owners of the Series 2024A Bonds a proposed change in or withdrawal of any rating or to oppose any such proposed revision or withdrawal.

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc. has acted as municipal advisor (the “Municipal Advisor”) to the Authority and City in conjunction with the issuance of the Series 2024A Bonds. The Municipal Advisor has assisted in matters related to the planning, structuring, execution, and delivery of the Series 2024A Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Series 2024A Bonds.

The Municipal Advisor has not audited, authenticated, or otherwise independently verified the information set forth in this Official Statement, or any other related information available, with respect to accuracy and completeness of disclosure of such information. Because of this limited participation, the Municipal Advisor makes no guaranty, warranty, or other representation with respect to the accuracy or completeness of this Official Statement, or any other matter related to this Official Statement.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of the Owners of the Series 2024A Bonds to provide annually certain financial information and operating data relating to the Series 2024A Bonds and the City (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. For a complete listing of items of information which will be provided in each Annual Report and further description of the City’s undertaking with respect to the Annual Report and certain enumerated events, see APPENDIX E—“FORM OF CONTINUING DISCLOSURE CERTIFICATE.” The Annual Report is to be provided by the City not later than March 31 after the end of the City’s fiscal year, commencing with the report for fiscal year 2023-24. The Annual Report will be filed by the City with the Municipal Securities Rulemaking Board. These covenants have been made in order to assist the Underwriter in complying with Rule 15c2-12. [Within the last five years, th e City and its related entities have not failed to timely file all required information pursuant to its existing continuing disclosure undertakings pursuant to Rule 15c2 -12.] [TO BE UPDATED BASED ON UNDERWRITER REVIEW]

FINANCIAL STATEMENTS OF THE CITY
Included herein as Appendix C are the audited financial statements of the City for the year ended June 30, 2023, together with the report thereon dated December 22, 2023 of Davis Farr LLP, Irvine, California, certified public accountants (the “Auditor”). Such audited financial statements have been included herein in reliance upon the report of the Auditor. The City’s financial statements are public documents and are included within this Official Statement without the prior approval of the Auditor. Accordingl y, the Auditor has not performed any post-audit review of the financial condition of the City and also has not performed any procedures relating to this Official Statement. The Auditor has not undertaken to update the audited financial statements of the City or its report, and no opinion is expressed by the Auditor with respect to any event subsequent to its report dated December 22, 2023.

MISCELLANEOUS
References are made herein to certain documents and reports which are brief summaries thereof which do not purport to be complete or definitive and reference is made to such documents and reports for full and complete statements of the contents thereof. Copies of the Indenture, the Lease Agreement, the Ground Lease and other documents are available, upon request, and upon payment to the City of a charge for copying, mailing 336

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and handling, from the City Clerk at the City of Garden Grove, 11222 Acacia Parkway, Garden Grove, California 92840.

Any statements in this Official Statement involving matters of opinio n, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority or the City and the purchasers or Owners of any of the Series 2024A Bonds.

The execution and delivery of this Official Statement have been duly authorized by the Authority and the City.

GARDEN GROVE PUBLIC FINANCING

AUTHORITY
By:

Executive Director

CITY OF GARDEN GROVE
By:

City Manager

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APPENDIX A

ECONOMIC AND DEMOGRAPHIC INFORMATION

REGARDING THE CITY OF GARDEN GROVE
Population
The following table summarizes population estimates for the City of Garden Grove, the County and the State from 2019 through 2023.

POPULATION ESTIMATES
City of Garden Grove,
County of Orange and State of California
2019-2023(1)
Year
(January 1)
City of
Garden Grove
County of
Orange
State of
California
2019 174,038 3,185,378 39,605,361
2020 173,457 3,180,491 39,648,938
2021 171,464 3,167,783 39,286,510
2022 171,195 3,151,946 39,078,674
2023 171,183 3,137,164 38,940,231

(1) January 1 data.

Source: California State Department of Finance, Demographic Research Unit., E-4 Population Estimates for Cities, Counties, and the State, 2010 -2020, with 2010 Census Benchmark, and E -4 Population Estimates for Cities, Counties, and the State, 2020-2023, with 2020 Benchmark.

Building Activity
The annual building permit valuations and number of permits for new dwelling units issued for the past five years of data currently available for the City and County are shown in the following tables.

BUILDING PERMITS AND VALUATIONS
2018 through 2022
City of Garden Grove
(Dollars in Thousands)
2018 2019 2020 2021 2022
Valuation
Residential $38,211 $38,850 $30,099 $ 40,626 $34,665
Non-Residential 55,454 37,332 18,850 19,786 52,230 Total $93,665 $76,182 $48,949 $60,412 $86,895

Units
Single Family 157 219 208 264 269
Multiple Family 51 406 4 2 0
Total 208 625 212 266 269

Note: Totals may not sum due to rounding.

Source: Construction Industry Research Board.
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BUILDING PERMITS AND VALUATIONS
2018 through 2022
Orange County
(Dollars in Thousands)
2018 2019 2020 2021 2022
Valuation
Residential $3,188,601 $2,750,619 $1,870,958 $2,393,961 $2,214,772 Non-Residential 2,090,029 3,532,285 1,984,321 1,825,076 1,825,076 Total $5,278,630 $6,282,904 $3,855,279 $4,219,037 $4,039,848

Units
Single Family 5,097 3,975 3,125 3,292 2,929
Multi Family 5,197 4,130 7,169 4,382 3,405
Total 10,294 8,105 10,294 7,674 6,334

Note: Totals may not add to sum because of rounding.

Source: Construction Industry Research Board.

Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ inc ome with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.

The f ollowing table summarizes per capita personal income for the City, the County, the State of California and the United States for the years 2013 through 2022. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

PER CAPITA PERSONAL INCOME(1)
County of Orange, State of California, and United States 2013-2022
Year
County of
Orange California United States
2013 $53,545 $48,076 $44,401
2014 55,461 50,619 46,287
2015 59,242 53,817 48,060
2016 61,188 55,863 48,971
2017 63,513 58,214 51,004
2018 66,058 60,984 53,309
2019 69,590 64,174 55,547
2020 75,572 70,061 59,153
2021 81,567 76,991 64,430
2022 83,553 77,036 65,470

(1) Per capita personal income is the total personal income divided by the total mid-year population estimates of the U.S. Bureau of the Census. All dollar estimates are in current dollars (not adjusted for inflation).

Source: U.S. Department of Commerce, Bureau of Economic Analysis. 339

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Employment
The following table summarizes the labor force, employment and unemployment figures for the past five years of data currently available for the City, the County, the State and the United States.

CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
2018 through 2022(1)
City of Garden Grove, Orange County, the State of California and the Unites States Year and Area Labor Force Employment(2) Unemployment
Unemployment
Rate (%)(3)
2018
City of Garden Grove 81,600 78,900 2,700 3.3%
Orange County 1,616,100 1,568,300 47,900 3.0
State of California 19,289,500 18,469,900 819,600 4.2
United States 162,075,000 155,761,000 6,314,000 3.9

2019
City of Garden Grove 81,300 78,800 2,500 3.1%
Orange County 1,616,800 1,571,300 45,500 2.8
State of California 19,413,200 18,617,900 795,300 4.1
United States 163,539,000 157,538,000 6,001,000 3.7

2020
City of Garden Grove 81,300 71,700 9,600 11.9%
Orange County 1,566,900 1,427,000 139,900 8.9
State of California 18,971,600 17,047,600 1,924,000 10.1 United States 160,742,000 147,795,000 12,947,000 8.1

2021
City of Garden Grove 79,700 73,700 6,000 7.5%
Orange County 1,560,700 1,467,300 93,400 6.0
State of California 18,973,400 17,586,300 1,387,100 7.3 United States 161,204,000 152,581,000 8,623,000 5.3

2022
City of Garden Grove 80,200 77,400 2,800 3.5%
Orange County 1,590,900 1,540,600 50,300 3.2
State of California 19,252,000 18,440,900 811,100 4.2
United States 164,287,000 158,291,000 5,996,000 3.6

Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.

Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department. March 2022 Benchmark.

Industry
The County is included in the Anaheim -Santa Ana -Irvine Metropolitan Di strict (the “MD”). The distribution of employment in the MD is presented in the following table for the past five calendar years. These 340

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figures are multi county -wide statistics and may not necessarily accurately reflect employment trends in the County.

INDUSTRY EMPLOYMENT & LABOR FORCE ANNUAL AVERAGES
Anaheim-Santa Ana-Irvine Metropolitan Division
(Orange County)
2018-2022(1)
2018 2019 2020 2021 2022
Farming 2,000 1,900 1,900 2,000 1,600
Mining and Logging 500 500 400 400 300
Construction 105,900 106,100 101,300 102,200 106,500
Manufacturing 160,800 160,100 150,100 149,800 155,400
Wholesale Trade 79,800 79,400 79,400 75,600 76,900
Retail Trade 152,600 150,500 137,600 143,400 146,000
Transportation, Warehousing and Utilities 29,200 29,500 29,600 31,100 33,700 Information 26,700 26,000 24,100 24,000 24,800
Financial Activities 118,700 117,600 115,900 117,100 114,100 Professional and Business Services 317,300 328,400 309,200 321,700 332,500 Education and Health Services 225,200 233,100 225,800 237,300 249,500 Leisure and Hospitality 222,600 227,700 161,800 180,400 217,700 Other Services 51,400 52,000 44,100 47,500 52,700
Government 161,200 162,500 156,100 155,700 160,200 Total: 1,653,800 1,675,300 1,532,700 1,587,900 1,671,500

Note: The “Total, All Industries” data is not directly comparable to the employment data found herein. (1) Employment is reported by place of work; it does not include persons involved in labor -management disputes. Figures are rounded to the nearest hundred. Columns may not add to totals due to rounding.

Source: State of California, Employment Development Department, Industry Employment & Labor Force by Annual Average, March 2021 Benchmark.

Principal Employers
The following tables list the principal employers located in the City and the County for the periods shown below.

MAJOR EMPLOYERS
City of Garden Grove
2023
Rank Name of Business Employees Percent of Total City Employment

1. Great Wolf Lodge Southern California 700 0.83%

2. Air Industries Company 625 0.74

3. Garden Grove Hospital Medical Center 516 0.61

4. Hyatt Regency Orange County 424 0.50

5. GKN Aerospace Transparency Systems Inc 409 0.49

6. Safran Cabin Inc 350 0.42

7. Costco #126 323 0.38

8. Full Clip 310 0.37

9. Walmart #4171 272 0.32

10. Saint Gobain Performance Plastics Corp. 226 0.27

Source: City of Garden Grove Annual Comprehensive Financial Report for the year ending June 30, 2023. 341

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PRINCIPAL EMPLOYERS
2023
Orange County
Rank: Employer Employees

1. Walt Disney Co. 25,000

2. University of California, Irvine 22,253

3. County of Orange 18,035

4. St. Joseph Health System 12,062

5. Boeing Co. 6,890

6. Kaiser Permanente 6,040

7. Bank of America Corp. 6,000

8. Walmart Inc. 6,000

9. MemorialCare 5,635

10. Target Corp. 5,400

Source: County of Orange, Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2023.

Education
K-12 public instruction in the City is provided by the Garden Grove Unified School District, which is the third largest school district in Orange County. The City includes 70 elementary schools, 48 Intermediate schools, 10 High schools, 8 Special education schools, 2 Adult education schools and one technical education school.

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APPENDIX B

SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS

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APPENDIX C
AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR ENDED JUNE 30, 2023

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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION
[Closing Date]
Garden Grove Public Financing Authority
Garden Grove, California
Re: Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A Ladies and Gentlemen:

We have acted as bond counsel to the Garden Grove (the “Authority”) in connection with the issuance by the Authority of $__________ Lease Revenue Bonds, Series 2024A (the “Series 2024A Bonds”), pursuant to the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”), and pursuant to an Indenture, da ted as of June 1, 2024 (the “Indenture”), by and among the Authority, the City of Garden Grove (the “City”) and U.S. Bank Trust Company, National Association, as Trustee. The Series 2024A Bonds will be principally secured by lease payments to be made by the City pursuant to a Lease Agreement, dated as of June 1, 2024 (the “Lease”), by and between the Authority and the City. We have examined the law and such certified proceedings and other documents, agreements, opinions and matters as we deem necessary to render this opinion. This opinion is based on current statutory and constitutional law and published court decisions as of the date hereof. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Indenture.

As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Indenture and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.

We have assumed the genuineness of all documents and signatures presented to us, the authenticity of documents submitted as originals and the conformity to originals of documents submitted as copies. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions referred to in the preceding paragraphs of this opinion. Furthermore, we have assumed compliance with all covenants and agreements contained in the Indenture, the Lease and the Ground Lease. We call attention to the fact that the rights and obligations under the Series 2024A Bonds , the Indenture, the Lease, th e Ground Lease, the Assignment Agreement and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equit able principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against cities and public agencies in the State of California.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Series 2024A Bonds , the Indenture, the Lease, the Ground Lease or the Assignment Agreement; nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Indenture, the Lease or the Ground Lease, or the accuracy or sufficiency of the description contained therein, or the remedies available to enforce liens on, any such property contained therein.
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Based upon the foregoing we are of the opinion, under existing law, as follows:

1. The Authority is a joint exercise of powers authority duly organized and validly existing under the laws of the State of California with the full power to enter into the Indenture and the Lease, to perform the agreements on its part contained therein and to issue the Series 2024A Bonds.

2. The Indenture and the Lease have each been duly authorized and approved by the Authority and the Indenture and the Lease constitute the valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms. The Indenture creates a valid pledge of the Base Rental Payments and other moneys pledged under the Indenture, subject to the provisions of the Indenture.

3. The Indenture and the Lease have each been duly authorized and approved by the City and the Indenture and the Lease constitute the valid and binding obligations of the City enforceable against the City in accordance with their respective terms.

4. The Series 2024A Bonds have been duly and validly authorized by the Authority and are legal, valid and binding limited obligations of the Authority, enforceable in accordance with their terms and the terms of the Indenture. The Series 2024A Bonds are limited obligations of the Authority payable solely from the Base Rental Payments and other moneys pledged under the Indenture as provided in the Indenture, but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. The Authority has no taxing power.

5. Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Series 2024A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, for tax years beginning after December 31, 2022, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Series 2024A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.

6. Interest (and original issue discount) on the Series 2024A Bonds is exempt from personal income taxes imposed in the State of California.

7. The difference between the issue price of a Series 2024A Bond (the first price at which a substantial amount of the Series 2024A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Series 2024A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Series 2024A Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Series 2024A Bond Owner will increase the Series 2024A Bond Owner’s basis in the applicable Series 2024A Bond. Original issue discount that accrues to the Series 2024A Bond Owner is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals (as described in paragraph 5 above) and is exempt from State of California personal income tax.

8. The amount by which a Series 2024A Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Series 2024A Bond premium which must be amortized under Section 171 of the Code; such amortizable Series 2024A Bond premium reduces the Series 2024A Bond Owner’s basis in the applicable Series 2024A Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Series 2024A Bond premium may result in a Series 2024A Bond Owner realizing a taxable gain when a Series 2024A Bond is sold 346

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by the owner for an amount equal to or less (under certain circumstances) than the original cost of the Series 2024A Bond to the owner.

The opinions expressed in paragraphs (5) and (7) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2024A Bonds are subject to the condition that the Authority and the City comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Se ries 2024A Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Series 2024A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2024A Bonds. The Authority and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (5), (6), (7) and (8) above, we express no opinion as to any tax consequences related to the Series 2024A Bonds.

Certain requirements and procedures contained or referred to in the Indenture, the Lease and Tax Certificate may be changed, and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in the Indenture, the Lease and Tax Certificate, upon the advice or with the approving opinion of counsel nationally recognized in the area of tax-exempt obligations. We express no opinion as to the effect on the exclusion of interest on the Series 2024A Bonds from gross income for federal income tax purposes on and after the date on which any such change occurs or action is taken upon the advice or approval of counsel other than Stradling Yocca Carlson & Rauth LLP.

Our opinion is limited to matters governed by the laws of the State of California and federal law.

We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do oc cur (or do not occur). Our engagement with respect to the Series 2024A Bonds terminates upon their issuance, and we disclaim any obligation to update the matters set forth herein.

We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Series 2024A Bonds . We expressly disclaim any duty to advise the owners of the Series 2024A Bonds with respect to the matters contained in the Official Statement and any other offering material relating to the Series 2024A Bonds.

Respectfully submitted,

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

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APPENDIX F

BOOK-ENTRY ONLY SYSTEM
The information in this section concerning DTC and DTC’s book -entry only system has been obtained from sources that the Authority believes to be reliable, but the Authority takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Series 2024A Bonds, payment of principal, premium, if any, accreted value and interest on the Series 2024A Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Series 2024A Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

1. The Depository Trust Company ( “DTC”), New York, NY, will act as securities depository for the Series 2024A Bonds (the “Securities”). The Securities will be issued as fully -registered securities registered in the name of Ced e & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates th e need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Di rect Participant, either directly or indirectly ( “Indirect Participants ”). DTC has Standard & Poor’s highest rating: “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security ( “Beneficial Owner ”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.

Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the e vent that use of the book -entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other na me as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the 349

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actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participa nts to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding th e Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

6. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority a s soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s rece ipt of funds and corresponding detail information from the Authority or the Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instr uctions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name, ” and will be the responsibility of such Participant and not of DTC, the Paying Agent, or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

9. If applicable, a Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to tender/remarketing agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to tender/remarketing agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rig hts in the Securities are transferred by Direct Participants on DTC’s records and followed by a book -entry credit of tendered Securities to tender/remarketing agent’s DTC account.

10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the Authority or the Paying Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.

11. The Authority may decide to discontinue use of the system of book -entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 350
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RECORDING REQUESTED BY:

Garden Grove Public Financing Authority
AND WHEN RECORDED MAIL TO:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE AND THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE BECAUSE THE ASSIGNOR IS A GOVERNMENTAL AGENCY. LEASE TERM LESS THAN 35 YEARS.

THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.

MEMORANDUM OF LEASE AGREEMENT
by and between

CITY OF GARDEN GROVE
and

GARDEN GROVE PUBLIC FINANCING AUTHORITY
Dated as of June 1, 2024
Relating to
$__________

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A

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MEMORANDUM OF LEASE AGREEMENT
THIS MEMORANDUM OF LEASE AGREEMENT (the “Memorandum”) is made and entered into as of the 1st day of June, 2024, by and between the CITY OF GARDEN GROVE , a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and the laws of the State of California (the “City”) and the GARDEN GROVE PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”).

The City has pursuant to a Ground Lease, dated as of June 1, 2024 (the “Ground Lease”), by and between the City and the Authority, which Ground Lease is being recorded concurrently herewith, leased all of the real property legally described in Exhibit A and Exhibit B attached hereto to the Authority.

FOR VALUABLE CONSIDERATION, the Authority hereby leases to the City, and the City hereby leases back from the Authority, all of the real property legally described in Exhibit A and Exhibit B attached hereto, subject to the terms and conditions of that certain unrecorded Lease Agreement, dated as of June 1, 2024 (the “Lease”), by and between the City and the Authority, which by this reference is incorporated herein. All capitalized terms in th is Memorandum not otherwise defined herein shall have the same meaning as set forth in the Lease.

The Authority’s rights under the Lease, including the right to receive and enforce payment of the Rental Payments to be made by the City under the Lease, have been assigned and transferred to U.S. Bank Trust Company, National Association, a national banking association organized and existing under the laws of the United States, as trustee pursuant to the unrecorded Indenture (the “Trustee”), without recourse for the benefit of the Owners of the Bonds , pursuant to the Assignment Agreement, dated as of June 1, 2024, by and between the Authority and the Trustee, to which assignment, transfer and sale the City hereby consents.

The term of the Lease shall commence on the Closing Date and shall end on [April 1, 2054], unless such term is extended as provided in the Lease. If on [April 1, 2054] the Bonds shall not be fully paid, or provision therefor made in accordance with the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and payable or shall have been abated at any time and for any reason, then the term of the Lease shall be extended until the date upon which (i) all Bonds shall be fully paid, or provision therefor made in accordance with the Indenture, or (ii) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full.

Notwithstanding the foregoing, the term of the Lease shall in no event be extended more than ten years beyond [April 1, 2054], such extended date being the “Maximum Lease Term.” If prior to [April 1, 2054] all Bonds shall be fully paid, or provision therefor made in accordance with the Indenture, the Indenture shall be discharged by its terms , and all Rental Payments shall have been paid in full, the term of the Lease shall end simultaneously therewith.

Furthermore, pursuant to the terms and conditions set forth in the Lease, the City may release the Release Property described in Exhibit B hereto upon completion of construction of the Project as provided in the Lease, and the City may substitute additional real property for the property described in Exhibit A and/or Exhibit B or delete portions of the real property described therein from the Lease. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Memorandum of Lease as of the day and year first hereinabove written.

CITY OF GARDEN GROVE
By:

Steven R. Jones
Mayor
ATTEST:

Teresa Pomeroy
City Clerk

GARDEN GROVE PUBLIC FINANCING

AUTHORITY
By:

Steven R. Jones
Chair
ATTEST:

Teresa Pomeroy
Secretary

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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property conveyed under the foregoing to the City of Garden Grove, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the City Council of the City of Garden Grove , pursuant to authority conferred by resolution of said City Council adopted on April 9, 2024, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: June 1, 2024 CITY OF GARDEN GROVE
By:

Lisa Kim, City Manager

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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 ORANGE )

On ___________________ before me, ____________________________________, Notary Public,

personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the p erson(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

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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 ORANGE )

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

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROJECT SITE
[To come]

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EXHIBIT B

LEGAL DESCRIPTION OF THE RELEASE PROPERTY
[To come]

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Draft of 4/2/24

4873-0500-9569v6/022046-0062
RECORDING REQUESTED BY:

Garden Grove Public Financing Authority
AND WHEN RECORDED RETURN TO:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Vanessa S. Legbandt, Esq.

[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE.

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. THE ASSIGNOR IS A GOVERNMENTAL AGENCY.

ASSIGNMENT AGREEMENT
by and between

GARDEN GROVE PUBLIC FINANCING AUTHORITY
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of June 1, 2024
Relating to
$__________

GARDEN GROVE PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2024A
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ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this “Assignment Agreement”), executed and entered into as of June 1, 2024, is by and between the GARDEN GROVE PUBLIC FINANCING AUTHORITY, a joint exercise of powers entity organized and existing under and by virtue of the laws of the State of California (the “Authority”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States, as Trustee (the “Trustee”).

WITNESSETH:

WHEREAS, the City has entered into that certain Project Agreement dated as of April 1, 2024 (the “Project Agreement”), with Edgemoor Garden Grove Civic Center Partners, LLC, a Maryland limited liability company (“Edgemoor”), pursuant to which Edgemoor has agreed to design and construct certain public capital improvements to be located at Acacia Parkway, east of Euclid Street, in the City, including an approximately 100,000 square foot public safety facility, a four-level parking structure that will provide approximately 350 parking spaces, and a reconfigured 2.8-acre Civic Center Park, as well as the demolition of the existing police headquarters building located at 11301 Acacia Parkway in the City (collectively, the “Project”);
WHEREAS, the City and the Authority desire to finance all or a portion of the acquisition, construction, installation, and demolition work constituting the Project as provided in the Project Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “ Garden Grove Public Financing Authority Lease Revenue Bonds, Series 2024A ” (collectively, the “ Series 2024A Bonds”) for the purpose of financing the Project; WHEREAS, in order to facilitate the issuance of the Series 2024A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof and record ed concurrently herewith (the “Ground Lease”), and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof , a memorandum of which will be recorded concurrently herewith (the “Lease Agreement”);
WHEREAS, during the construction of the Project, the Property will consist of the Project Site (defined below and described in Exhibit A) and the Release Property (defined below and described in Exhibit B); upon completion of constru ction of the Property the City is permitted to release the Release Property from the Lease Agreement and the Ground Lease as provided in more detail in Section 10.04 of the Lease Agreement;
WHEREAS, under the Lease Agreement, the City is obligated to make Base Rental Payments (as defined in the Lease Agreement) to the Authority;
WHEREAS, the Authority desires to assign without recourse certain of its rights in the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments, to the Trustee 360

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for the benefit of the owners of the Series 2024A Bonds to be issued pursuant to the Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and the Trustee; WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Assignment Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Assignment Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties hereto do hereby agree as follows:

Section 1. Assignment. The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Trustee, irrevocably and absolutely, without recourse, for the benefit of the owners of the Series 2024A Bonds, all of its right, title and interest in and to the Ground Lease and the Lease Agreement including, without limitation, its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Authority shall retain its obligations under the Lease Agreement and Ground Lease, the rights to indemnification, to give approvals and consents under the Lease Agreement and the Ground Lease and to payment or reimbursement of its reasonable costs and expenses under the Lease Agreement.

Section 2. Acceptance. The Trustee hereby accepts the foregoing assignment, subject to the terms and provisions of the Indenture, and all such Base Rental Pay ments shall be applied and the rights so assigned shall be exercised by the Trustee as provided in the Lease Agreement and the Indenture.

Section 3. Conditions. This Assignment Agreement shall impose no obligations upon the Trustee beyond those expressly provided in the Indenture.

Section 4. Further Assurances. The Authority shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Assignment Agreement, and for the better assuring and confirming to the Trustee, for the benefit of the owners of the Series 2024A Bonds, the rights intended to be conveyed pursuant hereto.

Section 5. Governing Law . THIS ASSIGNMENT AGREEMENT SHALL BE

GOVERNED EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 6. Execution. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Assignment Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF , the Authority and the Trustee have caused this A ssignment Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above-written.

GARDEN GROVE PUBLIC FINANCING

AUTHORITY
By:

Steven R. Jones
Chair
ATTEST:

Teresa Pomeroy
Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
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[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By:
[NAME]
Authorized Officer

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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 ORANGE )

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

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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 LOS ANGELES )

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

365

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EXHIBIT A

LEGAL DESCRIPTION OF THE PROJECT SITE
[To come]

366

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EXHIBIT B

LEGAL DESCRIPTION OF THE RELEASE PROPERTY
[To come]

367

City of Garden Grove

INTER-DEPARTMENT MEMORANDUM

To:

Lisa L. Kim From: Ursula Luna-Reynosa
Dept:

City Manager Dept: Economic Development and
Housing
Date: 4/9/2024

Subject: Approval of the Fiscal Year 2024-25 Action Plan for the use of the U.S.

Department of Housing and Urban Development Funding. (Action Item)

OBJECTIVE
For the City Council to conduct a public hearing for the City of Garden Grove's (City) FY 2024-25 Action Plan (Action Plan) for the use of the U.S. Department of Housing and Urban Development (HUD) funds (Attachment No. 1), and to approve the submittal of the Action Plan to HUD.

BACKGROUND
The U.S. Department of Housing and Urban Development (HUD) requires a public hearing be conducted prior to the approval of the Annual Action Plan to receive and utilize HUD grants. The City must submit an Annual Action Plan to HUD forty-five (45) days prior to the start of the fiscal year, or by May 15, 2024. Each year’s Action Plan must address the Priority Objectives adopted by the City Council on June 23, 2020 for the 5-Year Consolidated Plan for the use of HUD Funds. The draft Action Plan is available on the City’s webpage for public review until April 9, 2024, at ggcity.org/neighborhood-improvement/reports.

HUD has not announced the City’s FY 2024-25 grant allocations yet, and the budgets and projections in the draft Action Plan are subject to change once the allocations are announced. City Staff will use the budget breakdown that is provided in Appendix D of the draft Action Plan to adjust the funding levels for each program.

DISCUSSION
Approximately $2.75 million in HUD funds will be available during FY 2024-25, inclusive of approximately $15,526 of carryover funds, as depicted below:
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HUD Funds FY 2024-25 Allocation Prior Year Carryover Total Funding CDBG $1,832,741 $0 $1,832,741
HOME $737,254 $0 $737,254
ESG $169,786 $15,526 $185,312
Total $2,739,781 $15,526 $2,755,307

Program and funding recommendations for FY 2024-25 are based on HUD's priority objectives as well as input received during the preparation of the 2020-2025 Consolidated Plan.

During FY 2024-25, HUD funds will address a wide range of Garden Grove housing and community development needs, which include the following:

Public Services: Funding in the CDBG public service category is strictly limited by HUD regulatory formula to 15% of the total allocation, or $277,603 for FY 2024-

25.  Special Resource Team – Fund at $110,000 to assist 200 homeless individuals with essential services and referrals to emergency shelter.
 Senior Center Services – Fund at $147,603 to assist 300 seniors.  Meals on Wheels Program – Fund at $20,000 to assist 190 individuals.

Public Facilities and Infrastructure: Approximately $800,000 in CDBG funds is recommended for the Monroe Street Rehabilitation Project and is projected to assist approximately 2,335 individuals.

Owner Occupied Housing Rehabilitation: Approximately $135,000 in CDBG funds will be allocated to Habitat for Humanity of Orange County to complete 20 owner- occupied rehabilitation projects for single-family homeowners in Garden Grove.

Economic Development: Approximately $250,000 in CDBG funds are recommended for economic development activities. The recommended funding for the Boost Program is $100,000, and Upwards, the operator of the Boost Program, is anticipated to assist 12 childcare agencies in Garden Grove build their capacity and expand operations.

Additionally, City staff is working to develop a business assistance program in FY 2024-25 that is focused on providing technical assistance and capital funding to eligible Garden Grove businesses. The City is allocating $150,000 to this pilot program and City Staff will undergo a procurement process to select a qualified agency. It is anticipated that this program will be operational in fall 2024. 369

Affordable Housing: The City recommends allocating $250,000 in HOME funds to continue tenant-based rental assistance for the Homeless Emergency Assistance and Rental Transition (HEART) Program administered by Interval House.

Emergency Solutions Grant: City Staff conducted an Emergency Solutions Grant Request for Proposals in January 2024 to solicit proposals from qualified homeless service providers for this coming fiscal year (FY 24/25). Below are the proposed funding levels and projections for each eligible activity:
 Street Outreach - Fund Volunteers of America of Los Angeles (VOALA) at $50,000 to assist 40 homeless individuals with essential services.  Emergency Shelter – Fund Interval House and Illumination Foundation a combined $51,000 to assist 30 homeless individuals with shelter and essential services.
 Rapid Rehousing - Fund VOALA $31,485 to assist 4 homeless households with rental assistance and essential services.
 Homeless Prevention - Fund Mercy House $35,000 to assist 24 individuals who are at-risk of homelessness with rental assistance and essential services.
 Homeless Management Information System - Fund 211 Orange County $5,094 to manage the County’s Coordinated Entry System and Homeless Management Information System.

Administration: Approximately $456,596 in CDBG, HOME, and ESG funds is recommended for staff and material costs for program management, project development and monitoring, public communication, HUD reporting, and financial administration.

CITIZEN PARTICIPATION
All HUD citizen participation requirements have been met. Public notices regarding the draft Action Plan, including an invitation to share comments at this public hearing, were published on February 23, 2024 in local English, Spanish, and Vietnamese language newspapers.

FINANCIAL IMPACT
The proposed FY 2024-25 Action Plan will allow the City to access $2.75 million in new entitlement grants from HUD and an estimated $15,526 in unexpended prior year funds. The allocation of HUD funds effectively leverages competitive grants and the City’s General Fund. Funds will be included as part of the budget for FY 2024-25.

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RECOMMENDATION

It is recommended that the City Council:
 Hold a public hearing to accept comments;
 Direct staff to submit the FY 2024-25 Action Plan to HUD for approval.  Authorize the City Manager to execute agreements, and make modifications as appropriate thereto, on behalf of the City.

ATTACHMENT(S):

1. FY 2024-25 Action Plan

371
2024 - 25 Annual Action Plan
Performance Period: July 1, 2024 - June 30, 2025
372
2024 PROJECTED FUNDING HUD ENTITLEMENT FUNDSDuring FY 2024-25, the City of Garden Grove is projecting to utilize a total of $2,755,307 in HUD
grant funds to benefit low/moderate income
residents through a variety of programs and services.

The City of Garden Grove is an administrative
authority for the U.S. Department of Housing
and Urban Development’s (HUD) Community
Development Block Grant (CDBG), HOME
Investment Partnership (HOME), and
Emergency Solutions Grant (ESG) allocations.
$1,850,690 in CDBG funding will be
programmed to benefit low/moderate income
residents, through housing rehabilitation,
senior services, fair housing activities,
infrastructure improvements, and gang
suppression activities.
$737,254 in HOME funding will be used to
develop affordable housing and provide rental
assistance to low-income households.
$169,786 in ESG funding will be used to
provide homeless services through street
outreach, emergency shelter, homeless
prevention, and rapid rehousing.

CDBG CARES Act funding will continue to be
programmed to provide supportive services to
those affected by the Coronavirus
(COVID-19).

