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29 August 23, 2024 Local Office:
1861 W. Redlands Blvd.
Redlands, CA 92373
City of Highland 909) 890- 1255, info@erscinc. com
27215 Base Line
Evaluation Period Contact:
Highland, CA 92346 Ben Booth, PE
Attn: Octavio Duran Jr., Public Works Director/ City Engineer Project Manager 909) 890- 1255 x116
bbooth@erscinc. com
RE: COST PROPOSAL - Construction Management and Inspection Services for the Natural Parkland Trails Project Dear Mr. Duran,
Engineering Resources of Southern California ( ERSC) is pleased to have the opportunity to submit our rates to the City of Highland City) as a qualified, experienced consultant to provide Construction Management and Inspection Services for the Natural Parkland Trails Project.
Our fee for this project has been calculated per the requirements of the Local Assistance Procedures Manual ( LAPM) Forms, Prevailing Wage rates at the time of the project' s advertisement, and the level of effort requested in the RFP. For addition transparency, we have included an hours allocation matrix for the City' s review.
We look forward to the opportunity to work with the City and thank you for the opportunity to submit a proposal. If you have any questions or require additional information, please contact Craig Brudin at cbrudin@erscinc. com or 909/ 890- 1255.
Respectfully submitted,
Craig Brudin, QSP Ben Booth, PE
Director of Operations Project Manager
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31 STAFF REPORT
TO THE CITY COUNCIL
DATE: September 10, 2024
FROM: Carlos Zamano, City Manager
PREPARED BY: Matt Bennett, Assistant Public Works Director/- REVIEWED BY: Octavio Duran Jr., Public Works Director/ City Engineer 00 SUBJECT: Resolution of Intention to Establish City of Highland Community Facilities District No. 24-001 ( Highland Park) Generally on Base Line east of Isabella Villa Court
RECOMMENDATION: That the City Council adopt Resolution No. 2024- , entitled: A Resolution of Intention of the City Council of the City of Highland to Establish Community Facilities District No. 24- 001 ( Highland Park) and to Authorize the Levy of a Special Tax Within City of Highland Community Facilities District No. 24-001 ( Highland Park) FISCAL IMPACT: The individual property owners are responsible for the annual payments of special taxes. The City will work with the County concerning the filing of the annual special tax with the County Auditor -Controller.
The property owner has posted a deposit in the amount of $ 22, 792. 50 with its application to form the CFD in order to cover City costs incurred in connection with the formation. Approval of this resolution does not in any way commit the City to any financial contribution to or liability of the CFD. The City' s cost to administer the CFD annually will be reimbursed through the special taxes charged to property owners.
PUBLIC NOTICE: The agenda for this item was posted at the three locations per Resolution No. 2011- 047 and on the City's website.
Approved Motion Second Agenda Item No.
Denied
Continued Ayes File No.
Tabled Noes
Abstain
Absent
City Cler ( C—ityonager
1 BACKGROUND: The State legislature enacted the Mello -Roos Community Facilities Act of 1982 ( the "Act") to assist public agencies in financing certain public services. The developer, Century Communities of California, LLC, has requested that the City of Highland ( the " City") assist them in forming a district for the City to cover the costs associated with the maintenance of public improvements within the proposed district; specifically, storm drain facilities, landscaping, park facilities, street and park lights, bio retention facilities, access road, and graffiti maintenance. Services include building a reserve fund for replacement of the facilities.
The development comprised of Tract 19915, is proposed to include 46 single family residential parcels, 1 public park and 2 open space/ landscaping parcels at buildout. The entire CFD is comprised of 4. 57 net taxable acres ( 5. 89 gross acres) of residentially zoned land.
On May 22, 2001 the City Council considered and approved goals and policies concerning Community Facility Districts.
ANALYSIS
Approval of the attached Resolution is required under the Act to levy a special tax and fund certain services. The attached Resolution declares the City Council' s intention to form the proposed CFD No. 24- 001 ( Highland Park) and to authorize the levy of a special tax in accordance with an attached Rate and Method of Apportionment of Special Tax. The attached Resolution is the initial step for forming the CFD pursuant to the procedures prescribed by the Act, which include holding a public hearing and submitting the formation of the proposed CFD No. 24- 001 ( Highland Park) to the landowners at a special election to be conducted by mailed ballot.
The proposed district will be composed of Special Tax A and Special Tax B. Special Tax A provides funding for(i) Maintenance of in -tract street lights and park lights ( ii) Maintenance of the public storm drain system, including but not limited to, catch basins, pipes and pipe connector screens ( iii) Maintenance of the access road ( iv) Capital replacement reserve accumulation for the public storm drain system, access road and bioretention pond and structures. Special Tax B provides funding for maintenance of ( i) Public park landscape maintenance ( ii) Open space landscape maintenance ( iii) Basin landscape maintenance and iv) Bioretention pond and storm detention system and structures and piping maintenance.
Maintenance of the Special Tax B improvements shall be the responsibility of the Property Owner's Association which will enter into a Dormancy Agreement with the City. The Dormancy Agreement shall state that Special Tax B will not be levied in any year, unless and until, the first year the City determines that the Special Tax B improvements have not been maintained by the Property Owner's Association to a standard acceptable to the City.
Special Tax A will have a Maximum Special Tax of $ 1, 058. 00 per parcel for Single Family Residential property and $ 10, 647 per acre for Undeveloped, Multifamily Residential and Non - Residential property. Special Tax B will have a Maximum Special Tax of $ 1, 011. 00 per parcel for Single Family Residential property and $ 10, 174. 00 per acre for Undeveloped, Multifamily Residential and Non -Residential property. These rates will increase based on the percentage increase in the Consumer Price Index with a maximum annual increase of 6% and a minimum annual increase of 2% of the Maximum Special Tax in effect in the previous fiscal year. The owners have filed a petition representing their willingness to move forward. 2 A public hearing on this matter will take place on November 12, 2024, and at that time the Council will hear any testimony concerning the formation and take action to adopt the Resolution of Formation" and hold the special election regarding establishment of the Special Tax.
LEGAL
The Act authorizes the initiation of the establishment of community facilities districts upon receipt by the City of a petition requesting institution of proceedings by owners of not less than 10% of the area of land proposed to be included within the district. The City has received the signed petition from Century Communities of California, LLC, the sole land owner of the Property.
ATTACHMENTS
1. Resolution of Intention to Establish City of Highland Community Facilities District No. 24- 001
2. Vicinity Map
3 RESOLUTION NO. 2024-
A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF
HIGHLAND, CALIFORNIA, TO ESTABLISH CITY OF HIGHLAND COMMUNITY FACILITIES DISTRICT NO. 24- 001 ( HIGHLAND PARK) AND TO AUTHORIZE THE
LEVY OF A SPECIAL TAX WITHIN CITY OF HIGHLAND COMMUNITY FACILITIES DISTRICT NO. 24- 001 ( HIGHLAND PARK).
The City Council of the City of Highland the ("City Council") does resolve as follows:
WHEREAS, the City Council of the City of Highland ( the " City") has received a petition the " Petition") requesting the institution of proceedings, which was signed by the sole owner of the land proposed for inclusion in a proposed community facilities district ( the Owner') and which meets the requirements of Sections 53318 and 53319 of the Mello - Roos Community Facilities Act of 1982, as amended, being Chapter 2. 5 of Division 2 of Title 5 of the California Government Code ( the "Act"); and WHEREAS, pursuant to Section 53312. 7 of the Act, the City adopted goals and policies concerning the establishment of community facilities districts on May 22, 2001.
WHEREAS, the Act authorizes the City Council to establish a community facilities district and to levy special taxes within that district; and
WHEREAS, in accordance with the request set forth in the Petition, the City Council desires to undertake proceedings to establish a community facilities district pursuant to the Act to finance certain services which are in addition to services currently provided in the territory of the proposed district and are necessary to meet increased demands placed upon the City as a result of the development of such land;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HIGHLAND DOES HEREBY FIND AND RESOLVE TO:
Section 1. Intention. The City Council hereby declares its intention to conduct proceedings for the formation of a community facilities district under the terms of the Act.
Section 2. Name of District. The name of the proposed community facilities district is City of Highland Community Facilities District No. 24- 001 ( Highland Park)" ( the "District") which is comprised of Tract 19915.
Section 3. Boundaries of District. The exterior boundaries of the District are shown on the map now on file in the office of the City Clerk entitled " Proposed Boundary - 4 Community Facilities District No. 24- 001 ( Highland Park)" ( the " Map"). The Map indicates by a boundary line, the extent of the territory included in the proposed District and shall govern for all details as to the extent of the District. On the original and one copy of the Map, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of the Map in the Clerk' s office and, within fifteen days after the adoption of this Resolution, the City Clerk shall file a copy of the Map so endorsed in the records of the County Recorder, San Bernardino County, State of California, and in any event this Map shall be filed no later than fifteen days before the public hearing specified in Section 6 below.
Section 4. Services. The type of services proposed to be provided within the District and to be financed under the Act shall consist of those services set forth on Exhibit "A" the " Services"), attached hereto and incorporated herein by reference. The Services are in addition to services currently provided in the District and are necessary to meet increased demands placed upon the City as a result of the development occurring in the District.
Section 5. Special Tax.
a. Except where funds are otherwise available to pay for the Services, it is the intention of the City Council, commencing Fiscal Year 2025- 2026, to levy annually in accordance with procedures contained in the Act a special tax (the " Special Tax") within the District sufficient to pay for the costs thereof, including incidental expenses. The types of incidental expenses proposed to be incurred are set forth in Exhibit "B." The Special Tax will be secured by recordation of a continuing lien against all non- exempt real property in the District and will be collected in the same manner as ordinary ad valorem property taxes are collected, or in such other manner as may be provided by the City Council including, without limitation, direct billing of the affected property owner, and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency as applicable for ad valorem property taxes. In the first year in which the Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. b. The proposed Rate and Method of Apportionment of the Special Tax ( the " Rate and Method") among parcels of real property in the District, in sufficient detail to allow each resident or landowner within the proposed District to estimate the maximum amount such resident or owner will have to pay, is shown in Exhibit " C," attached hereto and incorporated herein by reference. The City Council hereby determines the Rate and Method set forth in Exhibit " C" to be reasonable.
Section 6. Hearing. A public hearing on the establishment of the District, the extent of the District, the furnishing of Services within the District, and the proposed Rate and Method ( the " Hearing") shall be held on November 12, 2024, at 6: 00 p. m., or as soon thereafter as practicable, at the Council Chambers of the City of Highland, 27215 Base 5 Line Highland, California 92346. At the Hearing, any interested person or taxpayer, including all persons owning lands or registered to vote within the proposed District, may appear and be heard.
Section 7. Report. The Staff of the City is directed to study the proposed District and prepare for filing at the Hearing the report required by Section 53321. 5 of the Act. The staff of the City may delegate to consultants of the City the duty to perform the study and prepare the report.
