Hemet City Council
January 30, 2024

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GROUP 2: Traffic surface abrasive blaster; pot tender - removal of all traffic lines and markings by any method (sandblasting, waterblasting, grinding, etc.) and
preparation of surface for coatings. Traffic control
person: controlling and directing traffic through both
conventional and moving lane closures; operation of all related machinery and equipment
GROUP 3: Traffic delineating device applicator: Layout and application of pavement markers, delineating signs, rumble and traffic bars, adhesives, guide markers, other traffic delineating devices including traffic control. This
category includes all traffic related surface preparation (sandblasting, waterblasting, grinding) as part of the
application process. Traffic protective delineating system installer: removes, relocates, installs, permanently
affixed roadside and parking delineation barricades,
fencing, cable anchor, guard rail, reference signs,
monument markers; operation of all related machinery and equipment; power broom sweeper
GROUP 4: Striper: layout and application of traffic stripes and markings; hot thermo plastic; tape traffic stripes and markings, including traffic control; operation of all
related machinery and equipment
---------------------------------------------------------------- LABO1184-002 07/01/2022
Rates Fringes

LABORER (TUNNEL)
GROUP 1.....................$ 45.68 23.30
GROUP 2.....................$ 46.00 23.30
GROUP 3.....................$ 46.46 23.30
GROUP 4.....................$ 47.15 23.30

LABORER
GROUP 1.....................$ 36.39 21.04
GROUP 2.....................$ 36.94 21.04
GROUP 3.....................$ 37.49 21.04
GROUP 4.....................$ 39.04 21.04
GROUP 5.....................$ 39.39 21.04

LABORER CLASSIFICATIONS
GROUP 1: Cleaning and handling of panel forms; Concrete screeding for rough strike-off; Concrete, water curing; Demolition laborer, the cleaning of brick if performed by a worker performing any other phase of demolition work, and the cleaning of lumber; Fire watcher, limber, brush loader, piler and debris handler; Flag person; Gas, oil and/or
water pipeline laborer; Laborer, asphalt-rubber material loader; Laborer, general or construction; Laborer, general clean-up; Laborer, landscaping; Laborer, jetting; Laborer, temporary water and air lines; Material hose operator
(walls, slabs, floors and decks); Plugging, filling of shee bolt holes; Dry packing of concrete; Railroad maintenance, repair track person and road beds; Streetcar and railroad construction track laborers; Rigging and signaling; Scaler; Slip form raiser; Tar and mortar; Tool crib or tool house laborer; Traffic control by any method; Window cleaner; Wire mesh pulling - all concrete pouring operations
GROUP 2: Asphalt shoveler; Cement dumper (on 1 yd. or larger mixer and handling bulk cement); Cesspool digger and

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installer; Chucktender; Chute handler, pouring concrete, the handling of the chute from readymix trucks, such as walls, slabs, decks, floors, foundation, footings, curbs, gutters and sidewalks; Concrete curer, impervious membrane and form oiler; Cutting torch operator (demolition); Fine grader, highways and street paving, airport, runways and similar type heavy construction; Gas, oil and/or water
pipeline wrapper - pot tender and form person; Guinea
chaser; Headerboard person - asphalt; Laborer, packing rod steel and pans; Membrane vapor barrier installer; Power broom sweeper (small); Riprap stonepaver, placing stone or wet sacked concrete; Roto scraper and tiller; Sandblaster (pot tender); Septic tank digger and installer(lead); Tank scaler and cleaner; Tree climber, faller, chain saw
operator, Pittsburgh chipper and similar type brush
shredder; Underground laborer, including caisson bellower GROUP 3: Buggymobile person; Concrete cutting torch; Concrete pile cutter; Driller, jackhammer, 2-1/2 ft. drill steel or longer; Dri-pak-it machine; Gas, oil and/or water pipeline wrapper, 6-in. pipe and over, by any method, inside and out; High scaler (including drilling of same); Hydro seeder and similar type; Impact wrench multi-plate; Kettle person, pot person and workers applying asphalt, lay-kold,
creosote, lime caustic and similar type materials
(""applying"" means applying, dipping, brushing or handling of such materials for pipe wrapping and waterproofing); Operator of pneumatic, gas, electric tools, vibrating
machine, pavement breaker, air blasting, come-alongs, and similar mechanical tools not separately classified herein; Pipelayer's backup person, coating, grouting, making of joints, sealing, caulking, diapering and including rubber gasket joints, pointing and any and all other services; Rock slinger; Rotary scarifier or multiple head concrete chipping scarifier; Steel headerboard and guideline setter; Tamper, Barko, Wacker and similar type; Trenching machine, hand-propelled
GROUP 4: Asphalt raker, lute person, ironer, asphalt dump person, and asphalt spreader boxes (all types); Concrete core cutter (walls, floors or ceilings), grinder or sander; Concrete saw person, cutting walls or flat work, scoring old or new concrete; Cribber, shorer, lagging, sheeting and trench bracing, hand-guided lagging hammer; Head rock
slinger; Laborer, asphalt- rubber distributor boot person; Laser beam in connection with laborers' work; Oversize
concrete vibrator operator, 70 lbs. and over; Pipelayer performing all services in the laying and installation of pipe from the point of receiving pipe in the ditch until completion of operation, including any and all forms of tubular material, whether pipe, metallic or non-metallic, conduit and any other stationary type of tubular device used for the conveying of any substance or element, whether water, sewage, solid gas, air, or other product whatsoever and without regard to the nature of material from which the tubular material is fabricated; No-joint pipe and stripping of same; Prefabricated manhole installer; Sandblaster
(nozzle person), water blasting, Porta Shot-Blast
GROUP 5: Blaster powder, all work of loading holes, placing and blasting of all powder and explosives of whatever type, regardless of method used for such loading and placing; Driller: All power drills, excluding jackhammer, whether core, diamond, wagon, track, multiple unit, and any and all other types of mechanical drills without regard to the form

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of motive power; Toxic waste removal

TUNNEL LABORER CLASSIFICATIONS
GROUP 1: Batch plant laborer; Changehouse person; Dump
person; Dump person (outside); Swamper (brake person and switch person on tunnel work); Tunnel materials handling person; Nipper; Pot tender, using mastic or other materials (for example, but not by way of limitation, shotcrete, etc.) GROUP 2: Chucktender, cabletender; Loading and unloading agitator cars; Vibrator person, jack hammer, pneumatic
tools (except driller); Bull gang mucker, track person; Concrete crew, including rodder and spreader
GROUP 3: Blaster, driller, powder person; Chemical grout jet person; Cherry picker person; Grout gun person; Grout mixer person; Grout pump person; Jackleg miner; Jumbo person; Kemper and other pneumatic concrete placer operator; Miner, tunnel (hand or machine); Nozzle person; Operating of
troweling and/or grouting machines; Powder person (primer house); Primer person; Sandblaster; Shotcrete person; Steel form raiser and setter; Timber person, retimber person, wood or steel; Tunnel Concrete finisher
GROUP 4: Diamond driller; Sandblaster; Shaft and raise work ---------------------------------------------------------------- LABO1184-004 07/01/2022
Rates Fringes
Brick Tender.....................$ 37.32 21.45 ---------------------------------------------------------------- LABO1414-001 08/03/2022
Rates Fringes

LABORER
PLASTER CLEAN-UP LABORER....$ 38.92 23.32
PLASTER TENDER..............$ 41.47 23.32
Work on a swing stage scaffold: $1.00 per hour additional. ---------------------------------------------------------------- PAIN0036-001 07/01/2023
Rates Fringes
Painters: (Including Lead
Abatement)
(1) Repaint (excludes San
Diego County)...............$ 29.59 17.12
(2) All Other Work..........$ 38.52 18.64
REPAINT of any previously painted structure. Exceptions:
work involving the aerospace industry, breweries,
commercial recreational facilities, hotels which operate commercial establishments as part of hotel service, and sports facilities.
---------------------------------------------------------------- PAIN0036-008 09/01/2022
Rates Fringes

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DRYWALL FINISHER/TAPER...........$ 46.28 23.52 ---------------------------------------------------------------- PAIN0036-015 01/01/2020
Rates Fringes
GLAZIER..........................$ 43.45 23.39 FOOTNOTE: Additional $1.25 per hour for work in a condor, from the third (3rd) floor and up Additional $1.25 per hour for work on the outside of the building from a swing stage or any suspended contrivance, from the ground up
---------------------------------------------------------------- PLAS0200-009 08/03/2022
Rates Fringes
PLASTERER........................$ 47.37 19.64 ---------------------------------------------------------------- PLAS0500-002 07/01/2020
Rates Fringes
CEMENT MASON/CONCRETE FINISHER...$ 38.50 25.91 ---------------------------------------------------------------- PLUM0016-001 09/01/2023
Rates Fringes

PLUMBER/PIPEFITTER
Work ONLY on new additions
and remodeling of bars,
restaurant, stores and
commercial buildings not
to exceed 5,000 sq. ft. of
floor space.................$ 53.51 25.28
Work ONLY on strip malls,
light commercial, tenant
improvement and remodel
work........................$ 42.49 23.86
All other work except work
on new additions and
remodeling of bars,
restaurant, stores and
commercial buildings not
to exceed 5,000 sq. ft. of
floor space and work on
strip malls, light
commercial, tenant
improvement and remodel
work........................$ 55.18 26.26
---------------------------------------------------------------- PLUM0345-001 09/01/2023
Rates Fringes

PLUMBER
Landscape/Irrigation Fitter.$ 40.20 25.90
Sewer & Storm Drain Work....$ 44.29 23.28
---------------------------------------------------------------- ROOF0036-002 08/01/2022
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ROOFER...........................$ 43.47 19.52 FOOTNOTE: Pitch premium: Work on which employees are exposed to pitch fumes or required to handle pitch, pitch base or pitch impregnated products, or any material containing coal tar pitch, the entire roofing crew shall receive $1.75 per hour ""pitch premium"" pay.
---------------------------------------------------------------- SFCA0669-002 04/01/2023
Rates Fringes
SPRINKLER FITTER.................$ 45.31 27.33 ---------------------------------------------------------------- SHEE0105-003 07/01/2023
LOS ANGELES (South of a straight line drawn between Gorman and Big Pines)and Catalina Island, INYO, KERN (Northeast part, East of Hwy 395), MONO ORANGE, RIVERSIDE, AND SAN BERNARDINO COUNTIES Rates Fringes

SHEET METAL WORKER
(1) Commercial - New
Construction and Remodel
work........................$ 55.16 30.04
(2) Industrial work
including air pollution
control systems, noise
abatement, hand rails,
guard rails, excluding
aritechtural sheet metal
work, excluding A-C,
heating, ventilating
systems for human comfort...$ 55.16 30.04
---------------------------------------------------------------- TEAM0011-002 07/01/2023
Rates Fringes

TRUCK DRIVER
GROUP 1....................$ 38.19 33.69
GROUP 2....................$ 38.34 33.69
GROUP 3....................$ 38.47 33.69
GROUP 4....................$ 38.66 33.69
GROUP 5....................$ 38.69 33.69
GROUP 6....................$ 38.72 33.69
GROUP 7....................$ 38.97 33.69
GROUP 8....................$ 39.22 33.69
GROUP 9....................$ 39.42 33.69
GROUP 10....................$ 39.72 33.69
GROUP 11....................$ 40.22 33.69
GROUP 12....................$ 40.65 33.69
WORK ON ALL MILITARY BASES:

PREMIUM PAY: $3.00 per hour additional.
[29 palms Marine Base, Camp Roberts, China Lake, Edwards AFB, El Centro Naval Facility, Fort Irwin, Marine Corps
Logistics Base at Nebo & Yermo, Mountain Warfare Training Center, Bridgeport, Point Arguello, Point Conception, Vandenberg AFB]

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TRUCK DRIVERS CLASSIFICATIONS
GROUP 1: Truck driver
GROUP 2: Driver of vehicle or combination of vehicles - 2 axles; Traffic control pilot car excluding moving heavy equipment permit load; Truck mounted broom
GROUP 3: Driver of vehicle or combination of vehicles - 3 axles; Boot person; Cement mason distribution truck; Fuel truck driver; Water truck - 2 axle; Dump truck, less than 16 yds. water level; Erosion control driver
GROUP 4: Driver of transit mix truck, under 3 yds.; Dumpcrete truck, less than 6-1/2 yds. water level
GROUP 5: Water truck, 3 or more axles; Truck greaser and tire person ($0.50 additional for tire person); Pipeline and utility working truck driver, including winch truck and plastic fusion, limited to pipeline and utility work;
Slurry truck driver
GROUP 6: Transit mix truck, 3 yds. or more; Dumpcrete truck, 6-1/2 yds. water level and over; Vehicle or combination of vehicles - 4 or more axles; Oil spreader truck; Dump truck, 16 yds. to 25 yds. water level
GROUP 7: A Frame, Swedish crane or similar; Forklift driver; Ross carrier driver
GROUP 8: Dump truck, 25 yds. to 49 yds. water level; Truck repair person; Water pull - single engine; Welder
GROUP 9: Truck repair person/welder; Low bed driver, 9 axles or over
GROUP 10: Dump truck - 50 yds. or more water level; Water pull - single engine with attachment
GROUP 11: Water pull - twin engine; Water pull - twin engine with attachments; Winch truck driver - $1.25 additional when operating winch or similar special attachments
GROUP 12: Boom Truck 17K and above
---------------------------------------------------------------- WELDERS - Receive rate prescribed for craft performing
operation to which welding is incidental.
================================================================ Note: Executive Order (EO) 13706, Establishing Paid Sick Leave for Federal Contractors applies to all contracts subject to the Davis-Bacon Act for which the contract is awarded (and any solicitation was issued) on or after January 1, 2017. If this contract is covered by the EO, the contractor must provide employees with 1 hour of paid sick leave for every 30 hours they work, up to 56 hours of paid sick leave each year.

