Grover Beach City Council
April 14, 2025

What is Section 3?
Section 3 is a provision of the Housing and Urban Development (HUD) Act of 1968 that helps foster local economic development, neighborhood improvement, and individual self-sufficiency. The Section 3 program requires that recipients of certain HUD financial assistance, to the greatest extent feasible, provide job training, employment, and contracting opportunities for low- or very low-income residents in connection with projects and activities in their neighborhoods.

HUD funding through its HOME Investment Partnership Assistance (HOME), Community Development Block Grant (CDBG), Housing Opportunities for Persons with AIDS (HOPWA), Emergency Shelter Grants (ESG), and Neighborhood Stimulus Program (NSP) programs. Allocation of the above funds trigger Section 3 requirements whenever the project creates the needs for new employment, contracting, or training opportunities.

Section 3 projects or activities involve housing construction, rehabilitation (including reduction and abatement of leadbased paint hazards), demolition, or other public construction. Section 3 is triggered when housing and community development financial assistance through HUD programs exceeds $200,000. When financial assistance through the Lead Hazard Control and Healthy Homes program exceeds a threshold of $100,000, Section 3 is triggered for that project.

Economic Opportunities Available Under Section 3
Under Section 3, job training, employment, and contracts may be available. Any employment resulting from these expenditures, including administration, management, clerical support, and construction, is subject to compliance with Section 3. Some example opportunities include:

Accounting
Architecture
Appliance Repair Bookkeeping
Bricklaying Carpentry Carpet
Installation Catering Cement/
Masonry Computer/
Information Demolition
Drywall
Electrical
Elevator Construction
Engineering Fencing
Florists
Heating
Iron Works Janitorial
Landscaping Machine
Operation
Manufacturing
Marketing Painting
Payroll Plastering
Plumbing Printing/
Purchasing Research
Surveying Tile setting
Transportation Word
Processing
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Definitions:

Contractor – any entity entering a contract with:
• A recipient to perform work in connection with the expenditure of federal financial assistance or for work in connection with a Section 3 project or
• A subrecipient for work in connection with a Section 3 project.

Construction – the creation of a new or replacement facility, the substantial rehabilitation of an existing facility, or the limited rehabilitation of an existing facility. This includes construction and/or rehabilitation of water and wastewater systems. The cost of acquiring new or replacement equipment may be included in the cost of construction.

Labor Hours – the number of paid hours worked by persons on a Section 3 project.

Low-income person – low-income limits are defined in Section 3(b)(2) of the Housing Act of 1937 and are determined annually by HUD. These limits are typically established at 80 percent of the area median individual income. HUD limits may be obtained from: https://www.huduser.gov/portal/datasets/il.html.

Materials supply contract – a contract entered into solely for the purchase of products or material.

Professional services – non-construction services that require an advanced degree or professional licensing, including but not limited to engineering services, architectural services, legal services, financial consulting, accounting services, and environmental assessment.

Recipient – any entity that receives directly from HUD public housing financial assistance or housing and community development assistance that funds Section 3 projects, including, but not limited to, any State, local government, instrumentality, PHA, or other public agency, public or private nonprofit organization.

Section 3 Business Concern – A business or non-profit business that meets at least one of the following criteria, documented within the last 6-month period:
• At least 51% owned and controlled by low- or very low-income persons; • Over 75% of the labor hours performed for the business over the prior 3-month period are performed by Section 3 workers; or
• A business at least 51% owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

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Section 3 Project – any housing rehabilitation, housing construction, and other public construction project assisted under HUD programs that provide housing and community development financial assistance when the total amount of assistance to the project exceeds $200,000. The threshold is $100,000 where the assistance is from the Lead Hazard Control and Healthy Homes programs, the Lead-Based Paint Poisoning Prevention Act, and the Residential LeadBased Paint Hazard Reduction Act of 1992.

Section 3 Worker – any worker who currently fits, or when hired within the last 5 years fit, at least one of the following categories, as documented:
• The worker’s income for the previous or annualized calendar year is below the income limit established by HUD (the worker is either low- or very low-income)
• The worker is employed by a Section 3 Business Concern • The worker is a YouthBuild participant
Service Area/Neighborhood of the project – an area within 1 mile of the Section 3 project or, if fewer than 5,000 people live within one mile of a Section 3 project, within a circle centered on the Section 3 project that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census.

Subcontractor – any entity (other than a person who is an employee of the contractor) which has a contract with a contractor to undertake a portion of the contractor’s obligation for the performance of work generated by the expenditure of Section 3 Covered Assistance or arising in connection with a Section 3 Covered Project.

Subrecipient – the local government or organization awarded HOME, CDBG, HOPWA, ESG or NSP funds for an activity. The subrecipient may commonly be referred to as the “grantee” or the “community” over the course of the activity.

Targeted Section 3 Worker – any worker who meets at least one of the following criteria:
• Is employed by a Section 3 Business Concern or
• Currently fits or when hired fit at least one of the following categories, as documented within the past 5 years:
- Living within the service area or the neighborhood of the project, as defined in 24 CFR § 75.5 - A YouthBuild participant
Very Low-Income Person – very low-income limits are defined in Section 3(b)(2) of the Housing Act of 1937 and are determined annually by HUD. These limits are typically established at 50 percent of the area median individual income.

HUD income limits may be obtained from:
https://www.huduser.gov/portal/datasets/il.html.

YouthBuild – a community-based pre-apprenticeship program that provides job training and educational opportunities for at-risk youth ages 16-24 who have previously dropped out of high school. The program was created under the Workforce Innovation and Opportunity Act (29 U.S.C. 3226). More information can be found here:
https://www.dol.gov/agencies/eta/youth/youthbuild.

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Section 3 Compliance
HUD’s regulations for implementing Section 3 mandates can be found at 24 CFR Part 75. These administrative rules establish the requirements to be followed to ensure the objectives of Section 3 are met. Federal rules do not require grant recipients to contract or subcontract with a Section 3 business concern, nor do the rules require hiring of Section 3 workers. However, grant recipients must be able to demonstrate that, where possible, contracting, employment, and training opportunities were made available to workers and businesses meeting Section 3 designation criteria.

Applicability and Threshold
Per 24 CFR § 75.3, Section 3 applicability is determined by meeting the requirements of three criteria:

1. The project is funded in whole or in part by HUD Community Planning (CPD) funding.

2. The funding is used for one of the following types of projects:
- Housing rehabilitation (including reduction and abatement of lead-based paint hazards, but excluding routine maintenance, repair, and replacement) - Housing construction
- Other public construction (includes, but not limited to, construction of buildings, facilities, and infrastructure such as water, wastewater system, roadways, and drainage)

3. The total amount of the assistance cost of the project exceeds $200,000, or $100,000 for a lead-based paint project.

If a project does not meet all three of the above criteria, Section 3 is not applicable. Additionally, Section 3 is determined at the project level, which “is the site or sites together with any building(s) and improvements located on the site(s) that are under common ownership, management, and financing”. If a local government or organization undertakes multiple projects that include federal funding, but are unrelated, Section 3 applicability is determined for each project.

Section 3 does not apply to all project types. The following types of projects are specifically exempt from complying with Section 3 requirements:

1. Contracts for materials.

2. Contracts for professional services (engineering, architecture, and non-construction services that require an advanced degree or professional licensing).

3. Procurement of equipment not related to housing rehabilitation, housing construction, or other public facilities construction, including fire trucks, ambulances, etc.

However, recipients who undertake projects that are not subject to Section 3 are encouraged to consider ways to support the purpose of Section 3.

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Section 3 and Targeted Section 3 Workers
To meet the Section 3 reporting requirements, all workers at the project must be classified as one of 3 worker categories – report the most restrictive category that is appropriate for an individual worker:

All individuals performing applicable work / labor hours for the Federally funded project that do not meet one of the Section 3 designations are reported only under the “All Workers” category.

All sub-recipients, contractors, and subcontractors must meet the above requirements, regardless of whether Section 3 language is included in recipient or sub-recipient agreements, programs regulatory agreements, or contracts.

Sub-recipients/Grantees receiving Federal funds must include language applying Section 3 in any agreement or contract for a Section 3 project.
- Section 3 business concerns that provide opportunities to Section 3 workers residing within the sevice area or the neighborhood of the project, and - YouthBuild pograms
Employment, Training, and Contracting Requirements
For qualifying projects that receive federal assistance, Section 3 has requirements pertaining to employment and training.

To the greatest extent feasible, and consistent with existing Federal, state, and local laws and regulations (24 CFR §§ 75.9 & 75.19), recipients covered by this subpart shall ensure that employment and training opportunities in connection with Section 3 projects are provided to Section 3 workers within the metropolitan area (or non-metropolitan county) in which the project is located.

Whenever possible, priority for opportunities and training should be given to:

To the greatest extent feasible, and consistent with Federal, state, and local laws and regulations (24 CFR §§ 75.9 & 75.19), recipients covered in this subpart shall ensure contracts for work awarded for Section 3 projects are provided to business concerns that provide economic opportunities to Section 3 workers residing within the metropolitan area (or non-metropolitan county) in which the project is located.

When feasible, priority for contracting opportunities should be awarded to:

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Criteria for Targeted Section 3 Worker Designation
The Targeted Section 3 Worker is a worker that is:
• Employed by a Section 3 business.
• Currently fits or when hired fit in at least one of the following categories, as documented within the last five years:
- Low- or very low-income worker living within the service area of the project. The service area is within a one-mile radius of the Section 3 project. If fewer than 5,000 people live within that one-mile radius, the circle may be expanded outward until that population is reached. - A YouthBuild participant.

All Targeted Section 3 Workers are also considered Section 3 Workers. When comparing the two definitions above, the only difference between a Section 3 Worker and a Targeted Section 3 Worker lies in how close in proximity the worker resides to the Section 3 project.

The status of workers on the Section 3 project will be determined by one of the following methods:

1. Worker income certification: The use of certification forms provided to contractors and subcontractors working on the project. Each worker on the project must complete the provided certification form to be kept in the grant record for reference when tracking and aggregating labor hours worked. One form will be provided for a Section 3 Worker/ Targeted Worker Certification (pg.21-22).

2. Worker is employed by a Section 3 Business Concern: The contractor or subcontractor can provide documentation that it qualifies as a Section 3 Business Concern (pg.23). All employees of a qualifying business will beconsidered Section 3 Workers.

3. Worker certification of participation in a means-tested program such as public housing or Section 8-assisted housing.
• The worker’s individual income for the previous or annualized calendar year is below the income limit published annually by HUD.

NOTE: Income of family members other than the employee are excluded from this determination. • The worker is employed by a Section 3 business concern. • The worker is a YouthBuild participant.

Criteria for Section 3 Worker Designation
To comply with Section 3 reporting requirements, the grant recipient must determine whether each individual performing construction or administrative work on the project meets the criteria for a Section 3 Worker. A Section 3 Worker is any worker who currently, or when hired by the current employer within the past five years, fits at least one of the following categories:

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4. Certification from a public housing authority (PHA), or the owner or property manager of project-based Section 8-assisted housing, or the administrator of tenant-based Section 8-assisted housing that the worker is a participant in one of their programs.

5. Worker is a YouthBuild participant: Verifiable documentation must be provided by the worker or the employer showing the worker is participating in a YouthBuild program.

6. Employer wage records: The employer can provide certified documentation that the worker’s income from that employer is below the income limit for the corresponding area median income when based on an employer’s calculation of what the worker’s wage rate would translate to if annualized on a full-time basis.

Section 3 Service Area
To correctly identify Targeted Section 3 Workers, you must first confirm the Section 3 Service Area(A service area map is provided on page 30). A Section 3 Service Area for a project is determined as follows:
• Identify the project site. For infrastructure projects, the project site is the area included in the Environmental Review project description. The center point of this project is the basis for the Section 3 Service Area.
• Identify a circle with a one-mile radius, with the project site central point as the origin. • Calculate the population that resides within the one-mile circle. If it is less than 5,000 people (according to the most recent U.S. Census), then aggregate census block group geographies totaling a minimum of 5,000 persons that both:
- Surrounds all components of the project site, AND
- Most closely approximates a circle shape.

Criteria for Section 3 Business Designation
The Section 3 Final Rule has changed the definition of a Section 3 Business Concern to meet one of the following criteria:
• It is at least 51% owned and controlled by low- or very low-income persons; • Over 75% of the labor hours performed for the business over the previous three-month period are performed by Section 3 Workers; or
• It is a business at least 51% owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

Contractors or subcontractors who wish to be identified as a Section 3 Business must complete the Section 3 Business Self-Certification form and provide requested backup documentation. Documentation of Section 3 status can also be met by inclusion on any list or database published by HUD reporting Section 3 status.

Section 3 Business status will be reported once for each contract for services. Once a business is determined to be a Section 3 Business, the designation will remain in effect for the life of the contractor for services. Records supporting this status must be made available upon request to HUD, or other state and federal authorized officials.

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Establishing Section 3 Status
A Section 3 Business Concern Status A Section 3 Worker Status Businesses verify their status as a Section 3 Business
Concern at the time the contract is awarded.

Documentation proving status must be provided within 6
months.

Workers are established as Section 3 Workers or Targeted Section 3 Workers at either the date of initial hire/contract or Employee Certification date.

Once verified, a Section 3 Business Concern maintains its Section 3 status for as long as it continues to meet the definition. (24 CFR § 75.5)
Established Section 3 Workers or Targeted Section 3
Workers may count their labor hours for five years from the date used to establish their status.*
Section 3 defers to local, state, and other federal rules and regulations.
(24 CFR §§ 75.9 & 75.19)
Workers may re-establish their status as a Section 3
Worker or Targeted Section 3 Worker at the end of the
five-year period.
* Do not look back prior to the effective date of the New Rule, November 30,2020.

Determining Income Levels
Low income is defined as 80% or below the median income of that area.

Very low income is defined as 50% or below the median income of that area.

Please see below the current income limits for project location:
- Section 3 Workers = 25% of total labor hours
- Targeted Section 3 Workers = 5% of total labor
hours
Targeted Section 3 Workers are a subset of Section 3 Workers and any labor hours counted toward the total for Targeted Section 3 Workers will also count toward the total for Section 3 Workers.

For construction contractor certified payroll reports, HUD requires the first payroll on which each employee appears to include the employee’s name and an individually identifying number. Afterward, the identifying number does not need to be reported unless it is necessary to distinguish between employees.

NOTE: Section 3 Businesses may only be selected in accordance with procurement standards including price, ability, and willingness to comply with program requirements to be considered the lowest responsible bidders on contracting opportunities. Grant recipients should make every effort to ensure that Section 3 Businesses are able to effectively participate in the opportunity. Contractors and others should direct their efforts to award subcontracting opportunities generated from the expenditure of housing and community development financial assistance to Section 3 Businesses.

Benchmarks and Minimum Numerical Goals
HUD has established benchmarks for labor hours worked for both Section 3 Workers and Targeted Section 3 Workers for qualifying Section 3 projects as part of the revised Section 3 rule:
2024 Section 3 Income Limit
County of: San Luis Obispo 1 Person = Low$71,350 Very Low $44,600 Annualized Income Formula:

Base rate of pay $_______ x2080=_______
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HUD considers all sub-recipients who meet or exceed both benchmarks for Section 3 Workers and Targeted Section Workers to be in compliance. If a sub-recipient is unable to meet the benchmarks, the sub-recipient must report on the qualitative nature of its activities and those its contractors and subcontractors pursued. Such qualitative efforts may, for example, include but are not limited to the following:

1. Engaged in outreach efforts to generate job applicants who are Targeted Section 3 Workers.

2. Provided technical assistance to help Section 3 Workers compete for jobs (e.g. resume assistance, coaching, etc.).

3. Provided training or apprenticeship opportunities.

4. Directed Section 3 Workers to obtain financial literacy training and/or coaching.

5. Assisted or connected Section 3 Workers with assistance in seeking employment by helping them prepare for interviews,connecting residents to job placement services, or pointed them towards job fairs.

6. Provided or referred Section 3 Workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare).

7. Engaged in outreach efforts to identify and secure bids from Section 3 Business Concerns.

8. Hosted job fairs.

9. Divided contracts into smaller jobs to facilitate participation by Section 3 Business Concerns.

10. Provided technical assistance to help Section 3 Business Concerns understand and bid on contracts.

11. Provided application assistance for attendance at a community college, a four-year educational institution, or vocational/technical training.

12. Provided bonding assistance, guarantees, or other efforts to support viable bids from Section 3 Business Concerns.

13. Contacted business assistance agencies, minority contractors’ associations, and community organizations to inform them of contracting opportunities and request their assistance in identifying Section 3 Business Concerns.

14. Provided written notice to all known Section 3 Business Concerns of the contracting opportunities. The notice should be in sufficient time to allow Section 3 Business Concerns to respond to the bid invitation or request for proposal.

15. Used the services and assistance of the U.S. Small Business Administration and the Minority Business Development Agency of the U.S. Department of Commerce (http://www.mbda.gov/) Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D

Reporting
For Section 3 covered contracts, contractors must submit the Section 3 Labor Hours Tracking Form (pg. 28-29) on a weekly basis and the Section 3 Year-End Report should be submitted annually. The information required includes:
• The total number of labor hours worked
• The total number of labor hours worked by Section 3 Workers • The total number of labor hours worked by Targeted Section 3 Workers • The percentage of labor hours worked by Section 3 Workers • The percentage of labor hours worked by Targeted Section 3 Workers • If benchmarks are unmet, qualitative efforts and explanation of those efforts

1. Pay RequestReporting
a. Contractors are required to submit a labor hours report (pg. 28-29) with each payroll.

2. Annual Reporting
a. Once a year, contractors must submit a final Section 3 cumulative report for the program year. b. Upon completion of a project, a final review will be conducted of the project’s overall performance and compliance.
c. The Section 3 data will be submitted to HUD/HCD for the reporting period.

Responsibilities

1. Design and implement procedures to comply with the requirements of Section 3. Create forms and manuals to maintain and verify compliance. Ensure contractor and subcontractor awareness of and compliance with Section 3 benchmarks and responsibilities.

2. Verify Section 3 Workers, Targeted Section 3 Workers, and Section 3 Business Concerns (pg. 21-23).

3. Facilitate compliance among developers and contractors through pre-construction meetings.

4. Provide contractors with resources to locate certified Section 3 Workers and Section 3 Businesses.

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5. Incorporate Section 3 Clause (Form5, pg. 26-27) into all contracts.

6. Review funding applications for Section 3 applicability, capacity, and appropriate planning.

7. Prior to award of construction contract, require submittal of Intent to Comply (pg. 17) and current staff list (Form 2, pg.18) from all contractors scheduled for project.

8. Check scheduled contractors and subcontractors against the federal Debarment list (www.sam.gov).

9. Collect Section 3 Compliance Reports/Labor Hours Tracking Form (pg. 28-29) from all Section 3 Covered Projects.

10. Document files for compliance efforts, including records of job vacancies, solicitation for bids or proposals, selection materials, and contracts.

Subrecipient – Developer – Contractor – Subcontractor Responsibilities Section 3 applies to all projects that are receiving federal funding in excess of $200,000 (or $100,000 for lead-abatement projects). Sub-recipients, developers, contractors, or subcontractors that receive contracts with federal funding are required to comply with the Section 3 regulations. Subrecipients, developers, contractors, and subcontractors are responsible for communicating Section 3 information and regulations to everyone involved in the project.

Responsibilities of the sub-recipient/developer/contractor/subcontractor include the following:

1. Notification of Section 3 opportunity shall be advertised with one or more of the following:
- News paper publication
- Job training and placement agencies
- Previously funded affordable housing sites
- Local union halls
- List of certified Section 3 Workers and Section 3 Businesses - Small business development agencies
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2. Incorporate Section 3 Clause (Form 4, pg. 26-27) into all contracts.

3. Ensure subcontractors are aware of Section 3 requirements and responsibilities.

4. Certify Section 3 Workers, Targeted Section 3 Workers, and Section 3 Business Concerns (See Pages 20).

5. Attend pre-construction meetings.

6. Prior to award of construction contract, submit Intent to Comply (pg. 17) and current staff list (Form 2, pg.18) for Prime Contractor.

7. Submit Section 3 labor hours tracking with each payroll (pg 28-29).

8. Document files for compliance efforts including records of job vacancies, solicitation for bids or proposals, selection materials, and contracts. Maintain records for a minimum of five years.

9. If reporting indicates that the contractor has not met the Section 3 benchmarks described in § 75.23, the contractor must report the qualitative efforts pursued such as engaging in outreach efforts to generate Section 3 Workers, providing training or apprenticeship opportunities, engaging in outreach efforts to identify and secure bids from Section 3 business concerns, and promoting the use of business registries designed to create opportunities for disadvantaged and small businesses.

Complaints
Per §75.33, complaints alleging failure of compliance with Section 3 may report to the HUD program office responsible for the Section 3 project (https://www.hud.gov/), or to the local HUD field office.

HUD Washington
Assistant Secretary, Fair Housing and Equal
Opportunity Office of Economic Opportunity
Room 5100, Dept. of HUD
Region IX HUD Local Field Office
San Francisco Regional Office
One Sansome Street, Suite 1200
San Francisco, CA 94104
415-489-6400
[email protected]
451 Seventh Street, SW
Washington, DC 20410
202-708-1112
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FAQs
Does a business have to be incorporated to be considered a Section 3 eligible business? No. A Section 3 business concern can be any type of business, such as a sole proprietorship, partnership, or a corporation, properly licensed and meeting all legal requirements to perform the contract under consideration.

What recordkeeping responsibilities do contractors and subcontractors have if they receive Section 3 covered contracts? Contractors and subcontractors should maintain and provide any documentation that will assist in demonstrating Section 3 compliance to HUD including documentation that shows hours worked by all workers, Section 3 workers, Targeted Section 3 workers, and any qualitative efforts to comply with Section 3. Examples of documentation can be found in 24 CFR § 75.31 (https://www.ecfr.gov/cgi-bin/retrieveECFR?n=pt24.1.75#se24.1.75_131).

What if my company does not meet all benchmark goals for employment or contracting? If reporting indicates the company has not met the Section 3 benchmarks, the company should report on the qualitative nature of its activities such as those listed on pages 11 of this manual.

Can a nonprofit organization be considered a business concern for the purposes of Section 3? Yes. A nonprofit organization can be a business concern. Nonprofit organizations must meet the criteria of a Section 3 business concern as defined in 24 CFR § 75.5 in order to receive Section 3 preference.

Can contracting with a Minority Business Enterprise (MBE) or a Women Business Enterprise (WBE) count towards Section 3 benchmarks?
It depends. Section 3 is race and gender neutral. Only Minority Business Enterprises (MBEs)/Women Business Enterprises (WBE) that meet the eligibility criteria as a Section 3 business concern set forth in the regulation can be counted towards the Section 3 labor hour calculation.

Do Section 3 requirements apply to material only contracts? No. Section 3 does not apply to material only contracts or those that do not require any labor. For example, a contract for office or janitorial supplies would not be covered by Section 3. In this example, Section 3 would be encouraged, but not required. However, a contract to replace windows that includes the removal of existing windows, and the installation of new windows would be covered due to the involvement of labor.

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Are Section 3 workers or business concerns guaranteed employment or contracting opportunities under Section 3? Section 3 is not an entitlement program; therefore, employment and contracts are not guaranteed. Low- and Very Low-Income individuals and Section 3 business concerns must be able to demonstrate that they have the ability or capacity to perform the specific job or successfully complete the contract that they are seeking.

What documentation must be maintained by contractors and subcontractors certifying that low- and very low-income individuals and business concerns meet the regulatory definitions under Section 3? There are many ways a worker can be certified as either a Section 3 Worker or Targeted Section 3 Worker under 24 CFR Part 75. Please see pages 7-9 of this manual.

Will there be changes to the benchmark requirements?
The Secretary of HUD is required in the Benchmark Notice published in the Federal Register to review and update the Benchmarks by Federal Register no less frequently than once every three years.

If a project is funded with non-HUD assistance, do the requirements of Section 3 still apply? Section 3 applies to projects that are fully or partially funded with HUD financial assistance. Projects that are financed with state, local, or private matching or leveraged funds used in conjunction with HUD funds are covered by Section 3 if the amount of HUD funding for the project exceeds $200,000 (or $100,000 for a lead-abatement project).

Are developers, contractors, and subcontractors required to provide long-term employment opportunities, and not simply seasonal or temporary employment?
Developers, contractors, and subcontractors are required, to the greatest extent feasible, to direct employment opportunities to low- and very low-income persons, including seasonal and temporary opportunities. Benchmark goals include the calculation of all Section 3 Worker and Targeted Section 3 Worker labor hours as a percentage of all labor hours worked on a project. Developers, contractors, and subcontractors are encouraged to provide long-term employment to ensure that they meet the benchmark goals.

Are all public housing residents considered Section 3 Workers regardless of their income? No. To qualify as a Section 3 Worker, an individual must meet one of the following criteria:

1. The worker’s income for the previous or annualized calendar year is below the income limit established by HUD;

2. The worker is employed by a Section 3 business concern; or

3. The worker is a YouthBuild participant.

Do the benchmark requirements only count toward new hires? No. The rule does not apply to only new hires, but if someone is currently on staff and qualifies as a Section 3 resident, they will need to re-certify as either a Section 3 Worker or a Targeted Section 3 Worker under 24 CFR part 75.

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Federal Section 3
FORM 2-List of Permanent Employees
This form is required for all Section 3-triggered projects (over $200,000) and must besubmitted prior to work commencing or with application for funding and again with the final Section 3 compliance report.

Project Name Contract Execution Date
Construction
Start Date Today’s Date
Please list all current permanent employees (both full and part-time) employed by your company (or local/regional office). Use additional sheets as necessary. A computer-generated employee registry can be provided in lieu of this form if it includes the worker’s name, employer, job category, hire date and indicates Section 3/targeted Section 3 status.

No. Name of Worker Employer Job Classification/
Trade
Section 3
Worker
(Y/N)
Targeted
Section 3
Worker Y/N
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
Please note that your business may be eligible for Section 3 Business certification if at least 75% of your labor hours performed on all contracts over the past three-month period were performed by employees who meet one of the following categories below:
• The worker lives within one mile of the Section 3 project (or, if fewer than 5,000 people live within one mile of the Section 3 project, within a circle centered on the Section 3 project that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census); • The worker is a HUD YouthBuild participant; or
• The worker's income for the previous or annualized calendar year is below 80% of the current area median income for the area in which the worker resides. (Use the worker’s annual gross income based on AMI for a single-person household.) HUD income limits can be found at https://www.huduser.gov/portal/datasets/il.html.)

Hire Date
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Qualification Documentation Checklist
Contractors and subcontractors must maintain documentation to ensure the workers meet the definition of a Section 3 Worker or a Targeted Section 3 Worker, at the time of hire or the first reporting period. Please check off documents provided:

For a worker to qualify as a Section 3 Worker, ONE of the following must be maintained:
☐ A worker’s self-certification that their income is below the income limit for the prior calendar year; A worker’s self-certification of participation in a means-tested program such as public housing or Section 8-assisted housing;
Certification from a PHA (Public Housing Authority), or the owner or property manager of project-based Section 8- assisted housing, or the administrator of tenant-based Section 8-assisted housing that the worker is a participant in one of their programs;
An employer’s certification that the worker’s income from that employer is below the income limit when based on the employer’s calculation of what the worker’s wage rate would translate to if annualized on a full-time basis; or An employer’s certification that the worker is employed by a Section 3 business concern.

For a worker to qualify as a Targeted Section 3 Worker, ONE of the following must be maintained:
☐ An employer’s confirmation that a worker’s residence is within one mile of the work site, or if fewer than 5,000 people live within one mile of a work site, within a circle centered on the work site that is sufficient to encompass a population of 5,000 people according to the most recent U.S. Census; An employer’s certification that the worker is employed by a Section 3 business concern; or A worker’s self-certification that the worker is a YouthBuild participant.

A Section 3 business concern means meeting ONE of the following criteria, documented within the last six-month period:
☐ Proof that the business is at least 51 percent owned and controlled by low- or very low-income persons; Proof that over 75 percent of the labor hours performed for the business over the prior three-month period are performed by Section 3 Workers; or
Proof that the business is at least 51 percent owned and controlled by current public housing residents or residents who currently live in Section 8-assisted housing.

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Federal Section 3
FORM 3-DOCUMENTATIONOFQUALITATIVEEFFORTS
This form is required for all Section 3-triggered projects (over $200,000) and must besubmitted with bid or application for funding, as well as with all quarterly or finalcompliance reports that indicate numeric goals were not met. Please fill out this form completely. Attach additional pages if needed.

Project Name Contract Execution Date
Construction
Start Date Today’s Date

1. Describe all efforts made to direct the employment and other economic opportunities generated by HUD financial assistancefor housing and community development programs, to the greatest extent feasible, to Section 3 workers. Attach additional pages if needed.

Attach supporting documentation such as:
• Copies of all publications, notices, pictures of posted notices, and other outreach materials. • List of all Section 3 workers that responded to your outreach efforts (e.g., submitted job applications, phonelogs, etc.); were any of them hired? If not, please explain why. • If not currently hiring and later in the project period end up needing to hire please explain the intended method of filling the position/positions.

2. Describe all efforts made to notify Section 3 businesses of any subcontracting opportunities generated by HUD financial assistancefor this project, to the greatestextent feasible. Attach additional pages if needed.

Attach supporting documentation such as:
• Section 3 Business List used in solicitation.
• List of Section 3 business included in solicitation and documentation of efforts (emails, letters, phone, logs, etc.).
• List of Section 3 businesses that responded to your solicitation and/or outreach efforts; were any of t them hired? If not, pleaseexplain why.
• Copies of all publications, notices, pictures of posted notices, and any other outreach material utilized.

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Federal Section 3
FORM 3-DOCUMENTATION OF QUALITATIVE EFFORTS
(Continued)

3. Describe all additional qualitative efforts made to comply with Section 3 requirements. See below for examples.

Attach all applicable supporting documentation.

4. If there are employment opportunities associated with your project, include a draft of the proposed signage.

Section 3 signage should be posted at the construction site. Signage must be largeenough to be visible from the street. Thesign must (a) identify the name of the project, (b) statethe project is a HUD Section 3 Project, and (c) include the name, phone number and email address of an appropriate point of contact regarding employment opportunities.

Examples of Qualitative Efforts
• Engaged in outreach efforts to generatejob applicants who are Targeted Section 3 Workers. https://northstatejobs.com/post-a-job/
• Provided technical assistanceto help Section 3 Workerscompetefor jobs (e.g. resume assistance,coaching,etc.). • Provided training or apprenticeship opportunities.
• Directed Section 3 Workers to obtain financial literacy training and/orcoaching. • Assisted orconnected Section 3 Workers with assistancein seeking employment by helping them preparefor interviews,connecting residents to job placement services, or pointed them towards job fairs. • Provided or referred Section 3 Workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation,childcare). • Engaged in outreach efforts to identify and secure bids from Section 3 Business Concerns. • Hosted job fairs.
• Divided contracts into smaller jobs to facilitate participation by Section 3 Business Concerns. • Provided technical assistanceto help Section 3 Business Concerns understand and bid on contracts. • Provided application assistancefor attendance at a community college, a four-yeareducational institution, or vocational/technical training.
• Provided bonding assistance, guarantees, or otherefforts to support viable bids from Section 3 Business Concerns. • Contacted business assistance agencies, minority contractors’ associations, and community organizations to inform them ofcontracting opportunities and request their assistancein identifying Section 3 Business Concerns. • Provided written noticeto all known Section 3 Business Concerns of thecontracting opportunities. The noticeshould bein sufficient timeto allow Section 3 Business Concerns to respond to the bid invitation or request for proposal. • Used theservices and assistance of the U.S. Small Business Administration and the Minority Business Development Agency of the U.S. Department of Commerce
https://californiaucp.dbesystem.com/ https://dsbs.sba.gov/search/dsp_dsbs.cfm

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Federal Section 3
Form 4-Section 3 Clause
All Section 3 covered contracts shall include the following clause (referred to as the Section 3 Clause).

A. The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701u (Section 3). The purpose of Section 3 is to ensure that economic opportunities, most importantly employment, generated by certain HUD financial assistance shall be directed to low- and very low-income persons, particularly those who are recipients of government assistance for housing or residents of the community in which the Federal assistance is spent.

B. The parties to this contract agree to comply with HUD's regulations in 24 CFR part 75, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the part 75 regulations.

C. The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference, shall set forth minimum number and job titles subject to hire, availability of apprenticeship and training positions, the qualifications for each; and the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin.

D. The contractor agrees to engage in qualitative efforts including but not limited to:
a. Engaging in outreach efforts to generate job applicants who are Targeted Section 3 Workers. b. Providing training or apprenticeship opportunities.
c. Providing or referring Section 3 Workers to services supporting work readiness and retention (e.g., work readiness activities, interview clothing, test fees, transportation, childcare). d. Engaging in outreach efforts to identify and secure bids from Section 3 business concerns. e. Promoting the use of business registries designed to create opportunities for disadvantaged and small businesses. f. Engaging in outreach and referrals with the state one-stop system of the workforce Innovation and Opportunity Act.

E. The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR part 75, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR part 75. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR part 75.

F. The contractor must meet the requirements of 24 CFR part 75.19, regardless of whether Section 3 language is included in agreements, program regulatory agreements, or contracts. these requirements include:

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D a. Employment and Training
i. To the greatest extent feasible, and consistent with existing Federal, state, and local laws and regulations, contractors covered by this subpart will ensure that employment and training opportunities arising in connection with Section 3 projects are provided to Section 3 Workers within the metropolitan area (or nonmetropolitan county) in which the project is located. ii. Where feasible, priority for opportunities and training should be given to:

1. Section 3 Workers residing within the service area or the neighborhood of the project; and

2. YouthBuild participants.
b. Contracting
i. To the greatest extent feasible, and consistent with existing Federal, state, and local laws and regulations, recipients covered by this subpart shall ensure contracts for work awarded in connection with Section 3 projects are provided to business concerns that provide economic opportunities to Section 3 Workers residing within the metropolitan area (or nonmetropolitan county) in which the project is located.
ii. Where feasible, priority for contracting opportunities should be given to:

1. Section 3 business concerns that provide economic opportunities to Section 3 Workers residing within the service area or the neighborhood of the project; and

2. YouthBuild programs.

F. The contractor will certify that any vacantemployment positions, including training positions, that are filled (1) after the contractor is selected but before the contract isexecuted, and (2) with persons other than those to whom the regulations of 24 CFR part 75 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR part 75.

G. Noncompliance with HUD's regulations in 24 CFR part 75 may result in sanctions, termination of this contract for default, and debarment orsuspension from future HUDassisted contracts.

H. With respect to work performed in connection with Section 3 covered Indian housing assistance, Section 7(b) of the Indian Self-Determination and Education Assistance Act (25 U.S.C. 450e) also applies to the work to be performed under this contract. Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises. Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation ofcompliance with Section 7(b).

J. Contractor will retain all documentation, contracts, and records for a minimum of five years.

Federal Section 3
Form 4-Section 3 Clause
(Continued)
Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Section 3 Process
24 CFR 75
Meeting
Owner/Developer/Contractor attends pre-construction
meeting.

Contract
Contract is granted. Contractors review Section 3 Plan
provided in order to comply with Section 3 regulations.

Clause
Section 3 Clause is incorporated into contract and in all future subcontractor contracts the Owner/Contractor
creates. Contractor ensures all subcontractors are aware of Section 3 requirements and responsibilities.

Advertise & Document
Contractor advertises job opportunities. Contractor posts Section 3 information at job site. Contractor submits all documentation of compliance efforts.

Monthly Reporting
Contractor submits the labor hours tracking form with
each pay request.

Yearly Reporting
Contractor submits Section 3 Summary Report as
requested by HCD.

Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D

Section 3 Service Area Map
Docusign Envelope ID: 8230EFDA-CE56-4741-A83A-7511A941761D Agenda Item No. 5

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Erin Wiggin, Capital Improvement Project Manager Greg Ray, Public Works Director/City Engineer
SUBJECT: Authorization to Purchase Ramona Garden Park Bandshell

RECOMMENDATION
Authorize a purchase order in the amount of $130,533.55 for the bandshell associated with the Ramona Garden Park Rehabilitation Project, Phases 1 and 2 (CIP 1259).

BACKGROUND
On April 10, 2023, the City Council provided direction for selection of the bandshell proposed in Phase 2 of the Ramona Garden Park Rehabilitation Project, after considering the recommendation of the Parks, Recreation and Beautification Commission. The Council selected a steel frame bandshell with a curved roof as shown in Attachment 1. Given the potential lead times for these structures and the City's ability to secure better pricing by purchasing the band shell directly from the vendor now, staff recommends that the City purchase the equipment directly rather than waiting for the contractor to make the purchase.

The City’s purchasing policy requires that the City obtain three quotes from vendors. The City solicited quotations from Park Planet, Cedar Forest Products and RCP Shelters with the design documents based on Council’s selected design. However, given the unique nature of this product, only Park Planet can provide the bandshell that meets the design that Council selected. Therefore, staff recommends the Council authorize the purchase of the bandshell from Park Planet.

FISCAL IMPACT
The cost of this purchase is included in the approved project funding.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Authorize purchase order in the amount of $130,533.55 for the bandshell associated with the Ramona Garden Park Rehabilitation Project, Phases 1 and 2 (CIP 1259); or

2. Do not authorize purchase order and provide alternative direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Attachments

1. Bandshell Rendering

2. Park Planet Quote
COPYRIGHT 2004, ICON SHELTER
SYSTEMS, INC.
.+0%1.0#8'
*1..#0&/+

(:

DISTINCTIVE STEEL SHELTERS
WWW.ICONSHELTERS.COM
*Decorative brick columnsnot included
Attachment 1
Park Planet
a Division of Park Associates, Inc.
415 Elm Street
Red Bluff CA 96080
Quote# Q25-1673
Ramona Garden Park
Bill To: Quote Date: 02/21/2025
City of Grover Beach
154 S 8th Street
Grover Beach CA 93433
United States
Quote Expires: 03/23/2025
Terms: Net 30
Quote Total: $130,533.55
Contact Name Contact Phone Contact Email Sales Rep Sales Rep Email Erin Wiggin +18054734537 [email protected] Kasanna Coulter [email protected] Description Vendor Qty Rate Amount
33' x 16' Custom Steel Shelter
4 baseplate posts per plan
Mega Rib roof panels
T & G roof deck
Includes Rebar Footing Cages and Threaded
Rods
1 $117,732.00

FREIGHT
Custom Canopies Freight Custom Canopies Intl. 1 $2,500.00 $2,500.00 NOTES
Equipment only. Installation to be supplied by
others.

Offloading & storage of equipment is the
customer's responsibility. For most products a
forklift rated for 5000lbs or more is recommended.

Subtotal $120,232.00
Tax Total (%) $10,301.55
Total $130,533.55
Attachment 2
Park Planet
a Division of Park Associates, Inc.
415 Elm Street
Red Bluff CA 96080
Quote# Q25-1673
Ramona Garden Park

A PURCHASE ORDER OR SIGNED CHANGE ORDER MUST BE RECEIVED BEFORE ADDITIONAL EQUIPMENT, INSTALLATION, OR SERVICES CAN PROCEED. IF PAYING BY CREDIT CARD, A SURCHARGE WILL BE ASSESSED ON PAYMENT AMOUNT FOR 3.5% VISA/MC OR 5% AMEX.

Printed Name:__________________________________________ Title:_________________________________ Authorized Signature: __________________________________________ Date:______________________________ **Purchasing agent who is authorized to enter into binding agreement for quoted entity. **By signing this quote, I have read and agree to the quote Terms & Conditions listed below, on the following page.

Park Planet
a Division of Park Associates, Inc.
415 Elm Street
Red Bluff CA 96080
Quote# Q25-1673
Ramona Garden Park

TERMS & CONDITIONS

1. General NotesAssembly, Installation and Offloading NOT included unless otherwise noted.

Payment and Performance bonds, Builder’s Risk and special insurance NOT included unless stated and quoted.

Customer responsible for quantities and model numbers. Revised quote needed if quantities revised.

2. Payment / OrderingCredit terms specific to each customer. See terms in upper right corner of Park Planet quotes..

Purchase orders or purchase contracts are needed to order. If none available, a signed Park Planet quote may be used in lieu of a formal PO.

All past due accounts subject to 1 ½ % monthly finance charge. In the event legal action is required to effect collection, venue shall be Red Bluff, CA.

3. Shipping / UnloadingShipped by Common Carrier – Customer will need 2 to 4 people to unload. Liftgate NOT included unless quoted. Items will be boxed and / or stretch wrapped to pallets and customer is responsible for offloading. Delivery Drivers do NOT unload.

IMPORTANT: Customer is responsible for receiving and checking quantities and condition at time of delivery Please note any shortages or damages on delivery copy.

Notwithstanding anything to the contrary in any Contract Documents, Customer understands that estimated shipment times for materials are an estimate only.

We have no control over shipment dates. We thus make no guarantee to Owner or Customer regarding the projected shipment dates for materials and shall not be liable for any loss caused by the timing of shipments.

4. Engineered Wood Fiber
Customer to provide access for Engineered Wood Fiber delivery with tractor truck and 53’ trailer.

Compaction of the Engineered Wood Fiber is NOT included in the installation cost, if desired, please request an updated proposal.

5. General Notes for Purchased Installation
Installation does NOT include ground preparation, excavation, safety surfacing, and/or safety surfacing borders, prep work, flat work, grading, rerouting of water, electric, drainage or sprinkler lines unless otherwise noted in the proposal.

Demo of existing equipment or safety surfacing is NOT included unless otherwise stated in the proposal.

ROCK CLAUSE: Pricing is based on normal soil conditions which would allow an auger on a tractor to dig footings. If rocks/boulders interfere with the progress of the excavation, additional fees may apply.

ACCESS CLAUSE: Installation based on clear access to area. Crane service is NOT included. Customer to provide access for bobcat to work area, bobcat will be provided by the installer. Minimum access shall be 7’ wide and 7’ high. If adequate access is not provided additional charges may apply and repairs to landscape and irrigation may be required. Customer is responsible for any repairs to landscape if proper access is not provided.

UTILITY CLAUSE: Unless stated in writing in the quote proposal, installation does not include marking of utilities by Dig Alert or other similar entities. Customer can, however, call Dig Alert directly. Dig Alert CANNOT locate any private lines, PVC or plastic water lines. Installation does NOT include repair or relocating any underground utilities, such as drainage, irrigation, live water lines, main low voltage lines, gas, electrical, communication, or sewer etc.

Customers responsibility to provide locations of any utilities prior to commencement of work.

Customer is responsible for all landscape repairs such as, but not limited to damaged trees, bushes, lawn, curbing, sidewalks and/or asphalt paving caused by materials truck and/or 2ton bobcat needed to complete project.

6. Temporary Fencing
Security guards and/or temporary fencing to prevent injuries, vandalism and/or accidental damage to install area or to the rubberized surface while it sets is NOT included unless noted on quote. If desired, the installers can put up caution tape, but Temporary Fencing is recommended. Although the fencing, if provided, is intended to provide this security, the overall security of the property is ultimately the responsibility of customer. We are not responsible for any vandalism or injuries even with the provision of the fencing.

7. ADA Access
Play Equipment MUST be installed over an impact absorbing surface such as ADA compliant Engineered Wood Fiber or Rubber Surfacing. If not quoted, please call for details.

This area is NOT ADA compliant without the installation of compliant surfacing and an accessible route up to and into the playground area. Please call for details.

8. Poured in Place Rubber Surfacing
Rubber Surfacing cannot be installed during extreme weather conditions and may not be installed if rain or frost is forecasted during 48-72 hr. cure time. 24 Hour Manned Security is NOT included in Park Planet quotes.

9. Shade Shelters (non DSA)
Shade Shelter installation price EXCLUDES – unless otherwise stated in this quote engineering, drawings, calculations, permits, permit submittal, site plans, special inspections, soil reports, impact fees, special assessment fees. Customer is responsible for any and all of these items if required by the City/County.

PLEASE NOTE: Shade Orders are NOT released into production until permit is issued! Shade Shelter installation price EXCLUDES concrete pad, footings, masonry columns, electrical wiring and lights unless otherwise noted.

10. Shade Shelters (DSA)
Fabrication cannot begin until AFTER DSA approval by your architect DSA in-plant Welding Inspector to be hired by the School District. Welding Inspector fee has NOT been quoted.

School District / Architect responsible for submission of plans to DSA for DSA approval Pricing does NOT include footings, steel cages, anchor bolts, or erecting of shade shelter unless otherwise noted.

11. Prevailing Wages – assumed and quoted unless specifically excluded due to private works.

Park Planet does not meet the Skilled & Trained Workforce Requirements and will not participate in same. Park Planet will not sign any PLA's for Union Work and is not signatory to any unions.

Agenda Item No. 6

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Greg Ray, Public Works Director/City Engineer Megan Martin, Community Development Director
SUBJECT: Approval of Final Subdivision Map, Condominium Map, Covenant, Conditions, and Restrictions, and Subdivision Improvement Agreement for Development Application 23-50 (197 West Grand Avenue)

RECOMMENDATION
Approve the Final Subdivision Map (TR-3233) for Development Application 23-50 (197 West Grand Avenue), Condominium Map, Covenant, Conditions, and Restrictions (CC&Rs), Subdivision Improvement Agreement; and authorize the City Clerk to sign and record the map; and direct the City Manager to enter into a Subdivision Improvement Agreement with the applicant (GB Trinity, LLC).

BACKGROUND
In order to subdivide a piece of property for sale, lease or finance, two steps are required. First, the City must approve a tentative map with conditions required for final approval. Once all conditions of approval are satisfied, a final map generally must be approved under the California Subdivision Map Act (Map Act), which provides once a vested tentative subdivision map is approved, that approval “confer[s] a vested right to proceed with development in substantial compliance with the ordinances, policies, and standards [in effect at the time when the map was deemed complete.]”
On September 3, 2024, the Planning Commission approved a Vesting Tentative Condominium Subdivision Map for 197 West Grand Avenue, to construct a new four-story mixed-use development project. The project includes 16 three-story townhouse units, and seven condominium units located above two commercial condominium retail spaces. The project site is located at the northwest corner of West Grand Avenue and North 2nd Street. The approval included requirements to complete frontage improvements along North 2nd Street, Ramona Avenue, and West Grand Avenue. Public improvement plans, including construction of frontage improvements as well as sewer and water services, were reviewed and approved by staff.

Recordation of the Final Map and bonds backed by the developer are required to construct the mixed-use building proposed in the subdivision.

The Map Act only allows an agency to further condition or deny a final map for an approved vesting subdivision map if it determines: (1) the subdivision would place residents of the subdivision or the immediate community in a condition dangerous to their health or safety; or (2) the condition or denial is required to comply with state or federal law. Case law on cities’ approval of final maps characterizes the Council’s action on a final map action as “ministerial”, meaning that the action is not subject to any discretion towards the action on the project.

Staff Report: Final Subdivision Map for Development Application 23-50 Page 2 April 14, 2025
Grover Beach Development Code Section 8.30 – Subdivision Regulations, requires that when the conditions of approval have been met, and when an adequate final subdivision map that is substantially in conformance with the design of the approved tentative map has been submitted, the City Engineer will transmit the map with their approval and certification to the City Clerk (Clerk), awaiting the Council’s approval to record the map. Section 8.30.010 requires the Council to approve the map if it is determined to be in conformance with the City’s Subdivision Regulations and the Map Act.

The applicant has submitted a Final Subdivision Map for Tract Map 3233 for Council action and final acceptance. Staff has reviewed the submittal and found it to be complete, subject to completion and acceptance of certain public improvements defined with the Subdivision Improvement Agreement. Additionally, as part of the review process, staff has reviewed the CC&Rs and deed notifications consistent with project approvals. The Final Map includes reciprocal access easements for public utilities and private access. There is a public dedication for pedestrian access and utilities at the northwest corner of the intersection of North 2nd Street and West Grand Avenue on the proposed map previously accepted in March 2024. The proposed new onsite drive lane within the development is private and will be maintained by the Homeowners Association.

Staff recommends approval of the Final Map based on staff’s review. In addition, since the subdivision Conditions of Approval require public improvements that have not been completed, including the construction of infrastructure that will serve the development, the applicant is required by both the Development Code and the California Subdivision Map Act to enter into a Subdivision Improvement Agreement. Consistent with California Government Code § 66462(a), the subdivider is required to complete the improvements at its expense. The applicant has provided a performance bond agreement that covers the cost of constructing the improvements in the event that the applicant does not complete the subdivision improvements. The estimated cost to complete the public improvements is approximately $828,000 based on an engineer’s cost estimate at prevailing wage.

FISCAL IMPACT
There is no fiscal impact associated with this action.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Approve the Final Subdivision Map for Development Application 23-50 (197 West Grand Avenue), Condominium Map, CC&Rs, Subdivision Improvement Agreement; and authorize the City Clerk to sign and record the map; and direct the City Manager to enter into a Subdivision Improvement Agreement with the applicant (GB Trinity, LLC); or

2. Provide alternative direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Staff Report: Final Subdivision Map for Development Application 23-50 Page 3 April 14, 2025
Attachments

1. Resolution; Exhibit A – Final Map and Condominium Map

2. Subdivision Improvement Agreement

3. Covenant, Conditions, and Restrictions
Attachment 1
RESOLUTION NO. 25-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH, CALIFORNIA APPROVING FINAL TRACT MAP NO. 3233 AND CONDOMINIUM

PLAN AND AUTHORIZING THE CITY CLERK TO RECORD FINAL TRACT MAP NO. 3233 – 197 WEST GRAND AVENUE / TRINITY SUBDIVISION (APPLICANT:

GB TRINITY, LLC)
WHEREAS, an application has been received from Coastal Community Builders (“Applicant”) for recordation of a Final Map No. 3233 and Condominium Plan, for a 18-lot condominium subdivision project with a mixed-use building and residential building comprised of twenty-three (23) 3-bedroom residential condominiums (49,776 square feet) and 3 commercial condominiums development located at 197 West Grand Avenue (APN 060-203-003 and 060-203- 006) in the Coastal Visitor-Serving Zone; and
WHEREAS, the laws and regulations relating to the preparation and public notice of environmental documents, as set forth in the State and local guidelines for implementation of the California Environmental Quality Act (CEQA) have been adhered to as the Planning Commission adopted a Class 32 Exemption on September 9, 2024 and approval of a final map is a ministerial approval which does not require additional CEQA analysis; and, WHEREAS, The Planning Commission of the City of Grover Beach, at a duly noticed Public Hearing held on September 9, 2024, approved Development Application 23-50, a development permit, use permit, and vesting tentative subdivision map; and, NOW THEREFORE, BE IT HEREBY RESOLVED by The City Council of the City of Grover Beach HEREBY makes the following findings and determinations with respect to Final Tract Map 3233.

Section 1. Findings of Final Map Approval. The City Council finds as follows in accordance with the Grover Beach Municipal Code Article IX (Development Code) Chapter 8 and the California Subdivision Map Act:

1. The Final Map is consistent with §66443 of the California Government Code and Section

8.50 of the Grover Beach Development Code.

Fact. The city surveyor and the city engineer have reviewed the final map and all associated documentation and determined that the Final Map meets both State of California requirements and Development Code requirements.

2. The Final Map meets all required conditions of approval to record a final map.

Fact. With the execution of the Subdivision Improvement Agreement, the Final Map meets all required conditions of approval to record a final map. The Final Map contains all required easements and deed notifications shall be recorded concurrently with the map.

3. Since the public improvements have not been completed prior to the acceptance of the Final Map, an improvement agreement between the subdivider and City will be entered into concurrent with recordation of Final Map consistent with §66462 of the California Government Code and Section 8.90.100 through 8.90.170 of the Grover Beach Development Code.

Resolution No. 25-__ Page 2
Fact. The Applicant has signed a Subdivision Improvement Agreement that has been reviewed by city staff. With approval of the final map, the City Council will authorize the City Manager to enter into this agreement for consistency with the California Subdivision Map Act and Development Code.

Section 2. Final Map Approval. The City Council of the City of Grover Beach, on April 14, 2025, resolves to approve Final Map 3233 and Condominium Plan as shown in Exhibits A and B, direct the City Clerk to sign the map for recordation along with all accompanying documents, and authorize the City Manager to enter into a Subdivision Improvement Agreement with the Applicant.

On motion by Council Member __________, seconded by Council Member ________, and on the following roll-call vote, to wit:

AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 14th day of April 2025.

KASSI DEE, MAYOR
Attest:

WENDI B. SIMS, CITY CLERK
Resolution No. 25-__ Page 3
Exhibit A
Final Map Tract 3233
Resolution No. 25-__ Page 4
Exhibit B
Condominium Plan for Trinity, Lot 8 Tract 3233

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Subdivision Agreement 1
Final Map of 3233
RECORDING REQUESTED BY:

City of Grover Beach
WHEN RECORDED MAIL TO:

City Clerk
City of Grover Beach
154 S. Eighth Street
Grover Beach, CA. 93433
PURSUANT TO GOVERNMENT CODE SECTION 6103,

NO RECORDING FEE REQUIRED
In the matter of the Approval of )
The Subdivision Map of ) AGREEMENT AND UNDERTAKING FOR
____________________, ) INSTALLATION AND CONSTRUCTION
) OF SUBDIVISION IMPROVEMENTS
City of Grover Beach )
County of San Luis Obispo )
State of California )

SUBDIVISION AGREEMENT
FINAL MAP OF _______
THIS AGREEMENT is made this ______ day of _____________________ 202__, by and between the City of Grover Beach, a Municipal Corporation, hereinafter referred to as "City," and GB Trinity LLC, a California limited liability company located at 197 W. Grand Avenue, Grover Beach California, hereinafter referred to as "Subdivider" without regard for number or gender, and is effective the date first appearing on the Clerk’s Certification hereafter.

RECITALS
A. Subdivider has filed with City a Final Map proposing the subdivision of land owned by Subdivider, situated in the City of Grover Beach, County of San Luis Obispo, State of California, hereinafter referred to as the “Subject Property”, dividing the real property more particularly described as follows:

Real property in the City of Grover Beach, County of San Luis Obispo, State of California, is described as follows:

PARCEL 1:

PARCEL 2 OF PARCEL MAP GB 00-028, IN THE CITY OF GROVER BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO MAP RECORDED MAY 18, 2000, IN BOOK 54, PAGE 74 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY

RECORDER OF SAID COUNTY AND BY CERTIFICATE OF CORRECTION RECORDED JULY 14, 2000, INSTRUMENT NO. 2000-039308, OFFICIAL RECORDS.

EXCEPTING THEREFROM ALL MINERALS, MINERAL RIGHTS, OIL, GAS AND OTHER

HYDROCARBON SUBSTANCES IN AND UNDER SAID LAND AS RESERVED BY SOUTHERN PACIFIC TRANSPORTATION COMPANY IN DEED RECORDED JUNE 15, 1990, IN BOOK 3527, PAGE 945, OFFICIAL RECORDS.

Attachment 2
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Final Map of 3233
APN: 060-203-006
PARCEL 2:

LOT 6 IN BLOCK 66 OF BECKETT'S RESUBDIVISION OF PART OF THE TOWN OF

GROVER, IN THE CITY OF GROVER BEACH, COUNTY OF SAN LUIS OBISPO, STATE OF CALFIORNIA, ACCORDING TO MAP RECORDED NOVEMBER 9, 1925, IN BOOK 3, PAGE 70 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED IN THE DEED TO THE SOUTHERN PACIFIC COMPANY, A CORPORATION, RECORDED OCTOBER 10, 1894, IN BOOK 23, PAGE 314 OF DEEDS.

APN: 060-203-003
B. City requires as a condition precedent to the acceptance and approval of the Final Map the dedication of such streets, highways, public improvements, public places and easements as are delineated and shown on the Final Map, and deems the same as necessary for the public use, and also requires any and all streets, highways, public improvements, public places and easements delineated and shown on the Final Map, shall be improved by the construction and the installation of the improvements as hereinafter specified.