Section 8. Advances. The City may accept advances of funds or work in -kind from any source, including, but not limited to, private persons or private entities, and is authorized and directed to use such funds or that work in -kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating the District. The City may enter into an agreement with the person or entity advancing the funds or work -in - kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work -in -kind, as determined by the City Council, with or without interest.
Section 9. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing (" Notice"), pursuant to Section 6061 of the California Government Code, once in a newspaper of general circulation published in the area of the proposed District. Such Notice shall be substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be completed at least seven days prior to the date of the Hearing.
Section 10. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice by first- class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least fifteen days prior to the date of the Hearing.
Section 11. Voting. Should the City Council determine to form the District, a special election will be held within the District to authorize the levy of the Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail with return postage prepaid or by personal service.
Section 12. Exemptions from Special Tax. Except as may otherwise be provided in Exhibit " C" hereto or by law, all lands owned by any public entity, including the United States, the State of California, County of San Bernardino and/ or the City, or any departments or political subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Services. In addition, reference is hereby made to Exhibit " C" for a description of other lands, if any, which shall be omitted 6 from the levy of the Special Tax.
Section 13. Election to Perform Work. Pursuant to 53329. 5( c) of the Act, the City Council finds that, in its opinion, the public interest will not be served by allowing property owners in the District to enter into a contract pursuant to Section 53329. 5( a) of the Act.
APPROVED AND ADOPTED this 10t' day of September, 2024.
Penny Litburn
Mayor
ATTEST:
Alondra Munoz
City Clerk
7 Exhibit "A"
Description of Services
Authorized Services shall be the following:
Street Lights and Park Lights: Street lights and park lights maintenance including energy charges, operation, maintenance and administrative costs of streetlights within the boundaries of the CFD.
Landscape and Park Maintenance: Landscape maintenance to be financed, including streetscape, park landscaping, open space areas and related facilities.
The landscape maintenance may include, but is not limited to, all landscaping materials such as turf, ground cover, shrub, trees, plants, irrigation and drainage systems, weed control and other abatements, electricity, repair/ replacement and inspection.
Private Access Roads: Private Access Roads maintenance includes furnishing of services and materials for the ordinary and usual operation, maintenance and servicing of private access roads.
Stormwater Facilities: Maintenance, administration and inspection of the stormwater facilities and BMPs including water quality basins, bioretention pond and storm detention system and structures, piping, public storm drain system including, but not limited to, catch basins and connector pipe screens, and any other NPDES/ WQMP/ BMP related devices. The maintenance may include but is not limited to all landscaping materials such as turf, ground cover, shrub, trees, plants, irrigation and drainage systems, weed control and other abatements, lighting, electricity, repair/ replacement and inspection. Inspection is inclusive of scheduling, travel time, visual inspection process and procedures, GPS location recording, reporting by device, annual reporting, visual inspection for functionality, vegetated as designed, irrigation is complete and in working order, noting any of the following: any deficiencies, erosion, trash, silt, sediment, or structural deficiencies. Maintenance is inclusive of repair or replacing any of the items noted as deficient or needing to be corrected to not be deficient. Administration is inclusive of quality assurance and control of inspection and maintenance, general contract administration, including phone calls and procurement of goods and services.
Litter and graffiti removal on sound walls and other amenities, including but not limited to playground equipment and trash cans, plus normal painting as required, within the CFD.
8 All other services necessary or useful for, or in connection with, the authorized services listed above, including building a reserve fund for replacement of facilities.
9 Exhibit " B"
Incidental Expenses
The cost of the Services shall include incidental expenses, including costs associated with formation of the District, determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, and the costs of engineering, inspecting, coordinating, completing, planning and designing the Services, including the costs of environmental evaluations. Authorized Services shall be the following:
The following incidental expenses are examples of those that may be incurred in the formation of the District:
Engineering services,
Publishing, mailing and posting of notices,
Governmental notification and filing costs,
Election costs, and
Charges and fees of the City other than those waived.
The following incidental expenses are examples of those that may be incurred in each annual Special Tax levy:
Necessary consultant costs,
Costs of posting and collecting the special taxes, and
Administrative costs of the City.
10 Exhibit " C
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
11 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR
COMMUNITY FACILITIES DISTRICT NO. 24- 001 ( HIGHLAND PARK)
OF THE CITY OF HIGHLAND, COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA
A Special Tax ( all capitalized terms are defined in Section A., " Definitions", below) shall be applicable to each Parcel of Taxable Property located within the boundaries of Community Facilities District No. 24- 001 ( Highland Park). The amount of Special Tax to be levied on a Parcel in each Fiscal Year, commencing in Fiscal Year 2025- 2026, shall be determined by the City Council of the City of Highland, acting in its capacity as the legislative body of the CFD by applying the appropriate Special Tax as set forth in Sections B., C., and D., below. All of the real property within the CFD, unless exempted by law or by the provisions of Section E. below, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
Acre" or " Acreage" means the land area of a Parcel as indicated on the most recent Assessor's Parcel Map, or if the land area is not shown on the Assessor's Parcel Map, the land area shown on the applicable Final Map, Assessor' s Parcel Map, condominium plan, or other recorded County map or the land area calculated to the reasonable satisfaction of the Administrator using the boundaries set forth on such map or plan. The square footage of a Parcel is equal to the Acreage of such Parcel multiplied by 43, 560.
Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2. 5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
Administrative Expenses" means all actual or reasonably estimated costs and expenses of the CFD that are chargeable or allocable to carry out its duties as the Administrator of the CFD as allowed by the Act, which shall include without limitation, all costs and expenses arising out of or resulting from the annual levy and collection of the Special Tax ( whether by the City or designee thereof or both), any litigation or appeal involving the CFD, and other administrative expenses of the City or designee thereof directly related to the CFD. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD for attorney' s fees and other costs related to commencing and pursuing to completion any foreclosure as a result of delinquent Special Taxes.
Administrator" means an official of the City, or designee thereof, responsible for determining the annual amount of the levy and collection of the Special Taxes.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 1
12 Approved Property" means all Parcels of Taxable Property: ( i) that are included in a Final Map that was recorded prior to January 1
It preceding the Fiscal Year in which the
Special Tax is being levied, and ( ii) that have not been issued a Building Permit prior to the April 1st preceding the Fiscal Year in which the Special Tax is being levied.
Assessor" means the Assessor of the County.
Assessor' s Parcel Map" means an official map of the Assessor of the County designating Parcels by Assessor' s Parcel Number.
Assessor' s Parcel Number" means the number assigned to a lot or Parcel for purposes of identification as determined from an Assessor Parcel Map or the applicable assessment roll.
Base Year" means the Fiscal Year ending June 30, 2025.
Boundary Map" means a recorded map of the CFD which indicates by a boundary line the extent of the territory identified to be subject to the levy of Special Taxes.
Building Permit" means the first legal document issued by a local agency giving official permission for new construction. For purposes of this definition, " Building Permit" shall not include any subsequent Building Permits issued or changed after the first issuance.
CFD" means Community Facilities District No. 24- 001 ( Highland Park) of the City of Highland.
City" means the City of Highland, California
Consumer Price Index" means the Consumer Price Index published by the U. S.
Bureau of Labor Statistic for "All Urban Consumers" in the Riverside -San Bernardino - Ontario Area, measured as of the month of March in the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Consumer Price Index shall be another index as determined by the Administrator that is reasonably comparable to the Consumer Price Index for the Riverside -San Bernardino -Ontario Area.
Council" means the City Council of the City acting as the legislative body of the CFD.
County" means the County of San Bernardino, California.
Developed Property" means all Parcels of Taxable Property: ( i) that are included in a Final Map that was recorded prior to January 1
It preceding the Fiscal Year in which the
Special Tax is being levied, and ( ii) for which a Building Permit for new construction has been issued prior to April 1
It preceding the Fiscal Year in which the Special Tax is being levied.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 2
13 Dwelling Unit" or "( D/ U)" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the Administrator.
Exempt Property" means any Parcel which is exempt from Special Taxes pursuant to Section E., below.
Final Map" means a subdivision of property by recordation of a Assessor' s Parcel Map or lot line adjustment, pursuant to the Subdivision Map Act ( California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which Building Permits may be issued without further subdivision.
Fiscal Year" means the 12 month period starting on July 1 of any calendar year and ending the following June 30.
Land Use Class" means any of the classes listed in Table 1 and Table 2 of Section C. below.
Maximum Special Tax" means the Maximum Special Tax A and Maximum Special Tax B.
Maximum Special Tax A" means for each Parcel in each Fiscal Year, the greatest amount of Special Tax A, determined in accordance with Section C., below, which may be levied on such Parcel in such Fiscal Year.
Maximum Special Tax B" means for each Parcel in each Fiscal Year, the greatest amount of Special Tax B, determined in accordance with Section C., below, which may be levied on such Parcel in such Fiscal Year.
Mixed Use" means a zoning type that blends residential, commercial, retail or other land uses on a single parcel.
Multifamily Residential Property" means all Parcels of Developed Property that consists of a building or buildings comprised of attached Dwelling Units available for rental by the general public, not for sale to an end user, and under common management.
Non -Residential Property" means all Parcels of Developed Property for which a Building Permit was issued, permitting the construction of one or more non- residential structures.
Operating Reserves" means cash reserves to fund the Special Tax A Requirement, and Special Tax B Requirement in the event of cash flow shortages or unexpected increases in costs.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 3
14 Parcel( s)" means a lot or parcel within the CFD shown on an Assessor' s Parcel Map with an assigned Assessor' s Parcel Number valid as of July 1st for the Fiscal Year for which the Special Tax is being levied.
Property Owner' s Association Property" means all Parcels which have been conveyed, dedicated to, or irrevocably offered for dedication to a property owner association, including any master or sub -association, prior to April 1 st preceding the Fiscal
Year in which the Special Tax is being levied.
Proportionately" means for Parcels of Taxable Property that are ( i) Developed Property, that the ratio of the actual Special Tax levy to Maximum Special Tax is the same for all Parcels of Developed Property, ( ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Parcels of Approved Property, and ( iii) Undeveloped Property, Public Property or Property Owner' s Association Property, that the ratios of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Parcels of Undeveloped Property, Public Property and Property Owner's Association Property.
Public Property" means all Parcels which, as of April 1st preceding the Fiscal Year in which the Special Tax is being levied, are ( i) used for rights -of -way or any other purpose and are owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State, the County, City or any other public agency, provided, however, that any property leased by a public agency to a private entity and subject to taxation under Section 53340. 1 of the Act shall be taxed and classified according to its use; or ( ii) encumbered by an unmanned utility easement making impractical its utilization for other than the purpose set forth in the easement.
Residential Property" means all Parcels of Developed Property for which a Building Permit has been issued permitting the construction of one or more residential Dwelling Units.
Single Family Property" means all Parcels of Residential Property, other than Multifamily Residential Property.
Special Tax( es)" means the Special Tax A and Special Tax B to be levied in each Fiscal Year on each Parcel of Taxable Property in accordance with Section D.