For more information, please contact: Timothy Throne, Sr. Program Specialist (714) 741-5144 / [email protected]
T o view the full Annual Action Plan, visit: ggcity.org/neighborhood-improvement/reports 2024-25 ANNUAL ACTION PLAN
Performance Period: July 1, 2024 – June 30, 2025

PUBLIC SERVICES
$277,603
PUBLIC

IMPROVEMENTS
$800,000

HOMELESS SERVICES
$172,579

HOUSING REHAB
$135,000

AFFORDABLE

HOUSING
$663,529 ADMINISTRATION
$456,596

ECONOMIC

DEVELOPMENT
$250,000
MEALS

PROVIDED
59,970
MEALS
490

INDIVIDUALS
PUBLIC

SERVICES

HOMELESS

ASSISTANCE
298

INDIVIDUALS
14 HOUSEHOLDS

COMMUNITY

OUTREACH
& EDUCATION
6,490

INDIVIDUALS
20 HOMES
HOME

REHABILITATION
10,452

INDIVIDUALS
TOTAL

RESIDENTS
SERVED
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City of Garden Grove 2024 Annual Action Plan
July 1, 2024 – June 30, 2025
Submitted to HUD on May 15, 2024

TABLE OF CONTENTS

Executive Summary
AP-05 Executive Summary – 24 CFR 91.200(c), 91.220(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 PR-05 Lead & Responsible Agencies – 91.200(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 AP-10 Consultation – 91.100, 91.200(b), 91.215(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 AP-12 Participation – 91.105, 91.200(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Expected Resources
AP-15 Expected Resources – 91.220(c) (1,2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Annual Goals and Objectives
AP-20 Annual Goals and Objectives – 91.420, 91.220(c)(3)&(e) . . . . . . . . . . . . . . . . . . . . . . . . . 22

Projects
AP-35 Projects – 91.220(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 AP-38 Projects Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 AP-50 Geographic Distribution – 91.220(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Affordable Housing
AP-55 Affordable Housing – 91.220(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 AP-60 Public Housing – 91.220(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 AP-65 Homeless and Other Special Needs Activities – 91.220(i) . . . . . . . . . . . . . . . . . . . . . . . . . 36 AP-75 Barriers to Affordable Housing – 91.220(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

AP-85 Other Actions – 91.220(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Appendices
Appendix A: Summary of Public Outreach
Appendix B: Maps of Projects
Appendix C: Emergency Solutions Grant Protocols
Appendix D: Budget Breakdown
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Executive Summary
AP-05 Executive Summary - 24 CFR 91.200(c), 91.220(b)

1. Introduction
The Consolidated Plan/Annual Action Plan
The City of Garden Grove 2020 -2025 Consolidated Plan is a planning document that identifies and develops a strategy to address critical housing and community development needs that can be addressed through federal funding sources including Community Development Block Grants, HOME Investment Partnership Act funds, and Emergency Solutions Grants.

To implement the Consolidated Plan and address the ado pted priorities, the City annually prepares an Action Plan to more specifically identify financial resources, priority programs and goals, as well as objectives for the fiscal year.

The Consolidated Plan and Action Plan were prepared using the eCon Planning Suite system developed by the U.S. Department of Housing and Urban Development (HUD). The system prescribes the structure and contents of this document, following HUD's Consolidated Planning regulations.

This Action Plan covers the period beginning July 1, 2024 through June 30, 2025 and focuses on the use of the three federal funding resources (CDBG, HOME, and ESG) as described below.

Community Development Block Grants (CDBG): The primary objective of this program is to develop viable urban communities b y providing decent housing, a suitable living environment, and economic opportunities, principally for persons of lower income. CDBG funds are relatively flexible and can be used for a wide range of activities, including housing rehabilitation, homeownersh ip assistance, lead -based paint detection and removal, acquisition of land and buildings, construction or rehabilitation of public facilities (including infrastructure), removal of architectural barriers to housing needs, public services, rehabilitation of commercial or industrial buildings, and loans or grants to businesses. The City of Garden Grove’s estimated annual entitlement of CDBG funds is $1,850,690.

HOME Investment Partnership Act (HOME): The HOME program provides federal funds for the development and rehabilitation of affordable rental and ownership housing for low - and moderate - income households. The program gives local governments the flexibility to fund a wide range of affordable housing activities through housing partnerships with private industry and non-profit organizations. HOME funds can be used for activities that promote affordable rental housing and homeownership by low- and moderate-income households, including building acquisition, new construction and reconstruction, moderate or subst antial rehabilitation, homebuyer assistance, and tenant -based rental assistance. The City of Garden Grove’s estimated annual entitlement of HOME funds is $737,254. 375
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Emergency Solutions Grant (ESG): The ESG program provides homeless persons with basic shelte r and essential supportive services, including rehabilitating or remodeling a building producing new shelter beds, operations and maintenance of a homeless facility, essential supportive services, and homeless prevention. The City of Garden Grove’s annual allocation of ESG funds is $169,786.

2. Summarize the objectives and outcomes identified in the Plan This could be a restatement of items, or a table listed elsewhere in the plan or a reference to another location. It may also contain any essential items from the housing and homeless needs assessment, the housing market analysis, or the strategic plan.

This Consolidated Plan has established the following objectives over the life of the Plan (Program Years 2020-2025):
 Expand the City's affordable housing inventory by 5 units through new construction of affordable units for lower income households and 10 units through acquisition/rehabilitation of affordable units for lower income households;
 Provide rehabilitation assistance to 200 single-family homes;  Provide rental assistance to 134 very low- and extremely low -income households through the TBRA program;
 Assist 1,580 persons/households with homelessness-related issues;  Assist 3,500 persons through the provision of community services;  Create or retain approximately 20 jobs; and
 Improve low-income neighborhoods through infrastructure and public improvement projects.

3. Evaluation of past performance
This is an evaluation of past perf ormance that helped lead the grantee to choose its goals or projects.

The City of Garden Grove continually strives to improve its performance, as well as the performance of its funded agencies.

During FY 202 4-25, the City estimates expending a total of $2,755,307 in HUD grant funds to meet the goals and objectives outlined in the 2020 -2025 Consolidated Plan. The approximate expended amounts by grant are as follows:
 $1,832,741 in CDBG funds on administration, public services, capital projects, homeowner rehabilitation, and business assistance activities;
 $737,254 in HOME funds on administration and the development of affordable housing; and 376
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 $185,312 in ESG funds on administration and homeless service activities, which includes $15,526 of prior year funding.

CDBG, HOME and ESG funds were targeted in four primary areas:

1. Development of decent and affordable housing;

2. Provision of community and supportive services;

3. Improvement of public facilities and infrastructure; and

4. Expansion of economic opportunities and anti-poverty activities.

The performance of programs and systems are evaluated on a regular basis through Consolidated Annual Performance and Evaluation Reports (CAPERs). A more detailed summary of the City’s evaluation of past performance in previous Conso lidated Annual Performance and Evaluation Reports (CAPERs) can be viewed on the City’s website at https://ggcity.org/neighborhood-improvement/reports.

4. Summary of Citizen Participation Process and consultation process Summary from citizen participation section of plan.

During its development, the Action Plan will be discussed in a publicly noticed NICC meeting where opportunity for public comment is provided. The draft plan will be made available for public review between February 23, 2024 and April 9, 2024 on the City's website. Public hearings were held before the NICC on March 4, 2024 and the City Council on April 9, 2024 to solicit public comments on the Draft FY 2024-25 Action Plan. All meeting locations were accessible to persons with disabilities. The public review period and public meetings/hearings for the Draft FY202 4-25 Action Plan were published in the Orange County News (English), Viet Bao (Vietnamese) and La Opinion (Spanish) on Thursday, February 23, 2024.

5. Summary of public comments
This could be a brief narrative summary or reference an attached document from the Citizen Participation section of the Con Plan.

Please see Appendix A for summary of public comments.

6. Summary of comments or views not accepted and the reasons for not accepting them N/A

7. Summary
The City of Garden Grove has undertaken diligent and good faith efforts to outreach to all segments of the community that may benefit from the CDBG, ESG, and HOME programs. The City of Garden Grove will 377
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continue to concentrate its resources for maximum impact and strive to address the needs, priorities, and goals identified in the 2020-2025 Consolidated Plan and the FY 2024-25 Action Plan. 378
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PR-05 Lead & Responsible Agencies – 91.200(b)

1. Agency/entity responsible for preparing/administering the Consolidated Plan Describe the agency/entity responsible for preparing the Consolidated Plan and those responsible for administration of each grant program and funding source.

Agency Role Name Department/Agency
CDBG Administrator GARDEN GROVE Economic Development and Housing Department
HOME Administrator GARDEN GROVE Economic Development and Housing Department
ESG Administrator GARDEN GROVE Economic Development and Housing Department
Table 1 – Responsible Agencies

Narrative (optional)
The City’s CDBG, HOME, and ESG programs are administered by the City of Garden Grove Economic Development and Housing Department's Neighborhood Improvement Division.

Program Descriptions
The Community Development Block Grant (CDBG) program was initiated by the Housing and Community Development Act (HCDA) of 1974. The primary objective of the program is to develop viable urban communities by provi ding decent housing, a suitable living environment, and economic opportunities, principally for persons of low and moderate income. Regulations governing the CDBG program also require that each activity undertaken with CDBG funds meet one of the following three broad national objectives:
 Benefit low- and moderate-income persons;
 Aid in the prevention or elimination of slums and blight; and  Meet other community development needs having a particular urgency.

The HOME Investment Partnership (HOME) program was created by the 1990 National Affordable Housing Act. The HOME program provides federal funds for the development and rehabilitation of affordable rental and ownership housing for low- and moderate-income households, replacing a series of programs previously funded by HUD. The program gives the grantee flexibility to fund a wide range of affordable housing activities through housing partnerships with private industry and non-profit organizations.

The Emergency Solutions Grant (ESG) program provides homeless persons with basic shelter and essential supportive services. ESG funds can be used for a variety of activities, including rehabilitation or remodeling 379
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of a building to add new shelter beds, operations and maintenance of a homeless facility, essential supportive services, and homeless prevention.

Consolidated Plan Public Contact Information
Monica Covarrubias, Senior Program Manager
City of Garden Grove
Economic Development and Housing Department
11222 Acacia Parkway, Garden Grove, CA 92840
(714) 741-5788
[email protected]
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AP-10 Consultation – 91.100, 91.200(b), 91.215(l)

1. Introduction
As part of the Consolidated Plan development, the City undertook a comprehensive outreach program to solicit input from residents and beneficiaries of entitlement programs, and to consult with elected officials, City departments, and various organizations, agencies, and service providers to inform and develop the priorities and strategies contained in the Garden Grove 2020 -2025 Consolidated Plan. The City has continued to keep these lines of communications open during the preparation of the FY 2024-25 Action Plan.

Provide a concise summary of the jurisdiction’s activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(l))
There has been input by residents, service providers, non-profit organizations, religious institutions, other city departments, and other agencies through a community survey and public hea rings. These views are incorporated into the Garden Grove 2020 -2025 Consolidated Plan and its programs. A total of 159 stakeholders, including: public and assisted housing providers and developers; private and governmental agencies; and health, mental heal th and service agencies were directly contacted and invited to participate in the planning process for Garden Grove.

Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless in dividuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness.

The County of Orange Department of Housing and Community Services (HCS) coordinates the County Continuum of Care in response to the ongoing homeless needs in the region. A collaborative approach to addressing homelessness in Garden Grove dubbed United to End Homelessness was established in May 2019 uniting the five major sectors of the population: residents, businesses, non -profit organizations, faith-based groups and philanthropic organizations. The City of Garden Grove also participates in the Point in Time Survey that assesses the level of homelessness and an inventory of available local community resources to address homelessness in the county. The Neighborhood Improvement and Conservation Commission is an advisory body to the City Council that promotes citizen awareness, involvement, and support for neighborhood improvement and preservation for the community.

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Describe consultation wit h the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS The City of Garden Grove is one of five jurisdictions that receive ESG funds directly within the County of Orange. To this end, the city contributes to the countywide CoC providing funding to:

1. Engage homeless individuals and families living on the street;

2. Improve the number and quality of emergency shelters for homeless individuals and families;

3. Help operate these shelters;

4. Provide essential services to shelter residents;

5. Rapidly re-house homeless individuals and families; and

6. Prevent families/individuals from becoming homeless.

The City allocates the resources to sub-recipients to rehabilitate and operate emergency and transitional shelters, provide essential social services, and prevent homelessness.

The City actively participates in the Orange County CoC by attending meetings to discuss how to establish performance measures that benefit the broader goals of the region. Garden Grove provides data for CoC surveys and relies heavily upon the CoC’s research and discussions to identify and address critical gaps in local care for the homeless. In doing so, the City is able to meet homeless needs in the community through assistance to providers and programs that offer emergency/transitional housing or homeless prevention services.

The Orange County CoC is the Homeless Management and Information System (HMIS) lead agency, also referred to as Orange County HMIS. This organization administers the HMIS for the region and sets a uniform standard for all homeless and at -risk service providers and agencies to submit client -level and demographic data for HUD reporting and local homeless strategies. All ESG -funded organizations enter information to the Orange County HMIS system.
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2. Describe Agencies, groups, organizations and others who participated in the process and describe the jurisdiction’s consultations with housing, social service agencies and other entities Table 2 – Agencies, groups, organizations who participated 1 Agency/Group/Organization 211 ORANGE COUNTY
Agency/Group/Organization Type Housing
Services - Housing
Services-Children
Services-Elderly Persons
Services-Persons with Disabilities
Services-Persons with HIV/AIDS
Services-Victims of Domestic Violence
Services-homeless
Services-Health
Services-Education
Services-Employment
Service-Fair Housing
Services - Victims
What section of the Plan was addressed by Consultation? Housing Need Assessment Public Housing Needs
Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Non-Homeless Special Needs
Market Analysis
Economic Development
Anti-poverty Strategy
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Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the consultation or areas for improved coordination?
This organization provided direct input, helped to identify priority needs in the community, and participated in a community workshop for the Garden Grove 2020-2025 Consolidated Plan. 2 Agency/Group/Organization HELPING OTHERS PREPARE FOR ETERNITY Agency/Group/Organization Type Services-Children
Services-Victims of Domestic Violence
Services-Education
Services-Employment
What section of the Plan was addressed by Consultation? Housing Need Assessment Non-Homeless Special Needs
Market Analysis
Anti-poverty Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the consultation or areas for improved coordination?
This organization provided direct input, helped to identify priority needs in the community, and participated in a community workshop for the Garden Grove 2020-2025 Consolidated Plan. 3 Agency/Group/Organization Garden Grove Community Arts Society Agency/Group/Organization Type Services-Children
What section of the Plan was addressed by Consultation? Non-Homeless Special Needs Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the consultation or areas for improved coordination?
This organization provided direct input, helped to identify priority needs in the community, and participated in a community workshop for the Garden Grove 2020-2025 Consolidated Plan. 4 Agency/Group/Organization Illumination Foundation
Agency/Group/Organization Type Services-homeless
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What section of the Plan was addressed by Consultation? Housing Need Assessment Homeless Needs - Chronically homeless
Homeless Needs - Families with children
Homelessness Needs - Veterans
Homelessness Needs - Unaccompanied youth
Homelessness Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the consultation or areas for improved coordination?
This organization provided direct input, helped to identify priority needs in the community, and participated in a community workshop for the Garden Grove 2020-2025 Consolidated Plan. 5 Agency/Group/Organization Garden Grove United Methodist Church Agency/Group/Organization Type Community Church
What section of the Plan was addressed by Consultation? Housing Need Assessment Anti-poverty Strategy
Briefly describe how the Agency/Group/Organization was
consulted. What are the anticipated outcomes of the consultation or areas for improved coordination?
This organization provided direct input, helped to identify priority needs in the community, and participated in a community workshop for the Garden Grove 2020-2025 Consolidated Plan.

Identify any Agency Types not consulted and provide rationale for not consulting No agency/ organization was left out of the consultation process.

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Other local/regional/state/federal planning efforts considered when preparing the Plan Name of Plan Lead Organization How do the goals of your Strategic Plan overlap with the goals of each plan? Continuum of Care County of Orange
The Orange County Point-in-Time count provided homeless data for the Consolidated Plan.

The Orange County Ten-Year Plan to End Homelessness Strategic Plan is closely aligned with the goals of the CoC. Garden Grove is an administering agency for CoC and ESG funds in addition to the City's CDBG and HOME allocations.

City of Garden Grove
Housing Element
(2014-2021)
City of Garden Grove
Community
Development
Department
The Housing Element serves as a policy guide to help the City meet existing and future housing needs. Both the Consolidated Plan and the Housing Element share common goals that address housing-related issues in the community.

Garden Grove
Biennial Budget FY
2023-2025
City of Garden Grove
Finance Department
The Consolidated Plan is aligned with the City's annual budgets. Finance prepares annual strategies and financing to fulfill the Action Plan and by extension the overall Consolidated Plan.

Economic
Development
Strategic Plan, 2018
City of Garden Grove
Office of Economic
Development
The City of Garden Grove ’s 2018 Economic Development Strategic Plan is a baseline assessment of existing conditions that drive economic investment and outlines strategic recommendations to address the community’s economic issues and opportunities.

Table 3 – Other local / regional / federal planning efforts

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AP-12 Participation – 91.105, 91.200(c)

1. Summary of citizen participation process/Efforts made to broaden citizen participation Summarize citizen participation process and how it impacted goal-setting

Citizen Participation Outreach
Sort Order Mode of Outreach Target of Outreach Summary of response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If
applicable)
1 Public Hearing
Non-
targeted/broad
community
See Appendix A
(Neighborhood
Improvement
Conservation
Committee)
See Appendix A See Appendix A
2 Public Hearing
Non-
targeted/broad
community
See Appendix A (City
Council Meeting) See Appendix A See Appendix A
3 Newspaper Ad
Non-
targeted/broad
community
See Appendix A See Appendix A See Appendix A
4 Newspaper Ad
Non-English
Speaking - Specify
other language:

Vietnamese

Non-
targeted/broad
community
See Appendix A See Appendix A See Appendix A
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Sort Order Mode of Outreach Target of Outreach Summary of response/attendance
Summary of
comments received
Summary of comments
not accepted
and reasons
URL (If
applicable)
5 Newspaper Ad
Non-
targeted/broad
community
See Appendix A See Appendix A See Appendix A
6 Internet Outreach
Non-
targeted/broad
community
See Appendix A See Appendix A See Appendix A
Table 4 – Citizen Participation Outreach

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Expected Resources
AP-15 Expected Resources – 91.220(c)(1,2)
Introduction
For the one -year period covering July 1, 202 4 through June 30, 202 5, the City has planned for the following allocations:
 $1,850,690 in CDBG funds
 $737,254 in HOME funds
 $169,786 in ESG funds
Garden Grove does not receive funding under the Housing Opportunities for Persons with AIDS (HOPWA) programs. In recent years, the levels of CDBG, HOME and ESG funds have been consistent.

Once the annual allocations from HUD are announced, the City will use the budget breakdown that is provided in Appendix D to adjust the funding levels accordingly. Each program on the breakdown shows a percentage of the total awarded funding that each program represents. Once allocations are announced, the City will revise funding levels for CD BG, HOME and ESG according to the percentage s that are represented in Appendix D. The City will utilize $317,504 in unexpended prior year CDBG funds to adjust programs that are not subject to funding caps to the approved levels in this Action Plan.

In terms of program income, the City anticipates an unsteady stream of program income over the course of this Action Plan. During the past five years, the level of program income received varied from $30,000 in one year to over $90,000 in another. Program income received from of will re-programmed for similar loan activities in the same or similar programs from which the funds were originally provided. 389
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Anticipated Resources
Program Source
of
Funds
Uses of Funds Expected Amount Available Year 5 Expected Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
CDBG public -
federal
Acquisition
Admin and
Planning
Economic
Development
Housing
Public
Improvements
Public Services
$1,850,690 $25,000 $317,504 $2,193,194 $0.00
The amount of CDBG funds available
during the planning period is based on
actual funds available.
$17,949 of the FY 24-25 CDBG allocation
will be left unallocated for potential use
during the fiscal year. If unused by June
30, 2025, the City will program the
funding during next fiscal year.
$317,504 in unexpended prior year
resources will be carried over to account
for adjustments to allocation amounts.
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Program Source
of
Funds
Uses of Funds Expected Amount Available Year 5 Expected Amount
Available
Remainder
of ConPlan
$
Narrative Description
Annual
Allocation:
$
Program
Income:
$
Prior Year
Resources:
$
Total:
$
HOME public -
federal
Acquisition
Homebuyer
assistance
Homeowner rehab
Multifamily rental
new construction
Multifamily rental
rehab
New construction
for ownership
TBRA $737,254 $50,000 $0.00 $787,254 $0.00
The amount of HOME funds available
during the planning period is based on
actual funds available.

ESG public -
federal
Conversion and
rehab for
transitional
housing
Financial
Assistance
Overnight shelter
Rapid re-housing
(rental assistance)
Rental Assistance
Services
Transitional
housing $169,786 0 $15,526 $ 185,312 $0.00
The amount of ESG funds available during
the planning period is based on actual
funds available.
$15,526 in unexpended prior year
resources will be carried over to fund
additional activities.

Table 5 - Expected Resources – Priority Table

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Explain how federal funds will leverage those additional resources (private, state and local funds), including a description of how matching requirements will be satisfied Permanent Local Housing Allocation Program
In 2019, the City was awarded an annual allocation of Permanent Local Housing Allocation Program funds.

The Permanent Local Housing Allocation Program is part of a 15-bill housing package aimed at addressing California’s housing shortage and high housing costs. The first year of the grant is designed to assist jurisdictions with planning and administration activities, including: updating the Housing Element, creating objective development standards, creating objective development standard s for supportive housing, updating the City’s density bonus ordinance, creating development standards for hotel and motel conversions, updating the multi -family residential ordinance to allow by -right permanent supportive housing, and providing funding for the University of California, Irvine Housing Study.

Eligible program activities after the first year include predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, and rental housing that is affordable to extremely low -, very low -, low -, or moderate -income households; affordable rental and ownership housing that assists households earning up to 120% AMI, or 150% AMI in high -cost areas; matching portions of funds placed into local or regional housin g trust funds; matching portions of funds available through the Low- and Moderate-Income Housing Asset Fund; capitalized reserves for services connected to the preservation and creation of new permanent supportive housing; assisting persons who are experiencing or at risk of homelessness; accessibility modifications; efforts to acquire and rehabilitate foreclosed or vacant homes and apartments; homeownership opportunities; and matching funds invested by a county in an affordable housing development project.

Low-Moderate Income Housing Trust Fund
The City anticipates receiving approximately $13M into the LMIHAF over the 5 -year Consolidated Plan period. Per State regulations, up to $250,000 per year may be expended to provide programs and services to homeless Garden Grove households. During FY 2023-2024, the City utilized $50,000 in LMIHAF monies to subsidize the services portion of a rental assistance program for homeless households as a part of the Homeless Emergency Assistance Rental Transition (HEART) Progr am. The City expects to extend this program throughout the 5 -year Consolidated Planning period to reduce homelessness within the jurisdiction. Remaining LMIHAF monies will be expended to produce affordable housing for low -income residents throughout the City.

If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The Successor Agency owns an 8-unit apartment complex located at 12602 Keel Street in Garden Grove.

This location is currently being leased to the Orange County Community Housing Corporation (OCCHC) who offers the units to very -low-income families at an affordable rent. During FY 202 4-25, the City will continue to monitor this project for compliance with rent/income limits to ensure Garden Grove residents 392
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have access to quality affordable housing.

Discussion
See responses above.
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Annual Goals and Objectives

AP-20 Annual Goals and Objectives
Goals Summary Information
Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
1 Provide Decent
and Affordable
Housing
2020 2024 Affordable
Housing
Homeless
Non-Homeless
Special Needs
Citywide Increase, Improve, and
Preserve Affordable
Housing
Promote New
Construction of Affordable
Housing
Provide Rental Assistance
to Alleviate Cost Burden
CDBG:
$135,000
HOME:
$663,529
Homeowner Housing
Rehabilitated: 20 Household
Housing Unit
Tenant-based rental
assistance / Rapid Rehousing:
10 Households Assisted
2 Address the Needs
of Homeless
Individuals
2020 2024 Homeless Citywide Promote Programs to
Meet Homeless Needs
ESG:
$169,786
Tenant-based rental
assistance / Rapid Rehousing:
4 Households Assisted
Homeless Person Overnight
Shelter: 30 Persons Assisted
Homelessness Prevention: 24
Persons Assisted
Other: 40 Other
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Sort
Order
Goal Name Start
Year
End
Year
Category Geographic
Area
Needs Addressed Funding Goal Outcome Indicator
3 Provide
Community and
Supportive
Services
2020 2024 Homeless
Non-Homeless
Special Needs
Non-Housing
Community
Development
Citywide Preserve and Improve
Existing Supportive
Services
CDBG:
$277,603
Public service activities other
than Low/Moderate Income
Housing Benefit: 690 Persons
Assisted
4 Address Public
Facilities and
Infrastructure
Needs
2020 2024 Non-Homeless
Special Needs
Non-Housing
Community
Development
Citywide Address Public
Facilities/Infrastructure
Needs
CDBG:
$800,000
Public Facility or
Infrastructure Activities other
than Low/Moderate Income
Housing Benefit: 2,335
Persons Assisted
5 Promote Economic
Development and
Employment
2020 2024 Non-Housing
Community
Development
Citywide Promote Economic
Development and
Employment
CDBG:
$250,000
Jobs created/retained: 4
Businesses Assisted: 12
6 Provide for
Planning and
Administration
Activities
2020 2024 Affordable
Housing
Homeless
Non-Homeless
Special Needs
Non-Housing
Community
Development
Citywide Provide for Necessary
Planning and
Administration
CDBG:
$370,138
HOME:
$73,725
N/A
Table 6 – Goals Summary

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Goal Descriptions
1 Goal Name Provide Decent and Affordable Housing
Goal
Description
The City is focused on providing decent and affordable housing through a variety of programs as funding permits. Programs and activities to accomplish the City’s goal include: new construction of affordable housing; acquisition and/or rehabilitation activities; rehabilitation assistance programs; lead-based paint hazard reduction efforts; and home ownership assistance. 2 Goal Name Address the Needs of Homeless Individuals
Goal
Description
The City of Garden Grove will continue to use its funds to address homeless needs in the City in a manner that supports the countywide CoC system.
3 Goal Name Provide Community and Supportive Services
Goal
Description
The City will provide for a variety of community and supportive services, with a focus on crime awareness and prevention programs and senior services. Other services may be considered if funding is available. 4 Goal Name Address Public Facilities and Infrastructure Needs Goal
Description
The City will coordinate improvements to public facilities and infrastructure to improve living conditions for low -income residents and neighborhoods.
5 Goal Name Promote Economic Development and Employment Goal
Description
The City will promote greater employment opportunities and support of economic development activities throughout the city.
6 Goal Name Provide for Planning and Administration Activities Goal
Description
The City will continue to administer the CDBG, HOME, and ESG programs in compliance with program regulations and requirements. To ensure the effective use of limited CDBG, HOME, and ESG funds, the City must allocate funding towards planning and monitoring of the programs.

The City complies with state and federal fair housing laws. To achieve fair housing goals, the City has contracted with a fair housing service provider to provide information, mediation, and referrals to residents. Garden Grove will strive to provide and maintain equal housing opportunities for all residents in the City, including special needs residents. 396
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Projects
AP-35 Projects – 91.220(d)
Introduction
The Fiscal Year (FY) 202 4-25 Action Plan implements the fifth year of the 2020 –2025 Consolidated Plan and addresses HUD consolidated planning requirements for the Community Development Block Grant (CDBG), HOME Investment Partnerships (HOME), and Emergency Solutions Grant (ESG) programs for the City of Garden Grove. This plan outlines the action steps that Garden Grove will use to addre ss housing and community development needs in the City. The plan also includes a listing of activities that the City will undertake during FY 2024-25 (July 1, 2024 through June 30, 2025) that utilize CDBG, HOME and ESG funds.

The City makes its funding allocation decisions in part based on proposals received as part of the annual RFP process. Through this process, funds are awarded to eligible activities that support the goals and address the priority needs described in the Strategic Plan. While CDBG, HOME , and ESG funding allocations for FY 2024-25 will not address all of the community’s priority needs, allocations are focused toward specific projects addressing high community priorities and producing tangible community benefits.

The City is working to dev elop a business assistance program in FY 2024 -25 that is focused on providing technical assistance and capital funding to eligible Garden Grove businesses. The City will undergo an RFP process to select a qualified agency that can provide services to busin ess owners looking to stabilize or expand their businesses. To date there is not a projected number of businesses that will be assisted in FY 2024-25 under this program , but the City is programming $150,000 in this Action Plan with the anticipation that the program will be operating in Fall 2024.

Prior Year Funds Description
Once the annual allocations from HUD are announced, the City will use the budget breakdown that is provided in Appendix D to adjust the funding levels accordingly. Each program on the breakdown shows a percentage of the total awarded funding that each program represents. Once allocations are announced, the City will revise funding levels for CDBG, HOME and ESG according to the percentages that are represented in Appendix D.

The City will utilize the $317,504 in unexpended prior year CDBG funds to adjust programs that are not subject to funding caps to the approved levels in this Action Plan. Additionally, the City will program $15,526 in prior year unexpended ESG funding in F Y 24-25 to assist additional households through the 397
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Rapid Rehousing Program.

Projects
# Project Name
1 Administration and Planning
2 Public Services
3 Public Facilities and Infrastructure
4 Affordable Housing
5 Owner-Occupied Housing Rehabilitation
6 Economic Development and Employment
7 ESG 24 Garden Grove
Table 7 - Project Information

Describe the reasons for allocation priorities and any obstacles to addressing underserved needs
The major obstacle to addressing the underserved needs in the community is the lack of adequate funding, especially for affordable housing activities. With the dissolution of redevelopment in California and reduced state and federal funding levels, the City's ability to address the extensive needs in the community is seriously compromised.
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AP-38 Project Summary
Project Summary Information
1 Project Name Administration and Planning
Target Area Citywide
Goals Supported Provide for Planning and Administration Activities Needs Addressed Provide for Necessary Planning and Administration Funding CDBG: $370,138
HOME: $73,725
Description Provide for necessary planning and administration activities to address housing and community development needs in the City.

Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
N/A
Location Description N/A
Planned Activities Planning and public participation, contract design, management and monitoring, financial administration, and HUD communication to administer the City's CDBG and HOME programs. Garden Grove will strive to provide and maintain equal housing opportunities for all residents in the City, including special needs residents.
2 Project Name Public Services
Target Area Citywide
Goals Supported Provide Community and Supportive Services Needs Addressed Preserve and Improve Existing Supportive Services Funding CDBG: $277,603
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Description Special Resource Team ($110,000) - The Police Department's Special Resource Team is responsible for providing response and outreach to homeless individuals. The main goal for the Special Resource Team is to get the homeless residents the services they need to get off of the streets.

Funding this organization will enhance safety in lower -income areas.

Senior Center Services ($147,603) - Provide one or more programs for seniors at the H. Louis Lake Senior Center. Programs include recreation and socialization, daily lunch, nutrition health education, and support for seniors.

Meals on Wheels ($20,000) - Provide raw food for congregate meals to Garden Grove residents citywide.

Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
Special Resource Team – 200 referrals
Senior Center Services - 300 individuals
Meals on Wheels - 190 individuals
Location Description Special Resource Team - Citywide
Senior Center Services - 11300 Stanford Avenue, Garden Grove, CA 92840.

Meals on Wheels - Citywide
Planned Activities Special Resource Team - The Police Department's Special Resource Team is responsible for providing response and outreach to homeless individuals. The main goal for the Special Resource Team is to get the homeless residents the services they need to get off of the streets.

Funding this organization will enhance safety in lower-income areas.

Senior Center Services - Provide one or more programs for seniors at the H. Louis Lake Senior Center. Programs include recreation and socialization, daily lunch, nutrition health education, and support for seniors.

Meals on Wheels - Provide raw food for congregate meals to Garden Grove residents citywide.
3 Project Name Public Facilities and Infrastructure
Target Area
Goals Supported Address Public Facilities and Infrastructure Needs Needs Addressed Address Public Facilities/Infrastructure Needs Funding CDBG: $800,000
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Description
Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
Monroe Street Rehabilitation Project - Low/Mod Income Individuals Assisted: 2,335 individuals
Location Description Monroe Street/Stanford Avenue
Planned Activities Monroe Street Rehabilitation Project - CDBG funds will be used to rehabilitate local residential streets at Monroe Street and Stanford Avenue.
4 Project Name Affordable Housing
Target Area Citywide
Goals Supported Provide Decent and Affordable Housing
Needs Addressed Increase, Improve, and Preserve Affordable Housing Funding HOME: $663,529
Description New Construction of Affordable Housing ($206,765 ) - Facilitate predevelopment of new housing projects.

Acquisition/Rehabilitation of Affordable Housing ($206,764) - Dedication of affordable rental housing units in exchange for financial assistance for developers to acquire and/or rehabilitate properties.

Interval House HEART ($250,000) - Interval House will be funded at $250,000 of FY 24-25 HOME funding that will be assist approximately 10 extremely low-income residents.

Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
Tenant Based Rental Assistance - 10 households
Location Description Citywide
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Planned Activities New Construction of Affordable Housing - Facilitate predevelopment of new housing projects.

Acquisition/Rehabilitation of Affordable Housing - Dedication of affordable rental housing units in exchange for financial assistance for developers to acquire and/or rehabilitate properties.

Tenant Based Rental Assistance - TBRA for extremely low -income individuals and families.
5 Project Name Owner-Occupied Housing Rehabilitation
Target Area Citywide
Goals Supported Provide Decent and Affordable Housing
Needs Addressed Increase, Improve, and Preserve Affordable Housing Funding CDBG: $135,000
Description Home Repair Program ($1 35,000 CDBG) - The program provides a grant of up to $5,000 for minor home repairs including: plumbing, electrical, energy conservation activit ies, accessibility improvements, security and safety improvements, exterior refurbishing, and painting to eligible lower- income homeowners. Unexpended program funds will be carried over to assist additional low-income residents.

Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
Home Repair Program - 20 households served
Location Description Citywide
Planned Activities Home Repair Program - The program provides a grant of up to $5,000 for minor home repairs including: plumbing, electrical, energy conservation activities, accessibility improvements, security and safety improvements, exterior refurbishing, and painting to eligible lower-income homeowners. 6 Project Name Economic Development and Employment
Target Area Citywide
Goals Supported Promote Economic Development and Employment Needs Addressed Promote Economic Development and Employment Funding CDBG: $250,000
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Description Boost Program ($100,000) – This is the second year the City is funding the Boost Program to support local childcare providers serving low -income families by providing technical assistance and support to microenterprise businesses in Garden Grove. The program will provide business support and technica l assistance to 12 micro-enterprises and will anticipate to create 4 jobs.

Business Assistance Program ($150,000) - The City is working to develop a business assistance program in FY 2024 -25 that is focused on providing technical assistance and capital fun ding to eligible Garden Grove businesses. The City will undergo an RFP process to select a qualified agency that can provide services to business owners looking to stabilize or expand their businesses. To date there is not a projected number of businesses that will be assisted in FY 2024-25, but the City is programming $150,000 in this Action Plan with the anticipation that the program will be operating in Fall 2024.

Target Date 6/30/2025
Estimate the number
and type of families
that will benefit from
the proposed
activities
Boost Program – 12 microenterprises assisted, 4 jobs created Business Assistance Program - TBD
Location Description Citywide
Planned Activities Support local businesses with and technical assistance and financial support.
7 Project Name ESG 24 Garden Grove
Target Area Citywide
Goals Supported Address the Needs of Homeless Individuals Needs Addressed Promote Programs to Meet Homeless Needs Funding ESG: $169,786
Description Emergency Solutions Grant - Provide street outreach, emergency shelter, rapid rehousing and homeless prevention services to the extremely low - income population in Garden Grove.

Target Date 6/30/2025
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Estimate the number
and type of families
that will benefit from
the proposed
activities
Tenant-based rental assistance / Rapid Rehousing - 4 Households Assisted
Homeless Person Overnight Shelter – 30 Persons Assisted Homelessness Prevention – 24 Persons Assisted (4 households) Other – 40 Other
Location Description Citywide
Planned Activities Provide street outreach, emergency shelter, rapid rehousing and homeless prevention services to the extremely low-income population in Garden Grove.

Administration - $12,733
Administration Total (7.5% Cap) - $12,733

Street Outreach - $50,000
Emergency Shelter - $51,000
Shelter and Outreach Total (60% Cap-$101,871.60) - $101,000

Homeless Prevention - $35,000
Rapid-Rehousing - $15,959
Homeless Management and Information Systems - $5,094

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AP-50 Geographic Distribution – 91.220(f)
Description of the geographic areas of the entitlement (including areas of low -income and minority concentration) where assistance will be directed The City has not established specific target areas to focus the investment of CDBG funds. Appendix B contains a map of block groups illustrating the lower -income areas in the City (defined as a block group where at least 51% of the population have incomes not exceeding 80% of the AMI). Investments in housing and community development services serving spec ial needs populations and primarily lower -income persons will be made throughout the City. Housing assistance will be available to income -qualified households citywide.

Geographic Distribution
Target Area Percentage of Funds
Citywide 59%
Table 8- Geographic Distribution

Rationale for the priorities for allocating investments geographically The majority of the city of Garden Grove qualifies as a low- and moderate-income area. Therefore, given the extensive needs in the community, the City has not targeted any specific neighborhood for investment of CDBG and HOME funds. Instead, projects are evaluated on a case -by-case basis, while considering emergency needs, cost effectiveness, feasibility, and availability of other funding to address th e specific needs.

Discussion
Refer to the discussion above.

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Affordable Housing
AP-55 Affordable Housing – 91.220(g)
Introduction
The City plans to utilize HOME and CDBG funds to support its authorized housing activities, including the Home Improvement G rant Program, tenant -based rental assistance, as well as the acquisition/rehabilitation of affordable housing units.

One Year Goals for the Number of Households to be Supported Homeless 10
Non-Homeless 20
Special-Needs 0
Total 30
Table 9 - One Year Goals for Affordable Housing by Support Requirement

One Year Goals for the Number of Households Supported Through Rental Assistance 10
The Production of New Units 0
Rehab of Existing Units 20
Acquisition of Existing Units 0
Total 30
Table 10 - One Year Goals for Affordable Housing by Support Type

Discussion
Refer to responses above.

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AP-60 Public Housing – 91.220(h)
Introduction
The City of Garden Grove Housing Authority receives federal funds to facilitate the housing needs of persons from low-income households. The City does not operate or own public housing units. However, it disseminates rental assistance through the Section 8 vouchers. The City is currently serving approximately 2,200 households through the rental assistance program.

Actions planned during the next year to address the needs to public housing Not Applicable. The City of Garden Grove does not operate any public housing units.

Actions to encourage public housing residents to become more involved in management and participate in homeownership
Not Applicable. The City of Garden Grove does not operate any public housing units.

If the PHA is designated as troubled, describe the manner in which financial assistance will be provided or other assistance
Not Applicable. The City of Garden Grove does not operate any public housing units.

Discussion
Refer to responses above.
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AP-65 Homeless and Other Special Needs Activities – 91.220(i) Introduction
Homeless prevention services are identified as a high priority need in the 2020 -2025 Consolidated Plan.

The City plans to address the needs of homeless individuals and those at risk of homelessness through allocation of ESG funds to support local efforts that prevent and address homelessness. The City of Garden Grove also administers the Home less Emergency Assistance Rental Transition (HEART) Program, which forms part of the Comprehensive Four -Point Approach to End Homelessness. Through HEART, a portion of a household’s rent (including security and utility deposits) is paid while offering services to achieve self- sufficiency. The program aims to assist 10 households over a 12-month period. The City will also continue to participate in the Orange County Continuum of Care System for the Homeless.

Describe the jurisdictions one -year goals and acti ons for reducing and ending homelessness including:

Reaching out to homeless persons (especially unsheltered persons) and assessing their individual needs
Garden Grove participates in the Orange County Continuum of Care (CoC ) system. For the past several years, leadership and coordination of Orange County’s Continuum of Care planning process have been the shared responsibility of OC Partnership, 211 Orange County, and the OC Community Services. This public/nonprofit partnersh ip helps ensure comprehensive and regional coordination of efforts and resources to reduce the number of homeless individuals and persons at risk of homelessness throughout Orange County. This group serves as the regional convener of the year -round CoC planning process and works as a catalyst for the involvement of the public and private agencies that make up the regional homeless system of care. The Orange County Continuum of Care system consists of 6 basic components:

1. Advocacy on behalf of those who are homeless or at-risk of becoming homeless;

2. A system of outreach, assessment, and prevention for determining the needs and conditions of an individual or family who is homeless;

3. Emergency shelters with appropriate supportive services to help ensure that homeless individuals and families receive adequate shelter and referrals;

4. Transitional housing to assist homeless individuals and families who are not prepared to make the transition to permanent housing and independent living;

5. Permanent housing or permanent s upportive housing to help meet the long -term needs of homeless individuals and families; and

6. Reducing chronic homelessness in Orange County and addressing the needs of homeless families and individuals using motels to meet their housing needs.

During FY 2024-25, the City plans to fund street outreach services to reach out to unsheltered homeless people; connect them with emergency shelter, housing or critical services; and provide urgent non - 408

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facility-based care to unsheltered homeless people who are unwilli ng or unable to access emergency shelter, housing or an appropriate health facility.

Addressing the emergency shelter and transitional housing needs of homeless persons The City actively participates in the Orange County CoC by attending meetings to discuss how to establish performance measures that benefit the broader goals of the region. Consistent with the objectives of the countywide CoC, the City's Neighborhood Improvement Division has developed several strategies to address homelessness. Some of the tasks recently undertaken by the City include:

1. Point in Time Survey conducted by the County of Orange and City Net;

2. Development of a brochure for homeless persons that includes an inventory of local community resources; and

3. Collaborating with ESG entitlement jurisdictions within the County of Orange to discuss issues, concerns, and best practices for meeting the needs of the homeless population.

In addition, the City addresses the emergency and transitional housing needs of h omeless persons through allocation of its ESG funds. Garden Grove will provide funding to Interval House, which provides domestic violence shelter and support services to victims of domestic violence. In addition, City Net, the City’s street outreach service provider will connect homeless individuals and families to local shelters and service providers.

The City mobilizes its Section 8 Housing Choice Voucher Program, to the extent possible, to address the needs of homeless individuals and families. The Housing Authority gives homeless families referred by social service and emergency/transitional shelter programs preference for Section 8 vouchers to assist in transitioning to stable and permanent housing.

The City plans to fund Interval House to provide sho rt to medium term rental assistance for up to 24 months, including up to six months of rental arrears, to homeless individuals and families. Homeless individuals and families will be located in permanent housing while they are given services to increase their income. In addition, Interval House will provide housing relocation, stabilization, case management, legal services for housing needs, and credit repair assistance. All services are designed to seamlessly transition clients into suitable and stable permanent housing.

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Helping homeless persons (especially chronically homeless individuals and families, families with children, veterans and their families, and unaccompanied youth) make the transition to permanent housing and independent living, including shortening the period of time that individuals and families experience homelessness, facilitating access for homeless individuals and families to affordable housing units, and preventing individuals and families who were recently homeless from becoming homeless again
Interval House advocates are specialized in assisting clients with housing search and placement through established operational agreements with over 40 landlords. Clients may be immediately housed in local CoC shelters or access emergency homeless assistance through social services during housing search. All ineligible applicants are offered resources through 2-1-1 County.

As part of the efforts to provide housing for the homeless and those at risk of homelessness, the City of Garden Grove will award HOME funds to service providers who provide rental assistance through the HEART Program. Interval House administers the program and are aiming to assist 10 households over a 12-month period through providing a portion of a household’s rent (including security and utility deposits) while offering services to achieve self-sufficiency.

Helping low-income individuals and families avoid becoming homeless, especially extremely low-income individuals and families and those who are: being discharged from publicly funded institutions and systems of care (such as health care facilities, mental health facilities, foster care and other youth facilities, and corrections programs and institutions); or, receiving assistance from public or private agencies t hat address housing, health, social services, employment, education, or youth needs.

The City works diligently to expand and conserve the affordable housing inventory, especially affordable rental housing that benefits the extremely low- and very low-income households who are most at risk of becoming homeless. Lower -income households referred to the Housing Authority by local transitional housing and emergency shelters are given priority for the Section 8 program. The City will allocate ESG funds to Mercy House to provide homeless prevention services in the form of short to medium term rental assistance for up to 24 months, including up to 6 months of arrears, to individuals and families at imminent risk of homelessness. The housing assistance provided will be located in permanent housing. In addition, funds for homeless prevention will also provide financial assistance such as rental application fees, security deposits and/or services such as case management, housing search and placement, and legal services.

Mercy House will engage persons in need of homeless prevention through referrals from 2 -1-1 Orange County and will participate i n the Orange County Homeless Provider Forum. To ensure that the most vulnerable are served, eligible households will be those at imminent risk of homelessness, who fall at or below 30% AMI, and have been served a notice of eviction. Mercy House will work with households to increase income, find employment, and set a household budget that will prepare them for long -term 410

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stability and to prevent recidivism and homelessness.

There will also be continued rental assistance for persons experiencing homelessness and those at risk of being homeless through the Homeless Emergency Assistance Rental Transition (HEART) Program that Interval House administers. The HEART Program is part of Garden Grove’s Comprehensive Four -Point Approach to End Homelessness, which provides rental assistance for persons who are homeless, and those at risk of homelessness. In addition, while receiving s ervices, case managers from Interval House will meet with the household receiving assistance regularly to encourage accomplishments of goals, money savings, and debt payoffs.

Discussion
Refer to responses above.

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AP-75 Barriers to affordable housing – 91.220(j)
Introduction:

Development Fees - The fees the City charges to process and review plans for residential developments may increase the cost of building affordable housing in the jurisdiction. This may, in turn, affect rents, which may become fair market rents.

Development Review and Permit Processing - The review process for building permits can be a constraint to housing development if they place an undue burden on the developer. The longer housing projects take to be built or rehabilitated, the higher the development or rehabilitation cost may become. This could also affect the affordable housing stock due to conversion to market rents.

Environmental Review Process - Environmental factors such as the presence of sensitive biological resources and habitats or geological hazards can constrain residential development in a community by increasing costs and reducing the amount of land suitable for housing construction Legislative Barriers - AB 1482 legislation was voted into law to prevent arbitrary rental increases on lower- income households. However, due to the 85 -day waiting period before the law came into effect on the 1st of January 2020, many tenants were given eviction notices so that their homes could be converted to market rents.

Financing - Economic conditions and national policies determine interest rates for borrowing money for residential developments as well as mortgage rates. This affects the ability to purchase or rehabilitate housing due to increased costs.

Infrastructure Constraints - Public facilities, particularly drainage and sewage, need to be updated and expanded constantly to accommodate the growing number of housing units. Deficiency in sewer capacity, as well as land designations for this essential infrastructure, reduces land tha t is available for housing development.

Environmental Constraints - The City of Garden Grove is located in a region with a seismic activity that may hinder the development of housing within certain areas. However, it is not located within an Alquist- Priolo Special Study Zone that would affect housing production. The Alquist -Priolo Earthquake Fault Zoning Act of 1972 prevents the construction of buildings used for human occupancy on the surface trace of active faults. The Act prohibits new construction of ho uses in California within these zones unless a comprehensive geologic investigation shows that the fault does not pose a hazard to the proposed structure.

The city of Garden Grove is within a flood zone, according to The Federal Emergency Management Agency (FEMA) maps. According to FEMA, the term "100-year flood" refers to the flood elevation level that has a 1% chance of being equaled or exceeded each year. There is a need for additional investment in flood 412

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prevention when developing residential units.

Actions it planned to remove or ameliorate the negative effects of public policies that serve as barriers to affordable housing such as land use controls, tax policies affecting land, zoning ordinances, building codes, fees and charges, growth limitations, a nd policies affecting the return on residential investment
Market and governmental factors pose barriers to the provision of adequate and affordable housing.

These factors tend to disproportionately impact lower - and moderate-income households due to their limited resources for absorbing the costs. Garden Grove works to remove barriers to affordable housing by implementing a Housing Element that is consistent with California law and taking actions to reduce costs or provide offsetting financial incentives to assist in the production of safe, high-quality, affordable housing. The City is committed to removing governmental constraints that hinder the production of housing and offers a “one -stop” streamlined permitting process to facilitate efficient entitlemen t and building permit processing.

The City of Garden Grove has instituted additional actions aimed at reducing the impact of the public sector role in housing costs. City efforts to remove barriers to affordable housing include:

1. Periodical analysis and revision of the zoning code aimed at developing flexible zoning provisions in support of providing an adequate supply of desirable housing, such as mixed -use zoning standards and updates to the Housing Element;

2. Provision of affordable housing projects through acquisition and rehabilitation activities, and new construction of affordable housing units;

3. Establishing a streamlined service counter to reduce the processing time;

4. Density bonuses for affordable projects; and

5. Continued assessment of existing policies, procedures, and fees to minimize unnecessary delays and expenses to housing projects.

Also, the City will use its Analysis of Impediments to Fair Housing Choice (AI) report in coordination with other local jurisdictions. The AI has identified any potential impediments to fair housing and has established a Fair Housing Action Plan to outline steps to overcome any identified impediments.

Discussion:

Refer to responses above.
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AP-85 Other Actions – 91.220(k)
Introduction:

This section discusses the City’s efforts in addressing underserved needs, expanding and preserving affordable housing, reducing lead -based paint hazards, and developing institutional structure for delivering housing and community development activities.

Actions planned to address obstacles to meeting underserved needs The major obstacle to addressing underserved needs is the lack of adequate funding, especially for affordable housing activities. With reduced state and federal funding levels, the City's ability to address the extensive needs in the community is seriously compromised. The City will strive to leverage available funds to overcome obstacles in meeting underserved needs. The City continues to use its 2021 -2029 Housing Element, which includes a commitment to pursue state, federal, and other funding opportunities to increase the supply of safe, decent, affordable housing in Garden Grove for lower-income households (including extremely low -income households), which includes: senior citizens, disabled, homeless, and those at risk of homelessness.

Actions planned to foster and maintain affordable housing Garden Grove has several programs in place to increase and preserve the supply of affordable housing for lower-income households. One of these programs produces affordable housing throu gh the acquisition and rehabilitation of existing housing units, as well as the construction of new units. In the past, the City has partnered with nonprofit organizations and housing developers to accomplish this goal. Increased sustainability of existing single-family housing is accomplished through the provision of grants to low - income residents and senior repairs homes.

Actions planned to reduce lead-based paint hazards
The City has an aggressive policy to identify and address lead-based paint hazards in HUD-funded housing rehabilitation projects. A licensed professional for detecting the presence of lead-based paint first inspects all housing units rehabilitated with federal funds. The City ensures lead -safe work practices are used to perform all rehabi litation where lead -based paint is identified. All homes identified as containing lead paint are tested post-rehabilitation to ensure the hazard has been mitigated.

Actions planned to reduce the number of poverty-level families Garden Grove continues to lo ok for ways to expand economic activities to include all people, including those at or below the poverty line. In the past, the City has focused on the creation of jobs for low - and moderate-income persons through economic development in the Harbor Boulevard area. In recent years, the Jobs 1st Program was implemented as a resource for businesses to create or retain jobs. The Jobs 1st 414

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Program offers financial assistance to for-profit businesses in exchange for them to hire or retain at least one low-income full-time employee.

In addition, other essential elements of the City’s anti-poverty strategy include:

1. Section 8 Housing Choice Voucher Program;

2. Housing Choice Voucher Family Self Sufficiency Program;

3. Economic development programs;

4. Workforce Investment Board outreach and training programs;

5. Anti-crime programs;

6. Housing rehabilitation programs;

7. Creation of affordable housing; and

8. Homeless service programs.

Through these programs, the City is working to reduce the number of families living below the poverty line. The goals and strategies contained in this Consolidated Plan aim to fund housing, community development, and community services. In addition, the City will allocate up to 15% of its CDBG funds annually to public service agencies that offer supportive services in an effort to reduce poverty.

Actions planned to develop institutional structure
Successful program implementation requires coordination, both internally and with outside agencies. The City makes changes, as needed, to its staff assignments to address the administrative, planning, and reporting needs of CDBG, HOME, and ESG funds. Project management improvements have included strengthened project eligibility review and staff training of regulatory compliance and procedures. The City of Garden Grove Neighborhood Improvement Division of the Community and Economic Development Department serves as the lead agency in the administration and compliance of CDBG, HOME, and ESG programs and grant management. The Neighborhood Improvement Division coordinates activities related to CDBG, HOME, and ESG funds, including coordination of internal departments, outside agencies, and grant recipients.

The City's ongoing efforts in its institutional structure include strengthening project designs through negotiating stronger and more specific performance goals for project contracts. This includes ongoing education and technical assistance for program stakeholders including fellow City Departments implementing HUD-funded programs, outside contractors, Neighborhood Improvement and Conservation Commission, City Council, and the public. The City also amended the Citizen Participation Plan to make it more readable and to officially designate the City Council as the public hearing body.

Capacity building is another development component within the City's institutional structure. In addition to in -house training and development of improved management systems, the City will continue to participate in all HUD training offered locally. To gather more information, build staff knowledge, and seek regional solutions to regional problems, the City participates in regional efforts such as the Orange County 415

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Continuum of Care for the Homeless.

Actions planned to enhance coordination between public and private housing and social service agencies
Housing, supportive services, and community development activities are delivered by a number of public agencies, nonprofit entities, and private organizations. The City of Garden Grove will continue to function in a coordinating role between local no n-profit service providers and other county, state, and federal organizations. To enhance coordination, the City participates in regional planning groups and forums to foster collaboration with other agencies and organizations.

Through collaboration, the City identifies common goals and strategies to avoid overlaps in services and programs and identify potential for leveraging resources. The City also continues to work with a wide range of public and community social service agencies to address the various needs of the community. The City also utilizes the services of 211 Orange County, whose mission is to help people in the community find the help they need by eliminating the barriers to finding and accessing social services.

Discussion:

Refer to responses above.
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Program Specific Requirements
AP-90 Program Specific Requirements – 91.220(l)(1,2,4)
Introduction:

Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out.

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

1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed $25,000

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

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

4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan 0

5. The amount of income from float-funded activities 0
Total Program Income: 0

Other CDBG Requirements

1. The amount of urgent need activities 0

2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low and moderate income. Overall Benefit - A consecutive period of one, two or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low and moderate income. Specify the years covered that include this Annual Action Plan. 100%

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HOME Investment Partnership Program (HOME)
Reference 24 CFR 91.220(l)(2)

1. A description of other forms of investment being used beyond those identified in Section 92.205 is as follows:

The City of Garden Grove does not anticipate using forms of investment beyond what is listed in Section 92.205.

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

The City of Garden grove does not anticipate using HOME funds for home -buyer activities during FY 2024-25.

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

The City of Garden Grove does not anticipate using HOME funds for home -buyer activities during FY 2024-25.

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

The City of Garden grove does not anticipate using HOME funds to refinance existing debt.

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Emergency Solutions Grant (ESG)
Reference 91.220(l)(4)

1. Include written standards for providing ESG assistance (may include as attachment) Please see City of Garden Grove Protocols for Administering the Emergency Solutions Grant, included as Appendix C.

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

The City of Garden Grove participates in the Orange County Continuum of Care system (CoC). The Orange County CoC has established the Orange County Homele ss Management Information System (HMIS), an online database used by homeless and at-risk service providers that records demographic and service usage data and produces an unduplicated count of the people using those services.

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

The City, along with the cities of Anaheim, Irvine, Santa Ana and the County of Orange, has developed the Orange County ESG collaborative. During the 5 -year Consolidated Plan cycle, the collaborative conducts an open and competitive Request for Proposal process for making sub-awards.

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

The City consult s with the Continuum of Care, which has former homeless individuals as members.

Subrecipients who run the shelters and the rapid re-housing programs in the community have former homeless individuals in their organizations who help shape policies and make decisions about services and programs that receive ESG funding.

5. Describe performance standards for evaluating ESG.

The performance standards for evaluating ESG are described in the Protocols for Administration of The Emergency Solutions Grant, included in Appendix C.

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APPENDIX A

SUMMARY OF PUBLIC OUTREACH

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NOTICE OF PUBLIC COMMENT PERIOD AND PUBLIC HEARING
FOR PROPOSED FY 2024-25 ACTION PLAN

FOR USE OF HUD FUNDS

GARDEN GROVE NEIGHBORHOOD IMPROVEMENT AND CONSERVATION

COMMISSION
AND

GARDEN GROVE CITY COUNCIL

The City of Garden Grove is an Entitlement City for the U.S. Department of Housing and Urban Development's (HUD) Community Development Block Grant, HOME Investment Partnership Act, and Emergency Solutions Grant.

On March 4, 2024, at 6:30 p.m., the Garden Grove Neighborhood Improvement and Conservation Commission will hold a Public Hearing in the Council Chambers of the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, to consider the Fiscal Year (FY) 2024-25 Action Plan, covering the period o f July 1, 2024, through June 30, 2025. This Action Plan will allocate approximately $3 million in new HUD funds.

On April 9, 2024, at 6:30 p.m., the City Council will also hold a Public Hearing in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove, to consider the FY 2024-25 Action Plan.

Opportunity for Public Review and Comment

From February 23, 2024 through April 9, 2024, the City’s FY 2024-2025 Action Plan will be available for public review at the following location:

Please visit the City’s website at https://ggcity.org/neighborhood- improvement/reports to review the FY 2024-25 Action Plan, and please submit comments electronically to Dana Yang at [email protected].

The Economic Development and Housing Department will accept written and verbal comments until 3:00 p.m. on April 9, 2024. Please direct any questions or comments to Dana Yang, at (714) 741-5131 or by email at [email protected].

/s/ Teresa Pomeroy
City Clerk

Dated: 2/16/24
Publish: 2/23/24

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AVISO DE AUDIENCIA PÚBLICA
REFERENTE AL PLAN DE ACCIÓN PROPUESTO PARA EL AÑO FISCAL 2024-2025

PARA EL USO DE FONDOS DE HUD

COMISIÓN DE MEJORIA Y CONSERVACIÓN DE VECINDARIOS DE GARDEN GROVE Y

CONSEJO MUNICIPAL DE GARDEN GROVE

La ciudad de Garden Grove es una ciudad habilitada para la Subvención en Bloque para el Desarrollo Comunitario (CDBG), la Ley de Asociación de Inversión HOME (HOME) y la Subvención para Soluciones de Emergencia (ESG) del Departamento de Vivienda y Desarrollo Urbano de los EE.UU. (HUD).

El 4 de marzo del 2024, a las 6:30 p .m., la Comisión de Conservación y Mejoramiento del Vecindario de Garden Grove llevará a cabo una Audiencia Pública en la Cámara del Consejo del Centro de Reuniones Comunitarias, 11300 Stanford Avenue, Garden Grove, para considerar el Plan de Acción del año fiscal 2024-25, que abarca el período del 1 de julio de l 2024 al 30 de junio del 2025. Este Plan de Acción asignará aproximadamente $3 millones en nuevos fondos de HUD.

El 9 de abril del 2024, a las 6:30 p.m., el Concejo Municipal también llevará a cabo una Audiencia Pública en el Centro de Reuniones Comunitarias, 11300 Stanford Avenue, Garden Grove, para considerar el Plan de Acción del año fiscal 2024-25.

Oportunidad de Revisión y Comentarios Públicos
Desde el 23 de febrero del 2024 al 9 de abril del 2024, el Plan de Acción de la ciudad para el año fiscal 2024-2025 estará disponible para revisión pública en la siguiente ubicación:

Por favor v isite el sitio web de la ciudad en https://ggcity.org/neighborhood- improvement/reports para revisar el Plan de A cción del año fiscal 2024-2025 y envíe sus comentarios electrónicamente a Monica Covarrubias en [email protected].

El Departamento de Vivienda y Desarrollo Económico aceptará comentarios escritos y verbales hasta las 3:00 p.m. el 9 de abril del 2024. Dirija cualquier pregunta o comentario a Monica Covarrubias, al (714) 741-5788 o por correo electrónico a [email protected].

/s/ Teresa Pomeroy
City Clerk

Con fecha de: 2/16/24
Publicar: 2/23/24

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THÔNG BÁO BUỔI ĐIỀU TRẦN CHO CÔNG CHÚNG
VỀ KẾ HOẠCH HÀNH ĐỘNG ĐỀ NGHỊ CHO NIÊN KHÓA 2024-25 VỀ
VIỆC DÙNG QUỸ HUD

ỦY BAN BẢO TRÌ VÀ CẢI THIỆN KHU XÓM GARDEN GROVE
VÀ
HỘI ĐỒNG THÀNH PHỐ GARDEN GROVE

Thành phố Garden Grove là một Thành Phố Đặc Quyền thuộc Ban Phát Triển Gia Cư và Đô Thị (HUD) Hoa Kỳ, Trợ Cấp Khu Phố Phát Triển Cộng Đồng (CDBG), Đạo Luật Cộng Tác Đầu Tư HOME (HOME), và các chương trình Trợ Cấp Giải Pháp Khẩn Cấp (ESG).

Vào ngày 4 tháng Ba, 2024, lúc 6:30 chiều, Ủy Ban Bảo Trì và Cải Thiện Kh u Xóm Garden Grove sẽ tổ chức một buổi Điều Trần Công Khai tại Phòng Họp Hội Đồng Thành Phố, địa chỉ là 11300 Stanford Avenue, Garden Grove, để xem xét Kế Hoạch Hành Động cho niên khóa 2024-25, áp dụng cho thời kỳ từ 1 tháng Bảy, 20 24, cho tới ngày 30 tháng Sáu, 2025. Kế Hoạch Hành Động này sẽ cấp khoảng $3 triệu cho quỹ HUD mới.

Vào ngày 9 tháng Tư, 2024, lúc 6:30 chiều, Hội Đồng Thành Phố cũng sẽ tổ chức một buổi Điều Trần Công Khai tại Phòng Họp Hội Đồng, địa chỉ là 11300 Stanford Avenue, Garden Grove, để xem xét Kế Hoạch Hành Động cho niên khóa 2024-25.

Cơ Hội cho Công Chúng Xem Duyệt và Góp Ý

Từ ngày 23 tháng Hai, 2024 cho tới ngày 9 tháng Tư, 2024, Kế Hoạch Hành Động đề nghị cho niên khóa 2024-25 sẽ có sẵn để công chúng xem xét tại các địa điểm sau:

Vui lòng truy cập https://ggcity.org/neighborhood-improvement/reports để xem xét sửa đổi AP 2024-2025, và vui lòng gửi ý kiến trực tiếp bằng cách email cho cô Kristy Thai tại [email protected].

Phòng Phát triển Kinh tế và Cơ quan Gia cư sẽ tiếp nhận ý kiến bằng văn bản và lên tiếng góp ý cho đến 3:00 giờ chiều ngày 9 tháng Tư, 2024. Vui lòng liên lạc cô Kristy Thai tại (714) 741-5101 nếu có bất kỳ câu hỏi hoặc nhận xét nào hoặc gởi email đến [email protected].

/s/ Teresa Pomeroy
Thư Ký Thành Phố
Ngày: 16/2/24
Ngày công bố: 23/2/24
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APPENDIX B

MAPS OF PROJECTS

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APPENDIX C

EMERGENCY SOLUTIONS GRANT PROTOCOLS

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City of Garden Grove

Protocols for Administering
The Emergency Solutions Grant

City of Garden Grove

COMMUNITY DEVELOPMENT DEPARTMENT

NEIGHBORHOOD IMPROVEMENT DIVISION
11222 ACACIA PARKWAY
GARDEN GROVE, CA 92840

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OVERVIEW
This document establishes protocols for administering the Emergency Solutions Program (ESG) and replaces previous protocols for the defunc t Emergency Shelter Grants Program. The protocols herein incorporate changes in the ESG program pursuant to the Interim Rule (effective January 4, 2012) , which established the regulations for the Emergency Solutions Grants Program (ESG). Unlike the forme r Emergency Shelter Grants Program that empha sized serving the needs of the homeless in emergency or transitional shelters, the focus of the ESG aims at “assisting people to quickly regain stability in permanent housing after experiencing a housing crisis and/or homelessness” (Interim Rule, Federal Register / Vol. 76, No. 233. p. 75954).

Regulatory Authority. The Homeless Emergency Assistance and Rapid Transition to Housing (HEARTH) Act of 2009, was promulgated on May 20, 2009, reauthorized and amended the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11371 et seq) consolidating three homeless assistance programs into one grant program and revising the Emergency Shelter Grants program and renaming it as the Emergency Solutions Grants (ESG) program. The HEARTH Act also codifies into law the Continuum of Care planning process.

Effective January 4, 2012, the Homeless Emergency Assistance and Rapid Transition to Housing:

Emergency Solutions Grants Program and Consolidated Plan Conforming Amendments interim rule revised the regulations for the Emergency Shelter Grants program by establishing the regulations for the Emergency Solutions Grants program, which replaced the Emergency Shelter Grants program.

Objectives. The ESG Program provides funding to achieve these objectives:

 Engage homeless individuals and families living on the street;  Improve the number and quality of emergency shelters for homeless individuals and families;  Help operate these shelters;
 Provide essential services to shelter residents,
 Rapidly re-house homeless individuals and families, and  Prevent families/individuals from becoming homeless.

