Hollister City Council
February 18, 2025

Resolution No. 2025-XX

Grounds for Denial

The City Council may reject a regulatory permit upon making any of the following findings, none of the following required findings were made t o warrant the rejection of a regulatory permit:

1. Any applicant made one or more false or misleading statements or omissions on the registration application or during the application process;

2. If applicable, the applicant is not a primary caregiver, qualified patient, or the legal representative of the cannabis facility;

3. The applicant fails to meet the requirements of this Chapter or any regulation adopted pursuant to this Chapter;

4. The cannabis facility or its location is in violation of any building, zoning, health, safety, or other provision of this code, or of any state or local law which substantially affects the public health, welfare, safety, or morals, or the facility or its location is not permitted in the proposed area, or the issuing or continuation of a regulatory permit would be contrary to the public health, welfare, safety, or morals;

5. Any applicant, manager, or employee of the cannabis facility is under eighteen (18) years of age;

6. Any applicant has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, except that if the licensing authority determines that the applicant is otherwise suitable to be issued a permit and granting the permit would not compromise public safety, the licensing authority shall conduct a thorough review of the nature of the crime, conviction, circumstances, and evidence of rehabilitation of the applicant, and shall evaluate the suitability of the applicant to be issued a permit based on the evidence found through the review process. In determining which offenses are substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, the licensing authority shall include, but not be limited to, the following:

a. A felony conviction for the illegal possession for sale, manufacture, transportation, or cultivation of a controlled substance.

b. A violent felony conviction, as specified in subdivision (c) of Section

667.5 of the Penal Code.

c. A serious felony conviction, as specified in subdivision (c) of Section 1192.7 of the Penal Code.

Resolution No. 2025-XX

d. A felony conviction involving fraud, deceit, or embezzlement.

7. Any applicant or manager of the medical cannabis facility is a licensed physician making patient recommendations for medical cannabis.

8. Any applicant or manager has been sanctioned by a licensing authority or a city, county, or city and county for unlicensed operation of a medical cannabis facility or has had a license revoked under this Chapter in the three years immediately preceding the date the application is filed with the licensing authority.

9. The applicant did not pay the City the required application and processing fees as set forth in Section 5.42.080

BE IT FURTHER RESOLVED that the City Council of the City of Hollister hereby approves and authorizes staff to renew the regulatory permit for Euphoric Life Inc. located at 807 Industrial Drive to continue to operate a cannabis distribution facility.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 18, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

Resolution No. 2025-XX

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on February 18, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # City Clerk-2025-10

AGENDA ITEM: AN ORDINANCE ADDING SECTION 1.10.060 (PROCESSING CLAIMS) TO CHAPTER 1.10 (CLAIMS PURSUANT TO GOVERNMENT CODE SECTION 935) OF TITLE 1 (GENERAL PROVISIONS) OF THE HOLLISTER

MUNICIPAL CODE

DEPARTMENT: City Clerk
DEPARTMENT HEAD: Jennifer Woodworth, City Clerk
STAFF CONTACT: Angie Gonzalez, Deputy City Clerk

RECOMMENDED ACTION: Hold a public hearing and introduce an ordinance to amend Hollister Municipal Code, Chapter 1.10 - Claims Pursuant to Government Section 935 to add Section 1.10.060 – Processing of claims against the city

DISCUSSION: During the normal course of business, the City of Hollister experiences claim for damage or injuries filed:

Under the Tort Claim Act
Through litigation not covered by the Tort Claim Act
Under Workers' Compensation System

In addition, the City files claims against insurance companies or individuals for damage or injuries incurred to City property or employees caused by an outside party.

Government Code § 935.4 provides that delegation of authority to an employee of a General Law City shall not exceed fifty thousand dollars ($50,000).

The current process for claims filed against the City of Hollister is that all claims must be considered by the City Council in order to accept or reject the claim. In order to increase operational efficiencies, staff recommends delegating the following authority to the City Manager, or his or her designee:

Determine timelines and sufficiency of claims filed under the Tort Claim Act Rejection authority for all claims
Settle any claim that is valued at $25,000 or less

Decisions regarding the handling of claims would be made by the City Manager, or his or her designee, in consultation with the City’s insurance adjuster and City Attorney’s Office.

This will allow for more timely responses to claimants, increased efficiency when accepting payments for claims made by the city, etc.

FISCAL IMPACT: There are no additional savings or costs associated with the adoption of the ordinance.

PREVIOUS COUNCIL OR COMMISSION ACTION: None.

CEQA: N/A

ATTACHMENTS:

1. Draft Ordinance

ORDINANCE NO. XXXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HOLLISTER ADDING SECTION 1.10.060 (PROCESSING CLAIMS) TO CHAPTER

1.10 (CLAIMS PURSUANT TO GOVERNMENT CODE SECTION 935) OF TITLE 1 (GENERAL PROVISIONS) OF THE HOLLISTER MUNICIPAL CODE

WHEREAS, the City of Hollister is a member of the Monterey Bay Area Self Insurance Authority (MBASIA) and works with a third party administrator to administer the City’s liability claims; and

WHEREAS, the City seeks to increase operational efficiencies when filing a claim; and

WHEREAS, Government Code Sections 935.2, the City Council may authorize an employee to allow, compromise, or settle claims against the City of Hollister; and

NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Hollister does hereby ordain as follows:

Section 1. Amend Hollister Municipal Code, Chapter 1.10 - Claims Pursuant to Government Section 935 to add Section 1.10.060 to read as follows:

1.10.060 - Processing of claims against the city.

A. The City Manager, or his or her designee, shall act on all claims filed against the city as specified in Government Code Section 900 et seq.

B. The City Manager, or his or her designee, and with the concurrence of the City Attorney, shall be authorized to allow, allow in part, compromise, settle, or reject, without prior approval of the City Council, claims against the city provided that no authority is given to allow, allow in part, compromise, or settle any such claim if the amount to be paid pursuant to such allowance, compromise, or settlement exceeds twenty-five thousand dollars ($25,000.00).

If the City Manager and the City Attorney do not agree to allow, allow in part, compromise, settle, or reject any claim against the city, said claim will be brought to the City Council for its authorization to allow, allow in part, compromise, settle or reject it.

C. Upon written order of the City Manager, or his or her designee, and with concurrence of the City Attorney, the Administrative Services Director shall cause to be issued a warrant upon the treasury of the city in the amount for which a claim has been allowed, allowed in part, compromised, or settled. The city council shall be notified within ten (10) days of the acceptance or rejection of any claim pursuant to this section and within ten (10) days of the claimant's acceptance of any settlement proposed pursuant to this section.

Ordinance No. XXXX

SECTION 2. SEVERABILITY. If any part of this Ordinance is held invalid for any reason by a court of competent jurisdiction, such decision shall not affect the validity of the remaining portion of this Ordinance, and the City Council hereby declares that it would have passed the remainder of the Ordinance if such invalid portion thereof had been deleted.

SECTION 3. EFFECTIVE DATE. This ordinance shall take effect and be in force thirty (30) days from and after its final passage.

SECTION 4. PUBLICATION. Within fifteen (15) days after passage, the City Clerk shall cause this ordinance to be published in a newspaper of general circulation.

INTRODUCED at a regular City Council meeting on February 18, 2025 and ADOPTED as an ordinance of the City of Hollister at a regular City Council meeting on February 18, 2025 by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

________________________________
Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

______________________________ _______________________________ Jennifer Woodworth, MMC, City Clerk Mary Lerner, City Attorney

I, JENNIFER WOODWORTH, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Ordinance No. XXXX is an original ordinance, or true and correct copy of a City ordinance, duly adopted by the Council of the City of Hollister at a regular meeting of said Council held on February 18, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # Public Works-2025-17

AGENDA ITEM: A RESOLUTION APPROVING THE URBAN AREA WATER

MASTER PLAN TERM SHEET AND AUTHORIZING THE CITY MANAGER TO

NEGOTIATE A CONTRACT WITH THE URBAN AREA MEMBER AGENCIES

DEPARTMENT: Public Works
DEPARTMENT HEAD: William Via, Public Works Director
STAFF CONTACT: William Via, Public Works Director

RECOMMENDED ACTION: Adopt a resolution approving the Term Sheet related to the financing of the Accelerated Drought Response Project (ADRoP) and the Addition of San Juan Bautista to the Hollister Urban Area Water Supply and Treatment Agreement (Term Sheet) and authorize the City Manager to negotiate a contract with the Urban Area member agencies.

DISCUSSION: The Hollister Urban Area Water and Wastewater Master Plan (Master Plan) was first completed in 2008, updated in 2017, and again in 2023. The Master Plan provides a long-term vision for water, wastewater, and recycled water management actions and infrastructure improvements to address water quality concerns and improve water supply reliability. The Master Plan also identifie s the need for the region to begin preliminary work toward the development of additional long-term water supplies to serve the region in times of drought. All projects identified in the 2008 Master Plan and 2017 Master Plan update have since been completed, and we are now in the process of implementing the 2023 recommendations as described below.

In August of 2021, San Benito County Water District (SBCWD), Sunnyslope County Water District (SSCWD), City of Hollister, City of San Juan Bautista, and the County of San Benito Entered into a Memorandum of Understanding (MOU) agreeing to update the Master Plan in order to confirm water demand forecasts, identify preferred long term water supply options, and incorporate San Juan Bautista into the urban water supply planning. At the time of entering the MOU, the City of Hollister had begun a City General Plan Update and was addressing LAFCO issues related to wastewater services. As a result, the MOU states that the update will primarily address water supply. W astewater effluent compliance goals are directly affected by water supply issues. The water quality goals found in the Master Plan update are meant to ensure wastewater salinity targets are met so that residents receive satisfactory water quality and to further ensure that fines and penalties from the Water Resources Control Board are avoided.

The 2023 Master Plan update presents a series of projects, as well as the alternatives considered, to achieve a reliable supply of high -quality water to the residents of the urban areas in San Benito County. A key near-term project is the Accelerated Drought Resiliency Project, referred to as ADRoP. This project is needed to improve the reliability of water supplies for existing residents during drought conditions. ADRoP consists of the expansion of the West Hills Water Treatment Plant, conveyance

pipelines, and the installation of 5 aquifer storage and recovery wells near Fallon Road.

The City and SSCWD previously provided letters of support for the project for inclusion in grant applications, three of which have been awarded, totaling an estimated amount of $20 Million in State and Federal grants.

The environmental documentation for this project expressly prohibits its use to accommodate future growth.

