181
Planning Commission Reso. No. 2023-18
Exhibit A - Conditions of Approval
COA Number Condition of Approval (COA)/Mitigation Measure Party Responsible for Compliance Timing Verification of Compliance (Initials/Date)
55 In the event of discovery or recognition of any human remains in any location other than a dedicated cemetery, there shall be no further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent remains until the coroner of Monterey County has determined whether the remains are subject to the coroner's authority. This is in accordance with Section 7050.5 of the California Health and Safety Code. If the human remains are of Native American origin, the coroner must notify the Native American Heritage Commission within 24 hours of identification. Pursuant to Section 5097.98 of the Public Resource Code, the Native American Heritage Commission will identify a "Native American Most Likely Descendent" to inspect the site and provide recommendations for the proper treatment or disposition of the remains and any associated grave goods.
Contractor(s), developer(s),
owner/builder(s)
During Construction and Prior to
Final Inspection
56 Prior to final Building Inspection, the decorative fencing proposed for the El Camino Real frontage of 689 El Camino Real, shall be extended along the rear property line to replace the existing chain line fencing. Any gates along these areas shall match the fencing in materials, style, height, and color.
Applicant/owner/developer,
contractor(s)
During Construction and Prior to
Final Inspection
57 The applicant shall submit for Community Development Director review an odor mitigation plan for the indoor cultivation uses. The odor mitigation plan, once approved by the City, shall be implemented to ensure that odors are adequately controlled for the cultivation activities.
Contractor(s), developer(s),
owner/builder(s)
During Construction and Prior to
Final Inspection
58 A final certificate of occupancy shall not be issued until all punch-list items identified by the Building Official and Project Planner during the final inspection are complete and accepted to the satisfaction of the Building Official, final Fire Department approvals have been received, and all project close-out documents required under any development agreement, the City Municipal Code, and these conditions of approval have been received and accepted by the City.
Contractor(s), developer(s),
owner/builder(s)
During Construction and Prior to
Final Inspection
59 The applicant shall underground the overhead utilities along El Camino Real and, as directed by the Public Works Director or City Engineer, the driveway access on the south side of the project site prior to the certificate of occupancy.
Contractor(s), developer(s),
owner/builder(s)
During Construction and Prior to
Final Inspection
60 The proposed onsite bio retention basins will require a post-construction maintenance agreement and inspection reporting be provided to the City on an annual basis.
Contractor(s), developer(s),
owner/builder(s)
During Construction and Prior to
Final Inspection; on-going on
annual basis
61 Prior to obtaining a final certificate of occupancy and within 60 days of issuance of Building permits, the project applicant shall submit for City review and approval an updated Operations Plan and Security Plan reflecting the new operations. Among other updates, the Security Plan shall include information on the fire sprinkler system and on egress for employees and visitors in the event of a fire or other emergency. In addition, the Operations Plan update shall include specifics on commercial trash and recycling pick-up. These plans shall be submitted to the project planner for reviewed by the City’s Interdepartmental Review Team.
Applicant/developer and Soils
Engineer
During Construction and Prior to
Final Inspection
62 All structures and all landscaping, fencing, and other improvements shall adhere to the approved plans, including the final landscape plans, and shall be maintained in good condition as an on-going requirement. Swap-out of materials, colors, and landscaping species shall not occur without prior written City approval. Any deficiencies noted by City staff shall be addressed within 14 days of written notice of non-compliance by the City.
Applicant/owner/developer/contrac
tor(s) Throughout entirety of project
63 Landscaping shall utilize drought tolerant species, water efficient drip or micro-spray irrigation systems, and comply with all water conservation regulations issued by the State Water Resources Control Board. Applicant/owner/developer Throughout entirety of project 64 All landscaping shall be maintained in good condition for the life of the project. Any plants that die or are diseased shall be promptly removed and replaced. Trees and shrubs shall be pruned regularly and kept in good health. Groundcover shall be similarly maintained as needed. Any deficiencies noted by City staff shall be addressed within 15 days of written notice of non-compliance by the City.
Applicant/owner/developer Throughout entirety of project
ONGOING OPERATIONAL CONDITIONS
PRIOR TO FINAL OCCUPANCY
182
Planning Commission Reso. No. 2023-18
Exhibit A - Conditions of Approval
COA Number Condition of Approval (COA)/Mitigation Measure Party Responsible for Compliance Timing Verification of Compliance (Initials/Date)
65 Should the City note or receive complaints of odors associated with the operation of the facility, the applicant shall address odors promptly, within no more than 72 hours. Should City staff determine adjustments to and/or additional measures for the approval odor mitigation plan are necessary to control odors, the applicant shall submit for City review and approval, and shall implement, a revised odor control plan. The submittal of a revised odor control plan shall be done within one week of notification by the City that revisions are needed. The revised plan shall be implemented within two weeks of approval by the City.
Applicant/owner/developer Throughout entirety of project 66 All fire protection and detection systems shall be maintained and inspected annually in accordance with the 2022 California Fire Code as amended by Monterey County.
