Agenda packet — Healdsburg City Council, October 20, 2025 (part 1 of 2)

CITY OF HEALDSBURG

CITY COUNCIL/REDEVELOPMENT

SUCCESSOR AGENCY

REGULAR MEETING AGENDA
Meeting Date: October 20, 2025
Time: 06:00 PM
City Hall Council Chamber
401 Grove Street
Healdsburg, CA 95448
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healdsburg.gov/zoom (Pre-registration for the meeting is not required.) To view the agenda online, visit healdsburg.gov/agendas. To view the Council Meeting PowerPoint presentations or correspondence received after the agenda packet has been posted, visit healdsburg.gov/presentations. To electronically submit correspondence regarding an item on the agenda, please email [email protected]. Documents and correspondence received 72 hours prior to the meeting will be posted by 10:00 a.m. the following business day.

CALL TO ORDER/ROLL CALL
Pledge of Allegiance
Approval of Agenda

REPORT ON CLOSED SESSION(S)

ANNOUNCEMENTS/PRESENTATIONS
Acknowledgement of the Foss Creek Clean-up Crud Cup Winners

CITY MANAGER REPORTS

PUBLIC COMMENTS ON ITEMS ON THE CONSENT CALENDAR AND NON

AGENDA ITEMS
This time is set aside to receive comments from the public regarding matters of general interest not on the agenda, but related to City Council/RSA business. Pursuant to the

1. 1.a

1.b

2. 3.

3.a

4. 5.
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Brown Act, however, the City Council cannot consider any issues or take action on any requests during this comment period. Public comment on non-agenda items is limited to thirty (30) minutes total for all speakers, with each speaker given no more than three (3) minutes. If there are more than ten (10) audience/public comment speakers, the Mayor may reduce each speaker’s time from three (3) minutes so that all speakers have an equal time to speak. At the Mayor’s discretion, the public comment period may be extended past 30 minutes. Members from the public wishing to speak on a Consent Agenda item should notify the Mayor during Public Comments.

CONSENT CALENDAR
The following items listed on the Consent Calendar are considered routine in nature or have been previously reviewed by the Council and require little or no further discussion by the Council, public, or applicant and action will be taken by the City Council by a single motion. A Councilmember may request that an item be removed from the Consent Calendar and action taken separately. Consent by a majority of the Councilmembers present will be required in order to remove the item. In the event an item is removed, the matter will be considered immediately following the adoption of the Consent Calendar.

Healdsburg Fire Station 2024 Reroofing Project Notice of Completion Adopt a Resolution accepting as complete the Healdsburg Fire Station 2024 Reroofing Project and authorizing staff to file a Notice of Completion with the County Recorder’s Office.

Surplus Vehicles and Equipment
Adopt a Resolution declaring various vehicles and equipment as surplus.

Citrine Apartments Assignment and Assumption Agreement, Subordination Agreement, and Termination and Release
Adopt a Resolution approving the Assignment and Assumption Agreement with Citrine Preservation Limited Partnership for the Citrine Apartments and authorizing the City Manager to execute the Agreement.

1. Adopt a Resolution approving a Subordination Agreement for the Citrine Apartments related to financing provided by Berkadia Commercial Mortgage LLC and authorizing the City Manager to execute the Agreement.

2. Adopt a Resolution approving a Termination and Release Agreement and authorizing the City Manager to execute the Agreement.

3. Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants for 34 Ward Street

6. 6.a

6.b

6.c

6.d
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Adopt a Resolution approving an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with Dream Bigger Acquisitions 1, LLC, for the 6-Lot Subdivision at 34 Ward Street and authorizing the City Manager to execute and deliver all documents necessary to complete the transaction and recordation.

Approval of Minutes
By motion, approve the August 4, 2025 City Council Regular Meeting Minutes.

PUBLIC HEARINGS

OLD BUSINESS
Professional Services Agreement with Mark Thomas and Company Inc.

Adopt a Resolution approving a Professional Services Agreement with Mark Thomas and Company Inc. for engineering services for the US 101/Dry Creek Road Interchange Improvements Project in the not-to-exceed amount of $407,115.07, approving a Cooperative Funding Agreement with Sonoma County Transportation and Climate Authorities in the amount of $500,000, approving a Cooperative Agreement with Caltrans in the amount of $213,000, authorizing the City Manager to execute the Agreements, and amending the Adopted Fiscal Year 2025-26 Budget.

Capital Improvement Program and Appropriations for Continuing Projects
Adopt a Resolution approving amendments to the Fiscal Year 2025-26 Adopted Budget to reestablish appropriations for continuing Capital Improvement Projects.

City Council Manual of Procedures and Protocols
Review subcommittee work to-date and discussion and provide direction to staff.

NEW BUSINESS

COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE

PREVIOUS REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS

ADJOURN CITY COUNCIL/RSA MEETING

FUTURE AGENDA ITEMS
Future Agenda Items List for 2025

6.e

7. 8.

8.a

8.b

8.c

9. 10.

11. 12.

12.a
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SB 343 - DOCUMENTS RELATED TO OPEN SESSION AGENDAS: Any writings or documents provided to a majority of the City Council/Redevelopment Successor Agency Board regarding any item on this agenda after the posting of this agenda and not otherwise exempt from disclosure, will be made available for public review in the City Clerk's Office located at City Hall, 401 Grove Street, Healdsburg, during normal business hours. If supplemental materials are made available to the members of the City Council/Redevelopment Successor Agency Board at the meeting, a copy will be available for public review at the City Hall Council Chambers, 401 Grove Street, Healdsburg, CA 95448.

These writings will be made available in appropriate alternative formats upon request by a person with a disability, as required by the Americans with Disabilities Act.

DISABLED ACCOMMODATIONS: The City of Healdsburg will make reasonable accommodations for persons having special needs due to disabilities. Please contact Raina Allan, City Clerk, at Healdsburg City Hall, 401 Grove Street, Healdsburg, California, 431-3317, at least 72 hours prior to the meeting, to ensure the necessary accommodations are made.

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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 20, 2025
SUBJECT: Healdsburg Fire Station 2024 Reroofing Project Notice of Completion PREPARED BY: Tyler Kettmann, Central Services Manager
STRATEGIC INITIATIVE(S):
 Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a Resolution accepting as complete the Healdsburg Fire Station 2024 Reroofing Project and authorizing staff to file a Notice of Completion with the County Recorder’s Office.

COMMUNITY ENGAGEMENT/OUTREACH:

The Healdsburg Fire Station 2024 Reroofing Project construction contract was advertised for public bidding in the Santa Rosa Press Democrat and on the City’s website.

BACKGROUND:

One of the Strategic Plan Initiatives adopted by the City Council is to “Maintain and Improve Infrastructure and Facilities.” The initiative states that “Healdsburg will initiate action necessary to catch up on the deferred maintenance of City facilities and infrastructure including streets, sidewalks, parks, utility infrastructure, and buildings. The City will also develop a program for long-term maintenance that includes a system for establishing priorities among projects and maintenance services and needs.” The Healdsburg Fire Station 2024 Reroofing Project (the “Project”) addresses necessary building improvements and is consistent with the City’s Strategic Initiative.

The Fire Station was built in 1991, and the current roof consists of a pitched metal roof and a flat built-up roof membrane with a silicone coating. Staff have identified continued deficiencies with the roof at the Fire Station. The silicone coating has failed in several areas in recent years, causing more leaks to appear inside the building. The cause of the leaks stem from the termination point between the metal pitched roof and the built-up membrane/silicone flat roof. During storms, rainwater intrudes into failures at this termination point. Staff determined there was a need to have an architect review the findings and design a solution.

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In September 2024, City staff engaged Don Alameida of Alameida Architecture to assist in accomplishing the goal of replacing the membrane flat roof with a more long-term solution, while still maintaining the existing metal pitched roof structure which remains in relatively good condition. The design costs for the plans and specifications totaled $18,600.

The City advertised the Healdsburg Fire Station 2024 Reroofing Project for construction consistent with the Healdsburg Municipal Code. Bids were opened on November 19, 2024. At the bid opening, two bids were received: Stronger Building Services with a base bid of $345,000 and Contract West Roofing Inc. with a base bid of $147,700. Staff found both bids to be responsive.

DISCUSSION/ANALYSIS:

The City Council conditionally awarded the construction contract to Contract West Roofing on January 21, 2025, for the original amount of $147,700. Included in the Council’s authorization was a 5% contingency to account for changes typical of construction projects. Change orders were necessary and issued as summarized below.

Change Order Summary Change Order Price
CCO 1: Clean, prep, and seal skylights and vents with Roof X Tender 981 $
3,300.00
Total Construction Contract Costs:
$
151,000.00
Contract West Roofing has completed all the work in compliance with the approved Project Plans, Specifications, Special Provisions, and Contract Change Orders. City representatives have reviewed all contract documents and performed final inspections of the work and have determined that all work has been performed and completed in accordance with the contract documents, and as directed by the City. There are no liquidated damages to be assessed and there are no existing or potential contractor claims. Therefore, the Project is deemed complete by staff and ready for City Council acceptance.

ENVIRONMENTAL STEWARDSHIP:

The Project Technical Specifications includes general requirements and procedures for compliance with California Code of Regulations, Title 24, Part 11 California Green Building Standards Code, "CAL-Green". This includes but is not limited to; related requirements for Construction Waste Management and Disposal; VOC Restrictions; Construction Site Best Management Practices; a Storm Water Pollution Prevention Plan; and Pollutant Control.

ALTERNATIVES:

There is no reasonable alternative to the recommended action as the work is complete, and the building permit has passed final inspection.

FISCAL IMPACT:

The Project was budgeted and completed using the Building Maintenance Fund. The FY 24-25 Adopted Budget included $125,000 to complete the work. On January 21, 2025, City Council approved an amendment to the FY 24-25 budget, increasing appropriations in the Building Maintenance Fund by $53,685 to complete the Project. Actual Project costs are comprised of a Item 6.a
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construction contract with Contract West Roofing for $147,700, with an authorized contingency of $7,385 and a design contract with Alameida Architecture for $18,600. Construction, including approved change orders, was completed for a total of $151,000, which is $4,085 under the authorized construction contract amount. Permitting and noticing costs totaled $1,938.02. The Project is estimated to be completed under the amended budget by approximately $7,146.

ENVIRONMENTAL ANALYSIS:

Council’s accepting of the Project as complete and directing staff to record the Notice of Completion with Sonoma County is not a “project” pursuant to California Environmental Quality Act (CEQA) Guidelines 15378(b)(2) because administrative activities do not constitute a “project”; therefore, no environmental review is required.

ATTACHMENT(S):

Resolution
Certificate of Completion
Notice of Completion
Item 6.a
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CITY OF HEALDSBURG
RESOLUTION NO. -2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG ACCEPTING AS COMPLETE THE
HEALDSBURG FIRE STATION 2024 REROOFING PROJECT

AND AUTHORIZING STAFF TO FILE A NOTICE OF

COMPLETION
WHEREAS, on January 21, 2025, the City Council conditionally awarded the Healdsburg Fire Station 2024 Reroofing Project (Project), to Contract West Roofing, in the amount of $147,700, with a contingency of $7,385; and
WHEREAS, on May 27, 2025, the Contractor finalized the Project in accordance with the contract documents to the satisfaction of the City; and WHEREAS, City staff have reviewed all the completed work and finds the work complete per the prepared plans and agreed upon change orders; and WHEREAS, accepting the Project as complete is an administrative action and therefore not defined as a “project” and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Title 14, the California Code of Regulations, Section 15378(b)(2).

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Healdsburg hereby:

1. Finds that continued administrative activity are exempt from CEQA and no further environmental review is necessary.

2. Accepts the Project as complete and authorizes staff to file a Notice of Completion with the County Recorder’s Office.

3. Authorizes staff to release any retention due and payable to Contract West Roofing thirtyfive (35) days after the recordation of the Notice of Completion subject to any retention requirements permitted by law.

PASSED, APPROVED AND ADOPTED, this 20th day of October 2025, by the following vote:

SO ORDERED: ATTEST:
________________________________ _________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
Item 6.a
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Item 6.a
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Recording Requested by:

Healdsburg City Clerk
When Recorded Return to:

Healdsburg City Clerk
401 Grove Street
Healdsburg, Ca. 95448

CITY OF HEALDSBURG

NOTICE OF COMPLETION
Project Title: Healdsburg Fire Station 2024 Reroofing Project Site Address or
Location: 601 Healdsburg Ave, Healdsburg CA 95448
Property Owner: City of Healdsburg
Address: 401 Grove Street, Healdsburg CA 95448
Nature of Owner’s
Interest Fire Station Roof
NOTICE IS HEREBY GIVEN THAT I, Tyler Kettmann, Central Services Manager of the City of Healdsburg, California, on September 29
th, 2025, did file with the City Clerk of the City
of Healdsburg, my Certificate of Completion of the following described work the contract for doing which was heretofore awarded to Contract West Roofing on January 21, 2025, in accordance with the City Clerk and approved by the City Council of said City; That said work and improvements were actually completed on May 27th, 2025; That acceptance of the said work and improvements was ordered by City Council Resolution No____ on October 20th, 2025.

That said work and improvements consisted of removal and replacement of the Fire Station roofing material as more specifically described in the plans and specifications approved by the City Council of the City of Healdsburg.

I, Tyler Kettmann, Central Services Manager of the City of Healdsburg do hereby certify, under penalty of perjury, that the foregoing is true and correct.

DATED:____________________ ATTEST:
_____________________________
Tyler Kettmann Raina Allan
Central Services Manager City Clerk
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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 20, 2025
SUBJECT: Surplus Vehicles and Equipment
PREPARED BY: Tyler Kettmann, Central Services Manager
STRATEGIC INITIATIVE(S):
- Effective & Efficient Government
- Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

Adopt a Resolution declaring various vehicles and equipment as surplus.

COMMUNITY ENGAGEMENT/OUTREACH:

Not Applicable.

BACKGROUND:

Staff have identified vehicles and equipment that have either been replaced, been made obsolete, or have outlived their useful life.

Chapter 3.24 of the Healdsburg Municipal Code ("Code") governing the surplus of property requires the City Council to declare any vehicle and equipment valued in excess of $500 as surplus prior to disposal of said equipment.

DISCUSSION/ANALYSIS:

City Vehicle 73 is a 2001 GMC 1500 pickup truck utilized by the Community Services Department. The vehicle is well beyond its expected useful life and was replaced with City Vehicle 321, which is a 2024 Ford Lightning pickup truck. Both the condition of Vehicle 73 and recent increased need for repairs make it an appropriate candidate to be declared surplus.

City Vehicle 14 is a 1997 GMC 1500 pickup truck utilized by the Community Services Department. The vehicle is well beyond its expected useful life and was replaced in City Vehicle 312, which is a 2024 Ford Lightning pickup truck. The age and current condition of Vehicle 14 make it an appropriate candidate to be declared surplus.

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City Vehicle 11 is a 2003 GMC 2500 pickup truck utilized by the Utilities (W/WW) Department.

The vehicle was replaced by City Vehicle 102, which is a 2023 Ford Lightning pickup truck. The age and condition of Vehicle 11 make it an appropriate candidate to be declared surplus.

City Vehicle 77 is a 2002 GMC 1500 pickup truck utilized by the Community Development Department. The vehicle was replaced by City Vehicle 100, which is a 2022 Ford Escape Plug-in Hybrid Vehicle. The age and condition of Vehicle 77 make it an appropriate candidate to be declared surplus.

City Vehicle 84 is a 1984 TORO GroundMaster zero turn mower utilized by the Community Services Department. The mower is well beyond its expected useful life and has failed beyond repair. Vehicle 84 was replaced in City Vehicle 302, which is a 2025 Toro ZMaster zero turn mower. The age and current condition of Vehicle 84 make it an appropriate candidate to be declared surplus.

Staff have determined that miscellaneous HVAC equipment purchased for City facilities is no longer of use to the City’s current operations and recommend declaring said items surplus.

Staff is requesting the City Council declare the vehicles and equipment listed below as surplus.

These assets have exceeded their useful life and have been replaced or removed from service.

VEHICLES:

VEHYR

VEHICLE
ID VIN LICENSE MAKE MODEL Estimated Value
1997 14 1GTEC14M2VZ538993 E044135 GMC 1500 $1,000.00
2001 73 1GTEK14V01Z278261 1091967 GMC 1500 $1,500.00
2003 11 1GTGC24U83Z258460 1133806 GMC 2500 $1,600.00
1984 84 50326 TORO GROUNDMASTER $500
2002 77 1GTEC14V027272698 1110429 GMC 1500 $1,500.00
EQUIPMENT:
(2) EKON 36” Under Cabinet Range Hood NAC01-36”
Estimated Value: $600
ENVIRONMENTAL STEWARDSHIP:

Not Applicable.

ALTERNATIVES:

The City Council may choose to take no action and retain the equipment and vehicles or designate Item 6.b
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an alternate use. In this case, staff requests additional direction.

FISCAL IMPACT:

The proposed action declares the vehicles and equipment surplus and authorizes the City Manager to initiate a sale, should it benefit the City. Proceeds from the vehicle sales will be considered revenue of the Vehicle Replacement Fund and the HVAC equipment sales will be considered revenue of the Building Maintenance Fund.

ENVIRONMENTAL ANALYSIS:

The approval of this resolution declaring vehicles and equipment as surplus and authorizing their disposal and sale is an administrative activity of the City that will not result in a direct or indirect physical change in the environment and thus is not a "project" subject to environmental analysis pursuant to the requirements of the California Environmental Quality Act (CEQA), as provided in State CEQA Guidelines Section 15378(b)(5), and therefore no environmental review or analysis is required.

ATTACHMENT(S):

Resolution
Item 6.b
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CITY OF HEALDSBURG
RESOLUTION NO. ____ - 2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG DECLARING VARIOUS VEHICLES AND

EQUIPMENT AS SURPLUS
WHEREAS, staff is requesting that the City Council declare the vehicles and equipment listed on the attached Exhibit A, as surplus; and
WHEREAS, the vehicles and equipment have exceeded their useful life and are obsolete, therefore having no further use to the City; and
WHEREAS, Healdsburg Municipal Code Section 3.24.10 grants the City Manager the authority to dispose of vehicles and equipment that have been declared surplus by the Council in a manner that shall best serve the interests of the City; and WHEREAS, proceeds from vehicle sales will be considered revenue of the Vehicle Replacement Fund and the equipment sales will be considered revenue of the Building Maintenance Fund; and
WHEREAS, the proposed action is an administrative activity of the City that will not result in direct or indirect physical changes to the environment.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Declares the vehicles and equipment listed on the attached Exhibit A, as surplus, and the City Manager shall have the authority to dispose of vehicles and equipment in whatever manner shall best serve the interests of the City.

2. Declaring vehicles and equipment as surplus and authorizing their disposal and sale is an administrative activity of the City that will not result in a direct or indirect physical change in the environment and thus is not a "project" subject to environmental analysis pursuant to the requirements of the California Environmental Quality Act (CEQA), as provided in State CEQA Guidelines Section 15378(b)(5).

PASSED, APPROVED AND ADOPTED this 20th day of October 2025, by the following vote:

SO ORDERED: ATTEST:
_________________________________ ___________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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EXHIBIT A
VEHICLES:

VEHYR

VEHICLE
ID VIN LICENSE MAKE MODEL Estimated Value
1997 14 1GTEC14M2VZ538993 E044135 GMC 1500 $1,000.00
2001 73 1GTEK14V01Z278261 1091967 GMC 1500 $1,500.00
2003 11 1GTGC24U83Z258460 1133806 GMC 2500 $1,600.00
1984 84 50326 TORO GROUNDMASTER $500.00
2002 77
1GTEC14V027272698 1110429
GMC 1500 $1,500.00
EQUIPMENT:
(2) EKON 36” Under Cabinet Range Hood NAC01-36”
Estimated Value: $600
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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 20, 2025
SUBJECT: Citrine Apartments Assignment and Assumption Agreement, Subordination Agreement, and Termination and Release
PREPARED BY: Stephen Sotomayor, Housing Director
STRATEGIC INITIATIVE(S):
- Expand Affordable Housing
- Provide Effective Governance
RECOMMENDED ACTION(S):

1. Adopt a Resolution approving the Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with Citrine Preservation Limited Partnership for the Citrine Apartments and authorizing the City Manager to execute the Agreement.

2. Adopt a Resolution approving a Subordination Agreement for Regulatory Agreement between the City of Healdsburg and Citrine Preservation Limited Partnership, for the benefit of Berkadia Commercial Mortgage LLC and authorizing the City Manager to execute the Agreement.

3. Adopt a Resolution approving a Termination and Release Agreement and authorizing the City Manager to execute the Agreement.

COMMUNITY ENGAGEMENT/OUTREACH:

This item will be considered at a public meeting where time will be provided for public comment.

BACKGROUND:

In 2016, Seaview Investors, LLC applied to the City for approval of a mixed-use development at 110 Dry Creek Road and 1260 Grove Street. The project included a hotel and a 37-unit affordable rental housing development, now known as the Citrine Apartments. A special purpose entity formed by Seaview Investors, LLC- SVI MFH, LLC, a Delaware limited liability company (“SVI”) took title to the property.

On June 5, 2017, the City and SVI entered into an Affordable Housing Agreement (“City Regulatory Agreement”) and Declaration of Restrictive Covenants (“Covenant”). The City Item 6.c
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Regulatory Agreement established a 55-year affordability covenant requiring that eight (8) units be restricted to households at or below 80% AMI and twenty-nine (29) units be restricted to households at or below 120% AMI.

On April 9, 2025, SVI entered into a Purchase and Sale Agreement with Transcend Group LLC, a California limited liability company (“Transcend”). Transcend intends to assign the Purchase and Sale Agreement to Citrine Preservation Limited Partnership, a California limited partnership (“Citrine Preservation”). Citrine Preservation will take title to the property at closing. The managing general partner of Citrine Preservation is Citrine GP LLC and the limited partner is Transcend Preservation LLC. Both LLC’s are affiliated with Transcend Group LLC. Citrine GP LLC plans to withdraw as managing general partner and Retail Store Employees Building Corporation, a California nonprofit public benefit corporation affiliated with United Food and Commercial Workers Local 5, plans to replace it as managing general partner.

The purchaser intends to preserve the property’s affordability while utilizing the California Municipal Finance Authority’s (“CMFA”) Charitable Housing Program as a part of their financing. To assign the City Regulatory Agreement to a new owner, the property owner must obtain City’s consent. As part of the financing structure, CMFA requires Citrine Preservation to execute a regulatory agreement. Berkadia Commercial Mortgage LLC, a Delaware limited liability company (“Berkadia”) also requires Citrine Preservation and City to execute a Subordination Agreement.

DISCUSSION/ANALYSIS:

Citrine Apartments Description
The Citrine Apartments, located at 1260 Grove Street, consists of thirty-seven (37) deed-restricted affordable residential units subject to a 55-year affordability covenant. The development includes a mix of one-, two-, and three-bedroom units to serve a variety of household sizes. • Eight (8) units are designated for low-income households (≤80% AMI) • Twenty-nine (29) units are designated for moderate-income households (≤120% AMI) Rents at the Citrine Apartments are established annually in accordance with State income limits and the City Regulatory Agreement, ensuring affordability for households at or below 80% and 120% of Area Median Income.

Current rents generally range from approximately $1,945 to $2,895, depending on unit size and household income, and are typically lower than the maximum allowable rent limits once utility allowances are applied.

Overview of the Transaction
The Citrine Apartments are proposed to be transferred from the current owner, SVI, to Citrine Preservation. Citrine Preservation will partially finance the acquisition through the CMFA Charitable Housing Program and private financing originated by Berkadia. The private financing will be assigned to Federal Home Loan Mortgage Corporation (“Freddie Mac”).

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To complete the transaction, City approval of three (3) agreements is required:

1. Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (“Assignment”) – transferring the City Regulatory Agreement to Citrine Preservation as the new owner, ensuring that Citrine Preservation expressly agrees to abide by the terms of the City Regulatory Agreement.

2. Subordination Agreement –Regulatory Agreement Only – required by Berkadia; this agreement places the lender’s security interest ahead of the City’s Regulatory Agreement and limits City’s rights and remedies, but preserves core affordability provisions, including income restrictions and rent limitations.

3. Termination and Release Agreement (“Release”) – releasing the Covenant from title and confirming that the Covenant already terminated by its terms upon issuance of a certificate of occupancy in 2018.

As part of the CMFA Charitable Housing Program, Citrine Preservation intends to apply for a welfare property tax exemption under California Revenue & Taxation Code Section 214(g). This exemption is a standard financing tool used in affordable housing preservation projects and applies only to the units restricted to households at or below 80% of Area Median Income (AMI). The welfare exemption requires federal, state, or local financing and a recorded regulatory agreement with the agency providing the financing.

Berkadia also requires that Citrine Preservation and Berkadia enter into a Multifamily Loan and Security Agreement and that Citrine Preservation sign a Multifamily Note, a Multifamily Deed of Trust, a Guaranty, an Assignment of Security Instrument, an Omnibus Assignment, and Assignment of Management Agreement and Subordination of Management Fees.

City’s Procedures on Assignments
When an affordable housing project subject to a City Regulatory Agreement is sold or transferred, the City must approve the assignment to ensure continuity of obligations. Under standard practice, this includes:
• Verification that the new owner accepts and assumes all terms of the existing regulatory agreement;
• Confirmation that affordability covenants and tenant protections remain binding for the full covenant term;
• Review of any proposed amendments to affordability mix or compliance provisions; and • Evaluation of lender subordination requests to balance project financing needs with the City’s enforcement rights.

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The City Regulatory Agreement in this case allows City to consent to an assignment if:
• The proposed assignee has the qualifications, experience and financial resources to competently manage the Project and fulfill the obligations under the City Regulatory Agreement;
• The proposed assignee has submitted and City has approved reasonable documentation of the transferee’s qualifications per City’s reasonable requests and all agreements proposed to effectuate any transfer;
• By a recordable, written agreement approved by City, assignee assumes all rights and obligations of the party originally named as Developer under the City Regulatory Agreement and the conditions of approval.

The City Manager has discretion to refer a proposed assignment of the City Regulatory Agreement to the City Council for approval. In routine transactions, assignments are largely administrative.

For this specific transaction, the City Manager exercised his discretion to obtain City Council approval of the necessary agreements prior to executing them because this transaction involves a new CMFA regulatory agreement that will result in a change to the unit affordability mix and a subordination of the City Regulatory Agreement to Berkadia’s loan.

Purchaser Qualifications and Capacity
City staff reviewed the purchaser’s organizational background and proposed financing (“capital stack”) as part of the due diligence process. The buyer, Citrine Preservation Limited Partnership, is a joint venture between The Transcend Group (TTG) and the Retail Store Employees Building Corporation (RSEBC), a 501(c)(3) nonprofit formed in 1971 to provide housing for low- and moderate-income households in Northern California.

TTG’s principals have over 50 years of combined experience in the acquisition and preservation of income-restricted housing nationwide. The financing structure includes Freddie Mac permanent debt, equity from RSEBC, and participation in the CMFA Charitable Housing Program.

Staff reviewed the purchaser’s materials and found the ownership and financing approach to be typical for affordable housing preservation transactions and capable of maintaining the long-term affordability of the Citrine Apartments
Considerations
Proposed Affordability Mix Change
Under the proposed CMFA regulatory agreement, the affordability mix for Citrine Apartments is proposed to shift as follows:

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Income Category Current
Requirement
Proposed Change
(CMFA)
Net
Change
≤80% AMI (Low-Income) 8 units 15 units +7 units
≤120% AMI (ModerateIncome) 29 units 22 units –7 units
Total Units 37 37 0
Citrine Preservation proposes to increase the number of low-income units (≤80% AMI) from 8 to 15 and decrease the moderate-income units (≤120% AMI) from 29 to 22. This results in a deeper affordability profile overall but reduces the number of moderate-income (81–120% AMI) units, which has been a longstanding Council priority.

The change in the affordability mix has been reviewed by housing staff, and the following has been determined:
• The proposed change does not affect the City’s past or current Regional Housing Needs Allocation (RHNA) obligations. These units were counted toward the 5th Cycle RHNA, and the reduction in AMI will not apply toward the current 6th Cycle because the units were already deed restricted.
• The City Regulatory Agreement contemplated that state or federal agreements in the future may impose stricter affordability requirements. If so, such stricter requirements prevail. • Under the City Regulatory Agreement, units designated for households at 120% of AMI may be rented to any household at or below that threshold. • In practice, approximately 70 percent of current tenants are already at or below 80 percent of area median income, including an estimated 17 of the 29 moderate-income units. Historically, between 60 and 80 percent of all units have been occupied by households within the 80 percent income range.
• The proposed change is not anticipated to result in tenant displacement, as the CMFA regulatory agreement allows households to remain in place so long as their income does not exceed 140% of the income limit for a household with income at 80% of AMI. Most current tenants already fall below 80% of AMI.

Based on this analysis, housing staff concludes that the shift in the affordability mix will have little impact on the overall project and remains consistent with current market needs and the income levels of existing tenants.

Subordination Agreement
As part of the private financing, the lender (Berkadia) requires that the City subordinate the City Regulatory Agreement to the lender’s deed of trust. Through negotiations, the lender has agreed Item 6.c
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to preserve several of the City’s core protections, including the provisions listed below. These provisions will remain enforceable and are not subordinated. • The 55-year affordability covenant- in other words, the requirement that the units only be rented to eligible households under the City Regulatory Agreement or households eligible under any stricter regulatory agreement with another government agency; • The condominium conversion prohibition during the 55-year term; • Local preference requirements;
• The requirement to accept tenants receiving Section 8 assistance; • The requirement to provide City annual reports and income recertifications; and • Non-discrimination provisions.