Special Tax A" means the special tax to be levied in each Fiscal Year on each Parcel of Taxable Property in accordance with Section D. 1 to fund the Special Tax A Requirement.
Special Tax Area A" means the parcels comprising Special Tax Area A as depicted and defined in the Boundary Map.
Special Tax A Requirement" means for each Fiscal Year, that amount required to pay:
i) the estimated cost of Special Tax Area A Services for such Fiscal Year as determined City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 4
15 by the City; ( ii) fund the Special Tax A Reserve Fund in an amount not to exceed 20% of the Special Tax A Reserve Fund Requirement ( iii) pay Administrative Expenses; ( iv) pay for the actual or anticipated shortfall due to Special Tax A delinquencies in the current or prior Fiscal Year; and ( v) less a credit for funds available to reduce the annual Special Tax A levy as determined by the Administrator.
Special Tax A Reserve Fund" means a fund to be used for capital replacement and Operating Reserves related to the Special Tax A Services.
Special Tax A Reserve Fund Requirement" means an amount up to 200% of the anticipated annual cost of Special Tax A Services of $97, 317 for the Base Year. The Special Tax A Reserve Fund Requirement shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent ( 2%) of the amount in effect in the previous Fiscal Year.
Special Tax A Services" means ( i) In -Tract Street lights and park lights maintenance including energy charges, operation, maintenance and administrative costs of streetlights within the boundaries of Special Tax Area A, ( ii) Maintenance of the public storm drain system, including but not limited to, catch basins, pipes and pipe connector screens ( iii) Maintenance of the access road ( iv) Capital replacement reserve accumulation for the public storm drain system, access road and bioretention pond and structures.
Special Tax B" means the special tax to be levied in each Fiscal Year on each Parcel of Taxable Property in accordance with Section D. 2 to fund the Special Tax B Requirement. Maintenance of the Special Tax B Improvements shall be the responsibility of the Property Owner' s Association as long as the Special Tax B Improvements are being maintained to a standard acceptable to the City. Special Tax B shall not be levied in any year the City determines that the Special Tax B Improvements have been maintained to a standard acceptable to the City. Special Tax B shall begin to be levied in the first year in which the City determines that the Special Tax B Improvements have not been maintained to a standard acceptable to the City. The City shall not levy Special Tax B without first giving notice to the Property Owner' s Association specifying the maintenance deficiency related to the Special Tax B Improvements and allowing a sufficient period, as determined by the City, for curing such deficiency
Special Tax Area B" means the parcels comprising Special Tax Area B as depicted and defined in the Boundary Map.
Special Tax B Requirement" means for each Fiscal Year, that amount required to: ( i) pay the estimated cost of Special Tax Area B Services for such Fiscal Year as determined by the City; ( ii) fund the Special Tax B Reserve Fund in an amount not to exceed 20% of the Special Tax B Reserve Fund Requirement (iii) pay Administrative Expenses; (iv) pay for the actual or anticipated shortfall due to Special Tax B delinquencies in the current or prior Fiscal Year; and ( v) less a credit for funds available to reduce the annual Special Tax B levy as determined by the Administrator.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 5
16 Special Tax B Reserve Fund" means a fund to be used for capital replacement and Operating Reserves related to the Special Tax B Services.
Special Tax B Reserve Fund Requirement" means an amount up to 200% of the anticipated annual cost of Special Tax B Services of $90, 623 for the Base Year. The Special Tax B Reserve Fund Requirement shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent ( 2%) of the amount in effect in the previous Fiscal Year.
Special Tax B Services" means (i) Public park landscape maintenance (ii) Open space landscape maintenance (iii) Basin landscape maintenance and ( iv) Bioretention pond and storm detention system and structures and piping maintenance. Landscaping maintenance may include, but is not limited to, all landscaping materials such as turf, ground cover, shrub, trees, plants, irrigation and drainage systems, weed control and other abatements, electricity, repair/replacement and inspection. Inspection is inclusive of scheduling, travel time, visual inspection process and procedures, GPS location recording, reporting by device, annual reporting; visual inspection for functionality, vegetated as designed, irrigation is complete and in working order, noting any of the following: deficiencies, erosion, trash, silt, sediment, or structural deficiencies.
Maintenance is inclusive of repair or replacing any of the items noted as deficient or needing to be corrected to not be deficient. Administration is inclusive of quality assurance and control of inspection and maintenance, general contract administration, including phone calls and procurement of goods and services.
State" means the State of California.
Taxable Property" means all Parcels within the boundary of the CFD, inclusive of Special Tax A and Special Tax B pursuant to the Boundary Map which are not exempt from the Special Tax pursuant to Section E., below.
Taxable Unit" means either a Dwelling Unit or an Acre, as shown in Tables 1- 3.
Undeveloped Property" means all Parcels of Taxable Property not classified as Developed Property, Approved Property, Public Property, or Property Owner' s Association Property.
B. ASSIGNMENT TO LAND USE CLASS
Each Fiscal Year, commencing with Fiscal Year 2025- 2026, all Parcels of Taxable Property shall be classified as either Developed Property, Approved Property, Undeveloped Property, Public Property, or Property Owner' s Association Property; and subject to the levy of Special Taxes in accordance with this Rate and Method of Apportionment as determined pursuant to Sections C. and D.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 6
17 Parcels of Developed Property shall further be classified as Residential Property or Non - Residential Property. Parcels of Residential Property shall further be classified as Single Family or Multifamily Residential Property.
C. MAXIMUM SPECIAL TAX RATES
1. Developed Property
The Maximum Special Tax A and Maximum Special Tax B that may be levied and escalated, as explained further in Section C. 1. ( a) below, in any Fiscal Year for each Parcel classified as Developed Property shall be determined by reference to Table 1 below according to the Special Tax Area in which the Parcel is located.
TABLE 1
Maximum Special Tax Rates for Developed Property
for Fiscal Year 2025-2026
Land
Use
Class Description
Taxable
Unit
Maximum
Special Tax A
Per Taxable Unit
Maximum
Special Tax B
Per Taxable Unit
1 Single Family Residential Property D/ U 1, 058 1, 011 2 Multifamily Residential Property Acre 10, 647 10, 174 3 Non -Residential Property Acre 10, 647 10, 174
a) Increase in the Maximum Special Tax
On each July 1, following the Base Year, the Maximum Special Tax A and Special Tax B, identified in Table 1 above, shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent (6%) and a minimum annual increase of two percent ( 2%) of the Maximum Special Tax in effect in the previous Fiscal Year. b) Multiple Land Use Classes
In some instances a Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax A that may be levied on such Parcel shall be the sum of the Maximum Special Tax A that can be levied for each Land City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 7
18 Use Class located on that Parcel. The Maximum Special Tax B that may be levied on such Parcel shall be the sum of the Maximum Special Tax B that can be levied for each Land Use Class located on that Parcel. For a Parcel that contains more than one Land Use Class ( Mixed Use) the Single Family Property portion will be assessed based on Dwelling Units and the other land uses will be assessed based on acreage as designated for each land use as determined by reference to the site plan approved for such Parcel. The Administrator' s allocation to each Land Use Class shall be final.
2. Approved Property
The Maximum Special Tax A and Maximum Special Tax B that may be levied and escalated for each Parcel classified as Approved Property shall be the amount determined by reference to Table 4 according to the Special Tax Area within which the Parcel is located.
TABLE 2
Maximum Special Tax for Approved Property
for Fiscal Year 2025- 2026
Maximum Maximum
Special Tax A Special Tax B
Per Acre Per Acre
10, 647 10, 174
The Maximum Special Tax A and Maximum Special Tax B for Approved Property shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent ( 2%) of the corresponding Maximum Special Tax in effect in the previous Fiscal Year.
The Maximum Special Tax A for each Parcel of Approved Property shall be equal to the product of the applicable Undeveloped Property Maximum Special Tax A per Acre times the Acreage of such Parcel; provided, however, for a Parcel of Approved Property that is expected to become Single Family Property as reasonably determined by the Administrator based on the Final Map recordation for such Parcel, the Maximum Special Tax A for such Parcel of Approved Property shall be calculated pursuant to Section C. 1 as if such Parcel were already designated as Single Family Property.
The Maximum Special Tax B for each Parcel of Approved Property shall be equal to the product of the applicable Undeveloped Property Maximum Special Tax B Der Acre times the Acreage of such Parcel; provided, however, for a Parcel of City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 8
19 Approved Property that is expected to become Single Family Property as reasonably determined by the Administrator based on the Final Map for such Parcel, the Maximum Special Tax B for such Parcel of Approved Property shall be calculated pursuant to Section C. 1 as if such Parcel were already designated as Single Family Property.
The Maximum Special Tax A and Maximum Special Tax B for Approved Property, each area calculated independent of the other, shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent ( 2%) of the corresponding Maximum Special Tax in effect in the previous Fiscal Year.
3. Undeveloped Property
The Maximum Special Tax A and Maximum Special Tax B that may be levied and escalated for each Parcel classified as Undeveloped Property shall be the amount determined by reference to Table 3 according to the Special Tax Area within which the Parcel is located.
TABLE 3
Maximum Special Tax for Undeveloped Property
for Fiscal Year 2025-2026
Maximum Maximum
Special Tax A Special Tax B
Per Acre Per Acre
10, 647 10, 174
The Maximum Special Tax A and Maximum Special Tax B for Undeveloped Property shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent ( 2%) of the corresponding Maximum Special Tax in effect in the previous Fiscal Year.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 9
20 4. Public Property and/ or Property Owner' s Association Property that is not Exempt Property pursuant to the provisions of Section E.
The Maximum Special Tax A for each Parcel of Taxable Public Property and/ or Property Owners Association Property shall be equal to the product of the applicable Undeveloped Property Maximum Special Tax A per Acre times the Acreage of such Parcel and shall be increased annually, commencing July 1, 2026, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent 2%) of the Maximum Special Tax A in effect in the previous Fiscal Year.