C. The City Municipal Code of Grover Beach requires Subdivider to enter into this Agreement with City whereby Subdivider agrees to do, perform and complete the work and matters required as Resolution No. 24-15 for Vesting Tentative Map of 3233 dated September 3, 2024 and Special Permit No. 23-50 dated July 31, 2024 issued by City and any amendments thereto, hereinafter referred to as “Conditions of Approval”, within the time hereinafter specified.

D. Subdivider desires to construct the improvements and develop the Subject Property.

E. Subdivider hereby warrants that any and all parties having record title interest in the Final Map which may ripen into a fee have subordinated to this instrument and all such instruments of subordination, if any, are attached hereto and made a part of this instrument.

AGREEMENT
In consideration of the acceptance of the offers of dedication of the streets, highways, public improvements, public places, easements and facilities as shown and delineated on the Final Map, and in consideration of finding of substantial compliance with said Vesting Tentative Map, it is mutually agreed and understood by and between Subdivider and City, and Subdivider and City do hereby mutually agree as follows:
1) The Subject Property is subject to the following:
a) Time for Performance. The work and improvements required by the Conditions of Approval, Public Work Improvements, shall be performed on or before one year of the effective date of this Agreement. However, the Subdivider shall automatically receive one extension of six (6) months to complete the installation of the improvements specified in this Agreement providing the Subdivider complies with all the conditions as follows:
i) At least a minimum of thirty (30) days prior to the expiration of said twelve months, the City Engineer receives a written request from the Subdivider for the six (6) months extension.

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ii) The Subdivider deposits two additional surety bonds with the City of Grover Beach to cover inflation on the uncompleted items: one for performance of the uncompleted improvements and one to insure payment for the additional cost of labor and materials. Each of said surety bonds shall be the amount of five (5) percent of the sum of the costs of all uncompleted items from the list as shown in the Public Works Inspector’s Punch List as of the date of extension as certified by the City Engineer. The surety bonds shall be supplied to the City Engineer within ten (10) days from the date on the written transmittal from the City Engineer to the Developer of the additional surety bond amounts. The additional surety bonds to be approved by the City Engineer and City Attorney as to sufficiency and to form.
iii) If said Improvements are not made to the satisfaction of the City Engineer of the City of Grover Beach within twelve (12) months of the date of this Agreement, or within eighteen (18) months of the date of this Agreement if the conditions for the six (6) months extension have been complied with, the City of Grover Beach may exercise its right to proceed against the bonds or the Parties herein may mutually agree to enter into an amended subdivision agreement wherein Subdivider shall be responsible for issuing new bonds consistent with the bonding requirements of this Agreement. Said bonds shall be subject to approval by the City Attorney.
2) Scope of General Improvements.
a) Incorporation of Improvements. The work and improvements, including those depicted or required on the improvement plans for the Final Map, which may include plans relating to sewer, water, streets, storm drainage, street lighting, landscape and irrigation, grading, traffic signal plans, etc., as well as those required by Conditions of Approval (hereinafter collectively referred to as “Improvements”), are incorporated by reference and made a part of this Agreement. Improvements shall be done in accordance with the construction standards contained in the most current edition of the City of Grover Beach Standards and Specifications, Approved Public Improvement Plans, and any amendments thereto, at the sole cost and expense of Subdivider including all costs of engineering, inspection and testing. The construction cost estimates, and corresponding security requirements for these Improvements, are set forth in Exhibit "A". b) Fire Department Requirements. Issuance of building permits for any structure within the Subdivision shall conform to the requirements of the current edition of the California Fire Code (CFC) as adopted within the City of Grover Beach Municipal Code as may be amended.

Subdivider’s attention is particularly called to Part 9 of Title 24 of the California Code of Regulations, as may be amended, relating to Fire Department access and water supply. No building permit shall be issued until all Fire Department access and firefighting water supply requirements have been met. No occupancy shall be allowed or occur until all Fire Department requirements for occupancy have been met. Authorization by City for occupancy of dwellings located within the Subject Property shall not be construed in any manner to constitute an acceptance and approval of any Improvements required by this Agreement or the Final Map. 3) Scope of Specific Improvements. The required Improvements include the following:
a) See Exhibit B for narrative description of improvements. b) Improvement Plans. Subdivider shall perform and construct all work shown on the approved improvement plans for the Final Map and any amendments thereto as depicted and included within Exhibit “B”, unless explicitly and specifically omitted by this Agreement. This requirement incorporates all work necessary for the required improvements to comply with the City of Grover Beach Standards and Specifications or any standards or policies which may be adopted by Council prior to their acceptance of the required public improvements.

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4) Requirements for Building Permit Issuance.
a) No building permit shall be issued for any lot or unit of the Subject Property until the following minimum required improvements have been fully constructed and have passed inspection to the satisfaction of the City Engineer:
i) Curb and gutter,
ii) Street base rock placed in accordance with the approved improvement plans to provide accessibility for inspectors and emergency responders.
iii) Fully functional water mains, fire hydrants, and service connections, iv) Fully functional sanitary sewer mains and laterals, iv) Fully functional storm drainage lines and facilities, v) All lots graded in accordance with the approved drainage plan, with a letter subject to City Engineer’s approval provided by the Subdivider’s licensed engineer or surveyor verifying same, and
vi) All lot corner monuments set by a licensed surveyor in accordance with the Subdivision Map Act.
b) Subject to completion of the minimum required subdivision improvements listed in subsection (a) above, building permits may be issued on up to 50% of the lots or units of the Subject Property, provided that issuance of said building permits is in accordance with the Planning and Building Department’s policies and procedures in effect at the time the permit is requested. c) Building permits may be issued on up to 75% of the lots or units in the subdivision in accordance with the Planning and Building Department’s policies and procedures in effect at the time the permit is requested, provided that:
i) the minimum required subdivision improvements listed in subsection (a) above have been completed,
ii) an overall subdivision improvement completion percentage of 90% as determined by the City Engineer has been met, and
iii) all public safety items have been completed, including, but not limited to: signage, pavement markings, street lighting, and pond fencing.
d) The final 25% of the building permits for the lots of the Subject Property shall not be issued until a Notice of Completion has been filed for all the required public improvements required by this Agreement including a through c above.
e) If a Notice of Completion has not been filed for the required Improvements within the time limits outlined in this Agreement, no additional building permits shall be issued until said Notice has been filed, regardless of the number of building permits previously issued. f) Building permits shall not be issued in any subsequent phase of a multi-phased subdivision until a Notice of Completion has been filed for the previous phase. g) For purposes of this Agreement, the term “Unit” shall be defined as a separate residence or living space for residential occupancy or a separate area used for one commercial or retail business.

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5) Estimate Reimbursements for Certain Improvements.

Security. Prior to the approval by the Grover Beach City Council of the Final Map, Subdivider shall furnish to City the following improvement securities in the amounts set forth in Exhibit “A”. Bonds shall be by one or more duly authorized corporate sureties licensed to do business in California subject to the approval of City and on forms furnished or approved by City and Certificates of Deposit must be in a form acceptable to the City Attorney. The requirement of a specific amount for improvement security shall not be construed to be a limitation of liability on the part of the Subdivider under this Agreement. Said amount(s) are estimates only of the cost of construction of said improvements. a) Performance Security. The total amount shall equal 100% of the final Cost Estimate, as approved by the City Engineer, to be conditioned upon the faithful performance of this Agreement.

Performance Security shall be in the form of a bond naming the City of Grover Beach as obligee, or a certificate of deposit made payable only to the City of Grover Beach, or cash. With the written authorization of the City, the Performance Security may be released in whole or in part in the following manner:
i) Performance Security, not in excess of 90% of the estimated costs of the individual items of public improvements, may be released, or the required amount of security may be reduced, as work is satisfactorily completed and tentatively accepted by the City. ii) Performance Security will be released in its entirety subject to the City’s recording of the Notice of Completion for the Subdivision public improvements, and the Subdivider’s provision of a Warranty Security to the City in accordance with provision 8) below. b) Payment (Labor and Material) Security. The total amount of the Payment Security shall equal 100% of the estimated costs of the individual items of public improvements, as approved by the City Engineer, to secure payment to all contractors and subcontractors performing work on said Improvements and all persons furnishing labor, materials or equipment to them for said Improvements. Payment Security shall be in the form of a bond naming the City of Grover Beach as obligee, or a certificate of deposit made payable only to the City of Grover Beach, or cash.

Thirty-five (35) days after the City’s recording of the Notice of Completion for the Subdivision public improvements, the Payment Security may be released provided that no claims have been filed. c) Other Improvement Security. Any and all other improvement security as required by Ordinance of the Grover Beach Municipal Code as may be amended.
6) Damage Prior to Final Acceptance. Any damage to the work and improvements constructed pursuant to this Agreement occurring after installation shall be made good to the satisfaction of the City Engineer by Subdivider before any securities are released or the final acceptance of the completed work. 7) Remedy of Defects. Subdivider shall remedy any defective work, labor or materials related to the Improvements, and shall pay City for any damage to the Improvements resulting therefrom, which occur within a period of one year from the date of acceptance of the Improvements by City. 8) Warranty Security. To ensure Subdivider complies with its obligations set forth herein, on acceptance of the required work by the City Engineer, warranty security shall be furnished to, or existing securities retained by, City in the minimum amount identified in Exhibit “A.” The warranty security shall serve as a guarantee and warranty of the work for a period of one year following acceptance against any defective work, labor or materials. Said warranty security shall be in the form of a bond, cash or certificate of deposit made payable only to the City of Grover Beach. The warranty security shall be released, less any amount required to be used for fulfillment of the warranty, one year after final acceptance of the subdivision Improvements.

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9) No Right of Trespass. This Agreement shall in no way be construed as a grant by City of any rights to Subdivider to trespass upon land rightfully in the possession of, or owned by, another, whether such land be privately or publicly owned.
10) Indemnification. Subdivider shall be obligated as follows:
a) To the furthest extent allowed by law, Subdivider shall indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage) incurred by City, Subdivider or any other person, and from any and all claims, demands and actions in law or equity (including attorney's fees, litigation and legal expenses incurred by City or held to be the liability of City, including plaintiff’s or petitioner’s attorney’s fees if awarded, in connection with City’s defense of its actions in any proceeding), arising or alleged to have arisen directly or indirectly out of performance or in any way connected with: (i) the making of this Agreement; (ii) the performance of this Agreement; (iii) the performance or installation of the work or Improvements by Subdivider and Subdivider’s employees, officers, agents, contractors or subcontractors; (iv) the design, installation, operation, removal or maintenance of the work or Improvements; or (v) City’s granting, issuing or approving use of this Agreement.
b) Subdivider’s obligations under the preceding sentence shall apply regardless of whether City or any of its officers, officials, employees or agents are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused solely by the gross negligence, or caused by the willful misconduct, of City or any of its officers, officials, employees, agents or volunteers.
c) If Subdivider should subcontract all or any portion of the work to be performed under this Agreement, Subdivider shall require each subcontractor to indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers in accordance with the terms of paragraphs “a)” and “b)” of this Section. Notwithstanding the preceding sentence, any subcontractor who is a "design professional" as defined in Section 2782.8 of the California Civil Code shall, in lieu of indemnity requirements set forth in paragraphs “a” and “b” of this Section, be required to indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers to the furthest extent allowed by law, from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage), and from any and all claims, demands and actions in law or equity (including reasonable attorney's fees and litigation expenses) that arise out of, pertain to, or relate to the negligence, recklessness or willful misconduct of the design professional, its principals, officers, employees, agents or volunteers in the performance of this Agreement.
d) Subdivider further agrees that the use for any purpose and by any person of any and all of the streets and works and Improvements hereinbefore specified, shall be at the sole and exclusive risk of Subdivider at all times prior to final acceptance by City of the completed street and other improvements thereon and therein. This Section shall survive termination or expiration of this Agreement.
11) Insurance. Prior to any work commencing to construct the improvements referenced in this Agreement, if self-performing the construction of the improvements, Subdivider shall pay for and maintain in full force and effect all policies of insurance described in this Section with an insurance company(ies) either (i) admitted by the California Insurance Commissioner to do business in the State of California and rated not less than "A-VII" in Best's Insurance Rating Guide, or (ii) authorized by City’s Risk Manager. If Subdivider should subcontract all or any portion of the services to be performed under this Agreement, Subdivider shall require each subcontractor to pay for and maintain in full force and effect all policies of insurance described in this Section with an insurance company(ies) either (i) Subdivision Agreement 7
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admitted by the California Insurance Commissioner to do business in the State of California and rated not less than "A-VII" in Best's Insurance Rating Guide, or (ii) authorized by City’s Risk Manager. The subcontractors' certificates and endorsements shall be on file with both the Subdivider and City prior to the commencement of any work by the subcontractor or issuance of any permit for the construction of the improvements. The following policies of insurance are required:
a) COMMERCIAL GENERAL LIABILITY insurance, which shall be at least as broad as the most current version of Insurance Services Office (ISO) Commercial General Liability Coverage Form CG 00 01 and shall include insurance for bodily injury, property damage, and personal and advertising injury with coverage for premises and operations (including the use of owned and nonowned equipment), products and completed operations, contractual liability (including indemnity obligations under this Agreement), with limits of liability of not less than $1,000,000 per occurrence for bodily injury and property damage, $1,000,000 per occurrence for personal and advertising injury and $1,000,000 aggregate for products and completed operations, and $2,000,000 general aggregate.
b) COMMERCIAL AUTOMOBILE LIABILITY insurance, which shall be at least as broad as the most current version of Insurance Services Office (ISO) Business Auto Coverage Form CA 00 01 and shall include coverage for all owned, hired, and non-owned automobiles or other licensed vehicles (Section 1, subsection A.1 entitled “Any Auto”), with combined single limits of liability of not less than $1,000,000 per accident for bodily injury and property damage. c) PROFESSIONAL LIABILITY (Errors and Omissions) insurance appropriate to the respective person's profession (applicable only to those subcontractors who are providing Professional Services to Subdivider), with limits of liability of not less than $1,000,000 per claim/occurrence and $2,000,000 policy aggregate.
d) WORKERS' COMPENSATION insurance as required under the California Labor Code. e) EMPLOYERS’ LIABILITY with minimum limits of liability of not less than $1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000 disease each employee.

Subdivider shall be responsible for payment of any deductibles contained in any insurance policies required hereunder and Subdivider shall also be responsible for payment of any self-insured retentions. If subcontracting all or any portion of the services to be performed under this agreement, the Subdivider’s subcontractor shall be responsible for payment of any deductibles contained in any insurance policies required hereunder and Subdivider shall also be responsible for payment of any self-insured retentions.

The above described policies of insurance shall be endorsed to provide an unrestricted 30 calendar day written notice in favor of City of policy cancellation of coverage, except for the Workers' Compensation policy which shall provide a 10 calendar day written notice of such cancellation of coverage. In the event any policies are due to expire during the completion of the improvements, Subdivider and/or Subdivider’s subcontractor shall provide a new certificate evidencing renewal of such policy(ies) not less than 15 calendar days prior to the expiration date of the expiring policy(ies). Upon issuance by the insurer, broker, or agent of a notice of cancellation in coverage, Subdivider and/or Subdivider’s subcontractor shall file with City a new certificate and all applicable endorsements for such policy(ies).

The General Liability and Automobile Liability insurance policies shall be written on an occurrence form and shall name City, its officers, officials, agents, employees and volunteers as an additional insured. Such policy(ies) of insurance shall be endorsed so Subdivider’s and/or Subdivider’s subcontractor’s insurance shall be primary and no contribution shall be required of City. In the event claims-made forms are used for any Professional Liability coverage, either (i) the policy(ies) shall be endorsed to provide not less than a five (5) year discovery period, or (ii) the coverage shall Subdivision Agreement 8
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be maintained for a minimum of five (5) years following the termination of this Agreement and the requirements of this Section relating to such coverage shall survive termination or expiration of this Agreement. Any Workers’ Compensation insurance policy shall contain a waiver of subrogation as to City, its officers, officials, agents, employees and volunteers.

Subdivider and/or Subdivider’s subcontractor shall have furnished City with the certificate(s) and applicable endorsements for ALL required insurance prior to City's approval of any permit authorizing construction of the improvements. Subdivider shall furnish City with copies of the actual policies upon the request of City’s Risk Manager at any time during the life of the Agreement or any extension, and this requirement shall survive termination or expiration of this Agreement.

The fact that insurance is obtained by Subdivider or his/her/its subcontractors shall not be deemed to release or diminish the liability of Subdivider or his/her/its subcontractors including without limitation, liability under the indemnity provisions of this Agreement. The duty to indemnify City, its officers, officials, agents, employees and volunteers, shall apply to all claims and 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 Subdivider or his/her/its subcontractors. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of Subdivider, its principals, officers, agents, employees, persons under the supervision of Subdivider, vendors, suppliers, invitees, subcontractors, consultants or anyone employed directly or indirectly by any of them.

If at any time during the construction of the improvements prior to final acceptance by the City, Subdivider fails to maintain the required insurance in full force and effect, the City Engineer, or his/her designee, may order that Subdivider, or its contractors or subcontractors, immediately discontinue any further work under this Agreement and take all necessary actions to secure the work site to insure that public health and safety is protected. All payments due or that become due to Subdivider shall be withheld until notice is received by City that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to City. Any failure to maintain the required insurance shall be sufficient cause for City to terminate this Agreement and revoke any approved permit for construction of the improvements. 12) Payment for Materials and Supplies. Subdivider and Subdivider’s contractors and subcontractors shall pay for any materials, provisions, and other supplies used in, upon, for, or about the performance of the Improvements contracted to be done, and for any work or labor thereon of any kind, and for amounts due under the Unemployment Insurance Act of the State of California, with respect to such work or labor, and shall file with City pursuant to Section 3800 of the California Labor Code, as may be amended, a Certificate of Workers Compensation and shall maintain a valid policy of Workers Compensation Insurance for the duration of the period of construction. 13) Compaction and Materials Testing. Compaction and other materials testing performed for determination of compliance with Public Works Standards shall conform to City of Grover Beach Standards and Specifications. Materials testing shall at all times remain under the review of the City Engineer who may determine additional test procedures, and additional locations to be tested. All materials testing for improvement work within the public easements and rights-of-way shall be ordered and paid for by Subdivider.
14) Work by Subdivider. It shall be the responsibility of Subdivider to coordinate all work done by Subdivider’s contractors and subcontractors, such as scheduling the sequence of operations and the determination of liability if one operation delays another. In no case shall representatives of City be placed in the position of making decisions that are the responsibility of Subdivider. It shall further be the responsibility of Subdivider to give the City Engineer written notice not less than two working days in advance of the actual date on which work is to be started. Failure on the part of Subdivider to notify the City Engineer may cause delay for which Subdivider shall be solely responsible.

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15) Inspections. Whenever Subdivider varies the period during which work is carried on each day, Subdivider shall give due notice to the City Engineer so that proper inspection may be provided. If Subdivider fails to duly notify City as herein required, any work done in the absence of the City Engineer will be subject to rejection. Inspection of the Improvements by City shall not relieve Subdivider of any obligation to fulfill the Agreement as prescribed. Defective work shall be made good, and unsuitable materials may be rejected, notwithstanding the fact that such defective work and unsuitable materials have been previously overlooked by the City Engineer or City Inspector and accepted.

City shall inspect all Improvements. All Improvements and materials shall be done, performed and installed in strict accordance with the approved construction plans for said work on file with the City Engineer and City of Grover Beach Standards and Specifications, which said construction plans and Design Guidelines and Public Improvement Standards are hereby referred to and adopted and made by reference a part of this Agreement. In the event there are not any applicable Design Guidelines and Public Improvement Standards for any portion of said Improvements, it is agreed that the same shall be done and performed in accordance with the standards and specifications of the State of California, Division of Highways or County of San Luis Obispo Engineering Standards and Specifications, if applicable. All of said improvements and materials shall be done, performed and installed under the inspection of and to the satisfaction of the City Engineer. 16) Dust Control. Adequate dust control shall be maintained by Subdivider on all streets within and without the subdivision on which work is required to be done under this Agreement from the time work is first commenced in the subdivision until the paving of the streets is completed. "Adequate dust control" as used herein shall mean the sprinkling of the streets with water or the laying of an approved dust palliative thereon with sufficient frequency to prevent the scattering of dust by wind or the activity of vehicles and equipment onto any street area or private property adjacent to the subdivision in strict compliance with all rules and regulations established by the pertinent Air Pollution Control Board.

Whenever in the opinion of the City Engineer adequate dust control is not being maintained on any street or streets as required by this paragraph, the City Engineer shall give notice to Subdivider to comply ("Notice to Comply") with the provisions of this paragraph forthwith. If in the opinion of the City Engineer Subdivider's failure to comply with the provisions of this paragraph is having an immediate and significant impact on the public's health, safety and welfare, the City Engineer may immediately issue a stop work order until City receives reasonable assurances Subdivider shall comply with the provisions of this paragraph forthwith. Such notices, Notice to Comply and stop-work orders may be personally served upon Subdivider. If Subdivider is not an individual, such notices, Notice to Comply and stop-work orders may be served upon (i) any person who has signed this Agreement on behalf of Subdivider; (ii) upon any officer, manager or trustee of Subdivider; or (iii) at the election of the City Engineer, such notices and stop-work orders may be served by mailed to Subdivider at Subdivider’s address on file with the City Engineer. If the City Engineer has issued a Notice to Comply, and Subdivider has failed to commence adequate dust control or fails to maintain adequate dust control at any time thereafter, within twenty-four hours after personal service of the Notice to Comply or within forty-eight hours after the mailing thereof, the City Engineer may, without further notice of any kind, cause any such street or streets to be sprinkled with water, treated with a dust suppression agent or oiled, as the City Engineer may deem advisable to eliminate the scattering of dust, by equipment and personnel of City or by contract as the City Engineer shall determine. City may bill Subdivider for the entire cost to City of such treatment, including costs associated with equipment, material and staff time, as well as any other time or costs associated with the issuance with the elimination of the scattering of the dust including the Notice to Comply. Subdivider shall promptly pay to City the entire billed cost to City of such treatment. When the surfacing on any existing street is disturbed, this surfacing shall be replaced with temporary or permanent surfacing within fourteen calendar days, and the roadway shall be maintained in a safe and passable condition at all times between the commencement and final completion, and adequate dust control shall be maintained during these operations.

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17) Street Surfacing and Underground Facilities. Concrete curbs and gutters, the sanitary sewer system and sewer laterals, together with water mains and appurtenances, storm drainage facilities, gas mains, electrical and communication lines, and their respective service connections, and all other facilities required to be installed underground shall be completed in the streets and alleys before installation of street and alley surfacing.
18) Compliance with Conditions of Approval; Easements. In addition to the Covenants affecting land development, if any, Subdivider shall comply with all Conditions of Approval set forth in the Conditions of Approval for Vesting Tentative Map No. 24-15 dated September 3, 2024 and Special Permit No. 23-50 dated July 31, 2024, and any amendments thereto, not already fully completed or performed as of the date of the approval of the Final Map and which are not otherwise set forth in this Agreement.

Compliance shall include, but is not limited to, any condition to convey to a specific party a fee interest or easement in any parcels in the Subject Property upon Subdivider’s completion of all required improvements to said parcels. Subdivider’s compliance with such conditions shall be completed within a reasonable time as determined by City, in City’s sole discretion, commencing upon the City Engineer sending written notice to Subdivider of the outstanding condition and time in which Subdivider is required to comply, and Subdivider shall timely comply. 19) Compliance with Law. In performing obligations set forth in this Agreement, Subdivider shall comply with all applicable laws, regulations, and rules of all local, state and federal governmental agencies having jurisdiction including, without limitation, applicable federal and state labor standards and environmental laws and regulations. Subdivider shall comply with the codes or ordinances of City including the Grover Beach Municipal Code, City Charter, and Building Codes. 20) Prevailing Wages. Subdivider shall:
a) Pay prevailing wages on those improvements, if any, that are “public works” under Chapter 1, Part 7, Division 2 of the California Labor Code, including Section 1720(a) (collectively referred to as Public Works Improvements); and
b) comply with any applicable provisions of California Labor Code Sections 1720 et seq. and implementing regulations of the Department of Industrial Relations. Subdivider shall or shall cause its contractor and subcontractors to keep and retain such records as are necessary to determine that prevailing wages have been paid as may be required by law. During the construction of the PW Improvements, if any, Subdivider shall, or shall cause its contractor to, post at the Subject Property the applicable prevailing rates of per diem wages. Subdivider shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) City against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Subdivider, its contractors and subcontractors) to pay prevailing wages as required by law or to comply with the other applicable provisions of California Labor Code Sections 1720 et seq. and the implementing regulations of the Department of Industrial Relations in connection with construction of any PW Improvements. 21) Enforcement of Obligations. City may enforce this Agreement in any manner available at law or in equity, including, but not limited to, reversion to acreage. 22) Limitations of Legal Acts. Except as provided by the Section entitled “Attorney’s Fees and Legal Expenses,” in no event shall the City, or its officers, agents or employees, be liable in damages for any breach or violation of this Agreement, it being expressly understood and agreed Subdivider’s sole legal remedy for breach or violation of this Agreement by City shall be a legal action in mandamus, specific performance or other injunctive or declaratory relief to enforce the provisions of this Agreement.
23) Attorney’s Fees and Legal Expenses. If either party is required to commence any proceeding or legal action to enforce or interpret any term or condition of this Agreement, the prevailing party in such Subdivision Agreement 11
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proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legal expenses. For the purposes of this Agreement, “attorneys’ fees” and “legal expenses” include, without limitation, paralegals’ fees and expenses, attorneys, consultants fees and expenses, expert witness fees and expenses, and all other expenses incurred by the prevailing party’s attorneys in the course of the representation of the prevailing party in anticipation of and/or during the course of litigation, whether or not otherwise recoverable as “attorneys’ fees” or as “costs” under California law, and the same may be sought and awarded in accordance with California procedure as pertaining to an award of contractual attorneys’ fees.
24) Obligation Running With Land. This Agreement shall burden the Subject Property described and constitute a covenant running with the land in favor of and for the benefit of City shall be binding upon the successors, transferees, and heirs of Subdivider. Subdivider consents to the recordation of this Agreement with the San Luis Obispo County Recorder.
25) Waiver. The waiver by either party of a breach by the other of any provision of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this Agreement. No provisions of this Agreement may be waived unless in writing and signed by all parties to this Agreement. Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.
26) Successor Statutes Incorporated. All references to a statute or ordinance shall incorporate any or all successor statute or ordinance enacted to govern the activity now governed by the statute or ordinance, noted herein to the extent, however, that incorporation of such successor statute or ordinance does not adversely affect the benefits and protections granted to Subdivider under this Agreement.
27) Incorporation of Attachments: All recitals and attachments to this Agreement, including all Exhibits referenced herein, and all subparts thereto, are incorporated herein by this reference. 28) Time is of the Essence. Time is of the essence of this Agreement, and the same shall bind and inure to the benefit of the parties hereto, their successors and assigns. 29) No Assignment. No assignment of this Agreement or of any duty or obligation of performance hereunder shall be made in whole or in part by Subdivider without the written consent of City. 30) Captions. Section, paragraph and other captions or headings contained in this Agreement are inserted as a matter of convenience and for reference, and in no way define, limit, extend or otherwise describe the scope or intent of the Agreement or any provision hereof and shall not affect in any way the meaning or interpretation of this Agreement.
31) Ambiguities or Uncertainties. Any ambiguities or uncertainties herein shall be equally and fairly interpreted and construed without reference to the identity of the Party or Parties preparing this Agreement, on the express understanding and agreement the Parties participated equally in the negotiation and preparation of the Agreement, or have had equal opportunity to do so. Accordingly, the Parties hereby waive the benefit of California Civil Code §1654 and any successor or amended statute, providing that in cases of uncertainty, language of a contract should be interpreted most strongly against the Party who caused the uncertainty to exist. 32) Severable Provisions. The provisions of this Agreement are severable. The invalidity or unenforceability of any one provision in this Agreement shall not affect the validity or enforceability of the other provisions, which shall remain in full force and effect. 33) Release of Conditions. The conditions and obligations of this Agreement shall remain in full force and effect until such time as City Engineer issues a Notice of Completion finding the conditions and obligations of this Agreement have been fully satisfied and are no longer required for public health and Subdivision Agreement 12
Final Map of 3233
safety reasons and thereafter records such Notice of Completion with the Grover Beach County Recorder.
34) Venue. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, excluding, however, any conflict of laws rule which would apply the law of another jurisdiction. Venue for purposes of the filing of any action regarding the enforcement or interpretation of this Agreement and any rights and duties hereunder shall be San Luis Obispo County, California.
35) Acknowledgement of Content. Each party acknowledges that they have read and fully understand the contents of this Agreement. This Agreement represents the entire and integrated agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be modified only by written instrument duly authorized and executed by both City and Subdivider. * * * *
Subdivision Agreement 13
Final Map of 3233
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement.

CITY OF GROVER BEACH GB Trinity LLC
a Municipal Corporation a California limited liability company By: By:

Matthew Bronson, City Manager Gary H. Grossman, Manager APPROVED AS TO FORM:

Robert Lomeli, City Attorney
By:
(Attach Notary Acknowledgments)
Subdivision Agreement 14
Final Map of 3233
EXHIBIT “A”

IMPROVEMENTS, COST ESTIMATES AND SECURITY REQUIREMENTS

1. Performance Bond $331,200.00

2. Labor and Materials Bond $165,600.00

3. Maintenance-Warranty Bond $331,200.00

4. 5.

6. 7.

8. 9.

10. 11.

Subdivision Agreement 15
Final Map of 3233
EXHIBIT “B”

LIST OF IMPROVEMENT PLANS
All documents listed herein are incorporated by reference into this Agreement as if set out in full and shall become part of the terms and conditions of this Agreement.

Subdivision Agreement 16
Final Map of 3233
CLERK’S CERTIFICATION
State of California )
County of Grover Beach )
On ______________________ before me, ______________________________, 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
______________________________
City Clerk, City of Grover Beach
By _____________________________
Deputy
caov011811
Subdivision Agreement 17
Final Map of 3233
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

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

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

WITNESS my hand and official seal.
___________________________________
Signature of Notary Public
Subdivision Agreement 18
Final Map of 3233

SUBORDINATION
The undersigned as holder of the beneficial interest in and under that certain Deed of Trust recorded on { , 20 }, in the office of the Grover Beach County Recorder, as Document No. { } of which the Deed of Trust in, by and between {Full Name of Trustor}, as Trustor, {Full Name of Trustee}, as Trustee and {Full Name of Beneficiary}, as Beneficiary, hereby expressly subordinates said Deed of Trust and its beneficial interest thereto to the foregoing {Insert full name of Agreement, e.g. Subdivision Agreement for the Final Map of Tract No. **** [including Addendum to Subdivision Agreement for Rights of Way Acquisition].} DATED: ____________________, 201__

BENEFICIARY
By: ________________________________________
Name:______________________________
Title: _______________________________
By: ________________________________________
Name:______________________________
Title: _______________________________
(Beneficiary to print/type document information, Name, Title and attach Notary Acknowledgment)

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Pham Law Group, Inc.
709 E. Colorado Blvd., Suite 200
Pasadena, CA 91101
Attn: Bill Pham, Esq.
______________________________________________________________________________ (Space Above For Recorder’s Use)

DECLARATION OF COVENANTS, CONDITIONS AND

RESTRICTIONS AND RESERVATION OF EASEMENTS
FOR

TRINITY

THIS DECLARATION CONTAINS A BINDING ARBITRATION PROVISION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT. ARBITRATION INCLUDES A WAIVER OF THE CONSTITUTIONAL RIGHT TO A JURY. YOU MUST READ THE

ARBITRATION PROVISION CAREFULLY AND SHOULD CONSULT LEGAL COUNSEL WITH ANY QUESTIONS.

Attachment 3
i

TABLE OF CONTENTS
Page
ARTICLE I ......................................................................................................................................2

1. Definitions............................................................................................................................2

1.1 Architectural Committee or Committee...................................................................2

1.2 Articles.....................................................................................................................2

1.3 Assessment, Annual.................................................................................................2

1.4 Assessment, Capital Improvement...........................................................................2

1.5 Assessment, Reconstruction. ...................................................................................3

1.6 Assessment, Special.................................................................................................3

1.7 Association...............................................................................................................3

1.8 Board or Board of Directors. ...................................................................................3

1.9 Budget......................................................................................................................3

1.10 Bylaws......................................................................................................................3

1.11 City...........................................................................................................................3

1.12 Close of Escrow. ......................................................................................................4

1.13 Commercial Owner..................................................................................................4

1.14 Commercial Unit......................................................................................................4

1.15 Common Area..........................................................................................................4

1.16 Common Expenses...................................................................................................4

1.17 Common Interest Development. ..............................................................................5

1.18 Common Property....................................................................................................5

1.19 Condominium. .........................................................................................................5

1.20 Condominium Building. ..........................................................................................5

1.21 Condominium Plan. .................................................................................................5

1.22 Cost Center...............................................................................................................6

1.23 Cost Center Assessments. ........................................................................................6

1.24 Cost Center Benefits. ...............................................................................................6

1.25 Cost Center Expenses. .............................................................................................6

1.26 Declarant..................................................................................................................7

1.27 Declaration...............................................................................................................7

1.28 Declaration of Alternative Dispute Resolution........................................................7 ii

1.29 Deed of Trust. ..........................................................................................................7

1.30 Drainage and Water Quality Improvements. ...........................................................7

1.31 DRE..........................................................................................................................7

1.32 Exclusive Use Area(s)..............................................................................................8

1.33 Family. .....................................................................................................................9

1.34 FHA..........................................................................................................................9

1.35 FHLMC....................................................................................................................9

1.36 Fiscal Year. ..............................................................................................................9

1.37 FNMA......................................................................................................................9

1.38 GNMA. ....................................................................................................................9

1.39 Governmental Agency. ............................................................................................9

1.40 Improvements. .........................................................................................................9

1.41 Limited Warranty...................................................................................................10

1.42 Maintenance Funds. ...............................................................................................10

1.43 Maintenance Manual..............................................................................................10

1.44 Manager. ................................................................................................................10

1.45 Member, Membership............................................................................................10

1.46 Mortgage................................................................................................................10

1.47 Mortgagee, Mortgagor. ..........................................................................................11

1.48 Notice and Hearing. ...............................................................................................11

1.49 Owner.....................................................................................................................11

1.50 Person.....................................................................................................................11

1.51 Phase or Phase of Project.......................................................................................11

1.52 Project. ...................................................................................................................11

1.53 Property..................................................................................................................12

1.54 Record, File, Recordation. .....................................................................................12

1.55 Residence. ..............................................................................................................12

1.56 Restrictions. ...........................................................................................................12

1.57 Rules and Regulations............................................................................................12

1.58 Separate Interest or Unit. .......................................................................................12

1.59 Subdivision Map. ...................................................................................................12

1.60 Telecommunications Facilities. .............................................................................12

1.61 Telecommunications Services. ..............................................................................13 iii

1.62 Terrace(s). ..............................................................................................................13

1.63 VA..........................................................................................................................13 ARTICLE II...................................................................................................................................13

2. Homeowners Association. .................................................................................................13

2.1 Organization of Association. .................................................................................13

2.2 Duties and Powers..................................................................................................13

2.3 Membership. ..........................................................................................................15

2.4 Transfer..................................................................................................................15

2.5 Classes of Membership..........................................................................................16

2.6 Voting Rights.........................................................................................................16

2.7 Repair and Maintenance by the Association..........................................................17

2.8 Unsegregated Real Property Taxes........................................................................20

2.9 Repair and Maintenance by Owners......................................................................21

2.10 Water Intrusion. .....................................................................................................22

2.11 Mold.......................................................................................................................23

2.12 Use of Agent. .........................................................................................................23 ARTICLE III..................................................................................................................................24

3. Rights in Common Property. .............................................................................................24

3.1 Association Easement. ...........................................................................................24

3.2 Partition..................................................................................................................24

3.3 Members’ Easements in Common Property. .........................................................24

3.4 Extent of Members’ Easements. ............................................................................24

3.5 Delegation of Use. .................................................................................................26

3.6 Waiver of Use. .......................................................................................................26

3.7 Damage by Member...............................................................................................26 ARTICLE IV .................................................................................................................................27

4. Architectural Review Committee. .....................................................................................27

4.1 Members of Committee. ........................................................................................27

4.2 Review of Plans and Specifications.......................................................................27

4.3 Condition of Approval. ..........................................................................................29

4.4 Commencement of Construction. ..........................................................................29

4.5 Meetings of the Committee....................................................................................29

4.6 No Waiver of Future Approvals. ...........................................................................29 iv

4.7 Compensation of Members....................................................................................30

4.8 Correction of Defects.............................................................................................30

4.9 Scope of Review. ...................................................................................................31

4.10 Variances................................................................................................................31

4.11 Appeals. .................................................................................................................32 ARTICLE V...................................................................................................................................32

5. Association Maintenance Funds and Assessments............................................................32

5.1 Personal Obligation of Assessments......................................................................32

5.2 Maintenance Funds of Association........................................................................32

5.3 Purpose of Assessments.........................................................................................33

5.4 Allocation of Assessments.....................................................................................34

5.5 Limitations on Annual and Special Assessment Increases....................................34

5.6 Annual Assessments/Commencement-Collection.................................................36

5.7 Capital Improvement Assessments........................................................................38

5.8 Delinquency. ..........................................................................................................38

5.9 Creation and Release of Lien.................................................................................39

5.10 Enforcement of Liens.............................................................................................40

5.11 Priority of Assessment Lien...................................................................................41 ARTICLE VI .................................................................................................................................42

6. Project Easements and Rights of Entry..............................................................................42

6.1 Easements. .............................................................................................................42

6.2 Rights of Entry.......................................................................................................45 ARTICLE VII................................................................................................................................46

7. Declarant’s Rights and Reservations. ................................................................................46 ARTICLE VIII...............................................................................................................................50

8. Residence and Use Restrictions.........................................................................................50

8.1 Single Family Residences......................................................................................50

8.2 Alterations; Inside and Outside Installations. ........................................................51

8.3 Animal Regulations. ..............................................................................................52

8.4 Antenna..................................................................................................................52

8.5 Business or Commercial Activity. .........................................................................53

8.6 Cannabis.................................................................................................................54

8.7 Tobacco..................................................................................................................54 v

8.8 Common Property Facilities. .................................................................................54

8.9 Drainage.................................................................................................................55

8.10 Exterior Fires; Barbecues.......................................................................................55

8.11 Firearms and Fireworks. ........................................................................................55

8.12 Further Subdivision................................................................................................55

8.13 Garbage/Trash........................................................................................................56

8.14 Hazardous, Toxic, Flammable, Corrosive or Explosive Materials........................56

8.15 Nuisances. ..............................................................................................................56

8.16 Parking and Vehicular Restrictions. ......................................................................57

8.17 Rights of Handicapped...........................................................................................58

8.18 Roof Deck Weight Restrictions. ............................................................................58

8.19 Signs.......................................................................................................................59

8.20 Sound Attenuation. ................................................................................................59

8.21 Terraces..................................................................................................................60

8.22 View Obstructions. ................................................................................................61

8.23 Water Supply System.............................................................................................61

8.24 Window Coverings. ...............................................................................................61

8.25 Post-Tension Concrete System. .............................................................................62 ARTICLE IX .................................................................................................................................62

9. Insurance............................................................................................................................62

9.1 Duty to Obtain Insurance; Types. ..........................................................................62

9.2 Waiver of Claim Against Association. ..................................................................63

9.3 Right and Duty of Owners to Insure......................................................................63

9.4 Notice of Expiration Requirements. ......................................................................64

9.5 Insurance Premiums...............................................................................................64

9.6 Trustee for Policies. ...............................................................................................64

9.7 Actions as Trustee..................................................................................................64

9.8 Annual Insurance Review......................................................................................65

9.9 Required Waiver. ...................................................................................................65 ARTICLE X...................................................................................................................................66

10. Destruction of Improvements. ...........................................................................................66

10.1 Restoration of the Property. ...................................................................................66

10.2 Sale of Property and Right to Partition..................................................................67 vi

10.3 Interior Damage. ....................................................................................................68

10.4 Notice to Owners and Listed Mortgagees..............................................................68 ARTICLE XI .................................................................................................................................68

11. Eminent Domain. ...............................................................................................................68

11.1 Project Condemnation............................................................................................68

11.2 Condemnation of Common Property.....................................................................69

11.3 Condemnation of Separate Interests. .....................................................................69

11.4 Condemnation of Portions of Units. ......................................................................69

11.5 Portions of Awards in Condemnation Not Compensatory for Value of Real Property..................................................................................................................70

11.6 Notice of Owners and Mortgagees. .......................................................................70 ARTICLE XII................................................................................................................................70

12. Rights of Mortgagees.........................................................................................................70 ARTICLE XIII...............................................................................................................................73

13. Duration and Amendment..................................................................................................73

13.1 Duration. ................................................................................................................73

13.2 Amendment............................................................................................................74

13.3 Protection of Declarant. .........................................................................................77 ARTICLE XIV...............................................................................................................................77

14. Enforcement of Certain Bonded Obligations.....................................................................77

14.1 Consideration by Board of Directors. ....................................................................77

14.2 Consideration by the Members. .............................................................................78 ARTICLE XV................................................................................................................................78

15. General Provisions.............................................................................................................78

15.1 Legal Proceedings; Arbitration; Actions Arising From Restrictions.....................78

15.2 Notification of Construction Claims......................................................................79

15.3 Notice to Members of Other Civil Action Against Declarant. ..............................80

15.4 Alternative Dispute Resolution..............................................................................80

15.5 Violation of Restrictions........................................................................................86

15.6 Severability. ...........................................................................................................86

15.7 Interpretation..........................................................................................................87

15.8 Mergers or Consolidations.....................................................................................87

15.9 Use of Common Property. .....................................................................................87 vii

15.10 No Public Right or Dedication...............................................................................87

15.11 No Representations or Warranties. ........................................................................88

15.12 Nonliability and Indemnification...........................................................................88

15.13 Notices. ..................................................................................................................89

15.14 Priorities and Inconsistencies.................................................................................89

15.15 Constructive Notice and Acceptance.....................................................................89

15.16 Declarant Delivery of Documents. ........................................................................90

15.17 Mixed Use Development Disclosure.. ...................................................................91

15.18 Disclosure of Agricultural Operations and Right to Farm.....................................91

15.19 Security. .................................................................................................................92

15.20 Additional Provisions.............................................................................................92 ARTICLE XVI...............................................................................................................................92

16. Covenants in Favor of Local Jurisdiction. .........................................................................92

16.1 Conflict with Other Articles...................................................................................92

16.2 City Rights to Common Areas...............................................................................92

16.3 Amendment.. ..........................................................................................................93 1 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

AND RESERVATION OF EASEMENTS
FOR

TRINITY

THIS DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS AND RESERVATION OF EASEMENTS FOR TRINITY (“Declaration”) is made by GB TRINITY LLC, a California limited liability company (“Declarant”).

P R E A M B L E:

A. Declarant is the owner of that certain real property (“Property”) located in the City of Grover Beach (“City”), County of San Luis Obispo (“County”), State of California, described as follows:

Lots 1 through 18, inclusive, of Tract No. 3233, as shown on that certain Subdivision Map filed on _________________, in Book ___ at Pages ___ through ___, inclusive, of Maps, in the Office of the San Luis Obispo County Recorder.

B. It is the desire and intention of Declarant to subdivide the Property (as hereinafter defined) to create a common interest development in accordance with the Davis-Stirling Common Interest Development Act and to impose mutually beneficial restrictions under a general plan of improvement for the benefit of all the separate interests created. To such end, Declarant deems it desirable to create a corporation under the Nonprofit Mutual Benefit Corporation Law of the State of California which will be delegated and assigned the powers of owning and maintaining the Common Property (as hereinafter defined), administering and enforcing the covenants and restrictions established by this Declaration, and collecting and disbursing the assessments and charges hereinafter created.

C. The Trinity project is a mixed-use residential/commercial development with approximately 23 residences and 2 commercial units. The commercial uses shall be subject to applicable City’s zoning regulations for mixed-use projects.

C. Declarant hereby declares that each Phase of the Property is to be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the following limitations, restrictions, reservations, rights, easements, conditions and covenants, all of which are declared and agreed to be in furtherance of a plan for the protection, subdivision, maintenance, improvement and sale of the Property for the purpose of enhancing the value, desirability and attractiveness of the Property. All provisions of this Declaration, including without limitation the easements, uses, obligations, covenants, conditions and restrictions hereof, are hereby imposed as equitable servitudes upon the Property. All of the limitations, restrictions, reservations, rights, easements, conditions and covenants herein shall run with and burden the Property and shall be binding on and for the benefit of all of the Property and all Persons having or acquiring any right, title or interest in the Property, or any part thereof, and their successive owners and assigns. 2 D. Declarant, its successors, assigns and grantees, covenant and agree that the undivided interest in the Common Area, the Membership in the Association, any easements conveyed therewith and the fee title to each respective Unit conveyed therewith shall not be separated or separately conveyed, and each such undivided interest, Membership and easement shall be deemed to be conveyed or encumbered with its respective Unit even though the description in the instrument of conveyance or encumbrance may refer only to the Unit; provided, however, that this restriction upon the severability of the component interests of the Separate Interests shall not extend beyond the period for which the right to partition the Property is suspended in accordance with § 4610 of the California Civil Code (or any successor or replacement statute) and the provisions of Article X hereof. Any conveyance by an Owner of a Separate Interest, or any portion thereof, shall be presumed to convey the entire Separate Interest, together with a Membership in the Association.

ARTICLE I

1. Definitions.

Unless otherwise expressly provided, the following words and phrases, when used in this Declaration, shall have the following specified meanings.

1.1 Architectural Committee or Committee.

Architectural Committee or Committee shall mean the Architectural Review Committee created pursuant to Article IV hereof.

1.2 Articles.

Articles shall mean the Articles of Incorporation of the Association, filed or to be filed in the Office of the Secretary of State of the State of California, as such Articles may be amended from time to time.

1.3 Assessment, Annual.

Annual Assessment shall mean a charge against a particular Owner and his or her Separate Interest, representing his or her share of the total Common Expenses which are to be levied among all the Owners and their Separate Interests in the Project in the manner and proportions provided herein.

1.4 Assessment, Capital Improvement.

Capital Improvement Assessment shall mean a charge which the Board may from time to time levy against each Owner and his or her Separate Interest, representing a portion of the cost to the Association for installation or construction of any Improvements on the Common Property. Such charge shall be levied among all of the Separate Interests in the Project in the same proportions as are Annual Assessments.
3 1.5 Assessment, Reconstruction.

Reconstruction Assessment shall mean a charge which the Board may from time to time levy against each Owner and his or her Separate Interest, representing a portion of the cost to the Association for reconstruction of any Improvements on the Common Property. Reconstruction Assessments shall be levied among the Owners and their Separate Interests in the same proportions as Annual Assessments.

1.6 Assessment, Special.

Special Assessment shall mean (i) a charge which the Board may from time to time levy against each Owner and his or her Separate Interest in order to raise funds for unexpected operating or other costs, insufficient operating or reserve funds, or other purposes as the Board in its discretion considers appropriate; or (ii) a charge against a particular Owner directly attributable to, or reimbursable by, the Owner, equal to the cost incurred by the Association for corrective action performed pursuant to the provisions of this Declaration, or a reasonable fine or penalty assessed by the Board, plus interest and other charges on such Special Assessments as provided for in this Declaration. Special Assessments shall not include any late payment penalties, interest charges or costs (including attorneys’ fees) incurred by the Association in the collection of Annual, Capital Improvement and Reconstruction Assessments.

1.7 Association.

Association shall mean Trinity Homeowners Association, a California nonprofit corporation (formed pursuant to the Nonprofit Mutual Benefit Corporation Law of the State of California), its successors and assigns.

1.8 Board or Board of Directors.

Board of Directors or Board shall mean the Board of Directors of the Association.

1.9 Budget.

Budget shall mean a written, itemized estimate of the income and Common Expenses of the Association in performing its functions under this Declaration, which Budget shall be prepared pursuant to the Bylaws.

1.10 Bylaws.

Bylaws shall mean the Bylaws of the Association, as such Bylaws may be amended from time to time.

1.11 City.

City shall mean the City of Grover Beach, State of California. 4 1.12 Close of Escrow.

Close of Escrow shall mean the date on which a deed is Recorded conveying a Separate Interest pursuant to a transaction requiring the issuance of a Final Subdivision Public Report by the DRE.

1.13 Commercial Owner.

Commercial Owner shall mean Declarant as the initial owner of the Commercial Units, and any and all successors or assigns succeeding to the rights and obligations under this Declaration as the legal owner of a Commercial Unit.

1.14 Commercial Unit. Commercial Unit shall mean a condominium Unit which is designed for community commercial uses, which commercial activities and uses shall be consistent with uses that are permitted under the City’s zoning regulations.

1.15 Common Area.

Common Area shall mean all of the real properties and improvements within Lot 18, except the Separate Interests. The Common Area is more particularly identified on the Condominium Plan. The Common Area in the Project is contemplated to include, without limitation, the following, if applicable: the land and the Condominium Building (excluding the Units and any easement appurtenant thereto) within Lot 18. Declarant hereby expressly reserves for the benefit of the Association a nonexclusive easement for access, ingress and egress over the Property to the extent necessary to perform the maintenance, repair and replacement of the Common Area in the Project.

1.16 Common Expenses.

Common Expenses shall mean those expenses for which the Association is responsible under this Declaration, including, but not limited to, the actual and estimated costs of:
maintenance, cleaning, utilities, management, operation, and repair and replacement of the Common Property; unpaid Special Assessments, Reconstruction Assessments and Capital Improvement Assessments; the cost of maintenance of any recreational facilities on the Common Property; the costs of any and all utilities metered to more than one Unit, if any, and other commonly metered charges for the Property, including, without limitation, the cost to read, maintain, repair and replace any sub-meters; the cost of maintenance of any clustered mailboxes and any address identification signs; the cost of annual inspection of the Project; the costs of management and administration of the Association including, but not limited to, compensation paid by the Association to managers, accountants, attorneys and other employees; the costs of any gardening, security, trash pickup and other services benefiting the Common Property; the costs of fire, casualty and liability insurance, workers’ compensation insurance, errors and omissions and director, officer and agent liability insurance, and other insurance covering the Property and the directors, officers and agents of the Association, including earthquake insurance, if provided; the costs of bonding of the members of the Board; taxes paid by the Association, including any blanket tax assessed against the Property; the amounts paid by the Association for discharge of any lien or encumbrance levied against the Property, or portions thereof; and the costs of any other item or 5 items incurred by the Association, for any reason whatsoever in connection with the Property, for the common benefit of the Owners.

1.17 Common Interest Development.

Common Interest Development shall mean and refer to “Common Interest Development” as defined in California Civil Code § 4100 (or any successor or replacement statute).

1.18 Common Property.

Common Property shall mean Lot 1 of Tract 3233, the Common Area, and all real and personal property interests to which the Association shall hold title or over which the Association shall hold an easement for the common use and enjoyment of the Members as provided herein. Declarant hereby expressly reserves for the benefit of the Association a nonexclusive easement for access, ingress and egress over the Property to the extent necessary to perform the maintenance, repair, and replacement of the Common Property in accordance with this Declaration.

1.19 Condominium.

Condominium shall mean an estate in real property as defined in California Civil Code § 4125(b) (or any successor or replacement statute), and shall consist of an undivided fee simple ownership interest in the Common Area, together with a separate ownership interest in fee in a Unit and all easements appurtenant thereto, including Exclusive Use Areas. Subject to the provisions of Section 11.4 hereof, the fractional undivided fee simple interest in the Common Area (i) shall be appurtenant to each Unit, (ii) shall be a fraction having one (1) as its numerator and the total number of Units in Lot 18 of Tract 3233as its denominator, and (iii) shall be held by the Owners of Condominiums in the Project as tenants in common.

1.20 Condominium Building.

Condominium Building shall mean the building within Lot 18 in which condominium Units are located.

1.21 Condominium Plan.

Condominium Plan shall mean the Recorded condominium plan, as such may be amended from time to time, for Lot 18 of Tract 3233, consisting of (1) a description or survey map of the Project or portion thereof, which shall refer to or show monumentation on the ground, (2) a three-dimensional description of the Project or portion thereof, one or more dimensions of which may extend for an indefinite distance upwards or downwards, in sufficient detail to identify the Common Area and each Separate Interest, as applicable, and (3) a certificate consenting to the Recordation thereof signed and acknowledged by the record owner of fee title to Lot 18, or portion thereof, and by either the trustee or the Beneficiary of each Recorded Deed of Trust, and the Mortgagee of each Recorded Mortgage encumbering Lot 18 or portion thereof. 6 1.22 Cost Center.

Cost Center shall mean a portion of the Project with a group of Separate Interests which have been designated from time to time to bear the costs of either (i) maintaining, repairing, and replacing specified Improvements within the Common Property, or (ii) receiving certain utilities, services or programs provided by the Association, for the benefit of only the Separate Interests within the Cost Center. The additional administrative costs of operating each Cost Center shall be a part of the Cost Center Expenses allocated to the Cost Center Assessments. Cost Centers may be designated by Declarant in this Declaration or any Supplemental Declaration when Declarant, in its sole discretion, determine that one or more (but not all) of the Separate Interests within the Project benefit from any of the Improvements within the Common Property or certain services provided by the Association. Declarant and/or the Board may also designate Cost Centers under circumstances authorized in this Declaration or a Supplemental Declaration. A cost center will be established for cost and expenses related to the Condominium Building which are for the benefit of only the Separate Interests within Lot 18.

1.23 Cost Center Assessments.

Cost Center Assessments shall mean and refer to an additional component of Association regular assessments or special assessments to be assessed against those Separate Interests which are within a particular Cost Center, for payment of the operating costs and reserves and other items applicable to the Cost Center Benefits within the Cost Center. Reference to "regular assessments" or "special assessments" in this Declaration shall also refer to the Cost Center Assessments with respect to the Separate Interests within a Cost Center for all purposes, except for any limitation set forth in this Declaration. Cost Center Assessments shall be deemed separate from the regular Annual Assessments. Imposition of a Cost Center Assessment shall not be deemed an increase in the regular Annual Assessment amount, but instead an additional assessment and any reference to "fifty percent (50%) of the Owners" with respect to Cost Center Assessments, refer to fifty percent (50%) of the Owners within the Cost Center.

1.24 Cost Center Benefits.

Cost Center Benefits shall mean Association maintained Improvements (including, but not limited to, [dwelling structures, parking areas, solar electric systems], that is located within a Cost Center and is likely to be (i) used primarily by or for the benefit of the Owners within such Cost Center, and (ii) relates to a higher level of service or additional services.

1.25 Cost Center Expenses.

Cost Center Expenses shall mean the actual and estimated expenses incurred or anticipated to be incurred by the Association for the benefit of the Owners and occupants of the Separate Interests within a particular Cost Center, which may include a reasonable reserve for capital repairs and replacements, as the Board may specifically authorize and as may be authorized herein or in a Supplemental Declaration applicable to the Cost Center. 7 1.26 Declarant.

Declarant shall mean GB TRINITY LLC, a California limited liability company, its successors, and any Person to which it shall have assigned all or any of its rights hereunder by an express written assignment. In the event the lender of a Mortgage encumbering the Separate Interests owned by Declarant obtains title to such Separate Interests, pursuant to judicial foreclosure or the powers provided in such Mortgage, the first Mortgagee, as Declarant’s successor, shall take title to such Separate Interests along with all Declarant’s rights set forth herein, including all voting rights set forth in Section 2.6 below.