The limitations are:
• Amending the City Regulatory Agreement requires consent from the lender; • If the property is foreclosed, amounts owed to the City under the City Regulatory Agreement cannot be collected until after the Berkadia loan is repaid; • In the event of foreclosure or deed in lieu of foreclosure, City will no longer be able to review and approve potential future owners of the property, future property managers, marketing and management plans;
• In the event of foreclosure or deed in lieu of foreclosure, City will no longer be able to enforce the rent-differential damages remedy, meaning the ability to recover the difference between affordable and market rent if a unit is improperly rented to an ineligible household; • As long as the property is subject to the Berkadia loan, City will not be able to exercise the rent-differential damages remedy- or any other remedy- without the lender’s prior written consent if exercising the remedy may materially adversely impact the lender’s security (meaning, the value of the property);
• As long as the property is subject to the Berkadia loan, City must seek Berkadia’s consent before exercising the City’s right under the Regulatory Agreement to select a property manager if the property owner fails to operate the property as required in the Regulatory Agreement;
• City will receive the minimum amount of notice of a foreclosure sale that California law requires for nonpayment, failing to have the insurance required under the Berkadia Multifamily Loan and Security Agreement, and certain other specified defaults, and 30 Item 6.c
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days’ notice for other defaults under the Berkadia Multifamily Loan and Security Agreement (which is the same amount of time the property owner receives under the Berkadia Multifamily Loan and Security Agreement);
While this reduces the City’s financial enforcement tools, it does not affect the ability to enforce affordability through injunctive relief or specific performance. Additionally, the 55-year affordability covenant and local preference remain enforceable under the conditions of approval.

Importantly, this subordination framework is standard in Freddie Mac program loans and is not unique to the Citrine Apartments transaction and Berkadia and Freddie Mac will not modify these terms.

Welfare Exemption
As part of the financing structure, the purchaser intends to utilize the California Municipal Finance Authority’s (CMFA) Charitable Housing Program, which enables eligible projects to seek a property tax exemption under the welfare exemption provisions of California law (Revenue & Taxation Code §214 et seq.).

Approval of this transaction will result in the loss of a portion of the property tax revenue currently generated by the Citrine Apartments. Staff estimates the City’s share of property tax revenue from the project to be approximately $15,000 annually; however, the welfare exemption would apply only to the units restricted at or below 80 percent of area median income, resulting in a partial reduction rather than a full loss.

The actual amount of foregone revenue will vary each year based on the number of qualifying units, as determined through the annual exemption process with the Sonoma County Assessor and the California Board of Equalization.

Conclusion and Recommendation
The proposed agreements preserve the 55-year affordability covenant at Citrine Apartments, while allowing the purchaser to obtain state financing and standard financing from Freddie Mac. Key protections such as local preference, Section 8 acceptance, non-discrimination, and the condominium conversion prohibition remain in place.

The change in affordability mix does not affect the City’s RHNA obligations, and most existing tenants already qualify at or below the 80 percent AMI level, minimizing the risk of displacement.

While the City will not be able to collect monetary damages in the unlikely event of foreclosure or bankruptcy, the affordability restrictions remain enforceable through specific performance and injunctive relief, and this framework is standard in Freddie Mac transactions.

Staff recommends approval of the Assignment and Assumption Agreement, the Subordination Agreement, and the Release, recognizing that they are reasonable, customary, and preserve the City’s essential protections while ensuring the long-term affordability of the Citrine Apartments.

ENVIRONMENTAL STEWARDSHIP:

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Not applicable.

ALTERNATIVES:

1. Deny approval. City Council may choose not to approve the agreements. This could prevent the transaction from moving forward under the proposed financing structure and may jeopardize the purchaser’s ability to complete the transfer.

2. Request modifications. City Council may direct staff to negotiate further changes, but the lender and purchaser have indicated limited flexibility, and further delay may lead the current owner to walk away from the transaction with Citrine Preservation.

FISCAL IMPACT:

The City’s share of property tax revenue from the Citrine Apartments is estimated at approximately $15,000 annually. As part of the CMFA Charitable Housing Program, the purchaser intends to apply for a welfare property tax exemption. If granted, the exemption would apply proportionally to the units restricted at or below 80 percent of Area Median Income (AMI)—15 of the project’s 37 units under the proposed mix—reducing the property tax revenue currently generated by the project.

The actual amount of foregone revenue is determined annually by the Sonoma County Assessor and the California Board of Equalization, based on the number of qualifying units.

Under state law, the potential loss of property tax revenue cannot be used as a basis for approving or denying the transfer, nor can the City condition approval on receiving payments in lieu of taxes.

ENVIRONMENTAL ANALYSIS:

Approval of the Assignment and Assumption Agreement, Subordination Agreement, and the Release does not constitute a “project” under the California Environmental Quality Act (CEQA), as defined in Section 15378 of the CEQA Guidelines, because the action involves only administrative and financial agreements related to the transfer of ownership of an existing multifamily residential property. Even if considered a project, the action is exempt under CEQA Guidelines Section 15061(b)(3), the “common sense” exemption, as it can be seen with certainty that there is no possibility the activity will have a significant effect on the environment.

ATTACHMENT(S):

1. Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants

2. Termination and Release Agreement (for the Covenant)

3. Subordination Agreement for Regulatory Agreement

4. Resolutions
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4923-5942-9999 v2

CITY OF HEALDSBURG
RESOLUTION NO. _______-2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING THE ASSIGNMENT AND

ASSUMPTION OF AN AFFORDABLE HOSUING

REGULATORY AGREEMENT AND DECLARATION OF

RESTRICTIVE COVENANTS WITH CITRINE

PRESERVATION LIMITED PARTNERSHIP FOR THE

CITRINE APARTMENTS AND AUTHORIZING THE CITY

MANAGER TO EXECUTE THE AGREEMENT
WHEREAS, on June 5, 2017, the City of Healdsburg entered into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with SVI MFH, LLC (the “2017 Regulatory Agreement”), establishing affordability restrictions for the 37-unit affordable housing complex known as Citrine Apartments at 1260 Grove Street (the “Complex”); and WHEREAS, on April 9, 2025, SVI MFH, LLC entered into a Purchase and Sale Agreement with Transcend Group LLC, and Transcend Group LLC intends to assign its rights and obligations as the purchaser thereunder to Citrine Preservation Limited Partnership, a California limited partnership (the “Purchaser”); and
WHEREAS, as part of the transfer, the Purchaser has requested that the City consent to the assignment of the 2017 Regulatory Agreement, whereby Purchaser will assume all obligations thereunder and continuing the 55-year affordability covenant; and WHEREAS, it is in the best interest of the City of Healdsburg to allow Purchaser, which is a limited partnership where the general partners are Retail Store Employees Building Corporation, a California nonprofit public benefit corporation and an affiliate of Transcend Group LLC, to purchase, own and manage the Complex because the general partners have the experience, resources and qualifications necessary to competently manage and operate the Complex; WHEREAS, City has reviewed the loan documents and proposed CMFA Regulatory Agreement associated with the proposed assignment to the Purchaser; WHEREAS, the proposed CMFA Regulatory Agreement and associated change in the unit mix does not conflict with the City’s affordable housing policy goals; WHEREAS, it is in the best interest of the City of Healdsburg and its residents to ensure that affordability restrictions remain enforceable, and that any transfer of ownership preserve the City’s rights and tenant protections.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Healdsburg as follows:

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1. The City Council hereby finds and determines that Citrine Preservation Limited Partnership has the experience, resources and qualifications necessary to competently manage and operate the Complex and it is in the best interest of the City to approve the Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with Citrine Preservation Limited Partnership.

2. The City Council hereby approves the Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants and authorizes and directs the City Manager to execute the agreement, in a form approved by the City Attorney, and to take all necessary actions to complete the transaction.

PASSED AND ADOPTED by the City Council of the City of Healdsburg, this 20th day of October, 2025, by the following vote:

SO ORDERED: ATTEST:
__________________________________ __________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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4899-6081-2399 v2

CITY OF HEALDSBURG
RESOLUTION NO. _______-2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING A SUBORDINATION

AGREEMENT FOR REGULATORY AGREEMENT BETWEEN

THE CITY OF HEALDSBURG AND CITRINE

PRESERVATION LIMITED PARTNERSHIP FOR THE

BENEFIT OF BERKADIA COMMERCIAL MORTGAGE LLC

AND AUTHORIZING THE CITY MANAGER TO EXECUTE

THE AGREEMENT
WHEREAS, on June 5, 2017, the City of Healdsburg entered into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with SVI MFH, LLC (the “2017 Regulatory Agreement”) for the 37-unit Citrine Apartments at 1260 Grove Street; and WHEREAS, on April 9, 2025, SVI MFH, LLC entered into a Purchase and Sale Agreement with Transcend Group LLC, and Transcend Group LLC intends to assign its rights and obligations as the purchaser thereunder to Citrine Preservation Limited Partnership, a California limited partnership (the “Purchaser”); and
WHEREAS, the Purchaser intends to obtain permanent financing from Berkadia Commercial Mortgage LLC (“Berkadia”), and Berkadia will assign the loan documents to Federal Home Loan Mortgage Corporation (“Freddie Mac”);
WHEREAS, Berkadia requires that the City subordinate the 2017 Regulatory Agreement to Berkadia’s deed of trust; and
WHEREAS, through negotiation, Berkadia has agreed to a partial subordination where the key provisions of the City’s Regulatory Agreement will remain in effect and enforceable even after a foreclosure, including the 55-year affordability covenant, income and rent restrictions, the annual reporting and income recertification requirements, the prohibition on condominium conversion, local preference requirements, acceptance of tenants receiving Section 8 assistance, and nondiscrimination provisions; and WHEREAS, although subordination will cause all provisions except those described above to terminate upon foreclosure, and at all times limit the City’s ability to exercise its rights and remedies under the 2017 Regulatory Agreement such as the right to require the property owner to pay the difference between any improperly collected market rate rents and the required affordable rental rate, the City’s core affordability protections remain enforceable through equitable remedies; and
WHEREAS, the Subordination Agreement is similar to an amendment because it effectively modifies or removes terms of the 2017 Regulatory Agreement, is part of the larger Item 6.c
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proposed assignment to the Purchaser that City Council has been asked to approve, and the Subordination Agreement is the document that most impacts the City’s rights; and WHEREAS, by Resolution No. ____, the City found that the proposed assignment to Purchaser was in the best interest of the City;
WHEREAS, the City Council finds that Freddie Mac and Berkadia customarily require subordination on these terms and that it is necessary to facilitate the Purchaser’s financing to purchase the Citrine Apartments.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Healdsburg as follows:

1. The City Council finds and determines that it is in the best interest of the City to approve the Subordination Agreement for Regulatory Agreement between the City of Healdsburg and Citrine Preservation Limited Partnership, for the benefit of Berkadia Commercial Mortgage LLC for the Citrine Apartments at 1260 Grove Street.

2. The City Council approves the Subordination Agreement and authorizes and directs the City Manager to execute the agreement, in a form approved by the City Attorney, and to take all actions necessary to complete the transaction.

PASSED AND ADOPTED by the City Council of the City of Healdsburg, this 20th day of October, 2025, by the following vote:

SO ORDERED: ATTEST:
__________________________________ ___________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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4912-6969-7391 v2

CITY OF HEALDSBURG
RESOLUTION NO. _______-2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING A TERMINATION AND

RELEASE AGREEMENT AND AUTHORIZING THE CITY

MANAGER TO EXECUTE THE AGREEMENT
WHEREAS, on June 5, 2017, the City of Healdsburg entered into a Declaration of Restrictive Covenants with SVI MFH, LLC (the “2017 Covenant”) for the 37-unit affordable housing apartment complex known as Citrine Apartments on the property located at 1260 Grove Street and identified as Assessor Parcel Number 089-082-034 (the “Property”); and WHEREAS, on April 9, 2025, SVI MFH, LLC entered into a Purchase and Sale Agreement with Transcend Group LLC, and Transcend Group LLC intends to assign its rights and obligations as the purchaser thereunder to Citrine Preservation Limited Partnership, a California limited partnership; and
WHEREAS, the 2017 Covenant states that it terminates upon issuance of a certificate of occupancy for the 37-unit affordable housing apartment complex or recordation of an affordable housing agreement, whichever is later;
WHEREAS, the City issued the certificate of occupancy on December 11, 2018 and recorded an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants on June 16, 2017;
WHEREAS, as part of the sale of the property, Transcend Group LLC has requested that the City terminate the 2017 Covenant to confirm that the 2017 Covenant terminated by its terms upon the issuance of the certificate of occupancy and to remove it from title to the Property; and WHEREAS, the City’s affordability protections, including the 55-year affordability covenant and core tenant protections, will remain in place and enforceable.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Healdsburg as follows:

1. The City Council finds and determines that it is in the best interest of the City to approve the Termination and Release Agreement for the Citrine Apartments.

2. The City Council approves the Termination and Release Agreement and authorizes and directs the City Manager to execute the agreement, in a form approved by the City Attorney, and to take all actions necessary to complete the transaction.

PASSED AND ADOPTED by the City Council of the City of Healdsburg, this 20th day of October, 2025, by the following vote:

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SO ORDERED: ATTEST:
__________________________________ ___________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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4907-5989-0005 v4 1
Chicago Title Company #15000570

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Healdsburg
Attn: City Clerk
401 Grove Street
Healdsburg, CA 95448
SPACE ABOVE THIS LINE FOR RECORDER’S USE ONLY
APN 089-082-034-000

ASSIGNMENT AND ASSUMPTION OF AFFORDABLE HOUSING REGULATORY

AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS

THIS ASSIGNMENT AND ASSUMPTION OF AFFORDABLE HOUSING REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (“Assignment”) is entered into as of the __ day of ______, 20___ (the “Assignment Date”) by and among SVI MFH, LLC, a Delaware limited liability company (“Assignor”), CITRINE PRESERVATION LIMITED PARTNERSHIP, a California limited partnership (“Assignee”), and the CITY OF HEALDSBURG, a California municipal corporation (“City”) (each individually a “Party” and collectively the “Parties”).

RECITALS
A. Assignor and the City have entered into that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of June 5, 2017 which was recorded in the Official Records of the Office of the Sonoma County Recorder (“Official Records”) on June 16, 2017 as Instrument No. 2017047112 (“Affordable Housing Agreement”).

B. Assignor is the fee owner of the real property located within the City of Healdsburg, County of Sonoma, State of California, as further described in Exhibit A attached hereto and incorporated herein by reference which constitutes the “Property” as defined in the Affordable Housing Agreement and is the “Developer” as defined in the Affordable Housing Agreement.

C. Assignor desires to transfer its interest in the Property to Assignee concurrently with execution of this Assignment, and Assignee desires to so acquire such interest in the Property from Assignor.

D. Assignor now desires to assign its interests, rights, duties and obligations under the Affordable Housing Agreement to Assignee, and Assignee desires to assume such interests, rights, duties and obligations from Assignor.

NOW, THEREFORE, in exchange for the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

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AGREEMENT
The introductory paragraph, the Recitals, and all defined terms set forth therein are hereby incorporated into this Assignment as if hereinafter fully and completely rewritten.

1. Defined Terms. Capitalized terms not otherwise defined in this Assignment are as defined in the Affordable Housing Agreement.

2. Assignment and Assumption of Interest. Assignor hereby transfers, assigns and conveys to Assignee, all of Assignor’s right, title and interest in and to, and the obligations, duties, responsibilities, conditions and restrictions under, the Affordable Housing Agreement arising after the Assignment Date and all obligations of Developer arising prior to the Assignment Date. By accepting this assignment, Assignee, for itself and its successors and assigns, hereby expressly and unconditionally accepts the foregoing assignment, assumes the Affordable Housing Agreement, and expressly agrees for the benefit of City, to pay, perform and discharge all obligations of Assignor under the Affordable Housing Agreement and the “Conditions of Approval – Multi-Family” approved November 15, 2016, as modified on March 2, 2017 with respect to the development of a multifamily rental housing development on the Property consisting of thirty-seven (37) residential units and related improvements, to comply with all covenants and conditions of Assignor arising from or under the Affordable Housing Agreement, and to comply with all covenants, conditions, representations and warranties of Assignee under this Agreement.

3. Substitution of Assignor. Assignee hereafter shall be substituted for and replace Assignor in the Affordable Housing Agreement and thus whenever the term “Developer” appears in the Affordable Housing Agreement, it shall hereafter mean Assignee.

4. Assignor and Assignee Agreements, Indemnifications and Waivers. (a) Assignor represents and warrants as follows:
(i) Affordable Housing Agreement. The Affordable Housing Agreement is unmodified and in full force and effect, and the City has not agreed to any amendment of any provision of the Affordable Housing Agreement. (ii) No Defaults. To the actual knowledge of Assignor, no default on the part of City, and no breach, event, or failure of condition that, with notice or lapse of time or both, would constitute a default on the part of City, exists under the Affordable Housing Agreement.
(iii) No Set-Offs. To the actual knowledge of Assignor, there are no setoffs or defenses against the enforcement of any right or remedy, or any duty or obligation, of the City or Assignor under the Affordable Housing Agreement. (iv) Conveyance of Title. As of the Assignment Date, Assignor is conveying fee title to the Property to Assignee.
(b) Assignee represents and warrants as follows:
(i) Assignee is Citrine Preservation Limited Partnership, a California limited partnership.

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(ii) Assignee represents and warrants that, as of the Assignment Date, Assignee:
(A) Is acquiring fee title to the Property from Assignor; (B) Is duly organized and validly existing under the laws of the State of California;
(C) Is qualified and authorized to do business in the State of California and has duly complied with all requirements pertaining thereto; and
(D) Is in good standing and has all necessary powers under the laws of the State of California to own, lease or control property and in all other respects enter into and perform the undertakings and obligations of this.
(c) Assignee further represents and warrants:
(i) That no approvals or consents of any persons are necessary for the execution, delivery or performance of this Assignment by Assignee, except as have been obtained;
(ii) That the execution and delivery of this Assignment and the performance of the obligations of Assignee have been duly authorized by all necessary actions and approvals required;
(iii) That this Assignment is a legal, valid, and binding obligation of Assignee enforceable in accordance with its terms;
(iv) That the execution, delivery, and performance of this Assignment by the Assignee does not and will not materially conflict with, or constitute a material violation or material breach of, or constitute a default under (a) the formation agreements of the Assignee (if any), (b) any law, rule, or regulation binding upon or applicable to Assignee, or (c) any material agreements to which Assignee is a party; and
(v) That Assignee or any person or entity owning or operating the Property, has duly obtained and maintained, or will duly obtain and maintain, all licenses, permits, consents, and approvals required by all applicable governmental authorities to develop, sell, lease, own, and operate Affordable Housing Units on the Property.
(d) Assignor and Assignee each hereby waives and releases, and Assignee hereby agrees to indemnify and hold City harmless, from any and all damages, liabilities, causes of action, claims or potential claims against City (including attorneys’ fees and costs) arising out of or resulting from the assignment and assumption of the Affordable Housing Agreement.
(e) Assignor acknowledges and agrees that the Affordable Housing Agreement has been fully assigned to Assignee by this Assignment and, accordingly, that Item 6.c
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Assignee shall have the exclusive right to assert any claims against City with respect to the Affordable Housing Agreement. Accordingly, without limiting any claims of Assignee under the Affordable Housing Agreement, Assignor hereby waives any claims or potential claims by Assignor against City to the extent arising solely out of the Affordable Housing Agreement.

5. City Estoppel Provisions. The City hereby represents and warrants to the Assignor and Assignee as follows:
(a) To the extent necessary pursuant to the Affordable Housing Agreement or any document related thereto, City has approved the transfer of the Property to Assignee. (b) The Affordable Housing Agreement is unmodified and in full force and effect, and the City has not agreed to any amendment of any provision of the Affordable Housing Agreement.
(c) To the actual knowledge of City, no default on the part of Assignor, and no breach, event, or failure of condition that, with notice or lapse of time or both, would constitute a default on the part of Assignor, exists under the Affordable Housing Agreement. (d) To the actual knowledge of City, there are no set-offs or defenses against the enforcement of any right or remedy, or any duty or obligation, of the City or Assignor under the Affordable Housing Agreement.

6. Governing Law; Venue. This Assignment shall be interpreted and enforced in accordance with the laws of the State of California without regard to principles of conflicts of laws.

Any action to enforce or interpret this Assignment shall be filed and litigated exclusively in the Superior Court of Sonoma County, California.

7. Entire Agreement/Amendment. This Assignment constitutes the entire agreement among the Parties with respect to the subject matter hereof, and supersedes all prior written and oral agreements with respect to the matters covered by this Assignment. This Assignment may not be amended except by an instrument in writing signed by each of the Parties.

8. Further Assurances. Each Party shall execute and deliver such other certificates, agreements and documents and take such other actions as may be reasonably required to consummate or implement the transactions contemplated by this Assignment and the Affordable Housing Agreement.

9. Benefit and Liability. Subject to the restrictions on transfer set forth in the Affordable Housing Agreement, this Assignment and all of the terms, covenants, and conditions hereof shall extend to the benefit of and be binding upon the respective successors and permitted assigns of the Parties.

10. Attorneys’ Fees. In the event of any litigation pertaining to this Assignment, the losing Party shall pay the prevailing Party’s litigation costs and expenses, including without limitation reasonable attorneys’ fees.

11. Recordation. Assignor shall cause this Assignment to be recorded in the Official Records of Sonoma County concurrently with the conveyance of title to the Property from Item 6.c
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Assignor to Assignee, and shall promptly provide conformed copies of the recorded Assignment to City and Assignee.

12. Address for Notices. Assignee’s address for notices, demands and communications under the Affordable Housing Agreement is as follows:

Citrine Preservation Limited Partnership
601 Cypress Ave., Suite 301
Hermosa Beach, CA 90254
Attn: Charles Treatch

13. Captions; Interpretation. The section headings used herein are solely for convenience and shall not be used to interpret this Assignment. The Parties acknowledge that this Assignment is the product of negotiation and compromise on the part of all Parties, and the Parties agree, that since all have participated in the negotiation and drafting of this Assignment, this Assignment shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if all Parties had prepared it.

14. Severability. If any term, provision, condition or covenant of this Assignment or its application to any Party or circumstances shall be held by a court of competent jurisdiction, to any extent, invalid or unenforceable, the remainder of this Assignment, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law unless the rights and obligations of the Parties have been materially altered or abridged thereby.

15. Counterparts. This Assignment may be executed in counterparts, each of which shall, irrespective of the date of its execution and delivery, be deemed an original, and the counterparts together shall constitute one and the same instrument.

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4907-5989-0005 v4 S-1
IN WITNESS WHEREOF the Parties have executed this Assignment as of the date first set forth above.

ASSIGNOR:

SVI MFH, LLC,
a Delaware limited liability company
By: ____________________________
Name:

Title:

ASSIGNEE:

CITRINE PRESERVATION LIMITED PARTNERSHIP,
a California limited partnership
By: Citrine AGP LLC, a California limited liability company, its Administrative General Partner
By: ____________________________________
Charles Treatch, Manager
By: ____________________________
Nicholas Tufano, Manager
CITY:

CITY OF HEALDSBURG,
a California municipal corporation
By: ____________________________
Name: Jeff Kay
Title: City Manager
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A Notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) SS.

COUNTY OF )
On , before me, , a Notary Public in
and for said State, 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(ies) 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 [SEAL]
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A Notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) SS.

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

STATE OF CALIFORNIA )
) SS.

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 [SEAL]
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EXHIBIT A

DESCRIPTION OF PROPERTY
The real property situated in the City of Healdsburg, County of Sonoma, State of California, described as follows:

Lot 1, as shown on the map entitled "PARCEL MAP LANDS OF SVI HEALDSBURG, LLC", filed for record in the County Recorder of said County, State of California, in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records.

APN: 089-082-034-000
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1 4919-2589-9353 v3

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Manager

EXEMPT FROM RECORDING FEES
PER GOVERNMENT CODE §§6103,
27383

EXEMPT FROM DOCUMENTARY
TRANSFER TAX; REV & TAX CODE
§§11911, 11922
Space above this line for Recorder’s use.

TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (this “Agreement”) is dated as of ______________, 2025, by and between the City of Healdsburg, a municipal corporation (the “City”), and SVI MFH, LLC, a Delaware limited liability company (“SVI”). City and SVI are collectively referred to herein as the “Parties.”
A. SVI is the owner of the real property located at 1260 Grove Street in the City of Healdsburg, California, known as Sonoma County Assessor’s Parcel No. 089-082-034, and more particularly described in Exhibit A attached hereto (the “Property”).

B. On March 2, 2017, the City Planning Commission approved Revised Conditions of Approval for development of an affordable multifamily rental housing complex with thirtyseven (37) units, as proposed by an entity affiliated with SVI (“Project”). The Revised Conditions of Approval required recordation of a Declaration of Restrictive Covenants that would (i) require the Property not to be developed for any purpose other than the operation of an affordable multifamily housing development; (ii) require that any development contain thirtyseven (37) units, eight (8) of which would be rented to households with income at or below 80% AMI and twenty nine (29) of which would be rented to households with income at or below 120% of AMI (“Affordability Restrictions”); and (iii) terminate when a final certificate of occupancy for the Project issued.

C. The Parties entered into a Declaration of Restrictive Covenants dated June 5, 2017 by and between City and SVI, which was recorded on June 16, 2017 as Instrument Number 2017047111 (“Declaration”). The Parties also entered into an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants by and between City and SVI dated June 5, 2017 (“Affordable Housing Agreement”). The Affordable Housing Agreement became effective upon the issuance of a certificate of occupancy for the Project on December 11, 2018.

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D. As set forth herein, the Parties desire to terminate, release and reconvey the Declaration.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Recitals. The Parties acknowledge the truth of the foregoing Recitals which are incorporated into this Agreement by this reference.

2. Release. The City and SVI hereby release the Property from the encumbrance of the Declaration.

3. No Effect on Affordable Housing Agreement. The Parties further acknowledge and agree that this Agreement does not modify or have any effect on the Affordable Housing Agreement. The Property shall remain subject to Affordability Restrictions pursuant to the Affordable Housing Agreement.

4. Recordation. This Agreement shall be recorded in the Official Records of Sonoma County.

5. Counterparts. This Agreement may be executed in counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

SIGNATURES ON FOLLOWING PAGE(S).

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IN WITNESS WHEREOF, the Parties have executed this Termination and Release Agreement as of the date first written above.

CITY:

CITY OF HEALDSBURG, a California
municipal corporation
By: ___________________________
Jeff Kay, City Manager
Attest:

By:_____________________________
Raina Allan, City Clerk
Approved as to form:

By:____________________________
Samantha W. Zutler, City Attorney
SVI:

SVI MFH, LLC,
a Delaware limited liability company
By: ___________________________
Name: _________________________
Its: ____________________________
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ACKNOWLEDGMENT
State of California )
) ss
County of ___________ )
On , before me,___________________________________________, (Name of Notary)
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 Signature)
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.

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5 4919-2589-9353 v3

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

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Exhibit A

PROPERTY
Real property in the City of Healdsburg, County of Sonoma, State of California, described as follows:

PARCEL 1:

Lot 1, as shown on the map entitled “PARCEL MAP LANDS OF SVI HEALDSBURG, LLC”, filed for record in the County Recorder of said County, State of California, in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records.

APN: 089-082-034-000
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32423230-v5
Prepared by, and after recording
return to:

Robinson & Cole LLP
One State Street
Hartford, CT 06103
Attention: Kathryn Mullin, Esq.

Freddie Mac Loan Number: 510884598
Property Name: Citrine Apartments

SUBORDINATION AGREEMENT - REGULATORY AGREEMENT ONLY

GOVERNMENTAL ENTITY
(NO SUBORDINATE DEBT)
(Revised 7-30-2024)
THIS SUBORDINATION AGREEMENT FOR REGULATORY AGREEMENT (“Agreement”) is effective as of the ___ day of October, 2025, by THE CITY OF HEALDSBURG, a California municipal corporation (“Governmental Entity”), and CITRINE PRESERVATION LIMITED PARTNERSHIP, a California limited partnership (“Borrower”), for the benefit of BERKADIA COMMERCIAL MORTGAGE LLC, a Delaware limited liability company (“Lender”).

RECITALS
A. Simultaneously herewith Borrower is acquiring certain improved real property located in the County of Sonoma, State of California, as more particularly described on Exhibit A attached hereto (“Property”).

B. In connection with such acquisition, pursuant to that certain Assignment and Assumption of Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of the date hereof by and between Borrower, Governmental Entity, and SVI MFH, LLC, a Delaware limited liability company, Borrower is assuming certain obligations under the Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of June 5, 2017 (as amended, the “Regulatory Agreement”) between Governmental Entity and SVI MFH, LLC, a Delaware limited liability company (“Prior Owner”) and recorded on title to the Property on June 16, 2017 as Document No. 2017047112 in the Sonoma County Official Records (“Official Records”), pursuant to which the Property was subjected to certain restrictions by Governmental Entity in connection with the prior development or rehabilitation of the Property.

C. In connection with the acquisition of the Property by Borrower, Lender is making a loan to Borrower in the original principal amount of $[_____________] (“Loan”) pursuant to a Multifamily Loan and Security Agreement between Lender and Borrower (as supplemented or amended from time to time, the “Loan Agreement”) and evidenced by a Item 6.c
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Subordination Agreement – Regulatory Agreement Only Page 2 Multifamily Note by Borrower to Lender (as supplemented or amended from time to time, the “Note”). The Loan is to be secured by a Multifamily Deed of Trust, Assignment of Rents and Security Agreement that will be recorded among the Official Records (as supplemented or amended from time to time, the “Mortgage”) (the Loan Agreement, the Note and the Mortgage, together with all other documents executed with respect to the Loan, are hereinafter collectively referred to as the “Loan Documents”).