Employees must be permitted to use paid sick leave for their own illness, injury or other health-related needs, including preventive care; to assist a family member (or person who is like family to the employee) who is ill, injured, or has other health-related needs, including preventive care; or for reasons

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resulting from, or to assist a family member (or person who is like family to the employee) who is a victim of, domestic violence, sexual assault, or stalking. Additional information on contractor requirements and worker protections under the EO is available at
https://www.dol.gov/agencies/whd/government-contracts.

Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29CFR 5.5 (a) (1) (ii)).
---------------------------------------------------------------- The body of each wage determination lists the classification and wage rates that have been found to be prevailing for the cited type(s) of construction in the area covered by the wage determination. The classifications are listed in alphabetical order of ""identifiers"" that indicate whether the particular rate is a union rate (current union negotiated rate for local), a survey rate (weighted average rate) or a union average rate (weighted union average rate).

Union Rate Identifiers
A four letter classification abbreviation identifier enclosed in dotted lines beginning with characters other than ""SU"" or ""UAVG"" denotes that the union classification and rate were prevailing for that classification in the survey. Example:

PLUM0198-005 07/01/2014. PLUM is an abbreviation identifier of the union which prevailed in the survey for this
classification, which in this example would be Plumbers. 0198 indicates the local union number or district council number where applicable, i.e., Plumbers Local 0198. The next number, 005 in the example, is an internal number used in processing the wage determination. 07/01/2014 is the effective date of the most current negotiated rate, which in this example is July 1, 2014.

Union prevailing wage rates are updated to reflect all rate changes in the collective bargaining agreement (CBA) governing this classification and rate.

Survey Rate Identifiers
Classifications listed under the ""SU"" identifier indicate that no one rate prevailed for this classification in the survey and the published rate is derived by computing a weighted average rate based on all the rates reported in the survey for that classification. As this weighted average rate includes all rates reported in the survey, it may include both union and non-union rates. Example: SULA2012-007 5/13/2014. SU indicates the rates are survey rates based on a weighted average
calculation of rates and are not majority rates. LA indicates the State of Louisiana. 2012 is the year of survey on which these classifications and rates are based. The next number, 007 in the example, is an internal number used in producing the wage determination. 5/13/2014 indicates the survey completion date for the classifications and rates under that identifier.

Survey wage rates are not updated and remain in effect until a new survey is conducted.

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Union Average Rate Identifiers
Classification(s) listed under the UAVG identifier indicate that no single majority rate prevailed for those
classifications; however, 100% of the data reported for the classifications was union data. EXAMPLE: UAVG-OH-0010
08/29/2014. UAVG indicates that the rate is a weighted union average rate. OH indicates the state. The next number, 0010 in the example, is an internal number used in producing the wage determination. 08/29/2014 indicates the survey completion date for the classifications and rates under that identifier.

A UAVG rate will be updated once a year, usually in January of each year, to reflect a weighted average of the current negotiated/CBA rate of the union locals from which the rate is based.
----------------------------------------------------------------

WAGE DETERMINATION APPEALS PROCESS

1.) Has there been an initial decision in the matter? This can be:
* an existing published wage determination
* a survey underlying a wage determination
* a Wage and Hour Division letter setting forth a position on a wage determination matter
* a conformance (additional classification and rate) ruling On survey related matters, initial contact, including requests for summaries of surveys, should be with the Wage and Hour National Office because National Office has responsibility for the Davis-Bacon survey program. If the response from this initial contact is not satisfactory, then the process described in 2.) and 3.) should be followed.

With regard to any other matter not yet ripe for the formal process described here, initial contact should be with the Branch of Construction Wage Determinations. Write to:

Branch of Construction Wage Determinations
Wage and Hour Division
U.S. Department of Labor
200 Constitution Avenue, N.W.

Washington, DC 20210

2.) If the answer to the question in 1.) is yes, then an interested party (those affected by the action) can request review and reconsideration from the Wage and Hour Administrator (See 29 CFR Part 1.8 and 29 CFR Part 7). Write to:

Wage and Hour Administrator
U.S. Department of Labor
200 Constitution Avenue, N.W.

Washington, DC 20210
The request should be accompanied by a full statement of the interested party's position and by any information (wage payment data, project description, area practice material, etc.) that the requestor considers relevant to the issue.

3.) If the decision of the Administrator is not favorable, an

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interested party may appeal directly to the Administrative Review Board (formerly the Wage Appeals Board). Write to:

Administrative Review Board
U.S. Department of Labor
200 Constitution Avenue, N.W.

Washington, DC 20210

4.) All decisions by the Administrative Review Board are final. ================================================================ END OF GENERAL DECISIO"

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Additional Federal Requirements

Whereas the work under this Contract is subject to applicable Federal, State, and local laws and regulations, including but not limited to the regulations pertaining to the Community Development Block Grant program (24 CFR Part 570) and 2 CFR Part 200. Contractor, sub-contractors, Consultants, and sub-consultants agree to comply with, and are subject to, all applicable requirements as follows:

1. Equal Employment Opportunity - Compliance with Executive Order 11246 of September 24, 1965, entitled "Equal Employment Opportunity", as amended by Ex ecutive Order 11375 of October 13, 1967, and as supplemented in Department of Labor regulations (41 CFR chapter 60). The Contractor/Consultant will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. Contractor/Consultant will ensure that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex or national origin. The Contractor/Consultant will take affirmative action to ensure that applicants are employed and the employees are treated during employment, without regard to their race color, religion, sex, or national origin. Such actions shall include, but are not limited to, the following: employment, up-grading, demotion, or transfer; recruitment or recruitment advertising; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Contractor/Consultant agrees to post in a conspicuous place, available to employees and applicants for emplo yment, notices to be provided by the County setting forth the provisions of this non- discriminating clause.

2. Copeland “Anti-Kickback” Act (18 U.S.C. 874 and 40 U.S.C. 276c): All contracts and subgrants in excess of $2,000 for construction or repair awarded by recipients and subrecipients shall include a provision for compliance with the Copeland “Anti -Kickback” Act (18 U.S.C. 874), as supplemented by Department of Labor regulations (29 CFR part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each contractor or subrecipient shall be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he is otherwise entitled. The recipient shall report all suspected or reported violations to HUD.

3. Davis-Bacon Act, as amended (40 U.S.C. 276a to a -7): When required by Federal program legislation, all construction contracts awarded by the recipients and subrecipients of more than $2000 shall include a provision for compliance with the Davis -Bacon Act (40 U.S.C. 276a to a -7) and as supplemented by Department of Labor regulations (29 CFR part 5, “Labor Standards Provisions Applicable to Contracts Governing Federally Financed and Assisted Construction”).

Under this Act, contractors shall be required to pay wages to laborers and mechanics at a rate not less than the minimum wages specified in a wage determination made by the Secretary of Labor. In addition, contractors shall be required to pay wages not less than once a week. The recipient shall place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation and the award of a contract shall be conditioned upon the acceptance of the wage determination. The recipient shall report all suspected or reported violations to HUD.

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4. Contract Work Hours and Safety Standards Act (40 U.S.C. 327 through 333): Where applic able, all contracts awarded by recipients in excess of $2000 for construction contracts and in excess of $2500 for other contracts that involve the employment of mechanics or laborers shall include a provision for compliance with Sections 102 and 107 of th e Contract Work Hours and Safety Standards Act (40 U.S.C. 327–333), as supplemented by Department of Labor regulations (29 CFR part 5). Under Section 102 of the Act, each contractor shall be required to compute the wages of every mechanic and laborer on the basis of a standard workweek of 40 hours. Work in excess of the standard workweek is permissible provided that the worker is compensated at a rate of not less than 1 1/2 times the basic rate of pay for all hours worked in excess of 40 hours in the workweek. Section 107 of the Act is applicable to construction work and provides that no laborer or mechanic shall be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.

5. Rights to Inventions Made Under a Contract or Agreement— Contracts or agreements for the performance of experimental, developmental, or research work shall provide for the rights of the Federal Government and the recipient in any resulting invention in accordance with 37 CFR part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by HUD.

6. Rights to Data and Copyrights – Contractors and consultants agree to comply with all applicable provisions pertaining to the use of data and copyrights pursuant to 48 CFR Part 27.4, Federal Acquisition Regulations (FAR).

7. Clean Air Act (42 U.S.C. 7401 et seq .) and the Federal Water Pollution Control Act (33 U.S.C. 1251 et seq .), as amended —Contracts and subgrants of amounts in excess of $100,000 shall contain a provision that requires the recipient to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401 et seq.) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251 et seq.). Violations shall be reported to HUD and the Regional Office of the Environmental Protection Agency (EPA).

8. Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)— Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier shall also disclose any lobbying with non -Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient.

9. Debarment and Suspension (E.O.s 12549 and 12689)—No contract shall be made to parties listed on the General Services Administration's List of Parties Excluded from Federal Procurement or

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Nonprocurement Programs in accordance with E.O.s 12549 and 12689, “Debarment and Suspension,” as set forth at 24 CFR part 24. This list contains the names of parties debarred, suspended, or otherwise excluded by agencies, and contractors declared ineligible under statutory or regulatory authority other than E.O. 12549. Contractors with awards that exceed the small purchase threshold shall provide the required certification regarding its exclusion status and that of its principal employees.

10. Drug-Free Workplace Requirements —The Drug -Free Workplace Act of 1988 (42 U.S.C. 701) requires grantees (including individuals) of federal agencies, as a prior cond ition of being awarded a grant, to certify that they will provide drug -free workplaces. Each potential recipient must certify that it will comply with drug -free workplace requirements in accordance with the Act and with HUD's rules at 24 CFR part 24, subpart F.

11. Access to Records and Records Retention: The Consultant or Contractor, and any sub - consultants or sub -contractors, shall allow all duly authorized Federal, State, and/or County officials or authorized representatives access to the work area, as well as all books, documents, materials, papers, and records of the Consultant or Contractor, and any sub -consultants or sub- contractors, that are directly pertinent to a specific program for the purpose of making audits, examinations, excerpts, and transcrip tions. The Consultant or Contractor, and any sub- consultants or sub -contractors, further agree to maintain and keep such books, documents, materials, papers, and records, on a current basis, recording all transactions pertaining to this agreement in a form in accordance with generally acceptable accounting principles. All such books and records shall be retained for such periods of time as required by law, provided, however, notwithstanding any shorter periods of retention, all books, records, and supporti ng detail shall be retained for a period of at least four (4) years after the expiration of the term of this Contract.

12. Federal Employee Benefit Clause: No member of or delegate to the C ongress of the United States, and no Resident Commissioner shall be admitted to any share or part of this Contract or to any benefit to arise from the same.

13. Energy Efficiency : Mandatory standards and policies relating to energy efficiency which are contained in the State energy conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94A 163, 89 Stat. 871).

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February 2020

EXHIBIT A

CONTRACT DOCUMENTS
City of Hemet Contractor Contract (including Attachment 1, Attachment 2 and Attachment 3) Change Orders issued by Agency, signed by Contractor and (if necessary) approved by City Council Notice Inviting Bids, Instructions to Bidders, and Bidder’s Proposal and Information Required for Bid Submittal
Bid Schedule(s)
Addenda and/or Bulletins
Plans
Special Provisions (Specifications)
General Conditions
General Provisions Standard Specifications for Public Works Construction (“Greenbook”) 2021 edition as amended and supplemented
State St
andard Specifications
State Standard Plans
Permits issued by jurisdictional regulatory agencies
Electric, gas, telephone, and cable television company specifications and standards Notice of Award
Notice to Proceed
Certificate(s) of Required Insurance and Worker’s Compensation Insurance Security for Payment (Labor & Materials) and Performance If there is a conflict between any of the Contract Documents, the documents highest in precedence shall control. The order of precedence of the Contract Documents shall be a s provided in Section 3-7.2 of the Special Provisions. Detail drawings shall take precedence over general drawings.

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EXHIBIT B

CONTRACT PRICE
Not to Exceed O ne Million Four Hundred and Eighty-Eight Thousand Four Hundred and Eighty- Eight Dollars ($1,488,488.00)
The Contract Price for performing all Work described in the Contract Documents, including labor, materials, services and equipment is the total amount of all lump sum items and of all unit price sums, determined by multiplying the unit price for each item times the actual quantity of each such item, as determined by the Agency.

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EXHIBIT C

INSURANCE

1. General Requirements. Contractor must procure and maintain in full force and effect during the term of this Contract the following types of insurance with coverage limits complying, at a minimum, with the limits set forth below:

Type of Insurance L imits
Commercial General Liability $2,000,000 per occurrence/$4,000,000 general aggregate
Business Automobile Liability $2,000,000 combined single limit Workers’ Compensation/Employers $1,000,000 per accident or disease Liability
Surety Bonds As described below
P
rofessional Liability $1,000,000 per occurrence/$2,000,000 general aggregate
C
ontractors’ Pollution Legal Liability $1 ,000,000 per occurrence/$2,000,000 general aggregate
I
f the contractor maintains higher limits than the minimums shown above, the City requires and shall be entitled to coverage for the higher limits maintained by the contractor. Any available insurance proceeds in excess of the specific minimum limits of insurance and coverage shall be available to the City.