1.27 Declaration.

Declaration shall mean this Declaration of Covenants, Conditions and Restrictions and Reservation of Easements, as it may be amended from time to time.

1.28 Declaration of Alternative Dispute Resolution.

Declaration of Alternative Dispute Resolution shall mean that certain Declaration of Alternative Dispute Resolution for Trinity Recorded concurrently herewith. Any and all claims, controversies, breaches or disputes by or between or among the Association, any Owner or Owners, and/or Declarant arising from or related to this Declaration, the Common Property, any Unit, the sale of any Unit, or any transaction related thereto shall be subject to Section 15.4 below and the Declaration of Alternative Dispute Resolution for Trinity.

1.29 Deed of Trust.

Deed of Trust shall mean a Mortgage or a Deed of Trust, as the case may be.

1.30 Drainage and Water Quality Improvements.

Drainage and Water Quality Improvements shall mean the drainage and water improvements in the Community. The Drainage and Water Quality Improvements may include drainage basins, Low-Impact Development (LID)-design drainage and stormwater treatment improvements, drainage channels, below-ground drain lines, subsurface drains, water quality treatment and conveyance improvements, including detention and biofiltration basins, underground storm water detention systems, brow ditches, bioswales, area drains, storm drain lines, roof drains and downspouts, rain gardens, bioretention areas, and any outlet from the biofilters to the City storm drain system and appurtenant improvements constructed in the Community.

1.31 DRE.

DRE shall mean the California Department of Real Estate and any successors thereto.
8 1.32 Exclusive Use Area(s).

Exclusive Use Area(s) shall mean and include those portions of the Common Area shown on the Condominium Plan or in this Declaration over which exclusive easements are reserved for the benefit of certain Owners. Exclusive Use Areas for this Project include the following:
(a) Exclusive Use Parking Space(s). Exclusive Use Areas for parking purposes, which include carports and enclosed garages (each a “Parking Space”) are shown on the Condominium Plan. Each Parking Space shall be appurtenant to the Unit to which it is assigned. Declarant shall have the right, at its sole discretion, to convey to and collect separate consideration from an Owner for each Parking Space purchased. The assignment and conveyance of Parking Spaces shall be determined by Declarant in its sole and absolute discretion and identified on an assignment document or instrument assigning a Parking Space to an Owner. Nothing herein shall limit the right, power and authority of Declarant to create, transfer, assign and convey additional Parking Spaces to Owners in the Project subsequent to the Close of Escrow for the sale of a Unit to such Owners under the authority reserved to Declarant in this Section and Article VII below. Such right and power of Declarant to create, transfer, assign and convey additional Parking Spaces shall terminate upon the Close of Escrow for the last Unit in the Project owned by Declarant. An Owner may transfer, assign or lease one or more Parking Space(s) conveyed to such Owner, to another Owner of a Unit in the Project, subject to any Rules and Regulations adopted with respect thereto and, provided that such assignment or lease of Parking Spaces does not violate any applicable governmental rules, restrictions and requirements. Any purported transfer, assignment or lease of a Parking Space to a person or entity other than an Owner in the Project shall be null and void, and without legal force or effect.

A copy of the assignment instrument shall be delivered to the Board as soon as possible after its execution.
(b) Exclusive Use Areas for internal and external telephone wiring designed to serve a single Unit but located outside the boundaries of that Unit, in accordance with California Civil Code Section 4145 (or any successor or replacement statute), and any other areas designated by Declarant or shown as Exclusive Use Areas in this Declaration, the Condominium Plan, or another written instrument from Declarant or the Association.

Declarant shall have the right to temporarily relocate an Owner’s assigned Exclusive Use Areas in order to accommodate any construction, maintenance or repair of Improvements located within this Project. If an assigned Exclusive Use Area is permanently affected by such construction, maintenance or repair, Declarant shall have the right to exchange the affected Exclusive Use Area for another available Exclusive Use Area. Each Owner, by accepting a deed to a Condominium, hereby acknowledges that such activities of the Declarant may impair the use of such Owner’s assigned Exclusive Use Areas and may constitute an inconvenience or nuisance to the Owners, and hereby consents to such impairment, inconvenience or nuisance, and agrees to indemnify the Declarant against any claims with respect to such matters. 9 1.33 Family.

Family shall mean one (1) or more natural Persons each related to the other by blood, marriage or adoption, or one (1) or more natural Persons not all so related, but who maintain a common household in a Unit.

1.34 FHA.

FHA shall mean the Federal Housing Administration of the United States Department of Housing and Urban Development and any department or agency of the United States government which succeeds to the FHA’s functions of insuring notes secured by Mortgages on residential real estate.

1.35 FHLMC.

FHLMC shall mean the Federal Home Loan Mortgage Corporation (also known as Freddie Mac) created by Title II of the Emergency Home Finance Act of 1970, and any successors to such corporation.

1.36 Fiscal Year.

Fiscal Year shall mean the fiscal accounting and reporting period of the Association selected by the Board from time to time.

1.37 FNMA.

FNMA shall mean the Federal National Mortgage Association, a governmentsponsored private corporation established pursuant to Title VIII of the Housing and Urban Development Act of 1968, and any successors to such corporation.

1.38 GNMA.

GNMA shall mean the Government National Mortgage Association administered by the United States Department of Housing and Urban Development, and any successor to such association.

1.39 Governmental Agency.

Governmental Agency shall mean any local, county, state and/or federal governmental or quasi-governmental agency, authority or regulatory body (including any public or private utility company including cable television) that has jurisdiction over the Project or any part thereof.

1.40 Improvements.

Improvements shall mean all structures and appurtenances thereto of every type and kind located within the Project, including, but not limited to, the following (if applicable):
dwelling units, driveways, awnings, terraces, balconies, decks, patios, lobbies, walkways, 10 hallways, stairways, storage areas, trash areas, roads, driveways, parking areas, fences, screening walls, block walls, retaining walls, bearing walls, columns, vertical supports, girders, ceiling joists, subfloors, floors, walls, roofs, slabs, foundations, paint on surfaces of any structure, heating and cooling equipment, water heaters, water softeners, reservoirs, tanks, pumps, motors, ducts, flues and chutes, conduits, pipes, plumbing, sprinkler systems, irrigation systems, drainage systems, landscaping, hedges, trees, shrubs, windbreaks, poles, signs, fire protection systems, television antennas, wires and other utility installations.

1.41 Limited Warranty.

Limited Warranty shall mean that certain express written warranty known as the “Limited Warranty” which is provided by Declarant to Owners.

1.42 Maintenance Funds.

Maintenance Funds shall mean the accounts created for receipts and disbursements of the Association pursuant to Section 5.2 hereof.

1.43 Maintenance Manual.

Maintenance Manual shall mean the maintenance recommendations and guidelines set forth in any materials provided by Declarant or its authorized agents to the Associations or to Owners, specifying obligations for maintenance of the Common Property by the Associations and the Units by the Owners. Each Owner who receives a Maintenance Manual is obligated to provide a copy of such Maintenance Manual to any successor purchaser of such Owner’s Unit.

1.44 Manager.

Manager shall mean the Person, employed by the Association, pursuant to and limited by Section 2.12 hereof, and delegated the duties, power or functions of the Association as limited by said Section.

1.45 Member, Membership.

Member shall mean every Person holding a Membership in the Association, pursuant to Section 2.3 hereof. Membership shall mean the property voting and other rights and privileges of Members as provided herein, together with the correlative duties and obligations contained in the Restrictions.

1.46 Mortgage.

Mortgage shall mean any Recorded mortgage or deed of trust or other conveyance of a Separate Interest or other portion of the Property to secure the performance of an obligation, which conveyance will be reconveyed upon the completion of such performance. The term “Deed of Trust” or “Trust Deed” when used shall be synonymous with the term “Mortgage.” 11 1.47 Mortgagee, Mortgagor.

Mortgagee shall mean a Person to whom a Mortgage is made and shall include the Beneficiary of a Deed of Trust; Mortgagor shall mean a Person who mortgages his or her or its property to another (i.e., the maker of a Mortgage), and shall include the Trustor of a Deed of Trust. The term “Trustor” shall be synonymous with the term “Mortgagor” and the term “Beneficiary” shall be synonymous with the term “Mortgagee.”

1.48 Notice and Hearing.

Notice and Hearing shall mean written notice and a hearing before the Board, at which the Owner concerned shall have an opportunity to be heard in person, or by counsel at the Owner’s expense, in the manner further provided in the Bylaws.

1.49 Owner.

Owner shall mean the record owner(s), whether one (1) or more Persons or entities, of a fee simple interest in a Separate Interest within the Project, including Declarant, but excluding those having such interests merely as security for the performance of an obligation with respect to each Separate Interest owned by Declarant. The term “Owner” shall include the seller (but not the buyer) under an executory contract of sale. The term “Owners” shall generally mean the owner(s) of Separate Interests within the Project. The term “Owner” shall not include a Mortgagee prior to its acquisition of fee title to the Unit encumbered by its Mortgage.

1.50 Person.

Person shall mean a natural individual, a corporation, a partnership, a trust, or any other entity with the legal right to hold title to real property.

1.51 Phase or Phase of Project.
“Phase” or ‘Phase of Project” shall mean all of the Separate Interests within a portion of Tract 3233 that is identified as “Phase” in a Final Subdivision Public Report issued by the Department of Real Estate for such Phase. Each Phase shall only be deemed subject to the covenant, conditions and requirements set forth in this Declaration concurrently with the first Close of Escrow for the sale of a Separate Interest in such Phase under the authority of a Final Subdivision Public Report. Phase 1 shall mean Lots 2 through 9 of Tract 3233.

1.52 Project.

Project shall mean Trinity development and shall be comprised of the Property and all Improvements located therein, including, without limitation, the Common Property and the Units therein. The Project is a “common interest development” as defined in § 4100 of the California Civil Code (or any successor or replacement statute). 12 1.53 Property.

Property shall mean (a) Phase 1, and (b) each other Phase of Development described in a Final Subdivision Public Report has been issued by the DRE, which is subject to the covenant, conditions and requirements set forth in this Declaration.

1.54 Record, File, Recordation.

Record, File or Recordation shall mean, with respect to any document, the recordation or filing of such document in the Office of the County Recorder of the county in which the Property is located.

1.55 Residence.

Residence shall mean the residential dwelling portion of a Unit, intended for use by a single Family.

1.56 Restrictions.

Restrictions shall mean this Declaration, the Articles, the Bylaws, and the Rules and Regulations of the Association from time to time in effect.

1.57 Rules and Regulations.

Rules and Regulations shall mean the rules and regulations adopted by the Board pursuant to this Declaration or the Bylaws, as such Rules and Regulations may be amended from time to time.

1.58 Separate Interest or Unit.

Separate Interest or Unit shall have the same meaning as is set forth in Civil Code §4185. Two examples of a Separate Interest (or Unit) are (i) an individual Lot or a legal parcel in a planned development project, and (ii) an individual condominium separate interest in space as defined in § 4125(b) of the California Civil Code (or any successor or replacement statute). Unless stated otherwise, reference to a “Separate Interest” or a “Unit” shall refer to the residence together with other improvements located outside the residence but within the Separate Interest.

1.59 Subdivision Map.

Subdivision Map shall mean the subdivision map for Tract No. 3233 filed on ________________, in Book ___ at Pages __ through __, inclusive, of Maps, in the Official Records of San Luis Obispo County.

1.60 Telecommunications Facilities.

Telecommunications Facilities shall mean equipment, cables, conduits, inner ducts, vaults, connecting hardware, wires, poles, transmitters, towers, antennae and other facilities, 13 structures and Improvements necessary for, or used in, the provision of Telecommunications Services. Declarant may expand this definition in any supplemental declaration.

1.61 Telecommunications Services.

Telecommunications Services shall mean services for cable television, communications, telecommunications, high-speed data, telephony, intranet, internet, broad-band communications, information transfer, transmission, video and other similar services. Declarant may expand this definition in any supplemental declaration.

1.62 Terrace(s).

Terrace shall mean a patio, a deck, a balcony, or a porch element within the Project as shown and depicted on the Condominium Plan and constituting a portion of a Unit located within the Project.

1.63 VA.

VA shall mean the Department of Veterans Affairs of the United States of America and any department or agency of the United States government which succeeds to the VA’s function of issuing guaranties of notes secured by Mortgages on residential real estate.

ARTICLE II

2. Homeowners Association.

2.1 Organization of Association.

The Association is or shall be incorporated under the name of Trinity Homeowners Association, as a corporation not for profit under the Nonprofit Mutual Benefit Corporation Law of the State of California.

2.2 Duties and Powers.
(a) General Duties and Powers. The duties and powers of the Association are those set forth in the Declaration, the Articles and Bylaws, together with the general and implied powers of a nonprofit mutual benefit corporation, generally to do any and all things that a corporation organized under the laws of the State of California may lawfully do which are necessary or proper, in operating for the peace, health, comfort, safety and general welfare of its Members, subject only to the limitations upon the exercise of such powers as are expressly set forth in the Articles, the Bylaws and in this Declaration. The Association shall further have the right to install or construct capital Improvements on the Common Property. The Association may at any time, and from time to time reconstruct, replace or refinish any Improvement or portion thereof upon the Common Property in accordance with the original design, finish or standard of construction of such Improvement; and may also replace destroyed trees or other vegetation and plant trees, shrubs and ground cover upon any portion of the Common Property. The Association may employ personnel necessary for the effective operation and maintenance of the Common Property, including, without limitation, the employment of 14 legal, management and accounting services. The Association shall make available for inspection by any prospective purchaser of a Separate Interest, any Owner of a Separate Interest, and the Beneficiaries, insurers and guarantors of the first Mortgage on any Separate Interest, current copies of the Declaration, the Articles, the Bylaws, the Rules and Regulations and all other books, records, and financial statements of the Association required to be available for inspection pursuant to California Civil Code § 5200 (or any successor or replacement statute). The Association shall additionally have the power, but not the duty, to enter into contracts with Owners or other persons to provide services or to maintain and repair Improvements within the Property and elsewhere which the Association is not otherwise required to provide or maintain pursuant to this Declaration; provided, however, any such contract shall provide for the payment to the Association for the costs of providing such services or maintenance. (b) Litigation. Subject to the provisions of this Declaration, the Association shall have the power, but not the duty, to initiate, defend, settle or intervene in mediation, arbitration, judicial or administrative proceedings on behalf of the Association in matters pertaining to (a) the application or enforcement of this Declaration and (b) damage to the Common Property; provided, however that no representative of Declarant on the Board shall vote on the initiation of any claim under California Civil Code §895, et seq. (or any successor or replacement statute), such that Declarant shall have no control over the Association’s ability to decide whether to initiate a claim under such statutory provisions and in the event of such a vote, the affirmative vote of a majority of the non-Declarant representatives on the Board shall be binding so long as a quorum of the Board is present at any meeting where such vote is taken.

The Association and not the individual Members shall have the power to pursue any claims or other actions using the non-adversarial proceedings for construction defects in the Common Property pursuant to Section 15 below. Any recovery by the Association with respect to any damage to or defect in the Common Property shall be utilized solely for the purpose of paying for the costs of obtaining the recovery and for correcting such damage or defect. (c) Maintenance Manuals. The Association shall maintain at the offices of the Association a copy of the Maintenance Manual, if one is provided by Declarant to the Owners, and shall make available to each such Owner upon request a copy of the Maintenance Manual applicable to the Units. The Association shall have the right to charge the requesting Owner a fee for the copying of such Maintenance Manual. The Association shall also comply with provisions of the Maintenance Manual for the Common Area, if one is provided by Declarant to the Association. The Board may, from time to time, make appropriate revisions to the Association’s Maintenance Manual based on the Board’s review thereof, to update such manual to provide for maintenance according to current industry practices so long as such changes do not reduce the useful life or functionality items being maintained. (d) Members’ Approval of Construction Defect Actions. In the event that any claim or other actions brought by the Association under California Civil Code § 895, et seq., and any successor or replacement statutes or laws, involving allegations of construction defects relating to the Common Property, is not resolved pursuant to the non-adversarial procedures set forth in Section 15.4 below, the Association shall not initiate an action or arbitration under Section 15.4 below or otherwise without first obtaining the consent of the Owners other than Declarant, constituting more than sixty-seven percent (67%) of the voting power of the Association at a meeting or election of the Association, conducted in accordance 15 with the provisions of California Corporations Code §§ 7510, et. seq. and 7613 and any successor statutes or laws.
(e) Adoption of Rules and Regulations. The Board or the Members of the Association by majority vote, may adopt reasonable Rules and Regulations that are not inconsistent with this Declaration relating to the use of the Common Property and all its facilities, and the conduct of Owners and their Family, tenants, guests and invitees with respect to the Project and other Owners. The Board shall adopt and amend Rules and Regulations in accordance with the procedures and requirements set forth in California Civil Code §§ 4340 - 4370 and any amendments thereto. Written copies of such Rules and Regulations and any schedule of fines and penalties adopted by the Board shall be furnished to Owners. All changes to the Rules and Regulations shall be delivered within fifteen (15) days after they are adopted by either: (i) posting in a conspicuous place in the Common Property; or (ii) sending to the Owners via first-class mail or by any system or technology designed to record and communicate messages.

2.3 Membership.

Every Owner, upon becoming the Owner of a Separate Interest, shall automatically become a Member of the Association, and shall remain a Member thereof until such time as his or her ownership ceases for any reason, at which time his or her Membership in the Association shall automatically cease. Ownership of a Separate Interest shall be the sole qualification for Membership in the Association. All Memberships shall be appurtenant to the Separate Interest conveyed, and with the exception of Declarant, a Person shall be deemed an Owner of a Separate Interest only upon Recordation of a deed conveying the Separate Interest to such Person. Except as may otherwise be expressly provided herein, the rights, duties, privileges and obligations of all Members of the Association shall be as provided in the Restrictions.

2.4 Transfer.

The Membership held by any Owner shall not be transferred, pledged or alienated in any way, except upon the sale or encumbrance of such Owner’s Separate Interest, and then only to the purchaser or Beneficiary of such Separate Interest. A prohibited transfer is void, and will not be reflected upon the books and records of the Association. A Class A Member who has sold his or her Separate Interest to a contract purchaser under an agreement to purchase shall be entitled to delegate to the contract purchaser his or her Membership rights in the Association. The delegation shall be in writing and shall be delivered to the Board before the contract purchaser may vote. However, the contract seller shall remain liable for all charges and assessments attributable to his or her Separate Interest until fee title to the Separate Interest sold is transferred, as further provided in Section 5.1 of this Declaration. If the Owner of any Separate Interest fails or refuses to transfer the Membership registered in his or her name to the purchaser of the Separate Interest upon transfer of fee title thereto, then upon receipt of satisfactory evidence of such transfer the Board of Directors shall have the right to record the transfer upon the books of the Association and to allow the purchaser to vote at meetings of the Association. Until satisfactory evidence of such transfer has been presented to the Board, the purchaser shall not be entitled to vote at meetings of the Association. The Association may levy a reasonable transfer fee against a new Owner and his or her Separate Interest (which fee shall be added to the Annual Assessment chargeable to such 16 new Owner) to reimburse the Association for the administrative cost of transferring the Membership to the new Owner on the records of the Association, provided such fee does not exceed the Association’s actual cost involved in changing its records of ownership.

2.5 Classes of Membership.

The Association shall have two (2) classes of voting Membership.

Class A. Class A Members shall originally be all Owners except the Declarant, for so long as there exists a Class B Membership. Class A Members shall be entitled to one (1) vote for each Separate Interest owned by such Class A Member and subject to assessment. Declarant shall become a Class A Member with regard to Separate Interests owned by Declarant upon conversion of Declarant’s Class B Membership as provided below. When more than one (1) Person owns any Separate Interest, all of those Persons shall be Members. The vote of such Separate Interest shall be exercised as they among themselves determine in accordance with Section 2.6, but in no event shall more than one (1) Class A vote be cast for any Separate Interest.

Class B. The Class B Member shall be Declarant. The Class B Member shall be entitled to three (3) votes for each Separate Interest owned and subject to assessment, provided that the Class B Membership shall cease and be converted to Class A Membership immediately upon the first to occur of the following events:
(a) The second (2nd) anniversary of the first Close of Escrow in the Phase for which a Final Subdivision Public Report was most recently issued; or (b) The fourth (4th) anniversary of the first Close of Escrow pursuant to the Final Subdivision Public Report for Phase 1 of the Project .

The Class B Member shall have the right to cause earlier conversion of its Membership to Class A by so notifying the president or secretary of the Association in writing.

2.6 Voting Rights.
(a) All voting rights shall be subject to the Restrictions. Except as provided in Section 14.2 of this Declaration and Section 4.8 of the Bylaws, as long as there exists a Class B Membership, any provision of this Declaration, the Articles or Bylaws which expressly requires the vote or written consent of a prescribed majority of the voting power of the Members of the Association other than Declarant for action to be taken by the Association, is not intended to preclude Declarant from casting votes attributable to Units which Declarant owns, and shall require the approval of such prescribed majority of the voting power of each class of Membership. Except as provided in Section 14.2 of this Declaration and Section 4.8 of the Bylaws, when the Class B Membership has terminated, any provision of this Declaration, the Articles or Bylaws which expressly requires the vote or written consent of a prescribed majority of the voting power of the Members of the Association other than Declarant for action to be taken by the Association, is not intended to preclude Declarant from casting votes attributable to Units which Declarant owns, and shall require the vote or written consent of Owners representing such prescribed majority of both the total voting power of the Association and the voting power of the Association residing in Owners other than Declarant. 17 (b) At any meeting of the Association, each Owner (except as otherwise provided in Article II, Section 2.5 with respect to the voting power of Declarant), shall be entitled to cast no more than one (1) vote for each Separate Interest owned by such Owner.

Where there is more than one (1) record Owner of a Separate Interest (collectively, “Co-owners” and each a “Co-owner”), all of those Co-owners shall be Members and may attend any meeting of the Association, but only one (1) of those Co-owners shall be entitled to exercise the single vote to which the Separate Interest is entitled. Co-owners owning the majority interests in a Separate Interest shall from time to time designate in writing one (1) of their number to vote.

Fractional votes shall not be allowed, and the vote for each Separate Interest shall be exercised, if at all, as a unit. Where no voting Co-owner is designated or if the designation has been revoked, the vote for the Separate Interest shall be exercised as the Co-owners owning the majority interests in the Separate Interest mutually agree. Unless the Board receives a written objection in advance from a Co-owner, it shall be conclusively presumed that the voting Coowner is acting with the consent of his or her Co-owners. No vote shall be cast for any Separate Interest if the Co-owners present in person or by proxy owning the majority interests in such Separate Interest cannot agree to said vote or other action. The nonvoting Co-owner or Coowners shall be jointly and severally responsible for all of the obligations imposed upon the jointly-owned Separate Interest and shall be entitled to all other benefits of ownership. All agreements and determinations lawfully made by the Association in accordance with the voting percentages established herein, or in the Bylaws of the Association, shall be deemed to be binding on all Owners, their successors and assigns.

2.7 Repair and Maintenance by the Association.
(a) Maintenance Standards. Subject to Article X pertaining to destruction of Improvements and Article XI pertaining to eminent domain, the Association shall paint, maintain, repair and replace the Common Property and all Improvements thereon, or shall contract for such maintenance, repair and replacement to assure maintenance of the Common Property and all Improvements thereon, in a clean, functional, sanitary and attractive condition, in accordance with applicable manufacturer standards and recommendations and the schedules set forth in the Maintenance Manual, and in a manner consistent with projects of like quality; provided, however, except as expressly provided herein, the Association shall not be responsible for or obligated to perform those items of maintenance, repair or replacement of the Units (the maintenance of which is the responsibility of the Owner thereof as provided in Section 2.9), nor shall the Association be responsible for or obligated to perform those items of maintenance, repair or replacement of the Common Property and all Improvements thereon which are the responsibility of a governmental or quasi-governmental entity. Subject to the qualifications set forth above in this Section, the Board shall determine, in its sole discretion, the level and frequency of maintenance of the Common Property.
(b) Maintenance Items. Without limiting the generality of the foregoing, the Association shall without limitation have the following maintenance rights and obligations pertaining to this Project:
(1) The Association shall be responsible for the maintenance, repair, and payment of all centrally-metered water, gas, electric, and other utility services and equipment, Common Property trash enclosures and refuse equipment and collection, fire services, 18 any common storage area, and any mechanical or electrical equipment in the Common Property, except any equipment maintained by the Owner. The Association shall maintain and read all utility sub-meters on the Property and determine the utility costs and assessments applicable to each Separate Interest;
(2) The Association shall be responsible for the maintenance and repair of all common access driveways and walkways within the Project; including all walkways and access driveways crossing through each lot where a blanket access easement was created by the Final Map of the subdivision.
(3) The Association shall be responsible for payment of all Common Expenses;
(4) The Association shall be responsible for the repair and maintenance of all clustered mailboxes which are reserved for exclusive use of Owners within the Project;
(5) The Association shall maintain, in good working order, any lighting system along all streets and walkways within the Common Property; (6) The Association shall be responsible for the maintenance of all pavers and landscaping located on the Common Property and in any area shown in a Supplemental Declaration (including, without limitation, maintaining vegetation necessary to avoid erosion, controlling weed growth and providing for irrigation, within the limits of drought restrictions, if any, and providing, maintaining, and repairing sprinklers and other landscape maintenance equipment and facilities as necessary) in a fertilized, trimmed and otherwise attractive and first-class condition and in accordance with all applicable legal requirements; (7) The Association shall be responsible for maintenance and repair of the drainage structures, improvements, and basins located in the Common Property, including, without limitation, any pervious pavement or pavers, piping, filtration systems, infiltration systems, and drainage inlets, and shall restore any improvement damaged or destroyed in connection with repair, replacement, or removal of and drainage structures, improvements, or basins as set forth in the Stormwater Operations and Maintenance Plan approved for the Project. (8) The Association shall be responsible for maintenance and repair of the plumbing (excluding plumbing lines and fixtures which exclusively serve a Separate Interest, sink clogs, toilet clogs and garbage disposal clogs when located within Separate Interests) located in the Common Property, including, without limitation, any fire protection system within the Condominium Building, and shall restore any Improvement damaged or destroyed in connection with the repair, replacement or removal of any plumbing or drainage structures, Improvements, or basins;
(9) The Association shall be responsible for the maintenance, repair, and replacement of any common fire alarm monitoring system, sprinkler systems (including the interior fire sprinkler system designed to serve each Separate Interest, if any) and any related facilities (except the outlets thereof when located within Separate Interests) in the Condominium Building;
19 (10) At least once every nine (9) years, the Association shall be responsible for conducting a reasonably competent and diligent visual inspection of the load bearing components and the associated waterproofing system of the elevated elements (such as decks, balconies, and stairways) of the Condominium Building which have at least 3 or more units within such building, which inspection shall be conducted in compliance with the requirements set forth in California Civil Code Section 5551, including the requirement for that such inspection be conducted by a licensed structural engineer or architect. Following receipt of the inspection report, the association shall take preventive measures as set forth in California Civil Code Section 5551, including preventing occupant access to the exterior elevated element until repairs have been inspected and approved by the local enforcement agency; (11) The Association shall be responsible for all maintenance, repair and replacement of the Cost Center Benefits.
(12) If, and only if, requested to do so by Declarant, the Association shall (i) retain a licensed professional to conduct an annual inspection of the roof, windows, balconies, and storm drains for water intrusion, (ii) conduct an annual visual inspection of the Common Property to identify any possible defects in the construction of any Improvements located thereon, (iii) send to the Owner of each Separate Interest an annual survey or questionnaire to report any possible defects discovered by such Owner with respect to construction of the Improvements located on such Owner’s Separate Interest, and (iv) promptly prepare a summary of the results of the annual inspection conducted by the Association and the Owners. The Association shall, at the earliest practicable date after receiving any inspection report from a licensed professional and/or preparing the summary set forth above, forward a copy of the summary to Declarant at its then current address, unless Declarant instructs otherwise; and (13) The Association and each Owner shall maintain a
comprehensive maintenance log which details all maintenance actions and compliance with the maintenance provisions set forth in any Maintenance Manual and this Declaration.

No Owner shall interfere with the exercise by the Association of its right to maintain the Common Property or to perform any of its obligations pertaining to this Project. Declarant hereby grants to the Association easements for access across the Common Property and the Separate Interests as is necessary to allow maintenance obligations set forth herein. (c) Pest Eradication. If determined by the Board to be economically feasible, the Association may, but shall not be obligated to, provide for an inspection and preventive program for the prevention and eradication of infestation by pests and organisms in the Property. If the Board adopts an inspection and preventive program for the prevention and eradication of infestation by termites, insects, pests, and other organisms, the Association, upon reasonable notice (which shall be given no less than fifteen (15) days nor more than thirty (30) days before the date of temporary relocation) to each Owner and the occupants of his or her Separate Interest, may require such Owner and occupants to temporarily relocate from such Separate Interest in order to accommodate efforts by the Association to eradicate such infestation. The notice shall state the reason for the temporary relocation, the date and time of the beginning of treatment, the anticipated date and time of termination of treatment, and that the occupants will be responsible for their own accommodations during the temporary relocation. 20 Each Owner, by accepting a deed to a Separate Interest, hereby acknowledges that such activities of the Association may temporarily impair the use of such Owner’s Separate Interest and may constitute an inconvenience or nuisance to the Owners, hereby consents to such impairment, inconvenience or nuisance, and agrees to indemnify the Association against any claims with respect to such matters. Any damage caused to a Separate Interest by such entry by the Board or by any person authorized by the Board shall be repaired by the Board as a Common Expense of the Association. All costs involved in maintaining the inspection and preventive program as well as repairing and replacing the Common Property and Improvements thereon when the need for such maintenance, repair or replacement is the result of termites, insects, pests or other organisms shall be a Common Expense subject to the restrictions applicable to Capital Improvement Assessments.
(d) Charges to Owners. All such costs of maintenance, repairs and replacements for the Property shall be paid for as Common Expenses out of the Association Maintenance Funds as provided in this Declaration. It shall be the affirmative duty of the Board of Directors to require strict compliance with all provisions of this Declaration and to cause the Project to be inspected by the Architectural Committee for any violation thereof. The cost of any maintenance, repairs or replacements by the Association which is not the responsibility of the Association or which arises out of, or is caused by, the action or inaction of an Owner or such Owner’s Family, tenants, guests, invitees, or agents in violation of the Restrictions shall, after Notice and Hearing, be levied by the Board as a Special Assessment against such Owner.

2.8 Unsegregated Real Property Taxes.

If all of the Separate Interests in a Phase (or in the overall Project) are taxed under a blanket tax bill covering such Phase (or all of the Project), each Owner shall pay his or her proportionate share of any installment due under the blanket tax bill to the Association at least ten (10) days prior to the delinquency date; and the Association shall transmit the taxes to the appropriate tax collection agency on or before the delinquency date. Blanket taxes shall be allocated among the Owners and their Separate Interests based upon the prorated square footage of each Separate Interest. The Association shall, at least forty-five (45) days prior to the delinquency date of any blanket tax installment, deliver to each Owner a copy of the tax bill, along with a written notice setting forth the Owner’s obligation to pay his or her proportionate share of the tax installment and the potential additional charges to the Owner for failure to comply. The Association shall pay the taxes on behalf of any Owner who does not pay his or her proportionate share. The Association shall add to the Annual Assessment of a delinquent Owner the amount of any sum advanced, plus interest at the rate of ten percent (10%) per annum and any amount necessary to reimburse the Association for any penalty or late charge actually assessed in connection with the blanket tax bill, which late charge results from the failure of the delinquent Owner to make timely payment of his or her proportionate share of the taxes. Until the Close of Escrow for the sale of seventy-five percent (75%) of the Separate Interests in the Project, the foregoing provisions relating to the collection of taxes in connection with a blanket tax bill on all or any portion of the Project may not be amended without the express written consent of Declarant. 21 2.9 Repair and Maintenance by Owners.

Each Owner of a separate individual Lot shall maintain, repair, replace all Improvements within his or her Lot (excluding any maintenance or repair which is set forth in this Declaration as the responsibility of the Association), including, paint, paper, plaster, tile, finish and restore or cause to be so maintained, repaired, replaced and restored, at his or her sole expense, all portions of his or her Lot.

Each Owner of a Condominium in the Condominium Building shall maintain, repair, replace, paint, paper, plaster, tile, finish and restore or cause to be so maintained, repaired, replaced and restored, at his or her sole expense, all interior portions of his or her Unit, including, but not limited to, all glass surfaces (excluding any maintenance or repair which is the responsibility of the Association), windows (including window frames, casings, locks, handles, latches, and caulking of windows), shutters, screens, all doors, doorways, door frames, hardware that are part of the entry system of the Unit, weather stripping, light bulbs and fixtures actuated from switches controlled from or separately metered to such Owner’s Unit, electrical switches and outlets, built-in cabinets, built-in appliances (including, without limitation, dishwashers, disposals, electric and/or gas ranges, ovens, microwave units, refrigerators, and washers and dryers), plumbing which exclusively serves such Owner’s Unit, interior plumbing fixtures including bathtubs, shower stalls, shower pans, toilets and sinks and related fixtures, the firebox of the fireplace (if any), in a properly functional, clean, sanitary and attractive condition, in accordance with the Condominium Plan, the original construction design of the Improvements in the Project, and all applicable manufacturer standards, guidelines and recommendations, and all applicable governmental rules, restrictions and requirements. Windows and doors must be replaced with the same hardware as originally installed by Declarant, if such hardware is available. Otherwise, replacement hardware must be approved by the Architectural Committee.

No bearing walls, ceilings, floors or other structural or utility bearing portions of the Condominium Building shall be pierced or otherwise altered or repaired by the Owner, without the prior written approval of the plans for the alteration or repair by the Architectural Committee.

It shall be the further responsibility of each Owner, at his or her sole expense, to clean and maintain the Terrace of his or her Unit, including cleaning all exterior glass window and door surfaces which are located on such Terrace, and to clear all leaves, mud, and other debris from all gutters or other drainage devices servicing such Terrace.

Notwithstanding any other provision herein, each Owner shall also be responsible for all maintenance and repair of any internal or external telephone and Telecommunications Services wiring wherever located which is designed to serve only his or her Separate Interest, and shall be entitled to reasonable access over the Common Property for such purposes, subject to reasonable limitations imposed by the Association. Such area shall constitute an Exclusive Use Area of the benefitted Owner in accordance with Section 1.32 above. It shall further be the duty of each Owner to pay when due all charges for any utility service which is separately metered to his or her Separate Interest.

Each Owner shall regularly inspect smoke detectors and test the alarm system.

Keep sources of direct heat away from fire sprinklers and fire detection systems. No Owner may 22 modify, disconnect or remove any part of the fire sprinkler or fire detection or alarm systems in his or her Separate Interest.

Subject to any required approval of the Architectural Committee, each Owner shall be responsible for maintaining those portions of any solar, heating or cooling equipment (including any filters and other appurtenance thereto) and other utilities which are located within or which exclusively serve his or her Separate Interest, in accordance with manufacturers’ specifications and instructions concerning care and maintenance of such equipment.

If the Board does not adopt an inspection and preventive program for the Condominium Building with regard to any pests and other organisms pursuant to Section 2.7 herein, such a program shall be the responsibility of each Owner in the Condominium Building.

If any Owner shall permit any Improvement, the maintenance of which is the responsibility of such Owner, to fall into disrepair or to become unsafe, unsightly or unattractive, or to otherwise violate this Declaration, or any applicable governmental rules, restrictions, or requirements, the Board shall have the right to seek any remedies at law or in equity which it may have. In addition, the Board shall have the right, but not the duty, after Notice and Hearing as provided in the Bylaws, to enter upon such Owner’s Separate Interest to make such repairs or to perform such maintenance and to charge the cost thereof to the Owner. Said cost shall be a Special Assessment enforceable as set forth in this Declaration.

Each Owner shall complete and return to the Association within thirty (30) days after receipt thereof the annual survey or questionnaire provided to each Owner to report any possible defects discovered by such Owner with respect to construction of the Improvements located on such Owner’s Separate Interest.

Each Owner shall maintain a comprehensive maintenance log of all maintenance actions and compliance with maintenance provisions set forth in any Maintenance Manual.

No Owner of a Condominium Unit may alter or modify any common in wall plumbing within the Project and shall not do anything to impact the cross connection of any common water line.

2.10 Water Intrusion.

Notwithstanding any other provision herein, in the event that there shall be intrusion of water into any Separate Interest (including, without limitation, as a result of any roof, window, skylight, siding or other leaks (including, without limitation, plumbing leaks), and whether or not the cause of such leak constitutes an Association repair obligation), the Owner of the impacted Separate Interest shall be obligated to immediately notify the Association of such event, and such Owner shall take all reasonable and appropriate action to mitigate such condition and to stop any such water intrusion as soon as possible. In the event of any water intrusion into or from the Common Areas and/or upon the Association’s receipt of notice from a Separate Interest Owner regarding water intrusion in such Separate Interests, the Association shall thereafter take all appropriate action including a prompt inspection of the condition, repair of the condition (if such condition impacts the Common Area) and mitigation of mold or mildew. Each Owner shall be obligated to take all reasonable steps to mitigate any possible spread or accumulation of mold or 23 mildew. Failure of any Owner to timely notify the Association of any water intrusion and take appropriate mitigation measures, and/or the failure of the Association to promptly repair such condition shall be cause to deny future claims against Declarant relating thereto, which claims could have been mitigated had earlier action been taken.

2.11 Mold.

Each Owner, by acceptance of a deed to a Separate Interest, acknowledges, recognizes and understands that there is, and will always be, the presence of certain biological organisms within the Separate Interest. Most typically, this will include the common occurrence of mold. In recent years, mold has received significant attention, as significantly increased levels of mold have accumulated and spread through residential dwellings. It is important to note that mold tends to proliferate in warm, wet areas. High levels of mold in an enclosed setting can lead to mild to significant detrimental health effects. As such, it is each Owner’s responsibility to maintain his or her Separate Interest so as to avoid the accumulation of moisture and/or mold within the Separate Interest. Such mitigation matters should include, without limitation, the frequent ventilation of the Separate Interest, removal of standing water on balcony or patio areas, prompt repair of any leaks which permit water intrusion into the Separate Interest, prompt repair of plumbing leaks within the Separate Interest (irrespective of who may have caused any such leaks) and notification to the Association as required by Section 2.10 above. Each Owner also understands that the presence of indoor plants may also increase mold levels within the Separate Interest. Also, the propping of large pieces of furniture against wall surfaces may lead to mold spore accumulation. It is the responsibility of each Owner to monitor and maintain his or her Separate Interest so as to mitigate and avoid the conditions which are likely to lead to the presence and/or spreading of mold. In the event that mold does appear within the Separate Interest, it is also the Owner’s responsibility to promptly and properly treat such mold to minimize the spreading thereof and/or unhealthy conditions likely to arise as a result thereof. Such measures frequently include, but are not limited to, cleaning mold-affected surfaces with chlorine bleach. Each Owner is responsible to learn how to clean any affected Improvements. By acceptance of a deed to a Separate Interest, each Owner acknowledges and agrees that Declarant will not be liable for any actual, special, incidental or consequential damages based on any legal theory whatsoever, including, but not limited to, strict liability, breach of express or implied warranty, negligence or any other legal theory with respect to the presence and/or existence of molds, mildew and/or microscopic spores, unless caused by the sole negligence or willful misconduct of Declarant.

2.12 Use of Agent.

The Board of Directors, on behalf of the Association, may contract with a Manager for the performance of maintenance and repair and for conducting other activities on behalf of the Association, as may be determined by the Board. The maximum term of any such contract (“Management Contract”) shall be one (1) year, unless a longer term is (i) contained in a management contract, the terms of which have been approved by FHA or VA or reviewed by the DRE, or (ii) approved either by vote or written assent of a majority of the voting power of the Association residing in Members other than Declarant, in which case the maximum term of the Management Contract shall be three (3) years. Each such Management Contract approved by the Members pursuant to clause (ii) above, shall provide for its termination after one (1) year by either party thereto without cause and without payment of a termination fee upon no more than ninety 24 (90) days’ written notice to the other party. Notwithstanding anything herein to the contrary, any Management Contract entered into by the Association while the Board is under the control of Declarant shall provide that following expiration of the Class B Membership, such Management Contract may be terminable, without any penalty, by the Association upon not more than ninety (90) days written notice to the other party.

ARTICLE III

3. Rights in Common Property.

3.1 Association Easement.

The Association shall have an easement over the Property for performing its duties and exercising its powers described in this Declaration. The Association’s obligations to maintain the Common Property shall commence on the date Annual Assessments commence on the Separate Interests in the Project. Until commencement of Annual Assessments on the Separate Interests, the Common Property shall be maintained by Declarant.

3.2 Partition.

Except as provided in this Declaration, there shall be no judicial partition of the Common Property, or any part thereof, for the term of the Project, nor shall Declarant, any Owner or any other Person acquiring any interest in any Separate Interest in the Project seek any such judicial partition.

3.3 Members’ Easements in Common Property.

Subject to the provisions of this Declaration, and for the purposes set forth herein and subject to the terms of the Association, every Member of the Association shall have, for himself or herself, his or her Family, tenants, guests, and invitees, a nonexclusive easement of access, ingress, egress, use and enjoyment of, in and to the Common Property (provided however, the Owners of the Commercial Units shall not have access and use of the portions of the Common Property which are designated for the exclusive use of only Residential Owners), and such easements shall be appurtenant to and shall pass with title to every Separate Interest in the Project; provided however, Commercial Owners shall not have any easement for access to or use and enjoyment of the portions of the Common Property which are designated for the exclusive use of only Residential Owners.

3.4 Extent of Members’ Easements.

The rights and easements of use and enjoyment of the Common Property created for the Members by this Declaration shall be subject to the Restrictions, which include, without limitation, the following:
(a) The right of the Board to suspend the rights and easements of any Member, and the Persons deriving such rights and easements from any Member, for use and enjoyment of any recreational facilities within the Project, for any period during which the payment of any Annual, Special, Capital Improvement or Reconstruction Assessment against 25 the Member and his or her Separate Interest remains delinquent, and, after Notice and Hearing as provided in the Bylaws, to suspend such rights and easements for the period set forth in the Bylaws for any violation of the Restrictions, it being understood that any suspension of use and enjoyment of any recreational facilities within the Project for either nonpayment of any Assessment or breach of the Restrictions shall not constitute a waiver or discharge of the Member’s obligation to pay assessments as provided in this Declaration, nor shall it in any way impinge on any Member’s right of access to or use of such Member’s Unit; (b) The right of the Association to consent to or otherwise cause the construction of additional Improvements on the Common Property and to consent to or otherwise cause the alteration or removal of any existing Improvements on the Common Property for the benefit of the Members of the Association;
(c) The right of the Association, acting through the Board, to grant, consent to or join in the grant or conveyance of easements, licenses or rights-of-way in, on or over the Common Property for purposes not inconsistent with the intended use of the Property as a mixed-use commercial/residential project, including, without limitation, the granting of exclusive easements to Owners over portions of the Common Property to conform the boundaries of the Units and/or the Common Property to the as-built location of Improvements installed or constructed by Declarant;
(d) The rights and reservations of Declarant as set forth in this Declaration;
(e) The right of the Association, acting through the Board, to reasonably restrict access to maintenance and landscaped areas and similar areas of the Property; (f) The right of the Association to reasonably limit the number of guests and tenants of the Owners using the Common Property, as provided in this Declaration; (g) The right of the Association, acting through the Board, to establish uniform Rules and Regulations for the use of the Common Property, as provided in this Declaration;
(h) The right of the Association in accordance with the Articles, Bylaws and this Declaration, with a vote or written assent of at least two-thirds (2/3rds) of the voting power of the Association, to borrow money for the purpose of improving, repairing, or adding to the Common Property, and in aid thereof, subject to the provisions of Article XII of this Declaration, to mortgage, pledge, encumber by deed of trust, or hypothecate any or all of its real or personal property as security for money borrowed or debts incurred, provided that the rights of such Mortgagee shall be subordinated to the rights of the Owners; (i) The right of the Association, subject to the provisions of Article XII of this Declaration, to dedicate, release, alienate, or transfer the Common Property, or a portion thereof, to any public agency, authority, or utility for such purposes and subject to such conditions as may be agreed to by the Members; and
26 (j) The right of the Association, subject to the provisions of California Civil Code § 4600 (or any successor or replacement statute), to grant exclusive use of any portion of the Common Area to any Owner, except as specified therein.

3.5 Delegation of Use.

Any Member entitled to the right and easement of use and enjoyment of the Common Property may delegate his or her right to use and enjoyment of the recreational and common facilities to his or her tenants, contract purchasers or subtenants who reside in his or her Separate Interest, subject to reasonable regulation by the Board. A Member who has made such a delegation of rights shall not be entitled to use and enjoyment of the recreational and common facilities of the Project for so long as such delegation remains in effect.

3.6 Waiver of Use.

No Member may exempt himself or herself from personal liability for Assessments duly levied by the Association, or effect the release of his or her Separate Interest from the liens and charges thereof, by waiving use and enjoyment of the Common Property or by abandoning his or her Separate Interest.

3.7 Damage by Member.

Each Member shall be liable to the Association for any damage to the Common Property not fully reimbursed to the Association by insurance (including without limitation any deductible amounts under any insurance policies against which the Association files a claim for such damage) if the damage is sustained because of the negligence, willful misconduct or unauthorized or improper installation or maintenance of any Improvement by the Member, his or her Family, guests, tenants or invitees, or any other Persons deriving their right and easement of use and enjoyment of the Common Property from the Member, or his or her or their respective Family, guests, tenants or invitees, both minor and adult. However, the Association, acting through the Board, reserves the right to determine whether any claim shall be made upon the insurance maintained by the Association, and the Association further reserves the right, after Notice and Hearing as provided in the Bylaws, to levy a Special Assessment equal to the increase, if any, in insurance premiums directly attributable to the damage caused by the Member or the Person for whom the Member may be liable as described above. In the case of joint ownership of a Separate Interest, the liability of the owners shall be joint and several, except to the extent that the Association shall have previously contracted in writing with the joint owners to the contrary.

After Notice and Hearing as provided in the Bylaws, the cost of correcting the damage to the extent not reimbursed to the Association by insurance shall be a Special Assessment against such Member’s Separate Interest, and may be enforced as provided herein. 27 ARTICLE IV

4. Architectural Review Committee.

4.1 Members of Committee.

The Architectural Review Committee, sometimes referred to in this Declaration as the “Architectural Committee” or the “Committee,” shall consist of three (3) members. The initial members of the Committee shall consist of representatives of Declarant. Subject to the following provisions, Declarant shall have the right and power at all times to appoint or remove a majority of the members of the Architectural Committee or to fill any vacancy of such majority until either (i) Close of Escrow has occurred for the sale of ninety percent (90%) of all the Units in the overall development, or (ii) the fifth (5th) anniversary of the first Close of Escrow pursuant to the Final Subdivision Public Report for the Project, whichever occurs earlier. Commencing one (1) year from the issuance of the Final Subdivision Public Report for the Project, the Board shall have the power to appoint and remove one (l) member of the Architectural Committee. Following termination of Declarant’s right to appoint all or a portion of the members of the Committee pursuant to this Section 4.1, the Board shall have the power to appoint and remove all of the members of the Architectural Committee. Committee members appointed by the Board shall be from the Membership of the Association, but Committee members appointed by Declarant need not be Members of the Association. Board members may also serve as Committee members.

4.2 Review of Plans and Specifications.

The Committee shall consider and act upon any and all plans and specifications submitted for its approval under this Declaration and perform such other duties as from time to time shall be assigned to it by the Board, including the inspection of construction in progress to assure its conformance with plans approved by the Committee. No construction, alteration, removal, relocation, repainting, demolition, addition, modification, decoration, redecoration or reconstruction of any Improvement (including, without limitation, any bearing wall, ceiling, floor, window covering, plumbing, water system, and any landscaping or alteration of any established drainage pattern, plan or grade on any portion of the Property) which is a structural or utility component of the Condominium Building or is visible from the Common Property or another Unit in the Property or a public vantage, or otherwise expressly required by this Declaration to be submitted to the Architectural Committee for its review, shall be commenced or maintained, until the plans and specifications therefor showing the nature, kind, shape, height, width, color, materials and location of the same shall have been submitted to the Committee and approved in writing by the Committee; provided, however, that any Improvement may be repainted without Committee approval, so long as the Improvement is repainted the identical color with which it was last painted in compliance with all applicable Restrictions.

The Owner submitting the plans (“Applicant”) shall obtain a written, dated receipt for the plans and specifications from an authorized agent of the Committee and shall submit the plans to the principal office of the Association, or such other address as may be established from time to time by the Board. Until changed by the Board, the address for the submission of such plans and specifications shall be the principal office of the Association. The Committee shall approve, in writing only, proposals or plans and specifications submitted for its approval only if it 28 deems that the construction, alterations, or additions contemplated thereby in the locations indicated will not be detrimental to the appearance of the surrounding area of the Property as a whole, that the appearance of any structure affected thereby will be in harmony with the surrounding structures, that the construction thereof will not detract from the beauty, wholesomeness and attractiveness of the Common Property or the enjoyment thereof by the Members, and that the upkeep and maintenance thereof will not become a burden on the Association.

The Committee may condition its written approval of proposals or plans and specifications for any Improvement (1) upon the Applicant’s furnishing the Association with security acceptable to the Association against any mechanic’s lien or other encumbrance which may be Recorded against the Property as a result of such work, (2) on such changes therein as it deems appropriate, (3) upon the Applicant’s agreement to grant appropriate easements to the Association for the maintenance of the Improvements, (4) upon the Applicant’s agreement to install (at its sole cost) water, gas, electrical or other utility meters to measure any increased consumption, (5) upon the Applicant’s agreement to reimburse the Association for the cost of maintenance, (6) upon the Applicant’s agreement to complete the proposed work within a stated period of time, or (7) upon all of the above, and may require submission of additional plans and specifications addressing any areas of concern to the Committee or other information prior to approving or disapproving material submitted.

The Committee may from time to time adopt, promulgate and amend rules or guidelines which, among other matters, may set forth design and architectural standards, procedures for the submission of plans for approval, requirements for a fee to accompany each application for approval, and/or additional factors which it will take into consideration in reviewing submissions. The Committee may provide that the amount of the fee shall be uniform, or that it be determined in any other reasonable manner, such as by the reasonable cost of the construction, alterations or additions contemplated. The Committee may require such detail in plans and specifications submitted for its review as it deems proper, including without limitation, floor plans, site plans, drainage plans, elevation drawings and description or samples of exterior material and colors. Until receipt by the Committee of any required plans and specifications, the Committee may postpone review of any plan submitted for approval. To ensure uniformity throughout the Project, the Association has the right to review and approve proposed design guidelines and all changes to the design guidelines before they are effective.

Decisions of the Committee and the reasons for the decisions shall be transmitted by the Committee to the Applicant in writing at the address set forth in the application for approval, within sixty (60) days after receipt by the Committee of all materials required by the Committee.

No purported oral or verbal approval of the Committee shall be permitted and any approval, to be binding upon the Committee and the Association, shall be in writing. In no event will any application for approval or any proposal, plans or specifications be deemed approved based upon the passage or lapse of time; any approval must be by affirmative written action of the Committee to be effective. Notwithstanding approval of any application, proposal, plans or specifications by the Committee, no Applicant shall undertake any construction or other activity subject to the review of the Committee unless, as a separate or independent matter, that Applicant has also met any review or permit requirements of the city or county in which the Project is located prior to making any alterations or Improvements permitted hereunder and has obtained all permits 29 necessary to legally permit such construction or other activity, and has provided proof of contractor’s insurance for all work to the Association.

4.3 Condition of Approval.

As a condition to approval of any requested architectural change, modification, addition, or alteration, an Owner, on behalf of himself or herself and his or her successors-ininterest, shall be deemed to have agreed to assume all responsibilities for maintenance, repair, replacement and insurance of such change, modification, addition, or alteration, unless otherwise agreed to in writing by the Board of Directors. It is the responsibility of every Owner of a Unit to determine for himself or herself what architectural modifications have been made to his or her Unit by any predecessor-in-interest. In the discretion of the Board or the Committee, an Owner may be required to confirm and acknowledge such condition of approval by written instrument in recordable form acknowledged by such Owner on behalf of himself or herself and all successorsin-interest.

4.4 Commencement of Construction.

All architectural changes, modifications and improvements approved by the Committee hereunder must be commenced within one (1) year from the date of approval. If not commenced within one (1) year from the date of such approval, then such approval shall be deemed revoked by the Committee, unless the Committee gives a written extension for commencing the work prior to the expiration of said one (1) year period. All work approved by the Committee hereunder shall be completed in its entirety within ninety (90) days from the date of commencement, unless otherwise agreed in writing by the Committee. All approved architectural changes, modifications and improvements must be completed in their entirety, and an Owner may not construct only a portion or part of an approved architectural change, modification, or improvement.

4.5 Meetings of the Committee.

The Committee shall meet from time to time as necessary to perform its duties hereunder. The Committee may from time to time by resolution unanimously adopted in writing designate a Committee Representative (who may, but need not, be one of its members) to take any action or perform any duties for and on behalf of the Committee, except the granting of variances pursuant to Section 4.10. In the absence of such designation, the vote of a majority of the Committee confirmed by contemporaneous written record executed by one or more members of the Committee or the written consent of a majority of the Committee taken without a meeting, shall constitute an act of the Committee.

4.6 No Waiver of Future Approvals.

The approval of the Committee of any proposals or plans and specifications or drawings for any work done or proposed in connection with any matter requiring the approval and consent of the Committee, shall not be deemed to constitute a waiver of any right to withhold approval or consent to any similar proposals, plans and specifications, drawings or matter subsequently or additionally submitted for approval or consent. Each Owner acknowledges that 30 the members of the Board of Directors and the Committee will change from time to time and that interpretation, application, and enforcement of the architectural standards may vary accordingly.

4.7 Compensation of Members.

The members of the Committee shall receive no compensation for services rendered, other than reimbursement for expenses incurred by them in the performance of their duties hereunder.

4.8 Correction of Defects.

Inspection of work and correction of defects therein shall proceed as follows:
(a) The Committee or its duly authorized representative may at any time inspect any Improvement for which approval of plans is required under this Article IV.

However, the Committee’s right of inspection of Improvements for which plans have been submitted and approved shall terminate one hundred twenty (120) days after the work of Improvement has been completed and the respective Owner has given written notice of its completion to the Committee. The notice of completion may be delivered personally or by registered or certified mail to the principal office of the Association, or such other address as may be established from time to time by the Board. The Committee’s rights of inspection shall not terminate pursuant to this paragraph if plans for the work of Improvement have not previously been submitted to and approved by the Committee or if the notice of completion is not properly given. If, as a result of such inspection, the Committee finds that the Improvement was done without obtaining approval of the plans therefor or was not done in substantial compliance with the plans approved by the Committee, it shall notify the Owner in writing of failure to comply with this Article IV, specifying the particulars of noncompliance. The Committee shall have the authority to require the Owner to take such action as may be necessary to remedy the noncompliance.
(b) If upon the expiration of sixty (60) days from the date of such notification, the Owner has failed to remedy the noncompliance, the Committee shall notify the Board in writing of such failure. Upon Notice and Hearing, as provided in the Bylaws, the Board shall determine whether there is a noncompliance and, if so, the nature thereof and the estimated cost of correcting or removing the same. If a noncompliance exists, the Owner shall remedy or remove the same within a period of not more than forty-five (45) days from the date that notice of the Board ruling is given to the Owner. If the Owner does not comply with the Board ruling within that period, the Board, at its option, may Record a Notice of Noncompliance and may peacefully remedy the noncompliance, and the Owner shall reimburse the Association, upon demand, for all expenses (including reasonable attorneys’ fees) incurred in connection therewith.