D. As a condition to making the Loan, Lender requires that the Loan Documents be a lien on the Property superior to the lien of the Regulatory Agreement and that the rights of Lender under the Loan Documents be superior to the rights of Governmental Entity and Borrower under the Regulatory Agreement other than Section 1 (with respect to any defined terms used in Sections 2 through 4.1), Section 2, Section 3, Section 4.1, Section 9.1(vi) and Section 9.2(i) (collectively, the “Affordability Provisions”). Lender will not make the Loan unless Governmental Entity and Borrower agree to subordinate their rights and obligations under the Regulatory Agreement (other than the Affordability Provisions).

E. Borrower and Governmental Entity hereby agree to subordinate the Regulatory Agreement on and subject to the terms, conditions and requirements set forth in this Agreement.

AGREEMENT
NOW, THEREFORE, in consideration of the mutual benefits accruing to the parties hereto and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Recitals. The foregoing Recitals are hereby incorporated into this Agreement as agreements among the parties.

2. Subordination. The Governmental Entity hereby covenants and agrees that, subject to the provisions of this Agreement, the Regulatory Agreement (other than the Affordability Provisions ) is and will at all times continue to be, subordinate, subject and inferior to the rights of Lender under the Loan Documents and that (other than the Affordability Provisions) the liens, rights (including approval and consent rights), remedies, payment interests, priority interests, and security interests granted to Governmental Entity pursuant to or in connection with the Regulatory Agreement are hereby expressly acknowledged to be in all respects and at all times, subject, subordinate and inferior in all respects to the liens, rights (including approval and consent rights), remedies, payment, priority and security interests granted to Lender pursuant to the Loan Documents and the terms, covenants, conditions, operations and effects thereof. Notwithstanding the above, Governmental Entity may exercise the remedies of specific performance or injunctive relief.

3. Financing, Encumbrance and Transfer Approval. Subject to the provisions of this Agreement, Governmental Entity hereby approves the transfer of the Property to the Borrower and the financing evidenced by the Mortgage. Governmental Entity further agrees that, so long as Lender has complied with Section 5 below, any transfer of the Item 6.c
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Subordination Agreement – Regulatory Agreement Only Page 3 Property in connection with foreclosure or deed in lieu thereof will not require Governmental Entity’s consent.

4. Reserved.

5. Lender Notice of Default. In consideration of Governmental Entity’s agreements contained in this Agreement, Lender agrees that in the event of any default by Borrower under the Loan Documents, Governmental Entity will be entitled to receive a copy of any notice of default given by Lender to Borrower under the Loan Documents. Neither the giving nor the failure to give a notice to Governmental Entity pursuant to this Section 5 will affect the validity of any notice given by Lender to the Borrower. Governmental Entity has the right (but no obligation) to cure any default under the Loan Documents within the time Borrower is permitted to cure any default (to the extent such cure is available) under the Loan Documents. Governmental Entity must notify Lender prior to the expiration of any cure period provided to Borrower under the Loan Documents of its intent to cure such default, and provided the Governmental Entity cures the default in accordance with the Loan Documents, Lender will accept such performance by the Governmental Entity.

6. Governmental Entity Notice of Default. Governmental Entity must give Lender a concurrent copy of each material notice (including without limitation each notice of default) given by Governmental Entity under or with respect to the Regulatory Agreement, and agrees that Lender, at Lender’s sole election, will have the right (but not the obligation) to cure any default by Borrower under the Regulatory Agreement on its and/or Borrower’s behalf. Governmental Entity hereby represents and warrants that, to the best of its knowledge, there is no current default under the Regulatory Agreement.

7. Governmental Entity’s Rights. Except as set forth in Sections 2 and 8 of this Agreement, nothing in this Agreement is intended to abridge or adversely affect any right or obligation of Borrower and/or Governmental Entity, respectively, under the Regulatory Agreement; provided that, (A) the Regulatory Agreement may not be modified, amended, changed or altered without the prior written consent of Lender so long as the Loan is secured by the Property and (B) for so long as the Loan is secured by the Property, notwithstanding the terms of the Regulatory Agreement to the contrary, neither Borrower nor Governmental Entity will, without Lender’s prior written consent, exercise or seek any right or remedy under the Regulatory Agreement or available at law or in equity which will or could result in (i) a transfer of possession of the Property or the control, operations or management thereof, (ii) collection or possession of rents or revenues from or with respect to the Property by any party other than Borrower or Lender; (iii) appointment of a receiver for the Property; (iv) application of insurance or condemnation proceeds other than as approved by Lender pursuant to the Loan Documents; (v) removal or replacement of the existing property manager of the Property; or (vi) a material adverse effect on Lender’s security for the Loan.

8. Foreclosure by Lender. In the event of foreclosure, deed in lieu of foreclosure, or similar disposition of the Property by Lender, (a) no consent will be required from Governmental Entity so long as Lender has complied with Section 5 above, and (b) all provisions of the Item 6.c
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Subordination Agreement – Regulatory Agreement Only Page 4 Regulatory Agreement except the Affordability Provisions will automatically terminate and (c) Lender will have no indemnification obligations to Governmental Entity for any period during which Lender does not own or is not in possession of the Property.

9. Refinancing. Governmental Entity agrees that its agreement to subordinate hereunder will extend to any new mortgage debt which is for the purpose of refinancing all or any part of the indebtedness evidenced by the Loan Documents (including reasonable and necessary costs associated with the closing and/or the refinancing, and any reasonable increase in proceeds for rehabilitation in the context of a preservation transaction). All terms and covenants of this Agreement will inure to the benefit of any holder of any such refinanced debt, and all references to the Loan Documents and Lender will mean, respectively, the refinance loan documents and the holder of such refinanced debt.

10. Miscellaneous Provisions.
(a) This Agreement represents the entire understanding and agreement between the parties with regard to the matters addressed herein, and will supersede and cancel any prior agreements with regard to such matters.
(b) If there is any conflict or inconsistency between the terms of the Regulatory Agreement and the terms of this Agreement, then the terms of this Agreement will control.
(c) This Agreement will be binding upon and will inure to the benefit of the respective legal successors and permitted assigns of the parties to this Agreement. Without prior notice to or the consent of the Governmental Entity or the Borrower, the Lender may freely transfer or assign the Loan and the Loan Documents, including this Agreement, in whole or in part, and the Governmental Entity acknowledges and agrees that any future legal holder of the Note will automatically be a legal successor and permitted assignee of Lender hereunder, without the necessity of any further action or instrument. No other party will be entitled to any benefits under this Agreement, whether as a third-party beneficiary or otherwise. (d) If any one or more of the provisions contained in this Agreement, or any application of any such provisions, is invalid, illegal, or unenforceable in any respect, the validity, legality, enforceability, and application of the remaining provisions contained in this Agreement will not in any way be affected or impaired. (e) Each notice, request, demand, consent, approval or other communication (collectively, “Notices,” and singly, a “Notice”) which is required or permitted to be given pursuant to this Agreement will be in writing and will be deemed to have been duly and sufficiently given if (i) personally delivered with proof of delivery (any Notice so delivered will be deemed to have been received at the time so delivered), or (ii) sent by a national overnight courier service (such as FedEx) for delivery on the next business day (any Notice so delivered will be deemed to have been received on the next Business Day following receipt by the courier), or (iii) Item 6.c
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Subordination Agreement – Regulatory Agreement Only Page 5 sent by United States registered or certified mail, return receipt requested, postage prepaid, at a post office regularly maintained by the United States Postal Service (any Notice so sent will be deemed to have been received on the date of delivery as confirmed by the return receipt), addressed to the respective parties as follows:

If to Governmental Entity:

The City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Manager
Facsimile: 707-431-3321
Telephone: 707 431-3317
If to Lender:

Berkadia Commercial Mortgage LLC
323 Norristown Road, Suite 300
Ambler, Pennsylvania 19002
Attention: Executive Vice President – Servicing
If to Borrower:

Citrine Preservation Limited Partnership
601 Cypress Ave, Suite 302
Hermosa Beach, CA 90254
Attention: Chuck Treatch
Any party, by Notice given pursuant to this Section, may change the person or persons and/or address or addresses, or designate an additional person or persons or an additional address or addresses, for its Notices, but Notice of a change of address will only be effective upon receipt. Neither party will refuse or reject delivery of any Notice given in accordance with this Section. (f) Each of the parties will, whenever and as often as they are requested to do so by the other, execute, acknowledge and deliver, or cause to be executed, acknowledged or delivered, any and all such further instruments and documents as may be reasonably necessary to carry out the intent and purpose of this Agreement, and to do any and all further acts reasonably necessary to carry out the intent and purpose of this Agreement.
(g) This Agreement will be governed by the laws of the State in which the Property is located.
(h) Each person executing this Agreement on behalf of a party hereto represents and warrants that such person is duly and validly authorized to do so on behalf of such party with full right and authority to execute this Agreement and to bind such party with respect to all of its obligations under this Agreement.

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Subordination Agreement – Regulatory Agreement Only Page 6 (i) No failure or delay on the part of any party to this Agreement in exercising any right, power, or remedy under this Agreement will operate as a waiver of such right, power, or remedy, nor will any single or partial exercise of any such right, power or remedy preclude any other or further exercise of such right, power, or remedy or the exercise of any other right, power or remedy under this Agreement. (j) Each party to this Agreement acknowledges that if any party fails to comply with its obligations under this Agreement, the other parties will have all rights available at law and in equity, including the right to obtain specific performance of the obligations of such defaulting party and injunctive relief. (k) This Agreement may be assigned at any time by Lender to any subsequent holder of the Note.
(l) This Agreement may be amended, changed, modified, altered or terminated only by a written instrument signed by the parties to this Agreement or their successors or assigns.
(m) This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.
(n) Nothing in this Agreement is intended, nor will it be construed, to in any way limit the exercise by Governmental Entity of its governmental powers (including police, regulatory and taxing powers) with respect to Borrower or the Property to the same extent as if it were not a party to this Agreement or the transactions contemplated by this Agreement.

NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE REGULATORY

AGREEMENT (BUT NOT THE AFFORDABILITY PROVISIONS) BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF THE MORTGAGE. [SIGNATURE AND ACKNOWLEDGMENT PAGES FOLLOW]
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Subordination Agreement – Regulatory Agreement Only Page S-1 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year above written.

GOVERNMENTAL ENTITY:

THE CITY OF HEALDSBURG,
a California municipal corporation
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 )
) SS.

COUNTY OF LOS ANGELES )
On _________________, 2025 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
_________________________________
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Subordination Agreement – Regulatory Agreement Only Page S-2 BORROWER:

CITRINE PRESERVATION LIMITED
PARTNERSHIP, a California limited partnership
By: Citrine AGP LLC, a California limited
liability company, its Administrative General
Partner
By: Transcend Preservation LLC, a
California limited liability company, its
Sole Member
By:

Name: Charles Treatch
Title: Manager
By:

Name: Nicholas Tufano
Title: Manager
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Subordination Agreement – Regulatory Agreement Only Page Ack.

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

STATE OF CALIFORNIA )
) SS.

COUNTY OF LOS ANGELES )
On _________________, 2025 before me, ________________________________, personally appeared John Frahm, 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
_________________________________
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Subordination Agreement – Regulatory Agreement Only Page S-3 LENDER:

BERKADIA COMMERCIAL MORTGAGE
LLC, a Delaware limited liability company
By:

Name:

Title: Authorized Representative
STATE OF ___________________ )
) ss.

COUNTY OF_________________ )
I certify that I know or have satisfactory evidence that the person appearing before me and making this acknowledgment is the person whose true signature appears on this document.

On this _____ day of ________________, 20__, before me personally appeared __________________________________, to me known to be the _______________________ of _________________________________, a _____________________________, that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said ___________________________________, for the uses and purposes therein mentioned, and on oath stated that she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said _____________________.

WITNESS my hand and official seal hereto affixed the day and year first above written.

Notary Public in and for the State of _________,
residing at
My commission expires:
[Type or Print Notary Name]
(Use This Space for Notarial Seal Stamp)
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Subordination Agreement – Regulatory Agreement Only Page A-1

EXHIBIT A

LEGAL DESCRIPTION
Real property in the City of Healdsburg, County of Sonoma, State of California, described as follows:

PARCEL 1:

APN: 089-082-034-000
PARCEL 2:

A perpetual, non-exclusive underground easement for the installation and maintenance of sewer lines and ancillary equipment in the area depicted on, and identified as “10' Sewer Easement” on, that certain “Parcel Map of Lands of SVI Healdsburg, LLC” filed for Record in the County Recorder of the County of Sonoma, State of California in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records, as granted in the Grant Deed recorded June 28, 2017 as Instrument No. 2017050344, of Official Records, Sonoma County, California, and as contained in the “Declaration of Reciprocal Easements and Mutual Maintenance Agreement”, recorded October 8, 2018, as Instrument No. 2018070040, of Official Records, Sonoma County, California.

PARCEL 3:

A perpetual, non-exclusive underground easement for the installation and maintenance of electrical facilities and equipment in the area depicted on, and identified as “Electrical Easement” on, that certain “Parcel Map of Lands of SVI Healdsburg, LLC” filed for Record in the County Recorder of the County of Sonoma, State of California in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records, as granted in the Grant Deed recorded June 28, 2017 as Instrument No. 2017050344, of Official Records, Sonoma County, California, and as contained in the “Declaration of Reciprocal Easements and Mutual Maintenance Agreement”, recorded October 8, 2018, as Instrument No. 2018070040, of Official Records, Sonoma County, California.

PARCEL 4:

A perpetual, non-exclusive underground easement for the installation and maintenance of storm drain facilities and equipment in the area depicted on, and identified as “10' Storm Drain Easement” on, that certain “Parcel Map of Lands of SVI Healdsburg, LLC” filed for Record in the County Recorder of the County of Sonoma, State of California in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records, as granted in the Grant Deed recorded June 28, 2017 as Instrument No. 2017050344, of Official Records, Sonoma County, California, and as contained in the “Declaration of Reciprocal Easements and Mutual Maintenance Agreement”, recorded October 8, 2018, as Instrument No. 2018070040, of Official Records, Sonoma County, California.

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Subordination Agreement – Regulatory Agreement Only Page A-2 PARCEL 5:

A perpetual, non-exclusive easement for pedestrian and vehicular ingress and egress over and across the area depicted on, and identified as “26' Lot 1 (Apartments) Access Easement and Emergency Vehicle Access Easement” on, that certain “Parcel Map of Lands of SVI Healdsburg, LLC” filed for Record in the County Recorder of the County of Sonoma, State of California in Book 786 of Parcel Maps, Page No. 15 through 18, Sonoma County Records, as granted in the Grant Deed recorded June 28, 2017 as Instrument No. 2017050344, of Official Records, Sonoma County, California, and as contained in the “Declaration of Reciprocal Easements and Mutual Maintenance Agreement”, recorded October 8, 2018, as Instrument No. 2018070040, of Official Records, Sonoma County, California.

PARCEL 6:

A “5’ Public Utility Easement” as contained in the “Declaration of Reciprocal Easements and Mutual Maintenance Agreement”, recorded October 8, 2018, as Instrument No. 2018070040, of Official Records, Sonoma County, California.

APN: 089-082-034-000
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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 20, 2025
SUBJECT: Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants for 34 Ward Street
PREPARED BY: Griselda Villarreal, Administrative Analyst II STRATEGIC INITIATIVE(S):
- Expand Affordable Housing Opportunities
- Provide Effective Governance
RECOMMENDED ACTION(S):

Adopt a Resolution approving an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants with Dream Bigger Acquisitions 1, LLC, for the 6-Lot Subdivision at 34 Ward Street and authorizing the City Manager to execute and deliver all documents necessary to complete the transaction and recordation.

COMMUNITY ENGAGEMENT/OUTREACH:

This item will be considered at a public meeting where time will be provided for public comment.

BACKGROUND:

Senate Bill 1123 (SB 1123), effective July 1, 2025, builds on California’s Starter Home Revitalization Act (Senate Bill 684) by expanding the types of parcels eligible for streamlined, ministerial review of small‐scale subdivisions and associated, ten units or less housing developments. Senate Bill 684, effective January 1, 2025, streamlined the approval process for small infill subdivision projects of 10 or fewer residential units on urban lots under 5 acres, requiring qualifying projects to be reviewed administratively, without discretionary review or a public hearing, to facilitate timely development of infill housing within existing urban areas.

On July 1, 2025, the Community Development Director of the City of Healdsburg completed review and approved the Tentative Subdivision Map No. SBDV-0003-2025 for the 34 Ward Street Project (“Project”), authorizing the subdivision of one existing parcel into 6 residential lots with a shared private driveway.

On September 17, 2025, Samara Living Inc. (“Developer”), on behalf of Dream Bigger Item 6.d
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Acquisitions 1, LLC (“Owner”), submitted the Final Map for the Project, for review, consideration, and approval.

The Project is subject to the City’s Inclusionary Housing Ordinance (IHO), Healdsburg Municipal Code (HMC) Section 20.20.030(C), which requires residential developments with five (5) or more dwelling units to provide at least 20% of the total units as affordable to low-, moderate- or middleincome households, as defined in HMC 20.28.310. Accordingly, prior to recordation of the Final Map, the Owner must enter into an Ownership Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (“Affordable Housing Agreement”) with the City to ensure compliance with the Inclusionary Housing Ordinance and to preserve long-term affordability of the designated inclusionary unit.

DISCUSSION/ANALYSIS:

Staff recommends approval of the Affordable Housing Agreement for the Project. The Affordable Housing Agreement is consistent with the City’s policies and are essential in preserving affordability for the required for-sale inclusionary unit for a period of forty-five (45) years.

Project Description
The .049-acre project is located at 34 Ward Street (APN 002-301-004), within the Multi-Family Residential (MR) zoning district. The site is near the intersection of Healdsburg Avenue and Ward Street and is surrounded by established urban uses.

This project involves removal of the existing older residential and accessory structures and subdivision of the property into six (6) residential lots served by a shared private driveway. Each lot is intended to be developed with a detached single-family dwelling consistent with surrounding neighborhood scale and design.

The lot configuration for the approved Tentative Subdivision Map No. SBDV-0003-2025, is as follows: Lot 1 – 3,603 sq. ft.; Lot 2 – 3,897 sq. ft.; Lot 3 – 2,868 sq. ft.; Lot 4 – 2,513 sq. ft.; Lot 5 – 2,669 sq. ft.; and Lot 6 – 2,604 sq. ft. The Final Map is consistent with the approved Tentative Subdivision Map.

The Healdsburg 2030 General Plan establishes a residential density range of 10-20 dwelling units per acre for the site. With a total area of 0.49 acres, the maximum density provides for 9.8 units.

As the parcel is not listed in the 6th Cycle Housing Element Sites Inventory, the Project must achieve at least 66% of the maximum allowable residential density, equivalent to 6.5 units.

Rounded down, the Project’s six lots meet this requirement and are consistent with the General Plan density policies.

Inclusionary Housing Requirement
This Project is subject to the City’s Inclusionary Housing Ordinance (IHO), Healdsburg Municipal Code (HMC) Section 20.20.030(C), which requires residential developments with five (5) or more dwelling units to provide at least 20% of the total units as affordable to low-, moderate- or middleincome households, as defined in HMC 20.28.310.

Accordingly, one unit, (Lot 5) is designated as the Project’s inclusionary housing unit. For Item 6.d
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ownership projects, the affordable unit must be sold to and occupied by a Middle-Income Household, earning up to 160% of the Area Median Income (AMI) for Sonoma County. This unit is subject to resale and occupancy restrictions for a period of not less than forty-five (45) years to ensure long-term affordability.

Affordable Housing Agreement
Prior to recording of a Final Map, the Council shall approve and authorize execution of the Affordable Housing Agreement governing the inclusionary unit. The Affordable Housing Agreement ensures compliance with the City’s Inclusionary Housing Ordinance, while establishing the affordability, resale, and occupancy restriction for the designated middle-income unit. The proposed Agreement will remain in effect for a minimum of forty-five years and will be recorded against the property to run with the land and bind all successors in interest.

The Affordable Housing Agreement will become effective upon issuance of the final Certificate of Occupancy for the Project and will ensure the inclusionary unit remains affordable to qualified Middle-Income Households for the required 45-year term. The Agreement requires priority access to the unit for local residents, consistent with the City’s adopted Local Preference Policy.

To complete the transaction and implement the Inclusionary Housing requirements, City approval and execution of the Affordable Housing Agreement and the following associated exhibits and attachments are required:

1. Exhibit A to Affordable Housing Agreement – Legal Description of The Property:

The legal description identifies Lot 5 as the designated Middle-Income Housing Unit. To be included upon recordation of the Final Map.

2. Exhibit B to Affordable Housing Agreement - Resale Restriction Agreement: The Resale Restriction Agreement between the City and the future qualified Middle-Income Household purchasing the inclusionary unit (Lot 5) establishes long-term affordability and occupancy requirements for the Middle-Income Housing Unit. It includes the following appendices:
• Appendix A to Resale Restriction Agreement – Legal Description: The legal description for Lot 5, to be inserted upon Final Map recordation. • Appendix B to Resale Restriction Agreement – Promissory Note: To be executed by the Middle-Income Household for the benefit of the City. This document secures compliance with affordability and occupancy restrictions. It includes provisions to protect the long-term affordability of the unit by requiring that any unpermitted financial gains, such as Excess Sales Proceeds, resulting from a resale in violation of the Resale Restriction Agreement, be recaptured and returned to the City.
• Appendix C to Resale Restriction Agreement – Deed of Trust: Recorded against Lot 5 to secure the Promissory Note and ensure continued use of the property as the owner’s primary residence. These instruments also secure the City’s ability to recapture excess sales proceeds or rental income resulting from unauthorized sales or rentals, with such funds directed to future affordable housing purposes. • Appendix D to Resale Restriction Agreement – Substitution of Trustee, Item 6.d
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Reconveyance of Deed of Trust, and Termination and Release of Buyer’s Occupancy And Resale Restriction Agreement With Right Of First Refusal. The City will execute and record this document against the Property (Lot 5) when a Middle-Income Household sells the Middle-Income Housing Unit to another qualified Middle-Income Household.

Together, these documents implement the Inclusionary Housing requirements for the project and ensure the long-term affordability and regulatory compliance of the designated middle-income unit.

ENVIRONMENTAL STEWARDSHIP:

Not applicable.

ALTERNATIVES:

The City Council may choose to direct changes to the Affordable Housing Regulatory Agreement and/or to the Declaration of Restrictive Covenants.

FISCAL IMPACT:

The proposed Regulatory Agreement and Resale Restriction Agreement includes language to ensure a qualifying Middle-Income Household will reside in the property for the required 45-year term. The proposed Promissory Note further stipulates that during the 45- year term, in the event of a property sale where there are no eligible Middle-Income Households interested in purchasing the property, any sale proceeds that exceed the restricted sale price for a middle income household will be due to the City to be used for the purpose of supporting affordable housing programs.

ENVIRONMENTAL ANALYSIS:

The project is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to the provisions of SB 684 and SB 1123.

ATTACHMENT(S):

Resolution
Ownership Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (“Affordable Housing Covenant”)
Exhibit A to Affordable Housing Covenant - Legal Description of Property Exhibit B to Affordable Housing Covenant - Buyer’s Occupancy and Resale Restriction Agreement with Right of First Refusal (“Resale Restriction Agreement”) Appendix A to Resale Restriction Agreement - Legal Description of Property Appendix B to Resale Restriction Agreement - Promissory Note Appendix C to Resale Restriction Agreement - Deed of Trust and Security Agreement Appendix D to Resale Restriction Agreement - Substitution of Trustee, Reconveyance of Deed of Trust, and Termination and Release of Buyer’s Occupancy and Resale Restriction Agreement with Right of First Refusal
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CITY OF HEALDSBURG
RESOLUTION NO.____-2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING AN AFFORDABLE HOUSING

REGULATORY AGREEMENT AND DECLARATION OF

RESTRICTIVE COVENANTS BETWEEN THE CITY AND
DREAM BIGGER ACQUISITIONS 1, LLC, FOR THE
SUBDIVISION LOCATED AT 34 WARD STREET AND

AUTHORIZING THE CITY MANAGER TO EXECUTE AND

DELIVER ALL DOCUMENTS NECESSARY TO COMPLETE

THE TRANSACTION AND RECORDATION
WHEREAS, Senate Bill 1123 (SB 1123), effective July 1, 2025, builds on California’s Starter Home Revitalization Act (Senate Bill 684), effective January 1, 2025, by expanding the types of parcels eligible for streamlined, ministerial review of small‐scale subdivisions and associated, ten units or less housing developments; and
WHEREAS, on July 1, 2025, the Community Development Director of the City of Healdsburg approved the Tentative Subdivision Map No. SBDV-0003-2025 for the property at 34 Ward Street into six (6) residential lots (the “Project”), subject to conditions of approval (“Conditions of Approval”); and
WHEREAS, pursuant to the City’s Inclusionary Housing Ordinance, Healdsburg Municipal Code Section 20.20.030(H), and in accordance with the Conditions of Approval, the Project is required to provide one affordable housing unit designated for a middle-income household; and
WHEREAS, in order to implement this requirement, an Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants (“Agreement”) must be executed and recorded concurrently with recording of the final map to ensure the long-term affordability of the designated middle-income unit; and WHEREAS, the Agreement will become effective upon completion of construction of the affordable housing unit and the issuance of a final Certificate of Occupancy for the Project, and will restrict the occupancy and ownership of the affordable unit to income qualified MiddleIncome Households at or below 160% of the area median income (“AMI”) for a period of not less than forty-five (45) years; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Approves the Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants between the City and Dream Bigger Acquisitions 1, LLC, a California limited liability company, in the form attached hereto as Exhibit A; and

2. Authorizes the City Manager to execute the Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants substantially in the form attached hereto, with such non-material changes as may be approved by the City Attorney; and Item 6.d
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3. Authorizes the recordation of the Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants in the Official Records of Sonoma County.

4. Finds that approval and execution of the Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants is exempt from environmental review under the California Environmental Quality Act pursuant to the provisions of SB 684 and SB 1123.

PASSED, APPROVED AND ADOPTED this 20th day of October 2025, by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAINING: Councilmembers:

SO ORDERED: ATTEST:
__________________________________ _______________________________ Evelyn L. Mitchell , Mayor Raina Allan, City Clerk
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attention: City Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §27383 AND

BUILDING HOMES AND JOBS TRUST

FUND FEE PER GOVERNMENT CODE
§27388.1(a)(2)(D)
Space above this line for Recorder’s use.

OWNERSHIP AFFORDABLE HOUSING REGULATORY AGREEMENT
AND

DECLARATION OF RESTRICTIVE COVENANTS
by and between

THE CITY OF HEALDSBURG
and
DREAM BIGGER ACQUISITIONS 1, LLC
for
34 WARD STREET, HEALDSBURG , CA
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2 OWNER OCCUPIED AFFORDABLE HOUSING REGULATORY AGREEMENT

AND DECLARATION OF RESTRICTIVE COVENANTS
This Owner Occupied Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into as of ________________, 20___ (the "Effective Date"), by and between the City of Healdsburg, a California municipal corporation (“City”) and Dream Bigger Acquisitions 1, LLC, a California limited liability corporation (“Owner”). City and Owner are individually referred to herein as a “Party” and collectively as the “Parties.”

R E C I T A L S
A. On July 1, 2025, in accordance with Senate Bill 684 and Senate Bill 1123, the Community Development Director of the City of Healdsburg approved Tentative Subdivision Map No. SBDV-0003-2025 for the subdivision of the property at 34 Ward Street into six (6) lots for development of residential units (the “Project”), subject to conditions of approval (“Conditions of Approval”).

B. Pursuant to the City’s Inclusionary Housing Ordinance, Healdsburg Municipal Code Section 20.20.030(H), and in accordance with the Conditions of Approval, the Project is required to provide one (1) of the six (6) residential housing units designated for sale to and occupancy by a middle-income household.

C. In order to implement the requirements of the Inclusionary Housing Ordinance and the Conditions of Approval, an Ownership Affordable Housing Regulatory Agreement And Declaration of Restrictive Covenants must be executed and recorded concurrently with recording of the final map to ensure the long-term affordability of the designated middle-income unit. .

D. The purpose of this Agreement is to restrict the sale and occupancy of the Middle Income Unit at a Middle Income Housing Cost for a period of forty-five (45) years (the “Term”) as required by the Inclusionary Housing Ordinance and the Conditions of Approval. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Owner and its permitted successors and assigns.

A G R E E M E N T
NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.

1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits:
“Adjusted for family size appropriate to the unit” shall have the meaning set forth in Section 50052.5 of the California Health and Safety Code, as amended or any successor statute thereto.

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3 “Agreement” means this Ownership Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants.
“Applicable Laws” means all applicable laws, ordinances, statutes, codes, orders, decrees, rules, regulations, official policies, standards and specifications (including any ordinance, resolution, rule, regulation, standard, official policy, condition, or other measure) of the United States, the State of California, the County of Sonoma, City of Healdsburg, or any other political subdivision in which the Project is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over City, Owner, or the Project. “Area Median Income” or “AMI” means the median income for Sonoma County, California, adjusted for the actual number of persons in the applicable household, as determined by HUD pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by HCD in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c).
“City” means the City of Healdsburg, a California municipal corporation. “City’s Authorized Representative” means the City Manager of the City of Healdsburg, or his or her designee.
“Claims” is defined in Section 13.
“Conditions of Approval” is defined in Recital A.
"Effective Date" is defined in the opening paragraph of this Agreement. "Excess Proceeds" is defined in Section 4.d.
“Gross Income” means the combined, gross, pre-tax income of all adult occupants of the applicant household, as calculated under California Code of Regulations, Title 25, Section 6914.
“HCD” means the State of California Department of Housing and Community Development.
“HUD” means the U.S. Department of Housing and Urban Development. “Indemnitees” is defined in Section 13.
“Marketing Plan” is defined in Section 9.b.
“Middle Income Household” means a household whose Gross Income upon initial occupancy is no more than one hundred sixty percent (160%) of AMI, as adjusted for the actual number of persons in the applicable household.