SBCWD anticipates issuing bond debt to cover the remaining capital costs for ADRoP and City Council approval of the Term Sheet will assist in issuing these bonds. The attached Term Sheet represents the proposed terms for this financing and includes the addition of San Juan Bautista to the Hollister Urban Area Water Supply and Treatment Agreement (Agreement). If approved, the Term Sheet will be used to draft contract language for amendments to the Agreement, which will be brought back to the parties for consideration later this year.

FISCAL IMPACT: ADRoP will be funded by a Water Reliability Charge that is included in the Raw Water Charge for water treated at the water treatment plants (Lessalt Water Treatment Plant and West Hills Water Treatment Plant) and delivered to City of Hollister, Sunnyslope County Water District, and San Juan Bau tista customers. The current reliability charge is $175 per acre foot of water (325,851 gallons) and will decrease to $132 per acre foot in March 2025. Currently, this amounts to about $230,000 per year for the City from the Water Enterprise Fund (620), depending on the amount of surface water used.

PREVIOUS COUNCIL OR COMMISSION ACTION: None.

CEQA: The Term Sheet does not represent a project under CEQA.

ATTACHMENTS:

1. Resolution

2. Term Sheet

3. SBCWD Staff Presentation

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING THE URBAN AREA WATER MASTER PLAN TERM SHEET

AND AUTHORIZING THE CITY MANAGER TO NEGOTIATE A

CONTRACT WITH THE URBAN AREA MEMBER AGENCIES

WHEREAS, the Hollister Urban Area Water and Wastewater Master Plan (Master Plan) was first completed in 2008 and updated in 2017 and 2023; and

WHEREAS, the Master Plan provides a long-term vision for water, wastewater, and recycled water management actions and infrastructure improvements to address water quality concerns and improve water supply reliability; and

WHEREAS, the Master Plan identifies the need for the region to begin preliminary work toward the development of additional long-term water supplies to serve the region in times of drought; and

WHEREAS, in August of 2021, San Benito County Water District (SBCWD), Sunnyslope County Water District (SSCWD), the City of Hollister, the City of San Juan Bautista, and the County of San Benito Entered into a Memorandum of Understanding (MOU) agreeing to update the Master Plan in order to confirm water demand forecasts, identify preferred long term water supply options, and incorporate San Juan Bautista into the urban water supply planning; and

WHEREAS, wastewater effluent compliance goals are directly affected by water supply issues; and

WHEREAS, the water quality goals found in the Master Plan update are meant to ensure wastewater salinity targets are met so that residents receive satisfactory water quality and to further ensure that fines and penalties from the Water Resources Control Board are avoided; and

WHEREAS, the key near-term project is the Accelerated Drought Resiliency Project, referred to as ADRoP; and

WHEREAS, the environmental documentation for this project expressly prohibits its use to accommodate future growth; and

WHEREAS, the Term Sheet represents the proposed terms for financing the project and includes the addition of San Juan Bautista to the Hollister Urban Area Water Supply and Treatment Agreement; and

WHEREAS, the approval of the Term Sheet will assist SBCWD with issuing bonds to fund the project; and

Resolution No. 2025-XX

WHEREAS, the Term Sheet will be used to draft contract language for amendments to the Agreement.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hollister hereby approves;

1. The Urban Area Water Master Plan Term Sheet; and

2. Authorizes the City Manager to negotiate a contract with the Hollister Urban Area Member Agencies.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 18, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on February 18, 2025at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

Hollister Urban Area 1
Financing of HUA Water Supply and Treatment Facilities January 2025 202270111811.149

TERMS SHEET

FOR FINANCING OF ADROP AND

THE ADDITION OF SAN JUAN BAUTISTA TO THE

HOLLISTER URBAN AREA

WATER SUPPLY AND TREATMENT AGREEMENT
(1/2025)

This Term Sheet summarizes the principal terms and conditions for San Benito County Water District (SBCWD) to add the City of San Juan Bautista (SJB) as a partner to the Hollister Urban Area Water Supply and Treatment Agreement, and to further a project to provide water supply reliability during drought years.

This Term Sheet shall be non-binding and is conditioned on the completion of negotiations for the 2nd amended Water Supply and Treatment Agreement (Agreement), legal review, and associated documentation that is satisfactory to all parties.

San Juan Bautista
 The transmission pipeline to SJB will be treated as a separate project and will be addressed outside of this Agreement.
 SJB will purchase XX percent of the treatment capacity of the combined Lessalt and West Hills treatment plants.
 SJB will pay for XX percent of the capacity for Tranches 1-3 on the same terms and schedule as City of Hollister (COH) and Sunnyslope County Water District (SSCWD).  SJB’s repayment schedule will be accelerated to match the final repayment dates of COH and SSCWD.
 SJB will pay the relative percentage of the treatment capacity purchased into the to date total of the Capital Replacement Reserve.
 COH and SSCWD will receive a credit to their respective repayment balances of Tranches 1-3 based on the amount of treatment capacity SJB purchases.  SBCWD will recalculate the amortization schedules for Tranches 1-3 for COH and SSCWD such that the final repayment dates remain the same with adjusted annual payments.  SBCWD will suspend collections for the Capital Replacement Reserve for COH and SSCWD until the amount credited to COH and SSCWD from SJB’s purchase of treatment capacity is depleted.

Hollister Urban Area 2
Financing of HUA Water Supply and Treatment Facilities January 2025 202270111811.149

 Fixed costs for operation of Lessalt and West Hills will be allocated to COH, SSCWD, and SJB based on their respective treatment capacity.
 Variable costs of treatment for Lessalt and West Hills will be aggregated and charged to COH, SSCWD, and SJB based on the amount of finished water delivered to each party.  All other provisions of the Water Supply and Treatment Agreement will remain in place with the addition of SJB as an equal party.
 SBCWD will contribute to SJB a non-reimbursable amount to the purchase of treatment capacity equal to the amount SBCWD contributed to COH and SSCWD based on the amount of treatment capacity purchased.

ADRoP
Financing
 SBCWD has received $20,000,000 in grant funding for the construction of the ADRoP project.  At SBCWD’s option SBCWD will either seek bond sales or pay from undesignated reserves for the remainder of the construction costs.
 If bonds are issued SBCWD will only charge M&I water for the principal portion of the bond payments for the remaining capital costs of construction. SBCWD will pay the interest portion.  Payments for the remaining capital costs of construction either through bonds issuance or from District reserves will be through a “reliability fee” for all M&I water sold on a per acre foot basis until the debt is retired. This will include District customers outside of the Urban Area as they will also benefit from the ADRoP project.

Operation
 Wet year water will be treated and injected into the aquifer for later recovery during dry and critically dry years.
 Recovery may occur over multiple years depending on conditions and the amount of water previously stored.
 SBCWD will pay for the raw water cost and hold the variable cost of treatment for all water injected and stored until such water is recovered and delivered to the District customers.

Hollister Urban Area 3
Financing of HUA Water Supply and Treatment Facilities January 2025 202270111811.149

 All water recovered will be aggregated with all other M&I water supplies for the given year of recovery such that regardless of which customer received the water all beneficiaries of the increased water supply will pay.
 SBCWD acknowledges that COH wells and conveyance facilities will be needed to convey water to the ADRoP well field. SBCWD will work with COH to develop an equitable solution to the use of COH facilities.
 SBCWD also acknowledges that water delivered to the ADRoP well field will be mixed with groundwater as it moves through the COH system. However, when recovered, it is expected that water delivered will be similar in quality as treated water from Lessalt or West Hills that is mixed with groundwater before delivery to the ultimate consumer.

San Benito Urban Areas
Water Supply and Treatment Master Plan Implementation
February 18, 2025

Upcoming Amendment to the Urban Area
Water Supply and Treatment Agreement
Addition of
San Juan
Bautista
Improve
Drought
Resilience

Groundwater Basin Characteristics
•Local groundwater is high in minerals and salts
•High hardness reduces customer satisfaction
•New Chromium-6 concentration limits
•Requires blending of imported water to meet level of service goals •Wastewater discharge controlled by Water Quality Control Board •Imported water needed to maintain compliance with permits Water Source Hardness
(mg/l)
TDS
(mg/l)
Groundwater Quality 300 –500 500 -Over 1500
Imported Water 110 300

Water and Wastewater Master Planning Coordination
City of
Hollister
San Benito
County
San Benito
County
Water District
Governance
Committee
Management
Committee
Sunnyslope
County
Water District
San Juan
Bautista
•MOU for Master Plan was first executed in 2004
•Coordination occurs through SBCWD’s Governance Committee

•Lessalt Treatment Plant
Upgrade
•West Hills Treatment
Plant
•Hollister Wastewater
Reclamation Facility
•Ridgemark Wastewater
Treatment Plant
Master Plan
Accomplishments

2023 Master Plan Update -Key Findings
•Water hardness is key driver -80% imported water blend needed to meet 180 mg/l
•Current water supply is sufficient in normal and wet years •Deficit of 1,200 acre-feet per year in dry and critically dry years •Shortage exists for existing customers

Master Plan Key Recommendations
•Implement the Accelerated Drought Response Project
(ADRoP) to improve drought resilience for existing
customers
•CEQA coverage prohibits use of ADRoP for future growth •Implement treated water transmission pipeline from West Hills WTP to San Juan Bautista –No cost to Hollister or Sunnyslope

Accelerated Drought Response Project (ADRoP)
Purpose: Provide a drought resilient water supply on an expedited timeline to qualify for grant funding
Project Components:
•Expansion of West Hills Water Treatment Plant to 6.75 MGD •5 wells for injection and extraction
•New pipelines and appurtenances
Capital Cost: Current estimate +/-$50 million

ADRoP Grant Funding toward ~$50M Capital Expenditure
Grant Funding Target Grant
Request Grant Award Match
Required
DWR –IRWM $1.8M $1.8M 50%
DWR –SGMA Round 2 $20M $11.5M 0%
USBR –Small Storage ~$9.2M $6.7M 75%
Total Grant Funding $20M
Approximately 40% of the project will be funded through grants.