If such expenses are not promptly repaid by the Owner to the Association, the Board shall levy a Special Assessment against the Owner for reimbursement as provided in this Declaration. The right of the Association to remove a noncomplying Improvement or otherwise remedy the noncompliance shall be in addition to all other rights and remedies which the Association may have at law, in equity or in this Declaration.
31 (c) If for any reason the Committee fails to notify the Owner of any noncompliance with previously submitted and approved plans within one hundred fifty (150) days after receipt of written notice of completion from the Owner delivered in the manner required above, the Improvement shall be deemed to be in accordance with the approved plans.

4.9 Scope of Review.

The Architectural Committee shall review and approve or disapprove all plans submitted to it for any proposed Improvement, alteration or addition, on the basis of potential impact on the Condominium Building (including structural, acoustic and utility impacts), aesthetic considerations, consistency with this Declaration, and the overall benefit or detriment which would result to the immediate vicinity and the Property generally. The Committee shall take into consideration the structural and aesthetic aspects of the architectural design, placement of Improvements, landscaping, color schemes, exterior finishes and materials and similar features.

The Committee’s approval or disapproval shall be based solely on the considerations set forth in this Article IV, and the Committee shall not be responsible for reviewing, nor shall its approval of any plan or design be deemed approval of, any plan or design from the standpoint of structural safety or conformance with building or other codes. The Architectural Committee may consider the impact of views from other Residences or Condominiums, Common Property, or public vantages and reasonable privacy interests as factors in reviewing, approving or disapproving any proposed construction or other Improvements. However, there is no guaranty of any protected views within the Property and no Residence or Separate Interest is guaranteed the existence or unobstructed continuation of any particular view. Each Owner acknowledges that the Board of Directors and the Committee may adopt different architectural standards for different parts of the Project, based upon street visibility and location of the proposed modification in theProject.

Neither the Declarant, the Association, the Board of Directors, the Committee, the Committee Representative, nor any member of any of the foregoing shall be held liable for any injury, damages, or loss arising out of the manner, quality or effect of approved construction on or modification to any Unit or Exclusive Use Areas appurtenant to a Unit authorized pursuant to this Article IV. In the event legal action is brought against any such party as a result of such construction or modification, the Owner causing such construction or modification shall indemnify and hold harmless the Declarant, the Association, the Board of Directors, the Committee, the Committee Representative, and all members of any of the foregoing from all costs, expenses and damages (including but not limited to attorneys’ fees) incurred in connection with such action, including, without limitation, any defense thereof.

4.10 Variances.

The Committee may authorize variances from compliance with any of the architectural provisions of this Declaration, including restrictions upon height, size, floor area or placement of structures, or similar restrictions, when circumstances such as topography, natural obstructions, hardship, aesthetic or environmental considerations may require. Such variances must be evidenced in writing, must be signed by at least a majority of the members of the Committee, and shall become effective upon Recordation. After Declarant has lost the right to appoint a majority of the members of the Committee, the Board must approve any variance recommended by the Committee before any such variance shall become effective. If such variances are granted, no violation of the covenants, conditions and restrictions contained in this 32 Declaration shall be deemed to have occurred with respect to the matter for which the variance was granted. The granting of such a variance shall not operate to waive any of the terms and provisions of this Declaration for any purpose except as to the particular property and particular provision hereof covered by the variance, nor shall it affect in any way the Owner’s obligation to comply with all governmental laws and regulations affecting the use of his or her Unit.

4.11 Appeals.

If the Committee disapproves an application, the Applicant may appeal such decision to the Board of Directors. The Board shall adopt policies and procedures for the appeal of Committee decisions for reconsideration by the Board, which appeal shall be heard at a Board meeting which is open to the Members of the Association.

ARTICLE V

5. Association Maintenance Funds and Assessments.

5.1 Personal Obligation of Assessments.

Declarant, for each Separate Interest owned by it, hereby covenants and agrees to pay, and each Owner, by acceptance of a deed of a Separate Interest, whether or not it shall be so expressed in any such deed, is deemed to covenant and agree to pay to the Association all Annual Assessments for Common Expenses and all applicable Special Assessments, Reconstruction Assessments and Capital Improvement Assessments. The Association shall not levy or collect any Annual Assessment, Capital Improvement Assessment, Special Assessment or Reconstruction Assessment that exceeds the amount necessary for the purpose for which it is levied. Except as provided in this Section 5.1, all such assessments, together with interest, costs, and reasonable attorneys’ fees, shall be a separate, distinct and personal obligation of the Person who was the Owner of the Separate Interest at the time when the assessment fell due. This personal obligation cannot be avoided by abandonment of the Separate Interest or by an offer to waive use of the Common Property. The personal obligation for delinquent assessments shall not pass to any new Owner (“Purchaser”) unless expressly assumed by the Purchaser.

5.2 Maintenance Funds of Association.

The Board of Directors shall establish no fewer than two (2) separate accounts (the “Maintenance Funds”), into which shall be deposited all monies paid to the Association, and from which disbursements shall be made, as provided herein, in the performance of functions by the Association under this Declaration. The Maintenance Funds may be established as trust accounts at a banking or savings institution. The Maintenance Funds shall include: (1) an operating fund for current Common Expenses of the Association (“Operating Fund”), (2) a reserve fund for capital Improvements, replacements, painting and repairs of the Common Property (which cannot normally be expected to occur on an annual or more frequent basis), exclusive of reserves for any Cost Center Benefits (“Reserve Fund”), and (3) any other funds which the Board of Directors may establish to the extent necessary under the provisions of this Declaration. The Board of Directors shall establish for each Cost Center (1) a Cost Center Operating Fund for current expenses of that Cost Center, and (2) a Cost Center Reserve Fund for the deposit of reserves attributable to that Cost Center. Nothing contained herein shall limit, preclude or impair the establishment of 33 additional Maintenance Funds by the Association, so long as the amounts assessed to, deposited into, and disbursed from any such Fund are earmarked for specified purposes authorized by this Declaration.

5.3 Purpose of Assessments.

The assessments levied by the Board of Directors on behalf of the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents of the Separate Interests, for the operation, replacement, improvement and maintenance of the Property, and to discharge any other obligations of the Association under this Declaration. All amounts deposited into the Maintenance Funds must be used solely for the common benefit of all of the Owners for purposes authorized by this Declaration. Disbursements from the Operating Fund shall be made by the Board of Directors for such purposes as may be necessary for the discharge of its responsibilities herein for the common benefit of all of the Owners, other than those purposes for which disbursements from the Reserve Fund are to be used.

The Cost Center Assessments levied by the Association against the Separate Interests within a Cost Center shall be used exclusively for the operational costs and reserves applicable to the Cost Center Benefit within the Cost Center. Cost Center Assessments may include, without limitation, estimated or actual costs and expenses incurred by the Association in connection with administrating the Cost Center, maintaining the Cost Center Benefit, obtaining and maintaining insurance coverage related to the Cost Center Benefit, providing utility services to the Cost Center Benefit and funding reasonable reserves for the repair or replacement of Cost Center Benefit. Disbursements from each Cost Center’s Operating Fund shall be made solely for funding the current operating Common Expenses of the Cost Center for which the fund was created. The Association shall provide separate accounting for funds which are collected and expended on behalf of a Cost Center. The Association shall also provide for the reserve study and the annual review and disclosure of the reserves applicable to a Cost Center.

Disbursements from the Reserve Fund shall not be made by the Board of Directors for any purpose other than the repair, restoration, replacement or maintenance of, or litigation involving the repair, restoration, replacement or maintenance of, major components which the Association is obligated to repair, restore, replace, or maintain and for which the Reserve Fund was established. Disbursements from each Cost Center’s Reserve Fund shall be made solely for funding reserve expenditures attributable to the Cost Center for which the fund was created.

However, the Board may authorize the temporary transfer of money from the Reserve Fund (or applicable Cost Center’s Reserve Fund) to the Association’s Operating Fund (or applicable Cost Center’s Operating Fund) to meet short-term cash-flow requirements or other expenses, provided that the Board has made a written finding, recorded in the Board’s minutes, explaining the reason that the transfer is needed, and describing when and how the money will be repaid to the Reserve Fund. The transferred funds shall be restored to the Reserve Fund within one (1) year of the date of the initial transfer, except that the Board may, upon making a finding supported by documentation that a temporary delay would be in the best interests of the Association, temporarily delay the restoration until the time which the Board reasonably determines to be necessary. The Board shall exercise prudent fiscal management in maintaining the integrity of the Reserve Fund, and shall, if necessary, levy a Capital Improvement Assessment or a Reconstruction Assessment, as applicable, to recover the full amount of the expended funds within the time limits required by 34 this Section. Such assessment shall be subject to the limitation imposed by California Civil Code § 5650(b) (or any successor or replacement statute). The Board may, at its discretion, extend the date that payment of the Capital Improvement Assessment or Reconstruction Assessment is due.

Nothing in this Declaration shall be construed in such a way as to permit the use of Association assessments or funds to abate any annoyance or nuisance emanating from outside the boundaries of the Property. Annual Assessments shall be used to satisfy Common Expenses of the Association, as provided herein and in the Bylaws. When the decision is made to use the Reserve Fund or to temporarily transfer money from the Reserve Fund to pay for litigation, the Board shall notify Members of that decision in the next available mailing to all Members pursuant to § 5016 of the California Corporations Code (or any successor or replacement statute), and of the availability of an accounting of those expenses. The Association shall make an accounting of expenses related to the litigation on at least a quarterly basis. The accounting shall be made available for inspection by the Members at the Association’s office.

5.4 Allocation of Assessments.

All Cost Center Assessments shall be assessed equally against the Members of the Cost Center and their Separate Interests based upon the number of Separate Interests owned by each Member. All Annual Assessments (other than Cost Center Assessments) levied by the Board shall be allocated among the Owners as follows:
(a) Square Footage Allocation. The Annual Assessments for insurance, and reserves funds for roof and painting shall be allocated among the Owners in accordance with the relation of the approximate square footage (as shown on the most current Budget filed with and reviewed by DRE) of each Owner’s Unit to the approximate square footage of all Units, as such proportions are set forth in the Budget.
(b) Residential Per-Unit Allocation. All other Annual Assessments shall be shared equally by the Owners.
(c) Sub-Metered Utilities. The cost of any utility which is sub-metered to a Unit shall be levied by the Association as a Special Assessment against such Unit, which Special Assessment shall be enforced as set forth in this Declaration. It shall be the duty of each Owner to pay when due all charges for any utility service which is separately metered or submetered to his or her Unit. The Association shall provide usage information to the appropriate governmental agencies for each sub-meter upon request within 30 days of written notice from the governmental agency.

5.5 Limitations on Annual and Special Assessment Increases.

The Board shall levy Annual Assessments in accordance with the following provisions:
(a) Maximum Authorized Annual Assessment for Initial Year of Operations. Until the first day of the Fiscal Year immediately following the Fiscal Year in which Annual Assessments commence, the Board shall not levy an Annual Assessment per Separate Interest in an amount greater than one hundred twenty percent (120%) of the amount of Annual 35 Assessments disclosed in the most current Budget filed with and reviewed by DRE at the time Annual Assessments commence without the vote of Members casting a majority of votes at a meeting or election of the Association at which a quorum of the Association is represented; provided, that, for purposes of this Section 5.5(a), a quorum shall mean more than fifty percent (50%) of the Members of the Association. Notwithstanding the foregoing, this Section does not limit Annual Assessment increases necessary for addressing an “Emergency Situation” as defined in Section 5.5(e).
(b) Maximum Authorized Annual Assessment for Subsequent Fiscal Years. Starting with the first Fiscal Year immediately following the Fiscal Year in which Annual Assessments commence and for each Fiscal Year thereafter, the Board shall not levy Annual Assessments in any Fiscal Year in excess of one hundred twenty percent (120%) of the Annual Assessments levied during the immediately preceding Fiscal Year without the vote of Members casting a majority of votes at a meeting or election of the Association at which a quorum of the Association is represented; provided that, for purposes of this Section 5.5(b), a quorum shall mean more than fifty percent (50%) of the Members of the Association. In addition, the Board shall provide notice by first-class mail to all Members of any increase in Annual Assessments from the Annual Assessments levied during the immediately preceding Fiscal Year not less than thirty (30) nor more than sixty (60) days prior to the date on which such increased assessment shall become due. Notwithstanding the foregoing, this Section does not limit Annual Assessment increases necessary for addressing an “Emergency Situation” as defined in Section

5.5(e).
(c) Supplemental Annual Assessments. If the Board, by majority vote, determines that the important and essential functions of the Association may be properly funded by an Annual Assessment in an amount less than the maximum authorized Annual Assessment described above, it may levy such lesser Annual Assessment. If the Board determines that the estimate of total Annual Assessment charges for the current year is or will become inadequate to meet all projected expenses for the Property for any reason, it shall immediately determine the approximate amount of the inadequacy. Subject to the limitations described in Sections 5.5(a) and 5.5(b) above, the Board shall have the authority to levy, at any time during the Fiscal Year by a majority vote, a supplemental Annual Assessment reflecting a revision of the total Annual Assessment charges to be assessed against each Separate Interest for the balance of that Fiscal Year.
(d) Special Assessment. The Board shall not levy Special Assessments to defray the cost of any action or undertaking on behalf of the Association that in the aggregate exceeds five percent (5%) of the budgeted gross expenses of the Association for that Fiscal Year without the vote of Members casting a majority of votes at a meeting or election of the Association at which a quorum of the Association is represented; provided that, for purposes of this Section 5.5(d), a quorum shall mean more than fifty percent (50%) of the Members of the Association. In addition, the Board shall provide notice by first-class mail to all Members of any Special Assessment levied during the Fiscal Year not less than thirty (30) nor more than sixty (60) days prior to the date on which such Special Assessment shall become due.

Notwithstanding the foregoing, this Section 5.5(d) does not limit assessment increases necessary for addressing an “Emergency Situation” as defined in Section 5.5(e). 36 (e) Emergency Situations. For purposes of Sections 5.5(a), 5.5(b),

5.5(d) and 5.7, an “Emergency Situation” is any one of the following:
(1) An extraordinary expense required by an order of a court; (2) An extraordinary expense necessary to repair or maintain the Property or any portion thereof for which the Association is responsible where a threat to personal safety on the Property is discovered;
(3) An extraordinary expense necessary to repair or maintain the Property or any portion thereof for which the Association is responsible that could not have been reasonably foreseen by the Board when preparing the Budget. Prior to the imposition or collection of an assessment pursuant to this subparagraph (iii), the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Members with the Notice of Assessment; or (4) An extraordinary expense in making the first payment of the earthquake insurance surcharge pursuant to § 5003 of the California Insurance Code, if such an expense is applicable.
(f) Limitations of Cost Center Assessments. The Board shall levy assessments sufficient to perform the obligations of the Association as provided in this Declaration with respect to any Cost Center; provided, however, the Board may not levy a Cost Center Assessment that is more than twenty percent (20%) greater than the Cost Center Assessment for the Association's preceding fiscal year. without the vote of Members of the Cost Center casting a majority of votes at a meeting of the Cost Center Members or election of the Association at which a quorum of the Cost Center Members is represented. For purposes of this section, a quorum shall mean more than fifty percent (50%) of the Members of the Cost Center.

In addition, the Board shall provide notice by first-class mail to all Members of the Cost Center of any increase in Cost Center Assessments from the Cost Center Assessments levied during the immediately preceding Fiscal Year not less than thirty (30) nor more than sixty (60) days prior to the date on which such increased assessment shall become due. Notwithstanding the foregoing, this Section does not limit Annual Assessment increases necessary for addressing an “Emergency Situation” as defined in Section 5.5(e), or the Annual Assessments set forth in Section 5.6 below.

5.6 Annual Assessments/Commencement-Collection.

The Board of Directors shall authorize and levy the amount of the Annual Assessment and Cost Center Assessments upon each Separate Interest, as provided herein, by majority vote of the Board. The initial Annual Assessment and any applicable Cost Center Assessment shall begin on all Separate Interests in each Phase (including unsold Separate Interests therein owned by Declarant) on the first day of the first calendar month following the first Close of Escrow for the sale of a Separate Interest in each Phase, or an earlier date as may be selected by Declarant for commencement of Annual Assessments in each Phase. Unless provided to the contrary in the Budget, all Annual Assessments shall be assessed against the Members and their 37 Separate Interests as set forth in Sections 5.4 and 5.5 above. With the written approval of the Declarant or the Architectural Committee, the Owner of contiguous Units may be permitted to combine one or more Units into a single living space by elimination of the demising walls otherwise separating those Units, provided, that such physical combination of any Units shall not alter the legal identity of the Units under this Declaration or alter in any way the amount of the assessments applicable to those Units under this Declaration which shall continue to be allocated in full to each of the original Units notwithstanding the physical combination thereof. Annual Assessments and any applicable Cost Center Assessments for fractions of any month involved shall be prorated. Subject to the terms of any maintenance agreement entered into between Declarant and the Association, Declarant shall pay its full pro rata share of the Annual Assessments on all unsold Separate Interests for which Annual Assessments have commenced. The Board shall fix the amount of the Annual Assessment and any applicable Cost Center Assessment against each Separate Interest at least thirty (30) days in advance of each Annual Assessment period. From time to time the Board may determine that all excess funds in the Operating Fund be retained by the Association and used to reduce the following year’s Annual Assessments. Upon dissolution of the Association incident to the abandonment or termination of the Project, any amounts remaining in any of the Maintenance Funds shall be distributed to or for the benefit of the Members in the same proportions as such monies were collected from the Members.

Concurrently with the first Close of Escrow for the sale of a Separate Interest in the Project, Declarant shall pay to the Association an appropriate amount (as reviewed by DRE) for reserves for replacement or deferred maintenance of the Common Property necessitated by or arising out of the use and occupancy of any Separate Interests in the Project under a rental program conducted by Declarant if such rental program was in effect for at least one (1) year prior to such first Close of Escrow.

Declarant and any other Owner of a Unit which has not been constructed shall be exempt from payment of that portion of the Annual Assessment which is for the purpose of defraying expenses and reserves directly attributable to the existence and use of the Unit. Any such exemption from the payment of Annual Assessments shall be in effect only until the earlier to occur of (1) the Recordation of a notice of completion of the Separate Interest, (2) the occupation or use of the Separate Interest, or (3) completion of all elements of the Improvements that the Association is obligated to maintain.

Notwithstanding any other provisions of this Declaration, until the earlier to occur of (1) the Recordation of a notice of completion of an Improvement on the Common Property, or (2) the placement of such Improvement into use, each Owner (including Declarant) shall be exempt from paying that portion of any Annual Assessment which is for the purpose of defraying expenses and reserves directly attributable to the existence and use of such Improvement.

Each Member shall pay to the Association his or her Annual Assessment in installments at such frequency and in such amounts as established by the Board. Each installment of the Annual Assessment may be paid by the Member to the Association in one check or in separate checks as payments attributable to the deposits under the Operating Fund and the Reserve Fund. If any installment of an Annual Assessment payment is less than the amount assessed and the payment does not specify the Maintenance Fund or Funds into which it should be deposited, the receipt by the Association from that Owner shall be credited in order of priority first to the 38 Operating Fund, until that portion of the Annual Assessment has been satisfied, and second to the Reserve Fund.

Notwithstanding any other provisions of this Declaration or the Bylaws regarding the term and termination of contracts with Declarant for providing services to the Association, Declarant may enter into a written maintenance agreement with the Association under which Declarant shall pay all or any portion of the operating Common Expenses and perform all or any portion of the Association’s maintenance responsibilities in exchange for a temporary suspension of Annual Assessments. Such maintenance agreement shall extend for a term and shall be on such conditions as are reviewed by the DRE, and may require Owners to reimburse Declarant, through the Association, for a portion of the costs expended in satisfaction of Common Expenses.

5.7 Capital Improvement Assessments.

Should the Board of Directors determine the need for a capital Improvement or other such addition to the Property, the cost of which in the aggregate exceeds five percent (5%) of the Budgeted gross expenses of the Association for the then current Fiscal Year, then the vote or written consent of Members casting a majority of votes at a meeting or election of the Association at which a quorum of the Association is represented shall be required to approve and render effective a Capital Improvement Assessment levied by the Board of Directors to cover the cost of such expenditure; provided that, for purposes of this Section 5.7, a quorum shall mean more than fifty percent (50%) of the Members of the Association. Capital Improvement Assessments may be levied by the Board without the consent of the Members, if the aggregate of such expenditures in each Fiscal Year does not exceed five percent (5%) of the Budgeted gross expenses of the Association for such Fiscal Year; provided, that the Board shall provide notice to each Owner by first-class mail of the levying of such Capital Improvement Assessment not less than thirty (30) nor more than sixty (60) days prior to the date on which such assessment shall become due. Notwithstanding the foregoing, the Board may levy in any Fiscal Year, a Capital Improvement Assessment applicable to that Fiscal Year which exceeds five percent (5%) of the Budgeted gross expenses of the Association for such Fiscal Year if such increase is necessary to address an “Emergency Situation” as defined in Section 5.5(e).

5.8 Delinquency.

Any installment of an assessment provided for in this Declaration shall become delinquent if not paid within fifteen (15) days of the due date as established by the Board of Directors of the Association. With respect to any such delinquent assessment, the Board is hereby authorized to and, at its election, may require the Owner responsible for such delinquent assessment to pay both of the following: (a) reasonable costs incurred in collecting the delinquent assessment, including reasonable attorneys’ fees and costs; and (b) a late charge in the maximum amount permitted by California Civil Code § 5650(b)(2) (or any successor or replacement statute).

In addition to the foregoing, commencing thirty (30) days after the assessment becomes due and continuing until paid, the Board is hereby authorized to and, at its election, may require the Owner responsible for the delinquent assessment to pay interest on all sums identified above (including the delinquent assessment, reasonable costs of collection, attorneys’ fees and late charges) at the maximum rate permitted by California Civil Code § 5650(b)(3) (or any successor or replacement statute). The Association need not accept any tender of a partial payment of an installment of an 39 assessment and all costs and attorneys’ fees attributable thereto, and any acceptance of any such tender shall not be deemed to be a waiver of the Association’s right to demand and receive full payment thereafter of all such amounts owed. Collection of delinquent assessments must be conducted in accordance with the provisions of California Civil Code §§ 5660, 5705, 5715 and 5720 (or any successor or replacement statutes).

5.9 Creation and Release of Lien.

All sums (other than Special Assessments imposed against a particular Owner as a penalty or disciplinary measure for such Owner’s failure to comply with the Restrictions) assessed in accordance with the provisions of this Declaration shall constitute a lien on the respective Separate Interest prior and superior to (a) any declaration of homestead Recorded after the Recordation of this Declaration, and (b) all other liens, except (1) all taxes, bonds, assessments and other levies which, by law, would be superior thereto, and (2) the lien or charge of any first Mortgage of record (meaning any Recorded Mortgage or Deed of Trust with first priority or seniority over all other Mortgages or Deeds of Trust) made in good faith and for value and Recorded prior to the date on which the “Notice of Lien” (described in this Section) against the respective Separate Interest was Recorded. Prior to the Recordation of a Notice of Lien against a Unit, the Association must comply with the requirements of California Civil Code § 5660 (or any successor or replacement statute), including, without limitation, the following requirements:

At least thirty (30) days prior to recording a Notice of Lien, the Association shall notify the Owner of such Unit in writing by certified mail of the following: (i) a general description of the collection and lien enforcement procedures of the Association and the method of calculation of the amount, (ii) a statement that the Owner has the right to inspect the Association records, pursuant to § 5205 of the California Civil Code, and the following statement in 14-point boldface type, if printed, or in capital letters, if typed:
“IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS

PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN

YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT
ACTION;” (iii) an itemized statement of the charges owed by such Owner, including items which indicate the principal owed, the fees and reasonable cost of collection, any late charges, any interests, and any reasonable attorneys’ fees, (iv) a statement that the Owner shall not be liable to pay the charges, interest, and costs of collection, if it is determined the assessment was paid on time to the Association; (v) notify the Owner of the right to request a meeting with the Board as provided by California Civil Code § 5665; (vi) notify the Owner of the Owner’s right to dispute such charges by written request for a dispute resolution pursuant to a meet and confer program as set forth in California Civil Code §§ 5900 - 5920; (vii) notify the Owner of the Owner’s right to request for alternative dispute resolution with a neutral third party pursuant to California Civil Code §§ 5925 - 5965 before the Association may initiate any foreclosure proceeding against the Owner’s Unit, except that binding arbitration shall not 40 be available if the Association intends to initiate a judicial foreclosure.

A defaulting Owner may submit a written request to meet with the Board to discuss a payment plan for the debt noticed and the Board shall meet with the Owner in executive session in accordance with the requirements of California Civil Code § 5665 (or any successor or replacement statute). Any payment toward the charges itemized shall be first applied to the principal owed, and only after the principal owed is paid in full shall such payments be applied to interest, late charges or collection expenses. The decision to record a Notice of Lien shall be made by the Board in an open meeting and shall not be delegated to any agent of the Association. The Board shall approve the decision by a majority vote of the board members in an open meeting and record the vote in the minutes of that meeting. The lien shall become effective upon Recordation by the Board or its authorized agent of a notice of delinquent assessment (“Notice of Lien”) concerning delinquent payment of any Annual, Capital Improvement or Reconstruction Assessment or installment thereof, levied by the Association against any Separate Interest Owner, as provided in § 5675 of the California Civil Code (or any successor or replacement statute). The Notice of Lien shall state (i) the amount of the assessment or installment, as the case may be, and other authorized charges and interest, including the cost of preparing and Recording the Notice of Lien, (ii) the expenses of collection in connection with any delinquent installments, including without limitation reasonable attorneys’ fees, (iii) a legal description of the Separate Interest against which the same has been assessed, (iv) the name and address of the Owner against which the lien is imposed, and (v) if applicable, in order for the lien to be enforced by nonjudicial foreclosure, the name and address of the trustee authorized by the Association to enforce the lien by nonjudicial foreclosure sale. The Notice of Lien shall be signed by the President, Vice President or Secretary of the Association and shall be mailed no later than ten (10) calendar days after Recordation, in the manner set forth in § 2924b of the California Civil Code (or any successor or replacement statute), to all record Owners of the Separate Interest against which the Notice of Lien was recorded. The lien shall relate only to the individual Separate Interest against which the assessment was levied and not to the Property as a whole. Within twenty-one (21) days of the payment to the Association of the full amount claimed in the Notice of Lien, or other satisfaction thereof, the Board of Directors shall cause to be Recorded a notice of satisfaction and release of lien (“Notice of Release”) stating the satisfaction and release of the amount claimed. The Board of Directors may demand and receive from the applicable Owner a reasonable charge for the preparation and Recordation of the Notice of Release before Recording it. Any purchaser or encumbrancer who has acted in good faith and extended value may rely upon the Notice of Release as conclusive evidence of the full satisfaction of the sums stated in the Notice of Lien.

5.10 Enforcement of Liens.

Prior to enforcement of any lien, the Association shall offer the Owner and, if so requested by such Owner, shall participate in dispute resolution pursuant to a “meet and confer” program as set forth in California Civil Code §§ 5900-5920 (or any successor or replacement statutes) or alternative dispute resolution with a neutral third party pursuant to California Civil Code §§ 5925 – 5965 (or any successor or replacement statutes). The decision to pursue dispute resolution or a particular type of alternative dispute resolution shall be the choice of the Owner, except that binding arbitration shall not be available if the Association intends to initiate a judicial foreclosure. After the expiration of thirty (30) days following Recordation of the Notice of Lien, 41 the Board of Directors may enforce any assessment lien provided for in Section 5.9, hereinabove, which is in excess of One Thousand Eight Hundred Dollars ($1,800.00) (not including any accelerated assessments, late charges, fees and costs of collection, attorney’s fees, or interest), or more than twelve (12) months delinquent, (i) by filing an action for judicial foreclosure or (ii) by instituting a nonjudicial foreclosure by the trustee named in the Notice of Lien or by a trustee substituted pursuant to California Civil Code § 2934a (or any successor or replacement statute), by recording a notice of default in the form described in California Civil Code § 2924c(b)(1) (or any successor or replacement statute) to commence a nonjudicial foreclosure sale. A nonjudicial foreclosure sale shall be conducted in accordance with requirements of California Civil Code §§ 2924, 2924b, 2924c, 2924f, 2924g and 2924h (or any successor or replacement statutes) applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any manner permitted by law. The decision to initiate foreclosure of a lien for delinquent assessments that has been validly Recorded shall be made only by the Board and may not be delegated to an agent of the Association. The Board shall approve the decision by a majority vote of the Board members in an executive session. The Board shall record the vote in the minutes of the next meeting of the Board open to all Members. The Board shall maintain the confidentiality of the defaulting Owner(s) by identifying the matter in the minutes by the Unit number, rather than the name of the Owner(s). A Board vote to approve foreclosure of a lien shall take place at least thirty (30) days prior to any public sale. If the Board votes to foreclose upon the Unit, the Board shall provide notice by personal service in accordance with the manner of service of summons in accordance with California Code of Civil Procedure § 415.10 (or any successor or replacement statute) to the defaulting Owner who occupies the Unit or to such Owner’s legal representative. The Board shall provide written notice to a defaulting Owner who does not occupy the Unit by first-class mail, postage prepaid, at the most current address shown on the books of the Association. The Association, through its agents, shall have the power to bid on the Separate Interest at foreclosure sale, and to acquire and hold, lease, mortgage and convey the same. Upon completion of the foreclosure sale, an action may be brought by the Association or the purchaser at the sale in order to secure occupancy of the defaulting Owner’s Unit, and the defaulting Owner shall be required to pay the reasonable rental value for such Unit during any period of continued occupancy by the defaulting Owner or any persons claiming under the defaulting Owner. Suit to recover a money judgment for unpaid assessments shall be maintainable without foreclosing or waiving any lien securing the same, but this provision or any institution of suit to recover a money judgment shall not constitute an affirmation of the adequacy of money damages. Any recovery resulting from a suit at law or in equity initiated pursuant to this Section shall include reasonable attorneys’ fees as fixed by the court. Notwithstanding any provision in the law or in this Declaration to the contrary, a nonjudicial foreclosure by the Association to collect upon a debt for delinquent assessments shall be subject to the right of redemption, as provided in California Civil Code § 5715(b) (or any successor or replacement statute), which right shall run for a period of ninety (90) days after the sale.

5.11 Priority of Assessment Lien.

The lien of the Assessments, including interest and costs of collection (including attorneys’ fees), provided for herein shall be subordinate to the lien of any first Mortgage of record (meaning any Recorded Mortgage or Deed of Trust) upon any Separate Interest made in good faith and for value and Recorded prior to the date on which the lien became effective. Sale or transfer of any Separate Interest shall not affect the assessment lien. However, the sale or transfer of any 42 Separate Interest pursuant to judicial or nonjudicial foreclosure of a first Mortgage with priority over the Assessment lien shall extinguish the lien of such assessments as to payments which became due prior to such sale or transfer. No sale or transfer shall relieve such Separate Interest from liens for any Assessments thereafter becoming due. When the Mortgagee of a first Mortgage of record with priority over the Assessment lien or other purchaser of a Separate Interest obtains title pursuant to a judicial or nonjudicial foreclosure of that first Mortgage, such acquirer of title, his or her successors and assigns, shall not be liable for the share of the Common Expenses or assessments by the Association chargeable to such Separate Interest which became due prior to the acquisition of title to such Separate Interest by such acquirer; provided, however, that all such unpaid share of Common Expenses or assessments shall be deemed to be Common Expenses thereafter collectible from all of the Owners of Separate Interests in the Project, including such acquirer of title, and his or her successors and assigns.

ARTICLE VI

6. Project Easements and Rights of Entry.

6.1 Easements.
(a) Access; Parking. Declarant expressly reserves for the benefit of and grants to the Association and the Owners reciprocal, nonexclusive easements for access, ingress and egress over all of the Common Property which is not now or hereafter restricted or reserved as Exclusive Use Areas, which easements may be conveyed by Declarant to the Owners and to the Association for so long as Declarant owns any interest in the Project. Subject to the provisions of the Restrictions governing use and enjoyment thereof, including, without limitation, the provisions for restriction of Owner access to the Common Property upon the terms and for the reasons set forth in Sections 3.3 and 3.4 above, the Owner easements may be used by all Owners and their Family, guests, tenants and invitees residing on or temporarily visiting the Property, for walkways, vehicular access and such other purposes reasonably necessary for use and enjoyment of a Separate Interest in the Project. (b) Maintenance and Repair. Declarant expressly reserves for the benefit of and conveys to the Board of Directors and all agents, officers and employees of the Association, nonexclusive easements over the Property as necessary to maintain and repair the Common Property, and to perform all other tasks in accordance with the provisions of this Declaration. Such easements over the Property shall be appurtenant to, binding upon, and shall pass with the title to, every Separate Interest conveyed. (c) Utilities. Easements over the Project for the installation and maintenance of electric, telephone and Telecommunication Facilities, water, gas, drainage and sanitary sewer connections and facilities, as may be hereafter required or determined necessary by the Declarant or the Board to service the Project, are hereby reserved by Declarant, together with the right to grant and transfer the same. Declarant expressly reserves for the benefit of the Association the right of Declarant and the Association to grant additional easements and rightsof-way over the Property to utility companies, Telecommunication Services companies and 43 public agencies, as necessary, for the proper development, disposal and operation of the Property. Such right of Declarant shall expire (i) upon Close of Escrow for the sale of all Separate Interests in the Project by Declarant, or (ii) upon expiration of seven (7) years from the date of original issuance by DRE of the Final Subdivision Public Report for the Project.

Declarant hereby reserves and grants the following easements and said easements shall be governed as set forth below:
(1) Each respective utility company shall maintain all utility facilities and connections on the Project owned by such utility company; provided, however, that if any company shall fail to do so, it shall be the obligation of each Owner to maintain those facilities and connections located upon or within such Owner’s Unit and it shall be the obligation of the Association to maintain those facilities and connections located upon the Common Property.

Notwithstanding the foregoing, internal and external telephone wiring designed to serve a single Unit, but is located outside the boundaries of the Unit, shall be maintained by the Owner of said Unit;
(2) Wherever sanitary sewer, water or gas connections, cable television lines, electric lines, telephone or Telecommunication Facilities are installed within the Project and it becomes necessary to gain access to said connections, cables and/or lines through a Unit owned by someone other than the Owner of the Unit served by said connections, cables and/or lines, the Owner of the Unit served by said connections, cables and/or lines shall have the right, and is hereby granted an easement to the full extent necessary therefor, to enter upon such other Unit or to have the utility companies enter upon such other Unit to repair, replace and generally maintain said connections, cables and/or lines;
(3) Whenever sanitary sewer, water or gas connections, cable television lines, electric lines, telephone or Telecommunication Facilities are installed within the Project, and said connections, cables and/or lines serve more than one (1) Unit, the Owner of each Unit served by said connections, cables and/or lines shall be entitled to the full use and enjoyment of such portions of same as service his or her Unit; and (4) In the event of a dispute between Owners with respect to the repair or rebuilding of the aforesaid connections, cables and/or lines, or the sharing of the cost thereof, upon written request of one (1) of such Owners addressed to the Association, the matter shall be submitted to the Board who shall decide the dispute, and the decision of the Board shall be final and conclusive on the Owners.
(d) Support and Encroachments. Declarant, the Association and Owners of contiguous Units shall have a reciprocal easement appurtenant to each of the Units over the adjacent Units and the Common Property for the purpose of (1) lateral and sub-adjacent support, (2) accommodating any existing encroachment of any wall or any Improvement (including, without limitation, utility equipment, pipes, plumbing, mechanical, and other structural appurtenances) resulting from the original construction of the Improvements by Declarant, and (3) maintaining such encroachments and accommodating authorized construction, reconstruction, repair, shifting, movement or natural settling of the Improvements or any other portion of the Project. Easements and reciprocal negative easements for utility services and repairs, replacement and maintenance of the same over all of the Common Property 44 are specifically reserved for the benefit of the Owners. Declarant expressly reserves for the benefit of the Common Property, and for the benefit of the Owners and the Association, reciprocal nonexclusive easements for drainage of water resulting from the normal use of adjoining Units or Common Property, over, across and upon each of the Units and the Common Property. The foregoing easements shall not unreasonably interfere with each Owner’s use and enjoyment of his or her Unit. No portion of the Common Property, including, without limitation, parking areas and other amenities contemplated as a part of the Property, are proposed to be leased by Declarant to the Owners or to the Association. (e) Declarant’s Rights. Declarant expressly reserves for its benefit the right and easement for access, ingress and egress on and over the Project to complete any Improvement which Declarant deems necessary or desirable to implementation of the Declarant’s development plan for the Project and to install and maintain such structures, displays, advertising signs, billboards, flags, sales offices, model homes, interior design and decorator centers, and parking areas for employees, agents, and prospective buyers as may be reasonably necessary or convenient for the proper development and disposition of the Separate Interests located within the Project by sale, resale, lease or otherwise, including, without limitation, operation of a sales office. Declarant further reserves for its benefit the right and easement for access over the Property for construction equipment, access over and through the Project for purposes of equipment, material and construction staging, and access over and through the Project by all contractors, subcontractors, employees and other personnel used in connection with the planning, design, excavation, construction and other improvement work necessary to development of the Project. Declarant further expressly reserves for its benefit the right to hereafter create and convey such easements, covenants, conditions, restrictions, and licenses against, over, on, above or below the Project and the Property as necessary or helpful to facilitate the design, engineering, processing, approval, financing, development, construction and maintenance of the Project and the Property, including, without limitation, easements, covenants, conditions, restrictions, and licenses reasonably necessary to meet set-back, open space, access, fire safety, or other zoning or planning requirements or policies. This Declaration cannot be amended to modify or eliminate the easements reserved to Declarant by this or any other Section without prior written consent of Declarant, and any attempt to do so shall have no effect.
(f) Exclusive Use Areas. Declarant expressly reserves for the benefit of and grants to certain Owners of Units in this Project exclusive easements over the Common Area for Exclusive Use Areas for parking and storage purposes, and for internal and external telephone wiring designed to serve a single Unit but located outside the boundaries of that Unit, in accordance with California Civil Code Section 4145 (or any successor or replacement statute), and shown on the Condominium Plan or in a supplemental conveyance to such Owner pursuant to the rights reserved to the Declarant in Article VII below. (g) Easements for Air Conditioning/Heating Units. As to any air conditioning and/or heating equipment which is located on a portion of the Common Property, there is hereby created, established and granted an exclusive easement on, over and across said portion of the Common Property for the permanent placement of such equipment. Additionally, each Owner is granted an easement for ingress, egress and access on and over the Common 45 Property to install, maintain, repair and replace his or her respective air conditioning and/or heating equipment.
(h) Grant of Easements Benefiting Commercial Units. Subject to any express conditions, limitations or reservations contained herein, Declarant expressly reserves for the benefit of, and conveys to the Commercial Owners and its permittees (i) an exclusive easement for use of any doors, chutes, vents, shafts and other improvements located on the Project which are designated by Declarant or the Project design documents for the exclusive use of a Commercial Unit; (ii) a non-exclusive easement over, upon, across and through the Project as reasonably necessary to permit a Commercial Owner and its permittees to install, construct, access, use, maintain, repair and replace the improvements, systems and equipment serving the Commercial Unit in whole or in part, including, without limitation, any HVAC equipment, security monitors and equipment, and any exhaust and grease interceptor systems; (iii) a nonexclusive easement over, upon, across and through the Project as reasonably necessary to permit a Commercial Owner, its permittees, and its permittees’ agents, employees, invited guests and customers, access to the Commercial Unit, for the purpose of conducting business therein; (iv) an exclusive easement on, over and upon those certain portions of the Project designated for commercial trash collection, and electrical and mechanical panel and equipment purposes; and (v) an easement for the benefit of a Commercial Owner on and over the portions of the exterior walls of the buildings in the Project, as necessary for installation, construction, reconstruction, replacement, operation, maintenance and repair of commercial signs for the businesses located within such Commercial Unit.

6.2 Rights of Entry.

The Board of Directors shall have a limited right of entry in and upon the Common Property and the interior of all Units for the purpose of inspecting the Project and taking whatever corrective or maintenance action may be deemed necessary or proper by the Board of Directors, consistent with the provisions of this Declaration. However, such entry upon the interior of a Unit shall be made, except to effect emergency repairs or other emergency measures, only after three (3) days prior written notice to the Owner of such Unit. Nothing herein shall be construed to impose any obligation upon the Association to maintain or repair any property or Improvements required to be maintained or repaired by the Owners. Nothing in this Article VI shall in any manner limit the right of the Owner to exclusive occupancy and control over the interior of his or her Unit. However, an Owner shall permit a right of entry to the Board of Directors or any other person authorized by the Board of Directors, as reasonably necessary, such as in case of any emergency originating in or threatening his or her Unit, whether the Owner is present or not. Any damage caused to a Unit by such entry by the Board of Directors or by any person authorized by the Board of Directors shall be repaired by the Association as a Common Expense of the Association.

Furthermore, an Owner shall permit other Owners, or their representatives, to enter his or her Unit for the purpose of performing required installations, alterations or repairs to the mechanical or electrical services to a Unit, provided that such requests for entry are made at least three (3) days in advance and entry is made at a time reasonably convenient to the Owner whose Units is to be entered; and provided further, that the entered Unit is left in substantially the same condition as existed immediately preceding such entry. In case of an emergency, such right of 46 entry shall be immediate. Any damage caused to a Unit by such entry by an Owner or its representative shall be repaired by such Owner.

Upon receipt of reasonable notice from the Association (which shall in no event be less than fifteen (15) days nor more than thirty (30) days) each Owner shall vacate his or her Unit in order to accommodate efforts by the Association to perform any other maintenance or repairs pursuant to the Declaration. The Board shall have the right to enter the Units and the right to remove Owners from their Units, as necessary, to accomplish its duties as provided herein. The cost of eradicating any pest infestation or of performing any such maintenance or repairs shall be a Common Expense of the Association; however, each Owner shall bear his or her own costs of temporary relocation. If the Association acts to eradicate any pests or organisms, then the procedure established in Section 2.7 shall control.

ARTICLE VII

7. Declarant’s Rights and Reservations.

Nothing in the Restrictions shall limit, and neither any Owner nor the Association shall do anything to interfere with, the right of Declarant to subdivide or resubdivide any portion of the Property, or to complete Improvements to and on the Common Property or any portion of the Property owned solely or partially by Declarant, or to alter the foregoing or its construction plans and designs, or to construct such additional Improvements as Declarant deems advisable in the course of development of the Property so long as any Separate Interest in the Project remains unsold; provided, that an alteration of Declarant’s construction plans shall require prior approval of VA and FHA if such alteration is inconsistent with the general plan of development approved by VA and FHA.

The rights of Declarant hereunder shall include, but shall not be limited to, the exclusive right to install, maintain, locate, relocate and reconfigure such structures, displays, signs, billboards, flags, sales offices, model homes, construction office, interior design and decorator centers, as may be reasonably necessary or convenient in Declarant’s judgment for the proper development and disposition of the Separate Interests located within the Project by sale, resale, lease or otherwise, and the right to use any portions of the Project necessary to provide ongoing maintenance, operation, service, construction, punch-out, and repairs to individual Units.

Notwithstanding anything in the Restrictions which is or appears to be to the contrary, Declarant may use any Separate Interest owned by Declarant in the Project as model homes, construction office and/or real estate sales or leasing offices; provided that use of such office shall be limited to construction of the Project and/or sales, resales and leasing of any real property regardless of whether located within or outside of the Project. Declarant further reserves the right to modify the size, configuration or appearance of the "Sales Office" from time to time without the approval or consent of any Owner, the Committee or the Board, and to relocate the Sales Office from time to time within the Common Area provided that such relocation shall not result in a material increase in the total size of the Sales Office or otherwise have a material adverse effect on the use of the Common Area for its intended purpose (such as by permanently displacing an amenity or service that is not otherwise relocated or replaced following such displacement). 47 Notwithstanding anything in the Restrictions which is or appears to be to the contrary, Declarant may use any Separate Interest owned by Declarant in the Project, or portions of the Common Property as model homes, construction office and/or real estate sales or leasing offices; provided that use of such office shall be limited to construction of the Project and/or sales, resales and leasing of the Separate Interests located on the Property.

Declarant need not seek or obtain Architectural Committee approval of any Improvement constructed, reconstructed, modified or placed by Declarant on any portion of the Property by Declarant. Declarant also reserves the right, following Recordation of this Declaration and the Condominium Plan and continuing so long as Declarant owns any interest in the Project, to create (in addition to those shown on the Condominium Plan and/or allocated to each Owner in connection with the original purchase of its Condominium), assign to each Owner a parking spaces or spaces within the Project for their exclusive use. Declarant further reserves the right (but not the obligation), subject to DRE review of a revised budget for the Project, to provide for a “split roll” or “cost center” dues structure, so that the maintenance costs associated with maintenance of Common Property, or identified elements thereof, within separate portions of the Project are segregated and borne by the Owners of the Units within those portions of the Project. All or any portion of the rights of Declarant hereunder and elsewhere in these Restrictions may be assigned by Declarant to any successor in interest to any portion of Declarant’s interest in any portion of the Property by written assignment. Notwithstanding any other provision of this Declaration to the contrary, the prior written approval of Declarant, which may be granted or withheld in its sole discretion, will be required before any amendment of this Article shall be effective. Each Owner, hereby grants, upon acceptance of his deed to his Unit, an irrevocable, special power of attorney to Declarant to execute and Record all documents and maps necessary to allow Declarant to exercise its rights under this Article. Declarant and its prospective purchasers of Separate Interests shall be entitled to the nonexclusive use of the Common Property and any recreational facilities thereon, without further cost for access, ingress, egress, use or enjoyment, in order to show the Property to those prospective purchasers, to dispose of the Property as provided herein. Declarant and its prospective purchasers of Separate Interests shall be entitled to the nonexclusive use of the Common Property and recreational facilities thereon, without further cost for access, ingress, egress, use or enjoyment, in order to show the Property to those prospective purchasers, to dispose of the Property as provided herein. Declarant, its successors and tenants, shall also be entitled to the nonexclusive use of any portions of the Property which comprise private streets, drives and walkways for the purpose of ingress, egress and accommodating vehicular and pedestrian traffic to and from the Property. The use of the Common Property by Declarant shall not unreasonably interfere with the use thereof by the other Members. Each Owner, by accepting a deed to a Separate Interest, hereby acknowledges that the activities of Declarant may temporarily or permanently impair the view of such Owner and may constitute an inconvenience or nuisance to the Owners, and hereby consents to such impairment, inconvenience or nuisance. This Declaration shall not limit the right of Declarant to establish, reserve, and/or grant additional licenses, easements, reservations and rights-of-way to itself, to utility companies, or to others as may from time to time be reasonably necessary for the proper development and disposal of the Project.

Notwithstanding any other provisions of this Declaration to the contrary, and without limiting Declarant’s unilateral rights provided elsewhere in this Declaration or in the Restrictions, until such time as Owners other than Declarant own at least seventy-five percent (75%) of the Units within the Project, or until the fifth (5th) anniversary of the first Close of Escrow 48 for a Unit, whichever occurs first, Declarant’s written consent shall be required before the Association may take any action with respect to the following:
(a) Reduction in the level of, or change in allocation of responsibility for maintenance of and repairs to all or any portion of the Common Property subject to this Declaration, or any other maintenance obligations of the Association set forth in this Declaration; (b) Conveyance by the Association of all or any portion of the Common Property;
(c) Alteration in the method of fixing and collecting Assessments or any increases in Assessments beyond the amounts permitted under Article V of this Declaration; (d) Modification of the enforcement and review procedures of the Architectural Committee, or any change in the architectural and landscaping design originally installed by Declarant;
(e) Modification to Improvements on the Common Property or to the level or frequency of maintenance of the Common Property; or (f) Alteration in the method of enforcing the provisions of this Declaration.

Each Owner, by accepting a deed to a Separate Interest, hereby irrevocably appoints Declarant as his or her attorney-in-fact, for himself or herself and each of his or her Mortgagees, optionees, grantees, licensees, trustees, receivers, lessees, tenants, judgment creditors, heirs, legatees, devisees, administrators, executors, legal representatives, successors and assigns, whether voluntary or involuntary, for a period of ten (10) years after the Close of Escrow for the sale of the last Unit in the Project covered by a Final Subdivision Public Report and hereby grants to Declarant an irrevocable limited power of attorney coupled with an interest for Declarant to act as his or her attorney-in-fact in connection with any modification to the development plans of all or any portion of the Project. Each Owner hereby acknowledges and agrees that this irrevocable limited power of attorney is: (a) retained for the benefit of the Declarant and not the Owner; and (b) created by Owner’s acceptance of a deed to a Separate Interest and as part of the consideration for the purchase and sale of a Separate Interest. Based on the foregoing, each Owner further acknowledges and agrees that this irrevocable limited power of attorney is “coupled with an interest” and, pursuant to § 2356 of the California Civil Code, as same may be amended, from time to time, may not be terminated by: (a) the Owner’s revocation of such limited power of attorney; (b) the Owner’s death; or (c) the Owner’s incapacity to contract. In furtherance thereof and subject to the limitations and restrictions set forth in this Article, Declarant shall have the right and power as a duly authorized attorney-in-fact to perform any of the following actions:
(a) To prepare, execute, acknowledge and record any map, lot line adjustment, certificate of compliance or record of survey affecting the Project; (b) To prepare, execute, acknowledge and record any amendments necessary to cause a Condominium Plan to conform with the Improvements as actually built or with the approved plans for the Project;
49 (c) To prepare, execute, acknowledge and file for approval any application for zoning or setback changes or lot line adjustments, or variance or conditional use permits, or any other permits or reports required or permitted by law; (d) To make applications for any property reports or public reports, or amendments thereto, or exemption from the requirements therefor required or permitted by federal and State statutes, rules and regulations relating to the sale, lease, transfer or other disposition of subdivided lands;
(e) To deliver any public reports or property reports, or amendments thereto, obtain receipts and offer and administer rescission rights required by law; (f) To prepare, execute, acknowledge and file for approval any registration or application for any permit, approval, exemption, ruling or entitlement, which registration or application is required or permitted by law; (g) To prepare, execute, acknowledge and record any deeds, waivers, releases, reconveyances or other documentation which may be permitted or required to (i) clear title to any constructed or unconstructed Units in the Project, (ii) evidence the modifications made to the Project pursuant to this Section, or (iii) correct any errors or omissions in any deed or other instruments; and
(h) To prepare, execute, acknowledge and record on behalf of the Owners and the Association any easement over the Common Property, including, without limitation, any easements reasonably necessary for the development and disposition of Separate Interests within the Project.

The Association shall provide Declarant with all notices and other documents to which a Beneficiary is entitled pursuant to this Declaration, provided that Declarant shall be provided such notices and other documents without making written request therefor. In the event of any disagreement as to the reasonableness of said annual and/or special assessments, or the division thereof, the matter shall be submitted to a neutral arbitrator approved by the Board and the representative of the owners benefitted by such easements or, in the absence of agreement on such arbitrator, by a judicial reference action pursuant to Code of Civil Procedure §§ 638-645.1 (or any successor or replacement statutes thereto).

Declarant shall have the right to assign any or all of its rights and obligations in this Declaration to any successor in interest by a written assignment. Notwithstanding any other provision of this Declaration to the contrary, the prior written approval of Declarant, which may be granted or withheld in its sole discretion, will be required before any amendment to this Article VII shall be effective. The foregoing rights established and reserved by Declarant shall be subject only to the applicable regulations and requirements of the DRE and the city or county in which the Project is located.

For a period of ten (10) years after the Close of Escrow for the sale of the last Unit in the Project, in addition to Declarant’s rights as an Owner and a Member, Declarant shall have the following rights: (1) access to and the right to inspect the Association books and financial records; (2) access to and the right to inspect the Association’s maintenance records; (3) access to 50 and the right to inspect the Common Property; (4) right to receive notice of, attend and speak at all meetings of the Members; and (5) right to receive copies of the minutes of the meetings of the Board of Directors and meetings of the Members, upon request and payment of the actual costs to copy and distribute such records.

ARTICLE VIII

8. Residence and Use Restrictions.

All residential Units in the Project shall be held, used and enjoyed subject to the following limitations and restrictions, subject to the exemptions of Declarant set forth in this Declaration.

8.1 Single Family Residences.

Each residential Unit shall be used exclusively for single Family residential purposes, subject to the exemption granted Declarant under Article VII of this Declaration. An Owner may rent or lease his or her residential Unit to a single Family pursuant to the Leasing Provisions set forth herein.
(a) Leasing Provisions. The following provisions shall govern leasing of Units:
(1) General. Units may be leased only in their entirety pursuant to a single lease agreement with only a single Family as the permitted occupant under this Declaration. All leases must be in writing and for not less than thirty (30) days. Within seven (7) days after executing a lease agreement for the lease of a Unit, the Unit Owner shall provide the Board with a copy of the lease and the name of the lessee and all other people occupying the Unit.

The Owner must provide the lessee with copies of the Declaration, Bylaws, and Rules and Regulations.
(2) Compliance with Restrictions and Liability for Assessments.

Each Owner and each lessee, by occupancy of a Unit, covenants and agrees that any lease for a Unit shall contain the following provisions and agrees that if such provisions are not expressly contained therein, then such provisions shall be deemed incorporated into the lease by existence of this covenant on the Unit:
(A) Compliance with Declaration, Bylaws, and Rules
and Regulations. The lessee shall comply with all provisions of the Restrictions and shall control the conduct of all other occupants and guests of the leased Unit in order to ensure compliance with the foregoing. The Owner shall cause all occupants and guests of his or her Unit to comply with the Restrictions and shall be responsible for all violations by such occupants and guests, notwithstanding the fact that such occupants and guests are fully liable and may be separately sanctioned for any such violation. Unpaid fines shall, at the election of the Board, be recorded as a lien against the Unit, provided any such lien shall not be subject to non-judicial foreclosure under California Civil Code §§ 2924a, 2924b and 2924c (or any successor or replacement statutes). 51 (B) Violation of Restrictions. Any violation of the
Restrictions by the lessee, any occupant, or any guest of lessee, shall be deemed a default under the terms of the lease and shall authorize the Owner to terminate the lease without liability and to evict the lessee in accordance with California law. The Owner hereby delegates and assigns to the Association, acting through the Board, the power and authority of enforcement against the lessee for breaches resulting from such violations, including the power and authority to evict the lessee as attorney-in-fact on behalf and for the benefit of the Owner, in accordance with the terms hereof.

If the Association proceeds to evict the lessee, any costs, including attorney’s fees and court costs, associated with the eviction shall be a Special Assessment and lien against the Unit. (C) Liability for Assessments. When a Unit Owner who
is leasing his or her Unit fails to pay any Annual Assessment or other Assessment or any other charge to be paid by the Owner to the Association pursuant to this Declaration for a period of more than thirty (30) days after it is due and payable, then the delinquent Owner hereby consents to the assignment of any rent received from the lessee during the period of delinquency, and, upon request by the Board, lessee shall pay to the Association all such rent until all unpaid amounts owed by the Owner to the Association have been paid in full. All such payments made by lessee shall reduce, by the same amount, lessee’s obligation to make monthly rental payments to lessor.

The above provision shall not be construed to release the Owner from any obligation, including the obligation for Assessments, for which he or she would otherwise be responsible. (b) Inapplicability to Institutional First Mortgages. Section 8.1 shall not apply to any leasing transaction entered into by an institutional holder (i.e., a bank, a savings and loan association, an established mortgage company or other entity chartered under federal or state laws, an insurance company, or any federal or state agency) of any first Mortgage on a Unit who becomes the Owner of a Unit through foreclosure or any other means pursuant to the satisfaction of the indebtedness secured by such Mortgage.