The Maximum Special Tax B for each Parcel of Taxable Public Property and/ or Property Owners Association Property shall be equal to the product of the applicable Undeveloped Property Maximum Special Tax B per Acre times the Acreage of such Parcel and shall be increased annually, commencing July 1, 2024, based on the percentage increase in the Consumer Price Index with a maximum annual increase of six percent ( 6%) and a minimum annual increase of two percent 2%) of the Maximum Special Tax B in effect in the previous Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
1. Special Tax A
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the Administrator shall levy the Special Tax A on all Taxable Property until the amount of Special Tax A equals the Special Tax A Requirement in accordance with the following steps:
First: The Special Tax A shall be levied Proportionately on each Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax A as needed to satisfy the Special Tax A Requirement;
Second: If additional moneys are needed to satisfy the Special Tax A Requirement after the first step has been completed, the Special Tax A shall be levied Proportionately on each Parcel of Approved Property at up to 100% of the Maximum Special Tax A for Approved Property;
Third: If additional moneys are needed to satisfy the Special Tax A Requirement after the first two steps have been completed, the Special Tax A shall be levied Proportionately on each Parcel of Undeveloped Property at up to 100% of the applicable Maximum Special Tax A for Undeveloped Property; City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 10
21 2. Special Tax B
Commencing with Fiscal Year 2025-2026 and for each following Fiscal Year, the Administrator shall levy the Special Tax B on all Taxable Property until the amount of Special Tax B equals the Special Tax B Requirement in accordance with the following steps:
First: The Special Tax B shall be levied Proportionately on each Parcel of Developed Property at up to 100% of the applicable Maximum Special Tax A as needed to satisfy the Special Tax B Requirement;
Second: If additional moneys are needed to satisfy the Special Tax B Requirement after the first step has been completed, the Special Tax B shall be levied Proportionately on each Parcel of Approved Property at up to 100% of the Maximum Special Tax B for Approved Property;
Third: If additional moneys are needed to satisfy the Special Tax B Requirement after the first two steps have been completed, the Special Tax B shall be levied Proportionately on each Parcel of Undeveloped Property at up to 100% of the applicable Maximum Special Tax B for Undeveloped Property; Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Parcel of Residential Property for which a Building Permit has been issued be increased by more than ten percent ( 10%) as a result of a delinquency in the payment of the Special Tax applicable to any other Parcel above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 11
22 E. EXEMPTIONS
The CFD shall not levy Special Taxes on Public Property and Property Owner' s Association Property within the CFD. If any Parcels of Public Property or Property Owner' s Association Property are converted to Taxable Property as the result of the sale or lease of an Exempt Parcel to a private owner for residential or non- residential development, it shall become subject to the Special Tax in accordance with this Rate and Method of Apportionment as determined pursuant to Sections C. and D.
F. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes and shall be subject to the same penalties, the same procedure, sale and lien priority in the case of delinquency; provided, however, that the Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of the CFD, and provided further that the CFD may covenant to foreclose and may actually foreclose on Parcels having delinquent Special Taxes as permitted by the Act.
G. APPEALS
Any taxpayer may file a written appeal of the Special Tax on his/ her Parcel( s) with the Administrator, provided that the appellant is current in his/ her payments of Special Taxes.
During pendency of an appeal, all Special Taxes must be paid on or before the payment due date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The Administrator shall review the appeal, meet with the appellant if the Administrator deems necessary, and advise the appellant of its determination. If the Administrator agrees with the appellant, the Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant' s Parcel( s). No refunds of previously paid Special Taxes shall be made.
The Administrator shall interpret this Rate and Method of Apportionment and make determinations relative to the annual levy and administration of the Special Tax and any taxpayer who appeals, as herein specified.
H. TERM OF THE SPECIAL TAX
The Special Tax A and Special Tax B shall be levied annually in perpetuity unless terminated earlier by the City.
City of Highland
RMA For CFD No. 24- 001 ( Highland Park) 12
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STAFF REPORT
TO THE CITY COUNCIL
DATE: September 10, 2024
FROM: Carlos Zamano, City Manager
REVIEWED BY: Lawrence A. Mainez, Community Development Director V l Alondra Munoz, City Clerk
PREPARED BY: Camille Duarte, Administrative Assistant III( 0 SUBJECT: Declare Two ( 2) Seats Vacant on the Community Trails Committee
RECOMMENDATION: Staff recommends the City Council:
1. Declare two (2) seats vacant on the Community Trails Committee; and
2. Direct the City Clerk to advertise the vacancy on the Community Trails Committee.
PUBLIC NOTICE: The agenda for this item was posted at the three locations per Resolution No. 2011- 047 and on the City's website.
BACKGROUND: Pursuant to Chapter 2. 32. 020 of the Highland Municipal Code, the Community Trails Committee shall consist of five members appointed by the City Council and shall serve without compensation. Each member of the committee shall serve a two- year term of office, and have a demonstrated knowledge and interest in one or more of the following: equestrian activities, bicycling, hiking, nature studies, or landscape/ open space design.
Committee Members Brent Merideth and Richard Bowman terms expire in October 2024.
Therefore, it would be appropriate for the City Council to declare two ( 2) seats vacant on the Community Trails Committee and direct the City Clerk to advertise and post those vacancies.
Attachment: 2024 Attendance Record
Motion
Ayes
Noes
Abstain
Absent
Second Agenda Item No.
File No.
City Manager
1 ATTACHMENT 1
Attendance Record
2 2024 Community Trails Committee Attendance
Legend: A - Absent P - Present
Meeting Date:
2nd Thursday
Date
Richard
Bowman
Erwin
Fogerson
Brent
Merideth
Michael
McMillan
1/ 8/ 2024 P P P P
2/ 8/ 2024 P P P P
3/ 14/ 2024 P P P A
5/ 9/ 2024 P P P A
TOTALS P- 4 P- 4 P- 4 P- 2
A-0 A- 0 A-0 A- 2
3 STAFF REPORT
TO THE CITY COUNCIL
DATE: September 10, 2024
FROM: Carlos Zamano, City Manager
PREPARED BY: Alondra Munoz, City Clerk
SUBJECT: City Manager Report and Comments
Work Program, Regional/ Legislative/ Development Issues, Subcommittees, etc.)
RECOMMENDATION: Discussion and possible action.
Approved Motion
Denied Ayes
Continued Noes
Tabled Abstain
Absent
Second Agenda Item No.
File No.
Z"- "
City Manager
1 STAFF REPORT
TO THE CITY COUNCIL
DATE: September 10, 2024
FROM: Carlos Zamano, City Manager
PREPARED BY: Alondra Munoz, City Clerk
SUBJECT: Council Member Comments
Agency/ Committee/ AB1234 Reports, District Updates, etc.) RECOMMENDATION: Discussion and possible action.
Approved Motion
Denied Ayes
Continued Noes
Tabled Abstain
Absent
Second Agenda Item No.
File No.
ity Manager
1 STAFF REPORT
TO THE HOUSING AUTHORITY
DATE: September 10, 2024
FROM: Carlos Zamano, Executive Director
PREPARED BY: Alondra Munoz, Secretary
SUBJECT: Minutes - July 9, 2024 Special Meeting
RECOMMENDATION: Approve the Minutes as submitted.
Approved Motion
Denied Ayes
Continued Noes
Tabled Abstain
Absent
Second Agenda Item No.
File No.
Director
1 Housing Authority Special Meeting Minutes July 9, 2024
CALL TO ORDER
The special meeting of the Housing Authority of the City of Highland was called to order at 6: 33 p. m. by Chair Lilburn at the Donahue Council Chambers, 27215 Base Line, Highland, California.
ROLL CALL
Present: Chavez -Cordova, Lilburn, McCallon, Solano, Timmer
Absent: None
PUBLIC COMMENT
None
BUSINESS ITEMS
1. Minutes - December 12, 2023 Regular Meeting
A MOTION was made by Vice Chair McCallon, seconded by Authority Member Solano, to approve the Minutes as submitted. Motion carried, 5- 0.
2. Resolution No. HA2024- 001 Authorizinq Investment of the Highland Housing Authority Monies in the Local Agency Investment Fund ( LAIF)
A MOTION was made by Vice Chair McCallon, seconded by Authority Member Solano, to adopt Resolution No. HA2024- 001 authorizing investment of the Highland Housing Authority monies in the Local Agency Investment Fund ( LAIF). Motion carried, 5- 0.
RESOLUTION NO. HA2024- 001
A RESOLUTION OF THE HIGHLAND HOUSING AUTHORITY OF THE
CITY OF HIGHLAND, CALIFORNIA, AUTHORIZING INVESTMENT OF MONIES IN
THE LOCAL AGENCY INVESTMENT FUND ( LAIF) AND REPEALING RESOLUTION NO. HA2018- 001
ADJOURN
There being no further business, Chair Lilburn adjourned the meeting at 6: 34 p. m.
Submitted By:
Alondra Munoz
Secretary
Approved By:
Penny Lilburn
Chair
2 STAFF REPORT
TO THE CITY COUNCIL/ HOUSING AUTHORITY
DATE: September 10, 2024
FROM: Carlos Zamano, City Manager/ Executive Director
PREPARED BY: Lawrence A. Mainez, Community Development Director/ Assistant Executive Director,
Kim Stater, Assistant Community Development Director,
Steve Dukett, TKE Managing Director ( Authority Consultant), Maricela Marroquin, City Attorney/ Housing Authority Counsel SUBJECT: Second Amendment of the Ground Lease with Housing Venture I, enabling the refinancing and loan funds to make repairs and improvements related to the Jeffrey Court Senior Apartments, and extend the Ground Lease Term for an
additional twenty-six ( 26) years, enacting a new fifty-five ( 55) year term, and First Amendment of the Regulatory
Agreement between Housing Authority, City and Lessee to extend the term of the affordability covenant by an additional twenty- six ( 26) years.
LOCATION: 7367 Central Avenue, Highland, CA
Assessor' s Parcel Number: 1192- 411- 42
RECOMMENDATION: Staff recommends the City of Highland City Council and Highland Housing Authority consider the following actions:
1. Adopt City Council Resolution No. 2024 -
approving the First Amendment of Regulatory
Agreement between the Housing Authority, the City of
Highland, and Housing Venture I, and making a
finding of exemption under the California
Environmental Quality Act.
Approved Motion
Denied Ayes
Continued Noes
Tabled Abstain
Absent
Secretary
Second Agenda Item No.
File No.
ExOut Director
1 Housing Authority Meeting —September 10, 2024
Jeffrey Court Apt — 21d Amendment of Ground Lease and First Amendment of Regulatory Agreement
2. Adopt Housing Authority Resolution No. 2024 -
approving the Second Amendment of the Ground
Lease with Housing Venture I, enabling the
refinancing and loan funds to make repairs and
improvements related to the Jeffrey Court Senior
Apartments, and extending the Ground Lease Term
for an additional twenty- six ( 26) years, and the First Amendment of the Regulatory Agreement between
Housing Authority, City and Lessee to extend the term
of the affordability covenant by an additional twentysix ( 26) years; and
3. Direct the Housing Authority Secretary/City Clerk to file a Notice of Exemption with the San Bernardino
County Clerk of the Board of Supervisors.
FISCAL IMPACT: The Housing Authority currently receives a fixed lease rate of $ 120, 000 per year under the existing Gound Lease ($ 10, 000 per month). The cash received from such land rental payments is used by the Housing Authority for affordable housing purposes. Housing Venture I, is currently paying down three ( 3) secured loans made in 1998 by the City of Highland and the former Highland Redevelopment Agency and now held by the Housing Authority as successor to the housing assets of the former Highland Redevelopment Agency). The balance for those three loans is approximately $ 695, 728 at 1 % simple interest and remain in a subordinate position to the primary financing, and therefore unaffected by the subject Ground Lease Amendment.