Applicant/owner/developer Throughout entirety of project 67 Portable fire extinguishers shall be installed and maintained in accordance with §906 of the Fire Code and NFPA
10. (Greenfield City Fire Code §901.11.3.4). Applicant/owner/developer Throughout entirety of project Planning or General Conditions
Public Works or Engineering Conditions
Building Conditions
Police Conditions
Fire Conditions
Conditions Specific to A Certain Project Type
183
Attachment 1 – Exhibit B
Next Wave Phase 2 Project – Plan Sets
The plan sets for the Next Wave Phase 2 Project at 689 El Camino Real are available on the City’s webpage at the following link:
https://ci.greenfield.ca.us/510/Next-Wave-Project
The plan set consists of four separate files:
• Architectural Plans
• Civil Plans
• Landscape Plans
• Rendering
184
Attachment 2
Original Design Review Approval for 689/701 El Camino Real (2017) – Plan Set The plan set for the 2017 Design Review is available on the City’s webpage at the following link:
https://ci.greenfield.ca.us/510/Next-Wave-Project
185
Attachment 3
186
187
AGENDA DATE: September 22, 2023
MEETING DATE: September 26, 2023
TO: Mayor and Councilmembers
PREPARED BY: City Attorney’s and City Manager’s Office
TITLE: ADOPT RESOLUTION APPROVING THE WALNUT PLACE
SUBORDINATION AGREEMENT
RECOMMENDATION:
That the City of Greenfield (“City”) City Council adopt a resolution approving the Walnut Place Subordination Agreement.
BACKGROUND:
In 2005 City Redevelopment Agency was approved to receive a $500,000 loan from the California Housing Finance Agency (“CalHFA”) – Housing Enabled by Local Partnerships (“HELP”) Program and subsequently loaned the funds to Community Housing Improvement Systems and Planning Association Inc. (“CHISPA”) to construct a 40-unit rental development located at 500-538 Twelfth Street (“Walnut Place”).
On December 28, 2005, the City of Greenfield Redevelopment Agency entered into a regulatory agreement with CHISPA whereby CHISPA agreed to lease all 40 apartments exclusively to very low- and low-income tenants for a period of 55 years. Repayment of the loan is not required if CHISPA complies with the conditions of the Regulatory Agreement.
In February 2012, the State of California dissolved all Redevelopment Agencies and appointed Redevelopment Agency Successor Agencies to wrap up Redevelopment Agency business. City Redevelopment Agency business, including the CalHFA HELP loan was taken over by the Successor Agency to the City Redevelopment Agency.
City Council Memorandum
599 El Camino Real Greenfield CA 93937 831-674-5591
www.ci.greenfield.ca.us
188
2 In 2017, the City Redevelopment Successor Agency repaid approximately $650,000 - $500,000 in principle and $150,000 in interest – to CalHFA. The City has, therefore, repaid its obligation to the State. CHISPA maintains its obligation to the City for the full 55 years.
In November 2018, the City executed a Substitution of Trustee and Deed of Full Conveyance whereby the City, rather than the Successor Agency, became trustee for the Walnut Place loan.
In May 2023, CHISPA informed the City that CHISPA would be refinancing its primary loan for the Walnut Place project and asked the City to execute a subordination agreement subordinating the CalHFA HELP loan to the primary loan. The subordination agreement means that the City loan will be a secondary lien to the primary loan.
DISCUSSION:
There is always some risk to subordination because, in the event of default, the primary loan will be paid prior to subordinated loans. CHISPA is refinancing its primary loan for approximately $1.2 million and, as mentioned, the City loan is $500,000.00, which is approximately 30% of the total debt secured by Walnut Place. Also as mentioned, the City loan is not expected to be repaid if Walnut Place exclusively rents all 40 apartments to low and very low-income tenants for 55 years.
The subordination agreement does provide some protections for the City. For example, the City may exercise the remedies of specific performance or injunctive relief at any time in the event of a default under or breach of the terms of the Regulatory Agreement. In addition, the City will receive notice should CHISPA default on the primary loan.
REASON FOR RECOMMENDATION:
Subordination of the loan represents a relatively low risk to the City because the City loan is a relatively small portion of the total Walnut Place debt and because the City loan is only required to be repaid if Walnut Place fails to rent to very low- and low-income tenants for 55 years.
PROPOSED MOTION:
I MOVE ADOPT RESOLUTION #2023-122,A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF GREENFIELD APPROVING THE WALNUT PLACE
SUBORDINATION AGREEMENT.