2. Commercial General Liab ility Insurance. Coverage shall be at least as broad as Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limit s no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location or the general aggregate limit shall be twice the required occurrence limit. City and its officers, officials, employees, volunteers, and agents shall be included as additional insured. Coverage shall be primary as respects the City, and any insurance or self-insurance maintained by the City shall not be required to contribute.

3. Business Auto Cover age. Coverage shall be at least as broad as Insurance Services Office Form Number CA 0001 covering Code 1 (any auto), with limits no less than $2,000,000 per accident for bodily injury and property damage. If Contractor or Contractor’s employees will use personal autos in any way on this Project, Contractor must provide evidence of hired and non -owned auto liability coverage.

4. Workers’ Compensation. Insurance as required by the State of California, with Statutory Limits, and Employers’ Liability insurance with a limit of no less than $1,000,000 per accident for bodily injury or disease.

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5. Surety Bonds. Contractor shall provide the following Surety Bonds: (1) Bid bond, (2) performance bond, (3) payment bond, and (4) maintenance bond. The Payment Bond and the Performance Bond shall be in a sum equal to the contract price. If the Performance Bond provides for a one-year warranty a separate Maintenance Bond is not necessary. If the warranty period specified in the contract is for longer than one year a Maintenance Bond equal to 10% of the contract price is required. Bonds shall be duly executed by a responsible corporate surety, authorized to issue such bonds in the State of California and secured through an authorized agent with an office in California.

6. Contractors’ Pollution Legal Liability and/or Asbestos Legal Liability and/or Errors and Omissions (if project involves environmental hazards) with limits no less than $1,000,000 per occurrence or claim, and $2,000,000 policy aggregate. Contractor shall maintain continuous coverage through a period no less than three (3) years after completion of the services required by this Contract.

7. Other Insurance. Contractor may be required to obtain such other insurance coverage as may be required by applicable law or by the City.

8. Excess or Umbrella Liability Insurance (Over Primary). If an excess or umbrella liability policy is used to meet limit requirements, the insurance must provide coverage at least as broad as specified for the underlying coverages. Any such coverage provided under an excess or umbrella liability policy must include a “drop down provision” providing primary coverage above a maximum $25,000 self -insured retention for liability not covered by primary but covered by the umbrella. Coverage must be provided on a “pay on behalf” basis, with defense costs payable in addition to policy limits. There must be no cross-liability exclusion precluding coverage for claims or suits by one insured against another.

Coverage must be applicable to City for injury to employees of Contractor, its subcontractors or others performing work to satisfy Contractor’s obligations under this Contract. The scope of coverage provided is subject to approval of City following receipt of proof of insurance as required herein.

9. Certificates of Insurance and Endorsements . Prior to commencing any Work under this Contract, Contractor must file with the Director Certificates of Insurance and Endorsements evidencing the existence of all insurance required by this Contract, along w ith such other evidence of insurance or copies of policies as may reasonably be required by City. Such Certificates of Insurance and Endorsements must be in a form approved by the City Attorney of City. Contractor must maintain current certificates and endorsements on file with City during the term of this Contract reflecting the existence of all required insurance. Each of the certificates must expressly provide that no material change in the policy, or termination thereof, will be effective except upon 30 days prior written notice to City. The City reserves the right to require complete, certified copies of the insurance certificates and endorsements.

10. Accessibility of Insurers. Insurance is to be placed with insurers with a current A.M. Best rating of no less than A: VII, unless otherwise acceptable to the City.

11. Waiver of Subrogation. Contractor hereby agrees to waive rights of subrogation which any insurer of Contractor may acquire from Contractor by virtue of the payment of any loss. Contractor agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the Entity for all work performed by the Contractor, its employees, agents and subcontractors.

12. Failure to Maintain Required Insurance . If Contractor, for any reason, fails to have in place at all times during the term of this Contract all of the required insurance coverage, the Director may obtain such coverage at Contractor’s expense and deduct the cost from the sums due Contractor.

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13. Subcontractors. Contractor shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that Entity is an additional insured on insurance required from subcontractors. For CGL coverage subcontractors shall provide coverage with a format least as broad as CG 20 38 04 13.

14. Effect of Coverage. The existence of the required insurance coverage under this Contract will not be deemed to satisfy or limit Contractor’s indemnity obligations under this Contract. Contractor acknowledges that the insurance coverage and policy limits set forth in this Contract constitute the minimum coverage and policy limits required. Any insurance proceeds available to City in excess of the limits and coverage required by this Contract, and which is applicable to a given loss, must be made available to City to compensate it for such losses.

15. Special Risks or Circumstances. Entity reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other circumstances.

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PAYMENT BOND
(Bond for Labor and Material)
KNOW ALL PERSONS BY THESE PRESENTS:

1.01 THAT WHEREAS, CITY OF HEMET (Owner) has awarded to (Name of Contractor) as Principal, Contract Number
dated the day of , 20 (the Contract), titled the City of Hemet Project in the amount of $
, which Contract is by this reference made a part hereof, for the work of the following Contract:

[PROJECT NAME AND LOCATION]

1.02 AND WHEREAS, Principal is required to furnish a bond in connection with the Contract to secure the payment of claims of laborers, mechanics, material suppliers, and other persons as provided by law;

1.03 NOW, THEREFORE, we, the undersigned Principal and (Name of Surety) , as Surety, are held and firmly bound unto Owner in the sum of 100% OF THE CONTRACT PRICE ($ ), for which payment well and truly to be made we bind ourselves, our heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these presents.

1.04 THE CONDITION OF THIS OBLIGATION IS SUCH, that if Principal, or its executors, administrators, successors, or assigns approved by Owner, or its subcontractors shall fail to pay any of the persons named in California Civil Code Section 9100, or amounts due under the State of California Unemployment Insurance Code with respect to work or labor performed under the Contract, or for any a mounts required to be deducted, withheld, and paid over to the State of California Employment Development Department from the wages of employees of Principal and subcontractors pursuant to Section 13020 of the State of California Unemployment Insurance Cod e with respect to such work and labor, that Surety will pay for the same in an amount not exceeding the sum specified in this bond, plus reasonable attorneys’ fees, otherwise the above obligation shall become and be null and void.

1.05 This bond shall inure to the benefit of any of the persons named in California Civil Code Section 9100, as to give a right of action to such persons or their assigns in any suit brought upon this bond. The intent of this bond is to comply with the California Mechanic’s Lien Law.

1.06 Surety, for value received, hereby expressly agrees that no extension of time, change, modification, alteration, or addition to the undertakings, covenants, terms, conditions, and

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agreements of the Contract, or to the work to be performed thereunder, shall in any way affect the obligation of this bond; and it does hereby waive notice of any such extension of time, change, modification, alteration, or addition to the undertakings, covenants, terms, conditions, and agreements of the Contract, or to the work to be performed thereunder.

1.07 Surety’s obligations hereunder are independent of the obligations of any other surety for the payment of claims of laborers, mechanics, material suppliers, and other persons in connection with Contract; and suit may be brought against Surety and such other sureties, jointly and severally, or against any one or more of them, or against less than all of them without impairing Owner’s rights against the other.

1.08 Correspondence or claims relating to this bond shall be sent to Surety at the address set forth below.

IN WITNESS WHEREOF, we have hereunto set our hands this day of , 20 .

CONTRACTOR AS PRINCIPAL SURETY
Co
mpany: (Corp. Seal) Company: (Corp. Seal)
Signature Signature
Name Name
Title Title
Street Address Street Address
City, State, Zip Code City, State, Zip Code

END OF DOCUMENT

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CONSTRUCTION PERFORMANCE BOND

THIS CONSTRUCTION PERFORMANCE BOND (Bond ) is dated [Month, Day] , 201_ is in the amount of [ Insert Amount ] (Penal Sum), which is 100% of the Contract Sum and is entered into by and between the parties listed below to ensure the faithful performance of the Contract identified below. This Bond consists of this page and the Bond Terms and Conditions, Paragraphs 1 through 14 attached to this page. Any singular reference to [ Insert name of Contractor ] (Contractor), [Insert name of Surety ] (Surety), CITY OF HEMET ( Owner), or other party shall be considered plural where applicable.

CONTRACTOR: SURETY:

[Insert name of Contractor] [Insert name of Surety]

Address Principal Place of Business

City/State/Zip City/State/Zip

CONSTRUCTION CONTRACT: [ PROJECT NAME AND ADDRESS], dated [Month, Day], 20_, in the amount of [ Insert Amount].

CONTRACTOR AS PRINCIPAL SURETY

Company: (Corp. Seal) Company: (Corp. Seal)

Signature: Signature:

Name: Name:

Title: Title:

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BOND TERMS AND CONDITIONS

1. Co
ntractor and Surety, jointly and severally, bind themselves, their heirs, executors, administrators, successors and assigns to Owner for the complete and proper performance of the Construction Contract, which is incorporated herein by reference.

2. If Contractor completely and properly performs all of its obligations under the Construction Contract, Surety and Contractor shall have no obligation under this Bond.

3. If there is no Owner Default, Surety’s obligation under this Bond shall arise after:

3.1 Owner provides Surety with written notice that Owner has declared a Contractor Default under the Construction Contract pursuant to the terms of the Construction Contract; and

3.2 Owner has agreed to pay the Balance of Contract Sum:

3.2.1 To Surety in accordance with the terms of this Bond and the Construction Contract; or

3.2.2 To a Contractor selected to perform the Construction Contract in accordance with the terms of this Bond and the Construction Contract.

4. When Owner has satisfied the conditions of Paragraph 3 above, Surety shall promptly (within 40 Days) and at Surety’s expense elect to take one of the following actions:

4.1 Arrange for Contractor, with consent of Owner, to perform and complete the Construction Contract (but Owner may withhold consent, in which case the Surety must elect an option described in Paragraphs 4.2, 4.3 or 4.4 below); or

4.2 Undertake to perform and complete the Construction Contract itself, through its agents or through independent contractors or Construction entities; provided, that Surety may not select Contractor as its agent or independent contractor or Contractor without Owner’s consent; or

4.3 Undertake to perform and complete the Construction Contract by obtaining bids from qualified contractors or Construction entities acceptable to Owner for a contract for performance and completion of the Construction Contract and, upon determination by Owner of the lowest responsive and responsible Bidder, arrange for a contract to be prepared for execution by Owner and the contractor or Contractor selected with Owner’s concurrence, to be secured with performance and payment bonds executed by a qualified surety equivalent to the bonds issued on the Construction Contract; and, if Surety’s obligations defined in Paragraph 6 below, exceed the Balance of Contract Sum, then Surety shall pay to Owner the amount of such excess; or

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4.4 Waive its right to perform and complete, arrange for completion, or obtain a new contractor or Contractor, and with reasonable promptness under the circumstances and, after investigation and consultation with Owner, determine in good faith its monetary obligation to Owner under Paragraph 6 below, for the performance and completion of the Construction Contract and, as soon as practicable after the amount is determined, tender payment therefor to Owner with full explanation of the payment’s calculation. If Owner accepts Surety’s tender under this Paragraph 4.4, Owner may still hold Surety liable for future damages then unknown or unliquidated resulting from the Contractor Default, as agreed by Owner and Surety at the time of tender. If Owner disputes the amount of Surety’s tender under this Paragraph 4.4, Owner may exercise all remedies available to it at law to enforce Surety’s liability under Paragraphs 6 and 6.3 below.

5. At all times Owner shall be entitled to enforce any remedy available to Owner at law or under the Construction Contract including, without lim itation, and by way of example only, rights to perform work, protect Work, mitigate damages, advance critical Work to mitigate schedule delay, and coordinate Work with other consultants or contractors.

6. If Surety elects to act under Paragraphs 4.1, 4.2 or 4.3 above, within the time period provided in Paragraph 4, above, and complies with its obligations under this Bond, Surety’s obligations under this Bond are commensurate with Contractor’s Construction Contract obligations.

Surety’s obligations include, but are not limited to:

6.1 Contractor’s obligations to complete the Construction Contract and correct Defective Work;

6.2 Contractor’s obligations to pay liquidated damages; and

6.3 To the extent otherwise required of Contractor under the Construction Contract, Contractor’s obligations to pay additional legal, design professional, and other costs not included within liquidated damages resulting from Contractor Default (but excluding attorney’s fees incurred to enforce this Bond).

7. If Surety does not elect to act under Paragraphs 4.1, 4.2, 4.3, or 4.4, above, within the time period provided in Paragraph 4, above, or comply with its obligations under this Bond, then Surety shall be deemed to be in default on this Bond ten Days after receipt of an additional written notice from Owner to Surety demanding that Surety perform its obligations under this Bond. Such Surety default shall be independent of the Contractor Default. To the extent Surety’s independent default causes Owner to suffer damages including, but not limited to, delay damages, which are different from, or in addition to (but not duplicative of) damages which Owner is entitled to receive under the Construction Contract, Surety shall also be liable for such damages. In the event any Surety obligation following its independent default is inconsistent or conflicts with California Civil Code Section 2809, or any other law which either prohibits, restricts, limits or modifies in any way any obligation of a surety which is larger in amount or in any other respect more burdensome than that of the principal, Surety hereby waives the provisions of such laws to that extent.