Key Financing Terms and Cost Recovery Principles
•SBCWD will seek bond sales for the balance of project costs •City of Hollister will be responsible for its share of the principal •SBCWD will pay the interest portion of debt
•Principal payments will be collected with a “Reliability Fee” until the debt is retired
•Reliability Fee is charged to all M&I customers, including those outside the urban area
•Current estimate is $145 per acre-foot ~$50 per year per household •Hollister and Sunnyslope will get a credit for past costs due to San Juan Bautista’s buy-in

Key Financing Terms and Cost Recovery Principles
•SBCWD will carry the raw water cost and variable cost of treatment until water is recovered and delivered
•Use of Hollister’s distribution system will be needed –an equitable solution will be negotiated
•Hollister and Sunnyslope will not pay for pipeline to San Juan Bautista

Next Steps

1.Approve principles of agreement
•Interim step –provides staff authority to negotiate
•No immediate financial commitment

2.Staff to develop contract language

3.Approve and execute amendment

Questions
+
Discussion

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # City Manager-2025-10

AGENDA ITEM: A RESOLUTION AUTHORIZING CITY MANAGER TO PURCHASE SECURITY SERVICES FOR THE 2025 HOLLISTER INDEPENDENCE MOTORCYCLE

RALLY WITHOUT NOTICE, ADVERTISEMENT, OR COMPETITIVE BIDDING, DIRECT CITY

MANAGER TO OBTAIN THREE QUOTES FOR SERVICE, AND EXECUTE THE RESULTING

CONTRACT

DEPARTMENT: City Manager
DEPARTMENT HEAD: David Mirrione, City Manager
STAFF CONTACT: David Mirrione, City Manager

RECOMMENDED ACTION: Approve and authorize the City Manager to purchase security services on behalf of the City without notice, advertisement, or competitive bidding for the 2025 Hollister Independence Motorcycle Rally (“Rally”), direct the City Manager to obtain three quotes for service, and execute the resulting contract.

DISCUSSION: On January 7, 2025, the City of Hollister (“City”) City Council approved and authorized the Rally to be held on the July 4, 2025, weekend. One of the Council’s main Rally objectives is to provide adequate security for City residents, event attendees, and vendors. To achieve this objective, the City must hire a private security firm. In addition to security services, the security firm will provide supplemental security cameras, metal detectors for the beer garden(s), and identification verification scanners at the beer garden(s).

The Rally is fast approaching so, to expedite the purchasing process, this resolution will authorize the City Manager to purchase such security services without notice, advertisement, or competitive bidding, as permitted by Hollister Municipal Code section

3.06.210.

Hollister Municipal Code Section 3.06.210 says that “[e]xcept as directed by the City Council, whenever the amount to be expended for services, material, equipment, or supplies is in excess of $100,000, the Department Head shall advertise for sealed bids…” (emphasis added.) It is expected that Rally security will cost between $100,000 and $200,000 so, unless excepted by the City Council, this purchase requires advertisement for sealed bids. The Rally is fast approaching so the City Manager is requesting the use of an expedited process to hire the security firm. Rather than performing a formal competitive bidding process, the City Manager intends to solicit three quotes from security firms and to award the contract to the lowest firm with the lowest quote.

FISCAL IMPACT: Security Services are estimated to exceed $100,000.

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: N/A

ATTACHMENTS:

1. Resolution

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

AUTHORIZING THE CITY MANAGER TO PURCHASE SECURITY
SERVICES FOR THE 2025 HOLLISTER INDEPENDENCE RALLY

WITHOUT NOTICE, ADVERTISEMENT, OR COMPETITIVE BIDDING

AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE

RESULTING CONTRACT

WHEREAS, on January 7, 2025, the City Council of the City of Hollister (“City”) approved and authorized the 2025 Hollister Independence Rally (“Rally”) to be held on Fourth of July Weekend 2025; and

WHEREAS, one of the City Council’s main objectives regarding the Rally is to provide adequate security for City residents, event attendees, and vendors ; and

WHEREAS, there is not enough time before the Rally for the City to follow formal notice, advertising, and competitive bidding procedures to contract for and purchase security services for the event; and

WHEREAS, pursuant to Hollister Municipal Code section 3.06.260, upon approval of the City Council, the City Manager shall have the power, without notice, advertisement, or competitive bidding, to purchase for and on behalf of the City any supplies, material, equipment, or contractual service; and

WHEREAS, this Resolution will authorize the City Manager to expedite the purchasing process by soliciting three quotes, and awarding the contract to the security firm with the lowest quote, rather than conducting a formal bidding process.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hollister authorizes the City Manager to purchase security services for the 2025 Hollister Independence Rally without notice, advertisement, or competitive bidding and to execute the resulting contract.

Resolution No. 2025-XX

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 18, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on February 18, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # City Manager-2025-12

AGENDA ITEM: A RESOLUTION APPROVING A LEASE WITH SAN BENITO

COUNTY POLYTECHNIC ACADEMY FOR CERTAIN SPACE IN THE BRIGGS

BUILDING AND AUTHORIZE THE CITY MANAGER TO FINALIZE AND EXECUTE

THE LEASE

DEPARTMENT: City Manager
DEPARTMENT HEAD: David Mirrione, City Manager
STAFF CONTACT: David Mirrione, City Manager

RECOMMENDED ACTION: Adopt a resolution approving a Lease Agreement with San Bentio County Polytechnic Academy (“Academy”) for certain space in the Briggs Building and authorize the City Manager to finalize and execute the lease.

DISCUSSION: The Academy has agreed to lease eight thousand two hundred sixty (8,260) square feet of floor area within the Briggs Building located at 365 Fourth Street, Hollister, California to operate a polytechnic high school. The Academy will lease the same space formerly leased by Gavilan College. The Academy is a charter high school serving ninth through twelfth grade. They plan to serve up to 200 students on an average of fifty grade. The Academy plans to begin instruction in the late summer of 2025.

The basic terms of the lease agreement are:

Rent: $24,780.00 per month with an annual increase based on the Consumer Price Index (CPI) published by the United States Department of Labor, Bureau of Labor Statistics, CPI for all urban consumers in the San Francisco-Oakland-San Jose statistical area.

Term: The term shall begin March 1, 2025, and end June 30, 202 7 with the option to extend three (3) one (1) year periods.

Additional Payments: In addition to monthly rent, the Academy will make a $20,000.00 per year annual payment, pay its portion of utilities, and pay for $5,708.06 per quarter for parking. In addition, if the lease is terminated early, the Academy will reimburse the City for the Briggs Building elevator repair.

Parking: The Academy will be allocated up to 35 dedicated parking spaces and will use public parking spaces for any additional parking needs beyond the 35 spaces.

The Academy and the City Manager have agreed to most of the lease agreement language and are just finalizing the fine points. As such, the City Manager also requests that the City Council grant the City Manager authority to finalize and execute the lease agreement. The Academy Board of Trustees has approved the lease agreement subject to minor changes.

FISCAL IMPACT: The City will collect approximately $330,000 to $340,000.00 in lease and related revenue per year depending on the amount of parking spaces that are rented.

PREVIOUS COUNCIL OR COMMISSION ACTION: N/A

CEQA: N/A

ATTACHMENTS:

1. Resolution

2. Draft lease agreement

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING A LEASE WITH SAN BENITO COUNTY POLYTECHNIC

ACADEMY FOR CERTAIN SPACE IN THE BRIGGS BUILDING AND

AUTHORIZE THE CITY MANAGER TO FINALIZE AND EXECUTE THE
LEASE

WHEREAS, the San Benito County Polytechnic Academy (“Academy”) has agreed to lease eight thousand two hundred sixty (8,260) square feet of floor area within the Briggs Building located at 365 Fourth Street, Hollister, California; and

WHEREAS, the lease shall begin March 1, 2025, and end June 30, 2027 with the option to extend the term of the lease for three (3) one (1) year periods; and

WHEREAS, the Academy shall pay Twenty-Four Thousand Seven Hundred Eighty Dollars ($24,780.00) per month in rent with annual consumer price index increases; and

WHEREAS, the Academy shall also make an additional Twenty Thousand Dollar ($20,000.00) annual payment; and

WHEREAS, the Academy shall pay for eighteen (18) to thirty-six (36) dedicated parking spaces and the Academy’s share of the Briggs Building utilities; and

WHEREAS, the lease agreement shall contain various other lease terms to be finalized by the City Manager.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hollister does resolve to approve a lease with the San Benito County Polytechnic Academy for certain space in the Briggs Building and authorize the City Manager to finalize and execute the lease.

Resolution No. 2025-XX
2 PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 18, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on February 18, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

BRIGGS BUILDING LEASE

1. PARTIES.

This Lease, dated as of this first day of March 2025, is made and between the City of Hollister, a municipal corporation (the “City”), and San Benito County Polytechnic Academy, a California charter school (the “Tenant”), each a “Party” and together the “Parties”.

2. PREMISES.

City is the owner of the real property located at 365 Fourth Street, Hollister, California 95023 (the “Property”). The Property has been improved with a building commonly referred to as the Briggs Building (the “Building”), which includes approximately ten thousand (10,000) square feet of office uses on the first floor (the “Office Space”) and approximately one hundred and forty (140) public parking spaces on the second, third, and fourth floors (the “Public Garage”). City does hereby lease to Tenant and Tenant hereby leases from City that certain eight thousand two hundred sixty (8,260) square foot portion of the Office Space (herein called the “Premises”). The location and dimensions of said Premises are delineated on Exhibit “A”, attached hereto and incorporated by reference herein.

In addition, Tenant shall be entitled to (a) the non-exclusive use of any Building common areas for their intended purposes; and (b) the exclusive use of the Actual Tenant Parking Spaces (defined below) pursuant to the terms of Section 27, below. However, Tenant’s non-exclusive of Building areas shall be for entry and exit purposes only. Tenant nor tenant’s employees, students and/or invitees shall not be permitted to congregate in Building common areas.

This Lease is subject to the terms, covenants, and conditions herein set forth and the Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of said terms, covenants, and conditions by it to be kept and performed.

3. TENANT USE.

Tenant shall use the Premises for a charter high school and shall not use or permit the Premises to be used for any other purpose without the prior written consent of City.

4. CITY USE.

Tenant shall permit City to use the Premises and the Building during the City’s Annual Motorcycle Rally (the “Rally”), if any, as a central location for City staff and law enforcement operations. The City shall not allow members of the public to use the Premises and the Building during the Rally. The Rally is held the weekend including, following, or prior to July 4th of each year. City shall notify Tenant of the exact Rally

2 dates by April 1st of each year. Tenant shall permit City to use the Premises and the Building from Thursday through Sunday of said Rally weekend. City shall clean and return the Premises and the Building to its original condition at the end of the Rally weekend.