189
1 RESOLUTION NO. 2023-122
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GREENFIELD
APPROVING THE WALNUT PLACE SUBORDINATION AGREEMENT
WHEREAS, the City of Greenfield (“City”) Redevelopment Agency was approved to receive a $500,000.00 loan from the California Housing Finance Agency (“CalHFA”) – Housing Enabled by Local Partnerships (“HELP”) Program and subsequently loaned the funds to Community Housing Improvement Systems and Planning Association Inc. (“CHISPA”) to construct a 40-unit rental development located at 500-538 Twelfth Street (“Walnut Place”); and WHEREAS, on December 28, 2005, the City of Greenfield Redevelopment Agency entered into a regulatory agreement with CHISPA whereby CHISPA agreed to lease all 40 apartments exclusively to very low- and low-income tenants for a period of 55 years; and WHEREAS, repayment of the loan is not required if CHISPA complies with the conditions of the Regulatory Agreement; and
WHEREAS, in February 2012, the State of California dissolved all Redevelopment Agencies and appointed Redevelopment Agency Successor Agencies to wrap up Redevelopment Agency business; and
WHEREAS, City Redevelopment Agency business, including the CalHFA HELP loan was taken over by the Successor Agency to the City Redevelopment Agency; and WHEREAS, in 2017 the City Redevelopment Successor Agency repaid the loan to CalHFA; and
WHEREAS, in November 2018, the City executed a Substitution of Trustee and Deed of Full Conveyance whereby the City, rather than the Successor Agency, became trustee for the Walnut Place loan; and
WHEREAS, in May 2023, CHISPA informed the City that CHISPA would be refinancing its primary loan for the Walnut Place project and asked the City to execute a subordination agreement subordinating the CalHFA HELP loan to the primary loan.
NOW THEREFORE, BE IT RESOLVED, that the City Council resolves to approve the Walnut Place Subordination Agreement
PASSED AND ADOPTED by the City Council of the City of Greenfield on this twenty-sixth day of September 2023, by the following vote:
190
2 AYES, and all in favor, thereof, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
__________________________
Robert White, Mayor
ATTEST:
__________________________
Ann Rathbun, Clerk
191
Subordination Agreement (Governmental Entity)
Walnut Place Townhomes/Matter No. 16149.001
Prepared by, and after recording
return to:
Higier Allen & Lautin, P.C.
2711 North Haskell Avenue, Suite 2400
Dallas, Texas 75204
Attention: Randall S. Osborne, Esq.
SUBORDINATION AGREEMENT
GOVERNMENTAL ENTITY
192
Subordination Agreement (Governmental Entity) Page 1
Walnut Place Townhomes/Matter No. 16149.001
SUBORDINATION AGREEMENT GOVERNMENTAL ENTITY FOR REGULATORY
AGREEMENT
REGULATORY AGREEMENT ONLY/NO SUBORDINATE DEBT
THIS SUBORDINATION AGREEMENT FOR REGULATORY AGREEMENT (this “Agreement”) is effective as of the _____ day of _______________, 2023, by THE CITY OF greenfield, a public body corporate and politic (“Governmental Entity”), WALNUT PLACE TOWNHOMES, L.P., a California limited partnership (“Borrower”), and COMMUNITY HOUSING IMPROVEMENT SYSTEMS AND PLANNING ASSOCIATION, INC., a California non-profit public benefit corporation (“CHISPA”), for the benefit of JPMORGAN CHASE BANK, N.A., a national banking association (“Lender”).
RECITALS:
A. Simultaneously herewith Lender is making a loan to Borrower in the original principal amount of ____________________________________________ AND 00/100 DOLLARS ($_______________) (“ Loan”) pursuant to a Multifamily Loan and Security Agreement between Lender and Borrower (as supplemented or amended from time to time, the “Loan Agreement”) and evidenced by a Multifamily Note by Borrower to Lender (as supplemented or amended from time to time, the “Note”). The Loan is to be secured by a Multifamily Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing that will be recorded among the records of Monterey County, California (“Official Records”) (as supplemented or amended from time to time, the “Mortgage”) of certain improved real property located at 500 12th St., Greenfield, California 93927, as more particularly described on Exhibit A attached hereto (“Property”). The Loan Agreement, the Note and the Mortgage, together with all other documents executed with respect to the Loan, are hereinafter collectively referred to as the “Loan Documents”.
B. Borrower, CHISPA, and Governmental Entity entered into that certain Regulatory Agreement dated as of _____________________ and recorded on February 3, 2006, as Document No. 2006010622 of the Official Records of Monterey County, California (the “Regulatory Agreement”).
C. As a condition to making the Loan, Lender requires that the lien of the Mortgage be superior to the Regulatory Agreement. Lender will not make the Loan unless Governmental Entity and Borrower agree to subordinate their rights and obligations under the Regulatory Agreement.
D. Borrower and Governmental Entity hereby agree to subordinate the Regulatory Agreement on and subject to the terms, conditions and requirements set forth in this Agreement. 193
Subordination Agreement (Governmental Entity) Page 2
Walnut Place Townhomes/Matter No. 16149.001
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Recitals. The foregoing Recitals are hereby incorporated into this Agreement as agreements among the parties.