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8. If Surety elects to act under Paragraphs 4.1, 4.3 or 4.4 above, within the time period provided in Paragraph 4, above, and complies with all obligations under this Bond, Surety’s monetary obligation under this Bond is limited to the Penal Sum.

9. No right of action shall accrue on this Bond to any person or entity other than Owner or its successors or assigns.

10. Surety hereby waives notice of any change, alteration or addition to the Construction Contract or to related subcontracts, design agreements, purchase orders and other obligations, including changes of time, and of any Owner action in accordance with Paragraph 5 above. Surety consents to all terms of the Construction Contract, including provisions on changes to the Contract. No extension of time, change, alteration, Modification, deletion, or addition to the Contract Documents, or of the Work (including services) required thereunder, or any Owner action in accordance with Paragraph 5 above shall release or exonerate Surety on this Bond or in any way affect the obligations of Surety on this Bond, unless such action is an Owner Default.

11. Any proc eeding, legal or equitable, under this Bond shall be instituted in any court of competent jurisdiction where a proceeding is pending between Owner and Contractor regarding the Construction Contract, or in the Superior Court of the County of Riverside, California, or in a court of competent jurisdiction in the location in which the Work is located.

Communications from Owner to Surety under Paragraph 3.1 above shall be deemed to include the necessary agreements under Paragraph 3.2 above unless expressly stated otherwise.

12. All notices to Surety or Contractor shall be mailed or delivered (at the address set forth on the signature page of this Bond), and all notices to Owner shall be mailed or delivered as provided in Section 1 -7.1.10 of the Special Provisions. Actual receipt of notice by Surety, Owner or Contractor, however accomplished, shall be sufficient compliance as of the date received at the foregoing addresses.

13. Any provision in this Bond conflicting with any statutory or regulatory requirement shall be deemed deleted here from and provisions conforming to such statutory requirement shall be deemed incorporated herein.

14. Definitions

14.1 Balance of Contract Sum: The total amount payable by Owner to Contractor pursuant to the terms of the Construction Contract after all proper adjustments have been made under the Construction Contract, for example, deductions for progress payments made, and increases/decreases for approved Modifications to the Construction Contract.

14.2 Construction Contract: The agreement between Owner and Contractor identified on the signature page of this Bond, including all Contract Documents and changes thereto.

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14.3 Contractor Default: Material failure of Contractor, which has neither been remedied nor waived, to perform or otherwise to comply with the terms of the Construction Contract, limited to “default” or any other condition allowing a termination for cause as provided in Section 6-7.3 of the Special Provisions).

Owner Default: Material failure of Owner, which has neither been remedied nor waived, to pay Contractor progress payments due under the Construction Contract or to perform other material terms of the Construction Contract, if such failure is the cause of the asserted Contractor Default and is sufficient to justify Contractor termination of the Construction Contract.

END OF DOCUMENT

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VICINITY MAP

SHEET INDEX
LEGEND/ABBREVIATIONS GENERAL STREET IMPROVEMENT NOTES:
445 E. FLORIDA AVENUE
HEMET, CA 92543
(951) 765-2360
CIP NO. 5713
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LOCATION MAP

LOOP DETECTOR PLACEMENT DETAIL SHOULDER BACKING DETAIL SMOOTH PAVEMENT JOINT TRANSITION DETAIL

ENGINEER'S NOTE TO CONTRACTOR

NOTIFICATIONS
12/20/2023

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City of Hemet
City Council Meeting

STAFF REPORT

Meeting: City Council Meeting - Jan 30 2024
Department: Administration
Submitted by: Mark Prestwich, City Manager
Mark Prestwich, City Manager;

☐ Receive and File ☐ Consent Calendar ☒ Business Item ☐ Public Hearing

TITLE:

Discussion and Consideration of a Proposed City of Hemet Hotel Incentive Program

RECOMMENDED ACTION:

It is respectfully recommended that the City Council:

Discuss and provide direction to the City Manager regarding draft recommendations of Hotel Incentive Program elements.

BACKGROUND:

Every successful visitor serving hotel establishment periodically renovates their property to increase improvements, safety assets. deteriorating or Needed address and satisfaction guest aging competition, and improving visitor convenience are also factors that frequently drive hotel renovation projects.

A in (or hotels local their investment of have municipalities California number incentivized development of hotel rooms), concluding that incentive programs supporting the renovation of a sufficient scale can drive additional tax revenues to their city (e.g., hotel tax, property tax, and sales tax) and further improve their community’s guest lodging amenities. While the majority of California hotel incentive programs are designed to attract the construction of new higher-rated hotels (e.g., three to five-star properties), some programs are designed to support the renovation of existing hotel assets.

One of the City Council’s 2023-24 Strategic Plan Action Items includes direction to the City Manager to develop recommendations for a Hotel Incentive Program. The purpose of such a program is multi- fold:

 Provide attractive and desirable visitor-serving facilities and experiences;  Encourage private investment in lodging facilities;
 Generate net increased transient occupancy tax revenues to provide core municipal services; and

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 Promote and enhance the City of Hemet's economy.

Staff has reviewed Hotel Incentive Programs in other communities and considered the needs of Hemet's privately-owned hotel properties. Each property is distinct in its own life cycle, market position, and renovation needs. The City of Hemet's hotel tax rate is 10%, which is similar to rates in other California cities, as noted below (as of November 2020).

As a result, City staff has developed a proposed Hotel Incentive Program to encourage a significant investment, if needed and desired, for each facility. Given the age, poor reputation, and condition of several investment minimum establishes program aggressive properties, hotel Hemet the requirements for hotel rooms, and each facility’s “shell/property” to ensure any renovation will materially improve the hospitality amenity and visitor experience.

The recommended Hotel Incentive Program also incentivizes the rebuilding of a downtown hotel in Hemet's and the in creation business investment Downtown ignite to District Village private community's downtown core. The City of Hemet's historic downtown used to be home to a prominent hotel (first built as the three-story Mayberry Hotel in 1894 at the southeast corner of Florida Avenue and State Street, and later destroyed in 1918's earthquake). In 1928, the Alessandro Hotel was rebuilt on the foundation of the Mayberry Hotel but was removed in 1954 to make way for the new Security Pacific National Bank.

A 2022 study commissioned by the American Hotel & Lodging Association reports that for every $100 spent on lodging, hotel guests spend an additional $220 during their trip.

DISCUSSION:

It is recommended the program consist of three separate methodologies and automatically sunset in five years unless extended by the City Council:

 Renovation Methodology. To incentivize a significant modernization of any existing hotel and to protect and grow existing City TOT revenues, a 25-year cost-share methodology on the "growth" in the Transient Occupancy Tax (TOT) revenues for each property ("TOT base") is recommended. The TOT base would be established by calculating the prior three-year average TOT annual revenue or the prior 12-month TOT revenue, whichever is greater. It is

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recommended the TOT base be tied to a consumer price index so that the City’s base revenue is not impacted by this program over the cost-sharing term. The proposed methodology is intended to aggressively offset the private investment and return 90% of the TOT revenue growth to the property owner for the first ten years, 75% over years 11-15, 50% over years 16- 20, and 25% over years 21-25.

 Historic Hotel Methodology. To serve as a catalyst for the reinvigoration of Hemet's Historic "Downtown Village District", it is recommended the City aggressively incentivize the rebuilding of a hotel on or near the original historic hotel site. The proposed methodology would return 90% of TOT revenue to the property owner for the first 15 years, 75% over years 16-20, and 50% over years 21-30. The Historic Hotel Methodology requires compliance with all hospitality industry standards of at least a three-star rated hotel (see Attachment 4 for a description of hotel ratings and amenities). A downtown hotel is expected to boost the downtown's economic vitality and other investments as restaurants, retailers, and other businesses should expect to see an increase in customers and sales once the hotel opens.

 Purchase of an Existing Hotel. The proposed program also provides an option for the City to purchase an existing hotel at fair market value. This program component would facilitate the transition of an older, distressed hotel to a higher and better community-serving use (e.g., mixed-use, commercial project, housing, etc.).

Program Eligibility

 Minimum “Furniture, Fixture and Equipment” costs of not less than $15,000 per guestroom.  Minimum “Shell/Property Improvements” averaging at least $20,000 per guestroom (expenses related to the expansion of hotel rooms would be considered eligible expenses).  Obligation to comply with Prevailing Wage requirements for property improvements.  Use good faith efforts to hire local residents and contract with local subcontractors, suppliers, and other businesses for property improvements.

Proposed Application Procedures
The following application procedures are recommended for hotel operators desiring to participate in the Hotel Incentive Program:

 Submit an incentive program application to the City Manager;  Provide a business plan documenting planned improvements to the hotel property, including an estimate of revenues and expenditures for the operation of the hotel through the program’s cost-sharing term; and
 Execute and record an operating covenant approved by the City Council regarding continuing use of the hotel, maintenance of the property, non-discrimination, and any other provisions the City Council may reasonably determine are necessary or appropriate to preserve the goals of the program.

Next Steps
Attached to this report is a draft Ordinance (see Attachment 1) for review. After receiving feedback on program elements and the draft Ordinance, staff is prepared to return with a first reading of a Hotel Incentive Program Ordinance at the February 13, 2024, City Council meeting.

STRATEGIC PLAN INTEGRATION:

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GOAL ONE: QUALITY OF LIFE:

To ensure that Hemet is safe, clean, attractive and comfortable for all who live, work, and visit.

Objective 1: Enhance the visual appearance of the community to make it attractive and reduce blight.

Objective 2: Explore and implement homelessness solutions for the City of Hemet.

Objective 3: Increase Public Safety visibility and response.

GOAL TWO: ECONOMIC OPPORTUNITY
To ensure that Hemet is a hub, with access to quality jobs, shopping options, and a varied and sustained tax base.

Objective 1: Develop business practices that welcome new development by streamlining processes.

Objective 2: Provide resources for new businesses to enhance the customer service experience.

FISCAL IMPACT:

The proposed Hotel Incentive Program does not require any expenditures by the City for renovation and/or construction of a hotel. Rather, the program utilizes a rebate of the City's Transient Occupancy Tax to incentivize private investment in hotel assets. The program also protects existing City transient occupancy (hotel) tax revenues by structuring the cost-share incentive on the existing base annual revenue received by the City over the past 12 months or an average of the prior three years, whichever is greater.

For the renovation of existing hotels, the program includes a 25-year cost-share methodology. As an example, assuming a 33-room hotel, selling rooms today at an average of $80/room night, is able to increase their rate to $140/room night post-renovation, the City's hotel tax revenue would increase by $258,706 (40% occupancy) to $662,830 (60% occupancy) over 25 years. (see Attachment 2 for an example). Importantly, the City would also enjoy an improved visitor-service asset.

cost-share 30-year aggressive more includes property a historic a of restoration The hotel methodology. As an example, the conceptual construction of a downtown 70-room hotel beginning at $160/room night could generate $1.9 million (40% occupancy) to $2.8 million (60% occupancy) in City hotel tax revenue over 30 years (see Attachment 3 for an example). Because the City's methodology incentivizes the investor to build a high-quality asset and enjoy the benefits of improved economic performance, the City's tax revenue projections would increase if higher rates and occupancy performance occurred. Additionally, the City is projected to experience an increase in net property tax revenue of $2.5 million over 30 years (assuming a $7 million assessed value), and a net sales tax revenue increase of $539,000 over 30 years, resulting in a total cumulative net hotel, property, and sales tax revenue increase of $4.9 million to $5.9 million depending on occupancy.

For potential purchases of any older, distressed hotel that may not be interested in participating in renovating their property through this program but would consider the sale of the asset to the City, General Fund reserves are available to acquire and/or finance acquisition costs and prepare the property for transition to higher and better use.

ATTACHMENT(S):

Attachment 1 - Ordinance Hotel Incentive
Attachment 2 - Analysis of Conceptual Renovated 33 Room Hotel (2) Attachment 3 - Analysis of Conceptual New 70 Room Hotel Attachment 4 - The AAA 5 Diamond Award® Rating System

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CITY COUNCIL ORDINANCE NO. 2024-xxx

CITY OF HEMET

HEMET, CALIFORNIA
ORDINANCE NO. 2024-xxx

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HEMET,
CALIFORNIA, ADDING SECTIONS 74-100 THROUGH 74-105 TO

THE HEMET MUNICIPAL CODE RELATED TO THE HOTEL

INVESTMENT INCENTIVE PROGRAM

THE CITY COUNCIL OF THE CITY OF HEMET DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The adoption of this Ordinance is exempt from review under the California Environmental Quality Act (CEQA) pursuant to the following, each on a separate and independent basis: CEQA Guidelines, Section 15378 (not a project) and Section 15061 (b)(3) (no significant environmental impact).

SECTION 2. Section 74-100 is hereby added to the Hemet Municipal Code to read as follows:

Hotel Investment Incentive Program
Section 74-100 Purpose
(A) The purpose of the Hotel Investment Inventive Program is to provide an incentive program for the renovation and expansion of hotel facilities which:
(1) Enhances the tourist and travel experience for visitors to the City; (2) Provides attractive amenities to the public and desirable visitor service facilities and experiences;
(3) Assists the City in achieving its tourism goals;
(4) Encourages continued investment in lodging facilities; and (5) Increases the transient occupancy tax revenue to the City. (B) In the implementation of this program, the City Council finds:
(1) The general welfare and material well-being of the residents of the City depends in substantial measure upon the growth and expansion of the tourism and travel industries in the City.