8.2 Alterations; Inside and Outside Installations.

No Owner shall make or cause to be made structural alterations to his or her Condominium Unit or to the Common Property which will or may tend to impair the structural integrity, mechanical systems, or sound attenuation standards of the Condominium Building, or would have a material detrimental effect on another Unit or on the Common Property, except as otherwise expressly provided herein. No outside installation of any type, including but not limited to stereo speakers or other amplified sound equipment, shall be constructed, erected or maintained on any Terrace or outside any Condominium Unit, except as may be installed by Declarant, or with the prior consent of the Architectural Committee. No Terrace covers, wiring, air conditioning units, water softeners, or other machines or equipment of any kind or nature shall be installed on the exterior of the buildings of the Project or be allowed to protrude through the walls, floors, ceilings, windows, doors, or roofs of the buildings (with the exception of those items installed during the original construction of the Project), unless the prior written approval of the Architectural Committee is secured. Notwithstanding the specificity of the foregoing, no exterior addition, change or alteration to any Separate Interestshall be commenced without the prior written approval of the Architectural Committee. Each Owner shall be liable for any damage or injury caused by any alterations, replacements, or installations, or any machines or equipment used to perform such work. There shall be no alteration or replacement of wall coverings or flooring 52 materials which may diminish the effectiveness of the sound control engineering within the Condominium Building. No Owner shall cause or permit any mechanic’s lien to be filed against any portion of the Common Property for labor or materials alleged to have been furnished or delivered to the Project or any Separate Interest at the request of such Owner, and any Owner who does so shall immediately cause the lien to be discharged within five (5) days after notice to the Owner from the Board. If any Owner fails to remove such mechanic’s lien, the Board may discharge the lien and charge the Owner a Special Assessment for such cost of discharge.

8.3 Animal Regulations.

No animals, livestock, reptiles, insects, poultry or other animals of any kind shall be kept in any Separate Interest except that usual and ordinary domestic dogs, cats, fish, and birds inside bird cages may be kept as household pets within any Separate Interest provided that they are not kept, bred or raised therein for commercial purposes or in unreasonable quantities or sizes.

As used in this Declaration, “unreasonable quantities” shall ordinarily mean more than four (4) pets (except with regard to quantities of fish, which may be more than two (2) per Separate Interest; provided, however, that the Board may determine that a reasonable number of pets in any instance may be more. Any dog which weighs more than thirty (30) pounds must be approved by the Board, and must be trained and have an obedience certificate issued by a licensed training agency prior to being kept on the Project. Aquariums for aquatic animals shall not exceed thirty (30) gallons. No potbellied pigs, snakes, pit bulldogs, Rottweiler, Doberman dogs, Canary Mastiff, or any other dog breed known as a “fighting breed” or mix thereof, or any other animals determined in the Board’s sole discretion to be dangerous or a nuisance may be brought onto or kept on the Project at any time. The Board shall have the right to require that any pet which, in the Board’s opinion, endangers the health or security of any Owner or occupant of a Unit or creates a nuisance or unreasonable disturbance, be permanently removed from the Project upon seven (7) days written notice. If the Owner or occupant fails to do so, the Board may remove the pet. Any pet which, in the Board’s sole discretion, presents an immediate danger to the health, safety, or property of any Owner or other occupant of a Unit may be removed by the Board without prior notice to the pet’s owner. Animals belonging to Owners, occupants or their licensees, tenants or invitees within the Property must be kept inside the Dwelling Unit or within the Terrace of that Unit, and must be on a leash (not more than four feet (4’) in length) held by a person capable of controlling the animal if outside of a Unit. Furthermore, any Owner shall be liable to each and all remaining Owners, their Families, guests and invitees, for any unreasonable noise or damage to person or property caused by any animals brought or kept upon the Project by an Owner or by members of his or her Family, tenants or guests. It shall be the duty and responsibility of each such Owner to clean up after such animals which have deposited droppings on or otherwise used any portion of the Common Property or any public street abutting or visible from the Property and properly dispose of any animal waste. Any Owner or occupant who keeps or maintains any pet upon the Project shall be deemed to have indemnified and agreed to hold the Association, its directors, officers, and agents, and the Declarant free and harmless from any loss, claim, or liability of any kind or character whatever arising by reason of keeping or maintaining such pet within the Project.

8.4 Antenna.

No radio station, satellite or shortwave operators of any kind shall operate from any Unit or any other portion of the Property unless approved by the Architectural Committee. With 53 the exception of any master antenna maintained by the Association, no exterior radio antenna, “C.B.” antenna, television antenna, receiving station, satellite dish or other antenna of any type (collectively, “Signal Reception Device”) shall be erected or maintained anywhere in the Property, without the approval of the Architectural Committee. In considering whether to approve any such application and what conditions, if any, to impose thereon, the Committee may consider any clearly defined safety objective, the impact of any such Signal Reception Device upon Project aesthetics and uniformity of appearance, and any potential structural damage arising from such Signal Reception Device, provided that any restriction imposed by the Committee shall be reasonable, as required by California Civil Code § 4725 (or any successor or replacement statute) and rules and regulations promulgated by the Federal Communications Commission pursuant § 207 of the Telecommunications Act of 1996 (collectively, the “Antenna Statutes”). In no event shall the Committee impose any requirement in violation of the Antenna Statutes that would unreasonably delay or prevent installation, maintenance or use of such Signal Reception Device within an Owner’s Unit’s boundaries and/or exclusive use areas, unreasonably increase the cost of installation, maintenance or use, or prevent reception of an acceptable quality signal. In reviewing an application for approval to install a Signal Reception Device, the Committee shall apply the same standards, criteria and guidelines to such application as applicable to any other proposed exterior improvement to any Unit and shall not impose any differential or discriminatory requirements applicable only to a proposed Signal Reception Device. In granting approval of the installation of any such Signal Reception Device, the Architectural Committee may further condition such approval upon compliance with any reasonable restrictions authorized by Antenna Statutes, including, without limitation, provisions concerning the maintenance, repair, or replacement of roofs or other Dwelling Unit components and requirements for the installing Owner to indemnify the Association and its Members for loss or damage caused by the installation, maintenance, or use of those Improvements.

8.5 Business or Commercial Activity.

Except for uses which are permitted to be conducted within the Commercial Units, no part of a residential Unit shall ever be used for any business, professional, administrative, commercial (including auctions or similar events), manufacturing, mercantile, storage, vending or other nonresidential purposes including, without limitation, any activity for which the provider is compensated in any way or receives any form of consideration, regardless of whether the activity is engaged in full or part-time, generates or does not generate a profit, or requires or does not require a license; except that Declarant, its successors and assigns may use any portion of the Property for a model home site and for sales and leasing purposes in accordance with Article VII hereof. Notwithstanding the foregoing, the provisions of this Section 8.5 shall not preclude any of the above-described activities without external evidence thereof, provided that all of the following conditions are fulfilled: (a) such activities are conducted in conformance with all applicable governmental ordinances; (b) the patrons or clientele of such activities do not visit the Unit or park automobiles or other vehicles within the Property; (c) the existence or operation of such activities is not apparent or detectable by sight, sound or smell from outside of the boundaries of the Unit (except that a reasonable number of deliveries which does not disproportionately burden the services of the Project by couriers, express mail carriers, parcel delivery services and other such similar delivery services are permitted during business hours); (d) no such activity increases the liability or casualty insurance obligation or premium of the Association; and (e) such activities are consistent with the residential character of the Property and conform with the 54 provisions of this Declaration. No Owner shall use his or her Separate Interest in such a manner as to interfere with the business of Declarant in selling Separate Interests in the Project, as set forth in Article VII of this Declaration.

No part of any Commercial Unit shall ever be used for any business, commercial, industrial, manufacturing, mercantile, storage, vending or other commercial purposes that are inconsistent with, not authorized or contemplated by the City’s zoning regulations.

Additionally, notwithstanding the foregoing restrictions and requirements, the provisions of this Section 8.5 shall not preclude any of the following:
(a) Health care facilities operating as a business or charity and serving the sick, elderly, disabled, handicapped, or persons with physical, intellectual and developmental disabilities which are permitted by law or ordinance that preempts this Declaration; or (b) Family day care center for children which are specifically authorized by California Health and Safety Code § 1597.40 and other applicable state statutes.

The owner/operator of the day care center shall comply with all local and state laws regarding the licensing and operating of a day care center and, in addition, shall (i) name the Association as an additional insured on the liability insurance policy or bond carried by the owner/operator of the day care center, (ii) defend, indemnify and hold the Association harmless from any liability arising from the existence and operation of the day care center, (iii) comply with all of the Restrictions, (iv) supervise and be completely responsible for children at all times while they are within the Project.

8.6 Cannabis. No cannabis cultivation or smoking of cannabis shall be permitted within the Project. Cannabis shall include marijuana, hashish, substances that include parts of the plant Cannabis Sativa, seeds of the plant Cannabis Sativa, any compound or manufacture such as tetrahydrocannabinol (THC) and all other cannabinol derivatives, and naturally occurring or synthetically produced ingredients derived from the plant Cannabis Sativa.

Smoking shall include inhaling, exhaling, or breathing upon burning or carrying any lighted or heated smoking equipment.

8.7 Tobacco. No smoking of forms of tobacco shall be permitted within the Condominium Building. Forms of tobacco shall include but not limited to cigarettes, cigars, electronic cigarettes, and waterpipes. Smoking shall include inhaling, exhaling, or breathing upon burning or carrying any lighted or heated smoking equipment.

8.8 Common Property Facilities.

Nothing shall be altered, constructed, or removed from the Common Property without the prior written consent of the Board of Directors. There shall be no obstruction of the Common Property nor shall anything be stored in the Common Property without the prior written consent of the Board of Directors. No acquisition of additional Common Property shall be undertaken without the approval of the Board of Directors. The Board of Directors shall have the right to limit the number of guests that an Owner or such Owner’s tenant may permit to use the recreational facilities and other Common Property areas, and the Board shall have the right to set further reasonable restrictions on the time and manner of use of said recreational facilities and 55 other facilities in accordance with the Rules and Regulations, including, without limitation, Rules and Regulations restricting or prohibiting the use of all or designated portions of the recreational facilities of the Property by minors, guests of an Owner or his or her tenants.

8.9 Drainage.

There shall be no interference with or alteration of the established drainage pattern over the Property, unless an adequate alternative provision is made for proper drainage and is first approved in writing by the Architectural Committee. For the purpose hereof, “established” drainage is defined as the drainage which exists at the time of the first Close of Escrow for the sale of a Separate Interest in the Project, or that which is shown on any plans approved by the Architectural Committee.

No Person (including the Association) may block or interfere with the proper function or maintenance of any Drainage and Water Quality Improvements on the Separate Interest. No Person may modify, remove existing Improvements or change the flow of surface water without first obtaining all required approvals from the applicable governmental authorities for an alternative drainage plan. Therefore, no Person may install, alter, modify, remove or replace any Drainage and Water Quality Improvements on his or her Separate Interest without first making alternative drainage arrangements approved in writing by the applicable governmental authorities.

Owner-installed irrigation systems must be installed and maintained to prevent excess runoff and accumulation of surface water.

8.10 Exterior Fires; Barbecues.

No exterior fires shall be permitted except barbecue fires contained within receptacles therefor.

8.11 Firearms and Fireworks.

The display and discharge of firearms or fireworks on the Common Property is prohibited; provided that the display of lawful firearms on the Common Property is permitted by law enforcement officers and also is permitted for the limited purpose of transporting lawful firearms across the Common Property to or from the Owner’s Unit. The term “firearms” includes “B-B” guns, pellet guns, and other firearms of all types, regardless of size.

8.12 Further Subdivision.

Except as otherwise provided in Article VII, no Owner shall physically or legally subdivide his or her Unit in any manner, including without limitation any division of his or her Unit or Separate Interest into time-share estates or time-share uses; provided, however, that this provision shall not be construed to limit the right of an Owner (1) to rent or lease all of his or her Unit by means of a written lease or rental agreement subject to the restrictions of this Declaration; (2) to sell his or her Separate Interest; or (3) to transfer or sell any Separate Interest to more than one Person to be held by them as tenants-in-common, joint tenants, tenants by the entirety or as community property. Any failure by the lessee of the Unit to comply with the terms of this Declaration, the Bylaws of the Association or the Rules and Regulations or any other Restrictions, shall constitute a default under the lease or rental agreement. Notwithstanding the foregoing, no 56 Unit in the Project may be partitioned or subdivided without the prior written approval of the Beneficiary of any first Mortgage on that Unit. This Section may not be amended without the prior written approval of the Beneficiaries of at least seventy-five percent (75%) of the first Mortgages of Separate Interests in the Project.

8.13 Garbage/Trash.

No garbage, trash, rubbish, or other waste material shall be kept or permitted on the Project except in garbage cans, trash containers, trash chutes, or other waste receptacles located on the Project provided for the use of all Owners. All trash must be bagged or otherwise sealed before using any trash chute located in the Project. No odor shall emanate therefrom so as to be unreasonably unsanitary, unsightly, offensive or detrimental to the Owners in the Project. Under no circumstances may explosives, fireworks, or highly flammable materials such as gasoline, kerosene, oil, oil-based paints, or solvents, be disposed of in the trash chutes or anywhere else in the Project. Any and all costs incurred by the Association for the removal of combustible or toxic materials from the trash chutes shall be borne by the offending Owner at such Owner’s sole cost and expense.

8.14 Hazardous, Toxic, Flammable, Corrosive or Explosive Materials.

No Owner nor any Family member, tenant, lessee, agent, employee, licensee, or guest shall at any time bring onto or store in or on the Project any hazardous, toxic, flammable, corrosive or explosive solid, liquid, gas, or chemical substance or other material which may be hazardous to any Person or property, except for household items, handled, store and applied in accordance with all applicable government restrictions, which are normal and customary to the use and enjoyment of a residential dwelling. Use and disposal of pesticides, fungicides, herbicides, insecticides, fertilizers, and other such chemical treatments shall meet federal, state, county, and city requirements. Under no circumstances may explosives or fireworks be stored by Owners on their Units or elsewhere within the Project. Nothing other than natural rain water may be discharged into the storm drains and storm drainage system located on the Property. Toxic chemicals or hydrocarbon compounds such as gasoline, motor oil, antifreeze, solvents, paints, paint thinners, wood preservative and other such fluids shall not be discharged into storm drains or storm drainage systems on the Property or into any street, public or private. All water softeners installed in a Unit must be commercially serviced.

8.15 Nuisances.

No noxious or offensive activities (including but not limited to the repair of motor vehicles) shall be carried on upon the Property or on any public street abutting or visible from the Property. No horns, whistles, bells or other sound devices, except security devices used exclusively to protect the security of a Residence and its contents, shall be placed or used in any such Residence. No loud noises, noxious odors, noisy or smoky vehicles, large power equipment or large power tools (excluding lawn mowers and other equipment utilized in connection with ordinary landscape maintenance), unlicensed off-road motor vehicles or items which may unreasonably interfere with television or radio reception of any Owner in the Project, shall be located, used or placed on any portion of the Property or on any public street abutting or visible from the Property, or exposed to the view of other Owners without the prior written approval of 57 the Architectural Committee. The Board of Directors of the Association shall have the right to determine if any noise, odor, or activity producing such noise or odor constitutes a nuisance. No Owner shall permit or cause anything to be done or kept upon the Property or on any public street abutting or visible from the Property which may increase the rate of insurance on Units or on the Property, or result in the cancellation of such insurance, or which will obstruct or interfere with the rights of other Owners. No Person shall commit or permit any nuisance on the Property. Each Owner shall comply with all of the requirements of the local or state health authorities and with all other governmental authorities with respect to the occupancy and use of a Residence. Each Owner shall be accountable to the Association and other Owners for the conduct and behavior of children and any other Family members or persons residing in or visiting his or her Unit. Any damage to the Common Property, personal property of the Association, or property of another Owner, caused by such children, Family members, or other persons, shall be repaired at the sole expense of the Owner of the Unit where such children, Family members or other persons are residing or visiting.

8.16 Parking and Vehicular Restrictions.
(a) Authorized Vehicles. The following vehicles are Authorized Vehicles within the residential parking areas: motorized land vehicles designed and used primarily for non-commercial passenger transport, such as automobiles, passenger vans designed to accommodate ten (10) or fewer people, two-wheel motorcycles, and pick-up trucks having a manufacturer’s rating or payload capacity of one (1) ton or less. Subject to Section 8.14(c) below, Authorized Vehicles of Owners and guests of Owners may park in the guest parking areas in the Property intended for parking of motorized vehicles. (b) Prohibited Vehicles. T The following vehicles are Prohibited Vehicles within the residential parking areas: recreational vehicles (e.g., motor homes, travel trailers, camper vans, boats, dune buggies, etc.), commercial-type vehicles (e.g., stake bed trucks, tank trucks, dump trucks, step vans, concrete trucks, trucks with any exterior commercial advertisement, or other similar vehicles), buses or vans designed to accommodate more than ten (10) people, vehicles having more than two (2) axles, trailers, inoperable vehicles or parts of vehicles, aircraft, other similar vehicles or any vehicle or vehicular equipment deemed a nuisance by the Board. Except as permitted in this Section 8.14, Prohibited Vehicles shall not be parked, stored or kept on any public or private street or driveway within or adjacent to the Property or on any other Common Property parking area unless specifically permitted by the City (with respect to public streets) or authorized by the Board (with respect to private driveways within the Common Property).
(c) General Restrictions. All Authorized Vehicles owned or operated by or within the control of an Owner or a resident of an Owner’s Unit and kept within the Property shall be parked in that Owner’s assigned parking space. There shall be no parking in the Property that obstructs free traffic flow, constitutes a nuisance, violates the Rules and Regulations, or otherwise creates a safety hazard. The residential parking spaces in the Property shall be used for parking Authorized Vehicles only and shall not be used for storage, living, recreational or business purposes. No repair, maintenance or restoration of any vehicle shall be conducted on the Property. No parking shall be permitted in the fire lanes located in the Project, which fire lanes shall be appropriately marked and identified by the Association. 58 (d) Parking Regulations. Any guest parking space within the Common Property shall remain unassigned and available for the nonexclusive use of the Owners and their Family, guests, tenants and invitees residing on or temporarily visiting the Property. In any event, no stopping shall be permitted in any fire lanes located in the Project. The Board may establish additional regulations as it deems appropriate in its sole discretion with regard to any of the parking areas in the Project. Any parking areas established on the Common Property shall be subject to such further reasonable control and use limitations as the Board of Directors may establish. The Board shall determine, in its discretion, whether there is a violation of the parking and vehicular restrictions set forth in this Declaration or established by the Board, and, if such noncompliance is determined by the Board to exist, the Board shall have the power to enforce all parking and vehicle use regulations applicable to the Property, including the power to remove violating vehicles from any of the Property pursuant to California Vehicle Code § 22658.2, including any amendments thereto and any successor or replacement statute, or other applicable statute.

8.17 Rights of Handicapped.

Subject to the provisions of Article IV of this Declaration, each Owner shall have the right to modify his or her Unit and the route over the Common Property leading to the front door of his or her Unit, at his or her sole cost and expense, in order to facilitate access to his or her Unit by persons who are blind, visually handicapped, deaf or physically disabled, or to alter conditions which could be hazardous to such persons. The rights granted by this Section are further subject to the following conditions: (i) the modifications shall be consistent with applicable building code requirements; (ii) the modifications shall be consistent with the intent of otherwise applicable provisions of this Declaration pertaining to safety or the aesthetic integrity of the Project; (iii) the modifications which are external to the Unit shall not prevent reasonable passage by other Owners or Persons on the Project, and shall be removed by the Owner when the Unit is no longer occupied by persons requiring those modifications; (iv) any Owner who intends to modify a Unit pursuant to this Section shall submit their plans and specifications to the Architectural Committee for review to determine whether the modifications comply with the provisions of Article IV and this Section; and (v) any change in the exterior appearance of a Unit shall be in accordance with the provisions of this Declaration and all applicable provisions of law.

The Association shall not deny approval of the proposed modifications under this Section without good cause.

8.18 Roof Deck Weight Restrictions. By acceptance of a deed to a Unit, each Owner acknowledges that the roof deck for each Unit is designed to withstand a maximum weight of (i) forty pounds per square foot (40 lbs/sf) of “live load” or temporary weight which includes, but is not limited to, people, furniture, and equipment, and (ii) twenty pounds per square foot (20 lbs/sf) of “dead load” or permanent weight, which includes, but is not limited to, walls, floor tiles, and other permanently affixed building materials. To ensure safe use of the rood deck, no more than ___ persons may be on any roof deck at any time. In addition to the foregoing roof deck capacity limit, any spa or hot tub, any large fish tank, any large custom bar-b-que, any heavy piece of furniture or heavy equipment, including weight lifting equipment, shall be checked by a California licensed Structural Engineer for compliance with the roof deck “live load” and “dead load” weight restriction prior to installation. A Unit Owner may not exceed the weight restrictions imposed herein without the prior written consent of the Architectural Committee. Any application submitted to the Architectural Committee for approval to exceed the weight limit set forth in this 59 Section shall be accompanied with a structural impact report from a qualified structural engineer, which report shall include any strengthening measures in order to not adversely impact the structural integrity of the floor.

8.19 Signs.

Subject to California Civil Code §§ 712, 713 and 4710 (or any successor or replacement statutes), no signs shall be displayed to the public view on any Unit or on any other portion of the Project, except non-commercial signs may be displayed from any Unit that are approved by the Board or a committee appointed by the Board, that conform to the Rules and Regulations regarding signs, and that conform to the requirements of State law, and applicable local ordinances. “For Sale” or “For Rent” or “For Exchange” signs shall be allowed to be displayed within areas of the Project that are designated in the Rules and Regulations regarding such signs, and that conform to the requirements of State law, and applicable local ordinances, provided the design, dimensions and locations are reasonable. An Owner or his or her agent may display one (1) such For Sale or For Rent or For Exchange sign within his or her Unit and one (1) sign in the Common Property advertising directions to the Owner’s Unit which is for sale, rent, or exchange, provided the design, dimensions and locations are reasonable and comply with the Rules and Regulations regarding signs, and comply with the requirements of State law, and applicable local ordinances. These restrictions on display of signs apply to signs that are visible from the exterior of a Unit, and are not intended to restrict signs that may be seen only from within the Unit in which the sign(s) is displayed. The Board shall also have the right, but not the obligation, to erect within the Common Property a master directory of Units which are for sale or lease within the Project, which master directory shall be located on or at an area in the immediate vicinity of the Project entrance so as to centralize and segregate all sales activity and locations within the Project. This Section shall not apply to any signs used by Declarant or its agents in connection with the sale of Separate Interests or the construction or alteration of the Units or Common Property, traffic and visitor parking signs installed by Declarant, and traffic and parking control signs installed with the consent of the Board. Notwithstanding the foregoing, nothing contained in this Section shall be construed in such manner as to permit the maintenance of any sign which is not in conformance with any ordinance of the city or county in which the Property is located.

8.20 Sound Attenuation.

In any multi-family dwelling, sound may be audible between Units, particularly where the sound level of the source is sufficiently high and the background noise in an adjacent Unit is very low. Each Owner shall endeavor to minimize any noise transmission from his or her Unit, and shall adhere to any of the Rules and Regulations which are designed to minimize noise transmission. The requirements set forth in this Section are subject to further definition and more stringent requirements adopted by the Architectural Committee from time to time. In the event of any conflict between or among the protective covenants set forth in this Declaration and the Building Code or applicable municipal code requirement, as the same may be amended from time to time, the most restrictive of said requirements shall be controlling.

To minimize the noise transmission from a Unit, each Owner (other than Declarant) shall adhere to the following:
60 (a) No holes or other penetrations shall be made in demising walls (party walls) without the permission of the Committee. No penetrations of any sort shall be made in the ceiling of any Unit.
(b) No modifications shall be made to any Unit which would result in a reduction in the minimum impact insulation class of the Condominium Building. (c) No modifications shall be made to the exterior walls of a Unit which would conflict with the requirements of any sound control provision in the City Building Code. A Unit Owner may retain a qualified acoustical engineer to submit evidence for any alternative means of sound insulation satisfactory to the City’s Department of Building and Safety. (d) Loudspeakers for music reproduction and television shall not be supported from or contact demising walls, and shall be elevated from the floor by a proper acoustic platform.
(e) Musical equipment or other equipment which may cause vibrations shall have at least ½ inch neoprene pads under the supports to minimize vibration transmission into the structure.

8.21 Terraces.

Terraces shall be used only as an outdoor living area containing patio furniture, potted plants, and other similar outdoor furnishings which comply with the standards governing the appearance of such items as set forth in the Rules and Regulations. Said furnishings shall be equipped with protective leg caps or other devices to prevent damage to the floor of the Terrace.

No Improvement shall be nailed, bolted, or otherwise attached to the floor, walls, or any other portion of the Terrace. No hanging screens or banners which may be visible from any other Units, the Common Property or other property are permitted on any portion of the Terrace. Any plants placed on Terraces must have sufficiently large receptacles to contain all drainage from such plants and must not be allowed to collect condensates or moisture between the receptacles and the Terrace’s floor. Any item or vegetation maintained upon any Terrace, which item or vegetation is exposed to the view of any Owner, shall be removed or otherwise altered to the satisfaction of the Architectural Committee, if such Committee determines that the maintenance of such item or vegetation in its then existing state is contrary to the purposes or provisions of this Declaration and the effective operation of the Project. If an Owner fails to perform necessary pruning, trimming, or thinning required by the Committee, the Association shall have the right, after Notice and Hearing, to enter upon such Residence and Terrace for the purpose of performing such work.

Terraces shall not be used for storage of any type, including, without limitation, boxes, tools, exercise and sports equipment, bicycles, cleaning utensils and supplies or other household items. Terraces shall be maintained in a clean, neat, and sanitary condition at all times and nothing shall be placed on Terraces so as to render them unsightly or offensive to the other Owners or to any other property in the vicinity of the Project or its occupants. No clothing or household fabrics, curtains, rugs, mops, or other unsightly articles shall be hung, dried or aired in such a way as to be visible from any other Units, the Common Property or other property. No dust, dirt or other substances shall be shaken, swept or thrown from or hosed off the Terraces on 61 or into any Common Property. Any item which in the opinion of the Board or the Committee is unsightly or offensive shall be removed from the Terrace upon receipt of written notice of such determination from the Board or the Committee.

No Terrace covers shall be installed on the exterior of the Condominium Building (with the exception of those items installed during the original construction of the Project), unless the prior written approval of the Architectural Committee is secured. Notwithstanding the specificity of the foregoing, no exterior addition, change, or alteration to any Unit shall be commenced without the prior written approval of the Architectural Committee.

8.22 View Obstructions.

No vegetation or other obstruction shall be planted or maintained in such location or of such height as to unreasonably obstruct the view from any other Unit in the vicinity thereof.

If there is a dispute between Owners concerning the obstruction of a view from a Unit, the dispute shall be submitted to the Architectural Committee, whose decision in such matters shall be binding.

Any such obstruction shall, upon request of the Architectural Committee, be removed or otherwise altered to the satisfaction of the Architectural Committee, by the Owner of the Unit upon which the obstruction is located. The Architectural Committee shall ensure that the vegetation on the Common Property maintained by the Association is cut frequently. Each Owner, by accepting title to a Separate Interest, hereby acknowledges that (a) although the Architectural Committee may prohibit the installation of Improvements on a Unit or prohibit the installation or require the pruning, trimming or thinning of landscaping from a Unit where such Improvements or landscaping would unreasonably obstruct the views from any other Units, there are no protected views within the Property, and no Separate Interest is assured the existence or unobstructed continuation of any particular view, and (b) any construction, landscaping or other installation of Improvements by Declarant or other Owners may impair the view from any Separate Interest, and the Owners hereby consent to such view impairment.

8.23 Water Supply System.

No individual water supply or water softener system shall be permitted in any Unit unless such system is designed, located, constructed and equipped in accordance with the requirements, standards, and recommendations of any applicable water district, the locality in which the Property is located, and all other applicable governmental authorities. No tampering, modifying, cross connecting or other alteration of any existing water system shall occur without the Architectural Committee’s approval, which will require inspection before, during and after completion of work to ensure that no cross connection of water system has occurred.

8.24 Window Coverings.

No window in any Unit shall be covered in whole or in part, inside or outside, with aluminum foil, newspaper, paint, reflective tint or covering, or any other material reasonably deemed by the Architectural Committee to be inappropriate for such use. No window covering shall be installed (with the exception of those items installed during the original construction of the Project), unless the prior written approval of the Architectural Committee is secured. All 62 draperies and other window covering must be lined with white or off-white colored materials on the side visible from the outside of the Unit.

8.25 Post-Tension Concrete System.

By acceptance of a deed to a Separate Interest, each Owner acknowledges and understands that the ground floor of his or her Dwelling Unit has been built using a post-tension concrete system (“System”). The System involves placing steel cables under high tension in the concrete slab foundation located beneath the Dwelling Unit. Therefore, any attempt to alter or pierce the foundation (for example, saw cutting, drilling or installation of a subterranean floor safe) could damage the integrity of the System and/or cause serious injury or damage to persons and personal property. By accepting a deed to a Separate Interest, each affected Owner specifically covenants and agrees that: (i) he or she shall not cut into or otherwise tamper with the System; (ii) he or she shall not knowingly permit or allow any other person to cut into or tamper with the System; (iii) he or she shall disclose the existence of the System to any tenant, lessee or subsequent purchaser of the Separate Interest; and (iv) Declarant shall not be responsible for any damage or injury resulting from or arising in connection with the alteration of the System by the Owner or any employee, agent, Family member, contractor or other representatives of the Owner, and Owner shall indemnify, defend and hold Declarant harmless with respect to any such damage or injury.

ARTICLE IX

9. Insurance.

9.1 Duty to Obtain Insurance; Types.

The Board shall cause to be obtained and maintained the following insurance:
(a) Adequate blanket public liability insurance (including medical payments), with such limits as may be considered acceptable to FHA, VA, FNMA, FHLMC, and/or GNMA (not less than Two Million Dollars ($2,000,000)) covering all claims for personal injury and property damage arising out of a single occurrence), insuring against liability for bodily injury, death and property damage arising from the activities of the Association and its Members or from activities of the officers and directors of the Association acting in their capacity as representatives of the Association, with respect to the Common Property. (b) The Board shall also cause to be obtained and maintained fire and casualty insurance with extended coverage, without deduction for depreciation, in an amount equal to one hundred percent (100%) of current replacement cost of the Common Property and all Improvements thereon. Such insurance shall be maintained for the benefit of the Association, the Owners, and the Mortgagees, as their interests may appear as named insured, subject, however, to loss payment requirements as set forth herein. (c) The Board of Directors shall purchase such other insurance and endorsements, as it determines necessary, including, but not limited to, casualty, errors and omissions, directors, officers and agents liability insurance, automobile liability insurance, plate glass insurance, medical payments, malicious mischief, liquor liability and vandalism insurance, 63 flood insurance, fidelity bonds and worker’s compensation, and insurance against such other risks as is customarily carried with respect to projects similar in construction, location and use. (d) Notwithstanding anything herein to the contrary, all insurance maintained by the Board shall satisfy the following:
(1) Minimum requirements imposed for this type of project by FHA, VA, FNMA, FHLMC, and/or GNMA, (so long as any of which is a Mortgagee or Owner of a Separate Interest within the Project) except to the extent such coverage is not available or has been waived in writing by FHA, VA, FNMA, FHLMC, and/or GNMA, as applicable; and (2) California Civil Code §§ 5800 and 5805 (or any successor or replacement statutes).
(e) Fidelity bond coverage which names the Association as an obligee must be obtained by or on behalf of the Association for any person or entity handling funds of the Association, including, but not limited to, officers, directors, trustees, employees and agents of the Association and employees of the Manager of the Association, whether or not such Persons are compensated for their services, in an amount not less than the estimated maximum of funds, including reserve funds, in the custody of the Association or the Manager, as the case may be, at any given time during the term of each bond. However, in no event may the aggregate amount of such bonds be less than the sum equal to one-fourth (¼) of the Annual Assessments on all Separate Interests in the Project, plus reserve funds.

9.2 Waiver of Claim Against Association.

As to all policies of insurance maintained by or for the benefit of the Association and the Owners, the Association and the Owners hereby waive and release all claims against one another, the Board of Directors and Declarant, to the extent of the insurance proceeds available, whether or not the insurable damage or injury is caused by the negligence of or breach of any agreement by any of said Persons.

9.3 Right and Duty of Owners to Insure.

It is the responsibility of each Owner to provide insurance on his or her personal property and upon all other property and Improvements within his or her Unit. Nothing herein shall preclude any Owner from carrying any public liability insurance as he or she deems desirable to cover his or her individual liability for damage to person or property occurring inside his or her individual Unit or elsewhere upon the Property. Such policies shall not adversely affect or diminish any liability under any insurance obtained by or on behalf of the Association, and duplicate copies of such other policies shall be deposited with the Board upon request. If any loss intended to be covered by insurance carried by or on behalf of the Association shall occur and the proceeds payable thereunder shall be reduced by reason of insurance carried by any Owner, such Owner shall assign the proceeds of such insurance carried by him or her to the Association, to the extent of such reduction, for application by the Board to the same purposes as the reduced proceeds are to be applied.
64 9.4 Notice of Expiration Requirements.

If available, each of the policies of insurance maintained by the Association shall contain a provision that said policy shall not be canceled, terminated, materially modified or allowed to expire by its terms, without ten (10) days’ prior written notice to the Board and Declarant, and to each Owner and Beneficiary, insurer and guarantor of a first Mortgage, and every other Person in interest. In addition, fidelity bonds shall provide that they may not be canceled or substantially modified without ten (10) days’ prior written notice to any insurance trustee named pursuant to Section 9.6 and to each FNMA servicer.

9.5 Insurance Premiums.

Insurance premiums for any blanket insurance coverage obtained by the Association and any other insurance deemed necessary by the Board of Directors shall be a Common Expense to be included in the Annual Assessments levied by the Association and collected from the Owners. That portion of the Annual Assessments necessary for the required insurance premiums shall be separately accounted for by the Association and shall be used solely for the payment of premiums of required insurance as such premiums become due.

9.6 Trustee for Policies.

The Association, acting through its Board of Directors, is hereby appointed and shall be deemed trustee of the interests of all named insureds under policies of insurance purchased and maintained by the Association. Unless the applicable insurance policy provides for a different procedure for the filing of claims, all claims made under such policy shall be sent to the insurance carrier or agent, as applicable, by certified mail and be clearly identified as a claim. A record of all claims made shall be kept by the Association. All insurance proceeds under any such policies as provided for in Section 9.1 above shall be paid to the Board of Directors as trustees. The Board shall have full power to receive and to acknowledge receipt of the proceeds and to deal therewith as provided herein. Insurance proceeds shall be used by the Association for the repair or replacement of the property for which the insurance was carried or otherwise disposed of as provided in Article X of this Declaration. The Board is hereby granted the authority to negotiate loss settlements with the appropriate insurance carriers, with participation, to the extent they desire, of first Mortgagees within ten (10) days of receipt of notice of any damage or destruction as provided in Article X of this Declaration. Any two (2) officers of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures shall be binding on all the named insureds. Notwithstanding the foregoing, there may be named as an insured, a representative chosen by the Board, including a trustee with whom the Association may enter into an insurance trust agreement or any successor to such trustee, who shall have exclusive authority to negotiate losses under any policy providing property or liability insurance and to perform such other functions necessary to accomplish this purpose.

9.7 Actions as Trustee.

Except as otherwise specifically provided in this Declaration, the Board, acting on behalf of the Association and all Owners, shall have the exclusive right to bind such parties in respect to all matters affecting insurance carried by the Association, the settlement of a loss claim, 65 and the surrender, cancellation, and modification of all such insurance, in a manner satisfactory to Beneficiaries of seventy-five percent (75%) of the first Mortgages held by first Mortgagees.

Duplicate originals or certificates of all policies of fire and casualty insurance maintained by the Association and of all renewals thereof, together with proof of payment of premiums, shall be delivered by the Association to all Owners and Mortgagees who have requested the same in writing.

9.8 Annual Insurance Review.

The Board shall review the insurance carried by or on behalf of the Association at least annually, for the purpose of determining the amount of the casualty and fire insurance referred to in Section 9.1 above. If economically feasible, the Board shall obtain a current appraisal of the full replacement value of the Improvements on the Property except for foundations and footings, without deduction for depreciation, from a qualified independent insurance appraiser, prior to each such annual review.

The Board shall, upon issuance or renewal of the Association policy of public liability insurance, but no less than annually, notify its Members as to the amount and type of liability insurance carried by the Association, and it shall accompany this notification with statements to the effect that the Association is or is not insured to the levels specified by California Civil Code § 5805 (or any successor or replacement statute), and that if not so insured, Owners may be individually liable for the entire amount of a judgment arising solely as a result of an act or omission occurring on the Common Property, and if the Association is insured to the levels specified in said Section, then Owners may be individually liable only for their proportional share of assessments levied to pay the amount of any judgment which exceeds the limits of the Association’s liability insurance.

9.9 Required Waiver.

All policies of physical damage insurance shall provide, if reasonably possible, for waiver of the following rights, to the extent that the respective insurers would have the rights without such waivers:
(a) subrogation of claims against the Owners and tenants of the Owners;
(b) any defense based upon coinsurance;
(c) any right of setoff, counterclaim, apportionment, proration or contribution by reason of other insurance not carried by the Association; (d) any invalidity, other adverse effect or defense on account of any breach of warranty or condition caused by the Association, any Owner or any tenant of any Owner, or arising from any act, neglect, or omission of any named insured or the respective agents, contractors and employees of any insured;
66 (e) any right of the insurer to repair, rebuild or replace, and, if the Improvement is not repaired, rebuilt or replaced following loss, any right to pay under the insurance an amount less than the replacement value of the Improvements insured; (f) notice of the assignment of any Owner of his or her interest in the insurance by virtue of a conveyance of any Separate Interest; (g) any right to require any assignment of any Mortgage to the insurer; (h) any denial of an Owner’s claim because of negligent acts by the Association or other Owners; and
(i) prejudice of insurance by any acts or omissions of Owners that are not under the Association’s control.

ARTICLE X

10. Destruction of Improvements.

10.1 Restoration of the Property.

Except as otherwise provided in this Declaration, in the event of any destruction of any portion of the Property, the repair or replacement of which is the responsibility of the Association, it shall be the duty of the Association to restore and repair the same to its former condition, as promptly as practical. The proceeds of any insurance maintained pursuant to Article IX hereof for reconstruction or repair of the Property shall be used for such purpose, unless otherwise provided herein. The Board shall be authorized to have prepared the necessary documents to effect such reconstruction as promptly as practical. The Property shall be reconstructed or rebuilt substantially in accordance with the Condominium Plan and the original construction plans for the Project if they are available, unless changes recommended by the Architectural Committee have been approved in writing by sixty-seven percent (67%) of the Owners and by the Beneficiaries of fifty-one percent (51%) of first Mortgages upon the Separate Interests, provided, however, until such time as Declarant’s Class B Membership is terminated, any changes recommended by the Architectural Committee must also be approved by Declarant’s First Mortgagee, in addition to the approval of the Owners and the Beneficiaries. If the amount available from the proceeds of such insurance policies for such restoration and repair is at least eighty-five percent (85%) of the estimated cost of restoration and repair, a Reconstruction Assessment shall be levied by the Board of Directors to provide the necessary funds for such reconstruction, over and above the amount of any insurance proceeds available for such purpose.

If the amount available from the proceeds of such insurance policies for such restoration and repair is less than eighty-five percent (85%) of the estimated cost of restoration and repair, the Board may levy a Reconstruction Assessment and proceed with the restoration and repair only if both of the following conditions (“Conditions to Reconstruction”) have first been satisfied: (a) the levy of a Reconstruction Assessment to pay the costs of restoration and repair of the Property is approved by the affirmative vote or written consent of sixty-seven percent (67%) of the Owners and by the written consent of the Beneficiaries of fifty-one percent (51%) of the first Mortgages on the Separate Interests in the Project; and (b) within six (6) months after the date on which the destruction occurred, the Board Records a certificate of the resolution authorizing the restoration 67 and repair (“Reconstruction Certificate”). If either of the Conditions to Reconstruction does not occur following a destruction for which insurance proceeds available for restoration and repair are less than eighty-five percent (85%) of the estimated cost of restoration and repair, it shall be conclusively presumed that the Owners have determined not to proceed with restoration and repair and not to allow the Board to levy a Reconstruction Assessment, in which case the Owners shall proceed as provided in Section 10.2 below.

10.2 Sale of Property and Right to Partition.

No Owner shall have the right to partition of his or her interest in a Condominium and there shall be no judicial partition of the Condominium Building, or any part thereof, except as provided in § 4610(b) of the California Civil Code, as amended, or in any successor statute. For purposes of Subsection 4 of said § 4610(b), partition may occur only if all of the following conditions are satisfied: (a) either or both of the Conditions to Reconstruction of the Condominium Building pursuant toSection 10.1 above have failed to occur; and (b) restoration or repair of the Condominium Building is not actually occurring; and (c) the Owners of sixty-seven percent (67%) of the Condominiums in the Condominium Building approve the partition by vote or written consent. In such event, the Association, acting through a majority of the Board, shall prepare, execute and Record, as promptly as practical, a certificate stating that a majority of the Board may properly exercise an irrevocable power of attorney to sell the Condominium Building for the benefit of the Owners in the Condominium Building, and such other documents and instruments as may be necessary for the Association to consummate the sale of the Condominium Building at the highest and best price obtainable, either in its damaged condition, or after damaged structures have been razed. Such certificate shall be conclusive evidence of such authority for any Person relying thereon in good faith. The net proceeds of such sale and the proceeds of any insurance carried by the Association shall be divided proportionately among the Owners, such proportions to be determined in accordance with the relative appraised fair market valuation of the Condominiums as of a date immediately prior to such destruction (or condemnation), expressed as percentages, and computed by dividing such appraised valuation of each Condominium by the total of such appraised valuations of all Condominiums in the Condominium Building. For purposes of calculating the portion of the sale and insurance proceeds or condemnation proceeds allocable to Declarant, the value of the Condominiums owned by Declarant shall include the value of Declarant’s right to construct Condominiums which were not yet built as of the date of such destruction or condemnation and the value of the undivided interests in the Common Area which would be appurtenant to such Condominiums. The Board is hereby authorized to hire one (1) or more appraisers for such purpose and the cost of such appraisals shall be a Common Expense of the Association. Notwithstanding the foregoing, the balance then due on any valid encumbrance of record shall be first paid in order of priority, before the distribution of any proceeds to an Owner whose Condominium is so encumbered. Nothing herein shall be deemed to prevent partition of a co-tenancy in any Condominium. Except as provided above, each Owner and the successors of each Owner, whether by deed, gift, devise, or by operation of law, for their own benefit and for the benefit of all other Owners, specifically waive and abandon all rights, interests and causes of action for a judicial partition of the tenancy in common ownership of the Condominium Building and do further covenant that no action for such judicial partition shall be instituted, prosecuted or reduced to judgment. In the event of a total or partial destruction of the Project and a decision not to rebuild as described above, the Association shall remove debris from the affected portion of the Project and such portion of the Project shall be made as safe and attractive as reasonably possible. 68 10.3 Interior Damage.

With the exception of any casualty or damage insured against by the Association pursuant to Section 9.1 of this Declaration, restoration and repair of any damage to the interior of any individual Unit, including without limitation all fixtures, cabinets and improvements therein, together with restoration and repair of all interior paint, wall coverings and floor coverings, shall be made by and at the individual expense of the Owner of the Unit so damaged. In the event of a determination to rebuild the Property after partial or total destruction, as provided in this Article X, such interior repair and restoration shall be completed as promptly as practical and in a lawful and workmanlike manner, and in accordance with plans approved by the Architectural Committee to the extent such approval is required under Article IV above. Nothing within this Section 10.3 shall limit the rights of any one Owner against another Owner for any damage to the interior of a Unit caused by such other Owner.

10.4 Notice to Owners and Listed Mortgagees.

The Board, immediately upon having knowledge of any damage or destruction affecting a material portion of the Common Property, shall promptly notify all Owners, Beneficiaries, insurers and guarantors of first Mortgages on Separate Interests in the Project. The Board, immediately upon having knowledge of any damage or destruction affecting a Separate Interest, shall promptly notify any Beneficiary, insurer or guarantor of any Mortgage encumbering such Separate Interest.

ARTICLE XI

11. Eminent Domain.

The term “taking” as used in this Article shall mean condemnation by exercise of the power of eminent domain or by sale under threat of the exercise of the power of eminent domain. The Board shall represent the Owners in any proceedings, negotiations, settlements, or agreements regarding takings. All takings proceeds shall be payable to the Association for the benefit of the Unit Owners and their Mortgagees, and shall be distributed to such Owners and Mortgagees as provided in this Article XI.

11.1 Project Condemnation.

If there is a taking of an interest in all or part of the Property such that the ownership, operation and use of the Property in accordance with the provisions of this Declaration is substantially and adversely affected, and within one hundred twenty (120) days after the effective date of the taking the Owners of Units (a) not taken, or (b) only partially taken but capable of being restored to at least ninety-five percent (95%) of their floor area and to substantially their condition prior to the taking (collectively, the “Remaining Units”) do not by affirmative vote of at least one-third (1/3rd) of their voting power approve the continuation of the Project and the repair, restoration and replacement to the extent feasible of the Common Property and the Remaining Units, then the Board shall proceed with the sale of that portion of the Property which was not taken and distribute the net proceeds of such sale after deducting any incidental fees and expenses, in the same proportion and manner as provided in Section 10.2. 69 11.2 Condemnation of Common Property.

If there is a taking of all or any portion of the Common Property, or any interest therein, other than the taking of an undivided interest therein taken as a result of the taking of a Separate Interest, then the award in condemnation shall be paid to the Association and shall be deposited in the Operating Fund.

11.3 Condemnation of Separate Interests.

If there is a taking of a Separate Interest, the award in condemnation shall be paid to the Owner of the Separate Interest; provided, however, that such award shall first be applied to the balance then due on any Mortgages encumbering such Owner’s Separate Interest, in order of priority.

11.4 Condemnation of Portions of Units.
(a) Minor Takings Within Limits. If (i) there is a taking of a portion of one or more Units such that the intended use of the Units is not substantially and adversely affected, and (ii) restoration of such Units can be accomplished at a cost less than or equal to the sum of (A) the amount of the condemnation awards for such takings plus (B) any amounts the Owners of the taken Units wish to contribute to restoration plus (C) an amount less than or equal to five percent (5%) of the Budgeted gross expenses of the Association for that Fiscal Year (collectively, the “Allowable Cost”), then the Board shall contract for such restoration and levy a Reconstruction Assessment in an amount equal to the Allowable Cost minus the amount of the condemnation awards and Owners’ contributions, and the condemnation awards, Owners’ contributions and Reconstruction Assessment shall be applied to such restoration. If the restoration is accomplished at a cost less than the amount of the condemnation awards, then that portion of the condemnation awards in excess of the restoration costs shall be paid to the Owners of the partially taken Units in proportion to the decreases in the fair market values of their Separate Interests; provided, however, that such awards shall first be applied to the balance then due on any Mortgages encumbering such Owners’ Separate Interests, in order of priority. (b) Minor Takings Exceeding Limits. If (i) there is a taking of a portion of one or more Units such that the intended use of the Units is not substantially and adversely affected, and (ii) restoration cannot be accomplished at a cost less than or equal to the Allowable Cost, then the Board shall call a Special Meeting of the Members. If more than fifty percent (50%) of the Members are represented at such Special Meeting, either in person or by proxy, and a majority of the votes cast at such Special Meeting are in favor of levying a Reconstruction Assessment in an amount equal to the restoration costs minus the sum of the amount of the condemnation awards and the amounts the Owners of the taken Units wish to contribute to such restoration, then the Board shall contract for such restoration and levy a Reconstruction Assessment, and the condemnation awards, Owners’ contributions and Reconstruction Assessment shall be applied to such restoration. (c) Major Takings. If the requisite approval is not obtained at the Special Meeting referred to in Section 11.4(b), or if there is a taking of a portion of one or more Units such that the Units are not capable of being restored in such a manner that the intended use 70 of the Units is not substantially and adversely affected, then the award in condemnation shall be paid to the Owners of the taken Units; provided, however, that such award shall first be applied to the balance then due on any Mortgages encumbering such Owner’s Separate Interest, in order of priority. The Board shall have the remaining portions of the taken Units razed. The remaining portions of the taken Units shall become part of the Common Area. The Owners of such taken Units, by acceptance of the award allotted to them in taking proceedings, hereby relinquish to the other Owners in the Project, on the basis of their relative ownership of the Common Area therein, such Owners’ undivided interest in the Common Area. Each Owner relinquishing his or her interest in the Common Area pursuant to this Section shall, at the request of the Board and at the expense of the Association, execute and acknowledge such deeds and other instruments which the Board deems necessary or convenient to evidence such relinquishment. Each Owner of a taken Unit or Residence shall not be liable for assessments under this Declaration which accrue on or after the date such Owner accepts his or her condemnation award.

11.5 Portions of Awards in Condemnation Not Compensatory for Value of Real Property.

Those portions of awards in condemnation which do not directly compensate Owners for takings of real property (e.g., awards for takings of personal property, relocation expenses, moving expenses, or other allowances of a similar nature intended to facilitate relocation) shall be paid to the Owners whose personal property is taken, or whose relocation is intended to be facilitated.

11.6 Notice of Owners and Mortgagees.

The Board, upon learning of any taking affecting a material portion of the Property, or any threat thereof, shall promptly notify all Owners and those Beneficiaries, insurers and guarantors of Mortgages on Separate Interests in the Project. The Board, upon learning of any taking affecting a Separate Interest, or any threat thereof, shall promptly notify any Beneficiary, insurer or guarantor of a Mortgage encumbering such Separate Interest.

ARTICLE XII

12. Rights of Mortgagees.

Notwithstanding any other provision of this Declaration, no amendment or violation of this Declaration shall operate to impair, defeat or render invalid the rights of the Beneficiary under any Deed of Trust upon a Separate Interest made in good faith and for value, provided that after the foreclosure of any such Deed of Trust such Separate Interest shall remain subject to this Declaration, as amended. For purposes of this Declaration, “first Mortgage” shall mean a Mortgage with first priority over other Mortgages or Deeds of Trust on a Separate Interest, and “first Mortgagee” shall mean the Beneficiary of a first Mortgage. For purposes of any provision of this Declaration or the other Restrictions which require the vote or approval of a specified percentage of first Mortgagees, such vote approval shall be determined based upon one (1) vote for each Separate Interest encumbered by each such first Mortgage. To the extent the following provisions conflict with any other provisions of this Declaration or any other of the Restrictions, these restrictions shall control:
71 (a) Mortgagees, and insurers or guarantors of first Mortgages, shall be entitled to timely written notice of:
(1) any condemnation or any casualty loss which affects a material portion of the Project or any Separate Interest on which there is a first Mortgage held, insured, or guaranteed by such Mortgagee insurer or guarantor, as applicable; (2) any default in performance of obligations under the Project Documents or delinquency in the payment of Assessments or charges owed by an Owner of a Separate Interestsubject to a first Mortgage held, insured or guaranteed by such Mortgagee, insurer or guarantor, which remains uncured for a period of sixty (60) days; (3) any lapse, cancellation or material modification of any insurance policy or fidelity bond maintained by the Association; and (4) any proposed action under this Declaration which would require the consent of a specified percentage of first Mortgagees. (b) Every Owner, including every first Mortgagee of a Mortgage encumbering any Separate Interest who obtains title to such Separate Interest pursuant to the remedies provided in such Mortgage, or pursuant to foreclosure of the Mortgage, or by deed (or assignment) in lieu of foreclosure, shall be exempt from any “right of first refusal” created or purported to be created by the Restrictions.
(c) Each first Mortgagee of a Mortgage encumbering any Separate Interest, which obtains title to such Separate Interest, pursuant to judicial foreclosure or the powers provided in such Mortgage, shall take title to such Separate Interest free and clear of any claims for unpaid assessments or charges against such Separate Interest which accrued prior to the time such Mortgagee acquires title to such Separate Interest in accordance with Section 5.11. (d) Unless at least sixty-seven percent (67%) of the first Mortgagees or sixty-seven percent (67%) of the Owners (other than Declarant) have given their prior written approval, neither the Association nor the Owners shall:
(1) by act or omission seek to abandon or terminate the Project; or
(2) change the method of determining the obligations,
assessment dues or other charges which may be levied against any Owner or change the pro rata interest or obligations of any Separate Interest for purposes of levying assessments or charges or allocating distributions of hazard insurance proceeds or condemnation awards or for determining the pro rata share of ownership of each Owner in the Common Area; or (3) partition or subdivide any Unit; or
(4) by act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the Common Property. (The granting of easements for public utilities or for other purposes consistent with the intended use of the Common Property under this 72 Declaration, and the granting of exclusive easements to Owners over portions of the Common Property to conform the boundaries of the Common Property to the as-built location of Improvements installed or constructed by Declarant shall not be deemed a transfer within the meaning of this clause); or
(5) use hazard insurance proceeds for losses to any Property (i.e., Improvements to the Units or Common Property) for other than the repair, replacement or reconstruction of such Property, except as provided by statute in case of substantial loss to the Units or Common Property; or
(6) by act or omission change, waive or abandon the provisions of this Declaration, or the enforcement thereof, pertaining to the architectural design or control of the exterior appearance of Improvements on the Property or the maintenance of the Common Property, or any walks, fences, driveways, or landscaping in the Project; or (7) fail to maintain or cause to be maintained fire and extended coverage on insurable Common Property as provided in Article IX of this Declaration. (e) All Mortgagees, insurers and guarantors of first Mortgages shall have the right to (1) examine the books and records of the Association, including current copies of all the Restrictions and financial statements, during normal business hours, (2) require the Association to submit an annual audited financial statement for the preceding Fiscal Year within one hundred twenty (120) days of the end of the Association’s Fiscal Year, if one is available, or have one prepared at the expense of the requesting entity if such statement is not otherwise prepared by the Association, (3) receive written notice of all meetings of the Owners, and (4) designate in writing a representative to attend all such meetings. All Owners shall also have the right to examine the books and records of the Association, including current copies of all the Restrictions and financial statements, during normal business hours. (f) All Mortgagees, insurers and guarantors of first Mortgages, shall be given sixty (60) days’ written notice prior to the effective date of (1) any proposed material amendment to the Restrictions or Condominium Plan; (2) any termination of an agreement for professional management of the Property following any decision of the Owners to assume selfmanagement of the Project; and (3) any proposed termination of the condominium portion of the Project as a condominium.
(g) The Reserve Fund described in Article V of this Declaration must be funded by regular scheduled monthly, quarterly, semiannual or annual payments rather than by large special assessments.
(h) The Board shall secure and cause to be maintained in force at all times a fidelity bond for any Person handling funds of the Association, including, but not limited to, employees of the professional Manager.
(i) No provision of the Restrictions shall be construed or applied to give any Owner, or any other party, priority over any rights of the Mortgagees of a first Mortgage in the case of a distribution to Owners of insurance proceeds or condemnation awards for losses to or taking of Separate Interests and/or Common Property. 73 (j) In addition to the foregoing, the Board may enter into such contracts or agreements on behalf of the Association as are required in order to satisfy the guidelines of VA, FHA, FHLMC, FNMA or GNMA or any similar entity, so as to allow for the purchase, guaranty or insurance, as the case may be, by such entities of first Mortgages encumbering Separate Interests. Each Owner hereby agrees that it will benefit the Association and the Membership of the Association, as a class of potential Mortgage borrowers and potential sellers of their residential Separate Interests, if such agencies approve the Property as a qualifying subdivision under their respective policies, rules and regulations, as adopted from time to time. (k) Each Owner hereby authorizes the first Mortgagee of a first Mortgage on his or her Separate Interest to furnish information to the Board concerning the status of such first Mortgage and the loan which it secures.
(l) First Mortgagees may require the Association to use professional management upon the approval of the majority of the Mortgagees of first Mortgages in the Project. When professional management has been previously required by the Restrictions or the majority of Mortgagees, insurers, or guarantors of first Mortgages, any decision to establish selfmanagement by the Association shall require the approval of sixty-seven percent (67%) of the voting power of the Association and fifty-one percent (51%) of the Mortgagees of first Mortgages of Separate Interests in the Project.
(m) All intended Improvements in the Project shall be substantially completed or the completion of such Improvements shall be secured by a bond or other arrangement acceptable to the DRE prior to the first Close of Escrow for the sale of a Separate Interest in the Project.
(n) First Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against any Common Property and may pay any overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for Common Property, and First Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association. (o) It is the intent of Declarant that this Declaration and the Articles and Bylaws of the Association, and the Project in general, shall now and in the future meet all requirements necessary to purchase, guarantee, insure, or subsidize any mortgage of a Separate Interest in the Project by FNMA, FHLMC, GNMA, FHA and VA. The Association and each Owner shall take any action or shall adopt any resolutions required by Declarant or the Board to conform this Declaration or the Project to the requirements of any of these entities or agencies.