2. Subordination. The Governmental Entity hereby agrees that the Regulatory Agreement is and shall at all times continue to be, subordinate, subject and inferior to the rights of Lender under the Loan Documents and that the liens, rights (including approval and consent rights), remedies, payment interests, priority interests, and security interests granted to Governmental Entity pursuant to or in connection with the Regulatory Agreement are hereby expressly acknowledged to be in all respects and at all times, subject, subordinate and inferior in all respects to the liens, rights (including approval and consent rights), remedies, payment, priority and security interests granted to Lender pursuant to the Loan Documents and the terms, covenants, conditions, operations and effects thereof. Notwithstanding the above, Governmental Entity may exercise the remedies of specific performance or injunctive relief at any time in the event of a default under or breach of the terms of the Regulatory Agreement.
3. Financing, Encumbrance and Transfer Approval. Governmental Entity hereby approves and acknowledges the financing evidenced by the Mortgage. Governmental Entity further agrees that any transfer of the Property in connection with foreclosure of the Mortgage or a deed in lieu thereof shall not require Governmental Entity’s consent but shall require notice to Governmental Entity.
4. Intentionally Deleted.
5. Lender Notice of Default. In consideration of Governmental Entity’s agreements contained in this Agreement, Lender agrees that in the event of any default by Borrower under the Loan Documents, Governmental Entity shall be entitled to receive a copy of any notice of default given by Lender to Borrower under the Loan Documents. Neither the giving nor the failure to give a notice to Governmental Entity pursuant to this Section 5 will affect the validity of any notice given by Lender to the Borrower.
6. Governmental Entity Notice of Default. Governmental Entity shall give Lender a concurrent copy of each material notice (including without limitation each notice of default) given by Governmental Entity under or with respect to the Regulatory Agreement, and agrees that Lender, at Lender’s sole election, shall have the right (but not the obligation) to cure any default by Borrower under the Regulatory Agreement on its and/or Borrower’s behalf. Governmental Entity hereby represents that, to the best of its knowledge, there is no current default under the Regulatory Agreement.
7. Governmental Entity's Rights. Except as set forth in Sections 2 and 8 of this Agreement, nothing in this Agreement is intended to abridge or adversely affect any right or obligation of Borrower and/or Governmental Entity, respectively, under the Regulatory Agreement; provided that, (A) the Regulatory Agreement may be released but may not be 194
Subordination Agreement (Governmental Entity) Page 3
Walnut Place Townhomes/Matter No. 16149.001
modified, amended, changed or otherwise altered without the prior written consent of Lender so long as the Loan is secured by the Property and (B) for so long as the Loan is secured by the Property, notwithstanding the terms of the Regulatory Agreement to the contrary, neither Borrower nor Governmental Entity will, without Lender’s prior written consent, exercise or seek any right or remedy under the Regulatory Agreement or available at law or in equity which will or could result in (i) a transfer of possession of the Property or the control, operations or management thereof, (ii) the collection or possession of rents or revenues from or with respect to the Property by any party other than Borrower or Lender; (iii) appointment of a receiver for the Property; (iv) the application of insurance or condemnation proceeds other than as approved by Lender pursuant to the Loan Documents; (v) the removal or replacement of the existing property manager of the Property; (vi) the payment of any monetary damages by Borrower to Governmental Entity; (vii) a material adverse effect on Lender’s security for the Loan.
8. Foreclosure by Lender. In the event of foreclosure, deed in lieu of foreclosure, or similar disposition of the Property by Lender, no consent shall be required from Governmental Entity.
9. Entire Agreement. This Agreement represents the entire understanding and agreement between the parties hereto with regard to the subordination of the Regulatory Agreement to the lien or charge of the Loan Documents, and shall supersede and cancel any prior agreements with regard to this subject matter.
10. Binding Provisions. The covenants and agreements contained in this Agreement shall be binding upon the heirs, personal representatives, successors and assigns of the respective parties to this Agreement.
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
12. Modifications. This Agreement may not be modified orally or in any manner other than by an agreement in writing signed by the parties hereto or their respective successors in interest.
13. Notices. All notices required or permitted hereunder shall be deemed to have been received either (i) when delivered by hand and the party giving such notice has received a signed receipt thereof, or (ii) three (3) days following the date deposited in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed as follows (or addressed in such other manner as the party being notified shall have requested by written notice to the other party):
If to Governmental Entity:
The City of Greenfield
Attention: City Manager
45 El Camino Real
Greenfield, California 93927
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Walnut Place Townhomes/Matter No. 16149.001
If to Lender:
JPMorgan Chase Bank, N.A.
14800 Frye Road
Fort Worth, Texas 76155
Attention: Portfolio Administration
If to Borrower:
Walnut Place Townhomes, L.P.
295 Main Street, Suite 100
Salinas, California 93901
If to CHISPA:
Community Housing Improvement Systems And Planning Association, Inc. 295 Main Street, Suite 100
Salinas, California 939001
Attention:
14. Further Instruments. Each of the parties hereto will, whenever and as often as they shall be requested to do so by the other, execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further instruments and documents as may be reasonably necessary to carry out the intent and purpose of this Agreement, and to do any and all further acts reasonably necessary to carry out the intent and purpose of this Agreement.