Beneficiary Eligibility
City staff will ensure compliance by subrecipients with the minimum eligibility criteria for ESG beneficiaries:
 For e ssential services related to street outreach, beneficiaries must meet the criteria under paragraph (1)(i) of the “homeless” definition under 24 CFR 576.2, namely:

An individual or family with a primary nighttime residence that is a public or private plac e not designed for or ordinarily used as a regular sleeping accommodation for human beings, including a car, park, abandoned building, bus or train station, airport, or camping ground;

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 For emergency shelter, beneficiaries must meet the “homeless” definition in 24 CFR 576.2. (1) An individual or family who lacks a fixed, regular, and adequate nighttime residence, meaning:
(i) An individual or family with a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings ,including a car, park, abandoned building, bus or train station, airport, or camping ground;
(ii) An individual or family living in a supervised publicly or privately operated shelter designated to provide temporary living arrangements (including congregate shelters, transitional housing, and hotels and motels paid for by charitable organizations or by federal, state, or local government programs for low income individuals); or
(iii) An individual who is exiting an institution where he or she resided for 90 days or less and who resided in an emergency shelter or place not meant for human habitation immediately before entering that institution; (2) An individual or family who will imminently lose their primar y nighttime residence, provided that
:(i) The primary nighttime residence will be lost within 14 days of the date of application for homeless assistance;
(ii) No subsequent residence has been identified; and
(iii) The individual or family lacks the resources or support networks, e.g., family, friends, faith -based or other social networks, needed to obtain other permanent housing;
(3) Unaccompanied youth under 25 years of age, or families with children and youth, who do not otherwise qualify as homeless under this definition, but who:
(i) Are defined as homeless under section 387 of the Runaway and Homeless Youth Act (42 U.S.C. 5732a), section 637 of the Head Start Act (42 U.S.C. 9832), section 41403 of the Violence Against Women Act of 1994 (42 U.S.C. 14043e–2), section 330(h) of the Public Health Service Act (42 U.S.C. 254b(h)), section 3 of the Food and Nutrition Act of 2008 (7 U.S.C. 2012), section 17(b) of the Child Nutrition Act of 1966 (42 U.S.C. 1786(b)) or section 725 of the McKinney -Vento Homeless Assistance Act (42 U.S.C. 11434a);
(ii) Have not had a lease, ownership interest, or occupancy agreement in permanent housing at any time during the 60 days immediately preceding the date of application for homeless assistance;
(iii) Have experienced persist ent instability as measured by two moves or more during the 60-day period immediately preceding the date of applying for homeless assistance; and
(iv) Can be expected to continue in such status for an extended period of time because of chronic disabilities, chronic physical health or mental health conditions, substance addiction, histories of domestic violence or childhood abuse (including neglect), the presence of a child or youth with a disability, or two or more barriers to employment, which include the lack of a high school degree or General Education Development (GED), illiteracy, low English proficiency, a history of incarceration or detention for criminal activity, and a history of unstable employment; or
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(4) Any individual or family who:
(i) Is fleei ng, or is attempting to flee, domestic violence, dating violence, sexual assault, stalking, or other dangerous or life -threatening conditions that relate to violence against the individual or a family member, including a child, that has either taken place within the individual’s or family’s primary nighttime residence or has made the individual or family afraid to return to their primary nighttime residence;
(ii) Has no other residence; and
(iii) Lacks the resources or support networks, e.g., family, friend s, faith based or other social networks, to obtain other permanent housing.

 For essential services related to emergency shelter, beneficiaries must be “homeless” and staying in an emergency shelter (which could include a day shelter).  For homelessness pr evention assistance, beneficiaries must meet the requirements described in 24 CFR 576.103par. That is, those who meet the criteria under “At Risk of Homelessness”, and who have an annual income below 30% of the median family income for the area. At Risk of Homelessness” means an individual or family who has an annual income below 30 percent of median family income for the area, as determined by HUD, and does not have sufficient resources or support networks.
 For rapid re -housing assistance, beneficiaries mu st meet requirements described in 24 CFR 576.104, that is:

Program participants who meet the criteria under paragraph (1) of the ‘‘homeless’’ definition in § 576.2 or who meet the criteria under paragraph (4) of the ‘‘homeless’’ definition and live in an emergency shelter or other place described in paragraph (1) of the ‘‘homeless’’ definition.

Further eligibility criteria may be established at the local level in accordance with 24 CFR 576.400(e).

Minimum Documentation. The following standards for docume nting homelessness are to be monitored by City staff.

Persons living on
the street
Certify that the persons
served reside on the street.

Provision of services (e.g., outreach, food, health care, clothing) to persons who reside on the streets and not i n shelters or other places meant for human habitation),
require the outreach or service worker to sign and date a general certification that:
 verifies that the services are going to homeless
persons, and
 indicates where the persons served reside.

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Persons coming
from living on the
street (and into a
place meant for
human habitation)
Obtain information to indicate
that the participant is coming
from the street.

You must verify that an individual is coming from the street through:
 organizations or outreach workers who have assisted
him/her in the past;
 determining where the resident receives assistance
checks, if applicable; and/or
 other information regarding the participant’s recent
past activities.

Document your verification efforts! Your staff should
prepare a statement that is then signed and dated.

As a last resort, if you are unable to verify in this manner that the person is coming from living on the street, the participant or a staff member may prepare a short written statement about the participant’s previous living place and have the participant sign the statement and date it.

Persons coming
from
an emergency
shelter
Verify from the emergency
shelter staff that the
participant has been residing
at the emergency shelter.

You need to obtain from the referring agency a written, signed, and dated verification that the individual has been a resident of the emergency shelter.

Persons coming
from a transitional
housing
Verify with the transitional
housing staff that:

 the participant has been
residing at the
transitional housing; and

 the participant was living
on the streets or in an
emergency shelter prior
to living in the transitional
housing facility or was
discharged from an
institution or evicted prior
to living in the transitional
housing and would have
been homeless if not for
the transitional housing.

You must obtain from the referring agency two written,
signed, and dated verifications:

 a signed statement from the transitional housing staff indicating that the individual had been a resident there; and

 the referring agency’s written, signed, and dated
verification as to the individual’s homeless status when he/she entered their program.

If the referring agency did not verify the individual’s homeless status upon entry into their program, you will need to verify that status yourself. That is, in addition to the written, signed, and dated verification from the referring agency that the individual has been residing in the
transitional housing, you need to verify their status upon entry into transitional housing and document that status according to the instructions here.
(For example, if the person was living on the streets before moving into the transitional housing, you will need to obtain the documenta tion required under “Persons coming from
living on the street” above).

Persons being
evicted from a
private dwelling
Have evidence of the eviction
proceedings.

You need to obtain two types of information:

 Documentation of:
 the income of the participant;
 what efforts were made to obtain housing; and
 why, without the homeless assistance, the
participant would be living on the street or in an
emergency shelter.

 Documentation of one of the following:
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 For formal eviction proceedings, evidence that the
participant was being evicted within the week
before receiving homeless assistance;
 Where a participant’s family is evicting, a signed
and dated statement from a family member
describing the reason for the eviction;
 Where there is no formal evi ction process (in
these cases, persons are considered evicted
when they are forced out of the dwelling unit by
circumstances beyond their control), two things
are needed:

 a signed and dated statement from the
participant describing the situation; and

 documentation and verification (through
written, signed, and dated statements) of
efforts to confirm that these circumstances
are true.

Persons from a
short term stay
(up to 30
consecutive days)
in an institution
who previously
resided
on the street or in
an emergency
shelter
Verify from the institution staff
that the participant has been
residing at the institution and
was homeless before entering
the institution
. You must obtain:

 written verification from the situation’s staff that the participant has been residing in the institution for less that 31 days; and

 information on the previous living situation. Preferably, this will be the institution’s written, signed, and dated verification on the individual’s homeless status when
he/she entered th e institution. If the institution’s staff did not verify the individual’s homeless status upon
entry into the institution, you will need to verify that status yourself, according to the instructions above
(i.e., if the person was living on the streets befo re
moving into the institution, you will need to obtain the documentation required under “Persons coming from
living on the street”).

Persons being
discharged from a
longer stay in an
institution
Verify from the institution staff
that the participant has been
residing at the institution and
will be homeless if not
provided with assistance.

You need to obtain signed and dated:

 evidence from the institution’s staff that the participant was being discharged within the week before receiving
homeless assistance; and

 documentation of the following:

 the income of the participant;
 what efforts were made to obtain housing; and
 why, without the homeless assistance, the
participant would be living on the street or in an
emergency shelter.

Persons flee ing
domestic violence
Verify that the participant is
fleeing a domestic violence
situation.

You must obtain written, signed, and dated verification from the participant that he/she is fleeing a domestic violence situation.

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If the participant is unabl e to prepare the verification, you may prepare a written statement about the participant’s previous living situation, have the participant sign, and date it.

SALIENT ESG COMPONENTS
The following summarizes the five allowable ESG components and correspon ding activities. Refer to Exhibit 1 for a detailed summation of ESG components, activities and allowable costs.

 Street Outreach. Essential Services necessary to reach out to unsheltered homeless individuals and families, connect them with emergency shel ter, housing, or critical services, and provide them with urgent, non-facility-based care. Component services per 24 CFR 576.101 comprise the following:

 Engagement,
 Case management,
 Emergency health and mental health services,
 Transportation.

 Emergency Shelter. Per 24 CFR 576.102, ESG funds may be used to renovate a building to serve as an emergency shelter. Site must serve homeless persons for at least 3 or 10 years, depending on the cost and type of renovation (major rehabilitation, conversion, o r other renovation). Note: Property acquisition and new construction are ineligible.

 Essential Services for individuals and families in emergency shelter. Component services generally consist of case management, childcare, education services, employment assistance and job training, outpatient health services, legal services, life skills training, mental health services, substance abuse treatment services, and transportation.

 Shelter Operations, including maintenance, rent, security, fuel, equipment, ins urance, utilities, and furnishings.

 Relocation assistance for persons displaced by a project assisted with ESG funds.

 Homelessness Prevention . Housing relocation and stabilization services and/or short and/or medium-term rental assistance necessary to prevent the individual or family from moving into an emergency shelter or another place described in paragraph (1) of the “homeless” definition in § 576.2.

Component services and assistance generally consist of short -term and medium -term rental assistance, rental arrears, rental application fees, security deposits, advance payment of last month's rent, utility deposits and payments, moving costs, housing search and placement, housing 433

stability case management, mediation, legal services, and credit repair . For specific requirements and eligible costs, see 24 CFR 576.103, 576.105, and 576.106.

 Rapid Re -Housing. Housing relocation and stabilization services and short and/or medium -term rental assistance as necessary to help individuals or families living i n an emergency shelter or other place described in paragraph (1) of the “homeless” definition move as quickly as possible into permanent housing and achieve stability in that housing.

Component services and assistance generally consist of short -term and m edium-term rental assistance, rental arrears, rental application fees, security deposits, advance payment of last month's rent, utility deposits and payments, moving costs, housing search and placement, housing stability case management, mediation, legal services, and credit repair. For specific requirements and eligible costs, see 24 CFR 576.104, 576.105, and 576.106.

The following chart summarizes the ESG components and related activities:

Components
ESG Eligible Activities
Renovation/
Rehab
Essential
Services
Operations
Housing
Relocation &
Stabilization/
Financial
Assistance
Housing
Relocation &
Stabilization/
Financial
Services
Rental
Assistance
Street Outreach 
Shelter   
Homeless Prevention   
Rapid Re-Housing   

ESG funds are also used for the following:

 HMIS. Grant funds may be used for certain Homeless Management Information System (HMIS) and comparable database costs, as specified at 24 CFR 576.107.  Administration. Pursuant to 24 CFR 576.108.,u p to 7.5% of a recipient’s fiscal year grant can be used for administrative activities, such as general management, oversight, coordination, and reporting on the program. State recipients must share administrative funds with their subrecipients who are local governments and may share with their subrecipients who are nonprofit organizations.

SALIENT MONITORING COMPONENTS
City staff will monitor subrecipients to ensure compliance with ESG requirements outlined below.

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The Eligibility Evaluation form and the Subrecipient Agreemen t will include the following performance objective and performance outcome by ESG activity category.

ESG Activity
Category in IDIS
Performance Objective Performance Outcome
Create
Suitable Living
Environments
Provide Decent
Affordable
Housing
Availability/
Accessibility Affordability
Shelter  
Street Outreach  
Homeless Prevention  
Rapid Re-Housing  

Obligation & Expenditure Deadlines
In accordance with 24 CFR 576.203, the City is to adhere to the following deadlines:

ESG Timeliness Requirement Timeframe
Obligate funds (from the date HUD signs the grant agreement) 60 Days Select subrecipient organizations 120 Days
Reimburse subrecipient organizations 30 Days
Expend all ESG funds 2 Years

In addition, an Emergency Shelter facility must be maintained and used for the homeless based upon minimum time periods ( See 24 CFR 576.102(c)(1)) according to the types of activities assisted with ESG funds. Emergency Shelter Facilities (24 CFR 576.2) comprise facilities primarily intended to pro vide a temporary shelter for the homeless in general or for specific populations of the homeless and which do not require occupants to sign leases or occupancy agreements.

Emergency Shelter
Activities Timeframe
Major Rehabilitation 10 years after the date the building is first occupied by a homeless individual or family after the completed Rehabilitation, if Rehabilitation costs exceed 75 percent (75%) of the value of the building before Rehabilitation. A recorded deed or use restriction is required.

Conversion 10 years after the date the building is first occupied by a homeless individual or family after the completed Conversion, if Conversion costs exceed 75 percent of the value of the building after Conversion. A recorded deed or use restriction is required.

Renovation 3 years after the date the building is first occupied by a homeless individual or family after the completed Renovation.

Shelter Operations or
Essential Services
Term of the Standard Agreement, without regard to a particular site or structure, so long as the Applicant serves the same type of persons (e.g., families with children, unaccompanied youth, veterans, disabled individuals, or victims of domestic violence) or persons in the same geographic area.

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GENERAL REQUIREMENTS
Along with monitoring activity eligibility, cost eligibility and proper documentation to support beneficiary eligibility, City staff will also ensure compliance with the following general requirements.

 Uniform Administrative Requirement. ESG regulation s at 24 CFR 576.407(c) require the governmental agencies apply 24 CFR Part 85 , except for 24 CFR 85.24 and 85.42 , and program income is to be used as match under 24 CFR 85.25 (g). The requirements of 24 CFR Part 84 apply to Private Nonprofit subrecipients, except for 24 CFR 84.23 and 84.53 , and program income is to be used as the non-Federal share under 24 CFR 84.24 (b).

 Homeless Participation. Under 24 CFR 576.405 the City is ensure subrecipients provide for the participation of not less than one hom eless individual or formerly homeless individual on the Board of Directors or other equivalent policy -making entity, to the extent that the entity considers and makes policies and decisions regarding any facilities, services or other assistance that receiv es funding under ESG.

 Program Termination . The City will review the termination/denial policy in each subrecipient’s Written Standards to verify that the following minimal components are included : a progressive discipline warning system, written notices, a formal appeal process, and consideration of the appeal by someone not involved in the original termination. Staff will also monitor each subrecipient’s compliance with ESG regulations at 24 CFR 576.402 to ascertain whether persons or families receiving assistance who violate program requirements are terminated only in the most severe cases . The subrecipient is required to terminate assistance in accordance with a formal process that has been established and that recognizes the rights of individuals or families affected.

City staff will monitor compliance with the following area -wide systems coordination requirements pursuant to 24 CFR 576.400.

 Consultation with CoCs . Staff will assist subrecipients are to consult with the CoC to (1) determine how ESG funds will be allocated in that region; (2) identify the performance standards for evaluating the outcomes of projects and activities; and (3) identify the funding, policies and procedures for the administration and operation of the HMIS, if appropriate

 Coordination with Other Targeted Homeless Services . City staff will monitor subrecipients to verify that other programs are targeted to homeless people in the area covered by the CoC to provide a strategic, community-wide system to prevent and end homelessness for that area.

 System and Program Coordination with Mainstream Resources . The subrecipient is to coordinate and integrate ESG -funded activities with mainstream housing, health, social services, employment, education, and youth programs for which families and individuals at risk of homelessness and homeless individuals and families may be eligible. 436

 Centralized or Coordinated Assessment . E ach ESG -funded subrecipient is to work with the CoC to ensure the screening, assessment and referral of participants are consistent with the Written Standards. A Victim Service Provider may choose not to use the CoC Centralized or Coordinated Assessment System.

 Written Standards .Once the CoC has developed Written Standards in accordance with the requirements outlined in 24 CFR 576.400(e)(2)(3), Each subrecipient is to use the CoC’s Written Standards.

 Participation in HMIS . The subrecipient is to ensure that data on all persons served and all activities assisted under ESG are entered into the applicable community-wide HMIS in the area in which those persons and activities are located, or a comparable database in accordance with HUD’s standards on participation, data collection and reporting under a local HMIS. If the subrecipient is a Victim Service Pro vider or a Legal Services Provider, it may use a comparable database that collects client level data over time (i.e., longitudinal data) and generates unduplicated aggregate reports based on the data. Information entered into a comparable database must not be entered directly into or provided to an HMIS.

City staff will monitor each subrecipient ’s compliance with other federal and state requirements set forth at 24 CFR 576.406-576.408.

 Per 24 CFR 576.407(a) , the subrecipient is to adhere to t he requ irements in 24 CFR Part 5, Subpart A, including the nondiscrimination and equal opportunity requirements at 24 CFR 5.105(a).

Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 41701u, and implementing regulations at 24 CFR Part 135 apply , except that homeless individuals have priority over other Section 3 residents in accordance with 24 CFR 576.405(c).

 Faith-Based Activities. Religious organizations may receive ESG funds if agree able to providing all eligible ESG activities in a manne r that is in accordance with 24 CFR 576.406. ESG funds may not be used for the rehabilitation of structures if those structures are used for inherently religious activities. Where a structure is used for both eligible and inherently religious activities, f unds may not exceed the cost of those portions of the rehabilitation that are attributable to eligible activities in accordance with the federal cost accounting requirements. Sanctuaries, chapels, or other rooms the religious congregation uses as its princ ipal place of worship are ineligible for ESG -funded improvements. Disposition of real property after the term of the grant, or any change in use of the property during the term of the grant, is subject to government -wide regulations governing real property disposition (See 24 CFR Parts 84 and 85).

437

 Organizations that are religious or faith -based are eligible to receive ESG funds but may not engage in inherently religious activities, such as worship, religious instruction, or proselytization as part of the programs or services funded under ESG. Refer to 24 CFR 576.406 for additional details.

 Affirmative Outreach . As required under 24 CFR 576.407(b) , the subrecipient is to establish procedures that ensure the use of the facilities, assistance, and services are available to all on a nondiscriminatory basis.

 Displacement, Relocation, and Acquisition . In accordance with 24 CFR 576.408 , the displacement of persons as a result of a Components/Activities assisted with ESG funds must be provided Relocation Assistance pursuant to the URA and 49 CFR Part 24. Temporary relocation is not permitted. No tenant occupant of housing (a dwelling unit) that is converted into an Emergency Shelter may be required to relocate temporarily for a Component/Activity assisted wi th ESG funds or be required to move to another unit in the same building/complex. The acquisition of real property, whether funded privately or publicly, for a Component/Activity assisted with ESG funds is subject to the URA and the federal government -wide regulations at 49 CFR Part 24, Subpart B.

Refer to 24 CFR 576.408 for additional details.

 Match. City staff will monitor matching contributions from each subrecipient to verify that the amount of match equals the amount of ESG funds received p er 24 CF R 576.201 , and that the match sources include any federal source other than the ESG Program, as well as State, local, and private sources (see 24 CFR 576.201).

 Shelter and Housing Standards . City staff will require per 24 CFR 576.403 that any ESG - assisted shelter to meet minimum Habitability Standards. Shelters renovated with ESG funds , are to meet State or local government Safety and Sanitation Standards, as applicable, include energy - efficient appliances and materials , as well as incorporate lead -based paint remediation and disclosure requirements.

 Recordkeeping and Reporting Requirements . City staff will monitor subrecipients have written policies and procedures to ensure that ESG funds are used in accordance with requirements at 24 CFR 576.500. In addition, sufficient records must be established and maintained to enable HCD and HUD to determine whether ESG requirements are being met. Refer to for additional details. (24 CFR 576.500):
 Homeless status. F ollow written intake procedures to ensure compliance with the homeless definition in § 576.2. The procedures must require documentation at intake of the evidence relied upon to establish and verify homeless status.
 At risk of homelessness status . For each individual or family who receives ESG homelessness prevention assistance, the records must include the evidence relied upon to establish and verify the individual or family's “at risk of homelessness” status. This evidence must include an intake and certification form that meets HUD specifications. 438

 Determinations of ineligibility. For each individual and family determined ineligible to receive ESG assistance, the record must include documentation of the reason for that determination.  Annual income. For each program participant who receives homelessness prevention assistance, or who receives rapid re-housing assistance longer than one year  Income evaluation form completed by the subrecipient; and  Source documents for the assets held by the program participant and income received over the most recent period ( e.g., wage statement, unemployment compensation statement, public benefits statement, bank statement);
 If source documents are unobtainable, a written statement by the relevant third party (e.g., employer, government benefits administrator) or the written certification by the subrecipient's intake staff of the oral verification by the relevant third party of the income the program participant received over the most recent period for which representative data is available; or
 If source documents and third party verification are unobtainable, the written certification by the program participant of the amount of income the program participant received for the most recent period repr esentative of the income that the program participant is expected to receive over the 3 -month period following the evaluation.
 Program participant records. In addition to evidence of homeless status or “at risk of homelessness” status, as applicable, recor ds must be kept for each program participant that document:
 The services and assistance provided to program participant, including the security deposit, rental assistance, and utility payments made on behalf of the program participant;
 Compliance with the applicable requirements for providing services and assistance to t program participant under the program components and eligible activities provisions at § 576.101 through §576.106, the provision on determining eligibility and amount and type of assistance at § 576.401(a) and (b) , and the provision on using appropriate assistance and services at § 576.401(d) and (e); and
 Where applicable, compliance with the termination of a ssistance requirement in § 576.402.
 Centralized or coordinated assessment systems and procedures. Documentation evidencing written intake procedures for, the centralized or coordin ated assessment system(s) developed by the CoC.
 Rental assistance agreements and payments. The records must include copies of all leases and rental assistance agreements for the provision of rental assistance, documentation of payments made to owners for the provision of rental assistance, and supporting documentation for these payments, including dates of occupancy by program participants.  Utility allowance. The records must document the monthly allowance for utilities (excluding telephone) used to determine compliance with the rent restriction. 439

 Shelter and housing standards. Documentation of compliance with the shelter and housing standards in § 576.403, including inspection reports.
 Emergency shelter facilities. The amount and type of assistance provided to each emergency shelter.
 Services and assistance provided. Types of essential services, rental assistance, and housing stabilization and relocation services and the amounts s pent on these services and assistance. Subrecipients that are units of general-purpose local government must keep records to demonstrate compliance with the maintenance of effort requirement, including records of the unit of the general-purpose local government's annual budgets and sources of funding for street outreach and emergency shelter services.  Coordination with C oC and other programs. Document their compliance with the requirements of § 576.400 for consulting with the C oC and coordinating and integrating ESG assistance with programs targeted toward homeless people and mainstream service and assistance programs.
 HMIS. Records of the participation in HMIS or a comparable database by all projects.  Matching. The recipient must keep records of the source and use of contributions made to satisfy the matching requirement in § 576.201. The records must indica te the particular fiscal year grant for which each matching contribution is counted. The records must show how the value placed on third party , noncash contributions was derived. To the extent feasible, volunteer services must be supported by the same meth ods that the organization uses to support the allocation of regular personnel costs.
 Conflicts of interest. Records to show compliance with the organizational conflicts -of-interest requirements in § 576.404(a), a copy of the personal conflicts of interest policy or codes of conduct developed and implemented to comply with the requirements in § 576.404(b), and records supporting exceptions to the personal conflicts of interest prohibitions.  Homeless participation. Document compliance with the homeless participation requirements under § 576.405.
 Faith-based activities. Document compliance with the faith -based activities requirements under § 576.406.
 Other Federal requirements. Document compliance with the Federal requirements in § 576.407, as applicable, including:
 Records demonstrating compliance with the nondiscrimination and equal opportunity requirements under § 576.407(a), including data concerning race, ethnicity, disability status, sex, and family characteristics of persons and households who are applicants for, or program partic ipants in, any program or activity funded in whole or in part with ESG funds and the affirmative outreach requirements in § 576.407(b).  Records demonstrating compliance w ith the uniform administrative requirements in 24 CFR part 85(for governments) and 24 CFR part 84 (for nonprofit organizations).  Records demonstrating compliance with the environmental review requirements, including flood insurance requirements.
440

 Certifications and disclosure forms required under the lobbying and disclosure requirements in 24 CFR part 87.
 Relocation. Document compliance with the displacement, relocation, and acquisition requirements in § 576.408.
 Financial records.
 Supportive documentation for all costs charged to the ESG grant.  Documentation showing that ESG grant funds were spent on allowable costs in accordance with the requirements for eligible activities under § 576.101-§576.109 and the cost principles in OMB Circulars A-87 (2 CFR part 225) and A-122 (2 CFR part 230).  Records of the receipt and use of program income.
 Documentation of compliance with the expenditure limits in § 576.100 and the expenditure deadline in § 576.203.
 Subrecipients and contractors.
 The recipient must retain copies of all solicitations of and agreements with subrecip ients, records of all payment requests by and dates of payments made to subrecipients, and documentation of all monitoring and sanctions of subrecipients, as applicable. If the recipient is a State, the recipient must keep records of each recapture and dis tribution of recaptured funds under § 576.501.
 The recipient and its subrecipients must retain copies of all procurement contracts and documentation of compliance with the procurem ent requirements in 24 CFR 85.36 and 24 CFR 84.40-84.48.
 The recipient must ensure that its subrecipients comply with the recordkeeping requirements specified by the recipient and HUD notice or regulations.  Confidentiality.
 Written procedures to ensure:
□ All records containing personally identifying information of any individual or family who applies for and/or receives ESG assistance will be kept secure and confidential; □ The address or location of any domestic violence, dating violence, sexual assault, or stalking shelter project assisted under the ESG will not be made public, except with written authorization of the person responsible for the operation of the shelter; and □ The address o r location of any housing of a program participant will not be made public, except as provided under a preexisting privacy policy of the recipient or subrecipient and consistent with state and local laws regarding privacy and obligations of confidentiality.
□ Written confidentiality procedures.
 Period of record retention. All records pertaining to each fiscal year of ESG funds must be retained for the greater of 5 years or the period specified below. □ Documentation of each program participant's qualification as a family or individual at risk of homelessness or as a homeless family or individual and other program participant records must be retained for 5 years after the expenditure of all funds from the grant under which the program participant was served; 441

□ Where ESG funds are used for the renovation of an emergency shelter involves costs charged to the ESG grant that exceed 75 percent of the value of the building before renovation, records must be retained until 10 years after the date that ESG funds are first obligated for the renovation; and
□ Where ESG funds are used to convert a building into an emergency shelter and the costs charged to the ESG grant for the conversion exceed 75 percent of the value of the building after conversion, records must be retained u ntil 10 years after the date that ESG funds are first obligated for the conversion.
 Access to records.
 Federal government rights. Notwithstanding the confidentiality procedures established under paragraph (w) of this section, HUD, the HUD Office of the Ins pector General, and the Comptroller General of the United States, or any of their authorized representatives, must have the right of access to all books, documents, papers, or other records pertinent to the ESG grant, in order to make audits, examinations, excerpts, and transcripts. These rights of access are not limited to the required retention period but last as long as the records are retained.
 Public rights. Provide citizens, public agencies, and other interested parties with reasonable access (consis tent with state and local laws regarding privacy and obligations of confidentiality and the confidentiality requirements in this part) to records regarding any uses of ESG funds the recipient received during the preceding 5 years.  Reports. The recipient mu st collect and report data on its use of ESG funds in the Integrated Disbursement and Information System (IDIS) and other reporting systems, as specified by HUD. The recipient must also comply with the reporting requirements in 24 CFR parts 85 and 91 and the reporting requirements under the Federal Funding Accountability and Transparency Act of 2006, ( 31 U.S.C. 6101 note), which are set forth in appendix A to 2 CFR part 170.

THE MONITORING PROCESS
Monitoring of ESG-assisted activities takes place on a quarterly and annual basis.

Quarter Reports
Each quarter, subrecipients submit an ESG Subgrantee Report (Exhibit 2), which City staff use to monitor performance measured against the requirements initially outlined in the El igibility Evaluation (Exhibit 3) and Subrecipient Agreement (Exhibit 4).

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Desk Audit
Desk reviews are done at the City and entail a review of reports and other documentation that are submitted to the City that help the City understand how well a proj ect is managed, and whether it is achieving its goals and compliance obligations.

At the close of each program year, City staff issue a monitoring letter (Exhibit 5: Monitoring Notification Letter: On-Site Visit or Exhibit 6: Annual Monitoring Notification Letter: Desk Audit) will be sent to the subrecipient transmitting the following documents to be completed and returned to the City prior to the scheduled monitoring visit:

 Monitoring Notification Letter: Desk Audit
A Monitoring Notification Letter: De sk Audit will be sent to the owner/property manager detailing the salient terms of the Subrecipient Agreement that will be the source of monitoring.

 Monitoring Checklist
This report collects information as a basis for conclusions to be included in the Mo nitoring Summary letter and follow-up (Exhibit 7: Monitoring Checklist).

 Monitoring Summary
A Monitoring Summary Letter will be provided to the subrecipient that serves as the formal notification of the results of the monitoring. All negative conclusion s will be considered a finding or concern with a specific required corrective action. A copy is retained in the Project monitoring file.

 A “finding” is a deficiency in project performance evidencing an unmet statutory or regulatory requirement.

 A “conc ern” relates to project performance -requiring improvement before becoming a finding.

The subrecipient is to provide a written response within 30 days of the date of the Monitoring Summary letter. Upon completion of all corrective actions, a letter is sen t to the owner/property manager stating that the monitoring findings and concerns have been closed. A copy is retained in the Project monitoring file.

ON-SITE VISIT
On-site monitoring enables the City to conduct a more in -depth level of review than the desk review and entails a visit to the office of the owner or property manager to review documents and source information, as well as observe operations. On -site monitoring is necessary when the risk analysis or desk review suggests that there may be problems, or if a protracted period of time has elapsed since the last visit.

The following steps are to be taken when monitoring on-site:
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 Monitoring Notification Letter: On-Site Visit
A Monitoring Notification Letter: On-Site Visit will be sent to the owner/property manager at least two weeks in advance of the monitoring visit. The letter will detail the salient terms of the Subrecipient Agreement that will be the source of mo nitoring. The letter will also notify the owner/property manager of the date and t ime of an interview that will be conducted to make sure that the owner and/or manager thoroughly understands the purpose, scope, and schedule for the monitoring.

In addition to the aforementioned reports, these items also are to be reviewed:

 Monitoring Summary
After the monitoring visit, a Monitoring Summary letter is forwarded to the subrecipient that serves as the formal notification of the results of the monitoring. All negative conclusions are considered a finding or concern with a specific required corrective action. If relevant, the letter may stipulate steps initiated by the owner/property manager to correct areas of noncompliance or nonperformance. A copy is retained in the Project monitoring file.

 A “finding” is a deficiency in project perfor mance evidencing an unmet statutory or regulatory requirement.

 A “concern” relates to project performance requiring improvement before becoming a finding.

The owner/property manager is to provide a written response within 30 days of the date of the Monitoring Summary letter. Upon completion of all corrective actions, a letter is sent to the owner/property manager stating that the monitoring findings and concerns have been closed. A copy is retained in the Project monitoring file.

444

APPENDIX

Exhibit 1: Summary of Eligible Components, Activities and Expenses

Exhibit 2: ESG Subgrantee Report

Exhibit 3: Eligibility Evaluation

Exhibit 4: Subrecipient Agreement

Exhibit 5: Monitoring Notification Letter: On-Site Visit

Exhibit 6: Annual Monitoring Notification Letter: Desk Audit

Exhibit 7: Monitoring Checklist

445

Exhibit 1
Summary of Eligible Components, Activities and Expenses

Emergency Solutions Grants Program (ESG) funds may only reimburse cost directly related to the following ESG eligible expenditure program components:

▪ Street Outreach – Unsheltered individuals and families, meaning those who qualify under 24 CFR §

91.5 paragraph (1)(i) of the definition of “homelessness”. Essential Service s to eligible participants provided on the street or in parks, abandoned buildings, bus stations, campgrounds, and in other such settings where unsheltered persons are staying. Staff salaries related to carrying out street outreach activities are eligible.

✓ Essential Services – Services necessary to reach out to unsheltered homeless people; connect them with emergency shelters, housing, or critical services; and provide urgent, non -facility-based care to unsheltered homeless people who are unwilling or una ble to access emergency shelter, housing, or an appropriate health facility.

✓ Engagement – activities to locate, identify, and build relationships with unsheltered homeless people for providing immediate support, intervention, and connections with homeles s assistance programs and/or mainstream social services and housing programs.

□ Initial assessment of needs and eligibility
□ Providing crisis counseling
□ Addressing urgent physical needs
□ Actively connecting and providing information and referral □ Cell phone costs of outreach workers

✓ Case Management – assessing housing and service needs and arranging/coordinating/ monitoring the delivery of individualized services.

□ Using the centralized or coordinated assessment system □ Initial evaluation/verifying and document eligibility □ Counseling
□ Developing/Securing/Coordinating Services
□ Helping obtain Federal, state, and local benefits
□ Monitoring/evaluating participant progress
□ Providing information and referral to other providers 446

□ Developing an individualized housing/service plan

✓ Emergency Health Services – Outpatient treatment of urgent medical conditions by licensed medical professionals in community-based settings (e.g. streets, parks, and campgrounds) to those eligible participants unwilling or unable to acc ess emergency shelter or an appropriate healthcare facility.

□ Assessing participants’ health problems and developing treatment plans □ Assisting participants to understand their health needs □ Providing or helping participants obtain appropriate emergency medical treatment □ Providing medication and follow-up services

✓ Emergency Mental Health Services – Outpatient treatment of urgent mental health conditions by licensed professionals in community -based settings (e.g. streets, parks, and campgrounds) to those eligible participants unwilling or unable to access emergency shelter or an appropriate healthcare facility.

□ Crisis Intervention
□ Prescription of psychotropic medications
□ Explain the use and management of medications
□ Combinations of therapeutic approaches to address multiple problems

✓ Transportation – Travel by outreach workers, social workers, medical professionals or other service providers during the provision of eligible street outreach services.