ARTICLE XIII

13. Duration and Amendment.

13.1 Duration.

This Declaration shall run with the land and shall continue in full force and effect until a Declaration of Termination is Recorded, satisfying the requirements of an amendment to this Declaration as set forth in Section 13.2. There shall be no severance by sale, conveyance, 74 encumbrance or hypothecation of an interest in any Unit from the concomitant Membership in the Association, as long as this Declaration shall continue in full force and effect. The provisions of this Article are subject to the provisions of Sections 10.2 and 11.4 of this Declaration.

13.2 Amendment.
(a) Notice of the subject matter of a proposed amendment to this Declaration in reasonably detailed form shall be included in the notice of any meeting or election of the Association at which a proposed amendment is to be considered. Such notice of meeting or election shall be given to each Member of the Association at least twenty-five (25) days in advance, if the meeting is for an amendment of a material or extraordinary nature (as defined by VA in the VA Pamphlet 26-7, as such Pamphlet is revised from time to time), and ten (10) days in the case of a meeting for other purposes, pursuant to the Bylaws. Such notice must (i) state the purpose of the meeting and contains a summary of any material amendments or extraordinary actions proposed; and (ii) contains a copy of the proxy that can be cast in lieu of attendance at the meeting. The resolution shall be adopted by the vote, in person or by proxy, or affirmative written ballot of Members representing not less than (i) sixty-seven percent (67%) of the voting power of the Association, and (ii) sixty-seven percent (67%) of the voting power of the Association residing in Members other than Declarant, provided that the specified percentage of the voting power of the Association necessary to amend a specified Section or provision of this Declaration shall not be less than the percentage of affirmative votes prescribed for action to be taken under that Section or provision. The amendment or Extraordinary Action approved by the Membership of the Association shall be submitted to VA for approval. So long as there exists a Class B membership, the prior approval of VA shall be required for any amendment of this Declaration or Extraordinary Action, if it is providing financing with respect to any Separate Interest. The Declarant must provide a copy of all amendments to VA. In addition to any other applicable requirements for amendment of this Declaration, there shall be no amendment to any provisions of this Declaration or set forth in a Supplemental Declaration which pertains to a Cost Center, Cost Center Benefit, or Cost Center Assessment without the approval of a majority of the voting power of the Members of the affected Cost Center. (b) In addition to the required notice and consent of Members and Declarant provided above, the Mortgagees of fifty-one percent (51%) of the first Mortgages on all the Separate Interests in the Project must approve any amendment to this Declaration which is of a material adverse nature to Mortgagees, including, without limitation, the following:
(1) Any amendment which affects or purports to affect the validity or priority of encumbrances or the rights or protection granted to Mortgagees, insurers or guarantors of first Mortgages as provided in Articles V, IX, X, XI, XII and XIII hereof. (2) Any amendment which would necessitate an encumbrancer after it has acquired a Separate Interest through foreclosure to pay more than its proportionate share of any unpaid assessment or assessments accruing after such foreclosure. (3) Any amendment which would or could result in an
encumbrance being canceled by forfeiture, or in a Separate Interest not being separately assessed for tax purposes.
75 (4) Any amendment relating to the insurance provisions as set out in Article IX hereof, or to the application of insurance proceeds as set out in Article X hereof, or to the disposition of any money received in any taking under condemnation proceedings. (5) Any amendment which would or could result in partition or subdivision of a Separate Interest Unit in any manner inconsistent with the provisions of this Declaration.
(6) Any amendment which would subject any Owner to a right of first refusal or other such restriction, if such Separate Interest is proposed to be sold, transferred, or otherwise conveyed.
(7) Any amendment concerning:
(A) The weight of any Owner’s voting rights;
(B) Rights to use the Common Property;
(C) Reductions in reserves for or responsibility for
maintenance, repair and replacement of the Common Property; (D) Boundaries of any Unit;
(E) Owners’ interests in the Common Property;
(F) Convertibility of Common Property into Units or
Units into Common Property;
(G) Leasing of Units;
(H) Establishment of self-management by the
Association where professional management has been required by any Mortgagee, insurer or guarantor of a first Mortgage;
(I) Rights concerning expansion or contraction of the
Project, or the addition, annexation or withdrawal of real property to or from the Project; (J) Increases in assessments that raise the previously
assessed amount by more than 25%, assessment liens, or the priority or subordination of such liens; or
(K) Any provisions that expressly benefit Mortgage
holders, insurers, or guarantors.
(c) Notwithstanding anything to the contrary contained in this Declaration, Sections 2.2(b), 2.2(c), 2.2(d) and 15.4 of this Declaration shall not be amended without the vote or approval by written ballot of at least (a) ninety percent (90%) of the voting 76 power of the Members of the Association other than Declarant, and (b) at least ninety percent (90%) of the Mortgagees.
(d) Termination of this Declaration shall require approval by the Members as provided in subsection (a) of this Section 13.2. No such termination shall be effective unless it is also approved in advance either by fifty-one percent (51%) of the Mortgagees of the first Mortgages on all of the Separate Interests in the Project (if said termination is proposed by reason of the substantial destruction or condemnation of the Project) or by sixty-seven percent (67%) of such Mortgagees (if said termination is for reasons other than such substantial destruction or condemnation). Any distribution of excess funds held by the Association upon the termination of the Project shall be made equally to each Owner. (e) Each Mortgagee of a first Mortgage on a Separate Interest in the Project which receives proper written notice of a proposed amendment or termination of this Declaration by certified or registered mail with a return receipt requested shall be deemed to have approved the amendment or termination if the Mortgagee fails to submit a response to the notice within sixty (60) days after the Mortgagee receives the notice. (f) A copy of each amendment shall be certified by at least two (2) officers of the Association, and the amendment shall be effective when a Certificate of Amendment is Recorded. The Certificate, signed and sworn to by two (2) officers of the Association, stating that the requisite number of Owners and Mortgagees have either voted for or consented in writing to any amendment adopted as provided above, when Recorded, shall be conclusive evidence of that fact. The Association shall maintain in its files the record of all such votes or written consents for a period of at least four (4) years. (g) Notwithstanding any other provision of this Section 13.2, at any time prior to the first Close of Escrow for the sale of a Separate Interest within the Project, Declarant may unilaterally amend or terminate this Declaration by Recording a written instrument which effects the amendment or termination and is signed and acknowledged by Declarant.
(h) Notwithstanding any other provision of this Declaration, any proposed amendment which may adversely affect the interests of any Commercial Owner shall require the prior written consent of the affected Commercial Owner. (i) Notwithstanding any other provision of this Declaration, for so long as Declarant owns any portion of the Property or Unit thereon, Declarant may, in its sole discretion, unilaterally amend this Declaration by Recording a written instrument signed by Declarant without the consent of the Association or any other Owner, provided that such amendment is made (1) to correct a typographical error or internal inconsistency herein, and such amendment does not adversely affect the interests of any Owner without such Owner’s written consent, or (2) to conform this Declaration to the requirements of the VA, FHA, DRE, FNMA, GNMA or FHLMC then in effect or to any City requirements and/or applicable statutory legal requirements.
77 13.3 Protection of Declarant.

The prior written approval of Declarant, as developer of the Property, will be required before any amendment which would impair or diminish the rights of Declarant complete the Property or sell or lease Separate Interests therein in accordance with this Declaration shall become effective. Notwithstanding any other provisions of the Restrictions, until such time as Declarant no longer owns any Separate Interests in the Property, the following actions, before being undertaken by the Association, shall first be approved in writing by Declarant:
(a) Any amendment or action requiring the approval of first Mortgagees pursuant to this Declaration, including without limitation all amendments and actions specified in Section 13.2;
(b) The annexation to the Property of real property;
(c) The levy of a Capital Improvement Assessment for the construction of new facilities not constructed on the Common Property by Declarant; (d) Subject to Section 5.5 regarding limitations on Annual Assessment increases, any significant reduction of Association maintenance or other services; or
(e) Any modification of the rights reserved and granted to Declarant herein, including, without limitation, those rights set forth in Section 6.1, Article VII, Article XV and Article XVI.

ARTICLE XIV

14. Enforcement of Certain Bonded Obligations.

14.1 Consideration by Board of Directors.

If (1) the Improvements to be located on the Common Property are not completed prior to the issuance of a Final Subdivision Public Report by the DRE for the sale of Separate Interests in the Project, and (2) the Association is obligee under a bond or other arrangement (“Bond”) required by the DRE to secure performance of the commitment of Declarant to complete such Improvements, the Board of Directors of the Association shall consider and vote on the question of action by the Association to enforce the obligations under the Bond, with respect to any such Improvement for which a Notice of Completion has not been filed within sixty (60) days after the completion date specified for that Improvement in the Planned Construction Statement appended to the Bond. If the Association has given an extension in writing for the completion of any Improvement on the Common Property, the Board shall be directed to consider and vote on the aforesaid question (if a Notice of Completion has not been filed), within thirty (30) days after the expiration of the extension.
78 14.2 Consideration by the Members.

A special meeting of Members, for the purpose of voting to override a decision by the Board not to initiate action to enforce the obligations under the Bond or on the failure of the Board to consider and vote on the question, shall be held no fewer than thirty-five (35) days nor more than forty-five (45) days after receipt by the Board of a petition for such a meeting signed by Members representing five percent (5%) of the total voting power of the Association residing in Members other than Declarant. A vote at such meeting to take action to enforce the obligations under the Bond by Members representing a majority of the total voting power of the Association residing in Members other than Declarant shall be deemed to be the decision of the Association, and the Board shall thereafter implement this decision by initiating and pursuing appropriate action in the name of the Association.

ARTICLE XV

15. General Provisions.

15.1 Legal Proceedings; Arbitration; Actions Arising From Restrictions.

Failure to strictly comply with any of the terms of the Restrictions by an Owner, his or her Family, guests, employees, contractors, invitees or tenants, shall be grounds for relief which may include, without limitation, an action to recover sums due for damages, injunctive relief, foreclosure of any lien, or any combination thereof. Failure to enforce any provision hereof shall not constitute a waiver of the right to enforce that provision, or any other provision hereof.

The Board, any Owner (not at the time in default hereunder), or Declarant (so long as Declarant is an Owner) shall be entitled to bring an action for damages against any defaulting Owner, and in addition may enjoin any violation of this Declaration. Any judgment rendered in any action or proceeding pursuant to this Declaration shall include a sum for attorneys’ fees in such amount as the Court may deem reasonable, in favor of the prevailing party, as well as the amount of any delinquent payment, late payment fee, costs of collection and court costs, and interest thereon.

Each remedy provided for in this Declaration shall be cumulative and not exclusive or exhaustive.

Each Owner shall have a right of action against the Association for the failure by the Association to comply with the Restrictions.

Notwithstanding anything above to the contrary, any action or claim for enforcement of the Restrictions shall be subject to the following provisions:
(a) Claims for Declaratory Relief or Enforcement of Project Documents: Prior to the filing of an enforcement action for declaratory, injunctive, or writ relief in conjunction with a claim for monetary damages not in excess of Five Thousand Dollars ($5,000), the Board, or any Owner who seeks such relief, shall first endeavor to submit the matter to alternative dispute resolution in compliance with the provisions of California Civil Code §§ 5925 – 5960 (or any successor or replacement statutes). (b) The Board shall comply with the requirements of California Civil Code § 5965 (or any successor or replacement statute) by providing Members of the Association annually with a summary of the provisions of Article 3 (commencing with California Civil Code 79 § 5925) of Chapter 10 (Division 4, Part 5) of the California Civil Code (or any successor or replacement statute), including the following language:
“Failure of a Member of the Association to comply with the alternative dispute resolution requirements of § 5930 of the California Civil Code may result in the loss of your right to sue the Association or another Member of the Association regarding enforcement of the Governing Documents or the applicable law.”

15.2 Notification of Construction Claims.
(a) Before the Association or any Owner commences an action for damages against Declarant, Declarant’s general contractor or broker, or either of their agents and employees, based upon a claim for defects in the design or construction of the “Common Interest Development” as defined in California Civil Code § 4100 (or any successor or replacement statute), or any portion thereof, all of the requirements of subsections (b), (c) and (d) below shall be met:
(b) A resolution authorizing the Board to commence an action must be approved by Members representing more than sixty-seven percent (67%) of the voting power of the Association. The Board shall provide notice by first-class mail to all Members of a special meeting of Members, for the purpose of voting to authorize the Board to initiate action based upon a claim for defects in the design or construction of the Common Interest Development or any portion thereof, not less than thirty (30) nor more than sixty (60) days prior to the date of such a meeting. The notice to the Members shall include all of the following information:
(1) A description of the disputes;
(2) A certification from an engineer licensed in the State of California that a repair issue exists, along with a description of the scope of work necessary to cure such repair issue;
(3) The estimated cost to repair such repair issue;
(4) The name and professional background of the attorney(s) the Association may want to retain to pursue the claim against Declarant and a description of the relationship between such attorney and any members of the Board (if any); (5) Estimated attorneys’ fees, expert fees and other costs necessary to pursue the claim against Declarant and the source of funds which will be used to pay such fees and expenses;
(6) The estimated time necessary to conclude the action against Declarant;
(7) Potential benefits and adverse consequences of a civil action, including among other things, potential effects on property values and any disclosure regarding such action which may be required to be disclosed to lenders and prospective purchasers of Units in the Project;
80 (8) How the action will be funded;
(9) Offers of settlement; and
(10) How proceeds from the action or settlement of such action would be used.
(c) All applicable requirements of California Civil Code §§ 6000 and 6150, as such Sections may be amended from time to time, or any successor statute thereto shall be satisfied (notwithstanding the fact that said § 6000 does not by its terms apply to Owners), including, without limitation, all notice and dispute resolution requirements. (d) The Association shall finance any legal proceeding with monies that are specifically collected for same and may not borrow money or use the reserve funds or other monies collected for specific Association obligations other than legal fees.

15.3 Notice to Members of Other Civil Action Against Declarant. (a) Not later than thirty (30) days prior to the filing of any civil action by the Association against the Declarant for alleged damage to the Common Property, alleged damage to the Separate Interests that the Association is obligated to maintain or repair, or alleged damage to the Separate Interests that arises out of, or is integrally related to, damage to the Common Property or Separate Interests that the Association is obligated to maintain or repair, the Board of Directors of the Association shall a provide written notice to each Member of the Association who appears on the records of the Association when the notice is provided. This notice shall specify all of the following:
(1) that a meeting will take place to discuss problems that may lead to the filing of a civil action;
(2) the options, including civil actions, that are available to address the problems; and
(3) the date, time and place of this meeting.
(b) Notwithstanding subdivision (a), if the Association has reason to believe that the applicable statute of limitations will expire before the Association files the civil action, the Association may give the notice, as described above, within thirty (30) days after the filing of the action.

15.4 Alternative Dispute Resolution.
(a) Disputes and Remedies. In addition to the notification and dispute resolution procedures set forth in Sections 15.2 and 15.3 and notwithstanding anything in the Restrictions to the contrary, it is the desire and intention of this Section to provide an expedited means of resolving any claims, disputes and disagreements which may arise between Owner or the Association and the Declarant, Declarant’s general contractor, subcontractor, agents and/or employees (individually a “Declarant Party,” collectively the “Declarant Parties”) after the Close 81 of Escrow or other conveyance of any portion of the Property by Declarant concerning the Property and/or any express or implied warranties that are not resolved pursuant to any applicable statutory dispute resolution procedures (individually referenced to herein as “Dispute” and collectively as “Disputes”). Initially, the Declarant Parties will attempt to resolve any Dispute asserted by an Owner or the Association of which it is given notice. If the Dispute cannot be resolved between the parties in this manner, it will be decided through the arbitration procedure as set forth below. Alternatively, a Declarant Party, an Owner or the Association may elect to resolve such Disputes through a small claims court proceeding. THIS PROCESS INVOLVES WAIVER OF THE RIGHT TO A JURY TRIAL. BY EXECUTING THIS

DECLARATION, DECLARANT, AND BY ACCEPTING A DEED TO ANY PORTION

OF THE PROPERTY, EACH OWNER AND THE ASSOCIATION, AGREE TO BE BOUND BY THE PROVISIONS OF THIS SECTION.
(1) Notice. Any person with a claim defined as a Dispute, above (“Claimant”), shall notify the Declarant Party in writing of the claim, which writing shall describe the nature of such claim and any proposed remedy (“Claim Notice”). (2) Right to Inspect and Right to Take Corrective Action.

Within a reasonable period after receipt of the Claim Notice, which period shall not exceed sixty (60) days, the Declarant Party and the Claimant(s) shall meet at a mutually-acceptable place within or near the Project to discuss the Dispute. At such meeting or at such other mutually agreeable time, Declarant Party and its representatives shall have full access to the property that is subject to the Dispute claim and shall have the right to conduct inspections, testing and/or destructive or invasive testing the same in a manner deemed appropriate by Declarant Party which rights shall continue until such time as the Dispute is resolved as provided in this Section. The parties to the Dispute shall negotiate in good faith in an attempt to resolve the claim. If Declarant Party elects to take any corrective action, Declarant Party and its representatives and agents shall be provided full access to the Project that is subject to the Dispute to take and complete corrective action. (3) California Civil Code §§ 6000, 6100 and 6150. Nothing contained herein shall be deemed a waiver or limitation of the provisions of California Civil Code § 6150 (or any successor or replacement statute) and Section 15.3 of the Declaration. If the Dispute is subject to the provisions of California Civil Code §§ 6000 and 6100, as they may be amended from time to time, compliance with the procedures of these Sections shall satisfy the requirements of Sections 15.4.(a)(1) and 15.4(a)(2), as applicable. With respect to any suit that would be governed by California Civil Code § 6000 (or any successor or replacement statute), and as hereafter amended, if the parties had not agreed to arbitration hereunder, the Association or any other party required to proceed under California Civil Code § 6000 (or any successor or replacement statute) as a condition to filing a complaint must do so as a condition to commencing an arbitration. Compliance with California Civil Code § 6150 (or any successor or replacement statute) is a condition to the Association’s commencing an arbitration. (4) Mediation. If the parties to the Dispute that is not subject to California Civil Code § 6000 (or any successor or replacement statute) cannot resolve the claim pursuant to the procedures described in Section 15.4(a)(2) above (including, if applicable, California Civil Code § 6000 procedures), the matter shall be submitted to mediation pursuant to the mediation procedures adopted by the Judicial Arbitration and Mediation Services (“JAMS”) 82 (except as such procedures are modified by the provisions of this Section) or any successor thereto or to any other entity offering mediation services that is acceptable to such parties. No person shall serve as a mediator in any Dispute in which the person has any financial or personal interest in the result of the mediation, except by the written consent of all parties to the Dispute participating in the mediation. Prior to accepting any appointment, the prospective mediator shall disclose any circumstances likely to create a presumption of bias or to prevent a prompt commencement of the mediation process. Except as provided in the Declaration of Alternative Dispute Resolution for Trinity, the Association and each Owner covenants that each shall not commence any litigation against Declarant without complying with the procedures described in this Section.
(A) Position Memoranda; Pre-Mediation Conference.

Within ten (10) days of the selection of the mediator, each party to the Dispute participating in the mediation shall submit a brief memorandum setting forth its position with regard to the issues that need to be resolved. The mediator shall have the right to schedule a pre-mediation conference and all parties to the Dispute participating in the mediation shall attend unless otherwise agreed. The mediation shall be commenced within ten (10) days following the submittal of the memoranda and shall be concluded within fifteen (15) days from the commencement of the mediation unless the parties to the Dispute participating in the mediation mutually agree to extend the mediation period.

The mediation shall be held in the county in which the Project is located or such other place as is mutually acceptable to the parties to the Dispute participating in the mediation. (B) Conduct of Mediation. The mediator has discretion
to conduct the mediation in the manner in which the mediator believes is most appropriate for reaching a settlement of the Dispute. The mediator is authorized to conduct joint and separate meetings with the parties to the Dispute participating in the mediation and to make oral and written recommendations for settlement. Whenever necessary, the mediator may also obtain expert advice concerning technical aspects of the Dispute, provided the parties to the Dispute participating in the mediation agree and assume the expenses of obtaining such advice. The mediator does not have the authority to impose a settlement on the parties to the Dispute participating in the mediation. (C) Exclusion Agreement. Prior to the commencement
of the mediation session, the mediator and all parties to the Dispute participating in the mediation shall execute an agreement pursuant to California Evidence Code § 1115, et seq. (or any successor statute) in order to exclude the use of any testimony or evidence produced at the mediation in any subsequent dispute resolution forum, including, but not limited to, court proceedings, reference proceedings or arbitration hearings. Pursuant to California Evidence Code § 1115, et seq. (or any successor statute) the agreement shall specifically state that evidence of anything said or of any admission made in the course of the mediation is not admissible evidence, and disclosure of any such evidence shall not be compelled in any civil action in which, pursuant to law, testimony can be compelled to be given. Unless the document provides otherwise, no document prepared for the purpose of, or in the course of, or pursuant to, the mediation, or copy thereof, is admissible in evidence; and disclosure of any such document shall not be compelled in any civil action in which, pursuant to law, testimony can be compelled to be given. The provisions of California Evidence Code §§ 1115 through 1128 (or any successor or replacement statutes) shall also be applicable to such mediation process.
83 (D) Persons Permitted at Sessions. Persons other than the parties to the Dispute participating in the mediation, their representatives and the mediator may attend mediation sessions only with the permission of the parties to the Dispute participating in the mediation and the consent of the mediator; provided, however, that such permission and consent shall not be required to allow participation of such party’s insurer in the mediation to the extent required under such parties’ liability insurance policy. Confidential information disclosed to a mediator by such parties or by witnesses in the course of the mediation while serving in such capacity shall be confidential. There shall be no stenographic record of the mediation process. (E) Expenses. The expenses of witnesses for either side shall be paid by the party producing such witnesses. All other expenses of the mediation, including, but not limited to, the fees and costs charged by the mediator and the expenses of any witnesses or the cost of any proof or expert advice produced at the direct request of the mediator, shall be borne equally by the parties to the Dispute participating in the mediation unless they agree otherwise. Each party to the Dispute participating in the mediation shall bear its own attorneys’ fees and costs in connection with such mediation.
(5) Arbitration. Should either proceedings governed by
California Civil Code § 6000 (or any successor or replacement statute), or mediation pursuant to Section 15.4(a)(4) above not be successful in resolving any Dispute, any and all claims, controversies, breaches or disputes (each a “dispute”) by or between or among the Association, any Owner or Owners, and/or Declarant Party arising from or related to this Declaration, the Common Property, any Unit, the sale of any Unit, or any transaction related hereto, whether such dispute is based on contract, tort, statute, or equity shall be determined and resolved by the alternative dispute resolution procedures set forth below:
(A) Waiver of Trial by Judge or Jury. The dispute shall be resolved through binding arbitration. The Claimant and Declarant each gives up the right to have their respective claims and defenses decided by a judge or a jury. Instead all claims and disputes will be decided by the arbitrator.
(B) Rules Applicable to All Cases. The arbitration will be conducted by Judicial Arbitration and Mediation Services (“JAMS”) in accordance with the JAMS rules (“JAMS Rules”) then applicable to the claims presented, as supplemented by this Section. The following supplemental rules shall apply to all arbitration proceedings and shall govern in the event of a conflict between the rules set forth below and the JAMS Rules. (i) Qualification of Arbitrators. The arbitrator
shall be neutral and impartial and either a retired judge or a member or former member of the California State Bar with at least ten (10) years’ experience as a practicing lawyer in the area of construction law.
(ii) Appointment of Arbitrator. The arbitrator to
preside over the dispute shall be selected in accordance with the JAMS Rules, but no later than sixty (60) days after a notice of claim is filed.
84 (iii) Expenses. The fees and costs of the
arbitration and/or the arbitrator shall be borne equally by the parties to the arbitration; provided, however, that the fees and costs of the arbitration and/or the arbitrator ultimately shall be borne as determined by the arbitrator; provided that the arbitrator may not award against any party any expenses in excess of those that would be recoverable as costs if the dispute had been litigated to final judgment in court.
(iv) Preliminary Procedures. If state or federal
law requires the Claimant or Declarant to take steps or procedures before commencing an action in court, then the Claimant or Declarant must take such steps or follow such procedures, as the case may be, before commencing the arbitration. Nothing contained herein shall be deemed a waiver or limitation of the provisions of California Civil Code §§ 6000, 6100 or 6150 (or any successor or replacement statutes).
(v) Rules of Procedure. The arbitration shall be
administered by JAMS pursuant to its streamlined arbitration rules and procedures when the amount in controversy is Two Hundred Fifty Thousand Dollars ($250,000) or less. (vi) Participation By Other Parties. Each
Claimant and Declarant, to the extent either such party is defending a claim in the arbitration, may, if it chooses, have all necessary and appropriate parties included as parties to the arbitration. (vii) Rules of Law. The arbitrator must follow
California substantive law (including statutes of limitations) but strict conformity with the Rules of Evidence is not required, except that the arbitrator shall apply applicable law relating to privilege and work product. The arbitrator shall be authorized to provide all recognized remedies available at law or equity for any cause of action.
(viii) Attorney’s Fees and Costs. Each party shall
bear its own attorneys’ fees and costs (including expert witness costs) in the arbitration. (C) Additional Rules Applicable to Certain Cases. In
any arbitration in which a claim of any party exceeds Two Hundred Fifty Thousand Dollars ($250,000) in value, the following additional rules will supplement the JAMS rules and govern in the event of a conflict between the following rules and the rules set forth above, the JAMS rules, or both.
(i) Qualifications of Arbitrator. The arbitrator
shall be neutral and impartial and either a retired judge or a member or former member of the California State Bar with at least fifteen (15) years’ experience as a practicing lawyer in the area of construction law with substantial experience in the resolution of complex construction disputes. (ii) Rules of Procedure. The arbitration shall be
administered by JAMS pursuant to its comprehensive arbitration rules and procedures. (iii) Written Decision. Within thirty (30) days
after the hearing is closed, the arbitrator must issue a written decision. If any party requests it, the arbitrator must issue a reasoned award.
85 (D) AGREEMENT TO ARBITRATION AND
WAIVER OF JURY TRIAL. BY EXECUTING THIS DECLARATION, DECLARANT, AND

BY ACCEPTING A DEED FOR A UNIT AND/OR ACCEPTANCE OF THE TRANSFER OF

THE COMMON PROPERTY, AS THE CASE MAY BE, EACH OWNER AND THE ASSOCIATION, AGREE (1) TO HAVE ANY DISPUTE DECIDED BY NEUTRAL

ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT AND THE

CALIFORNIA ARBITRATION ACT, TO THE EXTENT THE CALIFORNIA ARBITRATION ACT IS CONSISTENT WITH THE FEDERAL ARBITRATION ACT; (2) TO GIVE UP ANY

RIGHTS THEY MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL; AND (3) TO GIVE UP THEIR RESPECTIVE JUDICIAL RIGHTS TO

DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THIS DECLARATION. IF ANY PARTY REFUSES TO SUBMIT TO ARBITRATION

AFTER AGREEING TO THIS PROVISION, SUCH PARTY MAY BE COMPELLED TO

ARBITRATE UNDER THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA

ARBITRATION ACT, TO THE EXTENT THE CALIFORNIA ARBITRATION ACT IS CONSISTENT WITH THE FEDERAL ARBITRATION ACT.
(E) Federal Arbitration Act. The Federal Arbitration Act (9 U.S.C. § 1, et seq.) now in effect and as it may be hereafter amended will govern the interpretation and enforcement of these arbitration provisions. (F) Final and Binding Award. The decision of the
arbitrator shall be final and binding. A petition to confirm, vacate, modify or correct an award may be filed in any court of competent jurisdiction, but the award may be vacated, modified or corrected only as permitted by the Federal Arbitration Act. (G) Severability. If the arbitrator or any court determines that any provision of this Section is unenforceable for any reason, that provision shall be severed, and proceedings in this Section shall be conducted under the remaining enforceable terms of this Section.
(H) Waiver of Jury Trial. In the event the foregoing
arbitration provision is held not to apply or is held invalid, void or unenforceable in its entirety for any reason, all disputes shall be tried before a judge in a court of competent jurisdiction without a jury. The judge in such court of competent jurisdiction shall have the power to grant all legal and equitable remedies and award compensatory damages. This mutual waiver of jury trial shall be binding upon their respective successors and assigns and upon all persons and entities asserting rights or claims or otherwise acting on behalf of Declarant or Claimant or their successors and assigns.
(I) Application of Award. Any proceeds awarded to the
Association or any Owner arising from any dispute by settlement, award or otherwise shall be applied first for the purpose of repairing any defect claimed under such dispute or replacing reserve funds previously utilized by the Association to cause such repairs and then to the costs of such litigation. Any excess proceeds shall be applied as determined by the Board or the Owner subject to any requirements established by the non-profit mutual benefit laws of the State of California and any other applicable laws.
86 (J) Statute of Limitations. Subject to the terms of Civil Code § 895, et seq. (or any successor or replacement statutes) and, as hereafter amended, nothing in this Section shall be considered to toll, stay, reduce or extend any applicable statute of limitations; provided, however, that the Declarant, the Association or any Owner shall be entitled to commence a legal action which in the good faith determination of the Declarant, the Association or Owner is necessary to preserve the Declarant’s, the Association’s or any Owner’s rights under any applicable statute of limitations, provided that the Declarant, Association or Owner shall take no further steps in processing the action until it has complied with the procedures described above. (K) Notwithstanding the foregoing, an aggrieved party
may seek relief in a small claims court of competent jurisdiction, and nothing in this agreement shall prevent the parties from agreeing to mediate a dispute at any time. (b) Notwithstanding any other provision of this Declaration to the contrary, this Section shall not be amended without the consent of Declarant and the vote or approval by written ballot of at least (a) ninety percent (90%) of the voting power of the Members of the Association other than Declarant, and (b) at least ninety percent (90%) of the Mortgagees.

15.5 Violation of Restrictions.

Without in any way limiting the generality of the foregoing, if the Board of Directors determines that there is a violation of any provision of this Declaration, or the Architectural Committee determines that an Improvement which is the maintenance responsibility of an Owner is in need of installation, repair, restoration or painting, then the Board shall give written notice to the responsible Owner of the condition or violation complained of. Unless the Architectural Committee has approved in writing corrective plans proposed by the Owner to remedy the condition complained of within such period of time as may be determined reasonable by the Board after it has given said written notice, and such corrective work so approved is completed thereafter within the time allotted by the Board, the Board, after Notice and Hearing, shall undertake to remedy such condition or violation complained of, and the cost thereof shall be charged to the Owner and his or her separate Separate Interest whose Residence is the subject matter of the corrective work. Such cost shall be deemed to be a Special Assessment to such Owner and shall be subject to enforcement and collection by the Board in accordance with the procedures provided for in this Declaration. The Board may also adopt a schedule of reasonable fines or penalties which, in its reasonable discretion, it may assess against an Owner for the failure of such Owner, or of a resident of or visitor to such Owner’s Unit, to comply with any provision of the Restrictions. Such fines or penalties shall be deemed to be a Special Assessment and may only be assessed by the Board after Notice and Hearing.

15.6 Severability.

The provisions of this Declaration shall be deemed independent and severable, and a determination of invalidity or partial invalidity or unenforceability of any one provision or portion hereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provisions hereof.
87 15.7 Interpretation.

The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for the creation and operation of a mixed-use residential/commercial development and for the maintenance of the Common Property, and any violation of this Declaration shall be deemed to be a nuisance. The Article and Section headings, titles and captions have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction. As used herein, the singular shall include the plural and the masculine, feminine and neuter shall each include the other, unless the context dictates otherwise. In interpreting the Restrictions and the deed to any Unit, the physical as-built boundaries of Improvements which are constructed or reconstructed in substantial accordance with the original plans for the Project shall be conclusively presumed to be the boundaries of the Units, regardless of settling or lateral movement of the Improvements and regardless of minor variances between Unit boundaries, as defined in this Declaration or any Unit deed, and the boundaries of those Improvements, as constructed or reconstructed. As used in this Declaration, the term “including” shall be construed and understood to mean “including, without limitation” or “including, but not limited to.”

15.8 Mergers or Consolidations.

Upon a merger or consolidation of the Association with another association, its properties, rights and obligations may, by operation of law, be transferred to another surviving or consolidated association or, alternatively, the properties, rights and obligations of another association may, by operation of law, be added to the properties, rights and obligations of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may administer and enforce the covenants, conditions and restrictions established by this Declaration governing the Property, together with the covenants and restrictions established upon any other property, as one (1) plan.

15.9 Use of Common Property.

The Board of Directors shall have the right to limit the number of guests that an Owner or such Owner’s tenant may permit to use any open parking area or other facilities, including recreational facilities, if any, on the Common Property, and the Board shall have the right to set further reasonable restrictions on the time and manner of use of said parking areas, recreational facilities, and other facilities in accordance with the Rules and Regulations, including, without limitation, Rules and Regulations restricting or prohibiting the use of all or designated portions of the recreational facilities of the Property by minors, guests of an Owner or his or her tenants.

15.10 No Public Right or Dedication.

Except as may otherwise be expressly provided herein, nothing contained in this Declaration shall be deemed to be a gift or dedication of all or any part of the Property to the public, or for any public use; provided, that the foregoing provisions shall not be construed or understood to limit the effectiveness of any public dedication expressly set forth on any 88 subdivision map Recorded or any other instrument with respect to the Property, or any portion thereof.

15.11 No Representations or Warranties.

No representations or warranties of any kind, express or implied, have been given or made by Declarant, or its agents or employees in connection with the Property, or any portion thereof, concerning its physical condition, zoning, compliance with applicable laws, or fitness for intended use, or in connection with the subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation thereof as a mixed-use residential/commercialproject, except as specifically and expressly set forth in this Declaration and except as may be filed by Declarant from time to time with the DRE.

15.12 Nonliability and Indemnification.
(a) General Limitation. Except as specifically provided in the Restrictions or as required by law, no right, power, or responsibility conferred on the Board or the Architectural Committee by this Declaration, the Articles or the Bylaws shall be construed as a duty, obligation or disability charged upon the Board, the Architectural Committee, any member of the Board or of the Architectural Committee, or any other officer, employee or agent of the Association. No such Person shall be liable to any party (other than the Association or a party claiming in the name of the Association) for injuries or damage resulting from such Person’s acts or omissions within what such Person reasonably believed to be the scope of his or her Association duties (“Official Acts”), except to the extent that such injuries or damage result from such Person’s willful or malicious misconduct. No such Person shall be liable to the Association (or to any party claiming in the name of the Association) for injuries or damage resulting from such Person’s Official Acts, except to the extent that such injuries or damage result from such Person’s negligence or willful or malicious misconduct. (b) Indemnification. The Association shall pay all expenses incurred by, and satisfy any judgment or fine levied against, any Person as a result of any action or threatened action against such Person to impose liability on such Person for his or her Official Acts, provided that:
(1) The Board determines that such Person acted in good faith and in a manner such Person reasonably believed to be in the best interests of the Association; (2) In the case of a criminal proceeding, the Board determines that such Person had no reasonable cause to believe his or her conduct was unlawful; and (3) In the case of an action or threatened action by or in the right of the Association, the Board determines that such Person acted with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

Any determination of the Board required under this Section must be approved by a majority vote of a quorum consisting of Directors who are not parties to the action or threatened action giving rise to the indemnification. If the Board fails or refuses to make any such 89 determination, such determination may be made by the vote or written consent of a majority of a quorum of the Members of the Association, provided that the Person to be indemnified shall not be entitled to vote.

Payments made hereunder shall include amounts paid and expenses incurred in settling any such action or threatened action. This Section shall be construed to authorize payments and indemnification to the fullest extent now or hereafter permitted by applicable law.

The entitlement to indemnification hereunder shall inure to the benefit of the estate, executor, administrator, heirs, legatees, or devisees of any Person entitled to such indemnification.

15.13 Notices.

Except as otherwise provided in this Declaration, in each instance in which notice is to be given to an Owner, the same shall be in writing and may be delivered personally to the Owner, in which case personal delivery of such notice to one (l) or more co-owners of a Separate Interest or to any general partner of a partnership owning a Separate Interest shall be deemed delivery to all co-owners or to the partnership, as the case may be. Personal delivery of such notice to any officer or agent for the service of process on a corporation shall be deemed delivery to the corporation. In lieu of the foregoing, such notice may be delivered by regular United States mail, postage prepaid, addressed to the Owner at the most recent address furnished by such Owner to the Association or, if no such address shall have been furnished, to the street address of such Owner’s Unit. Such notice shall be deemed delivered three (3) business days after the time of such mailing, except for notice of a meeting of Members or of the Board of Directors in which case the notice provisions of the Bylaws of the Association shall control. Any notice to be given to the Association may be delivered personally to any member of the Board, or sent by United States mail, postage prepaid, addressed to the Association at such address as shall be fixed from time to time and circulated to all Owners. Any notice to be given to the Declarant shall be delivered personally, or sent by registered or certified mail, return receipt requested, addressed to the principal office of the Declarant, or such other address as may be provided from time to time by the Declarant.

15.14 Priorities and Inconsistencies.

If there are conflicts or inconsistencies between this Declaration and the Articles of Incorporation, the Bylaws of the Association, or any Condominium Plan Recorded in furtherance of the Project contemplated by this Declaration, then the terms and provisions of this Declaration shall prevail. If there are conflicts or inconsistencies between this Declaration and the Limited Warranty, the terms and provisions in the Limited Warranty shall prevail.

15.15 Constructive Notice and Acceptance.

Every Person who owns, occupies or acquires any right, title, estate or interest in or to any Separate Interest or other portion of the Property does hereby consent and agree, and shall be conclusively deemed to have consented and agreed, to every limitation, restriction, easement, reservation, condition and covenant contained herein, whether or not any reference to these restrictions is contained in the instrument by which such Person acquired an interest in the Property, or any portion thereof.
90 15.16 Declarant Delivery of Documents.
(a) Commencing not later than ninety (90) days after the Close of Escrow for the sale of the first Separate Interest in the Project, copies of the documents listed below, as soon as readily obtainable, shall be delivered by the Declarant to the Board of Directors at the office of the Association, or at such other place as the Board of Directors shall prescribe.

The obligation to deliver the documents listed below shall apply to any documents obtained by the Declarant no matter when obtained, provided, however, such obligation shall terminate upon the earlier of (i) the conveyance of the last Separate Interest in the Project or (ii) three (3) years after expiration of the most recently issued Final Subdivision Public Report for the Project:
(1) The Recorded Subdivision Map for the Project;
(2) The Recorded Condominium Plan for the Project, and all amendments thereto;
(3) The deeds and easements executed by the Declarant
conveying any property to the Association, to the extent applicable; (4) The Recorded Declaration;
(5) The Association’s filed Articles of Incorporation, and all amendments thereto;
(6) The Association’s Bylaws, and all amendments thereto; (7) All architectural guidelines and all other rules regulating the use of an Owner’s interest in the Project or use of the Common Property which have been promulgated by the Association;
(8) The plans approved by the local agency or county where the subdivision is located for the construction or improvement of facilities that the Association is obligated to maintain or repair; provided, however, that the plans need not be as-built plans and that the plans may bear restrictions on their commercial exploitation or use and may contain disclaimers regarding their accuracy;
(9) All notice of completion certificates issued for Common Property Improvements;
(10) Any bond or other security device in which the Association is the beneficiary;
(11) Any written warranty being transferred to the Association for Common Property equipment, fixtures or improvements; (12) Any insurance policy procured for the benefit of the Association, its governing board or the Common Property; 91 (13) Any lease or contract to which the Association is a party; (14) The Membership register, including mailing addresses and telephone numbers, books of account and minutes of meetings of the Members, of the governing body and of committees of the governing body of the Association; and (15) Any instrument referred to in California Business and Professions Code § 11018.6(d) but not described above which establishes or defines the common, mutual or reciprocal rights or responsibilities of Members of the Association.

15.17 Mixed Use Development Disclosure. The Commercial Units within the Project are zoned for commercial uses. Commercial operations may cause Owners and occupants in the Project to be subject to inconveniences or discomfort, resulting from such conditions as noise, odors, fumes, dust, smoke, operations of equipment at any hour of the day or night. Each Owner, by accepting a deed to a Separate Interest, hereby acknowledges that (i) normal commercial practices will continue indefinitely in the Project, (ii) the Owners of such nearby Commercial Units have a right to continue such normal commercial operations using current industry-accepted methods, with the potential for traffic, noise, light, dust, fumes, and odor impacts that may affect the Project, (iii) Owner agrees to waive any legal right(s) to oppose or object to such operations and any impacts arising therefrom now and in the future, and (iv) under no circumstances shall Declarant be responsible for any adverse impact related to the existence, use and operation of any commercial business.

15.18 Disclosure of Agricultural Operations and Right to Farm.

Each Owner, by acceptance of a deed to a Separate Interest acknowledges that properties within proximity of the Project are presently utilized for agricultural production and agricultural operations. Each Owner acknowledges that such operations may subject his or her Separate Interest to inconveniences or discomfort arising from such agricultural operations, including but not limited to, noise, odors, fumes, dust, legal pesticide use, fertilizers, smoke, insects, farm personnel and truck traffic, visual impacts, night time lighting, operation of wind machines, bird bombs, pesticides, fertilizers, and other equipment, the storage, warehousing and processing of agricultural products or other inconveniences or discomforts associated with the protected agricultural operations. These agricultural practices may occur at any time during the 24-hour day. Individual sensitivities to those practices can vary from person to person. Such inconveniences may continue for so long as these properties are used for agricultural production and/or agricultural operations. Each Owner accepts such inconveniences or discomfort as a normal and necessary aspect of living in a county with a strong rural character and an active agricultural industry. Please be advised that each Owner may be barred from obtaining legal remedies against agricultural practices conducted in a manner consistent with proper and accepted customs and standards pursuant to Section 3482.5 of the Civil Code or any pertinent local ordinance. For additional information pertaining to this disclosure and the Right to Farm Ordinance or concerns 92 with an agricultural operation, each Owner is encouraged to contact the County Agricultural Commissioner's Office.

15.19 Security.

The Association may, but shall not be required to, from time to time, provide measures or take actions which directly or indirectly improve safety on the Project; however, each Owner, for himself or herself and his or her tenants, guests, licensees, and invitees, acknowledges and agrees that the Association is not a provider of security and shall have no duty to provide security on the Project. It shall be the responsibility of each Owner to protect his or her person and property and all responsibility to provide such security shall lie solely with each Owner.

Neither Declarant nor the Association shall be held liable for any loss or damage by reason of the failure to provide adequate security or the ineffectiveness of safety measures undertaken.

15.20 Additional Provisions.

Notwithstanding the provisions contained in the Restrictions, the Association and the Owners should be aware that there may be provisions of various laws, including, without limitation, the Davis-Stirling Common Interest Development Act contained in the California Civil Code, which may modify, supplement or override the Restrictions as a matter of law.

ARTICLE XVI

16. Covenants in Favor of Local Jurisdiction.

16.1 Conflict with Other Articles. In the event of any conflict between this ARTICLE XVI and any other ARTICLE of the Declaration, ARTICLE XVI shall prevail.

16.2 City Rights to Common Areas. Whenever there are areas of common ownership within this Project, the use and operation of which is administered by the Association regulated by covenants, conditions, and restrictions, said covenants, conditions, and restrictions shall, and hereby does, incorporate the following provisions:
(a) The City shall be granted the right of immediate access to all portions of the common areas for the purpose of preserving public health, safety, and welfare.
(b) The Association shall have the duty to maintain and repair all fire suppression systems, on-site sewer, water, and storm drainage facilities, unless the City has determined that a particular facility should be public to provide necessary system completion or otherwise protect public, health, safety, and welfare. (c) The Association shall have the duty to pay all utility and waste collection charges that are not separately metered and billed to Owners, including but not limited to charges for sewer, water, gas, solid waste, sanitation, and electric services.
(d) No property owner shall alter, modify, reconstruct, or do any other thing to 93 any party wall or to any plumbing, electrical, or mechanical fixture located along such wall which will impair the integrity of the wall as a fire separation without the review and approval of the building official of the City. (e) Landscaping shall be provided and maintained by the Association in those common areas adjacent to public streets and highways. The Association shall provide and maintain the landscaping in such areas in a manner compatible with the requirements of the Grover Beach Municipal Code, and shall not decrease the amount of assessments charged against members of the Association if such decrease will adversely affect the ability of the Association to perform this maintenance.

16.3 Amendment. Any amendment by the Association of the provisions of this ARTICLE XVI shall require the prior written consent of the City Manager of the City.

This Declaration is dated for identification purposes ______________, 202__. “Declarant”

GB TRINITY LLC,
a California limited liability company
By:

Name:

Title:

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

STATE OF CALIFORNIA )
)
COUNTY OF _________________________ )
On ____________________, before me, _____________________________________________, a 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
Agenda Item No. 7

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Micheal Flores, Finance Manager
SUBJECT: Annual Master Fee Schedule Update

RECOMMENDATION
Adopt a Resolution updating the Citywide Master Fee Schedule approving cost increases based on the Consumer Price Index and other changes to become effective July 1, 2025.

BACKGROUND
The Citywide Master Fee Schedule (Schedule) summarizes all fees the City charges for various services and permits. This schedule ensures transparency and consistency in the fees charged while ensuring the level set for fees matches the cost to provide the services and permits. Fees are developed based on the cost to the City to provide the service or on the impact the activity has on the City or its property. Adjusting the fees in accordance with the Consumer Price Index (CPI) ensures sufficient cost-recovery for the City. The adjustment requested for the Schedule is based on the CPI for Los Angeles-Long Beach-Anaheim, CA which had an increase of 3.3% for the year ending on December 31, 2024. For reference, the Master Fee Schedule was last increased by a CPI of 3.475% in FY 2023-24.

Additionally, the City collects certain fees that are passed through from other agencies and are only updated when those agencies modify their fee structures. One such agency is the South San Luis Obispo County Sanitation District, which provides wastewater treatment to Grover Beach residents and businesses.

Community Services Division Fees
Staff is proposing several fee adjustments in the Community Services Division including adding new rental fees for the recently constructed Mentone Park pickleball courts and reducing Application Fees for Special Events/Outdoor Assemblies and Special Event Booth Fees. No increases are recommended for Facility Rental Fees and Deposits. These changes are designed to encourage more recreational activities and special events while maintaining competitive pricing.

Community Development Department Fees
Staff is also proposing the adjustment of permit fees in the Community Development Department including increasing fees related to signage, temporary power poles, and swimming pool change outs. These changes are meant to ensure that these fees accurately reflect staff costs on the review and approval of these permits.

Staff Report: Annual Master Fee Schedule Update Page 2
April 14, 2025

FISCAL IMPACT
The fiscal impact to the General Fund is estimated to be a total increase in revenue between $20,000 and $25,000 depending upon the level of activity for the related services in FY 2025-26.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Adopt a Resolution updating the fee increases to the Master Fee Schedule; or

2. Do not adopt the Resolution and provide alternative direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Attachments

1. Resolution updating the Master Fee Schedule, including Exhibit A – City of Grover Beach Master Fee Schedule.

RESOLUTION NO. 25-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,

CALIFORNIA AMENDING THE MASTER FEE SCHEDULE
WHEREAS, the City of Grover Beach has established a Citywide Master Fee Schedule which summarizes all fees charged by the City for various services and permits; and WHEREAS, the Citywide Master Fee Schedule ensues transparency and consistency in the fees charged to provide the services and permits; and
WHEREAS, adjusting fees in accordance with the Consumer Price Index (“CPI”) ensures sufficient cost-recovery for the City; and
WHEREAS, the CPI for Los Angeles-Long Beach-Anaheim, CA increased by 3.3% for the year ending on December 31, 2024; and
WHEREAS, the City Council of the City of Grover Beach finds annual adjustments necessary to the Master Fee Schedule; and
WHEREAS, City Staff recommends adjusting specific fees to reflect both the CPI increase and actual service delivery costs, thereby ensuring appropriate cost recovery for City services.

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

1. The Citywide Master Fee Schedule is hereby amended as set forth in Exhibit A, attached hereto and incorporated by reference.

2. The fees listed in Exhibit A of this Resolution shall become effective July 1, 2025.

On motion by Council Member _____, seconded by Council Member ____, and on the following roll-call vote, to wit:

AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 14th day of April 2025.

KASSI DEE, MAYOR
Attest:

WENDI B. SIMS, CITY CLERK
Attachment 1
City of Grover Beach
Master Fee Schedule
Effective July 1, 2025
Exhibit A
FY 2025-2026
General Government Fees ………………………………………………………………………………………1 Community Services Fees ………………………………………………………………………………………2 Utility Fees ……………………………...………………………………………………………………………… 7 Planning Division Fees ……………………..……………………………………………………………………11 Fines & Penalties.………………..…………………………………………………………………………………13 Building Division Fees ……………………………………………………………………………………………14 Development Impact Fees ………………………………………………………………………………………24 Public Works Fees …………………………………………………………………………………………………28 Police Department Fees …………………………………………………………………………………………30 Commercial Cannabis Regulatory Fees…..... ………………………………………………………………. 33 Pass Through Fees ……………………………………………………………………………………………… 34 Waste Connections ………………………………………………………………………………………………36 Fire & Safety Fees …………………………………..………………………...………………………………… 38 Legistlative History ……………………………………………………………………………………………… 39 Fee Description & Unit/Time Effective 7/1/25
Administrative Hearing Fee $ 242.00
Fireworks Stand Permit (GBMC 3990) $ 1,013.00
Franchise Fees
Refuse Collection:
$ 10,000.00
(GBMC Section 5413 (H))
Contract Execution - Amount of Cash or Surety Bond $ 2,500.00 (GBMC Section 5413(B))
Charter Communications Cable (TV gross revenues) 5%
Municipal Election Filing Fees
Candidate Statements (Deposit) Actual Cost
Nomination papers for each candidate for elective office $ 25.00 (GBMC Section 2302 and Set by State Statute)
$ 200.00
Miscellaneous
Annual Agenda Subscriptions $ 87.00
Copy cost (per page)
8 1/2" x 11" or 8 1/2" x 14" $ 0.26
11" x 17" $ 0.28
Copy of FPPC Forms per page (GC 81008) $ 0.10
(Campaign Statements and Form 700's)
Late Fee for filing Statement of Economic Interest (FPPC) $ 10.00 (Per Day, Set by State Statute)
Retrieval fee for statements 5 or more years old (GC 81008) $5.00 Per Request Notary Fee (Set by State Statute) $ 15.00
Records Certification $ 28.00
Solicitation - Certificate of Registration
$ 275.00
Charitable Organization Use (not restricted to residences) No Fee (GBMC Section 3132)
Taxi Company Establishment $ 709.00
$ -
$ Taxi Company Rate Change Request $ 390.00
$ -

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
City Management Department
Notice of Intent to Circulate Ballot Initiative (Set by State Statute) (EC9202)
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Commercial Use at any Residence (GBMC Section 3141) Solicitation Certificate must be obtained for each person who will be representing the business.

Plus deposit for Public Hearing Notice expenses. Deposit to be determined by the City Clerk
Plus deposit for Public Hearing Notice expenses. Deposit to be determined by the City Clerk
Bid Process - Surety Bond which accompanies a bid for refuse franchise agreement
+ DOJ and City Fingerprinting costs associated with solicitation permit.

Effective: 7/1/25 1
Fee Description & Unit/Time
Classes:

Tiny Tots - Childhood Enrichment Classes
2 Days a Week (Monthly) $ 165.00
3 Days a Week (Monthly) $ 190.00
$ 20.00
Late Payment Fee (per late registration) $ 35.00
Special Events
Summer Concert Vendor Fee $ 34.00
Special Event Booth Fee (Plus Business Tax Certificate Fee) $ 50.00 Registration Fee - Only applies to initial enrollment if continually enrolled in class. If not continually enrolled then will be collected when reinitiate class)
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Classes within categories are subject to change. Subsidy amounts are for categories approved by the City Council.

New class fees will be developed by the Community Services Supervisor and the Administrative Services Director and can be administratively added with approval by the City Manager.

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY SERVICES DEPARTMENT
Effective 7/1/25
2 Fee Description & Unit/Time

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY SERVICES DEPARTMENT
Effective 7/1/25
Other Fees
Contract Recreation Classes City contract instructors receive 70% of the class fee and the City receives the remaining 30% for on site classes
City contract instructors receive 80% of the class fee and the City receives the remaining 20% for off site classes
(on City property)
Bounce House Fee $ 39.00
Class Cancellation/Refund Fee $ 17.00
Field Lights $ 35.00
$ 25.00
Field Lights used for Non-Profit Organized Youth League $ 20.00 Fields, Courts & Pits (per 4 hours) $ 36.00
$ 32.00
Resident $ 26.00
Pickleball Court (per 2 hours)
Resident $ 13.00
Non-Resident $ 18.00
Pickleball Full Facility Tournament Rental Fee (up to 12 hours Flat rate) $ 250.00 Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Field Lights used by Non-Profit Organized Adult League (Per Hour). Must be recognized by the Parks and Recreation Program Director.

Fields, Courts & Pits (per 4 hours) Non-Profit
Effective: 7/1/25 3
Grover Heights Lower Group BBQ Area
All Day 1-60 Persons
Resident: $72.00
Non - Residents: $80.00
Grover Heights Upper (Covered) Group BBQ Area
All Day
Resident: $85.00
Non - Residents: $95.00
16th Street Park
All Day
Resident: $110.00
Non - Residents: $120.00
Parks Deposit (Includes Key Deposit) $87.00
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY SERVICES DEPARTMENT
1-99 Persons
Effective 7/1/25
1-60 Persons
Effective: 7/1/25 4
Fee Description & Unit/Time Effective 7/1/25
Special Event/Outdoor Assembly (non-City sponsored events) for 100 participants and over Application Fee (No City Council Review) $ 500.00
Application Fee (With City Council Review) $ 1,535.00
(A waiver request may be submitted for those activities related to the exercise of a first amendment right to free speech) Non-Resid.

Facility Rental Fees
Ramona Garden Park & Community Center
Weekday Hourly $ 37.00 $ 47.00 $ 82.00 $ 92.00
Weekend Hourly $ 49.00 $ 62.00 $ 109.00 $ 120.00
Weekend (12 hours) $ 435.00 $ 543.00 $ 1,047.00 $ 1,141.00 Deposit
* Low Impact $ 450.00 $ 450.00 $ 450.00 $ 450.00
** High Impact $ 750.00 $ 750.00 $ 750.00 $ 750.00
Special Use deposits
** High Impact Functions (per reservation) $ 272.00 $ 272.00 $ 272.00 $ 272.00 Cleaning / BBQ Key $ 87.00 $ 87.00 $ 87.00 $ 87.00
$284.00
$284.00
Liability Insurance 1-50 guests (resv.)
Liability Insurance 50-500 guests (resv.)
Cleaning fees of the Facilities will be at contract cost + 30% overhead.