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(2) The renovation and expansion of the inventory of hotels in the City will create desirable visitor-serving facilities that will: (a) contribute to the growth and expansion of tourism and travel opportunities in the City; (b) provide employment opportunities for the residents of the City; (c) provide additional transient occupancy tax revenues to the City; and (d) promote and enhance the economy of the City.
(3) It is in the best interest of the City to induce and encourage the expansion, renovation, and maintenance of hotel facilities that might not otherwise be as successful, thereby creating new sources of revenues for the City’s general fund, which supports the public services the City provides its residents and visitors.
(4) The authority granted and the purposes to be accomplished by this chapter are proper local governmental and public purposes for which public funds can be expended, and the renovating, maintaining, and expanding of the inventory of hotels is of paramount importance to the City, its residents, and businesses.

Section 74-101 Definitions.

For the purposes of the Hotel Investment Incentive Program, the following definitions shall apply:

Approved Hotel means any existing hotel that has submitted an application and a business plan for participation in the Hotel Investment Incentive Program and has been approved by the City to participate in the Hotel Investment Incentive Program.

Business Plan means a written plan submitted to the City documenting, at a minimum (a) planned improvements to the hotel property, including the estimated costs of the improvements, and (b) an estimate of revenues and expenditures for the operation of the hotel through the term of the Hotel Investment Incentive Program. The Business Plan shall compare past revenues with the future estimated revenues as a result of the proposed new expenditures.

Existing Hotel means any property constructed, occupied, and operating as a hotel containing nine or more guest rooms for compensation and where the guest rooms are: (a) designed and intended as transient occupancy accommodations and (b) that was issued a final certificate of occupancy on or before February 1, 2024.

Furniture, Fixtures, and Equipment means movable furniture, fixtures, or other equipment that have no permanent connection to the structure of a building or utilities within the hotel. More specifically, furniture, fixtures, and /or equipment would include decorative items, wall coverings, flooring treatment, window treatments, casework, furnishings and accessories, furniture, data communications equipment, voice

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communications equipment, audio visual communications equipment, electronic surveillance equipment, electronic detection and alarm equipment, commercial equipment, food service equipment, entertainment equipment, athletic and recreational equipment, collection and disposal equipment. Operational supplies include all supplies needed for the operation of the hotel, such as stationery, computer equipment and accessories, guestroom TVs and mounts, alarm clocks in rooms, linens, pillows, housekeeping carts and supplies, trash cans, all items for the hotel restaurant and bar, banquet and conference facilities (including china, utensils, glasses, etc.). Furniture, fixtures, and equipment, for qualifying cost purposes, include all taxes, freight, warehouse expenses, installation fees, and purchasing fees.

Hotel for the purposes of the Hotel Investment Incentive Program shall be defined as found in Section 74-71, except that the Hotel Investment Incentive Program shall only apply to properties containing nine or more guest rooms for compensation and where the guest rooms are designed and intended as transient occupancy accommodations and does not include those properties offered as a bed and breakfast facilities, bed and breakfast inns, campground, guest houses, short term lodging units, homeless housing facilities, or residential care homes.

Hotel Investment Incentive Program or Incentive Program means the transient occupancy tax increment rebate program established by this Ordinance.

Indemnification Agreement means the agreement between the City and an operator in which the operator agrees to indemnify and defend the City against any claims or lawsuits that are brought against the City (and all liabilities, damages, and costs incurred by the City in connection therewith) as a result of the application of this Ordinance to a hotel participating in the Incentive Program.

Operating Covenants means the operating covenants to be recorded against hotel properties for hotels participating in the Incentive Program, which shall include provisions regarding continuing use of the hotel as a hotel, maintenance, and non- discrimination.

Operator means the person who runs and operates a hotel, whether in the capacity of owner, developer, lessee, sub-lessee, mortgagee in possession, licensee, franchisee, or any other capacity, or the assignee or designee of such person.

Shell Costs mean actual and direct third-party costs of all materials, labor, and equipment associated with the renovation or expansion of the hotel as determined by the City Manager, acting in his/her sole and absolute discretion. Items excluded from Shell Costs include, without limitation, Furniture, Fixtures and Equipment costs, architectural and engineering fees, permits and fees, legal costs, accounting costs, taxes, sales or lease commissions, marketing expenses, initial operating capital, and other indirect costs, as well as developer or hotel operator overhead.

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Tax Sharing Agreement means an agreement between the Operator and the City setting forth the details and obligations of the parties to renovate a Hotel according to the approved Business Plan and receive transient occupancy tax increment as set forth in this Chapter.

Transient Occupancy means a stay of no more than thirty (30) consecutive calendar days.

Transient Occupancy Tax means the tax established by and paid to the City pursuant to this Chapter.

Transient Occupancy Tax Base means the historical production of transient occupancy tax by an existing hotel calculated as the average transient occupancy tax per year based on the prior three years or prior twelve months, whichever is greater, of reported transient occupancy tax due to the City, then subsequently adjusted on an annual basis based on the Riverside Area Consumer Price Index – All Urban Consumers published by the U.S. Bureau of Labor Statistics.

Transient Occupancy Tax Increment means, on an annual basis, the difference between the transient occupancy tax base and the amount of transient occupancy tax actually received by the City from the approved existing hotel after renovation. It is determined by reference to actual receipts by the City of transient occupancy tax from the improved approved hotel. Under no circumstances shall the City be liable for any reimbursement of transient occupancy tax increment not actually received and permanently retained by the City.

Transient Occupancy Tax Sharing means the rebate from the City to the operator of an approved hotel of a portion of that hotel’s transient occupancy tax increment, as determined each year for which the tax sharing agreement is valid. The payment of the approved hotel’s portion of the transient occupancy tax increment shall be paid to the approved hotel within thirty (30) days after the anniversary date of the issuance of the certificate of completion.

Under Construction means that all necessary discretionary entitlements have been approved by the City, grading and building permits have been issued, inspection approvals by the City of grading and foundations to grade level have been obtained, and vertical construction of hotel rooms has begun.

Section 74-102. Participation Requirements.
(A) To participate in the Hotel Investment Incentive Program, the operator of any existing eligible hotel which plans a renovation to improve the hotel facility must:
(1) Complete and submit to the City Manager an application for participation in the Incentive Program on the City’s official Incentive Program application form; (2) Submit a Business Plan in writing.

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(3) Allow the City to inspect the existing hotel to determine that the improvements contemplated by the Business Plan, which are the justification for the transient occupancy tax sharing, do not already exist, and, upon demand of the City, provide the City with such evidence of the approved business’ intention and ability to proceed to construct the necessary improvements or make the necessary purchases, as are reasonably satisfactory to the City;
(4) Receive approval for participation in the Incentive Program from the City Council;
(5) Enter into a transient occupancy tax sharing agreement in the form approved by the City, which shall include provisions for payment of, and adherence to, prevailing wage requirements and a commitment to use good faith efforts to hire local residents and contract with local subcontractors, suppliers, and other local businesses for property improvements;
(6) Execute and record against the hotel property the operating covenants in a form approved by the City;
(7) Execute an indemnification agreement in a form approved by the City; and
(8) Upon completion of the subject improvements or purchases and before transient occupancy tax sharing commences, allow the City to inspect the approved business to verify that the contemplated improvements and/or purchases have been made and completed to enable the business to increase its occupancy and/or room rate. If the improvements are approved by the City, the City shall issue a Certificate of Completion.
(B) Required Level of Improvements for Eligibility
(1) Minimum Furniture, Fixture, and Equipment Costs of not less than $15,000 per guestroom.
(2) In addition to the Furniture, Fixture, and Equipment expenditures, Shell/Property Improvements totaling at a minimum, $20,000 per guestroom. (3) Expenses related to hotel expansion projects are eligible expenses provided they are qualifying Shell Costs or Furniture, Fixture, and Equipment costs. (C) Future hotels are ineligible for participation in the Hotel Investment Incentive Program, except where a future hotel complies with the requirement identified in subsection (A) “Participation Requirements” above to rebuild any of the historic City hotels and the following:

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(1) The minimum number of guestrooms shall be no less than seventy (70). (2) Required compliance with all industry standards of at least a 3-star rated hotel.
(3) The rebuilt historic hotel must be built within a quarter mile of any prior historic hotel.

Section 74-103. City Council Authority; Incentives.
(A) The City Council is authorized to enter into transient occupancy tax sharing agreements and required recordation of operating covenants with hotel operators who have demonstrated eligibility, and satisfied all Incentive Program participation requirements.
(B) Existing Eligible Hotels:
(1) The term of the Incentive Program shall be 25 years from the date an eligible hotel is issued a Certificate of Completion.
(2) From the first year through the tenth year of the date of Incentive Program participation approval and completed renovations, the hotel operator shall receive an amount of transient occupancy tax increment equal to 90% of the transient occupancy tax increment submitted to the City for the prior year. (3) Starting at the eleventh year and continuing through the fifteenth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 75% of the transient occupancy tax increment submitted to the City for the prior year.
(4) Starting at the sixteenth year and continuing through the twentieth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 50% of the transient occupancy tax increment submitted to the City for the prior year.
(5) Starting at the twenty-first year and continuing through the twenty-fifth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 25% of the transient occupancy tax increment submitted to the City for the prior year.
(6) The cost share percentages shall remain the same in the event the City’s hotel tax rate is increased.
(C) Rebuilt Historic Hotels:
(1) The term of the Incentive Program shall be for 30 years from the date an eligible hotel is issued a Certificate of Completion.

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(2) From the first year through the fifteenth year of the date of Incentive Program participation approval and completed renovations, the hotel operator shall receive an amount of transient occupancy tax increment equal to 90% of the transient occupancy tax increment submitted to the City for the prior year. (3) Starting at the sixteenth year and continuing through the twentieth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 75% of the transient occupancy tax increment submitted to the City for the prior year.
(4) Starting at the twenty-first year and continuing through the thirtieth year of Incentive Program participation, the operator shall receive an amount of transient occupancy tax increment equal to 50% of the transient occupancy tax increment submitted to the City for the prior year.
(5) The cost share percentages shall remain the same in the event the City’s hotel tax rate is increased.
(D) The City Council may, by Development Agreement, enter into a transient occupancy tax-sharing agreement on different terms.

Section 74-104. Operating Agreement.

Each operator of a hotel that enters into a transient occupancy tax sharing agreement with the City shall record against the participating hotel property the following operating covenants to run with the land:
(A) Continuing Use and Operation. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees, to continually operate and use the hotel property as a hotel. None of the rooms in the hotel will at any time be utilized as a non-transient residential property or rental periods that exceed thirty (30) days, except for senior living units, which may still qualify for the Incentive Program so long as they meet all other requirements of the Program. No part of the hotel will at any time be owned by a cooperative housing corporation. All uses conducted on the hotel property shall conform to all ordinances, statutes, rules, and regulations of the City, the county of Riverside, and the state of California.
(B) Maintenance. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees to continually maintain and repair or cause to be maintained and repaired, the hotel property, including, but not limited to, buildings, structures, parking areas, lighting, signs, and landscaping, to be in good condition conforming to all applicable laws, including all applicable provisions of the City’s Municipal Code and to hotel industry standards applicable to that type of hotel, and shall keep the hotel property free from any accumulation of debris or waste materials.

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(C) Nondiscrimination. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees, that the hotel and any of its employees shall not discriminate against any person on the basis of sex, gender, gender identity, gender expression, marital status, domestic partnership status, sexual orientation, race, color, religion, ancestry, national origin, or disability.

Section 74-105. General Provisions.
(A) All transient occupancy tax revenues or transient occupancy tax increment remitted to the City by an operator of a hotel that enters into a transient occupancy tax sharing agreement with the City shall be deemed general fund revenues of the City and shall be deposited in the City’s general fund.
(B) The City may terminate the transient occupancy tax sharing agreement on ten (10) days’ notice if the operator violates any of the operating covenants, provided that such violation or violations continue to exist at the end of said ten-day period. Specifically, without limiting the generality of the foregoing, a failure to pay to the City, in a timely manner and in the correct amount, the transient occupancy tax which the operator collects shall permit the City to terminate the transient occupancy tax sharing agreement. The City shall give notice to the operator as required by the terms of the transient occupancy tax sharing agreement.
(C) The City may offer to purchase an existing hotel at fair market value. A fair market value determination shall be based on the fair market value of the hotel and shall be determined by a licensed and independent appraiser mutually agreed upon by the City and hotel operator. In the event of a disagreement on the choice of the appraiser, each party shall appoint one appraiser, and the two appointed appraisers shall jointly select a third appraiser. The appraiser(s) shall consider all relevant factors affecting the fair market value, including the hotel's current condition, market conditions, and any improvements.
(D) Upon any default of City, the Hotel Operator’s remedy shall be limited to specific performance, and monetary damages shall not be available. A term to that effect shall be included in the tax-sharing agreement and/or operating covenants. (E) The Hotel Operator shall retain all Hotel financial records, whether audited or unaudited, regarding the Hotel’s revenues subject to City’s Transient Occupancy Tax during the term of the Tax Sharing Agreement plus five years. The Hotel Operator agrees to make the Hotel’s financial records regarding the Hotel’s revenues subject to City’s Transient Occupancy Tax available to the City within thirty (30) days of a written request for City audit purposes. Once the requested financial records have been supplied and reviewed or audited, the Hotel Operator’s obligation to provide those financial records and subsequent retention shall cease.