□ Transporting unsheltered people to emergency shelters or other service facilities □ Cost of a participant’s travel on public transit
□ Mileage allowance for outreach workers to visit participants □ Purchasing or leasing a vehicle for use in conducting outreach activities, including the cost of gas, insurance, taxes, and maintenance for the vehicle
□ Costs of staff to accompany or assist participant to use public transportation

✓ Services to Special Populations – Otherwise eligible Essential Services that have been tailored to address the special needs of home less youth, victims of domestic violence, and related crimes/threats, and/or people living with HIV/AIDS who are literally homeless. For all eligible expenses, refer above under Street Outreach.

▪ Emergency Shelter ( Includes Emergency Shelters, Transitiona l Housing & Day Centers) –eligible participants are individuals and families who are homeless. Essential Services to persons in emergency shelters, renovating buildings to be used as emergency shelters, and operating emergency 447

shelters are eligible costs. Staff costs related to carrying out emergency shelter activities are also eligible.

✓ Essential Services – Services provided to individuals and families who are in an emergency shelter:

□ Case Management – Assessing, arranging, coordinating, and monitoring individualized services.

➢ Using the centralized or coordinated assessment system ➢ Initial evaluation including verifying and documenting eligibility ➢ Counseling
➢ Developing, securing and coordinating services including Federal, State, and local benefits ➢ Monitoring and evaluating program participant progress ➢ Providing information and referrals to other providers ➢ Providing ongoing risk assessment and safety planning with victims of domestic violence, dating violence, sexual assault and stalking
➢ Developing an Individualized Housing and Service Plan

□ Childcare – “Licensed” childcare for program participants with children under the age of 13 or disabled children under the age of 18.

➢ Child care costs
➢ Meals and snacks
➢ Comprehensive and coordinated sets of appropriate developmental activities

□ Education Services – Instruction or training to enhance participants’ ability to obtain and maintain housing: literacy, English literacy, GED, consumer education, health education, and substance abuse prevention.

➢ Educational services/skill-building
➢ Screening, assessment, and testing
➢ Individual or group instruction
➢ Tutoring
➢ Provision of books, supplies and instructional material ➢ Counseling
➢ Referral to community resources

□ Employment Assistance and Job Training – Services assisting participants secure employment and job training programs.

448

➢ Classroom, online, and/or computer instruction
➢ On the-job instruction
➢ Job finding, skill-building
➢ Reasonable stipends in employment assistance and job training programs ➢ Books and instructional material
➢ Employment screening, assessment, or testing
➢ Structured job-seeking support
➢ Special training and tutoring, including literacy training and pre-vocational training ➢ Counseling or job coaching
➢ Referral to community resources

□ Outpatient Health Services – Direct outpatient treatment of medical conditions provided by licensed medical professionals.

➢ Assessing health problems and developing a treatment plan Emergency Solutions Grants Eligible Expense Guide
➢ Assisting program participants to understand their health needs ➢ Providing or helping participants obtain appropriate medical treatment, preventive medical care, and health maintenance services, including emergency medical services ➢ Providing medication and follow-up services
➢ Providing preventive and non-cosmetic dental care

□ Legal Services – Necessary legal services regarding matters that interfere with the program participant’s ability to obtain and retain housing.

➢ Hourly fees for legal advice and representation by licens ed attorneys and certain other fees-for-service
➢ Client intake, preparation of cases for trial, provision of legal advice, representation at hearings, and counseling
➢ Filing fees and other necessary court costs

□ Legal Representation – Legal representation and advice to resolve legal problems that prevent participants from obtaining or retaining permanent housing.

➢ Child support
➢ Guardianship
➢ Paternity
➢ Emancipation
➢ Legal separation
➢ Resolution of outstanding criminal warrants
➢ Appeal of veterans and public benefit claim denials
449

➢ Orders of protection and other civil remedies for victims of domestic violence, dating violence, sexual assault, and stalking

□ Life Skills Training – Critical life management skills necessary to assist the program participant to function independently in the community.

➢ Budgeting resources
➢ Managing money
➢ Managing household
➢ Resolving conflict
➢ Shopping for food and needed items
➢ Improving nutrition
➢ Using public transportation
➢ Parenting

□ Mental Health Services – Direct outpatient tre atment of mental health conditions by licensed professionals.

➢ Crisis intervention
➢ Individual, family, or group therapy sessions
➢ Prescription of psychotropic medications or explanations about the use and management of medications
➢ Combinations of therapeutic approaches to address multiple problems

□ Substance Abuse Treatment Services – Substance abuse treatment provided by licensed or certified professionals, designed to prevent, reduce, eliminate or deter relapse of substance abuse or addictive behaviors.

➢ Client intake and assessment
➢ Outpatient treatment for up to thirty days
➢ Group and individual counseling
➢ Drug testing

□ Transportation – Costs of travel by program participants to and from medical care, employment, childcare, or other facilities tha t provide eligible essential services; and cost of staff travel to support provision of essential services.

➢ Cost of program participant’s travel on public transportation ➢ Mileage allowance for service workers to visit participants ➢ Purchasing or leasing a vehicle used for transport of participants and/or staff serving participants, including the cost of gas, insurance, taxes, and maintenance for the vehicle 450

➢ Travel costs of staff to accompany or assist program participants to use public transportation

□ Services for Special Populations – Otherwise eligible essential services tailored to address the special needs of homeless youth, victims of domestic violence, and related crimes/threats and people living with HIV/AIDS in emergency shelters.

➢ See all eligible expenses above under Essential Services

□ Rehabilitation and Renovation – Renovating buildings used as emergency shelter for homeless families and individuals.

➢ Labor
➢ Materials
➢ Tools
➢ Other costs for renovation, including soft costs
➢ Major rehabilitation of an emergency shelter
➢ Conversion of a building into an emergency shelter

□ Shelter Operations – Costs to operate and maintain emergency shelter activities and also provide other emergency lodging when appropriate.

➢ Maintenance (including minor or routine repairs)
➢ Rent
➢ Security
➢ Fuel
➢ Insurance
➢ Utilities
➢ Food
➢ Furnishings
➢ Equipment
➢ Supplies necessary for the operation of emergency shelter activities ➢ Hotel and motel voucher for family or individuals Note:* Hotel or motel vouchers are only eligible when no appropriate emergency shelter is available.

□ Assistance Required under URA – Assistance required under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) as described in subpart E of the interim regulations.

➢ Costs of providing URA assistance under 24 CFR § 576.408, including relocation payments and other assistance to persons displaced by a project assisted with ESG funds. 451

(Note: Persons that receive URA assistance are not considered “program participants” for the purposes of this part of ESG and relocation payments and other URA assistance are not considered “rental assistance” or “housing relocation and stabilization services” for the purposes of this part under ESG.

▪ Homelessness Prevention – individuals and families who are at imminent risk or at risk of homelessness, meaning those who qualify under 24 CFR 576.2 paragraph (1) of the homeless definition or those who qualify as at risk of homelessness. Individuals and families must have an income below 30% of AMI. Short and medium -term rental assistance and housing relocation and stabilization services are eligible activities. Staff salaries related to carrying out homelessness prevention activities are also eligible.

▪ Housing Relocation and Stabilization Services

□ Financial Assistance

➢ Moving Costs – moving costs, such as truck rental or hiring a moving company, including certain temporary storage fees.
➢ Rent Application Fees – application fee that is charged by the owner to all applicants. ➢ Security Deposit – equal to no more than 2 months’ rent. ➢ Last Month’s Rent – paid to the owner of housing at the time security deposit and first month’s rent are paid.
➢ Utility Deposit – standard utility deposit required by the utility company for all customers (i.e. gas, electric, water/sewage).
➢ Utility Payments – up to 24 months of utility payments per participant per service (i.e. gas, electric, water/sewage), including a 1 time payment up to 6 months of arrearages, per service.

□ Services

➢ Housing Search and Placement

o Assessment of housing barriers, needs and preferences o Development of an action plan for locating housing
o Housing search and outreach to and negotiation with owner o Assistance with submitting rental applications and understanding leases o Assessment of housing for compliance with ESG requirements for habitability, lead based paint and rent reasonableness
o Assistance with obtaining utilities and making moving arrangements o Tenant counseling

452

➢ Housing Stability Case Management – Assessing, arranging, coordinating, and monitoring the delivery of individualized services to facilitate housing stability

o Using the centralized or coordinated assessment system conduct the initial evaluation and reevaluation
o Counseling
o Developing, securing, and coordinating services including Federal, state, and local benefits
o Monitoring and evaluating program participant progress o Providing information and referrals to other providers o Developing an Individualized Housing and Service Plan

➢ Mediation – Mediation between the program participant and the owner or person(s) with whom the program participant is living, to prevent the program participant from losing permanent housing in which they currently reside.

o Time and/or services associated with mediation activities

➢ Legal Services – legal services that are necessary to resolve a legal problem that prohibits the program participant from obtaining or maintaining permanent housing.

o Hourly fees for legal advice and representation
o Fees based on the actual service performed ( i.e. fee for service), but only if the cost would be less than the cost of hourly fees
o Client intake, preparation of cases for trial, provision of legal advice, representation at hearings, and counseling
o Filing fees and other necessary court costs
o Subrecipient’s employees’ salaries and other costs necessary to perform the series, if the subrecipient is a legal services provider and performs the services itself

➢ Legal Representation may be provided for:
.
o Landlord/tenant matters
o Child support
o Guardianship
o Paternity
o Emancipation
o Legal Separation
o Resolution of outstanding criminal warrants
o Orders of protection and other civil remedies for victims of domestic violence, dating violence, sexual assault, and stalking
453

o Appeal of veterans and public benefit claim denials

➢ Credit Repair – services necessary to assist program participants with critical skills related to household budgeting, managing money, accessing a free personal credit report, and resolving personal credit problems (Note: Assistance ca nnot include the payment or modification of a debt).

o Credit counseling
o Other related Services

□ Short and Medium-Term Rental Assistance

➢ Short-Term Rental Assistance -up to 3 months
➢ Medium-Term Rental Assistance – 4 to 24 months
➢ Payment of Rental Ar rears – Onetime payment up to 6 months, including any late fees on those arrears
➢ Any Combination of the Three Types of Rental Assistance Above – Total not to exceed 24 months during any 3-year period, including any payment for last month’s rent.

▪ Rapid Re-Housing – individuals and families who are literally homeless, meaning those who qualify under 401(1) McKinney -Vento Act of the definition of homeless. Short and medium -term rental assistance and housing relocation and stabilization services are eligible activities. Staff salaries related to carrying out Rapid Re-Housing activities are also eligible.

✓ Relocation and Stabilization Services above.

✓ Short and Medium-Term Rental Assistance – See Short and Medium-Term Rental Assistance above.

▪ HMIS – the HEARTH Act makes HMIS participation a statutory requirement for ESG subrecipients.

Victim service providers cannot and Legal Services Organizations may choose not to, participate in HMIS. Providers that do not participate in HMIS must use a comparable datab ase that produces unduplicated, aggregate reports instead. Activities funded under this component must comply with HUD’s standards on participation, data collection and reporting under a local HMIS.

✓ Hardware, Equipment and Software Costs

□ Purchasing or leasing computer software
□ Purchasing software or software licenses
□ Purchasing or leasing equipment, including telephones, faxes, and furniture

454

✓ Staffing: Paying salaries for operating HMIS, including:

□ Data collection
□ Completing data entry
□ Monitoring and reviewing data quality
□ Completing data analysis
□ Reporting to the HMIS Lead
□ Training staff on using the HMIS or comparable database □ Implementing and complying with HIMIS requirements

✓ Training and Overhead

□ Obtaining technical support
□ Leasing office space
□ Paying charges for electricity, gas, water, phone service and high -speed data transmission necessary to operate or contribute data to HMIS
□ Paying costs of staff to travel to and attend HUD-sponsored and HUD-approved training on HMIS and program s authorized by Title IV of the McKinney -Vento Homeless Assistance Act
□ Paying staff travel costs to conduct intake
□ Paying participation fees charged by the HMIS Lead

▪ Administration

✓ General Management / Oversight / Coordination – Costs of overall prog ram management, coordination, monitoring, and evaluation

□ Administrative services performed under third party contracts or agreements, including general legal services, accounting services, and audit services

□ Other costs for goods and services required for administration of the program, including rental or purchase of equipment, insurance, utilities, office supplies, and rental and maintenance (but not purchase) of office space

□ Staff salaries, wages, and related costs of staff engaged in eligible progr am administration activities

✓ Training on ESG Requirements

□ Costs of providing training on ESG requirements and attending HUD -sponsored ESG trainings
455

✓ Consolidated Plan

□ Costs of preparing and amending the ESG and homelessness related sections of the consolidated plan in accordance with ESG requirements and 24 CFR part 91

✓ Environmental Review

□ Costs of carrying out the environmental review responsibilities under 24 CFR § 576.407 of the HUD regulations

▪ Ineligible Costs. .

✓ Emergency Shelter

□ Legal Services Ineligible Costs:
.
➢ Legal Services for immigration and citizenship matters ➢ Issues related to mortgages
➢ Retainer fee arrangements and contingency fee arrangements ➢ Substance abuse treatment services for inpatient detoxification and other inpa tient drug or alcohol treatment are ineligible costs

✓ Homelessness Prevention and Rapid Re-housing

□ Housing Relocation and Stabilization Services Ineligible Costs:
.
➢ Payment of temporary storage fees in arrears
➢ No financial assistance to a household f or a purpose and time period supported by another public source
➢ Credit Repair assistance does not include the payment or modification of a debt

□ Rental Assistance Ineligible Cost:
.
➢ Late payment penalties.

✓ Administration

□ General management / Oversight / Coordination Ineligible Cost:
.

Purchase of office space.
456

457
Exhibit 2
ESG Subgrantee Report

(See Attachment)

458

Exhibit 3
Eligibility Evaluation

PROJECT INFORMATION

APPLICANT CONTACT INFORMATION
Agency/Program:

Contact Person/Title:

Street Address:

City, State, Zip:

Telephone & Email:

PROJECT
DESCRIPTION This program funds ----

OUTCOME
STATEMENT During FY 2014-15, the subrecipient will implement the ---- Program to assist ---- persons.

OBJECTIVE

CATEGORY
Suitable Living Environment Decent Housing Economic Opportunity NA

OUTCOME

CATEGORY
Availability/Accessibility Affordability Sustainability NA

PERFORMANCE INDICATOR

New (continuing) Access NA

Improved Access

Receiving a service or benefit no longer substandard

PROJECT LOCATION (See Attached Map):
459

ACTIVITY ELIGIBILITY (check at least one
applicable category)
Allowable
Activity Allowable
Costs
Street Outreach
Essential Service s (24 CFR 576.101).

Includes the provision of Essential Services to
unsheltered homeless individuals (those who
qualify under 24 CFR 91.5 paragraph (1)(i) of
the definition of “homelessness”); connect the
homeless with emergency shelter, housing, or
critical services; and provide urgent non -facility-
based care to unsheltered homeless individuals
unwilling or unable to access emergency
shelter, housing or an appropriate health
facility.

Engagement. The cost of activities to
locate, iden tify, and build
relationships with unsheltered
homeless people for the purpose of
providing immediate support,
intervention, and connections with
homeless assistance programs
and/or mainstream social services
and housing programs.

Initial assessment of needs and
eligibility
Providing crisis counseling
Addressing urgent physical needs
Actively connecting and providing
information and referral
Cell phone costs of outreach
workers
Case Management. Assessing
housing and service needs and
arranging/coordinating/ monitoring
the delivery of individualized services.

Initial evaluation/verifying and
document eligibility
Counseling
Developing/Securing/Coordinating
Services
Helping obtain Federal, state, and
local benefits
Monitoring/evaluating participant
progress
Providing information and referral to
other providers
Developing an individualized
housing/service plan
Emergency Health Services .

Outpatient treatment of urgent
medical conditions by license d
medical professionals in community
based settings (e.g. streets, parks,
and campgrounds) to eligible
participants unwilling or unable to
access emergency shelter or an
appropriate healthcare facility.

Assessing participants’ health
problems and developing treatment
plans
Assisting participants to understand
their health needs
Providing or helping participants
obtain appropriate emergency
medical treatment
Providing medication and follow-up
services
Emergency Health Services and
Emergency Mental Health
Services. Outpatient treatment of
urgent mental health conditions by
licensed professionals in community -
based settings (e.g. streets, parks,
and campgrounds) to eligible
participants unwilling or unable to
access emergency shelter or an
appropriate healthcare facility
Crisis Intervention
Prescription of psychotropic
medications
Explain the use and management of
medications
Combinations of therapeutic
approaches to address multiple
problems
460

ACTIVITY ELIGIBILITY (check at least one
applicable category)
Allowable
Activity
Allowable
Costs
Street Outreach (continued)
\
Transportation. Travel by outreach
workers, social workers, medical
professionals or other service
providers while providing eligible
street outreach services

LMA Transporting unsheltere d
people to emergency shelters or
other service facilities
Cost of a participant’s travel on
public transit
Mileage allowance for outreach
workers to visit participants

Purchasing or leasing a vehicle for
use in conducting outreach
activities, including the cost of gas,
insurance, taxes, and maintenance
for the vehicle

Costs of staff to accompany or
assist participant to use public
transportation
Services to Special Populations.

Otherwise eligible Essential Services
that have been tailored to address
the special needs of homeless youth,
victims of domestic violence, and
related crimes/threats, and/or people
living with HIV/AIDS who are literally
homeless.

Identify specific costs; all eligible
expenses above under Street
Outreach
461

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Emergency Shelter (Includes Emergency Shelters, Transitional Housing & Day Centers) Essential Services. Provided to persons in
emergency shelters, renovating buildings to be
used as emergency shelters, and operating
emergency shelters

Case Management. Assessing,
arranging, coordinating, and
monitoring individualized services.

Using the centralized or coordinated
assessment system
Initial evaluation including verifying
and documenting eligibility
Counseling

Developing, securing and
coordinating services including
Federal, State, and local benefits
Monitoring and evaluating program
participant progress
Providing information and referrals to
other providers

Providing ongoing risk assessment
and safety planning with victims of
domestic violence, dating violence,
sexual assault and stalking
Developing an Individualized Housing
and Service Plan
Child Care. “Licensed” child care for
program participants with children
under the age of 13 or disabled
children under the age of 18.

Child care costs
Meals and Snacks
Comprehensive coordinated sets of
appropriate developmental activities

Education Services. Instruction or
training to enhance participants’
ability to obtain and maintain housing:
literacy, English literacy, GED,
consumer education, health
education and substance abuse
prevention.

Educational services/skill-building
Screening, assessment, and testing
Individual or group instruction
Tutoring
Provision of books, supplies and
instructional material
Counseling
Referral to community resources

Employment Assist ance and Job
Training. Services assisting
participants secure employment and
job training programs.

Classroom, online, and/or computer
instruction
On the-job instruction
Job finding, skill-building
Reasonable stipends in employment
assistance job training programs
Books and instructional material
Employment screening, assessment,
or testing
Structured job-seeking support
Special training , tutoring including
literacy training, re-vocational training
Counseling or job coaching
Referral to community resources
462

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Emergency Shelter (Includes Emergency Shelters, Transitional Housing & Day Centers) (continued)

.

Outpatient Health Services. Direct
outpatient treatment of medical
conditions provided by licensed
medical professionals.

Assessing health problems and
developing a treatment plan
Providing or helping participants
obtain appropriate med ical treatment,
preventive medical care, and health
maintenance services, including
emergency medical services
Providing medication and follow-up
services
Providing preventive and non-
cosmetic dental care
Legal Services. Necessary legal
services regarding matters that
interfere with the program
participant’s ability to obtain and
retain housing
Hourly fees for legal advice and
representation by licensed attorneys
and certain other fees-for-service
Client intake, preparation of cases for
trial, provision of legal advice,
representation at hearings, and
counseling
Filing fees and other necessary court
costs
Legal Representation. Legal
representation and advice to resolve
legal problems that prevent
participants from obtaining or
retaining permanent housing.

Child support
Guardianship
Paternity
Emancipation
Legal separation
Resolution of outstanding criminal
warrants
Appeal of veterans and public benefit
claim denials
Orders of protection and other civil
remedies for victims of domestic
violence, dating violence, sexual
assault, and stalking
Life Skills Training. Critical life
management skills necessary to
assist the program participant to
function independently in the
community.

Budgeting resources
Managing money
Managing household
Resolving conflict
Shopping for food and needed items
Improving nutrition
Using public transportation
Parenting
463

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Emergency Shelter (Includes Emergency Shelters, Transitional Housing & Day Centers) (continued)

..

.

.Mental Health Services. Direct
outpatient treatment of mental health
conditions by licensed professionals
Crisis intervention
Individual, family, or group therapy
sessions
Prescription of psychotropic medications
or explanations about the use and
management of medications
Combinations of therapeutic approaches
to address multiple problems
Substance Abuse Treatment
Services. Substance abuse
treatment provided by licensed or
certified professionals, designed to
prevent, reduce, eliminate or deter
relapse of substance abuse or
addictive behaviors
Client intake and assessment
Outpatient treatment for up to thirty days
Group and individual counseling
Drug testing
Transportation. Costs of travel by
program participants to and from
medical care, employment, child care,
or other facilities that provide eligible
essential ser ices; and cost of staff
travel to support provision of essential
services.

Cost of program par ticipant’s travel on
public transportation
Mileage allowance for service workers to
visit participants
Purchasing or leasing a vehicle used for
transport of participants and/or staff
serving participants, including the cost of
gas, insurance, taxes, and maintenance
for the vehicle
Travel costs of staff to accompany or
assist program participants to use public
transportation
Services for Special Populations.

Otherwise eligible essential services
tailored to address the special needs
of homeless youth, victims of
domestic violence, and related
crimes/threats and people living with
HIV/AIDS in emergency shelters.

See all eligible expenses above unde r
Essential Services

Rehabilitation and Renovation.

Renovating buildings to be used as
emergency shelter for homeless
families and individuals.

Labor
Materials
Tools
Other costs for renovation, including soft
costs
Major rehabilitation of an emergency
shelter
Conversion of a building into an
emergency shelter

464

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Emergency Shelter (Includes Emergency Shelters, Transitional Housing & Day Centers) (continued) Shelter Operations

.

Shelter Operations . Costs to
operate and maintain emergency
shelter activities and also provide
other emergency lodging when
appropriate. *

*Hotel or motel vouchers are only
eligible when no appropriate
emergency shelter is available
Maintenance (in cluding minor or routine
repairs)
Rent
Security
Fuel
Insurance
Utilities
Food
Furnishings
Equipment
Supplies necessary for the operation of
emergency shelter activities
Assistance Required under URA.

Assistance Required under URA.

Assistance required und er the
Uniform Relocation Assistance and
Real Property Acquisition Policies Act
of 1970 (URA) as described in
subpart E of the interim regulations

Costs of providing URA assistance
under 24 CFR § 576.408, including
relocation payments a nd other
assistance to persons displaced by a
project assisted with ESG funds. *
*Persons that receive URA assistance
are not considered “program
participants” for the purposes of this part
of ESG and relocation payments and
other URA assistance are not
considered “rental assistance” or
“housing relocation and stabilization
services” for the purposes of this part
under ESG.

ACTIVITY ELIGIBILITY (check at least one Allowable Allowable 465

applicable category) Activity Costs
Homelessness Prevention (24 CFR 576.103) and Rapid Re-Housing (24 CFR 576.104)

Housing Relocation and
Stabilization Services
Financial Assistance Moving Costs. M oving costs, such as truck rental or hiring a moving company,
including certain temporary storage
fees.

Rent Application Fees. A pplication fee
that is charged by the owner to all
applicants.

Security Deposit. Equal to no more than
2 months’ rent.

Last Month’s Rent. P aid to the owner of
housing at the time security deposit and
first month’s rent are paid.

Utility Deposit. Standard utility deposit
required by the utility company for all
customers (i.e. gas, electric,
water/sewage).

Utility Payments. Up to 24 months of
utility payments per participant per
service (i.e. gas, electric,
water/sewage), including a 1 time
payment up to 6 months of arrearages,
per service.

Services: Housing Search and
Placement:

Assessment of housing barriers, needs
and preferences
Development of an action plan for
locating housing
Housing search and outreach to and
negotiation with owner
Assistance with submitting rental
applications and understanding leases
Assessment of housing for compliance
with ESG requirements for habitability,
lead based paint, a nd rent
reasonableness
Assistance with obtaining utilities and
making moving arrangements
Tenant counseling
Assessment of housing barriers, needs
and preferences
Housing Stability Case
Management. Assessing, arranging,
coordinating, and monitoring the
delivery of individualized services to
facilitate housing stability
Using the centralized or coordinated
assessment system conduct the initial
evaluation and reevaluation

466

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Homelessness Prevention (24 CFR 576.103) and Rapid Re-Housing (24 CFR 576.104) (continued)

.

Counseling
Developing, securing, and coordinating
services including Federal, state, and
local benefits
Monitoring and evaluating program
participant progress
Providing infor mation and referrals to
other providers

Developing an Individualized Housing
and Service Plan
Services: Mediation. Time and/or services associated with mediation activities between the
program participant a nd the owner or
person(s) with whom the program
participant is living, to prevent the
program participant from losing
permanent housing in which they
currently reside.

Legal Services. Legal services that
are necessary to resolve a le gal
problem that prohibits the program
participant from obtaining or
maintaining permanent housing
Hourly fees for legal advice and
representation
Fees based on the actual service
performed (i.e. fee for service) , but only
if the cost would be less than the cost of
hourly fees
Client intake, preparation of cases for
trial, provision of legal advice,
representation at hearings and
counseling
Services: Legal Representation Landlord/tenant matters Child support
Guardianship
Paternity
Emancipation
Legal Separation
Resolution of outstanding criminal
warrants
Orders of protection and other civil
remedies for victims of domestic
violence, dating violence, sexual assault
and stalking

467

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
Homelessness Prevention (24 CFR 576.103) and Rapid Re-Housing (24 CFR 576.104) (continued)

.

Services: Credit Repair . Services
necessary to assist program
participants with critica l skills related
to household budgeting, managing
money, accessing a free personal
credit report, and resolving personal
credit problems*

* Assistance cannot include the
payment or modification of a debt.

Credit counseling
Other related Services
Short and Medium-Term Rental Assistance Short-Term Rental Assistance.

Extended up to 3 months
Rental Assistance: rental assistance and
rental arrears
Medium-Term Rental Assistance .

Extended 4 to 24 months
rental application fees, security and
utility deposits, utility payments, last
month's rent, moving costs

Payment of Rental Arrears. Onetime
payment up to 6 months, including
any late fees on those arrears

Any Combination of the Three
Types of Rental Assistance Above.

Total not to exceed 24 months during
any 3 year period, including any
payment for last month’s rent.

HMIS (24 CFR 576.107)
HMIS. The HEARTH Act makes HMIS
participation a statutory requirement for ESG
subrecipients. Activities funded under this
component must comply with HUD’s standards
on participation, data collection and reporting
under a local HMIS.

Hardware, Equipment and Software
Costs

Purchasing or leasing computer
software
Purchasing software or software
licenses
Purchasing or leasing equipme nt,
including telephones, faxes, and
furniture
Staffing: Paying salaries for
operating HMIS
Data collection
Completing data entry
Monitoring and reviewing data quality
Completing data analysis
Reporting to the HMIS
Training staff on using the HMIS or
comparable database
Implementing and complying with HIMIS
requirements
468

ACTIVITY ELIGIBILITY (check at least one
applicable category) Allowable
Activity Allowable
Costs
HMIS (24 CFR 576.107) (continued)
Training and Overhead

Obtaining technical support
Leasing office space
Paying charges for electricity, gas,
water, phone service and high speed
data transmission necessary to operate
or contribute data to HMIS
Paying costs of staff to travel to and
attend HUD -sponsored and HUD
approved training on HMIS and
programs authorized by Title IV of the
McKinney-Vento Homeless Assistance
Act
Paying staff travel costs to conduct
intake
Paying participation fees charged by th e
HMIS

Is the project an ineligible activity? (Double-check that it is none of the following.) (570.207) Emergency Shelter Legal Services:

Legal Services for immigration and citizenship matters
Issues related to mortgages
Retainer fee arrangements and contingency fee arrangements Substance abuse treatment services for inpatient detoxification and other inpatient drug or alcohol treatment are ineligible costs Homelessness Prevention and Rapid Re-housing/
Housing Relocation and Stabilization Services:

Payment of temporary storage fees in arrears
No financial assistance to a household for a purpose and time period supported by another public source Credit Repair assistance does not include the payment or modification of a debt Rental Assistance
Late payment penalties.

Administration
General management / Oversight / Coordination
Purchase of office space.

Bad debts (e.g., late fees shown on invoices), , grant writing, public relations events, staff training, attending conferences, advertising, and entertainment
PROJECT FUNDING/ MATCHING REQUIREMENT (24 CFR 576.201)
Subrecipient’s estimated cost:

Recommended ESG funding:

Match sources (amount & source):*
*Matching contributions in an amount
that equals the amount of ESG funds
applied for, and awarded . Matching

469

contributions may be obtained from any
source, including any federal source
other than the ESG Program, as well as
State, local, and private sources.

ESG share of City’s estimated total cost

CONSOLIDATED OR ACTION PLAN
Yes Is the project consistent with a priority need or objective identified in the Consolidated Plan? If not, a Plan amendment wil l be needed, following the Citizen Participation Plan. Identify the priority:

No
Yes Is the project identified in the current Action Plan or as a previous Action Plan activity for which there are still sufficie nt funds? If not, if this is a “substantial amendment” per the Citizen Participation Plan, a Plan a mendment will be needed to implement the project.

No
CONTINUUM OF CARE CONSULTATION (24 CFR 576.400(a))
Yes Project is consistent with local CoC: (1) determine how ESG funds will be allocated in that region; (2) i dentify the performance standards for evaluating the outcomes of projects and activities; and (3) identify the funding, policies and procedures for the administration and operation of the HMIS, if appropriate (24 CFR 576.400(a)).

No
Yes Subrecipient has coordinated and integrated, to the maximum extent practicable, ESG -funded activities with other programs targeted to homeless people in the area covered by the CoC to provide a strategic, community -wide system to prevent and end homelessness for the area (24 CFR 576.400(c)). No Yes Subrecipient has coordinated and integrated, to the maximum extent practicable, ESG -funded activities with mainstream housing, health, social servic es, employment, education, and youth programs for which families and individuals at risk of homelessness and homeless individuals and families may be eligible (24 CFR 576.400(d)). No Yes If the CoC has developed Wr itten Standards in accordance with the requirements outlined in 24 CFR 576.400(e)(2)(3), is the subrecipient using those written standards. No
NA
Yes If the CoC has not yet established its Written Standards, has subrecipient established and applied written standards for providing ESG Assistance per 24 CFR 576.400 (e)(2)(3). No NA
Participation in HMIS
Yes The subrecipient has ensured that data on all persons served and all activities assisted under ESG are entered into the HMIS. If subrecipient is a Victim Service Provider or a Legal Services Provider, it may use a comparable database that collects client level data over time (i.e ., longitudinal data) and generates unduplicated aggregate reports based on the data.

Information entered into a comparable database must not be entered directly into or provided to an HMIS (24 CFR 576.400(f)). No
470

RECOMMENDATION AND COMMENTS
Comments:

PREPARER’S SIGNATURE
Signature: Date:

Name: Title:

CITY REVIEWER SIGNATURE
Signature: Date:

Name: Title:

CITY REVIEWER SIGNATURE
Signature: Date:

Name: Title:

ATTACHMENTS
.
471

Exhibit 4
Subrecipient Agreement

472

EMERGENCY SOLUTIONS GRANT PROGRAM

SUBRECIPIENT AGREEMENT

BETWEEN THE CITY OF GARDEN GROVE
AND (Insert Organization)
FOR (Insert activities that are being funded)
This agreement is made and entered into this (Insert date), by and between the CITY OF GARDEN GROVE, a municipal corporation of the State of California, hereinafter referred to as "CITY," and (Insert name of Subrecipient), a nonprofit corporation under the laws of the State of California, hereinafter referred to as "SUBRECIPIENT."

RECITALS
The following recitals are a substantive part of this agreement:

1. The CITY has applied for and received funds, Community Development Block Grant (CDBG), CFDA No. 14.218, and Emergency Solution Grant (ESG), CFDA No. 14.231, from the U.S. Depart ment of Housing and Urban Development (HUD) under subtitle B of Title IV of the McKinney -Vento Homeless Assistance Act of 1974, (42 U.S.C. 11371-11378); and

2. The CITY’s Annual Action Plan submitted to HUD includes the PROJECT described herein and indicates that a portion of the funds, received from HUD shall be allocated to SUBRECIPIENT; and

3. HUD has accepted and certified the aforementioned Annual Action Plan; and

4. The CITY wishes to engage the SUBRECIPIENT to provide (Insert activities that are being funded) , as set forth in CITY’s Annual Action Plan, in accordance with the Scope of Services (Attachment A) of this agreement (the “PROJECT”); and

5. The provision of this service is an eligible expenditure of available Emergency Solutions Grant (ESG) Program funds , Catalogue of Federal Domestic Assistance (CFDA) 14.231, of the CITY, required to carry out the purpose of the ESG Program under 24 CFR 576.1.