5. RENT. Tenant shall pay the following amounts to City during the Term (defined below):

5.1 INITIAL RENT PAYMENT. On July 1, 2025, Tenant shall pay One Hundred Twenty-Three Thousand Nine Hundred Dollars ($123,900.00) to City, which amount comprises Twenty-Four Thousand Seven Hundred Eighty Dollars ($24,780.00) for each month from March 2025 through July 2025 (the “Initial Payment”).

5.2 MONTHLY RENT. Commencing on August 1, 2025, and continuing on or before the first day of each and every successive calendar month during the Term, Tenant shall pay City a monthly rent, in advance and without notice or demand, of Twenty-Four Thousand Seven Hundred Eighty Dollars ($24,780.00) (the “Monthly Rent”). The amount of the Monthly Payment shall be subject to adjustment pursuant to Section 5.6 below.

5.3 RENT. Commencing on March 1, 2025, and continuing on or before the first day of each calendar quarter during the Term (March 1st, June 1st, September 1st, and December 1st), Tenant shall pay City the Quarterly Parking Rent, in advance and without notice or demand. As used herein, the term “Quarterly Parking Rent” means and amount equal to One Hundred Fifty-Eight Dollars and Fifty-Six Cents ($158.56) (the “Base Parking Stall Charge”) multiplied by the then-current number of Actual Tenant Parking Spaces (See Section 27, below). The amount of the Base Parking Stall Charge shall be subject to adjustment pursuant to Section

5.6, below.

5.4 ADDITIONAL RENT. Tenant shall pay the following amounts to City (the “Additional Rent”):

a. On or before August 1, 2025, Twenty Thousand Dollars ($20,000.00);

b. On or before August 1, 2026, Twenty Thousand Dollars ($20,000.00); and

c. On or before August 1, 2027, Twenty Thousand Dollars ($20,000.00).

5.5 UTILITIES.

a. Common Utilities. Tenant’s water, sewer, gas, and electric utilities are not separately metered, so Tenant shall pay City a prorated portion, based upon the square footage ratio of the Premises to the square footage of the Office Space of all water, sewer, gas, and electric utilities used in the Office Space (“Tenant’s Common Utility Charges”). City shall provide

3 Tenant with an invoice for each installment of Tenant’s Common Utility Charges, which invoices shall be supported by reasonable back-up. Tenant pays each installment of Tenant’s Common Utility Charges within thirty (30) calendar days after receipt of the applicable invoice. City shall deliver invoices for Tenant’s Common Utility Charges on the first day of each quarter during the Term (August 1st (for utilities used from April through June), November 1st (for utilities used from July through September), February 1st (for utilities used from October through December), and May 1st (for utilities used from January through March).

Notwithstanding the foregoing to the contrary, Tenant’s Common Utility Charges for March of 2025 shall be included in an invoice delivered on or before August 1, 2025.

b. Metered Utilities. Tenant shall pay directly its full share of telephone, internet, and other optional utility services that are separately metered to the Premises.

5.6 ANNUAL INCREASE. The Monthly Rent and the Base Parking Stall Charge are subject to increase during the initial Term and any Extended Term (each defined below) pursuant to this Section 5.6. If the CPI (defined below) published for the then-current April is greater than the CPI published for April of the previous year, then the subject amount shall be increased in the same proportion that the CPI published in the then-current April bears to the CPI published in April of the previous year. For avoidance of doubt, in no event shall the subject amount be subject to reduction pursuant to this Section 5.6. As used herein, the term “CPI” shall mean the Consumer Price Index published by the United States Department of Labor, Bureau of Labor Statistics, CPI for all urban consumers in the San Francisco-Oakland-San Jose statistical area.

If applicable, the first annual increase to the Base Parking Stall Charge shall be applied on June 1, 2025. If applicable, the first annual increase to the Monthly Rent shall be applied on June 1, 2026.

There shall be no increase pursuant to this Section 5.6 to the Initial Rent Payment, Additional Rent, Surrender Rent, or Tenant Common Utility Charges.

5.7 LATE PENALTY. Tenant hereby acknowledges that late payment by Tenant to City of Rent or other sums due hereunder will cause City to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges, which may be imposed upon City by terms of any mortgage or trust deed covering the Premises. Accordingly, if any installment of Rent of any sum due from Tenant shall not be received by City or City’s designee within five (5) days after written notice that said amount is past due, then Tenant shall pay to City a late charge equal to ten percent of such overdue amount, plus

4 any attorneys’ fee incurred by City by reason of Tenant’s failure to pay Rent and/or other charges when due hereunder. The Parties hereby agree that such late charges represent a fair and reasonable estimate of the cost that City will incur by reason of the late payment by Tenant. Acceptance of such late charges by the City does not permit City from exercising any of the other rights and remedies granted hereunder.

6. TERM.

The initial term of this Lease shall be twenty eight (28) months, commencing on March 1, 2025, and expiring on June 30, 2027 (the “Term”).

Tenant shall have the option to extend the Term of this Lease for three (3) one (1) year periods (as applicable, “Extended Term”) by giving written notice to exercise each such option (each, an “Extension Notice”) to City at least six (6) months, but not more than one (1) year, prior to the expiration of the term. If Tenant is in default on the date the Extended Term is to commence, such portion of the Extended Term shall not commence, and this Lease shall expire on the then-current expiration date of the Term.

7. SURRENDER RENT.

In preparation for this Lease and to accommodate Tenant’s occupancy of Premises, the City was required to replace portions of the existing the Building elevator. The cost of the elevator component replacement was approximately five hundred seventy-five thousand dollars ($575,000.00). The Tenant expressly agrees that a portion of the Rent and Annual Payment is to compensate the City for said elevator component replacement.

As such, Tenant agrees that, should this Lease terminate or expire prior to February 28, 2026, City shall suffer financial harm, and that Tenant will compensate City for Tenant’s fair share of the elevator repair by paying the following applicable amount to City on or before the date that this Lease terminates or expires (the “Surrender Rent”).

If this Lease terminates prior to February 28, 2026, Tenant shall pay City a lump sum of Three Hundred Eighty-Nine Thousand Six Hundred Twenty Dollars ($389,620,00.00);

If this Lease terminates prior to February 28, 2027, Tenant shall pay City a lump sum of Two Hundred Twenty-Two Thousand Six Hundred Forty Dollars ($222,640.00);

If Tenant does not exercise the first option to extend the Term, or if Tenant does exercise such first extension option, but this Lease nonetheless terminates prior to February 28, 2028, Tenant shall pay City a lump sum of Fifty-Five Thousand Six Hundred Dollars ($55,600.00); and

If this Lease (as extended) terminates after February 27, 2028, Tenant shall have no obligation to pay any Surrender Rent to City pursuant to this Section 7.

5 8. USES PROHIBITED.

Subject to Tenant’s right to conduct the permitted use set forth in Section 3, above:

a. Tenant shall not do or permit anything to be done in or about the Premises nor bring or keep anything therein which is not within the permitted uses of the Premises or which will in any way increase the existing rate of or affect any fire or other insurance upon the Building or any of its contents, or cause a cancellation of any insurance policy covering said Building or any part thereof or any of its contents;

b. Tenant shall not do or permit anything to be done in or above the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or injure or annoy them or use or allow the Premises to be used for any improper, immoral, unlawful, or objectionable purpose; and

c. Tenant shall not cause, maintain, or permit any nuisance in, on, or about the Premises.

Additionally, Tenant shall not (1) commit or allow to be committed any waste in or upon the Premises or (2) sell or permit to be kept, used, or sold in or about the Premises, hazardous substances or hazardous waste as defined by state or federal law. For purposes of this Section 8, hazardous substances shall not include cleaning supplies, provided that all such materials and equipment are used in strict compliance with all applicable laws and regulations.

9. COMPLIANCE WITH LAW.

Tenant shall not use the Premises or permit anything to be done in or about the Premises, which will in any way conflict with any law, statute, ordinance, or governmental rule or regulation now in force, or which may hereafter be enacted or promulgated. Subject to City’s obligations under this Lease, Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances, and governmental rules, regulations, or requirements now in force, or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to Tenant’s improvements or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether City be a party thereto or not, that Tenant has violated any law, statute, ordinance, or governmental rule, regulation, or requirement shall be conclusive of that fact as between the City and Tenant.

10. CONTRUCTION OF DOOR SEPARATING RESTROOM FACILITIES.

Tenant shall construct, prior to occupancy of the Building or Premises by students, a secured door between the Hollister Police Departments offices and the men’s and women’s restroom facilities in the hall that extends from the City Code Enforcement

6 offices to the Premises with intention of City of Hollister staff to fully access said restrooms 24 hours per day, 365 days per year. The location of the secured door is subject to prior approval by the City Public Works Director. Tenant shall obtain any permits or other permission required prior to construction.

11. ALTERATIONS AND ADDITIONS.

Except as expressly set forth in Sections 10 and 28, Tenant shall not make or allow to be made any alterations, additions, or improvements to or of the Premises or any part thereof without first obtaining the written consent of City and any alterations, additions, or improvements to or of said Premises, including, but not limited to, wall covering, paneling and built-in cabinet work, but excepting movable furniture and trade fixtures, shall at once become a part of the realty and belong to the City and shall be surrendered with the Premises. City shall not unreasonably, withhold, condition, or delay its consent to any requested alteration, addition, or improvements requested by Tenant. In the event City consents to the making of any alterations, additions, or improvements to the Premises by Tenant, the same shall be made by Tenant at Tenant’s sole cost and expense.

Upon the expiration or sooner termination of this Lease, Tenant shall, upon written demand by City, given at least thirty (30) days prior to the end of the term, at Tenant’s sole cost and expense, forthwith and with all due diligence, remove any alterations, additions, or improvements made by Tenant, designated by City to be removed, and Tenant shall, forthwith and with all due diligence, at its sole cost and expense, repair any damage to the Premises caused by such removal.

12. REPAIRS.

By entry hereunder, Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition, and repair. Tenant shall, at Tenant’s sole cost and expense, keep the Premises and every part thereof in good condition and repair (except as hereinafter provided with respect to City’s obligations) including without limitation, the maintenance, replacement, and repair of any storefront, doors, window casements, glazing, and utility improvements (e.g., plumbing, pipes, electrical wiring and conduits, heating and air conditioning system) that solely serve the Premises. If applicable, Tenant shall obtain a service contract for repairs and maintenance of the applicable heating and air conditioning systems, said maintenance contract to conform to the requirements under the warranty, if any, on said systems. Tenant shall, upon the expiration or sooner termination of this Lease hereof, surrender the Premises to the City in good condition, broom clean, ordinary wear and tear, and damage from causes beyond the reasonable control of Tenant excepted. Any damage to adjacent premises caused by Tenant’s use of the Premises shall be repaired at the sole cost and expense of Tenant.