15. Valid Authorization. Each person executing this Agreement on behalf of a party hereto represents and warrants that such person is duly and validly authorized to do so on behalf of such party with full right and authority to execute this Agreement and to bind such party with respect to all of its obligations hereunder.
16. Counterparts. This Agreement may be executed in counterparts each of which shall be deemed an original and all of which when taken together constitute one and the same instrument, binding on all of the parties. The signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart.
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE REGULATORY
AGREEMENT FOR THE BENEFIT OF GOVERNMENTAL ENTITY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF THE MORTGAGE.
Remainder of Page Intentionally Left Blank
196
Subordination Agreement (Governmental Entity) Page S-1
Walnut Place Townhomes/Matter No. 16149.001
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year above written.
GOVERNMENTAL ENTITY
THE CITY OF GREENFIELD a public body corporate
and politic
By:
Name:
Title:
APPROVED AS TO FORM:
By: ________________________________
________________, Agency Counsel
Signatures Continue on Following Page
197
Subordination Agreement (Governmental Entity) Page S-2
Walnut Place Townhomes/Matter No. 16149.001
Signatures Continued from Previous Page
BORROWER:
WALNUT PLACE TOWNHOMES, L.P.,
a California limited partnership
By:
Name: Normond V. Kolpin
Title: Chief Financial Officer
Signatures Continue on Following Page
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Subordination Agreement (Governmental Entity) Page S-3
Walnut Place Townhomes/Matter No. 16149.001
Signatures Continued from Previous Page
CHISPA:
COMMUNITY HOUSING IMPROVEMENT
SYSTEMS AND PLANNING ASSOCIATION,
INC., a California non-profit public benefit
corporation
By:
Name:
Title:
Signatures Continue on Following Page
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Subordination Agreement (Governmental Entity) Page S-4
Walnut Place Townhomes/Matter No. 16149.001
Signatures Continued from Previous Page
LENDER:
JPMORGAN CHASE BANK, N.A.,
a national banking association
By:
Name: Jessica Javier
Title: Authorized Officer
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Subordination Agreement (Governmental Entity) Page S-5
Walnut Place Townhomes/Matter No. 16149.001
ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document
STATE OF CALIFORNIA §
§ ss.
COUNTY OF _________ §
On __________ 20___, before me, _________________________________, Notary Public, personally appeared _____________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
NOTARY PUBLIC
State of California
( S E A L ) My commission expires:
201
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Walnut Place Townhomes/Matter No. 16149.001
ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document
STATE OF CALIFORNIA §
§ ss.
COUNTY OF _________ §
On __________ 20___, before me, _________________________________, Notary Public, personally appeared _____________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
NOTARY PUBLIC
State of California
( S E A L ) My commission expires:
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Walnut Place Townhomes/Matter No. 16149.001
ACKNOWLEDGEMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document
STATE OF CALIFORNIA §
§ ss.
COUNTY OF _________ §
On __________ 20___, before me, _________________________________, Notary Public, personally appeared _____________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
NOTARY PUBLIC
State of California
( S E A L ) My commission expires:
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Walnut Place Townhomes/Matter No. 16149.001
ACKNOWLEDGEMENT
STATE OF ________________ §
§
COUNTY OF ______________ §
This instrument was acknowledged before me this _____ day of _______________, 20___, by Jessica Javier, Authorized Officer of JPMORGAN CHASE BANK, N.A., a national banking association, on behalf of said entity.
[SEAL]
Notary Public in and for
the State of __________
Print name of Notary
My Commission Expires:
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Walnut Place Townhomes/Matter No. 16149.001
EXHIBIT A
Legal Description
205
AGENDA DATE: September 22, 2023
MEETING DATE: September 26, 2023
TO: Mayor and Councilmembers
PREPARED BY: City Manager and City Attorney’s Office
TITLE: CONSIDERATION OF WATER RATE INCREASE AND WATER
RATE IMPLEMENTATION
RECOMMENDATION:
That the City of Greenfield (“City”) City Council consider the water rate increase adopted by the City Council on June 27, 2023, and postponed by the City Council on July 25, 2023, and direct staff how to implement the water rate increase.
BACKGROUND AND DISCUSSION:
On June 27, 2022, the City Council approved increases to the City’s water and sewer rates. The approved increase followed the legally required Proposition 218 notification process which requires all parcel owners and all water account holders to be notified at least forty-five (45) days prior to the hearing at which the water rate increase was considered. Recipients of the notice may protest the water rate increase and if fifty percent (50%) plus one parcel owners or account holders protest the rate increase, the rate increase may not be approved. The City mailed 7,172 Proposition 218 notices and received three protest letters and 139 signatures on the petitions submitted.
Another relevant tenant of Proposition 218 is that revenues derived from water rates may not exceed the funds required to provide the water service and may not be used for any other purpose than that for which the rate was imposed.