AGREEMENT
The parties mutually agree as follows:

1. Term of Agreement . This agreement shall cover services rendered from (Insert start date of agreement) until (Insert date that the contract will expire) . The term of this agreement and the provisions herein shall be extended to cover any additional time period during which the SUBRECIPIENT remains in control of ESG funds or other assets, including program income. Subrecipient shall remain obligated to perform such duties as would normally extend beyond the end date of reimbursable activities, including, but not limited to, indemnification, audits, reporting, and accounting.

2. Services to be Provided . As a condition of receiving ESG funding pursuant to this agreement, the SUBRECIPIENT shall perform all the services necessary to administer the PROJECT as described in the CITY’s Annual Action Plan and as set for th in the Scope of Services described in Attachment A to this agreement, a copy of which is attached hereto 473

and incorporated herein by this reference. The Scope of Services includes the following components:

2.1 Activities. The SUBRECIPIENT will be responsib le for administering the services with Fiscal (Insert year) ESG Program funds to qualified Garden Grove residents in a manner satisfactory to the CITY and consistent with any and all standards required as a condition of providing these funds, the terms of this agreement, and all applicable Federal, State and local laws, guidelines, policies and regulations.

a. Program Delivery. The Scope of Services includes a description of each activity eligible under the ESG Program, the products or services to be perfor med, where they are to be provided, for whom they are to be provided, and how many they are to be provided.

b. General Administration . A description of the SUBRECIPIENT’s general administrative services to be performed in support of the activities is noted i n the Scope of Services. A schedule for the completion of these services and goals is included in the Scope of Services. The services will include activities eligible under the ESG Program.

2.2 The Eligible Expense Guide The Eligible Expense Guide, attached hereto as Attachment B and incorporated herein by reference, details what activities are eligible for reimbursement with ESG funds, and includes the following components:

a. Eligible Activities. A complete description of each activity eligible under the ESG Program, the products or services to be performed, where the services are to be provided and for how long services are to be provided.

b. Participant Qualifications. A description of client qualification to receive ESG services, including the definitions of “at risk” and “homeless”, and maximum gross household income.

2.3 Emergency Solutions Program Objectives . All activities funded with ESG funds are limited to ones that increase the number and quality of emergency shelters and transitional housing facilities f or homeless individuals and families and to operate these facilities, and provide essential social services, homelessness prevention and rapid rehousing services.

2.4 Level of Accomplishment -Goals and Performance Measures . The Scope of Services includes measurements for each activity per quarter and year-to-date.

2.5 Performance Monitoring . The CITY will monitor the performance of the SUBRECIPIENT against goals and performance standards required herein.

Substandard performance as determined by the CITY will cons titute non - compliance with this agreement. If action to correct such substandard performance is not taken by the SUBRECIPIENT within a reasonable period of time after being notified by the CITY, Agreement suspension or termination procedures will be initiated.

3. Disbursement of Funds. SUBRECIPIENT shall receive ESG Funds as follows:

3.1 Amount. It is expressly agreed and understood that the total amount to be paid by the CITY under this agreement shall not exceed (Insert amount funded to 474

Subrecipient). Payment may be contingent upon certification of the SUBRECIPIENT’s financial management system in accordance with the standard specified in 2 CFR Part 200.

3.2 Not to Exceed . ESG Funds under this agreement shall not exceed (Insert amount funded). If the costs of services provided exceed (Insert amount funded) , the SUBRECIPIENT shall pay all additional costs. If the cost of services provided is less than (Insert amount funded), the CITY shall retain all unused funds.

3.3 Budget. Drawdowns for the payment of eligible expenses shall be made in accordance with the line item budgets specified in the Project Budget set forth in Attachment A hereto, and in accordance with the payment procedures set forth in Section 5.10 of this agreement.

3.4 Prohibition of Subrecipient Income from ESG Funds. Subrecipient agrees that it shall not use ESG Funds in any manner which shall provide income to Subrecipient, other than Program Income. Any earned interest income on funds generated through the use of investment of funds received from ESG shall be cause, at the discretion of the City, for recapture of such income and/or the full amount of funds originally granted to Subrecipient.

4. General Conditions . During the performance of this agreement, the SUBRECIPIENT agrees as follows:

4.1 General Compliance . The SUBRECIPIENT agrees to comply with applicable Uniform Administrative Requirements of Title 2 of the Code of Federal Regulations as well as the requirements of Title 24 of the Code of Federal Regulations, Part 576 (the U.S.

Housing and Urban Development regulations concerning the Emergency Solutions Grant Program (ESG) including 24 CFR 576.407 of these regulations, except that (1) the SUBRECIPIENT does not assume the recipient’s environmental responsibilities described in 24 CFR 576.407 (d) and (2) the SUBRECIPIENT does not assume the recipient’s responsibility for initiating the environmental review process under the provisions of 24 CFR Part 52. The SUBRECIPIENT also agrees to comply with all other applicable federal, state and local l aws, regulations, and policies governing the funds provided under this agreement. The SUBRECIPIENT further agrees to utilize funds available under this agreement to supplement rather than supplant funds otherwise available.

Subrecipient shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules, and regulations in any manner affecting the performance of the Agreement or the ESG Program, including all Cal/OSHA requirements, and shall give all notices required by la w. Subrecipient shall be liable for all violations of such laws and regulations in connection with performing work related to the Agreement or ESG Program. If Subrecipient performs any work or services in violation of such laws, rules, and regulations, Sub recipient shall be solely responsible for all penalties and costs arising therefrom. Subrecipient shall defend, indemnify, and hold City, its officials, officers, employees, agents and volunteers, free and harmless from any claim or liability arising out o f any failure or alleged failure to comply with such laws, rules, or regulations.

4.2. Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered or mailed to the below listed addresses, 475

or to such other addresses as may be designated by written notice. These addresses shall be used for delivery of service of process.

Address of CITY is as follows: With One (1) Copy to:

City of Garden Grove City of Garden Grove
Attn: Neighborhood Improvement
Division, 3rd Floor
Attn: City Attorney
City Attorney’s Office
Community and Economic
Development Department
11222 Acacia Parkway
Garden Grove, CA 92840-5208
11222 Acacia Parkway
Garden Grove, CA 92840-5208

Address of SUBRECIPIENT:
(Name of Subrecipient)
Attn: (Contact name)
(Contact title)

(Address)

4.3. Independent Contractor. Nothing contained in this agreement is intended to, or shall be construed in any manner, as creating or establishing the relationship of employer/employee between the parties. The SUBRECIPIENT shall at all times remain an independent contractor with respect to the services to be performed under this agreement. All persons employed for the performance of services and functions hereunder shal l be officers, agents, or employees (including volunteers) of SUBRECIPIENT and shall not be deemed to be those of CITY; no CITY officer, agent, or employee shall be under control or supervision of SUBRECIPIENT, and no SUBRECIPIENT officers, agents or employees (including volunteers), shall have any entitlement to wages, pension, civil service, or any status or rights with CITY. The CITY shall be exempt from payment of all Unemployment Compensation, FICA, retirement, life and/or medical insurance and Workers' Compensation Insurance, as the SUBRECIPIENT is an independent contractor.

4.4 Licensing. Prior to performing any services or work hereunder Subrecipient shall obtain all licenses, permits, qualifications, and approvals of whatever nature that are legally required to perform the work and services required b y this Agreement and ESG Funds. Subrecipient represents and warrants to City that Subrecipient shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement and any extension, any license, permit, qualification, or approval that is legally required for Subrecipient to perform the work and services required or authorized by this Agreement or ESG Funds. Subrecipient shall have the sole obligation to pay for any fees, as sessments, and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Subrecipient's performance of the work and services required or authorized by this Agreement or ESG Funds, and shall defend, i ndemnify, and hold the City, its officials, officers, employees, agents and volunteers, free and harmless from and against any claim or liability arising out of any failure or alleged failure to obtain such license, permits, and approvals of whatever natur e that are legally required to perform the work or services set forth in the ESG Program.

4.5 Ineligibility of Subrecipient or Contractors . Subrecipient shall not use ESG Funds directly or indirectly in its operations or to employ, award contracts to, or 476

otherwise engage the services of, or fund any contractor during any period of debarment, suspension, or placement in ineligibility status of the Subrecipient or such contractor under the provisions of the applicable federal regulations governing ESG funds, projects, or programs.

4.6 Prohibition of Expending ESG Funds to Obtain Other Funding . Subrecipient shall in no event expend ESG Funds granted hereunder to fund another service provider, to pay a contractor for services outside the scope of this Agreeme nt, to apply for other public agencies' program funds, or to supplant another funding source, unless expressly approved by the City.

4.7 Unauthorized Aliens. Subrecipient represents and warrants that it will comply with all of the provisions of the Feder al Immigration and Nationality Act, 8 U.S.C.A. §§1101, et seq., as amended, and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Subrecipient so employ such unauthorized aliens for the performance of any work and/or services under this Agreement, and should any liability or sanctions be imposed against City for such use of unauthorized aliens, Subrecipient hereby agrees to reimburse City for any and all liabilities, actions, suits, claims, demands, losses, costs, judg ments, arbitration awards, settlements, damages, demands, orders, or penalties which arise out of or are related to such employment, together with any and all costs, including attorneys' fees, incurred by City.

4.8 Hold Harmless. SUBRECIPIENT agrees to pr otect, defend, and hold harmless CITY and its elective or appointive boards, officers, agents, and employees from any and all claims, liabilities, expenses, or damages of any nature, including attorneys' fees, for injury or death of any person, or damage t o property, or interference with use of property, arising out of, or in any way connected with performance of the Agreement by SUBRECIPIENT, SUBRECIPIENT's agents, officers, employees, subcontractors, or independent contractors hired by SUBRECIPIENT. The only exception to SUBRECIPIENT's responsibility to protect, defend, and hold harmless CITY, is due to the sole negligence of CITY, or any of its elective or appointive boards, officers, agents, or employees. This hold harmless agreement shall apply to all liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by SUBRECIPIENT.

4.9 Commencement of Work: SUBRECIPIENT shall not commence work under th is Agreement until all certificates and endorsements have been received and approved by the CITY. All insurance required by this Agreement shall contain a Statement of Obligation on the part of the carrier to notify the CITY of any material change, cancellation, or termination at least thirty (30) days in advance. All subcontractors, consultants, and agents shall be required to provide the same insurance as that required of the SUBRECIPIENT. SUBRECIPIENT shall be responsible to collect and maintain all insurance required of all subcontractors, consultants, and agents.

4.10 Insurance: For the Theduration of this agreement SUBRECIPIENT shall maintain the following insurance.

a. Workers Compensation Insurance. SUBRECIPIENT shall maintain workers compensation insurance in the amount and type required by California law, if 477

applicable.

b. Commercial General Liability in an amount not less than $1,000,000 per occurrence; (claims made and modified occurrence policies are not acceptable); Insurance companies m ust be acceptable to CITY and have an A.M. Best’s Guide Rating of A-, Class VII or better, as approved by CITY.

c. Automobile Liability in an amount not less than $1,000,000 combined single limit; (claims made and modified occurrence policies are not acceptable); Insurance companies must be acceptable to CITY and have an A.M. Best’s Guide Rating of A-, Class VII or better, as approved by CITY.

d. Sexual Misconduct in an amount not less than $1,000,000 per occurrence; (claims made and modified occurrence policie s are not acceptable); Insurance companies must be acceptable to CITY and have a Best’s Guide Rating of A-, Class VII or better, as approved by CITY (claims made and modified occurrence policies are not acceptable); Insurance companies must be acceptable to CITY and have an A.M. Best’s Guide Rating of A -, Class VII or better, as approved by CITY. (IF APPLICABLE)

e. Professional Liability in an amount not less than $1,000,000 per occurrence/per claim; Insurance companies must be acceptable to CITY and have a Best’s Guide Rating of A-, Class VII or better, as approved by the CITY.

f. Directors & Officers Liability in an amount not less than $1,000,000 per occurrence/per claim; Insurance companies must be acceptable to CITY and have an A.M. Best’s Guide Rating o f A-, Class VII or better, as approved by the CITY.

Additional Insured Endorsements and Loss Payee Endorsement:

An additional insured Endorsement for on -going and products -completed operations under the commercial general liability policy (Subsection “b” above) shall designate the City of Garden Grove and its officers, officials, employees, agents, and volunteers as additional insureds for liability arising out of work or operations performed by or on behalf of SUBRECIPIENT. SUBRECIPIENT shall provide to CITY proof of insurance and endorsement forms that conform to CITY’s requirements, as approved by the CITY.

An Additional Insured Endorsement for automobile liability policies (Subsection “c” above) shall designate the City of Garden Grove and its off icers, officials, employees, agents, and volunteers as additional insureds for automobiles owned, leased, hired, or borrowed by SUBRECIPIENT. SUBRECIPIENT shall provide to CITY proof of insurance and endorsement forms that conform to City’s requirements, as approved by CITY.

SUBRECIPIENT shall provide to CITY endorsements from each insurance carrier wherein the insurance carrier shall give CITY thirty (30) days advanced written notice of any material change, cancellation, or termination of coverage.

For any claims related to this Agreement, SUBRECIPIENT’s insurance coverage shall be primary insurance as respects the City of Garden Grove, and its 478

officers, officials, employees, agents, and volunteers. Any insurance or self - insurance maintained by the CI TY, its officers, officials, employees, agents, or volunteers shall be excess of the SUBRECIPIENT’S insurance and shall not contribute with it. Claims made and modified occurrence policies are not acceptable.

IF SUBRECIPIENT maintains higher insurance lim its than the minimums shown above, SUBRECIPIENT shall provide coverage for the higher insurance limits otherwise maintained by the SUBRECIPIENT.

4.11 City Recognition. The SUBRECIPIENT shall insure recognition of the role of the CITY in providing services thro ugh this agreement. All activities, facilities and items utilized pursuant to this agreement shall be prominently labeled as to funding source. In addition, the SUBRECIPIENT will include a reference to the support provided herein in all publications made p ossible with funds made available under this agreement.

4.12 Amendments. The CITY or SUBRECIPIENT may amend this agreement at any time provided that such amendments make specific reference to this agreement, and are executed in writing, signed by a duly author ized representative of each organization, and approved by the CITY’s governing body. Such amendments shall not invalidate this agreement, nor relieve or release the CITY or SUBRECIPIENT from its obligations under this agreement.

The CITY may, in its disc retion, amend this agreement to conform with federal, state or local governmental guidelines, policies and available funding amounts, or for other reasons. If such amendments result in a change in the funding, the scope of services, or schedule of the acti vities to be undertaken as part of this agreement, such modifications will be incorporated only by written amendment signed by both CITY and SUBRECIPIENT.

4.13 Suspension or Termination . In accordance with 2 CFR 200.338, the CITY may suspend or terminate this agreement if the SUBRECIPIENT materially fails to comply with any terms of this agreement, which include (but are not limited to) the following:

a. Failure to comply with any of the rules, regulations or provisions referred to herein, or such statutes, regu lations, executive orders, and HUD guidelines, policies or directives as may become applicable at any time;

b. Failure, for any reason, of the SUBRECIPIENT to fulfill in a timely and proper manner its obligations under this agreement;

c. Ineffective or improper use of funds provided under this agreement; or

d. Submission by the SUBRECIPIENT to the CITY reports that are incorrect or incomplete in any material respect.

In accordance with 2 CFR 200.339, this agreement may also be terminated for convenience by e ither the CITY or the SUBRECIPIENT, in whole or in part, by setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated. However, if in the case of a partial termination, the CIT Y determines that the remaining portion of 479

the award will not accomplish the purpose for which the award was made, the CITY may terminate the award in its entirety.

5. Administrative Requirements

Financial Management

5.1. Accounting Standards. The SUBRECIP IENT agrees to comply with 2 CFR 200.302 and all other applicable provisions of 2 CFR Part 200 and agrees to adhere to the accounting principles and procedures required therein, utilize adequate internal controls, and maintain necessary source documentation for all costs incurred.

5.2. Cost Principles. The SUBRECIPIENT shall administer its program in conformance with 2 CFR Part 200 as it pertains to all costs incurred whether charged on a direct or indirect basis.

Documentation and Record Keeping

5.3. Records to be Maintained. The SUBRECIPIENT shall maintain all records required by the federal regulations specified in 24 CFR 576.500 that are pertinent to the activities to be funded under this agreement. Such records shall include but not be limited to:

a. Records providing a full description of each activity undertaken;

b. Records demonstrating that each activity undertaken meets the Purpose of the ESG Program;

c. Records required to determine the eligibility of activities;

d. Records required to document the acquisiti on, improvement, use or disposition of real property acquired or improved with ESG assistance;

e. For homeless prevention activities, records documenting evidence of an eviction, foreclosure, or utility termination notice(s) and evidence that the inability t o pay was sudden, necessary to prevent homelessness, and resumption of payment is reasonably expected within the near future;

f. Financial records as required by and 2 CFR Part 200;

g. Records to document homelessness status to determine the eligibility of persons served by the ESG Program; and

h. Other records necessary to document compliance with 24 CFR Part 576.57.

5.4. Retention. The SUBRECIPIENT shall retain all financial records, supporting documents, statistical records, and all other records pertinent to th e agreement for a period of four (4) years. The retention period begins on the date of the submission of the CITY’s annual performance and evaluation report to HUD in which the activities assisted under the agreement are reported on for the final time. Notwithstanding the above, if there is litigation, claims, audits, negotiations or other actions that involve any of the records cited and that have started before the expiration of the four -year period, then such records must be retained until 480

completion of the actions and resolution of all issues, or the expiration of the four - year period, whichever occurs later.

5.5. Client Data . The SUBRECIPIENT shall maintain client data demonstrating client eligibility for services provided. Such data shall be input ted into the Homeless Management Information System (HMIS) within 48 hours of service by SUBRECIPIENT and include, but not be limited to, client name, address, income level or other basis for determining eligibility, and description of service provided.

Such information shall be made available to CITY monitors or their designees for review upon request. (If applicable)

5.6. Disclosure. The SUBRECIPIENT understands that client information collected under this agreement is private and the use or disclosure of such infor mation, when not directly connected with the administration of the CITY’s or SUBRECIPIENT’s responsibilities with respect to services provided under this agreement, is prohibited by the all applicable state and federal law unless written consent is obtained from such person receiving service and, in the case of a minor, that of a responsible parent/guardian.

5.7. Closeouts. The SUBRECIPIENT’s obligation to the CITY shall not end until all closeout requirements are completed. Activities during this close out period shall include, but are not limited to: Making final payments, disposing of program assets (including the return of all unused materials, equipment, unspent cash advances, program income balances, and accounts receivable to the CITY), and determi ning the custodianship of records. Notwithstanding the foregoing, the terms of this agreement shall remain in effect during any period that the SUBRECIPIENT has control over ESG funds.

5.8. Audits and Inspections . All SUBRECIPIENT records with respect to any matters covered by this agreement shall be made available to the CITY, grantor agency, and the Comptroller General of the United States or any of their authorized representatives, at any time during normal business hours, as often as deemed necessary, to audit, examine, and make excerpts or transcripts of all relevant data.

Any deficiencies noted in audit reports must be fully cleared by the SUBRECIPIENT within 30 days after receipt by the SUBRECIPIENT. Failure of the SUBRECIPIENT to comply with the above a udit requirements will constitute a violation of this agreement and may result in the withholding of future payments. The SUBRECIPIENT hereby agrees to have an annual agency audit conducted in accordance with current CITY policy concerning SUBRECIPIENT aud its and 2 CFR Part 200 subparts A-F.

Reporting and Payment Procedures

5.9 Quarterly Reports . The Subrecipient shall submit "Quarterly Reports" during the program year beginning (Insert date), and ending (Insert date), within fifteen (15) calendar days of the end of each quarter. The final quarterly report is due no later than July 15, (Insert year). The report must include sufficient information to assist the City in monitoring the Subrecipient's performance. The Subrecipient must demonstrate satisfactory performance prior to reimbursement for expenditures.

The Quarterly Reports shall indicate the number of persons assisted, income and ethnicity of persons assisted, how/what assistance was provided, and a description of how and when determination of eligibility status was made for persons assisted.

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5.10 Reimbursement Schedule . Subrecipient may request to draw down on these ESG Funds in the manner delineated in Scope of Services, unless receipts and appropriate documentation can be provided to, and approved by, the City indicating the need to draw down on funds earlier. The City shall not provide any payments/reimbursements in advance of actual expenditures by the Subrecipient.

5.11 Reimbursement Requests . Concurrently with the submittal of each Quarterly Report, as described in subsection 5.9, Subrecipient shall submit a "Reimbursement Request" to the City to request payment for eligible ESG Program costs. Each Reimbursement Request shall include documentation to verify that the expenditure of funds is consistent with the ESG Program description/definition as approved by the City Council. Documentation shall include, but not be limited to, both (i) an original invoice and (ii) true copies of other receipts, agreements, payroll records or other documentation suppo rting and evidencing how the ESG Funds have been or will be expended during the applicable quarter. Prior to reimbursing Subrecipient, the City will verify that Subrecipient has met all applicable regulations for the ESG Program.

5.12 Remaining Balance . The ESG Program shall be completed and all funds provided through this Agreement shall be expended on eligible ESG Program activities from (Insert date) through (Insert date) . Invoices for approved ESG Program costs funded under this Agreement shall be submitt ed within 30 days after the Agreement expiration date. After the 30 day period for submitting invoices has expired, any remaining balance on this Agreement may be allocated by City to other eligible ESG projects within the City's approved ESG Program.

5.13 Separation of Accounts. All ESG Funds received by Subrecipient from City pursuant to this Agreement shall be maintained in an account in a federally insured banking or savings and loan institution with record keeping of such accounts maintained pursuant to T itle 2 of the Code of Federal Regulations ("2 CFR") Part 200. The Subrecipient is not required to maintain separate depository accounts for ESG Funds; provided however, the Subrecipient must be able to account for receipt, obligation and expenditure of ES G Funds pursuant to applicable 2 CFR 200.302 et seq., requirements and any other applicable law.

5.14 Repayment of Funds by Subrecipient . In the event this Agreement is terminated, as provided in section 4.9, Subrecipient agrees to and shall immediately return to City any and all unexpended and unencumbered ESG Funds. Further, Subrecipient shall comply with the provisions of the section of this Agreement relating to Reversion of Assets.

5.15 Additional Payment after Notice of Termination at Discretion of City . In the event of early termination of the Agreement by either party without cause, at the sole discretion and election of the City, the Subrecipient will be compensated for all services rendered and necessarily incurred costs performed in good faith in accordance with the terms of this Agreement that have been previously eligible for reimbursement and paid, to the date of the notice of termination to the extent that ESG Funds are available from HUD.

In the event of early termination of the Agreement by the Ci ty for cause (but not due to the non -performance or breach by Subrecipient), at the sole discretion and election of the City, the Subrecipient will be compensated for all services rendered 482

and necessarily incurred costs performed in good faith in accordanc e with the terms of this Agreement that have been previously eligible for reimbursement and paid, to the date of the notice of termination to the extent that ESG Funds are available from HUD.

5.16 Indirect Costs . If indirect costs are charged, the SUBRECIPIEN T will develop an indirect cost allocation plan for determining the appropriate SUBRECIPIENT’s share of administrative costs and shall submit such plan to the CITY for approval, in a form specified by the CITY.

5.17 Payment Procedures. The CITY will pay to the SUBRECIPIENT funds available under this agreement based upon information submitted by the SUBRECIPIENT and consistent with any approved budget and CITY policy concerning payments. With the exception of certain advances, payments will be made for eligible expenses actually incurred by the SUBRECIPIENT, and not to exceed actual cash requirements. Payments are to be adjusted by the CITY in accordance with advanced fund and program income balances available in SUBRECIPIENT accounts.

In addition, the CITY rese rves the right to liquidate funds available under this agreement for costs incurred by the CITY on behalf of the SUBRECIPIENT.

5.18 Progress Reports. The SUBRECIPIENT shall submit regular Progress Reports to the CITY in the form, content, and frequency as required by the CITY.

5.19 Procurement

a. Compliance
The SUBRECIPIENT shall comply with current CITY policy concerning the purchase of equipment and shall maintain inventory records of all non - expendable personal property as defined by such policy as may be procu red with funds provided herein. All program assets (unexpended program income, property, equipment, etc.) shall revert to the CITY upon termination of this Agreement.

b. OMB Standards
Unless specified otherwise within this agreement, the SUBRECIPIENT shall procure all materials, property, or services in accordance with the requirements of 2 CFR Part 200.

c. Travel
The SUBRECIPIENT shall obtain written approval from the CITY for any travel outside the metropolitan area with funds provided under this Agreement.

Use and Reversion of Assets

5.20 Compliance. The SUBRECIPIENT shall comply with current CITY policy concerning the purchase of equipment and shall maintain inventory records of all non - expendable personal property as defined by such policy as may be proc ured with funds provided herein. All program assets shall revert to the CITY upon termination of this agreement as provided for in Use and Reversion of Assets.

5.21 OMB Standards . Unless specified otherwise within this agreement, the SUBRECIPIENT shall procure all materials, property, or services in accordance with the requirements of 2 CFR Part 200.
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5.22 Travel. The SUBRECIPIENT shall obtain written approval from the CITY for any travel outside the metropolitan area with funds provided under this agreement.

5.23 Use as an Emergency Shelter . The use and disposition of real property and equipment under this agreement shall be in compliance with the requirements of 2 CFR Part 200, which include but are not limited to the following:

a. The SUBRECIPIENT shall transfer to t he CITY any ESG funds on hand and any accounts receivable attributable to the use of funds under this agreement at the time of expiration, cancellation, or termination.

b. Real property under the SUBRECIPIENT’s control that was improved, in whole or in part , with funds under this agreement shall comply with ESG assistance involving major rehabilitation or conversion, requires any building for which ESG assistance is used to continue in use as a shelter for homeless individuals and families for not less than a ten -year period. ESG assistance involving rehabilitation (other than major rehabilitation or conversion) requires any building for which ESG assistance is used to continue in use as a shelter for homeless individuals and families for not less than a thre e-year period. Thus, for either the 3 - or 10-year period of use, the use requirement starts on the date of initial occupancy for a building that had not previously been operated as a shelter. The date the ESG funds are obligated to a shelter starts the applicable use requirement where the building was previously operated as a shelter.

c. In all cases in which equipment acquired, in whole or in part, with funds under this agreement is sold, the proceeds shall be program income (prorated to reflect the extent to that funds received under this agreement were used to acquire the equipment). When equipment is no longer needed in the same project, it cannot be used to assist homeless or low -income persons, and the value of the property in question is $5,000 or mor e, disposition instructions should be requested from HUD. If HUD has neither use for the equipment nor provides instruction within 120 days, the recipient may dispose of the equipment provided the ESG account is reimbursed by applying to the sales price or fair market value of the equipment an amount equal to the percentage of HUD's participation in the original acquisition price of the equipment.

6. Relocation, Real Property Acquisition. The SUBRECIPIENT agrees to comply with the following:

a. The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended (URA), and implementing regulations at 49 CFR Part 24; and,

b. The SUBRECIPIENT also agrees to comply with all applicable CITY ordinances, resolutions and policies concerning the displacement of persons from their residences.

c. The requirements in 24 CFR 570.606(d) governing optional relocation policies.

The CITY hereby reserves the right to preempt the optional policies. 484

The SUBRECIPIENT shall provide relocation assistance to displaced persons as defined by 24 CFR 570.606(b) (2) that are displaced as a direct result of acquisition, rehabilitation, demolition or conversion for an ESG-assisted project. The SUBRECIPIENT also agrees to comply with applicable CITY ordinances, resolutions and policies concerning the displacement of persons from their residences.

7. Personnel & Participant Conditions.

7.1. Civil Rights

a. Compliance
The SUBRECIPIENT agrees to comply with all local and State civil rights laws and with Title VI of the C ivil Rights Act of 1964 as amended, Title VIII of the Civil Rights Act of 1968 as amended, Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended, Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 7 06), the Americans with Disabilities Act of 1990, the Age Discrimination Act of 1975, Executive Order 11063, and Executive Order 11246 as amended by Executive Orders 11375, 11478, 12107 and 12086.

b. Nondiscrimination
The SUBRECIPIENT agrees to comply with the non -discrimination in employment and contracting opportunities laws, regulations, and executive orders, as revised by Executive Order 13279 and all local ordinances. The applicable non -discrimination provisions in Section 109 of the HCDA are still applicable.

c. Land Covenants
This agreement is subject to the requirements of Title VI of the Civil Rights Act of 1964 (P. L. 88 -352). In regard to the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this agreement, the SUBRECIPIENT shall cause or require a covenant running with the land to be inserted in the deed or lease for such transfer, prohibiting discrimination as herein defined, in the sale, lease or rental, or in the use or occupancy of such land, or in any improvements erected or to be erected thereon, providing that the CITY and the United States are beneficiaries of and entitled to enforce such covenants. The SUBRECIPIENT, in undertaking its obligation to carry out the program assisted hereunder, agrees to take such measures as are necessary to enforce such covenant, and will not itself so discriminate.

d. Section 504
The SUBRECIPIENT agrees to comply with all Federal regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), which prohibits discrimination against the individuals with disabilities or handicaps in any Federally assisted program. The CITY shall provide the SUBRECIPIENT with any guidelines necessary for compliance with that portion of the regulations in force during the term of this agreement.

7.2. Affirmative Action

a. Approved Plan
The SUBRECIPIENT agrees that it shall be committed to carry out pursuant to the CITY’s specifications an Affirmative Action Program in keeping with t he 485

principles as provided in President’s Executive Order 11246 of September 24, 1966. The CITY shall provide Affirmative Action guidelines to the SUBRECIPIENT to assist in the formulation of such program. The SUBRECIPIENT shall submit a plan for an Affirma tive Action Program for approval prior to the award of funds.

b. Women- and Minority-Owned Business Enterprise (W/MBE) The SUBRECIPIENT will use its best efforts to afford small businesses, minority business enterprises, and women’s business enterprises th e maximum practicable opportunity to participate in the performance of this agreement. As used in this agreement, the terms “small business” means a business that meets the criteria set forth in section 3(a) of the Small Business Act, as amended (15 U.S.C. 632), and “minority and women’s business enterprise” means a business at least fifty -one (51) percent owned and controlled by minority group members or women. For the purpose of this definition, “minority group members” are Afro -Americans, Spanish -speaking, Spanish surnamed or Spanish-heritage Americans, Asian Americans, and American Indians. The SUBRECIPIENT may rely on written representations by businesses regarding their status as minority and female business enterprises in lieu of an independent investigation.

c. Access to Records
The SUBRECIPIENT shall furnish and cause each of its own SUBRECIPIENT’s or subcontractors to furnish all information and reports required hereunder and will permit access to its books, records and accounts by the CITY, HUD or i ts agent, or other authorized Federal officials for purposes of investigation to ascertain compliance with the rules, regulations and provisions stated herein.

d. Confidentiality of Records
The SUBRECIPIENT is to ensure the safety and security of ESG proje ct participants fleeing domestic violence situations by developing and implementing procedures to guarantee the confidentiality of records concerning project participants as required under 24 CFR 576.500. In addition, the address and location of family vio lence shelter facilities receiving ESG funding may not be publicly disclosed except with the written authorization of the person(s) responsible for the shelter facility's operation. To comply with this requirement, recipient organizations should, for examp le, keep written records or files pertaining to families under lock and key with only particular personnel granted access to those files.

e. Notifications
The SUBRECIPIENT will send to each labor union or representative of workers with which it has a collect ive bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or worker’s representative of the SUBRECIPIENT’s commitments hereunder, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

f. Equal Employment Opportunity and Affirmative Action (EEO/AA) Statement The SUBRECIPIENT will, in all solicitations or advertisements for employees placed by or on behalf of the SUB RECIPIENT, state that it is an Equal Opportunity or Affirmative Action employer.

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7.3 Subcontract Provisions
The SUBRECIPIENT will require and include compliance with any and all provisions of Civil Rights, Affirmative Action, and other applicable re quirements applicable to SUBRECIPIENT in every subcontract or purchase order as applicable, specifically or by attached reference, so that such provisions will be binding upon each of its own subcontractors.

7.4 Other Employment Restrictions
The SUBRECIPIENT is prohibited from using funds provided herein or personnel employed in the administration of the program for: Political activities, inherently religious activities, lobbying, political patronage, and nepotism activities.

7.5 OSHA
Where employees are eng aged in activities not covered under the Occupational Safety Act of 1970 (OSHA), they shall not be required or permitted to work, be trained, or receive services in buildings that are unsanitary, hazardous, or dangerous to the participants’ health or safety.

7.6 Labor Standards
The SUBRECIPIENT agrees to comply with the requirements of the Secretary of Labor in accordance with the Davis -Bacon Act as amended, the provisions of Contract Work Hours and Safety Standards Act (40 U.S.C. 327 et seq. ) and all other applicable Federal, state and local laws and regulations pertaining to labor standards insofar as those acts apply to the performance of this agreement. The SUBRECIPIENT agrees to comply with the Copeland Anti -Kick Back Act (18 U.S.C. 874 et seq.) and it’s implementing regulations of the U.S. Department of Labor at 29 CFR Part 5. The SUBRECIPIENT shall maintain documentation that demonstrates compliance with hour and wage requirements of this part. Such documentation shall be made available to the CITY for review upon request.