Notwithstanding the provisions of this Section 12, as between City and Tenant, City shall repair and maintain all other portions of the Building, including the structural improvements, exterior walls and roof, unless such maintenance and repairs are caused in whole by the act, neglect, fault, or omission of any duty by the Tenant, its agents, servants, employees, or invitees (collectively, “Tenant Parties), in which case Tenant shall

7 pay to City the actual cost of such maintenance and repairs. City’s maintenance and repair obligations shall include, without limitation, the structural portions of the Building, the exterior walls, the elevator, the roof, the common utility improvements, the Parking Garage, the balance of the Office Space, and the Building common areas. City shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to City by Tenant. Except as provided in section 26 hereof, there shall be no abatement of rent and no liability of City by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances, and equipment therein. Tenant waives the right to make repairs at City’s expense under any law, statute, or ordinance now or hereafter in effect.

Notwithstanding the provisions of this Lease to the contrary, Tenant shall reimburse City for its pro rata share of the maintenance and repair costs incurred by City related to (a) the common utility improvements or (b) damage caused in part (but not in whole) by the act, neglect, fault, or omission of any duty by any of the Tenant Parties within thirty (30) calendar days after receipt of City’s invoice and reasonable back-up for such charges. In the event of a reimbursement under the foregoing clause (a), Tenant’s pro rata share shall be determined on the same basis of Tenant’s Common Utility Charges. In the event of a reimbursement under the forgoing clause (b), Tenant’s pro rata share shall be determined based on the actual percentage of fault allocable to the Tenant Parties.

13. LIENS.

Tenant shall keep the Premises and the property in which the Premises are situated free from any liens arising out of any work performed, materials furnished, or obligations incurred by or on behalf of Tenant. City may require, at City’s sole option, that Tenant shall provide to City, at Tenant’s sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1 ½) times the estimated cost of any improvements, additions, or alterations in the Premises which the Tenant desires to make, to insure City against any liability for mechanics’ and materialmen’s liens and to ensure completion of the work.

14. ASSIGNMENT AND SUBLETTING.

Tenant shall not either voluntarily, or by operation of law, assign, transfer, mortgage, pledge, hypothecate, or encumber this Lease or any interest therein, and shall not sublet the said Premises or any part thereof or any right or privilege appurtenant thereto, or allow any other person (the employees, agents, servants, and invitees of Tenant excepted) to occupy or use the said Premises, or any portion thereof, without first obtaining the written consent of City, which consent shall not be unreasonably withheld. A consent to one assignment, subletting, occupation, or use by one person in no way confers or implies consent to an assignment, subletting, occupation, or use by another person. Consent to any such assignment or subletting shall in no way relieve Tenant of any liability under this Lease. Any such assignment or subletting without such consent shall be void, and

8 shall, at the option of the City, constitute a default under the terms of this Lease.

15. HOLD HARMLESS.

Tenant shall indemnify, defend, and hold harmless City against and from any and all claims, losses, damages, and costs (including reasonable attorneys’ fees) arising from Tenant’s use of the Premises or from the conduct of Tenant’s business or from any activity, work, or other things done, permitted or suffered by the Tenant in or about the Premises, and shall further indemnify and hold harmless City against and from any and all claims arising from any breach or default in the performance of any obligation on Tenant’s part to be performed under the terms of this Lease, or arising from any act or negligence of the Tenant, or any officer, agent, employee, guest, or invitee of Tenant, and from all costs, attorney’s fees, and liabilities incurred in, or about the defense of any such claim or any action or proceeding brought thereon and in case any action or proceeding be brought against City by reason of such claim. Tenant upon notice from City shall defend the same at Tenant’s expense by counsel reasonably satisfactory to City. Tenant, as a material part of the consideration to City, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises, from any cause other than City’s negligence or willful misconduct; and Tenant hereby waives all other claims in respect thereof against City. Tenant shall give prompt notice to City in case of casualty or accidents in the Premises.

City or its agents shall not be liable for any loss or damage to persons or property resulting from fire, explosion, falling plaster, steam, gas, electricity, water, or rain, which may leak from any part of the Building or from the pipes, appliances, or plumbing works therein or from the roof, street, or subsurface, or from any other place resulting from dampness or any other cause whatsoever, unless caused by or due to City’s breach of its obligations under this Lease or the willful misconduct and/or negligence of City, its agents, servants, or employees.

16. SUBROGATION.

As long as their respective insurers so permit, City and Tenant hereby mutually waive their respective rights of recovery against each other for any loss insured by fire, extended coverage, and other property insurance policies existing for the benefit of the respective Parties. Each Party shall apply to their insurers to obtain said waivers. Each Party shall obtain any special endorsements, if required by their insurer to evidence compliance with the aforementioned waiver.

17. LIABILITY INSURANCE.

Tenant shall, at Tenant’s expense, obtain and keep in force during the term of the Lease a policy of commercial general liability insurance (sometimes known as comprehensive public liability insurance) insuring City and Tenant (and, if requested by City, City’s lender, and property manager) against any liability for bodily injury, property damage (including loss of use of property), and personal injury arising out of the ownership, use

9 occupancy, or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in the amount of not less than two million dollars ($2,000,000.00) per occurrence. The limit of any such insurance shall not, however, limit the liability of Tenant hereunder. Tenant may provide this insurance under a blanket policy, provided that said insurance shall have a City’s protective liability endorsement attached thereto.

If Tenant shall fail to procure and maintain said insurance, City may, but shall not be required to, procure and maintain same, but at the expense of Tenant. Insurance required hereunder shall be in companies rated A:XlI or better as set forth in the most current “Best’s Rating Guide.” Tenant shall deliver to City, prior to right of entry, copies of policies of liability insurance required herein or certificates evidencing and amounts of such insurance with loss payable clauses satisfactory to City. All policies and certificates of policies shall provide that no cancellation, reduction, or modification of coverage will occur without thirty (30) days prior written notice to City. All such policies shall be written as primary policies—not contributing with and not in excess of coverage which City may carry.

18. PROPERTY INSURANCE. City, at all times during the Term, will maintain in full force and effect insurance covering the Building in an amount not less than its full replacement value from time to time, including extended replacement cost endorsement, providing protection against any peril included within the classification “Named Perils Coverage,” sprinkler damage, vandalism, malicious mischief, and such other additional perils as covered in an “all-risk” standard insurance policy (the “Property Policy”). A stipulated value or agreed amount endorsement will be obtained in an amount sufficient to prevent City from being deemed a coinsurer. Any policy proceeds will be used for the repair or replacement of the property damaged or destroyed unless this Lease ceases and terminates under the provisions hereof. The City does not hold traditional insurance so the City shall satisfy this Property Insurance requirement through City’s risk pool.

19. PERSONAL PROPERTY TAXES.

Tenant shall pay, or cause to be paid, before delinquency, any and all taxes levied or assessed and which become payable during the term hereof upon all Tenant’s leasehold improvements, equipment, furniture, fixtures, and any other personal property located in the Premises. In the event any or all of the Tenant’s leasehold improvements, equipment, furniture, fixtures, and other personal property shall be assessed and taxed with the real property, Tenant shall pay to City its share of such taxes within ten (10) days after delivery to Tenant by City of a statement in writing setting forth the amount of such taxes applicable to Tenant’s property.

20. RULES AND REGULATIONS.

Tenant shall faithfully observe and comply with rules and regulations that City shall from time to time promulgate and/or modify. The rules and regulations shall be binding upon the Tenant upon delivery of a copy of them to Tenant. City shall not be responsible to Tenant for the non-performance of any said rules and regulations by any other tenants or

10 occupants. Tenant shall exercise their best effort to require employees and students follow City rules and regulations.

21. ENTRY BY CITY.

City reserves, and shall at any and all times have, the right to enter the Premises to inspect the same upon reasonable notice to submit said Premises to prospective purchasers or tenants, to post notices of non-responsibility, to repair the Premises and any portion of the Building of which the Premises are a part that City may deem necessary or desirable, without abatement or rent, and may for that purpose erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, always providing that the entrance to the Premises shall not be unreasonably blocked thereby, and further providing that the business of the Tenant shall not be interfered with unreasonably. For each of the aforesaid purposes, City shall at all times have and retain a key with which to unlock all of the doors in, upon and about the Premises, excluding Tenant’s vaults, safes, and files, and City shall have the right to use any and all means which City may deem proper to open said doors in an emergency, in order to obtain entry to the Premises without liability to Tenant except for any failure to exercise due care for Tenant’s property and any entry to the Premises obtained by City by any of said means, or otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into, or a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof.

22. TENANT’S DEFAULT.

The occurrence of any one (1) or more of the following events shall constitute a default and breach of this Lease by Tenant:

22.1 Vacation or abandonment of the Premises.

22.2 Failure to make any payment of rent or any other payment required to be made hereunder, as and when due, where such failure shall continue for a period of five (5) days after written notice thereof by City to Tenant.

22.3 Failure to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Tenant, other than described in section

22.2, above, where such failure shall continue for a period of thirty (30) days after written notice thereof by City to Tenant; provided, however, that if the nature of Tenant’s default is such that more than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant commences such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion.

22.4 General assignment or general arrangement for the benefit of creditors; or the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt, or a

11 petition or reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty (60) days); or the appointment of a trustee or a receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where such seizure is not discharged within thirty (30) days.

23. REMEDIES IN DEFAULT.

In the event of any such default or breach by Tenant, City may at any time thereafter, in its sole discretion, with or without notice or demand and without limiting City in the exercise of a right or remedy which City may have by reason of such default or breach:

23.1 Terminate Tenant’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate, and Tenant shall immediately surrender possession of the Premises to City. In such event, City shall be entitled to recover from Tenant all damages incurred by City by reason of Tenant’s default including, but not limited to, the cost of recovering possession of the Premises; expenses of reletting, including necessary renovation and alteration of the Premises; reasonable attorney’s fees; the worth at the time of award by the court having jurisdiction thereof of the amount by which the unpaid Rent and other charges called for the balance of the term after the time of such award exceeds the amount of such loss for the same period that Tenant proves could be reasonably avoided:
and that portion of any leasing commission paid by City and applicable to the unexpired term of this Lease. Unpaid installments of Rent or other sums shall bear interest from the date due at the maximum legal rate; or

23.2 Maintain Tenant’s right to possession, in which case this Lease shall continue in effect whether or not Tenant shall have abandoned the Premises. In such event, City shall be entitled to enforce all of City’s rights and remedies under this Lease, including the right to recover the rent and any other charges as may become due hereunder; or

23.3 Exercise any other remedy available to City in law or equity.

24. DEFAULT BY CITY.

City shall not be in default unless City fails to perform obligations required of City within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to City and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing, specifying wherein City has failed to perform such obligations; provided, however, that if the nature of City’s obligation is such that more than thirty (30) days are required for performance then City shall not be in default if City commences performance within such

12 thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate this Lease as a result of City’s default and Tenant’s remedies shall be limited to damages and/or an injunction.