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4 “Middle Income Housing Cost” means a monthly obligation to pay mortgage payments (principal and interest), property taxes, property insurance, mortgage insurance, utilities, and homeowners’ association dues (if applicable) in an aggregate amount not greater than onetwelfth of thirty-five percent (35%) of one hundred sixty percent (160%) of Area Median Income, Adjusted for Family Size Appropriate for the Unit. “Middle Income Unit” means a unit that is restricted for sale to a Middle Income Household at a Middle Income Housing Cost.
“Official Records” means the Official Records of the Office of the Sonoma County Recorder.
"Owner” means Dream Bigger Acquisitions 1, LLC, a California limited liability company or its transferee, successor, or assignee.
“Party” or “Parties” respectively means City and Owner individually or collectively. “Performance Deed of Trust” means the deed of trust to be executed by a homebuyer of the Middle Income Unit that is substantially in the form attached as Appendix C to the Resale Restriction Agreement and recorded in the Official Records at the closing for the sale of the Middle Income Unit.
“Project” is defined in Recital A.
"Project Approvals" means the Conditions of Approval, defined in Recital A, and this Agreement.
“Property” is more particularly described in the legal description attached hereto as Exhibit A.
“Regulations” means Title 25 of the California Code of Regulations. “Resale Restriction Agreement” is defined in Section 4.c. “Restricted Sales Price” means the maximum sales price for a Middle Income Unit as determined by the City pursuant to Section 4.a that will result in a Middle Income Housing Cost for a homebuyer.
"Senior Interest" is defined in Section 10.
"Senior Lender" is defined in Section 10.b.
“Tentative Map Approval” is defined in Recital A.
“Term” as referenced in Recital D, means the term of this Agreement, commencing upon the Effective Date and ending on the Termination Date.
“Termination Date” is defined in Section 7(a).

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5 2. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Middle Income Unit shall be used solely in compliance with the Project Approvals, and the requirements set forth herein. Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions.

3. Interior Finishes and Parking. The Middle Income Unit shall have interior finishes and features that are durable, of good quality, and consistent with contemporary standards for new housing. The Middle Income Unit must contain air conditioning, dishwashers, refrigerators, garbage disposals, cooking facilities and in-unit laundry facilities. Prior to issuing a building permit for the Middle Income Unit, the City shall have the right to review the Middle Income Unit plans and/or construction drawings for the sole purpose of determining consistency with this Section.

4. Middle Income Unit Restrictions.
a. Determination of Restricted Sales Price.
i. Unless released from this Agreement following City’s decision not to exercise its right of first refusal to purchase a Middle Income Unit under Section 4.d, below, the Middle Income Unit may be sold only to Middle Income Households (or to the City or its designee pursuant to Section 4.d, below).
ii. Except as provided in Section 4.d, below, the sale price of each Middle Income Unit may not exceed the Restricted Sales Price. Prior to offering a Middle Income Unit for sale, Owner shall provide not less than ninety (90) days’ written notice to City of Owner’s intent to offer the Middle Income Unit for sale, which notice shall include the proposed maximum Restricted Sales Price at which the Middle Income Unit will be offered for sale for City’s review and approval. The Restricted Sales Price shall be determined by using a ten percent (10%) down payment of the Restricted Sales Price and a Middle Income Housing Cost based on then-current prevailing interest rates for a fixed 30-year mortgage. Following the initial sale of the Middle Income Unit by Owner, the Restricted Sales Price of all future sales of those Unit shall be determined in accordance with the terms of the Resale Restriction Agreement.
b. Buyer Selection.
i. Income Verification. Prior to entering into a contractual commitment to sell the Middle Income Unit, Owner shall provide a certification to City attesting to the prospective buyer’s household income and status as a Middle Income Household. In connection with such certification, prospective purchasers shall be required to provide written certification of household income as reasonably required by the City, including without Item 6.d
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6 limitation such documents as income tax returns and W-2 statements for the previous two (2) calendar years, and all pay stubs issued to the prospective buyer within the last sixty (60) calendar days. ii. Owner-Occupancy. Prospective purchasers of the Middle Income Unit must sign a written statement acknowledging their agreement that the Middle Income Unit must be occupied as the purchaser’s principal residence, that the unit may not be rented or leased, except as allowed under the Resale Restriction Agreement.
iii. Credit and Background Checks. Owner shall require each prospective purchaser of the Middle Income Unit to complete an application and credit and background check. There shall be no obligation to sell the Middle Income Unit to a prospective buyer whose application and credit check does not demonstrate an ability to purchase the unit.
c. Resale Restriction Agreement. The initial buyer and each subsequent buyer of the Middle Income Unit shall execute and record a covenant, substantially in the form of Exhibit B, that restricts the future sale of such Middle Income Unit to Middle Income Households at the Restricted Sales Price for a period of forty-five (45) years unless released sooner pursuant to Section 4.d below (the "Resale Restriction Agreement"). The initial buyer and each subsequent buyer shall also execute and record, as applicable, a note and performance deed of trust, substantially in the form attached to the Resale Restriction Agreement, agreeing to be bound to the Resale Restriction Agreement and to pay any Excess Proceeds when due to the City.
d. City Right of First Refusal. For the initial sale of the Middle Income Unit and, except as provided below, all future sales of the unit, if an escrow for the Middle Income Unit to purchase such unit at or below the Restricted Sales Price is not opened within ninety (90) days after the unit is first made available for sale, the City or its designee shall have a right of first refusal to purchase the Middle Income Unit at the Restricted Sales Price. The City acknowledges on behalf of itself and its designees that an owner of a Middle Income Unit will be subject to recorded conditions, covenants, and restrictions, and will be required to pay all homeowners association assessments validly assessed. If the City or its designee declines to exercise its right of first refusal to purchase the Middle Income Unit within an additional ninety (90) days from the time the City is notified that it has the right to purchase that unit, the Owner may then sell the Middle Income Unit at an unrestricted market price without any continuing sale price restriction.

However, at the close of escrow for such unit, the Owner shall pay to the City the positive difference, if any, between the actual purchase price and the Restricted Sales Price ("Excess Proceeds"). Following payment by Owner of any Excess Proceeds to the City, the Middle Income Unit shall be released from the Resale Restriction Agreement, the City's right of first refusal to purchase shall terminate, and the unit no longer shall be referred to as a Middle Income Unit.

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7 5. Non-Discrimination; Compliance with Fair Housing Laws. a. Preference for Local Residents. To the extent not inconsistent with state and federal fair housing laws, in order to ensure that there is an adequate supply of affordable housing within the City of Healdsburg for residents and employees of businesses within the City, to the extent permitted by law and consistent with regulations for funding sources used for development of the Middle Income Unit, within the pool of eligible applicants, first priority for sale of the Middle Income Unit will be given to qualified Middle Income Households with members who live or work in the city limits of Healdsburg. If there are no qualified Middle Income Households who meet these criteria, second priority shall be granted to qualified Middle Income Households with members who live or work in unincorporated Healdsburg, but within the 95448 zip code. If there are no qualified Middle Income Households who meet these criteria, third priority shall be granted to qualified Middle Income Households with members who live or work in Windsor, Geyserville, or Cloverdale or within the unincorporated Windsor, Geyserville and Cloverdale boundaries, but within the 95492, 95441, or 95425 zip codes, respectively. If there are no qualified Middle Income Households who meet these criteria, fourth priority shall be granted to qualified Middle Income Households with members who have previously lived in Healdsburg (within City limits and within the unincorporated 95448 zip code), as determined by prior enrollment in Healdsburg public or private schools, or a previously active utility account with the City of Healdsburg. If there are no qualified Middle Income Households who meet these criteria, fifth priority shall be granted to members of the general public who are qualified Middle Income Households.
b. Fair Housing. Owner shall comply with state and federal fair housing laws in the marketing and sale of the Middle Income Unit, as applicable. c. Non-Discrimination. Owner shall not restrict the sale, transfer, use, occupancy, tenure or enjoyment of the Middle Income Unit on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, transfer, use, occupancy, tenure or enjoyment of the Middle Income Unit, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of vendees in, of, or for the Middle Income Unit.

6. Access to Information; Inspections. Records related to compliance with this Agreement must be kept accurate and up-to-date. Owner shall provide City and its authorized agents and Item 6.d
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8 representatives reasonable access to any books, documents, papers and records associated with the sale of the Middle Income Unit for the purpose of making audits, examinations, excerpts and transcriptions in connection with monitoring compliance with this Agreement, during normal business hours of Owner and upon not less than three (3) business days’ prior written notice. City shall notify Owner of any records it deems insufficient. Owner shall have thirty (30) calendar days from such notice to correct any specified reasonable deficiency in the records, or, if more than thirty (30) days shall be reasonably necessary to correct the deficiency, Owner shall begin to correct the deficiency within thirty (30) days and diligently pursue the correction of the deficiency as soon as reasonably possible.

7. Term of Agreement.
a. Term of Restrictions. This Agreement shall commence upon the Effective Date and shall remain in effect until the forth-fifth (45th) anniversary of the date on which the Middle Income Unit receives a Certificate of Occupancy (the “Termination Date”).
b. Effectiveness Succeeds Conveyance of Property and Repayment of Loan. i. Except as otherwise provided in this Subsection 7.b, this Agreement shall remain effective and fully binding on all portions of the Property for the full term hereof, regardless of any sale, assignment, transfer, refinancing, or conveyance of the Middle Income Unit or the Project or any part thereof or interest therein.
ii. Upon execution and recordation of a Resale Restriction Agreement for the Middle Income Unit, such Middle Income Unit shall be released from this Agreement and the terms of the Resale Restriction Agreement shall control. c. Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the Term. This Agreement shall be released from the Property as specified in Section 7.b.ii, above, and the Parties agree to execute and record appropriate instruments to release and discharge this Agreement as to the Property.

8. Binding Upon Successors; Covenants to Run with the Land. Owner hereby subjects its interest in the Middle Income Unit on the Property to the covenants and restrictions set forth in this Agreement. City and Owner hereby declare their express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of Owner and City, regardless of any sale, assignment, refinancing, conveyance or transfer of the Middle Income Unit, or the Property, or any part thereof or interest therein, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. Any successor-in-interest to Owner, including without limitation any purchaser, transferee or lessee of the Middle Income Unit (other than the Item 6.d
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9 purchasers of the individual dwelling Unit within the Project) or the Property shall be subject to all of the duties and obligations imposed hereby for the full-term of this Agreement. Each and every contract, deed, or other instrument affecting or conveying the Middle Income Unit or the Property or any part thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, restrictions, duties and obligations set forth herein, regardless of whether such covenants, restrictions, duties and obligations are set forth in such contract, deed, or other instrument. If any such contract, deed, or other instrument has been executed prior to the date hereof, Owner hereby covenants to obtain and deliver to the City an instrument in recordable form signed by the parties to such contract, deed, or other instrument pursuant to which such parties acknowledge and accept this Agreement and agree to be bound hereby.

Owner agrees for itself and for its successors that in the event that a court of competent jurisdiction determines that the covenants herein do not run with the land, such covenants shall be enforced as equitable servitudes against the Middle Income Unit and the Property in favor of the City.

Without limiting the generality of the foregoing, Owner and the City hereby declare their understanding and intent that:
(a) The covenants and restrictions contained in this Agreement shall be construed as covenants running with the land pursuant to California Civil Code section 1468 and not as conditions which might result in forfeiture of title by Owner; (b) The burden of the covenants and restrictions set forth in this Agreement touch and concern the Property in that the Owner’s legal interest in the Property and all improvements thereon are rendered less valuable thereby; (c) The benefit of the covenants and restrictions set forth in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the Middle Income Housing unit owners; and
(d) All covenants and restrictions contained herein without regard to technical classification or designation shall be binding upon Owner and its successors in interest for the benefit of the City, and such covenants and restrictions shall run in favor of the City for the entire period during which such covenants and restrictions shall be in force and effect, without regard to whether the City is an owner of any land or interest therein to which such covenant and restrictions relate.

9. Management; Maintenance; Taxes, Fees, and Assessments; Casualty. a. Additional Requirements. All construction work and professional services for the Project shall be performed by persons or entities licensed or otherwise authorized to perform the applicable work or service in the State of California and shall have a current City of Healdsburg business license if required under local law. To the extent allowed by state and federal laws, Owner shall limit the installation of satellite dish, antenna and other such equipment to screened locations on the Project buildings as approved by City.

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10 b. Marketing Plan. Not fewer than sixty (60) days before Owner begins offering the housing units in the Project for sale, Owner shall submit for City review and approval a plan for marketing the Middle Income Unit (the “Marketing Plan”).

The Marketing Plan shall address, (i) plans for compliance with fair housing laws and this Agreement, (ii) how Owner plans to certify the eligibility of Middle Income Households, (iii) preparation of clear and accurate marketing information regarding the Middle Income Unit (preferably in English, Spanish and other languages representative of eligible households in the area) to be distributed to eligible Middle Income Households included on any City maintained affordable housing waiting list, and (iv) placement of advertisements regarding the availability of the Middle Income Unit online or in other media during the applicable marketing period (preferably in English, Spanish and other languages representative of eligible households in the area). The Marketing Plan shall include the form of purchase and sale agreement that Owner proposes to enter into with respect to the Middle Income Unit, as well as the Resale Restriction Agreement. Upon receipt of the Marketing Plan, the City shall promptly review the Marketing Plan and shall approve or disapprove it within thirty (30) days after submission. If City has not responded to the proposed Marketing Plan within thirty (30) days following City’s receipt of such Marketing Plan, Owner may simultaneously give a subsequent request to the City Manager, the Planning Director, and the City Attorney, which request shall be labelled prominently:
"Second Request: Deemed Approval Matter." If City fails to respond to the subsequent request within fifteen (15) days following the date when given, then the Marketing Plan shall be deemed approved. If the Marketing Plan is not approved, the Owner shall submit a revised Marketing Plan within thirty (30) days, which shall be approved or disapproved by the City within fifteen (15) days after submission. If City fails to approve or disapprove the revised Marking Plan within such fifteen (15) day period, then the Marking Plan shall be deemed approved.

Owner shall abide by the terms of the Marketing Plan in marketing and selling the Middle Income Unit throughout the Term of this Agreement, and shall submit proposed material modifications to City for review and approval as described herein.
c. Fees, Taxes, and Other Levies. Owner shall be responsible for payment of all fees, assessments, taxes, charges, liens and levies applicable to the Project, including without limitation possessory interest taxes, if applicable, imposed by any public entity, and shall pay such charges prior to delinquency. However, Owner shall not be required to pay any such charge so long as (a) Owner is contesting such charge in good faith and by appropriate proceedings, (b) Owner maintains reserves adequate to pay any contested liabilities, and (c) on final determination of the proceeding or contest, Owner immediately pays or discharges any decision or judgment rendered against it, together with all costs, charges and interest. Owner shall have all rights under Applicable Law to appeal the valuation of the Project (including but not limited to the Middle Income Unit, any improvements, fixtures or appurtenances, and any personal property) for tax purposes, and nothing herein shall be deemed to preclude Owner from applying for any legally available Item 6.d
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11 taxation relief as a result of the affordability and public benefit provided by the Middle Income Unit.

10. Recordation; Subordination. This Agreement shall be executed and recorded against the Property immediately following the recordation of the Final Subdivision Map for the Project in the Official Records. Owner hereby represents, warrants and covenants that with the exception of easements of record, absent the written consent of City, this Agreement shall not be subordinated in priority to any lien (other than those pertaining to taxes or assessments), encumbrance, or other interest in the Middle Income Unit or the Project. Upon request, the City shall not unreasonably withhold its consent to subordinate this Agreement to the deeds of trust and regulatory agreements required by Owner’s construction and permanent lenders (each a “Senior Interest”) in a form reasonably approved by the City, if the subordination request meets the following conditions:
a. All the proceeds of loans related to the proposed Senior Interest, less any transaction costs, must be used to provide construction and/or permanent financing for the Project.
b. The proposed lender of a Senior Interest (each a “Senior Lender”) must be a state or federally chartered financial institution, or a nonprofit corporation that is not affiliated with Owner or any of Owner’s affiliates, other than as a depositor or lender. The City reserves the right to negotiate priority of interest with public entities.
c. The subordination agreement(s) must be structured to minimize the risk that this Agreement would be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Interest. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Owner, including: (i) providing the City or its successor with copies of any notices of default in the same manner as provided to Owner at the same time or promptly thereafter such notice is provided to the Owner; and (ii) providing the City with a cure period of at least sixty (60) days to cure any default. d. The subordination does not require the consent of the Senior Lender prior to the City exercising remedies available to the City under this Agreement.

11. No Impairment of Lien. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust, or other financing or security instrument; provided, however, that any successor in interest to the Property shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such successor’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’s sale or otherwise.

12. Default and Remedies.
a. Events of Default. An Event of Default shall arise hereunder if Owner fails to perform any obligation under this Agreement and fails to cure such default within thirty (30) days after the City has notified the Owner in writing of the default, or if the default cannot be cured within thirty (30) days, has failed to commence to cure Item 6.d
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12 within thirty (30) days and thereafter diligently pursued such cure and completed such cure within a reasonable time.
b. Remedies. Upon the occurrence of an Event of Default and its continuation beyond any applicable cure period, City may proceed with any of the following remedies:
(i) Bring an action for equitable relief seeking the specific performance of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of such terms and conditions, and/or seeking declaratory relief; and/or
(ii) Pursue any other remedy allowed under the Project Approvals or at law or in equity.

Each of the remedies provided herein is cumulative and not exclusive. City may exercise from time to time any rights and remedies available to it under Applicable Law or in equity, in addition to, and not in lieu of, any rights and remedies expressly provided in this Agreement. Any failure or delay by City in asserting any of its rights or remedies, including specific performance, as to any Event of Default shall not operate as a waiver of any default or of any such rights or remedies or deprive City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.

13. Indemnity. To the fullest extent permitted by law, Owner shall indemnify, defend (with counsel approved by the City) and hold the City and its elected and appointed officers, officials, employees, agents, consultants, and representatives (collectively, the “Indemnitees”) harmless from and against all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) arising directly or indirectly, in whole or in part, as a result of or in connection with Owner’s construction, management, marketing, evaluation and determination of a household’s Gross Income, sale of the Middle Income Unit, or any failure to perform any obligation as and when required by this Agreement. Owner’s indemnification obligations under this Section 13 shall not extend to Claims resulting solely from the gross negligence or willful misconduct of Indemnitees or to Claims resulting from the City’s exercise of its right of first refusal to purchase a Middle Income Unit.

The provisions of this Section 13 shall survive the expiration or earlier termination of this Agreement.

14. Miscellaneous.
a. Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties and recorded in the Official Records of Sonoma County.

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13 b. No Waiver. Any waiver by City of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by City to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or Applicable Law. No failure or delay by City at any time to require strict performance by Owner of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.
c. Notices. Except for any notice, demand or communication required under Applicable Laws to be given in another matter, all notices, demands and communications to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other Parties in accordance with this Section. All notices demands or communications shall be sent by personal delivery, by reputable overnight delivery service (which provides a delivery receipt), or by certified or registered mail, return receipt requested, postage prepaid. Any notice, demand or communication shall be deemed given, received, made or communicated on the date personal delivery is effected or, if mailed in the manner herein specified, on the delivery date or date delivery is refused by the addressee, as shown on the return receipt. Either Party may change its address at any time by giving written notice of such change to City or Owner as the case may be, in the manner provided herein, at least ten (10) days prior to the date such change is desired to be effective.

Any notice to be delivered to City shall be addressed to:

City Manager
City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
With a copy to:

Samantha Zutler, Esq., City Attorney
City of Healdsburg
101 Howard Suite, Suite 400
San Francisco, CA 94123
Any notice to be delivered to Owner shall be addressed to:

Dream Bigger Acquisitions 1, LLC
2840 Bay Road
Redwood City, CA 94063
Attention: Brandon Arioli
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14 d. Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement.
e. Parties Not Co-Venturers; Independent Contractor; No Agency Relationship.

Nothing in this Agreement is intended to or shall establish the Parties as partners, co-venturers, or principal and agent with one another. The relationship of Owner and City shall not be construed as a joint venture, equity venture, partnership or any other relationship. City neither undertakes nor assumes any responsibility or duty to Owner (except as expressly provided in this Agreement) or to any thirdparty with respect to the Project. Owner and its employees are not employees of City but rather are, and shall always be considered independent contractors.

Furthermore, Owner and its employees shall at no time pretend to be or hold themselves out as employees or agents of City. Owner shall not have any authority to act as an agent of City or to bind City to any obligation. f. Action by City. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, consent or request by City is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by City’s Authorized Representative or by any person who shall have been designated by City’s Authorized Representative, without further approval by the City Council. The foregoing notwithstanding, the City’s Authorized Representative may, in his or her discretion, defer any such action to the City Council, provided that such deferral shall not toll any period herein within which the City is required to perform any act without Owner’s written consent.
g. No Third-Party Beneficiaries. This Agreement is not intended to be for the benefit of any person other than the Parties and their permitted successors and assigns. h. Non-Liability of City and City Officials, Employees and Agents. No member, official, employee or agent of City shall be personally liable to Owner or any successor in interest, in the event of any default or breach by City, or for any amount of money which may become due to Owner or its successor or for any obligation of City under this Agreement.
i. Headings; Construction; Statutory References. The headings of the sections and paragraphs of this Agreement are for convenience only and shall not be used to interpret this Agreement. The language of this Agreement shall be construed as a whole according to its fair meaning and not strictly for or against any Party. All references in this Agreement to particular statutes, regulations, ordinances or resolutions of the United States, the State of California, or the City of Healdsburg shall be deemed to include the same statute, regulation, ordinance or resolution as Item 6.d
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15 hereafter amended or renumbered, or if repealed, to such other provisions as may thereafter govern the same subject.
j. Time is of the Essence. Time is of the essence in the performance of this Agreement.
k. Governing Law; Venue. This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law.

Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Sonoma County, California or in the Federal District Court for the Northern District of California.
l. Attorneys’ Fees and Costs. If any legal or administrative action is brought to interpret or enforce the terms of this Agreement, the prevailing Party shall be entitled to recover all reasonable attorneys’ fees and costs incurred in such action. m. Severability. If any provision of this Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby.
n. Entire Agreement; Exhibits. This Agreement contains the entire agreement of Parties with respect to the subject matter hereof, and supersedes all prior oral or written agreements between the Parties with respect thereto. Exhibits A and B, attached hereto are incorporated herein by this reference. o. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.

SIGNATURES ON FOLLOWING PAGE(S).

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IN WITNESS WHEREOF, the Parties have executed this Owner Occupied Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants as of the date first written above.

CITY:

CITY OF HEALDSBURG, a municipal corporation
By: _______________________________
Jeffrey Kay, City Manager
Attest:

By: _____________________________
Raina Allan, City Clerk
Approved as to form:

By: ____________________________
Samantha Zutler, City Attorney
OWNER:

DREAM BIGGER ACQUISITIONS 1, LLC, a
California limited liability company
By:

Name:

Its:

SIGNATURES MUST BE NOTARIZED.

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STATE OF CALIFORNIA )
)

COUNTY OF SONOMA )
On , 20__, before me, ______________________, Notary Public, personally appeared , who proved to me on the basis of
satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature _______________________________ (Seal)
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.

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STATE OF CALIFORNIA )
)

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.

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EXHIBIT A

PROPERTY DESCRIPTION
The real property situated in the City of Healdsburg, County of Sonoma, State of California, described as follows:

Lot 5 ……..

APN: _______________
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Exhibit B

FORM OF RESALE RESTRICTION AGREEMENT
[Attached]
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Appendix B to Resale Restriction Agreement
NOTICE TO OWNER: THIS DOCUMENT CONTAINS PROVISIONS RESTRICTING RESALES AND ASSUMPTIONS.

PROMISSORY NOTE
Secured by Deed of Trust
(City of Healdsburg Moderate Income Homebuyer Program – 34 Ward Street) Healdsburg, California
Excess Sales Proceeds and
Excess Rental Proceeds [DATE]
FOR VALUE RECEIVED, the undersigned owner of the Home,
(the "Owner"), promises to pay the City of Healdsburg, a California municipal corporation (the "City"), at 401 Grove Street, Healdsburg, California 95448, Attn:
, or such other place as the City may designate in writing, any amounts due the City as Excess Rental Proceeds pursuant to the Resale Restriction Agreement plus any amounts due the City as Excess Sales Proceeds pursuant to the Resale Restriction Agreement.

1. Purpose of Note. Owner is purchasing the Home located at in the City of Healdsburg pursuant to the City of
Healdsburg's affordable housing program, which provides for the purchase of homes by middle income households at affordable prices. Because the purchase price has been restricted to a middle income housing cost, the Owner is required and has agreed to execute a Resale Restriction Agreement which restricts the price of the Home upon resale and which requires the Owner to pay any Excess Sales Proceeds at resale to the City. In addition, the Resale Restriction Agreement prohibits the Owner from renting or leasing the Home and requires the Owner to pay any Excess Rental Proceeds to the City if Owner violates this provision. This promissory note (the "Note") evidences both, (a) the obligation of the Owner to pay any Excess Rental Proceeds to the City, and (b) the obligation of the Owner to pay any Excess Sales Proceeds to the City.

2. Definitions. The terms set forth in this section shall have the following meanings in this Note.
(a) "City" shall have the meaning set forth in the opening paragraph hereof. (b) "Deed of Trust" shall have the meaning set forth in Section 4 hereof. (c) "Excess Rental Proceeds" shall have the meaning set forth in the Resale Restriction Agreement.
(d) "Excess Sales Proceeds" shall have the meaning set forth in the Resale Restriction Agreement.
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2 (e) "Home" shall mean the dwelling and the real property, on which the dwelling is located, which secure the Deed of Trust.
(f) "Note" shall have the meaning set forth in Section 1 hereof. (g) "Owner" shall have the meaning set forth in the opening paragraph hereof. (h) "Resale Restriction Agreement" shall mean the Buyer's Occupancy And Resale Restriction Agreement With Right of First Refusal executed by the Owner and the City and recorded on , in the official records of Sonoma County as Instrument No. , in connection with the Owner's purchase of the Home.
(i) "Term" shall mean the term of this Note, which shall be the same as the term of the Resale Restriction Agreement, as set forth in Section 8.1 of the Resale Restriction Agreement.
(j) "Transfer" shall have the meaning set forth in the Resale Restriction Agreement.

3. Payments. In the event any Excess Rental Proceeds or Excess Sales Proceeds become due and payable under the Resale Restriction Agreement, such amounts shall be immediately due and payable hereunder. Failure to declare such amounts due shall not constitute a waiver on the part of the City to declare them due in the event of a subsequent Transfer.

4. Security. This Note is secured by a deed of trust dated the same date as this Note, executed by the Owner and City and recorded on , in the official records of Sonoma County as Instrument No. (the "Deed of Trust").

5. Due on Transfer. Any amounts due under this Note shall be due and payable in full on the date of any Transfer of the Home.

6. Default and Acceleration. The Owner shall be in default under this Note if he or she is in default under the Resale Restriction Agreement. Upon the occurrence of a default under this Note, the full amount of any Excess Rental Proceeds or Excess Sales Proceeds due under the Resale Agreement shall be immediately due and payable.

7. Nondiscrimination. The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, gender or gender identification, sex, sexual orientation, family or marital status, ancestry, veteran status, or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Home.

8. Indemnity. Owner agrees to defend, indemnify, and hold City and its employees, agents, officers, and council members harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney's fees that the City may incur as a direct or Item 6.d
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3 indirect consequence of Owner's failure to perform any obligations as and when required by this Note, the Deed of Trust, or the Resale Restriction Agreement.

9. No Waiver by City. Any failure by the City to pursue its legal and equitable remedies upon default shall not constitute a waiver of the City's right to declare a default and exercise all of its rights under this Note, the Resale Restriction Agreement, and the Deed of Trust. Nor shall acceptance by the City of any payment provided for herein constitute a waiver of the City's right to require prompt payment of any remaining payments owed.

10. Attorney's Fees and Costs. Owner agrees that if any amounts due under this Note are not paid when due, to pay in addition to principal and accrued interest, all costs and expenses of collection and reasonable attorney fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed.

11. Joint and Several Obligations. This Note is the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors and assigns.

12. No Offset. Owner hereby waives any rights of offset it now has or may hereafter have against City, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note.

13. Waiver. Owner and any endorsers or guarantors of this Note, for themselves, their heirs, legal representatives, successors and assigns, respectively, severally waive diligence, presentment, protest, and demand, and notice of protest, notice of dishonor and notice of nonpayment of this Note, and expressly waive any rights to be released by reason of any extension of time or change in terms of payment, or change, alteration or release of any security given for the payments hereof, and expressly waive the right to plead any and all statutes of limitations as a defense to any demand on this Note or agreement to pay the same, and jointly and severally agree to pay all costs of collection when incurred, including reasonable attorneys' fees.

14. Notices. All notices required in this Note shall be sent by certified mail, return receipt requested, or express delivery service with a delivery receipt, or personally delivered with a delivery receipt obtained and shall be deemed to be effective as of the date shown on the delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was returned as undeliverable as follows:

To the Owner:

Ward Street
Healdsburg, CA 95448
Attn:

To the City:

City of Healdsburg
401 Grove Street
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4 Healdsburg, CA 95448
Attn:

The parties may subsequently change addresses by providing written notice of the change in address to the other parties in accordance with this Section.