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(F) This Hotel Investment Incentive Program shall terminate as to the acceptance of new approvals to the Program from participant Hotels five (5) years after the effective date of the adopting Ordinance unless extended by the City Council.

SECTION 3. Severability: If any provision of this Ordinance or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the Ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this Ordinance are severable. The City Council declares that it would have adopted this Ordinance irrespective of the invalidity of any portion thereof.

SECTION 4. Effective Date. This Ordinance shall take effect thirty (30) days from its passage by the City Council of the City of Hemet.

SECTION 5. Notice of Adoption. The City Clerk shall publish this Ordinance in the manner required by law.
////
INTRODUCED at the regular meeting of the Hemet City Council on January 30, 2024.

APPROVED AND ADOPTED this ___ day of _________________, 2024. ______________________________
Joe Males, Mayor
ATTEST:
____________________________
John Paul Maier, City Clerk

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Attachment 2

Analysis of Conceptual “Renovated” 33 Room Hotel
TOT Base assumes 33 Rooms currently rent at average of $80/night @ 40% occupancy

Rooms 33
Occupancy Rate 40%
Occupancy Rate 60%
TOT Growth @ 40% Occupancy TOT Growth @ 60% Occupancy
Hotel Name Year
Cost Share %
(Hotel/City)
TOT
Base*
Room Rate
Starting @
$140*
33 Rooms @
40% @ $140 Hotel City

Rate
Starting
@ $140
33 Rooms @
60% @ $140 Hotel City
33 Room Hotel Year 1 38,544 $140 28,908.00 26,017 2,891 $140 62,634.00 56,371 6,263 33 Room Hotel Year 2 39,700 $143 29,100.72 26,191 2,910 $143 63,501.24 57,151 6,350 33 Room Hotel Year 3 40,891 $146 29,285.73 26,357 2,929 $146 64,374.26 57,937 6,437 33 Room Hotel Year 4 42,118 $149 29,462.53 26,516 2,946 $149 65,252.83 58,728 6,525 33 Room Hotel Year 5 43,382 $152 29,630.60 26,668 2,963 $152 66,136.71 59,523 6,614 33 Room Hotel Year 6 44,683 $155 29,789.40 26,810 2,979 $155 67,025.63 60,323 6,703 33 Room Hotel Year 7 46,024 $158 29,938.36 26,945 2,994 $158 67,919.31 61,127 6,792 33 Room Hotel Year 8 47,404 $161 30,076.89 27,069 3,008 $161 68,817.46 61,936 6,882 33 Room Hotel Year 9 48,826 $164 30,204.38 27,184 3,020 $164 69,719.77 62,748 6,972 33 Room Hotel Year 10 50,291 $167 30,320.21 27,288 3,032 $167 70,625.90 63,563 7,063 33 Room Hotel Year 11 51,800 $171 30,423.70 22,818 7,606 $171 71,535.50 53,652 17,884 33 Room Hotel Year 12 53,354 $174 30,514.17 22,886 7,629 $174 72,448.22 54,336 18,112 33 Room Hotel Year 13 54,955 $178 30,590.92 22,943 7,648 $178 73,363.64 55,023 18,341 33 Room Hotel Year 14 56,603 $181 30,653.19 22,990 7,663 $181 74,281.37 55,711 18,570 33 Room Hotel Year 15 58,301 $185 30,700.22 23,025 7,675 $185 75,200.96 56,401 18,800 33 Room Hotel Year 16 60,050 $188 30,731.22 15,366 15,366 $188 76,121.97 38,061 38,061 33 Room Hotel Year 17 61,852 $192 30,745.34 15,373 15,373 $192 77,043.91 38,522 38,522 33 Room Hotel Year 18 63,707 $196 30,741.73 15,371 15,371 $196 77,966.27 38,983 38,983 33 Room Hotel Year 19 65,619 $200 30,719.49 15,360 15,360 $200 78,888.52 39,444 39,444 33 Room Hotel Year 20 67,587 $204 30,677.69 15,339 15,339 $204 79,810.10 39,905 39,905 33 Room Hotel Year 21 69,615 $208 30,615.37 7,654 22,962 $208 80,730.43 20,183 60,548 33 Room Hotel Year 22 71,703 $212 30,531.53 7,633 22,899 $212 81,648.90 20,412 61,237 33 Room Hotel Year 23 73,854 $216 30,425.13 7,606 22,819 $216 82,564.84 20,641 61,924 33 Room Hotel Year 24 76,070 $221 30,295.09 7,574 22,721 $221 83,477.60 20,869 62,608 33 Room Hotel Year 25 78,352 $225 30,140.29 7,535 22,605 $225 84,386.45 21,097 63,290 *Assumes 2% inflation 755,222$ 496,516$ 258,706$ 1,835,476$ 1,172,646$ 662,830$ 25/75
75/25
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Attachment 3
Analysis of Conceptual “New” 70 Room Hotel
Rooms 70
Occupancy 1 40%
Occupancy 2 60%
TOT @ 40% Occupancy TOT @ 60% Occupancy
Hotel Name Year
Cost Share %
(Hotel/City)
TOT
Base*
Room
Rate
Starting
@ $160*
70 Rooms @
40% & $200 Hotel City
Room
Rate
Starting
@ $160*
70 Rooms @
60% & $200 Hotel City
70 Room Hotel Year 1 - $160 163,520 147,168 16,352 $160 245,280 220,752 24,528 70 Room Hotel Year 2 - $163 166,790 150,111 16,679 $163 250,186 225,167 25,019 70 Room Hotel Year 3 - $166 170,126 153,114 17,013 $166 255,189 229,670 25,519 70 Room Hotel Year 4 - $170 173,529 156,176 17,353 $170 260,293 234,264 26,029 70 Room Hotel Year 5 - $173 176,999 159,299 17,700 $173 265,499 238,949 26,550 70 Room Hotel Year 6 - $177 180,539 162,485 18,054 $177 270,809 243,728 27,081 70 Room Hotel Year 7 - $180 184,150 165,735 18,415 $180 276,225 248,603 27,623 70 Room Hotel Year 8 - $184 187,833 169,050 18,783 $184 281,750 253,575 28,175 70 Room Hotel Year 9 - $187 191,590 172,431 19,159 $187 287,385 258,646 28,738 70 Room Hotel Year 10 - $191 195,422 175,879 19,542 $191 293,132 263,819 29,313 70 Room Hotel Year 11 - $195 199,330 179,397 19,933 $195 298,995 269,095 29,899 70 Room Hotel Year 12 - $199 203,317 182,985 20,332 $199 304,975 274,477 30,497 70 Room Hotel Year 13 - $203 207,383 186,645 20,738 $203 311,074 279,967 31,107 70 Room Hotel Year 14 - $207 211,531 190,378 21,153 $207 317,296 285,566 31,730 70 Room Hotel Year 15 - $211 215,761 194,185 21,576 $211 323,642 291,278 32,364 70 Room Hotel Year 16 - $215 220,076 165,057 55,019 $215 330,115 247,586 82,529 70 Room Hotel Year 17 - $220 224,478 168,358 56,119 $220 336,717 252,538 84,179 70 Room Hotel Year 18 - $224 228,967 171,726 57,242 $224 343,451 257,588 85,863 70 Room Hotel Year 19 - $229 233,547 175,160 58,387 $229 350,320 262,740 87,580 70 Room Hotel Year 20 - $233 238,218 178,663 59,554 $233 357,327 267,995 89,332 70 Room Hotel Year 21 $238 242,982 121,491 121,491 $238 364,473 182,237 182,237 70 Room Hotel Year 22 $243 247,842 123,921 123,921 $243 371,763 185,881 185,881 70 Room Hotel Year 23 $247 252,799 126,399 126,399 $247 379,198 189,599 189,599 70 Room Hotel Year 24 $252 257,855 128,927 128,927 $252 386,782 193,391 193,391 70 Room Hotel Year 25 $257 263,012 131,506 131,506 $257 394,517 197,259 197,259 70 Room Hotel Year 26 $262 268,272 134,136 134,136 $262 402,408 201,204 201,204 70 Room Hotel Year 27 $268 273,637 136,819 136,819 $268 410,456 205,228 205,228 70 Room Hotel Year 28 $273 279,110 139,555 139,555 $273 418,665 209,333 209,333 70 Room Hotel Year 29 $279 284,692 142,346 142,346 $279 427,038 213,519 213,519 70 Room Hotel Year 30 $284 290,386 145,193 145,193 $284 435,579 217,790 217,790 * Assumes 2% inflation 6,633,692$ 4,734,296 $ 1,899,397 $ 9,950,538$ 7,101,443 $ 2,849,095 $ 90/10
75/25
50/50
$160
Occupancy Rate
Occupancy Rate
$160
70 Rooms @ 70 Rooms @

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Attachment 4
The AAA Five Diamond Award® Rating System
Every year AAA reviews more than 27,000 hotels, just 0.4 percent make the AAA Five Diamond list and

6.3 percent earning the Four Diamond.

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CITY COUNCIL ORDINANCE NO. 2024-xxx

CITY OF HEMET

HEMET, CALIFORNIA
ORDINANCE NO. 2024-xxx

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HEMET,
CALIFORNIA, ADDING SECTIONS 74-100 THROUGH 74-105 TO

THE HEMET MUNICIPAL CODE RELATED TO THE HOTEL

INVESTMENT INCENTIVE PROGRAM

THE CITY COUNCIL OF THE CITY OF HEMET DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The adoption of this Ordinance is exempt from review under the California Environmental Quality Act (CEQA) pursuant to the following, each on a separate and independent basis: CEQA Guidelines, Section 15378 (not a project) and Section 15061 (b)(3) (no significant environmental impact).

SECTION 2. Section 74-100 is hereby added to the Hemet Municipal Code to read as follows:

Hotel Investment Incentive Program
Section 74-100 Purpose
(A) The purpose of the Hotel Investment Inventive Program is to provide an incentive program for the renovation and expansion of hotel facilities which:
(1) Enhances the tourist and travel experience for visitors to the City; (2) Provides attractive amenities to the public and desirable visitor service facilities and experiences;
(3) Assists the City in achieving its tourism goals;
(4) Encourages continued investment in lodging facilities; and (5) Increases the transient occupancy tax revenue to the City. (B) In the implementation of this program, the City Council finds:
(1) The general welfare and material well-being of the residents of the City depends in substantial measure upon the growth and expansion of the tourism and travel industries in the City.

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(2) The renovation and expansion of the inventory of hotels in the City will create desirable visitor-serving facilities that will: (a) contribute to the growth and expansion of tourism and travel opportunities in the City; (b) provide employment opportunities for the residents of the City; (c) provide additional transient occupancy tax revenues to the City; and (d) promote and enhance the economy of the City.
(3) It is in the best interest of the City to induce and encourage the expansion, renovation, and maintenance of hotel facilities that might not otherwise be as successful, thereby creating new sources of revenues for the City’s general fund, which supports the public services the City provides its residents and visitors.
(4) The authority granted and the purposes to be accomplished by this chapter are proper local governmental and public purposes for which public funds can be expended, and the renovating, maintaining, and expanding of the inventory of hotels is of paramount importance to the City, its residents, and businesses.

Section 74-101 Definitions.

For the purposes of the Hotel Investment Incentive Program, the following definitions shall apply:

Approved Hotel means any existing hotel that has submitted an application and a business plan for participation in the Hotel Investment Incentive Program and has been approved by the City to participate in the Hotel Investment Incentive Program.

Business Plan means a written plan submitted to the City documenting, at a minimum (a) planned improvements to the hotel property, including the estimated costs of the improvements, and (b) an estimate of revenues and expenditures for the operation of the hotel through the term of the Hotel Investment Incentive Program. The Business Plan shall compare past revenues with the future estimated revenues as a result of the proposed new expenditures.

Existing Hotel means any property constructed, occupied, and operating as a hotel containing nine or more guest rooms for compensation and where the guest rooms are: (a) designed and intended as transient occupancy accommodations and (b) that was issued a final certificate of occupancy on or before February 1, 2024.

Furniture, Fixtures, and Equipment means movable furniture, fixtures, or other equipment that have no permanent connection to the structure of a building or utilities within the hotel. More specifically, furniture, fixtures, and /or equipment would include decorative items, wall coverings, flooring treatment, window treatments, casework, furnishings and accessories, furniture, data communications equipment, voice

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communications equipment, audio visual communications equipment, electronic surveillance equipment, electronic detection and alarm equipment, commercial equipment, food service equipment, entertainment equipment, athletic and recreational equipment, collection and disposal equipment. Operational supplies include all supplies needed for the operation of the hotel, such as stationery, computer equipment and accessories, guestroom TVs and mounts, alarm clocks in rooms, linens, pillows, housekeeping carts and supplies, trash cans, all items for the hotel restaurant and bar, banquet and conference facilities (including china, utensils, glasses, etc.). Furniture, fixtures, and equipment, for qualifying cost purposes, include all taxes, freight, warehouse expenses, installation fees, and purchasing fees.

Hotel for the purposes of the Hotel Investment Incentive Program shall be defined as found in Section 74-71, except that the Hotel Investment Incentive Program shall only apply to properties containing nine or more guest rooms for compensation and where the guest rooms are designed and intended as transient occupancy accommodations and does not include those properties offered as a bed and breakfast facilities, bed and breakfast inns, campground, guest houses, short term lodging units, homeless housing facilities, or residential care homes.