The SUBRECIPIENT agrees that, except with respect to the rehabilitation or construction of residential property containing less than eight (8) units, all contractors engaged under contracts in excess of $2,000.00 for construction, renovation or repair work financed in whole or in part with assistance provided under this agreement, shall comply with Federal requirements adopted by the CITY pertaining to such contracts and with the applicable requirements of the regulations of the Depart ment of Labor, under 29 CFR Parts 1, 3, 5 and 7 governing the payment of wages and ratio of apprentices and trainees to journey workers provided that, if wage rates higher than those required under the regulations are imposed by state or local law, nothing hereunder is intended to relieve the SUBRECIPIENT of its obligation, if any, to require payment of the higher wage. The SUBRECIPIENT shall cause or require to be inserted in full, in all such contracts subject to such regulations, provisions meeting the r equirements of this paragraph.

7.7 Section 3 Clause

a. Compliance
Compliance with the regulations set forth in 24 CFR 135, and all applicable rules and orders issued hereunder prior to the execution of this agreement, shall be a condition of the Federal financial assistance provided under this agreement and binding upon the CITY, the SUBRECIPIENT and any of the SUBRECIPIENT’s subrecipients and subcontractors. Failure to fulfill these 487

requirements shall subject the CITY, the SUBRECIPIENT and any of the SUBRECIPIENT’s subrecipients and subcontractors, their successors and assigns, to those sanctions specified by the agreement through which federal assistance is provided. The SUBRECIPIENT certifies and agrees that no contractual or other disability exists tha t would prevent compliance with these requirements.

The SUBRECIPIENT further agrees to comply with these “Section 3” requirements and to include the following language in all subcontracts executed under this agreement:

“The work to be performed under this agreement is a project assisted under a program providing direct Federal financial assistance from HUD and is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended (12 U.S.C. 1701). Section 3 requires th at to the greatest extent feasible opportunities for training and employment be given to low - and very low -income residents of the project area, and that contracts for work in connection with the project be awarded to business concerns that provide economic opportunities for low and very low -income persons residing in the metropolitan area in which the project is located.”

The SUBRECIPIENT further agrees to ensure that opportunities for training and employment arising in connection with rehabilitation (in cluding reduction and abatement of lead -based paint hazards) are given to low and very low -income persons residing within the metropolitan area in which the ESG -funded project is located; where feasible, priority should be given to low and very low -income persons within the service area of the project or the neighborhood in which the project is located, and to low and very low -income participants in other HUD programs; and award contracts for work undertaken in connection with a housing rehabilitation (incl uding reduction and abatement of lead -based paint hazards), housing construction, or other public construction project to business concerns that provide economic opportunities for low and very low -income persons residing within the metropolitan area in whi ch the ESG -funded project is located; where feasible, priority should be given to business concerns that provide economic opportunities to low and very low -income residents within the service area or the neighborhood in which the project is located, and to low and very low-income participants in other HUD programs.

The SUBRECIPIENT certifies and agrees that no contractual and/or other legal incapacity exists that would prevent compliance with these requirements.

b. Notification
The SUBRECIPIENT agrees to se nd to each labor organization or representative of workers with which it has a collective bargaining agreement or other contract or understanding, if any, a notice advising said labor organization or worker’s representative of its commitments under this Se ction 3 clause and shall post copies of the notice in conspicuous places available to employees and applicants for employment or training.

c. Subcontract
The SUBRECIPIENT will include this Section 3 clause in every subcontract and will take appropriate action pursuant to the subcontract upon a finding that the 488

subcontractor is in violation of regulations issued by the grantor agency. The SUBRECIPIENT will not subcontract with any entity where it has notice or knowledge that the latter has been found in vi olation of regulations under 24 CFR Part 135 and will not let any subcontract unless the entity has first provided it with a preliminary statement of ability to comply with the requirements of these regulations.

d. Conduct

i. Assignability

The SUBRECIPIENT shall not assign or transfer any interest in this agreement without the prior written consent of the CITY thereto; provided, however, that claims for money due or to become due to the SUBRECIPIENT from the CITY under this agreement may be assigned to a ban k, trust company, or other financial institution without such approval. Notice of any such assignment or transfer shall be furnished promptly to the CITY.

ii. Subcontracts

a. Approvals
The SUBRECIPIENT shall not enter into any subcontracts with any agency or in dividual in the performance of this agreement without the written consent of the CITY prior to the execution of such agreement.

b. Monitoring
The SUBRECIPIENT will monitor all subcontracted services on a regular basis to assure contract compliance. Res ults of monitoring efforts shall be summarized in written reports and supported with documented evidence of follow -up actions taken to correct areas of noncompliance.

c. Content
The SUBRECIPIENT shall cause all of the provisions of this agreement in its entirety to be included in and made a part of any subcontract executed in the performance of this agreement.

d. Selection Process
The SUBRECIPIENT shall undertake to insure that all subcontracts let in the performance of this agreement shall be awar ded on a fair and open competition basis in accordance with applicable procurement requirements. Executed copies of all subcontracts shall be forwarded to the CITY along with documentation concerning the selection process.

7.8 Hatch Act
The SUBRECIPIENT agre es that no funds provided, nor personnel employed under this agreement, shall be in any way or to any extent engaged in the conduct of political activities in violation of Chapter 15 of Title V of the U.S.C. 489

7.9 Conflict of Interest
The SUBRECIPIENT agrees t o abide by the provisions of 2 CFR Part 200, which include (but are not limited to) the following:

a. No employee, officer or agent of the SUBRECIPIENT shall participate in the selection, or in the award, or administration of, a contract supported by Federal funds if a conflict of interest, real or apparent, would be involved.

b. No covered persons who exercise or have exercised any functions or responsibilities with respect to ESG -assisted activities, or who are in a position to participate in a decision -making process or gain inside information with regard to such activities, may obtain a financial interest in any contract, or have a financial interest in any contract, subcontract, or agreement with respect to the ESG -assisted activity, or with respect to the proceeds from the ESG-assisted activity, either for themselves or those with whom they have business or immediate family ties, during their tenure or for a period of one (1) year thereafter. For purposes of this paragraph, a “covered person” includes a ny person who is an employee, agent, subcontractor, consultant, officer, or elected or appointed official of the CITY, the SUBRECIPIENT, or any designated public agency.

7.10 Lobbying The SUBRECIPIENT hereby certifies that:

a. No federally appropriated funds hav e been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, gran t, loan, or cooperative agreement; and,

b. If any funds other than federally appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a member of Congress, an officer or employee of Congress, or an employee of a member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form -LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions; and,

c. It will require that the language of paragraph (d) of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all SUBRECIPIENTS shall certify and disclose accordingly; and,

d. Lobbying Certification: This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certific ation is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S.C. Any person 490

who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

7.11. Copyright
If this agreement results in any copyrightable material or inventions, the CITY and/or grantor agency reserves the right to royalty -free, exclusive and irrevocable license to reproduce, publish or otherwise use and to authorize others to use, the work or materials for governmental purposes.

7.12. Religious Activities
The SUBRECIPIENT agrees that funds provided under this agreement will not be utilized for inherently religious activities prohibited by 24 CFR 576.406 su ch as worship, religious instruction, or proselytization. An organization that is awarded direct HUD funds may still engage in inherently religious activities provided they are voluntary for participants in HUD -funded activities and occur separately in ti me or location from the HUD -funded activities. An organization receiving HUD funds may not restrict HUD -funded services or housing to people of a particular religion or religious denomination.

8. Environmental Conditions.

8.1 Air and Water
The SUBRECIPIENT agrees to comply with the following requirements insofar as they apply to the performance of this agreement:

a. Clean Air Act, 42 U.S.C., 7401, et seq.;

b. Federal Water Pollution Control Act, as amended, 33 U.S.C., 1251, et seq., as amended, 1318 relating to i nspection, monitoring, entry, reports, and information, as well as other requirements specified in said Section 114 and Section 308, and all regulations and guidelines issued hereunder;

c. Environmental Protection Agency (EPA) regulations pursuant to 40 CFR Part 50, as amended.

8.2 Flood Disaster Protection
In accordance with the requirements of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4001), the SUBRECIPIENT shall assure that for activities located in an area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards, flood insurance under the National Flood Insurance Program is obtained and maintained as a condition of financial assistance for acquisition or construction purposes (including rehabilitation).

8.3 Lead-Based Paint
The SUBRECIPIENT agrees that any construction or rehabilitation of residential structures with assistance provided under this agreement shall be subject to HUD Lead-Based Paint Regulations at 24 CFR 570.608, and 24 CFR Part 35, Subpart B.

Such regulations pertain to all ESG -assisted housing and require that all owners, prospective owners, and tenants of properties constructed prior to 1978 be properly notified that such properties may include lead -based paint. Such notification shall point out the hazards of lead -based paint and explain the symptoms, treatment and precautions that should be taken when dealing with lead-based paint poisoning and the advisability and availability of blood lead level 491

screening for children under sev en. The notice should also point out that if lead - based paint is found on the property, abatement measures might be undertaken.

The regulations further require that, depending on the amount of Federal funds applied to a property, paint testing, risk assess ment, treatment and/or abatement may be conducted.

8.4 Historic Preservation
The SUBRECIPIENT agrees to comply with the Historic Preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. 470) and the procedures set forth in 36 CFR Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties, and any and all local ordinances insofar as they apply to the performance of this agreement.

In general, this requires concurre nce from the State Historic Preservation Officer for all rehabilitation and demolition of historic properties that are fifty years old or older or that are included on a federal, state, or local historic property list.

8.5 Building Standards
The SUBRECIPIENT agrees that any assistance to a building for which ESG amounts are used for conversion, major rehabilitation, rehabilitation, or renovation must meet local government safety and sanitation standards in accordance with 24 CFR 576.55.

9. Severability.

If any provision of this agreement is held invalid, the remainder of the agreement shall not be affected thereby and all other parts of this agreement shall nevertheless be in full force and effect.

10. Section Headings and Subheadings.

The section headings and subheadings contained in this agreement are included for convenience only and shall not limit or otherwise affect the terms of this agreement.

11. Waiver.

The CITY’s failure to act with respect to a breach by the SUBRECIPIENT does not waive its right to ac t with respect to subsequent or similar breaches. The failure of the CITY to exercise or enforce any right or provision shall not constitute a waiver of such right or provision.

12. Entire Agreement.

This agreement constitutes the entire agreement between the CITY and the SUBRECIPIENT for the use of funds received under this agreement, and it supersedes all prior or contemporaneous communications and proposals, whether electronic, oral, or written between the CITY and the SUBRECIPIENT with respect to this agreement.

IN WITNESS WHEREOF, the City Manager of the City of Garden Grove has caused this agreement to be subscribed and attested by the City Clerk hereof, and the SUBRECIPIENT has subscribed the same through its authorized officer, the day, month and y ear first above written.

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“SUBRECIPIENT” CITY OF GARDEN GROVE (“CITY”)
(Name of Subrecipient) A Municipal Corporation

By: By:
(Name of Director),
Executive Director
Scott Stiles,
City Manager

Dated: Dated:

APPROVED AS TO FORM: ATTEST:

By: By:

Omar Sandoval,
City Attorney
Teresa Pomeroy,
City Clerk

Dated: Dated:

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Attachment A

SCOPE OF SERVICES AND BUDGET
FY (Year)

494

ATTACHMENT A

SCOPE OF SERVICES AND BUDGET
CITY OF GARDEN GROVE & [SUBRECIPEINT NAME]

A. SCOPE OF SERVICES
This project is designed to provide availability and accessibility to a suitable living environment by providing [DESCRIBE PROJECT]. [SUBRECIPEINT NAME] shall provide essential services [DESCRIBE CLIENTEL BEING SERVED]. Furthermore this project furthers Priority #7 in the City of Garden Grove’s adopted Housing and Community Development Consolidated Plan (HUD 5-year plan), which is to address the needs of homeless individuals and those at risk of homelessness.

Between July 1, [20xx] and June 30, [20xx], [SUBRECIPEINT NAME] will provide the following eligible activities:

1. [DESCRIBE SERVICE/ACTIVITY AND THE NUMBER OF INDIVIDUALS SERVED IN PROGRAM YEAR].

B. PERFORMANCE MEASURES

[SUBRECIPEINT NAME] will submit to the City of Garden Grove Community Development Department quarterly reports on the form attached hereto by October 15, January 15, April 15, and July 15 over the duration of this agreement.

C. PROJECT BUDGET
Essential Services $ XX,XXX
Street Outreach $ XX,XXX
Emergency Shelter $ XX,XXX
Homeless Prevention $ XX,XXX
Rapid Rehousing $ XX,XXX
HMIS/CMIS $ XX,XXX

Total [SUBRECIPEINT NAME] budget $ XX,XXX

495

Attachment B

ELIGIBLE EXPENSE GUIDE

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EMERGENCY SOLUTIONS GRANTS

PROGRAM

(ESG)

ELIGIBLE EXPENSE GUIDE

497

TABLE OF CONTENTS

1. Street Outreach ........................................................................................ 2

1.1 Engagement ..................................................................................... 2

1.2 Case Management ............................................................................. 3

1.3 Emergency Health Services ................................................................ 3

1.4 Emergency Mental Health Services ...................................................... 3

1.5 Transportation .................................................................................. 3

1.6 Services to Special Populations ........................................................... 4

2. Emergency Shelter ................................................................................... 4

2.1 Essential Services ............................................................................. 4

2.2 Rehabilitation and Renovation............................................................. 8

2.3 Shelter Operations ............................................................................ 8

2.4 Assistance Required under Uniform Relocation Assistance (URA) ............. 8

3. Homelessness Prevention ........................................................................ 9

3.1 Housing Relocation and Stabilization Services ....................................... 9

3.2 Short and Medium-Term Rental Assistance ........................................... 12

4. Rapid Re-housing ..................................................................................... 13

4.1 Housing Relocation and Stabilization Services ....................................... 13

4.2 Short and Medium-Term Rental Assistance ........................................... 13

5. Homeless Management Information System (HMIS) ................................ 13

5.1 Hardware, Equipment and Software Costs ............................................ 13

5.2 Staffing: Paying salaries for operating HMIS ......................................... 13

5.3 Training and Overhead ...................................................................... 13

6. Administration ......................................................................................... 14

6.1 General Management / Oversight / Coordination 14

6.2 Training on ESG Requirements............................................................ 14

6.3 Consolidation Plan ............................................................................. 14

6.4 Environmental Review ....................................................................... 14

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Emergency Solutions Grants Program (ESG) funds may only reimburse cost directly related to the following ESG eligible expenditure program components:

1. Street Outreach

2. Emergency Shelter

3. Homelessness Prevention

4. Rapid Re-housing

5. Homelessness Management Information System (HMIS)

6. Administration

Subrecipients may consult the Federal and State ESG regulations at the HCD website:
http://www.hcd.ca.gov/fa/esg/

Indirect costs and any activities determined by the Department of Housing and Community Development to be ineligible, inefficient, or ineffective use of Grant funds as stated in the applicable NOFA will be disallowed.

1. Street Outreach – Unsheltered individuals and families, meaning those who qualify under 24 CFR § 91.5 paragraph (1)(i) of the definition of “homelessness”. Essential Services to eligible participants provided on the street or in parks, abandoned buildings, bus stations, campgrounds, and in other such settings where unsheltered persons are staying. Staff salaries related to carrying out street outreach activities are eligible.

1.1 Engagement

1.2 Case Management

1.3 Emergency Health Services

1.4 Emergency Mental Health Services

1.5 Transportation

1.6 Services to Special Populations

1.1 Engagement – Activities to locate, identify, and build relationships with unsheltered homeless people for the purpose of providing immediate support, intervention, and connections with homeless assistance programs and/or mainstream social services and housing programs.

 Initial assessment of needs and eligibility
 Providing crisis counseling
 Addressing urgent physical needs
 Actively connecting and providing information and referral  Cell phone costs of outreach workers
499

1.2 Case Management – Assessing housing and service needs, and arranging/coordinating/monitoring the delivery of individualized services.

 Using the centralized or coordinated assessment system  Initial evaluation/verifying and document eligibility  Counseling
 Developing/Securing/Coordinating Services
 Helping obtain Federal, State, and local benefits
 Monitoring/evaluating participant progress
 Providing information and referral to other providers  Developing an individualized housing/service plan

1.3 Emergency Health Services – Outpatient treatment of urgent medical conditions by licensed medical professionals in community-based settings (e.g., streets, parks, and campgrounds) to those eligible participants unwilling or unable to access emergency shelter or an appropriate healthcare facility.

 Assessing participant’s health problems and developing treatment plans
 Assisting participants to understand their health needs  Providing or helping participants obtain appropriate emergency medical treatment
 Providing medication and follow-up services

1.4 Emergency Mental Health Services – Outpatient treatment of urgent mental health conditions by licensed professionals in community-based settings (e.g., streets, parks, and campgrounds) to those eligible participants unwilling or unable to access emergency shelter or an appropriate healthcare facility.

 Crisis Intervention
 Prescription of psychotropic medications
 Explain the use and management of medications
 Combinations of therapeutic approaches to address multiple problems

1.5 Transportation – Travel by outreach workers, social workers, medical professionals or other service providers during the provision of eligible street outreach services.

 Transporting unsheltered people to emergency shelters or other service facilities
 Cost of a participant’s travel on public transit
 Mileage allowance for outreach workers to visit participants 500

 Purchasing or leasing a vehicle for use in conducting outreach activities, including cost of gas, insurance, taxes, and maintenance for the vehicle
 Costs of staff to accompany or assist participant to use public transportation

1.6 Services to Special Populations – Otherwise eligible Essential Services that have been tailored to address the special needs of homeless youth, victims of domestic violence, and related crimes/threats, and/or people living with HIV/AIDS who are literally homeless.

 See all eligible expenses above under Street Outreach (1)

2. Emergency Shelter (Includes Transitional Housing & Day Centers) – Eligible participants are individuals and families who are homeless. Essential Services to persons in emergency shelters, renovating buildings to be used as emergency shelters, and operating emergency shelters are eligible costs. Staff costs related to carrying out emergency shelter activities are also eligible.

2.1 Essential Services

2.2 Rehabilitation and Renovation

2.3 Shelter Operations

2.4 Assistance Required under Uniform Relocation Assistance (URA)

2.1 Essential Services – Services provided to individuals and families who are in an emergency shelter:

 Case Management – Assessing, arranging, coordinating, and monitoring individualized services.

o Using the centralized or coordinated assessment system o Initial evaluation including verifying and documenting eligibility
o Counseling
o Developing, securing, and coordinating services including Federal, State, and local benefits
o Monitoring and evaluating program participant progress o Providing information and referrals to other providers o Providing on-going risk assessment and safety planning with victims of domestic violence, dating violence, sexual assault, and stalking
o Developing an Individualized Housing and Service Plan

 Child Care – Licensed child care for program participants with children under the age of 13 or disabled children under the age of 501

18. o Child care costs
o Meals and snacks
o Comprehensive and coordinated sets of appropriate
developmental activities

 Education Services – Instruction or training to enhance participant’s ability to obtain and maintain housing: literacy, English literacy, GED, consumer education, health education, and substance abuse prevention.

o Educational services/skill-building
o Screening, assessment, and testing
o Individual or group instruction
o Tutoring
o Provision of books, supplies, and instructional material o Counseling
o Referral to community resources

 Employment Assistance and Job Training – Services assisting participants secure employment and job training programs.

o Classroom, online, and/or computer instruction
o On-the-job instruction
o Job finding, skill-building
o Reasonable stipends in employment assistance and job
training programs
o Books and instructional material
o Employment screening, assessment, or testing
o Structured job-seeking support
o Special training and tutoring, including literacy training and pre-vocational training
o Counseling or job coaching
o Referral to community resources

 Outpatient Health Services – Direct outpatient treatment of medical conditions provided by licensed medical professionals.

o Assessing health problems and developing a treatment plan

o Assisting program participants to understand their health 502

needs
o Providing or helping participants obtain appropriate medical treatment, preventive medical care, and health maintenance services, including emergency medical services
o Providing medication and follow-up services
o Providing preventive and non-cosmetic dental care

 Legal Services – Necessary legal services regarding matters that interfere with the program participant’s ability to obtain and retain housing.

o Hourly fees for legal advice and representation by licensed attorneys and certain other fees-for-service
o Client intake, preparation of cases for trial, provision of legal advice, representation at hearings, and counseling
o Filing fees and other necessary court costs

 Legal Representation – Legal representation and advice to resolve legal problems that prevent participants from obtaining or retaining permanent housing.

o Child support
o Guardianship
o Paternity
o Emancipation
o Legal separation
o Resolution of outstanding criminal warrants
o Appeal of veterans and public benefit claim denials
o Orders of protection and other civil remedies for victims of domestic violence, dating violence, sexual assault, and stalking

 Life Skills Training – Critical life management skills necessary to assist the program participant to function independently in the community.

o Budgeting resources
o Managing money
o Managing household
o Resolving conflict
o Shopping for food and needed items
o Improving nutrition

o Using public transportation
503

o Parenting

 Mental Health Services – Direct outpatient treatment of mental health conditions by licensed professionals.

o Crisis intervention
o Individual, family, or group therapy sessions
o Prescription of psychotropic medications or explanations about the use and management of medications
o Combinations of therapeutic approaches to address multiple problems

 Substance Abuse Treatment Services – Substance abuse
treatment provided by licensed or certified professionals, designed to prevent, reduce, eliminate or deter relapse of substance abuse or addictive behaviors.

o Client intake and assessment
o Outpatient treatment for up to thirty days
o Group and individual counseling
o Drug testing

 Transportation – Costs of travel by program participants to and from medical care, employment, child care, or other facilities that provide eligible essential services; and cost of staff travel to support provision of essential services.

o Cost of program participant’s travel on public transportation o Mileage allowance for service workers to visit participants o Purchasing or leasing a vehicle used for transport of participants and/or staff serving participants, including the cost of gas, insurance, taxes, and maintenance for the
vehicle
o Travel costs of staff to accompany or assist program
participants to use public transportation

 Services for Special Populations – Otherwise eligible essential services tailored to address the special needs of homeless youth, victims of domestic violence, and related crimes/threats, and people living with HIV/AIDS in emergency shelters.

o See all eligible expenses above under Essential Services (2.1)

2.2 Rehabilitation and Renovation* - Renovating buildings to be used as emergency shelter for homeless families and individuals. 504

 Labor
 Materials
 Tools
 Other costs for renovation, including soft costs
 Major rehabilitation of an emergency shelter
 Conversion of a building into an emergency shelter

* HCD encourages the use of other funding sources for renovation and limits renovation to an amount not to exceed $10,000.

2.3 Shelter Operations – Costs to operate and maintain emergency shelters and also provide other emergency lodging when appropriate.*

 Maintenance (including minor or routine repairs)
 Rent
 Security
 Fuel
 Insurance
 Utilities
 Food
 Furnishing
 Equipment
 Supplies necessary for the operation of the emergency shelter  Hotel and motel voucher for family or individuals*

*Hotel and motel vouchers are only eligible when no appropriate emergency shelter is available.

2.4 Assistance Required under URA – Assistance required under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) as described in subpart E of the interim regulations.

 Costs of providing URA assistance under 24 CFR § 576.408, including relocation payments and other assistance to persons displaced by a project assisted with ESG funds.*

* Persons that receive URA assistance are not considered “program participants” for the purposes of this part of ESG and relocation payments and other URA assistance are not considered “rental assistance” or “housing relocation and stabilization services” for the purposes of this part under ESG. 505

3. Homelessness Prevention – Individuals and families who are at imminent risk or at risk of homelessness, meaning those who qualify under 24 CFR § 576.2 paragraph (1) of the homeless definition or those who qualify as at risk of homelessness. Individuals and families must have an income below 30% of AMI. Short and medium-term rental assistance and housing relocation and stabilization services are eligible activities. Staff salaries related to carrying out homelessness prevention activities are also eligible.

3.1 Housing Relocation and Stabilization Services

3.2 Short and Medium-Term Rental Assistance

3.1 Housing Relocation and Stabilization Services
 Requirements and Restrictions:

1. Participants must meet with a case manager at least once a month for the duration of assistance, except where funding under Violence Against Women Act (VAWA) or Family Violence Prevention and Services Act (FVPS) prohibits the subrecipient from making shelter or housing conditional upon the receipt of services.

2. Participants must be assisted, as needed, in obtaining:

 Appropriate supportive services, like mediation or mental health treatment or services essential for independent living
 Mainstream benefits like Medicaid, SSI, or TANF

 Financial Assistance

o Moving Costs – Moving costs, such as a truck rental or hiring a moving company, including certain temporary storage
fees.
o Rent Application Fees – Application fee that is charged by the owner to all applicants.
o Security Deposit – Equal to no more than 2 month’s rent o Last Month’s Rent – Paid to the owner of housing at the time security deposit and first month’s rent are paid.
o Utility Deposit – Standard utility deposit required by the utility company for all customers (i.e., gas, electric, water/sewage).
o Utility Payments – Up to 24 months of utility payments per participant per service (i.e., gas, electric, water/sewage), including a 1 time payment up to 6 month of arrearages, per service.

506

 Services

o Housing Search and Placement

 Assessment of housing barriers, needs and
preferences
 Development of an action plan for locating housing
 Housing search and outreach to and negotiation with
owner
 Assistance with submitting rental applications and
understanding leases
 Assessment of housing for compliance with ESG
requirements for habitability, lead based paint, and
rent reasonableness
 Assistance with obtaining utilities and making moving arrangements
 Tenant counseling

o Housing Stability Case Management – Assessing,
arranging, coordinating, and monitoring the delivery of individualized services to facilitate housing stability

 Using the centralized or coordinated assessment
system, conduct the initial evaluation and re-
evaluation
 Counseling
 Developing, securing, and coordinating services
including Federal, State, and local benefits
 Monitoring and evaluating program participant
progress
 Providing information and referrals to other providers  Developing an Individualized Housing and Service
Plan

o Mediation – Mediation between the program participant and the owner or person(s) with whom the program participant is living, to prevent the program participant from losing
permanent housing in which they currently reside.

 Time and/or services associated with mediation
activities

o Legal Services – Legal services that are necessary to resolve a legal problem that prohibits the program participant from obtaining or maintaining permanent housing.

 Hourly fees for legal advice and representation
 Fees based on the actual service performed (i.e., fee for service), but only if the cost would be less than the 507

cost of hourly fees
 Client intake, preparation of cases for trial, provision of legal advice, representation at hearings, and
counseling
 Filing fees and other necessary court costs
 Subrecipient’s employee’s salaries and other costs
necessary to perform the series, if the subrecipient is a legal services provider and performs the services
itself

o Legal Representation may be provided for:

 Landlord/tenant matters
 Child support
 Guardianship
 Paternity
 Emancipation
 Legal Separation
 Resolution of outstanding criminal warrants
 Order of protection and other civil remedies for
victims of domestic violence, dating violence, sexual
assault, and stalking
 Appeal of veterans and public benefit claim denials

o Credit Repair – Services necessary to assist program
participants with critical skills related to household
budgeting, managing money, accessing a free personal
credit report, and resolving personal credit problems*

 Credit counseling

 Other related services

* Assistance cannot include the payment or mediation of a debt.
508

3.2 Short and Medium-Term Rental Assistance
 Requirements and Restrictions:

1. Compliance with Fair Market Rent (FMR) limits and Rent Reasonableness.

2. Compliance with Minimum Habitability Standards.

3. Rental Assistance Agreement and Lease Standards:

 The rental assistance agreement must set forth the terms under which rental assistance will be provided.
 Each participant receiving rental assistance must have a legally binding, written lease (between the owner and participant) for the rental unit, unless the assistance is solely for the rental arrears  Project-based rental assistance leases must have an initial term of one year.

4. Cannot use with other subsidies

 No rental assistance can be provided to a household receiving rental assistance from another public source for same time period (except 6 months of arrears).
 Rental assistance may not be provided to participants who are currently receiving replacement housing payments under the URA.

5. Late Payments

 The rental assistance agreement must contain the same payment due date, grace period, and late payment penalty requirements as the program participant’s lease.
 The subrecipient must make timely payments to the owners in accordance with the rental assistance agreement.
 The subrecipient is solely responsible for paying (with non-ESG funds) late payment penalties that it incurs.

 Short-Term Rental Assistance – Up to 3 months
 Medium-Term Rental Assistance – 4 to 24 months
 Payment of Rental Arrears – One time payment up to 6 months, including any late fees on those arrears.
 Any Combination of the Three Types of Rental Assistance Above – Total not to exceed 24 months during any 3 year period, including any payment for last month’s rent.
509

4. Rapid Re-Housing – Individuals and families who are literally homeless, meaning those who qualify under 401 (1) McKinney-Vento Act of the definition of homeless. Short and medium-term rental assistance and housing relocation and stabilization services are eligible activities. Staff salaries related to carrying out homelessness prevention activities are also eligible.

4.1 Housing Relocation and Stabilization Services – See 3.1 Housing Relocation and Stabilization Services above.

4.2 Short and Medium-Term Rental Assistance – See 3.2 Short and Medium- Term Rental Assistance above.

5. HMIS – The HEARTH Act makes HMIS participation a statutory requirement for ESG subrecipients. Victim service providers cannot, and Legal Services Organizations may choose not to, participate in HMIS. Providers that do not participate in HMIS must use a comparable database that produces unduplicated, aggregate reports instead. Activities funded under this component must comply with HUD’s standards on a participation, data collection and reporting under a local HMIS.

5.1 Hardware, Equipment, and Software Costs

5.2 Staffing: Paying salaries for operating HMIS

5.3 Training and Overhead

5.1 Hardware, Equipment, and Software Costs

 Purchasing or leasing computer software
 Purchasing software or software licenses
 Purchasing or leasing equipment, including telephones, faxes, and furniture

5.2 Staffing: Paying salaries for operating HMIS, including:

 Data collection
 Completing data entry
 Monitoring and reviewing data quality
 Completing data analysis
 Reporting to the HMIS Lead
 Training staff on using the HMIS or comparable database  Implementing and complying with HMIS requirements

5.3 Training and Overhead

 Obtaining technical support
 Leasing office space
510

 Paying charges for electricity, gas, water, phone service and high- speed data transmission necessary to operate or contribute data to HMIS
 Paying costs of staff to travel to and attend HUD-sponsored and HUD- approved training on HMIS and programs authorized by Title IV of the McKinney-Vento Homeless Assistance Act
 Paying staff travel costs to conduct intake
 Paying participation fees charged by the HMIS Lead

6. Administration

6.1 General Management / Oversight / Coordination

6.2 Training on ESG Requirements

6.3 Consolidated Plan

6.4 Environmental Review

6.1 General Management / Oversight / Coordination – Costs of overall program management, coordination, monitoring, and evaluation

 Administrative services performed under third party contracts or agreements, including general legal services, accounting services, and audit services
 Other costs for goods and services required for administration of the program, including rental or purchase of equipment, insurance, utilities, office supplies, and rental and maintenance (but not purchase) of office space
 Staff salaries, wages, and related costs of staff engaged in eligible program administration activities

6.2 Training on ESG Requirements

 Costs of providing training on ESG requirements and attending HUD- sponsored ESG trainings

6.3 Consolidated Plan

 Costs of preparing and amending the ESG and homelessness related sections of the consolidated plan in accordance with ESG requirements and 24 CFR part 91

6.4 Environmental Review

 Costs of carrying out the environmental review responsibilities under 24 CFR § 576.407 of the HUD regulation
511

Exhibit 5
Monitoring Notification Letter: On-Site Visit

512

Exhibit 5 Monitoring Letter-Site Visitation

Date XX

Entity

Subject: Guidance to ESG Subrecipients

Dear Subrecipient:

This letter serves to notify you that the City of Garden Grove will be monitoring your agency’s use of Emergency Shelter Grant Program (ESG) funds under the terms and conditions set forth in the Subrecipient Agreement implemented during Fiscal 20XX-XX. This letter further serves to memorialize reporting procedures for Fiscal 20XX-XX for ESG funds awarded to your agency.

Monitoring

City representatives the will hold an entrance interview on --------- at your agency with you and staff you wish to designate. The purpose of the interview is to review your agency’s administrative and financial procedures pert inent to the management of your Fiscal 20 XX-XX ESG-funded program, and to ascertain whether it comports with ESG requirements described in the Subrecipient Agreement. In anticipation of the forthcoming visit, we will request access to records that include the following:

 A full description of the program;
 Evidence that the program meets the ESG permitted activities;  Characteristics and numbers of beneficiaries;
 Documentation of participant eligibility;
 Review of the program’s financial records, e.g., ch art of accounts, any recent audit report, documentation of expenses.
 Record retention and file management practices; and
 Procurement procedures.

Following this meeting, the City will then transmit the preliminary results of the monitoring visit, which pr ovides you with an opportunity to correct any misunderstandings, provide additional information that may be needed, and set forth the actions being undertaken to correct areas of noncompliance. Within 30 days of the monitoring visit, the City will notify you in writing of the results of the monitoring and set forth any findings or concerns and the timeframe for a written response and corrective action.

Fiscal 20XX-XX Procedures

 Submittal of Payment Requests (Payment of Invoices)
513

Remember that payment requ ests should be submitted on a quarterly basis (a copy of the City’s payment request form, previously transmitted electronically to your agency, is attached) and accompanied by support documentation. Support documentation may include copies of time sheets, invoices, purchase orders, receipts, or other relevant records showing how you expended the City-awarded ESG funds.