15. Controlling Law. This Note shall be construed in accordance with and be governed by the laws of the State of California.

16. Assignment by City. The City may assign its right to receive the proceeds under this Note to any person and upon notice to the Owner by the City all payments shall be made to the assignee. Severability. If any provision of this Note shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. Entire Agreement. This Note (along with the Resale Restriction Agreement and Deed of Trust) sets forth the entire understanding and agreement of the City and the Owner and any amendment, alteration or interpretation of this Note must be in writing signed by both the City and the Owner.

OWNER:

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Appendix C to Resale Restriction Agreement
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attn: _________________________
APN: _________________________
Exempt From Recording Fee Per (Space above for Recorder's Use) Government Code Section 27383 and Building Homes & Jobs Trust Fund Fee Per Government Code Section 27388.1(a)(2)(D)

DEED OF TRUST

AND SECURITY AGREEMENT
(34 Ward Street, Healdsburg, CA)
THIS DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of Trust") made as of _________________________, 20__, among the trustor, ________________________ _____________________________________________ (the "Owner"), whose address is ___________________________________________, and ___________________ ______________________ (the "Trustee"), and the City of Healdsburg, a California municipal corporation (the "City") as Beneficiary.

The Owner, in consideration of the promises herein recited and the trust herein created, irrevocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of sale, the property located in Sonoma County, State of California, described in the attached Exhibit A and more commonly known as: _________________________________________ ____________________________________________Healdsburg, California (the "Property").

TOGETHER with all the improvements now or hereafter erected on the Property, and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the Property, all of which, including replacements and additions thereto, shall be deemed to be and remain a part of the Property covered by this Deed of Trust; and
TOGETHER with all articles of personal property or fixtures now or hereafter attached to or used in and about the building or buildings now erected or hereafter to be erected on the Property which are necessary to the complete and comfortable use and occupancy of such building or buildings for the purposes for which they were or are to be erected, including all other goods and chattels and personal property as are ever used or furnished in operating a building, or the activities conducted therein, similar to the one herein described and referred to, and all renewals or replacements thereof or articles in substitution therefore, whether or not the Item 6.d
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same are, or shall be attached to said building or buildings in any manner; and all of the foregoing, together with the Property, is herein referred to as the "Security"; To have and to hold the Security together with acquittances to the Trustee, its successors and assigns forever;
TO SECURE to the City the performance of the covenants and agreements of Owner contained in that certain Buyer's Occupancy And Resale Restriction Agreement With Right of First Refusal executed by and between the Owner and the City of even date herewith (the "Resale Agreement");
TO SECURE to the City the payment of Excess Sales Proceeds (as defined in the Resale Agreement) and Excess Rental Proceeds (as defined in the Resale Agreement) that may become due by Owner to City, which payment obligation is further evidenced by a promissory note executed by the Owner to the City dated of even date herewith (the "Note"); and TO SECURE the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and the performance of the covenants and agreements of Owner herein contained.

OWNER AND CITY COVENANT AND AGREE AS FOLLOWS:

1. Owner's Estate. That Owner is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Security, that other than this Deed of Trust, the Security is encumbered only by [amend as necessary to include subordinate acquisition loans]: (a) that deed of trust executed by Owner in connection with a loan made to Owner by _________________ _________________________ (the "First Lender"), securing a promissory note executed by Owner in favor of the First Lender ("First Lender Note"), to assist in the purchase of the Property; and (b) the Resale Agreement. Owner agrees to warrant and defend generally the title to the Security against all claims and demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the Security. (As used in this Deed of Trust, the term "First Lender" shall include all successors and assigns of the First Lender.)

2. Payment of Excess Sales Proceeds and/or Excess Rental Proceeds. Owner will promptly pay to the City, when and if due pursuant to the Resale Agreement, the Excess Sales Proceeds (as defined in the Resale Agreement) and Excess Rental Proceeds (as defined in the Resale Agreement).

3. Resale Agreement. Owner will observe and perform all of the covenants and agreements of the Resale Agreement, the Note, and this Deed of Trust.

4. Charges; Liens. Owner will pay all taxes, assessments and other charges, fines and impositions attributable to the Security which may attain a priority over this Deed of Trust, by Owner making any payment, when due, directly to the payee thereof. Upon request by the City, Owner will promptly furnish to the City all notices of amounts due under this paragraph.

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In the event Owner makes payment directly, Owner will promptly discharge any lien which has priority over this Deed of Trust; provided, that Owner will not be required to discharge the lien of the deed of trust securing the First Lender Note (the "First Lender Deed of Trust") [insert any other superior deeds of trust], or any other lien described in this paragraph, so long as Owner will agree in writing to the payment of the obligation secured by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the Security or any part thereof.

5. Hazard Insurance. Owner will keep the Security insured by a standard all risk property insurance policy equal to the replacement value of the Security (adjusted every five (5) years by appraisal, if requested by the City). If the Security is located in a flood plain, Owner shall also obtain flood insurance.

The insurance carrier providing this insurance shall be licensed to do business in the State of California and be chosen by Owner subject to approval by the City.

All insurance policies and renewals thereof will be in a form acceptable to the City and will include a standard mortgagee clause with standard lender's endorsement in favor of the holder of the First Lender Note [insert any other holder of a note secured by a superior deed of trust in the Property] and the City as their interests may appear and in a form acceptable to the City. The City shall have the right to hold, or cause its designated agent to hold, the policies and renewals thereof, and Owner shall promptly furnish to the City, or its designated agent, the original insurance policies or certificates of insurance, all renewal notices and all receipts of paid premiums. In the event of loss, Owner will give prompt notice to the insurance carrier and the City or its designated agent. The City, or its designated agent, may make proof of loss if not made promptly by Owner. The City shall receive thirty (30) days advance notice of cancellation of any insurance policies required under this Section 5.

Unless the City and Owner otherwise agree in writing, insurance proceeds, subject to the rights of the First Lender, will be applied to restoration or repair of the Security damaged, provided such restoration or repair is economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the security of this Deed of Trust would be impaired, the insurance proceeds will be used to repay any amounts due under the Resale Agreement, with the excess, if any, paid to Owner. If the Security is abandoned by Owner, or if Owner fails to respond to the City, or its designated agent, within thirty (30) days from the date notice is mailed by either of them to Owner that the insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent, is authorized to collect and apply the insurance proceeds at the City's option either to restoration or repair of the Security or to pay amounts due under the Resale Agreement.

If the Security is acquired by the City, all right, title and interest of Owner in and to any insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition, subject to the rights of the First Lender.

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6. Preservation and Maintenance of Security. Owner will keep the Security in good repair and in a neat, clean, and orderly condition and will not commit waste or permit impairment or deterioration of the Security. If there arises a condition in contravention of this Section 6, and if the Owner has not cured such condition within thirty (30) days after receiving a notice of such a condition from the City, then in addition to any other rights available to the City, the City shall have the right (but not the obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Security to recover its cost of curing.

7. Protection of the City's Security. If Owner fails to perform the covenants and agreements contained in this Deed of Trust or if any action or proceeding is commenced which materially affects the City's interest in the Security, including, but not limited to, default under the First Lender Deed of Trust, eminent domain, insolvency, code enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to Owner, may make such appearances, disburse such sums and take such action as it determines necessary to protect the City's interest, including but not limited to, disbursement of reasonable attorney's fees and entry upon the Security to make repairs.

Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will become an indebtedness of Owner secured by this Deed of Trust. Unless Owner and City agree to other terms of payment, such amount will be payable upon notice from the City to Owner requesting payment thereof, and will bear interest from the date of disbursement at the lesser of (i) ten percent (10%); or (ii) the highest rate permissible under applicable law. Nothing contained in this paragraph will require the City to incur any expense or take any action hereunder. Notwithstanding anything to the contrary, the original principal amount shall bear no interest, and the only interest payable will be interest incurred as a result of the application of this Section 7.

8. Inspection. The City may make or cause to be made reasonable entries upon and inspections of the Security; provided that the City will give Owner reasonable notice of inspection.

9. Forbearance by the City Not a Waiver. Any forbearance by the City in exercising any right or remedy will not be a waiver of the exercise of any such right or remedy. The procurement of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of the City's right to require payment of any amounts secured by this Deed of Trust.

10. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and cumulative to any other right or remedy under this Deed of Trust or any other document, or afforded by law or equity, and may be exercised concurrently, independently or successively.

11. Successors and Assigns Bound. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and Owner subject to the provisions of this Deed of Trust.

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12. Joint and Several Liability. All covenants and agreements of Owner shall be joint and several.

13. Notice. Except for any notice required under applicable law to be given in another manner, wherever this Deed of Trust requires any notice from either party, the notice shall be sent by certified mail, return receipt requested, or express delivery service with a delivery receipt, and shall be deemed effective as of the date received or the date delivery was refused as indicated in a return receipt. Unless otherwise provided by either party by written notice to the other party, notice to the Owner shall be to the address of the Property, and notice to the City shall be to the attention of the City Manager to the then current address of City Hall.

14. Governing Law. This Deed of Trust shall be governed by the laws of the State of California.

15. Severability. In the event that any provision or clause of this Deed of Trust or the Resale Agreement conflicts with applicable law, such conflict will not affect other provisions of this Deed of Trust or the Resale Agreement which can be given effect without the conflicting provision, and to this end the provisions of the Deed of Trust and the Resale Agreement are declared to be severable.

16. Captions. The captions and headings in this Deed of Trust are for convenience only and are not to be used to interpret or define the provisions hereof.

17. Nondiscrimination. The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, gender or gender identification, sex, sexual orientation, family or marital status, ancestry, veteran status, or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Security, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Security.

The foregoing covenant shall run with the land.

18. Nonliability for Negligence, Loss, or Damage. Owner acknowledges, understands and agrees that the relationship between Owner and City is solely that of an owner and an administrator of a City affordable housing program, and that City neither undertakes nor assumes any responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or suitability of the Security or any other matter. City owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building or construction or any condition of the Security and Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against City for any loss, damage or other matter arising out of or resulting from any condition of the Security and will hold City harmless from any liability, loss or damage for these things.

19. Indemnity. Owner agrees to defend, indemnify, and hold City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorney's fees that City may incur as a direct or indirect consequence of:

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(a) Owner's failure to perform any obligations as and when required by the Resale Agreement and this Deed of Trust; or
(b) the failure at any time of any of Owner's representations or warranties to be true and correct.

20. Acceleration; Remedies. Upon Owner's breach of any covenant or agreement of Owner in this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this Deed of Trust, the City, prior to acceleration, will mail by express delivery, return receipt requested notice to Owner specifying: (a) the breach; (b) the action required to cure such breach; (c) a date, not less than thirty (30) days from the date the notice is received by Owner as shown on the return receipt, by which such breach is to be cured; and (d) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust, a declaration of default under this Deed of Trust and sale of the Security. The notice will also inform Owner of Owner's right to reinstate after acceleration or declaration of default and the right to bring a court action to assert the nonexistence of default or any other defense of Owner to acceleration and sale. If the breach is not cured on or before the date specified in the notice, the City, at the City's option, may: (1) declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by California law; and (2) either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court, and without regard to the adequacy of its security, enter upon the Security and take possession thereof (or any part thereof) and of any of the Security, in its own name or in the name of Trustee, and do any acts which it deems necessary or desirable to preserve the value or marketability of the Property, or part thereof or interest therein, increase the income therefrom or protect the security thereof. The entering upon and taking possession of the Security shall not cure or waive any breach hereunder or invalidate any act done in response to such breach and, notwithstanding the continuance in possession of the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including the right to: (A) exercise the power of sale; (B) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (C) deliver to Trustee a written declaration of default and demand for sale, pursuant to the provisions for notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to time; or (D) exercise all other rights and remedies provided herein, in the instruments by which the Owner acquires title to any Security, or in any other document or agreement now or hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or provided by law.

The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph, including, but not limited to, reasonable attorney's fees.

21. Owner's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured by this Deed of Trust, Owner will have the right to have any proceedings begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant to the power of sale contained in this Deed of Trust or at any time prior to Item 6.d
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entry of a judgment enforcing this Deed of Trust if: (a) Owner pays City all sums which would be then due under this Deed of Trust and no acceleration under this Deed of Trust or the Resale Agreement has occurred; (b) Owner cures all breaches of any other covenants or agreements of Owner contained in the Resale Agreement or this Deed of Trust; (c) Owner pays all reasonable expenses incurred by City and Trustee in enforcing the covenants and agreements of Owner contained in the Resale Agreement, or this Deed of Trust, and in enforcing the City's and Trustee's remedies, including, but not limited to, reasonable attorney's fees; and (d) Owner takes such action as City may reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and Owner's obligation to comply with the Resale Agreement secured by this Deed of Trust and to pay the sums secured by this Deed of Trust shall continue unimpaired.

Upon such payment and cure by Owner, this Deed of Trust and the obligations secured hereby will remain in full force and effect as if no acceleration had occurred.

22. Due on Transfer of the Property. Upon a Transfer (as defined in the Resale Agreement) of the Property or any interest in it, the City shall require immediate payment in full of all sums secured by this Deed of Trust.

23. Reconveyance. Upon performance of all obligations of the Resale Agreement and expiration of its term and upon payment of all sums secured by this Deed of Trust, the City will request Trustee to reconvey the Security and will surrender this Deed of Trust and the Resale Agreement to Trustee. Trustee will reconvey the Security without warranty and without charge to the person or persons legally entitled thereto. Such person or persons will pay all costs of recordation, if any.

24. Substitute Trustee. The City, at the City's option, may from time to time remove Trustee and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law.

25. Superiority of First Lender Documents. [Revise as necessary to include any other superior deeds of trust.] Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in compliance with the requirements of Section 4.7 of the Resale Agreement.

Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the First Lender, or such lender's assignee or successor in interest, to exercise its remedies under the First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Deed of Trust shall be forever terminated and shall have no further effect as to the Property or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in lieu of foreclosure and notice of default was recorded against the Property in connection therewith, this Deed of Trust shall automatically terminate upon such acquisition of title, Item 6.d
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provided that: (a) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60)-day cure period, and (b) the City shall not have cured or commenced to cure the default within such sixty (60)-day period or commenced to cure and given its firm commitment to complete the cure in form and substance acceptable to the First Lender.

26. Request for Notice.Owner requests that copies of the notice of default and notice of sale be sent to the City in the manner set forth in Section 13, above.

IN WITNESS WHEREOF, Owner has executed this Deed of Trust as of the date first written above.
_____________________________
Owner
_____________________________
Owner
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared ______________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose 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.
______________________________________
Name: ______________________________
Notary Public
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.

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

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EXHIBIT A
Legal Description of the Home
The land is situated in the State of California, County of Sonoma, City of Healdsburg, and is described as follows:
[Insert Legal Description Here.]
APN: _______________________
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Appendix D to Resale Restriction Agreement
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attn: City Clerk
APN: _________________________
_
Exempt FromRecording Fee Per (Space above for Recorder's Use) Government Code Section 27383 and Building Homes & Jobs Trust Fund Fee Per Government Code Section 27388.1(a)(2)(D)

SUBSTITUTION OF TRUSTEE, RECONVEYANCE OF DEED OF TRUST, AND

TERMINATION AND RELEASE OF BUYER'S OCCUPANCY AND RESALE

RESTRICTION AGREEMENT WITH RIGHT OF FIRST REFUSAL
(34 Ward Street, Healdsburg, CA)
The undersigned, City of Healdsburg, a California municipal corporation (the "Beneficiary"), in and under the provisions of that certain Deed of Trust and Security Agreement (the "Deed of Trust") executed by ___________________________ (the "Trustor"), __________________________________, as trustee (the "Trustee") for the benefit of the Beneficiary, dated as of _________________, and recorded on ___________________, in the official records of Sonoma County (the "Official Records") as Instrument No. ________________, in accordance with the provisions of said Deed of Trust, hereby gives notice of the substitution and appointment of the Beneficiary in place and instead of the Trustee, and does hereby vest in said substituted trustee, all the rights, title, estate, power, duty and trusts conferred by said Deed of Trust therein named.

NOW THEREFORE, the Beneficiary, as substituted trustee, does hereby GRANT AND RECONVEY unto the parties entitled thereto without warranty, that portion of the estate and interest derived to the said substituted trustee under said Deed of Trust in the real property described in Exhibit A attached hereto and incorporated herein by this reference, which is located at, ____________________, Healdsburg, California (the "Property").

In conjunction with the reconveyance of the Deed of Trust, the Beneficiary, does hereby terminate, release, and reconvey all of its interest under that certain Buyer's Occupancy And Resale Restriction Agreement With Right of First Refusal executed by the Trustor in favor of the Beneficiary dated as of ___________________, and recorded against the Property in the Official Records on ___________________, as Instrument No. No. _______________ (the "Resale Restriction Agreement"). Upon the recordation of this instrument in the Official Records, the Resale Restriction Agreement shall terminate and is of no further force or effect, other than any provision that expressly survives the termination or expiration of the Resale Restriction Agreement.

Remainder of Page Left Intentionally Blank
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IN WITNESS WHEREOF, the Beneficiary has executed this instrument as of __________________, 20__.

Beneficiary:

CITY OF HEALDSBURG,
a municipal corporation
By: _________________________________
Name: _________________________________
Its: _________________________________
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I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

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A-1
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EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY
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1 RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Healdsburg
401 Grove Street
Healdsburg, CA 95448
Attn: City Clerk
APN:
_
Exempt From Recording Fee Per (Space above for Recorder's Use) Government Code Section 27383 And Building Homes And Jobs Trust Fund Fee Per Government Code Section 27388.1(a)(2)(D)

BUYER'S OCCUPANCY AND RESALE RESTRICTION AGREEMENT

WITH RIGHT OF FIRST REFUSAL

CITY OF HEALDSBURG
(34 Ward Street, Healdsburg, CA)
This Buyer's Occupancy and Resale Restriction Agreement with Right of First Refusal (this "Agreement") is entered into as of , 20 , by and between the City of Healdsburg, a California municipal corporation (the "City"), and (the "Owner").

RECITALS
A. Pursuant to the terms of that certain Ownership Affordable Housing Regulatory Agreement And Declaration Of Restrictive Covenants (“Regulatory Agreement”), between the City and Dream Bigger Acquisitions 1, LLC, a California limited liability company, recorded on , 20 , as Document No. in the Official Records, that
certain property described in Exhibit A to this Agreement (the "Home") was designated as a Middle Income Unit, to be made available for sale only to Middle Income Households at a price not to exceed a Middle Income Housing Cost for a period of forty-five (45) years.

B. Owner is a Middle Income Household, and is purchasing the Home. As a condition of purchasing the Home, and in exchange for having the opportunity to acquire the Home at a price not to exceed a Middle Income Housing Cost, Owner is required to enter into this Agreement to ensure the continued affordability of the Home, consistent with the Regulatory Agreement.

C. This Agreement also provides the City a right of first refusal to purchase the Home at a Restricted Price, given in consideration of the economic benefits to the Owner resulting from the purchase of the Home at a price not to exceed a Middle Income Housing Cost.

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2 NOW, THEREFORE, in consideration of the mutual covenants, promises, and benefits of this Agreement, the sufficiency of which is hereby acknowledged, the Owner and the City agree as follows:

ARTICLE 1. DEFINITIONS AND EXHIBITS
Section 1.1 Definitions. Unless otherwise specified in this Agreement, the following capitalized terms shall have the meanings set forth below:
(a) "Additional Financing", if obtained by Owner, is defined in Section 2.1. (b) "Agreement" is defined in the opening paragraph.
(c) "Area Median Income" shall mean the median income for Sonoma County, California as determined by the U.S. Department of Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937, and as published from time to time by the California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c). For purposes of calculating a Middle Income Housing Cost, Area Median Income shall be adjusted for an assumed household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit, three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and one additional person for every additional bedroom thereafter. For purposes of determining whether a household is a Middle Income Household, Area Median Income shall be adjusted according to the actual size of that household.
(d) "City" is defined in the opening paragraph.
(e) "City Deed of Trust" shall mean the deed of trust, the form of which is attached hereto as Appendix C, executed by the Owner for the benefit of the City and securing the City Note.
(f) "City Note" shall mean the promissory note, the form of which is attached hereto as Appendix B, executed by the Owner securing the Owner's payment of Excess Sales Proceeds and Excess Rental Proceeds.
(g) "Default" is defined in Section 5.1.
(h) "Excess Sales Proceeds" shall mean the amount by which the gross sales proceeds received by the Owner from a Transfer of the Home exceeds the maximum possible Middle Income Housing Cost.
(i) "Excess Rental Proceeds" shall mean the amount by which the gross rental income received by the Owner from any lease of the Home exceeds a Middle Income Rent. (j) "Fair Market Value" means the value of the Home as determined by an appraisal dated no sooner than thirty (30) days prior to the date of the Owner's Notice of Intent to Item 6.d
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3 Sell and prepared by a certified Member of the Appraisal Institute (MAI) chosen by the Owner with experience appraising residential properties in Sonoma County. (k) "First Lender Loan" is defined in Section 2.1.
(l) "Form of Release" is defined in Section 4.6(c).
(m) "Inheriting Owner" is defined in Section 4.3.
(n) “Listing Agreement” is defined in Section 4.4(c).
(o) "Middle Income Household" shall mean a household whose gross income upon initial occupancy is no more than one hundred sixty percent (160%) of Area Median Income; provided that "gross income" shall include the combined, gross, pre-tax income of all adult occupants of the household, as calculated under California Code of Regulations, Title 25, Section 6914.
(p) "Middle Income Housing Cost" shall mean a sales price of the Home calculated to result in a monthly obligation to pay mortgage payments (principal and interest), property taxes, property insurance, mortgage insurance, utilities, and homeowners’ association dues (if applicable) in an aggregate amount not greater than one-twelfth of thirty-five percent (35%) of one hundred sixty percent (160%) of Area Median Income, assuming a fixed 30-year mortgage at then-current prevailing interest rates and an assumed down payment of ten percent (10%) of the sales price.
(q) "Middle Income Rent" shall mean the following amount, including a reasonable utility allowance for utilities paid by the tenant as established by the Sonoma County Community Development Commission, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service, Internet, or cable or subscription TV, plus other fees and charges required to be paid by tenants of the Home on a non-optional basis other than security deposits: a monthly rent that does not exceed one-twelfth of thirty percent (30%) of one hundred sixty percent (160%) of Area Median Income. (r) "Official Records" is defined in Recital A.
(s) "Owner" is defined in the opening paragraph.
(t) "Owner's Notice of Intent to Sell" is defined in Section 4.4(a). (u) "Permitted Transfer" is defined in Section 4.1.
(v) "Proposed Purchaser" is defined in Section 4.4(c).
(w) “Purchase Agreement” is defined in Section 4.6(a).
(x) "Response Notice" is defined in Section 4.4(b)
(y) "Restricted Price" is defined in Section 4.6(a).

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4 (z) "Right of First Refusal" is defined in Section 4.6(a). (aa) "Spouse" shall mean, (i) an individual legally married to the Owner; (ii) a registered domestic partner of the Owner, pursuant to Family Code Section 297, et seq.; or (iii) a registered domestic partner of the Owner pursuant to any local domestic partner registry created by any city, county, or city and county in California.
(bb) "Transfer" is defined in Section 4.1, and for greater clarity does not include a Permitted Transfer.

Section 1.2 Exhibits. The following exhibits are attached to this Agreement, and are incorporated by this reference:

APPENDIX A: Legal Description of the Home
APPENDIX B: Form of City Note
APPENDIX C: Form of City Deed of Trust
APPENDIX D: Form of Release
ARTICLE 2. APPROVED FINANCING; LIEN PRIORITY
Section 2.1 Approved Financing. The City acknowledges that the Owner is acquiring the Home, in part, with a first purchase money loan (the "First Lender Loan"). [The City further acknowledges that the Owner is acquiring the Home with the following additional financing, which has been approved in advance by the City (the "Additional Financing"): .] Section 2.2 Lien Priority. This Agreement is accompanied by the City Note from the Owner to the City pursuant to which the Owner agrees to pay any Excess Sales Proceeds or Excess Rental Proceeds to the City. The City Note is secured by the City Deed of Trust. The City Deed of Trust is subordinate to this Agreement, the First Lender Loan, and the lien of the Additional Financing, if any. However, this Agreement shall be superior to and have lien priority to the lien of the First Lender Loan, Additional Financing, if any, and any other lien, mortgage or deed of trust encumbering the Home.

ARTICLE 3.OWNER CERTIFICATIONS AND

GENERAL OBLIGATIONS
Section 3.1 Owner Certification. The Owner certifies that the financial and other information previously provided in order to qualify to purchase the Home is true and correct as of the date first written above.

Section 3.2 Owner Occupation. The Owner shall occupy the Home as the Owner's principal and sole place of residence within thirty (30) days of close of escrow and for the entire term of this Agreement. The Owner shall be considered as occupying the Home if the Owner is living in the Home for at least ten (10) months out of each calendar year. Owner shall comply with reasonable requests from the City to certify that the Home is occupied as the Owner's principal residence.

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5 Section 3.3 No Rentals. The rental or lease of the Home or any portion thereof for any period of time is prohibited. If Owner rents or leases the Home for any period of time in violation of this Agreement, any Excess Rental Proceeds collected by the Owner shall be immediately due and payable upon receipt by the Owner, and shall be considered a recourse debt of the Owner to the City, as evidenced by the City Note.

Section 3.4 Maintenance.
(a) The Owner shall maintain the Home and all landscaping in good repair and in a neat, clean, sanitary, and orderly condition, in accordance with all applicable laws, so as not to cause any nuisance. The Owner agrees not to commit any waste or to permit deterioration of the Home, and shall make reasonable repairs to the Home as necessary. (b) The Owner shall pay all homeowners association assessments levied against the Home on or before the due date of the assessment, and shall perform all obligations required in any declaration of covenants, conditions, and restrictions recorded against the Home.

Section 3.5 Insurance. The Owner shall maintain a standard all risk property insurance policy equal to the replacement value of the Home. Additional insurance requirements are set forth in the City Deed of Trust. The Owner shall provide the City with evidence of required insurance coverage upon request. If the Home is damaged or destroyed and the Owner elects not to rebuild or repair the Home, the Owner shall pay the City the portion of any insurance proceeds received by the Owner for such destruction or damage that is in excess of a Middle Income Housing Cost.

ARTICLE 4. RESTRICTIONS ON RESALE OR TRANSFER
Section 4.1 Transfer. Any Transfer of the Home will be subject to the provisions of this Agreement including, without limitation, the exercise of the City's Right of First Refusal.

Any Transfer without satisfaction of the provisions of this Agreement shall constitute a Default.

For purposes of this Agreement, "Transfer" means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Home, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Home is transferred and Owner retains title, any lien or mortgage, or a deed of trust, including any refinancing of the First Lender Loan, Additional Financing, if any, and any other lien, mortgage or deed of trust. A Transfer shall not include any of the following, each instead a "Permitted Transfer":
(a) To an existing Spouse;
(b) By an Owner to a Spouse where the Spouse becomes the co-owner of the Home;
(c) Between Spouses as part of a dissolution proceeding; (d) To an existing Spouse by devise or inheritance following the death of the Owner:
(e) To an existing joint tenant with the right of survivorship upon the death of Item 6.d
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6 an Owner, provided the joint tenant(s) are listed as parties to this Agreement as of the date of this Agreement; or
(f) By Owner to an inter vivos revocable trust in which the Owner is the beneficiary, trustor, and trustee.

Section 4.2 Notice of Permitted Transfer; Other Conditions. Owner shall provide written notice of all Permitted Transfers to the City within thirty (30) days of the date of the Permitted Transfer; and Owner shall continue to occupy the Home as his or her principal place of residence, except where the Permitted Transfer occurs because of the Owner's death, in which event the transferee shall owner-occupy the Home and affirmatively assume Owner's obligations under this Agreement, the City Note, and the City Deed of Trust.

Section 4.3 Inheritance.
(a) In the event a Transfer occurs by devise or inheritance due to death of the Owner, the administrator of the Owner's estate or the person inheriting the Home shall provide written notice to the City of the Owner's death within sixty (60) days of the date of death. (b) Prior to taking title to the Home, the person inheriting the Home (the "Inheriting Owner") shall provide the City with income information, to be verified by the City, so that the City may determine if the Inheriting Owner is a Middle Income Household. If the Inheriting Owner fails to provide required financial information and/or documentation, he or she shall be deemed not to qualify as a Middle Income Household. If the Inheriting Owner qualifies as a Middle Income Household, he or she shall succeed to the Owner's interest and obligations under this Agreement, the City Note, and the City Deed of Trust, and new documents shall be executed between the Inheriting Owner and the City and recorded against the Home, and the documents with the Inheriting Owner shall have a remaining term of forty-five (45) years. If the Inheriting Owner fails to qualify as a Middle Income Household, he or she shall be required to Transfer the Home as set forth in Section 4.4, below; provided, however that the Inheriting Owner may own and occupy the Home for up to twelve (12) months prior to providing an Owner's Notice of Intent to Sell to the City, and provided further that the Inheriting Owner remains in compliance with the requirements of this Agreement and the City Deed of Trust. The Inheriting Owner shall not be required to occupy the Home during this twelve (12)-month time period, but shall not rent the Home except as provided in Section 3.4 above. (c) If the Inheriting Owner is a minor child, such Inheriting Owner and his or her legal guardian may occupy the Home for the time period prescribed in Probate Code Section 6500 without the City determining that the legal guardian qualifies as a Middle Income Household.
(d) For greater clarity, this Section does not apply in the case of a Permitted Transfer resulting from the Owner's death.