25. RECONSTRUCTION.

In the event the Premises are damaged by fire or other perils covered by the Property Policy, City agrees to forthwith repair same, and this Lease shall remain in full force and effect, except that Tenant shall be entitled to a proportionate reduction of the Rent from the date of damage and while such repairs shall reasonably interfere with the business carried on by the Tenant in the Premises. If the damage is due to the fault or neglect of Tenant or its employees, there shall be no abatement of rent.

In the event the Premises are damaged to any extent as a result of any cause other than the perils covered by the Property Policy, City shall have the option: (1) to repair, reconstruct, or restore the Premises, in which event this Lease shall continue in full force and effect but the Rent shall be proportionately reduced as hereinabove provided in this section during the period of such repair, reconstruction or restoration; or (2) to give notice to Tenant at any time within sixty (60) days after such damage, terminating this Lease as of the date specified in such notice, which date shall be no more than thirty (30) days after the giving of such notice. In the event of giving such notice, this Lease shall expire and all interest of Tenant in the Premises shall terminate on the date so specified in such notice and the Rent, reduced by a proportionate reduction, based upon the extent, if any, to which such damage interfered with the business carried on by Tenant in the Premises, shall be paid up to date of said such termination.

Notwithstanding anything to the contrary contained in this Article, City shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered under this Article occurs during the last twenty-four (24) months of the term of this Lease or any extension thereof.

City shall not be required to repair any injury or damage by fire or other cause, or to make any repairs or replacements of any leasehold improvements, fixtures, or other personal property of Tenant.

Notwithstanding the provisions of this Lease to the contrary, if any casualty (whether insured or uninsured) damages the Premises such that Tenant’s use thereof shall be materially impaired for a period of at least nine (9) months, Tenant shall have the right to terminate this Lease upon written notice to City.

In the event this Lease is terminated pursuant to this Section 25, Tenant shall not be required to pay any Surrender Rent in conjunction with such termination.

26. CONDEMNATION.

13 If all or any part of the Premises shall be taken or appropriated for public or quasi-public use by right of eminent domain with or without litigation or transferred by agreement in connection with such public or quasi-public use, either party hereto shall have the right at its option to terminate this Lease as of the date possession is taken by the condemning authority, provided, however, that before Tenant may terminate this Lease by reason of taking or appropriation as provided hereinabove, such appropriation shall be of such an extent and nature as to substantially handicap, impede or impair Tenant’s use of the Premises. No award for any partial or entire taking shall be apportioned, and Tenant hereby assigns to condemnation, together with any and all rights of Tenant now or hereafter arising in or to the same or any part thereof, provided, however, that nothing contained herein shall be deemed to give City any interest in or to require Tenant to assign to City any award made to Tenant for the taking of personal property (excluding fixtures) belonging to Tenant and/or for the interruption of or damage to Tenant’s business and/or for relocation of Tenant’s business. In the event of a partial taking which does not result in a termination of this Lease, any charges under this Lease shall be abated in the proportion which the part of the Premises so made unusable bears to the rented area of the Premises immediately prior to the taking. No temporary taking of the Premises and/or of Tenant’s rights therein or under this Lease shall terminate this Lease or give Tenant any right to any abatement of rent thereunder; any award made to Tenant by reason of any such temporary taking shall belong entirely to Tenant and City shall not be entitled to share therein.

27. PARKING.

The Parties acknowledge that the Parking Garage includes 140 parking stalls in total, approximately seventy (70) of which may be rented to new specific users for monthly parking (the “Monthly Spaces”).

Parking shall only be in the spaces designated by the City. City will designate thirty-five (35) Monthly Spaces on the top floor of the Parking Garage and one (1) disabled person parking space on the second floor, near the existing disabled person parking spaces, for Tenant’s use pursuant to the procedures set forth below. City shall have the option, in its sole discretion and at its own cost, to relocate the designated parking spaces.

Tenant shall have the right to the exclusive use of up to thirty-six (36) of the Monthly Spaces during the Term (the “Potential Tenant Parking Spaces”). The Potential Tenant Parking Spaces that Tenant exercises its right to use during the Term are referred to herein as the “Actual Tenant Parking Spaces”. Tenant hereby exercises its rights to use eighteen (18) Potential Tenant Parking Spaces as the “Initial Actual Tenant Parking Spaces” for the Term. Tenant may increase (but not decrease) the number of Actual Tenant Parking Spaces by providing City with written notice of the additional Potential Tenant Parking Spaces that Tenant desires to add to the Actual Tenant Parking Spaces on or before, as applicable, each January 1, April 1, July 1, and October 1 (each a “Quarterly Notice Date”) during the Term and such increase shall be effective on the first day of the first month after such Quarterly Notice Date (i.e., February 1, May 1, August 1 and

14 September 1). However, if Tenant is required to do so by State or local requirements, Tenant shall lease thirty-five (35) parking stalls.

City reserves the right to change the entrances, exits, traffic lanes, and the boundaries and locations of such parking area or areas.

27.1 The City shall keep said automobile parking and common areas in a neat, clean, and orderly condition and shall repair any damage to the facilities thereof.

27.2 Tenant agrees to comply with such reasonable rules and regulations for parking as the City may adopt from time to time for the orderly and proper operation of said parking areas.

28. SIGNS.

Tenant may affix and maintain upon the glass panes and supports of the show windows and within twelve (12) inches of any window and upon the exterior walls of the Premises only such signs, advertising placards, names, insignia, trademarks, and descriptive material as shall have first received the written approval of the City as to type, size, color, location, copy nature, and display qualities. Anything to the contrary in this Lease notwithstanding, Tenant shall not affix any sign to the roof. Tenant shall, however, erect two (2) signs on the Premises to replace current Galivan College signs not later than the date Tenant opens for business, in accordance with a design to be prepared by Tenant in accordance with City’s sign criteria and shall be subject to the approval of City in its proprietary capacity, which approval shall not be unreasonable, withheld, conditioned, or delayed.

29. DISPLAYS.

The Tenant may not display or sell merchandise or allow grocery carts or other similar devices within the control of Tenant to be stored or to remain outside the defined exterior walls and permanent doorway of the Premises. Tenant further agrees not to install any exterior lighting, amplifiers, or similar devices or use in or about the Premises any advertising medium, which may be heard or seen outside the Premises, such as flashing lights, searchlights, loudspeakers, phonographs, or radio broadcasts.

30. AUCTIONS.

Tenant shall not conduct or permit to be conducted any sale by auction in, upon, or from the Premises, whether said auction be voluntary, involuntary, pursuant to any bankruptcy or other insolvency proceeding. The foregoing shall not prohibit Tenant from conducting typical academic fundraising activities at the Premises.

31. HOURS OF BUSINESS.

15 Tenant shall only operate during the usual hours established by the San Benito County Polytechnic Academy.

32. HOLDING OVER.

If Tenant should hold possession of the Premises, or any part thereof after the expiration of the term of this Lease, or any renewal or extension hereof, then such holding over shall constitute a tenancy from month to month, upon the same terms, covenants, and conditions contained herein so far as are applicable.

33. GENERAL PROVISIONS.

33.1 Exhibits. Exhibits, schedules, riders, and addenda, if any, affixed to this Lease are a part hereof.

33.2 Waiver. The waiver by City of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant, or condition, or any subsequent breach of the same or any other term, covenant, or condition herein obtained. The subsequent acceptance of Rent and other charges hereunder by City shall not be deemed to be a waiver of any preceding default by Tenant of any term, covenant, or condition of this Lease, other than the failure of the Tenant to pay the particular rental so accepted, regardless of City’s knowledge of such preceding default at the time of the acceptance of such Rent.

33.3 Joint Obligation. If there be more than one Tenant, the obligations hereunder imposed shall be joint and several.

33.4 Headings. The Section headings of this Lease are not a part of the Lease and shall have no effect upon the construction or interpretation of any part hereof.

33.5 Time. Time is of the essence of this Lease and each and all of its provisions in which performance is a factor.

33.6 Successor and Assigns. The covenants and conditions herein contained, subject to the provisions as to assignment, apply to and bind the heirs, successors, executors, administrators, and assigns of the Parties hereto.

33.7 Recordation. Neither City nor Tenant shall record this Lease, but a short form memorandum hereof may be recorded at the request of City.

33.8 Quiet Possession. Upon Tenant paying the Rent reserved hereunder and observing and performing all of the covenants, conditions, and provisions on Tenant’s part to be observed and performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof subject to all the provisions of this Lease.

16 33.9 Prior Agreements. This Lease contains all of the agreements of the parties hereto with respect to any matter covered or mentioned in this Lease, and no prior agreements or understanding pertaining to any such matters shall be effective for any purpose. No provisions of this Lease, and no prior agreements or understanding pertaining to any such matters, shall be effective for any purpose.

No provision of this Lease may be amended or added except by an agreement in writing signed by the Parties hereto or their respective successors in interest. This Lease shall not be effective or binding on any party until fully executed by both Parties hereto.

33.10 Inability to Perform. This Lease and the obligations of the Tenant hereunder shall not be affected or impaired because the City is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause beyond the reasonable control of the City.

33.11 Partial Invalidity. Any provision of this Lease which shall prove to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof and such other provision shall remain in full force and effect.

33.12 Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, whenever possible, be cumulative with all other remedies at law or in equity.

33.13 Choice of Law. This Lease shall be governed by the laws of the State of California.

33.14 Attorneys’ Fees. In the event of any action or proceeding brought by either Party against the other under this Lease, the prevailing Party shall be entitled to recover its expenses and costs, including its attorneys’ fees and expert witness fees in such action or proceeding, including costs of appeal, if any, in such amount as the court may adjudge reasonable.