Hotel Investment Incentive Program or Incentive Program means the transient occupancy tax increment rebate program established by this Ordinance.

Indemnification Agreement means the agreement between the City and an operator in which the operator agrees to indemnify and defend the City against any claims or lawsuits that are brought against the City (and all liabilities, damages, and costs incurred by the City in connection therewith) as a result of the application of this Ordinance to a hotel participating in the Incentive Program.

Operating Covenants means the operating covenants to be recorded against hotel properties for hotels participating in the Incentive Program, which shall include provisions regarding continuing use of the hotel as a hotel, maintenance, and non- discrimination.

Operator means the person who runs and operates a hotel, whether in the capacity of owner, developer, lessee, sub-lessee, mortgagee in possession, licensee, franchisee, or any other capacity, or the assignee or designee of such person.

Shell Costs mean actual and direct third-party costs of all materials, labor, and equipment associated with the renovation or expansion of the hotel as determined by the City Manager, acting in his/her sole and absolute discretion. Items excluded from Shell Costs include, without limitation, Furniture, Fixtures and Equipment costs, architectural and engineering fees, permits and fees, legal costs, accounting costs, taxes, sales or lease commissions, marketing expenses, initial operating capital, and other indirect costs, as well as developer or hotel operator overhead.

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Tax Sharing Agreement means an agreement between the Operator and the City setting forth the details and obligations of the parties to renovate a Hotel according to the approved Business Plan and receive transient occupancy tax increment as set forth in this Chapter.

Transient Occupancy means a stay of no more than thirty (30) consecutive calendar days.

Transient Occupancy Tax means the tax established by and paid to the City pursuant to this Chapter.

Transient Occupancy Tax Base means the historical production of transient occupancy tax by an existing hotel calculated as the average transient occupancy tax per year based on the prior three years or prior twelve months, whichever is greater, of reported transient occupancy tax due to the City, then subsequently adjusted on an annual basis based on the Riverside Area Consumer Price Index – All Urban Consumers published by the U.S. Bureau of Labor Statistics.

Transient Occupancy Tax Increment means, on an annual basis, the difference between the transient occupancy tax base and the amount of transient occupancy tax actually received by the City from the approved existing hotel after renovation. It is determined by reference to actual receipts by the City of transient occupancy tax from the improved approved hotel. Under no circumstances shall the City be liable for any reimbursement of transient occupancy tax increment not actually received and permanently retained by the City.

Transient Occupancy Tax Sharing means the rebate from the City to the operator of an approved hotel of a portion of that hotel’s transient occupancy tax increment, as determined each year for which the tax sharing agreement is valid. The payment of the approved hotel’s portion of the transient occupancy tax increment shall be paid to the approved hotel within thirty (30) days after the anniversary date of the issuance of the certificate of completion.

Under Construction means that all necessary discretionary entitlements have been approved by the City, grading and building permits have been issued, inspection approvals by the City of grading and foundations to grade level have been obtained, and vertical construction of hotel rooms has begun.

Section 74-102. Participation Requirements.
(A) To participate in the Hotel Investment Incentive Program, the operator of any existing eligible hotel which plans a renovation to improve the hotel facility must:
(1) Complete and submit to the City Manager an application for participation in the Incentive Program on the City’s official Incentive Program application form; (2) Submit a Business Plan in writing.

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(3) Allow the City to inspect the existing hotel to determine that the improvements contemplated by the Business Plan, which are the justification for the transient occupancy tax sharing, do not already exist, and, upon demand of the City, provide the City with such evidence of the approved business’ intention and ability to proceed to construct the necessary improvements or make the necessary purchases, as are reasonably satisfactory to the City;
(4) Receive approval for participation in the Incentive Program from the City Council;
(5) Enter into a transient occupancy tax sharing agreement in the form approved by the City, which shall include provisions for payment of, and adherence to, prevailing wage requirements and a commitment to use good faith efforts to hire local residents and contract with local subcontractors, suppliers, and other local businesses for property improvements;
(6) Execute and record against the hotel property the operating covenants in a form approved by the City;
(7) Execute an indemnification agreement in a form approved by the City; and
(8) Upon completion of the subject improvements or purchases and before transient occupancy tax sharing commences, allow the City to inspect the approved business to verify that the contemplated improvements and/or purchases have been made and completed to enable the business to increase its occupancy and/or room rate. If the improvements are approved by the City, the City shall issue a Certificate of Completion.
(B) Required Level of Improvements for Eligibility
(1) Minimum Furniture, Fixture, and Equipment Costs of not less than $15,000 per guestroom.
(2) In addition to the Furniture, Fixture, and Equipment expenditures, Shell/Property Improvements totaling at a minimum, $20,000 per guestroom. (3) Expenses related to hotel expansion projects are eligible expenses provided they are qualifying Shell Costs or Furniture, Fixture, and Equipment costs. (C) Future hotels are ineligible for participation in the Hotel Investment Incentive Program, except where a future hotel complies with the requirement identified in subsection (A) “Participation Requirements” above to rebuild any of the historic City hotels and the following:

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(1) The minimum number of guestrooms shall be no less than seventy (70). (2) Required compliance with all industry standards of at least a 3-star rated hotel.
(3) The rebuilt historic hotel must be built within a quarter mile of any prior historic hotel.

Section 74-103. City Council Authority; Incentives.
(A) The City Council is authorized to enter into transient occupancy tax sharing agreements and required recordation of operating covenants with hotel operators who have demonstrated eligibility, and satisfied all Incentive Program participation requirements.
(B) Existing Eligible Hotels:
(1) The term of the Incentive Program shall be 25 years from the date an eligible hotel is issued a Certificate of Completion.
(2) From the first year through the tenth year of the date of Incentive Program participation approval and completed renovations, the hotel operator shall receive an amount of transient occupancy tax increment equal to 90% of the transient occupancy tax increment submitted to the City for the prior year. (3) Starting at the eleventh year and continuing through the fifteenth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 75% of the transient occupancy tax increment submitted to the City for the prior year.
(4) Starting at the sixteenth year and continuing through the twentieth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 50% of the transient occupancy tax increment submitted to the City for the prior year.
(5) Starting at the twenty-first year and continuing through the twenty-fifth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 25% of the transient occupancy tax increment submitted to the City for the prior year.
(6) The cost share percentages shall remain the same in the event the City’s hotel tax rate is increased.
(C) Rebuilt Historic Hotels:
(1) The term of the Incentive Program shall be for 30 years from the date an eligible hotel is issued a Certificate of Completion.

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(2) From the first year through the fifteenth year of the date of Incentive Program participation approval and completed renovations, the hotel operator shall receive an amount of transient occupancy tax increment equal to 90% of the transient occupancy tax increment submitted to the City for the prior year. (3) Starting at the sixteenth year and continuing through the twentieth year of Incentive Program participation, the hotel operator shall receive an amount of transient occupancy tax increment equal to 75% of the transient occupancy tax increment submitted to the City for the prior year.
(4) Starting at the twenty-first year and continuing through the thirtieth year of Incentive Program participation, the operator shall receive an amount of transient occupancy tax increment equal to 50% of the transient occupancy tax increment submitted to the City for the prior year.
(5) The cost share percentages shall remain the same in the event the City’s hotel tax rate is increased.
(D) The City Council may, by Development Agreement, enter into a transient occupancy tax-sharing agreement on different terms.

Section 74-104. Operating Agreement.

Each operator of a hotel that enters into a transient occupancy tax sharing agreement with the City shall record against the participating hotel property the following operating covenants to run with the land:
(A) Continuing Use and Operation. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees, to continually operate and use the hotel property as a hotel. None of the rooms in the hotel will at any time be utilized as a non-transient residential property or rental periods that exceed thirty (30) days, except for senior living units, which may still qualify for the Incentive Program so long as they meet all other requirements of the Program. No part of the hotel will at any time be owned by a cooperative housing corporation. All uses conducted on the hotel property shall conform to all ordinances, statutes, rules, and regulations of the City, the county of Riverside, and the state of California.
(B) Maintenance. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees to continually maintain and repair or cause to be maintained and repaired, the hotel property, including, but not limited to, buildings, structures, parking areas, lighting, signs, and landscaping, to be in good condition conforming to all applicable laws, including all applicable provisions of the City’s Municipal Code and to hotel industry standards applicable to that type of hotel, and shall keep the hotel property free from any accumulation of debris or waste materials.

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(C) Nondiscrimination. During the hotel’s participation in the transient occupancy tax sharing Incentive Program, the operator covenants and agrees for itself, its successors, assigns, or designees, that the hotel and any of its employees shall not discriminate against any person on the basis of sex, gender, gender identity, gender expression, marital status, domestic partnership status, sexual orientation, race, color, religion, ancestry, national origin, or disability.

Section 74-105. General Provisions.
(A) All transient occupancy tax revenues or transient occupancy tax increment remitted to the City by an operator of a hotel that enters into a transient occupancy tax sharing agreement with the City shall be deemed general fund revenues of the City and shall be deposited in the City’s general fund.
(B) The City may terminate the transient occupancy tax sharing agreement on ten (10) days’ notice if the operator violates any of the operating covenants, provided that such violation or violations continue to exist at the end of said ten-day period. Specifically, without limiting the generality of the foregoing, a failure to pay to the City, in a timely manner and in the correct amount, the transient occupancy tax which the operator collects shall permit the City to terminate the transient occupancy tax sharing agreement. The City shall give notice to the operator as required by the terms of the transient occupancy tax sharing agreement.
(C) The City may offer to purchase an existing hotel at fair market value. A fair market value determination shall be based on the fair market value of the hotel and shall be determined by a licensed and independent appraiser mutually agreed upon by the City and hotel operator. In the event of a disagreement on the choice of the appraiser, each party shall appoint one appraiser, and the two appointed appraisers shall jointly select a third appraiser. The appraiser(s) shall consider all relevant factors affecting the fair market value, including the hotel's current condition, market conditions, and any improvements.
(D) Upon any default of City, the Hotel Operator’s remedy shall be limited to specific performance, and monetary damages shall not be available. A term to that effect shall be included in the tax-sharing agreement and/or operating covenants. (E) The Hotel Operator shall retain all Hotel financial records, whether audited or unaudited, regarding the Hotel’s revenues subject to City’s Transient Occupancy Tax during the term of the Tax Sharing Agreement plus five years. The Hotel Operator agrees to make the Hotel’s financial records regarding the Hotel’s revenues subject to City’s Transient Occupancy Tax available to the City within thirty (30) days of a written request for City audit purposes. Once the requested financial records have been supplied and reviewed or audited, the Hotel Operator’s obligation to provide those financial records and subsequent retention shall cease.

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CITY COUNCIL ORDINANCE NO. 2024-xxx
(F) This Hotel Investment Incentive Program shall terminate as to the acceptance of new approvals to the Program from participant Hotels five (5) years after the effective date of the adopting Ordinance unless extended by the City Council.

SECTION 3. Severability: If any provision of this Ordinance or its application to any person or circumstance is held to be invalid, such invalidity has no effect on the other provisions or applications of the Ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this Ordinance are severable. The City Council declares that it would have adopted this Ordinance irrespective of the invalidity of any portion thereof.

SECTION 4. Effective Date. This Ordinance shall take effect thirty (30) days from its passage by the City Council of the City of Hemet.

SECTION 5. Notice of Adoption. The City Clerk shall publish this Ordinance in the manner required by law.
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INTRODUCED at the regular meeting of the Hemet City Council on January 30, 2024.

APPROVED AND ADOPTED this ___ day of _________________, 2024. ______________________________
Joe Males, Mayor
ATTEST:
____________________________
John Paul Maier, City Clerk

16.A.