Section 4.4 Sale of the Home.
(a) If the Owner intends to Transfer or vacate the Home, the Owner shall give the City prompt written notice of such intent (the "Owner's Notice of Intent to Sell"). The Owner shall give the Owner's Notice of Intent to Sell prior to taking any affirmative steps to sell the Item 6.d
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7 Home, such as listing the Home on the Multiple Listing Service. The Owner's Intent to Sell shall include, (i) the address of the Home; (ii) the date on which the Owner intends to vacate the Home; (iii) the date the Home will be placed on the market; and (iv) the Owner's daytime phone number.
(b) Upon receipt of the Owner's Notice of Intent to Sell, the City shall calculate the Middle Income Housing Cost, and shall submit such calculation to the Owner within fifteen (15) days of Owner's Notice of Intent to Sell (the "Response Notice"). (c) After delivering the Owner's Notice of Intent to Sell, the Owner shall ensure that the Home is in a saleable condition, and after receipt of the City’s Response Notice may take steps to market the Home to a buyer (the "Proposed Purchaser"). Owner shall retain a real estate agent, real estate broker, or similar professional to assist Owner with the sale of the Home and any commission or other charge of a real estate agent, real estate broker, or similar professional retained by Owner shall be Owner's exclusive obligation, and the City shall not be liable for any such cost. The Owner shall use bona fide good faith efforts to sell the Home in compliance with this Agreement, which shall include listing the Home on the Multiple Listing Item 6.d
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8 Service, keeping the Home in an orderly condition, making it available to show agents and prospective buyers, and providing buyers with eligible purchaser requirements, including income qualifications. Owner shall provide to City a fully executed and dated copy of the agreement (the “Listing Agreement”) between Owner and the real estate agent, real estate broker, or similar professional engaged by Owner to assist with the sale of the Home within five (5) days of its execution.
(d) Any Proposed Purchaser shall be a Middle Income Household. The sale shall be at a Middle Income Housing Cost, and although closing costs shall not be included in the sales price for purposes of determining the maximum sales price, closing costs paid by the Proposed Purchaser shall be reasonable and customary in Sonoma County. The City shall verify that the sale complies with this subsection, as described in Section 4.5, below. As a condition of the City's approval of the sale, the Proposed Purchaser shall agree to sign a promissory note, deed of trust, and buyer's occupancy and resale restriction with right of first refusal substantially similar to this Agreement. It shall be a Default under this Agreement if escrow closes without the foregoing documents being executed by the Proposed Purchaser and recorded as part of the escrow, and certified copies of all of the foregoing documents shall be forwarded to the City within three (3) days of the close of escrow, together with all other information and documentation relating to the escrow that the City may reasonably request.

Section 4.5 City Approval of Proposed Sale.
(a) The Owner and the Proposed Purchaser shall provide the following information and documents to the City within ten (10) days of an offer from the Proposed Purchaser:
(1) The name, address and telephone number in writing of the Proposed Purchaser.
(2) A signed financial statement of the Proposed Purchaser in a form acceptable to the City and any other supporting documentation requested by the City. Owner acknowledges that the City may request the following documentation, (i) pay stubs for the most recent pay periods; (ii) income tax returns for the three (3) most recent tax years; (iii) an income verification form from the Proposed Purchaser's current employer; (iv) an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; and/or (v) if the Proposed Purchaser is unemployed and has no such tax return, another form of independent verification of income. The financial information shall be used by the City to determine the income eligibility of the Proposed Purchaser.
(3) The proposed sales contract and all other related documents which shall set forth all the terms of the sale of the Home, including a HUD-1 Settlement Statement.

Said documents shall include at least, (i) the sales price; and (ii) the price to be paid by the Proposed Purchaser for the Owner's personal property, if any, for the services of the Owner, if any, and any credits, allowances or other consideration, if any.

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9 (b) Within ten (10) days (excluding weekends and City holidays) of receipt of the documentation and information described in subsection (a) of this Section, the City shall approve or disapprove the Proposed Purchaser and terms of sale. Within ten (10) days of the City's approval, but in any event prior to the close of escrow, the Owner and Proposed Purchase Purchaser shall notify the City of the name of the title company escrow holder for the sale of the Home, the escrow number, and name, address, and phone number of the escrow officer.

Section 4.6 City Right of First Refusal; Release.
(a) If an escrow is not opened within ninety (90) days of the date of the Listing Agreement, the City or its designee shall, for a period of ninety (90) additional days, have a right of first refusal (the "Right of First Refusal") to purchase the Home at the lesser of, (i) the Fair Market Value, or (ii) the maximum possible price that is a Middle Income Housing Cost (the "Restricted Price"). The exercise of the City's Right of First Refusal shall be in the City's sole and absolute discretion, and City shall have no obligation to the Owner, a successor in interest to the Owner, or any other person to exercise the same. The City or its designee shall exercise the Right of First Refusal by delivering notice of the same to the Owner, together with the City's calculation of the Restricted Price and a standard form of California Residential Purchase Agreement And Joint Escrow Instructions (the “Purchase Agreement”) prepared by the California Association of Realtors or similar organization, executed by City. Owner shall countersign the Purchase Agreement and promptly return a fully executed copy thereof to the City within five (5) days of receipt . Within sixty (60) days of the date of the Purchase Agreement, the City or its designee shall complete the purchase of the Home, bearing all customary closing costs for buyers in Sonoma County. Owner shall execute any and all documents, instruments and instructions as may reasonably be required by City or escrow to complete the sale of the Home to City or its designee. Thereafter, this Agreement shall be released from the Home.
(b) Notwithstanding subsection (a) of this Section, the Owner may continue to market the Home during the City's period within which to exercise the Right of First Refusal. If the Owner receives an offer on the Home from a Proposed Purchaser during that period, then during the City's review of documentation pursuant to Section 4.5 above, the City may exercise its Right of First Refusal, provided that in that case the City shall be required to pay Owner for the Home the greater of, (i) the Restricted Price, or (ii) the amount of the Proposed Purchaser's offer, not to exceed a Middle Income Housing Cost.
(c) If the City or designee does not exercise its right of first refusal within the ninety (90) day period set forth in subsection (a) of this Section, then the Owner shall be free to sell the Home to any buyer at any price without restriction or City approval, and the City shall execute the release and reconveyance attached to this Agreement as Exhibit D (the "Form of Release"); provided, however, that the Owner shall assign any Excess Sales Proceeds to the City to be used by the City for affordable housing programs.

Section 4.7 Refinance and Subordinate Loans.
(a) Any refinancing of the First Lender Loan or the Additional Financing, and any new subordinate loans, shall require the City's approval, which shall not be unreasonably Item 6.d
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10 delayed or conditioned, and which shall be granted if such financing is consistent with the requirements of this Section.
(b) The City shall permit a prepayment and refinance of the First Lender Loan, provided that,
(1) Following such refinance, the principal amount of all debt secured by the Home does not exceed the greater of, (i) ninety percent (90%) of the Middle Income Housing Cost, (ii) the remaining balance on the First Lender Loan, or (iii) such other amount approved in writing by the City in its sole and absolute discretion in order to prevent substantial hardship to the Owner;
(2) The refinanced First Lender Loan is a fully amortized fixed rate loan, is fully documented, has a term not exceeding thirty (30) years, and requires no balloon payments;
(3) If the remaining balance of the original First Lender Loan exceeds ninety percent (90%) of the Middle Income Housing Cost, then the refinanced First Lender Loan reduces the Owner's principal and interest payments; and (4) The total new housing cost to the Owner after the refinance does not exceed the Owner's ability to pay, as reasonably determined by City. (c) Subordinate loans, including second or junior loans and equity lines of credit, are not permitted except as expressly approved by the City in writing. The City shall permit only those subordinate loans that conform to all of the following:
(1) Following the addition of the subordinate loan (calculated assuming a maximum permitted draw on any equity line of credit), the principal amount of all debt secured by the Home shall not exceed the greater of, (i) seventy-five percent (75%) of the Middle Income Housing Cost, (ii) the remaining balance on the First Lender Loan, or (iii) such other amount approved in writing by the City in its sole and absolute discretion in order to prevent substantial hardship to the Owner; and
(2) The total new housing cost to the Owner does not exceed the Owner's ability to pay, as reasonably determined by City.

ARTICLE 5. DEFAULT AND REMEDIES
Section 5.1 Defaults. The following events shall constitute a default ("Default") by the Owner under this Agreement:
(a) Any material misrepresentation by the Owner has occurred to obtain the benefits of purchase of the Home or in connection with any of Owner's obligations under this Agreement;
(b) The Owner fails to occupy the Home as required under Section 3.2, and such failure continues uncured sixty (60) days following written notice by the City; Item 6.d
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11 (c) The Owner rents the Home in violation of Sections 3.3, or fails to pay Excess Rental Proceeds due and payable to the City;
(d) The Owner fails to provide information to the City required under this Agreement necessary to determine the Owner's compliance with the Agreement; (e) The Owner makes any Transfer in violation of this Agreement, including any refinancing of the First Lender Loan, Additional Financing, if any, and any other lien, mortgage or deed of trust in violation of Section 4.7;
(f) A notice of default is issued under the First Lender Loan or other financing secured by the Home;
(g) A lien is recorded against the Home other than as a result of a Transfer approved by the City, and the Owner fails to discharge the lien within thirty (30) days of its recordation; provided, however, that nothing herein requires the Owner to pay any claims for labor, materials or services which the Owner in good faith disputes and is diligently contesting provided that the Owner shall, within thirty (30) days after the filing of any claim of lien, record in the Official Records, a surety bond in an amount 1 and 1/2 times the amount of such claim item to protect against a claim of lien;
(h) The Owner commits any violation of the City Note or City Deed of Trust not otherwise specified in this Section, subject to any notice and cure provision in such document;
(i) The Owner declares bankruptcy or makes an assignment of assets for the benefit of creditors; and
(j) The Owner otherwise commits a material breach of this Agreement, and such breach remains uncured thirty (30) days following written notice by the City, provided that, if the breach cannot reasonably be cured within thirty (30) days, the Owner shall commence a cure within thirty (30) days, and shall effectuate a cure as soon as reasonably practicable thereafter.

Section 5.2 Payment of Excess Sales Proceeds and Excess Rental Proceeds. The Owner acknowledges and agrees to execute the City Note and the City Deed of Trust, and to pay any Excess Sales Proceeds to the City upon Transfer of the Home, and any Excess Rental Proceeds pursuant to Section 3.3. These amounts shall constitute a debt of the Owner to the City, further evidenced by the City Note and secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause termination of this Agreement or reconveyance of the City Deed of Trust until any Excess Rental Proceeds and Excess Sales Proceeds are paid to the City. The City shall use any such proceeds for affordable housing programs. The Owner and the City acknowledge that the formula for calculating the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same or fewer net sales proceeds from the Sale of the Home at an unrestricted price to a market purchaser (in violation of this Agreement) as the Owner would receive from the sale of the Home at a Middle Income Housing Cost.

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12 Section 5.3 Remedies. Upon a Default, the City may exercise every remedy available at law, in equity, or under this Agreement (no such remedy being exclusive of any other available remedy), including by declaring Excess Sales Proceeds or Excess Rental Proceeds immediately due and payable, and, without further demand, accelerating payments due under the City Note and exercise the City's power of sale under the City Deed of Trust.

ARTICLE 6. NOTICE OF DEFAULT AND FORECLOSURE
Section 6.1 Request for Notice. A request for notice of default and any notice of sale under any deed of trust or mortgage with power of sale encumbering the Home shall be recorded by the City in the Official Records. The City may declare a Default under this Agreement upon receipt of any notice given to the City pursuant to Civil Code Section 2924b, and may exercise its rights as provided in Article 5.

Section 6.2 City Cure and Redemption Rights. In the event of default and foreclosure, the City shall have the same right as the Owner to cure defaults and redeem the Home prior to the foreclosure sale. Nothing herein shall be construed as creating any obligation of the City to cure any such default, nor shall this right to cure and redeem operate to extend any time limitations in the default provisions of the underlying deed of trust or mortgage.

Section 6.3 Restriction on Foreclosure Proceeds. If a creditor acquires title to the Home through deed in lieu of foreclosure, a trustee's deed upon sale, or otherwise, the Owner shall not be entitled to proceeds of sale to the extent that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited to the creditor exceed a Middle Income Housing Cost. The Owner shall instruct the holder of such excess proceeds to pay such proceeds to the City in consideration of the benefits received by the Owner through purchase of the Home under this Agreement.

ARTICLE 7. CITY NONLIABILITY

AND OWNER'S INDEMNITY
Section 7.1 Nonliability for Negligence, Loss, or Damage. The Owner acknowledges and agrees that the relationship between the Owner and the City is solely that of an owner and an administrator of a City housing program, and that the City does not undertake or assume any responsibility for, or duty to, the Owner, to select, review, inspect, supervise, pass judgment on, or inform the Owner of the quality, adequacy, or suitability of the Home or any other matter.

The City owes no duty of care to protect Owner against negligent, faulty, inadequate, or defective building or construction or any condition of the Home, and Owner agrees that neither Owner, or Owner's heirs, successors, or assigns, shall ever claim or have or assert any right or action against the City for any loss, damage, or other matter arising out of, or resulting from, any condition of the Home, and will hold the City harmless from any liability, loss, or damage for these things.

Section 7.2 Indemnity. Owner agrees to defend, indemnify, and hold the City harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys' fees that the City may incur as a direct or indirect consequence of, (i) any Default by Item 6.d
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13 the Owner, (ii) the failure at any time of any of Owner's representations to the City to be true and correct, or (iii) Owner's purchase, ownership, use, or possession of the Home.

Section 7.3 Owner agrees on behalf of itself and its heirs, successors, and assigns, that the provisions of Section 7.1 and 7.2 above shall survive the expiration or termination of this Agreement.

ARTICLE 8. MISCELLANEOUS PROVISIONS
Section 8.1 Term of Agreement. All the provisions of this Agreement, including the benefits and burdens, run with the land and the Home and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors for a term of forty-five (45) years commencing on the date of recordation of this Agreement, or the date of Transfer of the Home to the City or another purchaser in compliance with this Agreement (including execution by the purchaser of a new resale restriction and option to purchase agreement for the benefit of the City). At the expiration of the Term and release of this Agreement, Owner shall no longer be subject to the affordability requirements included in this Agreement. Subject to Section 4.6(c), if the Owner sells the Home in accordance with this Agreement, upon the buyer's execution and recordation of a promissory note, deed of trust, and buyer's occupancy and resale restriction with right of first refusal substantially similar to this Agreement, the City shall cause a completed and executed Form of Release to be recorded against the Home to release the Owner from this Agreement and the City Deed of Trust, and the Owner shall, thereafter, have no further liability under the City Note.

Section 8.2 Nondiscrimination. The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, gender or gender identification, sex, sexual orientation, family or marital status, ancestry, veteran status, or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Home. The foregoing covenant shall run with the land.

Section 8.3 Severability. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 8.4 Controlling Law and Venue. The terms of this Agreement shall be construed according to the laws of the State of California, and venue for any legal action arising out of or pertaining to this Agreement shall be in Sonoma County, California.

Section 8.5 No Waiver. No delay or omission in the exercise of any right or remedy of the City upon any Default by the Owner shall be construed as a waiver of such right, or of a continuing waiver in the case of future Defaults.

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14 Section 8.6 Notices. Wherever this Agreement requires any notice from either party, the notice shall be sent by personal delivery, certified mail, return receipt requested, or express delivery service with a delivery receipt, and shall be deemed effective as of the date received or the date delivery was refused as indicated in a return receipt. Unless otherwise provided by either party by written notice to the other party, notice to the Owner shall be to the address of the Home, and notice to the City shall be to the attention of the City Manager to the then current address of City Hall.

Section 8.7 Covenants Running with the Land.
(a) Owner hereby subjects the Home to the covenants and restrictions set forth in this Agreement. Owner hereby declares his or her express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land for the term of this Agreement, and shall pass to and be binding upon all parties having any interest in the Home throughout the term of this Agreement. Each and every contract, deed, lease or other instrument covering, conveying or otherwise transferring the Home or any interest therein, as the case may be, shall conclusively be held to have been executed, delivered and accepted subject to this Agreement regardless of whether the other party or parties to such contract have actual knowledge of this Agreement.
(b) The Owner and the City hereby declare their understanding and intent that, (1) The covenants and restrictions contained in this Agreement shall be construed as covenants running with the land pursuant to Civil Code Section 1468, and not as conditions which might result in forfeiture of title by Owner; (2) The burden of the covenants and restrictions set forth in this Agreement touch and concern the Home in that the Owner's legal interest in the Home may be rendered less valuable thereby; and
(3) The benefit of the covenants and restrictions set forth in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Home by eligible purchasers, the intended beneficiaries of such covenants and restrictions. (4) All covenants and restrictions contained herein without regard to technical classification or designation shall be binding upon Owner for the benefit of the City and eligible purchasers, and such covenants and restrictions shall run in favor of such parties for the entire period during which such covenants and restrictions shall be in force and effect, without regard to whether the City is an owner of any land or interest therein to which such covenants and restrictions relate.

Section 8.8 Owner's Acknowledgment of Resale Restriction. Owner hereby acknowledges and agrees that:
(a) Owner hereby subjects the Home to certain restrictions, and limits the price for which Owner may sell the Home and the persons to whom Owner may sell the Home.

The resale price limitation, and other provisions contained in this Agreement, restrict the full Item 6.d
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15 benefits of owning the Home. Owner may not enjoy the same economic or other benefits from owning the Home that Owner would enjoy if this Agreement did not exist. (b) Absent the provisions of this Agreement, the Home could not be made available to eligible purchasers at a Middle Income Housing Cost, including Owner. (c) Owner understands all of the provisions of this Agreement. Owner accepts and agrees to the provisions of this Agreement with the understanding that this Agreement will remain in full force and effect as to the Home following any Transfer of the Home throughout the term of this Agreement.
(d) OWNER UNDERSTANDS THAT THE DETERMINATION OF THE

MAXIMUM RESTRICTED RESALE PRICE OF THE HOME TO AN ELIGIBLE

PURCHASER CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER,

TAKING INTO CONSIDERATION INCREASES IN AREA MEDIAN INCOME AND

OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED AND THAT THE

SALES PRICE PERMITTED HEREUNDER MAY NOT INCREASE OR DECREASE IN THE

SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS AGREEMENT. OWNER FURTHER ACKNOWLEDGES THAT

AT ALL TIMES IN SETTING THE SALES PRICE OF THE HOME THE PRIMARY

OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO MIDDLE INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST.

THE MAXIMUM RESTRICTED RESALE PRICE WILL ALMOST CERTAINLY BE LESS THAN OTHER SIMILAR PROPERTIES THAT HAVE NO RESTRICTIONS. [Signatures to Follow]
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S-1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

CITY: _ OWNER:

CITY OF HEALDSBURG,
a municipal corporation
By:

Name:

By:

Name:

City Manager
[Signature Must Be Notarized]
APPROVED AS TO FORM:

By:

City Attorney
ATTEST:

By:

City Clerk
By:

Name:
[Signatures Must Be Notarized]
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S-2

STATE OF CALIFORNIA )
)

COUNTY OF )
On , before me, , Notary Public,
personally appeared , who proved to me on the
basis of satisfactory evidence to be the person(s) whose 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.

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Name: ______________________________
Notary Public

STATE OF CALIFORNIA )
)

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.

Name:

Notary Public
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.

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S-4

STATE OF CALIFORNIA )
)

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.

Name:

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APPENDIX A

LEGAL DESCRIPTION
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APPENDIX B

CITY NOTE
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APPENDIX C

CITY DEED OF TRUST
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APPENDIX D

FORM OF RELEASE
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CITY OF HEALDSBURG

CITY COUNCIL/REDEVELOPMENT SUCCESSOR AGENCY

REGULAR MEETING MINUTES
August 4, 2025

CITY HALL COUNCIL CHAMBER
401 Grove Street, Healdsburg
.

CALL TO ORDER/ROLL CALL
Mayor/Chairperson Mitchell called to order the concurrent meeting of the City Council and Redevelopment Successor Agency of the City of Healdsburg at 6:00 p.m. with the following Council Members present:

Present: Council Members/: Edwards, Hagele, Herrod, Kelley and Mayor Mitchell Board Members

Absent: Council Members/: None
Board Members

APPROVAL OF AGENDA
On a motion by Councilmember Kelley, seconded by Councilmember Edwards, approved the August 4, 2025, City Council and Redevelopment Successor Agency meeting agenda as submitted. The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None)

REPORT ON CLOSED SESSION
Mayor Mitchell reported a Closed Session was held and direction was given to staff.

ANNOUNCEMENTS/PRESENTATIONS
None.

CITY MANAGER REPORTS
City Manager Kay welcomed Council back from the July recess, commented on the Guelaguetza event that occurred during the break, noted the continuing of Tuesdays in the Plaza, announced the upcoming National Night Out event, provided information on the Strike Team Deployment to a fire in Lake County and the upcoming completion of the most recent sidewalk improvements.

PUBLIC COMMENTS ON ITEMS ON THE CONSENT CALENDAR AND NON

AGENDA ITEMS
Ted Calvert thanked the Council for the additional bike rack that was placed in front of Acorn Cafe.

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Brigette Mansell commented on her recent meetings with a few City Staff, thanked the Council for the mailer she received in the mail and housing in Healdsburg.

Mark McMullen asked Council to agendize a discussion on the lane width along March Avenue.

Judy Fujita asked Council to agendize a discussion on the lane width along March Avenue and direct staff to study a 10-foot lane width option.

Doug Lyle commented on March Avenue and encouraged Council to reduce March Avenue to 10-foot lane width.

Sashan Olden encouraged Council to move forward with 10-foot lanes along March Avenue.

Norm Fujita commented on March Avenue and expressed a desire to see a discussion agendized on the potential for 10-foot lanes along March Avenue.

Marcy Flores Executive Director at Corazón Healdsburg thanked the City and the Council for support over the years.

CONSENT CALENDAR
On a motion by Councilmember Kelley, seconded by Councilmember Hagele, approved the Consent Calendar as follows:

A. APPROVAL OF MINUTES
By motion, approved the December 2, 2024 Regular Meeting Minutes, the December 16, 2024 Special Meeting Minutes, the December 16, 2024 Regular Meeting Minutes, the January 6, 2025 Special Meeting Minutes, the January 6, 2025 Regular Meeting Minutes and the January 21, 2025 Regular Meeting Minutes.. (Ayes 5, Noes 0, Absent - None) B. APPROVAL OF DISBURSEMENT REPORT FOR WITHDRAWALS DURING THE MONTH OF JUNE 2025
By motion, approved the Disbursement Report for June 2025. (Ayes 5, Noes 0, Absent - None)
C. APPROVAL OF DISBURSEMENT REPORT FOR WITHDRAWALS DURING THE MONTH OF MAY 2025
By motion, approved the Disbursement Report for May 2025. (Ayes 5, Noes 0, Absent - None)
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D. RECEIVE THE MONTHLY INVESTMENT REPORT FOR MAY 2025
By motion, received and approved the Monthly Treasurer’s Investment Report for May 2025. (Ayes 5, Noes 0, Absent - None)
E. RECEIVE THE MONTHLY INVESTMENT REPORT FOR JUNE 2025
By motion, received and approved the Monthly Treasurer’s Investment Report for June 2025. (Ayes 5, Noes 0, Absent - None)
F. PROFESSIONAL SERVICES AGREEMENT WITH CORAZÓN HEALDSBURG Adopted Resolution No. 59-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH CORAZÓN HEALDSBURG FOR THE PROVISION OF

OUTREACH AND SUPPORT SERVICES TO THE LATINO/A/E COMMUNITY AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT.” (Ayes 5, Noes 0, Absent - None)
G. PUBLIC INFORMATION AND COMMUNITY ENGAGEMENT OFFICER
Adopted Resolution No. 60-2025, titled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG RESCINDING RESOLUTION NO. 130-2024,

REESTABLISHING THE AUTHORIZED POSITION LIST AND CORRESPONDING SALARY SCHEDULE EFFECTIVE AUGUST 4, 2025, AND AMENDING THE FISCAL YEAR 2025-26 ADOPTED BUDGET.” (Ayes 5, Noes 0, Absent - None) H. CANNABIS LOCAL JURISDICTION RETAIL ACCESS GRANT PROGRAM Adopted Resolution No. 61-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG AUTHORIZING STATE OF CALIFORNIA LOCAL JURISDICTION CANNABIS RETAIL ACCESS GRANT PROGRAM FUNDING.” (Ayes 5, Noes 0, Absent - None)
I. PROFESSIONAL SERVICES AGREEMENT WITH BRANDLEY ENGINEERING, INC.

Adopted Resolution No. 62-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH BRANDLEY ENGINEERING, INC. IN THE NOT-TO-EXCEED AMOUNT OF $196,000.00 FOR ENVIRONMENTAL AND ENGINEERING DESIGN Item 6.e
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SERVICES FOR THE HEALDSBURG MUNICIPAL AIRPORT RUNWAY 13-31

PAVEMENT RECONSTRUCTION PROJECT, CONTINGENT UPON FAA FUNDING,

AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND

EXECUTE ADDITIONAL ITEMS ASSOCIATED WITH APPLYING FOR AND RECEIVING GRANT FUNDING FOR THE PROJECT ON THE CITY’S BEHALF, AND AMENDING THE FISCAL YEAR 2025-26 ADOPTED BUDGET.” (Ayes 5, Noes 0, Absent - None)
J. HEALDSBURG MUNICIPAL AIRPORT REHABILITATE TAXIWAY A (NORTH), TAXIWAY A1, NORTH APRON, ACCESS ROAD AND SOUTH APRON PROJECT

BID AWARD
Adopted Resolution No. 63-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG CONDITIONALLY AWARDING THE HEALDSBURG MUNICIPAL AIRPORT REHABILITATION TAXIWAY A (NORTH), TAXIWAY A1,

NORTH APRON, ACCESS ROAD AND SOUTH APRON PROJECT CONSTRUCTION CONTRACT TO TERRACON CONSTRUCTORS, INC. OF HEALDSBURG,
CALIFORNIA IN THE AMOUNT OF $497,856, CONTINGENT UPON THE FAA

FUNDING, AUTHORIZING THE CITY MANAGER TO EXECUTE THE CONTRACT AND EXECUTE THE FAA GRANT AGREEMENT FOR THE PROJECT;

AUTHORIZING THE CITY ENGINEER TO NEGOGIATE AND APPROVE CONTRACT CHANGE ORDERS UP TO 10% OF THE ORIGINAL CONTRACT AMOUNT AND

APPROVING A PROFESSIONAL SERVICES AGREEMENT WITH BRANDLEY ENGINEERING, INC. IN THE NOT-TO-EXCEED AMOUNT OF $95,000 TO PROVIDE

ENGINEERING AND CONSTRUCTION MANAGEMENT FOR THE PROJECT,

AUTHORIZING THE CITY MANAGER TO EXECUTE THE AGREEMENT AND AMENDING THE ADOPTED FISCAL YEAR 2025-2026 BUDGET.” (Ayes 5, Noes 0, Absent - None)
K. ACCEPT THE HEALDSBURG MUNICIPAL RECYCLED WATER PIPELINE PROJECT, PROJECT WA004, AS COMPLETE
Adopted Resolution No. 64-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG ACCEPTING THE HEALDSBURG MUNICIPAL

RECYCLED WATER PIPELINE PROJECT AS COMPLETE AND AUTHORIZING STAFF TO FILE THE NOTICE OF COMPLETION.” (Ayes 5, Noes 0, Absent - None) L. FOLEY FAMILY COMMUNITY PAVILION ENVIRONMENTAL ENGINEERING

AND GEOTECHNICAL ENGINEERING SERVICES CONTRACT AMENDMENTS Adopted Resolution No. 65-2025, titled “A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF HEALDSBURG APPROVING AMENDMENTS TO THE
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PROFESSIONAL SERVICES AGREEMENTS WITH (1) EBA ENGINEERING FOR ENVIRONMENTAL ENGINEERING SERVICES; AND (2) PJC ASSOCIATES INC FOR

GEOTECHNICAL OBSERVATIONS AND SPECIAL INSPECTION AND TESTING

SERVICES FOR THE FOLEY FAMILY COMMUNITY PAVILION PROJECT,

AUTHORIZING THE CITY MANAGER TO EXECUTE THE AMENDMENTS AND INCREASING THE NOT TO EXCEED AMOUNT TO $133,872 AND $107,033 RESPECTIVELY.” (Ayes 5, Noes 0, Absent - None)
The motion to approve the Consent Calendar as above carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent - None)

PUBLIC HEARINGS
None.

OLD BUSINESS
None.

NEW BUSINESS – UPDATE TO THE 2022 CALIFORNIA BUILDING CODE

AMENDMENTS
Building Official Willoughby stated the action this evening was to introduce an Ordinance updating the 2022 Building Code. Official Willoughby provided information on Assembly Bill 130, the purpose of the proposed ordinance and reviewed the changes included in the proposed ordinance.

In response to Council’s inquiries, Official Willoughby provided information on the appeal process.

Public Comment
Brigette Mansell inquired if the proposed amendments would change any current projects.