33.15 Sale of Premises by City. In the event of any sale of the Premises by City and provided that the purchaser expressly assumes (in writing) all of City’s obligations under this Lease first arising after consummation of such sale, City shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence, or omission occurring after the consummation of such sale; and the purchaser, at such sale or any subsequent sale of the Premises shall be deemed, without any further agreement between the Parties or their successors in interest or between the Parties and any such purchaser, to have assumed and agreed to carry out any and all of the covenants and obligations of the City under this Lease.

17 33.16 Subordination, Attornment. Upon request of the City and subject to the applicable lender’s obligation to enter into a standard, written non-disturbance agreement with Tenant, Tenant will in writing subordinate its rights hereunder to the lien of any mortgage or deed of trust, to any bank, insurance company, governmental agency, or other lending institution, now or hereafter in force against the Premises, and to all advances made or hereafter to be made upon the security hereof.

i. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by the City covering the Premises, the Tenant shall attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the City under this Lease.

ii. The provisions of this section to the contrary notwithstanding, and so long as Tenant is not in default hereunder, this Lease shall remain in full force and effect for the full term hereof.

33.17 Notices. All notices and demands which may or are to be required or permitted to be given by either party on the other hereunder shall be in writing. All notices and demands by the City to the Tenant shall be sent by certified United States mail, postage prepaid, addressed to the Tenant at the Premises, and to the address hereinbelow, or to such other place as Tenant may from time to time designate in a notice to the City. All notices and demands by the Tenant to the City shall be sent by certified United States mail, postage prepaid, addressed to the City at the address set forth herein, and to such other person or place as the City may from time to time designate in a notice to the Tenant.

To City: City of Hollister
375 Fifth Street
Hollister, CA 95023

To Tenant: San Benito Polytechnic Academy
790 Bolsa Road
Hollister, California 95023

33.18 Estoppel Certificates. Either Party (the “Certifying Party”) shall at any time and from time to time, upon not less than three (3) days prior written notice from the other Party (the “Requesting Party”), execute, acknowledge, and deliver to the Requesting Part a statement in writing (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect), and the date to which the Rent and other charges are paid in advance, if any, and (b) acknowledging that there are not, to the Certifying Party’s knowledge, any uncured defaults on the part of the Requesting Party hereunder, or specifying such defaults if any are claimed, and (c) setting forth the date of commencement of

18 rents and expiration of the term hereof. Any such statement may be relied upon by the prospective purchaser or encumbrancers of all or any portion of the real property of which the Premises are a part.

33.19 Authority of Tenant. Each individual executing this Lease on behalf of Tenant represents and warrants that he or she has full authority to do so and that this Lease binds the Tenant.

34. NONDISCRIMINATION.

Tenant herein covenants by and for the Tenant and Tenant’s heirs, personal representatives, and assigns, and all persons claiming under the Tenant or through the Tenant that discrimination against or segregation of any person or of a group of persons on account of race, color, creed, religion, sex, sexual orientation, marital status, national origin, ancestry, disability, age, or other arbitrary factor in violation of federal, state, and local law in the provision of services in the Premises; employment in the Premises; leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the Premises nor shall the Tenant or any person claiming under or through the Tenant establish or permit any such reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Premises herein leased.

35. COMPLIANCE.

The Parties hereto agree to comply with all applicable federal, state, and local laws, regulations, codes, ordinances, and administrative orders having jurisdiction over the Parties, property, or the subject matter of this Lease, including, but not limited to, the 1964 Civil Rights Act and all amendments thereto, the Foreign Investment in Real Property Tax Act, the Comprehensive Environmental Response Compensation and Liability Act, and the Americans with Disabilities Act.

36. EXHIBITS.

Attached hereto and made part of this lease: Exhibit “A” (Site Plan).

CITY: TENANT:

By: By:

Roxanne Stephens, Mayor Dr. Ariel Hurtado, Board Chair

Its: Its:

19 Date: Date:

20 EXHIBIT “A”

Site Plan

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # City Manager-2025-11

AGENDA ITEM: A RESOLUTION APPROVING AN INTERFUND TRANSFER FROM

THE HOLLISTER PARK DEDICATION FUND DEVELOPMENT IMPACT FEE FUND

TO THE BRIGGS BUILDING ENTERPRISE FUND

DEPARTMENT: City Manager
DEPARTMENT HEAD: David Mirrione, City Manager
STAFF CONTACT: David Mirrione, City Manager

RECOMMENDED ACTION: Adopt a resolution approving an interfund transfer from the City of Hollister Park Dedication Fund development impact fee fund to the Briggs Building enterprise fund.

DISCUSSION: The City Manager has negotiated a lease agreement, which will be considered separately by the City Council, with the San Benito County Polytechnic Academy (the “Academy”), whereby the Academy will lease the former Gavilan College suite in the Briggs Building from the City. In preparation for the lease, the City needs to replace portions of the existing elevator. The elevator is twenty-nine (29) years old, so although the elevator has been regularly maintained, it is in need of renovation. The cost of the elevator component replacement is estimated to be $575,000.00. The Br iggs Building operates as an enterprise fund but has an insufficient fund balance to pay for the elevator component replacement.

The Park Dedication development impact fee fund currently has an estimated balance as of December 31, 2024 of $10,739,858 and does not anticipate needing the funds to be loaned to complete any development impact fee identified projects in the next three (3) years. As such, the City Manager is recommending the City Council authorize a loan from the Park Dedication development impact fee fund to the Briggs Building enterprise fund. The City Manager is recommending a term of three (3) years for the interfund loan from the Park Dedication development impact fee to the Briggs Building enterprise fund.

The California Mitigation Fee Act (the “Act”) governs, among other things, the collection and expenditure development impact fees. The Act expressly permits the lending of development impact fees but requires that the interfund loan be reported, including the amount of the loan, the date on which the loan will be repaid, and the rate of interest that the Briggs Building enterprise fund will receive on the loan. (Gov. Code, § 66006 (b)(1)(G).)

The City’s Fiscal and Budget Policies are included in the City’s annual budgets and sets forth the City’s requirements for interfund loans (“Interfund Loan Policy .”) In short, the Interfund Loan Policy permits interfund loans with City Council approval and with the caveat that the loan is properly accounted for.

The proposed terms of the loan from the Park Dedication Development Impact fee fund to the Briggs Building enterprise fund are:

Loan to: Briggs Building Fund (Fund #680)
Loan from: Park Dedication Fund (Fund #205)
Loan Amount: $575,000.00
Interest: $26,565.00
Fund Date: March 1, 2025
Payment Start Date: February 18, 2026
Term: Three (3) years
Interest rate: 4.62% simple interest per annum (December 2024 LAIF interest rate)

Payment Schedule:
 $200,521.67 – Payment 1 of 3 due no later than 2/18/2026  $200,521.67 – Payment 2 of 3 due no later than 2/18/2027  $200,521.66 – Payment 3 of 3 due no later than 2/18/2028

The terms of the lease require the Academy to pay a premium on the monthly lease payment to pay for the elevator component replacement. The proceeds from the lease payments will be pledged to repay the interfund loan.

FISCAL IMPACT: The Park Dedication development impact fee fund will earn approximately $25,565 in interest from the loan.

PREVIOUS COUNCIL OR COMMISSION ACTION: None.

CEQA: N/A

ATTACHMENTS:

1. Resolution

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER

APPROVING AN INTERFUND TRANSFER FROM THE HOLLISTER

PARK DEDICATION FUND DEVELOPMENT IMPACT FEE FUND TO THE

BRIGGS BUILDING ENTERPRISE FUND

WHEREAS, the City of Hollister owns certain real property located at 365 Fourth Street, Hollister, California, commonly known as the “Briggs Building”; and

WHEREAS, the Briggs Building elevator is twenty-nine (29) years old and, thus, is in need of renovation; and

WHEREAS, the City Manager has negotiated a lease agreement with the San Benito County Polytechnic Academy (the “Academy”) and , as part of that lease agreement, the Academy has agreed to pay a lease premium to renovate the Briggs Building elevator; and

WHEREAS; the Briggs Building operates as a n enterprise fund and currently has insufficient fund balance to pay for the elevator renovation, which is estimated to cost five hundred seventy-five thousand dollars ($575,000.00); and

WHEREAS, the City’s Park Dedication development impact fee fund currently has an estimated balance of ten million, seven hundred and thirty nine thousand eight hundred and fifty seven dollars and sixty four cents ($10,739,857.64) as of December 31, 2024 and does not anticipate needing those funds to complete any development impact fee identified projects in the next three (3) years; and

WHEREAS, the California Mitigation Fee Act (the “Act”) governs, among other things, the collection and expenditure of development impact fees, and the Act expressly permits the lending of development impact fees but requires that loans from development impact fee funds be reported, including the amount of the loan the date on which the loan will be repaid and the rate of interest that the enterprise loan will be paid for the loan (Gov. Code, § 66006 (b)(1)(G)); and

WHEREAS, the City’s Fiscal and Budget Policies permit interfund loans with City Council approval if the loan is properly accounted for.

NOW, THEREFORE, BE IT RESOLVED:

1. The City Council approves an interfund loan from the City Park Dedication Development impact fee fund to the Briggs Building enterprise fund upon the following terms:

Resolution No. 2025-XX

Loan to: Briggs Building Fund (Fund #680)
Loan from: Park Dedication Fund (Fund #205)
Loan Amount: $575,000.00
Interest: $26,565.00
Fund Date: March 1, 2025
Payment Start Date: February 18, 2026
Term: Three (3) years
Interest rate: 4.62% simple interest per annum (December 2024 LAIF interest rate)

Payment Schedule:
 $200,521.67 – Payment 1 of 3 due no later than 2/18/2026  $200,521.67 – Payment 2 of 3 due no later than 2/18/2027  $200,521.66 – Payment 3 of 3 due no later than 2/18/2028

2. The Administrative Services Department is hereby directed to properly account for the interfund loan.

3. The City shall repay the loan from proceeds of rent from the City’s Briggs Building lease to the Academy.

PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held on February 18, 2025, by the following vote:

AYES:

NOES:

ABSTAINED:

ABSENT:

Roxanne Stephens, Mayor

ATTEST: APPROVED AS TO FORM:

Lozano Smith Attorneys at Law

____
Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney

Resolution No. 2025-XX

I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2025-XX is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on February 18, 2025, at which meeting a quorum was present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister on February 18, 2025.