In early July 2023, as City staff prepared to enter the new water and sewer rates into the City’s utility billing software system, staff discovered that the water account charge of $12.97, approved in 2017, had been charged for one month in 2017 but had not been charged again since.
City Council Memorandum
599 El Camino Real Greenfield CA 93937 831-674-5591
www.ci.greenfield.ca.us
206
2 The reasons that this occurred were investigated by the City Manager and City Attorney and no clear answer has emerged. This error only impacts the water, not the sewer, rates.
Due to this error, on July 25, 2023, the City Council directed staff to postpone the previously adopted rate increase and to conduct research to better understand how this error may or may not have impacted the rate study. Since the July 25, 2023, City Council meeting the City Manager and the City Attorney have met with the rate consultant and it has become clear that the error did not impact the 2023 rate study and that the 2023 rates, as adopted, do not exceed the cost to provide water service so they are compliant with Proposition 218. Additionally, the rate consultant explained that the water rates, as adopted, are the rates required to satisfy the water fund’s operational and capital improvement needs over the next five years.
On September 12, 2023, the City Council directed staff to return to a future City Council meeting with more information about the impact to the water fund and the City’s ability to complete water infrastructure projects if the City Council approves a phased approach to the water account charge increase.
ANALYSIS
City staff analyzed the impact of three options to the water fund:
Option 1: Implement the full, previously adopted water rate increase.
The 2023 rate study analyzed the City’s water operation and capital improvement needs for the five years beginning in fiscal year 2022-23 and recommended water rate increases based upon those needs. This is the only option that will raise adequate revenue to complete all the City’s water system projects and maintain day-to-day operations. It is also important to recognize that the price to purchase materials and to construct capital improvements is increasing each year, so it is in the City’s best interest to complete capital projects as early as possible.
City staff understands that the water account charge increase from $0 to approximately $20 per month will be unpopular and difficult for many customers. As such, staff has designed two phased approaches to increasing the water account charge.
Option 2: Implement a water rate increase that starts with the same rate as the ending rate from the previous City Council-approved water rate analysis in 2016 of $12.97 and ending at the same rate as the 2023 study ends in FY26-27.
This option will increase the annual water account charge according to the below table. 2023-24 2024-25 2025-26 2026-27
$12.97 $16.21 $20.27 $24.66
City staff estimates that option 2 will result in $1,379,738 less water revenue over the next four years than Option 1. This means that the City will not be able to fund all the capital improvement projects included in the rate study. Projects that may not be completed are detailed on spreadsheet provided.
207
3 Option 3: Implement a water rate increase that starts at the midpoint between the rate at the end of the previous City Council-approved water rate analysis in 2016 and the City Councilapproved water rate study of 2023.
This option will increase the annual water account charge according to the below table. 2023-24 2024-25 2025-26 2026-27
$17.14 $21.42 $23.45 $24.66
City staff estimates that that option 2 will result in $837,778 less water revenue over the next four years. This means that the City will not be able to fund all the capital improvement projects included in the rate study. Projects that may not be completed are Projects that may not be completed are detailed on spreadsheet provided.
Staff have reviewed data from three studies/documents to analyze the required revenue to adequately update and improve the city’s water system. These three studies include (1) the water rate study that was completed in 2016, (2) the water master plan from 2021, and (3) the most current water rate study that was completed in 2023.
Staff have estimated over the years (starting in FY16-17), that several projects are required to upgrade existing infrastructure throughout the city. Those projects are detailed on the spreadsheet. Very few, if any, of these projects have been completed, so they remain on this schedule. The costs associated with these older projects will undoubtedly have to be reestimated because of inflation over the past 6 years.
Also of significance is the fact that the city has additional funds in an amount more than $4,200,000 in the Water Impact Fund. These funds are collected from new developers and are available to pay for improvements to the water system that are caused by NEW development. As an example, the new water well and tank that is currently being developed. It is being developed because the city needs additional water to provide for recent residential additions.
PROPOSED MOTION OPTIONS:
I MOVE TO ADOPT RESOLUTION #2023-123, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF GREENFIELD APPROVING THE IMPLEMENTATION OF THE POSTPONED 2023-2024 WATER RATE INCREASE WITH OPTION #__ TO INCREASE THE MONTHLY WATER ACCOUNT CHARGE.