ENVIRONMENTAL REVIEW: The City' s Planning Division reviewed the Project in compliance with the California Environmental Quality Act (" CEQA"). Staff has determined that the Project is exempt from CEQA review pursuant to CEQA Guidelines Section 15301 ( Class 1 — Existing Facilities) which provides an exemption of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. In the case of Jeffrey Court Senior Apartments, the Property is already improved with an apartment complex. The Second Amendment to the Ground Lease and First Amendment to the Regulatory Agreement will allow the Lessee to upgrade the existing plumbing facilities which involves no expansion of the existing use. In addition, the Project is exempt pursuant to CEQA Guidelines Section 15061( b)( 3) which provides a common sense exemption in that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. As the Property is already improved with an apartment complex, and only minor improvements will be made to the apartment, there is no possibility that the lease extension or extension of the regulatory agreement will have a significant effect on the environment. A Notice of Exemption will be filed with the County Clerk of the Board, subject to the Housing Authority Board' s 2 2
Housing Authority Meeting —September 10, 2024
Jeffrey Court Apt — 2nd Amendment of Ground Lease and First Amendment of Regulatory Agreement and City Council' s approval of the Second Amendment of Ground Lease and First Amendment of Regulatory Agreement.
PUBLIC NOTICE: As required by Resolution, the Agenda was posted at the City' s three ( 3) designated posting locations within the City. In addition, the Public Hearing Notice was published in the Sun Newspaper on August 23, 2024, and August 30, 2024, and posted on the City' s Website. In addition, in accordance with the California Health and Safety Code Section 33433, an informational report was prepared and made available to the public by August 23, 2024, and it is attached to this staff report for City Council and Housing Authority review. The 33433 Report is an integral part of the comprehensive package of public documents to be presented to and reviewed by the Housing Authority during a noticed public hearing prior to considering the possible approval of the Second Amendment to the Ground Lease and First Amendment to the Regulatory Agreement.
BACKGROUND: The 184- unit Jeffrey Court Senior Apartments project with one ( 1) manager's unit was completed by Housing Venture I, LP ( the " Lessee") in 1998 with assistance from the City of Highland, the Highland Redevelopment Agency, the Lessee' s limited equity partner, and East- West Bank. The Jeffrey Court Apartments are located at 7367 Central Avenue, which is a 7. 21- acre site that is currently owned by the Highland Housing Authority ( formerly owned by the Highland Redevelopment Agency).
The Site is ground - leased to the Lessee pursuant to a Disposition and Development Agreement initially approved on March 27, 1998 ( the " Original DDA") by and between the former Highland Redevelopment Agency, the City and the Lessee. The Ground Lease is dated as of March 27, 1998 ( the " Original Lease") and has been amended by a First Amendment to Ground Lease also dated March 27, 1998 ( the " Existing Lease").
The term of the Existing Lease commenced as of March 27, 1998, and has a term of 55 years ( with approximately 29. 5 years remaining). The Original DDA and Lease was first amended on November 10, 2015, and through that amendment also further amended the Existing Ground Lease.
All of the apartment units available to tenants are restricted by either Home Investment Partnership Program (" HOME"), Low -Income Housing Tax Credit (" LIHTC"), or redevelopment agency Low- and Moderate - Income Housing Fund (" LMIHF") requirements as to tenant income eligibility and as to the cost of occupancy. The apartments have been an excellent addition to the fabric of the Highland senior community and have been well maintained by the Lessee but are now in need of some upgrades.
GROUND LEASE AMENDMENT: During June 2023, the Lessee submitted its approximately $ 2. 3 million plan to upgrade the plumbing and piping system at the Jeffrey Court Senior Apartments that included refinancing its first lien East-West Bank loan by securing replacement primary debt and/ or equity funds to finance the needed upgrades. Given the anticipated term of the replacement primary debt, the financial feasibility of the plan requires a 26- year extension of the term of the Ground Lease. In addition, in exchange for the 26- year extension of the Lease, the Lessee has offered to extend the affordability covenants by 26 years from the date funding is secured and the 3 3
Housing Authority Meeting —September 10, 2024
Jeff -ey Court Apt — 2nd Amendment of Ground Lease and First Amendment of Regulatory Agreement Ground Lease is recorded ( extending term to 2079). All other terms and conditions would remain the same. A description of the improvements is included as Exhibit A to the attached " Second Amendment of the Ground Lease and First Amendment of Regulatory Agreement" ( See Attachment 3, Housing Authority Resolution). The extension of the affordability covenant will be memorialized in the Frist Amendment of the Regulatory Agreement.
The Lessee anticipates that the funds necessary to complete the required improvements will be available from its lender and disbursed pursuant to its lender' s usual disbursement procedures for improvements of this kind. It is estimated the improvements will cost approximately $ 2. 3 million.
The effectiveness of the proposed amendment to the Ground Lease and the extension of the affordability covenant will occur concurrently with the Lessee' s refinancing of the project. As noted in the proposed amendment to the Ground Lease and agreed to by the Lessee, the improvements shall be completed within nine ( 9) months from the date funding is secured. The Lessee is confident that the amended Ground Lease structure will work as proposed and will obtain concurrence from their lender.
ANALYSIS: The proposed Second Amendment to the Ground Lease with Housing Venture I, will enable the refinancing and loan funds to make needed repairs and improvements related to the Jeffrey Court Senior Housing Apartments (estimated to be
2. 3 million). The proposed extension of the Ground Lease Term for an additional twenty- six ( 26) years, essentially restarting the original fifty-five ( 55) term will also benefit the existing and future tenants by making needed re -piping and related repairs and upgrades to the apartment units.
The First Amendment of the Regulatory Agreement extends the affordability convent requirements an additional 26 years past the initial lease term. The original Term was March 27, 1998 through March 26, 2053. The new Term is tentatively set for September 10, 2024 through September 10, 2079 ( the final term to be determined from the date funding is secured and the Ground Lease is recorded). The term extension and its related affordability covenant will be reported to the California Department of Housing and Community Development/ Office of Planning and Research as part of the City' s Certified Housing Element annual reporting requirement. The extension of affordability covenants implements Programs 16B & 16C ( Affordable Housing Preservation Programs) listed in the City' s 6t1 Cycle Certified Housing Element. Although not new units, the City will receive credit for preserving 184 units at low and very low income.
Based on the need for repairs and upgrades as noted above for the Jeffrery Court Senior Apartments and the extension of the existing affordability covenant, staff recommends the City Council and Housing Authority approve the subject Second Amendment of Ground Lease and First Amendment of Regulatory Agreement. 11 4
Housing Authority Meeting —September 10, 2024
Jeffrey Court Apt — 2nd Amendment of Ground Lease and First Amendment of Regulatory Agreement Attachments:
1. California Health and Safety Code Section 33433 Report.
2. City Council Resolution No. 2024 -
3. Housing Authority Resolution No. 2024 - , with Second Amendment of Ground Lease and First Amendment of Regulatory Agreement.
5 ATTACHMENT - 1
California Health and Safety Code Section 33433 Report
6 TKE Engineering, Inc. 7HEDevelopment Services Division 1NC
INFORMATION SUMMARY
FOR PROPOSED
SECOND AMENDMENT TO GROUND LEASE
WITH
HOUSING VENTURE I
A CALIFORNIA LIMITED PARTNERSHIP
33433 REPORT"
Introduction:
This summary was prepared for the Highland Housing Authority ("Authority") in its capacity as the Successor Housing Agency to the Highland Redevelopment Agency SHA") to address the reporting provisions of the California Health and Safety Code HSC") § 33433 with respect to the Second Amendment to Ground Lease (" Second Amendment to Ground Lease") between the Authority and Housing Venture I, a California limited partnership (" Developer or Lessee").
This Report is an integral part of the comprehensive package of public documents to be presented to and reviewed by the Authority during a noticed public hearing prior to considering the possible approval of the Second Amendment to Ground Lease. Given that this Report and the proposed Second Amendment to Ground Lease will be included in the same package of public documents, such combination of documents is thus considered to be compliant with HSC § 33433 ( a) ( 2) ( A).
The Original Ground Lease ( more fully described below) pertains to the pre-existing 185- unit senior apartment complex (" Apartments") on that certain property identified as 7367 Central Avenue, Highland California located along the east side of Central Avenue approximately 115 feet south of Base Line Road, California ( APN 1192- 411- 42-0000) consisting of approximately 7.21 acres (" Site"). The purpose of the Second Amendment to Ground Lease is to provide an extension to the term of the Original Ground Lease to enable the Developer to refinance its existing private commercial loan and, as may be needed, to raise additional equity capital ( collectively, the Additional Capital") sufficient to make certain repairs to the Apartments. The Second Amendment to Ground Lease together with the Developer' s Additional Capital do not enable the development of any more units at the Site.
Background:
The Highland Redevelopment Agency (" Former Agency") and Developer entered into that certain unrecorded Ground Lease dated as of March 27, 1998 ( the " Original Ground Lease"), pursuant to which the Former Agency leased to Lessee, and Lessee leased from Lessor. A memorandum of lease as to the Original Ground Lease was recorded as Document No. 19980115451 among the official land records of the San Bernardino County Recorder. The Original Ground Lease was entered into pursuant 2305 Chicago Avenue, Riverside, California 92507
Office ( 951) 680- 0440 Fax; ( 951) 680- 0490
www.' FKEenginecring. com
7 to that certain unrecorded Amended and Restated Disposition and Development Agreement dated as of March 27, 1998 by and among the Former Agency, Lessee and the City of Highland ( the " Original DDA"). The term of the Original Ground Lease commenced as of March 27, 1998. A First Amendment to the Ground Lease was also entered into on March 27, 1998. The Original Ground Lease and First Amendment to the Ground Lease will be referred to collectively as the " Lease".
The Former Agency, the City, and Lessee entered into that certain Regulatory Agreement dated March 27, 1998, which was recorded in the Official Records of San Bernardino County as Document No. 19980115 on March 30, 1998 (" Regulatory Agreement"). The Authority, as the SHA, assumed the housing assets of the Former Agency, Lessee and the City amended the Original DDA by that certain unrecorded First Amendment to Amended and Restated Disposition and Development Agreement" dated as of November 10, 2015 ( the " First Amendment to the DDA"), and as part of said First Amendment to the DDA, the parties thereto amended certain terms of the Lease, all as more particularly set forth on said First Amendment to the DDA.
The Authority, Lessee and City entered into a Memorandum of Agreement dated November 10, 2015 to evidence a record of the amendment to the Lease, which was recorded on December 2, 2015 as Document No. 2015- 0524128 in the official records of San Bernardino County.
The Property is improved with 185 multifamily housing apartment units for seniors commonly known as Jeffery Court Senior Apartments. Of the 185 units, 184 units are reserved for low- and moderate -income tenants. The Lessee desires to refinance certain debt secured by the Lease and obtain sufficient loan and/ or equity funds to make certain repairs and improvements to the Apartments. Lessee has requested that the Authority enter into the Second Amendment to Ground Lease to allow the Lessee to finance and make the improvements.