Jennifer Woodworth, MMC
City Clerk of the City of Hollister

STAFF REPORT

HOLLISTER CITY COUNCIL
MEETING DATE: February 18, 2025
REPORT # Community Development-2025-08

AGENDA ITEM: OUT OF JURISDICTION SERVICES DISCUSSION

DEPARTMENT: Community Development
DEPARTMENT HEAD: Rod Powell, Assistant City Manager
STAFF CONTACT: Eva Kelly, Planning Manager

RECOMMENDED ACTION: Receive the presentation and provide direction to staff.

DISCUSSION: At the January 21, 2025 City Council meeting, the Council requested staff to return an item for discussion regarding the provision of city services – particularly sewer services - to properties located outside of the City’s jurisdictional boundary.

Currently, the City’s Municipal Code does not include specific standards or regulations regarding requests to connect a property located outside of the City Limits to the City’s utility systems. This lack of specific, adopted regulations and procedures has resulted in inconsistencies in how past applications for requested City services have been reviewed and approved.

As a result of the lack of adopted regulations that would establish a local policy and provide clarity of applicable requirements, the City follows the guidance of Government Code Section 56133, which regulates the Local Agency Formation Commission (LAFCO) in their review and approval of an out of jurisdictional service request.

The City’s past practice in considering out of jurisdictional boundary service requests generally consists of the following steps:

1 Applicant submits an inquiry to the Community Development and/or Public Works/Engineering Department and pays an adopted processing fee. 2 City staff review the request for accuracy of the location of nearby service lines, evaluates any potential emergency declaration letter from the San Benito County Health Department (for failing sewer/septic or water service, for example), and prepares an Out of Jurisdiction Service Agreement in coordination with the City Attorney’s office.
3 Out of Jurisdiction Service Agreement is reviewed and signed by property owner.
4 Out of Jurisdiction Service Agreement is brought before the City Council for consideration and approval along with a resolution authorizing staff to submit the required LAFCO application.
5 If approved by Council, a LAFCO application is prepared and submitted to initiate LAFCO’s process for consideration.
6 LAFCO considers the application and makes a final decision on the provision of services to an out-of-jurisdiction property.

A lack of clear policy clarifying the circumstances and requirements involved in seeking consideration for the provision of City services to properties located outside of the City’s jurisdiction complicates the efficient processing of such requests and causes confusion for applicants and staff. Adoption of a clear policy to guide the process and provide standards for when out-of-jurisdictional services would be of great assistance to both applicants and staff and could also standardize any terms and conditions applicable to the preparation of an agreement between the City and property owner(s) as it relates to the provision of services.

For perspective in regard to the authority of LAFCO to approve an out-of-jurisdiction service request, Government Code Section 56133 is stated below, in its entirety. It should be noted that within this section of the government code, the term “commission” refers to the Local Agency Formation Commission, and “executive officer” refers to the Executive Director of LAFCO.

Government Code Section 56133

(a) A city or district may provide new or extended services by contract or agreement outside its jurisdictional boundary only if it first requests and receives written approval from the commission of the county in which the affected territory is located.
(b) The commission may authorize a city or district to provide new or extended services outside its jurisdictional boundary but within its sphere of influence in anticipation of a later change of organization.
(c) The commission may authorize a city or district to provide new or extended services outside its jurisdictional boundary and outside its sphere of influence to respond to an existing or impending threat to the health or safety of the public or the residents of the affected territory if both of the following requirements are met:
(1) The entity applying for approval has provided the commission with documentation of a threat to the health and safety of the public or the affected residents.
(2) The commission has notified any alternative service provider, including any water corporation as defined in Section 241 of the Public Utilities Code, that has filed a map and a statement of its service capabilities with the commission.
(d) The executive officer, within 30 days of receipt of a request for approval by a city or district to extend services outside its jurisdictional boundary, shall determine whether the request is complete and acceptable for filing or whether the request is incomplete. If a request is determined not to be complete, the executive officer shall immediately transmit that determination to the requestor, specifying those part of the request that are incomplete and the manner in which they can be made complete. When the request is deemed complete, the executive officer shall place the request on the agenda of the next commission meeting for which adequate notice can be given but not more than 90 days from the date that the request is deemed complete, unless the commission has delegated approval of requests made pursuant to this section to the executive officer. The commission or executive officer shall approve, disapprove, or approve with conditions the extended services. If the new or extended services are disapproved or approved

with conditions, the applicant may request reconsideration, citing the reasons for reconsideration.
(e) This section does not apply to any of the following:
(1) Two or more public agencies where the public service to be provided is an alternative to, or substitute for, public services already being provided by an existing public service provider and where the level of service to be provided is consistent with the level of service contemplated by the existing service provider.
(2) The transfer of nonpotable or nontreated water.
(3) The provision of surplus water to agricultural lands and facilities, including, but not limited to, incidental residential structures, for projects that serve conservation purposes or that directly support agricultural industries.

However, prior to extending surplus water service to any project that will support or induce development, the city or district shall first request and receive written approval from the commission in the affected county. (4) An extended service that a city or district was providing on or before January 1, 2001.
(5) A local publicly owned electric utility, as defined by Section 224.3 of the Public Utilities Code, providing electric services that do not involve the acquisition, construction, or installation of electric distribution facilities by the local publicly owned electric utility, outside of the utility’s jurisdictional boundary.
(6) A fire protection contract, as defined in subdivision (a) of Section 56134.

FISCAL IMPACT: None.

PREVIOUS COUNCIL OR COMMISSION ACTION:

CEQA: This report does not constitute a project subject to CEQA.

ATTACHMENTS:

1. Out-of-jurisdiction service presentation

February 18, 2025
City of Hollister
Planning Division
1 OUT OF JURISDICTION SERVICES

January 21, 2025 City Council request
City currently has no adopted policy/procedures
Follow the general guidance of Government Code
Section 56133, which regulates Local Agency Formation
Commission (LAFCO) authority
2 OUT OF JURISDICTION SERVICE REQUESTS

Step Description
1 Applicant submits an inquiry to the Community Development and/or Public Works/Engineering Department and pays adopted processing fees 2 City staff review request
-Accurate location/availability of nearby service connections -Emergency declaration information from Environmental Health Department as applicable
-Prepare draft Out of Jurisdiction Service Agreement
3 Service Agreement is reviewed and signed by property owner 4 Service Agreement brought before Council for consideration and approval -Council also must authorize submittal of application to LAFCO 5 If approved: application is prepared and submitted to LAFCO 6 LAFCO considers and makes final decision on the extension of services 3 PROCEDURES GENERALLY

Subsection (b): LAFCO may authorize an extension of
services within the jurisdiction’s adopted Sphere of
Influence with the anticipation of later annexation
Subsection (c): LAFCO may authorize an extension of
services outside the jurisdiction’s adopted Sphere of
Influence if both of the following are true:

1.There is a threat to the health and safety of the
public/residents; and

2.LAFCO notifies any alternative service providers
4 GOVERNMENT CODE SECTION 56133

HOLLISTER CITY COUNCIL

REQUEST FOR FUTURE AGENDA ITEM
Council member(s) requesting item
(no more than two):

Topic to be Discussed:

Recommended City Council Action:

Background information, such as reasoning for recommended Council action, justification for placing on the agenda, etc.:

Requested date of discussion (minimum of four weeks from the date of the request):
☐Mayor Stephens
☐Councilmember Picha, District 1
☐Councilmember Resendiz, District 2
☐Councilmember Morales, District 3
☐Councilmember De Anda, District 4
4 Explore development of a lobbying ordinance and program similar to the ordinance recently adopted by the County of San Benito.

Receive a presentation on the County of San Benito's lobbying ordinance and program, hold a discussion on how a similar ordinance and program could be developed for the City of Hollister, and provide satff possible direction.

The San Benito County Lobbyist Ordinance aims to increase transparency and accountability in government decision-making. It requires individuals and organizations that lobby County officials to register and disclose their activities, including who they represent, how much they spend, and who they contact.

I am requesting that the city council explore developing and implementing a similar program for the City of Hollister.

April 5, 2025
Docusign Envelope ID: E0439134-8277-4CE2-8596-B658900E0CBB

Select the Applicable Strategic Goal(s) and list any Applicable Objective(s) City Council Goal: ☐ Infrastructure
Applicable Objective(s):

City Council Goal: ☐ Budget, Finances & Economic Development Applicable Objective(s):

City Council Goal: ☐ Quality of Life and Public Safety
Applicable Objective(s):

City Council Goal: ☐ Community Engagement, Education, and Transparency Applicable Objective(s):
4 Docusign Envelope ID: E0439134-8277-4CE2-8596-B658900E0CBB Transparency

City Council Agenda Request Tracking
1 12/3/2024 2/4/2025 Burns Repair or replace sidewalks in Sunnyslope Village (to be included in Q2 budget
presentation)
Infrastructure
Budget, Finances, & Economic Development
Quality of Life & Public Safety
2/4/2025
2 12/17/2024 1/7/2025 de Anda Change Council regular meeting to first and third Mondays at 6:30 p.m.

Quality of Life & Public Safety
Community Engagement, Education &
Transparency
1/21/2025
3 12/17/2024 1/21/2025 Picha Presentation on Community Workforce Agreement
Infrastructure
Budget, Finances, & Economic Development
2/4/2025
4 12/17/2024 1/7/2025 Resendiz Form Fire Services Contract Negotiations Ad Hoc Committee
Infrastructure 1/7/2025
5 12/17/2024 1/7/2025 Stephens Authorization of 2025 Hollsiter Independence Rally
Budget, Finances, & Economic Development
Quality of Life & Public Safety
1/7/2025
6 1/7/2025 2/4/2025 Resendiz Rescind Resolution 2024-170 Infrastructure Budget, Finances, & Economic Development
1/21/2025
7 1/7/2025 2/4/2025 Stephens Comprehensive mid-year budget presentation
Budget, Finances, & Economic Development 2/4/2025
8 1/21/2025 2/18/2025 Resendiz Restricting city services to only within city limits
Infrastructure TBD
9 2/4/2025 3/3/2025 Morales Immigration Quality of Life & Public Safety Community Engagement, Education &
Transparency
N/A
10 2/4/2025 3/17/2025 Resendiz Designation of Downtown Hollister as an Entertainment District
Quality of Life & Public Safety N/A
11 2/4/2025 3/3/2025 de Anda Presentation by Jovenes de Antano Quality of Life & Public Safety Community Engagement, Education &
Transparency
N/A
Date Completed#Request Date Discussion Date Requestor Agenda Item Requested Applicable Strategic Goal(s)