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FY16-17 FY17-18 FY18-19 FY19-20 FY20-21 FY21-22 FY22-23 FY23-24 FY24-25 FY25-26 FY26-27 Number of Billed ERUs 4,610 4,735 4,885 5,035 5,185 4,200 4,201 4,259 4,320 4,381 4,443 Monthly Account Charge (passed by CC) $ 10.67 $ 11.20 $ 11.76 $ 12.35 $ 12.97 $ 12.97 $ 19.36 $ 21.30 $ 22.37 $ 23.48 $ 24.66 Projected Monthly Account Revenue $ 590,264 $ 636,384 $ 689,371 $ 746,187 $ 806,993 $ 653,688 $ 975,976 $ 1,088,600 $ 1,159,661 $ 1,234,391 $ 1,314,773 $ 5,773,401 Water Capital Improvement Program
Water Distribution
1-1 Replace 3" and 4" cast iron with PVC (Maple and Palm Ave) 170,000 830,000 1-2 Replace 6" and 8" Asbestos Cement with 12" PVC (Elm Ave) 40,000 220,000 1-3 Replace 4" Asbestos Cement and PVC with 8" PVC and add hydrant at the north end of the street (7th Street) 25,000 135,000 1-4 Replace 4" Asbestos Cement with 8" PVC, add mid-block hydrant, and connect to 12" line in Apple Ave (Larson Lane) 30,000 160,000 2-1 Replace 8" Asbestos Cement with 12" PVC (Elm Ave) 45,000 265,000 2-2 Replace 6" Asbestos Cement with 8" PVC and add two hydrants (one at mid-block and one at end) (8th Street) 20,000 120,000 2-3 Replace 6" Asbestos Cement with 8" PVC (Tom Rogers Cir) 15,000 85,000 2-4 Replace 6" Asbestos Cement with 8" PVC (Renfro Place) 15,000 85,000 2-5 Replace 6" Asbestos Cement with 8" PVC and add hydrant at the end of San Simeon Ct (San Antonio Dr) 50,000 280,000
2-6 Replace 12" PVC with 16" DIP (El Camino Real) 60,000 350,000 350,000 2-7 Oak Tank Maintenance (Re-coating and re-lining of Oak Tank) $ 180,000 2-8 Corporation Tank Maintenance (Re-coating and re-lining of Corporation Yard tank) $ 280,000
2-9 Tank Mixer Equipment Replacement (Replace Mixer Equipment at Oak and Corporation Yard Tanks) $ 40,000
2-10 Oak Tank Seismic Retrofit $ 140,000
3-1 to 3-11 500,000 500,000 250,000 250,000 500,000 500,000 500,000 500,000 500,000 3-1 Replace 3" Cast Iron with 8" PVC 130,000 $ 130,000
3-2 Replace 4" Cast Iron with 8" PVC 335,000 465,000 $ 800,000 3-3 Replace 6" Cast Iron with 8" PVC $ 2,700,000
3-4 Replace 8" Cast Iron with 8" PVC $ 900,000
3-5 Replace 6" Asbestos Cement with 8" PVC $ 2,200,000
3-6 Replace 8" Asbestos Cement with 8" PVC $ 1,600,000
3-7 Replace 10" Asbestos Cement with 12" PVC $ 130,000
3-8 Replace 12" Asbestos Cement with 12" PVC $ 1,900,000 3-9 Replace 16" Asbestos Cement with 16" DIP $ 1,400,000 3-10 Remove or Abandon 6" Asbestos Cement if pipe fails (Apple Ave) $ 25,000 3-11 ?????
Water Supply, Pumping, Storage
1-5 Water Storage Tank and Booster Station 300,000 1,800,000 $ 2,800,000 1-6 Water Supply Well 500,000 2,000,000 $ 2,450,000
1-7 Tank Safety Tie-Offs $ 7,000
Total CIP Budget 635,000 1,335,000 745,000 965,000 2,755,000 2,550,000 720,000 635,000 840,000 850,000 850,000 12,880,000 Future Projects
F-1 Replace 10" Asbestos Cement with 12" PVC. Triggered by development of parcels zoned for industrial facilities (Elm Ave) $ 160,000 F-2a Replace 8" and 12" PVC and 6" Cast Iron with 16" DIP. Triggered by development of parcels zoned for industrial facilities (Oak Ave) $ 1,000,000 F-2b Replace 8" and 12" PVC and 6" Cast Iron with 16" DIP. Triggered by development of parcels zoned for industrial facilities (3rd Street) $ 200,000 F-3 Replace 12" PVC with 16" DIP. Triggered by development of parcels zoned for industrial facilities (ECR Industrial) $ 450,000 F-4 Replace 6" Asbestos Cement with 8" PVC. Triggered by development of parcels zoned for industrial facilities (ECR) $ 50,000 F-5 Corporation Yard 1.5M gallon water tank $ 2,100,000 Capital PAYGO per 2023 rate study 1,575,000 1,650,373 1,686,623 1,745,367 1,789,020 8,446,383 $ (2,672,982)
FY22-23 FY23-24 FY24-25 FY25-26 FY26-27
Amount of revenue
less than 2023 rate
study estimate
Amount of
revenue less
than Option 1
NOTES: Option 1 $ 21.30 $ 22.37 $ 23.48 $ 24.66
Items in blue are from the 2016 water rate study $ 907,167 $ 1,159,661 $ 1,234,391 $ 1,314,773 $ 4,615,991 $ (1,157,410) $ - Items in green are from the 2023 water rate study only 10 months 5.0% 5.0% 5.0% Items in peach (orange) are from the 2021 water master plan Items in yellow are potential monthly connection charges to consider Option 3 $ 17.14 $ 21.42 $ 23.45 $ 24.66 $ 729,780 $ 925,290 $ 1,027,499 $ 1,095,644 $ 3,778,213 $ (1,995,188) $ (837,778) Total CIP anticipated by 2016 rate study $ 12,880,000 only 10 months 25.0% 9.5% 5.1% Total CIP anticipated by 2023 rate study $ 8,446,383 (ONLY up to FY26-27) Total CIP anticipated by 2021 water master plan $ 21,032,000 Option 2 $ 12.97 $ 16.21 $ 20.27 $ 24.66 Total future CIP anticipated by 2021 water master plan $ 3,960,000 $ 552,392 $ 700,380 $ 887,837 $ 1,095,644 $ 3,236,253 $ (2,537,148) $ (1,379,738) only 10 months 25.0% 25.0% 21.7%