Lessee requires as a condition to its refinancing loan that the term of the Lease, as previously amended, be extended so that it has a fifty- five ( 55) year term from the closing of the refinancing loan. The improvements will improve the Apartments for the benefit of its existing and future low- income residents. In addition, Lessee has agreed to extend the affordability covenants for an additional 26 years that will be memorialized in an Amendment of the Regulatory Agreement.
Project Benefits Community:
The improvements will improve the Apartments for the benefit of its existing and future low- income residents. In addition, Lessee has agreed to extend the affordability covenants for an additional 26 years that will be memorialized in an Amendment of the Regulatory Agreement.
Cost of Agreement to Authority:
The improvements to the Apartments will be privately financed at no cost to the Authority. There are no land acquisition costs, clearance costs, relocation 2-
8 costs or any loans or bonds that are being issues by the Authority to finance the improvements to the Apartments.
2. Estimated value of the interest to be conveyed or leased, determined at highest and best use permitted by the Redevelopment Plan:
The Site is currently leased to the Developer. The Second Amendment to Ground Lease does not modify the lease rate, which will remain unchanged throughout the extended term. Therefore, the underlying value of the land, based on an income approach, remains unchanged. In that regard, the most recent median cap rate published by ApartmentPropertyValuation. com for San Bernardino County, California is 0. 0639%. Based on that cap rate and assuming that the income and operating expenses remain static ( unlikely) and as of the date of this Report, the estimated value of the leased land with the requirements of the affordable housing regulatory agreement in full force during the term of the Lease is approximately $ 1, 877, 935 ($ 120, 000 [ annualized lease rate] / 0. 0639 = 1, 877, 934. 20 [ rounded to $ 1, 878, 000]). It is important to note that the limitation on income caused by the affordable housing regulatory agreement has the concomitant economic effect of lowering the residual land value.
3. Estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants and development costs required by the sale or lease:
The Site is currently leased to the Developer. The Second Amendment to Ground Lease does not modify the lease rate, which will remain unchanged throughout the extended term. As more fully explained in paragraph 2, the estimated value of the leased land with the requirements of the affordable housing regulatory agreement in full force during the term of the Lease is approximately $ 1, 878, 000.
4. The purchase price or sum of the lease payments which the lessor will be required to pay during the term of the lease:
The Site is currently leased to the Developer. The Second Amendment to Ground Lease does not modify the lease rate, which will remain unchanged throughout the extended term. The lease rate is $ 120, 000 per year ( paid monthly in $ 10, 000 increments). The extension of the lease will result in 55 annually equivalent payments of $ 120, 000. Based on that annual payment amount, the total receipts during the term of the lease will be $ 6, 600, 000 ( 55 x 120, 000 = $ 6, 600, 000).
5. Explanation of the reason ( if applicable) why the sales price or lease rate paid to the Authority may be less than market value of the property as determined at its highest and best use:
3-
9 The Site is currently leased to the Developer. The Second Amendment to Ground Lease does not modify the lease rate, which will remain unchanged throughout the extended term. The Parties concur that the negotiated lease rate is a fair value rate based on the rental rate restrictions affecting the Apartments by the affordable housing regulatory agreement.
6. Explanation of why the sale or lease of the property will assist in the elimination of blight:
The Site is currently leased to the Developer. The Second Amendment to Ground Lease does not modify the lease rate, which will remain unchanged throughout the extended term. Therefore, approval of the proposed Second Amendment to Ground Lease does not by itself directly eliminate blight because the blight in this instance was eliminated at the time the Apartments were constructed. However, the Second Amendment to the Ground Lease will enable the Developer to raise sufficient capital to primarily make needed water and sewer related improvements to the Apartments that will extend the economic life of the Apartments and thus prevent blighting conditions.
Certification: I certify that this report complies with the reporting requirements of HSC § 33433. Further, I do not have a present or prospective interest in the Site, the Apartments, or the parties to the Second Amendment to Ground Lease. My engagement to prepare this report was not contingent upon developing or reporting predetermined results. The statements of fact contained herein, and the substance of this report are based on public records, data provided by the Authority, reports provided by its consultants or as otherwise noted herein. This report reflects my personal, unbiased professional analyses, opinions and conclusions. If any of the underlying assumptions related to the Second Amendment to Ground Lease change after the date provided below, then the undersigned reserves the professional privilege to modify the contents and/ or conclusions of this report.
Respectfully Submitted,
TKE ENGINEERING, INC
STEVEN H. DUKETT
Managing Director
Development Services
SHD: ndc
Dated: September 4, 2024
0 10
ATTACHMENT - 2
City Council Resolution No. -
11 HIGHLAND CITY COUNCIL
RESOLUTION NO. 2024 -
A RESOLUTION OF THE HIGHLAND CITY COUNCIL APPROVING A FIRST AMENDMENT
OF REGULATORY AGREEMENT BETWEEN THE HIGHLAND HOUSING AUTHORITY, CITY
OF HIGHLAND, AND HOUSING VENTURE I, AND MAKING A FINDING OF EXEMPTION
UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
7367 Central Avenue)
WHEREAS, the Highland Redevelopment Agency (" Former Agency") and Housing Venture I (" Lessee") entered into that certain unrecorded Ground Lease dated as of March 27, 1998 ( the " Original Ground Lease"), pursuant to which the Former Agency leased to Lessee, and Lessee leased from Lessor, an approximately 7. 21 acre site situated in the County of San Bernardino, California, commonly known as 7367 Central Avenue, as more particularly described in Attachment No. 1 hereto ( the " Property"). A memorandum of lease as to the Original Ground Lease was recorded as Document No. 19980115451 among the official land records of the San Bernardino County Recorder. The Original Ground Lease was entered into pursuant to that certain unrecorded Amended and Restated Disposition and Development Agreement dated as of March 27, 1998 by and among the Former Agency, Lessee and the City of Highland ( the " Original DDA"), a copy of which is on file with the City as a public record. The term of the Original Lease commenced as of March 27, 1998 ( the " Commencement Date"). A First Amendment to the Ground Lease was also entered into on March 27, 1998. The Original Ground Lease and First Amendment to the Ground Lease will be referred to collectively as the Lease"; and
WHEREAS, the Former Agency, the City, and Lessee entered into that certain Regulatory Agreement dated March 27, 1998, which was recorded in the Official Records of San Bernardino County as Document No. 19980115 on March 30, 1998 (" Regulatory Agreement"); and
WHEREAS, the Housing Authority ( who took over the housing assets of the Former Agency), Lessee and the City amended the Original DDA by that certain unrecorded " First Amendment to Amended and Restated Disposition and Development Agreement" dated as of November 10, 2015 ( the " First Amendment to the DDA"), and as part of said First Amendment to the DDA, the parties thereto amended certain terms of the Lease, all as more particularly set forth on said First Amendment to the DDA; and
WHEREAS, the Housing Authority, Lessee and City entered into a Memorandum of Agreement dated November 10, 2015 to evidence a record of the amendment to the Lease, which was recorded on December 2, 2015 as Document No. 2015- 0524128 in the official records of San Bernardino County; and
WHEREAS, the Property is improved with a 184 unit multifamily housing apartment for seniors and one ( 1) manager' s unit commonly known as Jeffery Court (" Project"). Lessee desires to refinance certain debt secured by the Lease and obtain sufficient loan and/ or equity funds to make certain repairs and improvements to the Project. Lessee has requested that the Housing Authority enter into a Second Amendment of the Ground Lease (" Second Amendment") to allow the Lessee to make certain improvements; and 12 WHEREAS, Lessee requires as a condition to its refinancing loan that the term of the Lease, as previously amended, be extended so that it has a fifty-five ( 55) year term from the closing of the refinancing loan; and
WHEREAS, the improvements will improve the Project for the benefit of its existing and future low- income residents. In addition, Lessee has agreed to extend the affordability covenants for an additional 26 years that will be memorialized in a First Amendment of the Regulatory Agreement ("Amended Regulatory Agreement"); and WHEREAS, notice of the public hearing to consider the Second Amendment and Amended Regulatory Agreement was published once a week for two weeks in a newspaper of general circulation; and
WHEREAS, on September 10, 2024, the City Council held a duly noticed public hearing on the proposed Amended Regulatory Agreement, at which time the City Council reviewed and evaluated all of the information, testimony, and evidence presented during the public hearing; and
WHEREAS, all actions required by all applicable law with respect to the proposed Amended Regulatory Agreement have been taken in an appropriate and timely manner; and WHEREAS, the City Council has duly considered all of the terms and conditions of the proposed Amended Regulatory Agreement and believes that is in the best interests of the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.
NOW, THEREFORE, THE HIGHLAND CITY COUNCIL DOES RESOLVE AS FOLLOWS:
Section 1. The City Council finds and determines that the statements set forth in the Recitals above are true and correct.
Section 2. The City Council authorizes and directs its City Manager, or his designee, to execute the Amended Regulatory Agreement, including without limitation such attachments thereto to be executed on behalf of the City Council, and to take such actions as are necessary or convenient to implement the Amended Regulatory Agreement.
Section 3. The City Council hereby approves the Amended Regulatory Agreement and authorizes and directs the City Manager, for and in the name and on behalf of the City, to finalize, execute and deliver the Amended Regulatory Agreement in substantially the form on file with the City Clerk and presented at this meeting, with such additions thereto or changes or insertions therein as may be approved by the City Manager ( such approval to be conclusively evidenced by such execution and delivery).
Section 4. The City Council hereby finds that the extension of the regulatory agreement is exempt from further environmental review under CEQA Guidelines Section 15061( b)( 3) which provides a common sense exemption in that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. As the Property is already improved with an apartment complex and the extension of the regulatory agreement will merely 2 13
extend the term of the affordability covenants, there is no possibility that the extension of the regulatory agreement will have a significant effect on the environment. The City Council hereby directs the Executive Director to file a Notice of Exemption with the County Clerk of the Board.
Section 5. The City Manager and Mayor Pro Tern are hereby authorized and directed, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper in order to effectuate the purposes of this Resolution and the transaction contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved.
APPROVED AND ADOPTED this 10th day of September, 2024.