Attachment 2

Analysis of Conceptual “Renovated” 33 Room Hotel
TOT Base assumes 33 Rooms currently rent at average of $80/night @ 40% occupancy

Rooms 33
Occupancy Rate 40%
Occupancy Rate 60%
TOT Growth @ 40% Occupancy TOT Growth @ 60% Occupancy
Hotel Name Year
Cost Share %
(Hotel/City)
TOT
Base*
Room Rate
Starting @
$140*
33 Rooms @
40% @ $140 Hotel City

Rate
Starting
@ $140
33 Rooms @
60% @ $140 Hotel City
33 Room Hotel Year 1 38,544 $140 28,908.00 26,017 2,891 $140 62,634.00 56,371 6,263 33 Room Hotel Year 2 39,700 $143 29,100.72 26,191 2,910 $143 63,501.24 57,151 6,350 33 Room Hotel Year 3 40,891 $146 29,285.73 26,357 2,929 $146 64,374.26 57,937 6,437 33 Room Hotel Year 4 42,118 $149 29,462.53 26,516 2,946 $149 65,252.83 58,728 6,525 33 Room Hotel Year 5 43,382 $152 29,630.60 26,668 2,963 $152 66,136.71 59,523 6,614 33 Room Hotel Year 6 44,683 $155 29,789.40 26,810 2,979 $155 67,025.63 60,323 6,703 33 Room Hotel Year 7 46,024 $158 29,938.36 26,945 2,994 $158 67,919.31 61,127 6,792 33 Room Hotel Year 8 47,404 $161 30,076.89 27,069 3,008 $161 68,817.46 61,936 6,882 33 Room Hotel Year 9 48,826 $164 30,204.38 27,184 3,020 $164 69,719.77 62,748 6,972 33 Room Hotel Year 10 50,291 $167 30,320.21 27,288 3,032 $167 70,625.90 63,563 7,063 33 Room Hotel Year 11 51,800 $171 30,423.70 22,818 7,606 $171 71,535.50 53,652 17,884 33 Room Hotel Year 12 53,354 $174 30,514.17 22,886 7,629 $174 72,448.22 54,336 18,112 33 Room Hotel Year 13 54,955 $178 30,590.92 22,943 7,648 $178 73,363.64 55,023 18,341 33 Room Hotel Year 14 56,603 $181 30,653.19 22,990 7,663 $181 74,281.37 55,711 18,570 33 Room Hotel Year 15 58,301 $185 30,700.22 23,025 7,675 $185 75,200.96 56,401 18,800 33 Room Hotel Year 16 60,050 $188 30,731.22 15,366 15,366 $188 76,121.97 38,061 38,061 33 Room Hotel Year 17 61,852 $192 30,745.34 15,373 15,373 $192 77,043.91 38,522 38,522 33 Room Hotel Year 18 63,707 $196 30,741.73 15,371 15,371 $196 77,966.27 38,983 38,983 33 Room Hotel Year 19 65,619 $200 30,719.49 15,360 15,360 $200 78,888.52 39,444 39,444 33 Room Hotel Year 20 67,587 $204 30,677.69 15,339 15,339 $204 79,810.10 39,905 39,905 33 Room Hotel Year 21 69,615 $208 30,615.37 7,654 22,962 $208 80,730.43 20,183 60,548 33 Room Hotel Year 22 71,703 $212 30,531.53 7,633 22,899 $212 81,648.90 20,412 61,237 33 Room Hotel Year 23 73,854 $216 30,425.13 7,606 22,819 $216 82,564.84 20,641 61,924 33 Room Hotel Year 24 76,070 $221 30,295.09 7,574 22,721 $221 83,477.60 20,869 62,608 33 Room Hotel Year 25 78,352 $225 30,140.29 7,535 22,605 $225 84,386.45 21,097 63,290 *Assumes 2% inflation 755,222$ 496,516$ 258,706$ 1,835,476$ 1,172,646$ 662,830$ 25/75
75/25
90/10
50/50

16.A.

Attachment 3
Analysis of Conceptual “New” 70 Room Hotel
Rooms 70
Occupancy 1 40%
Occupancy 2 60%
TOT @ 40% Occupancy TOT @ 60% Occupancy
Hotel Name Year
Cost Share %
(Hotel/City)
TOT
Base*
Room
Rate
Starting
@ $160*
70 Rooms @
40% & $200 Hotel City
Room
Rate
Starting
@ $160*
70 Rooms @
60% & $200 Hotel City
70 Room Hotel Year 1 - $160 163,520 147,168 16,352 $160 245,280 220,752 24,528 70 Room Hotel Year 2 - $163 166,790 150,111 16,679 $163 250,186 225,167 25,019 70 Room Hotel Year 3 - $166 170,126 153,114 17,013 $166 255,189 229,670 25,519 70 Room Hotel Year 4 - $170 173,529 156,176 17,353 $170 260,293 234,264 26,029 70 Room Hotel Year 5 - $173 176,999 159,299 17,700 $173 265,499 238,949 26,550 70 Room Hotel Year 6 - $177 180,539 162,485 18,054 $177 270,809 243,728 27,081 70 Room Hotel Year 7 - $180 184,150 165,735 18,415 $180 276,225 248,603 27,623 70 Room Hotel Year 8 - $184 187,833 169,050 18,783 $184 281,750 253,575 28,175 70 Room Hotel Year 9 - $187 191,590 172,431 19,159 $187 287,385 258,646 28,738 70 Room Hotel Year 10 - $191 195,422 175,879 19,542 $191 293,132 263,819 29,313 70 Room Hotel Year 11 - $195 199,330 179,397 19,933 $195 298,995 269,095 29,899 70 Room Hotel Year 12 - $199 203,317 182,985 20,332 $199 304,975 274,477 30,497 70 Room Hotel Year 13 - $203 207,383 186,645 20,738 $203 311,074 279,967 31,107 70 Room Hotel Year 14 - $207 211,531 190,378 21,153 $207 317,296 285,566 31,730 70 Room Hotel Year 15 - $211 215,761 194,185 21,576 $211 323,642 291,278 32,364 70 Room Hotel Year 16 - $215 220,076 165,057 55,019 $215 330,115 247,586 82,529 70 Room Hotel Year 17 - $220 224,478 168,358 56,119 $220 336,717 252,538 84,179 70 Room Hotel Year 18 - $224 228,967 171,726 57,242 $224 343,451 257,588 85,863 70 Room Hotel Year 19 - $229 233,547 175,160 58,387 $229 350,320 262,740 87,580 70 Room Hotel Year 20 - $233 238,218 178,663 59,554 $233 357,327 267,995 89,332 70 Room Hotel Year 21 $238 242,982 121,491 121,491 $238 364,473 182,237 182,237 70 Room Hotel Year 22 $243 247,842 123,921 123,921 $243 371,763 185,881 185,881 70 Room Hotel Year 23 $247 252,799 126,399 126,399 $247 379,198 189,599 189,599 70 Room Hotel Year 24 $252 257,855 128,927 128,927 $252 386,782 193,391 193,391 70 Room Hotel Year 25 $257 263,012 131,506 131,506 $257 394,517 197,259 197,259 70 Room Hotel Year 26 $262 268,272 134,136 134,136 $262 402,408 201,204 201,204 70 Room Hotel Year 27 $268 273,637 136,819 136,819 $268 410,456 205,228 205,228 70 Room Hotel Year 28 $273 279,110 139,555 139,555 $273 418,665 209,333 209,333 70 Room Hotel Year 29 $279 284,692 142,346 142,346 $279 427,038 213,519 213,519 70 Room Hotel Year 30 $284 290,386 145,193 145,193 $284 435,579 217,790 217,790 * Assumes 2% inflation 6,633,692$ 4,734,296 $ 1,899,397 $ 9,950,538$ 7,101,443 $ 2,849,095 $ 90/10
75/25
50/50
$160
Occupancy Rate
Occupancy Rate
$160
70 Rooms @ 70 Rooms @

16.A.

Attachment 4
The AAA Five Diamond Award® Rating System
Every year AAA reviews more than 27,000 hotels, just 0.4 percent make the AAA Five Diamond list and

6.3 percent earning the Four Diamond.

16.A.

City of Hemet
City Council Meeting

STAFF REPORT

Meeting: City Council Meeting - Jan 30 2024
Department: Administration
Submitted by: Mark Prestwich, City Manager
Mark Prestwich, City Manager;

☐ Receive and File ☐ Consent Calendar ☒ Business Item ☐ Public Hearing

TITLE:

Consideration of a Resolution of the City Council of the City of Hemet, California, Supporting the Need for Expanded Public Higher Education Institutions Within Southwestern Riverside County and Funding for the Cost of Tenant Improvements to Create an Expanded Presence for California State University, San Marcos at the Mt. San Jacinto College Campus in Temecula Valley

RECOMMENDED ACTION:

It is respectfully recommended that the City Council:

Adopt a Resolution of the City Council of the City of Hemet, California, Supporting the Need for Expanded Public Higher Education Institutions Within Southwestern Riverside County and Funding for the Cost of Tenant Improvements to Create an Expanded Presence for California State University, San Marcos at the Mt. San Jacinto College Campus in Temecula Valley.

BACKGROUND:

On November 13, 2023, representatives of Mt. San Jacinto College (MSJC), California State University San Marcos, and Murrieta Council Member Dr. Lisa DeForest and Menifee Council Member Lesa Sobek invited local government representatives to attend a meeting related to the possible formation of a Southwestern Riverside County Higher Education Coalition. Council Member Kendrick and City Manager Prestwich attended the meeting and toured MSJC's Temecula Valley Campus.

Mt. San Jacinto College purchased the former Abbott Laboratories 350,000-square-foot building in 2018 for $56 million. Funding was largely provided via Measure AA, a $295 million State bond measure passed by California voters in 2014. MSJC subsequently invested $60 million to retrofit the two five-story buildings to function as academic space. It is the first permanent campus of higher education serving Riverside County's southwest region.

The commute time to the nearest four-year public universities is upward of one to two hours. The Hemet-San Jacinto Valley is one of the fastest-growing geographic areas in California and the nation;

16.B.

as a result, increasing access to advanced education and professional development is viewed as an opportunity to accelerate the region's economic growth.

DISCUSSION:

The City of Hemet received a request from the City of Murrieta, on behalf of the Coalition, to consider the adoption of a resolution in support of the Coalition's efforts to advance Mt. San Jacinto College's collaboration and partnership with California State University, San Marcos.

PREVIOUS COUNCIL ACTION:

None.

STRATEGIC PLAN INTEGRATION:

GOAL TWO: ECONOMIC OPPORTUNITY
To ensure that Hemet is a hub, with access to quality jobs, shopping options, and a varied and sustained tax base.

Objective 1: Develop business practices that welcome new development by streamlining processes.

Objective 2: Provide resources for new businesses to enhance the customer service experience.

GOAL FOUR: PARTNERSHIP & COLLABORATION
To pursue partnerships that will increase the opportunities available to the community, including our businesses, unemployed, and youth populations.

Objective 1: Develop concepts and programs to increase opportunities for youth recreation.

Objective 2: Develop concepts and programs to enhance the quality of life services.

Objective 3: Develop programs to offer support to the community's businesses

FISCAL IMPACT:

There is no fiscal impact associated with approval of the recommended Resolution.

ATTACHMENT(S):

Attachment 1 Resolution Supporting Mt. San Jacinto College

16.B.

CITY OF HEMET RESOLUTION NO. 2024-XXX 1
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CITY OF HEMET

HEMET, CALIFORNIA
RESOLUTION NO. 2024-xxx

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF HEMET, CALIFORNIA, SUPPORTING THE NEED FOR

EXPANDED PUBLIC HIGHER EDUCATION

INSTITUTIONS WITHIN SOUTHWESTERN RIVERSIDE

COUNTY AND FUNDING FOR THE COST OF TENANT

IMPROVEMENTS TO CREATE AN EXPANDED

PRESENCE FOR CALIFORNIA STATE UNIVERSITY SAN
MARCOS AT THE MT. SAN JACINTO COLLEGE

CAMPUS IN TEMECULA VALLEY
The City Council of the City of Hemet, California (hereafter referred to as the “City Council”) does resolve as follows:

WHEREAS, the City of Hemet is located in Southwestern Riverside County, with a current population of 92,278, projected to grow significantly; and WHEREAS, within our city and the greater region there presently is not a full- fledged four-year public university, thereby forcing students pursuing higher education seeking to begin a four-year education after graduating from high school to leave this geographic area or to commute great distances; and
WHEREAS, the commute time to the nearest four-year public universities is upward of one to two hours, exacerbated by the lack of public transportation to access those schools; and
WHEREAS, this region is projected to grow through 2060 without pause, making it one of the fastest-growing geographic areas in California and nation; and

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CITY OF HEMET RESOLUTION NO. 2024-XXX 2
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WHEREAS, the region presently has a lower than statewide average percentage of population that has completed a four-year university education; and WHEREAS, the region is working strategically and earnestly to attract higher- paying jobs to increase social mobility and to help reduce significant workforce commuting to other regions, which not only causes massive freeway congestion and contributes to greenhouse gas emissions, but also greatly impacts the quality of life, including physical and mental health, for those commuters and their ability to be active contributors to their communities; and
WHEREAS, California State University, San Marcos
(CSUSM) reports that about one-quarter of their student population come from this geographic area, which equates to approximately 4,000 students; and WHEREAS, CSUSM also reports that they have a large number of students from the area that do not finish their Bachelor's degrees there; and WHEREAS, enrollment at Mt. San Jacinto Community College (MSJC) is up 50- 60% over pre-pandemic enrollment; and
WHEREAS, considering vehicle mileage, fuel cost, and the expense of time waiting in traffic, the absence of a four-year university in this region creates a real barrier to personal growth and professional development, as well as economic growth of this region.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HEMET,
CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:

1. Access to public higher education opportunities is critically important to economic growth within the region; and

16.B.

CITY OF HEMET RESOLUTION NO. 2024-XXX 3
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2. The CSUSM Temecula Valley campus is an important link to expand public higher education in this region and the symbiotic relationship of this campus to regional economic development goals and needs; and

3. The City strongly supports regional efforts to advocate for funding for the expansion of public higher education in Southwestern Riverside County, and

4. The City requests its legislative representatives consider this need and assist in the advocacy efforts for the necessary funding to complete the tenant improvements for the CSUSM Temecula Valley campus expansion, and four- year education in Southwest Riverside County.

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CITY OF HEMET RESOLUTION NO. 2024-XXX 4
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PASSED, APPROVED AND ADOPTED this 30th day of January, 2024. ____________________________
Joe Males, Mayor
ATTEST:
_____________________________
John Paul Maier, City Clerk

16.B.

CITY OF HEMET RESOLUTION NO. 2024-XXX 5
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State of California )
County of Riverside )
City of Hemet )
I, John Paul Maier, City Clerk of the City of Hemet, do hereby certify that the foregoing resolution was adopted by the Hemet City Council on the 30th day of January, 2024, and was passed by the following vote:

AYES: Council Members:

NOES: Council Members:

ABSTAIN: Council Members:

ABSENT: Council Members:
_____________________________
John Paul Maier, City Clerk

16.B.