On a motion by Councilmember Hagele, seconded by Councilmember Edwards, introduced for first reading, by title only, waiving further reading of the text, “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HEALDSBURG AMENDING CHAPTER 15.04 OF THE HEALDSBURG MUNICIPAL CODE AND ADOPTING BY REFERENCE PART 11 – CALIFORNIA GREEN BUILDING STANDARDS CODE OF THE 2022 CALIFORNIA BUILDING STANDARDS CODE TITLE 24 AND THE 2021 INTERNATIONAL PROPERTY

MAINTENANCE CODE IN ITS ENTIRETY, AND MAKING LOCAL AMENDMENTS TO THE 2022 CALIFORNIA BUILDING CODE, THE 2022 CALIFORNIA RESIDENTIAL Item 6.e
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CODE, THE 2022 GREEN BUILDING CODE, AND THE 2021 INTERNATIONAL PROPERTY MAINTENANCE CODE.” The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None)
On a motion by Councilmember Kelley, seconded by Councilmember Hagele, set a public hearing on adoption of the ordinance for August 18, 2025, and publish notice of the public hearing in accordance with Government Code Sections 50022.3 and 6066. The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None) NEW BUSINESS – PAVEMENT PRESERVATION PRESENTATION
Public Works Director Zimmer provided information on pavement material, the lifecycle of payment, cost effective way to treat pavement before it declines and the amount of pavement the City maintains in miles. Director Zimmer further reviewed what a pavement management program is, the pavement management program Healdsburg is using, the condition of pavement (PCI) in Healdsburg, how pavement conditions are calculated and maintenance treatments for pavement.

Additionally, Director Zimmer reviewed different pavement condition scenarios over the next five years.

In response to Council’s inquiries, Director Zimmer provided information on the factors that go into selecting street segments, how the software Healdsburg uses to assist with the decisions and the cost to bring the City’s PCI average up to 80.

There were no public comments on this item.

City Manager Kay informed the Council staff would return with different funding options in the next few months on how to address streets.

NEW BUSINESS – LOCAL PREFERENCE POLICY FOR AFFORDABLE HOUSING Housing Director Sotomayor provided information on the City’s Local Preference Policy including when the Policy was established, the outcomes of the Policy to date and why the Policy works. Director Sotomayor reviewed Senate Bill 649, what SB649 enables City’s to do and the compliance requirements contained in SB649.

Additionally, Director Sotomayor provided information on adopting an ordinance to implement SB649, including timeline and cost and staff proposed enhancements to a potential ordinance.

Director Sotomayor noted the fiscal impact for a proposed ordinance and the required study needed to adopt an ordinance.

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In response to Council’s inquiries, Director Sotomayor provided information on the percentage of inclusionary units that could be included in the ordinance, how the current Local Preference Policy is being implemented and how tenants can navigate substandard housing conditions.

Director Sotomayor further provided information on marketing plans.

Public Comments
Brigette Mansell commented on housing and encouraged Council to support the creation of a Local Preference Policy with teeth.

Following discussion and comments by Council, there was Council consensus to move forward with directing staff to include staffs recommended enhancements and to adopt the policy by ordinance pursuant to Senate Bill 649.

NEW BUSINESS – DISCUSSION OF UPDATE PROCESS FOR THE COUNCIL

PROTOCOLS
Assistant City Manager Mitts stated the action was to provide direction to staff on updating the City Council Protocols. Manager Mitts provided information on how this item landed on an agenda, the preliminary review of the protocols conducted by staff and noted the recommendation from staff to create a Council subcommittee to work through updating the Council Protocols.

In response to Council’s inquiries City Attorney Zutler provided information on how Councilmembers who are not on the subcommittee can provide feedback.

Council discussion ensued on updating the protocols, creating a subcommittee and providing feedback to staff.

City Manager Kay provided information on staff recommendation to create a subcommittee to update the protocols.

Public Comment
Sonia Byck-Barwick read aloud a letter encouraging Council to bring back Zoom public comments and adding potential times to the agenda on when items may occur.

Council discussion ensued on forming a subcommittee and how the subcommittee would operate and the full Council seeing updates.

On a motion by Councilmember Hagele, seconded by Councilmember Edwards, appointed Mayor Mitchell and Councilmember Kelley to the subcommittee to review and update the Item 6.e
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Council Protocols. The motion carried on a unanimous roll call vote. (Ayes 5, Noes 0, Absent – None)

COUNCIL REPORTS ON MATTERS OF INTEREST OCCURRING SINCE PREVIOUS

REGULAR MEETING/EXPENSE REIMBURSEMENT REPORTS
Councilmember Hagele reported he attended the NCPA meeting in Washington D.C. and in Murphys.

Councilmember Kelley reported she attended the Northern Sonoma County Air Pollution Control District meeting, the cultural burn ceremony on Fitch Mountain, Prune Packers baseball games, the SCTA/RCPA meeting, Wine Country to the Rescue fundraising event and various ribbon cutting events for new businesses in Healdsburg.

Councilmember Edwards reported he attended various ribbon cutting events for new businesses in Healdsburg, Guelaguetza and the Senior Citizen Advisory Commission meeting.

Vice Mayor Herrod reported he attended various ribbon cutting events for new businesses in Healdsburg, the Library grand re-opening, the ABAG meeting in San Francisco, the CEO Roundtable event, the Chamber board meeting, the Arts and Culture Commission meeting, Prune Packers games, 4th of July festivities and the Guelaguetza event.

Mayor Mitchell reported she attended the Chamber CEO Roundtable, the Library re-opening, 4th of July kids parade, the Saggio Hills ribbon cutting ceremony and attended a few meetings with various Mayors on homelessness.

ADJOURNMENT
There being no further City Council/Redevelopment Successor Agency business to discuss, the meeting was adjourned at approximately 8:35 p.m.

APPROVED: ATTEST:
_________________________________ __________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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CITY OF HEALDSBURG

CITY COUNCIL AGENDA STAFF REPORT
MEETING DATE: October 20, 2025
SUBJECT: Professional Services Agreement with Mark Thomas and Company Inc.

PREPARED BY: Terrie Zwillinger, Senior Project Manager
STRATEGIC INITIATIVE(S):

Maintain and Improve Infrastructure and Facilities
RECOMMENDED ACTION(S):

COMMUNITY ENGAGEMENT/OUTREACH:

The City held a Public Information meeting for the US 101/Dry Creek Road Interchange Improvements Project on July 17, 2025, to solicit input from the community on the Project, in addition to four other City projects. An online survey was available from July 15, 2025, to July 25, 2025, for the public to provide direct input about the five projects. The City received 35 responses specific to the US 101/Dry Creek Road Interchange Project, including requests to address pedestrian and bicyclist safety with visibly separated facilities, evaluate roundabout and signal control options during the pre-design phase, and clarify cost, benefits, and project timing relative to the broader City needs.

The City will continue to engage the public and stakeholders through the project initiation document (PID) phase and additional phases of the project. The outreach is anticipated to include public engagement meetings, establishment of a stakeholder group, mailers to residents, social media posts, and a project specific page on the City’s website. There will be as needed updates to the City Council in the form of memorandum or presentation.

BACKGROUND:

The US 101/Dry Creek Road interchange was constructed in early 1960s as part of the Healdsburg freeway bypass. The Dry Creek Road corridor from the western City limits to Healdsburg Avenue Item 8.a
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is one of the busiest locations in the City. In 2020, as an interim improvement to reduce delays, east and westbound STOP signs were added at the southbound on/off ramp intersection and Dry Creek Road was widened to add left turn lanes for both the northbound and southbound ramp access. The interim improvements were implemented through a cooperative agreement with Sonoma County in 2020 and reduced traffic backups; however, peak hour delays are still excessive.

Sonoma County and the City of Healdsburg, in partnership, agree that additional improvements to the interchange are a high priority for both agencies. The existing US 101/Dry Creek Road Interchange cannot accommodate the existing and future traffic volumes, which causes backups at the ramp intersections and east of the interchange. Currently there are no sidewalks on either side of Dry Creek Road under US 101, and the signalized intersection of Dry Creek Road and Grove Street lacks compliant curb ramps and pedestrian push buttons.

In 2020, a Feasibility Study Report (Study) was prepared to identify a project to resolve traffic impacts and improve bicycle and pedestrian safety to the US 101/Dry Creek Road Interchange area. The Study proposed a project consisting of either a roundabout couplet or coordinated traffic signals at the on and off ramps at the interchange to improve traffic operations, installation of new sidewalks, upgraded bike facilities, and the replacement of curb ramps and pedestrian push buttons on all four corners of the Dry Creek Road/Grove Street intersection.

In April of 2024, the City was awarded $500,000 as part of the Sonoma County Transportation and Climate Authority (SCTCA) Funding Program Cycle 1 for the development of a Project Initiation Document (PID) for the US 101/Dry Creek Road Interchange Improvements Project. In order to receive and utilize the funds, it is necessary to execute a cooperative funding agreement with SCTCA.

In August of 2025, with City Council support, staff submitted a grant application to the SCTCA for five priority projects, one of which was the US 101/Dry Creek Road Interchange Improvements Project (as described in the 2020 Feasibility Study). The application to SCTCA requested $12M in grant funds for both design and construction phases of the Project. The total Project cost is estimated to be $17M. Sonoma County has committed to providing $2M for the construction phase because a portion of the proposed improvements is within the County’s right-of-way.

Notification of potential grant funding award is expected to occur by the winter of 2026. If the Project receives the grant funding, the next phases would be environmental and design, with construction estimated to be complete in 2030.

Because a portion of the Project improvements are within State Highway right-of-way, the Project is required to follow a specific Caltrans project development process. The first step in this process is the preparation of a Project Initiation Document (PID), followed by Project Approval and Environmental Document (PA&ED), Plans Specifications and Estimate (PS&E), right-of-way, and finally construction. Because the Project is partially located within Caltrans right-of way, the entire process typically takes between 45 to 90 months to complete, depending on the complexity of the Project.

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The PID phase consists of preparing a Project Study Report/Project Development Support (PSR/PDS) document that confirms the purpose and need of the project, outlines refined project alternatives, documents stakeholder input/public outreach, determines anticipated right-of-way requirements, provides updated cost estimates and schedule, and defines the approach for the environmental and traffic studies that would be undertaken in a future Project Approval and Environmental Document phase.

In order to reimburse Caltrans for review and approval of the PID, the City and Caltrans will enter into a Cooperative Agreement for the PID. The estimated reimbursements included in the Cooperative Agreement are $213,000 for Caltrans staff time, which includes quality management, review of existing reports, data, studies and mapping, along with the PID circulation, review, and approval.

On June 23, 2025, City staff advertised a request for proposals (RFP) from qualified consultant firms with relevant experience and knowledge to prepare the PID for the Project.

Three qualified firms submitted proposals within the specified submittal deadline. Staff reviewed the proposals and determined they met the minimum submittal requirements, including scope of services, liability coverage, submittal forms, and statements. Staff further evaluated the proposals against pre-established criteria, contacted references, and conducted interviews. The interview panel was made up of City staff and representatives from Caltrans, Sonoma County, and SCTCA.

Based on this extensive evaluation, Mark Thomas and Company Inc. (Mark Thomas) was deemed most qualified to complete this work.

DISCUSSION/ANALYSIS:

Staff met with Mark Thomas for a detailed discussion about scope, schedule, the City’s expectations, and the proposed fee estimate for services. Staff negotiated portions of the scope and fee with Mark Thomas and have determined that the cost of services in the amount of $407,115.07 is reasonable.

The completed and approved PID will be used as the basis for the next phases of the Project.

ENVIRONMENTAL STEWARDSHIP:

Reuse, recycling, waste diversion, construction vehicle emission reduction, and storm water treatment will be implemented into the design where possible.

ALTERNATIVES:

Staff recommends City Council adopt the attached resolution to approve a Professional Services Agreement with Mark Thomas to provide engineering services for the PID phase of US 101/Dry Creek Road Interchange Improvements Project, approve a Cooperative Funding Agreement with SCTCA in the amount of $500,000, and approve a Cooperative Agreement with Caltrans in the amount of $213,000.

The City Council may choose not to adopt the recommended resolution and direct staff to readvertise the RFP, not accept the grant funding, or not move forward with the Project at this time. However, this would jeopardize the $500,000 in SCTCA funding, potentially jeopardize receiving the potential future $12,000,000 in grant funding and leave the existing interchange Item 8.a
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deficiency unaddressed.

FISCAL IMPACT:

The proposed PID phase engineering design services contract with Mark Thomas is for an amount not-to-exceed $407,115. The estimated fee for the Caltrans Cooperative Agreement staff time review reimbursement is $213,000. City staff costs are estimated to be $79,885, bringing the total PID phase budget to $700,000.

The current Fiscal Year 2025-26 Adopted Budget does not include funding for the project. Staff recommends amending the current fiscal year budget by appropriating the $500,000 of SCTCA State Transportation Improvement Program Exchange Funds (SEF) along with $200,000 from the Traffic Impact Fee Fund for the PID phase of the project.

There are sufficient available funds in the Traffic Impact Fee Fund.

ENVIRONMENTAL ANALYSIS:

Approval of the professional services agreement or cooperative agreements are not a project pursuant to the California Environmental Quality Act (CEQA) because it can be seen with certainty based on substantial evidence in the record that the approval constitutes a government fiscal activity that does not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. (CEQA Guidelines section 15378(b)(4).) Further, the approval is an administrative activity that would not have the potential to either (1) cause a direct physical change in the environment or (2) cause a reasonably foreseeable indirect physical change in the environment. The US 101/Dry Creek Road Interchange Project PID Phase is the preparation of a scoping document. Therefore, any CEQA analysis would be speculative at this time.

ATTACHMENT(S):

Resolution
Exhibit A - Budget Amendment
Mark Thomas Proposal
Caltrans Cooperative Agreement
SCTCA Cooperative Funding Agreement
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CITY OF HEALDSBURG
RESOLUTION NO. - 2025

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

HEALDSBURG APPROVING A PROFESSIONAL SERVICES
AGREEMENT WITH MARK THOMAS AND COMPANY INC. FOR
ENGINEERING SERVICES FOR THE US 101/DRY CREEK ROAD
INTERCHANGE IMPROVEMENTS PROJECT IN THE NOT-TOEXCEED AMOUNT OF $407,115.07, APPROVING A

COOPERATIVE FUNDING AGREEMENT WITH SONOMA

COUNTY TRANSPORTATION AND CLIMATE AUTHORITIES IN
THE AMOUNT OF $500,000, APPROVING A COOPERATIVE
AGREEMENT WITH CALTRANS IN THE AMOUNT OF $213,000,

AUTHORIZING THE CITY MANAGER TO EXECUTE THE

AGREEMENTS, AND AMENDING THE ADOPTED FISCAL YEAR
2025-26 BUDGET
WHEREAS, the existing US 101/Dry Creek Road Interchange cannot accommodate the existing and future traffic volumes, resulting in backups at the ramp intersections and east of the interchange; and
WHEREAS, currently there are no sidewalks on either side of Dry Creek Road under US 101 and the signalized intersection of Dry Creek Road and Grove Street lacks compliant curb ramps and pedestrian push buttons; and
WHEREAS, Sonoma County and the City of Healdsburg, in partnership, agree that additional improvements to the interchange are a high priority for both agencies; and WHEREAS, in 2020, a Feasibility Study Report (Study) was prepared to identify a project to resolve traffic impacts and improve bicycle and pedestrian safety to the US 101/Dry Creek Road interchange area; and
WHEREAS, the Study proposed a project consisting of either a roundabout couplet or coordinated traffic signals at the on and off ramps at the interchange to improve traffic operations, installation of new sidewalks and upgraded bike facilities, and the replacement of curb ramps and pedestrian push buttons on all four corners of the Dry Creek Road/Grove Street intersection; and WHEREAS, in April of 2024 the City was awarded $500,000 as part of the Sonoma County Transportation and Climate Authorities (SCTCA) Funding Program Cycle 1 for the development of a Project Initiation Document (PID) for the US 101 / Dry Creek Road Interchange Improvements Project; and
WHEREAS, a portion of the Project improvements are within State Highway right-ofway, which requires the Project to follow a specific Caltrans project development process; and Item 8.a
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WHEREAS, the first step in the Caltrans project development process is the preparation of a Project Initiation Document (PID); and
WHEREAS, in order to reimburse Caltrans for review and approval of the PID, the City and Caltrans will enter into a Cooperative Agreement for the PID in the amount of $213,000; and WHEREAS, on June 23, 2025, City staff requested proposals (RFP) from qualified consultant firms/teams with relevant experience and knowledge to prepare the PID and received three proposals; and
WHEREAS, staff reviewed the proposals and interviewed all three firms; and WHEREAS, based on the evaluation, Mark Thomas and Company Inc. (Mark Thomas) was determined to be the firm best suited to complete the PID; and WHEREAS, the proposed fee by Mark Thomas for services is a not to exceed amount of $407,115.07; and
WHEREAS, the completed and approved PID will be used as the basis for the next phases of the Project; and
WHEREAS, in conjunction with the design contract, the estimated fee for the Caltrans Cooperative Agreement is $213,000 and staff costs are estimated to be $79,885, bringing the total cost for the PID phase to $700,000; and
WHEREAS, the current adopted Fiscal Year 2025-26 (FY25/26) Budget does not include funding for the project; and
WHEREAS, staff recommends amending the current fiscal year budget by appropriating the $500,000 of SCTCA State Transportation Improvement Program Exchange Funds along with $200,000 from the Traffic Impact Fee Fund for the PID phase of the project; and WHEREAS, the recommended actions do not constitute a "project" under CEQA, pursuant to Section 15378(b)(4) of the California Environmental Quality Act (CEQA) and no further action is required.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Healdsburg hereby:

1. Approves a Professional Services Agreement with Mark Thomas to provide engineering services for the US 101/Dry Creek Road Interchange Improvements Project for a not to exceed amount of $407,115.07.

2. Approves a Cooperative Funding Agreement with Sonoma County Transportation and Climate Authorities in the amount of $500,000.

3. Approves a Cooperative Agreement with Caltrans in the amount of $213,000.

4. Authorizes the City Manager to execute the Agreements.

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5. Amends the adopted Fiscal Year 2025-26 budget as depicted in the attached Exhibit A.

PASSED, APPROVED, AND ADOPTED, this 20th day of October, 2025, by the following vote:

SO ORDERED: ATTEST:
__________________________________ __________________________________ Evelyn L. Mitchell, Mayor Raina Allan, City Clerk
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Resolution No.

Exhibit A
Account Number Increase Amount Decrease Amount Description 512-6162-45000-ST015 $ 700,000 Establish Budget for US-101 and Dry Creek Road Interchange Project ST015 512-1000-39001-00000 $ 200,000 Increase Transfer In from Traffic Impact Fee Fund for Project ST015 910-8080-42301-00000 $ 200,000 Increase Transfer Out to Streets Capital Fund for Project ST015 512-1000-34004-00000 $ 500,000 Increase SCTCA Grant Revenue for Project ST015 FY 25-26 Budget Amendment
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SCOPE OF SERVICES (9/15/2025)
The City completed a feasibility study in October of 2020 for the US 101/Dry Creek Road Interchange Project that evaluated potential alternatives for local road improvements along Dry Creek Road between Kinley Drive west of US 101 to just east of Grove Street on the east side of US 101. The feasibility study evaluated alternative intersection treatments where the US 101 northbound and southbound ramps connect with Dry Creek Road that could include signals or roundabouts. The City intends to seek future funding for the Project that could come from State or Federal funding sources, which requires the Project to be programmed to be eligible for funding. With the completion of the 2020 feasibility study, the City is moving forward to undertake the Project Initiation Document (PID) phase under Caltrans oversight for the project. A PSR-PDS will be prepared to document the findings of the PID phase, confirm the purpose and need of the project, outline refined project alternatives, provide updated cost estimates and schedule, and define the approach for the environmental and traffic studies that would be undertaken in a future PA&ED phase.

The Mark Thomas Team will perform the following major tasks.

TASK 1. PROJECT MANAGEMENT (WBS 100)
TASK 2. ENGINEERING STUDIES (WBS 150.10)
TASK 3. PREPARATION OF PROJECT INITIATION DOCUMENT - PROJECT STUDY REPORT (WBS 150)

OPTIONAL TASKS
Mark Thomas will supervise, coordinate and monitor planning and design for conformance with Caltrans standards and policies, prepare and provide regular updates of the project schedule, and maintain project files. Mark Thomas will manage the consultant team and prepare and submit monthly progress reports and invoices in accordance with City requirements. It is assumed that project management for the PID phase will occur over nine (9) months from NTP through to the approval by Caltrans of the PSR-PDS.

Meetings:

The Mark Thomas project manager shall coordinate with the City and Caltrans staff on a frequent basis; prepare agendas and records of meetings for monthly PDT meetings and focus meetings. Mark Thomas will lead the overall coordination effort with the project team in consultation with and under the direction of the City project manager. Mark Thomas will schedule, prepare for, and participate in project team meetings with key stakeholders to share project information, make decisions, assign project tasks, and identify items critical to project delivery. Key team members from the Mark Thomas team will be present at each team meeting depending on the items to be discussed. Mark Thomas will prepare and distribute agendas prior to each meeting and prepare meeting minutes with action items within one week after the meeting. It is assumed there will be:
• Up to nine (9) PDT meetings including kick-off (pre-PID meeting) held in a virtual format Attachment 2
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• Up to nine (9) focused meetings with Caltrans Functional Units held in a virtual format • Up to nine (9) meetings held with City in virtual format • One (1) project presentation to City Council
Schedule:

Mark Thomas will develop a Critical Path Method (CPM) milestone schedule and incorporate the activities in an overall schedule for the project. The project schedule will show all the expected sequence of tasks and subtasks and include durations for the performance of each task, subtask, milestones, submittal dates and review periods for each submittal.

Working with the City project manager and other project team members, Mark Thomas shall prepare, maintain and use critical action items list to monitor project progress and to implement recovery action plans. The CPM schedule will be updated monthly and discussed during the monthly PDT meetings.

Risk Register:

The Risk Register is a tool to be used to keep key stakeholders informed of risks and what efforts can be utilized to reduce risks and costs. Mark Thomas will develop the Risk Register, monitor, discuss during the monthly PDT meetings, and include as an attachment in the PSR-PDS.

Mark Thomas will establish, implement, and maintain a Quality Management Plan (QMP) that meetsthe City and Caltrans Quality Assurance (QA) Program requirements. The City and Caltrans will review the QMP for conformance with these requirements. The QMP will establish the Mark Thomas Quality Assurance (QA) Procedures, which includes performing Quality Control (QC) and QA audits for the project. The QA/QC program is overseen by a companywide Mark Thomas QA manager, whose role is to implement companywide QC standards, confirm and audit QC procedures on projects, and to verify that all finished products meet the current standard of practice.

Independent QC reviews will be performed at each level of completion by an experienced staff member not directly involved with the project. QC Checklists specific to the discipline involved in creating the deliverable will be used, with comments, responses by the design team, and verification of implementation fully documented.

QA audits will be performed at major milestones at least twice on the project by a QA auditor, who is not directly involved with the project. The QA audits will review all records of QC on the project and will provide feedback to the Mark Thomas project manager and principal in charge. QA audits review everything from completions of QC reviews to project budget, schedule, incorporation of client and stakeholder comments, and other tasks pertinent to the successful completion of the work on time and within budget.
• Monthly progress reports and invoice packages(PDF)
• Meeting agendas and minutes(PDF)
• CPM Schedule (PDF)
• Risk Register (PDF)
• QMP (PDF)
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Mark Thomas will request, collect, assemble, and review all pertinent and available project information, including, but not limited to, prior reports, environmental documents, environmental technical reports, CAD files and drawings, and other relevant correspondence.

Mark Thomas will send “A Letters” on City letterhead to utility companies with facilities in the project area project, requesting updated copies of their existing facility maps. Mark Thomas will prepare updated existing base utility mapping.

Encroachment permit applications will be prepared on City letterhead for submittal to Caltrans and Sonoma County for field work that will include visual observations of the project area.

Mark Thomas will prepare a mini-Preliminary Environmental Analysis Report (PEAR) document for the project based on the draft PEAR competed as a part of the feasibility study. The mini-PEAR will be prepared using the latest guidance and template available from the Caltrans SER. It is anticipated that the mini-PEAR will evaluate up to two build alternatives. The Purpose and Need (P&N) statement from the 2020 feasibility study will be re-evaluated and refined, if needed.

Building from the draft PEAR in the feasibility study, baseline information for the project area will be updated and/or collected and summarized in each environmental issue area in order to determine which technical studies will be required during PA&ED. For biological resources, cultural resources, farmland, visual and paleontological resources, record and map searches as well as a desktop survey will be conducted to determine what level of technical study will likely be required for environmental approval. Other environmental resources (e.g., land use, growth, community impacts, hydrology/floodplain, water quality, geology/soils, hazardous materials, air quality, noise, and energy) will be evaluated for the project using background research from available research materials and online resources.

As requested in the RFP, a Phase I ISA may be prepared during the PID phase. If the City desires a Phase I ISA at this time, the Mark Thomas team will ensure one is completed in tandem with the mini-PEAR for an added scope/fee. For the purposes of this proposal, we assume the Phase I ISA will be prepared during the PA&ED phase.

The draft mini-PEAR will be submitted to Caltrans for review and comment. We anticipate attending one virtual meeting that focuses on the mini-PEAR (Included in Task 1.2), and will respond to Caltrans comments on the draft (two rounds) before preparing the final mini-PEAR.

A TEPA will be prepared by W-Trans in the format required by Caltrans, including the following information:
• Operation under existing volumes, with existing geometrics and controls as well as with the improvements under consideration;
• Operation under anticipated future volumes, with both the existing and potential future configurations; • Warrants for converting to signalization, if appropriate; • Queuing and associated turn lane length requirements; • Review of the collision history and analysis of the collision rates; • Estimate of the crash reduction potential associated with the potential future improvements, and; Item 8.a
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• Need for additional improvements to achieve desired operational and safety conditions, if shortcomings in the proposed project are identified.

Note that no analysis of freeway operations is proposed as the project would not have a long-term effect on the freeway, though short-term effects may occur during construction. No new traffic counts are proposed.

It is assumed that a streamlined Stage 1 Intersection Safety and Operational Process (ISOAP) report will be needed as the project includes conversion to a signal or roundabout and the daily volume is less than 25,000 vehicles entering either ramp intersection. W-Trans will lead the preparation of the ISOAP report, including the following tasks:
• Assist the design team in determining intended project outcomes, place type and design vehicle. Compile available data.
• Assess pedestrian and bicycle access. While pedestrian activity is uncommon given the lack of attractors on the west side of the interchange, there is substantial bicycle traffic that must be accommodated. • Determine numbers of lanes needed for use by the design team in evaluating right-of-way needs. • Assess transit and freight needs to ensure geometrics accommodate such traffic. • Conduct safety assessment (note that this task is also covered in the TEPA scope above).

Mark Thomas shall perform preliminary hydraulics/hydrology studies to analyze on-site and off-site storm water flows for the project build alternatives. Mark Thomas shall identify requirements for hydraulic and storm water treatment design features as part of this task. Results of this study shall be considered and utilized in the project design. This task will include preparation of a preliminary Storm Water Data Report (SWDR) appropriate for the PID phase following Caltrans policies and procedures. It is assumed one SWDR will be prepared covering up to two (2) build alternative.

Mark Thomas shall perform the work necessary to utilize GIS level information to verify and document the existing right of way and prepare exhibits showing estimated right of way requirements (temporary and permanent) for up to two (2) build alternatives. Mark Thomas shall perform the work necessary to utilize GIS level information to verify and document the existing right of way and prepare exhibits showing estimated right of way requirements (temporary and permanent) for up to two (2) build alternatives. The resulting information will be included in a Right of Way Data Sheet prepared by Monument that will be included as an attachment to the PSR-PDS.

Mark Thomas will prepare quantities and unit costs for the proposed improvements. A total of two (2) cost estimates will be prepared using the 11-page Caltrans Preliminary Project Cost Estimate Summary. Approximate quantities will be developed, and unit costs determined based on the Caltrans Contract Cost Data database and recent applicable bid results. The 11- page estimate will also include supplemental items, state furnished materials and an estimate of Capital Outlay Support Costs. Preliminary costs for right of way acquisitions and identified utility relocations will also be included; these costs will be determined based on recently completed acquisitions and relocations within the project area.

Mark Thomas will prepare base maps and plan sheets for the review and approval of the Geometric Drawings (GeDs) for up to two (2) build alternatives. Plan sheets shall include horizontal and vertical alignments, typical sections, roadway Item 8.a
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layouts, signage and striping, preliminary drainage, permanent BMP locations, and existing utilities. Preparation of the base maps and plans sheets shall be performed in close coordination with Caltrans design staff.

Any design features not meeting the current version of the Caltrans Highway Design Manual (HDM) shall be documented in a risk matrix in the PSR-PDS with an associated probability of approval by Caltrans (Low, Medium or High). This scope specifically excludes preparation of a Design Standard Decision Document (DSDD). The PID phase does not require the preparation or approval of design exceptions as that takes place in the future PA&ED phase.

Mark Thomas will identify key aesthetic features for up to two (2) project alternatives. Aesthetic features may include gateways and/or monuments, placement of public art per the City’s Public Arts Policy, aesthetic hardscape treatments, enhanced planting features, LID treatments, etc. This task will include preparation of one schematic planting design plan and up to two (2) illustrative sections per alternative. The schematic planting plan will call out aesthetic features and show tree placement and ground plane massings on a single sheet (at 30-scale) per alternative. The planting plan will be colorrendered and will include a recommended plant palette.

Mark Thomas will provide support to the City for the following public outreach activities:
• One (1) pop-up event not exceeding 2 hours
• Up to three (3) exhibit boards for the pop-up event
• Postcards for distribution at the pop-up event with QR code linking to City website in both English and Spanish.