AoATTEST:
Alondra Munoz, City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF HIGHLAND
Larry McCallon, Mayor Pro Tern
I, Alondra Munoz, City Clerk of the City of Highland, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting provided by law of the City of Highland held on the 10th day of September, 2024, by the following vote of the members thereof:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
14 ATTACHMENT - 3
Housing Authority Resolution No. -
with Second Amendment of Ground Lease, and
First Amendment of Regulatory Agreement
15 HIGHLAND HOUSING AUTHORITY
RESOLUTION NO. 2024 -
A RESOLUTION OF THE HIGHLAND HOUSING AUTHORITY APPROVING A SECOND
AMENDMENT OF GROUND LEASE BY AND AMONG THE HIGHLAND HOUSING
AUTHORITY AND HOUSING VENTURE I, AND FIRST AMENDMENT TO REGULATORY
AGREEMENT BETWEEN THE HIGHLAND HOUSING AUTHORITY, CITY OF HIGHLAND,
AND HOUSING VENTURE I, AND MAKING A FINDING OF EXEMPTION UNDER THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT
7367 Central Avenue)
WHEREAS, California Health and Safety Code Sections 33334. 2 and 33334. 6 formerly authorized and directed the Highland Redevelopment Agency ( the " Former Agency") to expend a certain percentage of all taxes which are allocated to the Redevelopment Agency pursuant to Section 33670 of the California Health and Safety Code for the purposes of increasing, improving and preserving the community' s supply of low and moderate income housing available at affordable housing cost to persons and families of low- and moderate - income, lower income, and very low income; and
WHEREAS, pursuant to applicable law the Former Agency established a Low and Moderate Income Housing Fund and acquired certain property, including the Property identified below, with the purpose of using such property for the provision of affordable housing; and WHEREAS, the Former Agency and Housing Ventures I (" Lessee") entered into that certain unrecorded Ground Lease dated as of March 27, 1998 ( the " Original Ground Lease"), pursuant to which the Former Agency leased to Lessee, and Lessee leased from the Former Agency, an approximately 7. 21 acre site situated in the County of San Bernardino, California, commonly known as 7367 Central Avenue, as more particularly described in Attachment No. 1 hereto ( the " Property"). A memorandum of lease as to the Original Ground Lease was recorded as Document No. 19980115451 among the official land records of the San Bernardino County Recorder. The Original Ground Lease was entered into pursuant to that certain unrecorded Amended and Restated Disposition and Development Agreement dated as of March 27, 1998 by and among the Former Agency, Lessee and the City of Highland ( the " Original DDA"), a copy of which is on file with the Highland Housing Authority as a public record. The term of the Original Lease commenced as of March 27, 1998 ( the " Commencement Date"). A First Amendment to the Ground Lease was also entered into on March 27, 1998, The Original Ground Lease and First Amendment to the Ground Lease will be referred to collectively as the Lease"; and
WHEREAS, the Former Agency, the City, and Lessee entered into that certain Regulatory Agreement dated March 27, 1998, which was recorded in the Official Records of San Bernardino County as Document No. 19980115 on March 30, 1998 (" Regulatory Agreement"); and
WHEREAS, pursuant to Health and Safety Code Section 34175( b), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the Former Agency transferred to the control of the Successor Agency to the Highland 16 Redevelopment Agency ( the " Successor Agency") by operation of law including housing assets; and
WHEREAS, pursuant to Health and Safety Code Section 34176( b), the City Council adopted Resolution No. 2012- 005, electing for the City not to retain the housing functions previously performed by the Former Agency, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former Agency be transferred to the Highland Housing Authority as Housing Successor (" Housing Authority"). The Housing Authority, sometimes referred to as Lessor, is therefore authorized to manage remaining assets of the Former Agency and expend remaining Former Agency funds designated for the development of housing affordable for persons of low and moderate income in accordance with State law. The Property is identified as an asset of the Former Agency that was transferred to the Housing Authority; and WHEREAS, the Housing Authority, Lessee and the City amended the Original DDA by that certain unrecorded " First Amendment to Amended and Restated Disposition and Development Agreement" dated as of November 10, 2015 ( the " First Amendment to the DDA"), and as part of said First Amendment to the DDA, the parties thereto amended certain terms of the Lease, all as more particularly set forth on said First Amendment to the DDA; and WHEREAS, the Housing Authority, Lessee and City entered into a Memorandum of Agreement dated November 10, 2015 to evidence a record of the amendment to the Lease, which was recorded on December 2, 2015 as Document No. 2015- 0524128 in the official records of San Bernardino County; and
WHEREAS, the Property is improved with a 184 unit multifamily housing apartment for seniors and one ( 1) manager' s unit commonly known as Jeffery Court (" Project"). Lessee desires to refinance certain debt secured by the Lease and obtain sufficient loan and/ or equity funds to make certain repairs and improvements to the Project. Lessee has requested that Lessor enter into a Second Amendment of the Ground Lease (" Second Amendment") to allow the Lessor to make certain improvements; and
WHEREAS, Lessee requires as a condition to its refinancing loan that the term of the Lease, as previously amended, be extended so that it has a fifty-five ( 55) year term from the closing of the refinancing loan; and
WHEREAS, the improvements will improve the Project for the benefit of its existing and future low- income residents. In addition, Lessee has agreed to extend the affordability covenants for an additional 26 years that will be memorialized in a First Amendment of the Regulatory Agreement ("Amended Regulatory Agreement"); and WHEREAS, the Housing Authority has made available to the public through the office of the Secretary of the Board a copy of the Second Amendment, the Lease, the Regulatory Agreement and the Amended Regulatory Agreement prior to the public hearing. In addition, a copy of the Health and Safety Code section 33433 report ( the " Report") was made available to the public. The Report describes the salient feature of the Second Amendment. The Report is incorporated herein by this reference; and
WHEREAS, the governing board of the Housing Authority has reviewed the Report and has evaluated other information provided to it pertaining to the findings proposed to be made hereunder; and
11a
17 WHEREAS, notice of the public hearing to consider the Second Amendment and Amended Regulatory Agreement was published once a week for two weeks ( on August 23, 2024 and August 30, 2024) in a newspaper of general circulation; and WHEREAS, on September 10, 2024, the governing board of the Housing Authority held a duly noticed public hearing on the proposed Second Amendment and Amended Regulatory Agreement, at which time the Housing Authority reviewed and evaluated all of the information, testimony, and evidence presented during the public hearing; and WHEREAS, all actions required by all
Second Amendment and Amended Regulatory
and timely manner; and
applicable law with respect to the proposed
Agreement have been taken in an appropriate
WHEREAS, the Housing Authority has duly considered all of the terms and conditions of the proposed Second Amendment and Amended Regulatory Agreement and believes that is in the best interests of the Housing Authority and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements; and
WHEREAS, Housing Authority staff contacted the Housing Accountability Unit of the Housing and Community Development Department of the State of California (" HCD") to confirm that the lease extension is not a disposition under the Surplus Land Act. HCD confirmed that the lease extension does not trigger the Surplus Land Act.
NOW, THEREFORE, THE HIGHLAND HOUSING AUTHORITY DOES RESOLVE AS FOLLOWS:
Section 1. The Housing Authority finds and determines that the statements set forth in the Recitals above are true and correct.
Section 2. The Housing Authority authorizes and directs its Executive Director, or his designee, to execute the Second Amendment and Amended Regulatory Agreement, including without limitation such attachments thereto to be executed on behalf of the Housing Authority, and to take such actions as are necessary or convenient to implement the Second Amendment and Amended Regulatory Agreement.
Section 3. The Housing Authority hereby approves the Second Amendment and the Amended Regulatory Agreement and authorizes and directs the Executive Director, for and in the name and on behalf of the Housing Authority, to finalize, execute and deliver the Second Amendment and the Amended Regulatory Agreement in substantially the form on file with the Secretary of the Board and presented at this meeting, with such additions thereto or changes or insertions therein as may be approved by the Executive Director ( such approval to be conclusively evidenced by such execution and delivery).
Section 4. The Housing Authority hereby finds that the lease extension is exempt from further environmental review under CEQA Guidelines Section 15301 which provides an exemption for the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. Here, the 18 Property is already improved with an apartment complex. The Second Amendment and Amended Regulatory Agreeemnt will allow the Lessee to upgrade the existing plumbing facilities which involves no expansion of the existing use. In addition, the Project is exempt pursuant to CEQA Guidelines Section 15061( b)( 3) which provides a common sense exemption in that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.
As the Property is already improved with an apartment complex, and only minor improvements will be made to the apartment, there is no possibility that the lease extension or extension of the regulatory agreement will have a significant effect on the environment. The Housing Authority hereby directs the Executive Director to file a Notice of Exemption with the County Clerk of the Board.
Section 5. The Executive Director and Vice Chairman of the Housing Authority are hereby authorized and directed, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper in order to effectuate the purposes of this Resolution and the transaction contemplated hereby; and any such actions previously taken by such officers are hereby ratified, confirmed and approved.
APPROVED AND ADOPTED this 10th day of September, 2024.
Larry McCallon, Vice Chairman
ATTEST:
Alondra Munoz, Authority Secretary
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF HIGHLAND
I, Alondra Munoz, Secretary of the Highland Housing Authority, do hereby certify that the foregoing Resolution No. was introduced and adopted at a regular meeting provided by law of the Highland Housing Authority held on the 10th day of September, 2024, by the following vote of the members thereof:
AYES: AUTHORITY MEMBERS:
NOES: AUTHORITY MEMBERS:
ABSENT: AUTHORITY MEMBERS:
ABSTAIN: AUTHORITY MEMBERS:
LI
19 RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
Highland Housing Authority
27215 Base Line
Highland, CA 92346
Attn: Carlos Zamano, Executive Director
with a copy to:
Housing Venture I
19700 Fairchild, Suite 130
Irvin, CA 92612
Attn: M. David Packard
SPACE ABOVE THIS LINE FOR RECORDER' S USE
SECOND AMENDMENT OF GROUND LEASE
This SECOND AMENDMENT OF GROUND LEASE (" Second Amendment") is dated as of , 2024, and is entered into by and between the HIGHLAND HOUSING AUTHORITY, a public body corporate and politic (" Lessor" or " Housing Authority"), and HOUSING VENTURE I, a California limited partnership (" Lessee").
RECITALS
A. The Highland Redevelopment Agency (" Former Agency") and Lessee entered into that certain unrecorded Ground Lease dated as of March 27, 1998 ( the " Original Ground Lease"), pursuant to which the Former Agency leased to Lessee, and Lessee leased from the Former Agency, an approximately 7. 21 acre site situated in the County of San Bernardino, California, commonly known as 7367 Central Avenue, as more particularly described in Attachment No. 1 hereto ( the " Property"). A memorandum of lease as to the Original Ground Lease was recorded as Document No. 19980115451 among the official land records of the San Bernardino County Recorder. The Original Ground Lease was entered into pursuant to that certain unrecorded Amended and Restated Disposition and Development Agreement dated as of March 27, 1998 by and among the Former Agency, Lessee and the City ( the " Original DDA"), a copy of which is on file with Lessor as a public record. The term of the Original Lease commenced as of March 27, 1998 ( the " Commencement Date"). A First Amendment to the Ground Lease was also entered into on March 27, 1998. The Original Ground Lease and First Amendment to the Ground Lease will be referred to collectively as the " Lease."
B. Pursuant to Health and Safety Code Section 34175( b), on February 1, 2012, all assets, properties, contracts, leases, books and records, buildings, and equipment of the Former Agency transferred to the control ofthe Successor Agency to the Highland Redevelopment Agency the " Successor Agency") by operation of law including housing assets. 1-
11026-0001 \3008713v 1. doc
20 C. Pursuant to Health and Safety Code Section 34176( b), the City Council adopted Resolution No. 2012- 005, electing for the City not to retain the housing functions previously performed by the Former Agency, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former Agency be transferred to the Highland Housing Authority as Housing Successor. The Housing Authority is therefore authorized to manage the remaining assets of the Former Agency and expend remaining Former Agency funds designated for the development of housing affordable for persons of low and moderate income in accordance with State law. The Property is identified as an asset of the Former Agency that was transferred to the Housing Authority.