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1 RESOLUTION NO. 2023-123
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GREENFIELD IMPLEMENTATION OF THE POSTPONED 2023-2024 WATER RATE INCREASE WHEREAS, the City of Greenfield (“City”) hired a water rate consultant to evaluate the City’s current rates and financial data and to propose new rates, if necessary, that meet the City’s financial and strategic goals; and
WHEREAS, the rate study found that water rates must be increased to raise sufficient revenue to meet the City’s future capital improvement, operational, and reserve fund goals; and WHEREAS, California’s Proposition 218 prohibits water rate revenue from exceeding the funds required to provide water service; and
WHEREAS, in May and June 2023, the City conducted the legally required Proposition 218 public notification process to increase water rates; and WHEREAS, on June 27, 2023, the City Council held a public hearing and voted to increase water rates; and
WHEREAS, in July 2023, City staff discovered an error in the City’s utility billing software system which may have impacted the rate study; and WHEREAS, on July 25, 2023, the City Council resolved to postpone the water rate increase until staff could determine whether the rate study must be amended to comply with Proposition 218; and
WHEREAS, City staff determined that the error did not impact the 2023 rate study and that the 2023 rates, as adopted, do not exceed the cost to provide water service so they are compliant with Proposition 218; and
WHEREAS, the City Council recognizes the importance of maintaining adequate water rate revenue to ensure continued operations, capital improvement maintenance, and fund reserve balances; and
WHEREAS, the City Council also recognizes that increased water rates will adversely impact some water rate customers.
NOW THEREFORE, BE IT RESOLVED, that the City Council resolves to implement the postponed water rate increase according to the schedule in Exhibit A.
PASSED AND ADOPTED by the City Council of the City of Greenfield on this twenty-sixth day of September 2023, by the following vote:
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2 AYES, and all in favor, therefore, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
__________________________
Robert White, Mayor
ATTEST:
__________________________
Ann F. Rathbun, Clerk
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3 EXHIBIT A: WATER ACCOUNT CHARGE RATE SCHEDULE
2023-24 2024-25 2025-26 2026-27
$[AMOUNT] $[AMOUNT] $[AMOUNT] $[AMOUNT]
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MEMORANDUM: September 21, 2023
AGENDA DATE: September 26, 2023
TO: Mayor and City Council
FROM: Ann F. Rathbun, City Clerk
TITLE: ADOPT A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF GREENFIELD MAKING APPOINTMENT TO THE SALINAS
VALLEY SOLID WASTE AUTHORITY (SVSWA)
BACKGROUND:
Former Councilmember Dominguez was appointed the Salinas Valley Solid Waste Authority on July 25, 2023. The following appointment will need to be filled due to his resignation:
SVSWA – Member
Salinas Valley Solid Waste Authority (SVSWA)
SVSWA meets the third Thursday of every month at 6 p.m. in Gonzales.
REVIEWED AND RECOMMENDED:
The City Clerk and City Manager recommend adoption of the attached resolution appointing a member to the SVSWA.
POTENTIAL MOTION:
I MOVE TO ADOPT RESOLUTION #2023-124, A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF GREENFIELD MAKING APPOINTMENT TO THE
SALINAS VALLEY SOLID WASTE AUTHORITY (SVSWA)
City Council Memorandum 599 El Camino Real Greenfield CA 93937 831-674-5591 www.ci.greenfield.ca.us
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RESOLUTION NO. 2023-124
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GREENFIELD MAKING
APPOINTMENT TO THE SALINAS VALLEY SOLID WASTE AUTHORITY (SVSWA) WHEREAS, it is necessary to appoint a representative and alternate to local government boards, commissions, authorities and committees; and
WHEREAS, Council desires to make such appointments in order to have City representation.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Greenfield hereby appoints _________________, member to the Salinas Valley Solid Waste Authority (SVSWA).
PASSED AND ADOPTED by the City Council of the City of Greenfield at a regular meeting duly held on the 26th day of September 2023, by the following vote:
AYES, and in favor thereof, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
_______________________
Robert White, Mayor
Attest:
_________________________
Ann F. Rathbun, City Clerk
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