Postcards can also be left at public buildings such as City offices and libraries • One (1) virtual public workshop not exceeding 2 hours • City website update materials including exhibits and on-line survey Mailing of post cards to property owners adjacent to the project limits is excluded but could be included for an additional cost. Mark Thomas will prepare a summary report of the public outreach undertaken for the PID phase. • Utility “A” Letters (PDF)
• Encroachment Permit Applications on City Letterhead (PDF) • Updated Utility Base Mapping (DWG)
• Draft/Final PEAR (PDF)
• Draft/Final TEPA (PDF)
• Draft/Final ISOAP Report (PDF)
• Draft/Final SWDR (PDF)
• Draft/Final R/W Requirements Exhibit (PDF)
• Draft/Final R/W Data Sheet (PDF)
• Updated R/W Base Mapping (DWG)
• Draft/Final Cost Estimates (PDF)
• Draft/Final GeDs (PDF)
• Draft/Final Nonstandard Design Feature Matrix (PDF)
• Draft/Final Schematic Planting Plans and Sections (PDF) • Public Outreach Materials (PDF)
• Public Outreach Summary Report (PDF)
• Responses to Deliverable Comments (PDF)
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Mark Thomas will prepare supporting documentation required for the PSR-PDS based upon the requirements of the Caltrans Project Development Procedures Manual (PDPM). This includes the following:
• Quality Management Plan Scoping Document - Project specific Quality Assurance/Quality Control (QA/QC) plan • Division of Engineering PSR-PDS Scoping Checklist
• Transportation Planning Scoping Information Sheet (TPSIS) • Design Scoping Index – Discussion of anticipated alignments and alternatives and identification of any anticipated design exceptions.
• PSR-PDS Surveys Needs Questionnaire
• Complete Streets Decision Document (CSDD)
Mark Thomas will prepare the PSR-PDS for the project and include all the attachments documented elsewhere in this work plan.
• Draft/Final Quality Management Plan Scoping Document (PDF) • Draft/Final PSR-PDS Scoping Checklist (PDF)
• Draft/Final TPSIS (PDF)
• Draft/Final Design Scoping Index (PDF)
• Draft/Final PSR-PDS Survey Needs Questionnaire (PDF)
• Draft/Final CSDD (PDF)
• Draft/Final PSR-PDS (PDF)
• Responses to Deliverable Comments (PDF)
In addition to assumptions outlined previously in the scope, the Mark Thomas Team have the following key assumptions:

1. No survey mapping will be prepared for the PID phase in order to meet the 9-month delivery schedule. Available photographic aerial imagery will be utilized for the development of the GeDs and other supporting exhibits.

2. No structures are required and no impacts to the existing bridge structure supporting the US 101 mainline.

3. No geotechnical analysis supporting the structure design is required.

4. Project plans will be prepared in AutoCAD (DWG), using drafting standards as documented in the latest Caltrans Plan Preparation Manual.

5. If required, no fee encroachment permits will be secured from Caltrans, Sonoma County and the City of Healdsburg.

6. City will secure any needed permissions to enter upon private property to access and study/investigate the project area.

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7. All deliverables will be developed in a draft format, submitted for comment, and then a final version will be developed and approved by the City/Caltrans.

8. Typical review cycles by Caltrans are 4 weeks. To meet a 9-month delivery schedule to complete the PID phase, 2 week review cycles are assumed. Caltrans buy-in on this approach will be required.

Control Survey
Mark Thomas will perform a field survey to set control points along the alignment that will facilitate the collection of mobile LIDAR data. The horizontal survey datum will be the system will be California State Plane Coordinate (SPC) System California State Plane Coordinate (SPC) System (NAD83(2011)), US Survey feet based upon measurements to the current CSRC/SOPAC control network and in compliance with California public resources code. The vertical datum shall be the NAVD88 Datum, US Survey feet based upon ties the same network. Targets will be placed approximately every 1500’ . This task is limited to three (3) days of field work for a 3 person crew and two (2) days of field work for a 2 person crew.

Mobile Terrestrial LIDAR Survey (MTLS)
Once control targets are set Mark Thomas will drive the project route to capture (scan) the LIDAR Data. Mark Thomas will process the data from the control survey and utilize the coordinate values to process the trajectories of the mobile scan.

Once trajectory processing is complete the MTLS point cloud will be prepared for mapping that will serve as the base map to facilitate design efforts along the route.

Base Mapping from MTLS Point Cloud
Mark Thomas will utilize the processed point cloud to create a basemap to facilitate design efforts. Office staff will extract from the point cloud pertinent accessible/visible above ground features including sidewalks, building faces, fences, surface visible evidence of utilities, storm and sewer manhole lids, drain inlets, tree limits, street lighting, signing, striping, and markings along the project route. Limits of mapping will generally be from back of walk or edge of pavement (whichever is more applicable) on each side. Curb and gutter, street cross sections and data between curbs is excluded. Mapping will include planimetrics and a Digital Terrain Model.
• Topographic Mapping (DWG and DTM)
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COOPERATIVE AGREEMENT COVER SHEET
Work Description

THIS PROJECT PROPOSES TO IMPROVE TRAFFIC OPERATION ALONG DRY

CREEK ROAD, BETWEEN KINLEY DRIVE AND GROVE STREET IN THE CITY

OF HEALDSBURG, TO REDUCE TRAFFIC CONFLICTS AND BACKUPS AT THE US 101 RAMP INTERSECTIONS AND IMPROVE BICYCLE AND PEDESTRIAN ACCESS
Contact Information
The information provided below indicates the primary contact information for each PARTY to this AGREEMENT. PARTIES will notify each other in writing of any personnel or location changes. Contact information changes do not require an amendment to this AGREEMENT.

CALTRANS
Samira Norouzpour, Project Manager
111 Grand Avenue
Oakland, CA 94612
Office Phone: (510) 846-6374
Email: [email protected]

CITY OF HEALDSBURG
Terrie Zwillinger, Sr. Project Manager
401 Grove Street
Healdsburg, CA 95448
Office Phone: (707) 385-3503
Email: [email protected]
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Table of Contents
COOPERATIVE AGREEMENT COVER SHEET...........................................................................1 Work Description............................................................................................................................1 Contact Information........................................................................................................................1 CALTRANS ...............................................................................................................................1 CITY OF HEALDSBURG.........................................................................................................1 COOPERATIVE AGREEMENT.......................................................................................................4 RECITALS .........................................................................................................................................4 RESPONSIBILITIES .........................................................................................................................5 Sponsorship.....................................................................................................................................5 Implementing Agency ....................................................................................................................6 Funding...........................................................................................................................................7 CALTRANS' Quality Management................................................................................................7 Project Initiation Document (PID)..................................................................................................8 Additional Provisions ...................................................................................................................10 Standards...................................................................................................................................10 Noncompliant Work .................................................................................................................10 Qualifications............................................................................................................................11 Consultant Selection .................................................................................................................11 Encroachment Permits ..............................................................................................................11 Protected Resources..................................................................................................................11 Disclosures................................................................................................................................12 Hazardous Materials .................................................................................................................12 Claims .......................................................................................................................................13 Accounting and Audits .............................................................................................................13 Interruption of Work.................................................................................................................14 Penalties, Judgments and Settlements ......................................................................................14 GENERAL CONDITIONS ..............................................................................................................14 Item 8.a
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Venue............................................................................................................................................14 Exemptions ...................................................................................................................................15 Indemnification.............................................................................................................................15 Non-parties ...................................................................................................................................16 Ambiguity and Performance.........................................................................................................16 Defaults.........................................................................................................................................16 Dispute Resolution........................................................................................................................16 Prevailing Wage............................................................................................................................17 REIMBURSEMENT SUMMARY ..................................................................................................19 Funding.........................................................................................................................................20 Invoicing and Payment .................................................................................................................20 Project Initiation Document (PID)............................................................................................20 SIGNATURES .................................................................................................................................21 Item 8.a
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COOPERATIVE AGREEMENT
This AGREEMENT, executed on and effective from __________________________, is between the State of California, acting through its Department of Transportation, referred to as CALTRANS, and:

City of Healdsburg, a body politic and municipal corporation or chartered city of the State of California, referred to hereinafter as City.

An individual signatory agency in this AGREEMENT is referred to as a PARTY. Collectively, the signatory agencies in this AGREEMENT are referred to as PARTIES.

RECITALS

1. PARTIES are authorized to enter into a cooperative agreement for improvements to the State Highway System (SHS) per the California Streets and Highways Code, Sections 114 and 130 and California Government Code, Section 65086.5.

2. For the purpose of this AGREEMENT, this project proposes to improve traffic operation along Dry Creek Road, between Kinley Drive and Grove Street in the City of Healdsburg, to reduce traffic conflicts and backups at the US 101 ramp intersections and improve bicycle and pedestrian access, will be referred to hereinafter as PROJECT. City desires that a Project Initiation Document (PID) be developed for the PROJECT. The Project Initiation Document will be a Project Study Report-Project Development Support (PSR-PDS).

3. All obligations and responsibilities assigned in this AGREEMENT to complete the following PROJECT COMPONENT will be referred to hereinafter as WORK:
• PROJECT INITIATION DOCUMENT (PID)
Each PROJECT COMPONENT is defined in the CALTRANS Workplan Standards Guide as a distinct group of activities/products in the project planning and development process.

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4. The term AGREEMENT, as used herein, includes this document and any attachments, exhibits, and amendments.

This AGREEMENT is separate from and does not modify or replace any other cooperative agreement or memorandum of understanding between the PARTIES regarding the PROJECT.

PARTIES intend this AGREEMENT to be their final expression that supersedes any oral understanding or writings pertaining to the WORK. The requirements of this AGREEMENT will preside over any conflicting requirements in any documents that are made an express part of this AGREEMENT.

If any provisions in this AGREEMENT are found by a court of competent jurisdiction to be, or are in fact, illegal, inoperative, or unenforceable, those provisions do not render any or all other AGREEMENT provisions invalid, inoperative, or unenforceable, and those provisions will be automatically severed from this AGREEMENT.

Except as otherwise provided in the AGREEMENT, PARTIES will execute a written amendment if there are any changes to the terms of this AGREEMENT.

AGREEMENT will terminate 180 days after PID is signed by PARTIES or as mutually agreed by PARTIES in writing. However, all indemnification articles will remain in effect until terminated or modified in writing by mutual agreement.

5. No PROJECT deliverables have been completed prior to this AGREEMENT.

6. In this AGREEMENT capitalized words represent defined terms, initialisms, or acronyms.

7. PARTIES hereby set forth the terms, covenants, and conditions of this AGREEMENT.

RESPONSIBILITIES
Sponsorship

8. A SPONSOR is responsible for establishing the scope of the PROJECT and securing the financial resources to fund the WORK. A SPONSOR is responsible for securing additional Item 8.a
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funds when necessary or implementing PROJECT changes to ensure the WORK can be completed with the funds committed in this AGREEMENT.

PROJECT changes, as described in the CALTRANS Project Development Procedures Manual, will be approved by CALTRANS as the owner/operator of the State Highway System.

9. City is the SPONSOR for the WORK in this AGREEMENT.

Implementing Agency

10. The IMPLEMENTING AGENCY is the PARTY responsible for managing the scope, cost, schedule, and quality of the work activities and products of a PROJECT COMPONENT. • City is the Project Initiation Document (PID) IMPLEMENTING AGENCY.

The PID identifies the PROJECT need and purpose, stakeholder input, project alternatives, anticipated right-of-way requirements, preliminary environmental analysis, initial cost estimates, and potential funding sources.

11. City will provide a Quality Management Plan (QMP) for the WORK in every PROJECT COMPONENT that they are implementing. The QMP describes the IMPLEMENTING AGENCY's quality policy and how it will be used. The QMP will include a process for resolving disputes between the PARTIES at the team level. The QMP is subject to CALTRANS review and concurrence.

12. Any PARTY responsible for completing WORK will make its personnel and consultants that prepare WORK available to help resolve WORK-related problems and changes for the Item 8.a
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entire duration of the PROJECT including PROJECT work that may occur under separate agreements.

Funding

13. City is the only PARTY committing funds in this AGREEMENT and will fund the cost of the WORK in accordance with this AGREEMENT.

If, in the future, CALTRANS is allocated state funds and Personnel Years (PYs) for PID review or development of this PROJECT, PARTIES will agree to amend this AGREEMENT to change the reimbursement arrangement for PID review.

14. PARTIES will not be reimbursed for costs beyond the funding commitments in this AGREEMENT.

15. Unless otherwise documented in the Reimbursement Summary, overall liability for project costs within a PROJECT COMPONENT, subject to program limitations, will be in proportion to the amount contributed to that PROJECT COMPONENT by each fund type.

16. Unless otherwise documented in the Reimbursement Summary, any savings recognized within a PROJECT COMPONENT will be credited or reimbursed, when allowed by policy or law, in proportion to the amount contributed to that PROJECT COMPONENT by each fund type.

17. WORK costs, except those that are specifically excluded in this AGREEMENT, are to be paid from the funds obligated in the Reimbursement Summary. Costs that are specifically excluded from the funds obligated in this AGREEMENT are to be paid by the PARTY incurring the costs from funds that are independent of this AGREEMENT.

CALTRANS' Quality Management

18. CALTRANS, as the owner/operator of the State Highway System (SHS), will perform quality management work including Quality Management Assessment (QMA) and Item 8.a
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owner/operator approvals for the portions of WORK within the existing and proposed SHS right-of-way.

19. CALTRANS' Quality Management Assessment (QMA) efforts are to ensure that City's quality assurance results in WORK that is in accordance with the applicable standards and the PROJECT's quality management plan (QMP). QMA does not include any efforts necessary to develop or deliver WORK or any validation by verifying or rechecking WORK.

When CALTRANS performs QMA, it does so for its own benefit. No one can assign liability to CALTRANS due to its QMA.

20. CALTRANS, as the owner/operator of the State Highway System, will approve WORK products in accordance with CALTRANS policies and guidance and as indicated in this AGREEMENT.

21. City will provide WORK-related products and supporting documentation upon CALTRANS' request for the purpose of CALTRANS' quality management work.

Project Initiation Document (PID)

22. As the PID IMPLEMENTING AGENCY, City is responsible for all PID WORK except those activities and responsibilities that are assigned to another PARTY in this AGREEMENT and those activities that may be specifically excluded.

23. Should City request CALTRANS to perform any portion of PID preparation work, except as otherwise set forth in this AGREEMENT, City agrees to reimburse CALTRANS for such work and PARTIES will amend this AGREEMENT.

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24. CALTRANS will be responsible for completing the following PID activities:

CALTRANS Work Breakdown Structure Identifier (If Applicable)

AGREEMENT
Funded Cost
100.05.10.xx Quality Management YES
150.05.05.xx Review of Existing Reports, Data, Studies, and Mapping YES 150.25.20 PID Circulation, Review, and Approval YES

25. CALTRANS will provide relevant existing proprietary information and maps related to:
• Geologic and Geotechnical information
• Utility information
• Environmental constraints
• Traffic modeling/forecasts
• Topographic and Boundary surveys
• As-built centerline and existing right-of-way
Due to the potential for data loss or errors, CALTRANS will not convert the format of existing proprietary information or maps.

26. When required, CALTRANS will perform pre-consultation with appropriate resource agencies in order to reach consensus on need and purpose, avoidance alternatives, and feasible alternatives.

27. CALTRANS will actively participate in the Project Development Team meetings.

28. The PID will be signed on behalf of City by a Civil Engineer registered in the State of California.

29. CALTRANS will review and approve the Project Initiation Document (PID) as required by California Government Code, Section 65086.5.

CALTRANS will complete a review of the draft PID and provide its comments to City within 60 calendar days from the date CALTRANS received the draft PID from City. City will address the comments provided by CALTRANS. If any interim reviews are requested Item 8.a
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of CALTRANS by City, CALTRANS will complete those reviews within 30 calendar days from the date CALTRANS received the draft PID from City.

After City revises the PID to address all of CALTRANS’ comments and submits the revised draft PID and all related attachments and appendices, CALTRANS will complete its review and final determination of the revised draft PID within 30 calendar days from the date CALTRANS received the revised draft PID from City. Should CALTRANS require supporting data necessary to defend facts or claims cited in the revised draft PID, City will provide all available supporting data in a reasonable time so that CALTRANS may conclude its review. The 30 day CALTRANS review period will be stalled during that time and will continue to run after City provides the required data.

No liability will be assigned to CALTRANS, its officers and employees by City under the terms of this AGREEMENT or by third parties by reason of CALTRANS’ review and approval of the PID.

Additional Provisions
Standards

30. PARTIES will perform all WORK in accordance with federal and California laws, regulations, and standards; Federal Highway Administration (FHWA) standards; and CALTRANS standards. CALTRANS standards include, but are not limited to, the guidance provided in the:
• CADD Users Manual
• CALTRANS policies and directives
• Plans Preparation Manual
• Project Development Procedures Manual (PDPM)
• Workplan Standards Guide
• Construction Manual Supplement for Local Agency Resident Engineers • Local Agency Structure Representative Guidelines
Noncompliant Work

31. CALTRANS retains the right to reject noncompliant WORK. City agrees to suspend WORK upon request by CALTRANS for the purpose of protecting public safety, Item 8.a
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preserving property rights, and ensuring that all WORK is in the best interest of the State Highway System.

Qualifications

32. Each PARTY will ensure that personnel participating in WORK are appropriately qualified or licensed to perform the tasks assigned to them.

Consultant Selection

33. City will invite CALTRANS to participate in the selection of any consultants that participate in the WORK.

Encroachment Permits

34. CALTRANS will issue, upon proper application, the encroachment permits required for WORK within State Highway System (SHS) right-of-way. City, their contractors, consultants, agents, and utility owners will not work within the SHS right-of-way without an encroachment permit issued by CALTRANS. CALTRANS will provide encroachment permits to City at no cost. CALTRANS will provide encroachment permits to utility owners at no cost. If the encroachment permit and this AGREEMENT conflict, the requirements of this AGREEMENT will prevail.

35. The IMPLEMENTING AGENCY for a PROJECT COMPONENT will coordinate, prepare, obtain, implement, renew, and amend any encroachment permits needed to complete the WORK.

Protected Resources

36. If any PARTY discovers unanticipated cultural, archaeological, paleontological, or other protected resources during WORK, all WORK in that area will stop and that PARTY will notify all PARTIES within 24 hours of discovery. WORK may only resume after a Item 8.a
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qualified professional has evaluated the nature and significance of the discovery and CALTRANS approves a plan for its removal or protection.

Disclosures

37. PARTIES will hold all administrative drafts and administrative final reports, studies, materials, and documentation relied upon, produced, created, or utilized for the WORK in confidence to the extent permitted by law and where applicable, the provisions of California Government Code, Section 7921.505(c)(5) will protect the confidentiality of such documents in the event that said documents are shared between PARTIES.

PARTIES will not distribute, release, or share said documents with anyone other than employees, agents, and consultants who require access to complete the WORK without the written consent of the PARTY authorized to release them, unless required or authorized to do so by law.

38. If a PARTY receives a public records request pertaining to the WORK, that PARTY will notify PARTIES within five (5) working days of receipt and make PARTIES aware of any disclosed public records.

Hazardous Materials

39. If any hazardous materials, pursuant to Health and Safety Code 25260(d), are found within the PROJECT limits, the discovering PARTY will notify all other PARTIES within twenty-four (24) hours of discovery.

40. PARTIES agree to consider alternatives to PROJECT scope and/or alignment, to the extent practicable, in an effort to avoid any known hazardous materials within the proposed PROJECT limits.

41. If hazardous materials are discovered within PROJECT limits, but outside of State Highway System right-of-way, it is the responsibility of City in concert with the local Item 8.a
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agency having land use jurisdiction over the property, and the property owner, to remedy before CALTRANS will acquire or accept title to such property.

Claims

42. Any PARTY that is responsible for completing WORK may accept, reject, compromise, settle, or litigate claims arising from the WORK without concurrence from the other PARTY.

43. PARTIES will confer on any claim that may affect the WORK or PARTIES' liability or responsibility under this AGREEMENT in order to retain resolution possibilities for potential future claims. No PARTY will prejudice the rights of another PARTY until after PARTIES confer on the claim.

44. If the WORK expends state or federal funds, each PARTY will comply with the Federal Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards of 2 CFR, Part 200. PARTIES will ensure that any for-profit consultant hired to participate in the WORK will comply with the requirements in 48 CFR, Chapter 1, Part 31. When state or federal funds are expended on the WORK these principles and requirements apply to all funding types included in this AGREEMENT.

Accounting and Audits

45. PARTIES will maintain, and will ensure that any consultant hired by PARTIES to participate in WORK will maintain, a financial management system that conforms to Generally Accepted Accounting Principles (GAAP), and that can properly accumulate and segregate incurred PROJECT costs and billings.

46. PARTIES will maintain and make available to each other all WORK-related documents, including financial data, during the term of this AGREEMENT.

PARTIES will retain all WORK-related records for three (3) years after the final voucher.

PARTIES will require that any consultants hired to participate in the WORK will comply with this Article.

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47. If the WORK expends state or federal funds, each PARTY will undergo an annual audit in accordance with the Single Audit Act in the Federal Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards as defined in 2 CFR, Part 200.

48. When a PARTY reimburses a consultant for WORK with state or federal funds, the procurement of the consultant and the consultant overhead costs will be in accordance with the Local Assistance Procedures Manual, Chapter 10.

Interruption of Work

49. If WORK stops for any reason, IMPLEMENTING AGENCY will place the PROJECT right-of-way in a safe and operable condition acceptable to CALTRANS.

Penalties, Judgments and Settlements

50. The cost of awards, judgments, fines, interest, penalties, attorney's fees, and/or settlements generated by the WORK are considered WORK costs.

51. Any PARTY whose action or lack of action causes the levy of fines, interest, or penalties will indemnify and hold all other PARTIES harmless per the terms of this AGREEMENT.

GENERAL CONDITIONS

52. All portions of this AGREEMENT, including the RECITALS section, are enforceable.

Venue

53. PARTIES understand that this AGREEMENT is in accordance with and governed by the Constitution and laws of the State of California. This AGREEMENT will be enforceable in the State of California. Any PARTY initiating legal action arising from this AGREEMENT will file and maintain that legal action in the Superior Court of the county in which the Item 8.a
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CALTRANS district office that is signatory to this AGREEMENT resides, or in the Superior Court of the county in which the PROJECT is physically located.

Exemptions

54. All CALTRANS' obligations and commitments under this AGREEMENT are subject to the appropriation of resources by the Legislature, the State Budget Act authority, programming and allocation of funds by the California Transportation Commission (CTC).

Indemnification

55. Neither CALTRANS nor any of its officers and employees, are responsible for any injury, damage, or liability occurring by reason of anything done or omitted to be done by City, its contractors, sub-contractors, and/or its agents under or in connection with any work, authority, or jurisdiction conferred upon City under this AGREEMENT. It is understood and agreed that City, to the extent permitted by law, will defend, indemnify, and save harmless CALTRANS and all of its officers and employees from all claims, suits, or actions of every name, kind, and description brought forth under, but not limited to, tortious, contractual, inverse condemnation, or other theories and assertions of liability occurring by reason of anything done or omitted to be done by City, its contractors, subcontractors, and/or its agents under this AGREEMENT.

56. Neither City nor any of its officers and employees, are responsible for any injury, damage, or liability occurring by reason of anything done or omitted to be done by CALTRANS, its contractors, sub-contractors, and/or its agents under or in connection with any work, authority, or jurisdiction conferred upon CALTRANS under this AGREEMENT. It is understood and agreed that CALTRANS, to the extent permitted by law, will defend, indemnify, and save harmless City and all of its officers and employees from all claims, suits, or actions of every name, kind, and description brought forth under, but not limited to, tortious, contractual, inverse condemnation, or other theories and assertions of liability Item 8.a
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occurring by reason of anything done or omitted to be done by CALTRANS, its contractors, sub-contractors, and/or its agents under this AGREEMENT.

Non-parties

57. PARTIES do not intend this AGREEMENT to create a third-party beneficiary or define duties, obligations, or rights for entities in PARTIES not signatory to this AGREEMENT.

PARTIES do not intend this AGREEMENT to affect their legal liability by imposing any standard of care for fulfilling the WORK different from the standards imposed by law.

58. PARTIES will not assign or attempt to assign obligations to entities not signatory to this AGREEMENT without an amendment to this AGREEMENT.

Ambiguity and Performance

59. Neither PARTY will interpret any ambiguity contained in this AGREEMENT against the other PARTY. PARTIES waive the provisions of California Civil Code, Section 1654.

A waiver of a PARTY’s performance under this AGREEMENT will not constitute a continuous waiver of any other provision.

60. A delay or omission to exercise a right or power due to a default does not negate the use of that right or power in the future when deemed necessary.

Defaults

61. If any PARTY defaults in its performance of the WORK, a non-defaulting PARTY will request in writing that the default be remedied within thirty (30) calendar days. If the defaulting PARTY fails to do so, the non-defaulting PARTY may initiate dispute resolution.

Dispute Resolution

62. PARTIES will first attempt to resolve AGREEMENT disputes at the PROJECT team level as described in the Quality Management Plan. If they cannot resolve the dispute Item 8.a
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themselves, the CALTRANS District Director and the Executive Officer of City will attempt to negotiate a resolution. If PARTIES do not reach a resolution, PARTIES' legal counsel will initiate mediation. PARTIES agree to participate in mediation in good faith and will share equally in its costs.

Neither the dispute nor the mediation process relieves PARTIES from full and timely performance of the WORK in accordance with the terms of this AGREEMENT. However, if any PARTY stops fulfilling its obligations, any other PARTY may seek equitable relief to ensure that the WORK continues.

Except for equitable relief and/or to preserve the statute of limitations, no PARTY may file a civil complaint until after mediation, or forty-five (45) calendar days after filing the written mediation request, whichever occurs first.

PARTIES will file any civil complaints in the Superior Court of the county in which the CALTRANS District Office signatory to this AGREEMENT resides or in the Superior Court of the county in which the PROJECT is physically located.

63. PARTIES maintain the ability to pursue alternative or additional dispute remedies if a previously selected remedy does not achieve resolution.

Prevailing Wage

64. When WORK falls within the Labor Code § 1720(a)(1) definition of "public works" in that it is construction, alteration, demolition, installation, or repair; or maintenance work under Labor Code § 1771, PARTIES will conform to the provisions of Labor Code §§ 1720- 1815, and all applicable provisions of California Code of Regulations, Title 8, Division 1, Chapter 8, Subchapter 3, Articles 1-7. PARTIES will include prevailing wage requirements in contracts for public work and require contractors to include the same prevailing wage requirements in all subcontracts.

Work performed by a PARTY's own employees is exempt from the Labor Code's Prevailing Wage requirements.

If WORK is paid for, in whole or part, with federal funds and is of the type of work subject to federal prevailing wage requirements, PARTIES will conform to the provisions of the Davis-Bacon and Related Acts, 40 U.S.C. §§ 3141-3148.

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When applicable, PARTIES will include federal prevailing wage requirements in contracts for public works. WORK performed by a PARTY's employees is exempt from federal prevailing wage requirements.

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REIMBURSEMENT SUMMARY

FUNDING TABLE
IMPLEMENTING AGENCY: City
Source Party Fund Type PID Totals
LOCAL City Measure 213,000 213,000
Totals 213,000 213,000

SPENDING TABLE
PID
Fund Type CALTRANS Totals
Measure 213,000 213,000
Totals 213,000 213,000
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Funding

1. Per the State Budget Act of 2012, Chapter 603, amending item 2660-001-0042 of Section

2.00, the cost of any engineering support performed by CALTRANS towards any local government agency-sponsored PID project will only include direct costs. Indirect or overhead costs will not be applied during the development of the PID document.

Invoicing and Payment

2. PARTIES will invoice for funds where the SPENDING TABLE shows that one PARTY provides funds for use by another PARTY. PARTIES will pay invoices within forty-five (45) calendar days of receipt of invoice when not paying with Electronic Funds Transfer (EFT). When paying with EFT, City; will pay invoices within five (5) calendar days of receipt of invoice.

3. If City has received EFT certification from CALTRANS then City will use the EFT mechanism and follow all EFT procedures to pay all invoices issued from CALTRANS.

4. When a PARTY is reimbursed for actual cost, invoices will be submitted each month for the prior month's expenditures. After all PROJECT COMPONENT WORK is complete, PARTIES will submit a final accounting of all PROJECT COMPONENT costs. Based on the final accounting, PARTIES will invoice or refund as necessary to satisfy the financial commitments of this AGREEMENT.

Project Initiation Document (PID)

5. CALTRANS will invoice City for a $35,000 initial deposit after execution of this AGREEMENT and forty-five (45) working days prior to the commencement of PROJECT INITIATION DOCUMENT (PID) expenditures. This deposit represents two (2) months’ estimated costs.

Thereafter, CALTRANS will invoice and City will reimburse for actual costs incurred and paid.

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SIGNATURES
PARTIES are authorized to enter into this AGREEMENT and have delegated to the undersigned the authority to execute this AGREEMENT on behalf of the respective agencies and hereby covenants to have followed all the necessary legal requirements to validly execute this AGREEMENT. By signing below, the PARTIES each expressly agree to execute this AGREEMENT electronically.

The PARTIES acknowledge that executed copies of this AGREEMENT may be exchanged by facsimile or email, and that such copies shall be deemed to be effective as originals.

STATE OF CALIFORNIA

DEPARTMENT OF

TRANSPORTATION
Wajahat Nyaz
Deputy District Director, Design
Verification of Funds and Authority:

Jeffrey Kuehnel
District Budget Manager
Certified as to financial terms and policies:

Percy Ramil
HQ Accounting Supervisor
HQ Legal Representative
HQ Legal Rep Title

CITY OF HEALDSBURG
Jeff Kay
City Manager
Attest:

Raina Allan
City Clerk
Samantha W. Zutler
City Attorney
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COOPERATIVE FUNDING AGREEMENT NO. SCTA-26007

BETWEEN

THE SONOMA COUNTY TRANSPORTATION AUTHORITY
AND

THE CITY OF HEALDSBURG
Cooperative Funding Agreement No. SCTA 26007
City of Healdsburg

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Healdsburg City CouncilOctober 20, 2025

Healdsburg City Council
October 20, 2025