D. The Housing Authority ( sometimes referred to as " Lessor"), Lessee and the City amended the Original DDA by that certain unrecorded " First Amendment to Amended and Restated Disposition and Development Agreement" dated as of November 10, 2015 ( the " First Amendment to the DDA"), and as part of said First Amendment to the DDA, the parties thereto amended certain terms ofthe Lease, all as more particularly set forth on said First Amendment to the DDA.
E. The Housing Authority, Lessee and City entered into a Memorandum of Agreement dated November 10, 2015 to evidence a record ofthe amendment to the Lease, which was recorded on December 2, 2015 as Document No. 2015- 0524128 in the official records of San Bernardino County.
F. Lessee desires to refinance certain debt secured by the Lease and obtain loan funds to make certain repairs and improvements described on Exhibit " A" hereto ( the " Required Improvements") to the apartment project that is subject to the Lease.
G. The refinancing lender ( East- West Bank) requires as a condition to its refinancing loan that the term of the Lease, as previously amended, be extended so that it has a fifty- five ( 55) year term from the closing of the refinancing loan.
H. The Required Improvements will improve the Property for the benefit of its low income residents. Consequently, Lessor desires to agree to extend the term of the Lease as required by the refinancing lender as a condition to its loan.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and covenants hereof and other consideration, the sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Extension of Term of Lease. Effective as of the date of recording of this Second Amendment, the term of the Lease is extended to the date that is fifty-five (55) years thereafter.
2. Rehabilitation Work; Deadline for Completion. The Required Improvements shall be completed within nine ( 9) months from the date of the closing of the refinancing loan and the concurrent recording of this Ground Lease Amendment, subject to delays beyond the control of Lessee ( excluding not having adequate funds to complete). A default by Lessee under the foregoing shall be a default under the Lease.
2-
11026- 0001\ 3008713v Ldoc
21 IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the day and year first above written.
LESSOR:
HIGHLAND HOUSING AUTHORITY,
a public body, corporate and politic
Carlos Zamano
Executive Director
LESSEE:
HOUSING VENTURE I, A CALIFORNIA LIMITED
PARTNERSHIP
By: AHA Inland MGP, LLC,
a California limited liability company
Managing General Partner
By: Affordable Housing Access, Inc.,
a California nonprofit public benefit
corporation, Sole Member and Manager
go
William Hirsch
Chief Executive Officer
By: JC GP, Inc., a California corporation
Operating General Partner
Mark B. David
Secretary
3-
1 1026- 0001\ 3008713v 1. doc
22 EXHIBIT " A"
DESCRIPTION OF REQUIRED IMPROVEMENTS
Attached.)
11026- 0001 \3008713v I. doc
23 EXHIBIT A
to Second Amendment of Ground Lease)
REQUIRED IMPROVEMENTS
24 LANDMARK
COMPANIES LLC
September 3, 2024
Mr. Lawrence A. Mainez
Community Development Director
Housing Authority Assist Executive Director
27215 Base Line
Highland, CA92346
Re: Jeffrey Court Ground Lease 2" d Amendment Update
Dear Mr. Mainez,
Attached please find Exhibit A— Description of Required Improvements.
We agree with the effective date being concurrent with the funding of the new loan.
We anticipate all work being concluded in six to nine months of closing of the refinancing loan, subject to delays beyond the control of Housing Venture I.
If you have any questions, please do not hesitate to contact me.
Regards,
Richard H. Packard
GP of Richard H. Packard Family
Limited Partnership, Managing Member
of Housing Venture I, LP
19700 FAIRCHILD SUITE 130 IRVINE, CA 92612 949/ 640- 5040 FAX 949/ 679- 1578 25 LANDMARK
COMPANIES LLC
Sage $ 1, 846, 444. 00
Turnkey Proposal - No New Water Heaters or Shower Valves 24 Hour Express $ 1, 919, 160. 00
Includes New Water Heaters, Shower Valves
Does not Include DrywalUPaint
Redland Plumbing 2, 309, 126. 00
No Paint- No New Water Heaters or Shower Valves
Permit Estimate $ 200 p/ unit 36, 800. 00
Code Upgrades Estimate $ 200 p/ unit 36, 800. 00
Fire Sprinkler Rep
Change Order Cost Due to Current Conditions 20, 000. 00 Drywall Repairs
120, 000. 00
Total Using24 Hour Express 1, 919, 160. 00
Paint
92, 000. 00
Permits & Code 73, 600. 00
Fire Sprinkler Adds 140, 000. 00
2, 224, 760. 00
5% Contingency 111, 238. 00
Total
2, 335, 476. 00
19700 FAIRCHILD • SUITE 130 IRVINE, CA 92612 949/ 640- 5040 FAX 949/ 679- 1578 26 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On , before me,
insert name and title ofthe officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
2-
11026- 000113008713v1. doc
27 CALIFORNIA ALL- PURPOSE, ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/ their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
3-
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28 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/her/their authorized capacity( ies), and that by his/her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
4-
11026- 0001\ 3008713vLcloc
29 RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
Highland Housing Authority
27215 Base Line
Highland, CA 92346
Attn: Carlos Zamano, Executive Director
with a copy to:
Housing Venture I
19700 Fairchild, Suite 130
Irvine, CA 92612
Attn: M. David Packard
SPACE ABOVE THIS LINE FOR RECORDER' S USE
FIRST AMENDMENT OF REGULATORY AGREEMENT
This FIRST AMENDMENT OF REGULATORY AGREEMENT (" Amendment") is dated as of , 2024, and is entered into by and between the HIGHLAND HOUSING AUTHORITY, a public body corporate and politic (" Lessor" or " Housing Authority"), the CITY OF HIGHLAND, a California municipal corporation (" City") and HOUSING VENTURE I, a California limited partnership (" Lessee").
RECITALS
A. The Highland Redevelopment Agency (" Former Agency") and Lessee entered into that certain unrecorded Ground Lease dated as of March 27, 1998 ( the " Original Ground Lease"), pursuant to which the Former Agency leased to Lessee, and Lessee leased from Lessor, an approximately 7. 21 acre site situated in the County of San Bernardino, California, commonly known as 7367 Central Avenue, as more particularly described in Attachment No. 1 hereto ( the Property"). A memorandum of lease as to the Original Ground Lease was recorded as Document No. 19980115451 among the official land records of the San Bernardino County Recorder. The Original Ground Lease was entered into pursuant to that certain unrecorded Amended and Restated Disposition and Development Agreement dated as of March 27, 1998 by and among the Former Agency, Lessee and the City of Highland ( the " Original DDA"), a copy of which is on file with Lessor as a public record. The term of the Original Lease commenced as of March 27, 1998 ( the Commencement Date"). A First Amendment to the Ground Lease was also entered into on March 27, 1998. The Original Ground Lease and First Amendment to the Ground Lease will be referred to collectively as the " Lease".
B. The Former Agency, the City, and Lessee entered into that certain Regulatory Agreement dated March 27, 1998, which was recorded in the Official Records of San Bernardino County as Document No. 19980115 on March 30, 1998 (" Regulatory Agreement"). 1-
11026- 0001\ 2838658vLdoc
30 C. The Housing Authority has succeeded to the assets of the former Highland Redevelopment Agency, including the rights of the former Highland Redevelopment Agency in, under and to the Regulatory Agreement.
D. The Housing Authority, Lessee and the City amended the Original DDA by that certain unrecorded " First Amendment to Amended and Restated Disposition and Development Agreement" dated as of November 10, 2015 ( the " First Amendment to the DDA"), and as part of said First Amendment to the DDA, the parties thereto amended certain terms of the Lease, all as more particularly set forth on said First Amendment to the DDA.
E. The Housing Authority, Lessee and the City entered into a Memorandum of Agreement dated November 10, 2015 to evidence a record of the amendment to the Lease, which was recorded on December 2, 2015 as Document No. 2015- 0524128 in the official records of San Bernardino County.
F. The Property is improved with a 184 unit multifamily housing apartment for seniors and one ( 1) manager' s unit commonly known as Jeffery Court (" Project"). Lessee desires to refinance certain debt secured by the Lease and obtain sufficient loan and/ or equity funds to make certain repairs and improvements to the Project. Lessee has requested that Lessor enter into a Second Amendment of the Ground Lease (" Second Amendment") to allow the Lessor to make certain improvements.
G. The refinancing lender ( East- West Bank) requires as a condition to its refinancing loan that the term of the Lease, as previously amended, be extended so that it is fifty- five ( 55) years from the date of the closing of the refinancing loan.
H. Concurrently herewith, the Housing Authority and Lessee are entering into and recording a Second Amendment of Ground Lease to extend the Lease.
I. The City and the Housing Authority require that the Regulatory Agreement also be extended so the date that is fifty- five ( 55) years from the date of the closing of the refinancing loan.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and covenants hereof and other consideration, the sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as follows:
1. Extension of Term of Regulatory Agreement. Effective as of the date of recording of this Amendment, the term of the Regulatory Agreement is extended to the date that is fifty-five 55) years from the date of recording of this Amendment, and the term " Affordability Period" used in the Regulatory Agreement shall mean such fifty- five ( 55) year period, and the phrase " as defined in the DDA" is deleted from Article VI, Section 3 ofthe Regulatory Agreement.
2. Delivery/ Recording of Amendment. This Amendment is being delivered by Lessor to the escrow for the refinancing loan, with escrow instructions, for recording prior to the deed of trust securing such loan.
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31 IN WITNESS WHEREOF, the parties hereto have entered into this Amendment as of the day and year first above written.
HOUSING AUTHORITY/LESSOR:
HIGHLAND HOUSING AUTHORITY,
a public body, corporate and politic
Carlos Zamano
Executive Director
LESSEE:
HOUSING VENTURE I,
a California limited partnership
By: AHA Inland MGP, LLC,
a California limited liability company
Managing General Partner
By: Affordable Housing Access, Inc.,
a California nonprofit public benefit
corporation, Sole Member and Manager
C
William Hirsch
Chief Executive Officer
By: JC GP, Inc., a California corporation
Operating General Partner
go
CITY:
Mark B. David
Secretary
CITY OF HIGHLAND
Carlos Zamano
City Manager
3-
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32 CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity ofthe individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On , before me, ,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/their authorized capacity( ies), and that by his/ her/ their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
0 11026- 0001\ 2838658v Ldoc
33 CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On , before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
5-
11026- 0001 \ 2838658v l .doc
34 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/their authorized capacity( ies), and that by his/her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
6-
1 1026- 0001\ 2838658v Ldoc
35 CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of
On , before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/ their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature Seal)
7-
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36