 Quarterly Subgrantee Performance Reports
Quarterly Grantee Performance Reports, or GPR’s, are to be submitted electronically and concurrently with your agency’s request for reimbursement for the ending quarter. Quarterly GPR’s for the reporting periods listed below will be due as follows:

Reporting Period Report Due Date
July 1, 20XX – September 30, 20XX October 15, 20XX
October 1, 20XX – December 31, 20XX January 15, 20XX
January 1, 20XX – March 31, 20XX April 15, 20XX
April 1, 20XX – June 30, 20XX July 15, 20XX

 Obtaining, Documenting, and Reporting Program Beneficiary Data Under the current ESG Subrecipient Agreement, your agen cy must certify that the activities being carried out will comply with requirements under the ESG Program . Your agency is also to report on the beneficiaries of your program and on the accomplishments in accordance with the outcomes set forth in the Subre cipient Agreement. This data is to be documented in the GPR each quarter and should be accompanied by copies of intake forms, income self - certification forms, or any form used to determine beneficiary eligibility for those persons assisted during the relevant quarter.

Please direct your questions or comments to Jimmy Nguyen at (714) 741 -5144 or by e -mail at [email protected].

Sincerely,
City of Garden Grove

Jimmy Nguyen
Neighborhood Improvement Program Specialist
514

Exhibit 6
Annual Monitoring Notification Letter: Desk Audit

515

[Date]

Subrecipient
ATTN: XXXXX

SUBJECT: ESG MONITORING – DESK AUDIT
FY (Year)

Dear Subrecipient:

The City of Garden Grove will be monitoring records pertaining to your agency’s use of Emergency Solutions Grant (ESG) funds under the terms and conditions set forth in the Subrecipient Agreement implemented during Fiscal (Year). Specifically, the City will be monitoring records for the periods of ---April 1, 20xx through June 30, 20xx (Quarter 4 of FY 20xx -xx) and April 1, 20xx through June 30, 20xx (Quarter 4 of FY 20xx -xx) via a desk audit based upon the following support documentation to be submitted no later than Monday, October 31, 20xx:

 For Quarter 4 of FY 20xx -xx and Quarter 4 of FY 20xx -xx, please submit an intake application for each beneficiary served during these periods.
 Support documentation such as receipts, invoices, purchase orders, time sheets, for all expenditures requested to be reimbursed by the City in Quarter 4 of FY 20xx-xx and Quarter 4 of FY 20xx-xx.  Record retention and file destruction policy
 Copy of your homeless termination procedures.

If you have already submitted part, or all, of this information to the City along with your quarterly Grantee Performance Report (GPR), then no action is necessary on your part.

Within 30 days of the desk audit, you will be notified in writing of the results of the monitoring and set forth any findings or concerns and the timeframe for a written response and corrective action. At this time you will h ave the opportunity to correct any misunderstandings, provide additional information that may be needed, and/or describe any actions you will undertake to correct areas of noncompliance, if applicable.

Thank you for your time and attention to this matter. Please direct your questions to Jimmy Nguyen, Program Specialist, at (714) 741-5144 or via email at [email protected]

Sincerely,

Jimmy Nguyen
Neighborhood Improvement Program Specialist
516

Exhibit 7
Monitoring Checklist

517

Exhibit 7: Monitoring Checklist

Monitoring Emergency Solutions Grant (ESG)Subrecipients

Subrecipient
Project Name
Subrecipient Representative(s)
Community Development Representative(s)
Date monitoring conducted Desk Audit
On-site visit(s)
Monitoring letter sent on
Date follow-up monitoring visit conducted/letter sent

A. Eligible Program Components/Activities

tttSecondary Activity Category (ESG eligible activities) ESG Activity Categories (Components)
Renovation/
Rehab
Essential
Services
Operations
Housing
Relocation &
Stabilization/
Financial
Assistance

Housing
Relocation &
Stabilization/
Financial
Services
Rental
Assistance

Street Outreach
Shelter
Homeless Prevention
Rapid Re-Housing
HMIS

Standard policies and procedures for evaluating individuals’ and families’ eligibility for assistance under Emergency Solutio ns Grant (ESG) Yes No NA Comments
518

Does the subrecipient have safeguards to meet the
safety and shelter needs of special populations, e.g.
victims of domestic violence, dating violence, sexual
assault, and stalking; and individuals and families
who have the highest b arriers to housing and are
likely to be homeless the longest?

Does the subrecipient have policies and procedures
for assessing, prioritizing, and reassessing
individuals’ and families’ needs for es sential services related to emergency shelters?

Does the subrecipient have policies and procedures
for coordination among emergency shelter providers,
essential services providers, homelessness
prevention, and rapid re -housing assistance
providers; other homeless assistance providers; and
mainstream service and housing providers activities
must be coordinated and integrated to the maximum
extent practicable?

Does the subrecipient have policies and procedures
for determining and prioritizing which eligible families and individuals will receive homelessness prevention
assistance and which eligible families and individuals
will receive rapid re-housing assistance?

Does the subrecipient have standards for targeting
and providing essential services related to street
outreach?

If the subrecipient uses ESG funds to operate an
emergency shelter, are there policies and
procedures for admission, diversion, referral, and
discharge, including standards regarding length of
stay?

Does the subrecipient have standards for
determining what percentage or amount of rent and
utilities costs each program participant must pay
while receiving homelessness prevention or rapid re -
housing assistance?

Does the subrecipient have standards for
determining how long a particular program
participant will be provided with rental assistance
and whether and how the amount of that assistance
will be adjusted over time?

519

Does the subrecipient standards have for
determining the type, amount, and duration of
housing stabilization and/or relocation services to
provide to a program participant, including the limits, if any, on the homelessness preve ntion or rapid re -
housing assistance that each program participant
may receive, such as the maximum amount of
assistance, maximum number of months the
program participant receive assistance; or the
maximum number of times the program participant
may receive assistance?

For ESG service activities, are the services new, or
quantifiable increases in the service levels, provided
by the local government with local funds within the
last year before the initial ESG grant?
[24 CFR 576.21(b)(1)]

Do the projects reviewed with both completed and
underway activities demonstrate that beneficiaries
receive, or were referred to, appropriate supportive
services, access to mainstream resources, and other
services needed to achieve independent living?
[24 CFR 576.56(a)(1)]

Yes No NA Type of Participants Assisted Required Documentation

Persons living on the street

For projects providing services (e.g., outreach, food, health care, clothing to persons who reside on the streets (but not in shelters or other places meant for human habitation), are there certifications signed and dated by staff that:
 verifies that the services are going to homeless persons, and  indicates where the persons served reside

Persons coming from living on the street and into a
place meant for human habitation

Was a statement signed and dated verifyng provided that person is coming from the street through:
 organizations or outreach workers who have assisted him/her in the past;  determining where the resident receives assistance checks, if applicable; and/or  other information regarding the participant’s recent past activities?

If staff is unable to verify in this manner that the person is coming from living on the street, were written, signed and dated statement prepared about the participant’s previous living place?

Persons coming from an emergency shelter Did subrecipient obtain from the referring agency a written, signed, and dated verification that the individual has been a resident of the emergency shelter? 520

Persons coming from a transitional housing

Did subrecipient obtain from the referring agency two written, signed, and dated verifications:
1) a signed statement from the transitional housing staff i ndicating that the individual had been a resident there; and
2) the referring agency’s written, signed, and dated verification as to the individual’s homeless status when he/she entered their program?

If the referring agency did not verify the individua l’s homeless status upon entry into their program, did subrecipient verify that status? That is, in addition to the written, signed, and dated verification from the referring agency that the individual has been residing in the transitional housing, did sub recipient verify their status upon entry into transitional housing and document that status?.

Persons being evicted from a private dwelling Did the subrecipient:
 Document: the income of the participant; what efforts were made to obtain housing; and why, without the homeless assistance, the participant would be living on the street or in an emergency shelter.
 Documentation of one of the following:

 For formal eviction proceedings, evidence that the participant was being evicted within the week before receiving homeless assistance;
 Where a participant’s family is evicting, a signed and dated statement from a family member describing the reason for the eviction;
 Where there is no formal eviction process (in these cases, persons are considered evicted when they are forced out of the dwelling unit by circumstances beyond their control), he subrecipient secure:
 a signed and dated statement from the participant describing the situation; and  documentation and verification (through written, signed, and dated statements) of efforts to confirm that these circumstances are true.

Persons from a short term stay (up to 30 consecutive
days) in an instit ution who previously resided on the
street or in an emergency shelter
Did the subrecipient obtain:
 written verification from the situation’s staff that the participant has been residing in the institution for less that 31 days; and
 information on the pr evious living situation. Preferably, this will be the institution’s written, signed, and dated verification on the individual’s homeless status when he/she entered the institution. If the institution’s staff did not verify the individual’s homeless status upon entry into the institution, did subrecipient verify that status (i.e., if the person was living on the streets before moving into the institution, subrecipient is to obtain the documentation required under “Persons coming from living on the street”).

Persons being discharged from a
longer stay in an institution
Did subrecipient obtain signed and dated:
 evidence from the institution’s staff that the participant was being discharged within th e week before receiving homeless assistance; and
 documentation of the following:
 the income of the participant;
 what efforts were made to obtain housing; and
 why, without the homeless assistance, the participant would be living on the street or in an 521

emergency shelter.

Persons fleeing domestic violence

Did subrecipient obtain written, signed, and dated verification from the participant that he/she is fleeing a domestic violence situation?
If the participant is unable to prepare the verification, did subrecipient prepare a written statement about the participant’s previous living situation and have the participant sign and date it ? ESG Beneficiaries
Yes NO NA
Did the subrecipient meet the f ollowing
minimum eligibility criteria for ESG
beneficiaries
Comments

For essential services related to street outreach,
beneficiaries must meet the criteria under paragraph (1)(i) of the “homeless” definition under § 576.2: ” An individual or family with a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular sleeping accommodation for human beings,
including a car, park, abandoned building, bu s or train station, airport, or camping ground”.

For emergency shelter, beneficiaries must meet the
“homeless” definition in 24 CFR 576.2

For essential services related to emergency shelter,
beneficiaries must be “homeless” and staying in an
emergency shelter, which could include a day shelter.

For homelessness prevention assistance, beneficiaries
must meet the requirements described in 24 CFR 576.103
provided to individuals and families who meet the criteria under “At Risk of Homelessness”, and who have an
annual income below 30% of the median family income for the area.

For rapid re -housing assistance, beneficiaries must meet requirements described in 24 CFR 576.104; that is, meet the criteria under paragraph (1) of the “homeless”
definition in 24 CFR 576.2 : ” An individual or family with a primary nighttime residence that is a public or private place not designed for or ordinarily used as a regular
sleeping accommodation for human beings, including a
car, park, abandoned building, bus or train station, airport, or camping ground;” o r who meet the criteria under
paragraph (4) of the “homeless” definition and live in an

522

emergency shelter or other place – “Any individual or
family who:( i) Is fleeing, or is attempting to flee, domestic violence, dating violence, sexual assault, stalking, or other dangerous or life -threatening conditions that relate to violence against the individual or a family member,
including a child, that has either taken place within the individual’s or family’s primary nighttime residence or has made th e individual or family afraid to return to their primary nighttime residence; (ii) Has no other residence; and (iii) Lacks the resources or support networks, e.g., family, friends, faith based or other social networks, to obtain other permanent housing described in paragraph
(1) of the “homeless” definition”

Did the subrecipient r e-evaluate program participants’ eligibility and the types and amounts of assistance once every 3 months for homelessness prevention and not less than once annually for rapid re-housing assistance?

Did the subrecipient r e-evaluate program participants’ eligibility and the types and amounts of assistance once every 3 months for homelessness prevention and not less than once annually for rapid re-housing assistance?

For projects funding homeless prevention activities, are the beneficiaries low -income individuals or families at imminent risk of losing their housi ng due to a notice of eviction, foreclosure, or utility termination?
[McKinney-Vento Act, 42 USC 11374(a)(4)]

If “yes,” do the files show that the (a) beneficiaries’ assistance is necessary, (b) due to a sudden loss of
income, (c) the beneficiaries are able to resume payments in a reasonable time period, and (d) there are no similar funds available locally?
[McKinney-Vento Act, 42 USC 11374(a)(4)]

Are the homeless prevention funds defined as short term assistance (described in question 3 above); s ecurity
deposits or first month’s rent; landlord -tenant mediation; indigent tenant legal services; or other innovative
homeless prevention?
[24 CFR 576.3, Definitions: Homeless Prevention]

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Does assistance meet the definition of “innovative?”
(Describe nature of assistance in response below.)
[24 CFR 576.3, Definitions: Homeless Prevention]

ESG Match Requirements
ESG Match
(List each source of match separately)
Action Plan Amount Pledged CAPER Amount Shown Final Documented Match CASH/GOV’T. GRANTS
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $

NON-CASH CONTRIBUTIONS
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTAL MATCH $ $ $

Yes No NA Requirement Comments
Does the subrecipient’s final documented match shown above equal or exceed the ESG grant amount? (24 CFR 576.201)

Are the documented match sources eligible forms of match expended within the grant year? (24 CFR 576.201)

Is the documented match above consistent with the amount shown in the quarterly subrecipient reports?

Yes No NA Record-Keeping Systems Comments

Filing System. Are the subrecipient’s files orderly,
comprehensive, secured for confidentiality where
necessary, and up -to-date? Note any areas of
deficiency.

524

Documentation (confidentiality). Do the ESG
project files and subrecipient records have the
necessary documentation written records or
files pertaining to families under lock and key
with only particular personnel granted access
to those files? ESG subr ecipients are to
develop and implement procedures to
guarantee the confidentiality of records
concerning project participants and ensure
that the address and location of family
violence shelter facilities receiving ESG
funding are not publicly disclosed ex cept with
the written authorization of the person(s)
responsible for the shelter facility's operation.

Record Retention. Participation of Homeless
Persons in Policy -making and Operations.

Are there r ecords evidencing how the
subrecipient encourages the participation of
homeless persons in projects

Documentation (Evidence of homelessness and
termination procedures ). Does the subrecipient
maintain adequate documentation to determine
the eligibility of persons served by HUD's
homeless assistance programs, and that the
termination provision is correctly applied for any
individual or family terminated or violating
program requirements. records are maintained for
a 4-year period.

Record Retention . Is there a process for
determining which records need to be retained
and for how long?

Yes No NA Financial Management Systems (84.21−28)
Requirements Comments

Does the subrecipient have written
procedures covering the recording of
transactions, an accounting manual and a
chart of accounts?
Areas for possible sampling:
 Is there an organization ch art describing
actual lines of responsibility

525

 Are key employee duties defined
 Is the chart of accounts inclusive of account
numbers to support the control needed to
ensure resources used do not exceed
resources authorized
 Do the internal control procedures support
the s ubrecipients ability to prepare financial
statements:

If the grantee has a written policy manual, does it
provide guidelines for controlling expenditures,
such as purchasing requirement s and travel
authorizations?

Are systems in compliance with accounting
policies and procedures for cash, real and
personal property, equipment and other assets
(85.20(b)(3) and 84.20(b)(3))?

Review the chart of accounts, journals, ledgers,
reconciliation, data processing, and reporting
system.

Areas for possible sampling:
 Does subrecipient record an
encumbrance/obligation when executing
contracts, purchase orders or maintain
readily accessible information on obligations
 Are expenditures supported for instance by
invoices, contracts or purchase orders
 Are expenditures identified with ESG source

Has all cash been promptly drawn down and
deposited? Are all drawdowns of Federal funds
properly recorded?

Has an audit been prepared for the subrecipient?
Determine if the subrecipie nt has expended
$500,000 or more in Federal funds for the subject
program year. (OMB Circular A-133)

If an IPA was prepared were there a ny findings
related to ESG activity?

Yes No NA Insurance Requirements Comments
Has the subrecipient submitted a current copy of
526

its Certificate of Insurance?
Is the City named as an additional insured?

Yes No NA Procurement Requirements Comments

Do the procedures the subrecipient uses for
procurement of goods and services meet
requirements at 24 CFR Part 84 ? Review a
sample number of procurements.

How does the subrecipient assure there was no
conflict of interest, real or apparent?

Yes No NA Procurement Requirements Comments

Has the sub recipient purchased equipment with
ESG funds in excess of $1,000? Does the
subrecipient maintain the records required at

84.34?

Has a physical inventory taken place and the
results reconciled with property records within the
last two years?

If the subrecipient disposed of
equipment/property that was purchased with
Federal funds within the last five years:

 Were proceeds from the sale reported as
program income?

Yes No NA General Requirements Comments

Equal Employment Opportunity . Does the
subrecipient make it known that facilities and
services supported by this grant are available to
any pe rson (who otherwise meets the eligible
criteria for the program) without discrimination on
the basis of race, color, religion, sex, marital
status, national origin, familial status, disability,
age or creed? Note any deficiencies.

Section 3 . Opportunities for Training and
Employment for Local Residents – Refer to City
Section 3 Protocols. Note any deficiencies.

Requirements for Disabled Persons. Refer to
527

EEO section above and note any concerns.

Women and Minority Business Enterprises.

Refer to OMB 84.44, affirmative steps
documentation. Note any concerns.

I. Conclusion and Follow-up

Prepared by City of Garden Grove, Community Development Department, Neighborhood Improvement Division:

Date Signature Title

Date Signature Title

Is the number of beneficiaries currently being served consistent with the service number in the approved Action Plan for the program year? [24 CFR 91.220(d)]

Yes No

2. Per the ESG Desk Guide, Section 6.2, is the IDIS drawdown rate consistent with the projected point-in-time expenditures for all projects reviewed during the grant term? (For example, if the project is in Year 1 of the maximum two-year term, the grantee should have expended all of its rehabilitation and one-half of any operations, supportive services, any homeless prevention, and administrative costs.)

Yes No N/A
528

3. For the program year, has the grantee spent no more than 30% of its ESG grant for supportive services, unless a grantee had requested and received a waiver from HUD?
[24 CFR 576.21(a)(2) and McKinney-Vento Act, 42 USC 11374]

Yes No N/A

4. For the program year, has the grantee spent no more than 30% of its ESG grant for homeless prevention and other short-term financial assistance to prevent homelessness?
[24 CFR 576.21(c), 24 CFR 576.3 and McKinney-Vento Act, 42 USC 11374]

Yes No

5. For the program year, has the grantee spent no more than 10% of its ESG grant for operations for management staff costs?
[24 CFR 576.21(a)(3)]

Yes No

6. For the program year, has the grantee spent no more than 5% of its ESG grant for grant administration costs?
[24 CFR 576.21(a)(5); McKinney-Vento Act, 42 USC 11378]

Yes No

7. For completed program years reviewed, has the grantee spent all of its ESG funds within 24 months of grant award?
[24 CFR 576.35]

Yes No

Essential Services

529

For ESG service activities, are the services new, or quantifiable increases in the service levels, provided by the local government with local funds within the last year before the initial ESG grant?
[24 CFR 576.21(b)(1)]

Yes No N/A

2. Do the projects reviewed with both completed and underway activities demonstrate that beneficiaries receive, or were referred to, appropriate supportive services, access to mainstream resources, and other services needed to achieve independent living?
[24 CFR 576.56(a)(1)]

Yes No

Homeless Prevention

For projects funding homeless prevention activities, are the beneficiaries low-income individuals or families at imminent risk of losing their housing due to a notice of eviction, foreclosure, or utility termination? [McKinney-Vento Act, 42 USC 11374(a)(4)]

Yes No N/A

4. If the answer to question 3 above is “yes,” do the files show that the (a) beneficiaries’ assistance is necessary, (b) due to a sudden loss of income, (c) the beneficiaries are able to resume payments in a reasonable time period, and (d) there are no similar funds available locally?
[McKinney-Vento Act, 42 USC 11374(a)(4)]

Yes No N/A

5. Does the total amount of homeless prevention funds spent by the grantee for the program year fall at or below the 30 percent limitation for this expenditure category?
[McKinney-Vento Act, 42 USC 11374(a)(4)]

Yes No

530

6. Are the homeless prevention funds defined as short term assistance (described in question 3 above); security deposits or first month’s rent; landlord-tenant mediation; indigent tenant legal services; or other innovative homeless prevention?
[24 CFR 576.3, Definitions: Homeless Prevention]

Yes No

7. If the grantee funded innovative homeless prevention activities, does assistance meet the definition of “innovative?” (Describe nature of assistance in response below.)
[24 CFR 576.3, Definitions: Homeless Prevention]

Yes No N/A

Beneficiary Services

531

Complete the table below using the information from the selected beneficiary sample. (Add more lines or attach another sheet, if needed.)
NAME
(if appropriate)
CASE
NUMBER

ADDRESS FORMER (F) OR

CURRENT (C)
BENEFICIARY?
ENTRY
DATE

2. For homeless assistance activities, does a review of the beneficiary files adequately document that the individuals or families were homeless prior to residency? [McKinney-Vento Act, 42 USC 11302(a)]

Yes No

3. For homeless prevention activities, are the individuals or families facing eviction or utility shutoffs, or in need of financial or legal services, eligible for assistance? (By HUD definition, prevention activities occur before persons become homeless.)
[McKinney-Vento Act, 42 USC 11374(a)(4) and 24 CFR 576.21(a)(4)]

Yes No N/A
532

4. Is there at least one homeless person or formerly homeless person participating in the policy decision-making process regarding projects receiving ESG funds? [McKinney Act, 42 USC 11375(d) and 24 CFR 576.56(b)(1)]

Yes No

5. Are homeless persons, to the extent possible, involved in project development, operations and the provision of supportive services?
[McKinney Act, 42 USC 11375(c) and 24 CFR 576.56(b)(2)]

Yes No

6. For projects serving domestic violence victims, is there evidence to support that the grantee has established written procedures regarding confidentiality of client records and the address/location of any project serving domestic violence victims?
[McKinney-Vento Act, 42 USC 11375(c) and 24 CFR 576.56(a)(2)]

Yes No N/A

7. (a) Does the grantee have a written policy for the termination of beneficiaries? [McKinney-Vento Act, 42 USC 11375(e) and 24 CFR 576.56(a)(3)]

Yes No

(b) If no written guidance is available, interview staff to determine how terminations are handled.

(c) If beneficiaries have been terminated during the program year under review, does a file review indicate that the minimum due process requirements for termination (and, if applicable, the established policy guidance) were followed?
[McKinney-Vento Act, 42 USC 11375(e) and 24 CFR 576.56(a)(3)]

Yes No N/A

533

Match Matrix

In completing the table below, the HUD reviewer should use the Consolidated Annual Performance and Evaluation Report (CAPER) as a basis to review documentation from the grantee or recipient to determine the amount of cash and in-kind resources brought to the grant.

Grant Number: ESG Allocation: $
ESG Match
(List each source of match
separately)
Action Plan
Amount
Pledged
CAPER
Amount
Shown
Final
Documented
Match
CASH/GOVN’T. GRANTS
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $

IN-KIND/SALARIES
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
VOLUNTEERS (@$5/hour)
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTAL MATCH $ $ $

534

2. Does the grantee’s final documented match shown in question 1 above equal or exceed the ESG grant amount?
[24 CFR 576.51 and 24 CFR 91.225(c)(6)]

Yes No

3. Is the documented match shown in question 1 above consistent with the amount shown in the CAPER?
[24 CFR 576.51 and 24 CFR 91.225(c)(6)]

Yes No

4. If the state government grantee claims the $100,000 match exclusion, did it provide documentation of benefit for those subgrantee recipients least able to pay?
[24 CFR 576.51 and 24 CFR 91.225(c)(6)]

Yes No N/A

General Requirements
 Uniform Administrative Requirement. ESG regulations at 24 CFR 576.407(c) require the governmental agencies apply 24 CFR Part 85, except for 24 CFR 85. 24 and 85.42 , and program income is to be used as match under 24 CFR 85.25 (g). The requirements of 24 CFR Part 84 apply to Private Nonprofit subrecipients, except for 24 CFR 84.23 and 84.53 , and program income is to be used as the non -Federal share under 24 CFR

84.24 (b).

 Homeless Participation . Under 24 CFR 576.405 the City is ensure subrecipients provide for the participation of not less than one homeless individual or formerly homeless individual on the Board of Directors or other equivalent policy -making entity, to the extent that the entity considers and makes policies and decisions regarding any facilities, services or other assistance that receives funding under ESG.

 Program Termination. The City will review the termination/denial policy in each subrecipient’s Written Standards to verify that the following minimal components are included: a progressive discipline warning system, written notices, a formal appeal process, and consideration of the appeal by someone not involved in the original ter mination. Staff will also monitor each subrecipient’s compliance with ESG regulations at 24 CFR 576.402 to ascertain whether persons or families receiving assistance who violate program requirements are terminated only in the most s evere cases. The 535

subrecipient is required to terminate assistance in accordance with a formal process that has been established and that recognizes the rights of individuals or families affected.

City staff will monitor compliance with the following area-wide systems coordination requirements pursuant to 24 CFR 576.400.

 Consultation with CoCs. Staff will assist subrcipients are to consult with the CoC to (1) determine how ESG funds will be allocated in that region; (2) identify the performance standards for evaluating the outcomes of projects and activities; and (3) identify the funding, policies and procedures for the administration and operation of the HMIS, if appropriate

 Coordination with Other Targeted Homeless Services. City staff will monitor subrecipients to verify that other programs are targeted to homeless people in the area covered by the CoC to provide a strategic, community-wide system to prevent and end homelessness for that area.

 System and Program Coordination with Mainstream Resources . What steps has y our agency taken to coordinate and integrate ESG -funded activities with mainstream housing, health, social services, employment, education, and youth programs for which families and individuals at risk of homelessness and homeless individuals and families may be eligible.

 Centralized or Coordinated Assessment. Describe how your agency has worked with the CoC to ensure the screening, assessment and referral of participants are consistent with the Written Standards. A Victim Service Provider may choose no t to use the CoC Centralized or Coordinated Assessment System.

 Written Standards .Once the CoC has developed Written Standards in accordance with the requirements outlined in 24 CFR 576.400(e)(2)(3), Each subrecipient is to use the CoC’s Provide a copy of your agency’s Written Standards established and applied for providing ESG assistance

 Participation in HMIS. The subrecipient is to ensure that data on all persons served and all activities assisted under ESG are entered into the applicable community-wide HMIS in the area in which those persons and activities are located, or a comparable database in accordance with HUD’s standards on participation, data collection and reporting under a local HMIS. If the subrecipient is a Victim Service Provid er or a Legal Services Provider, it may use a comparable database that collects client level data over time (i.e., longitudinal data) and generates unduplicated aggregate reports based on the data. Information entered into a comparable database must not be entered directly into or provided to an HMIS.

City staff will monitor each subrecipient’s compliance with other federal and state requirements set forth at 24 CFR 576.406-576.408. 536

 Per 24 CFR 576.407(a), the subrecipient is to adhere to the requirements in 24 CFR Part 5, Subpart A, including the nondiscrimination and equal opportunity requirements at 24 CFR 5.105(a). Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 41701u, an d implementing regulations at 24 CFR Part 135 apply, except that homeless individuals have priority over other Section 3 residents in accordance with 24 CFR 576.405(c).

 Faith-Based Activities. Religious organizations may receive ESG funds if agreeable to providing all eligible ESG activities in a manner that i s in accordance with 24 CFR 576.406. ESG funds may not be used for the rehabilitation of structures if those structures are used f or inherently religious activities. Where a structure is used for both eligible and inherently religious activities, funds may not exceed the cost of those portions of the rehabilitation that are attributable to eligible activities in accordance with the federal cost accounting requirements. Sanc tuaries, chapels, or other rooms the religious congregation uses as its principal pla ce of worship are ineligible for ESG -funded improvements. Disposition of real property after the term of the grant, or any change in use of the property during the term of the grant, is subject to government -wide regulations governing real property disposition (See 24 CFR Parts 84 and 85).

 Organizations that are religious or faith -based are eligible to receive ESG funds but may not engage in inherently religious activities, such as worship, religious instruction, or proselytization as part of the programs or services funded under ESG. Refer to 24 CFR 576.406 for additional details.

 Affirmative Outreach System and Program Coordination with Mainstream Resources . What steps has your agency taken to coordinate and integrate ESG-funded activities with mainstream housing, health, social services, employment, education, and youth programs for which families and individuals at risk of homelessness and homeless individuals and families may be eligible.

 Centralized or Coordinated Assessment. Describe how your a gency has worked with the CoC to ensure the screening, assessment and referral of participants are consistent with the Written Standards. A Victim Service Provider may choose not to use the CoC Centralize d or Coordinated Assessment System.

 Written Standards .Once the CoC has developed Written Standards in accordance with the requirements outlined in 24 CFR 576.400(e)(2)(3), Each subrecipient is to use the CoC’s Provide a copy of your agency’s Written Standards established and applied for providing ESG assistance 

537

 Displacement, Relocation, and Acquisition . In accordance with 24 CFR 576.408, the displacement of persons as a result of a Components/Activities assisted with ESG funds must be provided Relocation Assistance pursuant to the URA and 49 CFR Part 24. Temporary relocation is not permitted. No tenant occupant of housing (a dwelling unit) that is converted into an Emergency Shelter may be required to relocate temporarily for a Component/Activity assisted with ESG funds or be required to move to another unit in the same building/complex. The acquisition of real property, whether funded privately or publicly, for a Component/Activity assisted with ESG funds is subject to the URA a nd the federal government-wide regulations at 49 CFR Part 24, Subpart B. Refer to 24 CFR 576.408 for additional details.

 Match. City staff will monitor matching contributions from each subrecipient to verify that the amount of match equals the amoun t of ESG funds received per 24 CFR 576.201, and that the match sources i nclude any federal source other than the ESG Program, as well as State, local, and private sources (see 24 CFR 576.201).

 Shelter and Housing Standards. City staff will require per 24 CFR 576.403 that any ESG -assisted shelter to meet minimum Habitabilit y Standards. Shelters renovated with ESG funds, are to meet State or local government Safety and Sanitation Standards, as appli cable, include energy-efficient appliances and materials, as well as incorporate lead-based paint remediation and disclosure requirements.

 Recordkeeping and Reporting Requirements. Submit a copy of the written policies and procedures your agency has developed to ensure that ESG funds are used in accordance with requirements at 24 CFR 576.500. In addition, sufficient records mus t be established and maintained to enable HCD and HUD to determine whether ESG requirements are being met. Refer to for additional details. (24 CFR 576.500):
 Homeless status. Follow written intake procedures to ensure compliance with the homeless definit ion in § 576.2. The procedures must require documentation at intake of the evidence relied upon to establish and verify homeless status.  At risk of homelessness status . For each indivi dual or family who receives ESG homelessness prevention assistance, the records must include the evidence relied upon to establish and verify the individual or family's “at risk of homelessness” status. This ev idence must include an intake and certification form that meets HUD specifications.  Determinations of ineligibility. For each individual and family determined ineligible to receive ESG assistance, the record must include documentation of the reason for that determination.
 Annual income. For each program participant who receives homelessness prevention assistance, or who receives rapid re -housing assistance longer than one year
 Income evaluation form completed by the subrecipient; and  Source documents for the assets held by the program participant and i ncome received over the most recent period ( e.g., wage statement, unemployment compensation statement, public benefits statement, bank statement); 538

 If source documents are unobtainable, a written statement by the relevant third party (e.g., employer, government benefits administrator) or the written certification by the subrecipient's intake staff of the oral verification by the relevant third party of the i ncome the program participant received over the most recent period for which representative data is available; or  If source documents and third party verification are unobtainable, the written certification by the program participant of th e amount of income the program participant received for the most recent period representative of the income that the program participant is expected to receive over the 3-month period following the evaluation.  Program participant records. In addition to evidence of homeless status or “at risk of homelessness” status, as applicable, records must be kept for each program participant that document:
 The services and assistance provided to program participant, including the security deposit, rental assistance, and utility p ayments made on behalf of the program participant;
 Compliance with the applicable requirements for providin g services and assistance to t program participant under the program components and eligible activities provisions at § 576.101 through § 576.106, the provision on determining eligibility and amount and type of assistance at § 576.401(a) and (b), and the provision on using appropriate assistance and services at § 576.401(d) and (e); and  Where applicable, compliance with the termination of assistance requirement in § 576.402.  Centralized or coordinated assessment systems and procedures. Documentation evidencing written intake procedures for, the centralized or coordinated assessment system(s) developed by the CoC.  Rental assistance agreements and payments. The records must include copies of all leases and rental assistance agreements for the provision of rental assistance, documentation of payments made to owners for the provision of rental assistance, a nd supporting documentation for these payments, including dates of occupancy by program participants.  Utility allowance. The records must document the monthly allowance for utilities (excluding telephone) used to determine compliance with the rent restriction.
 Shelter and housing standards. Documentation of compliance with the shelter and housing standards in § 576.403, including inspection reports.
 Emergency shelter facilities. The amount and type of assistance provided to each emergency shelter.  Services and assistance provided. Types of essential services, rental assistance, and housing stabilization and relocation services and the amounts spent on these services and assistanc e. Subrecipients that are units of general -purpose local government must keep records to demonstrate compliance with the maintenance of effort requirement, including records of the unit of the general -purpose local government's annual budgets and sources of funding for street outreach and emergency shelter services.  Coordination with CoC and other programs. Document their compliance with the requirements of § 576.400 for consulting with the CoC and coordinating and integrating ESG assistance with programs targeted toward homeless people and mainstream service and assistance programs. 539