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY SERVICES DEPARTMENT
Effective 7/1/25
The following items will be charged for actual cost & 10% administrative fee Cleaning Fee (events w/alcohol) Ramona (per event)
Resident
Grover Beach
Non-Profit
Other
Non-Profit
Cancellation Fee per facility reservation if less than 30 days notice 25% of fee paid; up to a maximum of $200 Cleaning Fee (events w/alcohol) Comm. Center (per event) Cleaning Fee - City Park BBQ/Picnic areas
Effective: 7/1/25 5
Fee Description & Unit/Time Effective 7/1/25

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY SERVICES DEPARTMENT
Must be approved by the Community Services Supervisor.

Non-Profit: Non-profit agencies or other groups that by nature serve the needs of the City and community.

Must be approved by the Community Services Supervisor.

Private: All groups or individuals that do not qualify as City Sponsored, Grover Beach Non-Profit or Non-Profit.

Impact Definitions
* Low Impact: Event is defined as any meeting/party/event which does NOT include any of the following: food, drink, alcohol served or sold, band or DJ, bounce house, and/or pony rides. ** High Impact: Event is defined as any meeting/party/event which DOES include any of the following: Food, drink, alcohol served or sold, band or DJ, bounce house, and/or pony rides.

Effective 7/1/25
Portable Public Address System $ 11.00
Projection Screen $ 11.00
100 Cup Coffee Pot $ 5.00
Stereo System $ 5.00
Podium $ 5.00
Tables & Chairs
Less than 25 Guests $ 21.00
26-49 Guests $ 41.00
50+ Guests $ 62.00
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

User Group Definitions
City Sponsored: Activities sponsored by the City of Grover Beach Community Services Department, or used by a Federal, State, or Local Government Agency.

Grover Beach Non-Profit: Non-profit agencies or other groups that by nature serve the needs of the City and community and are based in Grover Beach. The Agency's mailing address must be in Grover Beach.

Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Amenities Fees (Include amenities in rental fee with exception of tables and chairs)
All Renters
City of Grover Beach Building Facility Usage Fees
6 Fee Description & Unit/Time Effective 7/1/25
Hydrant Meter Set-up Fee $ 150.00
Miscellaneous
Budget $ 54.00
Audit $ 43.00
South San Luis Obispo County Sanitation District Charge (Monthly) Please see Pass Thru to Other Agency Page
Storm Water Utility Fee (Monthly) $ 4.85
Utility Account Fees
Account Name/Data Change $ 41.00
Broken Lock Fee $ 60.00
Data Logging of a Utility Meter $ 127.00
$ 25.00
$ 356.00
Late Fees (Accounts paid after original invoice due date) 10% or $10 whichever is higher
Pull & Test Meter Fee $ 251.00
(If meter is bad the fee is refunded)
Pulled Meter Fee (Usage on an off meter) $ 127.00
Reconnection Fee $ 105.00
Reconnection Fee (SB998) $ 61.00
Reconnection Fee - After Hours $ 380.00
Reconnection Fee - After Hours (SB998) $ 182.00
$ 158.00
Returned Check/Item Fee (First Check) (California Civil Code 1719) $ 25.00 $ 35.00
Set-up Fee for Water & Wastewater Customers $ 126.00
Set-up Fee for Property Owners with multiple rentals $ 35.00 (For each rental put back in property owner's name) (Legacy Accounts only) $ 73.00

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

ADMINISTRATIVE SERVICES DEPARTMENT
Door Notice Fee - (Example: 48 Hour Shut-off Notice and Notification of Emergency Turn-on Fee - (After Hours call out 4:00 pm to 10:00 am) Reconnection Fee - Unauthorized (Reconnected by Non-City personnel) Returned Check/Item Fee (Subsequent Check) (California Civil Code 1719) Temporary Service for Home Inspection - Only used when Public Works is standing by for fifteen minutes or less. No water registered through meter. If water is registered though meter, requestor will be required to apply for service and will be billed accordingly.

Effective: 7/1/25 7
Fee Description & Unit/Time Effective 7/1/25

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

ADMINISTRATIVE SERVICES DEPARTMENT
Tenant Deposit $ 298.00
Business Tax Certificate per square feet per Ord 18-07
1-1,000sq ft sq $ 60.00
1,001-2,000 sq $ 125.00
2,001-5,000 sq $ 200.00
5,001-10,000 sq $ 350.00
10,001-20,000 sq $ 500.00
20,001-40,000 sq $ 650.00
40,001-60,000 sq $ 800.00
60,000sq ft and up $ 950.00
State mandated ADA Fee added to all Business Tax Certificates per $ 4.00 SB 1186 eff 1/1/18
A deposit may be required by the City.

Business Tax Certificate Late Penalty
Payment received after January 1st, a 10% penalty on the delinquent Business tax amount will be applied.

Payrment received after February 1st, a 25% penalty on the delinquent Business tax amount will applied.

Payment received after March 1st, a 25% penalty on the delinquent Business tax amount will be applied, in addition, interest at the rate of 3/4 of one percent per month, or fraction thereof, shall be paid on the amount of the Business Tax (GBMC Section 10210 (D)
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. 8 July 1 2025
Wastewater Rates (Monthly)
Boarding house (per unit) $ 16.16
Plus per bedroom charge $ 10.40
Car washes & Laundromats minimum charge $ 6.44
Per 100 cubic feet above minimum $ 2.11
Church $ 15.64
Plus per parsonage or dwelling unit $ 13.34
Commercial establishment (Public Place) (Up to 5 Fixtures) $ 15.64 Each additional fixture $ 4.28
Factories, industrial plants, with 20 or less employees $ 10.53 Each additional employee over 20 $ 1.20
Hotel, motel, auto court or lodge (per unit) $ 16.08
Mobile home (per space) $ 13.34
Restaurants minimum charge $ 2.23
Per 100 cubic feet against minimum $ 4.28
Schools minimum annual charge per ADA and employees $ 3.44 Schools with Cafeterias additional
Per ADA and employees $ 1.44
Single-Family dwelling unit $ 13.34
Theater, clubhouse or place of amusement $ 15.64
Travel trailer and recreation vehicle space $ 6.87
Multi-Family, Two or more dwellings (per unit) $ 13.34
Plus Per Each coin-operated washer $ 2.91
$ 0.42
Storm Water Fee (monthly) $ 4.85
Excess Discharge per 100 cubic feet (3,000 Cubic Feet per GBMC 7182)

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

ADMINISTRATIVE SERVICES DEPARTMENT
Rates Effective
Description
Higher rate where heavy discharge or character of wastewater discharge warrants
Effective: 7/1/25 9
July 1 2025
Water Rates (Monthly)
Residential Base Charges
5/8" - Meter $ 17.82
3/4" - Meter $ 17.82

1.0" - Meter $ 17.82

1.5" - Meter $ 59.33

2.0" - Meter $ 94.96

3.0" - Meter $ 189.94

4.0" - Meter $ 296.96
Residential Volume, in addition to Base Charge (per 100 Cubic Feet):
0-1,000 CF $ 3.23
1,000 to 2,200 CF $ 6.68
>2,200 CF $ 9.62
Non-Residential Base Charges
5/8" - Meter $ 17.82
3/4" - Meter $ 26.73

1.0" - Meter $ 29.76

1.5" - Meter $ 59.33

2.0" - Meter $ 94.96

3.0" - Meter $ 189.94

4.0" - Meter $ 296.96
Landscape Volume, in addition to Base Charge (per 100 Cubic Feet):

All Usage $ 7.27
All Other Volume, in addition to Base Charge (per 100 Cubic Feet):

All Usage $ 7.00

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

ADMINISTRATIVE SERVICES DEPARTMENT
Rates Effective
Description
Effective: 7/1/25 10
Fee Description & Unit/Time Effective 7/1/25

PLANNING DIVISION
Appeal to Planning Commission or City Council $ 1,000.00 Home Occupation Permit $ 90.00
Code Interpretation $ 646.00
Zoning Verification Review $ 413.00
Changes to an Approved Development
Minor $ 620.00
Major $ 2,583.00
Modifications to Standards
Minor $ 620.00
Major $ 2,583.00
$ 1,550.00
$ 373.00
$ 775.00
$ 186.00
Occupied $ 284.00
Non-Owner - Occupied $ 341.00
Occupied $ 218.00
Non-Owner - Occupied $ 218.00
Temporary Use Permit
$ 119.00
$ 251.00
$ 600.00
$ 600.00
Coastal Development Permit $ 2,500.00
Commercial Cannabis Permit (New or Renewal) $ 500.00
Administrative Development Permit
Administrative Coastal Development Permit
The following amounts are DEPOSITS and reflect the minimum estimated costs for processing the "typical" development permit application. The Community Development Department may increase or decrease the deposit amount depending on the complexity of the project. If at any time during the development review process deposits are insufficient to cover the cost of processing the application, the City shall cease processing until additional funds are submitted.

Development Permit Applications
The following amounts listed are DEPOSITS
Subsequent Application Review
Major Project
Short-Term Rental Permit - New
Short-Term Rental Permit - New OwnerShort-Term Rental Permit - New OwnerMinor - Parking lot sales, Grand Openings and similar events as determined by the Community Development Director
Major - Seasonal Sales or similar events as determined by the Community Development Director
Short-Term Rental Permit - Renewal
Short-Term Rental Permit
Short-Term Rental Permit
Minor Project
Minor Project

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT
Note: Applicant shall be required to provide the necessary information and plans to the Community Development Department if an appeal is filed.

Pre-application Review
Major Project (GBMC Art. IX Chapter 6
Effective: 7/1/25 11
Fee Description & Unit/Time Effective 7/1/25

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT
Development Permit $ 2,500.00
$ 5,000.00
Negative Declaration (Outsourced) Consultant Contract
+25%
Mitigated Negative Declaration (In House) $ 5,000.00
Mitigated Negative Declaration (Outsourced) Consultant Contract +25%
Environmental Impact Report (Outsourced) Consultant Contract +25%
(Consulting Contract will be known prior to amounts being deposited) $ 4,000.00
Sign Program $ 800.00
Subdivision Maps
Final Map Approval $ 2,500.00
Lot Line Adjustment, Lot Merger, Certificate of Compliance $ 1,500.00 Tentative Parcel Map $ 2,000.00
Tentative Tract Map $ 2,500.00
Time Extension $ 700.00
Use Permit
$ 1,000.00
$ 2,500.00
$ 2,500.00
$ 4,000.00
Variance $ 2,500.00
Deposits may be adjusted, based on the project, as determined by the Community Development Director Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Proposed use within a new structure.

Proposed use within an existing structure.

Any requested services or meetings not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Proposed Cannabis use within a new structure.

Proposed Cannabis use within an existing structure.

Amendments to General Plan, Municipal Code or Local Coastal Program Environmental Review (Does not include California Department of Fish and Wildlife Fees)
Negative Declaration (In House)
12 Fee Description & Unit/Time Effective 7/1/25
Penalties
Administrative Citations for Infraction
First violation $ 100.00
Second occurrence of the same violation within a 12 month period $ 200.00 Third occurrence of the same violation within a 12 month period $ 500.00 Administrative Citations for - Short-Term Rentals
First violation $ 500.00
Second violation within a 24 month period $ 750.00
Third violation within a 24 month period $ 1,000.00
Fines - Misdemeanors
Infractions
First violation $ 100.00
Second occurrence of the same violation within a 12 month period $ 200.00 Third occurrence of the same violation within a 12 month period $ 500.00 Misdemeanors for Short-Term Rentals
First violation for conviction of an offense $ 500.00
Second conviction within a 24 month period $ 750.00
Third conviction within a 24 month period $ 1,000.00
Misdemeanors - All others Up to $ 1,000.00

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

PENALTIES & FINES
Effective: 7/1/25 13
BUILDING DIVISION Effective 7/1/25
A.

Activity Description Fee Charge Basis Note
1 HVAC - per unit
a) Change-out (same location) $ 93 per permit [a]
b) New $ 201 per permit [a]
2 Electric Car Charging $ 161 per permit [a]
3 Graywater System
a) No Plan Check Required $ 93 per permit [a]
b) Plan Check Required $ 201 per permit [a]
4 Insulation/Energy Upgrade $ 93 per permit [a]
5 Residential Solar Photovoltaic System - Solar Permit
a) 15kW or less $ 201 per permit [a]
b) Above 15kW - per kW $ 15 per permit
6 Commercial Solar Photovoltaic System - Solar Permit
a) 50kW or less $ 1,000 per permit
c) 50kW - 250kW - per kW above 50kW $ 7 per permit
e) Above 250kW - per kW above 250kW $ 5 per permit
7 Commercial Solar Photovoltaic System - Thermal Permit a) 30kW or less $ 1,000 per permit
c) 31kW - 260kW - per kW above 30kW $ 7 per permit
e) Above 260kW - per kW above 260kW $ 5 per permit
8 Service Panel Upgrade $ 89 per permit
9 Water Heater Change-out (same location) $ 62 per permit [a] 10 Water Heater Change-out (new location) $ 93 per permit 11 Line Repair - Sewer / Water / Gas $ 89 per permit
12 Line Repair / Repipe $ 132 per permit
13 Re-Roof
a) Up to 2,000 SF (roof area) $ 177 per permit
b) Each Add'l 1,000 SF or fraction thereof $ 89 per permit

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT
Fees for Commonly Requested Building Permit Types. Fees shown in this section (Section A.) include all applicable inspection, and plan review fees. Additional fees apply for permit processing and services provided by other City Departments (e.g. Planning Review), Technology Enhancement Fees, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees are shown in Sections F and G.

Effective: 7/1/25
14 A. Fees for Commonly Requested Building Permit Types (continued) Activity Description Fee Charge Basis Note
14 Demolition (per structure) $ 89
15 Temporary Power Pole $ 80 per permit [b]
16 Swimming Pool/Spa
a) Swimming Pool/Spa $ 993 per permit
b) Detached Spa/Water Feature $ 287 per permit
c) Gunite Alteration $ 353 per permit
d) Equipment Change-out Only (e.g. pump) $ 306 per permit 17 Patio Cover
a) Patio without M, E, P
i) up to 200 SF $ 244 per permit
ii) Greater than 200 SF $ 342 per permit
b) Patio Cover with M, E, P
i) up to 200 SF $ 486 per permit
ii) Greater than 200 SF $ 534 per permit
18 Window / Sliding Glass Door (New or Alteration)
a) Up to 5 $ 299 per permit [c]
b) Each additional $ 72 per permit [c]
19 Signs
a) Wall Sign $ 120 per permit
b) Wall Sign Illuminated $ 210 per permit
c) Monument Sign (per sign) $ 238 per permit
d) Monument Sign Illuminated (per sign) $ 300 per permit 20 Storage Racks
a) First 100 LF $ 398 per permit
b) Each additional 100 LF $ 19 per permit
[a] Fees have been reduced by 30% for single family residential to encourage energy savings improvements. [b] Fee applies if temporary power pole permit is requested separate from main building permit. [c] Permits required for new or alteration of windows and sliding glass doors. No permit required for retrofit windows and sliding glass doors.

Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
15 B.

Residential New Construction and Room Additions
Occupancy Classification Threshold
SqFt
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof
Note
1 100 $ 661 $ - $ 1,238 $ - $ 1,899 $ -
200 $ 661 $ - $ 1,415 $ - $ 2,076 $ -
300 $ 661 $ - $ 1,503 $ - $ 2,164 $ -
400 $ 772 $ - $ 1,592 $ - $ 2,364 $ -
500 $ 882 $ 38 $ 1,681 $ 77 $ 2,563 $ 115
1,000 $ 1,102 $ 38 $ 2,122 $ 62 $ 3,224 $ 100
1,500 $ 1,323 $ 77 $ 2,475 $ 62 $ 3,798 $ 139
2,000 $ 1,763 $ 77 $ 2,829 $ 123 $ 4,592 $ 200
2,500 $ 2,205 $ 77 $ 3,537 $ 123 $ 5,742 $ 200
3,000 $ 2,646 $ 38 $ 4,245 $ 62 $ 6,891 $ 100
4,000 $ 3,087 $ 29 $ 4,952 $ 46 $ 8,039 $ 75
2 Electrical Plan Review and
Permitting, if Required
3 Mechanical Plan Review and
Permitting, if Required
4 Plumbing Plan Review and
Permitting, if Required
5 Production Phase Units /
Identical Buildings / Duplicate
Stock
[a]
[a] For identical buildings built by the same builder on the same lot or in the same tract and for which building permits are issued at the same time. * Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees. Fees shown in this section include permit inspection and plan review fees for new construction, improvements and alterations. Additional fees apply for permit processing, and services provided by other City Departments (e.g. Planning Review), Technology Enhancement Fees, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees are shown in Section F and Section G.

R3 - Single-Family, Duplex,
Additional Dwelling Units
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
10% of Base Plan
Review Fee for Master
Unit
100% of Base Permit
Inspection Fee
10% of Plan Review;
100% of Base Permit
Inspection Fee
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
16 B.

Residential Remodels with Structural Improvements
Occupancy Classification Threshold
SqFt
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof
Note
1 100 $ 441 $0 $ 796 $0 $1,237 $0
200 $ 496 $0 $ 1,018 $0 $1,514 $0
300 $ 552 $0 $ 1,194 $0 $1,746 $0
400 $ 606 $0 $ 1,326 $0 $1,932 $0
500 $ 716 $19 $ 1,460 $54 $2,176 $73
1,000 $ 827 $29 $ 1,768 $15 $2,595 $44
1,500 $ 992 $58 $ 1,856 $46 $2,848 $104
2,000 $ 1,323 $58 $ 2,122 $92 $3,445 $150
2,500 $ 1,654 $58 $ 2,653 $92 $4,307 $150
3,000 $ 1,984 $29 $ 3,183 $46 $5,167 $75
4,000 $ 2,315 $22 $ 3,715 $35 $6,030 $57
2 Electrical Plan Review and
Permitting, if Required
3 Mechanical Plan Review and
Permitting, if Required
4 Plumbing Plan Review and
Permitting, if Required
5 Production Phase Units /
Identical Buildings / Duplicate
Stock
[a]
[a] For identical buildings built by the same builder on the same lot or in the same tract and for which building permits are issued at the same time. * Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees (continued) R3 - Single-Family, Duplex,
Additional Dwelling Units
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
10% of Base Plan
Review Fee for Master
Unit
100% of Base Permit
Inspection Fee
10% of Plan Review;
100% of Base Permit
Inspection Fee
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
17 B.

Garage/Room Conversions and Residential Remodels without Structural Improvements Occupancy Classification Threshold
SqFt
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof
Note
1 100 $220 $0 $353 $0 $573 $0
200 $331 $0 $619 $0 $950 $0
300 $386 $0 $884 $0 $1,270 $0
400 $441 $0 $1,061 $0 $1,502 $0
500 $496 $10 $1,238 $31 $1,734 $41
1,000 $552 $7 $1,415 $23 $1,967 $30
2 Electrical Plan Review and
Permitting, if Required
3 Mechanical Plan Review and
Permitting, if Required
4 Plumbing Plan Review and
Permitting, if Required
* Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees (continued) R3 - Single-Family, Duplex,
Additional Dwelling Units
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
18 C.

Commercial / Non-Residential - New Construction, Tenant Improvement, and Shell Occupancy Classification Threshold
SqFt
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof
Note
1 500 $2,646 34.13 $3,126 75.29 5,772 109.42
1,000 $3,087 21.33 $3,537 61.60 6,624 82.93
5,000 $4,410 15.36 $7,074 49.28 11,484 64.64
10,000 $5,292 7.68 $9,904 24.64 15,196 32.32
20,000 $6,173 5.76 $12,733 18.48 18,906 24.24
2 500 $1,323 172.80 $2,388 46.20 3,711 219.00
1,000 $2,315 21.60 $2,653 57.75 4,968 79.35
5,000 $3,307 11.52 $5,305 36.96 8,612 48.48
10,000 $3,969 5.76 $7,427 18.48 11,396 24.24
20,000 $4,630 4.32 $9,550 13.86 14,180 18.18
3 500 $1,763 8.53 $3,537 13.69 5,300 22.22
1,000 $1,984 6.40 $3,890 10.27 5,874 16.67
5,000 $2,205 7.68 $4,245 12.32 6,450 20.00
10,000 $2,646 3.84 $4,952 12.32 7,598 16.16
20,000 $3,087 2.88 $6,366 9.24 9,453 12.12
4 Electrical Plan Review and
Permitting, if Required
5 Mechanical Plan Review and
Permitting, if Required
6 Plumbing Plan Review and
Permitting, if Required
7 Production Phase Units /
Identical Buildings / Duplicate
Stock
[a]
[a] For identical buildings built by the same builder on the same lot or in the same tract and for which building permits are issued at the same time. * Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees. Fees shown in this section include permit inspection and plan review fees for new construction, improvements and alterations. Additional fees apply for permit processing, and services provided by other City Departments (e.g. Planning Review), Technology Enhancement Fees, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees are shown in Section F and Section G.

New Construction / Addition
A, B, E, F, H, I, M, R4, S
(Assembly; Business;
Care/Assisted Living;
Educational; Factory; Hazard;
Institutional; Mercantile;
Storage)
Tenant Improvement
A, B, E, F, H, I, M, R1, R2, R4, S
(Assembly; Business;
Care/Assisted Living;
Educational; Factory; Hazard;
Institutional; Mercantile;
Storage)
Shell
A, B, E, F, H, I, M, R4, S -
Assembly; Business;
Care/Assisted Living;
Educational; Factory; Hazard;
Institutional; Mercantile; Storage
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
10% of Base Plan
Review Fee for Master
Unit
100% of Base Permit
Inspection Fee
10% of Plan Review;
100% of Base Permit
Inspection Fee
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
19 D.

New Construction - R1 and R2 Occupancies
Occupancy Classification # of Units
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof Note
1 1 - 10 $2,646 $512 $8,489 $1,164 $11,135 $1,676
11 - 25 $7,938 $576 $20,514 $1,276 $28,452 $1,852
26 - 50 $20,642 $304 $41,029 $744 $61,671 $1,048
51+ Units
(each add'l
unit)
$25,576
$228
$61,543
$558 $87,119 $786
2 Electrical Plan Review and
Permitting, if Required
3 Mechanical Plan Review and
Permitting, if Required
4 Plumbing Plan Review and
Permitting, if Required
5 Production Phase Units /
Identical Buildings / Duplicate
Stock
[a]
6 Tenant Improvement or Shell
[a] For identical buildings built by the same builder on the same lot or in the same tract and for which building permits are issued at the same time. * Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees. Fees shown in this section include permit inspection and plan review fees for new construction, improvements and alterations. Additional fees apply for permit processing, and services provided by other City Departments (e.g. Planning Review), Technology Enhancement Fees, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees are shown in Section F and Section G.

New Construction / Addition
R1, R2 (Hotel; Motel; Apartment;
Other)
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
10% of Base Plan
Review Fee for Master
Unit
100% of Base Permit
Inspection Fee
10% of Plan Review;
100% of Base Permit
Inspection Fee
See Commercial / NonResidential FeesSee Commercial / NonResidential FeesSee Commercial / NonResidential Fees Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
20 E.

Garage / Carport / Patio / Deck / Utility / Balcony
Occupancy Classification
Threshold
SqFt
Plan
Review
Base Fee
Add'l 100 SF
or Fraction
Thereof
Permit
Inspection
Base Fee
Add'l 100 SF
or Fraction
Thereof
Total
Base Fee
Add'l 100 SF
or Fraction
Thereof Note
1 100 $220 $0 $265 $0 $485 $0
200 $276 $0 $310 $0 $586 $0
300 $331 $0 $353 $0 $684 $0
400 $386 $0 $442 $0 $828 $0
500 $441 $10 $530 $77 $971 $87
1,000 $496 $2 $973 $19 $1,469 $21
2 Electrical Plan Review and
Permitting, if Required
3 Mechanical Plan Review and
Permitting, if Required
4 Plumbing Plan Review and
Permitting, if Required
* Plan review fees include up to three plan checks. The City will bill hourly for additional plan review required. ** Amounts exclude City of Grover Beach standard permitting fees and State of California fees.

Building New Construction, Improvement and Alteration Fees. Fees shown in this section include permit inspection and plan review fees for new construction, improvements and alterations. Additional fees apply for permit processing, and services provided by other City Departments (e.g. Planning Review), Technology Enhancement Fees, and Fees Collected on Behalf of Other Agencies (e.g. State of California). Additional fees are shown in Section F and Section G.

Balcony / Carport / Patio / Deck /
Garage / Utility
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
11% of Base Plan
Review Fee
11% of Base Permit
Inspection Fee
11% of Plan Review and
Permit Inspection Fee
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs, in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
21 F.

Activity Description Fee Note
1 Permit Processing Fee $89
2 General Plan Maintenance Fee (percent of permit fee) 5% [a] 2 Technology Fee / Records Retention Fee (percent of permit fee) 5% 4 Strong Motion Instumentation (SMI) Fee [a]
a) Residential $0.50 or valuation x 0.00013
b) Commercial $0.50 or valuation x 0.00028
5 Building Standards (SB 1473) Fee (valuation) [a]
a) $1 - $25,000 $1
b) $25,001 - $50,000 $2
c) $50,001 - $75,000 $3
d) $75,001 - $100,000 $4
e) Each Add'l $25,000 or fraction thereof $1 additional 6 Temporary Certificate of Occupancy $265
Copies, Re-Print, Change of Contractor
7 Email Scanned / Archived Drawings $11
8 Job Card / Permit Re-Print $43
Violation Fees
9 Work Done without Permits 2x permit fee
Other Fees
10 Partial Inspection / Extra Inspection Fee (per inspection) $89 11 Re-Inspection Fee (3rd Time or More) (each) $89 [b]
12 Missed Inspection Fee $89
13 Fees for Services Not Listed in this Fee Schedule (per 1/2 hour) $89 14 Address Change or New Address Notification $72
[a] Fee only applies to permits for new construction and additions, including signs and swimming pools. [b] Re-inspection fee applies after second re-re-inspection.

Other Fees
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Effective: 7/1/25
22 G.

Activity Description Fee Note
1 Public Works Building Plan Review
a) No Public Works Permit Issued $94
b) Minor Projects (1-3 lots or units) $374
c) Major Projects (4 or more lots or units) $561
d) Deposit Cases $1,000 Deposit
2 Planning Building Plan Review
a) Alterations $56
b) Additions - Residential $165
c) New Residential Unit / Detached ADU $331
i) Each Additional Unit $111
ii) ADU Stock Plan $56
d) Commercial / Industrial $1,000 Deposit
e) Signs
i) Sign Permit (First Sign) $81
Each Additional Sign $42
ii) Sign Registration for Temporary Signs (i.e. A-frame, banners) $0 3 Plan Review Fees
a) Alternate Materials and Materials Review (per hour) $220 b) Excess Plan Review Fee (4th and subsequent) (per hour) $220 4 Fire Supression Systems Review Consultant Cost
Note: Each fee listed in this schedule is based on the typical estimated time required to perform a standard service request. For service requests that are anticipated to require time and materials costs in excess of those typically required, the Department reserves the right to bill, in advance, for Department costs anticipated to be incurred in excess of the fee shown in this schedule. The Building Official may adjust the plan checking/permit fee for an individual project when costs to the City are not congruent with this fee schedule. Fee amounts shall be set at an amount that allows the City to recover its costs of applicant plan check, permit and inspection activities.

Building Plan Review Fees - for Services Not Identified Elsewhere In This Schedule When applicable, plan review fees shall be paid at the time of application for a building permit.

The plan review fee is in addition to the buidling permit fee.

Effective: 7/1/25
23 Fee Description & Unit/Time
Administrative Development Impact Fee Effective: October 25, 2024 July 1, 2025 Land Use Category
Residential (per Square Foot) $ 0.690 $ 1.29
Commercial (per Square Foot) $ 0.460 $ 0.62
Office (per Square Foot) $ 0.550 $ 0.96
Industrial (per Square Foot) $ 0.220 $ 0.34
Restaurant (per Square Foot) $ 0.460 $ 0.62
Commercial Lodging (per Room) $ 142.000 $ 164.00
Fire Protection Development Impact Fee
Land Use Category
Residential (per Square Foot) $ 0.230 $ 0.30
Commercial (per Square Foot) $ 0.090 $ 0.14
Office (per Square Foot) $ 0.130 $ 0.22
Industrial (per Square Foot) $ 0.060 $ 0.08
Restaurant (per Square Foot) $ 0.090 $ 0.14
Commercial Lodging (per Room) $ 25.000 $ 38.00
Law Enforcement Development Impact Fee
Land Use Category
Residential (per Square Foot) $ 0.710 $ 1.35
Commercial (per Square Foot) $ 0.490 $ 0.65
Office (per Square Foot) $ 0.530 $ 1.01
Industrial (per Square Foot) $ 0.200 $ 0.36
Restaurant (per Square Foot) $ 0.490 $ 0.65
Commercial Lodging (per Room) $ 151.000 $ 172.00
Park Improvement Development Impact Fee
Land Use Category
Residential (per Square Foot) $ 1.950 $ 1.80
Quimby Act Fee In Lieu of Dedication (Subdivisions)
Land Use Category
Residential (per Square Foot) $ 2.700 $ 3.63
Park Land Acquisition Development Impact Fee (Infill)
Land Use Category
Residential (per Square Foot) $ 0.870 $ 1.74
Recreation Facility Development Impact Fee
Land Use Category
Residential (per Square Foot) $ 0.640 $ 0.91
Water Infrastructure Reimbursement Fee
Front Footage Charge (per lineal foot) for Water Line 85.00 at building permit issuance
Water Development Impact Fee Effective: October 25, 2024 July 1, 2025 Land Use Category
Residential (per Square Foot) $ 2.38 $ 2.90
Commercial (per Square Foot) $ 1.50 $ 1.83
Office (per Square Foot) $ 1.50 $ 1.83
Industrial (per Square Foot) $ 1.50 $ 1.83
Restaurant (per Square Foot) $ 9.60 $ 11.76
Commercial Lodging (per Room) $ 1,494.00 $ 1,830.00
Wastewater Development Impact Fee
Land Use Category
Residential (per Square Foot) $ 1.78 $ 1.84
Commercial (per Square Foot) $ 1.40 $ 1.42
Office (per Square Foot) $ 1.40 $ 1.42
Industrial (per Square Foot) $ 1.48 $ 1.51
Restaurant (per Square Foot) $ 9.06 $ 9.24
Commercial Lodging (per Room) $ 1,396.00 $ 1,424.00

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT

DEVELOPMENT IMPACT FEES
NOTE: Projects approved after October 25, 2024 are subject to the below Impact Fees. 24 Fee Description & Unit/Time

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT

DEVELOPMENT IMPACT FEES
NOTE: Projects approved after October 25, 2024 are subject to the below Impact Fees.

Single-Family Dwelling Unit $ 2,475.00
Apartment complex (Bachelor, one or two bedrooms, per unit) $ 1,856.00 Apartment complex (Three or more bedrooms, per unit) $ 2,475.00 Motel or Hotel (per individual room), plus: $ 1,237.00
For each residential facility for the motel or hotel $ 2,475.00 Condominiums and similar land uses $ 2,475.00
Hybrid Fee $ 1,856.00
Mobile Home Parks (per unit), plus: $ 2,475.00
For each washroom and restroom $ 2,475.00
Travel Trailer or Recreation Vehicle Park (per space), plus: $ 1,237.00 For each residential unit at the park $ 2,475.00
For each washroom and restroom $ 2,475.00
5/8 inch meter $ 2,475.00
3/4 inch meter $ 3,712.00
1 inch meter $ 6,187.00
1 1/2 inch meter $ 13,612.00
2 inch meter $ 24,131.00
3 inch meter $ 54,450.00
South San Luis Obispo County Sanitation District Wastewater Charge (Collected by City and paid to District as collected) The fees listed below can be administratively changed by staff upon notification from South San Luis Obispo County Sanitation District and do not require the City Council approval.

Commercial establishments, schools, manufacturing, industrial or any similar use - charge to be based on the capacity of the water meters, the square or the water meter size and the ratio of the water meter.

Greater than 3" sized meters to be determined on the ratio of the size of meter (ORD. 91-9) as calculated by South San Luis Obispo County Sanitation District.

Pass Thru Development Impact Fees
25 Fee Description & Unit/Time
Administrative Development Impact Fee
Fee/Unit of Service (Per Person) $ 50.13
Single Family Residence (each) 2.56 DU $ 128.33
Multi Family Residence (each) 2.11 DU $ 105.77
Mobile Home (each) 1.40 DU $ 70.18
Commercial (1,000 SF) 6.00 per 1,000 sf $ 300.78
Office (1,000 SF) 2.94 per 1,000 sf $ 147.38
Industrial (1,000 SF) 2.02 per 1,000 sf $ 101.26
Fire Protection Development Impact Fee
Fee/Unit of Service (Net Acres/Unit) $ 1,379.91
Single Family Residence (each) 0.167 Net Acre/Unit $ 230.44 Multi Family Residence (each) 0.083 Net Acre/Unit $ 114.53 Mobile Home (each) 0.1 Net Acre/Unit $ 137.99
Commercial (1,000 SF) 0.023 per 1,000 sf $ 31.74
Office (1,000 SF) 0.023 per 1,000 sf $ 31.74
Industrial (1,000 SF) 0.023 per 1,000 sf $ 31.74
Other 0.023 per 1,000 sf (a) $ 31.74
Law Enforcement Development Impact Fee
Fee/Unit of Service (Per Person) $ 40.41
Single Family Residence (each) 2.56 DU $ 103.45
Multi Family Residence (each) 3.17 DU $ 128.10
Mobile Home (each) 2.10 DU $ 84.86
Commercial (1,000 SF) 8.00 per 1,000 sf $ 323.28
Office (1,000 SF) 1.47 per 1,000 sf $ 59.40
Industrial (1,000 SF) 1.01 per 1,000 sf $ 40.81
Park Improvement Development Impact Fee
Fee/Unit of Service
Single Family Residential Per Unit $ 3,272.82
Multi-Family Residential Per Unit $ 2,697.51
Mobile Home Residential Per Unit $ 1,789.81
Park Land Dedication "In-Lieu" Development Impact Fee (New Lot or New Unit) $ 2,751.00 Recreation Facility Development Impact Fee
Land Use Type
Single Family Residential Per Unit $ 585.10
Multi-Family Residential Per Unit $ 482.25
Mobile Home Residential Per Unit $ 319.98
Storm Water Development Impact Fee
per square foot of impervious surface $ 0.27
Transportation Development Impact Fee
Fee/Unit of Service (Peak Hour Trip) $ 1,570.72
Single Family Residence (each) 1.01 DU $ 1,586.43
Multi Family Residence (each) 0.62 DU $ 973.85
Mobile Home (each) 0.59 DU $ 926.72
Commercial (1,000 SF) 3.75 per 1,000 sf $ 5,890.20
Office (1,000 SF) 1.49 per 1,000 sf $ 2,340.37
Industrial (1,000 SF) 0.98 per 1,000 sf $ 1,539.31
Hotel/Motel
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

COMMUNITY DEVELOPMENT DEPARTMENT

DEVELOPMENT IMPACT FEES
Note: Projects approved prior to October 25, 2024 are subject to the below impact fees. 26 Water Infrastructure Reimbursement Fee
Front Footage Charge (per lineal foot) for Water Line 85.00 at building permit issuance
Water Development Impact Fee
5/8 inch meter 1.00 Capacity Factor $ 1,158.42
3/4 inch meter 1.50 Capacity Factor $ 1,737.64
1 inch meter 2.50 Capacity Factor $ 2,896.06
1 1/2 inch meter 5.00 Capacity Factor $ 5,792.11
2 inch meter 8.00 Capacity Factor $ 9,267.38
3 inch meter 15.00 Capacity Factor $ 17,376.34
4 inch meter 25.00 Capacity Factor $ 28,960.57
6 inch meter 50.00 Capacity Factor $ 57,921.13
8 inch meter 80.00 Capacity Factor $ 92,673.81
10 inch meter 120.00 Capacity Factor $ 139,010.72
12 inch meter 160.00 Capacity Factor $ 185,347.63
Wastewater Development Impact Fee
5/8 inch meter 1.00 Capacity Factor $ 1,072.90
3/4 inch meter 1.50 Capacity Factor $ 1,609.88
1 inch meter 2.50 Capacity Factor $ 2,682.77
1 1/2 inch meter 5.00 Capacity Factor $ 5,364.48
2 inch meter 8.00 Capacity Factor $ 8,583.15
3 inch meter 15.00 Capacity Factor $ 16,093.42
4 inch meter 25.00 Capacity Factor $ 26,822.36
6 inch meter 50.00 Capacity Factor $ 53,644.71
8 inch meter 80.00 Capacity Factor $ 85,831.54
10 inch meter 120.00 Capacity Factor $ 128,747.31
12 inch meter 160.00 Capacity Factor $ 171,663.08
Single-Family Dwelling Unit $ 2,475.00
Apartment complex (Bachelor, one or two bedrooms, per unit) $ 1,856.00 Apartment complex (Three or more bedrooms, per unit) $ 2,475.00 Motel or Hotel (per individual room), plus: $ 1,237.00
For each residential facility for the motel or hotel $ 2,475.00 Condominiums and similar land uses $ 2,475.00
Hybrid Fee $ 1,856.00
Mobile Home Parks (per unit), plus: $ 2,475.00
For each washroom and restroom $ 2,475.00
Travel Trailer or Recreation Vehicle Park (per space), plus: $ 1,237.00 For each residential unit at the park $ 2,475.00
For each washroom and restroom $ 2,475.00
5/8 inch meter $ 2,475.00
3/4 inch meter $ 3,712.00
1 inch meter $ 6,187.00
1 1/2 inch meter $ 13,612.00
2 inch meter $ 24,131.00
3 inch meter $ 54,450.00
Pass Thru Development Impact Fees
South San Luis Obispo County Sanitation District Wastewater Charge (Collected by City and paid to District as collected) The fees listed below can be administratively changed by staff upon notification from South San Luis Obispo County Sanitation District Commercial establishments, schools, manufacturing, industrial or any similar use - charge to be based on the capacity of the water Greater than 3" sized meters to be determined on the ratio of the size of meter (ORD. 27 Fee Description & Unit/Time Effective 7/1/25
Encroachment Permit
Basic Permit $ 331.00
Fire Flow Test - documentation only / existing hydrant $ 103.00 Fire Flow Test - test and documentation / new hydrant or development Actual Cost Moving of Buildings and Vehicle Loads
Oversize Vehicle Loads Permit Fee - Per Trip/Per Direction $ 20.00 (Per California Code of Regulations Title 21, Section 1411.3 Annual Permit (Per CCR Title 21, Section 1411.3 & GBMC 8205) $ 113.00 (Per California Code of Regulations Title 21, Section 1411.3 + Deposit of Surety Bond in amount of $2,000,000
$ 1,694.00
Current Cal Trans
Equipment Rates + 30%
Overhead
Current Cal Trans
Equipment Rates + 30%
Overhead
Current Cal Trans
Equipment Rates + 30%
Overhead
Rate calculated using
current fully burdened
Salary and benefits

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

PUBLIC WORKS AND UTILITIES
Large Projects - Please see Encroachment Permit Deposit for Large Projects
Moving of Building (Based on the complexity of the move, a deposit may be required to cover additional time necessary to process request, as determined by the Public Works Director)
Cost Recovery Rates
Vehicles
Equipment
Material
Labor
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Effective: 7/1/25
28 Fee Description & Unit/Time Effective 7/1/25

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

PUBLIC WORKS AND UTILITIES
$200 minimum or
estimated actual cost as
determined by the
Department Director
Encroachment Permit Deposit for Large Projects $ 2,000.00 (Will be billed for Actual Costs)
Public Improvements Single Lot/Subdivision Improvement Plans Plan Check Deposit for Improvement Plans (GBMC 9210.4)
Subdivision $ 1,000.00
Single Lot $ 500.00
Inspection of Improvement Work Deposit (GBMC 9210.6)
Subdivision or Single Lot 5% of Engineer's
estimate of subdivision
improvements
Improvement Security Required (GBMC 9210.14) 100% of Imp. Est.

Labor and Materials Surety (GBMC 9210.16) 50% of Imp. Est.

Subdivision Regulation Exception Fee See Variance Fee
Water Meter Charges (GBMC 7600)
Deposit will be
determined by Public
Works based on the size
of the meter. Minimum
Deposit $750
Radios Actual Cost
3/4" meter Actual Cost
1" meter Actual Cost
2" meter Actual Cost
3" meter Actual Cost
4" meter Actual Cost
6" meter Actual Cost
Overhead % (Applies to all "Actual Cost" items)
% of invoice for invoice processing 30%
% of labor costs for general overhead 30%
The following amounts are DEPOSITS and reflect the minimum estimated costs for processing the "typical" building permit application. The Public Works Development Department may increase or decrease the deposit amount depending on the complexity of the project. If at any time during the development review process deposits are insufficient to cover the cost of processing the application, the City shall cease processing until additional funds are submitted.

Deposit for Field Work Inspection (in addition to Basic Encroachment Permit)
The following are deposits for radio and meter installations. Actual costs will be deducted from the deposit for the cost of the meters and associated labor. If actual cost is greater than deposit then customer will be billed for additional charges.

Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

The following amounts listed are DEPOSITS
Effective: 7/1/25
29 Fee Description & Unit/Time Effective 7/1/25
Adult Business Permit (Ord. 04-02) $ 790.00
Alarm Fees
Registration Permit (Annual) $ 25.00
Appeal Fee $ 25.00
Registration Permit Late Fee $ 25.00
Alarm Violation Late Payment Fee $ 25.00
Alarm Permit Reinstatement Fee $ 50.00
Burlgar False Alarm Fee
Registered Alarms
First Violation $ 50.00
Second Violation $ 75.00
Third Violation $ 100.00
Fourth Violation $ 200.00
Non-Registered Alarms
First Violation $ 150.00
Second Violation $ 175.00
Third Violation $ 200.00
Fourth Violation $ 300.00
Robbery False Alarm Fee
First Violation $ 100.00
Second Violation $ 200.00
Third and Subsequent Violations $ 300.00
Panic Button False Alarms
First Violation $ 100.00
Second Violation $ 200.00
Third and Subsequent Violations $ 300.00
Operation of Suspended Alarm System
First Violation $ 200.00
Second and Subsequent Violations $ 300.00
Alarm Company Violations
Failure to Report New Installation $ 50.00
False Alarm Caused by Company $ 50.00
Reporting an Alarm for a Suspended Alarm System
First Violation $ 100.00
Second and Subsequent Violations $ 200.00
Failure to Use Enhanced Call Confirmation Procedures $ 100.00 Alarm System Reinstatement Fee $ 200.00
Per Customer Contacted $ 10.00
Late Fee for All Charges $ 25.00
Alarm Permit Fee (Annual) $ 25.00
Arrest Booking Fees
City $ 164.00
Police Department

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Effective: 7/1/25
30 Fee Description & Unit/Time Effective 7/1/25
Police Department

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Card Club Security Plan
New Security Plan and annual review of Security Plan $ 353.00 (Ord. No. 04-05)
Citation Sign Off $ 32.00
Card Room Fee (per table) $ 561.00
License Application As Set by Penal Code
Renewal As Set by Penal Code
Amendment As Set by Penal Code
Copy cost (per page)
8 1/2" x 11" or 8 1/2" x 14" $ 0.25
11" x 17" $ 0.26
DUI Cost Recovery $ 317.00
Livescan + DOJ Fee $ 21.00
Department of Justice (DOJ) Fee As set by the Department of Justice. Currently $75.00-
$91.00
Massage Establishment Permit Application Fee $ 400.00
(GBMC Section 3903)
Massage Establishment Renewal Permit Fee $ 65.00
Massage Technician Permit Application Fee
Off-Site Massage Permit
Parking Fines
Late Fee - All fines that are $53 $ 24.00
Late Fee - All fines that are $148 $ 52.00
Late Fee - All fines that are $371 (disabled parking) $ 85.00 Photographs
Digital Photos $ 26.00
Digital Videos $ 31.00
Reports - Investigation
Crime See Copy Costs
Traffic Accident, Full Investigation See Copy Costs
$ 1.15
Archival Search (2 or more years) See Copy Costs
$ 15.00
Secondhand Dealer & License Permit & Renewal
Permit $ 300.00
Renewal $ 156.00
+ DOJ and City Livescan fee
Massage Permits: Massage Technician and Massage Establishment Repossession Fees (Set by Statute, California Vehicle Code Section 26751) Any requested services not covered by Master Fee Schedule will be charged actual costs Subpoena Fee Deposit (Per Day) - (Set by Statute, Government Code 68093-68097.2) TC and PDO Insurance, public (Set by Statute, California Vehicle Code Section 20012) Concealed Weapons (Maximum Fees set by Penal Code)
Effective: 7/1/25
31 Fee Description & Unit/Time Effective 7/1/25
Police Department

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Taxicab Driver Permit (GBMC Section 3405)
Application Fee and Identification Card Fee $ 431.00
$ 125.00
Taxi Public Hearing Fee $ 249.00
Tobacco Ordinance License Annual Fee $ 378.00
County Health Officer Fee (paid to County directly)
Change of Location Fee (GBMC Section 2908) $ 199.00
+ Business Tax Certificate and Fire Inspection Fees
Vehicle Release $ 148.00
Any requested services not covered by Master Fee Schedule will be charged actual costs Annual Renewal Application Fee (GBMC Section 3405 (E))
+ Department of Justice Fees
Effective: 7/1/25
32 Fee Description & Unit/Time Effective 7/1/25
Cannabis Regulatory Fee
Annual Regulatory Fee per License
Retail Storefront $15,000.00
Manufacturing $15,000.00
Cultivation $15,000.00
Distribution $10,000.00
Testing Lab $10,000.00
NOTE: IF MORE THAN ONE LICENSE PER BUSINESS, THEN ONLY THE THE HIGHEST REGULATORY WILL BE CHARGED.

Annul Audit Fee per Business
Annual Audit Fee per Cannabis Business $10,000.00
Cannabis Background Fee (does not include livescan fee) Owner $ 758.00
Employee $ 439.00
Cannabis Background Renewal Fee
Owner $ 283.00
Employee $ 205.00
Commercial Cannabis Deposit (New or Renewal) $ 500.00
(This is a deposit consistent with the Comm Dev Commercial Cannabis Permit) Commercial Cannabis Replacement Identification Card $ 28.00

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

Effective: 7/1/25
33 Fee Description & Unit/Time Effective 7/1/25
County Booking Fee Actual Cost as Charged by the
County of San Luis Obispo
Department of Justice - Fingerprinting Fees Actual Cost Charged by DOJ Federal Bureau of Investigations - Fingerprinting Fees Actual Costs Charged by FBI Negative Declaration Current fee per Department of
Fish and Game
Mitigated Negative Declaration Current fee per Department of Fish and Game
Environmental Impact Report Current fee per Department of Fish and Game
Certified Regulatory Program Current fee per Department of Fish and Game
County Clerk Processing Fee (in addition to above fees) Current fee per Department of Fish and Game
Residences and Apartments $ 25.48
Hotels Units with Kitchens $ 22.27
Motel Units without Kitchens $ 14.32
Hotel Rooms $ 14.32
Commercial Establishments $ 11.45
Each additional employee above 5 $ 2.31
Beauty Shops $ 22.91
Each additional employee above 6 $ 3.47
Eating Establishments w/o Grinders $ 35.65
Each additional 5 seats above 30 $ 5.35
Restaurants W/Grinders less than 30 seats $ 57.32
Restaurants W/Grinders over 30 seats $ 80.23
Laundromats - per washing machine $ 16.41
minimum charge $ 49.28
Service Station - no wash rack $ 67.49
Service Stations - with wash rack $ 96.82
Factories $ 38.21
Each additional employee above 20 $ 1.92
Churches $ 21.15
Per ADA with elementary school $ 0.64
Per ADA with other school $ 0.93
Bottling Plants $ 45.87
Schools (Non-Boarding) $ 12.70
Per ADA with elementary school $ 0.64
Per ADA with other school $ 0.93
Schools (Boarding) $ 12.74
Per ADA with elementary school $ 1.28
Per ADA with other school $ 1.80
Trailer/Mobile Home Space $ 15.31
RV Dump Stations - Less than 50 services $ 118.45
The fees listed below can be administratively changed by staff upon notification from Department of Fish and Game and do not require the City Council approval.

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Pass Through to Other Agencies
South San Luis Obispo County Sanitation District (Monthly charge collected by City and paid to the District monthly) Department of Fish and Game Environmental Filing Fees - made payable to San Luis Obispo County Clerk
Effective: 7/1/25
34 Fee Description & Unit/Time Effective 7/1/25

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Pass Through to Other Agencies
Tapes
Video Actual Costs per AGP Video +
25% Administrative Fee
Taxicab Rates
Beach Cities Cab Co.

Fare for Pick-up Set by City per request from
Fare per Mile Taxi Cab Company
Waiting Time
Credit Card Surcharge
After-hours Surcharge
234 Taxi
Fare for Pick-up Set by City per request from
Fare per Mile Taxi Cab Company
Waiting Time (per hour)
Credit Card Surcharge
After-hours Surcharge
Effective: 7/1/25
35 Fee Description & Unit/Time
Number of
Cans
Collections
Per Week

COMMERCIAL

GARBAGE
1 1 $ 33.51
2 1 $ 60.94
3 1 $ 76.18
3 2 $ 115.39
4 1 $ 91.43
Re-deliver bin to stopped
account $ 56.88
Size of
Container
(Cubic
Yards)
1 2 3 4 5 6 7
1 $ 118.82 $ 176.68 $ 240.68 $ 304.67 $ 359.48 $ 429.61 $ 524.68

1.5 $ 137.10 $ 216.32 $ 304.67 $ 396.09 $ 484.40 $ 575.81 $ 700.56 2 $ 155.38 $ 255.91 $ 374.71 $ 493.56 $ 603.20 $ 722.05 $ 882.90 3 $ 185.84 $ 356.48 $ 493.56 $ 642.82 $ 764.72 $ 907.90 $ 1,156.23 4 $ 240.68 $ 408.22 $ 584.94 $ 764.72 $ 941.43 $ 1,121.15 $ 1,430.99 6 $ 361.03 $ 612.32 $ 877.41 $ 1,147.09 $ 1,412.18 $ 1,681.75 $ 2,146.51 8 $ 481.38 $ 816.46 $ 1,169.89 $ 1,529.48 $ 1,882.87 $ 2,242.35 $ 2,861.97 one can $ 25.45 Per Month
two can $ 34.38 Per Month
three can $ 43.30 Per Month
four can $ 52.26 Per Month
five can $ 61.18 Per Month
six can $ 70.12 Per Month
96 gallon Waste Wheeler
one 64 + one 96 gallon
two-64 gallon Waste Wheelers
Waste Wheelers
32 gallon
two 96 gallon
Waste Wheelers
Waste Wheeler
64 gallon Waste Wheeler
SINGLE FAMILY AND MULTI-UNIT RESIDENTIAL (4 units or less)

VOLUME BASED RATES INCLUDES

WASTE WHEELERS FOR GREEN WASTE AND GARBAGE

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Waste Connections Service Fees
Effective January 1, 2025

COMMERCIAL DUMPSTER CONTAINER (PER MONTH)

COLLECTIONS PER WEEK
Effective: 7/1/25
36 Fee Description & Unit/Time

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Waste Connections Service Fees
Miscellaneous Items
Overstacked Garbage & extra bags Minimum/Unit $ 7.94 Each Overstacked Green waste & extra bags Minimum/Unit $ 3.98 Each Overstacked Blue Bin & extra bags Minimum/Unit $ 3.99 Each In yard service (per can or commodity) $ 19.83
In addition to standard garbage rates
$ 5.49 Per month
$ 2.25 Per month
Vacant Rate $ 18.50 Per month
Waste wheeler cleaning $ 29.58 Each Time
Trip Charge $ 19.84 Each Time
Non-payment Downsize service $ 19.84 Each Time
Non-payment redeliver waste wheeler $ 47.69 Each Time
Non-payment reconnect service $ 47.69 Each Time
Small item pickup (TV, Toilet) $ 46.53 Each
Appliance pickup-residential $ 65.63 Each
Lock Charge $ 11.05 Per month
City Clean Up $ 17.27 Each
$ 16.74 Per Yard
$ 46.21 Per Yard
$ 6.14 Per month
Re-deliver bin on stopped account $ 56.88 Each Time
Compactors $ 22.56 Per Yard
Sunday Service (In addition to garbage service level) $ 99.30 Per Month Recycle bin rental $ 68.56 Per Month
Stand by Time $ 95.18 Per Hour
Extra bin cleaning $ 88.75
Damage/Destruction of bins or waste wheelers replacement/repair at market price Short Term Dumpsters
Delivery and Pickup Bin $ 56.88
Delivery and Pickup - Waste Wheeler $ 19.83
Rental $ 6.14
Empties $ 46.21
Mattresses
Twin (Per Set) $ 25.82
Double (Per Set) $ 25.82
Queen (Per Set) $ 25.82
King (Per Set) $ 25.82
Any additional recycling services are charged out at 50% of the garbage rate.

Commercial Waste Wheeler Rent
Please recycle, it is less expensive and it helps the community achieve its AB939 goal to reducing buried waste at the landfill.

Late Fees are imposed for residential customers over 30 days delinquent and commercial customers over 30 days delinquent. The fee is 1.5% per month of the outstanding charge, with a minimum fee of $5.00. No prior notice is required, as this late fee policy is stated at the bottom of every bill.

Monthly Charge for additional 32, 64 or 96-gallon recycle waste service
Monthly Charge for additional 32 or 96-gallon green waste service
Garbage extras on your scheduled pickup day
Garbage extras - not on your scheduled pickup day
Effective: 7/1/25
37 Fee Description & Unit/Time Effective 7/1/25
Fire & Life Safety Inspections
Actual Cost
plus Administrative Fee (25%) Actual Cost
Additional Re-inspections Actual Cost
2nd & Subsequent Re-inspection
Residential Home Health Care Facilities (R-2)
$ 46.00
$ 279.00
plus Administrative Fee (25%) $ 70.00
Additional Inspections $ 279.00
Home Child Day Care/Health Care Facilities
$ 46.00
$ 279.00
$ 279.00
plus Administrative Fee (25%) $ 70.00
Additional Inspections $ 279.00
Annual Fire & Life Safety Self-Inspection Program
Initial Request for Self-Inspection $ 279.00
plus Administrative Fee (25%) $ 70.00
Non-Compliance as listed below:

Commercial Low Risk Annual Business Self-Inspection
Non-Compliance Inspection - each occurrence $ 279.00
plus Administrative Fee (25%) $ 70.00
Commercial High Risk Annual Business Self-Inspection
Non-Compliance Inspection - each occurrence $ 279.00
plus Administrative Fee (25%) $ 70.00
Fire Protection Systems - Plan Review
Fire Engineering Plan Check/Review
Fire Engineering Firm - Plan Review Direct Consultant
Cost + 25%
Administrative
Overhead
Fire Protection Systems - Inspections
Fire Engineering Firm - Plan Review Direct Consultant
Cost + 25%
Administrative
Overhead
Any requested services not covered by Master Fee Schedule will be charged actual costs based on time and materials. A deposit may be required by the City.

CITY OF GROVER BEACH

MASTER FEE SCHEDULE

FIRE & SAFETY
New Business Fire Inspection Fee (One inspection Only. If inspection not passed additional fee required)
Pre-Fire Inspection as mandated by CA H&S Code Section 13235 Inspection Charge - (One inspection Only. If inspection not passed additional fee required)
Pre-Fire Inspection as mandated by CA H&S Code Section 13235 Inspection Charge - (One inspection Only. If inspection not passed additional fee required) (6 or less Residents) or Home Day Care (8 or less children)
Inspection Charge (One inspection only. If inspection not passed additional fee required) (7 or more residents) or Home Day care (9 or more children)
All Inspections Types (Residential, Commercial, Mixed-use, Tenant Improvement, Hood, Premature Inspection Request, Fire Alarm Systems) Effective: 7/1/25
38 Fee Description Type of Change Resolution No. Effective Date Original Adoption 5/19/2003
Peg Access Fee Charter Peg Access Fee Resolution 03-73 7/21/2003 Miscellaneous City Fees Changes per Fee Study Resolution 04-39 6/17/2004 & Blue Ribbon Committee
Solid Waste Fees Solid Waste Fee Update Resolution 04-67 9/7/2004 Recreation Fees Parks and Recreation Fees Resolution 04-84 11/15/2004 Annual Update of Fees Update of various fees based Resolution 05-30 4/4/2005 on December 03 to December
04 CPI
Solid Waste Rate Interim Year Solid Waste Resolution 05-32 4/18/2005 Adjustments Rate Adjustments
Various Parks and Increase and Decrease in Resolution 05-44 6/20/2005 Recreation Fees Various Parks and Recreation
Fees
Water Rate Increase Increase Water Rates and Resolution 05-48 6/29/2005 Set a tiered system
Tobacco Ordinance License Fees for Tobacco Resolution 05-72 9/6/2005 License Fees Ordinance
Per Mile Rate Beach Cities Cab Company Resolution 06-10 1/17/2006 Per Mile Rate
Development Impact Update of various Development Resolution 06-11 2/6/2006 Fees Impact Fees
Annual Update of Fees Update of various fees based Resolution 06-38 5/1/2006 on December 04 to December
05 CPI
Development Impact Update of Parks Development Resolution 06-45 6/19/2006 Fees Impact Fees
Card Table Fee Increase Per Table Fee Resolution 06-91 11/6/2006 Sanitation Fees & Update of Fees Resolution 07-10 1/22/2007 Returned Check Fee
Water Rate Increase Update of Water Fees Resolution 07-18 2/21/2007 Annual Update of Fees Update of various fees based Resolution 07-52 5/7/2007 Newly requested, and on Dec 06 CPI. Also new fees
changed fees for CD for CD, Fire, P & R, and changing
Fee system for CD

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Legislative History
Effective: 7/1/25
39 Fee Description Type of Change Resolution No. Effective Date

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Legislative History
Solid Waste Rate Interim Year Solid Waste Resolution 07-94 10/1/2007 Adjustments Rate Adjustments
Taxi Increase Update Taxi Fees Resolution 08-28 4/21/2008 Annual Update of Fees Update of various fees based Resolution 08-36 5/5/2008 Newly requested, and on Dec 07 CPI. Also new fees
changed fees for CD for CD, Fire, ASD, and changing
fee system for CD
Parks and Increase and Decrease in Resolution 08-53 7/7/2008 Recreation Fees Parks and Recreation Fees
Parks and Adjust Parks and Recreation Resolution 09-52 8/17/2009 Recreation Fees Fees
Suspension of Application and Processing
Fee for BTC
Suspension of Application and
Processing Fee for BTC
Resolution 09-92 12/7/2009
Water Rate Adjustments Water Rate Adjustments Resolution 10-45 7/5/2010 Credit Card Convenience Credit Card Convenience Resolution 10-73 12/6/2010 Fees for Utility Billing Fees for Utility Billing
On-line payment service On-line payment service
Water Rate Adjustments Water Rate Adjustments Resolution 12-16 4/1/2012 and Establishment of a and Establishment of a
Storm Water Utility Fee Storm Water Utility Fee
Police Department Any additional fees set by other
agencies will be added to the
amount set by the City for all tickets
issued
Resolution 12-61 9/17/2012
Solid Waste Rate Interim Year Solid Waste Resolution 13-4 2/4/2013 Comprehensive Update Comprehensive Update of all User
Fees
Resolution 13-15 5/6/2013
(With some
exceptions regarding
effective date.)
Annual Update of Fees Based on CPI for Los
Angeles/Riverside County year
ended December 2013 of 1.1% for
most fees
Resolution 14-15 3/17/2014 (With
Some exceptions
regarding effective
date.)
Annual Update of Fees Based on CPI for Los
Angeles/Riverside County year
ended December 2014 of 1.0349%
for most fees
Resolution 14-15 3/16/2015 (With
Some exceptions
regarding effective
date.)
Solid Waste Rate Waste Connections Solid Waste Resolution 15-54 10/15/2015 Annual Update of Fees
Based on CPI for Los
Angeles/Riverside County year
ended December 2015 of 2.198%
for most fees
Resolution 16-38 5/16/2016
Effective: 7/1/25
40 Fee Description Type of Change Resolution No. Effective Date

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Legislative History
Various Adjustments Adjustments as directed by Council Resolution 16-72 9/6/2016 Annual Update of Fees
Based on CPI for Los
Angeles/Riverside County year
ended December 2016 of 1.97% for
most fees Resolution 17-24 5/15/2017
Community Development Department
Commercial Medical Cannabis
Permitting Process Fee Resolution 17-31 6/6/2017
Annual Update of Fees
Based on CPI for Los
Angeles/Riverside County year
ended December 2017 of 2.79% for
most fees + 1.21% additional Resolution 18-29 4/16/2018 Police Department
Commercial Cannabis Background
Investigation Fees decrease Resolution 18-42 5/21/2018
Community Development Amendment of Administrative Resolution 18-98 11/19/2018 Department Citation Penalties
Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2018 of 3.08% for
most fees Resolution 19-19 7/1/2019
Community Development Amendment for Short-Term Resolution 19-47 8/19/2019 Department Rental Permit Fees
Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2019 of 3.065%
for most fees Resolution 20-16 7/1/2020
Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2020 of 1.625%
percentage increase for most fees Resolution 21-09 7/1/2021 Building Division Updated Building Fees Resolution 22-06 5/1/2022 Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2021 of 3.8328%
percentage increase for most fees Resolution 22-11 7/1/2022 Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2022 of 7.446%
percentage increase for most fees Resolution 23- 7/1/2023 Effective: 7/1/25
41 Fee Description Type of Change Resolution No. Effective Date

CITY OF GROVER BEACH

MASTER FEE SCHEDULE
Legislative History
Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2023 of 3.475%
percentage increase for most fees Resolution 24- 7/1/2024 Community Development Department Development impact fee update Resolution 24-47 10/25/2024 Annual Update of Fees
Based on CPI for Los
Angeles/Long Beach/Anaheim year
ended December 2023 of 3.300%
percentage increase for most fees Resolution 25- 7/1/2025 Effective: 7/1/25
42 Agenda Item No. 8

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Matthew Bronson, City Manager
SUBJECT: West Grand Avenue Business Grant Award Recipients

RECOMMENDATION
Adopt a Resolution approving the list of recipients recommended for the West Grand Avenue business grant program and direct staff to disburse funds to recipients by April 30, 2025.

BACKGROUND
On January 27, 2025, the Council established a one-time grant program for businesses in the West Grand Avenue streetscape construction project work zone. Though the project construction is specifically on West Grand Avenue between 4th Street and 8th Street, the project work zone and traffic control measures cover a broader area on West Grand Avenue from Highway 1 to 10th Street. This grant program was established as a result of the Council’s desire to help businesses within this project area who have been experiencing loss of sales during the project construction time through providing direct City financial assistance. Public funding for business support must be strictly limited to circumstances with a clearly defined and specific public purpose to avoid setting broader precedents. The extraordinary nature of this construction project and its prolonged effects on specific businesses created the narrowly defined situation that justified the Council’s approval to provide such assistance.

Program Overview
Pursuant to Council action, the grant program was set up similar to the City’s previous grants implemented during the COVID-19 pandemic and funded through a mix of City and federal funding where the City worked with the South County Chambers of Commerce (Chamber) in coordinating, promoting, and administering this program. The Chamber created an online application form that businesses could complete and submit similar to the online applications used for the previous grants. Any business in the project area including one block proximity from West Grand Avenue was eligible to apply with a recommended priority given to businesses that are public-facing such as restaurants, cafes, and personal care services. The City is reimbursing the Chamber’s administrative costs for this program for up to $5,000.

The maximum grant amount was set at $2,000 and is intended to cover employee costs, rent, utilities, or other operating expenses. The Council originally allocated $40,000 in funding for this grant program though subsequently approved an additional $20,000 at the March 10th meeting for a total of $60,000 to fund more businesses through this program.

Application Process and Recommended Recipients
The grant application period opened on February 14 and remained open through March 7 with an online application available on the Chamber’s website. The application process was promoted Staff Report: West Grand Avenue Business Grant Award Recipients Page 2 April 14, 2025
through both the Chamber’s and City’s social media platforms and websites along with distribution of flyers to businesses in the project area. Applicants were asked to include documented examples of financial hardships which would be the primary criteria for determining grant awards and to provide proof of a valid Business Tax Certificate. A total of 56 applications were received for this program which were reviewed by the City-Chamber review committee. The committee consisted of the following individuals:
• Council Member Jules Tuggle
• Chamber CEO Jeff Chambers
• Chamber Board Member and Business Owner Peggy Hoobery • Grover Beach Resident Heidi Boatman
• Grover Beach Resident Stacy Salame
The two Grover Beach residents were identified and contacted by Mayor Dee in consultation with Council Member Tuggle. City Manager Bronson and Assistant City Manager Eriksson also assisted the committee as City staff to provide information about the scope and construction activity related to the streetscape project:

The committee met on March 17 to review the applications and determine the grant awards. As a result of the deliberation, the committee recommended that 18 applicants each receive $2,000 in grant funding with another 16 applicants recommended to each receive $1,500 in grant funding.

The list of the recommended 34 grant recipients is shown in Attachment 2. The committee prioritized public-facing businesses, particularly with walk-up customers most affected by construction impacts, along with businesses with demonstrated financial hardships related to the City’s construction project in determining its funding recommendations. The committee further differentiated among the 34 recommended recipients by granting $2,000 to businesses perceived by the committee to be most directly affected by actual construction activity (e.g. driveway access, parking limitations, etc.) and $1,500 to businesses perceived to be primarily impacted by reduction in customer traffic to this section of West Grand Avenue.

Pending Council’s approval of the recommended grant recipients, the City will disburse the funding by check to the recipients. The recipients will be required to submit a grant reporting form to the City by June 30 that indicates how the funding was spent.

FISCAL IMPACT
The fiscal impact of this program is estimated to be $65,000 including up to $5,000 in reimbursable administrative costs to the Chamber. The funding for this program was allocated by the Council as a FY 2024-25 mid-year General Fund budget modification.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Adopt a resolution approving the list of recipients recommended for the West Grand Avenue business grant program and direct staff to disburse funds to recipients by April 30, 2025; or

2. Do not approve the list of recipients recommended for the grant program; or

3. Provide alternative direction to staff.

Staff Report: West Grand Avenue Business Grant Award Recipients Page 3 April 14, 2025

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act. All applicants have been notified about the committee’s recommendation.

Attachments

1. Resolution; Exhibit A - Recommended Grant Recipients RESOLUTION NO. 25-

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GROVER BEACH,

CALIFORNIA, APPROVING RECIPIENTS FOR A ONE-TIME BUSINESS

ASSISTANCE GRANT PROGRAM FOR BUSINESSES IMPACTED BY THE

WEST GRAND AVENUE STREETSCAPE PROJECT
WHEREAS, the City of Grover Beach (“City”) is undertaking the West Grand Avenue Streetscape Project from 9th Street to Highway 1, representing the most extensive single-street improvement project in the City’s history; and
WHEREAS, this extraordinary infrastructure project has involved complex utility work, including both planned storm drain installation and emergency responses to multiple water main breaks, along with substantial paving requirements to accommodate daily traffic volumes of 15,000-20,000 vehicles; and
WHEREAS, the unprecedented scope and duration of this project has resulted in unique and substantial impacts to businesses located within and adjacent to the project area through restricted access, disrupted operations, and decreased customer traffic; and WHEREAS, in recognition of the extraordinary circumstances of this specific project along with the distinctive hardships for affected businesses, the City Council on January 27, 2025 established a one-time West Grand Avenue Business Assistance Grant Program; and WHEREAS, any public funding to support private businesses must be strictly limited to circumstances with a clearly defined and specific public purpose to avoid setting broader precedents; and
WHEREAS, the City Council found in establishing the grant program that maintaining the economic vitality of the West Grand Avenue corridor during and immediately following this unprecedented public infrastructure project serves a specific and narrow public purpose; and WHEREAS, the grant program parameters included individual grants not exceeding $2,000, grant eligibility limited to businesses with valid Business Tax Certificates with priority consideration for public facing businesses, documentation of financial hardship related to the construction project, final approval of grant recipients by the City Council, and program funding coming from the General Fund; and
WHEREAS, grant awards of $2,000 were recommended for businesses most directly affected by actual construction activity and grant awards of $1,500 were recommended for businesses primarily impacted by reduced customer traffic to this section of West Grand Avenue.

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

1. The City Council hereby approves the list of corresponding recipients and amounts, attached hereto as Exhibit A and incorporated by reference, as recommended by the City-Chamber review committee.

Attachment 1
Resolution No. 25- Page 2

2. The City Manager or designee is hereby authorized and directed to:
a. Disburse grant funding to the recipients identified within Exhibit A. b. Notify the recipients about the requirement to submit a grant reporting form to the City by June 30, 2025, documenting how the funding was spent. c. Provide reimbursement to the South County Chambers of Commerce for costs incurred during program administration in an amount not to exceed five thousand dollars ($5,000.00).
d. Take all other actions reasonably necessary, and consistent with Council’s intent, to fulfill implementation of the program.

3. This Resolution shall take effect immediately upon its adoption.

On motion by Council Member _____, seconded by Council Member ____, and on the following roll-call vote, to wit:

AYES: Council Members –
NOES: Council Members –
ABSENT: Council Members –
ABSTAIN: Council Members –
RECUSED: Council Members –
the foregoing Resolution was PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council of the City of Grover Beach, California this 14th day of April 2025.

KASSI DEE, MAYOR
Attest:

WENDI B. SIMS, CITY CLERK
West Grand Avenue Business Grant Program
Recommended Grant Recipients
Column1 BUSINESS NAME TYPE OF BUSINESS ADDRESS GRANT AMOUNT 1 Beach Pizza Restaurant pizza 960 West Grand Avenue $ 2,000.00 2 Bunn Thai Bistro Restaurant 968 West Grand Avenue $ 2,000.00 3Coastal Tires Tireshop 792 West Grand Avenue $ 2,000.00 4 Cole Linen and Laundry Laundromat 360 West Grand Avenue $ 2,000.00 5 El Taco Del Mar RESTAURANT 750 West Grand Avenue $ 2,000.00 6 Empower Yoga Health and Fitness 755 West Grand Avenue $ 2,000.00 7 First Class Seconds Retail 141 North 6th Street $ 2,000.00 8 Grover Beach Trading Company Retail 151 North 7th Street, Suite 5 $ 2,000.00 9 Izakaya Raku Japanese restaurant 953 West Grand Avenue $ 2,000.00 10 Julia's Juice Bar Juice Bar/ Cafe 960 West Grand Avenue, Suite F $ 2,000.00 11 Divine Thai RESTAURANT 501 West Grand Avenue $ 2,000.00 12 Lil' Bits Café Restaurant 151 North 7th Street $ 2,000.00 13 PathPoint Disability Services Provider 775 West Grand Avenue, #C $ 2,000.00 14 Pura Minerva Esthetician 160 North 7th Street, Unit A $ 2,000.00 15 Red Chair Barbershop Barbershop 583 West Grand Avenue $ 2,000.00 16 Salt and Sand Retail swim resort wear 178 South 4th Street, Suite 102 $ 2,000.00 17 The Planted Parlour, LLC Retail Plant Nursery 592 West Grand Avenue $ 2,000.00 18 The Pottery LLC Pottery Business 957 West Grand Avenue $ 2,000.00 19 CCBeautymark Beauty & Wellness 866 West Grand Avenue $ 1,500.00 20 Clover Honeysuckle Miscellaneous 480 West Grand Avenue, Suite C $ 1,500.00 21 Coastal Vibes E-Bike Rental & Retail 170 West Grand Avenue, Suite 102 $ 1,500.00 22 Fade-0-5 Barber Barbershop 480 West Grand Avenue, Suite A $ 1,500.00 23 Grover Station Grill Food/Beverge 170 West Grand Avenue, Suite 101 $ 1,500.00 24 Heidi’s Suite Beauty 160 North 7th Street, Unit A $ 1,500.00 25 LZ Hair Designz Hair Salon 636 West Grand Avenue, Suite A $ 1,500.00 26 Masterpiece Hair Studio/Masterpiece Hair Solutions Hair Salon 855 West Grand Avenue $ 1,500.00 27 Nail Nook Nail Salon 480 West Grand Avenue $ 1,500.00 28 Pono Pacific Kitchen Full Service Restaurant 228 West Grand Avenue $ 1,500.00 29 Red Bee Coffee coffee shop 278 West Grand Avenue $ 1,500.00 30 Shell Beach Floral Design Retail Flower Shop 260 West Grand Avenue $ 1,500.00 31 Sink Or Swim Tattoo Shop 951 West Grand Avenue $ 1,500.00 32 Surfs Up Cuts Barber shop/salon 235 West Grand Avenue $ 1,500.00 33 The Grooming Nook Pet Grooming 775 West Grand Avenue, Suite B $ 1,500.00 34 The Spoon Trade Restaurant 295 West Grand Avenue $ 1,500.00 TOTAL $ 60,000.00
Exhibit A
Agenda Item No. 9
$3.6

CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: April 14, 2025 FROM: Matthew Bronson, City Manager
PREPARED BY: Nick Szamet, Administrative Services Director SUBJECT: Authorization of Proposition 218 Noticing and Hearing for Wastewater Utility Rate Increases

RECOMMENDATION
Receive and file the final Wastewater Rate Study and authorize staff to commence a Proposition 218 public noticing process and schedule a public hearing on June 9, 2025 to consider increases in the City’s wastewater utility rates.

BACKGROUND
On March 24, 2025, the Council received the results of the updated Wastewater Utility Rate Study provided by Clayton Tuckfield of Tuckfield and Associates. The current rate structure was initially adopted in May 2021 and re-established following passage of citizen initiative Measure G-24 in November 2024, which repealed the rate structure adopted in December 2023. The existing rate structure does not provide sufficient funding for increased regular operations and maintenance costs or an estimated $15 million in needed infrastructure improvements to address existing system deficiencies and future needs, along with ensuring needed reserves in the Wastewater Fund. The inability to fund necessary projects for the City’s sewer system could pose significant risks to community health and safety and has resulted in delays to Measure K-14 residential street improvement projects.

As a result, the study recommends annual wastewater rate increases of 17.8% for each of the next five years beginning July 1, 2025. Under this rate structure, the average bi-monthly bill for single-family residential wastewater customers would increase from $25.64 to $30.20 in 2025; for a total monthly increase of $2.28 per month. Currently, the City’s wastewater rates are near the lowest in the county and the two agencies that currently have lower rates (Arroyo Grande and Oceano) are undergoing water and sewer rate studies to increase their rates. If the proposed rate increases are adopted and go into effect on July 1, 2025, the City’s wastewater rates will continue to be among the lowest in the county.

The final version of the Wastewater Utility Rate Study Report is shown as Attachment 1 with the Proposition 218 public notice shown as Attachment 2. Pursuant to Council direction, the City sent out a mailer to all property owners and wastewater utility customers prior to this meeting to inform the community about the proposed rate increases. The mailer included a link to the City’s website for additional information on wastewater rates and to submit questions and comments (https://www.groverbeach.org/724/Wastewater-Sewer-Rates). Questions and comments received will be posted on the Council agenda page prior to the meeting.

Staff Report: Wastewater Rate Study 218 Noticing Page 2 April 14, 2025
Pending the Council’s authorization of the Proposition 218 process, notices would be sent out to eligible property owners and account holders to inform them of a public hearing to be held on June 9, 2025, to consider the recommended wastewater rate increases. This notice will be sent out in both English and Spanish. Staff also has scheduled two community information sessions for additional community education on the proposed rate increases on May 8 at City Hall and May 28 at Ramona Park Community Center with both sessions from 5:00-6:30 p.m. All customers and property owners will be given the chance to review the rate increases and provide a written protest for the rate increases. However, only one protest per property parcel (APNs) from property owners, or account holders liable for payment of the service, will be counted as valid protests under Proposition 218. Should the City receive valid protests from more than 50% of eligible APNs, the rate increases cannot be adopted.

FISCAL IMPACT
The recommended rate increases would result in additional Wastewater Fund revenue of $186,514 beginning in FY 2025-26 and would result in $1,345,428 of additional revenue in FY 2029-30 of the plan. The proposed rate increases will provide sufficient funding to support regular operations and maintenance of the sewer system, as well as necessary capital projects for sewer system upgrades.

ALTERNATIVES
The Council has the following alternatives to consider:

1. Receive and file the final Wastewater Rate Study and recommendations and authorize staff to commence the Proposition 218 noticing process and public hearing on June 9 to increase the City’s wastewater utility rates; or

2. Do not authorize staff to commence the Proposition 218 noticing process and schedule the public hearing; or

3. Provide alternate direction to staff.

PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.

Attachments

1. Wastewater Utility Rate Study

2. Proposition 218 Notice
Submitted By:

Tuckfield & Associates
Contact: Mr. Clayton Tuckfield
2549 Eastbluff Dr, #450B
Newport Beach, CA 92660
(949) 760-9454
www.tuckfieldassociates.com
February 2025
Report To:

City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
(805) 473-4550
Report on:

Wastewater Rate Study
April 2025
Attachment 1
[This Page Intentionally Left Blank for Two-sided Printing] Tuckfield & Associates
2549 Eastbluff Drive, Suite 450B, Newport Beach, CA 92660 Phone (949) 760-9454 Fax (949) 760-2725
Email [email protected]
April 10, 2025
Mr. Nick Szamet
Administrative Services Director
City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
Dear Mr. Szamet:

I am pleased to present this Wastewater Rate Study (Study) report to the City of Grover Beach (City). The wastewater rates presented in this report have been developed based on industry methods that result in fair and equitable rates for the users of the wastewater system in accordance with Proposition 218.

This study includes a review and analysis of the wastewater enterprise revenue and revenue requirements, number of customers, capital improvements, financing of certain improvements, and current rate structure.

The major objectives of the Study include the following.  Generate positive levels of income in the Study period  Maintain operating and capital reserves at or greater than target levels  Maintain debt service coverage ratios at or greater than the minimum required  Meet annual capital improvement requirements through revenue from rates and charges, financing, and reserves
This report presents the findings and recommendations for the financial plan and rates for the City’s wastewater enterprise. Tables and figures throughout the report are provided to demonstrate the calculations.

It has been a pleasure to work with City staff during the performance of this study. If there are any questions, please contact me at (949) 760-9454.

Very Truly Yours,

TUCKFIELD & ASSOCIATES
G. Clayton Tuckfield
President/Project Consultant
Wastewater Rate Study
City of Grover Beach
Table of Contents
Page
Executive Summary ............................................................................................... 1 Wastewater Financial Plan .............................................................................................................................. 1 Proposed Wastewater Rates .......................................................................................................................... 1 Current Wastewater Rates ...................................................................................................................... 1 Proposed Wastewater Rate Structure and Rates.................................................................................... 2 Wastewater Bill Impacts .................................................................................................................................. 2 Wastewater Rate Survey ................................................................................................................................ 3 Introduction ............................................................................................................. 5 Background ..................................................................................................................................................... 5 Objectives ........................................................................................................................................................ 5 Scope of Study ................................................................................................................................................ 5 Assumptions ........................................................................................................... 6 Reserve Policy ................................................................................................................................................ 7 Beginning Balances and Reserve Targets ...................................................................................................... 7 Wastewater Financial Planning ............................................................................. 7 Current Wastewater Rates .............................................................................................................................. 8 Wastewater User Classifications ..................................................................................................................... 9 Number of Customers.............................................................................................................................. 9 Wastewater Financial Plan .............................................................................................................................. 9 Revenues ................................................................................................................................................. 9 Revenue Requirements ......................................................................................................................... 10 Operation and Maintenance Expense ............................................................................................ 10 Debt Service ................................................................................................................................... 11 Wastewater Capital Improvement Program ................................................................................... 11 Wastewater Financial Plan .................................................................................................................... 12 Proposed Revenue Adjustments.................................................................................................... 12 Wastewater Cost of Service ................................................................................ 15 Wastewater Rate Design ...................................................................................... 15 Proposed Wastewater Rates ................................................................................................................. 16 Wastewater Bill Impact Analysis ......................................................................... 16 Wastewater Rate Survey ...................................................................................... 17 Wastewater Rate Study
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Table of Contents (continued)
Page
List of Tables
Table ES-1 Proposed Wastewater Fixed and Variable Charges ...................................................................... 2 Table 1 Assumptions and Planning Factors ................................................................................................ 6 Table 2 June 30, 2024 Beginning Reserve Balances and Reserve Targets ............................................... 7 Table 3 Current Wastewater Rates ............................................................................................................. 8 Table 4 Historical and Projected Number of Wastewater Customers by Classification .............................. 9 Table 5 Projected Rate-based Wastewater Revenue Using Current Rates ............................................. 10 Table 6 Projected Miscellaneous Wastewater Revenue ........................................................................... 10 Table 7 Projected Wastewater Operation and Maintenance Expense ..................................................... 11 Table 8 Wastewater Capital Improvement Program ................................................................................. 12 Table 9 Wastewater Financial Plan ........................................................................................................... 13 Table 10 Proposed Wastewater Rates ....................................................................................................... 16 List of Figures
Figure ES-1 Current and Future Single-family Residential Bi-monthly Wastewater Bills ................................... 3 Figure 1 Wastewater Financial Plan Comparison of Revenue with Revenue Requirements .................... 14 Figure 2 Wastewater Reserves versus Target Reserves ........................................................................... 15 Figure 3 Current and Future Single-family Residential Bi-monthly Wastewater Bills ................................. 17 List of Charts
Chart ES-1 Single-family Residential Bi-Monthly Wastewater Bills .................................................................. 4 Chart 1 Single-family Residential Bi-Monthly Wastewater Bills Using ...................................................... 18 Wastewater Rate Study  City of Grover Beach
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Executive Summary
The City of Grover Beach (City) engaged Tuckfield & Associates to conduct a comprehensive Wastewater Rate Study (Study) for its wastewater enterprise. The Study includes development of pro forma statements of revenues and revenue requirements and new rates and charges for implementation.

Wastewater Financial Plan
The revenue and revenue requirements of the wastewater system were identified and projected to create a forward-looking financial plan for the wastewater system. Revenue included projections of wastewater service revenue from estimates of future customers applied to current wastewater service rates, and projections of miscellaneous revenue.

Annual costs include operation and maintenance (O&M) expenses, funding of capital improvements, and debt service. O&M expenses were projected by applying inflation percentage increases to the City’s FY 2024-25 budget expenses, while recognizing major expense categories such as labor costs, electric power, chemicals, capital, and other expenses.

The City has prepared a five-year Capital Improvement Program (CIP) spending plan for the wastewater system that is funded through the financial plan. Major projects of the CIP include sewer upgrades; Front Street, South Oak Park, and Nacimiento lift station upgrades; and city-wide sewer upgrade projects. CIP expenditures total about $11.6 million over the Study period from FY 2024-25 to FY 2029-30. The CIP expenditures are planned to be funded through rate revenue, debt proceeds from new debt issues, and wastewater reserves. Debt issues are planned for FY 2025-26, FY 2027-28, and FY 2029-30.

Analysis of the financial plan included the projected revenue’s ability to meet projected revenue requirements (costs) of the system. The analysis indicated that the current level of revenue received is not sufficient to meet revenue requirements. Revenue increases are required to meet future O&M expenses, meet capital spending requirements, maintain reserves, and meet debt service coverage ratios. The revenue increases include 17.8 percent increases annually beginning July 1, 2025 and each July 1 through July 1, 2029 to maintain the financial health of the wastewater enterprise. The wastewater financial plan is presented in Table 9.

Proposed Wastewater Rates
Current Wastewater Rates
The current wastewater rates consist of fixed charges for all customers and variable charges for car wash and restaurant customers. Single-family Residential, Boarding House, Hotel/Motel/Auto Court, Mobile Home, and Multifamily customers are charged by the dwelling unit. Non-residential customers are charged a fixed charge or a combination of a fixed charge and additional employee or other measure. The current rates are provided in Table ES-1 and Table 3.

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Proposed Wastewater Rate Structure and Rates
The proposed schedule of wastewater rates keeps the current wastewater rate structure in place. Wastewater rates for the Study period are updated with the analyses of this Study. Table ES-1 presents the proposed wastewater rates for the next five years.

Wastewater Bill Impacts
From Table ES-1, the change in SFR customer bills that would occur from the implementation of the proposed wastewater rates for the July 1, 2025 rate increase can be determined. For a SFR customer, the bi-monthly bill will increase from $76.60 [($12.82 monthly charge + $25.48 treatment charge) x 2 months] to $81.16 [($15.10 monthly + $25.48 treatment charge) x 2 months], an increase of $4.56 or 6.0 percent.

Figure ES-1 shows how SFR wastewater bills will increase over time with the implementation of the proposed rates from Table ES-1. The figure assumes a constant South San Luis Obispo County Sanitation District (SSLOCSD) treatment charge which is included in the wastewater bill calculation.

Table ES-1
Proposed Wastewater Fixed and Variable Charges
[1] Fixed charge per account/dwelling unit per month.
[2] Charged on the basis of water consumption read through the meter.

Current Proposed Fixed Charges (per month)
Classification Charge Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Boarding House (per unit) $15.54 $18.31 $21.57 $25.41 $29.93 $35.26 Per Bedroom Charge 10.00 11.78 13.88 16.35 19.26 22.69
Car Washes & Laundromats (min charge) 6.19 7.29 8.59 10.12 11.92 14.04 Church 15.06 17.74 20.90 24.62 29.00 34.16
Per parsonage or dwelling unit 12.82 15.10 17.79 20.96 24.69 29.08 Commercial Establishment (Public place up to 5 Fixtures) 15.04 17.72 20.87 24.58 28.96 34.11 Each additional fixture 4.12 4.85 5.71 6.73 7.93 9.34
Factories, Industrial Plants (20 employees or less) 10.12 11.92 14.04 16.54 19.48 22.95 Each additional employee over 20 1.16 1.37 1.61 1.90 2.24 2.64 Hotel, Motel Auto Court or Lodge (per unit) 15.45 18.20 21.44 25.26 29.76 35.06 Mobile Home (per space) 12.82 15.10 17.79 20.96 24.69 29.08 Restaurants (min charge) 2.14 2.52 2.97 3.50 4.12 4.85
Schools (min annual charge per ADA and employee) 3.31 3.90 4.59 5.41 6.37 7.50 Schools with Cafeterias (additional) Per ADA and employees 1.38 1.63 1.92 2.26 2.66 3.13 Single-Family Dwelling Unit [1] 12.82 15.10 17.79 20.96 24.69 29.08 Theater, Clubhouse or Place of Amusement 15.04 17.72 20.87 24.58 28.96 34.11 Travel Trailer and Recreation Vehicle Space 6.60 7.77 9.15 10.78 12.70 14.96 Multi-family, Two or More Dwellings (per unit) [1] 12.82 15.10 17.79 20.96 24.69 29.08 Per each coin-operated washer 2.80 3.30 3.89 4.58 5.40 6.36 Excess Discharge per 100 cubic feet $0.40 $0.47 $0.55 $0.65 $0.77 $0.91 Proposed Rates ($/HCF)
Classification Charge Jul 1, 2025 Jul 1, 2026 Jul 1, 2027 Jul 1, 2028 Jul 1, 2029 Car Wash - Per 100 cubic feet above minimum [2] $2.03 $2.39 $2.82 $3.32 $3.91 $4.61 Restaurants - Per 100 cubic feet above minimum [2] $4.12 $4.85 $5.71 $6.73 $7.93 $9.34 Wastewater Rate Study  City of Grover Beach
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Wastewater Rate Survey
Chart ES-1 has been prepared to compare Grover Beach’s SFR wastewater bill with those of other communities for rates in effect in January 2025. Chart ES-1 uses wastewater bills for Grover Beach with the current rates and the proposed rates for implementation on July 1, 2025. Where required, the bills of other communities were calculated using a volume of 15 HCF bi-monthly (the average volume for Grover Beach) where the bill calculation required a usage component. Exceptions for use of a lower volume are noted in the footnotes of Chart ES-1.

The chart indicates that with the July 1, 2025 wastewater rate implementation, a Grover Beach SFR customer will experience a bill that is among the lowest of the communities listed.

Figure ES-1
Current and Future Single-family Residential Bi-monthly Wastewater Bills Proposed
SFR Charges Current FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Fixed Charges $25.64 $30.20 $35.58 $41.92 $49.38 $58.16 SSLOCSD Charge $50.96 $50.96 $50.96 $50.96 $50.96 $50.96 Fixed Charges $76.60 $81.16 $86.54 $92.88 $100.34 $109.12 Dollar Change $4.56 $5.38 $6.34 $7.46 $8.78
Percent Change 6.0% 6.6% 7.3% 8.0% 8.8%
$76.60
$81.16
$86.54
$92.88
$100.34
$109.12
$0
$20
$40
$60
$80
$100
$120
Current FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30
Fixed Charges
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Chart ES-1
Single-family Residential Bi-Monthly Wastewater Bills
For Rates in Effect January 2025
Note: Above table uses wastewater rates in effect January 2025. Grover Beach July 2025 bill is based on the rate structure and rates in Table ES-1 and also includes the storm water charge.

Grover Beach, Arroyo Grande, and Oceano CSD bill includes the SSLOCSD treatment charge. San Luis Obispo includes 7 HCF per month while Paso Robles includes 6 HCF per month.

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Introduction
The City of Grover Beach (City) engaged Tuckfield & Associates to conduct a comprehensive Wastewater Rate Study (Study) for its wastewater enterprise. The Study includes development of pro forma statements of revenues and revenue requirements and new wastewater rates and charges for implementation.

Background
The City of Grover Beach (City) is located along the central coast of the state of California in San Luis Obispo County, north of Los Angeles by approximately 175 miles. The City has a population of over 12,400 and provides wastewater service within the City limits. Wastewater service is accounted for in an enterprise fund separate from all other funds. The City relies upon user charges to meet all financial obligations of the wastewater enterprise.

The wastewater system consists of seven lift stations, sewer access holes, and over 26 miles of sewer collection pipe to collect the City’s wastewater. The City has contracted with the South San Luis Obispo County Sanitation District (SSLOCSD) to provide wastewater treatment service for the City’s wastewater. The elements of the contract are provided in an agreement dated October 1, 1991 between the City and SSLOCSD. Treatment and disposal charges for wastewater service are determined by SSLOCSD and are included on the customer’s bimonthly bill separately from the City’s charges for collection service. SSLOCSD treatment and disposal charges and are not included in the City’s wastewater rates.

Objectives
The objectives of this Study are to (1) review the current and future financial status of each of the wastewater enterprise, (2) make any rate adjustments to the revenue being received to ensure that revenue requirements are being met now and, in the future, including adequate reserves and debt service coverage, and (3) design wastewater rates that generate the required revenue while being fair and equitable to customers. Additionally, the Study also sought to provide the following.
 Revenue sufficiency to fund operating and capital needs  Appropriate levels of operating and capital reserves
 Rates that are consistent with industry practice
 Rates that are easy to understand and administrate
Scope of the Study
This Study includes the findings and recommendations of analyzing the wastewater enterprise’s financial status and related CIP funding. Historical trends were analyzed from data supplied by the City showing the number of customers, revenue, and revenue requirements.

Revenue requirements included O&M expenses, capital improvement funding, existing and proposed debt service, and additions to reserves. Changing conditions such as additional facilities, system growth, employee Wastewater Rate Study  City of Grover Beach
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additions/reductions, and non-recurring maintenance expenditures are recognized. Inflation for ongoing expenditures is included to reflect cost escalation.

The financial plan and rates developed herein are based on funding of the capital improvement plan as stated as well as estimates of O&M expenses developed from information provided by the City. Deviation from the financial plans, construction cost estimates and funding requirements, major operational changes, or other financial policy changes that were not foreseen, may result in the need for lower or higher revenue than anticipated. It is suggested that the City conduct an update to the rate study at least every five years for prudent rate planning.

Assumptions
Several assumptions were used to conduct the Study for the period FY 2024-25 to FY 2029-30. The assumptions included growth rates in customer accounts, interest earnings, expense inflation factors, and other assumptions used for projecting revenues, expenses, and future capital costs. The financial planning assumptions are provided in Table 1.

Table 1
Assumptions and Planning Factors
[1] Annualized growth in water accounts is based on historical information provided by staff. [2] Personnel Services growth in staffing, promotions and inflation is 3.0% percent annually.

Description Value
Annual Account & Demand growth [1]
Single-family Residential 0.5%
All Other 0.0%
Interest Income
Interest earnings on fund reserves (annual) 3.0%
Cost Escalation
Personnel Services [2] 3.0%
Benefits 8.0%
Electrical Power 5.0%
Chemicals 3.0%
Personnel Transfers 3.0%
All Other Operations & Maintenance 2.0%
Capital 3.0%
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Reserve Policy
The City currently does not have written reserve policies regarding the level of reserves to be maintained for the wastewater enterprise. However, the City does have reserve policy goals for maintaining reserves for wastewater operations and capital reserves. Reserves provide a means to meet unanticipated reductions in revenues, changes in the costs of providing services, fixed asset repair and replacement, natural disaster, and other issues.

The reserves also provide guidelines to maintain the financial health and stability of the enterprise fund.

To develop the financial plan presented in this Study, certain reserve targets have been established with the intent of providing planning criteria for the financial plan. The reserve types and the amount of reserves used in this Study are discussed below.

Operating Reserve – The purpose of the Operating Reserve is to provide working capital to meet cash flow needs during normal operations and support the operation, maintenance and administration of the utility. This reserve ensures that operations can continue should there be significant events that impact cash flow. The target balance to be maintained is 180 days (50 percent) of the current annual operating expense budget.

Capital Reserve – The Capital Reserve is used to fund replacement of assets and fund new capital improvement projects. The target balance is equal to $500,000.

Beginning Balances and Reserve Targets
As of June 30, 2024, the City’s beginning reserve balances are listed in the table below. The reserves are used in developing the financial plan for the wastewater utility. Reserve Targets are also provided in the table.

Wastewater Financial Planning
Financial planning for the wastewater system includes identifying and projecting revenues and revenue requirements for a six-year planning period for this Study. Estimates of revenue from various sources are compared with the projected revenue requirements of the wastewater system. This comparison allows the review of the adequacy of current revenue to meet annual obligations and provide the basis for any rate Table 2
June 30, 2024 Beginning Reserve Balances and Reserve Targets Reserve Reserve
Reserve Type Balance Target
Wastewater Operating Reserve $3,609,400 $740,000
Capital Replacement Reserve $500,000 $500,000
Total Reserves $4,109,400 $1,240,000
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adjustments. New wastewater rates and charges are created to recover all of the City’s annual operating and capital costs associated with the wastewater system.

This section discusses current wastewater rates, current user classifications, projected revenues and revenue requirements, capital improvement expenditures and financing sources, and proposed revenue adjustments.

Current Wastewater Rates
The current wastewater rates became effective July 1, 2024 and consist of fixed charges to residential and nonresidential customers. Car wash and restaurants customers are charged both fixed and variable charges. Though all customers are charged a fixed charge monthly, they are billed bi-monthly. Table 3 provides the current wastewater rates.

Table 3
Current Wastewater Rates
Classification July 1, 2024
$/month
Boarding House (per unit) $15.85
Per Bedroom Charge $10.20
Car Washes & Laundromats (min charge) $6.31
Church $15.36
Per parsonage or dwelling unit $13.08
Commercial Establishment (Public place up to 5 Fixtures) $15.34 Each additional fixture $4.20
Factories, Industrial Plants (20 employees or less) $10.33 Each additional employee over 20 $1.18
Hotel, Motel Auto Court or Lodge (per unit) $15.76
Mobile Home (per space) $13.08
Restaurants (min charge) $2.19
Schools (min annual charge per ADA and employee) $3.38
Schools with Cafeterias (additional) Per ADA and employees $1.41 Single-Family Dwelling Unit $13.08
Theater, Clubhouse or Place of Amusement $15.34
Travel Trailer and Recreation Vehicle Space $6.73
Multi-family, Two or More Dwellings (per unit) $13.08
Per each coin-operated washer $2.86
Excess Discharge per 100 cubic feet $0.41
Classification July 1, 2024
$/HCF
Car Wash - Per 100 cubic feet above minimum $2.07
Restaurants - Per 100 cubic feet above minimum $4.20
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Wastewater User Classifications
Number of Customers
The City classifies wastewater customers into one of many classifications. SFR customers represent more than 62 percent of the total customers served by the wastewater system. Growth is projected to occur only in SFR accounts at a rate of 0.50 percent annually or about 20 SFR accounts added each year, following the assumptions listed in Table 1. Table 4 provides the historical and projected number of customers by classification.

Wastewater Financial Plan
The financial plan provides a means of analyzing the revenue and revenue requirements of the wastewater system and its impact on reserves as well as the ability to fund on-going O&M expenses and capital infrastructure requirements. Items included in the financial pan are discussed below.

Revenues
The wastewater enterprise receives operating and miscellaneous revenue. Operating revenue is received from rates and charges for wastewater service. Revenue is projected by applying the current wastewater rates to the projected number of accounts. Table 5 presents the projected revenue from current wastewater rates.

Table 4
Historical and Projected Number of Wastewater Customers by Classification [1] Accounts/units are forecast to increase based on the assumed growth rate of 0.5% annually.

Historical Projected
Customer Class FY 23-24 FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Boarding House (per unit) - - - - - - -
Per Bedroom Charge - - - - - - -
Car Washes & Laundromats (min charge) 6 6 6 6 6 6 6
Church 9 9 9 9 9 9 9
Per parsonage or dwelling unit 5 5 5 5 5 5 5
Commercial Establishment (Public place up to 5 Fixtures) 381 381 381 381 381 381 381 Each additional fixture 19 19 19 19 19 19 19
Factories, Industrial Plants (20 employees or less) 32 32 32 32 32 32 32 Each additional employee over 20 6 6 6 6 6 6 6
Hotel, Motel Auto Court or Lodge (per unit) 153 153 153 153 153 153 153 Mobile Home (per space) 156 156 156 156 156 156 156
Restaurants (min charge) 37 37 37 37 37 37 37
Schools (min annual charge per ADA and employee) - - - - - - - Schools with Cafeterias (additional) Per ADA and employees - - - - - - - Single-Family Dwelling Unit [1] 4,023 4,043 4,063 4,084 4,104 4,125 4,145 Theater, Clubhouse or Place of Amusement - - - - - - -
Travel Trailer and Recreation Vehicle Space 122 122 122 122 122 122 122 Multi-family, Two or More Dwellings (per unit) 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Per each coin-operated washer 1 1 1 1 1 1 1
Excess Discharge per 100 cubic feet - - - - - - -
Total Number of Customers 6,450 6,470 6,490 6,511 6,531 6,552 6,572 Wastewater Rate Study  City of Grover Beach
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Miscellaneous revenues are received from several sources including plan check and inspection fees, transfers in, General Fund loan interest repayment, and storm water revenue. Table 6 below provides sources of miscellaneous revenue.

In addition to miscellaneous revenue, the City also receives development impact fee revenue which is used to directly offset capital improvement projects and is shown in the financial plan.

Revenue Requirements
Revenue requirements of the wastewater system include O&M expenses, debt service payments, and capital improvement funding. Each of these items are discussed below.

Operation and Maintenance Expense
O&M expenses are an on-going obligation of the wastewater system and such costs are normally met by wastewater service revenue. O&M expenses include the cost of operating and maintaining the wastewater collection system facilities. Costs also include technical services and other general and administrative expenses.

O&M expenses have been projected recognizing the major expense categories of personnel services, electric power expenses, chemicals, capital outlay, and other expenses. O&M expenses are inflated with the inflation factors presented in Table 1. Table 7 provides a summary of the O&M expenses for the Study period.

Table 5
Projected Rate-based Wastewater Revenue Using Current Rates [1] Current fixed charges multiplied by the number of customers. [2] Current non-residential variable rates multiplied by projected non-residential water volumes.

Projected
Description FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Fixed Charge Revenue [1] $1,012,352 $1,015,491 $1,018,787 $1,021,926 $1,025,222 $1,028,361 Variable Consumption Revenue [2] 32,338 32,338 32,338 32,338 32,338 32,338 Total Revenues From Current Rates $1,044,690 $1,047,829 $1,051,125 $1,054,264 $1,057,560 $1,060,699 Table 6
Projected Miscellaneous Wastewater Revenue
Budget Projected
Description FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Miscellaneous $27,000 $27,000 $27,000 $27,000 $27,000 $27,000 General Fund Loan Interest Repayment 2,604 25,712 20,869 15,881 10,743 5,451 Storm Water Revenue 300,428 301,592 302,815 303,979 305,201 306,365 Total Miscellaneous Revenues $330,032 $354,304 $350,684 $346,860 $342,944 $338,816 Wastewater Rate Study  City of Grover Beach
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Debt Service
Currently, the City does not have any debt associated with the wastewater system. However, new debt is proposed to fund a majority of the CIP projects. A debt issue of $4.8M is proposed in FY 2025-26 that includes one year’s principal and interest as a reserve, issuance costs, and proceeds of $4.2M to fund the Sewer Upgrade for Existing Flows project, the Front Street Lift Station, and other sewer upgrades. The proposed debt issue is projected to have payments of $392,900 annually beginning in FY 2026-27 and includes an interest rate of 5.25 percent with a 20-year term.

Additional debt is proposed to be issued in FY 2027-28 in the amount of $2.18M and in FY 2029-30 in the amount and $1.97M. The debt issues include one year’s principal and interest as a reserve and issuance costs with net proceeds of $1.8 and $1.6M respectively to fund sewer upgrades and other improvements. The FY 2027-28 debt issue has estimated annual payments of $182,600 and includes an interest rate of 5.5% and 20 year term while the FY 2029-30 debt issue has payments of $167,300 and an interest rate of 5.75% and a 20 year term.

Wastewater Capital Improvement Program
The City has developed a CIP that identifies capital improvement expenditures for FY 2024-25 through FY 2029- 30 and is provided in Table 8. Over this period the City projects that it will spend approximately $11.6M. The major improvements include Sewer Upgrades for Future Flows; Front Street, South Oak Park, Nacimiento Lift Table 7
Projected Wastewater Operations and Maintenance Expense Budget Projected
Desription FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Utility Billing
Salaries $263,263 $271,161 $279,296 $287,674 $296,303 $305,195 Benefits 92,865 100,295 108,316 116,981 126,339 136,443 All Other 78,100 79,662 81,253 82,879 84,535 86,226
Subtotal Utility Billing $434,228 $451,118 $468,865 $487,534 $507,177 $527,864 Wastewater Operations
Salaries $174,063 $179,285 $184,664 $190,204 $195,910 $201,788 Benefits 61,529 66,440 71,743 77,470 83,655 90,334
Engineering Services 36,000 36,720 37,454 38,203 38,967 39,746 Miscellaneous Fees/Charges 4,800 4,896 4,994 5,094 5,196 5,300 Maintenance of Vehicles 7,125 7,268 7,413 7,561 7,712 7,866 Repairs and Maintenance 36,000 36,720 37,454 38,203 38,967 39,746 Training and Education 5,000 5,250 5,513 5,789 6,078 6,382 Uniforms 2,400 2,448 2,497 2,547 2,598 2,650
Utilities - Electricity 11,000 11,220 11,444 11,673 11,906 12,144 Vehicle Fuel 2,700 2,754 2,809 2,865 2,922 2,980
All Other 7,600 7,752 7,905 8,064 8,224 8,389
Subtotal Operations $348,217 $360,753 $373,890 $387,673 $402,135 $417,325 Storm Water $292,060 $299,018 $306,151 $313,460 $320,950 $328,626 Non-Departmental
Salaries $87,311 $94,296 $101,840 $109,987 $118,786 $128,289 Supplies and Services 71,000 72,420 73,868 75,346 76,853 78,390 Transfers Out 248,152 253,115 258,177 263,341 268,608 273,980 Subtotal Non-Departmental $406,463 $419,831 $433,885 $448,674 $464,247 $480,659 Total Wastewater O&M Expense $1,480,968 $1,530,720 $1,582,791 $1,637,341 $1,694,509 $1,754,474 Wastewater Rate Study  City of Grover Beach
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Station Upgrades, and other sewer upgrade projects. The CIP is funded from wastewater rate revenue, development impact fee revenue, General Fund loan principal repayment, debt proceeds discussed above, and reserves.

Wastewater Financial Plan
A financial plan has been prepared that includes the revenues and revenue requirements that were identified for the wastewater system and is presented in Table 9. The plan incorporates specific financial planning criteria to provide guidance to maintain the health of the wastewater utility on an on-going basis. The criteria included the following.
 Generate positive levels of income in each year of the Study period  Maintain the operating and capital reserves at or greater than target levels  Maintain debt service coverage ratios at or greater than the minimum required  Meet annual capital replacement and improvement spending requirements Proposed Revenue Adjustments
Table 9 provides the annual revenue increases recommended to meet the financial planning criteria for the Study period. The revenue increases are required to meet future O&M expenses, meet capital spending requirements, maintain reserves, and meet debt service coverage ratios and will maintain the financial health of the wastewater enterprise. The financial plan indicates that 17.8 percent annual increases are recommended beginning July 1, 2025, and continuing on each July 1 through July 1, 2029.

Table 8
Wastewater Capital Improvement Program
[1] CIP Source: City of Grover Beach.

Projected
Project Description FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Current Capital Improvement Program (CIP) Projects [1]
Sewer Upgrade for Existing and Future Flows $706,000 $550,000 $0 $0 $0 $0 Front Street Lift Station Upgrades 50,000 200,000 - - - - Sewer Upgrade for Existing Flows - 3,900,000 - - - -
South Oak Park Lift Station Upgrades - 190,000 - - - -
Sewer Upgrade for Existing Flows (includes Mentone) - - 2,700,000 - - - Replace Portion of Damaged Strom Drain - - - 160,000 - - Nacimiento Lift Station Upgrades - 130,000 - 400,000 - - Nacimiento Manhole Upgrades - - - - 20,000 -
Sewer Upgrade for Existing Flows - - - 630,000 - -
Sewer Upgrade for Existing Flows (Industrial Conversion) - - - - 2,000,000 - Total Wastewater CIP $756,000 $4,650,000 $320,000 $3,100,000 $790,000 $2,020,000 Wastewater Rate Study  City of Grover Beach
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Table 9
Wastewater Financial Plan
[1] Projected using current rates.
[2] Additional revenue from rate adjustments.
[3] From Table 6.
[4] Interest earnings on the average fund balance calculated at 3.0%. [5] Debt service payments calculated on debt proceeds, one year’s principal and interest, and issuance costs. [6] Proceeds net of issuance costs and a reserve equal to annual debt service of each issue. [7] The available FY 24-25 reserves balance provided by the City. Includes operating and capital fund reserves. [8] Target reserve estimated at 180 days of operation and maintenance expense plus $500,000 as a capital reserve. [9] Includes revenue from rates, rate adjustments, miscellaneous revenue, and development impact fees. [10] Minimum coverage is 125 percent.

Projected
Description FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 Proposed Revenue Increase (July 1) 17.8% 17.8% 17.8% 17.8% 17.8% Revenue
Rate-based Revenues, Current Rates [1] $1,044,690 $1,047,829 $1,051,125 $1,054,264 $1,057,560 $1,060,699 Total Additional Wastewater Revenue [2] - 186,514 407,504 669,133 978,948 1,345,428 Miscellaneous Income [3] 330,032 354,304 350,684 346,860 342,944 338,816 Rate Stabilization Reserves - 152,000 - - - -
Interest Income [4] 96,800 84,256 79,203 62,939 40,521 36,687 Total Revenue $1,471,522 $1,672,903 $2,040,516 $2,133,196 $2,419,973 $2,781,630 Operation and Maintenance Expense
Operation and Maintenance Expense $1,480,968 $1,530,720 $1,582,791 $1,637,341 $1,694,509 $1,754,474 New Debt Service [5] - 392,900 - 392,900 575,500 575,500 Total Operation and Maintenance Expense $1,480,968 $1,530,720 $1,975,691 $2,030,241 $2,270,009 $2,329,974 Net Funds Available Before Capital ($9,446) $142,183 $64,825 $102,955 $149,964 $451,656 Capital
Capital Improvements $756,000 $4,650,000 $320,000 $3,100,000 $790,000 $2,020,000 Development Impact Fees - (19,849) (35,404) - - -
General Fund Loan Principal Repayment (184,547) (161,438) (166,281) (171,270) (176,408) (181,700) New Debt Proceeds [6] (4,200,000) - (1,800,000) - (1,600,000) - Net Capital Expenditures $571,453 $268,713 $118,315 $1,128,730 $613,592 $238,300 Net Funds Available After Capital ($580,899) ($126,530) ($53,490) ($1,025,775) ($463,628) $213,356 Available Reserves
Beginning available reserves [7] $3,609,400 $3,028,501 $2,749,972 $2,696,481 $1,670,706 $1,207,078 Net Funds Available After Capital ($580,899) ($126,530) ($53,490) ($1,025,775) ($463,628) $213,356 Rate Stabilization Reserves - (152,000) - - - -
Ending available reserves $3,028,501 $2,749,972 $2,696,481 $1,670,706 $1,207,078 $1,420,434 Target Reserves [8] $1,240,000 $1,265,000 $1,291,000 $1,319,000 $1,347,000 $1,377,000 Above (below) Target $1,788,501 $1,484,972 $1,405,481 $351,706 ($139,922) $43,434 Debt Service Coverage
Net Revenues [9] ($9,446) $162,032 $493,129 $495,855 $725,464 $1,027,156 Annual Debt Service $0 $0 $392,900 $392,900 $575,500 $575,500 Coverage [10] n/a n/a 126% 126% 126% 178%
Wastewater Rate Study  City of Grover Beach
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A graphical depiction of the revenue and revenue requirements from Table 9 is presented in Figure 1. Revenue using the current rates is shown as the black line while revenue with revenue adjustments is shown as the red line.

Figure 1 shows that the revenue increases from Table 9 are necessary to meet annual revenue requirements, fund the CIP requirements, maintain the operating reserve, and meet minimum debt service coverage ratios required by debt covenants. Revenue increases beyond FY 2029-30 are assumed to include 3.0 percent annual increases.

Figure 2 provides a graphical depiction of the wastewater fund end-of-year reserves versus the Target reserves.

The green columns represent the reserve balance at the end of year while the purple line indicates the established Target Reserve level. The figure shows that the reserve balance meets the Target Reserve level in almost all years of the 10-year period while drawing down the City’s reserves to the established level.

Figure 1
Wastewater Financial Plan
Comparison of Revenue with Revenue Requirements
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
FY 24-25 FY 25-26 FY 26-27 FY 27-28 FY 28-29 FY 29-30 FY 30-31 FY 31-32 FY 32-33 FY 33-34 Sources and Uses ($ Millions) Operating Exp Debt Service Capital Improvements Reserves Revenue w/o Increases Revenue with Increases Wastewater Rate Study  City of Grover Beach
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Wastewater Cost of Service
The Water Environment Federation (WEF) is an industry trade organization that provides guidance on operations, technical training, education, and management of wastewater utilities. General principles are provided to assist agencies with the design of wastewater rates and charges that are consistent with local requirements while also recognizing state laws and legal framework.